Some seventy years ago, sixty-eight, to be exact, Walter Bagehot published a notable little volume entitled Physics and Politics, described in a subtitle as “Thoughts on the Application of the Principles of ‘Natural Selection’ and ‘Inheritance’ to Political Society.” Actually the volume sought to sketch in outline a natural history of political society, and to describe the process or processes by which later, more elaborate, and more liberal forms of association have emerged, from the dissolution of earlier, simpler, and more rigid, if not oppressive, forms.

Society, or at least political society, as Bagehot conceived it, is a kind of super-organism, having a social structure which is maintained by a social process. This structure is imbedded in and cemented by custom. Man is a custom-making animal. The process in this instance which is not otherwise defined, is what we know elsewhere as “the historical process.” Its function is to weave and reweave the web of custom and tradition in which the individuals who are destined to live together and eventually act together as a political unit, are ineluctably bound together.

Always there is a more or less inflexible tradition which imposes upon each new generation the pattern of the inherited social order. But always there are the liberating and individuating influences of other social processes—competition, conflict, and discussion—which represent what Bagehot describes as man's “propensity to variation,” or, to use a political rather than a biological term, his propensity for non-conformity, “which,” he adds, “is the principle of progress.”

Comte, writing a century ago, claimed that in human affairs we were just entering the scientific stage. Already the physical sciences had made an auspicious beginning. They have made spectacular advances since Comte's pronouncement. Nevertheless, extensive areas in the physical sciences remain to be explored. Still wider areas in the domain of the social sciences await systematic investigation and precise analysis. The need for scientific advances as a means of meeting recurring crises in human affairs seems more necessary than in the days of Comte. It is quite evident today that we have greater sophistication, more extensive questioning, and a more marked social self-consciousness. The word scientific, widely and loosely used, seems to symbolize the temper of our age.

It has become fashionable in recent years to bemoan the manner in which the social sciences lag behind the physical sciences. Few, however, of those who deplore the slowness of scientific advance in man's knowledge of himself, have any concrete suggestions to make towards increasing the speed of that advance, nor are they clear as to whether the lag is necessary and inevitable, or accidental and removable. The common opinion appears to be that the causes of the lag are entirely, or at least mainly, historical, residing in the fact that while the physical sciences started earlier and have by now advanced further, the social sciences began later, and are still, therefore, lagging behind. This explanation is at least implied in the frequent urging by editors and politicians that the social sciences should hurry to catch up with the physical sciences, or alternatively, that the physical sciences should slow down and wait for the social sciences to overtake them. Viewing the matter thus, as a simple foot-race between physical science and social science, with the latter handicapped only by a slow start, is not altogether desirable, since it appears to ignore certain difficulties involved in a scientific approach to human behaviour, which, while not entirely absent in physicial science, are nevertheless easier to cope with when dealing with non-human material than when dealing with human subject-matter. It is with these difficulties that the present paper will be concerned.

The nature of these obstacles will perhaps be made a little clearer if we begin with a preliminary consideration of what a scientific sociology entails. There is no mystery about this. The programme for the new science was set forth clearly and in detail by the man who invented the word sociology, Auguste Comte.

Specialization is, without doubt, one of the most important factors in the development of modern science, since beyond a certain level of technicality it is possible, even with intensive application, only to master a limited sector of the total of human knowledge. But some modes of specialization are, at the same time, under certain circumstances, an impediment to the adequate treatment of some ranges of problems.

The principal reason for this limitation of the fruitfulness of at least some kinds of specialization lies in the fact that the specialized sciences involve a kind of abstraction. They constitute systematically organized bodies of knowledge, and their organization revolves about relatively definite and therefore limited conceptual schemes. They do not treat the concrete phenomena they study “in general” but only so far as they are directly relevant to the conceptual scheme which has become established in the science. In relation to certain limited ranges of problems and phenomena this is often adequate. But it is seldom, after such a conceptual scheme has become well worked out, that its abstractness does not sooner or later become a crucial source of difficulty in relation to some empirical problems. This is apt to be especially true on the peripheries of what has been the central field of interest of the science, in fields to which some of the broader implications of its conceptual scheme and its broader generalizations are applied, or in which the logically necessary premises of certain of these generalizations must be sought.

The purpose of this paper is to suggest the close relationship between economic development and movements of moral reform in Canada. From the beginning of Canadian history, organized attempts have been made to control such problems as intemperance, crime, gambling, juvenile delinquency, sexual promiscuity, and prostitution. These movements were indicative of a condition of disintegration of the mores, and their role was that of establishing a new moral code to govern behaviour. But disturbances which resulted in the breakdown of moral standards extended throughout the range of society, and affected the organization of economic and political life as well. Movements of moral reform, like those of an economic or political (or purely religious or cultural) character, were products of economic expansion.

This fact becomes evident if consideration is given to the broad features of the social development of Canada. Beginning with the establishment of the fishing industry in the Gulf of St. Lawrence, Canadian development may be represented in terms of a series of stages marked by the emergence of new areas or forms of economic exploitation. The expansion of economic life involved new accommodations in economic, political, and social institutions, and the points of greatest social disturbance were to be found where the impacts of the new techniques of production were most felt. It was within these interstitial areas of social organization, where the traditional culture came in conflict with new economic developments, that movements of reform took their rise.

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

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

The automobile industry is an outstanding example of branch plant expansion in the international field. Proximity to the American centres of automobile production, the policy of tariff protection pursued in the Dominion, and the similarity of Canadian and American manufacturing methods made possible its rapid extension north of the American border.

Ford of Canada was incorporated with an Ontario charter in 1904 just fourteen months after the establishment of the parent concern in Detroit. (A Dominion charter was secured in 1911.) The initiative in the establishment of a Ford assembly plant in East Windsor seems to have come from a group of Canadian business men, and all the actual capital investment in 1904 came from Canadian sources. The Ford Motor Company of Michigan received 51 per cent of the original stock, in amount $63,500, in consideration for which it agreed to extend to the Canadian concern the privilege of using in perpetuity all patents, improvements, and devices used to produce Ford products in the United States. This privilege included the use of such rights in Canada, New Zealand, Australia, South Africa, and some minor British possessions. In the formation of General Motors of Canada the initiative again came from Canada. The McLaughlins of Oshawa, formerly carriage manufacturers, were instrumental in starting the manufacture of the Buick car in 1907. They contributed substantial properties to the enterprise and, for a time, appear to have retained a majority interest in the concern's stock; but the General Motors Corporation of Canada, which grew out of the McLaughlin Motor Car Company, is now a wholly-owned subsidiary of the American concern.