1919-05-08

SELECT STANDING COMMITTEE ON DEBATES.

[Stage Direction]
Mr. R. L. RICHARDSON (Springfield), presented the second report of the Select Standing Committee appointed to supervise the official report of the debates, as follows:
The Select Standing Committee appointed to supervise the Official Report of the Debates beg leave to present the following as their Second Report.
The attention of your committee having been directed to the present system which necessitated delaying the binding of the Revised Edition of the Debates until the final completion of the index of the session's Debates thereby preventing the distribution thereof within a reasonable time after the prorogation of Parliament.
Your Committee therefore, with a view to expediting the distribution of the bound volumes in question, recommend that each volume be bound with the index for that volume, the last volume to contain a complete index.
All of which is respectfully submitted.
R. L. Richardson,
Chairman.

[Stage Direction]
Report relating to Mail Subsidies and Steamship Subventions for fiscal year ending March 31, 1918, with traffic returns, etc., to December 31, 1918.-Hon. Mr. Maclean.

[Stage Direction]
Hon. Mr. MEIGHEN (Acting Minister of Justice) moved for leave to introduce Bill

No. 91 respecting disqualification of military defaulters.
Some hon. MEMBERS:: Explain.


Mr. MEIGHEN:: The class covered
by this Bill are known generally as military defaulters. They are comprised of those who failed in their military obligations under the Military Service Act. The subclasses are specifically defined. As to those, the Bill provides that they shall be disqualified in the following respects for a period of fifteen years: from holding any office under the Crown, from being members of Parliament or members of the Senate, and from voting at any Dominion election. The Bill provides that any of that class who have satisfied any -conviction properly obtained and punishment imposed by such conviction shall not be included therein, nor shall any who came in under the amnesty proclamation of August last, nor shall any one who having been apprehended actually served in the military forces after apprehension, and, any who subsequently satisfied the terms otf any legal conviction thereby (become relieved of the disqualification provided by the Act.


Sir SAM HUGHES:: Does this include all the defaulters under both the Department of Justice and the Militia Department? There are six classes, as the minister outlined the other day. Does this include the whole six?


Arthur Meighen: Yes.


[Stage Direction]
Motion agreed to, and Bill read the first time.


[Stage Direction]
Bill No. 87, respecting the Pollution of Navigable Waters.-Hon. Mr. Reid.

[Stage Direction]
(Questions answered orally are indicated by asterisks.)

Mr. PAPINEAU:: 1.	Have any leases for oil lands, in the western provinces, been issued since 1st January, 1917?
2.	If so, under what regulations and to whom?
3.	Has any application been made, lately, for special privileges on, or reservation of, oil lands in the western provinces, by any company?
4.	If such privileges and reservations have been made or are to be made, under what terms and to whom?
5.	Is it the intention of the Government, before granting such privileges and reservations to consult Parliament?


Hon. Mr. MEIGHEN:: 1.	Yes. 2,168 such leases issued since 1st January, 1917.
2.	Under the petroleum and natural gas regulations, a printed copy of which is attached. The preparation of a list of the names of the lessees would involve several days' work.
3.	A great many applications have been made for such privileges on or reservation of oil lands in the western provinces.
4.	No such special privileges have been granted.
5.	The Government will consult Parliament in all cases except where it acts on authority already granted by Parliament.
&ILITIA ACCOUNTS.


Mr. ROBB:: 1.	Has the Government passed an Order in Council under the War Measures Act, providing for the audit of the Militia accounts in Canada by an official of that department?
2.	Has the Auditor General been asked to accept the audit by the official of the Militia Department without receiving the usual accounts and evidence of payment required by the Statutes?
3.	Has the Government power under the War Measures Act to compel the Auditor General to accept an audit performed by an official over whom he has no control?
4.	Who is the official appointed by the said Order in Council? How long has he been in the employ of the Militia Department, what is his salary and what was his occupation or profession prior to his being employed by the Militia?
Major-General MEWBURN:
1.	P.C. 316, dated February 8, 1918, provides for the appointment of a general auditor for the Militia Department, responsible to the deputy minister. Previous to this date, the audit was carried out as a part of the work of the branch of the Accountant and Paymaster General.
2.	Under P.C. 1136, dated May 22, 1918, the General Auditor of the Militia Department was removed from the jurisdiction of that department and "made responsible to and under the control of the Auditor General." This step was taken after consultation with the late Auditor General, who has initialled the original Report to Privy Council. This was done in vierw of the tremendous expenditure of the Department of Militia and Defence under War Appropriation, and the provisions of the said Order in Council have been accepted by the present Auditor General as a temporary measure, until such time as the Militia Department comes back to its ordinary level. Under the provisions of P.C. 1136, all accounts are audited before payment by the representa-

tive of the Auditor General* thus safeguarding public funds to the greatest extent possible. The Auditor General still receives the usual accounts and evidence of payment. Previous to the passing of P.C. 1136, these accounts were paid by the Department of Militia and Defence and post-audit carried out by the Auditor General. Under the provisions of P.C. 1136, all accounts are audited before payment by the representative of the Auditor General.
3.	Yes-Answered by Nos. 1 and 2. The Auditor General was a party to the arrangement, and not compelled, as implied.
4.	Lieut.-Colonel D. F. Pidgeon joined the C.E.F. on August 10, 1914, as a lieutenant; was promoted to the rank of captain and served overseas 12 months, 9 months of which in France

Salary, $4,182.50, same as General Auditor Overseas-Paid as an officer, Canadian Expeditionary Force-Previous occupation, financial and real estate broker.
UNOPPOSED MOTIONS FOE PAPEES. Mr. LEMIEUX:
For a copy of all letters, telegrams and other papers regarding supplies purchased for the Yukon Telegraph Lines, during the fiscal year 1918-19, including copy of all tenders, the names of the tenderers and the amounts of each tender.


Mr. CHISHOLM:: For a copy of all telegrams, letters, petitions and other documents, exchanged between the Post Office Department and any person in Inverness county during 1918 and 1919, in any way referring to the mail contract for carrying the mails from Inverness Railway station to Margaree harbour, N.S.


Mr. LEMIEUX:: For a return showing the amounts paid for advertising, printing, etc., by the various departments of the Government during the fiscal years 1916, 1917, 1918 to the following newspapers:-The Brandford Expositor, The Woodstock Sentinel Review, The Stratford Beacon, The Kingston Whig, The Hamilton Times, The Toronto Globe, The Toronto Star, The Guelph Mercury, The Niagara Falls Review, The St. Catharines Journal, The Ingersoll Chronicle, The Orillia Times, The Belleville Ontario, The Simcoe Reformer, The Richmond Hill Liberal, The Acton Free Press, The Mitchell Recorder and the Owen Sound Sun.


THE PEACE TEEATY.
[Stage Direction]
On the Orders of the Day:
Mr. HUME CEONYN (London):: Mr. Speaker, I desire to ask the hon. the Acting Prime Minister (Sir Thomas White) what procedure -the Government purpose
[Major-General Mewbum.]
adopting for the consideration, and if necessary, for the ratification 'of the Peace Treaty the terms of which were brought to the attention of the House yesterday.


Sir THOMAS WHITE (Acting Prime Minister):: The signature of the Peace
Treaty is an executive Act. After signature by the parties to the Treaty, it will be submitted to Parliament for consideration and for legislative sanction. I understand that the Treaty provides for the deposit of the ratifications in Paris and that the Treaty becomes binding upon the powers as and from the date of the deposit of the ratification.


Mr. McKENZIE:: In reference to the
question raised by the hon. member for London (Mr. C'ronyn) do I understand the Acting Prime' Minister to say that this Parliament will have nothing to do with the ratification of the Treaty?


William Thomas White: I said the precise opposite. I stated that the signing of the Treaty was an executive Act but that after the Treaty had been signed by the parties to it, it would be submitted to this Parliament, as to other Parliaments of the Powers concerned, for consideration and ratification -otf the executive act of signing. I stated further that there was a provision made in the Treaty for the deposit of the ratification at Paris and that each Power would be deemed -to Ibe hound toy the treaty as and fromi the date of such deposit of the ratification.


Mr. JACOBS:: May I ask what would
happen should this Parliament refuse to ratify the treaty?


William Thomas White: Considering that it would be signed by the Prime Minister and by the accredited representatives of the Government, acting as plenipotentiaries I could not conceive that Parliament would refuse to ratify it. If it did, the usual constitutional consequences would follow-but that I do not at all apprehend. The ratification by this Parliament will be in the same manner as the ratification by the Imperial Parliament of the signature of its plenipotentiaries, by the Congress of the United States, and by the other legislative bodies concerned.
Hon. W. 6. FIELDING: Is the hon. gentleman correct in using the word " ratification"? Eatifieation is a part of the machinery without which a Treaty is not completed. I understand the hon. gentleman to say that this treaty will be com-

pleted without any ratification here. I suppose that he means that it will be submitted to this Parliament for approval or disapproval, if we so wish, but that whether it is approved or disapproved it is effective, and no ratification here is needed.


William Thomas White: I am afraid I
cannot agree ' with my hon. friend. Let me give a case in point. An agreement was entered into by the late Government of Canada with the Grand Trunk Pacific Railway Company and it was signed on behalf of the Government. It was afterwards submitted for the ratification to Parliament. It did not become' binding upon Canada until it was ratified by Parliament. Similarly, my hon. friend negotiated a treaty at Washington in 1911.	1 understand that was
signed by the hon. tnember (Mr. Fielding) and his colleagues, but it had not legislative effect until considered and approved, and it was not in that case approved by Parliament. I do not understand that the present case is different.
Mr. W. 8. FIELDING: My hon. friend, I submit, is mistaken. There was no treaty signed at Washington; but there was an agreement made which was subject to Parliamentary approval-not ratification; exchange of ratifications is a part of the machinery without which a treaty does not become effective.


Mr. SPEAKER:: Order. We are wandering into a discussion on the Orders of the Day.


Samuel Hughes: Might I ask a question of the Acting Prime Minister. If this Parliament does not ratify t-he treaty does the war begin again?


William Thomas White: My hon. friend is in good fettle; he might be able to start a new war.


PRICE OF OLEOMARGARINE.
[Stage Direction]
On the Orders of the Day:
Mr. A. B. McCOIG:: Mr. Speaker, there is a matter of extraordinary importance to the consuming public that I wish to draw to the attention of the Acting Minister of Trade and Commerce (Mr. Maclean). A report appears in yesterday's Toronto Globe in reference to the high cost of butter. An investigation was made by Dr. Hastings, medical health officer of the city of Toronto, who states that:
The demand for export butter at 80 cents per pound governs the price to the local consumer, and this demand has recently increased particularly in the English and United Slates
markets. On the other hand, Dr. Hastings can And no justification for the " enormously high price of oleomargarine."
In another part of the paper it states: Margarine, whidh has been selling in Great Britain at 25 cental a pound, is now 16 cents. Here the manufacturer's price is about 33 cents, with the dealers in some oases getting almost 50 cents.
And it wants to know why there should be this difference. We allow margarine to come into this country free of duty and if the manufacturers are extracting an unfair profit from the consumer an injustice is being inflicted upon the public and the matter is one that should receive the attention of the Government.


Edgar Nelson Rhodes: The hon. member is
hardly taking the proper course on the Orders of the Day. I assumed that he was going to ask a question of the Government. This would be the proper subject of a question to be placed upon the Order Paper.


Hon. A. K. MACLEAN (Acting Minister of Trade and Commerce):: I will endeavour to give my hon. friend (Mr. Me-Coig) a complete answer to-morrow. I am not in a position to give him what -he might -deem a satisfactory answer this afternoon.
I wish to repeat a statement that he has himself made, namely, that oleomargarine is on the free list.


CANADIAN REPRESENTATIVE AT WASHINGTON.
[Stage Direction]
On the Orders of the Day:
Rodolphe Lemieux: I notice in this morning's paper that the question of the representation of Canada at Washington was raised yesterday in the Imperial Parliament. The following question was asked by Mr. Arthur Murray:
Has -any communication yet -been received from the Canadian Government in regard to the announcement made in the Dominion House of Commons recently by the president of the Privy Council (Hon. Mr. Rowell) that a permanent Canadian representative at Washington its shortly to be appointed?
Col. Amery, Un-der-iSeoretary for the Colonies replied; " No."
Mr. (Murray:	Is the House to understand
that this proposed change has been arranged without consultation between the two governments?
-Col. Amery: I do not think the House should understand that. Undoubtedly when the matter is advanced to a further stage the Government will be consulted.
As the representative in Washington will have no ambassadorial powers but will act -simply as the Canadian agent, as our agent in Paris or in London acts, may I ask the

Government if it intends to submit to the Imperial authorities the name of the proposed agent and will they consult with them as regards the right of Canada to appoint such a representative?


Hon. Mr. ROWELL:: The Canadian representative -at Washington will be very much more than the Canadian agent. His status will be very different from the status of the Canadian representative in Paris or London. Therefore, there is consultation with the Imperial Government with reference to the appointment. I stated the other evening that confidential communications had been held between the Prime Minister of Canada and the Imperial Government in reference to this matter but that these were not yet concluded and that when they were the House would be advised of the whole purport of them.


HIGHWAY BETWEEN MONK STATION AND ST. PERPETUE.
[Stage Direction]
On the Orders of the Day being called:
Mr. J. FERNAND FAFARD (L'Islet) (Translation):: I would like to inquire from the hon. minister of Railways whether, he proposes building a carriage road between Monk Station and the main road to St. Perpetue.
Several times I applied to the hon. gentleman for the building of that road, the last time on January 4, 1919, and I have here his answer dated February 20th, in the following terms:
(Text.)
Dear Sir,-With reference to correspondence in connection with improvements at l'lslet, I beg to advise that it is the intention of the railway officials to have this work performed during the coming session, providing- satisfactory arrangements can be made.
Yours faithfully,
J. F. Fafard, Esq., L'Islet, P.Q.
G. A. Bell.
(Translation) It is to the knowledge of the hon. gentleman that such roads connecting stations with a main road have been built at the expense of the Government.
It is also to the knowledge of the hon. gentleman that the land adjoining the stations of the Transcontinental railway is the property of the Government.


Edgar Nelson Rhodes: Order. The hon. gentleman, as I understand, is putting a question of a purely local character. He has the machinery for placing his question upon the Order Paper, or when the Estimates of the minister come up for consideration.


Joseph-Fernand Fafard: It is also
to the knowledge. . .
Mr. .SPEAKER: Order.



SUPPLY.

[Stage Direction]
government .shipbuilding programme
-STATEMENT BY HON. MR. RALLANTYNE MINISTER OF MARINE
The House again in 'Committee of Supply, Mr. Boivin in the Chair.
Public Works-Marine Department-Government Shipbuilding Programme:-Amount required for the construction of vessel® in accordance with Government's programme-$30 000 -000.	.	(ii
Hon. CHARLES C. BALLANTYNE (Minister of Marine): Mr. Chairman, before we take up this, item in a general way, I think it would toe fitting for me to give to this House all the details that I possess in regard to the Government shipbuilding programme. A year ago I had the honour of introducing the Government's merchant marine shipbuilding policy. A great many changes have taken place since the armistice has been signed, and it seems to me to be an opportune time to furnish to this House all the information that I have on the subject for which the vote is now asked.
I think it would be well for us to look for a moment at the shipping conditions of the world, and particularly as they existed in Canada when the Government deemed it wise to embark on its shipbuilding policy. Up to about February or March, 1918, the Imperial Munitions Board were occupying all the vacant steel shipyards in Canada building ships for England. I believe that the Government of Great Britain is to be congratulated for its energy and foresight in not only having ships built to the fullest capacity of the immense shipyards of the United Kingdom, tout also for utilizing all the available yards in Canada.
But, Sir, when I became Minister of Marine I could not see what particular value the steel ships that were being built in Canada for England could be to our own country, and after considering the matter from every point of view I thought the time had come when Canada should have her own merchant marine. Therefore I had the honour and privilege of recommending to my colleagues in the Government that we should utilize our own yards to build up a national merchant marine, and, much as we admire the old country jand desire at all times to render her every assistance possible, more particularly when she is engaged in war, I con-

sider that we were doing not only our full duty to Canada, but also to the Empire when we took that course.
It will be remembered that there was an immense total loss of shipping at that time, about 15,000,000 gross tons, the war being at a very serious and critical stage, and the success of Great Britain and her Allies depending very largely on the extent of their merchant marine. So pressing was the need for tonnage that all Canadian ships under Canadian register and all ships plying in Canadian waters under British register were commandeered by the British Ministry of Shipping, a fact which left Canada devoid of a merchant marine.
At that time, Mr. Chairman, all of our Allies, with the exception of our neighbour to the south, were coming to me constantly to know if I would allow them to build ships in our yards1-I refer particularly to France and to Italy, and also to Norway, one of the neutral powers. I had to reply to the overtures made to me that the policy of the Canadian Government was to utilize to the fullest extent our own steel shipyards, and that therefore we could not look with favour upon building ships for them. It was not so much a matter of price. Many of our Allies' were willing to pay from $20 to $25 per ton more than this Government was paying for the ships it was having built under contract.
["With regard to\nfuture borrowings, the policy should be to borrow for shorter terms. No one can foresee what interest rates will be. My own view is that 'they are not likely to drop materially for a considerable time; I do not see how they can. What I have said is subject to this:\tin putting out loans\none has to consider the financing that has already been done and not have his loans in large amounts too close to the present time. Let me illustrate. Suppose the Dominion Government during the war had been fearful of the comparatively high interest rates and had resorted to short-date borrowing, which is all right for comparatively small amounts in times of high interest rates. And suppose the Minister of Finance had to face within the next five years, let us say, the raising of five, seven or ten hundred million dollars; that would be a very serious matter. The amounts expended in this war, the debt of Canada and the debts of all nations, are so vast that funding is not possible as it would be in normal times. One of the advantages of our situation is that our loans are distributed over five, ten, fifteen and twenty years. I know precisely what my hon. friend has in mind-that we shall have to pay high interest rates over a period of fifteen and twenty years. That is true in respect of certain of our loans. But I do not see what advantage it would be to us within the next five or ten years, having regard to the loans we have to meet before ten years are over, to be in a position to recall the other bonds, because the financial operations would not be possible to\n\nenable us to retire them and replace them with further issues at lower rates; it seems to me that the transactions are too great. I do not like, any more than my hon. friends, the idea that the Dominion has to pay that rate of interest over so long a period. But short-date borrowing is almost fatal in war time, because you get accumulations of debt ahead of you and when you need fresh money you are confronted with maturities coming due, and a very serious situation results."]
Samuel Hughes: Per ton?


Mr. BAULANTYNE:: 
Sir   S@: Are they fitted with cold storage?


Charles Colquhoun Ballantyne: Not yet, that matter is under consideration.


Samuel Hughes: I did not hear the minister mention the Midland Shipbuilding Company.


Charles Colquhoun Ballantyne: No orders has been placed with the Midland Shipbuilding Company-I will deal with that a little later.
The value of the contracts which have been placed is, in round figures, about $52,000,000. and up to the end of the present fiscal year $20,000,000 of that will have been paid- The item that we are asking the Committee to pass is for $30,000,000, which with the $20,000,000, constitutes, in round figures, the total amount of all the contracts, $52,691,450.


Rodolphe Lemieux: That is for the twenty-five ships?


Charles Colquhoun Ballantyne: No, for the forty-five ships; all that are under contract.
I stated in the House a year ago that it was the policy of the Government to utilize only existing s'teel shipyards. But there existed at Prince Rupert a large shiprepairing plant and floating dry dock, and considerable pressure was brought to bear upon the Government, especially as the war was proceeding at that time in a way that did not look favourable to us, and tonnage was very badly needed, to place some orders out there. I took the ground that the Government were not investing money in shipyards, but that if any firm would come along with the necessary capital the Government would be! willing to give them a share of their business. That accounts for the placing of orders for two ships of 8,100 tons at Prince Rupert
Victoria, B.C., likewise did not have a modern shipyard. The Victoria Machinery Depot had a small place there, and our Victoria friends, especially the late Premier
fMr. Ballantyne.]
Brewster, were very anxious that we should give the city of Victoria part of the Government business. We therefore placed an order with the Victoria Machinery Depot for two ships of 8,100 tons each
Enterprising capitalists of Halifax, Captain Norcross and R. M. Wolvin, said that they were prepared to put $5,000,000 into a modern shipyard there if the Government would give them some business. I shall not weary the Committee with an account of all the interviews that I had and of the requests that these gentlemen made and which the Government could not see their way clear to grant. They wanted us to allow them to bring in free of duty what plant they required; I told them we could not agree to do that. They also wanted a very large order for ships, as their capital expenditure was great; but I told them that all we could do would be to give them an order for four ships, which we have done. When that yard is fully completed- and it will be completed shortly, because the keels of two vessels have already been laid there-it will be one of the finest and best equipped shipyards in the country.


Mr. MURPHY:: What will be the cost of these four ships?


Charles Colquhoun Ballantyne: Two are 8,100 tons and two 10,500 tons. The price is $195 a ton.


Mr. DUFF:: Deadweight capacity, or
registered ton?


Charles Colquhoun Ballantyne: Deadweight. I will explain why we deviated from the policy announced a year ago that we were only going to keep existing yards going.


Mr. J. H. SINCLAIR:: What is the speed of those ships?


Charles Colquhoun Ballantyne: The speed of the 8,100-ton ships is ten knots sea speed; that of some of the smaller ships is eight knots and of others nine, and that of the 10,500-ton three-deck ships to be built at Halifax, will be thirteen knots. As regards the type of ships, after consultation with the technical officers of my department, we decided it was wise not to build too expensive a freight ship, but at the same time to make our ships as efficient as possible. And I am proud to state to the committee that in no other country in the world, not even in the Old Country, are any ships being built better than those which our Canadian shipyards have so far turned out for the Dominion Government.
I now wish to refer to the matter of price which ranges all the way from $180 to $215

per ton dead weight, and I hope hon. members will fully realize that when the Government commenced their shipbuilding programme a year ago, everything was at its height; labour was very high, the rate of wages was constantly increasing, as was the cost of boilers, engines, and all the auxiliary equipment that goes into a ship. I am pleased to state that the forty-five ships that we have under contract for the Da-minion Government are being built at a considerably lower cost than the ships on the vast programme of shipbuilding which the United States Emergency Fleet Corporation are carrying out. Their ships have cost considerably more than ours, notwithstanding the fact that they have turned out so far 555 steel ships.


