Charles A. Bliss

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from the National
Bureau of Economic Research
Volume Title: The Structure of Manufacturing Production: A Cross-Section
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Volume Author/Editor: Charles A. Bliss
Volume Publisher: UMI
Volume ISBN: 0-87014-035-3
Volume URL: http://www.nber.org/books/blis39-1
Publication Date: 1939
Chapter Title: Appendix V Exports and Imports of Manufactured Goods,
classified according to Ultimate Use of Product
Chapter Author: Charles A. Bliss
Chapter URL: http://www.nber.org/chapters/c7001
Chapter pages in book: (p. 197 - 203)Appendix V
Exports and Imports of Manufactured Goods,
classified according to Ultimate Use of Product
A nation ordinarily increases its capital supply in two ways: by
diverting part of its productive energies from the making of
consumption goods. to the making of products that may be
utilized as productive capital, or by continuing to make con-
sumption goods and purchasing with them capital goods pro-
duced in other countries. The figures in Chapter II on the
relative output of capital and consumption goods are qualified,
Table Va
Exports and Imports of Manufactured Goods classified
according to Ultimate Use, 1929
1
Exports Imports 2 NetExports
Millions Millions of
Ultimate Use of dollarsPer centof dollarsPer cent dollars)
Consumption goods 51.5 1,609 66.i +335
Capital goods 1,087 28.8 8.o +893
Constructionmaterials244 6.4 III 4.5 +133
Producers'supplies 501 13.3 520 21.4 —19
Total 3,776 100.0 2,434 100.0 +1,342
1 Includessernimanufactured goods, as classified by the Census of Manufactures. The
totals differ somewhat from Department of Commerce estimates.
2Importduties of $585 million have been ignored.
for some purposes, by t.he fact that some quantity of almost
every product was used in other countries. Consequently, it is
desirable to examine the exports and imports of manufactured
goods in a manner similar to that employed in the analysis of
the domestic productive system. A classification of the values198 APPENDIXV
of goods leaving and entering the country in 1929, according
to their ultimate uses, is indicated in Table Va1.
Of $3,776 million of manufactured and semimanufactured
goods exported in 1929, we estimate that million, or
51.5 per cent, were destined for human consumption, and
$1,087 million (28.8percent) were capital goods. The two
minor groups, construction materials and producers' supplies,
contributed 6.4 and 13.3 per cent to the total. The significant
fact is that whereas capital goods constituted only 19.8 per cent
of production in 1929 they were 28.8percent of exports. On
the other hand, imports of capital goods or goods ultimately to
be utilized for capital purposes were small—only 8 per cent of
imports of all manufactured and semimanufactured products.
In terms of net movements, the capital goods group is outstand-
ing; approximately two-thirds of the value of net exports in
manufactured goods were for capital use. This comparison of
net movements is affected slightly by a reverse flow in the case
of producers' supplies, with a net import figure of $19million,
but because of the nature of the classification, the magnitude of
this differential is probably not significant.
Among consumption goods, foodstuffs constituted 24.4 per
cent of exports of manufactured goods and 39.6 per cent of
imports, involving transactions of over a billion dollars (see
Table Yb). Most striking, however, are the exceptionally heavy
exports of goods used for private transportation, chiefly pas-
senger automobiles and petroleum products, amounting to $773
million or 40 per cent of all exports 2ofconsumption goods.
It 18assumedthat the value of products with joint uses (Uses falling into different
groups of our classification scheme) may be allocated in accordance with the same
ratios that have been used for domestic production. This, in many instances, is quite
legitimate since the ratios are based on data for total consumption of both domestic and
foreign production. Where the ratios were calculated on the basis of the domestic use
of domestic production alone, the assumption is probably still valid, though the as-
sumption that goods exported will be put to the same uses abroad, and in the same
proportions, as though they were consumed at home isless tenable. From the view-
point of net changes in our domestic stock, however, the same ratios must be applied
throughout.
Since foreign trade data are for the calendar year 1929,theyare not quite com-
parable with production data, because of the time lag in exports. However, as ship-
ments are from stock in many instances, the identity of the goods is not essential for
our comparison.
2Totalexports in 1929ofthe two groups, petroleum refining and automobiles, were
$ million.A portion of the first group has been included among producers' sup-
plies, and some of the second group, which includes trucks, was apportioned to capitalEXPORTS AND IMPORTS 199
But imports of these goods are small, less than 6 per cent of
the imports of all goods ultimately to be used for consumption
purposes.
Division of the consumption goods total into subgroups re-
veals markedly different relationships between exports and im-
ports than might be expected from the totals. The net export
movement of $335 million of goods destined for human con-
sumption results from the heavy export of automobiles and a
small credit item from the miscellaneous group of drugs, goods
for recreation, and manufactured fuels for domestic use. Imports
of foods and of wearing apparel and goods for personal use
exceeded exports of similar products by $163 and $218 million.
