It's just an exercise, don't worry about it.

December 26th, 1949 -- Szombathely

URGENT - MINISTRY OF THE ARMED FORCES OF THE UNION OF SOVIET SOCIALIST REPUBLICS

As Commander of Army Group Center, the following military formations have been mobilized and instructed to redeploy at forward positions.

• 13th Guards Mechanized Division to redeploy to Kalocsa

As Commander of Army Group Odessa, the following military formations have been mobilized and instructed to redeploy at forward positions.

• 28th Guards Mechanized Division to redeploy to Giroc;
• 86th Guards Mechanized Division to redeploy to Arad

These are regular redeployments that are part of a larger military exercise of the Armed Forces of the Union of Soviet Socialist Republics. Said exercises are to last no more than 12 days, done in coordination with our brotherly nations of Romania and Hungary.

Fraternal Friendship between the Soviet Union and the DPRK: Part II

December 25th, 1949 - Khabrovsk

URGENT -- MINISTRY OF THE ARMED FORCES OF THE UNION OF SOVIET SOCIALIST REPUBLICS

On orders of the Council of Ministers, and the General Secretary of the Communist Party of the Soviet Union, the General Staff has instructed the Foreign Military Assistance Directorate to prepare a second assistance package of hardware to be dispatched to the Democratic People’s Republic of Korea.

The Foreign Military Assistance Directorate is to survey the needs of our Korean comrades, and asses what equipment can be dispatched to the Democratic People's Republic of Korea in their effort to modernize the Korean People's Army.

Equipment to be dispatched:

• 16 BM-13 'Katyusha' Launchers
• 60 GAZ-67 light vehicle
• 300 ZIS-5 trucks
• 1,250 DP-27 Machine Guns

Glory to socialism!

Glory to the Soviet-Korean Friendship!

After fourteen years it was over. The New Zealand Labour Party had lost government and with it, what remained of caucus discipline. Issues that had been spoken about only in whispers were now murmured and those that had been murmured were now yelled loudly in public. Newspapers and radio alike carried word of debates between idealists and pragmatists, leftists and moderates, and of a battle for the very soul of the New Zealand Labour Party. While the factions were complex and ideologies nuanced, two issues came to define the public debate. If you supported conscription and opposed socialist unions, you were branded a moderate, and if you opposed conscription and supported socialist unions you were deemed to be of the left. If a Labour MP's views couldn't be neatly explained through this paradigm then they were publicly branded as either irrelevant or naive.

The public face of the moderate wing was former Finance Minister Walter Nash. He stood behind the First Labour Government's actions and admitted no real fault. Conscription was necessary and socialist unions dangerous, he declared. When pressed on the issues, Nash insisted that the government had been right to ban the communist-aligned Auckland Carpenters’ Union in February 1949, that conscription was a necessary response to insecurity, and that the deployment of Malayaforce had been in New Zealand's interest. Nash's counterpart on the left was former Minister for Public Works, Bob Semple. While Semple, a proud democratic socialist and rabid anti-communist, also supported the decision to ban the Auckland Carpenters’ Union, that was where the two men's alignment ended. On conscription, Semple made his displeasure with the lack of non-military options for national service known and publicly questioned if it was the right policy for New Zealand, given the evolving nature of warfare. Semple also broke ranks and decried calls to deregister socialist unions, arguing that doing so would only drive “decent hard-working people” into the “evil embrace” of communism. Instead, he argued, Labour should embrace socialist unions as part of its base, if only to neutralise the communists.

Amidst the very public debate between two of his closest confidants, former Prime Minister and now Opposition Leader Peter Fraser maintained a policy of studied neutrality. While widely known to sympathise more with Nash, his views having moderated since 1916 when he and Semple were arrested, he refused to publicly comment on the spat. Instead, he focused all his attention on challenging the First National Government, even as his health worsened. When a journalist asked about a comment made by Nash or Semple on policy, Fraser would politely but firmly redirect them to Sidney Holland’s government. It was Holland’s government, he would remind them, that had the power to decide the issues - not Labour - at least for now.

Ottawa, 8–9 November 1949

Following the adoption by the House of Commons of an Address requesting greater constitutional amending authority for the Parliament of Canada, the proposed amendment to the British North America Act, 1867 proceeded to consideration by the Senate.

The Commons had approved the Government's proposal in October, incorporating additional safeguards respecting the annual assembly of Parliament and the ordinary five-year maximum duration of the House of Commons.

The resolution sought to empower Parliament to amend the Constitution of Canada in matters relating to its own federal institutions, while expressly excluding provincial legislative jurisdiction, constitutional rights and privileges secured to the provinces, denominational educational protections, and the use of the English and French languages.

The measure remained controversial. Although the Government maintained that the proposed authority was confined to exclusively federal matters, critics questioned whether Parliament could properly distinguish between its own constitutional arrangements and provisions affecting the wider federal compact without the agreement of provincial governments.

The Senate's consideration therefore represented the final Canadian parliamentary stage before the proposed amendment could be submitted to His Majesty for action by the Parliament of the United Kingdom.

8 November — The Provincial Constitutional Conference

Before the Senate completed consideration of the constitutional Address, the Prime Minister, the Right Honourable Louis St. Laurent, laid before Parliament further correspondence exchanged with the premiers of the ten provinces.

The correspondence concerned the Government's proposal for a Dominion–Provincial conference to examine the establishment of a more comprehensive procedure for constitutional amendment within Canada.

St. Laurent announced that all ten provincial governments had agreed to the opening of the conference at Ottawa on 10 January 1950.

The announcement distinguished the limited constitutional authority presently sought from Westminster from the broader problem of establishing an amending formula applicable to provisions affecting both Dominion and provincial governments.

The Government maintained that Parliament should obtain authority over those constitutional matters lying exclusively within federal jurisdiction, while continuing negotiations with the provinces concerning amendments requiring their participation.

The proposed conference would examine the possibilities for developing a Canadian constitutional amending procedure without prejudging the agreement of the provinces upon any particular formula.

Its announcement did not suspend the Address already adopted by the Commons.

9 November — The Constitutional Address Before the Senate

The Senate proceeded to consider the Address approved by the House of Commons.

The proposed amendment would insert a new class of federal legislative authority into section 91 of the British North America Act, 1867, permitting Parliament to amend the Constitution of Canada from time to time within specified limits.

The principal constitutional question was whether this power could properly be described as concerning federal institutions alone, given the place of the Senate and House of Commons within the constitutional settlement established at Confederation.

Under the proposed arrangement, Parliament would obtain an authority comparable in principle to the power already exercised by provincial legislatures to amend their respective provincial constitutions, subject to existing constitutional limitations.

The amendment did not seek to establish a general Canadian procedure for altering the division of legislative powers between Dominion and province.

Nor would it authorize Parliament to remove the constitutional protections respecting denominational schools, language rights, provincial governments or legislatures.

The additional safeguards adopted by the Commons would also protect the requirement that Parliament meet at least once annually and that no House of Commons continue beyond five years, subject to the existing emergency provision concerning war, invasion or insurrection.

These provisions were especially important in defining the limited character of the new power.

Provincial Rights and the Scope of Federal Authority

The principal objection to the Government's proposal remained the absence of prior provincial concurrence.

While the amendment expressly excluded matters assigned exclusively to provincial legislatures, its critics maintained that certain federal institutions possessed constitutional significance extending beyond their immediate administrative functions.

The Senate itself was established as part of the Confederation settlement, including arrangements for regional representation intended to protect the interests of the constituent provinces.

Consequently, the proposed distinction between federal constitutional machinery and the wider federal compact remained a matter of constitutional interpretation.

The Government's position was that the amendment did not grant unrestricted authority to alter Confederation.

The express exceptions were intended to preserve constitutional rights and provincial jurisdiction, while permitting Parliament to address those aspects of its own organization properly subject to federal authority.

The forthcoming Dominion–Provincial conference was presented as a separate means of resolving the remaining constitutional questions through negotiation.

Parliamentary Safeguards

The Senate also had before it the safeguards incorporated during the Commons proceedings concerning parliamentary sessions and the duration of the House of Commons.

Under the amended Address, Parliament would not acquire authority to abolish the requirement for annual sessions or to prolong the ordinary parliamentary term indefinitely.

The established exceptional provision allowing the continuation of the House of Commons during real or apprehended war, invasion or insurrection would remain preserved, provided that continuation was not opposed by more than one-third of the members of the House.

These restrictions reflected the concern that the acquisition of domestic amending authority should not permit an ordinary parliamentary majority to dispense with fundamental requirements of representative government.

The Senate's Concurrence

Following its consideration of the constitutional Address, the Senate concurred in the request for amendment of the British North America Act, 1867.

The Senate's concurrence completed the parliamentary authorization necessary for the joint Address of the Senate and House of Commons to be submitted to His Majesty the King.

The Address requested that His Majesty cause the necessary legislation to be laid before the Parliament of the United Kingdom, granting the Parliament of Canada limited authority to amend its own Constitution.

The Canadian parliamentary resolutions did not themselves confer the proposed power.

An amendment to the British North America Act remained dependent upon the independent legislative action of Westminster.

The Government accordingly proceeded with the constitutional request while maintaining its intention to consult the provinces upon the broader question of establishing a general Canadian amending procedure.

The Remaining Constitutional Process

With both chambers having considered the proposed amendment, Canada's immediate parliamentary work upon the constitutional Address was complete.

The request would now pass to the United Kingdom for the consideration of the British Government and Parliament.

The proposed measure concerned a limited transfer of constitutional amending authority from Westminster to Ottawa. It did not provide Canada with an unrestricted power to amend every provision of the Constitution, nor did it settle the division of constitutional responsibilities between the Dominion and the provinces.

The St. Laurent Government regarded the measure as one stage in the progressive development of Canada's constitutional autonomy.

The proposed Dominion–Provincial conference in January 1950 would provide a further opportunity to examine the remaining difficulties.

The constitutional amendment remained subject to enactment by the Parliament of the United Kingdom and had not yet entered into force.

Ottawa, 1–18 November 1949

The House of Commons turned its attention to the condition of the Royal Canadian Navy following the publication of a commission of inquiry into a succession of disciplinary disturbances aboard three Canadian warships earlier in the year.

The disturbances, occurring aboard HMCS Athabaskan, HMCS Crescent, and HMCS Magnificent during February and March 1949, had raised serious questions concerning naval discipline, the administration of personnel, and the ability of Canada's postwar fleet to meet its operational responsibilities. Although none had involved the violent seizure of a vessel, the collective refusal of sailors to obey lawful orders had attracted considerable public attention.

In response, the Minister of National Defence, the Honourable Brooke Claxton, had appointed a commission chaired by Rear-Admiral E. R. Mainguy, with Leonard W. Brockington, K.C., and Louis C. Audette serving as commissioners.

The commission's investigation extended beyond the immediate incidents. Having examined the evidence of 238 witnesses, it considered the organization of naval training, the treatment of ratings, conditions of service, relationships between officers and men, and the continuing influence of British naval practices upon the Royal Canadian Navy.

Its report, completed in October, rejected suggestions that the disturbances had resulted from an organized communist conspiracy. Instead, it identified a combination of administrative failures, poor communications, inadequate grievance procedures, and dissatisfaction with conditions of service.

The findings presented the St. Laurent Government with the task of restoring confidence in naval administration while maintaining the discipline necessary for an effective fighting service.

1 November — The Commission's Report Presented to Parliament

The Minister of National Defence rose in the House of Commons to announce that the commission appointed to investigate the disturbances had completed its work.

Claxton expressed the Government's appreciation to the commissioners and informed members that their recommendations were under examination. He noted that several measures had already been undertaken before the report's completion, while others remained in the process of implementation.

Although the inquiry concerned matters of internal military administration which might ordinarily have been treated as confidential, the Government had determined that publication was in the public interest.

Hon. Brooke Claxton (Minister of National Defence): "Mr. Speaker, the report now before the House concerns not merely three regrettable incidents aboard His Majesty's Canadian ships, but the conditions under which the men of our naval service are expected to carry out their responsibilities. The commission has examined these matters with care, and the Government regards its recommendations as a constructive contribution to the strengthening of the Royal Canadian Navy."

The Minister emphasized that the commission had distinguished between the obligation to maintain naval discipline and the responsibility of the naval authorities to ensure that legitimate complaints could be properly heard.

Hon. Mr. Claxton: "There can be no uncertainty regarding the necessity for obedience to lawful orders in a fighting service. Nevertheless, discipline is most effectively maintained where officers understand the circumstances of their men, where grievances receive proper consideration, and where the organization of the service commands the confidence of those who serve within it."

The report was accordingly tabled for the consideration of Parliament.

The Incidents Aboard Athabaskan, Crescent, and Magnificent

The commission had investigated three separate disturbances occurring within approximately three weeks.

HMCS Athabaskan — 26 February 1949

While the destroyer was at Manzanillo, Mexico, a substantial group of junior ratings refused to resume their ordinary duties until grievances could be heard by their commanding officer.

The complaints concerned shipboard conditions, the distribution of duties, and the treatment of personnel. Following direct intervention by the commanding officer, the men returned to their duties without violence or an attempt to seize control of the vessel.

HMCS Crescent — 15 March 1949

While operating in Chinese waters, HMCS Crescent experienced a similar refusal of duty among junior ratings.

The incident arose from dissatisfaction with the administration of the ship and the circumstances under which personnel were required to serve. The commanding officer heard the men's complaints, and the disturbance was resolved without violent confrontation.

HMCS Magnificent — 20 March 1949

The aircraft carrier HMCS Magnificent, then operating in the Caribbean, experienced a brief refusal of duty involving members of her aircraft-handling personnel.

The immediate dispute concerned shipboard work and routine, but the inquiry also examined complaints involving accommodation, sanitation, and the general conditions under which the carrier's company lived and worked.

The commission did not find that the three incidents formed part of a coordinated revolutionary or communist undertaking.

Rather, the disturbances exposed a wider accumulation of dissatisfaction among personnel who believed that ordinary channels of communication had proved ineffective.

The commissioners nevertheless maintained that a grievance, however legitimate, could not justify collective disobedience aboard a warship.

The Findings of the Commission

The commission identified a number of interrelated problems contributing to the deterioration of discipline and morale.

Personnel, Training, and Operational Demands

The report concluded that the manpower and material resources of the Navy had been stretched excessively.

The postwar service was required to maintain operational commitments, train new personnel, and reorganize its establishments while operating with a limited supply of experienced officers, petty officers, and trained ratings.

Frequent changes in ships' companies and routines had compounded these difficulties, particularly when affected personnel received inadequate explanations.

The commissioners recommended that operational commitments be more closely related to the actual availability of trained manpower and suitable equipment.

They also called for greater attention to the provision of training ships, the preparation of junior officers, and the professional education of chiefs and petty officers.

The Divisional System

Particular criticism was directed at the deterioration of the naval divisional system.

Under this arrangement, officers were expected to maintain regular contact with the ratings under their charge, supervise their training and welfare, and provide an accessible channel through which grievances might be presented.

The commission found that the system was not functioning satisfactorily in all parts of the service.

Some officers had become insufficiently acquainted with the circumstances of their men, while ratings frequently believed that complaints would receive little consideration until dissatisfaction assumed a more serious form.

The report recommended restoration of the divisional system as a central instrument of personnel administration.

Welfare Committees and Grievance Procedures

The commissioners found that the absence or ineffective operation of welfare committees had contributed to the accumulation of minor grievances.

Complaints concerning accommodation, food, leave, recreation, equipment, and shipboard routine were not always being addressed before they became causes of broader dissatisfaction.

The report recommended the effective establishment of welfare committees, through which legitimate concerns could be raised without recourse to collective refusal of duty.

Such arrangements would operate under naval authority and would not diminish the responsibilities of commanding officers.

The commissioners argued that regular consultation and the proper ventilation of grievances were compatible with the maintenance of discipline.

Headquarters Administration

The commission also criticized aspects of the administration of Naval Headquarters.

Certain important administrative appointments had not consistently been regarded as posts requiring officers with the highest qualifications and professional experience.

The report suggested that personnel administration, training, and welfare functions required capable and permanent attention rather than treatment as secondary appointments within the naval establishment.

These findings raised broader questions regarding the efficiency of the naval command structure and the supervision exercised by the Department of National Defence.

Conditions of Service

The commission considered the adequacy of barracks, married quarters, sanitary facilities, clothing arrangements, leave, transportation, medical services, and allowances.

Although some deficiencies could be remedied through revised regulations or improved administration, others would require additional accommodation, equipment, personnel, and financial resources.

Among the matters recommended for further consideration were improved welfare arrangements, medical assistance for dependants, additional allowances, and greater attention to the difficulties experienced by married servicemen and their families.

The Canadian Character of the Navy

A further finding concerned the continuing predominance of British customs and institutional traditions within the Royal Canadian Navy.

The commissioners recognized the importance of the Royal Navy in the historical development of Canada's naval service and the considerable professional benefits derived from that association.

Nevertheless, they considered that certain inherited practices were insufficiently adapted to Canadian conditions.

The report recommended a more distinctly Canadian naval identity, including recognizable national insignia, improvements to Canadian officer-training arrangements, and the development of professional traditions suited to the country's own naval establishment.

This did not imply an end to cooperation with the Royal Navy.

The commission instead sought to ensure that Canadian officers and ratings served within institutions whose character reflected their country's independent responsibilities.

3 November — Drew Calls for Parliamentary Oversight of National Defence

The report soon entered the wider parliamentary debate over the administration and expenditure of the Department of National Defence.

During the continuing debate upon the Government's financial programme, the Leader of the Opposition, Mr. George Drew, argued that the findings demonstrated the inadequacy of existing parliamentary arrangements for scrutinizing the armed services.

Drew particularly emphasized the commission's criticism of administrative appointments and the need for Parliament to obtain reliable information concerning the organization, readiness, and expenditure of Canada's defence forces.

Mr. George Drew (Leader of the Opposition, Carleton): "Mr. Speaker, the report of this commission presents this House with questions which extend considerably beyond the three vessels upon which these incidents occurred. We have been informed that important administrative positions within the naval service were not invariably occupied by those best qualified to discharge their responsibilities. If such conditions have existed in the Navy, members of Parliament must be entitled to inquire whether corresponding weaknesses exist elsewhere in the defence establishment."

Drew argued that the establishment of a single Department of National Defence did not, by itself, demonstrate that the three services were being efficiently coordinated.

Nor, he maintained, could statements concerning administrative economy substitute for independent parliamentary examination.