Rodolphe Lemieux: What is approximately the difference per ton?


Charles Colquhoun Ballantyne: I do not like to say anything but what would be pleasant about our neighbours who are our allies and who have helped us in every way possible, but according to the information I have received, their price, taking all the ships they have ordered from the various shipyards, would be at least $25 per ton higher than the forty-five contracts we have entered into in Canada.


Samuel Hughes: Where do we get the steel plates?


Charles Colquhoun Ballantyne: From the United States. The other night the leader of the Opposition (Mr. McKenzie) made a statement in this House, and he never makes a statement unless he is reasonably sure of the facts. While I give him credit for sincerely believing that the statement he made was correct, if I read Hansard aright -I was not in the House at the time-he stated that the Canadian Government ships under contract cost 400 per cent more than* they had any right to cost, the comparison made by the hon. gentleman being between the pre-war price in England of $50 per ton and the prices the 'Canadian Government have made with the various shipyards throughout the country. The correction I wish to make is that the hon. member overlooked stating that his price was a pre-war price. The most reliable information I can get from England, Ireland and Scotland is that all of their yards are busy; that they are building ships rapidly for themselves, and that they are also building a certain number of ships for their Allies in Europe. Consequently, no one can get a firm price for ships over there. If any one in Canada wanted to build a ship of any size and
approached any of the Old Country yards, . he would be told that they would enter into a contract with him on a cost plus basis, but that they could not give him a firm price per ton. He would also be told that they could not make deliveries before at least the spring of 1920. In this connection, I might quote a well known shipbuilder, Sir G. B. Hunter, of the firm of Swan, Hunter, a firm distinguished for its shipbuilding. Sir G. B. Hunter, in an interview which was reported in the Newcastle Journal on April 6, 1919, stated that ships cost at present three times as much to build in England and Scotland as they did before the war. Therefore, if we take the hon. member's figure of $50 per ton, and if we take the well known and reliable authority which I have quoted, namely Sir G. B. Hunter, ships built in the United Kingdom at the present time would cost $150 per ton.


Daniel Duncan McKenzie: What I had in mind
was that the Government which preceded the one of which the minister is a member, were so slow in taking up a policy of shipbuilding that prices had gone up so much to the disadvantage of Canada.


Charles Colquhoun Ballantyne: " The hon. member surely does not think that at any time since war began, ships could be built for $50 per ton, either in the Old Country or Canada, and that is the point I am trying to clear up.
When the Minister of Public Works (Mr. Carvell) was making an able address in this House about shipbuilding, the hon. member for Guysborough (Mr. J. H. Sinclair) made a statement similar to that made by the hon. member (Mr. McKenzie). He said that Canadian Government ships were costing four times as much as they ought to cost. Therefore I want to make it clear to this Committee and to the country that those hon. gentlemen were referring to pre-war prices in making those comparisons.


John Howard Sinclair: The Financial Post was my authority for making the statement that ships are being built on the Clyde for $55 per ton. The contract price in Halifax is $200 per ton dead weight, which is approximately four times as much.


Charles Colquhoun Ballantyne: If the hon. member can give me the name of any firm on the Clyde that will build ships for $55 per ton the Canadian Government will be glad to give it a large contract. I do not know of any firm in the Old Country that would undertake to build ships at any such price,

although I give the hon. member credit for making a statement which he believed was accurate at the time. 1 merely want to clear this point up, because I do not want the public to think that, in order to build ships in Canada, we are compelled to pay $180 to $215 per ton when they could be built in the Old Country for $50 per ton.


William Duff: Has the minister made enquiries of large shipbuilding firms, and if so what prices has he received?


Charles Colquhoun Ballantyne: I have. I sent cablegrams to four different firms in order that the information which I am now giving might be accurate and up to date. It will interest hon. members to know that one of our great allies is having thirty wooden ships built in Canada at the present time at a price of $200 per ton dead weight, so that if $200 per ton is being paid for a wooden ship I do not think the Government have paid too high a price when it pays from $180 to $215 for steel ships.


William Duff: Where are those wooden ships being built?


Charles Colquhoun Ballantyne: At Victoria.


William Duff: We are building wooden ships in Nova Scotia for about $75 a ton dead weight.


Charles Colquhoun Ballantyne: The type of ship built at Victoria for $200 per ton would, I imagine, be entirely different from that of the ships being built in the Maritime Provinces for $75 per ton.


Rodolphe Lemieux: The ships are being built at Victoria, B.C., for the French Government?	*


Charles Colquhoun Ballantyne: Yes. I wish to explain why the Government found it necessary to pay British Columbia shipbuilders $10 per ton more than eastern shipbuilders. First of all, I endeavoured to place contracts with British Columbia shipbuilders at the eastern prices, but they pointed out. that the labour cost was $7 per ton more in British Columbia than in the East, and that freight rates were very much higher. After a great many interviews, extending over some months, the Government agreed to pay the British Columbia shipbuilders $10 per ton more than the eastern price for a similar type of ship. For instance, if an 8,100-ton ship was being built by Vickers of Montreal for $180 per ton, the price for a similar ship in the British Columbia yards would be $190 per ton.
There has been some criticism of myself, especially by the British Columbia ship-

builders, because I would not allow them to take foreign contracts. When the war was on, France, Norway, and Italy were urging us to allow ships to be built here for them. I would gladly have consented had we been able to get sufficient ship plates, marine engines, boilers, and the other necessary equipment for our own needs, and at the same time have a surplus for ships to be built on foreign accounts; but unfortunately, notwithstanding the fact that we had an agreement with the United States for 80,000 tons of plate; up to the time of the signing of the armistice we had only been able to get some 6,000 tons. So I could do nothing else than say to these gentlemen that Canada could not afford to delay her own shipbuilding programme by building ships on foreign account.
With regard to the slowness of the construction of some of our ships, I admit that the yards have taken very much longer than I anticipated, but the delay has been unavoidable owing to the shortage of skilled and unskilled labour, and the great difficulty in getting shipbuilding plate from the United States, as well as engines, boilers, and other equipment. The ships are coming along more rapidly now than when the war was on. Before I leave the subject, I might say that quite recently there has been a great demand for space. Our ships are going to be operated by the Canadian Government Merchant Marine Limited, and naturally manufacturers and firms who have large orders for shipment abroad halve been coming to the Marine Department to know whether or not they can get the tonnage. I have been approached, for instance, by the Dominion Coal Company, who told me that all their ships had been requisitioned by the British Minister of Shipping, and they wanted tonnage to send t*000,0(X) tons of coal to Montreal. They said that unless the Canadian Government could provide the tonnage they might have to close down their mines, which would be almost a catastrophe. The steel men, the pulp men, the sugar men and the general produce merchants all want to know what tonnage the Canadian Government can provide. The British ships that are plying from 'Canadian ports at the present time have seventy per cent of their available cargo space reserved for the British Minister of Shipping, which leaves only thirty per cent for the Canadian export trade.


Samuel Hughes: Are the Dominion Coal Company's ships on the British register?


Charles Colquhoun Ballantyne: Some of them are, and some are on the Canadian register.


Charles Murphy: Has the minister been able to meet the requirements of the Dominion Coal Company?


Charles Colquhoun Ballantyne: I did everything I could in that respect while I was in England last year. I have since sent many cables to the British Minister of Shipping. The Canadian High Commissioner, Sir George Foster, and Mr. Lloyd Harris have all done their very best, but I am sorry to say they have been unable to get the tonnage. To illustrate the great necessity of our having ships at the present time let me read a cable received by the Canadian Manufacturers' Association from Mr. R. J. Young of the Canadian Mission in London, under date of March 1, and which was handed to me only yesterday:
Our work here practically futile unless additional ocean space can be secured. Commercial shipments Canada to Great Britain now three times quantity space available, and rate of freight on many lines practically prohibitive, amounting in many instances to seventy-five per cent invoice value. Steamship companies in many instances charging double published rate.
He goes on to ask what assistance I can give, and concludes, addressing the Canadian Manufacturers' Association:
You may make statement that unless the matter of shipping is immediately attended to Canadian tr 'e will suffer tremendous loss.


Samuel Hughes: If some of the Dominion Coal Company's ships are on Canadian register, by what right can the British Admiralty requisition them?


Charles Colquhoun Ballantyne: Before a Canadian registered ship can be so requisitioned, application has to be made to the Canadian Government through the Minister of Marine. When the war was on and tonnage was required to transport munitions and foodstuffs and soldiers across the seas, the Canadian Government could not refuse to release the ships on Canadian register.


Samuel Hughes: Why not get them back now?


Charles Colquhoun Ballantyne: Of course, we have no authority over the ships on the British register.


Mr. GAUTHIER:: Did I understand the minister to say that we are importing all our steel plate from the United States?


Charles Colquhoun Ballantyne: All the plate we have used on our ships to date has been imported from the United States. The plate mill at, Sydney is not yet ready.


Louis Joseph Gauthier: I asked the question because I was under the impression that, pursuant to the Order in Council passed in March, 1918, the Canadian Government had entered into a contract with the Dominion Steel Corporation for steel plates.


Charles Colquhoun Ballantyne: I shall come to that in a moment. I think it will interest the House to know what Australia is doing in the matter of shipbuilding. She is not only building her own merchant marine, but war ships too, so their Minister of the Naval Service, Sir Joseph Cook, informed me when I was in London. Australia has erected during the war a plate mill. Besides the ships Australia is now building, she bought ten ships in 1915 or 1916 and these have proved to be very profitable. They are now building twenty ships more. The Acting Minister of the Australian navy, Mr. Poynton, announced on April 10th that the Australian Government would remain in the shipping business and would continue its shipbuilding programme. He said that their present programme contemplated the building of twenty steel ships.


Rodolphe Lemieux: And war ships as well?


Charles Colquhoun Ballantyne: Yes. I now come to the policy of the Government for the future. I have already stated that we have forty-five ships under contract. There are at th'e present time certain yards in Canada that require business. Berths are becoming vacant, and many more will become vacant in the very near future. The Government has not finally decided how many additional ships they will order but I will bring down in my Supplementary Estimates the amount that the Government will think it wise to ask approval for. The sum of $30,000,000 that I am dealing with now is to complete the contracts that we have already let, but in view of the fact that there is a great demand for ships and also that we could sell some of our ships under contract at the present time if the Government deemed it wise to do so, we are not going to discontinue shipbuilding for the moment. We realize that there are
30,000	men engaged in the shipyards throughout Canada, from Prince Rupert to Halifax, and there are fully 10,000 more engaged in the industry of making engines, boilers, etc., and to cause 40,000 men to be out of employment at this time would be rather a dangerous thing to do. It is therefore not the intention of the 'Government to cease their shipbuilding programme now. We are going to order additional ships, at least to keep the yards that are requiring

work busy throughout the balance of 1919, and probably for a few months in 1920.


Samuel Hughes: What class of men are these shipbuilders? Are they British or Canadian people, or are they the foreign element that have been cursing us?


Charles Colquhoun Ballantyne: The hon. member
must realize that I have no way of knowing the nationality of these 30,000 men, but I should imagine that a very large majority of them are Canadians or British subjects. I was told this morning by one shipbuilder, from the Halifax shipyards, who employs a thousand men, and will shortly be employing two thousand, that 29 per cent of his total staff are returned soldiers.


Samuel Hughes: Hear, hear.


Charles Colquhoun Ballantyne: There is such a
scarcity of work that it would not be wise on the part of the Government to discontinue at once their shipbuilding programme.


Rodolphe Lemieux: As regards Vickers in
Montreal, I may say that 95 per cent, if not 99 per cent, are full fledged Canadian or British subjects.
Mr. BALLANTYNE": I do not want this House or the shipbuilders to think that the Government can go on forever ordering ships, because there must be a limit to the number of ships that the Canadian Government can use, and we are getting very near to that point. So that when I say that it is the intention of the Government, subject ^ to the approval of Parliament, to order more ships, the shipbuilders must not expect that there will be many more orders to follow, and they must therefore look for orders for their shipyards in the same way as any other industry in the country would.
There is no protection whatever given to the shipbuilders in the way of duty and bonus, and when the yards of the United Kingdom are free a year and a half hence to take Orders, it will be most difficult for the Canadian shipbuilder to compete unless some form of assistance is given by the Government. What that form of assistance will be has not yet been determined, but between now and the next session of the House we hope to have a policy ready to present to Parliament.


Charles Murphy: Will that mean more bonuses?


Charles Colquhoun Ballantyne: I said a moment ago that the Government had not decided what form of aid should be given to the shipbuilders. The matter has not been

considered by the Government, but naturally when the shipyards complete the building of the ships that are ordered by the Government now, and a few more that will be ordered, it will be a problem that the Government will have to deal with, as to whether they will let these shipyards go out of existence altogether or give them a fair amount of protection the same as other Canadian industries are enjoying and have been enjoying for some years. That is all I wish to say on the shipbuilding policy and programme of the Government.
But I want to say something in reference to ship plate contracts. Over a year ago the Government entered into a contract for
250,000	tons of ship plates at $4.15 per hundred pounds based on the price of steel billets at $25.50, and as the price of steel billets would go down, so would the price of ship plates. From time to time the Government will place their auditors in the steel company's plant in order to check up their costs. The total amount of plate tonnage that we contracted for was 250,000 tons. What caused the Government to give this contract was the scarcity and the impossibility of getting ship plates from our neighbours to the south in order to carry on our shipbuilding programme. No one at that time could foresee the end of the war. It might be a year or more before the conclusion of hostilities, and when a country is at war, as Canada was, it is necessary to prepare for an indefinite continuance of war conditions. The shipyards at that time were paying for plate all the way from 4 cents a pound up to 10 cents. The ruling price in the United States, outside of the plates required for the Government ships, was from 4 to 54 cents. I called into competition the great United States steel companies, besides inviting all the steel companies in Canada to tender, and the best price I could get was $4.15, the United States steel price being 4i cents per lb. Since the letting of this contract the armistice has been signed, and the price of steel plates has dropped to 2J cents in the United States and may possibly go lower. I therefore recently interviewed the officials of the steel company and pointed out to them that this was a war contract that we had entered into with them, and that in view of the price of steel plates -having declined so much in the United States, and for other reasons, I wanted to negotiate with them for a modification of the existing contract. I met the President and the Vice-president of the Dominion Steel Corporation, who could not have met me in a

more broad and patriotic spirit than they did; and while they said that they were sorry to lose such a contract if they had to, they were prepared to make any modifications that I, as a responsible minister would care to propose with the approval of the Government. These negotiations are being carried on at present, and the contract will either be modified or be entirely cancelled. The Government have not yet got the necessary information before them to decide what action they will take, but I am free to state now that we can modify the contract or, if we prefer, as they have met us in a very broad spirit, we can cancel it.


Rodolphe Lemieux: Is there a clause to that
effect in the contract?
*


Charles Colquhoun Ballantyne: No.


Louis Joseph Gauthier: Did the Dominion Steel Company have all their plant erected?


Charles Colquhoun Ballantyne: The Dominion Steel Corporation have their plant partially up. There is no machinery or plant in it at all, and it is very far from completion. I understand it is only barely started.


Louis Joseph Gauthier: The Order in Council of 26th March 1918, clause (j) reads:
That all the machinery, plant and material of whatsoever nature or kind refined in the construction of the necessary mill, power facilities, steel making equipment, etc.to produce the steel plates covered by this proposal, shall be admitted into Canada free of all customs duties.


Charles Colquhoun Ballantyne: I was in negotiation with the president and the vice-president only as late as yesterday and they inform me that they have not brought any plant or machinery from the United States.


William Duff: The minister informed us
earlier in his remarks that contracts had been entered into with different shipyards at from $180 to $215 a ton. I presume this price was made in view of the fact that either the shipyards or the Government would have to pay to the Dominion Steel Company or other manufacturers of steel $4.15 a hundred pounds. If, as the hon. gentleman has just told us, they make a new contract with the Dominion Steel Company, or if the steel company modifies their contract to meet American competition at $2.25, will the Government pay the shipbuilders $215 per ton dead weight for these ships?


Charles Colquhoun Ballantyne: 

The Deputy Minister of Marine and Fisheries, Mr. Johnston, and the Deputy Minister of Trade and Commerce, Mr. O'Hara, will consult as often as necessary with the general manager of the Government ships in regard to what cargoes should be moved because there is more cargo available than the Government has ships to carry. A-s these ships are built for Canada alone, Mr. Hanna understands full well that they are not to be used in any foreign trade if there is business available in -Canada. I am sorry to have taken up so much of the time of -the House but if there is any further information that any hon. member wants I will be very glad to furnish it.


Sir HERBERT AMES:: ils it the present intention of the Government to retain in its service -these 45 ships and such additional ships as may be built or, inasmuch ps the work is largely for the purpose of giving employment, is it intended to sell some of these ships and build others?


Charles Colquhoun Ballantyne: That would depend altogether on the business offered. At the present time it would not be wise for the Government to sell any of their ships especially those that are ready to go into .commission now. I had an offer from a New York firm to-day at $190 per ton which I have refused. It may be possible that some of the ships will not be completed until a later date and if we find the demand for ships and the volume of business falling off -the Government might possibly sell some of the ships.
Sir -SAM HUGHES: -Some time ago the British Government, I understand, had a number of trawlers constructed in Canada which trawlers were sold. Inasmuch as the fishing business is only in its infancy in Canada might I ask the minister if he has considered the advisability of the Government, possibly not now but later on, assisting Canadian corporations in the construction of trawlers in Government yards, or under some other system, so that we may have our own fleet of trawlers engaged in the fishing industry in this country -with pcean ships to convey the products to the nations of the world?


Charles Colquhoun Ballantyne: The hon. member
(Sir Sam 'Hughes) knows as well as I do that of the trawders and drifters built in this country only 6 were built for Canada. These trawders and drifters were built probably more for war purposes than anything else. A large number of trawlers and drifters, which some people think belong to the Canadian Government, are at Liver-
pool at the present time. The British Government have sold some and they might possibly sell more. The Canadian Government have only six trawlers on hand for the time being.


Samuel Hughes: Why not assist in developing that trade by encouraging a corporation here to go into the business? Would it not be well for the Government to assist them in building ships?


Charles Colquhoun Ballantyne: There would never
be any demand for trawders except by fishermen, and I am quite sure that they would not pay the price of these expensive war trawlers. The sum they would want to pay would be so small that no one could build a similar type of trawler for it. I hope our friends in Canada will build the type of trawler that our fishermen need and at a price which they can pay.


Mr. J. E. ARMSTRONG:: As the Government railways are under the control of the Railway Commission as to rates, tolls and tariff agreements, is it the intention of the Government to place the ships under the same commission in regard to rates and tolls?


Charles Colquhoun Ballantyne: That would be a matter for Mr. D. B. Hanna and his board of directors- to consider more than it would be a question for the Government. It would be a very difficult problem for any Government to undertake to control rates for ocean traffic. But if it is at all feasible, the Government wmuld be willing to join in with the others.


Joseph Elijah Armstrong: I might call the minister's attention to the fact that I received to-day from the United States Shipping Board a complete statement of all the rates that they have made for their ships going out to all foreign ports. They have hundreds of different rates and they have tariff agreements and such things in connection with shipping.


Charles Colquhoun Ballantyne: This is a little different from the statement in a newspaper article that I have before me. I did not want to take up the time of the House, but if it will bear with me for a moment I will just refer to it. Mr. Hurley, the chairman of the United States Shipping Board, says that they have built 555 ocean-going steel ships, that they have contracts for 1,336 similar vessels yet to be built, and that when the programme is finished they will have 16,732,700 tons of shipping. Mr. Hurley's proposal, which he is going to submit

to the American Congress, is that the United States Government shall sell these ships to private persons. Mr. Hurley goes so far as to say that he is willing to recommend to the American Government that they be sold, not at the cost of construction to the Government, hut at the cost of construction at the time the sale was made.
He also, of course, states that he hopes the American Government will he able to control rates; but I do not see how they can very well do so. He further states that they are going to set aside the large sum of $15,000,000 for what he calls a Merchant Marine Development Fund, so that if any of their ships are on a trade route that does not prove to toe profitable, the American Government will come to their aid. He also states that the United States is striving to be the leading maritime nation of the world; and consequently we must recognize the keen competition that we are going to have from the States.


Mr. GERVAIS:: Has the Government any ships under construction at Sorel; and if not, why not? The yards have many facilities for ship construction; the necessary skilled workmen are available, and as the Government seems to be in a hurry to build ships, why not take advantage of the Sorel yards?


Charles Colquhoun Ballantyne: Sorel has no shipyard that could build the type of ship we have been ordering. That was the reason we could not place any orders there.


Joseph-Charles-Théodore Gervais: Have not the Government in the past built at Sorel ships three or four hundred feet long?


Charles Colquhoun Ballantyne: The Government
have not built any ships at Sorel equal to the tonnage of the ships I have just referred to.


Mr. T. FOSTER:: How many orders have been placed in Toronto, and have the Poison Company been given any?


Charles Colquhoun Ballantyne: The Government
have not placed any orders with any of the Toronto shipyards, for the very good reason that the two shipyards there had their berths all occupied either by ships they were building for the Norwegian Government before our ship-building programme was undertaken, or by ships they were building for Canadian register. I know they have berths vacant now, but whether the Government will be able to place any orders with them or not will depend on the amount that I bring down in my Supplementary Esti-
141 i
mates, and the approval of the House thereto.


