1925-04-27

YUKON QUARTZ MINING

[Stage Direction]
Mr. PIUS MICHAUD (Restigouche and Madawaska) presented the first report of the select standing committee on Mines, Minerals and Waterways, reporting with amendments Bill No. 6, to 'amend the Yukon Quartz Mining Act.

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved for leave to introduce Bill No. 44, to amend the Migratory Birds Convention Act.
He said: This bill makes only three minor amendments to the act. The first, an amendment to section 4, makes provision for regulations which can be made conformable to the regulations of the province with reference to a person having game in his possession in the closed season. The necessity for this has arisen on account of a case which was taken to the court of appeal in Manitoba, where the party having the game in his possession, which would have been legal under the provincial law, was prosecuted. We are amending the act so as to make it conform with the provincial law. Section 2, amending section 5, permits us to have the game and fishery officers of the Ontario government aet as game wardens for the enforcement of the Migratory Birds Con-

vention Act. The amendment to section 6 is for the purpose of bringing into effect the amendment to section 4. There is no radical change in the act, just minor amendments for the purpose of making the act uniform in practice with that of the province.
Motion agreed to and bill read the first time.

[Stage Direction]
On the Orders of the Day:
Hon. JAMES MURDOCK (Minister of Labour):: I arise to a question of privilege.
Hansard 'at page 2384 records the hon. member for Parry Sound (Mr. Arthurs) last night as having made certain statements referring to myself to which I think it only fair to make brief reference. The hon. gentleman was discussing the very much debated question of Canadians going to the United States and Canadians returning, and he had been reading a statement alleged to have been made by Mr. MaicNeil of the Great War Veterans. On page 2385 of Hansard he proceeds to say:
In this connection I should like to remark that the Minister of Labour stated that many of these people are returning to Canada again and gave figures showing that in 1923, 43,432 returned and in 1924 the number was 43,316. He stated that these figures represented Canadians who had paid the $8 head tax and had obtained a refund on their return to Canada. I am quite sure that the minister, if he thinks the matter over in a sober manner and after due reflection, will not repeat that statement in public, because the figures as furnished by the American authorities of those who have actually returned and received a refund of head tax, during the five months beginning with April 1924 are respectively 265 , 215 , 259, 199 and 190. That is a vastly different story, because those figures constitute less than one-fiftieth of the number claimed by the Minister of Labour. I have other extracts on the subject, but I have no desire to take up time by reading them.
On February 9th, in this House, a considerable discussion along the same lines took place and that evening I sent a night lettergram as follows:
Ottawa, February 9th, 1925.


Mr. MEIGHEN:: I rise to a point of
order. The hon. minister is evidently about to adduce-in fact he is already in process of adducing-an argument which would be an integral part of a debate. At this point the Orders of the Day cannot be availed of for that purpose. It is clear, even from the quotation which the hon. member has made, that there could be no matter of personal privilege involved at all.


James Murdock: This is a question of
personal privilege. It is intimated that the statements I gave to the House were false.

Privilege-Mr. Murdoch
I propose, and I think it only consistent to show they were true.


Some hon. MEMBERS:: Order, order.


Mr. SPEAKER:: The hon. gentleman is
speaking to a point of order-


James Murdock: I am just going to give the original document received from the Secretary of Labour of the United States indicating whether my statements are false or true.


Hewitt Bostock: If it is a question, of privilege and affecting the honour of the hon. gentleman, he can only speak to that point and correct the statement made by the hon. member on the ground that he was misquoted or that he was practically described as a gentleman who did not speak the truth. If that is the point raised by the hon. gentleman it is certainly a question of privilege. The hon. gentleman should not however make a long speech. He should simply indicate how the statement made by the hon. member from Parry Sound (Mr. Arthurs) was not according to the facts and one affecting his honour.


Arthur Meighen: I want to make myself
clear on this point. What I contend is this: The mere fact that one member has disputed the correctness of another member's statement is not an aspersion on his honour at all.


James Murdock: There is more than that involved in this, as I will show before I get through.


Arthur Meighen: The hon. gentleman said
that that was precisely what was involved. It is not an aspersion on his honour, and is no foundation for a question of privilege.


Mr. ARTHURS:: I had no desire to impeach the hon. gentleman's honour. I was quoting from figures and statements made by a gentleman whose name I gave, and the fact that the hon. member's figures and my figures did not agree, so far as I can see, is no reflection either upon the minister or myself. This is a matter which constantly occurs in the House, and I do not see any reason why the hon. member should proceed to make a speech.


James Murdock: The hon. member said:
I am quite sure that the minister, if he thinks the matter over in a sober manner and after due reflection, will not repeat that statement in public.
I propose to repeat it.


Hewitt Bostock: It happens every day
that hon. members on one side will make statements that they consider true, and hon. members on the other side will controvert those statements when they consider they are
incorrect. This does not constitute a question of privilege unless the honour of an hon. gentleman is impugned. Impeaching the honour of an hon. member would give rise to a question of privilege; but in the present instance, from what I can gather, the hon. member from Parry 'Sound (Mr. Arthurs), had no intention at all to impugn the honour of the hon. gentleman, and I cannot detect a question of privilege.


James Murdock: I desire to conform to the wish of the House, but I claim that the hon. gentleman in his speech in substance called me a liar. That is exactly what it amounts to, and this is a question of personal privilege to show who is misrepresenting.


Hewitt Bostock: Order. If an hon. gentleman makes a statement denying what another gentleman has said, provided it is done in a gentlemanly way, it should not be considered as impugning his honour. I have been told on many occasions that I did not know what I was talking about, or that the statement I had made was not true. The other day an hon. gentleman said that a statement made by another hon. gentleman was false. I thought that was rather harsh, and I said that such statements should not be made in the House as between gentlemen. But, in the present instance, I do not see that the honour of the Minister of Labour has been impugned. Therefore I do not consider there is a question of privilege involved.


James Murdock: May I say another word?


Hewitt Bostock: Yes.


James Murdock: Is it not a question of
privilege for me to show the authority for my statements in order to show if they were false?


Mr. STEVENS:: Order. It is ruled upon.


James Murdock: Do I understand that I may proceed?


Hewitt Bostock: The hon. member may
speak. I want to hear what he has to say.


James Murdock: I placed certain figures-


Henry Herbert Stevens: I rise to a point of order.


Hewitt Bostock: The figures that are controverted in the present instance have already been put in a regular way upon Hansard by the Minister of Labour. The other figures were put upon Hansard last night by the hon. member for Parry Sound (Mr. Arthurs). These two conflicting statements about the
2414	COMMONS
The Budget-Mr. Stewart (Humboldt)
number of Canadians emigrating to or coming from the United States do not constitute the shadow of a question of honour as between two hon. gentlemen, and therefore, in my humble judgment, I rule that there is no question of privilege in that. The hon. gentleman is simply enlarging his rights to take part in the debate, by replying at this stage. As the hon. gentleman (Mr, Murdock) has already spoken once, he must await another opportunity to reply.


James Murdock: I did place certain
figures on Hansard, but I did not give the letters of transmissions with which those figures were received.


Henry Herbert Stevens: I rise to a point of order.


Hewitt Bostock: The ruling of the Chair must be obeyed. Of course, the hon. gentleman may appeal from my ruling.



PEACE RIVER RAILWAY OUTLET

[Stage Direction]
On the Orders of the Day:
Mr. D. M. KENNEDY (West Edmonton):: Does the Minister of Railways and Canals consider calling a conference regarding the Peace River railway transportation question within the next few days, or soon?


Henry Herbert Stevens: We are all very anxious to know.
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals):	My experience with
conferences is not such as to encourage me to have very many. The matter is not being lost sighjs of at all, and discussions are taking place, but I would not dignify them by the name of conferences.


Donald MacBeth Kennedy: Does that
mean "no" to the question? It is hardly an answer.


Mr. GRAHAM:: I am sorry that my hon. friend asks me so many questions about this. I must be allowed to select my own answers.



THE BUDGET


[Stage Direction]
The House resumed from Thursday, April 23, consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Sir Henry Drayton.
Mr. C. WALLACE STEWART (Humboldt):: Mr. Speaker, before this debate was ad-

journed last night or, perhaps, more accurately, early to-day, I had attempted to place candidly and frankly before the House certain reasons why I objected1 to the budget proposals this year. I had m'ade the. statement that it was because the fiscal and taxation policies reflected through those budget proposals were not in accord with any that I could support that I must oppose this budget. I had also made certain objections to the tariff commission that is proposed. I had also offered a suggestion as to an enlargement that might possibly be made of our annual financial statement that would make the financial condition of this country plainer to the average man. I had, in conclusion, last evening touched upon one of the taxation proposals or an amendment to a taxation proposal that is contained in the budget, namely, the enlargement of the application of the stamp tax on cheques to include certain papers which, prior to the present, have been exempted.
I had pointed out to the Acting Minister of Finance (Mr. Robb) in his absence-and I am glad to note to-day he is in his seat and I hope he will give some attention to the statements which I made last night- that it was not a matter of asking for something that was not already recognized in the act. The act recognizes that exemptions are to be allowed; it always has recognized that. I tried to point out to him that it was bringing an unfortunate injustice to bear upon certain primary producers if he insisted that this tax be made to cover particularly those tickets or papers which have been issued and used in securing payment for cream, in the western provinces. I trust the minister will give some attention to the arguments that have been adduced. I am quite certain that before this debate is concluded other members wTho are just as interested as I am in the dairy farmers of this country, will place before the minister, if not similar arguments, at least arguments just as valid and strong as those I have attempted to give.
Now, Sir, proceeding, I want to touch briefly upon t'he amendment that has been submitted to the budget proposals of the Acting Minister of Finance. I said last night that I had attempted to approach the consideration of the budget this year without undue partisan feeling, without any shackles of party affiliations to bind me, and that I had come to my conclusions by duly considering the budget proposals before us. I said that I had attempted to approach the amendment in the same way. After having considered the amendment in that way, it seems

The Budget-Mr. Stewart (Humboldt)'
to me that I can state my attitude towards it perhaps by likening it to certain theatrical scenery that is very commonly used at the present time on almost every stage in this country. We have often seen before us on the stage a beautiful piece of scenery; and without any lifting of the curtain, by a playing of lights from the back upon the screen, that beautiful picture entirely disappears and another view takes its place. It is all a matter of how and where the lights are manipulated; the curtain itself remains stationary, and the scene changes as varying lights are thrown upon the screen'. Now, so far as the amendment is concerned I must say that to a member in my position it bears some likeness to this ic'hanging scenery; I think there is a simile between the two. There are certain things in the amendment that appeal to me, but after all the lights of this debate have been played upon it for the length of time we have now discussed these proposals, I am bound to say that the original beauty of the picture it presented has disappeared. By means largely of the lights played upon it, not from directly opposite sides but by gentlemen behind the scenes, we see now in place of the flowers of lower taxation which we beheld before, huge and barren rocks in the form of additional tariff burdens. It is hardly necessary for me after making that comment to say that I am in no better position to support the amendment than to support the budget.
I want to turn now to two or three matters which I consider of urgent importance, and first of all I shall touch upon one which has been for some time, and certainly at the moment is paramount in the minds not only of hon. members of this House but of intelligent citizens throughout the country; I refer to our railways and the whole problem of transportation. I do not intend to go at any great length into this question but I have one concrete suggestion which I desire to bring to the attention of the House. To my mind the problem of finding some solution for the difficulties in regard to our National railways as well as of the whole question of railway transportation costs generally is a matter of primary importance and should receive the consideration of parliament before anything else. As we are all aware, our National railways are carrying on under the handicap of an immense debt; and in view of the overhead charges which they have to face, the present prospects give absolutely no hope of our being able to meet the situation by means of the earning power of the railways. A year ago when the report of
the committee considering nationally owned railways and shipping was presented to the House it was advocated-I myself advocated it in the debate-that the capitalization of the Canadian National Railways should be reduced. And that is a matter to which I wish to direct the attention of the House just now. Various proposals might be made for the reducing of this capitalization and I shall submit one or two. It has been suggested recently in this House, and there have been comments in the press to the same purpose, that the proper solution would be found in the nationalization of the great competing line of the National system, that is to say, the Canadian Pacific Railway, and the union of the two systems into one great whole. I am in accord with those who look to this proposal1 as something that will eventually materialize, but at the same time I want to consider just now the situation as it actually is; I want to consider what the question is that we have to deal with immediately. I would point out that even if we contemplated such an undertaking there would still be a necessity for re-valuing the Canadian National railways, and I would suggest reducing the capitalization of the Canadian National system at the present time by at least the current balance sheet deficit, which is a matter of some $344,000,000. That would then place the Canadian National Railways in the position of having equal assets and liabilities, at least in so far as the accounts and paper figures are concerned. We might go further than that, we might cancel the whole of that item termed "loans from the Dominion of Canada and interest thereon," amounting to over $598,000,000. Or we might go even further still; personally, I would go so far as to suggest the cancellation of that portion of the overhead which falls within the Dominion of Canada account. If hon. members will take the annual statement of the Canadian National Railways and turn to the balance sheet they will find items under the heading "Dominion of Canada account" totalling some $1,142,000,000. I would wipe that out. Perhaps some hon. gentlemen who have not given this matter as careful study as they might would think we were reducing the capitalization too low, but I would point out that this would then leave a balance of liabilities in connection with the Canadian National railways of $1,271,000,000, after having reduced the total by nearly half. It would place the railways in this advantageous position, that their assets would then exceed their liabilities by $803,000,000, and the capital investment remaining therein, in the way of
2416	COMMONS
The Budget-Mr. Stewart (Humboldt)
a bonded debt to the public, would be $913,913,000, which would be interest-bearing. That would be the actual Capitalization on which the system would still have to pay interest. Let me compare that with the capitalization of the Canadian Pacific Railway. According to a statement recently issued by that company, including their capital stock as part of the capitalization,, together with their debentures, mortgages and bonds, all of which bear interest, the total capitalization on which they are paying interest amounts to a little more than $670,000,000.


Mr. GOOD:: Does that include dividends on the stock, and additional interest on bonds?
* Mr. STEWART (Humboldt):	It includes
the capital Stock; that is the capital on which they pay dividends. Now, the earnings last year of the Canadian Pacific Railway were over $47,000,000, while the earnings during the same period of the Canadian National Railways were a little over $21,000,000. If the element of competition were eliminated, and we got rid of all duplication of service, and if the capitalization of the Canadian National Railways were reduced by the amount I have suggested, it will 'be seen that, even leaving out of consideration any advantages that might accrue to the railways as a result of being under one management and co-operating instead of working in competition with each other, the joint concern would then be in a position, by reason of their earning capacity as reflected in the statement recently placed before us, to pay on the total capitalization interest at the rate of 4.3 per cent. That, it is true, would not be sufficient to cover the total interest indebtedness and overhead charges which the railways have to meet at the present time. It is a fact that both the Canadian Pacific Railway and the Canadian National Railways have bonds bearing interest as low as 3 per cent; but unfortunately the Canadian National Railways in particular have a very considerable amount of bonded indebtedness at 6 and 7 per cent. So that a larger earning than they have at present would be necessary. It will be seen however that I have not taken into consideration the important element of improvement which would accrue from the amalgamation of the two systems. I am in no position to know what could be saved by deleting duplication or by the lack of competition, and I am quite certain that that would enter very largely into these figures-I would not even venture to estimate to what extent but I am certain that it would very largely affect these figures-and that the railways would then be in a position to pay

interest on all the indebtedness that would remain, and perhaps they would also be able to make a return to the treasury, if such were desired.
But before I leave the point I want to give this reason why the capitalizatio'n of the Canadian National Railways should be reduced. A great deal of money has been sunk in the Canadian National Railways which at present is not reflected in their earning power. There are causes for that which I do not propose to discuss, but the facts are that that money, having been spent, is now lost so far as its earning power is concerned, and the only way in which we can say who should pay the interest upon it is to trace where the money has gone. It is very difficult to tell where this money went to, particularly that invested in some of the government railways and in some of the Canadian Northern lines built a number of years ago. But at any rate it found its way into channels of trade, the labouring people secured some benefit at the time, and no doubt business also secured some benefit through this money being put in circulation, and those parts of our people secured at least as .much, if not more, benefit from the money thus expended than did the primary producers on the land, in the forests and in the mines, who by supplying the bulk of the freight for our railways are conferring a greater benefit than they can ever in future hope to obtain from the expenditure of that money. Therefore I submit, Sir, it is only right that as a nation we Should now and for all time take over the capitalization that we cannot realize upon and place it with our national debt, making the interest charges upon it a national charge, not to be placed against those who are attempting to produce and are supplying freight to our National railways. That is my reason for saying that this is the first step that should be taken, regardless of what other steps we may take afterwards.
Now, I want to touch upon one other matter that I consider to be urgently in need of attention in this House by way of legislation. I refer to long-term credits. I do not propose to enter into a long argument on this, I simply want to call the attention of the government to the report of their commissioner, Dr. Tory, and to a certain plan outlined in his report. I am well aware of the fact that long-term credits are not in very good standing in this country. I do not seriously criticize the government for having hesitated before embarking on any scheme; I think they have been well advised! to secure all the information possible

The Budget-Mr. Stewart (Humboldt)
on this matter. Our provincial governments have for varying reasons found that the schemes they have tried have not been wholly successful. But according to the report of Dr. Tory, and other evidence which I propose to submit, certain schemes of longterm credits have been successful. Dr. Tory refers to the third plar, known as the American plan. He says:
A third and certainly feasible plan would be to adopt outright the principle of the American Farm Loan Board, and establish land banks distributed suitably over the country. The details of this plan will be found from page 40 onward in the report of last year.
Then he goes on to tell the advantages of that plan. Now I propose to read some evidence as to the effectiveness of this plan.
I have in my hand an editorial taken from the Buffalo Express of April 14, 1925. Similar comments appeared, to my own knowledge, in other American newspapers about .that time, made on the report of Mr. R. A. Cooper, Federal Farm Loans Commissioner, which I presume was submitted at about the date this editorial appeared:
The federal farm-loan system has been in operation eight years, and the losses sustained by the banks in loaning to farmers reflect the ability and willingness of the borrowers to fulfil their contracts and the judgment of the commissioners in making the loans.
Foreclosures of mortgages by the federal farm-loan system in eight years total three-tenths of one per cent, says Commissoner Cooper. These losses on real estate total only one day's net profits of the government loaning institutions. Yet the loans amounted to $1,535,198,933, divided among 403,906 farmers. The farm-loan land banks found it necessary to institute foreclosure proceedings in 4,701 instances, but the number of farms acquired is only 1,271. The joint-stock land banks have acquired only 125 farms. Thus over 400,000 mortgages continue in good standing or have been paid off.
I submit, Mr. Speaker, that with such evidence as this before them the government are not justified in further delaying a scheme which is so urgently needed to assist our farmers at the present time.
It has been already pointed out in this House that there is need for the enlargement of the application of the Bankruptcy Act. I am in agreement with that opinion. Some of our farmers-and I am not going to pause now to place the blame-are in such circumstances that no long-term credit system could help them; it would not be safe, it would not be good business to lend them .money. But I would suggest that those men having been once bitten will be twice shy, and that if they were released from the financial entanglements in which they find themselves they would be a greater asset to us than any new immigrants that we might bring in to
fill their places-that if they could be placed in a position where they could start afresh under such a scheme as has been suggested here then they would be an asset and not a liability to the country.
Another matter which I think is urgently in need of attention, Mr. Speaker, is the desirability of amendments to the Grain Act, and I simply want to call this to the notice of the government. The Minister of Trade and Commerce, as I recollect, a few days ago stated that he considered it would be wiser to leave these amendments over for a year's consideration. I submit, Sir, that for one reason it would not be wise to defer action until next session. I can understand the attitude of those who say that this is an important matter and should receive serious consideration, and if it were not for this one thing thait I am about to point out I think I would be inclined to agree with the minister. But in the last year we in western Canada have adopted a new system of marketing our grain, the pooling system, and because the present act does not protect our pools, was not in fact drawn to meet their requirements, I submit that we have before us the necessity of at least providing such amendments as would cover the case of these wheat pools in the conduct of their 'business for another year.
In conclusion, Mr. Speaker, there is one other matter that I want to touch upon, and it is worthy of much more intensive consideration than I propose to give to it this afternoon-I mean immigration. I do not intend to treat this as a hypothetical question or one that ban be considered apart from the everyday circumstances in whibh we find ourselves. If the policies of the government were different, I think we might regard this question in a different way, but we are trying to carry on, and until we can change the present policies we must cut our cloth accordingly. I am not one of those, although I admit conditions are not favourable to immigrants, who would say that we should wholly exclude them; but I would very largely limit the scope of immigration at the present time. I am wholly in accord with those who say that it is unwise to spend large sums of money in an attempt to entice immigrants to this country. I shall not go into the matter of our loss of population-that has a direct bearing upon it. But after all, I submit that very largely it hinges upon the policies that this government has adopted, and until those policies are changed, as I have said before, we must trim our sails to suit the passing breeze. There are certain
2418	COMMONS
The Budget-Mr. Stewart (Humboldt)
people who can come to this Icountry even under the present unfavourable conditions. Let me give an instance. The constituency that I represent here is very cosmopolitan in its population. In one part about eighty per cent are of Scandinavian extraction. Another quite extensive corner of the constituency is to a very Considerable extent Icelandic. Another section of it is peopled largely by those of German extraction; another French, another Ruthenian. So you can understand that I speak with first-hand knowledge of the peoples that are coming to ithis country. Referring particularly to the Scandinavian peoples, and including with them the Icelanders, I consider that those who come here from those countries should be welcomed and that we should put nothing in the way of their entry into Canada. I had occasion to discuss one of the sources of our Scandinavian immigration with the manager of certain newspapers that circulate among our Scandinavian population in western Canada and also have a certain circulation in Norway and Sweden; I refer to the two papers, Norrona, and Svenska Canada-Tidningen, or the Swedish Canadian News. I did not know just what was the nature of the advertising these papers were carrying, because I do not read or speak either the Norwegian or the Swedish language. I had seen so many advertisements scattered by this government, and solme by previous governments, that were misleading, that painted in far too bright colours the possibilities of this country, that I took occasion [DOT] to direct the attention of the manager and owner of these publications to the fact. 1 did	not directly accuse him of	doing	thesame thing, but I pointed out that I considered it most unwise that newspapers or any other form of advertising in this country	should	picture too brightly	the possibilities of Canada for intending immigrants. He told me that such was not the case with his	paper	and that he would	place	theevidence in my hands. I have here a letter from the editor of these papers and I wish to place on record a few of the statements made therein. He says he is enclosing some extracts to	prove his statement	about	the
attitude taken by these publications, and that he believes those extracts to be typical. This is from the editor and the writer of most of the articles that are of an advertising nature so far as immigration is concerned:
I, tor myself, and on behalf of the other writers for those two papers, absolutely protest against the accusation that we have been painting Canada in too rosy colors. We have only been telling facts, and besides, we have time and again warned the wrong [Mr. C. W. Stewart. 1
kind of people to come. We have told our readers that they must work hard in order to succeed, as is shown-
And he refers to certain extracts. He says further:
We want the man with the real pioneer spirit who is eager to tackle a hard job and who knows beforehand that he has to endure many hardships before he can succeed. That has been the spirit both of our special articles and of our editorials.
From the results that I have observed from this kind of advertising, Mr. Speaker, I am bound to say that these people are coming here knowing that they have a difficult task to assume, and they are assuming it in the spirit of our early pioneers. I would urge the government, then, to continue that feature of their immigration programme; no obstacle should be put in the way of the entry of such people into this country.
Before I take my seat I want to say to this government that I cannot support an immigration scheme much wider in its scope that that-that is, of simply allowing those to come here who can see possibilities greater than they are at present enjoying, knowing the full circumstances of the case. I am of the opinion, however, that it would be possible so to change the policies of our government, particularly in regard to taxation, that this country would be much more enticing to those in foreign lands. I would say further that the change in policy that I advocate is certainly not along the lines of that which has been advocated so unanimously and so strenuously by those to our immediate right in this House. I am in agreement with those who have stated that our native population is great; that the building up of our country depends upon the building up of our population. It is therefore because I cannot agree with the present fiscal policies or taxation proposals of this government, and because I think the sooner the people have an opportunity of voicing their opinions upon these matters the better it will be for all concerned, that I am opposing the present budget, knowing full well, as I do, what that opposition means.


Mr. J. F. FAFARD (L'Islet) (Translation):: Mr. Speaker, we have been listening, for the last few weeks, to so much talk about protection that, last night I dreamt of protection. I saw in a dark shaded spot, I might even say infernal, a crowd that I recognized as having seen sitting on your left, Sir. Somewhat astonished; I hastened to inquire what brought them to that place, and they answered, grinding their teeth: "The people found us out, and punished us.".

The Budget-Mr. Fajard


Mr. FOURNIER (Translation):: Did the hon. member also meet Progressives there?


Joseph-Fernand Fafard: My hon.
friend inquires whether I met any Progressives there: I can say that I did not see any in the flames, but I came across some on the road, who seemed to be very shaky, and told me that I was the only one, being a Liberal, that could save them.
Mr. Speaker, we often hear about economy. We like, on this side of the House, to hear about economy, because it is a virtue we practise. However, I can assure you that I do not like to take my cue, on economy, from our opponents who sit on the opposite side of the House. I wish to be fair towards my opponents and set aside the yearn of the war: the policy of unlimited participation which they had adopted, obliged them to spend enormous sums, and I quite understand that during the year that followed the war, they had to make great outlays owing to demobilization; however, if you look up the year 1920, two years after the war, you will perceive that these gentlemen had a deficit of $674,000,000. These figures are so exorbitant that the people, as a whole, and even the financiers cannot conceive its enormity. $674,000,000, Sir, this means $56,000,000 per month, more than $13,000,000 per week and nearly $2,000,000 per day! And the same gentlemen wish to teach us economy, when the budget shows a surplus of nearly $2,000,000!
Our debt, Sir, is enormous, this we cannot deny, and we realize it, 'when we find that the interest we have to meet each year on Canada's debt is equal to the total debt of pre-war days, and is even larger. It would be criminal, with our present population, to tax the people in order to make them pay this debt. Such a policy would bring ruin to our country. It would overburden the people with taxation, paralyze trade, ruin our industries and prevent the development of our natural resources. The most suitable policy is the one followed by the present government, which consists in fostering the development of our natural resources.
Notwithstanding the enormity of our debt, Sir, I am glad to note that we can compare advantageously with other nations of this world. Canada's debt per capita, is $268; New Zealand, $792; England, $791; France, $540 and Australia, $359. And our situation would still be better, if our political opponents, when in power, had followed the example of England and the United States, and had taxed during the conflict, the war profiteers, instead of exempting them by means of the Victory
bonds, from paying taxes during and after the war.
I think, Sir, that we have too many pessimists who make use of their brains and talents to try and show that business is bad and that we are on the verge of bankruptcy, people that are ready to sacrifice the country to satisfy their political ambition. If you compare our obligations with the extent of our wealth, you will perceive that, after all. they are not so enormous. Without taking into acount the wealth of our forests, mines, fisheries and water powers, we notice that the mortgage which burdens Canada to-day, amounts to only $1.00 per acre of land; and, if we include our natural resources which I have just mentioned, we note that the mortgage amounts to only two or three cents per acre. The ex-Minister of Finance (Sir Henry Drayton), in the course of this debate, told us that the Americans had invested in this country a capital of $2,500,000,000, which means that, the American capital alone, invested in Canada is sufficient to redeem the whole debt of this country. We must neither forget that our forest wealth amounts to $3,000,000,000; that is the latter alone is greater than Canada's total obligations. This is certainly not an example of a country on the verge of bankruptcy.
If we wish to follow in the path of prosperity, we must face the future with confidence. When the explorer, in his travels, crosses the forest, he is guided by the Polar star, so should true Canadians be guided by the star of patriotism.


Charles Alphonse Fournier: Hear, hear!


Joseph-Fernand Fafard: Mr. Speaker, free trade and high protection were threshed out. I shall never become a free trader as long as the United States keep up the present tariff wall against us. I can neither side with those high protectionists who wish to concentrate the country's wealth amongst a group of persons, instead of spreading it amongst the masses. I think there should be a readjustment of the tariff on articles of first necessity, so as to help the masses and thereby keep our people in this country.
Our opponents, faithful advocates of the large interests, proclaimed everywhere that lowering the tariff has brought on a great number of failures. Yet, if you look up the report regarding trade failures in Canada you will note that in 1914, when these gentlemen were in power, there were 2,898 failures. Moreover, in 1915, when the country enjoyed a fictitious prosperity, brought on by the war,
The Budget-Mr. Fajard

there were in Canada 2,661 failures. Let us now return to the Liberal administration, whose lowering of the tariff is supposed to have ruined the country; we find that in 1923, there were 448 failures less than in 1922. Even after the budget of 1924, which was expected to ruin the country, we remark 1,221 failures less than in 1922. These figures taken from the statistics of Canada, cannot be disputed. The right hon. leader of the opposition (Mr. Meighen), last summer, travelled through the country stating everywhere that 2,000 industries had become bankrupts. Nevertheless, in the city of Ottawa, last autumn, at the meeting of the Canadian Manufacturers Association, one of its most distinguished members stated, that not 2,000, but 1,331 industries had closed their doors. And one bit of news that the leader of the opposition took care to hide from the people, was that 934 new factories had opened their doors.


Some hon. MEMBERS:: Hear, hear!


