The British North America Act of 1867 recorded in its preamble that the Provinces of Canada, Nova Scotia, and New Brunswick had “expressed their desire to be federally united” and then proceeded to give legal effect to that desire. For a long time Canada has been classified as a federal state in contrast to the unitary state which “Legislative Union” would have produced. If, however, Professor F. R. Scott is correct in asserting that “an established convention leaves little doubt that we can amend our constitution whenever a mere majority of our Senate and House of Commons demand it,” Canada has finally joined the ranks of the unitary states, since, as a result of this “established convention,” the provisions of the B.N.A. Act by which “in each Province the Legislature may exclusively make laws in relation to matters coming within” certain “Classes of Subjects” could be altered at will by the Parliament of Canada.

It is true that in making the statement which has been cited, Professor Scott was primarily concerned with showing how completely autonomous Canada has become and not with the federal character of the Canadian constitution. But the example which he selected to illustrate the convention, viz. the opposition of Quebec to the amendment of 1943, was phrased so as to carry the implication that provincial opposition does not matter whatever the nature of the proposed amendment may be. It may well be that the Parliament of the United Kingdom would, in practice, enact any amendment for which the Canadian Parliament asked. But, as we are in the sphere of convention and not of formal law, it is also possible that, as between Canada and the provinces, a convention would be recognized limiting the type of amendment for the enactment of which the Parliament of Canada should ask. As constitutional conventions are apt to be the embodiment of common sense and fair play, and to admit of reasonable exceptions to fit whatever emergencies may arise, it is not impossible that it would be generally recognized as unconstitutional for the Canadian Parliament to ask, without consulting the provincial governments, for an amendment extending its own legislative power and diminishing the legislative power of the provincial legislatures. Emergency action taken in war-time is hardly a complete test for a convention for, as Professor Scott observes, “the demands of total war are such that in the result Canada may almost be said to possess a unitary form of government in war-time (p. 334).” A generous interpretation of constitutional conventions in time of war may well be expected to go hand in hand with a generous construction of the written law by the courts.

The failure of the League of Nations is due to many causes. One of them is that the Covenant of the League did not establish an adequate system of effective sanctions. Sanctions are coercive measures provided for by a legal order as reactions against violations of this order. The coercive measures consist in a forcible deprivation of certain possessions, such as life, freedom, property, or other rights. The measure we call a sanction is coercive in so far as it is to be carried out even against the will of the subject against whom it is directed, by the employment of force, if necessary. The Covenant of the League, in its Article 16, provided two kinds of sanctions: a general sanction for any violation of the Covenant, expulsion from the League, and special sanctions for the violation of the Covenant which was constituted by illegally resorting to war. The sanctions for this delict were: either economic reprisals, or action taken by armed forces against the member-state responsible for the violation of the Covenant.

The Charter of the United Nations follows the Covenant, in principle at least, in establishing the same kinds of sanctions as the Covenant. Article 6 of the Charter stipulates: “A Member of the United Nations which has persistently violated the Principles contained in the present Charter may be expelled from the Organization by the General Assembly upon the recommendation of the Security Council.” It may be doubtful whether expulsion from an organization whose purpose is the maintenance of peace is an adequate sanction at all. This is certainly not the case, if by expulsion the member gets rid of the obligations which it has violated and thus has shown that it considers these obligations as an unwelcome burden. Expulsion has the effect of a sanction, that is, to be felt as an evil, only in so far as it deprives the state of its rights as a member. This effect, however, can be realized without releasing the guilty member from its obligations.

The Charter provides for such a possibility in Article S, which runs as follows: “A Member of the United Nations against which preventive or enforcement action has been taken by the Security Council may be suspended from the exercise of the rights and privileges of membership by the General Assembly upon the recommendation of the Security Council. The exercise of these rights and privileges may be restored by the Security Council.” This Article introduces, as a valuable innovation, suspension from the exercise of the rights of membership.

There is probably no other form of organized group life in the Canadian community which has been more unstable than the organization of religion. The history of Protestantism in the country is very largely a history of church unions and sectarian divisions. If account were taken of the activities of the Jesuit Order in New France, of the defection at various times of many Catholics to Protestant religious sects, and of recent anti-clerical movements in the province of Quebec and among the Catholic immigrant population in Western Canada, the same would be found to be true in a general way of Catholic development in the country.

The dream of the universal church, of the church which would unite all nations and all classes, has never been fully realized, in Canada as elsewhere in the Western World. Efforts to accomplish such an object, by the establishment of a state church, by the union of separate religious bodies, or by the initiation of a new religious movement which would transcend all other religious groups have invariably failed in face of the expression of strong separatist forces in religious organization. Out of every such effort to create an all-embracing religious body in the community have come new movements of religious protest, the religious sect.

