The Dynamics of a Trade Mission

LT.-COL. MONTAGUE: We have assembled today to hear an address by Honorary Air Commodore James Stuart Duncan, C.M.G., LL.D.-Chairman, The HydroElectric Power Commission of Ontario, "Canadian Business and Public Servant Extraordinary" and a fellow club member.

While it may be said that, to this Toronto audience, no further introduction is necessary--it would be unforgivable to fail to make the most of this opportunity of drawing inspiration from brief reference to some of the highlights of Dr. Duncan's distinguished career.

Born in Paris, France, of Scottish parents, while his father was Manager for France of the Massey-Harris Company, Mr. Duncan's business experience commenced as an office boy, at sixteen, with Massey-Harris in Berlin, Germany. Soon he was sent to Canada for factory and sales work.

At the beginning of World War I he returned to France prior to enlisting as a gunner in the Royal Field Artillery. War's end found him a captain with a Mention in Despatches.

Rejoining Massey-Harris on demobilization in 1919 he remained abroad and by 1931 became European Manager. In 1933 he was posted to Buenos Aires as General Manager of the Argentine Division; then, in 1935, to Toronto as General Sales Manager, Assistant General Manager and General Manager within that year. By 1941 he was President, and by 1949 he was also Chairman of the Board.

Amalgamation with the Harry Ferguson Companies followed and, upon Mr. Ferguson's early retirement, Mr. Duncan again became President and Chairman. In June, 1956, Mr. Duncan himself retired as Chairman, President and Director of Massey-Harris-Ferguson Limited.

Within five months, on 1st November, 1956, Premier Leslie Frost appointed him Chairman of The HydroElectric Power Commission of Ontario, whereupon Mr. Duncan resigned from the boards of many other leading Canadian companies.

Now let us glance at his astonishing accomplishments in public service during World War II and since. By 1941 he had been Acting Deputy Minister of National Defence for Air; had directed the organizational phase of the British Commonwealth Air Training Plan, and was back at Massey-Harris gearing it for war production. Before war's end he had served as Chairman of the Combined Agricultural and Food Committee at Washington; as a Member of the National Research Council; as Honorary President, Fighting French, Toronto Section, and as Chairman of the United Welfare Chest and of the Board of Trade, Toronto.

His own Sovereign recognized his wartime services by appointing him a Companion of the Distinguished Order of St. Michael and St. George. France made him a Chevalier of the French Legion of Honour and presented him with the Croix de Lorraine, Norway awarded him the King Haakon VII Cross of Norway and Canada gazetted him to the rank of Honorary Air Commodore, R.C.A.F.

In 1949 he became Chairman of the newly formed Dollar-Sterling Trade Council; 1955 saw the birth of the Australian-Canadian Association with Mr. Duncan at its Chairman. In June, 1956, the National Sales Executive Organization of the U.S.A. chose him as the "Canadian Businessman of the Year". In September, 1956, during his retirement, Mr. Duncan chaired the National Conference on Engineering, Scientific and Technical Manpower at St. Andrews-by-the-Sea (about which he gave us a report on 10th December, 1956) and, following this conference, he was appointed Chairman of the National Advisory Committee on the Advancement of Education.

The London House Association of Canada elected Mr. Duncan its Chairman in April, 1957. Dartmouth College of Hanover, New Hampshire, conferred the honorary degree of Doctor of Laws on him in September, 1957.

Two months later, November last„ our Canadian Government instituted the Canadian Trade Mission to Great Britain and from this came another call to public service at the national level for Mr. Duncan. As its Deputy Chairman, he spent most of December in the United Kingdom and the Mission's activities there made headlines. This assignment has not yet been concluded nor have the results become fully apparent.

We consider ourselves fortunate, then, that Mr. Duncan has chosen for his subject today "The Dynamics of a Trade Mission".

Gentlemen: Mr. James S. Duncan, Chairman, The Hydro-Electric Power Commission of Ontario.

MR. DUNCAN: The Canadian Trade Mission to Britain arrived at London Airport on the 22nd of November and remained in Great Britain for a period of three and a half weeks. It aroused a degree of public interest, not only in governmental circles but among the industrialists, the business men and, more important still, among the general public, which went far beyond the fondest hopes of those who were responsible for its organization.

I suppose it can be said without exaggeration that more words were written and spoken about Canada during this short period than throughout the previous five years. Even if nothing else was accomplished, our two countries have undoubtedly been brought closer together as a result of our visit.

