Wairarapa Times-Age FRIDAY, DECEMBER 9, 1938. THE ECONOMIC WEAPON.

Wairarapa Times-Age, 9 December 1938, Page 6

Wairarapa Times-Age FRIDAY, DECEMBER 9, 1938. THE ECONOMIC WEAPON.

MORE sympathy than support is likely to be given to the demands which will be raised, it is said; during the forthcoming session of the Canadian Parliament that Canada should sever trade relations with Germany, Japan and Italy. Any one country taking that action would disorganise its own trade to little advantage and as yet, unfortunately, the question of the world democracies pooling their economic strength m support of a policy of peace and the limitation of armaments has been the subject only of academic discussion. , This, more than anything else perhaps, illustrates the failure of the democracies thus far"to achieve an effective understanding and organisation in support of their mutual interests and the ideals for which they stand.

With all the leading democracies now vigorously rearming, however, the question of economic organisation and action in support of peace may force itself increasingly on attention. As matters stand, the ‘aggressive dictatorships in Europe, and Japan, are dependent on the democracies for oils, metals and other’materials essential in war or in preparation for war. Great efforts are being made by the totalitarian States to make themselves as nearly as possible economically self-sufficient and independent of external supplies of essential materials, but while much has been done in this way to unsettle and limit international trade, the production of synthetic materials is often a costly and unsatisfactory process and has its very definite limitations. The conclusion reached unanimously on this subject by a committee of the League of Nations is that by no conceivable measures can even the most favourably situated country make itself self-sufficient.

It is difficult to get accurate detailed information about the economic position of the dictatorships, but some essential facts are well established. Germany under the Nazis, for example, has made remarkable strides towards self-sufficiency in certain branches of production, but is still largely dependent on imports for many essential supplies. The home production of cereals has been increased enormously, but this is offset iri some measure by a serious shortage of fats. Although she extracts fairly large quantities of fuel-oil from coal, Germany uses huge quantities of imported petrol. Her consumption of that commodity in 1936 amounted to about five million tons and is increasing rapidly. At least two-thirds of Germany’s supplies of iron, it is stated, have to be imported. A recent article in the “New Statesman and Nation” observed that: —

The Germans claim that between 1932 and 1937 they reduced 1 their dependence on imported goods from 23 to 16 per cent of total consumption of all kinds. But this achievement, substantial as it is, not only veils a deterioration in the quality of German output, but also leaves a dangerous dependence on imports both of oil and of materials essential for armament production.

If Germany went to war, she would have to rely upon accumulated stocks of indispensable materials. She would be gambling on speedy victory in a conflict of limited duration. It follows that in their control of economic resources, Britain, the United States and other peaceful nations have in their hands, if they would but combine to use it, a powerful means of enforcing and upholding peace.

The whole question of international trade, and of such outstanding' aspects of that question as access to raw materials, is being studied intensively, not only in Geneva, but by many individual countries on their own account. There is no easy or immediately obvious approach to conditions in which even the principal democracies would unitedly refuse to trade with countries declining to co-operate with them in a policy designed to establish and safeguard peace, but some tentative steps are being taken in that general direction. The Anglo-American Trade Treaty is a recent and noteworthy example in point, but the Tripartite Monetary Agreement and other earlier measures have their more or less defined place in the same broad policy. In the present state of international relationships it is obviously desirable that the democracies should concentrate on the speediest possible development of an understanding and organisation that would enable them to make effective combined use of their economic strength against aggression and in upholding peace. Unfortunately it is also clear that even the nations that have made some progress in that direction are far from having reached complete agreement on the subject. Some recent references, for example, to possible amendments of the United States Neutrality Law which would make a potent weapon available for use against aggressor nations, are as yet of too vague an authority to carry much conviction.