October 25, 1932 (17th Parliament, 4th Session)

CON

Donald James Cowan

Conservative (1867-1942)

Mr. COWAN (Long Lake) (Text):

Oh, my lord.
Mr. ST-PERE (Text): What is the idea? The hon. gentleman does not seem to like French. Does he not remember that both languages are official in this house? Let him do as I did. I had to learn English; why does he not learn French?
(Translation): The Imperial economic conference at Ottawa has completed its work. If the English people have not taken all the interest which they devoted to the conversion of the war loan, we must remember that all the nations are watching the proceedings taking place in the capital of Canada, whence
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have sprung the resolutions which greatly interest the trading nations of the world. It is safe to state that the Russian government's economic experiment is no doubt the only one which compares with that of the nations of the British commonwealth.
On the one hand, it was the first time that such a meeting was convened outside of the United Kingdom; a dominion made the invitation, prepared the agenda and led in the debate; a sign that the dominions have attained their manhood and are no longer subordinate either to the government or parliament of Great Britain. Seated at this round table were representatives of countries having equal rights, the head delegate of Great Britain was but primus inter pares.
In 1894 a colonial economic conference met. England did not take an active part. She simply was represented by Lord Jensay, as an observer. Canada was the only one that had then the statute of Dominion, and from that viewpoint the recent Imperial conference at Ottawa was without precedent; another point to note was that the circumstances in general under which it met were very different from those of 1930. Great Britain and the dominions recognized that their reciprocal relations were entirely changed and that the problems to be solved were more numerous, greater and more complex.
What was the subject discussed at Ottawa? First, the replacing of the imperial preference existing to a various degree by a system of tariff protection in common, thus isolating the commonwealth from the rest of the world. Certainly no one dared to mention a "closed economic entity." All understood that the British Empire, notwithstanding her diversified climate and products, could not refuse trading with countries outside the empire and content herself with internal markets.
The great English newspaper, the London Times was aware of this fact and pointed it out to the delegates a few days before the conference:
The Empire, no more than its component parts, can exist by itself. There must be international cooperation on a larger scale to bring about this widespread prosperity which is the only sound and lasting foundation of the prosperity of a country or group of countries, whatsoever. However, it is also admitted that progress can only be gradual, and that the members of the commonwealth must first come to an understanding on a common trade policy. It is therefore quite natural that Great Britain will endeavour to exercise pressure on her associates in favour of protective views which she has sponsored: it is not without a motive that, in the general tariff, the exemption of an import duty granted to the products of the dominions, has but a duration of six months and expires probably with the closing of the conference.

We have not to concern ourselves, in the course of this debate, as to whether the deliberations at the conference were stormy or peaceful. The state of mind and feelings of delegates were daily commented upon by the press, but this has no bearing whatsoever over the final recommendations of the conference. Let us come to facts, in his opening speech, the right hon. Prime Minister expressed himself as follows:
What results do we expect from this conference? The answer is, I think, from all of us, greater markets within the empire. This is the answer from all of us, undoubtedly, if we are persuaded, as I am, that greater empire markets mean as well greater world markets, lor to us in Canada closer empire economic association does not mean in any sense world disassoeiation. The trading potentialities of this empire are great. But even one-quarter of the human race cannot profitably shut itself off from contact with the rest of the world.
Up to then the Prime Minister of Canada is perfectly in agreement with the Prince of Wales, who made the following remarks at a banquet given in honour of the English delegates to the Ottawa conference:
I will read this in English for the information of the hon. member who seems to protest against the use of French:
At the present time-
Said the Prince:
-we in the British Empire are inevitably dependent on the world prices-and can afford to do nothing which might react adversely on world confidence and so check the recovery of world prices. Indeed, it is of the utmost importance in our own interest that, so far from taking any step that might discourage foreign countries, we should make effort at Ottawa to put heart into the world, and to concert measures in which other countries may later cooperate.
(Translat'on) : Then the Prime Minister
continues:
When we reach an agreement by which our products pass more freely from one empire country to another, we drive clear channels through the stagnant pools dammed up by the world upheaval, and naturally we will carry past the boundaries of the empire and to its benefits, establish once more again throughout the world that commerce which is its very life blood. The British people in their vigour, industry and experience have nothing to fear from foreign competition when they are united in that economic association which is now possible. When from this conference that results, we will welcome fair and friendly competition. In our own interest we will welcome it.
"To drive clear channels through the stagnant pools dammed up by the world upheaval." The Prime Minister thought fit to allow them a free course and to even increase the flow by adopting intermediary and general prohibitive tariffs, condemned by all the great

