Save Our Timber and Forest Industries

DR. F. A. GABY: Gentlemen: We are greatly honoured today in having with us a distinguished member of the newspaper profession, and an honoured member of the Legislative Council of the Province of Quebec. This is the second occasion on which we have been favoured by members of the Government of this province. You will recall that last Fall the Honourable Mr. Mathewson, Provincial Treasurer of Quebec, addressed the Club, and today we have a member of the Upper House as our guest-speaker.

Although these are serious times and most of us are interested in the acceleration of our war effort, nevertheless we must look forward to that time when it will be necessary to proceed with the normal functions of our industry.

The subject of our guest-speaker's address today is "Save Our Timber and Forest Industries", and is, I understand, the third or fourth of a series of articles which are in sequence, dealing with this most important subject. Mr. Carrel has spent a great deal of his life in the study of this important problem and we are indeed honoured in having him with us.

I have much pleasure in introducing the Honourable Frank Carrel.

THE HONOURABLE FRANK CARREL, LL.D.: (The following remarks were addressed to the radio audience.) To those who listen in to my address may I say that in the terrific struggle which is going on in Europe today many of our gallant boys are overseas to fight in the defence of Canada and Canadians. Good luck to them and God bless them! To those of us who are unable to join, we have a duty to perform in their absence. We must strive our utmost to prepare jobs for our heroes when they return from Berlin.

Kindly bear these thoughts in mind as you listen to my address.

Mr. President and Gentlemen: It is now several years since I had the honour of addressing your Club.

I spoke then of my efforts to organize an Empire Economic League in Britain. My object at the time was to found an Empire organization that could imperially, and without political partisanship and the danger of government interference, discuss and study our economic problems. Furthermore, its services would be of aid and assistance to all governments of the Empire, irrespective of political persuasions.

Our present set-up, under democratic governments, in and out of office at the will of a sensitive electorate, is not conducive to permanent Empire industrial and economic solidarity. Trade and commerce of the Empire must rest upon a solid foundation of non-partisan political influences if we want to participate in its full benefits.

To establish an Empire economic organization to carry on research work in the development of our natural resources, which would compare favourably with that existing in Washington, Berlin and Japan, would be of incalculable service to our export trade.

Canada and every part of the Empire is suffering from the lack of such a body. Our parliamentary representatives, desirous of helping our forests and forest industries are handicapped by this economic shortcoming.

During the past months I have sought information of our trade organizations and our governments but with only partial success. In consequence, I was forced to go to Washington where the courtesy of the officials is one of the strongest signs that the Americans no doubt want to help us in our foreign trade expansion. I am sure they realize that in aiding our commercial efforts they are participating in our success by the large amount of goods we buy from them.

Through this Empire economic organization we desired to institute a weekly radio resume of the Empire's natural resources and the very latest information pertaining to their development. These trade talks we believed would enlighten, interest and enthuse our business men in every corner of the Empire. They would lead to many contacts of commercial expansion of ideas, plans and policies from which we would all benefit. They would go further. They would lead to a survey of the world's commercial progress and from the information and material gathered our governments would be fully informed and able to take a long-range view of our economic development upon which to shape their policies and legislation.

From this organization I believe we would have been able to obtain a new perspective of beneficial co-ordination of Empire trade. For instance, Quebec possesses the greatest production of maple products in the world, and yet, due to ignorance or other reasons, we are unable, satisfactorily, to market these delicious products-the healthiest and purest of all world foodstuffs. In dollars and cents we are selling less of these products today than we did fifteen years ago. What a commercial reflection when we realize that millions of dollars worth of European chocolates are sold on this continent, made by enterprising manufacturers of European nations, out of raw materials not indigenous to the centres of manufacture. Another advantage of the maple sugar industry is in the fact that the smallest farmer can make the basic substance.

No one knows what will happen in Europe after the present war. Would it not have been opportune to have possessed an organization which could guide and aid us in preparation to carry on the responsibilities of commerce which may develop from a catastrophe of untold destruction to European industry?

With an Empire Economic League we would be able to regulate in an orderly and profitable manner, a new conception of Empire trade on a broad, mutual, co-operative plan.

For illustration: An Empire survey of our natural resources would reveal what each part of the Empire could best produce in wheat, cattle, fruit, vegetables, lumber, newsprint, metals, ores, coal, oils, etc., etc.