Mr. Drew: "The Government has repeatedly assured this House that the coordination of our armed services has produced greater economy and efficiency. Yet the commission appointed by the Minister himself has identified serious defects in one of those services. Parliament cannot discharge its responsibility merely by accepting assurances that all is well. We must possess the means of examining the facts upon which those assurances are founded."

The Leader of the Opposition accordingly renewed his proposal for a standing parliamentary committee on national defence.

Such a committee, composed of members from the several parties represented in the House, would be authorized to examine the organization, administration, equipment, and requirements of the armed services and to hear evidence from appropriate military and departmental authorities.

Drew drew attention to the proceedings of the United States Congress, where legislative committees had recently examined competing claims concerning aircraft, naval construction, strategic planning, and the relative requirements of the military services.

He did not propose that Canada abandon the principle of ministerial responsibility, but maintained that Parliament required more effective instruments of inquiry.

Mr. Drew: "The establishment of a committee does not relieve the Minister of his responsibility to this House. It supplies members with the information necessary to judge whether that responsibility is being properly exercised. We are asked to authorize hundreds of millions of dollars for national defence, yet we possess no adequate machinery for examining the efficiency with which those funds are employed."

Drew further observed that Parliament had already established arrangements for investigating matters concerning atomic energy.

He argued that there could be no sufficient objection in principle to comparable parliamentary scrutiny of the broader defence establishment.

The proposal did not result in the immediate creation of a standing defence committee.

Nevertheless, the commission's findings had become part of a larger dispute concerning the relationship between Parliament, Cabinet, and the professional military authorities.

18 November — The Defence Estimates and the Government's Response

The House returned to the subject during consideration of the Department of National Defence Estimates.

The debate followed the circulation of the Government's statement on Canada's defence programme, and members examined the organization of the armed services against the requirements of continental defence and Canada's obligations under the North Atlantic Treaty.

Mr. Drew renewed his criticism of the Government's administrative arrangements.

He questioned whether the Department's claims concerning coordination and efficiency could be reconciled with the weaknesses identified by the Mainguy Commission.

Mr. Drew: "Mr. Chairman, the Government has referred to the progress made in bringing the three services under a coordinated administration. But coordination cannot be judged merely by the number of departments brought under one Minister or the form in which their Estimates are presented. It must be judged by the competence of the organization itself. The evidence before us concerning the Royal Canadian Navy shows why closer examination is indispensable."

Drew again urged the establishment of a standing committee through which members could question responsible officials and examine military requirements before approving future appropriations.

The Minister of National Defence opposed the proposed committee insofar as its examination would transfer responsibility for the organization and direction of the armed services from the Government to a parliamentary body.

Hon. Mr. Claxton: "Mr. Chairman, the Minister of National Defence is responsible to Parliament for the administration of the services, and the Government must accept responsibility for the policies under which those services are maintained. Parliament possesses the authority to examine and criticize those policies and to determine the funds made available for their execution. But the management of the forces cannot be divided between the responsible Minister and a parliamentary committee without creating uncertainty as to where executive responsibility ultimately rests."

The Minister maintained that considerable progress had already been achieved through the establishment of common departmental arrangements, interservice committees, centralized procurement, and coordination of research and supply.

Drew rejected the implication that his proposal would place Parliament in direct command of the armed forces.

He maintained that a committee exercising investigative and advisory functions would strengthen rather than weaken ministerial accountability.

The dispute was left unresolved, and no standing defence committee was established during these proceedings.

Balcer Demands an Accounting of the Recommendations

The debate subsequently returned to the specific recommendations of the Mainguy Commission.

Mr. Léon Balcer, the Progressive Conservative member for Trois-Rivières, recalled that the Minister had undertaken to explain what measures had been taken following publication of the report.

Mr. Léon Balcer (Trois-Rivières): "Mr. Chairman, the Minister informed the House earlier this month that the recommendations of the commission were being examined and that certain measures had already been undertaken. May we now have an account of the recommendations which have been accepted, those which have been implemented, and those upon which the Government has reached a different conclusion?"

Claxton agreed to provide a summary organized according to the recommendations contained in the report.

Manpower, Training, and the Divisional System

The Minister accepted the commission's finding that naval manpower and material resources had been stretched too far.

He stated that measures had already been taken to correct the imbalance between commitments and available resources.

Additional attention was being given to the employment of training ships and the organization of instruction for naval personnel.

The Minister further reported that improvements to the divisional system and the operation of welfare committees had already been ordered.

Hon. Mr. Claxton: "The commission's observations regarding the divisional system and the necessity for adequate means of presenting grievances are accepted. Orders have been issued, and it is the intention of the naval authorities and of the Department that these arrangements shall operate effectively in practice. A regulation which exists only upon paper contributes little to the welfare of the service."

Training arrangements for officers, chiefs, and petty officers had also been revised or placed under examination.

Claxton expressed particular support for extending the period of instruction at Royal Roads and for more closely integrating theoretical education with practical naval experience.

The Government favoured the development of a Canadian system of officer training, with practical instruction aboard Canadian vessels wherever suitable arrangements could be established.

It did not, however, accept the commission's suggestion that Canadian officer cadets should be diverted to American warships during the early stages of their training.

Hon. Mr. Claxton: "It is our intention that Canadian officers should receive their fundamental training within a Canadian system and, wherever practicable, aboard Canadian ships. We shall continue to benefit from advanced instruction and professional experience obtained in cooperation with the Royal Navy and the United States Navy, but that cooperation ought to supplement a Canadian training establishment rather than replace it."

The Minister acknowledged that the development of additional Canadian training facilities would require time and expenditure.

In the interim, certain specialized forms of instruction, particularly those involving naval engineering, would continue to depend upon existing arrangements overseas.

Welfare, Accommodation, and Allowances

Claxton next addressed the commission's proposals concerning the conditions under which sailors and their families lived.

The Government recognized the need to improve barrack accommodation and married quarters at the principal naval establishments, particularly Halifax and Esquimalt.

Construction programmes were being advanced within the resources and facilities available, although the Minister emphasized that the availability of land, municipal services, and construction capacity imposed practical limitations.

Proposals concerning free transportation, medical services for dependants, clothing allowances, additional remuneration for responsibilities, and good-conduct payments remained under consideration.

The Minister cautioned that some of these measures could not be considered exclusively in relation to the Navy.

Changes affecting the allowances and benefits of naval personnel might require corresponding consideration for the Army and Royal Canadian Air Force.

Hon. Mr. Claxton: "The Government recognizes the importance of the conditions under which service personnel and their dependants live. We must nevertheless examine the implications of each proposal for the three armed services as a whole. It would be unwise to establish arrangements for one service without considering the consequences for the others and the expenditure involved."

The Minister indicated that certain recommendations could not be accepted in their proposed form.

The suggestion that a fixed proportion of canteen profits should be compulsorily transferred to the Canadian Naval Service Benevolent Trust Fund was regarded as impracticable, since the disposition of those profits properly concerned the personnel whose purchases had generated them.

The Government also declined to adopt the proposed extension of dependants' allowances to additional categories beyond the existing arrangements, considering it inconsistent with general Government policy.

Other matters, including the carriage of civilian clothing aboard small warships and the provision of additional medical facilities, remained subject to practical examination.

The Relationship Between Officers and Men

The Minister accepted the commission's general criticism of the deterioration of relations between officers and ratings.

He nevertheless emphasized that such difficulties could not be corrected by the simple promulgation of additional regulations.

The quality of leadership, the conduct of officers and petty officers, and the confidence of sailors in their immediate superiors would require sustained improvement throughout the service.

Hon. Mr. Claxton: "It is possible to alter regulations, establish committees, and improve facilities by administrative action. The relationship between officers and men is a more difficult matter. It depends upon the character of leadership exercised every day aboard His Majesty's ships. The Government accepts the general direction of the commission's recommendations, but their complete fulfilment must necessarily be a continuing undertaking."

The Government therefore intended that officer education, divisional administration, and the supervision of personnel should receive continued attention from Naval Headquarters and commanding officers.

The Minister further supported improved communication of naval policy to personnel affected by administrative decisions and changes in routine.

Canadianization of the Royal Canadian Navy

The Government also accepted the commission's recommendation that Canadian naval personnel should possess a more visible national identification.

Claxton announced that arrangements were being developed for recognizable Canadian insignia upon naval uniforms, either in the form of shoulder badges or another suitable distinguishing mark.

The Minister maintained that the adoption of national insignia would not diminish the Navy's professional association with its British and Commonwealth counterparts.

Hon. Mr. Claxton: "The men and officers of the Royal Canadian Navy serve His Majesty as Canadians, under the authority of the Government and Parliament of Canada. It is appropriate that their national character should be plainly recognized. This may be accomplished without sacrificing the traditions of naval service or the close cooperation which we have enjoyed with the Royal Navy."

The development of Canadian training establishments and the progressive strengthening of Canadian personnel administration would accompany these measures.

The Government did not propose an immediate wholesale abolition of established naval customs, ranks, or professional practices.

Instead, reforms would be introduced progressively, with attention to operational requirements and the need to maintain cooperation with allied services.

The Government's Position and the Continuing Work of Naval Reform

The parliamentary proceedings established substantial agreement that the difficulties identified by the commission required correction.

The Government accepted the principal findings concerning personnel shortages, inadequate grievance procedures, deficiencies in the divisional system, training arrangements, and the need for improvements in naval welfare and administration.

A number of measures had already been put into effect or ordered before the commission's report was completed.

Other recommendations, particularly those concerning accommodation, allowances, additional training facilities, and personnel benefits, remained subject to departmental examination and the availability of funds.

Certain proposals were rejected or modified where the Government considered them impracticable or inconsistent with arrangements applicable to the armed services as a whole.

The House did not enact a new naval reform statute during these proceedings, nor did it vote upon the commission's recommendations individually.

The principal dispute remaining between the Government and the Opposition concerned parliamentary supervision of national defence.

Mr. Drew and the Progressive Conservative opposition continued to advocate a standing defence committee empowered to investigate the organization and administration of the armed services. Mr. Claxton maintained that executive responsibility for military planning and administration must remain with the Government and the Minister answerable to Parliament.

The Mainguy Commission consequently marked the beginning of a broader programme of administrative and personnel reform rather than the immediate completion of that undertaking.

With Canada's naval responsibilities expanding under the North Atlantic Treaty, the Government considered the maintenance of an efficient and disciplined Royal Canadian Navy essential to national defence.

The reforms initiated following the commission's report would proceed under the direction of the Minister of National Defence and the naval authorities, with their progress remaining subject to parliamentary examination through the ordinary consideration of departmental policy and expenditure.

Ottawa, 4–20 October 1949

The House of Commons turned its attention to the proposed route of the Interprovincial Pipe Line, the undertaking established earlier in the year through the joint participation of Petro-Canada and Imperial Oil Limited.

The pipeline was intended to carry petroleum from the newly developed oilfields of Alberta to markets in the Prairie Provinces and central Canada, reducing dependence upon imported crude oil and providing western producers with access to larger consuming markets.

The project's original construction plans contemplated a route extending eastward from Edmonton through Regina before crossing into the United States and terminating at Superior, Wisconsin. From there, petroleum could be transported across the Great Lakes to Canadian refining centres, including Sarnia.

An alternative route, passing through Winnipeg and terminating at the Canadian Lakehead at Port Arthur and Fort William, had attracted considerable public and parliamentary interest. Its supporters maintained that Canada's principal eastward petroleum artery should remain upon Canadian territory, providing industrial and transportation benefits to Manitoba and northern Ontario.

The question placed the commercial calculations of the pipeline company against the wider national-development objectives of Parliament.

4 October — The Question of the Pipeline Terminus

The question was raised in the House concerning the proposed termination of the pipeline at Superior rather than Port Arthur or Fort William.

Mr. Howard Green, the Progressive Conservative member for Vancouver—Quadra, argued that the selection of an American terminus would deprive Canadian communities of an important opportunity for industrial development.

Mr. Green (Vancouver—Quadra): "We are considering something more important than the mere transportation of oil from one point to another. The discovery of petroleum in Alberta offers Canada an opportunity to establish a great industry of her own. Surely the principal pipeline carrying that petroleum eastward ought to be constructed upon Canadian soil, and surely the benefits arising from its operation ought to accrue, so far as practicable, to Canadian communities."

Green maintained that Winnipeg, Fort William and Port Arthur possessed substantial claims to consideration as industrial and transportation centres.

The Right Honourable C. D. Howe, Minister of Trade and Commerce, defended the route selected by Interprovincial Pipe Line and approved by the Board of Transport Commissioners.

Howe argued that the purpose of the undertaking was to transport Alberta petroleum to markets at the lowest practicable cost. The additional expense of an exclusively Canadian route would ultimately fall upon producers and consumers through higher transportation charges.

Rt. Hon. C. D. Howe (Minister of Trade and Commerce): "The purpose of this pipeline is to bring Alberta oil to market. It must be remembered that the cost of constructing and operating the line is reflected in the price which the producer ultimately receives. We cannot simply add millions of dollars to the undertaking and suppose that the cost will disappear. It must be paid by somebody, and under ordinary commercial arrangements it will be paid through the transportation charges upon the oil."

The Minister observed that Canadian petroleum had long been transported through facilities crossing the international boundary, and that the existing commercial relationship with the United States did not in itself compromise Canada's ability to obtain petroleum supplies.

Howe further argued that the American route offered better opportunities for securing the necessary capital and access to markets.

The additional cost of the Canadian route was estimated at approximately $10,000,000 in initial construction expenditure, together with higher operating expenses.

Rt. Hon. Mr. Howe: "It would be a curious method of assisting the petroleum industry of Alberta to insist upon a more expensive transportation system merely because the shorter and cheaper route happens to pass through the United States. The Government must consider the actual cost of carrying oil and the market which it is intended to serve."

Green rejected the suggestion that commercial efficiency ought to be the sole consideration.

Mr. Green: "The question is whether the additional expenditure is justified by the permanent advantages of maintaining the principal transportation of Canadian petroleum within Canada. We have spent large sums upon railways, highways and other undertakings because they were necessary to the development of the country. I do not believe that the same consideration should be denied to this great new industry."

The exchange revealed considerable disagreement within the House concerning the route selected by the pipeline company.

6 October — Winnipeg and the Canadian Lakehead

Debate continued with attention directed toward the industrial implications of the proposed route.

Members representing Manitoba and northern Ontario maintained that the American route would bypass established Canadian transportation centres and reduce opportunities for petroleum storage, refining, shipping and associated industry.

Mr. Stanley Knowles, the CCF member for Winnipeg North Centre, argued that the construction of a pipeline through Manitoba would create opportunities extending beyond the operation of the line itself.

Mr. Knowles (Winnipeg North Centre): "Winnipeg has long occupied an important place in the transportation and commercial life of western Canada. We are now presented with an opportunity to establish a new industrial activity serving Manitoba and the surrounding provinces. It would be unfortunate if the chief consideration determining the route of this undertaking were a comparatively small saving in the initial cost of construction."

The Leader of the Opposition, Mr. George Drew, questioned whether the Government had sufficiently considered the national interest when approving the company's preferred route.

Mr. Drew (Carleton): "The Minister of Trade and Commerce has presented the argument for the lowest immediate cost. But Parliament must consider whether the cheapest route upon paper is necessarily the most advantageous route for the Dominion. The development of Canadian petroleum resources should be accompanied by the development of Canadian facilities for their transportation, processing and distribution."

Howe maintained his position.

He cautioned that the Government should not commit public funds merely to compensate a commercial undertaking for selecting a more expensive route.

Rt. Hon. Mr. Howe: "I have no objection to the construction of a pipeline through Winnipeg or to the Canadian Lakehead if the traffic and revenue will support it. What I question is the wisdom of requiring the company to undertake a more expensive route and then calling upon the Treasury to make good the difference. We must have regard to the economics of the undertaking."

The dispute increasingly concerned not whether the Canadian route could be constructed, but whether Parliament would provide the financial assistance necessary to make it practicable.

11 October — Parliament Considers Federal Financial Assistance

As the controversy continued, members supporting the Canadian route argued that the additional expenditure need not be imposed entirely upon the pipeline company or Alberta petroleum producers.

The Government's existing financial participation in Petro-Canada, including its acquisition of Imperial Oil, had already established a substantial federal interest in the development of the petroleum industry.

Opposition members maintained that this interest justified the provision of additional financial security for a pipeline route serving national development.

Mr. Drew proposed that the Government examine the use of federal guarantees and other appropriate financial instruments to assist Interprovincial Pipe Line in financing the additional construction required by an exclusively Canadian route.

Mr. Drew: "If the principal objection to the Canadian route is the additional capital which it requires, then Parliament ought to examine whether that burden can be met through the credit of the Dominion. We are not suggesting that commercial considerations should be disregarded. We are suggesting that a national advantage may justify the provision of financial assistance which would not otherwise be available to a private undertaking."

Mr. Coldwell, Leader of the CCF, supported the principle while urging that any public assistance be accompanied by appropriate conditions.

Mr. Coldwell (Rosetown—Biggar): "If the public credit is to be employed in financing the construction of this pipeline, the public must receive adequate protection. We should not simply provide a guarantee and leave the conduct of the undertaking entirely beyond examination. The Government already possesses a substantial interest in the petroleum industry, and that position ought to be employed to secure both the development of Canadian resources and the protection of the public investment."

The Minister of Finance, the Honourable Douglas Abbott, advised the House that financial guarantees would have to be distinguished from direct appropriations.

He noted that a Dominion guarantee of properly issued securities could reduce financing costs without necessarily requiring an immediate expenditure from the Consolidated Revenue Fund.

Nevertheless, such guarantees would create contingent obligations requiring Parliamentary authority and financial supervision.

Hon. Douglas Abbott (Minister of Finance): "A guarantee does not represent the same financial transaction as an appropriation for expenditure. It does, however, involve an obligation of the public credit, and Parliament must be informed of the extent and terms of that obligation. If the House determines that the additional cost of a Canadian route is justified, the Department of Finance can examine the means by which the necessary capital may be secured without imposing an undue burden upon the ordinary revenues of the Dominion."

Howe continued to maintain that the original route represented the more economical commercial proposal.

14 October — Provincial Cooperation

The Government entered into discussions with the Governments of Alberta, Saskatchewan, Manitoba and Ontario concerning the additional requirements of a Canadian pipeline.

The proposed arrangements contemplated cooperation in securing rights-of-way, coordinating permits and surveys, assisting the financing of eligible works, and providing the transportation and terminal facilities necessary for the line's operation.

The Prairie Provinces would coordinate the administrative arrangements associated with construction across their respective territories.

