1922-06-02

AGRICULTURE AND COLONIZATION


Mr. W. F. KAY (Missisquoi) moved:: That the proceedings of the Select Standing Committee on Agriculture and Colonization had last session on the question of "Standardization of parts of Agricultural Machinery" be referred to the Select Standing Committee on Agriculture and Colonization.


[Stage Direction]
Motion agreed to.
Mr. KAY with the consent of the House, moved, that the House return to the Order of Motions.
Mr. MEIGHEN:: The hon. member should state the object he has in view in returning to the Order of Motions.


William Frederic Kay: I desire to move a resolution, and I think that if I read it the object will be clearly apparent. I move, seconded by Mr. Sinclair:
That a message be sent to the Senate requesting that their honours will give leave to the Hon. Archibald B. McCoig, one of their members, to attend and give evidence before the Select Standing Committee on Agriculture and Colonization.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the Orders of the Day:
Hon. W. L. MACKENZIE KING (Prime Minister) :: Mr. Speaker, may I take advantage of this moment to correct a false impression that seems to exist in regard to the use of Japanese coal by the Canadian Government Merchant Marine on the Pacific. The impression seems to have got abroad, that the Government Merchant Marine intend to use Japanese coal, or are bringing Japanese coal to this country. The matter came up some time ago in connection with a question asked by an hon. member, and a reply was given at the time that the coal that came from Japan was merely in the nature of ballast; it was cheaper to the company at the time to purchase coal for that purpose than to purchase ballast in some other form. I understand that recently the matter has come up again, and some fear is expressed on the part of certain hon. members from the West that the Government Merchant Marine intend to adopt as a policy the bringing of coal from Japan to Canada. Hon. members know that the Merchant Marine is under the Board of Directors of the National Railways. The Government has not to do with the control of its affairs, or the operation of its steamers; but in answering the question that was asked some little time ago the following statement was made:
As far as they can possibly do so the steamers of the -Government Merchant Marine will hereafter use onily British Columbia coal on the Pacific ocean.
That statement was given to the Government by the Board of Directors of the National Railways and, as I understand it,

The Budget-Mr. Bristol
indicates its policy then and its policy at '-he present time.


Mr. W. G. McQUARRIE (New Westminster) :: May I he permitted to ask the Prime Minister if he is aware that the ships of the Canadian Government Merchant Marine are purchasing their coal from mines at Cumberland which employ orientals underground?-and that these mines are the only mines in Canada where orientals are so employed?-and if the Government will take action to see that this condition is remedied?


William Lyon Mackenzie King: The complaint I had was that the board was purchasing coal from Japan instead of British Columbia, but I will take occasion to inquire into what my hon. friend has just represented.



THE BUDGET


[Stage Direction]
The House resumed from Thursday, June, 1, the debate on the motion of Hon. W. S. Fielding (Minister of Finance) that Mr. Speaker do now leave the Chair for the House to go into Committee of Ways and Means, and the proposed amendment thereto of Hon. Sir Henry Drayton.
Hon. EDMUND BRISTOL (Centre Toronto) :: Mr. Speaker, I join with
other members of the House in congratulating the Minister of Finance upon the manner in which he delivered this-his sixteenth budget speech. I do not believe that there is any man in Canada better equipped, by long experience and by ability, to present that speech; and I do not suppose that the Finance Minister, well informed as he is, was ever confronted by a more difficult situation, because he has to satisfy everybody on his own side of the House, from the free trader in the person of my hon. friend from Brome (Mr. McMaster) to the ultra-protectionist, my hon. friend from Brantford (Mr. Raymond). Anybody who can do that is certainly something of a magician as well as an able finance minister. Now my hon. friend had a great many difficulties to encounter, and I have no doubt that if those difficulties were not so numerous he would have presented a budget more on the lines of his budget of 1907 rather than the class of budget which he brought down recently. But the criticism that I would offer in respect to the budget as a budget is, that substantially it does nothing for the stimulation or promotion of Canadian trade or Canadian agriculture. It is" what you might call a " safety first " or " stand pat " budget. Whatever reductions or changes have been made are for the benefit of our business competitors the United States, Great Britain, and particularly Germany. Now, everybody in this House knows that, since the war, every civilized country has been doing everything it possibly could to protect, preserve and maintain the home market of that country for its own people and to protect and maintain its own home industries. I suppose the two most conspicuous examples with which we are familiar are Great Britain and the United States of America, and I would have thought that under those circumstances, a Finance Minister of the wide experience and great ability of the present occupant of that office would have taken into account the necessity in this country of not merely preserving matters in statu quo, but of doing what he reasonably could, so far as the tariff will do it, to promote, advance and protect the industries already existing in this country, to bring in other industries, and to give the people who have money to invest in industries a confidence that, so far as Canada is concerned, the policy which has been in force practically from 1879 to the present time is to be maintained unimpaired, and that the small modicum of protection given to our industries is not to be whittled away for the benefit of our American, English and German competitors.
I am going, first of all, to take up the case of Germany, because that is the most flagrant case, and I am rather inclined to think, from the way the minister spoke, that his mind is open to conviction, and if I can help him in any way to come to a conviction which will protect Canadian labour against the cheap and efficient labour of Germany, I think something of advantage will be done. What is the position in Germany as regards the wages paid to labour? It is well known-and the Finance Minister (Mr. Fielding) stated- that the value of a German mark to-day is a third of a cent. The latest information I can get from Germany is that skilled labour is paid 60 cents a day, and ordinary unskilled labour is paid 30 cents a day. But we will take sources perhaps more authentic, or, at least, more to be relied upon. I take Industrial and Labour Information, Volume II, No. 6, of 12th May, 1922, published at Geneva, by the Inter-
The Budget-Mr. Bristol

national Labour Office, and I find the following item:
It appears that the highest wages were paid in Hagen, dyers, 639 marks ($2.13) per week; belt makers, 650 marks ($2.17) per week; ribbon makers 654 marks ($2.18) per week, Essen and Hamburg, and the lowest in Bautzen (353 to 508 marks ($1,18 to $1.69) and Munich (409 to 624 marks ($1.37 to $175)).
The memorandum states that in most cases the weekly wages were lower than the minimum cost of living of a family of two adults and two children. In Berlin, for instance, the weekly minimum cost of living in December 1921, amounted to 557 marks ($1.86) per week, while in the same month the average wages in certain occupations were as follows: Printers (married), 553 marks per week ($1.84), railway mechanics, 418 marks ($1.40) ; railway labourers, 379 marks ($1.27) ; bricklayers, 552 marks ($1.84) ; building labourers, 522 marks ($1.74) ; navvies, 381 marks ($1.27). In Hamburg, the wage of bricklayers, 620 marks ($2.07), building labourers, 594 marks ($1.98), and navvies, 589 marks ($1.97) were in excess of the minimum cost of living, while those of joiners, 561 marks ($1.87).
I am not suggesting these figures for Government employees in Canada, but I find in the Frankfurter Zeitung, of 28th March, 1922, that they paid their Government officials the munificent salary of 11,000 marks per annum, or $36.67 for the lowest group, and for the highest group, No. 12, a salary of 40,000 marks, equal in Canadian funds to $133.34 per annum. It is not necessary for me to tell this House that the German mechanic is as well equipped for his work as any mechanic in the world, and they are not working six or eight hours a day; they are working all they can-ten hours a day, and an extra two hours for the Fatherland. The present tariff brought in by the hon. Minister of Finance takes for the valuation of German goods their fair market value in the country of production-Germany.	You can figure
what this value in Germany would be. Labour is 50 per cent of the cost of producing an article and then we have the raw material. I have shown you the labour cost, which is a prevailing cost. It practically means that the Germans can produce everything that is produced by factories in this country for about one tenth of our cost, and the freight rates from Germany to Canada are cheap. That is the real situation. Let me show you what Germany exported to Canada and the kind and character of the merchandise sold by that country to Canada in 1913. The total value of these imports was about $10,000,000. Some of the importations were as follows: ,

Breadstuffs (grains and products of). $ 63,055
Peas n.o.p	 60,647
Buttons of all kinds n.o.p	 65,197
Cars, railway and parts of	 84,854
Clocks, time recorders, etc	 119,555
Cocoa paste or liquor etc., Chocolate
mfrs	 73,512
Combs	 81,507
Cotton fabrics, dyed or coloured.. ..	63,770
Clothing n.o.p	 71,268
Lace, white and cream coloured .. . .	226,904
Socks and stockings	 441.898
All other drugs, dyes and chemicals,
n.o.p	 77,807
Tableware or china porcelain	 300,586
Electric Apparatus n.o.p	 79,799
Just referring to electrical apparatus, Germany to-day is the first country in the world in manufacturing along electrical and radio lines, and it will practically mean that great companies in Canada, like the General Electric and the Westinghouse and the other large company at St. Catharines, an English company, will be put out of business by Germany, or very seriously injured, when the Germans got started under the proposed tariff. Other articles imported were:
Boxes, fancy, ornamental cases..	..	$ 63,280
Braids, cords, fringes, etc	 141,124
Artificial feathers, flowers, etc..	..	127,684
Lace, n.o.p	 198,238
Toys and dolls of all kinds	 534,010
Furs, skins, wholly or partly dressed
n.o.p	   377,135
Caps, etc. of fur	 63,988
Glass, carboys or demijohns	 66,248
Glass balls and cut pressed crystal
glass	   64,766
Gloves and mits of all kinds	 380,057
Rubber cement and all manufacture of
rubber n.o.p	 59,744
Hops	 56,674
Machinery, composed of iron or steel
n.o.p	 240,616
Tubing, wrought iron and steel..	..	65,069
-on which the tariff has lately been reduced and is particularly reduced in the present tariff.
Knives and forks of steel	$ 67,759
Cutlery n.o.p	 302,015
Tools, hand, all kinds, hoes, rakes,
forks etc	 52,039
Manufactured articles of iron and steel
n.o.p	 142,903
Jewellery n.o.p	 175,296
Lamps, lanterns and chandeliers.. ..	177,687
Other musical instruments, n.o.p		135,207
Optical instruments	 52,256
Zinc, white	 109,283
Paper, manufacture of n.o.p	 130,050
It is well known that the Germans have been shipping paper into New York for some time back, in competition with the Canadian paper manufacturers.
Pocket books, port-folios, leather goods $ 78,692
Ribbons of all kinds and materials.. 17,776
Seed, clover and timothy	 37,185
Silk Fabrics for neckties	 52,724

The Budget-Mr. Bristol
Silk socks and stockings	 80,602
Sugar n.o.p	 300,914
Knitted goods, including knitted underwear n.o.p	 104,159
Woollen fabrics, n.o.p	 214,415
Clothing, women's, children's outside
garments, cloaks, suits and costumes 148,048 Clothing, readymade, (wool) men's.. 246,454
I thought it proper to read this list of articles to the House to show that, as far as competition with Germany is concerned, our mechanics have not only no protection, but there is practically nothing that is manufactured in this country, or that can be manufactured under reasonable competitive conditions, that Germany cannot today put on the Canadian market under the present tariff and easily undersell its Canadian competitors. It would be interesting to see, in this regard, what Great Britain has done to protect her industries-England, that free trade country that was once the proud boast of my hon. friends on the left. The British people are pretty level headed, when the question becomes one of real competition. They have passed what they call the Safeguarding of Industries Act. It reads, in part, as follows:
1.	If, on complaint being made to the board to that effect, it appears to the board that goods of any class or description (other than articles of food or drink) manufactured in a country outside the United Kingdom are being sold or offered for saile in the United Kingdom-
(b) At prices which by reason of depreciation in the value in relation to sterling of the currency of the country in which the goods are manufactured are below the prices at which similar goods can be profitably manufactured in the United Kingdom; and that by reason thereof employment in any industry in the United Kingdom is being or is likely to be seriously affected, the board may refer the matter for inquiry to a committee constituted for the purpose of this part of this act.
2.	If the committee report that as respects goods of any class or description manufactured in any country the conditions aforesaid are fulfilled the board may by order apply this part of this Act to goods of that class or description if manufactured in that country:
They go on -to state that where this is found, the customs duty, in addition to the ordinary duty,-shall be a customs duty equal to one-third of the value of the goods -in England, not in Germany. If England has to do this, what about poor Canada? Let us go on and see what the United States have done. They have not completed their legislation in this regard.


Mr. MURPHY:: Before the hon. gentleman deals with the United States, will he state to the House the effect, as to volume and amount, upon the trade of the United
Kingdom and Germany, of the legislation to which he has just referred?


Edmund James Bristol: I can give my hon.
friend only the information I have. I am not going to vouch for this; but I am told by responsible people that British merchants are merchants first, and they are importing German goods, adding a little work and a made in England label and thus taking advantage of German cheap labour.


Mr. BIRD:: Is the hon. gentleman aware that the cotton spinners of Lancashire and the dye industry of England are agitating for the repeal of the Safeguarding of Industries Act, and that on May 16 a motion which was introduced in the House of Lords for the repeal of that act, was lost by only two votes? Is he aware that the Liberal federation which met at Blackpool last month also adopted that as a plank in their platform?


Edmund James Bristol: I only want to say to
my hon. friend that he is not asking a question except by way of making a long statement. Of course, there are people who will object to this act just as, if the Minister of Finance imposed a duty on German goods of one-third of the value in Canada of similar goods there would be people who would object to it. I have no doubt that in free trade England many people are agitating against the act, but I do not happen to know about that. If the hon. gentleman has information of that kind, he will have an opportunity of presenting it to the House. I am only pointing out. that such an act Is in force in England, and that it has not yet been repealed. This shows that British industry, in a country which has been free trade from 1846 to the present time, is so much alive to the situation and the necessity of protection against German goods that the British authorities are protecting, not merely industries that are at present in existence, but industries that anight be brought into existence and that might be injuriously affected. I will come back to this matter later on.
I want now to deal with the situation in the United States, because it is just as well to see what is done by our neighbours, although some of us may think they are foolish. No group of farmers in the civilized world, except the farmers of western Canada, is arguing in favour of free trade. The farmers of western Canada may be right in their views,-possibly but not probably;-honestly I have my doubts.
The Budget-Mr. Bristol

This is the bill as it is before the United States Congress at the present time. Let me cite section 315 of the new United States Tariff Act of 1922,-and in my humble judgment this is useful as showing the proper view of protection, which may be up or which may be down, but which is real only whe^i it fairly protects industries essential to the development of the country giving them such protection as will put them on a fairly even footing with their competitors in other countries. lit gives a smaller country an opportunity to develop its industries in competition with more powerful rivals. Section 315, to which I have referred, reads:
(a)	That in order to regulate the foreign commerce of the United States and to put into force and effect the policy of the Congress by this Act intended, whenever the President, upon investigation of the differences in conditions of competition in trade in the markets oif the United 'States of articles wholly or in part the growth or product of the United States and of Hike or similar articles wholly or in part the growth or product of competing foreign countries, shall find it thereby shown that the duties fixed in this Act do not equalize the said differences in conditions of competition in trade-
That is the aim of proper protection, namely, to give the people of the country a return for their money when they invest their capital, and to give the labourers a fair chance to get a fair day's pay for a fair day's work.
-he shall, by such investigation, ascertain said differences and determine and proclaim the changes in classifications or forms of duty or increases or decreases in any rate of duty provided in this Act shown by said ascertained differences in conditions of competition in trade necessary to equalize the same in the markets of the United 'States; that thirty days after the date of such proclamation or proclamations such changes in classification or in forms of duty shall take effect and such increased or decreased duties be levied, cofllected, and paid on such merchandise when imported directly or otherwise from the country of origin inito the United States: Provided, That until further provided by law the total increase or decrease of such rates of duty shall not exceed 50 per centum of the rates specified in this Act, or in any amendatory Act.
The next clause is a very interesting one:
(b)	That in order to regulate the foreign commerce of the United States and to put into force and effect the policy of the Congress by this act intended, whenever the President, upon investigation of the differences in conditions of competition in trade, in the markets of the United States, of articles wholly or in part the growth or product of the United States and of like or similar articQes wholly or in part the growth or product of competing foreign countries, shall find it thereby shown, that an

industry in the United States is being or likely to be materially injured by reason of the importation into the United States of foreign merchandise, and shall find it thereby shown that the value as determined under the provisions of paragraphs (1), (2), or (3) of subdivision (a) of section 402 of this act, is not a certain basis for the assessment of the particular duties, he shall make such findings public, together with a description of the class or kind of merchandise to which they apply in such detail as he may deem necessary for the guidance of appraising officers; that in such cases and upon the proclamation by the President becoming effective the ad valorem duty or duty based in whole or in part upon the value of the imported article in the country of exportation shall thereafter be based upon the American selling price,-
The duty is not based upon the value of the article in the country from which it comes, as such an article is being valued by our new tariff.
-as defined in subdivision (f) of section 402 of this act, of any similar competitive article manufactured or produced in the United States embraced within the class or kind of imported merchandise upon which the President has made public such a finding and proclamation.
I most respectfully submit that it would be wise for the Minister of Finance to reconsider this question in regard to German goods, and to provide that the ad valorem duty or duty based in whole or in part upon the value of the imported German article in the country of exportation shall thereafter be based upon the Canadian selling price of any similar competitive article manufactured or produced in Canada. There are various other provisions in the act showing that the United States is looking after its own interests from every angle. For instance, section 316 of the act reads:
That unfair methods of competition and unfair acts in the importation of merchandise into the United States, or in its sale by the owner, importer, consignee, or agent of either, the effect or tendency of which is to destroy or substantially injure an industry, efficiently and economically operated, in the United States, or to prevent the establishment of such an industry-
You will note how far it goes.
-or to restrain or monopolize trade and commerce in the United States, are hereby declared unlawful, and when found by the President to exist shall be dealt with, in addition to any other provisions of law, as hereinafter provided.
So much for the United States. Now, I would call the attention of the House to the fact, if it is necessary to labour the point further, that France, on the 28th of March, 1921, increased the maximum rates of duty, making the maximum rate exceed the minimum rate in varying proportions,

The Budget-Mr. Bristol
not exceeding 300 per cent, whereas formerly the difference between these rates was 100 per cent. The preamble to the decree explained that the measure is one of the results of the investigation which has been made of the steps which need to be taken in order to safeguard French industries, the very existence of which is threatened by the competition of goods from countries with depreciated exchange.
Now, if that applies to England, France and the United States it certainly applies with equal, if not greater, force to Canada. The last country I shall mention is Australia. Paragraph 8, Customs Tariff (Industries Preservation Act) reads:
(1) If the minister is satisfied, after inquiry and report by the Tariff Board, that the exchange value of the currency of the country of origin or export of any goods has depreciated, and that by reason of such depreciation goods have been or are being sold to an importer in Australia at prices which will be detrimental to an Australian industry, the minister may publish a notice in the Gazette specifying the country as to the exchange value of the currency of which he is so satisfied, and the goods originated in or exported from that country to which in his opinion the provisions of this section should apply.
The Minister of Finance (Mr. Fielding) says that if you want to prohibit Germany from sending goods here you should say so. I am certainly not advocating that. He says::
If you want to say that German goods shall be prohibited say so; if you shrink from saying that in such a direct way, then put on a 1,000 per cent duty.
It is not necessary to do that. Just put a value on German goods for tariff purposes that you would put on similar goods produced in Canada. Take the Canadian selling price of similar goods as the basis on which to value the German goods and put a reasonable duty upon them so as to give the Canadian factories a fair chance to compete with German exports on even terms. Before leaving this point I would refer to a statement made by Mr. Tom Moore, president of the Trades and Labour Congress, after his return from a visit to Germany in 1921. He said:
Skilled mechanics in Germany must work one day to earn the currency which will purchase one pound of butter; they must work one week to earn a pair of shoes, or one month to earn a suit of clothes.
The Minister of Finance, in concluding his very able speech, referred at some length to the subject of capital and labour, declaring that the condition of labour in
this country should not be placed again on a pre-war basis. I am entirely in accord with the remarks of the hon. gentleman in that direction. But if we are going to pass legislation practically preventing the immigration of certain races into this country because we believe that their entry into Canada would have a tendency to lower the standard of living of our own working people, then I hope that the Minister of Finance, who I am sure is sincere in the view he has expressed, that the Canadian labourer should receive a fair and reasonable degree of protection, will give further consideration to the question of the values that are to be put on German goods, and will take such steps as will fairly and adequately protect the workingmen and commerce of this Dominion.
We have been told for a long time now that we have a high protective tariff in Canada, and I have often wondered whether hon. members, particularly my hon. friends on the left, who are of this opinion, have really studied the subject at all, and have given any thought to the tariff conditions under which the United States has come to its present state of prosperity. I am not going to advocate to-day that Canada needs the same high tariff that the United States has had for some considerable time -their tariff has averaged from 1870 to to-day between 47 and 57 per cent on imported articles. I do say, however, that the fact that the United States has seen fit to impose such high tariffs on goods entering that country is a very considerable argument in support of the contention that if we are to have factories in Canada, whether they are ten or twenty years old, such factories, except perhaps lumber, pulp and paper, cannot reasonably be expected to compete with American factories ten times their size, which can easily and with slight added cost manufacture an extra eleventh or twelfth of surplus and ship it here. Our factories cannot stand up against such competitors unless they are afforded a fair protection that will equalize the conditions that exist between the cost of production on an enormous scale, as is the case in the United States, and the cost of production on an average scale, or one-' tenth of the American production, as in the case of Canada.
My hon. friends to my left say that they believe in the development of the basic industries of the country. Now, I suppose that coal would fairly be regarded as a basic commodity, although one hon. gentleman
The Budget-Mr. Bristol

