1924-06-04

[Stage Direction]
Mr. JOSEPH ARCHAMBAULT (Chambly and Vercheres) presented the first report of the select standing committee on Privileges and Elections, as follows:
Questions
[Stage Direction]
The select standing committee on Privileges and Elections beg leave to present the following as their first report:
Your committee recommend that they be given leave to have their proceedings and evidence printed from day to day for the use of the members of the committee and that rule 74 be suspended in reference thereto.
Your committee also recommend that their quorum be reduced to seven members.
He said:	Mr. Speaker, with the consent of
the House I would like to move:
That the first report of the select standing Committee on Privileges and Elections be concurred in.
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: This is the report just read? I understand it involves the committee sitting while the House is in session and the printing of the report. May I ask whether the committee is unanimous in the belief that it will be neccessary for the committee to sit while the House is in. session?


Mr. ARCHAMBAULT:: We are not asking for that. We are asking only for the printing and for the reduction of quorum.


Mr. SPEAKER:: This motion requires
unanimous consent.


[Stage Direction]
Motion agreed to.

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Shaw be added to the special committee on Pensions, Insurance and Re-establishment.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals): With the consent of the House, Mr. Speaker, I beg to move, seconded by Mr. Macdonald:
That rule 10 of the House of Commons relating to the appointment of the select standing committees of the House be amended by adding to the select standing committees of the House for the present session a select standing committee on Railways and Shipping owned, operated and controlled by the government, to which will be referred the estimates of the Canadian National Railway and the Canadian Merchant Marine for the present session for consideration and for report to the House; provided, however, that nothing in this resolution shall be construed to curtail in any way the full right of discussion in committee of Supply.
Motion agreed to.
Arthur Meighen: Will the minister tell
us when, he intends to supplement this resolution, by a further motion in accordance with the information given in his address the other day, enlarging the powers of the Public Accounts committee, so as to embrace examination of the railway expenditures at fitting times?


Mr. GRAHAM:: I am not sure that I gave the intimation to which my hon. friend refers. It was mentioned. I hope to be able to name the committee referred to in the motion today, with the consent of the different wings in the House, some time this week.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk)

Mr. SEGUIN:: 1.	What amounts were paid the Speaker's secretary, the last year he occupied that position: (a) as a regular salary; (b) as a sessional clerk; (c) as a bonus; (d) in any other capacity?
2.	What amounts did Miss Mansbridge, when in the same office, receive for that year: (a) as a regular salary at $4 per day; (b) as a bonus; (c) in any other capacity ?
3.	What yearly amounts do the two stenographers and typewriters, belonging to the members' staff and assigned to the Speaker, in lieu of secretary, receive: (a) as a regular salary; (b) as a bonus; (c) in any other capacity ?


Right Hon. Mr. MACKENZIE KING:: 1.	Mr. Gaston Delisle acted in that capacity for 22-J days in March and the whole month of April 1922. He was paid at the rate of $50 per month as secretary, plus $5 per day as sessional clerk, a total of $350.31.
2.	Miss Mansbridge was not employed in the Speaker's office whilst Mr. Delisle acted as private secretary.
3.	$6.50 and $6 per day as regular salaries.. They receive no bonus and are not employed in any other capacity.


D.S.C.R. MEDICAL OFFICERS, ST. JOHN
Mr. HANSON:: 1.	How many medical men are attached to or drawing salaries for services rendered to the Department of Soldiers' Civil Re-establishment at St. John, New Brunswick ?
2.	What are the names of each and what are the respective dates of their appointments?
3.	What salary or remuneration is paid to each such medical man so acting?
4.	What is the gross amount of salary and allowances, if any, paid to each such medical man since appointment ?
5.	How many patients are under treatment in this-unit at the present time?

Questions


Hon. Mr. BELAND:: salary and the gross amount of salary paid
17	in each case is shown in the schedule an-
2, 3 and 4. Their names, positions, respec- nexed hereto, tive dates of appointment, present rates of
Schedule showing the names, positions, respective dates of appointment, present rates of salary and the gross amount of salary paid to medical officers employed by the Department of Soldiers' Civil Reestablishment in New Brunswick.
Name	Position	Date of appointment	Present annual rate of salary	Gross payments since appointmentChief Medical Representative	1- 8-21	$ 4,000	$ cts. 7,066 66Pratt Dr C! M	1- 1-21	4,000	12,500 00Full Time Medical Officer	16-12-21	3,000	6,175 00Part Time M.O. and Asst. Surgeon	1- 7-19	2,4C0	11,825 00Nase, Dr. P	P.T. Eye, Ear, Nose and Throat Specialist	1- 6-21	2,400	7,200 00White, Dr. W. W	P.T. Specialist in Surgery	1- 7-18	2,400	14,200 00Kirkland, Dr. A. S	P.T. Radiographer	1- 6-22	600	1,200 00
5. During week of May 17, 107 patients were undergoing treatment in hospital; 116 clinical treatments were given to other patients, and 17 pensioners were examined.


MCDONALD'S LANDING
Mr. McQUARRIE:: 1.	What progress has been made in the construction of the floating wing dams at McDonald's Landing on the Fraser river for protection of the banks of that river?
2.	Is it true that the work has been stopped, and if so, what is the reason therefor, and when did the stoppage take place?
3.	Has the appropriation for this work been exhausted?
4.	Is it a fact that the 2nd floating wing dam was washed away before being finally completed, and is now hung up on the snag on the river bank?
5.	Is it a fact that representations were made by farmers living in the neighbourhood that more men should be put on this work?


Hon. Mr. KING (Kootenay):: 1.	Of two wing dams under construction, one had about two-thirds of the material in position and the balance on the bank. The material for the other wing dam had been delivered but not placed in position.
2.	Yes. Work stopped March 31,	1924,
as appropriation for same lapsed on that date.
3.	No.
4.	Before wing dam in position had been loaded by the river with sand and gravel, the freshet, carrying driftwood, almost destroyed it.
5.	No representations were made by farmers living in the vicinity that more men should be put on this work, but all were employed who could be handled efficiently.


CANADIAN PACIFIC RAILWAY LEASES
Mr. KELLNER:: When do the Canadian Pacific Railway leases terminate covering the following lines: (a) Alberta Central Railway; (b) Calgary and Edmonton Railway; (c) Alberta Railway and Irrigation Company; (d) Edmonton, Dunvegan and British Columbia Railway; (e) Central Canada Railway?


George Perry Graham: Mr. Speaker, I think my hon. friend on reflection will see that the department has not the information asked for in this question. I think if he would write himself, he could get the information as quickly as the department could. However, if he does not feel like doing that, I will enclose his inquiry to the parties interested, and see if we will get a reply.


CANADIAN NATIONAL RAILWAY LINES
George Perry Graham: On Wednesday last
the hon. member for St. John and Albert (Mr. Baxter) asked certain questions regarding the operation and the mileage of the Canadian National Railways in the United States, and also put a query as to the taxes paid by the Canadian National in the United States. The reply that I gave him was that the information concerning all his questions except No-5 would be found in the annual statement placed on the Table. I have the information now in reference to question No. 5, and I presume it will be satisfactory if I mail it to the hon. gentleman, as the question is off the order paper.


UNOPPOSED MOTIONS FOR PAPERS
[Stage Direction]
On the motion of Mr. CARROLL:
For a copy of all letters, telegrams, receipts, vouchers, tenders, awards and other documents having
[Stage Direction]
Unopposed Motions for Papers
reference to or bearing on an item of $7,366,091.85, Canadian National Railways, Toronto, coal, as appears in Auditor General's report, Volume III, year ending March 31, 1923, at page W-184, including the names of the persons, firms and corporations from whom the Canadian National Railways purchased said coal and the prices paid therefor and any contracts in writing relating to said coal.
Mr. CARROLL:: Dropped.
On the motion of Mr. CARROLL:
For a copy of all letters, telegrams, receipts, vouchers, tenders, awards and other documents having reference to or bearing on an item of $8,907,846.06, Canadian National Railways, Toronto, coal, as appears in Auditor General's report, year ending March 31, 1922, Volume III, at page W-165, including the names of the persons, firms and corporations from whom the Canadian National Railways purchased said coal and the prices paid therefor and any contracts in writing relating to said coal.


William F. Carroll: Dropped.


Arthur Meighen: Referring to these two
motions for production of papers, I observed that the mover called "dropped," but as I apprehend the rules, they cannot be dropped without the consent of the House. May I ask why they are dropped; if there is any special reason why they should not pass?


George Perry Graham: I do not understand the
rule that way, Mr. Speaker. The motions are not in the possession of the House until they are moved. As a matter of fact, every day we see notices of motions and resolutions of hon. members that have been standing on the order paper for weeks and months dropped at the request of the hon. member.


Arthur Meighen: By consent.


George Perry Graham: No, without being brought to the House at all. Ask your desk mate.


Hewitt Bostock: In the present instance
the motions were only called; they were not put. There is a little distinction. I do not want to be too casuistic, but I believe it is the right of the hon. gentleman to drop his motions as they have not been put.


Arthur Meighen: The reason I have understood the rule differently is this: If this is the correct interpretation, Mr. Speaker, it is in the power of any hon. member to forestall another hon. member who is in earnest about a resolution by simply placing a resolution on the order paper and holding it till the session is well advanced, when there would be no opportunity to get any further-this applies more to the ordinary motions than to these-and then quietly, of his own will, and without the consent of the House, drop-
ping his resolution. I have understood the rule to be that the member is in the hands of the House once his motion goes on the order paper.


George Perry Graham: I held that idea myself
until a few days ago, when it was dispelled. I have no objection myself, Mr. Speaker, to allowing these motions to stand until you give a ruling, but I think my hon. friend will find that the practice has been that these motions are the property of the member until they come before the House by way of moving them.


Hewitt Bostock: Here is the authority,
Bourinot, page 299:
If a member neglects or declines to proceed with a motion, the House cannot force him to do so, but he has a right to drop it or it may be dropped under rule 32. A member who has given notice of a series of resolutions may withdraw some of them and go on with the others.
It has always been the practice in my recollection that a member may insert a motion on the order paper, and then drop it. Still, I am bound to say that the situation exactly as has been described by the right hon. leader of the opposition has created some inconvenience, and this year one of the hon. members from British Columbia called on me and said that he had been forestalled that way, because members did not proceed with their motions, and he had a similar one himself on the order paper. He suggested that possibly the rules of the House might be. amended in order to prevent any such recurrence in the future. However, it is a. question for the House to decide.


William F. Carroll: I would ask, if I may,
that the two resolutions stand.


Hewitt Bostock: The view held by May is the same as that held by Bourinot. On page 214 of May, twelfth edition, I find:
A notice cannot be withdrawn from the notice paper of the day or the current issue of the order book in the course of a sitting, but by an intimation to the clerks of the table it can be withdrawn from a future issue.


Arthur Meighen: Do I understand that
the motions stand or are dropped?


Hewitt Bostock: Dropped.


Mr. LOGAN:: I understood the hon. member to ask that they should stand.


William F. Carroll: I made that request, Mr. Speaker.


Hewitt Bostock: The first one?


William F. Carroll: Both.

Unopposed. Motions for Papers


Hewitt Bostock: I understood that the
hon. member wanted them dropped. If I was wrong I must apologize. I will take the word of the hon. member, of course. These two motions stand.


