1909-04-20

['I move that the order be now discharged, and that the said Bill be referred back to the Committee on Standing Orders.']
Hon.  W. S.@: FIELDING (Minister of Finance) moved that the House go into committee to consider the ways and means for raising the Supply to be granted to His Majesty. He said: In the presentation of the budget it is usual to devote some attention to each of three fiscal years. First we have to consider the completed year, the accounts of which have been laid before parliament in due course; next we have tb consider the current year, or as in the present instance the year which actually ended a few days ago, but the accounts of which have not yet been 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 for the fiscal year 1907-8, were submitted to parliament and probably most hon. members who are interested have given them consideration; nevertheless for the convenience of reference it is always well to note in the budget speech the principal features of these accounts and therefore I desire to call attention to the chief points in them. The results of the operations of the fiscal year
1907-08 (that is, the year which was closed or. the 31st of March, 1908) did not differ very materially from the anticipations expressed in the last budget speech. My expectation was that we should receive a revenue of $96,500,000; 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 fund of $77,500,000, but the actual expenditure proved to be $76,641,451.59, or $858,548.41 less than the estimate. The falling off in the expenditure was more than sufficient to balance the shortage of the revenue, and the net result was that whereas I had anticipated a surplus of $19,000,000 the actual result was a surplus of $19,413,054.22.
Fund-1907-8.
-	Actual.	Estimated Budget Speech 17th March, 1908.	Greater than Estimate.	Less than Estimate.$ cts. 96,054,505 81 76,641,451 59 19,413,054 22	8 cts. 96.500.000	00 77.500.000	00 19,000,000 00	$ cts.	$ cts. 445,494 19 858,548 41
Surplus				413,054 22	

The previous fiscal period was one of nine months and therefore it would not be convenient to make any comparison between that period and the last fiscal year. It may however not be without interest that I should call attention to what are the sources of revenue as shown in the accounts of that year:
Sources of Revenue, 1907-8.
Customs	$57,543,811	25Excise	
15,782,151	68Post Office	
7,107,886	86Dominion Lands	
1,883,619	88Railways	
9,534,596	20Miscellaneous	
4,202,439	94

It is to be noticed that the customs revenue was the largest in the history of the Dominion. It is also gratifying to be able to state that that very large revenue was realized with a lower rate of customs taxation than had existed in former times, as will appear from the following comparison :
Average Rates of Customs Duty.
Average Rate Average Rate on Dutiable on Dutiable Imports. and Free.
1896	
29-974	19:1291897	
29-967	18-6131908	
26-582	16-480
Particularly gratifying was the continued increase in the revenue of the Post Office Department. The affairs of that department for 1907-8 show a surplus of $1,101,957.12. I am sure the House will agree with me that this is a most gratifying return, especially when we bear in mind that there has been a wide extension of the service, that we have cheaper rates of postage, and that this department a few years ago was a constant burden on the treasury, showing year after year a very large deficit.
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 convenience of reference I put in a statement showing what this expenditure for the year amounted to :
Capital and Special Expenditure, .1907-8. Capital Expenditure.
National Transcontinental Ry	$18,910,253	58Railways	
4,761,299	54Canals	
1,723,156,07Public works	
2,969,049	08Dominion lands .. ..	768,243	94Militia	
1,297,904	65

Special Expenditure.
Railway subsidies... $2,037,629 30
Bounties	
2,787,354	21Charges of management	
682,337	91

A large proportion of this capital and special expenditure was provided out of the revenue by means of our surplus of 191 millions of dollars. Deducting from the total capital and special expenditure of $35,937,228, the surplus of $19,413,054, sinking fund expenditure of $2,234,263, and a small refund of $910, in all $21,648,228, it will be found that the increase of the net debt on the 31st of March, 1908, was $14,288,999.88, notwithstanding the fact that in that year we expended $18,910,253 on the eastern division of the National Transcontinental Railway alone. But for that outlay, there would have been a reduction in the debt of $4,621,253.
Coming now to the affairs of the fiscal year 1908-9, which ended a few days ago, 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 England with comparatively short distances and complete means of communication. But in a country like Canada, with a vast territory and public business going on all over the wide Dominion, it has not been possible to close up the accounts so early. The law permits three months for closing the accounts, though we always endeavour to close them in less time. Consequently, although the fiscal year has 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 affected by a world-wide stringency which started in the fall of 1907. The revenue of
1908-9, as received and accounted for up to the 10th of April, 1909, was $84,352,581.30. My estimate is that when the returns are completed and the account is closed, the revenue will be found to have amounted to 84i millions of dollars. This is 114 millions 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 Ministers of Finance the world over are experiencing in the preparation of their budgets, it would not be surprising if it became my duty to report a very considerable deficit on the operations of the last year. I confess that at one time I viewed the situation with anxiety, and would not have been surprised if on the closing of the accounts there had turned out to be a balance on the wrong side. I am happy to say, however, that my apprehensions' in that di
Total


Mr. FIELDING.: rection are not to be realized. I am glad to be able to say, as far as the accounts at present indicate, that we shall close the affairs of the last fiscal year with a surplus of $1,500,000. The expenditure, as shown by the returns up to the 10th of April, 1909, amounted to $72,939,642.22. Taking the expenditure for the balance of the year at about the same as it was in the previous year, we estimate the total expenditure of the year chargeable to income at about $83,000,000 ; and, as I estimte a revenue of $84,500,000, this will leave us with a safe margin of surplus to the extent of $1,500,000, and I am not without a hope that on the final closing of the accounts the surplus may be even somewhat larger. I am sure it will be felt that this statement, if it be realized, will be a most satisfactory one for Canada, for we are dealing with a period when throughout the world there have been financial conditions which have much disturbed business, and when in the natural order of things a very unfavourable balance might have been expected. That statement, of course, deals only with the consolidated fund revenue and expenditure, what for convenience I may call the ordinary expenditure of government.
There is of course to be considered capital and special expenditure. We estimate that it will take twenty-five and one-half million dollars to pay the outlay of this year last past for the Transcontinental Railway. The taking over of the Quebec bridge adds to our debt the sum of $6,424,000, and other capital and special charges amount to $17,300,000. These sums aggregate $49,224,000. From this we will hve to deduct the surplus, estimated at one and a half million dollars, and sinking fund amounting to $1,675,000. These two aggregate $3,175,000 which, deducted from $49,224,000, would leave a balance of $46,029,000, in round numbers $46,000,000, which will be added to the net debt of Canada for the year closing on the 31st of March of this year. This is a very large increase but it is to be noted at once that $32,000,000 of that amount is accounted for by the National Transcontinental Railway and the Quebec bridge, which is to be deemed hereafter a part of the National Transcontinental Railway. So it will be seen that if we have a very considerable increase in our debt, it is due to the very special expenditure that we are incurring id connection with the great work of the construction of the National Transcontinental Railway.


Mr. FOSTER.: Can my hon. friend give the items of revenue, customs and excise?


William Stevens Fielding: No, I have not these figures at hand in detail. I gave my hon. friend a day or two ago the latest information we had on the subject, and a simple computation for the few remaining days of the year will enable him to work it out for himself.


George Eulas Foster: Can the minister give me the amount paid out for bounties in the Consolidated Revenue Fund Expenditure for the year just closed?


William Stevens Fielding: I have not the figures at hand, but from memory about $2,238,000. If that is not substantially correct I shall give my hon. friend the exact figures later.
I freely say that we might have avoided this addition to the public debt. In the first place, we might have avoided it by refraining from the construction, in the whole or in part, of the eastern division of the National Transcontinental Railway. I have occasionally heard suggestions of something of that kind from the members of this House. Particularly have I heard criticisms of the construction of that section of the line which lies between Quebec and Moncton. Now, whatever may be said by people living in more remote districts, who are not familiar with the needs of that line, there was no portion of the Transcontinental Railway which was so unanimously demanded by the people particularly connected with it as the line between Quebec and Moncton, no portion, I say that without reserve. Time and again representations were made to the government of Canada as to the need for the construction of that road. Not to have built the eastern division, particularly that section, would have been a narrow, almost a provincial policy. The people of the maritime provinces, without regard to party, without regard to any differences they might have on other questions, were practically unanimous in demanding that if Canada was to engage in the enterprise of another transcontinental railway they should have connection with that road by some line which was better suited for a transcontinental service than the old Intercolonial Railway. The legislatures of the provinces, boards of trade, the various representative bodies of that portion of the country, again and again called upon the government of Canada to build that section of the road. Therefore, when hon. gentlemen criticise the construction of that road, I would have them bear in mind what I stated a moment ago, that there was no portion of the whole transcontinental line which was more universally demanded by the people immediately concerned, than that between Quebec and Moncton.
There was another way in which we might have avoided this addition to the public debt. We might have followed the example of our predecessors as to the man-

ner of aiding the construction of a transcontinental railway. I do not say this in order to criticise the action of our predecessors. We know very well that aid was granted to the Canadian Pacific Railway in three forms. There was a gift of finished road, costing an enormous amount of public money, a gift of $25,000,000 in cash and of 25,000,000 acres of land. Leaving out of consideration the cash bonus and gift of finished road to the Canadian Pacific Railway, and considering only the land grant, I venture to say that if we had been willing to give the Grand Trunk Pacific 25,000,000 acres of land in the west, we could have devised a scheme which would not halve added one dollar to the public debt cf Canada. But would it have been a wise policy? I am sure upon that question there will not be a very wide difference of opinion. Whatever may be said of the wisdom of the government of that day in granting such a large land subsidy to the Canadian Pacific Railway, and I have no desire now to criticise that policy, whatever may be said as to the merits of that policy judged in the 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 widespread dissatisfaction in the western country, and if it had been proposed to again adopt the policy of subsidizing a great transcontinental railway by giving a large block of land in the Northwest territory, I am satisfied that such a policy would not have commended itself to the judgment of this House or of the country. The land for the settler, not for the railway corporations, is the demand of the western people.


Some hon. MEMBERS: Oh, oh.


William Stevens Fielding: So I say that if we had regard only for appearances, if we were afraid of adding to the public debt, we might have avoided it, we need not have responded to the wish of the maritime 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 of that road as a government work, to pay for it out of the public treasury, 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 history, 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 Mr. FIELDING.
Pacific Company must pay 3 per cent on its cost. Practically therefore, that portion of the debt of the country will be wiped out because it will be represented as an interest-bearing asset. So we say that while a few short-sighted people, well-intentioned no doubt, might say that we should not have incurred this debt, I am sure that the sounder judgment of the country will say-not necessarily condemning the policy of former times because conditions may have differed then-that it would have been a mistake to-day to adopt that policy of land subsidy, and that we did well to face the financial responsibility which is involved by these additions to the public debt.
Our trade statistics for the past year will necessarily be unfavourable, but they will not be more unfavourable than the statistics of other countries. The year 1907 was only a partial year, a period of nine months in our financial accounts, and therefore it is difficult for us to make comparisons. The total trade for the fiscal year 1908 reached a very high figure, being just $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 increased to $280,006, 606. Our imports in 1906 were $294,286,015, and in 1908, $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 because our fiscal period then covered nine months only. For the fiscal year 1909, we have no official returns that are complete; 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 imports. In this respect we are able to make very satisfactory comparison with the United States. As regards imports, Canada and the United States stand on even terms, the decline being about the same in both cases. But taking the figures of the calendar year, it would appear that the exports from Canada have decreased but a small degree, whereas those of the United States have decreased very largely.
Coming now to the year 1909-10, with the adequate resources and widely recognized energies of the Canadian people, it is only fair to assume that we shall speedily be able to overtake the falling off of the past year. It is only reasonable to suppose that the conditions of the past year are quite abnormal and due to special circumstances, which I think will disappear to a sufficient extent the coming year to enable us to receive a very considerable increase of revenue over that of the year just past.

Of course I do not think we would be justified in expecting to reach the very high * revenue of 1907-8, but we do think that the revenue of 1909-10 will considerably exceed that of the year which has closed. The year just closed we are estimating to give a revenue of 84i million dollars. For the coming year we estimate that we shall realize a reasonable percentage over that, but we do not expect to approach at all the revenue of the previous year which was $96,000,000. It will take us undoubtedly another year to overtake that and possibly a little more. We think there is every reasonable probability that 'the turn of the tide has come, and that from this out our revenue will steadily increase. But for the present the revenue of 1907-8 must stand as the high water mark of our income.
With this condition of revenue and with the very many demands being made upon us, it would almost seem unavoidable that we should meet the difficulties by an increase in taxation. In some other countries that seems to be the remedy for the financial conditions that have there arisen. In our judgment, however, there is no need here of increased taxation. We think the truer and sounder method is to meet the situation by a substantial reduction in our expenditure, and that is the method we
have adopted. Unquestionably if we were to continue the same rate of expenditure as that which has prevailed in recent years, we should be obliged to add to the burdens of taxation; hut we have come to the conclusion that the part of wisdom is to ask all concerned to be patient with us for the time while we put the brakes severely on expenditure. I have prepared a statement showing the reductions in the estimates for 1909-10 as compared with 1908-9. It is but fair to say that the estimates for 1908-9 which I quote are the complete estimates for that year. That is to say, they are the estimates submitted in the previous session and the supplementary estimates of the current session. The estimates for 1908-9 on consolidated fund amounted ta $89,412,868. For the new year now beginning, the estimates for the same account have been reduced to $80,078,624. So that in that account there is a reduction of $9,324,243. If we turn to the expenditure on capital account, we find that in 1908-9 our estimates amounted to $43,658,365, and for the coming year the figures are $30,411,150. So that, taking the decrease of $9,334,243 on *consolidated fund account and $13,247,215 on capital account, we have a total decrease in estimates on the whole expenditure of $22,581,458. Here are the details:
. REDUCTIONS IN ESTIMATES FOR 1909-10.
Consolidated Fund-
1908-9.*
ots.
1909-10.
$ cts.
Increase.
$ cts.
Decrease.
$ cts.
Public Works	
Agriculture	
Militia	*	
Marine and Fisheries. Railways and Canals. Other Departments..
17,422,354 78 1,719,627 06 5,749,275 22 5,923,900 00 12,435,373 08 46,162,338 17
89,412,868 31
8,184,408 06 1,112,500 00 4,813,150 00 4,879,980 00 11,880,857 33 49,207,729 51
80,078,624 90
3.045.391	34
3.045.391	34
9,237,946 72 607,127 06 936,125 22 1,043,920 00 554,515 75
12,379,634 75
Net decrease Consolidated Fund
9,334,243 41
Capital-
Public Works	
Railways and Canals
Dominion Lands_____
Militia and Defence.
3,635,542 29 37,819,566 75 903,256 06 1,300,000 00
43,658,365 10
4.512.000	00 23,828,150 00
771,000 00
1.300.000	00
30,411,150 00
876,457 71
876,457 71
13,991,416 75 132,256 06
14,123,672 81 876,457 71
Net Decrease Capital	
Total Decrease Consolidated Fund and Capital
13,247,215 10 22,581,458 51
*Including all Estimates of the Year.
The reductions, therefore, that we are making in the estimates are very considerable. We have yet to bring down some supplementaries for the current year, but 144
they will not materially alter the figures. T.hey will be very moderate. The supplementaries which have to be brought down towards the close of the year are one of the



unseen things we cannot determine in advance, except to say that it is the determination of the government to keep the expenditure of the year within very moderate figures. We ask hon. members to appreciate the difficulty we have in making reductions. There are demands from hon. gentlemen of both sides and from all over the country for many public works, and undoubtedly, in many instances, these works 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 submit to the sacrifice, if a sacrifice it be, for a short time, and consent to a severe cut in our expenditure in order that our burdens may not be too heavy and our credit be well maintained. We know that in many parts of the country great works are projected-railways, canals, and other enterprises which may in themselves be worthy enough, some of which will have to be undertaken at a later 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 condition. Therefore we say to the promoters of all the enterprises, no matter how worthy they may be, that they must be content to let them stand aside for the present.


George Eulas Foster: What amount of capital expenditure is proposed for the eastern section of the Grand Trunk Pacific?


William Stevens Fielding: $20,000,000. We think that our aim ought to be - and we shall endeavour to accomplish it as far as possible - to provide out of our revenue, during the year now opening, for all the ordinary expenditure and for a considerable part of our capital expenditures-if possible even for all of them. There is one work as to the wisdom of borrowing for which there can be no question, and that is the Transcontinental Railway. If we can succeed in keeping down our borrowings for new works during the coming year to the sum which we wish to expend on the Transcontinental Railway, I am sure we shall have a very good statement to present'. I do not know that we can accomplish this, but it is to be our aim, and I am sure that if for the works of the year we have to borrow any sum in excess of that required for the Transcontinental 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 this government, 1897, a year in which we had only what I may call a partial control of public affairs, there was a deficit of $519,981.44. Since that, we have had, if I include the estimated sur-Mr. FIELDING.
plus for the year just closed, twelve surpluses amounting to $115,059,087.83. 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 annual surplus for these twelve and three-quarter years of $8,983,459.32.
Now, I am not unmindful of the fact that, as regards one item, the method by which these surpluses have been estimated has been occasionally questioned in the House. I refer to the item of bounties, which is charged to a special account. I have explained this point on several occasions, but, as there are many new members this session, it may possibly not be wrong if I again state the view the government entertained when the change was first made. Under the former government, the bounties, which did not amount to a very large sum, were treated as a drawback. It seemed to be assumed that there was money paid in some way into the treasury, and that it was received back by way of drawback ; at all events the common understanding of a drawback is the repayment of money which has been received.


Mr. R. L. BORDEN.: They were charged to revenue, were they not?


William Stevens Fielding: That was the result, although it did not take that form. They appeared to be treated as a reduction of the customs duty-the customs duties were understated, in reality, because they were subject to this drawback of moneys which had never been paid in. It reduced the revenue and so was equivalent to a charge on revenue account. We thought that was not the best way of dealing with the matter, that the account should be treated differently. And, as, at that time, the whole bounty question was being re-considered, we came to the conclusion that bounties being a temporary aid to industries,-they have been somewhat longer in existence, it is true, than was expected at the time-they might properly be treated in a special account in the same way as a railway subsidy was treated. When you pay a sum of money as a railway subsidy, you receive nothing for it; you do not get any property, you have no assets to represent it, but you give these sums as temporary aids to a great enterprise, which, no doubt, will bear fruit in future years in the development of the country. And we thought that the bounties, which were to be regarded as temporary assistance to great industries, might properly be treated in the same way. Therefore, they were treated in what is called a 'special account,' the same as railway subsidies. I am aware, as I have said, that the propriety of that has been questioned, but I think that the reasons which

led us to take this view are sound reasons. 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.


Robert Laird Borden: Will the hon. minister state how much these bounties have amounted up to the present time-in other words, what is the amount of this special account?


William Stevens Fielding: Speaking from memory, something over twelve million dollars or $1,000,000 a year. If we charge the bounties in this special account all to ordinary revenue account we shall find that the result will be to show a total surplus for the twelve and three-quarter years of $99,832,075.55, and an average annual surplus for the twelve and three-quarter years of $7,869,182.39. It will be seen, therefore, that while the change in the method suggested by some hon. gentlemen would make a difference in the surpluses of that period, it is by no means a very large difference- the surpluses have been so large for the whole period that a change in the method of keeping the account would not materially affect the result.


Mr. MIDDLEBRO.: What deficit would there be this year if the bounties were charged to revenues instead of to capital?


William Stevens Fielding: Both sides of the account would come pTetty close together; there might be a small deficit; and this is the only year in twelve and three-quarter years when this change in the method of keeping the accounts could possibly have affected the question whether there was a surplus or a deficit. The heaviest item of these bounties, the bounty on iron and 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 than the other iron and steel bounties, but I do not think that much will be claimed under that item. So, whatever may be said with regard to these bounties, the heaviest items will expire shortly, and I suppose there will hardly be much room for contention as to their proper place in the accounts. I merely wished to emphasize the fact that if a different method of keeping the accounts had been employed, while the surplus would have been reduced on the whole, yet the bounties have played no very large part in that result.
There is another point I wish to deal with relating to surpluses and deficits. I have regretted 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 Conservative newspaper sets forth in flaming headlines the statement that in the public accounts for the year there is a deficit of 144i
$30,000,000, with more to come. I have seen similar statements also in the other newspapers. Now, I submit in all fairness that that is not a candid way of dealing with the public accounts. The word 'surplus' and the word 'deficit' have a meaning, a well established meaning, in the finances of Canada. It is not a meaning which I have created, it is not a new meaning, it is a meaning which has existed throughout the public accounts of Canada from the beginning of confederation to the present moment. If we go back to 1867 and look through the public accounts from that year down to the present, we shall discover that if this modern method of computing the surpluses be accepted, we shall be forced to the conclusion-a conclusion which I refuse to accept-that the Finance Ministers from Sir John Rose down to the hon. member for North Toronto (Mr. Foster), juggled with the accounts, falsified the accounts of the each year's operations. I say I do not make that charge; I say that it is not the ease. But I say that this tendency on the part of our critics to take the balance at the end of the year, the balance which is added to the public debt, as a deficit is altogether unfair and at variance with the established practice of the Dominion ol Canada.


Mr. AMES.: What is the established practice of Great Britain?


William Stevens Fielding: I was dealing with the established practice of Canada.


Robert Laird Borden: Might I ask the Finance Minister whether this system, which we have undoubtedly in Canada since 1867, of dividing the expenditure into capital and revenue, prevails in any other country, and if so, in what country? I would like also to ask whether if our practice is different from that of all other civilized countries it would not be a good time to conform our practice to that of other countries when we have been having an enormous superabundance of revenue during the past eight or ten years?


William Stevens Fielding: I do not agree with that. I think we are more concerned with what has been the established practice of Canada than with what has been the established practice in other countries, the conditions of which may be utterly unlike those of Canada. I say that when we find the public press treating deficits in this way, when they say:	Your total expenditure for the year in any class was so much and your revenue so much, and the balance is a deficit, I say that is a misleading statement, it is an unfair statement, and it ought not to be made by any respectable journal in this country.


Robert Laird Borden: What is the practice of the United States?


William Stevens Fielding: Really I would not like to answer definitely. I think in England the practice is different. But there are reasons why this practice in Canada would not be a sound practice. I think a country which has to engage in large operations, a country which needs to borrow money in order to develope its resources, must establish a different condition from that in an old settled country which has hundreds of years of experience.


Robert Laird Borden: What is the practice in Australia and New Zealand?


William Stevens Fielding: I am bound to say that I am not aware. But I do not think it is important.


Robert Laird Borden: They are like us, are they not?


William Stevens Fielding: 
George Eulas Foster: What proportion was taken by the public?


William Stevens Fielding: Forty-one per cent was taken by the public, the balance for the moment remained on the hands' of the underwriters. That loan now stands at a premium of nearly 34 per cent, so that if the loan was not immediately taken by the public it was no reflection on the credit of the Dominion. There were special Tea-sons for placing this loan at the time and in the way we placed it. A 34 per cent loan may now be regarded as our standard security. Many years ago we issued one at 24 per cent and then one at 3 per cent, but in the present conditions, and they are likely to continue for the early future, I suppose we will have to Tegard the 34 per cent loan as our standard security. With improving conditions we may get back to the 3 er cent rate, but in the meantime we must e content with 34 per cent, and so it was important that we should keep our 34 securities on a good basis in London.


George Eulas Foster: Can the minister give the brokerage and commission on the 1909 loan?


William Stevens Fielding: The answer to that question was ready yesterday but as I was not in the House it was not given. My hon. friend's question was :
What amounts have been paid for commission, brokerage and other expenses, respectively, on loans made since December 31, 1908?


George Eulas Foster: What is the comparison in cost between the two methods?


William Stevens Fielding: 
Mr. SPROULE.: If that be so, how do you reach your conclusion that our average is 3i per cent?


William Stevens Fielding: 

[Stage Direction]
-	Price in Prospectus.	Price Realized.	Duration of Loan, Years.	Rate per cent.	Total Issue.
		£ s. d.			£ s. d.
Intercolonial Railway, 1869, guar-1				f4	
anteed. Intercolonial Railway, 1869, un- f	105 12 Hi	35	1,500,000 0 0 |guaranteed. j	U	500,000 0 0 jIntercolonial Railway, 1873, guar-1	f 30	4	1,500,000 0 O')anteed. V	104 7 8	yRupert's Land, guaranteed	
J	l 31	4	300,000 0 0JLoan of 1874	90	90 3 3	30	4	4,000,000 0 0Loan of 1875, guaranteed	1	f 35	4	1,500,000 0 0)Loan of 1875, unguaranteed	
(	l 30	4	1,000,000 0 0/Loan of 1876	91	91 0 0	30	Loan of 1878, guaranteed 	
1	/ 35	4	1,700,000 0 0)Loan of 1878, unguaranteed	/	\ 30	4	1,500,000 0 0/Loan of 1879	95	95 1 10i	29	4	3,000,000 0 0Loan of 1884 	91	91 2 2	*25	34	5,000,000 0 0Loan of 1885	99	101 1 8	*25	4	4,000,000 0 0Canada Reduced	24A	4	fi 443 13fi 9 QLoan of 1888	921	95 1 0	50	3	4!000|000 0 0Loan of 1892	91	92 0 10J	46	3	2,250,000 0 0Loan of 1894	95	97 9 2	43	3	2,250,000 0 0Loan of 1897	91	91 10 5	50	24	2,000,000 0 04 p.c. Loan of 1908-12	100	100 0 0	5	4	1,500,000 0 03| p.c. Loan of 1930-50 (February	100	100 0 0	22J or	34	3,000,000 0 0issue).	42|	3f p.c. Loan of L908	100	100 o 0	4	3|	5,000.000 0 03j p.c. Loan of 1930-50 (October	100	100 0 0	22 or 42	34	5,000,000 0 0issue).	Loans extended.	4 p.c. Loan of 1874 (due May 1, 1904)	3	4	2,500,000 0 04 p.c. Loan of 1874 (due May 1, 1907)	4	4	1,831,398 1 5
Discount or Premium.
£ s. d.

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D. 147,206 6 4 D. 445,870 0 0 P. 43,416 0 0 D. 54,576 2 9 D. 197,904 0 0 D. 179,009 16 0 D. 57,145 6 9 D. 169,625 5 0 *
* Or 50 years calculated for 25 years only.
a Does not include the bonus of stock for conversion into 3 p.c., 1938.
b This amount includes £11,943 2 6, being balance of Commutation of Stamp Duty (at rate of 12s. 6d. c This amount includes £2,473 2 6, being balance of cost of Stamp Duty yet payable (at rate of 2s. 6d. d This amount includes £9,374 7 6, being balance of Commutation of Stamp Duty (at rate of 12s. 6d.
Finance Department,
April 19, 1909.	,
William Stevens Fielding: 45G9


ON THE LONDON MARKET SINCE 1867.
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Amount Realized.	Charges, including Discount f r immediate payment and Interest on part payments.	Net Amount of Cash realized.	£ s.	a.	£ s.	d	£	.	d.2,112,946	0	0	29,896	18	5	2,083,049	1	71,878,971	6	8	33,449	18 11	1,845,521	7	113,606,523	2	6	60,289	9	9	3,546,233	12	92,477,069	10	11	42,847	16	1	2,434,221	14	102,275,000	O'	0	57,122	9	7	2,217,877	10	52,897,652	7	6	36,852	15	7	2,860,799	11	112,852,793	13	8	47,988	8	3	2,804,805	5	54,554,130	0	0	94,693	3	4	4,459,436	16	84,043,416	0	0	82,098	2	1	3,961,317	17	116,388,560	0	0	32,977	1	0	6,355,583	19	03,802,096	0	0	67,598	4	3	3,734,244	7	62,070,990	4	0	31,365	6	7	2,039,624	17	52,192,854	13	3	24,So7	0	4	2,168,047	13	01,830,374	15	0	22,347	17	2	1,808,026	17	101,500,000	0	0	a 29,473	11	2	1,470,526	8	103,000,000	0	0	6 74,665	15	1	1,801,534	4	115,000,000	0	0	a and c 82,923	9	2	3,489,734	6	35,000,000	0	0	d 120,236	17	to	4,389,313	5	82,500,000	0	0	a 33,193	15	2	2,466,806	4	101,831,398	1	5	a 26,819	19	4	1,804,578	2	1
Conversion of I
Stock and Bonds Total Amount of maturing	realized.
Loans.
Annual effective Rate of Interest per Unit.
£ s. d.
£ s. d.
1,123,800 0
0	2,923,331 4 11
03916
0416
043
04042
04083
0341
0288
03704
1,427,342 4 490,449 16
4,917,076 10 10 4,879,763 2 2
03783
*04556
p.c.), yet payable on inscription of stock certificates.
p.c.), on £5,000,000 3| p.c. debentures.
p.c.), yet payable on inscription of stock certificates.
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I have noticed some criticism as to the cost of our loans, but 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 handled enormous sums of money in our fin-anical transactions during the last few years and you cannot carry on these enormous operations without large expense. 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 in the charges of former times, and that is the charge for underwriting. We have sometimes paid three-quarters per cent for that, and sometimes when the money conditions were not so 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 Lcndon. This underwriting is simply an assurance that the money will be provided. The underwriters are the very best judges of the character of a loan; they are better judges in a certain way than the public themselves, and experience has shown that it sometimes happens that the public are not ready to take up a loan. Then, the underwriter who is an experienced financial man and who weighs every element in the money market is able to come to an understanding 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 willing to do the business (hen the transaction 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 or not. In some respects it is always better to have the public subscribe, but if the public should subscribe too readily, if the public should come in and rush after the loan and subscribe to it many times over, the Minister of Finance would be open to the charge that he had made a mistake, that he had fixed the price of his loan at too low a figure, or in other words that he was selling his goods too cheaply. In the case of our loan recently issued oniy 41 per cent was taken by the public, which was the best guarantee that the underwriters gave us the full value of the money. If we had not agreed to the underwriting of the loan, we would have been obliged to have named a lower price for it. So I am satisfied that the modern system of underwritings while we may regret that we Mr. FIELDING.
have to resort to it, has the advantage of securing to the government the best possibie price for our loans. No colonial government now borrows money in London without underwriting. I think I am correct in saying that no foreign government now borrows money in London without underwriting. It has become the established practice of the money market. The imperial government, in dealing with the last India government loan, which is practically an imperial government loan, and which was placed on the market very shortly after our £6,000,000 loan, had to adopt the policy of underwriting, and, jl understand, paid for that loan precisely the same price that the government of Canada paid for its loan. Hon. gentlemen will see, therefore, that in this underwriting, which is the only new item, we are simply following the established practice of the money market, which all other governments, including the imperial government in the case of the last India loan, have had to adopt, and I think it may be assumed that we do well to conform to this practice, in view of the fact that the rate paid for our loan was precisely the same as that paid for the recent India government loan. The effect of underwriting is this, that the public know that they have a second chance to buy. If it is thought the loan is not much in demand, an individual investor, even though he wants a 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; then it will fall to a discount, and I can come in and buy more cheaply.' Sometimes that happens, but it did not happen with us. The public did not take all of our loan at once, but immediately after it was announced that 41 per cent of the loan had been taken up by the public, investors began to run after the balance in the hands of the' underwriters, with the result that according to the latest quotations it stands at a premium of 3J per cent in the money market.
I should call the attention of the House to some early maturing loans, that is, the loans we shall have to deal with during the three calendar years 1909, 1910 and 1911. The £5,000,000 3J per cent loan of 1884 gives the option to the government of redeeming it between the 1st of June, 1909, and the 1st of June, 1934, on giving six months' notice. We could, therefore, take up that loan, if we so desired, during this year, but under present conditions it is of advantage to Canada to carry this on at the present rate, for we have no reason to suppose that we could do better than 3i per cent, and no notice of redemption has been given. On the 1st of January next the Canada Beduced 4 per cent loan of £6,443,136 matures. Of this loan there is

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 redeemable 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 fund of about one-half 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 next three years, besides which we have, of course, to provide for what may be required for the possible needs of our work, notably the Transcontinental Railway.
I regret to notice that some very erron-ous statements have been made from time to time, both in this House and outside, made 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 erroneous information, and not of any intention to state other than the facts. We have heard it stated, for instance, that because we borrowed money for 2} per cent or thereabouts in 1897, on long term loans, and because we recently paid 4 per cent, therefore the credit of the Dominion is going down. There is no warrant for any such statement. In the first place, in making any comparison 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 the best terms. For a short-term treasury note, you may sometimes get money cheaply, just as in New York money is occasionally borrowed at a very low rate on call. But for the purposes of the ordinary investor, in a favourable condition of the market, a long-time security, such as a fifty-year loan, is the security most favoured. Our recent loan was for ten years, 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 commodity, 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 2f per cent and that we now have to pay 4 per cent, therefore our credit is suffering, is an entire mistake. In 1897 monetary conditions were exceedingly favourable, and we were able to place a 2} per cent loan at a remarkably good
price. We seemed to have struck the psychological moment, and obtained the most favourable terms ever obtained for a 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.
The British investor is becoming somewhat more wide-awake. He is beginning to be willing to take a little risk by putting his money into foreign loans; and at the very moment when we were trying to borrow at 31 per cent, a Russian loan was offered at 41 per cent, and sold at a price under 90. A great many British investors, who at one time would not touch ' these foreign loans at all, are now disposed to invest in them. The result is a lesser demand for gilt-edged securities, and it becomes a little more difficult to float securities of that character at the best prices. Take, for instance, the drop in British consols, the very highest standard of securities in the world. In 1897 these bore interest at 2| per cent and were quoted at 11.3J - The rate has since been reduced from 21 per cent to 21 per cent, which would account for some of the reduction in the quotations but not for all of it. I have the latest quotation, and find it is 85 1-16, and not long ago British consols sold as low as 80. It would not be reasonable to infer that 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 Canadian, 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 as the Metropolitan Stocks- the stocks issued by the London County Council, a very high class security, probably next to that of the British government itself. In 1896 the Metropolitan 31 per cents were quoted at 1281, being their highest point, and Canadian 31s were quoted at 111§. The two classes bear the same rate of interest, yet there was a difference against Canada in 1896 of 16J. Coming to 1908, Metropolitan 31s were quoted at 104| and Canadian 3i's at 1011, being a difference against Canadian of 2f. The best way to gauge the credit of Canada is to take some other standard stock, and compare the rates at which that standard stock was quoted in former years with that at which Canadians sold in the same time,
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and then take the difference in quotations between the same two stocks at present. Taking the Metropolitan stocks as a good example, we find that in 1896 they stood 161 above Canadian and in 1908 only 2f points. My hon. friends will therefore see that the mere fact that we had been paying a somewhat higher rate for our money does not indicate any diminution of Canadian credit.
Herbert Brown Ames: Has the hon. gentleman the figures with reference to our 3 per cents?


William Stevens Fielding: I have not, but I have no doubt that, comparing our 3 per cents with the Metropolitan 3 per cents the result will be the samp. I had these quotations made in all good faith. If the others show something different, I shall be happy at a later date to call attention to them, but I am advised that they will show substantially the same results.
Our net debt on the 31st March, 1908, was $277,960,859.84. I have stated that the increase in 1909 would be $46,000,000. Our net debt, on the 31st March, 1909, taking our estimates as near as we can make them, will be in the neighbourhood of $323,960,859.84. Our net increase since 30th June, 1896, amounts to $65,463,427.07, and the average increase per year in 12J years amounts to $5,134,386.43. Of this net increase the National Transcontinental Railway is responsible for $52,574,131.71. Excluding that amount, the net increase of debt during the 12| years would be $12,889,295.36, or an average per year of $1,010,925.12. So that 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.
As to the burden of debt, 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 public debt. It cannot be expected that the development of a new country like ours can be carried on without any additions to our public debt. On a number of ocasions, when I had the pleasure of submitting statements showing reductions of the public debt I was always careful to point out that the circumstances were exceptional, and that we must expect from year to year some additions to the public debt. But if we are to consider the public debt as a burden, we must take into account the number of burden bearers. We do not take a census every year, but our census office makes estimates from year to year, which I believe are in the main substantially correct. Take the returns of the last official census, making allowance for what experience has shown


William Stevens Fielding: to be the natural increase of population, taking careful account of the immigrants coming into the country, we obtain fairly correct annual statements of our population. I have had such a statement prepared, and am glad to be able to say that, for the first time in our history, we are able to claim a population of more than 7,000,000 souls. I submit here a statement showing the debt of Canada for every year since 1891 and also its population, the net debt each year, and the net debt per capita. I think it will be admitted that if you are to measure the burden of the debt, you must consider the number of burden
bearers.	What do	we find?	We	findthat	in	1896, 13	years ago,	the	netdebt	of	Canada was $50.82	per	headof	our	population,	and on	the	31st
March just passed, according to the returns of the Census 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, having 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.
I submit the figures for each year:
Net debt per capita.
			Net debt	
Tear.	Population. Net debt			per
			capita.	
1891.. ..	.. .. 4,844,366	$237,809,030	51	49 091892.. ..	.. .. 4,889,266	241,131,434	44	49 151893.. ..	.. .. 4,935,748	241,681,039	61	48-961894.. ..	.. .. 4,983,903	246,183,029	48	49 -401895.. ..	.. .. 5,003,839	253,074,927	09	50-571S96.. ..	.. .. 5,086,061	258,497,432	77	50-821897.. ..	.. .. 5,14*,508	261,538,596	46	50-871898.. ..	.. .. 5,199,267	263,956,398	91	50-7-71899.. ..	.. .. 5,259,491	266,273,446	60	50-621900.. ..	.... 5,322,348	265,493,806	89	49 -881901.. ..	.. .. 5,413,370	268,480,003	69	49-591902.. ..	.. .. 5,537,500	2711829,089	62	49-081903.. ..	.. .. 5,712,190	261,606,988	87	45:791904.. ..	.. .. 5.890,066	260,867,718	60	44:291905.. ..	.. .. 6,091,136	266,224,166	60	43:701906.. ..	.. .. 6,323,557	267,042,977	75	42-231907.. ..	.. .. 6,655,904	263,671,859	96	39-611908.. ..	.. .. 6,863,500	277,960,859	84	40 -491909.. ..	.. .. 7,085,219	*323,960,859	84	45-72
* Estimated.
There is another view of the matter. My hon. friend from North Toronto (Mr. Foster), in one of his speeches on the budget, said that one of the ways of judging the burden of the debt was to take the amount of interest which had to be paid. That is a fair statement, with this proviso, that you must consider the number of burden bearers. In 1896, the total amount of interest on the public debt was $10,502,429.90,

and the amount received as 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 had to pay in 1896 on the debt of Canada, therefore, was $1.79 per head. Taking the same computation for the year ending 31st March last, we 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, making the net interest paid for the year, when the accounts are finally closed, an-proximately $9,467,949.83, or $1.33 per head for the year, as compared with , $1.79 per head for the year 1896.
I think, Sir, that these figures, in which we take into account not only the increasing 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, while, in the development of our country, 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 charges are materially less of a burden to-day than they were thirteen 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- seme practically of no value at all. No such asset has been added to the list in recent years; such assets of that kind as appear have been there a long time; it has been thought well not to make changes, but, as a matter of convenience, to allow them to remain. Once in a long period of years the statement is revised by the Committee on Public Accounts. I am glad to know that 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 out-items placed there many years ago, before I had anything to do with the finances-will not be large, in fact that it will be very small indeed when compared with the total amount of our -assets. I am very glad to agree in the view that that statement should be revised and that 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 that such was not our intention, that this 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. But I stated also that I would be glad to provide for the transfer of any of these deposits into stock of a more permanent character. I repeat that now. If it be agreeable to any of the savings bank depositors, we shali be glad to issue new
stock for amounts of $50 or upwards to bear 3i per cent and redeemable in 1925. Therefore, if it be found that any of the depositors in the savings banks wish to take up a more permanent investment, they can have their deposits transferred into savings bank stock at the rate I have named.


Mr. J. D. REID.: At par?


William Stevens Fielding: Yes. Frankly, I do not expect that there will be a large demand for this stock; I think the savings bank depositors attach more importance to the convenience and security of the savings banks than to the rate of interest.


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


William Stevens 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 regulation than in the way of changes which would affect the finances of the country. For some years, considerable attention has been given to the cultivation of the beet in Canada with a view to the production from it of refined sugar. I 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 nas been established that the beets grown in Canada are well suited for the manufacture of sugar. The question has come, whether with the encouragement usually given to-other industries in Canada, we can make that industry permanently successful from an economical point of view. The advocates of the industry say that this can be done, but they have asked that special aid be given them in the initial stages of their enterprise. So, for several years, we granted them concessions in the way of free admission of machinery. Several years ago we granted another concession in the way of importation of foreign sugar on the same terms as preferential sugar from the West Indies. In other countries, the beet industry is so carried on that they produce not only refined sugar, as is done in Canada, but also an intermediate grade known as raw sugar, which can be kept in store, handled and shipped, as it is being shipped, to all parts of the world. We have not yet reached that stage in Canada; we carry the manufacture from the beet-root itself quickly into the refined article. And I suppose it is admitted that at Wallaceburg they are turning out a fine grade of sugar as a result of that operation. But this enables them to run their factory only for a short time. In order that they may run their factory for a longer term, and so run it more economically, they ask to be permitted to import foreign sugar at the preferential rate. It is not convenient for them to use the West India sugar, and they thought it a

hardship, when they imported a foreign sugar, to be obliged to pay-the higher rate. So, two years ago, we agreed to allow them for three years the privilege of bringing in foreign sugar at the same rate as if it were British grown sugar. The limitation was that they should be allowed to import two tons of foreign sugar for every ton of refined sugar they produced from Canadian beet. That concession remains in our tariff, but it expires at the end of the current year. The promoters of the industry, not only the refiners, but a large connection including farmers, dealers and others, who are interested in the beet industry, have asked 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 further 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 sugaT 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 refined sugar they produce from Canadian beets.


Mr. HUGHES.: The minister means two tons of foreign Taw sugar?


William Stevens Fielding: Surely.


Samuel Hughes: Raw beet sugar?


William Stevens Fielding: They prefer the raw beet sugar, but we could not limit it to that. So much with regard to the beet industry, which, as I have said, enlists the interest and sympathy of a large number of people, and to which we have every desire to give a helping hand in these ways at the beginning. We trust that in a short time it will be able to be conducted without these special aids, and, that with the measure of protection given to other branches oi industry in Canada, it will be permanently and profitably established.
Another phase of the sugar question has given us some perplexity. The duties on British-grown raw sugar are based on the assumption that the Canadian refiner-I speak now not of the beet sugar refiner, but of those who refine sugar in all forms, the eastern refiners and those on the Pacific coast-will import their raw sugar under the preferential tariff, paying only the preferential rates, and the duty on the British refined sugar is adjusted accordingly, so that our refineries may have what is deemed a moderate rate of protection. The, refiners have represented to us that they cannot get a sufficient quantity of British sugar to enable them to import it under the preferential tariff, and to avail themselves of what seemed to be the intention of the tariff in that respect. They say there are two difficulties in the way. In the first place, they are not able at times to obtain a suf-Mr. FIELDING.
ficient quantity of West Indian sugar-and when we say British-grown sugar it properly means 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. They say that there is a combination amongst the West Indian planters, among the growers of sugar in the West Indies, through their agents and brokers in London, whereby the Canadian refiner is not permitted to buy that West Indian sugar upon the same terms as it is purchased by the British refiner. This question of who shall profit by the preference has been much debated. At one time the West India merchants complained that the refiners in Canada managed to take the whole preference to themselves. Now the accusation is the other way. Our Canadian refiners say that this combination so manages that it will only sell West India sugar at a price which makes the thing of really no more advantage to them than if they were to buy the foreign 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 Indies, through a broker and agent in London, ascertain just at what price sugar can find admission into the Canadian market, and they only sell at that price, with the net 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.


Mr. HAGGART.: Have you confirmed that by any inquiry ?


William Stevens Fielding: We have not had any official inquiry, and it is well to hear both sides of the story. I am bound to say that the Tefiners, who are generally of excellent standing, and who I am sure mean to act in good faith, have made a strong impression upon my mind in their presentation of the case. However, we have come to the conclusion to suggest a remedy 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 moderate degree. We propose to allow the refiners, other than those engaged in the beet industry-we have already dealt with them -we propose to allow the refiners the privilege of importing foreign sugar at the preferential rate, to the extent, however, of only one-fifth of the quantity of the refined sugar which they produce.


An hon. MEMBER.: Is that raw sugar?


William Stevens Fielding: All this has reference to raw sugar. The effect of that would be this: If there exists the combination which is alleged, then the Tefiner will have access to the foreign market at the same rate to the extent of a moderate quantity. I think the effect of it will be that probably, if that combine exists, it will not continue. When we adopted the West India preference we certainly felt that by lowering the duties on the products of any other country we were doing a friendly act and encouraging trade with that country. But all good trade must profit both the seller and the buyer. It certainly was not contemplated that either the one or the other should use this preference as an instrument of oppression. However, that is a matter which demands careful inquiry. If we were to allow the introduction of a very large amount of foreign sugar at the preferential rate, we should probably strike down the preference, and that we do not wish to do. But we think, to the extent of this moderate quantity, we will be assisting the refiner, and we will be giving at the same time a general intimation to the West India grower that he must be prepared to. give and take, and not use the preference as a means of treating our Canadian refiner in a different manner than he would treat the refiner in any other country.
We have been asked to join a commission of inquiry to be appointed by the British government for the purpose of inquiring into the trade relations between Canada and the West Indies, and we have intimated our concurrence. The matter has been discussed for some time. It may be remembered that a year or two ago a conference was held in the Island of Barbados, a conference which was originally designed to be merely an intercolonial conference, but which later on opened its doors to Canada. We sent down two gentleman, Mr. Parmelee, late Deputy Minister of Trade and Commerce, and Mr. A. E. Jones, of Halifax, an experienced West India merchant, who attended the conference, and some progress was made in the direction of better trade relations. The colony of Barbados, following that movement, adopted a preferential tariff whereby Canada would receive a preference on a number of articles provided that Canada in return would give, not only the existing preference, but some further preference. We felt that it was difficult to deal with one island alone, and therefore we did not respond to the proposals of the government of Barbados. But we have intimated to the Imperial authorities, who are responsible for the management of these Crown [DOT]colonies, that if they desire to go into the question more fully, we are prepared to
join in a general inquiry into the trade relations between Canada and the West Indies. Now if that commission be appointed. Canada will be represented on it. At the present moment I am not quite sure- although some communication has taken place-as to who should represent Canada. At all events, Canada will be represented on the commission, and we should have a careful inquiry. This question of combine wilt be taken up, and if it be established that such a combine exists, we hope and believe that our friends in the West Indies will realize that that is not the proper response to the efforts we have made to encourage trade with that country. We certainly did seek to encourage trade with the West Indies, we certainly did feel that in giving a better market to West India sugar we were giving, in a modest way, some helping hand to the West Indies people; but we certainly did think at the same time that our own consumers would profit by the lower rates of duty that were to be established. So as a temporary means of dealing with this matter, and pending that further inquiry to which I have referred, we! propose to permit eastern refiners, all thet refiners except those engaged in the beet root industry, to import at the preferential rate foreign raw sugar to the extent of one-fifth in weight of the quantity of refined sugar which they produce in their factories. Our expectation is that they will to some extent meet the difficulty of the moment, pending that further inquiry which we hope will take place during the year.


Herbert Brown Ames: Is it proposed to apply the remedy before the inquiry or after?


William Stevens Fielding: We think the evidence is sufficient to justify us in going this far; and if the inquiry thoroughly satisfies us, we will probably have to apply a more drastic remedy than this. I think the information we have is sufficient to justify us in granting this measure of relief to refiners here. But we do not propose to grant it to them for any fixed period; it is to be granted indefinitely, with a distinct understanding that parliament gives them no vested right in it, and that we may, after the inquiry, withdraw it at any moment.


Herbert Brown Ames: By vote of parliament?


William Stevens Fielding: Only by vote of parliament. We think it should be made definite in the tariff itself, and not be dependent upon mere order in council.
I have said that we do not propose any other tariff changes. In saying this, it is not necessary to contend that our tariff is perfect. I do not suppose that we should ever have a tariff instrument in Canada that will not leave room for much debate,


George Eulas Foster: Mr. Speaker, I must say that I miss a great deal in the tone and manner of my friend of ancient days, the Minister of Finance, using the words ' ancient days ' comparatively, and having reference to former budget speeches which he has made in this House. In fact the whole speech had a remarkably soporific effect on me and I am not sure that I shall be immediately able to throw off the influence. The hon. gentleman evidently felt that there were some points to be avoided, and it was almost painful to see the great 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. Why he did it I do not know if it were not in the exercise of that ingenuity and finesse of which the Minister of Finance 145
fMr. Fielding) is a master. We have not heard much to-day about the fine facility with which the Minister of Finance so 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 adding to the public debt. To-day he has had to acknowledge that there is a considerable addition to the public debt. We have not heard so much to-day about the surpluses except in a particular way. The Finance Minister was able by his peculiar arithmetic to figure out that on the 12 months of the year there would be a surplus of $1,500,000. That evoked a cheer, not a very hearty one, from my hon. friends opposite. But he still was able to evoke a cheer. One simple consideration will show the importance of maintaining a proper continuity in the system of bookkeeping employed by the government. If the Finance Minister had charged, as the Liberal-Conservatives did, the bounties to revenue 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 surplus of $1,500,000, but he would have had to announce a deficit of $750,000. That would not have evoked any cheer, 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


Some hon. MEMBERS: Order.


George Eulas Foster: Yes, we will let that sink into the mind

by juggling and falsifying the record in so far that he adopted a system of bookkeeping for which he could not give any substantial reason and under which it would not be possible to give a fair comparative statement of expenditures.
So, that little episode of to-day where the surplus is so small that it is absolutely wiped out by an item in the accounts 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 million dollars and odd have been credited to his surplus in the books of this country which could only be credited there because he had changed the system of accounting 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 it could have been avoided in the first place by the government not undertaking to build the Quebec and Moncton section



of the Grand Trunk Pacific, and he gave as a reason why the government must build that section that its construction was most earnestly demanded by the people of the locality. I could not help but think of the argument used by the Prime Minister 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 Aylesworth ditch because there was a very urgent demand from the reeves and the wardens and the councillors and a number of the inhabitants in the vicinity of Holland landing and Newmarket. To-day, the Finance Minister tells us that the Quebec-Moncton section of the Grand Trunk Pacific must be built because it was urgently demanded by the people of the locality. The cardinal defect in that argument is, that these gentlemen opposite seem to think that they are here for no other purpose than to give adhesion to the bequests of individuals in scattered localities, and that because somebody comes and urgently and repeatedly asks that money be spent it is a sufficient justification for the expenditure of large sums.
The other day the Minister of Eailways declared that there was no hope for the Intercolonial Bailway unless it either were linked up with a western road, or that it built and acquired branches, but his chief point was that if it were to be successful it must be linked up with some great western railway. And yet the Minister of Finance declares to-day that a parallel line with the Intercolonial must be built, the only result of which will be to make it a competitor for the present scant freight and passenger business of the government railway. I think sir, that a far better thing to have done would have been to have lessened the grades on the Intercolonial, straightened its curves, and shortened its distances, and as the promoters of the Grand Trunk Pacific scheme represented to the Prime Minister and his government when the undertaking was first mooted, link the Intercolonial system 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. gentleman; that was a proposition which under an agreement between the government and the Grand Trunk would have secured a western outlet for the Intercolonial and have avoided that immense expenditure of money not onlv for the road between Quebec and Moncton but also for the road from Quebec to the head of the lakes. That would have sufficed for the present at least, and so we would not have bad this burden, this veritable old-man-of-the-sea which is crushing down upon Canada to-day. We would not have had to Mi. FOSTER.
raise this immense amount of money in order to build a road long before its time and long before the necessity arose for our undertaking huge financial obligations in connection with it. The Minister of Finance said that we might have given 25,000,000 acres of land as in the case of the Canadian Pacific Eailway, but the main objection in his mind to giving land was because he said it was a cardinal article in the creed of the Liberal party that the land must be reserved for the settler. Well, Mr. Speaker, that was particularly rich coming from this government which from 1896 until 1907-8, to come no further down, seemed to make it their chief object in administrative life to get rid of blocks of lande as fast as they could, and in no case, if they could possibly avoid it. let them go to the settler at first hand. The Minister of Finance was optimistio in thinking that the eastern section of the Grand Trunk Pacific would be a good asset, that it would in a very short tim,e cease to become a burden and pay us back the interest upon the whole investment. The hon. gentleman must be optimistic indeed if he believes that within any reasonably short period of years there will be any appreciable income from that railway which will ease the burden of capital expenditure which the people have to bear. Anyway, at present it looks that the money which we put into the eastern section will cost this country an even four per cent or very close to it, and even if the Grand Trunk Pacific Company takes it over and operates it it only has to pay three per cent, so 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 carefully 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, and he handed out to us the consoling reflection that we have not suffered as badly as the United States of America. Well, it was ever thus; when the imports were going up and the exports were advancing it was the policy and power of the Liberal government that caused prosperity. It was not of course because of world-wide conditions, and we perceived from the Liberal benches in those days no disposition at all to make comparisons with the general prosperity prevailing in the outside world. But when imports come down and exports are diminishing, then it is not the fault of the government or its policy, but the fault of world-wide conditions. The same spirit seems to have got hold of my hon. friend in this connection as in connection with the bounty business and the surplus. He changes according to the necessities of the case and the further neces-

sity* of making good his own position as far as he can. He is hopeful with reference to 1910; he gave a wonderfully precise forecast for that year. Here we are already in the year 1909-10, and yet the only forecast the Finance Minister can give us is that he hopes there will be a reasonable percentage of increases in the revenue over that of last year, while with reference to the expenditure he did not even hazard a guess as to what it would be. Former finance ministers have been a little more daring than that. 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 their forecast to the test. My hon. friend did not seem disposed to do that. He says that we must not put on greater taxation, but must 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 the House, could not fail to ask ourselves why he as Finance Minister, in 1907, when every third-rate man in a bank, not to speak of the managers and directors of banks, knew that the stress of weather was coming on, felt the forebodings and set themselves by every possible means to strengthen themselves financially for the blast, took no precaution at all. He crowded on all sail, and in that, the worst year in our experience for fifteen years, authorized and carried out his largest, most lavish and most wasteful expenditures. It would have seemed befitting in a Finance Minister who was careful and prudent to have made his provision when the danger was coming, to have drawn in his sail when the storm was about to burst. My-hon. friend did not do that-why? Because sound principles of finance were against such a course? By no means. All sound principles of finance and every consideration of good business were in favour of that course. Our -hon. friends opposite were not in favour of it-why? Because they lacked the sound business sense, or because they were making preparations for a general election? If the former, it is sad; if the latter, I venture to think it is infinitely more sad; because, of all things, for a government and its Finance Minister to imperil the credit of a country by failing to take the proper precautions when they see a difficulty approaching, in order to help their party fortunes, that is about the limit, it seems to me, and ought to be the strongest possible condemnation of any government or any Finance Minister. And now he appeals to the members to be patient and to be self-sacrificing. Let me add to that appeal by asking the Finance Minister, himself to be patient and self-sacrificing. Look at the records of Shelburne and Queens, 145J	:	]
and compare the expenditures on all sorts of imaginable things in those two counties with the expenditures in the adjoining counties of larger coastal extent and greater importance. Run your eye over them and see the lavish and un-self-sacrificing way in which he provided for Queens and Shelburne, even in the teeth of the storm that burst upon him in 1907. When he appeals to the back benches to be self-sacrificing and to be merciful, maybe some of them will pluck up courage to say to the, Finance Minister that it would be well for him to take a lesson out of the same book. For of what avail can a chancellor of the exchequer be as a watch on the treasury if he will not himself be self-sacrificing and self-denving? No chancellor of the exchequer in any country can successfully do what the country wishes him to do, and what the country feels that he ought to do, unless he denies himself even to the limit in order that he may stand well as the sleepless watchdog of the treasury, and prevent it from being raided by his supporters in parliament and by friends outside. But the Finance Minister was not satisfied with the appeal which he made to his followers in timid fashion, but he said that there was another reason-we must maintain our credit. But the credit of this country would have been far better maintained, and my hon. friend would have received a far better reception in Great 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 six years, in times of heavy surpluses and abounding prosperity-to have strengthened the credit of the country by reducing the figures of the public debt and to have laid up in that way a reserve for the hard days. If he had done that, as he could 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 country. For, let him spend as much time as he pleases in an endeavour to show to the contrary, it is a fact that under his management the credit of Canada has been strained. I shall deal with that more fully later.
My hon. friend, finding no men to engage in the combat on the floor of the House, must perforce spend a half hour of his time in dragging in from the outside a newspaper, setting it up as a contestant, and buffeting it as well as he could with his argument. He declared that some bold and shameless Conservative newspaper, in regard to the surplus and the difference between consolidated fund expenditure and capital expenditure, was accusing him of juggling with and falsifying the figures, and he undertook a wordy

warfare in due form with the newspaper. Well, it seemed to me to be unnecessary, and to be, if I may be allowed to say so, rather outside of the province of a Finance Minister to drag in an outside contestant in that way, and have a long discussion with him about something that did not amount to anything anyway. The Finance Minister will have enough to do if he takes up the contests that are waged with him in this House, on this and other matters.
My hon. friend went into a long laboured discussion and displayed figures to show that all the Finance Ministers in Canada, from 1867 to his time, had kept the accounts in these two ways. That is they had a consolidated fund account and also a icapital account. Then he went on to demolish really the grounds for any difference between the two by saying that all governments-his own as well as others-had indiscriminately paid capital sums from revenue and revenue items from capital, so that therefore there is really no generic difference between the two in so far as application goes. The very fact that the hon. gentleman himself does not keep the lines between capital expenditure 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 followed in all the great countries of the 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 Zealand, and he ventured the statement that there were differences in the conditions in different countries. But he was not sufficiently sure of himself to state whether the system followed in Canada is followed in Great Britain, the United States, Australia, or New Zealand. If it be not the one adopted in Great Britain and the United States, we have in these two countries two very good examples. If it be not the one adopted in New Zealand and A rs-tralia, ^ we have there two examples, with conditions the same as ours-a sparse 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.


Sir WILFRID LAURIER.: Tardy repentance.


George Eulas Foster: My right hon. friend would do very well sometimes if he would only repent, but the trouble with him is that when he sees he is wrong, he does not repent. I am surprised that he should interject a remark which would lead one to suppose that he took the ground that no one should Mr. FOSTER.
learn anything and consequently should not change, but my hon. friend cannot surely mean that. His interruption was no doubt simply a pleasantry interpolated and without very much point, so far as any argument is 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 dividing the amount into the sum of our debt. So far as that goes, the argument is good, but the argument does not go a very long way. It may be true that, in proportion as our population increases, our per capita debt decreases. So it does, and if 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 individual in proportion as the population increases. But there is another point about which my hon friend was careful not to say anything, and it is a vital point. The vital point is what you take out of the individual 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 hon. friend took $11 per capita. That is the vital point. Our people paid last year 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 1896, if you want to show the difference. Take the population in 1896 and what it is to-day, and you find that in 1896 we paid $5.46 in taxation per head whereas to-day we pay $11 per head.
As regards what my hon. 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.
[Stage Direction]
On the order:
Third reading of Bill (No. 77) respecting a patent of the Submarine Company.-Mr. Proulx.
George Eulas Foster: I do not see the promoter of the Bill (Mr. Proulx) or the Minister of Agriculture (Mr. Fisher) here.


William Stevens Fielding: I am not advised as respects this Bill. I have no doubt it has received the attention of some other min-

ister. I observe that it has been reported by the Private Bills Committee.


George Eulas Foster: Neither the minister nor the promoter is here.


Mr. SPEAKER.: Stand.


ONTARIO AND MICHIGAN POWER COMPANY.
[Stage Direction]
House again in committee on Bill (No. 34) to incorporate the Ontario and Michigan Power Company.-Mr. Conmee.
Mr. PERLEY.: In the absence of the hon. member for Thunder Bay and Rainy River (Mr. Conmee) this Bill ought not to be gone on with.


George Eulas Foster: I move that the committee rise, report progress and ask leave to sit again.


[Stage Direction]
Motion agreed to, and progress reported.

[Stage Direction]
Mt. DUBEAU moved that the amendments made by the Senate to Bill (No. 38) respecting the Canadian Northern Quebec Railway Company be read and agreed to.
Thomas Simpson Sproule: What are the amendments made by the Senate ?


Mr. DUBEAU.: The reason why this clause has been added by the Senate is that the branch line there referred to is a fraction of a mile more than six miles in length. It is to reach a large mill on the Montmorency river. Had it been less than: six miles long, it could have been built under the general powers conferred by the Railway Act, but as it is over six miles long-nearly seven miles-the consent of parliament has to be gained.


Thomas Simpson Sproule: Was notice given of this in the notice of the Bill?


Joseph Adélard Dubeau: Certainly, notice has been given. As to the second clause, that relates to bonding powers. Owing to the increased cost of railway construction, rolling stock and right of way, it has been found that the present bonding powers of the company, $25,000 per mile, are insufficient, and so the company is- asking an increase to $30,000 a mile. The Canadian Northern Railway Company is an amalgamation of different companies, including the Chateauguay and Northern. The authorized bonding powers of the Chateauguay and Northern are $30,000 per mile, but the road cost more than that. This company is simply asking for a bonding power of $5,000 per mile more than it now has.


Thomas Simpson Sproule: I think the hon. member (Mr. Dubeau) misunderstood me. I did not ask as to the provisions of the Bill, but as to the Senate's amendments to the Bill.


Joseph Adélard Dubeau: I am trying to explain the reason for these changes. The reason
of the first is that the Railway Act does not give power to construct a branch that is more than six miles in length-


Thomas Simpson Sproule: Yes; and what I asked was whether notice had been given of this?


Joseph Adélard Dubeau: I am sure that notice has been given, because the Railway Committee of the Senate has declared that it was satisfied with what was done. I suppose the hon. member (Mr. Sproule) would not ask for more than was asked for by the Railway Committee of the Senate.


Mr. PRICE.: I object to this. Notice was given of a Bill containing only two clauses. It passed this House and was referred to the Senate, and a committee of the Senate added two more clauses. One provides that the company may construct a certain railway line and the other gives them further bonding privileges.


Mr. TALBOT.: Do I understand the hon. gentleman for Quebec West to say that he objects to the Bill now because two clauses have been added to it 'by the Railway Committee of the Senate, and that insufficient notice has been given?


William Price: Yes.


Onésiphore Ernest Talbot: How can a notice of amendments be given, either by a committee of this House or by a committee of the Senate? We cannot forsee anything of that kind. Why should we ask it to be done?


William Price: I submit that these amendments cannot be passed without first being referred to the Standing Orders Committee of this House.


James Kirkpatrick Kerr: Does the hon. gentleman propose an amendment?


Mr. HENDERSON.: I do not know that he is proposing an amendment. I understand the hon. gentleman objects to the Bill in toto.


Robert Laird Borden: The hon. gentleman raises the point that no amendments ought to be adopted by this House until the House is satisfied by reference to the committee that the notice as given does cover the amendment.


William Price: I move that the order be now discharged, and that the said Bill be referred back to the Committee on Standing Orders.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Bill (No. 139) respecting the Ottawa Fire Insurance Company, and to change its name to Ottawa Assurance Company.-Mr Perley.

