THE DOMINANT FACT IN THE WORLD SITUATION.

Otago Daily Times, Issue 18444, 4 January 1922, Page 6

THE DOMINANT FACT IN THE WORLD SITUATION.

ANALYSIS OF THE CAUSES OF THE WORLD’S ECONOMIC CATASTROPHE.

—Economic Ruin.—

Mr break H. Simonds, on® of the meet acute observers of the war arid its effects, explains in a drastic way the meaning of the' economic catastrophe which is troubling every nation in the world, and making itself felt in hunger and unemployment. ‘‘ln reality the war had brought the world to the extreme edge of economic ruin. When peace had teen written, when the disputes over strategic frontiers and natural boundaries had lapsed, suddenly it became clear to the whole world that peace was not in the least what had been expected. The conditions, of 1914 were not restored although the destruction of war was oyer, armies had been demobilised and business operations undertaken instead of a return to normal conditions' as peace became more complete, paralysis became more general. “It was discovered, then, that while nationalism had dominated in the Paris Conference and imposed upon the attendant statesmen the demolition of, the Austro-Hungarian Empire and the creation of many new States in succession to the empires of the Romanoffs and the Hapsburge, the economic factor now began to assert itself. ' Newly liberated tribes, once the rejoicing over the realisation of agelong aspirations had passed, found themselves condemned to Thisery and worse, as a consequence of the destruction of that economic solidarity with their hated oppressors, , -To-day’s Peril.—

“I have dwelt upon this economic, phase, because it seems to mo the single enduringly important one. The sins which the Paris Conference committed against right and justice, however great or small they, may seem, are at the moment far less the source of peril to world peace and world order than the sins committed against the economic facts, or the evils which the Paris Conference failed to abolish, because it felt itself without the power or lacked the vision and will to abolish,” adds, Mr Simonds. “Today the peril to world peace does not lie in excessive armaments. Their menace is to the solvency of nations. In omvpresent situation, given the enormous debts which' thß war has produced, no country can afford to engage in a competition in armed strength. This way lies national insolvency and worse. What menaces peace ; to-day, and will menace it ever more to-morrow, is the brutal fact ■thpt the war, in destroying millions of lives £.nd billions of wealth, has reduced enormously the purchasing power. of peoples. It is no longer possible for the world to keep .pace with the machinery which has been constructed. 1 There are not cargoes enough to fill the ships which exist; there are, not customers enough to buy the goods which the factories can produce. —A Competition with Death.—

■ “But, for • Britain, for Japan, for Germany to a degree, this means a new competition with death- For there are, a certain number' of millions of people in each, of these countries who are fed by the sums earned through the manufacture and export of goods. It. the goods cannot be sold, then the millions must migrate; for there is not the smallest chance that the country in which they, live can maintain them. This is what the vast 'unemployment phenomenon means in Britain. This is the danger which overhangs Japan and Germany. “Now the real hop© of avoiding the disaster must He in the opening of new and the reopening of old markets. But it is clear that many years must pass before Europe can return to normal capacity for absorbing. The future markets for the manufacturing nations must be sought either in Russia or in China. Here are markets which might be devedoped. Here is an opportunity to sell and to expand which might, keep the factories of Japan, of Germany, of Britain busy. But Russia remains closed; there is left only China. How America Stands.— “And, in the meantime, we in the United States ; have developed. While Europe’ fought, we expanded our plants to do the work which had been done by the factories of the Old Word. We continued to produce from 1914 to 1917 while Europe indulged in nearly three years of destruction. To-dav we, too, suffer from the shrinkage in the world market. For, us the "question is vital, too. We have millions of unemployed, we have idle and semi-idle factories, empty ships. For us, too, the solution lies, measurably at least, in the opening of China, the development of that vast country with its tremendous resources (Mr Simonda writes as an American). “To-day we stand in competition with the Japanese and the British for that Chinese market. But. if we have an equal chance, there is little question that we shall dominate it. And if we dominate it, millions of Japanese must starve or migrate. And, so far as Great Britain is concerned, it is unmistakable that if we and Germany maintain, our factories in work and obtain markets for their products—and both countries are in better physical shape to do this than Britain—the result will be an enduring, misery in Britain beyond ‘ words' to describe. —Hunger Drives.—

“Hunger is the incentive which drives British and Japanese statesmen to-day. World markets are the prize for which they contend, not as a detail jn national development, but as a question of life or death. There are more factories jn the wbrld than there is need of. There'are millions more human beings in Britain and Japan than can be supported, save through' the result of sale and barter abroad of goods manufactured at home: barter against focfd. Half the nations of Europe are actually bankrupt, others ‘ are almost insolvent. The recovery must be slow and long. Meantime the mill hands in Lancashire cannot wait, nor can the Government—the State —indefinitely continue to support them out of the public treasury. ■ ■ “To reduce armaments is a good thing, a necessary thing; but it is at best a detail. To agree upon policies in the Pacific is an excellent step. But, back of both of these circumstances lies the real factor wEicH must menace world peace: the old question of hunger. Wo see it to-day in Russia. We have seen it in Central Europe, But Russia and the succession States, with few exceptions, can, in ordinary times, feed themselves on therir own * lands. This is impossible for Japan and Britain. It is, at most, barely possible for Germany under the most favourable conditions and with the certainty of much undernourishment. —A Now Phase.— “Therefore, as they look to the approaching Washington Conference, and as they view Anglo-French quarrels from a distance, Americans must take cognisance of what has become the dominant fact in the world situation. “Militarism, in the language of the street, is ‘old stuff.’ It is as remote as ‘taxation without representation.’ So is ‘secret diplomacy.’ We are entering -a now phase—indeed, we have long since passed into the new phase—and are just discovering the fact. Of all nations in the world the United States is, physically at least, best equipped for the struggle which is beginning. We came out of the, war with the fewest wounds, we hold the world to ransom in war debts, we have the raw materials for our factories at our doors, we can, again, if we choose to, feed ourselves completely. “But our success means measurable ruin for Britain and for Japan—that is, our success in the groat competition for the world markets. -There is not enough purchasing power to go round, not enough market for all that the world can produce ; and if our products are sold, those of Britain and Japan will remain unsold, and British and Japanese labourers must starve or migrate. There is the brutal truth of the existing situation. There is the factor which may make wat in the future.

“As a contribution to future pose?, Washington must do something to meet, this situation or its _ failure will bo *s.b great as that of Paris. Nor is it quite Clear that there is a remedy. But, in'any event, we should beware of fitusions, of of over-simple CTs-pianafincio. -We have invited the Japanese Us dj«orv%o-

with us what is for them a matter of life and death. We need not modify our policy on that account; But we must perceive what the essential truth is. Otherwise we shall not only be the. victims of deception, but self-deceived,” concludes Mr Simonds.