. .

ABSTRACT

This thesis examines the effect on Canadian-American relations of

. United states attempts to erilist Canadian cooperation in theenforcement

of the Volstead Act (1920-1933). lt deals with the political, economic and moral factors involved in Canada's response to American requests for

assistance. lt describes Mackenzie King's efforts to appease both those

. Canadians favouring cooperation and those opposing it, as he sought to

preserve Canadian unity. The thesis also discusses the sinking of the

l'm Alone, emphasizing the implications of American efforts to enforce

domestic law on the high seas. lt reviews the political circumstances

which persuaded Mackenzie King, in 1930, to prohibit liquor exports to

the United states. Finally, the thesis considers wby R.B. Bennett, despite

h1.s "bard line" attitude towards the United States, maintained the ban on

clearances unti.1. the repeal of the Eighteenth Amendment.

Michael HAYMAN RISTORY DEPARTMENT

M.A. THE VOLSTEAD Ar::r AS A REFLECTION OF CANADIAN-AMERICAN RELATIONS

' .. THE VOLSTEAD ACT AS A REFLECTION OF CANADIAN-AMERICAN RELATIONS by

Michael Hayman

A thesis submitted to the Faculty of Graduate Studies and ~esearch in partial tulflllment of the requirements for the degree of Master of Arts

Department of History McGill University Montreal

February 1971 PREFACE

Considerable research has been done on the history of the Eighteenth Amendment. (1) A smal.1 number of historians have briefly examinèd the abortive movement for permanent national prohibition in Canada. .

No detailed study, however, bas been made of the influence their divergent 1iquor systems exerted on relations between Canada and the United states during the 1920's. Indeed, most historians analyzing Canadian-American relations in this critical decade ignore comp1etely the impact their 1iquor 1aws had on international relations. Others give only passing attention to the com:p1ex situation created by the passage of the Vo1stead Act in the United states and the concomitant movement away from prohibition in Canada. (2)

This thesis examines, from a Canadian view, the effects of the Vo1stead Act on Canadian-American relations. The Vo1stead Act po1arized conflicting Canadian and American attitudes towards prohibition 1egis1ation. It produced considerable international controversy. It demons"trated Canada's growing determination to protect her national interests against foreign encroachment and to assume control of her foreign po1icy, particular1y in negotiations vith the United States. The Vo1stead era revealed c1ear1y the prob1ems wh1.ch a small and re1ative1y weak nation faces when its po1icies conflict vith those of a neighbour possessing tremendous economic and po1itica1 power.

Chapter One of the thesis constitutes a brier discussion of the history of the prohibition movement in both countries. This introductory coopter is necessary because the evants which followed the Vo1stead Act vere determined by the relative success of the prohibition movement in the United States and its comparative failure in Canada. the fact that the United States vas becom:1ng increasingly "dry" and Canada increasingly "wet."

The thesis then comes to grips vith its central theme, the attempts by the United States to enlist Canadian cooperation in the enforcement of the Volstead Act and the impact of these attempts upon Canada. For thirteen years - rrom 1920 to 1933 - the repeated United states requests for assistance innuenced

1 The Eighteenth Amendment, passed by the United States Congress in January - 1919, out1aved the manufacture, sale, consumption, import and export of 1iquor. The Volstead Act, passed in October 1919, provided the mach1nery for enforcing the 1aw. Prohibition vent formally into effect at lllidnight, January 16, 1920.

2 Although the Eighteenth ADlendlllent and the Vo1stead Act are not synonymous Most contemporary sources used the terms interchangeab1y. This author vill do so as vell. i Canada's po1itical 1ife, provided the inspiration for countless newspaper articles and editorials and precipitated controversy among Canadians of every economic stratum and il\ every geograpbical area. Between 1920 and 1926 Canadian public opinion was opposed to cooperation. In the following years there was a graduai shift towards support for cooperation. The author attempts to exp1ain the reasons for tbis change and for the ultimate passage of the 1930 excise act amendment, which probibited 1iquor exports to the United States.

The studyattempts to provide an insight into the complex reaction to Canadian-American relations of W1l1iam Lyon Macken~ie King, the dominant Canadian political personality of the period. King vas the leader of the Liberal party and it vas bis political astuteness which enabled the party to remaiD in power for almost n:i.ne of the f'ourteen years during which the Vo1stead Act vas in force. lt vas Mackenzie King who weighed the arguments both for and against cooperation and who bore the major responsibility for determining the policy Canada would adopte The story of the influence of the Vo1stead Act on Canadian-American relations between 1920 and 1933 must be to1d large1y in terms of the tortuous course of' Mackenzie King' s liquor export po1icy.

This thesis also examines the incident of' the l'm Alone, a Canadian "rum-running" schooner sunk in March 1929 by the shell f'ire of' the American coast guard. The peacef'ul. settlement of' the "l'm Alone" dispute lndicated that Canada and the United States were determined to minimize the gravity of' such crises. But the incident also showed that Canada must dea1 f'irmly with her more powerf'ul neighbour if she vere to escape domination. Finally, the writer dea1s br1efiy w1th the Canadian reactio~rds 11quor exports between the passage of' the excise act amendment and the repeal of' the E1ghteenth Amenc1ment in December 1933. In 1930 R.B. Bennett vas e1ected Prime Minister. Bennett's campaign p1atform was based at least partly on anti­ Americanism and if he carried bis "Canada f1rst" pol1cy to its logical conclusion the government would repeal the excise act amendment. The f'ailure of' the Conservative administration to change Canada's polic.y of'fers a partial exp1anation of' Bennett's comp1ex view of' Canadian-Amer1can rel.ations. lt vas also a cleu indication of' the powerf'ul impact made upon Canadians by the moral issues invo1ved in the liquor trade.

Many sources vere used in the preparation of' th1s manuscr1pt. An intensive study vas made of' American consular reports as gauges of' public opinion. These officials vere specifically entrusted w1th the responsibllity of conveying to the State Department their objective assessment of' the Canadian attitude towards liquor exports. Their reports must carry considerable veight. Newspapers vere also regarded as a primary source in the analysis of public opinion, with due regard to subjective elements which uy have inf'luenced them. The press also gave the author valuable intorution about the areas in which 1iquor smuggling vas particularly extensive. Every ed1t1on of the ',rlindsor Border Git1es Star am the Buff'alo Evening News betveen 1920 and 1933 vas checked to secure an acourate assessment of the tiquor trarf1c along the Detroit-W1nJsor

11 and Niagara Falls-Buffalo borders. The report of the Royal Commission on Customs and Excise (1926) gave a complete picture of the activities of "rum-rurmers ft and bootleggers èuring the period. The Mackenzie King Papers and those of Arthur Meighen. ~.3. Bennett. H.H. stevens and N.W. Rowell were invaluable in analyz:ing the pollcies of the Liberal and Conservative parties. Numerous books and artiCles on ?~ohibition and on Canadian-American relations in general helped the author fit the issue into the context of the period.

The author is gratefUl for the generous cooperation extended to h1m by a great number of individuals. The staffs at the Public Archives in Ottawa and the National Archives in Washington offered their assistance freely whenever it was requested. LibrariaDs in Windsor, Toronto, Montreal, Moncton, Halifax, Sydney, New York and Boston cheerf'u1.1y brought up countless relevant newspapers. The author 18 indebted to Henry F. Angus. Hugh L. Keenleyside, Senator Arthur Roebuck and Harry H. Stevens. who took ti!Ile to answer his letters. Judge Bora Laskin helped provide a Clearer understanding of the Canadian constitution. A special note of thanks !II1St be extended to John E. !le~d, Legal Advisor for the Canadian Deoartment of External Affairs between 1919 and 1946. l had the privilege of discussing certain ~pects of MY' thesis vith him for three hours on a cold morning in Dece.ber of 1968.

But the individua1 Who bas Bade the major contribution to the development of this thesis bas been Professor Carman Miller, of the Department of Rist.ory at McGill University. His patient reading of its various drafts and his many conStructive suggestions vere invalu.able. The thesis would not have been possible without bis advice. dL?"8ction and guidance.

Michael Hayman February 1971 TABLE OF CONTENTS

Page

PREFACE. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • i

CHAPTER ONE CHALLENGE TO THE VOLSTEAD ACT ••••••••••••• 6

CHAPTER 'IWO MACKENZIE KING'S DILEMMA •••••••••••••••••• 31

CHAPTER. THREE A POLICY OF APPEASEMENT ••••••••••••••••••• 51

CHAPTER FOUR PROFITS AND PRINCIPLES •••••••••••••••••••• 84

CHAPTER FIVE PROHIBITION TAKES TO THE HIGH SEAS •••••••• ll?

CHAPTER SIX

"THE PEOPLE ~~ THE MASTERS" •••••••••••••• 139

CHAPTER SEVEN R.B. BENNETT IN THE "VALLEY OF DECISION" •• 169

CONCLUSION ••••••••••••••••••••••••••••••••••••••••••• 186

APPElIDIX ••••••••••••••••••••••••••••••••••••••••••• •• 191

BIm.I00 R.A. PHI'. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .194 1v Page

Federal e1ectora1 districts imicating locatioDa or distilleries ard breIIeries aDd voting pat"r_ or M.P.'s on 1930 excise act ..eDdaent.

i) Ontario 161

ii) Quebec 162

111) Briti.h ColUllbia 16)

iV) Bova Scot1a 164

v) Bev Brunsv1ck 165

vi) Man1toba 166

ni) Alberta 167

viii) Sa.katch.... n 168

v Le~V'3S l ta 5 amitt-=d in page numberinfe CHAPI'ER ONE

CHALLENGE TO Tr.tE VOLSTEAD ACT

By March 1918 rlrtua11y al1 of Canada vas "dry." In November 1918 the United States, as a vartime measure, out1awed the manufacture and sale of 1iquor. On January 29, 1919 the United states adopted the Eighteenth Amendment, making permanent iu prohibitory vartime 1egis1ation. In May

1919, however, Canada began to abandon its restrictive 1iquor 1aws. Th~ whi1e one country re1axed its 1iquor regulations, the other moved in an opposite direction. This divergence, which created considerable controversy betveen Canada and the United states, vas the result of significant constitution&! differences and varying social, phi10sophica1 and historical backgrounds.

In 1808 a group of prohibitionisu met in Moreau, New York to form the 1 first o~ganized tempe rance society in the United states. By 1833 no 1ess than 2000 local groups across the country struggled against the sale and consumption of alcohol. During tbat year these local groups joined their separate strengths in the United States remperance Union, inereasing the effectiveness of their impact on public opinion and by 1851 the Union had persuaded fourteen states to adopt at 1east partial prohibitory 1egislation. In the mid-185Q's a reaction against tempe rance MJVements set in vb1ch 1asted

1 Herbert Asbury, The Great Il1usion(Garden City, 1930), pp. 20-)6. CHAPl'ER ONE

CHALLENGE TO THE VOLSTEAD ACT

By March 1915 virtual1y al1 of Canada was "dry." In Nov.mber 1918 the United states, as a wartime measure, out1awed the manufacture and sale of liquor. On January 29, 1919 the United states adopted th. Eight•• nth

Amendment, maldng permanent its prohibitory wartime legislation. In May 1919. however, Canada began to abandon its restriotive liquor lawa. Thus whi1e one country relaxed its liquor regulations, the other mov.d in an opposite direction. This divergence, which oreated considerable oontroversy between Canada and the United states, was the result ot signitieant constitution&! differences and varying social, philosophioal and historioal backgrounds.

In 1808 a group of prohibitionists met in Moreau, New York to torm th. 1 first organized temperance soci.ty in the United states. 8y lA33 no l.ss than 2000 local groups across the country strugg1ed against th. lal. and consumption of alcohol. During that year these local groups joined tb.ir separate str.ngths in the United states Temperance Union, increasing th. effectiveness ot th.1r impact on public opinion and by 1R51 tbe Union had persuaded tourte.n states to adopt at 1east partial prohib1tory 1.g1s1at1on.

In th. mid-1S50 ' s a reaction against temperance mov.ments set 1n wh1ch lasted

1 Herbert Asbury, Th. Great Illusion{Gard.n City, 1930), pp. 20-36. 1 some twenty years. By the 1870's, however, the proh:1bitionists had once more acquired considerable strength. Hundreds or impassioned orators rrightened their audiences vith vivid descriptions of the "ev11s of drunkenness," describing e10quent1y the happy homes which had been destroyed by the sin of iDtemperaJlce, the dastard1y crimes that had been committed either under the influence or 1iquor or in its acquisition, and the agonizing deaths that once respectable citizen! had suffered as a result or their addiction to drink. Between 1870 and 1900 the prohibitionists converted many Americans to their cause. Much of the support for temperance rerorms came rrom the evange1ical 2 rural sections or the country, wh:1ch had always equated sobriety vith mora1ity, but the ditricu1ty in organizing the iso1ated rural regions 11m1ted the proh:1bitionists' success. By 1900, however, factors were at work within American society which gave the prohibition movement the additional support it required. The United states, sincEill i:.h,e 1870's, had been transrormed rrom a rural into an urban society. There had been a rapid increase in the indigenous population and a vast infiux of l!.'uropean immigrants. "\ura1

Americans had MOVse! fro. the rarms to the cit1es seeking new opportunities. Techno10gical discoveries, supported bath by the demands and the productiv1ty

1 During this period every state ucept Maine - Oregon, Minnesota, Rhode Island, Massachusetts, Ver.ont, Michigan, Connecticut, Indiana, Delaware, Iowa, Pennsylvania, New York, and New Hampshire - repealed or JUde 1ess stringent i ts prohibition 1aw. :1.easons for the dec1ine of the prohibition move_nt are suggested and discussed in Asbury, pp. 60-84.

2 Richard Hofstadter, The Age of Reform(New York, 1955), p. 290. 8. of the new urban commun! ties, brought a commercial and indus trial expansion unparalleled in history. This rapid expansion, however, had been accompanied by many ev1ls. The exploitation of the i1lllll1grants by their employers, the

\ excessive power of the economic entrepreneurs, the large scale financial scandals, the corruption of government officials, crime, sIum conditions and juvenl1e deliquency were depressing by-products of the tramendous wealth which was being created. Many urban Americans, expressing "the emotions of their . 1 rural roots," dep10red the new pattern into which the United states was sett1ing. They demanded economic reforms which would restora freedom to the indiv1dual, political reforms which would prevent private interasts from contro1ling the machinery of po1itics and legislative reforma which would help reduce the rising incidence of crime and corruption. Between 1900 and 2 1914 there was an organized thrust for reform in the United states. And. the drive for prohibition in this Progressive era was for many "an important 3 component of the modern reform movement. If

The Anti-Saloon League, which since its formation in 1893 had constituted the spearhead of the prohibition movement, capitalized on this grow1ng desire 4 for reforme Drinldng and the 1lls i t caused were 1inked pr1mar1ly to the

1 Richard N. Current, et al. American His tory 1 A Survey(New York, 1967), p. 629.

2 A complete analysis ot the refora move.. nt is found in Hofstadter'! The Age of Reform. Various interpretations of the JIOveaent are provided in Allan F. Davis and Harold D. WoodJlUUl's(Gen. Eds.), Conflict or Consensus in AIlerican H1story(Boston, 1965), pp. 301-)40. 3 Arthur S. Link, AMncan Epochi A Histor;y or the United States Since the 1890's(New York, 1955), p. 305. 4 James T1lIberlake, Prohibition and the Progressive Movement(Cambridge, 1963). classes which the reformers Most detested or mistrusted - the p1utocrats, 1 the corrupt politicians and the immigrant masses. DTunkenness was held responsible for the degradation of municipal politics, for indus trial 2 accidents and for the social 111s which existed in America's cities. B,y

1910 an increasing number of urban Americans had joined the ruràl population in accepting the gospel of the "temperance" which was a eu.phemism for prohibition. Yne passage in Januar,y 1919 of the Eighteenth Amendment, outlawing the manufacture, sale and consumption of liquor, was the culmination of over a century of persistent and ded1cated struggle against intoxicants.

Just as the Anti-Saloon League won its greatest victory, reforms such as prohibition lost favour with the urban elements. They were weary of the 4 discipline içosed upon them by the demands of the Great War. They had had enough of the idea1ism which had permeated the nation between 1890 and 1920.

They sought an escape from the "reforming impulse" of the Populist-Progressive 5 era. Prohibition now became a "grim reminder . of the moral frenzy 50 many wished 6 to forget." Few Americans wanted to become involved in the activities of the

1 Hofstadter, p. 290.

2 \o1.L. Brock, The Character of American History(New York, 1965), pp. 209-210.

3 Many Amerlean historians reject the c1aim that prohibition was mere1y a product of 1I8l"t:ime patriotisme (Hofstadter, p. 290). The Anti-Saloon League ha.d convinced a large number of Americans that prohibition was a vi ta.l pre­ requisite of social justice. The war may have acce1erated the drive towards prohibition, but it vas not responsib1e for it.

4 Hofstadter, ?p. 272-282. 5 Ibid. , pp. 282-301.

6 Ibid. , :le 2.3--';te 10. gangsters and thugs who fought out their deadly battles for territory and spoils. Most, however, were quite wi.lling to turn a blind eye to the methods used to provide them with the liquor. "Speak-easies" proliterated and there was hardly a street in the cities and towns of America without its liquor outlet. Short-skirted tlappers and coon-coated college students with tlasks in their hip pockets were the symbols of a post-war moral degeneration which concerned l itselt almost pathologically with the illegal consumption of liquor. The intense preoccupation with the consumption of liquor helped to create a tremendous demanà for the product and strenuous efforts Were made to meet this demand by increasing domestic production. It was virtually impossible for prohibition officials to patrol effectively the entire country and "moonshiners" produced considerable supplies of liquor in their st11ls.

Beer and w1ne, limited quantities of Which could be manufactured for Medicinal and religious purposes, were also manufactured in substantial amounts for illegal drinking. But the domestic production of liquor proved both unsatisfactory and inadequate. This liquor was made hurred1y, in the constant feu that

prohibition agents might uncover and confiscate liquor manufacturing equipment.

and its quality was often questionable. In any case, this illegal liquor could

be made only in small quantities. An adequate supplement to domestic production

was essential. The liquor interests looked beyond the bord ers of the United states for sources of supply which could guarantee both the quality and the

availability of their products.

l Fletcher Dobyns, The Amazing Story of Reoeal(New York, 194{)). 11.

Americans found foreign countries eager to meet their requirements. From Europe - Great Britain, Scotland, France and Holland - ships crossed the Atlantic and waited near United states waters for an opportunity to slip l through the coast guard cutters' ineffectual blockade. From South America other vessels made their way to the shores of the United States, seeking an opening in the thin preventive curtain set up by Ame~ican law enforcement officers. And from Canada's coastal cities and border crossings, "rum- runners" and bootleggers left daily to bring liquor to eager American customers. The demand for the product was being very satisfactorily met. Prohibition officials soon realized that a great deal of money would be required if the smuggling of liquor into the United States was to be eliminated and the Volstead Act enforced, sums far beyond the $6,350,000 2 granted for enforcement in 1921. Blocking "rum-running" on the high seas effectively and patrolling successfully the Canadian-American border were expensive operations. A financial appropriation adequate to the need would bave helped to make prohibition enforcement practicable. But while an overwhelming majority of states had ratified the Eighteenth Amendment, Most Congressmen recognized tbat its widespread flouting clearly reflected prohibition's unpopularity.

l The area where "rum-runners" hovered off the Atlantic and Pacifie coasts became known as ttrum-row." See Robert Carse, Rum Row(New York, 1929).

2 Asbury, p. 135. 12.

They knew that after the high taxes of the war the American people would not accept additional levies for a law few of them supported. An alternative solution was highly desirable. American officials saw the answer to their problem in international

cooperation. If foreign countries could be induced to help the United states enforce the Volstead Act, liquor smuggling could be drastically reduced without the need for additional expenditures.

A substantial portion of the liquor entering the United states CL~e from . -CZréat Britain and its Dominions. The United States government, therefore,

sought cooperation from the British government. Early in 1922 it proposed a treaty with Great Britain which would give American prohibition agents the right to search and seize, up to a distance of twelve miles from the United States coast, vessels suspected of carrying liquor. Such an extension of territor1al waters beyonè the recognizeè three mile limit would provide

more manoeuverability for the coast guarè in its efforts to keep tlrum-

runningtl vessels from American shores. It would make it easier to chase them out to sea or capture them and confiscate their cargoes. The British government was initially reluctant to comply with the American request but eventually it presented the proposal to an Imperial Conference held in October 1923. A committee of the Dominions studieè the matter and, subject 1 to one change, recommendeè approval. The Committee felt that a "twelve mile lindt" would be di.fficult w ct.termine because of the ragged nature of the

1 Canada's reaction to the treaty 15 discussed on page 68. 13. coastline and preferred to e:rlend the right of search and seizure to one 1 hour's steaming distance from the coast.

On Janua.r;V 23, 1924 Great Britain and the United states signed the 2 agreement. Shortly thereafter a1l of the Dominions ratified the Convention in their own par1iaments. This Convention, along with the gradual strength- 3 ening of the United states coast guard, succeeded in large measure in 4 preventing the smuggling of liquor into the United states from the high seas.

The United states had solved a part of its foreign 1iquor prob1em. The

1 Department of state Publications, Papers Re1ating to the Foreign Relations of the United states, 1922 (Washington, 1937), Vol. l, pp. 560-563 and 578-.580. (Hereafter referred to as Foreign Relations Series). Unfortunately, neither the United states nor Great Brita.:in thought out the wording of the treaty carefully enOtlgh. In subsequent years (see Infra, p. 128) their failure to define precisely the terms of the treaty led to serious international complications.)

2 The text of the treaty is printed in Foreign Relations Series, 1924 (Washington, 1939), Vol. l, pp. 158-161. The events preceding the treaty are in the same series for 1923, Vol. l, pp. 164-166, 203, 209, 217-21.9, 221.-223. 3 By 1928 the coast guard had 22 cruising cutters (first class), 15 cru1sing cutters (2nd class), 24 destroyers, 38 harbour cutters, 33 125-foot patrol boats, 13 lOO-foot patrol boats, 194 75-foot patrol boats, 13 other patrol boats. 75 cabin picket boats and 32 open picket boats. The increased size of the coast guard !leet was not a violation of the agreement reached at the Washington Naval Conference (1921-1922). The signatories had agreed to limit the number of battleships but no agreement was reached in regards to destroyers and cruisers.

4 In 1928 l-iabel Willebrandt, Assistant Attorney General in charge of Prohibition, reported that liquor smuggling into the United states from the high seas had been drasticall.y reduced. See "The Rom War on the Canadian Border," L1terary Digest, Vol. XCIX(22 Dec., 1928), pp. 1-4. 14.

1 new treaty he1ped dam the thin stream of 1iquor fiowing into the United States trom England and its overseas Dominions. But this was the 1esser part of the dif'fiOUlty, for the bulk of the spirits entering the United states came not

.by way of the high seas but from Canada. By land and by water, across the

Great Lakes, over the Quebec-Maine and Detroit~indsor border crossings,

along the Lake Champlain, st. Lawrence and Maritime wa ter routes 1iquor

entered the United States. There were 400 roads that were c1assif'ied as 2 "good to fair," 150 that were "passable" and 100 known traUs, al1 ot them

potential paths for the smugglers. The Vo1stead Act had been in force for only

a short time before American prohibition officiaIs rea1ized that 1iquor

smuggling from Canada was frustrating their efforts to enforce the law.

Basic to the American prob1em of enforcement was the divergence between

the Canadian and American 1iquor laws. The prohibition movement in Canada had

its dedicated and active proponents. The sustained effort to secure anti-

liquor 1egislation in the United states during the latter part of the 19th

century was matched in intensity in Canada. The Women's Christian Temperance

Union, various prohibition unions, clergy of aIl denominations and many other

Canadians were alarmed by the pauperism, death, crime and vice which they

1 The 1924 agreement was variously known as the Treaty of 1924, the Convention of 1924 and the Ship Liquor Treaty ot 1924.

2 Asbury, p. 263. 3 Border Cities Star, Il June, 1923, o. 1. 15.

1 suspected stemmed from the consumption of alcohol. They urged both the Federal and the Provincial governments to adopt prohibitory legislation. Nevertheless, despite substantial popular support and considerable success at the local and provincial levels, nothing comparable to the Eighteenth Amendment vas passed in Canada. The Canadian prohibitionists faced 2 constitutional and social problems which American "drys" escaped.

In both Canada and the United states jurisdiction over the liquor trade vas divided between the Federal and state or Provincial governments. The United States Federal government exercised control over foreign and interstate commerce in liquor. Laws relating to the manufacture and sale :3 of liquor were within the competency of the individual states. In Canada,

~ decisions of the Privy Council, the Federal government gained juris- diction over the manufacture, interprovincial shipment, import and export of liquor. Intraprovincial sale, transportation and possession were provincial 4 responsibilities. Because of th:i.s separation of powers, any attempt by the

Federal governments of either country to pass a nation-wide prohibition law, 5 except under strict emergency conditions, would have been declared ultra-vires.

1 F.S. Spence, The Facts of the Case (Toronto , 1896~.

2 Richard de Brisay, "Canada Turns Against Prohibition, Il The Nation, Vol. CXX(April, 1925), pp. 460-2.

:3 The Webb-Kenyon Act of 1917 provided that liquor transported into astate was subject to the laws of that state. This limited the power of the Federal government over interstate commerce in liquor.

4 Bora Laskin, Canadian Constitutional Law(Toronto, 1966), pp. 204-216.

5 See Infra, p. 17. 16.

The prohibitiomsts might temporarily achieVe their objective 1.1' both levels ot government outlawed the activ1ties umer their jurisdiètions.

HOIIsver, the detection of one province or state would breach the prohibition vall. For the temperaœe advocates to be totally successf'ul, a statuts biming the entire country was nec essary • This Dl_nt f'iming a method of' meeting the constitutional dif'f'iculties created by the division of' jurisdictions. Securing amemments, by which prohibition became a part of' the constitution, provided the only possible solution to the problem. In the

United States the constitution provided spec1f'ically f'or the ameming process.l

When tbree-quarters of' the states accepted the Congress resolution that the mamf'acture, sale, cODSUlllption, importation am exportation of' l1quor be forbidden, prohibition became law. Recalcitrant states, such as Rhode Islam, am Connecticut, were legally boum to accept the decision. They could ~t accuse the Federal goverllllent of' intringing upon their rights. In Canada, hovever, there vas no ame!ding procedure written into the British North

America Act. This did not preclude the adoption of' f'ormal amendllents. The

Canadian constitution, as a British statuts, cou1d be amemed by a normal act of' the British parllament. The tvo houses of' the CaDadian parliament requested the British goverœent to eDllct the des1red provisions am the latter passed the nec.ssary legislation. Hovever, because th.re vas DO aaeDiing procedure in the British North America Act, the roI. of' the imiv1dual

1 The events leading up to the passage of' the Eighteenth AlIeDdment am the Volstead Act are disCU8sed~n As'bury, pp. 129-143. 17.

provinces in the aJllerdillg process vas vague am iDiefiDite. Some theorists have argued that in cases in which provincial rights are attecteel provincial 1 consent is necessary betore Ottawa can seek a change in the constitution. 2 Others deu,y that the Federal government is obligateel to consult the provinces. 3 In tact, a namber ot aJllendments wer~ adopted without prior provincial consent am unanimity aJllong the provinces appears not ta be absolutely essential.

Nevertheless, the Veeleral goverllllent would tim i t politically prudent to have the support ot a11 the provinces am would be reluctant to Act it a~ one ot the provinces objected. Thua, in contrast to the sitdtion in the United

States, Canada's prohibitioDists requireel majority support tbroughout the entire country, politically it not constitutionally.

As the prohibition lIloyement in Canada intens1f'ied its campaign against the liquor trade, it becaJlle clear that ther. was sustaiD8Ci opposition trcm 4 Quebec. In 1878 the Federal goverllllent passeel the Canada Taperance Act.

1 Gerin-Lajoie. ConstitutioDILl Amendment in Canada(Toronto, 19.50), pp. l53tt. N. MeL. Rogers, "The Cœpact Theory ot Confederation," Proceed1ngs. Canadl.an Political Science Association, Vol. III(193l), pp. 205-30.

2 R. MacGregor Dawson, The Goverllllent ot Canada(Toronto, 1967), pp. 126-139. 3 Dawson, p. 131: Lajoi., p. 178. 4 Statutes ot CaIlaCia, Vol. 1 am 2(8 Feb. ,-27 March, 1878), pp. 81-123. (The Canada Temperanee Act vas challenged on the grOUDls tbat i t vas an intringnent upon the prari ne es , jurisdiction oyer property ani civil rights. HOliever, the Act vas decland irrt.ra vires in that it caae UDiar the "peace, order ani good goverœent" clause ot Section 91 ot the B.N.A. Act(Laskin, pp. 197-204), Later courts, bOliever, 11l111ted the right ot the Federal gover.. ent to apply th1s c~!lse. (Dawson, pp. 98-99». 18.

This act allowed Canadian counties, cities and towns the right ta outlaw, by vote, the sale ot liquor in their ôwn districts. The prohibitionists achieved considerable success in all ot the Maritime Provinces and scattered success in Ontario but Quebec failed to take advantage of this 1 local option plan. The Canada Temperance Act did not produce the success for which the "drys" had hoped.

In the l890's optimism among the prohibitionists rose. Provincial plebiscites in Manitoba, Prince Edward Island, Ontario and Nova Scotia had 2 produced a combined majority of 132,918 in tavour ot prohibition. Canada' s

temperance retormers urged Sir Wilfrid Laurier to hold a national ~ef.rendum

and, in 1898, a vote was taken. The results gave little coaf'ort ta the prohibitionists, tor the majority in their favour vas a meagre 13,000. Quebec 3 voted against the proposed measure by 122,000 to 28,000. Laurier took no action on the matter. H. had no des ire to encourage another conflict between English Canada and Quebec and therefore claimed that the majority vas too 4 small to provide an accurate reflection ot the country's will. Quebec had not alvays rejected prohibition. Some ot the earliest

temperance societies in Canada were Roman Catho1ic and French-speaking

1 Spence, Facts, pp. 155ft.

2 Ibid., p. 304. 3 Joseph Schul.l, Laurier, the First Canadian(Toronto, 1968), pp. 372-3.

4 Ibid. (The tact tbat cities and towns outside ot Quebec could still become "dry" under the Canada Temperance Act undoubted1y reduced the criticism ot Laurier trom Eng1ish Canada.) 19.

During the l840's Father Charles Chiniquy carried on a relentless campaign , , , against the ef'fects of liquor. His book, Manuel des Societes de Telllperance, 1 sold 4000 copies in the first six months fo11owing its publication in 1844.

In 1847-1848 he converted some 200,000 people to the idea of temperance. French-Canadians set a high moral standard for themselves and vere quite prepared to see the ev11s of' drunkenness elim1nated.

In the years fo1lowing Confederation, however, the re1ationship between French and Engl1sh-speaking Canadians intensitied French-Canadian opposition towards prohibition and reduced the possibl1ity of' the passage of' a 1aw s1m11ar to the Vo1stead Act. In the United States the English language, and the Anglo-Saxon civ11ization and politica1 culture, vere paramount. Anglo- Saxon mores and ethics vere accepted as superior to all others. The American, particularly the native-born, vas subjected to a sustained pressure to conform to this "superior" vay of life. The "American vay of' lite" developed a specifie

mystique of' its own, and majority opinion vas given the sanction of' social and 2 ph11osophical acceptabl1ity. As prohibition sentiment increased in the United states aven Americans who opposed i t vere expected to "submi t to the 3 majority verdict in a sportsmanlike and American way." The French-Canadian, on the other band, comprising one-third of Canada's population, struggled

1 Mason Wade, The French Canadians,(Toronto, 1968), pp. 390-1.

2 Hofstadter, pp. 8ff. 3 "Probable Ef'fects of Nation-Wide Prohibition," LitArary Digest, \"01. LX (Fab., 1919), pp. 11-13; "Catholic o.fence of Prohibition," Ibid., Vol. LXII (July, 1919), p. 32. 20. for linguistic, cultural and religious self-determination among a federal

English majority. He savas bis enemy the "English-dominated" state and he feared the impact of all state legislation, whether introduced by the 1 Federal or th. Provincial governments. Re recognized the moral value of temperance. Re was not prepared to be told by English institutions hov 2 he should conduct bis life. He felt little compulsion to accept the standard of morality set by English Canada.

B,y the turn of the centur,y the probibitionists in Canada had still achieved f'ev tangible results • But such groups as the Dominion Alliance f'or the Suppression of' the Liquor Trade, the Prohibition Campaign League, the Canadian Temperance League and the ~oyal Templars of' Temperance continued to preach against the sale of' intoxicants. They vere unsuccessf'ul. in achieving a nation-wide prohibition lavJ but capitalizing on the growing 3 4 desire for r"f'orm in Canada, particularly in the rural areas, they attained considerable success at the provincial and municipal levels. More and more cities and towns vent "dry." Prince Edward Island outlawed the retail sale of' liquor in 1900. The provincial governments of' Alberta, Saskatchewan and

1 Michel Brunet, "Trois dominantes de la pensée canadienne-fran~se; l'agricu1turisme,l'antiCtatisme, et la messianisme," in La Pr/sence anglaise et les Canadiens (Montreal , 1958), pp. 113-166.

2 Carleton Stanley, "Th. Canadian Liquor System," CUrrent Ris tory , Vol. XXXI(Oct., 1929), p. 74. 3 See Infra, pp. 43ff.

4 W.L. Morton, The Progressive Party in Canada(Toronto, 1950). 21.

Manitoba made no definite commitment to the prohibitionists but they were now seriously considering adopting more stringent liquor laws. The outbreak of the First World War helped immeasurably to further the cause of "temperance." The advocates of prohibition insisted that the use of valuable materialsin· the manufacture of liquor constituted an economic waste 1 the country could not &fford. Drunkenness in the face of the need for full 2 mobilization of the nation's manpower was, more than ever, a grievous sin. Sacrifice for the war effort was a slogan upon which prohibitionists could build. In 1915 Saskatchewan outlawed the retail sale of liquor. Manitoba, Nova Scotia, Alberta and Ontario announced a similar move in 1916. Two-thirds of Canada's provinces had banned the retail sale of liquor. But the prohibitionists' victory was far from complete. Distilleries and breweries continued, under Federal law,. to manufacture their product to,::, exporte The Federal government also permitted the interprovincial shipment of liquor and liquor companies could thus legally ship their product to Any 3 province, even those in which the retail sale of liquor was illegal. Unless the prohibitionists could convince ottawa of the need for nation-wide prohibition, liquor would still flow freely in the Dominion. The prohibitionists faced an awkward situation. When the pressure from temperance reformers became ditficult to resist, each level of government, federal and provincial, interpreted the constitution so as to fb responsibUity

1 Toronto Globe, 28 March, 1916, p. 4.

2 J .M. Bliss, "The Methodist Church and World War l," Canadian Historical qeviev, Vol. XLIX(Sept., 1968), pp. 225-6. 3 Liquor firme could Alsa transport their product from a ~t" ,to a "dry" area within a province. 22.

l tor liquor control on the other. The Federal government could have requested the British parliament to amend the constitution or, under its wartime emergency powers, enacted 1egislation outlawing the liquor trade comp1etely; but it knew that it would be politically unwise to do so when Quebec, British 2 Columbia and Nev Brunswick had not enacted prohibitory 1aws. It theretore c1aimed that the essential element in the liquor traftic was its sale and 3 it was within the provincial jurisdiction to prohibit thi~ sale. The Provincial governments, on the other hand, claimed that the lawfUl manufacture ot liquor and the right to ship it to any province destroyed the effectiveness 4 of a prohibition lave The constitution provided each level ot government vith an excuse tor inaction.

As the var continued support tor prohibition increasad. In 1917, New Brunswick and British Columbia banned th. retai! sale of liquor. Two-thirds ot Quebec vas now "dry" under the Canada Temperance Act. Then, in January 1918, the Federal govemment took the initiative in the struggl. against

intoxicants. ottawa announced that i t planned, as a warti~ measure, to

torbid the interprovincial shipment, sale in a "dry" area and manufacture of 5 liquor. This dec1sion, in turn, stimulated the Quebec government to action

l Ben H. Spence, "Prohibitory Legislation in Canada," Annals ot the American Academoc ot Political and Social Science, Vol. CIX(Sept., 1923), pp. 230-264.

2 Henry BOrden(ed.), Robert Laird Bordenl His Memoirs(Toronto, 1936), p. 592. 3 Montreal Gazette, 1 March, 1918, p. 10.

4 Toronto Globe, 20 ~arch, 1916, p. 4 and 23 March, 1916, p. 4.

5rn Decelllber 1917 Ottawa outlawed the importation ot 1iquor into Canada. 23.

and on January 29 Attorney General Walter Mitchell introd.uced a bill which 1 would make Quebec "dry" on May l, 1919. Mitchell and Premier Sir Lomer

Gouin (190.5-1920) claimed that it would serve no useful purpose to issue

licenses for the sale of a product which could not 1egally be manufactured, 2 imported or brought in from another province. Moreover, Quebec was not

unaffected by the demands for that higher standard of morality which, in

the other provinces, had become a concomitant of the wartime psychology.

Despite the bitter controversy over conscription, many French-Canadians fe1t

that some sacrifice for the war effort lIlUst be made. La Presse wrote that the

national interest was "la seule consideration~ qui ait pousse~ le gouvernement 3 . de Quebec ••• " Mitche1l's bill had no iDunediate bearing on prohibition. Areas

such as Montreal, Sherbrooke and St. Hyacinthe remained "vet" for another

year. But the passage of the bill provided for a degree of unanimity on the

liquor question hitherto absent in Canada. The Federal government could enact 4 its Order-in-Council without fear of opposition on constitutional grounds.

The Canadian prohibitionists had won their victory. But i t had been

1 Montreal Gazette, 8 Feb., 1918, pp. 1 and 12.

2 The precise regulations of the Order-in-Council, made known a IIIOnth after the nn 1av in Quebec, actually made it possible for "vet" areas in the province to acquire 1iquor. Liquor manufacturers vere permitted, untl1 December 31, 1918, to produce 11quor for sale in cit1es and towns wb1ch had not opted for prohibi~ tion. See Canada Gazette~ II March, 1918, pp. 1-3. 3 La Presse, 8 Feb., 1918, p. 3. 4 Toronto ~, 8 Feb., 1919, p. 6. 24.

a paintUl process and there vere ear1y indications that it would prove mach 1ess permanent that that achieved by their American fe110w-prohibitionists.

