The Romance of Intra-Empire Trade

MR. CARREL was introduced by the Vice-President, and was received with applause. He spoke as follows: I hardly think that there is a Quebecker who has ever visited Toronto or Ontario, that has not had the feelings that I have at this moment in thanking you most heartily for the kind words which you have expressed in favour of our province. There is no doubt in my mind that if we could get together more frequently we would certainly have less trouble and misunderstanding. (Hear, hear.) This has been well demonstrated in the past, and so I think, as a representative of one of the two older provinces that we are talking about, if we can meet on common ground in any national question, we can be assured of the full support of the whole of the Dominion of Canada. Coming from the ancient and historic city of Quebec, I very much appreciate your inviting me to speak to you on an imperial subject of such importance in the life of our Empire.

I will endeavour to give you a glimpse into the background of Intra-Empire Trade which is now an absorbing topic in our minds. What is Intra-Empire Trade? How does it concern us, and whereby do Canada and the Empire stand to benefit, will be some of the questions which I shall endeavour to answer.

Intra-Empire Trade does not mean, as some people imagine, that the Dominion of Canada, for example, must sacrifice her economic rights in favour of the Mother Country, any more than it means that the Mother Country must buy Canadian wheat in order to do Canada an economic favour at a loss to the British consumer. It does not mean the creation of a tariff-walled Empire, subsisting upon and within itself. That may be a possibility but it is not a possibility within the bounds of practical politics.

In order to realize that, one has only to remember that each individual unit of the Empire, including the Mother Country, enjoys complete economic autonomy; that is, the right to trade wheresoever it is deemed most advantageous to do so. In Canada, as elsewhere, the tariff exemplifies that right, whether in your opinion the tariff is applied wisely or not. That complete autonomy is the recently acquired and closely guarded jewel of dominion status; and any attempted interference therewith would be doomed to the failure it deserved. The British Empire is a ring of individual nations revolving freely upon the principle of patriotic unity. Nothing must be allowed to interfere with that noble conception. In any event business is one thing and sentiment another, and business conducted upon a sentimental basis is first cousin to charity. Yet strange as it may seem, the great bond of imperial sentiment has its origin in business, or rather, let us say, in the trading instinct of the British people. It used to be said, and with obvious truth, that "Trade follows the flag." One of the primary purposes of the IntraEmpire Trade movement is to demonstrate that by still following the flag the trading possibilities of Canada, and the other units of the Empire, can be developed, not only more fully and more efficiently than they are, but also more safely and sanely than by any other means.

The Intra-Empire Trade movement means in the second place that Canada and Great Britain have markets for each other's goods, in a great variety of interests, which, through lack of proper economic and industrial study, are directed elsewhere or retarded by irritating barriers. And in the third place, it means that the easiest and most accessible market is not necessarily the best market or the most durable market in the end. Reference to the actual and projected tariff upheavals in the United States should give ample point to that contention. Intra-Empire Trade, as understood by us today, is a movement for increased trade within the Empire. It has made more progress within the past twelve months than at any period in its history.

How does this concern us? As Canadians we have a right to assume a place in its conception and consummation in common with other nations of the Commonwealth. It is the duty of every Britisher to give it his full consideration and support. Furthermore, if we Canadians can be of any assistance to the Motherland or to any of the units of the Empire, we should not hesitate to display a willingness to lend our services.

In the matter of defence against outside trade invasions, there is sufficient kinship between us to create a desire to unite for protection within our boundaries. This fact was too well demonstrated in the late war to arouse any doubt in the present world industrial struggle.

These were my reflections in April last when I left Canada for the British Isles on a mission of only a few days, which was, however, prolonged to ten weeks. My departure was at a time when our friends to the south were preparing to increase their tariff and curtail fifty to seventy-five millions of dollars of our goods from going into their country, notwithstanding the fact that we were buying two dollars' worth of goods for every dollar we were selling. With every other Canadian I was considerably disturbed by this action. It recalled what happened in Quebec when our neighbours increased the duty on fish, some years ago. It led us to seek a more lucrative market for our salmon, and now our American friends, much to their dismay, have to pay a higher price for this delicious commodity. (Applause.) I may say, Gentlemen, that we are unable to supply the demand in Great Britain that has been created by, the arrival of our salmon, and the Cold Storage Department in Quebec inform me that if they had had a million pounds last year they could have sold it, and the reason for not having a million pounds was due to the fact that we have not sufficient cold storage plants on the north coast, and also on the Gaspe coast; so that one of my recent efforts in the past two or three weeks has been the organization of a company to see if we could not build these plants. (Applause.)

