THE EMPIRE'S PROSPECTS

Dominion, Volume 10, Issue 2955, 15 December 1916, Page 19

THE EMPIRE'S PROSPECTS

LESSONS FROM AMERICA

kit has been said, in some quarters ( atithe European war has given- -to rthe United States tlio industrial and •commercial supremacy of the world. ,The truth of the assertion is denied' ;by Mr. J._ Ellis Barker in an interest--sng_ and informative article in tho ,'"Nineteenth Century and. After."<► He [maintains that although-Britain is enjgajred in a war, which is likely to absorb one-half of hor national wealth, the bus. good prospects of achieving industrial supremacy and outdistancing ( 3ier great .rival 'across the- Atlantic, tin his article, some extracts from. Vwhioli are given below, Mr; Barker ad-;-[duces very cogent arguments in support of Ins hopeful estimate of the position and outlook. One fact upon .which lie lays strong emphasis is that war, though in itself exhausting,, ap-plies-an enormous'stimulus to national enterprise. "Tho Civil War," he remarks, "created the industrial supremacy of the United States.- Tho present, war'should give tlie industrial supremacy of the world to the British . Empire." In the first part of his article, Mr. Barker sots out 1 somo leading facts showing tho relative position of the , British Empire and the United States where material wealth is concerned. The idea that Great Britain is "the richest country in the world" is erroneous. • According to the "World Almanac and Encyclopaedia" of 1916, the 'national wealth of the British • Isles/ the British Empire, and the United States is as follows:— ] £ (United • Kingdom 17,000,000,000 jßntish -Empire .......... 26,000,000,000 United' States 37,547,800,000

"According to- the American estimate the wealth of the "United States :1s considerably, more til,in twice as : great as that of tho United Kingdom find is nearly 50 percent, larger tlian. that of the British Empire as a whole .!'As, during recent years, American' .wealth Jias been,growing about three j times as fast as British wealth", there jis apparently much reason for believ'■ing that, owing to-the heavy handicap i imposed upon the United Kingdom by itho war, tho United States will in fujture outpace economic Britain at a (faster and more furious rate ■than. ■ ever . .. . The United States are far ahead of. all other najtions not only in developed "and exploited natural resources, but also (in mechanical .outfit. The engineipower. _of the .United States is ( vastly superior, to that of Great Brii tain ~ and of the ..British Empire. ■ Acthe .last British and American Censuses of Production, the manufacturmg industries,of tho .United. States employ 18,675,376 horse-powers while the British industries emplov only 8,083,341. . . America's superionty m mechanical outfit'is liotSbly 1 exemplified in the extent of her railways as compared with other countries. Mr. : Barker gives tlie following figures Miles of Railway. 1 j.. •United Kingdom • *23"441"". British Empire 134^131 207,432 vU mt ed States 254,732 Iho World 665,964 Undeveloped Resources; "In developed and exploited resources," Mr. Barker goes-on to remark, "tlie United States., - are . undoubtedly, far ahead ot the-BritlsU Empire, but'iii undeveloped and_ unexploited resources the British Empire -is .'undoubtedly far ahead ot the United States It is wrong to say;that Great Britain is the' richest buj; "it-inay safely! be asserted that,-, bylits;. extent arid-na- ; tural resources, the Britisii Empire.ivliicli spreads through all'climes,-possesses. tha greatest potential national wealth in the world. It-is .therefore, obvious that the incomparable latent riches of tho • Empire-may . bo- converted into actual wealth and :pbwe'r, provided • tliey are 2LS" sly „ and Y' 1 isel J' exploited. Wealth depends after all not so much. 011 tho possession of great natural, resources as onthe action; of men." - * --.

The Aftermath of War; In America. at length with the effect..of the Civil War of 1861-1565 in promoting tlio nso and expansion of American industries. This war: destroyed about a million lives at a' time i'-f d Sta , t<!S ll!id le ss'than 3d,000,000 white,. and coloured inhabitants, and cost about £2,000,000,000much more than that amount if account is taken of the financial ■ valueor the lives lost and of the immense amount or valuable property destroyed. In 13G0 the national "wealth of the United States amounted, according i „ ccnsu ?' M-'only £3,231,923,214.' It follows that the Civil "War cost a sum equivalent to two-thirds of America s national wealth. Yet the war did not impoverish tho country, but, incredible as it may sound,' greatly .enriched it" The Civil 'War, Mr: Baiker declares, created tho impetus which made the United States therichest nation in the world, and the present war will vastly benefit the Allied nations, and especially the British.Empire, provided they will profit by.the gieat and. invaluable, lesson furnished by the United States. Simultaneously ivjth the terrible waste and destruction of the war, other factors were operating which made tile decade in ■which the Civil War occurred one of unexampled industrial progress. What these factors were is indicated in tho following excerpts, taken by Mr. Barker from American- writers :-r-

