The Fight for Empire Unity
“And now the real object of the Conference—preferential trade—is being sidetracked by theorizing about currency"
J. B. MACLEAN
THIS series was inspired by fears that the work of the Empire Conference might be made difficult for the Empire and for Canada in particular by misunder-standings and by further desperate efforts of powerful foreign interests in our midst to create trouble and prevent agreements.
Recently 1 read a statement by Viscount Lymington referring to the unfortunate conditions in agriculture in England. He says that the problem for the politicians to decide is whether to take immediate action or, “whether we shall continue to slither down the slopes of financial bankruptcy, which the policy of the last twenty years, based on the international interests of the middleman, has made for us.”
The original idea of the Conference was to work out a basis of mutual preferences, and to adopt at once as many of these as possible. These, it was hoped, would lie settled by practical men in advance of the gathering. There were to be no constitutional or status questions. Theorists and debaters who have encumbered previous conferences were positively to be left at home. The nominal business of the Conference was formally to adopt the agreements previously arranged. The real business was chiefly social; a clan gathering that we might know each other better and hence work more closely together, commercially, in future. No stxiner were preparations under way and going smoothly however, than our great hopes were disturbed.
Mr. Thomas gave us the first shock. As head of the Dominions Department in London, he was to preside and to give cordial leadership. Instead, he began talking offensively and aggressively; making demands for great concessions and sacrifices from the outlying parts of the Empire in view of all that the Mother Country had done for them. Advance propaganda, no doubt; bluff perhaps, but dangerous strategy. He had many supporters in Canada as well as at home who, unfamiliar with the facts, sincerely believed he was justified. As far as the greater number of Colonies was concerned, he probably was. The Mother Country is still spending large sums, by way of grants or loans from the Treasury, to aid them. But that money has probably been a good investment. Within the last ten years, with British foreign trade falling off heavily, Colonial purchases of British goods more than doubled.
Mr. Thomas had long been a doughty and successful fighter for wage and working concessions for the great Labor Union of which he was head, and it looked as if he were approaching the Conference in the same attitude, an
attitude which Canadians, intensely British as we are. would not stand; and I am sure Mr. Bruce, for Australia, would support us. Such a Conference would become a mere fight for concessions, not an effort to reach friendly agreements.
Recently, activities show that other serious dangers are developing. One of the most successful of Portuguese diplomats told me that, as a young man, he had been greatly helped by Lord Salisbury’s coaching. His most valuable lesson was to raise side issues when affairs were going against him. This is what is now going on. Some one suggested the currency question; an Empire currency. And now the real object of the Conference, preferential trade, is being sidetracked by enthusiastic demands from theorists, debaters and politicians that the chief object of the Conference should be the establishment of an Empire currency. How serious a menace this is can better be understood when it is realized that British finance has not been under British but under foreign control ; that certain much advertised British bankers have beeil merely errand boys for international financiers.
CANADIANS are always shy, particularly with their war experiences in mind, when the English financier takes a hand in negotiations. Academic currency is apparently an intensely intricate problem about which practical financiers seem to know little if anything. I have been writing and have been guiding my younger men to write on practical finance for nearly half a century, but it is not until I meet fourth-year university students or young Rhodes scholars that I realize how ignorant I am; that I really know nothing about currency or its allied phases.
I am still more mystified to find that no two of these experts ever seem to agree. When I ask them some practical questions based on their theories they always answer, “Oh. that is a detail for the bankers to work out.”
I admit that something ought to be done about it just to give them a chance to debate—but not at the coming Imperial Conference. The idea of an Empire currency centralized in England, is exactly what international financiers want: what they have been trying for years to wish on Canada as a step in that direction. Financiers of long experience in Canada believe that, if it were in effect today, it would reduce the value of our dollar to seventy-five cents, based on present conditions. In any event, the preferences already in existence have, over thirty-five years, developed most profitable relations among the various parts of the Empire, and they have never been hampered by Empire currency problems. Our most serious currency problem in Canada today is due to a promoter-financiers' trick under
which we accepted money—often wished upon us for unnecessary developments by propaganda of Government contractors and moneylenders—with principal and interest payable in New York, too often with Government guarantees. These people have inflicted far higher debts upon us than did the war. Today, under an Empire currency, we might have to pay $1.25 on every dollar of the millions we owe to the U.S.A.
