1924-04-29

UNITED CHURCH OF CANADA

[Stage Direction]
Petitions to the number of 151 were presented on the subject of Bill No. 47, to incorporate the United Church of Canada. A list of these petitions and of the names of
The Budget-Mr. Marler
[Stage Direction]
the members by whom they were severally presented appeal's on page 1829.


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That a special committee be appointed to make an inquiry into an old age pension system for Canada, with power to send for persons, papers and records and to report from time to time, and that the said committee do consist of the following named members, namely, Messrs. Fontaine, Irvine, Logan, Mc-Conica, Munro, Neill, Preston, Raymond, Robichaud, Sexsmith, Spence and St. Pere.


Mr. SPEAKER:: Notice is required for this motion, unless by unanimous consent.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 65, to amend the Judges' Act.
He said: Under statute of the province of Ontario enacted in 1919 the Lieutenant Governor in Council 'may designate certain counties to form a county court district, and in many cases counties have been so grouped. The purpose of the amendment is. to permit the Governor in Council to fix a place for the residence of the judge or judges in such districts when so created.
Mr. MACLEAN (York):: Does the proposed measure make provision for any changes or readjustments of salaries?


Mr. LAPOINTE:: No.
Motion agreed to and bill read the first time.



THE BUDGET


[Stage Direction]
The House resumed from Monday, April 28, the debate on the motion of Hon. J. A. Robb (Acting 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 Mr. Woods worth.
Mr. HERBERT MARLER (St. Lawrence-St. George):: entirely out of consideration any book-keeping entries or any accounting, as a most excellent financial statement brought down by the government this year. This government, as I have stated before and can only repeat to-day, has had to bear great expenditures, partly due to the war and partly due to causes over which they have absolutely no control. But what I venture to ask,-and I do it with all respect-is: Why try to place before the public a difficult system of accounting which the public itself cannot be expected to understand? Why not place before the public the actual condition of receipts and expenditures as they may occur from year to year, taking the public into our confidence as questions arise, and asking the public to assist us in governing this country which is so exceedingly difficult to govern? Therefore, taking the railway expenditures to which I have referred and charging back the amount of the guarantee utilized for the purpose, I do not think that what might be called a direct surplus can be ,brought down this year; as a matter of fact, I would say that there is a small deficit. But let me again repeat, Mr. Speaker, that there is nothing whatsoever to be ashamed of in this account, even with these bookkeeping entries reversed. It is an excellent statement for the government to bring down under all the conditions; it is a step very much in the right direction. When we consider that last year there was a deficit of $31,500,000, and that this year, even with the most drastic system of bookkeeping that one can bring forward, that deficit is reduced at the outside to a very small amount, I think the Acting Minister of Finance and the government itself are very much to be congratulated on bringing forward a statement of that character.


Mr. McMASTER:: How does the hon.
member treat the guarantee by the government of the Canadian National Railway Company's serial equipment issue of $22,500,000? Does he add that to the debt as well?


Herbert Meredith Marler: I do not know when that
issue was made.	*	.


Andrew Ross McMaster: That issue was made
August, 1923. I refer to page 1214 of Hansard, top of the second column.
Mr. MARLER No, I have not taken that into account in this computation.


Andrew Ross McMaster: I am merely asking for information. If the hon. member thinks it wise and proper-and I am inclined to agree with him-that the $50,000,000 guarantee bond issue of the Canadian National Railways should be a charge against the national debt,
[Mr. Marler 1
why does he not treat this $22,500,000 in the same way?


Herbert Meredith Marler: I did not treat the $22,-
500,000 in the same manner, because I had no particular information as to what that was for. It might have been for the refunding of some previous outstanding obligation. If the hon. member for Brome (Mr. Mc-Master) can enlighten me as to what it was for, very good. I do not see how the hon. gentleman can tell from the information given, what this $22,500,000 was for, and I do not think it advisable to jump at a conclusion. I would simply treat the railway expenditure during the year 1923-24 on the same basis as the railway expenditure was treated during the- year 1922-23, and would have brought down the account accordingly. That is why I say that, in view of the bringing down of the items in the manner as I have just described to the House, I think the government has brought down an exceedingly good statement.


Mr. PRITCHARD:: Would it not be
necessar3r in a proper system of accounting to ascertain by some means whether the National Railways is a better asset owing to that expenditure-whether the country has not added to its assets by that expenditure?


Herbert Meredith Marler: Yes. The hon. gentleman's question is a perfectly good one in every way; but I think that in that case he will have to set out all the expenditure made on the National Railways before he can definitely ear-mark this particular $50,000,000 of guarantee that was brought down last year as being an asset of the country. There is no denying for a moment that the proceeds of this $50,000,000 of guarantee is of great advantage to the railway, but the point I am considering now is a cash statement, which is quite a different thing from an investment statement. I hope I have answered the hon. gentleman's question to his satisfaction. I was about to say that one should understand the situation, in order that the various charges made by the budget this year-and there are considerable alterations in 'the fiscal policy of this Dominion-


Mr. ROBB:: I am sure my hon. friend
wants to be fair, and before he deals with the fiscal policy, I would like to ask him a question. He has made a comparison as between 1922 and 1923. Would he make a comparison as between 1921 and 1922, when the loans were id'entically the same amount- $50,000,000?

The Budget-Mr. Marler


Herbert Meredith Marler: In answer to the question of the Acting Minister of Finance, I may say that I have not made a comparison. I may also say in answer to his question that I am entirely certain and quite confident that the manner in which he has treated this matter is a perfectly proper way in which to treat it. I am not questioning that for one single instant. I have every reason to believe that this railway expenditure very likely was treated in another way in other years. I am simply treating it, as I answered my hon. friend across the way a few moments ago, as a question of cash received and cash paid out during the fiscal year, comparing it with the year 1922-23. But there is not the slightest question in my mind-and I want to make this perfectly clear to every hon. member in the House-that the Acting Minister of Finance is capable of attempting to make the slightest concealment in any way.
It is in view of this financial state of affairs that the government brings down certain proposals as regards the remission of taxation.


Sir HENRY DRAYTON:: The hon. member has not yet told] us the amount of deficit he figured. I am asking for information. What does he find?


Herbert Meredith Marler: If I may contradict my
hon. friend from West York (Sir Henry Drayton), I thought I had said around $2,000,000 In view of the statement, Mr. Speaker, the government brings down certain proposals as regards that statement. These proposals consist of two parts; first a remission of the sales tax, which is direct taxation; and second, certain cancellations of customs duties, which is indirect taxation, amounting altogether to the sum of $24,000,000. I take it that the basis for bringing down this remission in taxation is the surplus of $30,000,000 which has been spoken of. Whether that surplus exists or not is a question for discussion. But whether it exists or not, no doubt, in bringing down these statements, the government has taken into consideration the expectation that the railways will pay better next year. I sincerely hope they will. No doubt the government has also taken into consideration the fact that very likely there will be a diminution in the public revenues owing to refunds under the old sales tax, and also the fact that business in Canada at the present time is somewhat depressed;-no doubt these things have been taken into consideration by the government. That being the case, I most sincerely hope that next year the government will be able
to bring down as good a statement of affairs [DOT] as it has brought down this year. All these matters I sincerely and earnestly hope for on the part of the government, because, after all, it is the people of the Dominion of Canada whom we wish to see benefited.
But when we are told, through the Minister of the Interior (Mr. Stewart), that the reductions in the tariff mean a loss to revenue ol only $750,000 and a consequent gain by reason of such cancellations, I think we have to ask ourselves one of two questions. The first is w'hether the reduction amounting to $750,000 is worth while owing to the dislocation in business which all these changes will occasion, and the second is whether that is an actual computation or merely an estimated amount.
It seems to me that the amount is very largely estimated, and that possibly through a greater loss of revenue the government might not be able to reduce further next year certain war taxes which are now in existence and which,
I think, should be reduced. The Minister of the Interior also stated on the floor of the House a few days ago another effect that this cancellation of $750,000 would have. It appears, to me at least, that his reasons were far too visionary even to merit passing notice. The government, however, by reason of these proposals is inaugurating what it calls a real national policy. By reason of the proposals now brought down it expects to effect and accomplish the various matters which the Acting Minister of Finance (Mr. Robb) speaks about in the closing part of his address. This is what he said, and I would commend his words to hon. members:
We have great natural resources. We have certain basic industries, upon the success of which depend the growth of all other industries, and the greater development of our trade. Of these basic industries,
I would place agriculture, in all its varied branches, first. Next to agriculture, I would place our forests, our minerals and our fisheries. A real, national policy is a policy that will encourage the growth and development of these basic industries.


Some hon. MEMBERS:: Hear, hear.


Herbert Meredith Marler: I am so delighted in this
speech to receive applause.
Mr. McMASTER':	Go on in that way
and you will.


Herbert Meredith Marler: (reading):
The more of the products of the farm, the fisheries, the mines and the forest we have going to market, the greater will be the earnings of our transportation companies-the greater the purchasing power of the nation and as a consequence we shall have factories running full time and tradesmen working overtime to supply the needs of those who witl have money to buy.
Some hon. MEMBERS; Hear, hear.
The Budget-Mr. Marler


Herbert Meredith Marler: I am not saying that I
disagree with this policy, on the contrary I entirely agree with it; but I disagree with the means of bringing about such a policy. We can phrase this statement in more simple language and put it in this way: That, provided we have a policy which will cure the ills of the farm, the forest, the mines and the fisheries-and I think I should mention the ills of the Progressive party opposite-then our railways will pay and our factories will work at full time. But how does the government go about this? What is this cure? In the first place it reduces the sales tax generally from 6 per cent to 5 per cent. Against that, I have nothing to say. It then picks out certain preferred articles and eliminates the sales tax entirely. Against that I have nothing particular to say excepting, perhaps, that it seems to me that if the sales tax had been reduced to 4 per cent all round such reduction would have assisted those particular industries and industries in general throughout the whole country. But as to what the government has done in this respect I have no very great criticism to offer. If the minister had stopped at that point and had waited until a proper inquiry into the tariff could be made, I think nobody would have had very much cause for complaint excepting, perhaps, a few of our industries which certainly need help at the present time. If an inquiry into the tariff had been made, I think we could then have seen, and seen very clearly, whether or not reductions could properly be made. I believe the:e are reductions that could have been made. We would have seen in other places where, perhaps, certain slight increases should be effected. I now wait for the cheers of the Progressive party.


Mr. CALDWELL:: It is the wrong point.


Herbert Meredith Marler: What we certainly could
have ascertained-and this is the point that I desire to bring home particularly to the House- is where our industrial workers could have had steady employment instead of leaving this country and going to the United States. It was not unfair for me to ask, as I did ask in a most temperate manner on another occasion, that this inquiry be gone into, with a view, not of increasing the tariff, but of making a fair tariff, not in the interest of the manufacturers particularly, but more in the interest of the workers, the artisans, so that we could keep our Canadians, and especially our French Canadians in Quebec, employed and continuing to live in this country. But, as the matter has turned out, unfortunately, this request which I made some

time ago of the government was not carried out. I think it is only fair to state that the government should have known that, on account of our small population, our climatic and other conditions, and depreciated currency, we cannot in this country compete at the present time with the low paid workers of France, Belgium and England. I think the government knew and knows at the present time that, owing to mass production and slaughtering of goods from the United States, we cannot compete just at the moment with manufacturers in the United States. I think it knew, if I may say so, that owing to the declaration in the Speech from the Throne regarding the question of taxation, business in the country has been marking time for the past eight weeks. And these things I think it is right and proper for one to have expected the government to know and to take into consideration. But its answer to these expectations, its answer to the reasonable requests which were put forward by pertain members in the House, is a letting down still further of the bars to the United States. If that policy is to keep our artisans and workmen employed and our mills working overtime, I for one cannot see it; I am quite certain that it will, on the contrary, keep the mills in the United States, and their artisans, engaged overtime. Yes, Mr. Speaker, this is the cure, the cure for the ills of the farm, of the forest and of the mine. All I can say is that I doubt whether the lowering of the tariff is such a cure; at any rate it strikes me as a very Spartan remedy, indeed, as one which will necessitate a lingering illness and perhaps certain death among certain industries. And in the meantime the workman and his family, the clerk and his family, owing to enforced idleness and possible starvation will gradually, I suppose, have became purged of that terrible demon of moderate protection; and after a further period of probation they will probably rise purified and will be ready to sit in the ranks of the Progessive party and sing the glories of free trade. I presume that the Progressives would be quite willing to take them then. It seems to me, Sir, that this particular cure is brought forward so that the blessing of the Progressive party may descend upon the old Liberal party. -the old Liberal party with its traditions of Laurier and Fielding-to the end, to use the words of the Minister of the Interior (Mr. Stewart, Argenteuil), that the death knell of protection may be sounded.
Let me examine these tariff changes at somewhat closer range. First of all the tariff is reduced on agricultural implements. I will not attempt, in the time at my disposal to-

The Budget-Mr. Marler
day, to take up all the questions that arise in connection with the various changes that are made in the tariff. But the tariff on agricultural implements is reduced by rates varying from 4 per cent to 12i per cent. Leaving entirely out of consideration for the moment the question whether or not such reduction is going to place the agricultural implement makers in such a position that they will not be able to carry on, let us estimate what especial advantage this lowering in the tariff on agricultural implements will give to the farmer of Quebec and Ontario and to the farmer of the West. I doubt very much, Mr. Speaker, whether the lowering of these particular duties will mean more to the farmer of Ontario and Quebec than $8 a year, or more than from $12 to $lo a year to the farmer of the western provinces. If that is a reasonable supposition, the question arises, is $8 a year going to save the agricultural industry in Quebec, or $15 a year save that industry in western Canada? Why, so far as the province of Quebec is concerned, any small gain of that description will be far more than offset by the losses which will ensue through the depletion of urban markets. But take the situation in regard to the agricultural implement makers. All the small gains which go to the various consumers of their goods are gathered together in the shape of one huge loss to that industry, putting that particular industry in jeopardy; in other words, every gain of $8 or of $15, or whatever it may be, goes to swell the aggregate loss which will be incurred by the agricultural implement industry, an industry which to-day is not in too good a shape. But the government says to the makers of agricultural implements: "It is true we are reducing your duties; it is true that we are doing so, for reasons which it is not necessary to relate at great length. But in place of that we will allow you to bring in free all articles used in the manufacture of your various implements; that is to say, all your rubber, your cotton, your iron and steel, and the hundred and one other things which are utilized in the manufacture of your machines, you shall be allowed to bring in either free of duty or under a maximum duty of 71 per cent." "And more than that," they say, "under drawback item 1026, on all materials which you had on hand on April 11 we will allow you -99 per cent, under one condition, namely, that these materials on which we shall give you that drawback of 99 per cent shall be materials that are imported and not materials made by Canadian workmen in Canadian factories. Well, Sir, several thoughts are suggested by an arl Mr. Marler. 1
rangement of that description. First of all, this question presents itself:	Will this
elaborate system of drawbacks, and the permission for raw materials to be brought in free of duty, or practically so, offset the loss in duty to the agricultural implement maker? I do not think it can be said at the present time that it will, nor do I think it can be claimed that it will not; in other words, that particular question is at present quite indeterminate. And the second thought that is suggested is this: Surely no one expects that this is the last cut in the duty on agricultural implements.


Andrew Ross McMaster: Hear, hear.


Herbert Meredith Marler: My hon. friend from Brome says "hear, hear.'" The wish no doubt is father to the thought. Now, the duties on agricultural implements have been reduced time and time again, and they will be reduced again, without the slightest shadow of a doubt, so far as I can estimate the situation, until our market is wide open to the United States. The third thought that occurs to one is this: Even if the agricultural implement maker is compensated by reason of the opportunity to procure his materials from the United States in the way I have stated, is it fair to the hundreds of other industries in this country for us to say to the makers of agricultural implements, who consume millions of dollars of materials annually, that they may import their goods at a rate of duty which will give them a cost lower than the factories in Canada can quote? Is it fair to do that at the expense of the Canadian workman? Is it fair to throw those men, as they are being thrown, by this particular article of the tariff, bodily into the hands of the American manufacturer?-I ask, is it fair to the Canadian workmen who are engaged in the hundred and one other industries in the Dominion? I do not think it is; and I am free to admit that this policy astonishes me; for I cannot understand how hon. members from the province of Quebec can fail to realise that while a small saving is proposed to the farmer of $8 a year, there are being thrown out of employment in the cities the sons and brothers of these people, who are at work in these particular factories. Surely hon. gentlemen must see that we are throwing these men bodily to the Americans, from whom these particular French Canadians saved Canada twice in the course of her history, once in 1775 under Voyer and a second time, in 1812, under de Salaberry at Chateau-guay. That is how this policy appeals to me, Mr. Speaker.
But what benefit will the West derive even if the entire tariff is taken off agricultural
The Budget-Mr. Marler

implements? Surely the West does not imagine for a moment that after our agricultural implement maker is put out of existence they are going to get agricultural implements cheaper.


Mr. HOEY:: No.


Herbert Meredith Marler: Oh, my hon. friend from
Springfield (Mr. Hoey) says he is not going to put the agricultural implement industry out of existence?


Robert Alexander Hoey: He is not going to be put out of existence; don't worry.


Herbert Meredith Marler: That is the first cheerful
remark I have heard for some time.


Robert Alexander Hoey: I am always optimistic.


Herbert Meredith Marler: Will my hon. friend from
Springfield guarantee that?


Robert Alexander Hoey: Yes, I will stake my reputation on that for ten years.


Herbert Meredith Marler: I suppose in that case I
am justified in stating that my hon. friend will vote against any further reduction of duties?


Robert Alexander Hoey: He will vote for further reductions, believing it will help the industry still further rather than hinder it.


Herbert Meredith Marler: My hon. friend believes
in a lingering, rather than a sudden death then?


Robert Alexander Hoey: No, not death at all; it is
inspiration.


Herbert Meredith Marler: My hon. friend believes in inspiration?


Robert Alexander Hoey: Inspiration and animation.


Herbert Meredith Marler: Well, those are two theoretical words which I have heard little boys using when chasing shadows and rainbows.


Some hon. MEMBERS:: Oh, oh.


