Embargo Retaliation Merely a Bogey

The third of a series of articles demonstrating urgent economic necessity of a pulpwood embargo.

J. HERBERT HODGINS March 1 1925

Embargo Retaliation Merely a Bogey

The third of a series of articles demonstrating urgent economic necessity of a pulpwood embargo.

J. HERBERT HODGINS March 1 1925

Embargo Retaliation Merely a Bogey

The third of a series of articles demonstrating urgent economic necessity of a pulpwood embargo.

J. HERBERT HODGINS

OUTSTANDING among the suggestions advanced by the Royal Grain Commission's report, which was tabled in the House of Commons on February 9, is a recommendation for an export duty on Canadian wheat going to the United States, equal to the United States import tariff of fortytwo cents per bushel against Canadian grain.

It is held by the Commission, of which Hon. W. A. Turgeon, Puisne Judge in the Saskatchewan Court of Appeal, was chairman, that such a measure of “legitimate tariff reprisals" would have the effect of eliminating the export of United States flour ground from Canadian wheat and of transferring this market to the Canadian miller.

“This reprisal would either bring about the removal of the prohibitive United States duty," says the report,

"or compel the United States millers to erect plants in Canada milling for the foreign market in the Dominion.

“As the situation now exists, while the United States domestic market is closed to Canada, the United Slates miller is allowed the advantage of importing Canadian wheat, grinding it into flour, shipping it to the European markets in competition with Canadian flour and then obtaining from the United States Government a rebate of the duty.

"As a result, mills^are being erected in haste on the United States side of the border, notably at Buffalo, N.Y., to intercept the flow of Canadian wheat."

. The situation in Canadian wheat is almost identically the situation in Canadian pulpwood.

The Royal Grain Commission considers an export duty, at least, vital to the Canadian milling industry. It is in the national interest.

Clearly there is abundant reason why the Canadian pulp and paper industry should be likewise protected. What is sauce for the goose is sauce for the ganderI

UNCLE SAM has suddenly become conscious of Jack Canuck’s quickened determination to conserve his forest resources for the fuller and further development of Canadian industry.

The Canadian Pulp and Paper Association’s definite request for a graduated export tax upon pulpwood exports officially expressed at the annual convention in Montreal on January 30—was immediately followed by two protests from competitive organizations in the United States. The National Publishers’ Association fyled its protests with Chairman Borah of the Senate Foreign Relations Committee at Washington, D.C., and two days later the American Paper and Pulp Association in convention at New York adopted a resolution of further protest against any proposal by Canada to tax pulpwood exportations.

The latter resolution urges association members to “use their best efforts with their representatives in Washington to have our Government take such action as may be necessary to protect the interests of the pulp and paper industry in the United States.”

In other words, both of these United States organizations have set out to interfere with Canadian business. Through their own government they planto coerce Ottawa.

Are you a Business Man? What do you do when your competitor commences to “squeal?” Do you follow the beatitudes and turn the other cheek to get it slapped?

Insidious Influences at Ottawa?

'T'HIS is not the first time that the National A Publishers’ Association of the United States has attempted to prevent Canada’s restriction of pulpwood export.

When, in 1923, parliament authorized the Government to place an embargo upon pulpwood, the United States publishers got

very much worked up over the impending legislation. They had the United States secretary of state, Mr. Hughes, take up the matter with Ottawa. Mr. Hughes came to Canada ostensibly to deliver an address to the Bar Association. At Ottawa, in the natural course of events, of course he must have come in contact with members of the Government.

At any rate, there followed the Government’s amazing volte face. On August 14, 1923, the Government passed what has become known as the “secret order in council.”

In complete defiance of a vote, which empowered the embargo—by a majority surprisingly large and including members of all shades of political opinion—the Government calmly nullified parliament’s intention.

“The policy of the country is so weak and undetermined on the question of the pulpwood embargo as to raise grave suspicion that the influences that are at work at Ottawa to shape the national policy are decidedly anti-Canadian,” says the Financial Post.

Nearly two years have passed. Public consciousness in Canada has quickened to the vital need of forest conservation, and the conservation of a Canadian basic industry.

Yet when Canada proposes to pursue what is entirely

her own business, the insidious influences of foreign intrigue propose to undermine the development of our national economic structure.

