The Imperial Economic Conference

LEIUT.-COLONEL GEORGE A. DREW, President, introduced the speaker, who was cheered on rising.

HON. MR. FERGUSON: I assure you that I appreciate very greatly the warmth of your reception here today. Had. 1 the time, I should like to tell you how constantly the thoughts of my wife and myself turn toward Canada, and particularly toward Ontario where we spent so many active and happy years, and how constantly we treasure the many friendships we formed and which we will cherish, all the days of our lives. But that is not for me to discuss today.

You will recall, as your President has said, that, the chief purpose in my going to. the Old Country as High Commissioner for Canada was in the hope that 1 might be able to interpret to the British people, to the advantage of the Empire, Canadian spirit and Canadian ambitions, and at the same time, perhaps, contribute in a small way towards promoting the economic interests of the Empire as a whole, bringing about closer co-operation amongst the various sections of it.

During my abandonment of party politics 1 must be careful that I do not trespass on forbidden ground, so I cannot discuss questions of policy with you today. There are many things I should like to say. (Laughter.) These matters of policy and the settlement of economic problems are matters for governments when the conference gets together.

I thought that I might tell you something of the impressions I have gained during my sojourn in Great Britain, and of the opportunities I have had of observing closely the British people, the British outlook and the British attitude toward the Dominions. You know we have always shared the view-at least I had and I think most of you have-that in merchandising the

Englishman is a sort of stupid fellow, and we are always complaining when he comes here to sell goods that he doesn't sell or bring us what we want to buy or in the form in which we

want to purchase, and there is a good deal of ground for that complaint. One must remember that for centuries they have pursued one method of operation, and, one might say, almost

one type of product. But I have learned since I went to England that we are just as bad in that respect as the Englishman.

We are sending goods of all kinds, products of this country, to England, expecting the British people to clamour for them, and we don't serve them up in the form they want them.

The three great defects in connection with our trade with Great Britain, and which have been existent for some time are, as I have said, the lack of appreciation of the consumer's taste and his desire to have the article given to him in the form in which he wants it. The second is a complete want of standardization of quality of products. New Zealand, South Africa, Australia--and California, if you will-almost every country shipping goods to England, except Canada, has a standard and a brand that spells quality, and we lack in that respect. Then, the third, and, I think, perhaps the most lamentable weakness of the whole situation is our lack of continuity of supply, not marketing our products over and over and over again.

It has come to me through our Trade Commissionersfor we have a half dozen or more very bright, active, young Canadians furthering British trade all over the British Isles-that when they promote some particular product of importance to us, perhaps the purchaser is able to buy at once and cannot get the product again for months. Nobody can undertake to say that we can continue to supply these goods. Perhaps that could be cured. I have ventured to suggest that some authority should be taken at Ottawa to regulate in some orderly way the forwarding of our goods to the market in the British Isles.

We can remove those difficulties. We have today all the desire and the goodwill and the anxiety of the British people to buy Empire Goods. When they had their Empire Shopping Week a few months ago it was: "Buy Empire Goods from Home and Overseas", and that spirit prevails today in Great Britain as it never has before. 1 venture to say that those of you who have occasion to visit the Old Land periodically over a number of years will be much impressed with the complete change of British sentiment toward closer co-operation with the Dominion-% the new outlook on the Empire's future that has taken place there within the past very few years and particularly within the past year or two. So, we have everything to hope for and we should be inspired with confidence when we get together and discuss in a frank, friendly, broad spirit the problems that have to be dealt with. We should be able to reach conclusions that will he of great value to us as well as to the Empire as a whole.

I think, perhaps, the evidence of the present attitude of the British Empire towards economic unity, towards closer cooperation between the various Dominions and the Motherland, is to he found in her policy, her attitude in legislation and administration during the past six months. You will recall that when she was being flooded with imports, in their wisdom the government decided that they would apply abnormal import legislation to prevent dumping in England or any part of Great Britain, and that legislation was passed and regulations to this effect were applied. But it was provided that they should not apply to any of the Dominions---that the Dominions are at liberty to dump-if they will, they may--all the goods they want into Great Britain, while they said to foreign countries: "You are restrained in the amount of imports we are going to take from you."

