Canadian Minerals in Peace and War

PRESIDENT: Gentlemen, such is the wisdom and power of The Empire Club of Canada that we invited Mr. George A. Urquhart, K.C., to be among our guests today and who should arrive but the Honourable Mr. Justice Urquhart. We welcome him here today and we congratulate him on his elevation to the Bench, and the people of Ontario on his appointment. (Applause.)

Six years ago (tomorrow, the 28th of January, 1932, the members of this Club listened to a very interesting and instructive address on Ontario's mining industry. It was an address that should be written into the history of this Province. The guest-speaker said that in I go I the production of gold in Ontario was nil. That was the year he commenced the practice of law in Sudbury. Ten years later, that is in 1911, the year he was elected as the representative for the Sudbury District, $24,000 worth of gold was produced in this province. In 1923, when he became Minister of Mines for the Province of Ontario, the gold production had reached many millions of dollars. It can be truly said that the Honourable Charles McCrea grew up with mining and mining grew up with him. With such stability did he legislate in mining taxation that capital was attracted not only from other parts of Canada but from other countries of the world for the development of Northern Ontario. To my knowledge, during his term of office and up to the present time there has been no derogatory criticism of the Department of Mines of the Province of Ontario. To our guest-speaker today, the same Honourable Charles McCrea, Ontario owes an ever-increasing debt of gratitude. (Applause.) It is an honour for me to ask him now to address us. His subject, "Canadian Minerals in Peace and War." (Applause.)

HONOURABLE CHARLES MCCREA, K.C.: Mr. Chairman, Gentlemen: May I extend to the Chairman my thanks for the very kindly introduction which he has accorded me and may I express the pleasure which is mine today in again addressing The Empire Club of Canada. The subject of my address is "Canadian Minerals in Peace and War."

May I predicate my remarks upon the basic theory that our prosperity in any year is measured in the main .by the value of the wealth crop which we take from our basic industries. These are agriculture, lumbering, mining, fishing and fur and, now, tourist traffic. The secondary industries in processing and manufacturing are reared on these foundations, and to supply a purchasing power, and catering to both the primary and secondary industries, are the banks, financial houses, loan companies, railways, insurance companies, power companies, construction companies, merchandising agencies and the various related services to meet the needs of our people, and last, but not least, religion and education produce the great, guiding, leavening and directing forces to weld our millions of people into a national and unified Canada. So, with that introduction, I approach the subject of: "Canadian Minerals in Peace and War."

This mining industry has become one of Canada's outstanding industries, expanding surely and impressively. A boy yesterday, grown into a man of towering strength today, he points proudly to his record of past years. Today on the threshold of 1938 he says, with even greater pride, "Look at my record for 1937." That record is a proud one for the mining industry, a proud one for Canada. We thought in 1935 when we set up a new record for mineral production at 312 million dollars for the Dominion that we had done very well, but in 1936 that had improved by 50 millions, rising to 362 millions. 1937 tops them all with a record production of 4.52 million dollars, up go millions over a year ago. When we look back about 40 years and realize that Canada's total mineral production was less than 30 millions and today it has risen to this magnificent total of over 4.50 millions, one realizes what tremendous strides have been made. This 452 million dollars has gone, as you know, in salaries, wages, supplies, equipment, freight, power, insurance, dividends and taxation. Last year this industry employed some 105,000 people and had a payroll of 135 million dollars, more than 33 millions over 1935. That did not include the vast sums of money that went into prospecting which covered thousands of men in the field.

In making up this total of 4.52 million dollars, British Columbia contributed 71 millions, or over 16 per cent; Manitoba, 17 millions, or 4.7 percent; Ontario, 227 million, 500 thousand dollars, (over 50 percent of the gross production); Quebec, 6o.2 million, or thirteen percent, and Nova Scotia, some 33 million or seven percent.

