THE DEVELOPMENT OF IMPERIAL RESOURCES. F ROM many points 'of view
we have very great sympathy with the proposals for the development of Imperial resources which were made at a meeting of the Royal Society of Arts some two months ago, proposals which are set forth in the report of the proceedings contained in the December number of the Journal of the Society. The reader of the paper was Mr. Wilson Fox, and in the discussion that followed many valuable and interesting suggestions were made by Mr. Bigland, M.P., Mr. Moreton Frewen, Mr. Gilmour, Sit John McCall, Lord Selborne, and others. The general idea of the scheme set forth by Mr. Wilson Fox was the systematic development by the State for the State of some of the present undeveloped resources of our vast Empire. By this means we should be able to relieve the taxpayer=, not only of this country but of the Empire, from the burden of debt which the war will leave on their shoulders. Though we are Free Traders and anti-Socialists, we fully recognize that owing to the war we must wear our " rue with a difference." and we are quite prepared to adopt any schema which has a practical basis, even if it does appear to infringe in certain particulars the two principles involved.
We have got to increase the wealth of the nation and of the Empire and so pay for the war. But in the last resort wealth comes from human energy. It is men; not things, that produce riches. Ore lies idle in the mine till the miner wins it. Empire development, however, means the expansion of human energy, and so, in the abstract at any rate, it must be welcome. At the same time,. there are a good many dangers connected with Empire development by the State, rather than on the old individualistic lines, and with some of these we propose to deal on the present occasion. Before we do so, however, we must ask our readers to remember that because we enter certain caveats it must not be supposed hat we-are opposing the scheme as a whole or trying to prevent its adoption. On the contrary, we believe that the scheme ought to be tried. All we want to do is to secure that it shall be framed with a due consideration of sound principles and carried out with sanity and moderation.
As a- preliminary to these caveats we must say a little more about the schemes suggested at the meeting of the Society of Arts, in case they should not already be known to our readers. We can do this best by concrete examples. There is Mr. Wilson Fox's proposal for making State monopolies of certain trades; " such as jute and palm products "—i.e., tropical vegetable oils and fats. There are also certain fibres which he thinks might be monopolized. Then comes Mr. Bigland's scheme for establishing a giant Imperial fishing monopoly. According to him, if we organized transport properly, the Empire might make huge profits, while at the same time the consumer would be benefited by having fish, cheap beyond the dreams of - hunger. Again, Mr. Moreton Frewen has suggested means by which the Empire might obtain the advantage of the enormous increment which we have all witnessed in land values within the Dominions!. As new provinces arc developed and settled, so surely the value of the land appreciates. As we understand his scheme, he wants to utilize for Imperial purposes the following plain advantage. Land can now be obtained for nothing, or next to nothing, in certain parts of the North-West of Canada. Yet in all human probability portions of this land will in thirty years' time be worth a hundred times what it is worth now—provided, of course, that the right acres, and not the wrong acres, are selected; i.e., that there is no selection of swamps or rocks or " impossible " sites. But why should not sections of this -land be set aside and reserved for the Imperial partner ? Why should not the Empire have a " look in in every new enterprise or development scheme ? Why should we not have the comforting thought that if the dreams of certain bold adventurers come true, and some "New Ypres " becomes a huge mineral centre thirty years hence, the Empire will own a tenth of the town lots in that metallic metropolis, and thus a fat slice of the debt will be automatically amortized both for us and for the Dominions.
Our first caveat, and it is one which of course has already been forestalled by the Imperial projectors, as our ancestors would have called them, is against the paralytic effect of State action. Though the enthusiasts who originate development plans may be as free and enterprising in their methods as private traders, there is no doubt that the tendency of all officials who control State property is to wait and see. As the Frenchman whom we have so often quoted in these columns expressed it, the ideal of the State official is to place himself at a doorway and to shout at the top of his voice : " On ye passe pas ! —" No thoroughfare ! " State action tends to sterilization. The State is not enterprising. When you propose to a Government Department to help them out of what appears to you to be a very bad bargain, and to give them an opportunity of cutting a loss or turning a very moderate success into a-great gain, they are always inclined to adopt an attitude of hostility towards the helper. They either suggest that your proposals would result in doing the State out of a great profit, and that therefore they propose to sit on their magnificent asset for another twenty or thirty years before they release it, or else they take a hopelessly pessimistic view and say that there -is nothing in the scheme, and that they could not possibly be responsible for encouraging any one to appeal to the public to venture upon an enterprise which is sure to end in bankruptcy.
