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4545 APRIL ~.

1909 4546 CONSIDERED IN COMMITTEE-THIRD READINGS.

HOUSE OF COMMONS.

TUESDAY, April 20, 1909.

Bill (No.

82) respecting the Mon-arch Fire Insurauce Company.-Mr. Beattie.

The SPEAKER took the Chair at Three o'clock.

Bill (No.

95) to incorporate the' Royal Guardians.-Mr. Lachance.

Bill (No.

114) to incorporate the British Colonial Fire Insurance Company.-Mr. Beland.

Bill the relief of Victor E. (No.

115) for Blackhall.-Mr. Sutherland.

Bill (No.


116) for the relief of Annie L. Coltman.-Mr. Tuniff.

Bill (No.

118) respecting the Anglo-Cana and Continental Bank.-Mr. Ger dia.n vais.

SECOND READINGS.

Bill (No.

140) respecting the Grand Trunk Pacific Branch Lines company.-Mr. Miller.

Bill respecting the Manitoba (No.

141) Rat.1ial Railway Cornpany.-Mr. Harris.

Bill (No.

142) to incorporate the Govern ing ('.

(lundl of the Snlvation Army in Can.

ada.-l\fr.

Miller.

(No.


143) Bill the relief of Mildred Patterson.-Mr. Har for I Gwendolyn Platt ris.

Bill (No.

144) for the relief of Charles Bowerbank Lowndes.-Mr. Wallace.

(No.

145) of for Moore.-Mr. Wallace.

relief Dill the Isaac Sir WILFRID LA DRIER moved the ad journment of the House.

Mr. SPROULE.

I suppose that we will have .the budget speech to-morrow.

Sir WILFRID LAURIER.

Yes.

IHQtion agreed to, ·and House adjourned at ]1.10 p.m. WAYS AND MEANS.-THE BUDGET.

Hon.
Hon.

W. S. FIELDING (Minister of Fin· ance) moved that the House go into com· mittee to consider th~ ways and means for raising the Supply to be granted to His Majesty.

He said; In the presentation of the hudget it is usual to devote some at tention to each of three fiscnl years.
First WE'; have to consider the completed year, the a.ccounts of which have been laid before parliament in due course; n~xt we have to consider the current yenr, or as in the instance the year which actually present ended a few days ago, but the accounts of which have not yet b~en closed; and lastly we have to consider what is the outlook for the year that lies ahead of us.

It is now some time since the accounts fOl the fiscal year 1907-8, were submitted to parliament and probably most hon.
members who are interested have given them consideration; nevertheless for refer· ence it is always well to note in the budget speech the principal features of these ac counts and therefore I desire to call a.tten tion to the chief points in them.

The re sults of the operations of the fi5cal year 1907-08 (that is, the year which was closed on the 31st of ~f arch.

1908) diu not differ very materially from the anticipationa ex pressed in the last budget speech.
My ex pectation was that we should receive a rev en.ue of $00.500,000; the actual revenue was $96,054,505.81.

or $445,494,19 less than my expectations.

I had counted, however, on an expenditure chargeable to revenue Iund of $77.500.000, but the actual expenditure proved to be $76.641,451.59, or $858,548.41 less than the e5timate.
The falling off in the expenditure was more than sufficient to balance th~ shortage of the revenu~, and the Ilet result was that whereas I had anticipated a surplus of $19.000,000 the ac tual re,mlt was a surplus of $19,413.054.22.

the convenience of I COS~OI,II',\'rEIl Fl:sn-WOi-8.

Elltilllat\,d == i ~=c===~~=:~== i Bll,IKt't:-;I~'ch i nre(lt~r than E>;tilll:lte.

litb :HflTCh, I rll)I'(.

I --'-----1--·----:-------- ------ * cb.

L,'s~ t.han Estiwate.

$ cts.

Actual.

I , .


~ ct~.1 , 9Ii,UOO,OOO 00 i. ii,r,oo.04JO 00 1.

10,000,1)00 00 : ---'---__-.-J-__---'- s ct~'i .

!H3,05.1,505 81: ir.,IH1,~51 59 i UI,H3,fJ5.1 221 ·113,054 :..»2 - - ' - .I.I5,4fJ4 1!1 d;XI.lH8 41 _ - - - -_ .

- .

- - .......... , f{.·\'<::1I1h' ••.

K'(l(>n,litllr, Sllr!,l\\.~ .

.

.

.


4547 COMMONS 4548 The previous fiscal period was one of nine months and therefore it would not be conveni,mt to make any comparison be tween that period and the last fiscal year.

interest It may however not be without that I should call attention kl what are the sourCed of rodvenue as shown in the ac counts of that year: Sourees of ReHDue.

1907.8.

.. •• .. .. .. .. .. .• .. .. •.

.. Customs..

Excise.. ..

Po!


';t Office.. Dominion Lands.. .. Railways.. .. Miscelhweous.. .. .. $57,M3;811 2S 15,782,151 68 7.107.886 86 1,883,61988 9.53+.596 20 4,202,~9 lJ' It is to be noticed that $96,054,505 81 the customs re venue wns the largest in the history of the It is also gratifying to be able Dominion.

10 state that that very large revenue was realized with a lower rate of customs tax ation than had existed in former times, as will appear from the following com- parison; .
A"erage Ratl's of Customs Duty.

.. .. .. .. .

.

.. Anrage Rate Average Rate on Dutiable on Dutiable and Fre('!.

Imports.

19:129 1896. .

.

• • .

.

.

• • 29,97' 18 ·613 29·967 .. 1697.. .. 26·582 16 ·480 1908..

Particularly gratifying was the continued increase in the revenue of the Post Office Department.

that depart The affairs of ment for 1907-8 show a surplus of $1,101, 957.12.
I am sure the House wilJ agree with me that this is a most gratifying re turn, especially when we bear in mind that there has been a wide extension of the rates of service.

this department a few postage, and that years ago was a constant burden on the treasury, showing year after year a very large deficit.

that we have cheaper I have dealt so far with the consolidated fund expenditure: There is, however, a large expenditure in addition, known as capital and special expenditure.
For con vE:nience of reference I put in a statement showing what this expenditure for the year amoun ted to : Capital and Special E:lI:penditure, J907-8.

Capital Expl'nditure.

Transcon- National .

tinental Ry.. .. .. .. .. lands .. .. Railways.. Canals.. .. .. }'ublic works.

D(llnlllioll ~lilitia.

.

.$18,910.253 58 ',761.299 5-1 1.723..156.07 ·2.969,0.908 768.243 9-1 1.297.90-l65 Special Expenditure.

subsidies... $2,037,629 30 .. 2,787,35' 21 .. Railway Bounties.... CbargH of manage- .. .••.

•.
•.

ment.. .. ----$30,429,900 86 682,33791 - - - - - $ 5,507.321 -12 .. .. .

...$35,937,228 28 Total.. .. .. Mr.

FIELDING.

.. A large proportion of this capital and special expenditure was provided out of the revenue by means of our surplus of 19i millions of dollars.

Deducting from the total capital and special expenditure of $35,931,228, the surplus of $19,413,064, sink.

ing fund expenditure of $2.234,263, and a small refund of $910, in all $21,648,228.
it will be found thst the increase of the net debt on the 31st of March.

1~, was $14.

288,999.88, notwithstanding the fact that in that year we expended $18,910,253 on the the National" Trans· eastern division of continental Railway alone.

But that outlay, there would have been a reduction in the debt of $4,621,253.
for Coming now to the affairs of the fiscal year 1908-9, which ended a few days a~oi I have to point out that our practice With regard to the closing of the accounts of the fiscal year in Canada differs from that of the mother country.

There the fiscal year closes on the 31st day of March.

and the accounts are closed up immediately.

That is quite possible in a country with conditions such as those of Enltland with comparatively short dist-ances and complete means of communication.
But in a coun try like Canada, with a vast territor}' and public business going on all over the wide Dominion, it has not been possible to close up the accounts so early.

The law per mits three months for closing the accounts, though we always endeavour to clo5e them in less time.

Consequently, although the fiscal year bas actually closed, we are not by any means in a position to determine precisely what has been the revenue and what the expenditure for the year.
The best we -can do is to take the figures as we have them up to date, and make reasonable allowance for probabilities, and thus reach an estimate of what is likely to be the outcome for the year.

The revenue of the year, I need hardly remind the House, was afIected by a world-wide stringency which started in the fall of 1907.

The revenue of l00a..9, as received and accounted for up to the loth of April, 1909, was $84,352,581.30.
My estimate is that when the returns are the completed Rnd the account rE:venue will be fOWld to have amounted to 84i millions of dollars.

This is IIi mill ions of dollars less than the revenue of the previous year, or a shrinkage of 12 per cent.

In the face of such a falling of revenue.

in view of the trade depression so well known, in view of the difficulties which Min i50ters of Finance the world over are ex· periencing in the preparation of their bud gets.
it would not be surprising if it became my duty to report a very considerable de Rcit on the operations of the last year.

I ccnfess that at one t-ime.I viewed the situ ntion with anxiety, and would not have been surprised if on the closing of the ac counts there had turned out to be a balance on the wron.e: side.

I am happy to say, how.

ever, that my apprehensions in that di is closed, "rHlL 20.
1900 4550 reclion nre not to be realized, I am glad to Le uble to say, as fur as the nccounts lit present indicate, \hat we shal~ close the the lasi fiscal year WIth II sur· afftrirs of plus of The expenditure.

as $1,500,000.

"ho\\'n bv the returns up to the lOth of ;\pril.

1000. amounted to $72,9.'l!'l.642.22.

Tak· in" the cxpenditure for the halnnec of the \'~Ir al ahout Ihe snme as it "'ns in the j,rc"ious year, we estimnte the total expendi.
the v('nr charzcable to in('(lme at lUre (If nhollt $83,006.000; nnd, liS 1 estimte ll.

rc· ,·tlHle of $84,500.000.

this will lea"e us with a ;:::de margin of surplus to the extent or $1,· ;,IlO.ooo, and I am not wiLhout It hope that the accounts the IOn I ~llTl'llI~ nlllY be even !=omewhat it will he felt state· '1111 ~tl(,l1t.

it be realized, will be R most i';lli..:fnd.ory one for Canada.

for we nrc IIt-alin,!!


with a period when throughout the w"rI,1 there have heen financial ('onditions whil·h hn"e much disturbed busin('ss, and wh'~11 in the natUrAl order of things a very ntda"ournble balance might ha.ve been ex 1,,'('1("11.

That statement, of course, deals "111\' with the consolidated fund revenue IIllIi for C'onvenience I the ordinary expenditure of ~ov­ 1llH\' C'all ··I'I1'lIIent.

the final closing of ('xvelHliture, what larg('T.


this ;::url' if that and other ('~Iimnt('d it will cnpital .94!l.2":!4.000, to $1,67fd)Ofl, tnking' o....er of 'l'hc-re is of course to be considered eap· ita!

and special expenditure.

We estimati!

take twenty.fjve and one·half thaI this mHlioll dollllfS to pay the outlay of for th~ Tl'anscontinentul war Illst pa.$t ·Haihn,~·.

Thp.

the Quebec the slim of $6.· Iorid)Jc IllhJs to our debt 424.1)00, ulld special ('harg-es nmount to $17,300,000.
These sums From this we will H,C'J.

;"l'cgate $49,224,000.

h\'l~ to d~d\1ct t11f' at !=I1Tplus.

;Iud n half million dollars, and sink {'IlP.

These fnl1i{ Hmotinlin.1:l' ill,!!

two lIg'l!rcgnte $3.175.000 which.

deduded \l'ollld len\'c a ]'alanee of in'lll round Ilnmh('rs $46,000,000, .HG.(r'2!:l.()(}{l.

whkh will he ndl\ed to the !let debt of tl1f' YC:lr elo~in~ on the 31st of !

'llnada for tlJi!= \·(,Hf.

This is fI vcry huge "arch {Jf itll'l'CIt!=c hut, it 'is to bc noted at onc€ t.lnlt $.
't~.OO).n(l(l of thnt nllltlunt is u(,,(,Olmtcd for by the Nnlionnl Tl'llllScontill{'ntnl Railway nll'.1 to be the Nntionnl det'llled hNeaflcr So it will he Tr:lll!=C'oldinclllal Railwuy.

!

'c.

'11 thilt.

("l'lns.iderablc in("rl'a,·~ ill our debt.

it is due to the very !

"1J{'{'inl expellliiture that we nre incurring ill c'"'1ll1cdioli with thcl grellt work of the C{'llslruction of the X/llional Trnnscontin· putal TIailwar.

the Quebec bridge.
the Quebec bridge.

which is if we ha"e II n'n' a plirt of ill tion we hnd on the subjcet.

nnd a simple comput.ation for thp few remaining day~ of the year will enahlc him to work it out ·for himself.

the minister goive me Mr. FOSTER.

CllIl the amount pnid Ollt for bounties in the Consolidated Revenue Fund Expenditure for the year jllst C'Joscd?

Mr.

FIELDING.

1 hlt'"c 1I0t the figures from ml'mory ahout.

$2.2.18,· at hancl.

but If that is not suh:illlntinlly corrcct r 000. shall give my hon.
friend the exact figures later.

in linc.

('onsfruclioll.

I-here WIlS no portion of I freely say that we mj~ht have avoid~d this addition to the public deht.

In the first place, we might.

have l\\'oided it by the refraining from the whole or in pnrt.

of the enstern division of the National Transcontin{'lltnl Railway.

I have occasionally heard SUf!f!

