Some War-Time Business and Financial Problems

CANON WOODCOCK: I have the privilege today of introducing our guest of honour, Mr. Macdonnell, the General Manager of the National Trust Company. I have this privilege because of the unavoidable absence of our President, Dr. Gaby.

We were somewhat surprised to see such a large number of people present here today. Sometimes we have a large audience because a speaker is unknown and the people come more or less out of curiosity. They may have heard of him and they want to see him. Today that is not the reason you are here. You are here because you know the speaker. He is well known throughout the city and Province and throughout the Dominion of Canada. He is a very prominent business man as well as a very eminent lawyer. And, because you know him you know he has something to say to you which will be worth while. Also, you come, I am sure, to honour him, to show your esteem and respect for him.

Now, I am not a business man. If I were a business man, it seems to me I would go into the kind of business our guest is occupied with, namely, a Trust Company, because the field of their service is an absolutely sure field, and in these uncertain days it seems to me in business that is the kind of a field we want, something that is sure. They say that death and taxes are known to every man and there is nothing surer in life than those two things. From the number of pamphlets coming to me from the National Trust Company and other companies, I take it that is the field of their service-death and taxes-so they have also something to do with a field that is absolutely sure.

Our guest of honour today is not only a business man but he is also very well known in other spheres. He was a soldier during the war and we are glad to see that we have representatives of His Majesty's Service here today in uniform. He performed very distinguished service during the war and was decorated with the Military Cross and the Croix de Guerre. I have very great pleasure indeed, and I count it an honour, to introduce to you J. M. Macdonnell, Esq., K.C., whose subject is "Some War-Time Business and Financial Problems". Mr. Macdonnell. (Applause)

MR. J. M. MACDONNELL, EsQ., K.C.: Mr. Chairman and Gentlemen: I am very grateful indeed to you, Sir, for the kind things which you have said about me, because I have seldom found myself more in need of encouragement. I don't refer merely to the feeling I am sure any man of average decency has when he stands up and realizes that for an indefinite period his friends are condemned to listen to him. I think any man should have something of that feeling. My second and much more compelling reason is that only a week ago you had the pleasure and excitement of listening to a gentleman here who not only made a speech, interesting in itself, but full of the most delightful indiscreetness and this, I am sure, gives one a pleasure that almost nothing else can. This is no day for anyone, still less for a Conservative, to be indiscreet, and no indiscretion of any kind I could commit would be of the slightest interest to you. Therefore, I feel that anything I can say is bound to be dull, compared with the delightful indiscretions you listened to a week ago.

The third reason that weighed heavily on me was that for weeks you have been listening to many speakers and it seemed almost incredible than any man would be able to stand anything more in the way of speeches, particularly when we consider the weight of the speeches that have been given to you.

the Captains and the Kings depart", and 1 said to myself, "Who am I and what am I that I should dare to speak at a time like this when these great people have just left the scene?" And like some present here, like all Presbyterians, I hope, in my difficulty I turned to Holy Scripture, and I found there something which comforted me, and which is really my only excuse to be here at all. I shall read it to you. Those of you who have Bibles can check it up later on and see whether I am correct or not. It is a description of a conversation which the Prophet Elijah was having with the Almighty. The description goes as follows: "the Prophet was told, Go forth, and stand upon the mount before the Lord. And, behold, the Lord passed by, and a great and strong wind rent the mountains, and brake in pieces the rocks before the Lord; but the Lord was not in the wind: and after the wind an earthquake; but the Lord was not in the earthquake

And after the earthquake a fire; but the Lord was not in the fire: and after the fire a still small voice."

