America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
ONE North American nation is already at war. On Saturday, September 9, the Canadian Parliament voted to declare war against Germany. On the following day, precisely one week after Britain's entry into the conflict, King George VI, on the advice of his Canadian ministers, announced that Canada was formally at war. This royal proclamation of September 10, 1939, is a milestone in the history of Canada and of the Empire: it is the first time that the King in a declaration of war has spoken on the advice of his Canadian ministers. This is a fact of great constitutional significance. Responsibility for the form of the declaration was Canada's and hers alone, for London learned of it only after receiving the cabled draft. Thus, in 1939 Canada attained the same autonomy in matters of foreign policy which she has enjoyed in domestic affairs since 1867.
Special war legislation and cabinet decrees promptly followed with a rapidity and a coherence which clearly indicate that the Government had wisely utilized the months of peace. Two of these acts are particularly noteworthy. The war appropriations act earmarks 100 million dollars for immediate use. Its significance lies, not in the amount, which everyone realizes is only a fraction of what the war will cost, but in the fact that it shows how Canada intends to pay for the war. From 1914 through 1919 Canada's war bill was 1.3 billion dollars, of which only 101 millions were raised by taxation. This time, long-term borrowing is ruled out, at least in the early phases, and the initial sum of 100 millions is to be raised by increased taxes on consumers' goods, a surtax of 20 percent on individual incomes, and a profits tax rising to 60 percent. The bill was voted by Parliament and accepted by the people without opposition. But the publication a few days afterwards of a government decree establishing foreign exchange control met with quite a different reception. Surprised, perplexed and angry, businessmen swarmed to Ottawa for an explanation. Apparently, however, the Government has no intention of using this control to regiment business and will permit exchange to flow in the customary way. The real purpose of the act is to protect the Canadian economy from sudden and large withdrawals of British or American capital.
No war effort can be any greater than the ability of the men who direct it. In supreme command in Canada is William Lyon Mackenzie King. Last August he celebrated the twentieth anniversary of his leadership of the Liberal Party. During those twenty years he has been Prime Minister for thirteen, though not continuously. Today he is 65. None of his contemporaries can match him in experience and no man in the Dominion knows Canada so well. He is, in the fullest meaning of the term, Canada's first citizen. His weaknesses are two: he is prone not to take the initiative, and he is extremely loyal to his colleagues, even to the point of retaining them when a continued attack on one becomes an attack on the Cabinet. His record over the first three months of war suggests that these shortcomings are remediable.
As a whole, the Cabinet is reliable if not brilliant. The key positions are fortunately occupied by men of real ability. The member who in prestige ranks after Mackenzie King, and in constructive leadership comes first, is Ernest Lapointe, Minister of Justice. Mr. Lapointe is, after the illustrious Sir Wilfrid Laurier, the ablest French Canadian statesman Quebec has produced. Were he ten years younger, he would be an obvious successor to Mr. King. The Minister of Finance is Colonel J. L. Ralston, who was the leading financial critic of Mr. Bennett's Conservative Government (1930-1935) and is highly respected by St. James Street. The new Minister of National Defence is Norman Rogers, formerly Minister of Labor. A Rhodes scholar who entered politics, Rogers is levelheaded and trustworthy. Though he lacks the drive one might wish for in a man holding so vital a post, he is far superior to Sam Hughes, the war minister of 25 years ago. The Cabinet has remained entirely Liberal in composition. This is due to the fact that Mr. King is a firm believer in an Opposition. The record of the Opposition leaders suggests they will be more effective in their present rôle than as members of the Government. With Mr. Bennett living in England, the only Conservative ex-prime minister in Canada is Arthur Meighen. Though as Opposition Leader in the Senate he is outstanding, less can be said for his record as minister. The party leader of the Conservatives is Dr. Robert J. Manion, a physician from Fort William, who has been in command for only a year and has had little cabinet experience. As for the Co-operative Commonwealth Federation (Canada's socialist party) and the Social Credit group, they are more interested in furthering their own social programs than in coping with the day-to-day problems of administration.
