A similar development is taking place in the field of investment. In former years, British, French, Dutch, Belgian and German financiers were requested, indeed begged, to invest their surplus capital in American enterprises. To these financiers we went cap in hand, and they did not lend their money cheaply. The complementary relation between lending Europe and borrowing America was productive of the friendship of mutual benefit. To-day we are still a debtor nation, but only in the sense that the great financier is a debtor. We ourselves have a large capital, and in the main go to Europe merely for the sale of safer and less remunerative bonds, while the common stock of new enterprises is likely to remain in America. Or we graciously "let Europe in on a good thing," conferring, not asking, a favour. In the meantime, we are paying off our indebtedness as is indicated by the balance of trade, which since 1876 has almost invariably been strongly in our favour.[10]
The war has still further reduced our foreign obligations. During the two years ending June 30, 1916 our excess of exports over imports was over three and one-quarter billions of dollars. Moreover, in 1915 we did not incur, as ordinarily, a large debt as a result of the expenditures of Americans in Europe. The result of this development has been twofold; a considerable transfer of European holdings of American securities to Americans, and the direct loan of American capital to Europe. While it is impossible to quote exact figures, the American debt to Europe can hardly have been reduced during the two years ending August 1, 1916, by less than two totwo and a half billions, or perhaps a third, or even a half, of our former debt to Europe.[11]
In the meantime the United States though still a debtor nation has also become a creditor nation. Just as Germany, before the war, borrowed from France and loaned to Bulgaria and Turkey, so the United States, while still owing Europe, invested in Mexico, Canada and South America. It is probable that by 1914 considerably over one and a quarter billion dollars of American capital was invested in Canada, Mexico, Cuba and the Republics ofCentral and South America, not including the capital represented by the Panama Canal.[12]
Even to-day (Nov. 1, 1916) there is still a probable excess of our debts over our credits with foreign nations of at least two billions of dollars. In comparison with our total wealth, however (estimated by the census of 1910 at 207 billions and since then largely increased), this indebtedness seems comparatively small. The national income is rapidly expanding and as the chance to secure exceptionally large profits in railroad and industrial enterprises diminishes there is an increased temptation for surplus capital to flow abroad. Whether or not we shall again have recourse to the fund of European capital in developing our immense resources, it is hardly to be doubted that we shall increasingly invest in foreign countries, and especially in Mexico, and elsewhere in the Americas.[13]
Such a development is entirely legitimate and within bounds desirable both for the United States and to the countries to which our capital (and trade) will go. The possible field of investment in Latin America and the Orient, to say nothing of other regions, is still immensely great, and as capital develops these areas theirinternational trade will also grow. There is no reason why the United States should not take its part both in the investment of capital and the development of trade with these non-industrial countries.
As we so invest and trade, however, we must recognise the direction in which our policy is leading us and the dangers, both from within and without, that we are liable to incur. The more we invest the more we shall come into competition with the investing nations of Europe. We are already urged to put capital into South America on the just plea that trade follows investment, and the same forces that are pushing our trade outward will seek opportunities for investment in the mines and railroads of the politically backward countries. Like European nations, we too shall seek for valuable concessions, and may be tempted (and herein lies the danger) to use political pressure to secure investment opportunities. What happened in Morocco, Persia, Egypt, where the financial interests of rival nations brought them to the verge of war, may occur in Mexico, Venezuela or Colombia, and the United States may be one of the parties involved.
We seem thus to be entering upon an economic competition not entirely unlike that which existed between Germany and England. We too have gone over to a policy of extending our foreign markets and of protecting our foreign investments. More and more we shall be interested in politically and industrially backward countries, to which we shall sell and in which we shall invest. Inevitably we shall face outwards. We shall not be permitted by our own financiers, manufacturers and merchants, to say nothing of those of Europe, to hold completely aloof. We have seen, even in the present Mexican crisis, how American investment tended to precipitate a conflict. We have learned the same lesson from England,France and Germany. As we expand both industrially and financially beyond our political borders we are placed in new, difficult and complicated international relations, and are forced to determine for ourselves the rôle that America must play in this great development. We can no longer stand aside and do nothing, for that is the worst and most dangerous of policies. We must either plunge into national competitive imperialism, with all its profits and dangers, following our financiers wherever they lead, or must seek out some method by which the economic needs and desires of rival industrial nations may be compromised and appeased, so that foreign trade may go on and capital develop backward lands without the interested nations flying at each other's throat. Isolation, aloofness, a hermit life among the nations is no longer safe or possible. Whatever our decision the United States must face the new problem that presents itself, the problem of the economic expansion of the industrial nations throughout the world.
[1] This comparison is not exact, since the British statistics include articles under manufactures which we do not include, and exclude articles which we include. I cite these figures merely to show that there is a vast difference in the relative importance to the United Kingdom and the United States of their export of manufactures, but not to show exactly what that difference is. Similarly the comparison above between the total product of American manufacturing and our export of manufactures is approximate.
[2] See an analysis—let us say of Argentine trade.
