1940-04-19 — Page 26

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HONGKONG TELEGRAPH

April 19, 1940.

GOOD USED CARS

Vauxhall "25" Saloon

1033

Studebaker Roadster

1932

Studebaker Sedan

1034

Buick Sedon

1934

Pontiac Saloon

1037

Morris "25" Saloon

1937

Miles

30670

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28122 $ 900.00

47140

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20260

Studebaker Coupe

1037

21117 $2500.00

Chrysler Sedan

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15352

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Chrysler Roadster

1930

Willys Saloon

1933

27400 $ 000.00

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Phones 27778-9

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Hongkong Telegraph.

Friday, April 19, 1940. Wyndham St., Hongkong Telephone: 20815

THE profix "Special to the Telegraph" Itised by the "Ilongkong Telegraph to indicate nows which is strictly copyright under the provisions of the Telecommuni- cation Ordinance, 1936. Such new) AS bears the indication ***** t** received in Hongkong on the date of publication by the United Press Associations, who re- servo all rights and forbid republication, either wholly or in part without previous arrangement.

Britain And Europe

The totalitarian view of the British Enipire is that it is an example of successful piracy. Europe is treated as the victim of its greed and urged to rid herself of a bully. There is a British view that the Empire is, on the contrary, an example of remark- able chivalry. Europe is expected to recognise this and to be grateful for tur unselfishness.

Those who try to see the history of the British Empire as

it would look to an impartial European would find the truth somewhere between: the two views. The motives and methods of acquisition in the past have been much the same among all expanding European Powers, On the other hand, the strength

and character of the British Empire have made it in some important_senses_a_ convenience to Europe.

In the first place, Britain's interest in Europe has been that of a Power whose ambitions were satisfied out- side Europe. So far as Europe was concerned the overruling, British desire was that Europe should not fall under the power of a State strong enough to dominate her. In this case it happened that what sulted Britain suited also the several peoples

of Europe.

In the second place, British passes-

sions scattered fiver the sens were not closed to the merchants and traders at other countries. Any nation, therefore, might well prefer that territory whose resources and

It did not itself markets should be in the hands of Free Trade Britain rather than in those of n

control

Protectionist rival. The German slatesman Zimmermann declared,

an

"Our rise depended essentially on the English policy of the Open Door." The British Empire was thus influence

for peace. From these facts there has grown up a school that speaks of a Pax Britannica on the model of the old Pax Romana, and Europe is expected to cherish this legend as gratefully as the Roman Empire was cherished by men of all races who enjoyed its shelter and hospitality.

taken It is for granted that the neutral nations must see that Britain is an unselfah This is a dangerous illusion, Power. The extreme case

case put by the

totall- the representing

British Empire us a sinister figure unswered from

tarlans

Bri

can

If we

arc

Wal victory.

concerned only for

But that answer is

*ས་

enough.

What

ad-

has to be said of our diplomacy since 19317 What gounds for confidence did it give the neutrals? The sound arguments Mr. Chamberlain dresses to the neutrals to-day might have been addressed to him by the neutrals in the days of

of appease- ment. The collapse of collective ['security for which Britain must sharo with France the chief responsibility, makes more vivid impression on the mind of Europe than those aspoels of our isistory that stelke the imagination of Britain. To the totalitarian argument that Germany can unify, and organise Europe we must not reply merely by showing what kind of, n Europe.would emerge from this treatment; we must show what we are ready to do to create a different Europe. We have to take an active and a leading part

in the economic task that was shirked or overlooked at the Peace Confer- ence of 1910,

It is not the longest but the longest

sword but the

purse

FIRST of all, we must admit that the war costs a great deal. It costs far more than the last occa- sion when we fought the Germans.

At this stage in the former struggle the war cost បទ about £3 millions a day, as against £6 millions a day now.

The expenditure of the French was then £2

a day, as against 24

a day in this war,

millions millions

Now, why is it that the war costs twice as much as it did last time?

The answer is a simple one. The pay

and of soldiers sailors is a bigger item of ex- penditure. Battleships cost. twice as much to build. The Air Force has been added to our war services.

When war broke out the Air Force was costing us about a million pounds a day. That is the figure which Sir Kingsley Wood was spending in building and operating our airplanes,

There is also another chan- nel of war expenditure which did not exist in the last con- flict-Air Raid Precautions.

That is the service through which the passive defence of the civil population against the menace of air attack is organised. And there is also Evacuation, the cost of main- taining school children from the cities in country districts, where they will not be exposed to the same danger of bomb- ing by the enemy.