In the United states, between 1915 and 1920, the number of breweries decreased from 1568 to 583, a dec1ine of 62.8~. In Canada the corresponding figures 1 vere il8 and 69, a drop of 41%. Most of Canada's brewers viewed the increase in prohibition sentiment sole1y as a product of wartime patriotisme They were convinced that at war's end they would again reap profits from the l1quor trade.

The optimism of the majority of Canadian brewers proved jus t1f'ied. In

May 1919 the Federal government, feeling that Par1iament should vote on its wartime Order-in-Councll, introduced 1egis1ation to extend prohibition for an additiona1 year. The 1egis1ation passed the House but the Senate vetoed it 2 on the grounds that i t was an infringement of prov1nci~ rights. The sale of 1iquor was a provincial responsibi1ity ànd section 121 of the British North 3 America Act al10wed goods to be fre~ transported between provinces. The

interpro~c1al shipment, importation and export of 1iquor again became 1egal 4 and this deve10pment adm1n1stered a major b10w to the prohibition movement. At the same time, the provinces began to abandon restrictions on the sale of

1iquor. A plebiscite in Quebec in May 1919 produced a majority ot 100,000

1 Brewers Association of Canada, Breweries in Canada(Montreal, 1965), p. 83.

2 Canada,_ Debates of the Senate, 2 July, 1919, pp. 817tt. 3 Montreal Gazette, 12 April, 1919, p. 12; 14 April, p. 10; 31 May, p. 10; 20 June, p. 10; 4 July, p. 10. 4 Toronto Globe, 3 June, 1919, p. 6. against total prohibition and the sale of light vines in restaurants and 1 hote1s became 1egal. In 1921 Quebec and British Columbia, 100king tor additional sources ot revenue vith Which ta meet growing provincial expenses, '2 introduced govemment sale of liquor. Manitoba followed in 1923 and Alberta in 1924. Opposition to proh1.bition lIOunted in Ontario, Saskatchewan and New

Brunsvick. • '-" Canadians vere c1ear1y not disposed to follow the American 1ead into a

"noble experiment" ot their OWD. They recognized the tutllity of restrictive

1iquor 1egislation. They te1t that it did nothing to decrease drunkenness and

vice. They witnessed the crime, violence and bruta1ity vh1ch acccmpanied

prohibitory regulations in the United states. The cause ot prohibition in 3 Canada may not have been "still-born when it came," but, 1acking the solid

toundation ot massive public support, it JD9t with inditterent success.

Can~a had thus rejected proh:1b1tion. The United states, on the other t band, had enacted rigid proh:1bitory 1eg1s1ation. The prox1mity ot the two

countries, one 1egal1y "dry" but hous1ng 1II&Dy "vets," the other 1egal1y·"wet" • but inc1uding many "drys," created dUticul.t1es wh1ch could not easi1y be

surmounted •

With the sale ot llquor now 1egal in Canada, thirsty Americans fiocked, 4 tirst to Quebec and British Co1Ul1lb1a, and then ta other provinces. If they

lIn accordance vith Mitche11 t s bill of February 1918 bars c10sed on May l, 1919. Also, those cities am tovns which vere "dry" under the Canada Te1!lperance Act vould have to vote again if they wished the sale ot wine ta he 1egal.

2Donald V. Sil1.1ey(Ed.), The Rowell-Sirois ~.port(Toronto, 1963), pp. 146-7.

3de Brisay, "Canada Turns Against Prohibition," pp. 460-462.

4ororonto Globe, 14 Feb., 1929. p. 1; Victor1.a Daill Co10nist, 15 March, 1930, p. 6. -- 26.

1ived within driving distance ot the Canadian border they were no longer compelled to risk involvement with prohibition otticers to acquire 1iquor.

They had only to cross the border to tind willing Canadian vend ors to til1 their needs. The Model "T" Ford had brought the automobile into its own.

The Lord Selkirk Highway in Manitoba wu completed in 1924-1925 partial1y,

at 1east, to accommodate Americans driving in trom the Northwestern states 1 tor their alcoho1ic beverages.

But Canada was more than a retuge. tor.., tldrsty Americans. American

tourists entering Canad'a returned with large quantities ot Canadian 1iquor.

They hid this 1iquor in every receptac1e at their disposal, trom oversised

c10thing to egg she11a, hot water bottles and bab,y carriages. They drove 2 cars, boats and airp1anes, 1aden with liquor, across the border. A cons ider-

able &Mount ot 1iquor vas being bought 1egally in Canada and then smuggled

il1egally into the United states. These American tourists vio1ated no

Canadian 1aw and neither the Federal government, nor the Provincial government

which protited direct1y trolll the sale ot liquor to Americans, intertered wi th

their activities. The American border otticials tound it virtua11y impossible

to prevent a vast intlux ot smuggled liquor. This substantial nov ot 1iquor constituted a mere trickle compared to

the vast quantities being sent to the United States b,y a highly-organized,

well-tinanced, etticient, proteasional smuggling operation. Canada's

1 Buftalo Evening News, 6 July, 1926, p. 2.

2 Asbury, pp. 258-9. 27.

cH.st1l1eries and breweries were eager to exchange their beer and whisky tor American money and they capitalized almost immecH.ate1y on the nev opportunities tor expansion. They began constructing adcH.tional cH.sti11eries. In 1920 there 1 were 4 cH.sti11eries in Canada. By 1925 this number had grown to 15. They increased the production ot beer, trom an average of 540,000 gallonsper brewery 2 in 1920, to 670,000 in 1925. They bui1t export docks Along the border, to store 1iquor pencH.ng i ts exporte They deve10ped subst&ntial merchandising :3 organizations to increase the demand for their particular brands. They enlisted

Canadian and American bootleggers, w:U1ing to risk death tor the "big money" 4 they might earn, to transport the 1iquor te the United states. By 1924 close 5 to $9,000,000 ot CanacH.an 1iquor was tincH.ng its vay across the border. The cH.stilleries and breweries were reaping the rich protits made possible b,y the opening up ot nev markets.

Canada' s 1iquor export dealers were carry1ng on a perfect1y 1egitima. te

1 PersoDal 1etter to the author trom the Dolllin1on Bureau ot statistics, 11 May, 1970.

2 Breweries in Canada, p. 94. (The tact that prohibition 1I&S no longer in ettect in Canada partly exp1ains this· incre~e. But the American d.emand vas an important cause ot the augmented production.) :3 Royal. Collllllission on CustolllS and Excise, Evidence, James Hunter(Conso11d&ted Exportërs CômpanyJ, voie j, 29 Nov., 1926, pp. 1281-7. 4 ~. 5 Montreal Gazette, 5 Jan., 1929, pp. 1-2. 28.

Canad.ian trade. Until 1922liquor manufacturers were permitted to export their product to any foreign coun~ free of all restrictions. Despite the Volstead

Act, the Canad.ian government saw no reason to exclude the United States from the application of this policy.

In 1922 ottawa realized that its liquor export policy was costing Canada 1 considerable revenue. An excise dutY of $9. per proof gallon was levied on whisky, gin and other spirits sold by a dist1llery to a provincial liquor control board for domestic consumption. A dutY of l2t; per gallon vas levied 2 on beer sold in a similar manner. The Customs Depar'tment found that liquor. ostensibly bound for such countries as Cuba, Great Britain and the islands of St. Pierre-Miquelon, was smuggled back into Canada and sold 1llegally.

In this way liquor dealers not only escaped payment of the excise dutY but also deprived the provincial governments of potential liquor profits. In

September 1922 the Federal government, determined to end this costly evasion. passed legislation requiring exporters to furnish a cash bond on all shipments 3 of liquor to foreign countries. When a landing cert1ficate was produced giving ev:ldence of delivery in the country of export the bond wu released.

Fallure to produce such a land1.ng certificate meant confiscation in full of the cash bond. The Customs Department hoped that this would end all 1llegal sllltlggling of liquor into Canada.

This new law threa tened ta create a serious problem for Canadian

1 An excise duty 1s a sales ta.x lev:led on a domestic manufacturer, on the sale of bis product w1thin the country of manufacture.

2 Regulations governing the sale of beer varied from province to province. In British Columbia. New Brunsvick and Saskatchewan ail beer had to be sold by the liquor control boards. In the other provinces the regUlations vere less stringent. See Breweries in Canada,_ pp. <}8-110. 3 The cash bond amounted ta double the no1"1llÙ. $9. excise duty • 29.

exporters, who were now carrying on an extensive trad.e vith American customers. Since liquor could not be landed legally in the United States, there was no way in which they could. produce a legal Amer1can landing certi~icate. The Canadian government, therefore, seeking to redress an unf'avourable balance of trade caused by wart1me ~inancing, devised a - l special procedure for exports of liquor to the United. States. Canadian distilleries and breweries paid the regular excise du~y and were excused

from producing landing certificates. Though i t knew that the liquor was

destined for a "dry" country, the Canadian government asked no questions.

When the excise d.uty vas paid exporters had. comp11ed vith the Canadian law.

The government ignored the1r subsequent dealings vith the liquor.

The United states authorities, alarmed by the amount of Canad1 an liquor

entering their country, but.. reluctant to pay the heavy priee enforcement of

their law would involve, saw the solution to the problem in cooperation from

Canadian authorities • .Members of the state Department and the Treasury

Department (which enforced prohibition until 1930, when prohibition enforcement

was transferred to the Department of Justice) fel t that they might be able to

persuade the Canadian Federal government that the "comity of nations" called for

Canadian cooperation and that it was no more than right for one friendly neighbour 2 to help another to entorce its lava. If ottawa, wb1ch had sole jurisd1ction

1 Canada, House of ColIDIIOns Debates, 8 June, 1929, p. 3455. (Hereafter ref'erred to as Debates.)

2 United states Department of state Records(National Archives, Washington, D.C.), File No. 8ll.114!1223, Edward Cl1tford(Assistant Secretary of' the Treasury Department) to Secretary of state C.E. Hughes, 29 Jan. t 1923. (Here­ atter referred to as Records .. ) 30.

1 - over the liquor export trade, could be induced to prohibit liquor clearances to the United states, American officials aould transfer the1r burden to Canadian authorities and lift from their own taxpayers the necessity of paying for the enf'orcement of an unpleasant, unpopular and expensive law.

1 s •• Infra, pp. 46-41. CHAPTER 11

MACKENZIE KmG' s DILEMMA

In March 1923 the American State Department formally requested

Mackenzie King's Liberal government. e1ected in December 1921. to refuse 1iquor clearances to the United states. This request, invo1ving Canadian assistance in the enforcement of the 1av of a foreign country, vas vehemently debated in Canada at both the governmental and public 1eve1s.

The government's rep1y to th1s and succeed1ng American requests for cooperation invo1ved a comp1ex set of economic, moral and po1itical considerations.

During the iJllllled.iate post-war period. C~"'l8da found herse1f in serious financial d1fficu1ty. The var had cost the country $1,670,000,000 of which only $440,000,000 vas raised through var taxes. By the close of hostilities

Canada vas also supplying Great Brita1n vith substantial credits. The growth of an extensive var indastry had requ1red vast SWIIS of capital. The country had, in ad~tion,embarked on a 1arge-scale expansion of its rai1way network. The goverJUl8Dt borrowed $2,000,000,000 vithi.."l Canada itseU' and considerable addition&! tunds vere raised in the United states. Between 1914 and 1920 1 the tederal debt rose trom $5.54,391,368 to $3,014,483,774. In virtually

1 Deba'tes, 18 May, 1920, pp. 241srf. 32. the sarne period, 1913-1921., American investments in CalUlda treb1ed to

$2,300,000,000, requiring extensive interest, dividend and capital amortization payments. Every availab1e source of revenue vas needed if

Canada was to avert a major financial crisis. The export of liquor to the United states offered some relief to the

Canadian economy. Between 1921 and 1924 the &Mount of Canadian liquor exported 1 2 to the United states rose from 8% to 5~ ot the total exported. The

Dominion government col1ected an excise dutY ot $9. on each proot gallon ot this liquor being shipped across the border. In 1922 the revenue collected trom excise duties on liquor totalled $205,905. B.y 1923 this had increased to 3 $361,320 and by 1924 it had grown to $2,435,702. In this same year the 4 government collected $421,995 trom a sales tax on 1iquor. Farthermore, the

9,000,000 American dollars the liquor trade was bringing into Canada b.Y 1925 helped at 1east modest1y to otfset the untavourable balance of Canadian- American payments. The American consul at Windsor, Ontario correct1y assessed the attitude ot many Canadians when he wrote that cooperation vas un1ike1y "especially as ••• the Dominion reaps a substantial benetit, Vhich it not 5 forthcoming, would have to be made up from some other source.-

1 Sessional Papers(2nd Session ot the 14th Parliament), Vol. 3(192J}, Sessional Paper 6, p. 1295.

2 Montreal Gazette, 5 Jan., 1929, pp. 1-2. 3 Debates, 10 March. 1930, pp. 416-7. 4 Ibid. 5 Records, File No. 811. 114Canada/786 , Consul at Windsor to 3ecretary ot State Frank Kellogg, 12 Sept., 1925. 33.

Specitic groups in Canada a1so had ecoftomic reasons tor opposing cooperation. Understandab1y, the 1iquor interests exarted great pressure 1 on the government tor favourab1e 1iquor 1egis1ation. So, too, did other Canadians who derived economic benetits trom the increased production ot 1iquor. The expanding liquor trade he1ped to alleriate the prob1em ot post- war unemployment. It not only created additional emp10yment within the distilling and brewing tirms but a1so provided jobs in the manufacture or glassware, in the bott1ing industry and in the shipping industry. The distilleries and breweries vere absorbing a considerable quantity ot grain - malt, oats, rice, corn - and this seemad to otter some relier trom 2 the hardships being endured by the Canadian 'larmer. It would he incorrect to assume that labour and the tarming element unanimously opposed cooperation

vith the United States. Rev. J .S. Woodsworth, the Labour-Independent M.P.

for Winnipeg North Centre, haè long been 1eading a crusade against intoxicants and he was one of the principal supporters ot cooperation. Moreover, tarmers generally vere &Mong the leading proponents ot a ban on elearances, 3 placing moral considerations above economic benafite. Nevertheless,

tactions within these groups opposed legislation which would he detrimental

1 See Infra, p. 87. 2 Debates, 10 March, 1930, pp. 416-7. 3 See Infra, pp. 43ff. 34. to their economic interests.

Many Canadians living in border communities rejected cooperation.

Approrlmately 6% of Canada's distillery products and 85~ of its beer was shipped across the Detroit-Windsor border, involving a substantial number of 1 men and a large fleet of trucks, as wall as service facilities. Such areas as Amherstburg, Leamington, Kingsville, Port Stanley, Port Dover, Port

Colborne, Port Credit, Wh.itby, Belleville and Niagara Falls also profited from the "rum-running" trade. In Quebec, st. Stanislas, Beauharnois, cateau

Junction, Farnham, Valleyfield and Chtteauguay benefited from the liquor 2 export trade. "Local business" was stimulated by the export of liquor and most Canadians living in these areas wanted little part of any legislation 3 intended to destroy it.

The econom:1c advantages being derived from the liquor export trade

made Canadians reluctant to cooperate with the United states. This

reluctance was intensified by the fact that American fiscal policies were

aggravating Canada' s economic plight. During the preceding decade the

United States had become the world's greatest creditor nation. Canada had

counted on her exports to Great Britain to produce the American currency

1 Frederick Edwards, "Men Will K1ll for ~sky," Maclean's Magazine, Vol. XII(l Dec., 1929), p. 14.

2 Toronto Daily Mail and Empire, 5 Jan., 1929, p. 1. See Records, File No. 811.114/3360, Consul at Kingston to Hughes, 15 March, 1924. 3 Records, File No. 811.114Canada/786, Consul at Windsor to Kellogg, 12 Sept., 1925. 35. she required to meet both her extensive purchases from the United states am the interest payments on her substantial United States 10ans. In 1920 the United States government withdrew its support from the international exchange market. Canadian currency dropped in value, forcing the country to paya bigher price for American goods. At the same time European money, inc1uding that of Great Brita1n, declined even more sharp1y. Now, with the disparity between the value of British and Canadian currency, the cost of

Canadian merchandise to the British importer increased. The British buyer was forced to restrict bis purchases and exports to the United Kingdom 1 dec1ined. Moreover, the Engl.1sh currency Canada received brought a lower return on the American money market and so failed to compensate for the rising cost of purchases from the United states. The fiscal equ1librium which 2 Canada had ma:1ntained untll 1920 was destroyed. And the value of' the Canadian dollar, already under pressure in an open nrrency market, vas p1aced in 3 fUrther jeopardy.

The rising United states tarif'f created an additional source of' irritation for Canadians. The Fordne~McCUmber revision of' 1921 set rates on agricultural products such as bard wheat, cattle, potatoes and dairy products unpara11e1ed in United states bistory. The Canadian fishing

1 Sessional Papers(4th Session of' the 14th Parliament), Vol. 3(1925), Sessional Paper 6, p. 40. 2 Hopkins, Canadian ADnual Rev1ew.1920 (Toronto, 1921), pp. 22-30. 3 J. B. Brebner, North Atlantic Triang1 e(Toronto, 1945), p. 295. 36. industry nov found itse1f unab1e to compete in American markets and the tariff rates on important manufactured goods, such as coal, tar and dyes, 1 2 became prohibitive. In 1ess than a year the "Chinese Wall tariff" had caused a dec1ine in Canadian &%ports to the United states of over 3 $250,000,000. This 1055 of the American market compelled the Canadian producer to export bis goods to other foreign countries - Great Britain,

Germany, Japan and Australia. As a result of United states fiscal po1icy, however, European countries could not dford to buy the large quantities of Canadian goods being produced. Furthermore, the monetary value in

United states currency of exports to European countries vas considerab1y. reduced. American tariff regulations, coup1ed with its fisoal po1icy, 4 added two y.ars to the post-war Canadian depression and resulted in widespread anti-Americanism.

Canadians were disturbed by the impact of United states dODl8stic po1icies on their economy. They were also disturbed by what they regarded as the

United states failure to consider Canada's interests in diplomatie

1 Brebner, pp. 294-6.

2 Toronto ~, 16 July, 1921, p. 4. 3 S.ssional pai:rs(4th Session of the 14th Par11ament), Vol. 3(1925), Sessional Paper ,p. 40. 4 Brebn.r, p. 297. 5 il.cords, File No. 811.114Ottawa Conference/30, Consul at ottawa to Hughes, 18 Jan., 1924. 37.

negotiations taking place between the two countries. Diplomacy between two friendly nations involved compromise and the United States vas showing little inclination to make the concessions Canada desired. The Atlantic fisheries dispute provided Canada with clear evidence of A'IIerican diplomacy at work. Beg1nn:1ng in 1888, following the failure of 1 the Bayard-Chamberlain negotiations, the Canadian government had been issuing licenses to United States fishing vessels, enabling them to enter - Canadian ports on the Atlantic to buy bait, ice,1ines and other equipment.

They could also tranship their crews and their catch. In return for this

concession ottawa asked that its fishing vessels be allowed to proceed from the fishing grounds to ports in the United states where Canadians, upon payment of dutY , might dispose of their catches. ottawa then asked that 2 its vessels be cleared to the fishing grounds. But not unti1 1918, under 3 the United states War Time Measures Act, vas Canada final1y granted access to

United states ports. In 1921. these priv1leges were revoked. Despite the fact that Canadians could no longer enter American ports, the Canadian government did not prohibit American boats from entering

Canadian harbours. The Canadian public urged the government to ban American vess6ls from the countr,y's ports but ottawa resisted the pressure,

1 James Morton Cal1ahan, American Foreign PolisY in Canadian Relations (New York, 1967), pp. 334ff.

2 Hopkins, Canad1an Annual Review, ~, pp • .54-55. 3 Foreign Relations Series, !2!2 (Washington, 1934). pp. 240-243. 38.

hoping that ultimately Canada would he given reciprocal concessions. No 1 action came from Washington. A reasonable Canadian attitude had not 2 produced a corresponding spirit of reasonableness among Americans. Many

Canad1ans resented the United states habit of "hoeing its own row in inter- 3 national politics." They wanted ottawa to use its barga1n1ng powers to the utmost in its efforts to induce the United States to deal more fairly vith 4 Canada. There were other areas of friction between the two countries. United states interests proposed plans for deepening the st. Lawrence waterway which 5 would provid.e litt1e benetit tor Ontario. Difficulties existed at the Detroit-

Windsor border, where American officia1s were being unduly strict in their treatment of Canadians travelling to the United states. The Canadian shipping ind.ustry was annoyed vith the diversion by the Chicago Sanitary ColIIIIission of 10,000 cubic feet of water per second out of the Great Lakes into the watershed of the D.linois and the Mississippi. The United States decision to place an embargo on the shipment ot coal to Canada created considerable hostl1ity in Ontario, where there vas an acute shortage ot the co_odity.

In the area of the divergent 1iquor 1avs, Canadians tound reason for

1 Hopkins, Canad1an Annual Rev1ew, ~ pp. 54-55.

2 Debates, 31 May, 1923, p. 3361. 3 Toronto Daily Mail and E!!p1re, 19 Sept., 1923, p. 6.

4 The Canadian government tinally terJa1nated American rights to enter Canad1.n ports on 31 Dec., 1923.

5 Hopkins, Canad1an Anm1al. Rev1ev 1923 , pp. 55-60. 1 resentment and bitterness. Prior to the "Anti-5mugg1ing Treaty" of 1924 the United states refused to permit Canada to ship 1iquor to the Canadian

Yukon. vay of Alaska and George Black, the Conservative M.P. for the Yukon. sWllDl1ng up the feè1ings of many Canadians. called this refusal a "decidedly 2 untriendly and abso1ute1y unnecessar,y act."

These United states po1icies angered Canad1ans and encouraged them to oppose Canadian assistance in the entorcement of the Vo1stead Act. American consular officials in Canada, reporting to the state Department, trequent1y disc10sed that their country's 1.ndi:tference to Canadian interests vas antagonising many Canadians who might orclinari1y have supported Washington' s requests for assistance. The Maritime Provinces remained "dry" during the ear1y portion of the Vo1stead Act; yet many in these provinces opposed cooperation with the United states. W. Henry Robertson. the American consul at Halifax. reported a conversation vith a local M.L.A ••

Mr. Kin1ey (M.L.A. for Lunenburg and. Minister without Portfolio) haB more than once expressed the opinion to me that. if the United States would give Nova Scotia free entry of her fresh tish into our country. public opinion would see to i t that rum running into the United States ceased abso1ute1y so far as Nova Scotia and its vesse1s vere concernad.

The antagonism which resulted from this inditference vas not restricted

1 See Infra. pp. 69-70.

2 Debates, 21 March. 1924, p. 554. 3 Records. File No. 811.114Canada/263. Robertson to Hughes. 19 March. 1924. See Records, File No. 811.114ottawa Conterence/SO. Consul at ottawa to Hughes, 18 Jan., 1924. 40.

1 2 to Any one area. Consuls in Ontario and Quebec warned the American government that their requests for assistance had few sympathizers in their areas. In the Prairie Provinces some farmers, 1nt1uenced by the 3 high American tariff, opposed cooperation. There vas &Iso a considerable 4 body of public opinion in British Columbia opposed. ta Canadianaid. Between 1920 and 1926 not a single consul reported that Canadians in his 5 area vere in favour of cooperation. The United States state Department May not have been particularly d1sturbed by the anti-American sentiment i ts policies vere fostering. But the obvious lack of American sympathy for Canad1an interests st1mulated opposition to Any measures which would assist the United States in enforcing the Volstead Act. Canadian opposition was intensified by the feeling that the United States was attempting to use its economic and po1itical power ta foist upon

Canada the burden of enforcing an American law. Canad~s wondered how

1 Records, File No. 811.114Ottawa Conference/8S, Consul at Toronto ta Hughes, 17 Nov., 1923. See also Records, File No. 811.114/137, Report or American Foreign Service, 18 Feb., 1923.

2 Records, File No. 811.114Canada/3409, Consul a t Montreal to Hughes, 15 March, 19241 Ibid., File No. 811.114Ottawa Conference/14, Consul at Montreal to Hughes, 14 Sept., 1924. 3 Records, FUe No. 811.114Canada/3077, Consul at Winnipeg to Kellogg, 7 Oct., 1926.

4 B.H. Stevens, 20 Dec., 1968(Personal letter to the author) S Almost all or the consular reports, however, came from urban areas. In the rural areas, where cooperation vas warmly supported, there vere orten no consular orric1&1s. 41. the United states could talk seriously about cooperation when President

Harding's Administration (1920-1923) had permitted the Justice Department to 1 become a "bootleggers' refuge," when President Coolidge (1923-1929) had 2 offered "feeble" support to prohibition officials and when high office ) holders vere allowed to "booze away half the night." They were appalled by the frequent accounts of murder :'.?' the streets of Chicago and New York. Th.- apparent ease wi th which liquor was beir.~ smuggled into the United states puzzled and disturbed them. It waSt after all, American prohibition agents 4 whom liquor dealers were corrupting and Canadians felt that the enforcement 5 of the Volstead Act was an American rather than a Canadian problem. When American officials in Canada vondered publicly why their own government "did 6 not put more energy into the task of suppressing the smuggling of liquor," .

1 New Reoublic, Vol. LIII(21 Dec., 1927), p. 130.

2 Ibid., Vol. XLIV(Nov., 1925), p. 282. 3 The Nation, Vol. CXVI(27 June, 192)), p. 736. 4 Montreal Gazette, 19 Oct., 1923, p. 1. 5 qecords, File No. 811.114canada/l)85, Consul at Victoria to Consul at Vancouver, 27 Feb., 1926. "The greatest handicap found ••• to securing hearty cooperation of Canadians is the opinion voiced b.Y many that American officials are halfhearted in their efforts to stop the traffic ••• " 6 Records, File No. 811.114canada/4, Consul at Hamilton to Hughes, 20 Nov., 1924. (Felix Johnson, Consul at Kingston, repeatedly asked for funds for his efforts to curtail smuggling but he invariably received the reply that "there are no rands available at this time ••• " Records, File No. 811.114/3)29, Mackenzie Moss, Secretary of the Navy, to Johnson, 16 ~~ch, 1924). 42.

Canadian authorities must have understood that their cooperation would be of little value. Even the Toronto star, a Liberal newspaper which wholeheartedly supported cooperation with the United States, realized that American officiaIs could hardly expect a sympathetic Canadian response when their own agents l "wink at violations of the law," and when "American authorities along the 2 border ••• were working hand-in-glove with the liquor smugglers." The Canadian government and the Canadian people resented, with considerable justification, ; the p~ospects of having to pull KVolstead's chestnuts out of the fire." They felt that "la prohibition qui fait loi aux ftats-Unis ne r\gne pas l(galement 4 au deI\. de la fronti~re americaine ••• Il The Canadian government had ample reason to refuse American requests for help in enforcing the Volstead Act. The country was benefiting from the sizeable sums being collected in excise duties. A considerable opposition existed among the Canadian public to bailing out inditferent or corrupt American enforcement agents. Many industries would be affected by a curtailment of the trade. It should have been a simple matter for the

Canadian government to have rejected a1l American requests for aid, were

1 Toronto Star, 20 Sept., 192;, p. 6.

2 Governor General's Numbered Files(P.A.C.), Vol. l(a), British Ambassador to Governor General, 29 June, 1922. ; Montreal Gazette, 27 Nov., 192;, p. 12. See also St. John Telegraph­ Journal, 20 Sept., 192;, p. 6.

4 La Presse,19 Seot., 1923, D. 6. See also La Patrie, 28 Nov., 192;, p. 4 and Le S01e11,'22 Nov •• 1923. p. 4. 43. there not other factors which Mackenzie King had to consider as he developed

Canada's liquor export policy.

B,y 1920 the momentum generated by Canada's temperance advocates had subsided. The remaining "drys," however, continued to press for anti-liquor legislation. In February 1923 a Canadian Prohibition Federation was tormed, uni ting into a single body the various churches and prohibition unions fighting the liquor trartic. The organization immediately sent a petition to ottawa urging the government to rithdraw i ts support tor the export of liquor to the 1 United. States. Such religious publications as the Presb:yterian Witness and 2 the Christian Guardian criticized the liquor export trade in their editorials. Ministers preached passionately trom their pulpits against what they considered 3 an unlawful and immoral trade, demanding that it be ended and the clergy ot the nation exerted considerable influence on public opinion. King knew that it Canada's religious leaders severely criticized his liquor policy he might 4 be taced with a tormidable proteste

By 1920 powertul agrarian elements were adding their voices to the call

1 Presbyterian Witness, 1 March, 1923, p. 1; 10 Jan., 1924, p. 3.

2 Christian Guardian, 10 Oct., 1923, p. 2. 3 ~ecords, File No. 8ll.114Canada/3l43, Consul at Montreal to Hughes, 27 Dec., 1923. 4 J.M. Camobe11 , "Canada's Retreat trom Prohibition," Current History, Vol. XXVIII (Aprll, 1928), pp. 27-30. 44.

ot the temperance urdons for the prohibition ot liquor exports. The second and th1rd decades ot the tveDt1.etb century vere characterized by a growing

zeal âmong Canada's tarmers ~or soci&l and economic retorms. They spoke out against what they regarded as the ev11s iD Canadian lirel the increasing

power ot the tinancial ol1garc~, abuses in education, the tailure to give

women the right to vote, gambling, and corruption in government. They

criticized, too, the immorality o~ the new dances, the Charleston and the

PollY Trot, so much a part o~ post-var urban Canada. The non-urban communities

saw these activities as proo~ that the city dweller vas living in a dec.dent, 1 corrupt society, and a symbo1 o~ th1s decadent and corrupt vay ot lite vas 2 its predilection tor intoxicants.

The rural areas be1ieved the ex1sting political parties ware unable

to remady their grievances. 'l'he ~armers saw the solution to their problem

in the election of farmer candidates. Init1ally theyexpected toelect only

enough members to form effect1.ve pressure groups; but they soon found them-

selves taced vith the responsib111t1es and opportunities of oftice. In 1919

the United Farmers ot Ontarlo, lad by E.C. Drury, won a majority of seats

in the legislature. In 1921 the Un1.ted Farmers of Alberta formed th. govern-

lIlent under Herbert Greentield. In 1922 the United Farmers of Manitoba won a

DarrOW victory and John Bracken beCU18 preader. The Progressive party wu

1 William Irvine, The Farmers iD Pol1t1cs(Toronto, 1920), Louis Aubrey Wood, A Historx of F&rIl8rs' MOYe.snts in Canada(Toronto, 1924).

2 Hopkins, Canadian Amlual. ûrlev, ~, pp. 589-92 and 557-9. formed in 1920 to provide an instrument for effective action at the federal

1eve1 and in the 1921 general e1ection it returned 65 members. The fumers' parties on the provincial 1eve1 and the Progressive partyat the federal

1eve1 shared s1m11ar ideoleg1es. Together they had achieved.. substantial po1itica1 power~ The very survival of the King government d.epended on bis 1 abllity to satisty farmer dèmands.

The farmers' parties and the Progressive M.P.' s now took up in earnest the battle against Canada's participation in the 1iquor trade. Bootlegging,

"rum-running," gunfire and murder hard1y reflected the moral society for wb1ch they stood. E.C. Drury and W.B. Raney, Ontario's Attorney General (1919-1923), 2 demanded that Canada cooperate with the United states and John M1l1ar, the

Liberal-Progressive H.P. trom Qu' Appelle, Saskatchewan, asked the government if action vas going to be taken hafore someone was "shot in the course of these 3 rurming fights." Some of the farmers were d.1sturbed by the high American taritf and this produced opposition to cooperation. Many of them were also pro!iting by the increÀsed demand for grain in the production of 1iquor.

But Most were repe11ed by the ev1l effects of drunkenness. This concern out- weighed their antagonism to the United States tarit!, their own economic se1t-interest and their be1ie! that the abolition of 1iquor clearances vas a 1egit1Ju.te barga1ning lever in the tight tor a free trade agreement. They

1 In the e1ectiOll ot 1921 the Liberals von il? seats. The combined 'bppositiorl' totalled 118. The Progressives held the balance ot power.

2 Border Citi.s star, 23 August, 1923, p. 1. 3 Debates, 15 June, 1922, p. 3000. 46.

believed that the "only decent, right and f'riendly th1ng would be to allow 1 the Ottawa government to f'orbid liquor export to the United states." The extent to which the Prairie Provinces supported cooperation was

1l1ustrated in 1922. In 1919 the Federal government had amended the Canada.

Temperance Act to enable i t to prohibit the importation of' 1iquor into any province which requested it to do so. In 1922 the Canada Temperance Act was f'urther amended to perm1t a province which had outlawed the importation of'

1iquor to request ottawa to prohibit the export of' liquor except b.Y l1censed 2 distilleries and breweries. ûnly the three Prairie Provinces, Saskatchewan in December 1922. Alberta in March 1923 and Manitoba in June 1923, took advantage of' th1s opportunity to res trict the export ot liquor. . The leaders of' these provinces bel1eved that the liquor expert trade vas immoral, carried on in def'iance of' a f'riendly neighbour, ami. they wished to dissociate themse1ves as comp1e'tely as possible f'rom this activ1ty.

In taking advant&ge of' this a.mendment to the Canada Temperance Act the provinces were outlav1ng 1egal activi ty. However, the f'armers' parties and the people who supported their pol1cies bel1eved so s'trongly in Canadian cooperation that they vere w1ll1ng to in'terf'ere mth a 1egitimate export trade.

In 1922 the Ontario government attempted to outlaw the transportation of'

1 Drur,y in the ottawa Citizen, 17 Nov., 1924, p. 13. See also E.C. Drury, Faraer Premer(Toronto, 1966), pp. 107-112.

2 statutes ot Caneda, Vol. 1-11(1922), pp. 53-55. 47.

liquor on provincial highways. Liquor companies would be prohibited from using Ontario highways to move their product from inland points to the l border. The provincial government hoped that this would impede the smuggling of liquor to the United states. Provincial authorities also tried to close down liquor warehouses and export docks. Often local officiaIs went so far as 2 to seize liquor waiting to be exported. In each of these cases, however, the

Canadian courts ruled that the provincial moves were illegal-that the export of liquor was an exclusive federal responsibility. The provincial authorities could thus take no action of their own; nevertheless, the Federal government could not ignore the deeply-held convictions which stimulated the•• actions. Mackenzie King had also to consider the views of the nation's women.

Women were bearing a heavy economic burden as a result of excessive expendi- tures on liquor. They were often the victims of male brutality. It was their responsibility to protect the home against the threat presented to it by the saloon. They had long played an important part in the crusade for temperance reforms. The Women's Christian Temperance Union had been established in Canada in 1~74 and had dedicated itself unreservedly to the strug~le against intoxicants.

Prior to 191~, women's protests could largely he ignored by the federal

politicians. In that year, however, they received the right to vote. They became a powertul political force. Their moral fervour and their crusading

zeal could now he expressed in votes. A goverrunent associated with "rum-

l gorder Cities Star, 27 March, 1922, p. 1; ~ April, 1922 and l May, 1922, p. 4.

2 Toronto star, 21 Sept., 1922, p. 3. 48.

l "runners",:~and bootleggers risked the rejection of 1,250,000 female voters. Mditional voices, powerful and articulate, were mounting a vigorous attack in support of cooperation with the United states. The majority of Canadian newspapers condemned Canada's participation in the "rum-running" 2 trade. That portion of the press which favoured unreserved cooperation followed the same argument presented by the churohes and temperance unions. They feared that the liquor interests represented a threat not only to morality but also to law and order, encouraging the growth of a criminal clus wi thin Canada. The ottawa Ci tisen wrote that the liquor trade His operated by a criminal e1ement and the 1aw abiding citisens of Canada are 3 decidedly opposed to it." The Vanoouver Province fe1t that Canada ought to 4 cooperate on the grounds of "self-interest." Canada's "self-interest," however, was not the sole motive behind press support for cooperation. Equally important was the faot that it shared with judges, intellectuals, politicians and statesmen the view that Canada should play a 1eading ro1e in a new world moral order. As the League of Nations examined the hatreds which split Europe and the differences which had led to the tragedy of World War l, Canadian "idealists" presented Canadian-

l Hopkins, Canadian Annual iteview, 1921, pp. 502-3.

2 A complete list of nevspapers, both those favouring cooperation and those opposing it, appears on pages 191-3. 3 ottawa Citizen, 20 Sept., 1923, p. 18. (Liberal) 4 Vancouver Province, 17 Nov., 1924, p. 6. (Conservative) American relations as an example which European nations.·lIIight weIl emulate.

Canada's delegates to the League extolled the ~riendship which existed between Canada and the United states. They wondered why Europe could not 1 ~ollow the North American example and also "think in terms of peace. If

The concepts o~ the "idealists" were rei~orced by their growing sense o~ Canadian nationhood. Canada had made a contribution to the Allied var effort, both in manpower and materiel, far beyond what might have been expected from the size of her population. The bloody encounters at

Passchendaele, Ypres, st. Quentin, Vi~ and a score of other French battle- fields had strengthened her national consciousness. She began to move away

~rom her dependeney upon the "mother country" and with increasing ~requency

"un-British," if not anti-British, talk was heard. And as her ties with

Great Britain became more tenuous, many Canadians felt increasingly that

Canada's future as a nation layon the North American continent and in close cooperation with the United states. John Datoe wrote and spoke of Canada. -, 2 An Ameriean Nation and his views ref1ected those of many of his contemporaries.

Canada's participation in the liquor export trade violatee! the spirit of this new orientation. Men like Daroe of th. Manitoba Free Press and J .E.

Atkinson of the Toronto star, felt that Canada's liquor export poliey vas

1 League of Nations 28th Plenar Session, laoul Dandurand Canadian De1egate , 2 Oct., 192 , p. 222. Se. also C.P. Stacey, "The Myth of the Unguarded Frontier," Americe Historieal Review, Vol. LVI (Washington , 1950).

2 John Datoe, Canada. An Alaer1ean Nation(New York, 1935); See Dafce, -Canada and the United states," Journal of the 101aI Institute of International Affairs, Vol. IX(Nov., 1930), pp. 721-738. 50. incréasing the number of confrontations along the border and on the high seas and developing a hostility that was out of place between two friendly neigh­ bourse They minimized the importance of United states indifference to

Canadian interests and they were not particularly concemed by the legality of Canadian liquor exports. The Toronto star admi tted that "responsibility for the fa1lure of prohibition in the United states cannot be sh1f'ted by the Washington authorities from their own people to the governments of foreign nations. Il Nevertheless, it made the point that. The best thinking people on this side of the border recognize that the comi ty of nations would be served by the enactment of laws forbidding the export of intoxicating liquors to countries in wh:1ch the local sale and importation is forbidden. 1 234 The ottawa Citizen, the Border Cities star, the Kingston Whig Standard, S 6 the Montreal Herald, the R_gina MorDing Leader and the Toronto Globe echoed 7 the star's sentiments.

1 Toronto star, 20 Sept., 1923. p. 6.

2 ottawa Citizen, 20 Sept., 1923, p. 18. 3 Border Cities star, 10 Jan., 1923, p. 4. (Liberal) 4 Kingston Whig Standard(cited in the Canadian Annual ~ev1ew, 1922. ? 62.) 5 Montreal Herald. 19 Sept •• 1923, ? 4 and 27 Sept •• 1923. p. 4. (Liberal) 6 1egina. HorDing Leader, 28 Nov., 1923, ? 4. (Liberal)

7 Toronto Globe, 23 Nov., 1923. ? 4. (The G10~ vas not otticial1y a Liberal peper. But it generally supported Liberal policies.) 51.

But it was not only those Canadians who felt that Canada was an "American nation" who advocated cooperation. Many Conservat1.ve newspapers, who valued highly the British connection, shared the general enthusiasm for the new and more moral world order and they pressad the Canadian government te end the liquor export trade. They did so even though the Conservative party 1 showed little interest in cooperation and despite the fact that they themselves normally fol1owed a "bard line- towards the United states. The 2 3 Halifax Herald, the Montreal star, the Ottawa Journal, the Winnipeg Tribune, and the Vancouver Province all supported cooperation. These newspapers continued to protest against United states fiscal and diplomatie policies and they urged Washington to reward a Canaèian gesture of friendliness vith a corresponding concession. They did not, however, demand reciprocal 4 concessions for Canadian cooperation.

Nor vas this press support for cooperation restricted to any particu1ar

geographical area. The Halifax Herald, the Montreal Herald and the Montreal Star

1 At no t1me during the Vo1stead period did the Conservative party adopt an official position on the l1quor export issue, al~h the Meighen government in 1926 see.ad villing te cooperate. See Infra, p. 83.

2 The ottawa Journal became 1ess enthusiastic in later years. However, untU the ear1y 1930's it did not oppose a ban on clearances. 3 Winnipeg Tribune, 2? Nov., 1923, p. 4.

4 Montreal star, 12 June, 1924, p. 10. 52. all called on Ottawa to end the liquor trade. The Toronto Globe, the Toronto star and the Kingston Whig Standard spoke editorially of' Canada's responsibility f'or ending bootlegging and "rum-running." In the Prairie Provinces, the Winnipeg Tribune and the Regina Morning Leader advocated an end to a trade which could harm relations vith a f'riendly neighbour. Finally, in British Columbia, despite considerable objection to the high American l tarif'f' , the Vancouver Province and the Victoria Daily Times believed it vas Canada's dutY to assist the American government. Politicians must be sensitive to the opinion of' the press. King's own Liberal newspapers supported cooperation and Many Conservative newspapers were also pressing f'or it. Newspaper editorials on the subject of' liquor clearances were not necessarily "correct interpretations of' prevailing 2 public opinion." They did, however, retlect the views of' a large and powerful group of' Canadians, spanning the entire nation. They could, as 3 well, "mould or educate" the Canadian public. Press points of'view on this issue did not leave King unaff'ected.

The determination of' Macken~ie King's liquor export poli~ involved other important considerations. Canada vas a large country, vi th 245 constituencies. Both major parties searched diligently for party revenue.

l Victoria Daily Times(cited in the Literary Digest, Vol. LXXIX(Oct., 1923, p. 8). Conservative.

2 Records, File No. 711.429/222, Consul at Vancouver to Hughes, 25 Jan., 1929. 3 Ibid. 53.

Profits in the liquor trade were high and the favours the liquor dealers sought 1 were many. While there was no direct link between King and the liquor barons, evidence revealed that distilling and brewing firms were donating part of their 2 profits to the Liberal party. Ir Canada changed i ts liquor export policy, their profits would decline • This reduction in profits would reduce their capacity to pay political subventions. They might be 1ess willing to contribute to the party which had interfered vith the liquor trade.

In addition to these external pressures, Mackenzie King was influenced prof'oundly by subjective factors. The Prime Minister believed that progress was best achieved tbrough consensus. From bis early days in public lire, first as Deputy Minister of Labour (1900) and then as Minister of Labour (1909), he strove earnestly to reconcile the dif'ferences between employer and employee. He succeeded to the point where he won the commendation even of the Opposition 3 parties. King rarely imposed a settlement on any of the groups involved in a

controversy. He rejected the application ot force to the solution of human problems. Success coul.d best be achieved through negotiation, vith each party

in the dispute winn1ng at least part of its objective.

Mackenzie King' s years in the field of labour relations, where he

1 A silDilar conclusion was reached by R.B. Neatby, author of' William Lyon Mackenzie King. The LonelY Heights(Toronto, 1963), p. 288.

2 RoYal Commission on CUstoms and Excise, Evidence, Henry Reitel(President ot the British Col\U1i)ia Breveries Ltd.), Vol. 6, 24 Jan., 1927, pp. 7826-7, Ibid., Steven A. Griggs(Walkerv1l1e Brew1ng Company), Vol. 14, 28 April, 1927, pp. 16206-162l4; Ibid., A.L. McLennan(ConsoUdated Brew1.ng Company), Vol. 6, 20 Jan., 1927, p. 7555. See also Royal Co!llllission on Customs and Excise, Interim Report No. 3, 29 Jan., 1927. 3 ~. MacGregor Dawson, William Lyon Mackenzie King. A PoUtic&! Biogl'Qoby (Toronto, 1958), o. 140. ,54.

l obtained the trust of both management and labour, taught bim how to app.ase divergent interest groups. When he became Prime Minister, he knew that the same technique he had used in labour negotiations must also be used on the national pol1tical soene. Canada ns not a homogeneous society a it ns div1ded along ethnie, re1igious, geograpbical and economic 1ines. He had become Prime Min1ster fo11owing a bitter racial struggle between the French and the Eng1ish over conscription. British Columbia, the Prairies and the Maritimes fe1t themaelves increasing1y a1ienated from Quebec and Ontario and ta1k of provincial rights, if not outright separation, became common in these 2 areas. Only if such div1sive factors were elim1nated, King knew, could

Canada he freed of internal conflict and his party become truly national. The acbievement of tbis goal required maximum flexibi1ity and a freedom to adapt 3 bis course to changing ciroumstances.· Imposing policies on an unw1l1ing nation would not do. He might not find solutions which would be totally 4 satisfactory to eve~one. He might hopeJ through compromise, to blunt the sharp &dge of difference and unite the count~.

As the Prime Minister sought to unite the nation, he sought, too, to unite his own party. King's first years in office vere marked by dissension

1 Dawson, pp. 94-221. 2 Neatby, pp. 210-243. See Hopkins, Canadian Annual Rev1ew, 1924-5, p. 333.

3 lDavson, pp. 417-419. 4 The 1925 election results (See Inrra, p. 75) revealed that King had underestiJlated the extent to vb1ch he would have to go to appease the vanous sections of Canada. 55.

l wi thin the ranks of bis own followers. The liquor export issue presented an additional danger to party unity. The popular Jacques Bureau, Minister 2 of Customs, opposed cooperation of any kind. W.R. Motherwell, one of three LiberaIs elected from the Prairies and the Minister of Agriculture, 3 supported cooperation. The remainder of the Cabinet was split on the issue.

Mackenzie King would make the final decision himself. But uncertain about bis political future, he would make every effort not to divide further the

Liberal party upon which that future depended.

A united Canada and a united Liberal party were King's major objectives.

But the Liberal leader also had firm convictions as to what Canada's role in international arfairs must bel He recognized the need of maintaining f'riendly relations with Great Britain. But he believed profoundly, too, in the need for intimate Canadian-American ties. He knew that Canada' s very survival in a tense and dangerous world depended upon close cooperation 4 with the United states. He appreciated the danger of antagonizing a powerful neighbour on which Canada relied for so mach of its trade and to which many Canadians looked for leadership in world &tfairs. When King spoke of the need for improving Canadian-American relations he otten used platitudes and cliches. But they reflected a deeply and sincerely held

1 See Infra, p. 75.

2 Toronto Dalli Mail and Eapire, l Feb., 1924, p. 1. (Bureau obviously had good reason tor taking the stand he did. See Infra, pp. 75ff.) 1 See also Border Cities Star, 13 March, 1925, p. 1. 3 Toronto Da1.ly Mai1 and Emoire, 1 Feb., 1924, p. 1.

4 Frank Underhill, In Search of CanAdian Liberalism(Toronto, 1(61), pp. 128-9. conviction. If King vas to be faithf'ul to bis own ideals he must devise a liquor export policy which would prevent a crisis in Canadian-American diplomatic relations. And he understood that Canadian cooperation in the enforcement of the Volstead Act would be unmistakable evidence of Canadian friendship.

The Prime M1n1ster vas faced vith a senous dilemma.. On the one band,

bis des1re for harmony on the North American continent urged h1m to cooperate.

On the other hand, his d.esire·te remain in power, vith a united country and

party behind him, forced h1m to reject total cooperation as a solution.

It would require a very astute pol1tican to achieve both the objectives

King set before him. His success in resolving the problem posed by the

Volstead Act would reflect the ~.easure of bis political sagacity. CHAPTER III

A POLICY OF APPEASEMENT

Mackenzie King might have resolved bis dllemma by f'acing the issue

squarely, taking a positive position and trying.to convince the electorate

of' its validity. But such a course would have been inconsistent vith his

personality and temperament. He attempted, rather, to solve bis problem by

daveloping to the level of' a high art a polic,y of' compromise and appeasement.

He promised the United States assistance, but def'erred the f'ulf'lllment of' bis

promise. He seeaed to of'f'er a great deal of' help, but deliYered very little.

By enacting measures which met some of' the United states requests he placated

one group of' Canadians. By vithholding total cooperation he placated another.

This approach enabled h1a to achieve his primary objective, the preservation

of' C&nadian unitY and, at the same time, ensured the success of' his secondary 1 goal, the strengthening of' Canadian-American f'riendsbip.

Mackenzie King's exception&! skill in satisf'ying the various elements

involved is refiected in the events ~iately preceding the f'irst United

1 Dawson described King's approach to politics in the f'ollowing mannera "He (King) considered that the parties in Canada had two major f'unctions a the propagation and carrying out of' ideas and policies, and the bringing together ot diverse and even confiicting groups and interests, so as to secure a working agreement and a l18asure of' COBan action. The second f'unction vas in bis eyes aven more important than the f'irsta indeed its operation might necessitate party principles baing temporarlly shelved or substantially mod1.!ied ••• " (p. 319). In the liquor export 15 sue, King 1I&S f' ortunate enough to be able to achieve bis tirst objective rithout having to saer1.!ice the second. But notbing took priority over national unity. sB· states requests for &id, in the reaction of the Canadian government to these requests, and in the diplomatie negotiations which succeeded them.

The United States made its first unofficial request for Canadian aid 1 in June 1922. The Prohibition ColIIIIIissioner, Roy A. Haynes, in correspond- ence with the Honourable James Hales, Chairman of the Board of License 2 Commissioners for the province of Ontario, enquired about the possibllity of Canadian 1egislation to prohibit the transport of 1iquor from Canada to the United states UD1ess a permit vere first secured from United states federal or state authorities. Since such a permit was impossible to obtain this 1egis1ation would lIIlke "rum-running" from Canada both difficult and 3 dangerous.

At the outset Hales felt that the Canadian government might be 4 "disposed to comp1y vith aDY reasonab1e request. If Shortly afterwards, 5 however, he re1uctantly adjdtted that such 1egis1ation could not be secured.

1 Roy A. Haynes vas Prohibition Commiss1ener between 1921 and 1927. The actua1 responsib1l1ty for prohibition enforcement was given joint1y to the indiv1dua1 states and the Federal government. Federal1y, the Bureau of Interna1 ~evenue, a sub-div1sion of the Treasury Department, vas in charge of control1ing interstate commerce, imports and conspiracies which crossed state 1iDes. (Asbury, pp. 234-5).

2 There is no apparent reason why Haynes asked the Ontario Cha1rman what the disposition of the Federal government might be. 3 The contents of Haynes' letter to Hales are discussed in a disoatch from the Department of state to the 3ritish Embassy, 27 June, 1922. Se~ Foreign !{e1ations Series, 1922 (Washington, 1937), Yol. l, pp. 563-4.

4 ~ecords, File No. 811.114/B47, Hales to Haynes, 6 June, 1922.

5 Hales to Haynes, 4 July, 1922. Cited in Foreign Relations Series, 1922, Yol. l, pp. 563-4. 59.

Hales felt that Canada vas unwilling at this time to pass legislation which vould eut off almost completely the export ot liquor to the United States. The Canadian government indicated in late 1922, however, that it was villing to ofter partial assistance to American prohibition officiaIs. In

September of that year it passed legislation which required liquor exporters to furnish a cash bond on shipments of liquor to foreign countries into which spirits could legally be imported. The bond was released only when the exporlers produced a landing certificate giving proof that the liquor had actually arrived at its declared destination. Mainly designed to protect Canadian interests, this legislation also appeared to be helptul to the

United states. Canadians supporting a ban on liquor clearances and American prohibition officials recognized the fact that liquor exporters could not

obtain valid American landing certificates. They doubted that Canadian distillery and brewery firms would sacrifice their bonds by sJIlUggling liquor

Across the border. The Toronto Globe and the Windsor Border Cities star, two newspapers urging the Canadian government to cooperate with the United states, both felt tbat the measure "would greatly aid in the enforcement of the 1 prohibition laws of the ••• United States." Canadians and Americans who sympathized with the objectives of the

Volstead Act vere further encouraged by an administrative decision taken in December 1922. According to international maritime law, nations had the right to protect their shores against foreign vessels within a three mile territorial limit. Vessels on the high seas, outside these territorial waters,

1 Toronto Globe, 26 Sept., 1922, p. 4. See Border Cities star, 20 Sept., 1922, p. 4. -- 60. were not subject to interference. American coast guard officials could lawtully pursue vessels tlying an American tlag at any distance from the

United states coast, but they could not legally touch ships tlying a foreign fiag beyond the three mile limite To enable American boats to come closer to United States coastal waters without incurring the danger or ritle rire,

American companies had heen transrerring their vesse1s to Canadian registry.

The Canadian government now announced that before such a transrer of registry could take place the company must produce a certiticate under seal or the

United states Shipping Board. Alternatively, Registrars of Shipping in

Canada vere required to send all relevant information to ottawa for instructions hefore further steps could be taken towards a transrer or registry. This procedure made it more ditficult to register a vessel in Canada for the sole purpose of fac1litating the smuggling of liquor into the United States.

The Canadian government had thus given some indication of a desire to help the United States enforce the Volstead Act. In March 1923 the United

States government, apparently encouraged by the Canadian decisions, formal1y requested Canada to refuse liquor clearances to vessels destined for American 2 ports. Certain members of the Treasury Department fe1 t that "the appea1 :3 would .eet favourable consideration b,y the Canadian authorities."

1 Foreign Relations Series.:1922, Vol. l, pp. 589-90.

2 Records, File No. 8ll.114/l223, Hughes to British Ambassador, 7 March, 1923.

3 Records, File No. 8ll.114/l403, Andrew Mellon(Secretary of the Treasury Department) to Hughes, 1 May, 1923. 61.

But Canadian reaction to the United states request hardly warranted the optimism expressed by the American officiàls. In fact, the Canadian 1 government considered the appeal of no special importance. On June 19 Ottawa made its first official statement on the liquor export question. It replied to Washington that the export of liquor to the United states was lawtul, whether or not the product could legally be imported into the United States. It expressed the customary diplomatie "regret. at the "inability to adopt

the suggestions put forward b,y the United States in regard to this matter," but it made no practical recommendations as to how it might further assist the American prohibition agents to solve their problem. A few days fo11owing the official Canadian refus al the Conservative Opposition Leader, Arthur Meighen, enquired about the correspondence between the two countries on the liquor question. King answered h:is query: The reply to Washington related exclusively to a statement of the la. as it stands and the position of the Canadian authorities in meeting the request that has been made. There bas been nothing sent forward to Washington vith respect to the government's policy••• So far as the government's policy is concerned we have every desire to cooperate vith the A'Ilerican authorities in helping them to secure the observance of their laws ••• Our attitude in this matter is entirelya friendly one, in an endeavour to further so far as i t may be possible for us 50 to do, the best of relations vith OUr American neighbours. 3

1 Mackenzie King Papers(P.A.C.), Vol. 116, Sir Joseph Pope(Under-Secretary of state for 3xtarnal Affairs) to King, 23 June, 1923.

2 Records, File No. 811.114/1595, British Ambassador to Hughes, 19 June, 1923. 3 Debates, 25 June, 1923, pp. 4295-6. 62.

The Most casual reading of King's speech reveals the diplomatie skill with which he pursued bis objective. lts vague phrases were designed deliberately to permit him to claim that no specifie policy had yet been formUlated. In fact, the administrative decision of 1922 and the government's attitude towards the cash bond legislation indicate that King had reached a decision. He would try to appease those Canadians calling vehemently for cooperation and placate those who opposed it. The administrative decision reduced the value of Canada as a base for Americans intending to violate the provisions of the Volstead Act and gave comfort to those in Canada who favoured assisting the United states. The cash bond legislation was welcomed by many Canadians as a measure which might also assist the United states. At the saDIe time, the special arrangelllSnt made for liquor exports to the

United states exempted the trade from interference and so satisfied those Canadians who rejected cooperation. King's policy was designed to loave bis options open. But it was policy nonetheless. The Prime Minister's speech reflected the purpose of both the legislative and administrative decisions. He indicated that Hwe have every desire to co-operate with the American authorities." He declared the attitude of the CanAdian government to be "entirelya friendly one." He spoke warmly ot "an endeavour to further ••• the best of relations with our American neighbours." K1ng's desire for cl05er Canadian-American relations could not be doubted. Moreover, he had no intention of ignoring the American requests tor aid which

he knew had considerable support &Mong the Canadian public. But he was not 50 naive as to otfer total cooperation to the United states without being able to

show that he had received something tangible in return. Most Canadians would probab1y have rejected such a unilateral concession. King's speech, wh1ch offered a modest measure of encouragement to American officials but made no specific commitment, successfully preserved the de1icate balance between the divergent Canadian points of view. When, in August of 1923, the Canadian government invited the Americans to an ear1y eonterence for the purpose of "discussing" the liquor smuggling question, it was apparent that King 1 had found in a polia,y of appeasement the solution to the prob1em.

The United states qu1ckly accepted the August invitation for a meeting in ottawa to discuss the 1iquor smugg1ing prob1em and American officials began 2 a1most immediately to prepare for these discussions. Macken~ie Moss, leader of the American de1egation, vas given imp1icit instructions as to how to present

Ms case. He vas told to appeal to the Canadian representatives on the 0-

grounds that it vas Canada's moral duty to assist a friendly neighbour. "International cooperation in measures to prevent smuggling and the suppression

ot crime," wrote Hughes to Moss, "has been recogni~ed as entitled to the 3 support ot all enlightened governments." As the Conference date approached American and Canadian newspapers which

l Mackenzie King's general posture ot indecision is described by ~oger Graham a "Arthur Meighen," Canadian Historical Association Booklet No. 16(ottawa, 1965), pp. 14-15.

2 Records, File No. 811.114Ottawa Conterence/l, 16 July, 1923 and 19 July, 1923. 3 C.E. Hughes ta Moss, 24 Nov., 1923. Cited in Foreign Relations Series, !2ll (Washington, 1938), Vol. l, p. 233. 64. sympathized with the position ot the United states government, refiected moderate optimisme The Buftalo Evening News remarked. that "the tact that the torthcoming conference was suggested. b.Y the Dominion government is encouraging evid.ence ot its desire to do what it can to help adjust this 1 verlng problem." Similarly, the Toronto ~, rejecting any suggestions that Canada should. use this issue as a bargaining point tor reciprocal concessions, telt that the meeting "should result in measures ot cooperation 2 that will put a stop to the illicit traftic ••• Il 3 The two delegations assembled in Ottawa during the last week in November.

The American argument was presented in eloquent terms. Th~ demanda made _were, characteristically, steep and torthright. In ettect, they off'ered practically nothing but requested a great deal in return. They made the tollowing demands of' the Canadian government 1 i ) the turnishing to American authorities of information concerning clearances of ships w1 th cargoes ot l1quor on board,

1 Buftalo Evening News, 21 August, 1923, p. 8.

2 Toronto ~, 1.8 Sept., 1.923, p. 4 and 28 Nov., 1923, p. 4; Montreal Star, 29 Nov., 1923, p. 10. 3 The American representatives were Mackenzie Mossr V.R. Vallence, Assistant to the SoUcitor. James J. Britt, General Counsel, Prohibition Unit; J .P. Crawford of the Customs Legal Force; Nathaniel G. Van Doren, Head of the Special Agency Customs Service, Treasury Departmentr George E. Boran, special assistant to the Attorney Generalr and W.J. Donovan, United States attorney trom Buftalo. The Ce-die representatives vere R.R. Farrov, ColIDIIissioner of Customs and Excise; C.P. Blair, General Executive Assistant, Departaent ot Casto.; W.F. Wilson, Chief ot the Preventive Service; W.S. Edvards, Assistant Deputy Minister of Justice; W.W. Corey, Deputy M1n1ster ot the Interior; and Alex Johnson, Deputy Minister ot Marine and Fisheries. ii)the passage of an Order-in-Council prohibiting clearances of vessels carr,ying 1 liquor for ports in the United. states, iii)the refusal of clearances to boats under 250 tons which carried liquor, since that liquor would obviously be intended 2 for smuggling into the United states, iv)permission for the coast guard to

"search and seize" vessels on the Great Lakes suspected of being engaged in the liquor trade, v)a separate treaty calling for the extradition of persons accused of violating the liquor laws, and vi )adoption of measures to prevent liquor smuggling by sea and by air. In return the United States extended to Canada the 3 right to transport liquor through its territory of Alaska to the Canadian Yukon.

1 The question of whether an Order-in-Council could prohibit liquor clearances' or whether parliamentary legislation was required was debated in later years when Canada seriously considered changing its policy. The Justice Department eventually ruled that parliamentar.y legislation was required.

2 In September 1923 a Canadian Order-in-Council had been issued prohibiting clearances in bond to vessels of less than 200 tons which carried liquor. These vessels had been clearing for distant ports. They h&d. been producing landing certificates. Their size, however, made it obvious that they could not traverse the high seas. The liquor had been smuggled into the United states, or short­ circuited back into Canada to avoid payment of excise duty. This Order-in-Council prevented the boats from clearing to overseas ports. It did not prevent thell'1 froll'1 clearing legally for the United states.

3 Foreign Relations Series. 1923, Vol. l, pp. 233-255. Prior to this date American officials had refused Canada permission to ship liquor through United States territory. H.G. Chilton, the charge d'arfaires ad interim of Great Britain, suggested to the Governor General "that the Canadian Government might consider it desirable to suggest through their representatives that a satisfactory issue of the Conference might depend te some extent upon the adoption of a reasonable attitude on the part of the United States vith respect te the legi tiJllate requirements ot the Yukon territory. .. (Governor General' s Numbered Files(P.A.C.), Vol. 2(a), Chilton to Sir Julian Byng, 19 Sept., 1923} 66.

In the effort to convince Canada to agree to its demands the United states de1egation often exaggerated its arguments. The Americans reasoned that Canada should cooperate because other nations vere helping them entorce the Vo1stead Act. Yet only Cuba had offered complete cooperation in American 1 prohibition entorcement. They contendad that Great Britain was retusing

1iquor clearances to the United states. But at no t1me during the Vo1stead 2 period were British vesse1s prohibited from sail1ng ta Am.erican ports.

Contrary to the impression the Americans sought to convey, many countries

opposed United states efforts to apply its 11quor 1aws to f'oreign citizens ) who were vio1ating no international lav.

The United states de1egation also stressed the f'act that none of' the

current Canadian customs regulations were of' any benef'it to American

prohibition off'icials. It made the va11d charge tbat the 1922 bond

1egis1ation vas being vio1ated by the f'raquent production of' f'alse 1anding 4 certificates. The acceptance b,y Canadian customs ot.ficials of' spurious

1anding cert1ficates enab1ed l1quor exporters to c1ear f'or f'oreign ports

and instead lard their 11quor in the United states. There could be no

doubt that Canadian 1a.xness vas f'ac1l1tating the smu.gg1.ing of' llquor into

1 Toronto Globe, 5 Jan., 1929, p. 1.

2 Mackenzie King Papers (P.A.C.), Vol • . 1)4, SUJIII!!!l";Y ...Liguor Conference of' 1929. See a1.so Debates, 14 March, 1930, p. 617. 3 Foreign =:te1ations Series,!.2.ll, '101. 1, pp. 133f'f'.

4 See Infra, p. 71. the United states. The American de1egation might, however, have

indicated more positive1y the steps it vas prepared to take on its own

side ot the border. This might have convinced Canadians that "the

prohibition entorcement of'f'icers of' the United states" were not "in 1 1eague vith the bootleggers."

Despite the weaknesses in their presentation, the United states 2 of'f'ici&1s ware, f'ollowing the Conterence, reasonab1y opt1m1stic. The

Canadian government had indicated that "the American suggestions would 3 be given serious and sympathetic consideration," and the State Department

was encouraged to be1ieve that i ts ef'f'orts might be successf'ul. However,

the Canadian response RS intended only to p1acate the American of'f'ici&1s

and to satisf'y those Canadians who supported cooperation. Despite

reports that Macken~ie King vas in f'avour of' of'f'ering full assistance 4 to the United States, he was adhering to his po1icy of' de1ay and

vacillation.

1 Records, File No. 811.114/2061, Consul at Toronto to Hughes, 17 Oct., 1923.

2 Moss to Hughes, 29 Dec., 1923. Cited in Foreign Relations Series, ~, Vol. l, p. 250. 3 Montreal Ga~ette, 1 Dec., 1923, p. 9.

4 Toronto Da1ly Ma1l. and Empire, 1 Feb., 1924, p. 1. 68.

While the Canadian government dallied in dealing with the major Amerioan proposal, it found another me ans of tempering the criticism from the Uni~d. states and of appeasing the Canadian protagonists of cooperation. wnen the

Convention of 1924 was signed, erlending the right of "search and seizure" te one houris steaming distance from the coast, King voiced his unqualified approval~

In recommending the resolution ••• l do so on the grounds which have been urged by the United Kingdom, namely, first of al1 there is the groum of morality, that i t is obviously desirable for countries to unite in endeavouring te give effect te the laws of other friendly countries, particularly when these laws bave in viev serving a great moral purpose. There is next ••• the ground of international goodwi11. There is reason to believe tbat the Uni ted states is most anx10us tbat this course should be taken; that this treaty should be passed, and we in Canada, as a dear neighbour, w.Ul, l think, feel gratified at an opportunity of being able te faci1itate in any manner possible the furtherance of friend1y relations betw&en Great Britain and other parts of the British Empire and the United States. 1

The treaty made it more difficult te smuggle 1iquor from the high seas inte the United states, particularly for those Canadian "rum-runners" who operated off the coasts of British Columbia and Nova Scotia. lt discouraged some of their vesse1s from clearing at such ports as Port Moody and Port

Coquitlam, on the West coast and Yarmouth and Lunenburg on the East coast, and thus deprived the government of receipts trom excise duties at these points.

To this extent it answered some of the critioism ot the advocates ot cooperation.

But the Canadian government was making only a minor concession. The treaty did not materia11y curtail the nOM' ot Canadian tiquor across the border. The main avenues Along which sJIIUgg1ing from Canada te the United States teok place were not the high saas but, rather, the inland trills, the Great Lakes and such

1 Debates, 21 March, 1924. pp. 549-50. points as the Detroit-Windsor and Quebec-Maine border crossings. Profits from the liquor trade continued to swell the Canadian treasur,y. King clearly perceived that the majority of Canadians vere unwilling to support an arrangelll8l1t with the United states wher-e the major burden for enforcement wou1d be borne by Canadians. His ambivalent policy vas bringing h1m the best of all possible alternatives.

In June 1924 the Canadian government again offered limited assistance to

American officials. As a resu1t of the November 1923 ottawa Conference a treaty vas drafted covering a number of the points discussed. On June 5 Ernest

Lapointe, the Minister of Justice and M.P. for Quebec East, vent to Washington and on June 6 he and Secretary of 5tate Hughes signed an "Anti-5mnggJ1ng Treaty."

Each government by i ts terms was to not1fy the other when clearances vere granted to goods which could not legally be imported into i ts country. Canadian officials vere instructed to deny clearances of liquor when it was "ev1dent from the tonnage, size and general character of the vessels, or the length of the voyage invo1ved and the perUs or conditions of navigation ••• that the vessel will be unab1e to carry its cargo to the destination in the application for

clearance." In return Canada received permission to transmit 1iquor through 1 Alaska to the Canadian Yukon. Lapointe had successfully gained the sole reciprocal. demand that Canada made. And, as m1.n1mal. as this concession

may appear, the Montreal Gazette, not lmown for its gentleness tovards the

United states, wrote that "the agreement is thereby rendered measurably less 2 one-sided."

1 Fore!gn Relations Series, 1924 (Washington, 1939), Vol. 1, pp. 188-192.

2 Montreal Gazette, 9 June, 1924, p. 12. 70.

Canada rejected the American request for a separate treaty ca11ing for the extradition of persons accused of violating each country's liquor làWs.

Under existing laws offenders of prohibition regulations of one countr,y vere not subject to extradition. The United states, realizing that 1II8.IlY' Canadians would violate the Volstead Act by smnggling liquor across the border, w:lshed to make smuggling an extraditable offense. Even the most fervent proponents of cooperation objected to a treaty in which Canada would "barter avay the 1 inherent rights of her own citizens." Such a sacrifice of Canadian sovereignty, which 1Iou1d extradite Canadians for trial in American courts when they had violated. no Canadian law, vas clearly unacceptable.

The "Anti-Smuggling Treaty" in no vay prevented liquor from being sMpped legally to the United. states. A small vessel might present itself to a customs

official and attempt to clear for Havana or some other distant port. The

customs official would refuse on the grounds that the vessel could not possibly

make such a journey. That same vessel could then legitimately request clearance

for a point in the United states. The offioial would have no alternat1.ve but

to allow it, upon receipt of the excise duty, to proceed.

Nevertheless, the treaty could, if properly enforced, have made sllUggling

a hazardous business. It would also place the chief responsibility for liquor

enforcement with the United states, where MOst Canadiaus felt it should be.

According to the agreement the United States officials wera to be informed ~

every shipment of liquor crossing the border. Strict enforcement by Canad~ officials of the terms ot the treaty, combined w1th honest AJaerican v1.g1lance,

vould have rendered liquor smuggling so unprotitable as to have eliJl1nated it

l Montreal Star, 29 Nov., 1923, p. 10. 71. altogether. On the hasis of information supp1ied by Canadian agents,

American customs officials would mere1y have to watch the point at which the 1iquor was being 1anded and then seize it. As profitable as the 1iquor

trade was, it seemed doubtrul that Canadian 1iquor exporters could atford to

10se so much of their stock. And liquor exporters watched the history of the

"Anti-Smuggling Treaty" with intense interest, tor they knew that too strict

enforcement on either side of the border would be extreme1y detrimental to

their business.

While he dec1ared officially that the United states st111 desired 2 Canada to refuse a1l clearances, Secretary of State Hughes admitted private1y :3 that the treaty "was very beneficial to our interests." Assistant Attorney 4 General Mabe1 Wil1ebrandt and other prohibition otficials also voiced 5 approval. Favourab1e reaction came as well trom the American press, with

the Buffalo Evening News calling i t a "sensible method ot dealing wi th the

1 Records, File No. 811. ll4Canada/786 , Consul at Windsor to Kellogg, 12 Sept., 1925.

2 Hughes' re1ease ror the press. See Mackenzie King Papers(P.A.C.), Vol. 134, June 1924. :3 Records, File No. 7ll.429/99, Hughes to Borah(Cha1rman or the Senate Foreign Relations Committee), 4 Dec., 1924.

4 Records, File No. 8ll.ll4Canada/666, Willebrandt to Kellogg, 29 July, 1925. 5 Report in New York!!!!!!!, 18 July, 1925, p. 1. 72.

1 problem." American government officials and the press saw tbat despite the obvious loophole in the treaty Canada had apparently cleared the way for a considerable reduction in liquor exports tu the United states.

In Canada the reaction among Canadians supporting cooperation vas also favourable. Tho Toronto Globe called it a "solemn treaty" and felt tbat if 2 Sir Henry Thornton, president of the Canadian National Railways, wo\Ù.d prevent smuggling on Canadian trains, the liquor traffic wo\Ù.d be greatly 3 curtailed. The ottawa Citizen spoke cautiously but optimistically of the treaty: Ratification by Canada or the treaty against illicit liquor trading ••• is a friendly ac~ ••• which will be heartily approved by those who appreciate the importance of co-operation between the two countries. 4 And then in a note of warning the Citizen later addeda There bas been mnch indifference ••• such indifference should be promptly removed. otherwise the new treaty might just as weIl be another scrap of paper. 5

1 Buffalo Evening News, 12 June, 1924, p. 6. See also Detroit Free Press, 7 June, 1924, p. 1; Boston Transcript cited in the Halifax Herald, 12 June, 1924, p. 6.

2 D'Arcy Marsh, The Tragedy of Henry Thornton(Toronto, 1935). Although there vas considerable smuggling of 1iquor on the eanadian National Railways, there seems to have been relatively little pressure exerted on Thornton to remedy this situation. (See Infra, p. 90). 3 'roronto Globe, 9 June, 1924, p. 4.

4 ottawa Citizen, 9 June, 1924, p. 18. 5 Ibid., 30 August, 1925, p. 18. 73.

But it soon became evident that both the hopes and the f'ears that the

Canadian government was ac1.opting a new pol1cy vere grollDlless. Although the United States had expressed satisfaction vith the s1gn1ng of' the treaty it was not long bef'ore American of'f'ici41s again became rest1.ess. The COlD"ention was not proving an ef'fective barrier against l1quor swnggl1ng. Part of the treaty' s ineff'ectiveness resulted from lu enf'orceBMmt OD the .Amer1can side of the border. But it was apparent that Canadian border agents vere not, as the treaty stipulated, inf'orming .Americans of sMp.ants or llquor being sent across the border.

In October 1925 Secretary of' State Frank Kellogg approached the

Canad:ian government, asldng if' a Conference lllight be he1d to diseuss the 2 question of l1quor s1ll11ggling and. extradition. otta1lll sent DO 1mmecJ1ate reply

to Washington. A gener41 election in Canada was 1YWin ent aDd the government

did not vish to malee a commi tment to the United States vh:1ch vould introduce 3 "such a dangerous subject into the campaign."

An incident had occurred in October 1924 wb1ch intens1f'ied the

government's reluctance to commit itself. The "rua-rmm1n g" schooner, the

9uadra, was seized off the coast of C41itorrda. lts crew vas arrested and

held in San Francisco pending an investigation into the se1sure. Fred R. Anderson, a prominent Vancouver lawyer, vent to San Francisco to def'end the

1 See Intra, pp. 89-90.

2 Records, File Ho. 711.429/67, Kellogg to ChUton, 1 Cet., 1925. 3 Recorda, File Ho. 8ll.ll4Canada/895, Consul at Windsor to Kellogg, 16 Oct., 1925. 74.

crew. While he was in the United States it vas discovered, that he vas a directer of the Merlcan Shipping Company, owners of the 9uadra. Anderson vas

immediately arrested and subsequently re1eased on $10,000 bail. He forfeited

the bail and returned te Vancouver.

When Anderson arrived in Vancouver he vas greeted by "throngs" of 1 Canadians. A petition urging the Car~dian government not to become involved

in any liquor treaties with the United States until "the government of that

countr.y apologizes te Anderson and remunerates him for bis losses in connection

with the arrest,~ vas endorsed b,y over 6000 signatures, col1ected in just 2 three days. Te1egrams vere sent te ottawa from other parts of Western Canada, 3 urging the govermnent te protest vigorously to the United States.

The tr~#].tment given Anderson was certainly unjustified. Moreover, in

arresting bim, the American officia1s committed the error of antagonizing

precise1y those Canadians who Most favoured cooperation in the enforcement

of the Volstead Act. Rad the United States used more discretion, there would

probably have been no outcry. There vas 1ittle sympathy in the West for the

Quacira's activities, which increased the danger of violence on the high seas.

However, Most Western Canadians, although they supported cooperation, resented

the aggressive American attitude towards a Canadian citicen. They fe1t that it

vas a denial of the 'independent statua of Canada in international affairs.

1 San Francisco Chronic1e, 30 Nov., 1924, p. 1.

2 ~. 3 San Francisco ExalI1ner, 15 Nov., 1924, p. 1. See Vancouver Province, 15 Nov., 1924, p. 1. 75.

They viewed the incident as a manif'estation of' United States insensitivity towards the dignity of' a self'-respecting nation. They saw a great deal of' inconsisteney between American requests f'or cooperation and their lack or respect f'or Canadian interests and Canadian pride. 1 The outbreak over the "Quadra" incident gradually subsided. The Canadian 2 government chose not ta permit the af'rair ta become a "cause c'l~bre." But in an election year King could not discount the antagonism it had provoked. More- 3 over, in view of' the general American disregard f'or international law, the

Prime Minis"ter had no assurance that a s1mi.lar incident would not occur and produce increased Canadian opposition to cooperation. He f'elt that his best course was to temporize.

The results of' the October 1925 election were to push into the background the problem of' liquor clearances. Mackenzie King was now f'aced with domestic difficulties whose gravity exceeded b,y rar the seriousness or the United

States liquor question. Lack of a def'inite party platf'orm, ineff'ective organization and "listless leadership" had combined to reduce the number of 4 Liberal seats rrom li7 to 101. King had been dereated personally and his 5 leadership vas being cbal1enged rrom within his own party.

Mackenzie King had been rejected qy the majority of the Canadian electorate. The Conservatives had emerged as the strongest party, with 116 seats. But the combined vote or the 101 Liberals and 24 Progressives would

1 New York Times, 19 March, 1925, p. 15. See San Francisco Chronicle, 1 Nov., 1928.and 3 Nov., 1933. 2 Toronto Globe, 15 Nov., 1924, p. 1- 3 . See Infra, pp. liBrf. 4 Vincent Massey, What's Pet 15 Prologue (Toronto , 1963), p. 100.

5Neatqy, pp. 87-88. 76. he surficient to outvote them. ~King preserved the support of the Progressives 1 by promising a scheme of rural credit and by agreeing to an old age pension.

