Canada and Ourselves

I

CANADA, our friendly neighbor, is also our most active and best equipped war ally on this continent. The ever-increasing measure of informal coöperation that had been going on with Canada before the United States became a formal belligerent is being and will be vastly expanded. Japanese threats in the Pacific affect equally Vancouver and San Francisco and lend a new urgency to the pigeonholed scheme for a highway across Canadian territory to Alaska, our isolated Arctic outpost. German submarines have been carrying out their depredations off the eastern coast of Canada, as well as off our own eastern shores. Obviously the closest kind of coöperation between our own naval and air forces and Canada’s greatly enlarged navy and already powerful air squadrons is in order.

Canada is emphatically the kind of country that one welcomes as comrade in the same trench. Canadians established a magnificent fighting record in France in the last world conflict; Canada lost more lives in that struggle than the United States, despite the disparity in population. And Canada’s showing in the present war, apart from the fumblings and hitches that are almost inevitable when a peace-loving democratic country is getting up war steam, has been excellent. It was my impression, after spending several months in Canada last summer and autumn, that Canada had done and was doing more than some Canadians were willing to recognize.

Some of the deprecation of Canada’s war effort that one finds in Ottawa and Toronto is attributable to the thoroughly sound instinct that there is no such word as ‘enough’ in total war. Some of it, one suspects, has less worthy origins in personal dislike of Premier Mackenzie King and in jockeying for party political advantage.

The number of Canadians who have volunteered for service anywhere in the world, according to the latest figures, is 422,000 — about 275,000 in the Army, 110,000 in the Air Force, and 30,000 in the Navy. Translated into United States terms, with allowance for the difference in population, this works out at almost five million volunteers.

The Commonwealth Air Training Scheme, which has covered Canada from the Atlantic to the Pacific with a network of air training stations, is probably Canada’s greatest individual contribution to the war. There are more than a hundred thousand men in this service and there are enough foreigners to give some of the training stations a very international character. Approximately 80 per cent of the flyers and ground crews are Canadians; some 10 per cent are from the United States; and one finds contingents of aviation cadets from Australia and New Zealand in these Canadian camps. There are also schools for training RAF pilots. What has been a trickle of Canadian aviators to England has become a stream.

There are between 100,000 and 150,000 Canadian troops, including one complete armored division, in England, a little nervy and on edge because of the fighting that has not come their way. These Canadian troops have been given a place of honor in the British home defense line, in some of the southeastern and southern counties where the full shock of the German invasion, if it ever comes, is likely to be felt. Two thousand Canadians fought and fell with Hong Kong, both the commanding officer and his chief of staff being killed in this last-ditch action.

Canada is making a vastly greater industrial war effort than was the case in the last war. A plant in Toronto is turning out the very effective Bren machine guns in large quantities, and the Canadian branches of Ford and General Motors are producing large numbers of military vehicles. Tanks and airplanes were slower in getting under way. But the Minister of Munitions, Mr. C. D. Howe, recently announced that the rate of aircraft production was 300 per month, while light tanks were being sent to Russia at the rate of three daily. Canadian shipyards are working at maximum capacity in an effort to overcome U-boat sinkings, and it is expected that Canada will turn out as much merchant shipping as Great Britain in 1942.

Such facts should be borne in mind in weighing the background and significance of the plebiscite on the issue of leaving the Government free to introduce overseas conscription that seems likely to focus international attention on Canada. At first sight it may seem difficult to understand why such a plebiscite should be held at a time when Canada is inextricably involved in a global war that will certainly require extensive pooling of man power and resources of all the combatants if it is to be fought effectively.

The explanation of the plebiscite is to be found, first, in the special psychology of Quebec Province; second, in the personality of Premier Mackenzie King.

Canada, it should always be remembered, is not a melting-pot nation like the United States, at least not so far as the descendants of its original French settlers are concerned.

‘In this land of Quebec nothing has changed.’