This experience inspired an idea with regard to increased trade within the Empire. It was the opinion that we could largely and easily increase our trade in the British Isles by closer study, economic education, and the removal of the irritating barriers now retarding this trade.

It is rather an interesting incident in connection with my address that, when I got on the ship and formulated an idea in connection with this subject, I practised it on one of your exPremiers, the Hon. Mr. Drury, whom I have very much pleasure in seeing sitting at this table today. (Applause.) I want to say to you what I have already said to other bodies--that I obtained a great deal of information as I fired my heavy guns at him and he would reply. We walked miles and miles around the deck of the ship. He removed the rough edges of my temperament, in arriving on the shores of Great Britain, so I can thank him for that help.

Commercial education seemed to me to be the only logical and sane route by which to realize increased Imperial trade. If we could consolidate our best commercial brains in one central spot within the Empire, we could at least immediately start to improve our trade relationship. We do not commercially understand one another; we are not industrially united; we lack co-operation and a proper economic understanding, and all this aids the foreign trade invader. If we are going to resist foreign importations we must get together.

Such a body as I have referred to, having the support of all political parties and all governments, could function after the manner of the League of Nations. It would make valuable suggestions to the Empire Governments. It would eradicate the many irritating obstacles to European trade expansion. It would co-ordinate the efforts of many small associations to meet foreign competitors. If we could assemble a hundred business men from all parts of the Empire to sit in conference independently, non-politically and voluntarily, to consider and weigh all suggested plans in order to find a true, sane and acceptable policy for increasing trade among us; if we could do all this outside of political, capitalistic and labour influences; if we could get this organization together we could re-organize our under-privileged factories, suffering from war impairment or foreign competition, and give them a chance to exist.

This was to be one of our first constructive efforts. It could be put into operation in a very short time, and would give employment to many thousands of workmen now taking insurance doles and losing contact with their past occupation. This financial aid was organized and rendered to under-privileged nations and peoples by the assistance of the League of Nations. Why not by a British Commercial League or Board for increased trade within the Empire? (Applause.) My statement does not mean that the League of Nations supplied the money or the funds, but it was through their influence after investigation that they were able to raise a fund at one time of fifty million dollars to help the people in Greece. And from that movement other large sums have been raised to help other nations, and to the credit of these nations, these borrowers, I may say that the last information I have from the League of Nations is that a large portion of this money has been repaid with interest. (Applause.)

All these and many other ideas were included in my plan. Lord Melchett, Lord Beaverbrook, Sir Harry McGowan, Sir Campbell Stewart, Sir Robert Hadfield, Hon. Mr. Amery, Mr. Evelyn Wrench, Proprietor of The Spectator, the Editor of the Times: Mr. Locock, Director of the Federation of British Industries, and representatives of almost all the other Dominions were interviewed. I may say that in interviewing the representatives of other Dominions they one and all said to me, "This is all up to Canada; we welcome such a movement as you have expressed, and we will be glad to follow wherever Canada leads." The subject of Intra-Empire Trade was absolutely dormant when I arrived in England. Not an editorial line appeared in any of the many dailies, weeklies or monthlies. Two young men volunteered their services, and together we formed a small committee. Articles were prepared for the press, principally interviews on our aims and objects, and generally with me. We began to receive columns upon columns of publicity in the leading newspapers throughout the British Isles. Our idea was launched; would it stay afloat or be sunk in the whirlpool of public opinion? Would it eventually survive? It was then in the midst of a critical and much disturbed people, traditionally accustomed to taking care of themselves under all circumstances. Perhaps the idea coming from a Canadian might help to keep this vital question out of politics-a very difficult thing in Old England. Time alone could tell.

One of my first acts with regard to Canada was to send a telegram to the Premier of this country, asking if it were possible for him to meet the Opposition leader and agree to keep the question out of politics. I imagine that, if it ever comes to an issue in this country, it probably will be kept out of politics, but in any case I would say to you today that I hope it will, and that it should be. (Applause.)

The interviews aroused the imagination of the people. Letters began to appear in the newspapers. This started the public thinking. We used the idea of talking films to feature many of our articles. It created keen interest and drew big headlines.