That there might be no misunderstanding of the great sacrifices Canadians had made down through the generations to maintain their British connection, with little aid and much opposition from politicians and business interests in the Mother Country, I brought out a few of the high points covering this. Since the articles have appeared, attention has been drawn to other important services and sacrifices on behalf of Empire rendered by Canadians. On the other hand. I have been taken to task by good friends in the Old Country. As I have pointed out, practically all I have written was from memory based on personal experiences and observations, and on what I was told by men who themselves played the leading parts in making Empire history in the last seventy years.
The most important question raised by my correspondents refers to the dependence of Canada upon the British army and navy and the British diplomatic and consular service. In looking for confirmation of what I had written, I find an article in the Nineteenth Century by Sir Charles Tupper, printed in 1891, dealing with Empire Federation, in which he says:
“Many persons, I am aware, both in the Colonies and here (England), have looked upon the question of the defense of the Empire as best promoted and secured by a direct contribution to the support of the army and navy of this country. That I regard as a very mistaken opinion ... I deny that any additional burden is imposed upon this country (England) by the possession of Canada. If the United States could accomplish their desire of having one government from the Equator to the North Pole, and England were left without a harbor in North America into which her ships could enter in time of war, and deprived of her invaluable coal supplies, both on the Atlantic and Pacific coasts, can anyone pretend that she could reduce her army by a man or her navy by a ship? What would then become of her trade with China and Japan, and to what extent might not her Indian Empire be thus imperilled?”
Sir Charles wrote as above forty-one years ago, after over half a century of actual contact with the problems. No
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Canadian was ever closer to them. I wrote from my own information and observation covering the latter half century, particularly in combatting the well-organized, widespread. persistent campaigns across Canada for millions to be sent to England to build battleships. These came not from our good people of England, but from the war salesmen, and they have had the impertinence to ask and to get from thousands of Canadians the money to carry on the propaganda by appeals to loyalty. When this was exposed, they developed nation-wide caml>aigns on behalf of needy sailors. Religion and charity appeals are two old and wellknown tricks through which to spread secret propaganda. It happens that there have been very few suffering sailors. British sailors are such a splendid lot, and they get such a sound training in the navy, that they invariably have the preference when good jobs are going. It happens, however, that we have thousands of deserving soldiers. But has anyone ever heard of any national Canadian or Empire-wide league working in any such way on their behalf? In fact, any suggestion that soldiers be included with the sailors in their campaigns is instantly frowned upon by the battleship propagandists, some of whom may be heard making pathetic appeals, with tears running down their cheeks, for funds for the “poorsailors.”
As to the Diplomatic Services, enquiries among Canadian and Australian business interests will show that it is usually hopeless to ap|>eal to British representatives. Too often consuls are not British at all. I am able to write from my own experiences. In my travels over a long term of years I have been sometimes compelled to seek diplomatic assistance. In cases where I had personally known the British ambassador or minister previously, they were always most cordial and helpful. Beyond these, I have had almost invariably to go to the American, and sometimes the French and Spanish, representatives. I would have been a prisoner, with my wife and son, throughout the war had I depended upon the British Embassy in Berlin. A lucky call at the American Embassy saved us, and the kind influence of the head of the Deutscher Bank passed us in comfort through the German lines as the army was moving into Belgium.
