In the one item-coffee- where a full comparison of prices is possible, it is found that France paid 2.125 francs per pound in 1891 and 2.45 francs in 1895; that England paid 19.3 cents in 1891 and 22.8 cents in 1895; and that the United States paid 18 cents in 1891 and 16.9 cents in 1895. Yet the greatest increase in exports has been to the United States instead of to those markets where better prices could be obtained in 1895 than were recorded in 1891. Puzzling as is this showing, it is not explained by an examination of the import prices of other articles brought into the United States from Mexico. Thus, coal was valued at $3.306 a ton in 1891 and $2.015 in 1895; sisal grass at $106.64 per ton in 1891 and $57.60 in 1895; tobacco leaf at 44 cents per pound in 1891 and 23 cents in 1895; and vanilla beans at $4.07 per pound in 1891 and $4.34 in 1895. The conclusions to which these comparisons point are: (1) that the trade returns are very fallible; (2) that the differences are largely due to variations in the custom-house methods of reporting prices; and (3) that the French system of official valuations of imports and exports may lead to remarkable results. The commercial returns of any country, when examined in the same way, give the same contradictions and inexplicable differences; and the confusion becomes even greater when the returns of different countries are compared. From them it is impossible to determine the presence of such a factor as a fluctuating medium of exchange — much less to determine an even probable effect upon prices. The commercial conditions. of Mexico, China and British India as countries using silver, and those of Argentina and Brazil as countries using irredeemable paper, present no common characteristic when prices, in detail or in the average, are compared with the price of silver or the agio on exchange. This lack of proof that the presence of a depreciated currency has stimulated the export trade of these countries permits the substitution of an explanation of current commercial relations which appears more reasonable and better justified by facts. It is, then, the recent transfor mation of economic conditions that has led to increased exportations from these South American and Asiatic communities. Much significance attaches to the fact that the products of silver-using countries are such as stand apart economically from those of gold-using countries. This alone should make us cautious about accepting a free comparison of the statistics of the trade of the two groups as proof of the stimulating effect of a depreciating currency on exports. Look at the principal exports of these Eastern and South American countries: Argentina wheat, wool, meat products. Brazil: coffee, sugar. China: : Colombia coffee, earth-nuts, silver ore, cacoa, caoutchouc. Guatemala: coffee, silver, fruit, hides. Japan: silk, tea, rice. Uruguay meat products, hides, tallow, wool. It requires only a superficial examination of this list to show that the development of trade in all of these commodities can be explained on purely economic grounds, without resort to any influence of a depreciating or appreciating currency. Even more significant is the fact that in Europe the dominant feature of economic progress during the last generation has been the application of machinery in every line where human labor could be superseded. The result has been that the enormously increased output of goods at greatly reduced prices has led to increased consumption of manufactured articles; and this has been accompanied by a distinct decay in the ability to grow much of what is required to feed this machine power, as well as the labor employed in caring for and directing it. It is not a mere accident that has led to agrarian agitation in nearly every country of Europe and even in the United States. In populous communities intensive farming must be the rule. They cannot with profit devote to the culture of cereals, or to the raising of cattle for beef or of sheep for wool, the enormous tracts of land available at little or no cost in new and sparsely settled communities. The history of wheat culture in the United States is ample proof of this. The same influence that has so materially modified the economic conditions of sections acts as powerfully on the distribution of production throughout the world. The cultivation of many drugs, dyes, tropical fruits and similar products, used in the arts or for food, cannot be conducted in Europe or in the United States with any profit. For every advance in population and industrial power a nation pays something, and such a payment has recently been exacted from the wheat cultivators and cattle raisers of Europe and the United States. The one great feature of the recent growth of continental Europe, then, has been its advance in industrialism. The time was—and within the memory of persons now living - when England enjoyed almost a monopoly of the factory system. On the continent household and hand production was the rule. All this has changed. Even in Russia and Switzerland, still famous for their house industries, machinery has won a complete victory, and not only makes the country independent of foreign supplies of many manufactured goods, but results in a surplus for sale abroad. This new industrial power must be fed, and only in the newer communities can the space be found for growing the raw materials for food and manufactures. This is, to my mind, the cause of increased exports from the more sparsely settled communities. The demand upon the extractive industries has so far increased as to require new sources of supply and production upon a vaster scale. Given a restricted territory, the production of the raw material for an industry could never keep pace with the requirements of machine consumption, unless the field of production was originally laid out on magnificent lines and constituted a practical monopoly. The growth of cotton in the United States is such a natural monopoly; and it is hardly conceivable that there should ever be such an increase in the number of spindles in the home cotton industry as to approach an exhaustion of the supply. The production of wool in Europe and the United States, on the other hand, has in recent years declined, because the land in those countries has become too valuable to be used for sheep runs and other countries have offered greater advantages in the raising of wool. This article occupies in the economy of Europe and the United States a position similar to that of wheat in England: it is cheaper to buy it abroad than to undertake to obtain all the needed supply from home sources. Australia, on the contrary, is as naturally adapted to the cheap production of fine wools as Argentina is to the production of wheat or the raising of cattle. Furthermore, the tea of India, the silk of Japan, the coffee of South America and the peculiar products of the East stand upon the same economic basis as the wool of Australia or the wheat of Argentina. The increasing needs of Europe and the United States for these products have resulted in increased production. After a minute study of the trade in many individual articles of special lines of products, I have failed to discover a general influence such as some claim has been exerted by the fall in the commercial price of silver. Results apparently flowing immediately from that influence on the commerce of one country fail to materialize in the commercial relations of another country having much the same conditions of trade and exchanges. Comparisons of prices and of the statistics of trade of various countries yield no definite conclusions. I cannot but conclude, therefore, that the recent movements in commerce are due to a cause other than the fluctuations in silver, and that the presence of a silver monetary unit has no immediate action in stimulating exports. Whatever influence it does exert is too small to be isolated from other and more important influences. If, then, silver has little or no influence on trade, has it any influence or function in trade? This distinction is important. In international trade silver is a commodity, bought and sold like any other commodity, such as wheat, iron or copper. As such this metal has at no time played so important a rôle in the foreign commerce of the United States as at present. The domestic production and the commercial movement of silver are shown in the following table: Silver is one of the most important of the metallic products of the United States, for its yearly production is exceeded in value only by the outputs of iron, gold and copper. It is also one of the chief articles of export, for it is surpassed in importance only by cotton, provisions, breadstuffs, gold and mineral oils. This eminence, moreover, is not the result of temporary conditions, but will be permanent, unless legislative interference confines silver to a purely domestic market by depriving it of any function in the export trade while inviting its import. 1 Production is given for the calendar years and the commercial figures for fiscal years. |