1492 AND ALL THAT

23 June, 1940

Rapallo

AMERICA has now the choice of two courses, either she can collaborate with the New Europe or she can start toward war. War being, as Brooks Adams & astutely remarked," commercial competition in its acutest form. Before obliging the international money swine with new opportunities for money lending and gun sales ( whether for use or more less by the government ) it might be well to consult geography and chronology.

Autarchias, that is self-contained, self-sufficing economic systems have existed, worked, and endured for considerable periods. N.America is not essential to other continents. Europe, along with her Asiatic and African vicinage, get along for several thousand years before Chris Columbus' expedition. A greater part of Europe's artistic and architectural triumphs antedate his "discovery".

Foreign trade is by tradition " romantic " i.e. has meant higher profits and greater incignita. The profits often were merely more showy. There was less knowledge of production price & on the buyer's part, transport costs being the carrier's livelihood were not denounced. Cost of policing trade routes & sometimes be shewed off on government or " the public". Few people bother to notice that nine tenths of trade is internal. Antient Rome, as is seldom noted, fell from failure to protect the purchasing power of labour, in especial of agricultural labour in Italy. Cheap grain from Egypt for the benefit of speculators and monopolists. No man and no people has or have ever got it too solidly in mind that the durable basis of empire is in the home market, in the defence of the purchasing power of the man who works in the field. The internal purchasing power of the monetary unit is the bedrock of national prosperity.

But there is no need to forget foreign trade. There is no viler and no more tempting poison than that of " investing surplus capital abroad ". This so called " surplus capital " as at least a dozen Europeans now know, is money swigged out of the people. It is sent abroad to the final destruction and rot of the home market. There are , on the other hand several known laws of empire, that is for the founding and conserving of empires. Commerce must pay the expense of policing the trade routes. Brooks Adams observed that France was off the main trade route. He observed that England was dying of sugar, that is of failure to adjust herself to the existence of the sugar beet. He observed the fixity of French mind. We w/d/ have done better to regard Adams as the start of the new historiography than to fill ourselves with the gas of the Sieff, Aster, Beaverbrook press. Overhauser cd/ have helped us. America could have studied her own history, especially the part left out of the university text books. I find my own grandfather in 1878 trying to keep a bit of the non-interest bearing national debt in circulation " as money. " In short Confucius, Adams, Mencius, might have prepared us for Europe of 1940.

The term autarchy might be translated as " the right to keep out of debt". I tried in vain to get H.G. ( "chubby") Wells and his fellow fakers to consider this and to mention it when they were spouting about a new formulation of "the rights of man". Naturally they refrained from so doing, just as the Carnegie Foundation has refrained from ever under any circumstances advertising the real causes

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of war, and yet Reta in 1870 in his "Storia delle Banche" has indicted
the system of "stealing the greatest possible quantity of money from
other nations". American protectionists had a sound idea. They did better
probably in practice than in debate. They did occasionally protect the
purchasing power of some sorts of American labour, when not engaged
in their various ramps and rackets. I do not expect in mytime to
teach the great public to discriminate between usury and fair-sharing, nevert
nevertheless an unjust profit can be taken, and shipped out of any
country. And in time export of capital will damage the country. The
time it takes to ruin an empire depends, obviously, on the rate of
bleeding.

Prosperity comes of exchange. I recommend the study of Italy's
bilateral trade pacts; for there are two and only two systems of
international trade: you can swap what you have in excess, for what you
want or need, or you can swap it for "money" (that is for a title
to things in general) but if you allow "money" to be controlled and/or
cornered by people over whom you have neither control nor jurisdiction,
you will be had.

The control of the world's money has yielded high profits. Nothing
is simpler, and nothing sillier than to accept such control. We do not
pay ten dollars a glass for water. Even Lazard has never tried that on
us. America can, if she likes, try to resurrect a dead system. It will
be as vain as trying to get us to sell the bones of Buddha or the relics
of St Chrystostom.

The U.S.A. can try a shut system, that is, try self-sufficiency.
She can try an "American" system, which wd/mean an attempt to bleed
South America and keep Europeans from trading with the lower half of the
hemisphere. OR she can modernize her outlook and start mousing for trade
with Europe, meaning with the continent of Europe which will be, as
edge, is, edge, will be the continent of Europe, Germany, France, Spain, Ita-
ly, and all likelihood the Balkans and a funk, quite a large funk
of Russia, whether or no England is regarded as the nib of this side, or
the knob of the American hemisphere.

To the American agriculturalist, to the 90 percent of American
trade which is internal, it may not make much difference which of
these three courses is taken. It is however a matter of life to the
exporters and to the export trade. Whatever the farmer's luck
future export is a technical question. It is the question of: WHAT ?

A peaceful answer can only be based on inventory; that is on knowing
what we grow or make more easily or better than is grown or made
elsewhere. What have we that anyone else wants. I mean wants
and can buy without ruining their own workmen and farmers ?

A nation that loses in a dumping contest has only itself to
blame. There are two MUMMUMMUM protections, firstly a tariff wall,
secondly simple prohibition of the import of particular goods. Against
them there is no appeal save war.

If a nation produces wheat and cotton, I doubt if it wd/ start
war merely for the sake of dumping wheat rather than cotton. But nations
have made wars to break down complete refusals to trade.

It is, I believe, a clear perception of these simple alternatives
that has enabled Mussolini to keep peace for ten months in the Balkans

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while Churchill and his unspeakable cronies have done their damnedest to start eastern slaughter. Perception of these simple processes could, I believe, be the basis of sane Europe-American relations for the next eighty years.

The cry of Europe has been "raw materials ". Germany can make all and more than she needs, once she has the raw stuff to work on. Europe in general can make all she needs. We have; indubitably, our own skills and skilled workmen. We can't have 'em starved by cheap products from elsewhere. But the adjustment of these facts should not be beyond the capacity of human intelligence. It is some years since Hess, the vice-fuhrer, suggested that European intelligence sought to capable of inventing a modus vivendi, a modus whereby the major European powers could live together. I suggest that with a little horse sense a similar modus vivendi could be worked out for Europe, the U.S.A. and Japan.

It will not be attained by hogging and cornering. Neither Europe, nor, I think, Japan will fall for the set of old card tricks that have been in use ever since Paterson burbled about " money that is created out of nothing". Schacht has used a very good phrase about money " corresponding to exchangeable goods" meaning money that is regarded as a claim to or certificate of the existence of the said goods, and the capacity to deliver them.

European peace now depends on what goods you propose to receive and deliver.

Any other sort of proposal is an insult to the New European intelligence, and it wd/be silly to offer such insult at the present time when Europe is feeling alert and cocky and unlikely to like being treated as a thick-headed imbecile.