Of the total of 4.52 million dollars, some 333 millions were from metals. The payroll of 135 million became purchasing power which went for food, clothing, shelter and the luxuries of the men engaged in the mining industry. 18 million dollars were paid for power to run the industry in 1937, 20 million dollars were paid for freight and express by .the mining companies alone.

The Province of Nova Scotia sold -to the mining industry of Ontario and Quebec some 373,000 tons of coal, and the mining of that coal gave 160,000 man-days of employment to the miners of Nova Scotia.

An industry which produces annually 452 million dollars worth of minerals is a tremendous industry to cater to and you will be glad to know that ninety per cent. of the mining equipment and the supplies purchased for that industry were purchased in Canada. In catering to that industry, this city and every manufacturing town and city in this province and in Quebec and elsewhere is feeling the purchasing power of these millions of dollars pouring out into the trade channels of this country. 150 million dollars were disbursed as dividends from the metal mines in 1937.

Our export trade in metals in 1937 was about 328 millions of dollars, close to 30 percent of the total export trade of Canada. Hon. Mr. Crear is authority for the statement that our 1937 external trade in minerals was sufficient to pay for all our imports from the rest of the British Empire and all the principal foreign countries, except the United States.

When we look at Canada's total foreign trade we find our imports for the twelve months ending, September 1937, amounted to 777 millions, while our exports, including gold bullion, had reached a total of 1,142 million dollars. These figures tell much of the part that metals and metal mining are playing in the Province of Ontario and in the Dominion of Canada.

In our gold fields Canada operated last year 128 gold milling plants, with an average production of 42,000 tons a day. 30 new mills are promised as an addition to that for 1938, increasing the total production capacity by 5,000 tons daily, so that across Canada, by the end of 1938, we will be mining gold ore at the rate of 47,000 tons a day.

In addition to our gold we have made new records in the production of nickel, of copper, of lead, of zinc, of platinum, and the search for these metals, which contribute in such a substantial way to business, must go on. There i5 today in the mining world a determination not only that the search shall go on, but that the benefits of mining shall extend to land embrace an increasing number of people in Canada in peace time.

It has been suggested that I should discuss as well the phase of Canada's minerals in war time. As one usually thinks of the metal, nickel, when war is mentioned, because of former agitations to prohibit its export and to control it, perhaps it is of interest to look in a special way at what this nickel industry is in peace times. Let me give you a few facts.

In 1937 it had a wage and salary roll of some 2o million dollars. Its timber purchases for mining uses last year amounted to 2/2 million dollars and of that amount, some 600 thousand dollars went for the purchase of fir and other timber material from British Columbia. It consumes about 350,000 tons of Canadian coal per annum. It consumes 150 to 175 thousand tons of coke. It is a very large purchaser of mine equipment and supplies. Its contribution to railway traffic runs up to the millions. As a consumer it uses all the power available through its plants in the vicinity of Sudbury and in addition to that it is taking large quantities over the transmission line from the Abitibi Canyon. It is a producer of nickel, copper, platinum, gold, silver, selenium, and all the metals extracted from this one ore, for these metals all occur in the nickelcopper ores of Sudbury. They are refiners of copper and nickel in Canada. It will be interesting to you to know that with their vast organization in this country for the production of nickel, only one percent of the nickel produced in Canada is consumed in Canada and that ninety-nine percent of that great production is for export.

Last year, according to the Ontario Government figures, the nickel produced had a value approaching 58 1/2 million dollars, copper a value of 42 1/3 million dollars, platinum a value of 8 to 10 million, or a total production value of over 110 million dollars. International Nickel produced 94 percent of Canada's nickel and 60 percent of the copper. The chief consumers of this nickel were the United States, the principal customer, and the British Isles. The uses of nickel, as you know, are many now because of the alloy age brought about by research laboratory work, chiefly after the war. In the automotive industry nickel is indispensable and it is indispensable in the shipping industry for the handling of tank cars. It is indispensable in the railway industry. It is indispensable in the building of engines and lighter trucks and equipment. It is indispensable in the chemical industry. It is indispensable in the agricultural industry, and in the paper industry.