Another caveat of very great importance, especially in non- self-governing communities such- as India and the tropical Colonies of Africa and Asia, is connected with the danger of mixing up government and trading for profit. When that mixture is effected there is a tendency to the worst forms of predial- tyranny. The East India Company never managed to confer decent government upon the. natives of- India until it ceased to be a trading company. The horrors of the Congo were due to the mixture of trading and ruling. The Congo, Government, instead of standing:, between the trader and the native and insisting that the native should not be oppressed,. became, owing to their desire to make dividends, the arch oppressor. Take E1,ypt, again, where at the end of his career Ismail Pasha had got all the best land into his own: hands. Here the fact that the landowner and the ruler were one produced results of the very worst kind. There was no redress against the exploitation of the tiller of the soil by the owner and tax-gatherer and judge combined.
Another of our caveats must be concerned with the steriliza- tion of individual energy which, for some reason or other, seems always to go with Government action. Compare railway= development in India and in America during the past seventy years. In India you had not only cheap labour but a country. already settled—a country of great cities, and ancient civiliza- tions, and means of communication which, though rough,- had been established for thousands of years. Owing to these. happy circumstances you had not to make your railway first and then to hope that the population would come to it. You had the population already on the spot, and also the trade.. In America, on the other hand, the railways had to be made largely in uninhabited deserts and with the most expensive,• form of labour, labour drawn from Europe by what then were immense wages. Yet America is now covered in every direction with railway lines, while India still remains the scandal of the elder world for its want of railway enterprise. Though the Indian Government could in the " sixties," " seventies," and " eighties " borrow more cheaply and construct more cheaply than American companies, it was always paralysed by the thought that its railways would not pay. The optimistic private Americans were, on the contrary, stimulated by the thought that theirs would pay. The result was what we see.
We can combine the warnings which we have just uttered by asking-a question: How are we to be sure that• in claiming a share for the Empire, or the States of the Empire, in Imperial' development we shall not be grasping at the shaddw and dropping the substance, that we shall not be failing to do the very thing which we set out to do—namely, increase our Imperial resources and make the Empire richer ? How can we be sure that if the State, instead of taking a hand, encouraged ' individual effort by letting things alone, as in the past, we should not get oreater and more rapid. development ? Should we not most effectually enrich the State by giving it a greater number of wealthy taxpayers ? After all, may not the beat form of conferring riches on a State be to compose it of rich inhabi- tants ? Wealth cannot be in two places at once. If it is directly owned by the State, it cannot be owned by the people. Indeed, it is hardly too much to say—the richer the State, the poorer the people. It was because of this fact that our ances- tors loathed and dreaded mortmain more than treason. Before the dissolution of the monasteries the religious Houses, the Bishops and Chapters, and the Crown between them held more than half the cultivable land of England, and with baleful results. Hence arose the strong prejudice against increasing the power of the " dead hand." Mortmain and monopoly were anathema. It will be remembered how " my father " in Tristram Shandy apologized for a proposal or statement by declaring that he hated a perpetuity as much as any man.
But though we have thought it necessary to set forth thew warnings, let us say once more that we do not think them in the least conclusive arguments against Mr. Wilson Fox's plea for Empire development. " Why then put them forward ? " Because, though they need not forbid action, they ought to. modify and direct its shape. They ought to be attended to in considering the form which Imperial development should take. To cut a long matter short, we hold that, taking a lesson from our enemies the Germans, as we shall often have to take it in the future, the State can probably help better in development, internal and external, by financing good schemes than by.- undertaking them itself. The use of State credit in various ways, proved of enormous advantage to Germany. The State was the enlightened moneylender, and saw to it that no really good,. scheme failed because men of enterprise could not obtain the wherewithal to develop business. Very possibly the Germans- may have overdone their system of credit, but for development purposes they had, as far as we can gather, an ideal system of financing. And now to be specific. In the first place, we should like to see something in the nature of a Domesday Book' compiled -for the British Empire, a Terrier or Survey of all our lands and possessions, with a careful note of their products, . actual and potential. But this Imperial Domesday. Book:. should net only record the Imosele* we .have in the -year 1917, ,but should be constantly enlarged .by.-fresh investiga- tions. Take for. example the timber.-resources. of the.British Empire. We would have these recorded and classified as minutely as possible for the whole Empire, so that there could never be-any doubt.or difficulty as to the Imperial appanage in this respect. Remember, however, ,that it is of no use merely to record the fact that on the slopes of some mountain in Central Africa there are so many thousand acres of hard wood, and then forget to record that it would cost the weight of each log in, gold to bring it to the coast. After the Domesday Book of the British Empire had been compiled, a double process would be set at work. In the first place, an Imperial De- velopment Board should single out certain properties in the Crown Colonies and Asian and African Dependencies as "ripe for development," and endeavour to encourage their exploita- tion by the formation of companies to work them. In the case of the most promising of these projects financial aid up to, say, thirty per cent. might be supplied, provided always that not only would the Government be given debentures for the money contributed by them, but that they should also have something in the nature of founders' shares, so that they would have their portion in, though not the whole of, the ultimate profit, should it prove to be large.
