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Trade Balances.
W. H. Allen of Now York,, contributes to
the New York Times a very interesting and
instructive article, entitled "What Becomes of
Trade Balances?" Mr. Allen writes:
"The publication of the custom house statistics
for the nscal year ended Juno 30 is likely to cause a
renewal of tho discussion as to what becomes of
our foreign trade balances.
"This year our excess of exports of merchan
dise will amount to ab6ut $665,000,000, but in
stead of getting any cash for this enormous bal
ance, it appears that wo have paid out some
$20,000,000 more than wo received. Some time ago
it was claimed that wo were lending a good part
of this balance to foreign countries, but in a letter
to the Times of May 8, I disputed this claim and
contended that our annual foreign debts for in
terest dues, freights, and tourists' expenses, etc.,
had grown so largo that thoy moro than offset our
enormous trade balances, and hence wo had to ex
port specie and mortgage our properties to square
the account. Just a few weeks afterward Tho Sun.
published a statement fully admitting that we had
no money loaned abroad, and that, in fact, we were
borrowers, but at thp same time .contending that
the remainder of our trade balances had been
exhausted in paying for securities returned from
abroad.
"This theory of the matter is always based on
the assumption that foreign countries are not able
tj pay cash for what they buy from us, and so are
forced to return securities to square the account.
A glance at the facts, however, proves this as
sumption to be ridiculously false. England buys
most of our products, and holds most of our se
curities. But England is not short of cash by any
means. On the contrary, she is fairly glutted with
idle money, as is shown by the low interest rates,
the over-subscription to tho various loans floated
there, and the "heavy investments of her capital
ists in this and other countries.
"A still more conclusive disproof of this theory
is furnished by tho reports of foreign investments
since the beginning of 1898, the period in which
we are supposed to have got back the most of these
securities. These reports, which are published
daily in the leading newspapers, show that within
this time the purchases of stocks for foreign ac
count on the stock exchange were vastly in excess
of the sales. Outside of Wall street these reports
fully justify the belief that since 1897 more for
eign capital has been invested in our mines, lands,
and industrial plants than in any similar period of
our history. On the other hand,' we find no reports
of any kind to show where the foreigners have let
go their grip on any of these properties.
"Well, it may be asked, if our trade balances
have not gono to cancel returned securities; what
has become of them?
"The only reasonable ansWer to this question, I
contend, is that they have gone to offset our an
nual foreign debts; for interest, dividends, and
profits on foreign capital, cost of freights, ex
pense of Americans abroad, and hoardings of
migratory immigrants. This last item is always
overlooked, although the proof of its existence Is as
plain as a pikestaff. In the case of our trade
with Canada, it is unquestionably the largest item.
For the eleven months ending May 31, 1901, our
favorable trade balance with that country was
about $59,000,000, while our net Imports of specie
amounted to only $22,000,000. As we do not owe
Canada any big sums for interest dues, freights,
tourists' expenses, or returned securities, the only
reasonable inference is that the bulk of this bal
ance has gone to offset the drafts and money or
ders of the vast army of Canadian laborers who
arc in the United States. In the same way it Is
certain that a large iart of' our balances with Eu
rope has gone to offset the savings of the thou
sands of English, Austrlans, Italians, and other
The Commoner.
alien laborers who come here for tho solo pur
pose of hoarding up a little fortune.
"Now, as a result of our greater prosperity
during tho last few years, all these debts for tho
uso and employment of foreign capital, foreign
labor, and for forolgn travel havo grown so
enormously that now they overtop our big trade
balances, and so wo havo to sell moro properties,
run into debt, and export gold to square tho ac
count. In no other way. is it possible to explain
tho singular fact that we havo been exporting gold
at a timo when there were So many indications
that wo need every dollar at homo to avert im
pending financial disasters."
Democratic Reorganization.
All Btudents of political science hold It to bo
axiomatic, that in popular government two parties
are necessary, three parties are cumbrous and
four .parties anomalous. The history of parliamentary-government
in continental Europe, particular
ly lnFrance and Germany, is evidence neyond' all
dispute that a multiplicity of parties means in
stability in administration; changes in tho execu
tive too frequent for the execution of any positive
program, a wilderness of trades and bargains and
compromises which make tho nation a wanderer
in the woods with a circle the mark of her
progress.
Further, when conditions permit a third party
to rise and grow stronger, It is almost as demon
strable in political science that we may look for a
decline and dissolution of one of tho old parties
as that when the tide is rising in one place it must
bo ebbing in another.
Now, any proposition to reorganize the demo
cratic party ought to be such as ; will not involve
its own destruction and the nation's Injury by giv
ing rise to a third party. It appeals strongly to us
that any method of reorganization which has in
view something more than the temporary success,
of an ephemeral party must recognize the neces
sity of avoiding conditions which will call into
being a third, party.