So the use of this great metal, called nickel, is one that is month by month increasing. The market for nickel is expanding because the world, in this modern age, has found need for new alloys, in which nickel plays such a part, in a larger field and one of greater opportunity. All the nations of the world require this metal if they are to keep abreast of what these new alloys can do.

It is interesting to note that in the early days of nickel its chief use was for armaments and for what are called war purposes. With the close of the Great War that great use passed. Today it is estimated that of the great production of nickel, 95 percent goes for peace uses. Certainly five to ten percent would cover all the nickel demanded for war. So, with this scientific research, with the labour and skill of our mining men, the genius and the dating of them, Canada stands today as a great vendor of nickel. She has on her counters for sale to the world and she is producing some 20 metals, 4 fuels and 26 non-metallic minerals.

I have taken that industry to show in a short way the extent of it in peace times, and when it is suggested, as I pointed out, that we discuss Canada's minerals from a war standpoint, the mind of Canada naturally focusses itself on this great metal, nickel, and the mind turns back-mine does for I went to live in Sudbury in 1901--to the agitations of former years to prohibit the export of nickel. My mind goes back to the effort to build up a national antagonism against the International Nickel Company of the Sudbury District, and to spread propaganda that nickel must not be allowed to leave the country as it was being sold to Germany to kill our soldiers. These stories were the order of the day in 1914.

I am going to review these stories shortly because in recent months you have heard from time to time, a peep here and a cheep there, with the same cry against the exportation of nickel. Only the other, night, in my home town of Sudbury, under the euphonious name of the Canadian League for Peace and Democracy, a speaker was advocating prohibiting the export of nickel. So we might as well discuss these things, and in our discussion let us look back and ask ourselves just what happened in the last Great War with reference to nickel.

Before I tell you that story may I first refer to the part the International Nickel Company itself played in that war? I was a member for the District of Sudbury in 1914. It wasn't until some ten or eleven years after that I became Minister of Mines for the Province of Ontario. On the 14th of August, 1914, I suggested to the head of the International Nickel Company, (because in those days Orders-in-Council were being passed every day putting many things on the contraband list), that it would be in the interests of all if they laid the International Nickel Company, whose source of supply was in Canada but whose refining operations then were being carried on in the United States, at the feet of the British Government. The suggestion was immediately taken up and the Canadian head of that institution went to New York. He arrived there on the morning of the 17th of August, 1914On that day in Sudbury I received a telegram asking me to go to New York, and I arrived there on the 19th of August, 1914, when I went into a conference with the executives of the International Nickel. That afternoon the head of the American Company and the head of the Canadian Company and myself left for the City of Ottawa and we arrived there on the 20th of August, 1914, and by three o'clock of that afternoon an arrangement was concluded whereby every pound of nickel produced and refined was to be sold in co-operation with and under the advice of an officer of the British Admiralty.

That arrangement was kept faithfully and honourably, right up until the close of the war and I would remind you that at the time the United States was a neutral country, but the attitude of this great nickel company was to play the game with Canada, with the Empire, and the Allies, that whatever help derived from nickel and its uses would be for the Allies and for nobody else.

