1916-02-17

APPOINTMENT OF CLERK ASSISTANT.

Sir ROBERT BORDEN:: Mr. Speaker, I beg to move:
That the recommendation of His Honour the Speaker, laid upon the table of the House on 15th instant, respecting' the appointment of Mr. Arthur Beauchesne, B.A., K.C., to the position of Clerk Assistant of the House of Commons, be concurred in.	[DOT]

Mr. Beauchesne has been an officer of the Department of Justice, and it is proposed that he be transferred in this way, and at the same salary.


Mr. MARCIL:: I have no objection to the appointment of Mr. Beauchesne; I think he is well qualified for the position; but I am sorry that the system of promotion has not been followed, and that some official of the House was not promoted to this position. The system of promotion should be followed as much as possible. With regard to his predecessor, the late Mr. Laplante, I know that the House realizes fully the value of his services. Perhaps I am in a position to appreciate them more than any other member of the House, by reason of the fact that. I was Deputy Speaker, and afterwards Speaker, for a considerable time. I would suggest to the Prime Minister whether, in view of the unfortunate circumstances of his death, it would not be possible to do something for Mr. Laplante's widow. I understand that she is only to receive, two months' salary as a gratuity. I hope the Prime Minister1 will see his way to deal with the matter, and try to secure some suitable provision for the widow.


Robert Laird Borden: The appointment of Mr. Beauchesne does not involve promotion, strictly speaking, from amongst the staff of the House of Commons; but it is promotion, although at the same salary, in the Civil Service itself. I entirely agree with what my hon. friend has said with regard to the great value of the late Mr. Laplante's services. I always found him a most capable and most faithful officer, and, as I took occasion to say on a previous occasion, I fully realize that his death , is a great loss to this House.
With regard to what my hon. friend has suggested, respecting some assistance to his family, I have not had that matter under consideration. There is a subJCommittee of Council, convened I think by the Minister of Justice, to whom such matters are referred, and I shall be very glad indeed to place the suggestion of my hon. friend before that committee with the view of giving it the most favourable consideration possible, having regard to the public interest, and to the precedents generally followed in such matters.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Correspondence which led to the convening of the Conference of Local Govern-

merits which took place in Ottawa in the month of October, 1915.-Sir Robert Borden.
Report of the Department of Trade and Commerce, Part 3.-Sir George Foster.

[Stage Direction]
MESSAGES OF SYMPATHY:
Robert Laird Borden: I beg to inform the House that the Hon. John G. Foster, Consul-General of the United States, called upon me this morning and gave me a message which had been communicated to him by the Secretary of State of the United States. The message is one expressing the very deep regret of the Government of the United States at the destruction of the Parliament Buildings, and their warm sympathy with the Government, Parliament and the people of Canada in the great loss thereby occasioned.
I must apologize to the House for not having at an earlier date conveyed to them an expression of sympathy from the Government of Japan which was conveyed to me by the Hon. Mr. Yada, Consul-General of Japan, on the day following the fire in the Parliament Buildings. That message also expressed the sympathy of the Gov, ernment of Japan at the very great loss which had been ocasioned to this country.



LIFE INSURANCE COMPANIES INVESTMENT BILL.

[Stage Direction]
Bill No. 35, respecting the investments of Life Insurance Companies.-Sir Thomas White-introduced and read the first time.

[Stage Direction]
[Questions answered orally are indicated by an asterisk].	[DOT]

Mr. WILCOX:: 1.	In what year was gasoline made free of duty?
2.	Is the price of gasoline higher in the principal centres of Canada than in the corresponding parts of the United States adjacent to Canada?
3.	Is there any gasoline produced in Canada? If so, how much, and by whom is the product controlled ?
4.	How much gasoline is imported into Canada, and from what countries?
5.	Has there been any recent change in the refining of gasoline or in the test points, which would make the cost of production higher in Canada than in the United States?
6.	Are the oil fields in the United States, and such oil fields as are being operated in Canada, showing such signs of exhaustion as would justify the enormous increase in the price of gasoline, which has taken place in Canada in the last three months?


Mr. BLONDIN:: 1.	1906; under the Customs Tariff assented to April 12, 1907.
2.	Customs records do not show anything relating to this matter.
3.	Yes; 15,265,380 gallons, amount shipped from the Canadian refineries; no information in the department except names of licensees.
4.	From United States 26,504,649 gallons, valued at $2,828,383.
5.	Customs records do not show anything relating to this matter.
6.	Answered by No. 5.


HALIFAX TERMINALS.
Mr. A. W. CHISHOLM:: What is the total amount expended to date on the terminals at Halifax, and what amount is estimated to finish these works?


Mr. COCHRANE:: The expenditure on Halifax ocean terminals to December 31, 1915, was $4,745,632.56. As detailed plans for the completion of these works have not been completed, and are subject to modification, it is impossible at this time to give the final estimate.


MR. S. M. GENEST.
Mr. BEST:: 1.	Is Mr. S. M. Genest employed by the Government at the present time?
2.	If so, what are his duties, and how much salary does he receive?
3.	Does he devote all his time to the work of the department?
4.	Is there any other person paid by the Government to do part of the work pertaining to Mr. Genest's office?


Mr. ROCHE:: 1.	Yes.
2.	Clerk in charge of draughting room of the Mining Lands and Yukon Branch of the Department of the Interior; $2,800.
3.	He is supposed to devote all his time during office hours to his departmental duties.
4.	Mr. Genest has in his office one assistant, who is paid by the Government.


MR. T. R. FERGUSON.
Mr. W. CHISHOLM:: 1.	Is T. R. Ferguson still in the employ ot the Government in the Department of the Interior or elsewhere?
2.	If so, in what capacity? If not, when did his services cease?
3.	How much has been paid to Mr. Ferguson to date as salary?
4.	How much has been paid to date in connection with the expenses of his commission?
5.	Is anything due Mr. Ferguson and not paid, either for salary or expenses?


Mr. ROCHE:: As far as the Department of the Interior is concerned:
1.	No.
2.	23rd December, 1914.
3.	827,800.
4.	836,951.52.
5.	No.


SEED GRAIN PURCHASES.
Mr. BUCHANAN:: 1.	Did the Government purchase any seed grain from T. W. Dyer, of Bow Island, Alberta, in 1914 or 1915?
2.	II so, when was the purchase made, how much was purchased, and what was the price paid?


Mr. ROCHE:: 
Mr. BUCHANAN:: 1.	Did T. W. Dyer, of Bow Island, Alberta, handle any of the seed grain distributed amongst the farmers in Medicine Hat constituency during the years 1914 a,nd 1915?
2.	If so, under what arrangement was he e-gaged, and how much was he paid for his services?


William Roche: 1 and 2. There was purchased from T. W. Dyer, of Bow Island, Alberta, 857i bushels of barley at ninety cents per bushel, and 1,425 bushels at $1 per bushel. The orders for barley specified that it must be of good quality, clean and acceptable to settlers, and to be delivered at Bow Island, Grassy Lake and Burdett to the sixty-four applicants holding orders for the same. Mr. Dyer received no pay for his services outside of purchase price mentioned.


QUEBEC LIVE STOCK.
Mr. PAQUET:: 1.	How many swine have been loaned to the agricultural associations of the province ol Quebec for breeding purposes during the years 1912, 1913, 1914 and 1915?
2.	How many sheep have been loaned to the agricultural associations of the province of , Quebec for breeding purposes during the years 1912, 1913, 1914 and 1915?


Mr. HAZEN:: 1. 1913, 30; 1914, 69, and 1915, 39 boars.
2. 1913, 40; 1914, 237, and 1915, 170 rams.
fMr. W. Chisholm.}
The policy of loaning boars and rams to associations was not. established in 1912. The associations to which these loans are made are associations of farmers organized under the direction of the Live Stock Branch of the Department of Agriculture. Pure-bred sires are not distributed to agricultural societies organized under the provincial Department of Agriculture.


Mr. PAQUET:: 1. How many bulls and cows have been loaned to the agricultural associations of the province of Quebec for breeding purposes during the fiscal years 1912, 1913, 1914 and 1915?


Mr. HAZEN:: 1. No cows were loaned to associations in the province of Quebec. Bulls were loaned to these associations as follows: 1912, nil; 1913, nil; 1914, 114; 1915, 167. The associations to which these loans are made are associations of farmers organized under the direction of the Live Stock Branch of the Department of Agriculture. Pure-bred sires are not distributed to agricultural societies organized under the provineal Department of Agriculture.


Mr. PAQUET:: 1.	How many stallions were loaned to the agricultural associations of the province of Quebec during the years 1912, 1913, 1914 and 1915?
2.	What are the pedigrees of such stallions?
3.	What precautions were taken in the purchase and inspection of such stallions?


Mr. HAZEN:: ' 1. 1912, nil; 1913, 2; 1914, 33; 1915, 6.
2.	All stallions are registered in the stud books for the- respective breeds, connected with the Canadian National Live Stock Records.
3.	All stallions are purchased by experienced buyers subject to veterinary inspection by an officer of the Health of Animals Branch, Dominion Department of Agriculture.
The associations to which these loans are made are associations of farmers organized under the direction of the Live Stock Branch of the Department of Agriculture. Pure bred sires are not distributed to agricultural societies organized under the provincial Department of Agriculture.


WAR SUPPLIES-OVERSHOES.
Mr. OLIVER:: How many of the overshoes issued to the Canadian Expeditionary Forces have been issued to men when in service overseas?


Sir SAM HUGHES:: 'Eighteen thousand pairs.


WAR SUPPLIES-SOCKS.
Mr. OLIVER:: 1.	Are socks supplied to soldiers on service overseas, on demand of the officers commanding units, as recently stated by the minister, paid for by the soldiers receiving them?
2.	If so, at what range of prices?
3.	Is there any reason to believe that a sufficient supply is not available, or that the quality is inferior?


Samuel Hughes: No.


RAILWAY BONDS GUARANTEES.
Mr. BUCHANAN:: 1.	Did the Government pay by special warrant half yearly interest on Dominion and Provincial guarantees of the Canadian Northern railway? If so, what was the amount paid?
2.	Did the Government pay by special warrant, the half yearly interest on the Dominion guarantee of the Grand Trunk Pacific railway? If so, what was the amount paid?
3.	What interest payments on guarantees to railways have been made by the Government during the years 1914, 1915 and 1916?


Sir THOMAS WHITE:: 1.	No.
2.	No.
3.	None.


ALLEGED DISTURBANCES AT EDMONTON.
[Stage Direction]
On the Orders of the Day:
Frank Oliver: I would ask my hon.
friend the Minister of Militia and Defence (Sir Sam Hughes) if he has any report to make, or any information to give the House, in regard to the alleged disturbances at Edmonton.


Samuel Hughes: I have no information as to any disturbances at Edmonton. I have heard that threats were made at Edmonton, but I have no report of any [DOT]disturbances whatever. Edmonton is a peaceful and law-abiding city.


Frank Oliver: If I might take the opportunity of placing before the House the facts in regard to the case, it may clear up some misunderstanding, and I think it would be to th$ general advantage. As there were reports current that there had been a disturbance in that city, it would be just as well for the House to be aware of how that occurred and what the nature of it was. I will take the opportunity of quoting from the Edmonton Bulletin of Saturday, February 12:
Citizens walking down town last night found the unusual spectacle of pickets of soldiers with riilas and bayonets, stationed at the corners where Namayo, Fraser, Queen's,
McDougall and Howard avenues open on to Jasper, to protect property from violence at the hands of a crowd of their comrades.
Two buildings are understood to have been the objectives of the crowd, the Macdonald hotel and the Bulletin office-the hotel because of a report that alien enemies are employed there, and the Bulletin office because some misguided parties had circulated a false report that the paper had referred to the 51st, 63rd and 66th Battalions as "dogs."
The paragraph which was distorted into a cause of offence on the part of the Bulletin appeared in the editorial columns on Wednesday evening and Thursday morning, and was as follows:	.
"The dog is a very useful and estimable animal in his own place. And his place is a large one. But the street of a city is not part ot that place. Child life in this community would be safer and parental life freed from a good deal of worry if the hides of about three battalions of good-for-nothing mongrels were nailed to the fence."
The plain meaning of the paragraph is clear to any one who does not read for the purpose of finding some hidden significance in it, and nothing of this kind, of course, was meant, and when it became known yesterday that some parties had seized upon it as a pretext to stir up antagonism among the soldiers, a protest against the gross misinterpretation was published in the evening edition. ... To Lieut.-Colonel McKinery, commanding officer of the 66th; Lieut.-Colonel Harwood, commanding officer of the 51st; Lieut.-Colonel George McLeod, commanding officer of the 63rd; and Chief of Police Hill is due the fact that the evening's proceedings did not end more disastrously. Chief Hill, upon learning of the trouble that was brewing, at once telephoned the three commanding officers and apprised them of the situation, informing them at the same time that his men would be powerless without military assistance.
Lieut.-Colonel McKinery, of the 66th, immediately jumped into his auto, leaving Major Durrand in charge of the men at the grounds. The colonel upon reaching the danger zone put officers in charge of all the soldiers on leave, with instructions to prevent disturbance. At the same time the men at barracks, under Major Durrand, were marched into the city, and upon arriving at Jasper and Fraser, cleared the street of all soldiers not on duty, at the same time ordering civilians to disperse.	/
The other battalions responded with promptitude, pickets being sent from, each, and stationed at McDougall and Jasper, Howard and Jasper, Queen's and Jasper, and Fraser and jasper-the four points of vantage. Their arrival was not a moment too soon, a crowd of khakied men already having assumed a threatening attitude. They formed, of course, but a small proportion of the total number of soldiers in the city, but their number was sufficiently large to provide considerable excitement for the time being. The pickets remained on duty for some hours after the occurrence, and with aid of a squad of city police, both on foot and mounted, under Inspector Shute, barred the progress of all soldiers along Jasper, from McDougall to Fraser.
Lieut.-Colonel G. B. McLeod, shortly after eight o'clock, arranged for the manager of the Bulletin to address the soldiers who were con-

gregated at Queen's avenue. The manager, in addressing the men, explained that the article to which exception was taken had no reference to the soldiers, which explanation was perfectly satisfactory. The soldiers then dispersed with cheers for the colonel. Colonel McLeod .also addressed the men earlier in the evening explaining that the article was not intended to refer to them.
A number of arrests were made while the excitement was at its height, the persons in question being taken to the city police station.
Part of my reason for bringing this matter to the attention of the minister and the House is to let the facts be known as they really were; and, further, to draw attention to the fact that the instigation of trouble came from outside the military, and not inside. We have some strenuous politics in the city of Edmonton at times, and I do not think there is any doubt that the misinterpretation placed upon the article in question was the deliberate act of some active and measurably clever politicians. I do not wish my hon. friends opposite to think I am associating them with these politicians at all;
I am merely pointing out that in my opinion the trouble arose out of a deliberate attempt on the part of a certain set of men in the city of Edmonton, who are not soldiers, to turn to their own advantage the excitement that grew out of the occurrences in Calgary. At a time such as this, when the country is subject to excitement, there is always an, opportunity for evilly-disposed persons who are not soldiers to arouse antagonism for the purpose of achieving some advantage or revenge for themselves. I think that that is a feature of the case which is absolutely proved by the occurrences in Edmonton, and one which may be found * to be connected with occurrences of perhaps a more serious kind in other places.


