Rogue Tory

by Denis Smith

  The prime ministership was the first executive office that John Diefenbaker had ever held. “There is great scepticism as to his ability to put together a truly effective Cabinet and administer it with skill,” reported the American ambassador after his initial soundings on June 18.23 Diefenbaker had run a small law office marked by informality and disorganization; he had been a token vice president of the Canadian Bar Association and an officer of the Commonwealth Parliamentary Association, a Kiwanian, and a mason. But he had never directed and managed anything on a national scale except the 1957 campaign - which had been, to a remarkable extent, an emanation of his personality, shaped in combat from the platform. He knew that elections were chaotic dramatic performances rather than orderly processes, and the 1957 campaign gave him fresh confidence that he could dominate the big stage. But that was different from leading a government. In his new role he would have to call upon untested powers and reserves. For his closest advice, he had leant upon a few friends whose political experience was narrower than his own: a few electoral managers in Saskatchewan, a few disciples in Toronto, some legal associates in Vancouver, Winnipeg, and Montreal, and a handful of friendly reporters and editors. Now he would need more help than that.

  His cabinet ministers were untested too. They began their work with a sense of justification. They had fought the campaign to defeat an overbearing and complacent government, and the public had supported their cause. They shared with the leader some impressions about what the government should do: respect voters of all backgrounds and regions, respect the provinces, respect parliament, encourage development, and lower taxes. But they had had scant opportunity to think through the implications of those generous sentiments. In the previous two years they had proved themselves relentless parliamentary critics of a failing ministry, but none of them had sat at a cabinet table or managed a government department. They seemed genuinely humbled by their accession to power and they dedicated themselves earnestly to their tasks. The new government’s tone was soon set by the overawed seriousness and rectitude of John Diefenbaker, Howard Green, and Donald Fleming - just slightly offset by the considerably more rakish charm of George Hees.

  The prime minister was supported by a small political staff, initially of eight persons, transferred from the opposition leader’s office under the direction of an efficient private secretary, Derek Bedson.24 Robert Bryce remained as clerk of the Privy Council and cabinet secretary, his task being to advise the prime minister on policy and to manage the flow of government business. Bryce’s experience and wisdom were indispensable to Diefenbaker from the first moment, and the prime minister recognized at once that he needed him. Bryce was a solid rock round which the tempests often raged. By mid-summer 1957 he was joined by another career civil servant, Basil Robinson, as the prime minister’s foreign policy adviser and liaison with the Department of External Affairs. He had been a foreign service officer for twelve years, with postings in London and Paris as well as Ottawa.25 Both Bryce and Robinson were examples to the prime minister that the senior civil service was something more than a local branch of the Liberal Party, as he had darkly suspected from the opposition front bench.26

  THE COMMONWEALTH CONFERENCE WAS JOHN DIEFENBAKER’S FIRST APPEARANCE on the international stage as prime minister, and he relished it with the enthusiasm of a schoolboy. “Naturally,” he remembered, “I would be greatly impressed by that meeting because the impossible had happened and there had been a change of government in Canada.”27 Three events especially affected him: his speech to the Canadian Club of London, his encounters with Winston Churchill, and his private conversation with the queen after a state dinner at Windsor Castle.

  On Dominion Day he took Mike Pearson’s place as guest speaker to the Canadian Club of London, where he showed impish pleasure in telling his audience a story.

  I said, “This reminds me of the fact that three weeks ago in Trail, B.C., I was speaking there in the rink, and the loudspeaker system was apparently not working very effectively, for I got a notice, a placard that said, ‘Get closer to mike’; and Pearson had been following me or preceding me in this part of the campaign. Very obviously there’d been some arrangement made by the Liberal party that he should and I said, ‘He was here last night and that’s as close to him as I ever hope to be’; but I didn’t realize then that I would be taking his place.”28

  Twice Diefenbaker met his political idol Winston Churchill: first, by invitation at the Churchills’ home in Hyde Park Gate; then again, at a dinner hosted by Prime Minister Macmillan at 10 Downing Street. Churchill was eighty-two, now contentedly weary in retirement but still consuming large quantities of champagne and brandy. When Diefenbaker refused to join Churchill in a snifter of brandy, the old man expressed astonishment that Diefenbaker could be a teetotaller - to which Diefenbaker replied that he was a teetotaller but not a prohibitionist. Olive added defensively: “That’s not quite so. He takes a glass of sherry now and then.”

  Churchill intended to flatter. Lady Churchill told Olive that when Sir Winston heard the Canadian election results “he was so excited he danced.” And when Olive remarked that everyone seemed interested in the outcome, Churchill shook his jowls: “Interested?…Why shouldn’t they be? It’s the most important event since the end of the war.”29

  At Windsor Castle, Queen Elizabeth invited Diefenbaker to see the room used as an office by Elizabeth I.