Later on, in December of 194, an agitation was commenced, originating in the City of Toronto, to prohibit the export of nickel, and the usual harrowing tales were told: that nickel was being supplied to the enemy, to Germany, that it was slaughtering our soldiers, that the nickel works should be shut down at once, and one can understand that there was considerable anxiety and that bonafide, honest Canadian citizens felt that perhaps some action along those lines should be taken. Some of the press of the City of Toronto in that day, notably the old Toronto World, joined in the hue and cry and everywhere throughout the Province went clever propaganda to prohibit the export of nickel. The British Government, the Canadian Government, had expressed themselves, without giving the details, that they were perfectly satisfied with the arrangement in existence for the control of nickel, but that didn't seem to satisfy those who had an ulterior purpose and an ulterior motive in setting this cry in motion, but these gentlemen who had a motive overplayed their hand. They went to the then Toronto Globe to see if the Globe wouldn't join them in putting this scheme across and the Globe, in an editorial of December 29th, 1914, said in part: "In the month of October a very well-known Toronto citizen visited the Globe office and suggested that The Globe begin a campaign for the absolute prohibition of the export of nickel ore, matte, or oxide from Canada to any country not within the Empire. The opinion was expressed by The Globe's caller that the relations between the Hon. Frank Cochmne, a member of the Borden Government, and the Nickel Trust were such that Mr. Cochrane would exercise his powerful influence 'to prevent the Government from putting an embargo on nickel exports, which must greatly cripple the Nickel Company. If the Government refused to prevent the export of nickel ore or matte to the refineries of the United States The Globe would be able, so we were assured, to make out a strong case against the Government for indirectly aiding Germany. In the background of the conversation could be seen the huge headline, "Cochrane a Traitor, Borden Backs Him Up."

"The visitor, warming to his subject, incidentally confessed to "an interest in nickel." What that interest was The Globe did not ascertain, for its own interest in the visitor's statement ceased there and then. When anyone seeks to injure a business rival in the name of patriotism and party it is high time to sheer off and give the proposition calm and serious consideration.

"The Globe would like to see Canada's nickel refined in Canada, so that the people who originally owned the nickel deposits and gave them away to the predecessors of the Nickel Trust may get at least some benefit from one of the world's greatest mineral deposits. The immediate prohibition of the export of nickel to countries outside of the British Empire would, however, not mean the refining of the nickel in Canada. What it would mean would be the immediate shutting down of the Nickel Trust's mines and roasting plant at Copper Cliff, and a very great increase in the output of the Mond Company, which would for a time have an absolute monopoly of the nickel business, because its refineries are at Swansea in Wales. It could thus operate under an embargo order which would prevent a pound of unrefined nickel from going to the United States or, any other neutral country.

"The Globe does not believe for a moment that The Mond Company is behind the agitation to prevent export to any other country than Great Britain. British business concerns have learned to fight fairly in the open instead of attempting to throttle their rivals from behind in the dark. The most likely explanation of the activity of the patriots who are combining business with love of country is that some group of capitalists owning nickel properties want to secure a bonus or a subsidy for the refining of nickel in Canada, and believe that the easiest way of getting their hand into the public purse is by declaring that the Germans are getting Canadian nickel from .the United States. If that is the plot, the assurance from Ottawa that the British Government is entirely satisfied with existing conditions will be either jeered at or ignored. The attempt to tie up The Globe with the Nickel Trust is a little too clever to succeed.

"If any group of business men want to smash the Trust by fair competition they will have no warmer supporter than The Globe. But any attempt to use patriotism as a jimmy to pry open the public till and secure therefrom aid to destroy a business rival will be fought, as it deserves to be, to the last ditch. The Globe sympathizes with the patriots. It resents the efforts of the plotters to injure its reputation because it refused to join in their ambush."

As The Globe points out, when the motives behind it were uncovered, that attempt failed but by 1917, these attempts were revived once more and this time the objective was political. They wanted to point the finger at the Government of the day and again circulated the stories of nickel reaching the enemy and all the stories that would harrow the heart and mind of .the people of Canada. When that agitation started those behind it gave as their reason that John R. Rathom, Editor and General Manager of the Providence journal, had stated that the International Nickel's products were being sold to Germany, that Germany was obtaining these and that something should be done about it. It created quite a reaction in Canada at that time. I was still a private member of the House and I took the liberty of writing to Mr. Rathom. Mr. Rathom had come to Canada and addressed this Club in June of 1917. He was a great popular figure in the United States. He had covered through his paper the activity of Germans in the United States during that crisis and in that letter that I wrote on the t 8th of June, 1917, 1 pointed out that stories were being circulated, impugning the integrity of the executives of International Nickel Co., who to my knowledge had made this arrangement with the British Government and I asked Mr. Rathom to state just what he had to say and whether there was any reason for the statements that were being circulated here. I have Mr. Rathom's letter here to read: Providence, R.I.