[3] On the other hand the very extension of our home market tends to make us negligent of foreign exports of manufactures and to consider the profits from this business as a mere by-product. A large and successful foreign market can be maintained only by careful study and continuous work.
[4] Hutchinson (Lincoln), "The Panama Canal and International Trade Competition," p. 105et seq.New York, 1915.
[5] Despite the fact that as yet theabsoluteincrease is greater in the British than in the American trade with these countries.
[6] Hutchinson (Lincoln),op. cit.
[7] From 1914 to 1916 our exports of merchandise increased from 2365 to 4334 millions of dollars (an increase of 83 per cent.) and our balance of exports over imports rose from 471 to 2136 millions (an increase of 354 per cent.). Monthly Summary of Foreign Commerce of the United States, June, 1916. (Corrected to Aug. 9, 1916, subject to revision.)
[8] "In spite of inexperience, crude methods, lack of banks and of ships we have made notable gains in South American trade. There seems to be no reason to question the probability of a continued rapid increase during the next few years.... The process of building and making more efficient our own manufacturing plants has been carried far, so that we are prepared, in the opinion of competent judges, to proceed more rapidly than ever with the production of goods for foreign markets."—William H. Lough, "Banking Opportunities in South America," Bureau of Foreign and Domestic Commerce (Dept. of Commerce), Special Agents Series No. 106, Washington, 1915, p. 7.
[9] In a recent address (see date) to the American Iron and Steel Industry, Mr. Edwin W. Hurley, vice-chairman of the Federal Trade Commission, points out how during the last quarter of a century the Germans have co-ordinated their foreign trade, with the result that of the steel business 90 per cent. has been brought under a single control. The effect has been a victory for the German over the British export business. Mr. Hurley states that while a constructive programme has been worked out by the Interstate Commerce Commission for the railroads, and co-operation among the farmers has been stimulated by the Department of Agriculture, the manufacturing industries concerned in the export trade are hampered by provisions of the Anti-Trust Law. "Is it reasonable to suppose," he asks, "that Congress meant to obstruct the development of our foreign commerce by forbidding the use in export trade of methods of organisation which do not operate to the prejudice of the American public, are lawful in the countries where the trade is to be carried on, and are necessary if Americans are to meet competitors there on equal terms?"—New YorkEvening Sun, June 21, 1916.
[10] In the last forty years the balance has been against us in only three years, 1888, 1889 and 1893. The real balance is not nearly so great as the apparent balance, but there can be little doubt that it represents a considerable repayment of the principal of our great debt to Europe.
[11] According to W. Z. Ripley the American debt to Europe amounted in 1899 to $3,100,000,000 of which $2,500,000,000 was owed to England, $240,000,000 to Holland, $200,000,000 to Germany, $75,000,000 to Switzerland, $50,000,000 to France, and $35,000,000 to the rest of Europe. After 1899 there was a reduction in the amount of European holdings of American securities (mostly railroad bonds and stocks), but since 1907 there was again an increased purchase, so that by 1914 the American debt to Europe was considerably greater than it had been in 1899. See New YorkJournal of Commerce, Dec. 6, 1911. Also, Hobson, C. K., "The Export of Capital." New York, 1914, p. 153-5. According to a compilation made by President L. F. Loree of the Delaware and Hudson Railroad, the American railroad securities formerly held in foreign hands but which were absorbed by the American market during the eighteen months ending July 31, 1916, amounted to $1,288,773,801 par value and to $898,390,910 market value. The railroad securities remaining abroad (July 31, 1916), amounted to $1,415,628,563 par value with a market value of $1,110,099,090. In other words according to these statistics of returned securities (which Mr. Loree believes are largely underestimated) about 45 per cent. (market value) of the railroad securities held abroad on January 31, 1915, had been returned eighteen months later. (New YorkTimes, Sept. 25, 1916.) The New YorkTimesstates that "it is high banking opinion that at the outbreak of the war, the total of industrial securities held abroad amounted to about 25 per cent. of the railroad securities, and that the liquidation of industrials since has been in about the same proportion to the total as the liquidation of rails." On this basis the foreign holdings of American railroad and industrial securities on July 31, 1916, would have amounted to only $1,375,000,000 (market value).
[12] For data used as the basis of this estimate, see Hobson, C. K., "Export of Capital" (p. 153 and following), together with sources there cited.
[13] "The adoption of the Federal reserve system has ... released and made available for other forms of financing great sums which were formerly tied up in scattered reserves. We have only to look at the monetary history of the German Empire during the last forty years to see how powerful an influence on industry, trade, and investment is exerted by the centralisation and control of bank reserves. The LondonStatisthas calculated the ultimate increased lending power of American banks, under the Federal reserve system, at $3,000,000,000."—Lough,op. cit., p. 8.
