THE FUTURE OF Tim EMPIRE

Economic Unity of the Empire : Gold and Credit. By J. P. Darling. (P. 8. King. ls.)

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THE publishers have conspired to send us simultaneously three books on the future of the British Empire which supplement and qualify each other in a curious way. Mr. Schiller, who although a first-rate modern philosopher still deigns to take an interest in the affairs of men, has made' yet another addition to that bright constellation of pamphlets, " To-day 'and, To-

morrow." His subject is the future of the British Empire, . .

and his title warns us that it is no good news he has to tell :- " It is chiefly at two periods of his life that an intelligent man grows a craving to tell the world what he thinks of it. The first • comes _rather early in life, when he begins to see through the illusions which it is considered socially desirable to engender in the young and to make the chief end-of education: The second cornea much later in life, when he has tried his hand at remoulding the sehemn of things, and done his best and done his work and failed, as intelligence mostly fails in the unequal struggle with stupidiy, and is no longer restrained from telling the truth by the fear of wrecking his career."

Schiller then proceeds, in what he calls " an irresponsible philosopher's valedictory," to tell the BritiSh Empire what he

thinks of it :

"Three great-dangers clearly beset the future.- of - the British Empire, each of them affecting and aggravating the others. The first is. the Labour problem in Britain; the second is Britain's European entanglement, the third is the permanent strain which this puM upon-the cohesion of the partS' of the Empire.. For (a) the Dominions do not (and cannot) feel an equal concern in European. affairs, but (b) are driven alike by sentiment and interest to approve rather of the American attitude towards Europe, while (c)as regards non-European questions also they tend to take the Amerielin, and not the British, view." - He then analyses these three dangers in detail; declares thefil to be insoluble, and coneludek that the future of the Empire as an independent World force is over. He advises us to make our peace, while we may, with America and be content to beconie an important. .but definitely subordinate satellite. One wonders whether Mr. Schiller has yet read Trotsky's new boolii • Where is Britain Going? The Bolshevist leader's analysis is ; precisely the same as his own, except that Trotsky does not believe. that . we can achieve peaceful co-operation with . America, and therefore concludes that our civilization is doomed, and will be succeeded- by a system, 9s. proletruifin States on the Russian- model.''

Mr. Richard Jebb has been studying the Imperial problem

for the best part of the last thirty years,. and .his attitude is well known. In The Empire in Eclipse he ,expounds his belief that the future of the Empire can be only that of a strong, closely-knit State systenideriendelt upon superior force with which it can impose its will upon the rest of the world. But he early saw that the old-fashioned colonial conception of an imperium of feudatory States on the Roman model was hope- lessly out of date, and that the Dominions must be allowed unrestricted self-government. How, then, were they to be induced, since they could not be compelled, to form a closely knit confederation with the Mother Country ? Only, Mr. Jebb concludes, by so arranging matters that their economic inte- rests continually draw them nearer to the Mother Country :- "Nowadays governments are preoccupied with questions of work and wages. This was obvious enough in the field of doiriestid policy. What was not so obvious, perhaps, was that foreign policy is only an extension of domestic policy and, being actuated by the same interests, seeks the same end. Foreign policy may be defined, therefore, as the attitude which a State adopts towards other States with -a view to protecting or expanding the economic opportunities of. own people ; and defence policy means only the provision of force to support that attitude against the risks which are likely to arise from other States in-pursuit of a similar

object." . .