Now, Gentlemen, my only excuse for being here after the earthquake and the fire is that you have merely today the humble, still small voice of business, pretending to say a word to you about the problems which concern us. But I should like to say, by way of parenthesis, that I have no desire that any remarks of mine should sound like cheap or superficial criticism of party strife, because I think we are apt sometimes to forget what my friend, Bill Morrison, the Mayor of Hamilton, said, that elections, after all, are not afternoon tea parties, and that strife goes with the party system, and that the party system is the only alternative known to man, discovered yet, to autocracy, and I think even when the party system produces some things we do not like, it would be wise for us to remember, and I repeat it, that it is the only know alternative to autocracy, and when we sneer at it cheaply and thoughtlessly, we are committing a great mistake.

However, I have strayed from my point. I mention that in parenthesis, and I come now to what I really wish to bring before you today.

I wish to suggest to you that there are certain problems which are facing the business community and which we will neglect at our peril. When I say at our peril, I mean peril. That is, peril, from the point of view of all people like ourselves who, I assume, believe in the individualist system.

Now, the peril I think is that these problems that we are facing and to which I shall refer have certainly got to be solved, and the only question is whether they will be solved through our system, by the exercise of courage, imagination and initiative and the qualities that go with it, or whether it will be left to be solved by government agency, which will inevitably be a regimentation which we all detest.

I would like to point out here that in the circumstances of the moment, that is to say, at a time when through the exigency of war we are bound to have control and regimentation beyond the ordinary, I repeat, in those circumstances, men's minds will easily incline to the thought that the solution of all our problems, of peace as well as war, can come through, not a decrease but an extension of government activity.

Now, the problems I wish particularly to speak about today are not the immediate problems of war. I venture to say I think we have made a fairly good beginning on them. (The election is over now.) The thing I really want to suggest to you is that there are certain problems that will be on our backs as soon as peace comes and that are in the gravest danger of being ignored now, particularly through the exigencies of war, and if we are not alive and alert to these now we may find too late that we have lost a chance to solve them.

It would be desirable, I think, before I come to the problems, to review quite briefly for you the situation at the moment, the problems of war-time, and the means that we are taking to deal with them. My chief objective is to pass on from those and endeavour to interest you, while there is still time-and we don't know how much time there is--we all hope in spite of everything that the war won't last very long--in the problems of peace. I proceed for a few moments to review with you the situation at the moment, the problems caused by the war, and the means which we are taking to meet them, and with that purpose, I find it convenient to refer you to the Budget Speech which was delivered last September, in Ottawa. I venture to urge on each and every one of you to read that speech, because I think it is a very able document and it contains a discussion in the most vital and profound way, of the problems which are now confronting us. The first point I want to make, quoting from the Budget Speech, is the distinction which Mr. Ilsley makes and I think it is a very important one, between what he calls the basic, the real cost of the war, that is to say, goods and services, of which we will be deprived during the course of the war, which will go into the conduct of the war and which will be used up when the war is over, that is the real cost, and, on the other hand, the money cost of the war, much of which in all probability will not have been paid by the end of the war but will remain.

These things are put so well and every word weighed. I venture to read to you three or four short quotations: "However we finance the cost of the war," said Mr. Ilsley, "whether by taxation or by borrowing or by inflation, we cannot escape its real costs. By real costs I mean the goods and services which have to be sacrificed out of our current production to meet the needs of war".

And again, "This being the case it follows . . . that in real terms, viz., in terms of the loss to the nation of this production, a war is paid for substantially during its duration".

And he also says, "Obviously this simple fact has very important implications for any programme of war finance." Now, I submit to you it is a self-evident fact, so far as material things are concerned, the shells required, food and clothes and the ships that will transport the goods and so on, that expenditure will have to be made during the war. We will lose those services ourselves and to what extent the war will have substantially been paid for at the moment it is finished. We know that on the financial side there is a very different story.

Just a word as to the means that the Budget Speech outlines by which these goods and services are to be provided. There are only two means. The first, of course, is additional production, and we very well know these is a vast room for provision of those needs in Canada by additional production. The second means is by saving. That is to say, the kind of thing going on in England today, where all kinds of services which the public was receiving last September or last August, are being received no more. A great deal can be done in that way. I have no doubt we can all think of things other people can very well give up, and we might even set ourselves to setting economies that could be made by other people and get them to do the same for us. At any rate, a great deal could be done. In England I understand there is an embargo on pets, and there are some dogs in our neighbourhood I could suggest might very well be dispensed with as a war economy.