says that there is no such thing as raw material except earth, air and water. However, I conceive that coal, so long as it is in the ground and untouched, is a raw material; and the same is no doubt true of iron. After the United States civil war in 1868, the manufacturers of that country were practically forced to go out of business as a result of the operations of the war. But the Americans saw that they had deposits of iron and coal in close juxtaposition and they made up their minds that they would become the dominating factors in the iron and steel world. At that time England and Germany, particularly England, were supreme in the iron and steel business. The Americans, however, in 1868, put on a general tariff of 37 per cent on imported articles. In 1870 they raised the tariff on articles to 47 per cent, cutting it down 10 per cent in 1872. In 1875 they put it back again at 47 per cent. The Democratic low tariff of 1894 was 37 per cent, and the Dingley tariff of 1897 was an increase to 57 per cent, that tariff practically continuing in force on imported articles until 1909, or almost up to the period of the Great war. After the civil war, in the year 1871, the United States put on a duty of $28 per ton on steel rails. The gross product of the United States in that year was 34,100 tons, and over half a million tons were imported. The average price at that time was $91.70 in the United States and $57.70 in England, the American price exceeding the English price by $34. By 1885 there were produced in the United States 967,000 tons of rails and only 2,200 tons were imported from England. The American price had come down to $28.50, the English price being $23.65, or an excess of the American price over the English price of $4.85. In 1883 the industry had so far progressed that the tariff was reduced from $28 to $17. By 1890 the tariff was further redficed to $13.44. In 1890 the United States produced 1,871,400 tons of steel rails, not one ton being imported, and the difference between the English and the American prices was $4.45 in favour of the United States. In 1897, the duty had been reduced to $6.72, and the quantity of rails produced was 1,630,000 tons, no rails being imported. The average price of the United States produce was $19.60 per ton, the English price being $21, or $1.40 more than that of the United States. To-day steel rails in the United States are on the free list. There is no country in the world today that has iron ore deposits in such vast quantities and of such high grade as has 
the United States in Pennsylvania and Minnesota. When the world war came the United States was supreme in the steel industry, and it has achieved that position under a tariff of the kind I have described which had absolutely excluded English and German rails, with the result that domestic rails were reduced to a lower price in the United States than in any other country in the world.
But let me tell my hon. friends something more; it relates to the German situation. A short time ago certain German companies bought 500,000 tons of Wabana ore in Newfoundland, which they are taking over to Germany and turning into steel rails, and those rails they are able to sell in Cufba in competition with the United States rails. That is what German competition means in rail to-day. Since the war the United States Steel Corporation, which, I suppose, is one of the best organized and most powerful corporations in the world, has not been able to successfully compete against German rails and steel in other parts of the world. That is an added reason for my argument that Canadian workingmen and manufacturers should be protected against German competition.
A similar illustration as to the value and benefit of a protective tariff in building up the iron and steel industry may be taken in the case of nails, on which the duty was originally $80; now they are on the free list. When the duty was first imposed the United States was buying millions of dollars' worth of nails in Eng- . land and Germany; to-day their own manufacturers are able to meet the whole domestic demand.
In the great province of Nova Scotia we find fifteen per cent of the coal deposits of the world. At Wabana, in Newfoundland, is one of the largest ore deposits in the world. Cape Breton and Wabana are in just that position. But what is their relation so far as competitive conditions with the United States are concerned? The deepest United States coal mines to-day are not more than one thousand feet, the shafts are a mile apart, ventilation and haulage are easy, and in many places in Pennsylvania the mines are on the sides of hills or mountains, the coal is brought down an easy slope, and the working conditions enable mining to be carried on at a minimum cost. The result is that in the United States to-

The Budget*-Mr. Bristol
day the miners of bituminous coal produce just twice as much per man as the miners can produce in Nova Scotia, no matter how hard they may work. The cost of coal is largely the cost of mining it. So it is essential that we should build up the coal industry in Nova Scotia, for it would never do for this country to be at the mercy of the United States for soft coal as we are for anthracite coal. But we would be at their mercy if we allowed United States coal to be dumped here at a price that would put our Nova Scotia mines out of business; those mines must be granted reasonable protection. What that reasonable protection should be is a matter for investigation, but there is no doubt of the disparity in conditions, it costing just twice as much to bring a ton of coal to the surface in Nova Scotia as in Pennsylvania. It takes four tons of coal to make a ton of coke for use in the steel industry. If it is costing you twice as much to get your coal, you can figure what your steel is going to cost you. Mining coal in Cape Breton is a submarine proposition, and when you go down two and a quarter miles under the sea, haulage and ventliation are costly and difficult factors, and it takes twice as much time and money to get your ooal out as it would if it comes up a straight shaft, and this additional expense cannot be avoided. Then again the Mesaba iron ore is dug out with a steam shovel; the Wabana ore has to be blasted out under the sea. The adverse conditions in Wabana ore are not so bad as in regard to our Cape Breton coal, but it is infinitely more costly mining ore at Wabana than at Mesaba, in Minnesota, and the latter ore is of higher grade.
It follows from the start that we cannot compete on even terms with the steel industry of the United States either in regard to coal or iron. Now, are we to follow the policy of my hon. friends to my left and say to Nova Scotia: You Shall have no protection; we will tie up your coal mines for two or three hundred years until the American mines are down two thousand or three thousand feet, or they are exhausted-are we to adopt that course? Or are we to follow the policy which has been followed for the last forty years and give reasonable protection and assistance to our Nova Scotia coal and steel industries? It seems to me that if you are to develop your basic industries you must recognize the competitive conditions under which they have to be developed. When I say to you that, as against the protection of $28 to the United States steel rail industry, you can see that our industry is not over-protected, or even sufficiently protected to equalize conditions with American competitors. It also explains why so many steel rails are imported, and why we have our Algoma mills using American coal and iron instead of Canadian or British.
I suppose that if the Minister of Finance had not come from Nova Scotia he might have been a little more just to that province. But I do say as a Canadian who has investigated the matter that I do not think the great province of Nova Scotia has received fair play for her coal and iron industries. Coming into Confederation, she was practically shut out of the American market which she would have had in Boston and New York by water, and was forced to send her products by the long rail haul from Sydney to Montreal before a substantial market is found, except the demand from Nova Scotia railway companies. Moreover, American steel plants at Buffalo are next door to Ontario where a large demand exists for steel products. The fact of the matter is, as one distinguished member on the other side said, the tariff is a compromise. What we have to do is to be fair to each other and to every one. Give every one a square deal, no matter whether he be a farmer, a workingman, or a manufacturer; let us try to treat every one fairly and reasonably. Ontario and Quebec are undoubtedly in favour of a protective tariff; you could not get either of these great provinces to vote againsl such a system. But they would all be in favour of a revision of the tariff; there is not a manufacturer who does not want to see the tariff put on a fair basis. If any manufacturer is getting too much protection the duties in that case should be reduced. Tariff revision is long overdue.
But the tariff should be applied in relation to particular things; this slapping on of a big duty on everything is not the proper method to adopt. Some industries require more protection than others, and the problem is a matter for investigation by a committee so that such protection may be afforded as is proper to develop our natural resources and give our workingmen fair competitive conditions with their fellow-workers in every other country in the world. That is what I stand for.
The Budget-Mr. Bristol

I have every consideration for the farmer of the Canadian West. As far as I can find out he is up against a hard proposition. I know that the purchasing power he ought to have to-day he has not got. I know that if the old dumping clause is retained the British Columbia fruit farmer will be all right; if he gets the protection he wants the Ontario farmer will be all right; the Quebec farmer is always all right; and down in Nova Scotia and New Brunswick they are working hard but they are not getting just as good results as they should for the work they do. But the fact is that Ontario and Quebec get the best bargain at present, British Columbia coming about third. Now, just what can be done to help the condition of the western farmer I am not prepared to say, but undoubtedly it is a matter that should be most carefully investigated by the best brains of the country. But I wish to tell the western farmer, with all the force I can, that I think he is barking up the wrong tree when he says that his only method of securing relief is to change our tariff system. I do not believe that, and I will tell him why in a few words. I agree that he should have relief, but I say, get it some other way. A fair reduction of freight rates would probably give him more purchasing power, and undoubtedly he is entitled to some benefit, because he is not getting any substantial relief out of our protective system. He sells No. 1 Hard wheat, which is the standard for the world, and as he is the only one who raises it his wheat fixes the world price. But I want to say to him that this question of protection is not simply a matter between the farmer of Canada and the manufacturer of Canada, because you have five million farmers to the south of the line, all of whom we must assume to be nearly as wise as Mr. Henry Wise Wood, and they are all opposed to free trade; they want protection, even against the Canadian farmers, I do not blame them for that; their reason is a very simple one. Before the world war the United States was an exporting country, largely of foodstuffs; upon the conclusion of the war they did not want to export foodstuffs because they did not think the fellow on the other side could pay for them. With this market gone, both for manufactured goods and for foodstuffs, the people on-the other side of the line looked askance at Canada when she shipped $175,000,000 worth of foodstuffs into the United States; so they decided to put up the tariff and keep that Canadian stuff out. Of 
course, that did not apply to our No. 1 Hard wheat, for the simple reason that the United States people must have that wheat for seeding purposes and for mixing with other grain to produce a flour of sufficiently good quality to make the bread that the United States people want. So that the matter of the duty does not have so substantial an effect in the case of the No. 1 Hard wheat; the Americans have to buy it, anyway. In the case of cattle, the duty has unquestionably hurt Canadian trade. But why allow so many commodities to come in from the United States-
4 p.m. early strawberries, for instance, and various kinds of early fruits and vegetables? Why not put a high tax on them, and let the Canadian people wait a little while until they can get similar commodities produced in their own country? As a matter of fact, these things are more or less luxuries. In British Columbia they have protection on their fruit. But we in Ontario get all the early potatoes, beans and vegetables of various kinds shipped into Ontario from the United States. Why should we allow that, when the United States does not allow our stuff to go in free? That is what I do not understand. You are level-headed farmers, and I cannot see why the other fellow should be allowed to come into Canada and obtain the benefit of our market when he will not let you get into his.
Now, in this matter of protection, you are the only farmers in the world who are asking for what is involved in your proposed changes in the budget. Look at it from another point of view: what country in the world has been more prosperous since the war than Canada has been? True, you had a bad year last year in your business, but I do not know of anybody who did not have a bad year in business last year. We have good years and we have bad years. Before the war we used to have about only one good year in seven, and then we used to think we were well off. But the war, unfortunately, sent around a good deal of easy money; it got people into expensive habits; and it is a little hard, perhaps, to get away from those habits and settle down to the hard work and the saving which are the only producers of a country's real wealth.
Suppose for one moment that your ideal of free trade were carried out: Take the case of agricultural implements, upon which some reduction has been (made by this budget. The agricultural implement industry in this country is a very important

The Budget-Mr. Bristol
one; thousands of men in Canada-at least, in Ontario and Quebec-are employed in it. Last year the Massey-Harris Company, I happen to know, was working only up to one-sixth of its capacity. During this period our western farmers, for reasons of their own, bought about $11,000,000 worth of American agricultural implements. They paid duty on these implements, and felt that Canada was getting the benefit of that duty. But if you had paid out this $11,000,000 in Canada, the Massey-Harris Company and all the other implement manufacturing firms in Quebec and Ontario would have been enabled to work full time and you would not have had men to feed who were unemployed; there would have been no starving families and no unemployment in this part of the world. It is true you paid the customs duties, but what else did you do? You patriotic men sent your money away to pay the working men of the United States, t<j assist in the building up of American industries, to feed American mouths, when there were Canadian mouths in want of food. If only from the point of view of common, decent charity to your fellow-countrymen who fought ibeside you during the war, you should have bought these thing in Canada, even if it cost a little more to do so. It is only by the rounded-out prosperity of the country generally that you get increased population, that you get growth and development, that you get a market and create ability to buy the things which you produce.
But, you may say, that is a selfish way to look at it. I do not know exactly what effect the 2i per cent reduction which has been made will bring about, but I doubt if it will make a difference of $10 a year to any one of you gentlemen who are farmers. But it will make a lot of difference if. it shuts down the agricultural implement factories of this country. If you have this free trade that you want, you think that you are going to get things cheaper. Well, you would get them cheaper, if the world would just stand still and these things would simply come into Canada as before and nothing more would happen. But you know as well as I do-probably a good deal better-that if the agricultural inmplement factories of this country are shut down and can no longer compete with the American agricultural implement factories; if the Harvester Company goes back to Chicago, where it belongs; if the 350 American factories, which have spent over $100,000,-
000	in the last thirty years in the building of big factories in this country, shut down in Canada and return to the United States, -which would mean a saving in overhead -you know that they will be able to sell these implements to you at such prices as they may demand. We have no control , over American factories, American trusts, American prices. You really do not believe, do you, that the Harvester Company, with no competition in Canada, would sell you your mowers and binders more cheaply? If you do, look at the history of Australia. Australia had a labour party; they wanted free trade and they got it, but they have now gone in for high protection-60 jper cent on agricultural! implements. You know that, and you know the result has been that the Massey-Harris Company and others have had to go into Australia, establish works there, and give employment to Australian workingmen. Well, if we had free trade the same would happen here-you would be eaten alive; almost before the legislation was passed, the American trusts-would control the Canadian market and would charge you fifty per cent more than any Canadian company had ever charged you. You do not think the United States trusts are benevolent institutions existing for the benefit of western Canada, do you? I assure you they are not. Why, we could not do anything. The trusts and combines in this country, about which your leader was talking a great deal during the campaign


Mr. SPEAKER:: Order. The hon. member is too old and too experienced a parliamentarian to forget that he must address the Chair.


Edmund James Bristol: The hon. member for
Marquette (Mr. Crerar), during the recent campaign, was speaking on the question of trusts and combines; I think the question of the -woollen industry was one that bothered him, as it did another hon. gentleman last night. He was telling us of the terrible duty of 35 per cent on woollens.
1	looked the matter up and I found that about $60,000,000 worth of woollen goods were imported into this country last year, but they were imported from England, not from the United States, and the British preference, which is, I think, about 50 per cent, perhaps less, made the duty only 17i per cent-which was the tariff rates as in force at the time of the Mackenzie government.
The Budget-Mr. Bristol

But to come back to the argument I am trying to present, I wish to point out that if you have free trade you put yourself at the mercy of the factories of Germany, of England and of the United States, because you put your own Canadian factories out of business by unfair competition. It is obvious that there is practically nothing outside of pulpwood timber and that sort of thing, that we could manufacture in competition with the United States. If, then, you do that, it must be obvious to you that although you are getting the highest price for wheat, you are dealing a body blow to the industries of Ontario, Quebec, Nova Scotia, New Brunswick and, possibly, Manitoba. And what else have you done? You h'ave put the farmers in these great provinces out of business, because if the factories are not running in Montreal, Toronto, Hamilton and the other large cities of this country, the farmer has no home market, -and on the question of home market, I would mention the county of York concerning which the leader of the Government knows something so far as the home market is concerned. But that is the position: if you have free trade you have ruined the eastern farmers and manufacturers. As I have said, you still get the highest price for your No. 1 hard wheat, which is the best wheat in the world. Then what becomes of the rest of us? We shall not oe here and you will have the national debt on your hands. I do not suppose you would agree with the member for Centre Winnipeg (Mr. Woodsworth) in the suggestion that the debt ought to be repudiated. You certainly would not be able to adopt his alternative suggestion and have a capital levy under those conditions.


Mr. COOTE:: Will the hon. member
permit a question?


Edmund James Bristol: With pleasure.


George Gibson Coote: If the wheat growers
should leave the prairie provinces, apparently all the rest of Canada would automatically disappear?


Edmund James Bristol: Not at all. Why do
you say that?


George Gibson Coote: Did you not say that the
manufacturer would be ruined, as well as the Ontario farmer, if we brought our goods in free?


Edmund James Bristol: You would still be raising your No. 1 hard wheat, the best there is, and selling it in the markets of the 
world at he highest price. I said the rest of us would be out of business and that Canada would be at he mercy of the trusts in the United States who instead of producing twelve times as much as they do to-day, would manufacture for Canada an additional thirteen times if the Canadians are forced to use their products and Canadian factories are out of business, and at their own prices. That is practically what it would amount to. View the matter in any way you like there is no escape from that conclusion.


George Gibson Coote: If there is no escape from that conclusion as my hon. friend says, if we are forced to leave the prairie provinces and quit producing where are you going to deliver the goods that you manufacture?


Edmund James Bristol: Why, we are not shipping to you to that extent, are we?


George Gibson Coote: No, but you say that if we do not buy your goods you will not be able to keep your factories going.


Edmund James Bristol: No, I am not saying
that at all. I simply say that if your free trade doctrines were to go into effect you will ruin the eastern manufacturers, with the exception, of course, the manufacturers of pulp, paper and lumber, and you will ruin substantially the eastern farmer. On the face of it, you in the West will be just as prosperous, the only difference being that you will have to pay for your manufactured products any price that the United States trusts choose to ask for them, and you will have the national debt of this country on your hands-that is alL And you are getting perilously near that condition now in connection with the manufacture of agricultural implements in this country. Because, before the war the agricultural implement manufacturers in Canada, particularly the Massey-Harris company, had a tremendous and growing trade in Europe, especially in Germany and Russia. That market is gone to-day, with a loss of many millions of dollars. We do not know whether they can weather present conditions or not; if they do not, you will have to pay more for your agricultural implements.
The point I was trying to make, as far as I was able to do so, is that every civilized country in the world-except the community represented by the farmers of western Canada-are in favour of the protective principle, in favour of protecting their home industries. I have also tried

The Budget-Mr. Bristol
to point out that the suggested change in the method of raising the revenue would not be in the interest of the western farmers any more than it would he in the interest of their fellow countrymen. I do not question the sincerity of the motives which actuate my hon. friends from the West. I believe they are influenced by sincere and patriotic motives; and it is only by all of us discussing our respective viewpoints that we can get results. I sincerely trust that in Canada we will all try to work together, eastern men with western men. I certainly recognize that agriculture is the basic industry of Canada, and that no country can be great and prosperous unless its agriculture is prosperous, and its workingmen are sufficiently paid, happy and contented. I want to see the best of feeling existing between the great provinces of Ontario and Quebec

and let me say here I was very glad that one of my hon. friends from Montreal went up to Toronto the other day and delivered a speech to our friends up there along this line. Let us continue our efforts to secure unity, because there should be no differences between us. There should be harmony not only between these two provinces, but between eastern and western Canada. Because we are all patriotically endeavouring, in our own way, to work for our common country and to obtain the best possible results.
There are many features in connection with the existing situation that require consideration, but one difficulty at present is this. Deflation is required in two items which affect almost everybody; one is rent and the cost of building,- and the other is the cost of coal to heat our homes. Now, I have never been able to understand why the building trades and building unions of this country-composed of reasonable and intelligent men as they are-have not been willing to accept reasonable prices for building material and reasonable rates of wages; why they have not been willing to cut down in the matter of prices and wages as the farmer has had to cut down the price of his products. If that were to take place there would be a tremendous building boom in this country and it would be of enormous benefit to Canada, and our working people in large cities like Toronto and Hamilton would not have to live in boxes lined with paper as many of them do-literally packing boxes. They would have decent houses in which to live and to bring up their families. When I find, for example, the price of brick in a great
city like Montreal is practically $23 a thousand when in my opinion it ought to be about $10, you can readily see what a great handicap there is to building operations. I have no complaint to make against our labour unions. I think our Canadian working men are as fine a lot of men as there are in the world; I do not know that any better are to be found anywhere. But if they would only get together and agree upon reasonable terms there would be millions of money spent upon building, and a greater number of houses would be available at cheap rents. Another necessity is a reasonable price for our coal. There must be deflation in both the directions I have indicated. A labouring man is no better off with $10 per day than with $5 if the latter figure will purchase as much as the former, except that he can say that he has more money in his pocket. The great object should be to get the men engaged in the building trades together and try to arrive at a reasonable rate for the construction of houses so that rents might be cut down and people housed at a moderate figure. Once you can cut into the wages of the men who run the great railways of this country, once you can properly and fairly do that, you can unquestionably effect a great reduction in railway rates; and you certainly have got to have a reduction of railway rates in some way. As between the east and the west, if the east, which benefits more from protection than the west, has to pay a little more in consequence it would perhaps only be fair.
With reference to the amendment, it seems to me purely a question of whether our western friends and the rest of the House want to go on record as saying that no matter what platform you may stand on during the election you can discard that platform when the election is over. If I have any comment to make on the subject it is just this-does the House think it wise for public men to put themselves into such a position that it can be said that no reliance can be placed on their promises? I do not believe that to be in the interest either of this parliament or of the country.
Mr. ANDREW R. McMASTER (Brome): Before entering upon the few observations that I have prepared for this afternoon, may I respond briefly to some of the assertions and arguments advanced so pleasantly by the hon. member who has just taken his seat. First of all, he complains that the
The Budget-Mr. McMaster