ixJfr- in ' u ' s 'Economic History of the United States;''\vrote , The Civil War,- by practically cutting off foreign intercourse, immensely liastened the growth of domestic 'Miistries. The industrial revolution thus inaugurated has been compared ■with that in England one hundred years Wore. It certainly marlcs a turning-point in the economic development of the country as distinct.-, as that in political' life and more significant in its effects than the earlier-industrial revolution, .intro- . cluced in this country fifty years be- , <f 0 » e ' >y *' le ratrictive period, ' Another American writer, Katharine Coman, stated in her 'Industrial .History of tl;e United States':—

- "The war demands, coupled with the. protective tariff, induced an extraordinary activity in every department of business enterprise. Universal buoyancy and-unbounded confidence in the future- rendered it easy to borrow money at home and abroad. European' capitalists invested readily .in, the United, States securities, railroad bonds, mining eJoci, and thVresonrces of the country were exploited as never before."

INDUSTRIAL SUPREMACY FORETOLD THE STIMULUS OF WAR

ODR LATENT WEALTH AND OPPORTUNITIES

THE PART OF THE DOMINIONS

| An Imposing Picture of Progress.The best and the most imposing pic- , tura of the progress of the American manufacturing industries during tho decade in which the Civil War occurred, Mr. Barker remarks, is fumish|ed by the dry statistics of,the American censuses.'. They show tho following remarkable and almost unbelievable progress during a period of war: — ' 1560. 1870. Manufacturing . establishments 140,433 252,148 Capital employed $1,C09,855,715 $2,118.208,769 Hands employed • 1,311,246 - 2,063,996 •Wages paid $378,878,966. 8775,584,343 Value of products ■ $1,885,861,676 54,232,325,442 • "-Between _ 1860 and 1870 the number of. manufacturing establishments increased by. 80 per cent., and their capital was more than, doubled. The number of hands' employed increased by 55 per cent., and the wages paid to them and .the value of products turned out increased .each by more than 100 per cent. That is truly a wonderful record. The figures given prove conclusively that the Civil War, notwithstanding its destructiveness and huge cost, did not ruin the American. industries, but caused their rise and prosperity." . 's ' Former British Wars.; Great Britain's former industrial predominance, Mr.. Barker maintains, was founded not in peace, bul in war. It was created, he says, during the period 1775-1815. Of" these forty years thirty were spent in colossal wars, tho war'with the' American colonies and their European allies, and. the gigantic war with Republican and Napoleonic France. These wars gave to Great Britain her late pre-eminence in commerce and industry.

"Thepresent war should not only unito the Britisii Empire, but should once more give to the British people the'foremost position in the economic world, provided' tliey make wise and energetic use of their On tho other hand, the United States, far from enriching themselves at the., cost' of the fighting nations, far from coining the sweat and blood of the Allies into dollars, may, through peace and ease, fall a prey'to that'fatal self-complacency and stagnation from whicli political and industrial Britain has suffered for decades and from which she lias been saved by' the war. Before long the great Republic may begin 'to stagnate and decline, and'become a victim of her undisturbed material prosperity. It seems not unlikely that, owing to the war, tho United States will henceforth decline, not only politically, but economically as well, j while Great Britain will once more become economically the leading AngloSaxon' nation." ■' ' * • Britain's Mighty Effort. In earlier. writings'. Mr/ Barker had shown that the American workers in factories, mines, etc., produce per head from two to three times as much as their British contemporaries engaged'in the same" callings.' The vastly greater output of the "American workers lie found to be explained by tho employment of powerful and far efficient, machinery, better •organisation, a "greater desire for progress on the part of tlie manufacturers, and a comparative absence of a deliberate limitation of output on ;the part of the workers. He continues:

"I showed that Great Britain could doublo and treblo • her income and wealth by doubling and trebling her engine-power upon the American plan, and by improving her organisation.- I showed that she could easily pay, and more-than pay, for the war by Ameri-' c'anising "her' industries. Since - the .time when those words were written the' Americaiiisation of..British industry lias begun. Tho pressure of necessity lias .brought .about .many. . of . the necessary xhang'es".--.The. British employers .have been/awakened to 'the need of progress' and reform, and . the .British trade unions •have- abandoned- their .fatal policy re-. 6trictirig : output' and antagonising ' improved machinery. Before the wa'r the United Kingdom had, in round numbers, 18,000,000 male and female'workers employed in agriculture, industry, commerce, domestic service, etc. Since then about G,000.000 men have joined the Army and* Navy,-.while, according to Mr. ; Montagu's; statement made in, the HouSo. of Commons on August 15, 2,250,000 men and women arc engaged in making munitions under the Ministry of Munitions. If we estimate that, in addition to these, 750,000 men and women not under the Ministry of Munitions are engaged on war work, it appears that tlio war lias reduced the number of British workers by exactly one-half. However', the loss in man-power i 3 probably not 50 per cent., but about 60 per cent., because the youngest, the strongest, and Hie most efficient workers are either in the Army and Navy or engaged on ivar' work.' \ The consumption of the country is aboiit as great as it was in peace time; -for, . while private demand for goods is smaller here and there, the reduction effected by the economy of somo is probably counter-balanced by the increased spending oii the part of the workers, and especially by the enormous dsmands for ordinary goods for the nso of the Army and Navy. Tho British exports for the -first seven months of 1916 were, but for .£10,000,000, as large as those during the corresponding seven peace, months 'of 1914, although, allowing for the rise in prices, they were considerably smaller.

The Fruits of Food Organisation. "Tt, therefore, appears that' with only one-half of her workers Great Britain produces now j approximately as large a quantity of ordinary goods as she did with' all her workers boforo the wav. In other words, the output per worker lias approximately doubled. Necessity lias led to more intensive and more scientific production, to better organisation. to the introduction of the most modern methods and of the most nerfect machinery, not only in the manufacture of-munitions-of wav..but in ordinary manufacturing as well. It has' been stated that during the war the United Kingdom -has imported <£200,000,000 worth of American machinery. The vast ad'•anep made in manufacturing will lm dbubl; be of permanent benefit to the nation. Tlio new and efficient processes will i-n'- be alwdonnd for the'old and wasteful ones. Mr. Montague stated in i:h« House of Commons on August 1.1, when describing the activity of the Jti'iisfcn' of Munitions, according to the vp'-liil-im report: " 'Old-fashioned machinery and slipshod mothods are disappearing rapidly under the stress of war. and whatever there ,may have been of contempt for science in this country, it does not exist now. There is a new spirit in evendepartment of industry which I feel, certain is not-destined to disappear when we-are at liberty to divert it from its present supreme .'purpose of beating the Central Powers. When this is done, can we not apply to peaceful uses the form of organisation represented by the. Ministry of Munitions? lam not thinking 60 much of the great buildings whidi | constitute new centres of industry,

planned with- the utmost ingenuity so' as to economise 'effort, filled, with machines of incredible efficiency and exactitude. L wish rather to emphasise the extent to which all concerned—and each section is vital to our objects—are co-operating' to obtain tho best results from tho material in our, hands. Wo have tho leaders of all the essential industries now working for us or co-operating witli us/in the Ministry. The great unions render us constant assistance in the discussion and solution of difficulties, whether with our officers or within their own body. - On technical questions of the most varied character ije have the advantage of the best expert advico in the country. We have in being, now that British industry is organised for war, the general • stall' of British industry. lam stire that wo 6liould sacrifice much if wo did not avail ourselves of, that staff to consider how far all this moral and material energy can bo turned to peaceful account.' High Pressure Education./ "The necessity of war has not only vastly increased tho officiency of the existing industries, but has caused powerful new industries to arise. Vast quantities of chemicals, electrical .apparatus, glass, optical-ware, machinery, tools,' etc., which formerly were imported from abroad, are now manufactured in this country, especially us import prohibitions have provided a powerful stimulus. The war has greatly promoted technical fdu : cation and 1 increased' technical ability, for skilled workers in enormous numbers were wanted! Hence hundreds of schools had to be created in which unskilled workers were converted into highly skilled ones. Inventiveness was stimulated by the necessity to." manufacture numerous articles which -hitherto were mads abroad by secret processes. . Last, but not least, the .war has led to the creation of huge model factories for making munitions, compared. with which the. great Woolwich establishment is small and out of date. These giant factories will not be pulled down after the conclusion of peace, but will; of course, be adapted to' the' production of ordinary goods. " Great Britain will undoubtedly follow in this the example • set by t'lie United. States after the Civil War.