June 23rd, 1917. Dear Sir:

In reply to yours of June 18th, I do not hesitate to write to you what I have already stated publicly many times, both in Canada and in this country-that, as far as we know, Canadian nickel has not been going to Germany for a long time, with the single exception of the shipment on the Deutschland referred to by us several months ago.

Even in this instance, as shown by our story, the nickel which left New London on the Deutschland had been in the United States for at least two years prior to being shipped and, as far as we know, the officers of the International Nickel Company had long since lost all interest in or connection with that particular tonnage.

It has always seemed inconceivable to us that the officers of that corporation should have ever deliberately permitted any direct traffic of this kind since the beginning of the war, and we know of no instance where this has been done.

We have noted with concern that our assertion with regard to the shipment of the nickel referred to on the Deutschland was in some quarters taken to mean that there was some direct connection between the International Company and the consignment of this nickel. Never, however, in any of our published stories was there any hint or suggestion that this was the case.

All we did was to print the exact facts relating to the shipment, in what warehouses it had been stored for a long period of time, the roundabout way in which it was taken from one point to another, and the fact that it originally came from the International people. We did not draw any connection between these facts and the charge that the International knew anything whatever of the destination of this particular shipment, and no fair-minded person reading the stories could draw any such conclusion.

Very truly yours,

(Signed) "JOHN R. RATHOM."

So the second attempt, to create the difficulties which would come if nickel and its export were prohibited, was scotched, but it is interesting, in connection with the reference in Mr. Rathom's letter to the incident of nickel that had gone on the Deutschland, to note that under the arrangement made with the Canadian Government in August of 1914, governing this control of nickel, the International Nickel Company was permitted to sell the metal to its regular customers in the States for peace uses. The United States was a neutral country where the International Nickel Company was carrying on the business of refining its product. In October of 1914, one of its customers, who was suspected of German sympathies, ordered a larger, quantity than was his usual custom. Mr. Monel, who was the President of International Nickel at that time, (and there was no warmer friend in the United States to the Allies in this country than the late Ambrose Monel), refused to sell him this shipment and the customer got very wrathy and went to the Secretary of State for the United States, at that time, Mr. William Jennings Bryan, and there was some discussion as to why this man couldn't get his nickel. The facts were laid by Mr. Monel before the Admiralty. Mr. Monel wanted to adhere to his position and refused to sell the nickel, but the Admiralty advised: "We can't risk any blow-up at this stage. Let him have his nickel and we will see that it doesn't reach Germany; if that is his intention we will pick it up on the high seas." As a matter of fact, as Mr. Rathom pointed out, that shipment of nickel was moved from warehouse to warehouse, covering a period of two years in an attempt to get it out of the country. It wasn't until the submarine Deutschland came over in 1917, that a small part of that shipment was put on that boat. That was all the nickel that ever reached the enemy during the war under the supervision and control set up to protect us under just such conditions.

I point these things out now because there may come a time when these agitations will start again. We know that 99 percent of the nickel we produce is sold out of the country. We want to see this business expand and when from quarters, largely now from people who do not belong to this country, there is urged upon the citizens of the country an agitation to prohibit the export of nickel, we must be on our guard, particularly when this propaganda comes, as I say, from organizations known as the Canadian League for Peace and Democracy. An organization with a similarly sounding name which preceded was the League Against War and Fascism, which the Honourable Minister of Justice in Canada pointed out last year was tainted with Communism.