PRODUCTION OF CARBON-BLACK
Mr. KENNEDY (Edmonton):: For a copy of the agreement entered into between Canadian Petroleums, Limited, and the government, regarding the production of carbon-black and the leasing of oil-lands, and a copy of all correspondence and telegrams in connection therewith.


HOPPE COAL LEASES
Donald MacBeth Kennedy: For a copy of all letters, telegrams and other documents passing between J. A. Schryburt, or Schreibert, and the Prime Minister or other members of the government, relative to the Hoppe coal leases.


TRUST COMPANIES ACT, 1914
[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved that the House go into committee at the next sitting to consider the following proposed resolution:
Resolved, That it is expedient to amend the Trust Companies Act, 1914, and to provide:
1.	That the Superintendent of Insurance shall annually ascertain and certify the total amount of the expenditure incurred by the government for or in connection with the administration of the act during the last preceding fiscal year, and the total amount of income received during the last preceding calendar year by each company, and the findings of the superintendent shall be final and conclusive.
2.	That thereupon the superintendent shall ascertain the ratio or percentage which the total expenditure so found and certified bears to the aggregate of the income aforesaid, and shall assess each of the companies an amount equivalent to that percentage of the total amount of the income received, and such assessment when certified by the superintendent shall be binding upon the said companies, and be final and conclusive.
3.	That the amount so assessed against each company shall constitute a debt payable to His Majesty, and shall be payable upon demand of the superintendent, and may be recovered as a debt in any court of competent jurisdiction.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House.
Motion agreed to.

[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved that the House go into committee at the next sitting to consider the following proposed resolution.
Resolved, That it is expedient to amend the Loan Companies Act', 1914, and to provide,-
1.	That the Superintendent of Insurance shall annually ascertain and certify the total amount of the expenditure incurred by the government for or in connection with the administration of the act during the last preceding fiscal year, and the total amount of income received during the last preceding calendar year by each company, and the findings of the superintendent shall be final and conclusive.
2.	That thereupon the superintendent shall ascertain the ratio or percentage which the total expenditure so found and certified bears to the aggregate of the income aforesaid, and shall assess each of the companies an amount equivalent to that percentage of the total amount of the income received, and such assessment when certified by the superintendent shall be binding upon the said companies, and be final and conclusive.
3.	That the amount so assessed against each company shall constitute a debt payable to His Majesty, and shall be payable upon demand of the superintendent, and may be recovered as a debt in any court of competent jurisdiction.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House.
Motion agreed to.
INSURANCE ACT, 1917, AMENDMENT Hon. J. A. ROBB (Acting Minister of Finance) moved that the House go into committee at the next sitting to consider the following proposed resolution.
Resolved, That it is expedient to amend the Insurance Act, 1917, and to provide,-
1.	That there shall be a department of the government of Canada to be called the Department of Insurance over which the Minister of Finance shall preside, and the Governor in Council may appoint an officer to be called the Superintendent of Insurance, who shall be the deputy head of the department and hold office during pleasure. Such officer shall be paid such salary as may be authorized by law, and perform such duties as are prescribed.
2.	That the Superintendent of Insurance shall annually ascertain and certify the total amount of the expenditure incurred by the government for or in connection with the administration of the act during the last preceding fiscal year and the total amount of gross premiums received in Canada during the last' preceding calendar year by each company licensed under the act and by each company not licensed under the act but transacting life insurance business thereunder, deducting the amount of the dividends paid or allowed by each such company to its policy holders in Canada during the said year, and the findings of the superintendent so certified shall be final and conclusive.
3.	That thereupon the superintendent shall ascertain the ratio or percentage which the total expenditure so found and certified bears to the aggregate of the net receipts, aforesaid, and shall assess each of the companies an amount equivalent to that percentage of the gross premiums received in Canada, less dividends, and such assessment when certified by the Superintendent, shall be binding upon the said companies, and be final and conclusive.
4.	That the amount so assessed against each company shall constitute a debt' payable to His Majesty, and shall be payable upon demand of the superintendent, and may be recovered as a debt in any court of competent jurisdiction.
[Stage Direction]
The late Mr. MacKelvie
[Stage Direction]
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House.
Motion agreed to.
DEATH OF MR. JOHN A. MacKELVIE, M.P.
On the Orders of the Day:
William Lyon Mackenzie King: Mr. Speaker, I rise to
express something of the sorrow which all hon. members of this House must have experienced this morning on learning of the very sudden death of one of our number, Mr. John Armstrong MacKelvie, the member for Yale. With characteristic fidelity the hon. member was in his seat in this chamber last evening. He left the House shortly before ten o'clock, and we are informed that at one o'clock this morning he was seized with heart failure and died with tragic suddenness. Hon. members on this side will join with my right hon. friend (Mr. Meighen), and those who sit opposite, in deploring the loss to this parliament of one who was a much honoured and highly esteemed member of this parliament.
Though Mr. MacKelvie was born in the Maritime provinces he was associated, during most of his life, with western Canada. He went to Calgary at the age of eighteen years, and a year or two later served with the Alberta Mounted Rifles in the Riel Rebellion. Shortly afterwards he went to reside in British Columbia, first in Vancouver and subsequently in Vernon. For the last thirty years of his life his activities, both as a journalist and as a member of parliament, were identified more particularly with the interests and politics of the Pacific province. Mr. MacKelvie entered parliament at a byelection in 1920, and was re-elected at the general election in 1921.
In his endeavour to mould thought and opinion by the written and the spoken word, Mr. MacKelvie brought to his task the attributes of a generous and kindly disposition. He was a man of high intellectual attainments, and of broad human sympathies. Though we on this side of the House differed from him in political opinion, we recognized that both in his writings and in his verbal utterances his views were expressed with conviction and with moderation and he commanded our esteem and high regard.
I express to my right hon. friend the leader of the opposition my sympathy in the loss of one who has been a loyal, devoted and

helpful colleague as well as supporter. I should like to express also to the constituency of Yale my sense of the loss it has sustained in the death of one who during the period of his parliamentary career represented its interests with ability and fidelity. I know the House will desire that on its behalf I should express to Mrs. MacKelvie our profound sympathy in the sudden and overwhelming bereavement she has sustained.


Arthur Meighen: Mr. Speaker, our meeting this afternoon is clouded with the shadow of a very great loss indeed. All of us will find it difficult to banish from our minds the sense of depression and of sorrow that followed the sad announcement of this morning, particularly those who sit in this section of the chamber. We feel that at this moment we suffer a calamity the memory of which will not easily be removed.
My association with Mr. MacKelvie personally dated only from 1920. In that year -due to the resignation of the previous member, Hon. Martin Burrell, the present Parliamentary Librarian-a by-election occurred in the constituency of Yale, British Columbia. From the beginning there appeared no question as to who should succeed the previous representative so far as the candidate for the Liberal-Conservative party was concerned. I visited the district at the time and was impressed with the general sense of confidence felt in Mr. MacKelvie as a citizen, and with the high tribute paid him for his constant, faithful public service and, generally, the wonderfully unique standing which he held in the community in which for so long he had lived. Coming to that constituency from the far East of Canada he enjoyed a knowledge of our whole Dominion, a sweep of vision that stood him in good stead in his efforts in the federal field; nor did he ever lose his very deep and prevailing affection for his own constituency. In the House of Commons, from the very hour in which he rose first to second the Address in reply to the Speech from the Throne his standing in the House was fixed. He understood every subject he attempted to discuss. His chief outstanding characteristic as a public man was fair-mindedness; his chief moral characteristic was fidelity. These pervaded his every utterance from the first to the last. Nor throughout the whole course of his life here did he ever allow anything to interfere with that sedulous attention to duty which has characterized his whole life. We knew him as a companion as well as a political colleague; we knew him

Indian Reserve Lands
as an associate in times of success and in periods of reverse, and we can never forget the loyal friend we have lost. I am very grateful indeed to the Prime Minister for the generous tribute he has rendered, and I join with him in a note of sorrow and of sympathy for her who, most of any one in all the world, feels the terrible disaster of this hour. I am sure the entire House will join in expressing to her our deepest sympathy and regret.


Mr. ROBERT FORKE (Brandon):: Mr. Speaker, on behalf of the members who sit in this section of the House, I wish to associate myself with the sentiments expressed by the Prime Minister and the right hon. leader of the opposition (Mr. Meighen). The news which came to members of the House this morning of the sudden passing of Mr. MacKelvie was a great shock to us. As has already been mentioned, he was in the House with us last night, and the first intimation we got when we came to the buildings this morning was that he had passed away. I am glad to be able to say that Mr. MacKelvie was one of the first friends I met when I came to Ottawa for the first session of this parliament. I do not know exactly what was the attraction, but almost immediately on coming to Ottawa I found myself in very close relationship with Mr. MacKelvie, and I am very glad to be able to say that, during the three sessions which I have attended, that friendship has been maintained. When I came down from Winnipeg for the opening of this session, Mr. MacKelvie happened to be on the same train; and in the two days when we were fellow-travellers we had many opportunities of conversation and of strengthening our friendship; and, while differing on some public questions, we found many interests that we held in common. I found that he was a man of great sympathy, of high attainments and a wide knowdedge of public affairs. I am sure that to-day our sympathy goes out to the bereaved wife who is in rather delicate health; and the attention and the care which Mr. MacKelvie bestowed upon her, during that railway journey, was beautiful to witness. I am sure that through all the years to come one of the greatest consolations of her life will be the sweet memory of that beloved husband who has passed away. Mr. MacKelvie did not speak often in this House, but when he did speak he always conveyed to his hearers in this House an impression of sincerity and ability to grasp the different sides of any question under discussion.
I join with the hon. members who have spoken in expressing my sympathy to the 17&i
members of the Conservative party in the great loss they have sustained. Mr. MacKelvie served his province well, and was always, I think, working in the interests of this great Dominion.



BUSINESS OF THE HOUSE

[Stage Direction]
On the Orders of the Day:
Robert Forke: Does
the government intend to take any steps to expedite the business of the House, so that we can make better progress than we have been making in the past few weeks. We are in the month of June now; we have a lot of business to do, and I hope we shall proceed a little more quickly.


William Lyon Mackenzie King: I think the matter of
expediting the business of the House rests more with the members than with the government.


Robert Forke: What about the holidays?


William Lyon Mackenzie King: It is the intention of the government to take Wednesday nights after this week, but not to-night.



INDIAN RESERVE LANDS

[Stage Direction]
On the Order being called.
Second reading of Bill No. 59, for the settlement of certain questions between the governments of Canada and Ontario respecting Indian Reserve Lands.-The Minister of the Interior.
Hon. CHARLES STEWART (Argenteuil) (Minister of the Interior):: I find that in, connection. with this bill there have been certain errors in the schedule. I therefore move that the order be discharged. I propose to reintroduce it in proper form.


Arthur Meighen: I do not understand discharging the order from the paper merely because of an error in the schedule. Why not correct the error in committee?


Charles A. Stewart: It is rather important that this agreement between the government of Ontario and the Dominion government should be in proper form. There is another matter in connection with this bill; I doubt if it could be called an omission, because this is not really a money bill; the law clerk calls attention to the fact that it is not introduced by a resolution, and he thinks it should be, inasmuch as it deals with the passing of money between two governments. I propose to re-introduce the amended bill with the amended schedule, and in proper form, so that there will be no mistake about it.

Customs Tariff


Arthur Meighen: The second reason is
certainly a good one for having the motion declared out- of order, which is virtually the same as a discharge. Is the schedule the agreement itself?


Charles A. Stewart: Yes, it is
the agreement between the two governments.


Arthur Meighen: How could there be an
error in that if the, two governments have executed it?


Charles A. Stewart: The error is in the preparation of the bill. There is no error in the agreement itself. It is not properly set out in the bill as presented to the House.


Arthur Meighen: That, of course, could
be corrected in committee.
Resolution agreed to by unanimous consent and bill withdrawn.



CUSTOMS TARIFF, 1907, AMENDMENT

[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved the second reading of Bill No. 127, to amend the Customs Tariff, 1907.
Mr. ALEXANDRE DOUCET (Kent, N.B.):: Mr. Speaker, while this subject was
under discussion some few weeks ago, I had occasion to express what I thought was the opinion of my constituents in regard to the budget proposals. Shortly afterwards, I was taken to task by the hon. member for Gloucester (Mr. Robichaud), the hon. member for Westmorland (Mr. Copp) and members for other parts of the Maritime provinces as not expressing the views of my constituents or the electors generally of the Maritime provinces. At that time I moved an amendment which, unfortunately, was ruled out of order, and I propose again to-day to move the amendment on the second reading of this bill, knowing as I do that the budget reductions are very detrimental to various industries in this Dominion, and that it would be to the welfare of the whole country that a consistently maintained protective policy be pursued. Without elaborating much more upon this question which has been discussed fairly well during the last few weeks, I beg to move:
That all the words after the word " that " be struck out and the following substituted therefor:
This House is of opinion that the welfare of Canada requires a consistently maintained protective policy.
The House divided on the amendment (Mr. Doucet) which was negatived on the following division.

Arthurs,	YEAS Messrs. Marler,
Black (Halifax),	Maybee,
Bowen,	Meighen,
Boys,	Porter,
Chaplin,	Ross (Kingston),
Church,	Ryckman,
Doucet,	Senn,
Drayton (Sir Henry),	Sheard,
Duncan,	Simpson,
Hanson,	Spence,
Harris,	Stansell,
Jones,	Stevens,
Ladner,	Stewart (Hamilton),
MacLaren,	Stewart (Leeds),
Maclean (York),	Sutherland,
McCrea,	Thompson,
McQuarrie,	White,
Manion,	Wilson.-36.
Archambault,	NAYS Messrs. Hoey,
Baldwin,	Hopkins,
Bancroft,	Hudson,
Beaubien,	Hughes,
Bel and,	Humphrey,
Benoit,	Hunt,
Binette,	Irvine,
Bird,	Jelliff,
Black (Huron),	Johnston,
Bouchard,	Kay,
Brethen,	Kelly,
Brown,	Kennedy (Edmonton),
Bureau,	Kennedy (Glengarry &
Cahill,	Stormont),
Caldwell,	Kennedy (Port Arthur &
Campbell,	Kenora),
Cannon,	King (Huron),
Carmichael,	King (Kootenay),
Carroll,	King, Mackenzie (York),
Carruthers,	Knox,
Casgrain,	Kyte,
Chisholm,	Lanctot,
Coote,	Lapierre,
Copp,	Lavigueur,
d'Anjou,	Leader,
Davies,	Logan,
Dechene,	Lovett,
Delisle,	Lovie,
Denis (St. Denis),	Lucas,
Desaulniers,	Macdonald (Pictou),
Descoteaux,	Mackinnon,
Deslauriers,	MacLean (Prince, P.E.I.),
Desrochers,	McBride,
Drummond,	McConica,
Elliott (Waterloo),	McDonald (Timiskaming),
Ethier,	McGiverin,
Evans,	Mclsaac,
Fafard,	McKay,
Fansher,	McMaster,
Forke,	McMurray,
Forrester,	McTaggart,
Fournier,	Marcil (Bonaventure),
Gardiner,	Marcile (Bagot),
Garland (Bow River),	Martell,
Gauvreau,	Michaud,
German,	Millar,
Gervais,	Milne,
Gordon,	Morrison,
Gould,	Morrissy,
Graham,	Motherwell,
Halbert,	Munro,
Hammell,	Neill,
Hatfield,	Papineau,
Healy,	Pelletier,

Customs Tariff
Prevost,	Speakman,
Putnam,	Spencer,
Rankin,	Steedsman,
Rinfret,	Stewart (Argenteuil),
Robb,	Stewart (Humboldt),
Roberge,	Stork,
Robichaud,	Thurston,
Robinson	Tobin,
Ross (Simcoe),	Vien,
St. Pere,	Wallace,
Sales,	Ward,
Savard,	Warner,
Seguin,	Woods,
Shaw,	W oodsworth.-135.
Sinclair (Queens, P.E.I.),	
	PAIRS
(The list of pairs is	furnished by the Chief Whips.
Ministerial.	Opposition.
Murphy,	Simpson,
Power,	Mewbum,
Cardin,	Baxter,
Low,	Preston,
Duff,	Dickie,
Gendron,	Garland,
Fielding,	Bristol,
Bourassa,	Clark,
Sinclair (Oxford),	McKillop.
Parent,	Guthrie,
Chevrier,	Charters,
Hodgins,	Tolmie,
Morin,	Hocken,
Denis (Joliette),	Anderson,
Ouimet,	Black,
Mercier,	LeSueur,
Fontaine,	Grimmer.


Mr. R. F. PRESTON (Lanark):: I was
paired with the hon. member for South Renfrew (Mr. Low), otherwise I would have /oted for the amendment.


Mr. C. H. DICKIE (Nanaimo):: I was
paired with the hon. member for Lunenburg (Mr. Duff), otherwise I would have voted for the amendment.


Mr. E. R. E. CHEVRIER (Ottawa):: I
was paired with the hon. member for Peel (Mr. Charters), othewise I would have voted against the amendment.


Mr. D. J. SINCLAIR (North Oxford):: I
was paired with the hon. member for West Elgin (Mr. McKillop), otherwise I would have voted against the amendment.


Mr. GAUVREAU:: I think there must be
an error in the vote, Mr. Speaker. The clerk gave the yeas as 36 and the nays as 114. Surely there must be more than 150 persons present.


Arthur Meighen: There are no doubt a
great many errors on the part of hon. gentlemen voting, but I do not think there has been any mistake in the count.


Hewitt Bostock: I cannot doubt the
accuracy of the count as made by the Clerk of the House. However, if hon. members insist, it shall be revised.


Charles Arthur Gauvreau: I think there must be
an error.


Hewitt Bostock: I am just informed that
the count is correct.


[Stage Direction]
Motion agreed to, bill read the second time, and the House went into committee thereon. Mr. Gordon in the chair.
On section 2-Ad valorem rate of duty.
Sir HENRY DRAYTON:: When the resolution was in committee of the 4 p.m. Whole certain questions were asked with reference to the duty on tea. The minister had not the information at the time but subsequently we got something like an estimate. How many appeals were there before the Customs Board at that time and what were the names of the appellants?


Mr. ROBB:: I understand there were some appeals. I could not tell my hon. friend how many.


Henry Lumley Drayton: Perhaps the
minister will write ,me a letter showing exactly What the amounts are and everything else.


James Alexander Robb: The amount was estimated
at about 847,000.


Henry Lumley Drayton: What was the amount in question on appeal, and who were the appellants?


James Alexander Robb: I will find out and let my
hon. friend know.


[Stage Direction]
Section agreed to.
On section 4-Schedule A amended.
Mr. GARLAND (Bow River):: Who constitute the present Customs Appeal Board?


James Alexander Robb: The chairman is the Commissioner of Customs, Mr. Farrow. The other members of the board are Mr. Breadner, Mr. Blair, Mr. Taylor and Mr. Wilson, all except Mr. Breadner, officials of the department.


[Stage Direction]
Section agreed to.
On the schedule to clause 4.
Henry Lumley Drayton: I assume these schedules strictly follow the resolutions already taken up?


James Alexander Robb: Yes, just as they were put
through.


Henry Lumley Drayton: In connection
with the discussion on these resolutions the statement was made-I think by the leader of the Progressive party (Mr. Forke), but I am not sure-that with reference to the paper
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James Alexander Robb: I do not recall the statement
that was made. I have no doubt that my hon. friend is correct in his reference to prices mentioned in the House in the course of a previous discussion.


Henry Lumley Drayton: I did not charge my hon. friend with anything.


James Alexander Robb: I know the hon. gentleman does not charge me with anything, but I just want to dear up one feature of it in view of certain statements now being made in the press. The only reference I made to the question was that I said I wanted to be fair to the manufacturers; that the manufacturers of Canada were not always opposed to reductions m the tariff; that a gentleman who I thought had authority to speak for the manufacturers, because he was at that time president of the Canadian Manufacturers' Association, had through his representatives made a request to the government to reduce the duty on linters of short fibres of cotton, raw

material going into the manufacture of blotting paper. It had been, represented to me that there were three firms interested, the Howard Smith Paper Mills, Rolland Brothers, and the Provincial Paper Mills. I am glad to have this opportunity of correcting that statement, because it so happened that the following Sunday-I sometimes read more than my Bible on Sunday-I was looking over a very nice little booklet issued monthly by the Howard Smith Paper Mills, advertising their paper, and they do manufacture good paper, and in that booklet they make the statement that they are the only manufacturers of blotting paper in Canada. So this concession we are making here now is made for the benefit of the Howard Smith Paper Mills, of which Mr. Howard Smith is the president.


Henry Lumley Drayton: My hon. friend is referring to a different matter entirely from what I was' referring to; what he has said has nothing to do with it at all. Perhaps my hon. friend's information could have gone a little further, and he could have given the same amount of justice to the Howard Smith Paper Company in connection with these prices. There is no question about it, a statement was made to the House in connection with that very vexed question of export prices, the argument being that the home consumer was being mulct as a result of the protective tariff, and we had wild poundings of desks when that statement was made. It was absolutely untrue, without any foundation in fact at all.
In regard to cotton exemptions, I also think I owe an apology to the manufacturers. My idea has always been, in connection with protective tariffs, that they have to be consistent, that there has not to be a special protection to any one class of producers, but you have got to go all along the line in order to have fairness, and in order to get a proper maximum employment. I was under the impression at that time that these things were being produced in Canada, and I gathered corroboration of that impression from the minister. I have learned since that none of these things were being manufactured in Canada, the particular things my hon. friend was then making free. So that all that he was doing-he was there not defending any principle of protection, he was not there hurting Canadian labour at all-was to remove still further from the tariff a revenue item; that is all. All that Mr. Howard Smith wanted was the removal of a revenue item, and I have to confess he was absolutely consistent in his principles of protection.

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James Alexander Robb: Regarding the question of
prices I would not wish to be unfair to the Canadian manufacturers of paper. I know nothing about the prices they charge in Canada or for export, but I do know that the publishers of Canadian magazines have lobbied the government, and have been very persistent in their requests that we should remove the duty from coated paper going into magazines. I said to them, why remove the duty; we manufacture paper in Canada? They replied: Yes, but strange to say we can buy this paper cheaper in the United States than in Canada. I did not give the reduction, although I am bound to say I think the magazine men made out a case for very careful consideration, and I propose to submit it to the Doard for inquiry during the summer.