It is because the proposition .of these would
be reorganizes seems to make directly for a state
of things which would create a third party, with
the predictable consequences, both to tho demo
cratic party and to the nation, that we venture to
suggest that the proposition be rejected. If you
look below their non-commltal generalities and
allow the reputation of tho men to be their own
interpreters you cannot fail to discover that every
pian has at bottom tho idea of forcing tho party
back to Wall street conception of democracy.
This is what John G. Carlisle means by conserva
tive theories, or, in the more specific words of an
other reorganizes it is the abandonment of all
agitation for the income tax, of all opposition to
government by Injunction, of all real attempts to
control the vicious corporations. They mean that
the democratic party shall be brought nearer to Its
opponent shall give ground shall become again
a "conservative" party.
Such a position, it seems to me, the history
of the government by parties the world over as ap
plied to cur present conditions, reveals to be ut
terly inconsistent both with the interest of the
country and the permanence of the democratic
party. Opponents must always take positions rel
ative to each other; if In a tug of war ono leans
back the other one must do the same. This is
true of parties. The republican party is now vio
lently reactionary, and is the father of conditions
which no dilletante opposition can successfully
and permanently meet. Ultra-conservatism can
not be met by conservatism. Its natural and Inev
itable foe is radicalism. When these two ex
tremes of men's tendencies are represented we
then have the fulfillment of the function of jpar
ttes in government. They are then the efficient
machinery by which the people can decide how tfar
backward or forward they shall go. So that if a
party will not go as far out toward the end of
the teeter board as tho other, It always gives way
to a party that will. Tho political history of this
country and Europe proves this lncontestably.
So long as parties aro tho Instruments by which
the-people decide to what lengths in tho measures
of governments thoy wish to go, thoy have got to
havo parties which will tako them as far ono way
or another as thoy chooso to go, and In healthy
communities thoy will havo it. Cambridgo Demo
crat (Boston),
A Nation of College Graduates.
. Mr. Schwab thinks that a collegcTeuucation is
a disadvantage to a business man. Mr. Carnegie,
the discoverer of Mr. Schwab, thinks so much to
tho contrary that ho has givon ton or fifteen mil
lion dollars to onable moro Scotchmon to have the
benefits of which ho himself was deprived in hl
youth.
It appears as If Mr. Carnegie's views were
rrther more popular than Mr. Schwab's. Every
commencement season sees moro collegograduate
turned looso upon the world. Every new academic
year finds college walls strained by increasing
crowds of students. Where is it going to end?
Well, there is no reason why it should end at
all, short of tho collegiate education of every per
son in the community. A hundred years ago the
function of tho college was thought to bo to train
candidates for tho ministry. Preachers were the
only persons who really needed a' college educa
tion, and that education, by the way, was less ad
vanced in most respects than a high school train
ing is now Besides the ministers, it was thought
that lawyers and doctors might get somo benefit
fiom a higher education, but in their case it waa
not at all necessary. The candidate for ono of
those professions might very' well start in as 6
boy sweeping out the office of an old practitioner
and. pick up a knowledge jof the business in liis odd
roomonts. Outside of the three learned . profes
sions nobody had any real occasion for tho things
that were taught in college. Indeed, tho education
of that day was carefully designed to be as un
practical as possible. It gave' no assistance In
anything so sordid as tho art of getting a living;
nor did it help appreciably to expand the student's
knowledge of the world in which he lived. It ran
in a narrow groove, and made no concessions to
varying tastes or aptitudes.
But now the whole meaning of education has
been transformed. It is no longer a matter of
learning to make quotations from Horace. It
touches life on every side. It meets every possible
need and aspiration, .practical or ideal. In tho hun
dreds of courses offered by tho great American
uriversitles, with their thousands of possible per
mutations and combinations, there is something to
fit every individual mind. There is not only the
opportunity for intellectual culture beyond any
thing dreamed of in the old education, but thero
iu the most practical sort of training for an in
finite variety of gainful occupations as new as the
modern education itself. A single electrical com
pany this year offered positions to the entire grad
uating class in the department of mechanical
science at Cornell.
Evidently, Mr. Schwab's ideas are not uni
versally held in the business world.
Even now the higher education reaches direct
ly only an insignificant fraction of the population,
but thero I no reason why, in time, it should not
reach all. A few years ago there was a justifiable
fear that an increase in the number of college
students might mean the creation of a swarm of
ibuperfiuous ministers, doctors and lawyers, and
the subtraction from productive pursuits of num
bers of young men who ought to be working with
their hands But now tho young man who works
with bis hands can find in college plenty of ma
terial to give him pleasure and inspiration in his
calling. The higher education in this country no
longer tends to produce a parasitic intellectual
aristocracy. The American college is tho most
powerful ally of American democracy. Saturday
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