I come again to the financial implications of this and I quote briefly from the Budget Speech. The Minister says, and you will agree, that there is a kind of logical connection between the real cost, that is to say the goods and services that have to be provided during the war, and the money cost, and that it would be an ideal thing if the money cost could be provided during the war, too. The Budget Speech points that out as follows:

"A 100 per cent taxation or pay-as-you-go policy would seem at first sight to represent the ideal -policy of war finance."

But his words indicate that he doesn't think it a practical policy, but an ideal policy. Then he goes on

"This takes no account of the desire, indeed the necessity of individuals making some savings ... and an effort to take so much in taxation that individual savings would be practically wiped out would become so disruptive in character as inevitably to produce disorganization and public discontent."

And so the following conclusion is reached: "We must recognize that when diversion by means of taxation, etcetera, rather than borrowing is carried too far the average citizen begins to feel that there is no use in his working for any additional income and therefore he does not put his best effort into his work with the result that efficiency and production fall off."

Then there is a short passage on inflation, that I will mention briefly. You see, the Budget Speech does not include borrowing under the head of inflation. By borrowing is meant a borrowing whereby the borrower actually loses the spending power. That is not a pyramiding of borrowing power as during the last war. Inflation is described as a means whereby credit is increased, without any increase of production, but only with an increase in prices. That, I think, is the basic concept of inflation that we should bear in mind. Real inflation comes when your credit expansion does not result in a corresponding expansion of production, but when it brings only an increase of price, and the Budget Speech goes on to point out that inflation of this kind is a "thinly disguised scheme of taxation of a most unjust type". It is unjust because it bears hardest on the fixed income people and results in building up the kind of fortunes made during the last war and which caused such a sense of bitterness when the war was over.

Now, one final quotation. He describes briefly the policy decided on, thus

"We shall follow as far as practicable a pay-as-you-go policy . . . we cannot carry taxes beyond the point where they interfere with production ... what we cannot finance by taxation we shall finance by means of borrowing from the Canadian public at rates as low as possible."

Just a word about interest rates. I think they are of interest to all business men. I shall quote briefly from what is said there:

"We do not think that any material change from peace time levels will be necessary to attract a sufficient portion of the large increase of savings which should be produced by the expanding production and income under war time conditions." Then he speaks briefly about the question of credit expansion. He says that they propose deliberately to expand credit. You remember this was done last Autumn by certain borrowings from the Banks. They planned deliberately to expand credit to get the wheels of industry moving, hoping they would be able with increased production to step up taxation. They would have more available to tax and borrow from so the credit expansion would prove merely a stimulus to production and not an inflationary move.

Well, now, I propose to spend a moment or two in reviewing what has happened since the outbreak of war, to see whether the government expectations have been fairly well realized. I think it is fair to say, in fact it is a self-evident fact, that there was no such disturbance last September as in August, 1914. Now, it is very natural for the Government to say that was because of the excellent arrangements made in advance and I think that is up to a point quite true, but I believe none the less, the real reason for want of disturbance was in the public mind. All but the very youngest business man had been through one war already and everybody had lived under the threat of war for years, so it seems to me we had been as good as at war several times within the last several years and when it actually came it created very little further disturbance.

I think it is easy to see what has happened in the last few months. We did have, as the Budget Speech outlined, a certain amount of government orders for production for military purposes in this country. You are all familiar with that. I need not do more than mention it.

Secondly, we did have a certain amount of purchases from abroad. For example, as you are aware, probably, Britain ordered 420 million pounds of copper which was 80 per cent of our annual production. She ordered our entire exportable production of lead and zinc and aluminum, and stepped up receivings of bacon under the Ottawa Agreements.

