GEOGRAPHIC DISTRIBUTION OF FOREIGN TRADE

While United States exports in 1938 to all the great trade regions were less than in 1937, the decreases in the trade with Europe, South America, and Oceania were small-2, 6, and 6 percent, respectively. The value of total exports to many countries in these three areas in 1938 closely approximated or exceeded the 1937 total. Among the 54 countries with which the trade amounted to $5,000,000 or more in 1938, exports to 22 increased in value as compared with 1937, and to 10 others they were down only slightly. These 32 countries which showed increases or less-than-average decreases, included over two-thirds of the leading countries of Europe, half of the leading countries of South America, and the two principal countries of Oceania. Exports to Asia in 1938 declined 11 percent as compared with the value in 1937; to Southern North America, 18 percent; and to Africa, 22 percent. Among the countries of Latin North America, exports to Mexico decreased substantially in value and those to Cuba were down considerably. In Africa, it was principally the Union of South Africa which took smaller amounts of merchandise in 1938.

Statistical data in tables 24, 29, and 30 show the value of total United States exports to approximately 110 countries in a number of recent years, and also percentage changes and the percentage distribution by leading countries.

Distribution of Exports by Trade Regions.

Europe, as usual our leading export market, took 43 percent of our total exports as compared with slightly less than 41 percent in 1937. Latin America ranked second, with 18 percent, as compared with 19 percent in 1937; Asia was third, with 17 percent; Northern North America fourth, with 15 percent; Africa, fifth, with 4 percent; and Oceania sixth, with 3 percent.

Changes in Exports by Regions and by Countries.

Europe. The increase in the proportion of our exports taken by Europe in 1938, in contrast with the decreasing trend shown over a period of years, was mainly the result of expansion in the trade in grain, fruits, meats, and tobacco, particularly with the countries of northwestern Europe. That area is the principal market for these products. The value of total exports to the Scandinavian countries, to the Netherlands, and to Ireland increased in value as compared with 1937; and the value of total exports to the United Kingdom almost equaled the 1937 figure, despite the reduction in exports of cotton.

Practically all leading European countries purchased United States grain in 1938; the Netherlands, Belgium, Ireland, the United Kingdom, and Germany were the heaviest buyers. A number of countries, but particularly the United Kingdom, purchased increased amounts of fruit, meats, lard, and tobacco.

The total of crude foodstuffs exported to Europe increased from a value of $57,900,000 in 1937 to $166,200,000 in 1938, the largest figure since 1927; and manufactured-foodstuff exports increased from $99,200,000 to $107,800,000.

The Union of Soviet Socialist Republics greatly increased its purchases of metal-working and other machinery in 1938. The increase in these exports to the Soviet Union, together with smaller increases

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in exports of gasoline to a number of countries and in motortrucks to few countries (particularly Germany and Spain), resulted in a somewhat larger total of finished manufactures in the exports to Europe than in 1937. Although taking a slightly smaller value than in 1937, the United Kingdom continued to be the leading European market for United States finished manufactures; the value of exports of such products to that country was two and one-half times as large as to the Union of Soviet Socialist Republics, which ranked second among the countries of Europe as a market for manufactures.

Exports of raw cotton to Europe were unusually low in the latter half of 1938. A few years ago, the European market absorbed 6,000,000 bales (of 500 pounds) of cotton annually from the United States, but in 1938 the exports were 3,032,000 bales. The reduction in quantity from 1937 was 1,615,000 bales, which, together with lower prices, caused the value of cotton exports to Europe to fall from $269,000,000 in 1937 to $148,000,000 in 1938. Exports of raw cotton to the United Kingdom decreased from 1,597,000 bales (of 500 pounds) in 1937 to 855,000 bales; to France, they were down from 778,000 bales to 482,000 bales; to Germany, down from 854,000 bales to 343,000 bales; and to Italy, down from 557,000 bales to 401,000 bales.

Latin America.-The decline in the proportion of United States exports taken by Latin America in 1938, as compared with 1937, reflected mainly the decrease of two-fifths in the value of exports to Mexico and of one-sixth to Cuba.

Exports to Mexico began to slump in January, and the downward trend developed into a precipitous decline in April, immediately after the properties of the major oil companies were expropriated by the Mexican Government in March 1938. The volume of trade was influenced by the generally higher Mexican tariffs initiated in January and by the decline in the exchange value of the peso, as well as the business uncertainty precipitated by the events of March. Exports of machinery, motor vehicles, tubular fittings, and other metal products showed very large reductions. While some increase over last summer's low developed in the latter half of the year, exports to Mexico in December were considerably smaller in value than in the corresponding month of 1937.

