1914-08-21

WAR MEASURES BILL.

Hon. C. J. DOHERTY (Minister of Justice):: I beg to lay on the table the report of the Special Committee appointed to consider Bill No. 2, to confer certain powers upon the Governor in Council, and to amend the Immigration Act. I beg to move that Bill No. 2 be placed on the Order Paper for consideration in Committee of the Whole this day,


Mr. GRAHAM:: Does the hon. gentleman desire to proceed with the Bill to-day?


Charles Joseph Doherty: We hope to be able to proceed with the Bill to-day. The committee has reported the Bill with certain amendments.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. J. D. HAZEN laid on the table copies of Orders in Council relating to the organization of a Naval Volunteer Force, as follows:
No. P.C. 1978, dated 1st August, 1914- discipline of the Naval Volunteer Force.
No. P.C. 1979, dated 1st August, 1914- daily rate of pay.
No. P.C. 2049, dated 4th August, 1914- placing of H.M.C. ships Rainbow and Niobe, with their officers and men, at the disposal of His Majesty.
No. P.C. 2050, dated 4th August, 1914- placing of Naval Forces and Naval Volunteer Forces on active service.
No. P.C. 2072, dated 7th August, 1914- H.M.C. submarines placed at the disposal of His Majesty.
Mr. HAZEN also laid on the table:
Amendment to Radiotelegraph Regulations, under section 11 of the Radiotelegraph Act, Statutes 1913, chapter 43.

[Stage Direction]
Mr. R. BICKERDIKE (Montreal, St. Lawrence) moved for leave to introduce Bill No. 6, to amend the Criminal Code.
Motion agreed to, and Bill read the first time.

[Stage Direction]
Hon. ROBERT ROGERS (Minister of Public Works) moved for leave to introduce Bill No. 7, to incorporate the Canadian Patriotic Fund.
Motion agreed to, and Bill read the first time.
Mr. ROGERS:: With the consent of the House I beg to move that this Bill be now read the second time.


Sir WILFRID LAURIER:: We have not yet had an opportunity of reading the Bill.


Robert Rogers: The object of the Bill is to incorporate the Canadian Patriotic Fund for the purpose of collecting, administering and distributing funds for the assistance in case of need of the wives, children and dependent relatives of officers and men who during the



present war may be on active service with the naval and military forces of the British Empire and Great Britain's allies.


Wilfrid Laurier: This is the first we have heard of this Bill, and one would like to see what is in it, and how the powers are to :be constituted.


Robert Rogers: If my right hon. friend has any objection, we shall toe glad to let the matter stand.
Motion stands.



PROPOSED FURTHER RECRUITING.

[Stage Direction]
On the Orders of the Day toeing called:
Mr. GERMAN:: I would like to call the attention of the Government to the fact that there is rather a widespread feeling in the country among a certain class of men who are militarily disposed to know what is likely to happen in regard to the recruiting and mobilization of volunteers after the contingent that is now being mobilized at Val-cartier has been sent forward to Europe. I would respectfully request the right hon. the Prime Minister to give us some information as to whether or not the Government intends to continue recruiting and mobilizing men who may choose to enlist for war purposes, either abroad or at home.


Sir ROBERT BORDEN:: There has not been any determination, so far as recruiting for further service abroad is concerned. Any question such as my hon. friend suggests will have to be considered and determined in accordance with events which none of us can predict. So far as the defence of Canada is concerned, the active militia will be called out from time to time to the extent that may seem necessary.



PROVISION FOR FAMILIES OF VOLUNTEERS.

[Stage Direction]
On the Orders of the Day being called:
Wilfrid Laurier: I understood the other day from my right hon. friend that provisio' would be made for the families of those who are going to the front. So far no legislation with that end in view has been brought down, unless it is the legislation to be embodied in the Bill of my hon. friend the Minister of Public Works. Is there any other provision to be introduced?


Robert Laird Borden: The matter to which my right hon. friend alludes has engaged the attention of the Government to some extent. In the first place, there is

a patriotic movement, of which the right hon. gentleman is aware, and the Bill which has been introduced to-day by the Minister of Public Works is intended to arrange for the systematic organization of that movement.


Wilfrid Laurier: In addition to private subscriptions to this fund, is it the intention of the Government to make any appropriation?


Robert Laird Borden: We shall supplement that to. any extent that may be necessary. We have not brought down any measure for the purpose up to the present time, and we are not absolutely sure that we shall bring it down this session. But it is the intention of the Government to supplement private effort in that regard, which we do not think it desirable to discourage in any way, to such extent as may be necessary to make provision for the families and dependents of those who go to the front to fight for their country in this crisis.


Wilfrid Laurier: Either this
session or next session?


Robert Laird Borden: Yes. It may be that we shall be able to deal with the matter this session. (But my right hon. friend will understand that many matters have been pressing upon us.


Wilfrid Laurier: Yes.


Robert Laird Borden: This is not a matter that must necessarily be dealt with this session, but we would like to deal iwith it now if we can.



CANADA'S GIFT OF FLOUR TO BRITAIN.

[Stage Direction]
On the Orders of the Day being called:
Mr. 8CHAFFNER: A statement was made in one of the city newspapers yesterday and has been copied in other papers which I would like the Government either to confirm or deny. That statement was to the effect that the million bags of flour purchased by Canada for the purpose of being sent to Great Britain were purchased in the United States.
Robert Rogers: The purchase of one mil-ion bags of flour was made from large milling companies in Canada; the Ogilvie Milling Company, the Western Canada, the Maple Leaf, and the Western Flour Mills. It was distinctly understood with these millers that the flour to be delivered under the contract was to be made entirely of Canadian wheat, and I am satisfied that

these millers iare carrying out their contract. I have never heard anything to the contrary except rumours which have been published in the press, but which are entirely incorrect.


Wilfrid Laurier: On the same [DOT]subject, I saw another -statement a few days ago that the sacks for the flour were bought in the United States.


Robert Rogers: I may say that the sacks were purchased in the city of Montreal.



ENLISTMENT AT PRINCE RUPERT.

[Stage Direction]
On the Orders of the Day being called:
Mr. PARDEE:: I desire to draw the attention of the Government to a telegram I have received:
Prince Rupert, Aug. 19, 1914.
August 6th Stork was wired by Ottawa to enlist men for front. Enlisted hundred. On tenth August received wire from D.O.C., Victoria, that Ottawa instructions were error. Nothing done since. Men who enlisted disgusted ; others ready can't go; hundred and sixty Irish Fusiliers from Vancouver arrived Sunday to protect us; situation galling to all independent citizens.

G. Manson.
I desire to ask the Government for a statement with regard to this report.


Robert Laird Borden: I am not familiar with the details of the matter to which the hon. gentleman alludes. I will bring his inquiry to the attention of the Milliter of Militia, and hope to have an answer to-morrow.



WAR MEASURES BILL.

[Stage Direction]
On motion of Hon. O. J. Doherty (Min-iter of Justice), the House went into Committee to consider Bill No. 2, to confer certain powers upon the Government in Council and to amend the Immigration Act, Mr. Blondin in the Chair.
On the preamble:
Mr. MACDONALD:: I would like to know whether this Bill contains power to deal with certain matters which some business men in the country have been discussing, namely, the position of patents held in Canada by citizens of Germany, Austria or any other country with which Great Britain may be at war. It has been stated that some action was taken or was about to be taken in Great Britain in regard to that matter. I assume that pending hostilities royalties could not be collected upon these patents, but the Bill has gone through so quickly that I have not been able to 4 h
follow it and ascertain whether power is conferred on the Government to deal with these patents if in the interest of the country or for reasons of reprisal or otherwise it should be prudent to do so.


Robert Laird Borden: It is thought that all necessary powers are covered by the Bill. As I understand the situation, on the outbreak of war rights of the character to which the hon. gentleman alludes and many others are suspended, but according to international usage they revive on peace being concluded. As to possible action by any foreign power with which we are at war, that also is dealt with. It is thought that sufficient powers are conferred under the terms of the Bill.
Bill reported, read the third time, and passed.



COMMERCIAL AND FINANCIAL INTERESTS BILL.

[Stage Direction]
On motion of Sir Robert Borden, Bill No. 4, to conserve the oommerciial and financial interests of Canada-Hon. W. T. White (Minister of Finance)-was read the second time, and the House went into committee thereon, Mr. Blondin in the Chair.
On the preamble:
George Perry Graham: I should like to call the -attention of the Government to a matter which possibly it might be well to consider *at the present time in connection with the financial situation. Certain companies dealing with .the public are under strict Government supervision and inspection. Once a year the securities in which these companies invest-and they invest practically all their money in securities-are valued by the Finance Department, and the value given approximates at least the value on that day in the open exchange. For instance, a municipal bond or debenture held by .a company, for which 100 per cent has [DOT]been paid, though it is really good and its intrinsic value cannlot be changed, is given a value which is the value at which the bond could be sold on that day.
I need not explain that if a valuation of that kind were made, under present conditions, the assets of a great many pf these companies would be interfered with materially. Possibly the department has full power now to take into consideration all the exceptional circumstances and place on these securities a value which they have had and will have as soon as the trying circumstances under which we are placed have passed. If not, I think it would be

wise for the Government to consider the advisability of taking power under this Bill or some ether to enable the department to deal with that matter, because if they are bound to take to-day's values when they make the valuation it is plain that great havoc will be worked and great injustice done without conferring protection on any person.


Robert Laird Borden: The point Taised by my hon. friend is important. I cannot say at the moment whether or not it has engaged the attention of the Minister of Finance. I shall take an immediate opportunity of bringing it to his attention. I entirely agree in the suggestion that some steps should be taken to prevent a false impression being created by reason of the extraordinary conditions in which we are now placed.


Wilfrid Laurier: As I understand the drafting of this Bill, it is a permanent statute, not a temporary statute. I did not think that was the intention.


Robert Laird Borden: Section 4, which is the important section, provides.:
In case of war, invasion, riot or insurrection, real or apprehended, and in case of any real or apprehended financial crisis, the Governor in Council may, by proclamation published in the Canada Gazette,-*


Wilfrid Laurier: Then, if there should be a war next year this law would apply?


Robert Laird Borden: Yes.


Wilfrid Laurier: I thought the intention of the Bill was to have it temporary, simply for this war and not for any other war that may arise in the future. We have had no war for one hundred years in which we have had to take a part, and I hope it will be another hundred years before we have another. I did not understand that it was intended to keep this law upon the statute-book.


Robert Laird Borden: We shall let the Bill stand in the committee until a later hour. I would move that the committee rise, report progress and ask leave to sit again this day.
Progress reported.



WAR APPROPRIATION ($50,000,000) BILL.

[Stage Direction]
On motion of Sir Robert Borden, Bill No. 3, for granting to His Majesty aid for military and naval defence, was read the second time and the House went into committee thereon, Mr. Blondin in the Chair.

On section 2-payment of $50,000,000 may be made:
Robert Laird Borden: As has already been explained, by the Order in Council which has been brought down, the proposal is, in the first place, to make provision for such portion of the active militia of Canada as may be called out for the actual defence of our own shores, both on the Atlantic and the Pacific, and elsewhere in Canada, wherever there may be apprehension of invasion or attack of any kind during the progress of the present war. In the next place, it is proposed, in accordance with arrangements which are set forth in the Order in Council 'brought down, that a division, comprising about 22,318 men, shall *be provided by voluntary enlistment, for the purpose of aiding and co-operating with the troops of His Majesty in the field of operations. The Order in Council states certain particulars with regard to the force, and I have other details under my hand which I shall give to the committee if desired. The actual cost of equipping a force and maintaining it for the period of one year, that is, the total cost of equipment, pay and maintenance, is estimated at about $1,000 per man. I have the details of the equipment required and I am ready to give such further information as the committee may desire, so far as I have it available.


Wilfrid Laurier: This provision of $50,000,000 is distributed under four heads:
(a)	the defence and security of Canada;
(b)	the conduct of naval and military operations in or beyond Canada;
(c)	promoting the continuance of trade, industry and business communications whether by means of insurance or indemnity against war risk or otherwise ; and
(d)	the carrying out of any measures deemed necessary or advisable by the Governor in Council in consequence of the existence of a state of war.
I think it advisable that we should take up each of these heads and have it explained somewhat in detail. First of all, the defence and security of Canada. This comprises the equipment and maintenance of the Niobe, the Rainbow and such other ships as we have. That would come under the Department of Naval Affairs. It comprises also the purchase of the two submarines which we were told of the other day and their equipment. I do not know whether these two items include all that is intended to be expended under this head. If more is to be expended we would like to know the amount which is to be appro-

priated out of the $50,000,000 for that purpose.


Robert Laird Borden: The Minister of Naval Affairs has informed us that he is contemplating a possible expenditure of $6,000,000, but he does not anticipate that it will exceed $4,000,000. That is exclusive of the submarines, which were purchased at a cost of $1,150,000. That is really about all I can say with regard to the part which concerns the Naval Service. As far as the military part is concerned, the explanation L have is as follows:
Mobilization and Canadian Overseas Contingent.
Required to March 31, 1915:
Pay of 25,000 men for 7 months $6,100,000
Rations for 25,000 men for 7
months at 40 cents	 2,100,000
5,000 horses at $200	 1,000,000
Forage for 7 months at 60 cents. .	600,000
Subsistence of troops prior to
arriving at Quebec	 275,000
Transport of men, horses, guns
and equipment to Quebec. . . .	450,000
Ocean transport	 1,000,000
Transport abroad	 300,000
Return transport to Canada. . .. 1,450,000
Engineer services at Halifax, Quebec and elsewhere	 500,000
Equipment	 2,400,000
Clothing	  3,300,000
Dominion Arsenal-ammunition 660,000
Censorship-7 months	 150,000
Pay, etc., of detachments of troops on guard at various places in
Canada	 2,000,000
Movements of troops, ammunition, etc., to various places in
Canada	 100,000
For additional troops and unforeseen expenses	 7,615,000
Total	$30,000,000
The pay and rations have been estimated for seven months, but it is not very probable that the troops will return within that time. The censor staff, which is under the Department of Militia and Defence, comprises a very considerable number of men who are required for the purpose of maintaining an effective check upon the telegraphs and the various cable stations on the Atlantic and Pacific coasts, and also on the wireless stations. In regard to the
item of $100,000 for movements of troops, ammunition, etc., I may say that we have been required from time to time to move troops and guns very suddenly, so an estimate has been included for that purpose.


Mr. PUGSLEY:: Are the million bags of flour which are to be sent to England to be paid for out of this vote?


Robert Laird Borden: The Minister of Finance is of the opinion that that might be done.


William Pugsley: No other vote is to be taken for that?


Robert Laird Borden: We have not
contemplated any other vote, but if the House thinks it necessary, it could be considered.


William Pugsley: I have a very strong
feeling that this Gvernment could not do better in the interests of Canada, or anything which would be more appreciated by the people of this country, than to make a similar contribution to the Kingdom of Belgium. The people of Belgium have been fighting the battles of the empire and the battles of Canada, and have displayed heroism which has never been surpassed in history.	For many days they have
held back the whole German army while the allies were preparing for a great and, as we trust, a successful defence.	We are sending a million
bags of flour to England, and we propose to do something for France in the way of establishing a hospital, and I think the Government ought certainly to consider some recognition of the heroism shown by the Belgian troops. I do not think we should confine our recognition of services to Great Britain and France, and I make that suggestion for the consideration of tlhe Government.
While upon my feet, I would like to ask the Minister of Marine and Fisheries one or two questions with regard to the submarines that have been purchased. At what Shipyards were these submarines built and equipped, and what was the cost of their construction?


Mr. HAZEN:: The submarines referred to were purchased at Seattle. They were originally built for the Government of Chili, but for certain reasons were not delivered to the Chilian Government. The amount paid was $1,150,000, and before purchasing we had the advice of the Admiralty as to the desirability of doing so.


William Pugsley: What are the names of the boats?


John Douglas Hazen: They were not named when we bought them.


William Pugsley: The reason I ask is because I see in the Naval Annual that only two submarines were being built for the
Chilian Government last year, and these were being built at the Electric Torpedo Shipyards. I saw a newspaper statement that these two submarines were built at those yards, but my bon. friend is sure that they were built at Seattle?


