The International Situation

The Empire Club of Canada commences its season each year on the first Thursday in October. However, on rare occasions the Club holds a special meeting, but only when a person of prominence visits Toronto and this is one of those occasions. The Empire Club always warmly welcomes visitors from the Mother Country but on this occasion, and as a matter of fact throughout the week, in co-operation with the weatherman, have rather over-done our welcome.

Our Guest of Honour today, Joseph Montague Kenworthy, Tenth Baron Strabolgi is Chief Labour Whip in The House of Lords and served for eighteen years as a Lt.-Commander in The Royal Navy 1902-1920, being a Member of The Admiralty War Staff in 1917.

He is Vice-President of The Air League of The British Empire, active in The Navy League and also Chairman of The English Speaking Union.

Lord Strabolgi is a well known writer on current affairs and is the author of many books, some of which are: "Peace or War"--"Freedom of the Seas" (in collaboration with Sir George Young)--"India: A Warning"--"Our Daily Pay-The Economics of Plenty" "Sailors, Statesmen and Others", an Autobiography "The Real Navy".

Books on the war: "The Battle of the River Plate"--"Narvik and After"--"The Campaign in the Low Countries"--"From Gibraltar to Suez", a study of the Italian Campaign--"Singapore and After"--"Sea Power in the Second World War".

Our Guest is a director of several British companies, his primary interest being iron, steel, rubber and the import and export trade.

I have just read a very interesting historical account of the ancestors of Our Guest of Honour and find that over six hundred years ago, John of Strabolgi was executed in England when his honours and estates were forfeited to the English Crown but were restored to David of Strabolgi, The First Lord, by Edward The Confessor. My Lord, we sincerely trust that the present Labour Government in England will deal more leniently with you.

We also welcome as our Guests today members of The Board of Trade of The City of Toronto and I can assure you, My Lord, that everyone in this auditorium is tremendously interested in the subject which you have chosen: "The International Situation".

LORD STRABOLGI: Mr. President and Gentlemen: This is a new form of loudspeaker, and if it isn't functioning, please let me know, that I may discard it and do without it. I used to be able to speak as a sailor and I think I still can make my voice heard.

I am very gratified to see such a large gathering on such an auspicious occasion and under extraordinary circumstances, and I think this is not a compliment to me at all, but to the British Parliament which I claim to represent at this present time in the Province of Ontario.

I also want to say at once that in Britain we have the most deep feelings of gratitude to Canada, not only for what the Canadian Forces and the Canadian people did toward winning the victory of the recent war, but for the very generous help you gave us when we were in difficulties following the end of hostilities. We have a tremendous admiration for Canada and the Canadian people in Britain, and we were all very sorry when the Canadian troops who had been soy popular left our shores. When I say "all", Mr. President, there was one exception: the gamekeepers were glad.

I received the welcome invitation to address this important body when I was in Newfoundland some weeks ago and I was asked to name my subject. Well, this being a rapidly changing world, I hoped I would be on the safe side when I chose "International Affairs". That covers a multitude of subjects and a multitude of sins, and it didn't matter how the situation developed I thought I might be able to say something of interest and value to you.

Now, perhaps I could best begin by a word about the foreign policy of the present government in Britain which in the broad outlines is supported by the other two principal parties in Britain the Conservatives and the Liberals.

Our own foreign policy is based on the development and strengthening of the United Nations. We believe that the United Nations Organization is absolutely necessary in the present state of the world, and it is the only hope and salvation for Humanity, and the only means of preventing another and final catastrophe of a world wide war. We have faith in Britain and we believe that despite difficulties and complications, that the United Nations Organization can be made to function and that it can be a great safeguard for the liberties and prosperity of the peoples of the world, and we are encouraged in this belief by our experiences with the British Commonwealth of Nations. That has been a working model of collective security and of the same principles which we hope to develop in the United Nations Organization.

In the two terrible World Wars, in fact three wars which I have lived through, the British Commonwealth has stayed united without hesitation. All the great Dominions came into both the World Wars, although neither were their particular quarrel, and there are many-people, historians and others, who have been in touch with affairs, who believe that if the Kaiser in 1914 and if Hitler in the years immediately preceding 1939, had known that Britain and all her fellow members of the Commonwealth would immediately come into any war that they precipitated, the belief is that neither would have plunged the world into such devastation.