John Howard Sinclair: I would like to get information on two points. I understand from the minister that he does not intend to carry out the proposal made in the report of the Marine and Fisheries Department. In that report at page 15 I find that the Government puiposed *o build annually
200,000	tons of merchant shipping at an estimated cost of $40,000,000 to $50,000,000. The minister to-day does not seem to hold the same view, because, if I understand him correctly, he says that when the present orders are filled, the shipbuilders will have to look out for orders elsewhere-I would like him to explain if there is really a change in the policy of the Government in that regard. I quite understand that when this policy was inaugurated ships were very scarce and the policy was justified on account of the war. The criticism of my hon. friend (the leader of the Opposition) is quite pertinent, however, when he says that the Government were very slow, that they allowed three or four years to elapse before they did anything, and then when prices were almost as high as they ever will be and when the war was nearly over they embarked on the shipbuilding programme. When this report was issued I understand the war was over, but in it I find, as I have said, that there is a proposal to go on with this shipbuilding programme.
The minister has told us that the programme is justified in order to afford ocean freight facilities for our railway system. We are undertaking the management of an enormous railway system, and of course we hope to have a great deal of traffic for export to deliver at seaboard. But I think the minister has undertaken to build the wrong class of ships, if he expects them to make connections with the National Railway system- He mentioned that the Government were following the policy of the Canadian Pacific Railway Company. That company has never embarked on the building of tramp vessels. It has built liners that make regular trips, connect with its railway system, and undertake to route goods to certain places and to deliver them on certain dates. That does not seem to be what my hon. friend is doing. He is building a large fleet of slow tramp vessels that are not suitable, and never will be suitable, for that class of work. He tells us that the speed of a certain class is 8 knots, of another class 11 knots, and of the highest class only 13 knots. Well, my hon. friend


Mr. STEVENS:: The statement of the
eminent authority quoted by my hon. friend is that the British yards are booked for two years and that the contracts on which they are working are on a cost plus ten per cent basis. How, therefore, can my hon. friend say in the same breath that the cost is $115 a ton?
iMr. J. H. 1SH1NICL1AH1B: The hon. gentleman is quite correct. We must make that allowance. We cannot produce ships at that rate in Canada. My hon. friend is not able to show that we can logically go on with the building of ships in Canada at the price we are now paying. Of course, we may be able to do it with Government assistance; that is how we are doing it now. But we could not do it without that Government assistance.
This programme is not a shipbuilding programme at all; it is a ship-owning programme. The Government is ordering ships at practically $200 a ton and they are bound to lose part of the money by the time they get through. If the Government arrived at some policy that would
enable private' capital to build the ships, they would be doing something worth while for Canada; but when the Government stop pouring out their money, the shipbuilding will stop. My hon. friend hinted a while ago that the Government did not intend to go very long on this policy of building ships and that the shipbuilders would have to look out for themselves. Well, that is a very poor prospect for any person who wants to put his money in a shipyard. If the Government really want to assist shipbuilding, what they should do is not to buy tramp vessels at enormous prices, but find some means by which the Canadian investor can put his own money into shipbuilding and compete successfully in that business with the outside world.
The minister is simply buying ships at a very high price, a price that will enable any builder to build them for him, but he is not doing anything to make it possible later on for a Canadian to build ships himself and to enable the Canadian people to become maritime ship-owning people. That is really a matter that the Government ought to tackle. The shipbuilding efforts of the Government have so far not been very successful. The trawlers, about which the hon. member for Victoria (Sir Sam Hughes) spoke a few minutes ago, were built in the yards of Vickers, and Poison's.


Mr. BUTTS:: Did I understand the hon. member to say that the Canadian Pacific do not own or did not build tramp steamers?


John Howard Sinclair: No, I did not say that. I said that the Canadian Pacific were building a different line of vessels altogether that were capable of carrying their freight from their railway terminals to the markets of the world.


Robert Hamilton Butts: What I understood the hon. member to say was that the Canadian Pacific does not own any tramp steamer or did not build any.


John Howard Sinclair: The Canadian
Pacific, I understand, never owned tramp steamers as such. They have some old passenger steamers which they are using for carrying freight, but they are not in the tramp steamer business.
I was referring to trawlers that were built by the present Administration in connection with the war. I have been looking over the accounts for the construction of those trawlers, which accounts any hon. member can find in the room where the Public Accounts Committee meets, and I find that the seven trawlers that were sold at

Halifax recently cost $704,955.51. It would appear from the information that we get from questions answered by the minister that they all had to undergo repairs very shortly after they were built; that they were built in such a haphazard way that they were unseaworthy. According to the Public Accounts, $134,917.22 was expended in repairs. Those trawlers were sold a few weeks ago.


Charles Colquhoun Ballantyne: I do not wish to
curtail the discussion in any way, but the hon. member is referring to trawlers which were built for the British Government, and which have nothing to do with the subject under consideration.


John Howard Sinclair: They may have
been built nominally for the British Government, but they were really built for the Canadian Government. The Canadian Government paid for them and they appear in the Canadian Government accounts which we are now examining in the Public Accounts Committee, so that I think I have a right to refer to them. I find those trawlers were sold for $270,000. They cost including repairs $839,872.73, so that they were sold at a loss to the country of $569,872.73. The extraordinary thing to me is that the minister or somebody in the Department of Marine and Fisheries did not think of utilizing those trawlers on the coast for fishing purposes. The price at which they were sold is a mere bagatelle compared with what they cost, and it would surely have been profitable for some enterprising Canadian to use them on our coasts in developing our great fishing industry. I find also that 65 per cent has .been allowed Vickersby the minister for what are called overhead charges. I am not very familiar with manufacturing, and I am not going to say that that is an extortionate rate, because I am not sure, but it looks large to me. For example, I find, for labour in connection with the construction of those trawlers in Vickers' yard in Montreal, an account dated August 29, 1917, amounting to $10,790.86. The builder is allowed to add 65 per cent to that for overhead charges, or $7,014.08, making a total of $17,804.94. Sixty-five per cent looks large to me for overhead charges, and has the appearance of profiteering. But this account is certified that the prices charged are fair and just, signed by Mr. James A. Wilson, Director of Stores. Another certificate reads:
I hereby certify that the prices are according to contract.
(Signed) L. J. Beausoleil,
Chief Accountant.
It appears, therefore, that the minister must have made a contract by which he allowed Vickers Limited to charge an overhead charge of 65 per cent in addition to the cost of labour. Take another account:
War appropriation vote-6 steel trawlers.
Labour	$5,491.23
Commission,	65 per cent	 3,569.30'
Total	  $9,060.53
I should like the minister, if he does me the honour at any time of replying, to explain to the Committee if he regards that 65 per cent overhead charge as reasonable.
Last night some very serious charges were made against the Department of Naval Affairs by the hon. member for Lunenburg (Mr. Duff). They were so serious that the leader of the Government (Sir Thomas White) decided that he would not go on any further with the estimate, but would give an opportunity 'to the Minister of Marine and Fisheries (Mr. Ballantyne) to answer the hon. member for Lunenburg.


William Thomas White: My hon. friend is not quite correct in his statement. I did not say that it was in consequence of the seriousness of the charges made by the hon. member for Lunenburg that we would not proceed further with the Bill. I stated that I would direct the attention of the Minister of Marine and Fisheries to the speech of the hon. member for Lunenburg and that the minister would make a reply at a convenient time upon his estimates.


John Howard Sinclair: The Committee were told last night that this was a matter that would come better from the Minister of Naval Affairs, and that an opportunity would be given to-day to discuss this very [DOT]important matter. I was surprised that the Minister of Naval Affairs took his seat without making any reference whatever to the serious charges brought before the Committee last night by the hon. member. There were charges of incompetence, of extravagance, of injustice in regard to the employment and handling of men, and although some of them were very serious charges no reply to them has yet come from the Minister of Naval Affairs. We were told that a certain warship called the Lady Evelyn was well equippeu and well officered and was in the vicinity of a German submarine at the time the latter was sinking fishing vessels off the coast of Nova Scotia.
But instead of being employed, as she was intended to he employed, in protecting the vessels and the fishermen from the German submarine, she was sent to the Magdalen Islands with half a dozen lead

pencils and some packages of paper. I believe it is true that the log of the Lady Evelyn shows that on the very day the German submarine was sinking Nova
Scotia ships off Ganso the ILady Evelyn was within 80 miles of 'the point where the submarine was operating.


Charles Colquhoun Ballantyne: The item under discussion is a vote of $30,000,000 for the building of the Government merchant marine.
I am sorry that an engagement prevented me from being in the House last night when the hon. member for Lunenburg made his long list of charges in regard to naval affairs. II have not had time to read those charges yet, but I shall do so at the first opportunity, and when the Naval Estimates are under consideration I shall reply to them. I think, Mr. Chairman, the hon. gentleman should confine his remarks to the item before us, which has to do with marine, and not with naval affairs.


John Howard Sinclair: I had no knowledge of the minister's intentions. I had supposed that in his speech he would deal with both naval and marine affairs. I was very much surprised that the minister made no reply at all to the charges of the hon. member for Lunenburg. When the minister interrupted, I was pointing out that the Lady Evelyn was in the vicinity at the time-


The CHAIRMAN:: Order. The minister
has risen to a point of order.


John Howard Sinclair: I had only half
finished my sentence when the minister interrupted me. With regard to the shipbuilding programme of the Government, I have no doubt whatever that the ships we haVe built have cost us altogether too much money. Furthermore, I have no doubt that the situation is very largely due to our tariff policy, which makes it impossible for us to build ships in Canada at a price to compete with the ships built on the Clyde and other points in Great Britain. There may be other factors. The cost of labour, for instance, is a very important item, but that cost has gone up very much in Great Britain during the last year or two. I am told that it is ninety per cent higher in Great Britain than what it was two or three years ago, so the chances are that the cost of labour in Great Britain and Canada will come to be about the same. I think the Canadian workman can do just as much in a day as the British workman, and perhaps more. Our great handicap is our high protective tariff. Something could be done to relieve the situation by
bounties, and bounties have been granted in other countries. Germany and France have both given bounties to shipbuilding. France, indeed, paid bounties not only on the building of ships, but on the running of the ships after they were built. French ships a few years ago, in order to help them compete with British ships built in a free trade country, were paid so much a mile for every voyage made, and we had the ridiculous situation of French captains steering the most crooked course in order to make the longest possible voyage. During all this time Great Britain has held her own, because she has acted on the principle that the cost of the material that goes into the building of the ship is the main thing, and that ships can be built cheap only in a free trade country. The difference between Great Britain and Canada in the cost of the material is enormous. The Financial Post says:
At present, ships built in Canada are costing about double what they cost in the United Kingdom. This its due to the high cost of material which, in turn, is due to the high cost of labour mainly.
Steel plates have been available to buiders in Great Britain at a price of approximately, fifty-five dollars a ton. Compare that with the following schedule, showing the delivered cost of steel per long ton from Pittsburg and Chicago to different points in Canada:
Cost per
Prom Pittsburgh to	long ton.
Vancouver, Victoria and Prince
Rupert	$102.25
Port Arthur	 89.37
Toronto	 74.84
Collingwood		80.19
Montreal	 96.89
Three Rivers	 u	 81.87
Quebec	 81.87
Halifax	 84.67
If the man in Vancouver has to pay $102.25 a ton for the plates which the British shipbuilder can get for $55 a ton, how can his ship compete with the ship built in England ? The economic law is very simple. The British and Canadian .ship are both competing for the same business.


Mr. CURRIE:: The hon. member quoted $55 a ton as the British price. That was the pre-war price of plates in Britain. In quoting the American prices, the hon. member gave the war price. Every one knows that during the war the cost of building plates in Britain was greater than in the United States, for Britain was buying its plates from the United States.


John Howard Sinclair: My hon. friend .is mistaken. These are the only figures I have. This article says that steel

plates have been available to builders in Great Britain at approximately .155 a ton. If that means anything, it means they ar? available now to builders in Great Britain at that price-


John Allister Currie: A loaf of bread in London costs the workman 25 per cent less than the Ottawa workman has to pay. How does the hon. member account for that!


John Howard Sinclair: 1 quite understand that prices vary from time to time, but they have not been going down very much so far. I admit there has been a slight decrease in United States prices- I was saying that the economic law is very simple. A ship -I am speaking of freight vessels-that is built in Halifax or Quebec at $200 a ton cannot possible compete with the ship that is built on the Clyde or the Humber at $100 a ton. If there is a cargo of wheat to carry from River Platte to Liverpool both these ships have a chance at the business, and the ship that costs the less will in the end beat the other. If the Minister of Marine intends to do anything permanent and satisfactory in the way of establishing Canada as a ship-owning country he must adopt a low tariff policy. Give the ship-holder of Canada a fair chance and he will fight his way and win.


Charles Colquhoun Ballantyne: It is rather difficult for me to follow the hon. member. He refers to the Government merchant marine ships as tramp ships. If these ships are tramp ships, then all cargo vessels that ply the various waters are also tramp ships. The hon. member goes on to say that unless a ship is a passenger ship she cannot make time from one port to another. For the life of me, I cannot see why a ship, we will say of eleven knots sea speed, leaving the port of Montreal for Liverpool should not make her schedule time just the same as a passenger ship can. My hon. friend is a business man and he realizes that cargo ships are necessarily for carrying cargoes, and that it would not be an economical policy for the Government to build palatial passenger vessels to carry the cargoes that these ships are designed to carry. He goes on to say that there is no difference between the freight ships built in the United States, in England, or in Canada. He must know that there is a vast difference in the design, speed and types of ships, just as there is in the various kinds of automobiles that are made.
I cannot understand the hon. member when he classes all freight ships together, as regards cost and design. He is at a loss to 
know what particular use the Government are going to make of their merchant marine ships to co-operate with the railways, and suggests that instead of having these freight ships we should have passenger ships plying on the various oceans. Every one knows that a passenger ship has not as much available space for cargo as a cargo ship, and therefore the policy of the Government is a sound business policy. These ships were never designed to carry passengers at all, but were designed and are being built to carry cargoes. They are what the Canadian National Railway Company wants, because the government ships will carry freight from the Orient to Vancouver, and the Canadian National Railway System will carry the freight to whatever point in Canada it may be destined for.


John Howard Sinclair: Will the Canadian Government ships carry cargo at current market rates?


Charles Colquhoun Ballantyne: Rates are very high and profitable now, but as market rates drop it would not be supposed that the general manager of the steamship company for the Government would ask for higher rates than those ruling at the time. These ships are being built in order that the people of Canada and the Government may control the freight from the time that it leaves the port from which it is shipped to the time it reaches its destination in Canada, and they will carry export cargoes from mine, field, and forest, and from our industries here. The United States Government have put a ban on the export of wheat from the ports of Baltimore,New York, and Boston. What would this Government do to carry the wheat of our great western prairies if we had not the ships we had now? I really cannot follow the hon. member's reasoning at all. Cargo ships are built for the very purpose of carrying freight, and the Government shipbuilding programme does not include a passenger service. Whether we shall build passenger ships and have them ply on the Pacific and Atlantic is a subject that has not yet engaged the attention of the Government, but I may say that the ships we have built are modern up-to-date cargo ships, and I do not think they should be referred to as ordinary tramp ships. They are built for the purposes of the trade of Canada and to assist the Canadian National Railways, and I am sure the majority of the members of this House will support the Government policy.


Mr. MICHAEL CLARK:: I am sure that the Committee will agree with me unanimously when I express my own pleasure at seeing the hon. minister (Mr. Ballanlyne) back in his seat after a very serious illness.
. Some hon. MEMBERS: Hear, hear.


Michael Clark: I want to say just a few words upon this part of the Government's programme and I want those words to be words of moderation. I suppose that shipbuilding in this country was undertaken under the pressure of war time, and as the war is over I trust I shall keep within the bounds of moderation when I express the hope that the Government will very carefully consider this business before they give a very wide extension to it. I was very much interested and edified by the remarks of my hon. friend from Guysborough with regard to the operation of tariffs in relation to shipbuilding. As a matter of fact this shipbuilding programme of the Government is only one more illustration of the extraordinary things which people do when they are under a protective tariff. As my hon. friend indicated, we in Canada are under a very high protective tariff-not the fault of either party. With the exception of the war-time addition to the tariff, the present tariff of Canada was a bequest to the present Government from the previous government. I do not think that is capable of successful contradiction. There has been practically no change, except for war-time additions, from the tariff which prevailed practically from 1896 to 1911. If one comes to think of it, it really seems a ridiculous thing to want to build ships and do commerce at sea under high protective tariff, because a tariff is to prevent the taking of goods into your country, and when a ship goes across the sea with a cargo from Canada, it can only do successful business by bringing back a cargo. So that there is an absolute incompatibility between high tariffs and successful shipping. They do not go on together in the world to any great extent. If you make your tariff high enough you may meed penitentiaries and jails and all sorts of institutions within your country, but you will not need many ships, and if you build them you will not be able to use them. That is not only a matter of sound economic study, as my bon. friend from Guysborough (Mr. Sinclair) has indicated, but it is a matter of history.
There has only been one great shipping country in the world and that has been the
United Kingdom of Great Britain and Ireland under free trade. I promised to use the language of moderation and perhaps I am putting that a little too absolutely, but how near it is to the truth will be brought home to every one in this Committee when we reflect that before the war sixty per cent of the ships of the entire world were being built by and were owned by Great Britain; with her two little islands which occupy less than half the area of the province of Alberta. In the face of that single fact, I think it is scarcely the language of exaggeration to say that there has only been one great shipping country in the world. We hear sometimes about Germany being a competitor with Great Britain in shipping before the war. Before the war more work was being turned out on the Clyde than in the whole German Empire. Germany, to do the work she did do, had to adopt free trade up to a certain point because everybody knows who knows anything about this question that Germany for years was allowing in free of duty all articles entering into the building of ships. For that reason the Committee will understand why I feel that I should be just a little cautious in advising the Government to Embark upon a very large shipbuilding enterprise in Canada and a little cautious about supporting them if they do.
But, as I say, this thing was done under the pressure of war time and from that point of view I should desire to make my criticism of the policy as moderate as possible, especially having regard to the fact that the minister has been suffering from a very serious illness. However, I should not be doing my duty to the Government or the country if I did not say that I do not believe that under her present system of tariffs Canada can compete for one moment with the Old Country in shipbuilding. I do not believe it is a possibility.
I am afraid the Government made a mistake in taking this work out of the hands of the Imperial Munitions Board. We are all familiar with what has been stated openly in the public press about that, and I fear that unless we have a very careful contradiction of these statements we will have to admit that the Government made a mistake in taking this shipbuilding business out of the hands of the Imperial Munitions Board, even during war time because we know that war time produced all sorts of fads, such as shipbuilding, daylight saving, and any number of other nonsensical things which will die a natural death. I do not mean that shipbuilding is a nonsensical proposal;

it is only nonsensical when you attempt to make it a success under a high protective tariff. I would like to make that qualification of my statement.
It is also said that, in the work which we have done in connection with shipbuilding in Canada, we have entered into very unprofitable, if not ruinous, contracts. I do not know much about the Dominion Iron and Steel Company. I suppose we should look for light in connection with this subject from my hon. friend who leads the Opposition (Mr. McKenzie). He must know something about it, as these works are in his constituency, and he will no doubt enlighten the Committee as to the figures which have been published in the daily newspapers, as to the contract that has been entered into between the Dominion Govern- -ment and the Dominion Iron and 'Steel Company and as to the price paid for steel plates. I am sure, from the deep interest that he takes in matters concerning his own constituency, he will give us the benefit of his information and of the accurate statistics which must be within his reach on such a question.


Daniel Duncan McKenzie: If my hon. friend will allow me-


Michael Clark: My hon. friend will have an opportunity; I will be finished in a moment.


Daniel Duncan McKenzie: I only want to correct my hon. friend in me statement that he has made. I would be very proud to have that industry in my constituency, but I must not take something that does not belong to me. It is not in my county.


Michael Clark: Has the steel company no connection with your county at all?


Daniel Duncan McKenzie: No, not the Dominion Steel Company.


Michael Clark: Well, the province is not so great, and'my hon. friend is always well acquainted with everything that is going on in Nova Scotia. His information about Nova Scotia is not confined to what goes on in Cape Breton. We know the encyclopaedic nature of his knowledge, and I do not use the word in any sneering sense. We all admire the hard work that he does on behalf of the Opposition which he leads in this House, and we would be glad to have from him information about this contract between the Government and a company which has its main works in the province of Nova Scotia.


William Duff: Does my hon. friend not think that he could get that information

more readily from the Government which made the contract with the Dominion Iron and Steel Company, seeing that he is a friend of the Government?


Michael Clark: I will take any suggestion whatsoever and be glad to co-operate with my hon. friend in getting information that this country and Parliament should have. But I would suggest to my hon. friend that it is treating the Opposition rather cheaply if he delegates to one who is supporting the Government on many subjects the duty of the Opposition. I should advise him to readjust his ideas about what the duty of the Opposition is in this House. My suggestion was not made to my hon. friend. It was made to the leader of the Opposition, who, at least, will be able to deal with my point in his own way and at his own time. There has been something said about the price of steel plates in war time, at the present time and before the war. My information, Mr. Chairman, is that the price of steel plates and the price of freights are both tumbling at the present time-tumbling fast-and it will be a good thing- for -the poor people of all countries if the prices of ordinary articles of use in the household tumble at the same time. I think the Government should have something to do with that "tumbling" and should do something not only to relieve the high cost of contracts but to relieve the high cost of living. That is the information we have about both freights and steel plates at the present moment and if it -is correct I think that it is a very good reason why the Government should go very slowly about further extending this shipbuilding programme of theirs.
The minister has asked how we will get our wheat out unless we have ships to carry it. I should like to point out that if we are going too far along the line of high tariffs we will be landed in the situation of keeping both the wheat and the ships. We shall only be able to sell the wheat that we produce when we are up against the competition of the world again if we carry on trade in the way I believe it will be done in the very near future. We can only sell a certain amount of wheat in the world in competition with other countries that are producing it if we take the proper method of building up international trade and you cannot build up international trade or operate ships successfully unless you reduce your tariff in this country.
What is happening on the high seas of the world at the present moment? I am

glad my hon. frend the Minister of Finance (Sir Thomas White) is in his seat because I want this last breeze to reach him before he brings his Budget down which will be fateful in its effect both in regard to the political conditions in this country and to the prosperity and progress of Canada and our ability to take our proper place in the commerce of the world.
I am credibly informed that within three weeks of the armistice British ships laden with cargoes of dry goods from Lancashire and with other merchandise were heading their way, after having done nothing but war work for four years and a quarter, to South America and to other parts of the world. And I want to ask my hon. friend (the Minister of Marine) in regard to this difficulty of getting wheat out, what he thinks those ships would do when .they discharged their cargoes? Why Mr. Chairman, inevitably they would load up with wheat, if it was to be had, and if not, they would load up with some other return cargoes to pay for those dry goods and other merchandise. But we have indulged in the folly of trying to foster a cotton trade in this country; which the biggest man in the cotton trade has said never should have been attempted-that this country is not adapted for it. As we refused in a large measure to take excellent Lancashire cottons-I am talking of pre-war prices-at half the price we have to pay for them in a country where there never should have been a cotton industry, naturally the vessels go elsewhere, and of course they do not take our cargoes babk.
I am glad my hon. friend from Guys-borough raised this question. The trade question is at the root of shipping. The instinct of shipping is in the very blood of Britons, because for centuries they have gone down to the sea in ships. And to try to build up a shipbuilding policy in this country while we maintain a high tariff, is a contradiction in economics, a contradiction to common sense, and diametrically opposed to all commercial history. I wanted to say that on general principles. I wanted to show how, and how alone in my judgment, shipbuilding can be promoted in Canada. I wanted to impress upon the minister (Mr. Ballantyne) and the Government that unless the fiscal policy of the country is changed this shipbuilding policy will be a white elephant, and all the subsidies you may grant, and all the artifices you may use to make it otherwise will fail. I do hope my hon. friend the Minister of Finance has been listening to me, because
this has a most important bearing upon the reconstruction of Canada in which we are all interested, and which we wish to see taking place upon a proper basis and with every chance of this country being the country it should be amongst the nations of the world.


