TRADE AND SERVICE ITEMS

MERCHANDISE EXPORTS AND IMPORTS 5

Total merchandise exports of the United States in 1933 amounted to $1,675,000,000, as compared with $1,611,000,000 in 1932. General merchandise imports during the year were valued at $1,450,000,000, as compared with $1,323,000,000 during 1932. These totals represented a reversal of the downward trend which set in after 1929, when exports reached $5,241,000,000-the highest figure since 1920and when imports aggregated $4,399,000,000-also the highest figure since 1920 except for the total of $4,431,000,000 in 1926. With the peak figures of 1929 ended a 5-year period during which annual merchandise exports averaged $4,991,000,000 and the annual average of imports stood at $4,267,000,000. At the low level of 1932, exports stood at approximately 31 percent of the large figure of 1929, while general imports of 1932 were roughly 30 percent those of the peak year. While our foreign trade in 1933 showed an improvement in dollar value, therefore, over that of 1932, it was still on an extremely low level compared with that of the years immediately preceding 1930. In the second quarter of 1933 our foreign-trade values for the first time reversed the downward trend which set in during 1930. During the first quarter of the year both exports and imports had fallen in value to the lowest monthly levels in approximately 30 years. The reversal in trend during the second quarter was exceedingly sharp and carried both exports and imports to relatively high levels which were well maintained during the rest of the year. As a result, the export values for the year as a whole exceeded those of 1932 by 4 percent, while general imports were valued at 10 percent more than in the preceding year. The percentage changes in foreign trade values since the end of 1929 were as follows:

5 A more detailed discussion of the foreign trade of the United States in 1933 is found in Summary of United States Trade with World, 1933, prepared by the Division of Foreign Trade Statistics of the Bureau of Foreign and Domestic Commerce, and in the forthcoming bulletin, Foreign Trade of the United States, 1933, being prepared by the same division.

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The year's increase in export and import values was influenced to a substantial degree by the change in the international exchange value of the dollar. This factor appeared to have been particularly important during the period from May to August, when imports as well as exports expanded steadily in consonance with the depreciation of the dollar. The rapid decline in the exchange value of United States currency stimulated heavy buying from abroad in anticipation of further depreciation. Exports of certain basic commodities were stimulated by the speculative rise in their prices which for a time more than offset the depreciation of the dollar. During this period of uncertainty the trend in imports appeared contrary to generally accepted international trade theory, but such a trend is in reality logical when the distinction between a depreciating currency and a depreciated currency is kept in mind. Also, the expansion of industrial activity was an important factor contributing to the comparatively high level at which our merchandise imports were maintained throughout the second half of the year. On a quantity basis imports were 10 percent higher than in 1932, while exports represented approximately the same quantity movement as in the preceding year.

GEOGRAPHIC DISTRIBUTION

The year's geographic distribution of our merchandise exports and imports in 1933 is shown in table 1. The aggregate value of shipments to European countries was 8 percent higher than in 1932, the increase being due in large part to heavy cotton shipments at an average price higher than that of 1932. Exports to Latin America and to Africa also showed appreciable gains, and sales to Mexico showed an increase of 18 percent.

Owing to a comparatively low level of United States exports to Canada during the first half of 1933, the position of that country in our export trade fell from its usual position, second only to all of Europe, to one of less importance than the total of the Latin American countries as well as the total of the aggregate markets of Asia. The value of exports to Asia held up to that of 1932, partly because the smaller quantity of cotton shipped to Japan was sold at a higher average price than that of the previous year.

The higher import values were influenced in large part by the greater volume of purchases as well as by the higher average prices paid for crude materials and semimanufactures. Changes in the geographic distribution of our total imports occurred accordingly. Imports from British Malaya, Australia, Union of South Africa, China, and British India increased in value 72, 65, 69, 44, and 32 percent, respectively.

EXCESS OF EXPORTS OVER IMPORTS

The excess of exports over imports in our trade with European countries amounted to $388,000,000, as compared with an excess of $225,000,000 in the year's total export balance. There were comparatively few reversals in the favorable or unfavorable merchandise balances which the United States had had with individual countries the preceding year. Balances with general trade areas showed no reversals, but in the case of Asia our unfavorable balance in 1933 was almost double that of 1932.

TABLE 2.-BALANCES OF TRADE BY CONTINENTS AND GREAT TRADE REGIONS 1

In estimating the actual receipts and payments involved in the settlement of the country's merchandise trade accounts with foreign countries, it is necessary to include certain commodity transactions not reported in the official export and import statistics. Silver exports and imports are among such items included in this group in order to avoid confusion in the reporting of the official foreign-trade figures. Adjustment must also be made for certain "nontrade" items and for such factors as bad-debt losses, or understatement of import values in the case of imports subject to ad valorem duties. Other items, the individual estimates for which are included under this general heading, are estimated values of unrecorded parcel-post exports and imports; smuggled liquors, narcotics, diamonds, etc.; bunker fuel sales and purchases; sales and purchases of ship repairs; adjustments for consignment shipments and for fluctuations in exchange rates; and payments by United States exporters of fees on consular invoices.

The aggregate receipts or credits in 1933 under this section are estimated at $85,000,000, as compared with $105,000,000 in 1932; and payments or debits are estimated at $162,000,000, or $15,000,000 more than in 1932. The increase in the latter was due almost entirely to net imports of $41,000,000 in silver, as compared with net imports of only $6,000,000 in 1932. (See appendix A.)

FREIGHT AND SHIPPING ACCOUNT

The estimated freight and shipping receipts of the United States in 1933 were $49,000,000 and the estimated payments $65,000,000, divided as follows:

Millions

RECEIPTS

Earnings of United States vessels for the carriage of American exports_-
Earnings of United States railways for carrying goods in transit across
United States territory.

of dollars 30

3

Earnings of United States railways for the carriage to the frontier of certain United States exports to Canada whose recorded export value does not include freight to the border..

16

Total____

49

Payments to foreign vessels for the carriage of United States imports.. Payments to foreign railroads for the carriage of imports from the point of inland shipment to the foreign or Lake shipping point_

Payments to foreign railroads for the carriage in transit of United States goods through foreign countries.

Total..

45

10

10

65

On shipping and freight service account the United States is normally a debtor. Exclusive of railway transportation services entering into the trade between Canada and the United States, the respective receipts and payments are virtually confined to ocean and Great Lakes shipping services, as indicated in table 3. Details of transactions entering into this account are given in appendix B.

TABLE 3.-UNITED STATES FOREIGN-TRADE FREIGHT EARNINGS BY UNITED STATES AND BY FOREIGN VESSELS, CALENDAR YEAR 1933 1

Kind

United States imports

United States exports

Total

Earned by Earned by Earned by Earned by Earned by Earned by
Americans foreigners
Americans foreigners

Americans

foreigners

26, 284, 467 45, 229, 209 | 29, 404, 549 70, 080, 747 55, 689, 016 115, 310, 046.

1 Prepared by the Shipping Board Bureau of the Department of Commerce.

THE TOURIST ACCOUNT

Expenditures abroad by United States tourists in 1933 are estimated at $292,000,000, as compared with $446,000,000 in 1932. As a result of the sharp drop in this class of "invisible imports" during the year, these estimated outlays were only 35.5 percent of those of the peak year 1929. The various items entering into the year's international tourist account are shown in table 4.

On the other hand, estimated expenditures in the United States by foreign visitors showed no change as compared with 1932. The net result of these unlike tendencies during 1933 led to a decline of 41 percent in the net outflow of funds on tourist account. The annual changes in our tourist "credit" and "debit" items since 1929 are shown in table 5.