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INTERNATIONAL TRADE

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1853 does for Great Britain. It was in the middle of the century
that the shift began in Great Britain from an excess of imports to an
excess of exports. It was in 1873 that the United States began to
shift the other way — toward an excess of exports.
That imports exceeded exports in the United States until 1873 —
such is seen to be the case, with exceptions in occasional years —
was due in the main to the fact that the country was then in the
early stage of its loan operations. Capital was being borrowed
from England, while as yet the interest payable on previous loans
was not large in amount. Other factors also contributed to the
import excess, chief among them being the earnings from shipping.
The era was still that of wooden ships, which Americans could build
and operate to advantage. Relatively, shipping earnings played a
larger part in the balance of payments during the earlier decades of
the period, a smaller part in the later decades. Borrowing operations
 had not been considerable before 1830, but became so in the
years from 1830 to 1837. Then, after a relapse following the financial
 and industrial crisis of the last-named year, they revived in the
decade 1840-50, and attained large dimensions after 1850. The
Civil War of 1861-65 checked them for a while; but shortly after
the war one of the great bursts of international capital movements
set in. As in the period preceding the Civil War, so in that which
now followed it, the building of railways was the main occasion for
the investment of foreign capital. The expansion of the American
railway proceeded at an extraordinary pace, with all the accompaniments
 which characterized this period thruout the world:
exaggerated hopes, feverish speculation, devious manipulation.
The crisis of 1873 was the nemesis. The collapse was as severe in
the United States as elsewhere, and — what is significant for our
subject — led at once to a reversal in the relation between imports
and exports. Imports suddenly dropped, and continued to be low
until the end of the decade. Exports increased almost at once,
continued to expand, and began to be greater than the imports.
The situation thus dramatically initiated was thereafter maintained
for over forty years, until a new dramatic overturn came with the
Great War.