. "The war lias doubled the manufacturing efficiency not only of Great Britain, but of-France, Bussia, Italy, and Japan as we!K\ When the struggle ia over, tho United States will no longer compete with industrial nations possessed of an antiquated outfit whose output pet man is low owing to the use of inefficient and labour-wasting machinery and methods. During the war the most important industries of the whole world have become Americanised. The States will henceforth lave to compete on equal terms in an Americanised world. They will discover that the war lias destroyed their industrial paramountcy. ' • The' Most Important Industry. "Tlie" change eifected by the war will be particularly striking in the iron and steel industry, the most important of all manufacturing industries.' Before the struggle the United States and Germany doiuiuated the world's iron and steel trade, and Britain's position bad sunk very low indeed, as the following figures show, which are taken from the 'Statesman's Year Book':—,

Production Production of iron of steel in 1912. in 1912. Tons. Tons. United States ... 29,727,000 31,251,000 Germany 17,582,000 17,024,000 United Kingdom:.. 8,751,000 6,903,000 "In 1912 the United Kingdom produced only about one-half as much iron as tiermany, and one-third as much iron as the United States. In the same year the United Kingdom produced only about one-third as much steel as Germany, and one-fifth as much.steel as the United States."

Germany's defeat, Mr., Barker, remarks, will no doubt lead ,to tho decline of her mightiest industry. The bulk of the iron ore employed by tho German iron industry came, beforothe war, from German Lorraine, Luxemburg, and the French districts close to the German frontier. "Francois acquisition of Alsace-Lorraine will deprive Germany of the bulk of her iron.ore, and make France the proprietor/of- tho. largest iron-deposits in Europe. ■ The iron ore in sight iu the small Lorraincr Luxemburg'district'is approximately as plentiful and as rich in metal as the iron, ore of.tjie United States. . . .

Unfortunately France has little- coal.. She would .therefore haye to import coal-from Westphalia, or England .for.'exploiting..that vast .resource, (of iron)-, or she would haVo to send a largo part of the . Lorraine ore to Germany or .England for smelting. Groat Britain and France have been partners in war, and should be partners in peace. They might jointly exploit the'vast ore deposits mentioned. By co-operating, 15ngland find France might dominate not only the iron- trade of Europe, but perhaps that of the --whole world. Tliey might leave far behind them the 'iron industry of the .United States. 1 !;. .;A; Spacious Outlook.

"fliC. wnseqheirce;; of the: war," Mr. 'Barkerigoes on'toremark, "the industrial "output-" of".th« ••'United Kingdom, as that .of the' "United.'.States after the Civil Waay.-may •; be doubled and. trebled. The • United .Kingdom',- like the smnll industrial' area" '61 s . the United States, will iind its best and safest market for a vastly increased industrial output in the- Dominions and colonies, in its Far West. After the Civil War the United States developed their great estate with the same energy with which they had con- , ducted the war, I have shown in the beginning of this article that tho United States, with their comparatively small' territory, have almost exactly twice as many miles of railway as has the wliole of the British Empire with its immense territory. _ Hundred? of thousands of miles of railway are required throughout tho British' Empire. The opening of the Dominions and colonies by means of railways alone will give full employment to the vastly enlarged iron and steel industries of C-treat Britain and the Dominions for decades 1 to come. The British Dominions have room for hundreds, of millions of white settlers. After tho end of the Civil' War money had to bo made to pay off the war debt. To make money, the Far West had to be opened up by means of railways and immigrants, for railways and settlement must go hand in hand. The numerous immigrants kept fully employed not only tho American iron, and steel indusiry which the war had created, but all tho American industries wliich had been immensely enlarged during tho struggle.

Our Latent Resources. "In territory and in latent resources the British Umpire is far superior to tho United States, but in developed and exploited resources, in industrial power, wealth, aud white population, the Empire is very' inferior to the Great Republic. Between 1871 and 1911 the population of the United States increased by 0i1,501J,000, that of Germany increased by 25,400,000,'whi1e the whito population of the British Empire grew by only 21,500,000. That comparison is humiliating for the British Empire. If tlio same rate of progress or a similar rate should continue to prevail, the British Empire would in course of time become a second-rate or a third-rate Power. Wealth is power. The British Empire should endeavour to be the leading Anglo-Saxon nation, not only in territory, but in white population aud wealth as well. Hitherto the development of the Empire has been restricted by a small-minded parochial policy of the component parts, by lack of Imperial .organisation and co-operation. The great Imperial domain can lie adequately protected and exploited only by the Empire as a whole, by a truly Imperial Government, by Empire-wide co-operation. Immigration and emigration, transportation by land and water, the planful opening and settlement of the vast empty, spaces of the Empire, and the question of inter-Imperial trade must be settled imperially, not parochially.-. If that is done there is every reason to believe that in a few decades the British ISmpire- willbe far ahead of . the United States both. In white 'population and in wealth. Land and Sea Communications. "It may be argued that -tlio British Dominions and colonies cannot be developed as rapidly as the United States,