His Royal Highness the Duke of Edinburgh, while speaking at a luncheon tendered to our mission on the day of our departure, undoubtedly expressed the views of the British people as a whole when he said, "The arrival of the Canadian Trade Mission here is the best thing that has happened to this country in 1957 and for some time before that. I cannot think of a better Christmas present to British industry."

Several reasons explain the remarkable impact which our trade mission had upon the British public. The originality of its conception, the fact that it was the largest trade delegation which had ever left the shores of Canada or had, for that matter, ever been received in Britain from anywhere, the unselfish motives which inspired it, the quality and influence of the delegates themselves, the Mission's fortunate timing, which coincided with a period when the demand from the home and sterling markets was less pressing, all these were the elements contributing to the mission's outstanding success.

But the spontaneous upsurge of public interest and approval which greeted our Mission, and gathered in strength as we went along, cannot be explained by these factors alone. It is in the British people's sure instinct in public affairs, born of generations of experience in world events, that we must look for the explanation. They realized instinctively that here was a Canadian gesture whose significance reached well beyond commercial considerations, basic and fundamental as these are, into the realm of closer relationship and Commonwealth ties.

The fact that Canada on her own initiative had sent over this mission, made up of representative and influential Canadians headed by the Minister of Trade and Commerce and sponsored by the Canadian Government, to explore the possibility of stimulating Anglo-Canadian trade, and primarily to assist British exporters to obtain a larger share of our total imports, gave rise to sentiments of appreciation and enthusiasm which grew daily in force and vigour throughout our sojourn in England and had not reached their peak at the time of our departure.

The requests for individual interviews with members of our trade mission, which were received from large and small business firms seeking information about Canada, and which in the London area alone amounted to 1,400, were still growing in number when we left Britain.

Much of the success of our visit was undoubtedly due to the brilliant organizational work which the British authorities had undertaken so as to ensure that our three and a half weeks' visit would be as fruitful, as influential and as comfortable as possible. The Board of Trade, led by its distinguished President, Sir David Eccles, Canada House, under the able and experienced leadership of George Drew, and particularly the Dollar Exports Council, led by its imaginative and indefatigable Chairman, my old friend and colleague, Sir William Rootes, planned our visit with a degree of organizational skill, of goodwill, of generosity and of enthusiasm which might perhaps have been duplicated in other lands but which could not have been improved upon anywhere.

It was an organizational feat of the very first magnitude to plan the activities of a party of fifty-seven people travelling for nearly a month throughout England, Scotland, Wales and Ireland, visiting over one hundred different factories, holding almost daily press, radio and television conferences, gathering together at mammoth receptions, and attending daily luncheons and dinners at which there were between 125 and 750 people chosen from among the most influential and representative in the land.

The effectiveness with which it was carried out, and the precision with which the time-table was adhered to did much to establish in the minds of the members of our delegation a confidence in British efficiency and organizational ability that was heightened and broadened by the things which we saw as we progressed with our journey through Britain.

The Canadian Trade Mission had the opportunity not only of visiting a very large number of industries, both large and small, in many areas throughout the United Kingdom, but also of meeting the owners or representatives of hundreds of others and of discussing their problems with them.

We have been most favourably impressed with what we have seen and, broadly speaking, we have returned home with the feeling that British industry is showing leadership of a high order in scientific research, new technologies, and in the efficiency of its manufacturing practices.

We were impressed with the knowledge, ability and leadership of the senior personnel whom we met in the plants visited, from the foreman level upwards, with the spirit and progressiveness of top management, and particularly with the skill, artisanship and productivity of the workers. We have, I hope, laid to rest that perennial canard, so often repeated in North America, that British labour was not productive. From what we have seen, if the British worker is given similar tools to work with, his productivity is at least equal to that of the workers of Canada or the United States. I may also add that he works longer hours, the standard work week there being forty-eight hours as against forty hours on this continent.

The British manufacturer has now recovered from the gruelling experience of war and the restrictions and shortages of capital and raw materials which followed in its wake. That we are witnessing today an industrial resurgence in Britain is beyond doubt. Between 1953 and 1956, fixed investment in the manufacturing industries increased by 37% and it is interesting to note that although Britain's exports are currently seven times greater in value than before the war and double the pre-war volume, the whole pattern of her exports has been changing. The old standbys such as coal are replaced by a range of new industrial products to meet the requirements and advanced technologies of the more scientific world in which we live.

