Notes on the News U.S.A. And Isolation

Nelson Evening Mail, Volume LXXII, 28 November 1938, Page 8

Notes on the News U.S.A. And Isolation

The United Slates Secretary of State, Mr. Cordell Hull, says that the development of modern communications makes it impossible to pursue a national policy of isolation and selfsufficiency. Though a very large body of opinion in the United States favours 'isolation, the United States, as Mr. Hull admits, cannot so easily cut the ties which link her to the outside world. A link in the chain connecting the United States with outside countries is trade. Some 10 per cent, of her movable output is normally exported. The country is equipped for a production of both agricultural and industrial materials larger than the absorptive capacity of her own population. There are several industries, and indeed entire States of the United States, which stand and fall with their ability to sell their output abroad These include the cotton planters of Texas and their neighbouring States, the tobacco growers of Virginia, the wheat producers in the Pacific States, and the oil industry. All these and others in similar positions demand to he considered in the shaping of United States foreigu policy.

There are extensive markets in the Far East under the policy of the “open door” in China. This trade appears to he in jeopardy from Japan’s policy in China. Vast amounts of American capital, too, have been invested all over the world. Trade has followed the capital. The safeguarding of that capital is a charge on the American Govern ment.

The United States, too, is greatly dependent in certain very important industries on supplies of raw materials abroad. Chief among these are rubber, tin, raw silk, various furs, hides and skin, copra and coconut oil, carpet wool. tea. Manila hemp and sisal. Rubber and tin are imported mainly from Dutch East India and British Malaya; raw silk from Japan; Manila hemp from the Philippines. Some of these imports are absolutely essential to American industry. Nor must the fact be lost sight of that a number of the foremost countries owe the United States vast sums of money, and that the United States monetary policy directly affects economic conditions all over the world. Barter

Mr. J. Meltzer, in an address in Wellington, instanced that the system of barter, from which rose international trade, had its origin in the Jew not being allowed to own land, his wealth thus being contained in portable objects.

In primitive States of society ex change of commodities is effected directly, and without the intervention of money; such a method of exchange is called barter. Barter underlies the distribution of the annual produce of a nation among the various classes who assist in production. Though the landlord, the employer, the capitalist, and the labourer receive their respective shares in money, yet to the economist such money represents only produce or its equivalent in other commodities.

For instance, the articles that the labourer buys with his wages are the real return he receives for his services. and his services may be regarded as bartered for such articles.

Exchange of commodities was greatly facilitated by the invention of money. Still further progress was made with the introduction of promises to pay. When promises to pay earae to be accepted in return for commodities, tt was seen that wherever mutual dealings existed between two persons, equivalent quantities of goods estimated in money could be set off, so as to pay for each other. The origin of thi s modern system of set-off may be traced to the Roman Law. But the system was perfected by the introduction of bills of exchange and cheques, and the development of the modern clearing system.