Some After-War Problems—Unemployment, Immigration, Reparations

Mr. President and Gentlemen,--I cannot sufficiently express to you my gratitude for the warmth of the reception you have given to me. Your Chairman has added to my embarrassment by much too flattering an account of my career. He has referred in particular to two episodes amongst the vicissitudes through which I have come. (Laughter) He has reminded you that I was once a professor of Moral Philosophy and Metaphysics (laughter) in a Welsh University. Well, when I left that institution the students were so good as to show their appreciation of my services by presenting me with a walking-stick. (Laughter) The other office to which he referred was the post, indeed a very distinguished post, of Chancellor of the Exchequer. In that office I had more friends than I have ever had in my life; but I very soon discovered that they were all after

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Rt. Hon. Sir Robert Horne, P.C., was educated at Glasgow University, and called to the Scottish Bar in 1896. He was Third Civil Lord of the Admiralty, 1918; Minister of Labour, 1919; President of the Board of Trade, 1920-21 and Chancellor of the Exchequer in 1921 under the Lloyd George Ministry.

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my money, (laughter) and when they did not get it they rapidly changed the character of their convictions. (Laughter)

Now, I have very great pride in the opportunity which you have afforded to me of speaking to this great Club today; but I am rendered somewhat diffident by a remark which was made to me by one of my neighbours, and which I am sure is perfectly accurate, that I am facing today a body of the most acute minded people who exist in the whole Dominion of Canada. (Laughter and applause) I had hoped that it might be my privilege to speak to you upon some considered topic, but, since I have come to Toronto, I have been so much immersed .in other things that I feel today somewhat like the Scotch minister who arrived at the church for his morning services without his sermon. He explained his predicament to his congregation by saying that in this instance he would just have to tell them whatever the Lord put into his mouth, (laughter) but he said, "I hope I will have something very much better to say to you in the afternoon." (Great laughter) Perhaps on the next occasion, if you ever allow me another, on which I have the opportunity of addressing you, I will be able to tell you something much better than today.

But I say in all sincerity that it is a great joy and gratification to me to be back once more in Canada. I feel as much at home in Canada as I do in my native country. (Hear, hear, and applause) Perhaps it is because we Scotchmen think that we have more intimate ties with this great Dominion than any other section of His Majesty's subjects. (Hear, hear) I am not sure whether that is just the Scotch pride. It is true that we happen to have a certain self-complacency in Scotland with regard to our achievements in different parts of the universe, and particularly in the southern part of the United Kingdom. (Laughter) But I am sure it is the right spirit. I told an American audience last week of a conversation which took place between a Scotchman and an American. After they had discussed their business the Scotchman said to the American, "And what part of the world do you come frae?" And the American said, "Why, I come from the greatest country on God's earth!" (Laughter) And the Scotchman said, "Well, it seems to me you have sort o' lost your accent." (Great laughter)

But, Gentlemen, it is in all sincerity that Scotchmen do feel a very special tie to this great country. From the time we were schoolboys we have read in our school books stories of the early life of those who settled in Canada and started to build up the foundation of this great Dominion as we see it today; and Scottish names in this connection are household words to all of us, (hear, hear) the names of Donald Smith and George Stephens we have known all our lives, and the name of John A. Macdonald, as one of Canada's great statesmen, lives in the annals of the British Empire. (Applause)

It is eleven years since I have previously been in Canada. Incidentally, it was the most expensive tour that I have ever taken in my life. (Laughter) It occurred at a time when enthusiasm in this country was perhaps somewhat hectic, and I was more affected than a cautious Scotchman should be by the exhilaration of your air and the plausibility of your prospectuses--(laughter), and on that occasion I very nearly settled in Canada, not because I wanted to stay with my money, (laughter) but because I was so entranced by the great movement which was taking place in this young country. Since then, great events have happened which have changed the whole fortunes of the world. We have had a war which has convulsed the whole fabric of our civilization. Great empires have fallen in catastrophic ruin. Some kingdoms have entirely disappeared; some nations have undergone a process of resurrection; and in these great events Canada has risen to the full height of her destiny. No more glorious pages exist in the history of any nation than those which describe the deeds of Canadian soldiers in France. (Applause) Their heroism, I am sure, is a hallowed memory to all of us, and the service which they rendered to the Empire can never either be estimated or forgotten.

