May 4, 1948



On the orders of the day: Mr. PATRICK H. ASHBY (Edmonton East): May I ask the Postmaster General if the postal services have a motto today and, if so, what is that motto?


Arthur Leroy Smith

Progressive Conservative

Mr. SMITH (Calgary West):

The postman rings twice.


Ernest Bertrand (Postmaster General)


Hon. ERNEST BERTRAND (Postmaster General):

I think I shall have to take that learned question into consideration.




On the orders of the day:


Alan Cockeram

Progressive Conservative

Mr. ALAN COCKERAM (York South):

I desire to ask a question of the Minister of Finance (Mr. Abbott) and in his absence I shall ask his parliamentary assistant to answer. My question is based upon a leading article which appeared in the Toronto Daily Star of last night written by Mr. Robert Taylor and dealing with the budget. My question is this: Has Mr. Taylor been privileged to have a preview of the budget speech to be delivered by the minister at some date in the distant future?

Supply-External Affairs


Robert Wellington Mayhew (Parliamentary Assistant to the Minister of Finance)


Mr. R. W. MAYHEW (Parliamentary Assistant to the Minister of Finance):

No, he has not.



The house resumed from Monday, May 3, consideration of the motion of Mr. Abbott for committee of supply.


Louis-René Beaudoin


Mr. L. R. BEAUDOIN (Vaudreuil-Soul-anges):

Mr. Speaker, some reference was made last night to the cost of our embassies and their usefulness, and that prompted me to look up the record. The annual report of the Department of External Affairs informs us that Canada has twenty-eight diplomatic missions and seven consular offices abroad in addition to the permanent delegation to the united nations, the military mission in Germany, and the liaison mission in Japan. There are 38 posts abroad, and some 800 other employees. The total estimates for the department amount to less than $10,000,000. It is a very small sum having regard to the magnitude and delicate responsibility of the task performed by the department.

In this interdependent age the channels kept opened and busy between Canada and its neighbours, both close and distant, are necessary for the life of a sovereign nation. The enlightening statement of the minister, the volume of well-weighed information which permitted the minister not only to depict the international scene to us but to arrive at decisions wrhich aim at averting war, constitute ample proof of the importance and value of our observation posts abroad and the high degree of co-ordination of our diplomatic operations.

Apart from sending a delegation to united nations last fall, during 1947 Canada was represented at 68 international conferences and meetings. In that same year Canada became party to 17 multilateral agreements and to 27 bilateral agreements. No matter how impressive these accomplishments might be, they represent only part of the work performed by the various branches of the department. Compared to the cost of a war, a few millions of dollars spent as a premium against war is indeed the very best investment this country can make. The minister has already stated that his department observes a sense of proportion in its expansion, and that should assure the country that the government is not under any delusion of grandeur.

While speaking about the work of the Department of External Affairs I wish to pay a special tribute to L. B. Pearson, Gerry Riddell and Escott Reid, and others with 5849-2274

whom I had the pleasure of working, for their good judgment and devotion to duty. They rate with the best diplomats, and they serve Canada well.

I would like to bring to your attention the name of Mr. Bruce Williams, with whom I was more closely associated during my stay in New York. We were partners on the third committee. He is a man of great ability who will certainly work himself up within a very short time to higher stations, and I wish him well.

A great deal has been said in this debate about social justice being the best deterrent to communism. I fully concur in that view. The united nations charter is filled with provisions which, if implemented, would inevitably bring about a higher order of social justice. We must, however, create the atmosphere of good will which will facilitate the institution of needed reforms. By following the course set by the right hon. minister of external affairs (Mr. St. Laurent), we are moving in a position to achieve those aims. Unfortunately, but necessarily, the set-up must include a show of strength, a plan of resistance against aggression.

At the international level we cannot move forward unless the threat of communism, which denies all justice and freedom, has disappeared. At the national level, we could and we should do better. This government is I think doing all it can, but only at the speed which co-operation and other factors permit, having regard to our complex constitutional system.

The social security measures proposed by this government in 1945 have been acclaimed all across the country. Some of the measures it was possible for this government to enact alone. Others necessitated agreements with the provinces. It is unfortunate that agreement could not be obtained. The guilty ones bear an enormous responsibility. Had these measures been enacted two years ago, as they could have been, no one can tell how instrumental they might have been in eliminating the advance of communism in this country, but in my view they certainly would have taken us a long way toward that goal.

In New York, on January 28, 1947, His Eminence Cardinal McGuigan of Toronto declared as reported in a special article by the New York Times correspondent published in the Montreal Gazette:

. . . that Canada's current socialization measures were among the best defences against what he termed the clever, insidious tactics "of Canadian communists and their fellow-travellers.

Supply-External Affairs

Because of this realistic attitude among Canadians, he said, the country is adjusting itself in a well-ordered way to the post-war world.

We shall pursue that course of adjusting this country in a well-ordered way to the postwar world, removing obstacles as quickly as possible.

We know that we cannot be free alone, in an environment of enslaved neighbours. If freedom is to survive in Canada, it must be preserved elsewhere. Without freedom, we cannot enjoy and develop the spiritual and material wealth we possess. What we must bear in mind in this matter of a total preventive war is not the cost but the objective, namely, peace and security for countries with governments of the people, by the people and for the people.


William Irvine

Co-operative Commonwealth Federation (C.C.F.)


