cessions to trade within large areas of Africa and of the Pacific Islands. In Asia Western products were offered to the natives in increasing quantities. Then followed a period of the investment of capital. Concessions were granted for the exploitation of minerals and for the development of plantations. Large sums of money were loaned to weak governments in Southern Asia and in Northern Africa. Europe began to force itself, through its economic organization, into the very life and civilization of the African and Asiatic peoples. CONSEQUENCES OF ECONOMIC Two consequences (of the many)? of this rapid expansion of industry, trade and finance are especially significant. In the first place, it has increased the rivalry and conflict among Western nations. The building of armaments during the last fifty years is traceable to the rivalry of European areas. The ideas of economic imperialism thus affected the conduct of modern industrial states. In many of its features the situation was not unlike that created by the mercantilism of Colbert, Cromwell and Frederick the Great. The power of the state was thought to depend upon colonial possessions, the control of markets and resources of raw materials, and upon investment of capital in economically backward countries, and to get and hold these economic privileges armaments and war were regarded as justifiable. the The same rivalry is illustrated by the contest between certain nationals of the United States, Great Britain and France, supported in various degrees by their respective governments, for See page 256, for a discussion of population and other factors by Professor Archibald C. Coolidge, of Harvard University. the control of petroleum concessions. Furthermore, the struggle between France and Germany for the control of the Ruhr is a struggle for the national power which that nation will have which controls the Lorraine iron, the Ruhr coal, and the steel plants of Germany and of France.3 The second consequence of the expansion of the economic life of the West is a clash between Western and Oriental civilization. The people of Asia resent being Europeanized. Japan adopted the material machinery of the West and with it threw off Western control. Western methods in Asia are forging weapons which may some day be turned against the West. CRITICS OF ECONOMIC IMPERIALISM Economic imperialism in the modern world has not been without its critics. Counter-forces have at several points operated effectively. Nationalism has in some instances been a counter-force. Japan, India and Persia are examples of developing nationalities which have checked modern imperialism, but one of themJapan-has developed an imperialism of its own. Protective tariffs-an expression of nationalism-in the selfgoverning Dominions of the British Empire have tended to decentralize the industry of Great Britain. The rise of small nationalities in Europe is also a protest against an imperial state. The labor movement, particularly in Great Britain, has been opposed to modern economic imperialism. Its leaders have been effective in their analysis of the overseas' growth of capitalism. Finally, there have been a number of movements in favor of international 3 Leith, C. K.: "The World Iron and Steel Situation in its Bearing upon the French Occupation of the Ruhr." Foreign Affairs, June 15, 1923, p. 136. coöperation which, to a greater or lesser degree, have modified the force of imperialism. They include missions, international societies, scientific and statistical organizations. The chief reason why these agencies have not been more effective is that they do not seem to understand the real issues involved. ECONOMIC RIVALRY IN RAW Of the larger world questions briefly summarized thus far in this chapter, the problem of raw materials and foodstuffs is one. This problem will serve to illustrate the issues which arise and the causes of economic rivalry in the modern world. No more effective way to check the tendencies which today lead toward war can be found than by analyzing and giving publicity to the basis of national power. The power of a nation rests primarily upon the independence and energy of its population. This, however, is not sufficient to make a nation powerful in world affairs. There must be an industrial, an economic basis, which gives the nation strength and power. There must be economic diversification. An adequate food supply is es COUNTRY sential, as is also a development of manufacturing industries. Manufacturing, however, cannot develop unless a nation has adequate energy resources and a control of adequate supplies of essential raw materials. The chief sources of energy used in production and distribution are: Coal Petroleum Water power The energy resources of different countries is dependent upon their geographical and geological positions, and upon this, to a large extent, depends their political power. The following is a discussion of the energy resources Read, of the Federal Bureau of Mines: of certain countries by Dr. Thomas T. The real basis of power of a nation is its energy resources, rather than its manpower strength. The modern way to use the energy of a man is to employ it in a way similar to the little detonator of the big explosive shell; the little charge sets off the big one and does an amount of work far in excess of its own capacity. The energy output of an average workman is about a tenth