John Allister Currie: I had the idea, Mr. Chairman, that I was one of the bluest Tories in Canada, but I have at last found one hon. member whose views stick tighter than those of any other man in this country, because the views he has enunciated on free trade are the old, old story, and he remains positively the same. He has decided that we must have no industries in this country.


Michael Clark: What is there old about the story of vessels going to South America as soon as the armistice was concluded? That was up to date.


John Allister Currie: I am just going to answer that. One argument he put up was that Canada should not have a cotton trade, and he advanced cogent reasons why Lancashire occupies her premier position as the centre of the cotton trade. Of course this House knows very well that cotton is not grown in Lancashire; they import it just the same as we do. He cannot therefore argue that we should not have a cotton industry in Canada just the same as they have in Lancashire. They are able to compete in the markets of the world because they have their skilled workmen; and we can do exactly the same thing. We do not grow cotton in Canada, but we have cheaper power, and in the long run the cotton industry in this country will be in just as strong a position as it is in England, and there is just as much reason why we should have a cotton trade as there is that England should have it.
Now, there is nothing so vital before the people in this country at the present moment as this question of trade and shipbuilding. I am in touch with the shipbuilding industry, there being a large shipbuilding yard in my riding; and I am also in touch with foreign trade. This country during the war did not confine itself entirely to the manufacture of munitions. It carried on trade all over the world by ousting German goods in South America, China, Japan, India and other countries. That trade grew to vast proportions, it amounted last year to something like half a billion dollars-that is outside of munitions and foodstuffs-and that is a trade I think we should carry on. That is the

condition that obtained during the war. Previous to the	war	it was	difficult to carry on shipbuilding in Canada on account	of	this	so-called	free
trade. The hon. gentleman who has spoken (Mr. Michael Clark) told the truth in that respect. We had free trade in ships- Ships that were built in Great Britain could come into Canada free, they could go up on the Great Lakes and carry on their trade as long as they were of British registry. There is no necessity of changing our policy in that respect, because protection did not touch that matter at all, and the hon. member for Guys-borough knows that very well. He knows that British ships traded in Canada free. Ships from Great Britain carried on a coasting trade from town to town and from Fort William to the Lake Erie ports freely, and not a cent of tariff was paid by those ships.
Mr. J. H- SINCLAIR: My hon. friend will perhaps admit that the size of our canals afforded some protection, because only a certain class of ships could come in?


John Allister Currie: The moon is made of green cheese. That is no argument. That is only a question of the length of the ships. Other nations could have brought their ships in here. The Germans, for instance, could have done so. The canals were free to any nation in 'the world. The question of free trade versus protection was not involved, in this subject at all. My hon. friend knows very well what is the fact to-day, that all the material entering into shipbuilding can be brought into this country free of duty. There is no duty on bars, plates, or anything of that kind, that enter shipbuilding, and for that reason shipbuilding can be carried on in this country regardless of tariff and should be encouraged.
What was the reason that we wanted to get into a shipbuilding business, and why were these contracts given for ships? We all know that with the advent of the submarine the economics of war, as I might say, underwent a great change. The world found that ship after ship was being lost, that there was a great shortage of ocean shipping, and that the goods of this country might not find their way abroad. As a matter of fact at the present moment there are millions of dollars worth of goods in the warehouses of Canada awaiting shipment to China, Japan, and other foreign countries, and we cannot get the bottoms to ship them out- The absurdity of standing up and opposing a programme that will give us a few ships to carry on this foreign trade shows to my mind the ignorance of

those men who speak on topics they do not know anything about. If you go to any Canadian manufacturer to-day you will find that his warehouses are filled with goods for export to South America, China, South Africa and India, and that he cannot find any shipping for them. For New Zealand they will not take a car of stuff from any station in Ontario to-day until ships are provided, and there are no ships for the thousands of dollars worth of merchandise lying in our warehouses waiting for shipment to that country.
Hon. gentlemen who discuss questions affecting the commerce of the country should post themselves a little better in the matter. The world is moving; conditions to-day are not as they were twenty years ago. The wheat of the country should be taken out on our own ships. Every nation to-day is jealous of its shipping. At the very moment that the Government gave its first contract for the building of ships the Japanese Government established a programme, to extend over seven years, for the purpose of absorbing every pound of plate they could get in Canada or in the United States. If the Minister of Marine wants to sell his ships, he can sell them to-morrow to the Japanese Government at ten or fifteen dollars a ton more than he is paying for them. There is no lack of market for ships to-day throughout the world. The contracts were not improvident.
The hon. gentleman quoted the Financial Post as saying that plate was selling at $55 a ton. With pig iron selling at Lancaster at $50 I do not see how you can get plate at $55. The quotation given in the Post is an absurdity. Plate is really selling higher to-day in England than it is in Pittsburg; the Government absorbed the difference. If we do not have our own ships during the next five or ten years we cannot carry on business with any foreign country, because each nation has taken hold of its shipping as a national business and will not allow its ships to be used in the trade of any other nation. Great Britain has absolute control of its own shipping; a British ship cannot go to a foreign port without getting authority from the British Government to do so. During the war embargoes were placed on shipping as against foreign countries. For nearly a year foreign shipping was not allowed to go to Norway because Norway would not allow its ships to be used by the Allies, and thousands of tons of freight were lying in the harbours of New York, Boston and Montreal awaiting shipment to Norway. A short time ago the United States placed an embargo on

the products of Canada going to Norway through American ports. It will be only a matter of weeks before the United States Government places an embargo on any Canadian products going out in United States ships, because they want all that trade themselves, just as every other country wants its own trade.
As to the cotton industry and the shipping industry of Great Britain and free trade, school boys who do not know anything about history might say that free trade built up the shipping trade of England. But every one knows that the shipping trade of England originated in the navigation laws of Cromwell, which were a most effective form of protection. Great Britain put the old navigation laws into force during the war, and made them more rigid than they ever were. She would not permit any foreign neutral nation to carry trade to belligerent ports. Is that free trade? That is the condition we ourselves are up against; we want our own ships to carry our own cargoes. I will give an illustration of how Great Britain desires to curtail the trade of the world. A Canadian firm had a cargo of goods for consignment to Calcutta. The goods had been manufactured in Canada and had remained in stock a considerable time awaiting shipment. The man who manufactured the goods asked the Canadian Pacific Railway Company if they would give him a freight rate to Calcutta, and they did, quoting him a rate of something like say $70 a ton via the Pacific. The manufacturer tendered this rate to the British firm which had the goods here, and they said that the goods had to go via London, and that the freight to London was over $60 a ton and only $7 or $8 a ton from London to Calcutta. This shows what steps are taken by the British Government to control traffic to and from British ports. If you are going to build up this country; if you are going to make Canada a country which does business all over the world, you must start out in a proper way. Before the war Great Britain's most prominent competitor was Germany. How did Germany carry on her foreign trade? How was it that she went into the foreign market and took one-third of the trade away from Great Britain inside of fifteen years? The reason is simple. She bonused her ships and shipbuilding. It is absurd to say that the plates and material that entered into the manufacture of German ships were made in Great Britain and taken over to Germany and fabricated. That is not so. When the war came Germany had more plants manufacturing steel
plate than Great Britain had. Moreover, they had purchased many of the steel manufacturing industries of Great Britain and moved them over to Germany. When the waT broke out not one firm in Great Britain was manufacturing cold rolled shafting, because they had been accustomed to get it cheaper from Germany. During the great pageant at Quebec I had the pleasure of visiting one of the greatest ships of the British fleet, and when I set foot on the deck of that warship I saw that the plate on the side was stamped "Krupp steel," presumably made in Germany. That indicate what the condition of affairs was before the war; and that is the condition of affairs that an adoption of the policies advocated by free traders would bring to any country. Free traders would bring about a condition in which the nation would be only a jobbing nation, not a -manufacturing or producing nation. That might do for Great Britain, but not for Canada.
Germany built up her maritime and foreign trade by subsidized shipbuilding and encouraging shipyards. Before the war, when the shipbuilders had gone on strike in Great Britain, the emissaries of Germany were at the Clyde, at Newcastle and other places in Great Britain, offering these skilled workmen big inducements to go to work in Germany. Many of them went over, and a shipbuilding industry was established in Germany such as we are trying to establish in Canada with the same class of men. The greatest ships of the world were built in these German shipyards previous to the war. The supremacy of speed on the ocean was successfully contested by German shipbuilders as against British shipbuilders. Now, what was at the bottom of all this shipbuilding? There was a desire on the part of Germany to get the trade of the world. You cannot get the trade of the world by simply making the stuff; the secret of getting the trade of the world is to provide the necessary transportation. If we left it to the people of the United States to build up our railways in the West, how far would our West have gone? It is the old story of the lark and her young ones; if you want to do anything properly you must do it yourself and then you will know that it is done, and as you want it to be done. If you want to carry on foreign trade you must provide the transportation for it; otherwise you are at 'the mercy of all foreign nations and traders, w,ho will absorb your profits. Germany realized that. She established lines of trading ships between

German ports and all the leading ports of the world. Moreover, she provided that all inland manufacturers in Germany should have the benefit of the same rate to any of the ports of the world as that paid by the manufacturers on the seaeoast. In other words, a manufacturer in Leipsie could get the same rate from Leipsie to Smyrna as a manufacturer in Hamburg could get. All manufacturers were on the same footing in that respect. The same policy should be adopted by our National Steamship Company so that manufacturers in all parts of Canada will have the same freight rate to all parts of the world. The Germans established a freight rate from Germany to other countries which (was fully one-third less than the freight rate from Great Britain to other countries; and they made a profit on the return trade. For instance, the freight rate to-day from New York city to Calcutta, as established by the United States Government, is $20 a ton. The United States control their shipping, and a United States ship may not carry a cargo to a foreign port without a license or charge more than this rate. That is what we are going to be up against, and if we have no ships of our own -we shall not be able ito get a pound of any commodity out of this country unless we pay exorbitant freight rates. If this country could give a freight rate of $18 per ton to Calcutta, we could secure the business, so closely is international business mixed up. With ocean rates the freight rate is the controlling element. That is the whole question in a nutshell, and if I had my way *-I do not know whether my voice will be heard in the councils here any more than that of the hon. member for Red Deer (Mr. Michael Clark) -I would suggest this. We as a young country must make up our mind that we have to take up our task as Empire builders. We have all the raw material for Empire building; we have the farms, the fields; we have the power; we have the workmen; we have the finest men in the world to undertake the task, men who have gone through the war and acquired discipline and training. If we are to be, a great country, we must put our shoulder to the wheel and make up our minds that we are to be Empire builders. Germany was a protectionist nation, and was the one nation in the world that successfully contested the supremacy of England in matters of foreign trade, and we can remain a protectionist nation and we can follow out a similar policy. We must establish a number of 
steamship lines. We must establish a steamship line from here to the East Indies, where there is a very profitable trade, where we can send manufactured goods of our own and bring back in return tea, jute and other articles that are brought in to this country now in foreign ships, and that might very well be brought back as a return cargo in our own ships. Before the war this enormous trade with India went to Germany. Besides we are going to get an Imperial preference. We must not, because the war is over, lie down and go back to our little five acre lot and say: Oh, well, we are done with the war, we want to revert into our shell again. We have taken a place in the sun and we must now stay in the sun. We should have a line of steamers to Australia and New Zealand. At the present time the New York manufacturers and traders are lying awake in bed at nights wondering what preference we shall have with Australia and New Zealand. They are all wanting to open branch offices in the cities here in order to see if they cannot get a share of that trade. There are many things we could bring back from New Zealand. We could bring back a return cargo of hides and wool to Great Britain, and then we could bring back from Great Britain a cargo of other things which we need. The hon. member for Red Deer may wonder what we require from Great Britain, but there are many things which we need which Great Britain could supply just now, but she cannot furnish ships to send them here. There is no lack of demand in this country for British goods; 'the only thing we really lack is shipping.
In South America there is a market for all the goods we manufacture, such as hardware, furniture, clothing of various kinds, cottons, goods of all descriptions, and we could bring back coffee and hides. " Oh," but the hon. member for Red Deer says, " That is a contradiction to your policy of being a protectionist. Why should you bring back hides? Your policy is to produce hides here." That's true, but we can get only hides for fully fifty per cent of the leather we turn ou't in this country. We are large manufacturers and exporters of finished leather, and if we endeavour to get hides from South America via the port of New York, as we do now, we are liable to be tied up by the United States Government. They will say: We will allow you only so many hides, as if we were an " adjunct." Therefore, if we had our own ships, we would not be under the necessity of looking to them for favours. We could bring

the hides hack here in our own ships, so that the New York merchants would have no control over our trade and would not be able to milk the profit out of it as against the Canadian manufacturer.
In these countries we have traded with during the war and established a market for our goods, and we did not have to furnish a national credit. They have plenty of gold. Unless steps are taken to establish lines of shipping from Canada to these various countries we shall have lost all the advantage of trade during the war, and Great Britain, France and the United States will have gone into these countries and secured the business which we had.
The hon. member for Red Deer spoke the truth when he said that the ink was not dry on the armistice when English ships were going out laden with goods to capture the trade of the world. Before the ink on the armistice was dry Canada should have been ready, too. In fact, we were doing a large amount of that trade which Great Britain could not do before the war. But, knowing a certain phase of trade from the ground up as I do know it, I would say to the minister that the worst thing '.that this country ever did in the matter of shipbuilding was when it lent money to Great Britain to build ships for the so-called Imperial Munitions Board, in order that those ships might go into competition with the ships we own ourselves. There was no necessity for that, and all those ships should have been held by us, so that we could control our own shipping and trade, and do something to adjust matters that the freight rates on our Western wheat would not be so great and would not bear so unequally on the man who lives in the shadow of the Rockies, so that he would have an equal chance in the markets abroad. These ships were built for the Imperial Munitions Board; Canada lent the money to Great Britain for them, and no sooner were they launched into the waves and sailing out on the sea than the fleet was turned over to the Cunard and other lines that have been milking this country for many years on the Atlantic. If we had those ships, they would have assisted us in carrying on our foreign trade, and I make this prediction that before four years aTe over this country will realize it has not enough ships to carry on its business.
Let me say a word in reference to the price of steel plate- Everybody knows the price of plate and other steel commodities was very high, and when the minister made the contract for the steel plate for ships
it was almost impossible to get plate for any work whatsoever. Shipping was all under control and the whole world was tied uip, and I think the contract that the minister made was a very easy contract at that time, because, comparatively speaking, the price was low, and it would have been a good thing for this country if, during the war, we had had two or three firms making plates, as there was a great shortage of plates in the world. But the economic war is not over yet and I am going to make another prediction, namely, that before many years are over the minister will find that he has not made a bad bargain in the matter of plate mill. The shelves of the world are empty so far as iron is coneferned, and while at present there is a halt in the purchase of such goods, the fact will very soon be realized that there is not sufficient of these goods available and prices will rise accordingly.
The Saar valley, which was a great mining field where the Germans got their iron ore and which furnished forty per cent of the steel materials that went into the foreign trade of their country, has been put under international control. Germany has lost the Saar _valley where all her great iron mines were. Her furnaces and steel mills are in Westphalia where her coal mines are, but where there is very little iron, and it looks as if the products of those mines are going to be out of the market for the next three or four years until France can build blast furnaces that will take that iron and smelt it and roll it. The result is that there will be a shortage of steel, while the trade of the world which has languished during the war will, within a few months after the Peace Treaty is signed, increase by leaps and bounds and be far greater than it ever was before, because people are trading and doing business abroad who never did any trade of any description before-
As to the influence on shipbuilding of free trade or protection, I trust that the minister and the Government will realize that there is nothing in that story; it does not affect shipbuilding to the extent of a five-cent piece. Every hon. gentleman knows that the materials that enter into the building of a ship come into this country free of duty; at all events, the duty is rebated. We could not build ships unless that was the case, as the British ships would simply be brought in here. I think that when war broke out there were on the Great Lakes ninety large cargo carriers which had been brought here from Great Britain. All of them went to sea when

war broke out, and possibly sixty or seventy per cent of them were destroyed by submarines, and many of the crews gave up their lives in the service of the Empire. The officers and men of the merchant marine of Canada have no need to be ashamed of their record during the war. I trust that the people of this country will support those who are endeavouring to keep alive the maritime traditions of our race. I can assure the minister that the manufacturers of this country and the farmers who need the ships to carry their products abroad will support him in any measures that he may take for seeing that this country is not divorced from shipping as it likely will be within six months or a year if we do not have shipping of our own. Trade will expand Iso rapidly and the scarcity of shipping will become so acute that foreign countries will control their ships just as the United States and Great Britain are doing now. The United States has fixed the freight rates between New York and every foreign port. Great Britain is controlling her ships in the same way, and Canada's voice is very small in the counsels of these nations when our trade comes into competition with theirs. If we are to compete in foreign markets we must have ships of our own, and we would not be progressive if we did not adopt this policy of establishing a merchant marine.
Progress reported.
At six o'clock the House took recess.
After Recess.
The House resumed at eight o'clock.
LT.-COLOtNE'L GEORGE HAROLD BAKER, M.P.-PROPOSED MEMORIAL.


Georges Henri Boivin: I have the
honour to inform the House that a message has been received from the Senate informing this House that the Hon. Messrs. Bradbury, Casgrain, Foster and Pope, have been appointed a special committee to confer and act with the committee of the Senate and the House of Commons, who have in charge the building and arrangement of the new Parliament Building, in order that there may be erected therein a suitable memorial [DOT] of the late Lt.-Colonel George Harold Baker, M. P. for Brome, he being the only member of Parliament who lost his life on the field of battle, and inviting this House to appoint a like committee to act jointly with the committee appointed by the Senate.


William Thomas White: Mr. Speaker, with reference to the message that has just been read from the hon. the Senate, I beg to move, seconded by Mr. Reid-the consent of the House being necessary-[DOT]
That Sir Sam Hughes, Sir Herbert Ames, Messrs. Boivin and Kay, he appointed a Special Committtee on behalf of the House of Commons, to confer and act with the Committee of the Senate and House of Commons, who have in charge the building and arrangement of the new Parliament Building, in order thait there may foe erected therein a suitable memorial of the late Lt.-Colonel George Harold Baker, M.P., for Brome, he being the only member of Parliament who lost his life on the field of battle ; and that a message foe sent to the Senate to acquaint their Honours (therewith.


[Stage Direction]
Motion agreed to.

[Stage Direction]
House again in Committee on Bill No. 68, for granting to His Majesty aid for demobilization and other purposes, Mr. Boivin in the Chair.
On section 2-payment of three hundred and fifty million dollars may be made:
Daniel Duncan McKenzie: I wish to bring to the notice of the Acting Prime Minister a communication which I have received from Halifax concerning the men engaged in the naval service during and since the war. The largest number of men engaged there did not much exceed 3,000, and there are still, I understand, 900 men on the pay roll, about 2,000 having been demobilized. The cry among those who are still on is that demobilization is proceeding too slowly and that there is no occasion for keeping them there. They are doing nothing, and in letters I have received they assert that they are simply kept there by the officers as an excuse for the latter to retain themselves in office. The statement is broadly made both in the newspapers in Halifax and in the communications that were sent to me, that all the officers on the Nio:be, in the higher ranks at all events, are English naval officers who were loaned 'to the Canadian Government for this service, and that when they came to this country they were promoted in rank from what might be regarded as petty officers to a higher grade, with a consequent increase in wages, and, as it is remarked in these letters, promotion in social standing, and so on. It is asserted that they are having an excellent time and good pay and are just keeping it going in order that their salaries may be continued. The men appear to be highly dissatisfied and write me that they believe their time will be up on the 11th of this month, that

is, six months after the termination of hostilities, when tney are entitled to leave. I was anxious to bring this matter to the notice of the authorities to-day so that we would avoid if possible the disagreeableness and, to some extent, the disgrace of having any trouble among our men, and in order that the most effective and speedy action should be taken by the Government to meet any brewing difficulties among them. They have sent me a copy of a general order issued by W. Oswald Story, Admiral Superintendent of that service at Halifax. It reads:-
In view of the misunderstanding which appears to exist, with regard to demobilization, attention is called to the fact that ail officers and men are liable to serve for a period of six months after cessation of hostilities. As some officers and men will be required volunteers were called for, in order that, so far as1 possible, those retained might he volunteers, but it must be understood that others will also he required, if insufficient volunteer, and will be retained as necessary.
Those who do not volunteer to continue to serve will be demobilized after cessation of hostilities as thpir services can be spared.
W. Oswald Story, Admiral Superintendent.
November 23, 191>8.
The men in the service interpret this Order to mean that hostilities ceased on the 11th day of November. They had a contract to stay in the service until the cessation of hostilities and for six months thereafter. When the armistice was signed on the 11th of November, these men, it appears from the tenor of this Order, wanted to get away at once, and this Order was made then to make their position clear. They understood by it that those who volunteered were bound to remain for six months after the cessation of hostilities, or up to the 11th of this month, and they want to get away at that date. I have here copies of newspapers that are friendly to the Government-the Halifax Herald and the Halifax Evening Mail, both of them strong supporters of the Government, speaking editorially-I shall not take up the time of the Committee reading it-they sustain exactly what I have said. They put forth the same theory, that these officers are unnecessarily prolonging the time of demobilization. The Mail is jusit an evening edition of the Herald, both being owned by the same people, and both issues set forth, as an argument to show the unreasonableness of the time that is taken in dealing with these men, that 150,000 men have been brought home from England and disbanded and dealt with by the authorities in the military service.
While this has been done there are only 2,000 demobilized altogether and about 1,000 on the hands of the officers doing nothing, according to the report that comes to me.
I think it is quite proper for me to read a letter I received to-day:
Halifax, N.S., May 4, 1919.
Dear Sir:-I have been delegated on behalf of the Boys from the Lower Deck to direct a letter to you, asking you, if you would take up our case which is stated below, in the House of Commons.
We men have resolved, on or about the' 11th of May to discontinue our services in the " Canadian Navy " and demand that we be demobilized forthwith, on the grounds, that our contract as far as the Canadian Navy and Government is concerned, is completed, observing, that we have carried out our duties 6 months after the cessation of hostilities. We further base our claim on the General Order, which I enclose, dated November 23, 1918, ....
That is the general order that I read-

and signed by Admiral Storey. Will you, on our behalf ask in the House of Commons the following question: "What date, after November 11, 1918, do the contracts, signed by the Canadian Naval Ratings become void? In the event of the men refusing duty after the 11th of May, what stand will he taken by the Government?"
The letters which I enclose, published by the Halifax Herald express the feeling of every Canadian sailor in the service. We have stood everything during the war, and when war ended, to our great surprise the Government had no policy formed, as to dealing with our demobilization. We have waited our six months, and even to-day they have not declared themselves in regard to the ultimate date of our demobilization. We are all anxious to get back into civilian life as soon as possible, in order to get re-established in our civilian occupations.
That is the substance of the complaint made by these men, together with what I have already stated. I think that it is not necessary to keep them there, and that the officers are simply making jobs for themselves. That is not my language; it is what is communicated to me by these men, and I think it is my duty to represent the matter to the Government so that such action may be taken as will prevent any difficulty between these men and their officers.
I trust that immediate action will be taken upon these facts, as I believe them to be facts. I would have some hesitation perhaps if I did not have exactly the same story in the form of an editorial signed by the editor of the Evening Mail. He puts his own name to the statements which appear in his paper, and I feel confident that a paper of the standing of the Evening Mail would not give its countenance to these , statements by publishing them if the editor did not believe they were true.


