SPHERES OF INFLUENCE.

Grey River Argus, 3 July 1922, Page 6

SPHERES OF INFLUENCE.

CUTTING UP OF CHINA. If the export of capital by the great industrial Powers to und'cvcloped countries lias caused most of the rivalries, enmities and armaments that have cursed Europe during the past generation, it has also evolved, a pacilic solution of its own problems. That solution is, however, only a little less vicious than the original evil of armed competition (writes H. N. Brailsford in the English “Labour Leader” of December 15). It consists, often after a lung period ot embittered struggle, in the mutual recognition of “spheres of influence-” The usual formula begins with the solemn, yet ridiculous,. cant of affirming the respect of the various Imperialist Powers concerned, for the independence and integrity of the country which they are dividing; it then goes on to define zones within which each of these Powers is to enjoy a monopoly in all major enterprises requiring a “ conccssion”—the construction of railways, roads, canals, harbours, telegraph lines, the exploitation of minerals, oil. forests, and the establishment of privileged | banks. Typical instances were the di--1 vision of Persia into British and Russian zones before the war, and of what remains of Western Turkey in Asia, after Britain and France had taken their “mandates,” into French and Italian zones. Such arrangements do in a sense ■ make for peace, since they end the competition between the Imperialist rivals. But they destroy the victim which is partitioned by cutting it up into provinces ,in each of which the real authority belongs to a foreign Power. The competition, moreover, which is thus ended ill one part of the earth’s surface immcdiatelv breaks out in another

lace, immeiuaivi' ... Io is, ind-ecd, customary, when one Power has gained an advantage in this way, for its rivals to demand “compensation” elsewhere. Financial Groups and the Division of China. As everyone realises, the main problem of the Pacific is created by the reckless hate, with which Japan, under the cover of the Anglo-Japanese Alliance, has earmarked vast areas of China (not to mention Korea and Si- | beria) for herself. If that process

were to be tolerated much longer, the I’ next stage would be the demand of other Powers for “compensation,’’ and eventually all China would be partitioned. Needless to say, the intermin- c able civil war rnav hasten me process, f as the Japanese may from the lirst. With or without secret agreement, J the South would tend to go largely to , “ the British Empire, though other Po- r wers would doubtless stake out claims j The Cassel Concession, which made . c over the rich coal deposits of the | e Kwantung Province to a British finan- j I eial syndicate, is a recent danger sig- i * rial v.hi<h cannot he ignored. Since the right to construct railways and waterways went with the coal, this con- ( cession would have given to a strong 1 j British financial group, a stranglehold 1 over the future development of the ’ whole region round Canton; ami, in- 1 i deed, a British official, in defending it, ■- lis said to have claimed that as the * j Hinterland of Hong-Kong, this pro--1 vincc is a British sphere. Fortunately, this very scandalous concession, obtained in return a loan from a military j clique which happened to be in tem- • porary possession of Kwantung ,and stamped in every clause with the eviI deuces of a predatory motive, has never been formally ratified, even by Peking, .lit does, however, reveal the ambitions ■ ! of this financial group, and its ability : I tu secure British official support. A solution of the Chinese question Jon lines of partition is happily imposi ' sible. The activity of American uol- ’ I leges and mission in China, and the ■ mutual sympathy between devoted t-ea- | ? j chers -end apt pupils, has created. I , I take it, a genuine concern among dis- | 1 ' ini--rested Amurieans for the welfare i and freedom of China. ISuch a sen- ! e j timunt might avail little, it realistic . I interests were opposed to it. But Ame- ] L ' i ican capital thinks, for reasons of ils ! own, on parallel lines. It is not con- j . eentrated to th? same extent as British | ’• | and Japanese interests in par.icukir ! 1 1 regions of China, but very widely dit- '/ I fused. Dlorcov-?r, it is potentially so p i vast, and capal.de of such indefinite (*xI pansion, that there seems to be no rea--11 i son why it should content itself with ', s ' a limited area of China. It has. m >t i th.- confidence and goodwill of the Chino ■ cse patriots and intellectuals, an asset 1 ! of real value. v I Apart altogether from any traditional s. 1 dislike of Imperialistic policies, there 11 | plainly is no sufficient reason why Amei rican finance should consent to be bribn 1 ' ed. even with a veiy big and very valic liable “sphere of influence’’ in China. : Il is incorruptible, because it may hope. | eventually to penetrate everywhere. i<. 'One may assume, then that no diplon j matist will be so ill-advised as to proK • peso at "Washington tli’<? kind of arl| rangement which figured in the Turkish ;i Treaties. On the contrary, the burnn- ing question is rather whether Japan , e will manage to preserve any vestige v of her monopoly in Shantung, and how | much of it she will keep in Dlanchuria. i‘c j How Finance “Pockets” a Province. ’’ It would be a mistake to suppose, however, that spheres of influence are created solely by official action, and ibv bargaining between rival I’owers. I They may be. created de facto, wherecver a strong financial group directs its I attention to a particular province. i When such a group has once obtained ” a concession for the construction of a trunk railway, the rest follows natur. rally. A bank follows or precedes the railway, and is soon on the look out

