by Conrad Black
The episode determined King to clean up Liberal organization and fundraising, and he turned to Vincent Massey, whom he disliked as an arrogant snob wallowing in inherited wealth and pretense to cultural distinction. Massey had been offered the post of governor of Western Australia by James Thomas, the British secretary of dominion affairs. King enticed Massey to the position he had in mind for him by suggesting the highly valued commission in London when he returned to office. Massey pompously declared his desire to “help” King, and the party leader sharply pointed out that he didn’t need help, the Liberal Party did, and he was tired of condescending expressions of a desire to help him from people who were no use to him at all. Massey, who was a vain and greedy careerist, asked if he would still be eligible for the London post if he accepted the Australian position while awaiting King’s return to office. King took pleasure in assuring him that he would not. Massey eventually became head of the National Liberal Federation and engaged Norman Lambert as the general secretary, while King prevailed on his former secretary, Norman Rogers, to be a senior policy adviser.
The depression put great pressure on the Canadian Pacific and Canadian National and other railways. Bennett and the railways and canals minister, Robert Manion, set up the Committee on Railways and Shipping, with Robert Hanson as chairman (both subsequent leaders of the Conservative Party), and the committee took evidence, satisfied itself that Sir Henry Thornton, the chairman of the CNR, was extravagant, self-indulgent, and inefficient, and forced him out. (He died, of cancer, penniless, in New York eleven months later.) Bennett established the Royal Commission to Inquire into Railways and Transportation, chaired by the chief justice of Canada, Sir Lyman P. Duff. This commission reported in September 1932 that the two railways should remain separate and maintain competitive pricing but cooperate in all respects to reduce operating costs. Duff, like Bennett, feared a monopoly and its abuses. King attacked all this as a putsch against Thornton and a partisan move to pack the management of Canadian National with Conservative hacks and placate the Montreal financial community. Liberal opposition caused Bennett to introduce his railways legislation establishing a joint supervisory committee for both railways in the Senate, and Meighen put it through and sent it on to the House of Commons, where it passed after a lively debate. It was a creative measure, with representatives of both railways and of the railway workers on the committee.
In response to growing interest in radio broadcasting, Mackenzie King had set up the Aird Commission (John Aird was a retired bank chairman) to make recommendations about this new industry, prompted in part by complaints from the Roman Catholic Church in Quebec about Jehovah’s Witnesses taking to the airwaves to denounce Quebec’s principal religious denomination. This commission urged that seven publicly owned stations be set up in different major cities to compliment the sixty-two private broadcasters already operating. King ignored the report, but Bennett, a more decisive and often more innovative personality than King, was interested in the concept and took it up, encouraged by the Canadian Radio League, a vast umbrella organization of governments and interest groups whose national council included future prime minister Louis St. Laurent and commander of the Canadian army in the First World War General Sir Arthur Currie, now principal of McGill University. There was hostile lobbying from the newspaper industry, which apparently helped motivate Mackenzie King to continue to counsel caution, but Bennett drove on, until interrupted for a whole year by a challenge from the government of Quebec that claimed that granting radio licences was a provincial matter. Bennett had the better of the argument, and he and the minister of marine and fisheries, Alfred Duranleau, who was inexplicably in charge of radio matters, won at the Supreme Court of Canada and successfully resisted Quebec’s appeal to the Judicial Committee of the Privy Council. Bennett appointed a parliamentary committee chaired by Raymond Morand to advise on how to implement the ambition to enter public broadcasting, and that committee’s report was tabled in the House of Commons on May 9, 1932, and embodied in legislation establishing the Canadian Radio Broadcasting Commission that was signed into law on May 26, 1932. The legislsation also set up 5,000-watt stations at Montreal, Toronto, Winnipeg, and Red Deer (to reach Calgary and Edmonton), and planned thirty-two more stations. Whatever one may think of the successor publicly owned radio and television networks in French and English, Bennett deserves great credit for this bold step that put Canada at the forefront of international public broadcasting.
The Ottawa Imperial Economic Conference, originally scheduled for 1931, took place from July 21 to August 20, 1932. It is a sign of Bennett’s forceful personality that he was invited both to host the conference in Canada and to chair it. He pushed his favoured plan of Imperial trade preference as the principal objective, and received general acclaim from the Canadian press and public for the competent and efficient way in which he directed the proceedings. The British government delegates attending dissented from this, as both Stanley Baldwin, the lord president, and Neville Chamberlain, the chancellor of the exchequer, found Bennett stubborn, egotistical, and often rude. At this point, the British government was a ramshackle coalition patched together by King George V himself, whereby the battle-weary Labour prime minister, Ramsay MacDonald, was propped up by a much larger group of Conservatives led by Baldwin, frequently the acting prime minister, and Chamberlain. Chamberlain had proposed tariff increases early in 1932 but agreed to defer them until after the Ottawa conference. As the conference approached, Bennett relinquished the post of minister of finance and handed it over to former Nova Scotia premier Edgar Rhodes.
Bennett commissioned a good deal of economic research prior to the conference, and one of the documents that emerged described the history of American branch plants in Canada, the number of which had increased from 259 in 1922 to 964 in 1932, with the investment that accompanied them standing at $540.6 million. Nearly 25 per cent of all manufacturing wages earned in Canada was earned by employees in these American-owned plants. While this raised questions about sovereignty, Canada’s gross domestic product declined from $6.1 billion in 1929 to $3.5 billion in 1933. Per capita income fell in the same period by 48 per cent (44 per cent in Ontario, but 72 per cent in Saskatchewan48), and the unemployment rate rose from 3 per cent in 1929 to 30 per cent in 1931. In the United States, the industrial sector of stock market averages had declined by more than 90 per cent. Bennett got a lot of bilateral tariff reductions at Ottawa, but was unable to “blast [his] way” into a comprehensive plan of Imperial preferences. Stevens proved an energetic and often effective promoter of foreign trade in these very difficult times.
In November 1932, the United States elected Governor Franklin D. Roosevelt of New York – a sixth cousin, but by marriage a nephew, of Theodore Roosevelt – as president. He defeated President Hoover by seven million votes and 57 to 40 per cent of the vote, and installed a regime that he styled the New Deal. Roosevelt deftly reorganized the collapsed banking system, guaranteed bank deposits, reopened the commodities and stock exchanges, organized vast workfare programs in infrastructure and conservation projects, introduced unemployment insurance and state pensions through the social security system, promoted both cartels and collective bargaining to raise wages and prices, shortened the work week, refinanced the public’s failed residential mortgages, and generally began to bite heavily into unemployment, reducing it from 33 per cent in 1933 to under 10 per cent in 1940, to practically zero at the end of 1941. Roosevelt rolled the gold standard back to international transactions. The world, led by Great Britain’s abandonment of the domestic gold standard, had abandoned its main currencies to the certainty of inflation, but also embraced a steady policy for softening economic slumps by increasing the money supply (printing money, in conventional parlance). This policy would ramify widely and for many decades, and the end of it has not come yet.
Bennett had done what he could with Empire and Commonwealth trade preference, which, in sum, apart from atmospherics, wasn’t much. The promise to “blast” C
anada’s way into the world’s markets was now hollow and even mocking, as the world’s tailspin continued. It was time for an abrupt change, and the opportunity for such a shift was provided by the new administration in Washington. Roosevelt was a comparative free-trader and was prepared to experiment and change to pull his country out of the downward spiral. The Bennett plan for Canada of substituting Empire trade for continental trade was always illusory and was only embraced after the United States plunged into the dark world of protectionism. Bennett had the gift of not being dogmatic about solutions, and could alter a proposed a course of action by 180 degrees from what he had long advocated, without a pause or the least slackening in his confident, almost bombastically assertive, manner. The new American president had changed the Western world’s psychology, almost as had his former chief, Woodrow Wilson, with his transformation of the unheard of bloodbath of the First World War into a crusade for democracy in 1917. Roosevelt declared that “the only thing we have to fear is fear itself,” and that “our problems, thank God, concern only material things.… There is plenty, but a generous use of it languishes at the very source of the supply.” He laid down an activist, interventionist, partially inflationary attack on the depression. Roosevelt was skeptical of economists, but recognized that the so-called dismal science was half psychology and half Grade 3 arithmetic. He expanded the money supply and deployed his formidable oratorical powers to uplift the country, and he succeeded. Hoarding ended, millions worked in Roosevelt’s ambitious workfare programs, and confidence began to return to the naturally high level it usually seeks and attains in America. It did not require preternatural powers of observation for Bennett to realize that if his mandate could be salvaged and extended, three-fifths of the way through his term, it would have to be by tucking into the American economic upturn and related revival of confidence.
In 1933, Vincent Massey held a policy conference in Trinity College School in Port Hope, near his considerable house, Batterwood, to which he enticed the British Liberal leader, Sir Herbert Samuel; Roosevelt brain trust member Raymond Moley; railway owner, investment banker, New Deal workfare director, and future ambassador to Moscow and London, secretary of commerce, governor of New York, and ambassador at large, Averell Harriman; and others. King was entirely opposed and wanted Massey to stick to fundraising, and while he attended, and found some of the participants interesting, he complained lengthily in his diary of (his own) constipation and reproached Massey yet again as a pretentious snob.49 He continually reminded Massey that if he wanted the London high commission, he should work harder and more effectively for the Liberal Party, and Massey did prove an efficient organizer. King found Massey’s enthusiasm for the new Roosevelt administration distressing, as he regarded the New Deal as far too interventionist. (Once he met Roosevelt and fell thoroughly under the domination of his power and personality, his views would evolve radically.)
Bennett visited Roosevelt on April 27, 1933. (At one point, he was in the White House at the same time as British prime minister Ramsay MacDonald and Premier Édouard Herriot of France; all were seeking the silver bullet of the Roosevelt magic.) After the drear and drudge of the unsmiling Hoover, reduced as he was to reedy assurances that prosperity was “just around the corner” and that “grass will grow in the streets of a hundred cities and a thousand towns” if Roosevelt was elected, Roosevelt was the golden, smiling, bonhomous, and silver-tongued apostle of returning prosperity. Roosevelt signed the Reciprocal Trade Agreements Act in June 1934, but trade wasn’t really the key to prosperity; all the industrialized democracies were in similar condition, and what was needed was stimulation of economic activity in all of them. By moving public expenses from indirect relief to minimum wages for useful work, including flood control and reforestation, Roosevelt increased consumer spending, and the steady shutdown of the economy – which had affected, first, consumer goods and retail, then manufacturing and raw materials – started to rewind upwards, spurred on by Roosevelt’s secular gospel of returning plenty, recited in his extremely artful and persuasive “fireside chats” on the radio explaining the administration’s course.
Bennett’s latest biographer, John Boyko,50 claims that Roosevelt deliberately dragged the trade talks out to sandbag Bennett and assist King. There is no evidence of any such thing, and no effort is made to prove it in the biography. The author’s citation of a diary entry by King on June 4, 1935, makes no such case. An obscure Harvard professor, William Elliott, was visiting the U.S. legation in Ottawa, asked to meet King, and told the Opposition leader that a trade treaty to reduce tariffs was likely. King said he had assumed this and that he thought Bennett would try to use it as his last fling at re-election. It was agreed that the treaty could have been concluded two years before, but it was not clear from this conversation who was judged responsible for the delay, and there is certainly no suggestion by King or Elliott that Roosevelt, as Boyko writes, had delayed passage to assist King politically. That, and the companion assertion that Elliott, on behalf of the U.S. government, promised King that the United States would reward Canada in tariff matters if Canada adopted at the next Imperial Economic Conference positions to which the United States was amenable, is not what King wrote and is wildly improbable. King wrote that it was not clear that Elliott spoke with any authority, but that he, and he believed the American government, hoped Canada would promote not only greater trade between Canada and the United Kingdom, but between both those countries and the United States.