Samuel Hughes: I had not the detailed information which the hon. member for Edmonton (Mr. Oliver) has given to the House, but I knew that this was nothing more than one of those little scares that occur from time to time in different parts of the country, the public piind being more or less excited. The policy for all wise men such as my hon. friend and others of us to pursue is to keep our heads level.
If he will permit me to say so, I do not know that I would have gone quite as far as my hon. friend in attributing this scare to certain persons, whether in or out of the militia. Any one knowing my hon. friend to be the proprietor and .moving spirit and genius behind the Edmonton

Bulletin, would realize that a great family journal like that could not by any possibility be induced to say anything offensive to the boys out to do their duty for King and country; especially when it is known, not only in that locality but elsewhere, that nearly all the sons and relatives of the hon. member for Edmonton are out doing their duty under the colours to-day.


Frank Oliver: I should just like to draw the attention of the House to the promptitude and energy with which the officers of these battalions handled the situation. Their action certainly left nothing to be desired.



QUESTION OF PRIVILEGE.

[Stage Direction]
On the Orders of the Day:
Mr. TURRIFF:: I should like to read a
short paragraph from the Ottawa Free Press of last night:
Pay of Soldiers in Civil Service.
In reply to Mr. J. G. Turriff, who asserted that the Government should put an end to the practice of paying civil servants who are on active service their salaries, Hon. Dr. Roche, Minister of the Interior, in the House of Commons, yesterday afternoon stated that the Government felt it would be a breach of faith if it cancelled the pay of men who enlisted early in the war on the understanding- that their salaries were to be paid.
I did not make any such remarks at all. What I said was this, as will be seen by Hansard:
Mr. Turriff: On what grounds does the Government justify paying a man who enlists on the last day of October both his civil and military pay, and a man who enlists on the 1st of November only his military pay, and the difference between that and his civil pay? If that practice is followed there will be no harmony in the departments of the Government nor in the trenches. I am not speaking particularly against either system, although I think the latter system is the best; but I say that all the men should he treated alike; put them all under one system or under the other. I do not think the present system is fair.
I just wished to correct the impression given by the Free Press last night. I did not request in any shape or form that civil servants who volunteer should not be paid their'civil salaries, but suggested that they should all be put on the same basis.



THE PARLIAMENT BUILDINGS FIRE.


Hon. ROBERT ROGERS (Minister of Public Works):: I received this morning
the report of the architects who have been making an examination of the Parliament

Buildings and, with the consent of the House, I will read it, as it is very short:
The Honourable Robert Rogers,
Minister of Public Works,
Ottawa.
Re Parliament Buildings.
Dear Sir,-We have made a careful examination of the main building that was recently damaged by fire, and beg to report as follows:
The major portion of the buildings at present Teft. standing, more particularly as regards the internal and external walls, have suffered no material damage.
The west wing, which was recently built on modern fireproof methods, is uninjured by fire and but slightly damaged by water.
From this point-viz., the west wing-travelling south to the southwest tower, thence east along the south front to the Southeast tower, thence north to the northeast tower, thence west to the east wall, thence north to the north tower -all these walls which comprise the perimeter of the building are practically intact and uninjured ; it will be only necessary to make repairs to a number of windows on the south front, where the flames have injured the Ohio sandstone trimmings.
Starting at the same point before mentioned -viz., the west wing-and travelling in the same direction : all rooms fronting on these elevations^ have been more or less swept by fire and burned out; the brick masonry in the internal longitudinal and cross walls, also the maftonry in the external walls inclosing these rooms has suffered little damage-the stability of these \Valls has not been impaired.
The character of this masonry, both in material and workmanship, is first class. The external walls are faced with Nepean random rock-faced quarries, with Ohio stone trimmings to window openings ; the walls are backed with rubble, and faced on the inside with brick carefully built and properly bonded into the rubble masonry. It is this facing of brick that has preserved the limestone rubble against damage by fire.
The floors throughout the building are constructed with 7-inch iron I-beam joists spaced eighteen inches on centres, filled in solid with lime mortar concrete, the soffits of the beams exposed.
That the walls have suffered so little damage from the fire, is due to the nature of this construction, which might be termed " semi-fireproof." The floors have not burned through; they have remained in position, and very materially stiffened the building and retarded the fire. But it will be necessary to take out the floors, remove the iron beams and replace with steel beams and fireproof material.
The walls of the main tower are backed up solid with limestone rubble, exposed on the internal face. The fire has done considerable damage to this limestone backing and to the Ohio sandstone around the window openings. It will be necessary to tajte down the spandrel walls between the four corner piers to the level of the sill of the large windows and rebuild.
The area in the heart of the building formerly occupied by the Commons Chamber and the Senate Chamber, from the north wall of the main corridor, " with the exception of the basement and foundation walls," is a total loss.
The building as it stands to-day represents an asset in labour and material in position, of
fully $2,000,000, that can be re-used. The external walls require but few repairs, and when these are made all evidence of fire will be obliterated.
If more accommodation is required in the Commons Chamber and the Senate Chamber, these rooms could be placed on the east and west sides Of the main building carried out in the same style of architecture, and the space * they formerly occupied could be utilized in providing increased office accommodation and stack room for the library.
The Library building is a most dangerous ' fire hazard. The floor, shelving, and roof should be replaced with fireproof material.
Respectfully submitted,
(Sgd.) John A. Pearson. (Sgd.) J. O. Marchand.
Ottawa, February 17, 1916.



CANADIAN SOLDIERS IN ACTION.

[Stage Direction]
On the Orders of the Day:
Mr. MACDONALD:: May I ask the
Minister of Militia whether there is any truth in the rumour which has been circulated to the effect that our Canadian troops have been in an engagement along the line near Ypres, and if so, what information he has on the subject?


Samuel Hughes: We have no official information other than that an attack was made by the enemy on the British and Canadian lines from a point southeast of Ypres for a number of miles. The bombardment was very heavy, lasting for two days and part of the third day. Our troops do not seem to have suffered nearly as much as might have been expected. The first day five or six were killed, and the next day only one; there were fifteen or sixteen wounded. The Germans, following the bombardment, got into our trenches at many points, and my information is that those Germans are still there, but dead.


Edward Mortimer Macdonald: It is reported that the Germans still hold some of our trenches.


Samuel Hughes: I have no information to that effect. Not a solitary foot of our trenches is in the hands of the enemy,



THE BUDGET.

[Stage Direction]
Consideration of the proposed motion of Sir Thomas White (Minister of Finance) for Committee of Ways and Means, resumed from Tuesday, February 15.
Mr. A. K. MACLEAN (Halifax):: Mr,
Speaker, never perhaps in the history of Canada was a Budget speech looked forward to with such interest as that which the Minister of Finance delivered in this House on Tuesday last. Our financial posi-

tion presently and prospectively is one of gravity and naturally it demands a most serious and thoughtful attention on the part of the Government and of the people. It also intimately involves the immediate and prospective welfare of our people and our country. My remarks shall be of a general rather than of a detailed character, although I hope to deal with some matters of detail for the purpose of amplifying and reenforcing certain general propositions.
The Budget speech of the Minister of Finance was characterized by lucidity and brevity, upon which I heartily congratulate him, although I fear I cannot hope to imitate him.
At the beginning I wish to say a few words in respect to our balance of trade, which has been a favourable one this year, not because it needs be an indication of unusually healthy trade conditions, but for its value in the settlement of international balances and in the stabilization of the exchange rates, which we have learned are so vital to our trade. For these reasons, the relations of imports to exports during the present year is, in the circumstances, gratifying. It must be remembered, however, that imports and exports are not solely determined by customs returns. For the nine months ending December 31 last, our imports, free and dutiable^ amounted to $348,746,000, while our exports amounted to $511,334,000, showing thus far a favourable trade balance of over $160,000,000, and at the end of the fiscal year it will be over $200,000,000. When we borrow money we export securities, which is just the same as'the export of wheat except that payment in the former case is deferred. The annual interest is an import exactly in the same sense that cotton is an import. The total of annual interest payable on Canadian securities to Great Britain amounts probably to $150,000,000, and to the United States $40,000,000, both of which must be calculated as annual imports. In addition to this we pay to foreign countries for services of one kind or another, such as brokerage, shipping and insurance, a very considerable sum. Keeping these matters in view, we must not conclude that we have become a creditor nation by reason merely of an excess in exports over imports in merchandise during the present fiscal year.
Neither should we be led astray in our calculations of the future by the trade figures and trade balances of this year. We had an abundant harvest. The trade activities of the United States were reflected

here, and the export of war supplies reached unexpected levels, all of which largely accounted for the volume of our exports and imports. It is generally conceded that our exportable crops for the present calendar year cannot equal in proportions those . of last year and consequently our exports and imports will be affected, for we can only pay for imports with our exports or by borrowing abroad. Neither should we rely too much upon the continuance of war supply exports. The Prime Minister (Sir Robert Borden) was quite frank last week in expressing his opinion about the duration of the war, and many are the evidences that it may continue even longer than he indicated. His statement, which I assume was not merely a personal opinion, was one of the most impressive and .pregnant ever made to the people of Canada. It is well known that the strength of Germany's position at present is in the fact that she is not an importer, and consequently does not export gold except in negligible quantities. This will enable her to continue the war much longer than if she were an importing country with international balances to settle. The economic strain upon Great Britain is tremendous, and nothing produces greater problems than the exchange question, because in the main she must pay for her abnormal imports by exports of goods or securities and not with gold, and she is constantly devising means of limiting imports. For instance last year very high import duties were placed upon certain commodities which might be classified as luxuries, or, at least, were not actual necessities. These tariff rates were not imposed for purposes of protection or revenue, but to diminish imports in order to stabilize, if possible, the sterling exchange, or in other words to reduce the spread between imports and exports. A proclamation was issued in Great Britain on Tuesday last prohibiting the import, after March 1, next, of paper, paper pulp, periodicals, tobacco, furniture, wood and stone. Only last week Sir Alfred Booth, chairman of the board of directors of the Cunard Steamship Company, publicly urged individual thrift by taxation. That is, he urged such an increase in taxation as would minimise consumption and importation. What does this indicate? It is a warning that Britain, so far as possible, must be self-contained and that her war and other necessities must be manufactured within herself, so far as possible. In the event of a protracted struggle this will, in some degree happen, and war orders in

"Canada will diminish as will our exports, unless possibly we are able to accept British securities in payment of the same, which is unlikely. If this adversely affects the United States we shall also share in the adversity. What then will be our position?
I need not say to honourable gentlemen it will be serious. Manufacturing for other allied nations is always susceptible to shocks, through the condition of the exchange rates which are liable at any moment to severe changes. In that event we cannot manufacture profitably unless we are able to accept payment in foreign securities and it is doubtful that this will be possible. I refer to these matters at this length to point out to the House that the present trade conditions are liable to rapid changes, and soon we may be confronted with a changed situation. I refer to it also in order to impress upon the Government and the country the necessity of rigid- national economy and the abandonment of many practices in our financial affairs in which we now engage, but to which I * shall later refer.
In respect to the domestic loan of $100,000,000, I have just a few words to say, all of which I very modestly submit. 1 think undoubtedly the Minister of Finance was justified in making the loan a domestic one, and all Canadians were proud of its success. Doubtless by this time a substantial portion of it has been purchased for United States account, and we have thus been relieved in part. The time was a favourable one for a domestic loan, on account of our magnificent crop and favourable trade balance, and another opportunity for a domestic loan equally as favourable may not soon appear again. The investing capacity of the Canadian public is limited; consequently there is a limit to Government domestic loans. Unless Canadians are impressed with the necessity of economy, and make investments in domestic loans from savings, our national financial position is not much improved by subscriptions to domestic loans. If subscriptions for domestic war loans come largely from our banks and financial institutions, directly or indirectly, no bene-" fit accrues to the country; although, oi course, the immediate credit required is obtained by the Government. Now, wealth cannot be created in this manner. All funds disbursed on account of war loan subscriptions by banks soon return to the banks, who have the securities as well; so that there is a tendency to inflation. Again, banking capital and reserves in
Canada play too big a part in our business affairs to be absorbed appreciably in war loans. The banks, in any event, can retain only such portion of the war loan as they actually desire, an.(l must dispose of the balance; so it is better in the first instance to have the loan placed .in the investor's hands. Too great a proportion of this loan was subscribed for by our banks, which seem' to have subscribed upon some uniform basis, giving their subscriptions the appearance of having been involuntary. True, the loan was a success from the Government standpoint, but not from the national standpoint. It was a success only because a large number of people accustomed to investing subscribed from business and patriotic motives, and because large financial institutions subscribed heavily. It was not a success in the more important sense, however, that subscriptions came from the small investor .and represented savings and permanent investment. The sale of high interest-bearing government securities afforded a great opportunity to cultivate the spirit of investment and economy among the people of small holdings; this class were not properly considered in connection with the loan. This was the first opportunity that ever came to Canada to encourage national thrift and investment among persons of small means; a splendid opportunity for an educative campaign was neglected. The prospectus issued was stereotyped and more intended for underwriters than investors.
I do not think the Minister of Finance made the proper preparations
4 p.m. for this loan. A campaign widespread and enthusiastic by various mediums should have been undertaken. The services of hundreds of Canadians might, on request, have been enlisted to carry on a campaign for the Government in connection with this loan. Canadians are not exemplars, perhaps, in private economics; but I think they are ready, for economic and patriotic reasons, to forego much in order to ensure the success of Canadian war loans. I think they would be quite responsive to a campaign for this purpose, and the economic effect upon the nation would be visible for years. It would be most disastrous, I say, to have a series of large loans mainly subscribed by banks and financial institutions directly or indirectly. This loan, while widely subscribed, was not in the real sense a popular loan, and no proper effect was made to make it such. We must borrow on our own market for other purposes. In 1915 Canada bor-

