"LIVING SPACE"

Evening Post, Volume CXXVIII, Issue 36, 11 August 1939, Page 9

"LIVING SPACE"

COLONIES OR TRADE

CAN GERMANY BE

SATISFIED?

MANY DIFFICULTIES

(By 11. V. HODSON.)

Lord Halifax's now famous speech to the Royal Institute of International Affairs on .June 29 was epoch-making "in the literal sense. It marked a new epoch in British foreign policy because it presented coherently, for the first time, the result- of Great Britain's fateful decision to be a European Power as well as a world Power. Yet the most important part of the speech was not its re-emphasis of British pledges to defend certain countries of Europe, but its references to the contributions that Great Britain might make, mainly outside Europe, to a better world order ynder favourable conditions. Now that Great Britain has committed herself to go to war, if need be, over the internal troubles of the European continent, it becomes a vital national interest of hers to alleviate those troubles, real or imagined, and to see that they do not lead to war. In the European Continent itself, she has little or nothing to contribute to such alleviation: her part must lie in two fields where she is favoured above the generality of nations, that is to say, trade and finance on the one hand, and colonial administration on the other. It is impossible here to go into the complicated non-economic aspects of the colonial problem. But this must be said: a purely economic solution can never suffice to get rid of the problem as a source of friction between nations. Territoi'ial adjustment is indeed impossible with the Nazi Germany of today; for it would mean, first, an act of military suicide, and secondly, the handing over of native people for whom we are trustees to a Government that recognises no right but the right of Germans to dominate all other races by force. Yet in the long run there can be no lasting solution which does not enable all countries to contribute according to their abilities, in administration and politics as well as trade and finance, to the welfare of backward areas. The answer may be federal union of the forward countries, or forms of condominium over the backward, or internationally recruited administrative and technical services in the colonies; but it must somehow fulfil that general condition. THE ECONOMICS OF COLONIES. Examining the economic aspects of the colonial problem, Lord Halifax spoke at length of the way in which the advantages 'of ready access to colonial markets and to colonial raw materials could be shared more widely, if trade barriers were i-cduced all round. ■ He showed that a need for Lebensraum —living space—is more likely to be relieved by expanding trade than by acquiring territory. Germany, a country that actually requires to import labour from abroad, docs not need physical space to settle its people, but a new economic policy to raise their standard of welfare. "I have no doubt," said the Foreign Secretary, "that in the conduct of our colonial administration we should be ready to go far upon the economic side, as we have already on the political side, in making wider application of the principles which now obtain in the mandated territories, including, on terms of reciprocity, that of the Open Door." Is this offer enough? There are many people who think that as a matter of principle, regardless of reciprocity, the Open Door is the right policy for territories for whose people we are trustees. We cannot be sure, they say, that we are dutifully carrying out our trust unless our wards can buy in the cheapest market, or the market that suits them best, not the market that suits us best. Other people argue that since we in Great Britain give the colonies reciprocal preferences, it would be unfair to put other countries on an equal footing with us in colonial markets except on the basis of reciprocity. But this controversy is not the gist of the matter. The real problem arises from the character of Germany's economic policy. The concept of the Open Door fits into the pattern of traditional commercial policies, under which everyone is free to trade as he will within the limits set by tariffs (or occasional quotas) applying equally to all foreign countries. It has no relation to the entirely different type of commercial policy which aims at controlling every particular trade transaction in the interests of some non-economic objective—military needs, self-sufficiency, political friendships, or artificial exchange control. Such is the policy of Germany. The OpenDoor fare that is offered to her is edible, and even nutritious, but it is not part of the diet which she has imposed on herself, and having consumed it she would still be hungry. "A GIANT SWAP." Is there some more appropriate economic offer that we could make to Germany—something that would chime in with a regime of exchange control and barter? It would have to have the nature of a grand-scale clearing agreement, under which Germany could procure the raw materials that she needs from the colonial empire without having to obtain "free" exchange. We have to envisage a giant swap of German manufactures for rubber, tin, tea, copper, phosphates, sisal, and other colonial products, taken in guaranteed quantities at fixed prices. There are obvious difficulties in the way, the first of which is the fact that the British dependent empire is not a single economic unit but a collection of separate countries each with its own commercial interests and its own means of defending them. We cannot offer to exchange German imports of Malayan tin for Ceylonese imports of German machinery unless we devise at the same time some compensatory means of paying Malaya and enabling Ceylon to pay- A second difficulty, allied with the first, is that the doctrine of trusteeship prevents us from negotiating a pact which would, in effect, oblige the colonies to buy certain quantities of German goods, and then force it on them whether they like it or not. There are other difficulties, political j as well as economic. It would be fatal [ to take any initiative at this moment which would leave on German mindsthe impression—entirely • false —that| the British Government and people! were wavering in their resolve to stand fast by their friends and their ideals. Nevertheless, the idea is worth exploring. The United Kingdom, Canada, South Africa, and New Zealand have already concluded "payments agreements" with Germany. For the colonial < empire as a whole to do so would be j no innovation of principle. The present opportunity, on the economic side, is ripe for pursuing the idea because many colonial products are in a state of giut. A fixed-price, guaranteed-pur-1 chase agreement with Germany would ihei'efore be acceptable to territories that might otherwise have felt it an imposition. And the time is politically ripe, too, because Ihe nature of British foreign relations today demands of the Empire the adoption of a con-1 shuctive as well as a defensive international policy.