But today we are looking at the world with totally different eyes. You, yourselves, observe from this far off point of some detachment the events which are proceeding in Europe. I am glad to think that Canada has recovered with so much rapidity from the effects of war. There is here today an atmosphere of enterprise and of movement. Your trade has been getting better. I observe that your exports now very greatly exceed your imports, (applause) a condition which few countries today in the world enjoy. Your agriculture has become more scientific, and today is more productive than it has ever been. You are discovering immense mineral resources in your country which, from day to day, are producing greater wealth for the community. Canada is building well in the present, and so far as I can judge the future is in your grasp.

But there is one thing which I observe some comment is being made upon by those who are reflecting upon your industrial and commercial position. We had a very interesting speech by Mr. Cameron, in connection with the meeting of the Board of Trade of Toronto, I think, and he pointed out that Canada today was suffering from a lack of labour in industrial districts, and he urged upon his brethren of the Board of Trade the necessity of some immigration policy. Indeed, I think today it is true that some parts of your population are even now migrating to the United States of America, looking for higher wages, which are afforded there, in connection with some of their industries. Well, Gentlemen, in the beneficence of Providence it seems always to happen that what one part of the Empire lacks some other part of the Empire is able to provide, and I think that at this moment we could provide you with a very good solid stock of British immigrants, (hear, hear) who would help to build up your country, and to keep alive all the traditions which we so much prize. (Hear, hear, and applause) It may have occurred to some of you to think that, during the war and since the Armistice, migration from Britain had almost ceased. Prior to the war very large numbers of our citizens migrated from year to year, going out to distant parts of the Empire, to seek the kind of life which they desired, and for which they were suited; but since the war that flow of British citizens to other parts of the world has come almost to a stop. In the war of course it was impossible, but even since the war men have had a natural reluctance to leave the country for which they had been fighting, and there has been a certain tie to the old home life which has put a sentimental impediment in the way of those migrations. But economic facts make it impossible for us to maintain that attitude, and it is inevitable that large numbers of our citizens in Great Britain must find their opportunities of livelihood in other parts of our Empire. The British Government in the course of the last two years has provided very considerable sums of money to encourage this process. The great Dominion of Australia has already taken active steps on their side to bring about the immigration of British subjects from Great Britain to their land; and I greatly hope that Canada, which has now awakened to its own necessities in this respect, will meet the British Government in the formulation of some scheme which will bring mutual benefit to us and to you. (Hear, hear, and applause)

Now I hope you will forgive my dwelling for a few moments on one of the results in Britain of this stagnation of migration. You know that at present we are suffering from a great deal of unemployment. That unemployment has been emphasized by the fact that we have got a far larger number of people remaining home in Britain now than our community can afford to keep. We have today a million and a half people who are unemployed. Since the Armistice the State and the local authorities between them have spent 200,000,000 pounds sterling in order to relieve unemployment. You can imagine what sort of a burden that has been. Your Chairman has referred to the position of the British tax-payer. The burden of unemployment is one of the greatest which today that unfortunate individual has to carry. But there is one aspect of it which I should like for a moment to expand, because I find that there is a great deal of misapprehension both here and in the United States with regard to it. I find that the money that has been spent has always been regarded as something in the nature of a dole. Well, immediately after the war, there were certain payments made without any consideration at all, but for a considerable time now the money which has been distributed as unemployment benefit has been paid out of the insurance scheme to which employers and workmen and the State all contribute. That system it is completely erroneous to describe as a dole. It is something for which the workman pays his share, and to which he is entitled when the misfortune of unemployment comes upon him. (hear, hear) I should like that that should be fairly understood, and that this opprobrious term of receipt of a dole should not be used in that connection, because nothing makes a man a pauper so soon as to call him a pauper, (hear, hear) and nothing degrades a man so much as the receipt of relief for which he has not paid. Accordingly I venture at this moment, with your permission, to make that correction of an idea which I am afraid is only too widespread. You may say to me, "Well, what are your prospects of getting rid of this burden of unemployment?"--because indeed it is our greatest burden today. Well, gentlemen, you know as well as I do that the great markets of Europe, to which we previously sent large portions of our goods, are today entirely unable to purchase the commodities which they used to buy from us. Russia used to be one of our great purchasers; today Russia, which we have seen as a shambles, has now become a desert. The great empire of Austria is bankrupt and broken. All small states of Europe in the East, that used to be considerable customers of Britain, are now in a position in which, through lack of resources, they are no longer able to buy from us. To that circle of helpless nations Germany is now rapidly being added. Germany, as you know, was a customer of Britain to the extent of something like 70,000,000 pounds sterling in a year. today Germany and France are in a relation to each other which makes it quite impossible to believe that Germany can long be a purchaser from anybody; and if matters go on in the way in which at present they are being conducted nothing but ruin seems to face that great nation.