Robert Forke: Mr. Chairman, I think perhaps I am the guilty member who made some of the statements to which the ex-Minister of Finance has referred. I am not in a position to judge the qualities of the different grades of paper that he has mentioned, and I have only this to say. My information came from large users of magazine paper, which is a different gTade of paper from the lower grades, and the statement was made to me at that time that the lower grades were sold on equal terms in Canada and the United States, but that on the higher grades of paper there was a difference in price. I may have been mistaken. I could give my authority if it was necessary to do so, but I think it is not in the public interest that I should do so. I made the statement in good faith, and I have some doubts yet as to the correctness of the statement of the ex-Minister of Finance. The publishers of magazines in this country seem to think they are discriminated against in the price of paper they use, but if it can be produced as cheaply in Canada, why should they wish to have it made duty free? There must be some reason for wanting the duty removed, and it must be that the paper is cheaper in the United States. I have my doubts as to whether I was wrong when I made the statement I did at that time.


Henry Lumley Drayton: I am afraid my hon. friend, with considerable dexterity, is beclouding the issue. He is forgetting it entirely. I am not complaining that he made the statement that paper could be bought cheaper in the United States than it could in Canada. I am complaining of the definite statement made that a Canadian firm in part, not entirely, but in part, enjoyed the benefit of a protective tariff in connection with the papers which they export, was selling
them at considerably lower prices in the United States than in Canada. That was the statement; it was to that effect. It had nothing whatever to do with prices in one market or the other. It had to do with a specific charge against a specific Canadian manufacturer, that he was holding up prices in the home market, when he could well afford to sell at a lower price in the other market. I have gone to the trouble of finding out just what papers he did sell in the foreign market and the prices, and I have this information sworn to. My hon. friend starts out by saying he does not know much about it himself, that he is just passing the information on believing it to be true. I am quite willing to accept his statement; if he did not believe it, he would not state it, of course. But he gets loaded up absolutely wrongly sometimes, and he was loaded up absolutely wrongly on this question. I am not imputing any personal motives to my hon. friend. My hon. friend will see that we gain nothing by leaving the issue and talking of prices of magazine paper. That is not the point. The statement was that this firm that manufactures a high grade paper, and which is also in the export business, exported that paper to the United States at prices considerably lower than what they sold it for in the Canadian market. Now, we know exactly what the export paper is, and exactly what the prices are.


Mr. MILNE:: Is that the only kind of
paper they export?


Henry Lumley Drayton: Hansard has
just sent for the statement, and it has gone out. As soon as it gets back I will let my hon. friend know.


Mr. ROSS (Kingston) :: It was while I was speaking that the leader of the Progressive party interrupted in regard to the price of paper. Since that time I have been endeavouring to find out where he got his information, and whether it was true. I cannot find any basis for his statements. I think at the time, he stated that he got his information from the Howard Smith people-


Robert Forke: No.


Arthur Edward Ross: And I made the
statement at the time that there were other grades of paper-[DOT]


Robert Forke: Would the hon. member
allow me to make an explanation. I was quoting from a statement the Howard Smith Company had made in advertising their bonds for sale. That is what I referred to.
Customs Tariff


Arthur Edward Ross: I do not remember the word "bond", but I asked for information, and my hon. friend made use of the Howard Smith name.


[Stage Direction]
Schedule agreed to.
On clause 5-Commencement of act.
Mr. GARDINER:: Who is responsible for
appointing the Tariff Appeal Board? Is it the Civil Service Commission or the government?


James Alexander Robb: It is the Minister of Customs. The board is composed of men of experience who have been in the department many years. It probably has not been changed for years.


Robert Gardiner: I understand they do
not all belong to the Department of Finance but that there are members of other departments on the board. Is that the case?


James Alexander Robb: They all belong to the Department of Customs excepting Mr. Breadner, who was a former employee of that departs ment and has been on the appeal board for many years. Mr. Breadner is now connected with the Finance department as Commissioner of Taxation.


Arthur Meighen: I understand that advantage has been taken to make some corrections of errors as to individual concerns that were made in the course of the debate leading to this bill. I want to refer to an incident which occurred when the hon. member for Springfield (Mr. Hoey) was speaking, and I do so more out of a desire to render justice to the concern in qustion than from any wish to speak in connection with this clause.
First of all, I think that hon. members should be careful before making representations as to an individual business because of the injury which might be done to that business itself and to those concerned in it, injury of a personal as well as of a financial character. This requisite has not been observed by hon. members with that strictness which they should have displayed. At the time the hon. member was speaking he brought in a letter which he had received from Mr. Pedlow-although he did not give that gentleman's name-who was a member of this House for the county of Renfrew until the last election. I thought it rather strange at the time that Mr. Pedlow should take this means of obtruding his opinions in parliament as to an industry, especially one located in a constituency to which he did not belong, and as to the ability of the men 	,
engaged in it. I see the hon. member (Mr. Hoey) rather protesting slightly by his attitude against my reference. I do not think the hon. gentleman would have read the letter if he had not had the permission of Mr. Pedlow to read it. Consequently I take it he adopted that means of placing his information here not only as to how businesses were carried on but as to the capacity of the men identified) with them. In the first place, the writer of the letter did not seem to have very much knowledge even of where the industry was. The letter referred to it as being in Almonte whereas, as we all know, it was in the town of Carleton Place, the Hawthorne Knitting Company. To intimate that this company was a loosely or poorly organized concern, employing machinery that should be on the scrap heap and consequently bound to fail no matter what its physical condition-well, that idea was so foreign to the truth that I know Mr. Pedlow would not have given utterance to the suggestion had he known even a semblance of the facts. I have it not only from members of the concern but from a gentleman who was identified with the organization of the industry, one who probably knows more about the various woollen mills of the country than any other single individual, that there was no better equipped mill in the Dominion producing	this class of goods than the
Hawthorne Knitting Mills. It excelled in that respect; in certain phases it had no equal. The concern was precisely of the opposite character from that Mr. Pedlow, apparently, believed it to be. As for the management, nothing could be more unjust, more cruelly unjust, than the intimation that it was loaded down with nepotism. There are none connected with it of the same family save the father and the son, the son being the active manager, and the salaries received were less than the same men had earned- in the case of the father only a mere fraction of what he had showed himself able to earn -in other industries. Speaking with a competitor of the opposite political faith, who brought the subject to my attention by way of protest against this practice in the Commons, this reckless practice, he stated that he knew of no man in Canada more competent in that industry than Mr. Thompson- that he would not desire a more competent man in his own service or as an associate, and that he was recognized as such throughout the whole woollen industry of Canada. How such attacks can be made from a place where there can be no defence on the part of those attacked I do not know.

Customs Tariff
Intimation also was given that the industry could well have carried on-I gathered that to be the intent of the argument-that the assets were much greater than the liabilities. Well, one would think that if the industry could have been carried on it would have been. Surely nobody believes that men are going to drop hundreds of thousands of dollars for the sake of the political effect alone. It was stated that men should be prevented from doing these things for political effect. You do not need to prevent them; unless they are in lunatic asylums they will prevent themselves. Men in business, as men on farms or anywhere else, are looking after themselves. If they do not pursue that course they will not be in business very long; they are not sacrificing large amounts of money that they do not have to sacrifice.
Now I want to refer to a phase of the subject somewhat different. It has always been regarded that the information given to the Department of Finance for the purposes of taxation is confidential, that, subject to the inspection and review of the department, it is not open to public inspection. I am not particularly standing for that practice, I am not opposing it; I only say, if it is the practice let it be the practice; do not let us have instances of leakage, and if there are such instances let the Minister of Finance trace where the leakage is. This information could have come from no other source. It is not information which is at all discreditable to the management, but the management has a right to the benefit of the usual practice. If the practice is to be changed, all right; but do not let us have these individual cases brought out in debate in this House, thrown out to the public to the injury of those concerned. Let all be treated alike; let the minister get up and say whether this class of information is to be public or whether it is not and if the minister does not know how this matter became public let him institute an inquiry and find out. This, I think, he owes to the people concerned. In this case there has been an apportionment of salaries. This has to be done even though the members of the firm do not draw those amounts; it has to be done for the purpose of estimating the income tax.
Now I conclude. The attack was most unjust and most unfair. It was based on information that should not have been accepted by an hon. member because that information came from one who did not live where the industry was, who had not consulted those concerned in it, and was even astray as to its location. Secondly, I say that the possibility of this class of information being published
in individual cases does not argue for the proper conduct of the Department of Finance. If the Department of Finance is going to hold itself irresponsible for these leakages then the best thing to do is to throw the lid off-let all the industries in this Dominion be treated in the same manner and do not make this pretence in the future of general concealment.


Mr. HOEY:: I do not know that I have
anything to add to the explanation I made when I submitted figures to prove the contention that I then had in mind, figures that have not been disputed until this moment. The failure of the Hawthorne mills was taken advantage of, in my judgment in a most despicable way, to broadcast the news, not only to publish it from ocean to ocean, but to have reprints from a certain newspaper sent to members of this House, and also put in the pay envelopes of the employees engaged in other industries. This was done with one object and one object only in mind, that was to prove that the reduction in the customs tariff on the importation of woollen goods, for which the present government was responsible, had led to these disastrous results. I felt it incumbent upon myself to ascertain and determine, if I oould, just what the actual facts were. I think if hon. members will look up the figures they will see that the industries to which I referred made considerable profit during the war period. I compared the scale of wages today in the woollen industry with the salary paid to the president of the United Grain Growers, which salary was made a political issue in the campaign of 1921. I said that whatever the size the Carleton Place mills might be they could hardly be in the same class with a company of that kind. I had a letter from the president of the Hawthorne Mills since the time I delivered my speech. In no instance does he challenge the accuracy of the figures. There were other figures which I had at my disposal which I might have submitted.


Arthur Meighen: Will the hon. gentleman be good enough to read his letter.


Robert Alexander Hoey: I have not the letter before
me. I will give my word of honour that he does not challenge a single figure.


Arthur Meighen: It is not the figures
that are in dispute particularly.


Robert Alexander Hoey: He does take exception to
the statement made in the letter I quoted, that his machinery was largely out of date and should be on the scrap heap. I looked
Customs Tariff

up the letter in question, and I find the statement in that regard is a very moderate one. The writer of that letter states that in his judgment the machinery to some extent was out of date.


Mr. McMASTER:: That the machinery
was largely out of date and should be-


Robert Alexander Hoey: Should be on the scrap heap. I think the representatives of the woollen industry who have been carrying on this campaign for almost two years should be the last people in the Dominion of Canada to send abusive letters to members of parliament in an attempt to silence them. I think they are the last people in Canada who should cry out against legitimate criticism. If these people had been getting direct help through the agency of the customs tariff, and if that help in their judgment is inadequate it seems to me that all the figures should be submitted to the members of this House in an attempt to find out just what the actual facts are. The right hon. leader of the opposition (Mr. Meighen), by inference, at least, left the impression on my mind that certain statements were made on the floor of the House that members were not anxious, or perhaps not willing, to make outside. I say that every statement I made in the course of the debate I am willing to make on any platform, anywhere, at any time in this country. When I began the investigation I approached the Acting Minister of Finance (Mr. Robb) in a straightforward legitimate way, and he, in an equally straightforward manner, informed me that information at the disposal of the Finance department was not available to members of this House; and on his suggestion I withdrew the demand for a return that I had placed on the order paper. Being denied access to the information in that way, I felt it my duty to obtain it from other sources. I want to say that most of the information contained in the letter, if not all of it, was obtained from men who are now or were formerly connected with this company.


Arthur Meighen: Will the hon. member
say that the information as to salaries and dividends quoted at page 2084 of his speech was obtained from men who had been or are members of the company? If so, will he give us the names?


Robert Alexander Hoey: I do not feel it incumbent to give the names of the men from whom I obtained the information; but I want to repeat that the information I quoted during the course of the debate was given to me on

the distinct understanding that it had come from reliable sources, which I knew to be reliable, and with the information that it had been obtained from men who were at the present moment or had been formerly connected with these companies. That mill was not the only one to which I referred.


Arthur Meighen: I referred to that mill. It appears from my hon. friend's statements that he did not get it from men who were or had been members of the company, but from someone else who assured him that they had got it from men who were or had been members of the company. I suppose if he got it from an official of the Finance department, that would be true all right. He had got it from the company or from someone who had been connected with the company. My information is that there is no source whatever from which it could come, save the Finance department. All I say is that if it be true I suggest my belief that it did come directly or indirectly from the Finance department. As to the minister's statement that I intimated he would not say it was outside, I did not intimate that.


James Alexander Robb: Not the minister.


Arthur Meighen: I mean the member; but to make attacks here where those interested have no way of defending themselves is not right. It is all right to attack a member in this House, who is here to defend himself, but to make attacks on men outside the House is not fair, unless it is a matter of distinct public concern, and unless an opportunity is given for defence on their behalf.


Robert Alexander Hoey: It was not a personal attack.


Arthur Meighen: An attack on the capacity of a business man?


Robert Alexander Hoey: In what sense did I attack the capacity of a business man?


Arthur Meighen: I think if my hon. friend will read his speech he will see that there is an attack in what he read.


Robert Alexander Hoey: The right hon. leader of the opposition will have some difficulty in discovering a personal attack.


Arthur Meighen: My hon. friend will find that the matter was brought up by myself at the time he spoke, and I stated that I had never before heard the capacity of the man attacked-


Robert Alexander Hoey: Read the personal attack.


Arthur Meighen: It is contained in the last paragraph of the letter which he read, where I find the following:

Customs Tariff
You will no doubt hear a great deal during the budget debate about the failure of the woollen mill at Almonte. Well. my own opinion is that a tariff as high as the Rocky mountains all around Canada would not have saved this concern from collapse. There were many reasons for this unfortunate condition. and believe me the tariff had absolutely nothing to do with the case. The overhead expenses were, I am told on what I believe to be good authority, altogether out of proportion to the amount of business done.
Those conditions do not obtain under a competent management.


Robert Alexander Hoey: Oh, yes.


Arthur Meighen: The letter continues:
Too many relatives were attached to the staff at' high salaries. Add to this their attempt to sell direct to the retailer, which they found very expensive, and not satisfied with selling to the retailer, they even went to the consumer. Add to these, machinery that should to a very large extent be on the scrap heap, and you have a condition under which no mill could operate successfully no matter where situated or under the very highest tariff protection.
If that is not an attack on the company or on the business capacity of the management, I would not know how to make one.


Robert Alexander Hoey: If the statements are substantially time, it is a reasonable criticism, and these statements have not been denied.


Arthur Meighen: The hon. member is
sidestepping in order to appeal to some hon. gentlemen behind him. What I am discussing is that this is an attack on the capacity of the men managing the mill. The hon. member a moment ago said that it was not. Now, I say that the hon. member should be absolutely sure of his ground before he does that, because those representing the mill are not present to speak in their own defence.


Robert Alexander Hoey: If the statements contained
therein are substantially true, the criticism is a reasonable one.


Arthur Meighen: Very good, but that is
another point. The question is this:	First
of all the hon. member did not know whether they were true. As a matter of fact, they were not true. What I said was that the hon. member made an attack on the capacity of business men, on the way they ran their business, and he did it in this House where those men could not defend themselves, and without notice so that no one could appear to speak on their behalf. That is what I say is unfair. He says:	If it is true, it is
all right. I have stated to the hon. member that the facts are in the letter which he does not read. While I know he did not have notice of this, he ought to read that letter and he should have been here with the letter
to read it, because it refers to things contradicting definite parts of his speech. He should have stated in this House that he had received the letter and he should have read the contents of it. Instead of stating that he has been abused by the management, let him read the letter to the House, so that hon. members may know what is contained in the letter and whether there is unjust abuse or not. The hon. member, in the course of his speech, endeavoured to point out that the tariff had nothing to do with the matter, and that it was very unfair, and as he said, despicable, to connect the failure of this mill with the legislation promoted by the government to the detriment of those interested in the woollen industry. What is unfair or despicable about that? Are the people of Canada not entitled to know the effect of the policy Canada is pursuing?


Robert Alexander Hoey: Exactly-unfair and despicable to attribute the condition in which the mill found itself to the negligible reductions that had taken place under this administration.


Arthur Meighen: I think the management ought to know, and if that was their belief, they had a perfect right to say so.


Robert Alexander Hoey: They have a right to express their belief.


Arthur Meighen: Have they not a right
to circulate their belief?


Robert Alexander Hoey: I have hesitation in saying
that they should circularise members with propaganda.


Arthur Meighen: We want to know these things. We can believe them or not, as we like.


Robert Alexander Hoey: We should hear both sides.


Arthur Meighen: The hon. member is
very talkative, but he is not saying very much. To say that it is despicable-


An hon. MEMBER:: Shame.


Arthur Meighen: What is the matter with the hon. member? Is he covered with shame? I do not see why he should be. To say that it is despicable for a party to be circularised with a belief,' with the reasons therefore of the party most concerned-surely the absurdity of that appeals to the hon. member at once. We do not need to accept all that is sent to us. We can examine and find out; but do not attack as despicable the mere fact that they are sent.
Customs Tariff


Robert Alexander Hoey: Will the leader of the opposition not admit that these representations were put into the pay envelopes which were handed to people who had not an opportunity, or the facts at their disposal, to enable them to determine whether the tariff was respon-ponsible for this condition or not?


Arthur Meighen: Very good.


Some hon. MEMBERS:: Hear, hear.


Arthur Meighen: That seems to settle
the matter with some hon. members. How utterly ridiculous that talk is! Is the hon. member going to suggest that those to whom he sends his speeches are in any better position to know the facts? Not the slightest. I do not know any people in a better position than those engaged in the industry.


Robert Alexander Hoey: If they get both sides of the question.


Arthur Meighen: Let the hon. member
send his.


Robert Alexander Hoey: That is what I did.


Arthur Meighen: Let him do it.


Robert Alexander Hoey: What is the row?


Arthur Meighen: The hon. member may
think he is smart, but he is trying all the time to sidestep the point. The point is this: Their conduct was perfectly honest in sending forth the fact of the failure and the belief of the management as to the causes of the failure. If the hon. member wants to send his belief, let him send it, but based on facts he not only believes but has a right to believe. That is all I ask.


Robert Alexander Hoey: Mr. Chairman-


Arthur Meighen: The hon. member seems determined on one thing, and that is that I shall not have an opportunity to utter a sentence without an interruption from himself. He is exceedingly restive. It is he who is responsible for .the character of the acrimony that has arisen in- this discussion; if he had let me proceed, there would have been no need of it. In the course of his address, the hon. member drew attention to the fact that other mills were continuing to do business. I referred to the matter in the speech I made following his. I wish to say now only that I believe those mills were making a class of goods used here that did not come into competition with European importations. That has been confirmed by direct inquiry, and I think he would have had it confirmed if he had read the letter.


Robert Alexander Hoey: It is contained in the letter
I quoted.


Arthur Meighen: That affects the argument which the hon. member sought to deduce, an argument which he was at perfect liberty to deduce but I think it very much modifies the force of the argument. In the next place, the mill that failed 5 p.m. was approximately of the size of the whole three mills referred to together. This is something of importance too. We cannot get away from the fact that small reductions, even though trifling, if they come below the level at which a mill in Canada can succeed, even though they are one per cent, they may destroy the mill. If the duty had been high and a small reduction made, it might have no effect whatever; but if we are down already to the level at which no industry can succeed, then a reduction however small below that, means a collapse of the enterprise.


James Alexander Robb: I should like to repeat on
behalf of the Income branch of the Finance department what was said here a few evenings ago, that secrecy is the essence of the act. I think all of us who were in parliament when the act was first introduced insisted on that. I confess that I was very much disturbed when I received a letter from this company intimating that the information must have come out from the Income branch of the department, but I am somewhat relieved to-day bv the statement of the hon. member for Springfield (Mr. Hoey) that he received that information from former employees of this mill.


Arthur Meighen: May I correct the hon.
minister? He does not say that. He says that he got it from others who got it from them, and that would be quite consistent with his getting it from the Finance department.


James Alexander Robb: I was proceeding to say that
already we had started out to try to determine if there is any leak in the department. The regular officials of the department are under obligation not to reveal anything that comes to the department by way of returns, and I have requested the taxation commissioner to confer with me as to the advisability of placing all the employees on oath, because we want to carry out the act fairly. But I serve notice now to all employees of the Income branch of the department here and throughout the Dominion of Canada that any person who, while the act is in its present form, reveals information that comes to him. does so at the risk of losing his position.

Customs Tariff


Robert Alexander Hoey: Will the Acting Minister of
Finance answer me this question? Has he recently seen the amendment to the income tax law in the United States which gives publicity to all returns whether they be of individuals or of corporations?


James Alexander Robb: That is a different matter.
We are acting under the law of this country, and when parliament decides to alter the act, we will administer it as changed, but at present we are administering the act as we find it.


Richard Franklin Preston: Coming as I do from
t.he great town of Carleton Place, where this Hawthorne mill is situated and to which I referred in my address to this House a short lime ago, I stated then what were the facts and I now reiterate them as facts. I do not say all the statements made by the hon. member (Mr. Hoey), but a large portion of these statements are not in accord with the facts at all. In the first place, he knows nothing about the mill. He never saw it.


Robert Alexander Hoey: Does the hon. gentleman
contend that I have never visited Carleton Place and seen the mill?


Richard Franklin Preston: If the hon. member did
so, he would have more knowledge about the mill than he has displayed in this House. Otherwise he is twisting and turning the facts to suit himself.


The CHAIRMAN:: Order.


