abroad gave them great relief, even if it did not bring them great profits. The same may be said of the earnings of American ship owners, including the Government.

One kind of profit deserves special mention, partly because it is steadily becoming more important and partly because it permits a better comparison with the British balance of payments. This is bankers' commissions. Although a complete statement can not be made, it is certain that bankers' commissions on foreign bond flotations must have been at least $48,000,000 (4 per cent on the total of foreign issues)-not net profit, of course, since many expenses must be met out of these commissions. In the matter of commissions on commercial as distinguished from investment transactions, British bankers are believed still to hold the lead, but no attempt is here made to estimate their amount.

Since American life-insurance companies have now nearly $1,000,000,000 worth of policies outstanding in Canada and are increasing that amount by over $200,000,000 a year, the time seems not far distant when the credits on account of insurance will exceed the debits which at present exist on account of insurance written by British companies in the United States.

BALANCE OF PAYMENTS IN PREVIOUS YEARS

Between January 1, 1919, and December 31, 1924, our imports of gold exceeded our exports by $1,347,000,000. But even this huge amount was not enough to pay for foreigners' purchases of our goods. Consequently, they sold us securities-in 1919 mainly American securities that they had retained from before the war; in 1920 mainly foreign securities originally issued abroad. New foreign securities issued in this market have been the most important form of foreign loans in the last three years. In the last six years foreigners obtained $3,402,000,000 by means of new issues of securities in the American market, but after subtracting maturing issues of $1,488,000,000 the net amount is only $1,914,000,000. Since 1920, however, Europeans have been buying more and more securities in the American market. In some countries investors have been buying up American-issued bonds of their own governments and industries; in other countries they have been trying to export their capital to the United States in order to avoid the effects of depreciating currency and the possible effects of war or revolution. This movement was particularly noticeable in 1923. In fact, in that year we received more capital than we lent. At the same time the amount of interest receivable on our foreign investments was steadily increasing, partly because several European Governments began to make payments on their debts to the United States Government.

1 Includes interest received by United States Government from foreign governments. 2 Securities only.

The amount earned by our merchant marine in foreign trade has declined and is now about the same as the amount payable to foreign vessels. Immigrants' remittances have declined for many reasons, Many have brought their families over; others have themselves gone home. The new immigration law has reduced the number of men who come here to work for a brief period only, leaving their families behind. Moreover, the need for relief in Europe is not so great. Nevertheless, the amount of immigrants' remittances is still twice as large as in the period before the war. Tourists' expenditures, on the other hand, have increased since 1919. The net unfunded balance, which increased in 1919 and 1920 during the boom period, has decreased slowly since, as the debts then incurred were paid off. These tendencies represent a natural recovery from the abnormal

conditions of the war, and at the same time show that the United States has outgrown its former condition as a debtor country and is now able to enter the money markets of the world on equal terms with Great Britain and the other lending nations.

OUTLOOK FOR THE FUTURE

It seems likely that the United States will continue to take an active part in financing foreign enterprises. It would be an easy and logical step for American holders of foreign government securities to extend their interest gradually to industrial investments, like the British and Dutch investors in the United States in the early nineteenth century, who also began with Government and railroad. bonds. But whether our foreign investments are in Government bonds or industrial enterprises, interest and profits on them mean an increasing volume of imports-not necessarily from the countries in which the investments are made, but from the whole world. At the same time, with the growth of the country and the increasing skill of our exporters and bankers, it is likely that our exports will continue to increase, though not so fast as our imports. New loans inevitably give a temporary boost to exports and frequently a permanent one. On the other hand, interest is received in the form of imports of one sort or another. If the European Governments that have not yet started to pay their debts to the United States Government should do so, there can be little doubt that imports of merchandise would regularly equal or exceed exports, as is usually the case with creditor countries.

APPENDIX

BRITISH AND AMERICAN TRADE BALANCES COMPARED

According to the British Board of Trade, the trade balances of Great Britain in 1923 and 1924 were as follows (converted at average rate of sterling exchange for the year):

For purposes of comparison the figures for the United States are given in the same form, as follows: