- The Empire Club of Canada Addresses (Toronto, Canada), 21 Sep 1934, p. 30-43
- Elibank, Viscount, Speaker
- Media Type
- Item Type
- Some words on the success of the Ottawa Conference. Some figures on Canada's trade increases within the Empire. Criticisms levelled at trade agreements within the Empire. Potential future developments in the Empire's Dominions which will help the Mother Country. Criticism in Canada with regard to the development of the agricultural position in the United Kingdom. The system of quotas and duties which is being applied to agriculture in Great Britain and the considerable controversy it has caused. The situation with regard to the production of food in Great Britain. The question of a trade agreement between Canada and the United States of America. Some statistics of trade between Canada and the U.S. The United Kingdom still Canada's best market. Something which affects Empire trade all over the world: the monetary question. The proposal to make a start toward the stabilization of exchanges, of currencies through the formation or the creation of a Sterling Union. The lack of a central banking system throughout the dominions; such situation to be changed by the end of this year.
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- 21 Sep 1934
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- Full Text
- EMPIRE TRADE
AN ADDRESS BY VISCOUNT ELIBANK
Friday, September 21, 1934
At the special Luncheon Meeting of The Empire Club of Canada, held on Friday, September 21, 1934, the guest speaker was introduced by the President of the Club, Mr. Dana Porter.
PRESIDENT: Gentlemen, it is particularly appropriate that the Empire Club should entertain as its guest, Viscount Elibank, who will address us on the subject, "Empire Trade". The members of this Club are generally sympathetic to the idea that a flourishing and sustained trade amongst the nations of the Empire is conducive to general economic stability and our guest of honour today is particularly equipped to discuss this subject. For many years he has contributed in various ways to the public life of the Empire. He has travelled very widely throughout the Empire and has, before this particular trip, travelled extensively in our own country. At the present time he is Chairman of the Federation of Chambers of Commerce of the British Empire and The Empire Club is very fortunate, indeed, to have as our guest of honour today, Viscount Elibank. (Applause.)
VISCOUNT ELIBANK: Mr. President and Gentlemen: I can assure you that it gives me the greatest pleasure to come and address you this afternoon, as well as to come back to this city of Toronto, to one of, if not the most important commercial centre of this great country.
Gentlemen, I am going to confess to you at the outset that I did not come to Canada to make speeches. I came here, at almost a moment's notice, on private business, but as I landed on the wharf at Quebec, a telegram was thrust into my hand, a telegram that I believed might be from a sorrowing wife I had left behind me, but that telegram was from your President asking me to address The Empire Club here. Well, Gentlemen, I accepted that invitation somewhat reluctantly, I admit, because I did not know what time I would have to prepare an address which would be appropriately fitting for such an important club as yours. However, I believed that you would forgive me and excuse me and pardon me if I did not prepare the address which I believed would have been more fitting but if I came here and just spoke to you of some of the thoughts I have in my mind on the subject which is forming the thesis of my remarks.
I must confess in addition that when I got your President's cable, or another upon the following day, asking me what subject I would select, I was just hurrying out of the Ritz Carlton Hotel to an important meeting, so I hurriedly wrote a telegram and I said, "Empire Trade and Cognate Matters". But, Gentlemen, your President has accepted only one part, "Empire Trade", and left out, "Cognate Matters". But I am going to ask your indulgence and supposing I do not concentrate entirely on Empire trade, but speak on certain ancillary matters which I believe are bound up with Empire trade, then I hope you will understand.
Now, Gentlemen, as your President has said, this is not m first visit to Canada. Indeed, the first time I visited Canada was twenty-six years ago, when I was very much younger man than I am today, but just at this time two years ago I was privileged to be present at Ottawa during the whole of those proceedings and at that same time I took the opportunity to travel across the continent and I visited every important city from Montreal to Vancouver and back from Vancouver to Montreal, all north and south, if I may say, of the railway line and, in addition, I was privileged to be the guest of honour of the Canadian Chamber of Commerce at Halifax that September.