[Stage Direction]
House resumed debate on motion of Mr. Fielding, that the House go into Committee to consider of the Ways and Means for raising a Supply to be granted to His Majesty.
["The hon. gentleman who has just\n\nspoken (Mr. Foster) at the conclusion of his speech-which I must characterize as a comparatively moderate speech for him- paid certain compliments to my hon. friend the Minister of Finance (Mr. Fielding). Let me at the outset suggest to my hon. friend (Mr. Foster) and the House, that, in my judgment, it has fallen to the lot of few men, in this or any other country, to have occupied the position of Finance Minister for thirteen years with such credit to himself and his country as the present Minister of Finance has done. And let me further say that I doubt if in any country any Minister of Finance ever had the pleasure of presenting to his people so many splendid financial annual statements as my hon. friend has had the satisfaction of doing during his thirteen year's term of office. And I submit that no one who has heard those financial statements from year to year, as I have done, couched in the clear, cheery and eloquent language and reasoning of which my hon. friend is a past master, could fail to see in them the best possible evidence of the progress and prosperity of this country during the term in which this government has held the reins of power, and at the same time the best possible proof of the sound fiscal policy of the present government. I can quite well understand how my hon. friend who has just taken his seat (Mr. Foster) finds himself considerably handicapped in his attempt to criticise our present Minister of Finance. There is scarcely a fiscal irregularity of which my hon. friend has not been guilty, there is scarcely a fiscal difficulty which he has not gone through, and all I can say is that during his term of office, that term was marked by so many deficits, that he should be the last man to cavil at the fiscal administration of the present government. He remarked that he missed somewhat the tone of hilarity in the present budget speech which the Minister of Finance displayed on former similar occasions. Surely, while others might make a comment of that kind, it comes with ill-grace from the ex-Minister of Finance (Mr. Foster) who, during the last years of his term, became quite an adept in producing deficits from year to year. He said that this paltry surplus of $1,500,000 in our financial statement for the closing year evoked a cheer from the government benches. Well, during the last three years during which my hon. friend (Mr. Foster) held office as Finance Minister of the late government, what was the condition of affairs which he presented to the country? In 1893-4 we had a deficit of $1,200,000; in 1894-5 our deficit was $4,100,000; and in 1895-6, the deficit was $350,000. So that during the last three years of his admirable management of the financial affairs of this country, the situation was such that we had deficits 146\tI i ! 1\t'\naggregating $5,700,000. Surely, under these circumstances much of the criticisms to which we have listened from the hon. gentleman to-night, while they might come with some grace from some others, come with rather bad grace from him.\nMy hon. friend spoke of the Quebec bridge. Can he have forgotten altogether the Curran bridge? And when he spoke of the Newmarket canal, to which he so characteristically referred as the Ayles-worth canal, had we not good reasons to recollect another canal which, if I were disposed to follow the example set by the hon. gentleman, I would call the Haggart ditch.\nHe talked about our increasing public debt, but he failed to recollect that in the eighteen years of Conservative rule, our debt was increased $118,000,000. My hon. friend talked about this country as a poor country and deplored our piling up the public debt. Well, Mr. Speaker, I do not accept that view of this country. While I am one of those who believe that the government should do as they are doing, while I believe that they should curtail our expenditures, so as to suit the existing circumstances and conditions, now happily passing, at the same time I look forward to the future in the most optimistic spirit. I look to a great improvement in our condition. With our magnificent heritage, our splendid resources and rapidly increasing population, I believe that the present financial difficulties will very soon be a thing of the past, and Canada will be again in as good a position financially as that which she occupied a year or two ago. But if we are spending money too rapidly, what are we to think of my hon. friend who made in Prince Edward Island this statement, which I find published in the ' Examiner,' a Conservative paper of that province:\nFor myself, I stand ready to implement our bargain with Prince Edward Island by the construction of a tunnel.\nWhy, Mr. Speaker, that would mean an expenditure of two or three million dollars a year, during some years. And what would our expenditure amount to if we began to give to Britain one or two Dreadnoughts, as my hon. friend, in his eloquent speech in this House a few days ago, suggested we should do?\nHe instituted a comparison between the request of the people for a local work such as the Newmarket canal and the building of the Grand Trunk Pacific. We all know that these local works are started by the petition of a few people in the locality; and in this particular connection, while he seemed to pay special attention to the people of the maritime provinces, he failed entirely to recollect that while in the one", "\n\ncase the matter was a purely local one, so far as the eastern section of the Grand Trunk Pacific is concerned, that is a work deliberately entered on by this government, which in 1904 obtained the ratification of the entire people, and was re-endorsed by the election returns in October, 1908. Then my hon. friend-and in this I think he was particularly unfortunate-spoke of ' the land for the settler,' and referred in the most sarcastic way to ' the land for the settler ' under this government. My hon. friend was very rash in many of his statements and suggestions, but in none more than in this. Let us look at the situation, let us make a comparison of the government of which he was a member and the present government on this point. I find, from a return brought down by the Minister of the Interior a few days ago, that under Conservative rule, the railway grants of land amounted to 31,000,000 acres; the total alienations of land other than to settlers, 46,000,000; and the lands for the settler to 7,900,000 acres. On the other hand, under Liberal rule, the railway grants were not thirty-one millions of acres- they were not one acre, and the alienations of lands to other than settlers amount to 7,921,000 acres. But let us come to the settler-and it was as to this that my hon. friend was particularly sarcastic in his reference to this government. We find that, while in the eighteen years of Conservative rule, only 7,900,000 acres of land went to the settler, the Liberal government has in twelve years handed over 23,590,000 acres to the settler. Could anything show more clearly the difference of policy between one government and the other in reference to this very matter which has been so important in the development of the west and of the country at large?\nMy hon. friend also stated that the credit of Canada was strained. In my judgment, nothing could have been better for the credit of Canada than the annual statements which have been put forward by this government. Year after year it was known and advertised to all the world that Canada was going ahead financially in an utterly unprecedented way. Year after year it was proclaimed abroad that there was a large surplus of ordinary receipts over the ordinary expenditure of the country. Nothing could more authoritatively stamp with approval the credit of the country. Another fact made known to the world was that, through the enlightened immigration policy of this government, millions of people were entering Canada, and particularly the Northwest. Another thing to establish the credit of the country was the fact that, year after year, until last year, the trade of Canada was expanding more rapidly than that of any other country in the world, or at least as rapidly as any. These are pertinent facts, Mr. SUTHERLAND.\nit seems to me, to show that the credit of Canada has not been depreciated but has appreciated year after year under the management of this administration.\nThen my hon. friend (Mr. Foster) undertook to deliver something of a lecture to the Minister of Finance (Mr. Fielding) on the mode of keeping our accounts, especially in relation to charging up to capital account capital and other extraordinary expenses. He seemed to suggest that the United States and Britain, and other countries also, had a different policy in this matter from ours. I have here an article published this very month in the ' North American Review,' rwfritten by Mt. Cortelyou, ex-Secretary of the Treasury, in which he discusses the very matters in controversy between the ex-Minister of Finance (Mr. Foster), and the Minister of Finance (Mr. Fielding). I think it wise to put upon ' Hansard ' Mr. Cortelyou's views on this subject. He says:\nThe demands upon the treasury are not likely to decline. For years the average increase has been hardly less than 15 per cent per annum, and in all probability this rate will grow greater in the immediate future, as the call is met for larger expenditures, in the extension of various government activities.\nThis is very pertinent language also with reference to a young and growing country like this.\nThese disbursements, however, are not by any means wholly chargeable to the ordinary expense of carrying on the government. In this respect, the present form of daily Treasury statements is more or less misleading. It * makes no separation between the expenditures for the ordinary service of the government and those for permanent public works, like river and harbour improvements, public buildings and the Panama canal.\nHow appropriate this when we refer to the Grand Trunk Pacific, a similar great national work?\nIn this matter, our budget differs from that of many foreign countries, where expenditures for permanent improvements are provided for by specific issues of bonds, and the amounts are stated in a separate account from the report of the expenditures for the ordinary maintenance of government; while it has been the custom of this government to make most of its appropriations for permanent improvements from current revenues, thus allowing the entire burden to rest upon the present for improvements which will largely benefit the future. It is this which has brought about the present contingency", "The very fact that they are not dealing with these matters as we deal with them is given as the cause of what he proceeds to explain.\n-when the receipts are falling farther and farther below the expenditures, not for obviously transient causes, which the near future will naturally rectify, but because the growing demands which we meet, in provid-\n\ning for future needs, outstrip the results reasonably to be expected of our present sources of revenue.\nAnd what greater demand have we in this country than our transportation needs which we are seeking to meet by the construction of the Grand Trunk Pacific? Then he deals with the matter in this way:\nFor the purpose of illustration, stating our budget in the manner suggested, the account for the fiscal year which ended June SO, 1908,\nwould appear as follows:-\nNet ordinary receipts\t$601,126,118\t53Disbursements\t\n570,477,838\t81Surplus\t\n30,648,279\t72\nExtraordinary disbursements-[DOT]\nPanama canal\t\n38,093,425\t29Public buildings under Treasury Department\t\n9,341,364\t55Reclamation service\t\n11,126,042\t02Rivers and harbours\t\n30,157,649\t01Reduction of public debt.. ..\t34,356,750\t00\nThen he proceeds:\nIt may be a question whether all items which involve permanent capital improvement should be placed in this account. It may be proper, in some cases, to charge them to current revenue. But there can be no question that, when bonds are actually sold by the government to meet the cost of specific public works, like the Panama canal, such expenditures should be placed in a separate account, or the proceeds of the bonds sold should be accounted for as receipts.\nIt seems to me, in view of the reference that the hon. member made to the way of accounting in the United States, these remarks of the ex-Secretary of the Treasury are most appropriate and pertinent. But, in respect of this very question of extraordinary and capital expenditure, let us see what the hon. member's record is and that of the government to which he belonged, In 1884, the net debt of Canada stood at $181,000,000 in round figures. In 1896, it had been increased to $258,000,000, an increase of $77,000,000. What did the hon. member and those associated with him do during that time in connection with capital and extraordinary expenditure? Did they pay these in large part out of current receipts? During that period the Conservative government expended on capital and special account $94,000,000. The public debt was increased by $77,000,000. That is to say all that extraordinary expenditure of $94,000,000 except $17,000,000 was added to the public debt. That is to say, less than 20 per cent of the amount which they spent on extraordinary and capital account was paid out of revenue during that period, and 80 per cent went to increase the public debt. What is the record of the present government? We spent in twelve and three-quarter years, on capital and extraordinary expenditure, the sum of $212,000,000; we have increased the debt, up to the 31st of March, by $65,000,000; the difference is $146,000,000. We provided, not 20 per cent, but 69 per 1464\ncent of that capital and extraordinary expenditure out -of current receipts, and only added to the public debt about 31 per cent. Yet my hon. friend coolly says: ' Why does not this government lay aside money in order to meet this debt? ' Why did not my hon. friend practise a little of the preaching with which he favours this House to-night?\nThen the hon. gentleman speaks of the rate of 'the debt per head and the Tate of taxation. The Minister of Finance, in his admirable budget speech this afternoon, gave figures to show that when this government came into power the debt per head of the country amounted to $50, and that on the 31st of March, having regard to the estimate of population which he gave, the net debt amounted to $45 per head; that is to say, it was $5 per head less than was the debt at the time the government came into power. And I venture to predict, although that is a very unsafe thing to do in financial as well as other matters, that if the influx of population, that is already beginning to get back to the normal, keeps on as it is now coming in from the United States, in the time to come, when this government shall have been 18 years in power, the same period the former government was in power, the net debt of Canada, notwithstanding the enormous amount expended on capital and extraordinary expenditure, will be less than $50 per head of the population.\nI now desire for a few moments to speak about the financial stringency. My hon. friend anticipated me a little in quoting from a speech made by Mr. E. R. Wood at the annual meeting of the Dominion Securities Corporation, on the 11th January, 1909. But while he quoted one part of that address, which I also intended to quote, he left unquoted other parts of it which I will mention, in order to show that we need not be apprehensive about the condition of this country, inasmuch as every indication shows that the country is rapidly regaining its financial position, perhaps more rapidly than any other country. Mr. Wood says:\nSpeaking generally, the year just closed has witnessed a wonderfully rapid advance in the value of securities, due largely to a quick return to easy money conditions.\nI think perhaps I should read something more from the pamphlet in order to dispel an impression which might have been left on the House by the member for North Toronto. He made it appear that these large sales of bonds took place on account, apparently, of the extravagance of the government and that sort of thing. But Mr. Wood plainly points out with reference to many of these bonds that money was not available except at ruinous rates, and issues that would have been made had normal conditions prevailed, were held over for more favourable markets. That was the", "reason among others why there was such a large aggregation of bonds, sold in 1908. But he also says this:\nBut even allowing for the result of the stagnation of 1907 and the issues that were held back for a more favourable market, the *volume of transactions during the past year\nlias been phenomenally large, greatly exceed-'ng the record for 1905, the year of the Grand Trunk Pacific and other issues.\nThen he gives the following classified list of the securities sold, with a comparative statement covering four previous years:\n-\t1908.\t1907.\t1906.\t1905.\t1904.Government bonds\t\nMunicipal bonds\t$ 77,598,500 47,433,911 71,325,000\t$ 9,274,000 14,430,540 58,931,200\t8 9,206,000 9,087,008 35,694,000\t$ 346,087 9,031,160 125,497,284\t$ 11,146,000 13,759,247 9,344,000\nTotals...., \t\t196,357,411\t82,635,740\t53,987,531\t134,874,531\t34,249,247\n_ These figures show the marvellous way in which the financial credit of the country is recuperating, and the financial needs of the country are being met. But he points out another fact which it is important for us to keep in mind. The banks and other institutions of that sort furnish us with much of the money that we require fox our\nevery day business; but the money which we require for other purposes, foT national growth and development, must come from the outside for a good many years yet. He gives the following table, showing the amounts sold respectively in the Canadian, British and United States markets in 1908:\n\tCanada.\tGreat Britain.\tUnited States.\n\t8 3,098,500 17,977,390 3,059,250\t8 74,500,000 25,083,271 65,871,750\t\nMunicipal Bonds\t\t\t\t$4,372,250 1,944,000\nCorporation Bonds\t \t\t\t\t\n\t$24,595,140 (124 P-c.)\t8165,455,081 (84J p.c.)\t$6,316,250 (3J p.e.)\n\t\t\t\nTherefore, when we remember that for many years to come we must go outside to borrow money, particularly to Great Britain, the attitude taken by the government during the present year in making a reduction in our expenditure of well nigh $10,000,000, is a thing which, in my judgment, we should strongly endorse on both sides of the House. I think this is one of the things which will convince the British capitalist and investor that the government of Canada, in a time of stringency, is taking measures for retrenchment in order that they may keep up the credit of the country for the future when they may require to borrow in the money markets of the world.\nIn this connection I would like to call attention to an article in the ' Evening Journal ' of this city which shows the marvellous way in which the country is recovering from the financial stringency. On the 17th of April instant the 'Journal' published an article on the activity of building operations all over Canada. The 'Journal' Mr. SUTHERLAND.\nquotes extensively from the 'Financial Post,' which it characterizes as a publication that handles all such statistics in a very conservative manner, and goes on to say that here in Ottawa the aggregate of building permits for March was $144,000 as compared with $69,000 in the same month of 1908; in Montreal the permits were $283,000 as compared with $137,000 in 1908; in Toronto they were $1,700,000 as compared with $838,000 in 1908; in Winnipeg they were $851,000 as compared with $114,000. It gives a long list of other cities, in every one of which there is a remarkable increase of building operations in contemplation as compared with the previous year. These facts bear eloquent testimony to the passing away of the financial stringency. The Minister of Finance spoke of the manner in which the revenue is commencing to go up. I have here a statement showing the exports and imnorts of Canada for the last six months of 1908 and 1909. I shall not read it in full but shall quote the figures for the last two\n\nmonths of 1908 and 1909. These figures are as follows:\nGrand\nMonth.\tTotal of\nImports.\nFebruary, 1908\t$21,001,733\nFebruary, 1909\t 23,188,668\nMarch, 1908\t 30,052,232\nMarch, 1909\t 33,836,293\nThis shows how rapidly the imports of the country are commencing to increase.\nNow coming to the exports I find that the exports for the last six months ending March 31, 1908, were $141,814,453, as compared with $142,805,261 in 1909. But when an examination is made of the exports of 1908 it is found that for the last 6 months there are something like $11,000,000 of exports of coin and bullion while in the last six months of 1909 there are only about $495,000 of coin and bullion, so that if those were deducted the difference would be very much greater than it appears. These are some indicia of the way in which the country is commencing to pick up and gather itself together after the financial stringency of the last one or two years.\nSome reference has been made to immigration. The figures for the whole year up to March 31, 1909, are not yet available, but for the eleven months ending February, 1909, there entered this country 131,000 immigrants as compared with 247,000 in the corresponding eleven months of 1908. We know that the decrease is very largely in immigration from Great Britain and continental Europe and that it is owing mainly to the warnings which the Immigration Department, through its officials, were giving to the motherland and the continent of Europe that during this time of stringency only farm labourers and those prepared to settle immediately on the land should come to Canada. So far as the United States is concerned we have this situation. For the eleven months of 1907-8 the immigration from the United States was 52,000 and in 1908-9, 50,000, almost the same, and it is a curious and satisfactory thing in this connection to notice that the Japanese immigration for the same period was reduced from 7,452 to 486, a very tangible evidence of the way in which the treaty arrangements are being carried out by the Japanese.\n1 am informed and I think my information is absolutely reliable that the settlers' effects coming in from the four states of Michigan, Montana, Illinois and Massachusetts, cash and effects, amounted for the calendar year 1908 to $6,102,170, or on 5,296 immigrants from those states an average of $1,152 each. If this average is applied to the entire immigration from the United States for the calendar year,\nwhich was 57,000, the assets thus brought in would amount to something like $65,000,000. Could anything more promote the progress and prosperity of this country than an immigration policy which would be productive of an enormous influx of settlers so desirable that 57,000 of them in one year would bring in, in assets and cash, the enormous sum of $65,000,000. We have heard a great deal for a year or two past about the number of undesirable immigrants who were coming in. The government's policy on immigration has from the start been a progressive and a satisfactory policy. As might be expected, they dealt with this question of undesirable immigration in the same prudent and far-seeing manner as with other immigration matters. What is the fact? They have on the boundary inspectors at about 111 points of entry from the United States, and during the 11 months of the fiscal year, 4,446 people were stopped at the American border and at ocean ports. Of these one-ninth were stopped at the ocean ports and eight-ninths at border points. This comparison will well illustrate the difference between the immigration policy under the former government and under this administration. The number of 4,446 people stopped as undesirables at our ports during the past year is just about the number of people that under the administration of the former government entered Canada as immigrants in 1896.\nMay I call your attention for a moment to the homestead entries for the last ten months of the last two fiscal years. These entries were\n4997-8\t 27,000\n1908-9\t 35,000\nThat also indicates the way in which the government is dealing with the immigration question.\t_\nA great deal has been said to-night about the Grand Trunk Pacific. I sometimes feel that we do not realize, that we do not impress upon our own minds with sufficient seriousness, the remarkable work that this government has been doing in connection with transportation during the last 12 or 13 years. We all know that for 30 or 40 years, the project of a 14-foot canal from Lake Superior to tide water has been discussed. I know that as far back as 1865, when a great trade convention was held in Detroit, to which representatives came from all parts of Canada and the United States, the project of a 14-foot waterway from the upper lakes to the St. Lawrence was discussed. Was that ever accomplished? Never until this government came into power. They at once commenced to expend large sums of money for the purpose of making an accomplished fact what had been talked of since 1865, and in 1900", "we had completed a 14-foot waterway from Lake Superior to tide water. Then the government abolished the canal tolls. They dredged rivers and harbours and built wharfs. Then they entered upon the great project of the construction of the National Transcontinental Railway. One would sometimes fancy, particularly when listening to the hon. member for North Toronto (Mr. Foster), that is not a road in which the people of this country are interested. Twice we have had the ratification and endorsation of the people of this country of that great project. That road was conceived, as we know, for several nur-poses, first as a continental and imperial transportation road, second as a colonization and developement road for that new Northland, and third for the reduction and regulation of freight rates, and we have been learning on the most expert engineering testimony that what was predicted as one of its greatest features, the four-tenths per cent grade from the foot of the Yellowhead Pass to the sea-board, that is from a point beyond the wheat fields to tide water, will undoubtedly be secured when the road is completed and that we will have a road unequalled in any other country in the world. We have spent, as the Minister of Finance has intimated, a large sum in connection with the Grand Trunk Pacific. We have spent $20,000,000 on canals, $30,000,000 on the Intercolonial Railway, $7,000,000 on the Montreal Harbour and River St. Lawrence Ship Channel, we have spent $2,000,000 on the harbours of Fort William and Port Arthur and Port Colborne, and large amounts on many other important works. These large expenditures are necessary in a young and growing country for the purpose of developing the transportation facilities without which it is useless for us to tempt people to come to Canada, because unless we provide the facilities for them to enter the country and to transport their products to market, the great influx of immigrants will quickly cease and this country will not progress as we hope to see it. Then, we are looking to the building of the Hudson Bay Railway, and the new Minister of Railways (Mr. Graham) has also taught us to look to the possibility of the deepening of our canals from 14 feet to 18 feet. And, who is there who looks to what we are doing in transportation, and who looks also at the desperate efforts the Americans are making in various directions to compete with us, but must come to the absolute and irresistible conclusion that if we construct an 18 foot waterway canal, for all time to come we will have the people of the United States handicapped in the transportation of grain from the west to the sea-board.\nThe hon. member (Mr Foster) did not Mr. SUTHERLAND.\nspend much time speaking of the tariff policy of this government, and it has not been usual for hon. gentlemen opposite to dwell much upon that of late. It is only a year or two ago that we saw in this House a curious spectacle. A partial reduction having been made by the government on the duties on agricultural implements, in recognition of the fact that a tariff only for revenue is the policy for this government and that the wants and wishes of the great agricultural classes should be safeguarded, one of the Conservative members from the west moved an amendment and we had the extraordinary spectacle that the policy of the government in this matter was so satisfactory to the leader of the opposition, to the hon. member for North Toronto (Mr. Foster to the hon. member for Grey (Mr. Sproule), to the chief whip of the Conservative party who has recently become so interested in ladies, and to five or six of the leading men on the or>r>o-sition side, that they were found voting to sustain the government. When one looks at the fiscal record of the government one cannot but recognize the marvellous ability and capacity they have shown. The tariff of this country since 1896 has, we might say, been dealt with along three lines. There is first the imperial line. For the first time in the history cf the British empire, a colonial government offered and gave to the mother country a preference in Canadian markets, and that preference later on was extended to other portions of the British empire. That was an imperial step followed by other imperial steps in the negotiations with the colonies which this government entered into in connection with tariff matters. In the second place, the Canadian government entered upon what might be characterized as an international fiscal policy. When we found that Germany was improperly, as we thought, penalizing Canada by the application of her maximum tariff we placed against her the surtax. Again, when we found certain manufacturing concerns in the United States so generous to the Canadian purchaser that they were prepared to sell goods to consumers in Canada at less than the current prices in the United States, the government put an end to that which they considered utterly unfair competition to the manufacturers of this country, by introducing the anti-dumping legislation into the Canadian tariff. I live upon the border,\nI live where, as in the town of Walkerville, there are large manufacturing concerns, and I know of the splendid effect which on the whole that anti-dumping clause has had. And again, this government introduced into our fiscal policy the intermediate tariff which the Finance Minister announced is to be utilized by this government for the purpose of negotiating with the governments of\n\nether countries with a view to establishing better trade relations between them and us. But, to my mind the chief feature of the tariff after all is that it is a tariff for revenue, and, on the admission of the hon. member for North Toronto we have been getting revenue through that tariff. Never did any previous tariff in Canada produce revenue as did the tariff known as the Fielding tariff. The Minister of Finance has given figures to indicate the marvellous progress of the country under the policy of the government, and at this late hour I shall not follow him in that regard, but I would like to mention another policy of the present government, upon which they have just started, and which I believe to be of vital and paramount importance to the welfare of the country. One of the things that leads me-and I say this conscientiously and honestly-to be as firm in my adherence to and support of the government as I was ever before, is that they are going forward step by step and making progress in every direction. A Liberal government could not stay in power and be other than progressive. There is one line of development in which the government can even go beyond what it already has done; I refer to the conservation of the natural resources of the country. It may well be said that while the right hon. the Prime Minister is entitled to the gratitude and praise of the people of Canada for many things, perhaps in time to come what will be looked upon as one of the chief benefits he has conferred on the country is, that at his invitation there was a great forestry convention held in Ottawa in February, 1906. In his speech at the opening of that convention the right hon. gentleman said a number of things which are well worthy of being remembered, and I may be pardoned if I now make a short extract from his speech on that occasion, so that it may be_ published in ' Hansard ' and thus perhaps receive more attention than it otherwise would. The right hon. gentleman said :\nIn the name of the Canadian Forestry Association, which has conceived and planned this conference, and in the name of the Canadian parliament which has authorized and approved of it, it is my privilege and my pleasure to extend to you all a most hearty greeting. Welcome to one ; welcome to i all. Especially should I welcome, even after the words of His Excellency the Governor General the representatives of the American Republic who are present with us on this occasion, and who bring to us the benefit of their knowledge and experience. Welcome also to the representatives of the provincial governments, without whose aid and co-operation our efforts could never have the full fruition which we anticipate from them. Welcome also to the representatives of the great railway companies which are. placed in a position to give, perhaps, more than any other class of the community, the benefit of their experience and knowledge to us. Welcome also to the representatives of the great lumbering class, who, perhaps, are more interested than any other class of the community in the maintenance, preservation and protection of the forests. Welcome to the university men whom we see before us, welcome to the traders, welcome to the sportsmen, welcome to all classes who are present, and who are ready to contribute of their time and of their money to the great object we have in view, and which is an object of primary national importance.\nThese are words which are very applicable to the subject to which I am just now referring. Then, I understand that very recently the government has, by refusing to give a license for the exportation of natural gas in the Welland district, entered upon a new departure in the way of conserving that natural product. I am sorry that action along this line was not taken some years ago, to save the same product for us in the west. In connection with the control of power at Niagara Falls, in connection with the Waterways Commission and its work, in connection with tree planting in the west, and in connection with the establishment of several thousand miles of forest reserves on elevated areas, the government are developing a strong policy of conservation of natural resources. These forest reserves are: in Manitoba-in the Riding mountains, the Duck mountains and the Porcupine mountains. In Saskatchewan-in the Beaver hills, the Moose mountains, the Turtle mountains and the Cypress hills; in Alberta-in the Cooking Lake range, Jasper park, Banff park, Kootenay Lake park; and in British Columbia-on the western slope of the Rocky mountains, Yoho park, Glacier park, and a number in the dry area. Again by accepting the invitation of the United States government and sending three very capable representatives of Canada to the Conservation convention at Washington, the government showed its interest in this great question. I understand that the Washington convention recommended that a permanent commission should be appointed for each country, and I hope the government of Canada will at as early a date as possible appoint a good strong commission to deal with that question from a national standpoint.\nBefore I close I wish to refer to the criticism of the hon. member for North Toronto in regard to the rapid increase of the public debt. It is quite plain that the hon. member practically admits that apart from the requirements of the Grand Trunk Pacific Railway, the increase of the public debt is very trifling. The hon. gentleman said, according to ' Hansard ' of March 17, 1908, volume 3, page 5181:\nIn 1887 the public debt was $227,000,090; in 1896 it was $258,000,000; increase in nine vears, $31,000,000.", "In 1908 it was $275,000,000 ; increase in twelve years, $17,000,000.\nUp to the present time, leaving out 1908, there has been under this government a comparatively small increase of the debt.\nSo that practically the hon. gentleman's criticism bears upon the large expenditure for the Grand Trunk Pacific. But if he recollects the record of the Conservative government for the years 1884, 1885 and 1886, he will know that that was a period when the Canadian Pacific Kaiiway was under construction, just as the Grand Trunk Pacific is to-day; and during 1884 the public debt was increased $23,695,135; during 1885, $14,245,841, and during 1886, $26,751,414, or a total increase in those three years of $64,000,000. If this enormous increase in the debt of this country in those years, when the Canadian Pacific Bailway was being constructed, was fair and right in the judgment of the hon. member for North Toronto, why is it not equally proper that the debt should be increased now when we are engaged in the construction of another great transcontinental railway?\nIn my judgment the government has given us a tariff for revenue which is up to date and adequate to our wants; it has adopted a live and progressive transportation policy, an active and satisfactory immigration policy, a policy that attracts capital and impels foreign concerns to come here and build factories, a policy looking to the conservation of our great resources, and a policy that promotes and increases the output of all our great and leading industries. So long as the government continues the advanced and progressive policy which it has given to this country for the past twelve or thirteen years, so long will the right hon. gentleman who leads the government and the members of the cabinet who surround him retain the confidence of the people, and each time they go to the polls they will receive the popular endorsation which was given to them in October, 1908.\nMr. PERLEY moved the adjournment of the debate."]
George Eulas Foster: Mr. Speaker, the Minister of Finance did not spend much time with reference to the trade aspect of the country in the speech which he made this afternoon. Of course, it is apparent from the limited statistics that he quoted, that during the last year we have had to face falling imports to a very large extent, and a falling off in exports to a limited extent. I notice with reference to imports and exports for the last fiscal year of which we have complete returns, that there has been t* large difference between them, leaving a balance of trade, on the whole of a little over $100,000,000 against the country in that year. When we take up some of the principal countries, we find that we imported from Great Britain $95,313,730, and exported to her $134,477,124, being an excess of exports of $39,000,000 in our trade with Great Britain, which follows the course of our trade with Great Britain for a number of years. When we come to the trade figures with the United States, we find a great difference, and a great increase on the difference of the preceding year, inasmuch as we imported from the United States $214,787,269, and exported to the United States $96,931,138, leaving a ibal-ance of imports from the United States as against our exports to that country, of $118,000,000. Last year I drew the attention of the Minister of Finance and of the House to the large balanca against us in our trade with the United States. In 1906 that adverse balance was $85,000,000, tlie largest in the history of the country up to that time. Now, in 1908, it is $118,000,000, being an increase of $33,000,000 from 1906. All the older members of the House' will remember how much was made against the tariff in Liberal-Conservative times because it failed to redress that balance of trade between the United States and ourselves. In those days the balance of trade was very small; under the present regime it has continually expanded until this balance of $118,000,000 in the last fiscal year is the largest in the history of the trade. We notice also with reference ito France, that whilst we imported from France $10,250,000 we exported $1,800,000. leaving a balance against us of $8,400,030. With reference to Japan, we imported from her $2,196,284 and we exported $749,000, leaving a balance of trade against us of nearly $1,500,000. So that the favourable balance of trade existing with reference to Great Britain of $39,000,000, is far more than wiped out by the adverse balance with Mr. PRICE.
the United States; and when you add these other countries, they make the total balance of trade against us a little over $100,000,000. Well, my hon. friends opposite, though they objected a great deal to an adverse balance of trade in the case of the United States, have found that they .were unable in any way to arrest it, and it has been continually expanding. It is more rapidly becoming a menace.
Our friends on the other side have not, during the past year, opened to us any new markets. It was always the cry of the cider members of the party when in oppo-i sition, that what Canada needed was new markets. Well, they have been in powjer a long while, and they have not opened to us the market of a single foreign country on any plan of duties more favourable to us than we had in 1896 when these gentlemen brought in their policy which was to open new markets. In fact, a prospective new market which we had in connection with the French treaty seems to have been partly closed. I notice that the Finance Minister did not say anything with reference to that, although it was a very important matter. We remember that the Minister of Finance and the Minister of Marine and Fisheries made a good deal of the opening they were going to make into the French market. After having succeeded in getting a treaty, and after an attempt which did not succeed in making the people believe they had adopted an entirely new method <of negotiation, in which Great Britain was kept outside while these gentlemen did the work themselves, and after having gained a good deal of glory on their first arrival in the country after having negotiated that treaty, we find that in some way or other the treaty slipped a cog, for one year at least, and my hon. friend went over to see that the matter was set right and that our French treaty should be brought into force. Well, as a result of the negotiations which he has had, I cannot see that he has gained anything for us in the way of admission of Canadian products into France. He has had to acknowledge a very regrettable error, which does not auger very well for these new diplomats; he failed to let France know just how many most favoured nation countries there were that would come in under the concessions that were given to France. _ As he did not seem to have mentioned Switzerland,, the French treaty was hung up for a year or more on that account.
Now my hon. friend has had to pay the penalty of his mistake. Instead of being able, to say, as he did before, to the farmers of Canada that by the minimum tariff they had gained an entrance for their fat cattle into France, the hon. gentleman has come back minus his fat cattle. The maximum tariff is now in force against the fat