'cstions of something of that kind frOIll the members Particul<icly have I heard of this House.
criticisms of the con.struetion uf that sec· tion of the line which li('s between Quebec and 1\IOl1cOOn.

Now, whalcv('r llIay be said by people living in more rcmote districts.

familit\r with the neel1s of who nre not that the Trunscontinentol Rnilway which wns .$0 unanimously demnnded b.v the people par· ticularly connected with it ns the line be tween Quebec and Moncton, no portion, I say that without reserve.

1'imt;!
1'imt;!

und again representations were mnde to the ~overn· ment of Cllnada as the construction of hnve thot built the ead!o;lrIl division, particularly that section, would have been n nunow, almost the a provincial policy.
maritime regard to regard to nny differ~nees party, without they might have on other Ill1cstions, were practically unanimous in demoJlding that if Canndu was to cng'ngo in tho l'lItCl'prise of another transcont.incnll\1 railwny they dhould have conn~etion with that road by a some line which was heltcr suited for transcontinental service t.han the old.

In· tercolonial Rnilway.


legislatures of the provinces, boards .of tnu\(", ·the various rcprc6entalive boJies of thnt llortinll of the country, again and agnin ("allcd upon the government of Callafla to build thnt sec· tion of the road.

Therefore, when hon.

gen· tIt-men critich:e the ("ollstruction of that I would luwe them b~lH in mind road, what I ~tated n mOlllcllt ago, that tllf're was no portion of the whole tnlll~colltincntal line which wns more 1IIlh'cn:rdly demanded than to the need for road.
Not provinces, WiUlOut The people of The to :\Ir.

FOSTER.

Can my hOIl.

frieud give by the people immediately C'onct'fIIcd, the i!

("IlIS of rc"enuc, t"UStOIllS 311(1 excise?

that between Quebec Iln(l Moncton.

:\Ir.

FIELDIXG.

Xo li;.

!Ilf"~ at !rh::nJ :1 llllnd in detail.

,lar or l,W(l I htl\'e not There was another way in which we these might have avoided this (uhJilion to the I faye nl\' hon.

public deLt.

We might ha,'~ followed the :1£.

'0 Ih(" hlll·~t irlforma-.


example of our )1redecc,;sors tiS to the man· 4551 COMMONS I Del of aiding the construction of a Lrans· continental railway.

I do not say this in order to criticise the action of our prede that aid was cessors.

We know very well granted to the Canadian Pacific Railway in three forms.

There was a gift of finished road.

costing an enormous amount of pub lic money, 8 gift of $25,000,000 in cash arid of 25.000,000 acres of land.
Leaving out of consideration the cash bonus snd gift of finished road to the Canadian Pacific Rail way, and considering only the land grant, I venture to day that if we had been wil ling to give the Grand Trunk Pacific 25.

000.000 acres of land in the west, we could have devised 8 scheme which would not have added cnl!

dollar to the public debt of Canada.

But would it have been am 'Sure upon that.

a wise policy?

question very be wide opinion.


Whatever may be said of the wisdom of the govern ment of that day in granting such a large land subsidy to the Canadian Pacific Rail· way.
and I have no desire now to criticise that policy, whatever may be said as to that policy judged in the the merits of light of the time when it was devised, it is but the simple truth to say that as the years rolled on that policy caused wide spread dissatisfaction in the western coun try, and if it had been proposed to again adopt subsidizing a great tTanscontinental railway by giving a luge block of land in the Northwest territory, I am satisfied that such a policy would not have commended itself to the judg ment of thb House or of the country.
The the railway land for for corporations.

is the demand of the western people.

the settler.

not the policy of there will difference not of a Some hon.

MEMBERS.

Oh.

oh.

So I say that appearances, if we Mr.

FIELDING.

had regard only for if we were afraid of adding to the public debt, we might have avoided it.
we need not have r\lsponded to the wish of the mari· time provinces as to the construction of the eastern division, we need not have paid the large sums that we are paying out now from time' to time.

We might have given land and I am sure the Grand Trunk Pacific would have received a policy of that kind with great favour.
But we were of opinion that a policy of that kind was not a wise policy and that our true course was to build the eastern division to that of pay for to face the responsibility it would bring on us for a short time until that responsibility becomes.

as it will at an early period in its histocy, an interest-bearing asset.

While the cost of construction will remain as a. debt.

there will come a time in the early history of that road when the Grand Trunk road as a government work.
the public treasury, it out of Mr.

FIELDING.

the debt of Pacific Company must pay 3 per cent on its cost.

that por.

Practically therefore, tion of the country will be wiped out because it will be represented as an interest-bearini asset.

So we Ba.y that while a few short-sighted people.

well.

intentioned no doubt.

migM say that we I am should not have incurred this debt.

the the sounder sure that country will say-not necessarily condemn.
ing the policy of times because conditions may have differed then-that it would have been a mistake f.o.day to adopt that policy of land subsidy, and that we did well to face the financial responsi.

bility which is involved by these addition.

to the public debt.

judgment of former our Our for us countries.

is difficult.

trade statistics for the past year will necessarily be unfavourable.

but they will not.

be more unfavourable than the statistics of other The year 1907 was only a partial year.
a period of nine months in our financial accounts, and to make therefore it comparisons.

The total trade for the fiscal rear 1908 reached a very higb figure, being lUSt.

$100,000.000 more than that.

of the fiscal year 1906. the last full period.

of 12 months.

In 1906 our exports amounted to $256.

586,630.

In 1908 they increaaed to $280•• 006, 606.

Our imports in 1906 were $294.286,· 015. and in HIre.

$370,786.625.

Our total trade in 1906 amounted to $550.872,000.

and in 1908 to $650.793.131.


I do not attempt any comparison with the previous year be· cause covered nine months only.

For the fiscal year 1909. we have no official returns that are com· plete; but from the best information we can obtain in the uncompleted returns, our exports in 1909 amounted to $261.379,904, and our imports to $292.358,021.

Our total trade thus amounted to $553,737.325.


Our exports have fallen slightly, but there is a marked decline in our In this respect we are able to make very satia.

factory comparison with the United States.

As regards imports.

Canada and the United the decline States stand on even terms.

the- same in both cases.

But being about the calendar year.

taking the figureB of it would appear from' exports the that Canada have decreased but a small degree.
whereas those of the United States have decreased very lar~ely.

imports.

period fiscal then Coming now to the year 1909-10, with the adequate resources and widely recognized energies of the Canadian people, it is only to aS8ume that we shall Bpeedily be fair able to overtake the fal!ing off of the past.

It is only reasonable to suppose year.

tha~ the conditions of the past year are quite abnormal and due to special circum stances.
·which I think will disappear to a sufficient extent the coming year to enable us to receive a very considerable increaae of revenue over that of the year just past.. 455,'3 4554 Of course I do not think we would be justi fi~d ill expecting to reach th~ very high re,'(>Ilue of 1!J07-8, but we do think that the rcvellLlC uf I!JO!J-10 will considerably exceed that of the year which has closed.

The year just closed we llrc estimating to give a rey Cllue ,)l 8H million dollars.

For the com \"l'a!'
For the com \"l'a!'

wc estimate that we shall realize in" a ';.c:\son;lble percentage over that, but we do 110t expect to approach at all the re"enue of thc prcviou;; year which was $96,000,000.

take us undoubtedly .another :-;ear It will to oVl'r!al,e a htUe more.

We think there is every reasonable the turn of the tide hus probability that come, and that from this out our revenue will steadily increase.

But for the present the reyenue of 1907-8 must stand as the hig-h water mark of our income.
and possluly that With this condition of revenue and with the vcry many demands being made upon it would almost seem unavoidable that us, the difficulties by an in we should meet crease in taxation.

In some other eQuntrie;; that seems to be the remedy for the finan cial conJitions that have there arisen.

In our there is no need however, incr<.

'used taxation.

We think the lit'n~ ,)f trncr and sounder method is to meet the situation by fl.
substantial reduction in our the method we expcnditnre, nnd that judgment" is have adopted.

Unquestionably if we were to continue the same rate of expenditure liS that which has prevailed in recent years, we should be obliged to add to the burdens of taxation; but we have come to the con· clusion that the part of wisdom is to ask aU concerned to be patient with us for t·he the brakes severely on time while we put I have prepared a statement expenditure.
in the estimates showing the reductions It is for Hl09·1O as compared with 1908-9. but fair to say that the estimates for 1908-9 which I quote are the complete estimutes for that year.

That is to say, they are the cstimntes submitted in the previous session and the supplementary estimates of the current session.

The estimates for 1908-9 on consolidated fund amounted ta $89,412,8G8.

For the new year now beginning, the esti.

mates for the same account have been re in that nc.

uuced to $80,078,624.


count there is a reduction of $9,324,243.

If we turn to the expenditure on capital ac count, we find that in 1908-9 our estimates amounted to $43,658,365, and for the com.

the figures are $30,411,150.

inA' year So that.

taking the decrease of $9,334,243 on -consolidated fund account alld $13,2·!7,215 on capital account, "'C have a total decrea.5e in estimates on the whole expenditure of $22,581,458.
Here are the details: So that - ... ----.~=~===c===';'====r=o==;=== REDUCTIONS IN ESTBIA'fES FOR 1009-10. l00s··fl... 1009-10.

Decrea~e.

S cts.

g ct.-!, 8: cts.

S ct~.

C"ns"li,bt.·,1 Fund- .

L'Oll,lic Works Al::"l'icllltnr~ Milit.i:\ "lit.fllll· and Fi~hN·i<:iI H:lil\\"a.r~ ;Iud Call:.lls Other Vt'p'\l·trllcnt;; .. _.

.. .

.....-..--I .

..•.... .


, 17,42':?,:~4 78 8,184..10R 06 1,112,GOO 00 1,7HI,t;27 tI(i 5,H9,27~ 22 4.813,150 00 ;i,V~3,OOO 00 4,8'i9,fJ80 00 11,880,85733 12,4:~-.,373 0I:l 4!l,207,72fJ in 41i,162,338 17 R9,412,868:llBO,Oi8,1I21001 Cal,ital- l'ul,lie W"lk~ 1::li\II'''.\-~ 'I lid Callab 1)'"uilli"11 L:lll,ls ~li!i1.ia awl 1l,·ft·llC".

, .

I I :: _ .

.. ~ ~?

, I ~,h.x;,.

'L lfJ I a"H1tl,:,(j/i 75 I I !IO:~.:!

'Jl; f)lj 1,:Ml;OI)() 00 I -1,512,000 00 23,828,1:"lQ IlO .
771,00000 1,3Ol'~I_'OO__OO !1,:?37,!J-Ili 72 m7,127 00 !l36,125 12 1,0-13,920 00 r.m-t,51575 3,045,3!

)l ;~-I 3,045,3!J1 3-1 12,:179,634 75 9,334.2-13 41 .

8711,457 ;1 i !

!

._._.. ~ 13,~lm,416 75 13:?,::nn 00 _ 43,li5.

''l,:lIi:3 lU: i , ;'11,-111.150 110 871,,-1;); it I' Kut f),·cn':ts\· Capital.... .

'1',,1,,1 Dt'cl"(':\l'-c C"II.~"li,l:tt{'(l FUIHI and Callital......... .. .

14,1:?
14,1:?

:J,I,,2:'i1 'il lS'ti,.D' - - - - 1:,,21,,21510 22,:.s1,45S 51 "1 : '.j -- ....---c--,-,--.-,-----:c-----------~--- -11\t"1llOJilr~ all E~tilrlatf'~ of eh" Yrar.

The reductions, that we fire in the estimates are very consider- makinc:: able.. We have yet to bring down sOllie sUPP!...

'lllentaries .for the current year, but therefore, the fi.~\lrcs.

Ilt(~y will not materially alter 'l'ht:y will he very moderate.
The supple· Illelllal'ie>; which have to be brought down Iuw,lrc!s the close of the year are one of the 144 REYISED EDITIO:S 4555 COMMONS unseen things we cannot determine in ad vance, except to say that it is the determin ation of the government to keep the ex penditure of the year within very moderate figures.

We ask hon.

mC!

'!1bers t?

appreci ate the difficulty we have In makmg reduc tions.

There are demands from hon.

gen tlemen of both sides and from all over the country for many public works.
and un these works in many instances.

doubtedly, are urgent and important.

and with better conditions it would be our duty to respond to those demands.

But we wish to point out to those interested that they must sub if a sacrifice it be.

for mit to the sacrifice, a short time, nnd consent to a severe cut in OUf expenditure in order that our bur dens may not be too heavy and our credit be well maintained.

We know that in many parts of the country great works are pro jected-railways.

canals.
canals.

and other enter prises which may in themselves be worthy enough, • some of which will have to be undertaken at a Jater date and will figure largely in the development of Canada; but it is much more important that we should, in the present condition of affairs, await an improved financial Therefore the· enter we say to the promoters of all prises, no matter how worthy they may be.

that them stand aside for the present.

they must be content condition.

to let Mr. FOSTER.
to let Mr. FOSTER.

What amount of capital eastern expenditure is proposed for section of the Grand Trunk Pacific?

the to our be - year it out for all possible - endeavour aim.

ought to during as revenue, Mr.

FIELDING.

to accomplish provide the $20.000.000.

We think and we that as shall of far now our op,ming, the ordinary expendit~re p.nd for a considerable part of our caPital expenditures-if possible even for ~ll of t.hem.
There is one work as to the WIsdom of borrowing for which there can ~e no question, and thatJ is the Trans~ontmen.tal If we can succeed 10 keep~ng Railway.

down our borrowings for new works durmg the comin~ year to the sum which we wish to expend on the Transcontinental Railway, I am sure we shall have a very good state ment to present.