| although the resources of tlio former are greater than those of the latter, because the United States are a single country which nature has opened up by a number of magnificent rivers. That argument is erroneous. The United States |are not a'State, but a number of States, which jealously defend their- State rights, and which do not readily co-operate. Be-' sides, the seas are the Mississippi, the Missouri, and the Hudson of the British Empire. They do not separate, but connect the different parts. "In consequence of tho Civil War the United States standardised their chaotic railway system, as has been shown. The}* placed it under imperial control, and gradually evolved a unified and national system by means of the Inter-State Commerce Commission. Cheap transport and freight aud equitable rates are the best means lor opening up the Empire rapidly. The Governments of tho Empire should learn from America's lesson and control transport by. laud and water throughout the Empire. At present private railway "companies and shipping companies direct, divert, stimulate, or restrict the imperial trade accordiE£ to their conyenience, or even penalise British and'facilitate foreign trade for their own benefit. The transport companies by land and sea must be taught that tho interests of the Empire' are more important than those of their shareholders." The Imperial Co-Partnership, .After touching upon the neecssity of a' comprehensive stock-taking of Imperial resources and a common-sense tariff policy, Mr. Barker makes the following observations with a particular bearing upon the position and responsibilities of. tlio Dominions: "The war, as has been shown at the beginning of . this article, may cost about i £1,500,000,000. That is a colossal burden, and the British Empire should endeavour to pay off the debt with reasonable speed. The war was waged not. merely for the benefit of the United Kingdom, but for that of the British Empire as a whole. It seems, therefore, only fair that the British- Doriiinious should assume their full share or the* cost of the war, especially as the assumption of their part of the burden should prove highly beneficial to them. A large increase in taxation throughout the Dominions would most powerfully stimulate production. Hitherto the development of the Empire has beerf hindered very seriously by tho fact' that too many emigrants have endeavoured to make a living not by production, but'by trade and speculation. Nearly 40 per cent, of the inhabitants of Australia live in .the five capital towns, while tho Tast expanses of the country remain empty. Nearly 50 pel' cent, of the inhabitants of New South Wales and Victoria live in . Sydney and 'Melbourne. ; . Several years ago when I was in the West of Canada I found that the principal industry consisted in gambling in real estate. The Dominions have developed 60 slowly very largely because money was too cheap, taxes were too low, and life was too easy. Men could make a good living by little work. M Great Britain should, by the unwillingness of the Dominions, be forced to take over an unduly large share of the war debt, it may be ruinous not : only to the Mother Country, but to the Empire as a whole, especially if the Dominions should practice at the same time an . exclusive policy towards British manufactures. "Tho war has been waged not only for the present generation, but for' future generations as well.' It seems, therefore, only faS}' that part of the cost should be borne by future generations. It might be thrown in part on tho latent and undeveloped resources of tho Em--pire which might be pooled for the pur-, pose of' repaying the war debt. The other part of the cost, to be paid by the present generation, might bo allocated to the various States:of the Empire according to the number ..of the people and their wealth per head, so that the burden should bo borne fairly and equally by all. Periodically the allocation might be revised and a redistribution effected in. accordance with! changing circumstances."

In conclusion, Mr'. Barker remarks that though the war will apparently devour a sum equal to about, one-half of Great. Britain's national wealth, that fact need not. disturb u5.,.. .. .

"The Civil War cost, the United States a sum vhiclv was equal to abo\it\~twothirds their national wealth at the, time. During the fifty years which have elapsed 1 since its conclusion, the wealth .of the. TJnited. States .has. grown at so rapid a rate, largely in consequence of that war, that to the present generation the gigantic war cost seems almost trifling. The sum of £7,500,000,000, thougli "equal to one-half of Great Britain's national wealth, cornea only to about onefourth of the Empire's national wealth. In a few decades the cost of the World War may appear as small to the citizens of the" British Empire as that of tho Civil War appears now to most Americans, and that of the Napoleonic War to most Englishmen of tho present. The war with Napoleon created England's economic supremacy. The Civil War created the industrial supremacy of the United States. The present war should .give the industrial supremacy of theworld to the British Empire."