Trade Relations Between Australia and Canada

PRESIDENT: Today the Empire Club of Canada takes the opportunity of welcoming, greeting a representative from one of our sister nations of the British Empire, the Honourable Percy Pease.

The speed of transportation and communications of these modern times has brought the different nations of the world closer together anal we, as members of this great British Empire, can benefit a great deal' in the union which is not made more practical among the nations which form that great Empire. We have the opportunity now of cementing that union which is founded on sentiment and common ideals. We can learn much from our sister nations and I know from the very short time I have had delightfully interviewing Mr. Pease, we can learn a great deal from Queensland. The Honourable Mr. Pease will address us today on trade relationships as between Queensland, Australia, and Canada.

Mr. Pease has had an extensive career in public life in Australia and he is well qualified to give us some intelligent survery of the conditions existing now and we hope to have closer relations in the future between our two nations in the British Empire. (Applause.)

THE HONOURABLE PERCY PEASE: Gentlemen, I appreciate the kindness of your Club in giving me the opportunity of saying a few words about Queensland, Australia. I appreciate the kindly greeting extended to me on your behalf by your President.

Now, our State of Queensland is 'down under,' as you say in Canada, to the extent that it take us something like three weeks by boat travel to get to Sydney. It is a state of nearly three-quarters of a million square miles in area, so you can quite understand the problems we have as a government in trying to develop a state such as that. We produce three times more than we can consume under ordinary conditions and, therefore, we must look for a market somewhere to take the surplus that we cannot eat or cannot consume, for the purpose of carrying on, developing our country and paying our way.

Like yourselves, we took part in the Great War. We did it voluntarily and we are not squealing about what it cost us, but it has imposed a tremendous burden on us, the people of Queensland, as well as on the people of Australia, and as it has on you, the people of Canada. It, therefore, has become a necessity that we should try to expand our production so that we may increase the money coming into our State and Commonwealth in order to make good the expenditure on that war. The public debt of Australia apprecaited something like two-thirds as a result of that war debt. What I want to convey is, had it not been for Australia taking part in that war as a unit of the British Empire, the burden to the people of my State and the people of Australia would have been very much less than it is today. I say again, we are not complaining. We realize that as a unit of the British Empire it was our duty to do what we did do during that war, as you in Canada also realize. We appeal to you as a sister Dominion to see our problems and as far as in your power lies to help us. The advantage is mine today of trying to tell you in a few minutes some of our problems and it is for you in turn to see if you can help us in any way. After all, we are all units of the one Empire. So far as Australia and Canada are concerned, we are even closer than that. We are away "down under" in the Pacific Ocean. At Victoria, British Columbia, you are also on the Pacific Ocean and you have to realize whatever happens, whatever develops, whatever takes place so far as any unit in the Pacific Ocean is concerned, you, also, are going to be concerned in any such developments.

Some people tell us in Australia that other nations, not British, may become antagonistic and may come along and seek to take Australia. One cannot entirely lose sight of such a possibility. That is why we in Australia, apart from sentimental ties, value our association with kindred people in the British Commonwealth of Nations. Moreover our trade policy has been based, in the first place, on encouragement of Empire commerce by means of tariff preferences.

Now, we are quite prepared in my State to take from Canada any goods that you produce that we need. We are not looking to Canada to take from us any goods that you are producing to such an extent that it would embarrass your expansion and your settlers to take similar goods from us. We don't want that.

I want to tell you, so far as our import trade with British Empire countries is concerned, forty per cent of such import, outside of United Kingdom goods, is done with Canada. (Applause.) I am thinking of the United States in this matter because I realize, especially after travelling through the United States, that you are linked up with the States; you are part and parcel of the North American Continent. We take a train at New York and in a few hours we are in Canada. I realize now after travelling as I have done, that Canada and the States are very much linked as regards trade and commerce and development. Now, in respect of Australia's import trade from foreign countries thirty percent is supplied by the United States of America.

We do not make motor cars in Australia and I want to say that in the whole of the vast Commonwealth oaf Australia, including Queensland, there is only a population of under 7,000,000 people. There are more than 7,000,000 people in New York City alone. But because of our great distances in Australia and our high standard of living motor cars are very popular but comparatively expensive. There were over 650,000 motor vehicles registered in Australia at the end of last year. In my own State, of over a million men, women and children we have registered over 93,000 motor vehicles. As a result of the preference granted by Australia to Canada under the Trade Agreement of 1931, Canada supplied to Australia last year over 31,000 automobiles which is more than Canada exported to any other country. United States supplied the next largest number, followed by the United Kingdom. Last year the Commonwealth purchased over $30,000,000. worth of new motor cars, principally as I have said, from Canada and the United States.

We have no-oil fuel. In my own State of Queensland, we have spent millions of pounds searching for oil. We have not been able to find it. Geologists tell us the history of Australia is that millions of years ago Australia was a part of South America. It broke off, was submerged under the sea for centuries and centuries, then we emerged from the sea. The proof of that they tell us is that when you are travelling through Queensland or throughout Australia, on the highest mountains you will always find sand and sea-shells. In relation to oil, the geologists tell us that whatever oil we may have had millions of years ago is petrified and is now there as shale. We have in Queensland, I think, the greatest deposit of shale in the world, in proportion to area. You probably know that throughout America and in all other parts where investigations have been made up to date there has not been a solution found whereby commercial quantities of oil might be produced from that shale; that is, any effort to put that shale through a process which would make it fit to use as oil has not succeeded, and our trouble in Queensland and Australia is that we are depedent entirely for our supply of oil from overseas countries, of which the United States is the second largest supplier. In the last twelve months the Commonwealth of Australia purchased $25,000,000 worth of oil and that oil came, as I said, largely from America.

Now, we have been trying to do something in Queensland to offset that and we have the great cane sugar industry in Queensland. We are the only people in the world who are trying to grow cane sugar under what is called "white labour conditions." In my own State of Queensland we produce £7,300,000, or $35,000,000 worth of sugar each year. It is all produced under white labour conditions. No one is engaged in that industry who does not get a fair rate of wages and they are all white people. We do not employ Asiatics or Indians or any other cheap form of labour, such as I saw being done at Honolulu and Fiji, on my way across here. I am proud that we in Australia have developed that idea over many years because we realize we can only build up a nation with white people. If the time should come and many people throughout the world have said that we in Australia will have to meet aggression sooner than any other part of the British Empire--if the time should come when aggression has to be met--there is one thing that we in Australia are proud of--a hundred percent of our people are white people and every one of those inhabitants will fight for their own country.

Now, in this sugar industry we have tried to make use of the by-products. In Queensland we have spent quite a lot of money in. research to see if it is possible to produce power alcohol from the by-product of the cane sugar. We have succeeded in doing so to a certain extent in one of our sugar mills and in, Queensland, by law, 15 per cent of this power alcohol must be mixed with the petrol we import from overseas for use in our motor cars.

However, that is only a small effort. We are trying to develop but, as I say, we owe a lot of money. There is one thing in Queensland, in Australia, we are always proud of. We never repudiate. Whatever we owe we always pay. I had the pleasure of speaking in New York on Australia Day and I pointed out that Queensland was the first state in Australia to borrow money in America. We had to borrow it because we had a lot of people to take care of and we desired as a government to go ahead with loan expenditure. For some reason or other we couldn't get just exactly what we wanted in England, from the Bank of England, and our Premier of the day--it was in 1920--went to the New York Bankers and they loaned him for the Queensland Government a considerable sum of money. Both in America and Canada you certainly drive pretty hard bargains when you have the opportunity and we don't blame you for doing so. Perhaps you are kinder in Canada than they are in the States. In the States the bargain they made with our Premier of Queensland of that time was that we should pay seven percent for that loan. We should repay it in New York in New York currency and we should provide a sinking fund and all sorts of safeguards that the money would be paid. Now, that was sixteen years ago. We are still paying the seven per cent because we made that bargain and in the time of the financial crisis, which you met here as we had to meet it, we never attempted in any way to ask the Bank in New York to reduce our interest. I had the pleasure of meeting one of the largest bondholders while I was in New York and he told me he would have been quite prepared, had we approached him, to reduce that rate of interest to what may he considered a fair rate of interest today. I say it is the boast of my government and the people of Queensland, Australia, that we never repudiate .a contract and we intend to continue the payment of that money on the terms and conditions that we received it. (Applause.)

I am mentioning that to show that in addition to trade relationships, as between my State and the North American Continent there is a relationship in the financial field. Since the State of Queensland went to America for money, other states in Australia and the Commonwealth Government itself have done likewise. In Australia today there are considerable amounts of money invested representing American capital, so that here also is a link between North America and Australia. I think it was a really good idea of our Premier in Queensland in 1920 to come to America to borrow money and extend trade between the United States and Australia. In my own State today we also have considerable investment. In Queensland, of which the capital city is Brisbane, we have semi-state abattoirs; that is, abattoirs in respect of which the State has guaranteed the repayment of the capital invested. The meat works I refer to is one of Swift's, and the capital investment in that particular plant would represent all-American capital.

Well, I am not complaining about that because if our business people in Australia choose to let Swift's come across to my State and invest in the cattle industry, well, we welcome them. As a matter of fact in Queensland, of which. I am competent to speak-I am not able altogether to speak on behalf of the Commonwealth because I represent the State of Queensland--in Queensland we do welcome business people, white people, who are prepared to invest their capital and we will give them every opportunity to make decent dividends.

We are supposed to be a socialistic government in Queensland, but we believe in a fair deal to everyone. We believe in giving our people fair wages and good working conditions and we believe in extending those two conditions to the people engaged in business. We believe that those who have invested their capital should receive fair dividends. So long as any business people who are white people come across to Queensland we will welcome them and do everything possible to see that their investments return them sound dividends.

Now, I want to say a few words in regard to the trade as between Canada and Australia, because the main object of my speaking here today is to draw attention to the balance of trade which is heavily in favour of Canada, and in connection with which you, as representatives of the important interests in Canada, probably can give some assistance to our State. For every $5.00 worth that Australia buys from Canada--you notice I am talking in dollars although in our country we don't know anything about them; the only think I know is when I get here I realised rather painfully that for every good Australian pound I had to pay something like a dollar for exchange, for every $5.00 worth of goods we buy from you in Canada you buy $1.75 worth. I ask you, Gentlemen, to consider whether that is at it should be. We have the goods I can assure you we have them, and when I get back to my State I am going to do my very best to interview various trade concerns in an effort to persuade them to send people across here to convince you that we have the goods which you need and which do not compete with your own goods.

Now, our Trade Commissioner here is doing a good deal of work but he is concerned with matters affecting Australia's export trade to Canada as a whole. The Queensland Government, of course, does its best to encourage exports of Queensland goods. Every state in Australia has local autonomy. We, in Queensland, are a very, very big producing country and we must do far better in realizing on the production of our state if we are to expand and I don't think anyone here will say I am stating anything unreasonble when I say the difference as between $5.00 and $1.75 is not a fair proportion.

Not only that but our trade is increasing with Canada. It is increasing every year. Last year our trade with Canada increased to a far greater degree than did yours with us, so we are getting worse. My job here today is to try to enlist your sympathies in an effort to improve this situation, that it may not become worse.

I mention those facts to show you what is the proportion of the difference. Previously, there was a great disproportion and last year the increase in favour of Canada continued unabated. If our buying from Canada continues to increase in this way I don't know what our Trade Commissioner will be doing here later on.

That is the position as regards my own State, for which I am speaking. I realize that today while I am talking to you, your Federal Minister, Mr. Euler, and our Trade Commissioner, Mr. MacGregor, right here in Toronto, are conversing with Commonwealth Ministers in Australia, with a view to evening things up and I certainly don't want to, do anything that may embarrass Mr. MacGregor, who is assisting the Australian representatives, or Mr. Euler; but I am competent to talk on behalf of my own State.

My Commissioner of Forests is with me and while we were in Montreal we went along to Three Rivers. When the river is open at Three Rivers shiploads of newsprint go direct to my capital city of Brisbane. Every morning when I open my paper to read, as a politician, and as the politicians here probably do, also, the editorials telling how much better they could run the country thane the politicians, every morning when I read the editorials about the faults of the politicians I have to read a Canadian newspaper, that is, the newsprint comes from Canada. Now, I have been to Three Rivers where that newsprint was made and every time I pick up my paper in future I will visualize Three Rivers and Canada. I want to say I hope that the people here will realize that we are buying a great deal from Canada that we are not producing ourselves and buying it, perhaps, at a greater cost than we could buy from some other parts that are not in the British Empire.

Last year in Australia we bought $10,000,000 of newsprint. Now, my portfolio covers also the control of the forests and I have been asked whether it wouldn't be possible in Queensland to develop newsprint ourselves by using the production of our forests and making our own paper over there. Well, in Queensland we are a practical government, we do not believe in doing anything that is not sound, economically. So far as newsprint is concerned, I was able to tell the people who are producing the newsprint in Three Rivers that they need not worry about us, in Queensland, trying to produce our own newsprint. I am quite satisfied that over here you produce it cheaper than we can and we are quite prepared to buy your newsprint and in turn we ask you to buy something from us to even up the trade balance.

