Federation After the War?

A Frank Talk About the War

Some Events That Went Before—What We Must Do Now

John Bayne Maclean September 1 1917
Federation After the War?

A Frank Talk About the War

Some Events That Went Before—What We Must Do Now

John Bayne Maclean September 1 1917

A Frank Talk About the War

Some Events That Went Before—What We Must Do Now

John Bayne Maclean

EDITOR’S Note.—This is the second of the series of article» by ('oI. Maclean on the war and on conditions arising out of the war. There is but one object behind the series—to tell the truth without a palliative or restriction so that the people of Canada will know what the situation is and what we must do to face it. This is a time when straight thinking and plain talking are necessary to clear the national vision of the fog of false optimism.

SOME time ago I pointed out that our national obligations approached $2,000,000,000. It was regarded by many as pessimistic.

Last week the head

of one of our largest

financial institutions gave me figures that had been compiled for him. They are staggering—$4,500,000,000. This means, we are sending out of Canada $180,000,000 a year—$500,000 every day—interest alone on our borrowings. Half this amount, he figured, was wasted, through incompetence and politics; in railway building, unnecessary duplications, municipal and other enterprises—fancy pavements, sewers and sidewalks, on miles of unoccupied streets,. public ownerships.

Add to this the war taxes, now in sight, and it looks like every head of a family paying $250 a year out of his wages or income for these purposes alone.


P'VER since September, 1914, when it was evident they were incapable of grasping the frightful situation facing us, I have argued persistently for a reorganization of Imperial and Canadian Governments. To take in the outstanding men, who had proved, by their careers, they had the capacity to understand; to do big things; and to get big things done. These are, of course, not the only men in the Empire with great executive ability. There must be thousands of equally good men, but they have not yet proved themselves. This is not the time to try or train them. The situation is too urgent, that we must call in, only our proved men, for our big jobs.

All the information I have leads to no other deduction than that, if there had been resourceful, practical business men, men who had worked their own way in the world, at the head of affairs in the various nations instead of dilettante diplomats and the hereditary, idle rich, weak politicians, there would have been no war with its frightful waste of life, suffering and loss of property. If, in England, we had had a Government of Lloyd Georges, instead of the Asquith-Grey-Churchills, and their favorites, things would ha up moved intelligently, quickly. We would not always be too laie. The war would have been over long ago. The delays gave Germany time to prepare for the greater struggle. The Kaiser has used his greatest business men. They had two years' supplies in store The

As Sir George Paish recently pointed out in The Statist, the continued failures of our leaders—though backed up by our magnificent armies and navies, aided by the poor strategy of the Germans—are shockingly disgraceful reflections upon our capacity, considering our superiority in men and money. Prof.

Ogg places this superiority at 977,929,875 in population as against 177,964,200 for Germany and her Allies, and our wealth, as $415,000,000,000, against our enemies’ $113,000,000,000.

criminal neglect and cowardice, of the British ministry, enabled them to lay in another three years’ supplies. For example, at a most critical time in 1915 the inner British War Cabinet did not meet from March 19 to May 14. Lloyd George’s cabinet sometimes has three meetings in 24 hours.


AND, the worst feature of all, is that the two nations — Britain and Germany — which least wanted war will suffer most The nation that inspired the hrar—Russia—the on y important possible enemy at that time CNUBOB to both, will g sin moat ; and now dro is out and leaves us to our fate. Russia is the o n e_^ country that has

country shown real cleverness. She cultivated France and through France secured British interest—borrowed our money drew us into the alliance. She actually turned millions of Engli ah funds, that were flowing steadily into Canada, into Russian channels. Of this I have personal knowledge I will give some » letails in a future issue. She had England working enthusiast] sally for her long before the war. She mesmerised the guileless Asquith, and that cocksure incompetent Churchill. She wanted her wheat out through the Dardanelles. Churchill, going sontrary to all expert advice, and without waiting for Cabinet i auction, personally wired the Czar that Britain would força 1 he Dardanelles, That Russia had little faith in the outcc me was proven by a letter received by one of their own officials ordered temporarily to Toronto in 1915-16. This letter aleo sta bed that Russia planned to have their own port in the Medit» raneen, that they could not trust Britain or France to give tl mn the Dardanelles. Their army was working round. Alea ndretta was the port selected. This was weeks before any w« d came of that army, which did so well for a time. Shortly" affa r in an article I wrote for The Financial Poet, Canadians were warned, to go slow in their business dealings with Russia, whid i might ere long make a separate peace.