This is the leitmotiv of a glowing passage in the epic novel of French Canada, Louis Hémon’s Maria Chapdelaine. It is certainly true as regards the general French-Canadian reaction to participation in overseas war. Canadians of French descent are separated from their English-speaking compatriots by a triple barrier of race, religion, and language. They have no sentimental ties with England, few with France itself. With a tradition of generations of protective struggle for the maintenance of their cultural identity they have developed a psychology in relation to Europe similar to that of the most extreme American isolationists. And Pearl Harbor stirred no responsive chords in the French Canadians.

Just when isolationist slogans have been silenced in the United States they have been revived and intensified in French Canada. As I write I have before me a manifesto of the League for the Defense of Canada, an organization which most English Canadians would regard as unsuitably named, since its objective is to fight conscription for overseas service. ‘Canada d’abord,’ or ‘Canada First,’ is its slogan, and it urges all its sympathizers to vote no on the plebiscite that is to be held on the question of releasing the Government from its pledges not to enforce conscription for service outside of Canada. (Conscription for military service inside Canada and for the duration of the war has been in operation for some time.) The anti-conscription arguments of the newly formed League are that Canada must keep its forces for its own defense, that the voluntary system has worked satisfactorily, and that Canada, with a population of a little over eleven millions, does not possess unlimited man power.

One of the leading figures in the League is the Deputy Maxime Raymond, with whom I spent several hours of interesting conversation last summer. M. Raymond was one of the few deputies who voted against Canada’s declaration of war, and he made no pretense of having changed his views. A cultivated, urbane lawyer, he developed much the same arguments against Canadian involvement in overseas wars that one would have expected to hear at that time from Colonel Lindbergh or Senator Wheeler.

It would, of course, be an exaggeration to say that all French Canadians are opposed to the war. Some descendants of old French military families follow a family tradition when they take officers’ commissions. There was a French contingent in the first Canadian expeditionary force that landed in the British Isles. But any objective observer of French-Canadian opinion would report, I think, that the balance of opinion is strongly against conscription for overseas service. The Government has not published figures on this delicate question; but private inquiry convinces me that the percentage of volunteers is much higher among English than among French Canadians. It is also definitely higher among British-born than among Canadian-born.

Some of the 1917 bitterness is beginning to reappear on the plebiscite and conscription issues. An extremist Canadian speaker says that ‘over there they don’t fight. They let the Hindu, the African, the Australian fight.’ Whereupon an irate British Canadian suggests that the speaker forgets ‘on which side of the Channel the people live who quit.’

There will be more hard words and perhaps blows before the issue is settled. The plebiscite has its unfortunate aspects; but to Mr. King it apparently represents the only course which he regards as honorable, in view of the fact that he has repeatedly pledged himself against conscription for overseas service. Americans should remember that December 7 did not have the same significance for Canada as for the United States. The plebiscite is to be taken not on the direct issue of conscription for foreign service (on this point a popular vote might be uncomfortably close, since the French alone are almost 30 per cent of the population), but on the issue of giving the Government a free hand and releasing Mr. King from his anti-conscription promises. By posing the question in this way the Premier hopes to break the solid French front by introducing the element of personal confidence in himself. In the event of an affirmative majority he will presumably attempt to introduce the change, if he regards it as necessary. The plebiscite may be significant in history as one of the last of a series of steps designed to bring Canada into total war. That such a zigzag course was necessary is a consequence of the ‘entente without cordiality’ which, in André Siegfried’s happy phrase, has characterized the relations between French and British Canadians.

II

Canada has always been a bridge state between North America and Europe. It is the only important and independent country in this hemisphere with political ties that make participation in any large war involving the British Empire almost inevitable. But physically and in many ways psychologically it clearly belongs to North America. By a curious paradox of politics one of the most striking consequences of the present war, in which Canada has given a second demonstration of loyalty to what many Canadians regard as the mother country, is to draw Canada economically farther away from Europe, to integrate its life more closely with that of the United States.

In outward appearance Canada is very definitely a North American, not a European, land. It possesses the vast spaces and distances that are likely to be one of the strongest impressions of the European who visits the United States. And many regions of Canada suggest northward extensions of the United States. We have, to be sure, no equivalent for the distinctive French community, closely knit by bonds of race and religion, that one finds in the Province of Quebec. But the tranquil prosperous farming country of the Upper St. Lawrence is not very different from neighboring districts of New England and New York. And Canada’s prairie provinces — Manitoba, Saskatchewan, Alberta — have much in common with Kansas and Iowa and the Dakotas.

