Appendix C: IN THE APPENDIXES I. Returns from questionnaires to United States automobile tourists Page 68. II. Returns from 1933 questionnaire to Canadian automobile tour- III. Expenditures by United States motorists in Canada, 1928-32-- I. United States citizens departed from American seaports to for- 73 II. Results of questionnaire on tourist expenditures abroad by 76 III. United States citizens departing from American seaports and 76 77 V. Aliens admitted into the United States during the calendar year, 1933, by classes, under the Immigration Act of 1924__ Appendix H: International cash transactions of the United States Government, 1932 and 1933. Appendix L: The balance of international payments of the United States, 1919-33 77 82: 96 FOREWORD The balance of international payments of the United States in 1933 was featured by an estimated favorable balance of $210,000,000 on ordinary merchandise and service transactions (exclusive of gold movements), by an estimated drop of $154,000,000 in United States tourist expenditures abroad, by a net outflow, estimated at $412,000,000, in short-term banking funds, and by a comparatively large volume of international long-term security transactions. The balance of international payments is briefly a summary of all our international transactions during a given period. Necessity, as well as convenience, requires the use of the calendar year as the period for which the various estimates of our international accounts are compiled. In order that we may correctly appraise the changes in our country's international financial position it is important that we have comparable data covering such transactions as merchandise exports and imports; receipts of interest and dividends on our investments in foreign countries and corresponding payments by us to foreigners who have investments here; the total funds made available to foreigners by those of our people who travel abroad as well as the much smaller amounts received by us from foreign tourists in this country; the sums sent back to the "home country" by aliens residing here; the amounts involved in the purchase and sale of international shipping services; the total inflow and outflow of funds in connection with long-term security dealings with foreigners; the net result of the shifts between the United States and foreign money markets of short-term banking funds; the net gain or loss of gold through physical movements or earmarking operations; as well as the amounts involved in numerous other transactions. The persistence during 1933 of abnormal factors in international trade and finance is evidenced by the comparatively low level of our sales and purchases of goods and services in contrast with the large volume of transactions on capital account. Sharp declines in our tourist expenditures in foreign countries and in remittances abroad by alien residents here, while influenced by numerous factors, continued to reflect the contraction during recent years in the income of our people. Exchange controls and trade restrictions throughout the world, which showed only minor easing tendencies during 1933, continued to act as a deterrent to the normal flow of goods and services. At the same time the depreciation of the dollar operated as an abnormal stimulus to our merchandise export and import trade. The dollar values of United States merchandise exports and imports in 1933 were 4 percent and 10 percent, respectively, higher than in 1932. On a quantity basis imports were 10 percent higher than in 1932 and exports remained virtually unchanged. The decline in the international exchange value of the dollar was an important factor in the sharp growth of both exports and imports, particularly during (VII) the period from May to August. The rapid decline in the exchange value of the dollar during this period stimulated heavy buying from abroad in anticipation of further depreciation, while exports of certain basic commodities were stimulated by the speculative rise in their prices which for a time more than offset the rate of dollar depreciation. În general, the exchange value of the dollar tended to give some advantage after the first quarter of the year to foreign buyers in United States markets. In certain cases this advantage was, of course, eliminated because prices rose proportionately. Among the more important trade and service items those which normally show excess receipts by this country showed smaller net declines than those items on account of which we are normally a net debtor nation. Thus, the decline from 1932 to 1933 in our favorable balances on merchandise account and interest and dividend accounts combined was only $68,000,000, whereas our net payments on tourist expenditures and immigrant remittances combined, fell from $507,000,000 to $328,000,000. These differences account primarily for the fact that receipts on total merchandise and service items, exclusive of gold, exceeded payments on similar account by $210,000,000, as compared with $131,000,000 in 1932. United States tourist expenditures abroad in 1933 are estimated at $292,000,000, or $154,000,000 less than in 1932. In contrast with other recent years, the decline last year in our tourist outlays abroad was due less to a drop in per capita expenditures than to a comparatively sharp decline in the number of our people who visited abroad. With the exception of our visitors to Canada and several minor areas the per capita dollar expenditures abroad were higher than in 1932, a condition undoubtedly influenced by the depreciation in the foreign value of the dollar. The average outlays per person in Canada fell below those of the preceding year largely because of shorter stays across the border, a factor which is of minor influence in oversea travel, inasmuch as passenger fares constitute a much more important item in the latter class of travel than in touring contiguous or nearby areas. Remittances by aliens resident here to relatives abroad are estimated at $110,000,000 in 1933 as compared with $138,000,000 in 1932. The continued decline in these estimates, which had reached approximately $250,000,000 in 1929, has no doubt been influenced by the decline in workers' incomes in this country since that time, although there are certain other factors, such as the decline in immigration in recent years and the tendency during the depression for many aliens to return to the home countries. Minor items, such as international receipts and payments in connection with freight service and shipping; charitable, educational, scientific, and other contributions; war-debt receipts; miscellaneous Government transactions; adjustments of recorded merchandise items; and miscellaneous service items resulted in net payments to foreigners of $76,000,000 as compared with net payments of $44,000,000 in 1932. The year's gold movements and earmarking operations resulted in a net "credit" of $173,000,000 in this country's international accounts. Thus, merchandise, service, and gold transactions resulted in a "favorable" balance of $383,000,000. As a result of the banking crisis of the first quarter of the year, foreign-owned bank deposits in the United States were rapidly with drawn and converted into gold, which was either exported at once or placed under earmark for foreign account. These operations assumed tremendous proportions until the declaration of banking holidays in many States on March 4, and the Executive order of March 6, which prohibited the export and earmarking of gold except for transactions licensed by the Secretary of the Treasury. Between January 18 and March 3, largely as a result of this situation, our monetary gold stocks declined $324,000,000. The year's net withdrawal by foreign banks of dollar balances, estimated at $412,000,000, reflects to a large degree the heavy outflow prior to the banking moratorium. Despite the extraordinarily large turnover in the international security markets, there was a comparatively small net difference in the funds required by foreigners in their long-term security purchases in this country and the funds employed by residents of the United States in buying foreign stocks and bonds from foreign holders and in repatriating American domestic issues. The greater part of the net change in our international capital account was accounted for by the net withdrawals of $412,000,000 of bank funds and short-term investments from the United States, a process which continued somewhat erratically during the last 3 years and which reduced foreign-held balances and short-term banking assets in this country from approximately $3,000,000,000 at the end of 1929 to an estimate of $487,000,000 at the end of 1933. JUNE 1934. DANIEL C. ROPER, |