Do not misunderstand me, I am not referring to the Iresent Government of Russia and I have not said that Russia itgrted the war. Germany did. Germany forced the war. SI íe probably decided on it in 1912. She forestalled Russia by os s year. Whether Russia intended to fight I cannot say. Wheth r Germany was wise in starting I doubt. Bismarck was once ashed, whether, in case Russia and France formed a combi lathm, would Germany attack first. His answer became famous Condensed it was “No.” Further, German swelled-headedne «, her sffensiveness, the domineering brutal way in which MM dealt with Russia, when the latter was weak, may have n her ample ground for preparing for war. Still further, Briti in did the only possible thing in going into the war. We had to go in, and we have to stay with Belgium and France to the end^ We are victims of a rotten political system.

But I had promised to give more of my Eux^pean experiences leading up to the war.


IT was in 1909 or 1910, I think, man, called on us in Toronto.

name, but it is near enough to be recognisaM i, by those who know him ; and he and his brother are particularly well known in Parisian social and f nanMal life. He had a letter of introduction fri m a Financial Poet subscriber, the head office of a 1 'aris bank, of which he was a director. He had com out to look into what promised to be, a very profitabl s investment. Those he represented, Belgian as we 1 as French, were, if my memory serves me currertly, prepared to buy $2,000,000 of securities; which hey intended, eventually, ins was their practice, to m warnend and resell, to small investors. He desir« i to have my opinion. I told him I did not know anytl ing about the merits of this proposition, though na .rly all enterprises of this kind had been very profitable, but, that, while I knew well and liked the men he was negotiating with, I had no confidence in their financial capacity, and disliked the methods they employed in raising capital. They were young, inexperienced, promoters, but not business builders.

I pointed out that no one connected with the concern had a record of success; and much more of a similar nature. I recall that, indirectly associated w’ith them was a financier who was using the late J. P. Morgan, as a reference, but whose methods were not according, to best banking precedent, though some of his critics have since adopted some of them.

B— returned in a few days and said that, though very extraordinary favors had been promised him, he had decided not to take advantage of them. In fact the offensive attitude of the promoters toward him, when he decided to withdraw, caused him to express very great gratitude to me for saving him. They raised a great deal of money quietly among the most cautious investors in Ontario, in sums of $5,000 up. One capitalist told me he put in $100,000, and another I heard of, $250,000. Every cent was lost, I believe. The property went into the hand« of creditors, and soon after, one of the trustees told me, that some very interesting correspondence had been found, and safely deposited in Trust Company vaults. It referred to one of the promoters, a brilliant young man, who had proved so successful in manipulating men. It showed that he and his wife were to settle in Ottawa, and given a liberal supply of spending money, to entertain and manipulate such Legislators as were approachable Tor public grants and concessions. The scheme was never carried out because the chief promoter came to grief and some of his associates had to leave Canada. I

wrote B-. He was very grateful and expressed a great

desire to be of service to me.


rl ' HE opportunity came in 1912. The business and financial

situation was most puzzling. In Canada, we were very prosperous; and a leading banker had said we were on the threshold of two years of the greatest prosperity in our history. Nothing could stop us. In New York and London I found no such optimisim. Instead, some of my friends, who were large holders of securities, told me they had got out of everything they possibly could. They were all nervous; some of them panicky as to the future. No one of them would, or could, tell me, or knew, why. It was in the air.

. I arrived in Paris in July that year, and I was at breakfast

in the garden of the Ritz one morning when B-and another

man came in. Seeing me he came over at once, greeted me most cordially and wanted to do all sorts of things for me. -I said there was one thing on which my readers in Canada did want his assistance very much. I asked:.“What is ahead of us? Is there to be war?”

He at once replied: “There will be no war for three years. That was settled yesterday. The man I am breakfasting with is -, the-.”

He named and gave the official position of a man who occupied a very important place in the public life of France—a name prominent in the early days of war, but seldom heard now. That was all I got, and it left the impression on my mind that some frîéndîy arrangement had been entered into with Germany. I left for Berlin that night and had no opportunity of learning

anything more. It was coincidence that B-’s friend was

on the same train. It was not until a year later, that I learned what had been settled on that momentous day, the July before. This I first got from my Swedish diplomatic friend, referred to in last month’s article. Afterward it was a matter of common gossip. The story was that Russia Tiad played upon France to make agreement whereby the French people were to lend $100,000,000 to Russia; to begin intensive war training of her citizens, and to make such other preparations^hat by 1915 she would be at her maximum of power for war. Russia was to expend the French borrowings on railways, up to, and along, the Russo-German frontier and to make other preparation.-. By July, 1915. they would be ready for any emergency. Remember, this was not the Russian Government of to-day. This is a story few people in this country are inclined to believe, and there is not space in this issue to give more details. In the meantime, in further confirmation there is on record the report of a British officer written from Bulgaria in 1912-15; where he says “everyone knows Russia and France are get ting ready to attack Germany.”