I do not know that we can accomplish this, but it is to be Our aim.
2nd I am sure that if for the works of the year we have to borrow any sum in ex cess of that required for the Trimscont.inen· tal Railway.

it will not be very large.

Now it has been our good fortune to be able to present an uninterrupted series of surpluses for a long period of years.

For the first year of t,bis government, 1897. a year in which we had oJ.11y wh.at I may call a partial control of pnbhc affairs, there was a deficit of $519,981.44.

Since that.

we include the estimated sur- have had.


if I Mr.

FIELDING.

.

I plus lor the year just closed, twelve sur~ pluses amounting to $115,~9,081.83.

If we deduct the $519.981.44 of our first deficit- if it be chargeable to us-we find that for the twelve and three-quarter years we have had a total surplus of $114,539.106.39.

This represents a net average aDnua·1 surplus for these twelve and three·quarter years of '8.983.459.32.

refer Now, I am not unmindful of fact the that.

as regards one item.


the method by which these surpluses have been estimated has beert occasionally questioned in .the to the item of bounties, House.

which is charged to a spedal account.

'I have explained this point on sevpral occa sions.

but, as there are many new members this session.

it may possibly not be wrong if I again state the view the governmen' first entertained when the made.

Under the bounties, which did not amount to a very large sum, were treated as a drawback.
It spemed to be assumed that there was money paid in some way into the treasury.

and that it was received back by way of draw~ back; at all events the common understand· ing of is the repayment of money which has been received.

the former government, change was a drawback Mr. R. L. nORDEN.

They were charged to revenuC'".

were they not?

the dealing with that was not paid in.

so was Mr.

FIELDING.

That was the resun, take that form.


T.hey although it did not fl.ppeared to be treated as a reduc.tion of the cust-oms duty-the custom's duties were in reality, because they were understated, of moneys this subject drawback to never had been which It equi reduced the revenue and to a charge on revenue account.

valent We thought the best way the matter, the thllt of be treated account differently.

should the whole bounty time, And, as.


at that question was being re.considerc~, we .came to conclusion that bounties bemg a temporary aid to industries,-they have been somewhat longer in exist-ence, is it the time-they true might properly be treated in.

a special .ac count in the same way as a raIlway SUbSIdy was treated.

When you pay a sum .

of money as a railway subsidy, you receIve it; you do not get any pro.p.

nothing for erty.
nothing for erty.

you have no assets to rep.cesent ,It, but you give these sums as temporary aIds to a great enterprise.

which, no doubt.

will bear fruit in future years in the devefop· ment of the country.

And we thought that the bounties which were to be regarded as temporary ~ssistance to .grea.t industries, might properly be treated 10 the same way.

Therefore is called a ';pecial account.'

the same as r8;n~ I am aware.

as I have saId.

way subsidies.


that the propriety of that has been ques· think that the reasons which tioned., but I they "were treated in what than was expected at 4557 APRIL 20, 1909 Jed us to take this view Bre sound reuons.

But.

without arguing that, I have thought it.

better to present the calculation of what would have been the surplus if the bounties had been charged to income.

Mr. R. L. BORDEN.

Will the boo.


min ister stale how much these bounties have amounted up to the present time-in oilier words.

what is the amount of this specis'} account?

$1,000,000 over a Mr. ~IELDING.

Speaking from memory, dollar!

twelve million somethmg If we or charge year.


the bounties in this special account all to ordinary revenue account we shall find that the result will be to snow a totaJ· sur plus for the twelve and three-quarter years of $09,832,075.55, and an average annual sur plus for the twelve and three-quarter years of $7,869,182.39.

It will be seen therefore that while the change in t·he method 8ug: gested by some hon.
gentlemen would make ~ ~ifference in the surpluses of that period, 1t IS by no means a :very -large difference the surpluses have been 60 large for the whole period that a. change in the mebhod of keeping the aCC<lunt would not ma.ter.

ially affect the result.

Mr. MIDDLEBRO.

What.

deficit would there be this year the bounties were if charged to revenues instead of to capital?

Mr.

FIELDING.

Both sides of the ac· count.


would come pretty close together; there might be a small deficit; and this is the only year in twelve and three-qu&rter years when this change in the method of keeping the accounts could possibly have affected the question whether there was a 'rhe heaviest item of surplus or a deficit.

the bounty on iron and these bounties, steel, will expire in 1910.

The bounty on lead will expire in 1913.


There is a bounty on electric smelting which runs for two years longer thsn the other iron and steel think tha.t much bounties, but will be So, item.

that whatever may be said with regard to these bounties, items will expire shortly, and I -suppose there will bardly be much room for contention as to their pro· I merely wished per place in the accounts.
if a different to emphasize the fact method of keeping t·he a.ccounts had been employed, while the surplus would have been 1'i!duoed on the whole, yet the bount,.. ies have played no VI!

:ry large part in that result.

I do not claimed under the heaviest that There is another point I wish to deal with relating to surpluses and deficits.

I have regretled to observe a disposition on the part.

of some of the public press to create a new standard in these discussions of surpluses and deficits.
One Conserva· tive newspaper sets forth in flaming head· lines the statement that in the public ac· CQunts for there is a deficit of 1«1 the year to it is not a new meaning, I have seen.

$30.000,000, wit-h more to come.

similar statements also in the other news.

papers.

Now, I submit in all fairness thai that is not.

a candid way of dealing with the public accounts.


The word 'surplult' s and the word 'deficit' have -a meaning, in the finances well established meaning, is not a meaning which I of Canada.

I t. have created, it is a meaning which has existed Ulroughout t·he public accounts of Canada from the be· the present.

ginning of confederation If we go back to 1867 and look moment.

through the public accounts from that.


year down to the present, we shall discover that this modern method of computing the if surpluses· be accepted.. · we shall be farced to the conclusion-a conclusion which I re.

fuse to accept-that the Finance Ministera from Sir John Rose down to the hon.

mem· ber for North Toronto (Mr. Foster), juggled with t·he accounts, falsified the accounts Gf I say I do not the each year's operations.

make that charge; I say that it is not the case.


But I say that this tendency on the part of our critics to take the balance at.

the balance which is the end of the year, added to the public debt, as a deficit is a1to~etheT unfair ftnd at variance with the established practice of the Dominion of Canada.

Mr. AMES.

What.

is the established puc· lice of Great Britain?

Mr.

FIELDING.

I was dealing with the established practice of· Canada.

and Mr. R. L. BORDEN.


Might I ask the Fin· this system, which ance Minister whether we have undoubtedly in Canada since 186'1, of dividini the expenditure into capi.

revenue, prevaiLs in any other tal country, and if 50, I would like also to ask whether if our prac· tice is different from that of all other civi· lize<!

countries it would not be a good time to conform OUT practice to that of other countries when we have been having an enormous superabundance of Iev~nue during the past eight or ten years?
in what country?

•.

I Mr.

FIELDING.

I do not agree with that.

think we are mo-re concerned with what has been the established practice 'of Canada than with what has been the estab lished practice in other cGuntries, the oon.

ditions of which may be utterly unlike I say that when we find those 01 Canada.

the public press treating deficits in this way, when they uy: Your total expendi.
ture for in any class was ao much and your revenue so much, nnd the I say that is a mis balance is a· deficit, leading statement, is an unfair state.

it ment, and it ought not to be made by any respectable journal in this country.

the year Mr. R. L. nORDEN.

What is the prac tice of the United States?

4559 COMMONS is :Mr.

FIELDING.

Really I would not like I think in England to answer definitely.

the there But different.


practice are reasons why this practice in Canada think would not be a sound practice.

a country which has to engage in large operations.

a country which needs to bor row money in order reo sources, must eJltablish a different condi tio~ from that -in an old settled country which has hundreds of years of experience.

Mr. R. L. BORDEN.

What is the prac to develope its I tice in Australia and New Zealand?

Mr.

FIELDING.

I am bound to say that I am not aware.


But I do not think it is important.

Mr. R. L. BORDEN.

They are like us, are Uley not?

I I .

ar.e enttrely l1ke us.

Mr. F.IELD~G.

I do not admit they think my hon.

fflend should recognize am not that at J,>resent discussing the practice of Aus traIt a ; I am not concerned in discussina the practice of England and the United States; I. am chiefly concerned in showing the unfatrness of my Conservative friendg i!"

applying to.
applying to.

the finances of the present hOle a test WhIch they never applied to the finances when their own friends were in power.

That is the point I wish to make that is the point I may expect to make with any fair-minded man in the Dominion of Canada.

Now.

let ua see how this would work out.

Let us go back to the early days of our confederation in 1869 when Sir John Rose was Minister of Finance.

The accounts of Sir John Rose for that year showed that he ~ad a surplus of $341,090.52.

Now, ae.
Now, ae.

cO:~l.Ilg to the present contention of my cntIcs.

the.se accounts were deceptive Sir John Rose had no surplus that year: but Hi~ he had a small deficit of $102.184.

accounts were misleading.

But he was con sidered to be a pretty good Ministu of Finance.

and the fact that he adopted that method is a reason why I, his junior for so many years, should pay pf()found respect to the method; I believe he adopted it for good reasons, an·d I think reasons which were good then lire good to-day.
Then :we had another eminent Finance Minister m the person of Sir Francis Hincks.

In the year 1872 Sir Francis Hincks publisherl a return showing that he had a surplu~ of $3.125.344.86.

But if the present method which is advocated by my Conservative in the press is correct.

a method fi'iends wh.ich is occasionally heard' of this House, inste;ad of h~viflg that surplus of $3.J25,000, Sir FranCIS Hincks had a de ficit of $4.480.554.39.
So you see the effect of applying to the Ministers of Finance of earlier daya the very criticism that is now offered respectin&, our methods with in y,.

R. L. BORDEN.

that amount.

the presen' Finance Minister, this subject.

Sir Leonard Tilley was Min ister of Finance in 1873. when hi~ accounts showed a surplus of $1,638.821.53; but, ac cording to the present contention.
instead of having a surplus for if the same criticism had been applied to Sir is applied to the llur Leon81'd Tilley that plus of it would have shown that instead of his hav_ ing a surplus that year of $1.638,000, he had a deficit of $17.661,389.60.

Then we come agaln to Sir Leonard Tilley in 1881, when he showed a surplus of $4,132.743.12.

but, according to the present contention.

he should have shown a deficit of $2.944.191.79.

in 1883 Sir Leonard Tilley showed a Again.


surplus of $7.064,492.35, the largest surpluR ever reported by a Conservative Minister of Finance, but.

accordini' to the present con tention he had no surplus at all.

but h~ had a deficit of $4,805.063.68.

Now.

let us come nearer home.

My hon.

friend from North Toronto (Mr. Foster), and my im mediate predecessor in the post of Finance Minister.

in 1889 showed a surplus- of $1,865.

035.47.


But, according to the contention of my critics and their friends to-day.

his ac counts were wrong; he juggled with the Ilt~ accounts; he misled the people.

should have shown a deficit of $2.998,683.49.

In 1800 my hon.

friend showed a surplus of $3.885,893.94, the larges' surplus he ever had.
He was not very lucky in the matter of surpluses; but if he had shown the accounts in the way that his friends now demand I should show the ac counts, his surplus of $3,885,000 would have been wiped out, and he would have been obliged to show a deficit in the account!

for the year.

in that case.

fOI Now I do not mean to say for a momen' that Sir John Rose, Sir Francis Hinck!, Sir Leonard Tilley and my hon.

friend from North Toronto falsified their accounts, but thp.
Conservative critics of to-day would say that, because they demand a standard of declaring a surplus which, if applied to the years I have spoken of, would show that these accounts were incorrect.

On the contrary.

I claim that my hon.

friend.

my predecessor.

treated the accounts in a pro per way.

In a country like Canada, with large needs, a country which must borrow a a great deal of money for development.

country which cannot possibly.


as a rule, manage its public affairs with the ordinary revenues, I say it is a proper distinction to make and charges charges to capital.

There may be room for dispute as to a particular item.

whether it should be char~ed to one accoun t or the other.

but that does not touch the principle.

There always will be room for difference of opinion in that matter.

But I aDl dealing with the principle.


and I say the principle which was adopted by Sir John Rose, by Sir Francis Hincks and by Sir Leonard between income to 4561 APRIL 20, 1909 4562 a Tilley snd by the hon.

member for North Toronto, is the principle on which accounts are made up to-day, and therefore the very criticism that is offered by some of my Con servative friends as to my method (If making up the accounts is entirely unjustified.
between distinction A very interesting feature of our expendi tures in recent years has been the very large amounts of money that have been applied to expenditures upon these capital O!

special services with a very moderate addition to the public debt.

Now the very purpose of making charges against income and charges against capital, is to indicate that you may probably need to borrow money to meet your capital ac the assumption that you count.
That cannot provide out of your ordinary revenue for these special and large needs.

Well, what do we find?

We find that the total capital and special outlay for the period I have spoken of, for twelve and three-quarter ~'ears, has amounted to $212,449,526.42.
I say that represents a class of expenditure aJ to which, if it had not been charged to capital account, and if the finanCial condi tien of Canada to·day obliged us to charge it to capital account, no just criticism could have been offered against such a course.

is, had have during capital But what and special is the fact?
While we have spent the enonnous sum in the twelve and three·quarter years of $212,449,000 on these capital and special charges, we have only added to the public debt during that .time $65,500,000.

We have pa.id DO less than less a fraction of that large $147,000,000.

-expenditure.

upon capitaJ and special ac counts out of the ordinary revenues of the country; we have provided 69 per cent of that clas" of expenditure out of the ordin ary revenues.
I venture to say that in no previous period in the history of this Do minion has there been such a large expen· accounts diture on with so small an addition to the public ~ebt.

We years very large loan operations.

For a number of years Canada went but seldom to the English money market, but during the last year or two we have been obliged to go there more frequently.

There ,are several causes for this.


First we have had considerable sums of old loans maturing and these have bad ,to be provided for; second, we had heavy obligations arising on acoount of the construction of the Na.tional Transccmtinen.

taJ.
taJ.

Railway; third, considerable sums were required for the taking over of the Quebec bridge; considerable from the government saving withdrawals bank,,; fifth, we requiTed a oonsiderable sum to be loaned to ·the Montreal Ha.rbour Commission; sixth, we' had to provide con· siderable sums of money in connection with the seed grain distribution, and then we had a very -heavy falling off in our revenue during the past year.
there were fourth, recent Parenthetically I would say tha·t a much respected member the other day in discus sing another subject to which I am not permitted to refer, said that one 01 .f.he first things before you begin to lend money to anyone is to have it to lend.

I am afraid if we had adopted that principle in re· the Montreal Harbour Commis· spect sion my hon.

friend would .not be able to improvements which now 500 greet his eye when he visits his beautiful city.

the great .f.o .

.

, .


- The consequence of all these demands was that we have needed to go to the money market more frequently than usual.

We have borrowed the following sums since the last budget speech: June, 1908, £5,000,000, 31 p.er.

cent, due 1st ' .

October, 1908, £5.000,000, Si per cent, due 1st July, 1950, with option of redemption aftl'r 1st July, 1930, after ,six months' notice.

Mas.

1912.
Mas.

1912.

January, 1909, £6,000,000, 81 per cent, due 1st July, 1919, with option to redeem after 1st July, 19H, on three months' notice.

This last ment-ioned loan of £6,000,000 which was offered at 99!, was the largest colonial loan ever pla~d on the London first only partially market.

taken by the public.

That is not an un usual thing in the London money market, but very soon after it was issued it was readily taken.

It was at 1I-lr.

FOSTER.

What tal,en by the public?


proportion was Tha.t the public, the.

balance.

for Mil'.

FIELDING.

Forty-one per cent was taken by.

the moment remained on the hands ().f the un· loan now stands at a derwriters.

premium of nearJy 31 per cent, so that if the loan was not immediately taken by t-he public it was no- reflection on the credit of the Dominion.

There were special rea· sons for placing this loan at the time and in the way we placed it.

A 3!
A 3!

per cent Joan may now be regarded as our standard security.

Many years ago we issued one at 2i per cent and then one at 3 per cent.

but in the present conditions, and they are like·' I sup Iv to continue for the early future, pose we will have to Tegard the 3~ per ce.ra loan as our standard security.

With.
With.

im· proving conditions we may get back to the 3 per cent rate, but in the meantime we mus~ be content with 3i per cent, and so it was important that we should keep our 31 secur ities on a good basis 'in fl..cmdon.

M'I'.

FOSTER.

Can the minister give the brokerage and commission on the 1909 loan?

Mr.

FIELDING.

that question was ready yesterday but as I was not in the House it was not given.

My hon.
My hon.

friend's question was: The answer to What amounts have been paid for commis sion, brokerage and other expensCfi, respee ti"l'ly, on loans made since December 81, 1908?

4563 the the that financial comphment The answer is: e. d. £ 0 0 90,000 13,790 6 40 13,900 18 11 (lL) Commissiona.. (b) Brokerage.. .• (0) Other expenses..

I hope he may have success finances of England· As I said, a previous issue of 31 per cent.
which ·had been tuken by the underwriters on terms quite satisfactory to the govern ~ent•.

had not.

been fully absorbed by the invesltng public.

Under the conditions it would have been difficult to place another 3!

per cent loan on the market and after full consultation with our agents.

we oon cluded that.
we oon cluded that.

the best way to meet the situ ation was to issue a different class of loan of soecial character which would meet the then existing cond-itions of the market and which would prove attractive to investors.

We thought in that way we would JlQt materially depress the value of our 3i per cents.

We decided therefore to issue this loan at the rate of 3t per cent and to make it a. short loan for a period of ten years with the right to redeem it after five years if we so desired.
Another reason why we fixed that.

period of ten years was that the loan wilI thus fall due at a very con· time, when we wiU not be embar· venient.

rassed by other maturities.

COMMONS === '===== j " '======== - proval he publicly subscribed for one of these modest £10 bonds in order to set a good example to the moderate class in Eng_ land.

and I wish here to thank Mr. Lloyd Geor~e for that evidence of his good will to Canada.

He has been adversely criticised.


he has been told that he had better look after finances of England and leave other people to look after the finances of in Canada.

looking after the I know that in ~he step he took he meant.

to pay a to the Dominion of Canada and I avail myself of this oppor_ it tunity to express my ap.preciation of journals of England Well.

gave this their hearty aoproval and.

the greatest of them all.


the London 'Econom~ ist,' gave us the most cordial commendation the British and expressed the hope that government would follow our example.

I may say also that others than the financial in England commended our publications course in this respect.

We hope and be~ lieve that the experiment will be of value to us.

not because of the amount of money the interest it produced, but because of which it has aroused amongst the smaller investors.
We had no less than 603 appli· cations from persons who subscribed for £90 .

:.r less, so that we had quite a large num· ber of applicants although the total value of their subscriptions was not very great.

We could have got the money just as easily by going to one big broker and inducing him to subscribe to the loan.

but in view in such exnerience of France the of matters interest.

the and which was.

being manifested by thoughtful men in England in this question.
we deemed to make the experiment of trying it well to small means of throughout the United Kingdom in the se· eurities of Canada, and I believe we have succeeded.

gentlemen who the men investors view of interest bonds Hoh.

debt in in in England.

:My idea was national people who sums.


small have devoted attention to the condition of the public debt of France will know thai a large the French part of is the French held by buy very the It Wag suggested that an effort should be made to reach the same class in England and -after careful consideration we came k. the conclusion that we might appeaJ to the It was not small t.hat we expected thereby to get any large sum of mQJley.
as it takes a great many small contributions to cover a loan, and I have '00 doubt that if we had considered our own convenience only we might have the ns well without avpealing to done -small this that investor.

plan had a value apart altogether from the mere getting of T·here are thousands of men of small means in Eng.

land who seldom or never invest in Can.

adian securities, and I thought.


it desirable that we should reach t-hese people, not merely to get money from' them, but to interest them in the affairs of Canada.

I thought that such a thing was most desir _able and therefore.

after very careful con· sideratiOOl, because it was somewhat of a departure from the established practice in the English money market, we decided to issue this new loan in bonds as low as £10 each.
That experiment was watched with a ~reat deal of interest by' the financial puhlic and by the public generally.

The the Exchequer, Mr. British Chancellor of David Lloyd George.

did us the great hon· our and great compliment of approving of the project.

and in order to show his ap- the money.

Mr.

FIELDING.

Mr. FOSTER.

in cost between What is the comparison the two methods?

Mr.

FIELDING.

labour and the printing.


financial agents the It really makes very it is a mere question of little difference; the derical It.

is no doubt somewhat troublesome to the gentlemen who are employed in the office of our but clerical besides work and the printing there is no increased cost.

have occasion to go again on the money market.

we will have these same people and othen interested in our loans•.
and not only inter· ested in our loans bu," interested in any· thing that concerns the welfare of Can ada.

greater volume of that when we in London.

am hopeful I Since the issue of that large loan we have borrowed some other sums which I should state· to the House.

We have made two loans, one of £1,000,000, and one of £500,000.

or a total of £1,500,000; one of these loans APRIL 20, 1909 4566 4565--- for the and other 12 months 15 for months.

They have been negotiated quite ro.


:ccntly ill view of the improving condi tilJll.

'; uf t.he money market and the rate of interest we paid for 21 per is the net rate to the govern that Clout; it covers all bank charges of what· nll'll!

finan t'wr ·nature.

Therefore, our latest cial tr:llj.~adion in the way of short loans is to borrow £1,500,000 at the very low rate of 2k prr cent.

them was "Ir.

:-:L'ROllLE.

If that be so, how do yOIl 1"I';I('h your conclusion that OUf aver· a::e i.~ ;I!

pcr cent?
pcr cent?

Mr.

FIELDING.

Because.

these were short loalls, for one year in one case and for tWeen months in Ute other case, and it imposible to cotllpare them with i,; quite a long term loan.

Excluding temporary loans which are soon repaid, we have issued from 18£16 up to date loans to the amount of sum of to note that ,money.

But it is important for present 3. large part thereof was not old C'-[leratiolls but loans maturing.
I have here a statement of the loans which have matured and which we hnye paid off since 18%; they are as fol· lows: the repayment of £27,470,242, enormous for an LOANS :\[ATURED AND PAID OFF SIKCE 1800.

Tht: ft:llowin~ Luans hlwe been paid off Bince 18% ;- ==--=-==--- --- Amount.

Date.

- - - - - - - - - - - - - - - - - - - - .

Intercolonial Hailway Guaranteed Loan 4 p.c.

4 p.c.

4 ]J.c. 6 p.c.

4 p.c.

4 p.c. "

" " " Rupcrtll Lanrl Guaranteed.


Loan IlIt..rL'Olonial Hail way U nguarantet:d. Loau of 1K'j5 IS7G .

.

.

£ 1....100,000 1,000,000 300 000 50..,'000 1,000:000 2,5(Kl,OOO October 1, 1903.

April 1, 1908.

April 1, 100-1.

Octoutlr I, IH03.

XO\'ember I, 1905.

NO\'ember I, 1900.

4 p.c.

4 p.c.

1874 (part) .

1878-79 ... , ......•..... _•. "


We have had some sinking funds against these ami the balance we have had to pro· vi:lp.. Thesc loans which we have paid off account to a very considerable extent for the· lar;:e borrowings we have had to make.

Up to 1885. with the exception of one loan, Wf hall provided small sinking funds rang· inh fl'om one·quarter per cent to one per in connection with our various loans.
cent In later years, from J885 onward, the sink· ing fund policy was abandoned as it did not seem to be necessary.

My own observation leads me to oi the London money market the conclusion that it would be 3. wise pol icy fOr 115 to return in some degree to the sinking fund policy, nnd it is my intention in any furthC'r 10fll1s ] may have to issue to attach a Illotlernte sinking fund to them.

£ 7,300,000 1,595,256 lb.

6<1.

l\1ay 1, 1!

)()·t l\lay 1, 1007.

NovemUer 1.

1008.

4,500,000 £13,3!.15,25G lb.


6<1.

As to the precise rate we may attach it is a. matter of detail, nnd i-t is not necessary at present to make a statement, but I think it well to return to our former policy of having srme sinking fund attached t-o each of our loans.

earlier ]n connection with the budget speeches of some years ago a return was published giving- the cost of all loans for many years.
This year a supplementary return was brought down, and I think as a llIutter of convenience it would be well to have it included in the budget speech, and if there is no objection I will hand it to 'Hansard.'

then be in the posses sion of the House and it will be more easily referred to in the budget speech than if it i,; only 10 he found in the form of a return: It will 4567 COMMONS 4568 MEMORANDUM OF CANADIAN LOANS PLACED ~ ~ 3.

Price .=2 Realized.

~A.!

~ ~ o~ = :~ ~ ~~ ~ ~ ~ ~ S ~ Total Ts~lle.


Discount or Premium.

- - - - - - - _ .

- - - - - - - - - - - - - - - - £ 8.1:1. s. d. d. s. £ £ anteed.

Interrolonial Railway, 18Gfl, suar'f lntel"toolonial R.'\ilway, 1869, un· ) Inttrevlonial Railway.

1873, gnar,} gtl~r:mtt'ed.

anU>e<1.

. )

" .. ... Rupert'll Land, guarant~ Loan or 1874.

Loan of 1875, guaranteed Looll of ISi5, ungml.r:mtE'ed Loan of 1876.. .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.


Loan of 1878, gl.larontet'd } Loan of 1878, unguaranteed Loan of 1079.. .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.. Loan of lR84 .

, Loan of 1885. .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

Canada.

~edueed .

.

.

.

.

.

• .

.

• .

.

.

.

.

.

.

.

.

Loan of 1888........ .

.

.

.. .

.

.

.

.

.. Loan of 1892.. Loan of 1894. .

.

.

.

.

.. Loan of 1897-.................. 4 p.e.

Loan of 1008-12 8~ p.e.


Loan of HI30-50 (February ,.

.

.

.

.

.... 105 12 1l~ 104 7 8 { 90 3 3 99 1 8 { 0 0 01 OO119{ O:J 1 10~ 2 2 91 1 8 101 .

.... .

.

.

.
.. 95 1 0 92 0 10~ 97 9 2 91 10 5 100 0 0 100 0 0 31 30 35 30 30 35 30 29 '25 '25 ~~ 46 43 50• 22j; or 42j 4 2201' 42 00 .... !ll 9G1 95 91 99 ~2~ 91 ~5 91 loe 100 100 100 , 1,500,000 0 01 1,500,000 0 01 500,000 0 0) 300,000 0 0) 4,000,000 0 0 1,500,000 0 o'} 1,000,000 0 0 2,500,000 0 0 1,700,000 0 O} P. 112,046 0 0 P. 78,971 6 8 D. 393,476 17 6 D. 22,930 9 1 D. 225,000 0 0 D. 102,347 12 6 D. 141,206 6 " D. 445,870 0 0 P. 43,416 0 0 D. 54,576 2 9 D. 197 ,904 0 0 D. 119,OO'J 16 0 D. 51,145 6 9 D. 160,625 5 0 5,000.1JOO 0 0 5,000,000 0 0 .................. 4 4 4 4 " 4 4 " 4 3~ 4 4 3 3 3 2; 4 3; ',j 3j p.c.
3 I..oan of L908......... ... p.e.

Loan of 1930-50 (October 100 0 0 100 0 0 issue).

iSlluc).

Loona cxtencUd.

4 p.e.

Loan of 1874 (due May I, 19(4) 4 p.c.

Loan of 1874 (due May 1, 1907) .

3 4 4 4 2,500,000 0 0 I,S:U,398 1 5 .. Or 50 years calculnted for 25 yt'arll only.

a Does not include the bon\ls of stock for conversion into 3 p.c., 1938. b This amount incl\ldes £11.943 2 6, being balance of Comm\ltation of Stamp Duty (at rote of 12s.

6d.
6d.

e This amount includes £2,473 2 6. being balance of C08t of Stamp Duty yet payable (at rnte of 28.

6<1.

(l This amount includes £9,374 1 6, being balance of Commut,ation of Stamp Duty (at rate of 1~.

6<1.

FIN,\Nc& DEPARTlIEN'f, April W, 1909.

Mr.

FIELDING.

.

!

.

AmNwt RI:':\lizl'{l.: !CIHI"?

"'~' illclilflingl I D)fOC"UlLt f ,r illlm ....liate pay·: mellt and 1tltl'l"'st (lll part \,fl.Yllwllts,.

!

APRIL 20. lDOO 4570 :\.. t Amount of Cash rt:'ulizeU.
I I ()(lnvt-rsiun of Stock al1(l Bonus uf maturing Loans.

Total Amount rl'alizrtl.

Annual t'_lf,-ctive Rate uf IlItcr£·~t !

pel' Unit.

I £·-s~I--;-~~~i-~-s~-~-~~I--;--:--:T---- I ; !

I 2,1l~,fHG 0 01 i 'j :tl,44!

'J 18 11 91 1,::>,1'.971 G 81 !

til :l,Gof"ma ?

2,~ji,OO!l 10 11 ~,275,OOO 0 (I 2,::>97,(;;;2 7 G 00,239!)

42,S4, IG 1 .

Gj,122 !)


36,~52 15 'i f ~: 2,M2,/!l313 8 -{"USS 8 41 4':I~H, laO () 0 !l4,li(13 :i 4,04:1,416 0 0 82,(l!JS 2 1: G,;iSH/J(i() 0 0g31 32,977 0: r,7.3!~" 4 3i 3,802,lY.Ki 0 2,OjO,!lOO .. 7: 31,3H;> II 41 2, 1!I:l,S54 l;l 24,R07 0 21 I,S30,3i4 15 (I 22,3-17 17 (I 2U,4i3 n 2, 1,500,000 0 0 3,000,000 0 0 b 74,6G5 15 )1 5,()l>O,OOO 0 0 a:mcf ... S2,fl23 9 21 rli?O,236 17 JO!

5,000,000 0 0 I I 2,08.


'l,04D 1 I" 1,&15,521 7 11 3,:',4/J,233 12 9 2,434,221 14 10 2,217,877 10 b 2,8GO,7!J<J 11 11 2,804,&15 5 5 4,4::'9,436 16 8 3,\161,317 17 11 0,355,583 19 C. 3,73-1,244 1 6 2,U:m,/J24 11 5 2,HiS,1l47 13 0 1,808,026 17 10 1,4iO,526 8 10 1,801,:)34 4 11 I I .

.

.

.

.

.

I .

.

.

.

• .

• .

.

i .,, .......••• 1.:..: ·............... .I· .

..

..I..............

.... .

·............ .

.

, .. .

.

.

.. , ':::::::::::::::1:.:.::.:.


:::::::: ·.................I...............

.. .... i. .

· .

.

.

.

.

.

.

.

.

.

.. 2,923,334 -lIt 1,123,800 0 0 • • J • • • • • • • •• • • • • • • • • 3,489,734 4,3:>9,313 6 3 • 8 1,427,342 4 i 400,449 l/J G 4,917,076 10 10 4,879,763 2 2 ~,r,oo,ooo 1,8:11,3'J8 o 0 1 5 ff· 33,193 15 2: f~ 2G,Sln IV 4!, 2,4(j6,806 1,8U4,fI78 4 10 2 1 p.e.

), )·~t p:~yahle on ius<;rij ,tion 'of stock certificates.

p.c.

), on .1::;),000,000 3~ p.c.

de\l(·ntun:s.


p.c.

), yet payable on Illscriptivn of stock certificates.

'0·4125 '04875 'IH Hi '0475 '043 '04:, '04042 '04f) ·...083 '0321 '0341 'O:Hl .

tJ2tl8 'OHOO .

'03704 .W:,:)() '04-152 4571 COMMONS last large expense.

in the charges of transllctions during the I have noticed some criticism as to the cost of our loans, hut I am glad to be able to say that there is no ground for the charge that the expenses in connection with our loans are very high.
Of course we have had very large transactions.

and we have had to pay on very large sums.

We have hand led enormous sums of money in our fin few anieul years and you cannot carryon these enor mous operations without I am glad to be able to say that in every instance.

so far as I am able to ascertain, the expenses are fair and reasonable.

We are now paying the same charges generally as we paid in former years.
Our financial agents in London (The Bank of Montreal) charge precisely the same rates now that they have been charging for a long time, and we have no reason to doubt that they are fair and reasonable.

There is only One item that is new.

only one item which did not appear former times, and that is the charge for under writing'.

We have sometimes paid three quarters per cent for that, and sometimes when the money conditions were not Sil favourable we have had to pay one per cent.
and one per cent is about the best rate that first-class loans will be underwritten for in Lendon.

This underwriting is simply an assurance that the money will be provided.

The underwriters are the very best judgp.8 of the character of • loan; they are better judges in a certain way than the public themselves, and experience has shown that the public are it sometimes happens that not ready to take up a loan.
Then, the underwriter who is an experienced financial man and who wei~hs every element in the money market i9 able to come to an under stnnd'inll of what is the fair value of a loan, and if the Minister of Finance is satisfied with the price at which the underwriter is wiIlin~ to do the business then the transac tion is closed and the Minister of Finance knows at all events that he is going to get the money; he need not care very much whether the public come in and subscribe In some respects it is always better at not.
to have the public subscribe.

but if the pub lic should subscribe too readily, if the pub lic should come in and rush after the Joan and to it many times over, the Minister of Finance would be open to the charge that he had made a mis- that he had fixed the price of his loan at too Iowa fig'ure, or in other words tt-at he was sellinA' his goods too cheaply.

In the case of our loan recently issued oniy 41 per cent was tak-en by the public, which was the under writers gave us the full value of the money.
n we had not agreed to the underwriting of the loan, we would have been obliged to have named a lower price for So I am satisfied that the modern system of underwriting,\ while we may regret that we the best guarantee that subscribe it.

.

tnke, Mr.

FIELDING.

;I that loan and, the its that the underwriting.

precisely the It has become therefore.

is government Han.

loan.

have to tesort to it, ·has the advantagl!

of secwing to the government the bes1- possibie price for our loans.
No coloniat govern ment now borrows money in London with I think I am correct in out underwritine.

saying that no foreign government now borrows money in London without under writing.

the established practice of the money market.

The imper ial government, in dealing with the last In loan.

which is practically dia government an imperial government loan, and which was placed on the market very shortly after our £6.000,000 loan, had to adopt the policy understand.
of same paid for that of Canada price for paid gentlemen in this under see, will writing, which only new item.

we are siRlply following the established the money market.

which all practice of including the imperial other governments.

in the case of the last India government loan, have had to adopt, and I think it may to conform to be assumed that we do well this practice, that the ,rate paid for OiJr loan was p.recisely the same the recent India govern· as that paid for loun.
The effect of underwriting is ment that the public know that they have this, a second chance to buy.

If it is thought the loan is not much in demand, an in investor, even though he wants a dividual large sum, will say to himself: 'I will not send in a subscription, and the loan will be left on the hands of the underwriters; to a discount, and I can then it will fall Sometimes come in and ,buy more cheaply: that -happens, but it did not happen with us.
The public did not tah all of our loan lit once, but immediately after it was an· nounced that 41 per cent of the loan had investors be· been taken up by the public, gan to run after the balance in the hands of thnt the underwriters, with the result according to the latest quotations it stands at a premium of 31 per cent in the money market.

in view of the fact that is.


I should cnll the attention of the House to some early maturing loans, the loan~ we shall have to deal with during the three calendar years 1909, 1910 and 1911.

The £5,000,000 31 per cent loan of 1884 gives the option to the government of redeeming it between the lst of June, 1909, and the 1st of June, 1934, on giving six months' notice.

We could.
We could.

take up that therefore, if we so desired, dwing this year, loan, Lut under present conditions it is of ad vantuge to Canada to carry this -on at the for we have no reason.

to present supp08e thnt we could do better than 31 per cent, and no notice of redemption has been given.

On the 1st of January next the Canada Reduced 4 per cent loan of this loan there is £6,443,136 matures.

Of rate, 4573 APRIL 20, 1909 4574 held in the sinking fund £2,205,573, leaving £4,237,563 to be paid off in cash.
The 4 per cent loan of 1885, for £4,000,000, is re deemable at any time between 'January, 1910, and 1935 on six months' notice by the government.

We are not called upon to touch that matter for the present; we will consider it later on.

On the 1st of October, 1910, the 4 per cent guaranteed loan of 1875 for £1,500,000 matures, and for that we have a sinking the amount.

On the 1st of May, 1911, we have a 4 per cent loan of 1874, amounting to £1,831,398, maturing.
These are the loans which we have to provide for within the three years, besides _which we have, next of course, to provide for what may be re quired for the possible needs of our wprk, notably the Transcontinental Railway.

one-half about fund of for instance, th",n thl'!

I regret·to notice that some very erro-n ous statements have been made from time to time, both in this House and outside, mllrle no doubt with the best intentions, with regard to the credit of the Dominion.
Although I am a strong party man myself, I do not believe that there is any man in tihs House on either side who desires to depreciate Canada's credit.

I am sure that any erroneous statements which have been made have been the result of err~:meous in formation, and not of any intention to state facts.
We have heard it other stated, that because we bor rowed money for 2i per cent or thereabouts in 1897, on long term loans, and because therefore the we recently paid 4 per cent, credit of the Dominion is going down.

There is no warrant for any such statement.

In the first place, in making any compari 60n of this kind, it is necessary to observe the distinction between the different classes of loans.
A long-term loan on the money market should elicit FOT a short-term treasury note, you may some times get money cheaply, iust as in New YOTk money is occasionally· borrowed at 11 very low rate on· call.
But the pur poses of the ordinary investor, in a favour able condition of the market, a long-time security, such as a fifty-year is the loan secmity most was for ten yeaTS, with the option of five years, while the loan of 1897 was for fifty years, and was issued in a most favourable condition of the money market.
Another consideration which we have always to keep in mind is that money is a commodity which rises and falls in value like any other com modity, and the man who wants to buy it goes into the market and pays the market price.

To say that because we borrowed money in 1897 at 2i per cent and that we now have to pay 4 per cent, therefore our credit is an entire mistake.

In 1897 monetary conditions were exceed· ingly favourable, and we were able to place a 2~ per cent loan at a remarkably good favoured.
Our recent is suffering, the best terms.

loan, for The British investor price.

We seemed to have struck the psychological moment, and obtained the most favourable t-errns ever obtained for tl colonial loan.

We have never been able to do it again.

Of late years there has been a change in the appetite of the English investor.
There was a time when he wanted a gilt-edged security, such as British consols or a Canadian government security, and to get this he was willing to pay a high price and was content with a low rate of interest.

is becoming some what more wide-awake.

He is beginning to be willing to take a little risk by put ting his money into foreign loans; and at the very moment when we were trying to borrow at 3i per cent, a Russian loan was offered- at 4; per, cent, and sold at a price under 90.
A great many British in vestors, who at one time would not touch these foreign loans at all, are now disposed to invest is a lesser in them.

The result demand for gilt-edged securities, and it becomes a little more difficult to float se curities of that character at the best prices.

Take, for instance, the drop in British con sols, the very highest standard of securi ties in the world.

In 1897 these bore in terest at 2i per cent and were quoted at 113t.
The rate has since been reduced from 2i per cent to 2i per cent, which would ac count for some of the reduction in the quo tations but not for all of I have the latest quotation, and find it is 85 1-16, and not long ago British consols sold as low as It would not be reasonable to infer that 80. because the price of consols has dropped and the British government have practically to pay a higher rate for money, .the credit of that government has suffered.

The drop in price does not mean that.


It simply means that money is a commodity which rises and falls, and the British, the Cana dian, and every other government must be content to pay the market price.

Let me give you another comparison.

One of the best classes of investment in England is what is known 8B the Metropolitan Stocks the stocks issued by the London ,County Council, a very high class securityf pr$ bably next to that of the British government In 1896 the Metropolitan· 3* per itself.
cents were quoted at 128t being·: their highest point, and Canadian 3ls were quo ted at 111i.

The two classes bear the same rate of interest, yet there was a difference against Canada in 1896 of 16t.

Coming to 1908, Metropolitan 3is were quoted.

at 1041 and Canadian 3i's at IOU, being a differ ence against Canadian of 21.

The best way to gauge the credit of Canada is to take some com pare standard stock was.
quoted in former years with that at which Canadians sold in· the same time, other the rates at which that standard stock, and it.

4575 GOMMONS 4576 and then take the difference in quotatiom between the same two stocks at present.

Taking the Metropolitan stocks as a good example, we find that in 1896 they stood 16i above Canaqian and in 1008 only 2i points.

My han.
My han.

friends will therefore see that the mere fact that we had been paying a somewhat higher rate for our money does indicate any diminution of Canadian not credit.

, Mr. AMES.

Has the hon.

gentleman the figures with reference to our 3 per cents?

Mr.

FIELDING.

I have not, but I have no doubt that.

comparin~ our 3 per cents with the l\fetroPolitan 3 ,per cents the re I had these quota· sult will be the snme.

If the others hons made in all good faith.


show something different, I shall be happy at a later date to call attention to them, but I am advised that they will show sub.

stantially the same results.

Of the net this net As to the burden of debt, Our net debt on the 31st March, 1908, was I have stated that the in $277,000,859.84.

crease in 1009 would be $46,000,000.

Our net debt, on the 31st March, 1909, takin~ our estimates as near as we can make them, will be in the neighbourhood of $323,!l60.859.
84.

Our net increase since 30th June, 1896, amounts to $65,463,427.07, and the average increase per year in 12i years amounts to the increase $5,134.386.43.

National Transcontinental Railway is re sponsible for $52,574.131.71.

Excluding that amount, increase of debt during the 12i years would be $12.889.295.36, or an So that nverage per year of $1,010,925.12.

it will be.
it will be.

seen, apart from the National Transcontinental, which is a special item, our additions to the public debt during the whole period have not being excessive.

to which an occasional reference is made, in a country like Canada it is to be expected that from time to time there will be some additions It cannot be expected to the public debt.

the development of a new country that like on without (mrs our public debt.

On allY additions had of number a the statements the public debt.

showing .
showing .

reductions of to point out that I was always careful exceptional, and the that we must to from year to the public debt.

year some additions the public debt But if we are to consider take into account as a burden, we must bearers.

We the do year, but our census office makes estimates from year to year, which I believe are in the main substantially correct.
Take the re turns oJ the last official census, making allowance for what experience has shown circumstances were expect ocasions, when submitting number not pleasure carried burden census every take can be to of of a I Mr.

FIELDING.

I the first think it will be admitted that increase of population, to be the natural taking careful account of the immigrants coming into the country.

we obtain fairly statements of our popula.

correct annual tion.


I have had such a statement pre pared, and am glad to be able to SIlY that, for time in our history, we are able to claim a population of more than I submit here a statement 7,000.000 souls.

showing the debt of Canada for every year since 1891 and also its population, the net debt each year.

and the net debt per cap ita.

if you are to measure the burden of the debt.

the number of burden you must consider find find?

We bearers.
We bearers.

What net in that the 1800, head of Canada was debt 31st population, of March just passed, according to the returns of the Cen'sus Department-which we have every reason to believe are substantially correct-on a population of 7,085.219 the net debt of Canada amounts to $45.72 per capita against $50.82, 13 years ago.
So that we have the very gratifying fact, havini<: regard to the number of burden bearers, that the net debt of Canada to-day is not an increasing burden but is less of a burden than it was when this government came into power 13 years ago.

do we 13 $50.82 on per the years ago, and our I submit the figures for each year: Net debt per capita.

Population.

Net debt.

Year.

·1S9t.

.

1892.. 1~93.. tR94.. lIi95.. 1600.. IF97.. -1S98.. tb09.. 1[100.. 1901..

HIM.. 1903.. 190-i.. ~905.. 1906..

1!.'107..


1908.. 1909.. Net debt pe, capita.

$237,809,030 51 49 ·09 2U,131.434 4" 49 ·15 241,681,039 61 48·96 z.«l,lS3,029 48 49 ·'0 asS.074.927 <J9 50 ·57 258.497,-13277 SO'82 261.538,596 46 50 ·87 263.956,398 91 so·n 2GG,27S.4'16 6a 50 ·62 005,-193,806 89 49-88 268,-180,003 69 49 ·59 49 ·08 ·271,829,089 62 261,606.988 87 45 :79 260.867,iI860 44,:29 266,224..166 60 48 :70 267,042,97.7 75 42'23.
263,6111,859 96 39 '61 217,960.859 ~ 40 ·49 -323,,960,859 ~ 45·72 .. 4,844,366 .. 4.889,266 .. 4,93S,748 .• 4,983,903 .. 5,008,839 .. 6,086,061 .. 5,14'1,508 5,199,267 5,259,491 .

... 5.322.3-18 •.

5.+13,370 .. 5,537.500 .. 6,712,190 .. 5,890,066 •• 6,<J91,.J36 •• 6,323.557 .. 6,655,91)4, .. 6.863,500 .. 7,085,219 • Estimated.

There is another view of the matter.

My hon.


friend from North Toronto (Mr. Fos ter), in one of ~is speeches on .the .budget, said that one of the wa.ys of ]udgmg tho) burden of the debt WIlS to take the amount of interest which had to be.

paid.

That is that a. you must consider the number of burden bearers.

In 1896, the total amount of inter· ~st on the public debt was $10.502,429.90, fair statement, with this proviso.
4577 APRIL 20, 1909 4578 and the amQunt received 8S interest on investments was $1,370.000.56, leaving a net amount of $9,132,439.34, or $1.79 per capita.

The net interest we bad to pay in 1896 on the debt of Canada, therefore, was $1.79 per head.

Taking the sa-me computation the year ending 31st March last.

we fOf find that the interest on the public debt will be close to $11,636.550.87.

The interest received on investments was $2,168,601.04, interest paid for the year.

making the.
making the.

net when the accounts are finally closed.

an proximately $9,467,949.83, or $1.33 per bead for the year, 8S· compared with $1.79 per head for the year 1896.

I think.

Sir, that these figures, in which '!ie take into account not only the incress· tng amount of debt but the increase in the number of burden-bearers-and I am sure that every hon.

member will admit that that is a fair method of calculation-show that, in the development of our country, while.
we have been obliged to add considerably to the public debt, these additions have not kept pace with the growth of our population, but that our interest charRes are materially less of a burden to-day than they were thir teen years ago.

There has been some discussion here and elsewhere with regard to our statement of assets.

There are some assets appearing in our accounts that are not of much value scme practrcally of no value at all.
No such asset has been added to the list in recent yr:srs; such assets of that kind as appear have been there a long time; it has been thought well not to make changes, but, as to allow them to a matter of convenience, r(main.

Once in a long period of years the statement is revised by the Committee on I am glad to know that Public Accounts.

that is being done this year, and that a number of these items will be thrown out.
But I am satisfied that the amount of the items thus thrown outr-items placed there many years ago, before I had anything to do with the finances--":wilJ not be large, in fact that it will be very small indeed when ccmpared with the total amount of our -as sets.

I am very glad to agree in the view that that statement should be revised and tho.t we should have a statement down to date.

I desire to confirm a statement that I made earlier in the session with regard to the savings bank accounts.
I was asked whether we intended to increase the rate of interest paid on these accounts.

My answer was thnt such was not our intention, that tl.il' was practically money on call.

and it was not to be expected that the same rate would be paid upon it as upon an ordinary investment.

Dut I stated also that I would the transfer of any bfl ~lad to provide for 0: these deposits into stock of a more per nlanent character.
If it be agreeable to any of the savings bank de 'pc"sitors, we shall be glad to issue new I repeat that now.

stock for amounts of $SO or upwards to bear 3~ per cent and redeemable in 1925.

There !Lre, if it be found that any of the deposi tors in the savings banks wish to take up a more permanent investment, they can have tlJeir deposits transferred into savings bank stock at the rate I have named.

Mr. J. D. REID.

At par?

Mr.

FIELDING.

Yes.


Frankly, I do not expect that there will be a large demand for this stock; I think the savings bank deposi tors 'attach more importance to the con ve.nience -and security' of the savings "1:ianks than to the rate of interest.

Mr. NESBITT.

Would the minister say is to be paid-yearly or how that interest half-yearly?

I Mr.

FIELDING.

Half-yearly.


We do not propose any extensive changes in the tariff; the one or two changes to which I wish to call attention are rather in the way of regu letion than in the way of changes which would affect the country.

the finances of For some years, considerable attention has b~en given to the cultivation' of the beet in Canada with a view to the production from it of refined sugar.
think there is no longer any question that we can produce in Canada beet-root of the quality suitable for that industry-I think it has been estab lished that the 'beets grown in Canada are well suited for the manufacture of sugar.

The question has come, whether with the en couragement usually given to other indus tries in Canada.

we can make that industry permanently successful from an ecoDomical point of view.
The advocates of the in dustry say th"at this can be done, but they have asked that special aid be given ~hem in the initial stages of their enterprise.

So, for several years, we granted them conces· sions in the way of free admissioD of rna· chinery.

Several years ago we granted an· other concession in the way of importation of foreign sugar on the same terms 8S prefo.

I.n erential augar other countries, the beet industry is so car ried on that they produce not only refined sugar, as is done in Canada.
but also an intermediate grade known o.s raw sugar, which can be kept in store, handled and shipped, as it is being shipped, to all parts 01 the world.

We have not yet reached that stage in Canada; we carry the manufac itself quickly into ture from the beet-root the refined article.

And I is suppose it admitted that at Wallaceburg they are turn in,lt out a fine grade of sugar as a result of this enables them to that operation.

But time.
But time.

run their "In order fac tory for a longer term, and so run it more they ask to be perm!~ted to e(;onomically, import foreign sugar at the preferentIal rate.

It is not convement for them to use the West India sugar, and they thought it a factory ()nly for a short that they may run their from the West Indies.

4579 COMMONS 4580 hardship.

when they imported a foreign sugar, to be obliged to pay the higher fate.
So, two years ago, we l:l.lZfeed to allow them for three years the privilege of bringing in fo':'eign su.

'!ar at the same rate as if it were British grown sugar.

The limitation was that they should be allowed t.o import two tons of ·foreign sugar for every ton of re· fined sugar they produced from Canadian beet.

That concession remains in our tar iff, but it expires at the end of the current year.

The promoters of the industry.

not op..ly the refiners.


but a large connection in· eluding farmers, dealers and others.

who industry, have are interested in the beet naked us to make a further concession in the same direction.

We have decided to allow a continuance of the present system for three years longer and then for two fur ther years on a reduced scale.
That is, for three years they will be allowed to import as at present, two tons of foreign sugar for every ton of refined sugar they produce in their factories from Canadian beets.

and for two years thereafter they will be allowed to import one ton of foreign sugar for every ton ,of refin~d sugar they produce from Can adian beets.

Mr. HUGHES.

The minister means two tons of foreign raw sugar?

Surely.

Mr.

FIELDING.

I\lr.

HUGHES.

Raw beet sugar?

Mr.

FIELDING.


They pr,",fer limit the raw beet su,!?;ar.

but we could not to it that.

So much with regard to the beet in dustry.

which.

as I have said, enlists the int·erest and sympathy of a large number of people, and to which we have every de sire to give a helping hand in these ways at the beginning.

We trust in a short time it will be able to be conducted without these special aids.
and, that with the mea sure of protection given to other branches (Ii industry in Canada.

it will be permanent ly and profitably established.

that import Another p-hase of the sugar question.

has given us some perplexity.

The dutiea on British-grown raw sugar are based on the assumption that the Canadian reti,ner-I .speak now not of the beet sugar refiner, but of those who refine sugar in aN forms, the eastern refiners And those on the Pacifi,c raw sugar under their coast-will the preferential tariff.
paying only the pref erential rates.

and the duty on the British refined sugar is adjusted accordingly, so that refineries may have what is deemed a ('Iur moderate The refiners have represented to us that they cannot get a sufficient quantity of British sugar to en able them to import it under the preferen tial themselves of what seemed to be the int.ention of the tariff in that.

respect.

They say there are two dU fic:ulties in the way.

In the first place.
In the first place.

they are not able at times to obtain a suf· tariff, nnd to avail rate of protection.

Mr.

FIELDING.

say that there ficient quantity of West Indian sugar-and when we say British-grown sugar it pro perly mean·s West India sugar, because that is the only near market-they say they are not able at times to obtain a sufficient· quantity of that British~grown sugar of a proper grade and quality for their purposes.

Now they make a more serious complaint.

combination is a.
combination is a.

They the West Indian planters, among amongst the growers of sugar in the West Indies, through their agenLs and brokers in London.

whereby the Canadian refiner is not permit.

teJ to buy that West Indian sugar upon the snme terms as it is purchased by the British refiner.

This question of who shan profit by the preference has b'*!n much de bated.

At one time the West India mer.

chants complained that the refiners in Can· ada managed to take the whole preference to themselves.
Now the accusation is the other way.

Our Canadian refiners say that it will this combination so manages that only sell West India sugar at a price which makes the thing of rea.lly no more advan tage to, them than if they were to buy the foreigin sugar and pay the higher duty.

Of course.

no matter what they pay for West Indian sugar, they would only pay a lower rate of duty.

But it is claimed that though they do not pay any more duty they are obliged to pay a higher price.
They say that the growers in the West In in Lon dies, don.

ascertain just at whtLf.

price sugar can find admission into the Canadian.

market, and they only sell at that price.

with the neb result that while the British refiner who competes with the Canadian refiner in the finished product, practically buys in a free market.

the Canadian refiner is only allowed to buy on terms which oblige him to pay in addition to the price of the sugar.

the amount of the preferential duty.


through a broker and agent Mr. HAGGART.

that by any inquiry?

Have you confirmed Mr.

FIELDING.

We have not had any to hear both official inquiry, and it is well sides of the story.

I am bound to say that the refiners, who are generally of excellent standing.

and who I am sure mean to act in good faith, have made a strong impres sion upon my mind in their presentation of the case.
However, we have come to the conclusion to suggest a r",rnedy which can do no great harm to West India men, and which will meet the difficulty, if a difficulty exists.

will meet it at all events in a m.od erate degree.

We propos~ to allow the re finers, other than those engaged in the beet industry-we have already dealt with them -we propose to allow the refiners the priv ilege of importing foreign 8ugar at the pref.

erential to the extent, however.


of only one-fifth of t·he quan~lty of the refined sugar which they produce.

rate, 4581 APRIL 20.

1909 An hon.

MEMBER.

Mr.

FIELDING.

All Is that raw 8ugar?

this hae reference to raw sugar.

The effect of \hat would be If there exists the combination which t.his: then the refiner will have ac· is alleged, cess to the foreign marke, at the same rate to the ut.ent.

of a moderate quantjty.

I think the effect of it will be that probably if that combine exists.
it will not continue: When we tldonted the West India prefer ence we certainly felt.

that.

by 'lowering the duties.

on the products of any otber cOun try we were doing a friendly act.

and en couraging trade with that.

country.

But all good trade must profit both the seller and the buyer.

It certainly W808 not con· templated that either the one <IT the other should use this pxeference 8S an instru is n. ment of oppression.

However, matter which· demands carefuJ.

inquiry.


If 've"e to allow the introduction of a very "''' large amount of foreign sugar at the pref· erential rate, we should probably strike down the preference, Bnd that we dG not wish tel do.

But we think.

to the extent of this moderate quantity, we will be as sisting the refiner, and we will be giving at intimation to the West India grower that he must be preDared to give and take.

and not uee the preference as a means of treating our Can.
than adian refiner in any other he would.

COl1fltrv.

the same time a general in a different manner the refiner treat that but which We have been asked to join a commis inquiry to be appointed by the sion of British government for the purpose of in.

quiring into the trade relatiGns between Canada and the West Indies.

and we have The matter intimated our concurrence.

It.

may has b.!en discussed for some time.

be remembered that a year or two ago a conference was held in the hland of Bar bados.
a conference which was originally designed to be merdy an intercolonial con.

ference.

later on opened its doors to Canada.

We sent down two gen· late Deputy Min· ~leman.

Mr. Parmelee.

lster of Trade aod Commerce, and AIr.

./I.. E. Jones.

of Halifax.

an experienced West India merchant.

who attended th~ con ference, and .lome progress was made in the direction of better trade relations.

Thf!

following that move colony of Ba.rbados, ment.


adopl~d a preferential tariff where by Canada would receive a preference on a number of articles provided that Canada in return" would give.

not only the existing preference.

but som~ further preference.

We fea that it was difficult.

to deal with one island alone.

and therefore we did not respond to the proposals of the government of B·a.rbados.
But we have intimated to the Imperial authorities, who are respon· sible for the management of these Crown colonies, that if they desire to 10 into the question more fully, w~ are prepared to join in a general inquiry into the trade re lations between Canada and the West In dies.

Now if that commia.sion be appoint.

ed.

Canada will be represented on it.

At t.he present moment I am not quite sure although some communication has takeq pla~as to who should represent Canada.
A; aU event:!, Canada will be represenkd on the commission, and we should have a careful inqni.ry.

This question of combine ,be taken up.

and if it be established w;i]j( that such a' combine ~:rlsts, we hope and 'believe that our frienda in the West.

in dies will realize that that is not the pro per 'response to the efforts we have made to enoourage trade with that country.

We certainly did seek to encourage trade with the West Indies.
we certainly did feel that to West India in giving a bet~r market sugar we wer~ giving.

in a modest way, some helping hand to the West Indies peo ple; but we certainly did think at the same time that our own consumers would profit by the low~r rates of duty that were to be established.

So as a temporary mean-3 of dealing with this matter.

and pending that fUl"ther inquiry to which I have referred, wE1 propose to permit eastern refin~rs, all those engaged in th~ "th·e.

beet root industry.
beet root industry.

to import at the prefer ential rate foreign raw sugar to the ~ten' of one-fifth in weigM of the quantity of refined.

~ugar whieh they produce in tb.~ir factories.

Our upectation is that they will the difficulty of the to some extent meet inquiry moment.

pending that which 'We hope will take place dUl"ing the year.

refiners except further Mr. AMES.

Is it proposed to apply the remedy before the inquiry or after?

app~y I Mr.

FIELDING.


We think the evidence is sufficient to justify us in going this far; and if the inquiry thoroughly satisfies u. a m~ra we will probably have.

to thmk the 10 drastic r~medy than thIS.

to justify formation we have is sufficient in granting this measure of relief "00 us refiner3 here.

But we do not propose to grant it to them for any fixed period; it is to be granted ind~finitely.

with a distinct understanding that parlill.ment gives them no vested right in it, and that we may.
after the inquiry.

withdraw it at any mo ment.

Mr. AMES.

By vote of parliameni?

Mr.

FIELDING.

Only by vote of par it be made itself, and not be d~ liament.

We think definite in the tari1f pendent upon mere order in council.

should I have said that we do .not propose any In aaying this, it ia other tariff changes.

not necessary to contend that our tariff is perf~t.
I do not suppose that we should ever have a tariff in Canada that will not leave room for much debate, instrument 4583 COMMONS 4584 and we shall never have a tariff with re· spect to which borne person will not feel that.

it is not working well.

it that.

concur But we remember is only two tariff was revised and we years since our tariff stability is think that the idea of the worth something to the business of the business men counlry.

We thought.
We thought.

of than the particular the country, other ones who would like particular changes, will readily tariff changes should not be made very frequent,.

ly, and that it is even better at times for us to bear some little disadvantage that might seem to arise than to be constanUy making these changes.

Therefore except for these items with respect to sugar, which do not in any way affect the rate of taxa· ti<lD, which do not touch the revenue at all, we have no tariff changes to propose.
in the view that the For almost budget.

the long period of 13 years it has been my good fortune to present to the par.

Hament of Canada that annual statement of financial affairs which we commonly OUI every In call one of these speeches I have been able to present to the House a story of expansion of trade, of growing revenues.

of satisfac tory business, of increased population and of all the things that make for the progress and prosperity of our coumry.
During the past year the conditions have been some what less favourable.

The monetary string ency, almost world-wide in it6 character.

which began in the autumn of 1907, created much disturbance of the trade and com merce of all count.ries.

Our neighbours to the south perhaps suffered more than any other country.

A panic in that country created a paralysis of industry, a paralysis It was not to be expected that of business.

under such conditions we in Canada could entirely escape.
We know that we did suf fer S<lmewhat that panic, and yet as we look back we have rea son to feel proud of the manner in which It Canada has passed through that crisis.

is something creditable, I am sure, what ever may have been the cause of it-and I will not stop to enter upon that-that in that trial, Canada, her business, her institutions, everything Canadian.
stood well and though here and there the pinch of the money stringency was felt, if we look it, we feel proud that Canada back over came through that period of stress so suc cessfully and so well.

_ feel now Sir.

I-hat we are at the point when the tide is turning.

Already we think we can see signs of the betterment which we believe is to come.

With the conditions tha~ we have in Canada, with an energetic people.
with vast resources, with 'an in im coming proving conditions in the west, our future is bri~ht.

It was stated in the ·public press the o~her day that 70,000 people will come alone,.

year irom the United States this population.

with constan~ly from the influences of time of .

.

I M,.

FIELDING.

interest and prosperity with which for bringing with them.

aCCOfl1mg to.

the esti mate of a careful observer, at least $1,000 (oach in property in addition altogether to t-heir in the country.
When we these 70.000 people coming in, think of bringing with them, we are told, $70,000,000 the country.

of addition to the wealth of when we think of our great natural re sources, when we think of the bright pros the west and see all around us pects of such signs of enerJ!Y.

we feel, Sir, that we can look forward hopefully to a revival of that pro business and a continua.nce of gress so many years Canada has been blessed.
We may not progress as rapidly as before, we may not have a revival of anything like hoom times-nay we would no\ have it so if we could-but what we do feel is that the business of the country is in a natural and sound condition and that indications go to show that business will be better from this time forward.

The money string is no longer a ency has passed away, barrier to the progress of our country.

The banks, which for a time bad to curtail their nccommodation.
are now ready to aid every legitimate industry; state ment show.s that more money is being sent trade.

out This means a revival of business and with such a prospect surely we can say, with gratitude for the past.

that we have every confidence in the continued progress and prosperity of Canada.

into the various avenues of the last bank it it That I beg to lay on the table the resolutions Lo be introduced in committee in accord4 n.nce with the changes in the sugar duties.
The resolutions are as follow: is expedient tern.!)

Tariff, 1907' n.9 follows:- ~ ] 11 • ~ f a .

-;;; :.

:::~~ .. 1Z:l Jj ';: .

- q l " ""'00 doS t-l E-t .

::l ~ E-t to nmend • The Cue .

tp~ g ~ Qed c: e-.

schedule 'fhe following items shnll be .inserted in 'A': il35b.

Ha\\' slI:,:Rr all describ item 13.').

when ed in tariff imported to be refined.

in Canada by Canadian .suga.r refiner!> to the extrut of twice the ql1a.ntity of sugar calen refined during the dar .rears and 1909.
1911 ,by such refiners from sugar produced from Cana and an dian etlual quantity of sugur to that during the calendar years 1912 and 191:1 by from sugar produced in Canada.

from Canadian beet root the whole regula tions by the Minister of Customs.

refillers refined \I1111er root, beet such 1910 4585 APRIL 20.

1909 4586 :3-•,.d ~ • :E::!!

~t:~ ... 0;>" ~•:a• -8 • • ... -"".

•• "" ~!5 "" -" ~~ 311 ct.. 51a ete.

811 ets.

1 1 cent.

cent•.

ooot.

1 Sil cts.

Sll ets.

gIl ct.. J 1 cent.

ct'nt.


cent I l~r one hundred pounds than not more testing 8eventy~five degrees by the .. polarisoope.. .• •.

•.

And per one hundred pounds for each additional degree seventy-4iv9 degrees.. over Provided that eugar ported this under shall not be subject special duty.

im- item to • This item to expire Decem ber 31.

1914.

!SSe.
1914.

!SSe.

Raw eugar as described in tariff item .ISS, when imported to be refined in re Canada by any sugar fining company not engag ed in refining sugar from' (}f Canadian the product to the extent of beet root, the weight of (IDe-fifth of from raw sugar 8ugar refining such company in -Canada during the calendar year in which 6uch raw sugar is import· &4•.

under regulations by the Minister of Customs.

pounds hundred one than not!

more tflslling seveDty~6.ve degrees by the .


polariscope refined by I'er And per one hundred pounds for each -additional degree over seventy-five degrees.. sugar Frovided that ported this under shall not be subject special duty, im- item'0 • Hon.

G. E. FOSTER (North Toronto).


Mr. Speaker, I must say that I miss a great dfal in the tone and manner of my friend of ancient days, the Minister of Finance, using the words • ancient days' oompa.ra· tively, and having reference to former bud~ ~et speeches v. hich he has made in this HC'use.

In fact the whole speech had a re markably soporific effect on m+l and I am not sure that I shall be immediately able to throw off the influen"ce.

1'he hon.
1'he hon.

gen tleman evidently felt that there were somc points to be avoided, and it was almost painful to see the .In'eat care with which he dragged in a number of considerations to which we would hardly have thought' a Minister of Finance would have given much attention.

Whv he did it I do not know if it were not in the exercise of that in,l:!enuity and finesse of which the Minister of Finance f45 REVISED EDITION in a particular way.

(Mr.

Fielding) is a master.


We have not the fine facility' heard much to-day about so of Finance with which the Minister directed the financial affairs of this country that he was able to guide it through a series of years of very large expenditures and great growth and development without adrling to the public debt.

To-day he has had to acknowled!

!e that there is a consider able addition to the public debt.
We have not heard so much to·day about the sur pluses except The Finance Minister was able by his peculiar arithmetic to figure out that on the 12 mcnths ot-the year there "would be a sur plus of $1,500,000.

That evoked a cheer, not a very hearty one, from my hon.

friendil opposite.

But he still was able to evoke a cheer.

One simple consideration will show the importance of maintaininj:t a proper continuity in the system of bookkeepmg employed by the government.

If the Fin~ ar: ce Minister had charged.


as the Liberal the bounties to revenue Conservatives did, and not to capital, as the amount so charged this year was $2,250,000, the Minister of Finance would not only not have had a sur· plus of $1,500,000, but he would have had to announce a deficit of $750,000.

That would not have evoked any that would have made a difference to the party press.
They then could not have jubilantly declared that in this, a year of adversity and financial distress, our.Finance Minister had so piloted us that we had a surplus of $1,500,000.

How did the Finance Minister get that surplus?

He did it, not to.

use an offensive term, by juggling and falsifying the record-- cheer, Some hon.

MEMBERS.

Order.

that any substantial Mr. FOSTER.


Yes, we will let that sink into the mind-by juggling l}.n.d falsifying the record in so far that he sPopted a sys tem of bookkeeping for which he could not give reason Bnd under which it would not be possible to ,l{ive a fdr comparative statement of expenditdTell.
So, that little episode of kJ-day where the is absolutely it surplus is so small by an item in the acco~nts wiped out wrongly charged compared with the former system of book~keeping, shows what the Minister of Finance has been doing all the way through; and, up to date, sixteen mil· lion dollars and odd have ,been credited to his surplus in the books of this country there be which could only be credited cause he had changed the system of ac counting from what it was before he came into power.
Having declared that there was an increase of the debt amounting to $46,200,000 in this one year, he began to find reasons why we should not be very much concerned about that.