Finance Minister should have raised the tariff; if only the tariff is raised everything will be happy in Canada. Now a tariff is a tax, and therefore the logical conclusion is that if we will only tax ourselves a little more heavily all will be well. My hon. friend states that we should be very much afraid of German competition because in Germany the men are working on scales of wages which he read out. Now, there are two possible conclusions from the figures which he gave us. One conclusion is that someone has been telling him fairy tales; the second conclusion is that the purchasing power of the mark in Germany must be very much higher than its international or exchange value, because according to the figures which he gave us the amounts paid to people in Germany would not keep body and soul together; and I think we will all agree that workmen always have to have enough to keep body and soul together or they are not able to work. He states that the German workmen are working ten hours a day if not twelve. That is not in accordance with the information which I have gathered. I have a paper published in New York called the Dry Goods Economist. It is in its 76th year of publication, and has been handed me by a gentleman in whom I have the utmost confidence. I will read an extract from the issue of the 20th May of this year. It says:
Last week, during the convention of the Ninth National Foreign Trade Convention, a speaker who had just returned from Europe quoted Dr. Walter Eathenau, the prominent German publicist, as having declared that Germany is now exporting only 25 per cent of its prewar volume. And that German production costs have been rising rapidly is the statement made to our Commerce Department by its Commercial Attache at Berlin, with the upward tendency still apparent.
We may doubt the statement of Dr. Walter Rathenau because he is a German, but it would be impossible, I think, to doubt the correctness of the information gathered by the American representative in Berlin that production costs in that country are rapidly rising. The article goes on to say however:
Indications, moreover, continue to multiply that Germany has not a great amount of goods to export. A writer in a Berlin trade paper, dated April 23, states that in the first half of the year 1921, as a result of strikes in Germany. 772,891 persons were out of work and that the German industries during that period sustained a loss of 11,608,129 working days.
After all, human nature is somewhat the same all over the world. Workmen

are being asked in all countries of the world to accept harder working conditions and to accept lower pay, and they accept it reluctantly and only after a struggle. I think that what is contained in this article is very much more likely to be true than the information just given to the House by the hon. member for Centre Toronto (Mr. Bristol) although I do not infer for a moment that the hon. member would desire to mislead the House. Might I say with all kindness, that his address would appear to be labelled, if the Marking Act were in force " Made in Toronto ". The United States high tariff has been the cause of the prosperity of the United States according to the view of the hon. member, but we know differently. We know the economic history of the United States only shows that a people with boundless natural resources and a virile hardworking and intelligent population can succeed in spite of a very unsound tariff or fiscal policy. The fact of the matter is that, although there has been an ebb of reaction in United States in trade matters, the best commercial, the best industrial and the best financial minds in the United States are more and more tending towards a free trade solution of the difficulties of the world. There was an effort made in the Fordney Bill to put upon the tariff schedules boots and shoes and leather, which are now free, but a great movement came to have them remain on the free list. And from whom? From the shoe manufacturers of United States. " Because " they said, if you put them on a protective tariff schedule, then, of course, those who produce leather, which is our raw material, will demand that leather be put on a tariff schedule and we produce a great deal of boots and shoes for foreign export. We have got to meet the competition of the world. In order to meet the competition of the world we have to have our raw material free, and therefore we believe we will find when the dust of the conflict clears off at Washington concerning the Fordney Bill we will find boots and shoes and leather still on the free list.
Now passing from the United States my hon. friend went back to Germany and said that the Germans had come and bought from Newfoundland some Wabana ore. I mention that in passing merely to illustrate the argument which I propose to make in reply to the argument which he made

The Budget-Mr. McMaster
that the coal mines of Nova Scotia are absolutely unable to endure competition from the United States and that the steel interests of Nova Scotia are absolutely unable to meet the competition of the American steel interests. His argument is this: We have to go under the sea in wet mines for our coal, and in Newfoundland they have to go under the sea in wet mines for our iron ore. But if the iron ore was hard to get out why do the Germans buy it? Why did they not go to the United States where the ore according to his statement was raised with a steam shovel and therefore should be much cheaper? What is the matter with the steel interests or the coal interests of Nova Scotia? They are both combined. Is it the water in the mine or the water in the stock that is the trouble? I know something about the formation of the Dominion Iron and Steel Company. I was only a youth, but I heard the mattei discussed in Montreal, and I know that the great promotor of that industry, H. M Whitney, told investors in Montreal before he invited them to put in any money, in the early days of the concern, that such was the advantage that Nova Scotia possessed with reference to this coal and to the close proximity of iron ore in Nova Scotia, that they could meet the competition of the world. I was wondering whether if that company had not suffered from the watering of stock, the re-watering of stock and the re-re-watering of stock that has taken place, and if it had remained in the hands of the capable honest and high-principled business man that some time ago had control of the company, whether it would be in the condition in which it is to-day. And what is the situation, and what is the conclusion which should be reached?


Mr. MARTELL:: Do I understand the hon. member to state that it would have been better for the company if there had been no Whitnej legislation?


Mr.   McM ASTER@: No, I made no such assertion. What I did say was this: Mr. Whitney told the interests of Montreal, when the company was formed, that they could stand competition from the world, and I know that when the company was floated the common stock was sold for fifteen cents on the dollar.


Edmund James Bristol: Does the hon. member dispute my statement that it costs twice as much to-day to raise a ton of coal to the surface in Cape Breton as it does in Pennsylvania? That was my statement. I did not
go into the watering business or anything else.


Mr.   McM ASTER@: I am not in a position to contradict the figures given by my hon. friend, that it costs twice as much in Nova Scotia to raise a ton of coal as it does in certain parts of United States; but if he tells me that my statement as to the watering of the stock of the Dominion Iron and Steel Company and the other companies, almost too numerous to remember, which preceded or have succeeded that company is untrue, I would ask him to look at the quotations on the stock exchange of the preferred stock, and the second preferred stock, and the common stock, of that company, and answer me whether, if dollar for dollar had ever gone into that concern, it is likely those stocks would have been quoted at the price at which they are quoted now.


Edmund James Bristol: I can only tell my hon.
friend that, with reference to the second preferred stock of the Steel company exchanged for the Dominion common stock, I am aware that the price of $70 a share was paid for 50,000 shares a short time before. I have myself paid $140,000 or more for 2,000 shares, and that money went into the treasury of the company. I do not know about previous transactions, but I know the English syndicate-and they have been very much misrepresented; I know my hon. friend wishes to be fair- men like Lord Furness and others who came in, paid $70 a share for the common stock which is to-day selling at $30.
Mr.-McMASTER: I suppose the shares of the second preferred stock were $100 par. If they were bought at $70, there is 30 per cent of water, at any rate. I do not know whether I made any statement as to the exact amount of water, but I think the company has been very well sprinkled. What is the logical conclusion of what my learned and hon. friend has told us, if we take his statements as being absolutely correct? It is this, that there is no hope in Canada for getting steel rails at prices which would compare with world prices. Nevertheless, we have an annual deficit running from $50,000,000 to $100,000,000 on our National railways. Everything that makes railway construction, whether it be of bridges, or steel rails, or steel cars, or steel wheels, more expensive, is going to increase the deficit on our National railways, which deficit has to come out of our pockets.



The Budget-Mr. McMaster
My learned and hon. friend then turned to Australia, and he said that Australia had had free trade. I do not think, in the recollection of the present generation, Australia was a free trade country. Prior to the confederation of the Australian states, there were two states in Australia, one being a free trade state and the other a protectionist state. A very interesting argument for the benefit of free trade as opposed to protection for industries can be drawn from the fact that the manufacturers of the free trade state in Australia were more prosperous than those in the protectionist state alongside of it.
I do not think the West ever had such a high compliment paid to it as was paid by the hon. member for Centre Toronto. If the people who live in the prairie provinces cease buying goods from eastern Canada, then, he says, we may as well shut up shop. That is a pretty good reason, if true, why we should endeavour to have living conditions such as to encourage people to stay in the western provinces and to encourage more to go there. I think the agricultural implement business is one which could have a very happy and useful life even under the free breath of absolute free trade. As Mr. Findlay, the late manager of the Massey-Harris Company said, "Give the manufacturers of agricultural implements our raw materials free and we will meet the world." That is the evidence given by Mr. Findlay, the manager, himself. I have endeavoured, very inadequately, I am sure, to deal with what has been stated by the hon. member (Mr. Bristol) who has just taken his seat.
The task of the Minister of Finance (Mr. Fielding) is one of the heaviest that has ever been before a Minister of Finance of this country. When he was appointed, when the ministry was formed, the Minister of Finance said: "Cabinet ministers are subjects for sympathy rather than for congratulation." I congratulate the Minister of Finance, because he had such a real appreciation of the difficulty of his task; but I know all in this House, irrespective of whatever their view of public policy, whatever their party allegiance, wish the Minister of Finance every help and strength in meeting the situation which confronts him. May I tender him my warmest congratulations on courageously doing away with those underhand methods of giving protection to special interests in this country which were found in the Depreciation of Currency Act, the Marking Act, the Certification Act and some other acts, the names

of which I have forgotten for the moment? I believe he is entitled to the highest commendation for his action in that regard. We have had some criticism of his attitude from members of the official Opposition. Some of this criticism has been couched in kindly and polite language, such as was use! by the hon. member who has just spoken. Other criticism has been uttered in language which I do not hesitate to characterize as grossly unfair. The hon. member for West York (Sir Henry Drayton), who formerly occupied the high position of Minister of Finance of this country, stated that this was a budget giving a preference to Great Britain and free trade to Germany. I think the hon. gentleman rather fell below his usual level when he made that statement, and it was unworthy of one who held high office in this country. For anyone to try to introduce international bitterness and hate into the discussion of a business matter is, I believe, highly undesirable. Moreover, the statement is not true. The tariff remains on German goods at the general tariff rate, which is, in many cases, a high rate. The argument used by the ex-Minister of Finance was an interesting one. He seemed to think that the prosperity of a country was helped by two things-perhaps I should say that he seemed to think that the prosperity of a country, as regards the possibility and power of exporting goods and entering into competition with the world, was helped by two things; first by a depreciated currency, and second by a low standard of living. How can we expect, says he, the Canadian workmen to comnete with the workman who is earning only a few dollars a week? I doubt if there is any advantage in a depreciated currency as regards payment of wages in a country because depreciated currency means merely an inflated currency, and as a rule, when you inflate currency, you inflate prices at the same time, in just about the same proportion. I do not, therefore, see how there can be any real advantage in that regard ; but I am perfectly certain that, when a country with an inflated or a depreciated currency goes outside to purchase, any possibility of advantage disappears; and Germany, which after all is a country of northern Europe with a temperate climate, a country having to buy a vast deal of its raw materials outside of the country, when it goes outside, has to pay, not in its depreciated currency-for after all, wealth does not consist in pieces of paper turned out by a printing press, but in real money ac-

The Budget-Mr. McMaster
cording to the standards of the country in which it makes its purchase. I have in my hand a table which has been prepared for me by our Dominion Bureau of Statistics-and we are fortunate, indeed, in having available to members of this House who care to study matters carefully and thoroughly, the assistance of the able and courteous official whom we have at the head of this department, with his no less able and courteous assistants. I have before me the monthly averages of imports for consumption into Germany and exports from Germany. This shows that, in 1913, the monthly average of imports for domestic consumption was almost 900,000,000 marks. Their exports of domestic products totalled almost 842,000,000 marks in 1913. In January of this year they imported over 12,500,000,000 marks' worth of goods and exported in the same month goods to the extent of ever 14,500,000,000 marks. A great deal pf these purchases are purchases in foreign countries of raw materials worked up in Germany and then sent out of that country; and if there be any advantage in depreciated currency so far as paying the home labourer is concerned, it disappears entirely when you come to deal with purchases abroad. I may say that these figures are obtained from the monthly bulletin of statistics of the League of Nations for March, 1922.
Then there is another argument which is very unsound, and which I think is a very dangerous one from the point of view of labour, and that is that cheap labour is inexpensive labour. Cheap labour is very often the most expensive sort of labour. Let me give two examples. When the Panama canal was being built the white labourers were paid in gold and the black labourers in silver. They were paid so many dollars a day, one in gold and the other in silver, and it made a substantial difference between them. But the amount of labour which the white man did over and above that of the black man made the two labour costs practically the same. Again, some time before the war, a commission of investigation on labour costs visited the United States from Great Britain. They found that in many lines of work, wages in the United States were considerably higher than in Great Britain, but that the labour costs were not higher, in many cases being lower. Why? The highly paid, ambitious man getting a good wage and living in a good house is anxious to see his children well educated, and he
therefore puts into his work a force and efficiency which the lower paid man does not. I trust, therefore, that we have disposed of this suggestion that we should change our legislation because of fears from German competition.
Then we have the remarks of the hon. member for St. John and Albert (Mr. Baxter), who thought that the Almighty had not dealt hardly enough with the German people, and who wished to see some German cities devastated. Well, I would remind the hon. gentleman that vengeance belongs to a Higher Power. Hatred forms the seedbed of future wars, and anyone who speaks or writes with the idea of perpetuating national hatred just waters that seedbed and brings forth the seeds to quicker and surer germination. The official Opposition often claim, or speak in such a fashion as to make one believe, that they regard themselves as the official depositories of loyalty to the Empire, as they call it, and of pride in British connection and admiration for British traditions. So far as admiration for British traditions is concerned, I do not give ground to them for one instant. But I say that any desire or attempt to foment and maintain international hatred and bitterness after the fighting is over is not the British way. Let me give two or three examples to illustrate this truth. Quebec was taken in 1759 at the close of the Seven Years' War. Now, I am sure that there had been many atrocities committed on both sides in that war, because both races on the North American Continent had the aid of their savage allies, the Indians. While the siege of Quebec was in progress the farms and farmhouses of the French-Canadian habitants in that neighbourhood were devastated. The French-Canadian looked forward with fear and trembling to what would happen after the capitulation. But what did happen? The day after the capitulation, Amherst said to his soldiers: " These French-Canadians are now your fellow-citizens; treat them as such." Three weeks afterwards, speaking in their own tongue to the French-Canadians, he said: You are now British subjects, entitled to the rights of such. I have told my soldiers to treat you as fellow citizens; see that you treat them in the same way. What ensued? A few weeks after, the Tommy Atkins of that day was. helping the habitant bring in his crops; and it was not more than a month or two


Mr. LADNER:: I might tell my hon. friend that I was in Belgium last summer. Is he not aware that a large quantity of those imports represent raw materials brought in for glass and other manufactures? They do not put a duty on such imports. They manufacture those materials and then export the finished goods to the United States and other countries. That is why they have such an enormous merchant marine and such a world-wide business.


Mr.   McM ASTER@: That is exactly the point which was so properly placed before the House by the hon. member for Brantford, supplemented and, to a certain degree, corrected by myself-that it is these free trade nations who are able to take raw materials from the other nations, work them up by their energy, labour and experience, and ship them out and make money for their people.


Leon Johnson Ladner: Does the hon. gentleman suggest as a result that Belgium is a free trade country so far as imports of manufactured goods are concerned? Does he know? I know she is not.


Mr.   McM ASTER@: 
Leon Johnson Ladner: You differentiated?


Mr.   McM ASTER@: I have not differentiated, because I have not had time to get the figures together; in fact, I do not think they are available in this country. I have not attempted to differentiate between what came in free and what came in dutiable, but I say that if you take the whole import trade of Belgium in 1912, only li per cent was levied on it. Some imports came in free, others, of course, were levied upon at higher rates than li per cent. But I have some figures which will enable my hon. friend to appreciate my argument.


Mr. CRERAR:: May I interrupt my hon. friend at this point? Were these duties in the nature of protective duties on such articles as were not produced in Belgium?


Mr.   McM ASTER@: I do not know, but I would imagine that either the duties were protective over a very, very small number of articles, or they were merely revenue duties. There is only one of those two conclusions. But answering my friend from Vancouver (Mr. Ladner): In 1907-I got these figures from the report of the Free Trade Congress meeting held in 1908-in 1907, of Belgium's imports, 87.36 were free and 12.64 were taxed. So that shows that a very great majority, 87 per cent or more, came in free, and a very small minority came in taxed. Even on the latter the tax must have been very small.


Arthur Meighen: Will the hon. gentleman permit me a question? Can he name any of those goods that come in free which are articles that do nott compete with Belgian goods or Belgian industries?


Mr.   McM ASTER@: I do not know. I
cannot tell.


Arthur Meighen: That is the whole point.

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Mr.   McM ASTER@: A protectionist convinced against his will is of his own opinion still. Now, I have the figures for 1907 for Holland. In 1907 Holland, I see, laid a tax of B per cent on manufactured goods. I assume that in this case I can answer my right hon. friend, (Mr. Meighen) who is modestly sitting in the rear; those goods, I imagine, must come into competition with other goods made in Holland. On raw material and necessaries of life it was 2 per cent and 3 per cent, and as the total taxation in 1912 was less than one-half of one per cent, I presume that foodstuffs must have come in free. Holland, I should think, is in exactly the same position as Denmark; they are splendid agricultural countries; their agriculture is developed to a very high point of perfection, and they will have no protection upon food.
I think I might now pass to what I would call the great example of free trade, and that is the country which, I believe, has the honour of having been the native place of the member for Brantford (Mr. Raymond)-Great Britain. Let me deal first with the Key Industries Act. If there ever was a case, Mr. Speaker, of_ much cry and little wool, it has been the joy of the protectionists over the Key Industries Act. The Key Industries Act affords a protection, it is true, 331 per cent on the articles included in a certain schedule, but if that schedule came into contact with the schedules in a real protectionist country, it would be absolutely lost; it is so small you would not be able to find it. It could be printed on half a page of this book which I hold in my hand. It deals with the most restricted classes of goods:	optical glass
and optical elements; theodolites, beakers, flasks, burettes, measuring cylinders, thermometers, tubing, and other scientific glassware, and lamp-blown ware; galvanometers, pyrometers, electroscopes, barometers, wireless valves and similar rectifiers-I will not read the whole list. The point I want to make is that the amount of goods which come under the Safeguarding of Industries Act is infinitesimal compared with the amount which goes free into the Old Land. Then there is provision for the imposition of a duty should a committee decide that certain goods are being sold in too keen competition with British goods. But the interests of the consumer are well safeguarded under the Key Industries Act. First of all there is provided a committee which must sit and investigate the case, and appeal may be had by any interest affected

to a court of appeal constituted by the Lord Chancellor of England. This board may make an order, but if Parliament is going to sit within one month, that order cannot go into effect. If our protectionist friends would be willing to put their whole claim for protection under this act I do not know whether even such a convinced free trader as myself would not at least take it into earnest and sympathetic consideration.
What is the history of the free trade movement in England? Was it that English industry was built up under protection? -industry which takes the raw material from the fellaheen, the negro and the other persons who work in the hot parts of the earth to produce cotton and jute and cocoa and rubber and all those things which are used in the industries of Great Britain. Was it under protection? No, it was not. In 1721, first of all, Walpole started to take off duties. Then from 1823 to 1826, Huskisson took off a great number of duties. Then there was the great free trade agitation from 1837 to 1846, when John Bright and Richard Cobden, those two great apostles not only of free trade but of international brotherhood and of reason between man and man and between nation and nation, went throughout the length and breadth of the land. We had the repeal of the corn laws, and in 1860 we had the final doing away with duties. And what happened? Their trade went forward by leaps and bounds; their shipping increased by the hundreds and the thousands and the tens of thousands of tons. I cannot take the time of the House to go into the matter in detail but let me say that by reason of that free trade policy Great Britain not only became, for long, long years, the premier manufacturing country of the world, but she became the carrier, she became the banker, she became the insurer, for a great part of the whole known world. Prior to 1850-prior, indeed, to 1860-the United States, the other great nation of the world, carried fifty per cent of her own imports and her own exports in her own bottoms. The Stars and Stripes floated in nearly every sea; in nearly every port you could see the clipper-built ships of the United States-aye, and the clipper-built ships of Nova Scotia, because, although the United States stood on a high eminence at that time in the matter of shipping, alongside them were the sailors from the little province of Nova Scotia. But what happened after 1860? As the gentleman from Centre Toronto (Mr. Bristol) has said, protection was put on in the United States.

