320
INTERNATIONAL TRADE
of exports had fallen markedly, the imports of gold reached dimen-
sions comparable to the most extraordinary year of the war period.
In the fiscal year 1916-17, the gold imports had been 685 millions.
In the calendar year 1921 they were not less than 667 millions.
While the “favorable” merchandise balance declined, the imports
of gold rose — just the contrary of what would be expected under
a naive conception of the theory of the case.
These phenomena, like the equally striking ones of the war
proper, were due to causes clearly of a transient character. In 1919
heavy government payments on loan account were still made by
the United States Treasury to foreign countries, the winding up
of war transactions for which the government had made pledges.!
There were also heavy government expenses abroad for the sup-
port of the American military forces and their return homeward.
In 1920, again, there was a transient cause of a different kind. In
the United States one of the outstanding phases of the speculative
expansion of 1919-20 was a veritable craze for exports. It is most
astonishing that the business world failed to realize that sales to
foreigners of the character and volume which the war loans had
made possible could not continue when the war conditions had
ceased. Even in the face of the new and altered conditions, goods
were sold on credit to foreign buyers, or were fairly shovelled out
to foreign countries in expectation of ready sale there. The real
situation was not grasped until collapse came in the second half of
1920. Then it appeared that many foreign buyers could not pay
their debts, and that many goods sent in expectation of profitable
sale had to be disposed of at sacrifice prices. Great sums were lost ;
a large part of the “credit balance” which had been gloated over
during 1919-20 simply disappeared.
In the years succeeding there was a gradual return to conditions
less abnormal. In 1921 there were still left-overs from the period
of craze; but by 1922 something like order emerged, and was
maintained for some years thereafter. Even so, it must remain
1 See the figures on the Treasury advances after the armistice (Nov. 1918), given
on pn. 315 above.