The circumstances are perhaps a little difficult to explain to the people, who do not seem to be immediately involved in them, but, if you will forgive me for a moment, I should like to explain to you what precisely is the position of the Government of Great Britain in this important crisis. It is not that we have sympathized with Germany that we have taken up the attitude which has been adopted; and it is not that we have failed to sympathize with France, because indeed we are fully conscious of all that France has suffered, and all the devastation of those regions which mean so much in wealth and in prosperity to her populations. But, looking at the problem as a practical problem, we have been forced to disagree with the attitude which France has taken. If it were desired to break up Germany finally and forever, then the policy which has been adopted might be a feasible one. I do not say it would be the best way, but it might be a feasible policy. But if what you desire to obtain is reparations from Germany, then we on our part do not believe that any considerable sums of money can be obtained from Germany by this process. I shall ask you just to keep two considerations in mind in that connection. One country can only pay a debt to another out of one fund, and one fund only. It must come from the difference between the value of her exports and the value of her necessary imports. You may say, if you like, in regard to a country, that she is importing things which are not necessities, which are luxuries, and stop these; but once you have arrived at what the amount of the necessary imports is, there is no other fund out of which one country can pay another except out of the difference between the value of her exports and the necessary imports. I am sure that is plain to everybody. Well, now, obviously you can then gain nothing by putting a cordon of custom houses round one section of a country and taking a toll in that cordon of the goods which are passing from that section of the country into the other section of the country, because you are only depleting the amount of material which is available in that other section of the country for making the goods which she exports. What you are taking off at one end you are losing at the other. Indeed, you are doing worse than that, because by the mere fact of impeding the flow of materials, which are necessary to build up the export trade, you are depleting the chance of making that wealth through which you can get payment. And there is another point to that. All that you collect along that customs line is paper marks. At the export end, what you collect is foreign currencies for which those goods are being exchanged.

Now, if you will bear with me, there is one more consideration. It has been repeatedly said, and it is often complained, and this is a point which I find most people discover a difficulty in comprehending, that Germany is defeating her creditors by exporting her capital to other countries. Now, I venture to lay down this proposition, that no means have ever been devised, or ever can be devised, by which you can prevent the export of capital from a country which is allowed to trade. If you do not allow Germany to trade, then you create a condition of stagnation, and you can collect no reparations at all. If you allow her to trade, as soon as she can send goods out of her country, there is no means which any human creature can devise by which you can prevent the payment for those goods remaining in an American bank or any other bank outside of the country that they choose to leave it in.