Mr. Speaker, I am very glad to have this opportunity of expressing my views on the matter now before the house. It is probable that the desire of so many to speak on this issue does not arise from any conviction on their part that they can solve all or any of the problems which confront the world today, but it does mean that we are seized with a sense of the great importance of the questions which confront the various nations and which directly or indirectly affect our own. It also means that we feel obligated to express our own views and those of the people we represent in this house.

I am sure we are all grateful to the right hon. Secretary of State for External Affairs (Mr. St. Laurent) for his masterly .presentation to the house of a complete picture of the international scene. I think it may be said almost for the first time that Canada now has an international policy although there are some phases of that international policy, as I see it, which perhaps make it worse than having no policy at all. Nevertheless it is well that we have recognized the necessity of taking an active part in international affairs, and having a policy of our own in regard thereto.

I will mention a few outstanding features of present world conditions as I see them. For instance, the economic plight of Europe and of the world in general; the deplorable situation in Greece, Korea and China; the failure to find a basis for a peace treaty with Germany; the great need on the part of all nations to protect mankind from another world war, and the present tendency, which we see everywhere, to widen the breach between the two great leading nations of the world in -such a way as to lead ultimately to the third world war which we fear so much.

I do not intend to deal with these important matters individually. I move at once to what appears to me to be the heart of the matter in international affairs, and that is the way of life practised by the two most powerful nations in conflict in the present situation- communism as practised in Russia and capitalism as practised in America.

These ideologies are clashing, and practically all the other nations in between. these two either already are or are gradually becoming satellites of one or the other. These things are happening through military or economic pressures, and needless to say all the emotions which the traditions, cultures, prejudices and fears on both sides can summon have been called into play in the battle of propaganda and diplomacy which has raged continuously, especially between these two contending forces, since the cessation of hostilities in world war II. In consequence an international hysteria, rather than that reason and good will which might have been expected from nations who fought side by side as allies in the greatest war of all time, has dominated international affairs. As a very natural consequence every constructive move toward peace, every sane proposal for the reconstruction of world economics, has been blocked, and the united nations organization, in which the hopes of mankind reposed, has been weakened to the point of ineffectiveness.

The Marshall plan, so-called, the assistance of which the countries of Europe need so very much, cannot be freed from the bedevilment of the present diplomatic conflict; for no matter how much Europe needs that help, the plan provided an opportunity for those in a position to give that help to use it, if they so wished, in their power policy and in their struggle to gain privileges or to gain points against contending nations.

I do not say, of course, Mr. Speaker, that the United States of America, which is the nation privileged to be in a position to render the help to which I refer, will use it in this way; but I say the opportunity is there, and those on the other side who know the opportunity is there are afraid of it. During the Italian election, some people in high places in the United States went so far as to intimidate the electors of that nation by stating that if they did not vote in a certain way there would be no help forthcoming to them from the economic assistance expected from the United States of America. That sort of thing, that sort of feeling, which is whipped up and stimulated by all kinds of propaganda, cannot be expected to lead to anything other than distress, hate and futility.

Supply-External Affairs

In spite of the present deadlock in the international field I do not believe that war is likely in the near future. I do not believe, for example, that Russia either wants war or is in a position to wage war. I do not believe that the people of the United States want war, although they are in a better position to fight one successfully than Russia appears to be. In addition there can be little doubt that the destructive possibility of war in the atomic age has a sobering effect on all the nations of the world.

While these observations may be accurate in the main, they do not by any means preclude war. If things go on as they are going, war will be ultimately possible at least. Of course, we blame Russia, and Russia blames us-that is to say, the capitalist democracies. I should not like to be a judge of where the largest part of the blame should fall. The make-up of the star actors in the present world tragedy is too good to permit ready recognition of the actors; and history will have to pass judgment on what has taken place in the world during the last two years.

There are no doubts about the fact that there are real differences between the Russian way of life and ours. There are enough of those differences to bring about friction among human beings carrying on the ordinary affairs of life; but a good deal of the friction, a good deal of the fear and the hate so manifest during the past year or so, has arisen over alleged occurrences and actions which have no basis in fact at all.

I provide just one example of that, Mr. Speaker, and it is a striking one. I am going to quote from a special article from the New York Times to the Globe and Mail of April 11, which reads as follows:

The famous "Protocol M", allegedly containing communist information bureau instructions for action by German communists, has been proved to be a forgery, it is learned from a completely reliable source.

The British intelligence service, which had been hoodwinked originally into considering the protocol a genuine document, discovered that it actually had been prepared by an anticommunist German. After careful detective work the author of the document was tracked down and arrested.

It may be recalled that considerable fuss was made last winter when the protocol was first foisted upon the British, who released it to the press in all good faith, convinced of its genuineness.

This incident is characteristic of one phase of the present-day nervousness and suspicion in Europe. A network of forgers and falsifiers- some clever and some not

is busily peddling allegedly secret documents to embassies, intelligence officers, ministries and newspaper correspondents.

The market for such "phonies" is probably better today than ever before in history.

Hon. members will recall that when that protocol was made public, newspapers all across this continent wrote editorials upon it. The editorials written were not such as to further the cause of good feeling and good relationships amongst nations. I point out to you, sir, that this is only an example of that sort of manufactured evidence which sometimes is used with great effect by the press and others who may be better informed about the origin of these things, and who use it with devilment in their minds rather than with the idea of presenting the truth.