For decades, the foreign and domestic policies of the United States were determined by our ambition to subdue and people a wilderness. Our immediate profit, our ultimate destiny, our ideals of liberty, democracy and world influence, were all involved in this one effort. To us the problem was one of national growth. To-day we are beginning to realise that this Western movement of ours affected all industrial nations, and was only a part of a vaster world movement—an economic revolution, which has been developing for more than a century. That revolution is the opening up of distant agricultural lands and the binding of agricultural and industrial nations into one great economic union. It is a world integration.
To this world development the crude physical hunger of the Western populations has contributed. The urbane Chinese official, who voices the sentiments of Mr. Lowes Dickinson, attributes Europe's solicitous interference in China to the fact that the Western World cannot live alone. "Economically," he says, "your (Western) society is so constituted that it is constantly on the verge of starvation. You cannot produce what you need to consume, nor consume what you need to produce. It is matter of life and death to you to find markets in which you may dispose of your manufactures, and from which you may derive your food and raw material. Such amarket China is, or might be; and the opening of this market is in fact the motive, thinly disguised, of all your dealings with us in recent years. The justice and morality of such a policy I do not propose to discuss. It is, in fact, the product of sheer material necessity, and upon such a ground it is idle to dispute."[1]
Necessity is a large and a vague word; it may mean any degree of compulsion or freedom. Yet the Chinese official is right when he emphasises the immensity of the economic forces driving the Western nations outward. Not adventure, ambition or religious propagandism will account for the full momentum of this movement. Back of the missionaries, traders, soldiers, financiers, diplomats, who are opening up "backward" countries stand hundreds of millions of people, whose primary daily needs make them unconscious imperialists.
At the bottom this outward driving force is the breeding impulse, the growth of population. In 1800, one hundred and twenty-two millions of people lived in western Europe, whereas in 1900 the population was two hundred and forty millions,[2] and the rate of increase is still rapid. The population has doubled; the area has remained the same. The new millions cannot be fed or clothed according to their present standard of living unless food and raw materials come from abroad. They depend for their existence on outside agricultural countries.
This increase of European population, moreover, has been a net increase, after emigration has been deducted.Although during the last century tens of millions of immigrants have gone from western Europe to the United States, Canada, Brazil and the Argentine; the home population has increased by over one hundred and seventeen millions and is to-day increasing by twenty millions a decade.[3] For all of these twenty millions no sufficient outlet can be found either in old or in new lands. The problem, therefore, is not to find homes for them abroad but to secure their existence at home. And this existence can only be secured by raising the necessary food in distant agricultural countries and by turning over a large part of western Europe to manufacturing and commercial enterprises. Colonisation, imperialism, the opening up of new agricultural countries, is therefore the other side of industrialism.
The present revolution in the world to-day is thus in a real sense a sequel to the industrial revolution, which gave birth to our modern industry. That imposing industry depends upon non-industrial populations, who produce food, cotton, wood and copper, and exchange them for manufactured goods. Since the people who fashion and transport products must be fed by those who raise them, agricultural production must be stimulated at home and abroad. The nation must expand economically. This expansion, which is broader than what is usually called imperialism, is not a merely political process. It takes small account of national boundaries, but develops farming wherever possible.
The movement is vast and intricate: Commercebetween industry and agriculture is carried to the outermost parts of the earth; Africa is divided up, colonies, dependencies and protectorates are acquired; agriculture is promoted in politically independent countries, and an internal colonisation, a colonisation within one's own country, occurs simultaneously. In Australia, the Canadian West, in Argentine, in Siberia settlers lay virgin fields under the plough, and the new lands are bound commercially to the great complex of Western industrial nations.
They are also bound psychologically. As the machine which conquered the nation now conquers the world, so the spirit of Manchester and London and of Pittsburgh and New York rules ancient peoples, breaking up their rigid civilisations, as it rules naked savages in the Congo forests. It is a materialistic, rationalistic, machine-worshipping spirit. The unconscious Christian missionaries to China, who teach the natives not to smoke opium and not to bind the feet of their women, are unwittingly introducing conceptions of life, as hostile to traditional Christianity as to Confucianism or Buddhism. They are teaching the gospel of steam, the eternal verities of mechanics, and the true doctrine of pounds, shillings and pence. Feudalism, conservatism, family piety, are dissolved; and, as the conquering mobile civilisations impinge upon quiescent peoples, new ambitions and desires are created among populations hitherto content to live as their forefathers lived. These desires are the inlet of the restless discontent which we call European civilisation. When the ancient peoples, civilised or not, desire guns, whiskey, cotton goods, watches and lamps, their dependence upon Western civilisation is assured. Bound to the industrial nations, they toil in mines or on tropical plantations that they may buy the goods they have learned to want, and that Europe may live.
In this cosmopolitan division of labour, which destroys the old economic self-sufficiency of nations, England took the lead. A hundred years ago, when the British agriculturist sold his produce to the British manufacturer in return for finished wares, and foreign commerce was insignificant, the population was limited by the food it could produce. Every increase in the number of Englishmen meant recourse to less fertile fields, an increase in rents, a lowering of wages and a resultant pauperism. The hideous distress during the Napoleonic Wars and after was largely due to an excessive population striving to live upon narrow agricultural resources.
