THE UNITED STATES, III. AFTER 1914 333 
in 1923-25 was that the United States had then definitely reached 
the stage of being an exporter of capital; that the causes which in 
pre-war days had brought about an excess of exports no longer 
operated with such magnitude as to enable the former “favor- 
able” balance to be maintained; that if this basic cause of pros- 
perity was to endure, the one way to assure the propitious result 
was an uninterrupted series of loans to foreigners. I speak of 
favorable balance and propitious result, because most persons 
who discoursed on the present and the future, whether govern- 
ment officials or representatives of the business and financial 
world, took the good old mercantilist view which these phrases 
imply. A great volume of exports, and especially a great excess 
of exports over imports, was regarded as a vivifying tonic for 
business, and especially as the means by which a burdensome 
surplus product of manufactured and of agricultural products 
could find the necessary foreign market. It is a familiar attitude : 
exports, and still more exports, are the indispensable condition of 
sustained industrial vigor and of ever growing prosperity. True, 
the new position of the United States as a creditor country was 
admitted to entail a tendency toward growing imports; foreigners, 
it was agreed, must pay the interest on their debts in goods. But 
this was merely a stronger reason for lending more and more to 
them, and so enabling the mounting imports to be offset by exports 
mounting still more. 
The dispassionate student will shrug his shoulders at all this. 
His interest will be in other directions — in the shifts of the vari- 
ous items of the complex situation and in the play of the underlying 
forces. The export of capital may wax and may wane. It will 
hardly cease; but it may prove of less commanding importance 
than commonly expected. The great excess of merchandise 
exports over imports may continue, or may be succeeded by 
an even balance, or may be replaced by an opposite relation — 
an excess of imports. The whole balance of international pay- 
ments, with all its interwoven and conflicting elements, subject ds 
it is to the possible decline or growth of almost every item, may 
take a shape quite beyond any foreshadowing. Most interesting