Charles Colquhoun Ballantyne: The other day, -when this matter was brought to the attention of the House, I stated that the total number demobilized amounted to 3,490 out of a total establishment of 5,468. I can quite understand these naval men. who are probably tired of the service and anxious to get back to civilian life, all writing that they have nothing to do. But I can assure the hon. member (Mr. McKenzie) that they would not be kept in the Naval Service if they had nothing to do. There has been a great deal of talk in regard to the Niobe. We have altogether a total down there of 779 men; on the Niobe 231, guards in the dockyard, etc., 99; troops in reserve 206; on vessels at Liverpool, Nova Scotia, 40; in hospital 80; to be demobilized this week, 123. The Naval Department cannot let every man in the service go until we can enlist enough civilians to perform the .duties that are necessary ion board the Niobe. -Seamen returned from overseas, boys from the Niobe and members of the accounting staff are kept busy with the details of keeping accounts, discharge, etc., and it is necessary to accommodate on the Niobe both Canadian and Imperial naval men who are returning to Canada. Then, we have to .keep men with the large number of. drifters and trawlers owned by the Imperial Government, and until such time as we can enlist a sufficient number of civilians to take charge of these vessels we could not allow every man to go. Allow me to assure the hon. member that energetic steps are being taken constantly to demobilize these men and to see that this week alone we have demobilized 123. I hope that before long they will all be demobilized. Whoever wrote that letter considered that he was free from service six months after hostilities ceased. I do not claim to be a naval authority, but I know that no man is free from the Canadian Expeditionary Force, and no man is free from the navy, until six months after the War, which means six months after peace has been finally declared. While we do not want to hold these men unnecessarily, it would be very ill-advised, indeed, for any one to be absent without leave on May 11 because I hold that the men are n,ot_ free until six months after the war., But, in any event, I am as anxious as any one else to have them demobilized as rapidly as possible. I am .urging it every day. Just as soon as I can get civilians to take the places of these ratings I will do so. I will have something 
more to say upon the navy when I answer the hon. member for Lunenburg (Mr. Duff), but I regret to note that there always seems to be a tendency to malign our little navy and to say that our men are not doing anything when as a matter of fact they are doing good work and have performed very satisfactory service for King ana country.


Daniel Duncan McKenzie: I am pleased to find that the minister is taking every reasor able step to meet the views of these men. I do not profess to be a military or a naval man, I am only ' an ordinary lawyer; but if this document were dealing with ordinary-commercial business, I would have to say that it dates from the signing of the armistice, because hostilities did end on that date. Whether the man who drafted it meant that or not, that is 'the language of the Order. I understand that the contracts that men sign in the infantry contain the expression " six months after the end of the war." "The end of the war" and "the cessation of hostilities" are separate and distinct things. There have been no hostilities since the armistice was signed, and unless there is some peculiar interpretation of naval and military contracts, those men have the right to believe that their six months commenced to run from the 11th of November last and will expire on the 11th of this month. Those men are Canadians and are deserving of our best attention. They are not rebellious. They interpret their contract in a certain way, and it is quite possible that they got the opinion of some legal gentleman in Halifax in regard to it. I would like the minister to take positive action, so that those men will see that they are not treated as if they were nobody, that "they can mutiny if they like and they will see where they are going to land." I do not want them to have that idea; I want them to feel that the minister is concerned about their welfare and will see that they are properly treated. If they do hear something from the department before the 11th recognizing their position,
I presume they will be pleased and there will be no trouble; whereas if they are ignored, if nothing is done beyond the stereotyped reply that the minister makes to me across the#floor, we may have another Kin-mel situation on our hands. We do not want anything of that kind; rather we desire our naval as well as the rest of our military operations to end properly, for we may want those men again. That was mentioned in one of the letters addressed to me, that naval and military men may

be required at other critical stages of our national life, and it is well not to leave any stings or heartburnings in connection with their demobilization. I hope such action will be taken that those men will realize that they are treated as Canadians who have rendered good service to their native country and in whom the Government feel a deep interest.


Rodolphe Lemieux: Last night I offered a few observations on the different matters which are covered by section 2. I do not intend to repeat what I said then, except perhaps to emphasize one point only in connection with transportation and the promotion of trade and industry. I listened this afternoon with a great deal of pleasure to the statement made by my hon. friend, the Minister of Marine and Fisheries (Mr. Ballantyne), and as I told last night to my hon. friend the Acting Prime Minister (Sir Thomas White) to promote to some other department the present incumbent of the Department of Trade and Commerce (Sir George Foster), might I not suggest to him at the same time that my friend, the Minister of Marine and Fisheries is exactly the "live wire" I would like to see in the Department of Trade and Commerce?
I do not offer any criticism of the contract between-the Naval Department and the Dominion Steel Company which was mentioned this afternoon. I have not seen that contract, and I have the word of the Minister of Marine and Fisheries, that it may be altered or even dropped. I do not purpose to let politics interfere with my v.iews on the questions of trade and transportation, for I am a Canadian, first, last and always, and I sincerely approve of the policy of any Government which will promote our shipbuilding and improve our transportation facilities. I happen to reside in Montreal during several months of the year, where 1 represent one of the constituencies nfost interested in shipbuilding. The county of Maisonneuve has within its boundaries the establishment of Canadian Vickers Limited, and L think it is to the credit of the Laurier administration that we have that great shipbuilding plant. Canadian Vickers Limited employ thousands of men, and they have been able to build up an industry which some years ago was considered as only a dream and impossible of realization. I cannot forget that in 1&12 when the question of a Canadian navy was being debated in this House doubts were expressed as regards the practicability of that policy. The Prime Minister (Sir Robert Borden) himself stated, in a now 142H
famous speech, that not in twenty-five, or even fifty years perhaps, could we expect to build a Canadian navy. And we had the candid advice of Mr. Churchill, who told us-with some ingenuousness I should say -that we could not find riveters in Canada, and there were so many swamps that we could hardly lay keels for the proposed Canadian navy. Sir, let us not refer to that debate, because really it is enough to make us lose confidence in some of the statesmen of the Mother Country. We have passed the period when the British Government could at their own sweet will thus impose their views on credulous colonials. We have had the satisfaction since that time of establishing shipyards on the Pacific and Atlantic coasts, on the river 8t. Lawrence, and on the Upper Lakes, and the British Commissioners who were appointed some years ago to study the trade conditions of the British Empire, reported that Canada was fully equipped for shipbuilding and had nothing to fear from competitors. I have under my hand the report of those commissioners, published in February, 1917, from which I read the following:
Before leaving the subject of the overseas communications of Canada we may allude very briefly to the capacity which the Dominion has for shipbuilding. We visited yards for ship construction and ship repairing both on the Pacific coast and at Montreal and we-were struck with the activity generally prevailing at all places. There is also considerable shipbuilding work on the upper lakes.
I do not know what the commissioners would say if they came back to Canada today. Had they come last year they would have seen how our shipyards kept the wheels of industry running at full speed during a very crucial period. But Canada must not be satisfied with her war industries only. During the war Canada established her ability to do things; she must go on now and adapt herself to peace conditions, profiting by the development which has taken place during the war.
The member for Red Deer (Mr. Michael Clark) spoke this afternoon of British shipbuilding as compared with Canadian shipbuilding. If we are satisfied always to look upon John Bull as the privileged one who should take care of our shipping interests we sha-11 never make any prbgress along that line. Let us learn from the old gentleman. During the last century-indeed,-since Waterloo-John Bull, much to his credit, has been able to take toll in the way of trade from every nation in the world. We Canadians, members of the great Em-

pire, should get our share of that business which John Bull has taken unto himself. I stand for a moderate and wise policy of shipbuilding for Canada, and if the Acting Prime Minister, under section 2 of the Bill, intends to apply some of that money for the promotion of shipbuilding and the improvement and development of our Canadian transportation facilities, I shall vote for the amount which is being asked this evening.
Nothing, in my judgment, has proved more adequately the ability of the Canadian people to do things than the enormous development which has taken place in our shipyards during the last three- or four years. It is urged that the Minister of Naval Affairs (Mr. Ballantyne) took away from the Imperial Munitions Board a business which that board was carrying on at our Canadian yards. It seems to me that the answer given by the hon. gentleman is a common-sense one. During the war Canada gave to the Mother Country the exclusive use of her shipyards, in which ships were built of British registry. Our ships were also commandeered. Of course, it was for the common cause. But the moment war ceased, the moment we come to peace activities, it is only common sense that Canada should take control of these shipyards and build her own ships with her own men and her own money, with a view of improving her shipping and transportation facilities.
While on this question of shipping and shipbuilding-because all this is more or less implied by the word "transportation" -may I refer once more to the report of the Dominions- Royal Commission? The report is a very interesting one, containing data on a variety of subjects. It is from reports prepared by people who do not live in your country that sometimes you can learn the most about your country, and I would ask my fellow members to glance over this report at times, because it contains most interesting information about Canada and about the possibilities of trade development in this country. Speaking about trade through Canadian ports, the commissioners use the following language:
"When we turn to the question of the general development of Canadian trade routes it is somewhat disappointing to find, in view of the excellence of 'the harbours of the Dominion, that much of its overseas trade is still carried on through the ports of the United States. It is estimated that in 1913 two-thirds of the Canadian export wheat was shipped through United States ports, and though quantities and proportions differ no doubt in different years, considerable -diversion from Canadian ports appears to be a normal condition.

No doubt a partial explanation Is found in the fact that the St. Lawrence ports (and Montreal especially) are not available for five months in the year, during which time there is a shorter haul from Canadian centres to New York -and other United States ports than to the Canadian Atlantic ports open throughout -the winter. But it seems worth while to examine the position and to set out briefly
(1)	What appears to be the main hindrances to the use of existing routes; and
(2)	What other alternative routes could be created or developed.
I wish to refer especially to the hindrances referred to in this report. The first is the "depth of the St- Lawrence channel between Montreal and Quebec, and the present rat^s of marine insurance in respect of Canadian eastern ports." I understand that the Minister of Marine has a relatively large amount in the Estimates this year to enable him to proceed with the further deepening of the St. Lawrence channel, and that the port of Montreal will receive fair treatment at his hands. I understand that the terminal facilities of the harbour of Montreal are to be considerably improved. But the main hindrance to the development of Canadian transportation-Canadian shipping, Canadian business overseas-it seems to me that this should attract the attention of the Acting Prime Minister-is the, shall I say, conspiracy?-yes, a conspiracy, of the marine insurance companies in the Old Country. Here is what the commissioners say in this respect:
It was also represented ito us that a difficulty in the way of more extended use of -Canadian Eastern ports lies in the heavy insurance rates now charged-
(a)	on- cargoes carried to and from those ports,
(b)	on the hulls of vessels using them.
We were itold that these rates are unduly
hiigh in comparison with those in force at the Atlantic ports of the United -States', an-d in particular-
(1)	that underwriters charge an extra premium on hulls of tramp steamers for one or more voyages to the St. Lawrence during the summer season,
(2)	t'hiat this extra premium is -further increased for voyages during the last two months before the close of navigation.
I believe we are being very seriously discriminated against by the marine insurance companies. It is admitted to-day that our Atlantic ports are safe and that the St. Lawrence route has been -so considerably improved, so well buoyed and lighted, and the channel so well deepened, that it offers practically no element of danger. Why is it, then, that the marine insurance companies of England are so drastic in their terms to shipping companies? That is something which is not clear to my mind and which

- somewhat prejudices me against those British marine insurance companies. It was suggested some years ago that the Canadian Government should itself assume responsibility on account of the St. Lawrence risks for a period of, say, five years. It is contended that in the course of this period the Government would ascertain exactly the extent of the additional risk involved and that in the meantime extra shipping would be attracted to 'St. Lawrence ports. If we are going to improve our transportation facilities, we should strike at once at the root of the whole trouble. Doubtless, the high insurance rates against the St. Lawrence route will always be the main hindrance to Canadian transportation interests, and I would ask the Minister of Marine and Fisheries, who is a keen business man and who knows the St. Lawrence route just as thoroughly as an old sea captain, to put another feather in his cap by settling the question one way or the other. He knows that business men and shipping interests not only in Montreal, but all over Canada, are up in arms against Lloyd's, and that a solution must be found now that we have reached peace times. We must improve our transportation facilities in order to develop our trade, because, as I stated last evening, we cannot expect to have a favourable balance of trade now that we have passed the war period. Foreign trade is the trade that we must look after, and our country should he, above all things, a big-exporting country. We have all' the raw materials, and we have the whole world to which to export our raw materials, wheat, pulp, the products of our forests, our mines and our fisheries-which	last is an industry
which has hardly begun to exploit the foreign market. The Canadian Government ought to have trade agents in various countries of the world and to advertise our products and our industries, and by means of a safe transportation ensure that those products are sent overseas. Unfortunately, in the past, we have overlooked our interests, but when we know that Canada's prosperity depends upon a favourable balance of trade, a reasonable expenditure should be made in order to promote the trade of Canada in foreign markets. In 1913, Canada exported $1,216,000,000 worth of in 1914, $432,000,000 iworth; in 1916, $741,000,000 worth-in which year we had for the first time a favourable balance of trade amounting to $233,000,000. In 1918, Canada exported $1,540,000,000 worth of goods, with a favourable balance of trade of $577,000,000.
For the twelve months ended February, 1919, Canada exported $1,216,000,000 worth of goods, with a favourable balance of trade of $284,000,000. But now the war is over; we have reached peace times and we must, if possible, maintain a favourable balance of trade. We cannot hope to reach the same high figures as during the last three or four years; hut if the Government is an up-to-date, alert administration, it will see to it that our products are advertised broadcast and that orfr transportation facilities are bettered, so that our export trade may give our people the means of paying the enormous war debt which we have contracted.
Once more, subject to the criticism that I offered last night, I say to the Acting Prime Minister that I will vote with pleasure for the development of our transportation facilities, but this implies the development of our trade, and with all due respect to the ability of the Minister of Trade and Commerce (Sir George Foster)-, I do not believe he is the right man in the right place. I would put in that department an active young man, who has new visions of things and who would transform that musty department into a business one. With these few remarks, I shall resume my seat, and I wish God-speed to my hon. friend in the administration of this enormous sum of money. I am afraid that my hon. friend has become colour blind in money matters. A dollar, a hundred dollars, a thousand dollars-there is no difference between them to my hon. friend. He has been rolling in millions and billions since the beginning of the war, and I am afraid he has lost his sense of proportion. Whether he speaks of one million or one billion, it is all the same to him. Perhaps it is due to the fact that he is an optimist; but there are limits to optimism. My hon. friend should not forget that Canada has a population of barely eight million, that we have a war debt of two billion dollars, and that although the resources of the country are immense, it may not be an easy thing in this general bankruptcy of the wdrld to develop our resources. To develop our resources we shall need the aid of foreign capital, and in order to obtain the aid of foreign capital we must certainly maintain our credit on the safety line, but I am afraid my hon. friend has long since left the safety line. However, I am willing to give him another chance. I suppose when the Budget comes down he will outline such a policy that we may soon expect the mil-lenium for Canada.


Mr. BRISTOL:: Coming from a city which is very much interested in the trade and commerce of Canada and also in shipbuilding, I am very glad indeed to find myself so= much in accord with my hon. friend from Maisonneuve (Mr. Lemieux). This country is passing through what might be called a. transition stage; that is since the cessation of the manufacture, on an enormous scale, of munitions, normal conditions of trade have not yet been resumed, and, in the. ordinary course, probably will not be resumed for some months to come. Under these circumstances the Government, as I understand it, have felt called upon to consider in the national interest the expenditure of sums of money for the purposes referred to in the second section of this Bill, to stimulate trade and industry and improve our transportation facilities.
I was very much interested in the statement presented this afternoon to the House by the Minister of Marine and Fisheries on the ship-building policy of this Government, I want to say in answer to the criticism that the Government did not start on this policy quite soon enough, that -as a matter of fact it was in 1917 that the British Government became thoroughly convinced of the necessity of building ships all over the world and endeavouring both in the United States and Canada to supplement their building in the British Isles by building ships wherever possible. As a result of that policy, in the spring of 1917 the Imperial Munitions Board undertook the building of ships, and a large number of contracts were let in this country for the building of ships of various kinds. In 1918 the Government of Canada who had been financing the expenditures of the British Government in this country in connection with shipbuilding thought that if it was in the interests of Great Britain to build ships in this country with Canadian assistance, it certainly would be in the interests of Canada to build those ships herself and own them for her own benefit. I do not think anybody would seriously argue that that was anything but a good policy for the Dominion of Canada. It is perfectly obvious that if Great Britain, which at the outbreak of the war had some 18,000,000 tons of the 40,000,000 tons of shipping which the world possessed, thought it necessary to pay from $185 to $210 for a ton deadweight for ships in Canada, it would certainly be in the interests of this country to follow that lead. As a matter of fact in 1918, although the price of labour was undoubtedly higher, and that of material somewhat

higher, the average price paid by this Government for Canadian shipping was, I should think, about $5 a ton less than the price for which Great Britain had let contracts in this country. That certainly was the case in the Vickers' yard at Montreal; I cannot say as to the other yards. The price therefore for which the Government were getting the ships constructed was reasonable from every aspect.
The minister told us to-day that the United States has built about 3,000,000 tons of shipping, and is contemplating building 13,000,000 tons more. I have a fairly accurate knowledge of the cost of American shipping during the war and the best information got from the shipyards themselves is that American shipping cost from $250 to $.350 a ton deadweight, which is largely in excess of the price paid either by the British or Canadian Government for their shipping. The policy of the American Government to-day is practically to write this en-normous war loss off, just as if it was an expenditure for dreadnoughts which would be no good for commercial purposes.
What I consider the essential reason why this country should continue to build ships, not merely 260,000 tons which the minister has spoken of to-day, hut a very much larger tonnage, is this: If Canada wishes to have the certainty of getting her products to other countries she must own her own shipping. The shipping of Great Britain is perfectly willing to handle any business that Great Britain- wishes it to handle. The shipping of the United States will look after the interests of the United States first; so if Canada is to be a great exporting country, as we know she will be, she must own a certain amount of her own shipping to ensure the country getting proper .attention along those lines. For that reason, if for no other, it is a national safeguard for the Government to build not only 260,000 tons of shipping, but a considerably larger tonnage.
Looking at the matter from a national standpoint, the Government have taken over certain railway systems. Controlling those railway systems and controlling ocean transportation, this Government can route everything on their own lines and on their own boats to any country we wish to export our goods to, and get a profit from one end to the other. That is one of the greatest national assets you could possibly have. The control of both railways and steamships will make for national wealth, and will improve freight rates between our West and the ports of other

countries to which our exports are to be shipped.
It has been suggested by some hon. gentlemen that the Railway Board should fix the rates on these Canadian ships. Imagine, Mr. Chairman-50,000,000 tons of world shipping, and 300,000 tons of Canadian shipping which is quite inadequate to handle the needs of our own country. If you want other ships to come here, you must pay the rate; otherwise, they will not come. If you wish to attract shipping to this country so that we can export our goods, you must pay the current rate, and I am sorry to say that so far as Canada is concerned we shall have to pay more than the current rate because of the reasons given by my hon. friend from Maisonneuve. If a boat comes from London, England; to South America, from South America to New York, and from New York to London, on what is called the Atlantic triangle, its gets a load at every place, and the result is a cheaper rat e. When a boat goes from Montreal to Liverpool it has a cargo for Liverpool, but what cargo is it going to bring back to Montreal? That is a very important factor in the rate from Montreal or any other port in Canada- On top of that, is the insurance on the St. Lawrence. It therefore seems to me that we should have a certain number of ships which the Government of this country can control, so that shipping for the transportation of Canadian products will be available, so far as the Government can make that possible.
The hon. member for Red Deer, for whom I have a deep affection and esteem, was arguing to-day that with the protective tariff we could not have shipbuilding in Canada, that shipbuilding and protection were incongruous, that imports would not come into this country if we had protection on the one hand and built ships on the other. Yet before the war, for years under protection, our imports exceeded our exports. Take the example of the United States. Twenty-five years ago England practically had control of the iron and steel trade of the world, but under a protective tariff the United Statets to-day is unquestionably supreme in that regard. Take Germany forty years ago. Under Bismarck they started a protective tariff. The country was poor and they had-no shipping, but in practically forty years they built themselves up by aid of a protective tariff to be practically the second shipping country of the world. Free trade may be an ideal thing, but if you do not protect your own people and your own
markets and - manufacturers you certainly cannot expect other countries to do it for you. Coming to the question of shipbuilding in this country, the difference between the cost of shipbuilding in Canada and in England is practically the cost of labour and material. So far as steel is concerned, places like Toronto and Montreal that get their steel from Pittsburg or wherever it may come from, are going to be able to get their steel plates practically as cheap as they do in England, The enormous manufacture of steel in the United States is constantly reducing the price just as it reduced the price of steel rails below the price in England. As to the question of cost of labour,
I am dealing with it as a pure matter of competition, and I have as high an authority as Colonel Carnegie, who represented the Imperial Government on the Munitions Board with reference to Canadian labour. After inspecting the two yards at Toronto, especially the Dominion Shipbuilding yard, he said: "Mr. Bristol, in the Dominion Shipbuilding yard at Toronto, owing to your splendid facilities and the efficiency of Canadian labour, you are going to manufacture just as cheaply as they do in England." I hope the prediction is true. When people talk about ships for $100 a ton dead weight in England it is absolute nonsense. You cannot possibly get contracts of that kind. The best contract you can possibly get is a cost plus 10 per cent. From the best information I have been able to get on the subject, I have not found any man in the United States or Canada who wanted to buy a ship in England, and who could get a contract price of $175 a ton dead weight, or who was satisfied if he let the contract in England that he could ever get a price that would work out at $175 per ton dead weight or get delivery of his ships before 1922. The importance of shipbuilding in this country is absolutely paramount. The objection has been made to the smaller boats of 3,700 tons built on the lakes as distinct from the 8,100 and 10,500 ton boats built in Montreal. Any man engaged in shipping will tell you that the most useful boat on the Atlantic has been for years and is to-day the 3,500 and 4,000 tonner. The reason is a simple one. It is easy to pick up a cargo of 3,000 or 4,000 tons, but for a boat of 8,000 tons you practically have to take a cargo of grain or a through cargo from Montreal to Liverpool, and the question is, what will you fill that 8,000 or 10,000 ton boat with when you come back? The same thing applies as regards trade between Montreal and South America, or Montreal and South

Africa, with which countries we are Opening up trade all the time and would open up still further if we had ships. The same applies to the West Indies. A friend told me to-day that in the Seven Islands, near Quebec, they had a great deal of pulp to ship. There was a 10,000 ton boat offered them, but they could not load more than 3,000 tons because they had not facilities. The Acting Prime Minister and the Government will be justified not merely in the programme that they have so far announced, but in the programme that has been foreshadowed to-day by the Minister of Marine in the spending of a very considerably larger sum in shipbuilding in this country, and I hope that this consideration will weight in the minds of hon. members.
We are passing through a period of unrest, when the industries of the country have not been able to resume full swing. It is in the interests of the country that the labouring classes should be kept occupied, and I submit that it is important that all shipyards, at all events during the present year, should be kept going at full capacity so that the 30,000 or 40,000 labourers referred to to-day may be kept at work.