rowed on issued securities $340,000,000, of which $150,000,000 was supplied by Canada herself. Therefore, I say that in future some organized effort should be made well in advance to make subscriptions for government loans bearing high interest rates more popular and general, and, so far as possible, to haye them come from savings. There are other features of this loan that might profitably be discussed, but returns asked for in respect to it have not yet been brought down, and later in the session we shall probably return to a discussion of its terms.
I wish now to refer to the financial statement just presented by the Minister of Finance in respect to the present fiscal year. The minister's statement that there was a surplus of $45,000,000 of revenue over ordinary expenditure was presented, quite adroitly though not too frankly, and received by hon. gentlemen opposite as a great financial feat. But it must be noted that, including all domestic or civil expenditure, the surplus will be, roughly, but $5,000,000; and that, inclusive of war expenditures, the deficit will be about $125,000,000. It is further to be noted that this surplus was procured by taxation, not by economies in expenditures. The surplus of $45,000,000 is a delusion and a fallacy, and hon. gentlemen know it. They did not reduce ordinary expenditure; the revenue came from the people, not from the Government. The Minister of Finance did not, I think, take sufficient pains to make it clear that capital expenditures were made from borrowed capital, which would wipe out the surplus over ordinary expenditures. Having in mind the method of accounting employed by the Minister of Finance, let me ask this question: if a surplus of $45,000,000 over ordinary expenditure was gratifying, would not a surplus of $75,(300,000 or $80,000,000 have been even more gratifying? That would mean bringing the ordinary expenditure down to about $75,000,000, which it was in 1907-08. Is it not reasonable to say that this might easily have been done? There was an opportunity to produce such a surplus, because the gross^ revenue was the highest in the history of the country; but, unfortunately, our total ordinary expenditures practically reached the highest mark. The war has destroyed a great many systems and theories, and one, I think, which ought to become a thing'of the past is our system of national bookkeeping. The Minister of Finance presented us with three different sets of accounts, consolidated fund, capital expenditures, and war ex-
penditures; showing them all separately, one at a time. If they had been shown together, they would disclose an excess of total expenditure over revenue of $125,000,000. I think the people of Canada desire to know this, and not what happens to be the difference between revenue and what we call ordinary expenditure. They want the cards showing our financial position placed on the table face up, which I do not think was done by the Minister of Finance.
I submit that the proper system is to treat war expenditure in the budget statement as a current one, and on that basis we find that for the fiscal year ending March 31, next, we have a tremendous gap between income and outgo. We know such expenditures will be added largely to the debt, but, we had better look at it in the way I have indicated. There will then be no humbugging of the tax payer, and no political pyrotechnics in this House, or out, side.
The Minister of Finance has informed the House that he is gratified with the result of the taxation measures of last year. In this I partially, but not wholly, agree with him, particularly with reference to his additional tariff taxation. It is regrettable that we have such scanty information in respect to the effect of the tariff taxation imposed last year. We were informed by the Minister of Finance in his last Budget speech, that the Trade and Navigation returns would contain the result of the war tariff rates, but no such information is supplied, and consequently it is difficult to deal with the matter intelligently, although a return submitted to the House furnished some general information.
Let me deal with the tariff taxation first. Undoubtedly the war tariff tax produced considerable revenue, nearly twenty millions of dollars up to January last; and, particularly, I would say the 74 per cent tariff on articles formerly free produced considerable revenue, probably three-fourths of the total. The effect of the surtax of 74 per cent upon the general tariff rates did not prove, I believe, a gain to revenue, and it undoubtedly restricted trade. Again, on account of the high prices ruling in respect to almost all commodities, the increased tariff rates added much to the cost and value of importations. There were very considerable importations into Canada of raw materials entering into the manufac- ' ture of war materials, and the additional tariff increased materially the prices. It

added to [DOT] the cost of war supplies which we purchased ourselves, and to the amount which we must also pay to the British Government as our proportion. So while we received some additional revenue by reason of the war tariff taxation, yet it was paid out again, and more perhaps, in addition to co_st of war supplies, and consequently we are little better off. In this respect the statistics do not disclose the full facts, and it is difficult to estimate the net results of much of the tariff taxation imposed last year. Again there were drawbacks, upon exported war materials which will probably amount to six or seven million dollars for the year, so therefore I say that at, least the extra 74 per cent added to the general tariff yielded practically no revenue, and was an impediment to trade. We took the position, last year, that the indiscriminate application of 74 per cent to free and dutiable goods was inadvisable and indefensible, and we still say so. It was not based on any sound business principle. It imposed unnecessary burdens upon trade, and was not a success in producing revenue in proportion to the burdens imposed; in fact, but for the tariff on free goods, little increase of revenue, if any, would have resulted. A considered and discriminating tariff measure for revenue' purposes was possible, but this was not of that character. In framing that extra tariff taxation, the Minister of Finance took the easy course, not the businesslike one.
Last year when the minister imposed the new tariff rates, he expressed, amidst the acclaim of his friends, the belief that it would be efficacious in stimulating Canadian industry and agriculture, and in relieving unemployment. This sounded then to me more like the idle prophecy of the politician than the remarks of a capable financial administrator. We have not heard of that prophecy this year. After the passing of almost a year, I am sure honourable gentlemen opposite will agree with me that this prediction was idle, as was expected, and that any stimulation that came to Canadian industry, or any relief that came to unemployment, was not the result of the tariff taxation measure of last year, but one of the incidents of a worldwide calamity; and further, that any stimulation that came to Canadian agriculture was due to the efforts of men and the blessings of God, and not to the tariff of the Minister of Finance.
Now, I wish to refer with some particularity to our financial position, and in order that the House may apprehend the actual facts, let me present, in concrete form, the result of financial operations for this and last year, and the probable results of the next fiscal year.
Fiscal year 1915.
Revenue	5133,073,381 73
Ordinary expenditure	$135,523,206 54
Capital and special expenditure	 41,447,320 03	'
War expenditure 60,750,476 01
_____________-	237,721,002	58
Total deficit	$104,647,520 85
There are other miscellaneous expenditures and receipts which add to and subtract from this total deficit, but I shall not give the details. The Public Accounts for 1915 show that the net addition to the public debt for the year ending 1915 was $113,379,233.07.
Fiscal year 1916.
For the fiscal	year	ending	March	31,
1916, the position of affairs has been presented by the Minister of Finance about as follows:
Revenue	$170,000,000
Ordinary expenditure. $125,000,000 Capital and special
expenditure	 40,000,000
War expenditure..	. .	130,000,000

 295,000,000
Total	deficit	$125,000,000
There will probably be, therefore, an addition to the debt of $125,000,000 and more for the year ending March 31, 1916.
Fiscal year 1916-17.
For the fiscal year ending March 31, 1917, the following are the Estimates of the Minister of Finance, whatever be the actual results:
Revenue estimated	$170,000,000
Ordinary expenditure.. .$135,000,000 Capital exjjenditure .-..	30,000,000
War expenditure ..	.. 250,000,000

 415,000,000
Estimated deficit	[DOT] .$245,000,000
Upon these Estimates there will be, for the next fiscal year, an addition to the net debt of about $250,000,000. I venture to predict the result, however, that the addition to the debt will be much larger.
Now, such, in concrete form, are the probable results for the fiscal years 1915, 1916, and 1917-an addition to the public debt of about $485,000,000 in three fiscal years; a total debt at the end of 1916-17 of

at least $825,000,000-I am sure I am well below the mark-and an increase in interest charges upon the debt from $12,893,000, in 1914, to the estimated amount of $39,649,000 in 1916-17. The interest charge, if expended next year, will be about 40 per cent of our total revenue from customs and excise in 1915, which debt interest charge is about equal to our total receipts from customs and excise taxes in the year 1900. The end of the fiscal year 1916-17 will not probably see the end of the war; we will have a debt of a billion of dollars or more, and following the end of the war there perhaps comes the period of reconstruction in Canada and the whole world, and a probable period of depression. Now that is the financial outlook presently and prospectively. Whether we like it or not, such are the facts. Lest I be misunderstood, let me say the increase in our debt is largely chargeable to the war.
Now, what was the true financial policy for the Government during the past two years in view of the war and the commercial conditions immediately preceding the war? What is the true policy for the future? I say it was and is rigid economy in civil expenditures, the elimination of unnecessary capital expenditures, the elimination of wastes in war expenditures, and the utmost of proper and wise taxation to lessen the addition to the public debt. This policy has not been followed, and there is nothing to indicate an intention to follow it during the next fiscal year; but I shall refer to this later.
This is, perhaps, the most convenient place for me to make reference to the Estimates for the coming fiscal year, which are open to grave censure, and are outiof harmony with public opinion. The Estimates of ordinary expenditure for the coming year amount to $158,958,000, the largest in our history. There is an increase of $16,000,000 for interest upon the public debt, and there are miscellaneous increases and reductions in the various services, leaving a net estimated increase for ordinary expenditure of over $8,250,000 more than for the present year. The Estimates are objectionable in that they do not show sufficient reduction. The Government reply that much of the money voted is but revotes, and will not be spent. My reply is that votes representing expenditures which are not to be made have no place in the Budget system. Further, the Minister of Finance estimates ordinary expenditures bf $135,000,000 for next year, which, I say,
[Mr. A. K. Maclean.!
are excessive. Further, the Government have no right to ask Parliament to vote money which they say they will not likely expend.
No other spending body is permitted to' do /this. If the budget system has- any virtues, estimates should only contain/ actual necessities and should represent actual intentions. It encourages departmental extravagances and wasteful expenditure, it is an encouragement to the evils of patronage, it prolongs the hope for unprofitable expenditures in the minds of many people and localities, and postpones-the day when we should and must revise our policy upon public expenditures.
Many leaders of public opinion are requesting economies on the part of the people. Should not the Government show capacity for leadership? Would it not very materially help our credit to show substan-tiai surpluses over all civil expenditures?' When the Minister of Finance made his-loan of $45,000,000 in New York last July,. I understand that Mir. J..P. Morgan & Company sent their representatives here to investigate the revenues and expenditures of the country. ' Street rumour has it that they were astounded at the vast sums of' money expended in this country for unproductive purposes. The Minister of Finance will some day soon be seeking another substantial loan in the United States. Does he think our estimates for next year would strengtheif our credit in the judgment of possible lenders? Would the estimates of expenditure on ordinary account tend to elevate the opinion of foreign lenders in our spending wisdom particularly after a perusal of the items referable to public buildings and harbours and rivers? Should not national credit, /always based, on revenue, .be properly cared for and nursed? Would the defence avail that many items would not be expended? I submit that the estimates in the present form are indefensible, and Parliament should not be asked to vote them. Why should we be asked to vote supply in the sum of $158,000,000 for next year greater by $8,000,000 than last year when admittedly it is not needed?' Only ten years ago our ordinary expenditure was $67,000,000. Why not revert to something like that basis-of expenditure again for a few years? If we did so our estimates could be below or around $100,000,000 instead of $158,000,000, after making ample provision, for an increase of $28,000,000 in the interest, and pension accounts since that date.

For another reason I should like to see business and conscience introduced into our Estimate of expenditure. It is too true that in Canada large sums of money are spent by government which are not only unproductive in the material sense, but which in the moral sense are demoralising. It is the genesis of patronage and electoral corruption. Cobden once truly remarked that public economy is public virtue. I am not now engaging in the unprofitable task of accusing the present Administration of being more guilty than others. But when and where is it going to end? Is this not the time in our history when reforms should appear, and should not we who are here to-day as the people's representatives avail ourselves of this opportunity to do real service to the state, now and hereafter? I think all reflecting men have thought more of this during the past few months than ever before in their lives. Surely the fact that many of our citizens are sacrificing their lives for the nation and for principle should prompt us to adopt higher principles in public expenditures, to deal more justly with the taxes of the public, and save democracy from the corrupting influences flowing from improperly expended public moneys. Should not members of Parliament be leaders in the movement? Honourable gentlemen opposite will retort that it is easier for one in opposition to the Government to speak in this manner. I think that is quite true. 1 want to be frank. I must say that I never before realized the force of political patronage as I have since the beginning of the war. I do not say patronage enters into everything, nor do I mean to say that many men supporting the Government are not fighting against it. I mean only to say that as a fact it exists, and in disgusting proportions. I have seen the evil of political patronage in recent months in little and in large transactions. I know of some ministers who have resisted the pressure made upon them by their friends for improper expenditures, and I know of other ministers who have succumbed to these attacks. And I ask again, when is it going to end? Why not now? Is not this the time to commence? I think so, and believe that a large section of the public would rally to the support of any such reform. The revotes in this year's Estimates, however, is but a token of the continuance of past practices, and for this reason I say the Government is open to grave censure. Is there a better way, after all, to stay improper expenditure than to stop the sources of its origin? The Estimates of the Canadian Parliament is the book to read and to revise if we want to bring about reform in public expenditure, the reduction of patronage evils, and generally political and commercial corruption; for political life is not alone in need of regeneration in Canada. I need not, I hope, apologize for this diversion, for, after all, it strictly pertains to the budget, and the welfare of the country.
I must return to a discussion of the expenditure, and I should like to illustrate the position I have already taken in respect to expenditures by reference to the administration of a few of the public services.
I shall first refer to the administration of the Post Office Department, which in the past two or three years presents a most discreditable record. The decline in Sound administration in this department commenced when Hon Louis Phillippe Pelletier became Postmaster General. He took general conduct of the department away from his officials, and handed it over to patronage brokers all the way from the Atlantic to the Pacific, and his ears were always ready to heed their requests. The Post Office Department, for many years, had an honourable administrative career, but this has been deliberately destroyed, and an era of chaos established. The present Postmaster General apparently entertains his official duties but lightly, and has made no effort to restore sound business principles to the administration of his department. Since 1867 the revenue from the post office has yearly grown, and the expenditures, of course, as well. Since 1902 down to last year the department has always had a yearly surplus of about $700,000. In 1914 the surplus had fallen to the ominous .sum of $134,000. For the fiscal year ending March 31, 1915, we were made acquainted with a deficit of $2,914,541.90, being almost four hundred per cent greater than the greatest deficit known to the department since 1867.
It is difficult to estimate the probable deficit of the department for the fiscal year ending March 31 next, because it is difficult to allocate the total revenues coming to the Post Office Department from its own earnings and that of the war stamp tax^s. I estimate that a strict accounting would show a deficit for the present fiscal year of $5,000,000, and perhaps more. It will be difficult, perhaps, to estimate with accuracy the exact postal revenue for this

year. From the postage on letters thirty-three and a third per cent belongs to war revenue; one-half of the revenue from postal cards and drop letters does not belong to the Post Office Department. The revenue coming from the use of stamps upon cheques, notes, money orders, postal notes, patent medicine packages, perfumery, and wines-and the amount in the hands of the Post Office Department is large-was dedicated to war and not to departmental incompetency and inefficiency.
In the fiscal year 1915 the expenditures were nearly three million dollars greater than revenue, without apparently any visible reason. The revenue had not fallen below that of 1914. There had been no notable increase in the services of the department; in fact, there were many declines. The increase in the expenditure was not due to the war, because the special services of the department in this respect were liquidated by capital account. It was due to the effect that the department has been sold to party patronage. Since honourable gentlemen have been placed on the treasury benches, mail contracts have been violated and transferred at higher cost to political friends; the system of tender and contract has been largely abandoned, and the administration of the department has become a public scandal, and it is a fitting subject for investigation by the Public Accounts Committee or by a Royal Commission. I quite understand why the Minister of Finance asked the public to lick an extra stamp during the past ten months, and I said so last year. He did not trust the Post Office Department and thought he could earmark war-tax stamps. But he failed. The Post Office Department kept the revenue, and it thought it was rich and grew extravagant and wasted the revenue from the stamp taxes of the Minister of Finance. That department will owe the Receiver General at least $5,000,000 at the end of March, but it will not be paid over.
Just a passing review of the administration of the Dominion lands, which branch of the Interior Department has been the victim of reckless partisan administration. In the last fiscal year we had a deficit of over $800,000 in this branch of the public service, and it was only the second deficit since 1885. Now, this condition of affairs was not due to unusual burdens thrust upon the Department of the Interior. The homestead entries made in 1915 were but 24,088 as against 33,699 in 1913, the acreage homesteaded in 1913 being 5,391,840 acres, as against 3,854,00 acres in 1915. This depart-