So all those things were important and synchronized last Autumn, and the result of it was we received a very considerable stimulus. The munitions orders from abroad, as you know, were less than expected at one time, for three very definite and intelligible reasons. First of all, the fact that vast stocks had been accumulated before in England and France. Secondly, for diplomatic reasons they had to buy as largely as they could in Southern Europe and other parts of the world. Thirdly, of course, because of the very small expenditure of munitions of war to date.

What does all that add up to in terms of actual production? Last September, our manufacturing machine was working at about 80 per cent of capacity, that being about 20 per cent improvement during the twelve months preceding. From that point it stepped up approximately another 20 per cent, so you could see before the end of the year we were working very near to capacity. There was a lull, due, I, think, quite clearly to the flattening out of our own government expenditures after the first rush, and also to the failure of larger orders to materialize from abroad.

On the other hand, the war contracts are coming along steadily. We see them advertised from week to week. The tempo of manufacturing is picking up again. Actually, as one of the best observers, as I regard him, pointed out to me the, other day, we shall be in a real danger before long of a shortage of skilled labour. Indeed, in certain trades, such as the aeroplane industry, that is already present. He pointed out also an interesting fact, that whereas in the States in 1930 they had six million skilled workers, that is now reduced to about five million. No doubt the same process is going on with us. There is a war-time problem, for manufacturers to try to recruit and train the necessary additions to our skilled labour personnel.

Now, one word in reviewing the Government's expectations about interest rates. People are sceptical in certain quarters as to whether low interest rates can be maintained. As you know, the evidence to the moment is that it can be, it has been. There was an article in the London Economist, which I regard as one of the soundest financial papers in the world, at the end of January, which was called A Three Per Cent War, and in the most recent Economist there was another article, entitled Three Per Cent which commented on the recent British War Loan, and from which I quote briefly

"Just as the last war was a five per cent war, this one could be accepted as a three per cent war," and it goes on and adds this: "These measures should now be followed up by a deliberate campaign to impress upon the general public, and in particular upon all those who are concerned in any way with the lending and borrowing of money, that lower and ever lower interest rates are, at least for the duration of the war, a vital concern of the community at large."

Keynes, I noticed a day or two ago, had calculated in figures which sounded to me fabulous, that the last war might have cost 2 million pounds less if it had been financed under a sounder basis. No doubt one of the great items he had in mind would have been the difference between five per cent and three per cent.

Now, I have mentioned our war production and the results to date, in the briefest way. I should like to say a word as to the functioning of the machine. Colonel Ralston spoke in this building some weeks ago and thanked the business community for what it had done by way of cooperation, and I think it is fair to say that the business community feel that certain government boards, notably the Exchange Control Board and the Price Control Board, are trying to function in a reasonable and cooperative way. I think the Price Control Board, up to the present, has had not actually the fixing of prices, but the provision of necessary materials so there shall be regularity and smoothness in the working of industry.

It is interesting to reflect, when you look back and read of the very, very substantial contributions which we made to the common cause twenty years ago, that in almost every department of Canadian production of raw materials, for example, our production capacity has gone up several times in the last few years. The amount we can do during this war, if properly organized, is really something prodigious.

So much for the war effort. As I told you at the outset of my remarks, what I really wish to concentrate my attention on--and I hope, yours--is the question of after the war. I think myself that we show signs of solving the war problems reasonably well. Of course it is so much easier to solve war problems because you have people in an entirely different state of mind. People are prepared to sacrifice themselves for the State, and they feel they have a duty to save it. We are never able to make them have that feeling in peace time, and it seems to me we, as a business community, should face the fact, not from an altruistic standpoint, but from the standpoint of self-preservation. We have got to do that this time or we will suffer in ways we don't like.