Manitoba undertook to support the development of the Winnipeg facilities, including the coordination of municipal services and industrial land required for the pipeline and associated petroleum installations.

Ontario agreed in principle to assist with the development of the Canadian Lakehead terminus at Port Arthur and Fort William, including improvements to petroleum storage, handling and related transportation facilities.

The participating provinces further indicated their willingness to examine financial contributions, guarantees or other forms of assistance within their respective powers and subject to the necessary provincial authorizations.

These undertakings were intended to reduce the additional costs and administrative difficulties associated with the Canadian route.

The Government maintained that provincial assistance would supplement rather than replace the commercial obligations of Interprovincial Pipe Line and its shareholders.

18 October — The House Declares for an All-Canadian Route

When the matter returned to the House, the Government reported the progress of discussions with the provincial authorities.

The Prime Minister, the Right Honourable Louis St. Laurent, acknowledged that the commercial objections raised by Mr. Howe were substantial.

Nevertheless, he observed that Parliament had expressed a clear preference for a Canadian route and that provincial participation had altered the financial circumstances under which the project might proceed.

Rt. Hon. Louis St. Laurent (Prime Minister): "The Minister of Trade and Commerce has properly placed before the House the economic considerations which governed the original proposal. Those considerations must not be disregarded. But the question has also been raised whether the advantages of maintaining this important undertaking upon Canadian territory warrant the provision of additional financial security and the cooperation of the provincial governments."

The Prime Minister stated that the Government would accept Parliament's determination, provided that the revised undertaking could be financed upon reasonable terms and that the additional obligations were properly defined.

A resolution was accordingly moved expressing the opinion of the House that the principal eastward pipeline from Alberta should follow an all-Canadian route through Saskatchewan and Manitoba to the Lakehead at Port Arthur and Fort William.

The resolution further called upon the Government to negotiate the necessary financial and administrative arrangements with Interprovincial Pipe Line and the participating provincial governments.

Mr. Howe maintained his objection to the increased expenditure.

Rt. Hon. Mr. Howe: "I remain of the opinion that the route originally approved is the more economical means of bringing Alberta petroleum to its markets. If Parliament wishes to adopt the alternative, it must understand that the additional costs are real and that somebody must undertake responsibility for them. I trust that the financing now proposed will be examined with that fact clearly in mind."

Members supporting the resolution argued that the proposed guarantees and provincial contributions answered the principal financial objection.

The House adopted the resolution in favour of an all-Canadian pipeline route, notwithstanding the objections of the Minister of Trade and Commerce.

The resolution represented a declaration of parliamentary policy and an instruction to the Government to pursue the necessary arrangements. It did not itself amend the company's construction authority, appropriate funds or constitute a final construction contract.

20 October — The Government Announces the Revised Pipeline Programme

Following the decision of the House, the Government announced that the principal eastward route of Interprovincial Pipe Line would be revised to follow the Canadian corridor:

Edmonton — Regina — Winnipeg — Port Arthur/Fort William.

The decision would replace the proposed American terminus at Superior, Wisconsin, with a Canadian terminal at the head of the Great Lakes.

The Government undertook to negotiate additional federal financial security for the project, including guarantees of eligible pipeline securities or other appropriate financial assistance, subject to the approval of Parliament and the completion of the necessary corporate arrangements.

The proposed federal participation would be directed toward the additional capital requirements associated with the Canadian route, rather than providing an unrestricted subsidy to the pipeline company.

The Governments of Alberta, Saskatchewan, Manitoba and Ontario would cooperate in facilitating construction through their respective territories.

Provincial assistance would include the coordination and expedition of administrative procedures, assistance with rights-of-way, consideration of financial contributions and support for the necessary terminal and transportation facilities.

Particular attention would be given to the establishment of a modern petroleum terminal at Port Arthur and Fort William, with provision for storage tanks, pumping facilities, railway connections and arrangements for the shipment of petroleum upon the Great Lakes.

The Board of Transport Commissioners would be asked to examine the revised route and the associated technical and financial arrangements.

The Government further stated that the project would remain under the established corporate direction of Interprovincial Pipe Line, with Petro-Canada and Imperial Oil retaining their respective participation in the undertaking.

Imperial Oil Announces a Winnipeg Refinery

In conjunction with the revised pipeline programme, Imperial Oil Limited announced its intention to construct a new petroleum refinery in the Winnipeg area.

The proposed installation would receive Alberta crude oil through the Interprovincial Pipe Line and process it into petroleum products for distribution principally throughout Manitoba and neighbouring markets.

Imperial stated that the development would improve the availability of domestically produced petroleum products in Manitoba, reduce the necessity of transporting finished products over long distances and provide an additional industrial market for Alberta crude.

The company intended to examine suitable industrial sites in the Winnipeg district, with particular attention to railway access, water, electrical supply, storage capacity and the availability of land for future expansion.

The proposed refinery would be designed to supply motor gasoline, heating fuels, diesel fuel and other petroleum products according to the requirements of the regional market.

Imperial would undertake detailed engineering and financial studies before placing major construction contracts, with the intention of coordinating the refinery's completion with the availability of crude supplies through the pipeline.

The Government welcomed the announcement as an indication of the industrial opportunities arising from the selection of a Canadian route.

The refinery would remain an Imperial Oil corporate undertaking, separate from the Dominion's financial guarantees respecting the pipeline, unless additional assistance was subsequently authorized.

The Development of a Canadian Petroleum System

The selection of the all-Canadian route represented a departure from the original commercial proposal defended by the Minister of Trade and Commerce.

The Government acknowledged that the revised alignment would entail additional construction and operating costs. It nevertheless accepted Parliament's conclusion that these costs could be justified by the wider advantages of Canadian transportation, industrial development and the establishment of petroleum facilities at Winnipeg and the Lakehead.

The intended financing arrangements would distribute the additional burden among the pipeline undertaking, its shareholders, the Dominion and participating provincial governments, subject to the negotiation of definite agreements.

Petro-Canada and Imperial Oil would continue their petroleum development activities, while Interprovincial Pipe Line would prepare the revised engineering and financing programme.

The Dominion's policy was now to establish an all-Canadian petroleum pipeline from Edmonton through Regina and Winnipeg to Port Arthur and Fort William, supported by additional federal financial security and provincial cooperation.

The Parliamentary resolution and Government announcement did not represent the completion of construction, the final issue of securities or the granting of all necessary regulatory permissions.

Those matters would proceed through the established corporate and governmental authorities.

The proposed Imperial Oil refinery at Winnipeg likewise remained subject to final engineering, financing and construction arrangements.

The Government regarded the measures as an important addition to its National Development Project, linking the petroleum resources of western Canada with the transportation facilities and consuming markets of the Dominion.

September―November 1949

Chehab was faced with an impossible state of affairs. Most of the state's legitimacy had been eroded and several of the sectarian militias numbered more members than the actual Lebanese military. The threat of Communists, Syrian Nationalists, Phalangists, was set to overwhelm the small state.

Under siege, and uninterested in help from the Syrian Nationalists, Chehab buckled to pressure from Kata’eb and allowed the Phalangists to cooperate with the Lebanese Armed Forces and begin re-stabilizing the state. In the process, Kata’eb grew even stronger, and even more legitimate, and the entire nation rustled in the breeze. The return of stability was immediately followed by Gemayel showing his hand, and pressured the beleaguered President into calling elections while the Lebanese Armed Forces were still feeble. A fait accompli, Chehab acceded to the request―If nothing else, the tired President could pass the situation to another poor soul.

Elections in Lebanon were rarely fair, but with a decimated noble class buried in illegitimacy, and roving sectarian militias, Lebanon was set for a political reawakening. The traditional lists led by local nobility gave way to haphazard political parties, and an immense amount of thuggery. Voting stations were patrolled by roving militias, and ballots were far from secret. Under these circumstances, Destour (The Constitutional Bloc) was decimated, and Kata’eb, alongside the other militia-parties, triumphant.

Even under the circumstances, Kata’eb came up well short of a majority, due in part to competition from rival militias under the command of the SSNP, or the Druze, or the few Za’im that still wielded power across the Republic, such as the Frangiehs, but also due to the realities of the National Pact, which had made it extraordinarily difficult for a movement based primarily out of one sect, such as Kata’eb to ascertain full control. Kata’eb had been joined by conservative muslim allies in the National Call, the scattered few who earnestly believed Kata’eb’s claims to be moving past Christian nationalism, or at least were willing to overlook the radicalism within the Phalange. Even with their support, Kata’eb was nine seats short of a majority, joined by the Armenian Tashnag, they would be just six short, but further allies were slim pickings.

The SSNP and their allies, primarily the Frangieh family, secured seventeen seats, well short of being able to contend for government themselves, but more than enough to be a thorough pain for Kata’eb and the Lebanese nationalists. Camille Chamoun and the remnants of the constitutionalists managed to secure twenty-three seats, a far cry from the continual majorities they had endured under El-Khoury, but enough to prevent either of the radicals from assuming power immediately. In the process, the Constitutional Bloc had taken on a much more Muslim makeup, as their Maronite seats were bled to Kata’eb, the bulk of their caucus now came from Sunni and Shia seats, and power had begun to concentrate behind the Karami family. Finally, on his lonesome, Kamal Jumblatt secured all four Druze seats for his Progressive Socialist Party, but steadfastly refused to join any of the other blocs until they promised to wage an all out war on corruption and implement various democratic socialist policies.

The aftermath of the election was President Chehab continuing as President. Parliament incapable of selecting a successor, and most of the political establishment collectively fine with Chehab continuing…for now. The militias had stayed raised, functioning increasingly as street gangs, as the word ‘civil war’ began to loom over the Republic, ever more certain following each round of failed voting for President…

Ottawa, 21–25 October 1949

The House of Commons resumed consideration of the autumn financial statement presented by the Honourable Douglas Abbott, Minister of Finance, on 20 October.

The Minister's statement had reviewed Canada's economic and fiscal position, renewed the taxation programme announced in March, and outlined the financial principles governing the Government's National Development Project. The proposed programme included the construction of a Trans-Canada Highway, additional housing assistance, modernization of the Canadian National Railways and the continuing development of Canada's petroleum industry through Petro-Canada and its associated enterprises.

While the Government maintained that these investments would strengthen the productive capacity of the Dominion, opposition members questioned the adequacy of its financial policy, the future of Canadian export markets and the burden of taxation and public commitments.

Particular concern was directed toward trade with the United Kingdom and other sterling-area countries, whose difficulties in obtaining dollars continued to threaten markets for Canadian agricultural and industrial production.

The debate proceeded upon the Minister of Finance's motion that Mr. Speaker leave the Chair for the House to resolve itself into Committee of Ways and Means.

21 October — Commonwealth Trade and the Canadian Dollar

The Honourable William Earl Rowe, Progressive Conservative member for Dufferin—Simcoe, resumed his criticism of the Government's financial policy.

Rowe maintained that the prosperity enjoyed by Canada since the war should not obscure the difficulties facing its export industries. He argued that the Government had failed to adjust commercial arrangements sufficiently to the changing position of the United Kingdom and other important overseas customers.

Particular attention was directed toward the system of foreign-exchange controls and the difficulties encountered by sterling-area countries in financing imports from Canada.

Hon. W. Earl Rowe (Dufferin—Simcoe): "The Minister of Finance has presented a satisfactory account of present revenues, but the House ought to concern itself with the conditions under which those revenues may be maintained. Canada cannot continue indefinitely to sell abroad upon terms which her customers are unable to meet. If our overseas markets are to be preserved, the Government must give greater attention to the conditions governing international trade."

Rowe questioned whether the Government's policy of maintaining restrictions upon foreign exchange and imported goods adequately reflected the requirements of Canadian exporters.

He contended that the prosperity of Canadian agriculture, particularly the production and sale of wheat and other commodities, depended upon restoring the purchasing capacity of countries which had traditionally imported Canadian goods.

The Minister of Finance rejected the suggestion that Canada could disregard its external payments position.

Hon. Douglas Abbott (Minister of Finance): "The Government is fully conscious of the importance of overseas markets to Canadian producers. But we must recognize that the problem is not solved by the simple removal of every financial restriction. The capacity of our customers to pay, the obligations which Canada has already undertaken, and our own requirements for foreign exchange must all receive consideration."

Abbott maintained that the Government would continue examining reciprocal commercial arrangements and the reduction of barriers to trade, provided that such measures were consistent with Canada's wider economic interests.

Rowe also expressed concern over the relationship between national income, government expenditure and the continuing obligations imposed by the public debt.

He argued that the Government should exercise greater restraint in undertaking commitments which would remain payable during any future decline in economic activity.

The Progressive Conservative opposition accordingly advanced an amendment criticizing the Government's handling of Commonwealth trade and calling for more effective measures to preserve and enlarge Canadian export markets.

Debate continued upon the amendment.

21 October — The CCF Proposes Additional Trade Measures

Mr. Wilbert Ross Thatcher, the CCF member for Moose Jaw—Lake Centre, questioned whether the Government's renewed taxation programme adequately addressed the country's principal economic difficulties.

Thatcher acknowledged the reductions in taxation announced earlier in the year but maintained that the Government had placed too much emphasis upon the favourable condition of the Treasury and too little upon the long-term stability of employment, markets and purchasing power.

Mr. Thatcher (Moose Jaw—Lake Centre): "The success of a budget ought not to be judged merely by the balance which appears in the public accounts. The Government must also be prepared to deal with the economic problems confronting the people of Canada. We have heard much concerning the difficulties of British trade, but considerably less concerning the particular measures by which those difficulties are to be overcome."

He argued that maintaining exports required Canada to accept a greater volume of imports from the countries to which it sold.

The sterling-area countries could not indefinitely purchase Canadian wheat, timber and manufactured goods while encountering substantial barriers to the sale of their own products in Canadian markets.

Thatcher accordingly proposed an amendment to the Progressive Conservative amendment, calling for immediate consideration of tariff reductions sufficient to encourage additional imports from the United Kingdom and other sterling countries.

He maintained that the Government should move beyond declarations favouring freer trade and undertake practical measures to improve the position of Britain's industries in the Canadian market.

The Minister of Trade and Commerce, the Right Honourable C. D. Howe, defended the Government's efforts to enlarge international markets.

Rt. Hon. C. D. Howe (Minister of Trade and Commerce): "It is the policy of the Government to encourage the expansion of international trade upon a reciprocal and practicable basis. We are not indifferent to the difficulties encountered by British exporters. But the remedies proposed must be examined with regard to the requirements of Canadian industry and the broader international commercial position."

The competing amendments remained before the House.

24 October — The Responsibilities of National Development

As debate continued, members turned to the prospective obligations arising from the Government's National Development Project.

The Opposition questioned whether the proposed programme could be undertaken without substantially increasing borrowing and exposing the Treasury to further liabilities.

Particular attention was directed toward the Government's proposed maximum contribution of $200,000,000 for the Trans-Canada Highway, its intended participation in public rental housing, and the financing of an expanded modernization programme for the Canadian National Railways.

The Minister of Finance maintained that these undertakings differed materially in their financial character.

Hon. Mr. Abbott: "It is essential that honourable members distinguish between the authorization of a programme extending over several years and the expenditure which may actually be incurred during the present fiscal year. The highway proposals concern contributions to works undertaken by the provinces. The housing programme involves joint investment and continuing agreements. Railway modernization concerns an established public enterprise with its own revenues, accounts and borrowing requirements."

Abbott rejected the suggestion that every dollar of proposed capital investment should be regarded as an immediate charge upon the ordinary revenues of the Dominion.

The Government intended that the necessary authorizations should be brought before Parliament separately, with the amounts, purposes and financial safeguards of each measure available for examination.

Members of the CCF urged that public investment should be directed toward providing employment and improving conditions for working families rather than merely facilitating additional private industrial activity.

The Government maintained that the programme's benefits would extend to transportation, housing, agriculture, manufacturing and natural-resource development, while individual projects would remain subject to the availability of labour, materials and financing.

No decision was reached upon the financial authorizations contemplated by the National Development Project.

25 October — Public Expenditure and Economic Security

When debate resumed, members continued their examination of the Government's fiscal position and its prospects for maintaining prosperity.

Progressive Conservative speakers questioned whether the Government had adequately provided for the possibility of reduced export demand or a decline in the present high level of national income.

Mr. Rodney Adamson, member for York West, drew attention to the difficulties confronting Canadian exporters in competition with European manufacturers and to the changing costs of British production.

Mr. Adamson (York West): "The circumstances under which Canadian producers have prospered in recent years cannot be assumed to continue indefinitely. We must consider what will happen if the markets upon which our industries depend become increasingly difficult to maintain. A financial policy which appears satisfactory under conditions of high production must also be capable of meeting less favourable circumstances."

Other opposition members argued that increases in public expenditure might impose obligations which would be difficult to reduce in a period of recession.

The Government maintained that the purpose of its development programme was precisely to improve the efficiency and diversity of Canadian production.

In particular, better transportation, increased housing construction and the development of domestic resources could help reduce costs and strengthen Canada's capacity to meet future economic difficulties.

The debate also touched upon the position of the petroleum industry.

The Government's acquisition of Imperial Oil through Petro-Canada, the establishment of the Interprovincial Pipe Line undertaking and the commencement of additional exploration activities in Alberta had created substantial new investment responsibilities.

Members questioned the relationship between the existing public capital investment and future requirements for borrowing, construction and industrial expansion.

The Minister of Finance reiterated that further corporate investment would require proper financial examination and that obligations already undertaken would be distinguished from new authorizations.

Hon. Mr. Abbott: "The Government has not suggested that the establishment of a Crown enterprise exempts its financial transactions from scrutiny. The capital already provided, the borrowing which has been authorized, and any further proposals for investment must be dealt with according to their proper character. Parliament is entitled to be informed of the obligations undertaken on behalf of the public."

The Government maintained that Petro-Canada, Imperial Oil and the pipeline undertaking would pursue development through their established corporate structures, subject to the financial and statutory powers already conferred upon them.

The Debate Remains Before the House

By the conclusion of the sitting on 25 October, the House had examined several of the principal questions arising from the autumn financial statement.

The Progressive Conservative opposition had challenged the Government's policies concerning overseas markets, foreign exchange and the growth of public financial commitments.

The CCF had urged more immediate measures to expand imports from the sterling area and questioned whether the Government's taxation and development policies adequately addressed employment, housing and purchasing power.

The Government maintained that Canada's financial position required continued prudence, while defending the necessity of investment in transportation, housing, railway modernization and natural-resource development.

The motion of the Minister of Finance, the amendment proposed by Mr. Rowe and the subamendment proposed by Mr. Thatcher remained before the House.