Now, in connection with the development of international organizations, of which the United Nations Organization is the main one, I myself supported in Parliament the acceptance of the American Loan eighteen months ago, although I agreed, and still agree with many of the arguments used against it in the House of Lords by two eminent Canadians, the late Viscount Bennett, and my volatile and vigorous friend, Lord Beaverbrook. I think the arguments were perfectly sound. But if we had rejected the loan because of its admittedly onerous terms, it would have given a setback to the whole conception of international cooperation in the economic field, and I stress those two last words-the economic field. You can have perfectly correct and friendly political relations throughout the world between the leading nations, but unless you also have economic cooperation and friendliness, then it is difficult to see how the world could recover from the present difficulties resulting from these two terrible wars, and how we can develop the vast unused resources of the globe for the benefit of all people.

Now, one of the most remarkable developments in my lifetime, Mr. President, has been the increasing importance of economic considerations, rather than political considerations in international affairs. For example, at the present moment, my colleague, Mr. Ernest Bevin, the Foreign Secretary, would far rather have twenty million tons of coal for export than twenty Divisions of British troops. He could do far more with twenty million tons of coal today in the diplomatic field than any pressure that the existence of stronger forces might make available for him.

Another example, or consideration: I believe when the history of these times comes to be written that the historians will lay very great emphasis or stress on a remarkable series of events which has led up to the granting of complete sovereign independence and freedom to the former Empire of India. This is a tremendous event which will have vast repercussions throughout Asia and indeed throughout the world. But it can only be brought about by a surrender by the Hindus and the British to the Moslem demands in India for the separate Dominion of Pakistan and that consent was only given with the greatest reluctance by both the Hindus and the British. Not so much on political grounds, but on economic grounds, India needs a great development through the harnessing of the mighty rivers of India for the purpose of generating electricity and providing cheap power and heat for the whole Indian sub-Continent.

That is the line on which the great developments that are required in India to raise the standard of living of the teeming millions of people must proceed, and this partition of India which the well wishers of India hope is only temporary, will make it more difficult to achieve those vast schemes of electrification and irrigation which India needs. And there you have a clear example of political considerations: the nationalism and the desire for self-determination, if you like, of the Moslems of India cutting across the economic needs of the whole country.

Again, there is a tendency, a hopeful tendency in the world today for larger economic units, larger areas of free trade. One example which at once springs to the mind is the present state of affairs in Germany which is, frankly, appalling. There you have four separate zones in Germany. Only recently have the British and American zones been merged for purposes of trade and commerce, but there is the greatest difficulty in getting commerce restarted in Germany through the eastern and Russian zone, and the other three zones, and it is obvious that the recovery of Germany will depend on a return to the economic unity of Germany. Europe can never recover while there is a sick nation in Europe, as in the case of Germany, with eighty million people and great need for German industry and German coal and other materials.

But then on the other hand you have the French objections, which are understandable, to any unification of Germany on the economic plan without adequate safeguards of the French who, after all, have been invaded three times by the Germans in the lifetime of men now living in this City of Toronto. I don't think either the President or I were born at the Franco-Prussian War, but there are citizens who were alive then. Three times the French invaded from across the line, and naturally they are nervous of a restored economy in Germany, a strong industrial economy in Germany once more threatening the peace of Europe.

The answer we make in Britain to our French friends, for whom we have the greatest friendliness and sympathy, is once more we must strengthen and support the whole conception of the United Nations Organization, so the principle of collective security can be applied to the retaining of the peace in Europe and the prevention of any mischief-making by any future German Hitler or any high military caste in Germany. We believe in London that can be done. We believe it is possible to encourage the economic restoration of Germany which is very necessary from the broader point of view, because it is costing us an enormous amount to keep Germany alive and to send food which we need ourselves, as you know. We believe that can be done while at the same time seeing that there is no nonsense in Germany about rearmament or no future threat of aggression from Germany against her peaceful neighbours.

In case it may be thought that we in London are too optimistic about the future of the United Nations Organization, in view of the failure of the League of Nations, may I point out that the prospects are much better this time. When we tried to get the League of Nations functioning and strengthened, the United States was out and isolationism was strong in the United States. Now, the United States is in, and the seat of the United Nations is in the State of New York.

Again, the Russians were out last time from the League of Nations. Well, now the Russians are in the United Nations Organization. And while occasionally there may be friction and trouble with the Russian representatives on the Security Council, still it is a lot better to have them in than out. And all men are, after all, human, and will one day give way to others, and who knows but we may get Russian delegates on the Security Security Council and the Assembly of the United Nations Council and the Assembly of the United Nations who are not quite so difficult in certain directions.

Anyway, it is better to have them in than have them out.