ment of the public service has a declining business and it should have a declining expenditure. Still, we are asked to vote the large sum of $3,304,000 for next year. I submit that vote should be less by more than one million dollars. Not to reduce it is but paying tribute to departmental waste, and putting temptation in the way of a department already possessing a highly overloaded service. I protest against such a system of budget making.
Now, let me refer to immigration expenditures. The estimated expenditure for 1916-17 is $1,574,000, and the estimates erroneously state that this amount is $1,576,000 less than the amount voted for the current fiscal year. This is certainly an error, .for the amount voted last year was $1,875,000, so that the decrease this year is not $1,576,000 less, but only $300,00Q less. In 1911-12, we had an immigration of 354,257 with-an expenditure of $1,364,993.93. Our expenditures for the current year will be well up to the expenditures of 1911-12, with an immigration of but 48,446 for the calendar year 1915, which, doubtless,	will	be	about
the immigration	figures for the
fiscal year 1915-16. Now, for next year we are asked to vote $1,574,000, with practically little immigration in sight, and at least not greater than last year. This is about the same amount as we spent in 1912-13, when we had an immigration of over 300,000, but I have not the exact figures.
I must now refer to the spending record of the Department of Public Works. Permit me to give the House the expenditures on current account of this department for the past few years, as they will be more impressive than I can be in pointing out how defenceless has been the spending record of this department during the past few years, and in a period of falling revenues and war. The figures are as follows:
1910- 11	$ 8.621,431 25
1911-	12	
10,344,487	211912-	13	
13,468,505	201913-	14	
19,007,512	631914-	15	
19,343,532	35Estimated,	1915-16	
16,000,000	00To be voted, 1916-17	
18,685,366	50
Of all the departments of the public service this is the one which should show retrenchment, and let it be remembered that I am not referring to Public Works expenditure on capital account. I would most humbly suggest that the Estimates for Public Works for next year be reduced by twelve million dollars at least, and, after all, that'is but the amount voted for

public buildings, harbours and rivers. More Public Works and other members of the can be done. That reduction would bring Government saw democracy on bended the Estimates down to the expenditures knee pleading for its inherent right of expressing itself at the polls, and proceeded to have the voters' lists printed, and pracmade by the same department in 1904-05, namely $6,765,000. Is that not a fair proposition?
Who on the other side will say nay to that? Surely it is fair when we reflect upon comparative conditions say in 1904 and 1916. The Minister of Finance says that much of the total sum voted will not be expended. My reply is that he has, apparently, no control over the Minister of Public Works or any other minister with respect to expenditure. The Minister of Finance should inform other ministers what he can permit them to spend each year. The reverse is the practice. That is part of the duties of the Minister of Finance. He is not merely a tax collector. In fact, national finance has more to do with expenditure than with revenue. It is not difficult to obtain revenue if need be, because the people must obey the revenue laws, but it is a task of formidable dimensions to guide and control public expenditures. Then, if we turn to the Minister of Public Works and say that he should not have asked for a vote of $18,865,366 in 1916-17, his answer is, " Trust me, I shall not expend it all." My reply is, he cannot be trusted, his record is against him. His picture hangs in the gallery of administrative prodigals in Manitoba and in Ottawa. Really we do not want the temptation to unnecessarily expend placed before him, lest he fall. He is spending this year about $16,000,000 on ordinary account, whereas, say in 1910-11, only $8,600,000 was expended. Is there any real defence for that after all?
One might go through all the departments of the public service, and in none would you find evidence that the Government is impressed with the seriousness of our position. For instance, witness the -large amounts disbursed last year for advertising and printing, to the press which support the Ministry. There you find the same tribute being levied by the party press as in times of peace and plenty. Most of it is unnecessary and useless. After the close of the last parliamentary session the. Government very hurriedly spent a large sum in printing voters' lists, chiefly in the Maritime Provinces. This was about the time the Prime Minister commenced to gather extracts from Liberal newspapers to prove that public opinion favoured an extension of the parliamentary term. At the same time the Minister of 57
tically announced a dissolution of Parliament. We thus paid many thousands of dollars to enable the Government to learn what was public opinion in respect to a dissolution of Parliament. I must admit 'that the method of the Prime Minister was cheaper to the country, although I think neither Liberal newspaper utterances nor voters' lists compelled them to withdraw from the decision that had been reached to dissolve Parliament.
I observe by the public accounts that during the last fiscal year expenditures were made on war account by departments other than the Militia Department aggregating over seven million dollars about which some explanation was needed. They are as follows:
Trade and Commerce	$3,003,005	06Naval Service	
3,036,125	35
Governor General Secretary's
Office	%	4,330 93Privy Council	
13,637	91Secretary of State	
16,192	63
Secretary of State for External
Affairs	
4,214	14Justice Department	
254,945	85Post Office Department	
149,630	09Dominion Police	
132,763	89Indian Affairs	
81	72Royal Northwest Mounted Police. 397,126	44Railways and Canals	78,845	20Public Works	
12,865	45
One might have expected that the Government would not load the war account with all expenditure indirectly due to the war. Surely those items outside of the Militia Department should have been liquidated out of current revenue. But no, it would have spoiled the story about the surplus. Was it too much to expect curtailment in ordinary expenditure sufficient to meet these amounts? If there was an indirect war expenditure of $81.72 made by the Indian Department-and the dear knows what it can be for-surely free and proud Canadians will not be pleased to learn that this amount was borrowed from the British Government with its present tremendous financial obligations and particularly when they know beyond doubt that, millions were absolutely wasted that year in Canada in war purchases. The Privy Council charged to war account $13,637.91, and the same Privy Council ordered the expenditure of more than the same amount for unnecessarily printing voters' lists and 'Soldiers' ballots just for the purpose of finding out



what public opinion was in respect to an election. I suppose the war account is similarly loaded this year with items which ought properly to be charged to current account, and which, under proper accounting, would absolutely destroy the imaginary surpluses of the Minister of Finance.
I cannot now occupy the time of the House in discussing war expenditures. In the Parliaments of the Allied nations war expenditures are most candidly discussed and criticised. They consider this a patriotic duty. But in Canada some rather stigmatise the same procedure, and in the name of a cowardly patriotism endeavour to stay the hand of the inquirer. We are prepared to be generous towards the Government in our view of much of the war expenditure. I do not accept all the rumours I hear of the improper administration of war affairs. Patronage should have no place whatever in these expenditures. But it has, and we all have had evidence of it. Long ago there should have been created such efficient spending organizations that exorbitant prices and exorbitant profits would be made impossible. A greater trust even attaches to these (expenditures than to ordinary expenditures. Parliament has given to the Government-not to any one minister of the Crown, but to the Government-an unqualified and,large vote of money for war purposes, and we naturally expect that the confidence so fully extended to the Government by Parliament shall be rigidly respected.
I wish to say just a word about capital expenditure. I realize that many contracts were entered into prior to the war, and that work in connection therewith had already commenced; in such cases possibly it would be difficult to make any great curtailment of expenditure. Parliament will judge gen

erously upon matters of that kind. But it seems to me some reduction and postponements might reasonably be expected in some cases at least. Public opinion is,. I believe, to-day strongly against the Hudson Bay railway undertaking. That work is not under contract; it is being performed by the Government, and I do not think that any national interest would suffer by its suspension. It is hardly a matter about which there need be any party differences, because as a matter of policy the project had the . sanction of both political parties.
The Government preach public economy, but do not practise jt; they preach private economy, but do not encourage it. The country looks to the Government for

leadership in economies during the crisis through which we are passing. In the British Parliament, Committees of the Commons and Lords have been appointed to study. means of promoting national economy, and of restricting civil .and military expenditures. In these days ' the Government of this country might well ask Parliament, through a committee, to assist in making up the Estimates for the ensuing year. A special committee, or perhaps the Public Accounts Committee, might well have been assigned this duty. I am sure that the members of any committee entrusted with this work, animated by patriotic motives and proceeding regardless of party affiliations, would have blazed the trail for retrenchment and for the establishment of a standard in public expenditure that should guide us in the future.
Having said this much in connection with expenditure, it may be well that I should touch for a moment on the question as to what is the proper course to pursue in respect to our financial position, having in view the great gap which exists between revenue and expenditure. After all, there is not much difference between the position taken by the Minister of Finance and that taken by hon. gentlemen on this side of the House: we agree that we should make some payment upon the principal sum expended for war purposes. That being the case, any difference of opinion will be merely a matter of degree. But unless the Minister of Finance changes the policy pursued by his colleagues, he will not, as he has not in the past, make any payment on account of the principal sum expended for war purposes. We owe it to the cause for which we fight, and we owe it to posterity, that we pay something on this account. When the war is over and we start again on our career of national development, we shall wish not to be prejudiced in the eyes of intending immigrants or of foreign capital [DOT]	- by a large national debt which
5 p.m. we have not sought to reduce.
How are we to decrease the gap between income and expenditure? First, let us conserve our present revenues by practising national economy. Unless this be done, newly imposed taxes will be objected to by the people. Further, we should obtain more revenue by taxation for application to war expenditures. This is the time for individual sacrifice and selfdenial on the part of all Canadians, and I believe that loyal Canadians will readily

respond to the demand for a substantia] payment on account of war expenditures.
This brings me to a brief consideration 6f the taxation proposals that the Minister of Finance submitted on Tuesday last. A proper discussion of these proposals involves a considerable amount of investigation and thought, which I at least have not been able to give to the matter since the proposals were brought down. I propose, therefore, referring to them only in a general way, anticipating that in Committee of Ways and Means we shall have an opportunity of discussing them in detail.
In respect to the proposed duties upon apples and certain kinds of oil, I have the general observation to make that if this proposed taxation is made for political effect, or for purposes of protection rather than of revenue, it is objectionable. The Minister of Finance said the other day that it was absolutely necessary for the apple industry of Canada that the additional duty should be imposed. In my judgment, in no province of Canada outside of British Columbia are the apple growers interested in this increased duty. To say that the proposed increase would be of any value to the apple producers of the province of Nova Scotia, for instance, is to state a manifest absurdity. I do not believe that the imposition of this duty will be of any -advantage to the apple industry of British Columbia. It will limit consumption; it will not provide a market for the surplus production-and this, I believe, is the great difficulty which the apple industry encountered during the past season. This additional tax upon apples must be borne by the three prairie provinces; it must have been designed to that' end. It must have been intended to limit the consumers of the three prairie provinces to one source of apple supply, namely, the province of British Columbia. Apparently the people of the prairie provinces receive very few, if any, favours or concessions from this Government in respect of tariffs or taxation. We expect the people of these provinces to increase production in order that we may pay for our imports, but we do little or nothing to encourage them to this patriotic end. Further, apples are a staple food; it is to be remembered that the staple foodstuffs of the country are to-day exceedingly high. I am not going to discuss the matter of tariffs, but I do submit that, having regard to the trade and revenue of this country, a limited readjustment of several items in the tariff, particularly 574
those affecting staple foodstuffs, might have been expected this year. We- are-apt to think that mo-st of the people? of this country are extremely prosperous. I want to point out that, owing to war prices, the struggle for existence on the part of many people in this country is extremely serious. In the case of such a prime necessity as potatoes, for instance, the price to-day is almost prohibitive, and in view of the limited production of potatoes last year I was very much disappointed that the Minister of Finance did not, last fall, invoke the power given to him and by Order in Council temporarily at least remove the duty upon this staple foodstuff.
I have not made any special inquiry as to the effect of the extra duty on oil. Ii it was- intended for protective and not for revenue purposes, I say it is objectionable. I am informed that it will apply chiefly to fuel used by locomotives and steamships. It appears to me that this is an inopportune time to add any additional taxation to transportation bodies. There is a rumor on the street that this tax was a concession to the coal interests of British Columbia. I trust that that is not the reason for it. We were given no reason by the Minister of Finance, and I think we are entitled to it; but I assume we will get it in committee. I think it would be quite interesting to know the reason for the imposition of a tax upon oil which is largely consumed by transportation organizations that are not in too favourable a position at present, and also by some farmers for power purposes.
I wish to refer briefly and generally to the taxation of profits on manufacturing and trading concerns. I admit that any system of taxation is unpopular and open to criticism from some source or another. In respect to the proposals of the Government to impose a tax upon business profits, I do not wish to be understood as saying that they are absolutely without merit. In my judgment, howeve,, they are in many respects fundamentally wrong; they contain many inequalities which will work great injustice, and, in my judgment, they will not be so effective in producing revenue as the Minister of Finance estimates. The great obejction to the taxation of profits, as proposed, is that it is a tax upon business, and not upon accumulated wealth, or upon the income proceeding from accumulated wealth. I say that the proposal to tax profits on business is, at the best, but a temporary expedient
900 '

[ think I can safely say that for .some years to .come, after the war ends, this country will have to resort for revenue to sources other than tariff, and we might as well, now as later, settle down to elaborate some comprehensive system of taxation which will afford this country the additional revenue required for its national needs, over iand a'bove that which we might naturally expect to accrue from tariff taxation.
In respect to the retroactive feature of the tax proposals, I would like to express a view, even if it be but a personal view, against the principle. I submit Mr. Speaker, that never, except in grave circumstances, and under grave necessities, should taxation proposals be retroactive. If, owing to lax administration by this Government, Canada or Great Britain was permitted to pay improper and unjust profits upon war supplies, it might be proper that we should seek restitution by the medium of taxation measures. That, however, is no defence of the principle of retroactive taxation, it is only a recognition of culpability on the part of the Government in the performance of their administrative duties. The Minister of Finance attempted the same thing in connection with his excise duties in 1914, and my recollection is that he absolutely failed to recover any substantial sum of revenue for removals from warehouses just prior to the imposition of the additional duties.
There is, further, this to say, Mr. Speaker, in connection with this feature of the proposed taxation, that it will not, after all, produce very much revenue. You will find that the large transportation companies, and the large industrial organizations, for many months, probably for twelve months at least, after war was declared, were not earning profits, or if they were, they were very small profits. Perhaps they were borrowing capital in order to carry on their businesses. The only business eonoernis conducted with any possible hope of profit were the smaller business concerns of the country, and the retroactive feature of the tax proposals will, I predict, fall upon the smaller concerns; and in such cases the profits were long ago disbursed. Whatever be our necessities for revenue, I submit that it will be a grave injustice to compel payment of disbursed profits by these small organizations to the treasury under such conditions.
Further, I submit that these taxation proposals will disclose many inequalities which will operate unjustly, and will not
[Mr A. K, Maclean.]
properly distribute the burden of taxation as intended by the principle of the Bill. The capitalization of many of our large industrial and trading concerns to-day does not represent actual investment in capital or of earnings, but these concerns will be entitled to a profit o'f 7 per cent upon all watered stock before they become liable to the provisions of the tax bill. In many cases the larger corporations are paying no dividend upon their common stock. This proposal is in effect a premium upon improper methods of industrial finance and industrial inefficiency. It is not calculated to encourage fair capitalization methods. To show how it will operate, let us take the railways. It is probably the ease that no railway company in Canada, outside of the Canadian Pacific Railway Company, will be called upon to pay one dollar of taxes-I am not speaking of street railways -although it may be possible that by reason of the war the Canadian Northern, or the Grand Trunk may have earned very much more than did the Canadian Pacific railway from traffic directly traceable to the war. In the city of Ottawa there is a corporation, the E. B. Eddy Company, and I am told that they have a capitalization of $300,000 or $400,000. Their assets are enormous and their earning capacity very considerable. In that case the amount of taxation for which this company would be liable over the 7 per cent margin would necessarily be very great. Take the case of a corporation with a capitalization of $15,000,000, of which one-half, $7,500,000, represents the actual capital investment, the balance representing nothing but inflated capital; under the terms of the taxation proposal, $7,500,000 of this capital which did n<5t represent any investment would call for a dividend of over $500,000 upon a 7 per cent basis before anything came to the revenues. You will realise how unjust this wuuld appear to be when you consider how it would work out in the case of the E. B. Eddy Company, Limited.
Further, in this country, you will find many companies, partnerships, and private businesses, carried on where the capital investment may be small-below $50,000. It may happen that you will find one man in a community carrying on a line of business, who will be taxed because he has a capital investment of $50,000. In the same community he may have twelve competitors with a capital investment just slightly less, and they will escape taxation altogether. You may find one class of storekeeper liable