Wartime appointments to newly created boards or to old established positions have been strictly non-partisan. Two are particularly noteworthy: the appointment of Loring Christie as Canadian Minister to Washington and of Major-General A. G. L. McNaughton as commander of the first Canadian overseas division. Christie is a career man who brings to his new post an intimate knowledge of Canadian-American relations. General McNaughton served in the World War and developed a formula for locating enemy guns which was so far superior to existing methods that it was adopted by all the Allied armies. Because he is still one of the outstanding artillery men in the world, the British may wish to use him as a general staff officer rather than as commander of the Canadian Expeditionary Forces. On the Ottawa front, Wallace Campbell, president of the Ford Motor Company of Canada, heads the newly created War Supply Board. Censorship, which most democracies handle lamentably, is the responsibility of Walter Thompson, for twenty years director of publicity for the Canadian National Railways. Unlike some of his European counterparts, Thompson began life as a newspaperman and knows newspapermen and their problems. Most of these four appointees are men with Conservative rather than Liberal affiliations. By mid-November disgruntled Liberals were accusing Mr. King of leaning over backwards, charging that men of equal merit within the party were being neglected merely because they were Liberals.
Hardly had Canada's war effort got under way than it was challenged by a threat to the nation's unity. On September 24, Mr. Duplessis, Prime Minister of Quebec, dissolved the provincial parliament and called for new elections. He flatly denied Ottawa's right to add to its powers and asserted that the War Measures Act was nothing but a disguised attempt to rob Quebec of its time-honored liberties. His action had nation-wide repercussions. If Quebec reëlected him, Canada would be a nation divided against itself and the resulting bitterness between English and French-speaking Canadians would vitiate national efforts for a generation. But Quebec not only failed to reëlect him, it handed him a severe defeat and returned the Liberals to power by a thumping majority. French Canada will support Canada's contribution to the war as it has been defined by the Government -- voluntary and economic participation.
The form of Canada's war declaration shows that she has gained control over her foreign policy; the Quebec election shows that she has regained control over herself. Both events were preceded by great travail and no one a year ago would have dared prophesy that a period of Sturm und Drang would end so felicitously. For it has been a seminal year in Canadian history.
The Czech crisis of September 1938 set the Dominion down on its heels with a jolt. Like other peoples, Canadians were divided on the merits of the Munich peace, and they experienced the disillusionment which followed. But this was incidental to the fact that the crisis had thrown Canadian foreign policy into a state of flux. The progressive collapse of the League had undermined the basis of Canada's right to decide for herself the question of peace and war. There is ample evidence that, had Britain gone to war in September 1938, the Canadian Parliament would automatically have voted to support her.
Hence, it is only natural that Canadians began to reëxamine their imperial and international relations. In particular, they asked themselves: if Britain is at war, is Canada at war also? The widespread discussion engendered by this question revealed considerable confusion in the public mind. There was much talk of Canada's right to neutrality, of Canada's duty to support the democratic Powers, of Canada's future as a North American rather than a British nation. Logically, there were only two real issues at stake: did Canada have the right to an independent foreign policy? If so, what should that policy be -- support of the democratic Powers or isolation? But as so frequently happens in politics, reasoning went from conclusion to premise. The Imperialists, who strongly support Britain, argued that Canada possessed neither the right nor the desire to have her own foreign policy; while those whose North Americanism was stronger than their Imperialism defended her right to such a policy. Only a few seemed to realize that Canada, while pursuing an independent course, might choose to support Britain.
Political leaders at first held aloof. But by the early part of 1939 increasing public discussion and two widely separated events forced the Government's hand: in February, J. T. Thorson (sitting for Selkirk, Manitoba) introduced into the House of Commons a bill providing that Canada should not go to war except by a declaration by His Majesty on the advice of his Canadian ministers; and in March, after the invasion of Bohemia and Moravia, Mr. Chamberlain called for a union of the democracies to check German aggression. On March 30, the Canadian Parliament began a full-dress debate on foreign policy. It lasted four days, and was the longest parliamentary debate on foreign affairs in Canadian history. Mr. King pointed out how much more difficult it is for a statesman to formulate national policies than for a private citizen. To be successful a Canadian foreign policy must, he said, enlist the support of such diverse elements as the Imperialists, who will aid Britain in any war; the French Canadians, who are completely isolationist; and the Canadian nationalists in between, who wish to make the Dominion a responsible member of the comity of nations. He seriously doubted the possibility that Canada could remain neutral if Britain went to war, thereby shattering a popular belief of the Canadian nationalists. Yet he stoutly defended Canadian nationalism and categorically denied that the Dominion must always support Britain irrespective of circumstances. Dr. Manion, the Conservative leader, was so thoroughly in agreement with many of Mr. King's points that one observer later described him as a partner in a parliamentary duet. But other Conservatives unqualifiedly pledged Canada's support to Britain. Mr. Lapointe, leader of the French Canadian group in the Cabinet, made a courageous speech in which, at the risk of displeasing his compatriots, he said that French Canada must face realities and remember the kind of world in which it was living.
