1922-06-05

[Stage Direction]
Hon. D. D. McKENZIE (Solicitor General) moved for leave to introduce Bill No. 123, to amend the Admiralty Act.
Sir HENRY DRAYTON:: Explain.


Mr. McKENZIE:: Under the present Admiralty Act the Governor in Council has the power to appoint a judge and a district registrar. There is no authority to appoint a deputy registrar or a deputy judge. Both these officials are now appointed by the judge. It is thought better that the same power that appoints the registrar should appoint the deputy registrar. That is the purport of the bill.
Motion agreed to and bill read the first time.



ESCHEATS ACT AMENDMENT

[Stage Direction]
Hon. D. D. McKENZIE (Solicitor General) moved for leave to introduce Bill No. 124, to amend the Escheats Act. He said:
This bill comes to me from the office of the Department of Justice, and its sole provision deals simply with the time in which proceedings under the Escheats Act shall be drawn. The original act is dated 1910, and this is the first amendment to it. The bill simply fixes the time within which an action must be brought. As a rule actions are brought within the usual limit of six years. This is a provision that any action under the Escheats Act shall be brought within two years from the arising of the cause of action.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. Sir LOMER GOUIN (Minister of Justice) moved for leave to introduce Bill No. 125, to amend the Supreme Court Act.
He said: Under this bill we propose to provide for an appeal to the Supreme Court of Canada from the decisions of the Supreme Court of Ontario in cases of reference made under a certain act passed by the province of Ontario in regard to provincial matters. At present there is no appeal, and we are asked to provide for an appeal.
Motion agreed to and bill read the first time.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
YUKON-EXPENSES ; POPULATION
['For a copy of all correspondence, letters, telegrams, and other documents exchanged between the Dominion Government or any minister or any officers thereof, and the Government of British Columbia, or the Premier of the said province or any minister or officer thereof, regarding the assumption by the Dominion Government of an issue of Canadian Northern bonds (estimated $40,000,000) guaranteed by the province of British Columbia and the releasing of the British Columbia Government of all liability in regard to the same.']
Hon. Mr. COPP:: Department of Agriculture: 1. $3,619.22.
2.	No information.
Auditor General's Office: 1. Referendum Election, $4,573.30; General Election, $6,337.75. 2. No information.
Customs and Excise Department: 1. $28,493.01.	2. No information.
Department of Finance: 1. $23,200. 2. No information.
Department of Indian Affairs: 1. $25,424.89. 2. No information.
Department of the Interior: Salaries and expenses connected with the admin-

Questions
istration of the Territory, $57,316.31; grant to Local Council, $45,000; grant for maintenance of roads, $20,000; grant for road construction (Mayo district), $20,000; total, $142,316.31.	2. No information.
Department of Justice: 1. $34,032.11.
2.	No information.
Department of Marine and Fisheries: 1. Meteorological Service-Dawson, $600; Carcross, $100. 2. No information.
Department of Militia and Defence: 1. No payments were made in the Yukon district during 1921-22 by the Department of Militia and Defence, but travelling and transport expenses to the extent of $1,536.30 were paid to members of the military forces proceeding there on demobilization. 2. No information.
Department of Mines: 1. $5,941.59. 2. No information.
Post Office Department: 1. $172,113.69. 2. No information.
Department of Public Works: 1. $124,158.03. 2. No information.
Department of Trade and Commerce: 1. No information. 2. 4,157.
Department of Secretary of State: 1. $8. 2. No information.



Mr. HOCKEN:: 1.	What were the total gross earnings of The Toronto Suburban Railway Company for the year ending December 31st, 1921?
2.	What were the company's grand total operating expenses for the same period?
3.	What were the net earnings from operation for the same period?
4.	What was the miscellaneous income for the same period?
5.	What was the total income from operation for the same period?
6.	What amount of taxes were paid during the same period, specifying the same?
7.	What tv as the interest on funded debt during the same period?
8.	What was the interest on floating debt during the same period?
9.	What were the total deductions for the same period?
10.	What was the net loss or profit for the same period?
11.	Is the net loss of $83,403.06 in the operation of the same railway for the year ending 30th June, 1918, correct, as is to be found on page 137 of the Report of the Bureau of Railway Statistics for the year ending 30th June, 1918?
12.	Is the net loss of $107,834.09 in the operation of the same railway for the year ending 30th June, 1919, correct, as is to be found on page 225 of the Report of the Bureau of Railway Statistics for the year ending 30th June, 1919?
13.	Is the net loss of $96,684.22 in tlhe operation of the same railway for the year ending 31st December, 1920, correct, as found on page 265 of the report of the Bureau of Railway Statistics for the year ending 31st December, 1920?


Hon. Mr. KENNEDY:: 1.	$423,143.09.
2.	$425,127.06.
3.	Deficit, $1,983.97.
4.	$11,698.84.
5.	$9,714.87.
6.	Taxes on real and personal property, $5,064.65.
7.	$118,260.
8.	Nil.
9.	$547.89.
10.	Net loss, $114,157.67.
11.	12 and 13. Yes.


NASSAU, ONTARIO, DAM
Mr. THURSTON:: 1.	Did the Dominion government award a contract in the months of November or December of the year 1921 for the supplying of sixty chair castings and the necessary bolts and nuts for the dam at Nassau, Ontario?
2.	If so, what firm was said contract awarded to and at what price?


Hon. Mr. KENNEDY:: 1.	Yes.
2.	The G. Walter Green Company, of Peterborough; price, $55, F.O.B., Nassau.


RAILWAY COMMISSION-CHIEF TRAFFIC OFFICER
Mr. ARCHAMBAULT:: Is it not true that Mr. Campbell has been appointed by Order in Council to replace Chief Traffic Officer HardWell on the Railway Commission?


Hon. Mr. KENNEDY:: No; but Mr. W. E. Campbell was appointed Chief Traffic Officer of the Board of Railway Commissioners in succession to the late Mr. James Hardwell by the Civil Service Commission, under date of June 1st, 1922.


FRUIT COMMISSIONER
Mr. MAYBEE:: 1.	Does the Government intend filling the position of Fruit Commissioner, lately vacated by Mr. Charles Baxter, by promoting someone from within the service of the department?
2.	Will the new commissioner have charge of the whole of the Fruit Branch or only half as heretofore ?
3.	Will the salary of the new commissioner be three thousand five hundred dollars, the amount formerly paid, or is it to be increased and by what amount?


Hon. Mr. MOTHERWELL:: 1. The position of Fruit Commissioner does not become vacant until August 21, 1922, the date of the expiry of Mr. Baxter's leave of absence. The matter of a successor is under consideration and the recommendation in the Civil Service Act in regard to the filling of vacancies by promotion will be followed, if considered
Questions

in the best interest of the Department and approved by the Civil Service Commission.
2.	The Fruit Commissioner has always had charge of the whole Fruit Branch since its formation, as the Department understands it.
3.	The new appointment will necessarily be made in accordance with the Civil Service classification and no change in the salary range as provided in that classification is contemplated at the present time.


ROYAL NAVAL COLLEGE
Hon. Mr. STEVENS:: 1.	Has the Government ordered the closing of the Royal Naval College of Canada at Esquimau, British Columbia?
2.	If so, what are the conditions and terms of the said order?
3.	Have the services of the staff attached to the said college been dispensed with?
4.	When- was the college originally established?
5.	In the estimate of the Government has the objects for which the College was established been attained, and have the instructions given and work performed at the College been of a satisfactory character?


Hon. Mr. GRAHAM:: 1. Yes, at the end of the present term.
2 and 3. Cadets will be returned home; second and third year cadets may enter the first and second year respectively of the course of applied science in the Universities of McGill, Toronto and Queen's; civilian and naval personnel, not required elsewhere in the service, to be demobilized when work of closing completed.
4.	1910.
5.	Yes, for the present.


CHARLES DAUPHINEE
Hon. Mr. BAXTER moved:: For a copy of all letters, telegrams, reports, correspondence and other documents embodying the representations made to the Minister of Public Works with reference to the dismissal of Charles Dauphinee as janitor of public building at Lunenburg, Nova Scotia, and which representations were referred to the Honourable Minister as considered by him as being satisfactory to warrant the dismissal of Dauphinee without investigation.


Hon. MACKENZIE KING:: I do not
know of any objection to having this order passed. The Minister of Public Works, Mr. King (Kootenay) is not present to-day. Perhaps my hon. friend will allow it to stand.


John Babington Macaulay Baxter: Very well.
Motion stands.


UNOPPOSED MOTION FOR PAPERS
Hon. Mr. STEVENS:: For a copy of all correspondence, letters, telegrams, and other documents exchanged between the Dominion Government or any minister or any officers thereof, and the Government of British Columbia, or the Premier of the said province or any minister or officer thereof, regarding the assumption by the Dominion Government of an issue of Canadian Northern bonds (estimated $40,000,000) guaranteed by the province of British Columbia and the releasing of the British Columbia Government of all liability in regard to the same.



BUSINESS OF THE HOUSE SATURDAY SITTINGS

William Lyon Mackenzie King: That on Saturday, the 10th June next, and all subsequent Saturdays until the end of the present session, the House shall meet at 3 o'clock in the afternoon and the order of business on Saturday shall be the same as on Friday.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
Mr. R. A. HOEY (Springfield) :: Mr. Speaker, I crave the privilege of making a very brief statement concerning two newspaper reports, one appearing in the Ottawa Journal on June 2, and the other in the Toronto Evening Telegram of June 1. Both these articles refer to a split or division in the Progressive ranks and associate my name intimately with that division. It is scarcely necessary for me to say that these reports have absolutely no foundation in fact; that they are wholly the product of some fertile and uncontrollable imagination. I should like to add that, in my humble judgment, they are wholly unworthy of Canadian journalism.



UNEMPLOYED RETURNED MEN

[Stage Direction]
On the Orders of the Day:
Mr. J. S. WOODSWORTH (Centre Winnipeg) :: Mr. Speaker, what action does
the Government propose to take with regard to the unemployed returned men who have arrived in the city of Ottawa?


William Lyon Mackenzie King: The deputation to
which my hon. friend has just referred, waited upon members of the Government this morning and made their representations in writing. Those representations are being considered by the Government; they are also being referred to the special com-

The Budget-Mr. Crerar
mittee of the House which is, at the present time, dealing with matters affecting the position and well-being of returned men. When the report of that committee is presented to the House, there will be opportunity, if desired, to discuss those representations further.



THE BUDGET


[Stage Direction]
The House resumed from Friday, June 2, 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. T. A. CRERAR (Marquette) :: Mr. Speaker, before I come to a discussion of the matter that is at present engaging and has engaged the attention of the House now for a period of some eight or ten days, I wish to make a reference to one or two matters that I should not like to have pass unnoticed. The first is to the fact that the Prime Minister, the leader of the Government (Mr. Mackenzie King), has been created a right hon. gentleman and can now share with my right hon. friend who leads the official Opposition (Mr. Meighen) any distinction and honour that attach to this title. I am not sure whether the addition of this handle to the hon. gentleman's name adds anything to his wisdom or not. In the very difficult and trying times through which Canada is passing, I could hope that that were the case. I, however, sincerely congratulate him on this distinction and honour he has received.
I wish also, like those who preceded me, to make a reference to the fact that this is the sixteenth budget delivered by the Minister of Finance (Mr. Fielding). The Minister of Finance occupies an unique position in this House in the fact that of the members associated with him who have had at any time in their career the responsibility of a cabinet position, the Minister of Finance is by many years the senior in this assembly. While I cannot always agree with the Minister of Finance, while I expect to have some disagreement with the proposals which he has submitted to the House, I feel that, throughout the whole length and breadth of this country, there is no man whose name stands higher in public esteem or who is regarded by Canadians as possessing in higher degree those qualities that

tend to the best in our public men than the Minister of Finance.
I have every sympathy with him in the responsible and difficult duty which he has had to discharge to the House and to the country in submitting his budget proposals for the present year. The circumstances under which this is done are grave, and I for one wish to approach a consideration of this question from the one angle of making, if possible, some useful contribution to the solution of Canada's difficult and perplexing problems at the present time. The general financial position of the country is not good; in fact, that is putting the situation very mildly. When we examine into the position of an individual as regards his ability to meet his obligation or to make progress, we usually associate that with the financial position in which he may be, and in national affairs which, after all, are simply individual affairs on a much larger scale, the same idea must govern. In considering the financial position of Canada today, we are faced with this fact-I was going to say this startling fact-that the debt of this country is almost two and a half billions of dollars; that notwithstanding that we are approaching four years from the conclusion of the war, Canada added to her debt last year over $86,000,000 and the year prior over $91,000,000. Those facts cannot be disputed. They stand out clearly before every hon. member; they stand out clearly before the country. I do not think there is anyone in this House, or, for that matter, out of it, who has regard to Canada's good name, who would wish that Canada should escape her honourable obligations. In private life we like to see the standard of personal responsibility and obligation that imposes upon the individual the duty of paying his honest debts. That must and should hold in respect of our whole federal financial administration. And if it does hold, then the burden of this debt, with the tremendous taxation that it involves, is a matter of very vital concern to every person in this country. In discussing his proposals the Minister of Finance pointed out that it is rather a difficult matter clearly to establish the balance of debt in each particular year, from the fact that the practice has varied as to the particular accounts to which certain expenditures should be charged. He made reference particularly to our railway expenditures, and I wish to say a word or two in that connection.

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It is quite clear that a great deal, if not practically all, of the total deficit of our railways, is properly chargeable to expenditure and not to capital. I quite realize that expenditures made for the improvement of roadbed, for the purchase of new rolling stock, and for the building of new lines, are properly chargeable to capital account. But I think that the Minister of Finance and the Government will be very well advised indeed to draw a very clear line down through these items, and to charge to expenditure every cent that should be eo charged, so that we may know precisely where we are standing in respect of the whole railway enterprise. That is of first rate importance, and when that is done we must then endeavour to make provision for such expenditures. I think the Minister of Finance, in the proposals he has submitted to the House, is endeavouring to dc that in the new taxation that he is imposing. There are some who harbour the hope that these railways eventually will return to the country every dollar that is now being taken out of the taxpayers' pockets to make good the deficits and the accounts on fixed charges. I cannot take that optimistic view because, Mr. Speaker, as I have said in this House before, the occasion of this expenditure in connection with our railways is due to the wild-catting in railways that has gone on in this country for fifteen or twenty years past, at any rate for the fifteen years prior to 1914. Railways have been built where there was no need of them, and vast capital expenditures have been embarked upon and engagements made that were unnecessary. But when the individual in his business makes a mistake of that kind he has usually to foot the bill, and that is the position we are in in respect of these railways. For several years, therefore, I am afraid it will be difficult for us to escape some drain on the public treasury to make good the capital charges that arise out of this undertaking. The Minister of Finance has estimated this year that, on the basis of last year's taxation, he will have a revenue of $332,000,000. Last year on the same basis we collected $381,000,000. He has pointed out, and quite rightly, that the estimates brought down and submitted to the House provide for an expenditure of $466,000,000. This does not include the supplementary estimates which have yet to be brought down, and which, I assume, will amount to several million dollars more. At all events, putting the best possible construction on the .situation, there is, 
between the minister's estimate of the revenue he will get on last year's basis of taxation and the proposed expenditure for the year, as revealed in the estimates brought down, a gap of about $140,000,000. Now, that is a very considerable amount. The sum of $140,000,000 more than covered the total annual expenditure of Canada before 1914. Consequently, when we are contemplating a budget, which on the basis of last year's taxation will fail by $140,000,000 to produce the revenue needed for the estimated expenditure this House has considered and passed, or will pass, we are faced with a most serious condition of affairs. And I cannot stress that point too strongly either in this House or out of it. The fact that we are $140,000,000 short on the same basis of taxation that we had last year is one of the most striking, thought-provoking suggestions in the whole of the budget proposals that have been submitted to the House. Our financial accounting, at any rate for the current year, does not give to the House the information as to the exact allocation of expenditures for capital and for ordinary purposes; and I presume that a great deal of it will be for ordinary expenditures. How does the Minister of Finance propose to adjust the discrepancy? He is proposing to adjust it by new taxation. He stated quite modestly-and I think perhaps it was the fact-that he was fearful that the new taxes would not quite bridge the gap that exists between his estimated revenue based on last year's taxation, and the expenditures for the current year. If the minister is correct in that view, then it imposes upon the Government, upon every member of the Government, the strongest possible obligation to curtail the expenditures of their departments wherever they can be curtailed, until we reach the point, at all events, where our outgoing expenditures are covered by our incoming revenue. That is absolutely and imperatively necessary. I have stated before that one of the most important things from this country's point of view is to get the budget within balance; that is to say, the ordinary expenditures of the Government, and the expenditures involved in the administration of the railways, apart from those strictly chargeable to capital account, should be covered annually by the revenues the country produces. That should be the cardinal guiding principle that should govern the financial administration of this country, at least for the next year or two. If we cannot make provisions for debt retire-

The Budget-Mr. Crerar
ment or debt redemption in the next few years, perhaps the time will come, a few years later, when the sun of prosperity will again be shining on the country and we shall be in a position to do that. But for the immediate present the urgent duty of the Government is to bring about this condition of affairs. I think we have pretty well reached the limits of taxation in this country. I must admit the skill and ingenuity of the Minister of Finance in devising some new methods of extracting money from the pockets of the taxpayers, but we have about reached the limit. How, then, is the desired result to be brought about? I have preached economy in the House and outside of the House, and I am going once more to raise my voice in advocacy of that great need in our national housekeeping to-day, not only in respect of our federal affairs, but, as well, in respect of the whole matter of public expenditures throughout this country. My hon. friend suggested-indeed, he did more than suggest, he stated very plainly- that a good many people in Canada failed to realize the changed conditions of this country, and I presume delegations are still coming from all parts of the Dominion pressing upon the Government the need for public expenditures in their particular localities. I think that is an evidence that there is a great deal of truth in the observation made by my hon. friend, that the Canadian people as yet have not a full and clear realization of our financial position. The tendency in Canada during the last twenty years has been towards extravagance in public expenditure all down the line. That applies not only to our federal government but to most of our provincial governments and to a great many of our municipal corporations. What is needed to-day more than anything else is a realization by our people of the need of practising economy in respect to our public expenditures, and the Government can give an effective lead in that direction by ruthlessly insisting on economy in every branch of expenditure under its charge and control.
We are considering the possibility of raising this year vast additional amounts by new taxation. I do not know how much the proposed taxes will bring into the treasury, but at any rate the Minister of Finance has gone quite far afield in imposing new taxes, and even in the face of that he tells us he is afraid his budget will not balance at the end of the year. In Great Britain taxation is being reduced, in the United
States taxation is being reduced-practically all the countries of the world whose condition is anywhere comparable to ours are reducing their taxation; and we must get to the point as rapidly as possible where taxation can be reduced. This heavy burden is pressing upon the people and discouraging business enterprise, and it is making living conditions more difficult. Therefore it is well once in a while to impress upon the Government the need of practising rigid economy.
Now, I do not want to urge economy without suggesting how such economy might be brought about. I am among those who believe that our governmental expenditures-and I include in that term municipal, provincial and federal-is altogether too much. In the years before the war, when our revenues were buoyant and our treasury overflowing, when every person, or nearly every person, was prosperous, the tendency naturally was to embark upon new forms of governmental expenditure. I may be wrong, perhaps my experience and knowledge are not wide enough to enable me to give a competent opinion, but I am of the view that right here in the federal administration of affairs great economies can be effected by the reorganization of departments and the cutting out of needless duplication of services. There are some departments-we have seen it in the estimates-duplicating the services of other departments. Some departments have their offices scattered all over this city. In this respect I would suggest that as soon as the country can afford it we should put up a few good administration buildings here to house the public departments, and so obviate having the staffs scattered over two or three square miles of territory and utilizing office space in scores of private buildings. Nothing is more conducive to extravagance in administration than such a condition of affairs.
I think, too, that there is a considerable overlapping between Dominion expenditures, and provincial expenditures, and I would suggest to the Government that this is a field which might well be inquired into. What is needed in respect to the whole matter is a large comprehensive policy. The problem needs to be attacked with vigour. We are not doing enough when we pare down the estimates of some minister a few thousand dollars here and a few thousand dollars there; that is not going to get us very far along the road of effective economy.

