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I am urging the Government that they should move in that direction. If we produce, both in this country and in overseas countries, new supplies of food and raw materials which in a certain number of years will come back on to the markets here, we shall have the satisfaction which a shareholder gets when he gets a dividend. That was the point I was trying to make.
We have to go beyond self-interest, too. We must also make every man and woman in the country feel that they are doing something to consolidate Britain and the influence of the British Commonwealth as an independent factor in world politics. I am not one of those who believe that the task is beyond us. I believe we could solve this problem, if necessary, by ourselves alone. But, of course, it will be much easier if we can get others to come in and help us. The biggest source of capital investment today is the United States, and I will say a word about that in a moment. But there is another one on our doorstep, and it may prove even more important.
Western Europe—the great industrial complex of the Rhine Valley, Belgium, Luxembourg, the Ruhr, the Saar, Lorraine—has today idle factories and unemployed workers. These idle factories and unemployed workers are, in a certain sense, capital. It should not be beyond the wit of British statesmanship to devise means whereby they can be harnessed to the great development of the backward territories and more particularly of those in the sterling area.
It certainly would not be difficult to create the machinery. European currencies linked to sterling through a strength- ened E.P.U. would be one step. A European preferential area interlocking with our own might be another. All this would be in harmony with our often proclaimed policy of working in as closely as we can with Europe, short of federation. It would also be a guarantee against the not insignificant danger that the Schuman Plan countries might line up against us. Adding deficits together does not, of course, produce a surplus, but a combination of the resources of the sterling area with those of Europe should enable us in a comparatively short time to bring our trade with the dollar world into balance. Convertibility would then be in sight.
But the moment one speaks of an association between the Commonwealth and Europe, someone comes along and says, "Oh, but you're ganging up against the United States." I yield to no one in my admiration of the great republic across the ocean. We all know that the cause of freedom depends upon an enduring partnership between us. But it must be a partnership between equals. We want to be America's allies, not her satellites, and we do a disservice to the cause of Anglo-American friendship if we hesitate to take the steps which would make us economically strong.
The United States, powerful and generous as they have been, and as they are, need a strong British Commonwealth, just as much as we need a strong United States. In the search for economic strength we have given more than a fair trial to their ideas of multilateral nondiscriminatory world free trade. The experiment has cost them billions of dollars in foreign aid. It has brought our reserves to danger point. The time has now come for a new deal, and I cannot believe the Americans would try to prevent it.
Our partnership rests on much more solid foundations than the fads of economic theorists. We have got to build up a trading area of the sterling countries associated perhaps with Western Europe which will not be autarchic but sufficiently self-contained to enable us to face convertibility with the dollar. Once we get back to convertibility then, and only then, will the way be open for securing the American investment which the Commonwealth so badly needs. A return to that convertibility would be particularly helpful in our relations with Canada. Canada likes to buy from the United States and to sell to Britain. Nothing, therefore, could do more to promote cooperation between us than a return to convertibility.
The essential condition—and this is my last point in what I fear has been too long a speech—of any successful scheme of sterling area co-operation is to carry with us other sterling area Governments. We have to recognise that the primary producers are in a much stronger position today than they were at the time of the Ottawa Agreements. Preferences in the British market are attractive to them, but nothing like as attractive as they were back in 1932.
On the other hand, the sterling area countries are all vitally interested in securing a high level of investment and maintaining the strength of the sterling balances which they hold. How far will they co-operate with us in the policy I have sought to outline? We cannot generalise about the different countries of the Commonwealth. Some will move faster than others. We had an interesting indication, however, of Australian views when Mr. Menzies spoke in the Central Hall at Westminster recently.
As I understood that speech, its meaning was this. If Britain was prepared to take the lead in building up a strong sterling system, with all that this implies, Australia would co-operate to the full. If, on the other hand, Britain was undecided, then Australia would certainly do nothing which might involve her in any friction, however remote, with the United States. This view may well be shared by other Commonwealth Governments, and it points to the fact that responsibility for taking the lead rests here.
It is clear from the Chancellor's speech that the Government have not yet at any rate made up their minds which course they are going to take. Are they going to continue in the sterile paths of cutting consumption to push exports, a policy which seeks to 'redistribute a static limited volume of business? Or will they turn to the Empire and set out on a policy of economic development which will build up new markets for Britain and furnish her with new supplies of food and raw materials?
There is not much time left to make a decision. Before the year is up, Minis- ters are to meet the Governments of the Commonwealth, then the Governments of Western Europe and the new American Government. No good will come of these meetings unless we in Britain have a plan of our own to advocate. There must be a clear British point of view. In this, if we are to save ourselves as an independent unit in the world, Britain has not to follow but to lead.