Well, those are the great assets for the United Nations Organization. There is also, we believe in Britain the underlying feeling of the great masses of the people, the ordinary, decent, hard-working, industrious peoples of the world, that at all costs another war must be avoided, and you have that pressure from below on the government, and we hope and believe that that pressure will become more and more effective.

According to Mr. Ernest Bevin, our Foreign Secretary, in his last pronouncement on this subject, he sees no possibility whatever of another great world war for a generation.

Well, I find myself in complete accordance with Mr. Bevin. I don't see any possibility either of a war for a generation, and as I used to say to my American friends in the United States when I was there, there is only one great nation in a position to make a war, only one great nation that could mobilize today, and that is the United States of America. Therefore, if there is to be a war it would have to be made by the United States of America itself.

The moment you say that in the United States, they say, "Good Gracious, we are not going to make war. It is the last thing the people of the United States would ever do". And I believe them. They are fundamentally pacifists in the United States. The ordinary American hates the idea of war. You know, it wasn't easy to get him to come into either of the World Wars. I don't say that in any disparaging sense at all. The fundamental feeling of the people of the United States, and especially in the great inland districts of the United States, the fundamental feeling is anti-war and pacifist.

Now, I can speak for my own country. We haven't got the means to make war at the present time. There is no use deluding them and we certainly have no desire to. I don't expect there will be any demand for a fresh war from the Commonwealth of Canada, and certainly not from any of the other British sister nations. I dare not use the word "Dominion" any more. I understand it has been replaced, and my friend, Lord Henderson, is no longer Secretary of State for the Dominions, but he is Secretary of State for the Commonwealth.

As for the Russians, those people who have been there assure me that you have to visit the western areas of Russia to realize the tremendous devastation, scientifically organized and brought about by the Germans, all the way from about sixty miles west of Moscow to the old Polish border, the whole of the country has been scientifically and ruthlessly devastated and the Russian economy has had a setback of great magnitude which will take at least fifteen or twenty years to make good, and they are in no fit state to go to war. Therefore, I think there is good foundation for Mr. Bevin's belief, and I see that the Secretary General of the United Nations Organization has recently expressed himself in much the same terms.

Well, now we come to the implications of what is known as the Marshall Plan, and is that going to cause a permanent division of Europe into a Russian zone of influence and a Western lone of influence?

Well, in Britain I can assure you, Gentlemen, that our government worked very hard indeed, and we were well supported in this matter by the French, to bring the Russians into the general plan for the economic restoration of Europe. It wasn't our fault at all that they are not in and we don't believe that the division need be permanent. People talk loosely of the iron curtain, and the idea is that no commerce or trade passes between the country on one side of the curtain and the one on the other side.

Well, I do a good deal of business in Europe and I can give you first hand evidence that that is not so at all. In Britain we are doing considerable commerce, for example, at the present time, in Poland: We are sending all kinds of British goods into Poland and getting from Poland certain foodstuffs, raw. materials, coal, and so on, and there is quite a brisk trade going on.

Czechoslovakia is another country that is supposed to be behind the iron curtain. We are doing a lot of business with the Czechs. Last year we got twenty thousand bridal suites from Czechoslovakia. That is bedroom suites of furniture for our young veterans to be married. There was not enough furniture in Britain so we got it from Czechoslovakia. That is an example of the trade that is going on. I may say, Mr. President, that the suites had double beds--on the advice of the Minister of Health, who has been worried about the vital statistics. And we are getting now this year ten thousand wooden houses from Czechoslovakia. I don't know why you shouldn't do some trade in this country. They are very suitable, they can be put up in a few days and they are very fine houses and very suitable for the farm labourers of Britain.

And Britain is doing business with other countries that are supposed to be behind the iron curtain. If that development continues and our commercial relationship can be reestablished and extended, I should think the pressure on the so-called satellites of Moscow would be to come in in the general European economy, and therefore we are not at all frightened in Britain that this division will be permanent and we certainly don't want it to be permanent there.

The criticism that my friends make in Britain of the Marshall Plan is that it does tend to divide the English-speaking peoples and Western Europe from the eastern part of Europe, and divide it permanently, and that we don't want to see brought about at all. If we can do business with Russia at the present time in Britain we are going to do it. The recent trade talks of both governments are being restarted again and we hope will be more successful. We need goods the Russians can send, and we particularly need timber, and we hope the conversations which are to be renewed presently will be more successful.

This is a hot day and I don't want to keep you gentlemen too long, but I must say a word about our economic situation in Britain about which quite a number of our people are properly agitated. You all know our difficulties. Full play has been made with them. You all know about our adverse trade balance and the rest of it. But you don't hear so much about our assets, and if you will permit, Mr. President, I am just going to run through what we have on the other side of the balance sheet in Britain, and it makes a formidable total.