☆ ☆

BUT although the increase in the cost of warfare-is casy to explain, it has still to be faced. We have to meet the position that, in our own case and in the case of France, this war costs roughly twice as much as the last war. That is the situation revealed by comparable figures.

Want resources have we got to meet this expenditure?

There is, first, the tax revenue of the country. In 1015 we were meeting less than one-quarter of the national expenditure out of taxation. That was the propor- tion we paid out of income. The rest we borrowed.

To-day we are paying half the cost out of taxation,

That is one tremendous advan- tage which we disclose on this oc-

casion

It

emphasised cannot be

too strongly, or repeated too often, that half the burden of the cost of this war is borne on current revenue.

That is equal to four times as much as we paid out in lexation in the same period of the last war, Taxpayers should rejoice, For It means that the more we pay now, the more confidence we can have after the war.

Other efforts will have to be made, 100. We must inereuse our output and turnover. That is Im- perative,

With that increase in turnover we must also Increase taxation. Saving should be encouraged in every direction, so that borrowings by the Government will not depend upon the inflation of banking credit. For my part I believe that the conduct of war economy will deler- mine the course of the war.

☆

WE have payments to make abroad. That is where diff- Indeed, culties may arise. that is the most important financial problem we have to deal with.

Our ability to meet that problem is immensely greater than it was in the last war.

And here let me say that in Sir John Simon we have a Chancellor of the Exchequer who is able, cool, far-seeing, cautious and eco- nomical. And no more can be sald in praise of a good Chon- cellor,

Now let us array the resources at our command för making "pur...

chases abroad.

that

conquers

THE RESOURCES of Britain are ample for the war campaign in which we are involved.

That is a proposition which, if it can be sustained, will do much to fortify and strengthen the courage and endurance of the British public.

More important, it will instil confidence in the hearts of the great multitude of American citizens who wish us well and are anxious about our future.

It may even persuade some of them to buy our securities and to build up assets in the Empiro.

And at all times we should express our gratitude to them for past friendship. We should not hesitate to deal with them frankly. There is no uso attempting to hide our views from them or restraining our opinions. The Americans will never thank us for pretending one thing to them and saying another thing among ourselves.

So here is a disclosure of the financial situa- tion of Britain as I see it.

By Lord Beaverbrook

In the total 1 am taking the liberty of Including not only French but also Canadian resources. I do so, not because I expect Canudiun assets to be available for Britain's service, but because the Canadian war effort must be paid for by the Dominion.

Now what is the position with regard to the ability of the Allies to pay for war material purchased in the United States? What re- sources do they command for this purpose?

There are the GOLD RESERVES of Britain, France and Canado. These amount to:

Britala

France

Canada

Other British and French countries

£500,000,000

750,000,000 54,000,000

130,000,000 £1,434,000,000

A total of... Then-there-are-the. _CASU__ BALANCES standing to the credit of Britain, France and Canada In the United States,

These amount to £317,000,000 of.

#bout which Britain holds half.

one-

Liquid securities possessed by the three stand at 11 figure of

£355,000,000.

And the non-liquid securities

France owned by Britain,

and Canada can be reckoned at a total of £325,000,000,

of the So the total resources Allies, which would be avaliable for purchases in the United States, amount, if the Canadian resetrees are included, to a total of about

£2,400 millions,

*

*

THIS compares with a total of gold and dollar resources in 1914 of about £1,600 millions. It shows an immense increase in financial strength.

In the Inst war Britain and France bought un balance from the United States £2,300 inllions' worth of goods ull told. This is the total American sales to the two chief Allied Powers after de- ducting their exports to the United States. If we can confing ourselves to the same sum, us I am con- vinced that we shall, owing to the own raw

development of our materials, then, with Canndlan financial resources included,

we

have enough gold, cash and quid securities to Buy the goods we need.

We must also take into account our capacity to pay for some of our American imports by means of exports to the United States. This capaelly will, in fact, be greater than in the last war owing to the development of production in the Empire,

Then, in addition, those exports to the United States will include sales of animal, vegolable and nineral commodities by the British Colonies and also the French Colonies. There is. e. very big export from Canada of metals and newsprint. There is the gold ex- port from Empire countries.

But it must be borne in mind that Canadian assets, of whatever den- ...)cription, are not avaliable to pay. for Britain's purchases. And that

:

Canada's financial resources have been included in the totais given' above, Against these Canadian assets there are, of course, numer- ous holdings in neutral countries, notably the South American re- publies, which have not been taken into account.

It is my view that, since the outbreak of war, we inve so far Jest none of our American assets. There has been no reduction in them worth recounting.

