Is the Declaration of Washington an Answer to the Russian World Economic Challenge

DR. GOLDRING: If one were to make a list of the hazardous occupations in Canada, probably that of professional politician would hold a high place in such a list. When we meet a man who has been a member of a Provincial Legislature or the House of Commons continuously for almost twenty years, we can be sure that he must possess considerable political wisdom, acumen, and unique personal qualities. Especially is this true when we realize that Her Majesty's official Opposition at Ottawa, of which Mr. Diefenbaker is a Saskatchewan representative, holds only nine seats in the House of Commons for the four provinces west of Ontario.

Mr. Diefenbaker was Leader of the Conservative Party in Saskatchewan from October 1937 to 1940, when he was elected to the House of Commons. He has continued to retain a seat in Parliament since that time. He has attained a high place in the Progressive Conservative Party and has been particularly active in leading and advising delegations from the House of Commons to the United Nations. He was a member of the Canadian delegation of Members of Parliament to the Parliamentary Confer ence in Bermuda in 1946, and to another similar conference in New Zealand and Australia in November, 1950. Mr. Diefenbaker was born in Ontario but went to Saskatchewan when quite young. He was educated at Saskatchewan University, being awarded M.A. and L.L.B. degrees. He also holds an honorary L.L.D. from McMaster University. He is a member of the Saskatchewan, Alberta, and British Columbia Bars. He served overseas in the First World War as a Lieutenant.

The Empire Club of Canada has had the privilege of hearing Mr. Diefenbaker in the past and we welcome him again to our meeting today. The title of his address is: "Is the Declaration of Washington an Answer to the Russian World Economic Challenge?"

MR. DIEFENBAKER: "The Spirit of Geneva" has been dissipated in recent months. At the Conference of Prime Ministers it became apparent that the U.S.S.R. did not intend to settle the problem of the re-unification of Germany or to reduce the possibility of atomic war by agreeing to inspection by the free world, or to aid in the solution of the Formosa problem. The outrageous allegations made by Krushchev and Bulganin in India and elsewhere in Asia, regarding Britain, the supply of arms to Egypt, the enticement of peoples in Asia and in Africa by subversion and economic infiltration, are but a few of recent events that have caused the hopeful free world to become disillusioned. The threats to destroy NATO and the ultimatum that there could be no united Germany except on Soviet terms removed the false veneer from the Spirit of Geneva. The two messages delivered to President Eisenhower during recent days by which the U.S.S.R. intended to impede the success of the Washington Conference were met by two or three thousand well-chosen words by the President, wherein he pointed out that "A stroke of the pen" cannot achieve peace, that a "change of spirit" is necessary and that "deeds' not words" are the implements of International honour and peace. "The spirit of Geneva" ended almost before it was born. It achieved one purpose, however; it postponed the possibility of an early war, for the leaders of the U.S.S.R. learned that a global atomic war would destroy both victor and vanquished. The U.S.S.R. has changed its tactics but not its purposes. It has adopted spectacularly novel means. The Cold War is to be supplanted by hot economic competition. The immediate use of weapons of War has been postponed in favour of an economic offensive everywhere in the world. The stalemate brought about by atomic weapons has produced a change in the world offensive. It seeks through the stomach of man, as a means to subvert their hearts. On the 28th of January, an official U.S.S.R. publication summed up the plan of the Soviet in these words - "Confident in their Military Forces and inspired by the great victories scored in the building of Socialism ... we are confidently implementing a peaceful constructive policy."