Robert Laird Borden: They may have been built in New York and taken to Seattle.


Mr. AMES:: I was in Seattle the day
they were purchased. The submarines were primarily assembled in New York, and the parts were afterwards sent to Seattle and put together there.


William Pugsley: Then the statement in
the Naval Annual is correct, that they were built at the Electric Torpedo Shipyards, which, I may say, are closely connected with the Fore River Shipyards, of which my hon. friend has heard. I am glad to tell my hon. friend that notwithstanding the alleged bankruptcy of that company they have recently turned out for the United States Government perhaps the largest battleship afloat. I am glad to observe that the Government has transferred these submarines to the British Admiralty. They are now under the control of the Royal Navy, are they not?


John Douglas Hazen: At the disposal of His
Majesty.


William Pugsley: I am very glad to see
that that was done under the sections of the Naval Service' Act. I would like to ask my hon. friend further with reference to the Order in Council dated August 4, which I will read:
The Committee of the Privy Council have had before them a report, dated August 4, 1914, from the Minister of the Naval Service, submitting that section 23, of the Naval Service Act, chapter 43 of the statutes of 1910 provides that:
23. In case of an emergency the Governor In Council may place at the disposal of His Majesty, for general service in the Royal navy, the Naval Service or any part thereof, any ships or vessels of the Naval Service, and the officers and seamen serving in such ships or vessels, or any officers or seamen belonging to the Naval Service.
An emergency having arisen, the minister recommends that H.M.C.S. Niobe and
	|
H.M.C.S. Rainbow1 , together with the officers and seamen serving in such vessels, he placed at the disposal of His Majesty for general service in the Royal navy.
The committee concur in the foregoing recommendation and submit the same for approval.
Rodolphe Boudreau,
Clerk of the Privy Council.
Has the Admiralty accepted the offer of these two ships for service in the Royal navy?


John Douglas Hazen: The Admiralty has accepted the offer made by Oanada.


William Pugsley: What is the result of
that? Does the British Admiralty take charge and pay for the equipment and maintenance, or does Canada continue to maintain and man the ships and pay for the equipment and manning.


John Douglas Hazen: We are continuing to pay for the equipment and manning.


William Pugsley: I observe from the newspapers that although the Niobe has been transferred to the Royal navy she is not yet fully in commission. What is the reason for the delay?


John Douglas Hazen: The Niobe is, of course, in a sense in commission, but she will not be ready to sail until the 1st of September. At the request of the British Government, the men on the Niobe were sent out to British Columbia to go on board the Rainbow for the purpose of cruising in the Behring sea; but when the war broke out that was changed and the Rainbow was put into service for the pjotection of British shipping on the Pacific coast. The Niobe is being manned with ex-naval service men in Canada, many of whom have already reported for service, and by the crews of the Algerine and Shearwater. These vessels are being laid up by the British Government at Esquimalt, and the crews are being sent across the continent to Halifax to help to man the Niobe. My information is that the Niobe will be ready to sail on the 1st September.


William Pugsley: It was stated by the St. John Globe, which usually has authoritative despatches from Ottawa as to what the Government is doing, that considerable delay was occasioned by the cleaning out of the boilers of the Niobe, or the removal of the solid material which had been placed in the tubes to prevent them from rusting.
I would like to ask my hon. friend if he has any information as to whether the guns were removed from the Niobe several months ago?


John Douglas Hazen: The guns were hot removed from the Niobe. There had to be certain work done in the way of repairing the vessel for sea and making preparations for war, which included to a certain extent attending to the boilers and other parts of the machinery. That work is being done.


William Pugsley: How long has that work been going on?


John Douglas Hazen: About ten days or two weeks.


Mr. LEMIEUX:: We were speaking a moment ago of the various contributions which had been made by the present Government. In that connection may I be permitted to say that I have received a letter from the Prime Minister of Quebec stating that he has offered the Imperial authorities 4,000,000 lbs. of Canadian cheese as a contribution from the province of Quebec. I heartily concur in what has been said by my hon. friend from St. John about Belgium. If the Government thinks it better to do something in the same way as was done for France, might I offer a suggestion? One of our colleagues, the hon. member for Beauce (Mr. Beland), happens to be in the war zone at the present time, and I was informed last night by a member of this House, who is just back from Europe, that he met Dr. Beland the day after the declaration of hostilities took place. Dr. Beland very loyally offered to devote his services, for medical and hospital purposes during the whole time of the war, to the Belgian authorities. If the Government, instead of offering cheese, or oats, or other commodities, thought it better to offer beds for hospitals, as they did, and quite properly so, to the French authorities, might I suggest to my right hon. friend and to the Belgian consul here, that it might be well to give Dr. Beland the direction of that service on the other side of the water? I need not say that Dr. Beland is one of the most distinguished members of the profession, both as a doctor and a surgeon, and that he would be a credit to Canada if be were entrusted with the direction of that hospital service in Belgium.


Robert Laird Borden: I appreciate what has been said by my hon. friend from St. John (Mr. Pugsley) in regard to the wonderful gallantry that the Belgians have displayed in defending their country and the remarkable resistance they have offered to the invading army. The Government will be glad to take into consideration what has been suggested, but, on the other hand, it must be remembered that we have entered
into a very great war for the purpose of preserving Belgian neutrality and independence, and, as far as the press reports indicate, a very large force has been sent to Belgium for the purpose of protecting that country. Whether, under the circumstances, it would be incumbent upon us to make the same offer to Belgium that we did to France may be a matter for consideration. I do not desire to offer any definite opinion upon the suggestion at the present time.


Mr. A. K. MACLEAN:: 
Alexander Kenneth Maclean: What is the system with regard to forage and food supplies?
Mr. SAM. HUGHES: We have asked for forage all over the country. I .am asking every member of Parliament and every buyer to send in the names of persons who can supply forage. We are sending out instructions to communicate the names of persons who have horses to sell to General Benson.


Alexander Kenneth Maclean: The phraseology
of section 2 follows the resolution passed by the British House of Commons in con-

nection with the credit vote, and I suppose that, when incorporated in a Bill, the language will be much the same. Could the Government apply a portion of the vote proposed by this Bill for, say, charitable purposes to relieve distress during the coming months if they saw fit?


Robert Laird Borden: I would think we could do that under subsection (d), We have purposely made this as broad as possible because one cannot foresee all contingencies.


William John Macdonald: I would ask the
Minister of Militia to make a statement of authoritative character in regard to the destination of the troops who are now gathering at Valcartier. There seems to be in some portions of Canada some misunderstanding as to the nature of that gathering. It has been stated that the first 20,000 men are to go direct to Belgium, to enter immediately into active service, and that my hon. friend has so communicated to the War Office. I do not want to get any information which might in any way conflict with the very proper secrecy of military operations, but from the .standpoint of volunteering, and from that of those who are interested in the volunteers who are offering their services, I think the minister ought, so far as he possibly can, to take the House and the country into his confidence, so that we would know exactly what the position is in regard to these men who are volunteering to go to the war.


Mr. SAM HUGHES:: The hon. gentleman will observe by the Order in Council and by the reports from the other side, which I believe have been laid before the House, and published, that the British authorities have accepted -the offer of assistance.
When we asked what the nature of that assistance should be, they stated they would like a division. We are simply preparing to send a division forward. We have nothing whatever to .say as to the destination of the troops once they cross the water, nor have we been informed as to what their destination may be. A great many troops will always be required, not in the immediate fighting line but leading up to it, and I presume that in due time our boys will take their turn with the rest of them. We have no information on the subject whatever.


William John Macdonald: I assume that the
division which is being sent will comprise about 20,000 men. Does the minister intend to mobilize any additional force at Valcar-

tier or at any other place in Canada, by way of preparation? A large number of men have already volunteered; and I have no doubt that as the war goes on many more will volunteer. Does the Government intend to prepare for the training of these men in any definite way, so that, if their services are required, they will be all the better trained for utilization?


Robert Laird Borden: I answered a
few moments ago practically the question which my hon. friend has addressed to the Government, when I said that, in addition to the force that is to be sent overseas, there would be a certain number of the active militia on active service for the defence of Canada at Atlantic, Pacific and other points, but that beyond that we would not go at the present time, and that our course in the future with regard to the subject which my hon. friend has brought up would have to be determined by contingencies which we cannot foresee at present.


William John Macdonald: Would the minister say what special use is being made of the permanent force at Halifax and other points? Are the officers of the permanent force to be sent on this contingent, or is it to be confined entirely to volunteers?


Robert Laird Borden: I would like
my hon. friend not to press that question just at present. There are some confidential communications which are not ready to *be made public at the moment, and which make it undesirable for me to say anything on that subject at the present time. Did my hon. friend inquire as to the disposition of the officers?


William John Macdonald: What I was asking more particularly was whether the force to be sent over was to be selected, so far as the officers and men were concerned, wholly from the volunteers, or whether any of the officers attached to the permanent force were to be attached to the force that is being sent.


Robert Laird Borden: One regiment
of cavalry and two batteries of horse artillery are to go from the permanent force.


William John Macdonald: Has anything been
done in the way of providing an engineering corps? The minister has doubtless had offers of service from engineers. Has anything been done by which their services can be utilized?
Mr. SAM. HUGHES: An engineering corps is going and we are utilizing a num-

ber of the permanent corps as instructors. We are sifting out the best engineers we can find in this way to form an engineering corps. In addition to that, the Canadian Oeneral Electric Company of Toronto, under the direction of Mr. Nicholls, has *offered twenty-five men, not for service abroad, but for service in Canada. Sir John Jackson has offered his entire engineering staff to the service of the Government. In fact, offers of service are coming in splendidly from every part of the country.


William John Macdonald: Under subsection 'c,' under which this money vote is to be utilized by the Government for ' promoting the continuance of trade, industry and business communications, whether by means of Insurance or indemnity against war risk or otherwise,' I would like to call the attention of the Minister of Railways, if he were here, to a situation which exists in connection with the coal trade at Halifax. Every hon. gentleman was pleased to hear of the offer made by the province of Nova Scotia to furnish 100,000 tons of coal for the use of the British Government. As the war goes on, the port of Halifax will naturally be one to which vessels flying the British flag will resort for coaling purposes to a greater degree than perhaps ever before. At the present time the Intercolonial railway has no facilities whatever at the port of Halifax for delivering at the wharfs, or in any way in which it can be transported to vessels, naval or otherwise, the coal which would come over the Intercolonial railway. In the past, the bunker coal trade of the port has been handled by the vessels which communicate with the coal mines of Cape Breton. It is desirable and absolutely necessary that the Intercolonial railway should be put in a position to handle coal from the mainland collieries, and I understand that the attention of some of the members of the Government has been called to the situation. I am speaking on behalf of the people of my own constituency and that of Cumberland, who would like to be put in a position to deliver at the port of Halifax coal from their mines. At the present time, on account of lack of facilities on the Intercolonial, they cannot do so. I am informed that the defect could be obviated, at no very great expense, by the building of a siding into the dockyard, and also that the matter was submitted to the Imperial authorities some years ago with a plan providing for such a siding. It may seem a small matter, but we are looking ahead to the welfare of our province, and when we
consider the position which Halifax will occupy as a shipping port, especially during the winter months, we should take steps to have an ample supply of coal for all purposes at that port. I notice that the Minister of Railways is not in his place; but I would ask the Prime Minister to call his attention to this matter, because it is a suggestion which I am offering solely in the best interests of the country in the present situation.
What has been settled in regard to the pay of the troops who have volunteered for service abroad ? A question arose in the South African war as to the difference in pay.


Robert Laird Borden: I understand that it is to be the same as if the men were on active service in Canada.
I appreciate the importance of the observations made by my hon. friend. Personally I am not in a position to speak with accuracy as to the facilities which exist at Halifax at the present time. It is possible that the Minister of Railways may already have had this under consideration, as I know he had the general manager of the Intercolonial here a few days ago to confer with him about some matters of importance. I have no doubt that that matter was taken up if it had been previously brought to his attention. I shall be very glad to direct his attention to my hon. friend's observations.


William Pugsley: I would like to know why it is that, while the country furnishes uniforms for the men, the officers all have to buy their own uniforms.
Mr. SAM. HUGHES: We are giving them a grant of $140.


William Pugsley: I suppose that is because they are going to the front; but, speaking ordinarily, why is it that young men, who are willing when the necessity arises to go to the front and sacrifice their lives if need be for their country, should be obliged to pay for their uniforms r I know of quite a number of cases of young men who have been offered lieutenancies or captaincies, but who, by reason of the fact that they have mothers or sisters to support, have felt unable to go to the expense of $100 or so to provide the necessary uniform. I think that ought to be taken into consideration.


Samuel Hughes: I am obliged to leave in a moment, and I trust the hon. gentleman will not think I am interrupting if I ask leave to say a word now. The

Department has decided, subject to the approval of Council, to act in accordance with the suggestion the hon. gentleman has made. I think it is the only sensible view to he taken. There is no reason why an officer should be put to personal expense for uniform, that is, for necessary service uniform, when he goes to the front.
Mr. PUGSLEYThere is just one other thing. The Minister of Marine and Fisheries (Mr. Hazen) knows that a very fine armoury has been erected in St. John. But I am told that the Department of Militia have declined to provide furniture for that armoury, and the officers have had" to put their hands into their pockets to purchase the furniture necessary. I think that if the country can afford to build a magnificent armoury, it can afford to purchase the furniture reasonably required for that armoury.
Mr. SAM. HUGHES: So we do.


William Pugsley: The Department has not done it in St. John.
Mr. SAM. HUGHES: I am not sure for the moment of the details as to that.


William Pugsley: The officers have been obliged to procure furniture at their own expense.


Mr. J. J. HUGHES:: I understand that the money required for the purchase of the one million bags of flour may be taken out of the vote now under consideration?


Robert Laird Borden: I am advised to that effect by the minister.


James Joseph Hughes: I believe that this action on the part of the Government has met with the approval of every person in Canada. The other gifts of food products to be sent to the old land will, I am sure, also be approved by all the people of Canada. I understand that British Columbia is making a gift of one hundred thousand barrels of apples, and that the Government of Quebec contributes four million pounds of cheese. But there are other food products of this country which the Government in their judgment might, perhaps, deem it advisable to send to the old land.
I understand that Germany has for many years produced immense quantities of potatoes, having a surplus which was exported as occasion arose to Great Britain or even to America. Of course, that trade is out off entirely. In Canada we produce large quantities of potatoes. This year the prospects are that in the Maritime provinces

we shall have an abundant crop, more than we can at all use. The Province of Prince Edward Island has prospects of an immense crop of this useful article of food. I merely suggest to the Government that they might think it wise to send to Great Britain a quantity of potatoes. If prospects are realized, I believe that Prince Edward Island alone could furnish at least one million bushels. The crop in New Brunswick and Nova Scotia also being good, it is not improbable that we shall find no market for them. The crop might be rotting in the fields or in the cellars of the farmers. If people in the old land were short of food and we had an abundance on this side that did not reach them, we should have a condition of things in which something would clearly be wrong.


Some hon. MEMBERS:: Oh, oh.


James Joseph Hughes: We can sell potatoes in the province of Prince Edward Island at least one-third cheaper than they can be sold in any other province of the Dominion.


Some hon. MEMBERS:: Oh, oh.


James Joseph Hughes: I do not understand the remarks of my hon. friend. Does he wish to say anything germane to this sub-iect or is he simply trying to be facetious and a little smart or foolish as usual?


Mr. BRADBURY:: Prince Edward Island might make a gift of potatoes.


James Joseph Hughes: That would be all right. I dare say the people of Prince Edward Island would be prepared to make a reasonable gift. But the quantity of potatoes we shall have to spare will be very large. And I have this to say, that if the Government take into consideration the suggestion I make, I am satisfied that they need not pay any commission for providing this article.
Some hon. MEMiBIERS: Oh, oh.


