The toiler. [volume] (Cleveland, Ohio) 1919-1922, 1921-04-30

selves the role Of the mediator be
tween the trading countries. A mer
chant in New York, buying good:
from a merchant in London, doe:
not have to make payment in cash
for there is always another mer.
chant in London buying goods from
a merchant or manufacturer in New
York. These traders exchange their
bills thru the banks that finance
international trade. Generally, as the
law or custom is, the trade is
balanced at the end of the year,
between the two trading countries.
And then, if the trade does not show
an exact balancing, it may be ne
cessary to send money from one
country to another. But even in an
unbalanced trade relations shipping
of money is not necessary. There is
always a third partner in the game.
1t can be simplified by an example.
For instance a triangular trade
transaction between England, United
States and Brazil. England imports
more commodities from the U. S.
than she exports to her. So the bill
is against England and in favor of
the U. S. On the other hand the
case may be, that she exports to
Brazil more than she imports from
there. Then the bill is against Bra
zil and in favor of England. The
third link is the u, S. and Brazil
and the bill is against the U. S. All
this can be evened up without pay
ment in cash. The international eX-
change, makes the payment possible
in the following way: The U. s. will
pay for her imports from Brazil by
bills of exchange drawn against
London, which are acceptable to
Brazil for she owes London. In this
way, only the balance above the
triangular transactions, requires
money shipment. But when the trad
ing countries cease to produce COM
modities for exchange and turn to-
wards buying from other countries,
the trade balance turns against these
buyers. Then these triangular and
similar transactions cannot 60 on as
heretofore and money is required for
international trade relations.
81 Depreciation of Money Caused by
the War.
During the world war the bellig-
erents could not produce commodities
for daily consumption or for sale
on the international market. Those
countries which were in a position
to order things they needed outside
their own boundaries, did so. The
international bills of exchange could
not be used any longer as payment
for all these commodities. The Eu-
ropean countries ceased to produce
commodities for export to any con-
siderable extent, they became buyers
of many things which they previous
ly produced. The cutting off of ex-
port from the belligerent countries
forced them to pay for their i'm
ports with cash. Money, exported
from the belligerant countries, di-
minished the gold fund Of those coun-
tries and caused the depreciation in
value Of the money generally, for
there was not sufficient amounts of
gold or tangible wealth to redeem
the banknotes and paper money is
sued. So on the international market
that money lost its value immensely.
Although on the domestic market
money can be regulated by law it
has its limits. Money and credit,
which are the corner stones Of the
modern capitalistic system, were
smashed by the war. By the col
lapse Of the international credit sys-
TEN, the capitalist order rs a whole
received a severe blow from which
it will not soon revive. It is a hard
task to exact profit from a govern
ment whose money is worthless, FOR
upon profit is based the whole
capitalist system.
6) The Previous and Present Crisis.
This is not the first crisis under
capitalism, although it may be the
last. Production under capitalism is
anarchistic, It lacks order and general
direction. Everybody cares for him.
self and gives no quarter to the
other man. When there is a demand
for certain commodities on the
worlds market, the capitalists Of
various countries rush to produc,
the required article. Thus an over
production very easily sets in ant
the discrimination Of production re
suits; workers are laid off and ther,
is general or partial unemployment
according to the general state O
business. 2
The present crisis is not cause,
by overproduction, the world need
commodities Of every description an,
the industries Of the U. S. coul,
well run at full speed to satisf,
human needs. But those who nee,