LESSON FOR N.Z.

Star (Christchurch), Volume XLIV, Issue 661, 14 January 1933, Page 21 (Supplement)

LESSON FOR N.Z.

Japan on a Charted Course. DOMINION’S COMPLACENCY. (Written for the “Star” by E. J. HOWARD, M.P.) Just before a warship goes : .nto action she clears her decks of all gear not necessary to her guns or gunners. All woodwork is thrown overboard from her upper decks for fear of splinters injuring men about the deck. Again, storing it below would be a source of danger from fires. So a lot of good gear is sacrificed for the sake of the cause. Whilst 3ve have again and again suggested ways of easing the economic blizzard now raging, or tried to show how the crew of the good ship New Zealand could enjoy better times or at least more comfortable times, in our wildest dreams we have never believed it would entirely abolish the trouble. What is termed the capitalist system of production must inevitably produce cycles of booms and crises. Professor Irving Fisher, in his “ Purchasing Power of Money,” gives a list of those cycles with their dates. In Layton’s Study of Prices ” there is a graph showing the curves of these crises with their cause, and details of how they ended since 1818 or thereabouts. Whjlst we have suggested methods of employment and development for the time being, we have never suggested that it would cure the trouble. So again and again we have to return to the cause or to clear the decks as it were of useful gear that happens to be in the- way for the time. But it is almost impossible in short articles to state the full case for the “ cause. ’’ Hopeless Fatalism.

Read any book on cancer. Is there any specialist brave enough tc become dogmatic about that disease? They dare not even be too explicit about the symptoms for fear of causing more pain to the patients. They will go so far as to tell us that irritation causes or appears to cause cancer. And urge us to avoid irritation. So, too, with the disease of poverty we have to use care in argument for fear of injuring the sufferers from the disease. But there has been a belief running through thinking human beings that these crises just happen, and do what we will we cannot prevent them.

Too much valuable time is wasted in trying to alter that picture in the heads of sufficient numbers to alter things. And yet that picture must be removed. Those who believe things just happen are almost hopeless because they are fatalists. This crisis now on us is man-made. If we had that pasted in our hats we could come to a more unanimous decision as to how to avoid them in the future. And from a New Zealand point of view we could ease the effect of the present crisis. For instance, the interchange of commodities between countries necessitates a mode of payment. If we could deal in simple barter, say a cow for a horse, or a sheep for a blanket, all would be well. But that cannot be done in our stage of development. It is questionable even if we could exchange wool for oil with Russia. That country wants wool; we want oil. But the oil wells have been farmed out to companies with permission to raise and sell oil. They can sell oil to almost any part of the world. But they have not been given a license to deal in wool. So complications set in at once if we try to barter two simple commodities in that way. Gold and Exchange. But almost every country in the world has agreed on one thing (not only one thing), that they will exchange for goods and that is gold. And they have generally agreed on the value of gold. That is to say the unit in Great Britain is the sovereign. And one sovereign contains or weighs 7.98805 grammes of gold. And this must be pure or fine gold. All other countries adopt standards near to that standard. That does not mean that internally they use gold to purchase goods with. For instance, in Sierra Leone they use what is termed the Kisse penny. That is a bar of iron made from their own ore and about eighteen inches long. Of course, we laugh at that, but that piece of iron is really worth one penny of our money based on sterling. We in New Zealand use almost any thing. Bits of paper with magic words printed on them satisfy us. As a fact it would take a lot of those bits of paper to get one of those Kisse pennies if we were in Sierra Leone. During our trip to South Africa we visited Lourenco Marques. I bought some small article and tendered a British half-crown in payment. The article cost about fivepence, but I received a handful of paper money in change. That paper is no good in New Zealand, although it has magic words printed on it with pretty pictures and so on.