That is a remarkable step, indicating in a practical way the desire of the government and the British people, because that sentiment today is almost universal from end to end of the British Isles.

And then, a more remarkable thing: when they applied the ten per cent. tariff it was announced that it was a revenue tariff. They were seeking by every effort to accomplish the vital object of balancing their budget, and since they must have revenue, they applied, for the first time in almost a hundred years, a tariff of ten per cent. on an imports that were brought into Britain. But they said, "This shall not apply to the Dominions until we have a chance to sit down and talk it over."

And so you will find in their legislation that until the Conference takes place and a genuine effort is made to reach a conclusion that will be satisfactory, there will be no import duties applied against any of the Dominions or Protectorates of the British Isles. What greater evidence could one want that the Old Mother Country is seeking to gather about her the members of the family in closer unity than ever before? And day after day, Gentlemen, foreign countries are sending envoys and plenipotentiaries and delegates to the British Government, seeking to effect some trade arrangement, seeking to arrive at some commercial agreement which perhaps, will he of advantage to Great Britain. But what has been the answer of the British Government? "Until we have had a family conference amongst ourselves and have decided what is best for the Empire and ourselves, we don't intend to discuss any trade relations with any foreign country!'

When one lives in an atmosphere like that, as 1 have been doing for the past twelve or fourteen months, is it any wonder one's admiration and confidence in the character and devotion of the British people is increased a thousand fold to what it was?

Some people in England say that they regard this conference as not only of great importance but as vital. You have read the speeches of Mr. Baldwin, President of the Council, who says that the Empire has come to the crossroads. One road leads to Empire unity, consolidation, and expansion, and the other leads to disintegration and ruin.

Mr. Chamberlain, Chancellor of the Exchequer, has said more than once that the Conference will mark the beginning of a new era in the history and development and influence of the British Empire.

And so you read the statements of all the leading men, the men who control public affairs and direct public opinion, and you find there is the one note of confidence, the one note of optimism, the one note sounded in favour of extending, if you will, the boundaries of the British Isles to take in her outlying possessions and her Dominions. That is the way they regard this conference. They hope to see a unification in which we will move forward in world history, marching shoulder to shoulder with a single purpose and that, I believe, will be the outcome of the Conference that is to he held here in Canada next July. (Applause.)

They go so far-many outstanding men in Great Britain-as to discuss openly the question of an Empire currency. I am not an economist--I am not even a financial expert--despite what some people say (Laughter.)--but I do know that there is a frequently expressed feeling among men in important positions, men whose views and opinions are highly regarded, that something should be done to fix a special relation between the dollar and the pound. For example---to make my meaning clear to those listening outside-if the pound is fixed again, I am quite sure from what I have heard that it will never be fixed at $4.86. It will probably be at $4.00. So it won't matter whether you deal in pounds in Australia or in dollars in Canada there will be a parity of value.

Whether this is possible or not I can't say. If I had my friend Sir Joseph Flavelle or Sir Thomas White in the corner for a while, they would tell me. But I do know that there is in evidence on the part of the people of Great Britain a desire to make it possible and easier to trade with ourselves and develop the various sections of our Empire.

Another thing that has impressed me very greatly is the fact that the British people today, and the British industrialists and business men generally, recognize that the Dominions are entitled to develop their own secondary industries. The day when we were looked upon as colonies from which they drew natural wealth and raw material to fabricate within their own island has passed. They recognize with great seriousness that they will never build a great Empire unless they give all the same chance and that Canada, Australia and other Dominions are entitled to and should be encouraged in the building up of strong industries all over the country.

