Problems of the British Empire
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The Empire Club of Canada Addresses (Toronto, Canada), 2 Dec 1937, p. 124-140


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Hutton, Graham, Speaker
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Speeches
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Problems of the British Empire—political, strategic and economic. How most problems of the world today touch the British Empire. A review of political problems. Changes over the last 35 years. A review of the political and constitutional situation today. The Crown now the only real and effective link left between the Empire administration and those of the other Commonwealth nations. Ways in which the independence of the Dominions may be guaranteed for the future and the integrity of the Empire. The division of responsibility and difficulties caused by that division. The Commonwealth of Nations in a transitional period. World events which have a direct reference both to the security and welfare of the whole British Commonwealth of Nations. The gravity of the dangers that hang over the whole Commonwealth of Nations, seen by a look at the situation in two strategic spheres: the Mediterranean and the Far East. An examination of a "worst-case" scenario of events in these two areas. The Government of the United Kingdom refusing to accept the responsibility for taking any warlike decision, and the speaker's response to that. United Commonwealth of Nations decisions. The intertwining of political, strategic, and economic aspects of a problem. The mutual aggravation and conflict of economic and political factors. Mutual commercial relationships as perhaps the greatest problem facing the democratic nations. Democracies in the name of self-determination taking decisions on the economic side which were definitely harmful to fellow democracies. This providing the dictatorships with a large stick wherewith to beat the democracies. Time to reverse this trend toward self-sufficiency and autocracy and regulation. Beating a retreat in the political sphere, and also in the economic sphere. Impediments to the flow of world commerce. Problems with "gentlemen's agreements." Two main influences working in world economics. What can be done, and what is being done. The negotiation of an Anglo-American Trade Treaty. Strategic, financial, economic and political reasons why an Anglo-American Trade Agreement should be whole-heartedly applauded. The rearmament race. Building up the international buffer of trade on as wide a front as possible. The speaker's belief that the history of the next 25 years is still lying within human hands to accomplish and his hope that they will be British hands.
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2 Dec 1937
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English
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PROBLEMS OF THE BRITISH EMPIRE
AN ADDRESS BY MR. GRAHAM HUTTON
Thursday, December 2nd, 1937.

PRESIDENT: Gentlemen: The subject of our address today, "The Problem of the British Empire" could very easily be changed to "World Problems," not that Britain has caused these problems but rather that they have been thrust upon her. Britain has been a great teacher of democracy but, unfortunately, some countries have been stubborn pupils. The solution of these problems would be world wide in its benefits and we are most fortunate in having today as our guest speaker, one so well qualified to discuss this important subject. Mr. Graham Hutton is a graduate of the London School of Economics and has taken special studies at Bordeaux and Heidelberg Universities. His has been an early rise to prominence as editor, author and speaker. His scholastic honours are many and his mastery of the French and German languages has been an invaluable aid to him during his frequent tours of the countries of Europe. As an assistant Editor of The Economist, a paper embracing the financial and economic affairs of every country in the world his reasoning and opinions are much sought after and bear great weight with students of international affairs.

I have much pleasure in introducing Mr. Graham Hutton, our guest speaker, who will address us on "The Problems of the British Empire." Mr. Hutton.

MR. GRAHAM HUTTON: Mr. Chairman, Gentlemen: It is a great honour to me and also a great pleasure to be invited to address you today. I have learned that not all honours are pleasures and not all pleasures are honours; but this is one which has almost a synonymous ring. I wish to divide the subject today into three partspolitical, strategic and economic. The political problems of the British Empire, the strategic problems of the British Empire and the economic problems of the British Empire.

You have just heard the Chairman say that the subject might equally well have been called "The Problems of the World" because it is almost impossible to consider one major problem of the world today that does not at some point or other touch the British Empire.

First, then, as to the political problems. In the last 35 years, for the whole of this century, the world has been changing politically, strategically, and economically. The British Empire has changed with the world. Some of those changes in the British Empire have been extremely erratic. The Empire today is not what a person in 1900 would have recognized as the British Empire. Constitutionally, economically, it has changed considerably. The world has changed around it; so its political, economic and strategic problems are not the same as they were in 1900.