Herbert Meredith Marler: Some hon. gentlemen seem to treat this as a joke. We are playing with human lives in this matter. We have got over the day of chasing rainbows; we are down to facts.


Mr. GARLAND (Bow River):: It is about time.


Herbert Meredith Marler: Oh, my hon. friend from
Bow River-the place where all the slaves come from.


Edward Joseph Garland: Yes, slaves of the implement manufacturers and the protective tariff.


Herbert Meredith Marler: The same way with the
people in Montreal-they are all slaves too.


Edward Joseph Garland: Not all of
them; I know one hon. gentleman who is not.


Mr. CRERAR:: I dislike interrupting an
hon. member when he is speaking, but my hon. friend is very apprehensive as to the future of the agricultural implement industry in Canada as a result of the reduction in duties brought about by the budget. The cream separator industry in this country has been free for many, many years. Will my hon. friend tell me why, if this industry can be built up without any protection whatever, the plow industry cannot also be built up in the same way where the elements are precisely the same?


Herbert Meredith Marler: I am really very much
obliged to my distinguished friend for asking me the question. The agricultural implement industry is, I think, subject to a great deal more competition than the other industry which he speaks about.


Some hon. MEMBERS:: No.


Herbert Meredith Marler: But in any event let me
say this to the hon. member for Marquette (Mr. Crerar):	I am not particularly picking
out the agricultural implement industry.


Thomas Alexander Crerar: Then I misunderstood my hon. friend.


Herbert Meredith Marler: I was using it as an example. My hon. friend has brought the matter to my attention better than I could have done myself. As I say, I am not picking out any particular industry, but I claim-a claim which, I know, is diametrically opposed by my hon. friend-that we should be a self-contained nation, manufacturing what we want instead of being dependent on other countries for our needs. I say that if the agricultural implement industry is threatened, or does go out of existence, then we shall be dependent on the United States for our agricultural implements. I doubt if this industry can be built up in course of time in the manner my hon. friend has spoken about. I do not think it can be, but I may be wrong in that respect. But I am speaking generally of our manufacturers throughout the whole Dominion when I oppose tariff reductions, and of course I do not expect my hon. friend from Marquette to agree with me on the point.
If the government thinks that the tariff reductions now proposed are going to cheapen the production of goods generally in this country, I can only say that in my view this will not be borne out by results, for

The Budget-Mr. Marler
the reason that in every factory certain overhead costs have to be taken into consideration. Where the factory is producing to capacity the manufactured articles necessarily bear a very much lower proportion to these costs; conversely, if the factory is not working to its fullest capacity, then the overhead costs bear an inverse ratio on the manufactured product. Therefore if the agricultural implement maker, for example, can bring in various materials for use in his manufactured product, to that extent we diminish the output of the Canadian factory which supplies those materials; and so we make goods dearer rather than cheaper. It means that every binder or mower brought into this country simply increases the cost of every binder and mower made in our factories. In like manner, every ton of steel imported diminishes our own production of steel to that extent, and consequently the cost of production of every ton of steel in our Canadian plants is enhanced proportionately. But supposing the actual price of agricultural implements is reduced by reason of the proposed! tariff reductions, thus stimulating the importation of such implements, it means that all the materials entering into their manufacture which are produced in thousands of our factories will be increased in price owing to lessened production; consequently the cost of goods generally is bound to be increased by means of such a policy. As a matter of fact, it seems to me that such a policy is not only certain to take work away from our Canadian workmen, but it must inevitably increase the cost of our manufactured goods.
Now, Sir, I am perfectly well aware that in rural ridings of the province of Quebec, and in rural ridings perhaps of the province of Ontario, it will be said: Because we have no factories in certain ridings this policy does not affect them in the slightest degree.


Mr. HOCKEN:: Oh, no, Ontario does not
say that.


Ernest Lapointe: The hon. member for
West Toronto (Mr. Hocken) does not say it.


Herbert Meredith Marler: Well, as a matter of fact, I say that this policy does affect the rural ridings just as much as it affects the urban sections of the country-


James Alexander Robb: Hear, hear.


Herbert Meredith Marler: Adversely-not favourably; and for this reason; it means that in the province of Quebec-and I am speaking of
this province particularly-at the present time the farmer's markets are not in the United States or other foreign countries, but in the large cities and nearby towns. In other words, the urban population are his best customer. By taking work away from the industrial population-and work is taken away by means of the entry of very many materials from the United States-you reduce that population, and in turn you deplete the farmer's market, with the result that he will not get as good a price for his products, and the small gain which he is expecting to derive from a cheaper harrow or a cheaper plow will quickly fade away. I think hon. members from the province of Quebec should take this into consideration and search their hearts well before they vote in favour of this policy, the adoption of which will certainly prevent any increase in our urban population. And they can also take into consideration the fact that if we have not any place for our rural people to go to work they will certainly go to the United States; they will certainly not stay in Canada.


Mr. BOUCHARD:: They will stay on the farm.


Herbert Meredith Marler: The hon. member for
Kamouraska (Mr. Bouchard) says they will stay on the farm. Who, then, are the farmers going to sell to? To one another?


Joseph Georges Bouchard: In the foreign markets.


Herbert Meredith Marler: How much foreign market has the province of Quebec, say?


Joseph Georges Bouchard: We use the British
market.


Herbert Meredith Marler: And the urban market
too. Is the urban market nothing to the farmer of the province of Quebec?


Joseph Georges Bouchard: It is something of
course.


Herbert Meredith Marler: Only in some things-nothing of any consequence at all?


Joseph Georges Bouchard: Oh no, I do not say that.


Herbert Meredith Marler: Mr. Speaker, may I pass on to another part of my remarks? I cannot believe that these numerous and varied changes in the tariff are in accord with the Laurier-Fielding idea of tariff stability. I know perfectly well that hon. members on this side will immediately retort: "Look at the resolutions which Sir Wilfrid Laurier or Mr. Fielding moved and supported while in opposition; these particular policies are in accord with
The Budget-Mr. Marler

those resolutions." I do not think we are so much concerned' with what those great and distinguished statesmen did while in opposition; we are more concerned with what they did while in power. While in opposition the intent may possibly be shown, but when in power attention is given to the consequence of the misuse of responsibility. There are instances, in any event, in the Liberal party- and there is no reason why there should not be such instances-where matters have been changed. If I remember rightly, the hon. member for Brome one year moved a resolution as regards directorships in connection with the holding of cabinet positions, and that was approved by the Liberal party while in opposition, but when they came into power, why, they considered that that resolution should not be supported. There is no reason why these changes should not take place.


Andrew Ross McMaster: I think that certain
events that have happened in the financial and other worlds recently have rather justified the position then taken by the member for Brome (Mr. McMaster).


Mr. JACOBS:: Does my hon. friend suggest that because members of parliament have been connected with banks, that is why they burst?


Herbert Meredith Marler: Let us look, Mr. Speaker, for our examples of guiding principles to what the Minister of Finance did as regards tariff matters while his party was in power. The guiding principle of the Fielding tariff during the whole course of its administration was stability in tariff, joined with an incidental measure of protection. Hon. members may look in vain through the seventeen budget speeches of the present Minister of Finance for any other basis than that; it is the only conclusion which can be drawn. These principles were affirmed time and time again by Mr. Fielding and were also approved by Sir Wilfrid Laurier whose Minister of Finance Mr. Fielding was for nearly fifteen years.
As regards tariff stability, between 1896 and 1907, a period of over ten years, Mr. Fielding made only sixty alterations in his tariff by act of parliament, and from 1907 to 1911 he made only sixteen alterations in like manner. Yes, Sir, you can read the budget speeches of Mr. Fielding: you will find that when he brought down his first proposals in 1897-that was not his great scientific tariff-certain duties were raised and others were lowered, but the general trend of thought throughout the whole of the tariffs brought down at that time was that every industry should be treated fairly and equitably.

I stated, Mr. Speaker, that the two guiding principles of the Fielding tariff were stability and a measure of incidental protection. In 1898 Mr. Fielding stated, as regards the question of stability:
But we think, Sir, on the whole, believing as we do that the changes in the tariff should not be numerous or frequent, believing that we should have a large measure of tariff stability, believing that the public understand the policy of the government in this respect and will be content to have us carry it out in that spirit of moderation and caution we have so far evinced, we wish to announce to the House that it is not our intention to make any numerous changes in the tariff at the present session.
And) in 1899 he was even more emphatic in regard to tariff stability. He said:
I wish however to point out several reasons why it is not expedient to change the tariff at present. Tariff stability is always important if we are to have that confidence in business without which we cannot hope to have prosperous times. Therefore even though in all respects the tariff may not be as we would like it, it is better to bear some imperfections than to enter upon revisions which might create disturbances in the business of the country.
In 1901 he brought out an important point, namely, that making changes in one item of the tariff means making changes in many others.
Now, I pass, Mr. Speaker, over certain intervening years as regards the administration of the Laurier-Fielding tariff and come down to 1906. That was the year before Mr. Fielding brought in his great scientific tariff, a tariff which has undoubtedly stood the test of time, a tariff under which industries prospered in every way. Before he brought down this important change in the tariff in 1906 he made a statement in the House which let every business know that although there was to be a revision of the tariff, industry and business need have no fear as to what would happen. This is what he said:
We hope during the recess, if this session does not extend to too great a length, to take up that work-
He was referring to tariff revision.
-and at the November session, unless there should be delays in the present session to cause a change in the programme, we hope to bring forward a revised tariff, not one which will make any great changes perhaps, but one which will meet such new conditions as have arisen and we hope we shall have the same measure of success that we have had in the past in devising a tariff which will meet the requirements of all interests in the country and that we shall have again a period of tariff stability under which the industries of Canada will go on and prosper as they have done in the past nine years.
That was the year 1906. Now as you are aware, in 1911 the Liberal party went out of power and did not come into power again until December, T921. As was to be expected, and as was hoped for by all the electorate

The Budget-Mr. Marler
of Canada, Mr. Fielding was again Minister of Finance. When he returned to office the tariff he found in effect was his own tariff, the tariff of 1907. As everybody knows, he was privileged to make two budget speeches only, in May 1922 and in May 1923. In those budgets he made certain small alterations in the tariff, changes made in his cautious way, mostly of 2J- per cent, and one or two of 5 per cent, but not very many. As a matter of fact, he was criticized by the opposition that year, I think by my hon. friend from West York (Sir Henry Drayton) who called these changes piffling and microscopic, and Mr. Fielding's reply to that criticism was in these words, and I commend them to hon. gentlemen in view of the changes that have been made in the tariff this year amounting to much more than 2i and 5 per cent:
When he goes to the manufacturing districts, he will not find that these are viewed as mild as piffling reductions. They are reductions which account for a great deal. Two and a half per cent of an item in a manufacturing industry is often regarded as a very serious injury, and I know to-day there are many interests in Canada which are alarmed at the reductions that are made.
After that came the last budget speech which this great statesman made in the House of Commons in 1923, and in that budget again there were comparatively few changes in the tariff. Indeed, hon. members will remember that in his speech of last year the question of tariff stability was particularly emphasized. Many members. I think I am right in saying, thought that that was a new idea to be put into Mr. Fielding's tariff speeches, but as a matter of fact, it was an old idea and a good idea that had occurred to him, not once, but time and time again in the seventeen budget speeches which lie had made. In that budget speech of May, 1923, he said:
There is a thought which does not receive as much consideration as I think sometimes should be given in the public discussions, and that is the desirability of something like tariff stability. Business men do not like to be always threatened with changes in the tariff.
Later on in the same speech he said:
The tariff as it will be, when the changes proposed to-day come into effect, will be a moderate tariff and probably as low as the country can afford to have under present conditions.
Further on he stresses the question of tariff stability:
Business men should be able to carry on their various enterprises without the fear of being soon disturbed by further changes.
Now Sir, as I said a moment ago there were two inherent principles in Mr. Fielding's tariff administration:	The first
was the desirability of tariff stability, of
which I have spoken and in regard to which I have given certain instances, and the second was the measure of incidental protection which was always a part of that particular policy. Mr. Fielding in 1897, at the beginning of his career as Minister of Finance, said:
It is a tariff policy based on the necessities of our revenue, a revenue tariff which incidentally affords a very considerable degree of encouragement to those engaged in Canadian industries and having as its leading principle the principle of the British preferential tariff.
Later on he spoke at great length on the same subject as regards incidental protection. In the year 1904, if I remember rightly, a resolution was brought forward by the Conservatives stating that the country should have adequate protection. Mr. Fielding in reply to that stated he thought the Lau-rier-Fielding tariff did afford sufficient protection at the time and had incidental protection in it, and he went on to say:
I think, Sir, as to whether or not it is adequate protection we have some evidence of a gratifying character that when the tariff without being excessive is high enough to bring some American industries across the line, and a tariff which is able to bring these industries into Canada looks very much like a tariff that affords adequate protection.
Then he goes on to speak of the great industries in the city of Hamilton and the city of Toronto, and I think in that speech also he referred to the great industries in the city of Sydney. I have always held Mr. Speaker, that the Fielding tariff had incidental protection in it, sufficient protection to enable our industries to go on in a stable manner, sufficient protection to prevent those industries being swamped by American industries. Hon. members can well remember the antidumping provisions which Mr. Fielding himself put forward; they can also remember the duty which he imposed in 1903 on steel rails coming into the country, and the minimum tariff of 30 per cent which he placed on the woollen industry in 1904 when that industry was in a very depressed state. But in all this, and in all that I have said, Mr. Speaker, the two points which I desire to stress and emphasize in this House to-day are that the Laurier-Fielding tariff was a tariff of stability and of incidental protection. And Sir Wilfrid Laurier approved of that tariff time and1 time again. For example, in 1904 Sir Wilfrid Laurier said:
We have a tariff against the United States varying from 25 per cent to 35 per cent, an average of 28 per cent. Under that tariff manufacturers ought to thrive. I am told, however, that they do not thrive and that we ought to increase the tariff. For my part I am always prepared to consider the case of an industry which being in existence finds itself pressed by foreign competition.
The Budget-Mr. Marler

Later on in the same speech, regarding goods coming in from the United States, he said:
But there is one class of goods which come from the United States which have come in in a manner which we regard as undue and to which we want to put a stop. That is the class of goods that have come in by dumping and slaughtering and by making Canada a dumping ground and a slaughter market. We have taken means to prevent this.
Later on he spoke with reference to present methods of manufacturing, and he ended his speech with these words:
We have in this country as in other countries, and indeed in all countries, manufactures carried on under a customs tariff whereby a fictitious atmosphere has created artificial conditions under which manufacturers are carrying on their operations. They have a right to expect therefore that the condition of things under which they have built up their manufacturers shall be maintained. This policy which we have adopted we believe will commend itself to the fair judgment of Canadian people the more it is debated.
Now, Sir, I have emphasized' to some considerable extent what my conception was of the Laurier-Fielding tariff. I have no desire, Mr. Speaker, to disguise my feelings on the question of tariffs. I believe that a moderate tariff-


William Lyon Mackenzie King: May I interrupt my hon. friend a moment before he leaves his reference to Mr. Fielding? May I ask him if his remarks are intended to imply that the Minister of Finance (Mr. Fielding) is not heartily behind1 the Acting Minister of Finance (Mr. Robb) in the budget which he has brought down?


Herbert Meredith Marler: It is utterly impossible to make any such implication in any way. I am simply stating that I do not think the changes in the tariff that have been introduced are in line with the past traditions of the Laurier-Fielding tariff.


William Lyon Mackenzie King: It is only fair to the Minister of Finance, seeing that he is not here to speak for himself, to say to my hon. friend that he is as wholly and heartily in sympathy with the Acting Minister of Finance in the budget he has brought down, as is every one of his colleagues in the cabinet.


Herbert Meredith Marler: I certainly accept the
assurance of the right hon. Prime Minister without the slightest hesitation. There was no implication on my part whatever of any kind or description in that respect. I was merely drawing my own conclusion, which I had a perfect right to draw, in regard to. the past administration of the Laurier-Fielding tariff as it appealed to me. The Prime Minister has made a declaration, and whether I am

gratified to hear him make it or not does not matter in the very least degree, but naturally I unreservedly accept it, coming as it does from the Prime Minister.
As regards the question of tariff, I have not any particular delusions. Perhaps if we were to have perpetual peace and no tariffs raised against us, we might then be able to have the ideal conditions which possibly the hon. member for Brome (Mr. Mc-Master) desires that some day we shall have. But we have not ideal conditions in this country, and we have to deal with conditions as we find them I am quite ready to admit, even under certain circumstances that we might be able to buy goods cheaper abroad, but notwithstanding that fact, it seems to me that that is only a temporary condition and is not necessarily a condition that will last. Both Sir Wilfrid Laurier and the Right Hon. W. S. Fielding saw the effect of the temporary advantages which might be gained in buying goods cheaper abroad. Sir Wilfrid Laurier in 1904 said:
But whilst it may be a benefit to the individual Canadian consumer it is to the detriment of our community as a whole, because it throws a number of our people out of employment and causes the destruction of large amounts of capital invested in these industries.
And as late as 1920 Mr. Fielding speaking on the same question said:
We came to the conclusion that if big manufacturing concerns, in the United States had come here and closed up Canadian manufacturing interests, it was right that there should be a special duty made to meet that condition. It was considered by some as a piece of freak legislation, but I am glad to know it has been copied in other countries, and that the present government have paid us the compliment of continuing it on the statute book.
Of course the theory will be presented that if we have lower tariff, or no tariff, the workman or artisan might be able to buy his clothing and food cheaper. That to some extent is true. But what use is it for the workman or the artisan to be able to buy his clothes cheaper, unless he has work to do and money wherewith to buy that particular clothing? As a matter of fact, is it not better for the workman or the artisan to have six days a week steady work with good pay, and pay a few cents more for his boots and shoes and clothing, than to have perhaps three days' work per week and receive poor wages? We are very apt, I think, in this country, Mr. Speaker, to look too much for our examples to England or to the United States. We say that England has been successful as a free trade country, and we say that the United States has been successful as a high protectionist country. What is successful in England or what

The Budget-Mr. Mdrier
is successful in the United States does not necessarily apply to us here in Canada. I would like to see in Canada a tariff that will bring forward our manufacturers, and one that will provide the workmen with work, and make us a country dependent on ourselves and not dependent on others.


