Credits: Excess of exports of merchandise Net capital borrowings from Annual average. $487,479, 000 52, 632, 000 of productive goods and services applied to United States balance of indebtedness, 1896-1914.' new countries for the purpose of developing production therein. The new country, or corporations and businesses organized therein, exchange bonds, stocks, and promissory notes for such investment. At this stage the commodity trade balance of the investing country with respect to the other country is active. Later, upon the development of the new enterprise, the goods produced thereby flow to the investing country. These are balanced, however, by a flow of coupons, receipted notes, etc., back to the less advanced country. It is estimated that in 1920 the net income of the United Kingdom from foreign investments was £200,000,000. Remittances, aggregating a large amount, are made by immigrants from the older nations. (See EMIGRATION AND IMMIGRATION.) Under the head of financial obligations may be included those induced by political conditions, such as indemnities, pensions, and other moneys paid by one country to another. Because of credits for services rendered and foreign investments, colonial control, etc., the commodity exports of the older European countries need not equal the value of their commodity imports, and in fact most of these countries have in the past shown, together with an increasing gold supply, large and continuous passive trade balances as regards commodities. These are equalized, however, by the sums due them for services and financial considerations. It is clear that if all the above groups are included, the total foreign trade debits and credits of any country must in the long run be equal, and the term "balance" in this case is used to signify the equality of the two sets of items. Two qualifications, however, may be noted. A country may ship quantities of goods by way of investment in another country, and may receive nothing to balance these exports, either because the investments become total losses, or because the investors migrate and receive their profits elsewhere. The balance of trade of the United Kingdom has been estimated as follows: Debits: Net interest payable. 540, 111, 000 160, 000, 000 170,000,000 150, 000, 000 33, 737, 000 9, 153, 000 30, 000, 000 2552, 890,000 The following is from a recent report of the Secretary of Commerce: "During the last two decades the volume of transactions which, for lack of a better term, are referred to as 'invisible' exports and imports have become of steadily increasing importance. "These items, embracing the movement of capital and the movement of current items such as interest, remittances of emigrants, tourists' expenditures abroad, and so on, have now come to be of such volume as entirely to dominate what is known as the 'favorable' or 'unfavorable' trade balance from merchandising account. For instance, for 1922 there was due us from foreign countries on account of the excess of our exports over our imports of merchandise an amount of $754,000,000. However, when we take into account such 'current invisible' items as the movement of interest, remittances of emigrants, tourists' expenditure, etc., we find that our citizens have sent to or spent in foreign countries a net balance of about $425,000,000 more than we received on such accounts, and thus the balance due us for merchandise is reduced to about $329,000,000. As affecting this sum we have received Estimated balance of trade of the United Kingdom. about $246,000,000 net gold and silver imports and Great Britain, The Board of Trade Journal, March 29, 1923, p. 386. Interest and amount added to principal of American debt in 1922 has been deducted, whereas the Board of Trade deducts only the amount of interest paid. in addition there has been the invisible movement of loans and credits. We have exported capital in the shape of purchases of foreign securities, etc., over and above the imports of capital of the same character to the net amount of about $649,000,000 during the year 1922, and were there no previous obligations to be accounted for, this would amount to an investment abroad of more than the amounts due to us. "To visualize the full balance sheet, it might be stated that if we had entered the year with no obligations either way, and if we had settled our balances in foreign trade and international finance every month in the year in gold, we should have exported gold to the amount of nearly $340,000,000 during the year instead of having imported gold and silver to the amount of $246,000,000. As a matter of fact, the movement of our capital during the year was, as shown from the detailed study, partly a transformation of accounts due to our merchants and banks at the beginning of the year into bonds and funded debt during the year and The figures in parentheses represent the estimates of the partly a reinvestment abroad of amounts due us London Economist (Apr. 7, 1923, p. 729). The following table shows the estimated average annual balance of international payments of the United States, 1896-1914. 