No division was taken upon the outstanding financial motions.

The debate was adjourned for subsequent consideration, leaving the House to resume its examination of the Government's financial and economic policy when the Budget again came before Parliament.

The detailed legislation governing the Trans-Canada Highway, amendments to the National Housing Act and the financing of Canadian National Railways would proceed separately during the autumn session.

Ottawa, 20 October 1949

The House of Commons assembled to hear the autumn financial statement of the Honourable Douglas Abbott, Minister of Finance, reviewing the economic and fiscal position of the Dominion and the Government's financial proposals for the remainder of the fiscal year 1949–50.

The statement followed the Budget presented in March and came at a time of considerable change in Canada's economic circumstances. Industrial production and employment remained high, while the international payments situation, the reconstruction of European markets and the adjustment of world trade continued to present difficulties.

The opening of the Twenty-First Parliament also afforded the Government an opportunity to renew its earlier taxation proposals and place before the House the financial principles governing its recently announced National Development Project.

The Government's programme contemplated substantial investment in transportation, housing, public works and Canadian productive capacity. It further included the activities of established Crown enterprises, including the Canadian National Railways and the recently organized Petro-Canada petroleum undertaking.

Mr. Abbott emphasized that the Government did not propose to finance these undertakings through an unrestricted appropriation or to charge their entire capital value against the expenditure of a single fiscal year. Their implementation would require separate legislation, corporate financing arrangements and parliamentary scrutiny.

20 October — The Economic Position of Canada

The Honourable Douglas Abbott moved that Mr. Speaker leave the Chair for the House to resolve itself into Committee of Ways and Means.

In opening his statement, the Minister observed that the circumstances did not require a repetition of the comprehensive economic review delivered in March. Rather, it was his purpose to bring the House up to date upon the economic and financial position, present revised assessments of the Government's accounts and renew the taxation programme previously announced.

Hon. Douglas Abbott (Minister of Finance): "Mr. Speaker, the statement which I have the honour to present this evening is not intended to replace the Budget which I submitted to the preceding Parliament in March. Its principal object is to review the course of events since that time, to examine the condition of the public finances and to place before honourable members the financial proposals which the Government intends to pursue during the present session."

The Minister reported that production, employment and national income continued at comparatively high levels.

The postwar expansion of industrial activity had sustained a substantial demand for labour, machinery, materials and capital investment. Residential construction, public utilities and industrial equipment continued to absorb a considerable proportion of the country's productive resources.

Nevertheless, Abbott cautioned that the maintenance of prosperity depended in part upon conditions beyond Canada's borders.

The reconstruction of European economies, the continuing difficulties of sterling-area payments and changes in overseas purchasing power threatened to restrict certain traditional markets for Canadian exports.

Hon. Mr. Abbott: "We cannot regard the maintenance of employment and production in Canada as a matter entirely within our own control. Our export industries are dependent upon markets abroad, and many of those markets are still contending with shortages of foreign exchange and the difficulties arising from the war. It is therefore necessary that our domestic financial policy should be directed not merely toward preserving stability, but toward strengthening the capacity of Canadian industry to compete and expand."

The Minister drew particular attention to the importance of improving transportation, reducing unnecessary production costs and encouraging investment in industries capable of supplying both Canadian and foreign markets.

These objectives, he maintained, formed an important part of the economic reasoning behind the Government's National Development Project.

The Public Accounts and the Fiscal Position

Turning to the public accounts, Abbott reviewed the results of the fiscal year ended 31 March 1949 and the probable course of revenues and expenditures during the current fiscal year.

He reported that the Government continued to regard the maintenance of sound public finances as a necessary condition of economic stability.

The postwar reduction of the public debt had strengthened Canada's financial position, but the Government remained responsible for substantial continuing expenditures upon defence, veterans' benefits, social services, transportation and other federal obligations.

The admission of Newfoundland to Confederation had also introduced additional responsibilities and financial adjustments.

Hon. Mr. Abbott: "It would be a mistake to suppose that the existence of a substantial programme of national development requires the abandonment of financial discipline. The obligations which the Government proposes to undertake must be considered in relation to the resources of the Treasury, the borrowing requirements of public undertakings and the capacity of the Canadian economy to provide the labour and materials required."

Abbott distinguished between ordinary expenditure from the Consolidated Revenue Fund, loans and advances to public corporations, the acquisition of capital assets, and guarantees of indebtedness.

The Minister emphasized that these transactions could have very different consequences for the annual budget and the public debt.

A guarantee of railway securities, for example, did not necessarily entail an immediate cash payment from the Treasury, although it might create a contingent liability. Similarly, the acquisition of shares in a Crown corporation represented a capital investment rather than the ordinary purchase of departmental services.

The Minister advised that revised financial estimates would need to reflect the obligations already assumed by the Government while making appropriate distinctions between current expenditure, capital investment and borrowing authority.

The Government did not propose to treat the full amount of its multiyear development authorizations as expenditure immediately incurred during the fiscal year 1949–50.

Taxation and the Cost of Living

The Minister next reviewed the taxation programme presented in March.

The earlier measures had provided substantial reductions in personal income taxation and revisions of corporation and commodity taxes, together with the removal or reduction of a number of special excise taxes.

Abbott maintained that the general direction of the March programme remained appropriate and that the Government did not intend to reverse those reductions.

He proposed two additional changes.

First, the Government would remove the federal sales tax from petroleum-based fuel oils employed for heating and lighting in homes and industry. The exemption would not extend to motor fuels used in internal combustion engines.

Hon. Mr. Abbott: "Coal, coke, wood, gas and electricity are not subject to the sales tax now borne by fuel oils used for heating. There appears to be no sufficient reason for maintaining this distinction. Its removal will assist householders and will also reduce the costs of certain industrial establishments whose operations depend upon fuel oil."

The Minister observed that the measure would be of particular interest to the steel, pulp and paper, and other industries in which fuel oil was employed for industrial heating.

He further noted that the growth of petroleum production in western Canada made the development of additional domestic markets increasingly important.

Second, Abbott proposed a reduction in the duty applicable to cider and certain other wines of low alcoholic strength, from fifty cents to twenty-five cents per gallon, with the object of assisting domestic producers, including the apple-growing industry.

The Minister presented these changes as limited additions to the March taxation programme rather than a new general revision of the tax system.

The proposed fiscal effect of the changes would be included in the Government's revenue calculations, while the necessary taxation resolutions remained subject to parliamentary consideration.

International Trade and the Balance of Payments

Abbott then addressed the external economic circumstances confronting Canada.

The country continued to depend upon the export of agricultural commodities, forest products, metals, minerals and manufactured goods. The difficulties experienced by European countries in obtaining dollars remained a serious obstacle to the expansion of international trade.

The Minister maintained that Canada could not indefinitely sustain its export markets without encouraging a corresponding expansion of international commerce and the capacity of foreign customers to pay for Canadian goods.

Hon. Mr. Abbott: "We must recognize that international trade cannot consist indefinitely of one country selling and another country accumulating obligations which it has no practical means of discharging. The maintenance of our export markets requires a greater freedom of trade and the restoration of the productive and purchasing capacity of those countries with which we do business."

The Government intended to continue supporting the reduction of unnecessary trade barriers, the negotiation of reciprocal commercial concessions and the development of markets for Canadian production.

Special attention would be given to the United Kingdom, Western Europe, the United States and other established or prospective markets for Canadian agricultural and industrial goods.

Abbott also noted the importance of maintaining adequate foreign-exchange resources and carefully examining the financial consequences of international monetary developments.

Existing commercial and financial arrangements would continue to be administered according to their agreed terms. The Government did not propose to announce new unrestricted credit facilities or additional international financial commitments through the present statement.

The National Development Project

The Minister then turned to the Government's National Development Project, announced during the opening weeks of the parliamentary session.

Abbott emphasized that the programme was intended to encourage economic development over a period of years, not to create an immediate and unlimited expansion of federal expenditure.

Its principal objects were to improve transportation, enlarge the supply of housing, facilitate the development of natural resources and strengthen the productive capacity of Canadian industry.

Hon. Mr. Abbott: "The Government regards the development of Canada's transportation facilities, housing accommodation and natural resources as an investment in the future productive capacity of the Dominion. But the projects which we undertake must be selected with care, their financial arrangements must be sound, and their execution must proceed in a manner consistent with the resources available to the country."

The Minister stated that the first legislative measures arising from the programme would concern the Trans-Canada Highway, amendments to the National Housing Act and additional financing for the Canadian National Railways.

Other undertakings, including power development, industrial expansion and the improvement of communications, would continue to be examined through the appropriate departments and public enterprises.

The Trans-Canada Highway

The Government proposed to establish a national system of improved highways through agreements with the provincial governments.

The initial programme would extend over seven years, with the Dominion contributing one-half of approved provincial construction and reconstruction costs.

Abbott announced that the Government intended to seek parliamentary authorization for a maximum federal contribution of $200,000,000.

This would provide the financial basis for a programme potentially involving up to $400,000,000 in eligible shared construction expenditures where provincial contributions were forthcoming.

Hon. Mr. Abbott: "The construction of a highway extending across the Dominion will provide benefits which cannot be measured solely by the revenue derived from motor traffic. It will improve the movement of goods, facilitate commercial intercourse between the provinces and strengthen the connections between communities whose economic activities are now restricted by inadequate transportation."

The Minister emphasized that the federal authorization would constitute a ceiling upon contributions over the life of the programme rather than an immediate appropriation of the whole sum.

Expenditure would arise progressively as provinces entered into agreements, eligible works were undertaken and claims for federal contributions were approved.

Responsibility for construction and ordinary maintenance would remain with the provincial governments, subject to the conditions established under the proposed legislation.

Housing and Residential Development

Turning to housing, Abbott observed that the continued shortage of suitable residential accommodation remained a significant economic and social problem.

The Government proposed amendments to the National Housing Act extending assistance for private home ownership, cooperative housing, public rental accommodation and the acquisition and preparation of residential land.

A principal feature would be the authority for joint federal–provincial public housing undertakings.

Under the Government's proposal, the Dominion would provide seventy-five per cent of approved capital costs, while participating provinces would provide twenty-five per cent. Operating profits and losses would be shared in the same proportions.

Hon. Mr. Abbott: "The financial problem of housing is not confined to the provision of mortgage credit. In many communities the cost of land, the provision of necessary services and the inability of lower-income families to meet prevailing rents have made additional measures necessary. The Government proposes that the Dominion and the provinces should be able to undertake suitable projects jointly, upon a definite division of financial responsibility."

The Minister explained that the Government was examining an initial federal capital authorization of approximately $60,000,000 for joint public housing and land-development undertakings.

Subject to provincial participation and parliamentary approval, this could support approximately $80,000,000 in combined capital investment.

He cautioned that the initial authorization would not represent expenditure already incurred or guarantee the immediate commencement of projects in every province.

Separate financial provisions would apply to private mortgage assistance, cooperative undertakings and other housing programmes not falling within the proposed public rental cost-sharing arrangement.

Modernization of the Canadian National Railways

Abbott next addressed the financial requirements of the Canadian National Railways.

The Minister observed that the national railway system remained essential to the movement of agricultural commodities, minerals, forest products, manufactured goods and passengers.

The Government considered it necessary to undertake a more sustained programme of modernization, particularly in the fields of motive power, freight equipment, permanent way, signalling, maintenance facilities and freight terminals.

The Minister of Transport, the Honourable Lionel Chevrier, was preparing proposals for an expanded programme of capital investment.

The initial planning envelope under examination amounted to approximately $120,000,000 over three years, subject to further examination of the railway's accounts, equipment requirements and financing capacity.

Hon. Mr. Abbott: "The Canadian National Railways must be provided with the means to maintain an efficient system of transportation. At the same time, Parliament must distinguish between the capital requirements of a railway undertaking and the ordinary expenditure of the Government. The financing of railway improvements may properly involve the resources of the company, the issue of securities, advances from the Treasury and guarantees authorized under statute."

The Minister emphasized that the Government did not propose to charge the entire capital programme against the ordinary budget of the current fiscal year.

The precise distribution of financing between corporate resources, borrowing and federal advances would be presented with the necessary railway financing legislation.

Abbott further stated that the modernization programme was intended to improve railway efficiency and capacity, rather than authorize indiscriminate branch-line abandonment or an immediate replacement of all existing equipment.

Petroleum Development and the Crown Enterprises

The Minister also addressed the Government's existing investments in petroleum development.

Earlier in the year, the Dominion had subscribed $100,000,000 for 100,000,000 shares in Petro-Canada, establishing a federal petroleum enterprise intended to participate in the exploration, production, processing and distribution of Canadian petroleum resources.

The Government had additionally authorized borrowing of up to $150,000,000 in connection with Petro-Canada's acquisition of Imperial Oil from its former American controlling interests.

Since the establishment of the enterprise, Petro-Canada and Imperial Oil had formed the Interprovincial Pipe Line undertaking, while Petro-Canada had organized its own exploration division to acquire petroleum leases and undertake geological and exploratory work in Alberta.

Abbott emphasized that the financial accounts of these enterprises required careful distinction between the Government's original capital investment, corporate borrowing, acquisition obligations and subsequent commercial expenditure.

Hon. Mr. Abbott: "The Government has already undertaken substantial commitments in the development of the petroleum industry. We have provided capital for the establishment of Petro-Canada and authorized the financing necessary for its acquisition of Imperial Oil. The responsibility now is to ensure that these undertakings are administered upon sound commercial principles and that any further requirements for public capital are properly brought before Parliament."

The Minister observed that western Canada's expanding petroleum production offered important prospects for industrial development and the reduction of dependence upon imported supplies.

The development of transportation facilities, including pipelines, was of particular importance if western production was to reach the principal consuming markets of central and eastern Canada.

Nevertheless, Abbott distinguished the existing establishment of the petroleum enterprises from future commitments respecting pipeline routes, additional borrowing, construction contracts or expanded exploration expenditures.

Those matters would remain subject to the appropriate corporate, financial and governmental decisions.

The Minister further emphasized that funds employed by Petro-Canada, Imperial Oil or the pipeline undertaking should not be represented as separate federal expenditures merely because the enterprises formed part of a wider programme of national development.

Industrial Capacity and the Execution of the Programme

Abbott concluded his review of the development programme by addressing the limitations imposed by Canada's available productive capacity.

The demand for steel, machinery, construction materials, skilled labour and transport equipment was already considerable.

A rapid simultaneous expansion of public works and private industrial construction could produce shortages, higher costs and delays, particularly where essential materials or equipment had to be imported.

Hon. Mr. Abbott: "It would be unwise to suppose that the resources of the country can be enlarged simply by voting money for their employment. Labour, machinery and materials must be available if the proposed works are to be carried out. The Government therefore intends to proceed by stages, with due regard to the requirements of private industry, the conditions of international trade and the necessity of avoiding unnecessary increases in construction costs."

The Government would seek to encourage the participation of Canadian manufacturers and contractors wherever practicable.

The Minister stated that railway modernization, highway construction, housing development and the expansion of petroleum production could provide important markets for Canadian steel, machinery, electrical equipment, construction materials and engineering services.

He nevertheless rejected the proposition that the Government should guarantee contracts to particular manufacturers in advance of the proper financial and commercial arrangements.

The Department of Trade and Commerce would continue examining the industrial capacity, skilled labour and imported materials required to carry out the development programme.

The Government's Financial Policy

In concluding his statement, Abbott reaffirmed the Government's intention to maintain prudent public finances while undertaking investments considered necessary for the long-term development of the country.

He maintained that the programme did not represent a departure from the principles underlying the March Budget.

Rather, the Government intended to combine sound current financial administration with carefully selected capital investments, properly authorized borrowing and cooperation with provincial governments and established Crown enterprises.

Hon. Mr. Abbott: "The Government does not believe that financial prudence consists in refusing every expenditure whose benefits will be realized in future years. Nor does it believe that useful development can be secured by undertaking obligations without proper examination of their cost.

"We propose to maintain the financial strength of the Dominion while providing for those improvements in transportation, housing and productive capacity which are necessary to the country's continued prosperity. The essential requirement is that each undertaking shall be considered upon its merits, that its financial obligations shall be clearly stated, and that Parliament shall retain its proper control over the public purse."

The Minister laid the necessary Ways and Means proposals before the House and concluded his financial statement.

The Budget Debate to Continue

With the conclusion of the Minister's statement, the House had received the Government's updated account of Canada's economic circumstances and the financial principles underlying its autumn legislative programme.

The proposed additional tax relief, the renewed March taxation measures and the financing of the National Development Project remained open to parliamentary examination.

The House had not yet authorized the proposed Trans-Canada Highway expenditure ceiling, enacted the housing amendments, or approved the Canadian National modernization financing arrangements.

Nor did the statement confer new borrowing authority upon Petro-Canada or its associated enterprises beyond commitments already established.

The debate on the Minister of Finance's motion was accordingly left open for subsequent sittings.

Members would have further opportunity to examine the Government's taxation policy, the condition of the public finances, the proposed development commitments and the economic consequences of Canada's changing international circumstances.

The detailed highway, housing and Canadian National legislative measures would be brought before Parliament separately in the course of the autumn session.

Ottawa, 17–27 October 1949

The House of Commons turned its attention to the Government's proposal to amend the British North America Act, 1867, as part of the St. Laurent administration's programme of constitutional and judicial reform.

Although Canada had acquired substantial legislative independence under the Statute of Westminster, 1931, amendments to the British North America Acts generally continued to require legislation by the Parliament of the United Kingdom. The Canadian Parliament could request such changes through an Address to His Majesty, but it did not possess general authority to enact them independently.

The Government proposed to remedy this limitation in respect of matters pertaining exclusively to the federal Constitution. An amendment to section 91 of the British North America Act would empower Parliament to alter its own constitutional arrangements, subject to express safeguards protecting provincial jurisdiction, constitutional rights and certain fundamental parliamentary requirements.

Unlike the proposed abolition of appeals to the Judicial Committee of the Privy Council, which could be accomplished through Canadian legislation, this reform required the cooperation of Westminster. The proceedings therefore concerned not a bill for Royal Assent in Canada, but an Address requesting the enactment of British legislation.

17 October — The Question of Constitutional Authority

The Prime Minister, the Right Honourable Louis St. Laurent, moved that an Address be presented to His Majesty the King requesting an amendment to the British North America Act, 1867, authorizing the Parliament of Canada to amend the Constitution of Canada within defined limits.