Mr. MARTELL:: Does the hon. gentleman think it is in the interests of the labouring man, the consumer, and the farmer, say in Nova Scotia, to have boot and shoe factories built up many miles away, with heavy freight charges, in order to make this country progressive? Or is it not rather in their interests to have a lower tariff with the United States?


Herbert Meredith Marler: That is a different point
entirely. If the hon. member wants to throw the bars down to the United States, I disagree with him. However, others will expatiate upon the advantages derived from the British preferential tariff. That tariff was inaugurated at a time when conditions were different, but since that time conditions have completely and absolutely changed. At that time we had not the depreciated currency to deal with, or the great spread in price between Continental labour and Canadian labour, and in my opinion, with regard to the preferential tariff, it is about time we came to our cool senses, and understood all the injury that that tariff was doing to industries in this country. The sooner we come to that conclusion, the more respect traders from Great Britain will have for us. But I do not belong to the type of protectionist who desires to protect inefficiently. I do not want the type of protection which will mean undue profits to the manufacturer. I simply ask for the type of protection that will enable us to give work to the workmen. If it is necessary in order to protect our markets that we should have a tariff higher than that, then I say that any undue profits made by the manufacturer should be returned to the people. All that I ever have asked, and all that I ask now is that a fair and reasonable cost of living tariff be maintained.
Hon. members from the West, of course, will say that I am not sympathetic with thesr needs. I do not think that that accusation is fair or well-founded. I am not unsympathetic with regard to what the West needs. No one has a greater admiration for what the people of the West have done, and no one desires to see the West progress and surmount their difficulties more than I do, but I would like to see lasting benefits provided for the West. What advantage can it be for the West if our industries in the East are curtailed, or if our industries in the East 101
happen to go out of existence? I say, "happen" to go out of existence, and I think I say so advisedly, because I have heard time and again from that section of the House that the tariff should be consistently reduced. Hon. gentlemen from the West are frank on that subject, and I admire them for their frankness and I congratulate them on the success they have attained in this matter. But when we in the East are told that this is the death-knell of protection, and hon. members from the West tell us, through their leader, that protection is to be reduced until it reaches the vanishing point, what are we to expect? The hon. gentleman from Brandon (Mr. Forke) said in this House:
I do not think that members on this side of the House are so much excited over farm implements. What they are interested in is the duties on the necessities of life.
Meaning by that, as we all know, that the duties should be taken off a great many articles, practically prohibiting their production in Canada. In addition to that the hon. member stated as regards the Hudson Bay railway-I may be digressing a little, but it will come into my remarks later on:
I want the government and hon. members of this House to understand that not for one moment can this subject be downed, because the West is determined to have the Hudson Bay railway built and it will be built, I believe, in the not far distant future.
Then their chief whip, the hon. member for Last Mountain (Mr. Johnston) again stressed the fact:
Now that the government has taken this step let them not stand still but press forward until the protective element in our tariff is completely eliminated.
I respect hon. gentlemen for these opinions. There is no bitterness in my remarks because they have their opinions on these subjects; but when we in the East hear from all sides of the House that protection is to be eliminated, naturally we have considerable fears as to our industries surviving. And as regards the remission of $750,000 this year, as spoken of by the Minister of the Interior (Mr. Stewart), surely that amount and much more than that amount is not going to help the position in the West very materially. It has always seemed to me that the difficulties in the West are not entirely d*ue to questions of tariff. I frankly admit that I have always been anxiohs and ready, with any influence or courage I may have, with any ability I may have to work, to sit down with any body of men and find out what really are the difficulties of the West and try to surmount those difficulties. But surely the tariff is not the greatest difficulty. When

The Budget-Mr. Marler

the AVest was prosperous-and the West has had its prosperous times-we in the East heard very little about the question of the tariff. But with adversity, naturally these matters arose. With adversity, due practically to over-expansion owing to war conditions, due, perhaps, to world-embracing difficulties which it is impossible to overcome at the moment, did not the West, through their political leaders, set up on an altar the god of a low tariff, or no tariff, and did they not fall down and worship that idol? Are the greatest difficulties, after all, due to the tariff? Are there not other matters which we in the East can' assist the West in, as we are always anxious and willing to assist the West to fhe fullest extent of our ability? Are the questions of freight rates, rural credits, not questions of great necessity to the West?


Mr. DUFF:: Branch lines in the West.


Herbert Meredith Marler: Yes.


Mr. GOULD:: As regards the remission
of $750,000 'which the hon. gentleman refers to, I think he would grant that the Acting Minister of Finance has taken into consideration the fact that the purchasing power of the farm has gone and that, as a result of that, the amount this year will be low.


Herbert Meredith Marler: I did not take that into
consideration, but I am quite ready to take into consideration everything as regards assisting the West. That is what I have been trying to say for the last few minutes. But as regards the question of freight rates alone, are conditions going to be more advantageous if our industries in the East are curtailed? Railways have to live; in this country they have to live very largely by east-bound and west-bound traffic. East-bound traffic alone will not suffice, there has to be west-bound traffic also. As regards taxes, will the taxes be more easy to collect? AArill they be more easy to levy? Will a larger amount be realized in taxes if our industries in the East are curtailed? As regards rural credits, will it be easier for us in the East, in the event of our businesses not prospering to subscribe money for rural credits, as no doubt we are very willing to do? No, I have said in this House time and ti&e again and I repeat it to-day, that we in the East are ready to co-operate with the West in every particular; but we ask, and I think we ask with reason and fairness, that our industries be allowed to live and that our workmen be given work to do.
' 
I come to the part of these remarks which is, perhaps, the most difficult for me to carry out, and I would ask hon. members to bear with me a little while longer. I trust they will forgive me if I infuse into the remarks which I am about to make too personal a tone. I wish to tell hon. members under what conditions I came to this House and the direct reasons I have for taking the course of action which I propose to take to-day. When I was asked to be a candidate in the division of St. Lawrenee-St. George Montreal which I now represent in this House I do not think there were many in the Liberal party who did not look upon the winning of that division as a fairly difficult task. It was not the division, I am free to admit, that I would have chosen in a first attempt to enter parliament. As a matter of fact, as all knew, a fight of that description could not be taken up without great consideration. I came to the decision to make the fight. In that decision I was very largely influenced by this factor, that if I was to enter parliament at all, the best way was by having the confidence of people amongst whom I had lived and who had known me and my family for many years; indeed, as regards my family, for generations, and if I had not their confidence, the best thing to do was not to attempt to go into parliament at all. It was under those conditions that I agreed to allow my name to go before the convention for the choosing of a candidate. But- before entering into that situation I took the advice of certain leaders of the Liberal party and I placed before them the identical conditions on which I thought I would support and the conditions which I was prepared to uphold if elected	a member of the	House of
Commons, and if I obtained their approval to those particular conditions. Subsequently, at the convention which was called for the purpose of nominating a candidate, I read to that convention, word and letter, those particular, self-same promises to which I have alluded. Subsequently, during the course of the campaign, I again persisted in the same policies, and as all hon. gentlemen know, I was elected to this House by a substantial majority. That is the story of how I came to this House. Since then I have advocated persistently those particular policies. I believe those policies are still approved by my electors and I have seen no particular reason to change my views. As a matter of fact they are precisely the same policies as others advanced in the city of Montreal. As a consequence of what I have told you, Mr. Speaker, I intend

The Budget-Mr. Marler
to stand by the promises I made my electors and to accept the consequences of the action which I intend to take to-day. In my humble opinion, while it is quite right that members of parliament should be given the utmost latitude in their decisions, nevertheless I hold, and will always hold, that where definite promises are made by a man to his electors, and where he believes, and in fact knows, that the policies which he has advocated in the past are still approved, he has no right to go back on those promises. To do so is merely to deceive the people whom he represents; and to that deception I will not be a party.
But in addition to that, Sir, let me address one word to hon. members on this side of the House; and I can assure them that the task which I am discharging at the present time is no light or easy one. Let me tell my hon. friends that there is no bitterness in the attitude I take towards any member of the government or any other hon. gentleman on this side. I have always considered it a doctrine of the Liberal party, clearly one of its fundamental tenets, that those who call themselves Liberals shall be entitled to act and think as their consciences may dictate. Liberals have never been bound, anywhere in the wide world, by hard and fast or immutable rules. Individually they have always followed those policies which they considered best in the interests of the countries which they have respectively been privileged to serve. Because, therefore, I see fit on this occasion to disagree with certain tariff policies of the government, I do not think that any gentleman in this House should deny me the right to that freedom of action because that is precisely what Liberalism has taught me to expect.
I do not propose for a moment to take up the time of the House in dealing with all those policies which I brought forward at the time of my election. However, if I may detain the House a few minutes longer, I want to lay particular stress on the question of the tariff as I advocated it then. I stated that my views on the tariff were that the tariff should be framed with the idea of the maintenance of established, legitimate industries, the encouragement of new industries, and the promotion of trade with other countries, and that no measure should at any time be so arbitrarily adopted as to occasion uncertainty in business and effect radical changes without reasonable notice or discussion. I still hold that the declaration I made at that time I was warranted in making, and was in accordance with the Laurier-Fielding 101 Jr
tariff as I understood it then and as I still understand it. Besides, that declaration which I then made regarding the tariff, and which I have repeated to hon. members of the House, is a declaration which was approved by the leading Liberals in the province of Quebec in the election of 1921. Of course, I know perfectly well that I lay myself open to an accusation, and I seek that accusation so that there shall be no misunderstanding as to the attitude I am taking. Hon. members will ask, why did I not accept the 1919 platform? The accusation implied in that question is a fair one for any hon. gentleman to make in this House. Well, I did not run on the 1919 platform for the reason that I never have accepted that platform so far as it relates to the tariff; it does not accord with my views. I always considered that that platform had been prepared at a time before there was, more or less, a line drawn between what I understood to be the Liberal party-certainly the Liberal party in the province of Quebec-and what subsequently became the Progressive party. I am not questioning the wisdom of any hon. member in following the 1919 platform; all I can say is that I never accepted it and do not accept its tariff proposals to-day. There are in that platform certain clauses which I think it is not unfair for me to repeat to the House to-day. Two of these clauses are the following:
That, to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery; farm tractors, mining, flour and saw-mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net-twines and fishermen's equipments; cement and fertilizers, should be free from customs duties, as well as the raw material entering into the same.
That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption (other than luxuries), as well as on the raw material entering into the manufacture of the same.
That the British preference be increased to 50 per cent of the general tariff.
Another accusation might be brought against me in this House, namely, that the Prime Minister said he did accept that platform. He did say that he accepted it, but he very properly explained-and I am not throwing this back at the Prime Minister in any way- that he accepted it as a guide to follow. He very clearly gave me to understand that. I hasten to amend that language: he did not personally give me clearly to believe, but he gave us generally to believe, that that tariff declaration in that platform was a guide to follow. Now, sir, I have not the slightest intention of being impertinent; but this is >
The Budget-Mr. Marlcr

matter of vital importance to many industries in the East and I think we should know from the government whether or not it is their intention to fulfil these articles in the 1919 platform. Let the government not misunderstand my questioning in that respect; I ask in all respect for information; and I merely say that if these articles in that platform are to be fulfilled, then it will be exceedingly difficult for certain industries in the East to survive. I was fully justified in taking the position I took in the election of 1921 owing to the utterances of other Liberal leaders in the province of Quebec. Mr- Taschereau, the Premier of Quebec, speaking on October 22, 1921, used these words:
Is it a time, when our industries are going through a crisis such as this generation has never known before-when our neighbours and even the Mother Country are having recourse to protection against our products, when the mark is only worth a half penny here and the European exchange is exceptionally favourable to us, when we ought to throw down all barriers and invite all foreign competition?
My Liberalism calls for a tariff which protects the consumer indeed but also our industries. These results are by no means incompatible but may well be obtained by a tariff for revenue-such as was proposed by Sir Wilfrid Laurier.
And later on he said:
May I say further on this subject that we ought to act with extreme prudence. It may be that for many years to come the tariffs of foreign countries will close their markets to our products both manufactured and agricultural. We must then become in a far larger measure the consumers of our own goods. Now, the agricultural interests cannot prosper, cannot survive, without great centres to receive and distribute their products. Our towns on the other hand cannot increase and support their work people unless the rural folks buy their manufactured goods.
And on the 6th December last at Montreal Mr. Taschereau said:
First, we want a tariff permitting the East to live and the great manufacturing centre of Montreal to prosper and expand. It is true that Quebec is an agricultural province, but our agriculture and our colonization cannot progress unless we have centres like Montreal. We need such a tariff, it is absolutely essential.
Now, Sir, I claim that the attitude I took in the 1921 election was clearly and distinctly taken on a solid foundation. I had the consent of Liberal leaders of repute to take my position with regard to the tariff policy. That policy was what I conceived it to be then, and what I still conceive it to be-the Laurier-Fielding tariff policy. In addition, my action was confirmed by the utterances of my leaders in the province of Quebec. I am pretty well convinced that if the 1919 platform as regards its tariff clauses is to be carried out, the concessions granted this year are only a start in the direction of very considerably lower tariffs.


Lewis Herbert Martell: That is what we hope.


Herbert Meredith Marler: My hon. friend says, "That is what we hope." Later on there will be still further tariff concessions, perhaps the entire elimination of many duties. Ultimately will come a peremptory demand from the Progressive party for the completion of the Hudson Bay railway.


Some hon. MEMBERS:: Hear, hear.


Herbert Meredith Marler: Some hon. members say "hear, hear" to that statement. Now, Sir, I feel I must take my stand in this respect. If other members on this side of the House view the future with equanimity, I certainly do not. And if they are not prepared now to take a stand for what I firmly, honestly and sincerely believe to be the policies of the old Liberal party-not those of the Liberal-Progressive party-they are only putting off the stand which they will have to take in the very near future. I intend to take my stand now.
Consequently for the various reasons which I have given in the course of these remarks, Mr. Speaker, I regret to state that I shall vote against this resolution.


Andrew Ross McMaster: Mr. Speaker, the observations which I have to address to the House to-day fall roughly under three heads:	First, a consideration of
the financial condition of the country; secondly, a discussion of the complaints of our protectionists; and, thirdly, an indication, by way of respectful suggestion, of the road on which the government should continue to travel.
I would wish at the outset to associate myself most heartily with the very gracious compliments paid by the hon. member for St. Lawrence-St. George (Mr. Marler) to the Acting Minister of Finance (Mr. Robb). I think it is of the utmost importance that we should have a clear understanding of just how the country stands as regards its finances. The Acting Minister of Finance has done what, I think, almost anyone who assumed the functions of a finance minister would have had to do in the treatment of our national debt. The minister who had already upon him the heavy obligations and responsibilities of the Department of Immigration could hardly be expected to recast the method in which the country's books are kept. But I am of the opinion that that method is undesirable. I am of the opinion that it fails accurately to set forth in an easily understandable form the real situation. I am not hostilely critical to the Acting Minister of Finance. Indeed, I think

The Budget-Mr. McMaster
the observation made a few days ago by one of the members from Toronto, in which he accused the Acting Minister of Finance of misleading the people, was particularly ungenerous in view of the fact that the Acting Minister had followed the procedure in regard to loans of the Canadian National Railways which had been inaugurated by the former Minister of Finance, the member for West York (Sir Henry Drayton). But I do cherish the opinion that the obligations of the National Railways cannot be treated other than as the direct obligations of the Canadian people.


Henry Lumley Drayton: Does the hon.
gentleman think that a refunding operation ought to be looked upon as an increase in capital?


Andrew Ross McMaster: No, certainly not.


Henry Lumley Drayton: Then just another question. Does he also think that if in a given year refunding operations were far in advance of bond issues, the bond issues should be looked upon as an increase of the capital debt? That is all we ever did.


Andrew Ross McMaster: I would say that if a
refunding operation is merely borrowing, say, $100,000 to pay off $100,000, of course there is no increase in the capital debt; but that if you borrow $150,000 to pay off $125,000 you increase the capital debt by $25,000.


Henry Lumley Drayton: If that was
the result of the year's operations.


Andrew Ross McMaster: Yes. I do not think
there is any difference of opinion.


Henry Lumley Drayton: It never was.


Andrew Ross McMaster: But I think it is inadvisable to treat the obligations of the National Railways in any other fashion than as direct obligations of the Canadian people. The National Railways belong to us in precisely the same way as the old Intercolonial railway belonged to us; there is no question about that. Now, if we admit this principle, how must we regard the situation? It seems to me that we must regard it as being one in which we have not, as a matter of fact, saved and wiped off our debt to the extent of $30,000,000 odd. We have not done it. We have done it in accordance with the bookkeeping practice which has been carried on. I do not blame the Acting Minister of Finance for the practice, but I do think we had better mend our keeping of the national books.
Now, I would ask members who are interested in this matter, and after all it has an
interest for all of us, to look up the Year Book-that excellent publication got out by the Dominion Bureau of Statistics-for the year 1924. At page 762 they will find that our gross debt as at the 31st March 1923 amounted to $2,888,827,237 and that our net debt amounts to $2,453,777,869. He will find that the difference between the gross and the net debt is arrived at by deducting from the gross debt such assets as cash on hand and in banks, specie reserve, advances to provinces, banks, and so forth, advances to imperial and foreign governments, soldier land settlement loans, and miscellaneous current accounts. In establishing this net debt of, in round figures, 2i billion dollars, the amounts spent on public works, whether by way of canals, railway, or public buildings and the amounts advanced to the railways and to the Canadian Government Merchant Marine, have not been taken into account. They are regarded as inactive assets, but they are not taken in as assets which should reduce the liability, the gross debt of the country.
Now, it is of extreme importance that we should have the position put before us as it actually exists, because once you declare a surplus you open the way for demands for increased expenditure, and one of the matters on which I am in complete accord with the member who has just taken his seat (Mr. Marler) is in his demand for rigorous economy. Now, how should we treat this? Last year we borrowed for railway account 22! millions of dollars by way of a serial equipment loan, and we borrowed in addition $50,000,000. Well now, that should be added to the debt, but to leave that without explanation would not be fair, because if the money has been properly expended there should be, and we take it for the purposes of the argument that there are, assets by way of betterments, by way of improvements, by way of additional equipment, which should at least offset the $72,500,000 to the extent of which the country's credit has been pledged during the current year. My proposal is that year by year when the Finance Minister makes his statement he should combine the railways and the ordinary consolidated and capital accounts of the country. Now, that is not a new idea. The present situation is open to abuse or to misconception, due, I think, to the fact that the late government refused to follow some very wholesome advice tendered to them in the session of 1919 by the then member for Shelburne and Queen's (Mr. Fielding), seconded by my humble self, in which we urged very strongly upon the government that all the earnings of the National Railways

The Budget-Mr. McMaster
should go into consolidated account and should be only paid out of consolidated account in the same manner as any other government expenditures are paid out. If that had been followed I think we would have had a juster system of bookkeeping, a system which would have exposed the real financial situation of the country; we would have had a greater control of expenditure by the railroad, and we would not have such an unfortunate adventure as the buying of the Hotel Scribe in Paris, for which the government is not, except most indirectly, responsible, because as I understand it the matter was arranged by the management without reference to the government at all.


Thomas Alexander Crerar: May I ask my hon. friend if he now advocates that change with respect to the administration of the National Railways?


Andrew Ross McMaster: I do. It is preposterous nonsense to think that we can in this House get away from our responsibilities as trustees for the Canadian people, not only for the wharves which the Canadian people own, not only for these parliament buildings which the Canadian people own, but for the railways that the Canadian people own. I do not want to see the management limited in matters of pure administration, but I do say that we cannot get away from the responsibilities which we possess as members of this House and as representatives of the people. It is idle to talk about taking the railways out of politics in that sense. We must develop in this country a feeling of responsibility among the members of the House and among the people generally, a realization that the National Railways have to be run in the same businesslike fashion as the Canadian Pacific Railway is run.


William Findlay Maclean: Would my hon. friend explain whether this reform which he proposed would allow the establishing of a fixed amount on which the National Railways should not only earn maintenance expenses but also discharge the debt or at least meet the interest upon it?


Andrew Ross McMaster: I remember hearing
the leader of the opposition (Mr. Meighen) state some years ago that he had such faith in our National system of railways that he believed in the long run they would be able to earn interest upon and, if I mistake not, ultimately discharge, all the advances that had been made to them, and earn interest on their capitalization. I am not at all sure that that desirable objective will ever be reached, but I am inclined to the belief fMr. McMaster.]
that it may be better bookkeeping for us to write down the railways to more nearly their real value and to transfer the amount written down from the railway account to the national debt account. It is purely a matter of bookkeeping.


Lewis Herbert Martell: Would we still have to pay the interest?


Andrew Ross McMaster: Yes, of course we would still have to pay the interest.


Lewis Herbert Martell: Then why not leave it
where it is?


Andrew Ross McMaster: I am going to explain
briefly the method adopted in New Zealand and Australia, which, I think, is an improvement upon our present procedure, which differentiates .when there is really no difference.


Henry Lumley Drayton: Has the hon.
member looked into the matter of the extent to which that has already been done, that is, the writing off of these assets and their transference to suspense account? I think when I left office that approximately $-100,000,000 had been written off.


Andrew Ross McMaster: I cannot answer my
hon. friend, but I noticed in the balance sheet of our national debt that a great deal was carried in what was called inactive assets.


Henry Lumley Drayton: That is where
they were written to.


Andrew Ross McMaster: And I presume that a
very considerable amount of the advances made to the railways has been treated in this fashion.


Henry Lumley Drayton: Your suggestion has been acted upon to that extent.


Andrew Ross McMaster: Yes, to that extent there is no difference of opinion between us. In the New Zealand Official Year Book for the year 1923 I find on page 473 that in their statement of gross indebtedness they follow this system:	First all the obligations of the
state, whether in connection with railways or other public activities, are all shown. What they do, however, is to classify the indebtedness under different headings. Debts incurred in respect of railways, telegraphs and telephones, water power development and electric supply, swamp drainage, and so on, are declared to be "directly productive." "Investment" is the heading given to such items as advances to settlers, advances to workers, advances to local authorities, mining advances, cold storage advances, land for settlement, discharged soldier settlement and lands for native land settlement, fishing in-

The Budget-Mr. McMaster
dustry promotion, housing and employees' dwellings. Then they have still another heading which they call "indirectly productive," and under this heading are found:	Loans
made in connection with roads and bridges, irrigation and water supply, development of mining, immigration, and so on. "Unproductive" is the heading given to loans connected with public buildings, scenery preservation, Maori war defence, Great European war. Strangely enough, education figures under this head. Of course, it may be that those expenses of education were for the building of school houses, which do not give a direct return, and therefore are only indirectly productive. But the point I wish to make is that the whole obligation of the state is seen at a glance, that og one sheet of paper one can see exactly what the people of New Zealand are responsible for, and I think it would be well if we adopted the same method.
In Australia very much the same system is followed. In the Year Book of the Commonwealth of Australia for 1923, on page 372, I note that in a statement of their Commonwealth consolidated revenue they divide their revenue under three heads:	Taxation, under
which heading are found the receipts from customs, excise, land taxes, state duty, income tax, and so on; public works and services, under which heading they place postal, railways, Commonwealth steamers, and so forth, and "Other revenue, which includes such items as interest, discounts, coinage patents, and the net profit on the Australian note issue, which is of some interest to those in this country who think that perhaps the state might get something out of the issuing of notes.


Henry Lumley Drayton: What did that amount to?


Andrew Ross McMaster: 

PRIVATE BILLS


[Stage Direction]
Bill No. 14, to incorporate the Roman Catholic Episcopal Corporation of Prince Rupert.-Mr. Stork.


Andrew Ross McMaster: If any argument was
needed, Mr. Speaker, to show the utter failure to bring about its declared objective, the attitude adopted by protectionist advocates in ithis House, certainly shows the absolute failure of the protectionist system to bring about the benefits which its advocates some fifty years ago said would be brought about. Apparently the great theme of the protectionist advocates in this House is a declaration of Canadian incapacity. "We are not able", they say in one breath, "to compete against the low-paid labour of Europe; we are unable to compete against the depreciated currency of Europe". In the next breath they say, "We are unable to compete against the highly-paid and highly-skilled labour of the United States". I think I am on common ground with all the students of the economic history of the country when I say that when fifty years ago or thereabouts, Sir John A. Macdonald, the Hon. C. C. Colby and other leading Conservative Statesmen of that day asked the Canadian people to adopt the principle of protection as the guiding principle of our fiscal policy, they based their appeal on the infant industry argument. They appealed to the people of Canada, and their appeal, I must say, was a somewhat attractive one. They said, "Give our manufacturers a few years of state-aid by way of a tariff, help them to pass through this crisis, and in a very few years, perhaps a score of years, they will be able to stand on their own feet. We will obtain goods just as cheaply as ever, and we will have in addition manufactures established in our country". That was one argument presented to the people of Canada at that date. Another argument that was presented to those who lived in the Maritime provinces at that time was that the tariff was not going to be raised at all, and that it was merely to be a readjustment of the tariff. I take it that had the protagonists of protection in 1876, 1877 and 1878 told the people of Canada that fifty years later, when on many of the necessaries of life the schedule rates

The Budget-Mr. McMaster
ware just as high as they were when first levied the protected manufacturers of this country would be asking for precisely the same rate of tariff protection, the Canadian people never would have given way to their appeals, never would have adopted the protective principle as the guiding principle of their fiscal policy and would not have rejected Alexander Mackenzie in 1878.
I wish to make a very few general observations on certain protectionist arguments that have been presented. I cannot traverse all these assertions. I said a moment ago " arguments", but I think that is rather too complimentary a term to use. I cannot traverse all the protectionist assertions, for the protectionist speeches as a rule have been extravagant in assertion but parsimonious in argument. Let me deal very briefly with two arguments which were adduced yesterday by the eloquent member for Fort William and Rainy River (Mr. Manion).
In brief, he had two arguments which a hasty perusal of his speech enables me, I trust, to answer. The first argument he brought forward was this:	Appealing to the
historian Macaulay, he said that very great progress had been made between 1685 or 1688, about the time of the great revolution in England of 1688, and 1845. Without doubt, he was perfectly correct in his historical statement based on the words of that well known historian; but then he went on to say:	That shows that Great Britain had
so far developed under a protectionist policy that it was able to march forward by the impetus given by protection and apparently was able to prosper under free trade by reason of the start that the industries had received under protection. Let me say this. Throughout the Middle Ages and right down to almost the middle of the nineteenth century, Great Britain, as well as all other countries in the civilized world, was protectionist. If anything, the protection in Great Britain was considerably less hampering to trade than the protection on the continent. For instance, before the French revolution and, I think, perhaps even thereafter, they had tariffs between different parts of France, and wheat and other grains could not move freely from one part of the Kingdom of France to another. They had-and they have had it until quite recently-a little protective tariff or rather a little tariff for revenue purposes around every town of any considerable size in France. They had protection on the continent; they had protection in Great Britain; but Great Britain started to get rid of protection, I think, earlier than any other country in Europe.

Walpole started the work, in 1750, or thereabouts, Adam Smith wrote his great work; he converted to his views the great minister, Pitt, who started taking off duties, and who would probably have had the tariff almost on a free trade basis had the revolutionary wars with France not intervened. During the whole of the revolutionary and Napoleonic wars from 1763 to 1815, there was no movement' towards freer trade; but after the revolutionary and Napoleonic wars were over, Huskisson started in 1823 to take off duties. He was followed by Peel, so that in 1842 most of the duties on manufactured goods had been taken off. Then the duties on foodstuffs were removed from 1846 to 1849, and finally the work was completed in 1860 by William Ewart Gladstone. From then until 1903 free trade was accepted without question as the guiding principle of British policy.
What led the British people to get rid of duties on food? During the whole of the eighteenth century Great Britain produced about enough food for itself. As a matter of fact, in years of abundance they were able to ship food from England; but by reason of the invention of the steam engine, an invention for which British ingenuity is largely to be credited, and by the fact that there were in Great Britain coal and iron in close proximity, the industrial revolution, which was really unconnected with tariffs, brought about a development in the industrial life in Great Britain sooner than anywhere else in the world. The centre of population moved from the more southerly and easterly counties of . England over towards the north and towards the west, and Lancashire and Yorkshire began to be hives of industry. That was in process before, during and; immediately after the Napoleonic wars. Prior to the time of the revolutionary wars, Great Britain was about able to feed itself, but the development of manufacturing caused a great increase in population. That great increase in population ate up all the food that Great Britain was able to produce, and during the years from 1793 to 1815, while the war kept food from coming to Britain's shores from the continent of Europe, wheat went up to between two and three dollars a bushel. That had the result of raising the rent of land, and when Waterloo occurred and the Peace of Paris brought an end to almost a generation of warfare, the price of wheat fell from three dollars to two dollars a bushel. The landlords, who at that time controlled both the House of Commons and the House of Lords-the landed interest was the paramount interest in Great Britain at that time-were not pleased that the food

The Budget-Mr. McMaster
of the people was being cheapened, because that meant a reduction of their rents, and they combined with the farmers, who had a considerable amount of political power, to place upon the statute books the Com Laws of 1815, which had the result of imposing starvation by law upon a large proportion of the British people when crops were scarce. The whole generation from 1815 to 1845 of what we call the labouring classes, the plain and common people who worked with their hands, protested against that:
Bread taxed Weaver, canst thou see,
What this tax has done for thee?
See thy children vilely led,
Singing hymns for shameful bread,
While the stones of every street,
Know their naked little feet.
That was the condition of Great Britain under protection. They hold out protection as having made Great Britain strong and powerful! Why, in the hungry forties, people were starving by reason of protection, and 1 have had an old Scotchwoman tell me that herself. Aye, and one man out of ten was in receipt of public relief. The people wen working in the coal mines, young girls, young children, women working like beasts of burden to get the pittance with which they had to buy the high priced food of the time. No, it was not protection that made Great Britain great. What made Great Britain great was following a system of freedom, and that is what will make this country great-following a system of freedom and not a system of restriction.
Mr. Speaker, I do not pretend for an instant that free trade is a panacea for everything; that we would have a second heaven on earth in this country if we had free trade. It is only one of the reforms which we need in Canada. As Great Britain has been an outstanding example of the benefits of freedom of commerce, it is quite in line with the protectionist advocates to endeavour to destroy the value of the evidence of British economists, and the eloquent member for Fort William and Rainy River the other day endeavoured to lead us to believe that Mr. John Stuart Mill, the great economist, believed in the infant industry theory. That is not a new dodge on the part of the Conservative party. In 1876, Sir John A. Macdonald quoted these words from John Stuart Mill's Political Economy, the words which were quoted the other night by the hon. member for Fort William and Rainy River:
The only case in which on mere principles of political economy protecting duties can be defensible is when they are imposed temporarily (especially in a young and rising nation),-	,
One would suppose, of course, that the imposition of duties for almost fifty years war a fair "temporary" trial.
-in hope of naturalizing a foreign industry in itself perfectly suitable to the circumstances of the country. The superiority of one country over another in a branch of production often arises only from having begun it sooner. There may be no inherent advantage on one part, or disadvantage on the other, but only a present superiority of acquired skill and experience. A country which has this skill and experience yet to acquire may in other respects be better adapted to the production than those which were earlier in the field, and besides it is a just remark of Mr. Rae. that nothing has a greater tendency to promote improvements in any branch of production than its trial under a new set of conditions.
That reminds me of a striking instance of the superiority of Canadian over British production, which was cited to me some time ago by a Conservative member, himself a manufacturer. He said that during the war his factory began making shells. After having received from the government payment for the shells on the basis of what it cost in Great Britain to manufacture shells in the government arsenal, they made so much money that as a patriotic citizen he felt that he should reduce the price. Accordingly he cut the price in half and still they made money, so that he decided to reduce it to 25 per cent of the original price. And notwithstanding that reduction they were able to make a profit. True it is that in a new country it may be wise to try out old methods and improve upon them. This argument in regard to production is a two-edged sword: it is -hardly right for people who have that capacity which I have just illustrated to play the part of those to whom state-aid is imperative. To continue:
But it cannot be expected that individuals should at their own risk, or rather to their certain loss, introduce a new manufacture and bear the burthen of carrying it on until the producers have been educated up to the level of those with whom the processes are traditional. A protecting duty, continued for a reasonable time, wiirsometimes be the least inconvenient mode in which the nation can tax itself for the support of such an experiment. But the protection should be confined to cases in which there is good ground of assurance that the industry which it fosters will after a time be able to dispense with it-
That is a clause which must have escaped the attention of the hon. gentleman who quoted John Stuart Mill to the House.
-nor should the domestic producers ever be allowed to expect that it will be continued to them beyond the time necessary for a fair trial of what they are capable of accomplishing.
If protectionists desire to take comfort from that statement they are of course perfectly at liberty to do so; but in considering it they should admit the fact that John Stuart Mill withdrew the statement. We have excellent evidence to substantiate that assertion.
The Budget-Mr. McMaster

Let me read it to you. I take this from a speech delivered by that great leader of his time, the Hon. Alexander Mackenzie, than whom a more faithful public servant and a more honest man never ornamented this House of Commons. He said:
But, sir, before proceeding to discuss some of the matters the right hon. gentleman referred to, let me call the attention of everyone for a moment to his remarks regarding John Stuart Mill. The hon. gentleman may not have made the statement that my hon. friend from Waterloo attributed to him, but he may find, if he recalled a certain circumstance, that he might have done so. He must surely remember that even John Stuart Mill wrote a letter to Mr. Greeley, of New York, withdrawing that passage from his book. He may remember the disappointment felt by the protectionists of the United States with reference to Mr. Mill's passages-how they distorted it, when Mr. Mill really withdrew it and expressed his regret that it had ever been put in. But in order to make doubly sure,
I had the pleasure last summer of meeting with a well known English writer-whom the hon. gentleman no doubt knows-Mr. Newmarsh, an intimate friend of Mr. Mill; and I called his attention to this circumstance, sitting at the dinner table one day in London. He said: "Oh, yes; that is well known. We all expressed our exceeding regret to Mr. Mill that the passage should have been written, as it was liable to be misunderstood. He withdrew it, however, unmistakably and completely".
Now I would pass on to the speech delivered this afternoon by the hon. member for St. Lawrence-St. George. I am not at all sure whether the views expressed by him are an accurate reflection of the attitude of the Canadian manufacturers generally. I should regret the fact if they were. But if the attitude displayed by the hon. gentleman to-day be an accurate expression of the general sentiment of our manufacturers, what does it indicate? It simply means that they are not prepared in the public interest to give up one shred or one tittle of the special privileges which they now enjoy. There is not one group in this House, there is not one individual member of this assembly, that does not wish for the growth and prosperity of our Canadian manufacturers. But what we are anxious for is that this growth shall not be at the expense of other interests in the country. It was a French economist who said that there is no use arguing with a protectionist because protection is not a philosophy but an appetite, and it is futile arguing with people about their appetites. Sometimes when I reflect upon the history of those who have enjoyed special privileges of any sort I am inclined to agree with this French economist. But is it wise for the possessors of special privileges to hold on to them with too firm a grasp and to refuse to realize the rights and the desires of other people?