Our fears and our hates of the Russian revolution subsided during the years of war; our differences went to sleep on the battlefield drenched in the blood of Russians, of the British, the Americans, and all the people of the allied countries. I cannot, even in these days of estrangement and bitterness, forget the Gargantuan efforts and prodigious sacrifices of our Russian allies at that time. Nor did we stint our praise of their valour and their powers then. I presume they praised the American, the British, the Canadians, and the rest in similar fashion. They could not have been blind to the unsurpassed heroism of the British navy and the British merchant marine who plied the North sea and the Arctic despite submarine and bomber. Surely the failure to retain some modicum of that fellowship, generated in the hell-fire of a common danger, is the greatest failure of all. I hold in my hand the inscription on a scroll which was sent to the Russian people just at the close of the great war. The scroll was signed by many dignitaries of the city of Toronto in Massey hall, and it was written by none other than Doctor E. J. Pratt, Canada's distinguished poet. I want to read it:

We have marched with you under allied banners,

That we might freely till our soil for bread, And slake our thirsts at the same natural fountains;

For to that end we counted up our dead.

Have not our streams-St. Lawrence and the Volga

Attested in these years their sisterhood?

Have not our seas-the Atlantic and the Caspian-

Savoured the salt and iron of our blood?

And we would march with you in peace tomorrow,

To an horizon starred with steady goals,

Where granaries await our mortal hungers. And the deep-quenching wells invite our souls.

I am fully convinced that many things that the Russians believe and say about us are not true.


John Lambert Gibson

Independent Liberal

Mr. GIBSON (Comox-Alberni):

Did you get a reply to that? I ask just for information.

Supply-External Affairs


William Irvine

Co-operative Commonwealth Federation (C.C.F.)


I do not know whether there is a reply. I am equally convinced that many things which many of us say and believe about the Russians are just as false as some of the things they say and believe about us.

I turn to Edmund Burke, the great British liberal, to find an historical parallel in reaction to revolution. The words I am about to quote from him were written with reference to the French revolution, and while no doubt they were true as a superficial appraisement, they give no inkling at all of the nobler and better things which emerged despite the wild uncontrollable passions which were then let loose. Burke says:

France has bought undisguised calamities at a higher price than any nation has purchased the most unequivocal blessing! France has brought poverty by crime! France has not sacrificed her virtue to her interests but she has abandoned her interests that she might prostitute her virtue . . . France, vThen she let loose the reins of regal authority, doubled the licence of a ferocious dissoluteness in manners and of an insolent irreligion in opinions and practice . . . France, by perfidy of her leaders, has utterly disgraced the tone of lenient council in the cabinet's princes and disarmed it of its most potent topics. She has dark, suspicious maxims of tyrannous distrust . . . They have found their punishment in their success . . . Their cruelty has not even been their base result of fear. It has been the effect of their perfect sense of safety, in authorizing treasons, robberies, rapes, assassinations, slaughters and burnings throughout their harassed lands.

I believe that if we change the word "France" to "Russia" we shall have what many people are saying and thinking today about Russia and about her revolution. But Burke changed his mind, and he was a big enough man to admit that he had done so; for shortly afterwards, with reference to the same subject, he wrote:

If a great change is to be made in human affairs, the minds of man will be fitted to it; the general opinions and feelings will draw' that way. Every fear, every hope will forward it; and then they who persist in opposing this mighty current in human affairs will appear rather to resist the decrees of Providence itself than the mere designs of men. They will not be resolute and firm but perverse and obstinate.

And so with the fear of those things which were regarded as so vicious. Those who had abandoned the interests of France in order to prostitute her virtue, now appear to have been instruments of the decrees of Providence.

However low our estimate of the Russian way of life may be, and I have no doubt it is quite low in many respects, their revolution did mean an improvement for them. At least they thought so, and I believe that in reality

it was. They identified all the evils of czarism, from which they had suffered prior to the revolution, with capitalism, and therefore they are just as much afraid of our capitalism as we are of their communism.

The Russian people think they gained by their revolution something which they would rather die than give up. Some of us, all of us I think, feel that during the centuries, in our struggle for liberty, we have gained something which we would rather die than give up; and as things are presented to us now, it appears that Russia must either die or give up some of the things she believes in, or we must either die or give up some of the things we hold so dear. I believe that history will prove that neither the Russians nor the western democracies need either die or give up the things they hold dear.

On the other hand, there are features of our wray of life which we ourselves do not want and which we are struggling day by day to eliminate, and no doubt there are in the Russian way of life features which we certainly do not want and which even the Russians themselves may not want, and which they may be struggling to get rid of and ultimately will get rid of, just as they got rid of the czar.

A world war, however, to determine which of these two ideologies shall dominate in the world, would be in my view the greatest of all great tragedies of all time; for in such a war, whichever of the two was victorious, it would mean that there would be foisted on the world a system which the peoples of the world would not want-because there are elements in our system which we do not want, while there are elements in the Russian system which we do not want and which perhaps they do not want.

Perhaps there is not enough knowledge and good will among men today for us to discover that desirable synthesis between these two extreme ideologies without our fighting it out on the battlefield, as has been the custom in the past. I hope, sir, we shall be able to struggle through to that synthesis without a third world war.

I think it might be possible mutually to agree to let each system demonstrate its ability to serve human needs and to leave history to judge between them. There is an old parable, which most of us will remember, about the tares and the wheat being allowed to grow together until the harvest. I see no reason why Russia should not be permitted to go ahead with her system in Russia and do the best she can with it for her people, and why we in this country and in the United States and other countries should not proceed with our systems that we like best and do the same

Supply-External Affairs

thing. I prophesy that, if that can be managed, fifty years from now the world will take neither what we have now nor what Russia has now.