Joseph-Fernand Fafard: It was equally stated that the boot and shoe, industry was ruined. From 1921 to 1923, the number of factories increased from 177 to 186 and the value of their output also increased by 11,000,000. Everywhere it was said that this industry suffered greatly from the preferential tariff granted to Great Britain; and yet, the Canadian output amounted to 845,596,012 in 1923, and the imports from Great Britain amounted to only $604,472.
I think, Sir, that the leader of the opposition will find it difficult to convince the people that he is sincere, even when he speaks of high protective tariff. If he was in earnest, nothing could have prevented him in 1911, from raising the tariff. It was in the course of the year 1911, that reciprocity was defeated in Canada. If, Sir, the farmers, at present, find it hard to trade with their neighbours to the south, the culprits are those Who were responsible for the defeat of reciprocity. The Liberal party has always been the friend of the farmer. We may thank the Liberal party for having lowered the tariff on farm implements and on all instruments of production which are used in the development of our natural resources.
Tariff increase on potatoes was discussed among certain groups, and in particular, Sir, by the opposition. I am aware that the policy aimed at is not so much to increase the tariff on potatoes as to increase it on farm implements; it means simply that they want to allow a few cents more per 100 lbs. of potatoes and charge the farmer from thirty to forty dollars more, when selling him some farm

implement needed. I have the honour to represent a county which is almost exclusively devoted to farming, and I am willing to do my utmost to help the farmer, as I think he is most deserving. Money is scarce in the rural districts, the crops were not very good and the products give but a small return; the farmer is somewhat depressed, as he must do the work alone, owing to the impossibility of finding farmhands. I would even say that sometimes he does not receive fair play. When public works are undertaken in towns, prices are fixed beforehand and we pay practically twice what is paid for the same work when undertaken in a rural district. I have often wondered what could be the remedy for such a situation. Some have said:	Raise the
tariff to the level of that of the United States. Well, Sir, I have more confidence than that, in my country. The United States have a population of 115,000,000 people; they regulate their tariff according to the needs of their country, and, I think, that Canada, with her 9,000,000 inhabitants, has a right to put up a tariff which suits the Canadians. It is quite clear that, if you increase the tariff on potatoes, butter and other products, the American products will not reach our markets; however, would this be the right remedy? In my opinion, this would only tend to lower transportation rates.
I spent the Easter holidays in my county. Potatoes are sold 25 cents per bushel, that is in round figures 37 cents per 100 lbs. Is there any thinking person, in this House, who will maintain that the Americans can take 100 lbs. of potatoes to the borders, pay 35 cents of a duty on these 100 lbs. and sell them on our markets, especially if we reckon that their freight rates are 15 per cent higher than ours. Surely one cannot conceive the idea that the Americans who are so highly praised in this House, will come to our markets and sell potatoes which will bring them but 2 cents per 100 lbs.
Butter was mentioned. I happened to receive yesterday, the report of the Dairy branch for February, 1925. The question is, would it be wise to raise the tariff on butter? This would be absolutely absurd for, I see by the statistical report that the United States have exported to Canada 50 lbs of butter only. This is a proof that our tariff is high enough. However, I have been toild that a number of carloads of potatoes have been sold in the west. It may be that in this case a higher tariff should be sought. In my opinion, however, it is an absolutely wrong principle land11 would prefer, instead of raising the tariff, that we reduce the freight rates,

The Budget-Mr. Fafard
which amounts to the same thing and allows us to foe consistent with ourselves. There is something else whildh we .must bear in mind, it is our exportation off potatoes. We export eight times mofle-'that is 3,000,000 bushels more-than we import. Potatoes, reputed to come from the United States do not compete much with ours. Sweet potatoes, for instance, come from the United States, but offer no competition to ours, as we grow very few. At this time of the year we have new potatoes which come from Florida. One cannot contend tihat they compete with ours, because they are a luxury bought only by wealthy people.
There was also question of raising the tariff on eggs. I notice, Sir, that these requests always come from the Conservative side. We may say that since the present government has been returned to power, the importation of Chinese eggs has practically stopped; not on account of the tariff, but through classification, and our imports from the United States have decreased' by 6,727,000 dozens.
I think, Mr. Speaker, that the Liberal party's policy has been advantageous to the farmer. I equally believe that the people are not sufficiently enlightened as to the meaning of the word protection. One generally looks upon protection as a measure to protect us, when, as a rule it is a measure to exploit the people. There exists an easy way to do away with protection or at least to diminish it in a perceptible manner, it would be to Oblige industries or manufacturers who 'benefit by protection to indicate on their vouchers the Canadian price and also the amount they benefit by protection. We have been led to believe, in our provinlce, that a high protective tariff was necessary to develop our industries; that the latter would give work to farmers' sons and, moreover, create markets for every farmer. Well, Sir, when we consider our farm products, I do not think that in this present century, the industries can absorb all these products. Take, for instance, our wheat, I think we could feed a population of 80 to 90 million people.
We are also told that the United States had prospered under protection. I am not one of those who put a great deal of faith in the prosperity of the United States, and especially in the prosperity of the American farmer. Are you aware, Sir, that in Canada 98 per cent of the farmers own their land, while in the United States, a country, where prosperity seems to reign, 40 per cent of the farmers are but tenants. As to bankruptcies, they have been far more numerous in the United States than in Canada. Moreover,' to give you further proof of what protection has
been unable to accomplish, to help the fanner, will you allow me to quote a few lines from the speech delivered in this House, on April 6, 1925, by the hon. member for Brome (Mr. McM aster):
The figures which I have before me purport to show that the gross cost to the farmers of the protective principle is $426,000,000; that, in other words, what they have to buy has been artificially increased in price to the extent of $426,000,000; that the price of what they have to sell has been artificially increased to the extent of $125,000,000, and that, therefore, the net cost to agriculture is $301,000,000.
I think, Sir, that these figures prove clearly that the Americans do not enjoy the prosperity that we believe they do. And I find one of the best proofs of my assertion, in an article which was lately published in the Montreal Gazette, informing us that the Americans are purchasing lands in the west, and are doing so on a large scale.
Moreover, the United States are not such protectionists as some hon. members imagine, for 58 per cent of their imports enter the country free of duty.
What has really made the United States prosperous, is that during the first years of the war, in 1914, 1915 and 1916, when this government was spending hundreds and hundreds of millions, the Americans were amassing profits, derived from the war, amounting to hundreds of millions of dollars. What also contributed to the prosperity of that country is, that the Americans taxed the people during the war, and especially the war profiteers. For my part, I am in favour of moderate protection, because the results already obtained in this country point out that it is the best policy to be adopted. If we look back to the period between 1907 and 1911, we note that those years were the most prosperous ones in the history of our country. It is from 1907 to 1911 that the immigrants came into this country by hundreds of thousands, and it is during those years tha,t we witnessed our trade increase by over a billion dollars.
I stated, just now, that the farmer from the province of Quebec needs help, and I might suggest, with that aim in view, to lower the freight rates on farm products I must further add that loans are hard to obtain in the rural districts. The farmer who has money to loan out, prefers buying municipal bonds, and there are also certain industrial bonds which are sold in the country by swindlers who should be in gaol instead of being allowed to roam free. It has often been stated, I am willing to admit it, that the farming industry was the largest industry
The Budget-Mr. Fafard

in the country, however, what has always happened up to this day, is that this large agricultural industry sees, each year, its money flow towards the cities to develop the industries of our Canadian centres, and even, sometimes, American industries. I would therefore suggest that a bill be brought down by which banks, in our rural districts, would be obliged to place 80 per cent of their deposits within a given radius. Let us suppose, for instance, that the banks in the county of 1'Islet, were allowed to make loans in the county of Montmagny and Kamouraska, and only forward 20 per cent of their deposits to cities.
With such an understanding, the fanner could easily obtain a loan from the banks at 6 per cent, for banks never lose money with the farmer. Our banks could also help the local industries which are often more firmly established than are those in the cities. With such an arrangement we could develop the country in a normal wary throughout its various parts.
Moreover, the agricultural industry needs foreign markets. For this latter reason, I wikh to associate myself with the hon. members who represent the city of Quebec, in requesting the government to develop the Quebec harbour. Although I hail from a rural district and reside at some distance from Quebec, I think that the development of the Quebec harbour should not be left to local initiative only, but should become a national task. This is why I associate myself with the Quebec members in their request.
The present week, Sir, has been set aside as the week of forest protection. I must frankly admit that I was somewhat disappointed in not hearing it mentioned in this House. It strikes me that the protection which is given to our forests, is of the utmost importance, for the Dominion and provincial government draw from them revenues amounting to $12,000,000 yearly. I think that the Dominion government does not shoulder its fair share for the protection of our forests. We spend vast sums of money in the Canadian west to destroy insects which might harm the crops, and we do not spend anything for our forests which constitute a ripe harvest ready to reap. I must insist on the government doing more, because it would be performing a truly national work. Moreover, everybody is interested in the protection of our forests. The latter give employment to 95,000 people and are equally of interest to our financiers, since $600,000,000 are invested in the industries that are being operated. The conservation of our forests is also a vital 
question to our farmers, for it has been shown that the forest helps to regulate the weather, and should the forests disappear from the Canadian soil we certainly would have to suffer from droughts which affect other countries.
The Quebec government certainly deserves praise for the efforts made to preserve our forests. What is especially needed is an educational campaign, and I might suggest that the Dominion and the provincial governments encourage reforesting in all the provinces of Canada. A bounty should be granted to companies and even to private individuals, for the replanting of trees. We possess large tracks of sand or sandy loams which are entirely untilled, giving no returns to the farmer, and upon which we could advantageously plant coniferous trees, even pines, and so forth. I feel sure, if the people understood that companies and private individuals carry on tree replanting because they derive profits, one would be more scrupulous in his lumbering operations.
Mr. Speaker, I wish to congratulate Sir Henry Thornton for having had the courtesy of presenting, this year, his report in the two official languages of this country. Sir Henry Thornton was able to win the affection of the Canadian people. However, I am sorry to have, to-day, to draw the attention of the House to certain matters which in no way reflect on the president of our National Railways, but which especially refer to some of his officials. I thought the House would be the proper authority to come to in order to obtain redress. I carried on quite a correspondence on the subject, without ever obtaining any results.
I am certainly, Sir, in favour of excluding our National Railways from politics, however, on the other hand, one must not make use of politics to ruin politicians in their own counties. For instance, in the county of L'Islet, if I am to believe a number of foremen of our railways, one must secure a letter of recommendation to obtain work as a daily labourer on the railway. To support my statement, I shall read a letter which I received from one foreman:	.
Sr. Francis, June 17, 1922. Mr. J. Fernand Fafard, M.P.,
L'Islet.
Dear Sir.-I have a man with me who has been working with the "gang" for a number of years, would you be kind enough to send him a letter of recommendation and to address it to St. Aubert.
The man's name is Mr. Cyprien Bard, St. Aubert, county of L'Islet.
The officials requested a recommendation.
Rene Coulombb.
Foreman..

The Budget-Mr. Fajard
So far as I am concerned, I have always been against, since 1921, forcing appointments of labourers on the railways; I simply made it a point to send to the proper authorities a list containing about thirty names, asking them to choose those they wanted, and they chose, in most cases, political friends.
I shall read another letter which I received, to show how recommendations are considered by these gentlemen.
It is dated August 8, 1922:
St. Aubert, August 8, 1922.
Dear Str,-I went to the expense of going to Levis with the letter of recommendation you sent me, and I presented it to Mr. Patrick Lavery, he did not even go to the trouble of reading it. Mr. Joseph Francoeur was present when I gave him this letter.
I can well understand, Sir, that there can be no blame attached to the president or to certain other officials, if such things happen. Moreover, in our division of the Intercolonial Railway, it often happens, it is notorious that Conservative propaganda is being carried on by the railway employees. I might call upon my hon. friend from Kamouraska (Mr. Bouchard) to bear witness; I have not spoken to him about the matter, however, I remember that, at the time of his election, the thing happened in the parish of St. Pacome; a parish which generally gives a Liberal majority; the officials of the railway who are rabid Conservatives, try to discredit the Liberal candidates at election time. I would suggest to Sir Henry Thornton that he appoint another chief official for that division of the Intercolonial Railway, and I should want him to be a French Canadian, for the population is 100 per cent French Canadian. I am very sorry to have been obliged to draw the attention of the House to this matter.
Now, Sir, with your permission, I wish to make a few remarks with reference to immigration. I am certainly in favour of immigration, but of a healthy and industrious kind. At present, we are asking the British government, if I am not mistaken, to send us immigrants in order to place them on farms. It often happens that these immigrants only remain a few months on the farm and then trek to cities, thus increasing the congestion. I would like to suggest a way which may, perhaps, result in preventing this state of things. I think, if the British government paid the expenses of these immigrants who we desire as farmers, and Canada, on the other hand, agreed to reimburse, not half the expenses, but the whole amount, say at the end of two years, providing these immigrants remain on the land and have performed a certain amount of work.
Immigration presents' a difficult problem in this country, for the very reason that we have a number of politicians who think that they have nothing better to do than to roam about the country crying out that Canada is bankrupt. I stated that immigration is a difficult problem, because Canada is not advertised under its true light. If you travel on the Canadian Pacific boats, if you go into our cities, if you even cross over to England, you notice everywhere that the people of Canada are shown up as Indians, cowboys, representations of dog races, oxen harnessed to the yoke and fields filled with stumps are shown. I contend, Sir, that all this is detrimental to- Canada and of a nature to harm her.
As to the literature which the government distributes, what is it? It is certainly not what it should be. We find, for instance, magnificent things in this literature, such as the Rocky mountains. No doubt, the Rocky mountains are beautiful; however, this is not what should be shown to people in earnest who wish to come t-o Canada and establish themselves on farms. We have far more interesting things to show them; for instance, in the west we have splendid farms, excellent industries, water-powers to develop; all these would be more interesting to men of a serious mind and would be of a nature to bring us a better class of immigrants. Moreover, I do not think it is necessary to drag immigration into this country, although I welcome it, for it helps to decrease our debt and reduce our National Railways' deficits. As for us, belonging to the province of Quebec, we believe that the best immigration -agent is the Canadian mother. Yes, the Canadian mother with us, is the best agent for the increase of our population in an absolutely normal way. I must, however, add that this agent of immigration-which is considered the best-has not often enough been rewarded. Nevertheless, we hailing from the province of Quebec, have the merit of holding our own. We have not had the same advantages as the west which was populated by people from overseas. We, French Canadians, state that we are in favour of immigration, and that we have no fear of being absorbed, as some have thought. The Frenchmen have enough blood left in their veins, and as long as there exists a Canadian mother, we shall know how to protect our rights.
In closing my remarks, Sir, allow me to state that the great- problem, in Canada, is not that of production, for the latter, in proportion to our population, is higher than that of any other country in the world. The great
The Budget-Mr. Fajard

problem is to find a market for our products, and to reach such an aim, I think we should have a great number of trade agents in foreign countries.
I am proud of the party to which I have the honour to belong, and I am equally proud of the leader who guides its destinies. The Right Hon. Mackenzie King has drawn the attention of the whole world owing to his firm and energetic attitude on international questions. Our policy is that of Laurier: Protect the interests of the masses rather than those of groups. The farmer, the fisherman, the lumberman and the workman have been protected against the trusts and we have applied ourselves to distribute the wealth among all the classes of society rather than amongst a group of speculators.
In this country, Sir, there exist two great races that have an equal right to be proud of their ancestors. The province of Quebec has been tolerant; the province of Quebec, I state, has given an example of tolerance. In our province, which is for the most part French and Catholic, the provincial govern-' ment never grants a subsidy of one or two million dollars to a French and Catholic university without, on the same day, granting the same amount to an English and Protestant university, notwithstanding that Protestants are in a small minority. We have, Sir, been too tolerant compared with the generosity of others towards us; however, I do not lose hope; I appeal to the good common sense and to British fair play. We have each our defects, we also have our good side, and we have each our characteristics. It is exactly this difference in the two races which should stimulate friendly intercourse and emulation in business pursuits, of a nature to further the development of our great country.


Mr. L. J. LADNER (Vancouver South):: Mr. Speaker, on Wednesday we had occasion to listen to the hon. member for St. Lawrence-St. George (Mr. Marler) deliver an exhaustive study made with considerable ability, though marred a little by an air of superiority, as though he were lecturing children. The hon. gentleman dealt with the budget and primarily with the criticisms which were levelled from this part of the House against certain features of the budget, the point of the criticisms being that the budget was confused and also that it contained inaccuracies. The hon. member for St. Lawrence-St. George stated:
The Acting Minister of Finance states that he has made railway and other advances-almost entirely railway advances, as a matter of fact-to the extent of $19,527,000.
[Mr Fafard.]
The hon. gentleman castigated in rather severe terms the hon. member for Vancouver Centre (Mr. Stevens) and the hon. member for Fort William and Rainy River (Mr. Manion) for the remarks which they had made with respect to the budget. It is my intention during the first portion of my remarks to direct a little attention to the fact that the hon. member for St. Lawrence-St. George himself brought confusion into the debate and himself was inaccurate in the statements he made. As a matter of fact, Mr. Speaker, the figures $19,527,000 are not found anywhere in the budget speech. They are made up, as I have calculated1 subsequently, of items, partly railway, partly advances to the harbour commissioners of Quebec, and partly of other advances which are not connected with the railway services. The item which was disclosed in the budget as being advanced! to the Canadian National Railways was an item of $18,027,000. The indication in the budget all through, in fact the statement there, is that these were advances made or to be made. I have taken occasion to inquire from the accounting department of the Canadian National Railways, from the Department of Railways and1 Canals, and the Department of Finance here, with respect to this item, and I find that as a matter of fact only $10,000,000 of it has been advanced by the government to the railways, and the remaining sum which was provided for temporarily has not been advanced, and will not now be advanced. In fact, the remaining $8,027,000 has been cancelled and the item eliminated from the budget. These facts were, or should have been, known to the hon. member for St. Lawrence-St. George at the time he made his remarks, because it appeared clear to me that he obtained much of his information from the same source from which I have gathered mine, and I found the information in the ordinary course of business in carrying out my duties as a member.
There is another confusion in the budget of still greater importance. The statement is made that the total of our net debt as of the 31st of March, 1924, namely, $2,417,000,000, included the total amount of approximately $582,000,000 of railway indebtedness as up to that date. Now, Mr. Speaker, as a matter of fact that is an inaccuracy of a very grave kind. The dear statement is there that the railway indebtedness is $582,000,000, whereas, as a matter of fact, the railway indebtedness at that time was approximately $690,550,000. I submit

The Budget-Mr. Ladner
that the Acting Minister of Finance (Mr. Rccbb) in bringing down his budget should have shown the full indebtedness of the railways to the government. If the railways should suddenly find themselves in the position of saying to the government, "Here is a cheque for your money. How much do we owe?" that s.urely is the railway indebtedness, and that sum is not $582,000,000, but $690,550,000. Part of the debt arises owing to the fact that $130,000,000 is for accrued interest. But even taking away the $130,000,000 for accrued interest even an accountant can hardly work out the balance of principal at $582,000,000.
I do not make that statement on my own authority; I have the authority of officials of the accounting department of the Canadian National Railways and the Department of Railways anid Canals, and I have also discussed the matter with the Department of Finance, who maintain that certain entries made should not be made, and that the system of bookkeeping is different in the one case from the other. I believe our criticism is perfectly correct. Why should there be confusion in such an important matter, involving millions upon millions of the public expenditure? It should be so clear that one should be able to go to the Canadian National Railways or to the Department of Railways and Canals, or to the Department of Finance, and obtain exactly the same figures, because the money in any case must be there and must be accounted for in some way or another. So that I think the charge made in this part of the House that the budget is inaccurate is perfectly true. The reports and information from the departments will prove that fact. I have found in the course of my inquiries that not only was the ordinary accountant unable to solve the difficulty, but even experts in the accountants' department of the Canadian National Railways found it impossible to reconcile a number of figures given in the budget speech, as well as in the Canadian National report, and had to have the assistance of other experts to ascertain the facts. If people who are in the accounting department are not able to decide the standing and the position of the country with relation to railways, how much more difficult must it be for the average business man or the citizen at large in the community to understand the situation? The hon. member for St. Lawrence-St. George (Mr. Marler) also made this statement:
It does not make any difference in the least whether cash is advanced out of the consolidated fund or borrowed.
There is no difference whether it appears in the consolidated debt or the railway debt.
I maintain that there is a very great difference so far as the financing of the government is concerned. I have checked up in the Department of Finance and the Public Accounts the advances made to the railways and find the following:
Year ending 31st March-
1921		 $109,000,000
1922		 97,000,000
1923		 77,000,000
1924		 23,000,000
1925		 10,000,000
-not $18,000,000 as disclosed in the budget, but $10,000,000, because that $18,000,000 has not been advanced, but has been cancelled. I think the hon. member for St. Lawrence-St. George could' have presented his argument in ten minutes if he had confined it to the real point of criticism raised in this portion of the House. The criticism is, not that the government have changed the accounts or even changed in some way the form of bookkeeping, but they have changed the policy of financing. While under the regime of the actual Minister of Finance (Mr. Fielding), the cash advanced by the government to the railways was $97,000,000, the government now advances only $10,000,000, though the deficits of the railway are practically the same as they were in 1922; that is, they average over $100,000,000 a year. How is the difference made up? It is made up by the government endorsing the securities or guaranteeing the bonds of the railway, and considering that as a contingent liability. The government financing is thus made a simple matter. They advance in 1925, $10,000,000 and endorse to the extent of $81,000,000, I believe. The budget is inaccurate and has caused confusion in the public	mind. The criticism we make is
simply that the public reading the budget speech are not able to determine the course of the country's affairs, in relation to the railways. The plain fact is that, regardless of the method of financing, the debt of the Canadian National Railways is increased each year. The figures are interesting as well as instructive. They are as follows:
Year ending 31st December-	Increase of debt
1921		 $133,000,000
1922		 59,000.000
1923		 116,000,000
1924	 118,000,000
Total	 $427,000,000
This is an average of over $106,000,000 a year, and the situation apparently is not growing better. A peculiar feature of the situation-and this will be found in the Canadian National Railways report of 1924-is that the sum of $20,000,000 was loaned by the Canadian National Railways to the govem-

The Budget-Mr. Ladner

ment. I am not mating any error in that statement. That sum was loaned by the railway to the government which on its part is constantly loaning large sums of money year in and year out. Why wias that done? I have not been able to find out, nor does the budget disclose the method by which it was done, or what has happened to the money We know that, as of 31st December, 1924, the railway had on hand 814,259,000. The railway in its annual report regarded this as a refunding, the government regards it as a temporary loan; so that as between the statement of the government and the statement of the railway there is no reconciliation. What occurred is this: between 31st December 1924 and 31st March of this year, the budget coming down the 24th March or before the end of the fiscal year, the balance of this $14,000,000 which was loaned by the railway to the government is being returned in certain sums not disclosed in the budget, and the public are unable to find out why or how it was being done. In other words you can almost fairly apply the statement that the accounts were being juggled or that there was a juggling. I do not go as far as that. I think the accounts have been properly kept and all accounted for. I do not think anything happened to the money. But there is not a frank and clear disclosure in the budget in regard to this item, and it is a most important one. Consider the loans made by the government to the railway. I find that in 1921 these amounted to $460,000,000. In 1922 the loans were $542,000,000, an increase of $87,781,000. In 1923 they amounted to $666,000,000, and that includes principal and interest, being an increase of $124,000,000. In 1924 they amounted to $690,555,000. These are staggering figures and the people should be allowed to know the facts that they disclose, and those facts are not made clear in the budget. In my judgment they should have appeared in the budget, to set forth the relationship of the railway to- the country's affairs and show exactly how we are getting along. But of still more astounding importance are the direct and indirect obligations of the railway, which are as follows:
1922	 1823,000,000
1924	 913,913,000
If you calculate the standing of the government so far as these railways are concerned, you will find that as at the end of the year 1-924 they have advanced cash in the sum of $690,555,000 and guaranteed $913,913,000. The other figures are:
Canadian Government Railways, other than
the Canadian National system	(451,712.000
Central Vermont	 8,973,000
IMr. Ladner.]
Making a total investment of $2,065,153,000 part cash and part direct and indirect obligations.
I bring these figures to the attention of the House in order thait -hon. members may realize the tremendous undertaking we have on hand and the need of adopting constructive methods in order to remedy the situation.
The Canadian National system is composed of 89 different corporate bodies. We have now 22,055 .miles of railway. In 1921, we had 17,338 miles; in 1922, 17,224, and in 1923, 22,040. So that about five thousand miles of railway have been built or acquired since 1922. Why this further investment has been made, we do not know. It may be -perfectly justifiable. Nevertheless it certainly involves tremendous capital expenditures and obligations on the part of Canada. The operating income of the Canadian National system shows the following results at the end of each year:
Year	Net profit Loss
1921		 $10,092,000
1922		 $1,227,000
1923		 16,273,000
1924		 12,235,000
My purpose in bringing this to the attention of the House is to lay the foundation for some suggestions which, in my humble opinion, should be carried out by this country, instead of following a policy of drift. Some action must be taken by the government. I do not think it can be left to voluntary action on the part of the Canadian Pacific or the Canadian National. I do not think a merger in the sense of consolidation of the properties as regards ownership or management under one directing head will be acceptable to the people of Canada. Because, satisfactory as it may be at the present time, it is bound in the end to result in some sort of monopolistic relationship to the people, and we would have those troubles which a single monopoly or combine brings, or if it does not bring them, the people think it brings evil results. For these reasons, with a loss-or rather an additional investment-of $100,000,000 a year on the part of the Canadian National system, I believe we should eliminate wasteful competition, useless duplications such as terminals and things of that kind, unnecessary expenditures, palatial steel cars, Scribe hotel and a number of other expenditures which we know about. We should eliminate maintenance work on unnecessary duplicating lines. We should endeavour to bring about between these two systems cooperation in services, in running rights for freight over the shortest and -cheapest route, in matters of tracks, tunnels, buildings, bridges, stations, especially in the Union station. I have

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taken the trouble to check over the latest time-tables issued1 by the two systems with the idea of finding out duplications in services which actually exist on the main lines. I am told by officials of both these companies that it is the duplication on the main trunk lines which brings about the expense and that everything depends upon that; that the branch lines are made to fit in with the main trunk lines. If you check up the time-table between Montreal and Toronto, you will find there are ten trains going each way every day. Three trains leave Montreal for Toronto in the morning within twenty minutes of each other. Five trains leave Montreal for Toronto each day in the evening within the space of one hour. That is useless competition. Each train has a separate engine, a separate baggage car, a separate day coach and separate other cars. If you travel on them you will find them often empty. The idea of this burden of expense, these deficits which are being shouldered by the people as a result of this fruitless and senseless competition where five palatial trains, well equipped, leave Montreal for Toronto within the space of one hour, is appalling to the taxpayers of this country and should bring responsibility upon the government to act and not to leave the matter to volition or initiative on the part of the railways.
Most hon. members know of the service between Montreal and Ottawa. There are thirteen trains a day going from Ottawa to Montreal and ten trains a day returning. Three of those trains to Montreal leave in the morning within ten minutes of each other, and they are not transcontinental trains-these leave earlier. Five trains leave Ottawa-and they are semi-local trains on short runs-in the afternoon within two hours of each other. So that, from Ottawa to Montreal you have five trains leaving within two hours, and from Montreal to Toronto you have five trains leaving within one hour, every day. I am told by men who know that these cost hundreds of thousands of dollars. This is useless, senseless, fruitless competition and extravagance, and it should be rectified in some way. I have taken occasion to speak to some of the railway officials whom I know personally and to present these bald facts to them. I have stated:	"Why not save the expense?" One
side will say: "We did not start it; the other fellow did and we have to keep up with him." If you ask the other fellow, he will say the game thing. Therefore, I maintain that the responsibility for 155i
action must rest with the government-and it cannot be a merger of the two systems- to compel co-operation as regards their management and services to the people of Canada so that the expense involved will 'be less than it is to-day. Between Vancouver and the east there are four transcontinental trains a day all the year round and five transcontinental trains during the spring, summer and fall. I am told by high officials of both these companies that the expense of each of these transcontinental trains is $9,000,000 a year. Hon. members who may travel on these trains will see that, perhaps, there will be four or 5 pun. five people on these through trains.
This is evidence of the fact which we have had discussed in the press extensively lately as regards statements made by the heads of both systems that economy can be effected. It seems unfortunate that these economies are not effected, because the people are paying, they are providing the taxes to meet the $100,000,000 a year deficit. I say again that the responsibility rests with the government for lack of action, lack of initiative and aggressiveness, to take hold of an appalling situation such as that and to endeavour by some means to cure it.
Ou this point I want to say a few words in connection with the Canadian Government Merchant Marine. An 'hon. member opposite levelled a good deal of criticism against our merchant marine. There is a deficit, but I am glad to say that the deficit does not arise in the west. I have taken the trouble to collect some data in this regard, and I find that the twenty-one boats operating out of Vancouver produce a profit. There were fifteen vessels of 8,000 tons; two of 4,400 tons, and four of 3,900 tons. For the past six years every ship, with one exception, has sailed from Vancouver to a foreign port fully loaded, that is, loaded beneath deck and on the deck. In the single exception the boat had a full load under deck, but it did not have anything on deck. The lumber trade in British Columbia has greatly benefited by the presence of these boats; they have been a most important factor in opening up new markets for western Canada, markets which we did not have before, such as New Zealand, Australia and around through the Panama canal to eastern Canada and the eastern states. They have also been an important factor in forcing other shipping companies to provide boat services at places in British Columbia where formerly we did not have any service and the business was sent to the states of Washington and Oregon. It was the Canadian Government Merchant Marine
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that opened up the business in the Bristol channel in England and at Belfast, Ireland. These vessels go to Japan and China carrying large quantities of lumber, wheat and other products. The management is very active. I know of one instance where they stepped in and took from our friends to the south in the states of Washington and Oregon an order for 35,000,000 feet of ties, an order which is renewed every year. They took that away from the states and provided it for the mills of British Columbia When those mills were very badly in need of business.
Now, with the deficits of the railway; with the increase in the national debt; with the absence of real economy on the part of the government; with the depression in business generally; with the emigration from the country of thousands of people; and with the closing of our factories, there is one natural and necessary result, and if is expressed in the word "taxation." And taxation in Canada has not only reached but has passed the point where it can be left longer untouched without extremely disastrous results to the country. A little book by a man named MacFarlane, under the title "Taxation of Industrial Organizations in Canada" makes a statement which I think is pertinent to the present situation:
Canadian industrial organizations are rapidly becoming so tax-handicapped in their cost of production budget, that not only are they estopped from forecasting lower prices to the consumer, but they must submissively anticipate their own possible elimination from world market competition. . . .
To illustrate, a well-known manufacturing industry with branches throughout Canada has, in recent years, been obliged to be fully conversant with, and to fulfil the requirements of. three Dominion tax measures (the incidence of Business Profits Tax Act being still in existence), ten provincial corporation taxation acts (Nova Scotia having two), and some twenty municipal realty and business taxes; a total of thirty-three widely differentiated enactments, and all continually in a state of legislative flux.
So that in all they pay over thirty different taxes. The load is altogether too heavy and something must be done in the matter. I observed in the Ottawa Journal, of date April 17, 1925, an editorial in which it was estimated that a Canadian living in Ottawa must pay to the Dominion government $38, to the provincial government $13, to the schools and municipalities $30, or a total of $81, which for a family of five amounts to $405. But there are other levies beside' the income tax that must be paid. Let me submit the following comparative statement of taxes paid in British Columbia to the federal government, and taxes paid in the state of Washington. This statement was prepared

by the Associated Property Owners of Vancouver: Net income $5,000

Dominion of Canada State of Washington Brit. Col.	$ 95
Federal	126

 $221	$50
Brit. Col.	$210
Federal	283

 $493	$100
Taking the income tax alone in each of the two countries, without considering any other taxes, I find from the Canadian tax returns, report No. 27, the following comparison :
Income

Canadian $ 40 126
619 50
United States $ 7 50 37 50 207 50
In other words, our tax ranges all the way from three to six times as much as the American rate, and these taxes are having a disastrous effect on business. They are driving capital from the country and are forcing our young men and women to go elsewhere; they are creating despondency among business men and generally are tending to a most unsatisfactory conditon of things. I have here an extract from a report of the shareholders of the Consolidated Mining and Smelting Company of Canada in which I find a statement that is extremely indicative of conditions at the present time. I quote from the report:
You will notice the large sum $790,120.42 necessarily reserved for Federal and Provincial taxes under the existing exorbitant basis of taxation. This amount is many times what it would have been on the same revenue in pre-war days on the basis of taxation then in effect.
Government operations and projects continue to more than exhaust all the revenue that the people can provide under most excessive taxation. In addition to every government undertaking costing a great deal more than if constructed by an individual or a private corporation, its subsequent operation is rarely profitable, so that usually not only must the interest on the cost be provided for by fresh taxation, but also maintenance and pay roll must come largely from that source. Private enterprise being subject to ever increasing taxation in order to meet additional government requirements, there is no real incentive to engage in the industrial or other development of the country- and therefore no substantial progress is being made. Furthermore with the United States reducing its tax rate and its public debt, and Canada making neither reduction, the exodus to the United States is not difficult to understand.
For the time being your company is fortunately able to withstand the heavy tribute levied by the governments, but if more private enterprises are not established to share the burden or if other existing private enterprises perish-the load may well become too heavy ;o be borne.
We find prominent men in the country, such as Mr. Beatty of the Canadian Pacific Railway, coming to the same conclusions, all pointing unquestionably to the fact that unless the problem of taxation is taken in hand and

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controlled by a proper system of economy on the part of the government, so that capital may be enabled to remain in the country, protected against expropriation, we are going to suffer from a deadlock in this direction. And when we have no capital we shall cease to have any industrial development; nor will there be any hope of our people returning to the country. Our taxes are mounting while the national debt increases year after year. Last year the government tried to avoid an appearance of this by manipulating their railway accounts; but the plain fact is that our debt is accumulating, and our railway deficit has been some $106,000,000 a year for the past four years. And, with less business to provide a revenue for the roads, with factories closing in large numbers, the situation is indeed serious. According to the Minister of Labour (Mr. Murdock) the number of factories closed last year totalled 1,300 while the leader of the opposition (Mr. Meighen) puts it at 2,200. In any case unemployment is prevalent throughout the country, and our people are going to the United States at the rate of 200,000 a year.


James Murdock: The hon. member will
find no figures nor statement of mine showing that the number was only 1,300.


Leon Johnson Ladner: Perhaps it was more than
that; I may have made a mistake.


James Murdock: The figures are all in
Hansard and speak for themselves, and I would suggest that the hon. member quote facts and not fancies.
Mr. LADNER.: I suggest that the minister take some of that advice to himself. I never heard a more absurd contention than the Minister of Labour made when he compared business failures in 1914-15, war years, with business failures in 1923-24; and when I asked him whether he thought it was possible to make a comparison under those extreme conditions he said that the periods represented respectively a typical Tory rule and a typical Liberal rule. When arguments are founded on such a basis they are too absurd for consideration.


James Murdock: The hon. gentleman will have much difficulty in showing, either in unrevised or in revised Hansard, any such statement on my part. All I ask of him is to quote the facts. All that the Minister of Labour undertook to do was to submit the figures for what they might be worth; he simply said that there were more failures in 1914 than in 1924, and hon. gentlemen could draw their own conclusions from that as to what the causes might be. The minister made no such statement as the hon. member a few moments ago accused him of having made.


