(See front cover)
Ottawa is scarcely less a royal capital than London. Officially George V is styled "By the Grace of God, of Great Britain, Ireland and the British Dominions beyond the Seas, King." He is therefore in fact King of Canada though never addressed as such. In Canada His Majesty is represented by Governor General the Earl of Bessborough. In Ottawa sedate Lord Bessborough sits on the "Crown Chair." In Rideau Hall he holds a vice-regal reception at which Canadian ladies are "presented." He flies a symbolic flag with a blue field on which appears a gold crown.
The Earl of Bessborough is not so much interested in gold as in diamonds, railways and margarine. When appointed Governor General of the Dominion of Canada he was board chairman of Britain's gigantic Unilever Ltd. (margarine), chairman of Brazil's coffee-carrying San Paulo Railway, deputy chairman of De Beers Consolidated Mines (South Africa), a director of some 30 other corporations. Thus His Excellency is a Big-Business Governor General. Last week he prepared to open for His Majesty in Ottawa a Big Business meeting, the Imperial Economic Conference.
Problem. As no one knows better than Lord Bessborough, the Mother Country is a comparatively small, densely populated manufacturing area. The dominions, on the contrary, are comparatively large areas, rural and sparsely populated but with "infant industries" of which they are proud, hopeful. Since the Mother Country is suffering from unemployment (many of her plants being closed), and since the dominions buy a great deal of manufactured goods from outside the Empire, cannot an imperial agreement be made for the dominions to buy proportionally more manufactures from the Mother Country and for her to buy proportionally more raw materials and food from the dominions?
Such in essence is the problem, complex and stupendous, which called into being last week the Imperial Economic Conference.
"Best Customers." In nearly all past years the U. S. has been Canada's best customer, and vice versa. Why should she buy English motor cars when Detroit is so near? Surely the U. S., where there is also unemployment, is the ideal and adjacent place in which to fulfill Canada's manufacturing needs. Unfortunately for the U. S. things are not so simple as that.
There is the U. S.'s sky-high Hawley-Smoot Tariff, to the enactment of which Canada retorted with retaliatory tariffs (TIME, Sept. 29, 1930). Already this mischief, furthered by Depression, has gone so far that U. S. exports to Canada have fallen thus:
1929 $948,446,000
1930 659,094,000
1931 395.648,000
1932 (1st quarter) 78,232,000
Simultaneously Canadian exports to the U. S. have fallen thus:
1929 $503,496,000
1930 402,350,000
1931 266,297,000
1932 (1st quarter) 48,478,000
To put it baldly the two "best customers" have been growing steadily worse. Result: a degree of Canadian irritation at the U. S. (shared by other Dominions) which is favorable to success for the Imperial Economic Conference.
Cross Currents. Why should Canadians buy either English or U. S. motor cars when they can buy such things as Mc-Laughlin-Buicks built in Canada by the Dominion affiliate of General Motors? Why should Australia buy British steel when she has expensively erected a mighty steel plant to fabricate her Sydney "Dream Bridge," now complete (TIME, March 28).
And why should the Mother Country antagonize so huge a buyer of her manufactured goods as Argentina by agreeing to buy Canadian in preference to Argentine beef? The King's subjects have invested over $1,500,000.000 in Argentina. Dare they antagonize that Latin American government? Dare they risk reprisals which could be launched against $1.500.000,000 of British property actually in Argentina? And what about Brazil? What about the Earl of Bessborough's own coffee-carrying railway in that South American state?
Multiplied by myriads such perplexing trade factors as these will give the Imperial Economic Conference plenty of hard, sweating, secret work.
Secrets & Farmers. That the Conference proceedings will be as secret as British ingenuity can make them was frankly stated by the Canadian Government last week. Rich & pious Canadian Premier Richard Bedford Bennett based this course upon the precedent set and stated by the Imperial Conference of 1923. "that at meetings of this nature, where questions of high policy and of the greatest consequence to all parts of the British Commonwealth are surveyed and dealt with, it was of the first importance that the representatives present should feel able to speak among themselves with the utmost freedom and in a spirit of complete confidence."
Days before the Conference met last week, Ottawa swarmed with lobbyists and dickerers from all parts of the Empire and the world. Some 5,000 farmers from Ontario and Quebec were marching upon Ottawa. They proposed to meet in monster caucus, formulate demands for measures to enhance crop prices, present these demands to the Conference.
Conference Agenda. Canadian Premier Bennett, a Conservative closely allied with Conservatives of maximum wealth in Great Britain, was personally responsible for bringing to Canada his Big-Business friend the Earl of Bessborough as Governor General. Lord Bessborough is the first vice-regal occupant of Rideau Hall to have been chosen by George V on the advice of a Canadian premier. He is the fourth Irish peer to be Canada's Governor General. As a businessman Lord Bessborough was said last week to have collaborated in drafting the "Provisional Agenda" which Premier Bennett made ready for the Conference after consulting all His Majesty's governments in all parts of the British Commonwealth.
The agenda heads are:
"A. — General Trade Questions.
"1) Examination of aspects of general trade and tariff policy and administration affecting Empire trade. . . .
"2) Commercial treaty policy with re spect to foreign nations. . . .
"3) Consideration of the appropriate means of effecting inter-imperial economic cooperation. . . .
"B. — Monetary and Financial Questions.