The Budget-Mr. McMaster
And protection "protected" the merchant marine of the United States almost out of existence, so that in 1900 not ten per cent of American imports and exports were carried in their own bottoms. There were other contributing factors, of course, but that is one; and I think the House and those of us who believe in the doctrines of free trade are deeply indebted to the member for Brantford for having brought before us this splendid example of how free trade helps nations to develop their secondary industries.
Now, I wish to deal for a short time with the budget itself. Let me say that I make the suggestions which I
5 p.m. have to make in a spirit of sincere diffidence and modesty. I am making suggestions to a finance minister who was my leader-and who is my leader-in matters of finance for very many years. I suppose the first time I heard the Minister of Finance speak was when I was a student in Montreal, on the occasion of a by-election, when we elected Jimmy McShane over Dr. William Kingston. The minister spoke in the old Windsor Hall-and ah, what a night was that! There was the Minister of Finance; there was Sir Wilfrid Laurier; there was the late Mr. Emmerson, from New Brunswick; and last but not least there was the Guys-borough giant, D. C. Fraser, of Antigonish. The principles which were set forth then were the principles which were to guide the Liberal party. I believed in those principles then; I believe in those principles now, and in the light of those principles I propose to examine the budget.
The sales tax provisions are not what the member for Southeast Grey (Miss Mac-phail) described them to be-a step backward. I think the hon. member described the taking off of the 21 per cent as a step forward and the putting on of the sales tax as a step backward. Well, that is not quite fair, because a sales tax goes not only upon the goods brought into the country but also upon goods manufactured in the country, and a great deal more of the resulting proceeds go into the coffers of the state. Now, I am stupid about figures; I like if possible to get things down in concrete shape, because I feel, Mr. Speaker, that if I myself understand them other people should be able to understand them as well. So I put this in a concrete way; I think I have arrived at the right facts, and I trust that my conclusions will commend themselves to the House. If a bolt of cloth be manufactured in Canada and sold by the
manufacturer to the jobber, the manufacturer will add to his invoice 21 per cent under the new regulations. This amount the jobber will pay to the manufacturer who will account for it to the Government. That is the first step. Now the jobber when he comes to re-sell to the retailer has to add to his price the 21 per cent he paid to the manufacturer, and then, of course, if he is doing business on proper lines he must add to that his ordinary profit. Now let us suppose that the jobber is satisfied with an ordinary profit of 10 per cent-sometimes he will get more, sometimes he will get less; but I suppose 10 per cent is not an unfair profit to estimate. Therefore the tax when the goods arrive at the retailers amounts to 21 per cent imposed by the manufacturer, plus 21 per cent. That makes 41 per cent plus profit -say 10 per cent to the jobber on the 21 per cent he has had to advance to the manufacturer, which is between one-fifth and one-fourth of a cent. Hence the retailer finds his purchase increased not by 41 but by 41 per cent. On this he bases his profit. Now what a retailer's profit is it is sometimes difficult to say. I have heard of one large house which puts a hundred per cent on. I think that is profiteering, and as I like to quote people who, I believe, are doing the right thing, we will call it 40 per cent. That will include 40 per cent of the 41 per cent; so when it finally arrives to the consumer who pays it he does not pay 41 per cent but a higher amount-the consumer pays 61 per cent, that is to say if ordinary business methods are followed. Of course sometimes a jobber will absorb it, sometimes the merchant will absorb it; but I think as a general rule that under ordinary canons of business that tax of 41 per cent will be 61 per cent before it reaches the consumer. Now, if the bolt of cloth is manufactured in Canada and sold directly to the retailer by the mill-and that often happens-then the tax is 41 per cent, there is only one profit to add, so that the ultimate consumer will bear 61 per cent instead of, as it is, 61 per cent. But suppose the bolt of cloth is manufactured in Bradford. It is sold to a jobber in Ottawa, re-sold by him to a retailer in Almonte, and sold by him to a minister of the gospel who is a member of the House of Commons on the Progressive side.


An hon. MEMBER:: Name him.


Mr.   McM ASTER@: We are not allowed
here to name people by name. Now how does that work out? The duty under the new schedule, the duty on this bolt of

The Budget-Mr. McMaster
cloth, is 271 per cent, and the sales tax is 4i per cent, which makes the aggregate impost when the cloth comes into this country 32 per cent. When that cloth reaches the consumer the jobber will have to have his profit on the duty which is advanced to the Government, if he imported it, and it will also have to bear the profit of the retailer. So I calculate that if we give the jobber his 10 per cent, and give the retailer his 40 per cent, we will make the duty borne by the consumer of this bolt of cloth 49 per cent and of this impost the sales tax and the profits on the sales tax amount to 5i per cent. Now if the bolt of cloth is sold directly by the manufacturer in Bradford to the retailer in Almonte, the sales tax is 6 per cent and the duty will be 331 per cent; and if the cloth was manufactured in Lowell, Massachusetts, the duty would be 41 per cent, and the duty borne by the consumer would be 41 per cent plus 40 per cent or 571 per cent. Now what are the deductions that I make? First of all it seems to me that the imposing of a heavier duty, on the sale of the goods manufactured at home from the manufacturer or producer to the retailer

a heavier rate of duty than is borne in the case where the manufacturer sells to the jobber and the jobber then sells to the retailer-really discourages the elimination of the middleman. I know that an apparent unfairness, perhaps a real unfairness, might take place if we did not so increase the rate of the sales tax in that case; hut I do say that one of the undesirable features of this sales tax is that it encourages the maintenance of the middleman or discourages his elimination. Now that is one, and I do not think a very important, direct objection to the tax, but where I think-and I submit this with a good deal of confidence-the tax is undesirable is the imposition of the sales tax on goods which, on entering this country, already pay a high customs duty. Because what happens? This may very possibly, may very likely, happen: That it makes very little difference whether you call it an impost, or a sales tax, or a protective or revenue duty-if the impost amounts to a high percentage the goods may not come in at all, and the revenue by that fact suffers. That is a point that should be borne in mind; and I respectfully ask the Finance Minister to carefully consider as to whether it would not be better to make these sales taxes, in reality what they are in name, excise taxes-to have them to a certain extent as counter-[ Mr. McMaster. ]
vailing duties. In that way we will get more money for the state and we will, in my humble opinion, substantially relieve the consumer.
Now I have dealt with the advantages of the sales tax over the mere imposition of customs duty by the tariff. The cuts are smaller than I had hoped for-smaller indeed than I believe I had reason to expect. If the Finance Minister will pardon me I cannot very well say that it is the quick, decisive step that he customarily takes in the right direction; I would say it is a short shuffle generally in the right direction. I am doubtful, too, about the advisability of waiting to see how the Americans are going to deal with their tariff before dealing with our own, but I say this: I am not going to take issue with the Finance Minister in that regard because he may have information which he is unable, naturally, to convey to the House, information which he has learned on his recent trip to Washington and which leads him to think that it is good tactics not to declare our cuts immediately. But I would remind him respectfully of what Peel said in 1841, that "the way to overcome hostile tariffs was by free imports."
Why do I accept this budget, with less enthusiasm however than I would like to have accepted it? Why do I accept it? I accept it, reserving my right to criticise any items of importance when we are in committee on the resolutions. I do so because I am unprepared to believe that the Liberal party has been, or will be, recreant to its history on the trade question. I sometimes think that some of my friends opposite are not quite as fair as they should be to the Liberal party in regard to what they did in connection with the tariff. We came in in 1896, and we did make substantial reductions in the customs duty. Open confession is good for the soul. I never pretended to be pleased with the revision of the tariff of 1904. We had increased the British preference until it was a full 331 per cent, but in 1904, in response to that pressure which is constantly brought upon the government by organized protected interests of this country, which is not offset by the consuming interests as they should offset it,-in response to that pressure there were certain increases in lines of textiles, woollen cloth, tweed and wearing apparel and on twine and cordage, and slight reductions were made on china and window glass. Then we had the revision of 1907. As to that revision I am not prepared to say whether that was a

The Budget-Mr. McMaster
revision which on the whole reduced or increased the British preference. I have in my hand a statement of the textile items of the tariff, and I find there were decreases in 18 items, and there were increases in 18 items, and no change in 9 items, and no change in 14 items on the free list. There were 59 textile items in the customs tariff of 1907 and they were divided, as I say. Whether the increases were greater than the decreases I do not know, but I am sorry the decreases in the preference were made, and 1 am glad the increases in the preference were made. But whatever our backslidings in the past were, what we did in 1911 should be accounted to us for righteousness. I suppose I will get the name in this House of being a candid friend, disagreeing at times with everybody but not necessarily all at the same time, but I do not think the Liberal party has had quite as much credit from the western friends as it should have for what we did in 1911. In 1878 the Liberal party went down to defeat because it stood up for the rights of the consuming public against the organized protected manufacturers of this country. In 1911 they did the same thing, and they met the same fate. AVe were not altogether blameless in the matter, and I will tell the House why. Because, from 1904 to 1911 we had, doubtless because of perfectly natural and reasonable causes, a pressure of work on ministers which was abominable and abnormal- more than it should be, we had not been preaching our gospel as we should have preached it, and generation after generation of young men came to the age of 21 who had never heard the trade question discussed, who did not know that trade was a good thing in itself and were therefore able to be led astray and beguiled by the specious argument of "no truck or trade with the Yankees", or the statement that our loyalty would be affected if we dealt in potatoes, or apples, or wheat, or barley, or flax, with the United States. But we went down fighting for a great cause. And it is because we have done these things in the past that I propose to maintain my support of the budget in the present instance. We have also the declarations of the Liberal party in connection with the trade policy. We have the Ottawa platform of 1893, and I may say if one will read over this platform of 1893 he will find that everything in it is true, that after having experienced protection from 1878 to 1893 the Liberal party came to the conclusion expressed in their platform was
right, and I say that in the mind of every informed, unprejudiced and disinterested man, everything that happened since that time bears out the truth and soundness of the position we took. I rely upon the statement made by the Minister of Finance (Mr. Fielding) in introducing his budget of 1897- which was the beginning of a fresh era for Canada. Now let us be fair to the Liberal party and let us be fair to the Minister of Finance. Canada after 1896 was a different place from what it was prior to that time. The Minister of Finance, who is the Minister of Finance to-day, after having read the Ottawa platform said:
Mr. Speaker, the electors of Canada, in due course, gave their verdict upon that and upon other issues, and subject to such changes as changing circumstances may require, and as to which I shall have something to say as I proceed, we accept the Liberal platform of Ottawa as the declaration of principles which we are bound to follow in our tariff reform.
I pass on to a declaration made by one whose name is ever dear to and revered by not only Liberals but all well disposed Canadian citizens. I refer to Sir Wilfrid Laurier. During the last days of his life he was present at a meeting of the Eastern Ontario Liberal Association, held in this city, and on the 14th January, 1919, he spoke as follows, concerning the trade question:
Sir, I told you at the commencement of my speech that it was the commercial freedom of England which enabled her to pass triumphantly through this war from an economic point of view. England, needless to say, has always been in the van of the greatest advances with respect to freedom of any kind, whether it be religious freedom, civil freedom, or political freedom; there are no people in the world today who have a greater degree of these liberties than have the English people or the Canadian p^ple. In the matter of commercial freedom, England has not only been well to the front, but has been very much in advance of any other people.
Discussing the question of the granting of preference to Great Britain and the Conservative party's objections thereto, he stated:
We do it (we grant the preference) because we are British subjects and because we believe in the principles of free trade. We believe also that it is for the good of the Canadian people that we should adopt that policy, and by that policy we stand to-day.
I adhere to this budget and support it because of this fact; that we had a great convention at Ottawa in 1919. We passed a trade plank in the platform which I consider is a sound plank for the people of this country and after we had passed

The Budget-Mr. McMaster
that trade plank the present Minister of Finance allowed his friends to nominate him as the leader of the Liberal party. I do not think for one moment that the present Minister of Finance would ever, after that platform was passed, have allowed his friends to place him in nomination had he not been in substantial agreement with that platform-I do not mean to say that he was prepared to cross every " t " and to dot every " i " of the platform -but in substantial agreement with the decisions reached at that convention.
Let me speak just a moment in conclusion-and I have delayed the House too long-concerning where we can get the money. It is a hard thing to get money for the state; it presents many difficulties, and there are many dangers in connection with it. I am going to refer the Minister of Finance to what he said on the 14th of March, 1919, in this House, as reported on page 484 of Vol. 1, of Hansard, of 1919:
But my hon. friends who are interested in tariff questions will bear me out in this, that when you increase the tariff on a class of goods that are made at home, not only do you get the increased duty which you collect at the customs house, but for every dollar that you collect at the customs house for increased duty, the consumer pays to the manufacturer two dollars which does not go into the public treasury.
It is towards those two dollars that I direct the attention of the Minister of Finance. I believe it will be found on investigation, in certain lines, the Canadian manufacturer occupies the field to such an extent that imports are negligible. I believe it will also be found that he has abused this privilege that the tariff has given him by watering his stock, by capitalizing the tariff against the taxpayers of this country. I should like to draw to the attention of the House two instances which came to my notice just the other day, and which were given me by a man in whom I have the utmost confidence, Mr. Isaac Pedlow, who was a valued member of this House during the last Parliament. He is a merchant in Renfrew. He was selling collars for 18 cents each, or three for fifty cents. His competitors were selling the same collars for 25 cents each, and he was refused by the manufacturer additional supplies of those collars. The manufacturer would not allow him to sell the collar at the price at which he wanted to sell it. That is an example of the tyranny of the trust.

Let me give the House another example, which will interest the ladies. It refers to silk stockings. The Niagara Maid Manufacturing Company manufacture a silk stocking which was sold to Mr. Pedlow at what averaged $1.37 i a pair. He put them on the market at a very fair profit to himself, at $1.75 a pair, or a profit of between 30 and 40 per cent. His competitors were selling these stockings at $2 a pair, and he was instructed by the selling agency of the mill that he could have no more of those stockings unless he was prepared to sell them for $2 a pair instead of $1.75. You say: "Should the attention of people be drawn to such trifling matters as these?" Yes, because these things show that, in many lines of primary necessaries of this country-I suppose silk stockings are not an absolute necessity of this country, although some people may think they are-it is not the ordinary trading rules which obtain; but by the control of the market, because manufacturers can do this under no other circumstances, the manufacturer is endeavouring to make of free merchants men who have to be, to a certain extent, his serfs, to do what he tells them. It is what Mr. Edward Porritt calls an example of the new feudalism, and the sooner we get away from that the better.


Arthur Meighen: Is the hon. member not aware that the Prime Minister (Mr. Mackenzie King) has solemnly undertaken to get rid of all those practices that he complains of by trusts?


Mr.   McM ASTER@: I am glad to know that he has, and he will have every help which the member for Brome can give him to accomplish that end.
Now, we come to the amendment. I will not read it, because it reminds me of a story of John Henry Pope, who came from that part of the province of Quebec which I have the honour to represent. In talking about something that was said, he exclaimed: " There ain't nothing to it," and that is all, with due respect to the leader of the Opposition (Mr. Meighen) that I can say about the amendment. What is it? It is just another example of the policy of " scold." It gets you nowhere because, what do they say? Are they blaming the Minister of Finance because he has not taken duties down? Not at all. They want him to put them up. There is not very much in the amendment; there is not a great deal to it. I sometimes am glaid, because I am a humane

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man, that the members of the official Opposition are not living in the sixteenth century and are not of the female sex, because at that time they had an institution known as the " ducking pool " for common scolds, and I am afraid many of them would run a close risk of landing in that watery place.
What of the future? What has been the record of the Liberal party in the past? Can we depend upon the record of the Liberal party in the past to give promise that the Liberal party will be the great party of progress and freedom in the future, because the party of progress and freedom, by whatever name that party may be called, is going to rule this country in the future. The Liberal party has traditions. It has given to this country William Lyon Mackenzie, Louis Joseph Papineau, Baldwin, Lafontaine, and Papin. It has given to the country George Brown and Aime Antoine Dorion. It has given to the country Alexander Mackenzie, Edward Blake and Sir Wilfrid Laurier. I believe we should endeavour to be true to those great men of the past, and to see that we carry on the affairs of the Liberal party and of the country along the lines which they laid down.


Lewis Herbert Martell: Does the hon. member include Joseph Howe?


Mr.   McM ASTER@: I would include him; but alas for him, he joined a Union government. But he was in his time a great tribune of the people, and his voice and his name will never be forgotten while Canada remains. It would be, I say, a sad thing if the parties of progress were disunited. We have had an example in the old land of the effect of disunion amongst the parties of progress. We have had the independent Liberals, we have had the Labour party, largely animated by the same ideals, largely standing for the same principle, but kept apart by certain things, perhaps of secondary importance. I want to see in this country-I know I do; I know I speak for my electors, and I believe I speak for the rank and file of the Liberal party throughout this country-a Liberal party so truly Liberal that, under the broad folds of its banner, all people who love Canada, who love progress, who love liberty, who love equality, may find their proper place. That party must be free from all sinister influences. It must be strong in the confidence of the people. It must deserve the confidence of the people.
It must be guided, not by the fitful flare of expediency, but by the polar star of those Liberal principles which in the past have animated men of good will to bring about, upon this old world of ours, better conditions for the plain and common man.


Mr. W. C. GOOD (Brant) :: I would not ask the indulgence of the House were it not for the fact that there are some very -important considerations in connection with the present question under discussion which have not yet been placed before the House, and for this reason I am going to ask that indulgence in order that I may present those considerations.
First of all, however, I should like to say this:	I did hope for very much
more, in the direction of what would seem to me to be real progress, than is evident in the budget that has been proposed. And perhaps, if I were absolutely sincere, I might say that I did not expect very much more, knowing the record and the present composition of the so-called Liberal party. Regarding the amendment, I have nothing to say. But I have looked up the record of the Liberal party, both in the recent and remote past, in connection with the tariff question and the whole protective philosophy, and I shall present to the House a brief statement of the various opinions which have been proclaimed by the Liberal party for some little time in regard to this subject. In discussing the amendment, I think it is quite pertinent that we should know what the Liberal party has stood for, and what it purports to stand for at the present time.
Now, in regard to the last campaign, I would submit to the House-and I do so subject to correction by the hon. member for Brantford (Mr. Raymond)-that this hon. gentleman, at all events, did make it perfectly plain to his constituents that he did not subscribe to the 1919 platform of the Liberal party in respect to its tariff planks. How many other hon. members who proclaim themselves Liberals occupy the same position and so stated their attitude during the last Campaign I do not know, but I know that in this particular case the hon. member for Brantford proclaimed openly and publicly that so far as the tariff plank in the Liberal party's platform was concerned, he repudiated it.
Next, I want to refer to some history, and I shall begin with a little item that appeared in the Toronto Globe of April 15, 1858. It reads:
A meeting called by agreement of gentlemen holding protectionist views on commercial mat-
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ters in various parts of the country assembled yesterday in St. Lawrence Hall in this city. The aggregate attendance was about two hundred.
That this meeting was attended with success is indicated in an item which appeared in The Globe of March 25th, in the next year, 1859. Note the following:
With a degree of haste as rare as it is unseemly, the government yesterday forced the new tariff through all its stages in the legislative council. It was read the first, second and third time on one day; and now only awaits the Governor^General's sanction to become law. To accomplish their purpose ministers proposed to set aside an established rule of the council devised to prevent precipitous legislation; and they succeeded in carrying the point.
I wish now to call the attention of the House to a number of addresses that were given in the campaign of 1877, published under this title:
Picnic Speeches Delivered in the Province of Ontario During the Summer of 1877, by the Hon. Alexander Mackenzie, the Hon. Edward Blake, the Hon, R. J. Cartwright, the Hon. L. S. Huntington, and the Hon. David Mills.
There is some interesting reading in this record of the position which the Liberal party took in regard to the tariff question at that time. I want to quote just one extract from the remarks of the Hon. David Mills:
"The Conservative opposition"-said Hon. David Mills, March 15, 1877, in denouncing customs duties-"might disguise their proposal as they please, but it meant plunder and nothing else. It meant taking from the pockets of every consumer a sum to be given to some other person; and the system by which this was done was a system of plunder".
"If", continued Mills, "people knew that honourable gentlemen opposite intended to impose taxes to the amount of twenty-eight million dollars instead of fifteen millions, and that only fifteen millions would go into the public treasury, the balance passing into the pockets of certain capitalists, they would not support such a proposal. And yet, that is precisely the proposal of honourable gentlemen opposite, disguise it as they may."
The next record which I shall submit to the House is from a speech of the late Right Hon. Sir Wilfrid Laurier. Speaking at the Liberal Convention in Ottawa, June 20-21, 1893, he said:
It seems to me that it (the Paterson resolution) could hardly be improved upon. It is a thorough arraignment of the policy the government has followed. It sets forth all the evils which have flowed from the system of protection. It draws the line, clear and distinct, between the policy of liberty and freedom, and the policy of slavery; because, I leave it to the judgment of every free man, to the farmers, and above all I leave it to the working man in the cities, if protection is anything else but slavery.
I have many other quotations in connection with that Liberal Convention of 1893.

