It is my impression that, while we are reasonably fortunate in having in Canada a considerable literature in the history and law of the constitution, we have not, as yet, achieved a comparable product on the humbler level of constitutional practice and procedure. There have been notable exceptions but, in the main, this is true. It may, of course, be due to the taciturnity of those who are engaged professionally in the business of government. In any event, because of this lack I have been encouraged to attempt this mechanic's view of the mechanism of executive government in motion—in the hope that it may assist others in more scholarly endeavours.

One of the effects of the war upon Canadians has been to make us more conscious of our international financial relations. The rapid changes during the war, bringing with them problems which demanded immediate solutions, have radically altered Canadian economic relations with the rest of the world, and have made for a new awareness of the implications of these changes and the new responsibilities accompanying them. The war showed how adaptable nations can be under the pressure of circumstances, but the ability of human beings under pressure to adapt themselves to their environment often outruns their ability to understand thoroughly what is happening, and to make the more fundamental adjustments which new situations require. The full significance of war-time changes on our balance of payments and international position will probably not be entirely clarified for some time to come, but new potentialities have been revealed of previously unplumbed depths of capacity.

Along with the revelations of productive capacity came new experience with the financial aspects of Canada's international economic relations and the currency problems which are inherent in the structure of the Canadian balance of payments. Being closely allied to internal finance and the larger questions of the economic mobilization of total war, these international financial factors may have been overshadowed at times. But the full significance of the war-time international relations of the Canadian economy should not be overlooked, for they clearly show the extent to which full use of Canadian productive facilities is dependent upon external and special demand, and provide further evidence of how closely geared general activity in Canada is to exports. Studies of national income and expenditure show the place which the net export of goods and services has in the maintenance of national economic activity. So long as the Canadian economy maintains its present structure, it will be highly dependent upon the stimulus of external demand, since income generators like internal investment and consumption do not appear to have the potentialities under present circumstances which would permit them in themselves to maintain Canadian production at a high level.

The United States and Canada have had a more or less parallel economic development throughout their histories and they have emerged from World War II as the two most important creditor nations of the world. It is not surprising, therefore, to find that their foreign economic policies and objectives are similar in character. Our countries are the leading champions of liberal trade policies and of a world system of multilateral payments. They constitute the vanguard in the fight against economic blocs and restrictive exchange and trade practices. Not only is a large portion of the foreign trade of both Canada and the United States dependent upon a system of multilateral payments but trade between Canada and the United States requires settlement by means of a Canadian surplus with third countries.

The differences in our approach to international economic problems stem largely from the difference in the relative importance of foreign trade in the two countries. In 1938 Canada's total foreign trade amounted to nearly 40 per cent of her national income, while total exports and imports of the United States were only 8 per cent of United States national income. On the other hand, United States exports in 1938 were three and a half times the value of Canadian exports and the world supply of United States dollars has been generally recognized as the most important single factor in world trade. (I believe that in the future when we speak of a “dollar shortage” it will not be necessary to differentiate between United States and Canadian dollars.) Canada, therefore, has the greater immediate economic interest in world trade, but the United States has, in a sense, the greater responsibility. Canada must adjust her economy to a given international economic environment while, at the same time, co-operating with other countries in the creation of a more favourable world environment. The primary concern of the United States must be with the environment itself. Needless to say the task of our administration in promoting a worldwide liberal trade programme would be far easier if United States foreign trade were 40 per cent of our national income instead of less than 10 per cent.

The problem of multilateral international trade looms large in the present plans for the new world economy. The International Monetary Fund and the International Bank for Reconstruction and Development as well as the agreement underlying the United States loan to the United Kingdom aim at establishing a workable system of multilateral international trade. Roughly speaking, the principle of multilateralism requires that each country should be guided in its purchases in other countries solely by the price and quality of goods without taking into consideration whether the supplying countries are or are not buyers of the produce of the country in question. It will be seen that the operation of such a system in balancing foreign trade may create serious difficulties for those countries which pursue a policy of maintaining full employment. Each country at full employment will require a certain volume of necessary imports. Now it is by no means obvious that it will be able to secure under a multilateral trade system a level of exports which will provide it with a sufficient amount of foreign exchange to pay for the volume of imports required at full employment. The country concerned may thus tend to achieve more security in its foreign trade by concluding a series of bilateral agreements with other countries relating in some way imports from and exports to those countries. Or it may enter together with other countries into a “regional block” expecting, on the basis of the economic characteristics of the participants, to be able to secure within the block a large part of the required imports in exchange for its exports. (The trade within the block would be operated on a multilateral basis, while the exchange proceeds from exports to countries outside the block would be “pooled” and allocated to the member countries of the block according to a certain schedule.)