I say therefore that it would be nothing short of tragedy if we were to fight another world war over something that nobody wants. The people of the world will ultimately want planned economic security, which Russia proclaims, whether she obtains it or not; but they will also demand that political liberty which we proclaim but which we have scarcely yet attained.

Security with freedom is the objective of the human being today. Those two constitute the policy of democratic socialism.

I should like now to turn to a writer with whom I have heartily disagreed but with whom in this particular I have some modicum of agreement. I refer to Walter Lippmann. He says:

The beginning of wisdom on the Russian question is, I believe, to recognize the historic facts, that the division between eastern and western Europe, the rivalry between Russia and the nations of the west, did not begin with Marx, Lenin and Stalin.

He goes on to say in substance that the rivalry would not end if the Soviet regime were overthrown; that this rivalry, which has so recently become a problem to America, has been a problem to Britain for a hundred and fifty years. But he goes on to say-and this is the part I particularly desire to quote:

We must give up the notion that the choice is between one world, in which the Russians are our partners, and two worlds, in which we must annihilate the Russians or they must annihilate us. I do not believe that we must annihilate the Russians or fight them; that we must have either a perfect peace or a total war. I believe that the best policy is to recognize that the rivalry will remain, and not to think it could be abolished by the united nations or even by a victorious war.

I do not agree that rivalry between Russia and America must needs be of a permanent character. But I do agree, and for somewhat different reasons, that the smaller democratic nations who are being pressed by both Russia and the United States do not have now to perch themselves on either horn of the dilemma. I believe that in doing so they are jeopardizing the great cause of peace and that they are refusing to face the issue.

I have in my hand an editorial which appeared recently in the Ottawa Citizen. It says:

Today Washington, out of fear of Russia and communism, is backing the reactionary parties everywhere-in China, in France, in Greece, in Turkey, and above all in Italy . . .

That is a point of view which it is hard for us to escape accepting at the present moment.

I should like to advance the idea that the democratic and socialist countries of the world should make an attempt to hold the united nations together in spite of all the disappointments and the seeming futility of the past years. I believe they should endeavour to take a position which will stand between these two extreme powers, and try at that point to promote the principles of security and freedom. I believe that those nations should declare themselves as being opposed to the worst features of American capitalism, with its tremendous centralization of wealth, with its monopolistic control of the means by which the people of the nation must live, with its periods of poverty and unemployment and all the evils against which we are struggling here. I believe that those nations should refuse to endorse that system in toto, and should also refuse, as they are doing, to endorse what has been called the totalitarian attitude of the communists in refusing to grant to their peoples, as we are led to believe they do, the political freedom which means so much to us in this country and to the people in the other democratic countries of the world. I think these nations should fearlessly reject the worst features of both those systems and be prepared to accept whatever best there may be in them. Today I know there are some, even in this parliament, who advocate a union of nations outside of the united nations. To do that, I suggest, means that the united nations is dead, and that we are forming what will ultimately be only another military alliance which will endeavour to operate as the balance of armed strength between the two great military powers of the world. Whatever else should be done, therefore, I believe we should stand by the united nations organization.

I notice that the minister in his speech declared emphatically that there could be no co-operation whatsoever with Russia. Viewing the evidence over the last few years, I must admit that there appears to be a great deal in what he says in this regard. But that is not the end of the question. I do not think it is fair to say that such co-operation cannot be made possible under any circumstances. In the first place I should like to point out to the minister that we co-operated with Russia during the war; so far as I know, it was fairly effective co-operation. I should also like to point out that we have been trying to co-operate with Russia in the united nations, and at

Supply-External Affairs

least in one instance-which I believe the minister mentioned in his speech, although he did not quote it as an example-co-operation was secured; I refer to the Palestine issue, which was dealt with by the assembly of the united nations. I say therefore that it is possible that co-operation may be ultimately achieved, even with Russia. To abandon the hope of it simply means that we are opening the door to ultimate war. For if Russia is bent upon conquest of the world, as we are told is her aim in forming her group of satellite nations, and is bound to deprive the world and all nations in it of their liberty-I say, if that be true, and if it be impossible to cooperate with Russia in any way to mitigate their intentions or to prevent that kind of thing, then there is only one course for the world, and that must be war. I see no way out of it; and at the present time I think it is much too soon to say that war is the only alternative.

As a matter of fact I noted also what I think was a sort of defeatism on the part of the minister when he said this, as reported at page 3444 of Hansard:

No one should expect, for instance, the machinery of the united nations to produce a solution for problems on1 which the two most powerful nations of the world may have diametrically opposed views that cannot be reconciled.

This is exactly what we expect the united nations will do. It is their job to find the solution. Anybody can throw up the sponge and say: It is hopeless; let us go home and make cannons. Apparently that is the policy to which Canada is now committed, if I read aright the arguments of the Secretary of State for External Affairs as reported at page 3449 of Hansard, where he advocates the formation of a defensive group of free states which would not be, he says, a counsel of despair, but a message of hope. He goes on to say:

It would not mean that we regarded a third world war as inevitable, but that the free democracies had decided that to prevent such a war they would organize so as to confront the forces of communist expansionism with an over-whe'.ming preponderance of moral, economic and military force and with sufficient degree of unity to ensure that this preponderance of force is so used that the free nations cannot be defeated one by one.

If it ever comes to the point, Mr. Speaker, where it is necessary to stop the expansionism of the communists by military force, I hope we shall have the preponderance of moral, economic and military force to do it. I have no objection, in a world such as that in which we live today, to the making of certain preparations for any eventuality. I think they properly should be made; but to say that we

must abandon ourselves to that, and that the idea of co-operation is a hopeless one, means that the united nations is done, that we are entering upon another great race for the building of armaments and preparation for war, and that the next war may be counted as being only so many months or years away.