The Budget-Mr. Crerar
The Government has only been in office a few months, and I think there has been* a very general disposition to recognize that fact and to pass the estimates submitted, in the hope that the most rigid economy possible will he practiced. But I am pointing out now to my right hon. friend the Prime Minister and to other members of the Government that next session, if they are still in the seats of the mighty as far as power is concerned, they will not have that excuse, and I for one hope that when the next legislative programme is submitted to this House, I care not by what government, substantial reductions in the cost of running the government machine may be shown and brought into effect.
I want to say a word or two now about the character of the new taxation that has been introduced by the Minister of Finance. Any criticism I am offering is offered fully conscious of the great difficulties he must have in finding the money necessary to meet the demands made upon him. A few of these taxes 1 wish to make special reference to, and the first is the sales tax. My hon. friend has increased the sales tax by 50 per cent. I opposed the sales tax in the budget of a year ago when it was introduced by his predecessor. I think it is just as unsound to-day as it was then. Indeed, if I read correctly the speeches of my hon. friends opposite, some of whom occupy the Cabinet benches, I think I could find argument in those speeches made last session when this tax was under discussion which would support my assertion. A sales tax is unsound for the reason that it does not bear fairly upon those who have to pay it. It is true there are a certain number of exemptions from the operation of the tax, but nevertheless I submit that the person who has the smallest income and is the least able to pay this tax has to pay a share altogether out of proportion to his ability under this method of collecting revenue. Let me cite the case of a working man-he may foe a farmer, or a workman in a factory, or a clerk in an office. We will suppose he has a family of half a dozen children, and is earning anywhere between $1,000 and $1,800 a year. The sales tax hits him on a large number of articles that he must purchase for the maintenance of his family, and it hits him most unfairly. By way of contrast we have a bachelor-I was going to say a wealthy bachelor, like my right hon. friend the Prime Minister (Mr. Mackenzie King); I do not know that he is a wealthy bachelor, but at any rate he is a 
bachelor. Well, he escapes the incidence of this tax almost altogether. In that respect the tax is unfair. Taxes should be levied according to the ability of the taxpayer to pay, and this method of taxation violates that sound canon of taxation. I have no doubt that this tax will provide a considerable amount of revenue, but I am equally certain that it will also be a discouragement to business. Taxes of this kind always tend to discourage trade and industry, because the heavier the tax on the articles consumed, the smaller the quantity of those articles that will be consumed, and restricted consumption means unemployment in your factories. Consequently, the tax, judged by any standard you wish to apply to it, is not a sound tax.
My hon. friend has also imposed a very considerable increase indeed in the tax on cheques. I admit there might reasonably be some increase in that tax. Under the old regulations it rested at two cents per cheque issued; under the new regulations of the Finance Minister a tax of two cents is to be affixed for every $50 or part of $50 in amount of the cheque. The result is that, in particular lines of business at any rate, the burden imposed will be a very heavy one indeed. I am not contending for a moment that no additional tax on cheques should be imposed, but I think that when this matter comes to be considered in committee-if, indeed, my hon. friend the Finance Minister has not given it consideration before that time-some change in this respect should be made. In the great majority of businesses the additional tax will probably have very little effect, but I know, for instance, of some firms doing business whose contribution under this tax will be between $50,000 and $60,000 a year. I do not know to what extent the condition may prevail throughout the whole country, but there are certain businesses that peculiarly have to do their business by cheque. Upon such firms this additional stamp tax is a very heavy burden indeed. This proposed regulation is one which might well receive further consideration when the details of the budget resolutions are taken up in committee.
Some criticism, I think, can fairly be levelled against the proposal to tax the premiums on outside insurance companies operating in Canada. Many Canadian firms are unable to get from companies registered in Canada the kind of insurance they desire, and have to go outside of Canada to obtain it. Why should they be penalized by an

The Budget-Mr. Crerar
additional tax on the premiums that the insurance company collects? Without doubt the tax will have to be paid by the person in this country who is taking out the insurance.
There is no doubt whatever that in all these burdens the Canadian people are carrying a very heavy load, and I offer to my hon. friend the Minister of Finance the suggestion which I have made before in the House and which I think has certain merit: that the time has come-if it has not already passed-when some attempt should be made to co-ordinate the financial policy of this country. I notice that this is advocated by the Citizens' Research Institute of Canada, which is making a particular study of the question of taxation. The object is, if possible, to find out whether overlapping cannot be done away with and whether expense cannot be reduced; to find out, if it can be done, Where fair fields of taxation lie. Under the British North America Act the provinces of Canada have all the powers of taxation except that relating to customs, which is vested in the federal government; and the result is that the citizens of some provinces pay three income taxes, one to the Dominion, one to the province, and one to the municipality. There are various ways in which overlapping takes place. I believe that by a round table conference you could accomplish not only the straightening out of these inequalities in taxation, but the securing of well defined fields of taxation for each governing body, in other words, we should seek a policy the result of which would be to levy taxation fairly over all the people of Canada. One other advantage that would come from such a conference would be this: it would bring home to the provinces and to the municipalities, it would bring home to the people of Canada, the precise financial position of the country at the present time. In that way I am convinced that such a conference would be a very real service to the Dominion. I think the federal government should take the initiative in this matter. They are more conversant with the situation than are the governments in the provinces or in the municipalities; and I believe that if an effective lead were given by the Government of Canada to-day on this whole question of economy, there would be a splendid response from the whole of the Canadian people.
I wish now to discuss some other aspects of the budget. With some of its proposals I am cordially in agreement. It has some
good features;-it has some features that are not so good, to which I shall refer in a moment or two, but it has, I say, some good features-and the first I would like to mention in that respect is the statement of the Finance Minister, which statement, I take it, represents the view of the Government, that it is the settled policy of the Government to secure reciprocity with the United States-to bring about a revival of the reciprocity arrangement of 1911, an arrangement which, had it been carried out, would have been of the greatest possible advantage to this country. The Minister of Finance gave good evidence I think, of his desire to bring this about in his recent trip to Washington and his taking the matter up as he did with the United States authorities. That,
I say, is to the credit of the Government.
Another welcome and necessary change is the abrogation of the provisions in the Customs Act which gave the customs officer the power to assess the value of goods imported. That provision should never have been in the Customs Act; it often operated unfairly against the firm or individual importing goods into Canada. Another provision that has been done away with-and these are provisions that those of the Progressives Who were in the House last session opposed most vigorously-is the regulation requiring that the country of origin be marked on goods brought into Canada. The whole purpose of that regulation was to make it difficult to import goods into this country, and to the extent that it did so it provided protection for the Canadian manufacturer on those goods. I believe, Sir, that was the whole purpose in view at the time this regulation was brought into effect.
Another important improvement-perhaps the most important-is the wiping out of that antediluvian provision in the customs regulations, that foreign currencies should be taken at half their pre-war value for the purposes of customs assessment when goods from such foreign countries were brought into Canada. That provision was, of course, the most outrageous form of protection that was ever placed upon the statue book of this country. It operated wholly and solely to keep goods from these countries out of the Dominion; and to the extent that you fence off certain goods, to the extent that you prevent their importation into Canada, you bring benefit and profit to the Canadian
The Budget-Mr. Crerar

manufacturer. In some respects that provision was in line with true protectionist doctrine. I have never been able to understand the philosophy of protection in this respect. If it is a good thing to make it difficult for goods to come into the countrv so that your home manufacturer may benefit, would it not be a better thing to keep foreign goods out altogether and leave the home market to your Canadian manufacturer? That would be the logical course to follow. I know my hon. friends to my right do not agree with that view.


Mr. MEIGHEN:: Or opposite.


Thomas Alexander Crerar: I am very sure they do not, either.


Mr. DUFF:: Some of us do.


Thomas Alexander Crerar: If the protectionist theory is sound, why not keep foreign goods out of the country altogether? Well, this practice that was introduced by the budget of last year was in accordance with true protectionist doctrine, inasmuch as it operated to keep such goods entirely out of Canada. But the only result was to increase the cost to the Canadian consumer of similar goods made in Canada. Consequently, I say that the Government have done a wise thing in wiping that provision off the statute books.
Something has been said in the debate about trade with Germany. My hon. friend the ex-Minister of Finance (Sir Henry Drayton) described this budget as a "two and a half per cent British preference and free trade with Germany." That was rather an extreme statement, but I have observed that some other hon. gentlemen who have spoken in this debate have condemned the idea of trading with Germany, and they would like to see our customs barriers and tariff regulations framed in such a way as to make trade with Germany impossible. I cannot agree with the view expressed by my hon. friend from St. St. John (Mr. Baxter) the other day who stated, and it seemed to me an extreme view, that he would have no part or parcel with anything German. Is that the position that is being taken by the other countries of the world to-day? What is the position of the United States with respect to trade with Germany? What is the position of Great Britain? Both of these great countries are doing everything they possibly can to restore their trade with Germany-doing it to-day, doing it at this very moment. A group of financial men 
from both countries is conferring with a view to extending credits to Germany so that her manufacturing and purchasing power may be increased, and the whole trade of the world stimulated thereby. Is not that a sound principle and policy to follow? Why, in the face of that, should Canada take the position that we will have no trade with Germany, that we will create conditions which will make trade with that country impossible? I say again that in that respect the Minister of Finance has acted very wisely in the change he has made.
When I come to consider the other proposals contained in the budget, I regret that I cannot offer the same commendation to the Minister of Finance. This budget, outside of the changes I have referred to in abolishing these regulations, is a protectionist budget. It is based on the principle of protection. It is true the minister has made certain reductions in the duties-2i per cent on a large number of articles coming from Great Britain; in other words, the British preference is increased to that extent. As far as the United States and the general tariff is concerned, the reductions made are very few and very far between. I think I am quite within the facts when I state- that this budget is based upon the principle of protection. Nor is there any statement of government policy in the matter from the Minister of Finance. If he had stated: We are aiming at the elimination of protection in the fiscal policy of Canada-then the changes he has made, while they would not be sufficient, or anything like sufficient in my judgment, to meet the needs of the case, would nevertheless have given to this country an idea of which way the Government was travelling. Take the item of agricultural implements, for instance. My hon. friends on the government side have a very definite policy on the question of agricultural implements. They had a very definite policy in respect to the question of agricultural implements.


Mr. CHAPLIN:: Before the election.


Thomas Alexander Crerar: That policy was based on free agricultural implements. It was a sound policy, for reasons which I hope presently to give to the House. But in the changes which have been made in the tariff proposals submitted by the Government to the House, do we find anything of free agricultural implements? There is not one single, solitary lone implement added to the free list in Canada.


Mr. HOCKEN:: Did you expect that?

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Thomas Alexander Crerar: I do not know what my hon. friend expected. I am not asking him, and I do not intend to disclose to him what I expected. But that is the position and I think the Minister of Finance has not been quite consistent even in the changes he has made in the duties on agricultural implements. What are those duties? We find ploughs, for instance, reduced 2i per cent; the duty now stands at 15 per cent under the general tariff. As my hon. friend pointed out, it is very true that practically all the agricultural implements that are imported into Canada come from the United States, and consequently the reductions in the British preference are of no value as far as agricultural implements are concerned. But there have been a few reductions. Ploughs to-day stand at 15 per cent under the general tariff, and mowers at 10 per cent under the general tariff. Can any minister in the Government or any hon. member of this House tell me why there should be a difference of five per cent between the duty on mowers and the duty on ploughs? The very same materials enter into the making of a plough as enter into the making of a mower, and yet there is a difference of five per cent in the duty. My hon. friend the ex-Minister of Finance smiles at that, but I can assure him that he was guilty of the same thing a year ago when he brought down his budget proposals. Portable engines carry a duty of 17i per cent. Why should they vary from ploughs I do not know. Then tractors under $1,400 are free of duty. There is a little ray of comfort in the fact that the Government are fixing this by statute, and no longer leaving it subject to possible fluctuations by Order in Council. The duty was taken off tractors by the Union government in the early part of 1918. For what purpose? For the laudable purpose of increasing production in this country. Even under the stress of war conditions, under the stress of an urgent need, that government, which comprised many most ardent protectionists, recognized that it was necessary to take the duty off tractors in order to encourage and increase production of foodstuffs in this country. If that was a sound policy then, is it not a sound policy to-day? It is, and the Government is to be commended for making this change permanent so far as this particular tariff is concerned. But why distinguish between the tractor that costs $1,400, and the tractor that costs $1,500? The farmer who wants to buy a tractor at
$1,400 from the United States gets it in free of duty, but if some one wants a tractor a little bit larger than that, and it costs him $1,500 in the United States, when that machine comes to the customs border it is assessed $162.50 duty.
Again, the self-binder that cuts the grain in the fields has a tariff tax of 10 per cent, but threshing machines that thresh the grain after it has been har-
4 p.m. vested, carry a duty of 15 per cent. Why should that difference exist? Why should the threshing machine not be brought down to 10 per cent duty? I would also point out that the tools that are necessary to keep both of these machines in repair have to pay a duty of 30 per cent.
There is nothing consistent in these tariff proposals so far as agricultural machinery is concerned, and I can scarcely believe that my hon. friend the Minister of Finance has given this matter the fullest attention that he should have given it. Or is it possible that he was unable to go as far as he would like to go in making changes in the duties on agricultural implements? One of the amazing things in the situation to-day is the fact that among hon. gentlemen opposite, and even in the very Government itself, there are men who professedly hold almost diverse views on the question of the tariff and protection. Is that a sound thing? It is not, and I say that the Government failed, in my opinion, in implementing their pledges through their failure to reduce the duty on agricultural implements. If the Minister of Finance had come to the House and said: We would like to have cut off the duties on agricultural implements, but the needs of revenue are such that we feel we cannot bring the duties down below 10 per cent, I believe he would have had support in	this House for that	proposal.
But I see very little effort in that direction. When you come to the necessaries of life, where do you find the reductions on those articles? We have reductions of 2J per cent made in a few cases, but, under the general tariff to-day, on the main necessaries of life-clothing, boots and shoes, the household equipment and utensils needed in the home-the general tariff duty ranges from 25 to 35 per cent. Am I therefore unfair-and I do not wish to be unfair-in stating that this budget is, in its essentials, a protectionist budget? There is no change of moment in the tariff, for the reductions of 21 per cent made in the

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customs duties are almost all swallowed up in the increase in the sales tax. It is well known that the sales tax on goods imported is higher than it was on the domestic manufacture, and, consequently, the ratio of increase, I submit, has practically taken away all the reduction that has been made by the 21 per cent. That is not the platform of the Liberal party. If the Minister of Finance (Mr. Fielding) had come 'before this House and said "It is true we had a tariff platform in 1919. I do not feel, and the Government does not feel, that it can cross every 't' and dot every 'i' of that platform to-day," and had been able to give some reasons why they could not go the full length, I think they would have received consideration from this House. As far as I am concerned, I would have been prepared to give consideration to that statement. But such is not the case; and, indeed, if we consider the resolution that was moved in amendment to the budget a year ago which my bon. friend, the Minister of Finance, made reference to in his speech, I scarcely think that these budget proposals that have been brought down square with that resolution. What were the cardinal principles, or the cardinal features, of that resolution a year ago? I think the second and third paragraphs of that resolution contain the meat of the whole thing, and they read:
That the aim of the fiscal policy of Canada should be the encouragement of industries based on the natural resources of the country, the development of which may reasonably be expected to create healthy enterprises, giving promise of enduring success.
That such changes should be made in the Customs duties as may be expected to reduce the cost of living, and to reduce also the cost of implements of production required for the efficient development of the natural resources of the Dominion.
I say again, if the Government had come to the House and said "We have not had time to make these changes," it would have taken a considerable degree of faith to swallow that, but they would have been in some reasonable position. But as I understand to-day from the budget proposals made by the Minister of Finance, these, excepting some minor changes which may be made, represent the policy of the Government so far as tariff reduction is concerned; and if that is the case, I submit to this House and to the country that the tariff changes made in the budget proposals submitted to the House do not implement the resolution that was moved in amendment to the budget a year ago, and, consequently, are not such as the country requires, and should have, at the present time.

I want to deal now for a moment with the attitude displayed in the budget with regard to the reduction of duties on goods from United States. I am not at all sure that my hon. friend the Minister of Finance-and I give him credit for every sincerity in his desire to improve trade relations with the United States-is taking the wisest course in making a discrimination against the United States in favour of Great Britain at the present time. I know that is a debatable question. It may be that the minister has information, or has reasons for his views, that I have not got, and I would certainly defer greatly to his judgment in that matter. But, nevertheless, it is quite apparent that even in the United States to-day, in some of its leading newspapers, the discrimination against the United States is being treated as a retaliatory measure against that country. We turned down reciprocity in 1911. The American government had approached the Canadian government of that day and said "We are willing to make an arrangement with you on this basis." The Canadian people had turned down that arrangement. I think that now we would have advanced our interests further in the matter of trade with United States if we had frankly said "We will show no discrimination against you in any changes we make." My own view is we would have gone further. I am as firmly convinced as ever that trade with United States is necessary. Indeed, if we study the trade figures submitted to the House by the Minister of Finance in the proposals he laid before us, we find the two countries with which our trade is done mainly are Great Britain and the United States. Last year we exported to the United States $293,000,000 worth of goods and we imported from the United States $516,000,000 worth. That has been the ratio or something near it for a great many years-and I might, in passing, draw the attention of my hon. friends to the right to the doleful prediction they used to make in the House a few years ago that the adverse balance of trade with United States was the cause of the depreciation of the Canadian dollar in New York.


Henry Lumley Drayton: Hear, hear.


Thomas Alexander Crerar: My hon. friend the exMinister of Finance (Sir Henry Drayton) says "hear, hear," and his leader (Mr. Meighen) echoes the sentiment. Perhaps my hon. friends, when they speak in this debate, will explain how the discount on

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our Canadian dollar has disappeared, while the balance of trade continues the same.


Arthur Meighen: Borrowing money.


Thomas Alexander Crerar: I think the Minister of Finance has not been happy perhaps in taking that attitude towards the United States. Now what is the feeling in the United States? I am convinced the feeling is friendly to Canada, and I am convinced our protectionist friends in this country, while holding up the example of the United States to-day, will surely be deprived of that example. All the signs of the times in the United States point to the fact that they are abandoning the system of protection in fiscal policy. My right hon. friend the leader of the Opposition laughs, but we have the fact that the leading business houses of United States, the manufacturers, the leading bankers and the Chambers of Commerce of that country, are all protesting against the tariff legislation that is now before Washington. And where is this wonderful protectionist doctrine that was going to do so much for the United States? Where is the legislation introduced in the American Congress over a year ago, and scarcely any further on today than a year ago when it was introduced?


Arthur Meighen: It is in effect.


Thomas Alexander Crerar: My right hon. friend is altogether mistaken. The Fordney measure, which affects the importation of agricultural products from Canada and other countries, is in effect, but the general tariff is not in effect. The tariff which is in effect is still the Underwood tariff passed in 1913, which contains a large list of free articles entering the United States. My hon. friends are extremely anxious to bring to Canada capital needed for Canada's development. They argue that it is necessary to secure money needed for the development of our resources. I think it was my hon. friend from Centre Toronto (Mr. Bristol) who urged the argument that because of the principle of protection in Canada during the last thirty years, 350 manufacturing concerns in United States had opened branches in Canada and spent one hundred million dollars in this country. I am not sure that is greatly adding to the wealth of Canada. To-day, United States manufacturers are turning their eyes to Quebec. Why are they doing so? In the words of a manufacturer of some note in the United States, it is because of steadier labour conditions in Quebec that they are
turning their eyes to that province as a manufacturing centre. But what profit is it nationally to Canada to have one, two, three or five million dollars coming in from the United States for the establishment of a factory in Sherbrooke, Three Rivers or any other town in Quebec for the manufacture of goods, and then to have all the profits made on those goods go back to the shareholders in the United States? Is that a sound policy of development?


Mr.   McM ASTER@: Absentee landlordism.


Thomas Alexander Crerar: Absentee landlordism!
That is all it is. In order that this may be done, as I will presently show, we impose severe handicaps upon the natural industries of this country. I cannot for the life of me see the wisdom of any such proposal. The plain fact of the matter is this, that, in the United States to-day, some of the leading manufacturers are opposed to the principle of protection as regards the United States. They recognize, as has been already said by several hon. members in this debate, that if a country is going to sell goods, it must buy goods, and if it is going to buy goods, there is no sense in having those goods climb over a high protective tariff. The business of trade is not a one-sided business, although our protectionists assume it to be so. Our protectionist friends eternally lose sight of the fact that trade is not a one-sided affair. If you sell goods produced in a country outside of that country, you must buy in return, because that is the only way in which you will get paid for your goods. The United States are recognizing that principle to-day. They recognize that Europe owes them over $10,000,000,000, and that the only way in which they can get repaid is in goods. Consequently, instead of pinning their faith to the old fetish of protection, they are coming out into the sunlight of freedom of trade, and they are saying: "This thing is no good for us at the present time; it does not fill our needs." I venture to predict that within a few years the United States will have its face set definitely against the principle of a protective tariff, just as definitely as Great Britain to-day has its face set against that principle. But American industries which are looking for free trade for their factories in the United States, are not unwilling to have protection for their factories in Canada, and why? Because they wish to exploit the area of Canada as regards the things that they produce. It is



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a significant fact that when the ex-Minister of Finance (Sir Henry Drayton) was engaged in that lengthy .peregrination over Canada a few years ago seeking evidence as to What changes should be made in the tariff, manufacturer after manufacturer in Canada representing American interests, took the view that they could not possibly live unless duties were kept up on the goods they manufactured, and they were branch houses of American concerns. I am very doubtful as to the wisdom of that kind of development.
We of the Progressive party stand unalterably opposed to the principle of protection in our fiscal policy, and I wish to make that as clear as I can make it. We are opposed to it for the following reasons, amongst others: First, that a nation grows rich by trading. No nation in the world ever acquired wealth, no nation ever acquired world prominence that did not trade with the world; and because we grow rich by trading, not within ourselves, but with the world, we are opposed to protection, for protection presents a barrier against trading with the world. A second reason is that protection retards the development of the natural industries of this country. What are the natural industries of Canada? They ar.e those industries which are based upon the natural resources of Canada. The Almighty, when He gave us this country, gave it to us filled with a wonderful richness, a fertile soil, wonderful forests, rich mines and splendid fisheries. These are the great natural sources of' wealth to this country. And how has protection operated to assist in their development? My hon. friends to my right argue-and I will say that I have not frequently heard that argument come fror. the other side of the House-that protection is necessary because it furnishes a home market to our Canadian producers of natural products. There never was a greater fallacy in the world than that as applied to this country. I will admit, for the sake of argument, that it furnishes a home market to vegetable growers around our large cities; but of what value is the Canadian market to the Canadian farmer who is producing in Canada enough wheat to feed 50,000,000 people when we have a population of only 8,500,000? What use is it to the Canadian farmer and the Canadian dairymen who are producing far away and beyond what can possibly be consumed in Canada? It is of no use whatever. Protection has operated to discourage those industries by mak-

ing it costly and difficult to secure the very things that are necessary to carry them on. In order to build up a few factories and crowd a few cities, for forty years we have imposed this enormous burden on the masses of the real wealth producers of this nation. Protection has had no other effect.
The absurdity of the thing is discovered when you examine into some of its oddities, some of its peculiarities. Let us take rubber, for example. Rubber shoes, rubber belting, rubber goods of all kinds, are taxed under the general tariff either 30 or 35 per cent-I cannot at the moment recall which. Not an ounce of raw rubber is produced in Canada; we have to bring the raw material for these factories hundreds, yes, thousands of miles, to this Dominion. And then, in order to create an industry that will give employment to a few hundred or a few thousand people at the very outside, we say: "we will put a protective duty of 30 per cent on all rubber manufactured goods coming into this country, and we will build up in this Dominion a home industry that the Dominion may be proud of. That is the theory and doctrine of my hon. friends to my right. I wonder how many of my hon. friends to the right of you, Mr. Speaker, down in their hearts believe in the economic wisdom of that policy.


Mr. CAHILL:: Not many.


Thomas Alexander Crerar: I should say not; I would hope not. What is the effect of protection in that particular case? We tax the Canadian consumer of rubber goods to the extent of 30 or 35 per cent-indeed, with the present sales tax, the tax is more like 40 per cent. In other words, every person who wants to buy a garden hose, or a piece of rubber belting, or a pair of rubbers, or any class of rubber goods, has the cost of it increased by that amount. And for what purpose? To bolster up and support and maintain in this country an industry that gives employment to a few thousand people at the very outside. I put it to the com-monsense of this House: Is that a: sane policy? I know the Minister of Finance in his heart does not believe it is a sound policy. I give him credit for haying too much vision and business commonsense to believe in it.
I have talked so much about cotton that I am getting a little tired of the subject in some ways, but I want to refer to it to-day for a specific reason. For many years we have had, on cotton goods coming into this country, a protective tariff of

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over 30 per cent under the general tariff. Cotton is not produced in Canada. This is another manufacture where the raw material is brought into this country free of duty. It is true it gives employment to a few thousand people in Sherbrooke, Valleyfield, Cornwall, and other places where they manufacture these cotton goods; but in order to sustain these few thousand you put a penalty of 30 per cent on every cotton consumer in Canada. And not only that, you do even worse; because the finished cotton goods is the raw material for some one else in this Dominion. Now, it is an interesting fact that in the late election one of the most enthusiastic supporters which the Progressive cause had in the city of Winnipeg-and we had many there-was a manufacturer of workingmen's overalls, smocks, and shirts. He was frankly a supporter of the Progressives, and was opposed to the tariff for this reason. He said: "It prevents me from buying my raw material where I can get it to the best advantage. My raw material is the cotton goods made in these factories, and when I come to buy it I have to pay the price the manufacturers lay down; and they even go so far as to specify the quantities I shall have My hon. friend from Brome (Mr. McMaster) gave us some interesting information in his address the other day as to the operation of trusts and combines in matters of this kind. The manufacturer of overalls did not have any advantage from the tariff, because he paid his duty to the Canadian cotton manufacturer; and although there may have been a protection to him against the goods he manufactured, coming into Canada, he enjoyed no real protection in his industry for the reason I have pointed out. And that is the inconsistency of the thing all through the piece; for under the protective tariff, what is the finished article of one factory is the raw material of another, and you cannot possibly define any system of customs tariff that will work equitably. It simply cannot be done.
There is another reason why we are opposed to protection, and it is that protection is sectional and selfish in its operation. What is needed in Canada is a policy that will unite the Dominion. But protection has built up a few large cities; it has done very little else; -and it is all the veriest nonsense to say that this system is
1574	V
necessary to provide employment for Canadian workingmen. Where are the skilled workmen in Canada going? They have been going in shoals to the United States in the last ten years. We know that the immigration figures in connection with the United States during the last ten years show a balance against Canada for actual purposes of residence, although there has been a big flow of population both ways. People have come from the agricultural portions of the United States to settle on our cheap lands in western Canada. What, then, has constituted the drift of population from Canada to the United States in the other direction? It has come from the labouring people of the Dominion; and that is why I urged the Minister of Immigration (Mr. Stewart) the other night to see to it that records are kept of the people going out of Canada, what parts of the country they come from, and what their occupations are. And why has there been such an exodus of population from the East? The reason is simple. The cost of living is less in the United States than in Canada, while wages, on the whole, are just as high. The Canadian workman will work in a country where the same amount of wages will buy more of the necessaries of life he requires, and that is why many of our workingmen go there. I say, therefore, that this system of protection, created to build up the Dominion, is absolutely unsuited for the purpose. And what has been the effect on the maritime provinces of forty years of protection? During the last election I spent a week or ten days in that part of Canada advocating the Progressive cause. I will confess that the results were not very fruitful.