Daniel Duncan McKenzie: My hon. friend (Mr. Bristol) thinks that the Government just started at the right time to build ships. I do not agree with him in that. I think any person starting in a new enterprise would naturally watch for the time when labour was fairly cheap and material fairly reasonable, so that he might invest his money to the best possible advantage. In 1910 the Government of Sir Wilfrid Laurier formulated a policy on the question of the Canadian navy, which incidentally carried with it shipbuilding in this country. The naval and shipbuilding policy of Sir Wilfrid Laurier at that time was agreed to by hon. gentlemen on the other side, and if it had been carried out we would have had 1910, 1911, 1912, 1913 and the best part of 1914 to our credit in our shipbuilding before the war broke out, and even in the first years of the war, being fairly under way, we would have been .able to handle our business before prices went sky high. For that reason I have made the statement several times that we started our naval and shipbuilding policy at a time when the prices were four hundred per cent higher than they were when we could and should have started, and at a time when the productiveness and usefulness of these ships will be three hundred per cent less than they would have been if we had had them at the com-
mencement of the war. I say three hundred per cent less, because by the time we get into the commerce of the world with our ships things will be getting normal and we shall have to accept the same rates as other people who had their ships built in normal times and who are therefore able to go back to normal rates. We will have to go into the market to compete with those who built at ordinary prices. We are too slow. If we were spending these large sums in shipbuilding for the purposes of the war we fail of our purpose, for the war is over and the ships are not yet available. My hon. friend's very clever and well-delivered address does not give any good reason why we did not launch upon a policy of shipbuilding at the time it was properly formulated some eight or nine years ago. As he knows very well, the reason was that the present Government would not admit that anything good could come out of Nazareth -they would have nothing to do with any policy formulated by the Laurier Government for fear it would carry any credit to that policy and to the Liberal party. They would rather let everything drop, hoping that some day in the future they would formulate a policy of their own for which they would have the whole credit.
The day came when they formulated a policy of their own, but they do not seem to be able to get very much glory out of it. It is not a policy at all; it is a sort of a driving of the scapegoat into the wilderness. The leader of the Government knows what the scapegoat was? The sins of the people were put on its head, it was blind-folded, driven out into the wilderness and left there in a place from which it would never come back. The policy of the Minister of Marine and Fisheries, in so far as these manufacturers is concerned, is a policy of starting them out. He makes them invest their money in providing the plant necessary for shipbuilding, he is going to take them out beyond the three-mile limit and then say: " Now gentlemen,
I have got you under way, and this is as far as I propose to go; you can either continue to go to sea, or turn back; I am through." That is the policy that he has given to us to-day. He says that he is going to spend a certain amount of money, to build a certain number of ships, and then he is going to tell the people: "You can provide your own money; it is none of my affair. I have given you a start, induced you to go into this business believing that I had a fixed, permanent policy, but I have not. You can go on or turn back, or do what you please." Does any

person call that a policy? I do not believe it is. A policy that is permanent would be based upon some principle, whatever else it might be. We had a fair sample when, from the Conservative side of the House, they launched the National Policy in Canada. That was a permanent policy in so far as that party was concerned, and they look upon it as their policy down to the present day. But when we do not know whether it will last for a day or a week or six months nobody would call it a policy; it is only an expedient for the time being and they are likely.to drop it at any minute. Really, the Government have no policy at all in regard to shipbuilding, and no policy in regard to naval protection. The hon. member for Centre Toronto (Mr. Bristol) came to the aid of the Government with some of the product of his brain, saying that he would lead them in the way they should go.
This section points out that some of the money is to be used for " the defence and security of Canada." If any of that money is to be used for the purpose of securing us against extravagance, recklessness and expenditures that are wrongfully proposed and badly conducted, I should say that it would be well spent. I think that is the only security we really need at the present time. Then, provision is to be made for-
The conduct of naval and military operations in or beyond Canada and the demobilization
I have already said to-night all I intend to say about demobilization. Another provision is:
The promoting of trade and industry, and transportation facilities therefor.
I wish to take advantage of the fact that we have a gathering of the ministers here to-night that we do not very often have to say a few words on this subject. I do not know what is in the air, but we had a masterful array of talent a _few minutes ago and there are still quite a number of ministers present. I 'wish to direct the attention of the Minister of Marine and Fisheries to the importance of doing something to promote the fishing industry in this country. There is no other industry in Canada that has such magnificent possibilities as the fishing industry both on the Atlantic and on the Pacific coast. We have only been gathering the pebbles on the beach compared with the ocean of development that is open before the Canadian people. I trust 'the minister will take that into his serious consideration and that he will come down to the House with a well-considered scheme for the development of
the fisheries and will ask Parliament for enough money to carry out that scheme. It will involve the establishment of storage for bait in convenient places along the Atlantic and Pacific coasts, and the proper looking after of these bait storages so that they can gather the bait at the time it is available and so that the fishermen may be able to get it when it is required. The condition in Cape Breton to-day is that very often, when fish is running along the shore in hundreds of thousands of tons and within easy reach of the fishermen, they have no bait. In September and OctobeT you find people simply sitting on the banks and doing nothing because they cannot get any bait. The fishermen, as a rule, are poor, they have no cold storage facilities, they cannot preserve the bait and although it is to be found by schooner loads around the shores, they cannot get it. If the Government would provide proper facilities for storing away that bait and selling it to the fishermen at the time it is needed the catch of fish would be quadrupled in many places. Together with that, there must be the necessary cold storage on the railway for carrying the fish to the market centres. The people are beginning to realize what a magnificent life-giving, strength-producing food the codfish, herring and salmon of Nova Scotia and British Columbia are.


Robert Hamilton Butts: And a brain producer.


Daniel Duncan McKenzie: Yes, 'and it is needed most strenuously.


Some hon. MEMBERS:: Oh, oh.


Daniel Duncan McKenzie: I had no reference to my hon. friend. My good friend from Cape Breton (Mr. Butts) knows me too well to think that I would say that he had no brains. That is not the worst part of the business. I wish to take the opportunity that this Bill gives me of placing before the minister and the Government the suggestion that they should devote some time, thought and energy to the development of the fish trade of this country. Perhaps on some other occasion I shall have a better opportunity of quoting data that will show the importance of this -trade, but I hope- particularly in view of the observations made by the hon. member for Maisonneuve (Mr. Lemieux) that the Minister of Marine and Fisheries was a " live wire " and that he would like to see him in charge of the Department of Trade and Commerce-that he will give particular attention to this subject. This is the business of which he has charge at the present time, but according

to the Scripture those who are faithful and useful in small things ishall he put in charge of greater things and shall enter into the joy of their Lord.
I hope that he will show in the apprenticeship that is assigned to him in the Fisheries Department such ability as will justify the next Prime Minister-who will, of course, be the hon. gentleman who is now leading the Government-promoting him to the Department of Trade and Commerce, where it is suggested his energetic personality will find fuller scope.
I wish to bring to the attention of the Minister of Militia and of the Acting Prime Minister where some of his money that is to be expended in connection with war gratuities and demobilization should go. An Order in Council was passed by the Government some time after the 11th November (when the armistice was signed) giving gratuities to certain military men who	were	in	the	service on	thatdate,	but	not	to	those who	had
served their country at least equally as well but had been already demobilized. Here is a concrete case in my own town. The 94th Highlanders, a regiment of militia, was ordered to camp at North Sydney in the early stages of the war. It was put on home service and formed a sort of nucleus to which recruits were sent, trained to some extent, and as rapidly as possibly moved overseas. I am told that something like 1,200 men passed through the 94th to the front, and that the 94th itself would have gone had it been given the opportunity. A short time before the" 11th of November the 94th was demobilized to a very great extent and a new establishment was set up in which the military authorities retained a very small group of those men- The colonel, the captain, and a great many soldiers were sent home as being no longer required. Those men would certainly have been in camp on the 11th of November had it been left to their own volition and would be entitled to the gratuity. I submit to the Minister of Militia and to the Committee that that is not a fair deal, that those who for nearly four years rendered good and faithful service are equally entitled to the gratuity although they were obliged to leave the regiment before the 11th of November. This phase of the subject has been strenuously presented to the Government and to the minister already from several quarters and I need not elaborate it further. I have not heard what the decision of the Government is, but I trust they will so amend the Order in Council that those who were demobilized before the day of the 
armistice will be treated as well as those who happened to be retained in the service.
There is another point I must bring to the notice of the Minister of Militia in connection with the 94th. When that regiment was called out first the colonel-Colonel J. D. McRae-was obliged to hire a house in the city of Sydney while proper barrack accommodation was being prepared for the officers. When the regiment went into camp under canvas the house was given up; and I am very much surprised that the department up to this date has refused to reimburse the rent paid by the colonel. I have not had an opportunity of bringing this matter to the notice of the minister himself, although I have had it up with the department and have been turned down. I had practically given the case up as hopeless, but seeing that this vote covers money to be paid out in connection with matters of this kind I wish once more, with the greatest possible confidence, to ask the minister that this rent 

it is only $75, a very small amount indeed for the department, but too .much for a poor officer to pay out-be reimbursed to Colonel McRae.
Major-General MEW^RURN: I am very glad that the hon. member has brought these two matters to my attention. With regard to the war gratuity, I can assure him that personally it will have my sympathetic attention. It is in the hands of a committee, and I hope the situation will be satisfactorily dealt with. With regard to Colonel McRae, I think my hon. friend should not be tired in well doing. He says that he has already brought it to the attention of the department and been refused; but I can assure him that I will see what the trouble is.


Robert Hamilton Butts: I would not have been inclined to speak at all to-night were it not for what I might almost describe as the discourteous manner in which I wa3 treated by the hon. member for Guys-borough and the hon. member for Maison-neuve. I attempted to ask my hon. friend from Maisonneuve whether or not there was any difference at Lloyds between the Atlantic seaboard of Canada and the British Islands in respect to the rates for marine risks. M'y hon. friend did not see fit to allow me to ask the question.
I do not think there is any difference in the rates. I intended to ask my hon. friend (Mr: J. H. Sinclair) whether it was not true that much British shipping in Canada is put under'Norwegian register in order that

it may be operated more cheaply. My hon. friend would not allow me the question. The Storstad, when she rammed the Empress of Ireland in the Gulf of St. Lawrence, was a British ship, but under Norwegian register. Nearly every ship that has carried coal from Sydney Harbour to Montreal, Three Rivers and Sorel during the last twenty years has been a British ship under Norwegian register.


Mr. BUREAU:: How could that be?


Robert Hamilton Butts: I do not know, but it is so. They were British ships under Norwegian register.


Jacques Bureau: It could not be.


Robert Hamilton Butts: It is true. Now, a Government ship was sent from Canada to the West Indies under special conditions and my hon. friend (Mr. J. H. Sinclair) complains that the ship came back from the West Indies to New York with a cargo. Did he want her to come back empty. The hon. gentleman is a shipping man; he owned three of the poorest ships that ever crossed the Atlantic. My hon. friend criticises the Government for taking up shipbuilding. Are we to wait until the time when shipbuilding will pay? Was the building of the Canadian Pacific railway delayed until every one was sure that it would pay? No, we built it in order that it would bring returns to the country and afford transportation facilities, and that is the policy I hope the Government will carry out in respect to shipbuilding. There are many reasons for believing that at Sydney Harbour we can procure the cheapest pig iron in the world; why, therefore, can we not produce the cheapest ships in the world? The only advantage that the Old Country has over us in the matter of shipbuilding is the advantage of wages-and surely we do not wish to curse this Dominion with cheap labour. About twenty years ago we built a ship at Three Rivers-it was either the Montcalm or that other little ice-breaker we have down there-and it did not cost so very much more than it would have cost to build it in the Old Country; the difference was simply the higher wages, which is the cost of labour, I repeat that we do not want to curse this country with cheap labour.
We have at Sydney Harbour blast-furnaces, open-hearth furnace and a plate mill in course of construction. We have a rail mill that has sent from Sydney Harbour around the Horn to British Columbia rails at a lower price than that at which you could send them by rail from the Sault.
We have opportunities for the greatest shipbuilding in the world. Even if within a decade, even if within our lifetime, it should cost a little more to build ships, why should we not be anxious to develop the shipbuilding industry. The member for Maisonneuve (Mr. Lemieux) and the member for Antig-onish and Guysborough (Mr. J. H. Sinclair) are simply trying to stand in the light of this country and to stamp out an industry that represents one of Canada s greatest possibilities. We have our coal; we have our coke; we have our iron; we have our steel; we have our blast furnaces; we have our open-hearth furnaces; we have plate mills in course of construction; we have a rail mill from which rails have been shipped in competition with England to be used in railway construction in the north of Ireland, Tight in Belfast. In view of these facts it is too bad that prominent public men should try to throw cold Water upon Canada's greatness. All we want is more people, more money, and more development, and the sooner we get it the sooner shall -we see in Canada ships built as cheaply as they are built on the Clyde or at Belfast.
The only insurance that it in any way high in Canada is the insurance applicable to the upper reaches of the St. Lawrence, and that is quite natural. It is a large inland waterway that must be piloted for six or seven hundred miles, where ships without skilful pilots are in danger of being run ashore. But we do not know of any heavy insurance in respect of the ocean ports of Nova Scotia, New Brunswick or Prince Edward Island. When you come to run six or seven hundred miles on the upper St. Lawrence or to the upper reaches of lake Superior, which is 2,500 or 3,000 miles inland, what can you expect? Insurance must be heavy; pilotage must be heavy. From the time you leave Cabot strait, between Nova Scotia and New Brunswick, you must have two, three, four or five pilots on each ship. Shipping in Canada is one of the big questions, and the sooner we give encouragement to a Government that is prepared to go ahead with a bold policy in the matter, the sooner we shall become a shipbuilding country.
It is not many years ago; it is within the lifetime of almost every man in this Chamber that Nova Scotia built the County of Yarmouth, the largest wooden ship that ever floated on the seven seas of the world. I can remember when she ran ashore on a ledge in Sydney harbour. Is there any reason for believing that Nova Scotia can-

not build the largest steel ship in the world, when she has the men and the coal, when* she has the steel and every other commodity that enter into the building of a ship? That is the situation, and I say: All power to the Government that goes ahead with a real, good, strong, forcible shipbuilding policy, and let the Government give us the largest plant in Sydney harbour it possibly can.


Mr. COPP:: I desire to direct the attention of the Minister of Militia (Mr. Mew-burn) to a matter that is important in the passing of this measure, because a certain portion of the money that we are voting in this Bill is to be expended in demobilizing the different military depots throughout Canada. Since the armistice was signed, there have been kept in military district No. 7 at St. John, N.B., some two or three or four hundred men. iSome have been released from duty at different times so that I cannot say exactly how many men are at present engaged in this garrison duty, whatever that may imply, at this military depot. Quite a large number of these men are farmers' sons who have been kept there during the winter month's when they were much needed at home to look after the farm work and provide wood and other fuel for the winter as is always customary in country districts. Some of them whom I know well, are married men With farms of their own. I have given this particular matter a great deal of consideration; I have visited the place on several occasions; I have talked with the officers,
[DOT] and, in my judgment, theTe is no reason for keeping two or three hundred men at St. John doing garrison duty when they do not want to remain there. If they were returned men waiting to be discharged who wanted to remain there, then I am prepared to say that they are entitled to re-cieve their per diem allowance and whatever is necessary to keep them there.' But these were men who were called for duty to St. John after the armistice was signed and who have been kept there ever since at the expense of this country. They are doing no good either to this country or to themselves; they are absolutely idle around this military garrison or depot or headquarters, or whatever may be the correct military term, and I * would suggest to the minister that these men should be allowed to return to their homes, thus saving the country the expense of keeping them there and permitting them to render valuable service on the farms, as is demanded by the men who own farms 
and by the fathers of those who are not farming for themselves. It has been suggested to me by one of the men and one of the officers that the only good reason for keeping these men at St. John is because the officers who are there .must have some excuse for remaining. I asked an officer whom I know very well what they were doing at St. John and why it was necessary to keep these men there. I had been down there and examined the situation, and the men were apparently not doing anything. This officer turned round to me and said: " Copp, what do you expect us to do?" Hon. members can draw their own conclusions. I have not the slightest objection if the officers who are there are returned men and it is necessary to keep them there in the pay of the Government. If that be the case I hold up both hands and say: Do so. But it is not necessary to keep two or three hundred men at St. John who do not want to stay for that -purpose. I have had communications; I have had correspondence with the officers in regard to the matter, and this is a mere case of keeping men there against their will; it is doing the state no good; it is an expense to the country, and it is causing a hardship to the farmers, because the men ought to be engaged in the work of greater production. I would, therefore, urge the Minister of Militia as strongly as I can to look into this matter and release these men from further service.
Major-General MEWBURN: There are eleven military districts in Canada. The hon. gentleman refers to Military District No. 7, St. John, New Brunswick, where we have maintained a very small garrison unit which is considered, from a military standpoint, absolutely necessary for a certain period during demobilization. We gave the men who have seen service at the front the first privilege of discharge, and some men were retained there, but after the armistice was signed nobody was taken there except some men who volunteered. The men are being released as rapidly as possible, and I am glad to inform my hon. friend that, on account of the opening of navigation in the St. Lawrence, very few troops now disembark at St. John and most of that unit will be demobilized -within a few weeks.


Arthur Bliss Copp: If the minister will say: " Within a few days," that will be of great importance to the district.
Major-General MEWBURN: If, as my hon. friend apparently thinks, the demobilization of these men were simply a matter

of walking out and locking the door, I would be very glad to have it done, but there is a little more required in. the way of cleaning up matters than the hon. member would imagine.


Arthur Bliss Copp: The minister no doubt desires to give correct information, but when he tells me that it was necessary to keep these men at St. John doing garrison duty I doubt it. I do not profess to be a military expert, but I visited the camp, or drill hall, or armoury, or whatever it may be called on several occasions; I inquired of military men and I have-never yet found a military genius, so far as wc have them in the province of New Brunswick, who could give me the slightest reason or excuse for keeping the men in the city of St. John for any length of time they have been kept. The minister says the garrison will be demobilized in the next few weeks-
MajorJGeneral MEWBURN:	Possibly
sooner.


Arthur Bliss Copp: The few weeks between now and the first of June are the very three weeks in which the people of the province of New Brunswick will suffer for lack of farm help. I know of three cases almost within a stone's throw of my own office. I know the farms from which these men come, I know all the conditions, and when I asked the officer commanding at St. John to have these men released he wrote me that an. investigation had been held and gave me what he said were the facts. But the so-called facts were as absolutely unfounded as anything could possibly be. I say that because I know the facts- These are the things which bring military affairs into disrepute in this country. So long as the war was on, I never said a word to stop a man from going into the training camps, but since the armistice was signed I have on different occasions written to the officers about certain oases, but have never received the slightest satisfaction. In one case I tried on different occasions by personal request and correspondence to get a married man home because his wife was lying sick in bed. I went down and saw him at St. John. He was performing no military service at all; he was not doing twenty minutes work a day; he had never had any training, and there was no need for any training. After some three or four weeks I had the slight satisfaction of securing five days' leave for him so that he could go home and look after his wife and family. Now this is not reasonable, it is not just,-
The minister may say that it was necessary to have the men there for garrison duty. However that may be, I say it was not necessary to keep a married man there who was required at home to look after -and protect his sick wife and family.