The Canadian trade delegation has satisfied itself that the United Kingdom is producing a large range of manufactured products suitable for this market and which we are presently importing from other sources, predominantly from the United States. We are confident that if we both work at the task, the United Kingdom can supply us with a much larger proportion of the products which we import.

There is obviously room for improvement. In 1956 our imports from the United States amounted to no less than $4,162,000,000, whereas those from the United Kingdom only reached a total of $485 million.

It might be well at this juncture to endeavour to clarify our thinking concerning the desirability from our national point of view of assisting the United Kingdom to obtain a larger share of our imports. I am suggesting that we should be quite clear on this because it answers a question so frequently asked, and particularly when it was first decided to send a trade mission to the United Kingdom, namely, "Why should we, the purchasers, go out of out way to help the United Kingdom sell us their goods?"

The answer has many facets, but one stands out among them all. We are endeavouring to assist the United Kingdom to obtain a larger share of our total imports because it is clearly in Canada's best interests that we should do so.

Sentiment plays no part in this policy. It is simply a matter of enlightened self-interest.

Let me hasten to deal with some of the factors which support this statement. I believe that you will agree with me that they clearly point to the desirability of closer trade relationships with the United Kingdom. I may note in passing that it was because I was convinced of this that I organized the Dollar Sterling Trade Council in 1949 with a view to implementing this closer relationship.

It was no doubt these same factors which the Right Honourable John Diefenbaker had in mind when, during his first visit to London after he became Prime Minister, he issued his stirring challenge to both our countries, calling upon us to work more closely together to ensure that Britain obtained a larger share of our total imports. It was these same factors which were the motivating force behind the Trade Mission, the most successful of its kind ever undertaken by Canada or welcomed by Great Britain.

In 1956 our imports from the United States amounted to $4,162,000,000, whereas we exported to that country only $2,879,000,000, leaving us with an adverse trade balance of staggering proportions. One of the troublesome factors about our imbalance with the United States is not only its size but the fact that is has been growing with alarming rapidity.

In 1950, when controls were removed, our imbalance was only $80 million. In 1955 it had jumped to $840 million, and in 1956 it had reached a figure of $1,283,000,000. This trade deficit is 45% greater than the United Kingdom's combined deficit with Canada and the United States.

I venture to suggest that such a situation cannot be allowed to continue.

While this is going on, the reverse situation prevails as regards our trading relationship with the United Kingdom, our second largest customer, upon whom many segments of our country depend, in particular the economy of the Western Provinces. Our purchases from Britain are so much less than our shipments to her that she is facing a trade imbalance with us. This results in her being obliged to curtail her purchases for the simple reason that she is not earning sufficient dollars to enable her to pay for more.

It is obvious therefore that it is in our country's best interests to try to bring our trade into better balance by buying more of our total imports from the United Kingdom, a policy which would ensure for us a larger export market to our traditional overseas customer.

There are those who are apprehensive lest by advocating these measures we are pursuing an anti-American policy which is not only un-neighbourly but leaves us vulnerable to retaliation. I have discussed this matter with hundreds of Americans since the Dollar Sterling Trade Council first advocated buying a larger proportion of our imports from the United Kingdom, and I never met anyone who, with the facts before him, did not agree that what we were proposing was not only in our interest, but also in the interests of the United States.

The fact is that since we are by long odds the United States' largest customer, it is essential to them that we should remain economically sound. They recognize that we cannot do so if we continue to buy goods from the United States vastly in excess of our sales to them and if, at the same time, we allow exports to the United Kingdom to decline because of its adverse trade balance with us.

Let me stress here, because there is so much damaging misunderstanding on this important subject, that this imbalance of trade between the U.S.A. and ourselves and the massive inflow of American capital which has given rise to some anxiety in certain quarters is not the result of any national policy on the part of the American Government. Other than in certain matters of tariffs and quotas which at times we deplore, the American Government carries no responsibility for what is taking place.

It cannot be emphasized too strongly that these situations are preponderantly the result of the individual choice of the citizens of the U.S.A. and Canada operating in a free economy, and where corrections are required they can only be satisfactorily applied by the voluntary action of the individuals of both nations.

This is fundamentally what our Trade Mission was all about. We recognized that our purchasing habits were becoming lopsided and we went over to the United Kingdom as free and independent individuals to see whether we could not assist in bringing a better balance into the trade relationship of our three countries, to the greater good of all concerned.