The Communists have launched a new Five Year Plan. Its policy is more enterprising and flexible than ever prevailed under Stalin. The Russians now use soft words and hard enterprises. Their master-plan includes an economic onslaught by themselves with Poland, Czechoslovakia, East Germany, Hungary, Rumania and Bulgaria. By economic planning the U.S.S.R. intends to increase its steel production until it will be 55 percent of the present United States' steel production; its crude oil and electric power is to be increased by almost 100 per cent; its coal production by 50 percent; its agricultural production by 50 per cent. It will redistribute its industries from a concentration in the Moscow and Leningrad areas to the Volga Valley and to Siberia. Three of the Russian Republics in the TransCaucasus will be supplied from great power stations on the Volga. Under the Plan, industries in Siberia will be free from the vulnerability of attack and will be so strategically placed as to constitute virtual monopolistic supply bases for the needs of Red China. The U.S.S.R. is planning for the development of the largest nuclear industry in the world and for gas and oil pipe lines to supply the lines of communication. The Five Year Plan is based on a desire "To destroy Capitalism," and to "win the world without War" as Molotov stated recently. To use his words, "We should like the changeover to Communism in the world to be as painless as possible." The U.S.S.R. plans in the face of the atomic stalemate to make trade an instrument of idealogical policy. The U.S.S.R. plans to barter agricultural products with Nations in need and without regard to value received. It plans to grant certain economic aid and to give still greater and fabulous promises of aid to underdeveloped countries in an attempt to blackmail the free world to do the same. The challenge to the economies of free nations by this policy will be profound in its implications. The costs of production in the U.S.S.R. are minimal, for the State will pay serf-like wages, and can arbitrarily take from the farmer his products at its own terms.

The Russians have launched their policy of buying and selling regardless of economic value; Cotton from Egypt, rice from Burma, are but two examples of purchases of surpluses which the Russians are engaged in to win friends and influence peoples. The Soviet Republic has launched a politico-economic offensive, whereby countries will be tempted by promises of capital goods of all kinds, heavy machinery, oil, steel, cement and other products. The U.S.S.R. has adopted the "Loss Leader" program for propaganda purposes. Its aim is to export its influence by subsidized trade within the framework of modernised diplomacy. The U.S.S.R. intends to extend its foreign trade regardless of competition, believing that with low prices or barter, the undeveloped countries of the world will prefer to trade with the U.S.S.R. than to accept aid from the Free Nations, now that the danger of the outbreak of a world war has been lifted.

The will of the free world will be tested as never before. The Soviets have become international travelling salesmen who combine the disposal of goods, wares and merchandise, with political propaganda. The "New Look" of the U.S.S.R. consists of a most subtle international offensive of ultra-modern publicised and organized international salesmanship, in which the major profit return expected will be measured not by balance sheets in roubles, but by the dividend of subverted peoples who will ultimately exchange their freedom for the economic advantages of the present.

In this economic War the U.S.S.R. is endeavouring to enter into trade arrangements with Latin-America. Even Red China is sending goodwill missions to Egypt, Saudi-Arabia, Liberia, Afghanistan and Ethiopia, while at the same time Russia is stirring up trouble in the Middle East, in the Far East and its Red Twin has recently threatened Formosa with subjugation "By War if necessary".

The new policy is a definite challenge to Britain, for it is vital to Britain's survival to have the oil of the Middle East, rubber from Malaya and Ceylon, and that her overseas trade shall be maintained in the face of diminishing dollar reserves.

Britain's need for trade in the Far East is apparent when it is realized that 35 per cent of her income in non-sterling currencies is produced in those areas, and in Malaya 16 per cent of her dollar income is from sales of tin and rubber.

It was under these circumstances that Sir Anthony Eden and President Eisenhower met and enunciated the "Declaration of Washington." As I listened to Sir Anthony Eden address Parliament on Monday last, my mind turned in retrospect to 1943. That was less than two years after the Atlantic Charter agreed to at a time when Hitler and Mussolini and the Japanese were the world challenge to freedom. The Atlantic Charter provided that after the War all people could choose their own forms of government, that all nations would have equal access to raw materials, and that everywhere in the world men would be assured of freedom from fear and war and that all Nations would forego the use of force in the settlement of international disputes. Mr. Mackenzie King in introducing Mr. Eden in 1943 spoke of the new world of peace to be built from the shambles of war on the character of the men who were shaping a new order. The moving finger writes: Who would have thought in 1943 when Mr. Eden last addressed Parliament that in 13 years the U.S.S.R. would be the potential enemy of freedom everywhere in the world. I need hardly add that for anyone then to have suggested the re-arming of Italy, Germany or Japan after the War was concluded would have been regarded as insanity or treason or both.

