Empire Trade
The Empire Club of Canada Addresses (Toronto, Canada), 2 Oct 1930, p. 221-229
MacAulay, T.B., Speaker
Media Type
Item Type
Being proud of the resources of our Empire. Reasons why these resources are so undeveloped. The need for markets, tariff barriers and preferential markets for surplus products. Contrasting our position with that of the United States. The Canadian policy of preserving our own markets for our own people. Thinking sectionally and not nationally in Canada. Advantages created by distances through diversity of products, with example. The U.S. example of what can be done by co-operation with other countries, for instance Puerto Rico. The need for the British Empire to put into place some scheme of Empire co-operation as that proposed by Lord Beaverbrook. Lord Beaverbrook's campaign for Empire Free Trade. A discussion of Empire Free Trade. A consideration of advantages to Canada of trade co-operation. Looking forward to the time when our manufacturers are ready for tariffs to be lowered. The question of preferences.
Date of Original
2 Oct 1930
Language of Item
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Full Text
2nd October, 1930

VICE-PRESIDENT STAPELLS Introduced the speaker, who was received with loud applause, and said: It is indeed a very great pleasure for me to have the privilege of addressing this Club, and to meet such a splendid gathering is particularly gratifying. I think it is appropriate that I should speak to you on a subject which is today of the widest Empire importance--trade cooperation within the Empire--a subject which is in all our thoughts at this moment, and on the satisfactory solution of which depends the maximum of prosperity of every part of the Empire.

I propose to speak only from the dollar standpoint. We are all proud of our Empire; we are never tired of telling that it comprises nearly one-fourth of the land surface of the globe; that it stretches from the Arctic Ocean to the Equator, and then south again; that the sun never sets on the King's Dominions. That is all true. The resources of this vast area are enormous, and extraordinarily diversified; in agriculture, fishing, mining, forestry we have resources probably greater than those of any other nation of the whole world, even including the United States. (A Voice--"Right.") We have a right to be proud of our Empire's resources; but let me ask the question, are we equally proud of the way in which we have developed them? Are we satisfied? Why are the resources of the Empire so largely undeveloped? What every part of the Empire needs for its maximum ideal development is a market; and in these days tariff barriers and preferential markets for all its surplus products.

Let us contrast our position with that of the United States. There they are developing their resources as an economic unit, and in consequence they are wealthy, prosperous, progressive and enthusiastic. As a contrast, all the Empire is divided into more than thirty sections, and each section has a tariff not merely against the rest of the world, but against the other parts of the Empire; that is the position in which we find ourselves. The Mother Country, even with regard to most matters, adheres to the policy of free trade, allowing other countries to reserve their markets for themselves, but to ship their surplus manufactures into Britain, and take away from Britain to foreign countries the employment which the people of Britain need.

It is true that we in Canada think rather differently, and have adopted the policy of preserving our own markets for our own people; but I would like to point out that, even so, we are thinking only sectionally and not nationally. The people of the United States, as a rule, think nationally, as a unit, whereas we of the Empire are chiefly thinking sectionally; and that applies to us in Canada. Let us ask ourselves what the position would be if the people of the United States should act as those of the British Empire are doing. Suppose that New York and the New England States had a tariff barrier against the rest of the country; that the central and southern States had similar barriers; that the Pacific Coast had yet another tariff barrier against everything coming from east of the Rocky Mountains; would the people of the United States be as populous, as prosperous, or in as good position in any way whatever as they are now? And yet, gentlemen, that is the very position that we of the Empire are in; we are divided up in just that way. It seems to me that the time has certainly come for us to think in terms not of Canada alone, or of any one section alone, but in terms of the Empire as a whole and of its trade possibilities as a whole. (Hear, hear.) We should do this for our own pockets, if for no other reason.

It is quite true that it is very easy for the people of the United States to think as a unit, because their land is continuous from the Atlantic on the east to the Pacific on the west. It is the division by sea that makes barriers, at least sectional thinking, and they have no such division; there is no point where a line can be drawn. As it is, all their people blend right into one another, and naturally they must think as a unit. Suppose that from the Mississippi River right through to the Rocky Mountains there was sea instead of land, then we would have a position somewhat similar to that of the Empire. Does anyone believe that the people of the eastern half of the United States or those of the Pacific Coast would have their position improved if they had tariff barriers each against the other? The question only needs to be asked.

I would be the very last to argue that distances do not create difficulties, for they most certainly do; but distances also create advantages by diversity of products. As an illustration, take the case of the British West Indies. That market is worth far more to us than would be a market of a similar quality of people in the northern part of this continent, where they would be producing the same kind of goods that we produce. They would be competing with us, whereas by being in the tropics they are complementary to us. They produce what we require, and we produce what they require; we do not compete, but are complementary. Each can give the market to the other, and each can make the other more prosperous. So when we talk of distances, let us not forget that they create advantages as well as difficulties.

