THE WORLD SITUATION.

Taranaki Daily News, 31 December 1921, Page 11

THE WORLD SITUATION.

THE DOMINANT FACTS. A STRIKING ANALYSIS. A Remarkably Frank Analysis of the Causes of the World's Economic Catastrophe which is Leading to Uncertainty -and Unemployment Everywhere. Mr. Frank H. Simonds, one of the most acute observers of the war and its effects, explains in a drastic way the .meaning of the economic cata-s--trophe which is troubling every nation in the world and making itself felt in hunger and unemployment. “In reality the war had brought the world to the extreme edge of economic ruin. When peace had been 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 economically, although the destruction of war was over, 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 Hapsburgs, the economic factor now began to assert itself. Newly liberated tribes, once the rejoicing over the realisation of age-long aspirations had passed, found themselves condemned to misery and worse, as a consequence of the destruction o-f that economic solidarity with their hated oppressors. TO-DAY'S PERIL. “I have dwelt upon this economic phase, because it seems to me 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 economicfacts, 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.

"To-day the peril to world peace does not lie in excessive armaments. Their menace is to the solvency of nations. In our present situation, given the enorjnous debts which the war has produced, no country can a Hord to engage in a competition in armed strength. This way lies national insolvency and worse. What menace peace to-day, and will menace it. even more to-morrow, is the brutal fact that the war. in destroying millions of lives and billions of wealth, lias 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. There are not cargoes cnoqgh to fill the ships which exist; there are not customers enough to buy the goods which the factories can produce, A CO3IPETITION 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. If the goods cannot be sold, then the millions must migrate; for there is not the smallest chance that the country in which they live maintain them. This is what the vast unemployment phenomenon means in Britain. This is the danger which overhangs Japan and Germany. “Now the real hope of avoiding the disaster must lie 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 developed. 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 AWRICA STANDS.

“And, in the meantime, we in the United States have developed. WTiile Europe fought, we expanded our plants to do the work which had been done by the factories of the Old World. We continued to produce from 1914 to 1917 while Europe indulged in nearly three years of destruction. To-day 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. Simonds writes as an American). “To-day we stand in competition witn 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 in national development, but as a question of life or death. There are more factories jn the world 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 food. 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 which must menace world peace: the old question of hunger. We 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 their own lands. This is impossible for Japan and Britain. It is, at most, barely possible for Germany under the most favorable conditions anl with the certainty of much undernourishment, A NEW 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.’ W e are entering a new 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 great 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 laborers must starve or migrate. There is the brutal truth of the existing situation. There is the factor which may make war in the future.

“As a contribution to future peace, Washington must do something to meet this situation or its failure will be as great as that of Paris. Nor is it quite clear that there is a remedy. But, in any event, we should beware of illusions, o-f catchwords, of over-simple explanations. We have invited the Japanese to discuss with us jvhat 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.