I shall not read them all at the present time because it would take too long. But a number of statements were made by Sir Wilfrid Laurier and others; and there were statements as well embodied in the election literature issued by the Liberal party in the campaign that took place in 1896, I have one here from the handbook that was used at that time:
Protection has been tried and found wanting. The Liberals offer a policy of free trade limited only by the necessities of revenue required for the honest, economic administration of the Government.
In the platform of the Liberal party as adopted on that occasion we find a most sweeping condemnation of the whole protective system:	I have it before me, but
I shall not take time to read it. I wish, however, to remind the House of what happened in 1896; and although, I should like to feel a little more charitably disposed towards the government of that day than I do feel, at the same time I want to say frankly that it was a most bitter disappointment to the farmers- and shall I say ?-to very many other people in this country that, in the first revision in 1897 that followed the election of the new government, further reductions were not made in the tariff. And I must say that, looking back on the history and the record of the government of that time, and seeing the beginning which is now made in, I admit, the right direction, we wonder whether or not the history of that time and that government is to be repeated on this occasion.
Now, reference has been made to the election of 1911. I want to read a little item from the Toronto Globe of November 8, 1911. Commenting upon the situation that then existed and that had existed for some time previously, this paper said:
The big interests of all kinds in Canada, like their ilk in the United States, while as individuals they call themselves Liberals or Conservatives, and may even hold party offices, are not any longer in any real sense party men. Great railway corporations, protected monopolies, and the banks that finance their exploitations and mergers are playing in Canada the same bipartisan game that was played so disastrously to public interest and national honour in the United States. Let there be no mistake. The horns and hoofs of the American system are already within the doorstep of Canada's house of government. The fight for freedom from its vulgar and oppressive domination has only begun in Canada.
Now, Mr. Speaker, we know what happened in 1911. I supported the late Hon. William Paterson with all my strength in that election, and I have always be-

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Iieved that the adoption of the Reciprocity Agreement would have been one of the best things that could have happened to this country. So I want to give every credit to the Minister of Finance (Mr. Fielding) and to his colleagues in the then government for their action at that time. But a year later we have a pronounce-' ment by a gentleman who now sits in this House as senior member for Halifax (Mr. Maclean). On March 13th, 1912, he stated:
We were divided in Canada on the National Policy for a good many years. Nevertheless, once the two parties came to see that the National Policy was essential to the country that division disappeared.
The hon. member was, I believe, an adherent of the Liberal party then in opposition, and here we have a frank admission that any difference which had existed between the two old parties prior to 1911 had then disappeared.
And I have another quotation here, Mr. Speaker. It is from a speech delivered in this House on June 9th, 1919, by a gentleman who announced himself as a protectionist Liberal. I refer to Hon. C. C. Bal->
lantyne, who was Minister of Marine and Fisheries in the late government. Listen to this, Sir:
I am a protectionist Liberal, a believer in moderate protection. Before I strayed from the fold, I did not find that my views were at variance with those of the majority of members composing the Liberal party of that day. Nor do I think that my views as a moderate protectionist Liberal would be much at variance to-day with those of the majority of hon. members sitting to the left of the Chair. We can only judge the Liberal party by the policy they pursued during the fifteen years they were in power. I for one saw no tangible signs of free trade during that period.
Mark that, Mr. Speaker:
I for one saw no tangible signs of free trade during that period.
An admission by a man who represented himself as belonging to the Liberal party, that he saw no signs of free trade, apparently no signs of the carrying out of the professions made in the platform of 1893, during those fifteen years from 1896 to 1911! I am not saying he is right, but that is his statement made on the floor of this House only two years ago. He continued :
The manufacturers of this country were perfectly satisfied with the fiscal policy of the Liberal government during those fifteen years . . . I think I may safely say that one can take as his very best guide in matters of this kind the policy of such great men as have filled the office of prime minister of this country during the last fifty years, and when the policy
of moderate protection has been adhered to by both Conservative and Liberal governments, that must be the easiest and best way of raising the necessary revenue, and also the fairest and most equitable system, having regard to the diversified interests that exist.
Then I have here the tariff planks in the Liberal platform of 1919, partly quoted in the amendment. I am not going to read those planks; we all know what they are. They practically reassert the assertions in the platform of 1893, and they are, as everyone knows, in very marked accord with the tariff planks in the Farmers' national platform.
Now, with respect to this extraordinary transformation-one authority has called it the " great apostacy "-I find the following in the report of the tariff committee of the Canadian Manufacturers' Association for 1918-19 as printed in Industrial Canada for July 1919:
As the tariff changes demanded at this session of Parliament-
That is 1919.
-go much farther than the Reciprocity Agreement of 1911 towards free trade with the United States, the threatened danger to the future of Canada is proportionately increased. Prom these denationalizing agencies our protective custom laws, inaugurated forty years ago, preserve our country. It is fundamental that the maintenance of our separate British nationality depends upon the retention of our freedom to shape our protective custom laws to serve our own needs.
In conclusion perhaps I might read a rather cynical comment which appeared in "Saturday Night" upon the situation as represented in the extract that I have just read. As I say, the comment is rather cynical, but it contains a good deal of wisdom. It is as follows:
The flag-waver is generally the man with the coin, or the man with the axe to grind. It was ever so. Kings and princes, through all the centuries, have waved their flags and their banners, and called upon their loyal supporters to fight the enemy. And the loyal supporters were just good enough and foolish enough to do it. Therefore, the kings and princes continued to rule over them and so they should. The financial kings and princes now wave the flag. The voter comes manfully forward and, with eyes blinded with patriotic tears, marks his little cross on the ballot for the "interests". Therefore the "interests" continue to rule over us, and so they should.
Now, Mr. Speaker, I am going to ask a very definite and, I think, a fair question. What is the significance of the extraordinary variety and contradictory nature of the views expressed and the conduct of the Liberal party for the last fifty years? To me there are three possible explana-
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tions: First, was the Liberal party insincere in its professions? If it was, that is an explanation. I do not answer the question; I ask it. Second, was it bribed, controlled or dominated against its convictions by tariff beneficiaries? Again, I do not answer that question; I ask it. Or third, has it honestly changed its mind and adopted protection as a sound national policy? I think that we who sit in this quarter of the chamber, at all events myself, have a right to ask those questions, and to have them answered. I am not going to answer them, because I cannot.


Mr. SUTHERLAND:: Why not make it twenty-four hours, and not fifty years?


William Charles Good: In that connection I am going to refer to some statements that were made here a few weeks ago, and one just the other day by some British Columbia members, to the effect that one's views on the tariff are geographically determined, and, further, that the whole tariff question is one of expediency and compromise and not one of principle. Even if it were true that one's views on these matters were determined by one's place of residence, the rightness or wrongness of the tariff system would not be thereby determined in the most infinitesmal respect. I would like to repudiate absolutely the suggestion that we in this chamber are morally justified in considering this question from the selfish standpoint of our own occupation or our own locality. It seems to me that if we cannot approach the question from the point of view of the general interests of Canada, then it is absolutely hopeless to fry to arrive at any right conclusion. I propose, therefore, to examine the protective system without any reference to locality or occupation and to ask the question:	Is
it a sound national policy? Were the professions of the Liberal party in times gone by, as stated in their platforms, based on sound principles, or were they not? I hope in that review and criticism of the protective philosophy to establish this point: viz, that the whole protective system has no possible justification from the point of view of right and justice.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


William Charles Good: fact they must argue if they are logical, that the removal of the tariff wall from the western boundary of these two provinces to the eastern boundary was a misfortune. I think it must be evident to all hon. gentlemen that the protectionist reasoning breaks down when you consider that political boundaries are arbitrary and often shift overnight. Indeed, I believe that unhampered trade, if we would but once realize it, pays no more attention to political boundaries than do the birds of the air of the fishes of the sea.
I pass now to consider for a moment tariffs for revenue and tariffs for protection. Historically tariffs originated as means of securing revenue. I do not think there is any doubt about that; and a celebrated Frenchman, once speaking of this particular system, said that it was the best way of "plucking the goose with the least squawking."
It seems to me that the system which was thus described accords with a system of government which has very happily disappeared-a system of government in which the governors by hook or by crook obtained what money they could by any and all kinds of taxation from unwilling subjects. But now under our system of government we are not subjects of a ruler, we are citizens of a country, and if we have the proper point of view we contribute taxes willingly for the public services. And it seems to me that indirect taxes are bad in themselves largely because they are indirect, and that in this respect direct taxes are much better. Indirect taxes, like the tariff tax, the sales tax, and other like taxes, may be evaded, concealed and shifted, and often are, and the results are unfortunate.
Now, turning to tariffs for protection, I very frankly admit that it may seem to be in the public interest to protect certain infant industries for the time being. But I submit that if the collective wisdom of the people decides that any particular industry which has a fair prospect of becoming permanently self-sustaining needs assistance by the state, this assistance should be given directly in the form of a bounty, instead of indirectly by means of a tariff. In order to make my meaning clearer, I submit a base which I think will illustrate the difference between the bounty system and the tariff system from the purely protective point of view. Let it be supposed, for example, that we want to encourage the development of aerial navi-
gation. Would it be a sensible policy to assist the people engaged in that development by granting them a bounty, or by putting a handicap upon all other means of transportation-to put a tax upon the use of our highways, our railways and canals, and in that indirect way assist the infant industry of aerial transportation? It seems to me that when we look at it this way we see that the bounty or direct subsidy, if it be necessary, is in every way to be commended as compared with the indirect system of protection by means of tariffs, because under the bounty system you pay only in proportion as the particular industry which it is desired to develop does develop, and you do not put a handicap upon all other competing industries. I must say in that connection that while the bounties which were given a good many years ago by the government of which the present Minister of Finance was also then Minister of Finance may have been excessive, I do think that the principle then adopted to assist certain industries was the right principle, providing, of course, that assistance was considered necessary or advisable.
However, there is another consideration which I think we ought to bear in mind in connection with the so-called encouragement of infant industries, and that is that as soon as the infants get big they want more encouragement than when they were small. In a word, in practice, the system does not work out according to the theory. I suppose all farmers have observed that in litters of pigs the little runt, instead of getting the best place and the biggest share, is shoved off to one side by the big husky fellows, and he is practically starved to death.


An hon. MEMBER:: The bigger the calf the more milk he takes.


William Charles Good: As one hon. gentleman remarks, the bigger the calf the more milk he takes-and, I think, the more anxious he is to stay on the job and the more fuss he makes when weaning time comes.
Now, Mr. Speaker, when we look back over the history of our protective system,
I think we shall find that these infants as soon as they grow pretty big shove the little fellows to the wall and continue to get the lion's share. So while it may be theoretically defensible to encourage infant industries, either by tariffs or bounties- and I think the bounty system is very much better; in fact, I think the tariff system is

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indefensible-in practice the more encourag-ment they get the more they want. That has been the history of the encouragement of infant industries in this country, and I think it should bid us beware.
But some of the adherents of the protective system claim that we must have "adequate protection" of all Canadian industries. I submit that in the nature of the case this is impossible. You cannot protect local industries-a local newspaper, a local blacksmith, or any other local industry-their field is necessarily restricted, and therefore it is absolutely absurd to talk about protecting those industries. In the second place, you cannot protect those major industries which have a surplus to export, such as our wheat-growing industry in the Canadian West, our cattle industry, or any other of a number of our major industries-these it is impossible to protect. It is absolutely impossible to give adequate protection to all Canadian industries. It does not and cannot work out that way, and we have to recognize the fact that when we once start the system the inevitable result is that the few industries,- the big husky infants, so to speak,-get the lion s share and the (Others necessarily are left with the husks.
The protective system is also advocated as necessary to secure what is called a "favourable balance of trade". Now, if that is a desirable end in view, why should we not carry goods from where they are dear to where they are cheap? In that way we would get a maximum export and a minimum import. Or, better still, let us sink all ships at sea, and then we will have the summum bonum of the protectionist philosophy so far as it applies to international trade. I think the protectionist fails to see that international trade is essentially barter, and that in the long run imports and exports have to balance one another. This is a recognized truth amone economists, and we should not forget it. Of course, there are some modifications when one country pays tribute to another in the form of interest.
In regard to protection against what is called cheap foreign labour, the hon. member for Brome (Mr. McMaster) dealt with that this afternoon, and showed very conclusively I think that so-called cheap labour is not by any means always really cheap labour. The cost of production indeed is dependent not only on wages but on climate, on resources and on the efficiency of labour; and this we must bear in mind.' We should
also bear in mind in that connection the distinction between what we might call real wages and nominal wages.
I submit further, Mr. Speaker, that no matter what the advantages of one country may be over another, international trade is always beneficial, because in some respects one country will have certain relative advantages over its neighbours, and those industries in the one country which have a relative superiority will be able to export their produot to the other country. Let me take an example:	It might be argued thaf
we can manufacture sugar in Canada more cheaply than they can manufacture it in the West Indies, but I submit that even though that be true our advantage over the West Indies in the production of wheat and cattle is so marked that it is a better and more sensible policy for us to use our labour in those industries and buy our sugar from the West Indies, for instance, rather than manufacture it at home.
Now, in regard to retaliatory tariffs, it seems to me that this is something which comes home very strongly to a great many people. It is said that the United States has done us a bad turn; that they have been disagreeable; that they have been unfair, and the sentiment at once is to retaliate. If they will not let us into their market, it is argued, then we should not let them into ours. But I submit that if we take that attitude we are likely to cut off our nose to spite our face. When we look into the matter a little more closely we find that that policy is essentially a mistaken one. Take the case of two men, one specializing1 in the growing of wheat and the other in the growing of potatoes. It is a great advantage for the man who wants the excellent wheat to go to his neighbour and get it, and it is likewise an advantage to the man who wants the excellent potatoes to be able to get them from his neighbour. Suppose the wheat grower went to the other man and, upon endeavouring to sell his wheat to him, was met with refusal what would you think of him if he said: Well, if you will not buy my wheat, I will not buy your potatoes"? He would simply be denying him-self the advantage of getting the good potatoes which the other man was specially qualified to produce. It seems to me that if we eliminate sentiment in this matter and study it on a "common sense basis, we must admit that the policy of retaliatory tariffs is indefensible. The only passible justification I can see for it is that by threatening the other man or the other country you might bring him or



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them to terms. I do not know how far that is possible; I am afraid, however, that the effect would be the opposite.
A good deal has been said about diversified industry. That is another claim which is made for protective tariffs; it is said that protection does secure diversified industries. I think that protectionists make an entirely unwarranted assumption in this regard. I do not think that tariffs are necessary to build up diversified industry in any country. In fact, I deny it abso-. lutely; all history and all common sense point in the other direction. Where you have a country opened up as our Northwest has been opened up in recent years, you will find the primary industries being first developed, and then when the proper time comes you will find, inevitably, the development of the secondary industries taking place. It is impossible for any civilization to develop unless in that particular way. While it may be possible to encourage certain secondary industries by tariff protection and by bounties, it is not necessary to enact tariff walls or adopt a protective system in order to secure diversification of industries.
I would like to submit in that connection also to some of our protectionist
9 p.m. friends in this chamber that at the present time the Canadian manufacturer, who has been crying out for protection for so long, finds his Canadian market practically gone on account of the decadence of agriculture. We heard yesterday from the hon. member for Brantford (Mr. Raymond) how the warehouses of the manufacturers of implements in the city of Brantford are full and the workmen idle. Why are they full? Because the farmers are in such a position at the present time that they cannot buy. I would like to submit to our manufacturing friends that they should turn their eyes a little more definitely to our Canadian market and endeavour to ascertain how the Canadian farmer can be advantaged, how he can be put in a position to buy their implements. I submit also to our protectionist friends that they should consider the possibility of developing an export trade. I cannot understand why the Canadian manufacturers, who are such agitators and propagandists for protective tariffs, do not see that if they are going to develop an export trade as have England, Belgium, Switzerland and the other countries we heard of yesterday and this afternoon, they have to reduce their cost of production in this country. That is the only pos-
[Mr. Good. 3
sible way in which they can compete in a foreign market in manufactured goods.
Personally, I wish our Canadian manufacturers all success and all prosperity; I would like to see Canadian manufacturing developed to a much greater extent than it is at the present time. But I contend that that can be done not by imposing protective duties, not by hampering both the primary and the secondary industries of the country, but by giving the manufacturer free raw material and lower labour costs-and we can give the Canadian manufacturer lower labour costs by making the cost of living lower for the Canadian working man. It seems to me, therefore, that a freer trade policy would be absolutely to the advantage of the Canadian manufacturers, as it has been for the British manufacturers. It would be to the advantage both of agriculture and of the primary and secondary industries.
It is said further that infant industries or small industries cannot establish themselves in the face of competition from the old established and stronger industries. That is the plea constantly made on behalf of certain Canadian industries-that they cannot compete against the larger industries in the United States. If that is true, Mr. Speaker, what of the manufacturing in our own West which is beginning to be established? Are these manufacturers able to establish themselves against the competition of the old established and stronger manufacturing industries in the Canadian East? We have no tariff between the Canadian West and the Canadian East. Would our protectionist friends advocate a tariff between western Canada and eastern Canada in order to protect the manufacturing industries in western Canada? I ask them, frankly and candidly, would they advocate that? It seems to me that if they are true to their own philosophy they must advocate a tariff in order to protect the infant manufacturing industries of western Canada against the older and longer established industries in the East.
I want to submit in this connection that if we study the industrial history of the United States we shall find that as the primary industries developed in the Mississippi valley and westward, the secondary industries followed them up and established themselves through that whole territory in oen competition with the long established manufacturing industries on the Atlantic sea-board. I remember some

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years ago talking to a couple of men from the New England states who were interested in the boot and shoe industry. They told me that in St. Louis the boot and shoe industry had become firmly established in open competition with the very powerful boot and shoe industries in the New England states. Why? Because the market was out there, because the raw material was out there, and because the manufacturers saw the possibilities and the prospect of sure success in that territory. And so it will be everywhere: If we have concern for the development of our primary industries we do not need to worry about our secondary industries. They will follow when needed.
Now, Mr. Speaker, there is another consideration I would like to present to our protectionist friends and it is this: That protective tariffs cannot effectively protect unless they lead to monopoly; and why? Because under free competition all profits tend to a common level. If the profits in any particular business are inordinately large, and free competition is permitted, others will go into that particular line in order to reap those profits, and the only , way in which that can be prevented is by a combination to fix prices. And I submit to all hon. gentlemen here, that if we look back over the history of Canadian manufacturing for the- last thirty years, we shall see that under the cover of tariff protection, and in order to take full advantage of tariff protection, the various industries have merged and amalgamated so as to very effectively destroy competition, for the very simple reason that if competition remained they could not reap the advantages of the tariff. So they have combined, and we have had a tremendous growth in these giant mergers in Canada, as well as m the United States, during the last twenty-five years; we have indeed had monopoly conditions.
I believe, Mr. Speaker, that monopoly conditions are absolutely intolerable to a free people. If we are going to have monopoly it must be public monopoly; private monopoly is absolutely indefensible.
A moment ago I asked the question: Has protection assisted manufacturing? I think I answered that in respect to manufacturing in the United States. I now ask it with respect to Canadian manufacturing: Has protection assisted Canadian manufacturing on the average? I claim it has not, and that it cannot, both as regards the home market for manufactured goods,- 155J
that is the primary industries,-and as regards the export trade, in both cases our Canadian manufacturers stand to gain very greatly by a different policy-of freer trade.
I must hurry on. I have just one more point which I think it is worth while to emphasize in this examination of the protectionist system and it is this: There is, I think, no system that, from the standpoint of public morality, is more absolutely corrupting,-demoralizing and indefensible. I think that any system which opens the door for all and sundry to feed at the public trough, in a disgusting, corrupting scramble for special favours, is indefensible. I have had that admitted to me by protectionists-that there is a tremendous amount of wire pulling, lobbying and efforts to get special favours; and in that connection we find, I think in fact it has been pretty well admitted in Canada, that those concerned in it are people who expect, and have reasonable ground for expecting, that any investment in campaign funds will secure the retention for them of special privileges. It seems to me that there is no in-aictment against the protective system, more crushing, more damnable, than this' particular indictment that I have mentioned -that it has corrupted the public life of this country, and that it must corrupt the public life of any country where that system exists.
There is just one other thought that I would like to add. If the protectionist is driven, as I think he can be, by resistless logic, from one position to another, I have found in my experience that he takes refuge m this final stronghold. He says: National existence, national integrity is to be preserved above all things. National prosperity is of secondary importance; and he goes on to say, that in order to guarantee national ^ existence and national integrity, the nation must build up within itself practically all the industries that are necessary for the pieservation of that nation in time of war and that, no matter at what sacrifice, we must build up a completely diversified industry in the country, so that m time of war we shall be able to have everything that is necessary within our own boundaries: It is the ideal of national, economic self-sufficiency.
That claim, I think, ought to be met. It is fairly stated, and I would like to meet the claim as fairly and honestly as I can. It seems to me tfiat there are two fatal defects about ,that argument
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__an argument which admits that the pro-*
tective system is impoverishing to a country, but which defends it on the ground that it enables a nation, in time of war, to maintain its integrity and existence.
I submit, Mr. Speaker, that there are two fatal defects to that reasoning. In the first place it is not a practicable means of se-uring safety, particularly at the present time. We do not know what may he the methods of warfare in the future. We may strive as best we can, and exercise all the ingenuity of which we are capable; and yet when the next war comes we may find something that we had not thought of and provided for which would be the key to the whole question and would determine our fate for weal or woe. It seems to me, Mr. Speaker, that from that point of view the argument that we can establish national economic self-sufficiency falls down.
In the second place, while it is not a practicable means of securing safety, I do not believe if it were practicable that it would be right, for this reason-that it is not feasible for the smaller countries m any degree whatever. It may be measurably feasible for such countries as the United States, a country with most varied resources of all kinds. A country like the United States can attain, in a measurable degree, national economic self sufficiency. u take countries like Belgium, or Holland or Denmark-particularly Holland-the natural resources are so extremely limited that it is absolutely absurd to talk of economic self sufficiency. To recommend a policy of that sort for a country like Holland or Belgium is absolutely absurd and every one knows it-in fact any attempt by the people of Holland to attain national self sufficiency would be doomed to utter failure. Therefore, it seems to me that as in the Great War we sacrificed blood and treasure in order to protect the existence and integrity of small nations, we are not justified now in defending a policy which, for the small nations-no matter how feasible it may be for the large nations-is absolutely impracticable. I submit, therefore, that in the case of the smaller nations confidence must be reposed in the League of Nations idea, and in international trade.
Now, Mr. Speaker, I am going to ask a question, just in conclusion, and it is this: If the case against protection is so overwhelming why is it not more apparent? Why do we, in spite of the logic of the situation, find such a strong feeling and

sentiment in favour of protection? I think there are	reasons for it.	The first
reason is that we find public opinion and public ideas warped and distorted by powerful selfish interests. In that connection I have a little extract from a book entitled "Democracy after the War" by s very eminent English economist, J. A Hobson. I will read what he says as to why the protective policy continues to receive so much public support, and I hope this will sink into the minds of some of oui protectionists friends. He says:
The explanation lies in the opposition between the interests of certain classes within each nation and the welfare of the nation as a whole, and in the ability of these classes to impose their class interests upon the statecraft of their country. Protection is a bad policy for a nation. It diminishes its total output of wealth, distributes it unfairly, imposes a secret, onerous and wasteful method of taxation, breeds political corruption, establishes monopolies and provokes illwill and quarrels with other nations. But it is a good policy for capitalists in certain well organised industries, who, by their political pressure can frame a tariff that enables them to raise their prices and increase their profits at the expense of the weaker industries, and the consuming Public. A part of the illicit profits which it yields can be applied to maintaining and enforcing the political pull and to spreading a propaganda representing protection as a sound national and imperial policy. The ill-will which tariffs beget in surrounding nations and the reprisals they evoke go to feed the delusion that trade is fundamentally a form of competition, not of co-operation, and that nations are hostile competitors. The diplomatic and sometimes the military conflicts which ensue from tariff wars confirm this delusion. So protection passes from the position of an unscrupulous scheme of class plunder into that of a patriotic public policy. Finally, given favouring circumstances, it can be rivetted upon the state as a political and military necessity. For states which stop the natural courses of trade with neighbours, cripple their development, "steal" their markets, and otherwise inflict economic injuries, live in fear lest the injured interests in these neighbour states may be strong enough to coerce their governments into forcible intervention. Given a group of powerful states, each controlled in its fiscal and its foreign policy by strong business interests, it is easy to perceive that a generally dangerous situation emerges. Each state, considering the possibility of invasion on the part of a foreign power or group of powers, must look not merely to its forcible but to its economic defences. So a national economy of industrial, agricultural and commercial selfsufficiency assumes the guise of a, vital policy, and permanent protection is established as its chief instrument. Under these conditions protection becomes an essential feature of national defence, an economic militarism."
That, Mr. Speaker, is one explanation of why it is that the protective philosophy continues to get so much support. In that connection, I would like to refer to an