It is said that even the beasts of the forest which ordinarily prey on each other, herd together when they are overtaken by a forest fire. Surely it is not too much to hope that nations of human beings will be able to find some basis of co-operation before we are herded together in what would be much worse than a forest fire-an atomic war. That would be worse for the people of the world than any forest fire has ever been for the animals of the forest.

The minister referred to the dynamic power of democracy. Perhaps that is the weakest part of the whole position so far as we are concerned. Of course there is some dynamic power in our love of political democracy and the extent to which we enjoy it. When anyone threatens to take that away from us, we are prepared to fight for it if necessary, and properly so. But that is not much when measured in the light of the whole democratic idea. There is a great dynamic force in the coalbeds of Alber.ta; but they are not of much use until the coal is actually dug and used to develop energy. Until our democratic principles are actually applied there can be no dynamic force from them. We shall have to dig them up out of the dreams in which we have locked them.

Our democracy is largely one of sentimentalities. If we had a democracy which was vitally active in the economic forces of this country there would be no speeches made in the House of Commons in fear of communism -none whatsoever. It is because we lack that dynamic force that we are afraid of communism. And we are afraid of communism. We might well be, when every effort to release the democratic dynamic is blocked by reaction, and the people are offered instead the sentimentalities of abstract principles.

There is just as much need for democracy in work, democracy in income, democracy in opportunity to work, democracy in opportunity for education, democracy in opportunity to enjoy health, democracy in opportunity for leisure, democracy in opportunity to have a sense of security as there is for democracy at the ballot box. Show me the man who has work to do, work that he likes to do, work which ought to be done in the interests of himself and his community; show me the man who has an income for doing that work

Supply-External Affairs

sufficient to meet his requirements of life, show me the man who has his family and his home and who lives comfortably, and who has the opportunity to maintain the health of his family and to give them an education, the man who has a little of the leisure required to enable him to enjoy the better things of life-show me the man who has in addition to these essentials a sense of security, and I will show you a man who can neither be made a communist nor wants to be a communist.

I say our fears of being upset by a thing like that means that we have not the dynamic urge in our boasted democracy. The weak part of it lies just there. While we talk about it, while we are even ready to fight for it, we have not got it. I make a plea for democracy in economies in Canada, and then there would be no need for us to be afraid of communism at any time.

I could spread out that idea and say that if we are careful now not to give hostages to reaction, but to put into operation the economic ideals of democracy between nations, and to give access to the natural resources of the world by making them available for the use of all peoples, if we will follow those economic ideals of democracy we shall have the same success in the international field as I predict in the national.


John Horne Blackmore

Social Credit

Mr. J. H. BLACKMORE (Lethbridge):

Mr. Speaker, a good deal of beautiful idealism has been expressed in this debate. I do not suppose anyone would quarrel with any of the remarks made by the hon. member (Mr. Irvine) who has just taken his seat. He delivered a beautiful speech, full of statements which might mean very much, and might not mean very much-unless we have some idea of how to achieve the objectives he envisaged in the statements he made.

I have listened to the speeches delivered in the hope that someone would tell us how we in in this parliament, we in Canada, ought to proceed in order to be able to attain these beautiful objectives. I have listened most earnestly for someone to tell me just why it is we are in this deplorable state of affairs. I fear I must have been out when any suggestions of the kind to which I have referred were made, because thus far I have not heard one statement which would indicate why we are in the condition in which we find ourselves, or how to get out of it.

I know that for anyone like me to presume to answer questions which have not been touched upon by any of those who have preceded me is, in a way, a somewhat foolish procedure. But sometimes one has to attempt 5849-228

even the foolish. We are all agreed that we are faced with grave danger in the world, everywhere. Every nation is faced with it. We have the danger of global war such as that from which we have just emerged, the danger of slavery which we see rolling upon us like a tidal wave, and of which we see all too much even in our own midst under our present system. We see the danger of starvation which is facing people not only in the devastated countries but even in our own and in the United States. The number of people who right now in our own country are wondering where in the world they will get the money to make ends meet during the next six months reflects no credit upon us.

The general feeling of mankind is one of fear of these dangers, and, as the minister pointed out, a "lack of trust" in everything. Men have ceased to trust themselves: far too many of them have ceased to trust even God.

The general situation which faces us in Canada in so far as we differ from the rest of the world poses for us four questions for which we are all struggling to find an answer. What direction shall we as a nation seek to steer ourselves into? Shall we aim at greater and greater independence as a nation and seek to grow up fast to compete successfully with such giants as the United States? Shall we seek closer co-operation with the other members of the British commonwealth? Shall we drift into absorption in the United States, which the United States seems all too ready to see come about and to help to achieve? Shall we seek submergence in some gigantic, ill defined uncertain entity called the united nations? I think every person in Canada would like very much to have the right answer to those four questions.

Now may we turn from the general situation to seek to discover, if we possibly can, something of the cause of this situation. What is the material immediate cause of this general situation which everywhere prevails? What should be done about it? First, by the world, if we are free to advise the world? Second, by the United States? Third, by the Dominion of Canada? May I now answer briefly the four vital questions which I have raised.