Three conclusions, mostly negative, emerge from the debate. First, the Government was on the horns of a dilemma. On the one hand, its policy must be a Canadian policy in the sense of being arrived at independently of Britain's; while on the other, the content of the policy must satisfy, or at least not antagonize, such diverse elements as the Ontario Imperialists and the Quebec Nationalists. Obviously the Government had not yet found the formula for combining all these groups. Second, if war came there would be no conscription. Last, it was clear that as and when the momentous decision was taken, Parliament would decide.
Parliament had to make the decision on September 7, 1939. This time the Government had a formula, and Mr. Thorson's bill, though it had died a natural death in Parliament, had achieved the greater life after death. To textbook writers of the future the Government's action will seem simple and direct. Actually, the Cabinet wavered between several policies, and for a few days was undecided whether or not to declare war formally. Some thought that if Canada refrained, she might escape the rigors of the American Neutrality Act and thereby be of still greater aid to Britain. The speech from the throne which Parliament heard on Thursday, September 7, was one of the shortest on record -- only ten sentences -- and was by no means a declaration of war in itself. For the next 48 hours Parliament was without instructions; the members were not sure whether approval of the speech would constitute a vote of war or whether a separate declaration would be introduced. By late Friday it was known that Arthur Meighen was planning to storm the citadel unless a formal declaration was issued. Not until Saturday afternoon did Mr. King inform the House that approval of the speech from the throne would be equivalent to a formal declaration of war. What brought the Government around to this view? A de facto status of war would have been an indecisive note on which to rally the country. Nor was there any assurance that it would have exempted Canada from the application of the American Neutrality Act. Last, it was well known that the Conservatives, and particularly Meighen, would openly attack the Government if a formal declaration were not forthcoming. Imperialist circles in Toronto were seething during the night of September 8-9 and there was wild talk of a march on Ottawa.
And so the die was finally cast. The beauty of the solution was that everyone got something: the Imperialists were satisfied because Canada was at Britain's side, the French Canadians had their promise of no conscription, the Dominion now controlled its own foreign policy, and Canada went to war a unified nation.
But was it really unified? The challenge from Mr. Duplessis and the possibility that the Province of Quebec might support him caused some bad moments. Not only did it raise the old problem of Quebec's status, but it revived memories of regionalism in other parts of Canada. During the 1930's Canada suffered an acute attack of what in this country we call States' Rights. The British North American Act of 1867 gives specific and enumerated rights to the provinces and lodges all residue powers with the Federal Government. In this respect it is the reverse of the American Constitution. But such is the perversity of man that while in recent years the United States has evolved towards greater centralization, Canada has evolved towards greater provincial independence. Quebec customarily receives more than its share of the blame for this situation. The record from 1935 to 1939 shows that Imperialist Ontario and Social Credit Alberta were not far behind in demanding provincial autonomy; even British Columbia, in population the most Anglo-Saxon of all the provinces, was beginning to climb on the bandwagon.
The causes for this growing separatism are both general and particular. Perhaps every federal system spanning three thousand miles of continent must pass through this phase. But there are other reasons. There was the depression. There was also the fact that the King Government allowed the reins of federal control to slacken, a circumstance quickly utilized by some of the more spirited provincial leaders. In Quebec there was Mr. Duplessis, victor over the Liberal machine which had held power in the province uninterruptedly for 39 years. That Duplessis should challenge the power of the Liberal Government at Ottawa was not surprising. What was surprising was that he had a warm ally in Mitchell Hepburn, the first Liberal Prime Minister of Ontario in a generation. Imperialist Ontario and isolationist Quebec might seem to have little in common, but domestic issues frequently unite them. They are the oldest, most populous and wealthiest of the provinces; and since three-quarters of all Canada's manufacturing is carried on within their borders, they dominate Canadian industry. Their citizens, being the Dominion's principal source of taxes, naturally complained that instead of supporting the impecunious West, federal tax-receipts should be spent in Quebec and Ontario. And out in Alberta, there was the Social Credit government of William Aberhart. Mr. Aberhart, having great economic reforms to institute, naturally pushed Albertan provincial independence to the utmost.