My last experience was at the Economic Conference in Geneva in 1927. I was the only Canadian press representative. There were but four or five British, some forty or fifty Germans, and the same number from France and allied countries. Mr. Cummings and other responsible British press officials put me off for a couple of days. It was quite interesting while it went on. In the end, as usual. 1 had to turn to the Americans, after which, within live minutes, I was given a seat with apologies for not knowing of my presence earlier. Later, when Sir Eric Drummond heard of it, he expressed much regret, was most cordial and asked why 1 had not come to him alxmt it. A newspaperman who arrives with advance notices, bands playing, and associates only with the supreme heads, never learns much of the basic facts and opinions.
We Canadians have not complained. Diplomacy and defense were brought into this series because for years they have been drilled into us as free services of inestimable value to Canadians at the expense of the tax-burdened Old Country. Now it is contended we should pay for these by more tariff concessions or by agreeing to smaller English preferences on our grain and meats.
Laurier’s “Free Gift”
THE other contention invariably raised by my English friends is that Canada's preference was definitely stated by Laurier to be a free gift; that nothing was expected in return. This is a misunderstanding, if not pure misrepresentation, as I shall explain later.
With Sir John Macdonald’s death, my
interest in his chief organ, The Empire, ended. I returned to the development of my own newspapers. A year later, an opportunity came for establishing in New York a subsidiary which promised to be profitable and at the same time would give me an opportunity to know the Americans at first hand. It proved a very g;xxi investment; profits poured in beyond my best expectations. But it was far more important from an educational standpoint. Like most Canadians, I knew little of the real Americans. Those we knew we liked, but our brutal treatment from their politicians and the flag-waving, boastful ways of early tourists made us generally antagonistic. This last characteristic, later years taught me, was equally general among ourselves and other peoples when away from home. In New York I got a cross-section of American life high and low, political and commercial, Northerners and Southerners.
I found that Americans generally were quite different from what we had believed.
I am anxious to emphasize this because, since the war, a strong campaign has been going on in the Old Country to create illfeeling against the United States, and in the United States against the Mother Country. It is promoted by foreign interests, and these foreign interests are the same group in both countries. This is not a guess or a suspicion. It is what I know to be a fact.
It would seem to be of the greatest importance in the future of both peoples that we closely watch and severely frown upon all efforts which seek to create discord between the Empire and the United States.
The temptation to remain in the United States was very strong. Large profits and the tremendous reading population gave opportunities, as they did in England, for developments that were absolutely impossible of attainment in Canada, with perhaps one-twentieth of the reading public. However, I felt that my place was in Canada and in the Empire, and I sold my New York publication and returned. My experience in this respect is typical of that of thousands of other Canadians who have made similar sacrifices, have done it willingly and are glad they did it, firmly believing that it was best, in the long view, from a practical as well as a sentimental standpoint, to remain in and help build their native country and Empire.
I THEN spent several months going about, the Maritime Provinces, meeting, discussing their problems and becoming personally acquainted with the business and political leaders, in order that we might better understand and therefore bring to their assistance in the solving of their problems the aid of other parts of Canada. Among the many warm friendships developed from that visit was with Mr. Fielding, the then Prime Minister of Nova Scotia. Previously, I had been quite antagonistic because of his supposedly antiCanadian views. Later, he became Minister of Finance in the Laurier Government and frequently came to see me in Montreal. He was a strong free trader, but one of the fairest men I ever knew, and one of the most respected and trusted we ever had in national life. Tariff making was his chief problem. 1 le had been a former newspaper man and a successful one. A successful newspaperman is one who has a capacity for getting the basic facts and, when necessary, interpreting them for his readers. This is how Mr. Fielding set out to understand and solve his tariff problems. He went from end to end of Canada, conferring with all classes, occasionally aided by some of his Cabinet colleagues. Gossiping with me on one of his visits during these investigations, he made the interesting remark that it sometimes became necessary for men in public life to change their lifelong opinions when they viewed things from a wider field, or on hearing the other side of the story. 1 do not recall that he ever gave
any hint of British preferences, but I do remember that Colonel Denison and his followers took every opportunity at many of these conferences to present the idea of preferential trade.