The immediate material cause of the general situation is the United States of America. If you want to know where lies the cause of the distrust in men all over the earth, look to the United States of America-the United States, with her enormous productive potential, with her rich and varied resources, with her large population, with her greater and greater self-sufficiency, with her tremendous

Supply-External Affairs

degree of industrialization, with her vast accumulated wealth, but with her faulty domestic distribution.

Notwithstanding the fact that this nation is far wealthier than any other nation that ever existed on the face of the earth, she has as many people per hundred within her borders who are on the verge of starvation and who are filled with dread as we in Canada have. There is something radically wrong with distribution in the United States -the United States, with her gifts to which I have referred; the United States, determined to sell abroad all that she possibly can, but equally determined to buy as little from abroad as she possibly can, particularly of any commodity that she does not especially need; the United States, guided by fallacious principles of trade and finance, and with a grossly misinformed people. I hesitate to put into words my impression of the general standard of knowledge of the people of the United States.

To think that an electorate with so little information, so little understanding of the things that really make or mar the peace and prosperity of mankind is charged with responsibilities such as the United States has been forced to assume by reason of her development through two wars; to think that, is to think oneself onto the border of dismay. To think that uninformed people can tmn out of office, and do turn out of office, any public official in the United States, no matter how much knowledge and understanding he may have, fills one with great apprehension indeed. How important it is that such an electorate should be well informed!

When we reflect that the United States, in addition to all these disadvantages, could be controlled by evil schemers deep within the United States administration, then I believe even the most generous, the most charitable, the most conservative of us, must think of the effect there would likely be if a dangerous monster should come to be at large among the settlements of the world.

There will be those, and I fancy the majority of the members of the house and of the country will be among them, who will wonder why I have said what I have about the United States. I say that after due consideration and some study. I say that notwithstanding the fact that I was born in the United States, and I love the United States dearly. But there is no use failing to face the facts as they are. We must be realistic.

What should the nations do about the general situation? First, I would say to those who might happen to be interested, that they

must learn the truth about the United States as soon as possible. Everyone should. Second, they should refuse to sign any binding agreement until they know the full truth about the United States and that agreement. Third, they should co-operate with the British commonwealth for mutual protection. Fourth, they should learn with all possible haste the true principles of money, production, distribution and trade. Fifth, they should guard their national sovereignty as they would guard their lives. Sixth, they should become as nearly as possible self-sufficient, and at the earliest possible moment.

I base these bits of counsel upcm the reading I have done during the last fifteen years, particularly with relation to the dreadful experiences that men had in the depression and those that led up to the war.

What should be done by the United States about the situation? If there should be in the United States an official generous enough to read these remarks of mine, I offer some suggestions in plain humility and good will and with love. First, reform your monetary system immediately in accordance with the monetary theories of Andrew Jackson and Abraham Lincoln, two of the greatest patriots you ever had, men who were well informed and wise. In other words, implement the principles of your divinely-inspired American constitution as regards currency, coinage and credit. Thus you will be able to replace your debt-financing system with a credit-creating system. Then United States dollars both at home and abroad will correspond with your production and will not depend upon the amount of money you may or may not be able to squeeze out of the taxpayers or borrow from your lending institutions.

Next, revert to the lend-lease or mutual aid system for helping the shattered people of Europe and the dependent neighbours who must for some time look to you for help. In doing this, use debt-free dollars, not dollars which add to the tax burden on your people, do as Abraham Lincoln and Andrew Jackson would have done.

Next, devise a method of internal distribution to raise the living standard of your people to something like the standard which ought to obtain in the richest nation on earth.

Next, adopt in practice and in fact, as well as in theory and in talk, the policy of "live and let live" towards all men everywhere in the world.

Now what should be done bj' Canada? First of all, become as nearly self-sufficient as possible, and that as soon as possible. This business of depending on people outside for the

Supply-External Affairs

necessities of life, such as coal and gasoline and steel and other things you must have, is unsound and must be abandoned if you hope to survive, Canada.

Next, draw closer to the British commonwealth for co-operation and security, developing imperial preferences, and, if the opportunity offers, developing the sterling area of financing.

Next, insist upon guarding your sovereignty over freedom of action. You had all the trouble you could deal with when you were free to choose among all men. What will be your chance to survive if you become restricted at every turn by artificial hindrances which could come as a result of signing ill-considered international treaties?

Next, adopt a system of internal distribution to raise the living standard of your people somewhere near to what it ought to be in a nation capable of producing $3,500 worth of goods and services for every family in 1935, a nation w'hich could produce $11-8 billion worth of goods in 1944, or $900 for every man. woman and child in Canada.

There will be many who will question what I have said with regard to the United States. With your permission, Mr. Speaker, I shall revert to the question whether or not the United States is the main immediate cause of distrust and anxiety.

I have in my hand a volume published in 1929, written by a man named Ludwell Denny. I do not know* how good an authority Ludwell Denny is, but all you have to do is read about a hundred pages of his book and notice the documentation in almost every line to be convinced that he needs no degree or high-sounding position to be a man whose words are worth paying attention to. This book is called "America Conquers Britain." So America was at the job of being a menace to the world back in 1929 and has been in the game for years. I judge therefore that I have not been unjust to her. Let me read, from the last page of this book, words which have tremendous meaning, I think, for people in the wrnrld today:

We were Britain's colony once. She will be our colony before she is done; not in name, but in fact. Machines gave Britain power over the world. Now better machines aTe giving America power over the world and Britain. We are not content with the richest country on earth. Geniuses of mechanical efficiency, we cannot organize an equitable distribution of our national wealth.