James Joseph Hughes: I do not quite understand the joke. Is the Government paying large commissions in other places? I am quite satisfied that the traders in Prince Edward Island will give their services in this work free of charge. I can speak for myself and guarantee to supply the Government from ten thousand to twelve thousand sacks of potatoes equal to 30,000 bushels, which will not cost them one cent for my services, and I knorw of others who will do the same.
In connection with this, there is a matter which may ibe a little foreign to the terms

.oif the measure under consideration. But if the Government is looking after the interests of the people-us this is a time when the hearts of all the English-speaking people of the world beat in .accord, a time when we have the sympathy of the Englishspeaking people of all America, this might be a proper time for the Government to approach the Government of the United States to see if they would not remove the embargo upon potatoes entering their country from Canada. There is no other thing that the Government could do that would be of such advantage to the farmers of the Maritime provinces, but particularly Prince Edward Island, and I think it would be of considerable advantage also to poor people in the cities and towns of the New England States. If the Government thought this the time to take some action in regard to this matter I believe it would be very wise for them to do so.
The Government or the Department of Militia sent inquiries to people in Prince Edward Island for quotations on butter and hay. I do not wish to say one word that would have the appearance of party politics; but I think these inquiries were sent only to friends of the Government-that is my information. They may have sent to some officials there, and the officials may not have circulated these inquiries generally. However, I am quite satisfied of this, that iif the people of Prince Edward Island are afforded the privilege of supplying anything asked for at this time they will supply it free of commission, free of middlemen's charges. I would suggest that the Government, in making purchases, should extend to the whole of the people the privilege of offering the supplies that they have on hand.


Robert Laird Borden: The question how to utilize the resources of the whole Empire in the best interests of all portions of the Empire is, of course, a very important one. We shall give the best consideration we can to the suggestions of -my hon. friend, and take such action as may seem proper and reasonable under the circumstances.


William John Macdonald: I have noticed in the press a statement that a proposal of some kind has emanated from Toronto, and that on behalf of that proposal a delegation has waited upon the Government, submitting to them a method, on definite and positive lines, to obviate the lack of employment which is anticipated throughout the country. I may say that in our province to-day
we are threatened with unemployment through the discharge of a large number of men, particularly men connected with the steel industry. These workingmen have not had a good summer, and, as they have been employed in special work for which they cannot find a substitute elsewhere, I am afraid that a most difficult situation is likely to arise. If the plan suggested by the gentleman from Toronto is of such a character as to meet with the good opinion of the Government, perhaps the Prime Minister could tell us what idea, if any, the Government has with a view to preparing for such a contingency.


Robert Laird Borden: Certain gentlemen from Toronto had an informal conference with myself and some other members of the Government. Their idea is a very good one; the question is as to the best, way of working it out. The idea is that the businessmen, manufacturers, labouring men, and producers of Canada should establish some organized method of co-operation with a view of meeting as far as possible the problem of non-employment, which threatens a great many people in Canada, as the hon. member for Pictou (Mr. Macdonald) has observed. We listened to what these gentlemen had to say, and expressed appreciation of the interest which they took in a subject which gravely concerns the Dominion at the present time. We asked them to think over their proposal, to put it in a little more definite form, if they could, and to come back to us after the conclusion of the session, when we could take the matter up with better opportunity to devote time and attention to it than when they came to us.


Mr. MURPHY:: May I ask the right hon. gentleman if he has received any representations on the subject from the representatives of organized labour?


Robert Laird Borden: Yes, I had a conference of some considerable length last evening with gentlemen representing organized labour. I found them disposed, as these other gentlemen are, to co-operate in every way for the purpose of alleviating the conditions of distress which ,are apprehended in some parts of tbe country.


Mr. CARROLL:: I wish to bring to the attention of the Government the fact that we have at the present time a very serioas situation in the steel works in the city of Sydney. I have no doubt that representations have already been made to the Gov-

eminent with regard to that matter. Some branches of their works are already practically closed down, and I presume that the rail mills all over Canada are in a similar position. May I suggest to the Government that in conjunction with what has been done by organized labour and by the friends generally of Canada on behalf of the unemployed, there might be something the Government could do to help out rail makers and steel workers, not only in Sydney, but throughout the whole of Canada as well? Several things may suggest themselves to the Government; the probabilities are that they have already suggested themselves. One is that the Government might give advance orders for rails, for the Hudson Bay railway, the Grand Trunk Pacific, and the Intercolonial railway. Some seven or eight thousand men are out of employment. They are facing starvation, and perhaps it is not improbable that this situation is general in all the steel works of Canada. I bring this matter forward in no party spirit. I have had an intimation from a political friend of the Prime Minister that he intended to bring the matter to the attention of the Government. Anything done along that line shall receive not only my humble support, but the support of every man, woman and child who is dependent upon the Dominion Steel Company for support.


Robert Laird Borden: Representations have been made by a number of representative citizens of the city of Sydney, I understand. So far as the Government is concerned, I believe that a considerable order was given, amounting to about 10,000 tons of rails. The Government would be very desirous of supplementing that order so far as it may be possible to do so, but my hon. friend will, of course, realize that the Minister of Finance has to take into account the financial condition which at the present time confronts not only this country but the whole world. It has been represented to us that orders which had been given by some of the railway companies were withdrawn or cancelled, and I have been asked to take measures of one kind or another which may enable those orders to be carried out. We have not up to the present time had an opportunity of giving to that suggestion the consideration which it deserves. The whole situation is a very complicated one, and I can only ask my hon. friend to take the assurance that whatever can be done, having regard to the situation as a whole, including the conditions in the city of

Sydney, shall receive the careful attention of the Government.


Mr. SINCLAIR:: May I suggest that the Minister of Finance or the Prime Minister should instruct the banking institutions of the country not to be too severe upon their customers at the present time. I understand that orders have gone out from the head offices of almost all the large banks not to increase the overdrafts in the various branches. We all know that the manufacturers very largely depend on the banks for practically all their working capital, and, as we are giving very great concessions to the banks at this time, it strikes me that the people of the country should receive some benefit therefrom. I am sorry to say that, so far as I have been able to ascertain, the banks have been very severe. They have prevented people from obtaining the capital that they ordinarily require to carry on their regular business, and, while large concessions have been made to them, they have not made any concessions to the business interests of the country.


Robert Laird Borden: I am informed by the Minister of Finance that he has been in communication with some of the banks with regard to the very matter that my hon. friend has mentioned. Anything that the Government can do in that regard, without undertaking to manage the business of the banks or to dictate to them, will, of course, be done.


William John Macdonald: It was stated in the press that the Gjovernment would introduce legislation to enable them to deal specifically with cases where the cost of the necessaries of life was increased by those dealing in them. Has that been covered specifically by any of the Bills we have dealt with to-day?


Robert Laird Borden: No, not specifically. It is thought that legislation which has been already under consideration this afternoon will be of a sufficiently comprehensive character to include any action that might reasonably be taken by the Government in that matter.


William F. Carroll: Is not clause 3 now covered by the Militia Act, which makes provision for the payment of the militia when on active duty and when not on active duty?


Robert Laird Borden: The Minister of Finance informs me that it was thought desirable, in addition to any provisions contained in the Militia Act, to have this pro-

vision which might be necessary to meet possible contingencies.
Bill reported, read the third time and passed.



DOMINION NOTES BILL.

[Stage Direction]
On motion of Hon. W. T. WHITE (Minister of Finance), Bill No. 5, respecting Dominion Notes, was read the second time, and the House went into committee thereon, Mr. Blondin in the chair.
Mr. WHITE:: We are repealing the present Dominion Notes Act and substituting this one. I may say that there are three principal changes provided for in this legislation. In the first place, we provide that Dominion notes may be issued, not only against gold coin as in the past, but against bullion in bars of certain fineness. I may state that this is the custom in. Great Britain; the Bank of England issues its notes against bars as well as against coin. There is a certain advantage in that, because bars may be shipped to countries requiring them, and there be converted into the currency of those countries. No question arises so far as security is concerned under the change that we propose. The second change is that in the signing of notes the signatures may be engraved thereon, provided that there be added a distinguishing device and a serial number while the notes are in the custody and control of the officers of the Finance Department. At the present time the signature of the deputy minister is engraved upon notes, and a clerk in the Finance Department adds an additional signature.
We propose now to modernize the method by having tooth signatures engraved, with this safeguard, that after the nofjes are printed with the engraved signatures a distinguishing device and a serial number shall be engraved on each note and that shall toe done while the notes are in the custody and control of the officers of the Department of Finance. It is an additional safeguard to the note issue of the Dominion. I had this legislation prepared last year and intended to introduce it last session.


Alexander Kenneth Maclean: The notes are now numbered, are they not?


William Thomas White: Yes.


Alexander Kenneth Maclean: But without any other device?


William Thomas White: Yes.


Alexander Kenneth Maclean: What is this device?


William Thomas White: It has not been determined yet. If a note has not the distinguishing
device we shall know it has bfeen issued without the authority of the Department of Finance. It is a check upon the issue of Dominion notes.
The third provision is the most important of all and is that to which I called attention yesterday. We have increased the amount of Dominion notes which may be issued with a 25 per cent margin oif gold from $30,000,000 to $50,000,000.


Alexander Kenneth Maclean: And this increased
note issue, which will amount to about $15,000,000 when issued, is to go into the consolidated revenue fund?


William Thomas White: Yes.


Mr. CARVELL:: The minister stated that these notes would not be actually signed as in the past, but that a device would be placed on them. Is that intended to be a secret device known only to the officers of the Department?


William Thomas White: It will be stamped on the Bill and in that way it will be public.


Frank Broadstreet Carvell: Why could not the forger stamp the device on as well as he could forge the signature?


William Thomas White: My hon. friend understands that the Dominion notes are engraved with very great care. The device will be engraved with equal care and in the result it will be exceedingly difficult, if not impossible, to successfully counterfeit either the bill or the device. The legislation is modern. The Bank of England notes are printed.


Wilfrid Laurier: The signatures also?


William Thomas White: 
Alexander Kenneth Maclean: Is it proposed to permanently increase the note issue, supported by 25 per cent gold, up to $50,000,000, or is the present proposal merely a temporary measure? What will be the de-

nominations of this note issue, and what is the Dominion note issue of ones and twos at the present time?


William Thomas White: The legislation authorizes an increase from $30,000,000 to $50,000,000 without any limitation or condition whatsoever, so that it would be open to the Government to avail itself of it now or at any latex time. In other words, there is an integral change made in the Dominion Notes Act whereby a margin of 25 per cent of gold >
may be held in respect of an issue of $50,000,000 instead of $30,000,000 as under the present legislation. As regards denomination, notes of any denomination may be issued to make up this amount. It may be wholly in ones, twos, or in fives or large legals, but it will be -a combination of all.


Alexander Kenneth Maclean: I have always
understood that the justification for the $30,000,000 of notes supported by 25 per cent gold was that they were in small denominations -and not likely to he called.


William Thomas White: My hon. friend raises a
very interesting question. I would say that it is desirable that the total amount of free Dominion notes that should be outstanding at -any time should- not be materially in excess of the amount of notes of small denominations in the .hands of the public. I-n other words, in order that the Dominion may be able to retire its notes- in gold there -should not be outstanding a larger amount than is required from time to time by the -community for its purposes. We have, however, a safeguard against any difficulty -on that score. In the Bank Act there is a provision that the chartered banks of Canada mus-t h-old 40 per -cent of their cash reserves in Dominion -notes. That being so, the amounts whi-ch the bank-s must hold -under that legislation cannot of course come in for redemption. Therefore, the position is this: In estimating what notes are likely to be presented for redemption, we have to take into consideration three facts: first, how many notes are likely to remain outstanding in the hands of the public; secondly, how many notes are likely to be required by the -banks for the purpose of their clearings (which is a very large amount); and thirdly, what amount of notes must be held by the chartered banks, representing not less than forty par cent of their cash assets ? Answering particularly the question which my hon. friend has directed to me as to the present issue of Dominion notes, I have some information here which I think will be of interest to the House :

Present issue of Dominion Notes and Gold holding- as on July 31, 1914.
Fractionate l's, 2's, 4's and 5's. . .$ 25,180,333
50's, 100's, 1,000's	 7,209,500
Bank specials good between banks
only, in 500's, 1,000's and 5,000's.	80,404,000
Total	$112,793,833
Amount Dominion notes held by the
banks this date	 90,588,065
Amount Dominion notes in the hands of the public other than the
banks	 22,205,768
Gold held July 31, 1914, as reserve
for Dominion notes	 91,735,584
Amount of gold required to be held under the present Act for this issue	 90,293,833
(In addition to the $91,735,584 the minister also has $5,400,842 in gold to satisfy the ten per cent requirement of the Savings Banks Act.)
Amount Dominion notes outstanding
not covered by gold holding.. ..	21,058,249
The hanks had in current gold and subsidiary coin on the 31st July,
1914	 51,406,472
Just let me refer more particularly to the item of $21,058,249, representing the amount of Dominion notes outstanding not covered by gold holdings. The Dominion may issue $22,500,000 of free money to-day, but it happens that only $21,058,249 in Dominion notes are outstanding unsecured by gold. In addition to that, although the question does not arise here, the banks held in current gold and subsidiary coin on the 31ist July, 1914, $-51,406,472. That in round figures you can say that the gold reserve of th-e Dominion both -by the Dominion -and by chartered banks would be over $150,000,000.
I have made a little memorandum with respect to this proposal to increase the note issue from $30,000,000 to $50,000,000 against twenty-five per cent of gold, wihich for the information of the House I shall place upon ' Hansard ':
If advantage is taken of the proposals in the Dominion Notes Act, 1914, on the basis of the circulation as of July 31, the total outstanding circulation would be approximately $127,800,000. The gold reserve as respects that issue would be $91,735,000. This works out a percentage of gold to circulation of approximately 71-7. 71-7 per cent is a larger percentage of gold holding to notes issued than was held by the Dominion at any time prior to 1909. At the present time the gold holding is approximately 81 per cent of the total issue of Dominion notes. The issue of $15,000,000 additional Dominion notes would reduce the percentage to 71-7 as stated.


Wilfrid Laurier: What was
the quantity before 1909?


William Thomas White: I have not the figures.
In 1870 the percentage of gold holding to

circulation was 22; in 1880, 41; in 1890, 34; in 1900, 55; in 1908, 65; at the present time 81 per cent, and when this extension that we propose is made it will fall to 71.7 per cent.


Alexander Kenneth Maclean: The minister, I
understand, will be introducing a borrowing Bill in connection with the credit of $50,000,000 this session?


William Thomas White: It is provided in the war
appropriation Bill that the Government may borrow in order to raise the funds in whole or in part. I thought it advisable that in addition to all the borrowing powers which the Dominion at present possesses we should insert in the Bill the power to borrow. It would appear to me that it would not be just that the whole burden of this war in its entirety should fall upon the people of Canada during each year of the continuance of hostilities, and that it would be proper that borrowing powers should be taken in connection with the appropriation Bill. That is the course adopted by other countries. Great Britain has, according to the despatches this morning, issued treasury bills which have been at once subscribed for the purpose of carrying on the war. Her first step was to borrow a large sum of money, reported to be something like $45,000,000 or $50,000,000, from the Bank of England. The recent transaction under which treasury bills are sold will repay that advance from the Bank of England and put her in funds to the extent of the further amount realized by the sale of the treasury bills.


Alexander Kenneth Maclean: I suppose the
Government are unable to say where they will endeavour to make a loan or the nature or manner of it?


William Thomas White: I gave this matter consideration in connection with the Budget yesterday. I indicated that we would attempt to meet the situation in three ways: first, we would raise an additional amount by the taxation from customs and [DOT]excise, which I brought to the attention of the House; and, secondly, we would, from time to time, endeavour to make loans to meet the deficit between our revenue and the expenditure upon capital account, plus the special expenditure required in connection with our military and naval operations. We shall pursue that policy and avail ourselves at the same time of this expedient of issuing Dominion notes, which is, after all, a method of borrowing from
the public of Canada upon our own securities.


Alexander Kenneth Maclean: Except that you propose applying that to consolidated fund!


William Thomas White: It will all go into consolidated fund. The consolidater fund, as my hon. friend knows, is available not only for paying current expenditure, tout, to the extent that is possible, capital and special expenditure also.