to taxation and many other of the same class will escape. You are bound to find so many inequalities of the character I have described that the proposals are open to very grave objections. We can well imagine the case of a man carrying on an industry with a capital investment of $50,000, the most of which will be in the form of buildings and land, he not requiring very much machinery, and in the same block you may have a man owning $1,000,000 of real estate, which represents a small original investment, the unearned increment being large, and still he is not taxed, whereas the man with the property worth $50,000 is taxed because it happens he is carrying on business of some kind.
War supplies and munitions as sources of revenue were - much discussed by the public long before the Minister of Finance brought down his taxation measure. Personally, I have not been very much impressed with the validity of the popular view justifying such taxation. It was always suggestive to me of the idea that we are deliberately permitting those who manufacture or supply war material to the Canadian and British Governments to take an unjust profit. I have always thought, and I now think, it would be wiser, from the standpoint of the Treasury, instead of depending upon the doubtful method of restitution by ordinary taxation schemes, not to permit these unjust profits to go to the manufacturer of war supplies. There may be very good reasons for allowing a manufacturer of war supplies more than an ordinary profit. We all can conceive of good reasons why he would be entitled to more than seven per cent profit. I say allow them, in the first instance a just profit; do not allow a profit which is unjust and unfair, and then take it back from them by taxation routes. What, is a fair profit should be easy to determine. When a manufacturer proceeds' to fill a specified and guaranteed order he should be able to determine production costs very much more accurately than a person who manufactures'for stock, and who must assume all the risks and responsibilities until that stock has been sold, marketed and paid for. It should be quite easy now to enter into contracts for the supply of war materials at prices which would be fair to the manufacturer and to Canada or the United Kingdom. Therefore, let us pay just prices for our war supplies, and let us not make a readjustment of prices by a system of taxation. In other words, good administration is much more profitable to
the treasury than any taxation -scheme the Minister of Finance can devise. -Another objection which I have to make against these taxation proposals is that they Will militate against foreign and domestic investment in railway and industrial enterprises in Canada. Perhaps I may be unduly alarmed about this, but I fear such a consequence, and if so it is a serious one. Last year, outside of Government and war loans, we borrowed for railway and industrial purposes $60,000,000, and I imagine that practically every cent of it came from the United States. Many industrial companies in Canada will borrow additional capital for many years to come. I fear that this tax upon industrial profits, for a time at least, will prevent the flow of capital from the United States. Is this the time to discourage the investment of capital for industrial purposes? Is it the time,to put a tax upon business profits? Our industrial enterprises in Canada will want further capital from abroad. Conditions are not to be found in Canada as they are in Great Britain, for instance, where most of the industrial institutions are old, have sufficient capital, and where a great majority of them have long established reserves. That is not the case in this country. There is this to be remembered too, that money invested in industrial enterprises naturally and properly looks for a greater return than seven per cent. There is too great a risk in industrial enterprises to satisfy capital with a return, of seven per cent. Business concerns retain out of profits only what they require for the purpose of capital and the proper conduct of their business; the greater portion of the earnings of all industrial companies is disbursed in the form of dividends. Business without the necessary capital is not a desirable thing in this or any other country. If the two premises I have stated are correct, the profits which any business makes are paid out, and could therefore be taxed under any general income tax scheme. Besides, such a scheme would be a more equitable and just manner of taxation, and would not involve the invidious discriminations that the present proposals will likely entail.
There is this further to be said against the proposals of the minister: they do not reach the great bulk of inherited and invested wealth. They do not reach, for instance, the vast aggregation of secured investments in industrial enterprises, or property of one kind or another. I do submit that it is hardly fair that the holders of invested

wealth should escape taxation, as they will under the proposals of the minister. Many other classes are exempted, which appears invidious, though I cannot detain the House now in discussing them.
It might fairly be asked whether the taxation proposals of the Finance Minister might not be modified so as to be mdre just and less discriminatory. I should like to read to the House what the Finance Minister said on Tuesday last in regard to the taxation of industrial companies:
Now, Mr. Speaker, there are in time of war many businesses and industries which for one reason or another are able to maintain profits above the average return to capital in time of
peace.
-that is, in times of war, the Minister of Finance remarks, it is the good fortune of many business concerns to be able to maintain profits above the average of peace times. If it were these profits which the minister sought to tax, he has failed to accomplish that end by the terms of the resolution which he submitted to the House. It is perfectly obvious that there are scores of companies in this country which, during the war, have been making profits much in excess of peace time profits, and under the proposals of the Minister of Finance these profits will not be taxed. It is hard to understand why, in my province, for instance, the Nova Scotia Steel Company should pay a tax upon its profits, and the Dominion Iron and Steel Company probably escape, although it might make very considerable profits also.
I could cite many probable instances of such unequalities. If the minister desired to secure a portion of the war-time profits which were above the average of the profits of peace time, there would be some equity in that, and I could understand it. That is the principle involved in a British Tax Bill introduced last year. There they tax a proportion of the profits made in war time which is above the average of peace time profits; and in order to procure the average peace time profits, they take a period of three years immediately preceding the war. I say it is unjust and discriminatory to tax the profits of a portion of the manufacturing and business concerns, and allow a great many others to escape taxation. The minister could easily prevent that by disregarding capitalization entirely, and taxing war time profits which are in excess of the average of peace time profits; there. is a good deal to be said in favour of that principle.
IMr. A. K. Maclean.]
There might, of course, be a great deal more said upon the taxation measures which the minister has submitted to the House, but they will doubtless be discussed by other hon. gentlemen of the House; and, furthermore, we shall have another opportunity of discussing them, and with greater satisfaction perhaps, in Committee of Ways and Means. It seems to me that, in view of the many weak principles which are obviously contained in the proposals of the Minister of Finance, in view of the many inequalities and discriminations, in view of the fact that hereafter in this country we shall for many years require more revenue than we can possibly secure from Customs and Excise, we might as well begin now and adopt a broad system of taxation based upon income, which would reach aill persons in equitable proportions and without any discriminations. By such a method, we should reach the very business concerns which the minister is attempting to reach by his proposals, but in a much better and more just manner. The minister will probably find that next year he will have to invoke some system of direct income taxation. He has always objected that it was a system of taxation already employed by provinces and municipalities, and was not now open for federal purposes. Theoretically, the income tax is in operation in some of the provinces; but theoretically only. In my own province we have the income tax; but, practically speaking, there is no income taxation. I am informed that the revenue from income taxation in British Columbia is quite substantial, but taxation is taxation no matter under what name it is imposed. I am unable to perceive that there is very much difference between paying a federal tax on income, and a tax in equal amount known by some other name. I do not think the reasons which the minister urged last year, and to which he briefly referred again this year, are sound objections against the immediate imposition of a federal income tax.
In conclusion, let me say that Canada is participating in this great European war with a zeal which I think is quite remarkable. For us, this is not a war of aggression, nor a war of self preservation erffen; it is a war for the preservation of human liberties and civilization; and it is because we are fighting for such high ideals that we are willing to contribute most

generously of our resources. But while we are seeking to accomplish these very commendable ends, we must not recklessly dissipate our resources and revenue in doubtful and dubious expenditure. We should place national expenditure on a sound and businesslike basis, and upon a level and up to a standard which heretofore it has never reached. We 'are engaged in a contest of great magnitude which will undoubtedly entail heavy burdens upon ourselves and posterity. I think that we ought now to bear our just proportion. With the war over and the battle won, our future depends much on our ability to provide the capital that is necessary to proceed with the development of a large and new country, which in all human probability will be receiving but a very limited immigration for many years. Our ability to do that will largely depend on the financial course which we pursue to-day. Now, does the Government's financial attitude of the last few years, particularly in respect to expenditures, indicate a full appreciation of present circumstances and a proper perspective of the future? In all frankness, I think the Government have not realized their responsibilities in that regard, and that, I believe, will be the judgment of the future, if there be any doubt about it to-day.
It has been my purpose during my remarks, which have occupied far more time than I had intended, to impress upon Parliament these two points, namely: the desirability of national economy, the proper conservation of the revenues of the country, so as to limit the taxatioh which must be imposed * upon the people, and at the same time the desirability of placing upon the people that volume of taxation which they can reasonably stand, in order that we may do our duty towards the cause for which we are fighting and towards posterity by paying a reasonable proportion of the war expenditures which are to-day being incurred and which are being added to the national debt of the country.


Hon.   S@: Mr. Speaker, I have listened with a great deal of interest to the moderate and somewhat careful review made by my hon. friend (Mr. A. K. Maclean) of the proposals which were submitted by the Minister of Finance on Tuesday last. In some things that he has stated, I agree with him; as regards others, I would express a mild dissent. There may even be
some points in reference to which I would be inclined to make a rather decided and emphatic protest, but that does not take away from my first remark that I have appreciated and been interested in his line of thought as expressed in his remarks on the Budget.
In the first place, and before going further, I think I may take it upon myself to say that, in so far as I can judge, the spirit with which the Canadian people have met the taxation proposals of last year and of this year is in eminent accord with the spirit in which they have supported enlistment with the colours, and the prosecution of the war. Taxation, whenever it comes, is apt to hit someone harder than another; it is a thing which most poeple would rather not encounter, hut I am convinced that, in so far as the prosecution of this war is concerned, either by the active one hundred thousand, or the two hundred thousand, or the ultimate three or four hundred thousand that go to the front, the seven million five hundred thousand who remain at home are prepared to cheerfully pay what is necessary in order that the men at the front may do their work.	.
My hon. friend took up, first, the balance of trade, and he rather belittled the statement that the balance of trade in this country in the last two years, and notably in the last year, has been so changed that from a large adverse balance of trade, as shown by the imports and exports, we have to-day a large and gratifying favourable balance of trade. It does not depreciate that result in the least to cite the invisible imports and exports, 'and to endeavour to detract from the favourable nature of the present balance of trade by declaring that it does not express the . true state of the exchanges between Canada and outside countries. These invisible imports and exports have been factors in these interchanges during every year that we have existed as a country; they have been increasing factors in these interchanges during the last fifteen or twenty years, and they have been rapidly increasing'factors owing to causes which we all understand. But what we can feel thankful for is that, along with the existence of about equal factors of invisible imports and exports; the situation has so far improved that we have a favourable balance of the imports and exports as shown by the customs returns, and that we have reversed the old situation. Therefore, if there is

any advantage in a favourable balance of trade, that advantge has accrued to Canada during this year.


Mr. GRAHAM:: That "if" is the point.


Sir GEORGE FOSTER:: My hon. friend (Mr. A. K. Maclean) made some remarks in reference to borrowings in Canada. I apprehend that he favours the people of Canada and the resources of Canada being called upon to give an equitable amount towards the present support of the war, and towards the diminution of that great borrowed sum that shall remain as a burden on our successors; but he seems to think that the loan which the Minister of Finance took from the people during the last few months was not advisable for two reasons: in the first place, because it perhaps went so far as to diminish the resources of the country which are required for carrying on our normal and present current business, and in the second place, because it was not a popular loan, and therefore took rather from those possessed of accumulated funds than from the general savings of the less wealthy classes. My hon. friend is scarcely correct in his views. If he will-look into the particulars of that loan he will find that there were 25,000 subscribers, which is a very large percentage of the population of Capada. Another fact he will find is that jf the original limit of the loan had been adhered to, the banks and the insurance companies, and the other large accumulators of the deposits of the people, would not have received a single scrip, because the loan would have all gone into the hands of the smaller investors. He will also find that of the $100,000,000 that were ultimately accepted, $75,000,000 came from the lesser investors and only $25,000,000 from the banks, the insurance companies, and the larger investors of accumulated funds. I think the desires of my hon. friend have really been met in that loan, and if not in that loan, they are met in the provision of the proposed legislation for the issue of debentures, in small sums, in order that the person who has one hundred dollars saved out of his earnings can put it into the war fund and thus help to carry on the activities of the war, and, at the same time, make an investment for himself which will bring a fair interest return. The prosecution of this plan with energy and discretion, throughout the length and breadth of Canada I regard as being an eminently fair way, and I hope it will prove a successful way, of interesting the people of small sav-
ings to take their part in the support of the war and at the same time to make wise provision for their own future.
My hon. friend (Mr. Maclean) then spoke of the tabulation of expenditures. He believes that as the expenditures all come out of the one pocket, and all go to the carrying on of the affairs of the country through the different branches of administration, it is simply vexatious and unnecessary, and perhaps misleading as well, if all are not grouped under one head. If this were done, he says, we should have no disr putes about surpluses and deficits. Well, I imagine that there was a reason why, in the denomination of expeditures in our early history, a system was inaugurated which made a distinction between capital expenditure and ordinary expenditure. This was a young country, with almost unlimited area, but with very sparse population. It was agreed on all hands that the men of the existing generation were not able to bear the burden of all the expense of opening up the country, and that posterity, which would enjoy the improvements that were made, might well be called upon to pay their proportion of the expense of making these improvements. The effect was to show a little in detail and to keep before the people what I do not think	is	a very
bad thing looked at in that light-that there are differences of expenditure, that some expenditures are for the present day and others -are for the future, and that it was fair and desirable th-at it should be known how these were distributed. Let us look at the war expenditure for example. The people of the future will read our public accounts, and they will find under our method of summation that in the years 1914, 1915, 1916-maybe 1917, we do not know-there was a vast increase in expenditure that the expenditure ran up from tens of millions of dollars to hundreds of millions of dollars, making, in the aggregate, many hundreds of millions. If / there were but one summation of expenditure, the men of the future would scarcely know how to rate and judge the people of these three or four years in their expenditure of these extraordinary sums. I think it eminently fair to have such a summation of expenditures as shall show that in these years a sparsely populated country tackled the problem of defence of liberty and justice for themselves and for the Empire, and that the interests of posterity justified the expenditure of these hundreds of millions of dollars and the

entering of that expenditure as a capital charge upon the country. So far I am not disposed to quarrel with this distribution of expenditures under different heads. But I will tell you where the moth and the rust do corrupt in a distribution like that. You do not have always a well-defined line to guide you as to what is ordinary expenditure and what is capital expenditure. And, in the diversion and change from one, side to the other that has taken place in the history of our country many and many a time, you are led into error, and there is great temptation to keep the ordinary expenditure down by transferring to the side of capital expenditure, what ought, in right and in conscience, to be put down on the side of ordinary expenditure. I say that, so far as normal capital expenditure and ordinary expenditure are now concerned in this country, I, for my. own part, would welcome the merging of both into one. This country has passed through its main period of capital expenditure. It has passed through it with sparse population. It is now at a state of advancement where it might very well place in one column all its expenditure and so prevent our continual juggling and dispute as to surplus and expenditures, and proper surplus and improper surplus.
The hon. member (Mr. A. K. Maclean) went on to speak of the expenditure and debt. He says the expenditures go up and have been going up, that the debt is increasing and will increase. That is true, and if the debt increases the payments for interest must increase. But what would the hon. gentleman have? The people of this country have made their decision. There is no wavering in it from Pacific to Atlantic. There never was a case in which unanimity was more complete. The few small and discordant voi,ces that we hear now and then protesting, only serve to bring out the remarkable completeness of that unanimity, and to call it more prominently to attention. The people of this country are behind this war, and underneath this war and the prosecution of it. Expenditures may go up, debt may increase, interest expenditures may grow larger, yet it is the determination of our people to make this expenditure, to bear this burden, until victory is won and the cause for which we are fighting is triumphant. But there never was a time in the history of Canada; there never was a time in the history of any Administration, when the call came more clearly to those administering the affairs of the country to be careful in the matter of expenditures; to direct them properly and to administer them with absolute honesty; to be strong enough and brave enough to refuse unnecessary demands. When the trenches call for munitions' and supplies; when the blood of the country is flowing from its veins in the struggle to preserve its ideals and its liberties; when those who are at home are contributing with generous self-sacrifice, and without murmur or repining, I say that to me as a member of the Government, to you as supporters of the Government, and to you gentlemen opposite, as a part of the great body which represents the people of this Dominion, the call comes to cut off every unnecessary expenditure, to refuse every unnecessary demand. It is our business to administer the funds of the people with perfect economy and to devote ourselves in so far as human beings are capable of doing it, to the sole purpose of prosecuting this war to its successful and final conclusion.
At six o'clock, the House took recess.
House resumed at eight o'clock.