Let us consider for one moment the political, the constitutional situation of the British Empire today. Since Joe Chamberlain listed Dominion securities under the Trustee Act, the whole British Empire has developed in a way that was impossible to foresee when Joe Chamberlain himself took that step. In the first place we have autonomous nations, practically for the first time in history, autonomous nations linked by one common bond, a sentimental bond; a bond which finds no actual constitutional basis, or legal basis; but a bond, nevertheless, which makes the British Empire, not an Empire administered from one center but a collection, and perhaps some foreigners would say a heterogeneous collection of nations; some of them entirely independent, some of them, like India, not so independent; others not at all independent, but dependent upon London. Yet, this mass of nations and of peoples has one common outlook upon the world, one common attitude; and the world itself, changing so rapidly, politically and economically, has to reckon with the views of the vast mass of British people scattered all over its continents, a mass of people who constitutionally and legally have no centralized administration. That is a problem to which I want to address myself for the first few minutes.

The world is in an extremely parlous condition today; and yet there is no organ for the British Empire to produce a foreign policy, as an Empire. There are channels for producing a foreign policy. There are methods of taking a united front or united action in view of great dangers; but there is no constitutional or legal basis for the Empire to act as an Empire. In fact, the word "Empire" is a misnomer to the British Empire, as it is so called by most foreigners. It is a Commonwealth of Nations. As a Commonwealth, it has no Commonwealth Government. Having no Commonwealth Government, and possessing at the same time many means for producing a policy, it lands itself sometimes in considerable difficulties. One of those difficulties faces us today, the difficulty of foreign policy; the difficulty of what policy should be produced to deal with a situation where the issues are as vital as peace or wax. Yes, as I say, this Empire has no unified, centralized administration on whose shoulders you would expect to rest the responsibility for developing a unified foreign policy.

Now, the political development of the Empire, to my mind, has been over rapid in a world which was itself rapidly developing. I don't want that phrase to be misunderstood. I don't want to suggest that the British Empire and the Dominions should not have had complete Dominion autonomy. That, as you know, is the view of several "last ditchers" in the home country; but they are a very, very small minority. Yet, recognizing the development that the Dominions have made, I think we must also recognize the difficulties we have to face because of this rapid development.

Now, it is said, and said rightly, that the only link which constitutionally binds the independent or autonomous dominions of the Empire is the link of the Crown. That is perfectly correct. There still remain several vestigial links of the old centralized Empire administration. These links are being lopped off gradually. But the only real, the only effective link left is the link with the Crown. Now, the link with the Crown is a link which provides a basis; a sentimental, affectual basis for the Empire; but it does not provide a machinery; it does not provide the means of consultation; it does not provide by itself the method for developing a particular policy at a particular moment. All that is left is the flashing of the telegraph wires or, perhaps today, of the telephone and of the radio. That is all we have as an apparatus of Empire, an Empire composed of independent nations in their development and in their relationships with foreign countries; these nations act independently from London. You have a vast mass of the Empire which is administered, the colonial Empire, where London can make a decision for that Empire. As far as Ireland, Canada, Australia, New Zealand and South Africa are concerned, others immediately take their own policies; and by some process of trial and error ox' rule of thumb, one evolves an Imperial policy.

The first point, therefore, which I wish to stress in this political section is that the world outside the British Empire is not allowing the British Empire to stand still or to sit back. Decisions have to be taken in every single Dominion, decisions with regard to the strategic and with regard to the economic problems that face both the world and the Empire.

I want to emphasize this problem because in England, in Canada here, in Australia, in South Africa, the most eager and the most preoccupied and anxious minds are now engaged in trying to find a way by which the independence of the Dominions may be guaranteed for the future and the integrity of the Empire, the Commonwealth, at the 'same time may be guaranteed. That is a very great responsibility; and it is a great difficulty for the Commonwealth, like ourselves, that our responsibilities are at present divided. A division of responsibility at a time like this is an extremely difficult thing to have to shoulder. At some point or other, say, for instance, the Mediterranean, or the Far East, a question will arise, in the realm of foreign policy or in the realm of economics, where decisions must be taken for the Commonwealth. We, in the Commonwealth of Nations are, I think, still in the transitional period; and we shall not see the Commonwealth of Nations which live under the British flag in exactly the same constitutional and legal situation twenty-five years hence as we see them today, just the same as today, they are not as people would have seen them in the year 1900.