We maintained that this educational idea, supported by our leading men and women, would quickly arouse our people to the mutual advantage of increasing Imperial trade without alienating our best customers or lowering the prestige and high opinion of Britain's commercial independence, integrity and credit-a point we Canadians must appreciate as a hereditary asset in seeking export markets. In other words a plan acceptable to all parts of the Empire for industrially uniting it for a greater effort, knowledge, research, and protection had to be found before a real and practical start could be made towards the realization of our aims and ideals. A greater interchange of trade to compete with foreign invaders and to right our trade balance must be our goal. With the use of the talking film we had in mind the carrying of our message to every corner of the Empire, explaining our objects, the necessity for quick action, mutual understanding, and finally a call to arms, for universal Empire trade expansion in a business-like way that would receive the full support, financial and otherwise of every Imperial unit. Our efforts stimulated those who had previously endeavoured to forward ideas in the same direction. It brought into the limelight the suggestion of the Canadian Chamber of Commerce in Great Britain, made in July, 1924, advocating a conference of all Empire associations of manufacturers, to consolidate trade interests. It revived a most comprehensive economic plan for industrially uniting the Empire, conceived by Sir Robert Hadfield, Bt., F.R.S., a distinguished man of science, inventor of manganese and other alloyed steels, and head of one of Sheffield's largest steel works. And finally, after my departure from England in July, satisfied that something had been started, Lord Beaverbrook brought to the surface his policy of free trade within a tariff wall Empire. This in turn was followed by Lord Rothermere who, while backing up Lord Beaverbrook's plan, did so with reservations; in fact he rebelled against placing a duty on foodstuffs.

Here, then, was a most forcible array of powerful influences all at work awakening the Empire to the vital necessity of meeting the serious problems of foreign invasion of trade competitors. The two Peers with their widely circulated newspapers soon deluged Great Britain with this plan, and for a time we felt we were completely swamped. But we did not give up; we kept our flag flying and were heard of in the House of Lords, the House of Commons, and throughout the Canadian and British independent press. We were fighting to let the British people know that, if a plan for increasing trade within the Empire was to be conceived and put into operation, we in Canada and the sister Dominions must be given a voice in its conception. Our appeal received a most effective response. A large section of the political following of the two parties in England are now beginning to concede that not only are we in the right, but that they desire to prove the fact by endorsing our educational and non-political plan. The Rt. Hon. J. H. Thomas, who, when in Canada last summer, said that the question of IntraEmpire Trade was a political affair, has evidently modified his opinion. You will remember that one of his first moves when he returned to London was to seek the Bank of England and solicit financial aid to relieve and modernize some of England's obsolete factories. Mr. Thomas returned to England; he did not recall the McKenna duties; he did not join the Free Trade Crusaders: he did not attempt retaliatory measures against the foreign countries invading the British Isles. So he called upon the financiers and asked for aid to resuscitate industry in order to fight competition. This was the first move in our projected plan.

The Free Trade Crusaders brought their plan before the House of Lords and the House of Commons for an expression of opinion, and it was turned down in both Houses. But in the course of the debates which followed, our plan was referred to on many occasions. Lord Cushenden devoted a large portion of his speech to it. Here again we triumphed with the support of a majority of all parties in the greatest parliament in the British Empire, if not the world, notwithstanding that we were insisting that this industrial question would never be settled or productive of desired results by making it a political football to be kicked off at every election. I spent several hours with Mr. Winston Churchill when he was in Quebec last summer. We discussed Intra-Empire Trade matters. You will remember that nowhere in his Canadian speeches did he preach tariff retaliations as a means of increasing trade within the Empire; but he did advise that this all-important subject should be settled by the business men, not alone of the British Isles but of the Empire, just as a board of directors would solve their problems at a round table. This was another endorsation of our ideas.

But of still greater importance is the recent stand taken on this question by Mr. Stanley Baldwin, who has given his full support to the principal idea of our aims and objects, namely, that whatever action was taken it should be outside of politics. Here is what the London correspondent of the Canadian Press says: "Chief among the planks of his (Mr. Baldwin's) programme was the proposal of arrangements between British industries and corresponding industries in the Dominions. These arrangements, he emphasized, should be made between the industrialists themselves and not by politicians." But the greatest victory of all in our campaign for increased trade within the Empire is to be found in the recent Empire report of the Federation of British Industries, one of the most powerful industrial bodies in the British Isles. It virtually embodies all our educational features as "conclusions and recommendations to the British Preparatory Committee for the Imperial Conference."

This, then, is our reward for persistency of purpose in the face of overwhelming odds. We were fighting a Canadian battle on British soil, because an attempt was being made to impose an imperial policy without dominion participation. Even worse, it was publicly said that, once the British people had been won over, the Dominions would be the next propaganda battle-ground. We maintain that this is a wrong attitude in an endeavour to weld the Empire commercially, and we believe we have proved this fact to a large following, comprising some of the most prominent British statesmen of all political leanings, which leaves the main object of our endeavour--to increase trade within the Empire-so much easier to accomplish.