Mr. ROBB:: I wish to support what the hon. member for Westmorland has said as to the demand from all over the country, not only from Western Canada but from Eastern Canada as well, for the release as soon as possible of the men who are required on the farms and in the industries of this country.
I rose more particularly to refer to the statement made by the Acting Prime Minister last evening as to the accounts of Canada. He gave a very complete account of our war expenditure, but did not give the statement that I more particularly required as to the exact financial position of the country. However, as we are led to believe that the Budget will be brought down shortly, .1 suppose that the Minister of Finance intends to give that statement then.
The Committee is no doubt aware that the vote of $350,000,000 now under consideration represents a sum greater than the total debt of Canada prior to 1914. The Government at this session are asking for enormous credits, and I am not sure that the country fully realizes the magnitude of these credits. The Estimates that have already been brought down provide for an expenditure of $437,000,000 odd; this item is $350,000,000; the level crossing Bill calls for an expenditure of $200,000; highways about $20,000,000, and housing $25,000,000. A total of $832,000,000 is asked for, and we are yet to have Supplementary Estimates, judging from the statements made by the different ministers. Hon. gentlemen on this side of the House do not intend to criticize this vote so far is it relates to defence and demobilization. We have supported during the war all the votes the Government has taken for war purposes.
Last evening as I listened to the Acting Prime Minister I could not help thinking that he was setting up a man of straw for the purpose of knocking him dawn. He was trying to make the country believe that we on this side of the House were not in favour of encouraging the manufacturing industries of this country. The facts are quite to the contrary. The Liberal party has never discouraged the manufacturing industries of this country. In fact, the manufacturers as well as the farmers of this country enjoyed their greatest pros-

perity during the fifteen years of the late Liberal administration. It never was, and is not to-day, the policy of the Liberal party to do anything to injure the manufacturing industries of this country. We wish to help them, and we believe that the best way to help them is by removing certain restrictions which to-day are an incubus upon them, as well as being very harmful to the agricultural interests of this country. We believe that the larger and the wider the market we can obtain for our agricultural products, the better it will be for the manufacturing interests of this country.
Last evening the Acting Prime Minister laid great stress upon the rate of exchange and the adverse trade balance against Canada. I wish to say to him that he and his Government are in some measure responsible for the adverse trade balance against Canada at the present time. I would remind him, so that he may deal with the matter when he brings down his Budget, that his action in connection with the pulp and paper industry in this country did very much to create an adverse trade balance against us. Had he treated properly the pulp and paper industries of this country, had he allowed them greater freedom in exporting their product, it would have been better for Canada and better for that industry. If that had been the policy of the minister, instead of the trade being curtailed, it would have expanded.
Now let me give a case in connection with agricultural products. No later than last fall this Government put an embargo on dairy products going out of this country. They fixed the price on the products of butter and cheese factories. The farmers all along the international line'-the embargo did not apply for the whole length of the international line because deputations came here from Manitoba and Saskatchewan protesting against the embargo -these farmers, when the price of butter and cheese was fixed began to ship their milk and cream to the United States. So the Government put an embargo against dairy products entering the United States. When we buy corn from the United States for our dairy herds, we are ready to pay for it with butter and cheese. Otherwise, we must pay in money. That is another reason why we have an adverse trade balance, and this Government have largely contributed in bringing it about.
The hon. member for Centre Toronto (Mr. Bristol), whose voice I regret we

do not hear oftener in this House, referred to a condition that prevailed on the lower St. Lawrence in connection with some ship at Seven Islands. He made the statement that a mill at Seven Islands had been offered a 10,000-ton ship which they could not use, but that had they been able to get a ship of lesser tonnage they would have been able to avail themselves of it. That reminded me that the Government, who boast that they are trying to do so much for Canadian industry, have again come in and crippled a Canadian industry in Ontario. That story of the Seven Islands brought to my mind the fact that there is at Thorold a very large paper mill, which I understand is controlled by the Chicago Tribune. They manufacture pulp at Seven Islands. This company own their own vessels which for several years have been carrying pulp from Seven Islands to Thorold, and which are under American register. Sometime early this spring the American Lake Shippers' Association convinced their board at Washington that it would be a good thing to cancel the reciprocity in trade that existed between the United States and Canadian vessels on the Upper Lakes, and the Canadian Government retaliated. The result is that boats of Canadian register are not now allowed to trade from one United States port to another, and our Government have brought in regulations preventing boats of United States register from trading between two Canadian ports. This mill is unable to get boats to carry pulp from Seven Islands to the mill at Thorold, and no later than last Saturday a representative of that company, whom I accidentally met at the Chateau Laurier, told me that unless they could obtain vessels somewhere the mills at Thorold were going to be closed down-. This is one example of what our Government are doing to " assist " Canadian industry- assist in crippling it. Let that same condition be protracted until the fall, and when we commence moving our grain and wheat crop from the head of the Great Lakes the farmers of Western Canada will be at the mercy of a combine of shipowners in Canada. These shipowners will fix the rates and the western farmer will have to pay the piper. But he will not have much reason to complain because his representatives in this Parliament support a Government that is responsible for these conditions.
Last evening the hon. Acting Prime Minister made much of the important

duties that Mr. Lloyd Harris was discharging-what he had done for Canada at Washington and was now doing at London. I could not help thinking of the position that Mr. Lloyd Harris occupies. Mr. Lloyd Harris, a very good personal friend of mine, left the Liberal party because that party wanted to obtain wider markets and trade with the United States. That was his only reason. Now how can we hope to get extended business for this country when we send as a representative a man who only a few years ago was absolutely opposed to export trade, and whose policy was the home market and only the home market? If my information is correct, we in Canada are suffering from an unfortunate condition of affairs in England. I am making this statement publicly, so that the ministers may interest themselves in it, because the matter to which I am about to refer is common gossip in London, England, and in Canada. The statement is that in London the secretary or some of the officials in the High Commissioner's office and some of the officials in the Trade Commission are not on speaking terms, and that when communications from Canada, intended for certain of these officials in London, go to the other officials, instead of being mailed directly to those in London for whom they are intended, they are sent back to Canada and have to be re-mailed to the proper parties. The sooner that sort of thing is straightened out the better it will be for Canada. These conditions prevail, not amongst the men higher up- I have no fault to find with Sir George Perley or Sir Edward Kemp; they are suffering from the incompetence of understrappers who are running the office over there to the detriment of Canada-and the sooner this Government instruct their representatives over there to get rid of these understrappers who are causing injury to the trade of this country, the better it will be for Canada.
I am sorry I have taken up so much time. I do not intend delaying the passage of this Bill, but there is another matter to which I wish to draw the attention of the Acting Prime Minister so that he may be in a position to make a statement in regard to it when he brings down the Budget. Or perhaps the Minister of Railways (Mr. Reid) may deal with it when he has his estimates before us. During the past few years we sold a great many rails which had been ripped up from the railways throughout Canada. Those rails were sent overseas, and I have never seen in any of the printed statements any account of
them. I think the people would like to know who owes us for those rails and if we are to be paid for them, or if they are taken into consideration in the accounts that will be filed of the indebtedness to us by Germany and those who owe us.


William Thomas White: The question as to the value of the rails which were removed from the tracks of the Grand Trunk Pacific, and, I think partly from the National Transcontinental and some other lines, is under adjustment at present between the Dominion Government and the Imperial Government. My hon. friend will understand that after a war of such long duration there must necessarily be a number of items subject to adjustment, and it will take considerable time before the transactions can be closed up. I said last night that 1 would make as comprehensive a statement as possible upon the occasion of the Budget speech with reference to the national debt of Canada, especially its increase during the war, and our estimated expenditures for the coming year, our borrowings of last year, and our proposed borrowings for the present year, and would aim generally to lay as fully before Parliament as I could the facts relating to our financial position, in which, I know, all members of the House and citizens of the country are specially interested at this time.
My hon. friend has referred to the state of exchange between Canada and the United States. It is quite unfavourable to Canada, almost to the extent of 3 per cent. The hon. gentleman is a business man and will not have failed to observe that exchange between Great Britain and the United States is still more unfavourable to Great Britain, approximating 5 per cent. It is not correct that we have an adverse balance of trade to-day, as stated by the hon. member. Our balance of trade is favourable and has been exceedingly so during the last two or three years of the war. All the products .that Canada is selling to-day outside of our own borders are being paid for by outside money, that is to say, by what we call technically, exchange. To ascertain a country's real exchange position the whole world position must be taken into account.
I stated last night that one reason why exchange was unfavourable was that by having to provide so much money here in Canada to pay for our products which, in normal times, would find outside money and thus redress our exchange, we neutralized for exchange purposes that amount of our exports. If Great Britain was able to find exchange outside of Canada, that is to

say credits in New York, or if she could buy in London exchange for our wheat, flour and other products which she purchased, our Neiw York exchange would speedily rectify itself.
My hon. friend referred to a matter that I do not desire to enter upon at any length to-night, but which has been discussed on more than one occasion in this House, and that is the action taken by the Dominion Government in regard to newsprint. He drew the inference that on account of that action our exchange was not as favourable as it might otherwise have been in the United States. My hon. friend is no doubt aware that the amount of newsprint consumed in Canada by Canadian publishers is only about eleven per cent of our entire output, and therefore, I submit that the regulation of the price in Canada with respect to that eleven per cent has not any vital hearing upon the question of exchange between Canada and the United States.
The action of the Government was taken, as my hon. friend knows, for the purpose of providing, in a very critical time, newsprint at reasonable rates to the Canadian publishers who were very hard hit by the war, especially during the first three years. I am quite satisfied that when the matter comes up for more extended discussion, as my hon. friend indicates that it may, I shall be able to carry the judgment of the House and the country in favour of the proposition that the action of the Government was well advised and in the national interest at the time it was taken. The control of newsprint has continued down to the present time; it will continue until the end of the war, and until, I think also, the Paper Tribunal, which has been created by the Government for the purpose of hearing an appeal from the Newsprint Commissioner, renders its decision. There was submitted to it the question of the price of newsprint for the period since-I am speaking from recollection-July 1 of last year. No Government likes to take, even in war time, any action by way of restriction. It is a very unpleasant thing to do. It is done only from considerations of national duty and the national interest, and these were the motives inducing the Government, in connection with newsprint, to put into effect the Orders in Council and regulations referred to by my hon. friend.
The action of the Government is not singular in that regard. I believe that in Norway, which was a neutral country, such action was taken quite early in the war.
	'
In the United States, which takes the largest portion of our newsprint production, there was regulation, as my hon. friend knows, of the price of newsprint. There is regulation in that country to-day. I think my hon. friend is scarcely fair in his criticism of the Government for taking that, what we regard, very necessary action. My hon. friend also referred *0 the regulations which were in effect some little time ago prohibiting the export of butter.
Mr. ROiBB : The embargo.


William Thomas White: My hon. friend knows that no Government would think of taking action of that kind, which is quite unpopular among the farming community, the most influential part of our population, without there being grave reasons in the national interest. It was taken in war time and as a war measure. It was a necessary war measure at a time when it was hard for our Allies to obtain the needed supply of fats. I can assure my hon. friend that that action especially was not taken by the Government on its own initiative without its being convinced of its necessity from the standpoint of the allied cause and of the proper feeding of the armies and the people of the allied countries.
I shall not enter into a discussion of the question of reciprocity. I shall also not follow my hon. friend the leader of the Opposition (Mr. McKenzie) in what he said as to the naval policy. I had so many all night sessions in 1913 in respect to that interesting and important subject that I have not quite got back my sleep yet. I therefore hesitate to embark upon the discussion of so highly controversial a question. I had the view and I think I said so on more than one occasion, that the country could have stood both a Canadian navy and the contribution of three dread-naughts. Sometimes a combination policy is a very good one. We have found that out since the war, but those were the days in which, quite properly, I think, we scrutinized expenditures very carefully and an undertaking of that kind seemed to be formidable.
I am not unmindful of what has been said by hon. friend from Maisonneuve (Mr. Lemieux) in regard to the desirability of the Government considering carefully the question of expenditures and I take in good part what he said as to a minister who has gone through the war probably becoming accustomed to expenditures of large sums without realizing their full signifi-

cance. But, I endeavour to check myself up from time to time and il may say to my hon. friend the leader of the Opposition, who also referred to the subject, that I do not in the least minimize to the House and to myself the extreme gravity of these large expenditures.
The expenditures which we made during the war were imposed upon us by military exigency. Canada did not count the cost during the war. She put forth her maximum effort and if the war had continued as long as this or until a year from now, instead of diminishing, we should have been increasing our efforts. Expenditure during war is, I will not say beyond the control of the Government, but in many respects it is practically so. The nation is doing its utmost to win the war. Every effort is being put forward, every energy strained, the public are in no mood to accept the excuse of financial considerations standing in the way of anything that appears necessary to promote the national effort in the struggle; consequently the position of the Finance Minister during the war is one largely of finding money for huge military expenditures. He endeavours to exercise a certain measure of control but after he has done his best, while the war is on, there is a vast amount of expenditure that is uncontrollable and it is his duty to find the money.
Now, the war is over, but, as I pointed out last night this is a war year.
We had the situation confronting us, when the armistice was declared, which I mentioned last night, and which threatened to throw out of employment some 200,000 people; we had the prosipect of so many of our men returning, and returning quickly, to be reabsorbed into civil life. It is a time of great unrest all over the world, we are not exempt from that unrest, and with every desire to keep our expenditures down I am satisfied that the policy for this year is to make expenditures upon a large scale for productive undertakings in order to furnish as much work as possible. Our people have suffered, as people all over the world have suffered; the cost of living is very high, and the combination of unemployment and high cost of living is one which leads to serious situations wherever it occurs.
With regard to that, may I put forward a suggestion which has occurred to me on more than one occasion? The concomitants of war are always plague and famine. The world has had plague in the shape of influenza, and to-day, if the world is considered as a whole, there is famine. There
is no famine in Canada, for we are a food-producing and food-exporting country. But if we take into account central, southern and southeastern Europe, parts of Belgium and France, and especially Russia, we realize that agriculture on that continent has been partially destroyed by the war. Millions of men have been withdrawn from tillage, cattle have been killed, herds necessarily have been allowed to run down, horses have been taken for the use of the armies, implements have been destroyed on a vast scale, particularly in Russia during the agrarian risings throughout that great republic, and if we take the vast tract of desolate occupied territory, it is not too much to say that the world is suffering to some extent from famine. Now, that makes a great world demand for foodstuffs; that in turn causes high prices, and, as I stated, we have here, as we have in all other countries, high prices for the commodities that are essential to life. If we should have also unemployment on an extensive scale throughout this country the consequences would be quite serious.
The Government has endeavoured to do its best to meet that situation. I do not say that every action of the Government has been the wisest possible; I am only speaking of the average of what we have done since the armistice in November last. I desire again to assure the House that I realize the enormous liabilities that have accumulated as the result of the war, and that I am very vitally seized of the importance of not engaging in any expenditures that are not productive or are not necessary to keep our industries going to the extent of furnishing employment to those of our population who may be in danger of unemployment and who have rendered such patriotic service during the war-
I think I have covered nearly all the points adverted to by hon. members opposite. It was not my intention last night to reflect on hon. gentlemen of the Opposition as to their attitude towards manufacturing industries. I was simply answering the argument which was put forward, as my hon. friend will see on perusing Hansard.


Rodolphe Lemieux: I would Hike to ask my hon. friend to be a little more explicit about the purpose of subsection (d):
-the carrying- out of any measures deemed necessary or advisable ,by the Governor in Council in consequence of the war;
Could he give me a concrete case?


William Thomas White: That is really put in to meet a case which could not well be



foreseen, but which might arise. My hon. friend will find that precise section in the first and second War Appropriation Acts.
I remember, it was drafted in my office by Mr. Ross, who was Assistant Deputy Minister at the time, and I think I suggested the word "deemed." During the war cases arose from time to time which could not have been foreseen, and which were clearly cases where the Government was justified in deeming the expenditures necessary to be war expenditures because they arose out of the war. I am afraid I cannot give a concrete case to my hon. friend without having time to look into our expenditures- But it has not been drawn to my attention that the clause has been abused, and I do not think it is likely to be abused.


Mr. FIELDING:: Perhaps my hon. friend might approach the question from the other side. Would he tell us what could not be done under that clause? I think that under it they could get an Order in Council to hang you, Mr. Chairman. I really do not see any limitation to the power of the Governor in Council under the clause. I am not opposing it, because it has been in previous Acts and no harm has come of it; but it strikes me that that is a very broad power indeed, and I cannot imagine anything done by the Governor in Council under it that would not be deemed legal-


William Thomas White: I am inclined to think my hon. friend is right. I would point out to him that, in 1914, when the war commenced, Parliament passed the War Measures Act, which practically devolved upon the Government the legislative powers of Parliament. It was an extraordinary power, implying great confidence, and I have always felt that the Government should exercise that power keeping that fact in mind. Speaking generally with regard to the War Measures Act, I believe that almost more than any other single thing except the patriotism and courage of our soldiers, that Act enabled Canada to achieve the degree of success in the war which she did achieve. I have heard men in the United States-where the system was not nearly so flexible until they had been in the war for some time, when the entire executive and, I think, legislative power was vested in the President-refer to this War Measures Act and the extraordinary power that it gave to the Government to deal quickly with questions as they arose. It would be quite impossible to provide in Estimates, or by legislation in advance, for all the multitudinous cases arising during

the war; and this War Measures Act, while it did give the Government extraordinary power and was concurred in by the Opposition, and, as I say, implied the reposing of great confidence in the Government- which for my part I have always recognized and gladly acknowledged-enabled this country to do what it could by no means otherwise have -attempted to do in the carrying on of the war. I wish to say that, and I would like to draw my hon. friend's attention to the powers devolved upon the Government by that Act-powers which would never have been given, and never should have been given, except in war time.
The War Appropriation Acts of the past two years and this War Demobilization Act are intended to give the Government power to deal, as to expenditure, with all matters arising out of the w-ar. It is very wide, I admit. I am a strong believer in the Government bringing down estimates in detail rather than in blanket votes, -showing as far as possible the purpose for which the expenditure is to be made. That is a sound principle, in ordinary times -at least. This year I took up in my office the question of what amount we should provide in this Demobilization Bill. The instructions I gave were that the estimates of my own department and of all other departments to which the request was transmitted should contain . practically all the items we could specify, and that the Demobilization Bill should cover only the war gratuity, demobilization expenditure, and other items that could not be specified with accuracy in an estimate. I do not know how far we have succeeded in doing that, but we appreciate the confidence expressed in the vote and will endeavour to administer it as trustees should.


William Stevens Fielding: I cordially agree with the hon. gentleman that the War Measures Act was a necessary and proper Act. During the war, owing to the patriotic feeling of the country, people were not critical; you -could get pretty nearly anything that was asked for in 'the name of the war or for the purposes of the war. But the time has arrived when the people will be more critical, and if we continue war measures at a .time when there is no longer any war, there will be keener inquiry and more criticism. I do not object to the passing of the Act, but I think it is just as well that we should begin to adapt ourselves to the condition of peace which is happily upon us.


William Thomas White: I entirely agree with my hon. friend.


Rodolphe Lemieux: Could the Government, for instance, buy the wheat crop under this provision of the Bill?


William Thomas White: Well, I suppose if the Government stated that it was deemed to be a war purpose, the Government's discretion would not be questioned, let us say, by a court. But it is not the intention of the Government to use this vote for that purpose, although a great part of it may be used for financing the wheat crop in the way that I intimated last evening.


Mr. VIEN:: 
Thomas Vien: The Minister of Marine told us to-day that he was asking Parliament to vote $30,000,000 to meet his shipbuilding programme of last year, and that a further amount would be required for the programme that he is to lay before the House on a future day. What amount of the $350,000,000 is to be expended upon 'transportation facilities, and in what way? Is the expenditure to be for the building or the purchase of ships?


William Thomas White: It is a general clause to enable the Government to take such action as may be necessitated by conditions to provide transportation for our troops or for our commerce.


Thomas Vien: It could hardly be understood as being for the transportation of troops, because it is for " the promotion of trade and industry and the transportation facilities therefor." We could hardly be expected to provide for transportation facilities outside of the building, buying of chartering of ships. How could we expend money under this Bill for the promotion
of transportation facilities except through the Department of Marine and Fisheries or Naval Affairs?


William Thomas White: A part of this money could be used for shipbuilding. I requested that the estimate for shipbuilding for 1919-20 should be in the Supplementary Estimates for this year, but down to March 31 the expenditure for shipbuilding would come out of last year's vote, if that vote were sufficient for all purposes for which it was voted, including this. If there should be a shortage there, this vote, I think, would enable us to take it up. The wording of section 2 practically follows the wording of the corresponding section in last year's war vote, with the changes which, in the opinion of Council, were necessitated by the altered conditions. We wanted to have it wide enough with the remainder of the vote of last year, to meet any expenditures in excess of the war vote of last year, if there should be such, as well as expenditures of this year. So far as I know, no specific expenditure is in view under this clause.


Thomas Vien: I do not believe that in the clause in the Act appropriating $500,000,000 there was any specific amount mentioned under the title that we now find in subsection (c) of section 2. I do not remember that last year we voted any amount of money for the promoting of trade and industry and transportation facilities therefor. This is entirely new, and if the term " transportation facilities " is not to be construed as meaning shipbuilding, I hardly see how we could be called upon to give to the Government the right to facilitate transport and expend any money for that purpose unless the items are brought down in the Estimates of some department. The Acting Prime Minister does not appear to know much more on the subject than I do. This is not for shipbuilding; it is not for the chartering of ships. The demobilization of our troops is covered by other sections, and this is not for carrying war materials back to this country. If it is not for the building of ships, how should we be called upon to vote any money for the payment of transportation of our goods or for bringing into Canada the goods we buy? I fail entirely to see any purpose which would commend itself to this Committee for which we would give to the Government a blanket authorization to spend any portion of the $350,000,000, if it does not come under the title of shipbuilding. I would, therefore,

suggest that the words " transportation facilities " be struck out.


Mr. CANNON:: Clause (d) of section 2
says:
The carrying out of any measures deemed necessary or advisable by the Governor in consequence of the war.
Is this a revival or extension of the War Measures Act?


William Thomas White: This is a vote of money, and it can be availed of by the Government for the carrying out of any measures deemed necessary by the Governor in Council in consequence of the war; that is to say, in connection with any measures relating to demobilization, or to many questions w'hieh might arise. I am sure it does not extend the powers of the Government under the War Measures Act beyond the limitations imposed by Parliament in that Act.


Lucien Cannon: I think it does.
Some lion. MEMBERS:	Carried.


Lucien Cannon: Hon. members need not be in such a hurry. The section will be carried when we are through with it, and not before. Some hon. members do not seem to appreciate the importance of this clause, and we shall discuss it as long as we deem it necessary to do so. I am not quite satisfied with the explanation given by the Acting Prime Minister. The scope of this clause is very wide. This is for carrying out any measures deemed necessary in consequence of the war, not for the prosecution of the war, because the war is over. How far will it go? Where will the Government stop? Now that the war is over, are we, by this Bill, going to have government by Order in Council, just as during the past five years? I do not think the people of this country would be satisfied with such a condition of things.