There is another segment of our population which expresses alarm lest a policy of stimulating imports from the United Kingdom be hurtful to our own producers and manufacturers. Speaking broadly, such fears are largely groundless. The objectives of the Dollar Sterling Trade Council and of the Trade Mission are not to encourage Britain to export goods to us which would be competitive with our own manufacturers, but, on the contrary, to stimulate their exporters to obtain a larger share of the goods which we import from other countries.

When one considers that our importations from the United States alone amounted in 1956 to approximately nine times those from the United Kingdom, it is obvious that there is plenty of room in which to manoeuvre without hurting our own producers. The motto of the Dollar Sterling Trade Council is "Buy Canadian if available, if not buy British, providing their goods are competitive in price, in quality and in deliveries."

To those few who claim, and perhaps with some justification, that they are actually being hurt by British imports the answer is that if it were not British imports which are hurting them, it would probably be imports from some other country. On the other hand, our prosperity, our living standards, our very Canadian way of life are dependent upon the volume of our exports, to a degree which is only comparable to the position of Great Britain herself. It would be quite unrealistic on our part to expect to continue as a great exporting nation and at the same time radically restrict imports. It could also be clearly demonstrated that the over-all benefits to our economy of a better-balanced trade and a larger and more assured outlet for our exports far outweigh any individual disadvantage which may show up here and there.

There is another reason why we Canadians should be anxious to increase our two-way trade with Britain, and that is the inadvisability, if we wish to retain our economic independence--(and I cannot think of anything which we want to do more than that)--of placing too many of our economic eggs in the same basket. With the United States supplying in 1956 73% of our imports, 69% of all the foreign capital for direct investment, and taking 59% of our exports, there is already quite a load for one basket.

There are other reasons which are perhaps less obvious to the casual observer, but nonetheless of major importance. I am referring to Canada's position as a senior member of the British Commonwealth of Nations and to the great future which lies ahead of this association of nations, the most successful experiment in living together in mutual respect, in harmony and goodwill which this troubled world has yet devised. But to be successful, to be influential, the Commonwealth must be strong economically. This can only be the case if Britain, the rallying point of this association, is economically sound and if the trading relations between her and the principal Commonwealth countries, among which Canada is the leader, are continually strengthened and developed.

I maintain, therefore, that the policies which the Dollar Sterling Trade Council are pursuing, and which have been greatly stimulated by our splendidly successful trade mission to the United Kingdom, are not only clearly in the best interests of Canada but in the best interests also of Great Britain and of the United States.

During our recent visit to Britain we gave our friends over there a great deal of advice concerning the steps which they should take to obtain a larger share of our imports, but there are many things which we also can do to encourage our fellow Canadians to co-operate in this task. We have no tools to work with other than those of persuasion and voluntary action but these are powerful tools if well handled and voluntary action on our part is far better than the alternative of import controls or higher tariffs.

And yet, if we are unable or unwilling to bring our trade into better balance by individual and voluntary action, then I greatly fear that other and less palatable methods will eventually have to be resorted to, because I do not believe that we can continue to run trade deficits with the United States on the present scale. But this would be the un-Canadian way of solving our problem, and I am hopeful that each one of us--from the largest commercial or industrial operators to the man, or woman, in the street--will discipline ourselves to buy more of those things which we are obliged to import, from United Kingdom sources.

To strengthen its endeavours and to follow up and capitalize upon the interest generated by the Canadian Trade Mission, the Dollar Sterling Trade Council, whose name, if acceptable to the present Council, will be changed to Canada-U.K. Trade Council, will be broadened and strengthened. Members of the Trade Mission, chosen for their geographic location and their broad representation of the economic life of this country, will join its Board, bringing with them the added strength of their experience, their enthusiasm and their determination to assist Britain in obtaining a larger share of our total imports.

In closing, let me say that we have every confidence that with these measures and the intelligent understanding and co-operation of the Canadian people, we are entering a period of greater activity in the trade relations between our two countries. By promoting a greater diversity in our trade pattern, we will be taking an important step not only towards ensuring our economic stability but towards the reversal of a tendency, which, if not corrected, will undoubtedly become a hazard to our economic independence--and no Canadian worthy of his great inheritance would want to see this happen.

THANKS OF THE MEETING were expressed by Mr. Henry E. Langford, President of The Canadian Club.