Leon Johnson Ladner: If I understood the minister lightly, the purpose of his figures was to show some relationship between ithe failures and the party that was in power at the time.


James Murdock: Not at all.


Leon Johnson Ladner: What other purpose was
there in submitting the figures?


James Murdock: To show a comparison between the two periods that hon. gentlemen opposite have been referring to so frequently with respect to failures.


Leon Johnson Ladner: But after showing the
comparison what results do you have? It is perfectly! clear. 1 I asked the Minister of Labour the reasonableness of making such a comparison, because it occurred to me to be unsound, and I do not always find him so illogical. I think I am perfectly right in my contention. Now, with the conditions I have mentioned and business depression, there is another thing the Minister of Labour sought to prove by a line of figures reaching from here to Mars, some of them bearing no relation whatever to what he was dealing with. He sought to prove that business was good in this country. Well, you have only to ask any business man whether business is good, and he will tell you it is not.


James Murdock: Mr. Speaker, the hon. gentleman is again making a statement which is not true, although probably he does not know it. He can produce no statement of mine in Hansard undertaking to prove that business was good in this country. The only thing I did undertake to disprove was the line of misrepresentation from our friends opposite which indicated that business was so much worse in Canada than in the United States.


Leon Johnson Ladner: I listened to the address of the minister carefully, and from the way the figures were read it was apparent that his purpose was to endeavour to convince us that business was good in this country; that is, that the policy of the government was sound and conditions were going to get better right along. That was the idea behind his figures. I put it to the minister, as well as to any other member of the government, that he ask any banker, any business man, any farmer or any workman, if business is good in Canada. All our people know that business is not good in Canada. Of course, there is some reason for this.
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James Murdock: Comparative figures
sliow that business was better in Canada for at least three months last year than it was in the United States.


Leon Johnson Ladner: The trouble with the hon. minister is that he brings in support of ihis argument figures that do not prove anything. He endeavoured to make a comparison between failures in 1914-15 and in 1922-23. I do not see how any man dispassionately arguing the merits of the case can contend that it is fair to mate such a comparison, when we know that every large and small financial institution the world over was shaken to its foundations on the outbreak of war, particularly by the tremendous drive of the Germans into France, and naturally those businesses which were dependent upon credit were subject to the contraction of credit which the banking institutions necessarily put into effect, and that was the determining factor of those failures; they had nothing to do with government policies any more than the moon had.


James Murdock: Does my hon. friend
say that the two thousand eight hundred odd failures in 1914 were the result of the outbreak of the war?


Leon Johnson Ladner: I would not say every
single failure.


James Murdock: Most of them?


Leon Johnson Ladner: Many failures took place
as the result of the outbreak of war.


James Murdock: Do you know that any of them so failed?


Leon Johnson Ladner: Yes, I know of people who failed under those conditions. Now, I have endeavoured to point out our difficulties and obligations with respect to the railways, our serious situation with respect to business, and our extremely serious situation with respect to taxation which is driving capital out of this country. Now I propose to submit this proposition. The government is lacking in virility and courage in attempting to solve those difficulties, in fact it is taking no steps whatever to that end. I suggest that the policy which has been laid down by the Conservative party, through the resolution of which the right hon. leader of the opposition (Mr. Meighen) has given notice will relieve the situation. It is the revival, of course, of the old question of protection of our industries; it is an old question, but it is livelier to-day than it ever was in the past.
I see one hon. gentleman to my left smiling,

but I am going to give him some facts to ponder over, and I shall be interested to hear how he will reply to them. First let me put on record what this policy is. The right hon. leader of the opposition in his resolution says:
That, to meet the situation which has resulted from a strengthening in late years of the protective system the world over particularly in the United States; to give new life to industry and productive enterprise; to preserve and enlarge the Canadian market for Canadian farm products; to stimulate the development of Canadian resources by the Canadian people and thus create employment for our workers; to increase the traffic of our railways by which alone an all-round reduction of freight rates can be secured; and, as well, to provide added revenue and thus bring about a reduction of internal taxation, this Dominion requires an immediate revision of the Canadian tariff on a definitely and consistently protective basis.
That such revision should apply to natural products, such as farm produce, fish and coal, with no less thoroughness than to manufactured goods.
That to the same ends steps should be taken to conserve for Canadian development our essential and irreplaceable resources in material and power.
That while every effort should be directed toward the establishment of a system of preference for preference within the empire, no preference should be given at the expense of the Canadian workers, and all preferences should be conditional on the use of Canadian ports.
That a tariff commission should be appointed representative of the three great classes of Canadian industry, agriculture, manufacturing and labour and entrusted with the duty of studying Canadian tariff problems in their every bearing and of making from time to time such recommendations to the government as it deems in the general public interest, with the reasons therefor, and with power also, where it finds unfair advantage is being taken of protective duties, of making recommendations to be given effect by the government for removing or reducing tariff schedules or imposing special excise taxes upon products in respect of which such advantage is taken, and that its reports, findings, recommendations and reasons therefor be given to the public.
That to enable the products of Western and Maritime provinces to reach more readily the markets so developed, the special transportation burdens borne by those provinces should be shared by the whole Dominion, either by contribution to long haul freight costs, or by assistance in some other form.
We on this side of the House are thoroughly convinced of the soundness of that remedy.


William Charles Good: Would there not be a very
great addition to taxation-the taxation that he laments so much-if this policy were applied?


Leon Johnson Ladner: That is the fallacy and
delusion of my friends to the left. [DOT] The incidence of taxation is not necessarily upon the protected country. Is taxation higher in the United States? No. And why not? Because they have built a protective barrier around their industries that gives stability to investment of capital, that enables every manufacturer to start out in business on an equal footing with his competitor, knowing

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full well the situation he has to meet, knowing that he is not going to be confronted with the products of cheap labour froim China or Japan, or from the highly industrialized countries of Europe. And the competition within the domestic area of that protective system reduces prices to the minimum. These conditions naturally give increased wages to the workingman, better returns to the businessman, and prosperity to all, so that the people have the money to pay their taxes, and these taxes are a lighter burden on their shoulders than are the taxes of their icompetitors who do not enjoy such prosperity. I have learned: from a gentleman who has just returned from one of the southern States with a population of some three and a half million that recently the governor was lamenting the fact that they had a. debt of $69,000,000. There is an actual demonstration of the happiness and prosperity of the people south of the line.


Mr. WARNER:: Have not they a population of 112,000,000 to trade freely, with instead of our few millions?


Leon Johnson Ladner: Quite so. The hon.
member has put his finger right on the point, but perhaps he misses the further point as to how they got those 112,000,000 people. How did they get them? Why is your son or other relative or friend leaving Canada and going down there? Why do they flock into the United States from Europe in their thousands? It is because since 1828 the United States have had an average ad valorem duty around 41 per cent, and with small fluctuations up and down they have maintained that duty, and thereby they have given stability to their business concerns and have provided prosperity for the farmers as well. That is why the United States have been able to attract such a large population. As a result, wages are higher. And will any hon. gentleman say that the cost of living there is higher than in Canada? Statistical data shows the wages in the United States are not only higher, but the cost of living is lower, so there is a bigger margin for a man to save. Naturally, therefore, people flock to that country, and there is no necessity to advertise for immigrants. Similarly, if you discovered a gold mine up north you would not need to ask people to go there, you would find they would rush in by the thousand.


Daniel Webster Warner: Is it not a fact that the
per capita tariff in Canada is about three times as high as that of the United States? Why does that not bring people to our country?


Leon Johnson Ladner: The explanation is that
our people are importing a lot of goods while the United States have their own industries, (which manufacture land sell to their own people in the course of profitable business. I cannot understand why in this country, having regard1 to the national interest, we cannot have a protective system such as is followed1 in the other sixty-five nations of the world. Why can we not take a lesson from France, which is enjoying a great measure of prosperity and has increased its tarifl?


An hon. MEMBER:: What?


Leon Johnson Ladner: Yes, that is correct. I
have relationships with France that enable me to know. In the United States conditions in some parts are not, perhaps as good as they were. But all these countries have increased their protective duties and have made themselves self-sustaining nations. The incidence of taxation does not always fall on the importer; sometimes it falls on the outsider.
, Mr. HOEY:	Would my hon. friend say
that the per capita war costs of the United States compared with those of other nations have anything to do with their present prosperity?


Leon Johnson Ladner: Undoubtedly the United
States benefited by the war and gained considerably in actual wealth as a result. But wealth does not in itself make for prosperity; there have to be active business conditions in the community, and these depend upon the supply and demand, upon conditions which will enable business to proceed as it should. They may have all the gold in Christendom and yet not be prosperous. They must have trade. I have in mind just now an order passed by President Ooolidge the other day with regard to something that was being imported into the United States from Ontario. It was found that it could be produced cheaper in Canada and the industry had not been protected in the United States, and so the barrier was immediately put up in order that the United1 States might protect their own: industry. For one hundred and twenty-five years, we have been seeking to develop this country, with agents in Europe and elsewhere trying to get people here; we have been bringing them in on one side and letting them out on the other. But the United States is prosperous so that we may take a lesson from them as well as many from other countries in this respect.


Mr. PUTNAM:: May I ask a question?
Will the hon. member cite a protective tariff from the hand of man as a greater agency in
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drawing population to the United States than geography and climate from the hand of Providence?	t


Leon Johnson Ladner: Well, Russia has 253,000,000 people. Tlhere is no doubt that the climatic conditions of the United States may in themselves attract some people. But my idea is that the man in Canada or in Europe hears from his friends that 'he can earn more money in the United States. He has never been there; he has never been in the middle states and been frozen up-he does not know how unpleasant it is there, perhaps. So he says he is going where he can get work without difficulty, and that is the determining factor with most of the people who leave this country. Indeed, it is the determining factor with those who come to Canada

they come beacuse they think they can better their position. 1


William Charles Good: My hon. friend is arguing
that prosperity in the United States is due to the protective tariff and the duties. Would he not be equally logical in arguing that it is due to the large volume of their internal trade, or to a dozen other causes that might be stated?


Leon Johnson Ladner: I do not see how Canada
differs from the United States in that respect. We have internal trade. We have the "freedom" without the trade. There is no argument about that. The real prosperity in the United States is due to the fact that capital feels safe in its investment there; every man Who invests his money in business knows exactly the competitive conditions with which he is faced. He knows that he is not going to have unfair competition. He knows that Japanese and Chinese goods, made by labour that is paid ten cents a day, are not going to be dumped into the United States in competition with him, because he has the protection. So there is stability in that country; trade is regulated; there Is an ability to export in large quantities and to capture markets where people have not the good sense or the strength of mind to put up barriers similar to those erected by the United States.


William Charles Good: Does not my hon. friend recognize that as between Canada, and its geographical conditions, its population, and so on, and the United States, the differences are tremendous?


Leon Johnson Ladner: My contention is that people have gone to the United States because they can better themselves, and they can better themselves because they can find jobs that pay. That is why they have gone there. As

to geographical conditions, they are not so dissimilar. If they have cotton in the United States, we have timber in Canada. But the difference is this:	they manufacture very
largely their cotton in their own country, or have done of late years, while we send our pulpwood and other natural resources to them to be manufactured and to give employment to their people; whereupon they send the manufactured article to Canada for consumption.


Mr. ROBINSON:: Suppose that an intending settler in Canada or in the United States were to listen to my hon. friend's speech, which country would he settle in?


Leon Johnson Ladner: Well, he would probably have a desire to contribute his good judgment to oust the Liberal government in this country and thus bring nearer the possibility of his remaining within its borders.
Now, Mr. Speaker, if my arguments are sound at all, why is there this tendency towards low tariffs? My submission is that it is entirely because of the Progressive party, and very largely their views from a purely economic point of view are sound. They say: We produce wheat in our country; we sell in the markets of the world and we buy in a protected market; therefore if we can eliminate the protective duties we may get our goods cheaper and have a bigger margin of profit or be able to sell more wheat in the markets of the world. That is a hard argument to answer from the economic point of view. If the country is to remain entirely agricultural in its character, the argument is a good one. But let us consider for a moment what element in value exercises this dominating influence upon Canada's fiscal policy. I have made a calculation from information furnished by the Bureau of Statistics, and I find that in 1924 the gross agricultural production of Canada was valued at $1,453,000,000. We are dealing, you will note, only with the one activity of agriculture. The value of wheat and wheat flour exported was $327,000,000, or 22 per cent of the total agricultural production. So that this 22 per cent, representing the views of the prairie provinces through the Progressive party in this parliament, are dominating the government and' the fiscal policy of this country. There is our trouble.


Mr. FORKE:: You will have to remove
the Progressives; that is the only thing to do.

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Leon Johnson Ladner: No, they are too good
fellows to remove. But my contention is that-


Daniel Webster Warner: May I ask a question
right there?


Leon Johnson Ladner: Does the hon. member
disagree with me on this point?


Daniel Webster Warner: Would the hon. member
put a duty on wheat in order to 'benefit the farmers of Canada?


Leon Johnson Ladner: No, I would not. Personally I do not know much about duties, nor,
I think, do other hon. members know very much about them. These are things that should first be decided by people who do know, by a scientific board that will adjust our fiscal policy for the development of this country, and not for the development of any other country.


Mr. GARDINER:: The hon. member has
stated that wheat and wheat products exported amount to $300,000,000, or 22 per cent. Will he tell us what the total agricultural exportation was, including animal and animal products?


Leon Johnson Ladner: I have not the total agricultural exportation, as I did not think it of importance for this reason: the markets of the United States for our major products have been largely cut off, and our products are now going to the Old Country and other countries where they have low tariffs and do not send back to us similar goods. This has relationship more with the United States.
In Canada we have manufacturing business to a very large extent. We have our minerals, and the business and industries incidental to them. We have our great forest products, lumber, pulp and paper. We have our Shipping interests, and our fisheries, to which there is also a manufacturing end. We have our trade by exporters and importers. We have financial houses, and we have other activities of a diversified character in which our people are engaged. Now my point is this: I do not think it is sound or in the interests of this country that 22 per cent of one industry should control the fiscal policy of the entire country affecting all these other industries.


Robert Gardiner: Will the hon. member
take the pains to look into the question of the total exports of Canada? If he does, he will find that agriculture is responsible for more than half the total exports of this country. Will he then say that agriculture dominates, though representing only 22 per cent?


Leon Johnson Ladner: I did not look into those
figures.


Robert Gardiner: Why don't you?


Leon Johnson Ladner: I did not have the benefit of the advice of the hon. member at the time. If I had had the benefit of his wisdom before, I might have got those figures.


Robert Gardiner: I will get them for you.


Leon Johnson Ladner: But it does not make a
particle of difference. As a matter of fact, I believe there is some confusion as to just what is included in the figures of agricultural exports; I am only speaking from memory. But even if half our exports were agricultural products, he would stilt have to consider that we have a large number of other industries, mines and manufacturing establishments in this country which desire protection, and my point is that those who uphold this idea of low tariffs should not dominate the fiscal policy of this country where we are trying to develop a self-sustaining nation.
Mr. MILLAR,: In 1923, of the 400,000,000
bushels of wheat produced, what percentage was exported?


Leon Johnson Ladner: I have the figures here
from the Bureau of Statistics. I thought I had them handy. I have a letter from the chief statistician giving that data, but cannot lay my hands on it at the moment.


Mr. HOEY:: We could only consume six
bushels per head; that would be 54,000,000 bushels. So we -must have exported all the rest.


Leon Johnson Ladner: My data comes from the
Bureau of Statistics and is checked with the trade reports. I am certain my data is accurate because I have taken particular care with it, and I worked out the same data last year, and have compared this year with last, and I am certain the figures are correct. I want to repeat, for the benefit of hon. gentlemen to my left, with whom I have the most agreeable personal relationships, but with whom I disagree in the most decided manner on the fiscal policy that is best for this country, that the fiscal policy of Canada is to-day being determined by a small proportion of the agricultural interests, in total disregard of the manufacturing interest and all the other economic activities throughout the country. I say that is not sound, and although political expediency may justify and maintain that policy in force to-day, time and experience and the force of public opinion will! eliminate it because, if persisted in, it will ruin the country.
The Budget-Mr. Ladner


Mr. SPEAKMAN:: The hon. member has stated that a very small proportion of the country is endeavouring to dominate, and is dominating, the fiscal policy of the country to the detriment of the majority. Might I ask what proportion of the people of the country voted in 1921 for a much lower tariff than we have at the present time?


Leon Johnson Ladner: Sometimes the public are not informed of all the facts. Sometimes they hear so many stories, even from the lips of the Prime Minister of Canada, and if he were here he would ask me to show line and page, that they really do not know where they are at, and it depends largely upon the individuality of the man when they make their election. But the fact is that to-day they are feeling in their pockets, and in their business and in their affaire the effect of the policy which is prevailing in this country, and they are going to change it sooner or later just as they changed it in 1878.


Mr. COOTE:: Is the hon. member really serious in stating that it is his belief that the west is dominating the economic policy of the country?


Leon Johnson Ladner: Absolutely. I do not
think there is much question about that, and I do not think the hon. gentleman thinks there is much question about it. If it had not been for the Progressive party and their influence upon the government, the government wouid have had a higher tariff than we have now, but in that case the Progressive party would not have voted for the budget last year, just as they are voting against the budget this year because the tariff is not coming down. The government is between the devil and the deep sea. They promised one thing in 1919, and several members promised many things, and the Progressives say that they have practically the same platform as the Liberals, and the inevitable result is that the government are losing the confidence of the people.


Mr. MILLAR:: Which is the devil?


Leon Johnson Ladner: I do not like to be personal.


Mr. PRITCHARD:: I asked this question of the speaker yesterday, and I notice they have not got it in Hansard as I meant it, but whether that is my mistake or somebody else's, I am not going to say. The hon. member is trying to argue that by the government yielding to the Progressives we are in a much worse shape, particularly our industries, than we were in 1921 when the Conservative government was in power. If that is the case, how is it that the report of the Compensation

Board for the province of Ontario shows that the industries of the province of Ontario paid out in wages in 1924, $9,000,000 more than they paid out in 1921? In the face of that report, does the hon. member argue that we are in worse shape now than we were then?


Leon Johnson Ladner: I cannot vouch for the
accuracy of the report. I prefer to judge by studies I have made of statistical data, and by what I have learned through coming in contact with people doing business in the country. It is fallacious to say that because you have paid out more wages in one year than another, therefore all these things follow; they do not necessarily follow at all. There are a hundred and one factors to be taken into account. The actual fact is, and the hon. member knows it, that we are overburdened with taxation in Canada to-day, and business is not good. Even the Minister of Labour will admit that.


John Pritchard: The working men have the proof in their pockets, a/t all events, that they have $9,000,000 more to-day than they had in 1921.


Leon Johnson Ladner: Nobody is more pleased to hear that than I am, but does the hon. gentleman seriously suggest that business in Canada is good?


John Pritchard: It is better than it
was.


Leon Johnson Ladner: That is always the government's answer. Year after year they always say, it is better than it was. It is like a frog climbing up a well one foot at a time and slipping back two.


James Murdock: Would my hon. friend
indicate some country or countries in the world that are comparatively speaking better off than Canada?


Leon Johnson Ladner: Yes, France.


Some hon. MEMBERS:: Oh, oh.


Mr. CARRUTHERS:: Capital levy.


Leon Johnson Ladner: I had occasion to make
careful inquiries in order to get accurate information. The industrial conditions and the condition of the farmers in France are better than in Canada. It may be temporary, but the conditions in France and in the United States are better than the conditions in Canada. People go from Canada to the States.


William Charles Good: Is my hon. friend not speaking only >of the employment situation in France?

The Budget-Mr. Ladner


Leon Johnson Ladner: No, I am speaking of business conditions, exports, employment and wages. You can hardly hire people there, the demand for labour is so great.


John W. Carruthers: It is being done on borrowed money.


Leon Johnson Ladner: Lots of people run their
businesses in that way. Some of our Progressive friends have said that they were running farms on borrowed money but they were still happy.


John W. Carruthers: Is the value of the French franc and our dollar to be taken into consideration?


Leon Johnson Ladner: [DOT] The determining factor in the situation is the workman. He is working all day, comes home at night, has his food and clothing and something to put in the bank and it does not matter how you work out the value of the franc.
Hon. members were asking about duties a moment ago and I have a word to say about that question. I had an inquiry made in the Bureau of Statistics as to the ad valorem rates of customs duty on dutiable goods imported into Canada as compared with the United States respectively for the fiscal years 1870, 1880, 1890, 1901, 1911, 1923 and 1924. Now I think we can learn from the experience of others. The figures are as follows:
Customs duties on dutiable Canada United States
imports-	Per cent Per cent
!870	
20.9	47.081880	*	
26.1 43.481890	
31	41.411901	
27.5	49.6419H	
25.9	41.221923	
24.9	36.071924	
22.7	35.63
So that during the last fifty-five years the customs duties on dutiable goods entering the United States as compared with Canada have been from 50 per cent to 235 per cent higher than those in Canada. Yet when you go there to live, pay taxes, and buy your food and 'clothing, you pay less taxes, pay less for your food and clothing, you have more employment and are better able to save and put a little money in the bank. What further proof does any reasonable man want than that of the soundness of the policy?


Daniel Webster Warner: What does the hon. gentleman mean when he says that he pays more taxes here than in the United States?


Leon Johnson Ladner: If my hon. friend had
been here ia few moments ago he would have heard the figures I gave at that time.


Daniel Webster Warner: My hon. friend had
reference simply to the tariff taxes.


Leon Johnson Ladner: No, I have reference to
all taxes, the burden on the people. If the hon. gentleman wishes to take the income tax, I tell him it is from two to six times as much in Canada as in the United States.


Daniel Webster Warner: Will my hon. friend
permit me to make a statement?


Leon Johnson Ladner: If it is not too long, go
ahead.


Daniel Webster Warner: I have lived over there
and I know personally that my taxes were a good deal higher than they were when I came to Canada. At the present time they are higher all the way through in the United States than they are here. I know that because I have lived in both places, and I am acquainted over there now just as well as the hon. gentleman.


Leon Johnson Ladner: Perhaps it is some years
since my hon. friend lived there. I have my information on good authority, not guess-work. It is vouched for by people who know the facts from accurate data.


William Charles Good: Before my hon. friend proceeds, would he not think it much fairer to make the comparison with rates on total imports, rather than on dutiable imports?


Leon Johnson Ladner: No, I would not, because
in figuring out the customs duty, the thing which concerns us-that is if the incidence of taxation falls upon the consumer in the country to which it is consigned-is the amount you pay on the dutiable goods.


William Charles Good: In the case of a nation which admitted 95 per cent of the goods free and levied a duty of 100 per cent on the balance of 5 per cent importation, would it be fair to compare that with a nation which has a flat rate of 10 per cent on all imports? Does the hon. gentleman not see that in one case they paid a tax of 100 per cent duty and in the other case they paid only 10 per cent? Does the hon. gentleman not see the point?


Leon Johnson Ladner: Yes, but you can work
these things out in different ways. I have worked it out according to the manner in which the authorities work it out when they want to get at the true facts of the case. I have been told the proper way to figure it out is the method I have adopted, and I do not think there can be much argument about it.
The Budget-Mr. Ladner


Robert Gardiner: Is there a higher duty collected per capita in the United States than in Canada?


Leon Johnson Ladner: I have not the information on that point.


Robert Gardiner: My hon. friend lacks
a lot of information he should have.


Leon Johnson Ladner: The hon. gentleman lacks a good deal of information too, or he would not be advocating the idea he is now propounding. It is very easy to ask about an isolated case which particularly appeals to the questioner, but I do not pretend to be a walking encyclopaedia,


Robert Alexander Hoey: Can the hon. gentleman tell
us how much higher the duties were under the Conservative government than under the Liberal government?


Leon Johnson Ladner: I am not talking about
party politics. I say the Conservative party never did impose a protective tariff in this country, and they would have been better off if they had done so.


Robert Alexander Hoey: Why did they not do so?


Leon Johnson Ladner: I suppose they were trying to be friends with the Progressives, and this government will come to the same disastrous end if they maintain that unholy alliance.
In submitting the proposals which I have presented and the ideas which I have advanced, I have done so not merely because it is in the interests of Canada, but. because in British Columbia it is of very special and great importance. British Columbia is the third largest manufacturing province in Canada. We have 2,407 industries, employing 23,700 employees, in which there is invested $210,000,000, producing last year $163,000,000. That is the business of manufacturing. Then we have the business of mining, the total results of which last year amounted to $49,000,000. Our greatest industry is lumbering and pulp. We have invested $190,000,000 in sawmills, pulp, paper and logging. The export trade after eight years has increased from 43,000,000 feet to 500,000,000 feet. There are 40,000 people employed in the lumbering business and allied interests, with a total payroll of $50,000,000 a year. We are not lacking in agricultural activities. We produce $61,000,000 in agriculture and in shipping $23,000,000. Our shipping business is developing. We have forty-two regular steamship lines running out of the city of Vancouver.
These facts : disclose diversified interests. British Columbia is a miniature Canada, and the people who live and who are engaged in

business in British Columbia know full well if the province is to develop just as Canada is to develop, we must as far as possible manufacture the raw products in this country instead of exporting them to other countries to build up their cities and towns and to provide work for their workmen. We are confronted daily with that situation. A large quantity of our raw material goes across to the state of Washington where our minerals are put into smelters and our logs into the lumber industry. But the provincial government, realizing the advantages to be derived from stopping undue export of our raw materials, have imposed restrictions upon the export of logs, so that the American investor has seen fit to bring his manufacturing business into British Columbia and to do his business there. In British Columbia, as I have said, we have a miniature Canada; we have diversified interests. We want to provide business or employment for different people, for the farmer, the miner, the fishermen and people of that kind.
Let me say a word about the Australian treaty. It is difficult to know why the government has not taken a more decided and active interest in the Australian treaty. We are especially interested in British Columbia because we expect to benefit by it, chiefly as regards the salmon industry. The Canadian Manufacturers' Association, canned salmon section, sent this telegram to myself and no doubt to other members from British Columbia. It is in these words and they are significant: Failure of government to ratify Australian treaty owing to opposition on part certain members parliament to proposed increased duty on dried fruits-
It seems to me I know where that comes from.
-from other than Australian sources will have effect on British Columbia salmon canners of depriving them of very substantial market for their product in Australia. That market heretofore supplied principally by American canners and opposition to proposed treaty if successful will react exactly in manner hoped for by American interests in enabling them continue dominate Australian market as they did in New Zealand prior to our securing preference there. Trust you will use best efforts with opponents' treaty in House in interest securing largely increased market for Canadian salmon which would inevitably follow treaty adoption.


Mr. KING (Kootenay):: Is it not a fact
that my hon. friend's leader (Mr. Meighen) publicly opposed the treaty with Australia in a campaign in British Columbia last fall?


Leon Johnson Ladner: I have never heard of
such a thing. The probability is that he questioned the delay of the government to act. The government have failed in initiative. If they do not want the treaty, they should say: No, we do not want the treaty, and then men carrying on business with Australia would know

The Budget-Mr. Ladner
what to do and make their contracts accordingly. It is the old question of vacillation, lack of action. They are in the balance. They know who their masters are and they stand there in fearful delay that is prejudicial to the interests of this country.


John Millar: Does the hon. member
favour the treaty?


Leon Johnson Ladner: Yes. I favour any trade treaty that is reasonably worked out as good for the country.


George Gibson Coote: Does the hon. member really think it fair that the people of Canada should be asked to pay more for raisins just to benefit the saknon canners of British Columbia?


Leon Johnson Ladner: That is the same old fallacy and delusion as regards free trade. It all comes down to this:	If you put a tariff on,
you pay extra money. The incidence of taxation does not always follow that. The amount of money the hon. member would pay for the currants 'he would eat would be disproportionate entirely to the benefit we would receive through increased production in canned salmon. Of course, it is a difference of opinion.
I wanted to say a few words on the oriental question, but my time is limited. We have had advocated in the country and here with the government certain measures with respect to restricting the activities of Chinese and Japanese in British Columbia. I realize, in speaking on a matter of this kind, it is a delicate question and requires mature judgment to work out the best method of safeguarding the interests of Canada. In my judgment we should not allow orientals to come into British Columbia. We do not want them in British Columbia. They cannot be assimilated into the economic activities nor into the social life of our country. They are not inferior, but they are incompatible in temperament. As regards those Chinese and Japanese who are in British Columbia now, my judgment is that it is difficult to control by legislation their economic activities. If you restrict the number who are allowed to have fishing licenses for salt herring or some other fish, you eliminate four or five hundred Japanese out of that industry. They must live and they have the right to freedom in this country to engage in something. They will exercise that by going into some other industry. They have gone into the business of growing berries, and now the Berry Growers' communicate with us-and I have some communications from them-saying that it is not right that Japanese and Chinese
should work in competition with the berry growers, and they think they should be taken out of this industry by legislation. So if the government pursues a policy of legislating the kind of business in which these people shall not engage, they will go into some other kind of business. They will go into farming. If they are legislated out of farming,, they will work at something else. In other words, acts of parliament to control economic activities of that kind are futile as aigainst the economic laws. When people are in our country with limitations of reason and judgment and after certain exemptions are given to special oases, it is consistent with the dignity of Canada and the interests of our relationship as a nation with the other great nations with which we expect to establish trade and commerce, that we should be careful in passing legislation of that kind. It is not effective. It assists, let us say, fishermen by taking a certain number of orientals from that industry, but it hurts another group of men engaged in another business. I have not quite finished and I would rather conclude my remarks after eight o'clock.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock. PRIVATE BILLS



CONSIDERED IN COMMITTEE-THIRD READINGS

[Stage Direction]
Bill No. 39, respecting Joliette and Northern Railway Company.-Mr. Denis (Joliette).
Bill No. 40, respecting The Ottawa Electric Railway Company.-Mr. Chevrier.

[Stage Direction]
The House in committee on Bill No. 21, respecting the Marconi Wireless Telegraph Company of Canada.-Mr. Oasgrain-Mr. Gordon in the chair.
On section 4-Power to carry on telephonic communication.
George Perry Graham: Does the amendment in
connection with this section provide for control of telephone tolls by the Board of Railway Commissioners?


Mr. BOYS:: That is dealt with.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.
Private Bills

[Stage Direction]
The House in committee on Bill No. 35, respecting The Mutual Life Assurance Company of Canada-MT. Mewbum.-Mr. Gordon in the chair.
On seiction 1-Board of directors.
Mr. McBRIDE:: I move to amend this
section as follows:
t Tlmt the following words be inserted after the word "law" in line 22, on the first page of the bill: provided that such by-law shall be confirmed by the regular annual meeting of the members of the company.
I can see no reason why this amendment should not be approved of by this committee.


Mr. MEWBURN:: I do not wish to take advantage of any technicality but I do not think that the amendment is in order, under the rules of the House, one day's notice not having been given. However, I do not press the point. I cannot see the force of the amendment. This concern is entirely a mutual company having no dhare capital. At the last annual meeting of the company a resolution was passed unanimously by the policy-holders to the following effect:
That the board of directors of the company be and they are hereby authorized to apply to the parliament ot Canada on behalf of the company for an act to amend the act of incorporation of the company so as to empower the board of directors from time to time by by-law passed and approved of by the votes of two-thirds of the members present or represented by proxy at a special general meeting duly called for considering the by-law-
And so on. TV e are not asking for any additional rights or powers or favours not accorded to a stock company under the Companies Act or under the Insurance Act. The Insurance Act provides that the directors of the companies empowered thereunder shall have power to pass certain by-laws giving them very full power, and the wording is almost identical with this. This is the way the clause reads:
The directors may from time to time repeal, amend or re-enact any such by-laws-
And such action confined at a general meeting

not the annual meeting-of the company, it is provided!, shall have full force and effect, and so forth. All we ask here is that the directors may pass a by-law determining that the number of directors shall not be less than twelve and! not more than twenty-two. The wording is identical with the terms of the Insurance Act to-day:
The number of directors shall be determined from time to time by by-law passed and approved of by 
the votes of two-thirds of the members present or represented by proxy at a special general meeting of the members duly called for considering the by-law.
If the directors pass that by-law, as it is within their rights to do, it must be confirmed by a special general meeting called for that purpose, and it would not be acted upon until the annual meeting, when the directors, whatever number was decided upon, would be elected, and the policyholders would govern themselves accordingly. I may say that the request has come from the policyholders themselves. This is a very large company operating all over Canada, and the policyholders have asked that the number of directors be increased in order that representation may be given to the west and to the Maritime provinces. I cannot see the force of the hon. member's amendment in the way of safeguarding any interests that are not already completely safeguarded. As I say, this clause is taken from the general Insurance Act. The bill was submitted to Mr. Finlayson for approval, and was also approved by1 the Banking and Commerce committee. I cannot see any objection to it.