One of the difficulties, of course, is this, that by a curious irony, war at the present time is helping to solve, for the moment, some of the things that bothered us most eight months before the war broke out. It has probably helped a good deal with the unemployment problem and the greatest possible danger lies in our relapsing. In other words, we may be inclined to think it is not a great problem after all, we may not have to face it again. I should suggest that we bear constantly in mind, that at the very best, any help we get from war in the solution of this problem can't be anything better than a shot in the arm, and we are sure to have it back on our door-step in worse form than ever when the war is over.

That being so, I venture, with all the earnestness of which I am capable, to suggest that we should be thinking about those things now. You might say, "Well, you have just been telling us that we are making a rather better job of the conduct of the war than we did last time. Why shouldn't we make a better job of the conduct of the aftermath of the war, too? Didn't we do a fair job in 1919, and the years following?"

I can understand anyone saying that, but I believe it 'is a most fallacious comparison. I would like to suggest one or two reasons why I say that.

In the first place, there is a very strong moral and psychological reason that we all ought to take into account. I believe it is of very great importance.

Before dealing with that I want to remind you briefly what did happen after the last war. We had the advantage in the years following the war of very considerable sales to Europe. You remember the mania for economic self-sufficiency had not then so advanced as now, and you remember before the war was many years past the United States was lending large sums to Europe which they were able to use in buying all sorts of products, ours included. For example, it almost makes your mouth water to read that in 1919 we were selling wheat at $2.37 a bushel, and in 1920 it was still $1.62.

After the last war we placed a large number of men on the land. 22,000 men were placed on the land-a very substantial number if you consider the purchasing power that goes with every man placed on the land. Even though that turned out in many ways not so successful in the years following, still it did help very largely to solve the problem at that time, very substantially indeed.

You had at that time the newsprint industry, expanding and expanding, with the result labour was employed in the paper mills, in the woods taking out logs, and in the machine shops turning out newsprint machines.

We had also the motor industry and also a certain amount of building.

Then if you take the situation today-of course, you may say, what is the use of taking it today? We may have unpredictable changes that may leave problems at the end of the war that none of us can foresee now. Isn't it a waste of time? My answer is a very simple one. I don't believe anyone sitting here will deny these two propositions. First, we all devoutly hope it will end soon. Second, the longer it lasts, the greater the problems will be. Therefore, if you agree with that, I would say there is no excuse for us delaying a moment in trying to look at these things and seeing what we can do.

You have only to ask yourselves what you would feel like if the war ended today and you were faced with the problem even as it is now. That brings us to the differences. In the first place, I think there is a psychological difference of great importance. Twenty years ago, I remember very well, the only desire of the men in the Forces at the end of the war was to be demobilized as quickly as they could. They had left civilian life reluctantly and they wanted to get back. They had left civilian life at a time when unemployment and relief, in the minds of the people living in Canada, were strange things that happened in far-off countries that they regarded as very backward, and the thought that it could happen in Canada was not present in their minds.

Therefore, we had these men anxious to get back into civilian life as early as they could. Do you think that is true of all men in the army now? Would you like the job of demobilizing the boys now? To just say, "Good-bye and Good Luck! Here is a handout by way of a gratuity." I wouldn't like the job. I don't think anybody would. I think it would be a very serious job, even as we have it today. Multiply that as much as you like, and you can do mental arithmetic as much as you like and see whether you would like the job when it has grown like Topsy.

If you agree with that I will just review briefly the comparison with twenty years ago. Will we be able to place men on the land in large numbers? I think you can answer that.

Is the newsprint industry going to expand and help us a lot in the next few years? I think you can answer that. I don't know whether the motor car industry will or not. Some people here present can answer that better than I can.

Do you think the United States is going to lend money to Europe so they can buy large quantities of goods from us? You can answer that.

Then, I come to the building industry. That helped quite a lot twenty years ago. Has that been helping us recently? It has been like an "old man of the sea" on our backs, and the cause of more unemployment, I suppose, than all other industry put together.

Now, if I have succeeded at all, I have made a prima facie case-there is something to think about. I hope, before I sit down, to convince you we had better think about it. My own feeling is that the challenge is to the whole business community, and if we "leave it to George", we will find out that George is a very unpalatable dose of state socialism that we don't like. That is who I think "George" will be.