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editorial which appeared in the Montreal Witness some time ago, entitled "Where is the Consumer."? I shall not read it, but it says, as the hon. member from Brome (Mr. McMaster) remarked this afternoon, that the consumers are not organized to protect themselves. The producers in this line and that line are organized to protect themselves by exploiting the consumers throughout the whole country, and that is exactly in line with the statement which I have just read from Mr. Hobson. I have here a book which was sent to me some little time ago, published by the Canadian Manufacturers' Association, entitled "The Tariff, why Canada needs It." This is part of the propaganda which these illicit gains give rise to, in order to persuade the Canadian people to maintain this system. I will read one or two sentences out of this book, to show the kind of logic that that association foists upon the Canadian public. On the first page of this book I find the following paragraph :
The objects of a protective system in Canada have been and should continue to be: (1) to diminish, as far as possible, the importation of goods from foreign countries which can be produced at home.
Mark the words "which can be produced at home." Now, we can produce oranges at home, we can produce bananas, and all kinds of tropical fruit. We can grow cotton at home. Would the Canadian Manufacturers' Association advocate that as a sensible national policy? It seems to me the statement is absolutely absurd, and that, in order to make a sensible reasonable statement, we have to insert the word "profitably" and make it read "profitably produced at home." If we insert the word "profitably" I subscribe to the statement, but that opens the whole question as to what industries we can profitably follow and encourage, and what we must leave for other countries to develop, because of their climate and conditions.
The second object, as here defined, reads:
(2)	To facilitate the importation of raw materials which cannot be produced at home.
Now, how, in the face of all that is reasonable and sensible, can the Canadian Manufacturers' Association come before the Canadian public and advocate a tariff to facilitate importation? We all know that, to facilitate importation, all we have to do is to put articles on the free list and admit them as freely as possible, I submit,
therefore, that this object, as stated here, cannot be in any way served by the imposition of tariffs. The third object is:
(3)	To encourage the exportation of Canadian materials as finished products.
We are all desirous of encouraging exportation, but how can we possibly encourage exportation by putting on tariffs and customs duties on imports? In order to facilitate exportation, we have, as I said a few minutes ago, to make manufacturing and production in this country as cheap as possible. If we want our exportation to be large, we must help all the industries in Canada to produce as cheaply and freely as possible, and, in order to do that, we must admit goods freely.
The fourth object, as here defined, reads:
(4)	To make Canada self-contained, by developing and encouraging within her boundaries all legitimate activities that will give occupation to her people.
* I am in accord with that. "All legitimate activities"-that is all right, but how is that accomplished by imposing tariffs? By imposing customs duties we encourage all kinds of illegitimate activities in Canada. We divert labour from activities that are native to the soil, and can be carried on profitably, to industries that are not indigenous, that have to be subsidized, and that can only be carried on at a loss. The fifth object as stated here is:
(5)	To secure revenue.
We all know that the tariff, as a means of securing revenue, has lamentably fallen down. It is true we secure a revenue from the tariff, but there are other ways of securing revenue. As far as protection is concerned, the higher we protect the less goods come in, and the less revenue we get on our imports. If these are the best reasons that the Canadian Manufacturers' Association can advance on behalf of the protective system, it seems to me they had better, as we say, "go back home and sit down."
I am going to ask another question in connection with the protective system in Canada. I have tried to show that it cannot be defended on any kind of national or international ground. The policy seems to me, from the standpoint of economics, to be indefensible. I ask a further question: How has it worked out in Canada? Well, as we all know, Canada is a young country, and a country of illimitable natural resources, and I do not know that there is any country on the face of the earth which to-day offers greater
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opportunities for labour than Canada. We have for years followed a persistent immigration policy, trying to attract into Canada all kinds of people from abroad. How has it worked out? During forty years we have had this protective system in Canada, and I have here an examination of the growth in population during the various decades from 1871 to the present. I am going to give the House a summary of these results; it will not take very long to do so. In the decade from 1871 to 1881, that was before the establishment of the National Policy in 1878, I find that the net loss, after taking into consideration natural increase and immigration, was nil. (I may say that I have these figures from the Bureau of Statistics, and I believe they are substantially accurate.) In the next decade, from 1881 to 1891, I find that the net loss, after taking into consideration natural increase (and immigration, was 559,000. In the next decade, from 1891 to 1901, the net loss was 349,000. In the next decade from 1901 to 1911, the net loss -and these figures are more accurate as we go on, because we have more accurate records-was 703,000, and in the next decade, from 1911 to 1921, the net loss was considerably over 1,000,000. When we take into consideration with that the most deplorable depopulation in our rural districts and the condition of agriculture in Canada, and when we realize that, during the last four decades, under a protective system, there has been a steady draining of people away from this great new country of Canada with all its resources, I think we must realize that that constitutes a moist terrific indictment against the protective policy, because, in this country we cannot hold the people that come here, if they are coming in and going out again, that surely indicates that there is something wrong with conditions. It is not Canada; Canada is all right; it is the laws we have enacted which have made it difficult in this country to develop our natural resources. A little over a year ago there was placed before the Tariff Commission by the educational secretary of the United Farmers of Ontario, a statement in which he summed up the effect of the protective system of Canada in this way:
1.	It has not eliminated the possibility of unemployment.
2.	Protection has failed to maintain a remunerative market for farm produce.
3.	Proteotion has failed to maintain a favourable trade balance.
IMr. Good.]
4.	Most disquieting of all perhaps, the protective tariff has failed to prevent the spirit of unrest.
On the other hand these are some things that the protective system does:
It places the government under the necessity of maintaining a self-contradictory policy.
That is a tariff for revenue and a tariff for proteotion.
Protection affords a shelter behind which incompetent manufacturers and lazy manufacturers can .make a living at the expense of the consumer.
Lastly, the protective tariff directly fosters class organisation and class selfishness.
Therefore, the protective philosophy and the protective system absolutely fall down, I contend, from the standpoint of economics and from the standpoint of actual accomplishment and results in Canada. Prior to the war we had this economic industrial sickness prevalent in Canada, a serious economic condition, due, I submit, to mistaken policies. I think .that sickness was aggravated by the war, because while, during the war, as Sir Thomas White has maintained, the war was largely paid for by extra work and extra sacrifice on the part of the Canadian people, at the same time, we permitted, we even encouraged, war profiteering, and then I think, even worse than that, we permitted many of the profiteers to salt down their unholy gains in Dominion bonds, some of them untaxable. Worse than that, deflation has come, and we find that these Dominion bonds will have to be redeemed with double value, either in service or commodities, by the Canadian people.
It is true that during war time, various expedients were resorted to in order to increase the revenue, because at that time, as all hon. gentlemen will remember, the tariff tax fell lamentably short. Besides that, in some of these expedients, there was a dim perception that those who had enriched themselves by a protective tariff and war profiteering, should shoulder a larger share of the burdens. Some of the expedients that were resorted to in war time were as follows: The excess profits tax, the income tax, the stamp tax, the luxury tax, the sales tax and so on. But with all these expedients we find to-day that the country is steadily going into debt. Industry is paralyzed, the farmers are discouraged and production is stagnant.
Just in connection with one of the various expedients that were adopted during war time, I want to submit a little in-

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formation, which, perhaps, will explain to the House why it is that, in some respects at least, we have not got better results.
I refer to the excess profits tax. Some little time ago, I asked a question which stood upon the Order Paper in this House for a long time. Finally, it was evaded; it was not answered. I may say that this question was based on certain information that I had received privately, and I want now to submit to the House that information without mentioning any names. A certain company in a certain year had a capital stock, according to this statement, as follows: $250,000; reserves, $731,350.20, making a total capital employed of $981,350.20. The gross profit of that company, according to the statement submitted, was, I am told, $1,571,626.17. Deducting from that the income tax

I will not read the figures; I have them here-the decrease in the inventory and the depletion, I find there is left a net profit of $1,423,764.31. According to the act, I am informed that the assessment levied on that company in that particular year should have been $1,111,983.99, made up as follows: 7 per cent of the capital employed, exempt from taxation; 8 per cent, one-quarter taken by the government; 5 per cent, of capital employed, one-half taken by the government and of the balance of profits, which was considerably over $1,000,000, six-sevenths should have come into the federal treasury. The total assessment which, according to this statement, ought to have beeen levied on that particular company, was considerably over $1,000,000. What was the actual assessment by the department?- $214,312.36. In connection with this one company for one year, if these figures are correct, and if there is no good justification for the action which the department has taken, there is an apparent loss to the country of $897,671.63!
There is a situation which I think calls for some inquiry. I submit it to the House because I asked questions based on the information that came to me privately, and I got no answer. I think that if that sort of thing has been happening in Canada and we have not got millions of dollars of excess profits that we were entitled to receive during and since the war, we should know the reason why.
But in spite of all these expedients to which we have resorted, the country has been steadily going into debt. We have been discussing for days now the unfortunate railway situation that Canada finds herself in, the unfortunate condition of agriculture, and the paralysis of the manufacturing industries. There is no industry in this country that has not been deploring its condition; and yet, in the face of all these things, the first budget of a new Government proposes nothing but the same old nostrums. And I say that in all charity. There is not a glimmer even of anything new; there is no promise of relief; there is only the pathetic, tragically blind clinging to the past. Thus it hath been, thus it ever shall be.
I stated at the outset that I was keenly disappointed with the budget, and I am. I should not be so disappointed if there were any inkling in it of anything of a radical nature to which we might look with hope for the future; and it is because I do not see in it anything of a constructive, radical character that holds out some promise of relief in the future that I am going to present to the hon. members of this House something of a different nature which it seems to me does promise very considerable relief. And in order to approach the question in a logical and systematic way, I shall ask, first of all, this question: What is a just system of taxation? To answer that question we must ask another. What is taxation for? Are not taxes contributions by individuals for the purpose of carrying on collective or community undertakings? Are they not payments by the individual to the community in return for services rendered the individual by the community? I think they are; and I hope that that is a fair statement of what taxation is for. For instance, we have in our municipalities, schools, streets, and so forth, which are maintained by taxation; and we have in our Dominion, railways, canals, and other public utilities which are kept up in the same way. From this point of view, let us examine the various kinds of taxes which are levied in Canada. We can classify these taxes under three general heads.
In the first place, we have a tax on consumption, the tariff tax, the sales tax, etc. As has already been abundantly shown in this debate, this tax as levied on the necessaries of life bears hardest on those who are least able to pay, namely, the average man with the large family. I am well aware that the member for one of the Bruces, I think (Mr. Malcolm), said yesterday that the rich man paid in proportion to his riches through the sales tax. I submit, however, that that is not so. This particular tax, especially as it
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applies to the necessaries of life, falls upon the average man with a large family much more heavily than it does upon the rich man. Moreover, it is in no sense proportionate to the services rendered the individual by the community. Let me take an example to show that. Suppose a bachelor to be the owner of a valuable mining property, yielding him, say, a million dollars a year without any effort on his part. Now, I happen to know one man-he is not a bachelor, but I do not think he has any children-who wais very much in that position some years ago. He received an enormous income, although I do not know that he got quite as much as I have suggested. I think, however, that this is a fair supposition. We will suppose that he gets a million dollars a year by reason of his ownership of this valuable property. Now, then, imagine one of his employees working for $3 a day and having to support a family of five. That employee may pay, indeed, will pay, more for the necessaries of life than the rich bachelor who is in receipt of a million dollars a year without any effort on his part. That is about the way the sales tax and the tariff tax work out.
Or take another example. In western Canada the Canadian Pacific Railway has been granted by the Canadian people quiet possession of thousands of square miles of valuable land which is increasing in value by reason of the labour of neighbouring settlers, while those settlers pay heavy customs and sales taxes on all their supplies. I think that is an outrageous, a scandalous state of affairs. So far as the ownership of that property is concerned, the Canadian Pacific Railway pays not one cent of taxation into the federal treasury, while the people who are settled in these districts pay heavy customs and sales taxes on all the commodities they require. I submit, Mr. Speaker, that the tax on consumption is unjust and unwise and should be abolished, perhaps not immediately, but as soon as may be. There is one exception, possibly, which I would make. If it is considered desirable to discourage the use of any commodity, then the customs tax or the sales tax would be justifiable. If we could only agree on what commodities are to be discouraged, then of course we might permit a heavy tax to remain on them. But the difficulty is that we cannot agree on this point; some commodities are felt to be useful to one man while they are a curse to another, 
and we cannot find any common basis for action in regard to most commodities which we call luxuries. There are some, perhaps, like alcoholic beverages, which we would generally agree should be taxed under this system. But even if we could agree that customs duties and sales taxes are proper and wise on such commodities, I am afraid we should not get a very large revenue from taxes of this kind.
The second species of tax I desire to refer to is exemplified in the graduated income and inheritance taxes. The basis of these taxes is the "ability to pay"; but the ability to pay is not always a measure of the privileges, rights, and services conferred upon or rendered to the individual by the community. Perhaps under existing conditions it is largely so, but there are notable exceptions. Take the case of two farmers living side by side on land of equal natural value and equal value so far as location is concerned. One farmer may be diligent, enterprising and thrifty and may do well. He may accumulate quite a competence, build up his farm, and in the course of some years develop a very valuable property. The other man may be lazy, thriftless, and live on the verge of bankruptcy practically all the time. This, I think, must indicate to us that it is not always wise to tax according to ability to pay. In this particular case it is grossly unfair. Both these men nave equal opportunities so far as the community is concerned, though perhaps the poor, ignorant, lazy man might claim that society owed him better care when he was a youngster than to bring him into a condition of that sort. But leaving that aside, I do not think we should penalize thrift and industry, as we are bound to do in a tax based exclusively upon ability to pay. Industry ought to be encouraged; and if we permit idleness to eat the bread of industry, then by and by we are not going to have very much bread in this country.
It seems to me, Mr. Speaker, that this is one of the most important questions which we have to consider in connection with taxation. We must, I believe, devise a system of taxation which does not discourage but which encourages industry. Now, if, as in some of these cases I have mentioned, the idler gets the biggest return, and the worker has to labour hard for a pittance, we are certainly not doing very much to encourage thrift and industry; and I submit that the whole system

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of taxation on consumption and to some extent that according to "ability to pay" has the effect of discouraging thrift and industry and encouraging idleness.
However, while making that statement, I do think that the apportionment of taxation according to ability to pay is largely justified nowadays, because by unjust systems of taxation and by other special privileges we have allowed the idler to confiscate the earnings of the worker. Having permitted the poor to be robbed-and in this connection I recall a rather well-known phrase of the late Sir Wilfrid Laurier, "Protective tariffs are legalized robbery" -having permitted the poor to be robbed, we make a belated and largely futile effort to recover part of the spoils, and, unfortunately, in so doing we incidentally penalize honest industry and thrift. I think it would be better to purify the stream at its source, to stop the iniquity at the beginning.


Mr. RYCKMAN:: If the hon. member will allow me, he has made it abundantly plain that he is altogether opposed to a protective tariff. If in power would he by one stroke sweep away all tariffs, or would he get rid of them gradually?


William Charles Good: Mr. Speaker, I can answer my hon. friend's question definitely and honestly. I would not advocate the sweeping away of all protective duties immediately. I would set about discovering some better system of taxation and introduce that gradually to replace what I regard as a vicious system.
Now, the third system or species of taxation is exemplified, although but imperfectly, in the ordinary property tax. Property in common usage comprises many essentially different things: land, mines, water-powers, buildings, tools, clothing and everything else to which exclusive legal right is given the individual by the state. But of these various kinds of property there are two main classes: first, those kinds of property which are not the product of labour, such as unimproved farm land, mineral resources, water-powers, site values, etc.; and, secondly, those kinds of property which are the product of labour such as wheat, houses, clothing, tools, etc. The first class is designated in the platform of the Progressive party as "unimproved land values, including all natural resources;" and the broad and vital distinction between the two classes of property can be well summed up in the terms, "land values" and "labour values"; and
the Farmers' platform, as is well known, advocates the taxation of land values.
Now, Mr. Speaker, I submit that there is no juster or more accurate measure of the rights, privileges and services conferred upon the individual by the state than the land values to which he has legal title under our existing laws, for the ground rent of such land values is the measure thereof. This ground rent is the annual value of the rights, privileges and services conferred upon the individual by the state, because it can be enjoyed without personal effort on the part of the individual. Therefore the Progressive party advocates the taxation of land values for federal purposes, as they are now partly taxed for municipal and provincial purposes. I submit that the taxation of land values is based upon equity and justice, and, moreover, will have the incalculable advantage of stimulating instead of restricting and curtailing production.
We have been debating for many days how we are going to increase production in order to pay our enormous national debt and solve our railway problem. There is nothing more necessary in Canada from a material point of view than increased production. If we can solve that problem then we can solve our national debt and railway problems. Now, taxes on consumption, tariff and sales taxes, inevitably tend to curtail and discourage production; but taxation of land values has the opposite effect because it tends to force all natural resources to be used. To the prospective farmer it makes land cheaper, and thus decreases his cost of production. The substitution of the taxation of land values for the tariff and sales taxes, at least so far as necessaries are concerned, will reduce to the farmer both the cost of land and also the cost of supplies, and thus stimulate production. It will increase the average ability to pay, for all taxes come out of the wealth produced by those who labour, and anything which assists production to that extent increases the fund from which taxes come.
I do not think there is anything that we can turn our attention to of greater importance at the present time than this means of increasing production. And while the initial effect of this species of taxation would be to give every possible encouragement to the user of agricultural and other natural resources, it would have the secondary effect of increasing the value of these resources, and therefore increasing
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the revenue which we derive by taxing them.
So far as our farmers are concerned, I made a calculation a few years ago as to the effect which the change resulting from substituting the taxation of land values in Ontario for the tariff tax would have on the farmers of that province, and I found that they would pay only one-tenth as much under the system of taxation of land values as they have been paying under the tariff system. That surely would be an immense inducement to farmers to speed up production. It would, I submit, assist very materially in the development of the most important of our primary industries.
In that connection I wish to point out again what has been pointed out so many times in the past, that the taxation of land values is not the taxation of land acreage or area. I think that those who go into the matter closely will find that in our agricultural districts unimproved land values are very, very small, and that this particular kind of taxation will be very easy on farmers. However, I do not think the farmer would be justified in supporting it on that ground-not at all, but on the ground that it is a system of taxation which is absolutely fair and just to all industries, and which is based upon the principle that taxation ought to be in proportion to the service rendered by the community to the individual.
In conclusion, Mr. Speaker, I submit this question: Is the taxation of land values feasible, and what can we expect to get from it? Well, we have it to some extent municipally at the present time. We have in our municipalities all the machinery for assessing and collecting it so far as municipal values are concerned. We have it provincially in respect to the western surtaxes on vacant land, and we had it in Ontario in a measure during the war, when a limited amount of taxation was imposed by the province upon real estate for war purposes. We have it exemplified at the present time most completely by the Toronto Harbour Commission which has control of the " made land " along the Toronto waterfront. I understand that all that land is to be leased on short term leases and never sold. That policy which the Toronto Harbour Commissioners have adopted is almost a complete realization of the taxation of land values. Personally I am very glad indeed to see such an apparently successful and commendable example of this particular kind of taxation in the

municipal field. We have also in the Australasian countries-New Zealand and Australia-I have some particulars here, but I will not submit them to the House- we have a record of the taxation of land values for their federal purposes. Now, in regard to the taxation of land values for federal purposes, I am going to suggest to the hon. Minister of Finance that so far as municipalities are concerned, the machinery for assessment and collection is all there; no new machinery needs to be created; there is little added expense in utilizing the machinery already in existence. So far as the larger corporations and values are concerned which are not within	any	particular munici-10 p.m.	pality,	we	have already theincome	tax	machinery whichcan	be	employed	in	that connection. I
submit that we may very well begin to adopt a policy in that direction in the very near future-at once, even, and with pactically no expense for the creation of new machinery.
Now, what revenue can we expect this tax to give us? I made some calculations a few years ago regarding the unimproved land values in Canada, and while there was a good deal of guesswork about it, the conclusion I came to was that, roughly a one per cent tax on the unimproved land values of Canada would give us a revenue of $80,000,000. Now, that certainly is worth while, and if we begin in that little way, pretty soon, I think, we would find our financial burden very much lessened. I repeat the answer which I gave to the hon. member for East Toronto (Mr. Ryckman); I would not suggest any very drastic and sudden changes in our methods of taxation, but I would suggest the immediate beginning of something that is likely to become permanently valuable for this country. I see no difficulty about adopting this plan at once, assessing and collecting through our municipal machinery those values that lie within the municipalities, and assessing and collecting the tax on the other values through our income tax machinery. I submit that suggestion to the Minister of Finance, with every emphasis which I can possibly place upon it.
There are only two other suggestions, Mr. Speaker, which I wish very briefly to place before the Minister of Finance in regard to our whole financial situation. The first is this: that we might adjust

