Heroes

by Peter C. Newman

  In many important ways, his attitudes ran directly counter to the view of Liberalism prevailing during the St-Laurent- C.D. Howe period, which held that corporate capitalism was at the very centre of Canada’s social order. “The Liberal party,” Gordon told a meeting of the Hamilton and District Liberal Labour Group on April 14, 1967, “must always stand for the average Canadian, for the unorganized and the inarticulate, and not for special occupational groups or social classes.” Such an approach implied that the major share of the benefits flowing from economic growth should not go to the investors, risk takers and corporate managers but should be distributed to less privileged individuals. It was this philosophy that made Gordon a very unusual minister of finance. Instead of deliberately casting himself as the villain of the cabinet—the man who traditionally holds up the spending estimates of his colleagues until they prove to him that their pet schemes are really essential—Gordon was the chief advocate of bold spending proposals. Since this left no minister in the role of defender of the public purse, the Pearson government’s growing budgetary deficits and serious overspending eventually led to a fiscal crisis. The Canadian cabinet system makes no provision for a minister of finance who happens also to be an evangelist.

  ALL OF GORDON’S PECULIAR passions for causes and all the paradoxes in his character were illuminated by the way he went about mounting the major crusade of his public career: his fight to repatriate the Canadian economy. Like the Northern Vision of the Diefenbaker years, his economic nationalism provided the Pearson administration with its most imaginative, and most disappointing, policy venture—imaginative because, like the Diefenbaker vision, it had the potential of endowing Canadian life with a sense of shared national purpose; disappointing because, as in the case of the Northern Vision, intentions far outran accomplishments.

  The economic benefits of American investment in Canada were so overwhelming that any appeal to stop—or in any way control—the influx of such funds ran squarely against the self- interest of many influential citizens, particularly members of the business community. They brought down on Gordon’s head one of the most vicious personal campaigns ever mounted against a Canadian cabinet minister. The businessmen were all the more enraged because they regarded Gordon as a traitor to his class.

  Because Gordon was obsessed with formulating solutions to the problem of foreign ownership, rather than trying to persuade Canadians that a problem existed, economic independence remained an abstract issue. He never effectively replied to those who saw nationalism as an anachronistic evil, and failed to make clear his firm conviction that nationalism is an expression at a group level of the very essence of humanity, its belief in individualism.

  His theories for the economic repatriation of his country had about them a dampening air of calculated vagueness that left much of their originator’s intent to the beholder’s imagination. “We can do the things that are necessary to retain control of our economy and thus maintain our independence,” he insisted. “Or we can acquiesce in becoming a colonial dependency of the United States, with no future except the hope of eventual absorption.” He believed that this was the central issue of our time and that it should be acted on without equivocation or emotion. His aim was statesmanlike: to alter the Canadian economic setting and gradually draw the people behind him in an attempt to recapture control over the nation’s economic destiny. But he could never get enough cabinet ministers on his side to make economic independence a plank in his own party’s platform and was constantly haunted by the fear that if the issue were once rejected by voters, American business corporations would interpret the result as giving them a permanent mandate to expand their Canadian operations.

  Gordon’s policy demands were not extravagant. No developed nation in the world had set fewer limits and regulations on foreign investment than Canada. Gordon only wanted to begin the repatriation process so that at some future date, more stringent measures might not be needed to protect what was left of Canada’s vanishing independence. He believed, with President John F. Kennedy, that “those who make peaceful revolution impossible—make violent revolution inevitable.”

  Boldly, if at times superficially, Gordon challenged accepted beliefs about the place of the nation-state in an increasingly interdependent world. He attempted to head off criticism of his thesis by equating nationalism with patriotism. “In wanting to retain our independence,” he emphasized, “we are no different from the British, the French, the Swiss or the people of other countries, including the United States. Some may call this nationalism, and so it is. It amounts to a proper respect, loyalty and enthusiasm for one’s country, and a legitimate optimism and confidence about its future.”