of a horse-power. The energy expended by a coal miner in an eight-hour day thus amounts to about that available Based on estimate of coal resources given in Coal Resources of the World by International Geological Congress. Later estimates appearing in the China Year Book credit China with very much smaller amounts of coal. from 2 pounds of coal. A Japanese miner, who gets out 1,400 pounds of coal a day, thus multiplies his energy by 700. It is somewhat like planting one grain of wheat and having 700 grow from it. The American miner gets out 8,800 pounds of coal in a day and so multiplies his energy by 4,400. There are 41 million wage earners in the United States and their energy output is a little over 4 million horsepower, or only 9 times the potential energy output in the form of coal, of 100 miners. The power minerals, coal, petroleum and water power, are, therefore, the real sources of strength in an industrial civilization. Just where the United States stands on this basis is best brought out by some comparative figures which may be stated in millions of horsepower years, so that the figures will be easier to handle. Taking the estimates of probable and possible available coal, petroleum and waterpower in the principal countries of the world, and reckoning them in terms of millions of horsepower years, they line up something like this: (See table on page 7.) No other country than these has as much as one fiftieth part of the total energy resources as the United States, and it is quite evident that many parts of the globe never' What of industrial alcohol from tropical vegetation? The figures of the energy resources of the world called forth some discussion in open conference. General Crozier questioned the authority of the figures given in regard to the coal resources of China (i.e. two hundred thousand million horse power years). He stated that the head of the Chinese Geological Service had told him that Chinese coal would not last 40 years if used as rapidly as that of the United States was now being used. Mr. Edward P. Warner, of the Massachusetts Institute of Technology, pointed out that the figures show immensely greater totals for the coal resources than for oil and water power. The present consumption of oil in the United States would exhaust our supplies in 50 years and the present world consumption would exhaust the world's oil, excluding shale oil, within approximately the same period. An amount equal to the power now used could be obtained from water. With the improvements in the transmission of electrical power it is daily becoming more feasible to make use of water power. Three decades ago electricity was transmitted at can support an industrial civilization of any magnitude, for they simply have not the resources of energy. Countries differ greatly in the degree to which they have developed their resources. The United States had resources before 1492 even greater than now, because they were all unused. China is in somewhat the same position today as the United States was 400 years ago. Japan, on the other hand, is an example of a country that has developed its very limited resources to a large extent. Japan's energy resources are less than one five-hundredth part of those of the United States and therefore the Jap 10,000 volts pressure; recently it had been sent experimentally at one million volts, saving 99 per cent of what would formerly have been lost on the way. In the long run, therefore, we can count on greater power from water than from oil. On the other hand, there is nothing to take the place of the lubricating oils derived from petroleum. To a certain extent, but only to a certain extent, castor oil and graphite can take its place. Lubricating oils are as essential to the age of machinery as is power. The power now derived from gasoline and other lighter oils can be obtained from industrial alcohol. Our policy, therefore, should be to save our petroleum for lubricating oils and develop our water power resources to furnish power. Professor Campbell commented upon the prospective exhaustion of our oil resources, drawing the moral that we should improve our methods of consuming coal. For instance, there had developed a method of gasifying coal completely in one process. Instead of producing gas and coke, this process produces gas with no residue except ash. The same amount of plant can thus turn out 2 times as much gas as before. The lower-grade coal which will not stand the cost of transportation can thus be turned into gas and the power derived from this gas can be transmitted as electrical power. Dr. Adam Shortt stated that Western Canada has no water power east of the Rockies and no coal through considerable areas. The Canadians, however, are experimenting with the production of electricity from lignite in big generating stations situated at the mines, and the power is easily distributed through the Prairies in the form of electricity. Miss Ila Grinnell raised the question whether the production of industrial alcohol on a large scale might not produce changes in the suggested ranking of the energy resources of the nations. anese cannot afford to use their energy for rough uses that require large quantities such as in breaking stone. Weaving silk or decorating porcelain requires but little energy in proportion to the selling value of the finished product, and the natural development of the Japanese