The alternative presented was to stop bearing children or find food abroad; stagnation or industrialism. If England (with Wales) could in 1821 barely support twelve millions, how could she maintain thirty-six millions in 1911? Only by going over to free trade, by raising her food and raw materials in countries where land was cheap, and employing her people in converting these into finished products. To-day three live in England better than one lived before; on the other hand, a large part of the food supply is raised abroad.
Had Great Britain literally become "the workshop of the world," manufacturing for sixteen hundred million inhabitants, there would have been no limit to her possible increase in population. No such national monopoly, however, was possible, or from a world point of view desirable. Belgium, France, Germany and later other thickly populated countries were also faced with the choice between stagnation and industrialism, and as English machines, English industrial methods and English factory organisation could be imported, these nations, one after another, went over to manufacturing, ceased to export food andbegan to import both food and raw materials, competing with Great Britain for industrial supremacy.
These competing industrial nations had a great common interest, to increase the total food and raw materials to be bought and therefore the manufactured products to be sold. The greater the development of foreign agriculture the better for industry in all these nations. To secure this agricultural base abroad, the nation was not compelled to establish its own colonies, for Belgium and Holland could buy food and raw materials even if the Congo and Java were nonexistent. As a consumer it made little difference to England whether she got her wheat from Russia or India, or her sugar from Germany or Mauritius, so long as the supply was plentiful, cheap and constant. Actually a large part of the food supply came from politically independent countries, the United States alone increasing its food exports from fifty-one millions of dollars in 1860 to five hundred and forty-five millions in 1900, and its cotton in equal ratio.
But as American economic development proves, it is difficult to maintain this common agricultural base. The agricultural nation, in the temperate zone, grows in population, converts itself into an industrial community, and not only consumes its own food and raw materials but draws upon the common agricultural fund of the older industrial nations. To-day the United States is rapidly lessening its food exports, is increasing its imports of sugar, coffee, tea, fish, and other foods, and is thus forcing industrial Europe to find a new agricultural base.
This conversion of agricultural into semi-industrial nations proceeds rapidly. Switzerland, Austria, Italy, Japan, even Russia, increase their manufacturing, and intensify the demand for the world's supply of raw materials. It is a normal and in present circumstances an inevitableprocess. When, however, the exportable supply of food and raw material of an agricultural country dwindles, a new equilibrium must be established. New states, territories, colonies, hitherto exporting but little agricultural produce, are opened and their production stimulated. From Russia, the Danube Valley, Canada, Australia, Brazil, Argentine and many parts of Africa, new supplies of raw material are secured. Fresh sources are also discovered for the production of fodder, flax, cotton, wool and ores. It is an equilibrium, forever destroyed and forever re-established, between an increasing number of industrial nations with increasing populations and new agricultural bases, upon which the superstructure of the world's export industry is reared.
It is not, however, by the sale of present manufactured goods alone that the industrial nations can secure their foreign food. One may own abroad as well as earn abroad. An Englishman with a thousand acres in North Dakota or Alberta may export the wheat that he raises exactly as though the farm were in Devon. If he owns shares in the Pennsylvania Railroad, he may with his dividends purchase wheat, which he may ship to his own country without exporting commodities in return. The true economic dominion of England extends wherever Englishmen hold property. Subject to the laws of the land where the property is held, this ownership gives the same claim to the product of industry as does an investment at home.
As we read the imperialistic literature of to-day, we discover that the chief emphasis is laid on the great value of new countries as a field for this sort of profitable investment. Investment, not commerce, is the decisive factor, and money is to be made out of opportunities to build railroads, open mines, construct harbours and irrigate arid districts. The diamond mines of the Transvaal were moreattractive to the English than the chance to trade, and what was of immediate value in Morocco were the iron mines and future railways and not the right to sell tallow candles to the Berbers.