Well, these organizations with these appealing names will grow up and Canadians must be on their guard. However, since the passing of the days to which I refer many great changes have taken place. The refining of nickel is now done in Canada and this great corporation has become a Canadian corporation, known as the International Nickel Company of Canada, and all of the mines and the refineries, all of the stock of the subsidiaries of the company are held under the ownership of the International Nickel Co. of Canada, and the majority of the Directors are British subjects, so that we, in my humble judgment, have nothing to fear under any circumstances as to the conduct and operation of these mines in case we should ever become involved again.

But in times like these would Canada be wise to prohibit the export of nickel to countries outside the British Empire? Isn't the trend and the thought today to improve trade, to exchange commodities internationally? There were wars long before nickel was heard of and unfortunately it would seem that there will be wars for' generations to come. Are we to fall into any suggested trap of refusing to sell to nations, to be guilty of provocative action, to say that we are going to live within our own shell and not trade with the world? How would Canada feel if the nations from whom we acquire our goods said that they wouldn't sell to us? The whole aim of modern trade is to get away from that class of dealing and, as expressed by one very able gentleman in the Government at Ottawa, "Whatever the conflicting interests of countries, fair trading cannot fail to be beneficial. It is such friendly co-operation and not the mailed fist which will help to solve the major, problems of the present day."

Now, so much in that short way for the history of nickel in war as we had it before. England listened to many pacifists for the past five or ten years, with the result that she finds herself in a position today where she is working overtime to try to catch up with defensive works and equipment, not for war but to make sure that England and the British Empire shall be protected. In that work Canada cannot afford to take any small stand. We, too, must be prepared to play our part if we value the great potentialities of this country and which are our hope and future.

Behind me on this wall hangs a map of Canada. The part shown in red, and which is by far the greatest portion of Canada, is that section known to all of us as the Pre-Cambrian shield. On that map you will observe white dots, in Quebec, in Ontario, Manitoba, Saskatchewan, and on up to the Northwest Territories, to indicate the headquarters of mining activity, beacons pointing to the great development which must come in this great hinterland of Canada. As one looks at Quebec, with its mineral production last year of 60 million dollars, at Ontario, with 22.7 million dollars, at Manitoba with 17 million dollars, one realizes just what a contribution these outposts of a great basic industry are making to Canada's business world. On into the great sweeps of the Northwest Territories, developments are taking place which will put this part of the country as a mining area on the map. Just now the finger is pointing to the great new section of Yellowknife. I am quite satisfied from what I know of the District that before the end of 1938 Canada will record two new gold producers up in that far extremity of the Dominion of Canada. Off to the west of the red line we have the great new oil field of Alberta. We have in the British Columbia section the great lead-zinc works of Consolidated Smelters. These vast industries are playing a tremendous part in this country's development. We are in an era which I believe must be a new speculative one for Canada. The business men of today must adopt a new viewpoint on Canadian development, particularly in mining, as the forefathers of this country did when they started to build and develop this great country called Canada. There is great opportunity and hard work ahead for Canadians, and generations from now men will still be searching for and finding great mines. It is wisdom on the part of Canadians that we should begin to enlarge our business world, that we should increase our business activity, that we should have other pillars and posts on which to rest our great load of taxation because the tax load is not lessening. There must be more shoulders to bear and carry it. The old saying that, "To him that hath shall be given," unless we change our ways, may invite a new saying, "From him that hath shall be taken." Some think a great amount of it is taken now, but unless we widen the business horizon of this great Dominion of Canada, that will be the position in which we will find ourselves.

Gentlemen, my time is up. I have only given you a hop, skip and jump idea of Canada's mining in peace and a review of the history of what happened some of her minerals in war. My hope is that the men of this great Empire Club will take a widening and deeper interest in the expansion of mining in this great Dominion of Canada. I thank you. (Applause.)

PRESIDENT: Mr. McCrea, you are a good hop, skip and jumper. We are very grateful to you for giving us of your time and experience, for your optimism and your enthusiasm, so needed today. You have heard the informal thanks of your audience and I now thank you formally, on behalf of the members of the Empire Club of Canada, and your radio audience, for this splendid address today.

The meeting is adjourned.