If you will pardon another historical allusion, you will remember that before the French revolution the clergy and the nobility had been able to discharge themselves of all responsibility for public burdens while they enjoyed great public privileges; and they held on to those privileges in spite of the warnings of the physiocrats, in spite of the appeals of the philosophers, and in spite of what their own consciences must have told them was right. They clung to those privileges until finally they saw them wiped out over night. I ask the House to compare with that what happened on the other side of the British channel, where there were also great privileges enjoyed by the few. The *landed interest in Great Britain controlled both Houses; and in 1832 the rotten boroughs, practically pocket boroughs, the private property of the great landlords, were in many cases wiped out. Great Britain came almost to the verge of revolution, but that wholesome respect for and fear of their fellow citizens led the British landlords, the British nobility and the British privileged classes generally to give way. Again in 1868 when there was a great movement for the extension of the franchise there were people in Great Britain who were very much put out by the circumstance and desired to prevent the common man from receiving the right to vote; for at that time only about one *man in six enjoyed the franchise. Again, however, in the face of great public agitation, and public meetings addressed by the leaders of the movement to the people assembled in thousands, the opponents of the popular movement yielded. It is wise sometimes to give way. I would recommend an attitude of conciliation, an attitude of endeavouring to appreciate the other fellow's position to the privileged interests of this country.
And now I think I can perhaps best take up the various matters connected with the tariff by following the very interesting speech delivered this afternoon by the member for St. Lawrence-St. George, because I take it that he is regarded in this country as the accredited representative of the big interests. Last year, almost twelve months ago, the hon. member followed me when I spoke in the budget debate; it is my turn now to follow him. On that occasion he made use of these words:
Let me turn to the hon. member for Brome who made a speech this evening, and stated he was absolutely against the principle and practice of protection. No doubt hon. members opposite agree with all he said. They have heard his remarks with reference to hit defection. I do not intend, Mr. Speaker, to say

The Budget-Mr. McMaster
very much about the defection of the hon. member for Brome beyond stating it was very regrettable to me that he should have adopted such an attitude towards the party he has followed for so many years. What did the hon. member say? He said he was a Liberal and he was the only man who understood the Liberal doctrine. Well, why does the hon. member for Brome pose as the arbiter of the Liberal party? Can no other hon. members in this House understand what the Liberal doctrine or the Liberal policy is? Why did he say that he, and he alone, is the only man in the House that understands the Liberal doctrine?
The hon. member for Brome is advancing his own personal ideas and views instead of sinking those personal views as many of us have to do for the general good of the country.
Now, I do not propose to administer to the hon. member for St. Lawrence-St. George any reciprocal lecture. I learned at the feet of Sir Wilfrid Laurier that in politics there is no room for resentment On the contrary, I would congratulate the hon. gentleman on his sincerity and courage. If those are the views which he holds-and I believe them to be his sincere views-it is right that he should express them. In the world at present parliamentary representative institutions are on trial. In Italy we see one dictator holding sway; in Spain we see another; we have had rumours that some people in France think they should have a dictator there; and therefore it is for us, who are the inheritors, along with other British countries, of British parliamentary institutions and traditions, to see that those are kept intact and inviolate. One of the things which has destroyed parliamentary government in some countries, and has depreciated its prestige in others, has been the insincerity of public men. I believe that the people of Canada are sick and tired of men who advocate policies in which they do not believe, who advocate one thing at one time and another at another time. And after all the personality of the member for St. Lawrence-St. George and the personality of the member for Brome are nothing in comparison with the importance of the issues which are before the Canadian people today.
The hon. member for St. Lawrence-St. George spoke about agricultural implements. But before I deal with that part of his speech I think I should very briefly refer to something on which he had a good deal to say- the Laurier-Fielding tariff. I have been associated with the Liberal party for a good many years, but I never heard about a tariff called the Laurier-Fielding tariff until quite recently. The tariff which obtained in this country for a great many years was introduced by Mr. Fielding in 1897. It did not go as far in the direction of cutting down duties as I would have liked; but it did cut down some. It did introduce the
British preference, first at 121 per cent, in the following year at 25 per cent, and the year after that at 33j per cent. But I take it that those who presented themselves as Liberal candidates in the election of 1921 were not obliged to go back in the far and distant past to find what the declared policy of the Liberal party was. I think that perhaps if they had looked back for the ten years previous to 1921 they could have obtained a just appreciation of what was expected of those who declared themselves to be Liberal candidates. The member whom I congratulate for the pleasant and courteous way in which 'he spoke this afternoon was insistent upon picking out here and there statements of a more or less protectionist nature from speeches delivered by the late Sir Wilfrid Laurier and by Mr. Fielding. But, strangely enough, he forgot to mention one of the greatest steps towards freedom of commerce which has ever been taken by a political party in this country; that was the attempt to give the people reciprocity in 1911. That episode was conspicuous by its absence from his speech. I think perhaps that here I should make a few brief references to the views of Sir Wilfrid Laurier in the last ten years of his life.
In 1911 the Liberal party went to the country on reciprocity. In 1912 I well remember Sir Wilfrid Laurier addressing a great meeting in Montreal and laying down his principles to the effect that he believed in reciprocity and that some day the Canadian people would regret that they had rejected it. From 1911 right up to 1917 the Liberal party, by resolution after resolution in the House of Commons, pledged itself to a reduction of the tariff. After 1917 I had something to do with the expression of Liberal views in this House, and on several occasions, with not the entire support but almost the entire support of the Liberal party of that day, I placed on Hansard resolutions-always voted down by the government of that day-in favour of lower tariffs. In the last few weeks of his life Sir Wilfrid Laurier made a great speech to the Eastern Ontario Liberal Association. What did he say on that occasion? I have quoted from bis speech before, and I do not propose to repeat those quotations now, but here is something that I do not think I placed before the House when I spoke in the debate on the Address. After speaking of the British preferential policy-which now no longer merits the approval of the member for St. Lawrence-St. George-Sir Wilfrid Laurier said:
We said, "No; we are not going to bargain with the Mother Country upon matters of that kind."

The Budget-Mr. McMaster
We do it because we are British subjects, and because we believe in the principles of free trade. We believe also it is for the good of the Canadian people that we should adopt that policy, and by that policy we stand to-day also. In your resolution you affirm that the black eye which was given by the present government three years ago should be removed, and, Sir, if it is in our power to do so we shall do so; at all events we shall take the opportunity to bring the matter before parliament at the next session.
Sir Wilfrid Laurier was not in his later days a protectionist. He was a man. who believed in reduction of tariffs; he was a real Liberal, and he believed that freedom of exchange was part of the Liberal doctrine, of the Liberal tradition. While we were in opposition, after 1917, we had statements from Mr. Fielding himself that protection was not the principle which should guide the fiscal affairs of this country. It is difficult to imagine how a man could present himself as a supporter of the Liberal party and take the stand that duties were not to come down at all. I realize the difficulty in which many members of this House find themselves in connection with the trade question and I realize that the matter has to be dealt with with prudence and with care. I have every sympathy for the man who has protected industries in his riding which are fearful of what may happen, and I am all for prudence, all for conciliation, all for care, in regard to the trade policy. But the direction must be established, and progress must be made in the right direction visible to the naked eye, as I have said on previous occasions.
The hon. member stated that he had some sort of dispensation from some one or other for an apparent disagreement with the main body of the Liberal party on the trade issue. He did not tell us who granted him that dispensation, and I do not care very much who granted it, because the Liberal party, as I understand * it, is not a hierarchy that grants dispensations: we are supposed to hold true to the tradition of the fathers in its entirety. But the hon. gentleman did refer to a very respectable character in the province of Quebec, Mr. Alexandre Taschereau, as one who had made protectionist speeches. I have an admiration for the Hon. Alexandre Taschereau. I had the pleasure last October of going down into the county of Brome and of speaking to my friends there in support of one who was the candidate of the Liberal party in the Quebec House led by the Hon. Alexandre Taschereau. But so far as trade questions are concerned, as far as the fiscal policy of the country is concerned, I decline to admit for an instant that any provincial premier has the right to speak for the Liberal party or

for any other party in the federal arena. The dispensation, if obtained from the Hon. Alexandre Taschereau, was not worth the paper it was written on.
Let me now take up the question of agricultural implements. The hon. member gave a good deal of time to the consideration of agricultural implements. He said that reductions ranged all the way from 4 to 12J per cent and he gave the House to understand, if he dlid1 not say so in so many words, that it would be impossible to carry on agricultural implement manufacturing in Canada without the help of a protective tariff. That is the statement made by the hon. member for St. Lawrence-St. George, but unfortunately it does not agree with the evidence given before the Drayton Tariff Commission in 1920. I would like to read to the House some evidence given by the then president of the Massey-Harris Company, Mr. Thomas Findley, who, perhaps, may be taken as a better guide as to the feelings and views of the implement manufacturers than the member for St. Lawrence-St. George. He said:
So far as the Massey-Harris Company is concerned, even to-day, placing no other consideration in the scales but that of money making, we should be quite prepared to have the tariff taken off our implements, if at the same time it were taken off everything that enters into the cost of producing them. In fact, considering how large our foreign trade is, in proportion to the whole, we honestly believe we could make more money under such a free trade condition than we are making at the present time.
And he makes this statement:
On August 14, 1917, following a very full discussion of the whole tariff situation and its effect upon our company the following resolution was unanimously passed by our directors and placed upon the minutes of the board:
" A further discussion on the tariff situation followed, and the president submitted figures illustrating the effect of the tariff on our business; and, while the consensus of opinion was that, given free materials, machinery and all other articles entering into the manufacture of our goods and the operation of our plants, we would be as well off with free agricultural implements, it was not thought desirable to make a statement of any kind at present in regard to the position on account of the unsettled political situation and the feeling that the effect of practically free trade on other Canadian manufacturing industries might be different from its effect on ourselves.
Now, it is true that the Canadian, implement manufacturers have not got all that enters into their cost of production free. They have not got free coal, or free steel for the erection of their factories, or free belting or free machinery. But they have got free raw materials; they have got partly at least the condition under which they said free trade would be a benefit to them, and they have not had all the duty

The Budget-Mr. McMaster
taken off. Surely the plea that they are going to expire is not a plea that can be sustained, in view of the evidence brought forward by themselves.


Robert Alexander Hoey: And they have got relief from the sales tax. _


Andrew Ross McMaster: And they have got relief from the sales tax, as the member for Springfield (Mr. Hoey) says. I am afraid that the member for St. Lawrence-St. George was drawing his information as to the condition of the industry from the Montreal Gazette, which on the 12th of April, 1924, said:
New Budget Shows Immediate Effect. St. Hyacinthe Agricultural Implement Works are Forced into Liquidation. Communication to C.M.A.
That stands for Canadian Manufacturers' Association.
Present Reduction of Tariff Regarded at Board of Trade Merely as First Step. " I have just received notice of the first fruits of the new budget and the reduced tariff on agricultural implements, so far as this province is concerned," said R. W. Gould, secretary of the Quebec division of the Canadian Manufacturers' Association, yesterday afternoon. " That is a letter from the vice-chairman of our St. Hyacinthe branch, who is also head of the agricultural implement works at St. Hyacinthe." He has sent me notice that his firm has to-day been compelled to go into liquidation, as a direct result of the budget brought down the day before at Ottawa, which spelt ruin to his industry.


Thomas Wakem Caldwell: An instantaneous effect.


Andrew Ross McMaster: An instantaneous effect, as the member for Victoria and Carleton (Mr. Caldwell) says. But it was a cruel untruth; it was absolutely false. There had been no going into liquidation. A withdrawal was made. Two days afterwards the following statement appeared in the same well-known paper-


Robert Alexander Hoey: In small print?


Andrew Ross McMaster: In small print.
No Liquidation
The statement recently made that an agricultural implement manufacturing firm at St. Hyacinthe has been forced into liquidation by the budget, it was stated, has fortunately proved to be incorrect, the notice of their resignation from the Canadian Manufacturers' Association having been misinterpreted as meaning their liquidation.
Now that is a pretty slim excuse, and moreover it has not even the virtue of being true, because I have it from the member for St. Hyacinthe (Mr. Morin) himself that the firm referred to is the firm of O. Chalifoux et fils, Ltee, manufacturers of threshing machines, hay pressers et cetera: That company is not in liquidation, but expects to
have, and we all trust it will have, years of useful growth before it. It never retired from the Canadian Manufacturers' Association, but I would recommend, and perhaps the hon. member for St. Hyacinthe will convey my humble advice to them, that it would be wise to retire from such an association, because it is a pretty hard thing for a company which is in a firm and proper condition, as far as I know and believe it to be, first of all to be branded as being en deconfiture-in bankruptcy-and then when they protested against that to have the association say "Oh, we had a letter from you and we now see it was that you were retiring from our association; we thought you had gone into insolvency." I think that perhaps these may be the sources of information about the agricultural implement manufacturers from which the hon. member for St. Lawrence-St. George has drawn his information, and I would recommend him with all courtesy to seek more accurate sources of information.
Now are the Massey-Harris people likely to expire under this present reduction of duty? Before the war they stated they carried on sixty per cent of their business outside of Canada. They went into Australia, they went into France, they went into the United States itself, they went into British South Africa, they went into the United Kingdom, they went into Belgium, they went into Denmark, and in all those countries they met the competition of the world.


Mr. CLARK:: Does the hon. member suggest that the Massey-Harris people were exporting to the United States?


Andrew Ross McMaster: I presume they were.
I will give the hon. member the export figures to the United States, and as the Massey-Harris Company is one of our largest implement manufacturers, I presume they were exporting. I think there is no question of their exporting to the United States. Perhaps I could bring in these figures here as well as later. The hon. member knows, of course, that there is no duty on agricultural implements entering the United States.


Mr. BROWN:: I saw their implements on sale in Hanna, North Dakota.


Andrew Ross McMaster: There we have the
evidence of an hon. member who was formerly a Congregational clergyman, so there is no question about it. Perhaps I might put on Hansard these figures because I think they are of real interest.

The Budget-Mr. McMaster
Imports of Agricultural Implements into Canada for Years 1922, 1923 * 1924
Agricultural implements and machinery	Total imports	Imports from	United Kingdom	United States	Other Countries_ 1922 Dutiable	% 5,216,371 2,501,661	$ 36,658 32,174	$ 5,176,009 2,370,463	8 3,704 99,024
Total					
	7,718,032	68,832	7,546,472	102,728
1923 Dutiable					
	4,571,378 3,852,617	28,798 2,243	4,530,947 3,821,124	11,633 29,250
				
T otal					
	8,423,995	31,041	8,352,071	40,883
^ 1924 Dutiable					
	6,951,681 4,814,604	52,793 51,726	6,885,535 4,684,479	13,353 78,399
				
Total					
	11,766,285	104,519	11,570,014	91,752
				
Exports of Agricultural Implements
	Total exports	Exports to		
United Kingdom	United States	Other CountriesAgricultural implements and machinery- 1922	$ 5,345,308 6,066,893 9,339,519	$ 371,642 290,981 659,679	8	81923	1924


John Arthur Clark: How many factories have
the Massey-Harris people and where are they located? The hon. member was talking of the Massey-Harris people, and was going to give us figures of their exports to the United States.
Mr. MeMASTER:	I have not gone into
the matter so thoroughly as to be able to tell from what particular factory the implements went into the United States, but what I do say, and what I think is a perfectly fair presumption is that, the Massey-Harris people being one of our largest manufacturers of agricultural implements, if we find that in one year over one million dollars' worth of agricultural implements was shipped from this country to the United States, the Massey-Harris people shipped some of those implements. If not, then the Massey-Harris Company were sending their implements into countries where they enjoyed no tariff privilege in comparison with the United States and were meeting the competition, of the United States; so whether they met the competition of the United States manufacturers at home, or 
whether they met the competition of the United States manufacturers abroad, does not seem to me to make any great difference. Furthermore, the blue books flf this country show that our implement manufacturers are sending their implements into the United States itself.


John Arthur Clark: Will the hon. member tell
us the balance of trade in favour of the United States as regards agricultural implements?


Andrew Ross McMaster: I have those figures
too.


John Arthur Clark: It might do the members
of the House good to hear it.


Andrew Ross McMaster: I skipped some of the table to relieve the members the tedium of hearing long lists of figures. In 1922 we imported from the United States $7,546,472 worth of agricultural implements. Now I will give our exports for the year 1922. Our total exports of agricultural implements amounted to $5,345,308, of which we exported $583,005 to thp United States

The Budqet-Mr. McMaster


John Arthur Clark: I asked for the balance of
trade.


Andrew Ross McMaster: If I might be deflected for a moment, the balance of trade is one of the fallacies which was held by the mercantilists of the middle of the eighteenth century, and which was exploded by. Adam Smith in his Wealth of Nations in 1766 or thereabouts.


Mr. EULER:: What were the imports in
1923?


Andrew Ross McMaster: In 1923 the whole imports were; dutiable $4,571,378; free $3,852,617, making a total of $8,423,995.


William Daum Euler: That is wrong.


Andrew Ross McMaster: No, these are prepared by the Bureau of Statistics and these are the total imports. I have a table from the Dominion Bureau of Statistics, a comparative statement of the exports of agricultural implements to foreign countries from Canada and the United States. This is a statement comparing the calendar year of 1923. The first column contains the exports of Canada and the next column contains the exports of the United States. In considering these figures it should be remembered the United States has a population from thirteen to fourteen times as great as ours, and that the division between the rural population and the urban population is not greatly dissimilar to ours. Certainly they have a somewhat larger proportion of urban population to rural population than we have, but there is no great discrepancy between the populations of both countries. That should be borne in mind when we consider the figures. What do we find? We find that in the calendar year ending December 31, 1923, the United States and Canada sent goods to foreign countries as follows:
Comparative statement of exports of agricultural implements to foreign countries by Canada and United States for year ending December, 31,
		United
	Canada	States
Argentine	. $1,989,901	$12,975,828France	.. 2.157,589	4.821,906Australia	
,	.. 1,359.770	3.610,177Belgium	.. -159 199	1.836,157United Kingdom.. ..	.. 519,539	1,787.436British South Africa..	. 305.467	1.463,215
One of the reasons why the American figures are very much larger than ours in certain countries is, first of all, the fact that they have a very much larger production, and it is natural they should have a larger export to the foreign markets, and secondly a great deal of their exports are tractors, and apparently
our implement factories have not specialized in tractors as they have in the United States.
Let me turn to the situation in Australia, because I regard that as of real interest. In Australia we do not enjoy the benefits of the British preference. Our agricultural implement manufacturers go into Australia and compete there with the British manufacturers who have a preference, and American manufacturers are in exactly the same position as we are. Now the duties are very high. I notice the member for Fort William and Rainy River held up the Australian government as a wise government because they imposed heavy duties. I do not think our manufacturers of agricultural implements would share the opinion of the hon. member in this regard. But that of course is beside the point. Australia in the year 191920, 1920-21, 1921-22, bought goods from the United Kingdom, the United States and Canada as follows:
1919-1920	1920-1921	1921-1922
United
Kingdom	$271.730	82	$ 468 677	52	$ 417.028	56Canada	
977,874	42	1.863,405	30	1.265,565	96United States..	.	633,623	94	1,663,125	42	1,005,775	02
I have been frank and honest because already I have given the House the last year in which the difference was the other way. The United States sold more to Australia than we did. But in the three years we considerably outsold the United States in the Australian market under precisely the same tariff conditions. After that argument will anybody say that the agricultural implement industry of Canada is on the point of expiration?