In large part this foreign investment of capital has the effect of broadening the agricultural base. While to the individual investor, capital export means getting eight per cent. instead of four, and to the promoter, a chance to make a few hundred thousand dollars or pounds, to the industrial nation it means that a fund is created which will help pay for a steady flow of agricultural products and raw materials. To the whole complex of industrial nations and to the world at large it means even more. The export of capital increases the capacity of the agricultural nation to serve as a feeder to all industrial peoples. It provides cheap transportation and improved agricultural machinery. Had Great Britain not invested in American railways during the fifties the United States would have exported less food to Europe in the seventies. Freight rates dropped and the industrial nations were flooded with cheap wheat. British capital in American railways aided British manufacturing more than if the same capital had been placed at home. To-day for the same reason the process continues elsewhere. In Russia, South East Europe, Canada, Australia, South America, Asia and Africa, capital, furnished by the industrial countries, is increasing the production and exportation of food and of raw materials, and is thus indirectly promoting the industry of western Europe.[4]
Such investment abroad is not new. In the Middle Ages the bankers of Northern Italy, and later of Spain and Portugal advanced small sums to impecunious foreign sovereigns. But the thousand marks borrowed by Henry V from Genoese merchants, or the loans made by Holland in the 18th Century, did not compare with the vast sums invested by England since the Napoleonic Wars, nor by other countries since 1850. For, as in manufacturing, so also in the export of capital, France, Belgium, Holland, Germany and even the United States entered the field. The source from which capital could be obtained widened with the increase in the number of wealthy industrial nations, and the volume of investment expanded rapidly. The foreign investments of the United Kingdom, according to an estimate made by Dr. Bowley, amounted in 1854 to two and three-quarter billions of dollars. For 1914, sixty years later, these holdings were estimated at seventeen and one-half billions. It is believed that the French have invested some eight billions of dollars and the Germans four billions.[5] The entire foreign investment of capital by the industrial nations of Europe cannot have amounted (in 1914) to less than thirty-two or thirty-five billions of dollars.[6]
If this great investment were made solely in countries with a highly developed capitalism, with stable political conditions and strong economic ambitions, no imperialistic policy would be necessary. England need not "own" the United States in order to invest here safely or for purposes of trade. Nor is she under an economic compulsion to rule Canada or Australasia. Were these British colonies quite independent politically, Canadians and Australians wouldstill endeavour to sell wheat and mutton to Europe and to attract and protect European capital. Their own self-interest, not any outside compulsion, makes them serve European, in serving their own interests. In Morocco, on the other hand, and in Tunis, Persia, Jamaica, Senegal and the Congo, the situation is different. The natives of these lands lack most of the elements which make for the ordered economic development demanded by Europe. Under native rule there is governmental incompetence and venality, disorder, revolt, apathy and economic conservatism. Foreign investment is impossible and trade precarious. It is here where the industrial system of Western Europe impinges upon the backward countries that economic expansion merges into modern imperialism.
[1] "Letters from a Chinese Official. Being an Eastern View of Western Civilisation." New York (McClure, Phillips & Co.), 1903, p. 13.
[2] See "Handwörterbuch der Staatswissenschaften," II, pp. 992, 993, Third edition, Jena, 1909-1911. Western Europe here includes all of Europe except Russia, Hungary, Bosnia and Herzegovina, the Balkan States and Turkey.
[3] The absolute increase in the population of western Europe is itself increasing. In the decade 1800-1810, the increase was 6.3 millions; in the nine succeeding decades it was 7.8; 13.5; 11.3; 9.6; 9.7; 11.5; 14.1; 14.5 and 19.0 millions. In the fifty years ending 1850 the population increased 48.6 millions; in the fifty years ending 1900, 68.7 millions.
[4] Not all foreign investment of capital results or is intended to result in stimulating agriculture and other extractive industries. Much of it is spent unproductively on guns, ships and royal and presidential luxuries, and much in stimulating manufacturing in agricultural nations, thus narrowing instead of widening the agricultural base of the capital-exporting countries.
[5] See Hobson, "Export of Capital."
[6] Moreover this investment, until the outbreak of the war, was rapidly increasing, amounting to no less than $1,500,000,000 a year.
"The free West Indian negro," writes Sir Sidney Olivier, "is not only averse as a matter of dignity to conducting himself as if he were a plantation slave, and bound to work every day, but also enjoys the fun of feeling himself a master. And so, on a big sugar estate, when expensive machinery is running, and the crop has to be worked without stoppage, or on a banana plantation, when the steamer has been telephoned at daybreak, and two or three thousand bunches have to be at the wharf by noon, the negro hands will very likely find it impossible to cut canes or fruit that morning. It isn't a strike for better conditions of labour; they may have no grievance; another day they will turn up all right: but a big concern cannot be run on that basis. That is the root of the demand for indentured labour in the West Indies."[1]
It is also the root of imperialism. For imperialism from an economic point of view is in the main a foreign political control to make the "niggers" work. The industrial nations, desiring food, raw materials, markets and a field for investment, being thwarted by conditions in certain backward agricultural countries, seek to remedy these conditions by means of political sovereignty. It is not necessary to control well-governed countries which are peopled by economically ambitious men who will work sixdays a week, fifty-two weeks in a year. In politically independent countries, however, and especially in the tropics, production is rendered ineffective by the disturbed political conditions, the lack of capital and capitalistic intelligence, the absence of fixed industrial habits, as well as by a general inertia and distaste for continuous labour under the hot sun. As a result, industrial nations are deprived of the markets and food supplies, which they consider necessary to their development.[2]
No necessity of feeding Europeans appeals to the West Indian negro when he emerges from his thatched hut after a comfortable night's sleep. Though unskilled, he is a strong and capable man, willing, when incited by friendship or gratitude, to incur trouble and endure fatigue. But, as Olivier points out, "the capitalist system of industry has never disciplined him into a wage-slave," and perhaps never will. The tropical negro "has no idea ofany obligation to be industrious for industry's sake, no conception of any essential dignity in labour itself, no delight in gratuitous toil. Moreover, he has never been imbued with the vulgar and fallacious illusion which is so ingrained in competitive industrial societies, that service can be valued in money.... Work and money are not yet rigidly commensurable in the consciousness of the African. Half a dollar may be worth one day's work for him, a second half-dollar may be worth a second day's work, but a third half-dollar will not be worth a third day's work.... Moreover he lives in climates where toil is exacting, and rest both easy and sweet. There are few days in the year in England when it is really pleasant to loaf, and the streets of civilised cities are not tempting to recumbent meditation."[3]
