Canada: EXTERNAL AFFAIRS: 49th State?

CANADA

Both Ottawa and Washington were abuzz with talk about the semisecret wartime Hyde Park Agreement which Canada wanted continued into the years of peace (TIME, Feb. 9). On Capitol Hill, Nebraska's Senator Kenneth Wherry and his Small Business Committee had a staff of clerks digging through the files for a full-dress investigation, some time soon. On Parliament Hill, Saskatchewan's CCFer Thomas John Bentley asked that the Secretary of State for External Affairs tell the House of Commons all there was to tell about Hyde Park.

Debonair Louis St. Laurent rose in a half-empty House last week and casually answered Member Bentley by submitting an exchange of notes* in May 1945 (just after V-E day), when Canada and the U.S. agreed to extend the Hyde Park plan for close economic cooperation into the difficult years of reconversion. The bored House hummed with members' private chatter. St. Laurent's words were little noted.

Common Defense. What Franklin Roosevelt and Mackenzie King had done at their Easter conference in 1941 was to solemnize the economic marriage of the U.S. and Canada. Mackenzie King had used martial rather than marital terms when he told Parliament that spring: "It involves nothing less than a common plan [for] the economic defense of the Western Hemisphere." But no matter how much the statesmen of each country might play it down for political expediency, the fact was inescapable: in effect, Canada had become an economic 49th state.

Canadian officials felt their teeth on edge every time they heard Wherry honing his hatchet and demanding their economic scalps. They knew there was good U.S. political ammunition in the Wherry cry to cut off shipments of coal and oil to Canada while New England homes went unheated, and to cut off steel exports while U.S. construction was slowed by material shortages.

Clearly, the economic marriage was not between equals: the U.S. was not as dependent on Canada for any single product as Canada was on the U.S. for oil and steel. But there were a few items of trade which might make the Wherrymen call off their scalp-hunting. Or so Canadians hoped.

Interdependence. For one thing, U.S. oil was used to drive machinery in western Canada's newsprint mills. If the mills slowed down or stopped for lack of fuel, many a newspaper on the U.S. West Coast would soon be out of paper. Canada supplies 80% of U.S. newsprint consumption, and much of it could be sold elsewhere at higher prices in the present world famine. The same is true of minerals (especially copper, zinc and lead).

There was much to-do in Washington about Canada's buying of U.S. steel, because exports to all other countries are strictly controlled while the Dominion enjoys its preferential position within the U.S. economic union. Some Senators suspected that Canada fabricated its import of steel into consumption goods for un controlled export. Replied a high Canadian official: "It's just childish to talk about lack of controls." Canada has its own, just as tough as the U.S. brand. Of the Dominion's steel exports last year, he said, 86% was in ships and machinery needed to rebuild Europe—which is just what the U.S. is exporting steel for.