Well, Gentlemen, during that progress across the continent I had the greatest opportunity of meeting a great many people and learning a great deal about the potentialities, the resources and the opportunities which existed in;Canada. So, when in the remarks which I make today I do refer to certain Canadian aspects, you will understand that I have taken every opportunity I could to learn something of your conditions.
Well, now, the first thing I want to say is that so far as the Ottawa Conference is concerned, that I believe there are no apologies to be made. My view is that the Ottawa Conference was one of the most successful conferences that has ever taken place, not inside the Empire but within the world. There were nine large entities, if I may describe them as such, represented at that Conference, and within the short space of thirty days, those nine large, important entities came to conclusions upon their trade and commerce which have not only affected the situation since that time, during the last two years, most advantageously, but are going on doing so.
Take Canada: Canada has increased her trade within the Empire enormously since that time. Only this month, yesterday, I saw in a number of newspapers, references to the fact that the August figures of export trade for
Canada had gone up by nearly $11,000,000. But, Gentlemen, this is the most significant fact, of those figures nearly $9,000,000 of that $11,000,000 was an increase in exports to the United Kingdom. (Applause.) Nearly the whole of the other $2,000,000 of exports were within the Empire.
But I do know that there are certain criticisms levelled against these agreements. There are criticisms levelled in the Old Country against these agreements and perhaps more criticisms are levelled than over here because our trade with Canada, our trade with other dominions, has not increased to the same extent as the trade from the Empire has increased with us. But, Gentlemen, that does not disturb me in the least. I, with such knowledge as I possess of different parts of the Empire--and I did at one time live in Australian waters, I lived in South Africa for five years and I know something about this country and I have been in most other countries--have no illusions about the future of these great dominions. I know for sure, for certain, that they have only been scratched; they are just in their infancy and their great futures lie before them. Therefore, if today the United Kingdom, the Mother Country, that has given these great advantages for the moment is not reaping the same reward, nevertheless, I see in the future when these countries, when Canada, for instance, will have developed in her population and her resources--her mining, her agriculture, her timber and so on--that in that time will the Mother Country reap the reward for such concessions as she gave at Ottawa over and above what appeared to be reasonable at the present time. So, as I say, that does not disturb me in the least, nor does it disturb a great many of the real thinking people of vision in the Old Country because they, like myself, have studied these things and see them in their true perspective.
But I know that there is certain criticism in Canada with regard to the development of our agricultural position in the United Kingdom. I know that the system of quotas which is being applied to agriculture in Great Britain has formed the subject of considerable controversy ever here in the light of the agreements which were arrived at in Ottawa because this has meant that the quotas which were arranged at that time have had to be somewhat reduced so far as the export of agricultural products from this country to the Old Country are concerned. But, Gentlemen, I want to put to you the case of agriculture in the Old Country. Agriculture has never been in such a collapsed condition, as it is today. Many farms are almost derelict and I would preface this by saying that, after all, agriculture is the biggest individual industry in the Old Country. Many farms are derelict. The product of these farms is being sold at a loss and farmers and small holders are not able to make their way and many of them are going into bankruptcy. Others do not know how long the banks-and the banks have been very kind-will go on sustaining them.
Well, there is one thing which I do not think is recognized here sufficiently. So far as the production of agricultural products in Great Britain is concerned, we will never be able to farm, as any one can see today, we will never be able to produce sufficient for our own requirements. With wheat, I think it is something like twenty percent, and right along the line except, perhaps, in oats which we grow principally in my own country, Scotland, but all along the line, we can only produce a comparatively small percentage of those products which we require for consumption, both in the homes and on the farms, for feeding stock. So, Gentlemen, there has always been a very large surplus of requirements from overseas and in that surplus, we hope that Canada, Australia, South Africa, will always take the very largest share. But it is important, at least, that the produce which is grown in our country for our own people, that that comparatively small percentage should be sold at a figure in the country which will pay for the labour and for the natural reasonable profit the producer must have upon his labour and that is a problem which we are attempting to deal with through this question of quotas. We have done it successfully with wheat. The only product which is paying the farmer today is wheat. How have we done it? We have said that so far as wheat is concerned that-I forget the exact percentage-from twenty to twenty-five percent of our wheat requirements will be produced in Great Britain. We have a duty on wheat coming in from outside. There is a preferential duty for the dominions. Anything received in the form of that duty is handed over for the purpose of making up the difference of the so-called world price and a price quota which will pay the farmer to grow that wheat. I think it is something like thirty-two shillings or something like that.
Well, Gentlemen, that is the system of quotas and duties and that is the system which I think would gradually be applied through the different products and I do not think that any one of you will quarrel with that. After all, the policy that you must look after your own people first, then the Empire, then your foreign countries, is a policy which has been adopted now practically throughout the Empire and it is even contained in the spirit of the Ottawa agreements, and so long as you know that whatever is over--and that is a huge quantity because it runs into hundreds of millions of pounds, something like three or four hundred million pounds--about a billion dollars--so long as you know that what is over is yours, as far as you can give it, I feel sure you will believe you are getting a square deal. (Applause.)
Well, that Gentlemen, I think deals with that particular question.
As I said at the beginning, the Ottawa Conference took place. There were nine nations and one short month in which they could lay the basis of a plan which they did, and did successfully. Obviously, out of that plan, as time went on, there was bound to arise certain inequalities and difficulties and problems. Now, Gentlemen, next year there is to be assembled in London, distinguished people from all over the Empire, indeed, from many parts of the world, in order to celebrate the Silver jubilee of the accession to the throne of our King, King George V. All of us think--I know that the Federation of Chambers of Commerce of the Empire, so far as their Executive is concerned, and I know that the London Chamber of Commerce also thinks along the same lines, that that opportunity should be taken on that occasion, after those celebrations because the Premiers of the dominions will be assembled in London at that time and it would be the most opportune occasion for having a further conference upon these Ottawa agreements. I only venture here in this City, to throw out that suggestion in support of a resolution which is being moved in London in the course of the next two or three days, at the Autumn meeting of the Association of the British Chambers of Commerce at Norwich, because I hope that it may come to the notice of your Premier and if your President supports that in such remarks as he may make directly, I feel sure, speaking on behalf of such a representative body here, and myself, speaking on behalf of the Federation, and the London Chamber of Commerce, that at least the Government of the United Kingdom and the Dominion might consider the desirability of doing this.
There is one question which has come up quite recently in Canada which, I think, is of enormous importance. 'I observed that at the Canadian Chamber of Commerce Annual Meeting at Winnipeg, which I, unfortunately, was unable to attend although I was privileged to receive an invitation for that occasion, that there came up for discussion the question of a trade agreement with the United States of America.
Now, Gentlemen, I am treading on delicate ground, perhaps, and I am going to tread delicately, and, if I can, diplomatically, and I hope when I have finished that I will have said nothing to which anybody can take objection. I did observe this, to begin with, that the newspapers next day, after this subject had been discussed, had huge headlines: "Reciprocity of Trade with The United States". Well, now, Gentlemen, that made me shiver a little because I cast my mind back to 1911, when I was governing a colony in the West Indies and, I might, say, at that time I was helping to frame the first Canadian-West Indies agreement, I remember the great campaign which waged through Canada and I read a great many of the Canadian newspapers in that time and I remember the fierce political controversies which were aroused here in Canada and in the United States as the result of it. So, I was sorry to see this word once mom coming into prominence although actually I did not disagree with the intention. Actually, I see no more reason why Canada should not have a trade agreement with the United States of America than why the United Kingdom should not have an agreement with Denmark or with the Argentine. Obviously, when we came to Ottawa and entered into our trade agreements, we did not intend to shut out the rest of the world from our trade altogether. That would have been suicidal; it would have been foolish; it would have been unwise; it would have been, I venture to say, impossible, because the trade within the Empire is twenty-six percent of the trade of the Empire and, consequently, we have seventy four percent of the trade outside the Empire. That is taking all the Empire countries together which we have to deal with, whether we like it or no. So there should be a trading agreement with the United States of America on such products, on such articles as you can trade to advantage. I see no reason to object to it, but I do want to suggest this and I say this for my own country, for the United Kingdom. I suggest that every country that is in the Empire, when making these trade agreements with other countries, have their heads turned back, looking at the trade agreements within the Empire, and that they do nothing when making those trade agreements that will harm or damage the trade agreements within the Empire. (Applause).