I read the other day what I thought was a very wise and sound remark. I should like to quote it to you: "Widespread initiative is essential to democracy. Where the democratic spirit is alive people do not wait to be told what to do but get to work on the job nearest at hand."

I would like to ask you to remember that. If you remember that and read the Budget Speech, I would feel my coming here today would not be an entire waste of your time. I think we are coming back again and again to that.

How many times have you heard people indulging in this form of mutual self-contradictory argument: "For Heaven's sake, let us keep the government out of business." Then some problem comes up. Did you ever hear those people say, "Well, the Government will have to do that"? I have heard that, again and again. It is the most destructive kind of argument.

Now, in the few minutes I have I want to suggest one or two things. I can only enumerate briefly one or two things that seem to stand out as things that might be done. Maybe they are not the right things. Maybe you can think of far better things. I urge on you we should be thinking of things. If these are not the right ones, let us have others.

First of all, we should hold back as far as possible, all public expenditures for ordinary purposes. That suggestion has been made again and again. There is nothing new about that. I understand during the last war that wasn't done at all. We were spending largely on the war and also spending largely on our own private business.

In the second place there is the question of saving in war-time. You have all probably seen that Keynes, who has been such an uncanny prophet the last twenty years--you remember in 1919, he wrote a book that predicted practically everything that happened on the economic scene-is advocating enforced saving in England. For two purposes: first, it is essential to cut down consumption and release the necessary amount of goods for war purposes; secondly, because he says if you keep consumption down and thereby keep prices down, you will enable people to save and leave in the hands of a large number of people a spending power at the end of the war. Therefore, he puts this idea forward, not merely as an assistance in the carrying on of the war, but as a social good for the meeting of a condition which is going to arrive later on.

I have no time to dwell further on this. I want to make the point that I think saving should not be confined to civilians. There are a lot of young men in the army, many with no dependents of any kind. I leave you to figure out whether it is sensible to feed them, clothe them, house them, give them all kinds of comforts through various organizations, and leave them with about $40.00 a month to blow in. How much better if those men without dependents had enforced saving, by deferred pay, so when the war . comes to an end, then everyone would have a big stake. What have they to show for their $40.00 a month if that doesn't happen? You know the answer as well as anyone. I don't think anyone would accuse me of being unsympathetic to soldiers. That is true sympathy for them.

One other thing. The newsprint industry expanded twenty years ago. It expanded so well that it cleared away many of our forests. It may well be that one of the wisest things at the end of the war is to have reforestation in a big way. Probably a wise suggestion would be to do the by means of advances to companies, repayable over a long term, and on very easy rates, as that means you would have your expenditure in the hands of those who could presumably do it wisely and well.

Now, there are other things I could mention, but I want to leave myself two or three minutes for the one I think is of vast importance, exceeding all the others.

I will mention in passing, immigration. Don't let us forget, in spite of all that has been said of immigration, that good immigrants are priceless assets still. (Applause)

In the second place--I have no time except just to mention it-don't let us take a short time, superficial view of the St. Lawrence waterway. One of the wisest men I know, admitting the short time argument against it, said, "If you take a proper long time argument, and compare with the function of the Panama Canal, many of the short time arguments against it don't seem so convincing."

I come to the housing problem. I suppose it is not an exaggeration to say it was the housing problem that dragged England out by the boot tops. As I told you before, we have all admitted the housing problem has been one of our colossal failures.

I can imagine the economic control of one of the totalitarian states coming into this country and finding a lot of unemployment and I can imagine him saying to somebody here: "No need of housing here?" "Oh, yes, there is need of housing." "Lots of building materials?" "Yes, lots of building materials." "Lots of capital?" "Yes, lots of capital." "Why can't you build houses?" We explain, of course, the reason we can't build houses is twofold. First of all, we have let our taxation on real estate get away out of line. Secondly, building costs, that is to say the wage per hour of the artisans have gone up so high that it makes the cost almost prohibitive and, incidentally, has probably cut down his income by the year, though not by the hour.