Now, the developments in the world politically in the last fifteen years have brought home to many Britishers in the United Kingdom the importance of this point, that I was just making; because, over 22 miles of water, events have been happening on the Continent of Europe, and 12,500 miles away in the Far East events have also been happening, which have a direct reference both to the security and welfare of the whole British Commonwealth of Nations.

I make the transition here to the strategic factor.

It is impossible to look at the Mediterranean or at the Far East today without being impressed by the gravity of the dangers that hang over the whole Commonwealth of Nations. I use these words advisedly because there is a disposition, not only in British countries, but in many other countries in Europe as well, to think that world history takes place outside the ambit of men's decisions, that a force which sits above human affairs directs the human affairs themselves.

Now, that may be true religiously; it may be true philosophically; but in the realm of politics nothing takes place that is not the decision of some man, or some men, somewhere; and there is a disposition, I say, to think that anything may happen from various quarters of the globe anal all one need do is sit down and hope for the best. I venture to think that is a very dangerous thing for the members of the British Commonwealth of Nations to do. The developments in the world during the last six years--one need not go back farther than that-the developments in the world during the last six years have been such that no British citizen anywhere in the globe can feel very comfortable about the implications of those happenings.

I want to spend a little time in this strategic section on two spheres of influence: one, the Mediterranean, and, two, the Far East. Let me take the Mediterranean first. It has often been said, it has been said by a British Cabinet Minister of the United Kingdom, that the Mediterranean is a vital artery of British commerce and a vital artery, indeed, of the British Commonwealth of Nations. I believe that to be a slight but pardonable exaggeration. I don't think the Mediterranean is exactly the vital artery; I believe it is a vital artery, but I don't think it is the vital artery of the Commonwealth of Nations.

I think, for example, it would be possible if the Mediterranean became a theatre of war, for the British completely to evacuate the Mediterranean. I think it would be possible in that contingency for the British Isles to be provisioned, supplied with all the things they need, irrespective of the route that goes through the Mediterranean. My reasons for thinking that are these: In the first place the amount of extra time necessitated by sending the large British mercantile fleet around the Cape of Good Hope is a matter of 11 or 12 days, on the average. If one is envisaging a catastrophe so great as another European war, the adding of twelve days to the time required to provision the British Isles is not a very great difficulty. If your dispositioning of the mercantile fleet takes place twelve days before war breaks out, then you are fairly safe in assuming your supplies to the British Isles will be as regular as they were before. It is possible to redistribute your mercantile shipping in such a way as to be sure that every day your supplies will be received in the United Kingdom, and received in South Africa, here, or wherever it may be. The disposition, however, to think of the Mediterranean as being an absolutely vital artery, one might say the carotid artery, is, I think, exaggerated. It has led to the unfortunate impression on the Continent of Europe that anything could be done by anybody in the Mediterranean, and the Government of His Majesty in the United Kingdom would be prepared to knuckle down, or retreat, or put up with any kind of nonsense.

Now, that is, I think, a fallacy. I think it is a dangerous fallacy and I think to encourage that fallacy is to encourage those forces that are in fact making the Continent of Europe the possible theatre of another outbreak of aggression. I use these serious words advisedly, because I am impressed with the amount of vague generalities which are put out in press communiques, both from democratic governments and totalitarian governments; I think it is high time this "sublime mysticism and nonsense" were ended; that we should face things exactly as they are, both in the Commonwealth and in Europe today; land, in fact, that one should speak one's mind.

The Mediterranean is an important interest for Great Britain but, on the other hand, there are equally important interests of other parties in the Mediterranean. To my mind the threat to French communications with North Africa is infinitely more serious for the whole European situation and therefore for the United Kingdom than is the threat to the British trade route through the length of the Mediterranean.

Now, various alarmists have seen fit to think that Signor Mussolini and those responsible for military and political policy in Italy would like to challenge French and British forces in the Mediterranean and their communications. Well, let us assume the worst. Let us assume that that is what is likely to happen. Viewing the situation as we can already view it today, in the first place, Italy has given great hostages to fortune in Spain, in Ethiopia, in Libya, in the Balearic Islands. She has concluded agreements with Jugoslavia on the other side. And despite everything that has been said and published, Italy is still the one power that will lose most if Germany comes down through Central Europe and over-runs Austria or absorbs Austria, Czechoslavakia and other Central European countries. That being so, I don't think one need be so alarmed. For that matter, I don't think one need be so bluffed by the amount of Italian propaganda which one is compelled to hear or see in one country or another.