A by-e1ection in Prince Albert in February 1926 returned the Prime Minister to par1iament.

While King was striving to retain power, the 1iquor prob1em came dramatically back into public consciousness. On February 2, 1926, H.H. stevens, the Conservative M.P. for Vancouver Centre, accused the Liberal government o~ condoning scanda! and corruption in the Customs Department. stevens pointee! the finger direct1y at the former Minister of Customs, Jacques Bureau. It was the 1ax enforcement of the 1aw by his department that was responsible for the smuggling ranning rampant throughout the country. stevens made it clear, however, that he he1d the entire government to b1ame.

A par1iamentary c.ommittee was set up immediately to examine the charges.

Over a period of four months the committee sat 115 times to determine the validity of stevens' accusations.

The trade in 1iquor between Canada and the United states came under

1 Neatby, pp. 107ff.

2 Debates, 2-4 Feb., 1926, pp. 680-782.

J A par11amentary committee vas acceptable to the Conservatives. Debates, 5 Feb., 1926, pp. 781-2. 4 The mellbers or the coJlllllittee vere C.W. Bell(e-Hamilton West); H.H. Stevens; R.B. Bennett(C-West Calgary); A.J. Doucet(C-King); W.T. Goodison(L-Lambton West) J Paul Mercier(L-St. Henri-Cha1rma.n); E.E. St. Pierre (L-Hoche1aga) ; Donald Donaghy(L-North Vancouver); D.M. Kennedy(Prog.-Peace ~iver). 77. the closest scrutiny of the committee. Evidence soon revealed that Canadian customs regulations were being violated with impunity. The committee ascertained that it was common practice for liquor exporters to clear for St. Pierre-Miquelon, Havana or a European port and then to land the liquor in the United States, or to short-circuit it back into Canada. To ensure l cancellation of the required bond, false landing certificates were produced. Customs officials in ottawa accepted these certificates without question although they knew that the liquor had not reached its declared destination. Furthermore, because the liquor was allegedly destined for a country other than the United States Canadian customs officials were not required to notify the American officers of the shipment. Since the "Anti-Smugg11ng Treaty" depended upon an exchange of information 1t was thus made almost completely ineffective. The committee also learned that members of the CUstoms Department, contrary to Canadian regulat1ons, were selling denatured alcohol to distilleries, who then exported it to the United 3tates for drinking purposes. In addition, Many of the

bootleggers bringing liquor iDto the United states ware, on their return journays, smuggling goods i1legally into Canada to av01d payment of Canadian 2 import duties. Finally. the committee heard testimony to the fact that the liquor interests were contributing to both political parties in return :3 for promises of favourable liquor legislation.

1 See Governor General's Numbered F1les(P.A.C.), Vol. 5(b), H.H. Walker, Assistant Under-Secretary of State for External Affairs, to O.D. Skelton, Under­ Secretary of State for External Affairs, 22 May, 1926.

2 See Infra, p. 95. 3 House of Commons Session. Special Committee Investigating the Adm::1.nistration of CUstolllS and Excise, Minutes of P!-oceedings and Evidence(P.A.C.), Testilllony of A.E. Nash of the firm of Clarkson, Gordon and Dllworth, Chartered Accountants, Toronto, Il June, 1926, pp. 3023-31. 78.

As the time approached for the committee to vote on its report, the political implications became increasingly important. The clauses dealing with the activities of the smngglers and the specific recommendations were approved unanimously. However, the committee split over the question of how much blee should be placed on the government. Stevens wanted to censure

George Bëtlvin, the new Minister of Customs, for interfering in the Moses Assiz case. Assiz had been convicted of having smuggled liquor in bis possession and

BoiviD, at the request of J.G. Robichaud, the Liberal M.P. for Gloucester,

N.B., delayed sending Assiz to prison. On investigating the case BoiviD did sand Assiz to jail; however, the Conservatives argued that the Minister was still gui!ty of aiding a sDlU.ggler in order to help a Liberal M.P. Stevens' motion, however, vas voted down 5-4, a Progressive, D.M. Kennedy, casting the deciding vote. Kennedy wanted to blame "certain infiuantial men." This was defeated 7-1 because these "influential men" belonged to both parties. Stevens then asked the committee to censure the entire government but this motion was rejected 5-4. Kennedy, in turn, moved that Boiv1n's conduct be termed

"un jus t1fiable " and that the House be informed of the activ1ties ot M.P.·s

W. K. Baldwin, W. A. Boys, J. G. Robichaud am William Durf. His motion received no support. Finally, the main motion, that the committee accept the draft which condemned but did not censure the government, was carried

5-4. Kennedy siding with the government representatives.

The parl1amentary committee brought its report betore the Hause on

June 18. The ChairIU.Jl, Paul Mercier, revealed i ts tindings and eœphasized the reco!lllll8ndations designed to end corruption in the Customs Department.

In a determined eftort to prevent short-circu1ting, the eollllllittee recommended that an excise dutY be 1evied on all intox1cating liquor, regard1ess

1 Soec1al ColIIIIIittee ••• Evidence , 17 June, 1926, pp. 3061-63. of whether or not it 11&5 beiDg exported in bond. It suggested a "thorough investigation of al1 dist:U1eries in Canada." And it proposed that

"regulations be made to prob:ibit clearances from a Canadian to an American 1 port."

As the Bouse debated the findings of the aommittee the objectives of both the opposition and the government became c1ear. The Conservative party recognized the report·s potant1a1 as an effective po1itical too1 and it intended to ignore the caa.ittee·s specifie recommandations. If it could detach a modest number of ~rs from the Liberal-Progressive alliance it might overthrow the gOV'&rna:lnt. It concentrated i ts efforts on censuring

the entire Liberal goYerJJMnt, which had entered into this "unholy partnership" 2 with the bootleggers. The government, on the other band, made every effort

to minimize the effects of the report's charges. King c1aimed that the

administration bad knORD About the corruption in the Customs Department long

. before stevens' charges and u:lntained that steps had already been taken to 3 reform it. He hoped iD th1s vay to defiect the danger of a parliamentary

defeat.

The ultimate resu1..t of the debate depended not upon what the Liberals

or Conservatives sa:1d, bIlt rather on how the Progressives and the two Western

Labourites, Woodsworth and VUliam Irvine, voted. They he1d the balance ot

1 Special. CoIlla1:ttee ••• Evidence , 17 June, 1926, pp. 3061-63.

2 Debates, 22 June, 1926, pp. 4283.

3 Ibid., 24 June, 1926, pp. 490ft. ï

80.

power and their reaction to the report would determine the government's fate.

The Progressives and Labourites f'aced a dfiellBll&. They believed strongly in moral ref'orD! and to condone the sort of' corruption the comm1ttee had revealed vould be to betray their principles. They recognized the sophistry of' King' s contention that he had taken steps to retorm the Customs Department. The

Prime Minister might not bave known the extent of' the corruption in the 1 Custo1l8 Department but i t vas obvious that he had "shielded Bureau. ft Nevertheless, the thought of' a high tar1tf Conservative administration vas repugnant to them. Woodsworth sought to solve his dllemma by criticizing the government severely tor its ineff~ciena,y and immora11ty without forcing its resignation. Most Progressives, however, put conscience bef'ore politics and condemned the government. Even the Prime M1n1ster' s promise to undertake f'urther investigations into the Customs Departlllent and a note indicating his v1llingness 2 to enter tnto a Convention prohib1ting liquor clearanoes did not satisf'y the••

Kennedy, A.T. Boutill1er, MoN. Campbell, WoR. Fansher and others brought about 3 King's parliamentary deteat.

1 Mackenzie King, ~, 5 Feb., 1926, c1ted in Neatby, pp. 114-116.

2 Governor General's NWlbered Flles(PoAoCo), Vol. 5(b), Byng to Howard, 25 June, 1926. 3 The chairun of' the Collllll1ttee, Paul. Mercier, tirst aoved that the House adopt the Special CoJllll1ttee Report. Stevens proposed an aaendment censuring the Prime M1n1st8r and the governmento He also asked tor an 1ndictment against Boivin tor intertering to keep Moses Assiz out ot jan. J .S. Woodsvorth moved a sub-amendment el1lll1nating the 8lIIeI\daent censuring the gov8nment and proposing that a j1Jd1c1al co.nssion be set up to continue the investigation. This sub-...ndaent vas deteated by a vote ot 117-115. Fansher then lIOVed that the Woodsvorth sub-.-ndaent be added to 81.

On June 29, 1926 Arthur Meighen succeeded Mackenzie King as Prime

Minister. In hts attempts to fom a Cabinet, however, he encountered a

problem which precipitated a major constitutional crisis • Mambers of

:f'arliament given a Cabinet portfolio, vith a salary, vere required to resign

and seek re-election. Meighen's parliamentary weakness made a series of'

by-elections inadvisable and yet he vished to finish the business of the 1 House. He therefore resorted to a procedure which, though new in Canada, 2 vas quite legal. He appointed seven Ministers 1rithout Portfolio who drew

no salaries am took no oaths of oftice. These Ministers were then made

Acting Ministers of' departments ard were permitted to carry out the responsibilities of their particular ottice.) Mackenzie King attacked this

the Stevens amemment. The speaker of the House moved that the Fansher sub­ amemment vas out ot order. This vas voted down 118-116. A motion to adjourn the House vas then deteated 11.5-114. King then asked Byng for a dissolution but this request vas denied. King resigned ard vas replaced by Arthur Meighen. F. Rinf'rett. (Lib) proposed an amendment eliminating the Stevens amen:3ment and establishing a customs depar'tment iuvestigation headed by a commission ot three judges, one nomina ted by each party. This vas defeated 119-107. E.J. GarlaDi (Prog) moved a sub-amellhlent recOllllllending that the proposed judicial commission consist of one judge selected by the two judges of the Exchequer Court. This vas carried unan1mously. Then the Stevens amen:3ment vas carried 119-107. FiDally, on JUDe 30, the Parliamentary Commi ttee Report and the Stevens amemment vere accepted 119-107.

1 Meighen never denied thIlt bis goverllllent vas omy temporary. He intended to caU the by-electioM atter the business ot. the House vas completed. Arthur Meighen, UDrevised ard UDrepented (Toronto, 1949), pp. l6Ott.

2 Dawson, Goverœent ot Canada, p. 361. ) ~. 82. procedure as unconstitutional. Be cla1.med that the Meighen m1n1stry vas, in f'act, no ministry at all. The Cabinet members, if' legally appointed, had no right to sit in the Bouse, md, if' 1llegally named, had no right to carry on the nation's business.

After three days of' haggling the Liberal M.P., J,A. Robb, proposed a motion in support of' King's argument. Again the Progressive party held the balance of' power. Its support of' the Conservatives was predicatec3 on their abllity to govern untll the business of' the Bouse was completed. If' there vas any doubt that Meighen could carry on the Progressives wou1.d discontinue their support of' the Prime Min1ster. Meighen was able to convince only three

Progressives of' the legality of' bis strategem. Fourteen of' them, six of' whODl had supported the Conservatives on the customs scandal, voted with the Liberals.

The Progressive M.P., T.W. Bird, accid~~tally cast his vote wh1le paired.

Robb's motion was carried 96-95 and Meighen had no alternB.tive but to ask l the Governor General, Sir Julian B,yng, f'or a dissolution ot parliament. B,yng

granted Meighen bis request.

Canada vas thus plunged into its second election in less than a year. The

campaign centred around the action ot the Governor General. In the midst ot

the debate on the customs scandal King bad asked Byng todissolve parl1ament

but the Governor General had ref'used. Macken~ie King nov argued tbat he had

not heen deteated in the Bouse but had been ref'used a dissolution ot parliament.

Meighen had heen deteated and yet Byng bad acceded to bis request f'or an

election. The public rejected Meighen's contention that a government which

had obtained one dissolution and bad subsequen tly been def'eated could not ask

1nebates, 29 June-2 July, 1926, pp. 515ft. 83.

1 tor another dissolution. It vas convinced that King vas sateguarding the constitution. King a1so m&naged to appaase those Canadians a1armed by the tindings ot the Par1iamentary COIIDIIi ttee by prom1sing to pursue re1entless1y 2 his investigations into the workings ot the Customs Department. He hoped that a low taritt po1icy to appease the West and the promise ot increased subsidies to the Maritime provinces would further convince the e1ectorate to vote Libera1.3

King's strategy succeeded. In September 1926 he vas returned to power. His party won control of the House am King's position within the party vas 4 strengthened considerab1y. Thus, as the liquor export prob1em re-emerged, the

United States government knew that Any Canadian cooperation must come from the same Liberal government with which they had been dealing for the preceding six years.5

1 Eugene Forsey, The ROyal Power of Dissolution of Parliament in the British COIIIIIlomrea1th(Toronto, 1943), pp. 2ô4-2.50.

2 On September 11, 1926 a full page advertisement appeared in the Toronto ~. It vas headed: "A P1edge From the Liberal Leader." It read: ''When returned to power l p1edge myse1f to continue re1entless1y the investigations of the customs service ard to carry out vithout tear or favour the needed retorms." 3 Hopkins, Caœ.dian Annua1 Review. 1926-7 (Toronto, 1928), pp. 36-38.

4 Bruce Hutchinson, The Incredible Canadian(Toronto, 19.52), pp. 146-7. 5 The Meighen lovernment vas receptive to the United States p1eas. In July 1926 the Acting Minister of Custoas, Stevens, intormed the United States consul at ottava tbat he had issued an arder for the refusal or 1iquor clearances to the United States. (Records, File No. 711.429/138), Stevens took steps to stop the issuing of clearances but upon doing so he vas instructed by the officers of the crown that he had no persona1 right to deny clearances. Any action must come trœ Parllament. (Records, File No. 711.429/143, Stevens to Consul at ottawa, 20 July, 1926) CHAPTER IV

PROFITS AND PRINCIPLES

The reve1ations of the Par1iamentar,y Committee presented a formidable test to Mackenzie King's po1itical astuteness. The committee had made it c1ear that the Customs Department was not applying the 1aws which had been passed and the many Canadians who supported cooperation were deep1y disturbed.

At the same time, a majority of Canadians opposed cooperation and would disapprove of a ban on 1iquor exports. Bet'ween 1926 and 1929 King demonstrated his capacity te maintain the public' s confidence in his po1icy. Re persuaded

Canadians who favoured cooperation with the United states te accept his liquor

1egis1ation as a sincere effort te assist American prohibition officials.

Those who opposecl aid to the U!dted States saw the export trade, despite his

1egis1ation, continuing virtually unimpeded.

By early 1929, however, changes had taken place in the Canadian attitude which could Dot be ignored. King began te reassess his position. The Canadian government, arter Dine years of temporizing, vas now serious1y considering prohibiting 1iquor exports te the United States.

Inned1ately prior te bis de~eat in the Rouee in June 1926, Mackenzie

King had informed the United states that bis government was in "substantial accord" vith its request on l1quor clearances and extradition. During the 1926 e1ection campaign he had l'rom:1.sed te clean up the Custems Department of his defeated gOieœnment and, once e1ected, he estab1ished a Royal Commission to 1 investigate :rurther the charges made by the Parliamentary Committee. King gave the impression that he might be willing to cooperate with the United

States and Canad;an proh:1bitionists and American officials vere encouraged 2 to believe that the Prime Minister's attitude had changeci.

In September 1926 Secretary of State Kellogg, in anticipation of

Canad1an cooperation, endorsed ottawa's suggestion that a conference be he1d to 3 diseuss the prob1em of 1iquor smuggling. The King government rep1ied that it

preferred to watt until after the investigations of the Royal Commission were 4 comp1eted. At the outset, the American officials were not particular1y

disturbed by th1.s delay for they believed that the Commission would "Dot consume 5 unreasonable t1me in its werk." But as the Commission began to investigate

1 The Order-in-Council to appoint a Royal Commission on Customs and Excise to investigate the Customs DepartDlent and the Treaty of 1924 was issued on 28 September, 1926. The members of the Commission were Sir F .X. Lemieux, Cldef Justice or the Superlor Court of Quebec(Judge Lemieux vas the Chairman until he resigned on 12 November, 1926); Hon. J. T. Brown, Cldef Justice of the Court of King's Deneb, Saskatchewan(Brown became Chairman wen Lemieux resignedh Hon. W.H. Wrl.ght, a Justice of the Supreme Court of Ontario; and Mr. Justice Roy of Quebec, who '&aS appointed wen Lemieux resigned. The chief counse1 vas N.W. Rowall.

2 Irebates, 2l. May, 1929, p. 2680. 3 Governor General's Numbered Files(P.,A.C.), Vo1,c_ 6(a), Howard to Byng (Kellogg 1etter enc1osed), 14 Sept., 1926.

4 Ibid., Viscount Willingdon(Governor General) to Howard, 6 Oct., 1926. 5 Records. File No. ?ll.429/156. Willebrandt to Kellogg, 29 Oct., 1926. 86.

the vast smuggling operation and as it became apparent that the investigations would involve a long and intricate process the United states became increasingly impatient. In December Kellogg again asked that a Conference be held, suggesting l January 1927 as a suitable date. Once again Ottawa refused the request. Canada

would do nothing until the Royal Commission had submitted its report and 2 provided some guidance to the government as to the course it might follow. The government's procrastination made it apparent that two and a half months in opposition had not altered King's feelings. The Parliamentary Committee had recommended that liquor clearances to the United states be denied and King could have introduced the legislation even wh1le the Royal Commission was 3 carrying on its investigations. But King had shrewdly assessed popular

opinion during the 1926 election campaign and he knew that there had been no great public outcry to implement that particular recommendation of the Parliamentary Committee. Most Canadians still opposed giv1ng the United states a concession for which they would receive nothing in return. The Prime M1n1ster planned to follow the sarne policy which had proven successful between 1921 and 1926. He would try to appease both those Canadians who

favoured cooperation and those who opposed it. The establisa..nt of

l Governor General's Numbered Files{P.A.C.), Vol. 6{b), Kellogg to Howard, 7 Dec., 1926.

2 Ibid.. Viscount W1llingdon to Howard, 15 Feb., 1927. (As i t was now apparent that the smuggling process was a two-way operation the Canadian government suggested that the eventual conference not be contined to liquor slllllggling. It should incorporate all facets of the sllllggling problem.) 3 H.H. stevens teels that such a bill would have oassed the House al though he doubts that it could have been entorced. (PersoÎlal letter to the author.) the Royal Commission provided a semblance of action but King planned no immediate changes in Canada's poli~.

On November 26, while the diplomatie manoeuvering was proceeding, the Royal Commission began its investigations in Victoria, British Columbia. Each province was the scene of an intensive examination into the liquor smuggling situation. Areas in which distilling and brewing interests were Most prominent, l Vancouver, Winnipeg, Toronto and Montreal, were those Most closely scrutinized. And as witnesses were called to the stand it became clear that the sordid picture pa1nted by the Parliamentary Committee was, in f'act, very real. The Royal Commission conf'irmed beyond reasonable doubt that the liquor interests were heavily entrenched in government circles. Russell Whitelaw, director of' the

Consolidated Exporters Corporation, and Henry ~eif'el, president of the British Columbia Breweries Limi ted, testif'ied under oath that they had given money to 2 anyone, f'rom either party, who asked f'or it. Both claimed that they had never turned down any requests. The Walkerville Brew1ng Company, trying "to prevent 3 trouble, fi had paid a lawyer to protect i ts interes ts in the courts. Arthur Sullivan, of' Shea's Winnipeg Brewery, testified that the Manitoba Liquor 4 Commission, at the request of the liquor dealers, had violated Canadian laws. Honest eus toms of'ricials insisted that when they reported cases or vessels which

l Canadian distilleries and breweries in operation in 1930, and their locations, are indicated on the maps on pages 161-168.

2 ...;q~o~~C;;.;o:;.;;""""=;.;;;s;.;;s~i~o~n~on__ CUs~~to~ms~~an=d~Ex~ci;;;;;s;:;..e;;..L.."'=;;~;';;';;;;;;"'''';';:;'=;...;;.....;.;.;;..:--' , 29 Jan., 1927. See also Debates, 2l May, 1929, p. 2 2.

3 ~oyal Commission on CUstoms and Excise, Evidence, S.A. Griggs, Vol. 14, 28 April, 1927, pp. 16206=162l4; See a1so Vol. 17, ~ June, 1927, pp. 13309-14416.

4 Ibid., Vol. 7, 21 Feb., 1927, pp. 11245-50. 88.

had obviously not landed at their deelared destination, they were removed

trom their posts. Cyril B. Knowles, an exeise orticial in Manitoba, testitied

that he had been otrered a bribe ot $2500 by Harry Bronfman ot Distillers Corporation L1m1ted not to intertere in the latter's operations. When he

reported it to ottawa he was ealled ott excise work and eonfined to eustoms l duty at the port or Winnipeg. The Commission heard evidenee that vessels were being cleared after dayl1ght and on Sundays, in violation or the Canadian eustoms laws. With sueh c.rruption in the government, Canadian distilléries

and breweries had virtually a tree hand in their dealings vith Ameriean oustomers. The government was not enforeing the laws whieh should have at least impeded their activities.

On July 7, 1921 the Commission coneluded i ts hearings. However, all ot the evidenee thus far aecumulated had eome trom Canadian sourees. The members or the Commission telt that in order to seeure a eomplete pieture or the liquor smuggling problem they ought to solieit the views ot American prohibition

otricials. On July 19, betore submitting their tinal report, they asked the United states government it a eonferenee eould be held in Washington to diseuss

"rum-running" and bootlegging along the border. On August 19 the United states aecepted this request. Ameriean prohibition ottieials knew that any direct contaet vith a Canadian delegation would provide them vith an opportunity to

tr,y to convinee Canada ot the reasonableness ot their own requests tor eooperation.

On August 27 the members ot the Royal Commission and Ameriean prohibition

oftic1als Illet in the Treasury bu:11ding in Washington and the Ameriean representatives presented in the strongest terms possible the urgent need tor

l Royal CoJlJllisaion on Customs and Exeise, Evidenee, Vol. 7, 24 Feb., 1927, p. 11816 and 25 Feb., p. 12000. 89.

l more stringent Canadian liquor legislation. The United States of'ticia1s pointed out that what had appeared in 1924 to be a genuine Canadian concession vas virtually inef'f'ectual. They now had evidence to prove that the terms of' the tlAnti-Bmuggling Treaty" were vague enough to be evaded legallyam easy 2 enough to evade illegally. American of'f'icials imicated that 1mmed1.ate shipment alter clearance had not been made mandatory am that liquor exporters coul.d theref'ore delay their shipments as long as they wished. This made inef'f'ective Any exchaDge of' information given at the time of' clearance. The

l The American representatives vere Mr. Seymour Lowan, Assistant Secretary of' the Treasury; Admiral F.C. Billard, Commamant, United States Coast Guard; Lieut. Commamer Charles S. Root, Chief' of' the Intelligence Off'ice, United States Coast Guard; Dr. J .M. Doran, COIIIIIdssioner of' Prohibition; Alf' Of'tedal, Assistant Commissioner of' Prohibition; E.W. Camp, Commissioner of' Custcms; Frank Dow, Assistant COJIIIIdssioner of' Customs; NathaDie1 G. Van Doren, Deputy Comm1ssioner of' Customs, in Charge of' Investigations; F.J.H. Kracke, United States Appraiser of' Merchardise, New York; A.K. Thomas, Chief' Assistant Appraiser of' Merchamise, New York; Harry J. Aulinger, Consular Of'f'icer detalled to the Trea.sury DepartMnt as Chief', Division of' Foreign Control, Bureau of' Prohibition; Alfred A. Haupt, Assistant Chief'; W. B. Robinson, Chief', Special Agents, Bureau of' Prohibition; lLA. Smith, Special Assistant to the Attorney General; Howard T. Jones, Chief' Attorney; W.R. Vallenee, Assistant to the Solicitor; Charles B. Hosner, Consul detalled to Department of' State; L. V. Boyle, American Consul at Tahiti.

2 The ev1dence presented by the American of'f'icials vas based on sol1d groum. American consu1s in Caœ.da had been instzoucted to report on the ef'tectiveness of' the Treaty in their area. •• The reports sent iM1cated clear1y that Most f'e1t that the treaty had DOt he1ped prevent liquor amuggling. Most echoed the vords of' the CODS1Ù at North Bay when he note that the treaty "appears to be vithout ef'tect." (Records. File No. 8ll.ll4Canada/3700, Consul. to Kellogg, 27 August, 1927; See also ~. CaDadJl./3174, Consul at Windsor to Secretary of' State, 27 Oct., 1926; Ibid. CarJAda/5710, Consul at Sault Ste. Marie, to Kellogg, 26 August, 1927; Ibid. Canada/3715, Consul. at~ndon to Kellogg, 31 August, 1927; Ibid. Canada/3695, Consul. at Sherbroolœto Kellogg, 25 August, 1927. In a f'ew areas the trea.ty vas vorlc1ng successtully. See Records, FUe No. 811.114Canada/ 3698, Consul at Hiagara Falls to Kellogg, 29 August, 1927; 90.

United states agents stressed the fact that the information given was valueless l because it had "proved to be erroneous in practically every case." Often clearances were given and no report at all sent across the border. American officials claimed that neither the true name and nationality of the vessel nor its number was reported, clear violations of the "Anti-Smuggling Treaty."

In addition to the violations of the treaty, Ame~ican prohibition agents argued that liquor slIIllggling by rail was regularly disregarded by Canadian inspectors.

Canadian liquor exporters carried liquor across the border disguised as ~, milk and oats, making only a superfic1al attempt to disguise it. ottawa had 2 not interfered with these illegal actions. The American representatives, m1 n1 m1zing the inadequacy of their own efforts to solve the smuggling problem, stressed the view that under these conditions, effective patrol or the J Canadian-American border was impossible. Only if Canada made liquor exports to the United States unlaw:tul could the situation be remedied. The Canadian orricials had, throughout the Conference, remained silent. They had gone to Washington solely to listen to the American point or view.

Wben they returned from the United States, the members or the ~oyal CoDIIIIission weighed very carefully the evidence given by the American orficials. The members knew that prohibition in the United States vas a failure. It had faUed

l Mackenzie King Papers(P.A.C.), Vol. 65, Minutes or Conference Batveea Mambers of the Royal. Commission on Customs and Excise or the Do1llinion or éanada and orricars or the United states Government, August 29 and 30, 1927. Testilllony or W.R. Vallanc., 29 August, 1927.

2 Ibid. 3 Ibid., Testimony or Adllliral Billard, 29 August, 1927. 91.

to enlist general public approval and the financial support its enforcement 1 would have required. They recognized that the meeting vith the United states officials had provided Ameriean agents with still another opportunity to attempt to fix upon Canadian shoulders the burden for border enforcement. 'Nevertheless, the evidence of widespread violations of Canadian laws and the wholesale corruption of Canadian officials made a profound impact upon them. They realized that canada's liquor export policy had contributed greatly to this moral and legal breakdown. . With the conclusion of the Conference the Royal Commission ended its

investigations. In October 1927 it submitted its long awaited report. A year of thorough examination had vindieated Stevens and unequivocally supported his accusations. The Commission made a number of recommendations, designed to root out the seandal and corruption which resulted from the violations of the liquor laws. It proposed that the $9. excise dutY be placed on all liquor 2 exported to foreign countries. It ea11ed for a11 bonded warehouses in Canada

1 , The Nation, Vol. CXXII(17 Feb., 1926), p. 167. See Ibid., "Tàe Failure of Prohibition," Vol. CXXI(7 Oct., 1925), p. 372.

2 An excise dutY on all liquor exported abroad would eut down on "short­ circuiting." Liquor exporters who had been "short-eircuiting" liquor inte Canada would no longer be able to seeure a refund on a bond by the production of false landing certifieates. Wh:Ue this vould not eliminate "short­ eireuiting," it would increase the cost of "short-cireuited" liquor and would diseourage the practice. The law might also be helpful te the United states. Liquor dealers who, te avoid paying the $9. excise dutY on liquor shipped te the United states, had produced false landing certifieates, would nov he foreed te pay the duty. This would reduee their profits and ultimately liquor companies might hesitate before shipping liquor across the border. 92.

l to be closed and·tbeir stocks transferred to the Provincia1 governments.

It suggested that Canad1an ports of entry he estab1ished a1.ong the border directly opposite tbose in the United states. It urged that tbere he a standardized system ot bookkeeping for Canadian distilleries. Finally, i t suggested that clearances be retused to all liquor-laden vessels bound tor

United states ports.

In 1926 the Canadian government had told the United states that no conterence could be held untll the report ot the qa,yal Co-.dssion had been submitted. The American otticials had no choice but to sit idly by, while the Commission moved meticulously about its work. That Commission had now submitted its report and ottawa had to decide whether or Dot to Agree to a discussion ot liquor clearances and extradition.

This decision became increasingly difticult. The revelations ot the

Parliamentary Committee hâô received a great deal ot publicity. But much ot

1ts ettectiveness ~ squandered in the politica1 baggling which tollowed. No

politics vere involved in the activities ot the Royal. Co-nssion •. For nearly a year its tindings vere one ot the Most publicized news stories in the nation.

Accounts ot the evasion ot customs duties and corruption in government dominated

the headlines and editorial pages ot the newspapers t!"Oll Victoria to Sydney. The

consequences ot the trade in liquor betveen Canada and the United states had

1 Bonded warehouses had been es tablished in Canada to store liquor pending its exporte A dist1l1ing company applied to the Federal government tor a license to eatablish one ot these varehouses. Since they vere very important to a liquor tirll, distillers vere prepared to pay the goYernaent handsollely tor permission to build thell. See A.~. Meighen Papers(P.A.C.), Vol. 145, Wi111aa Dutt to Stevens, 4 August, 1926. 93.

1 received a vast amount of adverse criticism. Canadians could now see clearly that in the liquor export trade "murder is a tactical manoeuvre, extortion a casual circumstance, blackmail an accepted part of the scheme 2 of things and bribery all in a day' s work." This adverse publicity forced many Canadians to reconsider their attitude towards the liquor export trade. They had felt that scandal and 3 corruption in government were characteristics of the "American way of life." They believed that these evils could not penetrate a Canadian society that was "more honest, more moral, more religious" than that of the United 4 states. As the Royal Commission revealed its findings these Canadians became apprehensive. Elements which had been reluctant to accept the United states view were shocked into the realization that Canada, too, was the victim of the violations of the United states law. An increasing number of Canadians was now w1lling to overlook the laxity wi th which Americans were enforcing their own prohibition law. They became less disturbed by the condemnation of

1 See Manitoba Free Press, 16 Feb., 1927, p. 13 and Toronto Globe, 11 June, 1927, p. 4.

2 Frederick Edwards, "Men Will Kill for Whisky," Maclean's Magazine, Vol. XII(l Dec., 1928), p. 4.

3 Sir ~obert Falconer, "The United states as Canada' s Friend, Il Current His tory, Vol. XXIV (May, 1926), p. 188, J .A. Stevenson, "Canadian Sentiment Towards the United states," Ibid., Vol. XXXIII(Oct., 1930), p. 314.

4 G.M. Craig, The United States and Canada(CaIIlbridge, 1968), p. 200. 94.

1 the Volstead Act by leading Americans as a "dreadfUl mistake." The effects of the United states tariff on the Canadian econo~ were less important to them than the immorality which was corrupting the nation. They believed that the evidence revealed by the Royal Commission was "a voluminous 2 indictment of Canada as a partner in the international liquor business." For the first t1me since the United states had been requesting &id in prohibition enforcement, American consul officials in Canada reported positive reactions. There had been considerable support for cooperation in the Prairie Provinces prior to 1926. Nevertheless, the consul at Winnipeg had become aware of an intensification of th1s support and he wrote about the "change 3 in public opinion that has recently taken place in the Prairie Provinces."

The consul at Victoria, British Columbia, felt that sentiment in favour 4 of cooperation "seems to be steadUy growing in this region" and the consul in Sherbrooke, Quebec wrote that "local sentiment against the 5 sale and exportation of intoxicating liquor is unquestionably growing."

1 N.M. Butler, The Problems of the Eighteenth Amendment, Political, Social, Moral (An address at the Odeon, st. Louis, Missouri, l~ Dec., 1927).

2 Toronto Globe, li March, 1927, p. 4.

3 Records, File No. 8li.114Canada/3077, Consul to Kellogg, 7 Oct., 1926. 4 Records, File No. 8li.114Canada/1385, Consul at Victoria to Consul at Vancouver, 27 Feb., 1926. See also ~ecords, File No. 8li.114Canada/3330, Consul at Vancouver to Kellogg, 30 Dec., 1926. 5 ~ecords, File No. 8ll.ll4Canada/3933, Consul ta Kellogg, 27 Feb., 1928. 95.

A perceptible change had come over many Canadians as a result of the findings of the Royal Commission. They now added their voices to those who bad consistently supported cooperation - the prohibitionists , the tlidealis ts fi and the Canadians living in the rural areas.

ether Canadians basides those alarmed b.Y the moral aspects of the trade were prepared to accept the prohibition of liquor exports. The Royal Commission substantiated the findings of the Parliamentary Committee that smuggling between Canada and the United states was a reciprocal process. "Rum-runners" and bootleggers smuggling liquor across the border were, on their return

journey, smuggling cigarettes and other commodities back into Canada, depriving the Dominion government of import taxes. In addition, these goods vere placed on the "black market" at prices far balow their legitimate value and vere 1 disrupting noraal trade patterns. Canadians in the industries affected may not have been deeply disturbed about helping the United States as a friendly 2 neighbour. They did, however, care a great deal about the effects .of smuggling

on their own pocket-books. If the smuggling of liquor into the United States was depriving them of potent1al profits, they vere prepared to support a measure :3 forbidding liquor clearances.

1 Evidence, ~oder1ck P. Sparks, President of the Commercial Protective Association, Vol. 12, 11 April, 1927, pp. 14018-140246; See Ibid., L.G. Gauthier, Collector of CustolllS and Excise, Chicoutimi, Vol. 18, 16 June, 1927, pp. 20160-1; Ibid., Richard Timmins, Inspector of Customs and Excise, Quebec, 16 June, 1927, pp. 20114ff. See Mackenzie King Papers(P.A.C.), Vol. 116, Corresoondence, Etc., Re, Prevention of Smngg1ing, Prime Minister's Office, 1925. And aurfùo Evening News, 25 August, 1926, p. 8.

2 Records, File No. 81l.114Canada/3517, Vice-Consul at Toronto ta Kellogg, 20 April, 1927. :3 Ibid. 96.

Public opinion in Canada had undergone a significant change. Yet there was no indication that the country generally favoured full cooperation with the United states. There may have been an increasing wil1ingness among

Canadians to overlook the effects of the United states tariff on the Canadian econo~. For Most of them, however, it continued to be an irritating factor.

So, too, vas the annual $25,000,000 10ss to the Canadian shipping industry caused by the diversion of water at Chicago. Many Canadians, as we11,

remained skeptical of the value of a Canadian 1aw prohibiting 1iquor exports.

Therwondered why they should he1p the United states when American officials

were calling the corruption of their border agents "a Most ubiquitous sentiment 2 permeating and undermining the waof and fabric" of the American government.

Thus, while some Canadians were changing their opinions because of the immorality

involved in the liquor trade, most continued to feel that the United states 3 was "endeavouring to dictate to its 1ess populous neighbour." They were not

convinced of the need for Canadian cooperation.

The Federal government, too, was re1uctant to cooperate. ""During the

1920's Dominion expenses were high. The Duncan Commission of 1927 doub1ed

the subéidies granted to the Maritime Provinces and at the Dominion-Provincial

Conference of 1927 all the provinces except Quebec and Ontario asked for

additional revenue. payments to the provinces rose from $18,000,000 in 1921

1 Debates, 16 Feb., 1926, pp. 545-561.

2 qecords, File No. 811.l14canada/3351, Consul at Sarnia to Kellogg, 30 Dec., 1927. 3 :tecords, File No. 8ll.114canada/3113, Consul at Montreal to Kellogg, 28 Sept., 1926. 97.

l to $24,000,000 in 1930. Meanwhile, the government, encouraged by the high level of prosperity, adopted a policy designed to reduce the federal debt and to moderate the rate of taxation. The $10,000,000 in excise duties

earned from the liquor trade helped the government carry through its program.

Mackenzie King was fully aware of the arguments both for and against

cooperation. He knew that Most Canadians would have supported, on economic

grounds, an outright refusaI of United States pleas for assistance. The

American t-1inister at ottawa, assessing the situation, wrote that "action 2 on the part of the government is unlikely." But by rejecting American

requests King would be alienating the increasing number of Canadians who

favoured cooperation. He would also be running the risk of antagonizing

the United States. King's reaction was simple and typical. ottawa would give 3 no specifie answer to Washington; but it would continue to try to pacify all

the factions involved.

This had, in fact, been the policy of the government while the investi-

gations of the Royal Commission were in progresse In June 1927 the Canadian

government announced that the 1922 bond legislation was being extended to

cover cargoes of vessels coming into Canadian ports for provisions, shelter or

repairs and afterwards proceedin~ back to sea. 'Phe legislation also provided

l Smiley, Rowell-Sirois, p. 149.

2 ~ecords, File No. 811.114Canada/3917, Ailliam ~hillips to Kello~s, ~ Feb., 192R. 3 3etween Oecember 1926 am :~ovember 1928 no comrrnmications whatever were exchar~ed between the two governments. See Infra, pp. 100-101. 98.

1 for the stationing on board of a customs officer. As a result, vessels laden with liquor for the United States vere no longer able to eatablish 2 refuelling and reprovisioning bases in Canadian ports. The Canadian government argued that liquor smuggling on the North Atlantic would be 3 greatly reduced b.Y tbis legislative enactment.

The 1egis1ation was of 1im1ted benefit to the United states. By 1927 much of the problem of liquor smuggl~g on the North Atlantic had a1reaQy been solved. It wa.s the in1and border crossings and water routes that provided the principal avenues for Canadian 1iquor exports and the extension

of the bond legislation failed to impede operations in these areas. Canadian

dist1llery products vere being sent across the border vith as 1ittle difficulty

as avar. Nevertheless, the government's decision reduced the quantity of

liquor smuggled from foreign countries, through Canada, into the United states.

It enabled ottawa to escape some of the criticism from those who supported

cooperation.

In June 1928 the govemment again took steps designed to give an impression

of prompt and effective action. A considerable quantit,y of the liquor smuggled

into the United States was imported from Europe and Great Britain. The Revenue

Minis ter , W.D. Euler, ordered all customs warehouses, estab1ished to store this

imported liquor pending its export, to be c10sed on or before the llth day of

1 statutes of Canada(lst Session of the 16th Parl1.ament), 14 April, 1927, pp. 222-234.