Wilfrid Laurier: This is not a temporary measure; it is a permanent measure, and I do not know that I have any great criticism to offer. I think, on the contrary, that I approve of it altogether. The only point which might occasion some- not criticism-tout desire to have further information is in regard to increasing the proportion of Dominion notes not covered dollar for dollar by gold from $30,000,000 to $50,000,000. The proportion hitherto existing-25 per cent-remains the same, but the amount is increased from $30,000,000 to $50,000,000. My hon. friend, I know, is a believer in the credit of Canada being maintained upon a gold basis and nothing else. I was relieved when I heard him [DOT]say that at the present time our gold holdings amount to 81 per cent of the Dominion note issue and that therefore the alteration would be only three or four per cent, Which I think, is not material. I have no doubt that those who follow these matters will be relieved to know that our Dominion note issue remains upon an absolutely secure gold basis. I rose for the purpose of asking one question of my hon. friend. I would like to know if he is able at this moment to get all the gold he needs from the production of the country or whether he has to import any?


William Thomas White: My right hon. friend knows that when the Dominion buys gold it must pay for it in gold. Therefore, at the present time it is no object to the Dominion to buy gold and pay out gold if that gold leaves the country. In the provision which I have inserted in this Dominion Notes Act whereby Dominion notes may be issued against bar gold 'as well as against gold coin, it is in my mind that we shall be able without depleting our balances with the bank to purchase bar gold the product of Canada of the requisite degree' of fineness. The present method of purchasing gold through the mint is that they tender for gold no matter where it can be bought, whether in Canada or the United States.

They require Ibar gold of a certain fineness. They may have to refine it a little more after they get at, but the gold purchased is converted into coin here. I have taken the matter one step farther by this amendment to the Dominion Notes Act. If bar gold is available, whether bearing the stamp of the United States Government assay office or of the Royal Mint, or any branch thereof in Canada or Australia, we may pay for it by the issue of Dominion notes against it. That would not deplete our financial reserves. If I attempted to buy gold now that was not of the degree of fineness which would enable the Mint to coin it into specie, or gold currency, I would have to pay out gold to get that, and thus impose quite a strain upon our reserves at the present time, confronted as we are with the programme I indicated to the House yesterday.
In answer more especially to my hon. friend, it is not an object of the Government just now to buy gold, bnt it is an object of the Government at the present time to conserve its gold; and therefore we have, as a corollary of the action that we took in making bank notes legal tender so far as the obligation of the banks to the public is concerned, discontinued the redemption of Dominion notes in gold. That was found necessary in order to conserve the gold resources of the country. My hon. friend has had in mind, what of course any financial man would have in mind, namely, the supreme importance of not inflating the currency beyond the point upon which we can readily get back upon a gold basis. We have been upon a gold basis. At the present time, like other countries, we are not upon a gold -basis. The United States to-day is upon the basis on which it was in 1907. Payments are being made by clearing-house certificates; but nothing that we axe doing at the present time in connection with the Dominion Notes Act, and nothing I hope that we shall be obliged to do in the future to meet the situation by issuing Dominion notes, will put the Dominion in a position in which its note currency will be so inflated that we shall not within a reasonable time be able to get back upon a gold basis. If we should have to take action in the future that would make it difficult for us for a long time to get back upon a gold basis, certain evils would follow that it is not necessary to advert to here. We hope to be ready, as soon as the necessity no longer exists, of conserving our^old supply, to return to a gold basis. This extension from thirty

million dollars to fifty million dollars does not in any way affect the circulation on account of the notes in the hands of the public and the amounts the banks are required to hold under the provisions of the-iBank Act.


[Stage Direction]
Section agreed to.
Bill reported, read the third time, and ' passed.
-COMMERCIAL AND FINANCIAL INTERESTS BILL.
The House again in Committee on Bill' No. 4, to conserve the commercial and financial interests of Canada.-Hon. W. T„ White; Mr. Blondin in the Chair.
Alexander Kenneth Maclean: When section 4 of the Bill was under consideration, the minister was not in the House. Under subsection 'A,' which enables the Government to make advances !by the issue of Dominion notes upon approved security, has any policy or principle been adopted by the Finance Department as to the class of securities upon which they will make advances, and have any advances yet 'been made in that manner?


William Thomas White: When war broke out between German/ and Russia, and after the stock exchanges and bourses of the world had closed, and on the eve of a declaration of war by Great Britain against Germany, in order that I might be in touch with events in the financial and commercial world, I caused to be convened a meeting of representative bankers to keep me in touch with the situation. After we passed the Order in Council under which the banks were authorized to make use- of their excess -circulation privilege during the month of August, and to make payments in bank notes, and after we had passed a further Order in Council authorizing advances to be made to the chartered banks upon securities to be approved by the minister, I continued this committee as an advisory committee upon securities. The committee consisted of -the president of the Canadian Bankers Association, as chairman, and the general managers of the three largest banks in -Canada. I convened the committee at Montreal because it was very convenient to Ottawa, and I -could be in touch with the situation by telephone from day to day. Since the announcement was made that 'banks were authorized to issue their own notes instead of Dominion notes and gold, and to make use of their excess circulation,

and that the Dominion Government stood prepared to make advances to chartered banks upon the security of approved collateral, the banking situation in Canada has been normal, and up to date we have not issued any Dominion notes.
I should say further-and this will answer in part a question asked this afternoon by my hon. friend from Guys-borough (Mr. Sinclair)-that, without assuming to interfere in any way with the banks' conduct of their business, I have asked the banks to exercise as liberal a policy as is consistent with the principles of sound banking towards the commercial community, and I have asked them not to hesitate to make use of the facilities afforded them by the Government through this arrangement. ,
I have been asked as to the machinery that has been devised. The advisory committee that I have mentioned pass upon the security put forward in connection with an application. There is a certain order in which these securities are to be taken. There are Dominion and provincial guarantee securities and other high-class listed securities, bonds and stocks and commercial paper. I think it inadvisable to lay down a hard-and-fast rule, because the several banks carry on their business differently. While there may be a good deal of trouble in connection with the release and substitution from time to time of commercial paper, such paper may be quite as good as high-class bonds or other collateral. This committee of bankers pronounce upon these securities, subject to the final approval of the Minister of Finance. In this connection I should call the attention of the House to a provision of the Bank Act. I think it is section 135 which provides that the Dominion has a second charge, next only to the note issue, upon advances made to banks. So I do not think the question of security need give us very much concern. That is the procedure that has been adopted to date. But I have changed that in this present Bill. I have provided that the Treasury Board, instead of the Minister of Finance, shall sanction the advances that may be made. That gives a wider judgment. Of course, the Minister of Finance is chairman of that board and his knowledge would be at its disposal. We may have to enlarge the committee in order that sub-committees may be appointed to act in different parts of. the country, but for the present we shall proceed under the arrangements made until change seems necessary or desirable.


Alexander Kenneth Maclean: I presume that the purpose is to relieve banks of present loans which they are carrying so that they may be better able to take care of fresh applications for loans. That being the case, I suppose the banks would receive no greater rate of interest from their customers than they would pay to the Government. As I understand it, the modus operandi will be to transfer to the Government securities given as collateral by customers of the banks. On these securities a specified rate of interest Will be paid. Will the Government receive for the advances in Dominion notes the same rate of interest that the customers pay to the banks?


William Thomas White: I should not say that that would be the case. My hon. friend knows, of course, that the banks have their running expenses to meet. They pay three per cent for deposits, but their discount rates are much higher, of course. I have fixed five per cent as the minimum rate which the banks must pay the Government under the present arrangement. When I made the arrangement I took up with the banks the question of the rate of interest in a general way. I wrote to the chairman of the Bankers Association requesting him to communicate to the banks my wish that at this time the rates of interest should not be increased. I am not of the opinion that the banks' rate of discount will be precisely the rate which the banks pay the Government, because it must be remembered that the banks will avail themselves only to a comparatively small extent of this assistance which the Government offers them. Their loans will be made first from their own resources. The object of these advances is that the banks may be able to maintain the volume of ,their credit to their customers and meet abnormal demands upon their cash resources in time of stress. I can assure the House that I have found the banks ready and willing, so far as I can judge, to act in a spirit of the utmost fairness towards the whole situation.


Mr. NESBITT:: You do not intend to make these advances so long as we can get along in the ordinary way?


William Thomas White: The banks would not make application and pay five per cent for money if they had money on hand for which they w-ere paying three per cent. In the fall of 1907, when the American panic was at its height, the late Government adopted a somewhat similar expedient, and advances w'ere .made to the banks upon such securi-

ties as were approved by the general manager of the Bank of Montreal, the general manager of the Merchant's Bank and the Deputy Minieter of Finance. At that time the reason given for the advances was that the banks might be in a position to move the -western crop.


Frank Broadstreet Carvell: I think the Minister of Finance is taking a wise course in putting the banks in a position to control more funds, if necessary. But I should like, if possible, to throw some safeguard around the borrower, to insure that he shall be used as well by the banks as the banks are used by the minister. I do not wish at this time to throw any aspersions upon the good intentions of the banks, but I wish to assure the minister that there is not a member of this House coming from the outlying portions of Canada but has seen up to this time a pretty severe tightening of the purse strings of the banks; not only the refusal-I grant you in a very gentlemanly manner-to make advances, but a pretty strong pressure applied to the ordinary borrower to make payments and make them as rapidly as possible. I realize that it is private money which the banks are handling to a great extent, and yet the position is that the banks control all the spare money in the Dominion of Canada. We all know that if we deposit $100 in a savings bank to-day it goes into one of the chartered banks to-morrow. The chartered banks have control of all the money in Canada; they are the only persons to whom we can go for money. I have a lively recollection, indeed, of the condition of affairs that existed in 1907, when the Government of the day assisted the banks to some extent. I have always felt that the banks took advantage of the condition of affairs in order to make capital or to make dividends for their stockholders. We realize that an emergent condition of affairs now exists in Canada such as has never existed in our time, and such as we hope will never exist again. ' The country is making- great sacrifices. Parliament is assembled, and has ungrudgingly voted every dollar which the Government has asked for, and has passed every bit of legislation which is required to meet the circumstances. Every person in Canada, in so far as it is in his power, is willing, I believe, to make all necessary sacrifices in order to carry out the work which is to be done, and to place the Government in a position to see that we do our share towards bringing this struggle to a successful issue. Under these circum-
stances I see no reason why the banks of Canada should not be willing to make sacrifices as well. I see no reason why the Government should not lay down a rule I should almost like to see it on the statute books-preventing the banks from charging more than a certain rate of interest on loans. You may say that this is a drastic proposal. With that I agree; but these are times when drastic measures are necessary. We are giving the Government drastic powers; we are all making sacrifices, and there is no reason, so far as I can see, why the holders of bank stocks should not make sacrifices just as well as ordinary individuals., I accept the words of the minister in toto; I believe he is doing all in his power to regulate the conduct of the banks. Nor have I any reason to doubt the bona fides of the banks when'they tell the minister that they are trying to do things properly. So far as I am concerned, however, I should like to see a little more power taken by the minister, in order that he may see that the banks are compelled to lend money to the people without making an undue profit. The banks should not be allowed to make more than a reasonable profit. If we are lending the banks money at five per cent, surely six and one-half per cent or seven per cent should be the maximum rate which they should be allowed to charge the people. Even though it may seem that this is a drastic procedure, I wish the minister would take it into consideration. I believe that the whole commercial body of Canada will stand by him and applaud him if he will take steps to see that the people are able to get their credits and get them as cheaply as possible.


Alexander Kenneth Maclean: I have seen it stated in the press that there was an application on behalf of the producers of bullion silver to 'have that approved as a security upon which Dominion notes may be issued under the provisions of this section. There may be something to show in favour of it; at any rate, I rise merely to inquire of the minister whether that matter is under consideration.


William Thomas White: The matter has been drawn to my attention. It is not the view of the Government that Dominion notes should be issued against silver, because we have been and expect soon again to be upon a gold basis. In connection with the arrangement which has been made with the hanks, it would be open to the bankers of silver-producing companies to take the notes of

those companies, secured 'by bar silver as collateral, with a proper margin, and rehypothecate those notes with the Government as security for advances to be made. There is no doubt that, with a proper margin, you could not have better collateral than bar silver. At present, on account of the war, a severe decline has been experienced in the price of silver, and the market has been greatly limited, but these conditions we trust are temporary.


Alexander Kenneth Maclean: What provision
does the minister make with respect to the Dominion notes which shall be issued against approved securities on payment of the loans? Does he take power to destroy the notes after the payment of .the loans?


William Thomas White: When notes are puit into
circulation, whether by advances to banks or otherwise, some of them get into the hands of the general public. Possibly the greater amount would be in the hands of the banks as part of their liquid resources. Of course, when the loans made by the Dominion through the issue of Dominion notes to the banks are repaid by the banks, that money goes into the consolidated fund and is there for the purpose of redeeming Dominion notes, or for other purposes.


Alexander Kenneth Maclean: Is it the intention
of the Government to redeem those notes promptly, and not to allow them to remain in circulation?


William Thomas White: 
Alexander Kenneth Maclean: Upon payment of
these >loan*, will the minister have power to reduce the note issue at some time to the amount fixed by the Dominion Notes Act?


William Thomas White: We would have power in
this sense, that we would have the funds to do it. Of course, we have not the power to compel the surrender of Dominion notes which would be generally held throughout the country, in the hands of the public and of the banks.


Frank Broadstreet Carvell: Do you destroy any of them to represent the amount of money returned?


William Thomas White: There is no object in destroying them, because we desire to have stores of Dominion notes in our treasury. The demand for Dominion notes especially in the fall, is very great, but notes are coming in all the time. Those that are defaced are destroyed; those not defaced are available to be issued to meet the needs of the country. The amount outstanding at any time determines the liability of the Dominion in respect of these notes. When an advance is paid off, the Government's position is to that extent improved, and whatever notes it has from time to time in its treasury are notes not issued, but available to be issued in the future under legislative authority.


Frank Broadstreet Carvell: It is like buying back your own bonds.


William Thomas White: Precisely.
Mr. McCURDY. I wish before the clause passes to advert to the conditions which the statements of the hon. members for Guysborough and Carleton, N.-.B., and the Minister of Finance indicate now exist in the country. On the one hand, the hon. members state that bank credits are being seriously curtailed. I do not know on what basis these statements are founded, but it is said that instructions have been sent out by bankers to their branches that in some lines of manufacturing, at any rate, the usual credits iare not to be granted during the coming winter. On the other hand, the Minister of Finance states that up to the present the facilities provided by the Government for advances to the banks have not been in any instance availed of, although the terms provided are sufficiently liberal to allow bankers to do so profitably.
I think we are justified in expecting that these facilities provided for the general good and to prevent pressure and unemployment shall be availed of -and fulfil their intended purposes. If not, some other scheme must (be divi-sed to meet the emergency and the unnecessarily distressing conditions which will otherwise grow out o-f it. We all realize that the banking interests of the country are primarily in the business of banking for the sake of gain. In that regard their driving motive is not different from that of those in other lines of business.
There exists, apparently, a marked aversion on the part of bankers to take advantage of the credit facilities provided by the

Minister of Finance under the Orders in *Council already passed and confirmed by this legislation. Bankers are not ready to give colour to the suggestion that they must go outside the resources which come to them in the ordinary run of business to procure funds for their businesses, and, as I have said, there appears on the part of all bankers a disposition not to take advantage of the facilities which have been offered through the medium of this legislation.
The present conditions are most abnormal. We have during the past three weeks seen that the strongest countries, financially, in the world have found it necessary to postpone the payment of debts. The moratorium has come into general use among combatants. When even countries like Denmark, entirely outside the conflict, find it necessary to postpone the payment of obligations, an abnormal state of affairs is exhibited such as has never been experienced before in financial history and which is the justification for the different emergency provisions which we are now legalizing.
At such a time our Government has undertaken to utilize the existing banking system to safeguard- security and facilitate the routine business of the country, instead of postponing debts and adopting other expedients giving direct relief to a perplexed and harassed public.
The Government should guard against the disposition of the banks not to come to the Government for assistance. Bankers are expected in a time of distress like the present, with the credit facilities thus provided for them, not only not to curtail credit, but, wherever the security offered is sufficient, to increase their credit facilities to the point of satisfying the necessities of every solvent borrower who is ready to engage in sound and profitable productive labour, providing enterprises which are necessary to the normal life of the community. I do not refer to unnecessary or capital expenditures. These can and must largely wait until the crisis has passed. _
I do not know whether the information regarding restricted credit as given by the hon. members for Guysborough (Mr. Sinclair) and Carleton (Mr. Carvell) is quite correct.


