To the Editor of the CRIMSON:

Your editorial of January 21 on ways and means of preserving the American merchant marine leads naturally to the alternative question of why bother to preserve it at all? Barring the war-time value of such a fleet which our militarists will never allow us to forget, there is every reason to suppose that--contrary to the usual belief--the existence of a large merchant service is an actual menace to the industry of this country. Any reader of Professor Taussig's "Principles of Economics" will tell you that in the long run imports must balance exports and that our credit abroad for things sold will just offset our debts to foreign nations.

How, then, it may be asked, has the United States for so long maintained a "favorable" balance sheet and been an exporting country? The answer is that the difference in value of the goods exchanged has been made up in various 'invisible" ways. Among these are the permanent drain of money (purchasing power) in the form of remittances of immigrants to the "old folks at home", and the sums spent by American tourists for "services" (eg. transportation, hotels, etc.). But by far the largest item is that for "services" in carrying our goods abroad in foreign bottoms, for which we pay with good exported.

Evidently, then, the more we owe abroad, the better it is for our manufacturers, for they are enabled to export more. And every dollar that we pay Americans for carrying our goods is that much lost purchasing power for our foreign customers. Were shipping as efficient (profitable) a way of investing capital as manufacturing, this would involve no loss to the country. But the hard struggle to meet foreign competition which our ship owners have had for half a century shows that shipping is no longer an industry in which we have a "comparative advantage". Why, then, invest our money in the less profitable way? Especially today, when the exigencies of the War have put the world so very much in our debt, to insist on building up our merchant service is to deprive foreign nations of just one more method of meeting their obligations and to postpone by just so much the return of this country to its normal trade conditions. It would be well, therefore, if those in authority thought it over very carefully before they adopt government insurance or any other method of keeping alive this parasite on American industry. NORMAN S. PARSONS '22. January 23, 1922.