William Duff: Hear, hear.


Thomas Alexander Crerar: Nevertheless it gave me an opportunity to get an insight into and to study the conditions in the maritime provinces such as I never had before.


William Duff: We are all Progressives down there.


Thomas Alexander Crerar: And I make this assertion, Mr. Speaker, that there is not a single part of Canada that has suffered so much under protection as the maritime provinces.


Some hon. MEMBERS:: Hear, hear.


Thomas Alexander Crerar: I am very glad to see that I have some support on the other side of the House. What was the condition of the maritime provinces prior to Con-

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federation? When you had freedom of exchange your ships were going into practically every port of the world. But for 40 years we have had a system of tariffs in this country that has made it difficult, if not impossible, for the maritime provinces to trade with the world, and the result is the stagnation of the natural industries of those provinces. But our protectionist friends say that the remedy is to get manufacturing industries in the maritime provinces. Well, of what use will they be? Can you create manufacturing industries in the maritime provinces that will compete with the industries of Montreal, Hamilton, Toronto, and other larger cities? It cannot be done. The whole tendency to-day in the manufacturing business is towards centralization, and the big centralized protected manufacturer controls the field and can crush out competition. I say to my hon. friends from Nova Scotia, New Brunswick and Prince Edward Island that they will never have manufacturing industries in the maritime provinces under this policy of protection; never in the world. What about Ontario? Well, Ontario has been lauded and has been cited as an example of the efficacy of the principle of protection. But what a change has taken place in Ontario. Study the figures of population as disclosed by the census returns and you will discover this undeniable fact, that some of the finest agricultural counties of old Ontario have gone down steadily in population in the last 30 years. My hon. friend from West Toronto (Mr. Hocken) says that the people will not get married. They will not get married, I apprehend, because they cannot afford to do so under this system of protection; and I would invoke the assistance of my hon. friend in getting this thing righted. That is the condition of affairs. Is it a healthy condition? I put it to the common sense of hon. members, is that a healthy condition of national growth and development? I submit that it is not, and I say to my hon. friends to my right, and to hon. gentlemen opposite who believe in the principle of protection: Try to justify this system on the ground of what it has done in Canada during the last 40 years either in the way of increasing population or in extending the national wealth, and you find that you cannot justify it. And what about the prairie provinces? We have heard a good deal of criticism, or at least we have seen considerable criticism in the eastern press, of the prairie provinces. I 
want to say in this House, with a full sense of my responsibility, that the prairie provinces will never become protectionist. You may send, as has been done in the past a first class hidebound Tory protectionist from the province of Ontario to western Canada, and while the heresy may last with him for a few years it will not affect those who come after him in his family. And I will tell you why. Western Canada cannot have manufacturing industries. In the first place, we have not the coal and iron upon which manufacturing industries largely are based, and in the second place the climatic conditions are such that the manufactures based on these articles cannot be developed in western Canada. On the other hand, what have we received from protection? It has not helped us. Western Canada progresses in spite of protection. Our chief exports have been wheat, live stock and agricultural products, and the home market has not been of the slightest value to us in respect of these things. Then again take British Columbia. This province is supposed to have some belief in protection. I was much interested a short time ago in seeing a proposal advocated, I think by the Board of Trade of Vancouver, for the purpose of making Vancouver a free port. I think my hon. friend from Vancouver Centre (Mr. Stevens) favoured that proposal.


Henry Herbert Stevens: Does my hon. friend desire to be accurate?


Thomas Alexander Crerar: Yes.


Henry Herbert Stevens: Then let me correct him. What the Board of Trade of Vancouver asked for was a free port zone in the harbour of Vancouver; which is slightly different from what my hon. friend said. It was for re-packing and re-exporting goods.


Thomas Alexander Crerar: I am glad to have
my hon. friend's explanation, although I remember reading the bill that they propose to submit to the House and his explanation is not my understanding of it, but I may be wrong. What was the purpose of that? It was simply to get away, if possible, from the evil effects on the trade of thai city. That was the whole purpose behind the proposal.	_
Now, what this country needs is a policy that will unite it from one end to the other. And I repeat, Sir, that the system of protection is selfish and sectional in its operation and unsuited to our national needs. The real wealth of Canada is pro-

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dueed from its natural resources. Let me give you figures of our exports in that respect. Agriculture 'has prospered in spite of protection; the West has prospered in spite of protection. But why? What has been the history of protection in this country? It was introduced in 1879 and for ten years, when we had a period of great depression and our people were leaving by the tens of thousands and going to the western states. In the early days the party that had been responsible for introducing protection was shifting its ground, speeches were being made about the need of "lopping off the mouldering branches," and in 1897 a very substantial reduction was made on the tariff upon imports from Great Britain under the change of government that had taken place. But the prosperity that Canada enjoyed from 1900 to 1912 was not due to the tariff at all, but was due to the fact that the great West with its vast areas of free lands was opening up, people were coming into this country by hundreds of thousands each year, and capital was pouring in by the tens of millions of dollars annually; railways were being built, public works were being carried on. Those were the conditions that gave prosperity to Canada at that time. That prosperity was not due to the tariff; indeed, the manufacturing establishments of Eastern 'Canada were practically "on their uppers" until the western development started.
But even in spite of the tariff, our natural industries have prospered. Let us look at the export figures for last year. Our total exports then amounted to i$740,000,-000-a very considerable total, although a substantial reduction from the figures for the previous year. Now, the wealth of a country is measured by its trade figures. That is why finance ministers, not only in this country but in every other country, dwell on these figures as a measure of prosperity. As I say, we exported goods to the value of $740,000,000 last year. But where did those exports come from? Last year was a year of trade depression, a very trying year throughout the world. Of this total, vegetable products accounted for $318,000,000, and animal products, $135,000,000; in other words, $453,000,000 of the $740,000,000 of exports last year had their origin in the farms of Canada.


Mr. MANION:: In that connection, has my hon. friend figures for the total production of the farms of Canada last year to compare with the amount exported?


Thomas Alexander Crerar: I have not those figures, Mr. Speaker, and they have nothing whatever to do with the question.


Robert James Manion: In my opinion they have.


Thomas Alexander Crerar: We produced enough on our farms to maintain our own population and have a surplus for export. I am pointing out the surplus we exported last year.


An hon. MEMBER:: What about cotton?


Thomas Alexander Crerar: Our cotton manufacturers contribute very little in the way of exports, but we import a very small amount of cotton goods, so the main business of our cotton manufacturers and other manufacturers of similar lines of goods in Canada is to produce for the needs of the Canadian people under tariff protection ranging from 30 fo 35 per cent.


Henry Herbert Stevens: Does my hon. friend include in those figures products of the farm that had been manufactured?


Thomas Alexander Crerar: Certainly, those figures include manufactured products of the farm such as flour and meats.


Henry Herbert Stevens: Cereals?


Thomas Alexander Crerar: Cereals and everything of that kind. The next item of our exportable wealth is from our forests, and represents $180,000,000. The wealth of our forests gains nothing by protection, because 85 per cent of the pulp and paper manufactured in this country is exported, and the main purpose is to find export markets for our surplus manufactured products. Our mineral products represent $50,000,000. So we have a total in farm, forest and mineral products of $683,000,000 in value, out of a total of $740,000,000 of exports. And yet, for forty years we have been following a fiscal policy aimed to create wealth in this country by building up manufacturing industries, although even last year they were not able to produce more than a few million dollars of exports in the most serious year that this country has passed through in a long time. To my mind the situation is absurd. The fiscal policy of this country should be based on considerations that will give the best possible opportunity for the development of these natural industries, such as agriculture, lumbering, and mining. The production of grain is just as much an industry as the making of goods by machinery. Let us then shape our fiscal policy to give encouragement to

The Budget-Mr. Crerdr
these great natural industries. If by encouraging the production of cereals we can double our production, and so increase by another $200,000,000 or $300,000,000 the value of our exports, our business is going to benefit, our railways will have more traffic to carry, and our factories will give more employment. That is a sound basis upon which to build our industries. But we have, so to speak, inverted the pyramid and endeavoured consistently for forty years to follow protection for the avowed purpose of building up manufacturing industries in the Dominion, creating them as the basis of our wealth, and neglecting our great natural sources of wealth.
The futility of protection is being recognized throughout the world to-day. After the war was over the various European countries sought to enrich themselves and advance their own interests by raising tariff walls against their neighbours so as to exclude their neighbours' goods. What has been the result? It has accentuated the suspicions, hatreds, and distrusts that have cursed Europe for hundreds of years, and after the terrific turmoil of the war was over the spirit of peace, that should be brooding over Europe has given place to a spirit of hate, distrust and strife. Those who were responsible for bringing about the Genoa Conference recognized that truth, and in the resolutions adopted at Cannes for the conduct of that conference specific reference was made to this particular subject. It is so important, Sir, that I shall read it to the House. It stated:
The obstacles to revival-
That is, to the revival and reconstruction of Europe.
The obstacles to revival, however, are economic as well as financial.
The conference will therefore consider how the existing impediments to the free interchange of products of different countries can be removed, in particular by the abolition as rapidly and completely as possible of such new impediments as have resulted from post-war conditions.
That was set out as one of the specific things that was wrong with Europe to-day. I have already alluded to the United States; -what was the position in Great Britain? Some of my hon. friends in this House have cited the safeguarding of industries bill in Great Britain as evidences of the fact that Great Britain was moving toward protection. Well, I advise them, Sir, to get all the pleasure and comfort they can out

of that in the immediate future, because if I can read aright the signs of the times, there is nothing more certain, than that when the British people have an*opportunity to pronounce upon the matter, the safeguarding of industries bill will go to the scrapheap and stay there forever. Lloyd George himself has stated that it is only a temporary measure; he was apologetic for it the other day. There is no organization of bankers, manufacturers, transportation people or labour people which is not opposed to it to-day, and it will soon be a forgotten thing. Yet my hon. friends seek to support the maintenance of this doctrine in Canada on the ground that Great Britain had the safeguarding of industries bill in operation for a few years.
The cure for the world is to have more trade, not less trade. Trade begets friendly feelings between countries. Individuals who are trading with each other, who are exchanging goods with each other with resulting mutual benefit and gain, are invariably good friends; the same holds true in our national life.
I have said that the budget is protectionist. It is protectionist, in the sense that it practically makes no changes in the customs tariff. I want to point out to the House that in 1919 I left the Government of the day because it brought down a budget that was very little different from the one that is submitted now. Under these circumstances, Sir, I cannot support the budget proposals of my hon. friend the Minister of Finance.
I want to say a W->rd now about the amendment that has been moved by my hon. friend the ex-Minister of Finance (Sir Henry Drayton). The first thing that strikes me in that respect is that the terms of the amendment vary entirely from the arguments that have been made by my hon. friends to my right who have spoken in this debate. The terms of the amendment are very simple; they state that the budget proposals brought down constitute on the part of the Government an utter failure to implement its pledges by legislation. Well, while I have been pretty severe in my criticism of the Government, I do not think those words are justified by the actual facts of the case:. My hon. friend the Minister of Finance has wiped out that iniquitous discrimination against countries with depreciated currencies, and he is entitled to some credit for that. But my main objection to the motion of the ex-Minister of Finance is not founded on that; it is founded on the fact that it offers nothing constructive at th''

The Budget-Mr. Crerar
present period of this country's development. We have a serious condition of affairs in this country. We have a burden of debt of almost $2,500,000,000. According to the proposals brought down by my hon. friend the Minister of Finance, on the basis of taxation of last year as I have already stated he will be $140,000,000 short of meeting the need's of the present year as asked for by the Government in their estimates. Under these conditions, what is necessary? I submit that what is necessary is a broad, courageous policy. What is necessary is that we get away from this principle of protection in our fiscal policy and set our eyes definitely and steadily in the other direction. Only in that way can we add to the wealth of our country; only in that way can we make the people of Canada prosperous; only in that way can we bring about such a Change in the conditions as will enable the people to bear the burdens of taxation that are imposed upon them. That is the broad, constructive policy that will lead to the advancement of this country in the development of all its great potential wealth. For that reason I beg to move, seconded by the hon. member for Springfield (Mr. Hoey) :
That all the words after the word "support" at the end of the third last paragraph of the amendment to the motion before the House, be struck out, and the following be substituted therefor:
"That the Liberal party having been returned to power, the budget proposals of the Finance Minister now brought down, based, as they are, mainly on the principle of protection in respect to the tariff, are wholly inadequate to implement such pledges by legislation.
"That while recognizing that changes in fiscal policy should be made in such a way as to give industries affected a reasonable opportunity for readjustment, this House is of the opinion that the principle of protection as a basis for fiscal policy in Canada is unsound and not in the best interests of the Dominion."


Mr. FIELDING:: I submit, Mr. Speaker, that the motion is not in order.


Mr. SPEAKER:: I would like to have the opinion of the most experienced members of the House on that question. I have an opinion, but I do not wish to express it at the moment; I will reserve it until later.


William Stevens Fielding: The ground of my
objection is that it is a well understood principle that you cannot have two amendments on a motion to go into Committee of Ways and Means or Committee of Supply.


Mr. MARCIL (Bonaventure) :: I may
add that during my term as Speaker, and
for many years before and since, the custom to which the minister refers has always been followed.


Thomas Alexander Crerar: I submit, Mr. Speaker, that in all the circumstances, the amendment to the amendment which I have moved-should be recognized by you and admitted. I have not had a great deal of experience in the study of authorities who have dealt with these questions, but it is a well recognized practice in the British House of Commons-the Mother of Parliaments, from which we derive practically all that we have in the way of parliamentary institutions and parliamentary practice-to permit the introduction of secondary amendments or amendments to the amendment. Now, I may say with reference to the British practice that the method of procedure, as I understand it, is different from ours. In effect, the permission of the British House must first be secured for an amendment; that being done in each case, as many amend-mens may be offered as hon. members wish to introduce. Our own rules provide that:
In all cases not provided for hereinafter or by sessional or other orders, the rules, usages and forms of proceeding of the House of Commons of the United Kingdom of Great Britain and Ireland in force on the first day of July, 1867, shall be followed.
We have no rule of this House which is contrary to the practice to which I have referred as the well established practice in the British House of Commons. Our practice in Canada rests upon a precedent. I quite admit that in recent years, and, indeed, for quite a number of years in this House it has been the rule not to admit second amendments, or even an amendment to the amendment. That practice rests, so far as I have been able to discover, upon a decision given by Mr. Speaker Smith in the old Parliament of Canada in 1858, but as Bourinot has pointed out in his very valuable work: "This peculiar limitation to moving amendments arose originally from a misunderstanding of a Canadian Speaker as to the English practice."
Bourinot had in mind the decision given oy Mr. Speaker Smith upon this occasion. It was a decision that a second amendment was not admissible. I do not need to recite to the House the particulars of that discussion, but a curious thing, I find, happened two years later when Mr. Speaker Smith, the same Speaker who had given the decision in 1858, practically

The Budget-Mr. Crerar
reversed that decision. I quote from Speakers' Decisions, a work compiled by Mr. A. Laperriere, who was at one time First Clerk of the Library of Parliament, and who quotes the decision of Mr. Speaker Smith upon that occasion:
The Hon. A. T. Galt having moved the House into Committee of Supply, an amendment was proposed by the Hon. Geo. Brown, and after debate, an amendment to the amendment was proposed by the Hon. L. T. Drummond. C. Dun-kin, Esq., raised the point of order and asked whether an amendment could be moved to the amendment to the motion for the House in Committee of Supply. The Speaker answered thus:
''The point is very clear. There could be only one amendment to the motion for going into Committee of Supply. The motion of the Hon. D. T. Drummond was simply to amend the amendment, and consequently as it was not a substantive motion, he must rule it to be in order."
And he so ruled, and the House voted on the amendment to the amendment.
I submit that the present case is identical. It is true that subsequent speakers, either through lack of knowledge of the practice or of the decision on this particular occasion, have held that the first decision of Mr. Speaker Smith in 1858 should govern Canadian parliamentary practice, and I recognize that there have been several decisions by Speakers subsequent to that date confirming that view, but I submit, Mr. Speaker, that the full facts of the case were not taken into account and that you, Sir, in your ruling should follow the precedent established by Mr. Speaker Smith in 1860, in the circumstances which I have just related to the House.
There is another reason, aside from the practice and the rules, and that is that at the present time we have in this House a well recognized third party. I submit, Sir, that in fairness and equity this party of which I have the honour to be the leader, should have the opportunity of expressing its view upon a question of this kind in the manner in which we have done in the amendment I have moved. I think that is only a matter of equity and right. I quite recognize that you, Sir, in the duties of your office must be guided by the rules and by the practice that has gone before, but I submit, Sir, that the practice of refusing an amendment to the amendment is not substantially or soundly founded in this country. I therefore hope, Mr. Speaker, and ask you to so rule, that the amendment to the amendment which I have proposed is in order.


William Stevens Fielding: I submit, Sir, that the hon. gentleman has stated that something

that occurred sixty-two years ago justifies his present motion. I do not admit that he is correct. I think possibly he may not be; but against his events of sixty-two years ago may I not plead the practice of the Parliament of Canada so long as any member of this House has any knowledge of it?


Hewitt Bostock: Although I have studied the question, having been made aware that an amendment to the amendment might be moved, yet I find the point raised so important that I shall reserve my decision until to-morrow to give me an opportunity of reviewing the opinion I have formed, and see if I can render justice to the third party in this House. As I stated a moment ago, I have an opinion based upon the practice in the past, but I shall go deeper into the subject during the day, and to-morrow I shall be in a position to give a ruling. In the meantime my decision on the point is reserved.


Mr. E. J. McMURRAY (North Winnipeg) :: Mr. Speaker, in discussing the budget this afternoon, I do not propose to enter into any philosophical arguments in support of protection or free trade. There are the regular stock arguments
5 p.m. in favour of either proposition.
, The case for protection has been well and ably set forth by the hon. member for Centre Toronto (Mr. Bristol), and that in favour of free trade by the hon. member for Marquette (Mr. Crerar) and the hon. member for Brant (Mr. Good). Indeed, the latter has put forth various arguments in favour of other forms of taxation. Neither am I going to enter into a minute discussion of the budget itself. I am not well enough informed, and it is a matter of a highly scientific nature. The Canadian tariff is described as one of the most difficult of all subjects. I wish to discuss the matter more from a general point of view. It is easy enough to put forward theories, but their practical application in a country like Canada is a far more difficult and serious thing. Circumstances are compelling forces that limit and curtail the carrying into effect of many theories. This is true in all walks and callings of life. We see it every day. We must fashion the suit from the amount of cloth and the material at hand.
Financial conditions in Canada to-day, as in practically every other country of the world, are exceptionally serious. We have a national debt of two and a half

The Budget-Mr. McMurray
billion dollars, and a potential debt in connection with pensions that will amount, before we are through, to practically one billion dollars. In addition we are rapidly accumulating railroad deficits. The difference between the first two kinds of liabilities and the third is that the first two constitute a liability for many generations, while the third in all probability can be stopped. Last year we were short some $86,000,000, and the year before some $90,000,000. This year we are going to be short some $140,000,000. With that facing the hon. Minister of Finance (Mr. Fielding) his policy, as a matter of consequence, had to be more or less limited. He might well have exclaimed with Macbeth that he was " cabined, cribbed, confined " by the actual financial conditions prevailing in this country. He had to face a falling revenue and a rising indebtedness. In addition to that, we will have to meet the Fordney Bill of United States. The minister finds his vessel is driven by contrary winds on a rough sea, but that splendid pilot of the people of Canada has pointed his course true to the Liberal chart and compass as he has ever steered it in the past.
In the discussion of this question we must understand that the indebtedness to which this country is committed is largely that created by war. It was not created in the special interest of any particular industry or section of people in Canada, but in the interest of all, and all have a patriotic duty to bear that burden. The taxation harness has been placed by a master hand. The budget has been drafted so as not to injure any particular industry in this country and yet in such a way that the burden is borne by all. It is a burden in which all bear a part, and no one is injured. I am satisfied that the people of this country as a whole will accept favourably, recognizing all the conditions, the budget as it has been drafted.
I am not so much concerned with the budget to-day, but what of the future budgets? I have listened in this House for some constructive proposition in that regard. But I have not heard anything constructive in the amendment moved from the other side (the official opposition) which I submit is empty, querulous and petulant, harking back to the past election, which appears to be an ever-present and bitter memory. I have heard nothing constructive from the hon. leader of the Progressives (Mr. Crerar). During the
course of his speech he told us he had some constructive suggestions to make. He did refer to construction work in the past, but I listened in vain for something constructive in his amendment. He was purely critical and had nothing, with one exception, to offer. He did not offer any suggestion as to how the vast sums of money that had to be raised annually in this country were to be raised under his amendment. We are annually going back financially. In 1921 we had added a debt of $50 on every family in Canada. In 1922 we propose to add $75 a family. This cannot continue. It must end somewhere. What of next year? Are we going to make any provision for the creation of a reservoir of wealth from which we can draw to meet our needs? We must do something definite. In this country there appears to be a growing tendency to take a grumbling attitude. Everybody is against something; apparently nobody is in favour of anything. That is the attitude apparently of every applicant who besieges the Minister of Finance to lift the burden off his back and "let George pay it." We have farmers from the West wishing to lift the burden from their shoulders to put it upon the back of the rest of the community. There must be created large reservoirs of wealth to pay the debt and lower the insufferable burden of taxation. Wealth is not created by budgets nor by resolutions of Parliament. There is only one way in which wealth is produced, and that is by labour 'applied to natural resources. Providence will not do it. We cannot sit here and wait for rain and favourable climatic conditions to produce wealth. We cannot be like the fable of the frog that sat on the rock with his mouth open waiting for the flies to fly in. He waited there long and grew emaciated and finally died. We have got to do something constructive, if we are going to take care of the heavy taxation of this country. We must not, like Victor Hugo's toiler of the sea, sit on the rock and allow the waves of financial distress to sweep over and destroy us. Providence always sides with the energetic and the capable. Canada is a country of tremendous resources. It seems like tautology to harp and dwell upon this. There is not a man in this House who does not believe that this will be a great country; that it will be a populous country; that it will have diversified industries, large cities; and that, in hundreds of years to come it will be one of the great nations of the earth. Of course, we all believe

The Budget-Mr. McMurray
that, and I submit the great chieftain of the Liberal party, Sir Wilfrid Laur-ier. was right when he .made the prediction that the last century was that of United States and the present century will be that of Canada. The Americans believe that, and the Americans believe in the resources of this country. The hon. Minister of Finance was able to go to the city of New York in the United States and arrange a large loan at a reasonable rate of interest. The other day a friend of mine from Chicago, who had a small sum of money to invest, told me he went to a broker's office, asked for a suitable investment and the broker suggested bonds in a Canadian municipality. His friend asked him if he considered that a good investment and he said, "Certainly". He said that Canada was in the same position to-day that United States was 50 years ago. When the Liberal party went into power in 1896 things were in a bad shape in this country. There was unemployment, the West was unpopulated. There were no cities or towns there worth while. Times were bad and the people were leaving our country as fast as they could. There was blue ruin abroad in the land. The policy of the Liberal Government was that of a keen, active, energetic immigration policy based upon a sound business system. When Sir Clifford Sifton-then Mr. Sif-ton-became Minister of the Interior, he inaugurated an active immigration policy, and a complete revival followed. The West, which was practically a large barren prairie at that time, opened up to thousands and thousands of settlers drawn from all parts of the world. Cities sprang up; industries became active throughout Canada; unemployment disappeared; railroads were built. And that prosperity continued unremitting until 1914, when the war broke out. Since then, that policy has been dropped. Under that policy the manufactures of Canada increased six hundred per cent in twelve years; under that policy the population of Canada increased 40 per cent in twelve years; under that policy the total trade of Canada increased 400 per cent in twelve years. If that policy had been continued, and had not the war intervened we would probably have had in this country to-day, instead of 8,000,000 people, some 15,000,000 people. That policy was halted by the war, and it has not been revived. That policy should, in my humble opinion, be revived instantly. It was the policy that was making us great, prosperous and wealthy.