Frank Broadstreet Carvell: It is correct.


Mr. McCUKDY:: If that is iso, I think
that the minister must draw the attention of bankers to it in the most forcible possible way and see that such hardship shall

not be put upon borrowers. The effect does not stop with the merchant or manufacturer whose credit is curtailed, but falls on the head of his employee.
In order to prevent undue unemployment during the coming winter, which is sure to be severe enough in any case, such machinery as has been provided 'by the Administration should be fully availed of.
In making these suggestion I allude only to the most solvent and sound concerns who ask for credit. There has been a good deal of inflation in Canada in the past four or five years, and overlending, as I pointed out when the Bank Act was up in the Banking and Commerce Committee. There has been, and there will necessarily continue to be, a severe trying out. That will continue, and we shall doubtless in the early future see the removal of further unsound factors in the business community of Canada. It is in cases where the operations to be undertaken in manufacture or otherwise are sound and certain to result profitably and to turn over quickly that these credits should be extended.
Should credit suffer by reason of the facilities provided by the Government being allowed to be unused, it will be the duty of the Government to adopt some more direct means of enabling manufacturers and merchants to obtain credit facilities, even should that means be along lines of practice heretofore considered unorthodox in this country.
Bill reported.
Mr. WHITE moved the third reading of the Bill. He said: I understand that the hon. member for South Eenfrew (Mr. Graham) asked a question in connection with this Bill as to the basis of valuation of securities of insurance and other companies. Under the Insurance Act, for the purposes of the annual statement, the market values of stocks, bonds and debentures shall be taken for the purpose of determining the company's total assets. I may say to the House that last year we had an independent valuation made by experts of all such securities, and these valuations were embodied in the report of the department. At the present time there cannot be said to be any market values, because the exchanges are closed, and the ordinary means for determining market values are disorganized. In the event of this condition of affairs continuing until the end of the year, the department has under consideration the advisability of adopting the following method of dealing with securities. For

securities owned on December 31, 1913, allow the department's value as of that date to remain as the market value for December 31, 1914. For securities acquired since December 31, 1913, allow the cost price as the market value on December 31, 1913. I think the Insurance Department will be disposed to meet the situation, should it continue as at present, in a way which I am sure will commend itself to the House.


[Stage Direction]
Motion agreed to, and Bill read the third time and passed.
At six o'clock the House took recess.
After Eecess.
The House resumed at, eight o'clock. NATURALIZATION ACT AMENDMENT.
Hon. C. J. DOHERTY (Minister of Justice) moved for leave to introduce Bill No. 8, to amend the Naturalization Act, 1914. He said:
I make this motion subject to the consent of the House and on the assumption that there is no objection. The Act that it is proposed to amend is the one that was passed at the last session of the House. What gives rise to the necessity for doing this is that the Imperial Parliament, in passing the Bill, the provisions of which we have adopted, made two amendments, and they have intimated to us .their desire that we should without delay make our Act conform absolutely to .theirs. I think the amendments will commend themselves to the judgment of the House. The first is to provide that where a. married woman has lost 'her nationality by reason of marrying an alien, upon the dissolution of the marriage, she may be renaturalized without it being required that she should put in a period of five years' residence. The other amendment is to provide that where a woman marries a British subject who Changes his nationality after the marriage, she may, by declaration of her desire so to do, retain her British nationality.
Mr. SPEAKER:: It is entirely outside of the rules of procedure in the House for this to be done, and it can only be done by the unanimous consent and expressed wish of the House.
SiT WILFRID LAURIER: My hon. friend the Minister of Justioe (Mr. Doherty) discussed the matter with me, and it seems a very meritorious measure. I have no objection, and I hope the House will have no objection, to taking the first reading.


Thomas Simpson Sproule: There is no notice of
the Bill whatever, and it therefore can only be introduced by the unanimous consent of the House.


[Stage Direction]
Motion agreed to, and Bill read the first time.
Mr. DOHERTY moved the second reading of the Bill.
Wilfrid Laurier: No, the Bill is not printed.
Bill stands for a second reading.



CANADIAN PATRIOTIC FUND.

Robert Rogers: That the motion that Bill No. 7, to incorporate the Canadian Patriotic Fund, be read the second time at the next sitting of the House, be rescinded, and that the Bill be now read the second time.


Wilfrid Laurier: I hope my
hon. friend will not press that motion; I cannot agree to it. Here is a Bill that has not been seen by anybody. He cannot expect us to take Bills, however meritorious they may be, without having toad an opportunity of seeing them. All these Bills have to be considered before we can pass them. We have not offered any opposition to the legislation which has been brought up by the Government, but I think it its not fair that we should be asked ito put through Bills without having been given an opportunity of seeing them.


Robert Rogers: We can only take the Bill up by consent.


William John Macdonald: Why could you not circulate it and pass it around among the members?


Robert Rogers: The Bill was prepared by members on both sides of the House, and there is nothing objectionable in it. I am sorry that you should unnecessarily attempt to oppose the passage of this Act of incorporation.


Wilfrid Laurier: I am sorry
that the Bill was not presented earlier. I admit that very much of the objection I might have is removed when I am told that it was prepared by my hon. friend (Mr. Rogers) and a committee of both sides of the House, but still I must trust my own judgment and read it before it is passed.
Bill stands for a second reading.



WAYS AND MEANS-THE TARIFF.

[Stage Direction]
The House in Committee of Ways and Means.
Alexander Kenneth Maclean: Would the hon. Minister of Finance tell the committee, as we reach each item, wherein the changes have been made and what effect they will have on the revenue?


William Thomas White: On item 21-Cocoa paste
or ' liquor ' and chocolate paste or ' liquor sweetened, in blocks or cakes not less than two pounds in weight-there is an increase of half ia cent per pound. The increased revenue will be the small sum of $2,393. This tariff is not for the purpose of raising a revenue, but is what is called a consequential change by reason of the increase in the duty upon sugar. Sugar enters as a raw material into cocoa paste or liquor and chocolate paste or liquor, and in the resolution it is necessary to make this consequential change.


William John Macdonald: I would like to say a word with regard to the manner in which this legislation is being presented to the House. Neither the Government nor any hon. gentleman opposite can complain as to the attitude of the Opposition in regard to matters submitted for the consideration of Parliament; but we on this side of the House think that, before we are asked to consider and vote for measures submitted to us, the Government should, at least, give us the opportunity of reading the legislation which is proposed. There is no reason why this House should not give as mature consideration at this period in our history to the unique and exceptional legislation that is submitted to it as it would to ordinary legislation in *an ordinary session. We are not doing so, but when legislation is submitted we at least ought to know what we are legislating about. I make that criticism with regard to Bills which have been presented to-day and which we are expected to pass without ever having read them.
With regard to the item which the minister says is a consequential item relating to sugar, I would say, not in any captious way, but from the feeling that the duty on sugar will of necessity affect the homes of the poor to a very great degree, that, while I give to the minister the fullest possible consideration, in view of the haste which necessarily compelled the Government to summon Parliament to consider its
[Sir Wilfrid i .aurier. j
measures, I feel that there are many other avenues from which revenue might be derived which would bear less heavily upon the homes of the poor people cff this country than this particular item and the consequential items which follow. I see mo reason why we should not have an extra postage tax in this country. If we had resorted for the time being to the exceptional imposition of an extra stamp upon all letters mailed in this country, we would have been able to raise a very substantial revenue; and it appears to me that one object which ought to actuate every one of us, whether in power or in Opposition, during this session, is to avoid as far as possible doing anything which *will increase the burden of the plain people of this country in this exceptional period of our history. Every one knows that, during the three or four months previous to the declaration of war, there existed -in the industrial establishments of this country a most marked depression, one which had its effect on the capacity of the wage-earner and the mechanic to make expenditures for himself and his family. In the homes of a great many artisans and industrial people the money that had been saved in previous months and years of active employment melted away. I am 'speaking not in any obstructionist spirit. Realizing to the full the necessity of immediate action, we on this side of the House take the position that the Government must assume responsibility for the proposals which they make to Parliament at this juncture; but, notwithstanding that, I think, if the Minister of Finance had had more time for consideration, he might have discovered some other item than sugar, and the consequential items attached to it, as a source from which a revenue might be raised at the present time.


William Thomas White: I do not rise to take exception to what my hon. friend has said, and I desire to assure him that I appreciate the spirit in which his suggestions are put forward. So far as giving the House information as to measures which may be laid before it is concerned, there are no two opinions. The circumstances of this session have been exceptional, and it has been the desire of both sides to pass into law the legislation proposed by the Government as quickly as possible consistently with reasonable consideration.
So far as my tariff proposals are concerned, there has been no departure, so far as I know, from the usual course. I presented my Budget speech yesterday; all the measures proposed appeared in

' Hansard ' this morning. No doubt the resolutions have been before my hon. friend.


William John Macdonald: I am not complaining about yours.


William Thomas White: I understand my hon.
friend has no complaint on that score. It is only two weeks since war was declared; and during that time the Government has been obliged to face an altered situation in which, through no fault of its own, conditions have developed which could not be foreseen, whereby the revenues that we expected to derive will be substantially reduced and on the other hand our expenditures will be very materially increased. It is not necessary to go into details, because my statement yesterday gave all the necessary information to the House. We are in the initial stage only of what may be a long-drawn-out war, although we all hope that it will not be; and it may be that the Government will have to take many important measures to meet the conditions that may lie before us. For the present it is my object to devise such expedients that the taxation which we now lay upon the people will be moderate and general in character. The fiscal measures which I proposed yesterday will cast upon the people of Canada for the year only a small fraction of our increased military expenditure. I resorted to the expedient of increasing the Dominion note issue in order to enable us to raise some fifteen million dollars which we might not be able to borrow. We shall have the hon. member for Pie to u, (Mr. Macdonald.) 'It would have been open to the certain. We canvassed the whole situation. We took into consideration the sources of revenue drawn to our attention to-night by the hon. member for Pictou, (Mr. Macdonald.) It would have been open to the Government to propose a stamp tax upon bills of exchange, promissory notes and cheques, and also to increase the postage rate, as he h,as suggested.


Wilfrid Laurier: And an income tax was suggested by my hon. friend from Red Deer (Mr. Michael Clark).


William Thomas White: I will come to that in a moment. In connection with the stamp tax, I would point out this to the hon. member for Pictou-and it applies to customs duties also-that there is a point beyond which you cannot go in raising duties without actually decreasing revenue. I am not at all certain that an increase of one cent in the postal rate would not have the effect of reducing rather than increasing the revenue. I say I am not certain as to that,
There is a possibility that such would be the result. I will point out also that the increase in the postal rates would fall upon all classes of the community, because in a community like 'Canada every family makes use of the post. As to a stamp tax upon the documents I have mentioned, it has been demonstrated that the collection of such a tax occasions a great deal of public inconvenience, and also that it casts doubt upon the legality of documents and thus causes litigation.
As to direct taxation, opinions differ as to the advisability of resorting to it. I can only say that we believe that the steps we have taken are the proper steps for the present. If in future it becomes necessary to consider other means of taxation, the suggestion put forward by my hon. friend from Pictou, the suggestion put forward by my hon. friend from Red Deer, and the suggestions as to a stamp tax and other methods of taxation resorted to by other countries, can be considered by the (Government. For the present, the programme I have outlined seems to us a reasonable programme, imposing a comparatively small burden upon the people and leaving it open to the Government on a future occasion to consider other ways and means if such should be deemed necessary.
My hon. friend has stated that the duty on sugar will be borne by all the people of Canada including the w'age-earners. That is true. On the other hand, my view is that the people of Canada without exception will desire in some measure, even if only in a small measure, each according to his means, to contribute directly towards this expenditure which the Government is compelled to make for the defence of Canada and the preservation of the Empire. I believe, therefore, that the taxation we have imposed will not be adversely criticised throughout Canada, il submit these views for the consideration of the House in connection with the suggestions put forward in the remarks of the hon. member for Pictou.


Frank Broadstreet Carvell: I quite realize that this is not the time to discuss the means of raising revenue or the result of any taxes proposed. Yet I fea/r that there are many on this side of the House and in the country who cannot agree with the minister when he puts forth the suggestion that a tax on sugar means that the people contribute to the revenue each according to his means. The difficulty is that the poor man is paying more in proportion to his means

than the rich man. If the minister were to apply an income tax, a good stiff one, graduated according to the amount of the income then he would find the people were paying according to their means, and many of these wealthy people would have a chance to show their loyalty and so gain greater credit than they can hope to gain under the taxes proposed. However, it is not that part of it I wish to discuss now, because I realize that whatever proposals the Government make op this occasion must be accepted. Before leaving this point there is another matter on which 1 feel like criticising the minister. I fail to see the necessity of increasing the duty on many of the items affected by what he calls the [DOT]consequential duties following the principal increases. I share his idea that if you increase the duty on sugar you increase the cost of manufacture of articles produced in Canada of which sugar is the raw material. The minister feels that in order to stand by the manufacturer he should increase the duty on the finished article. But that is only another little dip into the pocket of the poor man at this very unfortunate time. In all human probability the amount of the tax which the ordinary labouring man will pay to the revenues of the country will be small compared with the amount that will go to the manufacturers. And I do not see any reason why in this time of national stress and national burden-hearing the manufacturer of sugar products should not bear a little of the burden as well as the consumer. I notice that the duty on sugar candy and confectionery is increased by one-half cent a pound-that is a protection of one-half cent a pound. It may be said that one-half cent a pound is not much. But by the time it gets to the consumer it will probably be two cents a pound, means just that much taken out of the consumer and nothing taken out of the manufacturer. While this proposal will go through, of course, I am pointing out this feature to the minister, in the hope that when it comes to the next move which he foreshadows, and which I am much afraid will have to be carried out, he may bear in mind some of tlie suggestions we are making and will so arrange the duties that the man with the fat hank account will be called upon to show his loyalty and make some little sacrifice as well as the man who carries the dinner pail, and still more the man who is not under the necessity of carry-[Mr. Carvell. 1
ing the dinner pail because he is out of work.
Can the minister tell the committee how much additional revenue he anticipates from these consequential duties? I do not refer to the duties on coffee, sugar, liquors and tobacco. And that reminds me to say that so far as liquors and cigars are concerned the minister, in my opinion, has been much too moderate; I would like to see the duties just as high as they will go and still produce a revenue. I realize the truth of what he said, that you may put the duties too high and so defeat your object. Tobacco is somewhat in the same category as liquor and cigars, though tobacco is as much a necessity to many people as are articles of ordinary household consumption. But, leaving out the four principal articles of sugar, coffee, liquor and tobacco, can the minister tell us how much additional revenue he hopes to obtain? And can he tell us the quantity of these different classes of goods affected by these consequential duties manufactured in Canada? If vve had to' consider only the additional revenue to the country it would be perhaps a small matter, but we have to remember that there will also be large payments made to the manufacturer. If we had these figures, we could judge the effect of these taxes upon the people.


William Thomas White: I am unable to give my hon. friend the information as to the quantity of these products manufactured in Canada, but I can give him the importations. My hon. friend will realize that the manufacturers of Canada engaged in the production of the commodities upon which we have been obliged to impose what are known as consequential duties are employers of labour, and, as they are in competition with the rest of the world, it would not be fair to them to increase the cost of their raw material without at the same time giving them a consequential increase in tariff.


Frank Broadstreet Carvell: They would have a chance to show their loyalty.


