Chapter 5: Dispossession

The most obvious solution, to anti-Japanese British Columbians, was to force the Japanese Canadian farmers to sell their farms in the same way that the fishermen had been forced to sell their fishing vessels. Indeed, the success of the latter program, from the buyers' point of view, was considerable, as the federally appointed Japanese Fishing Vessel Disposal Committee was selling the vessels on the basis of appraisals made after three months of neglect and abuse. The selling prices, consequently, were much lower than the Japanese Canadian owners felt their vessels were worth.⁴ Productive farms sold in a similarly saturated "buyers' market" could also be expected to sell cheaply.

Selling Japanese Canadian-owned farms appealed to Ian Mackenzie. Not only would such sales impede the return of the uprooted Japanese to the Pacific Coast, but they would also solve a problem Mackenzie was facing as Minister of Pensions and Health. In that capacity, Mackenzie was concerned with the problems of reconstruction after the war. Anxious to avoid the depression and labour unrest that had followed the First World War, the federal government was already considering possible post-war programs. Among these was a Veterans' Land Act (VLA) program, designed to assist veterans to become farmers but limited in scope so as to avoid the excessive indebtedness and subsequent bankruptcies that had resulted from a similar scheme after the First World War. Indebtedness under the new VLA scheme was to be limited to $4,800, including land, livestock and equipment. Wartime inflation, however, was rapidly increasing the price of much of the land available for soldier settlement. As a consequence, the government was anxious to control suitable lands for veteran settlement before inflation pushed the land costs over the VLA limits.⁵ The Japanese Canadian farms, Mackenzie quickly decided, would be ideal for the VLA scheme. They were well located and productive, and if bought soon, they could be acquired cheaply in a buyers' market. Assured by the jam cannery owners and the local berry farmers that tenants should be capable of maintaining the farms until they could be settled by veterans, Mackenzie took steps to acquire the farms.⁶

Mackenzie's first difficulty was that the Veterans' Land Act did not yet exist. However, the Soldier Settlement Board, a similar First World War scheme, still existed under the jurisdiction of the Minister of Mines and Resources, Thomas A. Crerar. Accordingly, Mackenzie wrote to Crerar on 14 April 1942, praising the Japanese-owned farms and pointing out that it would be unfortunate to miss the opportunity of acquiring them simply because the Veterans' Land Act had not yet become law. Mackenzie then suggested that Crerar get an Order-in-Council under the War Measures Act that would enable the Soldier Settlement Board to buy and hold the farms until the Veterans' Land Act had passed Parliament. Haste was vital, Mackenzie urged, Aotherwise the properties will have been [sic] disposed of in various unsatisfactory ways and the opportunity to develop sound soldier settlement in [B.C.] will be lost."⁷ Mackenzie recognized that cheap land for veterans, and through this a minimizing of post-war unemployment, would be a political coup for the government.

Crerar and his Soldier Settlement Board administrator, Gordon Murchison, were not as enthusiastic as Mackenzie. Murchison was very conscious of the administrative pitfalls in Mackenzie's proposal, notably the possibility that tax obligations on the farms might exceed the revenues collected should suitable tenants fail to materialize. However, neither was morally averse to forcing the Japanese Canadian farmers to sell. Cautiously Murchison suggested that his department survey all Japanese Canadian farms to determine the suitability for veteran settlement and their approximate value.⁸ Agreeing with Murchison, Crerar and Mackenzie then sought an Order-in-Council under the War Measures Act prohibiting the sale of Japanese-owned farms without Murchison's permission, ostensibly in order to protect the Japanese owners from exploitation by non-Japanese buyers.⁹ In fact, the freeze on the sale of Japanese Canadian farms merely assured that they would still be available for purchase when the Veterans' Land Act became law in August.