The Canadian Gazette in London recently said on this subject: "It will never do to proceed along lines of Empire partnership which fail to give to the manufacturing interests in the Dominions their place in the sun." Our plan calls for whole-hearted co-operation of all imperial industrial interests, with the financial support of all governments and all political parties. While many organizations exist throughout the Empire to aid, encourage and develop trade, there is no one body co-ordinating the separate efforts of the smaller associations, so that we lose the benefits and advantages of the United States, Germany, and probably other countries.

Anon-political Intra-Empire Trade conference will result in greater and improved industrial and agricultural relationships between Canada and the British Isles. I believe that the finding of markets for our products is just as important as stimulating production, and the higher the prices we obtain for our agricultural products, the more satisfied will be our people to remain on the land, and the greater the prosperity of Canada. (Applause.) By improving the quality, quantity and continuity of our products we can find a higher-priced market in Great Britain.

Among other subjects which might be discussed at an IntraEmpire Trade conference such as we have suggested are the following:

1. The removal of many irritating barriers now retarding trade within the Empire.

2. The creating of better understanding within Dominions on the economic value of buying within the Empire, through educational propaganda in all the industrial centres at which British statesmen--and when I say British I mean representatives of all the nations within the Commonwealth--and leaders generally of all shades of politics would be heard in person, or through the talking film on the subject of increasing trade within the Empire.

3. The promotion of a drive of manufacturers and business men to adopt or improve upon the modern methods of lowering manufacturing costs, aided by aggressive advertising and salesmanship.

For the foregoing reasons it is essential that a new organization be convened, representative of all interests which would control a staff of efficiency experts to supply Empire maufacturing concerns with scientific surveys and reports on their plants, with the object of bringing more of these up to the present-day efficiency of our competitors; keeping a constant survey of world markets with immediate notification to interested manufacturers; adaptation of an economic cable code--which I possess at the present time, to present to such an organization--a staff for schooling salesmen in tariff customs, languages and knowledge of Empire and foreign markets; a statistical bureau for world trade information second to none; assisting large corporations in establishing branch factories; exchange of our business men to better assimilate and perfect Empire trade understanding and co-operation; in fact, a clearing house for every branch of detailed information, equal to or better than that possessed by our rival competitors and for the benefit of all Empire traders. (Applause.)

It is very difficult for the British manufacturer to change his methods of merchandizing, or to comprehend that the political autonomy of the Dominions has undergone a change in the last few years. He still clings to his old associations, and believes he can continue business according to the old traditions. While some may come into the open and show a desire and willingness to cooperate and discover a common ground of understanding, and find a sane solution for increasing trade, a large number still hold the belief that the British manufacturers must go on manufacturing for the whole Empire. They fail to note the immense strides Canada has made in this direction in the past 45 years. For while our export trade to the United Kingdom has grown from 36 to 426 million dollars, that to the United States has grown from 34 to 500 million dollars. In addition there is an invisible revenue of around 250 to 300 millions coming to us through the tourist trade, which in a very few years will reach a much larger figure if we preserve our game, fish and other attractions. (Applause.) Just in passing I would like to draw your attention to the wonderful work which we are doing in regard to fish and game preservation in the Province of Quebec. I might say that this movement was started some years ago by my calling together a group of men in the City of Montreal. We had at that time about 150 of the leading citizens, and I explained to them that I thought the only way to improve the situation was by education, and today it has beep proved beyond all measure that that was the only and proper course to achieve the results that we all expected at the time. We have now 2,500 members of a new organization which is doing splendid work in that respect.

But let us look at our export trade to other foreign countries. This has grown from 3 to 347 millions. We are selling almost twice as many goods to foreign countries as we are to the United Kingdom. The largest increases have taken place in the last few years, with every prospect of further increases in the near future. Are we going to endanger this export trade by entering on a trade crusade which may create a breach of understanding with our best customers? Rather let us work harder to sell more goods, and influence our imperial fellow manufacturers to co-operate with us in this effort. Let us get together on economic lines and, if necessary, carefully and prudently dip into tariff matters a bit later, but when we do, let us do it with unity of purpose and decision. The Empire must protect her present industrial position, and in this respect the Motherland should follow the lead in her Dominions, and first defend herself against the tariff walls of her competitors. Unless the tariff regulations of all nations come under an independent body like the League of Nations, I believe it is problematical how long this artificial restrictive trade system will survive without turning the world upside down.