Roosevelt had strongly emphasized what he called “the policy of the good neighbor” in the hemisphere, and had acted accordingly, relaxing restrictions on the sovereignty of Cuba and withdrawing the Marines from countries where they had been deployed by Republican presidents. There is not one shred of evidence in the Roosevelt archives or those of his foreign policy officials that he favoured any party in Canada or ever sought to influence Canadian politics. This is a wild sky-ride by a sympathetic Bennett biographer driven to outright fabrication, presumably to help explain the impending political demise of his subject. (Boyko’s is an interesting and generally a good biography, but this aspect is anti-historical.)
In August 1933, Bennett had chaired the World Wheat Conference; Canada, the United States, Argentina, and Australia all agreed to try to strengthen prices by reducing production. Bennett was doing his best, but conditions were continuing to deteriorate. In July 1933, a committee Bennett had set up headed by Britain’s Lord Macmillan, who had performed a similar function in Britain, went on tour across Canada, seeking opinions on the virtue of establishing a central bank. The Canadian chartered banks opposed the step, for obvious reasons of resistance to regulation, but in its report made public in May 1934, the committee favoured a central bank for reasons other serious countries had judged sufficient, and enabling legislation was adopted in July 1934. In September of that year, Bennett installed the very intelligent and successful choice of Graham Ford Towers (1897–1975), the thirty-seven-year-old general manager of the Royal Bank, as governor, a post he occupied with distinction for twenty years. Again, Bennett showed himself a decisive and pioneering leader, though in this case he had no significant opposition from King, or even Gardiner’s angry farmers or Woodsworth’s discontented workers and their academic champions. Bennett also did his best with the advancement of the project for the canalization of the St. Lawrence and the Great Lakes to permit large ocean vessels to sail to the heart of the continent. But after very skillful negotiation with Ontario, Quebec, and the United States, the project stalled in the tenebrous thickets of competing American interests, and particularly squabbling between New York, Philadelphia, and Boston against Chicago, Detroit, and Cleveland. Even Roosevelt was unable to break it loose before the next Canadian elections. Again, Bennett had demonstrated great tactical skill as a negotiator and vision as a builder, and deserves credit for the effort, which he generally did not receive when the St. Lawrence Seaway was finally opened twenty-five years later.
Bennett had begu
n to be impressed with Franklin D. Roosevelt about the day he was inaugurated and turned the current of public affairs with his inaugural address. But Bennett presaged (and did not emulate) the president’s Civilian Conservation Corps by opening camps for single unemployed men, ninety-eight camps initially, in British Columbia, but for only two thousand young men, in the autumn of 1932. Within two years, the number of people engaged at any one time surpassed 11,000, and by 1936 more than 170,000 people had lived and worked in these camps. They were in wholesome natural surroundings, but a significant number soon objected to what they regarded as unduly Spartan quarters. A widespread movement of objectors started to agitate in April 1935 for better living and working conditions, and the program was compromised by infiltration by communists and radical worker organizations, although the camps had always been represented as emergency facilities to move hardship cases to salubrious surroundings where they were safe and cared for, but paid below the minimum wage. The camps also were victimized by the division of powers in Canada, and this was a concurrent jurisdiction. It became a truism that the provincial camps were preferable to those run by the Department of National Defence. The inhabitants ignored the government ban and founded the Relief Camp Workers Union. One of Bennett’s officials, General Andrew McNaughton, got ahead of his leader, rounding up all sorts of chronically unemployed and sending them to what were redesignated as camps of detention. Despite the benign and even generous character of the camps, Bennett’s enemies were winning the public relations battles and convinced the people that the camps were for the inconvenient victims of Bennett’s economic policy and run with inhuman severity. The Relief Camp Workers Union flourished.