Table Vb
Exports and Imports of Manufactured and
Semimanufactured Goods destined
for Human Consumption, 1929
Exports Imports Net Exports
Ultimate Millions Millions (millions of
Consumer Use of dollarsPer centof dollarsPer cent dollars)
Foods 475 24.4 638 39.6 —163
Wearingapparel,etc. 247 12.7 465 28.9 —218
Household goods 272 14.0 293 18.2
Transportation 773 39.8 88 5.5 +685
Publications 68 3.5 90 5.6 —22
Other' 109 5.6 35 2.2 +74
Total 1,944 100.0 1,609 100.0 +335
1.Includesdomestic fuel and lighting (manufactured only, excluding electricity), drugs,
medicines and supplies, recreation goods.
If a direct relationship merchandise exports and im-
ports may be assumed, it is fair to consider that net purchases
of foods and clothing were made with motor cars. It might as
readily be said, of course, that they were bought with industrial
machinery or with raw cotton, since there is no mutually ex-
clusive trade within special commodity groups.
The significance of these trade movements from our point
goods. Where a division of a commodity according to usecouldnot readily be ac-
complished on the basis of its description or its subgroups, reference was made to the
industry divisions of Ap. I.200 APPENDIX V
of view depends upon their magnitude relative to the volume
of manufacturing production. Accordingly in Table Vc they
are set against estimates previously prepared for domestic out-
put. The importance of foreign trade movements is probably
overstated in this comparison, for many manufactured goods
are shipped for export by wholesalers or similar distributive
agencies with the result that their selling prices are higher than
values at the factory door as reported in the Census.3 Because
of the uncertainty of the degree of overstatement, and lack of
information on the industries where it occurs, neither export
figures nor data on imports have been adjusted for such dif-
ferences. It is assumed that all valuations are on approximately
the same basis.4
The net movement of foreign trade relative to production is
not appreciable except for two groups: commodities related to
private transportation and capital goods in which net exports
amount respectively to 8.2and6.4 per cent of domestic pro-
duction. In the other groups the net movement ranges between
+ 4.3 and —1.9per cent, despite the overstatement in the
That the value of exports of manufactured goods includes a distributive margin not
included in the Census totalsisthc conclusion of Simon Kuanets in his study of
commodity flow and capital formation. His average reduction factor isxz per cent.
The average export price of manufactured goods is usually, though not always, above
the average factory price. Ten commodities, for which average prices could be computed
and for which there was a maximum of probable comparability between export and
production data as to quality, averaged around io per cent higher in price when per
unit exportvalues were compared with Censusvalue ofproductperunit. The
commodities selected for examination were not highly fabricated, however, lest varia-
tion in quality influence the comparisons. Itis improbable therefore that instances of
price cutting 'and 'dumping' in foreign markets are represented, since this practiseis
followed more frequently in the distribution of fully manufactured products. The ten
commodities examined are (in order of excess of export price): evaporated milk, news-
print paper, turpentine, gasoline, cottonseed oil, Cotton sheetings less than 40inches
wide, tin plate and terne plate, wheat flour, barbed wire, refined sugar.
Doubt as to the validity of the assumption that export values are significantly higher
than manufacturers' values is raised by a comparison of sales in 1935ofwholesalers
for export and the total export values reported for the same year by the Bureau of
Foreign and Domestic Commerce. When the sales of unmanufactured farm products
and other unmanufactured commodities are excluded, wholesalers' foreign sales in 1935
amount to $596million.Total exports of manufactured and semimanufactured goods,
however, were $r,50imillion,so that the wholesalers reporting to the Bureau of the
Census account for but 40percent of thetotal.If salesby manufacturers'sales
branches are excluded from sales by wholesalers, the percentage falls to 33. The ex-
planation of the other 60—67 per cent must be direct foreign sales by manufacturers,
and for this portion no adjustment for wholesalers' commissions would be warranted,
Ocean freights and import duties would modify the values of imports if they were
taken into account. The effect of both modifications would be to reduce, in terms of
domestic prices, the magnitude of the net exports.EXPORTS AND IMPORTS 201
trade figures pointed out above, and except for the minor group
of miscellaneous consumption goods does not exceed 2 per cent
of domestic production.
The product totals of Table Vc contain duplications arising
from the inclusion of semimanufactured goods. This isless
troublesome in the foreign trade figures where duplications
cannot occur, since the value of a semimanufactured good sent
from the country cannot appear also in the value of a finished
Table Vc
Relation of Net Exports of Manufactured Goods to the
Value of Manufactured Products, 1929
Value of Production Adjusted Estimate
Products Net less Netas a Percentage of
Ultimate Use (gross sales)ExportsExports Unadjusted
(millions of dollars)
42,504 +335 42,169 99.2
Foods 12,898 —163 13,061 101.3
Wearingapparel,etc. 11,395 —218 11,613 101.9
Household goods 5,417 —21 5,438 100.4
Private transportation8,312 +685 7,627 91.8
Publications 2,752 —22 2,774 ioo.8
Other 1,730 +74
Capital goods 13,920 +893 13,027 93.6
Construction materials 6,784 +133 6,651 98.0
Producers' supplies 7,227 —19 7,246 100.3
Total 70,435 +1,342 69,093 98.1
commodity of domestic manufacture. But in relation to the pro-
ductive system at large, duplications occur by reason of the
presence of unfinished products. To the extent that they occur
to approximately the same degree in the trade totals as in the
total of manufactures, the two sets of figures are comparable.
