January 30, 1947


James Horace King (Speaker of the Senate)



I have the honour to inform the house that when the house did attend His Excellency the Governor General this day in the Senate chamber, His Excellency was pleased to make a speech to both houses of parliament. To prevent mistakes, I have obtained a copy, which is as follows: Honourable Members of the Senate:

Members of the House of Commons:

Since my arrival in Canada, I have visited all nine provinces. To-day, for the first time, I meet with you at the opening of a session of parliament. I should like at once to say how greatly I value this new association. I prize it the more in that it permits, in a time of peace, a continuance of the memorable association I had with Canada's armed forces at a time of war.

This new year has happily been marked by a lessening of international tension. During 1946, despite many disappointments, a notable advance was made towards world recovery. In the making of peace and in the tasks of world reconstruction, Canada has assumed a full share of responsibility. No country holds, today, a higher place in the esteem of other nations.

The establishment of enduring peace continues to be the first concern of all nations. It is the corner stone of our external policy.

Unsettled world conditions, following inevitably in the wake of war. have rendered the making of the peace exceedingly difficult. Some progress has been made. After prolonged conferences, treaties of peace with Italy. Finland, Roumania, Hungary and Bulgaria have been agreed upon, and are about to be signed. You will be asked to approve the treaties to which Canada becomes a signatory.

The allied nations have now entered upon the task of determining the future of Germany and Austria. Canada has recently made clear our constructive attitude with regard to these settlements.

In international action for the relief of the destitute, and for the rehabilitation of areas desolated during the war, Canada has been much to the fore. We may indeed be grateful that our country has been able to take the part it has in the relief of human suffering, in the provision of food for the hungry, and in the restoration of devastated countries. Canada is joining with other nations in seeking to solve the perplexing problem of the displaced persons, and in the development of international co-operation in many fields.

It is the policy of the government to have Canada give wholehearted support _ to the United Nations. Special attention is being given to the deliberations respecting atomic energy and the regulation and reduction of armaments. My ministers are also following with interest the activities of the United Nations with regard to the question of human rights and fundamental freedoms, and the manner in which those obligations accepted by all members of United Nations may best be implemented. It is the intention of the government to recommend the appointment of a select committee of members of both houses to consider and report upon these matters.

The General Assembly of the United Nations concluded, last month in New York, its first session begun in London a year ago. Canada's delegation both in London and in New York was representative of the government and the opposition, and of both houses of parliament. The Canadian delegation took an active and constructive part in the work of the assembly, the economic and social council, the atomic energy commission and other international organizations. YTou will be invited to consider legislation to enable Canada to carry out our country's obligations under the United Nations charter, and to approve other agreements arising out of the growing structure of international organization.

Canada welcomed the action of the United nations in convening a world conference on trade and employment. It is hoped that the conference may bring into being an international charter which, by the removal or reduction of restrictions, will result in the continuous expansion of world trade. During the autumn, preparatory trade discussions among the nations of the commonwealth were held in London. Discussions are being continued with other of the united nations. Canada's delegation to the conference will be instructed to further to the utmost this combined effort on the part of the united nations to liberate trade and thereby to assist in the maintenance of a high level of employment.

In our own country, the change-over from wartime conditions has proceeded rapidly. The repatriation and demobilization of the armed forces liave been practically completed. Almost all dependents of veterans have now arrived in Canada. The three armed services have heen brought under the jurisdiction of one minister of the crown. The navy, army and air force are being reorganized on a postwar basis.

Industry has been converted almost entirely from war-time purposes to peace-time production. Over a million persons have been transferred from the armed forces and war industry

_________________Governor General's Speech

to regular civilian occupations. Employment is higher than it has ever been. It is over thirty per cent higher than it was in 1939. During 1940 Canada's external commerce reached heights unprecedented in peace time, the national^ income is at its highest peacetime level. 'I lie outlook for trade and employment for 1947 is most favourable.

Despite the high volume of output in all the primary industries, the demand for the natural products of the farms, the fisheries, the mines and the forests continues to exceed production through marketing agreements, the govern-meP?',.'s seeking to give security and continuing stability to the incomes of primary producers.

-Many of the controls and restrictions in force during and immediately after the war are no longer in existence. Others have been considerably relaxed. Controls over wages and salaries and over many prices and commodities have been removed. Other controls are being removed in an orderly manner.