It is the English refugee, not the United States tourist, who is the stranger in Canada, who must make the greater number of adaptations to living habits that seem unfamiliar. The pattern of Canadian social life (the French minority always excepted) is closely akin to our own. Your English-speaking Canadian instinctively rotates with the Rotarians and roars with the Lions. He feels at home in the garb of the Ancient Arabic Order of Nobles of the Mystic Shrine.

London, Ontario, is located in Middlesex County on the Thames River. The names of some of the best-known streets of the British capital are proudly imitated in the Canadian town. But the streets and shops of this New World London suggest Des Moines or Omaha more than those of a British community of similar size. And the man from London, Ontario, who has traveled abroad is just as amused, surprised, and mildly irritated by the things that are ‘different.’ in England as if he were a tourist from Iowa or Nebraska.

Listen to a lecture on Canadian farm problems and you can easily imagine yourself south of the border. There are the same familiar elements: too much submarginal land brought under cultivation during the last war; too much speculation in land; too many closed foreign markets; and finally, more or less successful governmental efforts to bail the farmers out and to avert the worst consequences of a prolonged slump in agricultural prices.

There are variations in detail, of course. The Canadian wheat problem is more acute than ours, because Canada can consume so much less of its output. But basically Canada’s economic destiny is inseparably and very closely linked with our own. Few Canadians pay any attention to the quotations on the British security markets. But a flutter on Wall Street excites immediate repercussions in Montreal and Toronto.

Business and labor in the two countries are closely associated. United States technical and advertising methods have crossed the border along with the four billion dollars of American capital that arc invested in Canada. The A. F. of L. and the CIO have their affiliated Canadian unions.

Canadians read United States newspapers and magazines, see Hollywood films, listen to the programs of United States broadcasting stations. Canada’s population is both too sparse and too diffused to maintain a vigorous independent national culture.

Canada now has about twelve million inhabitants. They are spread out in a long narrow ribbon formation from Cape Breton at the eastern end of Nova Scotia to Vancouver in the West. Fifty per cent of the Canadians live within a hundred miles, and 90 per cent within two hundred miles, of the American border. When one subtracts the three and a half million French Canadians it is evident that the English-speaking community is too small to resist a considerable measure of cultural assimilation from the nation of one hundred and thirty millions south of the border.

At the same time, old loyalties are tenacious and old memories are long.

Many people in Canada think and speak of England as ‘the old country.’ The proportion of Canadians who were born in the British Isles or who have relatives there is quite high.

To many Canadians the moral obligation to fight in England’s wars is simple, clear, unescapable, as it would not be to an American. The daughter of the hostess at a lodge in the Canadian Rockies where I was staying was expecting a child. Her husband was in the armored division at Camp Borden, which is supposed to go overseas before the end of the year. The mother remarked that the girl had been born under the same circumstances, with her father fighting overseas. There was no suggestion of complaint, no sense of exceptional devotion; just a plain statement of fact.

While the English-speaking Canadian has his misunderstandings with the individual Englishman, he is fiercely loyal to England as an entity. This impression was confirmed by an Englishman, a retired army officer, now in business in Canada, who was in the mood of national self-criticism in which Englishmen sometimes indulge. He spoke scathingly of the old school tie. He criticized the British educational system as providing too small a class of men trained for leadership and initiative. He recalled instances of snobbishness in the cavalry regiment where he served in India. He referred without admiration to a business executive in England who had expressed a preference for a stupid lad from Eton over a bright boy from a more plebeian school. Then he paused in his recital of national shortcomings and said: —

‘It’s a relief to get these things off my mind. I couldn’t say them to a Canadian, you know. If I said anything critical about England publicly in this country I’d probably be lynched.’

So there are strong sentimental factors that have kept Canada a separate although friendly neighbor to the United States. It was these sentimental factors, together with certain industrial and financial vested interests, that caused the Canadian electorate on two occasions, in 1891 and in 1911, to reject the policy of closer economic association with the United States that might have been an opening wedge for political union.