All the trouble in the economic world is caused through the medium of exchange. And those who can manipulate the means of exchange can cause the trouble. We might get droughts that cause shortness in production The rice crops may fail in China and starvation come about as a result. A disease may run through wheat and cause a shortness. But to-day the world is almost glutted with goods, and yet there are millions hungry. It is the means of exchange that has broken down, not the means of production. So it is to the means of exchange we must turn our attention, but not altogether neglect production. Reserve Bank. Parliament is to meet on the 26th of this month. The principal thing Parliament is to do is to make a reserve bank legal. I represent at least seven thousand people, and perhaps more. I venture to say not one of those people want a reserve bank. I go further and say not one of them will benefit one penny piece as a result of the coming into being of a reserve bank. Thousands of them believe that if we had a State bank, with a monopoly over the nation’s credit, that they could reap some benefit from it. Then who wants the reserve bank? If we could trace that back we should come to a small group of people. If we could trace back who resolved on deflation we should come to a, small group of people. If we turn to 1922 we find an alliance of bankers meeting in London. If we could turn c.p the minutes of their meeting we should probably find where the order came for deflation. But if the eyes and the ears of New Zealand can be tuned in to things that don’t matter, things that do matter will be arranged for us. As an instance, may we turn to the affairs of our neighbour, Japan. If we can see that that nation is pursuing an almost charted course, then it is possi-

ble that a glimmering of the idea may be left in our minds.

In 1894 Japan drove the Chinese out of Korea. Korea was a kingdom under Chinese influence. Japan then seized Port Arthur, invaded Manchuria, and practically annexed the Liao Tung Peninsula. That row was settled by China backing out and paying an indemnity. Russia also wanted Port Arthur, but the Japanese gave her notice to quit. That ended in war between Japan and Russia, and Japan won. In the final settlement, termed the Treaty of Portsmouth, Japan received all she required in Korea and the Liao-Tung Peninsula, but she had to withdraw from Manchuria. Twenty-one Demands. Whilst Korea was a plum from the pie, it was Manchuria she wanted. Korea was a great trading centre for Japan, and also a supplier of rice. So Japan had got her foot on the mainland. She had China, and an awakening China, on her left, and to the north she had Russia to contend with. When war broke out in 1914, Japan declared war on Germany, and seized all Germany’s possessions in those parts, including some Pacific islands. This planted both of her feet on the mainland, because Germany had interests in Kiau Chow and Shantung. Then she served China with a list of twenty-one demands. These demands were drastic, and practically made China a vassal state. China never agreed to the demands, but Japan went on just as if they had been accepted and agreed to. Now from day to day we get the news of bombarding here, fighting there, and so on. But the end is never stated. The end is Manchuria. One has only to take a glance at the map to see the step she is getting there. Japan is increasing her population by a million way Japan is travelling, and step by a year. So that we can suggest that it is room for her spill-over as it were that she is seeking. But it is more than that. She has taken a leaf out of other books, and she is following a clear line of imperialism. At the moment one cannot see what is meant by America’s withdrawal from the Philippine Islands. However, the end of the story is not yet written. China is a large country, and if reports can be believed, she contains a population that numbers a quarter of the world’s people. But the student of current events should be keenly interested in Japan’s march to the north and the west. Perhaps we should feel pleased that she did not come this way. But as a fact this way meant more trouble to her than the way she chose. A Handicap. America had shut her door to a spillover, and Australia had little or no country suitable. She wanted a country with coal, iron and rice. She gets all those things in Manchuria, with more than a likelihood of oil. For a time, also, she opens up markets for her goods. But the main point is that a people that know what they want get it even if they have to take it. There is a lesson in this for New Zealand. These are richer islands than Japan. We like to think that psychologically we are further advanced than our neighbours. But our handicap is our recent retreat from the Motherland. We think in terms of the Motherland. The pictures in our heads are small farms

and village pumps. We are afraid to launch out for ourselves for fear we might hurt the Motherland. We are developing the complacency of a Micawber. But this is a new country, a young country. Its people should be bold and venturesome. We are going to be left if we don’t wake up. If our be all and end all is to grow mutton and butter for England, then we are over-populated. If we want to supply our own needs we shall require more people to help. If the people who are eating our mutton twelve thousand miles away were here making capital goods and still consuming primary goods it would be better for New Zealand. At least it is worth thinking about.