The policy of the government is to maintain only such price and commodity controls as may be required to protect consumers from a sudden and drastic rise in the cost of living, and to ensure the fair distribution of essential goods and services which are in short supply. \ ou will be invited to consider what measures may be necessary to continue this policy after tile expiry of the National Emergency Transitional Powers Act. Where it raav appear advisable to continue these or other transitional measures, the required legislation will be submitted for your approval at the earliest possible date.

Where measures enacted under war-time powers may be required for a considerable period, bills necessary to give statutory form to their provisions will be introduced without delay. This procedure will bring under your review a number of measures relating, among other matters, to labour relations, agriculture marketing, immigration, defence, finance and export trade.

Progress is being made in overcoming the shortages in building supplies, thereby accelerat-irfg tile provision of additional housing. Despite all obstacles, the number of , housing units completed in 1946 approximated the objective set by the government. The cooperation of provincial and municipal authorities greatly contributed to the provision of emergency shelter.

. Since the last session of parliament, negotiations for tax agreements have been carried on with certain of the provinces. In the course of these negotiations, modifications were made in the dominion proposals to meet problems of individual provinces, and to ensure comparable treatment for all.

Tax agreements have now been reached with several of the provinces. The government is prepared to conclude agreements on a similar basis with the remaining provinces. You will be asked to approve such tax agreements as may be concluded.

Once suitable financial relationships have been arrived at with the provinces, my ministers have undertaken to seek, in a general conference or otherwise, to work out satisfactory arrangements with the provinces in regard to public investment and social security measures. Amendments to the Old Age Pensions Act will be ^introduced at the present session.

Aou will be invited to consider a measure to provide for the readjustment of representation in the House of Commons, in accordance 83166-1J

with the provisions of the recent amendment to the British North America Act. Amendments to the Dominion Elections Act will also be submitted for your consideration.

In the course of _ the session, additional measures will be submitted for your approval. Members of the House of Commons:

The public accounts for the last fiscal year and the estimates for the coming year will be laid before you. The estimates will disclose substantial and gratifying reductions in public expenditures.

You will be asked to make financial provision for all essential services.

Honourable Members of the Senate: :

Members of the House of Commons:

May Divine Providence bless your deliberations and guide tile nations in their efforts to establish a just and lasting peace.


William Lyon Mackenzie King (Prime Minister; President of the Privy Council)


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:

I hat the speech of His Excellency the Governor General to both houses of parliament be taken into consideration on Friday next, and that this order have precedence over all other business except the introduction of bills and government notices of motions until disposed of.

He said: Perhaps the house would allow me to say a word with regard to this motion. It is the customary motion at the beginning of a session, but I wish to say at once that at the end of next week it is my intention to introduce another motion to enable the house to proceed with business other than that of the speech from the throne, provided that the debate on the speech from the throne is not concluded by the end of next week. That motion will be:

That on and after Monday, the 10th of February, and every sitting day thereafter until Monday the 24th of February, government orders may be introduced and considered notwithstanding the resolution passed on the 30th of January in relation to the precedence given to the debate on the address in reply to the speech from the throne.

I may say to hon. members that on Tuesday of this week I had a conference with my hon. friend the leader of the opposition (Mr. Bracken) and the leaders of the other parties in the house to discuss procedure with a view to expediting as much as possible the business of the session and getting down to business at as early a time in the session as may be possible.

I would say in the presence of the hon. gentleman to whom I have just referred that we were agreed it would perhaps suit the convenience of all hon. members were the procedure that I have just indicated to be followed, namely that all of next week be given to the debate on the address, if that length of time is desired, and if the debate is not concluded at that time the government would then introduce and proceed with a

Governor General's Speech

consideration of other measures. I should explain at once what these measures are and why it is advisable that we should not delay in bringing them forward.

In the speech from the throne there is mention of the intention of the government to invite the consideration of the house to what measures may be necessary to continue the policy of price and commodity control after the expiry of the National Emergency Transitional Powers Act; also what measuies enacted under the wartime powers may be required for a considerable period, and what bills may be necessary to give statutory form to their provisions.

The National Emergency Transitional Powers Act, as hon. members are aware, expires on March 31. How long it will take to consider these measures which may have to be enacted in order to enable certain powers to be continued, it is impossible at this moment to say, but the government has felt it would be advisable to lose no time in presenting these measures to the house. It is suggested that two weeks be allotted at the outset for the consideration of these particular measures. At the end of the two weeks I shall look forward to having a further conference with my hon. friend and other leaders as to what procedure we should follow from then on.