wi promising investments. If there e are mines of coal or iron-ore, these c and the railway arc mutually complc- <j montary, and one can hardly thrive s without the other, and the next obvT- ; ous step is to open a steel works. In i a very lew years, without any deep i plotting in London or elsewhere, the ' bank, if it is wealthy and enterprising, i may have the whole development of i the province in its hands, ; nd rivals I i can be excluded without any formal < monopoly secured by charter. The bank f must deal intimately with th? provin- i cial administration, and if it is skilful, 1 it will .soon have the governor “in its i pocket.” Thus a sphere of influence ; arises almost spontaneously, and the < home administration, without, having planned to ext eml its area of political influence in China may be confronted !' by accomplished facts. American sph- , eres may come into existence in this ’ way with the same practical results as I have followed the more deliberate Ja- • panose procedure. The thing is a na- I tural consequence <>f the modern development of industry, and of the part. ’ which finance plays in it. The inter- I eonn-eetion of banks, railways, mines, ' and industries makes for efficient and economical management. None the less it may mean the end. in anv real sens-e of Chinese independence. | Il the republic becomes a patchwork 'of American, British, Japanese, and | Franco-Belgian spheres, in each of which a di fl erent foreign group exerts 1 th? political power which alwavs be--1 longs to concentrated capital, the unity I of China is gone, and even local puli- j

ties must take undue account of for- I eign interests. Sooner or Inter these . | foreign financial groups, striving to ex- j bend and consolidate their spheres, will L cornu into conflict, and involve their • I Governments. New Railways and Naval Budgets. Dlanifestly, the formula of the- “open door” is of little value, unless it. includes some constructive plan for obviating this mor-e or less spontaneous growth of national spheres of monopoly. For some years past, world-finance seems to have been reaching' out to- _ wards a solution by syndication. The . rival national groups of financiers may | obtain peace by agreeing to delimit ami 1 respect, each other’s local, partition. ' There is another possibility—that these , groups should fuse, and conduct their operations as a single int-ernation? 1 syndicate. That was proposed and even adopted in principle, at one moment, as a solution of the Moroccan problem, j German and also British capital were to share with Franch capital in an j agreed ratio in developing the mines. , The Germans at one moment offered to f build the Bagdad line on that basis. The late Herr Erzberger. in a moment ; of desperation towards the end of the t war. proposed that Britain and Gerc many should ensure perpetual peace by ( each taking shares, to the extent of L one-third, in the othoi’s shipping companies. None of these proposals had g any practical effect, but they sugest , that political finance is searching for a I new and more pacific, technique. The f banking Consortium in China is. a first _ approach to this kind of organisation. It would bo fantastic to suppose that all foreign enterprises requiring eon-

I‘ssions in China (that definition, of uirse excludes the immense majority f trading firms which confine themidves to the import or export of ;uods) could at once be fused in a vast itcrnational trust. The key positions u all economic strategy are the railways; second to them come the coaltines. It might suffice at this stage i both could be neutralised. If this s too ambitious, it might even be nough to ratify the policy of the Conor’i urn, which insists that all future ailway building shall proceed on this )asis. It is over new developments hat conflicts arise; it is the railways ?et to be built and the mines yet to be •poned by American, British, and Ja■)en.?se capital, which may one- day add o our naval budgets. Socialised. Transport and Finance. Th.* plan, of course, is not a new one. it revives the scheme of Dlr Secretary Km x in 1909, when the Taft adminisLiatiun tried to withdraw the Manchurian railways from Russia and Japanese contractors by neutralising or interralionaiising them. The plan was both od and bold. It failed then, and it might fail again, if it were proposed for Dlanchuria, a province which it may now be too late to rescue from Japanese penetration. It might ba worth while to revive it, however, for the rest of China, and even if it should be difficult to imdude all the existing railways and coal mines, it might be possible to reach an agreement about future developments. The idea is capable of many forms. The best might be the creation of a single national

oe me rmation oi a single national railway system, financed and managed for a lime by the banking consortium. It is obvious, however, that China must retain the political control of her railways. In some form the native banks must be associated with the foreign concerns. Leases must provide ultimately for the reversion of the railways to Chinese national ownership. A simpler plan would be to require ’hat the share capital of all future Chinese railways should be so allotted that no single nationality should possess the majority of the shares. The i gaia from such an arrangement might ; very great. It would mean that I railway building would ceaso to be a political, imperialist venture; the subject of endless friction and competition between rival Bowers. It would mean. abo\? all. that when a province was • qtened to trade by a new railway, no one would assume or expect that it must become by that mere fact a potential British or Japanese sphere of influence. Politics would recede into the background, and as they receded China would cease to be a factor in aggravating the naval competition of the Po1 am dealing only with solutions which seem realisable at the actual moment. This particular solution in t hides all the familiar evils of every single merit is that it avoids the fric ward country on a basis of profit. It? scheme for the exploiation uf a backtion that may lead to war among th( capitalist Powers.