Each Dominion would strive to contribute the highest quality of products at the lowest possible prices to the world's markets. It would foster an economic body of integral parts in a great expansive development of specialties of natural resources which, if economically developed and managed, would protect the Empire against much of the world's competition.

My campaign aroused great interest in the United Kingdom. It received favourable comment from the entire press, but it also aroused a jealousy on the part of existing trade associations, who thought they possessed the necessary machinery for the accomplishment of my objective, which, of course, was not the case. This temporarily retarded the consummation of the movement.

I had the satisfaction however, of seeing my plan debated in the House of Lords. I think I am probably the only Canadian urging a plan for increased trade within the Empire, who received such an honour.

The campaign was not a failure. It sowed the seed of a new thought. The missionary work was effective. The realization may materialize in years to come like a bolt out of a blue sky.

In the meantime, our efforts have caused many to think that in our democratic system of government, we must separate business, trade and commerce from the disastrous control and influence of partisan politics. I believe my work has done much good, particularly in convincing a following that there is grave clanger of our present position creating fertile soil for all the European "isms". today I come before you fighting in an effort to help save our forests and our forest industries by removing them from political partisan influences which I believe is one of the causes which have brought such a harrowing burden upon our investors and those connected with the administration of these natural resources. If we can succeed in our objective we will not only save our industries but conserve our forest growths in perpetuity. To accomplish this task we must arouse public opinion to the seriousness of the situation through publicity and education.

What do I mean by this statement? Let me be more explicit, with no sense of criticism. A few weeks ago, in my native city, a high official of the pulp and paper industry made a speech at a convention. His text covered, principally, a comparative statement of the exports of the pulp and paper industry between the years 1913 and 1939. The concluding figures were colossal, reaching a net of $155,000,000. Anyone reading this speech and noting these figures would naturally believe that the pulp and paper industry must be making fabulous profits though this was not exactly stated in the speech. Such statements might lead to strikes and discontent among our workers, and disappointment and prejudice among our investors. Nor was it mentioned that our mills, a short time ago were running only at 50 per cent to 60 per cent capacity; that many of our companies had gone into bankruptcy; that thousands of investors had lost their complete savings, in some cases without reason or judgment; that many more thousands were patiently waiting for interest or dividends; that our forests were being wantonly depleted; that foreign competition had entered our best markets and was decreasing our sales; that a new competitive opposition was rising in the Southern States; that the war was only a temporary stimulant to this industry and that we would be back in our old positions when it was over, unless-and here is the important point-our people are aroused to united action through a knowledge of the truth in order to force our Governments, both Federal and Provincial, to throw off the shackles of partisan politics, exploitation and selfish interests.

Unless this is done the worst is yet to come.

It will be too late when our mills begin to die a natural death, our villages and towns empty of their populations or become derelict burdens on the state, and our people discouraged, but, gentlemen, that is the true outlook-if our Governments do not awaken to our critical condition and come to our rescue with the financial resources of the country. They must act today because it will be too late if they wait until tomorrow.

A short time ago one of the leading officials of our pulp and paper industry, in the course of giving evidence at the Ontario Provincial inquiry, stated that he was in favour of pro-ration and outlined what it had done for the industry in Canada.

All of which was impressive and apparently conclusive evidence of the success of pro-ration. What he did not say, however, was that pro-ration is probably a good temporary controlling influence though economically I think it is very much like monetary inflation which stimulates business for a time, but in the end is not so healthy.

There is not a financial magnate in the world today who does not shudder at the thought of monetary inflation because he is afraid of the after-effects.

So I think it is with pro-ration. However, this is not the point at the moment. The public should be informed that pro-ration is not uniformly applied in Canada and that this is one of its present weaknesses. For instance, we have pro-ration in Quebec and Ontario with special exemptions to several of our mills, which is naturally unfair not only to the rest of the mills in our province, but unfair to our customers to whom we are selling newsprint from other mills.

But pro-ration not being applied in the other provinces of the Dominion we see a group of investors owning a mill in Quebec or Ontario subject to pro-ration and other groups owning mills in other provinces with no such restrictions.