Just before Mr. Fielding’s first budget speech I received a note from him, giving me the date and suggesting I might care to hear it. It was a great speech, though he was very tired. He had worked on it nearly all the night before. He had much personal magnetism, a lovable nature that carried the sympathy even of his opponents, and he got a splendid reception. Many of us had feared tariff reduction—the Liberal policy. Instead, he practically adopted Sir John Macdonald’s great objective—preferential trade. He gave the Mother Country a twenty-five per cent all round preference, to be increased later to 33}4 per cent. Soon after, I joined him in the lobby and we walked down from the House together, discussing the speech. He began chaffing me, saying that from then on I would have to support the Liberal Party as their policies now fitted my protectionist and Empire trade views. He knew that I had supported the Liberals strongly in that campaign as, soon after Sir John Macdonald’s death, the Conservative Party had gone to seed, had no vision, were hopeless. For example, they refused to aid Newfoundland in her dire straits in 1895 by meeting her plea to be taken over. We thus lost a profitable market.
I was very definite in telling Mr. Fielding that his policy was sound, provided the British gave us similar preferences. To which he replied in effect that it was to this he expected the Canadian preferences to lead. Hence I had every reason to believe that he had unofficial assurances from important authorities in London that Britain would meet Canada’s advances with similar preferences on wheat and the cancelling of the most unjust embargo on Canadian cattle.
From that time until the present it has frequently been said in the English press and in business circles that this great preference was no real concession to British producers but purely in our own interests. No doubt much of this story was spread by the merchant shippers and the foreign interests. It is interesting to find that now, after thirty-five years, British exporters and public men, having partially shaken themselves free from foreign shipping and financial control, have begun to understand Canada’s great fight for Empire and to appreciate these preferences. The other day Sir Cunliffe-Lister, Colonial Secretary, speaking in the House of Commons, said that What mattered to our exporters and manufacturers was not that they should get free entry into a colony, but that they should have a preference over their foreign competitors. The whole policy which the Colonial Office was pursuing—and he was in constant consultation with the Board of Trade on these matters—was so to adjust the tariff as to get the possible advantages of mutual trade.
After the suppression, as previously related, of the Imperial Federation League in London because of our Empire preference views and refusal to use it for battleship propaganda, Colonel Denison, having reorganized the Empire movement in Canada, arranged to spend several months each year in the Old Country working toward the same end. His old friend. Lord Salisbury, was always cordially with him; and leading English newspapers who were not afraid to offend foreigners, supported him. Sir Charles Tupper, as High Commissioner, had been doing great work. I have every reason to believe that Joseph Chamberlain was one of his converts.
SOME seven or eight years before the Fielding preference in 1889 I had sent a member of my staff from Canada to establish offices in London. It was through him we first sensed an antagonism on the
part of British business toward Canadians. Based on developments since, it appears quite clear this was an organized campaign by foreign interests to injure British business and Empire trade. We were having fewer visits from representatives of the old established British industries. Some English business papers were becoming very offensive in their references to Canadian importers, particularly as to their financial standing, refusal to pay, crooked business methods, etc. Canada was going bankrupt was often heard. The Draper’s Record, a great business paper, was the chief offender. On the other hand, the Morgan Brothers, publishers of papers in the metal and chemical fields, were always most cordial. One of them, Septimus, was a constant visitor to Canada and Australia. We were warm friends and he was one of the strongest advocates of Imperial preferences, as I believe his son, Sir Kenyon, is today. There was a growing indifference to Canada as a market. The producers were gradually putting their business in the hands of export merchants in London, or attempting to do Canadian business through New York and other American agencies. One after another, popular British lines practically disappeared from the shelves of Canadian merchants. German, Austrian, Belgian and Swedish products began to be forced on Empire customers instead of British goods.