Richard Franklin Preston: I do not think it becomes any hon. gentleman, even though he may be opposed to the National Policy or any other policy of that nature, to go out of his way to vilify a company which is trying to carry on business and which as a matter of fact has operated successfully for a number of years. I stated that this was a four-storey mill; the hon. gentleman dismisses it with the designation of a "two by four" affair; and as regards its machinery he says it is only fit to be scrapped, or words to that effect. Now, any one who will take the trouble to examine the mill will find that it has as good machinery as money can purchase. There may be some machinery in it that is not exactly new, but it is as good as new. So that when the hon. gentleman gets up and makes the wild statements to which we .rave listened in this House, I can only say that he is very wide of the mark and entirely away from the facts. No one can understand why this particular mill should be singled out for special attack. It is not the only mill in that county which has closed its doors by
reason of the change the government has made in the tariff, and why it should be made the subject of attack I cannot understand. What is the reason for singling out the Hawthorne mill? What have these people ever done to the hon. gentleman that he should) attack them? And letters have been written by a member of this House to prominent men in Carleton Place in reference to the mill, presumably with a view to finding out something that would materially refute the statements I have made concerning it.
I think that any hon. gentleman is taking a very grave position when he makes statements without knowing exactly on what ground he is standing. I would ask my hon. friend where he got his information, and whether he thinks he is fair either to himself or to the House in getting up and making allegations without disclosing his authority.
I will now give him a chance to answer.


Robert Alexander Hoey: I have nothing to add to
what I have said; I have already intimated the sources from which I got my information.


Henry Lumley Drayton: No.


Richard Franklin Preston: That is not an answer;
the hon. member is wide of the mark and is simply sidestepping the issue. He certainly is not fair either to himself or to those against whom he has made these statements if he refuses to tell us where he got his information, because it is absolutely necessary that we should know on what authority he speaks. We are going to find out, and the hon. member might as well tell us now. I will give him another chance.


Robert Alexander Hoey: This is merely a camouflaged attempt to discredit figures that cannot be discredited; it is an attempt to show that they come from some mysterious source. But it is significant that the figures I have quoted have not been challenged, nor has the truth of them been disputed, by a single member who has taken the floor this afternoon.


Richard Franklin Preston: The hon. member still
refuses to tell us where he got his figures. He made another statement too; he said that there were a large number of relatives employed in the mill. As a matter of fact there are just two, father and son. That is not a very large number, surely; and is there anything wrong about it?


Mr. BUREAU:: If that is the whole family it is enough.


Richard Franklin Preston: The father and son certainly run the mill, and it is no one's business.
Customs Tariff


Mr. McBRIDE:: I want to ask the hon.
member a question.


Richard Franklin Preston: AM these charges that
have been made in this matter are pure hearsay. If the hon. member has been speaking on hearsay why does he not say so? I repeat, he is not fair to himself in refusing to give his authority for the statements he has made.


Thomas George McBride: I want to ask the hon.
gentleman this question: Will he suggest that the Canadian people are not fit to compete with the people on the other side of the line provided they have the same sort of machinery?


Richard Franklin Preston: If I hadl the same ideas as the hon. gentleman has in regard to these things I would not live in Canada at all. Every one knows that the Canadian people are competent and are quite able to take their own part in any business; but the government places on the statute book an act which will enable foreign goods to come in under conditions disadvantageous to the people of Canada and that certainly is not playing fair with the Canadian business people. I think my hon. friend will agree with me.


Thomas George McBride: I do not.


Richard Franklin Preston: Of course not. I think
my hon. friend is as good a Canadian as myself and is just as anxious to see Canada prosperous; I have no doubt he wants to see all the industries, not only in Carleton Place but throughout the country, grow and succeed.


Thomas George McBride: The hon. gentleman says that I am a good Canadian like himself, but I say if I could not compete with any American or with anybody else in any other country I would not call myself a good Canadian.


Mr. BROWN:: In regard to this particular mill at Carleton Place, I want to ask the hon. gentleman whether it is not a fact that recently a very large addition has been 5 p.m. made to it. I admit that the description two by four is not fitting, for I have seen the mill. But is it not a fact, I ask, that a very large addition has been made to the mill in very recent times and which practically speaking has not been operated at all? I believe that to be the fact.


Richard Franklin Preston: No, sir.


John Livingstone Brown: There is no testimony I can offer which I can substantiate.


Richard Franklin Preston: What my hon. friend
implies in his question is not true.


John Livingstone Brown: Is it not true that a large addition has been made to the mill?


Richard Franklin Preston: There was, several years ago.


John Livingstone Brown: How long ago?


Richard Franklin Preston: Four or five years ago.


John Livingstone Brown: That is the point.


Richard Franklin Preston: And every part of it has been operated.


John Livingstone Brown: I may be wrong on that
point, but the undisputed fact is that a very expensive addition has been made to the mill within quite recent times. Now, I admit that hearsay evidence is not of any value in a court of law; nevertheless it is of considerable value to the people of a country when they come to form opinions concerning matters in general. I am informed-I admit at once that it is hearsay evidence-that this very large addition was made to a mill by a company that certainly made large profits during the war; and that addition was made when prices and labour were high. The contract was let and I understand that the contractor brought his material, even down to the very sand, from Hamilton. That may be right or it may be wrong, I do not know; at any rate the statement was made to me and the truth of it can be verified. I was informed that even the sand was brought from Hamilton. If these things are true-and I want to say again that I am not saying that they are or are not true-then is it right to expect the people of Canada to support the putting up of buildings in that way in connection with which such a tremendous overhead is undertaken? I am disposed to believe that the statement is true, not only in regard to that particular mill but concerning other mills as well, that they are to-day carrying, in the way of salaries and equipment, an overhead expense that cannot be justified. I agree that it is a tragedy that this particular mill at Carleton Place should stand idle. I saw it the other day as I rowed past it on the river, and it is certainly a splendid institution. But who is to blame for the position in which it finds itself?


Mr. STEVENS:: The hon. member said a moment ago he believed these statements were true. Does he really believe that the builders of that mill brought sand from Hamilton for use in the construction? Does he honestly believe that?

Customs Tariff


John Livingstone Brown: I say I am so informed.


Henry Herbert Stevens: But, leaving aside hearsay evidence does my hon. friend's intelligence convince him that that is true?


John Livingstone Brown: I am simply so informed,
and the man who informed me is a credible man. And if it is not so it would be quite in order for some person to contradict it.


Richard Franklin Preston: I will contradict it now and say it is not so. The hon. member said also that he saw it the other day travelling through on the train.


John Livingstone Brown: I did not say anything of the sort.


Richard Franklin Preston: Was he on the river?


John Livingstone Brown: I rowed by it on the river. It is a splendid mill and it is a tragedy that a mill of that kind should not be operated today in Canada. I know something of the quality of the goods that the mills in that district are capable of making. But if this tremendous overhead is to be carried by them the load upon the people of Canada will be such as they cannot bear. Now, we might have some investigation made into some of these rumours that are current, and I for one would be only too glad to retract any statement I have made in regard to the matter if it is found to be not in harmony with the facts. I am also informed that the architect got a very large price for his work in connection with that addition to the mill. Undoubtedly the mill is a splendid one, but it was constructed at a price that the people should not be expected to carry.


Arthur Meighen: I do not think the hon. member thought very deeply about the subject before he spoke. I am not finding fault with his bringing a rumour in at this time, although I do not think it is good practice in this House, particularly when it is a rumour that men were acting like insane people. What in the world would the management have to gain by paying too much for its sand? Does the hon. member really think that men are in business to make as big fools of themselves as possible?


Andrew Ross McMaster: Sometimes you would judge so, from the way some things are run.


Arthur Meighen: Sometimes the hon. member for Brome (Mr. McMaster) would judge so, and it is just because he so judges that he is nearly always wrong. His theories are based upon foolish assumptions of that sort; that is the trouble with him. But suppose these people did make a mistake; suppose they did not know there was sand outside the door and
brought it from Hamilton, and that that added ten per cent to the cost of the mills,- what on earth has that to do with the failure of the mill? Why, if the mill was built right we will presume it would earn five per cent-


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: 
John Livingstone Brown: The point seems to be that the addition should not have been made at that time. I think that could be substantiated.


Arthur Meighen: That is another point.
We are at the sand just now. Sometimes mistakes are made in building. Certainly the mill should never have been built had it been known that this government would be in power; that is quite true. The point I am getting at is this: If all the hon. member's rumours were correct it would mean a small addition to the price, made by foolish men. Even if it meant an addition of one hundred per cent it would not in the slightest degree account for the failure, because as long as they could make one per cent and earn their own salaries they would keep it going. All they would have to do then would be to make half the ordinary percentage that they expected in the first place. The hon. member will see that these considerations have nothing to do with the matter of failure. The failure of the mill means that the capital is gone. The mill would be continued if the capital was a little better than gone-that is unless it could be presumed that the management was financially mad or only after some political point.


Donald MacBeth Kennedy: What is the difference between freezing out, say, an industry of that kind if they have shown bad judgment in business-in expanding after the war, for example-and freezing out hundreds of thousands of farmers in the West who have paid too much for their land?


Arthur Meighen: That is another point
altogether. Certainly any management has to pay the penalty of its misjudgment, in any business in the world. If they paid too much for sand it would mean they would get less on their capital investment. But all the sand you can imagine, all the error of judgment you can imagine, would never account for the mill closing, because as long as they make anything on the capital investment the operations will continue rather than
Customs Tariff

collapse. If they were here asking for a slightly higher interest on their money perhaps there would be some argument, but they have collapsed and lost capital. And they are only one of a great many all over the country. Do not let us think that there is just one mill fallen, in Carleton Place. Why, right there there is an owner of three mills who has had to close two of them, and I would like hon. members to stand before him and say that he had to do it because of bad management; he has been in business twenty, thirty, or forty years. I am informed that the other one will have to close within a few weeks.


Mr. BEAUBIEN:: Would not the lack of
purchasing power have something to do with it?


Arthur Meighen: No. Purchasing power
has increased; at least, purchases are increasing, but they are purchasing British goods. Increase of purchasing power does not matter a fig if it goes to another country; it does not help this country in the slightest. Why, importations have multiplied twofold in many lines, in some cases fourfold. However, that is the main issue. I have no desire to pursue it to the extent of rehashing the debate.
I want to refer to just one other point. I do not propose to criticise the salary of anybody. I will get as big a salary as I can when I go into business life or any life, and I have no fault to find with anybody for earning all he can. But there is a very great difference between the turnover of a business which is merely buying and selling and that of a business which is manufacturing or producing. For instance, if in the Grain Growers' Grain business-again I repeat, I am not criticising salary at all and never have-if the grain were produced by the industry that industry would be infinitely bigger than it is to-day when the product is merely bought and sold. In a word, the quality of management required for a concern that produces its goods from the raw and brings them to a completed state and sells, proportionate to the turnover, is, of course, wholly different from that of a concern which is engaged only in the buying and selling. The turnover is not the measure of the importance or difficulty of the managing of a business.


Robert Alexander Hoey: It is an indication.


Arthur Meighen: It is only one of many indications and may be wholly offset by another consideration which I have tried to put before the committee to-day.
fMr. Meighen.l


Mr. HALBERT:: Why would one woollen
mill be compelled to close down while other woollen mills in the same province increase their output? I have a letter in my desk from Alex Horne, president of the woollen mills at Lindsay, and that is his position.


Arthur Meighen: What does that mill
make?


Robert Henry Halbert: Woollen goods.


Arthur Meighen: What kind?


Robert Henry Halbert: All kinds.


Arthur Meighen: Oh, no.


Robert Henry Halbert: It is woollen goods,
anyway. It is the difference in management that counts. Are the people of this country to be penalized because one manufacturer is guilty of bad management?