What is the method of keeping German capital in Germany? There is only one. It is by inducing the German capitalists to believe that Germany is a place where his capital is safe. (Hear, hear) If you proceed to assess upon mines and forests you will make every German who owns any capital at all say, "This is no country for me; the sooner I get my capital out of it the better." (Hear, hear) Now, these things may seem harsh when you begin to say them to the creditor. After all, Britain is a great creditor, and we have to look at it from a practical point of view. If you cannot restore German credit you cannot expect to get any payment of reparations out of Germany. In some ways it seems a tragic thing that in order that the world may be set right again Britain should be forced, in a sense, to look on at the setting up of her most formidable trade competitor. In a sense that is just as menacing to us as a great commercial nation as the fact that France and Germany should grow strong again from a military point of view. But, Gentlemen, if anything has been taught to the world by this war and the consequences of this war, it is that you cannot eliminate from a group of civilized nations any great community such as the German people without suffering throughout the length and breadth of the world. (Hear, hear, and applause)

Now, for one single moment further, I should like to say a word upon the British proposal which was made by Mr. Bonar Law at Paris the other day. I find that there is great confusion of mind upon that topic, and I have seen the most fantastic figures put forward as representing what was involved in those suggestions. I find that those figures are largely based upon a complete fallacy. I find, for example, that whereas you took the amount that Great Britain was to get upon the basis of its future value, the amount that France was going to get was assessed upon the basis of its present value; and you can imagine the differences created by a thirty-years-period in assessing future and present value. In the same figures I find that whereas a second series of bonds which were mentioned in the proposals was -assessed, in the case of Britain, at its full value, so far as the French 'estimate was concerned it was estimated for them at something of no value at all. I found also that in estimating the amount that Britain was to get, there was added all that she is owed by her debtors in Europe at the present time--as if these sums had already been paid or were likely to be paid. (Laughter) Now, the British proposal, roughly, was this. We took the view that the amount which was assessed as to be paid by Germany was much greater than her capacity to pay it; and that sum was written down from about 6,600,000,000 pounds sterling to 2,500,000,000 pounds sterling. It was provided that she should have four years of a respite, or moratorium, to enable her to re-establish herself, because without such a period there was no possibility of German trade recovering, and German finances being stabilized sufficiently to allow her to pay anything at all. After those four years she was to pay 100,000,000 pounds a year for two years; 125,000,000 pounds a year for a further two years; and at the end of ten years, 166,000,000 pounds a year until the end of thirty years. Roughly, that was the scheme, and certain proposals were made with regard to the cancellation of French debts and so on.

In the result it worked out like this, I just give it to you in a broad survey. It would have resulted in Britain getting an amount which was less than the sum of our debt to the United States of America--which we are going to pay. (Hear, hear, and loud applause) France would have her debt to us cancelled-cancelled; and if she had paid off the half of what she was going to pay, and her debt to America, she would nevertheless have had left over, after payment of her debt to America, a sum of about 400,000,000 pounds sterling; and if America, let her off her debt, as we were doing under this scheme, she would have had something like 1,100,000,000 pounds sterling to the good. Now, you will see the most fantastic misrepresentation of those figures; but in the broad result that is what was proposed in the British scheme.

You may ask, "What is the result now going to be?" Well, Gentlemen, he would be a rash man who would try to predict what the effects in Europe of this last move are likely to be, but I see nothing but difficulty and trouble. I see no hope of succor coming from the markets of Europe for many years to come; and even the heart of every loyal Briton would be affected with despair if it were not possible to look to the great Empire, of which, after all, the British Islands form now a very small proportion, (applause) for, after all, our greatest markets have not been in the countries of Europe, but they have been in British dominions, (hear, hear) and that is the sphere of development to which we now look with hope and with confidence.

It is the mission of such a Club as yours to keep us all closely in touch with each other, to lend each other mutual support and encouragement. (Hear, hear) I am sure that we shall stand together now, in these difficulties of peace time, as we stood together in the war. (Hear, hear, and applause) We shall not forget our obligations to each other. Indeed, if we will reflect upon the men who died in the war we should be false to their example if we failed in any way to support the great institution of which we are all so proud to be members. There will always ring in my ears the inspired words of a Canadian poet who, I think, died in the war:

(Loud and continued applause)

HON. N. W. ROWELL expressed the thanks of the Club to the speaker for his masterly address.