That is serious point No. 1. It goes on:

Instead we exploit nations less rich. There may have been some excuse for Britain on her poor island to go imperialist. There is none for us with a near-continent upon which to thrive. But we are not without cunning. We shall not make Britain's mistake. Too wise to try to govern the world, we shall merely own it. Nothing can stop us. Nothing until our financial


empire rots at its heart, as empires have a way of doing. If Britain is foolish enough to fight us, she will go down more quickly, that is all.

Of course American world supremacy is rather horrible to think about-quite unthinkable, as they say of an Anglo-American war. But American supremacy can hardly be worse than British and others gone before. Our weapons are money and machines. But the other nations of the world want money and machines. Our materialism, though not our power, is matched by theirs. That is why our conquest is so easy, so inevitable.

W'hat chance has Britain against America? Or what chance has the world?

There will be those, of course, who will say, why quote the words of this man. But I think every man who reads steadily through the 407 pages in this book will be convinced that in speaking as Mr. Denny does in these closing words he is in no way exaggerating or misleading the world. May I, before leaving the passage, comment on four statements made therein? I will repeat them and then comment:

. . . we can not organize an equitable distribution of our national wealth.

That is exactly the thing that is wrong with the United States, and that is exactly what makes her such an all-forbidding horror to the world. She does not know how to give her own people the good things she can produce, but she can force them on other nations to destroy their economies and wreck them. Again he says, "But we are not without cunning." Well, Mr. Speaker, that was clearly demonstrated in the Bretton Woods agreement, in the Washington loan agreement, in the united nations charter and in the Geneva trade pacts. It was clearly demonstrated there that she was not without cunning, and that she is determined to use that cunning ruthlessly and unscrupulously. Again:

Nothing until our financial empire rots at its heart, as empires have a way of doing.

May I make this comment in passing. If it were not for the fact that there is a chance that the financial empire of the United States will rot at an early day, our position in the world might indeed be hopeless. But there is that chance, and who is to say that out of that chance may not grow our greatest hope for freedom and independence in the future?


American supremacy can hardly be worse than British and others gone before.

That statement I challenge head-on, unequivocally. For the British, when they expanded and sold to the world, never refused to accept goods in return. The result was that no matter how deeply the Argentine might go into debt for her railroad, or any other nation go into debt for goods which she bought, she always knew that if she could produce goods and offer

Supply-External Affairs

them to Britain, in return Britain would receive the goods in cancellation of the debt. The United States refuses to accept such goods. Therein lies another aspect of the terrible danger which is the United States today.

America wrecked the world in the great depression. There were several fundamental causes of the great depression; with these I should like to deal.

In the first place, the thing that brought on the great depression was the cessation of the American foreign lending which cessation began in real earnest after the middle of 1928. The United States had lent huge sums of money to other nations of the world with which to buy her goods. From these loans other nations obtained dollars with which they bought United States goods which gave the United States markets. When the United States ceased to lend these vast sums, the dollars were no longer available to buy United States goods, and when the United States people were unable to sell their goods, their confidence in their general economic structure fell and the depression came on. Second, the suspension of immense United States expenditures on tourist traffic in Europe in 1928 and 1929; third, the suspension of remittances home by European immigrants in the United States; fourth, the sharp upward revision of the United States tariff, the Hawley-Smoot tariff in 1930; fifth, the adoption of the gold standard by European countries. England, as an example, went back on the gold standard in 1925, committing thereby one of the greatest blunders in her history. Sixth, the tremendous weight of United States economy. The United States production and money income in 1929 were equal to that of all the rest of the world together. Seventh, the fact that the United States banking system began to withdraw money from circulation in the United States until the amount of money in the United States fell from $23 billion in circulation in 1929 to only $15 billion in 1934. Eighth, the fact that the United States knew of no means whereby they could put into the hands of their consumers the purchasing power needed to enable United States consumers to buy the $5 billion a year worth of United States goods which that nation had been selling to European countries in exchange for the money the United States had been providing the European countries with which to buy United States goods.

These eight occurrences, all of them except one, took place within the United States, and were matters over which only the United States had any control whatsoever directly or

indirectly. We must therefore consider that the depression was a purely United States affair.

Besides the wreckage resulting from the United States-produced depression, America had already gone far toward destroying the economies of other nations by industrial aggression, as is so well pictured in the book "America Conquers Britain" by Ludwell Denny.

Still some will say: Are you sure now that these statements you have made are accurate? Hon. members will desire to have evidence which will be unimpeachable in respect of these facts. There is a document which I am very happy to have had drawn to my attention; it was prepared in the United States and submitted to the United States administration in 1943. It was issued by the United States Department of Commerce, Jesse H. Jones, Secretary, Bureau of Foreign and Domestic Commerce, O. P. Hopkins, Acting Director, and is entitled "The United States in the World Economy", the international transactions of the United States during the interwar period; prepared in the international economics and statistics unit by Hal B. Lary and associates, with a foreword by Wayne C. Taylor, Under Secretary of Commerce. I imagine that if there is anything authentic to be found in the world, this document is probably authentic and can be accepted as such. Hon. members will be interested in hearing some of the things which are in the document. It is revealing. In the foreword at page VI the following appears:

The functioning of the American economy as a whole presents some of the most baffling problems. On the solution of these problems, through maintenance of a high and reasonably stable level of economic activity in the United States, the interests of this country and of other countries are most clearly and indisputably united.