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economists of the world. Does he forget that the value of international trade is, today, only half-perhaps less-of what it was at the beginning of 1929. During the same period the number of unemployed has more than doubled. According to the statistics of the International Bureau of Labour, from 20 to 25 million people are today, without work. What will happen tomorrow?
Unfair attacks: (the Prime Minister).
But we have no right to invite unfair attack upon the plan so full of promise for us. We within the British Empire have established our own standard of living. Those it is our duty to safeguard. I am disinclined to comment adversely upon the standard of living of any other country, or upon the economic scheme on which that standard of living is based. But I do say that where they are unlike and antagonistic to our own, we must resist the conscious or unconscious efforts to put them in free competition with our own.
It is desirable, I state, that our standard of living be safeguarded, but is that the result created by high protection? The latter always places the consumer in the impossible position of repurchasing the product of his own labour, and at times places him on the level of slaves. The spantaeus of protection have never been the champions of the people oppressed by the international high financial interests and the large industrial corporations. The Premier then traces a plan:
The plan we must achieve will lead us through this world period of reorganization and change. So when we find our orderly progress opposed, and when our social and industrial existence is threatened, it is our common duty to provide the safeguards which will leave us free to go forward on the course we have decided to be the right one. State-controlled standards of living, state-controlled labour, state-aided dumping dictated by high state policy, conflict in theory and in practice with the free institutions of the British Empire. The subordination of individual right and liberty to a national economic plan affronts our whole idea of national development. We must be active in the defence of our institutions. We must put before all else our peace and happiness.
"Let us look for guarantees" we agree on this point. Let us remember, however, that the Russian oil entering Canada is shipped to Mr. Mellon's aluminium company, on the other hand Poland prohibits the entry of this commodity on her territories. Our hon. friends contend that our delegates at the conference obtained a great success by forcing England to cancel her trade agreement .with Russia, and that such a step will open up a market for our wheat and lumber.
One of the economic fundamentals of Russia, even under the socialist regime, is based on the development and foreign sale of her lumber in
the northern regions. At all times, England has been Europe's best client for soft wood.
The Russians, therefore, endeavoured to concentrate their efforts on the British market, which has always been considered, owing to its potentiality, the regulator of lumber prices. During the period of two years, namely 1927 to 1929 according to the statement of experts, the Russian exports to England amounted to between 340,000 and 500,000 standards, and they expected for 1930, a shipment of 800,000 standards. This increase would not have been disastrous, had it not synchronized with a fall in prices due to the economic depression and the trade policy of the Soviets.
The latter upset the trade of countries exporting lumber, such as Scandinavia and Canada, moreover it was responsible for a great depression, caused by the fluctuation of prices. Finally, lumber firms in England were forced to place their purchases in the hands of a syndicate whose duty was to purchase and regulate sale prices.
The Conservatives will contend that this trade arrangement was cancelled, a few days ago. That is so, but let them not forget that the British government has invited the Soviets to conclude another trade agreement. Let us recall the advice of a great French writer to his young son: "Beware of men's honour when the sun is down."
And the empire markets:
As we desire greater empire markets, it is our task to decide the means by which they may be obtained. As each of us must find markets for our exportable surpluses, it is in our common interest to achieve a plan which will provide the maximum exchange of goods compatible with those domestic considerations fundamental to the development of our natural resources. Those considerations cannot be forgotten if the empire project is to succeed.
We have had these empire markets from 1922 to 1930, a period during which Canada enjoyed unparalleled prosperity. Treaties and a moderate tariff policy were responsible for this. Why have cancelled the former and increased the latter? The answer comes from the large manufacturing associations and international trusts opposed, in certain instances to international cooperation.
And "a very interesting fact": (Mr. Bennett) .
In the past, Canada's manufactured products have enjoyed a measure of protection, in the home market. Our natural products have enjoyed little or no fiscal advantage over their foreign competitors in empire markets. It is now our hope to secure it for them. Inasmuch as the ideal application of the principle of protection involves an equalization of benefits thereunder as between manufactured and natural products, it is the desire of this government to effect that equalization and to find a way for our exports into the empire markets by giving the exporters from those markets a way into ours.