2 This 1egis1ation would obviously mean a substantial f1nancial 10ss to cities on the coast, which drew considerable business from ships in ports. 3 Mackenzie King Papers (P .1.C. ), Vol. 153, SU!I!JI!.!l";y ... to the Liguor Conference of 1929. 99.

June 1930. Canadian tiquor dealers could iJlport no further stock and any liquor still in the warehouses after this date would be confiscated. The government argued that since IIlUch of the liquor expor:t,ed after payment of duty went to the United States, th1.s measure would substantially reduce the 1 quantity of liquor being sllUggl.ed into that country.

In the same month the govermaent passed legislation prohibiting the importation of intox1.cating 1:1quor into Canada un1ess it was consigned ta

His Majesty for the Executive Government, or a governmental agency which, by

1aw of the province, was vested w1.th the right to sell such liquor. ottawa

claimed that this would d:1scourage entry into Canada of liquor intended 2 for the United states. As an additional restrictive measure, Euler

stated that there would be a reduction in the number of docks in the

Detroit-Windsor area from 40 to 10, thereby eliminating certain points which

the United States found it dif'f':1cul.t to patrol.

These measures prevented certain transactions involved in the shipment of

liquor to the United States. They d:1d not, however, interfere vith the

export of Canadian liquor across the berder. Still, Iling had acted on two

of the Commission's recommandations and those Canadians supporting cooperation

might e:xpect IIOre he1p. The poticy of' appeasement was world.ng very

satisfactorily.

Communications between Ottawa and Washington on the liquor question

remained at a standstill. The United States saw little hope of effecting a

1 Mackenzie King Papers(P.A..C.). Vol. 153, Sw.aary ... to the Liguor Conference or 1929. 2 Statutes of Canada(2nd Session of the 16th Parliament), il June. 1928, pp. 135-7. 100.

change in Canadian policy. Furthermore, President Coolidge was becoming increasingly indifferent to the Volstead Act. American prohibitionists made strenuous efforts to shake the President from his complaceney, but l without success. Washington avoided taking a.ny positive steps to implement the Volstead Act and its passive attitude towards the enforcement of prohibition relieved some of the pressure from the Canadian government. The establishment of a Canadian Legation in Washington in February 1927 provided the United States with an excellent opportunity of pressing its case for a ban on clearances. However, no increased pressure was exerted on Canada's minis ter , Vincent Massey, in an effort to secure a change in his government's liquor export policy. fhe United states election of 1928 marked an important stage in the history of the Volstead Act. Governor Al Smith of New York was the Democratie candidate and his "wet" sympathies were well-known. On the other hand, Herbert Hoover, the qepublican nominee, advocated strict enforcement of the liquor laws. Part of Hoover's reasons for taking this stand stemmed from his back- ground. He was a Quaker, brought up in an atmosphere which set a premium upon 2 respect for law and order. He was appalled by the disastrous breakdown of public morali ty and the contempt being shawn by Americans for a law "noble in motive and far reaching in purpose." But Hoover as a practical politician also realized that a "dry" campaign would consolidate Republican support in the agricultural West, perhaps lead to a breakthrough in the Democratie South,

and gain the votes of American vomen, enfranchised in 1920 by the adoption of

1 The Nation, Vol. CXXII(24 March, 1926), p. 306.

2 David Hinshaw, Herbert Hooverl An American Quaker(!'lew York, 1949), pp. 209- 213. 101.

the Nineteenth Amendment. He felt that the general prosper1ty of the country l would win him the votes of the "wet" East. He based his election campa1gn on the need to re-establish 1aw and order on the pedestal from wh1ch 1t had been topp1ed b,y public disregard for the Vo1stead Act. The corruption of customs agents, pol1ticians, mayors, chiefs of police, city magistrates, and 2 perhaps even Congressmen, must stop. Hoover's campaign was successful and upon bis election he p1edged his administration to this objective.

It was obvious that Canadian cooperation in the enforcement of the 3 Volstead Act vas vital. probably as a result of Hoover's e1ection, the

American m1n1ster at Ottawa put increased pressure upon the Canadian goverrl!P 4 ment for action. In November 1928 Washington asked for a conference on 5 1iquor smugg1ing and on December 12, ottawa gave i ts approval to such a 6 meeting. In Januar,y, the de1egations assemb1ed in ottawa.

1 Literary Digest, Vol. XCIX(24 Nov., 1928), pp. 14-15; Ibid., Vol. XCVII (14 July, 1928), pp. 5-7.

2 Asbury, pp. 154-155. 3 ottawa Citizen, 7 Jan., 1929. 4 Debates, 14 March, 1930, p. 60.

5 The United states finally abandoned all hopes of an extradition treaty. 6 The United states government appointed the following officials 1 Admiral F.C. B1llard(Cha1rman) , F.W. Camp, ColIIJIdssioner of CustODlS; FerdiJland L. Mayer, Counsellor of the United States Legation, ottawa; Irving N. Linell, United states Consul General, ottawa; Francis Colt de Wolf, assistant to the Solic1tor, state Departm8nt; Hur,y J. Ans1inger, l1ason off1cer betveen stata and Treasury Departments; Arthur W. Henderson, special assistant to the Attorney General; Lyon W. Mesld.ng, cOlllllercial attache at ottawa; F. J • ~pby, Elmer J. Levis, Treasury Department, technical assistants; Miss Clara Borjes, st&te Depart!llent, secret&ry. 102.

The controversy centred around the extent to which Canada!s polic.y had hindered the effective enforcement of the Volstead Act. The Canadian delegation, headed by O.D. Skelton, pointed out the positive steps Canada had thus far taken to help the United States. Skelton presented American statistics which indicated that Canadian liquor represented only 2$ to !J1. of the total &Mount available to American citizens • Under these circumstances, he felt that the success of prohibition did not depend upon Canada's export policy. The United states officials countered Skelton's statistics, cla1m1ng 1 that they were "no longer representative of the tacts." They argued that three-quarters of the liquor being smu.ggled into the United States came from

Canada. OVer the preceding two years some 634 boats, 934 automobiles (carry1.ng liquor from boats on the United states side), 46,594 cases of beer, 6,644 barrels of beer and 16,500 cases of whisky had been conliscated in the Detroit­

Windsor Area and this constituted only 51> to 10~ of the liquor entering the

United states in this region. None of the measures Canada had enacted had been of any benefit in the Detroit-Windsor or Niagara Falls-Buffalo vicinities.

It would be ditficult to determine the exact quantity of Canadian liquor being sent to the United states. It seemad unIikely, however, that Canada could be reaping such large protits unless a substantial &Mount of liquor vas fiowing

Across the border. The Canadian delegation, perhaps realizing that its statistics might he inaccurate, relied on another argument. Skel ton pointed

The Canadian representatives vere O.D. Skelton; w. stuart Edwards, Deputy Minister of Justice; 1.W. Breadner, Collll11ssioner of Customs: G. W. Taylor, Commissioner of Excise: E. Havkin, Assistant De putY Minister or Marine and Fisheries: ::t.\ol. Cavan, Chief Preventive orficer.

l Mackenzie King Papers(P.A.C.), Vol. 134, SummarY ••• Liquor Conference of 1929. out that the cost of enforcing a Canadian lawprohibiting clearances to the

Uni ted States would be substantial. He did not feel that Canada should assume such a heavy responsibility for an A~erican law. A vigilant patrol of the

United States side of the border could be just as effective as a change in Canadian regulations. .- At the conclusion of the Conference the United states, in contrast to the optimism which followed the meeting in 1923, admitted that it had "not 1 convinced the Canadians as completely as we desired." The Americans had suggested that it vas Canada's responsibilit,y to carry out the recommendations

of the ~oyal Commission, one of which had been the refusal .of liquor clearances to the United states. But they knew that the government was not obligated to

implement the recommendations if it felt that it would not be in the public interest to do so. The American officials believed that their efforts were unsuccessful and that there was little chance of Canadian legis1ation prohibiting clearances. Ear1y in February, however, Skelton sent a memorandum to the Prime Minister

giving bis impressions of the Conference. The United states ha.d made more head- way than it suspected. Skelton admitted that the Canadian representatives had 2 "not been totally convinced" by the American argument. Neverthe1ess, there

vas something in bis note which had great significance in the deve10pment of Canada's poliCYI

It will presumab1y be necessary to inform the United states of the course the government intends to fo11ow. l do not think it vould be advisab1e ••• to refuse definite1y for the

1 :tecords, File No. 711.429/216, Mayer to Kellogg, 11 Jan., 1929.

2 Mackenzie King Papers(P.A.C.), Vol. 134, 3ke1ton to King, 9 Feb., 1929. 104.

present their proposal tor clearances. We might torward a copy ot the report and state that while not yet convinced ot the necesâity ot such a drastic step, the matter would be given serious consideration. 1

The importance ot this statement in the development ot the Canadian liquor export poliey can hardly be overestimated. For almost nine years the

Canadian government had given little serious consideration to the major

United states request. Too many political and economic tactors supported the government's resistance to American pressures. Now, tor the first time since the passage of the Volstead Act, a high government official had iDdicated that the matter ahould be given "serious consideration." Skelton, though a oivil servant, vas also an important personality in the Liberal party. His position retlected the increasing concern &Mong Liberal leaders over the party's liquor export policy and the growing sentiment that the government ought te re-evaluate its rejection of a ban on clearances. The ottawa Liquor Conference had made it

clear to the Liberal govemment that its polia,y of appease.. nt might no longer

be effective.

The Canadian government vas well avare ot the tact that the Conference

ot 1929 had stimulated considerable Canadian resentment towards the United

states. In 1927 Canada was still experiencing a period ot unprecedented

prosperity. Whai.t crops vere heavy and prices vere high. Canada's indus trial

cap&city soared to nev heights. But in 1928 the tirst signs ot an economic

deterioration became apparent. Pressure on the Canadian dollar increased, 2 forcing the country ta go ott the gold staDdard. If, as President-elect Hoover

l Mackenzie King Papers(P.A.C.), Vol. 134, Ske1tan ta King, 9 Feb., 1929.

2 Brebner, p. 297. 105.

Md indicated during bis election campaign, the United States vas going to raise i ts tariff even further, the Canadian economy vould sutfer an additional blow. Under these circumst&nces, Canadians could not be expected to favour cooperation in the enforcement of United states prohibiti8n laws. In a period of economic recession, $25,000,000 was a significant accretion to the national 1 income.

There were other United States measures which antagonized Canadians.

The United States government, anrlous to protect the American labour force, nov placed a "quota" on the number of British-born Canadians who could cross 2 the border to obtain employment. Even native-born Canadians found it more difficu1t to enter the United State~. The Canadian government, on the other band, was placing no obs tacles in the way of Americans entering Canada. Many

Canadians vere irritated by this American policy because it aeemed to violate

one of the accepted conventions of Canadian-American relations, the privilege 3 of crossing the border virtually at will. Canadians were further annoyed when the United States governmant deducted from the dividends of Canadian

holders of United States securities an amount equal to the Federal tax imposed 4 by Washington. To many Canadians it was obvious that "Uncle. Sam wants te do

1 Montreal Gazette, 5 Jan., 1929, pp. 1-2.

2 Hopkins, Canadian Annual Review, ~, pp. 128-130. 3 Rochester Democrat-Chronicle, cited in the Literary Digest, Vol. CI (27 April, 1929), p. 10.

4 Hopkins, p. 127. 106.

l a max'mnm of taking and a minimum of giving." They wondered how the United states could speak about the "comity of nations" in view of the one-sided nature of Canadian-American diplomatic relations. Under these circumst&nces, they vere opposed to Canadian cooperation in the enforcement of the Volstead .

Act.

Many people liv:i.ng in areas which profited from the trade also opposed cooperation. In Quebec, liquor regulations facilitated the smuggling of liquor.

Residents of that province were permitted to boy only one bottle of spirits at a time. However, the Quebec Liquor Commission vas extremely liberal in its

interpretation of the law. A person could buy a bottle of liquor, leava the

store, and then return immediately for another bottle. This could go OR

indefinitely and it vas not uncommon for groups or individuals living in such

places as Sherbrooke, Knowlton, Riviere" du Loup, Magog and Megantic, to purchase 1iquor in this vay, load it onto a truck and then "run" it across 3 the border. Similarly, ma.ny residents of Windsor, Walkervi11e, Ford City,

Sandwich, Niagara Falls, Belleville and other communities opposed cooperation.

'!'here vas re1uctance to ban the trade in Lunenburg, Yarmouth, Saint John and

Hal1tax. The prof!ts of interested parties in aU. of these cities and towns

superseded ~ desire to cooperate vith A~er1can prohibition officials.

There vas c1ear1y considerable opposition to the prohibition of l1quor

1 Border Cities star, 9 Jan., 1929, p. 4.

2 Toronto DeUx Y.&&il and Empire, 7 Jan., 1929, p. a. st. John Telegraph­ Journal, 1 Jan., 1929, p. 4; Le Soleil, 8 Jan., 1929, p. 4; La Patrie, 8 Jan., 1929, p. 5; Sydney Post, 3 Jan., 1929, p. 4. 3 Records, File No. 842.ll4Liquor/43, Consul at Montreal to Henry L. Stimson, 2:l April, 1929. (Stimson became Secretary of State in April 1929.) 107. clearances. Despite this opposition, however, the government sensed the increased pressure being exerted upon it to ban liquor exports across the border. Admiral F.C. Billard, the Chairman or the American delegation to the ottawa Liquor Conrerence, had stated that Canada as a "rriend1y power" 1 should end 1iquor smuggling. Canada's "idealists" accepted this view and initiated a re1entless campaign to secure a revision or government po1icy.

Commencing on January 6, 1929 the Toronto Star wrote rive editorials within the space or seven days condemning the government. It is "about the 1amest 2 position any government ever put itse1r in, ft wrote the ~. "Events will go rrom bad to worse until the exemp1ary border, so admired by al! the world, 3 will cease to have anything admirable about it." The star refiected the 4 growing unrest among Canada's Itidealists." And what concerned Skelton, King, and other Liberals was the ract that so ~ people who shared the conviction 5 or the "idealistslt ware, 1ike the star, Liberal supporters.

Prohibition unions, social groups and prominent incI1riduals joined the

"idealists" in repreaching King. They sent "petitions by the hundreds" to

1 Debates, 14 March, 1930, p. 627. See Toronto Star interview with Billard, 9 Jan., 1929, p. 2.

2 Toronto star, Il Jan., 1929, p. 6. 3 Ibid., 14 Jan., 1929, p. 6; 8 Jan., p. 6; 9 Jan., p. 6; 10 Jan., p. 6.

4 ottawa Citizen, 8 Jan., 1929, p. 18 and 11 Jan., p. 22; Montreal star, 10 Jan., p. 10; Border Cities star, 9 Jan., p. 4 and 25 Jan., p. 6; 11anitoba Free Press, 10 Jan., p. 11' Regina Morning Leader, 8 Jan., p. 4; Moncton Transcript, 10 Jan., p. 6; Vancouver Morning Star, 15 Dec., 1928.

5 Y~ckenzie King Papers(P.A.C.), Vol. 1)4, 3ke1ton to King, 9 Feb., 1929. 108.

Ottawa demanding that i t end the "ne!arious business" or granting liquor l clearances to the United states. N• W. Rowall, leader or the provincial

Liberal party in Ontario between 1911 and 1917, and the chie! counsel !or the Royal Commission on Customs and Excise, began a series or letters to King in which he criticized very strongly the government's railure to carry out . 2 the recommendations or the Royal Commission. AIl or these Canadians were now unwi11ing to accept King's vacillation and they insisted upon total cooperation. The rural areas or the country continued to criticize the government. In December 1928 the United Farmers or Ontario passed a resolution demanding that the Dominion "forthwith cease to grant clearances to vessels carrying liquor for export to the United states." In January 1929 the United Farmers 3 or Manitoba expressed their support o! a ban on smnggling Along the border. 4 Federal M•. P. 's o! the Progressive ~arty condemned the government for its policy. A change in the political climate in the rural areas emphasized the advantage King might derive !rom a prohibition of liquor clearances. Over the preceding five years the political strength o! the rarmers' organizations had declined. Prosperi ty had returned. Many o! the social reforms which they had advocated in the !ields of health, labour, child velra~e and education had

1 Debates, 21 May, 1929, p. 2705. See letter to King f'rom the Social Se~ce Council of' Nova Scotia, 31 Dec., 1928. This letter appeared in the Halif'ax Herald, 4 Jan., 1929, pp. 1 and 4.

2 N.W. iowell Papers(P.A.C.), Series A, qeel C-935, ~owell to King, 29 Nov., 1929.

3 Toronto St.ar, ? Dec., 1928, p. 5; Manitoba Free Press, 12 Jan., 1929, p. 3.

4 Debates, 23 April, 1928, p. 2265. 109.

l been implemented. Wheat pools had replaced the government-created Wheat

Board and the political party was no longer a factor in the struggle for

higher wheat priees. In the federal election of 1925 the representation of

the Progressive party had been reduced from 65 to 24 seats. Many former

Progressives, convinced that their interests in relation to tariffs, natural

resources, freight rates and communications would be better served by the 2 Liberal party than the Conservatives, had voted Liberal. Progressive voters

had generally been strong adYocates of a ban on liquor clearances. If King

resolutely opposed the ·export of liquor to the United States he might increase

the appeal Liberalism was mald.ng to these voters.

King could also expect that a change in bis liquor export policy might

strengthen the provincial Liberals in Ontario, Manitoba and Alberta. Many of the

factors which had weakened the Progressive party operated as well in Ontario

and Manitoba. The United Farmers of Ontario had been defeated in the 1923 3 election and vere no longer involved in politics. Many former United Farmers of

Ontario supporters vere finding the provincial Liberals an attractive alternative~ But while the United Farmers of Ontario no longer spoke politically for the rural

residents they unquestionably refiected their moral position. The Ontario

Liberal party's efforts to capitalise on the decline in strength of the farmer

party might be enhanced by the Federal Liberal party' s prohibition of liquor

1 Morton, The Progressive Party, p. 267.

2 ~., pp. 289ff. :3 The U.F.O. devoted itsel:f to education and cooperative york. (Morton, p. 216).

4 McKenty, p. 49. 110.

l clearances. The United Farmers of Manitoba bad by 1928 withdrawn from politics.

John Bracken had split with the organization and now lad a political movem~nt, 2 using the United Farmers of Manitoba name but operating independently. In the provincial election of 1927 the Conservatives bad emerged as a potential threat to Bracken's administration. King, seeking to capitalize on Bracken's concern over the revival of the Conservative party, tried to effect a coalition which he hopad the provincial Liberals would ultimately dominate. Bracken firmly believed tbat Canada should prohibit liquor clearances to the United states. King's present liquor policy might jeopardize his chances of improving relations with Bracken's party. In Alberta, the membership of the United Farmers of Alberta 3 had dropped cons id erably • However, under the skilful leadership of Premier J.E. Brownlee and supported by a strong organization, the farmers' party remained in power. While King would be unable to dislodge the Brownlee govern- ment he feared the danger that the Liberals might be forced, despite their common interests, to become "the opposition to the farmers in the provincial 4 field." He sought earnestly to work vith Brownlee and used considerable pressure upon the provincial Liberals to cooperate. Browrilee, like Bracken, supported a ban on liquor clearances and King fel t tbat a change in bis liquor policy might help win Brownlee's cooperation. Thus, the volatile situation in

1 Morton, p. 230.

2 Ibid., p. 235.

3 ~., p. 212.

4 Mackenzie King, Diary, 17 Nov., 1929, cited in Neatby, p. 295. Ill.

Ontario, the possibllity o~ a Liberal-Progressive coalition in Manitoba, and a stronger Liberal voice in Alberta o~~ered a substantial inducement to 1 King to forbid liquor clearances to the United states. Moreover, increased

Liberal support on the provincial level would undoubtedly be re~ected in increased Faderal strength. There were indications, too, that despite the traditional urban opposition to a ban on liquor clearances, more Canadians in the cities viewed the smuggling of liquor as immoral. In December 1928 the liquor "interests" in Ontario suggasted to the Ontario Liquor Control Board that its pro~its could be tripled i~ it would designate itsel~ as the authority to sell for export and would 2 give them a acmopoly o~ purchase. Ontario's liquor dealers argued that thi,l:r

American customers would w1llingly pay "~abulous priees" ~or liquor bearing the Board's imprint. They, in turn, would be able to pay the Board highar priees. But the Royal Commission had made clear to the public tbe ef~ects o~ alliances between the liquor interests and government and the Liquor Control 3 Board ~atly rejected this schema. The Ontario government realised that many residents o~ the province lIOuld have welcomed Any means o~ augmenting profits from the liquor export trade. It recognised, however, the growing concern over smuggling and a concomitant growth of sentiment in favour of aiding the American of~ic1als. If this vas ev1dant to the Ontario government it IllUSt have been aqually c1ear to Mackensie King, to whom each sh1~t in public opinion was of major importance.

1 Mackensie King Papers(P.A.C.), Vol. 134, Letter from C.B. Sissons(University College) to Skelton, 23 Jan., 1929.

2 Toronto Globe, 5 Jan., 1929, p. 2 and 7 Jan., p. 4. 3 Ibid. 112.

The political situation in Ontario, the Maritimes and British Columbia complicated King's problem. There could be little doubt that the export of liquor was a Federal responsibility and only Dominion legislation could l produce a nation-wide law prohibiting liquor clearances to the United states. But a method was available by which the individual provinces could effectively prevent liquor from being shipped across the border. The Federal government levied an excise dutY on aIl liquor sold in Canada. In order to facilitate the shipment of liquor to the United states the government applied this dutY to liquor destined for American territory. Dissatisfied with the failure of Ottawa to act on the recommendations of the Parliamentary Committee, the United Farmers of Alberta and Bracken's Manitoba government had ruled that since the distilleries and breweries were paying an excise dutY , they were 2 technically selling the liquor in Canada. They were therefore violating the provinces' liquor control acts, which gave the Provincial governments the sole right to sell liquor. Exports to the United States had been substantially reduced as a result of this decision. If there had been Liberal governments in

Ontario, New Brunswick, Nova Scotia and British Columbia, where there was considerable support for cooperation, Mackenzie King might have induced them to follow the lead of Alberta and Manitoba. The Conservative administrations in these provinces, however, felt no loyalty to King. Their policies would

be determined solely by ~ractical considerations.

The provincial governments might profit directly from a ban on liquor

l Border Cities star, Il July, 1928, p. 1; 12 July, p. 41 13 July, p. 3; 23 July, p. 4, 10 August, p. 1. See Toronto Globe, 17 August, 1928, p. 1 and 20 August, p. 4.

2 Manitoba Free Press, 25 March, 1930, p. 1. 113 •

.,..., élearances. Legal exports to the United States would be eut off and while smugglers might satisf'y a limited demand Americans would find i t necessary to cross the Canadian border for any sign1ficant supply. The Provincial

Liquor Control Board, as the only legal vendor, would have a substantial new source of revenue. Manitoba had limited the purchase of liquor to a single case per person per day and this regulation discouraged ~ Americans from buying liquor in that province. Alberta also Md stringent liquor laws 1 and American saugglers could easlly be detected. Other provinces, however, might be willing to make liquor more read1ly available to American tourists in order to capitalise on the prohibition of clearances.

But there were other factors which the provincial governments had to consider. In Ontario man;y were diaturbed by the immorality involved in the liquor export trade. The decision ot the Liquor Control Board attested to this fact. Moreover, the Board's chairman, Sir Henry Lumley Drayton, ns a 2 staunch supporter of cooperation. Yet the Conservative government ot G. Howard

Ferguson relied very heavily on urban votes and i t was the urban areas which vere being most severely affected by United states economic policies. They opposed maldng a unilateral concession to the United states. Furthermore, there vere 27 3 breweries scattered across the province. Many people living in collllllWÜ.ties in which they operated strenuously objected to any action prejudicia1 to their

interests. They obviously felt that there vas more protit involved in catering to

the large American market than vas oftered by the l1m1 tee:! number of Americana

1 Statutes ot the Province of Alberta(Fourth Session of the Firth Legislative Aaseably, 1924), pp. 128-174.

2 Border Cities star, 23 July, 1928, p. 4.

3 Canadian !rade Index, ~ (Ottawa, 1930), pp. 330-1. ll/.!..

who could come to Canada. W1.th so many of Ms supporters opposed to cooperation, Fergoson coUld hardly take action to help the United states.

In British Columbia and the ~t1mes there vas growing support for the prohibition of Clearances. Bat none of the three premiers, S.F. Tomlie of British Columbia. J.!J. 3axter of New Brunswick and E.N. Rhodes of Nova

Scotia, felt it prudeDt. ta 1.ntroduce a major polit1cal issue by taking independent action to co.t ofi c1earances. Thus none of the Conservative governments vas disposed tG deal vith the liquor export question.

Mackenzie King sigbt have attempted to fix upon the Conservative

governments the respoDS1hi1ity ror prohibiting liquor exports to the United states. The dev1ce used b.Y A1.berta and Manitoba provided a precedent wh1ch

Ontario, British C01l1!1!bia. New 3runsw1ck and Nova Scotia might weIl have

emulated. However. Dng coul.d easlly see where such an argument might

lead him. Canadians vbo $1Ip!'Orted cooperation knew that the Conservative

governments were llI'IWlling to provoke controversy over tbis issue. Had King

suggested that these prow:1Dcas ban llquor clearances the sincerity of bis

desire ta de&! with the ?rQb1em ~d undoubtedly have been questioned.

On the other band, :if' King pre5sed the provincID--governments to ban liquor

exports he would have antagon1.sed those Canadians who opposed restrictions

on liquor Clearances. King sav no political advantage in trying to convince

the electorate that the ..tter of tiquor experts could be a provincial

res pons ibllity.

King realized that he had to talce some action, but he was not yet 1 convinced that total coo?Bration ~ bis visest political move. There would

1 10well Papers(?A.C.). Series A, ~eel C-935, King ta Rowel1, 23 May, 1929. 115.

always remain "an important element of opinion" opposed to aiding the 1 United States, and King intended to make one final effort to continue his vacillatory policy. In March 1929 he offered the United states govemment permission to station its own prohibition agents on Canadian soil, a drastic step which, Skelton admitted, King hoped "might be satistactory to the United 2 states short of retusal of clearances." The United states, as a matter of strategy, refused this offer, claiming J that it was an "empty gesture." American ofricials probably detected the

growing pressure being exerted upon King. They knew that if they accepted the proposal it would serve only to indicate their satisfaction with the erlsting situation and provide an excuse for further delay. The United States 4 would now be satisfied with notbing short of full cooperation. Thus in mid-1929 Canada's liquor export policy was in a state of uncertainty. Mackenzie King perceived clearly that there vas growing support for cooperation, particularly among bis own party following. But strong opposition erlsted to "giving sOllleth:1ng for nothing" to a country so unwilling to reciprocate for a Canadian gesture of triendliness. Meanwh1le, as the Prime Minister was trying to decide the course he would follow, the Most important

event of the prohibition period took place. On March 22, 1929 the "rum-running"

1 Records, P'ile No. 711.429/205, Legation at Ottawa to Kellogg, 29 Dec., 1928. 2 Records, File No. 711.429/234, Legation to Stimson, 21 March, 1929. 3 Records, File No. 711.429/235, Treasury Department to stimson, 6 April, 1929. 4 Ibid. 116.

schooner, the l'm Alone, was sunk by the United states coast guard some 275 miles trom the America.n coast. Ca.nadians and Americans paused to consider the impact this sinking woul.d have on Canadian-American relations. The serious international dispute which many had been predicting nowappeared a possibllity. CHAPTER V

PROHIBITION TAKES TO THE RIGH SEAS

The sinking of the l'Il Alone and the harsh treatment to which its eaptain and crew were subjected aroused intense resentment in Canada. Many

Canadians supported UD1ted States efforts to obtain Canadian cooperation in the entorcement of prohibition. Fev believed that a domestic law could

justitiably be app11ed beyond American territorial waters. The "l'Il Alone" aftair vas settled amicably; but i t demonstrated clearly to Canadians that they could expect ffN easy victories in their diplomatie dea11ngs vith the United States.

The United States prohibition bureau lacked the twxls œcessary to

entorce the Volstead Act. But -D)" coast guard otticials vere detera1ned to use the seanty rums at their disposal to elli 11quor smugg1.1ng into the

United States. Armed vith ritles alli lIIILchiœ guns, they t'ired at th. sllUgglers

on almost aD)" pretaxt in order to "det.m" h.rican shor.s. Hardlya day passed vithout stories ot shootiDg iDcidents ard seisur.s or "rum-running" vessels appeariDg in Canadian, herican or antish D8V8papers. American prohibition otticers bad a l.gituate right to pursu. and captur. v.ssels tourd with1n th. recognised three 11111. territorial lJ.II1t.

In addition. Any v.ssel vbich r.tused to stop witbin territorial waters could

l.gally be chased ento th. h1gh seas. Th. interDatioD&l doctrine ot "hot

pursuit" pend.tted a _Uon to ~ollOlr to any distaDee trca th. coast toreign

v ••••l. suspected ot nol.atiDg a. dœestic bv, ~o long as th. "chas." began 118.

1 within the thr.e mile limit. Und.r no principle of international lav, however, could the Urdted states bagin a chase or capture an anchored vessel bayond three miles fro. the coast.

The Urdted States coast guard should have contined its activities to the legal lim1.t. Washington had always regarded as sacrosanct the concept of the

"treedom ot the seas." In tact, violations ot this doctrine vere at least partly responsible for the War ot 1812 and the United states entry into the First World Wu. But prohibition agents otten bagan chasing and seizing

vessels tar beyond the tbree m:1l.e limit. The sei~ure ot the Canadian "rum-

runniDg" schooners, the Gardiner, twenty-four m:1l.es trom the coast, and the

Marion Mosher, several m1l.es beyond territorial waters, vere typical examples

ot ill~gal coast guard activ1ty. Even countries which wished to help the

United states entorce prohibition could not condone the illegal capture ot

vessels on the high seas, merely on the suspicion that they vere carrying

tiquor. These nations vere not particularly concerned with the plight ot

the "rum-runner. H They vere, however, anxious to protect the rights ot

iJmocent v.ssels and they did not teel that they should band an international

principle to acco1lllllOdate an AIlerican tiquor lave Moreover, they feared that

their ~a1lure to protest illegal sei~ings JI1.ght establish an unacceptable

precedent and lead th. United states to believe that it might, with impunity,

violate not cmly this, but perhaps other international laVIS. Foreign nations

agreed vith the St. Lous star that the sei~ing ot their vessels wu "a

1 L. Oppenh.ta, ~penhe:1Ja's International Law, edited by H. Lauterpacht, (Great Britain, 19 1), p. 604. 119.

1 mixture of doubtful law and undoubted hypocrisy."

The coast guard's indiscriminate seizure of vessels created difficulties for the State Department, which had to deal with t~e protests of foreign nations. According to United States. domestic law, coast guard officials could seize any ship within twelve miles of the shore if it appeared to be violating an American regulation~ But the state Department real1zed that foreign countries would reject the argument that a domestic statute took precedence over an international 1aw. The American cabinet feared that serious

"diplomatie discussions with foreign nations" might result from the failure of the coast guard to uphold international marit1.'11e rulings. In 1922 it suggested to prohibition officials tbat they "use more judgement" in their 2 efforts to prevent the smuggling of liquor into the United States.

The state Departm9nt knew that overzealous coast guard agents would continue to act 1llegally. Furthermore, the Treasury Department, which directly contro11ed these officia1s, did nothing to curb their activities.

On the contrary, i t encouraged them to patrol the high seas vig1lantly. An alternative solution was required which would give the coast gua.rd more scope and would, at the same t1me, reduce the incidence of crises on the high seas.

The Convention of 1924 seemed to solve the problem. While they reaffirmed

the basic three mile limit, Great Brita1n and the Dominions acceptee! an

1 st. Louis Star(cited in the Canadian Annual Review, 1922, p. 141).

2 Governor General's Numbered Files(P.A.C.), Vol. l(a), Sir Aukland Geddes (British Ambassador) to Sir Julian Byng, 26 Sept., 1922. 120.

extension of the right of "search and seizure" to within one hour's sailing distance from the coast, when vessels were suspected of carrying liquor. This extension added flexibility to the coast guard's efforts to protect American waters. It could now legally patrol the American coast in search of "rum-runners" wall beyond United States territorial waters. "Rum-runners" could no longer anchor outside the three mile limit in preparation for smuggling liquor into the United States. They would be forced to remain at a mach greater distance from the coast and this would increase both the difficul ty of landing their cargo and the danger of being caught. The signatories hoped that the coast

guard would not abuse the treaty by threatening innocent vessels or seizing

" "rum-runners" beyond the limits permitted by the treaty. If the treaty 1 were faithfully adhered to, a "serious conflict" might be prevented. The new treaty did not, however, solve the international complications resulting from illegal coast guard activity. Zealous American officials, their strength augmented by new cruisers and destroyers, continued to pay little respect to the righte of foreign vessels to sail th. high seas without interference. Before 1924 they had pursued and captured vessels beyond the three mile limite Nov they seized theDl fifteen and tventy miles from the coast, distances far greater than MOst of the "rum-runners" could possibly travel in one hour. They used rifle tire indiscriminately, with little concern about 2 where their bullete might land. These constant violations of the right to

the "freedom of the seas" forced Sir Es .. Howard, the British Ambassador to the

1 Records, ru. No. 811.114I'm Alone/46l.

2 Governor General's Numbered Fi1es(P.A..C.), Vol. 6(.), British Embassy to Sir Julian Syng, 9 A.ugust, 1926. 121.

United states, to warn Secretary of State Kellogg that a "difficult situation would certainly arise" if the activities of the "prohibition fiotilla" vere not curtailed.

In March 1929 the "difficult situation" which Howard had predicted developed. The United states coast guard vessel, the WQlcott, had noticed the notorious "rum-running" schooner, the l'. Alone, hovering off the coast of

Louisiana. Somewhere between twelve and fifteen miles from the coast it began to chase the schooner, continuing in pursuit for sevent,y-five miles, over a period of two days. It was then joined by a faster vessel, the Dexter, which took over the pursuit. Well over two hundred miles off the coast, the Dexter caught the l'm Alone and sank it. The captain and crew vere placed in chains in New Orleans. One crew member, a French citizen, was drowned. "

The l'm Alone appeared to be of British registry. Howard protested the sinking to the State Department. Britain had vast maritime interests and was particularly sensitive to any infringement of the rights of ships to sail the high seas. The deliberate sinking of a British vessel could not go unchallenged.

The vessel waSt however, of Canadian and not British registry. This discovery was greeted vith relief in both Great Britain and the United states.

The United Kingdom had been of considerable help to the United states in the enforcement of the Volstead Act but relations between the two countries during the 1920's vere strained. The A!nerican violations of the doctrine of the 2 "freedom of the seas" created a great deal of ant&gonism in Great Britain.

1 Govarnor General's Numbered F1les(P.A.C.), Vol. 4(Part 11), British AlIlbassador to Syrus, 4 Nov., 1925.

2 "Cold Rands Aeross the Sea," Literary Digest, ~/o1. c(3o !-'.a.rch, 1929), p. 15. 122.

The British government's reluctance to endorse the Briand-Kellogg Pact, outlawing war, angered many Americans. Conversely, the continuing expansion of the United states navy, though not technically a violation of the 1922 1 Washington treaty, led to considerable British resentment. Had the l'm Alone been of British registry London would have felt ob1igated to defend the vessel. The tension between the two countries would likely have increased. The Canadian registry of the schooner reduced the risk of a major international 2 dispute between two great powers. Forty-eight Canadian "rum-runners" vere seized by the coast guard 3 between 1922 and 1930. In none of these cases, however, was the vessel chased so far out to sea and then destroyed qy gunfire. The destruction of the l'm Alone received more publicity tban any other "rum-running" incident. stories of the sinking were carried on the front pages of most Canadian and 4 American dailies. Interviews with the ship's captain, John Randall, appeared in the press and the story he told of his "heroic" adventure at sea stimulated

1 "As the British View Our Big Navy Pro gram , " Literar:y Digest, Vol. XCVI (14 Jan., 1928), pp. 16-171 "Uncle Sam As Seen From OVerseas," Ibid., Vol. XCIX(10 Nov., 1928), p. 20; Ramsay MacDonald, "America am England," The Nation, Vol. CXXVIII{30 Jan., 1929), pp. 136-137.

2 Washington Even:ing star, 26 March, 1929, p. 8.

3 New York Times, 30 April, 1929, p. 2. 4 Captain ~anèal1 had been a British Naval Officer during the First Wor1d War. He bad a very high reputation as a sea officer. John E. Raad, ~rnal Arfairs Legal Advisor aï~ the man who de!ended the lem Alone, had a particularly high regard for Randall. (Personal Interview, 20 Nov., 1967). 123.

1 imaginations in both oountries. The right o! vessels to sail the high seas without inter!erenoe was debated extensively in the press and in government oiroles. No event comparable to the "l'm Alone" ar!air ooourred during the whole o! the prohibition periode A.L. Gamble, commander o! the ooast guard in the Gul! o! Mexioo, and

i Andrew Mellon, Seoretary o! the Treasury Department, immediately justi!ied 2 the sink1ng. They argued that the r'm Alone had been "running" liquor into the United states for over rive years and on this partioular voyage had 2,800 oases of liquor on board. The coast guard and the Treasury Depar"tment were being severely oritioized for their !ailure to en!oroe the Volstead Aot e!!ectively. Gamble and Mellon olaimed that i! the Aot were to aocomplish its 3 purpose suoh vessels as the l'm Alone must be stopped. But as the reports o! the sinking and the subsequent events became known it vas evident that the ooast guard oould expeot little support within the United states. Many government o!!ioials saw olearly that there vas far more involved in this issue than prohibition en!oroement. Members ot the State Department and the Commeroe Department !eared that foreign governments might think that innooent vessels would be sunk, merely on the suspioion that they

1 See letter to the Editor of the Halitax Chroniole, 24 April, 1929, p. 6. See also Editorial, 26 March. 1929, p. 6.

2 Boston Herald, 25 Maroh, 1929, p. 2. 3 AtJ.anta Journal, 26 March, 1929, p. 8. 124.

1 were carry1ng l~quor. Nat~ons might then d~vert the~ merchand~se to non- 2 Ame~can ports, to the detriment of the American economy. Those agenc~es not spec~~ca11y charged with the respons~bllity of enforcing pro~bi~ion agreed that the 1aw could be enforced within the United States. They did not :3 agree that it could be enforced on the high seas.

