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The Politics of Combines Policy: Liberals and the Stevens Commission*

Published online by Cambridge University Press:  07 November 2014

D. F. Forster
D. F. Forster*
Affiliation:
University of Toronto
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Extract

This paper is not designed primarily as a contribution to the theory of political decision-making. Nor is it an economic analysis of the problems studied by the Royal Commission on Price Spreads and Mass Buying. Rather, it is an attempt to show how the opposition Liberal party developed a strategy to deal with the important issues of economic policy raised by the investigation and how it developed an alternative policy position.

On February 2, 1934, the Prime Minister, R. B. Bennett, moved that a Select Committee of the House of Commons be established to inquire into the causes of price spreads and a variety of related problems in the areas of distribution, inter-firm relations, and labour conditions. From the beginning, H. H. Stevens, the chairman and Minister of Trade and Commerce in the Bennett administration, dominated the Committee's hearings—selecting witnesses, scheduling proceedings, and stretching the Committee's already elastic terms of reference in search of new abuses and new sensations. He denounced unfair trade practices and what he felt were flagrant abuses of economic power by department stores, meat packers, and other mass buyers, economic power which he charged was used to squeeze the small retailer, supplier, and producer and destroy decent working conditions. The public interest in the hearings was high and the press coverage was extensive and full, particularly when the Chairman had angry exchanges with the presidents of Canada Packers and the Imperial Tobacco Company.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 28 , Issue 4 , November 1962 , pp. 511 - 526
Copyright
Copyright © Canadian Political Science Association 1962

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Footnotes

*

A revised version of a paper read at the annual meetings of the Canadian Political Science Association at McMaster University, Hamilton, on June 8, 1962. In revising this paper I have benefited from comments made on that occasion by Professor C. H. Curtis and Mr. J. R. H. Wilbur, and later, by my colleague, Professor M. H. Watkins. The research on which this paper is based was completed during 1958–60 while I was engaged as Dr. H. Blair Neatby's research assistant on the official biography of W. L. Mackenzie King. I am indebted to Dr. Neatby for his assistance and I wish to thank him and Mr. King's Literary Executors for permission to use the King Papers for this purpose. Dr. W. K. Lamb, as Dominion Archivist and Literary Executor, has been particularly helpful.

References

1 For an informative and lively account of H. H. Stevens' career in the Bennett administration see Wilbur, J. R. H., “H. H. Stevens and R. B. Bennett, 1930–34,” Canadian Historical Review, XLIII, no. 1, 03, 1962, 1–16.CrossRefGoogle Scholar Summaries of the Commission's recommendations can be found in Bladen, V. W., An Introduction to Political Economy (Toronto, 1956), 232–3Google Scholar; and Reynolds, L. G., The Control of Competition in Canada (Cambridge, Mass., 1940), 147–8.CrossRefGoogle Scholar

2 In fact, it was Stevens' speech before the national convention of Canadian boot and shoe manufacturers in Toronto which had really initiated the inquiry. See Wilbur, , “Stevens and Bennett,” 7–9.Google Scholar

3 Public Archives of Canada, King Papers, C. L. Burton–W.L.M.K., June 13, 1934.

4 Ibid. W.L.M.K.–J. L. Ilsley, et al, July 23, 1934.

5 Ibid. W.L.M.K.–C. L. Burton, July 23, 1934.

6 R. J. Manion, the Minister of Railways and Canals, was making desperate efforts to awaken Bennett's interest in the organizational aspects of politics. See PAC, Manion Papers, R. J. Manion–H. A. Bruce, March 3, 1934; R.J.M.–R. B. Bennett, April 27, 1934; R.J.M.–James Manion, July 5, 1934; R.J.M.–W. D. Herridge, Aug. 24, 1934; and R.J.M.–R. B. Bennett, Aug. 25, 1934.

7 See Manion Papers, J. L. Bowman–R. J. Manion, Aug. 23, 1934; R.J.M.–J. L. Bowman, Aug. 27, 1934.

8 For a description of the pamphlet episode see Wilbur, , “Stevens and Bennett,” 11–13.Google Scholar

9 On August 7, C. H. Cahan told King that “one thing was perfectly certain, and that was that Mr. Stevens had disqualified himself from acting as chairman of the Royal Commission, to say nothing of what his action meant as a member of the administration.” King Papers, W.L.M.K.–Vincent Massey, Aug. 7, 1934. Cahan seems to have been Stevens' leading opponent in the cabinet.

10 King Papers, W.L.M.K.–Vincent Massey, Aug. 7, 1934.

11 A view shared by many Liberals. See ibid., J. H. King–W.L.M.K., Aug. 21, 1934.

12 University of Manitoba Library, Dafoe Papers, J. W. Dafoe–J. S. McLean, Aug. 16, 1934.

13 King Papers, I. Mackenzie–W.L.M.K., Aug. 17, 1934.

14 Ibid., W.L.M.K.–I. Mackenzie, Aug. 22, 1934.

15 Toronto Star, Sept. 20, 1934. Here King was attempting to exploit the rumoured close connection between some of the members of the Conservative cabinet and the textile industry. See Wilbur, , “Stevens and Bennett,” 15–16.Google Scholar

16 King Papers, Press Statement, W.L.M.K., Sept. 24, 1934. See also Toronto Star, Sept. 25, 1934.

17 Wilbur, , “Stevens and Bennett,” 13–16.Google Scholar Even Stevens' successor, R. B. Hanson, commented that Stevens was “a valuable man and his withdrawal will be a distinct loss.” Toronto Star, Nov. 2, 1934.

18 Montreal, Gazette, 12 5, 1934.Google Scholar

19 Toronto Star, Nov. 2, 1934.

20 PAC, A. K. Cameron Papers, T. A. Crerar–A. K. Cameron, Nov. 9, 1934.

21 King Papers, A. E. MacLean–W.L.M.K., Nov. 19, 1934.

22 Ibid., J. E. EIIiott–W.L.M.K., Nov. 23, 1934.

23 Dafoe felt that Stevens had “become intoxicated by the popular reaction to his ventures … and he is developing rapidly into a demagogue of the first rank. Moreover, if he has the capacity and the necessary ruthlessness this might have quite extensive political consequences.” Dafoe Papers, J. W. Dafoe–G. Dexter, Nov. 21, 1934.

24 King Papers, H. R. L. Henry–H. Moyle, Nov. 20, 1934.

25 In addition to support for Stevens, there was speculation about Manion's prospects for the leadership. A prominent Toronto Conservative, who felt that Manion could have the position if he wanted it, wrote that “if R.B. will not give us timely leadership, there are many within our ranks who have reached the limit of their patience and who are out to ditch the man they claim is sulking in his tent.” Manion Papers, A. A. Allan–R. J. Manion, Nov. 6, 1934. Manion's reply indicated that he put a very low value on the leadership of the Conservative party, at that time. “Even if such a thing were possible,” he wrote, “I have no desire to take over a job that has been pretty nearly wrecked.” Ibid., R. J. Manion–A. A. Allan, Nov. 7, 1934.

26 And there were many such attempts. See Wilbur, , “Stevens and Bennett,” 14–16.Google Scholar For current gossip on rumours of reconciliation, see Dafoe Papers, G. Dexter–J. W. Dafoe, Jan. 12, 1935; G. Dexter–G. Ferguson, Jan. 30, 1935. During a later meeting with Hanson and Manion, Stevens assured them that if the report of the Commission “was a reasonably good one he had no thought of putting in anything contrary to it” and would not go “out of his way to criticize in any shape or form” the legislation based on the report. Manion Papers, R. J. Manion–R. B. Bennett, Feb. 14, 1935.

27 As early as 1933, Bennett had told the American representative in Ottawa that “if far-reaching international solutions are not arrived at this year …, then the orthodox line of action which has been at the basis of his practice of government … must be abandoned.” Bennett added that he had “already drafted a plan of action to be taken in the event of failure of the World Economic Conference–a plan of which even his colleagues in the Cabinet have no knowledge.” See the Chargé in Canada to Under Secretary of State, April 14, 1933, printed in Papers Relating to the Foreign Relations of the United States, 1933 (Washington, 1949), II, 44–6.Google Scholar

28 In speeches at Brockville and Ottawa in December, Bennett had promised that his government would implement the recommendations of the Commission in so far as they were within the legislative competence of the federal Parliament. See Canadian Annual Review, 1934, 32–3.Google Scholar

29 It seems clear that the broadcasts were not discussed in cabinet. In conversation with King, Cahan confirmed this and in a letter on January 10, Manion admitted before the fifth broadcast that he had no “idea as to what he will cover …, as he has done this off his own bat entirely, at least so far as we are concerned.” Manion Papers, R. J. Manion–J. Manion, Jan. 10, 1935.

30 King Papers, W.L.M.K.–G. Case, Jan. 15, 1935.

31 Ibid., Vincent Massey–W.L.M.K., Jan. 12, 1935.

32 Ibid., anon., “Jottings on the New Deal,” Jan. 12, 17, 1935.

33 See Canada, House of Commons, Debates, June 3, 1934, IV, 4581.Google Scholar See also King Papers, W.L.M.K.–E. Lapointe, July 25, 1934. Letters to Lapointe and Ralston on January 8 confirmed this original strategy. King Papers, W.L.M.K.–E. Lapointe and J. L. Ralston, Jan. 8, 1935.