In exports to Cuba, there were declines in 1938 in all principal items, including automobiles, machinery, cotton manufactures, metal products, and flour, owing mainly to diminished purchasing power in the island as a result of the low prices of sugar.

Exports to South America and to Central America showed lessthan-average decreases in 1938 and were a larger proportion of the United States export trade than in 1937. While the countries of South America experienced a year of declining prosperity as a result of the lower prices received in world markets for their exports-and in the case of Argentina, as a result of short crops-reserves carried over from the preceding good year enabled them to continue to purchase large amounts of United States merchandise in 1938. The decrease in exports of finished manufactures to South America from the relatively large figure of 1937 was only 3 percent. These items, consisting chiefly of machinery and automobiles, were 82 percent of the total exports to that continent in 1938, as compared with 79 percent in 1937. Exports of semimanufactures, which are made up mostly of iron and steel plates and sheets and of lumber, showed a more

marked decrease than the other items; they were 12 percent of the total in 1938, compared with 14 percent in 1937.

South America's share in total United States exports, at 9.7 percent in 1938, was larger than in any previous year except 1929; while that of Latin America as a unit, at 18.2 percent, was exceeded only in 1920, 1929, and 1937.

Northern North America.-Exports to Northern North America, 98 percent of which go to Canada, included in 1938 a substantial amount of grain, which was reshipped to Europe-the final destination not having been known, however, at the time of shipment. If this grain is omitted from the trade figures, the exports of commodities, exclusive of grain, showed a decrease of 15 percent in value. Shipments of crude materials (especially cotton and bituminous coal), of iron and steel products, and of various manufactured articles were considerably smaller in value than in 1937. As a class, however, the exports of finished manufactures decreased less than the other items. This class made up 53 percent of the exports (exclusive of grain) to Northern North America in 1938, as compared with 51 percent in 1937. These changes reflect mainly the restrictive effect of the downward trend in Canadian income and business activity in 1938. Among the few commodities exported to Canada in larger amounts in 1938 than in 1937 were agricultural implements, anthracite, and gasoline. Exports to Canada (adjusted) were approximately 14 percent of the total exports of United States merchandise in 1938, a somewhat smaller proportion than in other recent years.

Asia. China and Japan were among the principal countries to which United States exports decreased substantially in value during 1938. A 15-percent decrease in value was recorded for the exports to China, including Hong Kong and Kwantung, and a 17-percent decrease for exports to Japan. Smaller quantities of many products were shipped to this area in 1938, as compared with the large totals of the preceding year; though lower prices, especially of cotton and steel scrap, contributed to the reduction in value. Principal commodities exported in smaller quantity in 1938 included steel scrap, pig iron, iron and steel-mill products, lumber, wood pulp, and passenger automobiles. Exports to the area of a number of other products, including motortrucks, aircraft, metal-working machinery, copper, and crude petroleum, were larger in both quantity and value in 1938 than in 1937. Shipments of raw cotton to these four destinations amounted to 1,145,000 bales (of 500 pounds), which represented a gain of 20 percent over the low figure in 1937, a decrease of 20 percent in comparison with the quantity in 1936, and a decrease of 50 percent as compared with the annual average quantity for the period 1931–35. Exports to a number of markets in Asia-namely, British Malaya, Netherlands Indies, Western Asia, and the Philippine Islandsincreased in value in 1938. The larger purchases of British Malaya and Netherlands Indies were influenced by the improvement in economic conditions in those countries, following upon higher prices of rubber and tin in 1937; those of Western Asia have been largely in connection with oil-development work in the area. The larger purchases of the Philippine Islands meant chiefly the recovery of a part of the trade in cotton cloth which went to Japan in the years immediately preceding.

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FOREIGN TRADE OF THE UNITED STATES IN 1938

The proportion of our exports sent to the Continent of Asia rose from 12 percent in the period 1926-30 to 17 percent in the period 1931-35 (maximum nearly 19 percent in 1934), and dropped back to 16.7 percent in 1938.

Oceania.-Exports to Australia and New Zealand decreased in value 6 percent and 2 percent, respectively, in 1938. The trade consists largely of automobiles, mineral oils, and agricultural machinery; and shipments of each of these showed some decrease in 1938. Trade with the area comprised 3 percent of the total exports of the United States approximately the same proportion as in 1937.

Africa. The large percentage decrease in exports to Africa was a reflection of market conditions in British South Africa, which is the destination of three-fifths of the merchandise shipped to that continent. After an exceptionally large expansion from 1933 through 1937, owing in large part to the activity in gold mining in the Transvaal, exports to British South Africa decreased 21 percent in value in 1938. Automobiles, gasoline, lubricating oil, electric refrigerators, radios, canned milk, steel products, and lumber were the more important exports that dropped to lower levels in 1938. The value of total exports to South Africa in 1938 was about as large as the value in 1936, and above that for all preceding years.