Francis Bacon long ago pointed out that to know truly is to know by causes. I think it can be said with some measure of accuracy that no one can know the patent system and be capable of judging its merits and defects who does not possess a reasonably intimate knowledge of its historical foundations and development. As Mr. Justice Holmes observed, historic continuity with the past is not a duty but only a necessity and if this be so, in no field is it more applicable than in a consideration of patents and monopolies. The superficial writers of history, and their slavish imitators, have persisted in painting the picture of an English citizenry groaning under the grievous weight of monopolies dispensed with a lavish hand by the Tudor and Stuart sovereigns to greedy and avaricious courtiers and favourites who milked the populace dry with their monopolistic exactions. They point to the Statute of Monopolies of 1624 as a milestone in the history of English law—a statute forced upon a reluctant king in much the same spirit as the little affair at Runneymede four centuries earlier. That is not an accurate view. Monopolies were not all regarded as anathema either by the common law or by Parliament in those early days. If they were for the good of the realm their propriety was never questioned. From this theory evolved the thought that a new invention or the setting up of a new manufacture was a laudable thing and a grant of monopoly to its introducer by an exercise of the Crown prerogative was a beneficial act and did not offend against the principle of the common law which regarded as illegal and in restraint of trade any monopoly which took away any freedom or liberty enjoyed by the public before the grant. From the genesis of this policy stemmed the great influx of alien workmen to England which, commencing in the reign of Edward III, was responsible for the introduction of a number of new trades and manufactures and the transmutation of England from an economy of importation to one of domestic production of manufactured goods. An examination of the patents for new inventions and manufactures granted by Elizabeth and James I will show that to them was owed in large measure the great upsurge in domestic manufacture which accompanied the policy of self-sufficiency inaugurated by Cecil and pursued under James. Whatever criticism may be offered of a few of the monopoly grants, that criticism fades before an appraisal of the benefits conferred by the introduction, under the spur of monopoly patents, of the important inventions and manufacturing which began to appear during the Tudor and Stuart periods.

I do not propose to discuss here the problems of the transition from war to peace, or how unions can help to get full employment in the first place. I am concerned with the more fundamental problem of the place of unions in a society which has achieved full employment in peace-time, without sacrificing any of the essential freedoms, and which wants to keep both full employment and freedom. I am assuming that full employment involves planning. I am assuming also that unions are not just nuisances but, in one form or another, permanent and desirable social institutions. Can we plan production without planning wages, hours, and conditions of work? If full employment involves planning these also, where do the unions come in ? Must they sacrifice their traditional freedom to bargain collectively on behalf of their members, and suffer a sea-change into something, if not rich and strange, at least very different from what they have ever been before? Or can the community do this part of its planning through collective bargaining? Can we continue to have purely sectional bargaining, plant by plant, industry by industry, or must the various unions act as a unit according to a general wage policy laid down by some central organization? Must trade unionism change its functions, or its structure, or both?

These questions have been widely discussed in Britain, and to some extent also in the United States; in Canada, as far as I know, hardly at all. If we mean business when we talk of full employment, especially full employment in a free society, it is high time they were. For they are not by any means minor questions. Mrs. Wootton goes so far as to say that “Of all the possible points of conflict between conscious planning of priorities and traditional freedoms, the regulation of wages is likely to prove the most stormy”; and of course in this context “wages” include hours and conditions of work—not only what is paid, but what it is paid for. In Canada, freedom to bargain collectively can scarcely be called one of the “traditional” freedoms; for most Canadian workers it is still a recent, hard won, and imperfect conquest. But it is none the less prized for that, and it will not be easily surrendered, even as the price of full employment. For of all the freedoms, this is perhaps the one that comes closest home to the ordinary worker.

The subject of industrial relations was never of more vital importance than A at the present time, not alone to those directly involved but possibly to our whole economic and social life. It requires but a glance at the daily newspapers to indicate to thinking people that something is wrong, very wrong, with the human relationships in too many phases of North American industry. I am not suggesting that the blame should fall on any one group in industry. Good industrial relations are a joint responsibility, a two-way affair, just as any friendship. Happy industrial relations are just like happy marriages. Success in either of these two important fields of endeavour depends on how sincerely we want success, and how hard we are prepared to strive to attain that objective. Good industrial relations, like happy marriages, are no accident.

Industrial relations have been in a state of flux and evolution in recent years. Interest in that field was greatly stimulated during the war. In the war period we largely submerged our differences in our concentration on the job in hand, the forced fellowship of a nation in peril. Now, in the critical period of adjustment, the accumulated strains of the war years are coming to the surface. Our collective failure to anticipate, and adequately solve them is not only threatening to blot out our vision of a better post-war world, but is preventing our recovery and delaying our return to the higher standards of living which we all seek.

