1923

'WHY WE SHOULD CONCENTRATE ON THE

EMPIRE'

AUSTRALIAN RESOURCES

THE Conclusion of the war has again forced to the front the question of the economic organisation of the British Commonwealth, a subject often in the minds of British publicists since Mr. Joseph Chamberlain made his proposal for Imperial Preference. But the problem has now entered upon a somewhat different phase. We are beginning to realise that an economic reorganisation of the Empire cannot be entirely accomplished by a system of tariffs. This suggests itself forcibly to our minds when we consider the present distribution of the British race over its vast territories. The British Islands, with 120,000 square miles, contain over 47,000,000 inhabitants, while the 12,000,000 square miles of territory outside Britain accommodate less than 20,000,000 of European descent. The self-governing Dominions, with 7,444,000 square miles, accommodate but 16,500,000 people. The only inference that we can draw from these figures is that the most important step towards an economic reorganisation of the Empire and a full utilisation of its resources is the readjustment of this anomaly in the distribution of its population. For such a distribution is wrong in every way. From the point of view of Imperial defence it raises two complementary problems—an over-populated centre which cannot feed itself, and vast areas at the extremities which cannot be held by the scanty populations which now occupy them. From an economic point of view the position is equally indefensible. The unit of economic energy is the personality—the mind and body-of the human being. The only way to develop a territory is to place human beings there and to make them work it. It is true that the economic evolution of the nineteenth century and the first application of scientific discovery to transport and transmission led to a most extraordinary extension of the economic system of Europe. The outer world was progressively brought under the control of European nations. By an elaborate mechanism, controlled by the economic leaders of Europe, the produce of the uncivilised areas of the

world was secured from the occupiers, who knew little of its value, and was brought to Europe. Most of it came in the form of raw materials, which were converted into manufactured goods and then resold-largely to inhabitants of the outer world. It was on the margin between the cheap raw material obtained by Europe and the price at which it was able to sell that European economy was based.

The result was unfortunate. Western Europe had to be highly industrialised to meet the strain. A few Europeans manipulating the ignorant inhabitants were all that was thought necessary to organise the production of the outer world for European purposes. Such a system was bound to break down, because it did not treat the outer world as an end in itself, but as a mere factor in the economy of the Old World. The British Colonies and Dominions, of course, insisted almost from the first upon being treated as self-determining units, set up tariffs, and endeavoured to supply their own needs for manufactured goods. With small populations and huge territories their people were able to live at a much higher standard of comfort than the peoples at home. Even non-European peoples have obtained a higher conception of their worth and the value of what they produce and have developed a strong desire to increase their industrial potentialities. Raw materials are thus no longer cheap, whilst the outer world is beginning to build tariff walls and to compete against the manufactures of Europe, and the European worker insists on being treated as an end in himself. The costs of European industry have increased at the same time as the bases (raw materials of coal and iron) which first rendered European industry possible are beginning to become exhausted. In particular the costs of transport, upon which the world-wide economy I have described is very largely dependent, have very largely advanced. The shipping control is highly organised and directed by a few minds. The result is that the margin between the cost of raw materials and the selling price of manufactured goods on which Europe previously existed threatens to disappear. The fabric of worldwide economy envisaged by the economists of the nineteenth century may, therefore, prove a mere temporary structure quite unsound in the circumstances which have now developed. Within the British Empire the economic situation is related to the strategic situation. We have vast under-populated areas in which the problems of the pioneer are rendered more difficult by the scantiness of the population. Huge deposits of wealth cannot be exploited because the numbers available to capture or consume them are too small. At the centre of the Empire there are many millions dependent for the materials of existence on an elaborate artificial mechanism which may at any time be interrupted. The

reorganisation of which the Empire from an economic point of view is most in need is redistribution of population. The financial organisations of the centre at the present time may profit more from a continuance of the old methods, but the economic capacity of each citizen and the total wealth of the people would be immensely increased if a large proportion of the masses of the British Islands could be sent to reinforce the outposts. At present all are ineffective: those in England because they are circumscribed and restricted pawns in a vast economic machine; those in the outer Empire because they are often without the amenities of civilisation and are unable to create the organisation to realise their produce.

Immediately we look at Australia a new side of the question presents itself to our minds. Australia is mainly in the temperate zone. The coastal belts on the south-west and south-east of the continent, in area about seven times as large as the British Islands, and with a healthier climate, are well fitted to be a home for the British people. The race has been maintained pure. Social life and political institutions being inspired by British traditions, the surplus population of Great Britain can be placed there with a minimum of disturbance.