One asset that it is not out of place perhaps for me to mention today is the British climate. We all grumble about it at home. We say we have no climate--only weather--and it is very trying and this last winter we did have a very bad time indeed for which we weren't prepared. We don't usually have such winters and we aren't prepared for them, as you are in Canada. That is very exceptional, and generally speaking it is never too hot that people won't work or can't work. It is never so cold that transport or communications are interfered with. As a general rule we never lose an hour's work through weather in Britain. The floods and snows of last winter and spring were quite exceptional and we all expect them not to return.

Then next, we still enjoy very great prestige for British goods and there is a great belief throughout the world, I know this because I was over Central and South America last fall and covered a great deal of other parts America the world since last fall also--there is a great belief throughout the world in the British good faith in commerce. They still talk all over South America of "the word of an Englishman". A gentleman in the Argentine doing business with another gentleman of the Argentine assures him that he is really going to keep his bargain, giving his assurance that on the word of an Englishman he will deliver goods at such and such a time. It still exists, and we still have that very great reputation throughout the world for fair dealing and good commercial practice-undoubtedly a great asset to us.

Then we have the natural resources. I speak not only of Britain but of the Commonwealth-I don't see why one should speak only of Britain--there are the vast natural resources of the Commonwealth and the colonial Empire. I will say nothing about the resources of Canada which you know far more about but I can tell you the undeveloped resources of our African colonies are immense. We have only begun to scratch the wealth of Africa. It is really only this government, which everyone doesn't support in Britain, that has proposed adequate finances for the first time for colonial government. The great Joseph Chamberlain wanted to do it but the Chancellor of the Exchequer of his day never produced any sums for the colonial development that is being done now. Australia has immense natural resources that have hardly been scratched and that is also the case in South Africa and other parts of the British Commonwealth. I don't see why 'we shouldn't put that on the other side of the balance sheet.

Then we have another asset which is rather intangible, but very important. That is we have in Britain a much abused but very honest Civil Service, an incorruptible Civil Service--of tremendous importance, as any of you men who have travelled and done business on the Continent of Europe will know. And we have an honest judiciary, which some of you gentlemen who have travelled in other parts of the world where the British flag doesn't fly will know is also important.

In the nation we have a fundamental unity of purpose. No matter how bitter the political strife, there is after all a closing of the ranks in time of trouble, and we all want more or less the same thing, and at heart the British workman is most patriotic. You didn't find any Quizlings or would be Quizlings among the working classes in Britain. They were a hundred per cent behind the country in the current war and the last war, and they are behind any government in Britain that is trying to do the job in the face of the greatest difficulties.

And that brings me to another asset, and here I can't help being slightly controversial. I hope you will forgive me, Mr. President. The existence in London today of a Labour Government means an absence of industrial friction and disputes. Since the election there has not been one official strike in Britain. But by that I mean there has' not been one strike led by the official Unions. There have been a few sporadic unofficial strikes in various industries which the Unions have tried to end as quickly as possible, but because of the Labour Government the Unions as a whole-in fact, the whole of the Unions do their best to avoid industrial friction and disputes which would set back the recovery of the country and that is really a tangible asset which our Conservative friends will admit. They will all tell you so.

Then one more thing that perhaps you will forgive me for boasting about. Our people have tremendous doggedness and fundamental courage at home. They know, they have learned that we are in great economic trouble but they are also confident that we will get through it and they will face any hardships and any privations and any inconveniences--I am certain of this to help the country to recover its position as a great power, respected by the whole world, which we intend to do.

One example of this. We are going to have, a,; you know, direction of labour as we had in the war. There was great hesitation for a long time about bringing that up. I have talked to dozens of working men on this subject--some of my own workmen--I have been advocating this in my own Department for a long time before it came about and they all told me they would far rather have direction of labour. What the British workman objects to is this-he doesn't like going to another job, giving up a comfortable post in order to go into an essential industry and then his neighbour shirks and doesn't do his part. But that recent conscription among the working classes in Britain was not so unpopular as you supposed. The man who volunteered for the

Forces objected very much to his neighbour getting clear and they really prefer if there are to be sacrifices that there should be equal sacrifices all around and no nonsense with shirkers.

Well, with that sort of spirit we have some assets and advantages on the other side of the ledger, and the position is not really quite so black as it might appear from some of the pictures drawn of it.

Now, we are going to go through a very difficult time indeed, but we will come through and I know what help you can give us here in Canada, both material and moral--and the moral support and help you give us is of great value we know it will be forthcoming.