cattle of the people of Canada and I do not imagine that he or anybody else thinks that many fat cattle will be taken into the French market under a duty of 2-7 cents,, pretty nearly 3 cents per pound standing weight. As to stockers, I imagine that the duty of 1 -7 cents per pound standing weight will prevent any large trade in stockers between the farmers of this country and the French market. Thus this matter has been placed in even a more unfavourable light than it was before. I have not heard yet that my hon. friend has moved to have the French treaty ratified in the House. The result of the negotiations in reference to the French treaty is that we have the number of articles limited, it seems to me, in a very important particular with reference to the item I have just read. I wish to call the attention of the Minister of Finance to what seems to be a more important fact which has developed in connection with this matter in the legislation which is now being considered in the United States and to which he did not advert in his address this afternoon. As my hon. friend knows, the tariff of the United States is being revised. The Payne Bill, in a slightly amended form, has already passed the House of Representatives and is now being debated in the Senate. One very important clause in that Bill which, if it becomes law, and general opinion seems to take it for granted that it will become a part of the tariff, imposes a maximum or increased range of duties against countries which do not give to the products of the United States the most favoured entrance into their markets. Just how the Bill will pass out from the Senate and the House we do not know, but it seems to be taken for granted that that article, in one form or another, will become a part of the tariff. If it does it raises a pretty serious question. Our trade with the United States is a very large trade. In the French treaty there was given a list of 97 articles in reference to all of which the French got the advantage of reduced duties over our general tariff in the Canadian market. When we were discussing that treaty it was said in the House that although this was a large range of articles a great many of them were items in reference to which we would not look for very much competition from France owing to the nature of the articles and to the manufacturing conditions in France. These 97 articles covered, however, a very wide range, and if the United States is to be allowed into our market on those minimum duties with reference to those articles, a very serious state of things will exist. Diminutions of duty ranging from 7 per cent to 50 per cent of the general rate are made in these articles and some of the articles are even below the preferential rate which is offered to Great Britain, so that on the 97 articles in the one schedule and the 12 in the other and the long list of unenumerated articles on which there is a reduction of 2i per cent, if the United States comes into Canada with their trade they will have the advantage of a lessened duty with reference to that wide and important range of manufactured goods and products. I shall not take up time by reading that list. If I did my hon. friends opposite would see in a moment that many of the articles included in that list are articles in which the United States are very large manufacturers and are very heavy competitors with our own and British producers. Take the manufacture of metals, iron and steel and others; the French goods under those items come in under a lessened duty. Then this United States tariff, as I understand it, comes into force automatically. The rate of duty goes on and after a certain time the increase in duty, which I think runs to about 20 per cent, applies to the products of every country which does not give the most favoured nation treatment to the United States.


Mr. PATERSON.: That is not the law.


George Eulas Foster: I have said that is not the law. I have said that is the proposition.


William Paterson: There is another proposition that the duties that are mentioned are to be the maximum and that any nation giving favoured nation treatment will have a 20 per cent reduction.


George Eulas Foster: And it means exactly the same thing, for the maximum duty is put on a range that will make no difference whether you take it the one way or the other.


William Paterson: I beg pardon.


George Eulas Foster: It is proposed to have a maximum duty and a minimum duty. The country which does not give most favoured nation treatment does not get the minimum duty but is put upon the maximum list and in arranging their duties they arrange the minimum list so as to give themselves a complete protection and they practically prohibit any large trade in the goods of the country which is put upon the maximum list from entrance into the United States market. That, as I have said, raises a very large question. Owing to the operation of the Japanese treaty the Japanese, by virtue of the most favoured nation clause, get the benefit of the reductions granted under the French treaty without any compensation to this country. If the United States adopt the clause to which I have referred, and press for its acceptance by Canada, the alternative is the payment of the maxi-

mum rate on all Canadian goods entering the United States. And, if we feel that the trade is so large and the advantage to us so great that we could hardly refuse it/ then the United States would claim the whole range of the most favoured nation privileges which are not only given to Japan but to France as well. Then, in two months the process would be completed and after the expiry of that time our trade with the United States would be met by the maximum duties.


William Paterson: Of course nothing has been decided yet, but as I understand it the proposition before the United States Senate is that it shall not go into operation for a year.


George Eulas Foster: However that may be, the gravity of the situation will be easily appreciated. We would have to make up our mind whether we will give to the United States most favoured nation treatment on all these lines for which we get from them no concession, or whether we are to refuse the United States that most favoured nation treatment and in consequence have the $96,921,000 worth of goods which we exported in the last fiscal year, subject to the highest and as I believe a practically prohibitive duty. After the elections had taken place in the United States one would have thought that the Payne Bill would Jiave been a scaling down of the average duties, but I have an analysis made by the clerk of one of the committees and I find to my astonishment that the average under the Payne Bill is higher than it was under the old tariff, and particularly so on agricultural products which to a large extent we export to the United States. We therefore have to consider very carefully whether the theory of most favoured nation treatment is the proper one upon which to base our trade arrangements with other countries. The United States do not hamper themselves with it; they sit down alongside of Japan or of France or of Spain or of any other country and they say: 'Here are our products and there are yours, can we make a trade arrangement between ourselves?' They have only to look to what is beneficial between Spain and the United States; they are not hampered with the knowledge that if they give to one country this or that they would have to give the same to another country, and another country, and another country. They are able to act in the straight business way that a man would bargain with another man, and to make an arrangement between individual countries without considering how it will affect others. I am decidedly of opinion that the old method of most favoured nation treaties is entangling and embarrassing, and that it is constantly leading us into difficulties. With our largely increasing trade in Canada, I believe we


George Eulas Foster: These loans were made at rates running up to 4 and 44 per cent.
All the time the Finance Minister was vaunting his surpluses.


William Stevens Fielding: Has not my hon. friend omitted an important fact ?


George Eulas Foster: What is that ?


William Stevens Fielding: That all these loans were paid-that they served a temporary purpose and were paid off.


George Eulas Foster: No doubt they were paid off. Did the Finance Minister think I said these $94,000,000 still remained?


William Stevens Fielding: I remember his stating that they were a liability we incurred but he forgot to state they were paid off.


George Eulas Foster: I did not think my hon. friend would ask me to state they were paid off. They were temporary loans renewed from year to year as I said, but the fact remains that he borrowed $94,000,000, and that Canada paid in charges on these loans $1,831,259.


William Stevens Fielding: And there were no similar loans in my hon. friend's time?


George Eulas Foster: There were no loans under these conditions and to that extent.


William Stevens Fielding: There were loans of precisely the same character and for the same purpose.


George Eulas Foster: Now, let me come to the other loans, what we call the permanent or long loans. I have a table here which will show the comparison between the two governments. We have been led to believe that such has been the policy of the Finance Minister since 1897, that we have been great gainers financially in the money mar-



[Stage Direction]
(Under arrangements with Glynn, Mills & Currie.)
Year.	Amount.	Effective Rate %.	Brokerage.	Commission.	Rate °/p of Commis'n.£	£	£	£	1879	3,000,000	045	7,500	30,000	i1884	5,000,000	[DOT]0402	12,500	50,000	i1885	4,000,000	*045	10,000	40,000	i1888	0,443,136	0403	4,500	26,791	i1888	4,000,000	0321	10,000	40,000	i1892 	2,250,000	0341	5,625	22,500	i*1894	2,250,000	0311	5,593	5,625	i26,943,136	55,718	214,916	
* New arrangement with Bank of Montreal in force.
LOANS MADE BY LIBERAL GOVERNMENT. (1897 to 1909.)
Year.	Amount.	Effective Rate %.	Brokerage.	Commission.	Rate Zp of Commis'n.£	£	£	£,	1897	2,000,000	*02883	4,992	5,000	i1904	2,500,000	*04556	5,728	26,875	ItV1907	1,500,000	*04796	3,2S5	22,511	li1907	1,831,398	04452	3,357	22,882	li1908	3,000,000	*03704	7,276	45,009	1*1908	5,000,000	[DOT]04298	10,756	60,033	D1908	*	5,000,000	*03783	11,804	75,017	li1909	6,000,000	[DOT]04125	13,790	90,000	l|
Total.   ...@: for renewals and extensions, with i of 1 per cent additional if we thought the Bank of Montreal was not able to put through the whole loan and had to associate other banks with it. But this commission of i of 1 per cent, paid when other banks had to be associated with the Bank of Montreal, has been run up to 1J per cent. I do not know, but it seems to me that these are indications, as I stated this afternoon, of the somewhat strained credit of Canada in the old country to-day. The hon. minister (Mr. Fielding) made no provision when he could have made provision, that is when he had immense surpluses. He allowed everything to go on accumulating, then found himself in the market in 1908 and the late part of 1907 with maturing loans and new loans following one another in such dangerous proximity and in such large amounts that the market did just as any market will do-if you appear there too often it will make you pay for your visits. If my hon. friend (Mr. Fielding) had taken the right course, the credit of Canada would have insured the loan, and he would not have needed to pay these immense underwriting charges. Why, in _ one of these loans, he pays the underwriters, then he pays a body of men for arranging the underwriters, then he pays the brokers and bankers for assisting the men who arranged the underwriters -a treble charge and amounting to 1} per cent on the whole transaction. It seems to me that this is a matter worth drawing attention to. It seems to me to show clearly that the Minister of Finance, by lack of foresight and of extravagant and reckless expenditure, has put this country into a position where it must pay altogether unnecessarily high for financial accommodation. And my hon. friend taxes some of us on this side with failure in prophecy- with having said that such and such would be the case only to find that it did not turn out in that way. Not many years ago the Finance Minister said, standing in this House and looking forward to the loans maturing in 1910 and 1913:
We shall save a million dollars in the r&-r.ewal of these loans from 1903 to 1910, and maybe more.
He has not only not saved a million dollars, but he has been out of pocket in renewing these loans and the interest at high rates will run on for the term of the loans.
Now, a word with reference to the matter of management of a country's financial business. _ Somehow or other, we are apt to get it into our heads that different principles and different methods are to be applied to the running of a country's business from those to be applied in running the business of an individual or corporation. I think that is a heresy which has much to answer for. In the first place, it induces action on the part of the government which no business man would for a minute under-Mr. FOSTER.
take, and it lays the foundation for laxity of management of government funds and an extravagant scale of government expenditures, which, if the truth were kept close home both by the government and their followers, that the same principle ought to apply in the management of a government's as in the management of a man's or a corporation's business, we should be less liable to the multifold temptations into which we fall, and the multiplied expenses which these temptations cause us.
Now in the case of an individual, or a corporation, or a government, it is true that in each case the individual, the corporation, or the government are the trust-tees of the business that they carry on. The one who has less responsibility and can therefore dare more, is the individual, because, as he says, his money is his own. It is not entirely his own, his wife and family have claims upon it, and he acts and works for them; but he has less responsibility and more freedom. But when you come to a corporation and when you come to a government, it is an absolute trusteeship, and from that idea of trusteeship the corporation is never absent, and the government ought never to be absent. Now a business man, governed by business instincts, on what methods will he carry out his business? Well, he will, in the first place, ponder every outlay before he makes it. The government makes the outlay first and does the pondering afterwards. He will sit down and count the cost, and if he thinks he can afford it, he will undertake it. The government enters into it and counts the cost afterwards.
Take for instance, the Newmarket canal. Will my hon. friend the Minister of Customs say that he, as a member of the government, as a trustee of the people, sat down and counted the cost of that Ayles-worth ditch before he and his government committed themselves to the expenditure? I do not think my hon. friend will say that, I doubt if any single member of the Cabinet can say that honestly. A private gentleman, or a corporation, would have sat down and counted the cost before they entered into the expenditure. They would have asked very naturally the question, [DOT]first, if there was any water there to put into the canal after they built it. They would have asked the very pertinent question, is it necessary at that cost? They would have asked another pertinent question, is it advantageous in proportion to the cost? Did my hon. friend sit down and ask either of these questions? Did any member of the Cabinet? If so, they were lamentably dense a few weeks ago in this House when not a single one of them could tell us what traffic or what trade they ever expected to go over that Newmarket canal after it was built.
Now there is another difference between a

government, the trustees of the people's money, and an individual or a corporation *which is engaged in constructing works for which it has to pay. In times of prosperity when they decide that the work is to be gone on with, they are very careful to get the proper plan worked out, and to have the proper economy exercised, and to have proper supervision, to see that the work is effective. But that is not the way the government does; that is not the way the government did with reference to the Quebec bridge, that is not the way the government did with reference to the Grand Trunk Pacific, even. The Quebec bridge-fancy a business man undertaking the operation which they undertook, and in the way they undertook it! Fancy any corporation doing it unless it were a corporation which felt that it had sufficient influence to put the government behind its back and see it through if it failed, and pay it interest and a dividend for failing! They paid these gentlemen after they failed, paid them their money back, counted by their stock at par, paid them 10 per cent in advance on their stock as a bonus, paid them 5 per cent on their supposed outlay for the stock from the time that they got their stock and saw that they got good round salaries, several of them, during the whole time they were not doing the business, and after having paid them all that, they assumed the debt, took the assets, and the assets are most of them down in the bottom of the river. Now that illustrates the difference between a government, and an individual or a corporation. I need not elaborate the Grand Trunk Pacific, that is a lesson which is alwavs before us, of a government going into a thing without practically a shred of expert knowledge upon which to base their whole scheme, going into it on estimates made by themselves, or by some others for them, which a few years have knocked into small pieces, and the estimates themselves are doubled and in some cases tripled when it comes near to the period of ascertaining the actual cost.
Well, Sir, these are some of the differences between the way this government operates and the way that an individual or a business corporation would operate. The business man has always to consider two things: What is it going to cost me to carry on my business, and can I pay the debt that I owe when that debt matures ? A government seems to be oblivious of the idea of looking much at the probable cost, and as for the day of ultimate payment, it never crosses their mind. Their reply to that is that the country is good for it. I have heard hon. gentlemen opposite say that over and over again. The government -what has it done? And what has my hon. friend the Minister of Finance done? He has taxed to the limit, he has spent to the limit, he has added mortgages additional
and additional to this country, and he has added to the interest burden as well. Taxes-in eleven and three quarter years he has taken $555,000,000 out of this country, $223,000,000 more than the Liberal-Conservatives took out in the last eleven and three quarter years of their regime. Taxes -they were $28,600,000 in 1896, they were $73,300,000 in 1908, an increase of around $45,000,000 in that time.
And to all this we get the flippant answer, 'Oh, the country is good for it.' Now let us analyse that for a moment. What does the Minister of Finance mean when he says the country is good for it, or what does any gentleman mean when he says, 'Never mind the debt, never mind the burden, the country is good for it?' Do the creditors of Canada foreclose on your public buildings, your docks and your wharfs in order to get their interest, or to get their principal paid back to them? Do they foreclose on your forests, on your fisheries, on your mines or on any of the assets of this country? Not at all. When you say the country is good for it, what you mean is that so long as you can tax enough or borrow enough you will get along, and you tax the individual and you borrow, and you lay the burden of the borrowing upon the individual. So when you say the country is good for it, what you really mean is that the individual taxpayer is good for it, and has got to shoulder the whole thing in the long run.
Then, Sir, every individual tax payer in this country has other business to do, other taxes to pay, and other burdens to shoulder. In the first place he has to keep himself and his family, to run his business, to borrow what is necessary for it, to pay interest and pay the principal as well. That is his first burden. Then he has to pay the municipal current taxes. That is his second burden. Then he has to pay the provincial current taxes. That is his third burden. Then he has to pay a tax to every corporation which makes the means of living and the facilities of life better for him, he gets a higher scale of living but he pays for it in one way or another. In addition to that he has to pay the loan burden of municipalities and provincial governments, and to a certain extent, of corporations. Then the Minister of Finance saying Canada is good for it. comes upon the poor tax payer who has all these burdens and loads him up from $5.46 per head to $11 per head in his short regime. Let us get rid of the idea that the country is good for it, an indefinite something which owns nothing, which pays nothing, but let us remember that every bit of this burden falls ultimately upon the individual taxpayer and the individual tax payer in this country to-day is drained and drained heavily, in many cases he is drained to the point of weakness. One

tiling has helped us and saved us to a large extent and will help and save us in the future, the development and product of our arable lands. The Finance Minister spoke this afternoon of 70,000 immigrants from the United States going up into our new lands. These men, with those who come from other countries, are the people who with dollar wheat-to my mind never to return to the old low rate-raising their productive harvest in the great west and putting it into and vivifying every artery of industry and of commerce in this country are its greatest hope-and these men are coming to Canada owing to the policy pursued by the Liberal-Conservative government long before this government came into power, blazing the path, opening the country, and affording means of transportation for our Northwest, that great last west of free or fairly cheap lands, that is the salvation of our country. As I said, the taxation of this country taking it all through, is for a new and a poor country tremendously heavy and this government ought not to press beyond a reasonable point and add to that already heavy burden. We seldom think of the amount of borrowing that is going on in Canada, of the enormous amount of money that is coming into the country. Sometimes we look at that side of the movement only and forget that every dollar that comes into this country, with its yearly accretion, has ultimately to go out of this country. The moment that a million pounds finds its way into Canada and is invested in any way, that moment begins the return stream, of interest first and finally of Principal. I have urged on the Prime Minister such a re-organization of our statistical system as would enable us to obtain from the official publi-tions, statistical information of a practical kind which would be of value to us in our discussions of subjects of this kind, yet to obtain the figures which I am about to give to the House I have had to avail myself of a very excellent little production published by Mr. E. E. Wood of the Dominion Securities Company in Toronto. I find from this that in the years, in Canada, 1904-5-6-7 and 8 the total of bonds issued by governments, municipalities and corporations was as follows:
Issued by.	Amount.
Governments	$107,580,000
(Municipalities	 93,500,000
Corporations	 301,700,000
Total	$503,900,000
There were bonds issued for use in Canada. Of these bonds $196,400,000 were issued in 1908. This is a vast sum but it is but a small portion of the money which has been brought into this country. Of Dominion government bonds, provincial government bonds and railway bonds, there Mr. FOSTER.
were running on December 31, 1908, about $802,000,000. All this goes to show the immense amount of money that is coming into this country, and it teaches us as well that beginning immediately and continuing there is to be an immense amount of money that must go out of this country. The issues of Dominion government bonds unfortunately are not for what we might call productive investments. They go to build public buildings, wharfs, Newmarket canals, St. Joseph wharfs, they go to build Quebec bridges which fall down into the water. Some expenditures are not productive but they are of use in the developement of the country. The main point which I wish to drive home is that we must not justify taxation on the ground that the country is good for it, we must remember that it is the country's burden. Our country has within it such resources and such powers that a livelihood for the public who inhabit it is made easy, and poverty cannot be imminent or widespread. But at the same time we must not overburden the individual.
Just one thing in closing-my right hon. friend is proud of his Minister of Finance; he said so in Halifax. He is also proud of his Minister of Public Works; he told us the other night he is now ' PP,' prouder of Pugsley than ever. I suppose that now after my exposition he will be still prouder of his Finance Minister. Far be it .from me to pluck a single feather from the cap of the Minister of Finance, but at the same time there are considerations that we might indulge in in a quiet way in order to prevent the Minister of Finance from becoming too much elated by the pride that his Prime Minister has in his performances. Suppose that good naturedly I should go over a number of these as the ending of my remarks. In the first place the Prime Minister should be proud of the Minister of Finance because in all the history of Canada there has been no Finance Minister who has so completely swallowed all his principles and all his professions, fiscally, financially, and otherwise, as has the hon. gentleman (Mr. Fielding). Is not that true? The oldest Finance Minister we have Jiving stood true to his fiscal colours. In the dark times when the Liberals held the government of this country from 1873 to 1878, Sir Richard Cartwright stood to his colours; a free trader he was when he went in, a free trader he was when he came out, and if he was not inclined to be so at all times Alexander Mackenzie kept him so. Even staring defeat in the face they would not change their colours; they were consistent. Sir Leonard Tilley and Sir John Macdonald succeeded. They advocated a new policy when they were in opposition; they were told-my right hon. friend told them- it was only a plea for getting in and that they would not put it in force when they