people will be toward industries that require a high degree of skill and relatively little energy. ESSENTIAL RAW MATERIALS Equal in importance are certain essential raw materials, especially iron ore. An exhaustive list of raw materials is not necessary in the present discussion. The following list, however, will be suggestive of the scope of the raw materials problem: Animal Hides and skins Silk Wool Mineral Metals Antimony Chromite Copper Iron ore Nickel Quicksilver Silver Tin ore Tungsten Vanadium Chemical raw materials Iodine Nitrate Phosphate Potash Sulphur and pyrites Clays and building materials China clays Lime Mica Vegetable Abaca (Manila hemp) Castor beans and castor oil Shellac An equal degree of importance in the commercial policies of nations is obviously not to be attached to all raw materials. Some are more vital in national life than others. A division might be made between those energy resources and raw materials which are, and those which are not, likely to cause international complications. But such a division is relative. Those resources and materials which are likely to cause international difficulty are the energy minerals-coal and oilwhich are essential and exhaustible and a considerable number of products which are more or less complete natural (or artificial) monopolies of certain countries or groups of countries. Others may become temporarily important as a result of temporary interruption of a supply or of transportation, and in time of war the need of self-sufficiency in a wide range of apparently unimportant materials is emphasized dramatically. THE COMMERCIAL POLICIES OF NATIONS What has been said indicates that in the modern world geology and geography have a close relationship to the commercial policies of nations. Ignorance of this fact or a failure to ad mit it candidly has been responsible for many misguided efforts toward peace. A desire to control coal and iron ore deposits or petroleum deposits has at times been the determining factor in boundary disputes. It is a fact of major importance that energy resources and essential raw materials are not equitably distributed over the earth's surface. Nations, favored geo logically or climatically, tend to shape their policies to conserve, develop and even monopolize the resources within their own borders; nations,5 poor in resources, if they aspire to a position of influence in the councils of nations, seek colonies, spheres of influence, or guarantees which will assure them a supply of the essentials necessary to building a modern economic state. CHAPTER II IMPORT DUTIES ON RAW MATERIALS Perhaps the most obvious measure used by nations to increase their self-sufficiency and to diversify their economic life is the import tariff. Nations usually show their first concern for the conservation and development of resources within their own borders. In the case of countries favorably located climatically and favored by nature with geological deposits of important raw materials, this aspect of commercial policy assumes greater importance than it does in the case of countries having limited resources within their own borders. About the time free-trade economists had reached, to their satisfaction, the A fairly loose use of the word "nation" seems unavoidable without constantly interrupting the train of thought with explanation. The word "nation" may mean in this discussion the people of a given organized political unit, or their government, or even groups of nationals operating more or less with the approval or support of their government. It is said, for example, that Great Britain has many millions invested in a given country. What is probably meant is that British citizens have invested in private enterprise in that country or they have bought bonds issued by the foreign government. Governments usually, but not always, are interested indirectly. The part they play ranges all the way from exercising a general oversight of the activities of their nationals, to see that fair and equal treatment is meted out, to masking in the guise of a private concern to accomplish definite political ends. conclusion that tariffs were to be abolished, the revival of economic rivalry among nations restored tariffs to a prominent place in the commercial policies of the world and today they are probably the most universal government measure affecting world commerce. Tariffs, it is true, have been of chief significance in the development of manufactures. Indeed, the manufacturing class in industrial countries has generally been opposed to duties on raw materials, and in European countries the rule has been to retain industrial raw materials on the free list. A CLASSIFICATION OF RAW MATERIALS In the United States, however, the political influence of the agricultural,' forest and mining interests has resulted in the imposition of import duties on many raw materials. For this reason, as well as because of the American interest in the problem, import duties on raw materials will be considered with particular reference to the United States. A classification is presented See pages 200, 201 and 207. European Agricultural Policies, Dr. F. M. Surface, Department of Commerce; Relation of Population Growth and Land Supply to the Future Foreign Trade Policy of the United States, Dr. L. C. Gray, Department of Agriculture; Discussion on Agricultural Policies, Mr. W. S. Culbertson. |