A world economic structure organized on the basis of equal treatment and with large scope for free enterprise cannot be maintained in the face of such reductions in the supply of dollars as have occurred in our international transactions in the past. Unless the supply of dollars is more adequate to meet foreign requirements, other countries will assuredly insist on their rights to exercise a close selective control over the use of the amounts available and to promote more intensive relations with third countries under preferential trading arrangements. Unless dollars are made available with greater regularity than in the past, it would be both unjust and unwise to demand the removal of restraints and controls largely designed to protect the internal economies of other countries against external shock and pressure.

That passage shows completely clearly that what I have said is right. It shows that for

Supply-External Affairs

the United States to try to cause the world to sign such a document as the Geneva trade treaty, for example, or the Bretton Woods agreement, is for the United States to commit an outrage. That is exactly what she is doing.

I shall read another paragraph from page Y:

The conclusion that emerges most , emphatically from the survey is the fundamental importance of maintaining conditions conducive to a more stable and ample flow of dollars in our transactions with other countries. The most essential of these conditions lies not in the field of foreign economic policy as such but in the attainment of a more fully and more smoothly operating domestic economy-the major determinant of the volume and course of our purchases of foreign goods and services. In addition, a more adequate supply of dollars should entail both a freer flow of imports and a renewed and sounder participation of American capital in international investment.

Then, further down the page:

It would be tragic indeed if the United States, after a period of renewed full participation in the world economy, were to permit another abrupt fall in the supply of dollars to disturb the recreated international commercial and financial mechanism, whether through increased trade restrictions, through the misbehaviour of foreign investment, or through the improper functioning of the domestic economy.

The more hon. members weigh these statements and the more they read the document from which these statements are extracted the more impressed they will be with the truth of what I have said.

I should like the permission of the house, Mr. Speaker, to put an important section of this document on Hansard. Would there be any objection to that? Two and a half pages of this document give the facts which support the statements which I have made.


William Henry Golding (Deputy Chair of Committees of the Whole)


The ACTING SPEAKER (Mr. Golding):

Has the hon. member the permission of the house to put these pages on Hansard?

Mr. ST. LAURENT: I have no particular objection, but I think it is a bad practice to be putting on Hansard anything but a picture of what has taken place on the floor of the house. I would deprecate seeing that practice extended, and I think the hon. member will agree with me. There are other places where a written report is no picture at all of what goes on on the floor of the house, and I do not think we should move in that direction. The house is usually very generous in extending for a few minutes the time an hon. member requires. If what the hon. gentleman wishes to put on Hansard is of sufficient importance, perhaps he will read it.


John Horne Blackmore

Social Credit


I am afraid it will take all the time I have and perhaps a little bit more.

Mr. ST. LAURENT: The hon. gentleman

realizes he will have to form his own estimate as to which is more important, what he himself has to say, or what he proposes to quote, and he will act accordingly.


John Horne Blackmore

Social Credit


I take that to be a refusal of permission for me to put it on Hansard. That is unfortunate because, in the words of the writer of the report, it supports the statements which I have made.

Let me say that in my opinion the United States could again wreck the world just as it wrecked the world in 1929. America wrecked the world in 1929 through her domestic policy and her foreign policy. She has not changed her domestic policy: she is still running under the debt system of finance. All her wages enter into cost of production, all her revenues are raised by taxation. She has no system of distributing consumer purchasing power to enable her consumers to consume the nation's production. She depends on foreign trade as the main method of distributing her goods internally. She uses high tariffs.

Under these circumstances she is in just as grave a situation today, just as unstable and undependable as she was in 1928-29. All realistic well-informed people are aware of that and are full of anxiety lest there be another terrible depression. She has made no real improvement in her conditions.

There are striking things which could be adduced but which time will hardly permit, but I should like to read two or three extracts from a statement which appears in the May 1, 1948 number of Labor, a prominent United States paper:

Though the nation is now at the peak of prosperity. many thousands of Americans are "at the brink of starvation." That disclosure highlighted an appalling report issued this week by Oscar R. Ewing, chief of the federal security agency.

Further on:

"The plight of many of our aged who are no longer able to make ends meet is pitiful in the extreme," Ewing explained.

Still further down:

"We spend too much, think too much, talk too much and depend too much on our material strength, and meanwhile, at our national peril, we are ignoring our human resources," Ewing warned.

I will quote no more. The quotations show that the United States has not changed her ways.

Supply-External Affairs

The American administration in respect of foreign policy is carrying on exactly the same as that which wrecked the world. The American administration is determined to expand trade at all costs, hers or any other nation's. Right after this wonderful report was turned in to his administration, a year later, in 1944, Roosevelt, in a broadcast in the month of October, made the statement: "I intend to find jobs for 60,000,000 Americans by trebling our exports." If United States exports are trebled, where will other nations find places in which to sell their exports. Yet that was an announced policy of that leader of the American administration, and I presume his successor has followed it.

The American administration insists on an unconditional most-favoured-nation clause in spite of the fact that America forced Japan into war by insisting on the most-favourednation clause. It seeks to destroy the British preferences. It insists on non-discrimination which renders other nations virtually helpless in obtaining the necessities of life. It insists on the gold standard, and it is opposed to barter.

These facts are illustrated clearly by the Bretton Woods agreement *which the American administration browbeat other nations into accepting. The United States administration is determined to wreck sterling, which is the only really modem and essentially expansionist monetary system in the world, a system based on goods and credit and on commercial co-operation among the nations. The United States is determined to substitute its own obsolete monetary theories based on gold and debt and commercial cutthroat competition among the nations.

No remark of any American leader having public confidence in the United States justifies us in hoping that the United States is beginning to understand the causes of war.


May 4, 1948