The United States gives us not only an illustration of unity in thinking, but an example of what can be done by co-operation, even with the tropics. Between Porto Rico and the United States there is absolutely no tariff on either side, any more than there is between the states of Maine and Florida. In Porto Rico the tariff, exactly similar to that of the United States, is levied against imports from any other part of the world.

What has been the result? In twenty-four years the gross exports from Porto Rico increased nine and one-half times, and the imports into Porto Rico increased eight and one-half times; and of these imports ninety-two per cent. came from the United States, which has done her full share, and has succeeded in making Porto Rico prosperous, while the latter, in turn, has done her full share in making the United States prosperous. That is a case of ideal co-operation (Applause) because, in a case like that, the increased prosperity of one party enlarges its purchasing power, and thus enhances the value of the market to each party, and makes the other more prosperous.

It seems to me that we ought to be able to take a leaf out of the book of our American friends. I wonder if we all read that remarkable statement made a short time ago by James W. Gerard, former United States Ambassador to Germany. He gave the names of fifty-nine men who, in his judgment, were very largely responsible for the industrial and financial development of the United States; and he made the remark that, if those fifty-nine men could be put in charge of the industrial development of the British Empire, they could in ten years make that Empire so prosperous that no other country in the world would be able to compare with its citizens in wealth per capita. (Applause.) He went on to say that he had been over in Britain, and that protection, and nothing but protection, would be the salvation of Britain. He added that even those men he named could not make the British Empire the financial giant which the United States now is, unless some such scheme of Empire co-operation as that proposed by Lord Beaverbrook were put into operation. (Applause.)

I returned a short time ago from the Old Country, and I can tell you that what Mr. Gerard has said is quite right as to conditions over there not being what they should be. On the other hand, I noticed a great change in public opinion. Lord Beaverbrook, with his campaign for Empire Free Trade, as he calls it, has really worked wonders. He has caught the imagination of the people of Great Britain in a way which we in this country little realize.

Whether the present Government is prepared to adopt it now or not, I and others who have been over there got the impression that the people are certainly turning to protection. The people by a large majority are ready to have a tariff on manufacturing, and I think there is a possibility, for the first time, of a tax even on foodstuffs coming from foreign countries. That is being looked upon as a possibility. I do not say that that is as popular as a tax on manufactures, but it is possible if corresponding conditions can be obtained from other parts of the Empire.

Now, when we talk about Empire Free Trade, I think I am right in saying that very few of us older people think that absolute free trade between all parts of the Empire is at present a practicable thing. Personally, I do not. But on the other hand I think there are very few of us now who do not believe that we should go a great deal further than we are at present doing in the way of trade co-operation with the rest of the Empire. (Hear, hear, and applause.) How far we can go I do not know, but I am convinced that we will be able ultimately to go a very great deal further than perhaps any of us at present think is practicable. We have to go step by step, just as we did in the case of the West Indies.

We are getting on very well towards absolute free trade with the West Indies, but we could not have done that the first time; we had to do it step by step.- It is not possible for any one of us to compass this matter in one stride, but step by step we can do it, and the method for us is to take the first step in the way of trade expansion. We have made a certain number of steps in the matter of Imperial preferences and I rejoice at these, but the time has now come when I think we can take a very drastic step, and I hope it will be a long one, in that direction, because the present Imperial Conference is going to be one that will have much to do in the way of making the future of the British Empire. (Hear, hear.)

Now, let us consider for a moment what would be the advantages to Canada of trade co-operation in that large measure. I will not say anything for the moment about the advantages to our manufacturers, our lumbermen, or miners; but think for a moment of the advantages to our food producers. Do you realize that Great Britain imports $5,000 worth of food stuffs for every minute of every twenty-four hours of every day of the entire year? Now, what would a substantial preference in such a market as that be worth to our people? Those figures give one a little vision of what is possible.

I would point out that even that is only a beginning, because we have conveniently the tropical parts of the Empire as well. The West Indies and West and South Africa could be made prosperous by our giving them a preferential market for their products in Britain and Canada, and in return having a preferential market with them, not merely for our manufactures but in particular for our Northern foodstuffs. Those markets in Britain and in the tropical parts of the Empire have a value almost without conception. Now, do we want that market? I think the people of Great Britain are more ready than ever before in their history to consider these things.

But I would point out that if we want that market we must give concessions of equal value in return. (Applause.) No one-sided arrangement is possible, and even if possible it is not desirable. If we must get, we must give. Any arrangement arrived at must be for the benefit of all parties, (Hear, hear) and it is for us to say just what arrangements we can have. The object of real cooperation is to make every part and every section of every part of the Empire more prosperous.

