The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-05-04
A NEW ECONOMY.

we do not know VINO the writer Is,
but recent study of political economy
| in the monthly letter of the American
Exchange National Bank of New York,
on the need of a new understanding
or rather revision of the old under
standing Of the basic principles OF
commerce is SO interesting and at the
same time so pertinent that we offer
it to you for your perusal.
After declaring that our Political
Economy has disintegrated and that
concept after concept, which. we had
believed to be infallible has exploded,
he says:
"The truth about what we call polit-
| ical economy is that 1t was never
fixed science and never will be fixed
| science; it embraces elements of truth
| that are fully entitled to the status of
| natural law. but as a system of in
terdependent and reciprocating parts
! it never existed.
"Our confusion in the midst of q
wilderness of doctrine has been en-
HANGED by our unquestioning accep-
| lance of laws that were true, or
: nearly true, in the countries in which
they arose, but which never contained
even a remote fraction of truth so far
as our own economy was concerned.
| Our ideas about the interworkings of
foreign trade have been almost exclu-
! sively drawn from Great Britain,
whose economy is essentially as differ
ent from ours as ours is different from
the economy of the man In the moon.
| 1--WE took the common law from
England and adopted it almost without
change, and it was natural, perhaps,
! that we should also adopt English
ideas about economy. We discovered
our mistake only recently, because
until recently we were not overly in
| terested in foreign markets. Now we
are faced with the necessity of look
ing the future of our foreign trade in
| the face and it is apparent that we
shall have to revise our ideas and try
to evolve an economy Of our own.
1.-THE problem Immediately before us
in our foreign trade relations is con-
cerned with the disposition to be made
| of the debt owed to us by our allies in
/, the great war. We are told that if we
insist upon the payment of this debt
we shall thereby limit our future trade
with our debtors and perhaps with the
rest of the world. That is said to be
so because If we insist on the payment
of what is due us, our debtors will be
| forced to liquidate their debt with
| goods that they might otherwise ex-
change for a part of oIi excess pro-
duct during the coming years and will
therefore, be unable to both pay Us
and exchange for our new goods, too.
ut has been suggested that we elm
mate this handicap by cancelling the
debt our allies iT the great war now
owe us, so that they may start IN to
pile Up a new debt which some time
In the future we may be called upon
to cancel, so that We might start over
again: all to the end, apparently, that
we keep ourselves constantly applied
to the production OF goods for the res.
OF the world to consume. Now that
last explanation OF our desire to go on
giving out without hope Of return /.
not as absurd as it sounds. In fact, it
can be defended as a sound economic
policy, but 1t Is n Spartan policy al
best, and with all our reputation for
being a nation CT idealists we may rea-
sonably be excused II we refuse to
adopt II.
What are we going to do, then? Well
to begin with, our situation with re-
spect to world trade Is not as bad as
1t looks. Before the war we imported
two thirds OF our total imports from
countries which are not now greatly in
debt to us. There are q great many
things we use that we do not produce
such as rubber, to mention an impor-
| tant item, and coffee; and things OF
which we do not produce enough, such
as sugar. hides and oils. Our quality
| stuffs" are not up to the European
product in all respects and we shall
always offer market for limited
! quantity of luxuries, in which the Eu-
ropean excel. But after we have fig
ured everything. all that our debtors
can give us after they pay interest on
their debt will be pitifully inadequate
Before the war we were the inter
est payers and had 20 send more goods
to pay fixed charges against us than
we received. The bulk of the old debts
upon which we paid interest has becu