TOURIST EXPENSES 
woul, 
hal A 
119 
which arise from the expenditure of tourists in foreign countries 
stand for quite another. Payments connected with foreign loans 
stand midway ; and this whether we consider the initial lending of 
the principal amount by the creditor country or the subsequent 
payment of interest by the debtor country. I shall say something 
of loan and interest payments in another connection.! For the 
present, by way of elucidating the essential differences between 
the several sorts of cases, we may consider a case which stands at 
the opposite extreme from tributes or indemnities — that of tourist 
expenditures. 
The expenses of Americans who travel abroad form a large item 
in the balance of payments of the United States. They give occa- 
sion to remittances to foreign countries, and, thru the process just 
explained, tend to cause merchandise exports to exceed imports.? 
This item, if it were the only transaction other than sales of goods 
— the only invisible item — would bring about a balance of trade 
“favorable” to the United States. As regards the physical goods 
exported and imported, the situation of course would not be favor- 
able to the United States; the relation of American incomes to 
foreign incomes, and the barter terms of trade would become less 
advantageous to the United States than before. So far the case is 
the same as with a tribute. 
Obviously, however, there are differences. In return for the 
additional commodities exported — the excess of exports — the 
Americans get not indeed imported goods, but the pleasures of 
travel. Taken as a body, they prefer these pleasures to the enjoy- 
ments which would have been yielded by the exported goods, or by 
their equivalents, if consumed at home. To state the same thing in 
another way, the American tourists, by spending abroad, cause 
American labor to be turned to making exported commodities, 
rather than to making such commodities as the travellers would 
have purchased if they had remained at home. There can be here 
no question of a loss, such as a tribute would entail : it is merely a 
1 See below, Ch. 21, pp. 254-262. 
? See below, Ch. 24, p. 295, for a consideration of the part which this item plays 
in the international trade of the United States.