Are regulations of this kind not leading us into the very dangers we are trying to avoid? Are these restrictions, off and on, at the will of a partisan political government, not responsible for our troubles today and what is still worse, those which we may expect tomorrow? We also have a government regulation in Quebec which prohibits the export of pulpwood from Crown Lands, but in the Province of Ontario it is legally permitted and even encouraged to the extent of over half a million cords per annum. The Ontario Government has announced that some of their operating mills should be closed while at the same time the Province of Quebec is announcing that they must re-open some of their closed mills.

Do you, as a sensible body of men, not think that this is a ridiculous anomaly? If Ontario and Quebec and the other provinces cannot get together in influencing uniform legislation, is it any wonder that we are criticized, and justly so, in the administration of one of the richest resources of our land.

It does not matter upon which government we must place the responsibilities for our present conditions, but I say that unless we know the truth, we, the public, cannot come to the assistance of this industry as we desire to do. Today our students are becoming interested. I believe they will become a force in helping us. It is a promising sign to have our young people take an interest in our economic questions. It is our lack of vision and interest in this respect which is sowing the seed of mental unrest in many of our educational institutions.

We Canadians, in a new country, blessed, or is it cursed, with an over-abundance of one of the greatest natural resources in the world, have been prodigal--may I go further and say wasteful and negligent-in observing the first rules of economic thrift in the administration of our rich inheritance.

We have such a super-abundance that we waste it. We have not yet realized what economic zones mean, that our newsprint mills can only operate profitably with cheap raw material from the forests near the mills. Cut these nearby forests indiscriminately and we raise the cost of the raw material--we create high cost competitive mills.

We must put our house in order and avoid the pitfalls of the past by charting a new economic course for the future. The time has arrived when we have to place our cards on the table. We are approaching a dangerous decade. We are running into serious competition in our natural markets in the United States. Blinding our people is not a remedy.

Foreign nations are beating us in the price of our products. We must learn how they are doing it and we must courageously meet the competition at all sacrifices. Governments, investors and workers must join together to meet this industrial menace. We cannot stand by and look on when there is yet hope to make a stout resistance, for we have every aid of Nature on our side.

We have the benefit of our vast forests, swift running rivers to carry our logs to the mills, water and rail transportation to convey our products to their natural markets and abundant electrical power to drive our machinery.

Flowing through our immense forest lands, rich beyond any other country in the world, is our majestic river, the St. Lawrence, over which to carry our merchandise, without use of rail and transhipment expenses, on its way to all corners of the universe.

With all these advantages surely we should be able to solve our present handicaps and meet the competition of any nation in our neighbouring markets. Will we do it? I think we will, in fact we must!

Slowly but surely this competition is growing into a menace which must be faced with our best brains.

The first step towards meeting this competition is in the enlightenment of our people. The next is to relieve our forests and forest industries from partisan political influence and place them under an independent commission of our best practical men, men who possess the necessary scientific knowledge to find a cure for our ailments. If not, the results may be disastrous.

I have introduced a motion in the Quebec Legislative Council to this effect. It calls for a permanent advisory commission or council of our practical experts to make a complete survey and research in order to counsel our Governments, both Federal and Provincial, in policies that will aid our manufacturers to meet this coming competition.

We lack unity of effort and co-ordination in effecting necessary economies which may not have been necessary years ago but which are imperative today. We must organize throughout Canada, uniform regulations and understandings on modern conservation methods, sane labour arrangements, stumpage dues and taxes, and break down the barriers now impeding the cost of our forest products.

The ignorance of our people concerning present day conditions in the development of these natural resources is lamentable. Let us make our people forest-minded. Let us show them how we are being beaten in foreign markets notwithstanding all that Nature has done for us. Let us tell our youth of these facts through our schools, colleges and universities and enlist them in our missionary work.

Let us tell them how Japan is building up her forests through reforestation. A Japanese cannot cut down a tree without planting two new ones. Let us tell them that in the Scandinavian nations a tree cannot be cut down without a government permit. Let us find out how the Scandinavian mills can buy electric power for five dollars a horse power when our manufacturers have to pay three and four times as much. Let us tell them of the small wood dues in Finland, Norway and Sweden as compared with our heavy charges in Canada. Let us tell them how our Governments are charging our forest industry in dues which are used to carry on extravagant expenditures which bring us no return-to the sacrifice of one industry that brings returns.