1 Harvard Review of Economic Statistics, vol. 1, July, 1919. Article by C. J. Bullock, John K. Williams, and Rufus S. Tucker. * No balance, since items indeterminate. for merchandise sold during the year. No statement, however, as to the precise interaction of 'invisible movements' is other than illustrative of their importance, as, from the nature of things, no set-offs can be stated in precise terms. "A full comprehension of the invisible items and their approximate value is not only of profound importance in assessing our international balance sheet, but no sound conclusion can be made concerning the effect of foreign-trade movements upon our credit structure or upon the ability of foreign countries to purchase our commodities or to pay their debts, or upon exchange rates, or upon the movement of gold, or the ultimate trend of price levels compared with those of other nations without some comprehensive balance sheet including the invisible items. "From the nature of things these movements can not be recorded statistically, so that it is necessarily a process of estimation. The detailed bases upon which estimates are made are given in full in the report, but it must be emphasized that such items are only estimates with a varying degree of accuracy. Many of them are subject to wide variation in judgment and the result may be in error 150 million dollars either way, although the tendency is for overestimates and underestimates on opposite sides of the balance sheet to neutralize each other. "It is obvious that there are wide changes in progress in our international balance sheet for the year 1923 as compared with 1922. Up to date there has been a balance against us on merchandising account instead of large balances in our favor. There has been a continued movement against us in the current items of 'invisible' exchange. On the other hand, there has been a much less movement in the export of capital. Yet there has been a continued import of gold despite this situation. The explanation of the latter possibly lies in the fact that there has been a large export of our currency which is being held and used abroad, and there are some evidences that many countries in Europe have been increasing their open balances in the United States and their investments in American securities. Outward or debit movements (imports): New foreign bond issues in United 637 326 34 997 1 Part of the governmental receipts should properly be included under capital items, as they represented payment on the principal of foreign loans. tive. Countries which start with higher rates than they expect generally to enforce employ what has been called the concessional method. This method is used by Japan, Canada, and a large part of continental Europe. These countries have adopted multiple tariff systems (see) either of the maximum and minimum or of the general and conventional types (see MAXIMUM AND MINIMUM TARIFF SYSTEM, and GENERAL AND CONVENTIONAL TARIFF); but even before the World War modifications and combinations tended to obscure the distinction between the two types. Under her present law Spain has conceded to some countries the "minimum" statutory rates and to a few others rates which are in some cases more than 20 per cent below the "minimum." The French system also includes a minimum schedule, but the policy is to withhold it as far as may be feasible and to grant only reductions expressed as percentages of the difference between the maximum and minimum rates. To enhance the value of a concession to a country to which it is made, and to limit as much as possible its effects upon the country making the concession, an effort is made to confine it to merchandise produced chiefly in the other negotiating country. (See SPECIALIZATION OF TARIFF.) If an understanding can not be reached a tariff war (see TARIFF WARS) sometimes ensues, in which each contestant may add special discriminating duties to its general rates. (See also INTERMEDIATE TARIFF; TRADE DISCRIMINATION; TREATIES.) It will be observed that, except as certain countries may be compelled during negotiations to make greater reductions than they had anticipated, or to make reductions upon articles in respect to which they had not anticipated demands for reduction, the so-called concessional system leaves the rates as high as, or even higher than, they would have been had the whole group of countries not embarked upon the bargaining policy. The experiences of European countries in tariff bargaining are discussed under TARIFF HISTORY. In general the European bargaining systems of the pre-war period, combined with a wide use of the unconditional most-favored-nation clause in commercial treaties, led to the enforcement of no more than two rates of duty upon each article in any given country, and usually the minimum rate was, upon one basis or another, conceded to all the leading commercial nations. Switzerland was, however, the only country which regularly extended to all countries any concessions which it made to any. Since the war, minimum rates have been less easily obtainable and when they are conceded they are less likely to be extended to other countries. Negotiators are therefore now more likely than before the war to be able to obtain special and exclusive concessions not later extended to other countries. The penalty method of tariff bargaining embodies in the statutory tariff schedules of rates which are to be enforced under ordinary circumstances upon products of all countries, and the tariff law includes special provisions for additional duties upon products of countries which discriminate against the commerce of the first country or whose policy is regarded as reciprocally unequal or otherwise unsatisfactory. The policy of the United States has been quite different from that of European States. It has made practically no use of the concessional method of tariff bargaining as used in Europe. (See RECIPROCITY.) And while its reciprocity treaties were tariff bargains, they were not based upon bargaining tariffs, that is, they were reductions from the ordinary effective tariff and not from artificial rates created for bargaining purposes. The tariff acts of 1909 and 1922 contained bargaining provisions of the penalty type. Both acts authorized additional duties upon products of countries which discriminated against the commerce of