34 King Papers, N. McL. Rogers–W.L.M.K., Jan. 19, 1935.

35 See ibid., W.L.M.K.–H. W. Harris, April 19, 1935; W.L.M.K.–Lady Oxford, April 19, 1935.

36 Dafoe Papers, G. Dexter–J. W. Dafoe, Jan. 21, 1935. Dexter was Ottawa correspondent for the Winnipeg Free Press.

37 Debates, Jan. 22, 1935, I, 66.

38 An example of the use of a question to embarrass occurred on March 15. After a furious exchange between Stevens and Cahan, King innocently asked the latter whether, in view of newspaper reports purporting to outline Stevens' proposals before the Commission, the government regarded the Commission “as a judicial body or … a publicity bureau.” Cahan replied that it was “the view of both sides of the house that this commission is in its character a quasi-judicial body, but it would appear that there are bureaux of publicity outside of the commission from which reports are emanating to the public press,” a not-so-oblique reference to Stevens. See ibid., March 15, 1935, II, 1757.

39 See Report of the Royal Commission on Price Spreads and Mass Buying (Ottawa, 1937).Google Scholar The Liberal memorandum of reservations is at pp. 276–87 and Young's minority report at pp. 288–307.

40 This was certainly the scheme Herridge envisaged. W. D. Herridge was one of the Prime Minister's closest advisers. See Manion Papers, W. D. Herridge–R. J. Manion, May 23, 1935.

41 See ibid., R. J. Manion–J. Manion, March 22, 1935.

42 King Papers, W.L.M.K.–Sir Herbert Samuel, April 20, 1935. Herridge agreed that “our big, beautiful reform child is almost dead.” Manion Papers, W. D. Herridge–R. J. Manion, March 22, 1935.

43 W. D. Herridge had favoured delay in implementing the report. “A month ago,” he wrote, “it was altogether apparent to me that Parliament should never be permitted to legislate upon the Price Spreads Report; and with that report before the country in all its pristine youth and beauty, Parliament should dissolve, and we should go to the country for a mandate to implement that report.” He predicted that any legislation now would be “emasculated.” Manion Papers, W. D. Herridge–R. J. Manion, May 23, 1935.

44 A week later King thought that the American Supreme Court's judgment on the National Industrial Recovery Act vindicated the position he and his party had adopted on the “New Deal” in Canada.

45 A week later, Dexter reported to Dafoe that the “cabinet is fighting like hell.” Dafoe Papers, G. Dexter–J. W. Dafoe, June 3, 1935. Mr. Cahan, the Secretary of State who was in the extraordinary position of using the Leader of the Opposition as a confidant, broke down as he explained to King on May 27 the pressure he was under to introduce amendments to the Companies Act which would please Stevens. King, when he left Cahan, was convinced that a crisis was developing in the cabinet between those who remained loyal to the Prime Minister and to Conservative principles and those who thought that Stevens would assume the leadership. See also ibid., G. Dexter–J. W. Dafoe, May 20 and 23, 1935. The only parallel Dafoe could see to the present difficulties of the Conservative party was the situation in the 1890's. See ibid., J. W. Dafoe–T. King, May 30, 1935.

46 King took this information to mean that Bennett had decided to fight it out with Stevens. In 1938, Bennett admitted that he had intended to retire in 1935, “but “Stevens” action prevented that and I had to remain.” See Beaverbrook, Lord, Friends (London, 1959), 89.Google Scholar See also Wilbur, , “Stevens and Bennett,” 16.Google Scholar

47 King Papers, N. McL. Rogers–W.L.M.K., May 25, 1935.

48 For comments on this aspect of the legislation, see Reynolds, , Control of Competition, 148–9Google Scholar; and Bladen, , Introduction, 233.Google Scholar

49 King had been quite firm in his opposition to a commission. In reply to a letter strongly protesting against the creation of another commission, King stated that he was “cordially in agreement.” “When the right time comes, I hope to be able to say so in a manner which will carry some weight.” King Papers, W.L.M.K.–L. O. Breithaupt, April 18, 1935.

50 Ibid., E. A. Pickering–W.L.M.K., June 1, 1935.

51 Ibid., E. A. Pickering–W.L.M.K., June 8, 1935. Other objections were also discussed and incorporated in a memorandum for King. See also Reynolds, , Control of Competition, 148–9.Google Scholar

52 Stevens privately was “chagrined and disappointed at the insipid measures which came down and purported to implement the Commission's recommendations.” PAC, Stevens Papers, H. H. Stevens–G. T. Hair, June 24, 1935.