In the Province of Quebec the Government collects over $7,000,000 from the forests and spends $2,500,000 of this amount on forest administration with practically nothing on conservation. It may be the same in other provinces. Is this fair, under the circumstances? I think it is deplorable.

The United States Government has spent over $3,500,000,000 in the past eight years in aiding the conservation, development and protection of her forests billions more than it is collecting in dues or taxation from its forest industries. Is it any wonder that the United States is bringing larger forest areas under proper management, for in so doing they will eventually produce sufficient raw material for their mills within economic zones.

What will happen when they have sufficient for their home consumption? Where will we find other markets? Not in Australia, New Zealand, Tasmania, China, India or Japan, for they are buildings mills in these countries.

They are making newsprint out of almost all varieties of trees, rice grass, bamboo and other indigenous growths. No, we have arrived at a period in the history of our forest industries when we must set our technicians, technologists, chemists and all experts to intensive study so that we may produce continuous forest crops and find other outlets for our forest products. Our Federal Government must increase its present insignificant subsidy to aid in this work. Instead of the small sum of $300,000 they must increase it to many millions.

Our Federal Government votes $9,000,000 for Agriculture; $3,000,000 for Mines; $1,700,000 for Fisheries; and only $300,000 for its Forests. The total of these subsidies for aiding Agriculture, Mines, Fisheries and Forests, the principal sources of all Canada's revenues, is less than $15,000,000 and yet we are spending $40,000,000 to $50,000,000 every year to pay the deficits of one railroad in our country, not to speak of the many millions we spend in bonusing our wheat crops.

We may well ask ourselves if we are using our best administrative judgment in these matters. Can we find such weaknesses in dictatorial nations with which we have to compete? These gaps in our industrial life should be bridged over.

We must realize that it would be better to see a wave of economic optimism sweeping over Canada and the Empire than to wait for a dictator to arrive and endeavour to check our waste of national resources by force rather than by peaceful persuasion.

We abhor the brutal conditions of dictator governments in Europe today. At the same time we are apprehensive of the growing danger of European propaganda on this continent. We must make a choice in the immediate future concerning the separation of our economic questions from partisan political influences; if not we will drift into another form of government which may remove some of our present day liberties which are the salvation of our Empire.

"Keep the farmer on the land" is a good slogan but to do it we must provide him with a decent living. Permitting him to cut down all his trees and sell them in one or two seasons 'is not conducive to promoting national economy.

Until last September when war was declared, we were shipping hundreds of thousands of cords of pulpwood from the banks of the St. Lawrence below Quebec, to Germany. Much of this wood was manufactured into woodpulp and newsprint and sold in the United States and elsewhere, in competition with our own product. This wood was purchased by German agents and loaded in German ships, paying low German wages. This wood was bought from our farmers under no government restrictions or regulations. It did not represent the annual growth-it represented in too many cases the whole forest stand of some farms-the valuable source of annual income to our farmers.

Ontario, New Brunswick and Quebec shipped a total of 975,600 cords, almost a million cords, in 1939, to the United States and Germany, for a mere pittance consider ing the real value to our farmers and our workmen. We should not forget that a cord of wood is about equal to a ton of newsprint and that while Canada derives only $8.00 from a cord of pulpwood she receives $32 from a ton of newsprint.

It will take fifty to sixty years to replace the trees that have been cut down. What will our farmers do in the meantime? What will they do in the future? These are some of the unwise acts of devastation going on in our province, while our Governments are looking on.

The farmer should be taught the principles and benefits of a sustained-yield forest management-that is, to cultivate annual crops as a natural growth on his forest land so that he could depend upon an annual revenue from this source. This would add to his family budget.

Today our farmers all over the country, with few exceptions, are being permitted to kill the goose that lays the golden egg. They are wiping out their woodlots instead of perpetuating them.

Why do our Governments permit it? Because our Governments are afraid of offending the farmers, losing their vote and becoming unpopular. Our Governments, for the sake of the farmers' vote, would look on and see the steady supplement to their annual income dry up and disappear in order to please a political partisan party, groups of speculators or selfish interests, rather than save our national inheritance-the farmers' perpetual source of annual income--their farm woodlots.