May I make it perfectly clear that my hon. friends and myself were of the view that we should not in any way attempt to impose our wills or desires on hon. members of the house. Hon. members may feel that they do not approve this course; they may wish to take some other course. Of course, they are at perfect liberty to express what views they may wish to express and to have them carefully considered by the house. But I do believe that if What is proposed meets with general approval, it will enable the house to get on with its business more rapidly.

May I also say the hope was expressed by all that the debate on the address might be concluded by the end of next week. I have said it is a hope. It is an earnest hope in the interest of getting on with the business of the session; but may I again make it clear that it is for hon. members to decide for themselves what length of time they wish to take for debate on the address and in the discussion of the different measures that may be before the house.


John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. JOHN BRACKEN (Leader of the Opposition):

Mr. Speaker, in view of the arguments advanced by the Prime Minister at the conference to which he referred as having taken place last Tuesday, and in view of the rMr. Mackenzie King.]

further statement he has made today, I am glad to be able to say that, speaking personally, I approve the procedure he has outlined, and I should like to hope that those who sit around me will see fit to approve it also. Our understanding is that next week the full time of the house will be allotted to the discussion of the address we have heard today, and for the two weeks following the time will be wholly given over to government business. At the expiration of the three weeks it is proposed that some mutual arrangement can be arrived at as to what the procedure should be from then on. In the meantime other than the desire that the debate be not prolonged unduly no attempt is being made to prevent anyone who wishes to do so from speaking on the debate in the address in reply to the speech from the throne.


Motion agreed to.



William Lyon Mackenzie King (Prime Minister; President of the Privy Council)


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:

That a special committee be appointed to prepare and report, with all convenient speed, lists of members to compose standing committees of this house under standing order 63, said committee to be composed of Messrs. Mackenzie, Chevrier, Casselman, Knowles and Weir.


Motion agreed to.


Right Hon. W. L. MACKENZIE KING (Prime Minister) presented the following message from His Excellency the Governor General: The Governor General transmits to the House of Commons a certified copy of an approved minute of council appointing the Ri^ht Hon. Ian A. Mackenzie, Minister of Veterans Affairs, the Hon. J. A. MacKinnon. Minister of Trade and Commerce, the Right Hon. Louis S. St. Laurent, Secretary of State for External Affairs, the Hon. D. C. Abbott, Minister of Finance, to act with the Speaker of the House of Commons as commissioners for the purposes and under the provisions of chapter 145 of the revised statutes of Canada, 1927, intituled: An Act respecting the House of Commons.




William Lyon Mackenzie King (Prime Minister; President of the Privy Council)


Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker, it is customary to announce any changes in the ministry where there are resignations and vacancies created thereby. The mere transfer of a minister from one department to another does not necessarily call for any ministerial explanation. However, I think it would be of

Peace Settlement with Germany

value to have on record the few changes that have been made since the last session in the transfer of ministers from one department of the government to another. My colleague, the Right Hon. Mr. St. Laurent, has resigned his portfolio as Minister of Justice and is now presiding over the Department of the Secretary of State for External Affairs, over which I had had responsibility for more than nineteen years. The Right Hon. Mr. Usley, who has been Minister of Finance for many years, has been appointed Minister of Justice in the place of Mr St. Laurent. Hon. Douglas C. Abbott has been appointed Minister of Finance, having resigned the portfolio he held as Minister of National Defence, and the Hon. Brooke Claxton has been appointed Minister of National Defence, navy, army and air included, having resigned the portfolio of Minister of National Health and Welfare. The Hon. Paul Martin has been appointed Minister of National Health and Welfare, having previously held the portfolio of Secretary of State, and the Hon. Colin Gibson has been appointed Secretary of State, having been formerly Minister of National Defence for Air.





William Lyon Mackenzie King (Prime Minister; President of the Privy Council)


Right Hon. W. L. MACKENZIE KING (Prime Minister):

Hon. members, I am sure, have been very much interested in the questions which have arisen with respect to Canada's participation in the settlement of peace with Germany, and I believe they will wish to know the position at the earliest moment possible. My colleague the Secretary of State for External Affairs has been giving very close attention to all phases of the question since it has come up. With the permission of the house it might be helpful if he were allowed to make a statement immediately. At the conclusion of that statement, unless some other question is raised, I propose to move the adjournment of the house.

Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Mr. Speaker,

during recent weeks the government has been giving serious consideration to Canada's participation in the peace settlement with Germany. The immediate question under discussion has been our response to an invitation from the special deputies of the council of

foreign ministers to appear before that body at their meetings in London, and to make known the views of the Canadian government.