Robert Alexander Hoey: Will the hon. gentleman tell us what the Australian tariff on agricultual implements is?


Andrew Ross McMaster: The Budget-Mr. McMaster
that the Canadian implement manufacturers are unable to meet competition.


William Daum Euler: Would the hon. gentleman admit that there are literally scores of smaller
manufacturers of implements in Canada in addition to the Massey-Harris and International who might be otherwise affected?


Andrew Ross McMaster: I presume there are and they might be otherwise affected. I do not see why they should be otherwise affected. I presume smaller manufacturers will manufacture more or less specialized machinery for local needs, and if they have their raw material given to them at a low rate or free, as under the proposed agreement, and have a protection still accorded to them, of from six per cent upwards to, in some cases, fifteen per cent, I do not see why they cannot make it go. That is the answer I would make.


William Daum Euler: That is your assumption.


Andrew Ross McMaster: That is an assumption, but I think it is a reasonable assumption. I am not going to admit as a Canadian citizen for a moment that my Canadian fellow citizens are less capable than citizens who live in the United States. When I visit the United States, whom do I find are leaders in the life of the United States in those cities to which Canadians have resorted? Do I find our Canadian people in a condition of inferiorty, or do I find them leaders in the professions or businesses with which they are connected? Why, if a man gets really sick in New York, they go out and shout for a doctor and a Canadian nurse.


William Daum Euler: That is begging the question entirely.


Andrew Ross McMaster: No, that is not begging the question. That is trying to instil into the hearts of the protectionists of Canada selfconfidence and belief in their own country:
O wad some power the gif tie gie us,
To see oursels as ithers see us!
Would that the protectionists would only realise the posture they stand in before their fellow citizens. After having enjoyed special privileges for almost fifty years, they do not seem a whit more willing to let go any of the special privileges than when they asked for them in the first place. The hon. member for Assiniboia (Mr. Gould) says that they are less willing, and I think that possibly he is correct. I do not wish to dwell too long upon this question of agricultural implements; I do not desire, to labour the point or to weary the House with figures; but what I wish to draw to the attention of the House is [Mr. McMaster.l	.
this: My investigation has borne in on my mind two facts, first of all, that where there is a heavy tariff against imports of agricultural implements, our manufacturers are able to meet competition in those countries; but the second is how low the rate on agricultural implements is in the tariffs of nearly all the'countries whose tariffs I have examined. France, although it is a highly protectionist country, has a very low rate on agricultural machinery. It is a little hard to calculate because its specific duties are measured in kilograms; but the best information I could get and the best calculation I could make show that a binder that weights about 1,500 pounds pays a duty of only about SI 1.76, which is very low. That is under the minimum tariff which we have the right to have and retain under the French treaty that our friends in the far corner of this room were so critical about in the earlier part of the debate. Of course, into the United Kingdom and the Irish Free State, agricultural machinery goes free; there is no preference. Agricultural machinery goes into South Africa under the British preferential tariff, of which we have the benefit in this country. In Belgium there is an extremely low duty, about the same as that of France. The same thing is true of Denmark. In New Zealand, agricultural implements are free. Therefore, we find that when the Canadian farmer goes on to the markets of the world to sell his wheat or any other product, he has to compete with countries, the farmers of which enjoy in very many cases either a very low rate of duty on agricultural machinery or their agricultural machinery free of customs duties. I think, perhaps, I have dealt at sufficient length with the question of agricultural implements.


William Findlay Maclean: I am only putting forward a statement made to me in the last dhy or two. Supposing the Canadian market was guaranteed to the Canadian manufacturer by probably a prohibitory tariff, would he be given that market if he undertook to sell his goods at prices that obtain in the United States? Could he be guaranteed the Canadian market at American prices under that arrangement?


Mr McMASTER:: 

The Budget-Mr. McMaster
machinery was too small to make it worth while manufacturing any of it here and therefore they could not import it into Canada est the manufacturers should lose their patents. I think that situation has been changed by the Patent Act which we passed last year. Having read the act I have come to the conclusion that the Commissioner of Patents has now the right to say to the manufacturer of patent shoe machinery, or the manufacturer of any other patented article, "You shall supply the Canadian demand at reasonable prices or lose your patent rights in Canada.'' If that does not meet the situation then such ...nendments should be made in the Patent Act as will do so. If there is real malaise in the boot and shoe industry I take it it is due not to competition from the outside but tc the fact that there is improper financing; there is frenzied finance in ronnection with the industry. The hon. member for North Waterloo (Mr. Euler) shakes his head. Well, I come from the city in which the exploits of the promoters of the Ames, Holden, McCready Company are particularly well known, and I know whereof I speak.


William Daum Euler: My hon. friend should not generalize from too small a number of instances.


Andrew Ross McMaster: 
Robert Alexander Hoey: Do they get a drawback of the duty in the case of export?


Andrew Ross McMaster: I really could not tell. If they do not get a drawback of the duty, that might be another way of helping them out. But the best cure for all this is to endeavour as far as possible with prudence and' care, with due respect for existing conditions and for the revenue, to try and reduce duties all along the line to a lower level.
Now I come to fertilizers. This is one of the items on which the tariff has been substantially reduced-in fact it has disappeared, having been reduced from 10 per cent to nothing at all. Of course that is only what it should be. The idea of taxing that which is to restore and renew the fertility of the soil is certainly taxation run mad. But I do not believe that our Canadian manufacturers need! complain very much. The total production for 1922 amounted to $5,533,136. We imported $1,048,620, and we exported $2,213,351. Therefore in 1922 we exported 40 per cent of our entire production. Of course, when we exported we had to meet the competition of the fertilizer manufacturers in the countries into which we sent our goods. Then we had brought before the special committee examining into agricultural conditions by an unimpeachable authority, by one of the members of the committee himself, the fact that a fertilizer company in New Brunswick was able to charge its New Brunswick customers $9 per ton more than it charged its customers for the selfsame thing across the line in, the state of Maine. This tariff, I trust, will go into effect, and consequently next year the New Brunswick farmers will pay the same price as the Maine farmers.
While I was thinking of fertilizers my subconscious mind reminded me of something I had forgotten in regard to agricultural implements, and I crave your indulgence, Mr. Speaker, while I return to that subject for a moment. It is to answer the argument adduced by the member for St. Lawrence-St, George. He asked: What about our people who supply our Canadian manufacturers of implements with their raw material? Well, how much of the raw material is bought in Canada? Mr. Findley, in his evidence before the special committee to which I have already referred, said that two-thirds of the raw material of his company was purchased in the United States; that they got pig iron from Pittsburgh much of their other material of a mineral nature from Buffalo and Tona-
102i
wanda, and all their wood from the United States also. I think it well that these facts should be known.
Now I pass on to another head of my observations. The government have taken a 6tep, and a decided step in the right direction, and any help that I can give them along those lines ^will most readily afford. But I have the feeling that, having started on the right road, they will not mind if a candid friend points out other steps which should be taken at the earliest possible moment. I want to see a modification, if not an entire elimination, of the dumping clause. I think it is an evil thing, and, like most evil things, it likes to work in the dark. I do not think the government quite realize how much they disappointed their friends, before bringing in this budget that we welcome so warmly, when by regulation they did away with the saving paragraph in the dumping clause which prevented its being applied if the difference between the market price and the purchase price was less than 5 per cent. Now, I do not know just what effect that may have. It may not have as much effect as I dread, but I do not like it, and I want to see it removed at the earliest possible moment.
I do not think the public of Canada quite realize what this dumping clause really does, so I am going to try, in the most untechnical language possible, to explain its operations. If I go into the United States, let us say, and buy $100 worth of goods, and the ordinary market price is $100, I come back to the customs house and pay, let us say, 10 per cent- if that is the rate of duty-on that $100 worth of goods, or $10. Suppose I go down a few weeks afterwards and am offered a bargain and suppose, being from north of the Tweed, I am a shrewd bargainer and I buy for $90 what the ordinary American is paying $100 for, when I get to the customs house the Canadian government charges me the whole difference between $90 and $100. The government penalizes me for having followed my national instincts. Then after having charged me the full difference between $90 and $100 it imposes the tariff of 10 per cent, so I pay $20 on that importation of $90 instead of $9 as I should have paid. Before this change in the regulation, if I had only succeeded in getting a bargain for $95, the dumping clause would not have applied and I would have paid only the 10 per cent on the $95. But now, even if I get a bargain of 2 per cent I am going to be charged that 2 per cent, with the duty oh top of it.


Edward Joseph Garland: And the dumping duty on top of that?

The Budget-Mr. McMaster


Andrew Ross McMaster: The whole difference between the price, whatever it was, below the market price, and then the duty on top of that.


Edward Joseph Garland: And the
dumping duty as well.


Andrew Ross McMaster: No, I think that is the dumping duty. It is bad enough already; there is no use making it worse. In my view that is making the Department of Customs, not an engine for collecting revenue for the state, but a barrier against allowing goods to come in, and a direct discouragement to our traders to make the best bargains possible.
The next step I want to see taken is the removal of the right of the Minister of Customs to value arbitrarily imports of natural products. That is a direct infringement of the right of parliament to impose taxation. It is open to the most serious abuse. It is protectionism of the most virulent and unwholesome character.
The third step I wish to see taken is the elimination of the valuation of goods at arbitrary values, such as valuing goods which come from one country at the supposed price that they are selling at in another. It is not a wholesome way of valuing goods. As a matter of fact, this depreciation of currency business has been altogether exaggerated. When you depreciate currency you raise prices. The German mark has practically disappeared-the old, paper mark; they have a new currency which they call the rentemark. I am told on reliable authority that prices in Germany to-day are what they were in 1914, plus about from 50 to 70 per cent. After all in the long run this endeavouring to enrich oneself by the issue of paper money defeats its own ends. It may have some temporary effect, but it is an effect which will be very temporary indeed.
Then, the fourth step that I wish to see taken is a general reduction of the tariff after a careful inquiry, and that careful inquiry should not consist merely of a genial minister of the Crown going round and asking the manufacturers what they want. The object of the inquiry should not be to decide whether protection or tariffs are to stay up or to come down. It should be rather to determine how tariffs are to come down with the least disturbance of business and the greatest help to the revenue and to the consumer. When this tariff commission gets to work one of the vital avenues of inquiry should be the real amount of money invested in the business. The commission should be accompanied by an accountant 
with a clear eye, a courageous heart, and no too great confidence in the assertions of his fellow men.	'


An hon. MEMBER:: Suspicious.


Andrew Ross McMaster: He should be a man
of a somewhat suspicious nature. We do not want exactly to encourage an American at the expense of a Canadian, but perhaps he should be someone whose father or grandfather came from Missouri.


Mr. SUTHERLAND:: After making this
inquiry, would my hon. friend consent to the tariff being increased if the inquiry justified an increase?
Mr. lyicMASTER: No, not at all. That has just been the trouble with a number of inquiries in this country; it has been along the line of what Sir John A. Macdonald did. Sir John A. went to Hamilton and he said to the manufacturers there: "Tell us what you want and we will see what we can give you." We do not want tariff inquiries along these lines. No; the point I want to make is this, and I make it with all solemnity: We have got tremendous burdens of taxation to bear in this country. We hope to be able to win our way through. We can only do so' if we direct the energy and the capital of this country into those channels where we can obtain the greatest economic returns. We cannot afford to maintain industries in this country that cannot within a reasonable time stand upon their own feet, because such industries do not increase the wealth of the country. There is no question about that; we need all our wealth to carry ourselves along.


Donald Sutherland: If my hon. friend
will permit me, does he insist upon the eventual removal of the tariff entirely?


Andrew Ross McMaster: In the long run. That is not the next step; that may take years. The next practical step is a tariff which will be framed with the purpose of raising revenue primarily, which will not be, as the present tariff so largely is, a tariff not to raise revenue but to keep goods out of the country. That is my answer.


Donald Sutherland: In order to raise a revenue, then, it would be necessary to import the goods and not manufacture them at home.


Andrew Ross McMaster: Let me make myself
perfectly clear. We will never import anything into this country that we can make more cheaply in Canada. We will never import into Canada anything which is not

The Budget-Mr. Hughes
better value for our money than something we can buy inside. The labour and capital of this country can best be employed in creating the value which is to be exchanged Mr. Speaker, if we could only eliminate the idea of money from peoples' heads and hearts and minds, we would get a much truer idea of what national trade is. It is barter between individuals, and no man gets poorer by getting bargains, no man gets poorer by exchanging what he has for something of more value. And as the nation is composed of individual units, no nation can get poorer by exchanging what it has for something of greater value.
Our manufacturers have had the tariff so long that some of them really believe that their very life blood depends on it. I think they are wrong. Prior to the emancipation of the slaves in the United States the greatest part of the public opinion of the southern states held as a unit that without negro slavery no economic life was possible in that part of the United States. They said that without the negroes to cultivate the cotton there was no future for the southern states as a whole. Ministers from their pulpits justified negro slavery; college professors from their chairs stated that without negro slavery the economic life of the south could not go on. But negro slavery was fundamentally unjust, even as it is fundamentally unjust to maintain protection in a country where there the vast body of the people cannot be protected. The feeling that negro slavery was unjust and unrighteous steadily grew. It grew first in the north; the abolitionists were reviled and prosecuted, but their influence increased until the nation trusted and the nation tried. They did away with slavery, and only after a bloody war; but did the southern United States go down? They went down for a while under the turmoil of the reconstruction period, for which carpet-baggers from the north were as much responsible as the southerners, perhaps more so. But the tremendous development of the southern states would have been impossible under slavery. In the same way I say that nothing that is just can be inexpedient, and by following the dictates of prudence, animated by the spirit of justice, desirous of getting rid of special privilege, we may be confident that the future of Canada, not only nationally but economically, is assured.


Mr. J. J. HUGHES (Kings, P.E.I.):: Mr. Speaker, I wish to join with the other members of the House who have congratulated the hon. Acting Minister of Finance (Mr. Robb) upon the budget speech he delivered shortly before the Easter recess, and upon the manner of the presentation of that speech. As I have listened to the speeches of the hon. members immediately to your left, Mr. Speaker, and noted their attitude, I have come to the conclusion they are not well pleased over the resolutions proposed in this budget and that they intend, if they get a chance, to vote against them. I am not surprised at that attitude. It was well understood by the country, and by the newspapers supporting the Conservative party, that they would oppose anything which the government proposed. So respectable and staid a newspaper as the Montreal Gazette made this statement on the morning of the day the budget was delivered:
The Conservatives are confident that they have the government at a disadvantage, no matter what its policy may be. If reductions of account are made in the tariff, they will be criticized as involving a departure from the policy of tariff stability on which Mr. Fielding and Sir Lomer Gouin so much prided themselves last session. On the other hand, if the government does not make worth-while reductions, it will be condemned as unfaithful to its platform and election pledges.
No matter what the government might do, whether its policies are in the interest of the country or not, no matter how wise or beneficial its legislation might be, it was going to receive the condemnation of the official opposition. But there is worse than that. A paper published in my own province, strongly supporting the Conservative party, a paper which in an issue some time ago stated that the present leader of the Conservative party was the ablest statesman now living in the world, in an editorial referring to the threatened strike of the post office employees a few weeks ago said:
As for the opposition, well, they rather enjoy seeing the government embarrassed, let the trouble come from whatever quarter it may.
They would rather see the government embarrassed than see the country prosper. They would like to see unrest, dissatisfaction, threatened strikes, turmoil, strife-anything at all that would embarrass the present government. I had hoped there was a time in the history of the Conservative party when they recognized their duty in a different way. I had hoped there was at least some period in their history when they thought differently.


Mr. LOGAN:: A long time ago.


James Joseph Hughes: Yes, I believe it was a long time ago.


Mr. ARCHAMBAULT:: In 1643.


James Joseph Hughes: I see the ex-Minister of
Finance (Sir Henry Drayton) in his place and displaying a great deal of jocularity. On
The Budget-Mr. Hughes


Henry Lumley Drayton: My hon. friend is wrong.


James Joseph Hughes: Your hon. friend is not
wrong; the ex-Minister of Finance is wrong.


Henry Lumley Drayton: You are entirely wrong.


James Joseph Hughes: The guaranteed loans of
the Canadian Northern in 1920-21 and in 192122 were used for the retirement of maturing obligations or the repayment of government loans, but the Grand Trunk guaranteed loan of $25,000,000 was used for general purposes.


Henry Lumley Drayton: My hon. friend is wrong, quite wrong.


James Joseph Hughes: It was used for fixed
charges, deficits, maturing obligations, capital expenditures and Grand Trunk Pacific obligations, just as ordinary loans and advances by the government are used. Now either the exMinister of Finance knows that to be correct or he is very deficient in information. In 1921-22, $61,000,000 of bonds were issued, of which $25,000,000 at least were used for the ordinary purposes of the railway, and this can be found in the railway accounts themselves, so there is no question about, it, and I am more than surprised that the ex-Minister of Finance should question this statement-


Henry Lumley Drayton: We will give
' you more surprises and a little light later on.


James Joseph Hughes: No. I am giving the light to my hon. friend.


Joseph Archambault: He is blind.