III

But a conspicuous effect of the present war has been to increase Canada’s economic dependence on the United States. The final consequence for Canada of what most English-speaking Canadians regarded as a natural gesture of loyalty to ‘the old country’ may be a much closer association with the United States than either country would have regarded as possible before the beginning of the conflict.

The fall of France aroused both Canada and ourselves to the consciousness that a common destiny on this continent involved common responsibilities to meet common dangers. The conference at Ogdensburg between President Roosevelt and Premier Mackenzie King, in August 1940, led to a new departure in United States-Canadian relations through the creation of a Joint Defense Board, which meets periodically. The decisions of this board have naturally been kept secret.

It is known, however, that there has been far-reaching agreement as to coastal defense, both in the Atlantic and in the Pacific. Nova Scotia is a long eastward projection into the Atlantic. New forts, equipped with long-range guns, in the neighborhood of Sydney and Halifax and Shelburne along the coast of Nova Scotia, can reasonably be considered outposts for the defense of Boston and New York. The commission has given careful consideration to the manning and equipment of these forts and of the corresponding coast defenses on the New England shores of the United States.

Barren, poverty-stricken Newfoundland has become a lively scene of United States-British-Canadian military coöperation. Besides acquiring a naval base there in the destroyer deal of September 1940, the United States is sharing the use of the huge Gander Lake airport, the largest in the world and the take-off point for the Atlantic Ferry.

Big Catalina flying boats patrol the waters around Newfoundland and Labrador, and a new phase in CanadianAmerican-British naval coöperation has been instituted by President Roosevelt’s ‘shoot at sight’ orders and assumption of convoying functions for the American Navy as far as Iceland. While I was in Halifax last September the British Admiral Bonham-Carter, who had hitherto been in charge of convoy operations between Canada and the United States, was preparing to depart. The American Navy had relieved the British of one of its most pressing preoccupations.

How far the old Canadian suspicion of possible United States annexationist designs has disappeared in the light of today’s dangers is evident from the fact that the United States movement into Newfoundland, the key to Canada’s eastern sea approaches, was cordially welcomed. Nor has there been any opposition in Canada to the idea of an ‘American corridor’ in the shape of a proposed military road across Western Canada, connecting the United States with Alaska.

At the present time the route to be followed by this road has not been determined and there is some question as to its desirability. It may be that a development of existing air bases in Northwestern Canada would take care of the possible need for swift communication with Alaska more surely than a road which, if built through the mountains of Northern British Columbia, would be hard to keep open during the season of heavy snowfall. But this is a matter for the United States to decide. Canada is willing to grant the use of its territory for a road that would mainly be designed for the passage of United States troops and supplies.

So far United States-Canadian military coöperation is in the embryonic stage. Plans of coast defense would, of course, only come into practical operation if the war should take an unexpectedly disastrous turn either in the Atlantic or in the Pacific.

But economically the war has brought about very significant changes that are calculated to bring Canada much more closely into the United States orbit. And some of these changes show signs of becoming permanent, or at least of outlasting the war by some years.

In normal times Canada balances its international accounts by a triangular process. It builds up with Great Britain a surplus of exports over imports that offsets its unfavorable balance of trade with the United States. The war has completely upset this arrangement because the pound sterling has ceased to be a freely convertible currency. Great Britain is no longer a profitable market, but a front line of defense, to be supplied at any cost.

Contrary to some misleading statements that have been circulated in this country, Canada is doing just what the United States is doing — subsidizing the British war effort by pouring munitions, foodstuffs, and other supplies into the British Isles with no thought of present compensation and only the faintest prospect of future repayment.

Canadian financial authorities told me that, apart from Canada’s own war expenditures of about $1,450,000,000, a sum of at least $900,000,000 is being advanced to Great Britain in the form of munitions and supplies during the current fiscal year. This would be the equivalent of an advance of thirteen or fourteen billion dollars from the United States, given the difference in national incomes.

With Great Britain, under present circumstances, representing an economic drain, not a source of surplus credits for the settlement of other international accounts, there is a new stringency in the financial relations between the United States and Canada. Canadian imports from the United States have greatly increased because of war needs and will probably amount to about $850,000,000 in the present year. Exports, including gold, are estimated at from $600,000,000 to $650,000,000.