Germany evidently heard of the agreement, for a few weeks after she began the preparations for this war. There was no secret about it. The tremendous increase in her taxes, for this purpose were known everywhere. But our weak, helpless, impractical Imperial Statesmen did nothing to avert or prepare for the coming struggle.

From Berlin in 1912 I went to Karlsbad, Bohemia—my European objective for some years. The Bohemians are a simple, delightful, very hard working people, in, but with no sympathy for, the war. Along with my second-in-command and a number of my N.C.O.’s and men of that splendid little corps, the 17th Canadian Hussars, I had fallen a victim to typhoid fever in 1901 at Pt. Levis, where we had been sent for escort duty to meet the present King on his official tour of Canada.

Flee taken from a local pond carried the germ. Karlsbad has for hundreds of years been, not only the greatest human repair shop of the world, but, is the one place, where the after effects of typhoid are most successfully controlled. The radiumbearing waters when drunk, inhaled, or bathed in, have worked wonders on suffering humanity.


THAT year I had two interesting experiences with an important bearing on subsequent events. I did not properly understand them then.

Baths are usually engaged for the same hour each day. It is important to be on time to avoid encroaching on the bather who follows. One day I was kept waiting over fifteen minutes. It was particularly exasperating as I had an engagement which necessitated my shortening my time. When the offender came out, I saw he was a newcomer; and to avoid further delays, I told him, as politely as possible, that it was the practice to be through within the hour. Much less courteous than I tried to be, he told me he did not appreciate my information. Then we both got angry, and continued to call each other names while I undressed, and until I slammed the door and jumped into the bath. When I came downstairs, I asked the little Bohemian girl, who arranges the schedules and sells the tickets, and who I had long ago learned was a very excellent clearing house of general information, who the offensive bather was. She said he was the King of Bulgaria, and she further explained that he took a month's “cure” each year and always insisted upon that particular bathroom from 10 to 11 a.m. I suggested that she warn him. Next day, though I was early, the bath was vacant. Again I had recourse to my little friend. She said, the King had been recalled in great haste, because of some political trouble at home. She thought it very strange as he had made all his plans for a month’s stay.’

The trouble was the Balkan war, which began a few weeks later. Whether the Paris agreement precipitated it, I do not know’, but it is a fact that the primary manipulator was a nervous, restless, dyspeptic Irish schoolmaster, who, broken down in health, dropped into Bulgaria, seeking it. Like the American, in Rev. Dr. Hanay’s “General John Regan,” things were too quiet to suit him; and he just naturally drifted into local politics. He got King Ferdinand going, but his Prime Minister would not let him start anything for fear of Greece. The Irish schoolmaster told him not to w’orry, he would fix that. He took the first train to look over Greece, found Venezelos, an able, ambitious, rising young politician, living in a little island and quite unknown. Like an illustrious character in Biblical history, the Irish schoolmaster took his victim up into a high mountain,..and pointed out country that might be his. The inspiration worked more successfully than the irrepressible schoolmaster’s best dreams. Back he rushed to Bulgaria and suggested a scrap with Turkey. I would like to add—and I am writing from memory—for the information of any of bis old boys who may possibly read these lines, this Irish walking delegate was J. D. Bouchier, and he was classical master in a famous English puolic school.

Continued on page 66

A Frank Talk About the War

Contitiued from page 38

AMONG my most valued acquaintances is an Austrian banker, a Jew. His name is seldom heard outside of Europe; but one of the great international bankers told me that in his grasp of the financial situation, he was regarded as the soundest man in Europe. The Canadian Pacific had begun that year, the running of an observation train in Austria. My friend was unusually interested, not in the C.P.R., but in the Grand Trunk and the Canadian investment situation as a whole. He asked many questions. I remember telling him that as long as the control of the G.T.R. remained with such men as Sir Rivers Wilson it would foe unwise to put any money in its securities ; but that, under capable management with a Canadian directorate, with politicians letting it alone, its underlying securities ought to be safe and should improve greatly in value. I saw that he was deeply impressed. I had given him fully fifteen mihutes straight talk that morning, as we were climbing up over the mountain’s path on our way to breakfast in the valley on the other side; and I thought it was time he reciprocated and told me something. He was a very quiet man, always under perfect control. I have seen him entertaining at dinner without saying more than a few w'ords all evening. I asked him to tell me, what I most wanted to know. What was on the other side of the stone wall, that always stopped my inquiries, as to what was ahead of us financially. He stopped, turned on me suddenly. He became excited. He was dramatic, impressive. He seized me by the lapel of my coat and albiost hissed:

“The outlook is very, very bad, we are going to have a severe money stringency."