Anti-proh1.bit1onists among the American public severe1y critici~ed the

coast guard's actions. They saw pro~b1tion. in princip1e, as a limitation ot

the~ freedom and an infringement of the~ civil r1ghts. They condemned

United States efforts to extend the Vo1stead Act to the vesse1s of fore~gn

count~es. The anti-prohibitionist st. Louis Post-Dispatch wrote that

fore~gn nations could not consent to having the~ 1egit1mate rights "ruthlessly 4 invadeci" by the coast guard. The Chicago Dailv Tribune urged Admiral Billard 5 to curb 1mmediately the off1c1als' actions. The "Pm Alone" sinldng~, for

the anti-prohibitionists, another manifestation of the many prob1ems created

by the prohibition amendment.

1 Manitoba Free Press, 25 March, 1929, p. 11 Edmonton Bulletin, 10 April; 1929, p. 1.

2 Manitoba Free Press, 25 March, 1929, p. 1. :3 Atl.anta J o1J1"na1 , 27 March, 1929, p. 2. 4 St. Lou:1s Post-Dispatch, 27 Maroh, 1929, p. 20. 5 Ch1.cago DaUy Tribune, 19 April, 1929, p. 14. 6 Atlanta Journal, 26 March, 1929, p. 8; 27 March, p. 2. 125.

Many committed "drys" in the United states also refused to support the coast guard. They vere not particularly concerned about the rem Alone.

But they argued that as long as the export of liquor from Canada vas legal

the Dominion had every right to be disturbed by apparent violations of 1 international lave Furthermore, the prohibitionists vere attempting to

convince Canada to change i ts liquor export policy. There vere definite

indications that public opinion vas shifting. Some American "drys" felt

that the present incident might force doubtrul Canadians to adopt a more

rigid position on the question of Canadian cooperation. Canadians vere

extremely upset by the one-sided nature of Canadian-American diplomatie

relations and American "drys" vere disturbed about the effect the sinking

vould have on Canadian public opinion. They felt that Canada might even denounce the 1924 Convention and thus ensure a return to widespread smuggling 3 from the high seas. The coast guard could count on little popular American 4 support.

1 Detroit Free Press, 13 April, 1929, p. 6.

2 ::{egina Morning Leader, 1 April, 1929, p. 1.

3 Washington~, 26 March, 1929, p. 1; New York~, 26 Harch, 1929, p. 1.

4 New York Wor1d, 26 March, 1929, p. 14; Buffalo Evening News, 18 April, p. 8; NewarkStar Eagle, 26 March, p. 12; New York Herald-Tribune, 27 Karch, p • 6; Los Angeles Times, 21 April, Part 11, p. 4. 126.

A minority of Canadians saw no valid defence for the !lm A1one. The sinking reint'orced their conviction that it vas Canada 1 s liquor export policy ard not the American coast guard which vas responsible for crises on the high seas. The !lm Alone had received what it deserved ard they hoped ottawa would 1 MW admit tha t a change in po1icy vas required. These Canadians a ttached no significance either to the possibility that an international lav might have 2 been broken or to the fact that the export of liquor from Canada was l.egal..

The incident would not have taken place had Canada prohibited s1mh vessel.s as the !lm Alone from sailing from Canadian ports.

As had been predicted, however, there was considerable resentment in 3 Canada. Those Canadians who had. opposed cooperation in the enf'orcemeilt ot the Vo1stead. Act were, na tural.1y , the most vocal critics ot the coast guard. 4 The Victoria DailX Co1onist aai the Toronto O4ilX MaU ard Empire telt that the United States intemed to become "the bully ot the high seas.,,5 The sinking stirred up memories of the Alaskan Bouniary Dispute am some Canadians saw it as typica1 of the type ot treatment Canada could expect trom the United

1 Edmonton Bul.l.etin, 1 April, 1929, Border Cities Star, 11 April, 1929, p. 4.

2 Dr. W.I. Ritéhie of the Montreal Witness, cited in Debates, 7 June, 1930, p. 4319. 3 John E. Read, Personal. Interview. 4 Victoria DaUX Colonist, . 27 March, 1929, p. 4: 3 AprU, p. 4. 5 Toronto DaUx MaU aai Empire, 26 March, 1929, p. 11. States.l Canadians knew tbat they cou1d. not go to war over the Pm Alone, 2 or aven threaten to. But they urged the government to protest to the State

Department in the strongest possible terms. The sinldng reinforced their bellef that the United states did not deserve Canadian cooperation in the ertrorcement of' its liquor laws ard some felt that Canada should withdraw ilümadiately !"rom the treaty of 1924.3

Even many Canadians who had supported cooperation criticized the action of the coast guard. These Canadians showed llttle sympathy for the "rum-runner" am they expressed the view that Canada' s liquor export policy was at least 4 partly responsible for the affaire But they belleved that the sinldng and the treatment of the captain ard crew were unjUstif'ied.5 The Toronto ~, the Regina Morning Leader am the Manitoba Free Press aU questioned the actions 6 of the coast guard. They, too, telt that the Canadian government should deferd the rights of vessels to sail the high seas without interference. The sinldng did not change their overall attitude towards Canada's role in prohibition

1 L'Eve'nem~nt, 26 March, 1929, p. 4.

2 John E. Read, Personal Interview. 3 Montreal Gazette, 9 April, 1929, p. 12; La Patrie, 26 April, p. 6; La Press.,26 March, p. 4. 4 Toronto Globe. 26 March. 1929. p. 4: Manitoba Free Press. 9 April. 1929. p. 13. 5 Debates, 21 May, 1929, pp. 2688-2689. 6 Toronto ~, 2 April, 1929, p. 4: Regina MorDiDg Leader. 2 April. p. 4; Manitoba Free Press, 3 April. p. 13. 128.

enf'orcement am when the matter had ceased. to be one of public interest they resumed their criticism est the Canadian government. But they showed. obvious resentment at United States attempts to axtend its domestic law to the high 1 seas.

While the Canadian and American publics deba ted the varions aspects of

the case, the two goverrments exchanged correspondence concerning i ta lega1

implications. It was clear that despite the widespread condamnation of the

coast guard. the State Department had every intention of deferr:ling its agents.

On April 25. 1929 the contents of four notes which had passed between ottawa

and Washington were made public. The two governments disagreed widely on the

1egality of the sinking.

A serious flaw in the treaty of 1924 complicated the legal position.

For aU the praise the treaty bad received am. for all the noble intentions

of its signatories. the Convention was singularly imprecise in its terms. The

nations iuvolved had extanded the right of IIsearch am. seizurell to one hour' s

sa1l1ng distance trom the coast. They had not stated whether there was an

equal extension of the right of "hot pursuit" or whether that pursuit had 2 still to originate within the three mile limit. The New York World wrote that

IIthere seems to be no reason why these points should not have been discussed,1I3 4 am its criticism was certainl.y valide Considering the importance which a11

nations attached to the lIf"reedom of the seasll such points might well have been

1 Montreal Star. 27 March, 1929. p. 10. 2 Oppenheim. p. 498. 3 New York~. 27 April. 1929. p. 13. 4 Lonion~. 8 April, 1929. p. 13. 129.

clariried.

The United states government claimed tbat the Convention had extended the right or "hot pursuit." Wasb:lngton pointed out tbat previously three vesseIs, the Newton Ba.y, the Vinces and the Pescawha, ha.d been seized on the high seas rollowing a chase wh:ich had begun beyond the tbree mile l.imit but within one hour's saUing distance from the coast. United states Federal.

courts had ruled the seizures legal and neither Great Britain nor Canada had 1. protested the decisions. The American government relt that the seizing or the

l'm Alone vas no ditrerent to the cases or these other vessels and it railed

to underst&nd why Canada vas now protesting. Washington argued further that if

the right or "hot pursuit" had not been extended, such smugglers as Randall

could land their liquor surreptitiously in the United states and then escape,

without being detected, beyond the three mile limite The coast guard might

approach them vith the object or searching the vessel on the grounds that

it vas witb:ln one hour or the coast. The "rum-runner" could, merely by beginning

to move out to sea, bar pursuit by prohibition orricials. This, the United

states government relt, could not have been the intention or the rormulators

or the Treaty or 1924.

The Canadian government, n..aver,rejected the American interpretation.

It emphasized the ract that neither it nor the British government had accepted

the decisions or the United states courts in the cases or the other vessels

seiBed. The United states had no right to "assume" that an extension or

"hot pursuit" had been granted by the Convention. The signatories had

reaf'rirmed the principle governing territorial waters and Canada resolutely

maintained tbat any chase "must he initiated within territorial waters."

l Herbert W. Briggs, The Law or Nations(New York, 19)8), p. 386. 130.

Moreover, Randall c1aimed that he was stationed 14 or 15 miles rrom the coast when the chase began. The furthest distance the r'm Alone could trave1 in one hour vas approximate1y 8 miles. Even allowing for exaggeration and error it appeared unlike1y that he vas within this distance of the coast.

The Un:1ted states might argue that the Convention had extended the right of

"hot pursuit" to one hour from the coast, but Canada held that the r'm Alone wU, in any case, too far from the shore to justiry the initiation of pursuit.

Furthermore, the Un:1ted States argued tha.t the Dexter and the Walcott had

acted "co-joint1y" and the 1egality of "hot pursuit" had not, despite the

change of vesse1s, been violated. But Canada maintained that there vas

nothing in international 1aw which declared that "hot pursuit" justiried

the application of~elay race" regalations for three days and 200 miles.

Finally, Canada emphasized the view that no ofrence, not even "rum-running," 1 varranted a course in peacetime "so drastic as the destruction of a vessel."

The publication of the diplomatic notes revealed that Canada and the

Uni ted states had arrived at comp1ete1y dirferent interpretations of the 2 treaty of 1924. The divergent views intensified the emotional impact created

by the s1nld.ng. It exacerbated the tension which &lready ex1sted and po1arized

opinion against the United states government.

1 King's Print9r, The "l'm Alone" Incident, Correspondance Between the Governments of Canada and the Un:1ted States, 1929{ottawa, 1929).

2 Ibid. 131.

Most American newspapers severe1y criticized the state Department's 1 decision to defend the coast guard. The anti-prohibitionist st. Louis

Post-Dispa"teh wrote that "the freedom of the seas ••• 15 not to be placed in 2 the same eategory with foo1 causes like prohibition." other newspapers 3 recognized their government's 1egal right to defend its prohibition agents.

They fe1t, however, that the United states had far more ta gain dip1omatical1y

by admitting that the coast guard had erred than by defending its questionab1e

actions. There was general agreement that the government had not fo11owed 4 a wise course.

Canadians also reacted adversely ta the State Department's decision.

C.H. Cahan, the Conservative M.P. for st. Lawrence-st. George, called the

sinking "an actof war" if sanctioned by the politieal authorities and "an 5 act of deliberate piracy" if done solely on the initiative of the coast guard.

Telegrams vere sent to ottawa urging it to take a firm stand towards the United 6 states. Th. Toronto ~ had confidently expected the United States to adm1 t

1 Exceptions vere the Washington Post, 11 April, 1929, p. 6 and Boston Herald, 27 March, 1929, p. 20.

2 st. Lou:1s Post-Dispa"teh, 29 April, 1929, p. 22. 3 New York l!!!!!!., 'l:l April, 1922, p. 18. 4 New York Herald-Tribune, 27 April, 1929, p. l, Buffalo Evening News, 27 April, p. 8, New York!!2!!2., 27 April, p. 12; Newark Stu Eagle, 'l:l April, p. 12. 5 Debates, 20 May, 1929, pp. 2658-9. 6 ~.B. Bennett Papers(P.A..C.), File 33. G.N.E. strong(Coalspur, Alberta) ta Bennett, 7 April, 1929 and 20 April, 1929. 132.

1 that the coast guard had exceeded its powers. When no such admission came, 2 it expressed deep disappointment. The Globe's reaction reflected the general :3 Canadian antagonism towards Washington' s actions.

The Canadian resentment of the State Department' s lack of magnanimity was intensified by its own growing sense of autonomy. Canada had not been mentioned separately in the Convention of 1924 and some members of the

Department of External Affairs argued that technically it was Great Britain' s 4 responsibility to defend the schooner. The British government did make suggestions to CanadaS but it did not instruct ottawa on the hamling of the 6 case. Canadians knew that Great Britain had withdrawn from active partici- pation in the "I 'm Alone" incident partly out of a desire to avoid a major

controversy with the United States. But they saw the British action as

1 Toronto ~, 10 April, 1929, p. 4.

2 lli.!!., 26 April, 1929,p. 4. 3 John E. Read, Personal Interview. See Records, File No. 811.114I'm Alone/ 148, Consul at Sault ste. Marie to Sti1DàOJl, 16 May, 1929; Ibi4l., File No. 811.114I'm Alone/57, William R. Castle (Assistant Secretary of State);to Stimson, 27 March, 1929.

4 John E. Read, Personal Interview. 5 Mackenzie King Papers(P .A.C.), Vol. 80, Memoramum from the Office of the Eiigh Comm1ssioner for the United Kingdom to Canadian Government, 28 August, 1929. 6 John E. Read, Pttrsonal Interview. 133.

1 reoognition of the Dominion' s growing status. They bell.eved, too, that 111 th this status oame responsibilities. Canadians took pride in the faot that they vere defending not only their own interests but an important international 2 prinoiple as welle Theyappreoiated the new role they vere p1aying in world affairs. lt made them peoul.iarly sensitive to wbat they suspected were

American efforts to "push them &round."

Canadians were disturbed by the s1nking of the l'. Alone and they wished the government to defend vigorously the rights of vessels to sail the high seas freely. This might have posed a serious problem ror the Liberal administration. Although oommitted to the defence or the prinoiple of th. 3 "freedom of the seas," ottawa desired lino long dr&1lll out diplomatic controversy. If

The government continued to believe in the value of closer Canadian-American ties and a serious diplomatic dispute would place its cause in jeopardy.

The Canadian government vas fortunate that the Convention of 1924 provided

the machinery for settling such disputes as the "l'lB Alone." The two parties were to submit the controversy to arbitration. ottawa knev tbat the leisurely

tempo which characterizes arbitration proceedings would belp remove the issue

trom the public forwa. Canadians would soon fcrget the incident &rd their

antagonism towards the United states would d1m1.rdsh. At the suse time, the

appointMnt of John Read as Canada' s legal representative provided the country

vith a formidable advocate. Raad vas a distinguished lavyer who had been legal

advisor for the Depart&ent of External Affairs sinee 1919 aDd vas f'ully competent

1 Manitoba Free Press, 15 April, 1929, p. 17; Ottawa Citizen, 9 August, 1929, p. 18; Regina Morning Leader, 30 April, 1929, p. 4; London Daily News, cited in the Edmonton Bulletin, 28 ~.arch, p. 1; London Morning Post, ill2..

2Records, Flle No. 8ll.114I'm Alone/126, Ph1ll1ps to Stimson, n April, 1929.

~ckenz1e King Papers(P.A.C.), Vol. 80, Ske1ton to K1.ng, la ~r11, 1929. 134.

to present Canada's case. Submitting the dispute to arbitration would thus safeguard Canada' s interests and would, as well, prevent public opinion 1 from stimulating a serious international crisis.

The state Department also felt that arbitration would serve its interests. The government had chosen to defend the coast guard but Washington recognized that its decision was an unpopular one. The "Pm Alone" incident revealed clearly th. lack of support for the Volstead Act and the administration did not wish to be subjeoted to turther criticism from American "wets. If lt, too, hoped that the affair would soon be removed trom public view.

The two governments succeeded in their objectives. The -l'm Alone"

controversy, upon which public interest had for over a month been dramatically

focused, was by mid-1929 no longer a serious issue. The press showed little

concern with the arbitration proceedings and referred to them only scantily.

Canadians, no longer confronted with the customary barrage of comment on 2 the "l'm Alone" sinking, were apparently pr9pared to forget it.

The two countries debated the sinldng for six years, elaborating on the 3 arguments presented in the diplomatie exchanges. The Commissioners attempted

to determine whether the "pursuit" was legal and whether the coast guard had

used excessive force in apprehending the vessel. The crews involved were

subpoened in an effort to he1p the Commissioners come to a decision on the

latter point.

1 John E. R.ead, Persona! Interview.

2 Ibid. 3 King's Printer, Claim of the British Ship "l'm Alone," (Ottawa, 1933); Uni ted states Govermaent Printing Oftice, Cl.a1m in qesoect of the Ship "lem Alone," (Washington, 1933). 135.

l The Canadian law,yers were confident tbat they bad the stronger case.

However, one development in the proceedings left them completely "stunned. tt

During the hearings the United states attorneys produced evidence which revealed tbat the lem Alone, though registered in Canada, was "owned, contro~ed and, at the critical times, managed" by citizens of the United States. Canada appeared to be protecting not only the rights of vessels to sail the high seas but also the right of American cit1zens to violate United states laws.

Read knew tbat this revelation would affect the court's decision.

The final verdict on the "l'm Alone" &ffair was rendered in January 1935. The Comm1ssioners were unable to reach a dec1sion regarding the legality of the pursuit. They did, however, decide tbat the coast guard hac:1 acted 1llegally in sinking a foreign vessel on the high seas. However, because the vessel vas controlled by American citizens, no compensation was made for the sunken vessel or the cargo. The United states, in addition to sending Canada an official apology, paid $25,000 to the Canadian government and $25,666.50 to the cap tain and crew, "none of whom was a party to the 1llegal conspiracy to smuggle liquor into the United states and seil the same there." John Read vas "completely

satisfied" vith the result. He faIt that Canada had not only successf'ully

defended her own interests but hac:1 also preserved the right of all nations to 3 use the high seas in accordance vith es"tabl1shed international practice.

l John E. Read, Personal Interview.

2 Ibid. 3 Ibid. See Oppenheim, 498. 136.

The "I 'm Alone" incident had intensitied the liquor export controversy in Canada. Umoubtedly, it had polarized the existing Canadian attitudes towards cooperation in the enf'orcement of the Volstead Act. Canadlan "idealists" f'el t that the sinking was unjustif'ied. But they believed that the Canadian government, by permitting vessels to be cleared for the United States, was acting in complicity with the smugglers to violate the laws of a frieDily neighbour. The "idea1ists" were pleased that the two governments had remained on cordial terme throughout the discussions.1 Nevertheless, they feared the recurrence of' similar controversies and they felt that the most effective means of' preventing them vas a change in Canadian policy. On the other harxi, those Canadians who opposed cooperation were, as a result of the sinking, more adamantly than ever determined to oppose Any modification of Canada's starxi.

They saw the actions of' the coast guard and the State Department as typical of the cavalier vay in which the United States treated Canada' s interests. They

Md no desire to assist an uncooperative neighbour.

But the "I 'm Alone" affair produced consequences which transcerxied the immediate impact of prohibition enf'orcement. Canadians lmew that Washington had agreed OlÙ.y reluctantly to separate Dominion representation at the Paris

Peace Conference(1919), in the International Labour Organization(1919), am at the Washington Naval Conf'erence{1921-2). They remembered that the Senate had initia11y tried to 8Xtend the scope of' the Halibut Treaty(1923) to cover the entire Empire. Even Washington' s acceptance of a Canadian minis ter in 1927

1 Toronto Globe, 10 Jan •• 1935, p. 4: Halifax Chronicle. 11 Jan., 1935. p.8. - 137.

tailed to convince Canadians that the country' s independence vas beyond question. In the "l'm Alone" case the United states ha.d dealt w:Ulingly with Canada. Many Canadians saw this as proot that the United states ha.d tinally acknowledged the tact tbat the Commonwealth had heen decentralized 1 and that Canada must he dealt with as an independent nation. They may have underestimated the State DepartDtent's desire to deal with a smaller and weaker country tban Great Britain. But a precedent does appear to have been established in the "l'm Alone" deliberations. The United States no longer questioned Canada' s right to participate autonomously in international 2 &ttairs.

The increased contact be'tween the two countries, exemplif'ied by the

''l'm Alone" discussions, justif'ied the presence ot a Canadian legation in

Washington. Vincent Massey vas in a position to sound out Ameriean opinion and to transmit it to bis own government tor its immediate consideration.

The C8.na.dian government vas able, at tiret band, to secure the information i t required and so prepare i ts case more thoroughly than i t could otherwise have done.

The "lem Alone" incident, too, taught Canadiens an important lesson.

Conscious ot their increasing autonomy, they w1llingly relinquished the support

they might expect trom Great Britain. At the same tille, the "l'm Alone" dispute ha.d made i t clear to Canadians that they could expect f'ev concessions trom

Washington. They knew that the government would have to act f'irmly in

1 John E. Read, Persona! Interview.

2 Ibid. 1)8.

negotiations vith the United States if' the country's po1it1ca1 an:i economic interests vere to be protected. CHAPTER VI

"THE PEOPLE ARE THE HAST ERS "

During the ten months following the ''l'm Alone" incident Mackenzie

King abandoned his policy of ambivalence. For nine years he had enacted

measures which helped the United States enforce the Volstead Act but

which fell far short of complete cooperation. In this way, he had satisfied

the divergent Canadian points of view. Now, reassessing the public attitude,

the Prime Hinister felt that it would be to his political advanta~e to

chan~e Canada's policy. In March 1930 he introduced a bill in the House

of Commons prohibiting the export of liquor to the United States.

By Hay 1929 the export of liquor had become a potentially explosive

political issue. The country was greatly a~itated and telegrams and letters

from the protagonists of each point of view poured into Ottawa. Hackenzie

King, who was extr.-nely sensitive to pressure, was being "harassed" by l both sides.

In Eay the Revenue Ninister, W.D. Euler, a strong onponent of cooperation,

aqain defended the Government' s stand. He pointed out that the expert of liquor

from Canada to the United States was, despite the American law, perfectly

lef?:a1. He stressed the view that it would cost Canada more than .31,000,000

annually to enforce legislation prohibiti~ liquor exnorts and he felt that

l R.ecords, File ~·~o. 711.429/234, Hayer to Stimson, 21 Harch, 192<;' •. 140. this was too heavy a financial burden for Canada to undertake. Euler noted '. that many of the vessels engaged in the rum trade were of American registry and many of the people involved vere American citizens. In making this claim, he underestimated the number o:f Canadians participating in "rum-running." There were over one hundred Canadian vessels actively engaged in smuggling liquor into the United States, representing well over balf of the total number o:f 1 :foreign vessels involved. Yet it vas unquestionably true that Many Americans 2 were helping to vio1ate their own nation's 1aws. The United States was not enforcing legis1ation which stipulated that al1 vessels sailing for foreign ports had to receive of:ficial clearances. It was a simple matter for sma1l vessels to cross into Canada and return vith smugg1ed 1iquor. Often liquor was de1ivered to Americans within Canada and the American citi~en smuggled it across the border. Euler's contention that only ~ to ~ of the total amount of liquor consumed in the United States came from Canada was probably an underestimate; but it vas certainly trme that Canada's liquor export policy vas not the sole reason :for the failure of the ifo1stead Act. When

Fiorello La Guardia, the American Congressman from New York, could ask how the United states could bave Nthe effrontery to ask a foreign government ••• te . 3 4 en:force our 1aws for us," there seemed ample justification for Euler's stand.

1 Governor General's Numbered Files(P.A.C.), Vol. 6(b), Note from British government te Governor General, 9 Nov., 1926.

2 Border Cities Star, 8 April, 1922. p. 1.

Proceedings and Debates of the Seventy-Pirst Congress, lst Session, 29 May. 1929. pp. 2175-6; 3 June, 1929, pp. 2251-58.

4 Debates, 21 May, 1929, p. 2705. 141.

Euler seemed firm in bis conviction that "the Government ••• has perhaps l gone far enough" ta help the United states. Yet he could not, in view of the growing support for cooperation, categorically reject further assistance. In

,Iln effort ta appease those Canadians who, he knew, would be alarmed by bis speech, he stated: "The door is not closed. The Government is always prepared 2 to give further consideration as developments May jus tify it. M But if Euler left the door open as a deliberate effort to appease the

Canadians who favoured cooperation he failed in bis purpose. The Conference of 1929 had resulted in considerable criticism of the government; but many Canadians vere prepared ta give King one last chance to alter his course.

His offer to the United states officials that they station their own prohibition agents on Canadian soil was a concession he might have paraded before the proponents of cooperation. The United states rejection of this offer deprived him of the opportunity. Euler's speech indicated that the policy of vacillation would be preserved and King now faced a bitter attack on the government.

The rural areas were no longer willing to accept the government's procrastination. Alberta and ~itoba had effectively cut off the export of liquor to the United states and they viewed with repugnance the "rum-running" and bootlegging taking place in other provinces. Moreover, there w&s still considerable liquor flowing east to Ontario and west to British Columbia and finally reaching the United States market. Friends of the Prime fo'.inister warned him that the Liberal party was in danger of losing electoral support

l Debates, 21 May. 1929. p. 2705.

2 Ibid. 142. 1 if the policy were not changed. Mackenzie King was still trying to 2 consolidate his strength in the West and he had just transferred control over natural resources ta the Western provinces as a major step towards 3 this consolidation. The LiberaIs had developed an excellent working arrangement w.tth the Progressives in Manitoba, and in Alberta, where the United Farmers of Alberta constituted a significant political force, federally and provincially, King was making substantial progress towards 4 an accommodation. In Many ridings in both of these provinces the Liberals and the farmer parties had agreed not ta oppose each other. King was vitially interested in the preservation of these alliances. Failure to prohibit liquor clearances might not only cost the LiberaIs their traditional support but might also drive a wedge between the Liberal party and its Progressive allies. Prohibitionists reacted bitterly to Euler's speech. While prohibition was not a burning issue, either federally or provincially, there were still Many "dry" sympathizers in Canada whose vote might depend upon the government's liquor export policy. The Essex County Prohibition Union sent King a letter stating that it was "not impressed by the elaborate excuses offered by the 5 government in defence of its position" and the protest could not be 1,.gnored.

l Mackenzie King Papers(P.A.C.), Vol. 166, J.W. Lawrason to King, 12 July, 1929. See King to Bruce MacBean,' 3 July, 1929.

2 Neatby, pp. 289ff.

3 Ibid.

4 Ibid., p. 337. 5 Border Cities Star, 26 June, 1929, p. 2. l Woodsworth and Rowell continued their criticism of the government. 2 Protestant ministers preached from their pulpits against the trade.

Canadian women, a vital source of support in elections, were strong prohibitionists and in Agnes MacPhail, the O.F,O. M.P. for Southeast 3 Grey, they had found an effective spokesan. If the liquor trade continued to receive the formidable adverse publicity being directed against it, the result might be the alienation of the "dry" sympathizers in Canada. The government had previously satisfied aIl of these groups vith half-hearted measures. It could do so no longer. Nor could King ignore the pressure from the press. Liberal newspapers 4" 5 6 such as the Manitoba Free Press, the Ottawa Citizen, and the Toronto Star, declared that it was not enough to let the Onited States enforce its own laws. Mackenzie King knew that these newspapers would support his bid for re-election, regard1ess of his liquor export po1icy. Yet he could not afford to have such powerful Liberal papers constantlY criticizing his stand on an important national

1 Debates, 21 May, 1929, pp. 2688-9.

2 Records, File No. 811.114Canada/3933, Consul at Sherbrooke to Kellogg, 27 Feb., 1928. 3 " Debates, 21 May, 1929, pp. 2691ff. 4 Manitoba Free Press, 25 May, 1929, p. 13.

5 ottawa Citizen, 23 May, 1929, p. 30. 6 Toronto star, 29 May, 1929, p. 6. 144.

1 issue. Since a large segment or the Conservative press also supported 2 cooperation, it would mean that immediately preceding an election the majority or the press would be in agreement on the liquor export question. Every major city had at least one daily supporting cooperation and already the press had played a significant role in creating the considerable public support for a ban on clearances. Only if liquor exports were prohibited would ita criticism of the government cease.

There were many Canadians who bad been alarmed by the immorality involved in the liquor trade but who had hesitated to support a ban on clearances because of their resentment towards the high American tariff. Although President Hoover had indicated tbat there would be an increase in the United states tariff, many Canadians felt that a change in the Canadian 3 liquor policy would bring about a reciproca1 concession from Washington. They !elt that a secret agreement had been reached and that after Canada had 4 banned clearances the United states would announce a lowering of its tariff. The belie! that a reciprocal concession would come from Washington persuaded

them to support cooperation, despite their d1s~pproval of the existing American tariff policy.

1 Toronto Globe, 23 May, 1929, p. 4.

2 Halifax Harald, 23 May, 1929, p. 6; Montreal star,. 22 May, p. 10; Vancouver Province, 22 May, 1929.

3 See testimony of C.M. Young(qesearch Assistant for the National Commission on Lav Enforcement), National Commission on Law Observance and Enforcement, National Archives, Washington, D.C.

4 See Infra, pp. 171-178. 145.

A similar consideration was affecting Mackenzie King's attitude. Relations with the United States were strained, particularly over tariff matters. King desperately wanted the United States to lower its tariff, knowing the political dangers of fighting an election on such an issue. The prohibition of liquor exports was a means of displaying Canadian friendship for its neighbour. King hoped that this gesture might influence Congress to change its tariff policy.

In fact, there were reports from Washington which indicated that the American l government might be willing to deal more fairly with Canada. The Prime

Hinister knew that some Canadians would object to a change .in Canadian policy without the guarantee of a tangible return. But the banning of liquor clearances

was a gamble King felt increasingly necessary and one which, given the favourable

balance of public opinion, he could afford to take.

King was finding the political pressure for a new policy difficult to 2 resist. The rural areas were absolutely vital to his party's re-election. :3 In the 'Haritimes" many people had "sharply criticized" the goverrment' s stand.

~lackenzie King knew that there would be stiff opposition to cooperation in

Ontario; but he hoped for reciproca1 concessions from the United States which

wou1d satisfy those concerned over the economic 10s8 to Canada. At the saroe time,

a. ban on clearances would satisfy the "moralists" in the province who, to some 4 observers, represented the majority of the e1ectorate. Strong opposition to a

1 Border Cities Star, 27 July, 1929, p. 1.

2 Records, File No. ~11.114Canada/4233, Le~ation to Stimson, 16 Au~st, 1929.

3 rtecords, File ~io.311.1l4Liquor/.54, Consul at Halifax to Stimson, 25 Sept., 1929.

4 :tecorès, File ~;o. ~11.114Car.aàa/3517, Consul at Sarnia to Stil'!!son, 9 !'~ay, 1(;29. 146.

restrietion of e1earanees would eome from Quebee. But the eontinuing opposition of the province tawards the Conservatives, intensified by its eonscription po1ieies, convinced King that the Liberal party's 60 seats were safe. The

Liberal press-the Manitoba Free Press, the Toronto star, the Toronto Globe and the ottawa Citizen-would all approve a measure to forbid clearances. The

Liberal leader believed that throughout Canada "the sentiment of the better l elasses of people" was "all in favour of refusing elearanees. Il Considering aIl of the factors involved King deeided that a ehange in po1iey was a wise po1itical move.

In July 1929 the first real breach appeared in the Canadian wall. On

July 17 William Ph1ll1ps, the American Minister to Ottawa, informed the state Department that King had told him, confidentially, that he was "considering a change in the attitude of the Canadian government regarding the export of .2 liquor." A week later a member of the legation at ottawa wrote that Skelton had informed him that if the United States refused elearanees ta all vessels under five tons the Canadian government "would go a very long way ta meet :3 any reasonable requests." King wanted proof that the United States was w1l1ing ta accopt responsibility for the prevention of liquor smuggling, sinee

even those Canadians who supported total cooperation made clear their view that

i t vas "not Canada" who vas "making a farce out of Proh:ibition in the United 4 States ••• It

l King, ~, 15 July, 1929, eited in Neatby, p. 288.

2 Reeords, Fi.le No. 81l.ll4Canada/42:3:3, Ph1ll1ps to Stimson, 17 July, 1929.

:3 Ibid •• File No. 8ll.114Canada/4220, Legation ta Stimson, 26 July, 1929.

4 Vancouver Province, 22 May, 1929. See Toronto Globe, 7 Jan., 1929. p. 4. 147.

With the prospects of greater Canadian cooperation the United states unàertook an intensive campaign designed to end liquor smuggling on i ts side of the border. The Detroit-Windsor area, where an estimated 9CY,t of the 1 American border officials vere considered corrupt, was the focal point of

United states entorcement. The corrupt officers vere rooted out in a determined and conscientious effort to make certain that as little liquor 2 as possible crossed the border. The United states also tightened control in the Niagara Falls-Buffalo region. A specially constituted Grand Jury at

Buffalo had, in December 1928, served indictments against Canadians conspiring to vi.olate the Volstead Act. These Canadians included employees of such distillers as Gooderham and Worts and bravers such as Taylor and Bate, who 3 smuggled liquor into the United states for their firms. OfficiaIs of certain 4 rai1way, telegraph and telephone companies would also be charged. No proceedings were taken in the regular Canadian extradition courts, since Canadians had

a1ready rejected an extradition treaty covering liquor offences. But the

American government persisted in its efforts to apprehend and prose~ute

employees of Canadian liquor companies caught in the United States. In May

1 Border Cities star, 2l Jan., 1929, p. 1.

2 New Republic, 20 May, 1929, pp. 28-29. See Herbert E. Morgan, "Sveeping Changes in Dry Law Entorcement," Current Bistory, Vol. XXVIIL(Sept. ,1928), pp. 910-913.

3 Toronto star, 5 Dec., 1928, pp. 1 and 18.

4 Xbid. 148.

1929 President Hoover had estab1ished the Wickersham Commission, to investigate 1 the state of prohibition in the United states. The Commission's duties would inc1ude exam1ning means of tightening the American border against Canadian 1iquor smugg1ers. Prior to this intensive "c1ean-up" programme the Canadian government fe1t that the United states was 1ess than sincere in its entorcement of its 1iquor 1aws. Now, however, the Prime Minister could justifiab1y c1aim that American prohibition officiaIs were making "concerted and continuous" 2 efforts to keep Canadian 1iquor rrom entering their territory. In August the Cabinet met in ottawa. Among other matters discussed was the ques tion or 1iquor clearances. The Revenue Minister, Euler, was in_ Europe wh11e this meeting was he1d and was not present to deiend his position. King chose this as an opportune time to indicate to the Cabinet that a change in 3 Canada's 1iquor export po1icy should be considered. Fo11ow1ng the meeting King to1d the press that since the United States was now "pu11ing its own 4 weight~ the government was considering iurther cooperation. In October, the

Prime M1n1ster advised the press that the Justice Department had informed h1m

1 The ColIIII'Iission was headed by George W. Wickersham, Attorney General under President Tart.

2 Mackenzie King Papers(P.A.C.), Vol. 166, King to Charge d'arraires, United states Legation, Ottawa, August, 1929. 3 Records, File No. 81l.1l4Canada/4233, Legation to Stimson, 16 August, 1929. 4 Border Cities Star, 8 August, 1929, p. 8. 149.

1 that Par1iament alone cou1d prohibit 1iquor exports to the United States.

When asked if he would introduce the necessary 1egis1ation King rep1ied 2 that they would "have to va1.t for the speech from the throne." Privat.e1y, however, he to1d the .AlDerican 1d.n1.ster that he would introduce the 3 1egis1ation required. On1y the ultimate measure would "stem the tide 4 of criticism" which had been rising since Euler's May speech.

As rumours circUlated tbat King was going to introduce the "necessary

1egis1ation" those ~o opposed the move voiced their strong objection. The powerful disti1ling and breving industries lad the fight against the bi1l.

In the five-year period sinee the "Anti-Smugg1ing Treaty," $100,000,000 of 5 Canadian 1iquor had tlowad across the border. Seventeen disti1leries 6 had been bu1lt since 1922 briDging the total to 27. These plants, eight in Montreal, one each in Sorel and st. Hyacinthe, three in Toronto, one in

Kitchener, Welland, Windsor. Niagara Fa1ls, Prescott, Winnipeg and Transcona, two in st. Boniface, one in Cal.gary. New Westminster and Point Grey, and

1 Toronto star, 2 Oct., 1929. p. 1. (Mackenzie King gave no reason for enquiring whether or not par~tar,y 1eg1s1ation vas necessar,y to ban clearances. Perhaps, hovever, he wished to Act by Order-in-Council, and thereby avoid an ex"tended par1iamentary debate.)

2 Ibid. 3 Records, File No. 8l1.114Liquor/67, Ph111ips to Stimson, 23 Oct., 1929.

4 Border Cities Star, 2 Oct., 1929, p. 1.

5 Montreal Gazette, 5 Jan •• 1929. pp. 1-2. 6 Debates, 14 March, 1930, p. 416. 150.

1 two in Vancouver,had a great deal invested in the trade and a bill which would prohibit 1iquor clearances would adverse1y affect a very lucrative 2 business.

Many labour groups also reacted negative1y to King's measure. Labour unions spoke out against the "unfriend1y American tariff" and wondered whether, 3 in the face of this tariff, a Canadian gesture of friendliness was justified. 4 The Montreal Trades and Labour Councll passed a reso1ution condemning the bill.·

The labour unions pointed out that a reduction in the manufacture of 1iquor would 1ead to unemp10yment in the railway, 1ithographing, bott1.ing and shipping 5 industries and there were a1ready 200,000 Canadians unemp1oyed. They accused

the Liberal government, perhaps with justification, of introducing the bill "at

the demand of Mr. Dafoe of the Manitoba Free Press, Mr. Jaffrey of the Toronto 6 Globe and Mr. Atkinson of the Toronto Star, ft as a move designed to ensure their

1 . Manitoba Free Press, 25 March, 1930, pp. 1-2.

2 Vancouver Sun, 6 March, 1930, p. 6; Financial T1mes(Montrea1), 7 March, 1930, p. 1. -

:3 Debates, 24 March, 1930, p. 898.

4 Records, File No. 811.114canada/4300, Consul at Montreal to Stimson, 8 March, 1930. 5 ottawa Cit1~en, 14 August, 1930, p. 16. 6 Debates, 24 March, 1930, p. 898. 151.

l support in the coming election. Unions would exert aIl the influence they could to prevent the passage of tbis law. The dist1lling and brewing industries and the labour organizations exerted considerable pressure on their M.P.'s and some of these M.P.'s became concerned about the bill's political implications. Late in Januar,y 1920 Mitchell Hepburn, the Liberal M.P. for Elgin West, a riding in which some of the better smuggling routes vere located, stated that he was convinced that the "Prime Minister is maldng a serious m:istake ••• I have yet to find anyone 2 in tbis riding in sympatQy with such a Move." Other Liberal M.P.'s, also representing constituencies where liquor interests vere heav1ly entrenched, 3 objected to the change. Support for a new policy was not unanimous in

Ontario. Despite the reservations of some of bis own M.P.'s and the pressure exerted upon h1m by the dist1l1ing and brew1ng firms, King felt that the bill vas necessary. As he entered the first Liberal caucus of the session he had the confidence of a seasoned and successful politician in the validity of bis 4 judgment. His position in the Liberal party was nov secure. He vas convinced

l On March 24, 1930 the Manitoba Free Press denied that it had threatened King if he did not change Canada's policy.

