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Ottawa is scarcely less a royal capital than London. Officially George V is styled "By the Grace of God, of Great Britain, Ireland and the British Dominions beyond the Seas, King." He is therefore in fact King of Canada though never addressed as such. In Canada His Majesty is represented by Governor General the Earl of Bessborough. In Ottawa sedate Lord Bessborough sits on the "Crown Chair." In Rideau Hall he holds a vice-regal reception at which Canadian ladies are "presented." He flies a symbolic flag with a blue field on which appears a gold crown.

The Earl of Bessborough is not so much interested in gold as in diamonds, railways and margarine. When appointed Governor General of the Dominion of Canada he was board chairman of Britain's gigantic Unilever Ltd. (margarine), chairman of Brazil's coffee-carrying San Paulo Railway, deputy chairman of De Beers Consolidated Mines (South Africa), a director of some 30 other corporations. Thus His Excellency is a Big-Business Governor General. Last week he prepared to open for His Majesty in Ottawa a Big Business meeting, the Imperial Economic Conference.

Problem. As no one knows better than Lord Bessborough, the Mother Country is a comparatively small, densely populated manufacturing area. The dominions, on the contrary, are comparatively large areas, rural and sparsely populated but with "infant industries" of which they are proud, hopeful. Since the Mother Country is suffering from unemployment (many of her plants being closed), and since the dominions buy a great deal of manufactured goods from outside the Empire, cannot an imperial agreement be made for the dominions to buy proportionally more manufactures from the Mother Country and for her to buy proportionally more raw materials and food from the dominions?

Such in essence is the problem, complex and stupendous, which called into being last week the Imperial Economic Conference.

"Best Customers." In nearly all past years the U. S. has been Canada's best customer, and vice versa. Why should she buy English motor cars when Detroit is so near? Surely the U. S., where there is also unemployment, is the ideal and adjacent place in which to fulfill Canada's manufacturing needs. Unfortunately for the U. S. things are not so simple as that.

There is the U.S.'s sky-high Hawley-Smoot Tariff, to the enactment of which Canada retorted with retaliatory tariffs (TIME, Sept. 29, 1930). Already this mischief, furthered by Depression, has gone so far that U. S. exports to Canada have fallen thus:

1929 $948,446,000
1930 $ 659,094,000
1931 $395.648,000
1932 (1st quarter) $78,232,000
Simultaneously Canadian exports to the U. S. have fallen thus:
1929 $503,496,000
1930 $402,350,000
1931 $266,297,000
1932 (1st quarter) 48,478,000

To put it baldly the two "best customers" have been growing steadily worse. Result: a degree of Canadian irritation at the U. S. (shared by other Dominions) which is favorable to success for the Imperial Economic Conference.

Cross Currents. Why should Canadians buy either English or U. S. motor cars when they can buy such things as Mc-Laughlin-Buicks built in Canada by the Dominion affiliate of General Motors? Why should Australia buy British steel when she has expensively erected a mighty steel plant to fabricate her Sydney "Dream Bridge," now complete (TIME, March 28).

And why should the Mother Country antagonize so huge a buyer of her manufactured goods as Argentina by agreeing to buy Canadian in preference to Argentine beef? The King's subjects have invested over $1,500,000.000 in Argentina. Dare they antagonize that Latin American government? Dare they risk reprisals which could be launched against $1.500.000,000 of British property actually in Argentina? And what about Brazil? What about the Earl of Bessborough's own coffee-carrying railway in that South American state?

Multiplied by myriads such perplexing trade factors as these will give the Imperial Economic Conference plenty of hard, sweating, secret work.

Secrets & Farmers. That the Conference proceedings will be as secret as British ingenuity can make them was frankly stated by the Canadian Government last week. Rich & pious Canadian Premier Richard Bedford Bennett based this course upon the precedent set and stated by the Imperial Conference of 1923. "that at meetings of this nature, where questions of high policy and of the greatest consequence to all parts of the British Commonwealth are surveyed and dealt with, it was of the first importance that the representatives present should feel able to speak among themselves with the utmost freedom and in a spirit of complete confidence."

Days before the Conference met last week, Ottawa swarmed with lobbyists and dickerers from all parts of the Empire and the world. Some 5,000 farmers from Ontario and Quebec were marching upon Ottawa. They proposed to meet in monster caucus, formulate demands for measures to enhance crop prices, present these demands to the Conference.

Conference Agenda. Canadian Premier Bennett, a Conservative closely allied with Conservatives of maximum wealth in Great Britain, was personally responsible for bringing to Canada his Big-Business friend the Earl of Bessborough as Governor General. Lord Bessborough is the first vice-regal occupant of Rideau Hall to have been chosen by George V on the advice of a Canadian premier. He is the fourth Irish peer to be Canada's Governor General. As a businessman Lord Bessborough was said last week to have collaborated in drafting the "Provisional Agenda" which Premier Bennett made ready for the Conference after consulting all His Majesty's governments in all parts of the British Commonwealth.

The agenda heads are:

"A. — General Trade Questions.

"1) Examination of aspects of general trade and tariff policy and administration affecting Empire trade. . . .

"2) Commercial treaty policy with respect to foreign nations. . . .

"3) Consideration of the appropriate means of effecting inter-imperial economic cooperation. . . .

"B. — Monetary and Financial Questions.

