THE New Zealand Herald AND DALLY SOUTHERN CROSS SATURDAY, AUGUST 20, 1927. A COLOSSUS IN TRADE.

New Zealand Herald, Volume LXIV, Issue 19720, 20 August 1927, Page 10

THE New Zealand Herald AND DALLY SOUTHERN CROSS SATURDAY, AUGUST 20, 1927. A COLOSSUS IN TRADE.

Figures have just been issued showing that the overseas trade of the United States, for the fiscal year which ended in June, has again increased substantially over the total for the previous year. The value of exports was 4i per cent, greater than in 1926 ; the ratio may not seem impressively large, but when the whole sum involved almost reaches £1,000,000,000 that degree of increase represents a great figure, j Nor is this circumstance peculiar to the past 12 months. The entry of the United States into the markets of the world, as one of its great powers, has been a development of the last decade and a-half which leaves the situation very different from that which ruled before the war. Official figures show that the export of manufactured goods from the United States in 1923 was 48 per cent, greater than in J913, due allowance being made for prewar prices. The significance of the word " manufactured " should not be overlooked. The overseas trade of America has long been of huge size, but it is not a very distant past when raw material and foodstuffs were the greatest item. It is the linking of industry with export that gives the change its greatest importance. It is commonly said, and it is quite true, that the war, with the restrictions it put on British and European manufactures, and the great demands it made on American, placed the United States in the forefront as an industrial and commercial country. There were other nations which found a similar opportunity during the war, but they speedily lost the markets they had entered when peace set their rivals free. America, on the contrary, has consolidated and extended her gains.

The rise of the United States as an exporting nation has caused a reversal of positions or of values in the world's markets. For instance, the increase of exports between 1913 and 1923, already quoted, has occurred while a reverse process has occurred in Great Britain. While America managed to expand her exports of manufactured goods by 48 per cent., there was a decline of 20 per cent, in British exports of the corresponding class. In 1913 the United States provided 12.47 per cent, of the world's manufactured exports and Great Britain 13.02. In 1923 the corresponding percentages were: United States 16.88, Great Britain 14.03. There is, however, one feature of American export business to which the experts, with every justification, attach great importance. It is that the exportable surplus is only a small proportion of the total output. When a careful inquiry was made into the fruit trade in Britain, with a view to advising the Dominions of means to increase their share, it was noted that an unusually bountiful American apple crop meant intensified competition in the British market. The. American grower first satisfied the huge domestic demand, then exported what was left. Again, when the cinema industry was investigated it was found that the America% studios considered their own country first, paid all the expenses of production by exhibition inside the United States, and then attacked the outside market. This is true of p.vrsry line in which the American manufacturer appears as a competitor with others. The way the American motor-car goes everywhere is proverbial. Yet in the first half of 1926, out of 2,173,007 motorcars produced only 143,507, or about 0)1 per cent, went abroad. The home market took the rest. The same story could be told of hundreds of commodities. The chief characteristic of American industry, therefore, is that it relies in the main on the absorptive capacity of the domestic market, exporting only what amounts to a small marginal surplus, great though that margin may seem to competitive countries. With a population of 115,000,000, whose many wants clamour for satisfaction, the wheels of industry must turn long before the saturation point is reached. On this foundation, with an increased share of the world's trade added, the dimensions of American manufacture have grown huge. Exact figures cannot readily be obtained, but a reasonable estimate gives 14,000,000 as the number of people in the United States directly engaged in manufacture. Great Britain has about 7,000,000 engaged in i the same manner.: Figures show

also that the American production is even higher to a considerable degree, in proportion to the manpower engaged, than the British. Of the American output about eight per cent, is exported. Britain exports 25 per cent, of her manufactured goods, and must continue to do so because of her highlyindustrialised condition and her need to pay for imported raw material and foodstuffs. It is not the whole truth, but it is part of the truth, that America exports only what is not actually needed at home. Yet with the high state of organisation the industries show, with the need to keep the wheels turning continually if full advantage is to be taken of mass production methods, the margin so disposed of is important. It is sometimes said the domestic prosperity is artificial, that some day it must fall. If so, if the home market is reduced, there may easily be an increased intensity of American competition abroad. .Tust what the direction of America's industrial and commercial future will be it is impossible to say, but the probabilities are against any substantial retrogression from the great and growing power the export trade now exerts in the markets of the world.