There is current in Canada very little accurate information about the evacuation of Japanese from the defence area of the Pacific coast between February and October, 1942. Widely in use across the Dominion, but in the process of change, are the pre-war stereotypes of Japanese character which are still basic to some proposed solutions for the settlement of the so-called Japanese problem. This paper deals with aspects of the problem on which there is no recorded information, namely the reaction of the Japanese people to the handling of the Japanese problem since December 7, 1941.

In the process of working out a status for people of Japanese ancestry in British Columbia, the main historical effort of the Caucasians has been to limit as much as possible their acceptance in British Columbian society. These desires for total rejection have been supported by three major stereotyped rationalizations: the Japanese maintain a low standard of living, the Japanese are penetrating peacefully into this country, and the Japanese are unassimilable. We did not know before the Pearl Harbor attack just how widely these stereotypes were distributed, nor did we know their potency. But as a result of years of agitation and manipulation by politicians together with the breakdown of international security, vague fears, although not always verbalized, came to be widely held. Thus the war crisis made the historically developed stereotypes suddenly effective among many more people than they were before Pearl Harbor. As a result, attitudes based upon traditional conceptions of rights of citizenship and civil liberties were more than neutralized: they were completely ineffective in the presence of individual and organized demands for stringent action, justified by these rationalizations, especially by the one regarding peaceful penetration.

There is much talk in our time about freedom and economists have not been silent on the subject. It is apparent that in discussing the meaning and conditions of freedom they are moving beyond the limits of economics “proper” into the realm of political economy, which as O. H. Taylor has recently pointed out “… involves the latter [economic science] plus all other social or human sciences, plus philosophical, ethical and political reflection, plus thoughtful study of human history.” And since freedom involves value judgments, “ … is itself an ethical category …,” economics, in so far as economists concern themselves with freedom, cannot be regarded as a neutral science. There are deep waters here, deeper than many of freedom's advocates seem to realize. It is argued in this paper that while many economists writing about freedom will pay lip-service to the ideal of political economy as described by Professor Taylor, the strong tendency to remain economic scientists in thought and method is likely to produce in the end a flabbier economics and very little new light on freedom.

An approach very common in economic literature is to identify extremes of (i) freedom in thought and behaviour and (ii) authoritarian control, and then to suggest some happy middle way, preferably one which combines the “best” features of each. Freedom is identified with change, uncertainty and “progress” (these somehow identified with competition in free markets) and its absence with concentrations of power which threaten essential liberties. The problem appears to be that of reconciling liberty with stability, freedom of competition with an unseemly demand for security. To make the best of both worlds there must be some planning for stability, but not too much planning because it is so debilitating. Extremes must be avoided, some compromise sought; it is as simple as that.

In analysing the American and Canadian federal systems it is possible to stress the trends common to both systems or, alternately, to emphasize the differences that distinguish the Canadian from the American experience with federal institutions. Both political systems have persisted with recognizable federal features even while substantial nationalizing developments have occurred in the economies and cultures of the two nations. One leading authority characterizes the kind of federalism that results as “co-operative” in contrast to the older “classical” variety. Others, while noting common trends, stress the greater degree of resistance to centralization found in Canada by use of such labels as “pluralistic federalism,” “double-image federalism,” and “peri-pheralized federalism.” While briefs can be made for affixing one or another label to a system, it seems more useful at this stage to study some of the array of differences between the Canadian and American federal systems. One way to get a rough measure of differences and similarities is to pose a set of questions on federalism to comparable groups of Canadians and Americans. These questions can be designed to determine the respective orientations to their federal systems and their opinions on various provincial (state)-federal problems. In this study the questions were put to members of the Ontario Legislative Assembly and the Michigan Senate.

The generalization of Walter Bagehot that successful administration “depends on a due mixture of special and non-special minds” has lost none of its importance with the passage of time, for the problem of combining competent administration with democratic control is more urgent today than ever before. Bagehot contended that the Cabinet Minister, the “non-special mind,” served a double purpose: he not only enabled a democracy to control the civil service, but he also made a genuine contribution to its administrative efficiency. The specialized civil servant, if left to his own devices, tended to become narrow in outlook, careless of the public convenience, and restricted by departmental routine; and the important secondary function of the Minister was to correct these failings by supplying a fresh mind and a different point of view.

The government of Great Britain still furnishes, as in Bagehot's time, the best practical application of this principle, and the high standards maintained by many of the departments bear testimony as to its essential truth. The need for this interplay of “special and non-special minds” is perhaps best seen in the history of the War Office, a department which by its very uniqueness in several respects presents in exaggerated form both the difficulty of the problem and the virtue of the remedy. The War Office is thus considered not merely as a sample department, but one which places, as it were, a magnifying glass over the general problem of departmental administration elsewhere.

Exchange control can be considered as an extension of the principle of war-time rationing. There is a scarcity of the means available for making payments and therefore purchases abroad are limited. As a result the central authority allocates these resources according to its own list of priorities, instead of leaving the selection of the needs to be satisfied to be determined by competitive bidding in the market. This requires the control of imports and may also be taken to include restrictions on transfers of capital and other foreign payments. Another feature of exchange control—the requisitioning of assets which can be realized for foreign exchange—can similarly be regarded as part of the general policy of commandeering resources necessary for the purposes of war. But a comprehensive system of exchange control involves a further essential feature—the pegging of exchange rates. Theoretically it would still be possible for the central authority to leave exchange rates to be freely determined in the market, although the quantities demanded and supplied were controlled by such methods; for the possible dangers of inflationary increases in domestic prices could be overcome by the use of subsidies to offset exchange depreciation.

However, several important reasons can be given for a country at war maintaining fixed exchange rates. Bear speculators might have a bad effect on the country's prestige especially when the fortunes of war were adverse. Secondly, it is easier to requisition international assets on terms which do not give large windfall profits to the sellers, if extensive depreciation of the currency can be avoided. Thirdly, consideration of the “terms of trade” offers the most substantial ground for maintaining exchange stability. In conditions of total war the resources that are used to produce exports must be reduced to the minimum. For this reason the object of policy must be to achieve the best possible price for a restricted quantity of exports rather than to expand the volume of exports by offering them as cheaply as possible.

Until recently, except in the relatively limited field of industrial production, no measure, in volume terms, of the over-all output of the Canadian economy was available. The estimates of Gross National Product had been published only in current dollars. The release, since 1950, of Gross National Expenditure in constant dollars, and especially the historical series from 1926 to 1950 published early last year, provided economists, statisticians, and the business community in general with an analytical tool of unusual relevance and value.

In recent years, because of violent changes in prices, unadjusted value series, used in isolation, have become increasingly inadequate as indicators of economic trends. Of necessity, interest has shifted to measures of volume. For some purposes, as in studies of productivity and real growth of the economy, constant dollar series provide at least an over-all framework and some generalized magnitudes. I will attempt to describe in this paper the work now being done at the Dominion Bureau of Statistics in the field of real output. The discussion of scope, principles, methods, and problems of the projects involved is preceded by a short summary of the history and background of the work.

The limitations imposed upon the central and provincial governments by the Canadian federal system have been discussed elsewhere in some detail. But almost no attention has been paid to those difficulties of maintaining an efficient structure of local government which arise from the prior existence of two superior tiers of administration. This does not imply that there has been no interest in local government, but that interest has been partial and spasmodic. Many theories have been formed concerning the role of the provinces, but few have examined the proper role of municipalities. There could be no constitutional argument to focus opinion: local government lies unequivocally within the realm of provincial power, and in an age and a country where legal dispute and politics have gone hand in hand, the affairs of roads and sewers, dog-catchers and relieving officers have seemed prosaic and uninteresting. Education is in a class of its own, for it has been elevated to the arena of constitutional conflict. Outside that arena educational administration has been the concern of only a few interested groups.

Local government has no deep historical roots in Canada. It was discouraged by the French administration, and no counterpart to the New England town meeting appeared. After the Revolution, British policy was hostile to any local demonstrations of independent action. Lord Durham regarded this as a major weakness, and Lord Sydenham set about remedying the deficiency.

The historic controversy over the “rights of the subject” has again come into public prominence and gives evidence of being here to stay for a considerable period. The occasion of the new interest in the topic was apparently the notable departure from customary procedures in the espionage cases, but once attention was directed to the issue additional grounds for grave anxiety were found in the treatment of Jehovah's Witnesses in the province of Quebec. It would be a mistake, however, to consider that these particular examples of the invasion of civil liberties reveal a novel form of arbitrary conduct in Canadian government. The essential conditions of the situation have been present in most parts of the country for many years, though generally unobserved and unchallenged. Indeed, the current alarm might easily have been dissipated and the recent events might have been a warning only to the most sensitive if those responsible had expressed the least nominal regret at their mistakes.

In a recent work on constitutional law one finds the chapters prefaced by quotations from Alice's Adventures in Wonderland and Through the Looking-Glass—a feature somewhat startling to the uninitiated but highly refreshing to any student of the Constitution of the British Empire. The complexities of this constitution have not been resolved with the passing of the years, rather have new difficulties arisen through the apparent achievement of autonomy by the Dominions. In search of a constitution there is almost a note of despair in the words of the Inter-Imperial Relations Committee (1926): “it [the British Empire] defies classification and bears no real resemblance to any other political organization which now exists or has ever yet been tried.”