George Eulas Foster: Mr. Speaker, my hon. friend from Halifax (Mr. A. K. Maclean) made some observations by way of criticism in respect to charges made by the different departments to war account. He thought that, in the case of small amounts, that practice was " small potatoes " so to speak, and that in the case of larger amounts it should be charged up to the different departments. What is desirable, it seems to me, if we are going to put war expenditure in a column by itself, is that we should know our total war expenditure, so that we may realize exactly what the country has to bear on account of it. It is a fair proposition that all amounts expended, whether by the (Militia Department or by any other department, the purpose of which was immediately to support and carry on the war, should be charged to the war. Otherwise it is unfair to the departments, by way of comparison. Our statistics run from Confederation to the present time. We compare administrations, and we also compare, year after year, expenditures in the same administration. It would be unfair, I think, if large expenditures are made by the different departments on war account, to have these charged up to the department as ordinary and necessary

expenditures of the department. It would be unfair to the department, during the term of these expenditures, and it would disturb the comparison, and indeed make comparison absolutely valueless in respect to criticism of expenditures.
Take for instance the large amount which was debited to my department, $3,000,000. That was not an expenditure chargeable to the Department of Trade and Commerce in any way at all. The $3,000,000 odd were expended upon the million sacks of flour which we donated to the British Government. Whether that should have been charged to war expenditure, or whether it should have been charged to ordinary account, and made a gift outside of war expenditure is a question open to discussion; hut the Government thought that as such an expenditure would never have been made but for the war and in support of the war, and was a gift to the British Government which had the heavy burden of the war on its shoulders, it should therefore be charged to wax account. Therefore, I do not think that my hon. friend's criticisms with reference to the war accounts are maintainable. Again, if a number of em-* Payees of a department enlist and take part in the war, they have to be replaced. The department pays the salaries, or a portion of the salaries, of these officers while they are engaged in the war, and yet has to put other officials in their places and pay them while the enlisted employees are absent. It seems to me that it would not be fair to charge these salaries to the ordinary expenditure of the department, but that it would be fair to charge them to war account. However, we will let that go for what it is worth.
Then my hon. friend found fault with capital expenditures in a general way. He referred to capital expenditures amounting to some millions of dollars this year, which he thought might well be dispensed with, so that the money could be saved for the present. He mentioned one in particular, the Hudson Bay railway, and his opinion was that as that work was not under contract, the same argument could not be made with reference to it as could be made with reference to the Welland canal improvements, which are under contract and where therefore it was a difficult thing to break contracts, as damage would be involved if the contracts were delayed or broken. His information is not quite correct with reference to that work, however. The Hudson Bay railway is not being built by 
the Government by day work, or by its own gangs. The Hudson Bay railway contract, for the first 200 miles, was let by the late Government, and the contract for the other 200 miles was let directly after we came into power, in order to carry the railway up to the bay, so as to secure, as soon as possible, access to the waters of Hudson bay and to effect economies in respect to the necessary expenditures for docks and improvements. So that that contract is in the same position as others.


George Perry Graham: How about the harbour works?


George Eulas Foster: They are carried on by the Government, and might be subject to suspension, but the Hudson Bay railway certainly is not. Again, my hon. friend spoke with reference to the character of expenditures generally and as to the evils of patronage, and he instanced a class of expenditures which he thought might well be dispensed with. These were the expenditures upon harbours and rivers, and upon improvements along the coasts, and my hon. friend's characterization with reference to thesa was, as I understood it, that they were not very important at the best, that many of them were questionable at least, and, during the present time, might well be dispensed with, and the money saved devoted to the war. He also declared that those expenditures were mainly on account of patronage, and he made a rather vehement attack upon patronage' as a practice-I will not call it a principle-in the Dominion of Canada.
I am disposed to be perfectly frank with respect to both of these points. I am disposed to agree with my hon. friend in some of his strictures upon both of them, but his protest would have had far greater weight with me, and with the House, and with the country, if the practice of himself and his party, when that party were in power, had accorded with his professions at the present moment. That, however, is not the kind of argument which slays an opponent entirely. He might plead what was pleaded by my hon. friend from Assiniboia (Mr. Turriff) with reference to the argument which was offered here the other night as to the 50 cents imposition on flour that was to bonus the miller. My hon. friend from Assiniboia found no fault with that proposal some few years ago; therefore he supported it, and he rather intimated that he supported it then on principle. Now he opposes it equally of course on principle.

The same remark applies to the question of patronage. I said I was disposed to be perfectly frank on both of these points. There are expenditures now-there have been expenditures from Confederation up -which have been put into the Estimates, passed and carried out in the country, that weTe neither useful nor expedient. There is no doubt about that; it has been done under all Governments; it probably is being done under this Government. My opinion is that until a different method is pursued with respect to our expenditures upon public works, in their authorization, we shall be open to these troubles and to that criticism. My view is that every application for a public work, or a public improvement, should go before a competent bo'ard of engineers and business men, should be reported upon by them for the information of the Government, and that every application should have to' show some cause of necessity, of public benefit, or of future usefulness before it was passed and put into the Estimates. I do not believe that we will ever get down to a proper system of husbanding the resources of our country, as we are bound to* do as trustees for it, or of confining ourselves to useful and necessary public works until we get some machinery of that kind.	*
Now, as to patronage, I have been thirty-four years in public life; I have been a pretty close student of,political parties and political history in this Country, and I have simply this to say-I give it as my individual opinion-I have long felt it and I feel it now-that in the whole course of my political life I cannot point to a single instance where political patronage ever raised the status of the bench, ever promoted the efficiency of the Civil Service, ever helped to economy in administration or enhanced the status of public administrators, no matter what functions they performed, ever helped a member of Parliament in reality, or ever strengthened a Government in reality. On the contrary it almost always causes the dry rot and disintegration that break up government after government and party after party, and I wish now, in the white heat and light of this* great contest and struggle and the self-sacrifice that we are called upon to make, that we might speak from the heart out, and make an agreement in this country between both parties, that hereafter patronage shall not be applied by political parties in the administration of our public services. Now, that is a frank admission. Some may
say to me that I have no right to make it.
I presume upon my grey beard and thirty-four years in public life, and I make that statement for what it is worth. I will just append to that one single sentence, and it is this: that if there is any laxity in the public virtue of this country to-day, if there is any canker of public corruption, in ninety-nine cases out of a hundred you can trace it to the baleful effect of political party patronage.
The hon. member (Mr. A. K. MacLean) then went on to discuss the Budget which was brought down for the raising of the necessary revenues for the prosecution of the war. Well, my hon. friend criticised, but it struck me that he was rather half-hearted in his criticism. He would not take the responsibility of saying that the proposals were utterly and absolutely without merit. That is very good from a member of the Opposition whose duty it is to criticise and who makes his criticism and speaks for his party therein. At the best, he says, it can only be justified as a temporary expedient. Very good; this is only a temporary expedient, as I understand it; it is limited to the autumn of 1917, or thereabouts. The criticism of my hon. friend does not hurt very much. He does not believe in its being retroactive. Well, that is open to debate, but what we were after were revenues for the prosecution of the war and what we tried to do was to make the getting of these revenues coeval, or contemporary, with the duration , of the war. It may be that in particular instances hardships will be found. You cannot 'devise any system of taxation I do not think you can-at least I have never known of one that was devised-that would work perfectly and absolutely scientifically and do no 'injustice to any man in the body politic. So, there may be details of this which may very well be ameliorated when we get into Committee of the Whole.
Another point my hon. friend made was that 7 per cent was not a sufficient dividend, a sufficient profit, to encourage industrial establishments. The resolution which has been brought down does not confine it to 7 per cent. It allows the industrial establishment to make eight, nine, ten, twelve, or whatever per cent it can, and it allows it to retain that profit up to seven per cent and then the Government shares in the proportion of one out of four over and above that. If 12 per cent is earned by an industrial

company and if it is necessary, or seems to be, in order to keep it up, that it shall get 7 per cent, it gets its 7 per cent. We then take the difference between 7 per cent and 12 per cent and we give the owner of that establishment three and three-quarters per cent while we take one and one-quarter per cent, so that he can have his 10 per cent of that industrial dividend.
My hon. friend explained to the House that he thought we should have taken income as the basis of our taxation. There is a great deal to be said in favour of income taxation. There is a good deal of truth in the statement that taxes have to be paid anyway and that, if they are cumulative as between the province and the Dominion, the man pays, you get from him and he does not pay more than he ought to pay. There is something to be said in favour of that, but I am of the opinion- maybe I am not correct-that in war time, and especially in these busy times that we are passing through,- to go into a large scheme of wall ordered . taxation, to examine into every source of taxation and to come to conclusions as to what system should be adopted, and put into force, is to undertake a task which requires more leisure than ministers have to give to it. Anyway, let us be thankful that the criticisms that have been made by the hon. member for Halifax (Mr. A. K. Maclean) have been no more damaging or stronger than they have been. A democratic government is bound, and is always willing, to confer with the Opposition, and take its suggestions; and, if those suggestions are good, to embody them in its legislation. It is equally the duty of the Opposition to assist the Government with its best thought and its best conclusion, more especially in cases like this, where the cause to be sustained is so great, and where the burden of the support of that cause is also so heavy.
Other gentlemen on both sides of the House will-have opportunities of speaking on the particular matter of my hon. friend's Budget in Committee of the Whole, where it will be exhaustively discussed in detail. Therefore, I do not intend to-night to occupy the attention of this House a single moment more along that line. I am going to ask the House if it will be indulgent enough to listen to me for a few moments on a subject that has not been very thoroughly discussed, which possibly has not been very well thought out or received any very great attention, but which is yet 
so closely interwoven with this great contest that we .are now passing through that, although we do not want to divert the energies of Parliament or of the country from our main purpose of carrying on the war successfully, yet as. prudent and thoughtful men we ought to be turning over in our minds, and getting ready for when the time comes for action along these lines; and that is, with reference to the economic situation, the business situation. I take it that, if we read history through from first to last, we shall find very few contests out of wlhich spring such issues as those which hang upon and are to come out of the all-absorbing contest in which we are engaged. If that be true, it is the duty of Parliaments- and they . are undertaking that duty-and it is the duty of this Parliament and of this country, while giving all the support in its power to the actual conduct of the war, at the same time to be thinking very deeply, very strongly, and very honestly upon the condition of things which we here in Canada, and the Empire with us, and the world taken as a whole, will have to face when the war is over and peace is assured. 1 take it that our great and supreme struggle -that which will try us most and tax our best powers-is yet ahead of us., !ias yet to be met, and will begin the day our soldiers are called off from war and the tremendous work of re-adjustment commences, in our Empire, in this country, with our Allies, and with the world. And it is just upon two or three phases of this matter that I am going to ask the House to listen to me; not because I think I shall teach them much, or that there will be anything new in what I shall say, but to stir up our minds by way of remembrance, that we may not forget these very weighty things which are just in front of us, and which we cannot avoid facing.
I'n. the first place, I affirm that every man of us on each side of this House, and every citizen of this country, has one duty to perform; it is to put his thinking cap on, to examine into, and to understand those conditions which will confront us when this war has ceased; it is equally his duty to be candid and honest in his utterance of opinion, and give to the Commonwealth and to the Government the best that is in him of .suggestion and of advice. I listened to the Finance Minister telling us the other day of the pleasant side of the past year's operations; of the large crops-a two year crop in one, thank Heaven for it-that have been gathered, of the good prices to the farmers for their

products, and for most other products as well. I am thankful, too, that as the war had to go on and munitions had to be made, it was so brought about that when other manufacturing industries languished we had an opportunity of making a large portion of the English munitions, thereby keeping our unemployed at work and paying them wages, and filling the gap which would have been an awkward one for us if we had not had that substitution. I am glad that things have been so Drought about partly in the nature of things and partly by the good management of my hon. friend the Minister of Finance, that this year we sfhall have a favourable balance of $200,000,000 as between our imports and exports. I am glad for all these things; they have buoyed Canada up; they have kept us in. a position of vantage; they have made it possible for us to say that, in the by and large, no country stands to-day, after the fir^t nineteen months of war, in a better and sounder position than does this country of ours. Now, admitting all that, I am bound to be honest with myself and to say that we should make a very great mistake if we took all this just at its face value, and concluded that to-morrow would be as to-day, only much more abundant; it would be a great mistake if we put away from us all care, all investigation, all fronting of what will be the real difficulties of the future, and thus when the supreme economic struggle comes find ourselves ill prepared,
' light-heartedly and without thorough examination entering into the greatest contest in our history, the greatest in the history of the world. That is what I say to myself, and that is what I tell the people with whom I come in contact. I wish the whole of Canada would enter upon the same line of investigation; possibly they	are	doing it; I	think they	are,more and more. We should be preparing ourselves for the time which is to come. The courage which comes from an inflated and mischievous optimism is but Dutch courage when you meet in the final struggle the difficulties you have to front.	The courage	that tells,	andthe courage that works out the solution,	is	the courage	which a	manhas	who	faces every	difficulty,	who
knows exactly what is ahead of him, and then with firm resolve and energy braced to its utmost, with the full power of mind and heart says: Yes, that is what 1 have to overcome, and by God's grace and
my own steady work I will face it and overcome it. That is the kind of courage which I think tells. I have no love for the pessimist: the pessimist cuts right down into the hopes and confidence of the heart, and paralyses exertion and effort. I have not much more love for the over-optimist; an over-optimism I think may be more injurious to us than	a tinge
of pessimism.	I meet with a great
many people who use three common arguments. One man says to me-a, friend of mine actually did say it to me: I have no compunctions or qualms of conscience, no fears at all as to the outcome of this great war in a financial and business and_ economic way; let the war go on; let the millions be spent; let the destruction all take place; there will be just as much money in the world at the end of it as there was in the beginning. Why, he says, take your manufacture of cotton and what is the system? Capital seeks out the raw material; gathers it together; transports it; puts it through the mill; brings it out into the finished product; sends it away to the customers and gets its pay, and then runs back again to the raw material and keeps up the round, dispensing its wages and its benefits to every class of labour concerned. So it is with the woollen industry and with every other great industry, and so it is with the manufacture of cartridges and cannon. Cartridges and cannon are being made now. Capital seeks out the raw material; brings it up to the state of perfection which is necessary for manufacturing the munition; puts it through that manufacture; carries it out to its completion; sells it to the war administration, and gets its money, and then goes back again hunting out raw material and keeping up the same round. Wlhat is the difference between the manufacture of cartridges and cannon and the manufacture of cottons and woollens? Do you not see that the money is all kept in the world and that it is all kept circulating? Why then do you have any qualms as to what is to take place when this war ceases? Well, I have just this to reply: That money is but an infinitesimal fraction of the wealth of the world, and, in so far as it is money, it is not worth shucks except for what it represents. Gold, silver, copper, bank-bills, letters of credit, cheques, anything that you please, are but the expedients by which the old and clumsy methods of barter have been replaced and by which we have adaptability of ex-