It is not always necessary for a foreign power to intervene in order to disturb this "recumbent meditation." In certain tropical and sub-tropical countries there develops within the nation a group of exploiters, who control the government, such as it is, and force the natives to work. The atrocities of the Putumayo district in Brazil illustrate the capitalistic spirit in its very worst form, as did also the forced labour on the Yucatan plantations during the Diaz régime in Mexico. To meet the economic needs of the industrial world, it makes little difference whether peons are enslaved by Mexican, American or English capitalists, so long as the output is the same. But native capitalists are often unable to secure the desired economic result because they are too ruthless and, through lack of adequate financial and military resources, cannot maintain order. Despotism tempered by revolution, oppression interrupted by savage reprisals, is notan approved economic stimulus. The difficulty in Mexico to-day, as also in Venezuela and in Colombia, is the laming of industry by frequent revolutions. It is the same difficulty that was encountered in India, Persia and Morocco. The East Indian is as unflagging as the French or Italian peasant, but not until the British occupation could he secure the legal protection necessary to a higher economic development. Peace, sanitation, industrial promotion and an economic or legal compulsion to work constitute the tools of imperialism, as they are applied to agricultural countries in the tropical and sub-tropical world.
There is one outstanding difference between temperate and tropical countries, which gives to modern imperialism its essential character. Given a low stage of civilisation, temperate lands are likely to be thinly populated, while tropical countries, however rudimentary their economic processes, may maintain large, low-grade populations. In the temperate climes, therefore, the intruder, who is more highly developed economically, soon outnumbers the natives, while in tropical countries, the white immigrant, even when he withstands the climate, is scarcely able to hold his own, and the very improvements which he introduces lead to an increase in the indigenous population. The white man either remains above and in a sense outside the population, or loses his identity by mixing his blood with that of the natives. The result is the maintenance of a people ethnically distinct from that of the nation exercising political control.
To just what extent such control is necessary and effective constitutes a difficult question. It cannot be denied that the export from many colonies is far greater than would be the case if these had remained independent. The naturally rich country of Haiti is far less valuable to the industrial nations than the poorer island of PortoRico.[4] In many parts of the world large agricultural resources are unavailable because owned by uncivilised nations or tribes maintaining their political independence. Indeed, if an immediate increase in production and export were the only factor to be considered, a government of all tropical America by a capable industrial nation, like England or Germany, would be of distinct advantage. Other considerations, however, do enter. Even a semi-efficient nation, like Chili or Brazil, gradually establishes order, secures foreign capital, intelligence and labour, and develops its resources. As opposed to Europe, the United States stands in its Monroe Doctrine for the principle that Latin-American countries, if left independent, will in time develop, and that a slow evolution may be more advantageous to the world than a more rapid exploitation under foreign dominion.[5] Ultimately, however, the capacity of the nation to utilise its resources does constitute the test which decides whether it shall retain independence or become subject to foreign domination. It is this test which is being applied to-day to Mexico and certain other Latin-American countries.[6]
As yet this imperialistic régime is in its beginning. Food and raw materials are still mainly derived fromindependent nations and from temperate, settlement colonies, in which production is not affected by political control. The major part of the food-stuffs imported by Europe come from Russia, the United States, Canada, Australia, the Argentine, the Balkans; cotton comes chiefly from the United States; wool from Australia; hides from the Argentine; copper, coal, wood, oil from countries of temperate climate. More sugar is actually produced in temperate than in tropical countries, though the export from tropical countries largely preponderates. Thus the external commerce of the specifically tropical countries subject to imperialistic rule is small compared to that of temperate countries exporting raw materials. India with its developed agricultural system exports only some $500,000,000 of food and raw materials[7] (in excess of its imports of like commodities) or about $1.55 per capita, while the per capita exportation of Roumania is over ten times as great, of the Argentine about twenty times, and of Australia forty times.[8]
If the present commerce with tropical countries were not to increase, the new tropical imperialism would have but a slender economic base, and it might well be questioned whether it was worth Europe's while to govern hundreds of millions of yellow, brown and black men in all parts of the globe. But the English colonies in America, two hundred years ago, also exported little, and a similar immensity of growth may be expected from the commerce of tropical countries. "As civilisation advances and population becomes more dense," writes Mr. Edward E. Slosson,[9] "the inhabitants of temperate zonesbecome necessarily more dependent on the tropics. Where the sunshine falls straightest and the rain falls heaviest there the food of the future will be produced." Cacao, coffee, copra, cotton, rubber, sugar cane, bananas and other fruits are all becoming increasingly important in our consumption, and these and other raw materials are the product of a scientific exploitation of tropical regions.[10]
More and more the West-European nations, as also the United States and Japan, are realising these immense potentialities. Into many tropical countries, new crops are introduced, experiment stations established, railroads built, agricultural machines imported and efforts made not only to bring new lands into cultivation but also to increase the output of older lands. The experimental spread of cotton culture is a case in point. In 1902 the British Cotton Growing Association was created to promote the growth of cotton in British dependencies. The fibre is now being raised in Egypt, Northern Nigeria and Central Africa, while the possible output of West Africa, it is claimed, could supply all the mills of Lancashire. An ample supply of cotton for many decades to come seems reasonably assured.