Throughout the summer of 1942, while Japanese Canadians were being shipped through the livestock barns at Hastings Park to detention camps in the Interior of British Columbia, Murchison's men appraised Japanese-owned farms. Trained to assess the drought-ravaged farms of southern Saskatchewan in the 1930s, the appraisers applied the same conservative, Depression-based criteria employed in Saskatchewan to the fertile and productive Japanese farms in British Columbia. No consideration was given to the value of the current crop or to the possible use of the farm for non-agricultural purposes, such as residential development. In addition, the value of the existing buildings was discounted to 70 per cent of their apparent value. Along with his assessment, each appraiser also noted separately whether the farm was suitable for the post-war settlement of veterans and their families.¹⁰

When the results of the survey reached Murchison in September 1942, he became an enthusiastic advocate of Mackenzie's scheme. Murchison had been appointed Director of the Veterans' Land Act program in August and was now anxious to acquire some 60 per cent of the 939 appraised farms that had been deemed suitable for veteran settlement. In September Murchison began urging Crerar to sell Japanese-owned farms "to approved persons as soon as possible under the best terms possible,"¹¹ while compensating the Japanese owners on the basis of his appraisals, which he acknowledged were conservative and made no allowance for the speculative value of the farms. His proposal, he argued, would be "the most clean cut and equitable arrangement as far as the Japanese" were concerned.¹²

The genuineness of Murchison's concern for the Japanese Canadian owners is open to question. Like many Caucasians during the Second World War, Murchison had assumed that the incarceration of Japanese Canadians meant that they had, in fact, harboured sinister and traitorous intentions. His prejudices are evident in his remarks to Crerar about Japanese poultry farms located on the south bank of the Fraser River. "One wonders", Murchison commented,

where the Japanese got the money for this new construction at a time when the average white man was having pretty tough sledding in the poultry business. Located as they are in relation to the Fraser River, there may be some justifiable suspicion that these buildings were not erected without an eye to their use for purposes other than poultry.¹³

As Murchison would later admit, his sole interest in the Japanese farms lay in getting "the best buy I could on behalf of the department and the boys who were fighting overseas."¹⁴

In late November, 1942, Crerar and Mackenzie began the final phase of the campaign to buy the Japanese farms. A forced sale of Japanese farms required another Order-in-Council under the War Measures Act, since the powers of the Custodian of Enemy Property were restricted by law to only protecting and administering the property of the uprooted Japanese Canadians. An Order-in-Council expanding the Custodian's powers could only be initiated by Norman McLarty, the Secretary of State and the legal "custodian" of enemy and Japanese Canadian property. Consequently, in late November 1942 Crerar wrote to McLarty urging the sale of all Japanese Canadian property because of the "uncertainty as to the time and circumstances under which these people may ever return to their homes."¹⁵ That uncertainty raised questions about the depreciation of Japanese Canadian property.

While Crerar was concerned about the depreciation of such property, the Department of Labour was concerned about how Japanese Canadians were to be supported while living in the government detention camps. The liquidation of Japanese Canadian holdings on the Pacific Coast would solve that problem by generating funds to support the inmates of the detention camps, thereby sparing the government the expense. Minimizing the cost of running the detention camps was politically necessary, since opposition Conservatives were highly critical of anything above the bare minimum being spent on Japanese Canadians.

McLarty was already under pressure from Pacific Coast politicians who saw the sale of Japanese property as a means of discouraging the return of the uprooted Japanese after the war. Alderman George Buscombe of Vancouver stated their position clearly in September 1942: "We want all of their property sold the same as their fishing fleet…. We don't want the Japanese to return here after the war. They are going to outbreed the whites and eventually outnumber us."¹⁶ Claiming they wished to redevelop the Powell Street ghetto depopulated by the expulsion of Japanese Canadians, Vancouver's City Council had been urging the Custodian's representative in Vancouver, G.W. McPherson, to sell the homes and businesses in that area.

Classified as a "Jap hater" by the RCMP, McPherson supported the ambitions of Vancouver's City Council. In mid-December he wrote to Ottawa recommending the sale of all Japanese property, using as his excuse the difficulties involved in handling that small portion that was substandard, or uneconomical. In addition, McPherson wanted to pursue "confidential negotiations" with the Canadian Pacific Railway, which had expressed an interest in redeveloping as an industrial site the Powell Street area that had housed most of Vancouver's pre-expulsion population.¹⁷

By mid-December McLarty was sympathetic with Crerar and Mackenzie's plan but was still worried about the implications of selling Japanese Canadian property. He was disturbed that the sale of Japanese property was tantamount to declaring that Japanese Canadians would never be allowed to return to the Pacific Coast. While he had few qualms about excluding Japanese Canadians from the Pacific Coast, McLarty wanted to be convinced that dispossession, in fact, was the best policy.¹⁸

Ian Mackenzie undertook the task of convincing him. In late December Mackenzie invited McLarty to join the Cabinet Committee on Japanese Questions, where the dispossession of Japanese Canadians could be thrashed out in all its aspects. Meeting with that committee in early January, McLarty learned that the Department of Labour and the Office of the Custodian of Enemy Property were both anxious to have Japanese property liquidated: the former to minimize the cost of keeping Japanese Canadians in the detention camps and to encourage them to leave the camps and move east of the Rocky Mountains; and the latter ostensibly for administrative reasons. He undoubtedly also learned that Ian Mackenzie felt that allowing the Japanese to return to the Pacific Coast would be politically disastrous for the B.C. Liberals.¹⁹

McLarty was quickly convinced. On 19 January 1943 he joined Mackenzie, Crerar and Labour Minister Mitchell in seeking Cabinet approval for the dispossession of Japanese Canadians. On January 23 the Cabinet agreed to this and passed an Order-in-Council under the War Measures Act that granted the Custodian of Enemy Property the right to dispose of Japanese Canadian property in his care without the owners' consent. Henceforth Japanese Canadians would pay for their own incarceration.

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The announcement of the Custodian's new powers went unnoticed in the press euphoria over the war news. For the first time since 1939, it was good. In Africa, British General Bernard Montgomery was routing Rommel's Afrika Corps. In Russia, the German Sixth Army had been encircled at Stalingrad. In Asia, the American and Anzac offensive at Guadalcanal had begun. The tide of the war had turned. The power of the Axis nations was beginning to wane.

When the Custodian's new powers were finally noticed, the press and Japanese Canadians both assumed that those new powers would only mean minor administrative changes. Some Canadians, however, became immediately suspicious and concerned about the potential for abuse in those new powers. Among the first was Rev. Howard Norman, president of Vancouver's Consultative Council for Cooperation in Wartime Problems of Canadian Citizenship.²⁰ Suspicious that an extreme application of the new powers was in the making, Norman complained to his fellow British Columbian, Dr. Henry F. Angus, who was a seasoned defender of Japanese Canadians and who worked for the Department of External Affairs for the duration of the war.

Alerted, Angus protested the expansion of the Custodian's powers to Prime Minister King. The dispossession of Canadian citizens, Angus wrote King, was contrary to British principles of justice and to the Atlantic Charter, and might well prompt an abuse of Canadian property in Japanese hands in Asia. Urging that the Custodian's powers be amended to allow sales only in those cases where such sales would be in the best interests of the Japanese owner, Angus reminded King that Reverend Norman and his associates already regarded the new order as comparable to the Nazi Nuremberg laws dispossessing Jews in Germany.²¹ The Prime Minister did not reply.

The fiction that only unprofitable properties would be sold persisted through March.²² It was not until March 28 that the rumours of a total dispossession were finally confirmed when G.W. McPherson, the Custodian's Vancouver Director, outlined the duties of the Advisory Committee that was set up to assist him in administering the Japanese properties in Vancouver. McPherson's instructions made it clear that it was his intention to sell not only all Japanese Canadian real estate, but also all the personal possessions left in his care by the uprooted Japanese.²³

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The shock of total dispossession rocked Japanese Canadians. Even Tom Shoyama, the editor of the New Canadian, dropped his carefully maintained professional control to rage at this latest betrayal:

While the most staunchly loyal and tolerant of us may do their best to swallow with good grace this last dose of bitter medicine from their own government, a policy as indefensible as this from any point of view except the dictates of a race war, is certain to provoke a strong reaction…. In many cases it may well be the last straw which can be added to a war burden which has mounted higher and higher and heavier and heavier upon the backs of Japanese Canadians since Pearl Harbor…. [It] has yet to be shown to the satisfaction of any informed and thinking person that that burden has not long exceeded the bounds of justice, of reason or even of necessity.²⁴

Dispossession was incomprehensible except as a racist move toward something more sinister.

While the initial reaction was anger, the ensuing protest was orderly and legalistic. Recognizing that there was strength in unity, the Japanese property owners organized. On March 31 the inmates at Kaslo set up the Japanese Property Owners' Association, under the leadership of Dr. Kozo Shimotakahara, a respected physician. Within a week every detention camp and self-support project in British Columbia formed a similar group and affiliated with the Kaslo group. The Kaslo group then initiated a survey of all Japanese property owners to determine whether they opposed the sale of their property. Engaging legal counsel, they inquired into the feasibility of challenging the forced sales in the courts and began collecting money for legal action.²⁵

Throughout May 1943 angry Japanese Canadians raised money for the expected court case, a case they were certain would bring justice. Their confidence in British justice was complete. In the past when the federal government had tried to drive Japanese Canadians from the fishing industry, the courts had defeated the government.²⁶ To the uprooted Japanese, it seemed only logical that the courts would also defeat so patently unjust a policy as the forced sale of the property of a people who had committed no crime except the "crime" of having the same ancestry as one of Canada's enemies. British justice had defeated the government before, and Japanese Canadians, like most Canadians still ignorant of the vast powers of the War Measures Act, were confident it would do so again.

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While Japanese Canadian property owners organized, Murchison bought their farms. In May 1943 the Veterans' Land Act Superintendent in Vancouver, Ivan T. Barnet, approached the Rural Advisory Committee,²⁷ in charge of selling Japanese property outside Vancouver, and offered $750,000 for 769 farms, which were assessed for taxes at over $1,200,000. Barnet alleged that his offer was based on government appraisals made "without a view to purchasing this property", appraisals he would not permit the committee to see.²⁸ Suspicious, the Rural Advisory Committee decided to check Barnet's values by means of spot checks by qualified committee members. When the seventeen spot-checked farms were found to have a cumulative value some $15,000 in excess of Barnet's appraisals, the Rural Advisory Committee rejected Barnet's offer.²⁹ They did not, however, reject the idea of selling the farms to him. The quick sale of the bulk of Japanese Canadian farms to the government for eventual use by veterans appealed to most committee members. The committee chairman, Judge David Whiteside, invited the Regional Board of the Veterans' Land Act to continue negotiations.

The ensuing negotiations disturbed the Japanese Canadian member of the committee, Yasutaro Yamaga. A respected farmer and cooperative manager from Maple Ridge, B.C., Yamaga had agreed to serve on the committee because he thought that its purpose was to protect the interests of the Japanese Canadian owners.³⁰ On 24 May 1943, when Judge Whiteside indicated a willingness to accept as little as $850,000 for the farms,³¹ however, Yamaga realized that everyone else on the committee considered the opportunity to get farms for veterans more important than the interests of the Japanese owners. Given that $850,000 was less than 70 per cent of the assessed value of the farms – and the spot checks had shown that assessed values were usually lower than market valuesÊÐ Yamaga quickly concluded that the final selling price was certain to be grossly unfair to the Japanese owners. Yamaga resigned in protest.³² Three days later, as Yamaga had feared, Barnet agreed to pay $850,000 for the farms. On June 23 Norman McLarty and Thomas Crerar finalized the deal in Ottawa, a deal that granted the Veterans' Land Act Board, not only 769 Japanese farms, but the $43,000 of net income from those farms for the 1943 crop year.

Just how aware Crerar was of the role he and his department played in the dispossession of Japanese Canadians is open to question. The Veterans' Land Act Board was a very minor part of his multiple portfolio. As Minister of Mines and Resources, Crerar's primary concern was assuring that Canada's natural resources were extracted fast enough to meet the demands of wartime production. Crerar never attended any of the meetings of the Cabinet Committee on Japanese Questions. His letter to McLarty, a letter probably drafted by Murchison in terms he would expect his superior to support, stresses the question of the depreciation of Japanese-owned property. Crerar may not have been aware that the Order-in-Council presented in his name was intended as a means of selling off all Japanese Canadian property. He probably assumed that the Custodian of Enemy Property would sell only depreciating properties. He was probably unaware that the Department of Labour intended Japanese Canadians to live on the proceeds of those sales while confined in the government's detention camps.

Crerar's subsequent actions, once he finally realized what was really being done to Japanese Canadians, verify he was not a willing participant in Mackenzie's plans to strip Japanese Canadians of their West Coast property. Philosophically, Crerar was a true liberal, a product of the Prairie progressive movement of the 1920s. His CCF opponents in Parliament are of the opinion that by 1944 Crerar "was genuinely bothered about the business, but he was in the Cabinet so he had to go along with it."³³ Stanley Knowles, a veteran CCF and NDP Member of Parliament, recalled:

M.J. Coldwell [CCF leader during the war] told the caucus … that Tom Crerar would speak with him … about some of the things that were going on [with respect to Japanese Canadians]. He [Crerar] felt that they [the government] were being terribly illiberal in what they were doing…. He was spiritually and philosophically on the other side, and he was bothered by it.³⁴

Once released from the restraints of Cabinet solidarity by his elevation to the Senate in April 1945, Crerar openly sided with the CCF on the Japanese question. Joining with Liberal Senators Cairine R. Wilson and Arthur W. Roebuck, Crerar voted against every extension of the restrictions on Japanese Canadians in the postwar period and lobbied within the Liberal caucus, even when such lobbying earned him the scorn of Prime Minister King.³⁵

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It is perhaps to McLarty's credit that he also had doubts about the legality of the Veterans' Land Act purchase. In June 1943, before he finalized the VLA deal, he expressed those doubts to Ian Mackenzie. Mackenzie, however, was supremely confident. "I am entirely in favour of this purchase," he informed McLarty, "and we should not be deterred by any representations by Japanese. Any action we take under the War Measures Act cannot be challenged in the courts."³⁶

The solicitors for the Japanese Property Owners' Association were equally confident that the dispossession Order-in-Council could be challenged in the courts. In late July T.G. Norris and J.A. MacLennan filed Petitions of Right with the Exchequer Court of Canada in the names of a Japanese national, a naturalized Japanese Canadian and a Nisei. They soon ran into frustrating difficulties. While petitions to the Exchequer Court in 1943 normally were heard in four to six weeks, the Japanese Canadian petitions were delayed until 29 May 1944, almost a year later. At the hearing, things went from bad to worse. Before Norris and MacLennan could present their carefully prepared arguments, the case became bogged down on the legal question of whether the Custodian of Enemy Property was in fact a servant of the Crown and therefore accountable in the Exchequer Court. That legal impasse allowed the judge, Mr. Justice J.T. Thorson C who as the Hon. J.T. Thorson M.P., Minister of National War Services, had been part of the 1942 Cabinet that had uprooted the Japanese Canadians C to adjourn the case indefinitely while he decided the question. True to the obstructionist policy of the federal government, it took him three years to make up his mind. In 1947, two years after the end of the war, Thorson finally decided that the Custodian was not a servant of the Crown and therefore not accountable before the Exchequer Court.³⁷

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While the lawyers argued and Justice Thorson procrastinated, the federal government dispossessed Japanese Canadians. The process was strictly business-like. Two advisory committees, the Greater Vancouver Advisory Committee and the Rural Advisory Committee, set the methods of appraisal, and the prices and terms of sale or lease. Real estate was sold by public tender in a flooded market, while those chattels that had not been stolen or destroyed by vandals were auctioned off over a period of three years. By 1947 an estimated $11.5 million of Japanese Canadian property had been disposed of for $5,373,317.64.³⁸

For the general public on the West Coast there were thousands of bargains. Furniture, farm implements, household goods, clothing, art objects, business and farm machinery, appliances, sewing machines, pianos, tools, and trunks filled with personal possessions found new owners. The last were often sold unopened and unvalued. The buyers gambled that their two dollars would buy them not only a useful trunk, but also valuable contents. While some found only books and personal papers in their purchases, others found china and silver, silk kimono, Japanese art, and festival dolls. The enterprising among the latter promptly took their windfalls into the Interior and tried to sell them to any Japanese Canadian who could afford to buy them.³⁹

As the sales progressed, however, the number of Japanese able or willing to buy such treasures rapidly diminished. Those with savings had their personal possessions shipped to them at their own expense – if those possessions could be found and remained undamaged. It was not unusual in such cases for the trunks and boxes left in locked churches and community centres to arrive either empty or filled with the tattered remains of someone else's possessions.⁴⁰ The dispossession of Japanese Canadians also meant that there was less, not more, cash available in the camps. The real estate sales meant that families who had depended on rental income had to live on their capital on deposit with the Custodian of Enemy Property, who paid no interest. In addition, the amounts paid out to the inmates of the detention camps were strictly controlled. No family could draw more than a hundred dollars per month for family support. Nor could any family with capital on deposit with the Custodian obtain employment in the detention camps. Both restrictions were intended to force families with capital to move east of the Rocky Mountains, where they could receive their capital in full.⁴¹

While Japanese Canadians who moved east of B.C. could regain control of their capital, there was little they could do with it. Since February 1942, buying or leasing land or business premises had been prohibited without special permission from the Minister of Justice, Louis St. Laurent.⁴² St. Laurent was very reluctant to issue any permits as long as the post-war fate of Japanese Canadians remained undecided. Should Japanese Canadians buy and during the war and should the government decide to deport them after the war – a policy St. Laurent strongly favoured – then the government would face the embarrassment of dispossessing Japanese Canadians a second time. As a result, even Nisei living outside B.C. before the start of the Pacific War were forbidden to purchase or lease land. Beginning in January 1944, however, St. Laurent permitted Japanese Canadians to lease business premises for periods not exceeding one year. This new regulation was of little use to Japanese Canadians who had relocated to cities like Toronto, or areas like southern Alberta, where municipal bylaws prevented Japanese Canadians from holding trade licences or residing in the major centres.⁴³

For many Japanese Canadians, dispossession meant destitution. All too often the capital produced from property sales was almost wiped out by the realtors' and auctioneers' fees, the storage and handling charges, and the repayment of past relief benefits. The little that was left rapidly disappeared, since the elderly who could not work and families with many dependents drew upon their capital to obtain the necessities of life. Unemployment in the detention camps was high, and the work that was available paid poorly and was denied to anyone with any capital. Employment in the camps was also denied to single adults unless they were the sole support of their family. Single adults in the camps were also ineligible for relief benefits. It was not long before many found that they had nothing on which to subsist and nothing with which to build a new life, assuming, of course, that they were still young enough to rebuild.⁴⁴

As the property sales continued, the character of the detention camps changed. Inmates with capital, recognizing that there would be nothing to return to on the West Coast, began to move to Montreal, Winnipeg and southern Ontario. Young, single men also began moving east in greater numbers, seeking employment with which to support their parents and siblings in B.C. Sometimes they were joined by their adult sisters, although in general the migration of single females was discouraged, both because it was culturally repugnant and because of fears that the family might never be reunited. By late 1944 the camps were populated largely by the elderly, the sick, young families with several children and few marketable skills, pro-Japan patriots, and those who despaired of re-establishing themselves or simply wanted to stay where they were until peace could bring normal conditions again.

The atmosphere in the camps also changed. The optimism and hope for a quick return to pre-war normalcy prevalent in the spring of 1943 was gone forever. Pessimism and cynicism grew, fed by poverty and disillusionment. To the pro-Japan fanatics, the growing bitterness of the inmates provided a fertile ground. Canada, they argued, was a racist nation. Only in Japan could Japanese live as human beings. Trapped in the camps by inertia, poverty, uncertainty and fear, the inmates slipped further and further into a "reserve" mentality, living their lives from day to day with little hope for any improvement in their situation.⁴⁵