Sifton was the Canadian Columbus who discovered Canada to the people of the world.
We now have the railroads built; we have the elevators built; we have the mercantile marine; we have the large manufacturing plants created. The stage is all set. All we want is the strong hands and courageous hearts to produce the wealth and "prosperity that we had before, to create that reservoir of wealth of which I have spoken, to secure in this country a body of wealth that can be taxed to take care of the great indebtedness that we must meet some time or another, and to do away with our annual deficits. There must be more shoulders to carry the burdens, and in that way alone can they be got. There are to-day in western Canada lands in unlimited quantities. The roads are built; the railroads are built; the schoolhouses are there; the municipal organization is ready. These lands lie within from twelve to fifteen miles of the railroad. There are some 12,000,000 acres of them along the line of the National Transcontinental from Winnipeg to Edmonton; there are 25,000,000 acres of good arable land in northern Ontario and northern Quebec adjacent to the railroads. In my opinion, there never existed a more favourable opportunity of getting desirable immigrants than exists to-day. Throughout Europe, by reason of the great war, there is great disintegration. Thousands of people there of capacity and ability, who have been disheartened and broken by conditions in that land, would hail the opportunity of coming to this new land with their sons and daughters and starting anew. That this is not a mere idle phantasy, we have the case of Australia to prove. Australia has actually embarked upon a policy of spending $250,000,000 in an agressive immigration policy to bring the people, particularly the British people, to their country, to help develop its resources and to pay the large burden of debt which the Australians, like ourselves, have to labour under. Not only is this true of the Australian Commonwealth itself, but it is true of each and every independent member of that commonwealth, such as New South Wales or Queensland; they are all actively engaged in that immigration policy. We can go out into the world to-day: we can go to Great Britain and we can get 'the best of her people; we can get the Scandinavians, we can get the people of Europe. From my experience of western Canada, an experience of considerable length, I am not one of those who are opposed to the intro-

The Budget-Mr. McMurray
ductio'n into this country of the peoples of Central Europe. Iif I might be pardoned a personal allusion, I have lived in western Canada for some twenty-six or twenty-seven years. I came to that country when it was more or less practically unsettled. There were no cities there except the city of Winnipeg. I have seen the effect of immigration. I saw the hardy people of Central Europe come there with their ox-teams and go out on the prairies. As I have stood on the ridge looking over miles of country in the summer time, I have seen that brown prairie turned into black ploughed land. I have come a year or two afterwards and seen that land in waving fields of grain. I have seen those people go to that land, dig their homes out of the ground, build their sod homes and sod stables, and I have seen them grow rich. To-day their children are going to our schools and colleges; they are competing with the best that we have in the West. In the province of Manitoba, in the high schools, I understand that 18 per cent of all the students are descendants of these people from Central Europe. If there is one weakness that the English-speaking Canadian possesses above all others, it is his sense of superiority to those of other races; he is inclined to look down upon the people of other extractions. But as regards thrift, industry and capacity for hard and continued labour, I do not think he is the equal of the people of Central Europe. The coming of those people was the result of the policy I have described. I have given only one instance out on the prairies; but those people did not get the 'best land of western Canada. They were turned to the wooded districts and to the swamp lands. Out from the city of Winnipeg, some thirty miles, is a settlement of Bohemians who went into a district that was considered practically worthless. To-day it is one of the most valuable districts in western Canada as regards the price of land. Those Bohemians made wonderfully fine settlers. They are cleanly, industrious, with a turn for music and painting, and if one goes down to a place called Ladywood, one will see every sign of thrift. Their condition reminds one of the story of Washington Irving's " Sleepy Hollow," where the schoolmaster went to court the old Dutchman's daughter. He admired the turkeys and geese and all the live stock around the place, the apple orchard, all overflowing with evidences of thrift and prosperity. That is the story of those people. Throughout western Canada, I have never known at
any time the foreign people to ask for help or assistance. They do not need it; they are capable, by their thrift and industry, of baking care of themselves. If this active immigration policy is entered into, it will >in a very short time solve our railroad deficits. I have this upon the statement of one of the ablest authorities on railway rates in Canada, a statement given a short time ago, not many miles from this House. He pointed out that the doubling of the production of grain in western Canada would settle the railway question instantly. I was pleased to hear the hon. member for Last Mountain (Mr. Johnston) advocating an immigration policy. I was doubly pleased to hear the hon. member for South Renfrew (Mr. Low) the other night referring to the necessity of an active businesslike immigration policy, and particularly to hear him speak of the necessity of stirring our agencies in the United States into keen and active work. Some years ago, in the city of Winnipeg, the large real estate offices were busy bringing thousands and thousands of settlers from the United States to western Canada. Practically every real estate office in the United States was a Canadian immigration office. But that is not the story now. One hundred thousand families of farmers settled in western Canada would produce enough added wheat in the next six or seven years to take care of the annual deficit on the National Transcontinental Railway. I believe that this is the view of the business men, and the men of standing in Canada to-day. I have made a point of discussing it with various persons I have met in different parts of the country, and I have rarely met any man who did not think that the solution, and the only solution, of our present unhappy situation is to bring the strong hand and the stout heart of the capable and willing immigrant wherever he can be secured to develop these resources of ours that are idle. Sir Clifford Sifton a short time ago, speaking in Toronto, advocated a keen, decisive, active immigration policy. He dealt with the question of our people leaving Canada, and the hon. member for Marquette (Mr. Crerar) bore out his opinion a few minutes ago in his speech when he said that the men who were leaving Canada were the skilled artisans and the residents of the cities. It has been our mistaken immigration policy in the past that we have


An hon. MEMBER:: Where was that?


Edward James McMurray: Touchwood Hills.
The West was not built on dollar wheat I would remind my hon. friend. You will see as fine farm houses and buildings in the West as anywhere in eastern Canada. I believe we are to-day in the position of the teeter-we are about at the dead centre, prices are going down and prosperity will return. We Will shortly pass through this valley of depression and emerge again on the tableland of prosperity where we were five years before the war came.
Throughout western Canada there are holders of a vast amount of victory bonds. I know farmers who own as much as $20,000 and $25,000 worth of those bonds-dug out of the soil.


Mr. FORKE:: Do you know that I have sold my victory bonds during the last two or three years to keep my farm going?

The Budget-Mr. McMurray


Mr. BROWN:: So have I.


Edward James McMurray: That does not disturb my argument at all. You may have been obliged to do that. I will grant you that last year was very hard on farmers. I farm myself and I know that. But I believe that it is only a temporary condition, and that with lower freight rates

a great desideratum in western Canada-lower ,wages and lower prices of commodities we will be back where we were before the war; in a word, we will be prosperous again.
It is argued that our immigrants must be from the British Isles, that they must be English speaking. I submit, Mr. Speaker, that that is not the test at all. What we want are men capable of earning a living as agriculturists and who will grow into the common life of the country. Many of our people in the province of Quebec cannot speak English at all; who will say that they are not just as good Canadians as those who can speak English? For many years throughout this country people were found-and they are found now, I believe', in some parts-of Scotch extraction who talked Gaelic. They were and are good settlers; and I maintain, therefore, that a knowledge of the English tongue is not a necessary standard. It is not essential that these immigrants should be of English-speaking extraction.
Then, there is an objection against the foreign-born man that he will not become Canadian. I think it is -rather a -hasty view that if the foreigner does not talk our language in ten or twelve years he will not become part of the national life. The building up of a nation, Sir, is a matter of slow growth; it is a matter not of years, but of decades. If these people are thrifty, industrious, courageous, they will in the years to come develop into a solid Canadian people. And it is a scientific fact that from the mixing of nationalities a more competent, more virile race is bound to issue; we see instances of that in the United States.
Then, there is another argument-and it will recur to my labour friends in the House-that the introduction into this country of a large body of immigrants would be injurious to labour; would be detrimental to those of our people who are now idle; would add unemployment to unemployment. I do not believe that for an instant; if I did, I would not be here advocating the policy that I do. In fact, I think the very opposite would be the effect. With agricultural immigration
r Mr. Me Mu rray. ]
into this country taking place, a home market would be created for the products of our factories. If 100,000 families were settled to-day upon the plains of the Canadian West, the result would be the giving of employment to large numbers of men in the annual production of some $50,000,000 worth of goods. Toronto, Brantford, Hamilton

all the cities of eastern Canada in fact-were stung into life under the immigration policy inaugurated by Sir Clifford Sifton following 1896.
There are those who tell us that we should follow the policy of the United States which allows not more than three per cent of any given foreign population to come in during one year. But that was not the policy of the United States when they needed settlers as we need them. After the American Civil War the people of the world were welcome to go to the United States, make their home there and assist in the building up of the great population and the great wealth that that country now possesses. We are now more or less in the situation of the people of the United States at that time, and if we are to build up a population; if we are to create a body of wealth, we must do it by the application of labour to the soil; and we must have the people of the world here to help us do it. They are to be had; they will come, and come gladly. We are not bringing them here to pay our taxes; their taxes are heavy where they are. They will come here and enjoy prosperity, as thousands of their countrymen have done in the past. Nor are we bringing them to a country that is, or should be, despondent. The financial situation of Canada, while it is bad, is fairly good compared with that of most other countries. I take the opportunity of quoting briefly from an influential financial paper published in the United States. It says:
Canada has her troubles. They are the lesser problems of resumed growth, not of reconstruction. She has no war currency to deflate. Her budget practically balances. In foreign trade her cash position is stronger than a year ago. Her production increases. No other country in the world can poimt to the combination of all these factors in January, 1922.
If the course of exchange be the true augury of 1922 eventualities, the Canadian outlook is 100 per cent better than a year ago. The new year opened with Montreal dollars at a 5 per cent discount. The old year began business with Montreal dollars worth 85 cents apiece in New York.
Actual gain in cash position of Canadian foreign trade is stronger by $150,000,000 than 12 months ago. Bath exports and bank clearings have declined less than our own.

The Budget-Mr. Sutherland
Immigration* sets in. Building revives and building costs decline. Production increases. Where is the outlook better or as good?
Now then, what will be the result of an active immigration policy in this country? To-day we have idleness in our cities. We have an ever-increasing annual deficit. We have diminishing railroad returns; we have an idle merchant marine, and apparently we have a despondent agricultural population. With the production of more wealth in the country; with a larger population, there must in every way be created a larger body of wealth. Our railroad situation will be improved; freight rates will be reduced for the western farmer; the annual deficit will be more or less wiped out, and lower taxes will come for all. As I have said, the people of this country are looking forward to the adoption of such a policy as this. Mr. Sifton wasted no time on statistics and red tape and inefficient government employees. He went to get immigrants of the right type by the shortest, most direct methods- exactly the methods that would be adopted by an ordinary common-sense variety of business man, and the greatest prosperity Canada has ever known immediately followed that policy.
What we want at this time, I submit, is a courageous, active immigration policy. Without it, I do not know how we can get on. We require political courage-we owe it to ourselves; we owe it to the poor and to the unemployed; we owe it to the world. We are entitled to enjoy better things. With an active immigration policy; with settlers flowing into this country as they did from 1898 to 1912, I submit, that ultimately there shall come peace, prosperity and happiness; there will be the evolution, slowly but surely, of a great national type, drawn from the kindred nations of the earth, developed by hardy toil in the invigorating climate of Canada, so that in the centuries to come one of the great and distinct races of the earth will be known by the name Canadian.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Mr. DONALD SUTHERLAND (South Oxford) :: Mr. Speaker, the budget proposals of the Minister of Finance always constitute one of the most interesting features, if not the most interesting, of a session of
Parliament, and in view of the fact that this is the first session of a new Parliament, summoned on the advent to office of a new government, the present budget is of much more than usual interest not only to the members of this House, but to the country as well. Some hon. members may become somewhat impatient at times owing to the length of time taken by a budget debate. That is frequently the feeling of new members of Parliament, but the practice has, however, the endorsation of old, experienced parliamentary leaders, who consider it very valuable and who believe that the time given to the budget is not lost, but, on the contrary, is very usefully employed.
Under present conditions the budget must of necessity interest every one in this country to a very marked degree. We are experiencing at the present time a condition of affairs in this country, and it is universal throughout the world, such as has not existed before during the lives of those now present, and it is a question whether during the whole history of the world such a condition has been experienced. During the years from 1914 down to the end of 1918 practically the whole wealth of the world has been destroyed-blown up, burnt out, absolutely destroyed-leaving nothing except heavy liabilities. That is the condition of affairs that is confronting this country, as well as the rest of the world, at the present time. It is, therefore, not a theory that we are confronted with, but an actual condition of affairs with which we must deal to the best advantage of our people and of our country. Theories do not count for much under such conditions.
I thought as I listened to some of the addresses which have been delivered during this debate that some hon. members had lost sight of the difficulties in which this country finds itself and of the tremendous efforts which must be put forward by our people. I thought as I listened to the criticisms with regard to the budget, the amendment, and the amendment to the amendment which has just been moved, that possibly some hon. members were losing sight of one very important feature of the situation. But, fortunately for us, or unfortunately, it may be, we have in the Minister of Finance (Mr. Fielding) one of the oldest parliamentarians in the public life of this country. The Minister of Finance brought down in this House on the 23rd of May his sixteenth budget. That is something very unusual; something which I doubt will ever be repeated. I do not believe it will ever be repeated under similar conditions. The

The Budget-Mr. Sutherland
Minister of Finance comes back here a member of the new Government installed in office about six months ago, after ten years in opposition, with all his experience and all his ability, and he has presented this budget to Parliament, and it is now open for consideration and any suggestions which hon. members may have to offer.
It is remarkable how frequently we hear hon. members on the Government benches offering excuses for the budget which is now before this House, saying that it is not the budget which might have been expected owing to the fact that the Government have been in office for only a short period. The hon. leader of the Progressive party (Mr. Crerar) also in his address to the House this afternoon excused the Government for not including much that he thought might have been in the budget, and said that he was not so much concerned about this budget as the one that would be presented in about a year from now. Under certain conditions there might be some justification for such excuses, but as the Minister of Finance has returned to power in full possession of his faculties, to a greater degree, indeed, than many men years younger than he is-and frequent references have been made to his experience and the long service he has rendered -I say there is absolutely no excuse under those conditions, because he has been in touch wiith the public life of this country during the years when he was in opposition.
We know that during the last election the Government professed before the people of this country to have a policy which they were anxious to put into effect if they were placed in a position to administer the affairs of this country. Yet in spite of*that we have presented to us to-day a budget which does not carry out to any degree the promises and pledges which hon. members who now occupy the Government benches made a few months ago when they were appealing to the people of this country. Is it a small matter to break faith with the electors of this country so quickly or at any time? Is it sufficient justification for that breach of faith to say: Oh, we have only been in office for a short time. I thought as I listened to the hon. member for Marquette this afternoon that he also was anxious to justify the Government and to find some excuse for not voting for the amendment censuring the Government for their breach of faith with the electors. What does that amendment say? After pointing out the manner in which the Gov-

ernment had failed to implement their promises and pledges it concludes with this paragraph:
That the making at such solemn pledges, the utilization of them to secure support, and their flagrant violation after the attainment of office reveal a disregard of political honour and tend to lower the standard of public life.
If it is true that the Government have disregarded their pledges and promises, surely there is something to be said for censuring the Government for that breach of faith, but I have looked over the amendment to the amendment which has been moved by the hon. member for Marquette, and I find that the substance of it is this:
The budget proposals of the Minister of Finance now brought down, depending, as they do, mainly on the principle of protection with respect to the tariff, are wholly inadequate to implement pledges of legislation that have been given. This House is of the opinion that the principle of protection, as a basis for a fiscal policy in Canada, is unsound and not in the best interests of the Dominion.
Hon. members will notice that the hon. member from Marquette has not a word of censure for the Government with regard to their breach of faith with the people of this country. It is apparently a custom that has never obtained in this country to move an amendment to the amendment, and, consequently, the hon. member from Marquette must have been aware of this, and had been evidently looking for some ground upon which to justify his motion. I am not altogether sure in my own mind as to whether he expects his right to move that amendment to be sustained by the Chair. The fact that ever since Confederation no such motion has been entertained in this House has established a custom, which would not, I think, be very lightly cast aside by the Speaker of this Parliament. However, I do not intend to deal with that, but I would like to call attention of hon. members to statements that have been made with regard to such breaches of faith or confidence on the part of those who have entrusted the reigns of government to a political party. Hon. George Brown in his day stated:
If, Sir, a public man avows certain principles, agitates those principles, and seeks to overthrow the government of the day and establishes those principles, and if, when he attains power, he laughs at his principles, and casts his professions to the winds, he is aiming a blow at public morality.
This was the view of the Hon. George Brown in his day with regard to promises

248S
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made by political parties. Is it possible that we, in this age, can afford to he less strict with regard to such matters than the public men of that day, or is it possible that the public conscience at the present time can be abused and violated in that respect more than in those days? We have also the statement of the Right Hon. the Prime Minister (Mr. Mackenzie King) a year ago in this House. On 15th of February, 1921, in moving a motion in this House he stated:
What is it, Mr. Speaker, that works havoc in human lives, that destroys the noblest of friendships, that blights all that is most sacred in our human relations? It is the loss of confidence that comes through disillusionment, through the broken pledges the shattered ideals, the lost visions, the vanished faiths, cruel, indeed, it is when that breach in confidence comes between, man and man, between friend and friend, between race and race, between nation and nation; but when it comes beftween a people and its government, there is no saying what injury it may ultimately work.
Is there nothing blinding in conscience and in honour between those who rule a people and those who have permitted them to be ruled.
These are the words of the Prime Minister only a year ago in this House, and yet we find to-day that the platform of the party of which he is the leader is absolutely being ignored in the budget which has been presented to this Parliament. We have also heard hon. members opposite expressing their views with regard to the policy of the Liberal party, not only to-day, not only in the past, but also what it is going to be in the future. We had a few days ago the hon. member for Brantford (Mr. Raymond) declaring in this House that the Liberal party in this country was not a free trade party, that they had never advocated free trade and that he did not expect they ever would. On the following day the hon. member for Brome (Mr. McMaster) rose in his place in this House, argued strongly in favour of the very thing that was condemned by the hon. member for Brantford, and strongly advocated free trade in this country. Then the hon. member for Hants (Mr. Martell), I think it was, interrupted the hon. member for Brantford, declaring that he was in favour of a free trade policy. We have also witnessed ministers bringing their estimates before Parliament submitting them to the consideration of this House, moving to have them adopted, and another hon. member of the Government moving to reduce them by $50,000 or $100,000 or
$400,000, or whatever the amount may have been.
I question whether there has ever been in the history of this or any other country, a similar policy adopted. It is something entirely new. It is something the people have not been accustomed to, and, therefore, it is possibly time enough for us to criticize this budget when we know what this Government is going to do with it. In all probability, when it goes into committee they will change it entirely and we will have another budget emerge from the committee that will not resemble the present one at all. I would not be at all surprised to see that happen, and, in view of the statements made this afternoon by the hon. member for Marquette, I am inclined to think that possibly his views will prevail with regard to the policy of the Government. We have also had-I will not say the spectacle-but we have had the very amusing experience of witnessing the hon. Minister of Finance, metaphorically speaking, chastising some of his colleagues in the Government very severely in the presence of hon. members of the House. We have seen that done in the case of the Minister of Labour (Mr. Murdock) and a little later on our genial friend the Minister of Agriculture (Mr. Motherwell) subjected to a similar castigation by the Minister of Finance.


Mr. MOTHERWELL:: It did not hurt me.


Donald Sutherland: The hon. member says it did not hurt him, but it has been noticeable that he has been very quiet, and that his voice has scarcely been heard since in this Parliament. It must have had a considerable effect upon the Minister of Agriculture. I was inclined to agree with the Minister of Agriculture, and I could scarcely understand why the Minister of Finance should become so annoyed and exhibit the temper which he did on that occasion. It is quite evident that the Minister of Finance is determined to have his own way in the Government, and if he decides to go through with this budget as it is, undoubtedly it will go through, but if other counsels prevail, and they overcome the views of the Minister of Finance, we do not know what the result will be.
I have already referred to the views entertained by hon. members opposite; some of them are extreme free traders and others are strong protectionists; in fact, we knew very well during the recent

The Budget-Mr. Sutherland

campaign they had practically a policy to suit the requirements of every constituency. This was the policy pursued by the Government throughout the campaign, and, as far as their platform was concerned, I do not believe that they paid very much attention to it. I was of the opinion, all through the campaign, that there was a tacit understanding between the Liberal party and what is called the Progressive party that they were out to defeat the government. Judging frcxm things that have happened since this session has opened, I have not seen any reason to change my views in that regard.
In 1920 a by-election was held in western Ontario, and the present Prime Minister (Mr. King) when he was interviewed on that occasion by a correspondent of the London Advertiser, made a statement with regard to the prospects during the next general election, and this statement was made in reference to a trip which he had just had through western Canada:
The people were most anxious to hear the trade policy of the Liberal party outlined. Of course, a large part of the audience was formed by farmers, who are more or less aligned with the new party, but they gave us a most cordial welcome just the same. Their policy is essentially Liberal, and it was quite plain that they realized we must stand together if we are to get results. The National Liberal-Conservative party is devoting all its efforts in an attempt to bring about a division of the farmers and the Liberals, but their success along these lines has not been very apparent.
That may be quite true; but at the same time, it is evident that every discordant element in this country was lined up with the object of defeating the late government in the last general election. After the elections were over, a different atmosphere prevailed, and this was indicated by the following statement made by the hon. member for Brome (Mr. McMaster). He said: "After the fight is over, why do you say anything about what took place?"
A year ago the present Minister of Finance referred to a speech that was made in the Wesit by the leader of the official Opposition (Mr. Meighen). The Minister of Finance quoted Mr. Meighen as having stated at Winnipeg:
Mr. Fielding has time and again given his adherence to the protective principle, and never in language more unequivocal than employed in recent years.
The Minister of Finance stated:
My right hon. friend is mistaken. I never gave any adherence to the principle of protection. ,	. If I had to choose between the
two principles by all means I would start from the standpoint of free trade.