The gradual filling up of the temperate zones emphasises the immense future possibilities of the tropical regions. According to Mr. Earley Vernon Wilcox, the total land area of the world is about 52,500,000 square miles (of which about 29,000,000 are considered fertile) and of this total area about 15,000,000 square miles are to be found in tropical and sub-tropical regions. "In 1914, the United States imported tropical agricultural products to the value of $600,000,000," and the exports from Ceylon, Brazil,the Dutch East Indies, Cuba, Hawaii and Egypt were enormous. "The control and proper development of the Tropics" writes Mr. Wilcox, "is a problem of tremendous consequences. Year by year more tropical products become necessities in cold climates. This is apparent from the mere casual consideration of a list of the commonly imported tropical products, such as cane sugar, cocoanuts, tea, coffee, cocoa, bananas, pineapples, citrus fruits, olives, dates, figs, sisal, Manila hemp, jute, Kapok, raffia, rubber, balata, gutta-percha, chicle and other gums, cinchona, tans and dyes, rice, sago, cassava, cinnamon, pepper, cloves, nutmeg, vanilla and other spices, oils, such as palm, China wood, candlenut, caster, olive, cotton, lemon oil, etc."[11]
In estimating the value of the economic gains to an imperialistic nation, a moralist might be inclined to introduce other factors. The problem whether a political subjection, which is of the essence of imperialism, is or is not justified raises an uncomfortable question in ethics. However carefully native rights are safe-guarded, these subject races are forced to obey a foreign will not primarily for their own good but for that of the sovereign power. Several industrial nations, above all the United States and in second instance, England, have undoubtedly embarked upon imperialism with a truly missionary zeal for the welfare of the natives. On the other hand, the twentieth century outrages in the Congo were almost as bad as the cruelties of the Conquistadores in Hispaniola and Peru. Even in well-governed countries, like Egypt, the introduction of European legal systems has resulted in the expropriation of innumerable small property-holders, while the increase in population, due to better economic andsanitary arrangements, has led to an intensification of misery. To what extent the averagefellahof Egypt is better off than under the reign of Mehemet Ali or of Ismail, how much the Jamaican poor are more prosperous than the poor of Haiti is at best an unpromising inquiry. On the whole, there has doubtless been improvement. In Africa slave-catching has been abolished, and famine and pestilence circumscribed. But the gain such as it is, has been in the main incidental, the by-product of an exploitation primarily for the benefit of others.[12]
Yet however we discuss the moral question, the problem is determined by quite other considerations. So long as hundreds of millions in the industrial countries require and demand that these backward countries be utilised, humanitarian laws will not be allowed to interfere with the main economic purpose of the colonies. The imperialistic argument is always the same: the resources of the world must be unlocked. Three hundred thousand Indians must not be permitted to occupy a land capable of maintaining three hundred millions of civilised people.[13]The earth and the fulness thereof belong to the inhabitants of the earth, and if the product is somewhat unevenly divided, that, the imperialists assert, is hardly to be avoided. Back of the ethical argument lie necessity and power. Let the backward countries be exploited with the utmost speed; in the centuries to come, we will go into these moral questions at our leisure.
This submission of ethical ideals to economic needs is illustrated in the prevailing colonial labour policy, which reveals with clarity the quality and power of the economic impulse to imperialism. The great industrial nations, having reached the economic stage in which an ample labour supply can be secured without other compulsion than that of hunger, accept at home the ideal of a free labour contract, with a certain protection to the wage-earner. In their colonies, however, though they may wish to be fair to the natives, one form or another of forced labour is generally adopted. An African native, who wants little here below and can get that little easily, is compelled to neglect or surrender his diminutive banana patch or farm and come to the European's plantation or mine, or work for nothing or next to nothing on the public roads. Either this compulsion is exerted by means of a heavy hut tax, the money to pay which can be obtained only by wage-labour, or by stringent vagrancy laws, or by a refusal to allow the natives to become independent proprietors, or by outright expropriation. In some colonies penal labour contracts are enforced, and the miserable native who breaks his agreement is imprisoned or flogged. Credit bondage is also in favour, and no sooner does the native work off his original indebtedness than he finds that he is more indebt than ever. Finally if the natives cannot be compelled to give enough labour, coolies are imported, chiefly from China and India, and after their period of service are expatriated.