the United States, the former stipulating a special duty at the uniform rate of 25 per cent ad valorem upon all products otherwise free or dutiable; the latter (in section 317) authorizing the President to select the articles to be penalized, and to impose rates sufficient to offset the discrimination but not exceeding 50 per cent ad valorem. Thus the "bargaining" provision of these two acts was limited to obtaining equality of treatment and did not contemplate the seeking of special favors from foreign countries. There are two general policies in the commercial bargaining of nations: (1) The negotiation for special and exclusive concessions not shared by other nations and (2) the aim for equality of treatment. Reciprocity, as the term is commonly understood in the United States, means a mutual exchange of concessions, with the understanding that these concessions are not to be extended generally and freely to other nations. Culbertson, W. S., Commercial Policy in War Time and After, Now York, 1919, pp. 180-200; National Foreign Trade Council, The Immediate Need of a Bargaining Tariff, New York, 1920. BAR IRON is wrought iron in the form of bars. The rough iron bloom coming from the puddling furnace is first rolled into a flat bar, known as a muck bar or puddle bar. It is then cut into short lengths and the pieces are piled together to be reheated. After the material is reheated and rerolled it is known as refined iron, refined bars or, more commonly, merchant bars. There is sometimes a second and third reheating and rerolling to improve the grade. In the process of rolling, iron is reduced to simple forms, such as squares, rounds, and flats. These forms resemble the cross sections of the material from which they are madeblooms, billets, or slabs-and their final section determines their nomenclature. The terms "slabs," "blooms," "loops," and "billets,' as applied to wrought iron, represent earlier stages of production than those of bars and indicate the shapes the iron assumes before being made into bars. Where charcoal is used in the manufacture of bars, blooms, billets, etc., a purer product is usually obtained, but the cost is much greater. Production of merchant iron bars in 1917 amounted to 983,926 tons; in 1920 to 663,032 tons; and in 1922 to 216,600 tons. Wrought-iron bars in recent years have maintained an unequal competition with soft steel, which is generally used in the place of wrought iron. The labor cost of iron bars is greater than that involved in the production of steel bars. Imports may be tabulated under three general heads: (1) Muck bars; (2) Bar iron, including flat and square iron and iron in rods or coils, and shapes or rolled or hammered iron, n. s. p. f.; (3) Slabs, blooms, loops, etc. | the establishment in the United States of a barium chemical industry the production increased from 2,746 short tons in 1915 to 8,238 tons in 1917; it then decreased to 7,135 tons in 1919, 7,484 tons in 1920, 1,956 tons in 1921, and 2,281 tons in 1922. Barium carbonate is produced by passing carbon dioxide over heated barium sulphide or by treating a solution of barium sulphide or barium chloride with soda ash. The precipitated barium carbonate is then filtered, washed, and dried. An investigation by the Tariff Commission showed, for the three firms from which data were obtained, an average cost in 1919 of making barium carbonate of $0.0316 per pound. Imports, first shown in 1912, were 950,000 pounds, increasing to nearly 5,000,000 pounds in 1914, but falling to 106,288 pounds in 1918. Later statistics follow: 1921. 7,000 179 Pounds. Value. 2,587 9,2 ,344 32.84 615 23.77 Duty. Rate. Exports.-Statistics not available. Barium chloride is a white crystalline substance, containing about 15 per cent of water of crystallization. It is used principally for preparing other barium chemicals, chiefly precipitated barium 28,363,725 sulphate, and as a mordant in manufacturing color lakes. It is also employed in the purification of salt, as a water softener, as an analytical reagent in sulphur determinations, and to some extent in $1,075,518 Exports go mainly to Japan, Canada, United the ceramics industry. Kingdom, Brazil, and Cuba. Survey C-2. BARIUM COMPOUNDS. General. The barium chemicals mentioned in the tariff act and others not mentioned are made chiefly from barytes. Witherite is imported and can be used as the raw material for barium chemicals. Until 1915 about 35 per cent of the domestic consumption of crude barytes was imported for the manufacture of lithopone and as the raw material for a very limited quantity of barium chemicals. The domestic production, chiefly from Missouri, supplied the market for ground and floated barytes. During the war the production of barytes more than quadrupled, owing to lack of imports from Germany, the consequent establishment of a barium chemical industry in the United States, and the increase in the demand for barytes in the lithopone and rubber industries. Georgia displaced Missouri as the leading producing State in 1916. Germany and England are large producers of barytes and barium chemicals and are the chief competitors of the domestic industry. Production.-Barium chloride is prepared by treating barium carbonate (witherite) with hydrochloric acid or by heating barium sulphide with calcium chloride. Prior to the war barium chloride was practically all imported from Germany, but after a domestic industry was established, the production increased from 2,106 short tons in 1915 to 4,870 short tons in 1917. About 4,500 short tons were made in 1918 and in 1919; in 1920, however, the output declined to 3,084 tons, and in 1922 to 2,022 tons. The cost of production of barium chloride in the United States in 1919, as determined by the Tariff Commission, was $0.0539 per pound (average of four firms). Imports prior to 1914 were practically constant at about 2,800,000 pounds per year, increasing sharply to about 6,000,000 pounds in 1914. There were about 5,000,000 pounds in 1915. There were no imports in 1918. Later statistics follow: 1919. 