The results of the Quebec election of October 25 show that the regionalist tide is receding, at least for the moment. Not that this was apparent during the campaign, or even on the eve of the election. Ernest Lapointe and the other French Canadian members in the King Cabinet stumped the province against Duplessis, demanding his defeat as a vote of confidence in themselves and in their reiterated promise of no conscription. They declared that if he were reëlected, they would resign. As for Mr. Duplessis, he campaigned on two slogans: a vote against him was a vote for conscription; and Ottawa's emergency powers were nothing but a pretext to rob Quebec of its liberties. There were several reasons for supposing he would win. His National Union Party (of which the core consists of Quebec Conservatives) held 76 of the 90 seats in the recently dissolved legislature -- he could lose a fair number and still have a majority. Further, his major opponent was the provincial Liberal machine, which had been defeated in 1936 after having been in power for 39 consecutive years. If its record was venerable it was also odoriferous. Many of the old Liberal war horses, repudiated by the electorate three years before, were again candidates. On the other hand, Duplessis carried several political liabilities. Taxes had increased and the provincial debt had more than doubled during his three-year régime of lavish spending. Duplessis himself was growing increasingly autocratic and less disposed to seek advice -- he had dissolved the provincial parliament without consulting his cabinet. Still, on the eve of the election political observers were of the opinion he would be returned, though by a narrow margin.
Actually, the election was a landslide for the Liberals, who won 67 out of the 85 seats contested. The National Unionists lost 60 seats; six members of the cabinet were defeated, though Duplessis carried his own constituency of Trois Rivières. Quebec had spoken and in unmistakable terms. A Duplessis victory would undoubtedly have been disastrous for the nation. The loss of Mr. Lapointe from the Cabinet would in itself have been serious, and might have precipitated a general election. But the greatest tragedy would have been the rancor engendered between English and French-speaking Canadians; not only would this have interfered with the conduct of the war, it would have poisoned Dominion politics for many long years. This knowledge may have influenced the enlightened French Canadian; among the rank and file, however, other factors were decisive. First is the effect of the royal visit of May 1939. Veteran observers of the Canadian scene have with singular unanimity agreed that the greatest result of the royal visit was its effect on Quebec. For the first time in their history, French Canadians now feel that they have a King and Queen. They have been subjects of the British Crown since 1763; but to them the relationship has always been purely legal. The royal visit made it personal. A second factor is the effect of the German-Soviet agreement of last August. By temperament and tradition, French Canadian society is authoritarian, and in recent years certain elements have been sympathetic towards Germany and Italy. But Germany's pact with Bolshevist Russia -- a country anathema to French Canadians -- caused a change which was accentuated by the destruction of Catholic Poland. As for the Church, its influence on the election is more difficult to determine. The high prelates seemingly remained neutral. Among the parish priests some, particularly in the back country, were for Mr. Duplessis; but the great majority worked quietly for the Liberals. Last, there was the real, if unmeasurable, influence of the radio. With Quebec stations sending out news broadcasts in French, the parish priest is no longer dependent on the hierarchy for his news. As for the habitant, the radio has made him realize for the first time that there is a world outside Quebec. Whatever he may think of that world, it forces itself on him as never before.
Canadians not given to overstatement still refer to the Quebec election as the greatest political event since Confederation. Mr. King declared it was a victory for the whole of Canada. Dr. Manion, who saw his major strategy for the next election upset by the defeat of the National Unionists (Quebec Conservatives), merely remarked: "Now let us get on with the war."
On the strictly military side, Canada's war activities can be described briefly. At the outbreak of hostilities, the active army had less than 4,300 men; for years it has hardly been more than an instruction corps for the reserves, numbering 86,000. Matériel was and remains negligible. The Royal Canadian Navy had an authorized strength of 150 officers and 1,822 men, but this was a legal and not an actual maximum; the reserves were 500. The Navy had 6 destroyers, 5 minesweepers and 3 auxiliaries.