On the other hand, the sect form of religious organization has proved equally unstable. The pure sect, the religious group organized exclusively in terms of the other-worldly or spiritual interests of its members, has never been more than an idealistic conception of religious organization finding expression in movements of religious reform at various times. The necessity of existing in a worldly society has led religious sects from the very beginning to accept to some extent a worldly outlook. Where they have not succeeded in developing into churches, or at any rate into types of religious organization accommodated to the secular community, they have perished. Almost from the moment of their inception, they have been forced to make such a choice between social accommodation or extinction.

“Group Government” was the principle of political organization put forward by Henry Wise Wood, president of the United Farmers of Alberta, 1915-31, at the time that body entered politics in 1919. By the phrase, Mr. Wood meant that political organization should be on an occupational, or functional, basis and that political action by economic groups should replace political parties. As such, the idea had affinities with the doctrines of pluralism and even corporativism. When applied to representative and parliamentary institutions, however, it raised those constitutional issues which are common to multi-party and coalition government. Fundamentally, that is, it came into collision with the principle of cabinet unity. Group government, however, encountered an immediate constitutional problem in the prevalent form of the domination of the legislature by the cabinet, and to this aspect of the matter, the present paper is addressed.

The farmer's movement which followed the slackening of the wheat boom of the first decade of this century was, in its political aspect, a revolt against the party system. The ground for this revolt was that the parties were controlled, it was alleged, not by the rank and file of the voters, but by the party organization, the professional politicians. This small group was in turn said to be controlled by the “interests,” upon whom the parties were dependent for funds. It followed that the parties existed to serve, not the people, but the “interests”; it also followed that there was no difference between the two traditional parties. Hence the need for a people's nonpartisan organization, which would sweep away the old parties, curb the “interests,” and make the will of the people effective. The validity of this analysis need not be examined here; the effect of these beliefs is what concerns us.

During the course of history there have been three occassions upon which great masses of treasure—gold and silver—have suddenly, or within the span of a comparatively few years, been released and thrown upon the world's markets. These occasions have been at the end of the fourth century B.C., when Alexander the Great captured the hoards of the Persian kings; during the sixteenth and seventeenth centuries when the treasures of Mexico and Peru were brought to Europe by the Spaniards, and during the nineteenth century with the discovery of gold first in California and Australia and later in Alaska and South Africa. We are singularly fortunate in having for our consideration, price series which exhibit the effect of these sudden accessions of treasure for all three periods. The object of the present article will be to examine the first two of these momentous happenings.

The economist J. B. Say once wrote that “our duty with regard to errors is not to revive them, but simply to forget them.” Complete acceptance of this doctrine would expose the political scientist to ruin, for the study of government is largely the study of errors and man's clumsy efforts to correct them. The history of errors, so far as government control of radio broadcasting in Canada is concerned, centres on the Canadian Radio Broadcasting Commission which struggled for survival between 1932 and 1936. Our concern, however, is not with this history of errors but rather with the attempt, through the creation of the Canadian Broadcasting Corporation, to correct these errors. In particular, our interest is focussed on the pressing problems of integrating administration and politics in the public interest, through the device of an independent government corporation.

In 1900, Professor Frank Goodnow first differentiated between politics and administration by suggesting that all activities involved in expressing the will of the state should be classified as “politics,” while all operations necessary to the execution of the will of the state should be termed “administration.” The harmonization of these two activities, according to Goodnow, depends on the subordination of one to the other. In a parliamentary system, harmonization in the public interest is presumably obtained by having the agents responsible for the execution of the will of the state dominated by the agents responsible for its expression. This simple bifurcation has been complicated by the fact that the cabinet, the supreme instrument of party government, has become responsible in large measure for both the expression and execution of the will of the state. In certain sectors of governmental activity the party (partisan) character of cabinet supervision has led to the demand for a withdrawal from its hands of the direct responsibility for “politics” and “administration.”

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.

In comparison with either Great Britain or the United States relatively little attention has been given to the problems of public utilities by Canadian economists, business men, and governments. In part, this is due to the outstanding success of some of the publicly owned utilities like Ontario Hydro, Toronto Transportation Commission, and Winnipeg Municipal Electric and, at the same time, to the doubtful value of such public enterprises as the Canadian National. Our experience with these concerns has tended to focus attention on individual cases rather than on public utilities as a group.

Another explanation of the comparative neglect of this field of study is the constitutional framework. In the United States, it has been necessary to prove to conservatively minded courts, first, that the business in question comes within the vaguely defined category of public utilities, and then that the rates set by the regulatory commission have not infringed the Fourteenth Amendment that no person shall be deprived of property without due process of law. Under the British system of government, legislation bringing business under government control and the decisions of commissions regarding rates are, within broad limits, accepted by the courts as valid. Thus the virtually continuous litigation over public utility rates in the United States has been absent in Canada.

Despite this relative neglect, Canadian governments have not by any means entirely disregarded the control of public utilities. The federal government has set up the Board of Transport Commissioners which, since 1904, has supervised the rates, fares, and charges of railways under Dominion jurisdiction. For the most part the Board has dealt with relation of rates inter se. Nevertheless, it has occasionally considered the general level and in the main has accepted the revenue needs of the Canadian Pacific as a basis for rates. In effect it uses the prudent investment of the low cost line for rate-making purposes, but it has not attempted to arrive at either an accurate valuation or a precise figure for a reasonable rate of return. It has almost completely avoided the theoretical and practical difficulties of original cost, cost of reproduction new, and other valuation problems.

May 8 and 9, 1945, were officially proclaimed V-E Days in England. On the latter day in the House of Commons of the United Kingdom, Mr. Herbert Morrison, as Home Secretary, announced certain revocations of the Defence Regulations which had been in effect since the outbreak of war in 1939. He stated that in accordance with the government's declared policy of relaxing war-time restrictions as soon as changes in the war position made this possible or desirable, advance consideration had been given to the question of what Defence Regulations could be dispensed with on the termination of hostilities in Europe, with the result that as of May 9, by order-in-council, eighty-four of the Defence (General) Regulations were revoked entirely and another twenty-five in part. He added that he was happy to announce the sweeping away of these limitations, the relinquishment of the exceptional powers entrusted to the Home Secretary, and the return to traditional British freedoms.

In Canada, on June 14, 1945, an order-in-council was passed establishing an inter-departmental committee to examine the Defence of Canada Regulations “with a view to the revision thereof, including the variation, modification and revocation of the same.” The inter-departmental committee so established was to report to the President of the Privy Council and make such recommendations regarding war-time regulations as it considered appropriate, and consistent with the vigorous prosecution of the war against Japan.

The precipitous surrender of Japan hastened the relaxation of the provisions for Canada's internal security. Twelve of the Defence of Canada Regulations, among which were most of the regulations directly affecting civil liberties, were revoked by order-in-council of August 16, 1945. A month later, on September 14, forty-four of the remaining Defence Regulations were revoked and four others revoked in part or amended. The net result of these two orders-in-council was to remove most of the restrictions on liberties normally enjoyed by individuals in peace-time, but continuing in effect upwards of forty Defence Regulations, including some of those relating to enemy aliens, to protection of property, and to custody of Japanese persons, and those Regulations containing administrative and procedural provisions. It is therefore timely to present a survey of the nature and extent of Canada's Defence Regulations, and to assay their value in preventing sabotage and controlling subversive activity.

In recent years no form of property right has been subject to more serious criticism or evoked more strenuous defence than the right conferred by a patent of invention. In Canada, which has so far been a patent-dependent economy, i.e. utilizing largely imported patents, it has taken somewhat longer for the issues to be brought into sharp focus. Dr. Fox's paper serves as a rallying-point for the defence. As one of the leading authorities on Canadian patent law and as an outstanding industrialist of St. Catharines, Ontario, with practical experience in marketing patented articles on both the domestic and international markets, his views deserve respect. Any apparent presumption in taking issue with some of Dr. Fox's statements and conclusions is justified only by the fact that his subject was not confined to patents but raised implications respecting legal and economic aspects of monopolies and restraints of trade and respecting some general principles of public administration and enforcement of criminal and regulatory laws affecting business.

Dr. Fox suggests that the abuses of patents which have been the subject of much discussion and criticism in the United States and other countries with reference to the activities of domestic and international cartels cannot and do not occur in Canada. He claims that the remedies provided by the Canadian Patent Act, the Statute of Monopolies, and the Combines Investigation Act prevent such abuses from arising. He suggests that because these supposedly adequate remedies have only very rarely been invoked such abuses do not exist in Canada. His vigorous exposition of this theme is supplemented by well-deserved encomium of the Canadian patent system in its technical aspects and by a perhaps less deserved condemnation of all who suggest that patents, like corporations and other law-created instruments of trade and commerce, can sometimes be misused.

The present party standing in the Senate is sixty-five Liberals and twenty-six Progressive Conservatives, with five seats vacant. Since the Bennett government left office, thirty-seven Conservative Senators have died or resigned, eleven of them in the last three years alone. As the Progressive Conservatives are, for the most part, among the oldest Senators, it is by no means impossible that, if the Liberals retain office a few years longer, a succeeding Progressive Conservative government may find itself without a single supporter in the Senate. A C.C.F. government would, of course, inevitably be in the same position.