  We went down quite a long corridor into this room and it’s just as it was left by Elizabeth I. It’s a circular room as I recall it, possibly oval and there’s a fireplace on the north side, and that was the fireplace that the Chancellor, Walsingham, stood by as he got Queen Elizabeth I to sign the death warrant of Mary Queen of Scots; and the Queen described this place and she said, “I often come here”; and I said, “I hope that your reign will be as glorious as hers was,” and she said, “That’s what I’m trying to do. I hope it will be.”30

  Diefenbaker was impressed by the queen’s “phenomenal … comprehensive and extensive” knowledge of politics and world affairs. And he was charmed by her display of interest in him.31

  The conference of Commonwealth prime ministers, which lasted over twelve meetings and eight sitting days from June 26 to July 5, was an occasion for Diefenbaker to meet his fellow leaders and to observe the multiracial gathering at work. Perhaps because it was his first meeting, Diefenbaker recalled it as “the most impressive … of the Commonwealth conferences that I attended. There was a greater spirit of give and take, frank discussions, strong opinions expressed.” But the conference faced no urgent problems. After the recriminations arising from the Suez war, it was a time for reconciliation.

  On a wide range of international issues, the Canadian prime minister offered orthodox comments. He took the NATO line that the only realistic policy towards the Soviet Union was to build an effective common defence. Like his Liberal predecessors, he intended to maintain close cooperation with other members of the Commonwealth. He would sustain Canadian support for the United Nations Emergency Force in the Middle East. He probed for Southeast Asian reactions if mainland China were to be admitted to the United Nations. On disarmament, he raised the possibility of a Canadian offer of “open skies” aerial inspection of the Arctic - a subject of earlier Canadian consultation with the United States. On all these themes he stuck closely to his Liberal briefing papers.

  Despite telling cabinet a few days earlier that he would not do so, Diefenbaker referred to the problems of heavy American investment in Canada and welcomed investment from other countries as long as it was not excessively “speculative.” He urged Britain to assure the conference that if the United Kingdom entered the European Free Trade Area, free entry of Commonwealth agricultural products to Britain would be maintained. In response, the British chancellor, Peter Thorneycroft, said it was Britain’s “firm intention” to maintain existing Commonwealth agricultural preferences.32

  Canada’s only novel contribution was Diefenbaker’s announcement that he intende
d to call a Commonwealth trade conference in Ottawa, to be preceded by a meeting of Commonwealth finance ministers in Canada later in 1957. Here Diefenbaker was harking back to Bennett’s Ottawa conference of 1932. The initiative was greeted sceptically as “Diefenbaker’s scheme” by the Economist and the Manchester Guardian, and probably more doubtfully by the British government itself, which called for a round of preliminary meetings of officials to smoke out Canada’s meaning - or perhaps to scuttle the whole vague project. Britain’s attention, it seemed clear, was already turning to Europe, but Harold Macmillan still hoped to deflect Canada’s new enthusiasm for Commonwealth trade as politely as he could. In the face of scepticism about a trade conference from Australia, New Zealand, and South Africa, Macmillan played the diplomat’s role of peacemaker and gained the conference’s support for a preliminary conference. Diefenbaker was grateful. He took this euphemistic response as evidence that “there was quite a favourable reaction” and pressed on with his plans. Favourable press reaction in London was limited to the Daily Telegraph and the Daily Express, which Diefenbaker, in his days of euphoria, read with rose-coloured glasses. In Canada the press response was widely favourable, although the Toronto Telegram admitted that the prime minister “has not indicated what he intends.”33

  Diefenbaker seemed to make that partly clear to a press conference on July 6 following his return to Ottawa. What he did - perhaps inadvertently -was to add a second proposal to the agenda, something that would dramatize his previous call for a Commonwealth trade conference. Under the headline “Canadian Trade Offer to Britain/ Mr. Diefenbaker’s $625M. Plan for Imports,” The Times of London reported:

  Mr. Diefenbaker, the Canadian Prime Minister, told a Press conference… that Canada had as a planned objective the diversion of 15 per cent of her present imports from the United States to imports from the United Kingdom. Such a diversion would make a substantial difference to trade with the Mother Country without actually hurting trade with the United States.

  He thought Britain could meet Canadian requirements in this field because, with the development of atomic energy for peaceful purposes, Britain’s industrial output would be bound to improve, particularly her exporting capacity. Whether she was interested in the Canadian market, however, was another matter…

  As to the possibility of a Commonwealth trade conference, he was a little vague. The Commonwealth Finance Ministers would be coming to Ottawa on September 17 following the Washington meeting of the International Monetary Fund and the World Bank, and they would examine the situation whereby such a Commonwealth meeting could be convened.34

  Richard Jackson of the Ottawa Journal wrote similarly on July 8, under the headline “Aims to Divert 15% of Canadian Buying to Britain,” that the prime minister had said: “Diversion of 15% of Canadian buying to the British market would make ‘a substantial improvement’ in trade with the United Kingdom without damaging business relations with the U.S.”35 Jackson did not call the proposed diversion a “plan” and left open the possibility that Diefenbaker was doing no more than offering an example, but the headline left less room for doubt. When the prime minister reported to cabinet on the Commonwealth conference later in the day, he did not draw special attention to the issue of trade diversion.