There has been a remarkable change in that respect, and when we get together, having common ideas on these broad plains, I can't for the life of me see why we should not make very definite advances toward the objective we all have in mind.

But I should like to say this today: Don't let us expect too much at this Conference. Think of the enormous extent of the problem and the variety of its factors. It is utterly unthinkable that you can sit down in six or eight weeks and frame a tariff or reciprocal relationship that is going to cover every item handled by all these various Dominions and the British Isles herself. It can't be done. If you start to do that sort of thing you might better never have a Conference. It is sure to break down. 1 think from what 1 gather from my discussions with people over there, they hope they will lay down some broad fundamental principles, and that we may be able to deal with certain important items.

You know that eighty-five per cent. of our trade is made up of about fifteen items, and if we can deal with many of those we can lay the fundamentals upon which we can build as time goes on. Because this is only the first Conference of this kind-this is only the first that is going to succeed, and we must go on periodically holding these Imperial Conferences if we expect in, the end to get the maximum of success and advantage out of trade relations within the Empire. So I say, don't be disappointed if your factory doesn't get some stimulus out of it, or if your particular business doesn't improve immediately. Let us clear the way, lay down fundamental principles, and then build from that on.

I think, from my discussions with Australian people, with New Zealanders, with those of South Africa and. even with our Irish friends, with whom I manage to maintain friendly relations, 1 think we are all of one mind in that respect. And we are not expecting to accomplish everything at one sitting.

I have some notions of my own--(I thought 1 heard Sir Joseph Flavelle whisper: 'You usually have!') (Laughter.) But I really believe this: If we will approach this problem not upon the exclusive principle, if I may put it that way, do not let us begin with our chief aim that we want to exclude people from trading with us, even if they are foreigners. We have to maintain foreign contacts and credits. we have to have international relationships. But let us look at the problem from the other angle-the inclusive principle. Gather in all we can of our own people. All can establish exchanges of advantage to the whole. If it were possible for each Dominion to hang on the wall an economic map showing its exports and imports, and if by studying these maps we find we are importing a product from somewhere which we might import from Australia with advantage, or from Great Britain, let us see if we can't shift that trade. In other words, let us readjust our channels of trade as far as it is economically possible to do it within the Empire.

If we start out with that principle in mind, I am quite sure, from talks I have had with people who know infinitely more about these subjects than I do, that we would achieve a very great deal. (Applause.)

Another thing that spells success, as I see it, is the strength and personnel of the delegates who are coining to Canada. I doubt-at any rate it is not within my knowledge-if there has ever attended any Conference a delegation consisting of such a number of outstanding public figures as are going to attend this Conference. When you get Mr. Baldwin, former leader of a Government, their former Chancellor of the Exchequer, leading business men in Great Britain-Mr. Thomas, whom we all know in Canada-and Mr. Runciman, President of the Board of Trade, a recent convert from free trade, (who said in the House of Commons that he hadn't given up his free trade principles-he had them as strong as ever-but the difficulty was that in the present economic situation of the world they didn't apply anywhere)Mr. Runciman is coming. He is an exceedingly able man. The Chancellor of the Exchequer, the outstanding Imperial figure in England, Mr. Neville Chamberlain is coming. Also, Sir Phillip-Culiffe Lister, a very able man who was formerly President of the Board of Trade, an office which, as you know, is analagous to our Ministry of Trade and Commerce. In addition, one of the broadest minded men in the British Isles will attend the Conference-Lord Hailsham, formerly Sir Douglas Hog& There will be very few left in England-except the office boy. (Laughter.) That is an indication of the importance and the seriousness with which they regard this meeting. They look upon it not only as a conference, but as the initial conference out of which results are going to come, and they want the world at large to be impressed with the idea that not only the outlying sections of the Empire but the old Mother Country herself, regards it as one of the most important features in her whole history, her whole national life. (Applause.)