It would be perfectly ridiculous to say that you could cut off trade between Canada and the United States of America. Here you are with a large imaginary border with the necessity, owing to financial arrangements, of sending millions of dollars weekly over the border and down to New York, in order to pay interest on your loans and so on. You can only do that by payments in goods and services; therefore, the transfer back and forth of goods and services between Canada and the United States is absolutely essential and it is not possible to get along without it.
I only referred to this for that reason but I would like to say just one more word with regard to it. I had the opportunity of reading the most admirably clear and lucid pamphlet which was issued by the Canadian Chambers of Commerce under the aegis of the joint Canadian and United States Industrial Trading Committee which was set up by that body. I found these very interesting statistics: I found that Canada today is Number 2 among the customers of the United States of America and that she is taking 12 percent of the exports of the United States. On the other hand, I found that the United States of America is also Number 2 among customers of Canada, taking 32 percent of the Canadian exports. But then I came to the short paragraph that gave me more pleasure than anything else because I found that the United Kingdom comes first in both cases, taking 39 percent of Canadian exports, and 18 percent of the United States' exports. Well, Gentlemen, that points to the fact that in the long run, the United Kingdom is your best market and the market which you should go on seeking as far as you possibly can.
Now, there is a matter connected with trade which affects Empire trade all over the world. I refer to the monetary question. Now, you Gentlemen, all of whom, possibly, are engaged in commerce in one form or another, have no doubt been worried to death during the past four years,, owing to the questions of exchange, its non-stabilization, its variation from day to day, the change in the value of the currency, the difficulties constantly connected with freight rates and all these matters which center around what I may call the monetary question.
But, Gentlemen, the Federation of Chambers of Commerce of the British Empire have taken great interest, as they must and as they had to do in this particular issue and before our Congress in London which took place two years ago, we had a very expert committee sitting upon this question upon which were representatives, not only of the United Kingdom, but of the different dominions. Well, the result of that committee's findings which were ultimately adopted by the Congress in the Guild Hall was that this main principle emerged. I may say that at that time there was sitting in London the International Economic Conference which was supposed to be considering this question and cognate issues for the whole of the world. But we, as an Empire body, had not very great faith in the results that that Conference was going to bring. We knew the difficulties we had within our own family in coming to an arrangement at Ottawa and we did not believe that that conference, composed of representatives of the whole world, was going to accomplish in four weeks what we had not been able to accomplish at Ottawa, because at Ottawa we were not able to come to any decision upon the monetary question. Well, Gentlemen, we considered this question and as a result of our deliberations we sent out a recommendation from that Congress, urging the governments of the Dominions to at least make a start toward the stabilization of exchanges, of currencies through the formation or the creation of a Sterling Union. I do not mean to suggest that there was any suggestion or idea of changing the currencies of the various dominions or the United Kingdom. The dollar would remain; the pounds, shillings and pence would remain, but that we should have a Sterling Union, that would stabilize the exchanges upon a stabilized parity and start out trading together, knowing at least that our currencies have been brought together and that they were stable and that you would at least know' where you were in that connection.
Well, now, whilst we put forward that proposal, we knew there was one great obstacle to it and that was that at that time the central banking system did not exist throughout the dominions. We had the Central Bank, of course, in London, represented by the Bank of England. There was South Africa which had her Federal Reserve Bank, but in Canada, New Zealand, and Australia, the central banking system, had not been established. Now, all that has been changed. Today, the central banking system exists or will exist by the end of this year throughout the dominions, as well as in the United Kingdom and that is most important in connection with this monetary question because as soon as that is finally done, as it is being done, you will have the machinery, the expert machinery, to discuss these questions of exchange, to arrive at parities and not only to do that but to carry them on and keep them stable.
That was why I, for one, while having no knowledge of the inside domestic policy of the banking system as vis-a-vis a banking system in Canada, was extremely glad to see that Canada had set up a Central Bank because now, Gentlemen, we can go as an entity, an Empire entity to your various governments and say we have got the machinery today and we would like to see the start of a Sterling Union made, at any rate to stabilize one-quarter of the world, so far as currency and exchange is concerned. (Applause.)