William Thomas White: Section 2 authorizes the paying out of a sum not exceeding $350,000,000 for the purposes mentioned, amongst others, for the carrying out of any measures deemed necessary or advisable by the Governor in Council in consequence of the war. The purpose of this is to place the Government in funds to carry out measures which it is lawfully authorized to carry out. This is not a measure like the War Measures Act, authorizing the Government to do specific things.


William Stevens Fielding: I understand from the Acting Prime [DOT] Minister that these words were taken from similar Bills of previous years?


William Thomas White: With certain
changes to meet altered conditions.


William Stevens Fielding: I have in my hand the $500,000,000 loan resolution of 1917, and I do not find these words in it. I have not looked at the others.


William Thomas White: Which words does my hon. friend refer to?


William Stevens Fielding: Clause (d).


William Thomas White: I think they are in the Act of 1918.


William Stevens Fielding: If the minister says that they are in the previous resolution, I am content.


William Thomas White: I am not sure; I will send up for the Act.


Daniel Duncan McKenzie: If the words of clause (d) were used in the Act of 1918, that could be very readily understood, and it would be quite proper, because the war was on and unforeseen conditions would have to be provided for. The minister, however, may see when he gets the Act. There are so many things in connection with this very comprehensive clause, it is difficult to exhaust them all. Is the $70,000,000 for which the Government have made the country liable by Order in Council, included in this appropriation of $350,000,000? I refer to the $20,000,000 for roads in the provinces, $25,000,000 for housing, and $25,000,000 for trade with Rumania?


William Thomas White: The first two would not be. The Highways resolution is on the Order Paper, and it would provide for	payment	out	of	the	ConsolidatedRevenue Fund. The vote for Housing is in the Estimates, and it will also provide for	payment	out	of	the	Consolidated
Revenue Fund. The credits which I mentioned last night would be payable, partly out of this appropriation and partly out of any balance from the last vote.


John Howard Sinclair: Did the War
Appropriation Act not provide for an expenditure of $500,000,000?


William Thomas White: Yes.


John Howard Sinclair: I think the minister stated some time ago that a large portion of that appropriation was still unexpended.


William Thomas White: Yes.


John Howard Sinclair: Why, then, do we say in clause (e), "For the purposes mentioned in the War Appropriation Act, 1918, and in excess of the amount authorized by the said Act?"


William Thomas White: If any excess. I am not able to state precisely what the expenditure on war account would be for the last year. This provision was in the War Appropriation Act, 1918, and it was found necessary, to take care of an expenditure in excess of the amount authorized for the previous year. The corresponding clauses in last year's Act are as follows:
(a)	the defence and security of Canada;
(b)	the conduct of naval and military operations in or beyond' Canada;
(c)	promoting the continuance of trade industry and business communications, whether by means of insurance or indemnity against war risk or otherwise;
(d)	the carrying out of any measures- deemed necessary or advisable by the Governor in Council in consequence of the existence of a state of war; and,
(e)	payments made for the said purposes during the fiscal year ending the thirty-first day of March, nineteen hundred and eighteen, in excess of the amount authorized by The War Appropriation Act, 1917.
Now the Government deemed shipbuilding to be a war measure, and payments were made up to the end of the last fiscal year, and I think have been made since, on that account out of the War Appropriation. The paragraph to which my hon. friend has referred would undoubtedly authorize an expenditure upon shipbuilding, for instance, to the extent that is necessary.


William Stevens Fielding: May I add in explanation that 1 sent for the Journals of 1914, and I find that in the original resolution the words to which exception has been taken are to be found exactly as they have been read by the minister for the year 1918. It so happened that the Act of 1917 did not contain them.


Thomas Vien: Last night the Acting Prime Minister stated that the net debt on March 31, 1919, was $1,584,000,000. What was the gross debt on the same date?


William Thomas White: Unless I could at the same time inform the House as to the assets on the other side of the account, especially the liquid assets, the information would not be of value in reaching a conclusion as to the financial position of Canada. It is the net debt that conveys the information which the hon.. member for Chateauguay-Huntingdon (Mr. Robb) asked me to obtain for him. My hon. friend knows that part of the gross debt would be the currency, although it might be secured by gold, by liabilities of banks in respect of loans, and by other assets.


Thomas Vien: At a later date would the minister state what the gross debt is, and how the net debt is arrived at?


William Thomas White: Yes; perhaps when the Estimates of the Finance Department are up.


Daniel Duncan McKenzie: How does the minister propose to borrow this money?


William Thomas White: It is not always wise to state precisely how one intends to raise money, but I think I said in the House a short time ago that it would be necessary to have a domestic loan this coming fall, possibly in September. We have some borrowing to do in New York between now and August next, but the borrowing under this Bill will be by way of a domestic loan. I shall not state to what amount we shall borrow, because I am unable to state that accurately. It might be that we would borrow temporarily from the banks and make a loan for the remaining amount. I say that because interest rates are pretty high, and it is advisable to limit the amount of the loan to as low an amount as possible, in order that we may not have to pay a high rate of interest over a period of years.


[Stage Direction]
Section agreed to.
On section 4-loans authorized:
Daniel Duncan McKenzie: This section empowers the Governor in Council to borrow " such sum or sums of money, less any amount borrowed in excess of the amounts authorized by any war appropriation Act." What is the exact amount that the minister proposes to borrow under the powers given him by this Act?


William Thomas White: This is to ensure that when this amount is raised we shall not have borrowed more than we were authorized by Parliament to borrow. For example, the amount we were authorized to borrow last year was $500,000,000, speaking from memory, and we received $670,000,000 by the Victory Loan. We took practically all that money, and I am not sure that the Dominion has not slightly exceeded the borrowing powers it had. The purpose of this section is to correct that so that when this money is borrowed it will be borrowed in accordance with legislation.


Daniel Duncan McKenzie: You have $150,000,000 more than was authorized last year?


William Thomas White: Yes, but there might have been some borrowing power in respect to the previous year. The hon.

gentleman knows that in connection with the Appropriation Bill every year when the general estimates afe passed there is a provision that the borrowing power of the Dominion is so much. Sometimes that is rather arbitrary, but it is put in just to ensure that the Dominion has the borrowing power necessary to raise the money provided in the Appropriation Bill. That is a point that has to be watched by the Finance Department. I asked my deputy to give attention to that in connection with this Bill so that we should not find ourselves without legislative authority in respect to all the amounts which we might have raised by loan in excess of actual borrowing powers at the time. It would not happen in ordinary times, but during the war it did happen that we slightly overborrowed.
Mr. MicKENZIE:	We had power last
year to borrow 3500,000,000. That loan brought to the Treasury 3650,000,000. There is therefore $150,000,000 for which we have no authority under the former Act. Is that to be regarded as part of this $350,000,000, or are we going to borrow out-and-out $350,000,000 under this Act together with the $150,000,000 standing over from last year?


William Thomas White: It will enable us to get this $350,000,000 in accordance with existing legislation. If there were not some such clause as this, when we came to borrow notwithstanding the vote of $350,000,000 we would find ourselves in the position of being able to borrow only,. say, $300,000,000. The situation with regard to the last loan was not quite as described by the hon. member. Let us assume that for 1917-18 we: had a war vote of $500,000,000 and expended $350,000,000. Then if, the next year, we had a vote of $500,000,000 and raised a loan of $650,000,000 the previous authority would apply to the excess on the second Bill. The intention is to enable us to raise $350,000,000 notwithstanding that we may have raised some moneys voted by Parliament but in excess of borrowing powers then existing.


Thomas Vien: Is it the intention of the Acting Prime Minister to have these war bonds which are to be issued on that loan tax-free, or are they to be subject to taxation?


William Thomas White: I am unable to make a statement with regard to that because I don't know what conditions we shall be confronted with when we float this loan. If we could float a taxable loan at

a rate of interest which would compare favourably with the rate which we should obtain on tax-free issue, and having regard to the amount of income tax we would receive if the loan were taxable, I would be strongly in favour of issuing bonds not tax-free. My hon. friend is no doubt aware that when you come to face a market you have to pay a much higher rate of interest, even upon Government loans, where your securities are issued subject to taxation, than you do where the securities are tax-free. I am speaking only from memory, because it did not occur to me that the question would arise to-night. In the United States I think there is a point difference between tax-free securities and taxable securities, and on a large loan the annual difference in interest which you have to pay as between tax-free and taxable issue is very large, and if one looked at it purely from the business standpoint he would calculate as to what revenue would likely be received from a taxable loan, and in that connection he would have to consider the exemption granted under our Income Tax Act. In this country he would, I am sure, reach the conclusion that the tax-free issue gives a better result in an annual budget than a taxable issue, because the amount which would be received by way of interest on a taxable bond would not be as great as the annual amount which the Government would have to pay in excess interest upon the taxable issue. There is another aspect of the matter to which attention must be given. Under an income tax graduated as ours is, there is reached a point at which there is a decided advantage to those of large incomes in buying the tax-free bonds. That is unfortunate. To some extent the issue of tax-free bonds is inconsistent with a steeply graduated income tax. One must consider market conditions, 'and whether outstanding issues which are in competition with him in his loan are tax-free or not, and be guided by the situation with which he is confronted. It is very difficult to say in advance what one will do until the time is reached. When we put out our first loan in New York and the second loan in 1917 the very first point that arose was that the bonds must be tax-free. You could not sell an issue at that time in the United States on taxable bonds for the reason that Canada was at war. They did not know but what they might be taxed at their source here, and you could not sell an issue of taxable bonds in the United States at that time. You could not sell a taxable issue of Cana-

dian bonds in the United States to-day. I raised the question as to whether these bonds might not be taxable to parties not resident in Canada, but on account of the proximity of Canada to the United States, parties in the United States want the benefit of the markets both of Canada and of the United States, and the result was that our bonds in our issues there had to be tax-free. Our bonds being tax-free there, people in Canada desiring to buy bonds, by reason of the exemption given in respect of income tax, could buy them in New York. All the securities we issue here are in competition with all the securities outstanding here and in New York. It is a matter to which I have given a great deal of anxious thought, and there are 'two sides to the question I frankly admit. It is a question of calculation as to what will give the best results to the Dominion. There will always be a certain dissatisfaction if parties of large incomes can buy tax-free bonds and thus escape to some extent from income taxation. But, on the other hand, we must consider what the rate of interest would be as between a taxsfree and a taxable bond and endeavour to do the best we can with the situation.


Thomas Vien: On the Victory Loans that have been floated in Canada the Government has fixed the rate of interest. Does the Acting Prime Minister believe that with the rate of interest fixed at 5 and 5i per cent the last domestic loans floated in Canada would not have been subscribed as cheerfully if they had been taxable?


William Thomas White: Most certainly
not. We should have got a substantial subscription but nothing like the amount we did get- I can say that positively because I went into the matter most carefully. Take, for example, financial institutions which are purchasers of bonds that are offered on the open market; they would have purchased a certain amount but nothing like the amount they did purchase. They could go on the open market and buy. Take the situation in the United States last year. Large insurance companies there which have to earn a certain rate of interest upon their investments in order to make a slight profit, or to carry their liabilities, can take a certain amount of taxable loan at a lower rate of interest than the market rate, but if they had all their surplus funds invested in that and found that these bonds went down five to ten points it would be a very serious thing for them. The rate of interest in the market is determined by supply and demand the same as the price of any other commodity and it is a most extraordinary thing that at the end of this war in which the finance of all countries has been disturbed and dislocated, in many cases shattered, we find ourselves with our securities during the war standing at par and above. Over a million and a half of the people of this country invested in the Victory Loan, and there is a much better feeling in this country among the people who subscribed to this loan that their securities are standing at par and over and that they can realize, if they want to, the amount they paid for them. If these securities were down flvo.-Or ten points and if we put out another loan on a 5 per cent basis, or on a 5i per cent basis, only one thing would happen and that would be that we would have to count on a discount- If the previous loan had gone to a discount, when it came to the floating of the next loan, the fact of that discount would have an important bearing.
I feel that our war financing has been very successful, even if I do say it myself. I felt that we should pay a reasonable rate of interest upon our borrowings. I do not mean to say that the Canadian public might not have taken once or twice a loan at a rate below the market rate, but I do not believe that is a wise policy especially in connection with a long war. When you offer securities to the public the best factor you can have is a lot of pleased subscribers to the previous loan. From the beginning of the war we were in competition with Great Britain's securities in New York and when I offered some of my loans in New York and some of the loans in Canada British securities were selling as low as on a 7 or 8 per cent basis in New York. So were the securities of France as well as other securities of the highest grade. In our financing during the war we had to take conditions as we found them and deal in New York or here as best we could-
In the war loans we engaged the interest of all sections of the community; and I want to pay my tribute here and now, as I have on every platform on which I spoke, to the members of this House on both sides, and to the Canadian people without distinction of class, race and creed, who assisted me to the utmost of their ability in floating these loans. Otherwise we could not have done it. There was co-operative effort on the part of everyone. I have heard no complaint from the time the first loan was floated down to the present, of there being any favouritism, or discrim-

ination, or political influence, or patronage, in reference to the flotation of our 'Canadian war loans.


Thomas Vien: As the clause gives the Government power to determine under what conditions the loan is going to the floated, I think it is proper to draw the attention of the Government to the bitter criticism Which has circulated among the public against the floating of tax-exempt loans. There is, it is true, the question of dollars and cents to be kept in view,-whether the discount that you will lose on the taxable bond will be equalized by the amount that the public exchequer will receive from the taxation on this bond. But there is also something else than the dollars and cents aspect of the question, there is a question of principle; and T say it is not democratic to have bonds floated which are tax exempt. There is a great deal of criticism of the action of the Government in floating tax exempt bonds. It allows those who have made a lot of money during the war, by profiteering or otherwise, and financial and banking institutions which have a lot of money to dispose of, to place that money in tax-exempt bonds. They were either as patriotic as they pretended and boasted they were during the floating of these Victory Loans, in which case they would have subscribed as freely whether the bonds were tax exempt or not, or else some of the feathers should be taken off their caps-and I think the Acting Prime Minister has done that to-night in stating that in his opinion the last loan would not have been as freely subscribed had it not been exempt from taxation; we would have received a certain amount but not have quite as much as we have received by issuing tax-exempt bonds. I had some knowledge of the floating of the last Victory Loan in the district of Quebec, and in that district the exemption did not influence very much the people who subscribed to that loan. They subscribed because an appeal was made to them to do so on the ground that it was necessary, for the successful prosecution of the war, to help our industries and to help the Government to carry on, to accomplish the task which they had on their hands. I believe that if a proper appeal had been made to the people of Canada at large the response would have been equally as good whether the bonds were taxable or exempt. There is a great deal of unrest and criticism among the labour classes at the present time. I have heard a lot of it in Montreal, Toronto and Quebec. The labouring classes contend that we owe great sums of money as a result of our domestic loans.
TSlr Thomas White. 1
To whom do we owe them? We owe them to those who have made money during the war either by war contracts or toy profiteering on the necessaries of life-and we have examples high up. They contend that not only do we owe the capital of our domestic loan to those people who made their money sometimes by the sweat of the working classes, but that those people have taken care that the interest they are going to derive from the money they have loaned to the Government will be tax exempt, and that it will toe the wage earner and the small man who will have to pay the greatest part of the amount which the Government has to raise to meet our expenditures and our liabilities. And thereby we invite to a great extent the criticism which is now so prevalent throughout the country. I believe the better practice would have been even to pay a higher rate of interest or a discount on the floating of our bonds. The true democratic principle is that every one should pay his proper share of the country's expenditure, and if I might be at liberty to offer a little advice to the Government it would be this, that in future when floating loans they should not make them exempt from taxation.


William Stevens Fielding: I am not sure that I correctly caught the answer of the minister to the question of the leader of the Opposition as to the amount he is at liberty to borrow undeT this clause. Am I right in understanding 'that the object is to raise a new loan of $350,000,000?


William Thomas White: Yes, $350,000,000, and to any amount for which we have not borrowing power, but which we have borrowed.


William Stevens Fielding: If I read the resolution aright, the maximum the hon. minister could borrow under the Bill would be $350,000,000; but from that he must deduct the $150,000,000 which he says was over-borrowed last year. If that is correct, he will only borrow under this Bill $200,000,000. I would just draw the hon. gentleman's attention to that.


William Thomas White: I shall be glad to have the clause examined by the Department of Justice. It seems a little complicated, but it was settled by my department for the purpose of insuring that we had borrowing power necessary to. raise $350,000,000.


William Stevens Fielding: It is not within this Bill, if the hon. gentleman over-borrowed $150,000,000 last year.


William Thomas White: I merely used
that as an illustration. I do not know what amount was over-borrowed last year- at least, I have not accurate information. I stated to my hon. friend that if we raised, as we did, $670,000,000 by the Victory Loan of last year, and had a war appropriation of only $500,000,000, and if we had a surplus from the previous year, and had not borrowed the amount we were authorized to borrow the previous year, that unused borrowing power would apply in respect of the surplus expenditure. I will look at this section, but I do not think it should pass because it was settled, as I say, with that in view.


Lucien Cannon: How much of the $670,-
000,000 of the 1918 loan was subscribed as cash, and how much by way of conversion of previous loans?


William Thomas White: If we had taken into account the amount of conversions the last loan would have been very much in excess of $670,000,000. That amount represents cash subscriptions.


[Stage Direction]
Section agreed to.
On section 5-power to reissue, sell or pledge securities:
Mr. McKEiNZIE:	I am not aware that
legislation of this sort has ever been passed before by this House. Is not this a rather extraordinary power? If there is to be any further borrowing should not Parliament have something to say about it?
William Thomas White: As to section 4, I have looked at it more closely since my hon. friend (Mr. Fielding) spoke, and I would direct his attention to this:
The Governor in Council may, in addition to the sums now remaining unborrowed. . . . raise by way of loan, .... such sum or sums of money, less any amount borrowed in excess of the amounts authorized by any war appropriation Act, as are required for the purpose of making any payment authorized by this Act.
Does my hon. friend see the force of the last few words there? That is to say, this section authorizes us to borrow in any event the amount required for making any expenditure if authorized by this Act. That is the way I would construe those last words:


William Stevens Fielding: That is the way the money raised would have to be applied; but I do not think it creates power to raise money. I can understand the possibility that, as respects the war loan particularly, there' was overborrowing of over 1150,000,000; but if there were other borrowing powers unused, some portion of that $150,000,000, possibly the whole of it, might be covered by such other unused powers, and in that way there would not be overborrowing. But if there was actual overborrowing, meaning something in excess of what you have power to borrow, then clearly that must be deducted from the $350,000,000. However, it is enough to call my hon. friend's attention to it, and his solicitor no doubt will look into it.


William Thomas White: Yes. I will have the Department of Justice consider the section, and if any change is necessary to effectuate the purpose we have in mind I will have the matter attended to on the third reading. My hon. friend, the leader of the Opposition, asked a question about section 5.


Daniel Duncan McKenzie: Section 5 states that after those securities or bonds are paid and called in they can be re-issued and re-sold without any reference to Parliament. I think that is rather unusual.


William Thomas White: That is a frequent clause in company legislation and arises out of a decision-some of the lawyers in the House will recall it-under which it was held that if securities had been pledged*, and the amount of the loan paid off and the securities got back again, they could not then be sold, that they became extinguished by virtue of their redemption; hence this clause, which, I believe, is usually inserted. Supposing the Dominion had issued bonds with the intention of selling them outright but in the meantime had borrowed against them from the bank-which the Dominion now seldom does-and paid off the loan to the bank, and then desired to sell the securities, it is advisable that they should be able to sell them without getting fresh borrowing powers; in other words, that they should not be deemed to be extinguished. Frequently loans are effected for the purpose of carrying securities which it is intended to sell and repay the loan from the proceeds so obtained.


William Stevens Fielding: I think the clause had its origin in reference to a railway company, and the principle having been laid down by the courts it was thought as respects all Government loans that the same precaution should be taken.


William Thomas White: Yes, that is right.


[Stage Direction]
Section agreed to.
On the Preamble:
Daniel Duncan McKenzie: I would like to ask the minister in connection with the many borrowings and bonds of the Government that are outstanding, has the Government any power to recall those bonds at any time, or must they remain outstanding for a set period of years? We are paying very heavy interest; that we can readily understand, having regard to the nature of the period through which we have been passing. But we hope that some day we shall get back to normal times, when money can be borrowed much cheaper than it can be borrowed now. If the Government had power to call in these bonds., pay them off, and convert them into new securities at a smaller rate of interest, it would be very much in the interest of the country. Will the minister retain to himself such powers in connection with future borrowings if he has to pay a very high rate of interest?


William Thomas White: With regard to
future borrowings, the policy should be to borrow for shorter terms. No one can foresee what interest rates will be. My own view is that 'they are not likely to drop materially for a considerable time; I do not see how they can. What I have said is subject to this:	in putting out loans
one has to consider the financing that has already been done and not have his loans in large amounts too close to the present time. Let me illustrate. Suppose the Dominion Government during the war had been fearful of the comparatively high interest rates and had resorted to short-date borrowing, which is all right for comparatively small amounts in times of high interest rates. And suppose the Minister of Finance had to face within the next five years, let us say, the raising of five, seven or ten hundred million dollars; that would be a very serious matter. The amounts expended in this war, the debt of Canada and the debts of all nations, are so vast that funding is not possible as it would be in normal times. One of the advantages of our situation is that our loans are distributed over five, ten, fifteen and twenty years. I know precisely what my hon. friend has in mind-that we shall have to pay high interest rates over a period of fifteen and twenty years. That is true in respect of certain of our loans. But I do not see what advantage it would be to us within the next five or ten years, having regard to the loans we have to meet before ten years are over, to be in a position to recall the other bonds, because the financial operations would not be possible to

enable us to retire them and replace them with further issues at lower rates; it seems to me that the transactions are too great. I do not like, any more than my hon. friends, the idea that the Dominion has to pay that rate of interest over so long a period. But short-date borrowing is almost fatal in war time, because you get accumulations of debt ahead of you and when you need fresh money you are confronted with maturities coming due, and a very serious situation results.


[Stage Direction]
Preamble agreed to.
Bill reported.
On motion of Sir Thomas White, the House adjourned at 11.45 p.m.
Friday, May 9, 1919.