If the concern succeeded, the debenture shares should be paid off, in order that the money lent for development purposes might be turned over and re-employed in some other quarter of the world. For example, as soon as the L100,000 lent to the Selene Syndicate to develop the forests on the southern slopes of the Endymion Mountains had been paid off, the money might be used to set going, let us say, the Ursus Fur Farm Co., Ltd., in the Antarctic. But of course it would only be inspecial cases that the Imperial Development Board would take the initiative. More often commercial adventurers, anxious to -develop some particular trade or commodity, would come to them withproposals, as they now come to private financiers, aid ask for a loan for this or that purpose. Then the Board -would consider the problem, and, if they found it good enough, either find a portion of the money themselves, or possibly give an opinion which would induce private -financiers to come in. We can well understand a private financier saying to a projector that if the latter could get endorsement of his scheme by the Imperial Development Board he would advance the necessary funds.
There is yet another way in which one can imagine a really /vigilant Board doing useful work. A man with good credentials would come to them with a scheme which, for some reason or other,they thought impracticable. But, instead of merely mending him away with a flea in his ear, they would state the reasons why they could not enter upon his proposal, and might go on to say : " If, however, you are looking for somethi4 sound in this line, you might think of the following. M e have just received a report from one of our investigators who spent last year to the north-west of Lake Tanganyika to the effect that he discovered a small lake, area twenty square miles, the highly alkaline waters of which appear to constitute a natural cement, &c., &c. He believes in it. Why not go into the matter? If you succeeded, 'it would be a really big thing, far better than your own project, which, we venture to think we have shown you, could not be profitable in any conceivable circumstances. If you want an Imperial speculation, here is one of the best chances we have ever come across. We estimate the cost of exploitation at about £100,000. The Board will put up 125000. Imperial Stiektight, Ltd., would probably do what- ever we did. It will be up to you to find the other 150,000."
Our essential reason for suggesting that development should be through a process of financing rather than by direct I4overnment action, such as was proposed at the meeting .of the Society of Arts, is that under a financing scheme there is still room for what has always proved the greatest incentive to human energy—the making of a profit. Exceptional lima will work like tigers for an idea, such as Imperial develop- /merit, but the mass of mankind will only strive for that -which, we cannot repeat too often, is the bed-rock source of wealth, private and national—the stimulus of profit. The thought of making something for themselves and their children after them is a stimulus beyond all others. To quote Mr. Kipling, the feeling " work for the kids and the " beats every other impulse and consideration hollow. Now if the State acts as an enlightened money- lender we are able to harness this tremendous source of energy to the service of the Empire, and at the same time make the Empire the silent and well-paid partner in every great piece of development. Of course in these matters; as in all others, . great care must be taken at the beginning, or else -we shall be certain to run into something like. Law's Mississippi scheme or the South Sea Bubble. Cheap money and financial facilities are excellent things per se, but they can very easily be overdone. Lastly, let us never forget in our schemes for developing the resources of the Empire what we pointed out three weeks ago as the maxim of Empire which inspired Lord Cromer and all Imperialists of his school : " Government in the interests of the governed." If we maintain that principle. the Empire may well be perpetual. If we break away from it, we arc doomed beyond any possibility of doubt. Let us remember, then, so to be exploiters and developers of the hidden wealth of the Empire as not to forget that we are Trustees. " Government in the interests of the governed" must come even before Imperial development.
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