*

*

HOW has it been possible for us, in war conditions, to effect this husbanding of our resources?

There has, of course, been ង sharp wartime decline in some of uur normal purchases from the United States. We have reduced our import of American tobacco, of cotton, of Wheat and other com- modities.

In the ease of tobacco we took in the month of October 1939, for instance, six million dollars' worth, Jas compared with twenty-nine million dollars fr the same month of 1038.

The decline is due, in some measure, to economy in consump- to. To the desire to do without. But this economy is supplemented by an increase in production of tobacco in the British Empire.

Our dependence on American supplies of tobacco is thus reduced.

The value of the import of raw cution which Britain can derive from the Empire fa more than three times greater than It was before the last war,

And although in that last war we brought inore than half our imported wheat from the United £200 States, at a cost of shout inillions, the Empire con now. supply all the wheat that we need.

Now we must take into account the production of vegetable, animal and mineral wealth in the British Empire.

The extension and development of these resources has been carried on in the Inst twenty years at a rate which far outstrips any other development in the world.

It is true that the progress has been unsatisfactory to men who have always been conscious of this vast treasure house given into our keeping. The treasure house, that is known as the British Empire.

But while we cannot claim to have turned our single talent into ten, neither can we be diamiased as the servant unworthy of the master's confidence.

Let us look, then, at gold pro- duction. And here I wish to cm- 18 phasize that gold production not to be confused with gold stocks.

Gold production relaten only to the gold that is mined from the earth year by year.

The gold output of the British empire was 14 million Ane ounces In 1914. It is 21 million ounces

now.

That is an increase of 50 per cent in quantity. And it in a far bigger Increase when measured in money values.

For account:

this must be taken into

Gold will buy more imports than it did in the last war. For that reason, our purchases from abroad will not be so expensive as they were. They will, in fact. cost much less in terms of gold and actually slightly less in terms of sterling.

*

OUR purchases of raw materials may be huge, but remember, in gold values, the price of raw materials is less. than half what it was in the last war.

This is startling,

but it is a fact,

The Investor's Chronicle, a most reputable financial journal, has re- cently made an extensive calcula- tion of the total imports of raw materials into Britain during the last war.

It was shown that these importa represented 385 million ounces of gold.

This journal then reaches the astonishing conclusion that a sini- lur quantity of commodities, tak- ing prices at the outbreak of war, could be bought with 154 million. ounces of gold.

But it not in gold alone that the remarkable Empire develop-· ment has been demonstrated... There orc many other raw materials where increases of pro- duction since the last war show far more striking results.

*

HERE is a short table. which I

reveal hope will quite clearly the wealth and. strength of the British Em-- pire:

BRITISH EMPIRE OUTPUT

Year

Year

1013

1930

Tuns

Tons

22,500

102,000.

34,000 600,000

Nickel Copper Bauxite

(aluminium ore) 25,000 400,000.

Rubber Cocoa

40,000 800,000 90,000 415,000

It will be seen that in every case there is a considerable In- crease in the quantities of these commodities--produced-in-the-En- plre. The total result is an eight- lold increase in output.

And always there is an increase- in Empire production relative to world output.

The position with regard to oil ka different.

The Empire production is six million tons. Under the control of the Empire is a production. amounting to perhaps 25 million tonis.

The Empire production is about the same in relation to total world. output as it was in 1914. But we derive benefit from the 25 million. tons produced outside the Empire with our money.

It will be seen, then, that the strength of Britain, Canada, and the rest of the Empire la so great. that it seems impossible that we can in the long run suffer defeat.

In fact, on economic issues the- triumph of the Empire is assured.

CA

1ER

WE pass at once to the dark forebodings about the future. sometimes held and expressed by business men reluctant to undertake new obligations.. The forebodings we can pro.... nounce utterly utiwarranted.. It can be said with supreme confidence..

There is every hope, prospect. and expectation thint from the war the Empire will emerge so strong In raw materials, RO

rich in mineral, vegetable and mineral assets that it should afford a futuro: filled with hope and bright with the prospect of happiness and con- tentiment to our people.

I hope, too, that, even when the- war progresses and we turn in an immense effort and concentration: to fighting and destroying enemies, we will at the same time develop our resources to the fullest extent.

our.

Our raw materials, the produco- of the koll, and our animal wealth, here at home, in the Crown. Colonies, and in other parts of the- Empire, constitute our strength and justify our confidence.

Such a development would in volve us in forming a firm resolve to use our man-power to the ulter-

most at home' and'abroad.