The Declaration of Washington is a masterpiece declaratory of the aims and purposes and idealism of the free nations. It declares in effect that the Free Nations do not intend to lose the War of ideas. It reiterates the concept of freedom that the State exists for the individual. These truths and aims of democracy need to be repeated over and over again. It embodies the views expressed by the British Prime Minister before the United States Senate, "It is our faith that the confidence which self-government breeds is the best antidote in the world of Communism." It lays down as the major aspiration of British American policy the desire for peace. It reveals the determination to stabilize conditions in the Middle East, and to act to prevent an outbreak of War there. It gives assurance to the people of Berlin that any attack will be regarded by both Britain and the United States as an attack on them. It reaffirms the need of re-unification of Germany in freedom, it reveals that it means to guide the new nations of the Middle East, Africa and South East Asia in the free world as democracies. It gives continued support to NATO and the Baghdad Pact. It emphasizes need of economic-aid plans, such as the Colombo plan, "in developing the resources and well-being of all participating countries." It foresees the serious situation of the State of Israel which was created out of the genius of British statesmanship, having had its first recognition in the Balfour Declaration of 1917. It has been said, and is so true, that "The Middle East is as vital to world peace as the heart is to the body." I believe that Israel must be maintained in its integrity, and because I believe that Israel cannot defend herself with arms, however many, what is needed is that guarantees be given by the Tri-partite Treaty Powers of 1950 and all free nations. To that end, I believe that a police force should be set up to protect the Armistice boundaries until final peace has been obtained. It does not make sense to me for any of the Free Nations outside the Tri-partite Treaty to supply aircraft to the Arab and anti-aircraft equipment to the Israelis.

Finally in the face of the world economic challenge of the U.S.S.R. preliminary plans to meet that challenge were considered, although apparently not finalized.

What are some things that can be done to meet the new policies of the U.S.S.R.?

(1) Believing as I do that Britain and the Commonwealth and the United States are the bedrock upon which freedom will survive, much remains to be done to strengthen and expand Commonwealth trade relations. The Commonwealth is in constant process of change and stagnation may well mean disintegration. At this very moment a new Nation is being born within the Commonwealth in the Conference which is taking place among the various West Indies Colonies. Will not the growing and expanding process of the Commonwealth continue and in time come to include nations like Belgium, Holland, Sweden, Norway, Denmark, Greece and Germany, as well as France, which in the darkest days of war was invited by Churchill to become a part of this great family of Nations?
(2) Such a Commonwealth may only be a dream. In the meantime, the NATO Nations should give greater attention to Article 2 of the NATO Agreement and in the interests of economic survival against the economic challenge of the U.S.S.R. should join in multi-lateral trade and remove many of the existing tariffs that are unjust and unjustifiable, having regard to the world in which we live. By doing so, the Free World would assure that the free nations will be able to take their stand against the economic "new look" of the U.S.S.R., the purpose of which is to achieve what military strength and power has not been able to achieve.
(3) Canada and all the free world must continue to maintain the utmost military strength for it must not be forgotten that the U.S.S.R. has advanced so far along the line of directed missiles that they can now be despatched at a distance of 1500 miles. Scientists agree that within the next five years it will be possible that these missiles may have a range of 5,000 miles and carrying an atomic war head can destroy any city on earth.
(4) I believe the Free World should launch a world move to assist in raising economic standards everywhere in the world. Sir Anthony Eden has put it this way, that the free nations must "Raise the standards of living and provide economic help and confidence for peoples in under-privileged countries." For years, some Canadians have contended that our contributions have been too small in this regard and many have felt that that view was not a realistic one. Whatever may have been said in the past, the economic new look requires that more be done in this direction than ever before.
(5) Industry and labour have a greater responsibility than ever in this new phase of Russian economic warfare, and that is to assure that the Free Nations will mobilize their productive strength to the utmost and maintain costs at competitive levels so as to meet the competition of the Communist world.