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federal taxation and public works to prevent inflation and deflation. It is generally admitted that these booms and depressions occur in cycles and that during a period of inflation there is what you might call intoxication of industry. Prices go up; everybody thinks that prices are going to get better, and we have a period of inflation. Then the crest of the wave is reached, and we have a sudden drop- a slump. People get discouraged; we have paralysis of industry. We have such a situation now existing in Canada, aggravated of course, as it is at present, by the European situation. But, Mr. Speaker, it seems to me that if the federal government were to levy heavier taxation during a period of inflation and withdraw money from circulation-not put it in the banks where it will go back again to stimulate industry; industry does not need stimulation at those times; it needs checking-. if such money as is not needed for the requirements of the time can be withdrawn from circulation and set aside for use in a period of deflation, we would have a sort of automatic control over the rising and falling of prices. When the period of deflation begins to come and men are thrown out of employment, we would have our public works to fall back upon.- works which had been held in suspension, so to speak. In that way a great deal of the distress which now prevails could be avoided. It seems to me this is entirely in line with the policy that any sensible farmer would follow. In a period of active demand for his crops, he would concentrate his energies upon raising crops to supply the demand, and then in a period of depression, having set aside some money for duller times, he would use the money and use his labour for the carrying on of certain improvements which he had delayed. If we could adopt a policy like that in our federal taxation we could in many ways prevent these recurring periods of depression-not, perhaps, entirely prevent them, but assist in controlling the situation, assist in preventing the serious evils that have arisen in that connection and which exist at the present time.
Just in conclusion, I want to suggest to the House that the whole question of the control of credit, which forms the subject of a resolution that was presented here some time ago, is a matter which should be studied very seriously by the Government in connection with our financial situation, and particularly in connection with the Bank Act, which is to be revised next year.
Now, Mr. Speaker, I have perhaps taken more time than I had intended to occupy in presenting these views to the House, but I feel that I am justified, because these views have not, so far as I know, yet been presented to the House. They deal with part of the farmers' platform -the taxation of land values as a permanent policy of taxation. I submit that we should get away as soon as possible from the onerous and unfair methods of taxation which we have been following in the past and try to devise and adopt and apply a righteous system which will inevitably result in increasing the prosperity of this country.
Hon. THOS. A. LOW (South Renfrew) : Mr. Speaker, at this late hour I do not propose to occupy the time of this House at great length. But before I proceed I should like to extend to the Minister of Finance (Mr. Fielding) my most hearty congratulations upon his being spared to present his sixteenth budget. I know of no man in the public life of this country who enjoys the confidence of the people to a greater degree than the hon. Minister of Finance.
It occurs to me, Mr. Speaker, that the budget is very much like the financial statement of a great corporation as presented by its president. From that point of view I venture to make a few remarks to-night. While I have enjoyed the oratory of my hon. friend from Brant (Mr. Good) he will pardon me if I do not attempt to follow his remarks. The only thing I can say is that I thank Providence for having placed and kept men with the tariff views that my hon. friend entertains in the minority.
It will be generally admitted, Mr. Speaker, that when the present Government assumed office it was confronted with very serious problems, such as falling revenues and increasing expenditures, general business depression, and increasing unemployment. That the Government has met the situation in a fearless manner and has accomplished much will be admitted by the average citizen of Canada who is not unduly biased. I am sure that the action of the ministers of the various departments in their endeavour to reduce the expenditures of this country will commend itself to the people, as will also the statement made by the Minister of Finance that he intends to keep the
The Budget*-Mr. Low

expenditures within the revenue. The introduction by the Minister of Finance of new taxes that will bear as lightly as possible on the plain people of Canada will, I am sure, meet with general approval.
We all know that the tariff question has been the football of all political parties for the last fifty years. There are those who would abolish the tariff altogether as a cure for all our national ills. I want to say, Mr. Speaker, that I do not agree with that view, and that I do not think the farmers, of the province of Ontario at least, entertain any such opinion. I come from a constituency which is at least 60 per cent rural, and I want to tell hon. gentlemen that I received in the rural sections of that constituency almost as many votes as did the farmer candidate. Not because I told them that I would help them to escape the payment of a few dollars on agricultural implements. No; but because I told them that from my place on the floor of this chamber, and at all times, I would endeavour to secure for the farmers of this country better markets for the products they had to sell.
Now, Sir, in the province of Ontario I believe that the farmers, just the same as the urban portion of the population, if left to themselves would appreciate the value of a tariff. Why? Because they know that the best market they have is the home market; and I cannot understand how men argue from an opposite standpoint. Take a glance at the statistics for the year 1921, and what do we find? That the value of the total products of Canadian farms amounted to $1,396,233,000. After listening to the various speakers on the Progressive side you would imagine that the farmers received no benefit from the home market; that the market for their products was largely the export market. But what do we find? That in the same year, 1921, the total of farm products exported from this country amounted to $388,237,000. What does that mean? It means that the people of this country consumed 73 per cent of the products of every description produced on the farms of Canada, and that only 27 per cent was exported. I ask any fair minded member of this House if he would do anything to jeopardize the market that consumes 73 per cent of what the farmers produce.
We hear a great deal about the agricultural implement industry, and one would think from the arguments advanced that if the duty were completely removed from agricultural implements the farmers of this

country would be greatly benefited. But I find on referring to departmental records that the farmers in the Dominion of Canada purchased agricultural implements to the value of $51,637,441. Now admitting for the sake of argument that the manufacturers take advantage of the full benefit of the duty-which I do not admit-what would that mean to the individual Canadian farmer? According to last available figures there were 714,646 citizens engaged in farming. It would represent a per capita payment of $9.04. Yet some men tell us that the tariff is a great burden to the farmers, and that for the sake of saving $9.04 per capita they would wipe out one of the largest industries of our country, an industry that in the city of Toronto gives a living to at least one-twentieth of its entire population. Surely, if the farmers themselves had to vote on the question of killing an industry of that size they would hesitate about doing it. My opinion is that if the facts were plainly placed before them, they would stand by a policy that will build up the national industries of Canada, because they know that the better the home market is the more advantageous it is for our agriculturists.
I promised my constituents that if elected I would urge upon the Government of the day that negotiations be opened up with any country that would give us better markets for our agricultural products, and I am glad that I did not have to wait very long after coming to Ottawa to see that idea carried out. I found the Minister of Finance ready and willing to go to Washington to negotiate, if possible, a treaty that would be solely in the interests of the farmers of this Dominion. In 1911, although a manufacturer, I stood upon the floor of Parliament and urged the adoption of the Reciprocity Pact. Why? Because I believed then, as I believe now, that it wouldl not hurt the manufacturer, but that it would be a great benefit to the Canadian farmer, and that is the reason why the farmers in my riding supported me so strongly in the last election. They knew if anything came up in this House that would be to their benefit I would not fail them. ,
We have many serious problems, and one perhaps more serious than any other is that of our great railway system, with its 22,000 miles, with its annual deficit and the effect that has upon the whole country. Trade cherishes the railway as its best customer, buying thousands of tons of coal annually, using the steel and iron of many

The Budget-Mr. Low
mills, and the products of our vast forests, and giving employment to 185,000 men, providing a living for, at least, 900,000 of our population, and I am sure that anything that would affect our railways would affect the country. When the railways are depressed, the whole business of the country is depressed. Anything that will be for the benefit of our railways will be for the benefit of our country as a whole, as the deficits of the railways are paid by the people of this country.
Every proposed law that comes before this House should be scrutinized, because, after all, any blunders that are made are, in the last analysis, paid for by the people of the country. It is a strange coincidence that just 50 years ago the United States were passing through the same experience, and had the same problem to contend with that we have to-day. In the year 1872 President Grant, in his message to ongress, recommended that a select committee be appointed to investigate freight rates between the west and the east. The farmers of the western states at that time were groaning under the same burden that the farmers of the Canadian West are groaning under to-day, and, as a result of that investigation made by Congress, rates were reduced. I will read what history records 50 years ago.
The lower rates conceded to shippers induced an increase in the general volume of traffic. The farmers prospered beoause rates were reduced and the shareholders and the railway companies, who had not prospered hitherto themselves, realized that it was business and not high rates that they required in order to make money on their investments.
In that same year the commission reported, and one paragraph from the report reads as follows:
The cry of despair which comes from the overburdened west; the demand for cheaper food heard from the labouring classes of the east and from the plantations of the south, and the rapid falling off of our principal articles of export all indicate the imperative necessity for cheaper means of national transportation.
Now, Mr. Speaker, what the West needs to-day is cheaper freight rates. The importance of the railways to the West, I am sure, will be admitted by everybody, and it seems to me that they should have the lowest possible freight rates. What the seas are to England the railways are to our Canadian West. Without the railways the West would be in as bad a condition as England would be without the seas. The great problem in connection with our railways is, by what means shall cheap
and ample facilities be provided for the interchange of commodities between the different sections of our widely extended country? Everybody knows that the interior growth of any country is due to the railways. The demand of the people of the West to-day is for adequate and cheap transportation. We heard the Minister of Railways (Mr. Kennedy), when he addressed the House sometime ago, outline his proposals and, I think, if we are to succeed with our railways, it can only be done by giving the minister a free hand and a fair opportunity to operate those railways upon business principles and business methods. Sectional interests must igiive way to the larger interests of all the people. Increased business with the railways will reduce the deficits as well as lower the rates of the railway. As members from Ontario, we are deeply interested in railways, because, after all, the lion's share of the deficit will fall upon the provinces of Ontario and Quebec. We have heard many speakers, but after all, unless some constructive policy is suggested and adopted we will not accomplish anything. I believe that, if we are to wipe out our railway deficit, it can be done in one way and in one way only, and that is by increased population-an increased number of settlers upon the land.
I will endeavour to present to the House what, in my opinion, is the solution of some of our national ills and financial burdens. It has been said by eminent railway authorities that every settler placed upon the land is worth $746 annually to the railways. If that be the case, the first thing the Government should do is to inaugurate a progressive immigration policy. No doubt there is a certain class of immigrants we do not wish to see coming into the country, but there are people we would welcome. We should first make an attempt to reclaim many of the Canadian citizens who have gone to United States. How are we going to accomplish anything in the way ot immigration? We have 19 immigration agencies in the cities of the States and twelve agencies in the United Kingdom. I think the Minister of Immigration (Mr. Stewart) should waken up these agencies, rouse them, and treat them in the same way as a business man would treat one of his agencies. If a business man finds that a manager in his office in a foreign country is not doing any business, he wants to know the reason, and, if the business is not forthcoming, he will quickly make a
The Budget-Mr. Low

change. I believe that if every one of these thirty-one agencies was alive to the requirements of the country, we would see an influx of immigration that we have never had before.
We would like to see as many settlers from the United States as possible. They are very much like ourselves, and 1 believe they would settle our lands and make first-class citizens of this country. I believe an immigration policy should be put in effect in England that would induce as many as possible to come to this country. There is, in England, a class of people who, I believe, are available and possibly could be induced to come to this country, a class of educated, trained agriculturist families. English periodicals tell us that many of these families which, before the war, had sufficient incomes to maintain themselves in considerable affluence, find the inroads of the war and the pressing burden of taxation so great that they are unable to maintain their former standard of living and their financial position, and the capital realized from the sale of their lands and the income which is still theirs would enable members of this group to exist in a comfortable condition in this country. A determined and special campaign directed towards this group would result in bringing to Canada large numbers of permanent settlers of a most desirable type. In England and Scotland there are many young farmers who, by personal service during the war, have saved up sufficient means to purchase small land holdings. Many of these men have been agriculturists, gardeners, country merchants while their wives and sisters have been brought up in the country and in country villages and are accustomed to rural life. They, to my mind, would make most desirable settlers.
In Scandinavian countries, there is also a class of people who will make most desirable citizens, and I would refer more particularly in this category to Norwegians, Swedes, Danes and Icelanders. More Swedish farmers came to Canada from the United States than came from Sweden. The population of Sweden is not very large, but history tells us that those who have emigrated to the United States have made excellent citizens. According to the records, 43 per cent of those who emigrated to the United States have remained and are to-day on the land. Of eleven groups investigated, the Swedes committed fewer crimes than almost any other nationality. The Norwegians, like
fMr. Low.]
the other Scandinavian races, are a hardy adventurous race, and they become naturalized citizens very quickly. They have sent to the United States more people than almost any other nation except the Irish, and there are nearly one-half as many Norwegians in the United States as there t are in Norway. We might very properly turn our attention to this class of immigration. An investigation of Norwegians in the United States revealed the fact that 63 per cent of them were engaged in agriculture, and I am sure that what we require in the settler coming into this country is that he will settle upon the land. More than one-third of the Norwegian farmers in the United States are settled in Minnesota, one-fifth in Wisconsin, and the production of those two states in wheat and other farm products, as well as the general development, speak well for the type of settlers and citizens they make. I might go on at some length; but I believe if a businesslike immigration policy is introduced in this country, it will do more to relieve the deficits of our railways than any other method that we can adopt.
I am not going to detain the House longer; I merely wish to -say, in conclusion, that we have a great country; but we can only keep it great provided all our people are united and contented. That, Mr. Speaker, above all else, should be the guiding star and the aim of every .administration, so that every shade of thought is duly considered in the framing of policies and in the carrying out of those policies. Liberal administrations have adhered to those principles in the past; and if the present Liberal Government lives up to the traditions of the great Liberal party, we may look forward to the dawn of a new era of prosperity, contentment and happiness.


Mr. WILLIAM BLACK (South Huron):: Mr. Speaker-


Mr. WILLIAM IRVINE (East Calgary) :: Mr. Speaker, I beg to move the adjournment of the debate.


William Black: Mr Speaker-


William Irvine: Mr. Speaker, whom do you recognize?


The ACTING SPEAKER (Mr. Marcil):: The hon. member for South Huron has the floor.


William Black: Mr. Speaker, as this is the first time I have

The Budget-Mr. IV. Black
spoken, I have a considerable feeling of diffidence in the presence of the many old parliamentarians whom I see around me and who have been in this House for so long a time. I must at the outset confess that I have been rather disappointed in the budget that has been brought down by the Minister of Finance (Mr. Fielding). In the election of 1921, the Liberals, when they came out to oppose us, told us that the two parties were practically the same, but I differ greatly with that statement as I take my stand in the House. Last fall at Calgary the Prime Minister (Mr. Mackenzie King) delivered an address in which he spoke about the downward revision of the tariff and also a complete elimination of those duties which we have had for many years; but there is surely something radically wrong when we compare those statements with what we find in the budget that has been brought down by the Minister of Finance. This reminds me of an address that the ex-President of the United States made about a year ago, when he stated that he had never seen a minister of finance deliver a budget speech without a joker at the end of it. Had farm implements been left as they were instead of a reduction of 2i per cent being made in the duty and then there being added, as it were, as the ex-President of the United States said, two or three jokers, I would have been quite well satisfied, especially if my hon. friend had put an excise tax on all those articles that are manufactured in this country.
The minister speaks as though it were a difficult undertaking to raise the revenue. Our good friends to our right almost declare that unless there is high protection, you cannot manufacture goods in this country. If they want high protection, I would advocate the imposition of an excise tax, and then some of the money will go into the treasury of this country instead of all going into the pockets of the manufacturers.
Let us consider some of these manufactured goods. In the first place, I think we could easily reduce the duty on boots and shoes by one-half. And let me say right here that the boots and shoes that have been manufactured in Canada during the past six or eight years have been .hardly fit for any man or woman to wear. I have known instances where children's boots, costing between $3 or $4 per pair, coming out of the factories here, have gone to pieces after three weeks of wear. The manufacturers of these particular articles should, I think, use more brains and better
material in making them, because the class of goods they turn out at present is certainly not a credit to them. As one hon. gentleman near me suggests, they should put more leather and less paper in them, and there is a good deal of truth in that. In the year 1921, there were imported into this country over $2,000,000 worth of boots and shoes, while the exports totalled over $1,500,000. Of these exports some $354,000 worth went across the border. Now, if these manufacturers can compete with the American manufacturers, sending this quantity of boots into the United States, I think they should certainly be able to meet the competition of the boots exported from the United States into Canada. The exports of boots and shoes from Canada to Great Britain in the same period amounted to $904,000.
I think the Minister of Finance should have given more consideration to the question of building materials and agricultural implements. I have been informed on good authority, and the fact was mentioned in the House yesterday, that the manufacturers' warehouses are filled to the roofs with farm implements, and I understand that the same thing is true in regard to other manufactured goods that are used in building in this country. If these gentlemen would only lower their prices, as the farmers have done, this Dominion to-day would not be in the condition which is so generally deplored, and there would not be so many men walking the streets, because people would be able to buy and money would be in circulation. I know that the common talk in my part of the country is this: "We will not buy implements until these men decide to bring down their prices". That is the attitude of the people in western Ontario, and I for one do not blame them. If these men keep their manufactured products in the warehouses in the hope of being able to sell them at exorbitant prices, where are the farmers going to stand?
There is a further consideration in regard to the manufacturers in Canada. They are given a rebate on the duty they pay on raw material entering into the manufacture of goods which they ship out of the country. I contend that this is unreasonable, because I think that they can compete with the manufacturers across the line, or with those of any other country.
There is a good deal of talk about the want of population in Canada, but I do not see how we can hope to increase our
The Budget-Mr. W. Black

papulation or retain the people we have already, unless we can improve conditions and make the country more attractive to intending immigrants. In the last decade, taking the natural increase with the immigration that came into the country, our population ought to have been 11,000,000, and it is quite obvious that conditions in Canada could not have been such as to appeal to the people who left. When the hon. member who spoke a few moments ago (Mr. Low) said that 73 per cent of the produce of this country was consumed in Canada, I was almost staggered. That may be true, and I am not going to doubt the hon. gentleman's word but I can hardly credit the fact.
I do not want to take up much time, but I desire briefly to refer to the railway situation. Let me tell the Minister of Railways (Mr. Kennedy) at once that as a good Canadian I believe that the National Railways can be operated and made to pay inside of three years, provided the right men are placed at the head of the system. I might as well express the opinion here as in the back concessions of my constituency, and I will tell the minister that the sooner he changes the management of the railways the better it will be for them. He must begin a vigorous use of the pruning knife, and most of all he must have at the head of the railways a man in whom the people can -have the fullest confidence. No one has any faith in the man who is to-day at the head of the railways. That is the common view all over the western part of Ontario, and the sooner the minister gets a young man with a broad vision, who has his name to make, and places him in charge, the sooner will the National Railways be made to pay for themselves.
I might go on to speak of the merchant marine, but as the time is short I shall not do so. I should like, however, to say a word or two about the Civil Service. I think the service is over-manned, and I was about to suggest that it could be reduced by one-third. At all events, I do not think there is any doubt about the fact that it could be curtailed to advantage. But if I mistake not, there will be as many civil servants in Ottawa at the end of this year as at the beginning. In my opinion the civil servants could be reduced by thousands, and I would ask the Government seriously to get down to business in that direction and see that the service is cut down where-ever there is over-manning. Any minister, if he goes through his own department, can, I believe, find instances of this.