As quickly he regained control of himself. He had given me the information I sought. I had absolute confidence in him. He had passed the extcitement on to me. I had learned something of the greatest importance.

Shortly after I conveyed the information to our readers in the columns of The Financial Post, August, 191(2, I think. The article urged immediate preparations for strenuous times ahead; to collect and save; to stop borrowing; to stop extensions to buildings and plants. It was decidedly unpopular. It w'as against the preconceived opinions and wishes of our readers. The stringency came sure enough. It hit our real estate friends very hard. But, we of the business and financial press, are the specialists in journalism and are paid to give the real facts, as far as we can get them, whether they are favorable or otherwise to ourselves or our readers. In these times, particularly we gather and publish many unpleasant truths. j

It was this same Austrian Jew, who, in Berlin, on July 25th, 1914, gave me the first definite, accurate, information that a general European war was certain, that only a miracle could stop it; that he, with others, were then engaged night and day doing all they could to turn aside such a fearful catastrophe. Further, he said he did not see how we, the British, could keep out of it.

I HAD promised, my next door neighbor, Sir Henry Pellatt, to cable him personally if I got any definite news on the situation. I wrote “Outlook very bad; general European war certain.” On my way to the office of the Adlon Hotel,.with the message in my hand, I encountered F. W. Wile, whose series of articles on Germany appeared some years ago in MACLEAN’S MAGAZINE, and another acquaintance, the head of a Franco-American banking house, and we all sat in the garden to discuss the situation. .They were more optimistic. The Kaiser was in the wilds of Norway, where he would not have gone if any crisis was imminent. Von Moltke was at Karlsbad. As a matter of fact he returned that day and the Kaiser the next. A few' nights after, I said goodbye to Wile and I left for Ostend. Twentyfour hours later Wile was locked up dn Spandau with a battered head inflicted by the Adlon’s maître d'hoteL Wile was supposed to be English, but proved he came from Indiana and was released about four a.m. by U S. Ambassador Gerrard going personally to the fortress and carrying him off in safety.

My cable, slightly amended, was given to the operator, who insisted on charging 75 cents a w'ord to Toronto. Some later cables I sent from outside the hotel, and was charged much less. On inquiry I found that the only rate they knew at the Adlon was to British Columbia. To them Canada was B.C., for to B.C. went many cables from Berlin. Our old friend Baron A Ivon Von Alvon Sieben, of Vancouver. I had learned in Berlin the year before, had made millions for the Kaiser and others in the Court Circle. One young man was pointed out to me who had come home with $4,000,000. Many of their cables had gone through the Adlon’s operator.

JUST after I had completed this article.

I read that Sam. Carter, a socialistlabor leader, who represents in the Ontario Legislature, one of the most important manufacturing and farming constituencies. in a public address said that ue should form a war cabinet of five or six of our ablest business executives to organize and conduct our affairs. Mr. Carter’s speeches remind one of Lloyd George. He seems to be a man of superior ability and independent thought. He said he was born in England, brought up in poverty, hates war; but we are in and can’t help it, and the shortest and most effective way out is to give the job to the men who know how, not to the present politicians.

Last week, chatting with one of the most successful Montreal financiers, a man who has made an international reputation among bankers and industrial leaders, he said exactly the same thing to me. He spoke for the so-called big interests.

Here we have two extremes in the life of our country. Their opinion is worth while. They are in perfect agreement. They show the Prime Minister—now in complete control of our national affairs— the way the country first wants him to go. The way he would have taken long ago but for the helpless associates a party government system forced upon him.

Professional politicians do not know how to deal with th* public. Could anything be worse than*he Quebec conscription situation which may develop, unless firmly and tactfully handled, into the most dangerous that has ever happened in Canada? It is the direct work of small politicians. Suppose that, instead, our national affairs had been directed by big business men like the tàctful Irish Roman Catholic Shaughnessy and that dictatorial, but extremely able. Methodist Flavelle. Let us have expert leadership and we increase the hope of defeating Germany and of arranging such a peace as would ensure Canada becoming one of the most prosperous countries in the world. If we don’t the outlook is too gloomy to contemplate. Our soldiers are doing their share for Canada and the empire gloriously. Our leaders at home are doing their work damnably. Will they, by their neglect to call in experts, forfeit the aims for which our young men are shedding their blood?