A visitor to the House of Commons during the early days of the second session of the eighteenth Parliament of Canada might well have considered himself in Wonderland. The House had under consideration the abdication of His former Majesty King Edward VIII and the accession of His Majesty King George VI to the throne, and was concerned that rules of law should be followed and constitutional proprieties observed in this Dominion. The discussion called out an amazing variety of opinion. Eminent constitutional lawyers were in disagreement at almost every point. Probably the bewilderment of the average member was pretty well expressed by Mr. J. S. Woodsworth, leader of the Cooperative Commonwealth Federation, when he said: “I confess that as I have listened to the discussion so far I have not been greatly enlightened, but indeed somewhat confused. We have had brought before us a great many legal and metaphysical subtleties. Whether the Crown is unitary or divisible and multiple I do not quite know.” In this article it is proposed to discuss the abdication with reference to the more important legal and constitutional principles involved. No attempt will be made to examine the body of legal learning touching the nature of the kingship. Emphasis will rather be placed on the difficulties and anomalies which have developed along with the evolution of the British Commonwealth of Nations. This will involve a consideration of the propriety of the action of the Parliament and government of Canada in dealing with the situation created by the abdication of His former Majesty.

The primary purpose of this paper is to set out in some detail the writer's recently revised estimates of Canada's balance of international payments during the years of the last war. This is done in Part I, where a brief account is also given of the methods which have been followed in arriving at these estimates. In Part II some observations are made as to the part played in the war-time expansion of the volume of money in Canada by the external factors revealed in the balance of payments and by the methods of war finance.

The information about a country's international economic transactions to which the term “balance of payments” is now usually applied, may be presented in a variety of forms and with much or little detail depending on the taste and particular purpose of the compiler. Official reports usually give at one place the credits, debits, and balance for each item, and group the items into a current and a capital “account.” They may or may not isolate monetary gold and short-term capital movements as a third group. As a basic form from which each user may rearrange the data as he wishes, this is satisfactory, provided ample details are given. In table I, however, the basic grouping is according to receipts, payments, and “balancing” items. Receipts and payments are then each grouped into current and capital “accounts.” From this information the reader may, if he wishes, make a table of the conventional form. Some of the group balances usually included in such a table are given in items 31-36.

In the decade following 1929 all currencies of the world, save the Albanian franc, have undergone either devaluations in terms of gold or exchange restrictions tantamount to devaluations. These changes reflect not only the depreciation of several originally overvalued currencies to equilibrium, but also a nearly complete round of successive depreciations of individual currencies to temporary undervaluation. Each such undervaluation has set in motion forces tending to restore equilibrium, through rising supply and demand schedules in the undervalued-currency country, falling supply and demand schedules in the overvalued-currency countries, counter-depreciation in the latter countries and sometimes adverse tariff action. The proportions in which the effects have been divided among these four channels have differed among countries; consequently with the end of the round of depreciations, the re-establishment of something like equilibrium of exchange rates has come about without having involved equal degrees of devaluation by all countries. Thus the new exchange rates differ from those of 1929 in many ways additional to those necessary to cancel the disequilibrium of that year. That, toward the end of this decade, something like equilibrium of the major exchange rates has been established, is indicated by agreements that sharply limit the possibility of further depreciations to under-valuation and even the possibility of depreciations to counteract over-valuations which may arise in the future from changes in international reciprocal demand, etc. It is now opportune to examine the effects of these depreciations of the past decade upon the prosperity of the countries concerned.

When the executive committee of the Canadian Social Science Research Council met in Ottawa on September 6, 1957, concern regarding the future programme and policy of the Council led it to establish a special committee with Professor S. D. Clark as chairman to give consideration to the kind of support for research which Canadian social scientists appeared to need most. To aid the committee in its task, Professor Clark was asked to visit as many of the universities of Canada as possible. Visits were made to the universities of New Brunswick, Mount Allison, Dalhousie, Saint Mary’s, Acadia, Saint Francis Xavier, Memorial, Laval, McGill, Montreal, Queen’s, Ottawa, Carleton, McMaster, Western, Assumption, Manitoba, Saskatchewan, Alberta, and British Columbia, and to United College and Victoria College. In addition, interviews were arranged with two persons from each of the following institutions: Regina College, Brandon College, and Bishop’s University. The report of the committee was presented to the Council at a special meeting on November 30. In view of the interest which the report aroused, Professor Clark was asked at the meeting to prepare for publication a paper setting forth some of the ideas and thoughts which had found expression in his report to the Council. The paper he prepared is now published as a special supplement to the Canadian Journal of Economics and Political Science, the costs of publication being met by a grant from the Canadian Social Science Research Council. To the University of Toronto which kindly released Professor Clark from his teaching duties during the Fall Term, 1957, and to Professor Clark himself, the Council is deeply indebted.