There is one other matter I shall refer to before concluding; but in passing I might suggest that a good deal of time has been wasted during the past week in this debate. I think that the man who talks for over half an hour, apart from the leaders of the parties and their lieutenants, is taking up too much time. However, to proceed. Our hon. friend the Minister of Finance visited Washington some time ago, and we often hear it said -that he might as well have stayed at home. Now, I do not agree with that, for I believe in dealing with our first cousins across the line, if I might so describe them. The United States is our best market and probably always will be. Just to spend a few moments on the question of our trade relations with that country, I might refer to the reciprocity treaty of 1854. Under that treaty Canada's exports to the United States increased from $10,750,000 in 1854, to almost $38,000,000 in 1866. Twenty years later, in 1886, our exports to the United States were only $34,000,000. Our exports nearly quadrupled in twelve years of reciprocity. In twenty years, when comparatively mild tariff restrictions existed, they declined by $3,500,000. Later on, when real restrictions began with the McKinley tariff, the effect was more injurious and was felt by the farmers of Canada with particular force. In 1888 Canada's export of animals and their products to the United States amounted to $7,500,000. In the fiscal year of 1893, when the McKinley tariff had made its full effect felt, they were down to less than $4,000,000. In the same period our exports of other products of agriculture shrank from $10,000,000 to $4,000,000. About that time occurred the darkest period in the whole agricultural history of Canada. Potatoes were sold on the Toronto market at 20 cents and 25 cents per bag, while good cattle in the country sold for from $12 to $15 per head. The only wonder was that farmers were able to exist at all. A great many of them left their farms, and a great deal of the best blood of rural Ontario emigrated to the United States during the dark days of the early nineties.
The first relief came in 1897, not with any easing up of the American tariff but merely as a result of the removal of quarantine regulations. About the year 1891 there had been a ninety-day quarantine against cattle moving either way across the border. Hon. Mr. Fisher, when he became federal Minister of Agriculture, se-

The Budget-Mr. Lovie
cured the removal of that obstruction, and as a direct result, although the American tariff still remained, our exports of cattle across the border jumped from 1,646 head in 1896 to 90,000 head two years later. The effect was immediate, prices beginning at once to advance with the removal of the quarantine. And still we hear people saying that the market across the line will hold up our own market here. Well, our own market is good enough, but still we have a surplus to export, and the American market is the best market we have.
The real boom came, however, in 1913, when some agricultural products were placed on the United States free list, and duties in all lines were greatly reduced. As a result our exports of cattle alone to the United States during the seven years from 1914 to 1920, inclusive, averaged 260,000 head per year, as against 28,000 head in 1913. Our exports of all animals and the products of animals advanced from less than $13,000,000 in 1913 to $113,000,000 in 1920. Our exports of other agricultural products went up from $27,000,000 to $52,000,000 at the same time, our fisheries advanced from $5,750,000 to $18,500,000, and our forest products from less than $30,000,000 to $71,000,000. All told, there was an increase in our exports to the United States in all lines in eight years from less than $140,000,000 to $464,000,0000. If any stronger argument is required as to the value of the American market for Canadian producers, Mr. Speaker, I should like our good friends to the right of us to let us know about it.
The last American tariff went into force on the 28th May, 1921. In the first six months after that tariff was introduced our exports of wool to the United States amounted to only $13,560, as compared with nearly $1,000,000 for the same period in the previous year. Our export of potatoes was only $447,000 in the firsit six months after the new tariff came into force, as compared with $2,000,000 in the same period of 1920. , Milk exports were less than $200,000 during 1921, while they were $1,295,000 in the previous year; our sheep exports were $421,000 as against $1,500,000; our cattle $2,369,000 compared with $17,000,000.
Now, Mr. Speaker, I am entirely in accord with the sentiments of the last speaker (Mr. Low) in regard to immigration. I believe our own Canadian boys are worth two or three of any class of immigrants that we can bring in. I think the Minister
of Immigration would do well to try and get as many as possible of our Canadian men to come back from the States, instead of encouraging too many immigrants from the Old Land. We need immigration to solve our railway problem, but at the present time I am strongly against spending so much money to bring in immigrants until we are able to hold the people we have here.


Mr. LOVIE (rising):: 


William Irvine: I move the adjournment of the debate, Mr. Speaker.


Mr. FIELDING:: I hope my hon. friend will not press his motion. The debate is dragging out a little, and I think we all desire an early prorogation. Therefore we might sit a little later than the usual hour. If my hon. friend desires to speak now, he should have priority.


William Irvine: I will not press my motion to adjourn the debate now, Mr. Speaker, if I may have the opportunity to move its adjournment after the conclusion of the next speech. Will my hon. friend grant me that?


William Stevens Fielding: I understand the hon. member for Calgary does not press his motion, so it is open for any other member to speak.


William James Lovie: Mr. Speaker, In rising to take part in this debate, I wish, along with those who have already spoken, to extend to the hon. Finance Minister (Mr. Fielding) congratulations upon his sixteenth budget speech in the Canadian Parliament. It is a unique record for a finance minister in any country, and one which it is very hard to duplicate. I give the hon. minister credit for all the reductions he has made upon foodstuffs and agricultural implements, but I would say that in my humble opinion, and looking at the proposition from the viewpoint of a western farmer, these reductions do not begin to go far enough to remove the handicaps under which agriculture, the basic industry of Canada, is suffering and has been suffering for the past forty years, ever since the inauguration of the national policy.
Of course we know that revenue has to be raised, and that it is the finance minister's first duty to provide money to run the affairs of the country, but a tariff that will impose handicaps upon the principal industry of the country is, in my judgment, not the best sort of encouragement to hand out to that industry, and expect it to be prosperous and develop and show life. The farmer is in the unique position of having

The Budget-Mr. Lovie

to pay whatever tax is imposed upon him as there is no one to whom he can transfer it. A manufacturer passes on the tariff tax he has paid to the wholesaler, who in turn passes the same with a profit to the retailer, who also in turn adds the whole thing together, and the consumer-the farmer- pays it. It ends there as there is no one he can pass the tax on to.
Were a customs tariff framed with the avowed object of raising revenue-suppose nothing else were in the finance minister's mind-then all the money collected under that tariff would go into the Dominion treasury and be available to pay the expenses of the country. But such is not the case. Under a protective tariff as we have had it in Canada, the Canadian manufacturer pockets the amount of customs duties and as the farmer has to pay them he is to that extent less able to pay into the national finances. Customs taxes place money in the federal treasury only when they are paid to the customs house officers at the regular ports of entry. But, Mr. Speaker, I contend it is not fair that anyone should be entitled, whether he be manufacturer or agriculturist, to put money into his pocket that really should belong either to the consumer or to the Dominion treasury.
A protective tariff was first inaugurated in Canada forty years ago to boost the manufacturing interests, and boost them it certainly did, until they were top-heavy. It made them act not as though they were giving service to the country as a whole, but as if they were the whole country. In the natural and successful development of a country the logical idea would be first to find the principal industry of that country, what the country was best adapted to, and then develop that industry. It is conceded by all that agriculture is the basic industry of Canada, and that being the case, it needs encouragement. So far in the history of Canada it has not had encouragement; it has really been poverty stricken. Let anyone examine the wage schedules of any competing agency for workingmen, whether in the case of manufacturers, the railways, the professions-in fact, any concern that employs men, and invariably you will find these firms offering larger remuneration than the farmer can afford to pay; consequently, the best men leave the farms.
Were manufactures to be developed as a secondary industry with a view 11 p.m. to supplying the needs of the consumers at a reasonable cost

and to selling the balance of their output in the open markets of the world, things would be different. But what is the state of affairs to-day? We find that implements are sold to the Canadian farmer by the Canadian manufacturer at a profit on the cost of production and then the customs duty added to that, while at the same time the Canadian manufacturer goes to other countries and sells that same machine far cheaper than he sells it to his home consumer. In proof of this I will give you a concrete example.
As the conditions of agriculture in the three prairie provinces correspond in a large measure with the conditions in the states to the south just across the international boundary as far as soil and climate are concerned, we in western Canada claim that to put the farming industry of Canada on an equal footing with the industry just across the boundary, and so enable us to keep the native born Canadian at home-and also to keep the immigrant who comes to our shores to develop agriculture in Canada, and incidentally to make a home and a competence for himself-we need to get our agricultural implements as cheaply as possible.
It was generally conceded at the last general election, and is just as necessary now as then-more so, in fact, because at election time these were only suggestions; now they are far more than that-that five things were absolutely necessary, to lift agriculture out of the mud and mire in which it had found itself placed, and set it upon a higher plane. These were: Reduc-ion in the tariff; reduction in freight rates; cheap agricultural implements; wider markets; a better system of marketing our wheat.
Reduction in the customs tariff I have already spoken about. The pre-war period was not a prosperous time for agriculture. Agriculture was not on a par with other industries, and consequently languished. There are ir. western Canada millions of acres of as fertile soil as ever the sun shone upon, waiting for men and women to work and develop it, but at present no one who is not already engaged in farming will undertake such a proposition. Conditions have been worse for the farmer at this period of depression than at any other period, because the purchasing power of the dollar has been very low. The price of wheat went down as much in one year after the last war as it did in six years after the American civil war, and went down further. Mr. John Bracken, presi-

The Budget-Mr. Lovie
dent of the Manitoba Agricultural College, at the convention of agricultural societies held in Winnipeg in January of this year, stated that the American government had set aside one thousand million dollars to assist in financing farming operations in their country in 1922, and that their farmers had advantages which ours did not enjoy.
As rigid economy must be practised in handling the finances of the country, I would suggest to the Minister of Finance that he let the agricultural implements of the country carry as light a load of taxation as possible so as to give encouragement to the industry of agriculture, because if it is prosperous, all others will be prosperous in turn. Business men by the dozen said to me last fall, "The farmers are good spenders. If they have money, I will have money too, but if they have no money there is none for me and as they get theirs from the soil there is no one they can fall back upon." I am talking about a purely agricultural country; the money comes from the soil, and when the crop fails there is nothing else for the farmer to fall back upon.
Of course, there are other difficulties the farmers have to contend with as well as the injustices of a protective tariff; but the federal government have it absolutely within their power tc remedy the injustices arising out of a protective tariff. A protective tariff is not a popular doctrine to preach in any of the three prairie provinces, where the people are situated a long way from markets and pay high transportation costs on all they ship out and all they bring in. They need every encouragement possible in the way of removing handicaps to their industry. I would suggest again that if it is absolutely necessary for revenue purposes to keep a tariff tax upon agricultural implements, a corresponding tax for revenue purposes be placed upon all implements of home manufacture.
Reduction in freight rates is very important, but there will be an opportunity to discuss that later when the bill with respect to the matter is before the House.
A better system of marketing our wheat is necessary in the national interest, but this also will be before the House, so need not be taken up now. I would just like to emphasize what has been already said, that no one whc is not actively engaged in farming really believes, even if he pretends to believe, that the granting of a
national marketing agency with compulsory powers to handle the wheat of the country, is protection as it is generally understood. If it is, I for one am quite willing for the finance department to collect from me every dollar the wheat board pays me for wheat, over and above what the world markets warrant, less storage and transportation charges. The idea of a wheat board is to cut out the big slump in prices that occurs as soon as the movement of the wheat starts in the fall, to hold the market steady, and to see that the producer gets for his wheat all that the world's markets warrant.
As the development of the natural resources is the first and most important industry in Canada, and as the greatest of all natural resources in western Canada is the top six inches of fertile soil, so one of the prime requisites of that part of the Dominion is to have some place to sell its products outside of our own country. It is the function of provincial legislatures to look after the domestic affairs of the different provinces, but finding export markets is something that comes purely within the scope of the Dominion Parliament. A large percentage of the farmers of the three prairie provinces feel very sore over the loss of the market to the south just across the boundary line. True, we have no say in that at present, but if we cast our eyes back to the general election of 1911, we do not need long distance field glasses to discern what particular political party worked hard and successfully to shut the Canadian farmer out from the market to the south, and to-day that same party openly avow upon the floor of the House that they are in favour of restricted markets. I claim, Mr. Speaker, that had there been reciprocity in natural products between the two great countries- Canada and the United States-from 1911 up to the spring of 1921, the advantages to both would have been so apparent that no endeavour would have been made to interfere with the free flow of natural products north and south.
Canada, in effect, said to the United States in 1911, just exactly what the campaign cry meant, "No truck or trade with the Yankees." And the Yankees have certainly taken us at our word now, but Mr. Speaker, I commend the action of the Finance Minister, at the beginning of this session in making an endeavour to secure better trade relations with our neighbours to the south. I wish him God speed on

The Budget-Mr. Lovie
that undertaking and I would heartily commend to the notice of the Government and the House the recommendation of my worthy leader, the hon. member from Marquette (Mr. Crerar), that Canada should have representation at Washington.
From 1917 until the spring of 1921 livestock had free access to the American market, but when the Fordney tariff took effect, it seemed as if a cyclone had struck the Canadian livestock interests. The two greatest livestock marketing centres in Canada are the cities of Winnipeg and Toronto. What is the effect of the Fordney tariff upon these markets? The livestock shipper from my district in Manitoba told me personally last fall, that he saw nothing for it but to pay duty and ship his cattle to Chicago, as the Winnipeg market was so congested that one carload of cattle would knock it endways.
About the Toronto market I know nothing personally, but I can give the evidence of a gentleman living within twenty-five miles of Ottawa who has handled thousands of cattle in Ontario, and who has assured me since I came to Ottawa, that he was entirely out of the cattle shipping business since the market to the south was cut off because he could sell fifteen carloads of cattle in Buffalo just as easily as he could sell two head in Toronto. Since coming to Ottawa I have learned on the floor of the House that the maritime provinces depend very largely on the market in the United States directly south of them for the sale of their potato crop. Mr. W. A. Brown of the Poultry Division, Ottawa, speaking at the Agricultural Society's Convention in Winnipeg in the spring of this year, said:
We need to look for wider markets than we have at present for poultry products. We want to see Canada shipping poultry products to the great cities of Boston, New York and Philadelphia, just the same as they ship to us, oranges, lemons and walnuts. Thirty-flve carloads of poultry were shipped, live weight, from Prince Edward Island last year to Boston, 3,000 birds to a car, and 16,000 carloads of fowl were consumed by the Jews in New York alone last year.
Coming to Ontario, I find that the district in the southern part of the province lying along the shore of Lake Erie, has become properous growing garden and field truck for the United States market. The city of Detroit with a population of over 1,000,000 is within easy reach of that district; it sends motor trucks into the fields where the produce is grown and takes it into Detroit, paying duty on it. The

northern part of the state of Michigan being rocky and bushy, no truck is raised there, and Detroit depends on the southern part of Ontario for a large part of the necessaries of life, and the Ontario farmers are only too pleased to supply them. Farther west, some of the farmers are raising Kubanka wheat. There are no mills in Canada to grind Kubanka wheat. No mills nearer than Minneapolis can do so. Being practically rust resistant, Kubanka does better than Marquis in a year when rust bothers the crop. But the restricted markets which we have at present are against the raising of this particular kind of wheat.
I did want to say a word or two about freight rates, but that subject will come up later in the House. However, I would just like to mention one instance as to how freight rates are killing the trade of this country. An Ontario farmer was in our district last fall during threshing time, and wanted to take a car load of potatoes from Manitoba to his home district, because there was a scarcity of potatoes there. He could get potatoes at 70 cents a bushel f.o.b. the car. He found, however, that the freight was $1 a bushel so it was prohibitive to ship them; the producer would get 70 cents for his potatoes but it would take $1 a bushel to ship them to their destination. In that case there was nothing doing, and that is one of the reasons why farming is getting so unprofitable. There are many other similar instances that could be cited.
, I submit, Mr. Speaker, that western farmers are not kicking against existing conditions without reason. I would like to draw the attention of the House to one of the statements made by Mr. Sanford Evans while giving evidence before the Committee on Agriculture on the subject of the " Wheat Board." He said that those who cannot make money out of wheat raising at present prices have no business to be raising wheat, and that, in spite of the fact that wheat prices had fallen below cost of production. Mr. Sanford Evans also said at the same time that the price of all commodities the farmer had to purchase had started to come down before the price of farm produce came down. What are the facts? In the fall of 1920 wheat prices came down a half and stayed down. In March of 1921 the manufacturers and implement dealers of western Canada in convention assembled, decided that the price of farm implements was not high enough and raised the price 30 per cent. The blacksmiths of Mani-

The Budget-Mr. Lovie
toba at the same time met in annual convention and raised their prices 25 per cent, and this in spite of the fact that prices of farm produce were cut in two. These men certainly showed that they hated to take a loss.
It comes hard to give up money that people thought they had made, some honestly and some by outrageous profiteering, out of the world's dire extremity; but it must be disgorged just the same.
We are not to see that equilibrium, without which there can be no widespread resumption of business, until every mother's son of us shall have let go of all the temporary advantages gained under the stress of feverish war activities. They were all unfair, unreasonable and uneconomic at the time. They represented not honest reward nor effort, but a world's agony. They could have no permanent place in any man's industrial or business calculation.
Will people never learn the lesson that we are absolutely interdependent. It seems not. The starting point of the prosperity of every man, woman and child in Canada is a living wage for the farmer. The western farmer who has to take 18 or 20 cents a bushel for his oats is in no position to buy merchandise or machinery made and transported by labour receiving the price of 20 to 50 bushels of oats per day. That fact is so plain, that any wage arbitrator or price-fixing conference should understand it.
We have more respect for plain everyday highwaymen than we have for those who have not yet relinquished ill-gotten gains and accepted their losses. Of course, we hate to take a loss, even though it be a mere return of money which we thought had come to us as a blessing from heaven while Germany sat on our neck; but it came from the hell of war and1 we have no business trying to hang on to it any longer at the expense of barring the return of general business activity. The sooner the war booty is turned into the common pool, the sooner all will again find incomes equal to necessary expenditures.
Now, Mr. Speaker, I have not offered any remedy for the loss of revenue likely to come to the treasury through the lowering of the tariff on agricultural implements, which I have suggested. If the farmer were in a better position financially he would be in a better position to pay income taxes, something which he is
not able to do at present to any great extent as he has not the income. There are a few suggestions in the Farmers' platform issued by the Canadian Council of Agriculture in 1918 which I would commend to the notice of the Minister of Finance.
The farmers in my neighbourhood paid income tax pretty considerab.y in 1920, but, on the 1921 crop, I am afraid there will be very little income tax paid.
There is a system of collecting revenue, which I am going to bring to the notice of the Finance Minister, and the members of this House, of which I do not approve, and I would like an expression of opinion from the Finance Minister as to whether or not he approves of it, or how much of it has been done. I may say that the Income Tax Department are penalizing religious institutions. I do not know that it would be well to bring out the facts, but I would like to place them before the minister sometime or other. I have an idea that religious organizations were exempt from taxation, but I have a proof in my pocket that they are not.


Mr. HALBERT:: I move the adjournment of the debate.


William Irvine: I move the adjournment of the debate.


Hewitt Bostock: It is moved by Mr. Halbert that the debate be adjourned.


William Irvine: I rise to a point of order-


Some hon. MEMBER:: Order, order.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Bill No. 61, respecting Niagara River Bridge Company.-Sir Henry Drayton.
Bill No. 109 (from the Senate) for the relief of D'Eyncourt Marshall Ostrom.- Mr. Church.
Bill No. 110 (from the Senate), for the relief of George Herbert Stanley Campbell.-Mr. Ross (Kingston).
Bill No. Ill (from the Senate), for the relief of Deliah Jane Mills.-Mr. Spence.
Bill No. 112 (from the Senate), for the relief of Robert James Owen.-Mr. Boys.
Bill No. 113 (from the Senate), for the relief of Gibson Mackie Tod.-Mr. Boys.
Bill No. 114 (from the Senate), for the relief of Mary Agnes Flynn Donoghue.- Mr. Macdonald (Pictou).
Private Bills
[Stage Direction]
Bill No. 115 (from the Senate), for the relief of Margaret Thompson.-Mr. Sheard.
Bill No. 116 (from the Senate), for the relief of Daniel Calvin Bell.-Mr. Sheard.
Bill No. 117 (from the Senate), for the relief of Stanley Davidson Morning.
Bill No. 118 (from the Senate), for the relief of Johnston Nixon.-Mr. Rankin.
Bill No. 119 (from the Senate), for the relief of William Andrew Hawkins.-Mr. Ryckman.
Bill No. 120 (from the Senate), for the relief of James Malone.-Mr. Boys.
Bill No. 121 (from the Senate), for the relief of Marjorie Elizabeth Wickson.- Mr. Maclean (York).
Bill No. 103 (from the Senate), for the relief of Charles William Murtagh.-Mr. Boys.
Bill No. 76 (from the Senate), for the relief of Marie Louise Dagenais was considered in committee and reported.
Mr. GORDON moved that the bill be now read a third time.
Motion agreed to on division, and bill read the third time and passed.
Bill No. 83 (from the Senate), for the relief of Telesphore Joseph Morin was considered in committee and reported.
Mr. GORDON moved that the bill be now read a third time.
Motion agreed to on division, and bill read the third time and passed.
On motion of Mr. Fielding, the House adjourned at 11.12 p.m.
Monday, June 5, 1922