OPINIONS FROM OTHERS.
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The Cooling of Engine Oil.
The Editor, THE COMMERCIAL MOTOR.
[2694] Sir,—With reference to the article in The Commercial Motor for July 17th dealing with oil-cooling as a safeguard to the bearings, may I suggest that the oil could be adequately cooled without the need for elaboration of the mechanism. It could be effected by the adoption of a dry sump system so that the oil would be taken to a main tank by a return pump. In this way the oil is given time for cooling and there would not be that waste of oil which so often occurs when the engine is taken down for overhaul. The dry sump is in considerable use with eel° engines.—Yours faith fully, T. ARRELL-GUEST. Birmingham.
The Recovery of Awarded Damages.
The Editor, THE COMMERCIAL MOTOR.
[2695] Sir, There has been from time to time acute controversy as to whether "third party" insurance should be compulsory for motorists. Most agree that every motorist should insure against this risk, and the difference of opinion centres araund the word "compulsory." But the recent decision of the Court of Appeal in the case of Walter Chaplin v. Harrington Motor Co., Ltd. introduces a new factor. This decision says that, although a motorist may recover from his insurance company the whole of the damages awarded against him, the injured party has no legal claim to the monies paid by the insurance company, and if the person who receives the money becomes bankrupt the money can be claimed by the liquidator for the benefit of the creditors. This decision will undoubtedly result in great hardship, and we venture to suggest that this 'unrighteous position would be rectified if it were part of the contract between the insurance company and their assured that "third party" claims under the policy should be paid direct to the injured party, and that his receipt to the insurance company should be taken as full discharge of their obligations to their assured. There may, however, be objections to this procedure, and we think the opinions of others on the subject would be helpful.—Yours faithfully,
C. W. BRETT,
London. Managing Director, Barimar, Ltd.
Do Exports Pay for Imports ?
The Editor, THE COMMERCIAL MOTOR.
[2696] Sir,—Whatever apparent differences there may be as to immediate policy, there is no question but that Safeguarding will be a very important issue at the General Election. In view of this it seems desirable to clear up a point which in the past has given rise probably to more confusion of ideas and false conclusions than any other part of the subject; I refer to what may be called the "Exports pay for imports" argument.
Generally speaking, it is argued that since British labour is employed in producing the exports which are required to pay for imports, the latter cannot be the cause of unemployment. Further, it is argued that c48
if certain imports are stopped a corresponding amount of exports will be stopped, as they will not be required to pay for those imports. Whatever gain there may be in employment, therefore, in making goods at home instead of importing them will be offset by the loss in employment in not making those goods which otherwise would have been exported in payment.
Those who use the phrase "Exports pay for imports" in this way simply do not know either its origin or its real meaning. Before Adam Smith wrote "The Wealth of Nations" (1776) it was believed that gold and silver, money, was identical with wealth. Foreign trade was regarded from this point of view, exports being favoured in order that, in payment, gold, etc., might be brought into the country, imports being discouraged, not from the Safeguarding point of view of fostering home industry, but simply to avoid having to send gold out of the country to pay for them. This theory was known as "Mercantilism," and its main object was to achieve a "favourable" balance, payable in gold.
Adam Smith showed that real wealth does not consist in money, but in what money will buy, viz., in goods (and services). Money is o,nly a medium of exchange. All trade,' therefore, is really a kind of barter, goods and services, via money (or its substitutes), "paying for," or being exchanged for, other goods and services. This fact is expressed by the phrase "Exports (i.e., goods, etc.) pay for imports (ditto)." It is perfectly true, but it is only half the truth, which is why it misleads so many people, for, of course, it is not only imports which are "paid for" by goods and services; home produce is "paid for" exactly in the same way! The real point, therefore, is not how do we pay—in either case it is by our goods and services—but whom do we pay? Home industry and labour, or foreign? Free Traders, it would seem, prefer the latter!
As for the deduction from this phrase that a reduced import of goods involves a reduced export of goods, it simply is not true. Firstly, no reduction in the total volume of imports is contemplated at all. Fewer manufactured goods would be imported, no doubt, but an actual increase in imports of raw, materials and foodstuffs is to be looked for. But, apart from that, imports are "paid for" by our total exports, including "services," the most important of which is lending other countries our capital. A reduction in imported goods, therefore, supposing such did occur, might well be compensated for by a reduction in foreign investment and an increase in home investment. Lastly, it must be remembered that the fact of an export not being required to pay for an import, because that import is being produced at home, does not imply a decrease in production to that extent; it merely means that the goods are paid, or the services are rendered, to home industry instead of foreign, while what is being produced at home instead of being imported is entirely additional, as is the labour employed in producing it.—Yours faithfully, Donai,As GRAHAM.