2 Neil McKent,y, Mitëh Hepburn(Toronto, 1967), p. 27. 3 Ibid.

4 Neatby has written: "When Mackenzie King gave priority to Any measure he usually had his vay. When it seemed necessary, he could dominate the Liberal party." (p. 315). 152.

of the practicality of his cause. His success could not be doubted. As one journalist wrote: "Not since Peter the Hermit was at his best has a preacher 1 made more converts." On March 4, 1930 King introduced in the Commons the bUl to forbid liquor clearances tothe United states. Two weeks later, before packed public galleries, the de'bate began. Mackenzie King explained why he now presented the measure before the House: Ali domestic business, whether it relates to intoxicating liquor or anything else, is subject to great national considerations that are of paramount concern and also necessarily subject to great international considerations that in their importance are or world concerne Any business, no matter what it may be, ir so conducted that it involves violations of the laws or another country, must to the extent that this May be the case bow to the superior, 2 paramount consideration or the national interests as a whole. King knew that he would be criticized for suddenly changing his mind on the liquor export question and made every erfort in his speech to counter these criticisms. He warned that the situation Along the border had greatly deteriorated in recent months as a result or the activities of the "rum-runners" and bootleggers. He stressed the view that Americans were now doing their best to enforce the Volstead Act. He argued that the profits inv01ved in the trade did not justify the means used to obtain them. And, Most importantly, he emphasized that the legislation was not a "made in Washington policy." It was being introduced at the dictation of the Canadian people and not or the United States. So strongly did King reel about the need for a revision in policy

1 Lou Skuce, "An Election in July," Maclean' s Magazine, Vol. XLIII (15 April, 1930), p. 1.

2 Debates, 14 Y~rch, 1930, p. 612. that he could "no longer assume responsibility in the matter of' external l af'f'airs" if' Parliament or the people f'ailed to support his stam.

The Conservative leader, R.B. Bennett, a teetotaler, supported the

bill. Bennett had been a member of' the Parllamentary C omm.i ttee which had

recommemed the refusal of' clearances am he could hardly vote against a

report which he had helped to prepare. Moreover, in Ha nitoba, Alberta and

Saskatchewan the Conservatives were desperately trying to develop some measure

of' strength. Bennett knew that anything less than complete support f'or King' s

bill would prejudice his party' s chances of' making any breakthrough in the

Prairies,where he now stood as the solitary Conservative M.P. Nevertheless,

Bennett did not bind theo-party to his personal decision. In Ontario the

Conservatives held .51 of the seats, many of' them located in areas in which

there were distilling and brewing f'irms. Many Conservatives in Ontario

genuinely believed that their voters desired Canada, on moral grounds, to

cooperate with the United States. Others f'elt uncomfortable about voting

against the economic interests of' their electorate. By permitting his party

a t'ree vote he allowed Conservative H.P. • s who opposed the bill to vote

.- against it.

Havj.ng announced his personal support of' the measure, Bennett launched

into a vehement attack on the Prime Minister's speech. He castigated the

Liberal government f'or i ts f'ailure to carry out the recommeu:ia tions of' the

Parliamentary Committee am the Royal Commission. He remimed the Prime

Minister of' the period when communications between Ottawa am Washington had

l Debates, 14 March, 1930, p. 612.

-r - '0 154.

broken down and asked h1m sarcastical1y about the "imminent peril which conf'ronted us" during this period. Bennett accepted the princip1e of the bill' but he wu n'Ot prepared to adm:1 t that this 1egis1ation was necessary 1 in order to "save Canada from a war with our good friends to the south."

The opposition 1eader's accusations were unquestionab1y valide Had King be1ieved that relations betNeen Canada and the United states were critically endangered b,y Canada's 1iquor export policy he coUld have introduced the 2 bill DIIlch earlJier than 1930. Moreover, for ten years the Canadian government had over1ooked the immoralityof the "means" used to reap the profits from the 1iquor trade and Bennett could just1fiably scoff at King's nevly­ acqu1red moral sensitiv1ty. Bennett m:1ght not have acted differently had he faced the political pressure exerted on King. Lacking the responsibility of office he coUld speak easily about "Canada's obligations which cannot 3 be 1ightly undertaken." Nonethe1ess, his criticism of King's protracted period of vacillation vas not unreasonab1e.

The Prime Minister may not have been able to convince the opposition that "imllinent peril" demanded the passage of the bill but his political astuteness vas, as the debate continued, c1ear1y revealed. Throughout the

1920's the Consel"fttive party encouraged King to adopt a "hard 1ine" attitude

1 Debates, 14 March, 1930, p. 612.

2 Detroit Free Press, 17 March, 1930, p. 6. 3 Debates, 14 March, 1930, p. 620. 155.

:in d1.p1omatic deal:1ngs w1.th the United states. Conservative M.P. 's urged l King to .et the United states tariff "reso1utely and courageously." They comp1a1ned that the government permitted the export of Canadian raw materials to the United states and then 1evied a duty on them when they returned as 2 manutactured products. They failed to see ~ justification for the Liberal 1011' tarlf'f po1icy, which enab1ed the Michigan farmers to feec1 the people of wandsor, depriving the farmers living in Essex County of their natural market.

Many Conservatives voiced their approval of the liquor export bill but objected to the fact that Canada was receiv1ng nothing in return. As soon as

this objection was raised, King countered w1.th the news of plans for a complete 4 revi.s1.on of the "Anti-Smugg1ing Treaty." The revis ion of the treaty would not

af'tect the 1iquor 1egislation. Nor did King state spec1fically what the treaty vould cover. But he had managed to silence those Conservatives who criticized

h1.. tor making a completely one-sided commitment to the United states. C.B. Cahan and R.J. Manion, the Conservative M.P. for Ft. William, attacked both the bill and the Prime Minister. They claimed that King's measure

1 Debates, Il March, 1929, p. 843. 2 Ibid., 4 April, 1929, p. 1273.

3 ~., p. 1285. 4 Ib1.d., 24 March, 1930, p. 894. 156.

~ '0 p' was a "don't provoke Washington" policy, designed to make certain that

Canada did not antagonize i ts powerful neighbour. Mani on , s and Cahan' s

criticism was not ent1.rely unjustified. King's desire to avoid a tariff war with the United states undoubtedly inf'luenced bis decision. But

appeasing Washington was not, as Manion and Cahan implied, the principal

reason for the new Canadian policy. Many of King's own tollowers, as well as

a substantial number of other Canadians, tavoured a ban on liquor clearances

and King argued correctly that the policy was dictated by Canadian and not

American interests. Without tbis considerable Canadian support the change

in policy would probably have been rejected.

Opposition on political, economic and moral grounds developed trom other

M.P.'s. C.G. Power (Quebec South) objected to having bis "conscience intluenced 2 by persons trom a toreign country." Henri Bourassa (Labelle) believed that

the cost of enforcing the lav would be tar too great to justity it. He felt

that i t vas not Canada·: duty to raise the level of morality in the United 3 States and that l1quor would get across the border aven with the bill. Fina11y,

S.C. Robinson, the Conservative M.P. for Essex West, a district in which the

liquor interests vere very prominent, warned that the measure would "cause 4 great injury to Canadian industry and vorking men." The tariff had already hurt

1 Debates, 14 March, 1930, p. 612.

2 Ibid. , 14 March, 1930, pp. 635-9.

3 Ibid. , 24 March, 1930, pp. 884-886.

4 Ibid. , p. 898. -,

157.

Canada' s economy and Robinson fel t that i t was unfair to cripp1e Canadian 1 industry even· further. These M.P. '5 saw 10gic in the efforts of the United states government to en1ist its own officers to entorce the Vo1stead Act.

They saw none in the demands of a foreign state upon a country for whose interests it seemed to care 50 little.

Despite th1s opposition and the doubts of other M.P.'s, "An Act to 2 Amend the Export Act" passed the House on March 25 by a v.:>te of 173-11. . 3 The support for King' s measure was substantial. Euler and Repburn voted for the prohibition of clearances. Many Conservatives supported their 1eader's calI for a ban on liquor exports across the border. Despite the presence of distil1ing or brew1ng firms in st. Boniface, st. Hyacinthe, New We~tm1nister and London, the M.P. 's in these regions voted for the bill. The strong stands for cooperation taken by King and Bennett must have inf1uenced some M.P.'s to favour the b111. However, the vote indicated that the majority of M.P.'s genuine1y believed that their constituants desired a change in Canada's 1iquor export po1icy.

1 Debates, 24 March, 1930, p. 898.

2 The members who voted against the b111 were C.W. Be11(Lib.-HamUton West); Henri Bourassa(Ind.); C.R. Cahan; J.F. Harris (Cons.-Toronto-Scarborough); A.A. Heaps(Labour-North Winnipeg); Dr. L.W. Johnstone(Lib.-Cape Breton-North Victoria); :t. J. Manion; M. J. Maloney( Cons. -Rentrew South); R. R. MacGregor (Ind • Cons. -South York); C.G. Power; S.C. Robinson(Cons.). 3 Euler stateda "WhUe l still be1ieve that there will be great difficu1ties in carry1ng out the terms of the bill, l v1ll say frankly that if there are other considerations-and l am not saying that l express any Adherence to these considerations-if there are other considerations of national imoort&nce which outveigh the objections which l raised last year, then sure1y r" am justified ••• in yie1ding to the will ot parliaDlent." Debates, 25 March, 1930, pp. 930-1. 158.

The passage ot the bill was not une:xpected. The overwhelming majority, however,"was surprising. There had. been considerable opposition to cooperation and the 11 M.P. 's who voted against the bill seemed hardly to ref'lect the strength ot that opposition. Moreover, a tew days betore the third reading ot the bill, the United states Senate completed its revision ot the taritt, providing tor sharp increases. Canadian products, such as field crops, dairy goods, livestock, lumber and copper were af"fected by the increase.

Obligations in New York had to be repaid and the cutting off of the American market impaired Canada' s ability to raise the sums required. It would have seemed that these circumstances would have been ref'lected in a larger vote against the excise Act amendment.

The voting pattern in the Bouse may explain this apparent contradiction. l Only 6fY1; of the Conservative M.P. 's actually voted for the measure. The remainder were all out of the Bouse at the time of the vote. In Ontario,

just 28 out of 53 M.P. 's voted for Ki.ng's bill. In metropolitan Toronto, where

there were 8 breweries and 3 distilleries, 4 of the 8 Conservative M. P. 's were

absent when the vote was held. In Nova Scotia, the M.P. 's :tl'om Antigonish­

Guysborough, Digby-Annapolis, Colchester and Pictou vere not present for the

vote. There is no suggestion here that aIl the Conservatives who failed to vote

were opposed to a ban on liquor clearances. Undoubtedly, however, a good many

felt that their support of the bUl woUl.d meet vith opposition in their ridings.

Bennett had not bound bis party to bis own personal decision but Conservative

M. P. 's vere s til1 re1uctant to vote against a measure their leader supported. Wi th

l Hopkins, Canadian Armual qeview, 1926, pp. 48-51; Debates, 25 March, 1930, p. 932. 159.

an election imminent the part,y could not afford to be openly split on the issue. A wise course of action vas to abstain.

Many Liberals who represented constituencies in which there were liquor firms or which were close to the American border, were also absent

from the voting. In Ontario the M.Pe 's froM Essex East, Huron-North, Prescott,

Lambton West, Pèrth North, Bruce South and Kent ail abstained. Twenty-two

Liberals in Quebec were absent, including the JIlembers froM Beauharnois, Brome-

Missisquoi, Portneuf, Quebec-Mon'bnorency, Kamouraska and Beauce. It appears

that in the Liberal party as weIl a number of M.P.·s opposed the measure but

did not wish to vote against their leader.

Nevertheless, the political astuteness of King's move could hardly be

questioned. Anti-Americanism or the presence of distilling or brewing firms··

caused only a miniscule m1nority of M.P. 's to vote against the measure. Those

who abstained could not have changed the final result. Prairie and rural members

were virtually unanimous in their support of the bill. Almost &lI ot the M. P • ' s

in British Columbia voted for the measure, refiecting their constituents' &larM

at the activities of the "rum-runners" and bootleggers. Two-thirds of Quebec's

M.P. '5 supported King, indicating an absence of determined opposition even in

tbat province. Well over half the H.P.'s in Ontario expressed their des ire

to see the end of liquor clearances.

King had also satistied the Liberal press. The Regina HorDing Leader

congratulated him tor the "courage and vigor" he had shawn in dealing with the l 2 problem. other Liberal papers spoke in sim11ar terms. The preceding nine

1 .Re~ Morn1ng Leader, 26 March, 1930, p. 15.

2 Toronto Star, 17 March, 1930, p. 6; 5 ~.arch, p. 8; 9 March, p. 8; ottawa Citizen, 17 March, 19:30, p. 24. 160.

years of vacillation were suddenly ignored. Liberal supporters no longer read in their newspapers about the "lame" attitude of the govermnent.

On May 30. 1930 the Dew Canadian policy went formally into effect.

Many Canadians supported i t because they believedr profoUDily that Canada was obligated to help a friemly neighbour struggling to solve a difficult internaI problem. ether Canadians felt that reciprocal concessions would be granted by the United States to compensate them for the considerable sacrifice

Canada would be making. Still others supported a ban on clearances because they felt that "rum-running" am bootlegging were ilmnoral activities which were eating awayat the integrity not only of the United States but of Canada as weIl. Mackenzie King had recognized the mood of the majority of the

Canadian electorate am had respomed to it...... """""" ...... -- -._~ ---- - ~. ~ INDEX 'MAP-ONTARIO

. ~ ...... vars ON 1930 EXCISE Aar AMBNIIŒIIT l-Alsoma Eut ..IAbèrAl-A'-tdnecI ·. 2-Alsoma Weil. Liberal-~~. . . . . J :', 3-Brant ••..•• ô ••••••••••••••••••• ....Braatfocd ••••••..... - . 6-Bruce North Liberal-Y" i &-Oruce Soutb. L1beral:-:~~~; 7-<:arleton ...... 8--Dufferla...... e--Dundu...... '" lO-Durh...... Cons.rvat.1~~.-:~I!~ ... . 11-EI&in Eut ...... 12-m.aJ:xW~~tL!-,-ral-Abeia1ntpd . 13-io"".ex W•• tlConaervat.1ve-Ho·· LAIlB 1.... 1!.UëX ~tII lAberal-Y.s; ... '.' .. . . , 16-Fort WiIlIuD aDd RalDv Rlver•. COns.~~ve-No j I&-Frontenac; ConaerYa~~~~ed 1 or._ .... 17-Glens.rry and StonDoat ..... : . . . . - F01'*)sa Springs ~ 18--Grenvllle...... ·...... -; ti· l ~ \ J le--Grey Nortb...... · - . 51.. _'s Spring Bank • 6. . 10 2O-GreySoutheut, U.F.O_~-:~~~;' Brnery(Gu.1ph, 76); - --. co.-- ~ ~~~ L:p- $~"'§; 21-H.ldlmand ....•.... '.' ...... 1 .'. J 22-H.lton ...... Liberal-Y.s 23-R.milton Eut. Conservatift-Y.s 1 _ : London i ' . 2t--H.mllton Wat Cons.rvat.1ft-!o . Labat.t~ JOiiil;" Ltd'·i 5O-Parry Sound .... '.' ...... 26-H.. tlnp Eut ...... , ...... Carling Brever1es 51~Peel...... 2&-H.. tlnpWat .. - .. 1 52-Perth North...... - 27-Huron Nortb .. Liberal-Abllta1ned , 53-Perth South ...... 28--Huroft South .. ~~~~-=-~~~ ... :.! \ . - 54-Peterborough East ...... 2e--Kent.L1ber6l.~~"'~ .. Sand_ --_.. Co.~- · 55-Peterborougb West:...... 3O-KInp ton ...... Y"beral-Y.S· __ J .•..••..• "',---!CL, f: . 3i 56-Port Arthur and Kenora ...... 31-Lambton Eut ..... :. ai" ...... , . 32 fS, 57--~tt ...... • Liberal-Abstained 32-Lambton Wat ~œ.~ .. ~~~~~ i 1·' - 58--Prinœ Edward. ~!l.s.~_tive-Y.s _. 33-Lan.rlc ...... ~.) 1/ .. LÇJ 59-Renfrew North ...... '.' .. . 3 ....Leed...... f ~-- r 1 y i · 6O-Renfrew South ...... 36-Lennox and A~dln&t~...... '~'CU'.' 29. ~I LAN'B 61--Russell ..... '.' ...... 36-Uncoln Cons.rn:t.1ve-Abllta1ned:; r 13. ir.. Walker. 62--Simcoe East ...... 37-London Cona ...... t.1ve-y.s ~ Bnt.1eh Allerican 1 63-Simcoe North ...... 38--Middl_ I::ut .•...... • t~ 1~ Breving Co •. Toronto 64--Simcoe South ..... : ...... 3e--Mlddl_ Wat...... 1 ~~alkerv1ll. ~. Cope1and Brewing Co. 65-Timiskaming...... Cosgrave Export Co. "o-Mu.tloka...... ~Toronto,Conservative-Abstained NORTHERN PART OF ONTARIO Dominion Brew:lng Ltd. 41-Niplaina. Liber&l-Tes 1•••••••• 67__ TorontoConservative-Abstained 42-Norfollc: ...... Kormanns Beverages : _. __ . 68-TorontoConservative-Ab.st&ined" .. 3-NorthulDberIaDcI._~ns.rv.at.1.. -y.s. O'Keef. ~ver_ges 'L ~oronto-Scarborough' Conservative:"'No . 44- Ontario-ColUlervatift •...... Re1nhardt . Brewery . 7o-Toronto West. ;conservative-l'es Good_erham and Worts 71-Victoria ...... L~beral-Yes 45- -. -Y.sUberal-Yes 1 1 56\ ~I , t-=- _Cana~a Malting Co. .. &-Ottawa .•••.•.. ! ••••••1L1beral-Ablltain -'-t- ;Vi . '12-Waterloo North Liberal-Yes ed 'Canada Sud 'Breweries 47-:-C)ldonl North...... ~.: ..••.... 73-Waterlnn ~.. th Conse~ative-Y"" 48-0.fonl Soutb...... Bwbrelller of Canada 74-Wellan. Conservat.1.. -Abs tained. ï Linclsa,y Distill.ri.s: - - ,e--~ (T~to CIt7) •.. : •.•. ;...... -." ._- 7S-:WellinKton North. ~ \ ...... L.l : ~ 76-Wellmgton South ..~~~~_e~~~~Yes •. P'ort -FranGes BrèW1ng Co~2;r \:: :l c;lr""C 77-.-Wentworth...... : ...... ,I(akaboka F&lb BrTeg . 78--York East ...... , .. . 7e--1I'OÎ'tio NortliConsèrvative-AbstUneé Port Arthur Bnerage,,- - -_. Co.'- · SO-York SoutbCons• rvat.1.. -No - --- 8J~York Wat~~emü';;'~ta1D.rf

.. -- •.• ~.- .. ," ._ ...... _~-.-.-•. -.. _- ----.-•• -.~,~-.~-...... ~.a;:eilO··_- -.;,.-...... ______""""""'-""-"'''''- _____ ----______c. __ ._. ____ •• j .=.>--

INDEX MAP-QUEBEC I;-..~······ n-Z : i \

\, \ \ VOTE ON 1930 EXCIS~ Ar:r AMENDMENT . • . 114-Maskinongé•...... : ...... 82-Argenteuil .. '...... • . • . • . • . .. 115--Matane ...... •. ~ .. '...... , ..... ' 83-Bagot ...... " ...... '.••.. 116-Mêgantic ...... " ...... '20 84-Beauce ... Liberal.-Abstained.. '••••... ll7-Missisquoi. •.. Liberal.-Abstained '" 85--Beauharnois ...... ; ...... •' ..••..•..•. ll8-Montmagny ... ,.LiËeral.-Yes ' 86-Bellechasse...... • • . . .. 119-Nicolet ...... , .... ',' ... '.' .. . 87-Berthier ...... " ...... • '.' . . • • . • . . • ... .. 12o--Pontiac.... '.' ...... 88-Bonaventure. ;...... 121-Portneuf...... 89-Brome .....• Liberal.-Abstained ...... 122-Quebec County ...... •...... •...•..... 9G-Chambly,imd Verchères...... :.. 123-Quebec East...•• Liberal.-Yes ...... 91-Champlain ...... " ...... '124-Quebec South ... Liberal.-ljo...... •. 92-Charlevoix-Montmorency ...... '125:--Quebec West: ... Liberal.-Yes : ...... 32)..-/ 1 n ' w.~ rl;'" ' 93-Chateauguay-Huntingdon L:1be~,~-~~~~in~~ Richelieu ...... '...... ~ •.....•...... t. liiaoint.he Dia . e 1'.[ j'o) • 94-Chicoutimi-Sagupn:w , ...... ~'...... 127-Richmond and Wolfe ...... "",'\J 95--Compton ...... Liberal.-Yes ...... , 128-Rimouski ...... , ...... 89 9 '. ! . 96-Dorchester •.... ~b~ral.-Yes ...... 129-St. Ann (Montreal) ..•. Lib al. Abat ined :~!..~. .._" .~ _.. -.-f '. 97-'-Drummond. and Arthabaska...... 13O--St. Ant?ine (Montreal). Libe~al.:Yes a . "~ 98-Gaspé ...... 131-St. Dems (Montreal) .. . Liberal.-Abstained I9-George-Etienne Cartier (MontreaJ) .....•.... 132-St. Hyacinthe-Rouville. Liberal.-Yes lOO-Hochelaga (Montreal) Liberal.~~es ..... 133-St. James (Montreal) ... Liberal.-Yes MONTREAL. lOI-Hull ...... '.. " .. " ...... 134-St. Johns and.lbervi!le ... ~iberal.-~S " cLiberal.-Aba~ed 102-]acques Cartier (Montreal Island) ...... 135-St. Lawrence-St. George_ ~mse~~ .v~-No I03-Joliette ...... 136-St. Mary (Montreal) ... Liberal.-Yea .. . \. . l04-Kamouras~a. Lipe~al.-Abatained ..... 137-Shefford ...... ; ...... ::~ ...... ~ Canada Malting Co. . I05-Labelle ....J?,c;t~P~.~C!~~~:-~~ ...... 13S-Sherbrooke.•.. Libe al. v ...... Canada Dist111eries '\\3 ~~ I06-La " d ..' d r -.Les . - . pl'alne an NaplervllleLiberal.-Abstained9-Stanstea ...... _.--:-::;.. A .... _~_ • ..:. d' .... . 1Montreal Produota Libera1-. bSta1ned I07-L'Assom. P t'lon- MI"ontca m...... '14n---'TL.,- "m.scouata.. . Liber&.L-_~ .. e . ... . lMe10hers Distiller" '" ._ ._IO~Launer-Outremont (Montreal Istanc;l) •.... 141-Terrebonne...... ;. iFederal Distiller" . I09-Laval-Two Mountains. L1beral.-Yes '142-Three Rivera and St. Maurice ...... D1st1ïierà' CorPorat1on' 11O--Uvis.:...... 143-Vaudreuil-SOulanges ...... 'Nat.1oniil."'DlaÏ1l1er1e.-.r. j44 Ill-L'blet .••.. .J;4.~r.~'7~!!' ...... : ...... 144-Westmount-St. Henry (Monue",1 hLiberal.-Yes. Front.en&o ~1.. ! 112-Lotbinière.; ...... 145--Wright ...... : .... . Molson'. Brev.r,y i- 113-MailOnneuve(Montreallsland)., ...... 14s-:-Vamaska ...... : .. .' ...... ~a.t.1onal Breweries ~.J L~beral.-Yes ' ._._-.--_.~~-.- ~, ~_'::::-==-_~___ -':;.""_'_''':;'''' __ ''=-_''' __ ~ __--' __ ~''___ .• • _'. 3bA INDEX MAP~BRITlSH' COL.UMBIA , "

VOTB al 1930 ElCISE 1 Aar AMBNDŒNT 186-Burrard...... , .. , .. 187-C~riboo...... •... 1 ••••••• 188-Comox-Albeml., ~beràl.-Ye. 189-Kootenay Eut.. Liberal-Y.. 1 lUO-Koot~nay West~ ~~.t.1ve-Ye. , 191-Nanumo...... • ' .. ---t-- , 112-New Westminaterl- Ço.J'!l.~.t.1ve-Y.. j 113-5keena ...... , . ~ lN-Vancouver centreUeonservauve-YU 'i lN-Vaneouver South. ~!!,!,&~.... Y~ ,1 '> 18&-Victoria City ..... Conaenat.1ve-Y•• ï. urr-Westmlnater Dlatrict ~ftlerva~"'J."1 l __Vale ...•...... • ~ftII~~""~".

~ ta], LlquOl', eanadlan Or1~tUl.r:Y \ _ \,J::....ol •• ~':!-... 1 r .. . ' ancou-nBrev.lns Co. '97 I/.{P"ob -t. .f1"~: or 'fT t.1l.1erle. , , r7 r7,~~~D18 0' ~ ~.

1 :u N ITt~;o 1 1 :::=Sl1ver spr1Dg Dr.... ·'T ' .! 1 Vlct.or1a-Phoen1X\ .. ,-- ---_ ....8reWOi'J__ .--~ 1 ..• -.....,- •.... ,<._,.-... _,~,--,,,,,,==----- ...... -----~.".---

INDEX MAP-NOVA SCOTIA,

VOTE (Ii 1930 EXCISE ACT AMEHIIŒHT

147-AntiIOllÏlb aad Guyaborouab ..... ConserYaUve-Absta1ned.· 148-Cape BretoD North and Victoria .. ConservaUve-No ' 14D-Cape BretoD South aad Richmond Cons.rvaUve-y•• l5O--Colcheater...... • ...... ' .. o \ 161-Cumberland ...... 162-Diaby and ADnapolie...... --- -I- "" - . ' 1 1-RalU /...... Conserv..... --y •• 16+-.. _._ .m:_...... _~erv.Uve-A.bllta1.Ded 166--lnvem_ . . '...... : ...... I 1l1&-Kin.a ...... Ü ...... • CAIfE BRETON 167-Luoeabul'l ... • ~~. _~~~!f .. " .. . 1158-:-Pic:tou . ••....•.•..•• , '. . . - . . .., , ISLAND lD-Sbeibume aad Qaeeu .. L1bera1-A.bII~ed.· llO-YariDoath aad CIue.LI4.~~~~.~~ 1 •

~531 ~~~ 1 tt • 1 K.ith and Son Brewery J.- . ~",i •.Oland . .. and ,....\ Son Br8V8Z7: .. (j ~P . . o . d

.... (j . ..r Jo Jt.~ jJ Jt.rt

i 1 1 I~DEX MAP-.NEW BRUNSWICK

Q u E B E c

-- 1

. . VOTE (If 1930 EXCISE Am: AMBRIIŒ:fr

181-Charlotte .. ConseZ'Yat1.n-Yes • 182-Gloucellter ...... :::::::::: UNI T E D 183-Keot ...•...... 184-Northumberland...... 186-ReetiJOUdle and Madawaska. Libèru-Abatldned'; UJ6-RoyaI .••.••.•...... ~nseZ'Yat1.ve-Yes 1 . 187-5t. John City 'and Countie, or St. John and .J New Br1maw1ok Breweri.es 18&-~~-rr~=~;d···::::· 8 T A T E t~7 ' (Fa1rY1l1e) lee-WeetlllalelaDd, "'-_ ...... Olaricl's Bl'ewery .. ' .... l'lO-York.saaIlury~~~t1...... Y ...... c..~~1!.. ~~1yl)_

\~ 1·

10" f' . , '., 'Î::' "; . ,~" ..,.' ..; .. ' .'..... --:-. . . -- .,-' .'-' . '~'-:-"~'::-:'-::::"::::':::"''='=--,;::.:,._-:;: .. , > .. - .. ':, : /·ii ... :···· ...... : .... ~ INDEX. MAP7-MANITOBA ., .L .. ! .. :; .\.;'"j.' .. :' .. ' . .".; '." '!. -, l'; .,1 I! ' . ." : .... .~ .. , :, ." '. ..•. f 1 . ..:' ./ .. '/ 1 .". J • l ~ /", . \ . i .... / i '. ,n /" Î j. 1 . . -.' .., , ./ Yom Qi 1930 BXClSE . 1 i .' , '.\ / j ACT AHBNIJMBrrr 1"' ;f . /. .-.. ~ ./ ; . l" 171-nrand~n •... Li~al-Ab8~~j ... '" i l" , 1 172-Llauphm ...••...... •..•.... ~ ...... ',,' . t 173-LiRttar ..... : u.~~J~!.J ...... : ... . CIJ li,.--l\lncdonald ...... '.' .... : ...... : .... . 1 . 175--Marqu('ttè ...... •..• : .. ;: 176--Neepawa...... , ...... 177-.Nelson...... , ...... " ..... '" \ liS-Pol1age la Prairie ...... 179--Provencher... ; Liberal-Y.III 180-Selkirk ...... i:.1 .•. : .... : : : : : : : : . : . iSl-5ouri•...... _.~~=t.II! ...... la-5prinafield •..... : ...... ::-~ .' ~ .. ~ .: ...; •. -i 183-Winnipea Centre,;~Y",I ...... ,. :. . lM-Wiaaipea Nortb,_. ___No,J •.•.•...•• :. n 18&-WiaDl'" South .LL1.~~-.Y~.1I J. : ...... 172 t. . ~.. -,._~ .. _._.., . . St.. BonUa_ - . :::: L1benl-Y.... ' .'. --- trJ ; 182 ~.

Î 1. ~ ; " ! Drewry'lI Brewery 1 .; ;. 175, - .\ Fort Garry Brewery , . o > i Sh.a'lI Winnipeg Brewer,J.. /. Z ! f Pelill1l1er'lI Limited i 1 ~-- R1edle Brewing Ltd. 1 Canada Malting i .. 1 ." 1 .=:.=:-=- 4'-' _:cc: Dom1n1on Halting ~ ~ Co. ! .'71 183 ~NNIP[G~ '(1'!~II~~~~., [:.L'",(. " on) ,. Consol1dated D1st11lerY.H'· i : . - 174 (St.. BonUaoe) J . --! , . lIat.1onal D1st1l1.riell ! '.. ~ 1 . 1 181 (St.. aonuaoe). . ~. "- . _ ...l} :. - ~--f7Tnewel Brewing Co. . -L. . 1 (St.. Bcm1taoe) _...... _ _.. _.. lr-_··_·-I~- Î UNI T' B 0 S' T A T B S - . . (,-,...... -,-,._, '" ... _.. ~ -'- .~ .. ... _----_ . ...-- ._-_._----.... "-- --~ '" - '''.--, "" .. , .•.... _- .---" ... _--~-. __ ._ .. _~~._... ---- -,--- '-- . INDEX MAP--ALBERTA 1

r 222 i 223 . . l .N.., Ect.onton BzoewePy i Nol'th West ~ =' '= Lf _ _ .. ______' ___ CO.. ::cJ '.~~', 11 1 ,... '-, 1 1 1 C'/.) 1 ~ ( J 1 J ""'" • 1 fil' , \ 229 218 vam CIl 1930 EXCIsE ~ ,• Acr~ (--. {"} 2J8--Battle River...... -. '-' ..,C") 2JtJ..-BowCa1 a River ...... '.' " '. '" . '. '" ... . o '. 1 J 22O- e ry East ... Liberal-r...... 1'-- . 227 . ,1 22J-Ca'eary W.t. •. COna.n.t.t...... r •• -( . ~ = 222-Edmonton Eut.Uberal_r•• .', 223-Edmontoa WatUbep&l_r.. ~ Lethb .~ i ~.\ ealgvy Brew1ng and t:Q 224- ridce ...•• Ltbep&l-r.. _ • \ Ifalting Co. '...... ~MadeodM .~ • Canada HaltiDg Co. _. ~ 226- tdic:ine Hat ...... , \ . --- 220 1. . 1 1 lI27-Redtra Deer ...... 228-.s tJac:oa. ••••••••••.••....•....•.....• Big H01'll Bp~ Co. : --VIctoria...... ' ...... "1 > 219

. ;\ " 1 ". 2241 Lethbp1dg.~ï.j __ \ • .._-_•• _ •• .J.•• _.L __ .. _.}-.. UNITED S'TATES ___ ~_ ..... _ ... ~~ ...... ,,"_.,.~ ...... ,_...,... _~ __~ __ .. _._._ ._~ ___,-,,,,,,-,,,,.~.,,,,,,-·a'-·_4'- .... - 'INDEX MAP-SASKATCHEWAN . , ' .. \1. , \ ' , . • , 1 l' :""- ~

" : .( '.

.. 21 2 ,.. .-- , Princ. .o.b8r't Bl'tnre17 / , Red W1ng BrMl817 1 , • .J

tiarE (If 19)0 uClsB \ J , Ar:t AMBHIIŒRT - . . .. _ .. " . 1 202-Aulniboia•.. .-~~~:~~~, .. ;.. '...••.• , 203-0attleford••...... ••..••. ,• 2CK-Humboldt"•...... ••.••• ~ 206'-Kindenley .••...... •...... •' •• < 206-Laat Mouatala •••.... '••..••...•...• ' •• ",1 (-1 , 207-MacKende••••..•...... •.••• > 208-Maple Cnek •. Liberal-Abata1Jl.cfJ . Saskatoon Brewias Co. 1 200-M_ Ja•.... Liberal-Y.. . ~ 203 .1Iub Ci'ty' Brn:l.ns Co. • z ,-.-_.1> , 21D-North Battleford•. '.' ... ': ....•...•.. -: ••• 1 211..,...Prinee Albert •... Liberal-Y•• : ..... ~ ... 21~·Appelle •••.... Liberal-Y...... •. 204 ,- 207 " .-) 213-Relina •••••••.. _It~~~~l!~ ...... -= ,• :~~:~..... ~i:1bVàï~Àbètë1Mcll" ;~ 0 21&-Swllt ~tiLiberal-AlMta1McI .:: 205 Ilf-W.,.,.,. .... i~~al~~,_, --- .. '. < 206 = l ' .1 >' 21 ..

213 .1 1. ...., -- Manac.BrtndnS Co. ~2 216 Regina Brning Co. .

209 zoe - • , 21P., i J l .202 \ ,• '1 AIIer10an Brev:1Dg Co" ' , L: :, (Moos. Jav)' ! ' i. ··~:-t·,-,·_··~··~~_ .. ...; .. ~. .. _ .. _ ..l. .. -t.~-:', ._.~:-.. ~ .. _l._ •. ~ ',', .' " 'u N' l ,TB D ST'ATBS

1 t." CHAPTER VII

R. B. BENNETT IN THE "VALLEY OF DECISION"

The debate on Canada's role in American prohibition enforcement did not end with the excise Act amendment. The Eighteenth Amendment was not repealed until 1933 and between 1930 and the end of prohibition Canadians continued to argue. the bill's merits. The Canadian goverrùnant had saerificed

$10,000,000 in excise duties and Canadians had 10st $20,000,000 in American currency. Meanwh1le, American fiscal policies continued to cripple the

Canadian economy. Following 1930 Many Canadians, previous1y in favour of - cooperation, called for a repeal of the 1930 legis1ation, describing it in bitter terms as a financial disaster and an abject surrender of Canadian sovereignty.

The new Prime Minister, R.B. Bennett, elected in July 1930, lmew that there was considerable anti-American sentiment in Canada and that support vas increasing for a resUDlption of 1iquor exports to the United states. But he knew, too, that many Canadians continued, on moral grounds, to favour the retention of the excise Act amendment. In 1933, when the crucial decision was made, Bennett voted against clearances. In Yiew of bis consistent advocacy of a "bard line" towards the United states, bis decision requires examination.

l'he Conservative party had elected R.B. Bemett as its leader in 1927.

Bemett vas descended trolll New Brunswick United ~1re Loyalist stock. He 170. be1ieved passionate1y in the concept of "Empire" and was devoted to the 1 monarchy. He wished to strengthen Canada's ties with the mother country and, at the same tiMe~ protect it from domination by the United states. Bannett's imperial philosophy influenced bis attitude towards the United states. His speeches called consistently for a "hard line" approach. Mackenzie King bad looked upon the establishment of a Legation in Washington as another step in bis efforts to bring Ca.na.dians and Americans closer together. Bennett saw it as the "doctrine of separation ••• the end of our 2 connection with the Empire." King was determined not to let such incidents as the "l'm Alone" get out of control. Bennett clearly associated himself with Caban's speech declaring the sinking "an act of war," or "an act of deliberate 3 piracy." And while King urged Canadians not to adopt a "red-blooded attitude" on the tariff, Bennett advocated protectionism as a means of combatting the 4 high American import duties. He seemed far less willing tha.n King to see

Canada's diplomatic and economic position~acrificed"to the interests of the United states. -

In early 1928, as Bennett began to think ot the torthcoming general election, it appeared that the s'tate ot the nation must 1ead the Liberal party to a

1 Eraest Watk1ns, R.B. Bannett(Toronto, 1963), p. 138.

2 Debates, 13 April, 1927, pp. 2471-2. 3 Ibid., 20 May, 1929, p. 2659.

4 Hutchison, p. 160. 171. triumphant victory at the polls. The country was prospering, industry was booming and Canada's cities vere growing at an unprecedented rate. What could not be foreseen, however, was the market crash and the financial co11apse of October 1929. When it did come Bennett became the beneficiary of King's failure te grasp the dimensions of the economic deterioration and his inability to offer any concrete steps to avert its impact. The 1930 e1ection in Canada vas fought almost entire1y over economic issues. Canadians vere in no mood to 1isten to speeches in which Mackenzie 1 King urged them te regard trade as something that vas "secured by goodwill." Bennett's promise that the Conservatives would "b1ast a way" into the markets of the wor1d, his dec1ared intention to use the tariff te protect Canadian industy and his p1edge of financial &id to poverty-stricken provinces struck 2 a responsive chord &Mong the e1ectorate. The Liberals vere swept out of power and rep1aced b,y a government which seemed determined to protect Canada's interests, even if it meant coming into conflict vith a powerful and friend1y neighbour. Bennett made it c1ear that he would not be "bul1ied" by the United 3 States in economic and dipl:omatic matters. For a brief period following the e1ection of Herbert Hoover, the United states president seemed genuine1y interested in reducing some ot the tensions

1 ottawa Citizen, 17 June, 1930, p. 1.