You know they are funny people over there. But they are the most remarkable people in the world. They have a character that is to he found nowhere else that I know of. Last summer the Chancellor announced that a huge deficit seemed inevitable in the Budget. You recall that they borrowed eighty million pounds to try and save the pound from being knocked off its perch-the gold standard. Confidence in English and British stability began to wane, and it ran to the extent of almost a panic and foreign countries all over the world having monies and investments in Great Britain began to withdraw them and goldnot only her own but the gold she had borrowedwas disappearing so rapidly that they had to abandon the gold standard because they were paying for the goods they were buying in gold, and for what they were selling they were getting dogs and cats or anything else in the shape. of depreciated currency. They went off the gold standard.

Since that a very marked change has taken place in conditions. The present Chancellor, some time in November, I think it was, or in the first Dart of December, announced that if before a certain date he could collect seventy-five per cent. of the income taxes, he would be able to balance the national budget. I was going down the Strand one day, looking down Somerset Lane. I saw a queue of a hundred, perhaps two hundred, people. I knew there was no Labour Exchange or Dole Office down there, so I asked somebody what it was. It was the Income Tax Office with the queue of people waiting to pay their income taxes. They had sold their watches, their jewels, and had borrowed money to save the Empire. That is the spirit be-hind it all! They got no discount for doing it. And within the period suggested by Mr. Chamberlain, he got not only his seventy-five per cent.--he got eightytwo per cent. And then they issued a cheque quietly one day and sent it to the United States and said: "There is all we owe you for some time. It is true it is not due for four months yet, but we have the money and you may as well have it if you need it."

That is a most remarkable performance and the spirit behind it all is devotion to the national institutions and to the Sovereign. (Loud applause.)

Then money began to come back. Everybody wanted to deposit in England. Every foreign dollar taken out was put in again until the bank rate was cut in three or four months from seven per cent. to three and a half. They have so much money they don't know what to do with it. Things have readjusted themselves so rapidly that confidence all over the world has been reestablished in Great Britain, and Great Britain, Gentlemen, will he the first country to come back to normal conditions in all the world, and it is due to the genius, the courage and the character of British citizens. I tell you it makes me proud, and it should make every one of us proud, of the fact that we are entitled to call ourselves British subjects and live under the aegis of the British Flag.

(Cheers.) Taxation! Taxation all over the world is burdensome. Revenues have fallen away; buying power has diminished and governments, municipalities and businesses are not earning what they formerly did. The money to operate public services must be obtained some way, and there is no other way except through taxation. That is a world wide situation. But compare our taxesthere may not be much consolation in this, but it sometimes helps me---compare our taxes with those in our Mother Land, where they are cutting up estates and selling portions of their land to pay taxes. There, if you are an unmarried man and earning over $600 a year, they take twenty-five per cent., and if you are married and earning over $750. they take twenty-five per cent., and as it goes up you pay super taxes.

The taxes are enormous. An English friend of mine told me the other day that his wife had an income of eleven hundred pounds from some property which she owned and by the time she got through paying income taxes and super taxes and local rates and insurance, she had the neat sum of two hundred and forty-two pounds out of eleven hundred pounds. That is, perhaps, an extreme case, but it is typical of the situation. And the remarkable feature of it is that in Great Britain they always just go jogging along, saying the sun is just below the horizon; we are going to get through. And everybody is cooperating in England, not with any party spirit or desire for advantage, one over the other, but with a determination that England is going to maintain her position in the world, and if we get more of that spirit abroad throughout the Empire, by joining hands with a single purpose and with great ideals, believing as we do, that British supremacy and leadership is best for the world; that her security and the security she guarantees to everyone is the ideal condition under which her people live; if we believe in these principles, we as Canadians, aye, those all over this Empire, can't help but thrill with the thought that we have the opportunity coming to us next summer of sitting down together-generously--not with any selfish bargaining spirit,--but with a desire to build up, we can strengthen and better the greatest force for good the world has ever known. (Loud cheers.)