change and rapidity of distribution. The wealth, the capital of the world, i's that which money represents; it is what is stored up from the earnings and savings of the people for countless generations, and the manufacture of cottons and woollens is characterized as a product by the ultimate benefieient use to which it is put. The product of cannon-making and cartridge-making is also characterized by the use to which it is put, and that is a destructive use, which destroys everything that it strikes, and not satisfied with material destruction, destroys the human actor, mind, body and spirit. Therefore when munitions of war are characterized and thought of in that way, whilst the manufacture of them is necessary in a war for principles and ideals, and whilst the war must be carried on to the finish, from an economic sense it is not true to say that the manufacture of munitions is just as beneficial to the country as the manufacture of cottons and wollens. That is where the world has to count up its almost unfathomable and incalculable loss, for there never has been a war in the history of the world where more of the wealth of the world, material and human, has been destroyed than in this great contest through . which we are now going.
Another man says:	Oh, you need not
trouble yourself overmuch; the war will be over in a year or in eighteen months, and when peace comes, we shall have a period of unexampled prosperity. I would like to think so, but I cannot. Prosperity is based upon profitable production, on the demand for consumption and the power to pay the producer in order that the consumer may ' have within his hand to consume what the producer has produced. Looking at the matter in that light, we cannot look forward to the end of the war and comfort ourselves until that period on the false assumption that peace will bring with it unexampled prosperity.
One more point I must touch and it is this: in a paper which came into my office there was the following tremendous headline:
Twelve to fifteen millions inhabitants in Canada three years after the war closes.
That is an exaggeration, but how- mischievous it is to have that idea instilled into the minds of the people. It paralyzes any effort to secure what immigration we may be able to procure if the report is spread broadcast that willy-nilly we shall double our population in three years through immigration, and it prepares for us 
an immense disappointment and consequent depression when that period comes and our hopes are not realized. Immigration is needed. Let us ask ourselves the simple question: when war ends, where shall we get that immigration? Not from the millions of men who lie buried on the battlefields of the world; not from the other millions of maimed; blind, or bruised humanity that are able, it may be, to do something, but not to do the work that we require of well-grown and well-found immigrants in a country like ours. We shall not get them from Germany, because it will be many and many a long day before the German, coming from beyond the'line of Belgium and Flanders, finds it to his comfort to seek a domicile in the Dominion of Canada. The Hun spirit has revealed itself too fully; the antipathies and hatreds, the loss of .sympathy, the outcome of these feelings of humanity which rebel and revolt against the inhumanity of the Hun, will lie in the hearts of our people for this generation and will be taught to our descendants for generations to come. Not from that source then can we look for very much immigration into this country.
I need not follow that argument further. Do not let us be deluded by any of these things, but let us put on our thinking caps and study where we can get the right kind of immigration. Let us invite those that we want; and then let us improve on the previous chapters of this country's history and train and direct, sympathize with, and help in their endeavours in the new country, those whom we bring from other lands to become cultivators in Canada.
The next point I wish to touch is this. I am not sure that we have not taken too restricted a view of this great conflict in which we are engaged. Is it or is it not true that we have been inclined to judge of this contest by the struggle of armies on land, fleets on the sea, submarines under water, and Zeppelins and aeroplanes above? Is it not possible that we have so regarded these phases of the struggle as to have lost sight of the fact that there is another side to it all? My belief is that there has been and long will be another side to this conflict. The war which broke out in flame and thunder on the first of August, 1914, was but one symptom of conditions which had long existed and which had long been nurtured. This contest began forty or fift3r years ago when Prussia came out from the Mark of Brandenburg and began to impose itself upon the several states of Germany. The preludes were in Prussia's wars

against Denmark and Austria by which she added to her possessions. The first great act was in 1870, in that swift, marvellous campaign against France, when she subdued her enemy and took toll in money and territory. Thereafter was carried on the system of what I may call peaceful penetration which, carefully designed. elaborately organized and tirelessly prosecuted with infinite skill and tact, has been Germany's way of pushing forward to the ultimate dominion and hegemony of the world. Let me make that a little stronger. Germany lay contiguous ito Belgium, to Holland, and to other countries on those seas, a dominating power, scientific, easily master in chemical research, pushing ahead in school, in college, and in university. In these and many other ways she began to penetrate the territories which lay nearest to her, and driving her lines farther and farther she at length ringed the world with her influence. Not until the war broke out did the revelation come to the minds of the people of other lands. Then, little by little, the eyes of the world's people opened-and are still opening and are not wide open yet-and they realized the relentless campaign along the line of peaceful penetration that Germany had waged against mankind with the intention of ultimately dominating the economic and political situation of the world. That economic war has been going on, and is still going on, and when this war of battalions and fleets is ended that economic war will still be continued. When you have finished with the military part of it you commence with the economic part, which must be prosecuted to its fulfilment.
Let me give, you one or two instances. Germany spread herself into East, West, and Central Africa, along the borders of friendly countries. And every hour that she so spread herself she was preparing treason and revolt for those friendly countries. When the rebellion took place in South Africa, after the outbreak of this war, we found that treason had been hatched, that revolt had been consummated by the German authorities in Africa. It was found that throughout the Pacific in island after island there were the bases of Germany's operations- the wireless stations of the Germans, the pervasive agencies of the Germans. Theologically, scientifically, socially, politically, financially, every advantage that they could take in this way of peaceful penetration they had taken, until their influence
ringed the world, strong and sinister. And. this has been to them in this great contest of incalculable value as a support and help. Let me give you another instance. In 1914 the British Association for the Advancement of Science held its great world-meeting in Australia. To that meeting four prominent German professors were sent. They came as the. accredited delegations of great scientific associations, and as such they took part in the proceedings. The association's meetings ended. War broke out. These four men, accredited in that way, made representations to the Australian Government that they were scientists who had come to take part in this great association and ought to be given passports to their homes. That looked reasonable to an unsuspecting people, and the Australians gave them the asked-for liberty. Two of them availed themselves of that liberty and left very quickly. The others wanted to stay longer and raised some cavil as to the time. Suspicion was engendered; the baggage and possessions of these two men were seized and it was found that they were absolutely German spies, that they had then in their possession military maps of all points of strategy and advantage in Australia. Immediately, the Australian authorities sought to apprehend the two who had left. One got away through Java, but the other was caught up with by a British cruiser, and when his baggage was examined it was found that he had the complete paraphernalia of the spying work he had done in Australia. These are two instances which show you the relentless, far-seeing, far-reaching and effective way in which this work of peaceful penetration on economic and political lines was carried on.
In things commercial and financial they acted similarly, until they acquired abnormal powers in different countries, and used them for the advancement of their own ends. To-day it is well understood in all the allied countries that this economic warfare will have to be finished as well as the warfare upon land and sea. To-day France is taking action, making investigation, laying plans. What is the first thing that will take place? Old treaties have gone; new treaties and new tariffs will have to be made. In Russia, Italy and Great Britain preparation is being made on the same lines. Do you suppose that Belgium, whose industries have been destroyed by the war, will be disposed to allow German trade to come uninterrupt-


Some hon. MEMBERS:: No, no.


George Eulas Foster: We have learned two lessons in this war. We have learned the lesson of unpreparedness in military matters. When one begins to think of what the British Empire means, of what its flag floats ovqr, of what its boundaries encircle- one-quarter of the inhabitants of the world, wards without citizenship, dominions which are equal in citizenship, dependencies spread over the whole universe-one begins to realize the awful responsibility of the trusteeship of the British Government over that immense area, filled with such precious possibilities, and crowded with such mighty interests. To* day, and for nineteen months past, Britain has been mourning the fact that she was unprepared for the defence of those sterling and incalculably vital interests. That lesson of unpreparedness has been learned by every one of the Allies. The only country which did not have to learn it was Germany herself; she was not guilty of unpreparedness, so far as this war is concerned. She had prepared her weapons and chosen her time.
Another lesson of incalculable value that has been learned is the lesson of co-ordination and co-operation of all the parts of the British Empire, co-operation and co-ordination on the battlefield, at sea and on land; co-ordination and - co-operation in the matter of supplies, of raw material, and of everything which tended towards the embarrassment of the enemy, and towards the support of Britain and her Allies. The ordeal of war through which we have passed and are passing has taught us that it is possible for an Empire so vast and stupendous as the British Empire to co-ordinate and co-operate, each part with



every other, towards the general good and general benefit. That is a lesson of incalculable value, and that-lesson will be turned to account in the economic field, as well as in the field of military and naval exploits.
One word, not by way of full description, but simply to keep before our minds what is at present going on. The first thing that will take place will be a revision of the treaties and tariffs which govern trade. The old treaties have passed away with the war. The treaty of Frankfort, concluded after the Franco-German war, bound France, in some respects, hand and foot to German commerce and German trade. In 1869 the imports of Great Britain into France were 47 per cent of the total imports. The Frankfort treaty intervened, and in 1913 the imports of Great Britain into France had dwindled to 13 per cent. The commercial treaties and commercial methods of Germany won their way into Austria, into Russia, into Italy, and into the Balkans, and pressed upon every co-terminous ' country. That condition has passed away. The slate is clean, and the Allies, which have mingled their blood in the contest to defeat the Hun in his attempt to usurp the place of dominator and master of the world, will be disposed to unite their economic forces in order to protect their own peoples. And the last and least source of supply for manufactured goods, and the last and least point of destination for our raw materials-I am not a prophet, but I take it upon myself to hazard the conjecture-will be Germany until the German people have renounced their mad, wild dream of the superman, of the superstate, of the superrace, which has been their ideal and their delusion through this war.
The British Empire, I think, will get itself together. Australia woke up early after the war broke out, and, in its desire to make use of its metals, found that the German metal trust had its strong hand around every metal-producing industry in Australia, and had these industries tied up with long contracts. The Australian Parliament took its power info its own hands, broke off that iron grip, and to-day they are manufacturing and utilizing their own metals. The raw materials of the world were largely corralled by the Germans; German syndicates, German financiers, German -commercial houses, had their hands upoh much and sought control of all. That condition will never occur again. The Empire, I think, will see that its own raw materials, in all parts of the Empire, are

utilized and developed, first, for the purposes of the Empire, and, afterwards, for the purposes of its Allies and of the neutral nations of the world. And so in this wise, without one single idea of the individuality, freedom, and independence of the overseas dominions being relinquished ox trenched upon, the necessities and the example of the war will have brought about such a sentiment and blazoned such a path that it wild be possible for the Empire to mobilize its economic forces for the good of all its parts, and the British Empire as a whole be able to join a league of good will with its Allies for their mutual advantage and development.
Canada herself must wake up and in many ways seek to strengthen her position.. We must strive as far as possible to eliminate all waste/ to stimulate thrift and combine our savings for investments which beside contributing to the support of the war may at the same time make a profitable investment for the people themselves.
We must also learn to practice economy in all expenditures, public or private, to improve the production of the country, both in quality and in quantity, to invite and direct immigration on sound and discriminating principles, and to reinforce efficiency in production by technical education and thus combine as far as possible the factory and the laboratory.
Canada herself has learned something from this war. Canada to-day is a selfreliant country many degrees higher than when this war commenced. Somehow or other, since we have put our shoulders under the Empire's burdens, we have developed greater confidence and greater strength. The sacrifices that we have made have melted out many of our parochial trivialities and unimportant differences, our minds work in an atmosphere of wider and broader problems of Empire possibilities in which-Canada shall share as a part of the Empire, within it and of it. To-day the lesson of the struggle and of its sacrifice is finding its way into, and imprinting itself upon, every Canadian heart, and making of us a more self-reliant and resolute people. What we have done is an earnest of what we may do. But the thing that we especially need to do now in this country is to throw old shibboleths aside, forget-many of us-the theories and prejudices of our earlier days, face conditions as they are in this country, and work together, both parties and all the people, for a sane and -systematic mobiliza-

tion of the best products and the best forces of Canada which in the future shall give us prosperity, development, peace, and happiness.
I am glad, Sir, to-night that Canada stands high and proud in the galaxy of nations and dependencies that make up the British Empire. Sacrifices have been made and burdens taken up for liberty, for justice, and for the best ideals of the world. Hereafter Canadians will not let fall so lightly and unthinkingly from their tongues the words justice and liberty, liberty and justice. They will come from the hearts of Canadians henceforth, and I doubt not that in our civic duties, in our provincial duties, in our Dominion duties, in our Empire duties, we will come to the work with purified hearts and enlightened minds, with higher resolves and with a great purpose, determined to make of ourselves citizens worthy of the reputation that our soldiers have made for us at the front, worthy of the reputation that our mothers, our sisters and our daughters have made for us here at the home base of operations, and worthy of the place that we have aspired to take as one of the potent, virile forces in the progress and development of the world.