William Thomas White: My hon. friend must remember this-and I have no doubt he will -that these manufacturers themselves are large consumers, just as is my hon. friend, xhey use sugar; possibly .some of them use liquor and smoke cigars-and they will all pay. Sugar is not by any means the only article upon which we have imposed a tax; we have imposed a heavy tax upon liquors and cigars. My hon.

friend has expressed the view that we should have imposed heavier taxes upon liquors. I took up with our tariff experts the question as to whether it was possible to increase further the duties upon liquors and tobacco. They were unanimous in the view that we had carried them to the point from which we could expect the greatest revenue -that, if we carried beyond that point, our revenue would not increase. It must be borne in -mind in connection with all duties on customs that there is a point beyond which if you raise the tariff your revenue does not increase, but diminishes. I can assure my hon. friend that the question which he draws to my attention has had our most careful consideration, and I express to him the conviction that the increased duties that we have imposed upon liquors are duties 'beyond which we cannot safely go in the interests of the revenue- because these taxes have been imposed solely with ' a view of obtaining additional revenue. I am sorry that it is necessary to impose these consequential duties but I feel that it is not necessary for me to go into that question at length, the matter has been so often discussed in the House. Grave injustice would be done to manufacturers, the cost Oif whose raw material ha*s been increased, unless they were given an increase which would even matters up.


William John Macdonald: Has the minister considered the question as to what revenue could be obtained by the imposition of a duty upon fancy matches? That has been made the subject of a war tax in many countries. Then, again, I am sure that the minister must have considered the wisdom of imposing an fexport duty upon p.ulpwood and pulp. The cost of paper abroad might well serve the purpose of contributing to our revenue. Our great natural resources in that respect will be drawn upon particularly at this time, by Teason of the extra demand for paper arising in other countries. Has the minister considered these two sources of revenue in preference to the placing of an additional tax upon sugar?


William Thomas White: The first suggestion of my hon. friend has been before me; the imposition of a duty of say a cent a box upon matches by means of a stamp tax was discussed in a general way by myself and our tariff experts. There are two considerations involved in this question. In the first place, every one in Canada uses matches. Of course, the tax would be small.


William John Macdonald: I was speaking particularly of what are known as fancy boxes of matches.


William Thomas White: Having regard to the revenue which we thought we could raise from it, to the fact that that revenue would have to be collected by means of a stamp tax, to the fact that it would be borne by all members of the community, and to the programme which we are presenting to the House, we decided that for the present it was not necessary to resort to this source of revenue. It is possible that such a tax may in the future (be adopted, should occasion require. So far as an export duty on pulpwood is concerned, that matter was not under my consideration, but I shall be glad, of course, to take it into consideration in connection with any future action that we may have to take for,the raising of revenue of a special character connected with the war.


Frank Broadstreet Carvell: Has the minister considered what revenue might fairly be obtained by putting a stamp tax on patent medicines ? An enormous quantity of patent medicines are used in this country; indeed, sometimes I think that a great deal more are used than the country really requires. I can remember the time when such a tax was imposed in the United States; I think it was during the Philippine war. Has the minister taken the trouble to inquire into the possibility of obtaining a revenue from that source ?


William Thomas White: I have not gone into the question, although it has been before me .in .a general way-not on this occasion, but in the past. I would point out to my hon. friend that the duty upon patent medicines is already reasonably high, and that a great part of the community are very much addicted to the use of patent medicines. It has been said, and truly said, that man is a medicine-taking animal, and I am afraid that it might be unwise to impose what might be regarded as a heavy tax upon patent medicines in general use. The suggestion, however, is worthy of consideration.


Charles Murphy: Before the debate loses the flavour which my hon. friend the Minister of Finance has imparted to it by his discussion of the duties on sugar, perhaps he will allow me to say a word with regard to a kindred subject, the production of honey. One of my constituents has forwarded to me a circular letter sent out from the agricultural college at Guelph and ad-

dressed to the residents of Ontario who are engaged in the keeping of bees. Possibly my hon. friend has received one of these circulars; in any event I have been asked by a constituent to draw the attention of the Government and of my hon. friend to one or two paragraphs in this circular. They are brief, and in reading them I shall not detain the committee at any length. The circular opens with this statement :
The war situation has brought on a very grave menace to the beekeeping industry in Canada owing to the difficulty dealers are having in filling orders for sugar. The honey crop of 1914 is almost a total failure. Many colonies of hees will soon be in a starving condition and many thousands will die of starvation before next spring unless they are fed.
Then, after pointing out from the experience of1 those engaged in the industry that it is dangerous to feed honey to bees, owing to the frequent occurrence of bacteria, the circular proceeds:
It is therefore urgent that every person interested in the preservation of the beekeeping industry in Canada at this time should write or telegraph immediately to his member at Ottawa while the House is in special session, urging him to see to it that such action be taken as shall be necessary to insure a supply of granulated sugar to the beekeepers for feeding their bees properly for winter.
A further paragraph is in these words:
In writing it should be pointed out that human beings and the domestic animals have a great variety of food from which to select-[DOT] bees have only the one. Also that the feeding will need to be done within the next six weeks. For our Government to miss, making special provision for the bees at this time might result not only In a heavy financial loss to thousands of beekeepers (there are 10,000 in Ontario alone) but by great cruelty by starving to this particular form of animal life.
I would ask my hon. friend if the facts set forth in this circular have been drawn to his attention. Whether that be the case or not, I would invite him to express an opinion with regard to the request that is contained in the circular, extracts from which I have just read.


William Thomas White: The matter was brought
to my attention to-day, but I think it has no serious bearing upon the question of the tariffs that we are considering. The additional duty upon sugar would not be a very important amount for the keepers of bees, provided they could get the sugar, and I assume they will be able to get it. Of course, they are apprehensive about their supply.


Mr. PROTJLX:: I would have preferred
that the increase of customs duty on granulated sugar had been less and that an excise duty had been put on the Canadian manufactured sugar. The Canadian manufacturer will now have the advantage over the foreign manufacturer; he will enjoy the protection and the consumer will not get the benefit.


Mr. HENDERSON:: I am not one of
those who complain about the increased duty on sugar or who think it will raise the price of sugar inordinately. I think sugar is one of the 'Cheapest articles of food we have: it is one of the articles that can bear taxation, and I appreciate what the Minister oif Finance has done in raising revenue in this way. I can remember forty years ago when we did not complain very much when we got granulated sugar at about eight pounds for a dollar. Latterly we had been buying twenty pounds for a dollar. It is *a cheap article. I suppose it is reduced now to perhaps sixteen pounds for a dollar, 'but it is still cheap.


Frank Broadstreet Carvell: It is down to ten or
twelve pounds for a dollar.


David Henderson: That may be down
in New Brunswick, but up in Ontario the people have a 'conscience, you know. I had a communication from a beekeeper this morning 'along the same lines as that which has been read by the hon. member for Russell (Mr. Murphy). My correspondent is afraid also that his bees are going to suffer. It is not the price he complains of, hut the difficulty of getting a supply, because the dealers in his section of country refuse to sell him more than twenty pounds, and he says he will require a great many pounds to keep his bees over for the next six weeeks. He wanted me to get some action by the Government to enable him to procure sugar, perhaps to compel those who had the sugar to sell it to him. Seeing his difficulty, I advised him to go to Hamilton, near which city he lives, go to a goodly number of dealers and buy his twenty pounds from each dealer. More than that, I suggested that he might get his neighbours who had no bees to accompany him and buy all the sugar they could get. I have no doubt the man will take advantage of my suggestion and will be able to keep his bees through. I am aw,are that sugar is being sold in limited quantities. I think that in some parts of this country that is overdone. In Winnipeg, where I was some 'ten days ago, I was

told that you could not buy a barrel of sugar, -that the wealthy people had bought up the sugar and were storing it away. That is a kind of panic that will pass off in a week or so. People will come to their senses and will see the impropriety of such a course.


Mr. TURGEON:: No member is more
anxious to assist the Government in putting 'their measures through than the hon. member for Gloucester (Mr. Turgeon). I belong to a province upon which my hon. friend who has just taken hie seat seems to have cast the imputation that every one in it is without a conscience. I must say that I am one [who feels that he has a conscience. I have a conscience especially for my poor farmers and fishermen who in the carrying on of their hard pursuits have to use sugar for themselves and families.' Sugar is a necessary food which cannot be replaced except by other ingredients, which are more costly. I was surprised ;to hear the hon. Minister of Finance say yesterday that sugar had been among the very first articles to be taxed. I would have expected that the increase of customs on spirituous .liquors would have 'been much greater than the minister and the Government have made it. It is true I have heard the minister say that he has consulted experts and has been advised that if he raised 'the tariff any higher it would stop the increase of revenue. I do not intend to compare my experience and .consultation with experts with that -of the Minister of Finance, but in my belief, after having consulted my people before coming to Ottawa on this very question, the higher the Government makes the duty on spirituous liquors, removing it from articles of food and necessity such as sugar, the more he will meet the wishes of the people at large and he will certainly not stop the increase of revenue. People who must have liquor will get it at any price. It may be said that it is often used medicinally, but any person who uses it for that purpose will be willing to pay a little more for it. I hope if it is at all possible that the Minister will still reconsider the imposition of the increased duties on sugar and coffee, I would favour instead a further increase in the duty on spirits or even on tobacco. Something has been said about an income tax. I would certainly second any proposition of that kind. I agree with the Minister of Finance .that an increase in postal rates would be of no consequence.


Mr. BURNHAM:: Is the minister quite
convinced that the people of this country wish to contribute in the way he has suggested by an extra impost on sugar? Because, surely, he would not have put on that extra impost but for a desire to gratify this ambition on the part of the people.


Mr. McOOIG:: While the question of
ways and means of raising revenue under the existing circumstances is under discussion, I would like to draw the attention of the Minister of Finance to the following statement made by Mr. A. M. Fraser, provisional director of the Essex, Kent and Elgin Tobacco Growers' Association:
In Canada during the past year the price of all manufactured tobacco was advanced 10 per cent, while the price to the Canadian grower was reduced 30 per cent, thus increasing the profits of manufacturers more than $10,000,000 a year. A customs duty of 30 cents a pound would produce a revenue of about $5,000,000, and I am sure the people of Canada will appreciate a tax upon tobacco in preference to any additional taxes on the necessaries of life.
For the benefit of the House and the Finance Minister in particular, I may say that the last report of the Department of Trade and Commerce shows that there .was imported into Canada in one year 13,753,141 pounds of raw leaf tobacco. If a tax were put on that article, it would not only encourage the tobacco industry in Canada but assist in giving us the revenue which I feel satisfied the minister desires at the present time. I understand that the Bill which the House is asked to pass gives an increased protection to the manufacturer, but no increase to the producer that will put the manufacturer in a position to further dictate the price he shall pay to the Canadian producer, .and will give him even greater advantages over the American manufacturer than he now has. If the minister would consider a further tax on the raw leaf tobacco coming into this country, he would not only receive the revenue which he is anxious to get, but would he encouraging an industry which up to the present time has largely been discouraged in the counties of Essex, Kent and Elgin, and I would be very glad if the minister would give this mattsr some consideration. I understand that the tobacco growers of the different counties have already petitioned him, as well as the Minister of Agriculture and the Minister of Inland Revenue, who I believe assured them last session that he would take up this matter with his colleagues and give every consideration possible to the tobacco growers of the Dominion.


William Thomas White: My hon. friend has overlooked the excise duty on raw tobacco imported into Canada. If he will look at that he will see that the interests of Canadian growers are reasonably well protected.


Archibald Blake McCoig: The minister will understand that directly the Canadian manufacturer is given increased protection he can lower the price he pays to the Canadian producer, because he has no competition from the American .manufacturers. If the minister would consider the growers in this matter and give them a proportion of the protection, it might assist in encouraging this industry. I admit the Minister of Agriculture has been anxious to encourage it,, and that a large amount of money has been spent foy this Government and the late Government in endeavouring to put it on a sound basis.


William Thomas White: Under the resolutions relating to inland revenue, I would point out that the excise duty applies on foreign raw leaf tobacco. I understand that is a most important factor in the consideration of the question that my hon. friend has drawn to my attention.


William F. Carroll: While we all admit the unfortunate necessity of collecting an extra revenue for war purposes, I am one of those who think it might be raised in a somewhat different manner. Before leaving my constituency for this special session of Parliament, I was instructed by the various labour organizations of Cape Breton county to protest against any proposed increased tax on the necessaries of life. In making his Budget speech yesterday, the Minister of Finance stated that he had placed a tax on materials which would affect the people of Canada in general alike. In the first place, I want to say that in Canada our foodstuffs have increased very materially in price in recent years. I do not know that there is any particular cause for it, but it does seem a hardship that people who a month ago were paying $5.50 or $6 a barrel for flour should have to pay an extra dollar for it to-day. That is one of the things the Government should take into consideration: they should see that , our wholesale dealers in foodstuffs and our millers are not permitted to become wealthy, in an unfortunate situation of this kind, at the expense of the common people. As for sugar, it is something that is used by all people. When the minister told us yesterday that he expects to raise $5,000,000 from the extra tax on sugar, I considered that too much of a 
hardship to place on the common people of this country. It might be said that the tax is not placed on the common people but on the nation as a whole. That is very true. In my opinion, however, the Government should see that those who pay the war tax in this particular case are those who can well afford to pay it. In this war it is the poor man who will have to shed his blood; it is the poor man who is called on to defend his country, and I do not think that he should be called on to share with his rich neighbour the burden of taxation. As my hon. friend from Red Deer (Mr. Michael Clark) very cogently put it yesterday, it is the poor man who generally has the large family, ranging from seven to ten, and if his family individually uses the same amount of sugar as the rich man's, then the burden falls more heavily on the poor than on the rich.
Then, in regard to preserved fruits and sweetened biscuits. I will not pay any attention to sweetened biscuits, but preserved fruit is the kind of fruit that is a luxury in the homes of the poor. I would rather see the duty placed upon fruit that is grown in the United States, and imported into this country and used more extensively in the families of the rich than in the families of the poor. There should be other ways of raising a war tax, of raising money to help out the mother country, and we are all anxious to help her out in her hour of distress, than by placing a tax on the food of the common people. For example, we have in this country men who are willing to come to the front and contribute $500,000, $20,000, $40,000 in defence of the Empire. They are asking to be allowed to do it and they are offering contributions. Would it not be a wise thing for the Government to take into consideration the placing of a direct tax on these people and finding out how many there are in this country who are willing to say: I am the proud possessor of $100,000 and I am willing to pay a 5 per cent or a 2 per cent tax upon that money and to give it for war purposes? That is the income tax. Then there might be a stamp tax placed upon all cheques issued or all receipts received. That would not touch so much the pockets of the poor as the pockets of the rich. I am protesting against this method of raising taxation. I am protesting against the height of the tariff on the foodstuffs of the common people. They are burdened enough now, they are overburdened, and it is a serious matter to burden them further.

The cry in Canada, according to my own humble opinion, is for cheaper foodstuffs and we are certainly not going to get cheaper foodstuffs by increasing the tariff on these commodities.
I am not making this criticism in any partisan spirit and I am not attempting to make any political capital out of th's matter, but I am simply giving to this House the protests which have been lodged with me by people who have sent me here. They have asked me to protest against any tax on foodstuffs for the raising of a war revenue. I am protesting. My protest may have little weight but I am carrying out the intention with which they sent me to this Parliament.
There are a hundred different ways that one can conceive of by which a war tax must be raised in 'addition to the ones that I have mentioned. There is the income tax and there is the stamp tax. There might be a stamp tax placed upon every cheque that is issued by a business man. It would be no burden upon him, but if placed upon the shoulders of a man who is earning .a dollar or $1.50 or $2 a day it would be a burden. There might be a stamp tax placed upon receipts amounting to over $50. This would not necessarily be a burden upon the poor man, because he very seldom gets a receipt for that amount of money, and it certainly would not be a burden upon the man receiving the receipt for money paid to that extent. Then, there are automobiles imported into this country to a large extent. Why did not my hon. friend the Minister of Finance take into consideration the placing of a higher tariff on automobiles? Why did not the Minister of Finance take into consideration the placing of a higher tax upon the owners of automobiles in the various provinces? There might be a question raised that the Dominion Parliament cannot levy direct taxation, but in a case of this kind, in the case of war, the Dominion Parliament has a jurisdiction which is not only equal to and concurrent with the jurisdiction of the provinces, but even a greater jurisdiction. There have been powers taken by the Parliament of Canada, under the heading of the peace, order and good government of the country, which men at the time of the passing of the British North America Act had no conception of. They might be taken to-day, and I believe that if the Minister of Finance had taken into consideration the imposition of an income tax and of a stamp tax
on cheques and receipts and a tax on automobile owners, he would have derived a greater revenue from these .sources than the sources from which he is attempting to'raise it. As I said in the beginning I say in the end, that I am .making this protest without any partisan purpose; I am making it because I was asked to make it by several people in this country-


Some hon. MEMBERS:: Oh, oh.