Let us, then, think that the British fleet has evacuated the Mediterranean. On what issues are the great decisions likely to be taken in Europe and in the Mediterranean? If Italy is a threat to France's communications, France and Great Britain are equally a great threat to Italy's communications along the Mediterranean, round Spain and Ethiopia and the Balearic Islands, and so forth.

Then, supposing the Mediterranean be completely evacuated, the important point in anything like a future European war is going to be the economic lasting power of the countries concerned. Now, the economic lasting power of the United Kingdom I do not see threatened by anything which may happen in the Mediterranean. I may be wrong. I speak subject to correction from those who can prove ,the contrary; abut I do not see the possibility of Great Britain's lasting power in any European war being damaged by what may happen in the Mediterranean.

I can see various real problems and difficulties that will arise as they arose by .the million in the last war. I do not see that those difficulties that arise from the Mediterranean alone are such as to shorten the lasting capacity of Great Britain. So much, then, for the Mediterranean.

Let us look at the Far East. There, the situation to my mind and contrary, perhaps, to common belief, is infinitely more serious than in the Mediterranean.

You see in your newspaper's this morning that a large force of Japanese soldiers has been landed on an island a little to the south of Hong Kong. The Chinese National Government in the last few years have very greatly developed the internal communications of China. The most important of those communications has been the completion of a railway leading from Hankow down to Canton and, naturally, around Canton to Hong Kong. Now, if Japan and China continue to fight this undeclared war and this undeclared war (or undeclared peace, whatever you like to call it,) goes on ad infinitum, it is obviously to the advantage of Japan to try to cut China's only outlet to the trading world, the world which supplies China with the only means that China can command for carrying on the war. After the seizure of Shanghai the only gateway, practically, that remains open is a British gate, Hong Kong; from Hong Kong around Canton; then by this railway up to Hankow.

You have seen in your papers that the Chinese Government has said it will retire from Nanking to Hankow. It will retire ad infinitum, but if it is to retire it has to provision itself also, after its strategic retreat. How can it provision itself if it cannot get goods through Hong Kong, which is British territory? There is a threat, not so much to the immediate strategical security of the British Empire at Hong Kong, but there is a threat to the economic security of the British Empire at Hong Kong; and there is ,a threat to the economic security of quite a considerable amount of the population of Great Britain. For that matter, quite a considerable amount of the population of the United States and no doubt of Canada and other countries.

If we can accept the comfortable doctrine that Japan will (become progressively more involved upon the Asiatic plain-land and proceed further and further in a hornet's nest, and be finally swallowed by a culture infinitely older than her own and by a people five times as numerous, no doubt we should be warranted in sitting back and looking at these things with a kind of remote comfort, a kind of equanimity which I think is not at all warranted. The position as I see it in the Far East is that Japan is travelling very far toward an authoritarian state, such as that of Russia, Germany and Italy and to the extent that she goes along this road will she inherit the difficulties of Russia, Germany and Italy, that is to say an irresponsible government, a government which is not responsible to the electorate, a government which has to justify both its prestige and achievements by reference to some great and world shattering event of policy.

Now, we are told that the question of saving face and indeed of making up face is more important in the Orient than in the Occident. If that is so :and Japan looks like losing face in the Far East, then I think we have to reckon with a continuance of trouble, irrespective of how Japan is involved in the Asiatic plain-land.

Now, we are spending something like 11 to 12 million pounds on the Port of Singapore. Singapore is supposed to be one of the two nodal points in the defences of the entire British Commonwealth. It affects Australia, it affects New Zealand, it affects French Indo-China, it affects the Netherlands, the East Indies, Borneo and New Guinea, it affects British India. If one loses the trade of Hong Kong which I may say in passing is twenty-five times as large as British imports into Hong Kong, because Hong Kong deals with the hinterland, if one loses the trade with the hinterland through Hong Kong, if one is forced as it were to retire back to one's best prepared defences, the only defence the British Commonwealth can retire to is Singapore. When you get to that point you get to a dangerous situation in world politics, because you have retired to a point at which you are prepared, presumably, to fight. I am thinking there in terms of preparation for war and not just preparations for diplomatic negotiations, however abrupt and rude they may be.