That was the statement made by the Minister of Finance on that occasion. The year before in this House, he said, and he was evidently preparing the people of this country for what has taken place:
I do not even think we can expect to get a safe and sound tariff policy by a too rigid adherence to every line and every letter of the tariff platform. I think myself that we will find that we are all prone in framing platforms to put things perhaps a little more strongly than is wise, and we all find when we come to the responsibilities of office that we have to modify our views.
The following day the 'hon. member for Brome in this House used these words in a most vigorous speech:
Mr. Speaker: Protection as a policy for this country is not only dead, but after the next election it will, as Disraeli said, "be damned!"
Those were his views with regard to his policy at that time. The hon. member for Brome, so emphatic and so satisfied in his own mind, even ventured into the field of prophecy on that occasion. We have had further statements with regard to the policy of the Liberal party iby those who, I think we might assume, ought to know what they are talking about. In 1907 there was a proposal before the House to reduce the duty on agricultural implements, and the then hon. member for Souris moved the following amendment:
That the committee reconsider item 445 and that it be amended by striking out the figures 17 i per cent in the general tariff and inserting in lieu thereof the figures 10 per cent.
This is in relation to the duties on agricultural implements that my hon. friends to the left have been advocating so strenuously. What did the Minister of Finance (Mr. Fielding) have to say on that occasion, although a year ago and, indeed, whenever it suits his purpose, he states that he is absolutely opposed to protection and that he favours the idea of free trade? The Minister of Finance spoke on that occasion, and you will find his words quoted at page 5621 of Hansard of that year:
Mr. Fielding: .... by a careful calculation, we are advised that the drawbacks we allow are somewhat less than the disadvantage under which the manufacturer is placed by the reduction of the tariff	Even suppose for a
moment that he got everything free and had a duty of 17J per cent on the implement, would that be an extravagant duty as things go in this country? .... I believe this proposal of the hon. member for Souris, if adopted, would do an injustice to an established industry. . . . My belief that if this motion were passed, we would strike a severe blow at one of the great industries of the country. I believe the Inter-

The Budget-Mr. Sutherland
national Harvester Company would find it to its interest to close up its business in Hamilton, at least so much of it as is devoted to mowers and binders, and have them made at the American branch and bring them from the United States. The factory in Hamilton is an American concern. With a moderate duty we have induced American capital to come into Canada and to establish that great industry, and after we have brought it in and established it in Canada I believe that if we were to pass this resolution the company operating that industry would find it profitable to close the Hamilton factory and bring in goods which they make in the United States.
This was the view of the Minister of Finance on that occasion, when hon. members in this House were asking to have the tariff reduced on agricultural implements. The Hon. Mr. Paterson on that occasion stated:
I do not disguise the fact that we propose to give these people nearly the amount of reduction in duty that has been made. For it must be remembered that 175 per cent is no more than a revenue tariff.
The hon. member for Brome the other day was dilating upon the traditions of the Liberal party. I wonder what he has to say with regard to that statement by Hon. Mr. Paterson:
175 per cent is no more than a revenue tariff.
It is not approaching a protective tariff at all. Yet we listened this afternoon to the hon. member for Marquette (Mr. Crerar) and the other day to the Minister of Finance, claiming that the people of this country made a terrible mistake in 1911 when they did not accept the proposition which was made to them by the government of that day and adopt the reciprocity pact of Messrs. Fielding and Paterson. We have heard that during the election campaign, from every platform where it suited their convenience to advocate such a policy. What are the facts with regard to that matter? If you had the tariff that is adopted under the reciprocity arrangement or agreement entered into by Mr. Paterson and the present Minister of Finance on that occasion, you would have to increase the duties on agricultural implements all along the line very materially, and you would place on the free list everything that the farmer raises without his receiving any corresponding advantage. Do you suppose, Sir, for one moment, that had that agreement been adopted by the people of this country, it would have had any influence upon the people of the United States when a change of government took place in that country when it suited their convenience to adopt
a policy which they believed was in their interest? Have they in the past shown any regard or consideration for the interest of this country? Have they not always placed their own, first, last and always? You cannot blame them for doing so. They are looking after their own interest and they would have done so, in any event because this agreement was not a treaty or binding; it was termed simply a pact, which might be denounced at any time by either party to it. We should have been compelled to develop new channels of trade again just as we did in 1866, after the treaty of 1854 had been denounced by the United States government. There were people in this country in 1911 who had a distinct recollection of what took place on that occasion and they were not going to be led into another trap of that kind, when conditions indicated in no uncertain manner the fact that the agreement was more in the interests of the United States than of Canada.
Under the reciprocity pact the duty on waggons was 22J per cent, and we reduced it to 20 per cent. The hon. member for Marquette (Mr. Crerar) claimed that he had a cause to resign from the government in 1919, because he differed from it on its tariff policy. The other tariffs under reciprocity were hay-loaders 20 per cent, reapers 15 per cent, binders 15 per cent, mowers 15 per cent, and windmills 20 per cent, reduced to 17i per cent. What about cement? We have not heard much during this debate with regard to cement. But, oh! how it figured during the election campaign. There was a provision in the reciprocity pact for a tariff of 11 cents per hundred pounds on cement, but the government that succeeded the administration of that day reduced that tariff to eight cents per hundred pounds, at which figure it has remained ever since. These were things that were done for the benefit of the people of this country by the governments after 1911, but they were not provided for in the reciprocity agreement of 1911. The duty on binders, mowers, and these other things was reduced to 12J per cent instead of 15 per cent as proposed in that pact. There were some other things that farmers are vitally interested in that were not provided for in the reciprocity agreement; but to 'hear some members of the Progressive party one would suppose that any one who does not come from the prairie provinces would 'be encroaching on the prerogatives of true farmers to mention these things. We have heard so much about
The Budget-Mr. Sutherland

\
farming from these gentlemen that apparently there is only one class of people who are qualified to call themselves farmers, and that is the grain growers of western Canada. However, I shall mention some of the other articles in which the farmers of Canada generally are very much interested. Butter was made free under the reciprocity pact. Now, during the past year upwards of two million pounds of butter were brought into this country from Great Britain under the British preference, to say nothing of millions of pounds imported from the United 'States. Does the farmer of Canada not obtain any advantage from a protective tariff in view of these importations? The United States put their tariff on butter up to eight cents per pound, and yet hon. gentlemen in this House who call themselves farmers say they do not need protection, advocate that it should be done away with, and declare that we should have everything free.


An hon. MEMBER:: Hear, hear.


Donald Sutherland: An hon. gentleman says: "hear hear." Does he know that 9,000,000 dozens of American eggs came into this country last year with a tariff of three cents per dozen? We cannot underpresent conditions produce enough eggs to supply the requirements of this country. Hon. gentlemen say it is more profitable to grow Wheat than to bother with these trifling things, and so we import all these eggs from the United States. Take apples, for instance. There was a tariff of 60 cents per barrel on apples, and it has been increased to 90 cents per barrel; and in spite of that increase, during the past year, even though it was the smallest importation of this commodity that has come into the country, upwards of 110,000 barrels of apples were brought into Canada. If I had time to go over the list of articles and to show how many millions, and tens of millions of pounds of beef, pork, bacon and things of that kind have been imported into Canada from the United States, the wheat growers of the west would probably appreciate the fact that those who are carrying on actual farming in Canada do not ask that the tariff shall be removed, but, on the contrary, are strongly in favour of having it increased on many things that farmers are producing to-day in large quantities.
This is absolutely essential under present conditions. As I said at the outset, we are confronted to-day with a condition and not a theory. There is throughout the whole world a tendency on the part of most na-
[ Mr. Sutherland. ]
tions to erect tariff barriers for the protection of their own people from the cheap labour of foreign countries, and to establish their own industries in order to provide employment and a home market for their own people. But hon. members say: "Oh, but we are going to blaze the way for the whole world; Canada is going to set an example that eventually will be followed by all other countries." The hon. member for Marquette this afternoon, venturing into the field of prophecy, which is not always a very safe thing to do, stated that even in Great Britain the protective tariff which has been adopted will soon be discarded. I am inclined to think, however, in view of the statement made by the Prime Minister of Great Britain a few days ago, that that right hon. gentleman is not at all so sanguine in regard to that probability, for he has pointed out that the tendency to-day in all countries is to impose tariffs for the protection of native industry. While he deprecated the fact, nevertheless, it existed and had to be faced. These countries that are protected, in order to maintain an even price at home in proportion to the costs of production, ship out their surpluses. This may be an unfortunate condition of affairs, but it is the actual condition that prevails.
That leads me to a feature of the budget which I was somewhat surprised to hear the member for Marquette speak of in the way he did. I refer to the fixing of the rate of exchange on imports into this country, including German imports. The hon. member for Brome (Mr. McMaster), dealing with this matter the other day, referred to small nations of Europe that had adopted the protective tariff, and he was quoting the imports into those countries and giving the rate of duty collected on the total imports. He did not, however, give the rate of duty collected on the articles upon which a duty was levied. There were many millions of dollars' worth of free goods taken in there, and had he given that he would have shown that the protective tariffs in those countries were higher in regard to many things than is the tariff in Canada. I shall refer briefly to what has been done in the United States. The hon. member for Marquette said that the bill dealing with this question of the exchange on imports was put through the American Congress a year ago, and that there is no possibility of its going into effect. Let me inform the hon. member for Marquette that this bill had its second reading on April 11, 1922, and was referred to a com-

The Budget-Mr. Sutherland
mittee of the House of Representatives, and is now under discussion in the Senate. Hon. W. E. Andrews, who was for eighteen years an auditor of the treasury department of the United States, and is now a member of the House of Representatives, on April 12 of this year, referring to the rate of foreign exchange pointed out, not with regard to any other country but specifically with regard to Germany, how absolutely impossible it would be for the United States to compete against the goods produced in that country under the depreciated currency of Germany. Yet the Minister of Finance (Mr. Fielding) and the member for Marquette refer to these as most iniquitous measures, and display indignation when the hon. member for West York (Sir Henry Drayton) in moving the amendment refers to the budget proposals as a preference of 21 per cent to Great Britain and free trade with Germany. Some expressions of indignation had been uttered with regard to that statement, but I think the hon. member for West York (Sir Henry Drayton) was well within the mark when he made it. I have here the report of an address delivered by Mr. Charles M. Schwab at a banquet tendered to him by the New York Chamber of Commerce, during the course of which he stated:
Is it possible that after having won the war, we of the allied nations, with everything in our hands, will allow Germany to win the peace through the efforts of her labour?
Germany can to-day put a ton of steel in England at a price $20 a ton cheaper than what it costs England to make it. Germany is to-day selling pneumatic tools in Detroit where formerly we made machinery and shipped it to Germany to sell there cheaper than she could make it.
The difference is solely a matter of labour costs.
Railroad costs must come down, and it is in the interests of national prosperity that our government, acting through the Railroad Labour Board and every other agency, shall reduce railroad wages and bring costs down to a living point.
Now, what does the United States provide for in this bill? Section 304 (a) reads as follows:
Every article Imported into the United States, which is capable of being marked, stamped, branded, or labeled, wtithout injury, at the time of its manufacture or production, shall be marked, stamped, branded, or labeled, in legible English words, in a conspicuous place that shall not be covered or obscured by any subsequent attachments or arrangements,-
And 'so on. I will not read the whole section. But this indicates the steps which *have been already taken by the United States government to protect the country
against unfair competition. Section 315, it will be found, provides that the President may put into effect a tariff to absolutely prevent the unfair competition of imports. It has always been the custom of all governments to accept the currency of the countries from which goods are imported, but it will be seen that the United States government have taken the necessary steps to adequately protect its industries under the bill which is now being considered by the Senate of that country. So I say, Mr. Speaker, there is absolutely no justification for the Government to cancel the legislation which was passed a year ago to protect our industries. But the hon. member for Marquette states, "This is going to prevent trade, and so long as these cheap goods come in we do not care where they come from." Well, I think that anyone who has any regard for our industrial stability will not take such a view.
The hon. member also pointed out that in so far as our protective policy is concerned it is sectional and unfair and that there are many objections to it, and that the people of the West will never tolerate its continuance. He followed that up with the statement that manufacturing could not very well be established in western Canada because conditions there were not conducive to it. Well, some of us remember the predictions which were made by certain of our prominent public men years ago in regard to western Canada. When the Canadian Pacific Railway was first projected it was predicted that there would not be enough traffic to pay for the axle grease of the cars. I am inclined to think that in view of the immense oil, coal and other natural resources in the West the day will come when we shall have very extensive manufacturing industries established there as well as in other parts of the Dominion.
The hon. member for Marquette deprecated a protective tariff because of what he termed its sectional nature. Is it not a fact, although a matter for regret, that during the last few years our people have been inclined to look at matters from a sectional rather than from a national or international standpoint? Have we ever witnessed in our public life a condition similar to that which now prevails? Where did it have its origin, and what is its outcome going to be? Everything new has to be tested and tried before we can be sure of its containing any degree of permanency. We have been told that the old party system

The Budget-Mr. Sutherland
has ceased to be of service to the country, and that something else is to take its place. Well, I would caution anyone who runs away with such an idea to pay some attention to the manner in which this system came in to effect and to the fact that it has been adopted by every progressive country in the world. There were some wise people in the old days just as well as to-day, and this system which has been developed and perfected is now acknowledged by all countries except Russia as the most suitable system for self government. There can be no question as to that, and yet we find people to-day stating that they are going to upset all the old conditions and have a brand new system. Well, innovations have been tried out in different countries, but up to the present time I do not think there is any occasion to get very enthusiastic over what has happened.
When did this new party, styled the Progressive party, originate, and how? We in this corner of the House have been taunted frequently by hon. members to our left and by hon. members opposite with being a remnant of the old Tory party. I would remind hon. members that the old Tory party has to its credit achievements that are now of historic record, and that record its supporters need not be ashamed of. Indeed, in one of the most critical periods of our national existence the leaders of what is termed the "old Tory party", but really of the Liberal-Conservative party, paid very little attention to politics. They realized the danger which confronted the country, and in order that Canada might put forth her maximum war effort they scrapped the old party and by every means in their power encouraged those who were hanging back to come forward and do their duty for Canada, for the Empire and for civilization. Yes, there is a remnant left of the old Tory party, and that remnant will be heard from in the near future, when the people will appreciate what the party did during those critical times. That party will not in this House or elsewhere tolerate such a violation of pledges as we have witnessed on the part of our hon. friends who now occupy the Government benches.
The hon. member for Marquette (Mr. Crerar) was a member of the Union government which was organized in 1917. Was there any discussion when he was taken into the Cabinet as to what the fiscal policy was to be? It is true that he and several of his friends came here from western

Canada and other .parts of the Dominion and discussed with the Prime Minister of the day the conditions under which they would come into a union government, but there was never as far as we know any discussion as to tariff policy. They returned home. What happened in the meantime? The War-time Elections Act was placed on the statute book, because a war time election had to be held and we were determined to see that our men at the front should have an opportunity of exercising the franchise. Eventually, as is well known, the Liberal party were given the appointment of one-half of the election officials under that act, and the Hon. member for Marquette and his friends then entered the Union government. Now they claim they did a great thing for the old Tory party when, as they insist, it was in such dire straits.
Yes, the hon. member for Marquette became Minister of Agriculture in the Union government. This afternoon he stated that he resigned in June 1919 because of his differences with his colleagues on the question of tariff. Well, I want to remind him that greater tariff reductions, particularly in the duties on articles which the people of western Canada are concerned in, were made toy the budget which failed to meet his approval than have been made since the national policy was adopted in 1878. Those reductions were made in order to satisfy the demands of the people of western Canada. Were the government of that day not entitled to some consideration? When the hon. member tendered his resignation the day before the budget was brought down his action came like a bolt from the blue to many people, but there were others who were not surprised. They knew that negotiations had been proceeding even at that date, with a view to organizing a new political party, and that the company of which the hon. member for Marquette was president was contributing funds for the building up of this new party.
I had occasion to be a little suspicious of what was going on in view of certain appointments that were being made in my own constituency, for even during the enforcement of the Military Service Act the hon. member for Marquette took steps to see that appointees of his department were placed on the exemption tribunals.


Mr. SPENCER:: If I may ask the hon. gentleman a question? He says that the company with which the hon. member for Marquette was connected was contributing

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funds towards political organizations in western Canada. Has he any proof of that?


Donald Sutherland: I presume the hon. gentleman is a member of the Grain Growers' Grain Company?


Henry Elvins Spencer: I am a shareholder.


Donald Sutherland: Well, you will find my statement confirmed in one of the annual financial statements of that company.


Henry Elvins Spencer: I beg to assure the hon. gentleman that he is wrong.


Donald Sutherland: That is my proof. I have also the published statement that had it not been for the encouragement received from the Grain Growers' Grain Company and the Minister of Agriculture at that time, a statement that has appeared in agricultural journals in Ontario from the pen of the hon. member for Brant (Mr. Good), who is now an active supporter of the new party-


Robert Forke: Will you repeat that statement ?


Donald Sutherland: The member for Brant.


Robert Forke: Excuse me.


Donald Sutherland: I am not in the habit of making reckless statements. I have made these statements before in the presence of the hon. member for Marquette, and he has not denied them-nor can he deny them. It is somewhat significant that while the agitation was active in the country to exempt farmers' sons from military service, the then Minister of Agriculture was given the right to appoint on each military tribunal a representative of his department, and I assert that in every instance in Ontario those who were appointed were absolutely opposed to and worked against the government of which he was a member in the election of 1917.


Mr. GOULD:: If the hon. gentleman will allow me a question? You make the statement that funds were subscribed by the United Grain Growers' Company for the purpose of organizing a political party in western Canada, and you add that your statement is proven by the annual statement issued by the company. I think I am safe in stating that either you have read that annual statement wrongly or put a wrong impression upon it. I say that, Mr. Speaker, because I happen to be a shareholder-*


Mr. DEPUTY SPEAKER:: Order. The hon. member may ask a question with the consent of the member who has the floor, but he can hardly make a statement.


Oliver Robert Gould: The question I would ask, Mr. Speaker, is: What annual statement does the hon. member refer to?


Donald Sutherland: I could not give the year, but the hon. member surely could not have overlooked it, for I put it on Hansard last session. I did not take the trouble to look it up again, because it has never been called in question. I also made the statement that those who were appointed by the Minister of Agriculture at that time as representatives of his department on exemption tribunals were men who were absolutely opposed to the Union government and to the enforcement of the Military Service Act. I ask the House if that was an honourable proceeding on the part of the then Minister of Agriculture, if he was carrying out the mandate that had been given to the Union government? That happened in the London district, the Toronto district, and the Kingston district. These matters have been referred to in this House before and have never been called in question. There is absolute authority for the statement I have made.
The hon. member for Marquette informed the House this afternoon why he resigned from the Union government. It was because he differed with his colleagues on their tariff policy. What does Mr. Rice Jones, the general manager and first vicepresident of the United Grain Growers' Company say with regard to this matter and Mr. Crerar's acceptance of office? This is the sworn evidence given by Mr. Rice Jones before a parliamentary committee of this House:
At the time he, Mr. Crerar, entered the government, he was drawing $10,000, and he continued to draw on that basis. He said he would not draw any salary unless they thought he should have a nominal salary tor- acting as president. The point is that when he came down the directors did not think he would be down here very long.
Well, if the directors did not think he would be down here very long, they must have expected that the Union government would be defeated at the general election which was then pending. Fortunately for Canada the government were returned with a majority of 46, and consequently might be expected to live its full term of office.


Mr.   McM ASTER@: Will the hon. member permit a question? Is it not possible that
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the true construction to be placed on that statement is that the directors thought the Union government would redeem its promise and go out of office as soon as the war was over?


Donald Sutherland: I may inform the hon. member for Brome (Mr. McMaster) that if he was so sanguine that the end of the war was near, his view was not entertained by very many people in this country or anywhere else. The situation was becoming more desperate from day to day, and a few months afterwards the fears entertained by the former government were fully justified by events on the western front, when the fifth army division was practically annihilated. The people in those days were not very sure as to when the war would end, but rather about what might ultimately happen. Again he states:
Mr. Crerar's position at the time was that he should not draw the $10,000, but the directors decided in view of the fact that he did not figure he would be here very long that the matter would stand over.
So he figured that he would not be here very much longer, and the company did not think he would be here very long. A little further on, he states [DOT]
I think that the general view at that time was that it was very doubtful as to how long the Union government would last.
Then on page 824 I find this:
1 may state, if you will go back, that Mr. Crerar has not drawn the $15,000 because that salary was set to take effect whenever he returned to the company.
So a by-law or regulation was passed by the United Grain Growers' Limited increasing the salary from $10,000 to $15,000, but it was conditional upon his returning to the company.


Mr. MORRISON:: Might I ask what the salary which the United Grain Growers paid to the hon. member for Marquette has to do with the business of the House?


Donald Sutherland: The hon. member for Marquette informed the House this afternoon that the reason why he got out of the government was that he differed with them on their tariff policy. I am trying to show to the hon. member and the House that pressure was brought to bear upon the hon. member for Marquette by his company, and that he had either to give up the salary as president of the company or cease to be a member of the government.


John Morrison: There was never the least bit of pressure brought to bear on the hon. member for Marquette by the company.


Donald Sutherland: Then all I can say is that the sworn evidence given by Mr. Rice Jones was not in accordance with the facts.


Thomas Alexander Crerar: It is not very often that I interrupt an hon. member making a statement, but I cannot allow to pass unchallenged the remarkable doctrine or explanation, or whatever it is, that my hon. friend from South Oxford is trying to give the House. As to the statement he has just made, there is not a particle of foundation for it. My hon. friend has drawn very largely on his imagination to produce the state of mind in which he now finds himself.
Mr. McMASTER. Withdraw.


Donald Sutherland: It was in September of 1918 that Mr. Rice Jones informed a committee of this House that this regulation or condition was passed by the company of which the hon. member for Marquette is president.


Thomas Alexander Crerar: I again protest. No such regulation was passed, and when I say that I think my hon. friend should take my word.


Donald Sutherland: I am very glad to hear the hon. member for Marquette make that statement. He states that no such regulation was ever passed. I state most emphatically that I am giving the sworn evidence of the general manager and first vice-president of his company before a committee of this House.


Thomas Alexander Crerar: You are drawing an inference from the evidence that is not warranted.


Donald Sutherland: I am drawing no inference. I am giving the exact words of Mr. Rice Jones. I was a member of the committee, and I thought it was a most remarkable statement for him to make at the time. As to the hon. member's desire to serve the farmers of this country, almost one of the first things which he did was something to which I have referred on several occasions. On September 1st the Grain Growers' Grain Company and the Alberta Elevator Company amalgamated under the name of the United Grain Growers, Limited. I do not suppose he will deny that

The Budget-Mr. Sutherland
fact. The president of the new company, the hon. member for Marquette, was sworn in as a member of the government on the 12th of October, 1917. On October 25, 1917, one of the first things that he did was to grant the right to the manufacturers of a certain commodity known as oleomargarine in this country to adulterate butter. By the adulteration of butter, greater injury has been done to the interests of real agriculture in this country than most hon. members or most of the people in the country realize. Almost the next move made by the president of the Grain Growers, Limited, was to contract with the terminal elevators for the recleaned screenings at $35 per ton. The president of the company also made the statement that previous to the war the sum received for screenings was very low, hardly worth considering, about four or five dollars per ton. By this act of the hon. member for Marquette, a great injury was also done to agriculture through the spread of weed seeds.