In dealing with this question the government has tried to avoid any action that would either obstruct or delay the work of peacemaking. On the contrary, we have put forward our views in what appears to us to be moderate and constructive terms, and we have throughout coupled our expressions of misgivings over the procedure that was suggested, with practicable suggestions for alternative measures.

In the middle of December the government learned that the council of foreign ministers meeting in New York had appointed special deputies to take preliminary steps in regard to the peace settlement with Germany. Our information in this regard indicated that the special deputies would hear the views on the German settlement of allied countries which had actively contributed to the war against Germany, and would also discuss the procedure to be followed subsequently in preparing the treaty with Germany. It appeared to the government that the participation in the German settlement which was contemplated for Canada would not be adequate and might well be even less satisfactory than in the case of the settlement with Italy.

Because of these misgivings consideration was given to alternative procedures by which Canada and other allies could be associated in a more satisfactory manner with the council of foreign ministers in the preparation of the peace settlement. Certain proposals were formulated and discussed informally with the representatives of other governments during December and the early part of January. In these discussions, however, the government was somewhat handicapped by the fact that we had not yet received an invitation to appear before the special deputies nor had we been informed of the methods by which we would be enabled to make known our views.

The actual invitation to present our views on the German settlement to the special deputies was communicated to the Canadian embassy in Washington on Saturday, January 4, slightly more than a week before the day on which we were asked to make our representations in London. In this invitation, the government of Canada was asked to communicate in writing at its earliest convenience to the deputies for Germany its views on those aspects of the German problem which were of interest to it. The special deputies undertook to study these views and to submit them to the council of foreign ministers at its next meeting.


Peace Settlement with Germany

The text of this invitation appeared to the Canadian government to confirm its misgivings over the procedure envisaged for the settlement with Germany. No indication was given that adequate provision would be made for any of the allies other than the four great powers to discuss their views with the council of foreign ministers or to take part in the actual work of preparing the treaties. On January 14, therefore, the Canadian government through the High Commissioner for Canada in London placed before the special deputies a brief statement asking that consideration be given to an improved procedure for the preparation of the peace settlement with Germany. The suggestions made were designed to associate the allies more directly with the drafting of the treaty and to avoid the difficulties which had arisen in the settlement with Italy and the other satellites and which had become evident in the peace conference at Paris. The text of this statement has already been made public in a press release which was issued in Ottawa on January 16.

The special deputies made no reply to these representations. On January 17, however, the High Commissioner for Canada in London received a communication from the secretary of the special deputies asking if he would be prepared to appear on January 25 to present the views of the Canadian government on the German problem.

It appeared to the government that by this action we were placed in a somewhat difficult position. We had made what we thought were reasonable and constructive representations on the question of procedure. The special deputies were not apparently, in a position to take notice of these. We had, on the other hand, been asked again to participate in a procedure which appeared to us to provide an entirely inadequate method for associating Canada with the peace settlement. Not unreasonably, we wished to be assured that if we complied with this request we would not thereby appear to give our concurrence to procedures we did not regard as satisfactory. The High Commissioner for Canada in London was therefore instructed to place a specific question in this regard before the deputies. I shall now quote the text of a letter of January 20 from the High Commissioner for Canada in London to the secretariat of the council of foreign ministers in which this question was communicated: 20th January, 1947.


I have the honour to refer to your communication of 16th January informing me, on behalf of the deputies for Germany, that arrangements would be made for the hearing by the deputies of such views as the Canadian government might

wish to present on the German problem on Saturday, January 25, if this time was convenient.

I have informed the government of Canada of this invitation and I have been asked to address to the deputies the following inquiry on its behalf.

If the government of Canada now submits observations on the substance of the peace settlement with Germany, without consideration having previously been given to its comment on procedure, what assurances are the special deputies prepared to give to the government of Canada that opportunity will be given at a future date to discuss the settlement with Germany either with the special deputies or with the council of foreign ministers?

I have the honour to be, t Sir,

Your obedient servant,

H. A. Robertson, High Commissioner.

W. D. McAfee, Esq.,

Council of Foreign Ministers,

Lancaster House. W, 1.

On January 29, the special deputies replied orally through the chairman to the High Commissioner for Canada in London stating that their instructions gave them no power to give the assurances which we desired. There is still no certainty, therefore, that Canada will be able to participate in the peace settlement with Germany in an appropriate manner.

The matter remains undecided but we are still hopeful that some satisfactory solution will be found. The government is, of course, anxious not to prejudice the position, one way or the other or to do anything which would make a satisfactory solution more difficult.