1920.. 1921. 1922+. 1923 Barium Carbonate, Precipitated. Barium carbonate exists in nature as the mineral witherite. Precipitated barium carbonate is a white powder 1922. practically insoluble in water. It is used chiefly in the ceramic industry to prevent a white efflorescence in face brick, for optical glass and some kinds of enameled ironware, in the preparation of other barium chemicals, in flat wall paints, and as a rat poison. Production. Before the war practically the entire supply was imported from Germany. With Exports. Statistics not available. Barium dioxide, barium peroxide, or barium binoxide is a compound of barium and oxygen. When pure it is a white powder insoluble in water. The crude product is most frequently green in color. It is used chiefly in the production of hydrogen peroxide, but also as a bleaching agent and as a source of oxygen. It was employed during the war in tracer bullets. Production.-Barium dioxide is made by heating barium nitrate or barium carbonate, first in a closed vessel and then in a current of air. Prior to the war Germany supplied barium dioxide, but when imports from that country ceased, a domestic barium chemicals industry was established, the production of which reached a maximum of 2,555 short tons in 1917 but which declined to 858 tons in 1919. Later statistics are not available. The cost of production of barium dioxide in 1919, as determined by investigation of the Tariff Commission, was $0.197 per pound (average of 3 firms). - Imports prior to the war were about 3,700,000 pounds per year, increasing in 1914 to about 6,000,000 pounds. Imports ceased in 1917-18. Later statistics follow: Rate. cipitated by chemical means from a solution of a soluble barium salt. This is the best grade of barium sulphate on the market. A special grade is largely employed by the rubber industry. Blanc fixe is used as an inert pigment and filler for paints and paper when a white product is desired. It is also used in the manufacture of printing inks. Production.-Statistics of the domestic production of blanc fixe are not available prior to 1915. Production increased steadily from 1,229 short tons in 1915 to 9,522 short tons in 1918. The output declined to 5,227 short tons in 1919, but was 8,046 short tons in 1920. In 1921 production amounted to 2,471 short tons and in 1922 to 7,349 short tons. Blanc fixe is prepared by treating a solution of crude barium sulphide (which is made from barytes by fusion with coal) with sodium sulphate or salt cake, and a by-product of sodium sulphide is obtained. It is also prepared by treating barium chloride with sodium sulphate. Imports.--Prior to 1914 imports of blanc fixe and satin white or artificial sulphate of lime were between 5,000,000 and 6,000,000 pounds per year. During the war imports declined rapidly to less than 500,000 pounds in 1916 and 1917 and to about 44.44 180,000 pounds in 1918. Later statistics follow: 11.68 15.72 15.64 47.56 Exports.-Statistics not available. Survey A-4. Barium hydroxide.--Barium hydroxide is a white, poisonous powder. As it readily absorbs carbon dioxide from the air it must be kept in tight containers. Its specific gravity is 1.656, and melting point, 78° C., at which temperature it loses its water of crystallization. Commercial grades may contain iron and calcium impurities. It is made by dissolving barium oxide in water and by subsequent crystallization. The chief uses of barium hydroxide are as a reagent in making certain organic preparations, in making barium salts, and in Europe in the bleaching of cane sugar and vegetable oils. Production. Statistics not available. Imports for the fiscal year 1914 were 107,093 pounds, valued at $2,024, or a unit value of 19 cents per pound. This was almost all imported from Germany; small amounts came from England and Belgium. Later statistics follow: Exports. Statistics not available. Barium nitrate is made by treating barium chloride with sodium nitrate or Chile saltpeter. It is an important barium chemical used in explosive mixtures and for making other barium products, fireworks, detonators, and railroad signals. Production was 971 short tons in 1915, followed by a steady decline to 137 tons in 1918. The 1919 production increased sharply to 784 tons. Imports of barium nitrate in 1914 were 1,040,772 pounds, valued at $38,728, chiefly from Germany. After the passage of the act of 1922, imports in that year amounted to 358,617 pounds, valued at $16,795, and in 1923 to 1,022,729 pounds, valued at $59,766. Exports.--Statistics not available. Precipitated barium sulphate or blanc fixe refers to barium sulphate which has been pre farms. Production. The barley crop increased nearly threefold from 1891 to 1920 (average per annum, 1891-1895, 77,000,000 bushels; 1916-1920, 203,000,000 bushels). The 1922 and 1923 production was 182,068,000 and 198,185,000 bushels, respectively. The principal producing regions namely, the Dakotas, Wisconsin, Minnesota, and California--yield the best brewing barley. Imports are insignificant except when the domestic crop is short or of poor quality. Ontario produces a superior grade of brewing barley, and formerly supplied the United States annually from 8,000,000 to 11,000,000 bushels; but as an American tariff of 20 cents per bushel is higher than the normal ocean freight, the Canadian surplus usually moves to England. Imports since 1917 have been as follows: |