When a country is shipping more goods in the form of commodities
than she is receiving, it is said that the _balance of trade is
favorable_. The term “balance of trade” is apt to be misleading. It
is a convenient phrase relating to commodity shipments alone as they
appear on the record of outgoing and incoming ships, which are always
subject to Government inspection and from which a definite and accurate
compilation can be made and is made. If such “balance of trade” runs
against a country the actual balance of commodity _indebtedness_ must
be made up by shipments of gold, securities or transfer of credits.
Outside of commodities which appear in making up the balance of trade
there are a number of invisible factors, not of statistical public
record, which go to determine the extent to which the citizens of
one country may be indebted to those of another, and by which the
international debts are actually settled. These elements are not
absolutely available in the form of statistics and can be only roughly
estimated. Taking the United States as an example, there are certain
factors not tabulated by the Bureau of Statistics at Washington because
their proportions are unknown to the officials. These are the elements
which comprise the invisible factors in determining the settlement of
international debts. The transfer of money or credit from the United
States to other countries (outside of commodities) is accomplished in
the following ways: