In the closing year of the war the Canadian corps played a still more distinctive and essential part. During the early months of 1918, when the Germans were making their desperate thrusts for Paris and the Channel, the Canadians held little of the line that was attacked. Their divisions had been withdrawn in turn for special training in open warfare movements, in close cooperation with tanks and air forces. When the time came to launch the Allied offensive, they were ready. It was Canadian troops who broke the hitherto unbreakable Wotan line, or Drocourt-Queant switch; it was Canadians who served as the spearhead in the decisive thrust against Cambrai; and it was Canadians who captured Mons, the last German stronghold taken before the armistice was signed, and thus ended the war at the very spot where the British "Old Contemptibles" had begun their dogged fight four years before.

Through all the years of war the Canadian forces never lost a gun nor retired from a position they had consolidated. Canadians were the first to practice trench raiding; and Canadian cadets thronged that branch of the service, the Royal Flying Corps, where steady nerves and individual initiative were at a premium. In countless actions they proved their fitness to stand shoulder to shoulder with the best that Britain and France and the United States could send: they asked no more than that. The casualty list of 220,000 men, of whom 60,000 sleep forever in the fields of France and Flanders and in the plains of England, witnesses the price this people of eight millions paid as its share in the task of freeing the world from tyranny.

The realization that in a world war not merely the men in the trenches but the whole nation could and must be counted as part of the fighting force was slow in coming in Canada as in other democratic and unwarlike lands. Slowly the industry of the country was adjusted to a war basis. When the conflict broke out, the country was pulling itself together after the sudden collapse of the speculative boom of the preceding decade. For a time men were content to hold their organization together and to avert the slackening of trade and the spread of unemployment which they feared. Then, as the industrial needs and opportunities of the war became clear, they rallied. Field and factory vied in expansion, and the Canadian contribution of food and munitions provided a very substantial share of the Allies' needs. Exports increased threefold, and the total trade was more than doubled as compared with the largest year before the war.

The financing of the war and of the industrial expansion which accompanied it was a heavy task. For years Canada had looked to Great Britain for a large share alike of public and of private borrowings. Now it became necessary not merely to find at home all the capital required for ordinary development but to meet the burden of war expenditure, and later to advance to Great Britain the funds she required for her purchase of supplies in Canada. The task was made easier by the effective working of a banking system which had many times proved its soundness and its flexibility. When the money market of Britain was no longer open to overseas borrowers, the Dominion first turned to the United States, where several federal and provincial loans were floated, and later to her own resources. Domestic loans were issued on an increasing scale and with increasing success, and the Victory Loan of 1918 enrolled one out of every eight Canadians among its subscribers. Taxation reached an adequate basis more slowly. Inertia and the influence of business interests led the Government to cling for the first two years to customs and excise duties as its main reliance. Then excess profits and income taxes of steadily increasing weight were imposed, and the burdens were distributed more fairly. The Dominion was able not only to meet the whole expenditure of its armed forces but to reverse the relations which existed before the war and to become, as far as current liabilities went, a creditor rather than a debtor of the United Kingdom.

It was not merely the financial relations of Canada with the United Kingdom which required readjustment. The service and the sacrifices which the Dominions had made in the common cause rendered it imperative that the political relations between the different parts of the Empire should be put on a more definite and equal basis. The feeling was widespread that the last remnants of the old colonial subordination must be removed and that the control exercised by the Dominions should be extended over the whole field of foreign affairs.

The Imperial Conference met in London in the spring of 1917. At special War Cabinet meetings the representatives of the Dominions discussed war plans and peace terms with the leaders of Britain. It was decided to hold a Conference immediately after the end of the war to discuss the future constitutional organization of the Empire. Premier Borden and General Smuts both came out strongly against the projects of imperial parliamentary federation which aggressive organizations in Britain and in some of the Dominions had been urging. The Conference of 1917 recorded its view that any coming readjustment must be based on a full recognition of the Dominions as autonomous nations of an imperial commonwealth; that it should recognize the right of the Dominions and of India to an adequate voice in foreign policy; and that it should provide effective arrangements for continuous consultation in all important matters of common concern and for such concerted action as the several Governments should determine. The policy of alliance, of cooperation between the Governments of the equal and independent states of the Empire, searchingly tested and amply justified by the war, had compelled assent.

The coming of peace gave occasion for a wider and more formal recognition of the new international status of the Dominions. It had first been proposed that the British Empire should appear as a unit, with the representatives of the Dominions present merely in an advisory capacity or participating in turn as members of the British delegation. The Dominion statesmen assembled in London and Paris declined to assent to this proposal, and insisted upon representation in the Peace Conference and in the League of Nations in their own right. The British Government, after some debate, acceded, and, with more difficulty, the consent of the leading Allies was won. The representatives of the Dominions signed the treaty with Germany on behalf of their respective countries, and each Dominion, with India, was made a member of the League. At the same time only the British Empire, and not any of the Dominions, was given a place in the real organ of power, the Executive Council of the League, and in many respects the exact relationship between the United Kingdom and the other parts of the Empire in international affairs was left ambiguous, for later events and counsel to determine. Many French and American observers who had not kept in close touch with the growth of national consciousness within the British Empire were apprehensive lest this plan should prove a deep-laid scheme for multiplying British influence in the Conference and the League. Some misunderstanding was natural in view not only of the unprecedented character of the Empire's development and polity, but of the incomplete and ambiguous nature of the compromise affected at Paris between the nationalist and the imperialist tendencies within the Empire. Yet the reluctance of the British imperialists of the straiter sect to accede to the new arrangement, and the independence of action of the Dominion representatives at the Conference, as in the stand of Premier Hughes of Australia on the Japanese demand for recognition of racial equality and in the statement of protest by General Smuts of South Africa on signing the treaty, made it clear that the Dominions would not be merely echoes. Borden and Botha and Smuts, though new to the ways of diplomacy, proved that in clear understanding of the broader issues and in moderation of policy and temper they could bear comparison with any of the leaders of the older nations.

The war also brought changes in the relations between Canada and her great neighbor. For a time there was danger that it would erect a barrier of differing ideals and contrary experience. When month after month went by with the United States still clinging to its policy of neutrality, while long lists of wounded and dead and missing were filling Canadian newspapers, a quiet but deep resentment, not without a touch of conscious superiority, developed in many quarters in the Dominion. Yet there were others who realized how difficult and how necessary it was for the United States to attain complete unity of purpose before entering the war, and how different its position was from that of Canada, where the political tie with Britain had brought immediate action more instinctive than reasoned. It was remembered, too, that in the first 360,000 Canadians who went overseas, there were 12,000 men of American birth, including both residents in Canada and men who had crossed the border to enlist. When the patience of the United States was at last exhausted and it took its place in the ranks of the nations fighting for freedom, the joy of Canadians was unbounded. The entrance of the United States into the war assured not only the triumph of democracy in Europe but the continuance and extension of frank and friendly relations between the democracies of North America. As the war went on and Canada and the United States were led more and more to pool their united resources, to cooperate in finance and in the supply of coal, iron, steel, wheat, and other war essentials, countless new strands were woven into the bond that held the two countries together. Nor was it material unity alone that was attained; in the utterances of the head of the Republic the highest aspirations of Canadians for the future ordering of the world found incomparable expression.

Canada had done what she could to assure the triumph of right in the war. Not less did she believe that she had a contribution to make toward that new ordering of the world after the war which alone could compensate her for the blood and treasure she had spent. It would be her mission to bind together in friendship and common aspirations the two larger English-speaking states, with one of which she was linked by history and with the other by geography. To the world in general Canada had to offer that achievement of difference in unity, that reconciliation of liberty with peace and order, which the British Empire was struggling to attain along paths in which the Dominion had been the chief pioneer. "In the British Commonwealth of Nations," declared General Smuts, "this transition from the old legalistic idea of political sovereignty based on force to the new social idea of constitutional freedom based on consent, has been gradually evolving for more than a century. And the elements of the future world government, which will no longer rest on the imperial ideas adopted from the Roman law, are already in operation in our Commonwealth of Nations and will rapidly develop in the near future." This may seem an idealistic aim; yet, as Canada's Prime Minister asked a New York audience in 1916, "What great and enduring achievement has the world ever accomplished that was not based on idealism?"

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