The Prime Minister explained that provincial legislatures already possessed authority to amend their respective provincial constitutions, subject to constitutional restrictions, while Parliament lacked corresponding authority over certain aspects of its own organization.

Rt. Hon. Louis St. Laurent (Prime Minister): "It is an anomaly, Mr. Speaker, that the Parliament of Canada should be competent to legislate upon matters of the greatest national importance, yet remain obliged to seek the intervention of another Parliament when alterations are required to the constitutional arrangements governing its own proceedings. We propose to remove that anomaly, but not to disturb the distribution of powers upon which Confederation was established."

The proposed authority would not extend to matters assigned exclusively to provincial legislatures, constitutional rights or privileges secured to provincial governments, denominational educational protections, or the use of the English and French languages.

The Government further maintained that the proposal was distinct from the broader question of establishing a general procedure by which the Constitution might be amended with provincial participation.

Mr. George Drew, Leader of the Opposition, challenged the decision to seek the amendment without first securing agreement among the provinces.

Mr. Drew (Carleton): "The question before us is not merely whether this Parliament should enjoy greater freedom in conducting its own affairs. It is whether a constitutional change of this importance ought to be undertaken without securing the confidence of the governments and peoples of the provinces. We cannot disregard the federal character of Confederation simply because the authority proposed is described as federal."

The Prime Minister answered that the Government had corresponded with the provincial premiers concerning the proposed amendment and that their views would receive consideration. He nevertheless maintained that the absence of unanimous provincial agreement should not prevent Parliament from seeking authority over matters expressly confined to the federal sphere.

Correspondence between the Dominion and provincial governments was laid before the House for examination.

18 October — Parliamentary Safeguards and the Rights of the Provinces

Debate continued upon the scope of the proposed amendment and the constitutional limitations which ought to accompany it.

Mr. Edmund Davie Fulton, the Progressive Conservative member for Kamloops, questioned whether the distinction between federal and provincial constitutional matters was sufficiently precise to justify granting Parliament the proposed authority without further consultation.

Mr. Fulton (Kamloops): "The difficulty, Mr. Speaker, is that the institutions of this Parliament form part of the constitutional settlement under which the provinces entered Confederation. An alteration which appears to concern the federal machinery alone may nevertheless affect the interests of the provinces. The Government must therefore explain not only what it intends to do with this power, but what future Parliaments might be permitted to do."

The Minister of Justice, the Honourable Stuart Garson, maintained that the proposed restrictions were intended to prevent any unilateral interference with the legislative powers and constitutional guarantees of the provinces.

Hon. Stuart Garson (Minister of Justice): "The authority sought by the Government is expressly limited. It cannot be employed to transfer powers from the provinces to the Dominion, to deprive a province of constitutional rights secured to it, or to disturb those protections relating to education and language which form part of the settlement of Confederation. The larger question of an amending procedure applicable to the Constitution as a whole remains open."

From the CCF benches, Mr. Stanley Knowles raised a separate concern respecting the safeguards of parliamentary government.

Knowles observed that the proposed exceptions did not expressly preserve the requirement that Parliament meet at least once annually or the constitutional limitation upon the duration of the House of Commons.

Mr. Knowles (Winnipeg North Centre): "If we are to confer upon Parliament an authority which it has not previously possessed, we ought at the same time to make certain that the fundamental safeguards of representative government cannot be removed by the ordinary exercise of that authority. The requirement that Parliament shall meet at least once each year and that the people shall have the opportunity of choosing a new House within five years should stand among the exceptions to this power."

Knowles accordingly moved an amendment excluding from Parliament's proposed constitutional authority the annual-session requirement of section 20 and the five-year limitation contained in section 50 of the British North America Act.

The Government undertook to consider the proposed safeguard, although the Minister of Justice observed that the wording would require attention to the existing constitutional arrangements governing the extension of parliamentary terms during extraordinary national emergencies.

20 October — The Government's Amendment

When consideration resumed, Mr. Garson proposed an amendment to the amendment moved by Mr. Knowles.

The Government accepted the principle that the new constitutional authority should not permit Parliament to dispense with annual sessions or indefinitely prolong the existence of the House of Commons. It nevertheless sought to preserve the existing wartime exception under which the duration of the Commons might be extended during a grave national emergency.

Hon. Mr. Garson: "The Government accepts that the ordinary duration of Parliament and the requirement for its annual assembly ought not to be placed at the discretion of a future parliamentary majority. But we must also recognize the circumstances which confronted Canada during the recent war, when the continuance of Parliament was necessary to the conduct of the national effort. The amendment should preserve that existing constitutional provision rather than abolish it inadvertently."

The revised language would permit the House of Commons to continue beyond five years in time of real or apprehended war, invasion or insurrection, provided that such continuation was not opposed by the votes of more than one-third of its members.

Knowles maintained that the ordinary democratic safeguards must remain protected, but acknowledged the importance of ensuring that the amendment did not introduce uncertainty concerning the exceptional wartime provision.

The House continued consideration of the competing proposals without immediately disposing of the main Address.

The constitutional debate proceeded alongside the presentation of the Minister of Finance's autumn financial statement and the ordinary business of supply.

24 October — Provincial Correspondence and the Federal Compact

The Prime Minister laid before the House additional correspondence exchanged with the Premiers of Saskatchewan and Quebec concerning the proposed constitutional amendment.

The correspondence renewed the question of whether Ottawa should proceed with a limited federal amendment while negotiations over a more comprehensive Canadian amending procedure remained unsettled.

Opposition members argued that the constitutional interests of the provinces could not be reduced entirely to those subjects over which their legislatures possessed exclusive authority.

Mr. Drew: "The provinces are not merely subordinate authorities possessing whatever powers Parliament may choose to leave undisturbed. They are governments established by the Constitution itself, and they have a legitimate interest in the manner in which that Constitution is altered. The Government would do well to recognize the distinction between a power which may be exercised and a power which ought to be exercised without agreement."

The Government maintained that it sought no authority to alter provincial legislative jurisdiction or rights. Mr. Garson further argued that postponing a limited federal amendment until agreement could be reached upon every question of constitutional revision would leave the existing dependence upon Westminster indefinitely unresolved.

Hon. Mr. Garson: "The Government does not deny the desirability of consultation upon questions affecting the Constitution of Canada. It denies that the absence of agreement upon a general amending procedure must prevent Parliament from obtaining authority over matters which are properly and exclusively federal. We have deliberately framed the proposed amendment so that the rights of the provinces shall remain outside its operation."

The Government reiterated its intention to continue discussions with provincial authorities concerning a more comprehensive procedure for constitutional amendment.

27 October — The Address as Amended

The House returned to the constitutional Address and the amendments respecting annual sessions and the duration of Parliament.

The Government's revised safeguard was incorporated into the proposal, preserving the existing requirements for annual parliamentary sessions and the ordinary five-year maximum duration of the Commons, subject to the specified emergency exception.

The Progressive Conservative opposition continued to maintain that the Government should obtain provincial agreement before seeking the proposed change.

The Prime Minister rejected the suggestion that Parliament was asserting an unrestricted constituent authority.

Rt. Hon. Mr. St. Laurent: "The Government has not asked that Parliament be empowered to rewrite the Constitution of Canada at its pleasure. We have expressly excluded the powers of the provinces, their constitutional rights and privileges, and the safeguards relating to schools and language. We have also accepted further limitations respecting the duration and annual assembly of Parliament. What remains is a defined authority over the federal Constitution, which ought properly to be exercisable in Canada."

The House proceeded to dispose of the remaining amendments and the principal resolution.

Proposals requiring the prior completion of provincial consultations were negatived.

The question was then put upon the constitutional Address in its amended form.

The Address to His Majesty, requesting an amendment to section 91 of the British North America Act, 1867, was adopted by the House of Commons.

The Address sought authority for Parliament to amend the Constitution of Canada from time to time, except in respect of:

• Matters assigned exclusively to provincial legislatures;
• Constitutional rights or privileges secured to provincial legislatures or governments;
• Rights or privileges respecting denominational schools;
• The constitutional use of the English and French languages;
• The requirement for annual sessions of Parliament;
• The ordinary five-year maximum duration of the House of Commons, subject to the existing emergency extension provision.

The House thereby completed its consideration of the proposed Address.

Its adoption did not itself amend the Constitution. The concurrence of the Senate and subsequent legislation by the Parliament of the United Kingdom remained necessary.

The Senate and the Remaining Constitutional Process

With the Address adopted by the Commons, the proposed constitutional amendment awaited the separate consideration and concurrence of the Senate.

The upper chamber would be required to consider the same fundamental questions raised during the Commons proceedings: whether the new federal authority was sufficiently limited, whether the protections afforded to the provinces and constitutional minorities were adequate, and whether the safeguards respecting parliamentary sessions and duration ought to be preserved in the final request to Westminster.

The Government intended to maintain the substance of the amended Address approved by the Commons, while recognizing the Senate's responsibility to examine the proposed constitutional change independently.

The Senate's consideration of the Address remained outstanding at the close of October.

Should both houses concur, the Canadian Parliament would be in a position to submit a joint Address to His Majesty requesting the introduction of the necessary legislation in the Parliament of the United Kingdom.

The constitutional amendment would not enter into force by virtue of the Canadian resolutions alone. Its enactment would require the separate action of Westminster.

The Government also maintained that the limited federal amending authority now sought would not constitute a final settlement of the wider constitutional question. The establishment of a general Canadian procedure for amendments affecting both the Dominion and the provinces would remain a subject for further consideration and consultation.

Thus, while the Commons had approved an important step toward greater constitutional autonomy, the proposed reform remained subject to the remaining parliamentary and constitutional processes.

Ottawa, 4–11 October 1949

The House of Commons continued its consideration of Bill No. 2, An Act to amend the Supreme Court Act, introduced by the Minister of Justice, the Honourable Stuart Garson, as part of the Government's programme of constitutional and judicial reform.

The measure proposed to make the Supreme Court of Canada the final court of appeal in Canadian litigation, bringing to an end the remaining right of appeal to the Judicial Committee of His Majesty's Privy Council in London. Appeals in criminal matters had already been abolished, but the continued possibility of appeal in civil and constitutional cases meant that the final interpretation of Canadian law might still be determined outside the Dominion.

Although the principle of establishing a final Canadian appellate jurisdiction commanded considerable support, the legislation gave rise to substantial disagreement over judicial precedent, the protection of provincial powers and the manner in which future appointments to the Supreme Court ought to be made.

4 October — The Question of Judicial Precedent

The House, sitting in Committee of the Whole, resumed its examination of the provisions governing the abolition of appeals to the Judicial Committee.

Particular attention was directed to the doctrine of stare decisis, under which courts ordinarily follow the authority of decisions previously rendered. Opposition members argued that the removal of the Judicial Committee as Canada's final appellate tribunal required Parliament to consider whether the Supreme Court should be expressly bound to respect established constitutional precedents.

Mr. George Drew, Leader of the Opposition, maintained that the question went beyond the dignity of the Canadian judiciary.

Mr. Drew (Carleton): "No member of this House need question the learning or integrity of the judges of the Supreme Court of Canada. But we are being asked to alter the final authority by which the division of legislative powers has been interpreted since Confederation. The provinces are entitled to know whether those interpretations will retain their authority when the avenue of appeal to London has been closed."

The Minister of Justice rejected the suggestion that Parliament ought to prescribe an inflexible rule governing the Court's treatment of its own precedents.

Hon. Stuart Garson (Minister of Justice): "The Government does not propose to constitute the Supreme Court as a legislature, nor to invite it to disregard the decisions upon which Canadian law has been built. But neither should we impose upon the highest court of this country restrictions which would prevent the orderly development of the law. The doctrine of precedent is a principle of judicial administration, and its application must remain a matter for the judiciary."

The Prime Minister, the Right Honourable Louis St. Laurent, likewise defended the competence of Canada's courts to discharge the responsibility formerly exercised by the Judicial Committee.

Rt. Hon. Louis St. Laurent (Prime Minister): "Canada has for many years possessed a Supreme Court whose judges have been called upon to determine questions of the greatest importance to the people and governments of this country. The fact that their judgments have remained subject, in certain classes of proceedings, to review abroad does not furnish a sufficient reason for continuing that arrangement indefinitely."

The Committee continued its consideration of the bill, with opposition members maintaining their objections to the absence of an explicit statutory safeguard respecting constitutional precedent.

11 October — Amendments Respecting Precedent and Appointments

When the House resumed consideration of the bill, Mr. Edmund Davie Fulton, the Progressive Conservative member for Kamloops, pressed an amendment intended to protect the established operation of judicial precedent.

He referred to concerns raised by the Canadian Bar Association and argued that a final Canadian court would exercise an authority of exceptional constitutional importance.

Mr. Fulton (Kamloops): "The argument that an express provision respecting precedent would indicate want of confidence in the Supreme Court is not persuasive. Parliament frequently places duties and limitations upon public authorities without thereby casting any reflection upon those entrusted with their exercise. We ought to know, before this bill becomes law, what security is afforded to the constitutional settlements upon which the provinces have relied."

Mr. Fulton contended that the Government's assurances, however sincerely expressed, could not substitute for legislative language. What the courts would ultimately be required to interpret was the statute itself, rather than the intentions declared during parliamentary debate.

Mr. Garson answered that the Government intended the Supreme Court to exercise the normal responsibilities of a final appellate tribunal. A rigid statutory rule might introduce new uncertainty by raising questions about the circumstances in which an earlier judgment could legitimately be distinguished or reconsidered.

Hon. Mr. Garson: "The authority of precedent is not denied. It is the proposal to transform that authority into an inflexible legislative command which the Government cannot accept. We desire a court faithful to the law, but capable also of performing the duties which the Constitution and Parliament entrust to it."

The amendment was put to the Committee and negatived on division.

A further amendment concerned the appointment of judges to the Supreme Court. Mr. Réal Caouette LaCroix's proposal sought to provide for provincial participation in recommending candidates for certain appointments, including representation from Quebec.

Supporters of the proposal argued that the Court's enlarged constitutional importance justified a more formal means of securing provincial confidence in its composition.

The Government opposed the change, maintaining that the existing appointment arrangements and the statutory provisions respecting Quebec representation provided an appropriate basis for the national tribunal.

The Committee declined to alter the Government's appointment framework.

11 October — Third Reading and Passage

Following the completion of clause-by-clause consideration, the Committee of the Whole reported Bill No. 2 to the House without amendment.

Mr. Garson moved that the bill be read a third time.

A procedural objection was raised concerning whether the House could proceed immediately to third reading after the bill had been reported from Committee. The Speaker ruled that, the bill having been reported without amendment and its previous readings having occurred on separate days, third reading could properly proceed.

The House accordingly resumed its final debate.

The Leader of the Opposition maintained that the Government had not adequately answered the concerns raised respecting provincial rights and the force of constitutional precedent.

Mr. Drew: "We do not oppose the proposition that Canada should possess a final court of appeal of its own. We object to the Government's unwillingness to give adequate consideration to the safeguards which ought to accompany so important a constitutional change. The responsibility which this Parliament assumes today will extend far beyond the life of the present administration."

The Prime Minister, speaking for the Government, placed the measure within Canada's continuing development as a self-governing nation.

Rt. Hon. Mr. St. Laurent: "There is nothing in the establishment of a final Canadian court which diminishes the rights assigned to the provinces by the British North America Act. Those rights remain part of the law which the Court must administer. What is proposed is that the final judicial determination of Canadian controversies shall be made by a Canadian tribunal, constituted under Canadian law and responsible for the faithful administration of that law."

The Government maintained that the measure did not alter the distribution of legislative powers between Parliament and the provincial legislatures. Rather, it completed the transfer of ultimate appellate jurisdiction to the Supreme Court of Canada.

The question on third reading was then put.

Bill No. 2, An Act to amend the Supreme Court Act, was read a third time and passed by the House of Commons on division.

The bill was ordered to be communicated to the Senate for its consideration.

The Remaining Legislative Process

With the passage of Bill No. 2 through the Commons, the Government had secured the approval of the elected chamber for the final abolition of appeals to the Judicial Committee of the Privy Council.

The legislation was not, however, yet law. Consideration by the Senate, Royal Assent and the applicable commencement provisions remained necessary before its substantive changes could take effect.

The Government further emphasized that the separate question of Parliament's authority to amend certain provisions of the British North America Act would be addressed through its own constitutional proceedings.

The two measures, although closely connected in the Government's programme, would therefore proceed independently: one concerning the final judicial authority of Canada, the other concerning the means by which parts of Canada's constitutional arrangements might be amended in the future.

Institute of Physics of Vinča, Belgrade, Yugoslavia
December 1949

Pavle Savić, a prominent scientist, member of the Communist Party, and Boris Kidrič, responsible for planned economic development have spearheaded a quiet effort to advance the development of nuclear energy and nuclear research in the Socialist Federal Republic of Yugoslavia. Pavle, who performed extensive research with Irène Joliot-Curie in Paris on experiments that contributed to the discovery of fission, has been chosen thanks to his extensive experience in nuclear research both in France and the USSR. 

 “Call of the Atom and Atomic Energy” 

The government has allocated $15 million dollars of “seed funding” from incoming aid to jumpstart Yugoslav research into peaceful applications for nuclear development, and is expected to receive substantial state investment in the coming years. Laboratories will be built, relevant instruments and devices will be manufactured or acquired, and scientific and technical personnel will be trained - being sent abroad with government funding for their studies when possible. 

Complimenting this, an additional $10 million is to be allocated to efforts to locate uranium and other nuclear raw materials within the country, and the institute will begin forming partnerships with local universities to promote the development of the field of nuclear research. Research will range from generating electricity on a large scale, as well as medical applications of radiation in controlled doses, ultimately aiming to develop a robust, civilian-oriented nuclear industry.

University of Belgrade - Nuclear Sciences and Energy Program

As part of the first partnership with the Institute of Physics of Vinča, the University of Belgrade will be working with the Institute of Physics of Vinča to develop a graduate level Nuclear Engineering program, which will be fed by graduates in the field of physics from across the country. The University of Belgrade's graduate program will help churn out skilled technicians to the Institute of Physics, which will utilize this extensive manpower to fuel domestic research on reactor and cyclotron construction, isotope separation, uranium ore sample analysis, and the production of heavy water. Where necessary, the institute will partner with state engineering enterprises to build manufacturing plants for new lab equipment, and reduce the reliance on imports of external tooling as much as possible.