Arthur Meighen: In this case it is not
a question of management at all. Here is an illustration of the truth of the old adage: A little learning is a dangerous thing;
Drink deep, or taste not the Pierian spring.


Robert Henry Halbert: That is small politics for the leader of a once great party. I would point out to my right hon. friend that while the farmers may not have had a chance to get the education that some others have, at the same time they have a little judgment.


Arthur Meighen: I am not referring to
education. I am referring to the hon. member's not having gone deeply into the question. The hon. member knows that that is what I meant.


Robert Henry Halbert: I have it from the
president of the woollen mills.


Arthur Meighen: Very good, but he does not know the special circumstances, to the extent that he can be just in the discussion himself. I do not know them either, but I know there is no mill in Canada making all kinds of woollens. Each is making its specialty. Some are making woollens that are not imported, that are of a quality peculiar to this country; consequently they are not affected by the tariff. But if every one, or even another, goes into that line, the industry cannot live. The market is very limited; those who are fortunate enough to be in that line get on, but even those I am told, will in some cases have to close because there is not a market for their goods. It all depends on the industry, on the particular line of industry, as on other circumstances, and in nearly every case the result is effected by independent management.

Customs Tariff


Arthur Edward Ross: Speaking on another occasion in regard to newsprint, I quoted a letter from a Canadian newspaper in which reference was made to the closing out of newspapers in Canada. I was interrupted at that time by the leader of the Progressive party asking me if I did not know that paper was being sold cheaper in the United States than in Canada. I was speaking at that time only of newsprint, and when he gave the information he did, I accepted it and I believe the House did, that he got it from the Howard Smith Paper Company.


Robert Forke: I ask the hon. gentleman for his authority for that statement. Quote Hansard, if you please.


Arthur Edward Ross: Mr. Chairman, that was exactly what I was coming to. I made the statement a few moments ago that bonds were not referred to by my hon. friend when he made that interruption, and I want to read now from Hansard what he said:


Robert Forke: I may be wrong; I want information;
but I have been informed that fine paper was being sold in Canada for, I think_ seven cents per pound, and the same paper was being sold to American users of that class of paper for five cents per pound, irrespective of the sales tax altogether. I may be wrong in that information. I have no hesitation in giving names, and the firm that I refer to was the Howard .Smith Paper Company.
There was no mention there of bonds or anything like it.


Robert Forke: Will the hon. member allow
me?


George Newcombe Gordon: Order. The hon. member will have his opportunity later.


Robert Forke: I did not say the Howard Smith Company gave me that information.


Henry Lumley Drayton: You said they
were making the sales.


Robert Forke: I made no suggestion that they gave me the information, and that is what the hon. member for Kingston is trying to prove.


Arthur Edward Ross: It is just a case of a member being interrupted when he is taking up a subject, and an assertion being interjected, and then later on an attempt is made to creep behind it. Now that letter was referring to newsprint only. It was a letter sent to me by the manager of a good Liberal paper in the province of Ontario, in the city of Kingston. I have read the statement that was made by the hon. member. It starts out with the information that it came from the Howard Smith Company, and 177



REVISED

[Stage Direction]
there is nothing there with regard to bonds or anything else. Why I take this up is because since that statement was made, I have spent a good deal of time in an effort to find out the facts, and these same people wrote me and other papers, and there was no confirmation of the statement made by the hon. member in any way whatever, that Canadian newspapers were at a disadvantage, and that is all I was trying to establish when I was interrupted by the hon. member. There it is on page 1792 of Hansard, where he gives the information as coming from Howard Smith.
Henry Lumley Drayton: One hon. gentleman to my left a few moments ago asked me whether I had given all the information as to the total shipments of the Howard Smith Company. I replied that I had sent the letter to Hansard, that I was under that impression, but that I wanted to be absolutely sure and I would give the information when the letter was returned. I have it here. It says:
In reference to shipments of paper to the United States, I wish to advise you that we have only made shipments from the Crabtree division-
These shipments consist of "unfinished hanging paper, news coating paper and standard half-tone news," That is all that is said. The whole thing is given there. There is no doubt that this was the firm referred to, as my hon. friend from Kingston has pointed out. There is no doubt at all that the statement was made by the leader of the Progressive party that the Canadian manufacturers were selling paper more cheaply to the Americans than to their own Canadian users of paper. There is no question but what the firm of Howard Smith was referred to by the same hon. gentleman, and there is no question in the light of all facts but that he was entirely mistaken and misinformed.


Robert Forke: I should know by this time
that I was entirely mistaken and misinformed, because the hon. member has repeated it often enough. I am entirely at a loss to understand how the hon. member for .Kingston can infer from the statement I made that I referred to the Howard Smith Company as the source of my information. I will read the same paragraph again: I am quoting from Hansard of May 6:
I may be wrong; I want information; but I have been informed that fine paper was being sold in Canada for, I think, seven cents per pound, and the same paper was being sold to American users of that' class of paper for five cents per pound, irrespective of the sales tax altogether. I may be wrong in that information. I have no hesitation in giving names, and the firm that I refer to was the Howard Smith Paper Company.



EDITION

[Stage Direction]
Customs Tariff
[Stage Direction]
Meaning that that company sold the paper, not that they gave me the information. That is surely plain enough. That is the meaning I intended to convey. The hon. member for Kingston may have got a wrong impression from my remarks; I may not have stated it as plainly as I might have done, but the meaning I intended to convey was that that was the firm that sold the paper.
While I am on my feet, I want to say a few words in regard to the discussion that has taken place regarding certain institutions and manufacturers. I think perhaps the impression is being sought to be conveyed to the country that members in this part of the House have no sympathy with industry, that we are not well wishers of Canadian manufacturers. I want to place myself on record and I think I can speak for other members in this part of the House. I think there is no member of this House but wants to see Canadian industry prosper. I do not want the impression to go out to the country that we are here to attack and destroy Canadian industries. We are here to support and encourage every legitimate Canadian industry that is able to carry on under proper conditions. But suppose we protect Canadian industry and multiply factories until there is no consuming public to buy the products of those factories; where will this thing end? I would like to know where the thing is going to end. Take the woollen industry, for instance. Wool can be procured quite readily in this country, the industry has a very good measure of protection at the present time and there must be something wrong with these industries if they cannot carry on under proper conditions. What is the matter? We have no free trade at the present time; the woollen industry enjoys considerable protection. I went out to Trenton the other day, and I was very much interested in going through the factory there. I -was very friendly towards the factory; I wish to see it go ahead and prosper. It is a wool-combing factory, and I believe that that business will go on and prosper. It is a legitimate industry, under good management, and carried on under proper conditions, with splendid machinery, and I think it will be able to compete with any other industry of its kind in Canada or the United States. I just want to make plain, Mr. Chairman, that we have no hostility towards the Canadian manufacturers as such. We wish to see industries prosper under proper conditions.
Schedule agreed to.
Bill reported.

Hewitt Bostock: Before proceeding to the
next order of business I wish to state that a revision of the vote taken a few minutes ago on the second reading of Bill No. 127, to amend the Customs Tariff, 1907, reveals that there was a mistake in the first announcement. There were 36 yeas on the amendment as against 135 nays instead of 114 nays.
SPECIAL WAR REVENUE* ACT, 1915, AMENDMENT
Hon. J. A. ROBB (Acting Minister of Finance) moved the second reading of Bill No. 142, to Amend the Special War Revenue Act, 1915.	.


[Stage Direction]
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Gordon in the chair.
On section 1, sub-section 1-Tax on sales reduced.
Henry Lumley Drayton: It seems to me we asked for information on this. Has my hon. friend got that information now?


James Alexander Robb: On the arrears of sales tax?


Henry Lumley Drayton: Yes.


James Alexander Robb: I have a memorandum from
the Department of Customs intimating that it would be difficult to prepare a sales tax statement separately for each fiscal year, as the records of the department do not give the taxes separately for each period.


Henry Lumley Drayton: Does my hon.
friend really say that it is impossible to tell the amount of taxes due in any department of the government for a given fiscal year, does he seriously mean that?


James Alexander Robb: It can be given, of course, but after a great deal of labour. My hon. friend, I think, will understand that in the case of some arrears people come in and pay so much on account. The officers of the department have to go through their ledgers monthly to check these figures up. I have here a memorandum on the subject which I will read:
The sales tax collections since the imposition of the tax on the 19th May, 1920, amount to $300,079,059.33; by fiscal years, as follows:
1920- 21	 $ 38,128,063 94
1921-	22	
61.518,751	131922-	23	
91,247.189	371923-	24	
101,008,447	64April and	May 1924	
8,176.607	25Total	
$300,079,059	33
The arrears of sales tax on the 31st March, 1924, amount approximately, to $2,330,000, or slightly over seventy-seven one-hundredths of one per cent of the total collections.

Ways and Means-Sales Tax


Arthur Meighen: Do those figures go back to the collections since the inauguration of the tax?


James Alexander Robb: Yes.
As pointed out in answer to the question asked in the House of Commons by Sir Henry Drayton. 3.170 persons and firms are in arrears of sales tax, but of this number 704 are in arrears for three months and under. As previously stated, 431 of the persons and firms in arrears for sales taxes are retail bakers and confectioners who have refused to pay the sales taxes, pending the judgment of the Supreme Court of Canada in the case of Rex vs. Versailles Sweets. Judgment in this instance has been given in favour of the government in two courts, namely,-the Supreme Court of Ontario and the Appeal Court of Ontario. The case has been further appealed to the Supreme Court of Canada and is expected to come up for hearing some time next week.
I may say that this memorandum is dated May 30.
It may be explained that when the act came into force on 19th May, 1920, the sales tax collections were made by the officers of the old Inland Revenue department through inland revenue divisions, and this did not provide a proper organization. The Inland revenue divisions were consolidated with the customs port service on 1st April, 1921, but the new organization was not' perfected until April 1, 1922, when the work in connection with the arrears of sales tax was transferred from the administrative branch of the department to the inspection branch. This has resulted in a better organization, and at present the arrears are being dealt with daily as reported to the department by the inspection branch.
R. R. Farrow,
Commissioner.


Jacques Bureau: I should like to say, if I may be allowed, that there were people who did not understand the tax system at its inception and did not pay taxes, consequently there are arrears since the tax first came into force. In a great many cases there were people who did not understand the keeping of books, as a result of which some did not charge the tax properly, others did not charge it at all and a lot of confusion resulted. Now we have auditors and inspectors and their work consists in co-ordinating matters and seeing that the law is carried out in a proper manner. In the case of the gallonage tax the arrears amount to quite a considerable sum. That, of course, has reference to the tax on soft drinks. The people in the business claimed they could not collect the tax and if we forced them to pay it they would be put out of business. My hon. friend from Vancouver Centre (Mr. Stevens), for example, has had some pretty hard oases in his riding. The contention was made by these men that if we forced them to pay the tax they would have to go to the wall. Well, we had to accept their proposition to pay by instalments. We have established the fact, by having
auditors go through their 'books, that they could not pay the tax in its entirety, and that if we compelled them to do so we would only force them out of business. I confess that this is a most difficult-


Mr. CALDWELL:: Iniquitous.


Jacques Bureau: I will not say it is iniquitous, it is equitable, but it is very far reaching in its effect. If my hon. friend buys ten dollars worth of goods he has to pay 5 per cent; on a coat costing 1100 he must pay 5 per cent; on everything he buys which is subject to the sales tax he has to pay.