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This protection that was considered sufficient, was only criticized by those industries whose over capitalization would deserve them as a punishment "controlled economy." The "little or no fiscal advantages" mentioned by the Prime Minister have exacted as compensation in the past these intermediary and very high general tariffs, mentioned in schedule E against all foreign markets outside the Commonwealth. The Conservative party has well deserved from its masters, the trade trusts.
And our natural products: (Mr. Bennett).
1 have said before, and I do not desire to minimize the fact, that Canada must have greater export markets for its natural products. No country can live unto itself in this complex age, and with our relatively small population, with our vast and varied natural resources, with our immense exportable surplus in natural products, we perhaps above all other countries must be assured of other markets than our own. And I confidently believe that the people of the United Kingdom will not hesitate to support our proposal knowing on their part that it will mean increased prosperity to many of their basic industries, and through them increased pi'osperi-ty to all classes of the land.
We must have markets outside the United Kingdom, but this Government cares little and discards as if it were non existent the clause "the most favoured nation". But what about the resolutions, the recommendations of the Economic Committee of the League of Nations which, in June 1932, appealed to all governments, in the following words:
The committee points out that the present situation contrasts violently with that existing previous to the crisis, at a period when numerous trade treaties containing the clause "of the most favoured nation" was in force. A number, among the most recent, endorsed reciprocity, while up to lately, the principle "of the most favoured nation" was to be found, so to speak, at the basis of all trade treaties.
The experts of the League of Nations were of little weight in the recommendations of the last Imperial conference. The Economic Committee are unanimous in stating that they are of the opinion that "notwithstanding the infraction with which they have to put up, the clause "the most favoured nation" as to customs matters must be one of the essential principles of economic trade and that its cancellation would cause unforeseen difficulties."
The right hon. Prime Minister informs us that he has simply laid down the foundation "and that the economic imperialist measures will, in the near future, be carried out". That is on what the Conservatives depend; as to the consumers let them find elsewhere more recuperative means such as an international agreement would be both from a fiscal and economic viewpoint.
[Mr. St-FereJ
The wheat growers, copper, zinc and lead producers of the empire, will see the preference vanish should they not be able or refuse to place these products on sale, in the United Kingdom, at prices not exceeding the world market prices, and, in sufficient quantities to fill the requirements of the consumers of the United Kingdom.
Let the workmen and producers of Canada, put on mourning clothes, for England will do her own bidding. If they are unable to compete on an equal footing with other nations on the British market, they will be out of luck and will witness their industries totter. That is a market which promises us very little hope to relieve unemployment and the industrial crisis.
Our hog producers, tobacco growers, dealers in egg, poultry, butter and other manufacturers of dairy products are equally liable to encounter a preferential duty after a certain length of time.
Mr. Wickham Steed, the great English writer, has written the following as to the English character:
1 have often stated that the English mind is a queer mixture of idealistic and matter of fact notions. Both are held equally in earnest; but during a period of economic crisis, the latter, that is the safeguarding of private and national interests, has the best of ideals. Until order is again restored, the health of the outside world is of little concern. Let the foreigner go and hang himself! And when the foreigner becomes too insistent, he is considered very much a bore.
The proceedings of the Imperial Conference have confirmed the psychological notations of Wickham Steed.
The idealism of the English delegates readily endorsed the agreements between the nations of the commonwealth, forming ties which will hinder foreign trade within the British Empire, etc., but the matter of fact turn of mind and fear that the foreigner will prove himself very much of a bore made them insert this proviso, in article 4 "not exceeding world market-prices and in sufficient quantities" a rather embarrassing clause for those who depend on the United Kingdom market to sell their products.
England also retains the right to refer our tariff against her products to our Tariff Commission, which I trust will be endowed with the qualities requisite of members forming such an institution and of which Mr. Thomas Walker Page, late president of the United States Tariff Commission, from 1920 to 1922, stated:
To create an effective tariff, the members of the Tariff Commission must be free from all