George Perry Graham: There are no shareholders at all?
Mr. MEWBURN No. Under the Insurance Act of 1917 mutual companies were not dealt with,-why I am not prepared to say. That act provided for policyholder directors as well as shareholder directors. But this is a mutual company with no shareholders at all.


Thomas George McBride: Mr. Chairman I would
first -like to state that this section was earned in committee on division and that I did give notice of this amendment, but somehow or other it was overlooked and was not printed in the Votes and Proceedings. I cannot see why anyone should object to the amendment. It simply provides that such by-law shall be confirmed by the regular annual meeting, of which all the members of the company have been notified. When a special general meeting or a special meeting is called it is merely advertised in some of the local papers. I wonder how many people here or anywhere else read such advertisements? I do not think anybody does; indeed, very few have time. I do not say that they would do so, but in the absence of this proviso a few directors could get together and appoint other directors and have a monopoly in the management of the company, and if it was a paying proposition they might appoint their friends and relatives to easy jobs. I am not sent here to look after

Private Bills
the insurance companies, I am sent here to look after the working people of my constituency, and I think it is only right that I should take exception to this clause. I do not see why any directors should object to their actions being reviewed by the annual meeting and there approved of, or rejected. That is all I ask by this amendment. The directors can pass all the by-laws they want to, but when there is a general annual meeting 1 think all those by-laws should be subject to the approval of that meeting. Why should the directors object to such approval if they want to act fair and square with the policyholders? If they are working in the interests of the company, what have they to object to in the annual meeting passing on their actions? Why should they attempt to do something Which they know the annual meeting will not approve of? I cannot see any reason for opposition to this amendment. As to Mr. Fin-layson of the Insurance department having approved the bill, I took it up with him and he said he saw no reason why this amendment should not be inserted as a safeguard.


William Alves Boys: Does my hon. friend contend
that the directors are to be appointed at the special meeting of the company?


Thomas George McBride: As far as I am concerned,
you can appoint directors at whatever time you like, so long as their appointment has to be approved of at the annual meeting.


William Alves Boys: My friend misunderstands me. I gathered from his remarks that he was of opinion that if this clause carried the company would be able at a special meeting not only to fix the number of directors but to appoint them. If that is his view I think he is in error. All that can be done at that meeting is to decide the number of directors, and at the annual meeting their election takes place.


Thomas George McBride: All I ask, Mr. Chairman,
is that whatever they do be subject to the vote of the annual meeting.


William Alves Boys: That is the way it is now.


Thomas George McBride: That is the purpose of
the amendment that I asked to be inserted, and that is what the hon. member for East Hamilton (Mr. Mewburn) is objecting to. I think I am only asking for what is right and proper. We have had samples of these insurance companies. I remember an insurance company in Vancouver which went under, and a very close friend of mine lost thousands of dollars. The company failed because a few of the directors secured control and appointed their friends to various positions at fancy
salaries. Then the Bank of Vancouver became defunct under somewhat similar conditions, and the most recent example is the Home Bank. We cannot be too careful in erecting every possible safeguard against a repetition of such failures.


Henry Herbert Stevens: Mr. Chairman, I quite
agree with my hon. friend (Mr. McBride) that we ought to be very careful to see that the interests of policyholders or shareholders are properly and adequately protected. It should be borne in mind that there are no shareholders in this company, only policyholders. The annual meeting is called, at which the general business of the company is transacted. One of the most important functions at that annual meeting is the election of directors. Let us get the background clearly before us. I think we are all agreed that we want legislation passed that is uniform and, as far as possible, free from beclouding clauses that might be capable of various interpretations. Consequently parliament in its wisdom passed what we know as the general Insurance Act of 1917. That act is supposed to be in the very best possible form. Like the Bank Act, it is revised periodically, and, as many hon. members will recall, it was revised very carefully a year or two ago.
I want to draw this to the attention of the committee. This company, which in years gone by was not under the general Insurance Act, is by this bill brought under it; that is, the company willingly places itself under the act, so that all the regular provisions of that act apply to it. In this case the original charter provided for the appointment of a certain number of directors, the maximum being twelve. Now it is desired to fix the minimum at twelve and the maximum at twenty-one, bringing it into harmony with the general Insurance Act. And it does something further. This company-and I say this not for the purpose of advertising the company because I happen to be a policyholder- this company is one of Canada's most outstanding insurance companies, and it is one of the best managed. It wants to come into harmony with the general Insurance Act and, furthermore, it wants to make its directorate more representative. I understand that the policyholders of my own province have expressed a desire to have a director on the board, and I think a similar desire has been expressed by policjdiolders in the province of Quebec, where it is desired to have two directors, one English speaking and the other French speaking. This is desired in order
Private Bills

to make the board completely representative of the whole Dominion. The clause under discussion provides particularly for the fixing of the number cf directors at a special general meeting. The general Insurance Act, and nearly all if not all the provincial companies acts, provide that special general meetings shall be called for special purposes. That is, it is considered to the advantage of the shareholder to provide that for certain purposes special general meetings shall be held1, rather than to crowd all the business into a single annual meeting.


George Perry Graham: Does not the act provide that the business of the special meeting shall be mentioned in the notice?


Henry Herbert Stevens: Yes. The advantage of a special general meeting is that you can transact only such business as is designated in the notice by which it is called; consequently notice must be given. The question arises about the adequacy of the notice. What my hon. friend has said about people not reading the newspapers applies to all other matters as well as to this. The only thing we can do is to provide a reasonable safeguard, so that we call for notice in certain newspapers-adequate notice; reasonable notice.


Mr. NEILL:: Is there not personal notification to each shareholder or policyholder in the case of the annual general meeting?


Henry Herbert Stevens: The notice for the annual meeting is sent out with the notice regarding the due date of the renewal premium. We have renewal notices going out during the entire year, starting, we will say, the day after the annual meeting and continuing right up to the time of the next annual meeting. If it was found desirable say in November to call a special general meeting to change the number of directors, and the annual meeting was in March, all the policyholders who had been notified before November by the process I have mentioned would have to be notified again in writing, at heavy expense; otherwise they would not have notice of the special meeting or of the business to be transacted thereat. So here is what occurs: Notice is given through the press; the special general meeting is held; the number of directors is fixed. It may be asked, what safeguard of their interests have the policyholders? That, indeed, is the question my hon. friend very properly puts. I submit they have this safeguard: At the general meeting which will follow later, the election of directors takes place. If it is found at that general meeting

that during the year the directors have done what my hon. friend suggests they might do, then the policyholders have the opportunity of turning out the whole board and electing a new set of directors. The directors of that year, committing any faults, must face the policyholders or the shareholders at the annual meeting; they have no possibility of escape.


Mr. HODGINS:: Is it not the case that
only a few retire each year? The policyholders cannot turn all the directors out at once, can they?


Henry Herbert Stevens: One-third retire each
year. I submit, first, that the bill, after its consideration in the Banking and Commerce committee, is considered to be in harmony with the act. Secondly, the Superintendent of Insurance was adked in regard to the matter. I do not think his name should be dragged in as a final authority, but he is called upon to safeguard the technique of our legislation and advise whether it is entirely satisfactory; and the bill has his approval. The bill places the company entirely under the Insurance Act, and the shareholders, or the policyholders in this case, are protected through the election of directors at the annual meeting. I submit that the bill should pass as it came from the committee, unless there is some very strong reason to the contrary.


Mr. ROBB:: I may say on behalf of the
department that we regard the bill as it now stands as affording every precaution on behalf of the policyholders, so that my hon. friend is quite right in that respect. But I would also like to say on behalf of the department that we cannot see any objection to the amendment of the hon. member for Cariboo.


Alan Webster Neill: The hon. member (Mr. Stevens) drew our attention to the fact that this bill brings the company under the Insurance Act. Section 5 tells us that. Someone else stated that the Insurance Act was a very carefully thought out act, made applicable after long experience with all insurance companies. This company is prepared to put itself under that act, but like a great many of these companies they are not satisfied to be under the general act; they want a little more for their money than anybody else gets. The same thing occurs in reference to the Railway Act. I do not know whether we have a model federal Railway Act, but I know in British Columbia we have a strictly drawn up, carefully agreed upon railway act, applicable to every condition; yet practically every railway company that asks for a charter wants to get more

Private Bills
privileges than the general act affords. This company is not satisfied with coming under the general Insurance Act as practically all others do; they want more special privileges; they want to get what other companies cannot Obtain. Something has been said about notice. There is no doubt that a newspaper notice has not the saime effect as a direct personal notice to every policyholder or shareholder, which is the method adopted in the case of the annual general meeting. The hon. member (Mr. Boys) pointed out that this by-law only allows the company to determine the number of directors-in other words to increase it; and he says no harm, can be done because while they may so determine the number of directors they cannot appoint them until the next annual meeting. Well, what is the use of changing the number of directors in say, July if, as the hon. member says-and I presume he speaks with knowledge-they cannot be actually appointed until the next annual general meeting in January?


William Alves Boys: I have not studied this bill
at all; I am not a member of the committee; I have no interest -whatever in the company in question. I was prompted to say what I did because of the remarks of the hon. member for Cariboo. I was of the opinion from what he said that he thought the effect of this amendment would be to permit the election of directors at the special general meeting. He thought the meeting might not be well attended and that a few directors might get together and appoint friends of their own. I merely rose to make sure that that was his view and to correct him if it was wrong. I believe it is wrong, and I want to try to show that I am right in that contention. Let us consider the section for a moment; and I shall confine myself to the section under consideration. It says:
The property, business and affairs of the company shall be managed by a board of twelve, fifteen, eighteen or twenty-one directors. The number of directors shall be determined from time to time by by-law passed and approved of by the votes of two-thirds of the members present or represented by proxy at a special general meeting of the members duly called for considering the by-law.
Now that is what they may do and that is all they can do. It must be manifest, I think, to every member of this House that they cannot at that meeting elect their directors. They merely determine what the number shall be. Now let us read the next few lines:
The company may, by the said by-law, provide that the directors or any of them, shall be elected for one,
two or three years, and that a certain proportion not less than one-third, shall retire annually.
That is the former provision, as members will see by looking at the marginal note, where they will find the veiy same provision. So there is no change in that respect. Now we come to the main feature, and this is what I would ask my friend from Cariboo (Mr. McBride) to look carefully at. I think he will at once see he is in error:
At each annual meeting there shall be elected a board as determined by by-law aforesaid, but in no case chall such board consist of more than twenty-one nor less than twelve directors, all of whom shall be eligible for re-election.
I admit that the point that was raised subsequently is a different proposition. It may be said that if that be so, and you cannot elect until the general meeting, why not wait till then. But is it not desirable that they should know before the annual meeting the number of directors to be elected? It seems to me that if I were a member of the company, I would like to know when I was attending the annual meeting whether or not we were to elect twenty-one, eighteen or fifteen directors, and to know what the provision of the by-law was. I cannot see the slightest harm when you have control, because, as has been mentioned, if there was the slightest effort upom the part of a group at the special meeting to control, they could not do so. At the most they could fix at the special general meeting the number to be elected, and when the annual meeting took place, the shareholders attending there would be in control of the situation.
Now if the company themselves want this legislation, and they do, as has been shown by the member for East Hamilton, I cannot see why we of the House of Commons, particularly those of us who have no concern with the company, should in any way try to interfere with the desires of those who are the members of the company and whose money is in the company.


Mr. CARMICHAEL:: I was one of the
members of the committee when this bill was up, and I recall this same point being raised in the Banking and Commerce committee. To my mind, the whole issue seems to rest on the advertising that is done. In regard to the passing of the by-law, provision is made that it may be passed at the special general meeting. Now the advertising for that meeting, according to subsection 2, has to be in one or more newspapers published in the city of Toronto, and in such other places as the directors think necessary, at least one month before the hold-

Private Bills

ing of such meeting. That is the extent of the advertising necessary for a special general meeting, and at such special general meeting a by-law may be passed for changing the number of directors in the company.
The annual general meeting is advertised in a different way. In the case of annual meetings the directors "cause such notice to be printed and sent nut to the policyholders.' That is, the policyholder gets a notice of the annual meeting, and the proviso of the amendment is that the by-law as passed at the special meeting shall be confirmed at the annual meeting. Like the Acting Minister of Finance, I cannot see that there is anything really harmful or vicious with the proposed amendment. If the by-law may be passed at the special general meeting and there are only a few there, is it not simply a safeguard that it should come up again at the annual meeting, and if it is proper and in order be confirmed by the larger or annual meeting?


Henry Herbert Stevens: Let me point out to the committee this, that if this amendment carries, you do not correct the situation at all. You still insist that they call a special meeting, and you simply provide that the annual meeting shall confirm what the special meeting does. You do not escape the special meeting. The change is made at the special meeting just the same.
Let me point out alfeo what the general Insurance Act now contains, to show that this is not inconsistent with it; in fact, it provides a further safeguard. The general clause provides:
Directors may, from time to time, repeal, amend, or re-enact any such by-law: Provided that every such by-law, repeal, amendment or re-enactment, be confirmed at the annual meeting.
Now my point is that this particular clause as it has come from the Banking and Commerce committee is preferable in the interests of the shareholder to the clause in the general act; that is, it tightens it up a little, it improves it. It the amendment carries, you simply encumber the legislation with unnecessary provisions because you call the special general meeting in any case.


Alan Webster Neill: What are the provisions in
the general act regarding notice calling a special meeting?


Henry Herbert Stevens: No notice at all. The
point I was making is that the directors may pass the by-law-


Alan Webster Neill: Wha* are the conditions for
calling that special meeting? When it is a meeting called under the Insurance Act an

individual notice has to be sent to the policy holder.


Henry Herbert Stevens: I cannot lay my hand on
the clause at the moment.


Alan Webster Neill: That I understand is in the
Insurance Act, and that is the difference between a meeting called under the Insurance Act and a meeting called under this section of this bill.


Thomas George McBride: Not one of those who are opposing this amendment has attempted to say it is not right or proper. They are simply beclouding the issue, getting around it, and doing a whole lot of talking and taking up the time of the House. They know the amendment is right, and if they say what they know to be right, they would say so in my opinion. I do not know that I will take up further time. They certainly cannot convince me it is not right. Our Acting Minister of Finance says that he sees nothing wrong with it, and Mr. Finlayson, who is well paid by the taxpayers of this country, also thinks it fit and proper. He sees nothing wrong with it. Why, then, should we not carry it?
Amendment agreed to; Yeas, 54; Nays, 28.
Section as amended agreed to.
Sections 2, 3, 4 and 5 agreed to.
Bill reported, read the third time and passed.



THE BUDGET


[Stage Direction]
The House resumed consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Mieans, and the proposed amendment thereto of Sir Henry Drayton.
Leon Johnson Ladner: When the House took recess at six o'clock I had been discussing some questions of protection and had not concluded my remarks, when my friends askied some questions, being interested in the subject, or rather perhaps I should say they were not interested in it. I had intended to give as an example of the unreasonableness of the relative protective tariffs or the relative tariffs in Canada and in the United States in regard to the commodity of eggs. Our American friends in the state of Washington informed us that their chief market for eggs was the city of New York and the city of Vancouver. With their cooperative system they were able to send their

The Budget-Mr. Ladner
eggs into Vancouver against a duty of three cents a dozen, but when my friends in British Columbia desired to return the compliment by sending eggs to the state of Washington they were met with a duty of eight cents a dozen. We have a large quantity of eggs coming in from China. The hon. Minister of Agriculture (Mr. Motherwell) is supposed to have a Marking Act, or something by which he can restrict or limit that importation, but we find that he does not do so. Either his regulations are at fault or his free trade theories prevail. Nevertheless Chinese eggs are coming in and are a source of considerable comment and objection, on account of the unfair treatment of the people of our province.
I think perhaps the best example of the government's efforts to make fruitless the effectiveness of the law is disclosed in the Duncan report. The anti-dumping law was applied, and legitimately so, at the request of the producers of fruit. The duty was paid, and when everything had died down, so far as public disclosure was concerned, at the request of the combine the government calmly paid back, consistent with its free trade ideas, the anti-dumping duty, and the suppliers of fruit kept on sending it in, knowing perfectly well that they were dealing with the department in a manner that would enable them to escape payment of duty all the time by this questionable method. The facts are disclosed in the Duncan report. There has been no action. I have noticed that one of these very provinces decided that they would not take action so far as the Duncan report was concerned and stated that it was the responsibility of the federal government. No doubt the government will make their decision shortly.


James Murdock: Will my hon. friend
say which province he refers to?


Leon Johnson Ladner: I think it was Manitoba.
It appeared in a newspaper a day or two ago.


James Murdock: We have no advice to
that effect.


Leon Johnson Ladner: I am afraid the government will dilly-dally along, no action will be taken, and the trusts, combines and mergers will prevail, notwithstanding the good commencement in their restrictions. It seems to me that the practices as disclosed in the Duncan report are so reprehensible, so much in defiance of the law and against the will of parliament, that the government should and ought to act expeditiously in this matter 156i
and if the province does not intend to take action, the federal government should do so.
I wanted to say a few words on an important question affecting ' our province, namely the question of freight rates. Not seeing the Prime Minister in his seat at this moment, I believe that our friend, Mr. John Oliver is rapping at his door to gain entrance for consideration of this question, and as the Premier of British Columbia does not smoke and the right hon. leader of the government will not be able to give him a cigar, I am wondering what he will give him on this occasion. The freight rates question has been standing a long time. The government was going to bring down1 a great announcement, embodying the principle of some kind of Magna Charta, for the benefit of downtrodden Canada. But it has not come. They were going to remedy this freight rates question. The Supreme Court of Canada followed the law and made a decision which has caused confusion and distress in many places throughout Canada, so that business concerns are unable to make their plans and injustices are being practised from one end of the country to the other. I take it that freight rates have four main purposes, and I am quoting from a pamphlet of a Mr. Payne which seems to summarize the matter effectively: First, in the aggregate results, to provide for operating expenses; second, to earn fixed charges on outstanding liabilities; third, to yield a fair and reasonable return on capital investment, and fourth, to leave a credit balance for the purpose of needed additions and betterments. I think that will appeal to the reasonable good judgment of every hon. member; but we are not going to obtain those purposes by political freight rates or by cases of political expediency or political alliances by building up such an instrument of turmoil as the Crowsnest pass agreement, so far as it is applicable to-day. Every day we read in communications from the west and also from Ontario objections by boards of trade and other public bodies of all kinds. Yet we find no action on the part of the government. The House has been sitting for several months and very little has been done on this most important question. In fact, so far as I can see, very little has been accomplished in regard to any other question. We are just drifting along; we shall soon be in the hot weather and be running home, not knowing what we have done or why we have done it. It is interesting to note that, compared with other countries, freight rates in Canada, calculated on a basis of earnings per ton-mile
The Budget-Mr. Ladner

of railways, are lower than in any other country. They are as follows:
cent
Canada	 -987
United States	 1.125
Sweden	 3.830
Norway	 4.411
New South Wales	 3.202
South Australia	  3.105
Great Britain	 2.943
Brazil	 6.010
I give these in detail because I want the record on Hansard. Therefore, if we are going to accomplish the four-fold purposes that I mentioned a moment ago and maintain rates which are already low and retain our system in a position that it will not only meet the fixed charges but warrant onfidence on the part of the investing public, something must be done at the present time to grapple with the situation. We from British Columbia, believe; in fact, we know that for many years there has been an unfairness in the treatment of that province in respect to freight rates on many of our important articles. We have had a partial remedy. We have had the mountain scale of rates reduced by one-half, and this clearly indicates that the principle of the mountain scale of rates is wrong. We say that the balance should be eliminated. There are other injustices, inequalities, which should be remedied, and for my part I would not like to see parliament make political freight rates for either British Columbia or any other part of Canada. You can make freight rates only by the advice and judgment of people competent to determine the question, and those people are the institution created by the late Laurier government, the Board of Railway Commissioners. I think it would be a great mistake if parliament attempted to deal with this question and to have brought to bear upon members of parliament as well as the government political influence which will be calculated only to bring about results suited to the interests of some particular section because it has political control. It will be a disaster for the country if we are faced with a situation of that kind.


Mr. KELLNER:: Was it not the railway
commission which established the mountain scale of which the hon. member complains, and was the railway commission not under the chairmanship of the present hon. member for West York (Sir Henry Drayton) at that time?


Leon Johnson Ladner: I do not think it was the railway commission that established the mountain scale of rates. My recollection is that this was done under the old system when the railways fixed the rates. They thought it cost

them more to build in the mountains. Now that we have the Canadian National, we find the mountain route is not more hilly than the prairies. The hon. member is mistaken in his statement. As regards the chairman of the board, I have no doubt the hon. member for West York who was then chairman of the board, carried out his duties with the same conscientious judgment and decision as he does in this House.


Donald Ferdinand Kellner: Will the hon. member
tell us just what experience or reason he has for thinking the present chairman of the Board of Railway Commissioners is an authority on freight rates? Has he ever had any experience in regard to freight rates?


Leon Johnson Ladner: I am not here passing
judgment on the personnel of the board. In this chamber we can discuss better the principles of these things and policies rather than individuals. If there is not a good chairman on the board, the government is here to rectify the situation. That is the 9 p.m. duty of no one else. I suggest to the hon. member that I doubt very much whether he or any of his friends, faced with the responsibility, would place upon parliament the determination of the freight rates question in this country. I think they would prefer some tribunal qualified by experience in the matter to determine such a complicated question. I hope the government will at some time speak, because there is a patient and long-waiting public in British Columbia seeking to find out exactly the policy of the government on this freight rates question. The government is no doubt in a difficulty. They are no doubt face to face with their masters, and the Crowsnest pass agreement is one of the big things which my friends to the left would like to hold and carry back to the prairies and, without doubt, seek to get some political advantage out of in a contest. I speak quite sincerely when I say I hope and believe individual members looking to the interest of Canada as a whole will have the breadth of mind and altruism of spirit that they will be disposed to leave a question of that kind outside of the realm of politics and entirely within the realm of a body capable of dealing with it. Certainly parliament is not such a body.
Before sitting down, I should like to draw to the attention of the government the fact that the amendments to the Pension Act are still not brought down. I should like to remind the Prime Minister (Mr. Mackenzie King), if he were here, of that challenging and defiant speech which he made on the

The Budget-Mr. Chevrier
last day of parliament, when parliament was about to prorogue and nobody could answer him, as regards what he was going to do with the Senate as they had done such grievous injury to the soldiers of Canada, when in fact, by the deliberate intention of the government, I believe, the government deferred bringing that measure down in the House and placing it before the Senate so that the latter could have no time to discuss and pass it. This session of parliament is passing on. We assembled on the 5th February; two months and a half have gone by, and the measure is still within the confidence of the Minister of 'Soldiers' Civil Re-establishment (Mb Beland). Communications have come to me and, no doubt, similar ones have come to other hon. members from soldier bodies throughout Canada asking what is going to happen and saying: Do you calculate the Senate is going to interfere with the legislation? But the government refrains from taking steps so that they could place this legislation before the Senate and enable the Senate to consider it and so that they could charge them with the full responsibility of their act. I hope the government will make more haste this year than they did last, not leave it until the last days of the session and then blame everyone in the country but themselves for the fact that the legislation is defeated.
In this connection I want to say a word on a matter I have not heard discussed in the House and which sooner or later is bound to engage the attention of parliament, and that as the question of providing for those exservice men who through the technicalities of the law are denied a pension but who gave their sendees overseas and whose health in so doing was impaired. The time will come when that class of men and others in their old age will have to be considered by parliament and the people of Canada; we shall have to take into consideration those of our returned men who having given their services overseas now find themselves in a helpless and destitute condition, unable to provide for themselves. At that time it will 'be necessary in my judgment, and indeed it will be the duty of the people of Canada, to make provision for these men. I have advocated this before and I advocate it again to-night; and I trust that the government in considering legislation looking to this end will see fit to bring in some measure that will adequately take care of this class of our citizens. Finally, I would express the hope that the government will before long not only bring down those measures to which I have referred and in which the provinces are
interested and are waiting for some decisive action, but that they will show some decision in dealing with the many questions before parliament. I hope we shall have no more alliances between the government and our friends to the left, that the government will no longer show those hon. gentlemen undue deference, but rather that they will bring to the House legislation calculated for the welfare of the people of Canada.


Mr. E. R. E. CHEVRIER (Ottawa):: I
shall not endeavour to follow my hon. friend in all his meanderings through the labyrinth of figures which he has given to the House on the budget. My hon. and learned friend is a distinguished lawyer, and I could very well and easily juggle with the figures in the way he has done. But I am satisfied that no matter how he manipulates them he is bound to come to the same conclusion as the Acting Minister of Finance (Mr. Robb) has reached. One thing though that did surprise me, knowing the hon. gentleman as I know him, was that, genial companion as he is, he should put on the cloak of pessimism and treat this country in the way he did'. He made the statement that for some time past there has been a steady flow of Canadians into the United States. I have not taken the time to check him up in every detail, but I do know that the last report shows that 35,152 Canadians icame back from the United States in the period of eight months ending November 30 last. There is no steady flow of emigration from Canada into the United States. The hon. gentleman has said that one of the reasons why some of the European population did go there was that they were attracted by the news that came from that country. But it is equally true that some of our Canadians were attracted by the same news; although once they got there and spent a few months in the country they found it advisable to come back. For after all, as they found, there is no place like Canada to live in.


Leon Johnson Ladner: If 35.000 have come back
will the hon member tell us how many have gone over?


Edgar-Rodolphe-Eugène Chevrier: The balance is increasing on our side every day. The hon. gentleman will not dispute the statement that within the last few months they have been coming back at an enormous rate, and I for one know that in the city of Ottawa, where there was a scarcity of skilled mechanics two years ago, there are now more skilled mechanics than we can employ. The men

The Budget-Mr. Chevrier
are coming back continuously. I shall not go any further with the remarks of my hon. friend. Before proceeding I should like to say how happy I am to join with all the other speakers who have preceded me in extending to the A-cting Minister of Finance (Mr. Robb) my congratulations on the budget he has brought down.
I shall speak only on one or two outstanding features of the budget, for as I .agree with what the minister has said it would be useless to labour it at any great length or to repeat what has already been brought to the attention of the House. The most conspicuous fact brought out in the budget is the improvement which it shows over last year, while last year was the first fiscal year in a very considerable period when the budget had been balanced. And not only is the budget balanced this year, but we have a surplus of 81,800,000.	In making that statement the
Acting Minister of Finance rightly said, that the people of Canada should feel justifiably proud of this result, and I believe myself that the Canadian people, irrespective of political allegiance, will be particularly glad to know that our finances are being stabilized and improved. I feel quite confident therefore that when again we go before the people they will place their confidence in those who in a very short term of years have brought about such an improvement in the financial condition of this country.
There is another feature that strikes us in all this avalanche of figures. Notwithstanding the fact that the taxes have been reduced by some $50,000,000 odd the national debt has been decreased by $36,000,000. That is an achievement of which the Canadian nation should be proud; only in a few instances has it happened that the national debt has been reduced.
One matter of outstanding importance which I shall touch upon is the magnificent showing of the Canadian National Railways. I am sure the people of Canada look with pride on our National Railways and that they are grateful to the administration for the splendid manner in which the system has been operated. I am not one of those who believes in state ownership; but when we found ourselves in the position we were in with our railways, and when the policy of the government was announced and advocated and the government decided to give the railways a fair and honest trial, I made up my mind to do them equal justice myself. I am not yet convinced however that it is a good scheme; yet we have been loyal in our endeavour to help out the National Railways. And in that we have been seconded by a very capable board of

administration. I am confident therefore that if we continue that trust and loyalty in the Canadian National railway system; if we continue that administration; and if that administration continues to manage the system as it has managed it in the past, very soon the railways will be on a sound financial basis and probably the Canadian government will not be called upon to assist them.
I desire now to turn to something more .parochial: the budget serves that purpose in a number of instances. I might not have referred to it but a number of previous speakers have spoken about the Civil Service Commission. I am not going to speak at any length on that subject because my views upon it are quite clear; I have expressed them on a number of occasions. And they are .particularly laid down in the report of the civil service inquiry of 1923 of which there are over 1,150 pages. Unfortunately, I am responsible f,or .practically half of that volume. I have laid down there What I thought to be the true state of affairs. I say that the Civil Service CommissiQn is attempting to administer an impossible law. I believe that those who inspired that law did not realize at the time the consequences that would flow therefrom. I cannot conceive that anyone imbued with an elementary idea of efficiency, of assuring promotions according to merit, in all cases, at all times and at the least expense, would put on the statute books a law of that character.
There are .many aspects of it. It is a cast iron law, there is no flexibility about it. The deputy ministers are deprived of a large amount of their authority and are rendered practically powerless. I cannot blame those who are now endeavouring to administer the act; but I do blame those who placed it on the statute book; I do blame those who, when any honest endeavour is made to Correct and improve the act, for some partisan purpose oppose every amendment; I do blame those who, moved by some sanctimonious sentiment, consider the Civil Service Act as a holy of holies, against which no hand should be raised, not even with the view of improving it. The moment we say that we want to improve that law they reply, "Thou shalt not touch it." It is something like old King Tut's grave, that if you .place an unholy hand upon it you shall die. And in a number of instances the Civil Service Act has proved to be a King Tut's grave to the ambitions of a large number of civil servants.
The Civil Service Commission may be viewed from another angle, and that is with regard to the present salary revision. I say that 98 per cent of the civil servants earn every cent of their salary, just as much as

The Budget-Mr. Chevner
98 per cent of the employees of any large corporation fully earn their salaries. I say without fear of contradiction, for I know whereof of speak, that the service is not underworked, nor is it overmanned, but I say also without fear of contradiction that the service is underpaid. I know a certain number of gentlemen here will not agree with me, but had they lived in the city of Ottawa all their lives, had they themselves been employed, as I have, as civil servants, had most of their relatives and friends been employed in the civil service, had they felt what the civil servants are feeling to-day, and what I felt then, they would not make the statements they are making derogatory of civil servants. The salary revision must be settled onoe for all, and it can only be settled when those who are charged with the administration of public affairs give it an honest and fair study. When they give to the Civil Service Commission and to the civil service that study which they merit, then those unwarranted attacks will cease, and those who came to scoff will remain to pray. They will say then just what the leading statesmen of Great Britain say about the civil service there; and the civil service of Britain is no better and no worse than the civil service of Canada. The British civil service is doing its work loyally for the country-just as much as the civil service of Canada is doing its work loyally by the country. The statesmen of Great Britain treat their civil service with the respect which it deserves; and the civil service of Canada is entitled to the same consideration. Now, what do the British statesmen say? I take this from the Ottawa Journal of April 2 1925:
The annual dinner of the British civil service recently took place in London and was as usual a brilliant affair. It was honoured with the presence of royalty and of the most illustrious personages of the realm. In the long list of distinguished guests were the Prince of Wales, the Prime Minister, the Speaker of the House of Commons, the Chancellor of Exchequer, the Foreign Secretary, the Lord Chief Justice, the Chief of the Imperial General Staff, and so on.
The Prince of Wales warmly eulogized the British civil service, and proceeded to say:
"It is difficult, if not impossible, for anybody to express in words the extent of the debt which this country owes to succeeding generations of civil servants, who, as government followed government, have never failed to serve with unquestioned loyalty and efficiency."
What difference is there between that and the loyalty and efficiency of the civil service of Canada?
In proposing the toast of "His Majesty's Civil Service," Premier Baldwin, after referring to the ephemeral life of governments and the permanency of the civil service, stated:
"It is a great pleasure for me to be present once more at your dinner and to be allowed the privilege of paying my tribute to the British civil service-the finest service of its kind in the world."
Had he seen the Canadian civil service he would have said, "One of two of the finest."
Amongst other things, Mr. Winston Churchill, Chancellor of the Exchequer, said:
"The British civil service upon the whole, and amongst many others, is the strongest and most enduring bulwark of the power and integrity of the British people."
Addressing himself to the civil service, Mr. Austen Chamberlain, Foreign Secretary, said:
"We remain to all eternity your grateful debtors."
And the Journal adds:
Such is the attitude of British statesmen towards the civil service. Very different is that of Canadian politicians towards our own civil service, which is the object of their constant attacks.
There is another paramount defect in the civil service law, in that the Civil Service Commission in their discussion of this salary revision are advised by their own officers, 95 per cent of whom have never had any practical experience in the working out of civil government, most of them having been taken into the Civil Service Commission without any practical knowledge of department work. Whatever knowledge they have acquired has been since they joined the staff of the commission. They are the ones that are charged with the reorganization, with the recommendations, with the determination of the accuracy of the reports. They are passing upon the qualifications of men and women, particularly of men, who have been in the civil service for thirty or thirty-five years, while these officials have been in their present positions probably no longer than since 1919. True, the deputy ministers, it may be said, are acting also for the civil servants and for the government. But theirs is a dual responsibility, and this brings me to what I consider to be a paramount defect-that the civil servants themselves are not represented in these deliberations that concern themselves most. I advocated the amendment of the act-it will be found in this report-to overcome this defect, but I am prepared to say that hon. gentlemen across to my left and to my right would immediately vote against such a resolution if I moved it here. I say that in all these deliberations the civil servants should be represented. I have advocated the introduction of something like Whitley councils. When I was in London I had a lengthy interview with the Speaker of the House of Commons, the Hon. Mr. Whitley, who inaugurated these councils, and I am corresponding with him. The main defect of our system is that in these deliberations everything is cut and dried and the civil servants

