Canada

on the World today

ATLANTIC

February 1951

THE debacle in Korea enveloped Ottawa in gloom about Washington. Outside of Ottawa, however, most Canadians took the bad news in their stride. The truth is that until the shooting started most Canadians knew little, and cared less, about Korea. It was altogether different from going to war for Poland in 1939, or from what going to war with Russia would be today.

When the United Nations began, no nation was more optimistic than Canada about the possibilities of living with Russia. Canada’s production record during the war had been prodigious. On a population basis it rivaled that of the United States. Canada had not only achieved nationhood; it had outgrown, it believed, small-nation stature despite its 13.8 millions population. With its newfound and considerable prestige, it embarked on a great crusade to achieve a lasting peace through the UN. It saw itself cast in the role of the great conciliator between East and West.

That dream was shattered by Russia’s drive for world domination. It became painfully obvious that there was no place for a nation of good will. The world divided into two camps and there was only one possible camp for Canada. Its adherence to American foreign policy made it a special target for Russian insults.

Ottawa went along with Washington. But it still has a mind of its own. It is in complete disagreement with Washington over its policy vis-à-vis Red China. It is sorely troubled about Formosa and about MacArthur’s regime in Japan. It is more and more fearful that Washington will get the world involved in a war with Russia, where and when the Russians want to fight it. If and when such a war comes, Canada will be in it with all the grim determination it evinced in the struggle against Hitler. But it wants to go into it with its eyes open, with the risks calculated and taken when chances of success seem best. It. doesn’t want to be dragged into it by the tail.

This fear began to mount with the first shot In Korea. Ottawa was as rudely shocked as its most Ignorant citizen. It had been engaged in a frantic effort to head off a threatened nation-wide railway strike. It was trying to devise some means of amending the Canadian constitution—a thorny, vexing problem. And inasmuch as Korea and Japan had been very much All-American shows anyway, it had some excuse for being taken completely by surprise. That Washington was equally caught off guard shook confidence in American world leadership. A prime requisite in a world leader is to know what is going on.

Canada follows Washington

The turn of events following the invasion of South Korea cut deeply into Canadian pride. It had taken Canada seventy-two years to nail down finally its right to declare its own wars. Before 1939, when Britain went to war Canada went to war automatically. But when in 1939 Britain declared war on Germany, Canada did not make her declaration until a full week had passed. That was profoundly important to Canada. It marked the final step in its interminable struggle for complete independence.

The manner in which President Truman acted in ordering General MacArthur into Korea, even though it was followed by UN approval, set back the Canadian clock. Canada’s attitude could be summarized as follows: “For the first seventy years our wars were declared for us by London. Now it looks as if for the next seventy years they are going to come from Washington.”

Once in, Canada got busy pulling its weight. Here its faith in American leadership received another blow. Instead of setting up adequate war planning and prosecution organizations, the UN called for a maximum effort by everybody and left the rest to Washington. But when Canada attempted to find out from the United States what was wanted of it, what was needed most, it met only confusion. In the end it made up its own mind and began recruiting its special force for Korea. In the midst of mobilization, the Canadian railway strike occurred. Confused by Washington, bedeviled by the strike, goaded by the opposition in Parliament for not Inning an army ready to light in Korea, the government was in trouble.

It is one thing for a small nation 1o follow the leadership of a great power when that leadership is incisive, intelligent, and informed, h is another when the follower begins to feel that the leadership is vacillating, inept, or uninformed. Ottawa has never been particularly awe-struck by General MacArthur. His pronunciamcnlos plus his something less than omniscient intelligence service have given Ottawa the creeps. Washingtons almost cavalier dismissal as sheer bluff of Red China’s warning that it would invade Korea if the UN forces invaded the north would not be remembered if it had not boon wrong. But what Ottawa resents mosl of all is Washington’s offhand treatment, which is new and strange after years of close coöperation with the Roosevelt administrations.

Canadian ore and American steel

Modern war means industrial mobilization. Washington moved quickly to husband materials for war production, in doing so it sideswiped the Canadian economy with a force that tluealened to capsize it. The two economies are mutually dependent.

Canada, for example, gets most of certain types of its steel requirements from the Knited States. It imports something over a million tons of sheet, plate, fabricating steel and semiprocessed sieel annually. When it came to alloeating steel, Canada was treated as if it did not exist. Because fabricating steel is not deemed essential for the United States, it is deemed unessential for Canada. When Canada’s special conditions were called to the allocators’ attention, concessions were made grudgingly, and only il everybody was certain there would be no protests from Americans.

Canada feels, with the intense pride of a small nation, that it ought to be treated like a pari nor in an emergency, not like a nuisance. Without some vital supplies from Canada, the United Stales economy would be crippled. Pittsburgh and Youngstown need Canadian nickel as much as Canada needs American steel. Canadians argue that the number one target for a Bussian atomic bomb will be Sudbury or Arvida and not Pittsburgh or Hoover Dam. Similarly, Canadian asbestos, aluminum, and uranium are vital. So are Canadian newsprint and pulpwood.

To cut off these supplies from the United States would be utterly unthinkable to Canadians. But win isn’t it jusi as unthinkable for Washington to cut off Canada’s vital steel requirements? Ironically enough, without a million toils ol highgrade iron ore from Ontario, the I nited States would lose far more steel than is being denied to Canada.

Yet more important to Ottawa than any of its real or fancied grievances is a growing, terrible, gnawing doubt. If Washington can do all this to the most intensely pro-American nation anywhere in the world, what is it doing to its prestige in the lukewarm capitals which had little of Ottawa s genuine a flee lion and admiration for the United States in the beginning?