  Gordon’s suggested cure was a strong dose of government intervention. He wanted to pit the authority of the Canadian state against the power of foreign capital. What gave the issue its cutting edge was Gordon’s awareness that the essence of national independence had become economic power, which in the sixties consisted not only of capital investment, but also of control over new technology. “Gordon had intuitively perceived the import of the new political landscape,” wrote Professor Abraham Rotstein, an astute University of Toronto political economist, in the Tamarack Review. “The age of affluence is only another name for the technological society which is the source of our abundance. The economy is the home of this new technology and what goes on in corporate board rooms has a public significance far exceeding the fate of each individual enterprise. The politics of the new technological society increasingly turns on the question of who makes these crucial corporate decisions.” What Rotstein meant (and Gordon realized) was that the effect of the new technology was to upgrade economic life to the level of a vital national interest and that to lose control over corporate decision making (as Canada was rapidly doing) implied loss of the nation’s ability to exist in meaningful independence. Gordon could not reconcile the two main strains of Canadian Liberalism: the party’s concern over social reform and its barely suppressed desire for economic integration with the United States. The saturating force of the cultural, political and economic compulsions of American civilization was the dominant factor in world politics during the sixties. The Pearson government’s response to this pressure, which could be felt in Canada more than in any other country, was always to avoid trouble, even if the national psyche was damaged in the process.

  American tax laws made it difficult for Americans to give up a significant share of their stock holdings to Canadians. Losses on Canadian operations, for example, could be consolidated with American income for tax purposes only if the parent company retained at least 80 percent ownership of the subsidiary. In the oil and mining industries, U.S. depletion allowances were granted for foreign, as well as domestic, operations, providing full corporate control was maintained. The antitrust laws also put pressure on American firms to maintain a total hold over their Canadian operations. At least one important prosecution under these laws (the Timken Roller Bearing case) had established the precedent that if a U.S. company attempted to direct the production and sales policies of a subsidiary in Canada that was not wholly owned, it would be acting “in restraint of trade.” The simplest protection against such charges was to turn the subsidiary into an outright branch because no firm can conspire with itself. Similarly, the Antitrust Division of the United States Department of Justice did not hesitate to prosecute American companies when their Canadian subsidiaries entered into agreements, perfectly legal under Canadian law, that offended its view of American law.

  The most obvious extraterritorial application of United States laws in Canada was the Trading with the Enemy Act, which prohibited the subsidiaries of American firms abroad from selling any goods or services to Cuba, mainland China or North Korea, even though these sales were perfectly legal under Canadian law. The American regulations employed powerful sanctions: the executives of a parent corporation whose foreign subsidiaries engaged in such trade were held directly responsible and liable to hefty fines and
/or ten years in jail. When the late U.S. secretary of state John Foster Dulles was asked just who would qualify as an “enemy” within the context of this law, he replied: “An enemy is anybody the State Department says is.”

  THE HARSHEST OPPOSITION to Gordon’s nationalistic ideas came from the cabinet’s right-wing ministers and its western members plus another group of non-ideological ministers, who simply regarded Gordon as an irresponsible dilettante whose ideas were jeopardizing party support across the country.

  Outside the cabinet, he was constantly being attacked by Liberals as the man most responsible for the party’s inability to attain a parliamentary majority. Because of his economic nationalism, he was referred to at party meetings in British Columbia as “that tab-collar Castro,” and Stuart Keate, publisher of the Liberal Vancouver Sun, told a meeting of American businessmen: “It’s true that we have some economic nationalists, but any country that can survive three wars, floods, rock slides and other natural disasters, can survive Walter Gordon.” Ross Thatcher, the Liberal premier of Saskatchewan, labelled Gordon “the worst and most dangerous Socialist in Canada.” His very name produced a flush of anger in most businessmen, who privately went beyond the socialist label and seriously debated among themselves whether he might not be “some kind of Commie nut.” E.P. Taylor, speaking from Lyford Cay in the Bahamas, labelled Gordon’s insistence that subsidiaries be forced to sell 25 percent of their equity stock to Canadians as “absolute nonsense, contrary to good business principles, unnatural and monstrous.”

  Throughout the West and to a lesser degree in the Maritimes, Walter Gordon’s theories of economic nationalism were regarded as a thinly disguised cover-up for Toronto protectionism. The influx of foreign capital had done much to free the citizens in both extremes of the country from the detested yoke of the Bay and St. James Streets brand of capitalism. In Gordon they thought they recognized the grip of the Toronto-Montreal industrial establishment, which through its tariff and price-fixing policies, had long exploited the resources of their areas, with minimal returns to the inhabitants, and which was now attempting to reassert its dominance.

  Neither was there any significant support for Gordon’s policies in French Canada. The Quebec nationalist tradition, with its cultural and social roots, was not compatible with Gordon’s economic thesis. The target of French-Canadian nationalists had never been American investment but the economic influence of Montreal’s English-speaking managers. In fact, American dollars were welcomed in Quebec to offset the power of the province’s own English-speaking community. Most of the Quebec ministers in Ottawa, particularly Pierre Elliott Trudeau and Maurice Sauvé, had been fighting Quebec nationalism all their political lives. They could not do battle against one kind of nationalism in their home province without at the same time opposing the Canadian nationalism implied in Gordon’s economic doctrine.

  Walter Gordon’s inability to move the nation in his direction was due to the historic accident that Canada matured into nationhood at a time when the human race was moving, as the eminent critic Northrop Frye pointed out, “towards a postnational world.” In the long jostling of their history, Canadians had never been able to settle the nagging question of whether their northern subcontinent could retain its political sovereignty while espousing only indistinct and not always compatible brands of nationalism. Still, despite the limited success of his nationalistic crusades, Walter Gordon’s time in public life enlarged not just his party, but the nation as a whole. He had three qualities rare in politicians—courage, simplicity and selflessness; they made him for a time the conscience of his country.

  —1968

  Frank Underhill: A Liberal for All Seasons

  THERE CAME A meaningful moment last night during a dinner given at Ottawa’s Rideau Club in honour of Frank Underhill’s eightieth birthday when he said, “I simply cannot understand the view prevalent today that there is something vicious about the Liberal establishment.” Looking around at the smug adherents of that elitist conclave, sitting comfortably in the club’s red leather chairs, peering at their guru through the cigar smoke and nodding their heads, it was hard not to agree.

  However far they may have strayed from Underhill’s ideals, these were the paladins who made this country what it was. The good things and the bad things about it were all their doing. They sold it to the Americans (in order to retrieve it from the British, they were at pains to point out), but they also put into practice their ideal of a humane and relatively progressive society.

  The Underhill dinner was a cozy and very Canadian occasion, with a hundred or so of his friends gathered to pay tribute to one of the most influential thinkers this country had produced. But what was meant as a salute to a great man seemed at times more like a self-congratulatory farewell to a political generation.

  They were all there, the big-L and small-1 liberals (Lester Pearson, Frank Scott, Eugene Forsey, Bob Bryce, Escott Reid and Graham Spry among them) all moving out of public life now and watching their ideology being assaulted—on the outside by the radicals and on the inside by the technocrats. It was a cerebral faith in the power of intellect, a kind of unshakable trust in the reasonableness of man that held this group together and allowed it to transform the country.

  But intellect and good intentions were no longer enough, and Canada was moving out from under them. Pierre Trudeau (who was not included in Underhill’s personal invitation list) was cast in a very different tradition.