The Budget-Mr. Chevrier
themselves, the very people who are most vitally interested, are never consulted. Some hon. gentlemen may say that it is hard to please a considerable number in so large a service. Why, if say sixty thousand people in any large industrial concern were not taken into the confidence of the employer there would be much less harmony, very much more discord, than there is at present in the ranks of the civil service.
This salary revision question is a difficult one. I have given it considerable attention. I do not know what the recommendation will be of the Civil Service Commission. They may have made a recommendation to council or they may not; I do not know; but I have my own views on the subject and I will give them for what they are worth. I have consulted a large number of civil servants; I have conferred with heads of organizations; I have digested all the evidence and have come to my own conclusions. In doing so I have had in mind the principle of equal pay for equal work. I have not disregarded the status of married civil servants, in other words, those who are considered eligible for household bonus. But I do believe there should be no discrimination; the range of salaries dhould be increased for all. I find, however, that it would cost a considerable amount of money to provide what I thought would be a fair salary range and I have been obliged to dwindle it down-. Of course my remarks may not influence the Civil Service Commission at all, but at all events I think they are justifiable. I do not believe any one should start in the civil service at less than $900. The next class should be $900 to $1,200; the third class, $1,200 to $1,500; the next class, $1,500 to $1,860; and the next $1,860 to $2,340-doing away with the bonus. Everyone in that case would receive not what I consider an adequate compensation for the work which is being done, but at all events something that would be commensurate with the loyalty of the services.
There is a third point upon which I wish to touch; and I quote now from one of the memoranda that was submitted to me in this matter. Referring to the superannuation law, it says:
Although it is recognized as a very generous measure, providing as it does a competent allowance for the maintenance of the retired civil servant and an allowance more or less generous to dependents, it is yet susceptible of improvement.
It could scarcely be supposed that an act could be framed that would at once make equitable provisions for all the intricate cases existing in the service, and it is reasonable to suppose that the government is prepared to receive requests that amendments should be made to the act.
IMr. Chevrier.]
And it was on that understanding last year that I gave it the study and attention that I did. I shall not go into the suggested amendments at length, but will just refer to a few of them. For instance, the retiring age is a very important feature; the authorities agree that about sixty-five should be the age of retirement, and superannuation should be at the option of the employee at any age after sixty. The act as it stands now makes it seventy-five, and the result is that avenues of promotion are blocked to a number of civil servants. But a very obnoxious amendment -and I do not use that word with any disrespect-was added to the bill last year; it is one of the most drastic changes in the act. The House passed the bill without any amendment but in the Senate the four per cent provision was made applicable to the arrears of contributions. With the permission of the House I would like to read just one letter, which is typical of many others but which puts the whole thing in a nutshell. I quote:
Under the present conditions we have the option of surrendering one half of our length of service,, instead of paying the accumulated arrears of the five per cent abatement, plus four per cent simple interest on the same. This surrender of one half the unpaid years of service of course very materially reduces the chances of ultimately obtaining full pension, unless the employee is fortunate enough to be of an age which enables him to serve on long enough to complete the required thirty-five years for full pension, or seventy per cent of his salary.
May I interject here that I honestly believe that when that amendment was introduced no one who took part an the discussion had the slightest conception of the difficulty it was going to create, of the hardship it was going to bring about, of the impairment it was going to cause in a law designed to retire those who had reached the retiring age. I quote further from this letter:
However, when a man reaches the age of sixty years this is almost an impossibility, because the retiring age is set for sixty-five, and in exceptional cases for the age of seventy.
Now, here is the case. This civil servant says:
In my own case I have put in forty years of service, during the first thirty-five of which I paid no five per cent abatement of any kind-was not permitted to do so; but for the last five years I have paid this five per cent of my salary. The accumulated unpaid abatements together with the four per cent interest thereon amount, in my case, to about $6,000, which of course makes it out of the question for me to pay, and consequently I have to take the option of the surrender of one-half of my unpaid service. This as above stated, is thirty-five years, so that I would have to surrender seventeen and a half years, leaving me'with a similar length of service, together with the five years that I have paid; so that after forty years' service I am only credited with twenty-two and a half years on which my pension can be computed, and I have to take chances on being able to carry on for a few years
! i t !TI

The Budget-Mr. Chevrier
longer to try to attain as long a period of service for pension as possible; and as I am now in my sixty-first year the chances of obtaining the full thirty-five years of service for pension are almost impossible, as I could not serve for twelve and a half years longer even if I should be in condition to do so, as I should have passed the limit of seventy years of age.


Sir EUGENE FISET:: Did that official
not have the option of retiring under the Calder Act?


Edgar-Rodolphe-Eugène Chevrier: Yes, but as the distinguished hon. member is well aware, he was not entitled under that act to superannuation and the benefits attaching to it. He could have retired under the Calder Act, which was a generous measure, but that act had no superannuation features.


Eugène Fiset: You mean, for his family?


Edgar-Rodolphe-Eugène Chevrier: Yes. When I say, superannuation, I refer to all the features that go with superannuation. Under the Calder Act the civil servant was not given superannuation ; but superannuation means that he gets a certain amount every month and that after his death his wife benefits to the extent of one-half of what he had been getting. Under the Calder Act he got simply a lump sum.


Eugène Fiset: Oh, no.


Edgar-Rodolphe-Eugène Chevrier: I beg pardon, I am
wrong; the Calder Act was based upon the length of service, in relation to which a certain amount was given.


Eugène Fiset: The only difference between the Calder Act and the recent Superannuation Act is that the former did not provide for the family.


Edgar-Rodolphe-Eugène Chevrier: Yes, we are agreed on that. But the Superannuation Act does so provide, so that there is an immediate benefit, and that is the reason why we struggled so hard to get a superannuation law to replace the Calder Act-because there were superannuation features for tthe dependents after the death of the employee which were not given by the Calder Act.


Eugène Fiset: May I ask, as a
matter of information, how that four per cent provision would affect the man who retires, not under extraordinary circumstances such jas have been mentioned by my hon. friend, but in the ordinary case where a man has completed about forty years' service?


Edgar-Rodolphe-Eugène Chevrier: It does not apply to the Calder Act. Nobody wants to take the Calder Act, or very few do, if they can take
superannuation under the other measure, but they will be driven to taking the Calder Act if they have to pay such exorbitant amounts to come under the new superannuation law.


Mr. CALDWELL:: Is it not a fact that the Calder Act is now repealed?


Edgar-Rodolphe-Eugène Chevrier: They have until the 19th of July, I think it is, to elect between the two.


Thomas Wakem Caldwell: I thought the Calder Act expired in November last.


Edgar-Rodolphe-Eugène Chevrier: I am just going to ask that it be extended.


Thomas Wakem Caldwell: I think we will see that you do not extend it.


Edgar-Rodolphe-Eugène Chevrier: I am awfully soriy that my hon. friend should take an anticipatory view. Probably if I had given expression to some feelings, I might have said considering the success I have had in past attempts to modify the law, my proposition to extend it would have ended in King Tut's grave.


John Millar: In the case of a civil servant who has retired and is receiving a pension, and who afterwards takes a remunerative position, does the pension cease or continue?


Edgar-Rodolphe-Eugène Chevrier: He cannot take another position in the service.


John Millar: Outside the service.


Edgar-Rodolphe-Eugène Chevrier: Oh yes, he can go outside and endeavour to earn his living. It was a bargain that after he had served thirty-five years, he would be entitled to full pension, and that if he had served less than thirty-five years but more than ten, he would be entitled to retire for ill-healtlh or on other grounds stipulated in the law. That is the bargain that was made and once the civil servant has done his part of the bargain, and once the government has complied with the terms of its side of the bargain, the civil servant may do as he pleases. He may go out and work and endeavour to increase his income, and his pension is not touched. I think that is only equitable.


John Millar: If he retires on account of ill-health does that also apply?


Edgar-Rodolphe-Eugène Chevrier: I do not know whether he would be well enough to work. He might write a book, he might become an author or a member of parliament, and there is nothing wrong in that. He has served his country for a certain period and is entitled after he has served the time stipulated to receive his

The Budget-Mr. Chevrier
pension. We are not the masters of to-morrow. A man may be ill to-day and unfit for service, and be well again to-morrow. So I see nothing wrong in that provision.
I will just mention another head-I will not discuss it-and that is with regard to unmarried contributors in particular, but of all in general. I would suggest that contributions should be returnable without interest to the contributor, his dependents or estate as the case may be, without limitation, at any time that he may quit the service. That is, this superannuation measure was brought in for one purpose, and that was to help in the elimination of those who had reached a certain age and could not give the full benefit of their activities in the same proportion that their remuneration came to them. But in order to achieve that, wie must not make it so difficult that they will refuse to take advantage of the terms. On the other hand, if we give them a superannuation measure and make it so stringent that people will be deterred from coming into the service because they know it is going to cost them too much, then we are more or less biting off our nose to spite our face, because the law will not work. In a number of cases, if this provision is allowed to remain, people who would feel like making the civil service their career will be deterred from doing so because they will argue: If I serve for nine years, and then for some reason have to get out, I shall lose all the money which I have paid in.
Now to come to the kind interruption of my hon. friend who asked whether the act had come into force.


Mr. SHAW:: Before the hon. gentleman
takes up that phase, would he permit an inquiry? I understood him to say that he had had a conversation with Hon. Mr. Whitley on the operation of the Whitley councils in England, but I did not gather from what Hon. Mr. Whitley had said, whether he was satisfied with the application of the Whitley council to the civil service, or whether he was dissatisfied.


Edgar-Rodolphe-Eugène Chevrier: When I was in England, I was there in no official capacity whatsoever, and I had, of course, no official status when I discussed this matter with Hon. Mr. Whitley. I was simply looking for information. He did not seem to think there would be any difficulty in the way of applying the Whitley council scheme, or probably some modification of it; he seemed to think that would be quite feasible, though not, probably, in the form of the Whitley councils as they

are known in England in their application to commercial life.


Joseph Tweed Shaw: They have it already in the
service, have they not?


Edgar-Rodolphe-Eugène Chevrier: Yes, but of course,
Hon. Mr. Whitley, gracious as he was, was not going to say to me:	Undoubtedly you
can apply that to your service in Canada. But I gathered from his remarks that he saw nothing that would militate against it. Considering the present state of this new superannuation measure and the difficulties that go with St, I think the government would be well advised if they considered extending the time beyond the 19th of July next within which the civil service may elect to come under the act. If the government was to give some assurance that some of the amendments I have suggested would be considered this session, then probably the time would not require to be extended, and a larger number of the civil sendee would take advantage of the superannuation measure.
Mr. Speaker, I have said a few things about the budget; I have said something about what I consider very important to my own constituency. M'ay I now be allowed to say just a few words on what the hon. member for New Westminster (Mr. Me-Quarrie) the other night said was a great privilege, and that was our visit to South Africa. I shall not be as lengthy as he was, not that I could not say as much, but because he has in a very able manner graphically described all that took place. I want to treat it from a different angle, and I do not propose to follow him up the meanderings of the Zambesi and along. May I in this connection say a word or two with reference to	the	Empire	ParliamentaryAssociation, the guests of whom we were on that wonderful trip. I take this from one of the reports of the Gentleman Usher of the Black Rod, who, as everybody knows, is the secretary of	the	Empire	ParliamentaryAssociation. Let me say that there is a vast difference between the Inter-parliamentary Union, and	the	Empire	Parliamentary
Association. I am now speaking of the Empire Parliamentary' Association:
The organization is upon strictly non-party lines.
There is a branch in each parliament of the empire, for the purpose of providing introductions and hospitality to every self-governing country of the empire for members visiting from other such countries, and also for providing for travelling facilities, special information, parliamentary privileges, meetings among members of parliament for the discussion of matters of mutual interest, and general machinery enabling parliamentarians both to hold more constant intercourse by

The Budget-Mr. Chevrier
visiting other portions of the empire with a minimum of expense, and also to obtain the maximum of useful information they might require to collect in the time at their disposal.
It was the South African branch of the "Empire Parliamentary Association that organized this trip. I want to say just a few words as to our arrival in Durban. Hon. Senator Boyer, who represents the Vaudreuil or Soulanges district in the Senate delivered a speech at Durban, and presented to the city of Durban a photograph of the monument which is now to be seen in Montreal, of Sir Benjamin Durban, who founded Durban, and who died in Montreal. South Africa is a wonderful country. I do not want to go over the itinerary of the trip, as I said a moment ago, as that was so well done by the hon. member for New Westminster the other evening. However, I cannot resist the temptation of saying one word as to the things which struck me most forcibly.
As one looks back on South Africa he cannot forget the spell of the Karoo or the majestic grandeur of the Drakensberg, with the rapturous beauty of the valley of the Thousand Hills; nor shall I attempt any des-scription of the fascination of the Kalahari, the tranquil placidity of the Zambesi, flowing so calmly through the enchanting borders of luxuriant vegetation, nor the appealing and awe-inspiring spectacle of Victoria falls; nor shall I make any attempt to express to you the deep fascination of a night on the veldt, beneath the incomparable star-studded heaven, with the eternal breeze wafting over the veldt; that never-to-be-forgotten, peculiar odour of the dried, parched, sun-burned day, drinking the dew under the silvery beams of a moon, the like of which I am sorry to say I have not seen in Canada. Nor shall I attempt to picture the wonderful variety of flowers that bloom in myriads, twenty-four hours after the refreshing rain; and no one could describe the exquisite variety and beauty of birds that people the forests of Knysna, of Southern Rhodesia and other portions of that enchanted land. Those memories one may cherish, but they are beyond description.
But what struck me most was the fortitude of the people of South Africa. South Africa is not an easy country in which to settle and those men and women who did settle there had to pay a great price, but when they do pay that price the reward that South Africa brings is well worth fighting for. I think I owe a debt of gratitude to the Canadians who settled in South Africa, and they have not been mentioned. At Pretoria I met Mr. Pearson, who for twelve
years was an employee of the Royal Canadian Mint at Ottawa, and who is now Deputy Master of the Mint at Pretoria. At Salisbury we met Mr. Cleveland and his wife, who settled in Africa some thirty years ago. Mr. Cleveland came from British "Columbia and his wife from the Maritime provinces. They are now the owners of immense tracts of land, comprising fourteen large farms. Curiously enough, his son was in the employ of this government in the pension board and is now practising medicine in Vancouver. I also met Sir Charles Coghlin, who is now Prime Minister of Southern Rhodesia, and he told me how happy he was at seeing the Canadian delegation, and particularly of meeting those he knew so well, the hon. Speaker of this House and hon. members, and he gave us details of that wonderful occasion in 1910 at the inauguration of the South African Union, when our distinguished Speaker of the House, representing Canada, delivered a wonderful oration. I met a number of people in South Africa who well remember that memorable day. We also met General Smuts at Rustenberg. who spent the whole of one day and an evening with us on the train. In the geological museum at Pretoria I was pleased to see quite a number of exhibits of Canadian minerals, and particularly a wonderful sample of mica from the Wallingford1 mines at Perkins Mills, just a few miles from here in the Gatineau valley.
As I said before, we were sixty-three days on South African soil. The British delegates, the Australian delegates, the New Zealand delegates and the Canadian delegates, with the South African delegates lived together either in close intimacy on the train or in the hotels, but particularly in the 'large centres, very much closer to the South African people. We were in close intimacy with the delegates and people of South Africa in that we shared their family life, slept under their roof, ate at the same table, and had a number of conferences with them, and discussed the many difficulties which confronted the administration of South Africa. In that way we really entered into their mode of thinking, we understood more readily their ideals, their ambitions and their desires. We came into close contact with their problems and difficulties, and appreciated in a better way the struggle which is theirs for continued advancement of their country, but above all, we were in a better position to appreciate the kindness, the warmth of feeling, and the generous hospitality of these people. We have learned to appreciate, to esteem and to love them. We
The Budget-Mr. Chevrier

He said: A number of amendments have been made necessary by the experience gained in the enforcement of the Opium and Narcotic Drug Act. An amendment is provided in the bill, in view of the fact that the courts have held that, under the law as it stands, a physician, who might have graduated in a foreign country, but who was never licensed to practise medicine in Canada, could legally sign a narcotic order. Another amendment provides authority to proceed by indictment against a physician who is a large trafficker. That was not provided for under the act as it stands. Another amendment authorizes procedure against a medical man who traffics in narcotic drags under the pretence of practising medicine. There is also an amendment which provides for the confiscation of motor cars and other vehicles when used for the purpose of transporting narcotic drugs or any such purposes. There are other amendments of a minor nature which can be explained later.
Motion agreed to andi bill read the first time.



PRIVATE BILL


[Stage Direction]
Bill No. 45, from the Senate, for the relief of Jessie Louise Cowan.-Mr. Duff.

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

George Gibson Coote: What was the total amount paid to witnesses who appeared before the Select Standing Committee on Banking and Commerce during the session of 1923?


George Perry Graham: 


$1,543.35. MILITARY STATISTICS
Mr. ROSS (Kingston):: 1.	How many officers, how many non-commissioned officers, and how many privates have been discharged from the permanent force of Canada owing to reduction of the force, during the years 1923 and 1924?
2. How many of each class above have been pensioned for the same reason?
3.	How many of each class have been enlisted since the reduction?
4. How many new permanent men have been employed by the department during the years 1923, 1924 and 1925 in the cities of (a) Ottawa; (b) Kingston; (c) Toronto; (d) London?


Hon. Mr. MACDONALD (Pictou):: 1.	Officers, 34; Warrant Officers, 5; N.C. Officers, 29; Privates, 75.
2.	Officers, 23; Warrant Officers, 2; N.C. Officers, 4; Privates, Nil.
3.	Officers, 21*; Privates, 922**.
4.	Ottawa, 76; Kingston, 287; Toronto, 195; London, 64.

* Includes 6 officers being- paid by Department of Interior and 4 by the Canadian Air Force.
** (a) To replace soldiers who took their discharge at their own request, consequent upon
the changes made in the Pension Act on 30th June, 1923, approximately	52
(b)	To replace W.O's, N.C.O's and men who
took their discharge owing to the reduction in the pay and allowances on the 1st August, 1924, approximately	470
(c)	To replace discharges, deaths, and other casualties which average 15 to 25 monthly and which for two years amounts to approximately.. 400
Total	922



ALIEN LABOUR ACT

Mr. CHURCH:: 1.	Is the Alien Labour Act being applied to prevent the bringing in of aliens to do casual work in Canada during the summer months?
2.	If not, why not?


James Murdock: 1 and 2. The Alien Labour Act, Chapter 97 of the Revised Statutes of Canada, does not provide that it shall be administered by any department of the government. Section 5 of the act provides that, with the consent of the attorney-general of the province in which the prosecution is had or of a judge of a superior county court, fines provided by the act may be recovered on a summary conviction, and such proceedings may be taken by any person desiring the enforcement of the act.



CANADIAN COAL-MARKET EXTENSION

Mr. CHURCH:: 1.	How was the $200,000 voted in 1924 by parliament to bonus coal, expended and distributed?
2.	What amount of said vote was spent to bonus: (a) Alberta coal; (b) Nova Scotia coal?


Hon. Mr. STEWART (Argenteuil):: 1. The disbursements from the sum of $200.000 voted by parliament in 1924 to assist the extension of the market for Canadian icoal (Vote No. 483) were made under regulations authorized by order in council of September 3, 1924 (P.C. 1537), a copy of which is subjoined. Under these regulations the disbursements were as follows:-
(a) Amounts paid Canadian
Pacific Railway Co	 $	657.63
(b) Amounts paid' Canadian
National Railways	 10,393.44
Total expended	 $11,051.07'
2. (a) Alberta coal-None.
(b) Nova Scotia coal-$11,051.07.



P.C. 1537

[Stage Direction]
Certified copy of a minute of a meeting of the committee of the Privy Council, approved by the Deputy of His Excellency the Governor General on the 3rd September, 1924 The committee of the Privy Council have had. before them a report, dated 2nd September, 1924.. from the Minister of Mines, representing that parliament has voted a sum of $200,000 to provide﻿APRIL 27, 1925
Questions
for assistance in transportation of Canadian coal to central Canada by payments to railway companies under regulations to be approved by the Governor in Council.
The minister recommends that he be authorized to direct the payment out of this sum for the purpose of assisting in the transportation of coal mined in eastern Canada and brought by vessel to Quebec, Montreal or other St. Lawrence ports, and thence transhipped by railways operated subject to the Railway Act of 1919 to stations in the provinces	of Quebec	and Ontario	to	which throughrates are	published	and filed with	the Board of
Railway Commissioners for Canada, of one-fifth of a cent per ton per mile from the port of transhipment to destination from time to time in the case of each shipment thereof to the railway or railways transporting said coal.
The minister also recommends that he be authorized to direct	the payment out of	the	said vote for
the purposes of assisting in the transportation of bituminous coal mined in eastern Canada and transported wholly by rail on railways subject to the Railway Act of 1919 to stations in the provinces of Quebec and Ontario west of Riviere du Loup of one-fifth of a- cent per ton per mile from the place of shipment to point of destination from time to time, in the case of each shipment thereof, to the railway or railways transporting said coal.
The total amount	to be paid	on	a single shipment of coal under the above authorization shall not exceed the sum of fifty cents per net ton, nor are payments to be made on shipments of coal to points, where in the opinion of the Minister of Mines, Canadian coal is not in competition with American coal.
The minister also recommends that he be authorized to direct payments out of the said vote on coal used for domestic and industrial purposes but not for use on railway locomotives.
The minister further recommends that he be authorized to arrange with the railway companies for a reduction on the published rate in regard to the rates to be charged by said companies for the transportation of such coal with the view to enabling such coal to be supplied to the people of Canada at as low a rate per ton per mile as is possible, and that payments from the said vote may be made only in the event of such reduction being secured.
That if at any time the sum to be expended in subsidies under the above regulations on behalf of eastern Canadian coal would appear to amount to more than $150,000, he be authorized to discontinue
such payments, and that all payments under the above authorization shall be made at the discretion of the Minister of Mines.
The committee concur in the foregoing recommendations and submit the same for approval.
E. J. Lemaire,
Clerk of the Privy Council.
The Honourable
The Minister of Mines.
CANADIAN NATIONAL RAILWAYS-PRIVATE CARS	f
Mr. WILSON:: 1.	How many private cars are in the possession of the Canadian National Railways for the use of officials?
2.	How many of these have been secured in the past two and a half years?
3.	How many were used to carry officers of the company to Portland on the occasion of the departure o) Mr. C. J. Smith for England ?
4.	Who were the officers who used these cars for this purpose ?
5.	How many cars were on this same occasion sent around to Halifax, and for what purpose were they so sent?


George Perry Graham: Questions Nos. 1 and 2 are perfectly legitimate inquiries. It strikes me if the hon. gentleman will give the matter further consideration, he will see that questions Nos. 3, 4 and 5 serve no public interest. If we have to get answers to ali questions of this kind, dear knows where it will lead to.
Question stands.



TARIFF ON SUGAR

Mr. McTAGGART:: 1.	What was the general customs tariff rate on sugar on December 1, 1924?
2.	What was the British preferential tariff rate on sugar on December 1, 1924?
3.	Has any change been made in the British preferential rate on sugar since December 1, 1924?
4.	If so, when was such change made and what was the nature of the change?


Hon. Mr. CARDIN:: Tariff	General	British oreferent.iniItems	tariff	tariff134. All sugar above number sixteen Dutch standard in colour, and all refined sugars of whatever kinds, grades or standards, not covered by tariff item No. 135, when not exceeding eighty-eight degrees of polarization per one hundred pounds	$1.50	83 centsWhen exceeding eighty-eight degrees but not exceeding eighty-nine per one hundred pounds	degrees,	1.53	85 centsWhen exceeding eighty-nine degrees but not exceeding ninety per one hundred pounds	degrees,	1.55	87 centsWhen exceeding ninety degrees but not exceeding ninety-one degrees, per one hundred pounds	1.58	89 centsWhen exceeding ninety-one degrees but not exceeding ninety-two per one hundred pounds	degrees,	1.62	91 centsWhen exceeding ninety-two degrees but not exceeding ninety-three per one hundred pounds	degrees,	1.65	93 centsWhen exceeding ninety-three degrees but not exceeding ninety-four per one hundred pounds	degrees,	1.68	95 centsWhen exceeding ninety-four degrees but not exceeding ninety-five per one hundred pounds	degrees,	1.70	97 centsWhen exceeding ninety-five degrees but not exceeding ninety-six per one hundred pounds	degrees,	1.74	99 centsWhen exceeding ninety-six degrees but not exceeding ninety-seven per one hundred pounds	degrees,	1.77	$1.01
Questions

	British
General	preferential
tariff	tariff
1.80	1.03
1.89	1.09
1.89	1.09
Tariff Items
When exceeding ninety-seven degrees but not exceeding ninety-eight degrees,
per one hundred pounds	
When exceeding ninety-eight degrees but not exceeding ninety-nine degrees,
per one hundred pounds	
When exceeding ninety-nine degrees, per one hundred pounds	
Provided that refined sugar shall be entitled to entry under the British Preferential Tariff upon evidence satisfactory to the Minister of Customs ' and Excise, that such refined sugar has been manufactured wholly from f^aw sugar produced in the British Colonies and Possessions and not otherwise.
Provided further that sugar imported under this item shall not be subject to special duty in excess of three-fourths of one cent per pound.
135. Sugar above number sixteen Dutch standard in colour when imported by a recognized sugar refiner, for refining purposes only, under regulations by the Minister of Customs and Excise; and sugar, n.o.p., not above number sixteen Dutch standard in colour, sugar drainings or pumpings drained in transit, melado or concentrated melado, tank bottoms, sugar concrete, and molasses testing over fifty-six degrees and not exceeding seventy-six degrees, when not exceeding seventy-six degrees of polarization,
per one hundred pounds	
When exceeding seventy-six degrees but not exceeding seventy-seven degrees,
per one hundred pounds	
When exceeding seventy-seven degrees but not exceeding seventy-eight degrees,
per one hundred pounds	
When exceeding seventy-eight degrees but not exceeding seventy-nine degrees,
per one hundred pounds	
When exceeding seventy-nine degrees but not exceeding eighty degrees,
per one hundred pounds	
When exceeding eighty degrees but not exceeding eighty-one degrees, per
one hundred pounds	
When exceeding eighty-one degrees but not exceeding eighty-two degrees,
per one hundred pounds	
When exceeding eighty-two degrees but not exceeding eighty-three degrees,
per one hundred pounds	
When exceeding eighty-three degrees but not exceeding eighty-four degrees,
per one hundred pounds	
When exceeding eighty-four degrees but not exceeding eighty-five degrees,
per one hundred pounds	
When exceeding eighty-five degrees but not exceeding eighty-six degrees,
per one hundred pounds	
When exceeding eighty-six degrees but not exceeding eighty-seven degrees,
per one hundred pounds	
When exceeding eighty-seven degrees but not exceeding eighty-eight degrees,
per one hundred pounds	
When exceeding eighty-eight degrees but not exceeding eighty-nine degrees,
per one hundred pounds	
When exceeding eighty-nine degrees, but not exceeding ninety degrees,
per one hundred pounds	
When exceeding ninety degrees but not exceeding ninety-one degrees,
per one hundred pounds	
When exceeding ninety-one degrees but not exceeding ninety-two degrees,
per one hundred pounds	
When exceeding ninety-two degrees but not exceeding ninety-three degrees,
per one hundred pounds	
When exceeding ninety-three degrees but not exceeding ninety-four degrees,
per one hundred pounds	
When exceeding ninety-four degrees but not exceeding ninety-five degrees,
per one hundred pounds	
When exceeding ninety-five degrees but not exceeding ninety-six degrees,
per one hundred pounds	
When exceeding ninety-six degrees but not exceeding ninety-seven degrees,
per one hundred pounds	
When exceeding ninety-seven degrees but not exceeding ninety-eight degrees,
per one hundred pounds	
Over ninety-eight degrees, per one hundred pounds	
Provided that all raw sugar, including sugar specified in this item, the produce of any British Colony or possession, shall be entitled to entry under the British Preferential Tariff, when imported direct into Canada from any British country.
Provided that sugar imported under this item shall not be subject to special duty.
3 and 4. There has been no tariff change made on sugar since December 1st, 1924.

81.08 cents	35.00 cents
83.116 cents	35.50 cents
85.152 cents	36.00 cents
87.188 cents	36.50 cents
89.224 cents	37.00 cents
91.260 cents	37.50 cents
93.296 cents	38.00 cents
95.332 cents	38.50 cents
97.560 cents	39.00 cents
99.788 cents	39.50 cents
$1.02016	40.00 cents
$1.04244	40.50 cents
$1.06664	41.00 cents
$1.09084	41.50 cents
$1.11888	42.00 cents
$1.14692	42.50 cents
$1.17496	43.00 cents.
$1.20300	43.50 cents
$1.23104	44.00 cents
$1.25908	44.50 cents
$1.28712	45.00 cents
$1.31516	45.50 cents
$1.34320	46.00 cents
$1.4250	46.50 cents
ce of any British Colony	

Questions as Orders jor Return



QUESTIONS PASSED AS ORDERS FOR RETURNS


Hon. Mr. STEVENS:: 1.	What amount of insurance is carried on property
in Vancouver:	(a) In the name of the Dominion
government; (b) In the name of Vancouver Harbour Commissioners; (c) In the name of the Board of Grain Commissioners ?
2.	What was the total premium paid on said insurance for each of the years during 1922, 1923, 1924?
3.	To whom was the said insurance given and who were the agents of the companies with whom said insurance was placed?


Hon. Mr. OOPP:: I have the information
that my hon. friend asks for and, as it is very lengthy, I would suggest that it be made an order for return and be laid on the table at once.


Henry Herbert Stevens: The only thing is that
we do not get it printed in Hansard.


Mr. COPP:: It will occupy several pages of Hansard.


Henry Herbert Stevens: A summary might have been made, but it will be quite all right to pass it as an order for return.


MILITARY STATISTICS
Mr. POWER:: 1.	Are any retired officers of the imperial forces now employed by the Department of National Defence ?
2.	If so, what are their names, rank or position?
3.	What salaries do they receive from the Canadian government ?
4.	What pension do they receive from the Imperial government ?
5.	Have the pay and allowances of private soldiers in the permanent militia been decreased since the year 1922?
6.	If so, to what extent?
7.	Have the pay and allowances of non-commissioned officers in the permanent militia been decreased since the year 1922?
8.	If so, to what extent?


CANADIAN NATIONAL RAILWAYS-MEDICAL ADVISERS
Mr. POULIOT:: 1.	What are the names of the doctors who were officially appointed as medical advisers to the employees of the Canadian National Railways, at Riviere du Loup, from 1900 to date?
2.	From and to what date did each of them perform these duties?
3.	On whose recommendation were each of them appointed?
4.	Does such a post entitle the holder to a pass on the Canadian National Railways?