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interference by business people, and possess the confidence of all the members of congress and senate.
Is that clear enough? "Et nunc, erudimini." Let us suspend our verdict concerning the work of this organization, which has been awaited for two years.
What is, sir, the outcome of this conference, if not a promise of "potential'' trade with England, on the one hand, and the closing of our doors to products of countries outside of the commonwealth. It may be contended that this attitude of isolation will oblige foreigners to establish, on Canadian soil, factories which will manufacture what we export, also taking advantage of the British market, while reaping the advantage of that of Canada. First, all is problematical and the realization of the second part would be equivalent to a ruinous competition between Canadian industries, and would foster overproduction, thus creating another crises of unemployment which would be a truly national one.
Viscount Hailsham, an ex-Chancellor of the Exchequer, who recently was in Ottawa, wrote the following on April 1, 1932:
It was thanks to the genius of colonial statesmen such as Sir John Macdonald and Sir Wilfrid Laurier, that the empire was saved from a complete disaster, even to the errors made by British statesmen themselves were rectified. In 18G1, the Canadian colonies obtained the right to grant one another reciprocal preferences; Australia and New Zealand acquired the same privilege in 1873. By degree all the colonies, as soon as they were granted their autonomy, abandoned the erroneous policy of free trade and formed their own economic union. Since 1897, Canada has granted a preference to British goods; since 1919, Great Britain conforming herself to the resolution of the Imperial conference of 1917, granted a preference to the products of the empire. Last year, the Prime Ministers of all the Dominions declared unanimously and solemnly that they accepted the principle of Imperial preference.
He might have added that neither Sir John A. Macdonald nor Sir Wilfrid Laurier had ever thought, for a moment, of establishing this preferential policy on the threshold of a closed door to foreign countries and that a moderate protection was always the policy of these great statesmen. Had we followed such a truly Canadian policy we would have equally benefited from the advantages which London grants to the members of the British Commonwealth, and of which the most important, at present is a preference on goods made in Great Britain of 10 per cent ad valorem, in the general tariff, levied on all important British products, save a few. Why was it not averred that to-day no country is in a position, through its own individual resources,
to divert to its advantage, the course of economic evolution and that trade is not carried on to the extent it was previous to the crisis.
This international trade upheaval has created most complex and varied problems which governments have to face. But instead of working for an international appeasement and for a durable improvement in the financial situation, the delegates at the last conference preferred the isolation of the commonwealth to the interdependence of nations and the chorus of diplomats, in ibhis house turned into a hall of miracles, broke out in the following refrain:
Unissons nos efforts pour la tache commune, Pour la tache commune, unissons nos efforts. L'Union fait la force, et la bonne fortune Qui nous a reunis saura nous rendre forts. Nous vivrona toujours en bonne harmonie Les yeux dans les yeux, la main dans la main. Si l'un de nous Yeux augmenter le pain,
Afin d'eviter toute zizauie. _
Nous ferons monter la biere et le vin.
Wheat, sir. was the subject of many discussions and responsible for many conferences within the last years. Our empire granary-western Canada-France, the countries bordering on the Danube, Argentine, Russia and even England who, according to Sir Charles Fielding and Sir Royland Biffen, could produce enough for her own requirement, if her production was better industrialized, are seeking markets for their own wheat. The Red Fife, the Marquis and the Come Back, the latter from Australia, will necessarily be the highest prized. Notwithstanding the preference granted to our wheat, it will have to compete against all others, on the British market, because the consumer in the United Kingdom will always demand his "free breakfast table," therefore, at all cost, our growers must therefore reduce the cost of production to a price level which will permit growing wheat at a profit. Will the Canadian farmer accept the wages of other wheat growing countries? Never will the Canadian farmer ever adapt himself to the standard of living of the Gaucho of Argentine and the harvestmen of "United Europa."
As a result of the Conference he will have to sell his wheat at the world's market price. England offers quite a "potential" market, according to the hon. Postmaster General (Mr. Sauve). The wheat trade is influenced by the overproduction of this commodity.
The farm producers of butter, cheese, eggs, etc., should not depend too much on the conference agreements to return to a relative prosperity. Denmark is at present undergoing a terrible crisis and England which ab-
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sorbs 70 per cent of her production has no intention of dropping the Danish market.
The Stauming government has just created a department of exportation, "The Valuta-Centralin's " efforts will be directed in taking more advantage than ever of the English market. Will our farmers be able to compete with the Danes? Especially will they be able to produce in sufficiently large quantities and receive in return sufficiently remunerative prices. Competition, you see, is the life of trade: It is only in Canada that this aphorism seems not to be understood.
Mr. Speaker, while our opponents are very jubilant, at the thought that the imperial conference agreements will by themselves restore prosperity to a disorganized world and that some stipulation or other provisos will raise agriculture from the mess in which it is, and over zealous loyalists of Neville Chamberlain's stamp discover a closer union in the Imperial unity and some kind of loyalty in the extraordinary raising of fiscal taxes, we, Liberals, deny the soundness of such economic fallacies accompanied with a great display of circumstantial patriotism.
WTe contend, with Carnegie, that high protection is the mother of trusts; we realize, as partisans of international co-operation, that Tory exclusivism will deprive us of many profitable markets, especially that of the United States where there exists, at present, a government attacked by a microbe which is destructive of the world's equilibrium and whose most ardent followers endorse the politico-fiscal policy of our friends opposite; we hesitate in the face of the dangers, that too close a tie between the members of the commonwealth might lead us ibo, by being called upon later to foot the bill for the protection of those great maritime routes which are destined to promote inter-imperial trade; we weigh those "potential" opportunities of success without discovering any hope, because of the numerous restrictions placed upon our foreign trade; finally, we remain Liberal, following the example of those English Liberals who recently resigned from a National Government whose first act was to throw on the shoulders of the people a new burden of indirect taxation.
The hon. Solicitor General (Mr. Dupre) mentioned "shadow boxing" and "sparring." This mixing of sports with the debate pleases me. Indeed, sports possess a code of honour which is greatly contrary to those methods to whom certain public men and especially numerous political dabblers call to their help during electoral conflicts. This, of course, has