In the words of Edward Beck, secretary-manager of the Canadian Pulp and Paper Association, the national publishers of the United States are “brandishing the bogey of international hostility,” in an attempt to scare the Canadian government.

The national publishers berate Canadians because we “are trying to force the American operators to move their mills into Canada, where the wood would be transferred into pulp and paper in mills here.” •

Admitted.

Canadians are hoping—praying— to compel this very thing.

Why shouldn’t we? It means the up-building of Canadian industry.

As early as twenty years ago, as an industry, our pulp and paper business was inconsequential. Then, by the foresight of Sir Lomer Gouin, premier of the Province of Quebec, the policy of embargoing pulpwood from Crown Lands was set into motion. Ontario quickly followed.

Wise step!

Out of this policy developed an industry which, in the intervening years, has become one of the powerfully contributing elements to Canada’s more favorable world trade status: an industry employing 29,000 persons and with an annual wage distribution exceeding $38,000,000.

Here is an industry soundly built up out of one of our great national heritages. It is only a phase of every day good business and common sense that we should put forward every possible effort to further its progress.

“In neglecting to close the gates against free export, and letting the present wasteful and extravagant policy continue, Canada will kill the goose that lays the best and largest of her eggs of gold,” asserts the Montreal Star, appealing for an embargo.

Shall Canada or U.S. be Crippled?

THE national publishers of the United States, in their battle cry, advance the argument: “Forest conservation campaign in the Dominion is a plot of Canadian paper manufacturers to cripple American industry and give them control.”

Even if this were wholly true, would it not be one of the first economic considerations for Canada?

If a pulpwood embargo would “cripple” the American end of the industry, obviously it would react as a stimulant upon the Canadian end of the industry.

This outcry from Washington is only true in part: Canadians in their desire to embargo pulpwood hope to entrench the Canadian industry. The reason is entirely logical.

But, “Canadian paper manufacturers have no ulterior motive such as has been ascribed to them,” as Edward Beck sets forth for the Canadian manufacturers. “The last thing in the world they desire is to bring ruin upon the American paper manufacturers and to make it more difficult for their American customers to obtain paper or to prevent the owners of freehold pulpwood in Canada from obtaining a fair American price for their wood.

“But, on the other hand, they view with alarm the rapid depletion of the pulpwood resources of Canada and believe that the time has arrived when this should be conserved to the fullest extent for the benefit of the Canadian people and the continued existence of the paper industries of this country.”

After all charity begins at home.

Clearly the national publishers have adopted a presumptuous, obnoxious attitude —a bullying attitude. Especially when, in their brief to Senator Borah, they menacingly declare:

Continued on page 66

A Nigger in the “Only Ten Per Cent.” Woodpile!

TPHE Canadian Pulpwood Association, which opposes the imposition of

an embargo upon Canadian pulpwood, states that ninety per cent, of our pulpwood is already reserved for Canadian mills: ten per cent, only may be purchased in the open market.

The inference is naturally drawn, and American interests make a point of stressing, that_ not more than ten per cent, of Canadian pulpwood quitting the Dominion can make no drastic drain upon our forest reserves.

The Canadian Pulpwood Association’s statement is misleading. Presumably this statement is based upon the fact that only some ten per cent, of the forest lands of Canada have been alienated from the Crown and that ninety per cent, is still in public ownership.

However, this ninety per cent, of public lands comprises vast tracts of barren and totally unproductive land, while the ten per cent, of forest land already alienated from the Crown embraces the choicest parts of our forests, those most accessible to transportation and to the markets.

No definite calculation has been made as to the amount of pulpwood contained in all the public forests of Canada, and those already alienated. Edward Beck, secretary-manager of the Canadian Pulp and Paper Association, estimates that the ten per cent, of alienated forest lands contains sixty per cent, of Canada’s marketable and commercially available pulpwood.

Protagonists of the embargo assert that this “only ten per cent.” argument appears to have a good-sized leak in it.

Continued from page 17

“It remains to be seen whether the Canadian government will officially participate in so obvious a scheme to cripple American industry and Hereby invite retaliatory measures."