Clearly, any government must have some supporters in the Upper House, if only to move and second its legislation. Would there be any way out of the difficulty short of an amendment to the British North America Act?

The answer would seem to be yes. Normally the Senate is limited to ninety-six. But Section 26 of the British North America Act provides that “If, at any Time, on the Recommendation of the Governor-General, the King thinks fit to direct that four or eight Members be added to the Senate, the Governor-General may by Summons to four or eight qualified Persons (as the case may be), representing equally the four Divisions of Canada, add to the Senate accordingly.” Sections 27 and 28 add: “27. In case of such Addition being at any Time made the Governor-General … shall not summon any Person to the Senate, except on a further like Direction by the King on the like Recommendation, to represent one of the four Divisions until such Division is represented by Twenty-four Senators and no more. 28. The Number of Senators shall not at any Time exceed one hundred and four.” There can be little doubt that a government in the position just described would advise appointment of at least four extra Senators; and there can be equally little doubt that the advice would be accepted.

Social scientists have given very little time to the study of professions. They have studied the market and the state, the family and the labour union, the immigrant and the delinquent; but the professions, of which they are a part, they have in general avoided. The omission is not easy to explain. Undeniably professions play an extremely important part in our own type of society. As a matter of fact, professions should be interesting merely for the fact that in no other type of society have they developed in comparable fashion. In terms of the functions performed, the prestige accorded, the numbers involved, and the portion of the national income which they receive in our society, they are obviously important.

The study of professions requires a manifold approach, one which corresponds to the various facets of the type studied. In order to understand a profession one would need to know something about the following: (1) the institutions within which the members carry on their activities, (2) the characteristics of the clienteles which the members acquire, and (3) the groups into which the members of the profession are organized.

The successful practice of medicine requires access to a multiplicity of institutions. Of particular importance are the hospital, the clinic, and the established office practice. The successful career in medicine involves gaining admittance to these institutions, and maintaining connexion with them. Only the exceptional practitioner can survive without access to such institutions; the freelance practitioner has gradually been supplanted by one whose career depends on his relationships with a network of institutions.

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.

It is the intention in this paper to conduct an inquiry into the relations between general equilibrium analysis and public policy by the indirect method of examining the place of such analysis in the solution of a definite economic problem. The problem selected is the possibility of raising wages without raising prices. Traditional partial equilibrium theory made the solution of this problem a fairly simple one, but modern general equilibrium considerations, dynamic qualifications on these, and institutional changes in the organization of business and labour have opened up such areas of indeterminateness in the formation of prices that we may no longer trust the answers given by the simpler generalizations.

In the development of ideas during this paper, the term “degree of monopoly” will be employed rather frequently. The term will be used in Professor Lerner's sense of the ratio between the excess of price over marginal cost and price itself. In terms of Figure 1, this is the ratio RP/MP. This definition has limitations but it is retained as the simplest to which analysis may be referred and sufficient for the particular purposes for which it is required here.

The idea that the rise of wages in relation to prices may have consequences for the levels of employment and national income is, of course, based upon the Keynesian hypothesis that larger wage incomes in relation to national income as a whole tend to mean a lower level of savings, and the corollary that a lower level of net new investment will be needed to maintain a given level of employment and income where the wage share is higher. There is also some opinion that changes in the degree of monopoly during the business cycle are such as to aggravate the operation of the disequilibrating forces. For example, Dr. M. Kalecki in an article published in Econometrica in April, 1938, suggests that the Keynesian analysis respecting the relation between wages and prices requires emendation and expansion because it appears from his statistical and theoretical analysis that the degree of monopoly increases with recessions of the business cycle and decreases with its upward phase. If this be so, Dr. Kalecki points out that the cyclical redistribution of income carries with it the necessity of attaching a larger quantity of new investment to any given level of national income as the level of national income recedes, though this reasoning is qualified for effects of falling wages on the foreign balance.

The Canadian Northland embraces both the Yukon and the North West Territories, a total area of 1,516,758 square miles. The Yukon Territory, which forms the extreme north-west portion of the mainland of Canada, extends northward from British Columbia to the Arctic Ocean and eastward from Alaska to the District of Mackenzie. The North West Territories, which have diminished in area time and again during the last seventy-five years, today embrace the vast mainland portion of Canada lying north of the sixtieth parallel of latitude between the Yukon Territory on the west and Hudson Bay on the east, together with the islands in Hudson and James Bays and in the Arctic Archipelago.

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.