2 BepIdns, Canadian Annual Review, !2îQ (Toronto, 1931), pp. 84-109.

3 Debates, 24 Feb., 1930, p. 27. 172.

which were disturbing Cans.dian-American relations. He declared bis uneasiness over the problems arising out of the divergent liquor laws, the inadequate allocation by the United states of air wave lengths to Canada and the failure to reach an agreement concerning fishing rights on the Atlantic 1 and Pacifie coasts. The President announced bis "intention of strengthening the International Joint Commission by replacing "lame duck" members vith younger ones. .He claimed that too Many American representatives came from Western states and not enough from border areas, which had far more 2 interest in Cans.dian-American af:fairs. Yet, for all bis concern, it was

Hoover who signed the Smoot-Hawley tariff act, a statute seriously detrimental to Cans.dian trade. And it was under bis administration that American ilIImigration laws were enforced 50 strictly that Canadians living in border cities such as 3 Windsor were prevented from seeking employment in Detroit. In 1931 the Senate failed to pass the treatyto beautify the Niagara Falls tourist region. Si.milarly, it failed to aet on the treaty for the protection of sockeye salmon on the

Fraser River. The oratory emanating out of Washington may have indicated some understanding of Canada's position and genuine concerne But its eloquence produced

1 Toronto Daily Mail and Empire, 25 April, 1929, pp. 1-2.

2 Ibid. :3 Border Cities Star, 24 Dec., 1930; Foreign Relations Series, !lli. (Washington, 1946), Vol. l, pp. 894-898.

4 Toronto Star, 29 Jan., 1931, p. 6. 173. 1 no concessions to Canadian interests. The Prime Minister counted on his ties wi th England and on Canada' s own resources to overcome the ill effects of this indifference. Irnmediately upon his election he went to London, where he attempted to persuade the Labour government ta create an imperial tariff wall which would give Canada protection 2 from non-Commonwealth imports. The Canadian tariff was raised in an effort to counter the blow administered by the Smoot-Hawley tariff. Bennett did not appoint a minister in Washington after the recal1 of Vincent Massey and for over a year Canada was left without a minister in the American capital. And the Prime Hinister failed to resume the talks opened by the Liberal government 3 on the "Anti-Smuggling Treaty." Such gestures indicated that Benne~t was more concerned about protecting Canadian interests than he was in promoting

Canadian-American ties.

Financial interests would have been served by the repeal of the excise act amemment. In the first year following the ban on liquor exports to the

1 Washington Evening Star, 21 April, 1929, Part Il, p. 3.

2 Bennett was unsuccessful in London. In 1932 in ottawa, howe'Ter, he convinced Great Britain's National government to grant Canada preferential treatment in the British market. This preferential treatment covered a wide ~a~e of products - manufactured goods, raw materials, wheat, fruit and tobacco, timber, Meat and.dairy products, fish and mineraIs. In return, Canada increased the mar~in of preference on over 200 British products. (Brebner, pp. 298ff).

3 .. The "Anti-Smu~glin~ 1'reaty" had been exchanged in draft forro between ottawa and Washington. The treaty appeared to be ready for implementation. Bennett, however, 19ft for London and when ha returned he failed to renew the negotiations. (Foreie-n Relations Series, l22Q Cf/ashin:Tton, 1944), Vol. l, pp. 488-503.) 174.

United states the distilling industry had lost revenue estimated at $16,142,820 and the brewing industry $1,811,402. One f'irm, Distillers Corporation-Seagrams

Limited, had seen its profits decline trom $3,404,591.70 in 1929-1930 to

$2,265,752.37 in 1930-1931. A large part of' this decl1ne vas attributed to 1 Canada's new 1iquor export regulations. In addition to these losses in the l1quor industry, other dependent industries had also suf'fered reductions in revenue. The glass industry had lost $945,500, the boxing and conta1n1ng indus­ tries $195,000, the 1abelling and wrapping industries $250,000, the grain 2 industry $470,000 and the ra1lway industry $295,000. The Federal government had sacr1f'iced $9,435,393 in excise duties. The bill itself was costing 3 $2,000,000 annual1y to entorce. Everything considered, close to $30,000,000 4 had bean lost because of this 1egis1ation. Moreover, unemp10yment was rising steadlly. One in every tan Canadians vas in need of a job. Those workers who vere "laid off" as a result of the excise ACt amendment added to the serious labour surplus. If' the United states had lowered its tariff' it might have softened the b10w deal t the Canadian economy by the ban on 1iquor exports. As

IUtters stood Canada's "object 1esson in international &tf'airs" had not in any 5 -.y been reciprocated.

Angered by American pol1cies S.C. Robinson took the first serious s'teps towards the repeal of' King's bill. Robinson argued that Canada had sacrif'iced the ~valent of' three-quarters of' the fund voted for unemp10yment relief' in order to help the United states. The United states had repaid Canadian

1Distillers Corporation-Seagrams Lim1:ted, Ammal Report, 1930-1944.

2Debltes, 18 May, 1931, p. 1708.

3nnd., 6 July, 1931, p. 3426.

4Ibid., 18 May, 1931, p. 1708.

5Buttalo Ev.Ding News, 19 May, 1931, p. 8. 175.

generosity b,y adopting measures which serious1y damaged the Canadian economy. The Wickersham Commission proved conolusive1y that prohibition in the United states was a 1'ailure and some M.P. 's 1'eared that American o1'1'icials might 1 seek 1'urther concessions. Robinson and bis supporters wished not only to prevent any move in this direction but to ensure that the 1930 1egislation

be abrogated. In M~ 1931 he presented a motion be1'ore the House asking that 2 the 1930 excise Act amendment be repealed. Robinson's motion, however, vas "negatived." Neither the Prime Minister

nor his party showed any enthusiasm 1'or permitting liquor to be sbipped across the border. Bennett knew that many Canadians resented the economic 10ss

Canada had suf1'ered because 01' the bill. He knew that his "bard line" approach to Canadian-American relations was very popular among the electorate. But he believed that an even greater number 01' Canadians opposed legislation which might once again lead to scandal and corruption. Moral 1'actors still seemed to be the overriding consideration among Canadians and Bennett 1'elt that a change in po1icy was inadvisable.

American prohibition or1'icials watched the debate in Canada over ~uor exports to the United States very close1y. The General Section 01' the

WickeraJaam iteport had stated that nit would be a mistake to assume that the cutting 01'1' 01' clearances 1'rom Canada to the United states had acbieved its

1 Border Cities Star, 22 Jan., 1931, p. 1. 2 Debates, 18 May, 1931, p. 1709. 176.

1 he1pful intention." Canadian 1iquor vas using the "back doorlt ta get into the United states. It vas being c1eared for st. Pierre-Miquelon, Bermuda,

French Oceania, British Honduras and the West Indies and then rerouted to 2 the United states. Neverthe1ess, American oftic1als fe1 t that the now 3 Canadian 1aw was he1pful &long the border. and feared that ~ change in 4 po1icy "m1ght eas1ly prove ta be a te11ing b10w to dry hopes." The Canadian 5 excise act amendment had not been an entirely "futile gesture."

The United states offic1als fe1t that there would be 1ittle 1ike1ihood of the Liberal party reversing its stand on the 1iquor export question. Under the leadership of Mackende King the Liberals had caratully avoiding adopting po1icies designed de1iberate1y ta provoke Washington. Even wb1le King had procrastinated on the l1quor question, he made strenuous efforts not to antagonize the United states.

There was, hovever, cancern about the attitute of the Conserva:t1ve party. Bennett and MOst ot his Conservative co11eagues failed ta support

Robinson. The Prime Min1ster had, in fact, den1ed rumeurs circulating in

1 R.G. 10, National CoJlllll1ssion on Law Observance and Entorcement, National Archives, Washington, D.C.

2 ottawa Journal, 2 Feb., 1933. 3 ottawa Citizen, 11 July, 1930, p. 1. 4 Liverpool, Ohio Reviev, 23 Jan., 1931. 5 Montreal Gazette, 21 Jan., 1931, p. 12. 177.

Washington that Canada would shortly repeal the legislation and again 1 f'acilitate the export of' Canadian liquor to the United states. His actions, however, f'ailed to reassure American of'f'icials, who remained apprehensive. They knew that Bennett had warned Canadians against the 2 dangers of' becoming "vassals" of' the United states. They were avare of' the belligerent statements he had made in connection with the ''l'm Alone" incident. They wondered how long he would support a ban on liquor clearances, in view of' the adverse ef'f'ect American policies were having on Canada.

Moreover, there were signs that while Robinsons's motion had been rejected, Canadian public opinion had undergone a signif'icant change. Although

Canadians had not explicit1y demanded economic concessions, i t became clear

that many people had supported cooperation on the assumption that Canada 3 would receive compensation f'or its sacrif'ices. Canadians could not understand 4 how Canada could have given so IIlUch and not received "a single thing in return."

The Border Cities star, which three years ear1ier had written that the country's 5 liquor po1icy "should cause Canadians to bang their heads in sb.alll8," now

1 R.B. Bennett Papers(P.A.C.), Vol. "165, Exteraal. M'f'airs, Wrong to Bennett, 15 Dec., 1932.

2 ottawa Citisen, 10 June, 19)0, pp. 1 and 2.

3 See testiJllony of' C.M. Young(Research Assistant f'or the National CoJa1ssion on Law Enf'orcement), National Commission ••• Enf'orcement, 1930. (No specif'ic date cited. ) 4 st. Thomas Times-Journal, 16 Nov., 1932. 5 Border Cities Star, 25 March, 1929. p. 4. 178.

spoke ditferent1ya Everyone seemed to take i t for granted, at the time, tbat Mr. Mackenzie King had a formal agreement or at 1east a gentleman's understanding with the government at Washington by which tbis country would receive a substantial concession from the United states ••• No such announcement along these 1ines was made but Most pers ons conc1uded that the 1ack of announcement was merely a matter of diplomatie policy, \-lashington, for domestic po1itical purposes not caring to reveal that concessions bad been made to Canada. However ••• the cold truth finally came home to us all-the government had given everything and received nothing. ~"'e bad someth.ing substantial to "trade" and we murfed the opportunity. 1 Then, too, Canadians still f'elt that they were paying heavily to

entorce an unpopular American 1aw. They saw "thirsty" Americans continuing

to evade the Volstead Act with increasing regularity. Evidence revealed by the Wickersham Commission proved conclusively that the American customs force 2 in such areas as Detroit was "totally inadequate" to police the area. It revealed the ineptness of' the organization of the United states eustoms service along the bordera not one organization, but twelve, each with its own customs collector, al1 of them po1itical Appointees, enjoying "a large 3 f'reedom in the exer.o1se of' their duties." Lack of a unif'orm po1icy vas hindering the effectiveness of' antl-smuggling measures. The election of'

Franklin D. Qooseve1t in 1932, and bis pledge to repeal the Volstead Act, also made Canadians wonder about the practicality of' the excise act amendment.

2 q.G. 10, National Colllllission ••• Enforcement, Judge Willi.. E. Kenyon's section of' the ~eport. 3 ~.G. 10, National Commission ••• Enforcement, ~eport ~ B.E. Savyer(Legal Assistant of' Secretary of' Commission), 21 July, 1930. 179.

Nor had the United states coast guard been using greater discretion when patrolling the high seas. According to United states law, vessels travelling at night had to have their lights on. The Firelight vas anchored some twenty miles f'rom the United states coast vith i ts lights of'f'. The coast guard, arguing that American law applied on the high seas, captured the vessel and pulled it into shore. Then, in January 1931 the "rum-runner" Josephine K vas seized. The vessel vas well w1 th1n oÏle hour of' the coast and the seizure was legal. However, in the process American agents ,who, according to the rumours, were themselves drunk, had killed the captain. To the United States the k1lling vas "unavoidable though regrettable." To many Canadians it vas simply another example of' American arrogance. The Buff'alo Evening News f'elt that because of' such incidents Canada would have every right to witbdrav from 1 the treaty of' 1924.

Robinson vas encouraged by reports that "public opinion" had "undergone 2 a radical change" since 1930 and that a "plebiscite on the question would 3 give h1m a resounding majority." In February 1933 he presented another motion before the House calling f'or the repeal of the lav prohibiting

clearances.

Attention in parli~nt wu f'ocused on R.B. Bennett. The vote would

be "f'ree." But BelUlett's attitude towards Robinson's motion would undoubtedly

1 Buffalo Evening News, 19 March, 1931, p. 8.

2 Border Cities star, 9 Dec., 1932, p. 4. 3 Ibid •• 10 Nov •• 1932, p. 4. 180.

influence Many Conservative M.P.'s. The Prime Minister must weigh carefully both the arguments favouring cooperation and those opposing i t and

~ po1itical and moral considerations would influence bis decision.

Bennett was fully aware of the opposition to cooperation which had deve10ped since Robinson's first motion in 1931. Much of this opposition vas centred in Ontario and Quebec, where anti-American po1icies had he1ped h1m win the 1930 e1ection. He knew that Canadians resented the sacrifice of $30,000,000 to he1p an uncooperative neighbour. A change in Canada's 1iquor .. export po1icy would be approved by many of those adverse1y arfected b,y American fiscal po1icies. The restoration of the trade might also he1p to alleviate some of the 111 effects of the depression. Thus far Bennett had been unsuccessful in bis efforts to improve the Canadian economy. Ir the export of 1iquor to the

United States were permitted badly needed revenue would fiow into Canada. New jobs would be created in the many industries arfected by the curta.llment of

1iquor exports. The prob1em of the depression would not be solved b,y a change in pol1cy. Neverthe1ess, many areas would benefit from the change.

But the national economy was not the only factor Bennett had to considere

The impact of the revelations of the qoyal Commission had been decisive in creating the climate of public opinion which made the 1930 1egis1ation possible. Canadians still remembered the corruption which resulted from the alliance between government and bootleggers. Moreover, the Beauharnois Scandal of 1931, wldch invo1ved infiuential Liberals in the King administration who had accepted money from the Beauharnois Power Corporation in return for special favours, wu still fresh in the minds of the e1ectorate. Bennett knew that if he 181.

restored the liquor trade he woUld be vulnerable to the charge that he had been influenced by the liquor interests.

The attitude or the Conservative press was another important consideration.

Since 1930 Conservative newspapers had ro11owed Bennett's lead in advocating a rirm stand hl diplomatie dealings with the United .States. In the liquor

export issue, however, this nna.n1 m1ty did not prevaUt Powerfül. Conservative.- newspapers such as the Montreal Gasette continued to speak out against 1 cooperation. The ottawa Journal. vas now supporting Robinson. But equa1ly

powerful newspapers such as the Winnipeg Tribune and the Montreal Star 2 continued to support the ban on clearances. Bennett rea1ised that part of the Conservative press opposed an activity in which bootleggers and "rum­

runners" might st:1mu1ate an international crisis on the high seas. He knew

that with the press divided, he coUld rollow his own inclination v.L thout the

fear or politica1 repercussians.

Finally, Bennett JIlUSt consider bis own attitude towards Canadian-AIIlerican

relations. He believed that it vas in Canada's best interests to to11ow

the "bard line" in diplo_tic and economic !latters. In the 1930 election

campaign he had told his audiences that "protection1sm" had helped the United

states grow to the point vhere it vas the leading industrial nation in the 3 vorld. He wanted Canada to ellUlate that "Aaerica rirst" policy. Yet his stand

1 Montreal GaEette, 10 Dec., 1932, p. 121 See Toronto Telegram, 19 Nov., 1932.

2 Winnipeg Tribune, 18 Feb., 1933, p. 11; Montreal star, 17 Feb., 1933, p. 10. 3 ottawa Journal, 10 June, 1930, p. 1. 182.

was not inconsistent with a genuine desire that the two countries be "rriendly 1 neighbours" and "speak to one another as such." Furthermore, IIIADY or the

statements he had made in opposition were moditied b.Y the responsibllities or orrice. The "Josephine K" vas a serious incident. But there vas no ta1k or

"war" and "piracy" emanating rrom Conservative circles. The government protested but it also emphasised its desire to "continue the spirit or rriendly 2 cooperation which led to the signing or the Convention" or 1924. Bennett,

in ract, led his government in measures designed to prevent major confrontations.

It vas his administration which ordered the Brown Derence Scheme to be scrapped 3 in 1931. and which permitted the United states to !ly military aircratt over 4 Canadian sol1. The Prime Minister would make strenuous errorts to preserve

Canada's diplomatic and economic position. But he believed that it was in the

nation's best interests to reduce rriction which might haVQ serious inter-

national complications. Canadian orricials stationed in Washington warned 5 him that "rum-rœmers" and bootleggers could provoke an international crisis

and Bennett would rind i t dif"ricu1t to ignore these warnings.

Bennett decided that the majority or Canadians !avoured a continuation

l Debates, l May, 1933, p. 4433.

2Foreign Relations Series.1932 (Washington, 1947), Vol. l, p. 85.

3nerence Sche.. No. l wu the product or Colonel J. Sutherland BrDwn, the Director or Military Operations and Intelligence between 1920 and 1927. It vas designed in part to prepare Canada for military operations against the United states. See James Earys, In ne!ence or Canada, From the Great War to the Depression(Toronto, 1964), pp. 70-78.

'7oreign Relations Series, 1932, Vol. l, p. 85.

Sa.B. Bemett Papers(P.A.C.), Vol. 152, Wrong to Bermett, 18 Sept., 1931. 1 ot the ban on liquor clearances. They would re ject a policy which encouraged the crime and corruption which accompanied "rum-running" and bootlegging. Anti-Americamsm, stimulated by the United States restrictive f'iscal policy, had increased and Bennett had capital1zec1 on this anti-

Americanism. If' economic f'actors alon~ vere at issue Canadians would probably continue to support a "bard line" policy. But Bennett f'elt that despite the harden1ng of' sentiment in f'avour of' clearances, most Canadians opposed the repeal of' the 1930 legislation on moral grounds. Bennett had correctly assessed Canadian public opinion. Opposition to

American pol1c1es had, as Bennett expected, torced a substantial number ot parliamentarians to reconsider their stand. Whereas only il M.P. '5 had voted f'or clearances in 1930, 44 nov f'avoured a return to the liquor export trade.

Wb1le 177 M.P.'s had supported King's bill only 100 voted tor cooperation in the present instance. Tventy-three Conservatives, including Cabinet Ministers

Manion and Arthur Sauvé, voted with Robinson. Eighteen Liberals supported the

Conservative M.P. Thirteen M.P. 's, six Conservatives and seven Liberals, who had voted f'or cooperation in 1930 nov rejected it. ~ ot these M.P.'s representec1 constituencies - Port Arthur, Vancouver Burrard, Megantic,

Champlain. st. Hyacinthe, Prescott - in which the curta1J.ment of' tiquor exports had an adverse effect on the economy. ot the region. In 1930 the issue tor almost all ot the M.P. 's vas morality and they bad voted against clearances.

In 1933 they SaY the restoration ot liquor clearances as a means ot retaliating

1 Debates. 16 Feb •• 1933. p. 217.5. 184. against the United states economic poticies.

Nevertheless, two-thirds of the H.P.'s in the H~use voted against liquor clearances. The moral considerations continued to be' the paramount factor in the public's attitude. Bennett bad seen this'and his forthright rejection of the motion helped materially to def'eat it. At the same time, it enabled him to accommodate tIla view of' the majority of Canadian voters to his personal convictions.

Canada thus retained i ts ban on 1iquor c1.earances and from this time to the repeal of the Eighteenth Amendment the 1iquor export question ceased to be a politica1 issue. The "moralists" and the "idealists," who vere largely responsible for Bennett's stand, vere gratif'ied by the Canadian decision. But even those CanacHans angered by American economic policies vere subdued. A new phase vas opeJrl.ng in Canadian-American relation,s and

Canada would reap the benefit. At bis first inaugural address, President

Roosevelt enunciated a "good neighbour po1icy," :1ndicating that the United 1 States was witbdrawing rrom its isolation1s.. Roosevelt vas influenced

by the suggestions that the Uni.ted" states BlSt make treaties "operate 2 to their (Canada's] interests" as vell as Washington's. He introduced a

chal'lge in Uni.ted states econom1c po1icy which al! Canadians welcomed. The

United states indicated a will1ngness to accept a rec1proca1 trade agreement

with Canada. To the ottawa Journal this -.nt the end of "that mad tarif'fism 3 which had dammed the streams of vorld trade." The Conservative party had

1 ottawa Journal, 24 April, 1933, p. 7.

2 Foreign Relations Series, illl (Washington, 1948), Vol. l, pp. 37ff'. 3 ottawa Journal, 12 April, 1933, p. 6. been eleeted on a plattorm whieh advoeated the proteetive taritt as a means ot aehieving prosperity; but by 1933 even Bennett vas seeldng trade

agreements with toreign eountries. Roosevelt also announeed that the

United states would go ott the gold standard and this would bring Canadian

am Ameriean eurreney eloser to parity. The United states government

stabllized the exehange rate between the pound sterling and the Ameriean

dollar. This made it easier tor Canada to use her tavourable balanee ot

trade with Great Britain to ottset the detieit in her trade balanee with

the United states. At long last, an administration in Washington was

seriously eonsidering Canada's interests. The Canadian saerifiee in the

liquor export trade had not been in vain. CONCLUSION

The Eighteenth Amendment was repealed in December 1933. Saloons and bars once more opened their doors to the public and Americans, forced for thirteen yeara to do their drinking surreptitiously, in defiance of the law, now carried their bottles unashamedly through the s treets of Am9rica~,s cities •

They had tasted prohibition and found it bitter to their palates. Most Americans had managed to evade the law and prohibition had been a dismal fall.ure. But the knowledge that drinking was illegal and they were criminals disturbed them. They were happy that the "era of clear thinking and clean l living" had come to an end.

Across the border, however, Canadians who had a vital stake in the liquor trade greeted the Twenty-first Amendment without enthusiasm. American tourists would no longer nock to Niagara Falls, Windsor, Kingston and 2 Montreal for their alcohol.; The fourteen-year boom in the tourist traffic would suifer an immediate and appreciab1e dec1ine. The liquor exporters saw that the repeal of prohibition would end a highly lucrative business. Be twe en 1920 and 1930 tbey had sent their products to the United states almost without

interferenoe. The 1930 excise act amendment had reduced their income but the trade continued to be a profitable one. The Twenty-first Amendment would permit them to land their liquor 1egally in the United states. But the market

1 Asbury, pp. 154-5.

2 1.3. Bennett Papers(P.A.C.), Vol. 157, Alcoholic Beverages, Memorandum ~egarding American Tourist Expenditœ-es in Canada. (no date i5 ci ted but 1932 or 1933 would he a close approximation.) 187. which had been almost exclusively theirs would now be open to United states competition. Canadian distilleries would have large stocks of aged liquor available for immediate sale while American distilleries would be unable to market liquor for two or three years. But no longer would Canada's liquor firms be assured of the tremendous profits to which they had become accustomed by the s~eady demand for . 1 Canadian beer and whisky.

The repeal of prohibition ended a long and acrimonious debate in Canada over the liquor expert policy. The "idealists," seeking a new and more harmonious relationship on the North American continent, had given their unqualified support to Canadian cooperation and had criticized Mackenzie King for failing to recognize the importance of international cooperation. The "moralists" had also pressed the government to ban liquor clearances, basing their support on their abhorrence of the evils of the liquor trade and they deplored King's insensitivity to the immorality involved in "rum.-running" and bootlegging. The Canadian "pragrnatists," giving priority to Canada's economic interests, and resenting United States indifference to those interests, had opposed cooperation. Aware of King's desire to improve

Canadian-American relations, they had accused him of sacrj_ficin~ Canada's interests to curry favour with the United. States. Between 1920 and 1926 the views of the "pragrnatists" had prevailed. The

revelations of the Royal Commission in 1927 brought Many converts to the "moralists'"

point of view. Canadiâns became increasinr:;ly concerned over the activi ties of

the "rum.-runners" am bootleggers which the:'t felt were threatenin~ Canada' s moral

stamards. If this threat to Canadian morality could be reMoved by complete

l The United States treasury demameà that Canadian distilleries, befere bein'" allowed te market their !,roduct.s in the United. States, payi:50 ,000 ,000 'in excis~ taxes ..... T) 1'; ~uor -.r'b.ich had been expo:-t~ ta :'he I}nited States _duriru: prohi1:~ition. The State DepartMent, interested in t~e diolomatic relatio~~hio between Canada and :'he United States, opposed this position. A pMlo~ed contr0V9rs:.,r resulted in a set tle:nent r)f .~6, 000,000. :'his incident revealed how te~~io!":s ri thin the United States p-d."linistration determined. decisions affectir:::; Canaria. 188. cooperation with the United states, Many Canadians were prepared to support it.

The 1930 excise act amendment was the result of sustained pressure exerted on l1ackenzie King by the combined weight of the "idealists" and the "moralists."

A strong surge of anti-Americanism accompanied the beginnings of the depression of the 1930'5. Once" a':',ain the views of the "pragmatists" gained public support.

The new Prime Hinister, R.B. Bennett, was faced with the same type of pressure as had been exerted on Mackenzie King. He retained the ban on liquor clearances on moral ~rounds but he recognized the growing bitterness of the Canadian debate.

With the reneal of prohibition in 1933, the liquor export issue was removed from Canadian political life.

The repeal of prohibition also eliminated a contentious issue from Canadian­

American relations. For ten years exasperated American officiaIs had sought the cooperation of Canadian authorities in the er~orcement of their liquor laws.

Canada had rejected these requests. Nmnerous dispatches had travelled back and forth between ~-iashington am. Ottawa. Three conferences had been held in an effort to reconcile the differences between the two countries. The hostile overtones which so often characterize the polite language of diplomacy were entirely absent from the exchanges. But the "1 'm Alone" incident provided an example of the problems which could arise over prohibition enforcement. Even the passage of the Canadian

excise act amendment did not prevent tensions from developing over confrontations

on the hi~h seas. The enactment of the Twenty-first Amerrlment removed any

possibility of a serious crisis arisin~ out of the nations' diver~ent liquor laws.

Canada am. the United stat.2s shared the major portion of a sinsle

continent am. it was clearly desirable that they should develop a considerable

desree of interàepemence. But Canada was the weaker of the two nations. Its 189. prosperity was based largely upon the American economy. It depended to a considerable degree for its security on American protection. The Canadian government, in determining i ts liquor export policy, did not submi t to

United States pressure. It did, however, make every effort to avoid antagonizing the powerful neighbour upon wbich Canada so heavily depended.

At the sarne time, the ''l'm Alone" incident, a product of the VoJstead Act, intensified Canada '5 growing spirit of nationalisme In the "I 'm Alone" case Canada's right to independent diplomatie action was acknowledged by both

Great Britain and the United States and tbis was a major step in the country's progress towards autonomy. Canada's new status placed upan it the

responsibility for safeguarding its own rights. Canadians, generally,

encouraged the government to deal firmly with the United States when their

interests were adverselyaffected. Canada's liquor export policy revealed an important aspect of Mackenzie

King's approach towards Canadian-American relations. During his administration

King made every effort te promote Canadian-American amity. In determining bis liquor export policy, however, he placed bis responsibility to Canadian

public opinion above every other factor. His course of action was determined solely by political considerations. He woulli act only when he was confident

that he had the support of the majority of the electorate. His policy was a

product of his acute political sens~. It provided evidence, as weIl, of a

desire to nlace the nreservation of Canadian unitY above Canadian-Americari

frielidsbip. The liquor exnort debate emphasized the conception Canadians held

of their high level of morali ty. The powerful imnact the Royal CO!'llJTlission 190. made on the Canadian public had moved opinion towards acceptance of a ban on clearances. This cbanged attitude towards clearances was be.sed on the assumption tbat a high standard of morality demanded a correspondingly high qua1ity ot bebaviour. IJespite a strong wave of anti-Americanism

R.D. Bermett regarded moral considerations as the primary concern of the

Canadian electorate and he retained Canada' s new liquor export policy.

An examination o~ Cmada' s reaction to liquor exports, therefore, reaf'firms one of the dominant themes of Canadian historyl a conviction among Canadians that the nation's ethics vere more demanding than those of the United states.

The relationship between Canada and the United states is based on a complex set ot cirC'WIStaDces. Relative size, comparative wealth, geographical position, ethnic composition and historical backgrounds have developed points of si mil ar1:t7 and areas of difference. A study of Canada' s reaction to the Volstead Act provides an understanding of the impact these characteristics made on Canad1.an-.Amer1.can relations during the critical period between 1920 and 1933. Appendix

Table 1 1 Canadian Newspapers Supporting Cooperation vith the United states.

Maritimes

Halifax. béning Mail

Halifax. Herald

Moncton. Daily Times (The Times did not lend i ts unreserved support to the excise act amendment. Nevertheless, it was prepared to give it a chance.)

Moncton. Transcript

Sydney. Post (The Post changed its policy in 1930 when it became claar that the Conservative party was going to vote for the bill. Previous to 1930, it had been very much opposed to Canadian co~peration.)

Quebec

Montreal.Harald

Montreal. star

Ontario

Border Cities star

Kingston Whig Standard

London Free Press

ottawa Citizen

ottawa Journal (The Journal changed its po1icy after 1930 when it saw that the United states vas not going to offer a reciprocal concession to Canada.)

Port Hope Guide

1 See bibl10graphy for precise dates consul ted. 192.

Toronto. Globe

Toronto Star

Western Canada

Edmonton Bulletin

Edmonton Journal

Manitoba Free Press

Regina. Morning Leader Saskatoon Star Phoenix

Winnipeg. Tribune

British Columbia

Vancouver. Morning Star

Vancouver. Province

Victoria. DaUx Times

Table n Canadian n8Vspapers opposed to cooperation vith the United States

Maritiaes

Halifax Chronicle(The Chronicle initially supported cooperation but later changed its policy.) St. John!. Telegraph Journal

Quebec

L'Evé'neaent La Houve1l1ste(Three Rivers) 193.

La Patrie

La Presse

Le Soleil

Montreal. Ga~ette

Ontario Toronto. Daily MAil and Empire

Toronto Telegram

British Columbia

Vancouver. ~ Vancouver. Western TribuDe

Victoria. Da1l1 Colonist BIBLIOGRAPHY

PRIMARY SOURCES

1. Manuscripts

a) Public Documents

Canada Governor General's Numbered F11es(Pub1ic Archives Canada), 1920-1930 Bouse of Commons, Session 1926, Special Committee Investigating the Administration of the Department ot Customs and Excise(P.A.C.)

Royal Commission on Customs and Excise(~.A.C.), 1926-1927

United States Department ot State Records(National Archives, WashiDgton D.C.) 811.114/3000-5000 811.114Canada 811.114ottawa Conference 811.114I'm Alone 842.114Liquor 711.429/1-350 National Commission on Law Observance and Entoroement, 1929-1931 (National Archives, Washington D.C.) b)Private Papers

~.B. Bennett Papers(P.A.C.), 1930-1935. W.L.M. King Papers(P.A.C.), 1920-1930

A.~. Meighen Papers(P.A.C.), 1925-1927 N.W. Rowall Papers(P.A.C.), 1928-1930 B.H. Stevens Papers(P.A.C.), 1926-1927 195.

2. Newspapers1

Canada

Ontario

London Free Press. Du1y. P. A. C. ottawa Citizen. Daily. P.A.C. (Nov •• 1924) ottawa Journal. Daily. P.A.C. st. Thomas Times-Standard. Daily. (Nov., 1923 only)

Toronto. Daily Mail and Empire. Daily. P. A. C.

Toronto. Globe. Daily. P.A.C.

Toronto Te1egram. Daily. Toronto Te1egram Library.

Toronto Star.. Daily. P.A.C. (Jan. -·Feb •• 1931)

Windsor. Border Cities Star. Windsor star Library. Every edition of this news­ paper between 1920 and 1933 was consulted •

Quebec

English Language Newspapers

Financial Times. Weekly. P.A.C. (Nov •. 1932)

Montreal. Gazette. Daily. P.A.C. (Jan. 1918-July 1919)

Montreal. Herald. Daily. P.A.C.

Montreal star. Daily. P.A.C.

French Language Newspapers

L'EVé'nement(Quebec City). Daily. P.A.C.

La Patrie(Montreal). Daily. P.A.C.

La Presse(Montreal). Daily. P.A.C.

!umess othervise specitied al1 CanadiMl nevspapers vere consulted tor the folloving dates: Sept.-Oct•• 1922; Sept.-July, 1923-1924; June-Sept., 1925; Feb.-June, 1926; Sept.-August, 1926-1927; Oct.-June, 1928-1929; Oct.-May, 1929; Feb., 1933. 196.

Le Courrier du St. ayacinthe. Daily. Sir George Williams University Library.

Le Solell(Quebec City). Dally. P.A.C.

Western Canada·

Edmonton Blùletin. Daily. P.A..C.

Edmonton Journal. Dally. Letter trom Library. (Mar ch , 1930 only)

Winnipeg. Manitoba Free Press. Dally. P.A.C.

Winnipeg. Tribune. Dally. P.A.C.

Regina. Morning Leader. Dally. P.A.C.

Saskatoon star Phoenix. Daily. Letter trom Library. (March, 1930 only)

British Columbia

Vancouver. Morning star. Daily. Vancouver Public Library.

Vancouver. Province. Daily. P.A.C.

Vancouver. Sun. Dally. Vancouver Public Library.

Tictoria. Dailf Colonist. Dally. P.A.C.

Maritimes

Halifax Chronicle. Daily. P.A.C.

Halifax. Evening Mail. Dally. Dalhousie Universi ty Library.

Halifax. Herald. Daily. P.A.C.

Halifax. ~. Dalhousie University library.

Moncton. Dailf Times. Moncton Public library.

Moncton. Transcript. Daily. Moncton Public Library.

st. John. Telegraph-Journal. Daily. st. John Public Library.

Sydney. Post. Dally. Sydney Public Library. 197.

Re1igious Newspapers

Christian Guardian. Weekly. (1923-1924).

Presbyterian Witness. Weekly. (1923-1924).

1 United States

Atlant&. Journal. Daily.

Baltimore. §lm. Daily.

Buffalo. Evening News. Daily. (Al1 issues between 1920 and 1933. News Library)

Boston. Globe. Daily. Boston Public Library.

Boston. Herald. Daily. $oston Public Library.

Cedar Rapids. Evening Gazette and Repub1ican. Daily.

Chicago. Daily News. Daily.

Chicago. Daily Tribune. Dally.

Cleveland • Press. Daily.

Detroit. Free Press. Dally.

Detroit. News. Daily.

Liverpool, Ohio. Reviev. Daily.

Los Inge1es. Times. Daily.

New Orleans. Times-Picame. Daily.

Newark. star Eagle. Dai1y. New York. Herald-Tribune. Daily.

New York. Times. Daily.

New York. Wor1d. Daily.

1 Al.l American newspapers, ,1Il'Ù.ess othervise specitied, vere consulted tor the tollowing dates 1 Oct.-August, 1923-1924; August, 1925, October-June, 1929. Jan.-June, 1930. These newspapers are al.l at the Library ot Congress t Washington, D.C. 198.

Philadelphia. Evening Bulletin. Daily.

Philadelphia. Ledger. Daily. st. Louis. Post-Dispatch. Daily.

San Francisco. Chronicle. Daily.

San Francisco. Examiner. Daily.

Washington. Evening Star. Daily.

Washington. Post. Daily.

United Kingdom

London. Times. Daily. (March-April, 1929 only. McGill University Librnry).

:3. Serials

Great Britain. British Year Book of International Law. University of Toronto Library.

Great Britain. Journal of the Royal Institute of International Mtd.rs. University of Toronto Library.

New York. Annals ot the American Academ,y ot Social and Political Science. University of Toronto Library.

New York. Current Hist0rI. University ot Toronto Library.

New York. Literary Digest. University of Toronto Library.

New York. Nation. University of Toronto Library.

New York. New Republic. University ot Toronto Library.

Toronto. Canadian Annual Renev. University of Toronto L1brary.

Toronto. Canad1an Forum. Univers1 ty of Toronto L1brary.

4. Business Publications

Montreal. Distillera Corporat1on-Seagrams L1m1ted, Annual ~eports.

Ottawa. Canadian Trade Index. 199.

5. Official Sources

Canada

Annual Departmental Reports, 1925~1933.

Debates of the Senate, 1920-1933.

Dominion Statutes, 1920-1933.

House of Commons, Debates, 1920-1933.

Sessional Papers, 1920-1924.

Alberta Revised statutes of the Province of Alberta, 1920-1933.

Ontario Revised Statutes of the Province of Ontario, 1920-1933.

Quebec Revised Statutes of the Province of Quebec, 1920-1933.

United States

Papers'Relating to the Foreign Relations of the United states (Washington), 1918-1933.

Proceedings and Debates of the ?lst Congress, ~.

World League of Nations Society Literature, 1921-1925.

6. Personal Interviews

Hon. Mr. Justice Bora Laskin, 1 Feb., 1970.

John E. Read, 30 Nov., 1967.

Hon. Arthur W. ~oebuck, Q.C., Senator, 1 June, 1968. 200.

7. Personal Letters

Henry F. ~, 23 Oct., 1967. H.L. Keenleyside, 9 Nov., 1967.

Senator Arthur ~oebuck, 15 March,~ 1968. H.H. stevens, 20 Dec., 1968. 201.

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Sohull, Joseph. Laurier, The First Canadian. Toronto. McClellanc1 and Stewart, 1966.

Skotheim, Robert A. American Intellectual Histories and Historians. Princeton. Princeton University Press, 1966.

Sinclair, Andrew. The·Era of &ccess. London. Faber and Faber, 1962.

SmUey, Donald V. The Rowell-5irois Report. Toronto. McClellanc1 and Stewart, 1966.

SpenC8, Francis. The Facts of Thë Case. Toronto 1 Newton and Tre1ear, 1896. Spence, Ruth Eliza.beth. Prohibition iD Canada. Toronto. William Briggs, 1912.

TiIlber1ake, James E. Prohibition and the Progressive Movement. Cambridge 1 Harvard University Press, 1966.

Wiebe, Robert H. The Search For Order. New Yorkl Hill and Wang, 1967.

Woblplernter, Maurice. Israel Zangwill. New York. Columbia University Press, 1964.

3. Thes es

Allen, A.R. "The Crest and Criais of the Social Gospel in Canada. 1916-1927, fi Unpublished Ph.D tbesis, Duke University, 1966.

Christie, E.A. "The Presbyterian Church in Canada and its Official A.ttitude towards Public Affairs and Social Prob1ems, 187.5-1925,· Unpub1ished Master's thesis, University of Toronto, 1955.