Owing to an average increase of 9.3 per cent in export prices of vegetable food products between 1923 and 1924, the increase in the actual value of such products exported was considerably greater than it would have been had 1923 prices remained unchanged. On the other hand, in "other vegetable products," textiles (principally raw cotton), wood and paper, metals and manufactures thereof, and chemicals and allied products, the quantitative increase was considerably greater (or in the case of chemicals, the decrease less) than that in actual value. The highest quantitative increases are in vegetable food products, textiles, "other vegetable products," and metals. With the exception of the textile group which is dominated by cotton, the exports of every group in 1924 appear greater-in several cases very much greater than in 1910-1914 if the quantities in each period are multiplied by 1923 prices as a constant. The most marked increase quantitatively has been apparently in machinery and vehicles, though the method of calculating the quantitative increase in this group is necessarily more or less arbitrary. The average unit prices for most of the commodity groups of imports were lower in 1924 than in 1923, so that in most groups the quantitative increase in imports was greater or the quantitative decrease less than in the case of actual values. There were slight increases quantitatively in the imports of vegetable food products, "other vegetable products" (dominated by rubber), wood and paper, and metals and manufactures thereof. Table 30.-Average Percentage of Price Change 1910-1914 Average to 1923 and 1923 to 1924 These figures represent the percentages by which the values for 1910-1914 computed at 1923 prices, exceeded the actual values; and the percentages by which the actual values for 1924 exceeded (+) or fell below (-) the values computed at 1923 prices. THE RELATIONSHIP OF EXPORTS TO PRODUCTION The best measure of the relative importance of export as compared with domestic trade is the ratio of exports to total production. However, available statistical material is not adequate for making anything more than a rough estimate of this ratio. There are several methods of approach, varying particularly as regards the basis of estimating the value of domestic production. For example exports may be compared with the total income of the American people, comprising not merely the value of theoretically exportable products at the place of production, but also the cost of transportation, the cost of wholesale and retail distribution, cost of construction enterprises the product of which obviously can not be exported, and likewise the value of the many services rendered which do not embody themselves in tangible goods such as could be exported. On such a basis the relative importance of exports in our economic life would appear very modest. The more convenient and perhaps more logical method is to compare exports only with the value of tangible moveable goods at place of production, plus transportation costs. Such a calculation' for years in which manufactures censuses have been taken, is shown in Table 31. It is clear that there has been a decided variation in the proportion of goods exported. Much the highest proportion, 15.3 per cent, was reached in 1919 as a result of the great stimulation of export trade caused by the war. At that time a large fraction of our exports was being furnished to Europe on credit, also very heavy shipments were being made for the use of our own army in France. In 1921 the proportion of exports had fallen to 12.2 per cent, but was still considerably higher than in prewar years. The domestic market during 1921 was greatly depressed causing low production, while the pressing needs of Europe, especially for foodstuffs, were still heavy and Europe's ability to compete with our exports in other markets was still very limited. The proportion of exports to production in 1923 was lower than in any other year shown in the table, 8.5 per cent. The change as compared with 1921 was due to great activity of the domestic market, which took far more goods, while our exports had fallen somewhat as Europe became somewhat more able to supply its requirements. With the increase in exports during 1924 it is probable that the ratio of exports to production has again increased somewhat, approximating the pre-war ratio. The method of calculation here presented was first worked out in an article in the Harvard Review of Economic Statistics, January, 1921. Table 31.-Production of Exportable Goods and Proportion Exported 1 Excludes establishments engaged in automobile repairing, also factories with products valued at $500 or more but less than $5,000. 