William F. Carroll: My hon. friends jeer.
If they can find any satisfaction in that so much the worse for their own minds. I am here to vote $50,000,000 for the defence of the Empire. I am willing to vote $100,000,000 for the defence of the Empire if it is necessary to do so, but I am here in the meantime as the representative of a constituency in this country. They have asked me to make the protest that I am making now, and if hon. gentlemen opposite by cheers and jeers intend to suggest that I am trying to make political capital out of it so much the worse for their bad judgment, I suppose there are some of them who would not like to see the rich taxed. We on this side of the House, unfortunately for ourselves and for our families, are not in that category. I have given my reasons for making the protest, I do it with the very best of intentions, and I appeal to the good judgment of the Minister of Finance. If he cannot raise this war revenue without inflicting an injury upon the poorer classes in the country, .so much the worse for these .poorer classes.


Mr. EDWARDS:: I am sure that every
person in this House has a right to represent what he believes to be the sentiments of his constituents in regard to this matter, and so long as he does so, and honestly expresses his and their convictions, I am not disposed to find fault. We will, and do, honestly differ as to the best means of raising the money that it is incumbent upon us to raise at this time. I think that my hon. friend the Minister of Finance has taken a very wise course, considering the matter in all its bearings. There may be other means by which it may be necessary to raise Inoney later on, but I think the course which he has adopted is one which will meet with the commendation of the people generally. In discussing the question of the increase of duty on sugar, let us look at the matter for a moment. I understand that it is estimated that about $5,000,000 of revenue will be obtained in


Mr. KNOWLES:: I desire to impress upon the -mind of the Prime Minister a message which I am informed was sent to him from my own constituency. The -sender of the message at the -same time s-ent me a message informing me that such -a communication toad been addressed to the Pri-me Minister. The communication which I have is a telegram from the Secretary of the Trades and Labour Council of the city of [DOT]Moosejaw, -saying that to the Pri-me Minister the following message had been sent:

The Moosejaw Trades and Labour Council by special resolution adopted this date strongly urge upon you the necessity for governmental control of prices of foodstuffs during the existing war period.
B. Milligan, Secretary.
I am not going to enter into any discussion as to the wisdom of the ste-ps which the Minister of Finance has taken. The money must be -raised; and while I may be wrong in approving the -action of the minister, -as far as my knowledge goes, there is no dissent in my md-nid from the plan which he has proposed. I wish, however, to add my own endo-rsation t-o what this organisation in the city of M-oo-sejaw has submitted to the Pri-me Minister, especially from the viewpoint of the western consumer. Times in the -district from which I -come -are far from g-oo-d in -any event, and that, added to the condition o-f depression . caused by the present prices, -makes govern. mental -control of prices of foodstuffs all the more necessary. So that I tru-st the Prime Minister will realize -h-ow very vital and important it is for t-he Government to use every -piece o-f machinery that it possesses and to -leave no stone unturned for the purpose o-f keeping to the ultimate consumer th-e food -products aJt as -low a figure as possible.


Robert Laird Borden: A good many
communications of the character to Which the hon. gentleman has alluded have been received by the Government during the past two weeks. He will -appreciate, I am sure, the fact th-ait the question is no-t without its difficulties, and I can only assure him th-at we sh-ai-1 give to the representations which have been pl-aced before us the very -best consideration we can, and do all th-at seems to be feasible and reasonable to -assist in relieving the conditions mentioned in these various -communications.


Edward Walter Nesbitt: I would be very glad if
the Minister of Finance could see his way not to impose a duty on sugar. Sugar is not -a luxury in Ontario; it is practicality a staple food. Alt the families that I know use sugar to a very great extent, and they will feel this duty as rather a hardship.
I trust th-at the Minister of Finance will no-t (have to keep this -large duty on sugar for any length of time, and that 'he will find some other method o'f raising revenues.
I do not see why he could not have increased the flotation of currency by another ten -million dodl-ars. That would n-ot have hurt the	credit of

the country at all; it would have been a much readier way of raising revenue, and it would also have removed a burden from the ordinary people who use great quantities of sugar. Some one pointed out that the rich man does not use more sugar than the ordinary man in proportion to their means; and as sugar is something that nearly every family uses, I would suggest that a more ready and reasonable way of raising revenue would be to increase the flotation of currency.


James Joseph Hughes: I understand that the increase in the price of wheat has been only ten cents per bushel and the increase in the price of flour has been $1.35 per barrel. While the Government are considering prices, that is a matter that might receive consideration. Whether the millers by combine have been able to charge the consumers about eighty-five cents more a barrel than the increase in the price of wheat would warrant is a question that should receive some consideration. The wholesale price of a good grade of flour some three weeks ago before war was declared was $5.15 per barrel, whereas at the present time' the price for the same grade of flour is $6.50 per barrel at the same place.


Mr. LALOE:: Does the hon. member make the statement that wheat has advanced only ten cents per bushel ?


James Joseph Hughes: That is what I understand.


Francis Ramsey Lalor: You are quite wrong.


Edward Walter Nesbitt: Wheat with us has advanced twenty cents per bushel.


James Joseph Hughes: That will be $1.00 per barrel, which makes the price of flour thirty-five cents per barrel too high. I understand that millers are importing wheat from the United States, paying twelve cents a bushel duty upon it; and I have been informed that that is only an excuse and that the wheat is obtainable in Canada.


David Henderson: Did not the hon. gentleman only last session or a few sessions ago vote for the free importation of wheat into Canada ?


James Joseph Hughes: I say it would be better to have free wheat now in the interests of the consumer.
Some hon. MEMBEES: What about the farmers ?


James Joseph Hughes: If the farmers are holding up the millers, expecting a higher price and taking advantage of the situation,
I do not think they should be allowed to do so. I would, under such circumstances, bring wheat free into Canada. I do not think that anybody should be allowed to take advantage of the present condition of affairs to charge the people more than an 'article is worth. If my hon. friend is correct in saying that there has teen an advance of twenty cents a bushel in wheat, five bushels making a barrel of flour, that would mean a dollar increase in a barrel of flour. I presume the Government desire to do whatever they can to assure reasonable prices to the people, and so I bring these points to their attention as showing that there is something wrong, particularly with regard to flour, one of the necessities of life.


Alexander Kenneth Maclean: I desire to say a word in regard to the sugar duties in addition to what has been said by others. I doubt very much that the Government will receive the revenue from sugar which they have in mind, and I doubt also that the imposition of an increased sugar tax at this time will meet with favour in the country. I quite grant that sugar is always a pretty good article to tax if you desire to Taise revenue by customs duty. I think that all countries of the world with the exception of two now impose tariff taxation upon sugar. It is considered by many a desirable subject for taxation, for the additional reaeon that the whole revenue collected goes immediately into the treasury, and there is very little cost in collecting it. However, I think that the conditions to-day are not favourable to the increased duties upon sugar. In France, Germany, Austria and Eussia large quantities of beet-root sugar are produced. I do not know what their production for this year will be, but certainly it is expected by the sugar manufacturers that there will be a considerable diminution in the world's total production of raw sugar. I know it is in the minds of Canadian manufacturers of sugar that, regardless of the proposed additional tax, the price of the article is bound to go up. I was informed by one manufacturer of sugar that ten cents a pound was not an improbable price for sugar within a very short time in Canada. I think it is quite true that the manufacturers to-day are fulfilling their contracts at the prices made and are not endeavouring to increase them in working off their present stocks. But

they do anticipate a very substantial increase in sugar prices 'by reason of the fact that possibly a good portion of this year's beet-root sugar production in Europe will be curtailed and that next year there will probably be very little beet-root sugar grown in the most important European countries. For these reasons it is a grave mistake to impose additional taxation Oil sugar. I join with some hon. gentlemen in regretting that at this time, particularly under the conditions surrounding the growth and manufacture of sugar and sugar products, that the Government have sought additional revenue from this source.
Mr. H. BOULAY (Rimouski)-(Translation) : Mr. Speaker, after listening to the remarks of the hon. gentlemen from Carle-ton (Mr. Carvell) and Gape Breton (Mr. Carroll), who both represent rural constituencies, I feel it is incumbent on me to concur in the views voiced by these gentlemen as regards the duties levied on sugar.
I am not prepared to say under the circumstances that the aforesaid gentlemen have made these remarks in a partisan spirit, for in the present emergency, every Canadian feels it is his duty to work hand in hand and help the Government to the utmost of his ability.
I realize that the task of the hon. Minister of Finance and of his colleagues has been an arduous one of late. I am aware that the hon. Minister of Finance has 'been called upon to prepare under rather short notice a tariff designed to meet the emergency, and that he has acted with all the wisdom possible and so' as to forward the best interests of the country.
However, as stated by the hon. members for Carleton and Cape Breton, I think that the duty on sugar is of a nature to bear more particularly on the poorer classes. I am not an expert in the matter, but I think that we might possibly have managed to levy taxation in some other way, without burdening the working classes, which is the most numerous in this country.
I would have preferred voting in favour of higher duties on liquors, tobacco, fancy and toilet articles, automobiles, in a word on all such things as can be dispensed with in these critical times.
The hon. member for Frontenac (Mr. Edwards) stated a moment ago that this increased taxation on sugar should not 'be taken exception to as, after all, he said, it represented not more than about three dollars per family a year. That may be true, but it should be borne in mind that,

if the war is protracted, it will not be the rich man in this country who will suffer the most from it, but rather the poor. The small wage-earner will be obliged to purchase not only sugar, but many other goods that he cannot dispense with, even when they are sold at an advanced price, [DOT]and that will surely happen, since importation will necessarily he impeded.
If our country feels the pinch of hard times, the poorer classes will be those who will suffer most, and those are the people whom Parliament should more particularly look after in this emergency.
What I have just stated is not for the purpose of making difficulties for the Government, for, like every good citizen, I am anxious to do my duty. We are not here to make useless speeches; this is a time for deeds, not for words, as was said the other day by the hon. member for Montmagny (Mr. L'Esperance)., But I think I should be allowed to offer these few .suggestions, which appear to me to be in the interest of the country and of that class of workers whom I represent in Parliament.


Mr. MICHAUD:: When I was leaving home some of my constituents, who will probably not be in p position to earn money during the coming winter, asked me to approach the Prime Minister and beg of him not to impose taxes upon food products. No mention was made of any particular item, hut as I see that a tax is proposed upon sugar I would ask the Prime Minister to take into consideration this message brought to this House by myself as the representative of the electors of the counties of Victoria and Madawaska. In those counties we have thousands of men who are accustomed to go into the lumber woods. These men will have no work during the coming winter. Our lumbermen get their money more particularly from the old country; and as they will not be able to carry on that trade under present conditions they will not .send men into the woods at least during the coming winter.
I hope that the Prime Minister, having heard hon. gentlemen express the opinion that a tax on sugar will not be favourably loolsed upon by the poorer people of this country, will reconsider this question and decide no;t to impose any such tax.


Alexander Kenneth Maclean: Is there any
change in the excise duty on Canadian beet sugar?


William Thomas White: No, we have not imposed any excise duty on sugar. My hon. friend is aware that the sugar refiner gets the raw sugar and manufactures it into the refined sugar. Duties have .been placed on raw sugar imported into Canada, so as to equalize the increase in the duty upon refined sugar. T,he beet-root sugar manufacturer manufactures from the Canadian product, and often imports a certain amount under a provision in the tariff. We gave the matter some consideration and reached the conclusion that it is not expedient to impose an excise duty on sugar. The matter will equalize itself in time. No tariff change can be made of an important character that does not work an .advantage to some and impose a disadvantage upon others. What should happen is that the price of the beets should go up.


Alexander Kenneth Maclean: When is the
European beet crop harvested?


William Thomas White: I am unable ito answer my hon. friend. I do not know that it is all harvested .at the same time.
25. Chicory, kiln-dried, roasted or ground, per pound-British preferential tariff, 2 cents; intermediate tariff, 3 cents; general tariff, 3 cents.


William Thomas White: There is no Change in that except that the intermediate is equalized with the general tariff.


William John Macdonald: Where is it imported from, mostly?


Robert Laird Borden: The United
Kingdom, Belgium and the United .States.
25a. Coffee, extract of, n.o.p., and substitutes therefor of all kinds, per pound-British preferential tariff, 5 cents; intermediate tariff, G cents; general tariff, 6 cents.


Mr. MICHAEL CLARK:: Would it not be more equitable to impose a percentage tax here instead of a specific tax per pound?


William Thomas White: In the ease of coffee, the matter is not as important as it would be in the ease iof tea. We have made no change in the duties upon tea. We had that under consideration, but for the reasons that have been advanced here tonight-that tea is a commodity in universal use, and that an additional tax upon it *would hear heavily on the community as a whole, and upon the poor as well as the rich-we came to the conclusion that we would not make any change with regard to tea. I may say that when you are considering the question of revenue, you find that there are very few sources that 6
give you a large revenue. One of the sources that give you a large revenue is tea; another, coffee; another ( sugar j another, liquors and tobacco. If you go outside of these, the revenue you can raise is comparatively limited unless you increase the tariff as a whole, which at this time is not desirable. With regard to coffee, the price does not fluctuate so much that the objection to the specific duty is as weighty as it is in the ease of most commodities. In the case of most	commodities, where the price
fluctuates very much according to quality, the specific duty bears more heavily upon those who buy the cheaper articles, because the ad valorem percentage is greater. I raised this question in connection with the tea tax which we had under consideration, because the price of tea does vary very	greatly from a comparatively
small amount, say 15 cents per lb., up to a dollar or more per lb. In practically .ail the countries of the world the tax upon tea is specific, not ad volorem, the reason being that, on account of the conditions under which tea is bought, an ad valorem tax lends itself easily to fraud. Then there is the question of convenience of collecting. In the case of coffee, there seems to be no weighty objection, so far as I can see, to a specific duty.


Frank Broadstreet Carvell: Only last evening I was discussing this question with a large coffee wholesale merchant, and the objection he was making was that in some cases you would be charging about 10 per cent ad valorem and in many other cases 20 per cent ad valorem. I was surprised to find that some kinds of coffee cost more than twice as much as other kinds which the ordinary people are using.


Alexander Kenneth Maclean: How much revenue does the minister expect to raise from this new tariff on coffee?


William Thomas White: I expect to derive from the coffee tax about $500,000.


Alexander Kenneth Maclean: What is the extent of the importations into Canada?


William Thomas White: The importations of extract of coffee amount to about 200,000 lb., and of coffee roasted or ground about 430,000 lb. That is under the n.o.p. item. Then, coffee roasted or ground, when not imparted direct from the country of growth and production, over 500,000 lb. Coffee, green, imported direct from the country of growth and production, and green coffee purchased in bond in the United Kingdom, 15,400,000 lb. That


John Howard Sinclair: On this item there is an increase in the case of intermediate tariff of five per cent and in the case of the British preferential and the general tariff of only two and one-half per cent.


William Thomas White: I may say that in the tariff *changes we have been recently making we have been trying to equalize the intermediate and general tariff where possible, where no serious question is likely to arise under treaty or otherwise. The intention is to make this twenty-seven and one-half per cent intermediate and twenty-seven and one-half per cent general.
134. All sugar above number sixteen, Dutch standard in colour, and all refined sugars of whatever kinds, grades or standards, testing not more than eighty-eight degrees by the polariscope, per one hundred pounds-British preferential tariff, ?1.52; intermediate tariff, $1.93 ; general tariff, $1.93.


Alexander Kenneth Maclean: What is the increase on sugar 96 degrees polariscope?