He told us first it could have been avoided in the place by the government not undertaking to build the Quebec nnd Moncton section 4587 COMMONS reeves demanded by the of the Grand Trunk Pacific, and he gave a~ a reason why the government must build that.

section that its construction was people most earnestly of the locality.
1 could not help but think of the argument used by the -Prime Min· iSteT the other day with reference to the Aylesworth ditch.

The Prime Minister declared then that $1,200.000 of the people's money must be dumped into that Ayles worth ditch because there was a very ur gent demand from the the wardens and t·he councillors and a number of the inhabitants in the vicinity of Hol land landing and Newmarket.
To-day, the Finance Minister tells us that the Quebec Moncton section of the Grand Trunk Pa cific must be built because it was urgeoUy the locality.

demanded by the people of The cnrdinal defect is.

that seem to think that they are here for no other pur pose than to give adhesion to the bequests individuals in scattered localities.

and of that because somebody comes and urgently and repeatedly asks that money be spent it ex penditure of large sume.
in thu argument these gentlemen justification for is n sufficient opposite and the I be the only think sir.

its curves, straightened Intercolonial result rollst of which will be The other day the Minister of Railways declared that there was no hope for the In tercolonial Railwny unless it either were linked up with a western road.

or that it built and acquired branches.

but his chief if it were to be successful point was that it must be linlted up with some great west the Minister of Fi ern railway.
And yet line nance declares to-day that a parallel with built, the to make it a competitor for the present scant freight and passenger business of· the gov ernment .railway.

that a far better thIDg to have done wOllld have been to have lessened the grades on the Inter colonial, and shortened its distances.

and as the promot.

ers of the Grand Trunk Pacific scheme represented to the Prime Minister and his undertaking was government when the first mooted.
sys tem to' the west through the Grand Trunk and other connections from the Lakes to Montreal.

That was the very proposition that Mr. Hays made to the right hon.

gen t.leman; tt.

proposition which under an agreement between the govern ment and the Grand Trunk would have se cured .8. western outlet the Intercolo immense ex· nilll Rnd have avoided that pendilure of money not onlv for the rOAd betwf'en Quebec and Moncton but also for the the road from Quebec to the head of lakes.
That would have sufficed for the present at least.

and so we would not have had this burden.

this veritable old-man-of t·he-sea which is crushing down upon Can· to ada to-<3:ay.

We would not have had 'link the Intercolonial that was for Mlo FOSTER.

if be optimistio they could possiblv avoid it.

raise this immense amount of money in order to build' a road long before its time and long before the necessity arose for Our in undertaking huge financial obligations connection with it.
The Minister of Fi nance said that we might have given 25._ 000.000 acres of land as in the case of the Canadian Pacific Railway.

but the main ob jection in his mind to l!ivinR' land was be cause he said it was a cardinal article in the the creed of the Liberal party· that land must be reserved for settler.

the Well.

Mr. Speaker.


that was particularly rich coming from this government which from 1896 until 1007-8. to come no further down, seemed to make it their cbief object in administrative life to get rid of blocks of lande as fast as they could.

and in no case.

let them go to the settler at first hand.

The ill Minister of Finance was the thinking that a good' Grand Trunk tim,e asset.

that it would· in a very short cease to become a burden and pay us back the interest upon the whole investment.
1'he hon.

gentleman must be optimistic in de{!d if he believes that within any reason be ubly short ]>eriod of years there will any appreciable income from that rail way which will ease the burden of capital E'xpenditure which the people have to bear.

Anyway.

at present it looks that the money which we put into the.

eastern section wiU cost this country an even four per cent or very close to it, and if the Grand· Trunk Pacific Company takes it over and operates it it only has to pay three per cent.
~o that so far as the people are concerned it will not be a very striking financial or business arrangement for their benefit.

The Minister of Finance slipped the eastern section of Pacific would care fully and quickly over the' depreciation in trade; he noted that there was a decrease of $78,000.000 in imports and of $19,000.000 in exports, nod he handed out the consoling reflection that we have not suf· fered as badly 8S the United States of America.

Well.
Well.

thus; when the imports were going up and t.he exports were advancing it was the policy and power of caused prosperity.

It was not of course because of world-wide conditions.

and we perceived in from the Liberal benches those days to make com· all no disposition prosperity p1lrisons with general nrevailing world.

in But when imports come down and ex ports are diminishing.

the fault of the government or its policy.

but the fault of world-wide conditions.


The same spirit :Jeems to have" $!ot hold of my friend in this connection as in con hon.

nection with the bounty b\l~int'ss and the surplus.

He changes according to the ce ce5sities of the case and the further neces· the Liberal government then it is not it was ever outside at the to us even that the 4ii89 APRIL 20, 1009 4500 their Former forecast the blast, directors of the House, could not "it'" of making good his own position as far' as he can.
He is hopeful with refer ence to 1910; he gave a wonderfully pre that year.

Here we :lre cise' forecast for the 1909·10, and yet already in the year only forecast ...·a.n the Finance Minister ive us is that he hopes there will be a ~easonable percentage of increases in the revenue over that of last year, while with reference to the expenditure he did n)t even hazard a guess as to what it would finance ministers have been be a iittIe mOTe daring than that.

They have.
They have.

at least when they were near to the year, made what they considered a fair forecast of both revenue and expenditure, and they put test.

My hon.

to the friend did not seem disposed to do that.

He says that we must not put on greater taxation, but mu-at rather find relief in a reduction of expenditures.

That is a good theory, and I hope my hon.

friend will carry· it out.


But I, and I think others 'on either side of fail to ask ourselves why he as Finance Min ister, in 1007, when every third-rate man 'in 8 bank, not to ilpeak of the managers the and banks, knew that stress of weather was coming on, felt the themselves by every forebodings and set to strengthen themsel\res pOi3sible means financially for took no precau tion at all.
He crowded on all sail, and the worst year in our experience rn that, fifteen years, authorized and carried :for lav.ish and II;lost out his largest, most wasteful expenditures.

have It would seemed befitting in a Finance Minister who was careful and prudent to have made his provision when the danger was com to have drawn in his sail when the ing, storm was about to burst.

My hon.

friend did not do that-why?

Because sound prin ciples of such 8 course?

By no meana.
By no meana.

All sound princi ples of finance and every consideration of good business were in favour of that course.

Our hon.

in friends opposite were it-why?

Because they lacked favour of the :3ound business sense.

or because they for a general were making preparations election?
if the is sad; it latter, is infinitely more sad; because, of all things, for a gov ernment and its Finance Minider to im peril the credit of a country by failing to take the proper precautions when they :3ee a difficulty approaching, in order to h~lp their party fortunes, that is about the limit.

it seems to me, and ought to be the strong est possible condemnation of any govern ment or any Finance Minister.

And now he appeal3 to the m~mbers to be patient and to -be self-sacrificing.
Let me add to t~at appeal by asking the Finance Minister.

hlm,<:elf to be patient and self-sacrificing.

Look the records of Shelbume and Que~ns, at 145i If the former, I venture to think it finance were against not J and· compare the expenditures on all sort.5 of imaginable things in those two counties with the expenditures in the adjoining counties of larger coastal extent and great er importance.
Run your eye over them and see the lavish and un-:3elf-sacrificing way in which he provided for Queens and Shelburne, even in the t~eth of the storm that burst upon him in 1907.

When he ap peals to the back benches to be self-sacri ficing 'and to be merciful, maybe some of them will pluck up courage to -eay to th~ Finance Minister that it would be well for him to take a lesson out of the same book.
For of what av.ail can a chancellor of the exchequer be as a watch on the treasury if he will not himself be self-sacrificing and self-denying?

No chancellor of the exche quer in any country can successfully do the country wishes him to do, and what what the country feels that he ought to do.

unless he denies himself even to the limit in order that he may 'i1tand well as the sleepless watchdog of the treasury, and pre~ vent it from being raided by his support ers in parliament and by friends outside.
But the Finance Minister wa3 not satisfied with the appeal which he made to his fol lowers in timid fashion, but he said that there was another reason-we must main tain our credit.

But the credit this country would have been far better main friend would have tained, and roy hon.

reception.
reception.

in Great received 8; far better Britain, and would have paid less of the money of this country to the underwriters, if he had taken the precaution two years ago-yes, and during the last five or i1ix and in times ·of heavy surpluses years, abounding prosperity-to have strengthen~ ed the credit of the country by reducing the figures of the public debt and to have.

laid up in that way a re:3erve for the hard If he had done that, as he could days.
have done it, he would have gone to the money markets of the old country in 1907 and 1908 with far better results to himself and with far better results to this coun try.

For, let him spend a3 much time as he pleases in an end~avour to show to the contrary, it is a fact that under his man the credit of Canada has been agement strained.

I shall deal with that more fully later.

of friend, My hon.
of friend, My hon.

finding no men to en gage in the combat on the floor of the House, roU:3t perforce spend a half hour of his time in dragging ~n from the outside a newspaper, setting it up as a contestant, and bufleting it as well as he could with his argument.
He declared that -aome bold and shameless Conservative newspaper; in regard to the surplus and the difference be tween consolidated fund expenditure and him capital the of a wordy figures, ~uggling with he and and undertook expenditure, was accusing falsifying 4591 COMMONS 4592 in the due form with =======_... news· warfare paper.

Well.

it seemed to me to be un necessary.

and to be.

if I may be e:Il6wed to say so, rather outside of t~e provInce, of a Finance Minister to drag In an outside in that way.
and have a long contestant di~CUS9ion with him about something that did not amount to anything anyway.

Thfd Finance Minister will have enough to do if be takes up the contests t-hat are waged with him in this House, on this and other matters.

SO the goes.

two The in very My han.

friend went into a long laboured discussion and displayed figures to show that all the Finance Ministers in Canada.

from 1867 to hi::J time.

had kept the accounts in these two ways.


That is they had 8 con solidated fund account .and· also a ~apital account,.

Then he went on to demolish really the grounds for sny difference be· tween the two by saying that all govern ments-his own a~ well as others-had in discriminately paid capital sums from rev enue and revenue items.

from capital.

so therefore there is really no generic that far difference between application as fact the bon.
gentleman himself does not that keep the lines between capital expendi ture and consolidated funds expenditure on any basis of principle is sufficient proof that the system is one on which we might very well change, and substitute for it a system the great countries of the followed in all civilized world.

My hon.

friend was asked two or three straight questions as to whether this was the condition in Great Britain, the United States.

Australia, or New Zeal.


that and, and he ventured the statement there were differences in the conditions in different countries.

But he was not 8uffi ciently sure of himself to state whether the system followed in Canada is followed in Great Britain., the United States, Aus tralia.

or New Zealand.

the one adopted in Great Britain and the United States, we have in these two 1:,)0.1· If it be not tries two very good examples.
the one adopted in New Zealand and Au tralis, we have there two examples, with the conditions ours-a sparse same a!l population, insufficient revenue and large expenditures which have to be' made and which have to be met by raising loans.

For myself I have no hesitation in saying that the system is a bad one.

If it be not Sir WILFRID LA DRIER.

Tardy repent ance.

a is simply argument learn anything and consequently should not change, but my hon.

friend.

cannot surely mean that.


His interruption was no doubt pleasantry interpolated and without very much point, so far as any concerned.

My hon.

friend then went on to discuss the debt of this country and the burden of that debt.

He did this by taking the population and into the sum of our dividing the amount debt.

So far as that goes, the argument is good, but the argument does not go a very It may be true that.

in propor_ long way.

tion as our population inc~eases.


our p~r capita debt decreases.

So It does, and 1f you will go to the United States with its 80 or 90 million of people, you will find that its debt per capita is very much less as a burden.

Also if you keep the interest about stationary it becomes less per indi· vidual in proportion as the population in creases.

But there is another point about which my han friend was careful not to say anything, and it is a vital point.
T.he vital point is what you take out of the In· dividual citizen for all purposes.

If my hon: friend had taken up that branch of the argument, he would have shown a different state of things.

Whereas in 1896 we took from the people in taxes $5.46 per capita.

last year my han.

friend took $11 per c,apita.

That is the vital point.

Our people paid last yeal in Customs taxes $57,000,000, and in excise taxes $15,000,000.

These two added together are what you had better contrast.
with the amount paid in l896.

if you want to show the difference.

Take the popula· tion in 1896 and what it is to..<fay, and you find that in 1896 we paid $5.46 in taxation per head whereas to-day we pay $11· per head.

As re~ards what my han.

friend has said about the small changes that have been made in the tariff, so far as I can see, the changes seem to be reasonable.

But the proper place to discuss these will be on the tariff item.

At six o'clock House took recess.

After Recess.


House resumed at eight o'clock.

PRIVATE BILLS.

PATENT OF THE SUBMARINE COMPANY.

On the order: Third reading of Dill ·patent of respecting (No.

77) the Submarine Company.-Mr. B. Prouh:.

Mr. FOSTER.

My right han.

friend would r do not see the promoter do very well sometimes if he would only re- pent.

but the trouble with him is that when of the nill (1\Ir.

Proulx) or the Minister of he sees he is wrong, he does not repent.
I am not advised as re· am surprised that he should interject a Mr.

FIELDING.

remark which would lead one.

to SUPPOf;e it has that he took tpe ground that no one should· received the attention of sonie other min-· I Agriculture (Mr. Fisher) here.

I have no doubt srects this Bill.

;\fr.

FOSTER.

Mr. FOSTER.