Now, as I see the situation today, the Government of the United Kingdom are quite rightly refusing to accept the responsibility for taking any warlike decision. They are, as it seems, saying to the world and to themselves, there are three or four totalitarian, authoritarian, irresponsible governments in the world. Upon their shoulders let the responsibility rest for taking the decision which may plunge the world into a much greater disaster than that which overtook it twenty-three years ago. But meanwhile, we look to our moat, we keep our powder dry, we prepare as best we can the strategic line to which to fall back.

That is a policy which I think every one of us must applaud in the present deplorable situation. It would be not only paradoxical, it would be tragic if the responsible government of a democracy at this stage were to overstep the balance of sanity and force the irresponsible people of the world into launching a catastrophe upon us. But that is a negative policy. Something more is required, something positive is required for the whole Commonwealth.

You will see at this point I am linking up what I said at the beginning, on the political side, with what I have since said on the strategical side. I think those minds best fitted for it must engage at once in considering what united Commonwealth decisions can be taken to safeguard the strategic, the economic, indeed, the territorial security of the Commonwealth of Nations. It is slowly being done, of course; being done through what the newspapers call "the usual channels." But the usual channels, I venture to think, may not be sufficiently wide to carry the amount of traffic required at this time. I think unusual channels may be required; and I would do no more than leave that hint with you. Perhaps the situation in the world has already got to such a point that, for the Commonwealth as a whole, it would be well to "look to the moat" of the Commonwealth as a whole; not just to the European policy, supposed to lie within the ambit of the United Kingdom; not just to the Far East, supposed to lie within the ambit of the United Kingdom, the Australian and New Zealand Governments; and so forth.

I come to the final division of my subject, the economic. It is, of course, impossible to separate out so easily the political, the strategic and the economic aspects of a problem. Never, I suppose, in the last 23 years have political, strategic and economic factors been so intertwined and interdependent. But one of the things which must impress all of us viewing the post war world since the peace settlement until ,today, is the mutual aggravation and conflict of economic and political factors. As fast as something was done sensibly on the economic plane, something nonsensical was done upon the political plane; and that destroyed the achievement on the economic plane. As fast as something was accomplished on the political plane, then a whole crowd of nations raised tariffs or started to impede the natural flow of international commerce, and what resulted was political aggression, the creation of very large vested interests, vested interests not only of capital but of labour in regulating wages, in regulating unions' hours; and so forth in every country, regulations of crops, regulation of this, that and the other. The smaller the countries, like the countries in central Europe where the depression first broke, the worse the depression. The economic nationalism ever since the war has gone ahead so fast, has expanded so extensively, that it is almost impossible today to say to an economist, "Give me a purely economic judgment upon this question." There is practically no possibility of getting a purely economic judgment on any question. The budgets, agriculture, foreign trade, industrial production, wages, hours, all these things, inflation, deflation and so forth, are decided as much, if not more, upon political grounds than upon purely economic grounds.

All this having taken place in every country, in small countries like Hungary and Czechoslavakia, and in the larger countries like the United Kingdom, or Canada, the United States and so forth, it has been practically impossible to view the development in the political world apart from the development in the economic world at the same time. I say that because the problems which face our Commonwealth today on the economic side are in themselves political problems.

I suppose it would be no exaggeration to say that the greatest problem facing the democratic nations is the problem of their mutual commercial relationships. There is no great gulf politically between democracies. They agree from fundamental principles .to refrain from interference in other people's policies. Every fellow democracy lets the other fellow go his own way in the political sphere. But they do interfere on the economic plane. There are the difficulties I spoke about a moment ago; of the crops to be grown this year or next, the amount of dairy products or meat allowed into the United Kingdom. These questions, on which decisions were taken originally for political reasons, also work out in fellow democracies to their disadvantage. Consequently, for the last ten years or more, democracies in the name of self-determination have been taking decisions on the economic side which were definitely harmful to fellow democracies.

That, of course, has provided the dictatorships with a large stick wherewith to beat the democracies, and at the same time a splendid argument for pointing out how chaotic and anarchic a democratic government in the world really is.