Robert Forke: Supposing a man had to buy nine or ten little coats?


Jacques Bureau: In that case he will get the glory but he will have to pay for it just as others have to do. Under the present system it will be possible to do this if my hon. friend wants it, but it will involve a terrible amount of work. It is being done gradually now. If we were to endeavour to get it out in a week or two we would require an extra staff, and my hon. friend knows that the employment of a staff of new men does not mean that we will get the same amount of work out of them. It is better to employ men who know about the work, as they co-ordinate better. Certain suits have been brought, and we have to suspend these suits at times, otherwise we would force the parties into litigation. I am willing to confess that we ought to take action under the law, whether these people went to the wall or not, but I thought it was better to consider the interests of the country first, the interests of the trade, and the commercial interests, and to be a little more lenient. They are making an effort and the taxes are coming in, but they are coming in slowly.


Thomas Wakem Caldwell: How does the minister decide when he should prosecute and when he should not-when he should put them into liquidation? Does the department audit their accounts and take stock of their standing?


Jacques Bureau: We have an auditor who looks after that. These firms produce their books, show their profits and what they have been doing for perhaps a couple of years previously, and Show what they are up against. If we see we cannot collect the whole amount, or if we see bringing an action would force them into liquidation or into bankruptcy, we give them time.

Ways and Means-Sales Tax


Thomas Wakem Caldwell: Does the auditor take into account the amount of water that may be in the stock, and the dividends that have been paid to the shareholders?


Jacques Bureau: So far, that has not been done. We have been taking into account the figures in the books, the volume of business done, margin of profit, and the expenses of these firms. If the investigation shows that the profits have been so small that they are not able to pay the tax, we bear with them and give them time to pay it.


Henry Lumley Drayton: If they have the money you make them pay, and if they have not the money they do not pay.


Jacques Bureau: If they have the money we force them to pay.


Henry Lumley Drayton: What is the
machinery in force to work that out at the present time?


Jacques Bureau: It is worked out in this way:	Those firms who ask for an extension
give us a copy of their books and a statement of their affairs. These are investigated by our auditors. They generally bring in a sworn statement of their business for the preceding year or perhaps two years, showing that the margin of profit and the amount of business they have done will not enable them to pay the claim which we make without going into bankruptcy.


Arthur Meighen: No one is more capable of answering the question of the hon. member for Carleton and Victoria (Mr. Caldwell) than the Minister of Customs. I think he ought to take the matter in hand just now and give us his opinion in regard to this problem of watered stock affecting the collection of taxes.


Thomas Wakem Caldwell: Before the minister replies, my point is this:	I believe it is possible
for a firm to milk their profits into dividends and stock which is not represented by money. Are we to understand that you forgive these people in regard to the payment of the sales tax, or do you simply give them time to pay by instalments? Is the tax cancelled if they make no profit? Are these cases that are referred to cases of people who did not know they had to pay the sales tax, and were not charging it to the customer?


Jacques Bureau: They were charging it improperly. Some of them thought that, because a man had the name of manufacturer, he would be in the same position with regard to the tax as the manufacturer. We have a tobacco manufacturer in the riding represented
[Mr. Buroaul
by my hon. friend who interpreted the word "manufacturer" in his own way, and simply charged the smaller instead of the larger tax. Mistakes have been made in that way. As far as the right hon. leader of the opposition's question about my views on watered stock is concerned, I answer that whenever dividends are paid we have no mercy, and we say, "You must pay the government". But in every case where we extend mercy and give time no dividends have been paid.


Henry Lumley Drayton: The minister
should go much further than that. He is treating the tax as if it were a profit tax, which it is not. It is a tax which is payable just as soon as the sales are made under the act, irrespective of profit altogther, and should be collected immediately.


Jacques Bureau: I admit that.


Henry Lumley Drayton: There is no
necessity for any of these questions about stock, or profits, or anything. The only reason for not collecting the tax is that the people did not properly understand it, but there is always that difficulty with a new law. I should have thought we had got rid of the difficulty pretty well by this time. The public should be educated now. I wanted to find out the current method of enforcing the prompt payment of current taxes which do not depend on accounting or profits, but merely on the sale.


Jacques Bureau: Our auditors go to these
people and make an investigation, and where the auditors think they can pay the tax they must do it; sometimes in special cases we make an exception. But I go further than my hon. friend. I say to the people who do not pay their tax, "You have no right to use government money to compete with the man who pays taxes;" and in some cases we have been very severe with them. I do not want to bring any calamity on the country by dealing too harshly with such people; I do not think we should. I do not intend to be hard on these people when they come forward and put up a good case. I think we ought to use a certain amount of discretion, in order to save the trade and industries of the country. Some of them have done wrong, and should be dealt with. I admit it is a wrong principle to be too lenient, and I put it to them in the way I have stated, that they cannot use money which should be turned over to the government to compete with the man who has paid his taxes to the government. I am trying to remedy the condition as best I can.

Ways and Means-Sales Tax


Henry Lumley Drayton: I want to see
what is being done to ensure prompt payment of taxes, jow that the people understand them. You say the auditors go round and investigate and send in their report; but surety you do not wait for that? Surely the people are invited to send in their return of the month's sales? .


Jacques Bureau: We have given instructions to the collectors at each port to see that the taxes are collected immediately and to report arrears. When these arrears are reported, they are handed over to the Department of Justice for collection.


Henry Lumley Drayton: What is the
initial procedure? What is the duty of the man who is in business at the end of each month?


Jacques Bureau: To pay the sales tax.


Henry Lumley Drayton: How is that being policed and looked after?


Jacques Bureau: By the auditors who go
round.


Henry Lumley Drayton: Has my hon.
friend1 any idea what percentage of voluntary statements are sent in?


Jacques Bureau: No, I have not.


Henry Lumley Drayton: What penalty
is provided if the monthly statement is not sent in?


Jacques Bureau: We have an officer who
looks after that, and we see that he is a good man. My hon. friend ought to know. He imposed the penalty.


Henry Lumley Drayton: No. The regulations have been changed half a dozen times since I was in charge of the department. I could not understand a lot of them, and the Minister of Finance (Mr. Fielding) could not understand them when they were read in the House.


Jacques Bureau: The words of the act are:
Liable to a penalty of not less than $50 and not exceeding $1,000.


Henry Lumley Drayton: In connection
with what offence?


Jacques Bureau: The section reads:
Neglect or refusal to pay any tax imposed by this act.


Henry Lumley Drayton: That is hardly
what I asked. Many regulations have been issued. I had quite a number of them and I was going to read them all. I read two, and the Acting Minister of Finance (Mr. Robb) could not tell me what they meant, so I
stopped. With a view of seeing how this is run and how it works out, I want to take the first initial step. I understand from the minister that at the end of each month, it is the duty of the merchant to make up the total of his sales, compute his sales tax and send his statement to the department with a cheque. Am I right?


Jacques Bureau: Yes. He has to send it
to the collector of the port.


Henry Lumley Drayton: Is there any
paticular form of return adopted by the department for that?


Jacques Bureau: Yes.


Henry Lumley Drayton: What is the
penalty for not sending the form in? That is the first procedure before the tax can be levied by the department?-the minister refers to a penalty for non-payment of a tax levied by his department.


Jacques Bureau: Yes.


Henry Lumley Drayton: It would be a tremendous amount of work to go around and inquire into everybody's business before taxes are levied, so that I assume, in the majority of cases, the minister's department levies the tax in accordance with the return made by the trader.


Jacques Bureau: I do not exactly understand what my hon. friend means. The merchant makes his return to the collector. The hon. member is speaking about the man in default.


Henry Lumley Drayton: I have not
reached there yet. I am speaking about the merchant. As I understand the minister, the merchant's duty is this: At the end of each month he makes up a statement of his total sales and sends that in on a form supplied to him by the department, I assume, to the collector, with a cheque for the percentage that would require to be paid on the volume of sales as disclosed by the return. Is that right?


Jacques Bureau: Yes.


Henry Lumley Drayton: What penalty
is there for not sending that return in at the end of the month?


Jacques Bureau: That is the penalty that is imposed upon those who refuse to pay the tax, because if a merchant does not send in his return, does not send in his cheque, he therefore refuses to pay the tax.


Henry Lumley Drayton: Can the minister have all the regulations with him to-morrow so that we may go through them?

Ways and Means-Sales Tax


Jacques Bureau: I shall have them bound tonight and the hon. member will have them in the morning.


James Alexander Robb: I shall be absent to-morrow. Can we put this through?


Henry Lumley Drayton: This is a long one and we cannot possibly put it through. We have not this information yet. There is just one thing I want to point out to the Minister of Customs, something that struck me as being very extraordinary if true-and I lLally think the information given by the Acting Minister of Finance (Mr. Robb) is incorrect-and that is that out of a total of 3,000 odd cases of arrears, some 50 per cent- I think he said more than 50 per cent-related to the earlier years, the years 1920 and 1921. I particularly want information upon that point, because, if that is true, it shows a tremendous neglect on the part of the department if things have been standing since 1920 in connection with a tax that ought to be paid concurrently. I am quite frank in saying that I think my hon. friend is wrong.


James Alexander Robb: I have the memoranda. I do not know on what they were based. I said this:
It is noted that the total number of firms in arrears is stated to be 3,170. A large number, probably 50 per cent, was arrears under the 1921 act-
Not the year 1921-the 1921 act, which only expired on the 31st December, 1923.


Henry Lumley Drayton: I think the 1921 act was changed by an act of 1922.


Jacques Bureau: Yes.


Henry Lumley Drayton: It would not be fair to look on the 1921 act as running down to 1923. It was changed in the first budget of the present Minister of Finance (Mr. Fielding).


Jacques Bureau: It is correct that the 1921 act was changed in 1922 and collected in 1923.


Henry Lumley Drayton: I think the minister will find that that return is incorrect. 'The thing is not as bad as it looks.


James Alexander Robb: It was in connection with taxes running up to the 31st December, 1923. I had forgotten that the act was changed in 1922.


Jacques Bureau: My hon. friend knows as well as I do that the minister does not carry all these things in his head. He could not keep them in his brief bag. My hon. friend knows that each branch has a chief who looks particularly after the work of his branch. I will take my hon. friend's words as they appear on Hansard, and if there is any mistake we will correct it. I do not believe any of us
ISir Henry Drayton.] [DOT]
in this House are infallible, and there may be a mistake or a misunderstanding of the question that was put. I want to give the correct information to the House. We have nothing to hide, and what we have done we have done to the best of our ability and we are proud of it.


Henry Lumley Drayton: I think we should advertise that effort of my hon. friend. What we ought to do is to move for a committee to get the information, because that is so much at variance with what every single man in business is saying about the matter.


Jacques Bureau: Every single man in business seems to be satisfied and there are fewer complaints to-day about the collection of taxes than there were ever before. As evidence of that, I will bring as witnesses every member of the staff of the Customs and Excise Department to prove that the commercial people are more satisfied to-day than they ever were before.


Henry Lumley Drayton: That would be a fine array.
Progress reported.
At six o'clock the House adjourned, without question being put, pursuant to rule.
Thursday, June 5, 1924