I would like to emphasize this point-that the way to prosperity does not lie along the line of beginning to injure our own manufacturers. We must face the difficulty. That means that in our negotiations we are not going to lower the tariff between Britain and Canada to an extent that will seriously cripple or injure our Canadian manufacturers. That is not the right thing, and is not to be thought of; yet even in regard to that we must begin to think nationally instead of sectionally. We must remember that an inter-imperial tariff between Great Britain and Canada will work in two ways, not merely in one. When the time comes that Great Britain will have a substantial tariff of her own against the rest of the world, then the tariff between Great Britain and Canada will not merely handicap British manufacturers in Canada and work to keep British goods out of Canada, but do not forget, gentlemen, that it will also work in the way of keeping Canadian maufactures and Canadian goods out of that protected market in Britain.

Now, our manufacturers are not yet ready to see the tariff reduced to any extent that will cripple them, even in regard to this inter-imperial tariff between them and Britain; and until they are ready I do not think we should do it. But I look forward to the time, if we get a real tariff in Britain and a real preference, when our own Canadian manufacturers will themselves ask that the tariff be lowered. They will look longingly across that barrier to that old market in Britain, and they will be made to realize that they have just as much experience and energy and just as much good machinery as other people, and they will want to get into that market, and they will desire that tariff lowered. But until that time comes, let the tariff stay at a point where they are satisfied it will not injure them. That is another case where we must go step by step. The first step may not be as long as we would like, but it is in the right direction, and is a beginning. Our subject must be not to transfer any of our Canadian manufacturing to Britain, or any British manufacturing to Canada, but the production, in Britain and Canada, and all other parts of the Empire, of the tremendous list of goods, including foodstuffs, that are now imported from outside the Empire. It is not a case as between Canada and Britain; it is Canada and Britain combined, and so arranging that inside of the Empire we can produce as large a proportion as possible of these things.

That is a question of preference. It is not necessary that we should abolish the inter-imperial tariff between Canada and Britain in order to give a preference that will be effective. What we want is a substantial preference, sufficiently high to be effective, so as to enable our own Canadian, British and other Empire manufacturers and producers to produce everything that can profitably be produced within the Empire, and which at present is being imported from outside. Then, prosperity will come to every part, and thus the real time of Empire unity and Empire prosperity will have begun. (Applause.)

That preference can be given quite as well by increasing the general tariff against outsiders as by lowering the inter-imperial tariff. The point is, it is a preference which producers within the Empire will have against the rest of the world; that is the decisive thing; then the inter-imperial tariff will gradually reduce. I have a vision of a time when between Great Britain and Canada, or between any part of the Empire and the West Indies, for instance, or any other part of the tropics, we can have absolute free trade; and between Canada and Britain I would hope that the inter-imperial tariff might be cut down to, say, one-fourth of our present recently-increased status, with several concessions made on specific articles on each side. If we had that we would have a beginning of co-operation to develop the Empire and bring prosperity.

This idea of full trade co-operation between the different parts of the Empire should commend itself even to free traders. It must be obvious to everybody by this time that world-wide free trade is an impracticable and impossible dream, never so much so as at this moment, when the whole tendency is toward higher tariffs. But while that is impossible, if we can establish cooperation among people comprising about one-third of the entire population of the world we can have conditions about as nearly approaching free trade as is at present practicable. (Applause.) Even free-traders should realize that such Empire co-operation comes nearer to their ideals than anything else that is practicable.

When we once make the firm of John Bull & Sons a commercial partnership from which every one of the partners will draw prosperity, we will have solved not merely the financial problems of the Empire, but we will have gone a very long way to solve all Empire problems, for we will have the desire and the will to do so. (Applause.)

There is a tide in the affairs of men which, taken at the flood, leads on to fortune, but which, if neglected, all life's after-days are spent in shallows and shadows--I am not certain that I have the exact language, but that is the substance. (Laughter and applause.) That tide in the affairs of our Empire is nearing its flood now-not quite at the flood, but getting near it--and we will have to decide whether we will take it at the flood and let it lead us on to almost unbelievable prosperity, to unity and greatness as an Empire such as we at present cannot realize, or whether we will let it pass by, thinking sectionally rather than in the broader way, with the rest of the years of our national life to be spent in shallows and shadows. (Loud applause.)

The Chairman voiced the thanks of the meeting for the interesting and inspiring address.

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Empire Trade

Being proud of the resources of our Empire. Reasons why these resources are so undeveloped. The need for markets, tariff barriers and preferential markets for surplus products. Contrasting our position with that of the United States. The Canadian policy of preserving our own markets for our own people. Thinking sectionally and not nationally in Canada. Advantages created by distances through diversity of products, with example. The U.S. example of what can be done by co-operation with other countries, for instance Puerto Rico. The need for the British Empire to put into place some scheme of Empire co-operation as that proposed by Lord Beaverbrook. Lord Beaverbrook's campaign for Empire Free Trade. A discussion of Empire Free Trade. A consideration of advantages to Canada of trade co-operation. Looking forward to the time when our manufacturers are ready for tariffs to be lowered. The question of preferences.