The Canadian Government has taken a number of measures to relieve the strain on its financial equilibrium that a permanently lopsided balance of payments with the United States represents at a time when the normal export surplus with Great Britain has disappeared because of war conditions. Canadians are not permitted to travel in the United States except for urgent reasons of health or business. This saves precious United States dollars for the Canadian Treasury. There is a system of excise taxes, designed to discourage the importation of dispensable commodities from the United States. If one receives a book from the United States, even if it is not designed for resale, three separate taxes, adding up to 28 per cent of the value of the book, are levied. Canada’s varied tourist attractions, from the splendid mountains of the West to the old-fashioned villages of the Gaspé, are exploited and promoted for the purpose of bringing American dollars into the country.

All these measures, however, were not enough, and serious difficulties in the maintenance of the present stable rate of the Canadian dollar (which is at about a 10 per cent discount in relation to the American dollar) were staved off by the so-called Hyde Park Agreement of last March. This provided that the United States should make a special effort to buy war materials, such as aluminum and base metals, from Canada, and that Canada should receive lease-lend credit for airplane engines and other Americanmade component parts of munitions for Great Britain.

So, although Canada is not yet receiving lease-lend funds for its own benefit, it is being carried financially to some extent on the expansive wave of American war spending. Some day this wave will subside, and then the problem of money transfer, one of the main devils of the European economic anarchy that preceded the present war, may well become acute for Canada. Besides having a normally unfavorable trade balance with the United States, Canada must find over 200,000,000 United States dollars every year to meet interest and dividends on the $4,000,000,000 of United States invested capital in the Dominion.

This $4,000,000,000 is now in a partially frozen status. The American investor cannot withdraw his money and turn it into his own currency. But Canada is more liberal than most states which apply the ‘freezing’ process in finance. It permits the United States investor to receive his interest and dividends in his own money, minus a 15 per cent tax and the 10 per cent discount for the lower value of the Canadian dollar.

One means of observing Canada’s increasing economic dependence on the United States is to go into a factory that was formerly equipped from Coventry or Birmingham and see the rows of new drills and presses and other machines with some such United States label as Cincinnati, Fort Wayne, or Cleveland. The British factories, if they have escaped the blitz, are too busily employed turning out munitions to supply equipment for Canada on the former scale.

IV

The growing isolation from foreign markets that is an inevitable accompaniment of the war in its present stage is throwing Canada and the United States more and more on each other’s resources. Few people perhaps realize that an isolated hemisphere economy, whether we like it or not, is advancing from the stage of theory to fact. Like the United States, Canada has virtually no trade with continental Europe or with Japan. Russia and China must also be largely written off, and Great Britain is mainly an absorber of war supplies.

Canadian reliance on the United States is greatly accentuated by the disappearance of so many alternative markets and sources of supply. A steel shortage with us means a dislocation of a Canadian shipbuilding program. An oil deficiency in the United States means immediate gasoline curtailment measures in the Dominion.

So there has been a burgeoning of organizations designed to ease points of economic friction and to promote the most effective joint use of Canadian and United States resources. Of these the two most important are the Materials Coördination Committee and the Joint Economic Committee. The first includes two members of the former OPM — Mr. Stettinius and Mr. Babb — and the Canadian controllers for metals and power. Its purpose is to collect and exchange raw materials, for one country may have a surplus of one and a deficit of another, while a reverse situation may prevail across the border. It also aims to eliminate competition in the buying of raw materials.

Typical agenda for a meeting of the Joint Economic Committee included the following subjects: provision of food for Great Britain from the combined agricultural resources of the two countries; tariff obstacles to the movement of defense supplies; the most efficient use of Great Lakes shipping in the movement of wheat to England and of iron ore to the steel centres of Canada and of the United States; plans for pooling the materials and manufactures of Canada and the United States in meeting LatinAmerican requirements.