Now, I think it is high time, as the economists of the world ten years ago unanimously thought, we should reverse this trend toward self-sufficiency and autocracy and regulation of this, that and the other, in the economic sphere; and if we are to beat a retreat in the political sphere, beat a retreat also in the economic sphere. Let us retreat from this absurd economic doctrine that one's own standard of living rises highest when one shuts off the other fellow's goods from one's own market.

I seem to see welcome signs in my country that this doctrine is gaining ground very fast. I see welcome signs in the United States that those people who voted for the Hawley-Smoot Tariff in 1930 are discretely silent about the working of that tariff ever since. I have heard people who acknowledged that they voted for the Hawley-Smoot Tariff Act in 1930 say they "wish the darned thing had never gone through."

Well, there are plenty of impediments to the flow of world commerce which we also in the British Commonwealth have directed in the name of our own autonomy. We have made agreements like the agreements in the United Kingdom called "gentlemen's agreements" to shut out a certain amount of production that the working people of the United Kingdom could ill afford to shut out. In that way we have injured not only the Dominion producers but the producers of the primary products and foodstuffs of many democratic nations, principally, of course, of the Scandinavian nations.

It is possible at the present moment to distinguish two main influences working in world economics. One is the old, old influence; an influence which is inherent in our individualistic, our private capitalistic system. That is the influence for bringing nations together and forcing them to specialize more and more upon their particular advantages. That is what I would call the international influence. I say it is absolutely inseparable from the private capitalistic system, because it rests upon the old international division of labour and specialization of function. If you are to turn back on that and go backward, you go to the medieval autonomy and the authoritarian state, and everything that means to men of property and workers in the economic system of the state.

On the other hand there is a second influence; and that influence, of course, is the authoritarian. So, both on the economic plane and on the political plane, the two influences are working out.

Now, it is my worry and anxiety as the months and years go by, as the armament race increases in velocity, that the minds of statesmen and governors are less inclined to look upon the normal channels of commerce and more inclined to look upon the abnormal, extraordinary measures which ere necessary to get armaments going, or to balance budgets which are inherently unbalanceable. If that sort of thing goes on, then I very much fear even the democracies will be driven-the Dominions as much as the United Kingdom, and also as much as the United States and any other democracy in the world--they will all be driven to adopt economic measures which in principle are the same as those adopted by the totalitarian states, both of the right and of the left.

That may seem an alarming or paradoxical statement. As I said, in principle they are the same. In degree they may not be the same. It may still be possible, for instance, for the business man to be guaranteed at least a little profit as he is guaranteed in Germany and in Italy. But as time progresses, and if we have peace and not war, then the longer this influence for self-sufficiency goes on in democracies, the more the democracies are driven toward the authoritarian, economic system. You can see evidences, plenty of them, in the United Kingdom. You can see evidences in France, in Scandinavia and so forth. But if that principle is allowed to go ahead unchecked, then it will not be to the advantage of business men; it will not be to the advantage of the worker's; and it will not be to the advantage in the end of political democracies, because it is quite impossible to run a democracy with an economic autocracy. The two things are not bed-fellows; and it would be extremely bad for the whole state if such an experiment were attempted.

Now, what can be done? What is being done, in the first place, is, I think, encouraging. You saw in your papers a little while ago that the United Kingdom Government and the United States Government are negotiating an Anglo-American Trade Treaty. I think that is the most important piece of news I have heard-and I judge it both politically and economically--in the last three or four years. It is capable of an infinite amount of good. It is capable of that amount of good irrespective of the effect upon the volume of trade passing between those two countries.

I welcome that news for this reason, mainly, because it does exemplify this trend toward a wider international organization on the economic plane. If we do not have that wider economic organization, then the British Empire as a whole is not wide enough. Look at the figures for the amount of the various primary products raised in our British Commonwealth. Look at the figures for the amount of trade between British countries and the trade between the British countries and foreign countries. The whole Empire as a whole has an export surplus. The whole Empire as a whole is a creditor at the same time. How are you going to reconcile things like this with the development of a self-sufficiency program? Above all, how are you going to reconcile that when the whole world is developing politically at such a rate that it seems to be heading for the abyss? I venture to think a move like the Anglo-American Trade Agreement move is the first sign of glimmering economic intelligence since 1927. In 1927, you remember, the economic delegations of every single nation represented at Geneva, without exception, said that the time had come for a halt in the rising tariffs and for a move in the opposite direction. That was ten years ago. Even since then the move has only been in the other direction. Every conceivable kind of obstacle has been raised in international trade, and plenty of obstacles have been raised even within the British Commonwealth of Nations itself. If it is done inside the British Commonwealth, it is a pretty poor lookout for the democratic nations that remain outside.