December 1949

Autonomous Region of Kosovo and Metohija, Yugoslavia

Operation Griffon

As part of the tasks given to the People’s Reconstruction Committee in rebuilding the nation’s housing supply, the government of Yugoslavia has drawn up plans for a redistribution of population groups under the guise of reconstruction. Of critical concern to the central government is the presence of traitors and fifth-columnists, with a feared pro-Tirana sentiment in the autonomous region. In order to tackle this problem, the security apparatus will take advantage of the current shambolic state of the nation - a national “housing lottery” will be established to “randomly” assign housing units to the unhoused in the nation. Winners will be selected “randomly” (they will be chosen based on ethnicity). Coincidentally, almost every time housing opens up in the Autonomous Region of Kosovo, Serbian or Croatian citizens will be chosen and assigned, with their relocation to be facilitated by the KNOJ and UDBA. Over 2,000 Tito Towers will be built across the country for this initiative using the generous aide provided by the United States and Swiss Credit lines. Similarly, the current local population of Kosovo and Metohija will be the overwhelming benefactors of lottery drawings - aiming to relocate 350,000 Albanians to “Tito towers” that will be built across Slovenia, Croatia, and Bosnia over the next 25 to 30 years, eventually transforming Kosovo into a melting pot rather than Albanian majority.

Protests are expected. Upheavals of communities will likely foment some resentment to the government, and nationalism remains problematically a thorn in the side of the federation. On top of this, the effects of collectivization and rapid industrialization are bound to create shocks throughout a nation of mostly villages. The Directorate for State Security (UDBA) and People’s Defence Corps of Yugoslavia (KNOJ) have been tasked with ensuring the reshuffle occurs with minimum disruptions to Yugoslavian civic life, and minimal information makes it out to neighboring nations. As such, UDBA has begun drawing up plans for the resettlement of over 200,000 Serbs and 100,000 Croatians to the province over the course of the next 30 years. 

To combat instability, the Directorate of State Security (UDBA) will be creating a regional command system across the country, establishing independent HQ’s in each socialist republic and socialist autonomous province. The command centers of each SR and SAP will be able to act independently with full authority of the federal government, adapting to local conditions as needed at the discretion of local commanders - allowing officers on the  ground to determine the security policies needed to maintain order.

The Carrot

(aka please stop hating the government we haven't actually done anything)

Protests in Israel began in September, aiming to release "the Six", enforce a non-aligned neutralist policy, and change the name of the state back to “State of Israel”. The government, for the time being, held firm. Dayan, Makleff, Eilat, Shiloah, Herzog, and Livneh remained in Shin Bet custody.

After the merger of Maki and Mapam on October 28, and a few days later the Knesset voting to move the capital of Israel to Jerusalem, things began to rush forth. The vast condemnation from the West on the topic, including the religion-based criticism from the Church and other Catholic states, caused a serious rallying effect among Zionists, as no Zionist worth his salt would side with the Westerners on the topic of internationalisation. Even the most die-hard anti-communist celebrated Mapam’s move of the capital, and the more apolitical and moderate Zionists still thought that perhaps Dr. Sneh and Mapam “can’t be that bad”, further solidifying their dyed-in-the-wool Zionist bona fides.

Nevertheless, protests still continued, both in Tel Aviv and now in Jerusalem. On November 3, twelve MKs of Mapam issued a statement announcing their departure from Mapam due to the merger with Maki. Although these MKs were members of Ahdut HaAvoda, they did not receive the backing of the rest of HaAvoda, with Yitzhak Tabenkin instead denouncing them for “turning their backs on Israel”. Although they were offered by Moshe Sharett to join Mapai, they instead opted to form their own Hebrew Labour Party (Miflaget ha'Avoda ha'Avrit/מפלגת העבודה העברית), defending both Marxism and most of Mapam’s ideology but rejecting it for accepting Arab membership and its alignment with what they considered the “a-Zionist Maki”.

Although the Army for the Defence of Israel was already dominated by Mapamniks, after the arrest of Dayan and Makleff, those who had been in Irgun, part of the General Zionists, or loyalists to Ben-Gurion resigned. Meanwhile, Yisrael Galili and Yigal Allon, the two Mapam leaders of the Ground Forces and Palmach respectively, ensured that the replacement officers were already men of Palmach, kibbutz, or largely Labourist backgrounds, loyal to Mapam’s cause.

—

Mapam Gives In?

Ben-Gurion’s retirement from MAPAI left it headless, although in his absence their own quadrumvirate had sprung up: Golda Meir, Moshe Sharett, Yitzhak Ben-Zvi, Abba Hushi. The four had become three of the most sharpest critics of the imprisonment of the Six, but after the U.N. resolution for the internationalisation of Jerusalem, the move of the capital, and the mass Western condemnation of it, their position had softened just slightly.

MAPAM had always been in favor of coalition with MAPAI, and this had been offered after MAPAM’s electoral victory, but shot down in an instant by Ben-Gurion. Dr. Sneh meanwhile knew the buzz in the streets, and knew that he had to be “the most Zionist” to shore up support from amongst the dissenting population. Israel was a democracy, and a hand had to be extended. MAPAI still controlled the Histadrut with Pinchas Lavon, but there was a real fear amongst MAPAI that MAPAM would take the next Histadrut election, perhaps opening it up to Arab membership.

Abba Hushi was an old friend of Meir Ya’ari, having both been in Hashomer Hatzair, and had a long history together. Hushi was also a more average, non-partisan Labour Zionist, focusing more on simple socialism and Zionism than necessarily choosing a side. Ya’ari met with him, gave him a rundown of Mapam’s positions, asking him to put a good word in. As an added bonus, he was stated that if Hushi could secure MAPAI’s support, MAPAM would endorse him for the next mayoral election in Haifa in two years, securing his victory easily. Moshe Sharett, meanwhile, was not anti-Soviet, but nor was he truly pro-Soviet. He was a strict neutralist, and was willing to return MAPAI to both government in support of MAPAM, as well as to rejoin the Israel-USSR Friendship League, as long as MAPAM was willing to actually give reassurances and compromise with MAPAI. Despite his own reservations, Sharett knew that in reality MAPAM had not yet done anything to “communize” Israel, the Constitution was genuinely democratic, and MAPAM had already made multiple statements that “Israel’s material conditions means that socialism in Israel cannot and will not like that of the Soviet Union.”

A semi-secret meeting was called in late November. For MAPAM: Sneh, Ya’ari, Tabenkin, Sadeh, Galili, Allon. For MAPAI: Sharett, Meier, Ben-Zhvi, Hushi, Lavon, and Dov Joseph. They debated thoroughly and furiously, eventually resulting in a eight point agreement:

1. Establishment of the "Alignment for the Unity of the Workers of the Land of Israel" as coalitional/organizational body, which is to include both MAPAI and the Democratic List of Nazareth.
2. Release of Eilat, Shiloah, Herzog, and Livneh. Their arrests were based on the testimony of Dayan and Makleff, who will undergo military trial. Sadeh, Galili, and Allon state that the military truly have reason to believe that Dayan and Makleff were acting as spies and had begun a conspiracy to overthrow the government, not to mention the affair during Operation Danny in which Dayan withdrew and abandoned the Givati Brigade to face an Egyptian attack on their lonesome, in which he was originally was intended to be disciplined for.
3. Total opposition to any kind of internationalisation of Jerusalem, opposing the hostile rhetoric and anti-semitic rhetoric coming from forces such as the Catholic Church.
4. MAPAI's Pinchas Lavon secured as head of Histadrut for the next elections, promise to not open Histadrut membership to Arabs, Palestine Labour League secured and protected.
5. Securement of a truly non-aligned and neutral foreign policy.
6. MAPAM, as part of Alignment, will not put forth their own candidates for Mayor of Haifa and Mayor of West Jerusalem, allowing MAPAI to take them easily in the next municipal elections.
7. Giving Minister of Health, Minister of Labour and Social Security, Deputy Prime Minister, Minister of Welfare, Minister of Finance to MAPAI. Creation of a separate Ministry of Education to give also to MAPAI.
8. Ben-Gurion promised to not be touched, and to be given direct government protection.

[NOTE, ALL OF THIS AGREEMENT IS SECRET]

Eilat, Shiloah, Herzog, and Livneh were released on November 19, with it being declared that Shin Bet had been “misled by certain accusations directed against them by Dayan and Makleff, in which they were accused of having participated in a hostile anti-Zionist plot.”

Alignment for the Unity of the Workers of the Land of Israel/Palestine (HaMa'arakh LeAhdut Poalei Eretz Yisrael) was officially founded on December 1, with Moshe Sharett declaring that MAPAI had worked and successfully ensured the release of the innocents from prison, as well as being assured the MAPAM was genuinely committed to Zionism, to neutrality in the Cold War, and to a genuine and democratic socialism for the workers of Israel. Later that same day in Jerusalem, Sneh announced a reshuffle in the cabinet:

• Prime Minister: Moshe Sneh (MAPAM)
• Deputy Prime Minister: Moshe Sharett (MAPAI)
• Minister of Foreign Affairs: Nahum Nir (MAPAM)
• Minister of Culture: Ya'akov Zerubavel (MAPAM)
• Minister of Education: Golda Meir (MAPAI)
• Minister of Defence: Yitzhak Sadeh (MAPAM)
• Minister of Agriculture: Aharon Zisling (MAPAM)
• Minister of Rationing and Supply: Shmuel Mikunis (MAPAM)
• Minister of Finance: Abba Hushi (MAPAI)
• Minister of Trade and Industry: Yisrael Bar-Yehuda (MAPAM)
• Minister of Health: Yisrael Guri (MAPAI)
• Minister of Immigration: Meir Vilner (MAPAM)
• Minister of the Interior: Mordechai Bentov (MAPAM)
• Minister of Communications: Zvi Lurie (MAPAM)
• Minister of Justice: Pinchas Rosen (Progressive)
• Minister of Labour and Social Security: Pinchas Lavon (MAPAI)
• Minister of Police: Bechor-Shalom Sheetrit (SOC)
• Minister of Religions and War Victims: David Livschitz (MAPAM)
• Minister of Transportation: Eliezer Preminger (MAPAM)
• Minister of Welfare: Dov Yosef (MAPAI)
• Minister of Womens’ Affairs: Rachel Cohen-Kagan (WIZO)
• Minister of Minorities: Aharon Cohen (MAPAM)

Dr. Sneh gave a long winding speech celebrating the new cabinet, Alignment, and that now finally once again the "a totally unified workers' government had been formed". Shmuel Dayan, father of Moshe, was unsurprisingly shocked and flabbergasted, and immediately announced his withdrawal from MAPAI and his intention to stay in opposition by joining the General Zionists.

Perhaps to better fit within Alignment, the Fighters' List had met on November 29 and agreed to change their name to "Socialist Fighters' Party" (Miflaget HaLohmim HaSotzialistim/מפלגת הלוחמים הסוציאליסטים), although their position in Alignment is still not represented with any positions in government.

The Italian intelligence apparatus has quietly been reestablished as of 1949 into a military focused agency, the Intelligence Service of the Armed Forces (SIFAR).

The agency in turn will be split into three Intelligence and Current Status Sections (SIOS) for the Army, Navy, and Air Force. Operating with intelligence and police powers within their armed forces, in conjunction with SIFAR.

While ostensibly military-focused, the collection and national security aspects of the SIFAR will be expanded...as required to other areas of 'relevant' national security.

DATE: 12 November 1949

MEMORANDUM TO: Roscoe H. Hillenkoeter (DCI), Harry S. TRUMAN (POTUS)

FROM: Chief Analyst, European Affairs

SUBJECT: THE ARMING AND ORGANISATION OF ANTI-COMMUNIST ELEMENTS WITHIN ITALY

The present situation in italy can be called a precarious one, the prevalence of communist elements within the country has a long spanning history dating back to the aftermath of world war 1, with high Union density and labour militancy, the team heading up the operation in European Affairs has come to the conclusion that this could seriously jeopardise our position in Europe.

A contingency and containment plan, codenamed Operation GLADIO had been formulated, consisting of forming Stay behind forces consisting of loyal anti-communist elements within Italy. We have also seen fit to establish the infrastructure required to back this force, such as arms caches hidden all across the nation, with knowledge of the location of these caches being given to local paramilitary leaders.

We have complete faith in the programs success but to err on the side of caution we have used this initial step as a trial run before expanding the program, we are seeking to expand this to France, west Germany and Turkey if good results come from this

October 1949

The civil war in China is heading towards the inevitable collapse of the Nationalist government on the mainland. Defeated soldiers, refugees and capital are fleeing south towards Burma, Laos, Hong Kong, and various Southeast Asian countries.

At the beginning of October, Chancellor Phibunsongkhram announced the Kingdom's new policy to Parliament, after consulting the National Security Council:

"Thailand is not a party to the war in China, and will not become one. Our territory will not be used by any side, our frontiers will be defended, and those who come to us in need will be treated with umanity. To those who wish to build a new life in Thailand, obey its laws and contribute to its progress, the Kingdom is open."

Neutrality and Internment

By royal decree, Thailand declares its neutrality in the conflict in China, and applies the established rules of neutrality to any armed forces entering its territory:

• Foreign soldiers who cross into Thailand will be disarmed and interned. They will be fed, housed and treated humanely, but may not leave the internment camps or tanke any part in military or political activity.
  
• Weapons, vehicles, ammunition and equipment brought into the Kingdom will be held by the Royal Thai Government, against the cost of internment
• Military aircraft landing in Thailand, and warships entering Thai ports beyond the time permitted by international law, will be interned with their crews
  
• Interned soldiers may leave Thailand for a country willing to receive them, once arrangements are made. Thailand will cooperate with friendly governments to arrange their departure
  
• Interment camps will be run by the Royal Thai Army and the Ministry of the Interior, under the inspection of the Auditor-General. No official may trade with interned soldiers or profit from their property.

The Northern Frontier

Thailand does not share a border with China, but the conflict may easily spill across the borders of Burma and Laos. The Royal Cabinet has therefore ordered the following:

• The 3rd Field Army is to strengthen its posts along the frontiers with Burma and Laos, from Mae Sot to Chiang Saen and Nan
• The 1st Special Commando Squadron at Chiang Mai and the 2nd at Nan are to watch the border crossings
• Village Guard companies in Chiang Rai, Chiang Mai, Nan and Mae Hong Son will be placed on alert, and the first frontier settlements at Chiang Saen, Mae Sai and Fang are given top priority.
• The Air Force's 7 Wing at Chiang Mai are to patrol the frontier.
  

Thailand asks that all parties respect our frontiers and those of our neighbors. No foreign forces, of any side, may enter Thai territory in pursuit of another. Thailand will cooperate with Burma and with the authorities in Laos to keep the frontier region at peace.

Refugees

• Civilian refugees who reach the Kingdom will be received in temporary camps in Chiang Rai and Chiang Mai, with food, shelter and medical care, with the help of the Thai Red Cross.
• No refugee will be returned against his will to a place where his life or freedom would be in danger.
• Every refugee will be registered and screened by the police for security
• Thailand will seek the help of friendly nations and international organizations to resettle refugees who cannot remain
• The general quota for Chinese immigration is set at 200 persons a year. The program below is a separate and limited exception
  

The New Citizens Program

The Kingdom will welcome men and women from China who bring capital, enterprise or skill to its development, under a new Special Residence and Investment Program. This is for the following people:

• Investors who bring a large sum in capital to invest in an industry approved by the Investment Promotion Office
• Skilled persons like engineers, technicians, doctors, scientists, teachers, managers and craftsmen in trades the Kingdom needs.

We also will have a focus on taking people in our priority industries. This includes textiles and garments, shipping and shipbuilding, machinery and engineering, flour and food processing, rubber goods, pharmaceuticals, chemicals, and banking and insurance.

Thailand will offer the following:

• Residence for the applicant and their family and Thai citizenship after 5 years of lawful residence
• The benefits of the Industrial Investment Promotion Act: tax holidays, permission to remit a share of profits, and protection from nationalization
• Land in the provincial industrial towns, and priority credit for approved projects
• Capital may be brought into the Kingdom through Thai banks, and deposits in foreign currency will be accepted and protected

However there are some conditions that must be followed:

• Every enterprise must register with the Investment Promotion Office, and have Thai partners and Thai staff, and train Thai workers
• Children of new residents will attend Thai schools
• Every applicant will be screened for security, and must take an oath to respect the Kingdom's laws and Constitution
• No political activity on behalf of any Chinese party is permitted. Branches of foreign political parties are prohibited in the Kingdom.

The Investment Protection Office will open a branch in Hong Kong to receive applications.

Technical Specialists

Under the same program, the Kingdom will offer contracts of up to 5 years to qualified specialists, with the possibility of citizenship at the end of their service:

• Pilots, flight instructors and aircraft mechanics, as civilian instructors to the Air Force's Training Command and Thai Aviation Industries
• Marine engineers, radio operators and shipwrights, for the Navy's training schools and the dockyards
• Engineers, doctors, nurses, and teachers for the technical colleges, hospitals and new industries.

All specialists serve as civilians, after security screening. They may not hold command in the armed forces, unless given special permission by the government.

The chairman of the currently state owned, but privately operated oil company Agip, Enrico Mattei, has announced the discovery of oil and methane in the soil of the Po Valley. This discovery, causing Agip shares to explode in value, has bolstered an air of energy optimism inside the country.

Mr. Mattei has used his pedestal to push for a full-scale transition away from coal and towards natural gas, which is expected to be subsidized by the government for energy generation as time moves on.

[S] There is not...too too much oil but a decent amount of natural gas in the Po Valley, and it is being spun more for PR purposes than any kind of gold-rush situation. It certainly does help Mr. Mattei though...

--- Total Defense of a Sovereign Nation ---

No individual weapon, stratagem, or military genius is sufficient to secure the defense of a free state. Only the trained, wild courage of the individual soldier, enabled to the maximal degree by all cohorts of leadership, industry, and civil society, is capable of delivering victory.

To finance the improvement of the military, the reduction in the overall size of the force is needed, while still retaining the capacity to mobilize significant forces for the defense of the country. These improvements will take time, as they will be limited by the fiscal realities of the state.

--- The Soldier ---

India is, as determined by its geography, a continental power. The defense of the nation is predicated on the capacity of the Army to bring victory in the field. As such, all discussion of defense must start around the needs of the individual infantryman, who serves as the foundation of all combat power; with all arms, and branches being an extension of and subsidiary to his needs.

He will serve under Officers and NCOs that speak his language, and in conditions coherent to his cultural upbringing. The Esprit du Corp of the Army is founded upon this bond between soldier and unit; the regimental model being the framework for this dynamic. The traditions of the regiment construct the worldview of the fighting man, preparing him for the mortal conditions of combat.