Mr. W. A. BUCHANAN (Medicine Hat):: Mr. Speaker, we have just listened to a thoughtful speech characterized by broad vision and the expression of high ideals with which I desire to associate myself. We are told that the world is undergoing a change. I think that, not only is the world undergoing a change, but that, as individuals, many of us are undergoing changes too. I am not making that observation for the purpose of applying it to my hon. friend (Sir George Poster), because I realize that since this war commenced I have changed my viewpoint on many subjects. We are developing the highest ideals of citizenship, and out of this war will come a better *Canada, a better Empire, and, I hope, a better world.
With what the Minister of Trade and Commerce has said about the war, and about the position that Canada should take in connection with it, I am in accord. I think our entire energy, our every thought, should be devoted to the winning of this war and that there should be the most active participation of Canada in the war with respect to both resources and men. We must abandon the petty things of partisanship, many of the things about -which the hon. Minister of Trade and Commerce has spoken. I 58i
come from a section of country inhabited by people who are from other lands, but who have taken this war seriously from the moment it was declared. You know the position that the province of Alberta has taken in the matter of recruiting, you know of its contributions to patriotic causes. In the section of Alberta from which I come there is a very large American population. They may not have heard the call to service at the beginning of the war, but they are hearing it as the days go by. They realize that the call is not only to Canadians born in Canada, but to Canadians of every class, because this war represents a fight for great principles; principles which are dear to the American people, and to-day they are prepared to do their part by contributing their money to patriotic causes, and by sacrificing their lives if need be. I should like to convey to the House the feeling which exists in the section of Canada from which I come. I know there has been a fear in Eastern Canada of recent years that the new population might not represent the best type of British citizenship, might not strive for those great ideals of British citizenship which are possessed by the Canadian people. Let me tell any member of this House who had doubts in that regard in the past, that he can put aside his doubts and be satisfied as to the character of our new western citizens. I have become intimately acquainted with that citizenship through addressing meetings on behalf of the Canadian Patriotic Fund. In the southern part of Alberta in 1914 there was, as everybody knows, a drought; people were almost without means of livelihood. I am thinking now of a constituency in the local legislature known as Taber; this constituency was drought stricken in 1914. When we met in 'Calgary to allot the amount to be raised from the province for the Canadian Patriotic Fund, we thought Taber would not raise more than $3,500. It must be remembered that a seat in the Alberta Legislature is sparsely populated, and not to be compared with a seat in the legislature of Ontario or Quebec: the number of people are few, and the territory is large. The southern part of the province of Alberta had been allotted $250,000, and ' we thought Taber was not in a position to raise more than $3,500. Mr. Speaker!" that constituency, which had to come to the Government of - Canada in - 1914 for assistance, . raised over $10,000 for the Patriotic Fund. That is evidence of the generosity of out



C0MMONS

[Stage Direction]
people; it is evidence not only of their generosity, but of their belief in the righteous cause for which Canada and the Allies are fighting.
I am sure the Minister of Finance will be anxious to learn the view of the people of that section of the country in regard to war taxation. The people there are prepared to bear their share of the burdens of this war, but they want the taxation placed upon the people who can bear it best, and I would say to the Minister of Finance that in Jfixing the taxation he should keep that fact in mind. In many respects I am in accord with the minister's Budget proposals this year. They can be criticised; I think he should have gone further and reached some people of great wealth who will not be reached under the present proposals. In my judgment that could only be done by an income tax. I have in mind communities in the province of Ontario, in which I once lived, where men of great wealth are not interested in business concerns of any kind; they are simply individuals of great wealth, and their wealth is placed in property. I know of one city in Ontario where in my time nearly every business block in the community was owned by two men. I believe that these wealthy men should be reached; they should be made to bear their share of the cost of this war. The feeling of the people, as I have interpreted it, is that the concerns engaged in the manufacture of munitions should be compelled to pay much more than they are being asked to pay under this taxation. I do not believe that any concern in this country should be allowed to make money out of this war, and I would have supported the Finance Minister in proposing that^ the 'Government take all profits over seven per cent; that is sufficient profit for a firm to make out of this war. No man should get rich out of this war. Some members of this House may have read an article in the Saturday Evening Post a few weeks ago, telling of the new war millionaires in the United States, of their spendthrift habits, of the waste of their new-gained riches, riches made out of this war. As I read that article I felt I should hate to see such men exist in Canada. But they will exist; perhaps they are existins at the present time. Many of these men who are making money out of the war do not" seem to treat the war seriously, or even life itself.
I want to refer for a moment to the tariff changes. There is one change which seri-

ously affects the Prairie Provinces. We in the province of Alberta are next door to British Columbia, and are anxious to have our neighbouring province develop. The Budget places a duty on apples. The Minister of Finance, in discussing the question of free wheat the other day, spoke of the national interest; he said that in the national interests he could not see that it was statesmanlike or the part of wisdom to place wheat upon the free list; it would simply benefit the farmers of three Pirairie Provinces, and injure other interests of this Dominion. In this tariff I must confess that he has abandoned that idea. He has imposed an increased duty upon apples, not in the national interests, but simply in the interests of one of the provinces of this Dominion, at the expense of all the other provinces. I want to emphasize this point, because at the present time fruit in the Prairie Provinces is a luxury; it is already expensive to buy, and the cost is going to be largely increased by this duty; and the consumers of the provinces of Alberta, Saskatchewan, and Manitoba are those who will suffer. I do not want to introduce partisanship into my remarks, but I am inclined to think that the Minister of Finance, when he imposed this duty, was thinking not of the national interests, but of certain other interests which are very important! in the province of British Columbia at the present time. 'There is a political interest in the province of British Columbia, and I have no doubt it was felt that this increase in the duty on apples would be very helpful during the coming *months to the party of which my hon. friend is a member. But my hon. friend must not forget that in impo;sing this tax for the purpose of 'developing the apple industry of British Columbia, he is laying a fresh burden upon the people *of the Prairie Provinces, and they have [DOT] burdens enough to bear at the present time. We have been advised by the Prime Minister, and by others throughout this Dominion, to practise economy as individuals. The Minister of Finance also urged the same thing in his Budget speech the other day. I presume that he also meant that we should practise economy in the administration of the affairs of Canada. The Minister of Trade and Commerce (Sir George Foster) made mention of patronage to-night, and expressed himself as he believed. He expressed a view which I have held for a considerable length of time. I have even come to the conclusion that 1

would much rather remain in Opposition than become a supporter of a Government and have to handle patronage. During thb war at all events, I think the entire patronage system should be wiped out of this country, for it means that the money of the people of this country is being-wasted. I know that, and I am going to be candid about it. I hope that the Minister of Trade and Commerce -will induce the members of the Government to put into effect the ideas which he expressed in his speech to-night. The people of Canada are serious at this time. They may not have paid much attention to patronage in the past, but they are paying attention to it now. While I have a great deal of admiration for the Minister of Milita and Defence (Sir Sam Hughes) I disagree with the statement he made in this House the other day that politics have nothing whatever to do with the administration of the affairs of his department. I say that politics have to do with the ad-rainastratoon. of that depa<ntaniemit; they 'h-ave to do wiitih tfhe administration of the affairs of that department in my own city. Men of all parties are subscribing to patriotic causes and paying their war taxes; but when it comes to provisioning the soldiers or doing anything in connection with the militia of this country, a limitation is set to the men who shall have a right to tender for the supply of the articles required. I do not know whether that is the case throughout the Dominion, but it is the ease in my own city.
Some hon. MEMBERS:: It is the case throughout Canada.


William Ashbury Buchanan: If the Government
wants to economize, it must give every one an opportunity of tendering for the furnishing of every supply to our troops. In that way we will get a business administration, and we will be able to get goods at a competitive price. There is at present a growing feeling of dissatisfaction amongst our people over the administration of patronage. I am not expressing my views on this point simply because the party to which I am opposed is in power; I believe that the system of patronage is a wasteful and unfair method and that it does not tend to business administration. The Minister of Finance was formerly engaged in business, and I am satisfied that he could, not have retained his position in the company with which he was engaged if he had practised in the conduct of their business the same methods
as we practise in the administration of' the affairs of this'country under the patronage system as I am acquainted with it.
I desire to emphasize a few points inconnection with agriculture, which is the basic industry of this country. While our minds are at the present time largely centred on the war and the successful issue	of	the war, we	must	notforget	to	conduct	the	affairs	of
Canada so that our resources may be benefited and developed. Just now there is not complete satisfaction, at any rate amongst the agriculturists of western Canada, with the condition of affairs. Last fall we had in the western provinces the greatest crop in our history, and it must be remembered that a great proportion of that crop is still in those provinces. I have here the figures, given by an official of the United Farmers, for the southern part of the province of Alberta. He makes the statement that up to the present time 17,000,000 bushels of wheat have been shipped out of southerm Alberta; 5,000,000 bushels are still in the elevators, and from 15,000,000 to 20,000,000 bushels are still in the possession of the farmers. That wheat is in the possession of the farmers because, although the price is high, they cannot sell it for the reason that the elevators are full and they have no place in which to store it. There is also a congestion on the railroad lines in Alberta at the present time. In my constituency, on the Goose Lake branch of the Canadian Northern railway, which covers the territory from the Red Deer river east to the Saskatchewan boundary, up to the beginning of this year only slightly over 2,000,000 had been shipped out of a crop of over 15,000,000. Hon. members are aware that the farmers of that section of the country have been in more or less straitened circumstances for the past two or three years. This crop was a God-send to them, and they wanted to raise the money as soon as possible in order to meet their obligations, for which they were being pressed on every hand, but they cannot meet them because they cannot dispose of their wheat. Now, I know that the Government has had great responsibility since this war commenced, but I feel that it has lacked initiative in dealing with this crop situation. The members of the Government must have realized early in the summer that western Canada was to have a great crop, because the evidences were all there, but the preparation made was not sufficient; in fact,


Mr. CURRIE:: When was that written?


William Ashbury Buchanan: It was the' annual address of the President of the United Farmers of Alberta at their last convention, held in Calgary in the early part of January of this year. These views, there-

for-e, are up-to-date; they are a modern expression of opinion on the question of a larger market.
With respect to the establishment of internal storage elevators, I presume that the policy of the Government in that respect was designed with a view to assisting the farmers of. Western Canada and providing some means of avoiding the criticism which is directed against the Government by reason of their neglect of the interests of the farmers. An elevator has been erected in my province, at the city of Calgary. If the Minister of Commerce had held the views that he holds to-night in the matter of patronage, that elevator would not have been located at Calgary. Any man who has visited the province of Alberta knows that Calgary is situated at the extreme western end of the province. West of the city of Calgary practically no grain is produced. North of the city there is a mixed farming country. The. farmers to the east, along the main line of the Canadian Pacific railway, and the Goose lake line of the Canadian Northern railway would naturally send their grain to the elevators at Saskatoon and Moosejaw. It is in the extreme southern part of the province that the great proportion of grain for export is grown in Alberta, and in order to reach the Calgary elevator ninety-nine and a half per cent of it would have to undergo a back haul. In response to a question that I asked since the opening of the present session, the minister informed me that the Calgary elevator was erected to serve shipments by the Pacific coast and through the Panama canal. That elevator has been constructed, and is receiving a little-very little-grain. It is a fact, however, that no test has been made to prove that grain can be shipped in bulk by the Pacific route.


John Allister Currie: Is that not due to the fact that the Panama canal is not open?


William Ashbury Buchanan: What I am trying to point out is that no test'has been made to establish whether or not this route is practicable for the shipment of grain from our Pacific ports; yet this elevator has been erected in order to accommodate shipments by that route. Further, the elevator has been placed at Calgary, where it is of no service for eastern shipments. If it had been placed at Lethbridge or Medicine Hat it would have met the need for Pacific shipments, because these points are tributary to the great grain areas of Alberta; and it 
would have also facilitated shipments eastward to lake ports. Nowr, there is a congestion of grain in Alberta at the present time. I inquired as to the capacity of this elevator, and was told that its capacity was 2,500,000 bushels; that from August 27 of last year, when it was opened, to the end of the year, the amount of grain received , at that elevator wais 185,455 bushels; that from January 1, 1915, to January 14, 1916, the amount received was 248,367 bushels. I have said that in the southern part of the province from fifteen to twenty million bushels of grain are still in the possession of the farmers, who have no facilities for disposing of it. In some sections of my constituency wheat is lying out in the open because the farmers could not raise the money to buy lumber to erect storage bins upon their farms. This wheat, lying in the open with a covering of straw, is in danger of being ruined if the weather conditions are severe in the coming spring. The elevator at Calgary, which cost the people of Canada a great deal of money, is practically of no service to the farmers of Alberta. If that elevator was erected solely for the purpose of meeting the needs of shipments westward via the Pacific, I do not think it should have been erected until the feasibility of that route had been established. If, on the other hand, it was erected to meet the present needs, it should have been placed in another part of the province, where-it would meet the requirements of the farmers in the harvest and crop-selling season.
I have been speaking of the needs of western Canada, and particularly of my own province. I wish to emphasize the fact that we are not asking for anything oif an exceptional nature, but simply for the solution of the problems which face us from year to year. If we want to have a happy and contented people in the western prairies; if wc want to encourage immigration into that country and to accelerate its development, these problems must be solved. Those men in eastern Canada who are engaged in commercial or industrial activities will admit that the prosperity of the whole country depends very largely upon the development and prosperity of the western provinces. This year evidence was given of that fact; if we had not had the -crop that we did have last year, there would not be the business prosperity which exists in many cities and towns of eastern Canada. It is true that the war has helped

many of these communities, but it is true also that many industrial and mercantile houses would have suffered severely had it not been for western Canada's great crop last year.
The Minister of Trade and Commerce gave us to-day a vision of Canada after the war. But, we can develop that vision during the war, and aid in carrying out his vision of Canada after the war. There must be a system of give and take in this country, and the problems of the western farmer must be solved in order to bring about contentment in the western country, and in order to satisfy us that we will have a united Canada now and forevermore. If those problems are solved during the course of this war, after the war, the western prairies will be populated by a people who will produce great wealth for this country, and who will aid in the development of the whole of Canada. Those people are doing their part to-day as Canadian citizens, and they are prepared to do their part until the conclusion of this war. At the same time they feel the burdens which, are resting upon them, and it is our duty to remove those burdens, and to bring satisfaction and happiness to their prairie homes. Every man in the West to-day is a pioneer; practically every man in Saskatchewan and Alberta is a pioneer undergoing the -hardships of pioneer life, working day and night to produce wealth for this country and very little profit for himself. That has been the case in the past. This is an exceptional year, and even under the circumstances of this exceptional year he cannot dispose of the wealth which he has produced, and he is discontented. He sees, lying to the (south of those provinces, a country where he thinks he could find ,a better market than exists at the present time. These farmers, in their organizations, demand this market, and we fail to listen to them. They know that there is another great and powerful organization in this country whose demands are listened to; and how can we expect them to be satisfied when they know that that powerful organization is heeded, and that their organization is not heeded.
You find the farmers of the western prairies asking for the removal of the duty on wheat. They are prepared to face this world with their products in open competition, and they ask for the advantage of the U.&. market and of every other market that they can get. They aie prepared to meet the rest of the world with their wheat, and yet their demand is not listened to. In the province of British Columbia the fruit
growers asked for a duty on apples, and the Government proposes to grant their request. Can you expect the farmers of the prairie provinces to be satisfied under such circumstances? You may satisfy them ' in regard to the apples; they may say: all right, if it is going to help our fellow citizens in the province of British Columbia, well and good; but why not meet our wishes and help us. The fact that you are failing to do that is not encouraging unity in this eortntry; rather is tit encouraging dissension, and that is what we want to avoid. We want to develop in Canada a great nation, and we will develop it; but we must give every man in this country a square deal. There must be justice and liberty, about which we are talking so much in connection with this war, in our treatment of our own-citizens. That is what we ask for, those of us who come from Western Canada. We are today doing our part in the western provinces in upholding liberty and justice across the seas, and we will -continue to do it until this war ends victoriously. All that we ask of the Canadian people is that they will grant to those in the West who are enriching this country, the same justice and liberty in the marketing of their products.
On motion of Mr. John A. Currie, the debate was adjourned.
On motion of Mr. Rogers, the House adjourned at 10.30 -p.m.
Friday, February 18, 1916.,