Of course the final question is: how hopeful is such a development, and on how much can one rely? I think one can rely on quite a good deal at the present juncture. There are obvious strategic, financial, economic and political reasons why an Anglo-American Trade Agreement should be whole-heartedly applauded. There are also various economic reasons why it should not stop there. After all, the most favoured nation clause is still in existence. As far as we are concerned, it is mainly unconditional; and that means a good deal of the concessions made on every side must be generalized over the realm of the countries with which we have treaties that contain this M.F.N. clause. It is possible to view that with a certain amount of encouragement because, as you can see in the statistics of every single democratic country, the economic and financial position is not particularly rosy. It looks as if there will be a certain amount of recession in the world as a whole. It looks as if there will be a break in world commodity prices. It looks as if the rearmament race must be kept going at all cost. We are building up there a very large vested interest in a peck of trouble, for a later date. What is going to happen if peace comes? That is the real question. Not if war comes. If war comes we know what we are in for. We are in for inflation. If peace comes, what are we going to do when the rearmament boom is over?

The only way to deal with that is to build up the international buffer of trade, on as wide a front as possible. The only realm in which that can be worked in is the realm of the still relatively free democracies. Among that I place the leading great powers in the democratic world, the United States of America, and the British Commonwealth of Nations.

I am sorry if I have appeared pessimistic here and there; but, fundamentally, I believe that the history of the next 25 years is still lying within human hands to accomplish. Those human hands, I hope, will be British hands. I thank you. (Applause.)

PRESIDENT: Mr. Hutton, it has (been said of you that you are extremely well-informed on political and foreign affairs, that your suggestions concerning the future would be extraordinarily interesting, all of which we have found, indeed, very true.

We thank you for making this long trip here to address us and we thank you for your splendid address on the subject, "The Problems of the British Empire," which is so much on the minds of the members of the Empire Club of Canada.

The meeting is adjourned.

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Problems of the British Empire


Problems of the British Empire—political, strategic and economic. How most problems of the world today touch the British Empire. A review of political problems. Changes over the last 35 years. A review of the political and constitutional situation today. The Crown now the only real and effective link left between the Empire administration and those of the other Commonwealth nations. Ways in which the independence of the Dominions may be guaranteed for the future and the integrity of the Empire. The division of responsibility and difficulties caused by that division. The Commonwealth of Nations in a transitional period. World events which have a direct reference both to the security and welfare of the whole British Commonwealth of Nations. The gravity of the dangers that hang over the whole Commonwealth of Nations, seen by a look at the situation in two strategic spheres: the Mediterranean and the Far East. An examination of a "worst-case" scenario of events in these two areas. The Government of the United Kingdom refusing to accept the responsibility for taking any warlike decision, and the speaker's response to that. United Commonwealth of Nations decisions. The intertwining of political, strategic, and economic aspects of a problem. The mutual aggravation and conflict of economic and political factors. Mutual commercial relationships as perhaps the greatest problem facing the democratic nations. Democracies in the name of self-determination taking decisions on the economic side which were definitely harmful to fellow democracies. This providing the dictatorships with a large stick wherewith to beat the democracies. Time to reverse this trend toward self-sufficiency and autocracy and regulation. Beating a retreat in the political sphere, and also in the economic sphere. Impediments to the flow of world commerce. Problems with "gentlemen's agreements." Two main influences working in world economics. What can be done, and what is being done. The negotiation of an Anglo-American Trade Treaty. Strategic, financial, economic and political reasons why an Anglo-American Trade Agreement should be whole-heartedly applauded. The rearmament race. Building up the international buffer of trade on as wide a front as possible. The speaker's belief that the history of the next 25 years is still lying within human hands to accomplish and his hope that they will be British hands.