Local regiments shall be recreated across the country, with appropriate depot infrastructure created, so that all soldiers can benefit from this locality.

Soldiers shall be well compensated. Signing bonuses, discharge stipends, pensions, and adequate pay based on rank. Compensation forms the basis for the social and personal commitment to military service.

A minimum term of 9 years shall be enacted, with at least three of it being active duty. (3-6-9) Reserve service shall be performed with a soldiers local regiment. Soldiers shall be paid for reserve service. Full regular pension eligibility begins at 21 years total service.

Dedicated combat arms schools and environmental schools shall be established to prepare soldiers for their role, and the their expected operational conditions, beyond basic training conducted with their regiment. A jungle warfare school shall be established in Mizoram. The ski school at gulmarg shall be moved to Uttarakhand and renamed the "Mountain warfare school".

--- Their Leaders ---

All officers shall go through the same basic regimental training as all other soldiers before attending military academy as cadets. New academies shall be established for the Navy and Airforce.

A War college shall be created for the training of officers transitioning from tactical to operational and strategic command.

--- Their Equipment ---

Uniforms, footwear, seasonal clothing, and personal hygiene kit is a principle concern of the army. Improved versions of all such pieces shall be investigated to replace legacy colonial era stuffs, and will be procured domestically.

The platoon shall be reorganized to incorporate the maximal density of combat tools applicable to a units role. The procurement of surplus 2" mortars, sten gun mk5s, and no.32 sniper scopes shall be made from the commonwealth to maximize the tactical capacity of these units, at minimal cost. Production of these implements domestically shall be investigated. A new Anti-tank round shall be developed for the 2" mortar, to provide maximal versatility to the platoon.

The company shall incorporate organizational lessons learned fighting alongside america in Burma and italy. Radios shall be procured to equip every company, with field telephones for subordinate platoons. Surplus ML 3-inch mortars and Vickers guns will be procured from commonwealth allies, to form the base of company firepower. Domestic production will be investigated for these implements.

Procurement of additional surplus 4.2" heavy mortars shall be made from the commonwealth, America, to form the base of Battalion firepower. Domestic production will be investigated. Potential replacements of the legacy PIAT system with a longer ranged, still man portable AT weapon will be investigated. An Anti-tank round, and a direct lay sight will be developed for the 4.2" mortar as a stopgap.

Investment in the creation of a herd of army mules will be made, to enable logistics for light infantry brigades in environments unsuitable for motorization. For motorized units, development and adoption of a Carden-Loyd based prime mover shall be endeavored to fulfill this role.

Procurement of surplus M2 browning machine guns, on anti-aircraft mounts will be made from the Commonwealth, America for tactical air defense of light infantry brigades.

Surplus 17 pounder AT guns will be purchased from commonwealth to improve at capabilities of motorized brigades. Light infantry brigades will rely on lighter man portable systems.

Additional Auster V aircraft will be secured for battlefield medivac, and artillery spotting duties.

Surplus Commonwealth sherman tanks will be procured to provide battlefield support to the infantry, with a platform india is capable of operating within current means.

The creation of mechanized brigades shall be accomplished through the scale adoption of the universal carrier, and domestic production of this platform shall be investigated.

Reconnaissance and Armored cars shall be procured from the commonwealth to support motorized brigades, tank formations.

Surplus half and three-quarter ton trucks will be procured to perform logistics, scouting, ambulatory, and signals tasks. Domestic production will be investigated.

Additional trucks and trains suitable for indian conditions will be purchased from commonwealth, american surplus.

Additional C-47s shall be procured from commonwealth, american surplus to provide flexible and responsive operational logistics to light and motorized brigades

--- The Airforce ---

The Dual role of the airforce shall primarily be the nullification and destruction of the enemy airforce, and the operational, tactical support of the Army. Given Indias economic limitations, the procurement of as small a supply of platforms should be made to fulfill these roles, and the force should be designed to fulfill its operational objectives within sortie limitations imposed by numbers of available aircraft and pilots.

As such, strategic and operational reconnaissance, interception, air superiority, and airfield denial should be the principle mission of the force, ancillary roles of operational and tactical air support being opportunistic missions.

To fulfill this, four systems are needed: A multi-role fighter, with light reconnaissance variant, a survivable bomber, a strategic reconnaissance platform, and a training aircraft. Surplus items that are suitable to task, but are not prohibitively expensive to procure and maintain are a must.

For the fighter, two options: The Hawker Tempest, or the North American Mustang are available. Which is chosen is largely dependent on diplomatic considerations.

For the Bomber: the Curtis Helldiver is the obvious choice, being individually inexpensive, and capable

For strategic reconnaissance: the De Havilland Mosquito is available and suitable, though replacement shall need to be investigated immediately

For training aircraft: the American T-6 Texan is another obvious choice.

Construction of new airbases and storage hangers shall need to commence to accommodate these systems.

Construction of beginner, advanced, and role specific pilot training infrastructure shall be needed.

--- The Navy ---

The role of the navy is threefold: the support of ground units, maritime local defense in littoral, riverine environments, Commerce protection and ASW, and strategic commercial interdiction of local adversaries.

Given the current fleet, the biggest procurement needs to fulfill these roles will be in fast gun and torpedo boats, as well as the formation of a submarine force capable of both blue and green water operations.

For submarines, a 3-strong floatilla of short hull subs would be adequate to deny specific harbors adversaries; and have enough hulls that one is always available. British S, U, and V class submarines are the best candidates for this role. Diplomatic considerations will need to be made to ensure the maritime powers of Indias protection of neutral trade in the event of crisis.

For fast attack boats, numerous classes of british and american MTBs and MGBs are available, and are individually cheap enough to enable large orders. A target strength would be 2 flotillas of MTBs for littoral duties, and 2 flotillas of MGBs for riverine service.

November 10th, 1949

The following was leaked to Haaretz, an internal bulletin to all VADAM agents, directly from director Shiloni:

“It is a simple fact that the Western Powers have proved incapable of dealing with the Nazi war criminals. They have sheltered them, they have allowed them to escape through “rat lines,” and they have committed no resources to prosecuting them, outside of a pittance and Nuremberg. How many killers and monsters now walk free on the streets of New York, of Madrid, of Cape Town?

What are the richest nations of the world, the standard-bearers of liberal democracy, doing to hunt down the butchers of Auschwitz? Nothing. We, the emissaries of the Jewish state, do what the West has no interest in.

We will not rest until every Fascist monster is brought to justice. We will not rest until the noose is around the neck of every butcher who brought his fellow man to the slaughter.

This is not an empty threat, but a promise.

Any Fascist caught outside of Israel will be extradited and tried in the Jewish state for their crimes. We, as the primary victims of the great tragedy of the 1940s, have universal jurisdiction. The primary job of VADAM is to hunt down these criminals and bring them to justice. This is our doctrine, our pledge. Our duty. “

The text was immediately circulated in all major Israeli newspapers.

This was, of course, an intentional leak. Within the week, everyone in Israel was talking about VADAM.

Ottawa, 20 September 1949

The Government of Canada announces the implementation of a supplementary financial agreement with the United Kingdom, designed to protect Canadian commercial interests following the British Government's decision to devalue sterling from US$4.03 to US$2.80 on 18 September 1949.

The agreement, negotiated during the Extraordinary Anglo-Canadian Financial Conference held in London on 22 August 1949, supplements the Anglo-Canadian Agreement Concerning Sterling Trade, Commercial Settlement and Revolving Credit, concluded on 18 March 1949.

The Canadian delegation, headed by Minister of Finance Douglas C. Abbott, secured British agreement to preserve the Canadian-dollar value of qualifying sterling balances reserved for the purchase of British goods and services. The arrangement is intended to prevent the recent monetary adjustment from diminishing the value of funds already committed under the existing Anglo-Canadian commercial settlement framework.

Protection of Canadian Sterling Reserves

Under the March agreement, Canada had undertaken to reserve thirty per cent of designated Canadian-held sterling balances for purchases of British goods and services. The subsequent depreciation of sterling threatened to reduce the Canadian-dollar value of these reserves, potentially impairing Canada's ability to obtain the machinery, equipment, and manufactured products for which the funds had been allocated.

The supplementary agreement establishes a mechanism through which the United Kingdom will compensate Canada for qualifying exchange losses arising directly from sterling devaluation.

Compensation will be calculated by comparing the Canadian-dollar value of eligible sterling balances immediately before devaluation with their value under the revised exchange arrangements, accounting for any corresponding adjustment to the Canadian dollar.

Rather than issuing additional sterling to Canadian accounts, His Majesty's Treasury will provide compensation through two mechanisms:

1. British export-tax remissions: Reductions or remissions of applicable British export duties on qualifying purchases.
2. Treasury-financed export price rebates: Where applicable export duties are insufficient or nonexistent, the British Treasury will provide supplementary rebates against the price of eligible British goods and services.

The combined value of these concessions will be limited to the verified exchange loss, ensuring that compensation restores the value of Canada's designated reserves without creating an additional commercial subsidy.

The arrangement will not increase Canadian indebtedness, require additional Canadian credit commitments, or entail the creation of supplementary sterling balances in Canadian accounts.

Commercial Purchases and Eligibility

To accommodate the considerable distances, shipping requirements, and administrative procedures involved in Anglo-Canadian commerce, both Governments have agreed that eligibility will be determined by the commencement of bona fide purchase negotiations during the calendar year 1949, rather than by the date of delivery.

Canadian purchasers who can demonstrate that negotiations for eligible British goods or services commenced before 31 December 1949 may therefore qualify for the agreed compensation even where contracts, deliveries, or final settlements occur during 1950.

Documentary evidence, including commercial correspondence, requests for quotations, preliminary offers, purchase orders, and contractual records, will be used to establish eligibility and determine the appropriate compensation.

The Government anticipates that these provisions will facilitate Canadian purchases of British industrial machinery, agricultural equipment, electrical apparatus, railway equipment, and other manufactured goods, while contributing to the recovery of British export industries.

Preservation of the Revolving Credit Facility

Both Governments have further reaffirmed the financial provisions of the March 18 agreement concerning trade with India and other approved sterling-area destinations.

The Canadian-dollar revolving credit facility will retain its existing limits:

• Initial authorization: C$10,000,000
• Maximum outstanding exposure: C$20,000,000

Neither the devaluation of sterling nor the supplementary agreement will automatically alter these authorizations. Any subsequent modification of repayment, settlement, or other financial obligations will require the mutual consent of both Governments.

The existing Anglo-Canadian joint financial machinery, supported by the Department of Finance, His Majesty's Treasury, and the appropriate monetary and exchange-control authorities, will oversee the verification of eligible balances, calculation of compensation, and administration of export-tax remissions and rebates.

Anglo-Canadian Economic Cooperation

Minister Abbott welcomed the agreement as an important demonstration of continued financial cooperation between Canada and the United Kingdom during a period of considerable international monetary uncertainty.

While recognizing the necessity of Britain's measures to strengthen its external financial position, the Canadian Government has maintained that previously negotiated commercial commitments should not be unnecessarily impaired by subsequent exchange-rate adjustments.

The supplementary arrangements preserve the essential provisions of the March agreement while accommodating Britain's desire to avoid increasing the quantity of sterling outstanding.

The Government considers the agreement particularly valuable in conjunction with Canada's own recent adjustment of the Canadian dollar to approximately US$0.9091, which has partially moderated the consequences of sterling depreciation for Canadian commerce.

Canada will continue to cooperate with the United Kingdom in promoting Commonwealth trade, facilitating British economic recovery, and maintaining confidence in the international financial system.

The supplementary agreement, having been accepted by both Governments, is now operative following the implementation of sterling devaluation. Its provisions will remain applicable to qualifying 1949 transactions until the associated claims have been settled in accordance with the agreed procedures.

10 November 1949, Baghdad, Iraq

The Al-Ayyubi premiership, after having risen to governance amid the chaos of the Nuri administration’s collapse, as well as the devaluation of the Sterling, has desperately sought from its own economists and technicians new solutions to keep its own cabinet afloat.

It had been incessant weeks since July without any new solution – until a telegram arrived from Basra: the Iraq Petroleum Company was notified that Basrah Petroleum Company had just found a new oil field in Zubair.

The Zubair Development Program

Following the confirmation of the existence of an oil field, the Iraqi government has declared that, in accordance with the 1938 concession, the British will hold extraction rights across the southern region for a seventy-five-year term.

The government, under a joint capital expenditure program committed by the BPC, as well as through government loans, will invest a total of £18.5 million British pounds to cover reservoir delineation, deep drilling operations into the Cretaceous sandstones, the installation of gathering and degassing facilities, and dedicated export conduit works. The objective will be the creation of six distinct extraction zones in the oil field.

The plan, delineated in a meeting with BPC executives, will be for the drilling and completion of 30 operational wells throughout these designated zones with a total baseline yield of 150 metric tons per wellhead; the goal, as emphasized by the Iraqi economists, is to achieve an eventual export target of 250,000 barrels per day.

The transportation of Zubair crude to international markets will be facilitated by a dedicated 74-mile trunk pipeline running southeast from the field degassing stations to the Shatt-el-Arab estuary at Fao. This terminal at Fao is already being planned to undergo expansion, including through the incorporation of crude storage tank batteries, high-throughput pumping units, and specialized jetty moorings capable of servicing deep-draft ocean-going oil tankers.

The objective is for commercial exports to commence by November 1950 at the latest, with tolerance for up to March 1951.

Alongside this phenomenal expansion of Zubair – which has been celebrated by the Regent as a “good thing in a horrible year”, the Iraqi government has announced that it will support BPC and the IPC in exploring potential oil fields in Rumaila, directly west of Zubair, as well as in the northern territories, including in the Nineveh region, around Butma, and the regions of Bay Hasan and Jambur.

Sources:

[M] There are two main sources I used for maximum potential objectives, as well as for a general historicity anchor, though I am innovating in some aspects here by throwing a bit more money around to maybe expedite the production of this oil field. [\M]

The Petroleum Engineer, vol. 25, no. 12 (November 1953): A-67.

The Oil and Gas Journal. (1951, December 13). 50(32), 66–68.

Ottawa, 10 June 1949

The Government of Canada has welcomed the decision of the Board of Transport Commissioners granting the Interprovincial Pipe Line Company (IPL) leave to construct a petroleum pipeline from Edmonton, Alberta, to Regina, Saskatchewan. The authorization, issued following hearings held in Ottawa on 7 June, represents a significant step toward establishing a permanent means of transporting the growing petroleum production of Western Canada to markets beyond Alberta.

The discoveries at Leduc in 1947 and Redwater in 1948 have substantially altered the prospects of Canada's petroleum industry. Production has increasingly outgrown the capacity of nearby markets, while the expense of transporting crude oil over long distances by railway has imposed limitations upon further expansion. The proposed pipeline will provide a continuous, high-capacity connection between Alberta's producing fields and Saskatchewan's refining and distribution facilities, forming the first stage of a larger system intended ultimately to reach the Great Lakes.

The Edmonton–Regina Section

The authorized undertaking will extend approximately 450 miles from the Edmonton district southeastward across Alberta and Saskatchewan to Regina. The line is being designed to accommodate substantial volumes of crude petroleum, with provision for pumping stations, storage and associated terminal facilities.

Construction of the pipeline itself is not expected to commence immediately. Interprovincial Pipe Line Company will first undertake the engineering, procurement and land arrangements necessary for the project, with the objective of beginning substantial construction during the 1950 season.

Preparatory operations will include detailed ground surveys along the proposed right-of-way, negotiations with landowners for easements and access, investigations of river and railway crossings, and preparation of specifications for pumping stations and associated equipment. Particular attention will be given to the procurement of suitable steel pipe, pumping machinery and other materials required for construction on the Canadian Prairies.

The Government has also encouraged arrangements for the greatest practicable participation of Canadian industry in supplying the project. Canadian steelmaking, pipe fabrication, railway transportation and construction enterprises are expected to benefit from the undertaking, subject to commercial availability and satisfactory contractual terms.

The Department of Trade and Commerce, under the Honourable C. D. Howe, will remain in communication with the company and interested industrial suppliers concerning material requirements and the removal of avoidable difficulties in procurement.

Extension to Lake Superior

Although the Edmonton–Regina section has now received approval, the proposed continuation of the pipeline eastward to Lake Superior remains under consideration.

Two principal alternatives are being examined.

The Canadian Route — Regina–Winnipeg–Fort William/Port Arthur

Under the first proposal, the pipeline would continue eastward across Saskatchewan and Manitoba, passing through or near Winnipeg before proceeding through northwestern Ontario to the Canadian Lakehead at Fort William and Port Arthur.

This alignment would retain the principal pipeline entirely within Canadian territory and establish a direct petroleum transportation connection between the producing fields of Alberta, the Prairie provinces and the Great Lakes.

It would also offer opportunities for industrial and transportation development in Manitoba and northwestern Ontario, including petroleum storage installations, terminal facilities and connections with Great Lakes shipping.

The principal difficulties concern the greater length of the route, the terrain of northwestern Ontario and the additional expenditure required to carry construction to the Canadian Lakehead.

The International Route — Regina–Gretna–Superior, Wisconsin

The second proposal would carry the pipeline southeastward through Manitoba to the international boundary near Gretna, thereafter crossing Minnesota and terminating at Superior, Wisconsin, on Lake Superior.

From Superior, crude oil could be transported by lake tanker to the refining centres of southern Ontario, particularly Sarnia.

Preliminary engineering considerations suggest that this alignment may offer savings in initial construction expenditure and certain logistical advantages. It would, however, require the construction and operation of a substantial portion of the system within the United States, together with the necessary arrangements concerning international transportation and jurisdiction.

Further Examination

The Government has requested that the commercial, engineering and national economic considerations attending both routes receive full examination before the eastern extension is settled.

The assessment will consider construction and operating costs, prospective petroleum throughput, the availability of Canadian materials and labour, access to existing refineries, financial arrangements, and the long-term requirements of the Canadian petroleum industry.

Particular attention will be paid to the economic implications of the Canadian alignment and the possibility of coordinating its construction with other public and private infrastructure improvements.

The Governments of Manitoba and Ontario may be consulted regarding the availability of suitable rights-of-way, terminal sites, supporting infrastructure and other measures that could improve the economic feasibility of the Canadian route.

Neither alternative has yet received final approval under the present announcement. Any extension beyond Regina will require the appropriate application and consideration by the Board of Transport Commissioners, together with satisfactory financial and commercial arrangements.

A New Canadian Petroleum Industry

The Government regards the development of Western Canada's petroleum resources as a matter of considerable national importance. Increased domestic oil production promises to reduce Canada's dependence upon imported petroleum, strengthen the balance of payments, encourage industrial development and provide new markets for Canadian transportation and manufacturing enterprises.