Now, since coming to Canada I have had the pleasure and privilege of going through a good many of your Canadian forests. In British Columbia you certainly have in the Douglas Fir a most wonderful asset. I went along from Victoria to Alberni and I saw a shipload of timber. I enquired where it was going and I was told that it was going to Australia. In Queensland we have the Mt. Isa Mining Company which is developing very, very big copper and silver-lead deposits, and those people buy right here in Canada their timber for their mines. A shipload of mining timber goes across every now and again from Alberni or one of your other ports, direct to our capital city of Brisbane, for the Mt. Isa Mining Company, in particular. That is a British company which came with English, capital to Queensland some years ago and spent quite a lot of money developing that vast silver-lead mine, away in the interior, working under pretty hard conditions because it was costing a considerable amount of money to transport coke and other materials required for smelting from the coast to the mine. Quite recently they decided they would try to develop their zinc resources. They had not sufficient capital of their own to do so. They approached their bankers in England for an advance of £ 500.000 to carry out their work with zinc. The bank in England told them, "Very well, we will lend the money if the Queensland Government will guarantee the transaction." We examined the position, as a government, and found how many thousand men were employed in the mine; the value of the conveyance of their goods over the railways was considerable, and my government guaranteed that £ 500,000. That gave us the opportunity, as you will fully realize, to say to that mine, "Well, we .are doing this for you and we have certain control over your timber. Whatever else happens, you should buy that timber in Queensland." But we didn't say that. We allow them to buy their timber in Canada because it is stated, and I think it is quite correct, that the timber of Canada, so far as mining is concerned, is probably the most durable and satisfactory timber in the world to use. We allow this company, in spite of the guarantee to spend considerable sums of money in bringing timber over from Canada to use in their mines, although we have, perhaps, somewhat similar timber in Queensland.

I am just mentioning that to show you that the spirit of the government is fair. Possibly if that timber were not coming from a British Dominion, such as Canada, we might take other steps.

What we are asking is that as those shiploads go across to our country, when the ship goes back it should bring goods from our country to your country and I am asking that, not on behalf of Australia, for which our Trade Commissioner speaks, but I am asking that on behalf of my State of Queensland, that vast, under-peopled area which the government is trying to develop under all those trying circumstances and I am asking you to, do what you can to help us.

As I say, we in Queensland, produce quite a lot of timber. The two states in Australia which produce a lot of timber are Queensland and Western Australia, yet the value of the timber imported into the Commonwealth last year, practically all coming from Canada, was over $8,000,000 worth, so it is quite a good trade for you. I think as you analyze what I say you will realize the interest you in Canada have in Australia and, more particularly, in Queensland.

I was just going through our trade figures to find out what else we bought from Canada and I could speak for quite a long time, enumerating the items. I was reminded that the very watch I wear was made in Canada. Now, what better tribute could you get than that a Minister of the Crown in Queensland has to buy his watch from Canada? That is the position.

I do want to say this, we boast that in Australia and in Queensland we do try--and when I say "we" I mean politicians--we do try to help the people who help us. I travel a good deal in Queensland, I go from one end of Queensland to the other, at least once a year. I go into the back blocks of my own electorate in which there are miners and all other classes of people, especially the sugar people, and I ask them to remember, if they want to dispose of their surplus sugar and other products they must in return help the British countries that can take our products.

There is one other matter Canada is very much interested in, in particular British Columbia, that is canned fish. We are big canned fish eaters in Queensland because the climate is very, very hot and meat will not keep too long. Now, I could take any of you to the far outposts of Queensland where mining and other 'industries are being developed and I could show you hundreds of empty tins of canned salmon and herrings and sardines and those people up there are buying Canadian, canned salmon and sardines, in preference to buying in other countries that are not British because wherever a Minister of the Crown or a Member of Parliament of Queensland goes he tries to impress upon the people of the district that they in turn can, help trade relationships by eating the products of the country we expect to help us.

That is why I am asking you to do what you can for us, individually. Some hundreds of miners asking for canned salmon represent shiploads of salmon leaving British Columbia every year, going to Brisbane and filtering through to the back blocks of Queensland. It is astonishing what individuals can do if they only set out to do it.

Just to illustrate: We had the pleasure of a visit from Mr. Bennett in Australia quite recently, and this very day, Thursday, February 18th, we are fabricating in Sydney, at one of our steel mills, 6,50(1 tons of steel rails that are going to be used right over here is your Canadian National Railways. (Applause.) That is one way, perhaps, that an individual can help. And whatever else happens, as I say, in helping us you are helping yourselves. You are evening up the balance of trade. Your ships go over with paper and timber and fish and so on, and in turn those ships will bring back rails for your railways and other Australian products. I will undertake to say also that the Directors of the Canadian National Railways are hard-headed business men, they are not paying any more for the rails than they can get them for elsewhere. I will say we will give you a very good quality.