  Of all the people there, Frank Underhill himself seemed to be most aware of the fundamental shift in the power structure that was taking place, and with the effortless erudition of a great classical scholar, he delivered the class valedictory. He recounted how, as a young student from Stouffville, Ontario, he had gone to the University of Toronto and discovered the writings of Thomas Hobbes: “I’d give anything if I could open the magic pages of Hobbes again for the first time. It was a genuine conversion. I had seen a new heaven and a new earth. It dawned on me then that I could spend the rest of my life studying politics, and that’s what I’ve done. When I look at all the permanent adolescents in the universities now—the undergraduates, postgraduate students and young staff members who are seeking their identities in confrontation and protest instead of getting down to the tough clarity of books—I can’t be thankful enough that I was born in 1889.”

  In solid Establishment tradition, Underhill gently chided Pearson for having attended the wrong college at Oxford. “If Mike had only gone to Balliol instead of St. John’s, he would never have allowed that loud, rowdy demagogue from Saskatchewan to get going” because, as he reminded all those present, “the mark of a Balliol man is the serene assurance of an effortless superiority.” While at Balliol himself, from 1911 to 1914, Underhill joined the Fabian Society and came under the influence of George Bernard Shaw and H.G. Wells. After spending the war as an officer with the British infantry, he came back to Canada and became a history professor at the University of Saskatchewan, later moving to the University of Toronto. “I returned from the war to find the Prairies on fire with progressivism, and that, in turn, swept me off my feet.”

  Along with half a dozen colleagues who attended the celebratory dinner, Underhill drafted the original Regina Manifesto, which launched the CCF. He broke with socialism twenty-five years later and became a reluctant Liberal. (“At times I have had to hold my nose while marking the ballot.”)

  Though Underhill has written hundreds of provocative articles and reviews, the comment of his which caused the most controversy was an offhand remark he made to the 1940 Couchiching conference. “We now have two loyalties,” he said, “one to Britain and the other to North America. I venture to say that it is the second that is going to be supreme now. The relative importance of Britain is going to sink no matter what happens.” This mild downgrading of the “mother country” caused such an eruption that the university board of governors nearly fired him and the Ontario legislature talked of cutting the university’s provincial grants. (One
MPP called him “a rat trying to scuttle our ship of state.”)

  The case blew itself out when no one could find a stenographic record of Underhill’s remarks. Twenty-two years later, the University of Toronto exonerated him by awarding him an honorary degree. At eighty, Frank Underhill looked back at some of these incidents, and his conclusion was that while his generation accomplished much, it failed to live up to its own ambitions. “We men of the 1930s,” he said, “put too much faith in politics. You can’t have a great politics without a great culture at its base, and we were attempting a great politics with a colonial culture.”

  What he didn’t say is that you also can’t have a great politics without great minds. Frank Underhill is certainly one of them.

  —1970

  Judy LaMarsh: The Gutsy Charmer with Class

  THE QUALITY THAT allows most federal politicians to survive their grimy trade is a profound sense of detachment. Issues and principles dissolve into cynical responses to the call of each passing hour; private lives are relegated to an incidental distraction. Eventually, their souls leak out of them, mixing with the comatose decor of the House of Commons’ neutral walls.

  Judy was different.

  Julia Verlyn LaMarsh had that rare and terrible gift of natural rudeness. Loyal to her friends, merciless to her enemies, generous with herself, above all she was gloriously gutsy, governed by the unvarnished dictates of her feelings. She never tried to hide anything, least of all her emotions, existing within the tumult of her own making, as vulnerable as an open wound. She elevated honesty to a profound moral option. While some of her fellow female politicians insisted that their formal photographs be taken through so many layers of cheesecloth they were made to appear like mummies behind mosquito netting, Judy just stuck out her chins and told them to click away. When she landed at Eskimo Point in the Northwest Territories during the Centennial celebrations, she introduced herself to a group of Inuit by patting her ample hips and exclaiming, “See, I brought my own supply of blubber!” After her helicopter landed on Steele Glacier in the Yukon, she just stood there and yodelled.