THE UNITED STATES, III. AFTER 1914 319

1919 to 1921.! The excess of merchandise exports remained extraordinary.
 In round numbers it was four billions in 1919, three
illions in 1920, two billions in 1921. Then it declined rapidly;
y 1922 it fell to amounts comparable to those of the pre-war
period (on this later stage more will be said presently). The flow
of gold showed a movement of quite different character. In
919 there was a large net export (292 millions) ; 2 then a moderate
mport in 1920; finally enormous imports in 1921. The relation
between the two movements is quite the reverse of what one would
"pect For the two years 1919 and 1920 (taking them together)
the excess of merchandise exports was still extraordinary; and
there was no net inflow of gold at all —on the contrary, a net
export. In 1921, on the other hand, when the merchandise excess

I For convenience of reference, I give the figures (in millions of dollars) for exports
 and imports both of merchandise and of gold, for the entire series of calendar
years from 1919 to 1925.

Calendar
Year

1919
[920
1921

1922
1923
1924
1925

Merchandise (including silver)

JX PORTS

"MPORTS

“’XCESS OF
ExPoORTS

rE

+

bry

07
2572

3995
4240
4701
5008

2184
3867
3684
42903

NET IMPORTS

37

28
294
258

(Gold

Ner ExXPorTs

202

34

 ? The export of gold during the calendar year 1919 was ascribed, at the time
and just after, to causes supposed to be of exceptional character. The merchandise
imports into the United States were mainly from the Orient and South America,
while the exports were mainly to Europe (a contrast, it may be remarked, which
was of long standing in the foreign trade of the United States). Ordinarily the
exports to Europe provide the bills of exchange which serve to pay for the imports
from the East. But at this time, so it was said, the usual foreign exchange
operations could not take place. Europe was on a paper basis, and could furnish
no exchange available for remittances to the Orient, where specie alone was accepted |
in payments; hence gold (and silver also) had to be sent thither from the United
States. I am not convinced that this explanation of the export of gold is satisfactory.
 The shuffling of the exchanges is not necessarily or usually prevented
by paper currency or dislocated rates of exchange. The probabilities would seem
to be that the United States had actually more of money payments to make (in
gold terms) than she had to receive. The point, however, is of little importance
for the general problems here under consideration. = -