  Canadian and American editorial reactions focused on the 15 percent figure. Canadian comment noted sympathetically that the government was serious about facing the billion dollar trade deficit with the United States, while American responses suggested the need to take a fresh look at the size of the American trade surplus. The Conservative Winnipeg Tribune insisted that “Prime Minister Diefenbaker was not picking figures from the air when he remarked that he would like to see about 15 percent of Canada’s imports from the United States transferred to British suppliers.” It quoted a 1950 statement by the Canadian businessman James S. Duncan that a shift of 15 percent of imports from the United States to the United Kingdom would almost double British exports to Canada. But the editorial added: “So far, details of how a switch … could be effected have not been made public.”36

  As his words reverberated, Diefenbaker took a short holiday in Saskatchewan. When he returned to Ottawa late in July, he told a reporter that his “objective” of a 15 percent transfer of Canadian purchases was “reasonable, equitable and obtainable.”37 Whatever he had intended by his original comment, the figure had hardened with exposure, and he was not retreating from it.

  While the Canadian cabinet formally ignored the prime minister’s remarks, the British cabinet took notice. On July 9 Macmillan told his colleagues that Diefenbaker “had emerged as a man of considerable strength of character and purpose.” Ministers agreed that the Canadian proposal to increase trade should not be neglected, and that Britain’s proposals for a European free trade area would have to be reassessed “to take full account of the initiative by the Government of Canada.”38 Two weeks later the president of the board of trade proposed a positive but prudent response to the “offer by the Prime Minister of Canada to divert $625 millions of Canadian imports from the US to the UK.” He noted that the proportion of total British trade with Canada receiving preferential treatment had fallen since the 1930s and that there might be something to gain in a new trade agreement between the two countries. Both sides, however, would have to make clear what benefits were being offered. If Canada proved “unexpectedly generous … it might even be possible to contemplate the creation of a free trade area embracing the two countries.” Ministers thought it unlikely that Canada would be willing to face the industrial competition of free trade, but agreed that the issue should be further studied. Canada’s initiative would be welcomed in the House of Commons in the next few days.39

  The British cabinet remained sceptical of the proposal for a Commonwealth trade conference, which was now tangled in the talk of trade diversion. But ministers were wary about discouraging a wider trade conference, particularly if nothing were to come of the Anglo-Canadian initiative. “The new Canadian government were well disposed to the UK,” read the cabinet minutes, “and if we failed to respond to their constructive proposals they might encounter serious political difficulties.” Given Britain’s sensitive negotiations in Europe, this was also no time to offend a Commonwealth partner unnecessarily. The high commissioner in Ottawa was told to give no indication to the Canadian government that Britain had reservations about a full Commonwealth trade conference. The line to be taken at the meeting of finance ministers in September was that Britain should “take the lead in endorsing it” if other countries showed any support; and if not, Britain should try to save Canada’s face by proposing continuing talks among officials.40

  By the end of August the British cabinet was carefully calculating its response to the 15 percent initiative. A Canadian memorandum made clear that Canada did not intend any major discrimination against American trade, which was ruled out by the General Agreement on Tariffs and Trade. So the chancellor, Peter Thorneycroft, reflected on the implications of a British free trade offer.

  One way in which such a diversion of trade could be brought about, without involving Canada in a breach of her international obligations, would be for her to enter into a free trade area with the UK. It was true that, in the short term, such a development would yield greater advantages to the UK than to Canada and for that reason it was unlikely that the Canadians would look favourably on such a suggestion. But, even so, it would be good tactics to put it forward, as a safeguard against any criticism that we had failed to respond to the Canadian initiative. If the Canadians rejected the proposal, we might suggest that in return for the removal of the UK’s quantitative restrictions on Canadian imports, Canada should undertake both to reduce her tariffs as far as possible in our favour and to reinforce the sterling area reserves, preferably by agreeing to hold part of her reserves in sterling. In present circumstances the Canadian reaction to this proposal might also be adverse … Failing any agreement … we should have to fall back on relatively minor measures designed to
improve the flow of Anglo-Canadian trade. These, while useful, would have little marked effect.41

  The cabinet agreed to negotiate with Canada on these lines and went on to discuss tactics. Ministers recognized that if Canadian officials learned of the British position before their ministers did, the plan “would be subjected to destructive criticism.” Officials would immediately see the disadvantages for Canada and smother it in private, without even the political benefits of a well-publicized failure. It was better suited for discussion between ministers “on a broad political plane rather than for discussions between officials.” Since there would be little time for ministers to meet bilaterally at the trade talks in September, cabinet agreed that the minister of agriculture, Derick Heathcoat Amory, should broach the plan to Diefenbaker during a visit to Ottawa early in the coming month.42 A few days later George Drew, who had now taken up his post in London, reported that British ministers were keenly interested in increasing trade with Canada in the light of Diefenbaker’s suggestion.43