This is certainly policy- revealing passage. Mr. Jebb plumps outright for.a policy of economic Imperialism backed by such overwhehning fora that no foreign interference need be feared. He then goes.on to analyse the drift of Britiih post- War policy away froin this conception. At Versailles, he tells us, the federatiOn of the Empire was a reality: But since then (1) Great britain has become more than ever entangled in the European imbroglio ; (2) democratic opinion has rejected an Imperial `economic policy by way of Preference ; and (3) the Labour problem has .compelled the home Governinent tor- waste its resources on the dole instead of spending them on Empire development. In fact-Mr. Jebb restates the Sell:lite-. Trotsky analysis, but with a difference—he has a remedy. This country is td becOnYe. Protectionist and is then to grant reciprocal Preferences AU the Dominions. This will make the Dominions a more important market than Etirope. Hence our foreign policy, following as -ever our economic interests,- will be able to detach itself frOm Europe, our fighting forceS can be devoted exelusiyely to Imperial purpoSeS and the dole_ will be a- Vona-lied. Jebh seems to realize that there may be some little diflicuilti in indtieinithe British electorate to vote for such a policy ; hence re deliVers the now` fashionable on-

slaught .

on democracy. - — ,

The third book little shilling pamphlet called - the

Economic Unity of the Empire ; :Gold and Credit, and it consists of an address by Mr. J. F:.. Darling. -Mr. Darling, who is, of course, one of the DireCtOrs'of the Atdland Bank, evidently accepts the Schiller-Trotsky-Jebb analysis of the Imperial malady Rout _which we suffer. Lilr ldr. Schiller, he sees the possibility of Britain-gradually.sinking.to the level of a second- class nation. He argues that .wfien We returned to the Gold Standard last April we made our credit psffiey_depeadent upon the policy of the American Federal. Reserve Board. tint he points out that our policy is not yet "CoMplete :— " The idea seems to be to aieUriuiliite`thOie gold at the expense of the taxpayers so that the fiduciary ,issue of currency may be reduced, to hand over the issue of eurreney --notes to the Bank of Fngland, and then to let the &Mount of currency; and of credit of which that currency would be the base, depend upon' the movement of gold. This, gentlemen, in its far-reaching effects, is by a long way the most important issue before the country to-day. In my humble judgment, to adopt it would be suicidal."

Mr. Darling gives an exttenielk:interesting account of the Federal Reserve Board system and-concludes that the Ameri- cans have succeeded in controlling' and mastering gold; 'and that they now have, in fact, though not in theory, a " managed currency." But, says Mr. Darling, that currency will, of. course, be managed in the interests of the United States. . What does he propose for ourselves ? Briefly, he -would - revise the Bank Charter Act, and base our contractions or expansions of creditin the:first:instance on the.state-ofittade and industry and not on gold. Further, he would divide credit into (a) and (b) categories. Credits would not be classed as at present " on the form of paper " (that is to say, on the nature of the security offered}, but on " use of proceeds." That is to Say, the banker monk- his. applications for credit as (a) or (b) by the criterion whether these credits were to be used for the general production of new goods or services, or merely for speculation. For the ,first or (a) category, Mr. Darling says that " there need be no limit to the supply for legitirnate purposes " ; (b) credits, however, would be strictly

Malted. = -

" But what," the reader may be asking, " have these financial reforms to do with the Empire ? " Mr. Darling would answer, " Everything." The (a) Credits would be given freely for ImperiardevelOpment. The Dominions would be granted Specially favourable terms if they borrowed from the London Banks. In brief, the Empire supplies of gold would be pooled.

Mr. Darling and Mr. Jebb both wish to take us to the same place—Imperial Unity. But if we are to believe those who accept the "managed currency" solution, Mr. Jebb offers us only an old broken down four-wheeler, labelled Imperial Preference, which, as he himself admits, the British people are determined not to enter. Mr. Darling believes that he is placing at our disposal an up-to-date six-cylinder motor car, which can do the journey in a quarter of the time and against which the people have no prejudice. We should find it most attractive if we could believe in it. But we fear that a managed currency. would unceasingly invite the questions : " Who is really managing it ? What is the motive—purely political perhaps !—behind- the management ? " When Suspicion comes in at the door Confidence flies out at the window. The Gold Standard may plausibly be called a humiliation for civilized men on the ground that we allow our affairs to be controlled by an accident of Nature. But it works. It com- mands the confidence which is essential.