2 Class I and Class II roads. Class I only. Mean of fiscal years 1908-09, 1909-10, 1913-14, and 1914-15, respectively. A rough comparison may also be made between the total value of manufactures and the value of manufactured goods in our exports. The gross value of manufactures in 1923 was a little over $60,000,000,000. This figure, however, involves much duplication due to the use of products of one manufacturing establishment as material for another. The net value, counting as materials only those produced outside of the manufacturing industry, was probably in the neighborhood of $40,000,000,000 at factory. The value, at seaboard or border points, of exports of manufactured goods in 1923, including manufactured foodstuffs, semimanufactures and finished manufactures, was about $2,625,000,000, or roughly 7 per cent of the value of manufactures as thus estimated. It is probable that the proportion of duplication in the gross value of manufactures due to the above-mentioned cause has not varied greatly in recent census years. Consequently, an approximate view of the variations in the relation between exports and domestic production of manufactured goods may be gained by comparing the census gross statistics directly with the value of manufactured exports. Only the changes in these ratios have significance, as all of the ratios are too low on account of duplication in the value of domestic production. The ratios have been as follows: 1909, 4.8 per cent; 1914, 6.2 per cent; 1919, 8.7 per cent; 1921, 6.2 per cent; and 1923, 4.3 per cent. The changes are roughly parallel with those brought out by Table 32, and for the same reasons. Another similar comparison may be made for agricultural products. The value of domestic products is taken at the farm, including thus only crude products and with no cost of transportation, while the value of agricultural exports includes some manufactured foodstuffs as well as crude foodstuffs, and includes the cost of transportation to seaboard, so that the ratio of exports to production is in all years somewhat too high. For 1909-1914 the average annual value of agricultural products on the farm was about $6,500,000,000, and the average value of exports $1,031,000,000, or 151⁄2 per cent. For 1923 the net value of products was about $11,100,000,000, and the value of exports $1,809,000,000, or about 161⁄2 per cent, showing thus little change. For 1924, however, the proportion of exports was higher (precise data not available). Subject as all of these calculations are to a considerable margin of error, there can be no question that the foreign trade of the United States represents a much smaller proportion of its total production than is true of a number of other leading countries. The United States is to an extraordinary degree self-contained, consuming the greater part of what it produces, meeting a comparatively small proportion of its consumption requirements by means of imports, and consequently needing to export only moderate quantities in order to pay for foreign goods. Such countries as the United Kingdom, Belgium, Netherlands, and Germany are much less able to supply their requirements directly from domestic production, and consequently export a much larger proportion of their product to pay for imports, especially raw materials and foodstuffs. Similarly countries such as Canada, Australia, and Argentina, which are primarily agricultural and have not a highly developed manufacturing industry, export a large proportion of their products to pay for manufactured imports. The fact that the export trade of the United States, notwithstanding its marked increase in absolute amount, is apparently not a larger proportion of the total domestic production than before the war is readily explainable. In contrast with actual declines in production in many countries during the past decade and with slow increase in most of the others, the United States has been fortunate in increasing its volume of output rapidly and raising the standard of living of its people. The outside world has lacked growth in buying power to keep pace with the growth in producing power in this country. The significant aspect of the statistics is not that the exports of the United States have increased slowly, but that its production has increased markedly. There are wide differences among individual industries in the United States as regards the proportion of their product exported. (Tables 32 and 33.) In the case of wheat, pork products, cotton, tobacco, rosin, turpentine, and petroleum products, the United States holds an especially favored position in production, and the ratio of exports to total output is high. The ratio is also high in such manufactures as typewriters, sewing machines, and agricultural machinery (not shown in the table), in which this country enjoys the advantage of mass production and of superior quality. For many other items the ratio of exports to production is much lower either because the United States itself requires all it can produce, or because it represents the greater part of the entire world market, as in the case of automobiles, or because of keener competition from Europe in foreign markets. Table 32. Ration of Exports to Production of Important Export Items 13, 033 7,954 9, 762 10, 140 8, 532 6, 542 5, 066 996 1, 070 1, 247 1, 515 5, 732 6 557 1,040 1,208 9, 012 11, 194 65.5 82.2 51.9 56.5 39.4 42.2 35.7 36.8 66. 1 47.3 69.3 67.5 60. 8 44.3 40.2 41.2 Oats: Million bushels. Cotton: 1,000 bales. Tobacco: Million pounds. Rosin: 1,000 barrels.. 392 452 445 2, 175 1,662 1, 500 1, 7901, 437 786 Turpentine: 1,000 gallons...632, 633 24, 329 22, 394 27, 175 19, 846 10, 786 1 Exports and production for calendar years. Production data for petroleum products not available prior to 1917. • Production for years ending Mar. 31, 1912, 1913, and 1914; exports for corresponding fiscal years. |