nio personal reference to the hon. Solicitor General who, although somewhat of a tease must well remember that great sport motto of English universities, namely: "better lose
cheerfully than win by all means."
But shadow boxing forms part of the training preparatory to a great match and offers much chance of success, it is by good sparring that a clever boxer overwhelms his opponent. The hon. leader of the opposition has apparently weakened his opponents in the very first round, and the betting is a hundred to one that his victory will be decisive in the last round which will take place at the next dominion election. This therefore, ends the sports in this debate.
However, sir, the conflict of principles which is taking place between the two great political parties in Canada has not yet ended. Whether the Conservatives seek their cue in London, that is their business. But we Liberals will remain at our post as shock troops, and this to make common cause with all those who, idesirous of seeing the end of this crisis, favour the natural course of affairs, flexibility in the fiscal policy and well regulated friendship in our economic trade relations.
In a work, sir, called Decadence de la Liberte, Mr. Halevy describes how universal suffrage fared under the third republic. He shows how parliament often ended by adopting a policy contrary to what the people had clearly demanded in the election.
Our parliament, by its overwhelming majority has played such a role since the election of 1930, and is preparing to continue such a policy.
While Canada, England and the other nations of the commonwealth will remain united in this conflict against the world, unemployment will continue to spread, our large factories, like the Angus shops, in the county of Hochelaga, where 4,000 workmen were dismissed, will close their doors to those who ask for bread, our large Canadian maritime ports like those in Denmark, England and the United States will remain inactive, finally great distress will prevail over the land. But no matter, the most pernicious imperial nationalism will replace, thanks to our Conservative friends the unceasing activity which, in the past, characterized trade protected by the British flag floating over the seven seas of the world.
Great Britain and a better world will no more be the motto of the great economic undertakings. The empire crusaders will have

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won half a battle. The Right Hon. Neville Chamberlain will have vindicated his father's defeats at the conferences in 1897 and 1902.
As to our Canada, she will have to content herself with whatever crumbs there are in the midst of this inter-imperial confusion, and the standard "Canada first" will be relegated to the museum of national disasters.
And as a bit of consolation, all the nations will await the future international economic conference where the question of abolishing tariffs will not even be mentioned, and we will wonder when and how the crisis will end.
Mr. Speaker, the man at the helm of government always keeps his eye on the future, but at present, what dark chasms filled with surprise and mysteries lie before us!

Topic:   QUESTIONS
Subtopic:   IMPERIAL ECONOMIC CONFERENCE
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