From the economic point of view the possibilities of the development of Australia through immigration are still more striking. Settlement of Australia has been accomplished in a curious way. The continent contains nearly 3,000,000 square miles, of which 1,000,000 have a rainfall of less than 10 inches, a considerable portion being absolutely desert. The other 2,000,000 square miles of the continent are occupied, and even a large part of the desert is held by wandering flocks. This phase of Australian settlement is not sufficiently understood in England. The dominant feature is its extensive character. In Europe all settlement is intensive. The areas held are small-the soil is tilled even if cattle are kept. The people are thus close together and live in settlements of some size. In Australia development was largely determined by the merino sheep, which succeeds best in dry areas on the native grasses. As long as water can be got for drinking and the flocks can be moved when the water gives out the pastoralist can take up land right into the distant interior. The wool industry is still by far the largest producer of wealth, and thus a very large proportion of production is derived from immense tracts of semi-arid country in the interior at a very low rate per acre of land, but at a very high rate per head of labour engaged and per Il. of capital invested. This extension of settlement in Australia is unique. Gibbon Wakefield foresaw it, perceived its danger, and in the organisation of his settlement tried to prevent it. He was beaten by the merino sheep. But

such a method of settlement raises problems of the greatest difficulty. Psychologically the Australian has been made unfit for the problems of closer settlement. Broad acres and large vistas have alone any attraction for him. This makes the countryside a very lonely place. Towns and homes are far apart and amenities of life are insufficiently developed. The point is, however, that over a vast extent of territory the foundations of a productive economy have been laid. It is as if the pioneer had erected a framework in which all the elements of a very full economic system had their place. All that is left to the present generation is to complete it. The great problem, therefore, which remains to the Australian of the next generation and for the population which is to be brought to Australia during the next fifty years is to develop these beginnings and to exploit the soil in a more intensive and a more diverse way.

The most suitable area for this purpose is that part of the coastal fringe which, with a rainfall of from 15 to 30 inches, has, on the whole, a rich soil and a magnificent climate. There is no severe winter, and the multifarious fruits of the temperate and subtropical soils can be produced in profusion. Wines, fruit, timber, flax, sugar, cotton, and tobacco have all shown themselves suited to the climate and soil. But these are all products which require a high degree of skill and organisation, a much greater expense of production than either meat, wool or wheat, and, therefore, a better developed market than the scanty population can as yet afford. Improvements in refrigerated transport which enable butter, cheese, and bacon to reach Europe have led to a great expansion of the dairy industry, but it remains true in the main that the more specialised primary industries of the coastal fringe, the industries which could produce a greatly increased amount of wealth per acre, languish. Over-production is a constant fear, and the pioneers are from time to time overwhelmed with disaster because of lack of markets.

Efforts made up to the present indicate that all the conditions necessary for success, except population, exist. With population the experimental and precarious would immediately become prosperous and assured. The wealth that is now potential would be realised. As it is, these areas are thinly settled, much of them on a pastoral basis. An increase of population would articulate and integrate what is now scattered and feeble because separate, and reduce the pressure of every economic problem. The present railway system, built at immense difficulty and expense to serve a thin pastoral population, could accommodate one ten times as large, and would then become perhaps the cheapest system in the world. The same would hold with regard to the cost of government and the provision of all public utilities. Lastly

with increased population and primary production on an intensive scale not only would the difficulties of labour in primary industry disappear, but production of raw materials and the wealth thus obtained would be a stimulus to the secondary industries in the towns. The riches obtained from the three simple primary products of wool, meat, and wheat have sufficed to build up the large cities on the coast. The tendency of a more intensive settlement will be to create big inland centres; and, linked with primary production, there could be an immense industrial system. The black coal of New South Wales, the enormous lignite measures in Victoria (in some cases 700 feet thick), and the water power of Tasmania are sufficient for an industrial population of many millions.

This is not an article on immigration, and does not attempt to deal with the problems involved in the resettlement of large numbers of people in new lands. These problems diminish as the settlement progresses. A country with a large population, provided it has not reached the limits of its settlement, can absorb more immigrants than a very sparsely settled country deficient in capital. The slow rate of increase in Australia since the gold discoveries slackened is thus perfectly natural. But we have now reached the turning point. During the last twenty years there have been large accumulations of capital. The rate of interest has been low. Wealth has been evenly distributed. The workers own many millions in savings bank deposits. These factors have made the economic position of Australia more stable than that of any other part of the world. Between 1900 and 1914 Europe and America were convulsed by at least two financial crises which did not affect Australia at all. Australia paid over 400,000,000l. as her share of war cost. Apart from some fluctuations of exchange which did not affect our general welfare we have emerged from the war period more prosperous than ever before, with no urgent financial dangers, with balanced ledger, and practically no unemployment. The absorptive capacity of Australia for immigrations has thus vastly improved.

In the preceding pages I have endeavoured to indicate the essence of the economic position of Australia and on general lines the best way in which it should play its part in development of the British Commonwealth. It is now desirable to indicate more definitely the directions in which development is invited or likely to be successful, and how development will contribute to the economic stability and strength of the Empire. In this more detailed survey mineral wealth will not be very closely estimated. Gold played a crucial part in the early development of Australia, and enabled the rapid settlement of a large population in a few years. Australia is rich in all other minerals, but search for VOL. XCIII-No. 553

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