In the circumstances, the government has felt that there could be no advantage in a Canadian representative making a formal appearance before the deputies, presenting his submission without the privilege of discussion, and then withdrawing. At the same time the Canadian government wishes to give all practicable assistance to the special deputies in their work, without prejudice to any representations it might desire to make at a later date. To this end certain preliminary views on the settlement with Germany have been prepared. In the belief that these preliminary views may be of interest, the High Commissioner in London has been instructed to communicate them tonight to the chairman of the special deputies.

I now table a copy of the memorandum in which these views are set forth. In the covering letter in which this memorandum is being communicated to the special deputies for Germany, our high commissioner says:

I have been instructed by the government of Canada to submit to the special deputies the attached memorandum which gives its views on the German peace settlement. In submitting

Peace Settlement with Germany

these views, the Canadian government desires to emphasize that they are preliminary only and will, as is pointed out in the memorandum itself, be affected by the views of other governments and by discussions between the belligerent powers which will later take place. The Canadian government expresses the earnest hope that a procedure will be worked out for these later discussions which will be satisfactory to all the countries concerned and reflect their contributions to the war against nazi Germany.

It is the understanding of the Canadian government that the presentation of this submission does not prejudice in any way Canada's subsequent appropriate association with other active belligerent powers in the making of peace with Germany. The Canadian government has taken note of your statement that the special deputies are unable to give any assurance in this regard. Nevertheless, the Canadian government hopes that you may report favourably to the council of foreign ministers the suggestions contained in the memorandum which I forwarded under copy of my letter of January 14.

May I emphasize, in conclusion, that the government desires to play a helpful and constructive part in the German peace settlement. We are fully aware of the major interest in this settlement of those states which, because of their power or proximity, must carry the main responsibility for enforcing it. We realize also the difficulty of negotiating a settlement through procedures that will provide equitable and adequate recognition of the interests of all active allied belligerents. In the waging of war, however, Canada contributed her resources of men and material without reserve. No question of partial participation arose. It should be possible, therefore, to ensure for Canada an opportunity to contribute to the negotiation of peace on the same basis of honourable partnership that characterized her contribution to the war.

Canada was proud to share the fortunes of war with her allies. She expects to share with them also the task of making a just and lasting peace.


1. The Canadian government presents below certain preliminary views on the principles that 'should, in its opinion, underlie the German peace settlement. 2. These views will naturally be affected by those of other governments and by the discussions which will later take place. The present Canadian submission is made in the hope that it may make some contribution to these discussions, and with a full awareness of the extreme complexity and fundamental importance of the whole question. 3. The Canadian people, even if they so desire, can not isolate themselves from this question of a German peace set tlement. Their vital concern with wars originating in Europe has been demonstrated twice in a generation. The importance to Canada of a satisfactory settlement of the German problem is therefore obvious, for distance gives Canada no escape from the consequences of a bad peace. 4. The Canadian government is fully aware of the major interest in the German settlement of those states which, because of their power or proximity, must carry the main responsibility for enforcing that settlement and which have suffered most from German aggression in the past. It realizes the difficulty of negotiating a settlement through procedures that will provide equitable and adequate recognition of the interests of all allied belligerents. In the waging of war, however, Canada contributed her resources of men and material without reserve. No question of partial participation arose. It should be possible, therefore, to ensure for Canada an opportunity to contribute to the negotiation of peace on the same basis of honourable partnership that characterized her contribution to the war. 5. Speaking before the plenary session of the Paris conference on August 2, 1946, the Prime Minister of Canada said: "The war effort of Canada was an all-out effort. It was planned, and carried out to the limit of our ability, for two main reasons. We wanted to help to bring the war to a victorious close at the earliest possible day. We also wanted Canada's contribution to be of an order which would entitle us to share effectively in the making of the peace. . . We in Canada felt that the measure of our participation in the war against aggression would have warranted a similar measure of participation in the decisions of peace." The views of the Canadian government in this regard have not changed. 6. The difficulty experienced by the Canadian government in expressing views on the German problem is increased by the fact that previous arrangements amongst the great powers, in which it had no part and about which it was not consulted, have, in some degree, predetermined the nature of the settlement. At Potsdam, and in the allied control council in Berlin, decisions were taken and practices adopted which have already affected materially the peace settlement. For this reason it is all the more necessary that the settlement should now be concluded by procedures which allow free and continuing discussion and examination by all the active allied belligerents. s