did get in. But they went in and Sir Leonard put his principles of the National Policy into force and the Liberal-Conservative Finance Ministers kept them in force from that day to the day they went out. Then, my hon. friend (Mr. Fielding) came in. He was a doughty free trader in the days of opposition; he was a red-hot economist in the days of opposition; he was dead against the National Policy and the principle of protection when he was in opposition; he was death to surpluses; it was Liberal creed and Fielding doctrine in those days that there should be no surplus. But the hon. gentleman came into office and where are his free trade principles now; whither has his rigid economy taken flight; where is his hatred of bounties?-bounties on iron, bounties on steel, duties on coal and the necessaries of life, bounties on twine, bounties on oil, bounties on beet root sugar. He is without doubt the champion swallower of his principles and policy. My right hon. friend has a perfect right to be prouder than ever of his Finance Minister and no doubt, in this case, a fellow feeling makes him wondrous kind. Well, Sir, the Minister of Finance is champion in another respect; he is the champion taxer of Canada. Of all the Finance Ministers that have ever been, no one has gone so deep into the people's pockets, no one has piled up the altars so high with the hard earnings of the people. He found the tax $28,000,000 when he came in; in 1908 he had raised it to $73,000,000. In 11} years he has taken $223,000,000 more than his predecessors in an equal number of years. My right hon. friend must be proud of him in that respect. If I remember well, once on a time in the city of Ottawa in 1893 he held up the flag inviting all and sundry to march up to the citadel and to put out the men who believed in protection, who overtaxed the people and who were extravagant in their methods of government. 'Well, Sir, my friend the Minister of Finance also takes some rank as scalping the thrifty depositors of this country of a part of their interest upon their deposits in order to swell that vaunted suplus of his which he must have. If he cannot get it by changing 16 million dollars from current account to capital account he can take $3,000,000 or $4,000,000 by docking the depositors in the savings banks of one-half of one per cent, and paying them a return upon their money one to one and a half per cent less than he is paying to the foreign money lenders. No Minister of Finance in the history of Canada has ever so fattened and fed the foreign lender and the foreign broker, and no one has ever made it so pleasant for the middleman as the hon. gentleman (Mr. Fielding). I have read the story of the
commissions and the brokerage charges that have been paid in connection with these loans, and no other Finance Minister of Canada has eveT paid as high rates for money in Great Britain as has the present Finance Minister. In that respect also has he a record. He is also-he will not think I am applying it to him in other than the technical sense-he is also the champion spendthrift of Canada. What I mean by that is that he has spent more than any other Canadian Finance Minister. Coming in on the declaration that $38,000,000 was appalling as our annual expenditure, he climbed up last year to an expenditure of $132,000,000, and no other Canadian Finance Minister has ever accomplished such a feat, expenditures commencing with $41,000,000 a year and ending in the year just past with $132,000,000. I am sure my right hon. friend is now proud of the Finance Minister as a spender. And the purposes of this spending-the Quebec bridge, the Newmarket canal, St. Joseph's wharf, not to come nearer home. Go anywhere through this country, and the list is so large, of absolutely useless and wasteful expenditures, gone into without thought-no cost counted until the whole bill was sent in, and then it was paid. And the quality of the expenditures-why, Sir, there is scarcely a thing upon which money can be spent which is not to-day brought within the category _ of Dominion expenditures, and upon which money is not spent. They have gone so far as to advertise for applications for expenditures. My Tight hon. friend remembers the doughty economist in the days of his opposition crusade-Sir Wm. Mulock of the present moment, who was in Ontario his right hand in the matter of strict and rigid economy. My right hon. friend will remember that he made him at one time Minister of Public Works, and he had not warmed the seat of that office temporarily for more than a few hours before he actually issued a circular inviting all members of parliament and unsuccessful candidates to just advise him if there were any expenditures in their constituencies which they would like to have carried out, as he would be glad to know what they weTe.
There is another eminence which the Minister of Finance has. He has promulgated more interesting and misleading fiction as a basis for public expenditures in this country than any Finance Minister I know of. Witness the Grand Trunk Pacific. How certain he was that that would not cost more than $13,000,000 all told to the people of this country. How certain he was that-the outlay would not be more than $51,000,000 as an advance; and to-day his Minister of Railways puts the outlay at $114,000,000 on the eastern division, less terminals, less Quebec bridge, less a lot of other things, and before it is through with $180,000,000 will be nearer the figure. $51,-

000,000 was in the preface of that most interesting piece of fiction that the Finance Minister read to us in 1903, and to which he issued a supplement in 1904. To-day he faces and for the last year he has faced the monsters that he has conjured up- wastefulness, extravagance, maturing debt, fresh debt, and all the horrors of the money market, with temporary loans in almost every bank, with maturing liabilities of millions of pounds cropping up every few months, and with the conditions that surrounded general finance in the year 1908. He faces all these things. Will the monsters destroy him? Has his wand lost its efficacy? Can he send them back to the vast deep from which he summoned them? It remains to be seen. But he is face to face with them to-day. My hon. friend must go into the market right now, in the year 1909, to ask for a loan of $10,000,000 extra for the Grand Trunk Pacific, if the government carries its policy through. He lias got to ask tins year for at least $30,000,000 for the Grand Trunk Pacific and other capital expenditures. That makes $40,000,000 which he has to look for outside in the year 1909. But that does not end it. In 1910, he has $9,000,000 maturing, and he will have to ask another $30,000,000 for the Grand Trunk Pacific and for the Hudson Bay Railway. Why did the Finance Minister omit to speak of the Hudson Bay Railway to-day? The Prime Minister, the Minister of the Interior, the Minister of Railways, all are pledged to the building of the Hudson Bay Railway, and the building of it immediately. Why was no mention of that made to-day? I assume that they will implement their promise; I assume that the west will keep them to that promise. They made it in cold blood, when the worst of the financial proposition was before their eyes, and they knew what they were making. The Minister of the Interior will say we are providing for that out of our lands, selling enough at $3 an acre to pay for it. Let me ask the Minister of the Interior: 'You have sold your lands and got some money for them; where is that money to-day?' Spent, every dollar of it; and if you got in the whole of that money, the next year and the year after, every dollary of it would be spent on consolidated fund account; and when you come to build the Hudson Bay Railway for $20,000,000 or $25,000,000, you must get the money by making a loan on the British market. You have started the annuities crusade and you are taking money from the people of this country for that. Where is the money you are taking in? It is a debt of the country. You put it into the consolidated fund, and you spend it on the things I have been speaking about. Where are the savings of the people which have been entrusted to your care-their capital, on which you pay interest? Every dollar of it is spent. It is Mr. FOSTER.
now and always has been a debt of the country. In 1910 there is $9,000,000 of debt maturing and $30,000,000 which will have to be borrowed for the Grand Trunk Pacific and the Hudson Bay Railway, making $39,000,000. In 1911 there is $8,600,000 of maturing debt and $30,000,000 more for the Grand Trunk Pacific and the Hudson Bay Railway, making $38,600,000. In 1912 there is $31,000,000 of maturing debt and $30,000,000 to be borrowed for the Grand Trunk Pacific, making $61,000,000 for that year; and you will go on to 1913, unless you finish the railway and make the borrowings before, and have in that year $3,700,000 of maturing debt and $25,000,000 to be borrowed for the Grand Trunk Pacific. Each year the minister has to go to London for forty millions, thirty-nine millions, thirty-eight millions, sixty millions, and twenty-eight millions or thirty millions, simply for the Grand Trunk Pacific, the Hudson Bay Railway and maturing loans, not taking into account the great expenditures which from year to year press themselves upon the people of this country. By a bit of legislation a day or two ago you pledged yourselves to $2,000,000 which you have to raise in the next ten years for a steamship line between Canada and France. The Minister of Railways has pledged himself to a large sum of money for level crossings. And so each year brings its own new burden. These are the things which will strain .all the revenue you get, and which will use up the surplus, and more to be raised by borrowing.
Then there are your obligations. What do you suppose the Grand Trunk Pacific will cost in the mountain section? How much short of $100,000 a mile will it cost? Who will have to raise that $100,000 a mile? Now that you have opened the doors to the Grand Trunk Pacific by making that company a loan of $10,000,000, what will you have to reply to them when they come to you next year and say: 'We cannot place our securities on the British market and raise the money we require; help us or this thing will tumble and Canada's credit be ruined.' They will be able to come back with a double force. They have you on the down grade and will be able to push you as far as their necessities make it necessary for them to do so. And the expenditures of capital on your militia and great rivers and lakes-all these have to be raised, and there will be nothing left for vou to do but add immense sums to the borrowings you have already incurred. All these things are to the credit of the Finance Minister. We have had a little philosophical talk in a good-natured way, and I wish to decorate him with all those feathers, which, I am sure, he will wear with all due gratitude to the donor.


Hon. R. F. SUTHERLAND (North Essex).: The hon. gentleman who has just

spoken (Mr. Foster) at the conclusion of his speech-which I must characterize as a comparatively moderate speech for him- paid certain compliments to my hon. friend the Minister of Finance (Mr. Fielding). Let me at the outset suggest to my hon. friend (Mr. Foster) and the House, that, in my judgment, it has fallen to the lot of few men, in this or any other country, to have occupied the position of Finance Minister for thirteen years with such credit to himself and his country as the present Minister of Finance has done. And let me further say that I doubt if in any country any Minister of Finance ever had the pleasure of presenting to his people so many splendid financial annual statements as my hon. friend has had the satisfaction of doing during his thirteen year's term of office. And I submit that no one who has heard those financial statements from year to year, as I have done, couched in the clear, cheery and eloquent language and reasoning of which my hon. friend is a past master, could fail to see in them the best possible evidence of the progress and prosperity of this country during the term in which this government has held the reins of power, and at the same time the best possible proof of the sound fiscal policy of the present government. I can quite well understand how my hon. friend who has just taken his seat (Mr. Foster) finds himself considerably handicapped in his attempt to criticise our present Minister of Finance. There is scarcely a fiscal irregularity of which my hon. friend has not been guilty, there is scarcely a fiscal difficulty which he has not gone through, and all I can say is that during his term of office, that term was marked by so many deficits, that he should be the last man to cavil at the fiscal administration of the present government. He remarked that he missed somewhat the tone of hilarity in the present budget speech which the Minister of Finance displayed on former similar occasions. Surely, while others might make a comment of that kind, it comes with ill-grace from the ex-Minister of Finance (Mr. Foster) who, during the last years of his term, became quite an adept in producing deficits from year to year. He said that this paltry surplus of $1,500,000 in our financial statement for the closing year evoked a cheer from the government benches. Well, during the last three years during which my hon. friend (Mr. Foster) held office as Finance Minister of the late government, what was the condition of affairs which he presented to the country? In 1893-4 we had a deficit of $1,200,000; in 1894-5 our deficit was $4,100,000; and in 1895-6, the deficit was $350,000. So that during the last three years of his admirable management of the financial affairs of this country, the situation was such that we had deficits 146	I i ! 1	'
aggregating $5,700,000. Surely, under these circumstances much of the criticisms to which we have listened from the hon. gentleman to-night, while they might come with some grace from some others, come with rather bad grace from him.
My hon. friend spoke of the Quebec bridge. Can he have forgotten altogether the Curran bridge? And when he spoke of the Newmarket canal, to which he so characteristically referred as the Ayles-worth canal, had we not good reasons to recollect another canal which, if I were disposed to follow the example set by the hon. gentleman, I would call the Haggart ditch.
He talked about our increasing public debt, but he failed to recollect that in the eighteen years of Conservative rule, our debt was increased $118,000,000. My hon. friend talked about this country as a poor country and deplored our piling up the public debt. Well, Mr. Speaker, I do not accept that view of this country. While I am one of those who believe that the government should do as they are doing, while I believe that they should curtail our expenditures, so as to suit the existing circumstances and conditions, now happily passing, at the same time I look forward to the future in the most optimistic spirit. I look to a great improvement in our condition. With our magnificent heritage, our splendid resources and rapidly increasing population, I believe that the present financial difficulties will very soon be a thing of the past, and Canada will be again in as good a position financially as that which she occupied a year or two ago. But if we are spending money too rapidly, what are we to think of my hon. friend who made in Prince Edward Island this statement, which I find published in the ' Examiner,' a Conservative paper of that province:
For myself, I stand ready to implement our bargain with Prince Edward Island by the construction of a tunnel.
Why, Mr. Speaker, that would mean an expenditure of two or three million dollars a year, during some years. And what would our expenditure amount to if we began to give to Britain one or two Dreadnoughts, as my hon. friend, in his eloquent speech in this House a few days ago, suggested we should do?
He instituted a comparison between the request of the people for a local work such as the Newmarket canal and the building of the Grand Trunk Pacific. We all know that these local works are started by the petition of a few people in the locality; and in this particular connection, while he seemed to pay special attention to the people of the maritime provinces, he failed entirely to recollect that while in the one



case the matter was a purely local one, so far as the eastern section of the Grand Trunk Pacific is concerned, that is a work deliberately entered on by this government, which in 1904 obtained the ratification of the entire people, and was re-endorsed by the election returns in October, 1908. Then my hon. friend-and in this I think he was particularly unfortunate-spoke of ' the land for the settler,' and referred in the most sarcastic way to ' the land for the settler ' under this government. My hon. friend was very rash in many of his statements and suggestions, but in none more than in this. Let us look at the situation, let us make a comparison of the government of which he was a member and the present government on this point. I find, from a return brought down by the Minister of the Interior a few days ago, that under Conservative rule, the railway grants of land amounted to 31,000,000 acres; the total alienations of land other than to settlers, 46,000,000; and the lands for the settler to 7,900,000 acres. On the other hand, under Liberal rule, the railway grants were not thirty-one millions of acres- they were not one acre, and the alienations of lands to other than settlers amount to 7,921,000 acres. But let us come to the settler-and it was as to this that my hon. friend was particularly sarcastic in his reference to this government. We find that, while in the eighteen years of Conservative rule, only 7,900,000 acres of land went to the settler, the Liberal government has in twelve years handed over 23,590,000 acres to the settler. Could anything show more clearly the difference of policy between one government and the other in reference to this very matter which has been so important in the development of the west and of the country at large?
My hon. friend also stated that the credit of Canada was strained. In my judgment, nothing could have been better for the credit of Canada than the annual statements which have been put forward by this government. Year after year it was known and advertised to all the world that Canada was going ahead financially in an utterly unprecedented way. Year after year it was proclaimed abroad that there was a large surplus of ordinary receipts over the ordinary expenditure of the country. Nothing could more authoritatively stamp with approval the credit of the country. Another fact made known to the world was that, through the enlightened immigration policy of this government, millions of people were entering Canada, and particularly the Northwest. Another thing to establish the credit of the country was the fact that, year after year, until last year, the trade of Canada was expanding more rapidly than that of any other country in the world, or at least as rapidly as any. These are pertinent facts, Mr. SUTHERLAND.
it seems to me, to show that the credit of Canada has not been depreciated but has appreciated year after year under the management of this administration.
Then my hon. friend (Mr. Foster) undertook to deliver something of a lecture to the Minister of Finance (Mr. Fielding) on the mode of keeping our accounts, especially in relation to charging up to capital account capital and other extraordinary expenses. He seemed to suggest that the United States and Britain, and other countries also, had a different policy in this matter from ours. I have here an article published this very month in the ' North American Review,' rwfritten by Mt. Cortelyou, ex-Secretary of the Treasury, in which he discusses the very matters in controversy between the ex-Minister of Finance (Mr. Foster), and the Minister of Finance (Mr. Fielding). I think it wise to put upon ' Hansard ' Mr. Cortelyou's views on this subject. He says:
The demands upon the treasury are not likely to decline. For years the average increase has been hardly less than 15 per cent per annum, and in all probability this rate will grow greater in the immediate future, as the call is met for larger expenditures, in the extension of various government activities.
This is very pertinent language also with reference to a young and growing country like this.
These disbursements, however, are not by any means wholly chargeable to the ordinary expense of carrying on the government. In this respect, the present form of daily Treasury statements is more or less misleading. It * makes no separation between the expenditures for the ordinary service of the government and those for permanent public works, like river and harbour improvements, public buildings and the Panama canal.
How appropriate this when we refer to the Grand Trunk Pacific, a similar great national work?
In this matter, our budget differs from that of many foreign countries, where expenditures for permanent improvements are provided for by specific issues of bonds, and the amounts are stated in a separate account from the report of the expenditures for the ordinary maintenance of government; while it has been the custom of this government to make most of its appropriations for permanent improvements from current revenues, thus allowing the entire burden to rest upon the present for improvements which will largely benefit the future. It is this which has brought about the present contingency