I can imagine your controller saying, "I will deal with that pretty quickly. A couple of decrees will settle that." We can't settle it by decrees and thank God we can't, but it does seem an impossible alternative for those who believe in a free economy to say that they can't settle it at all, that it is impossible, that they can't do anything about it.

That is a challenge we are up against, not merely in the building industry but in a much bigger way than that. I have neither the time nor the knowledge to tell you today how that is to be done. I would hope that the Rowell-Sirois Report may now be able to help us. Whether it does or not I would say, to me it doesn't make sense that people who regard themselves as competent and boast of freedom, cannot solve this thing and are left with the dilemma that I believe your totalitarian dictator would regard, if he blew in here, as just stark nonsense.

Now, I have tried to persuade you that this is a problem, that there is a problem here which requires earnest and continuous attention, beginning at once and continuing intensively while the war goes on, whether it is a month or three months or three years.

Now, some people will say, "Leave it to the Government." The ones I quoted before say to leave it to the government, though probably in the breath before that they were cursing the government for interfering with business.

I think there are two reasons for not leaving it to the government. First of all, they are terribly busy and they have not much time to think about this. Secondly, don't let us make any mistake about this, if we leave it to them there is only one way they can do it. That is by regimentation piled on regimentation. Don't let us forget two things. We have some very able men down there. I am speaking primarily of the men in the permanent service. That is not intended in any way as a slur on others. I am thinking of men who day in and day out are there. They have to do the thinking and planning and they are going to be there when governments come and governments go. Those men are doing a good job and they like doing the job and you can't expect that during the war they will not come to feel that the proper way to deal with things is through government control. That is what is going to be happening for the next period of months or perhaps years. If we believe that it should come in another way, by private initiative, by the efforts of the individualist system which has done so much, and which can do so much more, then I say we can't possibly leave it to governments.

So, Gentlemen, I conclude by suggesting to you that at this time our system is undergoing a challenge. You have heard it freely predicted in many quarters that the capitalist system-1 much prefer to call it the individualist system -with its free economy can never survive another war. Well, we are in the war. I don't suppose there is a single man in this room who doesn't believe and hope that is not so. Certainly I hope and believe that it is not so. But there is a hard condition on it. I believe it will not be solved if we leave it to George, and I told you who I think George is. Therefore, I conclude by merely saying to you again that we will need imagination, courage, energy, sympathy and initiative, but the greatest of these is initiative. (Applause-prolonged)

CANON WOODCOCK: Gentlemen, I am going to ask Mr. J. F. Weston to express your thanks to the speaker today. I didn't give Mr. Weston any warning--it was just a sudden inspiration and I thought he would do it well, so I am going to call upon him now.

MR. J. F. WESTON: Mr. Chairman and Gentlemen: I consider it a great privilege that you have given me to express the gratification which I know we all feel to Mr.

Macdonnell for the clear, concise manner in which he has expressed himself upon the problems which concern us all, and the lead which he has given us to follow, the lines which he points out to be our individual duty if we would play our part in preserving the system in which we all believe. He has chosen his topic well to make us mentally follow a straight line in the confusion of the complex public opinion that we share in common with all people. He has shown clearly the direction in which a practical result may follow if we play our part well and do not let up in this time of conflict. Finally, I thought the close of his speech indicated the responsibility which rests upon each to play our part in preserving this thing which we feel worth while to have entered this war for and which we are determined to carry on to a successful conclusion.

I was very pleased and inspired at his urge that each of us never fails to remember the responsibility which rests upon us as citizens if we would continue the privileges we enjoy of citizenship and democracy.

We thank you, Mr. Macdonnell, for the thoughts you have given us, for the plain and concise manner in which you have presented this and for your kindness in coming to us today. (Applause)