One can recognize from this list of subjects how the war is breaking down old lines of economic division and fusing Canada with the United States, to a considerable extent, in a single coördinated North American economy. Even more significant than the formal organizations that have been created is the newly formed habit of regular personal contact between Canadian and United States government officials and business men. The manager of a big Canadian munitions plant is likely to be in longdistance communication with Washington almost as often as with Ottawa. Canada has a most vital concern with nearly every new United States decision as to priorities.

Coal, oil, iron, steel, cotton, machine tools — these are only a few of the things for which Canada relies on the United States for at least part of its supply. Engines for Canadian airplanes and tanks are fabricated south of the border.

In return Canada has a good deal to give. It has built up an aluminum industry far in excess of its own needs, on a basis of cheap and abundant power. It possesses a surplus of copper and base metals. Because it geared its industry to war ahead of the United States, it is in a position to supply us with Bren machine guns, scout cars, range finders, and other war supplies. Old Hurricane airplane models, outmoded for European use, are being sold to the United States and passed on, via the leasc-lend route, to China.

It seems very improbable that this more intimate contact between the two predominantly English-speaking countries of North America will or can cease with the coming of peace. Exploratory work as to the possibility of maintaining various forms of permanent economic coöperation is already being carried on by several groups, both official and unofficial.

V

In building up war industry Canada’s experiences have been very much like our own. The greatest success has perhaps been achieved in the output of military vehicles, where there was the mass-production experience of the Canadian branches of Ford and General Motors and Chrysler to draw on. The greatest difficulties have been encountered with tanks and airplanes.

In shifting over from a peace to a war economy, Canada’s experiences have been quite similar to those of the United States. Deprivations have been more severe. Priorities and price controls, drastic taxation and pressure for sales of war bonds, have been freely employed to lay the spectre of inflation. The war is beginning to hit the middle class fairly hard. A Canadian economic publication recently estimated that a family with a $5000 income would now require $0588 to maintain the same standard of living. Taxes alone for such a family, with two children, would have risen from $118 to $735.

Yet a danger of inflation remains because of the expansion of payrolls, combined with the diversion of plant from civilian to military production. Anxious eyes are turned toward Washington, and an American in Canada is often asked whether Mr. Henderson and his associates can keep prices under control. Any upsurgence of price indices in the United States would have swift and disastrous repercussions in Canada.

Canada has made two interesting experiments in promoting wartime industrial tranquillity. Strikes have not been outlawed; but it is illegal to call a strike in a war industry until a government board of mediation has handed dowm an opinion on the dispute. Persons who call illegal strikes or who are suspected of Communist affiliations are often placed in internment camps without public trial.

There has been an attempt to stabilize real wages by establishing a cost-ofliving bonus scheme under which a wage increase becomes automatic if the official index reveals a rise in the cost of living. Strikes still do take place, sometimes because mediation boards are slow in functioning, sometimes because the decisions are not acceptable to one side or the other. But Canada has experienced far fewer strikes, in proportion to the number of workers, than the United States. Figures for the first six months of 1941 show the loss of time per 10,000 workers as 54 days in Canada, 381 in the United States. The cost-ofliving bonus is useful while prices are kept fairly steady. But it might easily break down in the event of a serious inflationary trend.

Canada has been free from the curse of the jurisdictional strike, although a bitter factional feud inside one union caused the loss of 750,000 tons of badly needed coal in Cape Breton during the last year. The CIO and A. F. of L. feud has been only faintly reflected in Canada, where the two main labor organizations, the Trades and Labor Congress (with A. F. of L. affiliations) and the Canadian Congress of Labor (which includes some CIO unions), have refrained as a rule from poaching on each other’s organizing preserves.

War is an enormous accelerator of political, social, and economic change. It is the greatest conceivable revolutionary dynamo. And this war, I believe, will exert a profound effect upon the course of United States-Canadian relations, which have long floated over waters of placid friendliness, broken by an occasional squall or ruffle.

It is almost unthinkable, even in the event of a complete British victory, that the integration of Canadian and United States economies which has already gone so far could be undone without disastrous shocks to both countries. Should there be a British defeat or a compromise peace, — which many observers would regard as the same thing, — the pressure of circumstances, always so much stronger than that of theoretical propaganda, would almost certainly force these two neighbors into a North American coalition. And such a coalition might well become the first practical experiment in Union Now.