The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-03-06

THERE is only one way in which
Il exports can now be increased
substantially. That is by increasing
imports. If Americans are to sch
cotton or tobacco or automobiles to
foreigners, they expect to be paid in
American dollars 1t does them no
good to be paid in Canadian dollars
or in French francs. They can not
pay their bills in the United States
with Canadian or French monies.
How, then, is the foreigner to get
hold of American dollars with which
to buy American goods? He can
not print the dollars.
He might borrow them, but that
only means that he has to pay them
back later, and if he has borrowed
too many dollars, he will not be able
to pay them back. In any event,
the American investor is not going
to lend many dollars abroad. He
has been burned once, and. when he
look abroad and sees war threatened
both in Europe and Asia, he GER
tainly is not going to do much
lending
The only other way to put dollars
in the hands of foreigners is to buy
their goods and pay them with dol
lars. Every dollar spent by an
American in buying goods from a
foreigner or travelling abroad, or in
any other form, has in the end to
come back to the United States and
buy American goods. For it is only
in the United States that a man
can finally convert American dollars
into real wealth. He can, for eX-
ample, take dollars to Paris, buy
francs with the dollars and buy
French wine with the francs.
But the man who sold his francs
for dollars can not buy French wine
or French real estate with his dol
lars. He, too, can if he wishes, sell
his dollars for francs and buy
French goods. But somewhere along
the line there is a man who has to
bring the dollars here and buy
something American with them.
4 LII this is the A B G of trade,
IN and there is not an economist
in the world who could or would
dispute it. The usual popular objec-
ton is that if Americans buy goods
from Frenchmen they are depriv-
ing Americans of the opportunity
to make and sell those goods.
Granted. Obviously it does deprive
NS txy RI
sell those particular goods. But at
the same time it provides them
with the opportunity to sell other
goods.
If an American woman buys
French perfume, that sale is lost
to the American perfumer. Nut the
French perfumer then has Ameri-
can dollars, which he or some other
foreigner muSt-abSolutely must
spend in America. He may buy
American apples or an American
automobile. That creates a sale in
America, and business for Ameri-
can labor and capital.
Now what is the advantage of
buying from the foreigner and then
selling to him? The advantage is
in more employment, higher wages,
and more profit here and abroad.
When we buy from foreigner, we
buy because his goods are cheaper
than ours. When he buys from us,
he buys because our goods are
cheaper than his. Let us take a
simple theoretical case to illustrate
the principle. Let us suppose that
we can produce a $500 car with 10
units of labor and 10 units of CAPT.
tai.
Let us say that to produce $500
20 units of labor and 20 units of
capital. Let us suppose that in
France the situation is reversed.
Their $500 worth of perfume can be
produced with 10 units of capital
and labor, but the French car is
twice as expensive to make. Then
if we make cars and perfume only
for ourselves, it costs us 30 units
of labor and capital. 1t costs the
French 80 units to make cars and
perfume for themselves.
DUT suppose we make two cars
ID and sell one to the French.
That costs us only twenty units of
capital and labor And suppose the
French make double the volume of
perfume and sell half to us. They
have a cheap car. We have cheaper
perfume. 1t has cost each of us
only twenty units of labor and CAPT
tai instead of thirty. With the
capital and labor we have both
saved we can exchange another car