Excluding the Royal Canadian Air Force, one is apt to talk of Anglo-Saxon apathy and of Canada's unpreparedness for war. But why should Canada have a large army? An army has a purpose, and what would be the purpose of a Canadian army? To help Britain? But Britain herself, until last year, had an army that was little more than an imperial police force. For home defense? But no enemy can invade Canada until it has first defeated the British Navy in the Atlantic or the American Navy in the Pacific. And there are other factors which must be taken into account. First, Canada, with a population less than that of New York State, has a federal budget which normally is smaller than that of New York City. The Dominion was thus in no position during the recent lean years to lavish its restricted funds on the armed forces. Second, any proposal to expand the Canadian army or navy has always raised the controversial issue: whose army and navy is it to be -- Canada's or Britain's? Many Canadians, outside Quebec as well as in, have always felt that even if Canada paid for a peacetime enlargement of her armed forces, in time of war they would be merged with British forces and lose their Canadian identity. This they opposed.
And last there is the question of conscription -- and no issue in Canadian politics contains more political dynamite. In the last war enlistment was on a voluntary basis until 1917 when conscription was instituted; its enforcement split the Liberal Party wide open, provoked a desultory civil war in Quebec, and aroused varying degrees of resistance in some of the English-speaking provinces. This time the issue has been handled more tactfully. For months Mr. King has been promising that there will be no conscription and Dr. Manion has repeated the pledge. Only two of the minority parties advocate it. In certain parts of the Dominion the recent Quebec election is being misinterpreted as an indication that nation-wide conscription is now possible. Nothing could be further from the truth. One has only to talk with French Canadians to realize that many of them voted Liberal because they regard a Federal Cabinet including Mr. Lapointe as a better guarantee against conscription than a Cabinet without him. At any rate, for some time to come conscription will be an academic issue. The Allies do not need Canadian man power; they believe that Canada's most effective contribution can be made along quite different lines. Meanwhile volunteering continues but with little encouragement from the Government. Two volunteer divisions of 16,000 men each have nearly been raised and by early winter the first will depart for England to be trained and equipped.
The Royal Canadian Air Force presents quite a different picture. During the World War, Canadian pilots hung up a fine record; and by 1918 nearly 40 percent of all pilots in British service were Canadians. This popularity still continues, and as a result the Air Force has the pick of Canadian youth. In the spring of 1939 it consisted of an active force of 261 officers and 1,930 men, with reserves of 1,100. Its limited amount of equipment is purely for training purposes. Following the arrival of Lord Riverdale's mission in October, there have been quasi-official statements that Canada will train 25,000 pilots a year recruited from nearly all parts of the Empire, and will build a gigantic aircraft industry. Against these optimistic assertions should be set the fact that in November, the third month of the war, Canada's production of military planes was no more than ten. No airplane motors are made in the Dominion, the aviation industry being limited to building frames, importing engines, and assembly. Production can doubtless be expanded both as concerns quantity and types, but this will take at least two years. Meanwhile, since planes must be found for the pilot-training school, an order for 1,500 machines has been placed in the United States.
There is a similar disparity between the roseate picture of Canada as the coming industrial citadel of the Empire and her present industrial capacity. There have been numerous reports that Britain will spend 3 billion dollars in Canada to build or expand vital war industries. If one remembers that in 1938 Canadian factories and installations were valued at only 3.5 billion dollars, the magnitude of the proposed expansion is apparent. The war may be so devastating to British industry that the creation of a new centre of production in Canada will become absolutely essential for the survival of the Empire. But until this necessity arises, both Britons and Canadians are likely to oppose such a plan. British industrialists showed great reluctance during the spring and summer months to let armament contracts pass to the Dominions; their opposition to a migration of factories will surely be even greater. Nor is the Canadian businessman very keen for such a development. During the spring of 1939 he showed singular apathy in getting orders bagged by Australia and New Zealand. Not until August did the Canadian Manufacturers' Association have a committee in London to solicit contracts.