The most significant economic events of the past twenty years in the world at large, were the boom, the depression, the re-armament, and the war, and the lesson of this precarious period, more than of any other perhaps, is the necessity of trying to look ahead. The issue is not whether we should make forecasts or avoid forecasts. It is whether we should look ahead in a haphazard, unorganized way, or whether we should try to systematize our outlook, appraising current and foreseeable trends as part of a broader programme for maintaining high employment and sustained levels of income. Part of the federal government programme devoted to these ends, has been to set up a research unit which among other jobs, is attempting to develop a technique of forecasting suited to Canadian conditions, and which is trying to extend this as a basis for consideration of policy. This paper is a report on the progress of this forecasting unit: an attempt to state its objectives, the stage of development of its procedures, and its difficulties as they are now seen.

These remarks should be prefaced by reference to an informal committee on forecasting, established in Ottawa by representatives of several federal departments. Much of the forecasting work is reviewed by that committee, and the content of this paper is much affected by its work. But this paper expresses a personal view of the matter, for which that committee would probably be unwilling to take much responsibility.

It may seem strange that I should write on immigration at a time when Canadians economically displaced during the course of the war have not yet been absorbed into gainful occupations. Comprising men and women released from the services, workers no longer required in war-time industries, and persons of Japanese race removed from the defence zone in British Columbia, these Canadians may themselves be considered as economically equivalent to waves of immigration. These waves are beyond our control but, in making our plans, it is important to know whether or not they will be followed by other waves. The answer to this question depends on Canadian policy, which can not only decide if there are to be other waves, but can determine both their size and their composition. If we postpone consideration of our immigration policy until our reconstruction policy has taken shape there is a serious danger of overlooking the importance of laying a sound foundation for the future development of Canada.

If plans are to be made for the long run we must know if Canadian immigration policy is to be positive, negative, or neutral.

It is possible for an immigration policy to take the form of exclusion and control the form of prohibition, but there are several reasons for thinking such an extreme policy unlikely except as a temporary expedient in an emergency. The first of these reasons is national prestige. Through the exertions of her people and through the fantastic fortunes of the recent war, Canada has won a position of great importance in the world. Without a very substantial increase in her own population it will be impossible for Canada to retain her relative importance when other nations of equal or greater population rebuild their shattered lives.

On the advent of the European to North America some four centuries ago, the Indian population of what is now Canada, according to the best estimates of anthropologists, was about 200,000. It dwindled following the first shock of contact with civilization with its outriders of vice and disease, and for a time the race seemed fated to die out. Then it began slowly to recover and in recent years it has shown a fairly steady increase; it is now 125,000 in round figures.

It is believed that the Indians came in successive migrations in prehistoric times from North Asia. They are divided into a number of distinct linguistic stocks, and many tribal subdivisions with widely differing physical and psychological characteristics.

Their affairs are administered exclusively by the Dominion government. Under the French régime, the Indians were treated kindly, even benevolently, but the French government never recognized them as having any special legal rights. The British, on the other hand, from their first contact with the Indians of North America recognized an Indian title or interest in the soil, to be parted with or extinguished, only by formal bilateral agreement. This was the beginning of the system of Indian treaties and surrenders which has been the fundamental basis of Indian policy, both in Canada and the United States. At the outset this policy doubtless was dictated in the main by protective motives designed to secure the very necessary goodwill of the warlike natives. As time passed, however, and the Indians ceased gradually to be a threat to the existence of the white settlements, it became an ethical and moral obligation, which on the whole and with some reservations, has been respected and fulfilled in both countries.

Indian and white relations in the United States have continuously been influenced by the profound conviction of the white man that he is of a superior creation. It is not an attitude reserved for the American Indian—it extends to the members of every non-white race; nor is the attitude peculiar to citizens of the United States—it is shared by our British cousins, and is basic in Latin American relations. In spite of all our democratic protestations, this colour response vitally affects every aspect of the lives of all the members of many of our minority groups.

While many of the missionary minded from early colonial days onward have striven to “educate,” “civilize,” and “Christianize” the Indians, the great mass of the white population continued for many years to look upon the Indians as members of a sub-human group. To be honest with ourselves, many of our citizens still hold to this point of view.

In the light of this fact, it is surprising that the government of the United States has maintained as unblemished a record of respect for Indian land titles as is the case. Throughout our relations with the tribes, even though our citizens have invaded Indian territory, sold Indians liquor, incited Indians to revolt, and then put down that revolt with bloody fury, we have preserved the legal position that the Indians held title to the land of the United States when the white man landed; and we have scrupulously treated with each group as we pushed them westward, to extinguish the Indian title by treaty and compensate the tribes in some fashion. In those early days, very little was said about assimilation. We continuously promised Indians that after we had pushed them far enough west to get them out of the way, we would let them settle down and live their lives as independent nations. It is still technically correct to refer to the Six Nations in New York State; or to the Cherokee, Choctaw, or Chickasaw Nations in Oklahoma. Until Oklahoma was admitted to statehood, the United States dealt with these Indians as members of independent nations.