CIVIL SERVICE SUPERANNUATION
Mr. McQUARRIE:: 1.	How many civil servants are eligible to come under the provisions of the Civil Service Superannuation Act, 1924?
2.	How many civil servants have made application to date to come under the provisions of the said Act?


James Alexander Robb: I have the answer to
No. 2 of this question, but I submit to my hon. friend that I am not sure whether it is important that he should have the answer to No. 1. If it is, the question will have to be passed as an order for return as it involves considerable work and communications in different parts of the provinces.


Mr. McQUARRIE:: I would like to have
the answer if it can be given.


Mr. ROBB:: 1.	Passed as order for return.
2.	The number who have elected to come under the provisions of the act and who have been accepted to date is 8,258.



ROUYN-NIPISSING CENTRAL

[Stage Direction]
*	EXTENSION
William Garland McQuarrie: For a copy of all correspondence and other documents passing between the executive officers of the Canadian National Railways and the Temiskaming and Northern Ontario Railway Commission or any of its officers, and between the Canadian National Railways and the government of Canada or any of the ministers thereof, and between any of the above-mentioned and the government of the province of Quebec or any of the ministers or officials thereof, regarding the proposed extension of the Temiskaming and Northern Ontario Railway subsidiary (the Nipis-sing Central) into Rouyn.
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals): The other day I called attention to the fact that this motion, as it is put now, might be held to ask the Department of Railways and Canals of Canada to produce correspondence between the Quebec government and the Ontario government. Of course, we could not undertake to do that.


William Garland McQuarrie: Certainly not.


George Perry Graham: It reads that way.


William Garland McQuarrie: It was not intended
that way.


George Perry Graham: I have no objection, with that understanding to an order passing, although there may be some correspondence between the railways and the government that might be confidential at the (present time as I believe matters in question between them have not been settled.


[Stage Direction]
Motion agreed to.


Mr. ARCHAMBAULT:: For a copy of all correspondence, of whatever nature it may be, exchanged between the government of Canada and that of the United States or between

Australian Treaty

any official of said governments, either through the departments or commissioners from June 1, 1924, up to this present date, in connection with the St. Lawrence Waterway scheme, the diversion of the waters of lake Michigan for the Chicago drainage canal and the diversion of the waters of Niagara Falls.



ST. IGNACE POSTMASTER

Mr. DOUCET:: For a copy of all correspondence and other documents in connection with the appointment of the new postmaster at St. Ignace, electoral district of Kent, New Brunswick.



MR. ALBERT E. ROBICHAUD

Alexandre Joseph Doucet: For a copy of all correspondence and other documents received by the Post Office Department relating to the dismissal of Albert E. Robichaud, as postmaster of Laineque, Gloucester county, New Brunswick, together with a copy of the evidence taken at the inquiry, the report of the investigator and all correspondence relating to the appointment of the new postmaster.



FERGUS AND ELORA-PURCHASE OF TOWN HALLS

Mr. CHISHOLM:: For a copy of all correspondence and other papers and documents relating to the purchase or lease from the towns of Fergus and Elora, of their town halls, in the county of Wellington, during the year 1921, and of all accounts rendered, moneys paid or expended in connection with changes made in said buildings in said year.
CUSTOMS EXCISE OUTPORT AT DRUMHELLER Mr. GARLAND (Bow River):
For a copy of all correspondence, letters, telegrams, and communications passed between the government, any member or official of the government, and any persons, concerning the establishment of Drumheller as a customs excise outport, and warehouse port, under the survey of the port of Calgary, Alberta.
AUSTRALIAN TREATY On the Orders of the Day:


Arthur Meighen: I desire to call the
attention of the government to the despatch which appeared in the press of Friday from Melbourne, Australia, as follows:
Melbourne, Australia, April 23.-(Via Reuter's.)- Premier Stanley M. Bruce has replied to a cable from Premier Mackenzie King of Canada on the matter of re-opening the Canadian-Australian trade treaty negotiations, the Commonwealth premier declining to do so.
Premier Bruce, in his reply, says he regrets his inability to agree to Premier King's suggestion that the discussion on the proposed trade treaty should be re-opened. The Australian Premier says he is now awaiting the decision of the Canadian Parliament on the treaty.
May I ask if the despatch fairly represents the facts, and if it does, if the government is in a position to make a further statement as to its purpose?
[Mr. ArchambaultJ
Right Hon. W. L. MACKENZIE KING
(Prime Minister):	I decline to make any
statement based on newspaper reports. Certainly the despatch as read does not represent accurately the situation between Australia and Canada at the present time. The last communication I had from Premier Bruce made inquiry as to certain changes we were proposing to make in what was the original basis of our agreement. That telegram has not been replied to as yet, but it will be replied to very shortly. I may mention also that after Australia had made the changes in her treaty which she had agreed to make she also made certain changes with respect to the conditions under which goods would be admitted under the treaty, which conditions had not been discussed before. By order in council the Australian government adopted a condition that, Canadian goods might not be given the advantage of the changes made in the Australian tariff, unless-as I understand it-75 per cent, of the labour and materials were of British origin. That feature was never considered when the discussion relating to the changes in the tariff took place between the two governments, and until we get that phase of the question definitely understood we do not propose to ask this House to make any changes in our tariff, because it is a very material factor in the matter. I might say that the government has decided to have Mr. Ross, who was in Australia before, return to Australia to conduct further with the Australian government such negotiations as we may have with them, in the hope that we shall get matters so adjusted as to bring about a final arrangement that will be satisfactory to our government as well as to the Australian government.


Arthur Meighen: I would gather from the Prime Minister's statement that there is no hope that the matter will reach a conclusion in time for confirmation this session.


Mr. MACKENZIE KING:: I would not say that. I rather hope it will although I cannot say.


Arthur Meighen: As I understand it, that 75 per cent merely applies to productions the raw material of which is not produced in Australia.
Mr. MACKENZIE, KING: No, I think not.


Arthur Meighen: And 25 per cent where
the raw material is produced in Australia. At any rate the statement is correct that the 75 per cent just applies to goods competing with Australian goods. As a matter of fact,

The Budget-Mr. Chevrier
will the Prime Minister or the Minister of Trade and Commerce say that with that restriction actual Canadian exports are really affected ?


William Lyon Mackenzie King: Yes.


Arthur Meighen: But to any appreciable
extent?


James Alexander Robb: I think so.



LEASE OF RESERVE TO V. GRENON

[Stage Direction]
On the Orders of the Day:
James Arthurs: I call attention to the fact that the order for return passed on 16th March for correspondence, documents, and so on, regarding the leasing of certain property in the lower French Indian reserve to one V. Grenon has not been complied with. I think the papers are not very voluminous and I would like to have them brought down.


John Warwick King: I shall make inquiry.
- THE BUDGET



CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.

[Stage Direction]
The House resumed from Friday, April 24, consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Sir Henry Drayton.
Edgar-Rodolphe-Eugène Chevrier: The Budget-Mr. Chevrier
Africa is now manufacturing a very fine quality of cement. We were privileged to visit that exploitation field and we found that the cement manufactured there is about 98 per cent pure. While we were on the Mozambique coast we noted that the graphite produced on the isle of Madagascar is supplanting the graphite we produce here. So it is that when we are brought in touch with these facts it becomes our duty to bring them before the Canadian people in an endeavour to apply a remedy, and if possible to attract some other line in order to make up for what we are losing in that particular direction.
It is therefore certain that the preference is a definite determining factor in Canada's favour in respect to the following commodities: condensed milk, wrapping paper, rubber tires, canned fish, oatmeal, fencing, and binder twine. These are commodities which ordinarily could be obtained by South Africa to equal advantage elsewhere. In respect to the remainder of these principal entries the preference is undoubtedly of great assistance. Among lesser commodities the preference is of undoubted value to Canadian exporters of the following goods: paints, hardware, iron and steel bars and pipe, tools and implements, wood'enware and furniture, pumps and machinery, leather, chemicals, musical instruments, glass bottles, canned foods, knitted goods and brushware. These latter commodities I enumerate because they are general items which would benefit largely from an extended South African preference. None of these commodities is on the South African free list at the present time, and only four, namely, glass bottles, pipe, certain classes of machinery and leather are in class 4, on which 100 per cent preference is already given.
On the other hand, what is the value of the Canadian preference to South Africa? As I have stated, with gold and diamonds marketed under monopoly, wines explicitly excluded by Canada in granting preferential treatment, and wool, coal, mohair, wattle bark and maize on the Canadian free list, the value of a Canadian preference to South Africa is very seriously curtailed. The only commodities now dutiable in Canada which interest South Africa to any appreciable degree are dried fruits, fresh soft fruits, and to a very limited degree, sugar. As a matter of fact sugar may be more or less disregarded, because of the limited South African surplus for export and its high local manufacturing cost.
May J be permitted for just a few moments to deal with a few items that I think should be of interest from the point of view of the making of a bargain with South Africa looking to the promoting of trade with that country? Take oranges, for instance: the production in South Africa in 1923 was 1.009,000 boxes. The quality was comparable with that of the Canadian import. Canada used on an average about 1,000.000 cases and the source of supply for Canada was 95 per cent from the United States, most of the remainder from the British West Indies, and some from Spain. Could not some of that import be taken from South Africa? Of pears, the production in South Africa was 759,000 boxes, and the quality was comparable with that of the present Canadian import. Canada imported 17,800,000 pounds, and the source of supply was entirely the United States. In peaches the production in South Africa was
4,406,000	boxes and the quality was comparable with the best Canadian imports. The source of supply to Canada was entirely the United States. In 1923 Canada imported 13,-
406.000	pounds of peaches. Of plums South Africa produced 365,000 boxes, of a quality, however, not equalling that of the larger part of the Canadian import. Canada imported 140,000 bushels, entirely from the United States. Of grapes the production in South Africa was 15#,000 tons, of a quality comparable with the Canadian import. Canada imported 5,103 tons, the source of supply being entirely the United States. Of maize, the South African export was 1,128,314,250 pounds, the quality being comparable with that of Canadian imports. Canada imported 9,227.416 bushels, the source of supply being the United States. I cite these figures in the hope that when the conditions permit something may be done with a view to having trade arrangements in these commodities entered into with South Africa.
Now, let me deal for a moment with the question of oranges. It is entirely a matter Gr transportation. TIig dist-siico i*? not. t.oo great, and the quality and price are right. As to maize, any tariff concession on this commodity would be of extreme value. If all maize were subject to the 7i cents per bushel to which maize for distillation is liable, and this were accorded to South Africa as a preference, the result ought to swing this valuable business from the United States to the Union. So far as fresh deciduous fruits are concerned, given the transportation, this business could be developed either with or without preference, as Canada is paying more for her winter fruit at present than South Africa realizes in her principal market.
In conclusion I would suggest some action to induce the Elder Dempster Steamship Company to return to Canadian ports, and the
The Budget-Mr. Chevrier

establishment of a Canadian duty upon oranges and maize for the purpose of offering South Africa a substantial preference. A preference upon dried fruits comparable to the present advantages accorded to Australian dried fruits might also be advisable.
As I said a moment ago, While at Cape Town I spent some time in the office of our trade commissioner, Mr. Stevens. Mr. Stevens was preceded in that office by a very distinguished gentleman who is held in high esteem throughout South Africa and whose name I heard at Cape Town, at Durban and as far north as Salisbury; I refer to Mr. Egan, now Deputy Minister of Immigration. But Mr. Stevens is somewhat handicapped in the handling of the office down there. Mr. Stevens has not said anything of the kind to me, but so far as my observations have led me to conclude, I think he should be allowed a little more latitude, and particularly a little more in the matter of pecuniary assistance. I would have been delighted to have had the advantage of Mr. Stevens' knowledge throughout this trip in South Africa, and particularly if he had been allowed to accompany us through the peninsula. I think it is only fair, if we want to have our trade with South Africa or other distant parts of the empire develop, that when these questions come up we Should, not be too niggardly in the matter of the expenses that go with the administration of those offices. It is always exceedingly difficult to appreciate the difficulties that exist down there. For instance, to travel between Cape Town and Johannesburg or Pretoria, where the administration offices are, does not seem to us to be any distance at all, but it entails a considerable amount of expense and also a considerable amount of time.
Passing along, after leaving Cape Town, we returned to England about the 18th of November. It was my good fortune to spend a few weeks in London, and my greater good fortune to meet quite a number of times our distinguished representative there, Hon. Mr. Larkin, and I desire to assure everyone that our interests are very ably looked after over there by Hon. Mr. Larkin and 'his most efficient staff. I referred the other evening to Canada's status in the empire and to the talk of appointing an ambassador to Washington. I am one of those who believes that it is time, and high time, to appoint an' ambassador to Washington; I believe that is only consistent with Canada's dignity and importance, and I want it clearly understood that if I advocate the appointment of an
[Mr. Chevrier 1
ambassador to the United States, that does not in any way derogate from my fidelity and loyalty to the British Crown; but I feel that we have reached that stage of national development where we can have our own representatives in the other portions of the world. We talk of appointing an ambassador to Washington, and yet we have in London i but a high commissioner, and in Paris an agent. To my mind, there is an absolute inconsistency between these three terms. These two officers in London and Paris respectively are held by two Canadians of the highest distinction, who fill those positions in a way that reflects the greatest credit upon Canada, and it is with a feeling of pride that one hears their praise repeated by all those whose good fortune it has been to come in contact with them. But the same thing cannot be said of the premises wherein they do the best they can for the national development of Canada and for her reputation abroad.
It was my good fortune also to be invited to Australia House, when the Attorney General for Australia, Sir Lyttleton Groom, was in England on his way back to Canada and Australia, and really I was ashamed of myself and of the way Canada is looking after its representatives abroad when I compared Kin-naird House or the Agency in Paris with Australia House or the South African quarters. Australia House is within a stone's throw of Kinnaird House, and has the most luxurious, sumptuous reception halls.
It is a building all by itself, where one feels at home, and where the products of Australia are exhibited in a way that is quite as commendable as the exhibits one sees in Windsor station, Montreal, or in other places where the Canadian Pacific or the Canadian National show the products of this country.
I was really surprised, and after having been received with the kindness and hospitality and warmth of sentiment that marked our reception at Australia House there was but one consolation, and it was that if our premises at Kinnaird House are so cheap, so poor, so out of keeping with Canada's status, at all events the warmth and cordiality of our reception by Mr. Larkin, both in our own building and later at his own house, not only was on a par but it did go much deeper to my heart than the reception we received at the other buildings.
That brings me to say a word with reference to the changing of our Canadian quarters in London. Something has been said with reference to the purchase of the Union club. Now I do resent and feel very deeply the remarks that are made by some hon. gentlemen

The Budget-Mr. Chevrier
who whether they know whereof they speak, or, I will not say know not, but who speak without a Ml knowledge of the facts, in reference to the location of our quarters in London. I have visited the Union club building; I have seen what improvements are being made, and I am perfectly well satisfied, both as a member of this House and as a citizen of Canada, that what has been done has been done in the most commendable way, and that no expenditure has been made which should not have been made, and that it is a building consistent with the standing of Canada. I do resent the statement which was made that this building is situated in a blind alley. Statements like that should not be made. People who have visited London and are well aware of the layout of the city know that this club is not situated in a blind alley, but in Trafalgar Square, on the comer of Cockspur street, with the National Art Gallery at the back, and leading up to the Strand and Australia House. I was so impressed with what was being done while I was there that I made certain notes of my own, and asked for certain information which I will give to the House now. I have put this down in writing so that there will .be no misunderstanding as to the exact 'location, if any hon. gentleman wants to locate it afterwards.
The building is situated on the west side of Trafalgar Square and the frontage-120 feet- on the Square occupies practically the entire west side. The second frontage-72 feet- and chief entrance surmounted by an imposing pediment, will be on Cockspur street, which is the main thoroughfare of traffic from the city to the West End. The south side of Trafalgar Square is enclosed 'by Cockspur street. The corner formed! and occupied by the Canadian building is probably the principal site in the heart of the West End of London. If any gentleman says that this is located in a blind alley, he is the one who is blind. The National Art Gallery faces Trafalgar Square from the north and occupies the whole of that side. The South African government building faces the east side of the square and the Canadian Pacific Railway building from the south, which position was secured by that company many years ago.
In addition to these, the following buildings or office premises are located within a stone's throw of the Union club:
The Sun Life Insurance Company Canadian Pacific Railway offices Royal Mail Steam Packet Company's offices Cunard Steamship Company, Limited H. M. Government of Norway International Sleeping Car Company Canadian National Railway
Peninsular and Oriental Steam Navigation Company Orient Steam Navigation Company, Limited Thomas Cook & Sons
Brown Bros. & Company, International Bankers The White Star Steamship Company and subsidiaries Credit Lyonnais The Carlton Hotel
On Northumberland avenue and the Strand, immediately opposite, are:
The Grand Hotel
Victoria Hotel
Metropole Hotel
Charing Cross Railway Station
Then within five hundred yards of this corner are:
Colonial Office War Office The Admiralty The Privy Council Foreign Office Home Office India Office Scottish Office Treasury
Ministry of Agriculture
Board of Trade
Ministry of Labour
Ministry of Health
Office of Woods and Forests
Then as to the accommodation we find there: At present the High Commissioner's office in ICinnaird house has 5,238 square feet; the emigration office on Regent street has 5,549 square feet; the pension office, on Oxford street, has 1,800 square feet; and the Trade Commissioner's office, on Basinghall street, 700 square feet. The four offices, absolutely unconnected one with the other, are on four different premises containing 13,287 square feet. The idea is to bring them under the same roof, and the new building will provide 26,971 square feet, which will give a surplus available for extension of about 3,700 square feet. I will not give the House the history of the acquisition of these properties, I will reserve that for another occasion; but the consensus Oi opinion in England, on the part of people who are not financially interested in this question at all, is that the 'bargain is a good one. My own impression is that it was a good bargain and that we should have no fear or apprehension or doubt about it. Personally I am prepared to say, after having seen the property, after having looked it over, after having heard what it cost, and after having heard what the rentals are in proportion to the other buildings ini the neighbourhood, that it was a good bargain.
It was also my privilege to spend a few weeks in France, and there I met Hon. Mr. Roy-not our ambassador, not even our high commissioner, but the agent of Canada. Not-
The Budget-Mr. Chevrier

withstanding his unimpressive title Mr. Roy is a man well qualified to shed lustre on the title of ambassador in France, just as Mr. Larkin reflects credit upon his office in England. But the status of Canada's representative in France is simply that of agent. There also I found that somewhat the same conditions prevailed as in London. I have no hesitation in saying that the offices of Canada's representative on the Boulevard des Capucines are far from being in keeping with the dignity which Canada should maintain on French soil. I make this Statement-and I make it without any fear of contradiction by any hon. gentleman who has been in France-that the room of Hon. Mr. Roy is far below the character of the quarters provided for a number of officers of this House; and that the room of many members of this parliament is far better equipped than the room of our agent in Paris. When one enters this long room one sees an old time-worn table in the centre and time-worn chairs along the sides, newspapers Strewn around, and foreign newspapers hanging on the walls. Fifteen people can hardly sit at ease in that room; and I Should like to ask the Minister of Finance (Mr. Fielding) how he 4 p.m. felt when he was seated there studying the wonderful French language at the time of the negotiation of the French treaty? Would he not have preferred to have better quarters where he could have mixed with some degree of comfort with the distinguished French people whom he saw? Would he not have preferred to meet those people in a very much better place than where he did meet them? It certainly would have been far more in consonance with Canada's dignity.
In conclusion, I rejoice in the statement that has been made by the Acting Minister of Finance as to our present financial position.
I feel that the statement will be well received by the people of Canada; and I sincerely trust that in the administration of the affairs of this country no false economy will be practised, but that the high standard of national development at which Canada has arrived, coupled with proper economy, will not be marred or hampered !by the fear or the refusal to spend adequately-and I repeat the word "adequately"-in that connection. Ours is a vast heritage; it has been worth living for, it has been worth dying for. I have no other desire and no other ambition than to see Canada continue her national development, guided in her own way but remaining forever a component part of the greatest Commonwealth of nations.


Mr. ANDREW KNOX (Prince Albert):: Mr. Speaker, it is not my intention to speak at any great length in this debate which has been moving along rather slowly. I find that I am the eighty-eighth speaker since the debate started, and the twentieth speaker from the group of which I am a member. In looking over the columns of Hansard I observe that although there are a number of speeches that occupied almost three hours, the speakers from this group have not averaged more than half an hour each, and I do not intend to exceed that time.
In regard to the budget I must say that the proposals contained in it are not of such a character as to develop any enthusiasm on my part, and therefore in my brief remarks I shall deal with the budget from a critical standpoint. We were led to believe on a former occasion that the reductions then put into force were but the fore-runner of others to follow; but I am afraid the fore-runner must have, in some way, lost its connection with the main body. The budget has been dealt with from so many different angles that it is rather difficult to approach its consideration from any new point of view, consequently my remarks will be general in their character. While I criticize the government for its action-or possibly I should say inaction-I also wish to say that the high tariff policy of the Conservative party will find no foothold today in the prairie provinces, but-


Arthur Meighen: You have not been there lately.


Andrew Knox: I have just returned from
there. But permit me to say that a party like the Liberal party which has made no further advance, during the four years in which it has held office, to carry into effect its platform and published policy, will certainly not be received with open arms by the thinking portion of the electorate, especially in that part of Canada lying west, of the Great Lakes, and I wish to say that the people of Canada to whom that remark applies are now extremely alert. The haphazard easy going individual who believes everything he hears and tells everything he believes is now a back number. The thinking element have now commenced to see that in times .past they have been made use of for the benefit of other people; they are beginning to see that owing to the immense production, on a peT capita basis, of the value of the products of their farms, particularly in the case of the western farms, and from the fact that they are compelled to sell their products in competition with the world in the world's markets while at the same time forced.

The Budget-Mr. Knox
to purchase what they need for their own requirements in the restricted, protected, high priced home market, the time has come for a change. The conditions through which they have been passing are such as to compel all those men and women who have suffered from those conditions to do a lot of thinking. The result is that a great number are convinced that neither of the two old political parties is much interested in trying to help the farming community nor the communities which are entirely dependent upon the success of agriculture. Accordingly I am convinced of this, that in the west-in the prairie provinces at least-neither the policy of the Conservative party nor the policy of the Liberal party- judged by their actions during the last few years-will make any appeal to the thinking masses; and the man who is bold enough out there to argue that benefit is to be derived by the farming community from supporting either of those parties is likely to be only "a voice crying in the wilderness."
I have been impressed with the similarity of the position of the Maritime provinces, and the conditions there, to those of the western provinces. They too are more or less isolated and hampered in regard to traffic restrictions. They too are handicapped by a long, expensive rail haul, and they too are striving to develop their ocean ports without the sympathy and assistance which should be given them by centralized interests. It is quite plain that the Maritimes are also beginning to see that party politics is not getting them anywhere. I have been greatly interested in the addresses which have been delivered by Maritime men during this debate, particularly one by the hon. member for Kings, P.E.I. (Mr. Hughes). These addresses clearly show dissatisfaction with existing political and economic conditions, and the editor of Maritime Rights, a paper published in Halifax, in last Saturday's issue has the following to say in an editorial:
It has very often been said there is more party politics to the square inch in the Maritimes than in any other part of the world. It looks like it. What has it got us? Are we the most prosperous provinces in the Dominion? We all know the reverse is the fact.
Cut out the party stuff. No matter what side. Put on your war paint and go out after the things that will make these provinces prosperous and you will succeed. We have the country: we have the resources; we have the men; we have the money too; and what we do not have we can get. There is nothing wrong with the Maritimes. The trouble is with Us the People. Forget party and there will be a flow of life blood through your veins that will surprise you. Just look round and see the mess things are in generally and ask yourself who are to blame. The answer will be as plain as the nose on your face: you.
After reading this and knowing that no part of the Dominion has stuck to party politics so faithfully or long and without results as the Maritimes, I am convinced that the psychology of the movement at present in those provinces is precisely the same as it is in the west and in many parts ot Ontario, although, perhaps, not quite so fat advanced. I am also convinced that in theii hearts these Maritime men are not satisfied with the' present party system. Consequently I have no hesitation in giving to them the old Macedonian invitation to "come over and help us," or I might put it in more up-to-date language by saying; "Come on in, the water is fine."
I would ask your indulgence, Mr. Speaker, for a few moments while I revert to some matters which are more or less parochial, but which, while they may not at the present time be closely connected with the budget, may some day have a very direct bearing on the finances of the country. I would refer first to the necessity for a survey of the great hinterland in northern Saskatchewan lying around the south of lake La Ronge. I might point out that lake La Ronge is a lake of considerable size. I think it might possibly cover some 400 square miles. It is surrounded by a rocky formation. This rocky formation is a continuation of the Laurentian range starting in Quebec, running through northern Ontario, northern Manitoba and on into Saskatchewan. Prior to the present time, owing to its inaccessibility, this portion of the Laurentian range lying in Saskatchewan has been very little explored. Now, there is a wagon road constructed by the provincial government from Prince Albert to Montreal lake, a distance of sixty miles, and from there to lake La Ronge there is good water connection, in fact right into the Churchill river and on into A/fv -r>r*in +* ic that I would like that some attention be given to this matter in the shape of a survey of the shores of the lake, also that this be followed by an aeroplane survey such as has been undertaken in some other parts of the north country, so that prospectors going in there will have something to work upon. This part of the Laurentian range contains the same minerals, such as gold and copper, that have been found in other parts of it. But it contains another mineral that has not been discovered in any portion of the Laurentian range to the east, and that is coal. In proof of that I would read a couple of extracts from speeches delivered by Hon. C'has. A. Dunning, Premier of Saskatchewan, in the legislature there. The
The Budget-Mr. Knox

first was delivered on the 23rd November, 1920, and will be found in the Sessional Papers of that year at pages 40 and 41. He says:
I should refer at this point to the preliminary northern exploration which was made in the past summer. Some publicity was given to the matter. It was the intention of the government to make arrangements to either confirm or disprove the rumours which had been persistent for many years, circulated by Indians, trappers, Hudson bay men, missionaries and so on that coal existed in the neighbourhood of lac la Ronge. Arrangements were made for an exploration party to go into that district and to verify the existence of coal and also to bring back samples.
I have stated the tremendous economic importance of the presence of good coal in that portion of the north. The presence of good coal in that portion of the north would mean tremendous development. In addition to investigating coal the exploration party made a reconnaissance survey of a considerable area of the north-eastern portion of the province, the trip embracing all told over one thousand miles north and north-east of Prince Albert.
Naturally the party could not, in covering such a large amount of territory, do a great deal of detailed prospecting. That class of work must still be done by the prospector who is prepared to wander off with his pack on his back and his pick and shovel and take chances on what he may find. No government organization has ever arranged to take the place of the prospector in the search for precious metals.
I have the major part of the report of this party at the present time.	Lieutenant-Colonel Garner was
in charge of the party and I have his diary which makes interesting reading and gives a good deal of information as to what is to be found in that section of the north. The reports from the geologist and mines expert of the province representing coal I have not yet received but as regards coal I can say that it is there. It is a kind of coal similar in character to the coal which is found in the south and therefore a low grade lignite coal. As to whether it will be possible to create out of it a commercial commodity in the future it is difficult to say but while I do not want to be too optimistic, the situation of the coal, the nature of its overlay and the nature of the material underlying it is such as to lead to the hope that somewhere in the vicinity of this seam there may be coal of a considerable better quality. In the bottoms of some of the streams drift coal is present also.


I have in my possession a sample of sand brought back by the party from a large deposit of pure white sand. It shows on analysis 99 per cent pure silica which means an excellent glass sand. The deposit is 150 miles north of Prince Albert but it is a valuable resource. The only other raw materials needed for the manufacture of practically all grades of glass are sulphate of soda of high purity and some lime. Sulphate of soda and fuel are available in large quantities in our province and there seems to be the opportunity in the future for the establishment of a glass industry.
The second extract from Mr. Dunning's speeches is under date of January 24, 1922, also dealing with the same matter. Mr. Dunning says:
This summer the government picked out what appeared to be the most logical place for intensive survey work and the party was asked to devote its attention to that particular area, the Wapawekka lake and Bear hills, immediately south of Lac La Ronge.
I do not think the country covered had been explored 
previously. Travel in the north is largely restricted to water ways and in portions of the country covered by the party this summer they are satisfied that even the Indians did not know the country intimately.
The party did not find any great coal deposits or oil. The thing I would most like to find in our north land is coal, rather than gold or copper. The best guarantee of immediate development of the north, from the railway and agricultural point of view, would be the discovery of good coal beyond the present range of settlement. It would mean immediate railway development. The discovery of coal of good average quality, for smelting for instance, would mean a tremendous industrial development because of the copper deposits on the boundary between Manitoba and Saskatchewan which are handicapped by reasons of the fact that their ore must be ship-ped to Trail in British Columbia for smelting. The discovery of a coal suitable for smelting purposes in the north would mean industrial development similar to that which took place in northern Ontario under similar or even more difficult conditions than in Saskatchewan. I had been hoping that the result of the trip of the party would result in the discovery of good coal. A year ago the party confirmed reports of coal, which had been made prior to settlement in this country, by Indians, prospectors and travellers. It is true that coal is there.
I should like to read a brief extract from the report of Mr. J. B. Tyrrell, in the Geological Survey report of 1892. Mr. Tyrrell is a noted explorer and geologist. It is in reference to an examination he made of a deposit of drift coal on the banks of the Saskatchewan river 7 miles east of Prince Albert, at a place called Red Cliff. In connection with that examination he sayS:
This sand is composed of grains of quartz in layers, interbedded with layers of fragments of black lignite, the latter occasionally in well rounded pebbles an inch or more in diameter. There is a great quantity of this lignite, the bed of sand, whose thickness could not then be determined, being often composed largely of it.
These rounded grains and pebbles of lignite have clearly been washed some distance by the water, and deposited alternately with the heavier quartz grains as the current varied in strength, but the quantity present would seem to be too great to permit of its having been washed from any of the known coal seams on the river, the lowest of which is near the mouth of Egg Creek, 400 miles higher up the stream. It is much more likely that these fragments of lignite have been washed from a deposit, not at any great distance, which is now covered.
In order to determine whether such a deposit of coal exists in the vicinity or not, also whether the Dakota sandstone is here tar-bearing or not, as well as to ascertain the exact nature of the cretaceous section in this district, where the surface appears to be almost everywhere covered with drift, it would be of the greatest service to make a boring down to the underlying Palaeozoic rocks. If either coal or oil were met with the value of the country would be enhanced to many times the cost of the boring.
My point is that it would be a great advantage to this northern country if a survey such as I have suggested were made, so that prospectors going in there could secure maps of the country and know where they were going, and I would urge that this survey be included in the programme for this year We

The Budget-Mr. Knox
have the engineers already in the employ of the department, and we have the aeroplanes already doing this class of work, so that I am not asking for any further expenditure.
Another point to which I would refer is in connection with the soldier land settlement; and I might say that I have always had and still have same hope for this scheme working out to the advantage of the soldier settlers, but there is no question in my mind that a readjustment in value, such as was suggested by the special parliamentary committee last year, will have to be brought about, and there is no excuse for leaving this in abeyance any longer if the confidence of the men is to be retained. A short time ago there was some mention of closing the soldier settlement office at Prince Albert and transferring the work and supervision to one of the other two offices in the province, in spite of the fact that the Prince Albert district has more men under the board than either of the other two. It may not have as much money lent out, but following out the spirit under which the act was first introduced, the welfare of the men, and not the money, should be the first consideration.
I also find that the Prince Albert office controls more acreage under the act than either of the other two offices in the province, the total being 756,410 acres for Prinoe Albert or 226,005 more than Saskatoon and 88,923 more than Regina. In regard to acreage, Prince Albert is fourth largest in the Dominion, in which we have altogether thirteen districts.
As regards the number of men settled under the act, Prince Albert has 3,145 or 579 men more than Saskatoon and 201 more than Regina. In this respect it is again fourth in the Dominion. As to the number of total repaid loans, Prince Albert heads the list with a good lead as far as the province of Saskatchewan is concerned. It might be interesting to know in what portions of the Dominion the soldier settlers under the act are showing up to best advantage. This is easily discovered by looking up the adjustment or salvage cases which may be looked upon as the failures. In this respect the Prince Albert district has a much smaller percentage of failures than any of the other twelve districts in the Dominion.
I might say I am not surprised at this, because I have farmed in this district myself for the last thirty-five years, and I do not hesitate to say that last year was the only year that could be called a real set-back in all that period. I have figured out here
the percentage of failures in the thirteen different districts. They are not given in percentages in the report of the Soldier Settlement board, but I think these are perfectly reliable. I find that the percentages of failures or of salvage cases at Prince Albert was 11.7. I am giving these in their order of merit, starting with the lowest number of failures and working up. The next in order of merit is Prince Edward Island, 17.11. Saskatoon follows very closely with 17.14 and Vernon, British Columbia with 18.21. The percentages are as follows:
Office	Percentage
Prince Albert	 11.7
Prince Edward Island	 17.11
Saskatoon	 17.14
Vernon, B.C	 18.21
Ontario	 18.22
Regina	 18.9
Calgary	 19.3
Nova Scotia	 19.4
Vancouver	 20.6
Edmonton	 24.2
New Brunswick	 25.9
Manitoba	 30.04
Quebec	 38.6
Dominion total	 21.5
Comparatively speaking, Mr. Speaker, I should like to say that the Prince Albert district has been well handled, and I sincerely hope we will hear no more about closing the office while the men require it.