We have given in too much to this sort of thing in the past-today we have to decide. Tomorrow it will be too late. The condition of our forests and forest industries today is a lesson for tomorrow. They grew up without planning but it is not too late to plan now for the future. It is an Empire responsibility. It is the mystic key to the contentment of our farmers, the progress and wealth of all our citizens, the salvation of our future.

We must not forget there are wooden dollars in all our pockets.

Are we going to permit partisan politics to destroy the nation's economic life-the source of our national income and revenue? I think not. Then it rests with us to change our course. We are fighting in the open. This is the truest form of democratic government.

After fifty years of newspaper publishing in the historic city of Quebec and twenty-two years as a member of the Legislative Council, I became alarmed at our serious situation and have been devoting much of my time and means in helping to aid in saving and conserving our forests before it is too late. Our movement is gaining ground. Our following is increasing every day until we now feel that we have made satisfactory headway but there is still much to be clone.

The day I made my speech in the Legislative Council in Quebec in support of my motion, the galleries were crowded with advanced students from Laval University, the Commercial Academy and the Protestant and Catholic High Schools. The next day the leading French newspapers, without a single request from me, gave my speech space of from two and a half to over seven columns. The total circulation of these newspapers was four hundred and thirty-one thousand copies. And may I pay a compliment to the Right Rev. Canon Chamberland, who is the director of a leading French Catholic newspaper of Quebec, and state to you, as a Protestant in Quebec, that his paper gave me seven columns. (Applause.) This fact is full evidence of the desire of our people to be informed.

The Government of Ontario is making a worthy first step in holding an inquiry at which all interests are invited to give testimony. The evidence being adduced will be very valuable and timely.

Our Government in Quebec is bringing in a Bill which will smooth out some of the difficulties of our mill owners. It will remove some of the heavy costs on our products. Any legislation which will reduce costs is absolutely necessary to our march of progress if we are going to retain and remain in this industry. If so, we must be prepared to conserve it in perpetuity, which I think is the desire of our people.

We must preserve our forests not only for future generations but we must conserve them on the sustained-yield basis to keep pace with the European and American systems of management, or, we will find ourselves minus a $155,000,000 export trade--a tragedy which would affect every province in the Dominion.

Apathy, ignorance, lack of vision, have been our weaknesses in the past. Can we throw off these shackles and lift our forests and forest industries into one of the most assured and flourishing industrial revenue producers? The question is, will we rise to the situation, will we do our duty, will we aid in arousing public opinion to the danger which lies ahead of us? Will we influence our governments to break the stranglehold that is retarding and handicapping our opportunities in our natural markets? I think we can and will.

When one reviews the past one has to come to the conclusion that this industry has probably been the milch cow of our governments. It is the victim of partisan political influences. Happily, we are beginning to realize the errors of our ways. Our governments and our newsprint organizations are bestirring themselves. This is a splendid omen, but the public, the people, have to join and aid them.

Several statements have been recently made public, bearing upon what I have said today. One of them, under the caption of "Can Democracy Survive" from the editor of Magazine Digest, says, "Economic democracy is required to enable our political democracy to survive."

In other words, political democracy must never overcome or submerge economic democracy. Unfortunately, this is just what is happening in Quebec. It may be our economic weakness, our error and our tragic loss.

Another statement has been given to the public by one of your eminent analysts, Mr. R. W. Finlayson. He recently said

"The sooner the Canadian newsprint manufacturers adopt such constructive practices as long-term forest projects, greater employment of cellulose research to develop a better grade of newsprint and by-products and continue the progress of getting their financial houses in good order, the sooner they will place their units in a true competitive position. It must be remembered that newsprint is a world-wide, tariff-free commodity and here, as in other fields, the lowest cost products survive in the ever-present economic battle."

The Right Honourable Arthur Meighen said a few days ago, "Do not let us live in a paradise that we know is false."

E. A. Pierce, prominent New York stock broker, state in a public address in Spokane, last week, that "brokers and all business men must abandon their reticence and sell themselves to the public. We must operate under ethics of which the public cannot help but approve. For the American people will not again stand for being shoved around by business, by the government and by wild-eyed revolutionists."

Mr. A. Vining, President of the Canadian Newsprint Association, one of the most active and energetic workers for government reform, in a recent brief said: "One of the curious things about the newsprint industry is the degree to which its worth remains concealed from the public eye. "The value of newsprint exports exceeded the value of wheat exports by over ten million dollars a year.