John Morrison: Does the hon. member think this is the annual meeting of the United Grain Growers?


Donald Sutherland: If the hon. member was as anxious to advance the interests of his country as he is to defend his leader and his party, he would be rendering a better service. I am taking the statement of his leader that the reason why he got out of the government was that he differed with them on the tariff, and I have pointed out to the House that there was a greater reduction in the tariff that year than has ever taken place since the National Policy was first adopted.
The next thing the hon. member for Marquette did was to change the grain standards which permitted the millers of this country to adulterate mill feed, and that has been going on practically ever since.
The next thing he did was to be a consenting party to placing an export duty on dairy produce going from this country. I could give you a lot more things that happened while he was a member of the Government, but I am not going to trespass on the time of the House.
One of his colleagues, Hon. Mr. Rowell, in the House stated on June 12, 1919:
But I say to the House and to the country that if I was prepared, as all my colleagues, were, to support the Finance Minister in coming down to this House during this war year without any revision of the tariff, I do not believe that I am absolved from supporting him when he has revised the tariff in a measure according to the lines that I desire. I feel there is a double obligation upon myself to stand by the Minister of Finance and my other colleagues who have made a partial revision in the tariff along lines which I believe to be just and right in the public interest.
We had a staunch free trader in the House at that time, Dr. Clark, and what did the hon. member for Red Deer have to say to the hon. member for Marquette who had seen fit to resign on account of the tariff? He said:
I cannot agree with my hon. friend from Marquette. I think this is the only disagreement I shall have with him in describing the budget as a protectionist budget. I think a fairer thing would be to define it and I think history will so define it as a budget tending towards free trade.
That was the view held by the hon. member for Red Deer, and no one who sat in this House at that time will call his free trade proclivities in question. His view was that the budget tended towards free trade. The tariff was not an issue in the elections at that time. I must now leave that subject and pass on to the customs tariff.


Mr. SPEAKMAN:: Did the hon. member for Red Deer support that budget at that time which 'he characterized as tending towards a free trade budget? If he did, I should be very much surprised.


Donald Sutherland: I have given you his words. I have not looked up the vote. I am quoting from Hansard the words which the hon. member from Red Deer used on that occasion. Protection has been condemned in no uncertain tones by the hon. member for Marquette and other members supporting the Government. After listening to the address which was delivered condemning certain members of this House for not offering something of a constructive nature, what did the hon. member from Marquette have to offer to take the place of the policy which we have in this country to-day? Did he offer a single constructive suggestion? Did he intimate to this House how he was going to raise the revenue? If he did, I did not hear it. This committee of the House to which I have referred had some information from others who have been and are supporters of the member from Marquette. We had as a witness before that committee, the present Premier of Ontario, Mr. E. C. Drury. This evidence was printed and in it he gave his views on taxation. The following questions were asked and answers given:
Q. Taking your farm as a typical case, do you object to a 1 per cent separate land tax.
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A. I would not, if I were relieved of the other ordinary tax.
Q. Have you any knowledge of that being generally acceptable.
A. It is part of the platform of the United Farmers in Ontario, which was adopted unanimously at the last convention. I think that is the acceptance of the term at the present time.
By the Chairman:
Q. All other taxes being eliminated except the direct tax on land?
A. That is the ultimate object.
This is the statement made by Mr. E. C. Drury with regard to the taxes on land. Then he was further examined as follows:
Q. That platform is to tax unoccupied land?
A. No, beg pardon, to tax the unimproved value of land.
Then a question was asked by another member of the committee:
Q. Out west "unimproved land" has a different interpretation?
A. Mr. Crerar was taking that up when I left the Chamber. I think his interpretation agrees with mine-not a tax on unimproved land, but a tax on unimproved land value.
This is the method which the hon. member put forward, but he did not have the courage to intimate to the House what his policy would be with regard to that matter. This is a plank in the platform of the Progressive party, and this is the system by which they would raise the revenue of the country, not a tax on unimproved land, as some people imagine, but on the unimproved value of all lands. I have here a paper issued by the single tax people, called the Square Deal and it contains the platform of the Progressive party. It is headed:
We Claim the Earth is the Property of the Whole People.
And their proposal in this paper is that they will exempt everything that has been created by labour and that the taxes must come on the land for everything, and everything that has been created by artificial methods shall be exempt from taxation. These are the steps which, I presume, would be taken if these people were entrusted with the reins of government in this country to bring about the reforms which they are advocating. Conditions are altogether too serious in this country to take chances on any such wild schemes as have been outlined so far to take the place of the custom which prevails in this country. A free trade policy may be an ideal one if adopted in all countries, but owing to the fact that our neighbours to the south are erecting tariff barriers so high as to be absolutely prohibitive, in view of the fact that other countries are

doing the same, and that the old motherland is the country to which we must, under present conditions, look for a market to dispose of our surplus produce, it would be most suicidal to give up our markets to the surplus products of highly protected countries, which would be dumped in here at times and absolutely demoralize our own markets.
The hon. member from Qu'Appelle (Mr. Millar) made a statement in the House the other night that more money should have been raised while the war was on, that the government had developed extravagant habits, and that it was hard to get away from them. It may be that they have developed extravagant habits, but the people of this country will have to come to their senses and realize that these extravagant habits, for the time being, will have to be dispensed with, and that the obligations with which this country is confronted cannot be settled by saddling a tax on a certain class of people, and excluding all others in the community from the tax which is proposed under the scheme outlined by Mr. Drury in his evidence before a committee in this House.
Just a word or two with regard to matters contained in the budget. I notice that the doubling of the sales tax is going to be a very serious matter indeed to many of the struggling industries in this country at the present time. I am going to refer to a few of the items which are exempt from taxation, but will not mention them all by any means.
Meats and poultry, fresh; milk, including butter-milk ; cream ; butter ; cheese ; oleomargarine, margarine, butterine or other substitutes for butter; lard, lard compound and similar substances, made from animal or vegetable stearine or oils; materials for use solely in the manufacture of oleomargarine or any substitute for butter or lard.
Any of these substances and substitutes are to be permitted to come into the country without any tariff. There is to be no sales tax upon them, but, in face of that, we find a tax on one of the most important [food products in some sections of the country and one that is now used very largely by people on the ocean liners, in the mines, and by those who have to go into the interior, far from the settled portions of the country and the people generally. There are. twenty-seven milk condensories in the Dominion of Canada. Some of them are very large, employing hundreds of hands. I see that 310,858,503 pounds of milk were condensed or converted into milk powders in these factories

The Budget-Mr. Sutherland
during the past year and 105,898,450 pounds of this commodity was manufactured in the county a portion of which I have the honour to represent. A little over 34 per cent of the total condensed milk product of the Dominion of Canada was manufactured in the small county of Oxford and I hope that when the Minister of Finance comes to deal with this question in the budget, notwithstanding his strong advocacy of the exemption of the articles to which I have referred, he will still take steps to see that justice is done to this important industry which has developed in this country and in which many millions of dollars are involved. I might point out that for the county of Oxford alone last year-and it was practically, with the exception of one factory, all manufactured in the constituency I represent-the value of the product was $4,574,878. There is an excise tax of 14 per cent; it is proposed to increase the sales tax by 50 per cent, so that this will practically mean a sales and excise tax of 6 per cent on this commodity, whereas all these other substitutes for dairy products are to be exempted from any customs tariff and from the sales tax. I would ask if it is fair, when it is well known that this industry is at the present time suffering owing to the fact that there is a large accumulation of goods on hand in the warehouses of this country, to permit all goods such as are mentioned in the budget resolutions, to come into this country free of all tariff regulations and free from the sales tax, and to impose a tax of 6 per cent upon condensed milk and powdered milk in Canada. I hope, when this matter is before the House in committee, the minister will give it his very careful consideration, because many factories are at the present time finding it very difficult to dispose of their produce and to continue in business.
I am glad to see the Minister of Finance (Mr. Fielding) in his seat, because there is something to which I should like to call his attention, in view of the fact that some of the heavy liabilities that confront this country at the present time are a heritage from the government which was in office prior to 1911. We have had a considerable discussion regarding the railway situation in Canada and the need for reducing rates in connection with railway transportation, and I think every one agrees that something must be done along that line. The railway situation is one that has not developed recently. The present Minister of Finance was Minister of Finance of the government of that day when the building of the Transcontinental was launched in Canada in 1902 and 1903. The Minister of Finance and the Prime Minister of that day claimed, in their statements in the House and in the country, that all it would actually cost the people of Canada would be between $13,000,000 and $14,000,000; at least, that amount of money set aside and placed at interest would pay for -the whole Transcontinental line to the advantage of every one in this country. What did the Minister of Railways of that day have to say with regard to the proposition when it was brought into the House?
Hon. A. G. Blair: Bet me tell the House, In the first place, however, what the right hon. gentleman did not say in explanation of his course.
He is referring to the then Prime Minister.
He did not deny that there had not been deliberation; he did not affirm that the government of the country had availed itself of all proper sources of information; and had waited until they had exhausted all the means in their power to ascertain what the conditions were in the various portions of the country which the road was to traverse; he did not tell us the need which had arisen for us to jump headlong into a scheme of this kind; he did not tell us that he had summoned to his assistance the wisest counsels which the country could afford; he did not tell us that he had sought the assistance of experts in order to know what the traffic con. ditions were which would make this railway desirable; he did not even pretend to tell us that he had done these things.
The Hon. Mr. Blair goes on:
What does the right hon. gentleman mean when he says " The flood of tide is upon us, that leads on to fortune; if we let it pass it may never recur again." What does the right hon. gentleman mean when he says: "If we let it pass the voyage of our national life, bright as it is to-day, will be bound in shallows." What does the right hon. gentleman mean when he says: "We cannot wait because time does not wait." I think, Mr. Speaker, and I say it with respect to my right hon. friend that it would have been as correct if not as poetic for him to have said: " We cannot wait, because Senator Cox cannot wait."
This was the statement made by the Minister of Railways of that day who evidently had not been consulted when this scheme had been entered into by the government of which he was a member, and it is the irony of fate that the Minister of Finance of that day should be called upon to face some of the obligations which this country has had to shoulder as a result of what the hon. member for Marquette
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(Mr. Crerar) termed the "wild cat" schemes that had been launched with regard to railway construction in this country. The late government has been charged by some hon. gentlemen opposite with not managing the affairs of the railway as they should have done. The late government found that they had either to go on advancing million after million of dollars to those companies or to take them over because they had to meet those deficits annually. When the Minister of Finance claims 'before this House that these obligations are the result of war, I say that they are not by any means all the result of war conditions, but largely the result of mal-administration on the part of the government of which he was a member on that occasion. We are today in this country "paying the penalty for the policy that was pursued, for the steps that were taken upon that occasion, without due consideration, to build railways many years in advance of the requirements of Canada. This statement was made, not only by the Minister of Finance, but by the then Prime Minister in a speech delivered in the City of Toronto on October 5, 1907. The then Prime Minister stated on that occasion:
I will not bore you with figures; I will give you the figures compiled by the experts of the Finance Department, who calculate that what we would pay in interest for seven years represents a sum in cash which, if it were put in the bank today, would amount to a little more than $13,000,000, and a little less than $14,000,000. That is all we would have to pay for the construction of the road if our expectations and contracts prove to be as accurate as we think they are. I ask you, my fellow-citizens, if we can get that tremendous railway for $14,000,000 do you think that will be so very heavy a burden for the Canada taxpayers?
And so on. This was the statement made by the Right Hon. 'Sir Wilfrid Laurier in Toronto in October, 1907, with regard to the railways. On that occasion he also referred to another matter which the Minister of Finance of the present day has evidently forgotten about. I have the Toronto Globe report of the speech delivered by the Right Hon. Sir Wilfrid Laurier on that occasion:
I am proud to say that under our regime the manufacturers always sleep soundly and never fear interference with the tariff. We have made very few changes in the duty. We chiefly introduce new principles rather than make changes in the duty. For instance, one of the changes was made in 1904 when we introduced the anti-dumping clause. Why did we adopt such a policy? Why did we introduce that anti-dumping clause? We introduced it for the reason I gave a moment ago, that it was essential to the success of manu-

facturing that the man who is engaged in business should know exactly the conditions under which he would operate and we put in this clause to prevent the demolition of the market.
This is the very policy that is required in this country to-day, and which was put into effect last session to prevent the importation of cheap goods from foreign countries by reason of the depreciated currency and the almost abolition of the German mark. It is somewhat significant that the German government kept the printing presses constantly going in order to turn out these marks as rapidly as possible; and they were produced to such an extent that people in this country and elsewhere were buying them at about eight cents, and then six cents, and later on at less, and now they are worth one-third of a cent. I believe it was the intention of Germany to depreciate the value of the mark for the purpose of bringing about the conditions that now prevail, and I contend that it would be fatal to the industries here to permit German goods to come into Canada on the terms proposed, because it would put out of business those who are manufacturing the same goods in this country, and would thus throw out of employment those labourers whom we should take care of in Canada.
Now, I say that instead of $13,000,000 or $14,000,000 being the cost of the Transcontinental Railway, the total up to the present time, in my opinion, is $354,000,000. The conditions with which we are faced to-day in regard to the railways is largely attributable to the mismanagement of previous years when money was borrowed in every part of the world and the railways were built far in advance of the times. We have roads to-day in many instances paralleling each other, and it would be wise to close one where we have two, and in some instances as many as three lines. These are some of the matters that must be considered by the Government; and I would also emphasize the great need there is for rigid economy in the administration of the public affairs of the country. It is significant that notwithstanding the dismissals that have taken place in the Civil Service there should have been a very substantial increase in the cost of civil government during the present session, although the supplementary estimates have not yet been brought down. These are questions that must be seriously considered by the Government before we can hope to have any real progress in the direction of substantial economy.

The Budget-Mr. Irvine
In view of what has been brought out in this debate, Mr. Speaker, I shall have no difficulty in supporting the amendment that has been moved by the hon. member for West York (Sir Henry Drayton), because it is quite obvious that the Government have not dealt fairly by the people. They professed during the election campaign that they would adopt a certain policy, and the people took them at their word. But the attitude of the Liberal party on this occasion is on all fours with what they did in 1896. In this connection I may quote from a speech of the Hon. J. I. Tarte delivered in 1903, with regard to the professions that had been made by the Liberal party before they obtained office. The remarks I am about to quote may be found in Hansard of April 20, 1903, at page 1634:
I say It openly, I say it from the bottom of my heart, that I fully expected that the Liberal party, with which I have been connected during the last ten years, would carry out the policy it was understood in 1896 they would carry out. I am weighing my words.
I ltnow what arrangement, what understanding took place between some public men. X know what took place. I do not divulge any secrets. I know what we did in the election of 1896 in Montreal. I see within the radius of my eye public men who, at our request, came to the city of Montreal, went to the manufacturers, with the knowledge of the leaders of the party, and told them not only would the tariff not be disturbed, but it would be changed in the right direction when the proper time came. There was no secret about that. X shall not give names. There are men who hear me-X am sorry there are not more on those benches-who know that I am perfectly' right. I am out of office because I could not stay in office under the present circumstances. I have had only but pleasant ielations with most of my colleagues and have for the most of them the greatest respect. But I could not possibly stay in office when I knew that the policy we are following now is not the right policy-when I knew that understanding took place formerly.
Here was a member of the Liberal government of that day deploring their betrayal of public confidence; and I have a distinct recollection of a campaign carried on in our county at which the leader of the party and his chief lieutenants were present at that time. They preached the policy that is now advocated by hon. members to our left, practically that of free trade, or commercial union, or unresticted reciprocity, or a combination of all. Sir Richard Cartwright was for seventeen years a representative of the constituency I have now the honour to represent, and that was his slogan during the whole of that period. And here was the Hon. Mr. Tarte, a member of the government of that day, putting on record in Hansard that it was by trickery of that kind that they had obtained office, afterwards disregarding their pledges and promises. I say, therefore, that the motion of the hon. member for West York, censuring the Government for making pledges to the electors of the country which they never intended to put into effect, is a motion that should receive the unanimous support of the House. The policy of the party now in office is one that cannot find approval in the country, and I shall therefore vote for the amendment that so properly condemns it.
Mr. WILLIAM IRVINE. (East Calgary) : The members who have taken part in this budget debate have offered, no doubt, their very best advice to the administration, in full view of the situation in which the nation is placed, and with that sincerity of purpose and that spirit of patriotism which should characterize the utterances of statesmen. It would be interesting if not educational to review comprehensively the wide range of subjects that have in some remote way been related to the main theme which, as I understand it, is the consideration of the most effective, as well as the most equitable, method of raising the estimated financial requirements for current expenditures. But I refrain from reviewing the debate in any hypercritical mood, and choose to offer my humble suggestions, as other hon. members have done, in the hope that those who occupy the highest office of the state, as well as the hon. members of this House, will give me a hearing and at least sdme reasonable consideration.
It is indeed a matter worthy of the highest congratulation that the Minister of Finance (Mr. Fielding) has had the singular honour to present to Parliament his sixteenth budget; and I am sure that the people of Canada highly appreciate the distinguished services which the minister has so generously given during his many years of public life.
Adding my congratulations to those of the many hon. gentlemen who have preceded me in debate, I wish to state that it is my hope that the hon. Minister of Finance will long retain that splendid vigour which he now enjoys and thus be able to give to Canada many more years of service. I congratulate him not only on having been privileged to move his sixteenth budget, but on the budget itself as a great achievement of political genius.
The Budget-Mr. Irvine

the value of unimproved lands or natural resources.
Now, this statement does not completely represent our real credit, for our real credit implies the ability to produce and deliver goods, and with the prevalent industrial anarchy-for that is what it is-we have never had an opportunity to test properly our ability to produce, except during the time of war, when a great number of our men were at the front. It is quite reasonable to suppose, that in comparison with the production of 1921, when our factories were running on short time-many of them closed altogether-and when 10 p.m. unemployment was current throughout Canada, we can very materially increase our production and thereby our credit if industry were properly organized and running to capacity. So I insist that while this is a very handsome balance sheet indeed, it does not represent all our real credit, which implies our ability to produce goods and deliver them as and when and where required.
Now, I want to give you the figures of Canada's production for 1921:
Canadian Production Agriculture, 1921-*
Field crops .. ..5931,865,000 Farm animals ..	98,424,000
Wool	 2,975,000
Dairy products .. 260,337,000 Fruits and vegetables..	..	..	40t,00'0l,0i00i
Poultry and eggs. 55,0041,000'
Fur farming.. ..	1,065,000
Maple products ..	4,174,000
Tobacco	 2,393,000
Totals	8
Fisheries 1921 (estimated).. ..
Minerals, 1921 (preliminary...
Furs, seasons 1920-21	
Forest products, 1919 (estimated)	
General Manufactures, 1919 $3,520,731,589-
This figure of $3,520,731,589 includes fish canned and preserved, log products, wood pulp and clay products production, which would reduce the amount to be added in with Canadian production to approximately $3,300,000,000 for general manufactures not included in above headings..
Total Canadian production.. .. $5,244,866,772
Let me quote here a very significant statement of the statistician. He goes on to say:
The above is a statement according to the latest available figures under the headings usually included in "production", it does not include all activities which may be regarded as 
"productive" from a stnictly economic point of view, such as transportation and trade activities. Railway gross earnings, for example, in 1920 amounted to $492,101,000, street railway gross earnings to $47,000,000 ; telephone and telegraph gross earnings to $45,000,000, etc.
So you will see that when I say we have at least an annual production in Canada of $6,000,000,000, I am well within the mark; that estimate of our annual production is a very conservative one. Just to indicate that it is, I would point out that in addition to our annual production of consumable goods, we produce annually a large amount of what might be called capital goods, existing in the form of public improvements, new or improved manufacturing plants, railways, canals, harbours, dry docks, ships, telegraphs, telephones, houses, roads and similar forms of capital goods. Now, if our total production in Canada be $6,000,000,000 and our annual consumption as estimated by the statistician is only $2,000,000,000, then we have a difference of $4,000,000,000 between our consumption and our production. The statistician, in reply to my question as to what would be an average wage for the Canadian breadwinner, stated:
We have no annual statistics of average wages, but in 1911 every individual on salary and wages was asked by the census to state his or her total earnings during the preceding year. The result showed an average of $592.75 for each male, and $313.12 for each female.
That is a very low average, and I want to add that in that estimate there was no allowance mads for those who received high salaries and those who received incomes from profits in corporations, and the like. I am going to make my estimate in this way. I am going to estimate our population as around nine millions, and that one in every five of a family is a bread-winner or earner of money, and I am going to grant to each bread-winner an average income of $1,000. You will agree with me that that is giving them a really higher wage than would be borne out by the facts. If we make that calculation, we shall find that we have something like two billion dollars worth of wages and salaries paid out to Canadian bread-winners in a year. That is the measure of our consuming power. I am going to assume that we consume all of that, that nothing is laid by, that we spend everything in consumable goods. If we consume at all, having only two billion dollars to purchase with, we should have four billion dollars worth of goods left on our hands, because we have an annual production of six billion dollars worth of goods. If those are
1,396,233,000
35,441,000
172,327,580
10,151,594
330,713,598
3,300,000,000

The Budget-Mr. Irvine
the facts-and if they are not, I hope the speakers on the Government side of the House will challenge the figures and give the correct ones-it is a very strange thing to hear hon. members on the Government side of the House talk about the necessity for economizing and for increasing production, and to hear the leader of the Progressives plead for strict economy. What is the value of strict economy when you are not able, as shown by earning measurement, to consume much more than one-third of what has been produced? If a man has a salary of $6,000 a year, and he can only manage to consume $3,000 of it, we all reckon that man is in a fairly good financial position. Is not that our state? That is precisely the position which Canada finds itself in to-day, measured in terms of our national credit. There is something very wrong with the belief that Canada is poor. What need to pinch when your production much more than doubles consumption? This "great lie" of poverty should be dropped from the philosophy of the Government.
The credit question is without doubt at the very centre of our national problems of trade depression, railway deficits, high taxation and unemployment. Canada's credit is good, as must be evident from the comparison which I have just given, and we should make collective use of our real national credit for the purpose of developing our home market. By increasing the purchasing power of the people they would be able to buy a larger percentage of that extra four billion dollars worth of goods that they are unable to purchase at the present time. Germany in using her national credit has once more outwitted her trade rivals and left the financiers of the world in consternation. She has successfully prevented the industrial stagnation which of very necessity prevails in other countries of the world where the old system of financing is still in operation, guided by the knights of high finance. There is practically no unemployment in Germany.
The hon. member for Fort William (Mr. Manion) quoted in this debate from an article in the English Review of October, 1921, written by J. Austin Harrison. I shall repeat his quotation, because I think it is germane to my argument:
Germany is doing a brisk trade, is industrially prosperous, has few unemployed and has a growing export which, to the consternation of the Allies, threatens to grow more real and valuable as the depreciation in the value of Germany's currency increases. He says that this will still further close British markets, increase unemployment, because
Britain is forced to buy food at a great loss to herself and cannot compete in Europe with countries whose currency is depreciated.
Here is another quotation by the same speaker, given in this debate, from the Literary Digest of November 26, 1921: ,
Returning travellers report Germany humming with industry, her workers well paid and well clothed and fed, with taxes the lowest in Europe and a promising export trade stimulated by her cheap money which permits her to under-bid England, France and America on foreign orders. Thus the cheap mark helps Germany and hits every one else.
One other quotation in this connection will give the quietus to the wild statements that I have heard hon. members make with regard to the position of the workingman in Germany. I have here an article from a well informed writer in a recent number of the London Economist, who says:
. . . The belief that the German workman works for long hours is mistaken. He works for eight hours, in coal mines for seven hours; if a bill already submitted is passed he will work in all mines for seven hours, and last year in the Ruhr mines a general strike was threatened in favour of six hours. The assumption that German workmen work, and will work, for extremely low w-ages is based on confusiion between nominal wages, gold wages, and real wages. German gold wages are very low. The German real wage, the only wage tnat comes into account in considering1 working class contentand "apparent acquiescence," is not low. It is considerably higher than before the war. The cost of living index (Statistical Bureaus) is 880; the Wages Index (Frankfurter Zeitung's) is 1,132 ; in other words, real wages are 30 per cent higher than before the war. Further, German workmen show the same persistency as British or American workmen in pushing up or keeping up wages. Between January, 1920, and April, 1921, the cost of living in Germany rose 50 per cent, whereas nominal wages, always as the result of agitation, rose 120 per cent; so that the present movement is altogether for a higher real wage.
Mr. Arthur Kitson, writing in the New by the way Mr. Kitson is a British manufacturer who has been very successful in business, and a student of financial affairs for over forty years, and I submit that his opinion is worthy of at least consideration

says:
The fact that the only countries where trade is really flourishing are those (like Germany) which have abandoned the gold system, whilst those where the revival of the system has beer either attempted or achieved (such as Great Britain and America) are suffering the worst period of trade depression ever known, conveys no meaning to the sound-currency association.
How has Germany accomplished this wonderful economic feat? She has done it by printing paper money and by fixing


Mr.   McM ASTER@: Will the hon. member permit a question?