The very fact that they are not dealing with these matters as we deal with them is given as the cause of what he proceeds to explain.
-when the receipts are falling farther and farther below the expenditures, not for obviously transient causes, which the near future will naturally rectify, but because the growing demands which we meet, in provid-

ing for future needs, outstrip the results reasonably to be expected of our present sources of revenue.
And what greater demand have we in this country than our transportation needs which we are seeking to meet by the construction of the Grand Trunk Pacific? Then he deals with the matter in this way:
For the purpose of illustration, stating our budget in the manner suggested, the account for the fiscal year which ended June SO, 1908,
would appear as follows:-
Net ordinary receipts	$601,126,118	53Disbursements	
570,477,838	81Surplus	
30,648,279	72
Extraordinary disbursements-[DOT]
Panama canal	
38,093,425	29Public buildings under Treasury Department	
9,341,364	55Reclamation service	
11,126,042	02Rivers and harbours	
30,157,649	01Reduction of public debt.. ..	34,356,750	00
Then he proceeds:
It may be a question whether all items which involve permanent capital improvement should be placed in this account. It may be proper, in some cases, to charge them to current revenue. But there can be no question that, when bonds are actually sold by the government to meet the cost of specific public works, like the Panama canal, such expenditures should be placed in a separate account, or the proceeds of the bonds sold should be accounted for as receipts.
It seems to me, in view of the reference that the hon. member made to the way of accounting in the United States, these remarks of the ex-Secretary of the Treasury are most appropriate and pertinent. But, in respect of this very question of extraordinary and capital expenditure, let us see what the hon. member's record is and that of the government to which he belonged, In 1884, the net debt of Canada stood at $181,000,000 in round figures. In 1896, it had been increased to $258,000,000, an increase of $77,000,000. What did the hon. member and those associated with him do during that time in connection with capital and extraordinary expenditure? Did they pay these in large part out of current receipts? During that period the Conservative government expended on capital and special account $94,000,000. The public debt was increased by $77,000,000. That is to say all that extraordinary expenditure of $94,000,000 except $17,000,000 was added to the public debt. That is to say, less than 20 per cent of the amount which they spent on extraordinary and capital account was paid out of revenue during that period, and 80 per cent went to increase the public debt. What is the record of the present government? We spent in twelve and three-quarter years, on capital and extraordinary expenditure, the sum of $212,000,000; we have increased the debt, up to the 31st of March, by $65,000,000; the difference is $146,000,000. We provided, not 20 per cent, but 69 per 1464
cent of that capital and extraordinary expenditure out -of current receipts, and only added to the public debt about 31 per cent. Yet my hon. friend coolly says: ' Why does not this government lay aside money in order to meet this debt? ' Why did not my hon. friend practise a little of the preaching with which he favours this House to-night?
Then the hon. gentleman speaks of the rate of 'the debt per head and the Tate of taxation. The Minister of Finance, in his admirable budget speech this afternoon, gave figures to show that when this government came into power the debt per head of the country amounted to $50, and that on the 31st of March, having regard to the estimate of population which he gave, the net debt amounted to $45 per head; that is to say, it was $5 per head less than was the debt at the time the government came into power. And I venture to predict, although that is a very unsafe thing to do in financial as well as other matters, that if the influx of population, that is already beginning to get back to the normal, keeps on as it is now coming in from the United States, in the time to come, when this government shall have been 18 years in power, the same period the former government was in power, the net debt of Canada, notwithstanding the enormous amount expended on capital and extraordinary expenditure, will be less than $50 per head of the population.
I now desire for a few moments to speak about the financial stringency. My hon. friend anticipated me a little in quoting from a speech made by Mr. E. R. Wood at the annual meeting of the Dominion Securities Corporation, on the 11th January, 1909. But while he quoted one part of that address, which I also intended to quote, he left unquoted other parts of it which I will mention, in order to show that we need not be apprehensive about the condition of this country, inasmuch as every indication shows that the country is rapidly regaining its financial position, perhaps more rapidly than any other country. Mr. Wood says:
Speaking generally, the year just closed has witnessed a wonderfully rapid advance in the value of securities, due largely to a quick return to easy money conditions.
I think perhaps I should read something more from the pamphlet in order to dispel an impression which might have been left on the House by the member for North Toronto. He made it appear that these large sales of bonds took place on account, apparently, of the extravagance of the government and that sort of thing. But Mr. Wood plainly points out with reference to many of these bonds that money was not available except at ruinous rates, and issues that would have been made had normal conditions prevailed, were held over for more favourable markets. That was the

reason among others why there was such a large aggregation of bonds, sold in 1908. But he also says this:
But even allowing for the result of the stagnation of 1907 and the issues that were held back for a more favourable market, the *volume of transactions during the past year
lias been phenomenally large, greatly exceed-'ng the record for 1905, the year of the Grand Trunk Pacific and other issues.
Then he gives the following classified list of the securities sold, with a comparative statement covering four previous years:
-	1908.	1907.	1906.	1905.	1904.Government bonds	
Municipal bonds	$ 77,598,500 47,433,911 71,325,000	$ 9,274,000 14,430,540 58,931,200	8 9,206,000 9,087,008 35,694,000	$ 346,087 9,031,160 125,497,284	$ 11,146,000 13,759,247 9,344,000
Totals...., 		196,357,411	82,635,740	53,987,531	134,874,531	34,249,247
_ These figures show the marvellous way in which the financial credit of the country is recuperating, and the financial needs of the country are being met. But he points out another fact which it is important for us to keep in mind. The banks and other institutions of that sort furnish us with much of the money that we require fox our
every day business; but the money which we require for other purposes, foT national growth and development, must come from the outside for a good many years yet. He gives the following table, showing the amounts sold respectively in the Canadian, British and United States markets in 1908:
	Canada.	Great Britain.	United States.
	8 3,098,500 17,977,390 3,059,250	8 74,500,000 25,083,271 65,871,750	
Municipal Bonds				$4,372,250 1,944,000
Corporation Bonds	 				
	$24,595,140 (124 P-c.)	8165,455,081 (84J p.c.)	$6,316,250 (3J p.e.)
			
Therefore, when we remember that for many years to come we must go outside to borrow money, particularly to Great Britain, the attitude taken by the government during the present year in making a reduction in our expenditure of well nigh $10,000,000, is a thing which, in my judgment, we should strongly endorse on both sides of the House. I think this is one of the things which will convince the British capitalist and investor that the government of Canada, in a time of stringency, is taking measures for retrenchment in order that they may keep up the credit of the country for the future when they may require to borrow in the money markets of the world.
In this connection I would like to call attention to an article in the ' Evening Journal ' of this city which shows the marvellous way in which the country is recovering from the financial stringency. On the 17th of April instant the 'Journal' published an article on the activity of building operations all over Canada. The 'Journal' Mr. SUTHERLAND.
quotes extensively from the 'Financial Post,' which it characterizes as a publication that handles all such statistics in a very conservative manner, and goes on to say that here in Ottawa the aggregate of building permits for March was $144,000 as compared with $69,000 in the same month of 1908; in Montreal the permits were $283,000 as compared with $137,000 in 1908; in Toronto they were $1,700,000 as compared with $838,000 in 1908; in Winnipeg they were $851,000 as compared with $114,000. It gives a long list of other cities, in every one of which there is a remarkable increase of building operations in contemplation as compared with the previous year. These facts bear eloquent testimony to the passing away of the financial stringency. The Minister of Finance spoke of the manner in which the revenue is commencing to go up. I have here a statement showing the exports and imnorts of Canada for the last six months of 1908 and 1909. I shall not read it in full but shall quote the figures for the last two

months of 1908 and 1909. These figures are as follows:
Grand
Month.	Total of
Imports.
February, 1908	$21,001,733
February, 1909	 23,188,668
March, 1908	 30,052,232
March, 1909	 33,836,293
This shows how rapidly the imports of the country are commencing to increase.
Now coming to the exports I find that the exports for the last six months ending March 31, 1908, were $141,814,453, as compared with $142,805,261 in 1909. But when an examination is made of the exports of 1908 it is found that for the last 6 months there are something like $11,000,000 of exports of coin and bullion while in the last six months of 1909 there are only about $495,000 of coin and bullion, so that if those were deducted the difference would be very much greater than it appears. These are some indicia of the way in which the country is commencing to pick up and gather itself together after the financial stringency of the last one or two years.
Some reference has been made to immigration. The figures for the whole year up to March 31, 1909, are not yet available, but for the eleven months ending February, 1909, there entered this country 131,000 immigrants as compared with 247,000 in the corresponding eleven months of 1908. We know that the decrease is very largely in immigration from Great Britain and continental Europe and that it is owing mainly to the warnings which the Immigration Department, through its officials, were giving to the motherland and the continent of Europe that during this time of stringency only farm labourers and those prepared to settle immediately on the land should come to Canada. So far as the United States is concerned we have this situation. For the eleven months of 1907-8 the immigration from the United States was 52,000 and in 1908-9, 50,000, almost the same, and it is a curious and satisfactory thing in this connection to notice that the Japanese immigration for the same period was reduced from 7,452 to 486, a very tangible evidence of the way in which the treaty arrangements are being carried out by the Japanese.
1 am informed and I think my information is absolutely reliable that the settlers' effects coming in from the four states of Michigan, Montana, Illinois and Massachusetts, cash and effects, amounted for the calendar year 1908 to $6,102,170, or on 5,296 immigrants from those states an average of $1,152 each. If this average is applied to the entire immigration from the United States for the calendar year,
which was 57,000, the assets thus brought in would amount to something like $65,000,000. Could anything more promote the progress and prosperity of this country than an immigration policy which would be productive of an enormous influx of settlers so desirable that 57,000 of them in one year would bring in, in assets and cash, the enormous sum of $65,000,000. We have heard a great deal for a year or two past about the number of undesirable immigrants who were coming in. The government's policy on immigration has from the start been a progressive and a satisfactory policy. As might be expected, they dealt with this question of undesirable immigration in the same prudent and far-seeing manner as with other immigration matters. What is the fact? They have on the boundary inspectors at about 111 points of entry from the United States, and during the 11 months of the fiscal year, 4,446 people were stopped at the American border and at ocean ports. Of these one-ninth were stopped at the ocean ports and eight-ninths at border points. This comparison will well illustrate the difference between the immigration policy under the former government and under this administration. The number of 4,446 people stopped as undesirables at our ports during the past year is just about the number of people that under the administration of the former government entered Canada as immigrants in 1896.
May I call your attention for a moment to the homestead entries for the last ten months of the last two fiscal years. These entries were
4997-8	 27,000
1908-9	 35,000
That also indicates the way in which the government is dealing with the immigration question.	_
A great deal has been said to-night about the Grand Trunk Pacific. I sometimes feel that we do not realize, that we do not impress upon our own minds with sufficient seriousness, the remarkable work that this government has been doing in connection with transportation during the last 12 or 13 years. We all know that for 30 or 40 years, the project of a 14-foot canal from Lake Superior to tide water has been discussed. I know that as far back as 1865, when a great trade convention was held in Detroit, to which representatives came from all parts of Canada and the United States, the project of a 14-foot waterway from the upper lakes to the St. Lawrence was discussed. Was that ever accomplished? Never until this government came into power. They at once commenced to expend large sums of money for the purpose of making an accomplished fact what had been talked of since 1865, and in 1900

we had completed a 14-foot waterway from Lake Superior to tide water. Then the government abolished the canal tolls. They dredged rivers and harbours and built wharfs. Then they entered upon the great project of the construction of the National Transcontinental Railway. One would sometimes fancy, particularly when listening to the hon. member for North Toronto (Mr. Foster), that is not a road in which the people of this country are interested. Twice we have had the ratification and endorsation of the people of this country of that great project. That road was conceived, as we know, for several nur-poses, first as a continental and imperial transportation road, second as a colonization and developement road for that new Northland, and third for the reduction and regulation of freight rates, and we have been learning on the most expert engineering testimony that what was predicted as one of its greatest features, the four-tenths per cent grade from the foot of the Yellowhead Pass to the sea-board, that is from a point beyond the wheat fields to tide water, will undoubtedly be secured when the road is completed and that we will have a road unequalled in any other country in the world. We have spent, as the Minister of Finance has intimated, a large sum in connection with the Grand Trunk Pacific. We have spent $20,000,000 on canals, $30,000,000 on the Intercolonial Railway, $7,000,000 on the Montreal Harbour and River St. Lawrence Ship Channel, we have spent $2,000,000 on the harbours of Fort William and Port Arthur and Port Colborne, and large amounts on many other important works. These large expenditures are necessary in a young and growing country for the purpose of developing the transportation facilities without which it is useless for us to tempt people to come to Canada, because unless we provide the facilities for them to enter the country and to transport their products to market, the great influx of immigrants will quickly cease and this country will not progress as we hope to see it. Then, we are looking to the building of the Hudson Bay Railway, and the new Minister of Railways (Mr. Graham) has also taught us to look to the possibility of the deepening of our canals from 14 feet to 18 feet. And, who is there who looks to what we are doing in transportation, and who looks also at the desperate efforts the Americans are making in various directions to compete with us, but must come to the absolute and irresistible conclusion that if we construct an 18 foot waterway canal, for all time to come we will have the people of the United States handicapped in the transportation of grain from the west to the sea-board.
The hon. member (Mr Foster) did not Mr. SUTHERLAND.
spend much time speaking of the tariff policy of this government, and it has not been usual for hon. gentlemen opposite to dwell much upon that of late. It is only a year or two ago that we saw in this House a curious spectacle. A partial reduction having been made by the government on the duties on agricultural implements, in recognition of the fact that a tariff only for revenue is the policy for this government and that the wants and wishes of the great agricultural classes should be safeguarded, one of the Conservative members from the west moved an amendment and we had the extraordinary spectacle that the policy of the government in this matter was so satisfactory to the leader of the opposition, to the hon. member for North Toronto (Mr. Foster to the hon. member for Grey (Mr. Sproule), to the chief whip of the Conservative party who has recently become so interested in ladies, and to five or six of the leading men on the or>r>o-sition side, that they were found voting to sustain the government. When one looks at the fiscal record of the government one cannot but recognize the marvellous ability and capacity they have shown. The tariff of this country since 1896 has, we might say, been dealt with along three lines. There is first the imperial line. For the first time in the history cf the British empire, a colonial government offered and gave to the mother country a preference in Canadian markets, and that preference later on was extended to other portions of the British empire. That was an imperial step followed by other imperial steps in the negotiations with the colonies which this government entered into in connection with tariff matters. In the second place, the Canadian government entered upon what might be characterized as an international fiscal policy. When we found that Germany was improperly, as we thought, penalizing Canada by the application of her maximum tariff we placed against her the surtax. Again, when we found certain manufacturing concerns in the United States so generous to the Canadian purchaser that they were prepared to sell goods to consumers in Canada at less than the current prices in the United States, the government put an end to that which they considered utterly unfair competition to the manufacturers of this country, by introducing the anti-dumping legislation into the Canadian tariff. I live upon the border,
I live where, as in the town of Walkerville, there are large manufacturing concerns, and I know of the splendid effect which on the whole that anti-dumping clause has had. And again, this government introduced into our fiscal policy the intermediate tariff which the Finance Minister announced is to be utilized by this government for the purpose of negotiating with the governments of

ether countries with a view to establishing better trade relations between them and us. But, to my mind the chief feature of the tariff after all is that it is a tariff for revenue, and, on the admission of the hon. member for North Toronto we have been getting revenue through that tariff. Never did any previous tariff in Canada produce revenue as did the tariff known as the Fielding tariff. The Minister of Finance has given figures to indicate the marvellous progress of the country under the policy of the government, and at this late hour I shall not follow him in that regard, but I would like to mention another policy of the present government, upon which they have just started, and which I believe to be of vital and paramount importance to the welfare of the country. One of the things that leads me-and I say this conscientiously and honestly-to be as firm in my adherence to and support of the government as I was ever before, is that they are going forward step by step and making progress in every direction. A Liberal government could not stay in power and be other than progressive. There is one line of development in which the government can even go beyond what it already has done; I refer to the conservation of the natural resources of the country. It may well be said that while the right hon. the Prime Minister is entitled to the gratitude and praise of the people of Canada for many things, perhaps in time to come what will be looked upon as one of the chief benefits he has conferred on the country is, that at his invitation there was a great forestry convention held in Ottawa in February, 1906. In his speech at the opening of that convention the right hon. gentleman said a number of things which are well worthy of being remembered, and I may be pardoned if I now make a short extract from his speech on that occasion, so that it may be_ published in ' Hansard ' and thus perhaps receive more attention than it otherwise would. The right hon. gentleman said :
In the name of the Canadian Forestry Association, which has conceived and planned this conference, and in the name of the Canadian parliament which has authorized and approved of it, it is my privilege and my pleasure to extend to you all a most hearty greeting. Welcome to one ; welcome to i all. Especially should I welcome, even after the words of His Excellency the Governor General the representatives of the American Republic who are present with us on this occasion, and who bring to us the benefit of their knowledge and experience. Welcome also to the representatives of the provincial governments, without whose aid and co-operation our efforts could never have the full fruition which we anticipate from them. Welcome also to the representatives of the great railway companies which are. placed in a position to give, perhaps, more than any other class of the community, the benefit of their experience and knowledge to us. Welcome also to the representatives of the great lumbering class, who, perhaps, are more interested than any other class of the community in the maintenance, preservation and protection of the forests. Welcome to the university men whom we see before us, welcome to the traders, welcome to the sportsmen, welcome to all classes who are present, and who are ready to contribute of their time and of their money to the great object we have in view, and which is an object of primary national importance.
These are words which are very applicable to the subject to which I am just now referring. Then, I understand that very recently the government has, by refusing to give a license for the exportation of natural gas in the Welland district, entered upon a new departure in the way of conserving that natural product. I am sorry that action along this line was not taken some years ago, to save the same product for us in the west. In connection with the control of power at Niagara Falls, in connection with the Waterways Commission and its work, in connection with tree planting in the west, and in connection with the establishment of several thousand miles of forest reserves on elevated areas, the government are developing a strong policy of conservation of natural resources. These forest reserves are: in Manitoba-in the Riding mountains, the Duck mountains and the Porcupine mountains. In Saskatchewan-in the Beaver hills, the Moose mountains, the Turtle mountains and the Cypress hills; in Alberta-in the Cooking Lake range, Jasper park, Banff park, Kootenay Lake park; and in British Columbia-on the western slope of the Rocky mountains, Yoho park, Glacier park, and a number in the dry area. Again by accepting the invitation of the United States government and sending three very capable representatives of Canada to the Conservation convention at Washington, the government showed its interest in this great question. I understand that the Washington convention recommended that a permanent commission should be appointed for each country, and I hope the government of Canada will at as early a date as possible appoint a good strong commission to deal with that question from a national standpoint.
Before I close I wish to refer to the criticism of the hon. member for North Toronto in regard to the rapid increase of the public debt. It is quite plain that the hon. member practically admits that apart from the requirements of the Grand Trunk Pacific Railway, the increase of the public debt is very trifling. The hon. gentleman said, according to ' Hansard ' of March 17, 1908, volume 3, page 5181:
In 1887 the public debt was $227,000,090; in 1896 it was $258,000,000; increase in nine vears, $31,000,000.

In 1908 it was $275,000,000 ; increase in twelve years, $17,000,000.
Up to the present time, leaving out 1908, there has been under this government a comparatively small increase of the debt.
So that practically the hon. gentleman's criticism bears upon the large expenditure for the Grand Trunk Pacific. But if he recollects the record of the Conservative government for the years 1884, 1885 and 1886, he will know that that was a period when the Canadian Pacific Kaiiway was under construction, just as the Grand Trunk Pacific is to-day; and during 1884 the public debt was increased $23,695,135; during 1885, $14,245,841, and during 1886, $26,751,414, or a total increase in those three years of $64,000,000. If this enormous increase in the debt of this country in those years, when the Canadian Pacific Bailway was being constructed, was fair and right in the judgment of the hon. member for North Toronto, why is it not equally proper that the debt should be increased now when we are engaged in the construction of another great transcontinental railway?
In my judgment the government has given us a tariff for revenue which is up to date and adequate to our wants; it has adopted a live and progressive transportation policy, an active and satisfactory immigration policy, a policy that attracts capital and impels foreign concerns to come here and build factories, a policy looking to the conservation of our great resources, and a policy that promotes and increases the output of all our great and leading industries. So long as the government continues the advanced and progressive policy which it has given to this country for the past twelve or thirteen years, so long will the right hon. gentleman who leads the government and the members of the cabinet who surround him retain the confidence of the people, and each time they go to the polls they will receive the popular endorsation which was given to them in October, 1908.
Mr. PERLEY moved the adjournment of the debate.


[Stage Direction]
Motion agreed to, and debate adjourned.
On motion of Sir Wilfrid Laurier, House adjourned at 10.55 p.m.
[Stage Direction]
Wednesday, April 21, 1909.