Soon after the adoption of the preferential tariff I found it advisable to visit England in an effort to estimate the probable reactions on the part of the British producers to the great concessions offered them by Canada and to base on these our own future plans. Calling on the producers, I found them fairly cordial and sympathetic to our preference policy, and generally expecting a considerable influx of visitors from Canada coming over to buy. They had been informed that the preference was for our benefit rather than theirs. But in many cases they told me that they had placed their business in the hands of shipping merchants, who objected to their having any direct dealings with Canadian customers or Canadian interests, and fictitious names were to appear on goods. Going among these shipping merchants, I found that many were owned or controlled by foreign interests. Later I found that, in addition to the shipping merchants, ship-owners, bankers, and insurance interests were decidedly opposed to any system of preference.
One of the most vigorous of our typical opponents was Viscount Inchcape, whose death is just announced; a grand old man in English commerce, industry and foreign trade. He spared no effort to convince me any time we met that Canada could never be prosperous until we had adopted free trade. By free trade he meant that we should send all our raw material to England to be manufactured, paying freight to English merchant ships, insurance to English companies, exchange to English banks, a profit to English manufacturers, who would return the raw material in manufactured form through the same process. That is, they would get us both going and coming. This is exactly what the Americans endeavored to do to us, particularly in nickel, timber, steel, asbestos, fishing, etc., up to thirty years ago. I am satisfied, however, that this is not the viewpoint of the great mass of the people at home.
While in London I received a letter from Major Bate, who was coming over, as military secretary, with the Prime Minister, Sir Wilfrid Laurier, to the Jubilee celebration and the Imperial Conference. He asked me to make some discreet and confidential enquiries for him and, if possible, to meet them at Liverpool on the arrival of the boat. As the London Chamber of Commerce had something to do with Sir Wilfrid’s speaking tour, immediately following his arrival, I went to the Chamber’s headquarters in London, which were near
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my own offices, before leaving for Liverpool to make some enquiries from the secretary, Freeman Murray, nominally a friend of I Empire trade. He was in conversation with ; two foreigners and stepped aside to speak to me. He was quite decent, but immediately they heard what I was after, they joined in the conversation most offensively in continental English, saying the Chamber had no information to give me and that, in effect, it was none of my business. I found later that they were merchant shippers and very active members of the London Chamber of Commerce.
I have no evidence, only suspicion, that it was this part of the delegation that tricked Laurier into making, in his first address at a luncheon the day he landed at Liverpool, the statement that Canada had given the preferential tariff as a token of good will for all England had done for us and wanted absolutely nothing in return. Canadians reading the press reports were astounded. Later it was said a garbled report had been given the press especially for German consumption in connection with denunciation of trade treaties.
Sir Wilfrid’s own colleagues at Ottawa at once expressed the view in press and Parliament that he had been misquoted. Colonel Denison blamed the Liverpool export merchants for creating and broadcasting the statement. He arrived immediately after the meeting and travelled with Sir Wilfrid on his speaking tour. In any event, Sir Wilfrid made no further reference to tariff gifts, but instead, Colonel Denison told me, on his arrival in London, of discussions between Laurier and some of the textile leaders, under which it was suggested that Canada admit British woollens free and in return British woollen manufacturers would buy and close Canadian woollen mills. Britain would then give Canada a preference on wheat. Later, both Sir Wilfrid and Mr. Fielding told the British definitely that they expected preferences in return, and, if they were not accorded, Canada would consider cancelling the preferences.
Mr. Fielding himself came over for a prolonged study of the situation in Europe. We met constantly and made several trips together, meeting many important business interests. At no time was there any suggestion that preferences were not expected in return.
In fact the whole trend in British agriculture and industry was for preference. I am satisfied that but for the terrific campaigns carried on by foreign interests bluffing and using men in public life the Mother Country would at that time have adopted a preferential policy.
Mr. Ritchie, Chancellor of the Exchequer, who blocked Empire wheat preferences, speaking to his constituents in justification said it might give offense to the United States. He was hissed. The audience rose and sang “Rule Britannia.” He dared not seek re-election.
Editor’s Note : The next and final article in the series of Colonel Maclean's recollections will deal with the World Economic Conference in 1927. the real object of which, he claims, teas to prevent the development of British protection and Empire preference.
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