James Alexander Robb: Just for information, is the
percentage based on the whole, or on the number within the area?


Andrew Knox: In the different districts.
I was giving the percentage for that district, with Prince Albert as I said very much lower than any district in the Dominion, being 11.7, while the next was 17.11. This is largely based on local conditions.
There is one other matter which I propose to touch on very briefly-I refer to the conversion of the hon. Minister of Agriculture (Mr. Motherwell) in favour of the Hudson Bay railway. During the many discussions, Mr. Speaker, an which I have taken part in regard to the completion of the Hudson Bay railway, I have often wondered why the hon. minister could1 not see his way to give us his influential support. But the mists were cleared away a few days ago when, in the course of that memorable three-hour speech of his, he informed us that after his trip up the line as far as Kettle rapids-which by the way is still ninety-two miles from the bay-he was an out-and-out believer in the scheme, and that Hudson bay was the logical outlet and inlet for the prairie provinces. Up to this point he gave us encouragement. Then he showed the real
The Budget-Mr. Knox

thought in his mind by informing the House that the engineers, navigators and other qualified officials who had investigated the comparative merits of Port Nelson and1 Fort Churchill had made a grave mistake by selecting the wrong port and spending over $5,000,000 there, and that a truce should be called for another indefinite period while further investigations might be undertaken to determine which should be the tidewater terminus. I am sure the House will agree with me when I say that it is most regrettable that the hon minister did not visit Kettle rapids years ago. But why did he not continue on to the bay? He could not learn anything about the suitability or otherwise of the present terminus while he remained at Kettle rapids, because he was still ninety-two miles from tidewater. We are almost forced to the conclusion that he had his line of action already decided upon before he started for Kettle rapids. Such a statement coming at the present time to me looks somewhat fishy, too much of the red herring variety -a further excuse for further delay. I hope, Mr. Speaker, to have an opportunity of speaking further on this matter in the near future.


Mr. W. D. EULER (North Waterloo):: Mr. Speaker, I do not propose to answer the observations of my hon. friend who has just completed an excellent address, further than to say, if I may do so without offending my good friends across the way, that I hope some day his grandson will Come to this House and still have an opportunity of advocating the completion of the Hudson Bay railway.
My only excuse, Sir, for entering the debate, which has already been excessively prolonged, is my desire to press upon the government consideration of a suggestion which, in my humble opinion, is of vital importance to Canada. It has to do with the National railways, and while I realize that the time for debate on the railway probably would be more opportune when the estimates are under consideration, yet certain observations have been made from this side of the House with regard to the disposition of the Canadian National system that I feel should not go unchallenged. I desire also to discuss very briefly a few other matters which come more properly within this debate. At the outset let me say that I am not a pessimist regarding the future of Canada, and I have no sympathy with those who, perhaps unwittingly, by their observations in this House are doing something to destroy the reputation and the credit of Canada abroad; and, what is infinitely worse in my opinion, are destroying the confidence of Canadians in their own country. Our debt, Sir, is enormous, our

annual obligations of some $340,000,000 by way of taxation constitute a very heavy burden; but it would be folly for members on this side, and almost treason on the part of members of any party, to exaggerate unduly the gravity of our financial situation; nor would it be wisdom to deny that it is grave. I propose to do neither, but to the best of my ability to make some reasonable suggestions as to what the government can do to remedy the situation.
I congratulate the Acting Minister of Finance (Mr. Robb) upon his presentation of the budget. I do not do so in the ordinary stereotyped manner that is sometimes expected of a supporter of the government. The budget gives some reason for satisfaction. In the face of falling revenues it comes as a surprise and a gratification to the people to know that instead of being confronted with a heavy deficit we have a small surplus. True, our friends diagonally opposite, and perhaps some of our friends directly opposite, have figured that with the capital expenditures on our National railways we have a very heavy deficit. But my position with respect to that has already been made quite clear, and I am not going to take time by discussing it now. In congratulating the government on the budget, I do not mean to say that I agree with all that has been done or that has not been done-for there are in my opinion some errors of omission. I should have liked to see the entire abolition of what are sometimes called the nuisance taxes. From the very first day when the stamp taxes were introduced by the former government I was opposed to this form of taxation. I believe they are properly named nuisance taxes. If taxes were ever devised to annoy the public, you could hardly conceive of anything to better fulfil that purpose than the imposition of stamp taxes. The tax on receipts comes in the same category. In my opinion that form of taxation is absolutely illogical and has only the one recommendation-that it produces the revenue.


Mr. MARLER:: Which tax?


William Daum Euler: The taxes on cheques, receipts and commercial paper generally. I should also like to have seen a reduction in postage rates, and I believe that a return to the prewar figure would not have resulted in loss of revenue. In that connection I should like to quote from the Canadian Milling and Grain Journal the following article:
To stimulate business
Following the change of government in Great Britain, the Manchester Guardian Commercial, circularized fourteen of the leading business men of

The Budget-Mr. Euler
that, city, asking each to suggest how best the new Baldwin administration could stimulate trade. The replies indicated that while many of the writers had strong and original views on the subject, there was a measure of agreement among them, which should not be without interest in Canada. Seven out of the fourteen declared that if the government would remove the taxes on cheques and receipts and reduce postage rates to pre-war level, then business all over the kingdom would receive a great impetus. There may be a suggestion somewhere here for Ottawa.
I would draw attention also to one or two weaknesses, as I see them, in the present sales tax. A wholesaler or a manufacturer, under the Sales Tax Act, is made the collector of the tax. He puts the amount of the tax on the invoices which he sends out to his customers, and makes his monthly remittances-
I think they are monthly-to the government. In many cases he has not yet collected the tax from his customer when he forwards the .account to the government at Ottawa. It has occurred quite frequently, and I know some eases in point, where manufacturers have sold large quantities of goods to retailers in other provinces, paying the tax to the government, and later these retailers failed in business and did not pay either the principal amount of the invoices nor the tax. Yet the government holds the manufacturer responsible for the payment of that tax. He is in the unfortunate position not only of losing his principal, his capital, but of paying the tax when he was not really intended to pay it. In cases of that kind, it seems to me that if the manufacturer has not been reimbursed he should receive a refund or rebate of the amount paid in respect of that tax.
There is one other weakness in the law, to which I would like to refer. It is a discrimination which I consider unjust-and I should not like the members of the House to think I have any personal interest in the matter at all. It refers to the printing business. We have on the statute book a law which exempts from the operation of sales tax all printers who do a business of less than $10,000 a year. A man who has a business, we will say, of $9,990, escapes paying the sales tax, while the man who does a business of $10,010 is subject to the payment of the tax. It seems to me that is a gross injustice and should not be continued. I see no justification whatever for it.


Mr. GOULD:: Would the hon. member accept it as an axiom that the people object to taxation according to their understanding of the tax?


William Daum Euler: I am not sure that I get the meaning of the hon. gentleman's question.


Oliver Robert Gould: The objections of the people to taxation are greater according to their understanding of the tax in question. That is, they can see more distinc' y through the principle of direct taxation t an the principle of indirect taxation.


William Daum Euler: I am taaling entirely with
direct taxation in this particular instance. I see no reason why one m in who does a little smaller business than another should be excused from the payment of a particular tax while the man with the si ightly larger business has to pay it. There is no reason why anybody should be exempt from sales tax, in the same line of business at l'.ast.


Oliver Robert Gould: My idei was that a person studying the principle ol taxation will more readily understand the pri iciple of direct than the principle of indirect ta xation and will consequently object to the latter more quickly.


Mr. HUGHES:: With reference to the sales tax on the printing business, what change, if any, does the hon. member suggest?


William Daum Euler: I think that is very obvious:
I should say they should all be taxed. I would like to make reference to some of the remarks made by hon. gentlemen "angularly opposite,'' as they have been described. The hon. member for Fort William and Rainy River (Mr. Manion), who, I am sorry to observe, is not in his seat, made a very excellent speech some weeks ago. H I had any criticism to make of what he said-and of course I have no authority to lecture anyone-I would say that t/he severity of his language did not add anything to the strength of his argument. I think also he was a little careless with his figures, but I am not going to go into that just now. His speech was interesting. I was rather surprised that he should quote in support of his contentions such a man as President Coolidge, who, after all, is an American and not entirely unprejudiced. He also made some very interesting references to historical events; and his references to my hon. friend the Acting Minister of Finance (Mr. Robb) were not just as courteous as they might have been. I remember one interesting allusion he made to ancient history: he spoke of Nero fiddling while Rome burned, and he drew a comparison with the action of the government in that regard. I was almost sure when he did that that he was about to lead up to another interesting historical incident and make a comparison with that well known occasion when the Gaul was at the gates of Rome and the cackling of the geese saved the people of that city. He also criticized the lack of
The Budget-Mr. Euler

unanimity on the part of hon. members on this side of the House. His remarks in that respect had reference chiefly, I think, to differences of opinion on this side with regard to the tariff and with regard to the principle of public ownership. He is quite right in that. There are members on this side who are protectionists; there are some-two or three, perhaps-who are free traders; there are others who believe in a tariff for revenue, or, we will say, moderate protection. But the same thing exists among our friends diagonally opposite. I think I can remember last year the hon. member for Kent, N.B. (Mr. Doucet) moving a resolution with regard to higher tariffs. I think I can also remember that this year when the hon. member for Macleod (Mr. Coote) moved a resolution in favour of the reduction of the tariff on automobiles, the hon. member for Kent voted for that proposed reduction.


Alexandre Joseph Doucet: If the hon. gentleman will permit me, the amendment of last year declared for tariff consistency, fiscal stability-a consistently maintained tariff policy; and this year the resolution to which my hon. friend refers dealt with the reduction of a duty which is higher than that on any other article imported into this country.


William Daum Euler: I am not finding any particular fault with my hon. friend for voting either one way or the other. I am merely pointing out that it was a case of the pot calling the kettle black. We also had other members from the Maritime provinces, even a member of the former Union government- the hon. member for St. John and Albert (Mr. Baxter)-voting for a reduction in the tariff. So did the hon. member for York-Sunbury (Mr. Hanson) and the hon. member for Royal (Mr. Jones). I am not finding fault with them, but the fact remains that members of the House will vote according to their own interest, whether it be on the question of tariff or not; and occasionally they will vote against the attitude taken by their own leader.
I might make some reference also to the other question in respect to which hon. gentlemen opposite say we have been inconsistent, that of public ownership. Members on this side, I am sorry to say-a great majority of them, I believe-are opposed to public ownership, while some of them, including myself, are believers in the principle of public ownership. On the other side we have heard very little with regard to public ownership; so far as I can remember, only one hon. gentleman, the member for South York (Mr. Maclean) has this session said one word in 
favour of that principle, although scattered among the members of that party are those who in former days supported it very strongly.
We have the amendment now-and it has not been discussed to any considerable extent-for the reduction of the sales tax. In theory, Sir, I am in favour of the amendment. We also saw in the press before the session opened a suggestion on the part of the leader of the opposition that we should have a reduction in freight rates both east and west. The thing that I desire to point out in connection with both these suggestions is that both must mean a reduction in the revenues of the country, and I have heard no practical suggestion as to how those revenues are to be replaced.
The hon. member for York-Sunbury condemned such arrangements as the Crowsnest pass agreenient. He stated,-he is not here and I shall not do him any injustice, but I think this is correct-that he was entirely opposed to any special agreements that would give preferences to one 'class of the people or to the people of one section of the country as against those of another. That is a very sound principle; but in the very same speech he also stated that it was necessary that the people of the Maritime provinces should receive special consideration so far as freight rates were concerned. I see no consistency in that attitude.
There are many things I should like to discuss, Mr. Speaker, but I khall deal only with the subjects which to me seem of greatest importance at this time. It is true that business stagnation exists in Canada. I do not believe it is more serious than it is in the United States, but I would like to deal briefly with what I consider to be the causes of that depression, and to suggest as far as possible some remedy. I would say that there are three chief causes: over-industrialization; lack of confidence on the part of business men-for reasons which I shall examine a little later-and last, and greatest of all, high taxation.
With regard to over-industrialization, I would say that during the prosperous years of the war, and later, in 1920, the manufacturers of this country-I am not blaming them for doing it-extended their businesses more than was warranted by the business that was offering in this country itself, and with taxation becoming high, costs became greater, and people not having the same purchasing power as they had before. These two are the causes of over-industrialization. We have factory plant in this country which is more

The Budget-Mr. Euler
than sufficient to supply the needs of the Canadian people. Now if I am right in that statement, then it points clearly to the necessity of developing foreign markets, and I am glad to say that this government is doing something in that direction.
But, Sir, if foreign markets are to be developed they must be developed in a systematic way. I do not believe in paternalism as a principle of politics, but in my opinion the government, or the Department of Trade and Commerce, ought to have in every country where some trade may be looked for commercial agents to advance the business interests of this country.


Robert Forke: While I agree entirely with
the remarks that are being made by the hon. member, would he kindly explain-I am asking just for information-how we are going to compete in foreign markets when we are continually being told that Canadian manufacturers are unable to compete in foreign markets owing to the low cost of production in these other countries?


William Daum Euler: The hon. gentleman is falling into this very common error. When we speak of foreign markets and low cost of production, we are not saying that that obtains in all countries of the world. There are certain countries in Europe to-day manufacturing certain lines of goods in which it is utterly impossible for Canadian manufacturers to compete at this time; but there are some countries in which we can sell things, as witness the proposed trade agreement with Australia, and the suggestion of the hon. member for Ottawa (Mr. Chevrier) that we should be able to do more business with South Africa.


Robert Forke: I want to put myself right.
I do not believe in those arguments myself. I only put them up to you.


William Daum Euler: I have no fault to find with
the hon. gentleman's objections to my argument.


Robert Forke: I do not mean your argument, but the argument that we cannot compete with other countries. I think we can, if we go about it right.


William Daum Euler: I would just put this up
to my hon. friend-and I would not like him to think that I am in any sense an extremely high protectionist: I think he will admit that in some countries of Europe at least, and of Asia as well, the cost of labour is very much lower than it is in Canada or the United
States. If wages are higher in the United States than in Canada, Canadians will naturally drift to the United States. I think that follows.


Robert Forke: If the cost of living in the
United States is no higher.


William Daum Euler: Well, we will say that. I
think the cost of living is practically the same in Canada as in the United States. Now, if wages are higher in the United States than in Canada, Canadians will naturally go to the United States. If wages in Canada are as high as they are in the States and if they are lower in Europe, I say it is very difficult for Canadians to compete with the low-paid labour of Europe. I did not intend, Mr. Speaker, to go into a lengthy dissertation on the tariff to-day at all.


Henry Herbert Stevens: The hon. gentleman stated that one of our difficulties in Canada was that we were over-industrialized. In view of the importation last year of $140,000,000 worth of iron and steel products, does he still contend that Canada is over-industrialized in that line?


William Daum Euler: I would not say that of
iron and steel, no; my statement is made in an entirely general way. As for the United States, Mr. Speaker, I think it is high time indeed, both for commercial purposes and for the sake of our national self-respect, that we should appoint a representative at Washington. I remember very well that an appropriation for that purpose was made under the former government. No appointment ever was made by that government, and that neglect has been continued by this government. For my part, I cannot understand why there should be such a long delay when the desirability of such action is admitted on all sides. We may as well admit that our interests are inevitably bound up with those of the United States. The United States does not admit it, but she must ultimately realize that she cannot prosper permanently unless she obeys the well-known economic law that she cannot hope to sell if she does not buy. A well-known American economist has given it as his opinion that if we Canadians survive for another ten years, which, of course we will, the United States will have 135,000,000 of people, and she will then purchase all the foodstuffs that Canada can produce. We ought, I say, to put ourselves in a position to meet those conditions as they come, and one of the things we should do is to appoint a Canadian representative at Washington as a necessary step in that direction.
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I spoke of lack of confidence. Our friends of the official opposition say that the tariff is not properly adjusted, and that the uncertainty as to its stability -causes the waning of enterprise and a lack of -confidence in every way. I think there may be some justification for that statement. My position on the tariff is, I think, pretty well known. It is the same as it was last year, it is the same as it was the year before, and it is exactly the same as it was when I entered this House some eight years ago. I am not going to review all that again; I shall content myself with saying that I favour such a tariff as will ensure that .at least a fair share of the 'Canadian home market shall be preserved for Canadian workmen and Canadian industry. I voted against the budget last year, not because the reductions in the tariff were great or startling, not because any industry of -my ridinig was seriously injured; but 'because I believed then as I believe now, that before changes in the tariff are made there should be the most -careful investigation as (to the effect of such -changes. I urged then the appointment of a tariff board, not a partisan body of men but a body of men selected with one object-and only one object-in view, a body of men who have the ability to go into the business places of this -country, with the power necessary to find out exactly the condition of those businesses, and to obtain knowledge and to bring information to this government and to parliament which will enable an intelligent revision of the tariff to be made.


Robert Alexander Hoey: How would such a commission determine costs in other countries? The hon. gentleman may have read how the tariff -commission of the United States attempted to ascertain costs in Germany and France, and how unsuccessful they were, and how they threw up their hands in despair at making the actual cost basis a factor in the tariff schedules.


William Daum Euler: Costs, of course, would be only one feature.


Robert Alexander Hoey: Bu-t a very important feature.


William Daum Euler: If you want to search out the books of a company or find out the costs of any manufacturing enterprise, I do not think it would be very difficult for expert accountants to go to those places and find out exactly what the costs are.


Robert Alexander Hoey: In foreign -countries?


William Daum Euler: Not in foreign countries.
There they would be entirely at the mercy of the people of that country.


Robert Alexander Hoey: Then you have no comparison.


William Daum Euler: Under the former government, where the dumping clause was supposed to be applied on the basis of what goods cost in the United States, it was found impossible to enforce that clause because Canadian officials would not be permitted to go into United States factories and make investigations.


Henry Herbert Stevens: They do it now.


William Daum Euler: I think you would find a great deal of difficulty in sending any Canadian into a United States factory, a man who has no particular -business -there, and who does not represent Americans, -and get them to give him free access to their books to ascertain anything he may choose to obtain.


Henry Herbert Stevens: The Customs Inspection department -check u-p the cost of goods now in exactly that way.


William Daum Euler: I think all they check up is this: If they think an invoice of goods -coming into Canada is too lp-w, all they do is to go to Boston, New York or some other place of business and check up the prices named in that invoice with the regular prices at which these things are sold throughout that country.
Mr. ROBB. They find the fair market value.


William Daum Euler: Yes, the fair market value. I congratulate the Prime Minister and the government upon their decision to create such a board. We 'have had the statement of the minister that upon that board shall be certain experts from the department. I have no fault to find with that, but I should 'like to urge upon the government as strongly as I can, that upon that board there should be a preponderance of independent men chosen entirely for their fitness -for the work to be done and clothed with ample power to do it properly.


Robert Alexander Hoey: You will have to import them.


William Daum Euler: In that case we will put a
tariff against them. Unless what I have suggested in connection with the tariff board be done such a board may very easily do more harm than good. On the other hand, if the personnel of that board is what it ought to be a great deal of good will come from it. I believe such a board will inspire a good deal of confidence because our 'businessmen will know that before changes in the tariff are made they will at least be given an opportunity to present their side of -the case; and in that way-although not entirely, because I believe the responsibility for taxation and the making of tariffs must always remain with parliament and with the government-we may, to some extent at least, keep the tariff out of politics.

The Budget-Mr. Euler
Now I am going to refer to another feature of the tariff with which probably many members will not agree. I took the opportunity last year-I think twice, both in the debate -on the Speech from the Throne and in the debate on the budget-to refer to what is known as the British preference. Our friends angularly opposite are in favour of higher tariffs. I would say to them that nothing else would be more properly and more nearly to their hand than action to abolish the British preference. My reason for being opposed to the British preference rests entirely upon the commonsense basis that if protection-if you want to call it that-or a tariff for the maintenance of your industries is right and proper,
I do not see why there should be any qualification at all one way or another. Tariffs are a matter of business and not of sentiment, and the sooner we proceed on that basis the better. For my part I see no reason why the British preference should be maintained if the tariff is to be used for the preservation of Canadian industry, in which I believe. If a Canadian industry is ruined because of competition from Britain I do not think it makes it any more bearable for the Canadian who is ruined if that result has been brought about by a British industry rather than by an American industry; and one of the defects, one of the abuses, in reference to that preference is that large quantities of goods come into this country under the preference as British goods that are not British goods at all. They merely come from other countries via Britain and get the benefit of the preference.


Robert Alexander Hoey: More than we sell to them7


William Daum Euler: Possibly. I was going to say that if our friends opposite, the members of the official opposition, are sincere-and I am not questioning their sincerity with reference to the tariff-I would suggest that if the leader of the opposition will submit a resolution to this chamber for the cancellation of the preference I shall support it with my vote. If he does not I rather think he owes an explanation to Canadian industry.


Mr. MacLEAN (Prince):: I think you are perfectly safe in making the suggestion.


William Daum Euler: Perhaps so. But, Mr. Speaker, while these things are factors in the business depression that exists, the greatest of all is the matter of high taxation to 5 p.m. which I propose to devote my remarks now. We have the sales tax, the income tax, the stamp taxes, and the excise taxes of various kinds including the luxury tax. All these increased the cost of production and result in high prices, and so 158
limit the power of the people to purchase. High taxation without a doubt is to-day the chief obstacle to national prosperity. And what, Mr. Speaker, is the remedy? Our friends opposite suggest economy and a higher tariff. Well, Sir, I am in favour of economy, of course, as is every other member of the House, and a reasonable degree of protection. The government has made some progress in the direction of economy, although that is denied. But economy in administration is admittedly very difficult. Still there may be room for improvement, and perhaps the one direction in which some improvement might yet be made is in that much abused arm of the service known as the civil service. Now, I do not believe that civil servants as individuals are overpaid; in fact I am certain that a good many of the men in the service are underpaid, and we very frequently lose them because we do not pay them as much as they are worth; but I have a suspicion or more than a suspicion that it is still true that the civil service is overmanned, and we have had statements of ministers of the crown to that effect. Consequently it occurs to me, and I have said this before, that if some survey were made of the other departments such as was made in the case of the Printing Bureau it might be found possible to effect some economies there. But when all is said and done there is still a large residue of expenditure which is uncontrollable. Our debt, exclusive of the railways, is nearly two and' a half bdlions of dollars; I think we realize just a little more accurately what is meant by that when we say it is two thousand five hundred millions of dollars. Pensions are practically uncontrollable, and the cost of the ordinary administration of the country's affairs cannot be reduced below a certain minimum. I he interest on the war debt is enormous, and while something can perhaps be done from time to time by way of careful refunding, as was done last year by the Acting Minister of Finance, that burden must remain heavy. We had a reference the other day to the waste that took place in connection with the war. I have nothing to say with regard to that, but after all I think our friends of the opposition should not be hypercritical in regard to war debt, and perhaps with regard to taxation. After all, our debt was created largely when our friends opposite were in office and the most of the responsibility is theirs. Wars are costly and their burdens continue to rest upon generations to come.
But there is one large item of our tax burden which in my opinion can be wiped out if the government has the inclination and

The Budget-Mr. Euler

the courage to grapple with the problem. That item is the loss suffered each year by the National Railways. Now I have no criticism to make of the head of the National Railways; rather would I say a great deal that stands to his credit. He came to us less than three years ago. He found a series or group of railways more or less disorganized; and I think the House will admit that he has welded them into the very efficient system known to-day as the National Railway System. Those of you who travel over the line, and you all do, will admit freely that the service on the National to-day is not excelled in Canada and I think that means on the continent of North America. I had the pleasure of a trip over the National railways last fall from Toronto to Prince Rupert, and throughout the whole of that system the service was such as would make any Canadian proud.


Harold Putnam: Should we be proud of that or should we economize?


William Daum Euler: I am proud of it. I am quite free to say that I am proud of the service that is being given by the National; and if Sir Hentry Thornton has done nothing else, he has created a spirit of esprit de corps among the employees of that road that is simply admirable and is not excelled by the employees of any other railway, and I should like to say to my hon. friend that that costs the country nothing.


Harold Putnam: That has nothing to do with the question of unjustifiable luxury.


William Daum Euler: It also stands to the credit of the president of the road that in a year which was a bad year he has been able to cut expenditures in operating the road some $14,000,000, and has showed a net operating revenue of $17,000,000. Yet in the face of all that the loss each year is very high. The National railways owe to the government of Canada the sum of $560,000,000, not including interest on that debt for some years. The interest upon this sum last year was $31,000,-000-I am giving only the millions-which has to come out of the pockets of the taxpayers of Canada. That sum of money forms part of the consolidated debt of Canada and it is taken care of in the annual estimates of the Acting Minister of Finance (Mr. Robb). In addition to this item of $31,000,000, we had to contribute on last year's account some $21,000,000 towards paying fixed charges on the bonds of the railways owned by the public, that is not by the gov-
[Mr. E-ilarl
emment of Canada. That makes a total amount upon the taxpayers of Canada of the $31,000,000 plus the $21,000,000, or $52,000,'000 each year.


Herbert Meredith Marler: That is for interest?


William Daum Euler: Yes. I am not referring to the amounts put on capital expenditure which my hon. friend also treated as a loss and deficit. Upon that point I cannot agree with him.


Herbert Meredith Marler: Temporarily.


William Daum Euler: Until the business pays and then it all becomes a surplus?


Herbert Meredith Marler: No.


William Daum Euler: That is what the hon. member said the other day.


Herbert Meredith Marler: Until it becomes active.


William Daum Euler: I believe we might carry out a plan by which, instead of having a loss of some $50,000,000 a year we could show a surplus of some $50,000,000. I am sure that will appeal to hon. members, and in a very few moments I desire to go into that a little more fully. That really is my reason for rising to speak to-day.


Herbert Meredith Marler: A Daniel come to judgment!


William Daum Euler: Thank you. Before doing that, I should like, for the sake of discussing the matter intelligently, to give a number of essential figures in connection with the National railways. First, the investment in road and equipment is about $1,837,000,000. The total assets of the road amount to about $2,074,000,000.


Robert Forke: How are those assets figured?


William Daum Euler: That is what has been charged up as the cost. They may not be worth that now. Loans from the government, as I stated a few minutes ago, amount to $560,397,957.64. The interest on the loans is not included in that sum.


Herbert Meredith Marler: There are other Capital
amounts besides that, not included in that amount.


William Daum Euler: Interest on loans by the
government amounted to $31,000,000 last year. The debt to the public of Canada, not the government, but outside bond holders, many of whom the hon. member for South York (Mr. Maclean) says are foreigners, is $913,913,082.80. The fixed charges or interest on that debt amounts to $38,361,704.14. Taking

The Budget-Mr. Euler
then fixed charges of $38,361,704.14 to the public and interest on the moneys owed by the railways to the government of $31,000,000, we have a total in round numbers of $69,000,000 of fixed charges on the National Railways. From this we deduct the operating revenue of $17,000,000, leaving, as I stated before, a net deficit of $52,000,000. I think it is only fair to say at this point that this is not fairly chargeable to public ownership of railways. I will read just an extract from the Toronto Globe which bears on that:
A large part of it represents the mistakes and extravagances of governments and private owners and promoters in the past, and is not based on replacement values. It is announced that the management will submit before long a consistent statement of the case for writing down the capitalization. It will be a highly important question for parliament to decide, as the writing-down process would involve an increase of the national debt. The advantage of lower fixed charges would be that it would give the National Railways a definite financial objective which they might hope to reach within a few years.
I quite appreciate the statement made by the hon. member for Vancouver Centre (Mr. Stevens) some time ago that writing down of the capitalization of the National Railways is not going to wipe out the debt. The debt will remain, of course. That is somewhat elementary, I think, but this will give the National Railways, under public ownership, just the same chance as private ownership would have had if those roads had been organized under a new company and had been conducted as a private corporation.


Herbert Meredith Marler: It means simply that you are transferring to consolidated fund so much interest that has to be paid, instead of charging it against the railways. The interest there is exactly the same.


William Daum Euler: I am not questioning that
at all. We are not going to save any money by doing it, but we are going to give the principle of public ownership as fair a chance as these railways would have under private ownership. These things were piled up under private ownership, and if these railways had been taken over by a privately organized company, the hon. member knows that they would have been reorganized; that these amounts would have been written down, and that they would have gone on with a capitalization more like that of the Canadian Pacific, about which my hon. friend knows more than I do.


Herbert Meredith Marler: I do not. We would be
simply deluding ourselves into a false position. In other words, we are making a bookkeeping entry and putting on one side certain millions 158i
of dollars and imagining, for it is purely imagination, that as regards the railways we are paying less in fixed charges. That is the point I make.


William Daum Euler: I am quite willing "to let the House judge what is desirable. I think the House understands what I mean.


Alfred Edgar MacLean: Will the hon.
gentleman give the House the amount that is carried by private parties in bonds?


William Daum Euler: I gave that before.-$913,913,-082.80.


Alfred Edgar MacLean: What is the
interest paid on that?


William Daum Euler: It is $38,361,704.14.


Alfred Edgar MacLean: What percentage is that?


William Daum Euler: It varies. I cannot give
that exactly. I spoke last year about the duplication and waste involved in the operation of these two great railway systems. I did so at that time as chairman of the select committee on estimates for the National Railways. In our report at that time appeared this paragraph:
Your committee desires to direct the attention of the government to the apparent unnecessary competition and duplication of services between important centres by the Canadian National and Canadian Pacific railways and to suggest that the railways be invited to consider the whole question with a view to elimination, wherever possible, of unnecessary duplication and competition, so as to conserve the revenues and resources of both companies while still rendering adequate service to the public.
We have heard within the last few days- and I think it is gratifying to all members of the House-that the heads of the two national railways, together with their officials, are getting together with a view to eliminating, as far as possible, duplication of services. That is well worth while doing if we are going to continue as we are. But I think there is a better way, and the hon. member for South York and myself, in the debate on the ocean freight rates resolution, made reference to it. Last year I said-and I said it again in the course of that debate-that I had it on the highest possible authority that a saving of from $50,000,000 to $75,000,000 could be made each year if the two railways were amalgamated and welded into one system. I say now-and again I say this upon the highest possible authority-that if the two roads could be amalgamated, there could be saved the colossal sum of $100,000,000 a year. That is nothing less than a staggering statement.
The Budget-Mr. Eider


Mr. McCREA:: Which system would do the amalgamating?


William Daum Euler: I am coming to that. I know we are going to have a difference of opinion.


George Perry Graham: That is the rock on which we split.


William Daum Euler: If that sum were saved each year to the people of Canada, it would pay the national debt in about twenty years.


Thomas Wakem Caldwell: Does the hon. gentleman's calculation include the saving that would be made on the Canadian National Railways and Canadian Pacific, or on the Canadian National Railways alone?


William Daum Euler: The total saving effected by the amalgamation of the road. That would relieve the heavy burden of taxation. This was the suggestion I was going to make; if we combined the two roads it would immediately solve the ocean freight rate .problem with which we are now wrestling. The president of the National Railways is reported in the paper-1 am not permitted to make any reference to the committee-as stating that the savings would be enormous and would be sufficient not only to pay the operating expenses of the amalgamated roads, but the fixed charges on the debt to the public and in addition to that the interest on the money loaned by the Dominion of Canada to the National Railways. Lord Shaughnessy in his famous proposal figured out a saving of $56,000,000 by amalgamation, and he was calculating on the basis of a condition under whioh the Grand Trunk Railway would not be included. He was ready to cut the Grand Trunk adrift and let that road do the best it rjould for itself. The 'Grand Trunk was added :;o the National system after Lord Shaugh-nessy's .plan was first submitted. I submit ;hat this .matter of the railways and the savings that could be effected is the most important question before parliament and the country to-day, barring none. I say that it is of tremendous importance. If $100,000,000 can be taken off our tax levy each year it will have an effect on the industry of the country that will be simply incalculable.