Peace Settlement with Germany Nature of the Settlement 7. The Canadian government believes that the settlement of the German problem, which is the aim of the present negotiations, must throughout their course be discussed with a .view to achieving a settlement for Europe as a whole. Justice must govern that settlement; above all, justice for the victims of nazi aggression. Of the responsibility of the German government and the nazi party for the war, there is no room for doubt. The German people, as a whole, however, must bear their full share of this responsibility. Through leaders whom they permitted to secure control of the resources of the German state and who openly proclaimed policies of shameless aggression, they led the people of the world into the most desolating war in modem history. The paramount purpose of the settlement, however, must be to prevent the recurrence of war. To achieve this the political and economic life of Europe should be rebuilt in such a manner that the German people may ultimately resume a peaceful and constructive place in the European and the world community without the power or desire to become a menace to their neighbours. It is evident, therefore, that the primary consideration in the negotiation of a settlement should be the welfare of Europe and the world as a whole, not merely the position of Germany or her relation to any one of her neighbours. 8. The settlement need not result immediately in a formal peace treaty between the victorious allies and the defeated enemy. There is at present no German government to sign such a treaty nor is it clear that any such government will exist in the near future. Even if it did exist, there is much to be said against having it sign any peace treaty at this time. It might indeed be preferable to regard the present negotiations as the preparation of an international statute constituting a new German state and governing the relations of that state with its neighbours and with other parts of the world until it can be replaced by a permanent treaty. An international statute of this nature should form a sound constitutional basis for the new German state. It should be both just and practical. It should be regarded as part of the structure of international law which will exist in the world under the United Nations. When circumstances permit, a German government might accede to this statute or it might be converted into a treaty under the United Nations and signed by Germany. 9. The political and ps3'chological defects of the treaty procedure adopted at Versailles in 1919 have long been recognized. It might be unwise to follow that procedure at this time, or to saddle a successor German government which must be kept weak with the formidable initial responsibility of accepting voluntarily an imposed treaty settlement which, of course, is bound to be unpopular and unwelcome to the people of Germany. Nor would the signature by such a government of a treaty at this time give any evidence or guarantee of its sincere acceptance. 10. The real guarantee of the durability of the German settlement will come first from agreement among the allies as to the basic principles which would underlie it, secondly, from their continued readiness to enforce these principles, thirdly from the consolidation of the strength of the United Nations, and finally in the controlled integration of German economic development within the framework of a wider and a closer organization of the general European economy. A German signature to a treaty of peace now would add little to the effectiveness of these fundamental and indispensable guarantees. Id. A second argument in favour of the statutory approach to a settlement is that it would lend itself to a process of peace-making by instalments. Some of the major political decisions involved in the German settlement will, of course, necessitate compromises by the powers concerned on policies held and proposals made. This may require a considerable period of time. There are, however, a great many aspects of the German settlement concerning which a high degree of agreement could be reached quickly and in respect of which there is everything to be said for ending present uncertainties with the least possible delay. 12. It is obviously important, from the point of view of general European recovery, that as many firm decisions as possible should be taken on the German settlement as rapidly as possible, and be made, operative forthwith. This will be difficult under the conventional. approach to the conclusion of treaties of peace, in which every decision must be kept formally in suspense until final agreement is reached on the document as a whole. A statutory procedure would, on the other hand, permit progress by instalments, bringing into force chapters of the new regime for Germany as they are agreed. 13. Furthermore, if the present task could be envisaged as preparing the first draft of an international statute for the future regime of Germany, this would facilitate the association Peace Settlement with Germany of smaller powers with that work and the establishment of ad hoe functional committees with varying membership, to prepare drafts of the many technical chapters which, in aggregate would constitute the statute. The German State 14. The general principle should be accepted that people who themselves recognize common national traditions and who have a history of national association should be permitted to live together within the boundaries of a single state if they so desire. To this principle exceptions should be made only when there are exceptional circumstances clearly justifying them. 15. The German people have for many centuries constituted a recognizable racial group in the centre of Europe and within the past century have formed a modern national state. It is believed, therefore, that a German state of some kind will have to be reconstituted in central Europe. The German people, however, have clearly demonstrated that they have not sufficient experience in democratic self government to prevent a centralized state becoming the instrument of despotism and armed aggression. For this reason, the German state should be federal and not unitary in character. Decentralization in Germany through federalism can be made effective and acceptable, particularly if it is carried out in the economic as well as in political fields. The political authority of the various states of Germany, and the economic ties between the various parts of Germany and the neighbouring sections of Europe should therefore be developed. 16. Whereas in. free democratic federations the central government may require adequate power to promote the general well-being, the central government of Germany, whose people have not yet learned to impose the restraints upon all government, both central and local, which are present in a truly democratic community should be granted only such authority as is necessary to maintain essential common services. A federal system in which residual authority rests with the member states and in which the powers of the central government are strictly limited and defined, would appear to be required for Germany. In particular, the constitution should so circumscribe the financial and military powers of the central government as to make it legally impossible for the reconstituted German state to build up the resources necessary to make war. ' 17. The government of Germany, and of the German states which comprise the federation, should be constituted in a democratic form which would make these organs of government genuinely subject to the control of the German people. The Canadian government regards a political system which subjects the executive branch of government directly to the control of a legislature, elected on representative principles, as being the most satisfactory method of achieving these purposes. Such a government should itself be subject to the rule of law within the state. This should particularly apply to the police department of government. To this end, the judiciary should be given a strong and independent position. 18. The relations between the central government and the governments of the states, and the organs of government generally, should be described in a formal constitution. Provision might be made for the amendment of this constitution, though for a period of years following the settlement, it should not be subject to change except with the consent of the United Nations. 19. The frontiers of Germany should be drawn with a view to securing in the European states system as great a measure of stability as is possible. This stability will, of course, not be achieved if large numbers of German 'leople remain in areas which are contiguous to the German state but are not included in it. A solution to this difficulty may be sought through transfers of population where frontier changes have been or will be made. It is the view of the Canadian government, however, that extensive movements of population which are made on political grounds without reference to economic and social conditions have grave disadvantages and may create serious dangers. It would appear preferable, therefore, to draw the boundaries of the new Germany on an ethnic basis to the fullest extent possible. Provision for the protection of such minorities as cannot be avoided, should be made through the appropriate organ of the United Nations. The principle of ethnic unity should not, of course, result in the inclusion in Germany of Austria, which is historically a separate unit and which has already been reconstituted as an independent state. The German Economy 20. As a nation, whose economic well being depends in no small measure on international trade, Canada is concerned with the level of prosperity in any of the great markets of the world. Europe is such a market and one of the main factors of the European economy is the industrial production of Germany, and in particular of the Rhineland and the Ruhr.