"Consideration of existing interrelationships of the various currencies and monetary standards of the Empire and of the desirability and feasibility of taking steps to restore and stabilize the general price level and to establish exchange.

"C. — Negotiation of Trade Agreements."

Aquatic Conferences. After crossing the Atlantic last week, delegations representing 1) His Majesty's Government in Great Britain, Northern Ireland & the non-self-governing parts of the Empire (India, Colonies, Protectorates, Mandates); 2) His Majesty's Government in South Africa landed at Quebec; 3) His Majesty's Government in the Irish Free State landed at Montreal. The delegation of 4) His Majesty's Government in Newfoundland came by coastal steamer. After crossing the Pacific, delegations representing 5) His Majesty's Government in Australia and 6) His Majesty's Government in New Zealand landed at Vancouver.

Naturally the No. 1 delegation is paramount, representing 430,000,000 people out of the total Empire population of 450,-000,000. The No. 1 delegation is headed by Lord President of the Council the Rt. Hon. Stanley Baldwin, Leader of the Conservative (majority) Party in Great Britain. With benign, bumbling, pipe-puffing Mr. Baldwin came lean, hawk-nosed Chancellor of the Exchequer Neville Chamberlain; dignified President of the Board of Trade Walter Runciman whose batwing tie is always straight; undignified Minister of Dominions James Henry ("Jim") Thomas who drops his h's; other delegates, secretaries, stenographers to the number of 130. Prime Minister James Ramsay MacDonald's younger son, tooth-brush-mustached Malcolm MacDonald, came as the delegation's press contact man.

On both oceans and on various liners the delegations held aquatic conferences last week, preserving the tradition of secrecy. First chief delegates to land (at Vancouver with a total of 60 persons, some representing the Fiji Islands) were former Premiers Joseph Gordon Coates of New Zealand and Stanley Melbourne Bruce of Australia. Cocky Australian henchmen embarrassed their rich, cultured, suave Mr. Bruce by crowing, "You can take it this will be a Bruce show!"

"Canada is 35 times as large as New Zealand," said New Zealand's Coates. "and let us hope her heart is proportionately generous." His Majesty's Lieu-enant-Governor of the Province of British Columbia, plump, guttural J. W. Fordham Johnson, sped the delegates to their train for Ottawa. Croaked he: "Anything short of success at this Conference might well have unthinkable results!"

Next chief delegate to land (at Montreal) was Vice President Sean Thomas O'Kelly of the Irish Free State. Bristling, he told Canadian newshawks that, in view of the Free State's present quarrel with the Mother Country, his delegation had no hope of reaching an accord with the No. 11Delegation at Ottawa but hopes to sign accords with the dominions.

The Nos. 1 and 2 Delegations & passengers aboard the Empress of Britain did not panic when a fire broke out while Chief Delegate Stanley Baldwin was appealing for contributions to the Seamen's Orphanage Fund. ''That ends the program," said Mr. Baldwin serenely when the flames leaped, to be quickly quenched by extinguishers.

Ten hours later the Empress of Britain was in exciting collision with the Briarwood, freighter, but no great damage was done and the Empress docked at Quebec only eleven hours late. Right royally welcomed and lustily cheered the Delegations entrained for Ottawa.

In Ottawa tart-tongued John Bromley, Council chairman of the Trades Union Congress of Great Britain (representing 3,700.000 workers), sounded off before the official Delegations arrived: "Why not set up a permanent secretariat to continue into the future what few tottering steps this Conference may take?"

"Disillusion Must Result." Exuberant over the prospects at Ottawa seemed Britain's "Press lords," Baron Beaverbrook and Viscount Rothermere, whose Hearstian papers have a joint circulation of 10,000,000 in the British Isles and who have plugged blatantly for years in favor of something called "Empire Free Trade." Serenely last week Sir Arthur Salter, British economist famed in the U. S. for his scholarly best seller Recovery—The Second Effort ($3), observed: "The misleading phrase 'Empire Free Trade' has caused much confusion in the English public mind. . . .

"Too many Englishmen, though not of course those in closest touch with the situation, think that the basis of negotiations [at Ottawa] will be a free entry for Dominion food and raw materials into the United Kingdom (with tariffs against foreign countries) in return for a similar free entry of English manufactures into the Dominions. This, of course, is a complete illusion. Canada, Australia, South Africa and India, especially the first, have all become largely industrialized on the basis of tariffs, and they have no intention whatever of allowing effective English competition with their industries. . . .

"Disillusion must result."

Sentiment is after all the chief tie which still unites the nations of the British Commonwealth. Soon after he stepped upon Canadian soil Lord Bessborough struck the note that must and will be sounded again & again during the Imperial Economic Conference. "I feel," said His Excellency, "that our interests are being more closely linked day by day." This sentiment may surmount Irish hatred, Indian passive resistance and Dutch-begotten South African suspicion of the Mother Country.

Ottawa, at the very least, will present a Royal pageant: the Governor General in his twinkling car (with a gilt crown, in lieu of license plates, projecting from the roof in front) sweeping up Parliament Hill; the blare of trumpets, salutes and the opening of the Conference by His Excellency in the Parliament Building; the singing of "God Save the King"; state dinners at Rideau Hall, informal dances at the Royal Ottawa Golf Club and Their Excellencies' Garden Party—all these will suggest the pomp of London (pop. 8,000,000) in Ottawa (pop. 125,000).