Now, that is what I am asking you to do today--and I know from experience just how much a propagandist can do in any part of the world--I would ask each of you, Gentlemen, to consider what I have said. I don't ask you to wear an Australian watch because I am wearing a Canadian one. I do ask you to remember, please, that we are producing in Queensland and Australia, a number of commodities which you can use over here without any detriment to your own people.

As Minister of Lands, as my worthy confrere here (Hon. Peter Heenan) is, my job is to take care of my own people on the land. These people deserve everything they can get. It is a hard task. No people who develop a country work more than the man on the land. We, in Queensland, are opening up large areas. I have had the privilege of opening up an area with something like 1,200 crew settlers every year in my States, during the last five years that I have had the honour to be Minister of Lands. Six thousand new people have gone on our land in Queensland, producing something, and my job is to take Care that they have a market for what they produce.

I do ask you, also, to come across and see us sometimes. When I ask people in Canada to come across to see us, they say, "O, it is such a long way distant." Well, the distance is just the same, coming from Australia to Canada as it is going from Canada to Australia. There is no difference in going and coming. Because of the relationships between Australia and Canada, more particularly in the last few years, our people in Queensland, and in Australia, when they go over to England, are making it their business to come across via Canada. I came across on your Canadian finer, the Niagara, from Australia to Victoria, and I am going back on the Aorangi. Then we travel across Canada on your railways and see your beautiful country. It is beautiful, there is no doubt about it. We meet your nice people--and you are nice. Wherever I have been in Canada I do, say you even up with our people in Australia. (Laughter.) I have met in my travels many men, who have been in the Great War and I have found out they were very pally with the Australians. Wherever I have met an ex-digger, as we call them in our country, he tells of the nice friendships he had with our diggers from Australia. When in Paris and other places the Australians and the Canadians had the time of their lives. Now, during the war that fellowship developed and has since continued more closely than in pre-war days and I do ask you as people of Canada to help our State. I am not pleading for anything--I don't want anything that we don't deserve. I say, quite unhesitatingly, we wild give you the best products of our workmen in Australia: Our men, as I say, are all white people and I say the white man is the man who produces the goods. Whether he works in a factory or wherever he works, you will get from the intelligent white people something the other races do not give. We will give you the goods, and we wild give you a good time if you come across. On behalf of Queensland, I ask everybody here to pay us a visit. We wild take care of you. I do hope my few words today will develop a kindly feeling for our State of Queensland and for Australia. (Applause.)

PRESIDENT: To express the thanks of this meeting and of those listening in on the air, I am going to ask the representative of another unit of the British Empire, the Trade Commissioner of New Zealand, Mr. J. W. Collins, O.B.E., to say a few words.

MR. J. W. COLLINS: Mr. Balfour, and Gentlemen: I feel it a very great privilege indeed that you have asked me, the representative of the New Zealand Government in Canada, to express our appreciation to our guest-speaker today, the Honourable Mr. Pease, Minister of Lands, of Queensland, Australia. I am sure that you have all enjoyed, his very educative and interesting address.

I have had the privilege, as a citizen of a neighbouring Dominion, twelve miles across the Tasman Sea from Australia, to know that Commonwealth perhaps better than the majority of the gentlemen in this room. Naturally, our peoples are on most friendly terms.

I know that we all enjoyed what Mr. Pease had to say in regard to Queenland's overseas debt, particularly to the United States. Mr. Pease is a member of a Labour Administration, and it is generally understood, I think wrongly understood, that labour governments are inclined to repudiate and to ask the people who loan governments, perhaps to a former administration at a high rate of interest, to reduce that rate of interest, and I am sure it must have been very illuminating and very satisfactory to this audience to hear Mr. Pease's exposition that Australia and Queensland do not repudiate and are paying the full interest to your neighbour to the south of you on the debt borrowed in 1920. Queensland has set an example to New Zealand. Queensland has had a Labour Government for many, many years and we, for the first time in our history, had a Labour Government elected last year. Mr. Pease will know and probably you will know that our government has the same high principles of administration and the destiny of New Zealand, like that of Queensland under its Labour Government, is safe in their hands.

May I, without further ado express to you, Mr. Pease, our very, very cordial and grateful thanks for the highly interesting and educative address you have given us today.