"Newsprint touches every home and every pocketbook in Quebec and Ontario."

I might mention here that the exports of newsprint for twelve months up to last April amounted to $216,000,000 while our wheat amounted to $125,000,000 for the same period.

Mr. Floyd Chalmers, editor of the Financial Post, says: "One dollar out of every three of our national income comes from export trade. We depend upon our markets abroad for our prosperity."

To all of these opinions I emphatically say, "Hear! Hear!" They emphasize my ideal of what should be our goal to save our forests and our forest industries.

To reach our objective, public opinion must be aroused and informed through publicity and education-it will put more wooden dollars in our pockets. It will do more--it will aid us to meet post-war conditions which will constitute one of the most serious problems which Canada has yet had to solve.

My conclusions are embodied in the following suggestions

(1) Appointment of an international commission to conciliate differences and improve our relationship with our best newsprint consumers in the United States.
(2) Appointment of a Federal Board to further a more orderly and uniform application of Provincial and Dominion legislation to aid and develop our export trade.
(3) Appointment of Provincial Commissions of forest experts to administer local management and control. Through these respective bodies we would remove the forests and forest industries beyond the effects of partisan political influences.

Our practical men, our technologists, our technicians and our chemists, given full responsibility to chart a course for our forests and forest industries, would speedily find other markets for those we are likely to lose in the course of the present day competition.

Our politicians could never do the job our practical men will accomplish because the latter have no axes to grind, no consideration for stock market exchanges, no demand for seeking votes and no selfish interests of any kind to which to cater.

And what of the future? It is my conviction that Japan which has had the development of her forests and forest industries in her economic vision and ambition for many years will be another formidable competitor of Canada.

Japan has had her eyes on the eastern forests of Russia, in fact she has a forty-five year tentative agreement ready to be signed and concluded at the termination of present hostilities. She will also develop the mountainous forests of China along with those of Russia. It may surprise you to know that Japan is the most alive nation in the world today in reforestation. She is seeding one hundred and fifty thousand acres of land per annum. Britain will probably continue to use the forests of western Russia and Scandinavia for its own consumption and possibly for export. Russia will probably operate the mills which she has taken over from Finland and sell newsprint to London. This means that Russia today is not going to forsake her trade with England, particularly in her forests and forest industries, nor with the United States and Canada, in order to tie up with the German government whose word is now known to be worthless.

The question will be an important one in our postwar duties and responsibilities. It is only natural that in a short time, due to increased war demand for our news print and woodpulp, our newsprint mills will be running at full capacity, probably at 100 per cent instead of only 50 per cent to 60 per cent capacity.

It is also natural to realize that at the close of the war these industries may go back to pre-war conditions. This will leave us to take care of many thousands of unemployed forest workers. It is well to be reminded of this fact today because it will perhaps stimulate our Governments to greater activity and assistance. It should also press our scientists and chemists to increased efforts to find other uses for our forest products in order to keep as many as possible of these workers in their jobs.

Increased government financial aid will be a paying investment. This should be our main effort and our greatest objective. It is the only way to overcome the real barriers to our progress in the past. We must use our intelligence, ability and knowledge to meet the economic issue with the grit and courage of determined men and women.

We can show the world that we can and will overcome the obstacles in our path and save our forests and forest industries as one of Canada's greatest economic assets-the result of which will affect every other industry in the land.

After years of research as a journalist, member of the Government and investor, I consider that we must now listen to our practical men, the men who know our ills and complaints and can find their remedies and cures. Only through spreading the truth, through publicity and education will we achieve our objective. (Applause.)

DR. F. A. GARY: Gentlemen, we are very much indebted to the Honourable Mr. Carrel for his excellent address on our forest resources and their conservation. He has given us a very stirring message of the necessity of organizing and influencing our governments in the conserving and maintaining of our wood supplies for the future, and stopping the loss of raw materials so necessary for the future preservation of our industry--of which newsprint is one of the largest items in our export trade--and so necessary to an economic democracy which must survive if we are to maintain our political democracy.

We are indeed honoured by having the Honourable Mr. Carrel in our presence today, and on your behalf I extend to him our appreciation and thanks for his excellent and inspiring address. (Applause.)