William Thomas White: The present tariff per hundred pounds is 72 cents British preference; 93 cents intermediate and 93 cents general; and for each additional degree over eighty-eight degrees per hundred pounds-British preferential tariff, 1 cent; intermediate tariff, 11 cents; general tariff, 11 cents. The result is that for ninety-nine degrees of sugar, that is, the refined commercial article, per hundred, the British preferential tariff js 83cents; the intermediate tariff $1.07f, the general, $1.07f. The proposed tariff per hundred pounds is $1.52 British preference, $1.93 intermediate and $1.93 general; and for each additional degree over eighty-eight degrees, per hundred pounds, British preference, 1 cent; intermediate, 11 cents; general, 11 cents. That means that for ninety-nine degree sugar per hundred pounds the present duty is $1.63 British preference, $2.07f intermediate, and $2.07f general.


Alexander Kenneth Maclean: How much is the general tariff higher under this than the other? .


William Thomas White: The general tariff is one dollar a hundred, about a cent a pound under the intermediate and general tariffs and four-fifths of a cent under the British

preferential. That is the effect on refined sugar. We import almost entire'y under the preferential as far as the East is concerned.


Frank Broadstreet Carvell: What is the increase on raw sugar?


William Thomas White: On raw sugar testing 96
degrees per 100 pounds, the present tariff is 40| cents British preferential, and 571 cents general. The proposed tariff is $1.03! British preferential, and $1,371 general.
135a. Raw sugar as described in tariff item 135, when imported to be refined in Canada by Canadian sugar refiners, to the extent of the quantity of sugar refined during the calendar years 1912 and 1913, by such refiners from sugar produced in Canada from Canadian beetroot under regulations by the Minister of Customs, per one hundred pounds, testing not more than seventy-five degrees by the polariscope- British preferential, intermediate, and general, 88 cents.
And per one hundred pounds for each additional degree over seventy-five degrees-British preferential, intermediate, and general tariff, | cents.


William Thomas White: Item I35a, under the present tariff, empires on the 31st of December, this year. It is part of the arrangement We have with the British West Indiets which relates to the beet sugar manufacturers, who have the right up to the 31st day of December, this year, of importing raw sugar no matter whence it comes at preferential rates. We haVe had to increase that.


John Howard Sinclair: Why is no preference
given in the case of raw sugar? The rate is the same for British preferential, intermediate and general, 88 cents in each case.


William Thomas White: Under this particular item they get in the sugar under the British preferential rate. That is part of our agreement with the British West Indies.
146. Ale, beer, porter and stout, when imported in casks or otherwise than in bottles, per gallon-British.preferential, 30 cents; intermediate, 30 cents; general, 30 cents.


John Howard Sinclair: I would like the minister to explain why the tariff which we are imposing by items 146, 147 and 156, dates from August the 7th instead of from August the 4th, when war was declared? Perhaps there may be some reason for arbitrarily fixing on the 7th of August.


William Thomas White: The reason we have for
dating this back to the 7th is in no wise connected with the war. It has come to our attention through the Customs and Revenue returns that abnormally large quantities of liquors and tobaccos have been taken out

8-J
of bond during the past two weeks. For the information of the committee, I shall give some figures which will show what has been done. The abnormal increases commenced about the 7th of August. Prior to that the situation was normal. The following statement gives the daily excise returns
from August 1	to	August 20 for	the years1913	and 1914:	1913.	1914.August 1. . . .	. .$ 47,111.72	3 42,264.314. . . .	.. 54,808.23	94,884.245. . . .	.. 224,083.20	206,441.736. . . .	.. 89,707.22	56,922.897. . . .	.. 40,369.94	45,677.108. . . .	.. 58,896.25	66,946.89**	10.. ..	.. 47,760.30	55,240.52a	11.. ..	.. 80,529.96	119,333.98n	12.. ..	.. 77,548.44	80,948.14ii	13.. ..	.. 46,719.22	182,164.29ii	14.. ..	.. 159,446.11	108,095.60it	15.. ..	.. 67,585.44	84,300.51ii	17.. ..	.. 47,388.81	197,012.73it	18.. ..	.. 43,398.50	242,206.86ii	19.. ..	.. 98,293.52	156,633.94ii	20.. ..	.. 35,181.18	126,322.34
The abnormal increases took place from tlhe 12th of August onwards. On the 13th of August, 1914, the returns were four times as large as the returns for 1913; on the 17th, nearly five times as large, on the 18th six times as large and on the 20th nearly four times as large. It is desirable that we should be fair to all concerned. A great number of dealers have taken goods out of bond in the usual course to meet the requirements of their business. On the other hand, there undoubtedly have been many who have sought to take advantage of the situation. It was known that the Government would have to impose additional taxation. The conclusion could be easily reached by experienced business men that resort would be had to an increase in the excise duties, and some have taken advantage of the situation to take out large amounts of these commodities which have been in bond. Some of what has been taken out has been sold at the usual price, some at a slight increase, and much no doubt is still in hand or in stock, and if the Government did not date this back to the 7th of August it would mean that very large sums of money would he made by certain parties who have taken goods out of bond, not to meet the ordinary requirements of their business but in expectation of a rise in excise duties. If the amounts were not large,
I would not be disposed to pay much attention to it, but the Government must deal equitably and justly with the situation. It would not do to penalize all, and it would . not do to collect the increased duties from 6i
those who in good faith and in the ordinary course of business have taken goods out of bond and sold, them to their customers in the usual way. The Government will have to investigate the situation through the officers of the Customs Department and do whatever may be just and equitable, but it seems to me that at a time like this, when the whole country is making sacrifices the Government would not be acting justly or fairly to itself or to the body of citizens it represents if it permitted undue advantage on a large scale to be taken of the situation which has been created by the increase in the excise duties. That is the position as it presents itself to me at the present time.


Alexander Kenneth Maclean: If a person withdrawing goods from a customs warehouse receives no additional profit although disposing of an additional quantity, would he be compelled to pay the duty? For in stance, the small dealers may have been shrewder to anticipate Government action than the wholesalers, and while the withdrawal of goods may have been very large they miay not have been sold at higher prices. What would you do in a case of that kind?


William Thomas White: I appreciate the point that my hon. friend has made. It is quite probable that many smaller dealers, in anticipation of an increase in duties, and consequently of an increase in prices, have given their orders to the wholesalers. It is impossible to lay down any general rule. The Government must look into the whole situation and do whatever is just, fair and equitable.


Wilfrid Laurier: I received
from the city of Quebec a telegram signed by some of the most respectable commercial men in that city, whidh I will hand to my hon. friend the Minister of Finance. They make the complaint which has just been Stated by my hon. friend, that they have taken out goods in the regular course of their business, that they have disposed of them and that they axe subject to a very great loss. I think we have heard with great interest what has been said by my hon. friend the Minister of Finance that the Government intend to deal fairly in this matter. The difficulty is where to draw the line and how to define any rule which would apply, separating the wheat from the-draff, distinguishing betw.een those who have been honest in their transactions and those who perhaps have not been dishonest

but who have acted in a certain way for the purpose of making some money. My hon. friend has not given us any indication of what action he proposes to take, and I am sorry to say that at the present time I do not see what action he can take under the law. The law that he is introducing now says .that the revenue will be collected from such a date at such a rate. Does he think that he has the power to remit the duty to this, that and the other one? He might remit the duty to a class, or he might do it under a general rule, Ibut I do not know how, under the Law, .he will be able to remit duties .to an individual. This is a very serious question, and if any hon. friend could give us more information as to what he has in mind I think the committee would be obliged to him.


William Thomas White: My view would be that the Department of Customs should make an investigation as to the withdrawals that have taken place, and, if it appears in particular cases as it well may that goods have been withdrawn and sold in the ordinary course of business, a remission of duty should be granted to those who will have to pay the increased duty from the 7th August. On the other haind, there is no doubt that there will be many cases in which it is clearly .apparent that goods were taken out of bond, not for the purpose of being sold in the ordinary course of business, 'but in order to take advantage of the situation; and in my view in these cases there should be no remission of the duty granted. The customs officers should not enforce the law in respect to the period between the 7th and the date of the delivery of the Budget speech until they can look into the matter fully and carefully. A deputation from Montreal waited upon me to-day and I have also received telegrams similar to that which my right hon. friend sent to me. I have indicated to all the view which I have expressed to the House. I think there is statutory power to enable the Government to deal with the situation. I think that the legislation should go as from the 7th and that the Government should redress any injustice that may result from such a retroactive law.


William John Macdonald: Where does my hon. friend say that he has that- poweT?


William Thomas White: The Audit Act gives the
power to remit duties in any case where the Government deem it proper in the public interest.


Wilfrid Laurier: Does my hon. friend believe that the Audit Act gives 
power to the Government to remit a duty to Mr. So-and-So and not to Mr. So-and-So? I think that the power is intended to apply to general oases and classes and pot to individuals. I would like to know if the officers of the department think that they could deal with cases individually? ~


William Thomas White: We continually deal with individual cases, although we do strive in the Treasury Board to adopt some general principle so that there will !be a rule of action. I think without question that the power exists under the Audit Act. With regard to the results which my hon. friend apprehends, on the one hand we must endeavour to do no injustice to anybody, and on the other hand we must not allow individuals to defeat the purpose of the Government in respect to the levying of taxes so essential at this time in the public interest.


Mr. PELLETIER:: I have received the same telegram that my right hon. friend the leader of the Opposition has just communicated to the House from the leading merchants in Quebec. I at once communicated it to my hon. friend the Minister of Finance, and he gave me the same answer that he has given the House, that these people will be fairly treated. Moreover, I wish to draw the attention of the committee to the fact that the extra duties have not been paid which might facilitate dealing with them.


Frank Broadstreet Carvell: Does the Minister of Finance say that he would be justified in imposing the additional duty on a reasonable amount of goods that a man may have taken out of the warehouse? Take the case of an ordinary merchant who has been - drawing from the warehouse a thousand dollars a day on the .average, and who, since the 7th of August, has been drawing $2,000 or $3,000 a day; would the minister consider it fair that he should charge him the additional duty on a thousand dollars a day because that is the business which he ordinarily has done? It would seem to me more like a fine rather than a duty if you made him pay the additional duty on the whole amount of his withdrawals.


William Thomas White: I think my hon. friend has in mind the very same thing that I have in mind. If a merchant, in the ordinary course of business, has taken these goods out of bond and sold them in the usual way and according to his usual requirements, I . am of the opinion that he should not be compelled to pay the additional tax.


Frank Broadstreet Carvell: I am afraid my hon. friend does not appreciate my point. My point is this: We will say that a merchant last year was withdrawing in the month of August goods to the value of a thousand dollars a day. This year, after the 7th or 8th of August, he commenced to withdraw ?2,0C0 or $3,000 worth a day. Supposing he has withdrawn $3,000 worth a day, would he be expected to pay the extra duty on the thousand dollars worth which represented the business which he had ordinarily carried on?


William Thomas White: That depends on the sales made. My view would be that if 51,000 a day represented his ordinary sales he should not be charged upon that, and it is quite possible that he should not be charged on all the excess. It might be that some of his customers, more astute than himself, had ordered a larger amount than usual, and he might have in good faith filled that order. It is a question of fact the.t the customs officers will have to look int', and in regard to which they will have to uake such recommendations as they deem p\ 'per and fit to do justice in the situation.


Frank Broadstreet Carvell: It is giving pretty bro I power, I must confess, to the department The Postmaster General made the statement, which we know is true, that the duty had not been paid in this case. How would the Audit Act be of any assistance?


William Thomas White: They would have to pay it.
Mr. iCABVELL: Oh, I see; they would have to pay it and then it would be refunded.


Alexander Kenneth Maclean: Will the-minister give us the totals of his expectations of revenue from these increases?


William Thomas White: The memorandum which I have prepared and which I think my hon. friend asks for, is as follows:	From
the customs I would expect to derive for the year, based upon the importations of last year, the sum .of $8,706,672.73. Deduct from that five-twelfths, because five months of the year have already elapsed, $3,627,780.30, leaving for the remainder of the year $5,078,892.43. I have deducted from that one-third, for the reason I gave yesterday, namely, that it is probable that we shall have a slight decline in importations due to the war. Whether that one-third is measurable accurately or not I am unable to say. If we take [DOT] off one-third, it leaves the revenue for the balance of the
year as $3,385,928.29. On excise, the increased duties will give us a revenue for the year, based upon the cotnmodities taken out of bond last year, of $6,600,514.29. Deducting from that five-twelfths, or $2,750,214.29, we get for the remainder of the year $3,850,300, which makes a total additional revenue for the seven months of $7,236,228.29. The House will recall that for the balance of the year I said I would raise $7,000,000. The House will observe from this statement that the increase in customs .and excise for the year based upon last year's experience would be about $15,000,000, but the amount which we shall derive for the year commencing with this date will not be as large by reason of the decrease in importations which we anticipate.


William John Macdonald: I assume that this covers all that the Government propose to offer this session in the way.of the propositions relating to the raising of revenue with the exception of excise duties.


William Thomas White: Yes.


William John Macdonald: 'try, not merely owing to the war but as it existed before the war, and as it will he accentuated very seriously within the next few months-that he has failed in the proposals which he has submitted to Parliament to take into consideration the exact conditions, and that he has not done anything in the suggestions he has made to Parliament which will afford any remedy whatever for the conditions which existed before the war broke out.


William Thomas White: Immediately prior to the breaking out of the war there was a perceptible improvement in the conditions in Canada, due in a large measure to easier money conditions. I could establish that beyond question by the views of business men expressed in the press and otherwise and by official reports. I do not, however, desire to discuss that question now. The situation that prevails in Canada to-day is due not to the tariff but to the war which has broken out among the great powers in Europe, the effect of which is being felt not only in Canada but throughout the world. Canada has had a stream of capital flowing from Great Britain at the rate of twenty-five or thirty million dollars a month. There was probably $100,000,000 a year coming in from the United States. Canada has had, in addition to that, the capital brought in by immigrants. Temporarily-for how long a period, I am unable to say-that stream has been cut through, and so all the undertakings of Canada, undertakings on the part of the federal and provincial governments, municipalities and corporations, have at once felt the need of retrenchment. The situation that confronts us is not a tariff situation but a situation brought about by the war and its financial consequences. One hon. gentleman has spoken of me as being optimistic. Perhaps that is not the happiest term for it. I have confidence in this country and confidence in things gradually righting themselves. The whole world is working towards that end. I do express myself as being hopeful that the first brunt of this matter for many industries, as I said yesterday, will be the worst. Now, if the hon. gentleman has it in mind that it would have been proper for the Government to have undertaken a revision of the tariff at this special session, then all I have to say is that his view is directly contrary to the view of the business community-I do not mean to say individuals of the business community, but the business community generally. It would have a most disturbing effect. The policy of the

Government in this matter will be to watch the situation. It is only two weeks since war broke out. The Government will be prepared to take such Meps as may be necessary to meet economic conditions as they arise. But I must not refrain from expressing to the House my conviction that any attempt on a large scale to radically revise the tariff at this time would make for disturbance of a situation which has been already seriously dislocated. I do not desire to enter, nor, I am sure, does the hon. gentleman desire me to enter, into a controversy about it, because that raises the fiscal question, but as he has called attention to the point, I think I should express in a general way my views. The Government will watch the situation and will be prepared to take such steps as may appear expedient and necessary for the purpose of meeting the conditions.
Resolutions reported and concurred in.
Mr. WHITE thereupon moved for leave to introduce Bill No. 9, to amend the Customs Act, 1907.


[Stage Direction]
Motion agreed to, and Bill read the first time, and the second time, considered in committee, read the third time, and passed.
Mr. WHITE moved for leave to introduce Bill No. 10, to amend the Inland Revenue Act.
Motion agreed , to, and Bill read the first time, and the second time, considered in committee, read the third time, and passed.
Robert Rogers: That when the House adjourns this day it stand adjourned until to-morrow morning at eleven o'clock.
Motion' agreed to.


Robert Rogers: That this House do now adjourn, and that the order of the day for to-morrow's sitting be the same as the order for to-day.


[Stage Direction]
Motion agreed to, and the House ' adjourned at 10.44 p.m.
Saturday, August 22, 1914.