James Joseph Hughes: I have read the speech
of the ex-Minister of Finance very carefully, and on page 1223 of Hansard he made this statement:
We would further expect something to be done to help the Canadian farmer, who to-day is shut out from his natural market to the south.
From his natural market to the south 1 Whenever Liberals have said that our natural market was to the south, they were accused of being disloyal. When did the Conservative party come to the conclusion that our natural market was to the south? Was this statement made by my hon. friend in a moment of candour, or because of a sudden ray of light, or was it simply an accident? In the year 1911, when the reciprocity agreement was negotiated with the United States, when this natural market was thrown open to the producers of Canada, to the natural industries of this country, my hon. friend and his associates adopted every device and made every statement they could think of to deceive and mislead the Canadian people in regard to that matter. WThen those negotiations were being conducted the legislature in the province from which I come was in session. The leader of the Conservative party introduced a resolution stating that the people of Prince Edward Island were in favour of a fair measure of reciprocity with the United States. Another Conservative seconded that resolution and it was passed unanimously. Two or three months later when that reciprocity agreement came before the people of Canada the Conservative party in the federal parliament decided to oppose it. These same gentlemen went out upon the hustings and declared that the agreement that had been negotiated would be ruinous to that province and to the whole of Canada. I asked these gentlemen, in view of the fact that they had put themselves on record as being in favour of reciprocity, could they come to the conclusion that the agreement as reached was not fair? Was there any feature of it not fair? I got no answer. I asked, wTas there any item on the reciprocal list that should not be there, and I got no answer. I asked them to tell me if there was any item on the list that should be removed, and I could not get an answer. The attitude of the Conservative party in Prince Edward Island was a fair sample of the attitude of the Conservative party throughout Canada.
As I have already stated, I read carefully the speech made by the ex-Minister of. Finance (Sir Henry Drayton) and I find he

The Budget-Mr. Hughes
stated that the reductions in the tariff provided in the budget were made at the behest of the farmers or the Progressive party-in this House; and in the same breath he stated that the reductions that had been made, or the changes that had been proposed, would be of no benefit to the farmers of the country. Although they were made at the request of the farmers' party and were satisfactory to the representatives of the rural constituencies, he declared that they were of no advantage to them. He actually stated that the reductions amounted to the small sum of only $750,000; yet at the same time he said that they would destroy the manufacturing and industrial interests of the country. In the next place he stated that the manufacturers of agricultural implements were the only people who would benefit by the changes. The hon. ex-Finance Minister laughs. He has reason to.


Henry Lumley Drayton: Yes, I have.


James Joseph Hughes: Yes, indeed you have. Considerable effort is being made in the country and by the Conservative members in this House to mislead and deceive the people engaged in farming and in the production of agricultural products. The province of Prince Edward Island has made a great success of the poultry branch of the farming business. They have also made a success of other branches of farming, and I find the newspapers in the province from which I come are particularly stressing what they call an argument, namely the fact that the United States charge a customs duty of eight cents a dozen upon eggs going into that country, while we, in Canada charge but three cents, and they claim that this is a great injustice to the poultrymen and farmers of this Dominion. We have only to examine the production in this country and the exports and imports of eggs to satisfy ourselves that a higher duty on that commodity would be of no advantage whatever to the poultrymen or farmers of Canada. The estimated production of eggs in Canada is $48,000,000 to $50,000,000 a year. We import $2,000,000 worth and export very nearly $2,000,000 worth. It is a seasonal product. We import eggs largely at the season of the year when we are not producing them here. It is a product the people want to get if possible in a fresh state, and can anybody say that to place a duty on the small amount we are importing at a season when the farmers and poultrymen have no fresh eggs to sell, in the months of December, January and February, could be of any possible advantage to the poultrymen or farmers of this country.
The ex-Minister of Finance (Sir Henry Drayton) referred to the article of cheese a few days ago when speaking on the budget, and intimated that the farmers of the Dominion of Canada were at a great disadvantage and were suffering a great hardship because the duty on cheese coming into the country was not higher, while at the same time our exports of cheese are about 1,000 per cent greater than our imports. We only import a small quantity of cheese of a particular kind that we do not produce in this country. The farmers of Canada have entire control of the local market and export a very large quantity. The estimated value [DOT]of the cheese produced in Canada in 1922 ,was $28,000,000. In that year we imported $325,000 worth and we exported $25,440,000, and the same with regard to butter. An effort has been made to show the farmers, particularly in the Maritime provinces from which I come, that they are being injured because there is not a greater duty on butter.
I presume that the Americans have a higher customs duty on butter than we have, but we have the butter market well in hand, and the statement I have here covers only creamery butter and takes no account of the private dairy. We produced in 1922 $53,000,000 worth of butter, we imported only $1,000,000, we exported $5,000,000, and we took care of the home market completely.
I have listened to the hon. member for St. Lawrence-St. George (Mr. Marler) and other hon. gentlemen who tell us that a protective policy, with high customs duties, is of great advantage to the people of this part of the country, that is to the people of Ontario and to the western part of Quebec. A day or two ago I read in the Montreal Gazette an editorial commenting on a letter received from a farmer in the county of Middlesex stating that the home market was of very great advantage. I will take at their face value the statement of that newspaper, the statement of the hon. member for St. Lawrence-St. George and the statements of other hon. gentlemen who represent constituencies in the neighbourhood of Toronto and other Ontario cities, or constituencies in the neighbourhood of Montreal, and who tell us that the markets they find in those cities are a very great advantage to them. But I want in fairness to tell those hon. gentlemen that the men who profit by those home markets, by this protection, are the men who should bear the burden, I do not care how it is adjusted. I have no fault to find with any municipality, or city or province that wishes to bonus manufacturing industries. I think the people who profit by that system should pay the piper. What I object to is that
The Budget-Mr. Hughes

the people whom I represent, the people who live in the Maritime provinces, and particularly the people who live in Prince Edward Island, who never will, never did and never can benefit by those markets, should be called upon to pay their share of the cost of the music and the refreshments. The same is true with regard to western Canada. There is in my opinion no other country in the world where a system of protection could do less injury than in the country to the south of us, a compact country with every variety of climate, every variety of production. The people of that country could, if necessary, five and trade within themselves. On the other hand, there is no country in America, either north or south, and I doubt if there is a country in the world where protection will do as much harm as in the Dominion of Canada, because of our geographical position and because of the fact that our productions are very much of the same character in every province.
The farmers and fishermen of the Maritime provinces-I do not care what the transportation rates may be-cannot enter the markets of this part of Canada. Their natural market lies to the south, in the United States, or in the West Indian Islands, or in the island of Cuba, and very cogent and sensible observations, when we were discussing the Address in reply to the Speech from the Throne, were made by the hon. member for Cumberland (Mr. Logan) in regard to conditions that he found in the West Indian Islands. He found that Canada was not represented by any trade agent or trade commissioner; that no effort was made to get the products of the Maritime provinces introduced into that part of the world. There is nothing in my opinion that the Department of Trade and Commerce could do that would benefit the Maritime provinces more than to send a few properly experienced business men to the West Indian Islands and to the island of Cuba to introduce our products there, to speak to their business men as a business man could, to represent our conditions and to enable us to enter those markets. They want our goods and we want theirs. That is the way that the provinces by the sea could be benefited. The farmers in this part of Canada can take care of all their home market that is now or will be available here for decades to come.
About two and one-half years ago when the present government came into office, what was the condition of things in Canada? We were going into debt at the rate of about a hundred million dollars a year. The last year the Conservative party was in power, the increase in the public debt was $92,000,000, and if they had not taken advantage of the issue of bonds by
'Mr. Hughes.1
the Canadian National Railways, which they say now should be charged1 to the consolidated revenue fund, their deficit that year would have been at least $117,000,000. At that time, there were in Canada many people who were alarmed at the fact that we were taking over the Canadian National Railways, this tremendous burden. No daylight was seen; but in the short space of two years, it has been clearly demonstrated that within two or three years from now the Canadian National Railways will be no longer a liability, but an asset, able to take care of all its fixed operating expenses and fixed charges, and that it will probably be earning a surplus which can be used for reducing transportation costs or paying the interest upon the money or, at least, a part of the money lent by the government.
In two years the present government has succeeded in making a balanced budget. Even taking the word of their opponents, even taking the criticism offered this afternoon by the hon. member for St. Lawrence-St. George, the fact remains that the budget has, at all events, been balanced. If you take the system of book-keeping that has been followed in this country since confederation, there is a reduction in the debt of twenty to thirty million dollars. For the first time since reductions were made by the former Liberal government, there is an actual reduction in taxation. Nobody would have predicted some two years ago that any government coming into power at that time, shouldering all the burdens that this government had to shoulder, with high taxation, an enormous debt and deficits going on from year to year, would be able to change all that within the short space of two years. Only to-day I read an editorial in the Montreal Gazette which no Canadian could read *without a feeling of pride. I dare say almost every hon. member in this House has read it, (but I will ask the House to bear with me while I quote a paragraph or two:
The March returns of the foreign trade of Canada bring the statistics to the end of the fiscal year and permit of interesting comparisons. Not since 1921 has this commerce reached so large a value as in the last twelve months, a value far exceeding any pre-war period during which inflated prices far outran the quantity movement. The top figures are those of 1918, when Canada was shipping out great quantities of foodstuffs and munitions at high prices, and having regard to the reaction in prices it is satisfactory, not to say astonishing, to observe how quick the recovery has come. These are the figures:
Imports	Exports
1915	
$587,439,000	$ 490,408,0001918	
962.543,000	1,586,169,0001922	
747,804,000	753,927,0001923	
802,535,000	931,451,0001924	
893,335,000	1,045,141,000
The article goes on to state that the trade of Canada is simply astonishing, and every

The Budget-Mr. Milne
one must feel proud of the development that has taken place and the progress that is being made. These are the conditions at the present time, and we have much reason to be satisfied. The steps taken by the present government have not only given satisfaction to the members of this House but, I think, have proved that the government is pursuing a course calculated to serve the best interests of the country. That conviction is spreading throughout the country and I believe it is generally shared by our people all over the Dominion. I shall therefore be pleased to support the resolutions which will shortly come before the House in committee.


Mr. ROBERT MILNE (Neepawa):: I have listened with a great deal of interest to the discussion of the budget during the last few days. My hon. friends to the right seem to be much concerned over the few reductions that have been made in the tariff and they have been painting gloomy pictures of the deplorable state in which our infant industries are struggling at the present time. These pictures portray the factories as in a condition that is compelling them to close, with consequent ruin and distress; and the pity of it all is, that what seems to affect our good friends most vitally is the fact that the agricultural people are losing their home markets. It is suggested that when the farmers lose these markets the agricultural industry will no longer be able to exist. These gentlemen appear to appreciate the importance of this industry and pretend to be greatly interested in its welfare. Now, they claim that a saving of three-quarters of a million dollars in the tariff will not amount to anything from the standpoint of the agricultural interests, and yet at the same time, strange to say, they want us to believe that the loss of this sum will absolutely put the manufacturing industries out of business in the Dominion. Let me inform them that the farmers are thankful for small mercies. I do not suppose that this amount of money represents much to the industries of the East, but it surely' is a quite tidy sum in the eyes of the farmers to-day under existing conditions. The consternation that seized the minds of gentlemen of the Conservative party on the afternoon the budget was brought down appeared to be reflected to a rather remarkable extent in the infant industries in the remote parts ot some of the provinces. It was reported that one industry at least had collapsed during that afternoon, and later in the week it was found that there was slight hope for its recovery. The calamity howling this year seems to be coming entirely from the other
corner of the House; it is coming from those whom we have always regarded as Canadian statesmen, men who are directly interested in the welfare of Canada and not in any particular section or class of our people. I say, the blue ruin cry is coming entirely from that vicinity. The manufacturers themselves are raising the same cry, and the press of our country seems to be heralding these sad tidings I have heard of individuals spending a week in the city of Toronto on Sunday but it seems that some of our manufacturing friends have spent almost fifteen years withm the short space of time since this budget came down. The Canadian Manufacturers' Association held a meeting in Toronto recently; it, is astonishing how quickly the effect of the budget seems to have been brought about.
I quote from the Montreal Gazette the following statements:
Mr. Winslow, of the Canadian Ingersoll Rand Drill Company, Sherbrooke, said the budget, so far as his firm was concerned, read like a sheet of their catalogue with severe reductions on everything they made. For 30 years their firm had been one of the leading industries at Sherbrooke, and should employ in normal prosperous times about 1,000 hands. They were now employing about 350, with prospects of a speedy decrease.	.	.
"They had a powerful American connection in the Ingersoll Rand," and like other businesses we must get our products where we can get them cheapest, whether we manufacture in Sherbrooke or Philipsburg. With the reduction in duty on our output and no drawback on raw material it looks to me very much as though the rock drill industry in Canada is about to be dosed down, because this budget hits us very hard.
Sir Alexander Bertram said he had been in the manufacturing business for 50 years, largely selling machinery and tools to the agricultural machinery industry, but with many of their customers for the past 15 years they had not sold a tool, because of the decline of the
industry.	.
W. R. Granger, Montreal, said the alleged farmers oi the West had organized politically, and he thought it time the C.M.A. stopped soft pedalling on politics, and turned to the loud pedal. He thought they ought to start work at once on this, and also on an educational propaganda, while he considered the proposed resolution quite too weak. "What we want to do," he argued, "is to get into as good a position as the Progressives have, so that we can have some weight in Parliament behind our demands." (Applause.)
The whole gist of the report seems to be that the trouble is altogether attributable to tariff reductions, especially to those which this budget will put into effect. I am giving these quotations merely to show the House the ignorance of the people who are discussing fiscal affairs. Further down I notice that Mr. Wilkins, of Farnham, argued:
The political grain growers of the West were not farmers such as we have in the East, doing their grain mining by contract, and spending the winters in the south. This province consumes almost all its own agricultural products, and he believed 96 per cent of the Quebeckers were protectionists.
The Budget-Mr. Milne

Last season while the special committee on Agriculture was sitting one of the witnesses made bold to assert that the farmers of the West should feed steers in the winter instead of going South and enjoying the warmer climate. When he was questioned closely as to how many western farmers he knew who spent their winters in the South- and he was a man who had had quite a broad experience throughout the Dominion -he admitted that he had heard of but one farmer who went South to escape the Canadian winter. We have heard a great deal about the peaceful rural population of Quebec. For many years I envied their contentment and prosperity-or rather the glowing accounts of it which I read from time to time. But I found on making an examination-and it is now a well-known fact-that the exodus of young native born Canadians from the province of Quebec is proportionately as great as from our other provinces. Consequently, I have come to the conclusion that although the Manufacturers' Association may have good intentions, they are very, very ill informed as to actual existing conditions.
Lately we have heard a good deal about our implement manufacturers being in sore straits, and we are led to believe that the whole trouble is due to their not having sufficient protection. On the other hand we have been told that the United States were building up a tariff wall higher than ever in order to stimulate their industries and create national prosperity. In this connection it is interesting to learn of the actual conditions on the other side, and therefore I quote the following from the Literary Digest:
One organization that realizes to the full the extent of farm distress during the last two or three years is the National Association of Farm Equipment Manufacturers. The Manufacturers' Record, Baltimore, shows that the production in 1922 of farm implements was about one-third or one-half, and in some cases even less, of that in 1914.	'
Further on appears the following:
According to the association's circular twenty of the leading companies have lost $50,000,000 in two years.
To emphasize	that statement a	table is
given showing the actual production of a few of the principal agricultural implements in 1914 compared with the reduced production in 1922. I quote the following:
1914	1922
Plows	
$1,335,104	$431,409Corn cultivators	
373,934	89.633Grain binders and headers	
215,386	41.458Broadcast seeders	
106'oi8	46 889Threshers	
13,548	8,885
I refrain from reading the full list. It is very long, but there has been practically the 
same proportionate reduction of output in regard to all farm implements. This shows quite conclusively that the manufacturers of agricultural implements in the United States are not in a prosperous condition, notwithstanding that they have a supposedly model tariff to stimulate industry.
During the recess we have been bombarded with literature asking for tariff protection. I do not want to spend time in discussing it, but I must frankly confess that the men who are directing some of our industries fall very low in my estimation if the type of letters they have been sending out is any indication of their executive ability. In all the circulars which have reached me there is a strong plea for protection and yet not one of these men will tell us the actual condition of his business. The general tone of the letters indicates an intention to raise prices. There is no apparent desire at all to lower the prices of their products the whole argument being that they must raise prices in order to continue in business. One sentence from such a circular letter will make this very clear. By the way the particular paragraph I am about to quote does not deal with the tariff, but with the sales tax, which the writer wants dropped on certain products of his factory. But this is the sentence:
This sales tax will have the effect of curtailing consumption, thereby causing the manufacturer to again increase prices to meet his bills.
If we follow this through to its logical conclusion we find that eventually there will be no sales at all. By that time I feel convinced that the individuals who are responsible for this propaganda will have become exceedingly bold, and will be asking the government to subsidize them in order that they may pay their executives salaries from $25,000 to $30,000 presumably on the ground that they are consumers of agricultural products! I repeat, it is unfortunate that throughout all this special pleading for protection there is not one instance of these men attempting to show [DOT]the actual necessity of protection for their particular business.
Last session several industrial managers appeared before the' special committee on Agriculture. We had before us the manager of the Massey-Harris Company. Now, I hold no grudge against the Massey-Harris Company; I wish them every success. But if they need protection, why were they so slow, why did they not give the committee the facts as to how their capital stock was made up and what their profits and dividends had been over a period of years0 These things were

