The triumph and tragedy of Agatha Chapman

October 25, 2018

Although never officially employed at the Dominion Bureau of Statistics (DBS), we consider her one of our own. After all, Agatha Chapman is widely acknowledged as a pioneer in the art of measuring the economic pulse of the nation through the emerging science of national accounts.

But shortly after helping produce the first definitive national accounts of Canada in 1945, Agatha Chapman’s life was forever changed when she found herself ensnared in the largest spy scandal in Canadian history—the Gouzenko affair. Her story is one of the saddest chapters in the Agency’s 100 year history.

Who was Agatha Chapman?

Women accounted for the majority of employees at the DBS throughout the 1930s and war years. Agatha Chapman, on assignment from the Bank of Canada, was among the first to work in the theoretical, methodological and analytical wing. Agatha not only worked with the men, she led them. She was asked to do something that had never been done before—take a multitude of industrial, agricultural and economic data of Canada and make them all add up. She did so, to critical acclaim. Her work also caught the eye of future Nobel Prize Winner for Economics, Richard Stone, the father of national accounts.

Born in England in 1907, Agatha Chapman or “Aggie” as she was known to family and friends, immigrated to Canada with her family at a young age. She was the great-granddaughter of Sir Charles Tupper, a Father of Confederation and one-time prime minister.

Agatha was among the first women in Canada to earn a master’s degree in economics from the University of Toronto, where she was awarded the prestigious Maurice Cody Fellowship. She also served as the president of the University College Women’s Literary Society.

She began working as an economist at Sun Life Assurance in Montréal and then moved on to the newly formed Bank of Canada, where she became involved in the ongoing challenge of measuring the total economy through a system of national accounts.

The Great Depression and the first forays into national accounting at the DBS

The Great Depression was one of the seminal events of the 20th Century. Politicians, economists and citizens around the world struggled to understand how and why the world economy had collapsed, and more importantly, how it could be reinvigorated. John Maynard Keynes, perhaps the most influential economist of the first half of the 20th Century, believed that the economy could be revived by targeted government stimulus. But before the government could effectively intervene, it was necessary to understand how all the disparate parts of the economy were intertwined.

The DBS of the 1930s did a fine job tallying industrial and agricultural production, but efforts to integrate these data into a coherent whole were described as a “hodge podge” that was “both meaningless and misleading.”

Outsiders invigorate the bureau with new ideas

Following several more failed attempts at pulling together a coherent and credible set of national accounts in the early war years, the DBS brought in Agatha Chapman on assignment from the Bank of Canada in 1944 and Claude Isbister from academia in 1945 to create an urgently needed blueprint of the national economy. With their arrival and with the full support of new Chief Statistician Herbert Marshall, the bureau finally had the expertise and understanding of Keynesian macroeconomics to get the job done.

The first national accounts are published to wide acclaim

The first national accounts were presented to the federal government in November 1945 and to the general public in April 1946. The results showed that the Canadian gross national product had more than doubled, from $5.1 billion in 1938 to $11.7 billion in 1944. The government now had the information it needed to lay the foundations of the modern welfare state and propel the nation into the economic prosperity and stability of the post-war years.

One of the key findings of the first national accounts was that growth was not uniform across the country. For example, personal income in Ontario had doubled from $1 billion in 1938 to $2 billion in 1944. Meanwhile, in Saskatchewan, personal income had risen at a much slower pace (from $98 million to $149 million). Armed with these data, the federal government was able to implement a system of equalization payments among the provinces to ensure that no region was left behind, economically speaking.

Perhaps more importantly, the numbers were trusted. The Ottawa Evening Citizen reported that the national accounts were a “reliable and trustworthy barometer reflecting trends and portents in Canada’s life.”

Much of the credit for the success of the first national accounts belongs to Agatha Chapman. The chief administrative officer of the DBS spoke of Agatha in glowing terms. “There is no one in the Bureau, elsewhere in the Government Service, in the universities, or in private industry, who could be obtained with anything like the qualifications equivalent to those possessed by her.”

Among the first victims of the Cold War

Agatha Chapman’s intellectual curiosity extended beyond her work. She often hosted study groups in her apartment in Ottawa in the evening, where they read books and discussed a wide variety of topics, ranging from Keynes and economics to fascism and communism. Unfortunately for Agatha, several members of her study group were charged in early 1946 with passing on state secrets to Canada’s erstwhile ally in World War Two, the Soviet Union. Agatha herself was labelled although never actually charged with being a spy “cell leader.” In the wake of these sensational charges, Agatha Chapman was placed on leave with pay until further notice.

Following several months in legal limbo, Agatha Chapman requested to have her day in court to clear her name. This was duly granted and after only five hours of deliberation, the judge declared that “No case has been made out and as far as this trial is concerned the accused is dismissed.”

Throughout her ordeal, Agatha Chapman was supported by friends and colleagues at the DBS. Colleagues at the DBS attended her trial and were on hand to congratulate a smiling “Aggie” as she left court.

Soon after the trial, however, Agatha Chapman found herself looking for new job opportunities. Her former boss at the DBS, Claude Isbister, reached out to Professor Richard Stone at the Cambridge Department of Applied Economics, writing that “She is now in search of a job and if you know of any position in which her very considerable talents could be used I am sure that she would be pleased to hear from you.”

Stone quickly offered Agatha a research position, where she wrote “Wages and Salaries in the United Kingdom, 1920-1938” over her three-year stay in Cambridge. She returned to Canada in the early 1950s, forming a research consultancy specializing in labour and union issues with a former colleague at the Bank of Canada. Agatha Chapman passed away in 1963.

Her legacy lives on at the Agency today

During her ordeal, Agatha Chapman told the Ottawa Evening Citizen that “My work in the Government has been undertaken out of the conviction that this was the best way to make a contribution to my country.”

Statistics Canada recognizes that contribution today by bestowing an outstanding employee or team each year with the Agatha Chapman Innovation Award.

Source:
McDowall, Duncan: “The Sum of Satisfactions: Canada in the Age of National Accounting,” 2008, McGill-Queens University Press.

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