The Edmonton–Regina authorization provides a practical beginning toward these objectives.

The immediate task is to complete the preparatory work necessary to place the first section under construction. At the same time, the Government and the Interprovincial Pipe Line Company will continue examining the means by which Alberta petroleum may most effectively be carried eastward to the Great Lakes and, ultimately, the principal consuming markets of Central Canada.

Paris and Versailles, 1–30 November 1949

Versailles had witnessed the rise and fall of kings, the proclamation of an empire and the gathering of assemblies charged with restoring France after defeat. Now its halls were being prepared for a presidential election which the Republic had never expected to hold. Barely three years had passed since the adoption of the Constitution, and Vincent Auriol's resignation had left Parliament confronting a vacancy of its own making. Throughout October, the deputies had invested three successive presidents of the Council without permitting any of them to form a government. The Socialists, Radicals, Christian Democrats and Independents continued professing their attachment to republican government, but their agreements had dissolved whenever the allocation of ministries brought the question of political authority into dispute. Édouard Herriot exercised the presidency provisionally under Article 41, with the constitutional obligation to secure the election of a successor within ten days. No party wished to bear responsibility for another failure, but neither was there agreement upon the man who ought to succeed Auriol. Within the Radical Party, the first serious discussions centred upon Yvon Delbos, whose ministerial experience, republican convictions and comparatively conciliatory temperament made him an attractive candidate to deputies wishing to recover the political initiative lost during October. The Socialists examined the possibility of supporting Paul Ramadier, whose former premiership and experience in government offered considerable qualifications for the office, while some Christian Democrats considered Robert Schuman a figure whose international standing might restore confidence in the presidency. Among the Independents, Joseph Laniel attracted interest from parliamentarians anxious to prevent the election of another Socialist or Radical. Each possibility commanded respect within its own political circles; none offered an immediate prospect of reconciling the chambers.

The difficulty became apparent as the parliamentary groups began measuring the support available beyond their own ranks. Delbos enjoyed substantial goodwill among Radicals and certain republican moderates, but the MRP feared that his election might restore the political predominance of a party whose disagreements with the Christian Democrats remained unresolved. Ramadier's candidacy appealed to Socialists anxious to preserve their presence at the Élysée, yet the Independents and several Radicals were reluctant to entrust the presidency to another prominent SFIO figure immediately after Auriol's resignation. Schuman possessed considerable prestige, but his Christian Democratic affiliation and indispensable place in French foreign policy discouraged support among deputies unwilling to see the MRP emerge from Bidault's failure with the presidency itself. Laniel encountered still firmer opposition from the Left, whose representatives associated him with the conservative parliamentary forces resisting their demands concerning wages and social protection. Herriot's own name was mentioned in conversations among older Radicals, although his provisional responsibilities and the reluctance of other parties to encourage another candidacy closely associated with the political establishment limited the suggestion's prospects. Meetings which had begun with the intention of securing an agreement instead produced competing preferences, accompanied by the familiar assurances that no group intended to prolong the crisis. The presidential election threatened to become another exercise in parliamentary arithmetic, with every party possessing enough influence to obstruct its opponents but too little to secure its preferred candidate.

It was in the retreat from these more prominent candidacies that René Coty's name acquired importance. The vice-president of the Council of the Republic had not initially occupied the centre of the discussions, possessing neither Schuman's international prestige nor the leadership of a major parliamentary group. His supporters nevertheless recognized that precisely these limitations might permit him to succeed where better-known figures encountered resistance. Coty was an experienced Independent republican, sufficiently removed from the recent ministerial quarrels to offer the prospect of a presidency less burdened by their consequences. His previous ministerial service, parliamentary experience and reputation for moderation gave the Radicals grounds to consider him without placing the Élysée directly in the hands of the MRP or SFIO. The UDSR regarded his constitutional convictions as acceptable, while the Independents increasingly preferred a compromise within their own political family to a prolonged contest which might ultimately favour a Socialist or Christian Democrat. Mollet and his parliamentary colleagues remained conscious that Auriol's departure had deprived the SFIO of a position of considerable influence, and several deputies feared that an Independent president might encourage the formation of a ministry less favourable to social reform. Yet the experience of October also demonstrated the danger of allowing another constitutional office to become the object of the struggle over Labour and Finance. Coty's supporters consequently began obtaining assurances from deputies who would not necessarily have chosen him in the first instance, but who were willing to accept his election rather than expose the presidency to another prolonged deadlock.

On 7 November, Parliament assembled in Congress at Versailles with the competing preferences of the chambers still apparent. The opening proceedings reflected the division among those favouring Delbos, Ramadier and candidates associated with the Christian Democratic and Independent groups, while informal consultations continued among deputies and councillors seeking an outcome acceptable beyond their own parties. The inability of the more partisan possibilities to obtain a decisive following gradually strengthened the position of Coty, whose supporters could appeal to parliamentarians anxious to complete the succession without conceding the political direction of the next government. As the voting proceeded, support moved toward the Independent senator from Seine-Inférieure, drawing upon Radicals, UDSR representatives, sections of the MRP and deputies who had previously preferred another candidate. The majority required for election was eventually secured, and René Coty was proclaimed president of the French Republic. His proclamation brought a measure of relief to Parliament, which had spent the preceding month conferring confidence upon men unable to govern. The new president accepted the office without presenting himself as the representative of a victorious party, and the formal transfer of authority ended Herriot's provisional exercise of the presidency. France once again possessed an elected head of state. It still lacked a ministry capable of commanding the cooperation of the Assembly.

The offices of the Élysée received their new occupant with a formidable accumulation of unfinished business. Queuille's resigned ministers continued administering current affairs, the budgetary questions postponed during October still required attention, and the wage dispute which had destroyed the preceding government remained unsettled. Coty's initial consultations consequently concerned not only the parliamentary strength of possible candidates, but the willingness of the governing parties to agree upon a cabinet before another investiture was attempted. Queuille remained an important Radical figure, but the disagreements which had destroyed his ministry made an immediate return unattractive. Moch and René Mayer had already received the confidence of the Assembly without securing the participation of their prospective ministers, while Bidault's failure after obtaining 367 votes remained an especially bitter memory among the Christian Democrats. Coty therefore examined the possibility of entrusting the presidency of the Council to a politician whose position among the smaller republican groups might reduce the rivalry between the principal parties. René Pleven attracted increasing support in these discussions. His financial and administrative experience was familiar to the Radicals and Independents, while the UDSR's position within the RGR enabled him to maintain relationships extending beyond his own party. The Socialists had already worked with Pleven during the summer on questions of economic modernization and public administration, and Mollet considered him more receptive than certain Radical figures to the prospect of a government in which the SFIO exercised substantial responsibility over domestic policy. Coty invited Pleven to undertake consultations concerning the formation of a ministry.

The negotiations began with the question which had defeated three governments: who would direct the economic and social policy of the Republic? Petsche remained the preferred choice for Finance among Radicals and Independents, whose support depended upon the preservation of monetary stability. The Socialists, however, had spent October resisting arrangements which would leave the Ministry of Labour dependent upon decisions taken elsewhere, and their parliamentary group was determined that participation should produce more than another declaration of governmental intentions. Pleven approached Mollet, Moch and Daniel Mayer with a proposal intended to distinguish the restoration of collective agreements from the financial consequences of particular wage settlements. Labour would receive responsibility for preparing legislation to restore collective bargaining, while proposed adjustments affecting public expenditure and prices would be examined jointly with Finance and the economic ministries. Immediate assistance to lower-paid workers could be considered within identifiable budgetary limits, and the administration of nationalized enterprises would be reviewed without threatening the principle of public ownership or the investment obligations of reconstruction. Petsche accepted the basis for further negotiation, provided that the Treasury retained authority over expenditure and that the cabinet collectively approved measures with substantial monetary consequences. Mollet considered these limitations acceptable if they applied through genuine ministerial deliberation rather than allowing Finance to postpone the social programme indefinitely. For the first time since Queuille's resignation, the principal dispute was being translated into an arrangement concerning the exercise of governmental responsibilities rather than the unconditional victory of one department over another.

The Ministry of Labour remained the most difficult appointment. Daniel Mayer's continuation had become a symbol of the Socialist position during October, but the former minister understood that the party's programme could not depend indefinitely upon the restoration of his own office. He agreed to withdraw his claim on the understanding that Labour and Social Security would remain under Socialist direction and that the legislative undertaking concerning collective agreements would be incorporated into the government's programme. Pleven proposed Pierre Ségelle for the department, a choice which preserved the SFIO's responsibility while avoiding the personal dispute which had embittered relations between the Radicals and Socialists. Mollet received a separate offer to enter the government as minister of state attached to the presidency of the Council, participating in the coordination of the social and economic programme. The proposal was politically significant. As secretary-general of the SFIO, Mollet had been required to defend ministerial participation before a party increasingly dissatisfied with its influence under Queuille; entry into the government would make him directly responsible for the programme he had urged his ministers to pursue. He accepted after obtaining assurances that the arrangement would not diminish the statutory responsibilities of individual ministers and that disputes concerning the programme would be brought before Pleven and the cabinet. The Socialists would exercise influence through Labour, Interior, Industry, Public Works and the presidency of the Council, while the financial ministers retained the safeguards necessary to reassure the parliamentary centre.

The Christian Democrats, for their part, were unwilling to regard the failure of Bidault's investiture as sufficient reason to abandon the influence they had exercised over successive governments. Pleven therefore sought the agreement of the MRP leadership before completing his distribution of portfolios, consulting Bidault and Schuman concerning the continuation of foreign policy and the party's position within the new cabinet. Bidault remained dissatisfied with the manner in which the October negotiations had ended, but recognized that withholding MRP participation would leave the parliamentary centre without an effective majority and might expose the party to responsibility for another prolonged vacancy. The preservation of important Christian Democratic departments provided some reassurance, although the educational question remained contentious. The instructions adopted at the MRP's Strasbourg congress concerning assistance to families sending their children to private schools had not been withdrawn, and several deputies considered it necessary that participation in the new government preserve the possibility of pursuing those demands. The Socialists were equally unwilling to accept a commitment which appeared to authorize public subsidies to confessional education without parliamentary debate. Pleven consequently obtained agreement upon continued interparty examination of the question, leaving the existing arrangements undisturbed while the MRP prepared its proposals for further discussion. Bidault accepted this basis for cooperation without surrendering his party's objectives, and the Christian Democratic parliamentary leadership agreed to support the formation of the ministry.

Other appointments followed more readily once these principles had been accepted. Queuille agreed to serve as vice-president of the Council, lending Radical support to a ministry which would otherwise have been vulnerable to criticism from deputies anxious about financial stabilization. Moch retained Interior and a vice-presidency, preserving the continuity of the administration responsible for public order and the prefectures. Schuman continued at Foreign Affairs, while René Mayer obtained Justice, settling one of the disputes which had complicated Bidault's negotiations. Paul Ramadier returned to National Defence, a department he had directed under Queuille, and Yvon Delbos remained at National Education. The MRP retained substantial responsibilities through Pflimlin at Agriculture, Letourneau at Overseas France, Schneiter at Public Health and Pierre-Henri Teitgen, who accepted a minister-of-state position responsible for Information. Robert Lacoste remained at Industry and Commerce, Christian Pineau at Public Works and Transport, and Eugène Claudius-Petit at Reconstruction and Urbanism. The Independents retained representation through Petsche at Finance and Louis Jacquinot at Veterans and War Victims, while André Colin was entrusted with the Merchant Marine. Charles Brune's appointment to Posts, Telegraphs and Telephones strengthened Radical representation, and the subordinate departments were distributed among the governing parties to accommodate their parliamentary strength.

One of the less visible disputes concerned François Mitterrand, who had served at the presidency of the Council throughout Queuille's ministry and remained an active figure within the UDSR. His experience and association with Pleven made his continuation an attractive possibility, but the distribution of the junior offices had become increasingly important to securing the cooperation of the MRP and SFIO. Paul Bacon's appointment at the presidency of the Council formed part of the arrangement offered to the Christian Democrats, while Mollet's minister-of-state position already provided the Socialist leadership with a substantial role in coordinating policy. Pleven discussed the difficulty with Mitterrand, whose claim to continued office could scarcely be dismissed after his previous service. The UDSR nevertheless accepted that its control of the premiership and Claudius-Petit's responsibility for Reconstruction gave the party sufficient influence to justify concessions elsewhere. Mitterrand remained outside the ministry, continuing his political activity among the UDSR deputies and retaining an interest in the affairs of the French Union. The arrangement preserved Bacon's appointment without increasing the number of offices at the presidency of the Council, although it left some dissatisfaction among Pleven's own associates. Other compromises were similarly imperfect, particularly among the agricultural representatives, who remained anxious over farm prices despite the continued presence of Pflimlin at Agriculture and Paul Ribeyre in the health administration.

The proposed composition of the government was circulated among the parliamentary groups before Pleven requested investiture. The principal appointments were settled as follows:

Gouvernement René Pleven, November 1949

Secretaries of State and Under-Secretaries of State

The distribution reflected the necessity of keeping the principal parliamentary groups within the ministry without obscuring the particular influence obtained by the Socialists. Mollet's position near the presidency of the Council gave the SFIO a more direct part in the formulation of policy, while Ségelle's appointment preserved Labour under Socialist control without perpetuating the quarrel over Daniel Mayer. Petsche's continuation offered assurance to the financial conservatives, and the retention of Schuman and the Christian Democratic ministers preserved the MRP's place in the direction of government. The appointment of Ramadier at Defence also supplied Pleven with an experienced minister in a department whose responsibilities were growing, while avoiding another contest over the allocation of that portfolio. The UDSR, although comparatively small, exercised influence through the presidency of the Council and Claudius-Petit's responsibilities for reconstruction. Pleven's success depended upon the willingness of these ministers to accept a common programme rather than treat the distribution of departments as a temporary armistice between rival parliamentary groups.

The ministerial agreement still required a majority in the National Assembly, and the arithmetic was less favourable than that which had carried Bidault into his unsuccessful investiture. Several conservative deputies who had supported the MRP president were reluctant to endorse a ministry granting the Socialists greater influence over domestic policy, while some Radicals remained dissatisfied with the financial and educational arrangements. The Farmers' Party and sections of the PRL were particularly hesitant, notwithstanding the participation of individual representatives from the parliamentary Right. Pleven nevertheless possessed the support of the principal republican groups. The SFIO's parliamentary delegation remained committed to the negotiated programme, the MRP leadership had accepted participation after obtaining assurances concerning foreign policy and education, and the Radicals were prepared to support a ministry preserving Petsche at Finance and René Mayer at Justice. The UDSR supplied its own votes, while Independents, overseas representatives and smaller republican groups offered additional support. The preliminary calculations suggested a majority narrower than Bidault's, but sufficient to satisfy the constitutional requirement if the participating parties maintained their commitments.

The memory of October weighed heavily upon the investiture proceedings of 18 November. Pleven appeared before the Assembly with the principal ministerial appointments already accepted and a programme which had been examined by the parliamentary groups before the vote. He promised the restoration of collective bargaining through legislation prepared by the Ministry of Labour, continued control over expenditure and a closer examination of persistent industrial prices. Reconstruction remained central to the government's economic policy, particularly through investment in energy, transport and basic industries, while the management of nationalized enterprises would be examined for administrative economies compatible with their public responsibilities. Mollet and the Socialist parliamentary group defended the agreement as a means of directing recovery toward improvements in living standards without encouraging renewed inflation. The Radicals and Independents emphasized the preservation of financial discipline, while the MRP supported the continuation of international policy and the government's social commitments. The Communist deputies denounced the proposed measures as inadequate, and the Gaullists renewed their criticisms of the parliamentary regime. The more conservative representatives questioned the extent of Socialist influence, particularly over Labour and Interior, but the government parties had entered the debate with firmer commitments than those which had accompanied the previous investitures.

When the division was completed, 330 deputies had voted to invest René Pleven, exceeding the constitutional majority of 311. The vote rested principally upon the support of the SFIO, MRP, Radicals and UDSR, supplemented by sufficient representatives of the Independents, overseas territories and smaller parliamentary groups to overcome abstentions among the conservative Right. The majority was considerably narrower than that obtained by Bidault, but its political foundations differed in an essential respect: the parties had already accepted the principal appointments and the programme which the ministry would undertake. Pleven therefore proceeded to the formal constitution of his government under conditions which had eluded his three predecessors. The ministerial appointments were confirmed by presidential decree, and Queuille's resigned administration relinquished responsibility to the new cabinet.

Beset with tensions with the Americans over military rearmament, the FARA could not have really came at a worse time for the CD government. A tinge of anti-Americanism flared in both the more right wing and left wing elements of the party, with De Gaspari doing what he could to hold the center.

In order to hold it though, the government decided to thread the needle, so to speak. The government announced four principles to uphold with respect to FARA.

The first was deemed fair dealing. The Italian government would liberalize its trade only in areas other partner nations liberalized theirs. The Italian government would not render itself an 'economic victim' of 'predatory Teutonic, Anglo-Saxon or Gallic capital' dumping cars, steel, or foodstuffs into her land. Freer trade was agreeable, insomuch that the other European nations were reasonable to Italy and did not unfairly undercut her recovering industries.

The second was strategic autonomy. Italy would, for purposes of national sovereignty, maintain support for those industries deemed vital to her national interests and domestic autonomy. If free trade would undercut, or make dependent upon other foreign nations such things as defense materials, food, medicine or other such 'strategic necessities', liberalization would be approached with a greater degree of caution. Those items not easily made in Italy, however, were to be given more leeway.

The third would be monetary independence. The Italian government would reject, firmly, any idea of a Pan-European currency or worldwide 'bancor' currency as proposed by Keynes. The Lira would remain under the control of Italy, and Italian finances would retain leeway to be devalued or tightened as required by fiscal policy.

Finally, the fourth would be equitable integration. The government would seek integration with its fellow European powers at the rate required by them at the present time, no faster, no slower. As long as Italy was respected as a 'independent, co-equal' in any 'future fraternity of European nations', it would progress to greater and greater levels of unity with its fellow nations so long as base sovereignty was retained in Rome. De Gaspari issued a formal statement in favor of a future 'European Coal and Steel Community', but placed reservations on 'Extra-NATO' defensive communities within the continent.

The government has announced some reductions in tariffs on at least French, Benelux, and Portuguese goods for the start of the coming year, as economically liberal voices inside the CD have gained more leeway in recent months.