Imports From All Trade Regions Lower.

United States imports from all great trade regions decreased substantially in value in 1938. The figures show a wide variation in the extent of the decline as between regions, and more particularly as between countries. For example, imports from Southern North America were one-fifth lower in value than in 1937, and those from both Northern North America and Europe decreased by approximately one-third; while imports from South America, Asia, and Africa were, in each instance, down approximately two-fifths, and those from Oceania down by three-fourths. In imports from the various countries of Europe (except Finland, from which imports increased), the decreases in 1938 ranged from one-tenth to as much as one-half. Imports from only 6 of the 44 countries from which we receive goods valued at 5 million dollars or over furnished a larger value of imports in 1938 than in 1937. These countries were Finland, Honduras, the Netherlands West Indies, Turkey, French Indochina, and the Union of South Africa. In the aggregate, however, they furnished less than 5 percent of the total imports into the United States in 1938.

Distribution of Imports by Trade Regions.

Asia and Europe furnished in 1938, as usual, nearly three-fifths of the total imports of the United States. Imports from Asia were 29 percent of the total, a smaller proportion than in 1937; and those from Europe were 28.9 percent, a higher figure than in the preceding year. Latin America provided about 25 percent of our imports in 1938, which was also a larger proportion than in the preceding year, but almost exactly the same proportion as in the periods 1926-30 and 1931-35. Imports from Northern North America were 13.6 percent of the total import trade, about the same proportion as in 1937 but a smaller proportion than in the years 1934 to 1936 inclusive. Africa was the source of a little less than 3 percent of our imports in 1938, and Oceania the source of less than 1 percent.

Changes in Imports by Regions and by Countries.

Europe.-Imports from Europe consist to a large extent of finished manufactures; approximately half of our imports of this economic class come from this source. Nevertheless, Europe supplies about two-fifths of our imports of semimanufactures and a considerable proportion of our imports of crude materials, also of foodstuffs (including alcoholic beverages). For example, crude and semimanufactured products (in some instances of colonial origin), such as diamonds, vegetable oils, whale oil, steel products, tin, wool, undressed furs, and hides and skins, are obtained in various countries of Europe; all of these were imported in much smaller quantities in 1938 than in 1937. The change in the trade in one or several of these commodities accounted in part for the decrease of 40 percent, or more, in the value of imports from the United Kingdom, Belgium, Norway, and the Netherlands. The decline in imports of diamonds from Europe was influenced not only by the changed demand in United States markets in 1938, but to some extent by statistical accrediting to the countries of production. In vegetable oils and metals, the trade dropped from unusually high levels in 1937 to more normal proportions in 1938. While our purchases from Germany of a few items, such as cameras, alizarin, photographic chemicals, and mineral oil, increased in 1938, much reduced purchases of potash, sodium compounds, metals, textile manufactures, and various other articles as compared with 1937, resulted in a decrease of 30 percent in the value of total imports from that country.

Imports of whisky (largely from the United Kingdom), of brandy and wines (largely from France), and of wood pulp (mainly from Sweden) decreased more moderately in value in 1938 than many other commodities, and the same situation was noted in some of the other French products. The decreases in the value of imports from Sweden and France were 23 percent and 28 percent, respectively. The decrease in total imports from Italy was only 14 percent. That country furnished larger amounts of silk, rayon fiber, and edible olive oil to United States markets in 1938 than in 1937, but smaller amounts of cheese, almonds, cotton manufactures, and cigarette leaf tobacco. Latin America.-Imports from Latin America constituted a larger proportion of our total imports in 1938 than in 1937, our purchases of tropical foodstuffs having been well sustained. Though 1938 prices of sugar, coffee, and cocoa were lower, declines in the value of total imports from the countries of the Caribbean area were relatively moderate. Imports from Colombia decreased 6 percent in value, those from Central America decreased 11 percent, those from Mexico 18 percent, and those from Cuba 29 percent. These percentages compare with the decrease of 36 percent in our total imports. Imports from Colombia included a record quantity of coffee, but the price averaged lower than in 1937. Imports from Cuba in 1938 included 10 percent less sugar, and smaller quantities of fruits and various ores than in 1937; however, the low price of sugar was the principal factor in the reduction in value.

Imports from Brazil included larger amounts of coffee than in 1937, but smaller amounts of vegetable oils and oil-bearing nuts and seeds. This change in the oils, together with the low prices of coffee and cocoa, caused the reduction of 19 percent in value of the import trade. Brazilian coffee dropped in price in the closing months of