I am apprehensive of Russia and other countries, like the Argentine. With their cheap and disciplined labour, how are we going to compete? This is a question which I hope such an organization as we are proposing to convene will give our Empire economists an opportunity to study, so that they may suggest a line of successful defence. The United States are giving of their best brains, experience and goods, toward the building up of Soviet Russia. Russo-American trade is now greater than is was before the war. It is to be hoped that the Americans do not apprehend or fear any grave danger from their commercial assistance. If the present Russian economic five-year plan of development succeeds (and visits of American economists to Russia say that the first year has), then Russia may flood the United Kingdom with wheat and other supplies in the not far distant future. Will the population of the Motherland be willing to pay her Dominions more for her foodstuffs than she can buy them for in Russia and other foreign countries, is a question I leave to you to answer. This is a serious situation to contemplate. Just as one item of importation to the British Isles, may I refer to the fact that the United Kingdom imported 15 million dollars' worth more lumber last year than previous years. To give you an idea of how Russia is increasing her sales, even in the British Isles, you may be surprised to hear that even last year, Russian pulpwood was delivered and sold in the Province of Quebec and in the United States, and it sold at very nearly equal figures with that of our own producers. And I have heard quite recently that the American firm who purchased the Canadian cargo have renewed their contract, and more shipments will be brought to this country this year.

If the people of the British Isles took full advantage of the preferences which Canada has extended to them and reciprocated, they would possess all the advantages of a freer trade within the Empire without eliminating their foreign customers. While Canada's best customer may in time be the United States, we should not lose the splendid opportunity of developing and maintaining markets elsewhere; and I think that our producers and manufacturers are far from taking full advantage of their opportunities in the British markets-a fact which they will regret some day, in the same manner as the British manufacturers and capitalists regret not taking a greater interest in Canada years ago. We can profit by such experiences; and it is up to our manufacturers to lose no further time in securing a greater portion of Britain's markets before they are lost forever. Canada possesses one of the most efficient staffs of trade commissioners within the British Isles. They are conscientious and patriotic workers, but their hands are tied by the lack of response and co-operation from the Canadian shippers. It is a deplorable, example of lost opportunity to increase our sales abroad and thus increase our production at home. By greater effort in this direction we would at least dispose of larger quantities of our farm products and help our farmers.

A trade commissioner a few days ago writing to me said: "You will be rendering valuable assistance to Canada generally and to our trade and propaganda organization in the United Kingdom, if you would impress upon Canadian exporters the great opportunity which exists in this country for many Canadian products, and the vital necessity of greater co-operation and support upon their part in order to take full advantage of the openings offered here. I am glad to read how completely you dealt with this aspect upon your return to Canada. I am hoping that sustained response will follow in due course. At the moment, however, definite results of our effort on this side are greatly nullified by the absence of adequate Canadian stocks of many Canadian products. Notable instances, according to our reports, are bacon and canned fruits and vegetables."

Mr. W. A. Wilson, Canadian Agricultural Products Representative in Great Britain, says that the reason why Canada is not getting a larger share of the British foodstuff market is that quality itself is not sufficient to win the British market; there must be quantity as well. He maintains that sales contracts cannot be established and maintained in Great Britain unless there is assurance of an adequate supply of the commodity sold, be it bacon, eggs, meat, salmon, or other food. This testimony and many others which I received, together with my own experience and impressions, caused me to suggest on my return to Canada that Canadian manufacturers and shippers of Empire products should own and control a modern warehouse in London to store, bottle, can, and pack, Empire goods sent over in bulk, and to house and accommodate the representative staffs and salesmen, and that Empire products be sold direct to the consumer at the lowest possible cost through an aggressive advertising campaign. By selling direct to the trade, establishing a Canadian trade mark, we can give the farmers higher prices for their produce and encourage greater production at home.

In concluding my address, I want to say that I believe that much good will come out of the present propaganda for, increased trade within the Empire. It will help to remove the ignorance, apathy, and misconceptions from some of our British and Canadian manufacturers. It is they who have everything to gain by an improvement which may follow in the wake of our plan to help Canada to a greater portion of Empire and world trade. To assist in this object, capitalists must retain the control and development of our natural resources and continue to build up large reserves in our industrial corporations, to reassure the full and lasting confidence of our small investors. We must keep more of our investment funds at home to develop our country, while at the same time keeping our eye on the world markets. Canada has an enviable future, but her high destiny cannot be achieved unless every Canadian is willing to assume his responsibility. We are developing and producing many natural resources required throughout the universe, and it is our duty to manufacture and merchandise these rich assets with Canadian capital, administration and salesmanship equal to that of any foreign country. We can do it and do it well. If so, then we have nothing to fear in the present or future industrial struggles. (Applause.)

CHAIRMAN: It is not our custom to have formal votes of thanks, but may I express our very sincere thanks for your very instructive and interesting address. (Applause.)