The battle for lumber

All over Canada the people are wrestling with vexing local problems. Ontario, which is blessed with one of the continent’s greatest forests, is in the throes of a lumber shortage that has skyrocketed construction costs. Much ol the lumber being used there today is being brought overland at prodigious cost from the Pacific Coast.

Behind this is an undercover battle between the lumber industry and the pulp and paper companies. Most of the good stands of timber are now located in huge areas that have boon granted to the pulp and paper makers. Not only do they refuse to permit the lumbermen to log oft the good timber, but they are alleged to be cutting limber and converting it into pulp.

The story is important only because il points up the scramble that is now going on in Canada for all materials. American production curtailments will force factories in Ontario and Quebec to close down. Lack of steel will hit the whole eountry. I n every city and town the search for such things as lumber, plaster, nails, wire lath, plumbing fixtures, furnaces and pipes, is on. With its population being augmented by immigration from Europe, Canada cannot stop building, liecause it has always depended on American manufacturers for specialty items, it does not have the plant capacity to supply its own needs. Everyone who fought shortages during the last war is now frantically trying to protect himself this time.

Frozen wheat

Farther west, on the prairies, Canadian farmers are wrestling with an old problem in a new guise - a wheat glut. This time it is frosted and frozen wheat — 15 million bushels of it. At the end of July, the prairies were getting ready to harvest the second largest crop in history, a whopping 520-million-bushel wheat stand. Then, in August, the crop was hit by the worst series of frosts in twenty-two years. Over an area of 100,000 square miles, the yield was cut by a third and the grade by a half.

Instead of harvesting 7500 bushels of wheat netting $1.30 a bushel, an individual farmer might only take off 5000 bushels that would return 80 cents. The immediate cash loss to the producers was terrific. But it was only part of the consequences. The country is now struggling over what to do with 150 million bushels of low-grade wheat.

It would make superb cattle or hog feed, if the country had an animal population that could consume it. In the fall of 1949, however, high beef prices and feed shortages caused the wholesale liquidation of western beef cattle herds.

Last summer bountiful rains grew lush hay crops in the cattle country. In addition, rain and cool weather retarded maturity of cereal grains. So a bumper supply of fodder was augmented by thousands of tons of oats that were cut green and stacked for feed. If enough farmers can be inveigled into going into livestock, the feed wheat can ultimately be marketed as beef or pork. But that in so harsh a climate is a dubious probability. At the moment, finding storage for frozen wheat, much of which is damp and hence dangerous to slore, is causing endless grief.

Oil in Alberta

Alberta, on the western fringe of the prairies, has another kind of glut trouble. It, however, is a pleasant, manageable glut — so far — of highgrade crude oil. After a lifetime of depending on the United Slates for its oil, discoveries in the last three years have now placed Canada in the position, theoretically, where it can meet its own needs. Unfortunately, the oil is in the wrong place. The market is in Ontario and Quebec. The oil is 2000 miles away in Alberta.

Alberta has been producing some oil for thirty-six years. But despite recurrent booms its output has never been sufficient to meet even regional needs. Oil came principally from deep wells in Turner Valley, near Calgary. The real production boom started with the discovery of the twin-zone coral reef at Ledue, near Edmonton, in 1947. That was followed in quick succession by a half dozen other fields. Production has been mounting steadily until today it has touched the 100,000 barrels daily mark. That is scarcely half of what would be produced if the wells were permitted to operate at maximum rates.

Ledue brought on a frenzy of exploration that attracted all the major American companies and most of the important independents. They were attracted not only by the oil but by the discovery that they could get prospecting and drilling rights to huge iracts of land without having to deal with the surface holders — the farmers.

In Alberta, title to oil and mineral rights is reserved to the government on all land settled after 1887. That takes in most of the land in Alberta. The government has instituted a leasing system that is unique on the continent. It grants exclusive prospecting rights over 100,000 acres. If a well is drilled and finds oil, the driller gels the right to take 9 square miles around the well. Outside that area the government retains half the land.

During the past two years the government has taken in over 70 million dollars in lease payments and royalties. But while the government has got rich the farmers on whose land the oil has been discovered have got nothing but compensation for use of and damage to the surface. Here and there, however, in every field there have been odd tracts of land which were patented before 1887 and on which the landowner has title to his oil. This lucky farmer does get rich. It is hardly necessary to add that the tide of unrest with the land titles system rises with each new field brought into production. It can hardly help emerging as a prime political issue sooner or later.

Controlling the boom

On the other hand, the block leasing system has tended to keep the boom neat and tidy and the oil glut manageable. Instead of allowing the pressure of production to force its way into wider and wider market circles, output is rigidly restricted to the size of the market. At the moment it doesn’t matter how many new fields are discovered or new wells brought in. The available refining and distributing capacity governs the volume that can be delivered.

A pipeline was completed this summer capable of carrying 70,000 barrels a day from Edmonton to Superior, Wisconsin, and thence to Ontario. A better market, however, exists closer to home in the border Great Plains states. A reduction of the price of Canadian crude oil would force it into those states. Alberta production would rise substantially.

It so happens, however, that the American oil companies which dominate the distribution in these areas are the same companies that own most of the oil in Alberta. Their reluctance to start a gasoline war with themselves is understandable. So, as more new wells are brought in and more now fields discovered, the market allowable to those already in production is reduced. Thus wells that can produce 400 barrels a day are only making 150. Those that can make 150 arc producing only 50.

In the meantime, the steady expansion of Alberta’s proven oil reserves is something in which Canadians can lake comfort if Ottawa’s fears about being dragged into a war by Washington come to pass. If you can’t escape being the Belgium of the third world war, it is good to know you are not destitute of the vital materials for defense.