The Canadian Government, at any rate, has no desire to see such a gigantic industrial development. It is problematical whether this expansion could remain a Canadian-controlled affair. Much of the capital, management and technical skill would be British, since a country of eleven million does not have the reserves of trained ability that such expansion presupposes. Canadians do not want a sizable portion of their economy controlled and managed by Britons. Also, they have been asking themselves the question: after the war, what? If the peace is a real peace, then Canada will be left with a tremendous, idle war industry. Meanwhile, the autumn has seen an increase in business activity to 1937 levels, but no runaway boom. As in the United States, most of the gain has been due to domestic factors -- replenishing depleted inventories and preparing for anticipated foreign buying. Large war orders from the Government have been few, and those from abroad fewer still. The Dominion authorities have contracted for shoes and uniforms for the army, and for small munitions. One of the few large orders from Britain has been the purchase of 46 million dollars' worth of Canadian copper.
On the agricultural front, Canada can supply all the wheat Britain will take. This year's crop is one of the best on record, 478 million bushels, and there is a carry-over of 102 millions. Canada herself will consume about 110 millions, leaving nearly 470 millions that must be sold abroad. Canada's wheat problem is a legacy of the last war and it is from a similar fate that Ottawa wishes to save Canadian industry in the present war. In 1914 Canada had only 10 million acres of wheat under cultivation; in 1915 it spurted to 15 millions, in 1919 to 19 millions, and in 1921 to 23 millions. There was no problem when prices were good and when a crop, such as that of 1919, had a value of 458 million dollars. But from 1930 through 1938 Canada's wheat crop had an average annual value of only 175 million dollars.
The outbreak of war buoyed up the sagging spirits of the Prairie Provinces, for they naturally assumed that they would now be able to sell all their wheat, and at a good price -- something they have not done for several years. On August 31, wheat on the Winnipeg Exchange sold for 59½ cents; in five business days it climbed to 82 cents. Then it slowly dropped to 70 cents, the price guaranteed by the Government, and has hovered there ever since. The Winnipeg Free Press, in a long editorial on October 9, noted that since the outbreak of war very little wheat had moved from Fort William to Europe. Further investigation revealed that Britain was buying wheat in Argentina and Uruguay because of the cheaper price. To be sure, the British were merely carrying into practice their principle of waging the war as economically as possible; but a great hue and cry arose within Canada. The Prairie Provinces, whose entire prosperity depends on wheat, put pressure on Ottawa to negotiate with London. To date no agreement has been reached. The difficulties are two: the form of payment and the price. There are numerous indications that the British would like to buy a fixed amount of wheat -- perhaps 100 million bushels -- at a closed market price. The Prairies, feeling that this would be less than the prevailing price on the Winnipeg Exchange, are not eager for a private arrangement. Nor is Ottawa. For having guaranteed the farmer 70 cents a bushel for his best wheat, the Government sees no reason why it should accept a London price of 60 cents, thereby making the British a gift of ten cents on every bushel. In the end the Prairies will undoubtedly sell their crop, and at a fair price. Compared to the 35-cent wheat of the depression it will be a good price, but it will not be the $1.22 wheat of 1914.
The small amount of British buying, both of wheat and manufactures, is also due to financial obstacles. Britain has about 2.7 billion dollars of Canadian securities of which one billion consist of government bonds and Canadian National Railway securities that Ottawa can easily repatriate. Britain also has a gold reserve in Canada -- how much is problematical though estimates place it at half a billion dollars. But thus far London has shown little desire to repatriate its Canadian paper or to spend its gold; the first it is saving for purchases in the United States and the second for a war reserve. The British prefer to finance their Canadian purchases by long-term credits pledging their paper as collateral, whereas Canadians prefer a little hard cash. There the matter rests. If the war becomes more destructive, the British will not be so free to bargain and in that case Canadian securities will be repatriated. And if its destructiveness endures over several years, Canada may well emerge as a creditor of Britain.
Sir Wilfrid Laurier used to remark that the nineteenth century was America's but the twentieth would be Canada's. If the present war is long and devastating, it may well transform Canada into the industrial and financial citadel of the Empire. Even a short war may have the same ultimate result. For there are scattered though significant indications that influential circles in Britain feel that the Empire's future strength should be based on Canada rather than the British Isles. Sir Wilfrid's prophecy may come true, and Canada, instead of seeking greatness, will have it thrust upon her.