Rough estimates based on the records of foreign trade, and
comparison with our divisions of domestic product, show the
proportion of finished goods to be reasonably the same. A higher
percentage of final products occurs in exports than in imports,
as would be expected of an industrial country like the United
States.
The adjustment of value totals for net exports can be carried
over to other elements of manufacturing activity by use of the202 APPENDIX V
ratios appearing in the last column of Table Vc on the assump-
tion that the same proportion of exports applies throughout a
given type of manufactured product; e.g., that 8.2 per cent of
the value added in making automobiles and in refining pe-
troleum for consumers' use is embodied in the 8.2 per cent of
the value product that is sent abroad. The assumption is per-
haps crude but the adjustments are not large. Table Vd shows
the revised figures for certain of the items discussed earlier.
Table Vd
Three Magnitudes relating to Manufacturing
Production, classified according to Ultimate
Use and adjusted for Net Exports, 192.9
Ultimate Domestic Use Value Added WagesWage Earners
(millions of dollars) (thousands)
Consumption goods, total 1. 18,196 6,ooi 4,861
Foods 4,173 990 868
Wearing apparel, etc. 5,327 2,151 1,990
Household goods 2,835 1,084 884
Private transportation 2,911 1,071 698
Publications x,g88 497 290
Other 985 211 155
Capitalgoods 6,603 2,993 1,996
Construction materials 3,311 1,334 1,001
Producers' supplies 3,118 x,oi6 788
All manufactures 1 31,279 11,400 8,671
1 The entries for all consumption goods and for all manufacturing arc not the sums
of the several item8 in the table, but have been computed directly by use of the ratios
of Table Vc.
A final comparison shows, for selected industries, the propor-
tion of the domestic product that finds its market in foreign
countries. A part of these exports may be offset by incoming
products of similar character or satisfying the same general
needs. This offsetting of foreign trade movements served to
reduce the influence of trade on the aggregate volume of manu-
facturing to the degree shown in preceding tables. Yet the in-
fluence of foreign trade on particular industries greatly exceeds
these average relationships, as Table Ve shows. Advantage is
here taken of the opportunity to use data in physical terms, and
the problem of valuation is therefore not so pressing. We doEXPORTS AND IMPORTS 203
assume, however, that the average quality of the exported por-
tion and that retained for domestic use is the same.
Table Ve
Percentage of Domestic Production Exported,
Selected Manufactured Commodities1929
(based on data expressed in physical units)
Commodity PercentageCommodity Percentage
Exported Exported
Rosin 6o.8 Household refrigerators 9.3
Turpentine 5o.6 Caustic soda 8.4
Borax 47.0 Lumberand timber products 8.3
Dried fruits 46.0 Gas oil and fuel oil 8.3
Copper, refined 36.2 Cotton cloth 7.3
Kerosene 35.4 Cigarettes 6.9
Carbon black 32.4 Ironand steel rolled products
Lubricatingoil 31.4 Hosiery 4.9
Benzol 26.1 Tires 4.0
Patentside leather 25.4 Coke 2.1
Cornstarch and corn flour 22.5 Sugar,refined 2.0
Motorfuel 13.8 Wrapping paper 1.4
Goatand kid upper leather 12.8 Boots and shoes 1.3
Automobiles 12.0 Cottonyarn i.o
Wheat flour 11.4
* SeeForeign Trade of the United States, 1933(U.S.Department of Commerce, Trade
Promotion Series No. pp. 13,14.. Obviouslynot all major manufactured com-
modities are listed, for the reason that the exports of many are negligible and also
that data in quantity terms are not available, The latter reason explains the omission
of industrial machinery (13.3per cent of value exported), agricultural machinery
(zg.x per cent of value exported), electrical machinery (5.5 per cent of value ex-
ported), and other commodities for which there is a considerable foreign market.
The export market absorbed in 1929 a large share of the
products of many manufacturing industries. Over half of the
production of rosin and turpentine was exported, over a fourth
of refined copper, lubricating oil, patent side leather; almost
one-half of dried fruits; one-fourth of the output of canned
fruit (by value); one-fourth of agricultural machinery (by
value);13 per cent of all industrial machinery (again by
value); and iz per cent of the number of automobiles. In the
aggregate, however, exports are not a dominant element in the
manufacturing structure and, when considered in relation to
imports of manufactured goods, do not alter greatly the dis-
tribution pattern that consideration of production alone suggests.

The Structure of Manufacturing Production: A Cross-Section View

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