“There is one other aspect of the situation,” the national publishers point out. “That is the effect upon the American public and the Government. What is to be the reaction against an embargo, which is obviously class legislation? Existing legislation, here, makes retaliation a simple matter. The president may impose duties and embargoes under the Tariff Act of 1922. Embargoes on coal, sulphur, and raw materials used in the paper industry are possible. The act also permits the imposition of a duty on paper coming from a country which restricts the exportation of raw materials’ used in its manufacture.”

The plot thickens!

An editorial upon the subject of the Canadian wood pulp situation, reprinted by the Boston American from the Washington Herald, tells us at the outset that “Canada should not put an embargo on pulpwood export.” The Herald argues that a pulpwood embargo would react as a real menace to Canada. Says the Herald'.

“This embargo would simply result in Canada’s ceasing to be the source of this country’s supply.

“We would proceed to develop .the pulpwood lands and water powers of Alaska, which can supply twice the amount of wood now imported from Canada.

“The southern states, also, have tremendous quantities of pulpwood practically untouched. In addition, we could get it from Finland, Sweden, Norway, and other European countries.

“But, important as the immediate subject matter is to the whole American people, there is even a more important and far-reaching aspect to the case.

“That is, since a few monopoly manu| facturers in Canada endeavor to induce their government to take this unwise step, it is not impossible that our people would demand a return embargo on all coal shipments to Canada on the ground that such coal is badly needed in the United States.”

Threats! threats!! threats!!! Big Stick stuff! In short, “Heads I win: tails you 1 lose.”

“What the people of the United States need is a national hall of mirrors, into which they can retire occasionally and get a square look at themselves,” says the Toronto Daily Star, adding, “One of their own newspapers recently said of their foreign or international policy that it seemed to consist of a determination to take no part in anything, although always willing to butt in.

“As regards the present case, it is assumed by the deputation that waited on Senator Borah that they can “force” Canada to continue to export pulp and pulpwood to the United States, whether we want to do so or not and because they want us to do so.

“It is proposed that they shall make us sell them the products of our forests, while in the very act of making us quit selling them the products of our farms . . . they are to do all the picking and choosing.”

Senator Borah, goaded by the National Publishers’ Association of the United States, will bear watching.

“The pulpwood produced in this country is subject to the laws that are made in this country with which our neighbors have nothing to do,” insists the Toronto Mail and Empire. “That the stoppage of the export of Canadian pulpwood to the United States would be embarrassing to the pulp and paper makers of that country is not to be denied, but Congress was not prevented from passing the live-stock schedule of the Fordney tariff by the knowledge that it would ruin Canada’s western cattle industry.

“The framers of the Fordney tariff considered what in their view was best for the United States, and were altogether ruthless as to the consequences to Canadian industry.

“Can our law-makers be expected to put the interests of the United States pulp and paper manufacturers first?

“The organized publishers of the

United States show great selfishness and great reckle|||gs&5 when they go so far as to say that^lllPreadian embargo on pulpwood expofttaïiQh' would ‘certainly result in seriouslÿ'interrupting the friendly relations whteh have so many years existed betweerEáSanada and the United States.’ ”

Can U. S. Afford to Retaliate?

THERE should be none of the spirit of retaliation emanating from Uncle Sam’s side of the fence. It smacks of the absurd: particularly as Uncle Sam, if not the actual creator, is at least one of the world’s foremost apostles of the embargo creed.

Uncle Sam has not failed to recognize the validity of the embargo as an economic expedient. He has not failed to use it whenever it served his purpose—without considering the effect upon other nations.

The Boston Post recognizes this fact. “We are the original, persistent users of the embargo tactics,” admits the Post. “The reason that fine Malaga grapes

were unobtainable in the American market the past holiday season was that the government had put an embargo on Malagas from Spain. Plant bulbs from France, England and Holland have likewise been excluded by the same process. Some years ago, the onion growers of Bermuda were totally ruined for a season by an embargo excluding Bermudian onions from the United States.

“The last time Canada had an abundant potato crop, the American government imposed an embargo on their importation.

“Now with our record how can we consistently protest, when our favorite tactics are turned against us?”

Someone should remind Unclé Sam that people who live in glass houses should never throw stones.

Another article in this series will appear shortly. If you agree, why not write your member and tell him what to do?