Peace Settlement with Germany 21. Canadian interest in the economic future of Germany is threefold. First, Canada is concerned to see that the Germans are not allowed to strengthen their economy to the point where it would be possible for them again to wage aggressive war. Secondly, Canada does not wish to see perpetuated in the German area conditions of economic depression and unrest which would adversely affect the economic and political stability of Europe as a whole. Thirdly, the Canadian government feels strongly that German industrial capacity should be utilized for the benefit of all countries, and in particular all European countries, which trade with the Germans. 22. As an important contribution to the attainment of these ends, the Canadian government would urge the early establishment of an economic commission for Europe. This has already been proposed in the United Nations, but has not been put into effect because of objections which, in our view, have no validity. Among other things, such a commission might be a useful agency for integrating German industrial development into the general European economy, and for approving progressive adjustments in the level of German industrial activity. 23. A measure of international control is necessary in German industrial areas such as the Ruhr, in order to prevent German industry from gaining sufficient strength to lay the foundations for future aggressive policies. Control of industries in such areas by a commander of an occupation force, while effective in the short run in eliminating German war potential, must terminate sooner or later. Nor can the Germans be trusted, for many years at least, to direct the economic planning of industries whose war potential is so large. For these reasons the Canadian government believes that the industries of Germany in certain areas, such as the Ruhr, should be administered by an international authority composed of representatives of all allied countries having a major trading interest with Germany. In the Ruhr, for instance, such countries might usefully form a consortium for this purpose. 24. Control of the German industries of the Ruhr or elsewhere cannot itself eradicate the recurrent danger of German industry collaborating with a central German government in policies of illegitimate expansion. In order that the roots of any such alliance may be eliminated, the tendency towards centralization and monopoly in German industry and finance should be removed. First steps toward accomplishing this purpose have already been taken by the removal from office of the prewar ownerp of large industrial concerns. Further action is necessary. It is important also to build up economic ties between the various industries of Germany and the economies of the European allies, in order to emphasize the interdependence of all parts of Europe. 25. It would not be possible to abandon allied control of industries in special areas of Germany, such as the Ruhr, until Germany, after a period of years, had acquired a new understanding of her responsibility for the prosperity of Europe as a whole. In the meantime, other countries should not be allowed to exploit German industries for purposes detrimental to the European and the world economy. 26. In the reorganization of the German economy, Canada desires that German foreign trade should be conducted on a basis which, within the framework of the economic system of Europe, will provide equal opportunity for all nations. Necessarily, such trade will for some time have to be conducted through agencies of the allied control authority. During this period equality of opportunity should also be provided and maximum facilities should be granted to all allied businessmen wishing to investigate the possibilities of trade with Germany. 27. On the question of German reparations, it is the view of the Canadian government that existing agreements will have to be reviewed in the light of the level of economy and standard of living which is to be permitted to Germany in order to prevent Germany continuing to constitute a centre of European economic depression. Reparation deliveries agreed upon should then be implemented as expeditiously as possible in order that the Germans may know what industrial capacity is to be left to them. The Germans should then be made to realize that within the framework of allied control it will be possible for them to reestablish favourable living conditions only through their own efforts. The Abolition of German Armaments and Armed Forces 28. Even though the German state were to be decentralized economically and politically, it would nevertheless be necessary to guard against the clandestine rebuilding of military or paramilitary formations, and the construction of plants designed for easy conversion to the purposes of war. The Canadian government favours the complete demilitarization of Germany, and in particular the prohibition of the construction or possession by the Germans of weapons adaptable to mass destruction, and of research for the purpose of constructing such weapons. The proposed statute or treaty for Peace Settlement with Germany Germany should contain specific provisions for the abolition of German armaments and armed forces. Germany should be left with only a police force for purposes of domestic security. For external security she will have the protection of the charter of the United Nations. 