But I go one step further. There are certain countries, like the Scandinavian countries, the Argentine and one or two other countries like that who have already allied themselves to sterling and, consequently, if the whole of the Empire comes together we should probably have at least two-thirds of the world and the world's trade to begin with and that must make such an impression, as it would be the most wealthy part of the world's trade, as would force the issue in other countries. I further venture to say this: that that would form no obstacle to your trading with the United States of America because if you take sterling by itself, we have been able in the United Kingdom to keep our exchange more or less even for the last six months with the United States, in spite of the fact of all the troubles and difficulties and chaos which has been found in that country. Therefore, if we had the wider group of the Sterling Union, all the other countries in, and also the Scandinavian countries, it might be easier to keep an even keel with the United States and then, at last, and in probably not a great length of time, the United States would probably enter into a parity agreement with the sterling group.
I do commend this suggestion to you, Gentlemen, who are so concerned in it, who are so mixed up in business and the problems connected with it. I do commend it to you for your thought and if you believe that is right you should bring every influence you can to bear in every direction, in order to attempt to bring it to fruition.
Now Gentlemen, I have transgressed too long but these points which I have been privileged to bring to your notice today are, I believe, the most important connected with your trade matters today.
I once more say how glad I am to come back to Toronto. I hope it is not going to be my last visit because I find that every two years or so, my steps keep wandering back to this country. I want to thank you, Gentlemen, and you, Mr. President, for your kindly thought in asking me here and for the hospitable entertainment which you have given me today and I wish long success to this Club and that it may continue to bear the great influence which it has already accomplished. (Applause.)
PRESIDENT PORTER: Gentlemen, it is very seldom that we have the privilege of having with us, as a guest at the head table, a Minister of His Majesty from the Federal Government at Ottawa. I have great pleasure in calling on the Honourable R. C. Matthews--in so doing 'I am breaking a precedent which has been observed in this Club--to propose a vote of thanks to the speaker.
HONOURABLE R. C. MATTHEWS: Mr. Chairman, my Lord, and Gentlemen: I felt quite concerned for his Lordship when he spoke of not having an address prepared before he came 'here and I was at a loss to know where he would get one. I don't know that I can explain it all but I can tell him now he got part of his address from one I delivered last night. Mine, however, happened to be purely political.
I am particularly interested, as a member of the Government, in the Empire agreements, because I happen to preside over the Department that has to do with exacting taxation, duties and that sort of thing, under the trade agreements which the Chairman described as conducive to economic stability and I would say at this time, are necessary to economic stability. We have a great deal to do with England. His Lordship has said that there have been criticisms of the agreements. That is so and there has been two kinds, as I see them: first, of all, from the standpoint of the broad features he has discussed, but, secondly, because of minor details in connection with putting them into force. I may say to him;, however, that within the last few months these minor difficulties have mainly been straightened out because from the Department over which I preside we sent officers to England, men who were trained in business, men who knew the department's view, and after consultations with our friends abroad, we have now straightened out all the difficulties there have been in the administration of the preferences.
I quite agree with him that these agreements have been conducive to expansion of trade. A short time ago one of the chief industrialists of England came to my office and said that he wanted to meet me. I could not imagine why, but he said this. He said, "Do you know, some time ago and not very long, the word among the industrialists in England was, "Do business, but not with Canada'. Today, it is 'Do business with Canada first.'"
So many of these agreements have been conducive to our prosperity, which I shall not enlarge upon, that even our neighbors seem to be concerned.
I won't mention the United States, unless I venture to tell you this: I do not know whether it happened on his Lordship's ship or not. There was no clergyman on board and a very charming, delightful American was asked if he would take the service on Sunday morning. He consented to do so and when he came to the prayer for our Sovereign King George, he stopped a moment, then said, "And may the good Lord have mercy on the poor President of the United States." (Laughter.)
Mr. Chairman, I appreciate very highly the honour you have given me of expressing our appreciation to his Lordship for his very charming and interesting address. (Applause.)