Even a more direct pressure is not always wanting. While the imperialistic nations theoretically oppose slavery, and have rather effectively checked the horrible slave trade of the Arabs, they themselves have not always escaped the temptation to introduce slavery under new forms. At various times and in various colonies, thecorvéehas been adopted both for public and private works, and in the Belgian Congo a thinly disguised slavery in its most atrocious form has been adopted. To justify this European slavery, which is infinitely more brutal than was the mild and customary native slavery, the same ethical and religious arguments are advanced as were utilised by the sixteenth century Spaniards in establishing theirencomiendas. The natives, especially in Africa, are lumped together as worthless idlers, and their benevolent rulers are urged to teach these benighted creatures the Christianity of hard and continuous labour.[14] But the real motive is to secure the greatest amount of profits for the investors and of tropical produce for the Europeanpopulations. Whether even from this point of view a less exacting and ruthless labour policy might not be desirable need not here be discussed. What is immediately significant is the immense power of the forces driving European nations into colonial policies, intended to increase the export of tropical products.
Because of this demand for tropical produce, tropical markets, tropical fields for investment, the vast machinery of imperialism is set in motion. Because of this demand, present and future, European armies march over deserts and jungles, and slay thousands of natives in spectacularbattues. To satisfy the needs of European populations and adventurers, millions of brown men toil in the crowded, dirty cities of India, on sun-lit plantations in Java and Egypt, in the cotton fields of Nigeria and Togo. To grasp this imperialism, to realise the big, pulsing, dramatic movement of it, one must view the peons on hennequin plantations, the barefoot Mexican labourers in silver mines, the rack-rented fellaheen in the Nile Valley, the patient Chinese and Japanese toilers on the Hawaiian sugar plantations. One must gain a sense of the dull ambitions and compulsions working on these men, the desire for the cheap products of Manchester and Chemnitz, the craving for liquor, the fear of starvation and of the lash. And as these coloured peoples toil, not knowing for what they toil, other men in London and Paris, in Berlin, Brussels and New York are speculating in the securities which represent their toil. They are buying "Kaffirs" as they once bought "Yankee rails." Seated in their offices, these white-faced men are irrigating deserts, building railroads through jungles and wildernesses, and secure in the faith that all men, black, yellow and brown, can be made to want things and work for things, are revolutionising countries they have never seen. Even these organisers, theseseemingly omnipotent shapers of the world, are themselves only half-conscious agents of a vast economic process not solely desired by a class or nation but dictated by a far wider necessity. It is a process varied in its many-sided appeal; a process which reveals itself in the transfusion of capitalistic ideals by means of little school-houses in the Philippines, by means of the strict and rather harsh justice in British colonies, by means of the unconscious teachings of Christian missionaries, by means of the swift decay of ancient, tenacious faiths. It is a process linking the ends of the world, uniting the statesmen and financiers of the imperialistic nation with wretches in the swarming cities of the East, with half-drunken men seeking for rubber in tangled forests, with negroes searching over great expanses of country for the ivory tusks of elephants, with the Kaffirs in the diamond mines who enter naked and depart naked, and whose bodies are examined each day to discover the diamonds which might be buried in the flesh. At one end of the line are the urbane diplomats seated about a table at some Algeciras, at the other, in the very depths of distant colonies, there is slavery, flagellation, political and intellectual corruption, missionary propaganda, and the day to day business and planning of white settlers, who are anxious to make their fortune quick and get back to "God's own country." It is a process so vast, so compelling, so interwoven with the deepest facts of our modern life that our ordinary moral judgments seem pale and unreal in contact with it. And so too with religion. Christianity which changed in its passage from Judea to Rome and from Rome to the Northern Barbarians takes on again a new aspect when imperialistic nations encounter the peoples they are to utilise. This imperialistic Christianity defends forced labour and slavery as an advance over a mere doing nothing. The parable of the tentalents is the one Christian doctrine in which the imperialist fervently believes.
This modern imperialism, which compels subject peoples to work at extractive industries at the behest of the swarming millions of the industrial nations, which excites, stimulates, urges, pushes, forces coloured peoples to raise bananas and cotton and buy shirts, gew-gaws, and whiskey, is at bottom a movement compelled by the economic expansion and necessity of the older countries. It is an outlet for the pressure, strain and expansiveness of the growing industrial nations, an outlet for industrialism itself. It ranges the industrial nations as a whole against the backward agricultural countries, and binds them together into a forced union, in which the industrial nations guide and rule and the backward peoples are ruled.
But while the industrial nations have a common interest in imperialism, they have also separating and antagonistic interests. Though the nations would prefer to have any one of their number, England, Germany or France, rule all tropical countries rather than go without tropical colonies at all, each nation, for economic, as well as political and military reasons, desires that it, and not its neighbour and competitor, should be the supreme Colonial Power. It is because of this fact that modern imperialism takes on the form of a bitter nationalistic competition for colonies, and leads to diplomatic struggles and eventually to war.