Mr. IRVINE:: Yes.


Mr.   McM ASTER@: Has the hon. member not forgotten to mention the double liability, which affects all banks? Has that not something to do with the security on which the bank is allowed to issue currency?


William Irvine: I do not think that the double liability has anything to do whatever with the principle of credit issue that I am discussing. I frankly confess that I have made no pretence to be a financier, and you have all seen that already, of course. I do make a pretence, however, to be able to see a principle and to say how it is working out
159J
in our national life. I maintain that this is a privilege which is granted to the banks, a statutory privilege which permits the monopoly of our social or national credit, and credit has become, in our complicated modern civilization, an absolute necessity of human life and prosperity. That is the contention I wish to make. Here is the problem in a nutshell. When a bank issues new money it really issues paper notes based on its assets. It lends this to a farmer for his note which is issued on his assets. But while the assets of the bank are of no more value than the assets of the farmer, the latter must pledge a great deal of his assets for the use of a very small portion of the notes representing the assets of the bank. But this is not all. Why should the farmer who has exchanged a superior note for the loan of an inferior one be compelled to pay a toll called interest on the transaction? This used to be a riddle. It is now as clear as day. The banker through a statutory privilege charges the farmer for the use of his own credit.
It is this private monopoly of social credit that accounts for the fact that we have to-day a huge national debt. That debt is spoken of in the budget; it will be spoken of, I fear, in many more successive budgets, and it is very doubtful if it will ever be paid if we go on financing as the budget proposes to do. The national debt of Canada as given by the Minister of Finance (Mr. Fielding) is now $2,427,269,798. This means that our annual interest is $138,223,000. The interest alone on this debt, says the Minister of Finance, calls for an enormous sum of money, greater, indeed, than the whole expenditure of Canada a few years ago. At that rate, I suggest that we shall have to do more than pass self-denying ordnances, for we shall almost have to have no expenditure at all before we can even pay the interest on our national debt. But this does not represent all our debts Every municipality has debts; every city, I venture to say, is burdened down more or less; every province has its debt, in addition to the national debt. Not only that, but many of us have our homes mortgaged, and it has been said by some-I do not know to what extent it is true-that some 75 or 80 per cent of the farmers have their farms mortgaged. Therefore, our national debt does not begin to represent the real indebtedness of Canada from the point of view of finance.
The Budget-Mr. Irvine

The first thing to do, in my humble opinion, is to stop making more debt, to stop making multi-millionaires by allowing them to lend our own credit to us in order that they may charge us very highly for the privilege. Let us use our own credit and issue our own money thereon. It would take all the gold in Canada, I believe, and, perhaps, something more than that to pay the interest on our national debt for one year. If you go outside the realm of Canada for a moment or two, in order to make a comparison, we shall see that what we owe is merely a drop in the ocean. The post-war debt of the nations of the world is placed at $354,181,523,786. Allowing an average rate of 4 per cent interest on this enormous sum, I figure that it would take $14,167,260,948 to pay the interest for one year. It will take $38,800,000, to pay the interest for one day, and some hon. members had better figure out what it will take to pay the interest for a minute and see if we can do it.
This, then, is the situation. The more we borrow on the present system, the more interest we shall have to pay, the more inflation will follow, the less will be the purchasing power of the people and the more difficult it will be for them to pay taxes and more impossible to pay the national debt. If we follow then this beaten path of financial monopoly which leads into the thickets of despair and national bankruptcy, the scenery does not look very well; but the scenery is brighter and more inspiring, indeed, if we can step out of the rut and march in another direction. Deflation follows the inflation of our currency, and that has happened to such an extent that our people are in the position to-day where, as I have proved to the House, they cannot buy back more than one-third of what they are producing. What then will the workmen think when they receive the message of the Minister of Finance asking them further to deny themselves? They have little more to deny themselves save existence; and if they deny themselves existence, that would not pay our annual expenditure, nor our war debt, nor our national debt. I contend, then, that we must find some way of placing our people in a position to purchase the necessaries of life. Put an end to the under-consumption by using our own credit, and industry will soon be humming. Make consumption possible and production will look after itself. It will not be necessary for the Government to send 
highly-paid lecturers to tell the farmers to raise wheat and potatoes, if they know there is an excellent market for those things. Let us make it possible for the people of Canada to consume, by giving them money with which to purchase on their own credit, and you will find that you do not have to trouble much about your foreign markets nor about your tariff; that your industries will be humming, and that you will be able thereby to pay whatever national debt there may be, to pay the deficits of this year and to continue to prevent deficits in successive years. I am arguing for a new system of national credit in connection with this budget, because that would not only reduce our financial burden in the way of giving our people something with which to pay taxes, but it would shut off the interest taps of the financiers, so that our national debt will not continue to grow. Those are the two reasons. It will shut off the interest taps of the financiers, stopping, at its source, the debt that is inundating us and, at the same time, by increasing the purchasing power of the people, they will be enabled to buy back what they are producing and thus give them an opportunity to pay the taxes which have been heaped upon them by the present budget. It is hopeless for us to try to catch up with our national debt, which is travelling, I may say, at a speed that is twice as fast as the utmost speed with which we can follow it.
Before giving an outline of a system which is known as the Douglas system, and which I do not contend is the only possible way, I want to state that there are in connection with this system certain fundamental principles which I claim to be undeniable, and these I want now to emphasize. The details of working them out, as given by the Douglas system exponents may or may not be practicable, but 1 will leave that to the Government to find out. I want to insist first of all that the definition which Major Douglas has given of credit is, so far as I know, unchallengeable and hinging upon that definition, there are two important principles which, I say, are also unchallengeable if the definition be correct. As I say, hon. members may possibly not be able, from the incomplete outline that I am going to give the House, to understand the system, or, understanding it, they may not agree with it. But I submit that they will not be able

The Budget-Mr. Irvine
to puncture the definition of credit, nor the principles which follow as natural cor-rollaries. The definition of the Douglas system of credit is:
The correct estimate of ability to produce and deliver goods as, and when and where desired.
If that definition is established, then credit is acknowledged to be a community-created thing. If credit is a community-created thing, then it is only reasonable that it should be community-controlled, especially when we consider how essential it is to national prosperity. I am not aware that this definition has ever been challenged. Will any hon. member of this House challenge it? If it .is true, I repeat, that our credit is our ability to produce and deliver goods, that implies, not only plant, equipment, management, and labour power, but the consumer.
Goods cannot be delivered unless there are consumers, and therefore credit is really a social or collective asset. Granting that it is a social asset, and one which by its power and its proper use may bring prosperity, or by its misuse may bring depression or poverty, it is in the highest national interest to see that this powerful instrument of credit is takeft from the hands of financial kings and placed in the control of the nation. In further support of the argument that credit is a social asset, I will quote briefly from the bulletin of the National City Bank of New York. The writer says:
First of all, the condition essential to credit is the maintenance of an orderly state of society, which includes a stable government having the support and willing obedience of the people-
I think he might have changed that statement and said a government which willingly obeys the people. That would be better. However, he goes on:
-recognition of property rights, general willingness on the part of the people to work and maintain an effective state of industry. These are the foundations of credit everywhere; and the more clearly it appears that they are understood, and the benefits thereof recognized by all classes, the better the credit of a people will be.
That is a statement from the mouthpiece of a bank. If there are those who have some doubts about the definition as given by Major Douglas, they surely cannot have much doubt after such a statement from a banker himself. That must certainly be reassuring. Now, those who to-day control credit control also the issuing or holding of money. In that respect I desire to quote
the late Hon. H. R. Emmerson, at one time an eminent minister of the Crown in our own Parliament. In speaking on banks and banking on January 30, 1913, as reported in Hansard at pages 2424 and 2434, and while referring to interlocking directorates, the Hon. Mr. Emmerson said:
There is lurking in every section and paragraph of this bill-
By the way, I think it was the present Banking Act.
-an atmosphere of that menace.
Namely, interlocking directorates.
While those influences in the United States are limited to, say, ten men as controlling the great financial interests of that country, we in Canada have the condition of practically twenty-three men controlling the great corporate interest, the financial institutions, the insurance companies and the trust and loan companies of the country. . .
We grant great concessions to these banks in the matter of the issuance of their promises to pay. Their Bills and notes go broadcast
throughout the country	How much
does the government get from these institutions as compensation for the right and privilege to issue their I.O.U's? After all they are but the I.O.U's of these banks and it is a privilege which a very greatful and kindly disposed people through their Parliament have granted to these institutions.
You will see from that quotation, from one of our great statesmen now passed away that financiers control credit. The aim of banking is to produce money, while the aim of the industries which money stimulates should be to produce goods. As a result of the present credit system the purchasing power in the hands of the people is chronically insufficient to purchase the products of industry. This unfortunate condition has come about because the present methods of financing permit the charging of capital production to the consumer in the form of high prices. In this way the people of the community may, for example, pay for a factory many times over, and yet never own one cent's worth of that factory. Now, the shortage in purchasing power brought about by the credit system leads directly to a struggle for foreign markets, and if that struggle is successful it usually leads to war, while if it is unsuccessful it leads to that kind of poverty and unemployment with which we are so familiar in Canada. The remedy for these conditions is to be found in the increasing of purchasing power; but the mere creation of new money is not itself a sufficient solution. That would lead us to what is commonly called the "vicious spiral", which was in evidence during the
The Budget-Mr. Irvine

war. Although I will not suggest this to the Minister of Finance (Mr. Fielding), it might be a splendid thing for Canada to revive the inflation that prevailed during the war until we have paid our war debts. If we did that it would very materially reduce our actual war debt; for if I mistake not, we sold our Victory bonds at a time when our dollar was worth something like 33 cents. We had about $100,000,000 in gold reserve, and had in circulation over $300,000,000 in paper money. That meant that the purchasing power of the dollar was reduced one-third at the time the victory bonds were sold. If we re-established the gold standard and then paid the national debt, we would multiply the national debt by three. I say therefore that it would be a good thing if we would bring into force again that inflation that obtained during the war until we shall have paid off our national debt But money alone will not be a solution. If we merely issue money there must be corresponding regulation of prices; otherwise we shall have a repetition of the vicious spiral, which means high wages after the loan, higher costs, higher prices, then more borrowing, more inflation, higher wages, higher costs, higher prices, infinitely repeated.
I want now to present very briefly a practical outline of the proposed system of Major Douglas so that hon. members may have an opportunity of studying the matter if they so desire. I am going to place on Hansard a few tables, which if hon. gentlemen care to follow them at their leisure, they will discover the steps in a practical way which Major Douglas proposes in putting into effect his credit system. If it is true that the mere issuing of money leads to inflation and to the vicious spiral, we must begin by seeking the establishment of a just price. A just price, according to his proposal, will bear the same relationship to the cost of the goods, as the total national consumption bears to the total national production. Now, there are four factors involved in finding the just price of a commodity. We first have to deal with the cost of production; next, the just price, or selling price to the consumer; next, the total national production; and, fourthly, the total national consumption. The selling price of the goods to be consumed in Canada, must be arrived at by finding the ratio between production and consumption; and this formula will give you the means of ascertaining that just price. If you want to find the cost of a ton of coal, you must multiply
CMr. Irvine.]
the cost price of that ton of coal by the value of the total consumption and divide it by the money value of the total production. The total national consumption will therefore be seen to include capital depreciation and exports, and the total national production will include capital appreciation on imports. My next table deals with credit issue and price regulation. This is issued through the national clearing house, which will function in a similar capacity to that of the clearing house of our banks to-day. The Douglas system does not presuppose the demolition of any institution now in existence. Let me follow the production of boots beginning with the tanners and ending with the consumers, applying the Douglas credit system in each transaction involved.
Credit Issues & Price Regulation Example: Boots
Tanners' raw hides	] $3,000 in-
(Datum value)	$ 500 | voice to
Semi manufactures (che-	f clearing
micals, powers etc.) ..	2,500J house.
Wages and salaries.. ..	2,500 1 $2,750 cost
Profit (10% on out of	(-plus profit
pocket cost)	 250 J at factory.

Clearing house issues cheque in favour of tanners for $3,000 by means of which tanners deal with their accounts for supplies. Clearing house wnites up its capital account by this sum. Tanners owe $3,000 to clearing house.
Boot manufacturers
Leather (from tanners). ..$5,750 ] $8,250 inl voice to
Supplies (pegs,	thread	f clearing
power etc.)	 2,500 J house.
Wages and salaries.. .. 2,500 ] $2,750 cost [DOT]
Profit (10% on cost of	1-plus profit
labour)	 250 j at factory.

Cleaning house issues cheque in favour of boot manufacturers for $8,250. Boot manufacturers pay for supplies, including $5,750 to the tanners, who in turn retain $2,750 and pay back $3,000 to the clearing house. The tanners disposed of, boot manufacturers owe $8,250 to the clearing house.
Retailers
Boots (from manufacturers)	$11,000
Profits (including expenses, etc.)	 1,500
Cost	$12,500 1,250 prs. $10
Clearing house issues cheque in favour of retailers for $12,500. Retailers pay $11,000 to manufacturers, who pay off their debt of $8,250 to clearing house, and retain remainder.
Just price to consumer-
Costt Price Consumption Production $10	$5	$3,000 million $6,000 million
The retail credit invoice is duplicate otf bill paid by purchaser of boots.

The Budget-Mr. Irvine
The retainers turn in $12,500 on retailers invoices to clearing house, and are credited with 50% of that sum against original cheque sent them. They recover remaining 50% from actual purchasers of boots and reimburse clearing house. The manufacturers account balanced at clearing house, who write down their own credit by that amount. The credit capital of the community is thus written up 50% of $12,500.
In this connection I would point out to my hon. friends who are so fond of talking about the tariff that if they introduced this credit system the iniquitous tariff would automatically die, because goods produced in Canada would be sold at a price which no outsider could possibly compete with. Goods would be sold in that ratio between our power to produce and our power to consume, and at the present moment it would mean that our goods would be sold at half the present price. Would it not be a happy day for Canada and for this House if the tariff question were buried so deep down, Mr. Speaker, that a thousand excavators would never find a sign of it again?
I repeat that I am not basing my full faith on any details of the Douglas scheme;
I am going to hint at other schemes which have been proposed by such prominent men as Mr. Henry Ford and Mr. T. A. Edison. Certain propositions that they are making to-day are worthy of the consideration of thinking people. But apart from their theories certain practical attempts have been made to inaugurate a credit system such as they advocate. These attempts have been made in regard to specific industries and also in regard to cities, and I want to give briefly an account of two of such efforts.
The first instance to which I shall refer occurred in the island of Guernsey in the days of Governor do L'lsle Brock. When I mention that name it will no doubt remind hon. members of the famous general, Sir Isaac Brock, who fel. at Queenston Heights fighting for this great dominion. It may be interesting to know that he came from the Channel islands, and I believe he was related to the governor to whom I now refer. There was in the parish of St. Peter's in the island of Guernsey great need for a public market. A number of enterprising citizens organized themselves into a committee and proceeded to raise the necessary money in the usual way, which was to go to the governor and secure his assent to the issue of interest (bearing bonds to be sold in Paris or London. When the committee presented their case to the governor he asked them the following pointed questions :
Have we the necessary number of mechanics to build the market house?
Have we the material, the rocks, bricks, lumber, lime and sand, tools and teams as well as the food supply necessary during the operation?
To these very pertinent questions the answer came from the committee that they had. Then the governor spoke to them as follows:
Here you tell me that we have within ourselves everything needed to build a market house, yet you desire me (to bond you to the bankers in Paris or London (or a material which is of no manner of use in the constructions of the house. Strange anomaly! Is it your intention to build a market house for bankers? If so, then vou are correot in your endeavour to get paid by those bankers, but in such case, you should not place yourself under bondage to those bankers besides. If those (bankers pay you for the house and hold you in bondage also, demanding an annual tribute, they will soon have both the house and the money they paid you. It will be no relief to say that we make the renters of the market stall pay that tribute to the bankers. The renters will be part of us, and will demand of their customers that tribute in higher prices for goods. So we, jointly, will have to pay tribute in perpetuity for an article which, as I said, is not of any use to us. Allow me, gentlemen, to propose a better plan, for building our market house, than by way of money and bondage. Having, as you avow, men and materials among us, all that is necessary to do in the case is to keep account of each man's contribution in work or materials, that, in the future, we may (balance equitably the expenses of the building. This can best be done by means of a money which lays no claims to interest nor discounts. Instead of bonds, I will issue $22,000 market house scrips of different denominations (as money) and with these pay the men and purchase the materials, then make these scripts receivable, at par with the legal tender money of the realm, for the rent of the market house stalls.
The committee took the advice of the governor. The market was built. The rent of the stalls was used to recall the script, and in ten years all had been recalled, and the building stood as a monument to cooperative financing.
A special anniversary was held by the community to celebrate their co-operative success. The governor in a speech to the people, pronounced the following impressive tribute:
Well done, good and faithful servants. While living you have performed your work with equity, and now departing you leave no interest-extorting bonds, nor mortgaged home behind, but instead, you open the portals to a brighter financial era. May the toilers learn wisdom from this example.
Fellow citizens: For the first time in the history of this Island you have learned to make your own money, you have built your own market house without borrowing one cent. without losing one cent in discount, and with-
The Budget-Mr. Irvine

miration and appreciation of the sterling character and sincerity of the hon. leader of the Progressives. I would ask hon. gentlemen on this end of this side of the House, who will be more interested in my criticism perhaps than those who sit opposite, to grant my sincerity in this matter. If I criticise the Progressives it is not that I have lost faith in them. I still have the confidence I have had for many years that in the United Farmers movement we have the greatest and the most hopeful influence in the political life of Canada to-day. Their leader, I repeat, is a man of unimpeachable character, so anything I say should not be taken in a personal sense. With this statement, I feel free to say what I have to say on the amendment to the amendment.
While we have had the statement of the Liberals, and the chuckling acquiescence of the Tories in the budget which has been presented, and their little consistent resolution to censure the Government, what have we got from the Progressives? That is a question that I want the hon. members of the Progressive group to consider, as well as all other hon. gentlemen in this House. I want the people of Canada to consider it also, for I do not know of any other group that is more responsive to the people who sent them here than this particular group that I have the pleasure of sitting with. So I want the people of Canada to investigate their proposal, and if it is not a right one, to say so, and then I am sure that the hon. members of the Progressive group will respond the next time. If as I think they have diverged from the path of democracy that they have championed so vociferously, I hope it is only a momentary aberration, and that we shall find them suddenly swinging back to their true path in their right mind.
But what is to become of the fiscal policy of the organized farmers of Canada? I am asking this question because in the first place I have been a member of that organization longer than seventy-five per cent of hon. members here representing that organization. I have done more, I say without hesitation, to organize that movement than perhaps any other hon. gentleman on this side of the House. Moreover, I have given pledges to farmers in my own constituency, and have been sounded out upon this very question of their fiscal policy, and upon that ground I take the right even to criticise this great industrial group, or party, if you choose, and to voice my opinion upon their policy. The

farmers' platform was drawn up by the farmers themselves-and that is the point I want to emphasize. It is not like the Liberal platform, drawn up by a few Liberals, by themselves. The farmers' platform was drawn up by hundreds of thousands of organized farmers in Canada, as representing their opinions of how the country should be financed, and how our national business in general should be conducted. Therefore, the Progressives are in a unique position in this regard. The Liberals may violate their platform, because they made it themselves, but the Progressives cannot violate their platform, because they did not make it. It was made by the people they are here to serve, and that is the only thing we have to justify us in being here. If we do not make that distinction now and make it so clearly that there can be no misunderstanding about it, then I say I would just as soon cross the floor providing they would have me, which I doubt. If we cannot succeed in doing that, what is the use of calling ourselves anything different from the other old parties? If the fiscal policy of the organized farmers put out by the Canadian Council of Agriculture, and endorsed by the annual conventions of the organized farmers in every province where there is an organization, was good enough to elect the representatives of the farmers to Parliament, it is good enough to be moved by the hon. leader of that group in this budget debate. And if it has not been moved, I ask again, what has become of it? I am very deeply disappointed.
But before I deal with the speech of the hon. leader of the Progressives and his resolution in detail, I would like to refer to the keynote of his song, if you wish, as appearing in his pastoral letter-I am calling it that-to the people of Canada at the last election. He said "Let us get away from the bogs and mires of intrigue and corruption into the upland where the air is pure and sweet." Now, that is a very pretty thing, and I fancy we all want to join in the chorus of that song. But where are these uplands? I want to get my foot on the uplands. I fail to find these uplands in the amendment which has been proposed by the leader of the Progressives. I want to summarize his proposals, or his speech rather. I think that I am not hypercritical when I say that it was more or less platitudinous in the cry for economy. My reply to him is what I have already given. Look at the facts. Why plead for a greater