The Budget-Mr. Milne
kept almost entirely in the dark. The closest we got to it was the information elicited from one witness that between 1913 and 1920 the capital stock had been augmented by $4,000.000 and that of this amount only about $160,000 was new capital. If that kind of thing is going on it is no wonder they are not able to pay dividends.
We had before us another witness, the manager, I think it was, of the Canadian Ford Company. They were very frank in their statements. I shall not weary the House with a statement of the whole financial standing of the company, but I should like to give an example of how an investment in ten shares amounting to $1,000, made in 1907, had increased in 1923 to a value of $310,010. During that period this $1,000 invested, as I say, in 1907, had paid a cash dividend of $32,810 and had increased in stock to the amount of 560 shares, worth at that time $270,200, making the total I have mentioned, $310,010. That, it seems to me was a pretty good investment.
I noticed in Saturday Night a few weeks ago a report with regard to one of our industries, Canadian Steel. I will read a few extracts from this report just to give you an idea of the peculiar circumstances pertaining to that company. The report says:
The annual report for the year ending December 31, 1923, demonstrates that the Steel Company of Canada is once more on the upgrade in earnings. It won its way into a very enviable position during the war as evidenced by the fact that the profit and loss surplus, which stood at $3,014,642 at the end of 1915, had become $8,740,966 at the end of 1920 in spite of the fact that it paid in every subsequent year dividends on both preferred and common stocks, seven per cent on the preferred and four, six and seven per cent progressively on the common, the latter figure having been maintained since 1919. The huge surplus mentioned was shaved a little in 1921 and 1922 decreasing respectively to $8,298,517 and $7,942 372. But 1923 earning results showed a balance of $627,875.40, after paying all expenses and fixed charges and making the ample provisions considered necessary for various sinking funds and reserves, and this sent the profit and loss surplus once more skiting up to $8,570,247.75. This means an entire recovery of the ground lost in 1921 and 1922 and brings the surplus up within hail of the high point achieved in 1920. Another year like 1923, and it will be in a position unexampled for strength in its own line in Canada.
Add to this its various reserves, standing as follows:	furnace relining and rebuilding reserves, $792,-
972.68; reserves for accidents to employees, $84,811.82; contingent reserve, $546,667.23; betterment and replacement reserve, $1,885,953.82; fire insurance reserve, $200.000; bond and sinking fund reserve, $1,737,748.92; and depreciation account, $7,048,508.28, making a total of $12,296,662.75. At the end of 1915 these reserve funds only totalled $1,257,811.
Further on it speaks of paying off some other liabilities as they came due. From that I think you will see that the industry
is not suffering very much so far as profits are concerned.
A few years ago some of us heard of an industry that had been built up not for the glory of God but for the profits of the shareholders, and it was declared that that industry had in 1918 made a profit of 291 per cent. That is just an example of the condition of some of the industries that are asking for protection. Some of our industries may not be in a very good position. I am not going to say whether they are or whether they are not, because they have not given full information with respect to the actual conditions as they exist. In this connection I do not see why I should not offer a few suggestions to our manufacturing friends, because they are not backward in offering suggestions to the agriculturists, and I think I can say without boasting that I am probably just as well fitted to give a little advice to our manufacturing friends as some of them are to advise the agriculturists. We had before our committee last year an analysis of the cost of a binder. The costs of material, wages, and so on, were considered separately, and a comparison was made between the costs in 1913 and those in 1922. I will just read the figures; they are very interesting.
Material	
Wages	
Factory expenses.. Administration.. ..
Freight	
Distribution	
Branch departments,
1913	1922
$45.55	$86.21
25.10	56.77
5.51	26.55
5.10	38.65
23.91	34.69
29.41	63.15
29.41	47.31
That shows a total of $359.99 for 1922 as against $163.99 for 1913. The thing that strikes me there is that the factory expenses and administration have increased beyond all proportions. We are usually told that it is labour that is keeping the price of our implements up, but we find here that the factory expenses and administration have enormously increased. I submit that there is just as much reason for the practice of economy on the part of the manufacturers, as well as the study of more economical production, as there is on the part of the agriculturists.
I have been looking over a report with respect to the pulp and paper industry prepared by the Department of Trade and Commerce, and a startling thing to me is the number of officers and superintendents, and the amount of money that goes to them in salaries. The number of officers and superintendents amounts to one sixtieth of the total number of employees, and they draw one-eleventh of the total wages. It looks to me
The Budget-Mr. Milne

as if that was rather out of proportion. In addition to the officers and superintendents there are technical experts and clerk stenographers whom I put in along with the common labourer, and it looks as if there was room for same paring in officers and superintendents. I do not wish to leave a wrong impression. I am absolutely in favour of a man drawing a salary in proportion to his ability. I am not one of those who think that every one should be paid the same wage or salary, but I am of the opinion that many of our industries are loaded down with officers who are not much more than parasites.
In looking over another return from the same source, prepared by the Department of Trade and Commerce, I find that in the hosiery and knitted goods industry the number of employees on salary has increased from the year 1920 to 1921 by 20 per cent, whereas the number of wage earners has increased by only 7 per cent. As I said before, I do not know the reason for that, and I am not able to go any further, but it seems to me that the management cannot be as efficient as it might be. Another place where a good deal of work needs to be done, and it should be done by our friends, is in the matter of distribution. The present system is extremely costly and inefficient. I believe there are millions spent on advertising that is an absolute waste, and in that connection I want to read just a short extract from the evidence of a witness who was before the committee last year, a manufacturer who lives very close to this city. Speaking of a report by Congressman Anderson he said-
My view is and it was before I read this, that the retailer has to a certain extent lost his function, and I am going to make another statement that I know will be challenged outside of here, if it should receive any publicity, that is that one of the tremendous economic ills of this country and of the United States as wed, is national advertising. There are hundreds of millions of dollars spent in advertising for which there is no economic return. I contend I have studied the question, and that advertising is an advantage to the advertiser. He makes money out of it. It pays to advertise and it pays the medium of advertising. While I am on that, I would say it has enabled the newspapers to pay more for their editors and employees, and it may be a good thing for the newspaper.
I hat is what Mr. Sparks says about advertising, and I agree with him heartily. I maintain that our industries have a great big field to work in so far as a more economic distribution of their goods is concerned. I do not confine that to the manufacturing industry at all, for the same thing applies to our agricultural products, which are not in my opinion marketed in an efficient manner. We had our attention drawn last year to the fact that apples for which the producer received $4 a barrel were retailed at the equivalent of $27

a barrel, and many similar instances were given. We found that the farmer who was milking his cows twice daily got five cents a bottle for his milk, while the distributor in the city got six and a half cents. That seems to me altogether out of all proportion.
There is just one other thing I want to say by way of advice to the manufacturer. Let me suggest that you apply the same remedy to manufacturers as you recommend for agriculturists. If you are not making a profit out of the product of your factory, you are not making the right product; that is what they tell the farmers. If you cannot make any money turning out baby carriages, make automobiles. If you cannot make a profit manufacturing wagons, make sleighs. That may sound ridiculous, but it is just about as sensible and reasonable as the advice that is given to' the farmer from certain sources. I want to say that it is quite impossible for a farmer who has been making a specialty of growing grain to turn round immediately and produce d'airy products profitably. There is a real art in dairying if you are going to make a success of it, and the same is true of poultry. A man who is a good dairyman may not be able to make any money out of poultry. It is quite impossible for a farmer to immediately swing around from one type of farming to another successfully. It is almost as impracticable as to expect a manufacturer to turn from making baby carriages and make a success of manufacturing automobiles.


John Arthur Clark: They grow grain, and raise
poultry, cows, and so forth in Ontario. How do they manage to do it?


Robert Milne: If the hon. gentleman will
have a little patience, I am coming to that. From his question I would judge that he shares the same opinion as many others-


John Arthur Clark: I have not expressed an
opinion; I am asking for information.


Robert Milne: I said, I should judge from
his question. I would like to give a quotation from the Agriculturist Gazette which is published in Ottawa by the Agricultural department. There seems to be a general impression that the farmers of the West are merely wheat growers or wheat miners as they are called. The impression is not well founded, and I think this quotation will perhaps serve to prove that as well as anything I know of.
In the provinces of Manitoba, Saskatchewan and Alberta the dairy industry has developed since 1910 in a remarkable manner. The output of creamery butter having increased from 4,161,947 pounds, valued at $459,254 in 1910, to 28,619,641 pounds, valued at $10,348,762 in 1921 A further increase in 1922 over 1921

The Budget-Mr. Milne
is recorded as follows: In Manitoba 23.5 per cent, Saskatchewan 25 per cent and Alberta 20 per cent.
I should think that would indicate that the agricultural people, even in the western provinces, were doing pretty well. What are the conditions that are confronting agriculture today? It seems to me, Mr. Speaker, that there is no use in trying to delude ourselves in regard to actual conditions. We have heard much about the big crops that were produced in western Canada this year. We are told of the tremendous volume pouring into the ports and being exported from the country. But let us analyse this matter as far as the farmers are concerned. The total field crop production for 1923 was $892,572,300, in 1922 it was $962,616,200 and in 1921 it was $931,862,670. Hon. members will see that it is decreasing right along. Let us analyse it a little bit further. Take the commodity of wheat. We find that the production of wheat increased last year by a considerable amount. The production of wheat last year was estimated at a little over 474,000.000 bushels as against 399,000,000 bushels for the previous year. I have the figures for oats, barley and flax but I will not weary the House with them except to say that all down the line we have increased production in 1923 over 1922, but the value of our total production showed that it had decreased. It is decreasing right along. So far as the farmer is concerned, he is surely doing his part in producing the goods. These figures refer to field crops.
Now coming to diversified farming, I will deal first with the commodity of bacon. I took these figures from the Trade and Commerce reports ending March, 1923, so that when I say 1923 it is really not for the calendar year 1923. The amount of bacon exported in
1922	amounted to 992,080 hundredweight, and in 1923 it was 1,015,901 hundredweight. Hon. gentlemen will notice that there was an increase in the amount, but when we come to the value in 1922 it was $23,012,480 and in
1923	it was $22,536,397. Then the live cattle exported in 1922 amounted to 161,483 head and in 1923 to 229,080 head. That showed an increase in the export of live cattle of 42 per cent. The value of our exports in 1922 was $7,852,111, and in 1923, $8,738,243, or an increase in the value of only 11 per cent. In the commodity of butter we show an increase of 260 per cent in volume and 255 per cent in the returns. In the matter of cheese we have a decrease of 85 per cent in volume and 82 per cent in returns. Now if we sum up the whole agricultural industry as it is summed up in the agricultural statistical bulletin we find that we have a total value for agriculturelands, buildings and so on-of $6,744,000,000 and we find that the gross revenue was $1,420,000,000. These figures are so large that it is almost impossible to grasp their meaning. According to the last census returns we had 798,360 farmers in Canada. We divide our gross revenue and find out what each farmer gets, and it amounts to about $1,700 per farm. It was estimated that the taxes, Dominion, federal, provincial and municipal amounted to about $100 per individual, with an average family of five, so that it would make $500 of a tax bill to start with. Now if we take the depreciation on the implements and buildings, we find that there is a depreciation of 10 per cent on implements and buildings, which I think is very fair. We have $142,737,000 of a depreciation there. If we allow 5 per cent on the total capital investment, that amounts to another $338,723,000. If we divide this for each farm we find an added cost again of about $600. So that if we take our interest and depreciation of $600 and taxes $500 we find we have about $600 per farm left. Out of that the farmer has to pay his hired help and buy his machinery, twine, and so on. That is the actual condition, I believe, so far as agriculture is concerned.
While our products increased in quantity, yet there was a decrease all along the line in value. Everybody is anxious to help the agricultural industry, and everybody i3 watching it. The manufacturers, the bankers, the railroads, the governments and every financial interest in the Dominion during the summer have their fingers on the pulse of agriculture and a continuous study is being made of conditions. They realize the fact that a big crop or good returns means prosperity to them as well. I wonder if my hon. friends who are asking for protection sincerely believe that we in Canada must wait until our industries will build up so as to provide a home market for our agricultural products. I used to wonder why the buffalo were brought to the park at Wain-wright and left at the edge of the prairie, and I have just come to the conclusion that the idea was to turn them loose and let them roam up there when the western provinces are again depleted of the population that is there at the present time. That will be necessary, and a long period will intervene before we need to use those lands again if we have to wait for home markets for our agricultural products.
As regards the home market and the prices of our agricultural products, that does not amount to a hill of beans. We find that the butter market at Montreal, which, I under-
The Budget-Mr. Milne

stand, is regulated by the export market, is the determining factor of the price of our dairy products. We find that the price of our wheat and other grain is determined by the price of grain at Liverpool. I cannot see why we agriculturists should be fooled by waiting for and expecting great prosperity when we get a huge industrial Canada that will consume more of our products. What has been done that will ' benefit agriculture, that primary industry which produces nearly one-half of our total exports? What has been done that will make it more prosperous? Last year I think we had a modest prayer from the Minister of Finance (Mr. Fielding) in which he remarked that if we had a good crop, the West would be prosperous again. The West had one good crop last year; nobody can dispute the fact that we had a big crop, and yet conditions are apparently not very much better. We also had a kick in the ribs from the ex-Minister of Agriculture (Mr. Tolmie), who said that if farmers improved production by improving herds, they could pay the duty on their agricultural implements. That was the sympathy he gave. A little further on in his speech he was speaking of conditions and the time when pea fed hogs were sold for 2J cents a pound. He said:
I venture to think that these conditions produced better citizenship than are produced to-day by all the spoon feeding done by federal, provincial and municipal governments.
I have been trying to appreciate what he meant and what he was getting at, but for the life of me I cannot understand when the farmers have been spoon fed. Spoon feeding is the very thing we are trying to get away from. Our industries have been spoon fed for the last forty years and they are taking' it well yet. Why remarks like that should be directed at agriculturists is beyond my comprehension. There seems to be an impression in eastern Canada that when a delegation from one of the eastern provinces appears at Ottawa asking for something, they are demanding simply their rights, whereas, when a western deputation appears, it is trying to grab off something at the expense of the remainder of the country. This, it seems to me, is a peculiar attitude to take. We are told by a good many that we are blind; that protection is not the cause of all our troubles. We do not for a moment think that protection is the cause of all our troubles. We are different from our protectionist friends in that respect. They think, if they lose their protection, they are absolutely lost; that there is nothing that hurts them but the lowering of duties.
The solution to our problems, it seems to me, lies in two sources. I am not one of those who believe that the government can

bring about prosperous times over night or in a year or in a couple of years. I am not one of those who believe that the agriculturists should lie down on their oars and not try to help themselves. Both have an important part to fill, and I am not going to deal here with the part that the agriculturists themselves have to play. We have to have cheaper production, and the farmer can do something towards helping that situation himself by improving his methods and so on as best lie possibly can- The government can help us in that respect by lowering the tariff and giving us cheaper implements of production and cheaper equipment to carry on our industry with.
We also need cheaper transportation. At the present time, it costs about 33 per cent of the value of a steer to take him from Saskatoon to the Liverpool market. Thirty-three per cent of the value of a steer is used up in transportation. We must do everything we possibly can to bring about lower freight rates. We must develop our ocean ports at the most strategical points. I think in this regard I might mention the Hudson Bay railway which the West is asking for, and I notice, from a report in the paper the other day, that the ex-Premier of Manitoba stated that he believed 95 per cent of the western people were behind him in the belief that the Hudson Bay route was feasible and that it should be given a trial. With the vast amount of money that has been spent there already and the small amount that it will take to give it a trial, it seems to me that it should be tried out. When I suggest development along those lines, I do not mean to develop politically; I do not mean to build elevators where there is no grain to ship; I do not mean to build dry docks where there are no boats to dock. I think conditions are more serious at this time than they ever were in the history of our Dominion and they should be given earnest consideration. In particular, freight rates have been unreasonably high, and yet Canadian shippers are protected by coastal regulations. We find that our products are being discriminated against in ocean transportation. We appear to find ourselves somewhat helpless in this matter, but I do not see why we should not keep up a vigorous howl until we get redress along that line too. It is unreasonable to expect that the Canadian farmer can pay more for taking his goods to the British market than his friend the American farmer. Why should two sacks of flour in the same hold bear a different rate while they are crossing the Atlantic ocean? That seems to me to be extremely ridiculous.

The Budget-Mr. Milne
I intended to deal somewhat with rural credits. It is too late, I am afraid, to save a number of our farmers. Many of our farmers to-day are bankrupt, and the only thing left is to assist them through the bankruptcy court and then to turn around and give them the assistance which new immigrants into our country are receiving. Then they will have a new start. They will know the conditions and they will make much better progress than will new immigrants that come in.
We have another class of farmers who are apparently still solvent, but whose credit is exhausted. I do not know what we can do with those, but I certainly think that the government made a big mistake when they practised economy on the Agricultural Instruction Act. These are the people who could be helped in this way by putting men in the field and enabling them to change their system wherever it was possible to do so. If this were done the morale of these people could be stimulated to such an extent that in a great many instances they would do considerably better. Then we have others who still have a little credit left. I am pretty well convinced that if conditions continue as they are at present our farmers' credit will soon have been exhausted; certainly they cannot continue paying 8 to 10 per cent interest on their money. If the government can borrow money at 5 per cent, I see no reason why the farmer should have to pay between 8 and 10 per cent. I know what the argument is:	It is
contended that there is a risk in lending money to the farmer and consequently the rate must be increased. But that strikes me as a most absurd argument, because the higher the rate the greater the risk must be. Where will you stop? At present the farmers of western Canada are making an heroic effort to launch one of the greatest marketing schemes ever undertaken and I think the government would be well advised to assist them to the extent of giving back to those provinces the money that rightfully belongs to them in order that they may be able to carry on this work that they have begun. I refer to the money left by the Wheat Board of 1919. They are trying to help themselves, but they are handicapped through lack of finances, notwithstanding that their own money is lying in the treasury here and is refused them.
The establishment of agriculture on a sound basis is to my mind a truly national problem. We were never before in such a serious condition as we are in at the present
time, and the time has come when every one should cast aside political prejudices so that all might sit around the table in cooperation. The manufacturers, the farmers, the lumbermen and the representatives of all other industries in the country should get together in an effort to solve this great problem. This country, I think, is undertaking a tremendous experiment in connection with agriculture. We heard a great deal yesterday from the hon. member for Fort William and Rainy River (Mr. Manion) in regard to the development that has taken place in highly protected countries. But the hon. gentleman did not tell us anything about the peasantry in those countries. The Dominion of Canada and the United States are engaged in one of the biggest experiments known to history, and we- are trying to carry on agriculture without any such peasantry. Agriculture is one of the noblest callings that a man can follow, and there is no reason why we should be ashamed of it. There is no reason why we should have to adopt any low standard of living. The farmers of this country and of the country to the south of us are determined to improve the conditions of agriculture and they will not tolerate any standard of living below that to which they are justly entitled. They are going to make agriculture an industry that they may be proud of. The experiment, I say, is a tremendous one, and I hope sincerely that our protectionist friendis will not follow the example of other countries and throw upon our agricultural people such burdens as will impoverish them and make a peasant race of this fair Canada of ours.
On motion of Mr. Clark the debate was adjourned.
On motion of Mr. Graham the House adjourned at 11.25 p.m.
Wednesday, April 30, 1924