29. Effective international safeguards must be established against violations and evasions by Germany. These safeguards should be administered in the first instance, by the occupying powers and thereafter by any successor allied body which may be established. The Canadian government considers that the demilitarization of Germany is a special case and cannot be related to any general arms reduction plan adopted by the United Nations. However, it may be expedient to use for purposes of inspection and control in the demilitarization of Germany the machinery which will be created under the proposed general disarmament treaties or conventions of the United Nations. The statute or treaty should specify the action to be taken by the powers concerned in the event of a violation of those sections dealing with German disarmament. Conclusion 30. In conclusion the Canadian government thinks it wise to emphasize a truth which though it is recognized by all in principle is sometimes in danger of being forgotten in practice. The lesson of the last third of a century is that the peace and prosperity of the world are indivisible. The framing of a satisfactory peace settlement with Germany is not a German problem. It is not even a European problem. It is a world problem. The problem of preventing another aggression by Germany can only be solved as part of the wider problem of the prevention of aggression by any state. 31. Two main conclusions flow from this. The first is that those nations whose sacrifices and gallantry in a common cause have won for them the right to draw up the peace settlement with Germany are trustees for the whole community of nations which is to-day organized in the United Nations. Each nation which has a voice in the peace settlement is therefore under an obligation to exercise its rights and responsibilities as a peace making state not in defence of its own special national interests but in defence of the interests of the United Nations as a whole. The greater the influence of a state on the peace settlement the greater are its obligations in this regard. 32. The second conclusion is that- those nations which are charged with the responsibilty of drawing up the peace settlement with 83166-2J Germany cannot hope acting by themselves to settle the German problem. By themselves they can do no more than establish the framework of a settlement. In the long run, to settle the German problem, and other world problems, we must build the United Nations into an effective instrument for the preservation of the peace. This cannot be accomplished without some surrender of national sovereignty, and the institution ultimately of some form of world government. 33. In this regard the views of the government of Canada remain those expressed by the Prime Minister of Canada in the Canadian House of Commons on December 17, 1945, in the following words: "If we are agreed on the ultimate necessity of some measure of world government to maintain world security, we should by every means in our power support and strengthen every agency of international cooperation and understanding which can help to make the world community a reality. The peoples of all nations must address themselves to the task of helping to devise and shape institutions and relationships which will enable mankind to ensure, if not its salvation, at least its survival. We must work with all our might for a world order under the rule of law. This seems to be our only hope. Humanity is one. We must act in the belief that no nation and no individual liveth to himself alone, and that all are members one of another." 34. The making of a peace settlement with Germany is no isolated event in post-war history. It is one of many stages in the difficult and long process of creating and maintaining, through the United Nations, the conditions of world peace.


Waldorf-Astoria, New York, December 31, 1946. Council of Foreign Ministers New York City My Dear Mr. Ambassador: The council of foreign ministers at its recent meeting in New York decided to hold its next meeting at Moscow on March 10, 1947, for 'the consideration of German and Austrian problems and to appoint deputies for Germany and for Austria who are to start work in London on January 14. 2. The council is anxious that the governments of allied neighbouring states and of other allied states which participated with their

January 30, 1947