The Budget-Mr. Irvine
economy when we are producing twice as much as we are consuming, and when greater economy initiated by this Parliament and passed down through the various institutions of this country will paralyze the trade in Canada and increase our unemployment? I reply to the leader of the Progressives in the same way that I replied to the budget in that regard.
Then, I think he made an inadequate attack on the sales tax. That is a striking injustice to the consumer. That tax was made on the lowlands, where the air is not pure and sweet, and those who are on the uplands, where the air is pure and sweet, should have something more to say about that tax than the leader of the Progressives has said. Then he made an amazing condemnation of the stamp tax because it . would fall very heavily on large corporations. I was surprised, Mr. Speaker, to hear that. As a matter of fact, in my opinion the stamp tax will fall much harder upon the poor man who may have to issue ten cheques to pay $50 out of the bank. In doing so, he spends 20 cents to draw out $50, but a large corporation can save every cent possible by writing large cheques, but, apart from that, I was rather disappointed that the hon, member for Marquette should have gone out of his way to criticise this tax because it struck the big corporations.
Then, of course, he attacked militantly the Conservative party. That party seems to be a sort of red rag to the Progressives. Why should we worry about the Tories- poor Tories? Do not worry about them, do not get afraid of them at all, and do not bother criticising them. I am not sure that they are absolutely worthy of it, in point of politicial strength and influence. Do not trouble about these attacks on the Tories. Let us cut to the line and put out our own positive constructive programme. Never mind the Tories-they are playing their own game. The attack of the leader of the Progressives on the Tories was more or less a Liberal defence. I submit the Liberals can defend themselves, but there was absolutely no constructive proposal put forth by the leader of the Progressives. Why was the Farmers' platform not moved as a constructive proposal. Possibly the reply would be that they could not put the Farmers' platform in the amendment to the amendment, else it would not have been an amendment to the amendment. Well, there may seem to be some reason in that, but the constitutionality of the amendment to the
amendment already having been challenged, it might as well have been challenged for putting the principle in it as for putting nothing in it, might it not? By moving the new fiscal policy hon. gentlemen would have had the opportunity of stating clearly to the House and to Canada what were the principles upon which he and his party were elected. I am going to put on Hansard the fiscal policy of the Progressive party. Here it is:
Canadian Council of Agriculture's Tariff Proposals
Our tariff laws should be amended as follows:
(a)	By an immediate and substantial allround reduction of the customs tariff.
(b)	By reducing the customs duty on goods imported from Great Britain to one-half the rates charged under the general tariff, and that further gradual, uniform reductions be made in the remaining tariff on British imports that will ensure complete free trade between Great Britain and Canada in five years.
(c)	By endeavouring to secure unrestricted reciprocal trade in natural products with the United States along the lines of the reciprocity agreement of 1911.
(d)	By placing all foodstuffs on the free list.
(e)	That agricultural implements, farm and household machinery, vehicles, fertilizers, coal, lumber, cement, gasoline, illuminating fuel and lubricating oils be placed on the free list, and that ail raw materials and machinery used in their manufacture also be placed on the free list.
(f)	That all tariff concessions granted to other countries be Immediately extended to Great Britain.
(g)	That all corporations engaged in the manufacture of products protected by the customs tariff be obliged to publish annually comprehensive and accurate statements of their earnings.
(h)	That every claim for tariff protection by any industry should be heard publicly before a special committee of parliament.
Have we heard that discussed in this House? Have those industries which receive protection in the present budget proved to Parliament that they ought to get these benefits? I think not.
Canadian Council of Agriculture's Fiscal Plank
In order to provide the necessary additional revenue for carrying on the government of the country and for the hearing of the cost of the war, direct taxation be imposed in the following manner:
(a)	By a direct tax on unimproved land values, including all natural resources.
(b)	By a graduated personal income tax.
(c)	By a graduated inheritance tax on large estates.
(d)	By a graduated income tax on the profits of corporations.
(e)	That in levying and collecting the business profits tax, the Dominion government should insist that it be absolutely upon the basis of the actual cash invested in the business, and that no considerations be allowed for what is popularly known as watered stock.
The Budget-Mr. Irvine

(f)	That no more natural resources be alienated from the crown, but brought into use only under short-term leases, in which the interests of the public shall be properly safe-guarded, such leases to be granted only by public auction.
Now, Mr. Speaker, there is the programme of my Progressive associates. Though I am not a Progressive, I have been closely associating with them, being a representative of an economic group, similar in aim and with a corresponding educational programme, I am taking the liberty to make this criticism. Progressives will agree with me that their programme is one that they need not be ashamed of, and it should have been moved, I repeat, by the leader of the Progressive party or by some other member of his party, so that their opinion and the opinion of the farmers who have spent thousands of their own money to build up an organization to send representatives here might be heard.
In conclusion, Mr. Speaker, I simply want to intimate that, in the Farmers' programme, there are two principles that ought to be emphasized more emphatically, one being the tax on unimproved land values; the other an inheritance tax. I am glad the hon. member for Brant (Mr. Good) gave us a most excellent presentation of single tax, and therefore, I merely wish to endorse the argument and the presentation of the	philosophy as	presented	by thehon.	member	for	Brant. I	believewe should place a tax upon land, not only	because	the	farmers	of	Canadahave	declared	for	that, but	because itwould be a tax which would not fall upon labour and would not even fall upon capital, but a tax that would fall upon the land exploiter and would result in forcing land into use. We were hearing something today from the hon. member for North Winnipeg (Mr. McMurray) about the necessity of bringing in more immigrants. Why, he says, that is how to pay our national debt. I submit it is not a very good advertisement for Canada that it should be said upon the floor of this House that our national debt is so great that we cannot pay it, so	we shall have
to get some people from Europe to come to Canada and help to pay our debts. But that is on the side. If we want to get immigrants into this country, it would be very good for us if we could get more free land; and if under the land tax, as some critics say, we would not get the money, we shall get the land back. We would thus have an opportunity of settling 
the immigrants whom the Government proposes to bring from other countries. At the estimate of $8,000,000,000 of land values in Canada, I would put a tax of 2 per cent on the land and thus bring in $160,000,000, more than the Minister of Finance (Mr. Fielding) will collect off his candy tax in many years.
The next thing that I want to emphasize,-and then I am through-is the tax upon inherited wealth. Those are two principles in the Farmers' platform that require to be emphasized. We ought to have emphasized others, I admit, such as the more steeply graduated income tax. The privilege of the inheritance of wealth is based upon the same old fallacy upon which rested the divine right of kings. The divine right, if you will, of the inheritance of wealth, is no more necessarily fixed than the divine right of kings, and I believe the best way to abolish the inheritance of wealth is by taxation. I am in favour of an inheritance tax, in the first place, because we need more revenue, and in the second place, because I want to abolish the inheritance itself.) The inheritance takes away the right of the producer to have what he produces. Inheritance of wealth means inheritance of poverty, and the divine right of kings and the divine right of inheritance are based, as I say, on the same fallacy. If we could tax the inheritance, it would ultimately pass out of existence, and we would thereby arrest a tendency to the concentration of wealth as well as put a great amount of money into our treasury. Instead of taxing the candies of little children, instead of taxing the food supply that is none too great to the present consumer, because he cannot purchase it, instead of taxing the food of living children, let us put a tax on dead millionaires, and I believe posterity will thank us, and we shall incidentally get some revenue.


Mr. HARRY LEADER (Portage la Prairie) :: Mr. Speaker, as I am a new member of this House, with very little experience in the art of public speaking, it may be rather an imposition to ask hon. members to stay here and listen to the few remarks that I shall have to offer. It seems, however, incumbent upon a member of Parliament-and the people at home expect it -to take part in the debates in this House and make at least one speech during the session. I hope to convey to the House the sentiments that I hold and to interpret the

The Budget-Mr. Leader
viewpont of my constituents who have honoured me with their confidence.
I am sorry that circumstances, over which I had no control, made it impossible for me to be present when the Minister of Finance (Mr. Fielding) delivered his budget speech. The subject matter of that speech is a distinct disappointment to me, and I am sure it is a disappointment to the great majority of my constituents. While it is true that on many articles a reduction in the customs tariff has been effected that would give material benefit to the general public of Canada, it is also true that the increase in the sales tax has taken away the benefits that would accrue by the reduction in the customs duties. The effect will be that the Government have only shifted the load from one shoulder to the other, and the weary taxpayer of this country goes on with his burden. It seems to me that the practice of governments of Canada, both provincial and federal, is to apply their energies not to the reduction of debt mostly contracted during the war, but rather to find new sources of revenue to take care of ever increasing expenditure. If I am not a politician, I am at least a practical business farmer, and I know that inevitable ruin would be the result of my operations if I did not live within my means and curtail my unprofitable expenditures.
I wish to state my approval of the action of the Minister of Finance in approaching the government of the United States with a view to securing better trade relations with this great natural customer of ours. The door is shut for the time being, it is true; but can we not hope that, in the near future, better trade relations will be established between the two countries? Mr. Speaker, I wish to confess to a political sin-and this is another indication that I am not a politician. I think it was the hon. member for Fort William and Rainy River (Mr. Manion) who, upon being asked how he voted on reciprocity, said that he voted for reciprocity, and that he had no apology to make. I want to confess that I voted against reciprocity, and I wish to apologise to the people of Canada for doing so. At the same time, I wish to state emphatically that I thought I was polling an intelligent vote according to the dictates of my conscience. In those days I considered that I was a real politician, and the welfare of the Conservative party and the election of a Conservative member for Portage la Prairie meant more to me then than favourable trade relations. I will confess
from my seat in this House that I made a blunder.
The rejection of reciprocity has been little short of a disaster to the country, especially to the agriculturists of Canada and I know this is the viewpoint of the great majority of my constituents. Let me take the livestock industry in which I am interested. The farmers of Canada raise hundreds of thousands of cattle that cannot be taken care of by the home market, excellent as that market is. We are told that the home market is the best market there is, and I believe it is. The stock raisers in the East have a home market which they can take care of. We have practically no home market in the West; 85 per cent of our home market is in the East, but the distance is so great that transportation charges eat up the profits, and we must look for wider outlets. Owing to the embargo maintained in the Old Country against feeder and store cattle, we must look to the United States for an outlet; and notwithstanding the duty of 30 per cent imposed by the Fordney tariff, we are selling thousands of Canadian cattle in the United States market, under this very grievous handicap. If we had reciprocity, that would be a great stimulus to the livestock industry of this country. To-day the hon. member for North Winnipeg (Mr. McMurray) stated that he had raised cattle, driven them eighty miles and sold them for 2 h cents per pound. The hon. gentleman, I notice, is not engaged in that occupation now; he has taken up the occupation of a lawyer. I do not blame him, because we shall all have to do so if present conditions continue.
Some hon. members say that there is very little difference between the two old political parties, and I know that that belief is prevalent throughout the country. The hon. member for South Oxford (Mr. Sutherland) referring to the Progressive party wondered where it got its origin. Well, let me tell him that the Progressive party originated from the conviction that there was no appreciable difference between the two old parties; the embodiment of that conviction is the membership of 65 in the Progressive group in this House. We had no faith in the Liberals, because their attitude in office has always been different from their professons out of office. I may be wrong, but I am informed that a great leader of the Liberal party once made the statement that if the Liberals were given
The Budget-Mr. Leader


An hon. MEMBER:: An awful penalty!


Harry Leader: I feel certain that this
would have a tendency to appreciably curtail many speeches of those who are fortunate enough to be absent during the greater part of the sittings.
There is a verse which I commend to the attention of hon. members; it runs something like this:
If you would be pungent, be brief.
For it is with words as with sunbeams,
The more they are condensed, the deeper they burn.


Mr. S. W. JACOBS (George Etienne Cartier) :: Mr. Speaker, my Object in rising to-night is not to indulge in any lengthy discussion upon the budget. Practical men, I submit, can say what they have to say upon the budget when the resolutions are before the committee. The budget is an annual talk-fest for doctrinaires who wish to discuss the relative advantages of protection and free trade. The free trader looks upon the protectionist as a thief; the protectionist looks upon the free trader as a visionary.
It is rather late in the evening, Mr. Speaker, for me to express any views upon
The Budget-Mr. Jacobs

these questions-if I had any. My object in rising is to discuss a matter which I wished to bring before the House earlier in the session. I had on the Order Paper a resolution with regard to immigration, but unfortunately private members' day was taken away before this resolution could be debated. I may say that it would have been reached earlier, had I not consented, out of good nature, to give way to oleomargarine, and then I found that after oleomargarine had-I was going to say paved the way-


An hon. MEMBER:: Greased the way.


Samuel William Jacobs: -my right to speak was lost. So that the only opportunity I have is here during the budget debate now drawing to a close. Therefore I shall express those views now, and I can assure you, Mr. Speaker, that my words will be very brief indeed. First, I want to point out that I propose to criticize my own party in connection with its immigration policy, and I am rather glad that it should be done at the dead of night when as few people as possible are present, and when I hope the members of the press have gone to seek well-merited repose.
During the campaign which ended in our return to power last December, I had occasion to criticize as vigorously as I could the immigration regulations enforced by the government which gave up the reins on December 6th, and I feel that a large part of my success was due to the fact that I was able to show the electorate something of the iniquities of those regulations. I sometimes think that I actually grew eloquent as I depicted the wickedness of the government in keeping out of this country a proper class of immigrants. At any rate when the votes were counted I found that my four opponents had lost their deposits and that the Liberal candidate had been returned at the head of the polls, pledged to do something for intending immigrants.
Well, I waited through December, Janu-any, February and March, but nothing was done by the new Government. On March 31st I had my resolution placed upon the Order Paper, but, before it could be reached, the Government changed its immigration policy. But in what way was it changed, Mr. Speaker? The regulations and the orders in council were, I thought, in all conscience restrictive enough, but by the new orders in council I find they are much more restrictive. It was another case of: "Where my father

whipped you with whips I will whip you with scorpions." I want to cite to the House some of the regulations which are now in force. I wonder whether the House and the country are aware of the fact that we have a new regulation declaring that immigration into this country on and after the Pth of May is prohibited? I will read this regulation:
Prom and after the date hereof and until otherwise ordered, the landing in Canada of any immigrant is hereby prohibited.
Now, the Canadian Pacific Railway Company, other transportation companies, and many public bodies in this country during the last year, particularly during the last six months, and especially since this Government has come into power, have declared that what this country needs is a sane, progressive and vigorous immigration policy. They contend that we have had enough of the system which was in force during the war. Let us, they say, get away from that; let us see that we pump into this country a proper class of immigrants. Let us see that men are brought into this country from Europe who are willing to come here; men who are willing to give up everything that they had in Europe and to start life anew in Canada. Let us see that we have immigrants not only who will go on the land, but who will go to the cities and become part of our artisan classes there. We want people from every walk of life. Well, the answer of the Government to that is: Immigration into Canada from and after the ninth of May is prohibited, with, of course, certain exceptions. Let me give you those exceptions:
On 1. A bona fide agriculturist entering Canada to farm and has sufficient means to begin farming in Canada.
On 2. A bona fide farm labourer entering Canada to follow that occupation and has reasonable assurance of employment.
On 3. A female domestic servant entering Canada to follow that occupation and has reasonable assurance of employment.
These are the only people who are permitted to come into this country-bona fide agriculturists who have sufficient means to farm in Canada, farm labourers, and female domestic servants. Why, only a few nights ago the hon. member for Southeast Grey (Miss Macphail) told us that farming was a luxury in this country. What does the regulation mean when it says that agriculturists shall have sufficient means to begin farming in Canada? What does it mean in the West for an agriculturist to start to carry on agricul-

The Budget-Mr. Jacobs
ture as it should be carried on in that part of the country? Who is to decide what are sufficient means for a farmer coming into Canada? There are further provisions with regard to whom the immigration officer may admit. He may admit:
(a)	The wife and family of any person legally admitted to and resident in Canada who is in a position to receive and care for his dependents.
Just think of how kind-hearted the Minister of Immigration and Colonization is. He is going to permit the wife and family of any person who is already legally admitted to come in. I must say that is very kind indeed of him, and we must give him credit for it. The regulation continues.
(b)	The national of any country in regard to which there is in operation a special treaty or agreement or convention regulating immigration.
That, I fancy, refers to Japanese.
(c)	Any British subject entering Canada directly or indirectly from Great Britain or Ireland, the United States of America, or any self-governing British dominion or Newfoundland, who shall satisfy the immigration officer >in -charge at the port of entry that he has sufficient means to maintain himself until employment is secured.
Let me say a word or two in regard to that provision. Why should discrimination be made in favour of British subjects from Great Britain and Ireland or any self-governing dominion who can satisfy the authorities that he has sufficient means to maintain himself? Why not extend that provision to any person who wishes to come into this country? What is there in a British subject which makes
12 m. him better in this country than any one else? Any person who comes here and who desires to become a Canadian citizen, even if he has not British blood in his veins is, I submit, a proper person to come into this country. Why should a discrimination be made in that respect? Then we come to paragraph
(d):
(d)	Any American citizen entering Canada from the United States, provided it is shown to the satisfaction of the Minister of Immigration and Colonization that his labour or service is required in Canada.
What is the effect of this provision, and of the others to which I have referred? They bar out every person who is not an English speaking person. Now, you know and I know and every person knows the class of British citizen which sometimes is permitted
to come to this country and which certainly is permitted to emigrate from the Old Land. We know that to-day in England one-twelfth of the population is submerged; that is, they belong to a class that are absolutely worthless to any country, particularly to the country from which they come. I am not now saying anything in disparagement of the British people; I am simply talking about this class. In the past we have made regulations to prevent this submerged class, this worthless class, this class of ne'er-do-wells, from coming into the country, but by these regulations these people are permitted to enter Canada while people coming from other parts of Europe have to come in as farmers, as farm assistants or as domestic servants. I ask you, Mr. Speaker, and I ask hon. members of this House, is that the way in which we are going to build up the country? How are we going to pay our immense national debt with a population of eight and three-quarter millions when we should have fifteen millions? How is that going to be done? Is it going to be done by encouraging the coming to Canada of only the farmer, the farm labourer, and the domestic servant? How are you going to get farmers to come to this country? You are going to get them by pointing out to them the advantages of Canada over other countries. Well, having listened for the last three months to the doleful plaints and wails of my hon. friends from the West I cannoit see that any person coming from Europe, unless he engages in farming in a small way-intensive farming, as they call it there-can make a success in this country. The only way in which this class of people can be successful is by their settling near large cities so that they can engage in truck gardening or farming in a small way. But how can you get them to go to the great West, where the climatic conditions are of such a rigorous character and where large sums are required to carry on farming as it should be carried on? A man has to have his section of land, his tractors, his gasoline machines, and things of that kind. It is practically impossible to get these men to go on the farms in the West; as I have said, the only thing to do is to induce them to go into the more settled districts where they can make a living in a small way by market gardening. So I say that this policy of attempting to secure farmers for this country, particularly from Europe, is bound to fail; it cannot be successful. My idea is that we ought to permit people to come to Canada irrespective

The Budget-Mr. Jacobs

of what they are going to do when they arrive; they will find some kind of work to do. If a man is an artisan, let him come here and take his chance; if he finds there is no occupation for him as an artisan, he will very soon find his way into some occupation in which he can be employed. It is all very well to say that we want farmers, but what have we to oifer to farmers? If a bona fide farmer comes to this country, goes on a farm and finds that he cannot make a success of agricultural work, he will drift into the city and try to earn a living there.
Do you not think it would be folly on the part of a farmer to remain on a farm and endeavour to make a living when he knows it is much easier to make a living in the city? We must allow these people to work out their own salvation. Do not attempt this paternal system of government and say: You shall go on a farm, and you shall not be allowed in the country if you do not farm. It is a mistake on the part of the Government to do that, and I am surprised that a minister of the astuteness and intelligence of the Minister of Immigration (Mr. Stewart, Argenteuil), should lend himself to any such scheme as that which has been propounded in these orders in council.
I would like to say a word or two with regard to the immigration we have had to this country in the last ten years. From 1911 to 1921 we received in this country
1.800.000	immigrants, a fairly respectable number. How many of these do you think are now in Canada? Only 600,000 of these 1,800,000. What has become of the others? I am quite in accord with what the hon. member for Marquette (Mr. Cre-rar) said to-day, that we ought to have a commission or devise some sort of a scheme to ascertain what has become of these
1.200.000	people who have left. At present their disappearance is as mysterious as the disappearance of the ten tribes of the race to which I belong. We do not know what has become of them.


Mr.   McM ASTER@: Does the hon. member belong to one of the lost ten tribes?


Samuel William Jacobs: I feel sometimes when I am in the company of my good friend from Brome, that I am lost.


Mr.   McM ASTER@: 
Mr. LAFLAMME:: They will, if you give them a chance.


Samuel William Jacobs: In what sense?


Napoléon Kemner Laflamme: In the sense you
mean.


Samuel William Jacobs: I do not think that any French Canadian would want to have his race assimilated with any other race in this country, in order to produce something that was not entirely French Canadian. I do not blame them; I would not have it myself. The question just shows how curious notions will sometimes get together curious people. Can you imagine anything so different as the Imperial Order of the Daughters of the Empire, the Bishop of London, Le Devoir, and a few others of that tytpe.
The hon. member from East York (Mr. Harris) in a burst of youthful enthusiasm, because he has only been here for a short time, undertook to read to this House some statistics which he obtained, I do not know where, in which it was declared that the foreign born were responsible for fifty per cent of the crime ir Toronto.


Napoléon Kemner Laflamme: There is no crime in Toronto.


Samuel William Jacobs: My hon. friend from
Drummond-Arthabaska (Mr. Laflamme) is an expert on crime, and if he says there is no crime in Toronto, it is probably because he does not practice in Toronto.


Mr.   McM ASTER@: They get off in
Toronto.


Samuel William Jacobs: The hon. member undertook to read to the House a statement to the effect that fifty per cent of the crilme in Toronto was due to the foreign born. I doubted the statement at the time, and I took the trouble to obtain from the officii1 statistician some figures with regard t* crime in Canada-and I suppose Toronto may be included in Canada-which puts an entirely different phase on the question. I find that, from the year 1914 to 1920 there
The Budget-Mr. Jacobs


James Dew Chaplin: We have always had Orders in Council.


Samuel William Jacobs: We have had Orders in Council, but I venture to say that Orders in Council of that kind and importance should have been tabled and should have been discussed. Had there been a discussion, I would not have been taking up the time of this House to-night in order to bring the matter to the attention of the country. But I can assure you, Mr. Speaker, that this matter is of such vital importance to thousands and tens of thousands of people in this country today, that I felt it was absolutely necessary for me to bring it to the attention of the House. I have been flooded with telegrams, letters and petitions from all parts of the country relating to this Order in Council. The minister is a very kind-hearted man; a most kind-hearted man; he cannot bear to think of these people being brought to our shores and then being deported, so he declares that they shall not come here at all. It is like the story of the man to whom a poor devil appealed for alms. He pressed the button for his butler, and said: "Kick this man out; he is breaking my heart."
Now that the matter has been brought to the attention of the minister and that he sees that some of his followers, not only myself, but a number of others, feel so strongly upon this question, I hope he will see his way clear to giving us some relief. We at least should have been consulted on a matter of this kind. When I heard that the question was about to be discussed by a subcommittee of the Cabinet, I made certain representations that I should like to be heard; but no doubt, in the stress of the business of the session, the matter was overlooked, and the first I knew about it was that an Order in Council had been duly passed. But the hand that creates the Order in Council can also destroy it. I believe that after the minister has had before him the necessary delegations protesting most vigorously against this Order in Council, not only delegations from people who are particularly affected inasmuch as their relatives are unable to come into this country, but bodies of such an important character as the principal boards of trade, the principal transportation companies, and others, he will see his way clear to making some provision which will give us relief from this obnoxious Order in Council. Finally, as my last word to him and to the Government, I would say that, when important matters of this kind are to be disposed of and when the House is in session, they ought to see to it that members of the House of Commons who, after all, are the masters, should have an opportunity of discussing such a matter and not having it ru'shed through as they have done by an Order in Council.
On motion of Mr. Stewart (Leeds) the debate was adjourned.
On motion of Mr. Graham, the House adjourned at 12.25 a.m. Tuesday.
Tuesday, June 6, 1922.