Thomas Wakem Caldwell: Is my hon. friend not crediting the $100,000,000 to the reduction of taxes, when possibly half of it would be a saving to the Canadian Pacific Railway?


William Daum Euler: It depends on whether you are going to have the railways run by the Canadian Pacific Railway or the Canadian National after the amalgamation is effected.


James Joseph Hughes: If the merger took place, would the service be as good?


William Daum Euler: I think so.


Mr. BROWN:: You could apply to the railway commission to reduce the rates if the railways were merged, the same as you do now.


William Daum Euler: Yes. If parliament decided
that it would sooner have the railway rates reduced than have the taxes reduced, that could be done according to its judgment.


Henry Herbert Stevens: My hon. friend's statement that $100,000,000 would be saved is naturally of vital interest to the country, but a statement made on the responsibility of the chairman of the committee ought to be accompanied in some way with an explanation of where the saving was to come from, and how the figure was arrived at. My hon. friend cannot furnish that.


William Daum Euler: My hon. friend does not
expect to present to the House an itemized statement of where the savings could be effected.


Henry Herbert Stevens: I am not so unreasonable as to expect that an itemized statement Should be given, but I suggest a statement from the chairman of the special railway committee that $100,000,000 going out to the country is of first class imoortance, and ought to be accompanied at least by some geheral intimation of how the figure is arrived at.


William Daum Euler: The general impression is- and I think it is evident to every hon. member Who travels on the railways of Canada- that there is a tremendous degree of duplication of service, absolute waste, lines paralleling each other, duplicate stations and duplicate offices in almost every city in Canada. It seems to me that without any great explanation the principle of the thing must be apparent to everybody. As to the amount, I cannot give my hon. friend any information in detail, and I do not know whether those in authority would be prepared at the moment to give it in detail. But I would say that the men who are most concerned in the conduct of the National Railways and the Canadian Pacific Railway are agreed that a saving nearly as large as the figure I have mentioned can be made by a merging of the roads. The amount of $100,000,000 as a saving-and I expected to be asked my authority for that statement-is given to me by the highest authority in the land, or at least as high an authority as we have in this country.

The Budget-Mr. Euler


Robert Forke: I would not like to throw
cold water on sudh an alluring proposition as my hon. friend presents, but would my hon. friend see no danger, if this proposition were carried out, of the Dominion of Canada coming under the powers of a private corporation on the one side, or on the other side, of the whole thing being controlled from a political point of view? These are the things that are in my mind. Outside of that, I think the idea is a splendid one.


William Daum Euler: The thing I desire to bring
before parliament is this: the saving would be $75,000,000 or $100,000,000. Parliament and the people of Canada would have to decide whether it is worth while to put all the railways of Canada under public control with the possible danger of political influence; or on the other hand to put all the railways of Canada under the control of the Canadian Pacific Railway, with all the danger of private monopoly, which I would not like for one moment to support.
In my opinion-and I may as well say it now-it would be in the interests of the Canadian people if these roads were combined under public ownership, so that the country would get the benefit of the saving made, and not the private corporation, which would enjoy a monopoly of the railway business in Canada. I know that this estimate of $100,000,000 sounds like an extreme statement, but I am not making it without reason, and if it is well founded, it transcends in importance all other matters before us at the present time, and I think it becomes the duty of the government to take some action.


Mr. BEAUBIEN:: Is it not a fact that the hon. gentleman for Vancouver South (Mr. Ladner) made the statement the other day in the House that there were five transcontinental trains running between Montreal and Vancouver, and that each one of those trains cost the taxpayers or the people of the country $9,000,000.


William Daum Euler: I was not present when he
made that statement, but I would say that there is a partial answer to his question as to how those savings could be effected.


Henry Herbert Stevens: My hon. friend is looking
at me. I am not from Vancouver South, and I did not- make any such statement.


William Daum Euler: I was not here when the
statement was made. I assure hon. members that the people of Canada are beginning to take a very great interest in this matter, and I -would urge it upon the consideration of the government. I am not trying to be
dogmatic on this question. I have my own opinion with regard to what ought to be done, but I believe it becomes the duty of the government to at least make an investigation as to whether this statement of the savings which can be effected by the amalgamation is founded on fact or whether it is not.


Mr. DRUMMOND:: In this saving of $100,000,000, does the hon. member take into consideration the amount of interest that would be assumed by buying out the Canadian Pacific Railway?


William Daum Euler: Certainly. Suppose for the
sake of argument, the Canadian National took over the Canadian Pacific Railway, we must assume that the Canadian Pacific stockholders and bondholders would continue to receive the return on the investment.


John Douglas Fraser Drummond: And you would be
assuming a very much greater liability than you have at the present time.


William Daum Euler: But look at the income. The saving is supposed to be $100,000,000 over and above what the two railways are now able to accomplish.


Alfred Edgar MacLean: How would the hon. member fix the dividends to the shareholders of the Canadian Pacific Railway?


William Daum Euler: I am afraid the hon. member is going into details which are rather premature.


George Perry Graham: Any such amalgamation
would have to be by the consent of the directors, and the shareholders, too, of the Canadian Pacific Railway.


William Daum Euler: Perhaps so; and I for one
am inclined to believe that it might just be possible that the shareholders of the company would consent to an amalgamation.


George Perry Graham: I am not questioning
that at all1.


William Daum Euler: My point is this, Mr. Speaker, that if the statement I have made be true, then it should be at least worth while for the government to take the initiative and make some investigation with regard to it, and then take such action as may seem suitable,


Charles Wallace Stewart: Does the
hon. member not fear that this estimate of saving $100,000,000 was based on the thought that when the competitive element was taken away it would be possible to reduce the service to the public not only to the point where duplication was cut out, but where the public would not care to stand for the reduced service?
The Budget-Mr, Euler


William Daum Euler: I have absolutely no reason whatever to believe that that thought was in the minds of those who made that estimate. I would also add, though, that I believe it would be possible, if there were no competition, to cut out a great deal of the service that we are now receiving and that is entirely unnecessary.
Now, Sir, I realize there would be a decided difference of opinion in this House, and perhaps throughout the country, as to whether the combined systems should come under the control of the Canadian National Railways or of the Canadian Pacific Railway. In that connection I should like to correct an inference which might be drawn from a statement made by the Border Cities Star, which seems to be taking quite an interest in this question and which is urging very strongly that the railways be combined under Canadian Pacific management. The paper has spoken of the great economies that could be effected, and of the great waste that obtains just now, and it continues:
There is only one way to meet it-the situation- and that is for the people of Canada to adopt the course that the president of their railway system has practically advised them to follow. The acquisition of the Canadian National Railways would be a tremendous advantage to the Canadian Pacific Railway.
I leave it right there, with this remark, that there is no ground for the inference that the president of the Canadian National Railways is in favour of combining the railways under the control of the Canadian Pacific Railway. Nothing he has said at any time, so far as I know, and nothing he has said upon which the articles in the Border Cities Star are based, would justify the paper in making that interpretation.
Now for my part, Mr. Speaker, I hold it "unthinkable that a private corporation should have a national monopoly of a great public Utility such as the railways of Canada. If there is to be a monopoly, it must be held by the people themselves. Some of my fellow-members on this side of the House sometimes express surprise that I should be in favour of public ownership. Well, I am from a city and from a part of Canada where public ownership has been made a great success. I might refer to the hydro system, which I have already done on other occasions, but I will confine myself to my own city of Kitchener. We have there under public control and public ownership our electric plant, our gas plant and our municipal railway. Never yet have the ratepayers of that city been called upon to pay one penny in taxes to carry on these businesses; never yet have they paid a cent in taxes to discharge the debentures as they

fell due and the interest; never yet has tihe commission that manages those concerns found it necessary to do any refunding, and at the present moment, after some twenty years of operation with a five-cent street railway fare, we find the public utilities of Kitchener in this condition, that even with low rates for electric current, gas and street railway fares, they have built up a surplus of $1,000,000.


James Joseph Hughes: Did they reduce the capital expenditure hs well?


William Daum Euler: As the debentures fell due
the principal and interest were paid out of earnings, and in that way they have built up a surplus of $1,000,000.


John Douglas Fraser Drummond: If public ownership
of hydro has been such a success in Ontario, will the hon. member explain why they have seen fit to advance the rates?


William Daum Euler: That does not necessarily
say that public ownership is not a success. The probabilities are that if it were not publicly owned and operated the rates would have been advanced still more. In any case there are those who hold a theory, for I think it is only a theory, that a publicly owned and operated road is not so efficient as a privately managed one. That theory, Mr. Speaker, is in my opinion no longer tenable. We need only look to the conduct of the National Railways to-day. I can call no better witness than my hon. friend for George Etienne Cartier (Mr. Jacobs) who is antagonistic to public ownership and who the other day said on the floor of the House that the service on the National Railways is excellent, and he added that it wras the best in the world. The National Railways are giving an excellent service, a service that is improving steadily, and no one of late has charged that politics is playing any part in the management.


Arthur-Lucien Beaubien: You cannot improve the service; it is the finest in the world.


William Daum Euler: I am glad my hon. friend agrees with me. The usual objections to government operation are, as I have said, that you do not get the same efficient service as under private operation. That, I think, has been disproved. The other objection to the amalgamation of the Canadian Pacific Railway with the Canadian National under government control is that it would cost a great deal of money to take over the Canadian Pacific Railway. I do not profess to have any particular financial ability like my hon. friend for St. Lawrence-St. George (Mr. Marler), but I would say that it would not require the expenditure of any money what-

The Budget-Mr. Euler
ever to take over that system. I should think that the bondholders and stockholders of the Canadian Pacific! Railway could be given securities in the National Railways and draw their dividends or their interest just as they are doing now. The hon. member for George Etienne Cartier was strongly opposed to the Canadian National Railways, and he advocated just as strongly that the road should be combined with its rival under Canadian Pacific ownership and management.


Some hon. MEMBERS:: Hear, hear.


William Daum Euler: I would say to hon. gentlemen that at the time our friend made that speech he gave us a great deal of interesting information and afforded us some amusement, and he reminded me of this little story. An old Englishman was sitting in his cottage and was being belaboured by his loving spouse, but he took it with perfect equanimity. One of his friends happened to walk in and expressed his surprise that he could take such treatment so calmly. The old man replied, "It pleases she and it don't hurt I." I felt the same way about my hon. friend. We had a good deal of enjoyment listening to what he said and, after all, what he said did not hurt the National Railways at all. But, after so much publicity being given to what was said by that hon. gentleman, and also by my hon. friend for St. Lawrence->St. George, who also advocated the acceptance of something in line with the Shaughnessy plan, I think it would be well to make some reference to that plan. The hon. member for George Etienne Cartier admitted to the leader of the opposition the other day that the merger of the roads now under the National system was good; that to merge them was the only thing to do-although, mark you, at first he had been very strongly opposed to that course. Perhaps he will admit at a later stage that a similar merger of the Canadian Pacific with the National Railways under public ownership would also be the only thing to do.
But let me get on with the Shaughnessy plan. To my mind the Shaughnessy plan was a most excellent proposal,-for the Canadian Pacific. It proposed first of all that they keep out of the merger all their ocean steamship lines; keep out the express companies; keep out the hotels; keep out the lands and land contracts; keep out their railways in the United States; keep out their mining interests and certain other things. The Canadian Pacific Railway proper, then, was to take over our National system holus-bolus with the exception of the Grand Trunk, which came into our system afterwards. Now, what
the country would get for this was the reasonable certainty, according to Lord Shaugh-nessy's own figures as taken from his proposal-and I think the right hon. leader of the opposition will know whether or not I am giving it correctly, because it was addressed to him-


Arthur Meighen: There might be an inference in what the hon. member said that the plan involved subsequent acquisition of the Grand Trunk. It did not; the Grand Trunk was to remain as a separate road.


William Daum Euler: If my right hon. friend will search his memory I think he will find that Lord Shaughnessy's proposal was that the Grand Trunk should stay out and be allowed to shift for itself.


Arthur Meighen: That is what I said.


William Daum Euler: That is correct; and I made reference to that before in my observations. But what the country would get would be a reasonable certainty of an annual loss of $55,000,000 under the Shaughnessy plan, and the loss of our railway besides. Let us see how it works out. First of all, the shareholders of the Canadian Pacific Railway Company were to be guaranteed fixed dividends forever by the government of Canada. The rate is not specified, but I presume it would not be less than seven per cent, which is what they are receiving now out of the railway proper.


Herbert Meredith Marler: My hon. friend in his argument has already admitted that.


William Daum Euler: Exactly; I am explaining the purport of the agreement. First of all the Canadian Pacific shareholders would be guaranteed fixed dividends forever by the government of Canada. On the basis of the 1920 business-that was the year used by Lord Shaughnessy in his calculations-the combined systems would have a deficit of $80,000,-
000.	Lord Shaughnessy thought, however, that the savings which could be effected by amalgamation-and perhaps this may have some force with the hon. member for Vancouver Centre-an amalgamation in which there would be no Grand Trunk railway, by the way, would reduce this deficit to $24,000,000. In other words, the saving would be $56,000,000-a very substantial sum-according to Lord Shaughnessy's calculation. These figures are based on the business of 1920, which, he said, was a bad year; a good year, he thought, might reduce the deficit to $11,-
000.000 or $12,000,000. But as he is definitely taking 1920 as a basis I think it is fair to adopt his estimate of $24,000,000. Now, Lord Shaughnessy was very careful not to say any-
The Budget-Mr. Euler

where that his new company would pay the interest on the advances made by the government of Canada to the National railways, in principal some $560,000,000 in all, involving annual interest charges of $31,000,000. Thus we would continue to pay under his plan the annual interest charge of $31,000,000, plus the deficit of $24,000,000, or a total each year, as I said before, of $55,000,000. Is that an attractive proposal, Mr. Speaker-to continue to pay out of taxation $55,000,000 a year and to give away our railway besides?


Herbert Meredith Marler: I think it is only fair that my hon. friend should point out that it is now over five years since this suggestion was made, and circumstances have altered considerably since that time.


William Daum Euler: I am quite willing to accept that for what it is worth, but I do not know just what value I can place upon it.


Herbert Meredith Marler: And also that the figures
in that plan were estimates; similarly are the present suggested figures estimates. *


William Daum Euler: Certainly; that goes without saying. I have not given any hard and fast calculations; these are estimates-it is all we can possibly base our argument on.


Herbert Meredith Marler: My hon. friend's hard and fast arguments are his own view of public ownership.


William Daum Euler: I am sorry, Sir; I had hoped to get through in not more than an hour, but as my hon. friend himself said once before, Others are making a speech for me. We are actually doing just a little better than that now-and I would like hon. members of the House to note this; we are doing just a little better than we would do under the plan suggested by Lord Shaughnessy. We lose the $31,000,000 by way of interest on the moneys advanced to the National Railways, and this year we failed by some $21,000,000 to pay the fixed charges on the debt owing by the National Railways to the public, or a total loss of $52,000,000. That is what the railways are costing us this year as a loss; so I say we are actually $3,000,000 better off than we would be under the Shaughnessy plan, and we still have our railways and the control of them.
In addition to this-and I think this is of prime importance-the Canadian Pacific under the Shaughnessy plan, would get all the benefits of the savings effected by amalgamation, over and above the required $21,000,000 to pay the fixed charges on the debt owing to the public; which would amount to 
the trifling sum of from $60,000,000 to $75,000,
000	a year. Mark you, the Shaughnessy plan also says that in addition to the fixed dividend which shall be guaranteed in perpetuity to the shareholders of the Canadian Pacific, if the profits of the combined system warrant i't, the shareholders of the Canadian Pacific shall receive further dividends. There is nothing in his statement to suggest, I repeat, that the people of Canada shall have interest paid on the moneys advanced to the National Railways, or any profits that might accrue under an amalgamation with the Canadian Pacific to be carried on under Canadian Pacific control.
Nowr, Sir, I am almost through with what
1	had to say. I consider that the proposal of amalgation under the ownership of the Canadian Pacific Railway should not be considered at all. The Toronto Globe-and I do not always take the Toronto Globe for my guide-thinks it is hardly worth while discussing that proposal. The Canadian people, Sir, will never permit a monopoly of the railway business in Canada by any private company; if they must have a monopoly it must be a public monopoly. We are not going to place ourselves at the mercy of a private concern in the matter of the railway business of this country. It is said that the railway commission will protect us if the Canadian Pacific has a monopoly of the railway business of the country. Yes, the railway commission can control rates, but within the four corners of their right to operate, and entirely outside the practical powers of the railway commission, I contend there lies the whole field of service, and that service may be good, bad or indifferent. I leave it to the good judgment of the House whether any private corporation where there is no competition, no matter how good the intentions of the management may be, is not more apt to give indifferent service than anything else. Here is the difference in theory between the two plans: The privately owned business always has as its primary purpose the making of money, the making of profits, whereas a publicly owned business always has or ought to have in view the primary purpose of service to the public.
I believe the people of Canada would destroy any government that would dare to hand over the National Railways to a privately owned corporation. I believe they would wipe out the candidates of monopoly, although possibly some of my friends who come from the city of Montreal might escape; but I doubt very -much whether the sober common sense of the French-Canadian people would

The Budget-Mr. Euler
tolerate the suggestion that the railway business of Canada should come under the control of a private monopoly. Certainly from the Ottawa river west, and I think I know whereof I speak, not a baker's dozen would come back to parliament on that issue. I marvel, Sir, at the boldness of the man who made the Shaughnessy suggestion. It was not a compliment to the intelligence of the people of Canada or to the intelligence of parliament, and certainly not to the intelligence of the right hon. leader of the opposition (Mr. Meighen), who then was Prime Minister of this country, and who I am glad to say never apparently considered the proposal. I can only understand the acceptance of this plan by my able friend for St. Lawrenee-St. George and my good friend for George Etienne Cartier on the assumption that they did not realize quite what was involved in that suggestion, or else they were so influenced by their antagonism to the principle of public ownership that they let their prejudices run away with their usual good judgment.


Herbert Meredith Marler: Let me say quite clearly to my hon. friend from North Waterloo that I have not entirely accepted the Shaughnessy plan at all in any way.


William Daum Euler: You mentioned it.


Herbert Meredith Marler: The Shaughnessy plan was to me a tentative proposal, nothing more or less. I have never analysed the figures of the Shaughnessy plan in any way, but what I say is this, that some plan should be devised and proposed to this country that will effect the savings that are necessary. If any other plan is as good as the Shaughnessy plan, I for one am quite prepared to accept it.


William Daum Euler: Always, I presume, if it be a plan for the Canadian Pacific Railway taking over the Canadian National Railways.


Herbert Meredith Marler: Not at all. Let me correct my hon. friend there also. I am not at all wedded to the question of the Canadian Pacific Railway taking over the Canadian National Railways. I want to see the railway deficit stopped in this country, first of all.


William Daum Euler: I am very glad the hon. member and I are quite agreed on one point.


Herbert Meredith Marler: My hon. friend is speaking like a partisan.


William Daum Euler: I will leave it to the judgment of the House as to who is the partisan when we come to the question of the railways.
Sir, the union of these systems under national ownership offers a good deal more than the
Shaughnessy plan. It gives to the country the benefit of the savings effected, and not to the Canadian Pacific. When I remarked the other day that Sir Henry Thornton believed that union would result in the paying of all fixed charges, including the interest on the moneys advanced by the government of Canada to the railways, the hon. member for George Etienne Cartier rather ungraciously remarked that Sir Henry Thornton was a good promiser. I would just like to draw attention to this, that Lord Shaughnessy was also a promiser, and that the one promiser represented private interests, and the other promiser the Canadian people, and I would like to ask: Which one would the members of this House as the representatives of the Canadian people consider the more disinterested?
Now we have the three alternatives. We can continue as we are, run our roads in as close co-operation as possible with the Canadian Pacific Railway, making savings wherever we can, but running as two independent systems. I believe much can be done that way, and with a reasonably good year I believe that we will come very 'close to paying fixed charges to the public. If we continue in tha* way I believe that something should be done by way of writing down the capitalization of the National Railways so that they will be placed on some sort of basis that will enable them to go on as they would be able to do under private ownership.
Then we have the second plan-combine under Canadian Pacific Railway ownership. I am not going to discuss that any more, because I think it should not be very seriously discussed.
Third, combine the National Railways and the Canadian Pacific Railway into one great public-owned system. That in my opinion is the proper solution, a solution which seems perhaps impossible, may I sa}r, because of its apparent magnitude or because men's minds have not learned to adjust themselves to so big an undertaking, but which, Mr. Speaker, in my opinion will be forced eventually by tho logic of facts. If anyone had said ten years ago that five great railway systems in Canada would now be combined into what is known as the Canadian National Railways, he would have found very little credence with the Canadian public; but we have them combined into one system to-day.
Let me repeat, Sir, if $100,000,000 can be saved to this country by a union of the two great railway systems, it constitutes a challenge to parliament and to the government, and I believe the people of Canada will expect some sort of action, even if it be only investigation of what I say. I think it can in duty do
The Budget-Mr. Euler

nothing less, and if it finds it true, its duty is so clear that the neglect of it, I think, would be inexcusable.
In conclusion, let me summarize what results we can expect if we grapple courageously with the suggestion to settle this question as it must one day be settled.
First, it will enable the government to reduce taxation by nearly one-third, or at least one-quarter.
It will restore confidence, and encourage the Canadian people to go ahead, knowing' that light is breaking at last on our financial horizon.
It will stimulate trade. It will lower the cost of living. It will encourage enterprise and lead to the more rapid development of our natural resources. It will at once solve our ocean freight rates problem.
And finally, on \t could be based a practical scheme for the extinction of our enormous public debt, to which may be attributed most of our difficulties.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Mr. H. A. STEWART (Leeds):: Mr. Speaker, like the hon. member for George Etienne Cartier (Mr. Jacobs) I very seldom take part in the debates in this House and therefore have no apology to offer for occupying a brief period of the time of hon. members this evening. The hon. gentleman in question mentioned a statement as to the cost of a sitting of the House, and if I remember correctly he said it was at the rate of about $18,000 per day. A statement somewhat similar to that was made by some hon. member during one of the previous sessions of parliament, and the Minister of Justice (Mr. Lapointe) last session made a statement which placed the matter right, and as it is more favourable to those who are rather inclined to indulge in long speeches I feel perhaps justified in giving his figures. He stated that the cost of a session of the House was about $55,000 per month, over and above the regular permanent charges which must be paid in any event. Figuring twenty working days to the month that would make the cost about $2,700 a day, very much smaller than the figure mentioned by the hon. member to whom I referred. So that I feel the situation in that regard is not as bad as it might be after all, and possibly I may be disposed to take a few minutes longer than if the cost were $18,000 a day as represented.

Before proceeding with the matters that I intend to discuss I should Like to refer briefly to the very interesting address of the hon. member for North Waterloo (Mr. Euler), who finished his remarks just before six o'clock. The hon. gentleman always has something interesting to say and speaks with a knowledge of his subject. To me the remarkable feature of his address to-day was the extent of his criticism of the government. He found fault with the taxes. He called some of them nuisance taxes, criticized the sales tax, thought the income tax should be lowered, and was not altogether complimentary in his references to the dealings of the government with the railway proposition. One would expect that after all this volume of criticism he would not be quite comfortable on that side of the House. His criticism covered many subjects and was of a wide range, but I notice that the hon. gentleman sat down without stating how he was going to vote in connection with this budget. One would scarcely expect, in view of the criticism indulged in, that he could possibly support the government on this budget; we will await with interest his action when the vote takes place.
The budget, of course, is the subject of discussion at the present time. There have been many attacks upon it, attacks from many angles, and few of the members seem to be able to understand it. Many confess that they are unable to do so; and it would appear that if the Acting Minister of Finance (Mr. Robb) had endeavoured to present a statement that was confusing and hard to understand he could not have possibly succeeded better than he has on this occasion. The leader of the Progressive party (Mr. Forke) says that he cannot understand the statement, and other members, as I have stated, take the same position. The distinguishing feature of this budget is that it lacks clarity and, worse still, lacks candour. The Acting Minister of Finance admits an increase in the public debt for the last fiscal year amounting to approximately $14,000,000. To arrive at this conclusion he adds to the estimated cash surplus of revenue, amounting to approximately $1,823,000, the sum of $4,000,000 due from Roumania and Greece for interest on certain loans, although this sum has not been paid and possibly may never be paid or received by the Dominion of Canada. Assuming, however, that payment will ultimately be made this item should be treated as an asset, and .there is no justification whatever for its addition to the revenue pending actual payment. If this proper course had been adopted the increase

The Budget-Mr. Stewart (Leeds)
in the public debt for the last fiscal year would have been approximately $18,000,000, an increase which I think most hon. members admit would in itself be rather alarming in view of the high rate of taxation prevailing in this country particularly as compared with the rate prevailing in the United States. It must be remembered too that the $18,000,000 above mentioned) does not include moneys borrowed for the Canadian National Railways, the repayment of which has been guaranteed by Canada. The amount thus provided for the last fiscal year is approximately $64,000,000. On this basis the total increase of public debt, including moneys provided for railways, is $82,-
000.000 and in addition to that we have $18,000,000 provided for the National Railways for branch lines. Therefore, if that is taken into consideration, as I submit it should be, the total increase in our national debt during the last fiscal year is approximately $100,000,000. As against the moneys advanced to the Canadian National Railways, there may fairly be set off the increase in capital assets. But as is admitted all around, that already these railways stand in our books at a very much larger figure than their real value and tftiere is a contention from different parts of this House that the capitalization should be written down, very little comfort is derived from the mental process of endeavouring to estimate how much our roads have been increased in value by these expenditures. This government appears to have done its best to confuse the statement and conceal the facts; but an analysis of the figures forces any competent authority to a realization of the serious condition that confronts the Canadian people. The question is: How long can we afford to go on increasing our national indebtedness at the rate of approximately $100,000,000 a year, and how long will the Canadian people tolerate a government that carries on in this way?
What is the cause of the confusion on the part of members in this House as to the actual state of affairs in .connection with these accounts? This may be found in a reading of the budget speeches of the Minister of Finance (Mr. Fielding) and comparing them with the speech made by the Acting Minister of Finance (Mr. Robb) in delivering his second budget. I wish to quote briefly from Hansard of the session of 1922, volume 3, pages 2106 and 2107, where the Minister of Finance made the following statement dealing with the public debt:
I want to call attention now to the increase of our public debt. Against the gross debt are set off what are called the assets of the Dominion. In
former years practically all our assets are treated as good. When the amount was not very great in proportion to our business, .perhaps there was no need for any discrimination, but when these assets, under the operation of our railways, grew to very large figures, it became desirable or necessary that there should be discrimination. My predecessor in office, very properly I think, made that discrimination by dividing those assets into active and nonactive. It makes no difference with regard to the general expenditure, but if only the good assets are set off against the gross debt we get a fairer statement of the real debt of the country. Now, we are continuing this method of treating the assets: we treat these railway moneys as loans. Perhaps there can be some just objection to that. The Grand Trunk and the Canadian Northern are now virtually owned by the Dominion of Canada, and when we advance money to them we are, in a sense, lending money to ourselves. When we represent these debts as assets, a keen critic might find some fault. But it may be that it will be necessary to continue that system; we are following out the accounts for 1922 in that way. There may be an advantage and a convenience in separating the railway operation from the rest of our expenditure. However, there is another view of the matter. We have a justification for charging to capital or to a special account some particular thing-the building of a railway for instance. Various classes of public expenditure having permanent results may .properly be classified as assets, may properly be classified under capital account; but if from year to year we are to provide for the ordinary expenses of the railway; if we are to provide for the deficits, the difference between receipts and expenditure; if we are also to provide large sums for interest on the bonds and other securities of these so-called railway companies -if we are to do that unfailingly every year, with a reducing figure we may hope, it will be open to some to say with much justice, that this is no longer a special account but part of the ordinary expenditure of the country; and if so, that ordinary expenditure should be included before we undertake to declare a surplus. However, as I said a moment ago, there may be some advantage in keeping the accounts of the railways for the present as separate and apart from others. If we clearly and definitely understand the nature of the transaction, I suppose there may be no serious objection to it.
Then, dealing with loans, he said:
During the year four Canadian government loans have been floated. Three of these have been in the names of the railway companies and one a direct government obligation. We still keep up the theory of corporations in regard to these railways; the railway loans are issued in the names of the railway companies, with guarantees by the government. As a matter of fact, the government to-day are both makers and endorsers of those securities; so that practically they are now government loans.
In 1923, the Minister of Finance, dealing with income and expenditure, made the following statement, as reported in Hansard, volume 3, page 2641:
We turn now to the year 1922-1923 which closed not many days ago. We have not the complete accounts before us, but there is sufficient information to enable us practically to announce the result. Ordinary revenue amounted to $393,619,000. These are estimates as the figures are not absolutely final. Ordinary expenditure amounted to about $331,780,000. As between those two items, there was then a surplus of $61,839,000. Capital expenditure, howe/er, represents $14,500,000; adjustment .of war claims,
2484	COMMONS
The Budget-Mr. Stewart (Leeds)
$6,700,000; cost of loan flotations, $3,050,000; these representing in all $24,250,000. There was thus a surplus over ordinary, capital and special expenditures, of $37,589,000. But again the railways have to be taken into account. We had to advance during that year $92,190,000 for railways, and $6,060,720 for the Canadian Government Merchant Marine, making in all for that charge, $9S,250,720. This, of course, takes up ail the surplus I have mentioned and leaves a large balance on the other side of the account. If we take everything into consideration for the year, the net result was that we added to the public debt in the year just closed $49,293,086. The receipt of something over $8,000,000 from the British government on exchange account helped us to keep down what otherwise would have been a larger addition to the public debt.
The point to which I wish to call the attention of the House in these two budget speeches of the Minister of Finance is that he dealt explicitly with loans to the Canadian National Railways and clearly stated that they must be taken into consideration in dealing with the national debt. He went almost so far as to say - that they should be taken and included in the expenditure for the year. Just let us see how the Acting Minister of Finance (Mr. Robb) in his first budget speech departs from this practice which, I submit, is entirely sound. I am quoting from Hansard of 1924, volume 2, page 1214. In dealing with railway loans, the Acting Minister of Finance speaks as follows:
I may say when loans are made by way of cash, under the arrangements made by the former Minister of Finance, they are treated as non-aotive assets and are, therefore, not taken into account when determining the net public debt. Moneys raised by way of guarantee, which places the government in the position of an endorser, do not presently affect the public debt in any way as they are indirect obligations.
I do not think that contention will commend itself to the best judgment of the members of this House, and it is quite in opposition and quite different from the position taken by the Acting Minister of Finance. I think it is absolutely unsound, and reminds one of the practice of our old friend Micawber, who gave a note and said the debt was paid, and that was the end of it. The hon. member for St. Lawrence-St. George (Mr. Marler) in dealing with this matter the other night also made it very clear in the course of his remarks that these guarantees were part of the national debt and must be taken into consideration in dealing with this question. At page 2335 of Hansard he says:
That is not the point in question. The point in question is this, as to how much of those bonds emitted year after year, have to be added, using that argument, to the net consolidated debt or, if you put it in another way, to the combined debt of the country. In other words, hon. gentlemen have complained that in a certain year we paid out a great deal of money in cash on account of the railways and we charged that in the net consolidated account. Consequently, the deficit was very large.

Now, they say, you come along and say to us:	We
do not intend to pay out cash, but we intend to finance by way of bonds. Consequently your net deficit is very much less or you may have a surplus as the case may be. There is a good deal in that argument and it has to be fairly faced. The question of policy is one which does not make any difference one way or the other in the financial arrangements. Whether the railways are financed by way of cash or by way of bonds, it matters not, all the obligations of the railways are our debts and have to be taken into consideration in some way or another. If $20,000,000 is issued, guaranteed or unguaranteed, in any particular year, that is reflected in the debt of the country, perhaps not for book-keeping purposes in the consolidated debt, but in the combined debt of the country. We owe that money and we have to pay it. Of course, as against it, we have the assets, if any, purchased by the funds or proceeds of those particular bonds. Therefore, in the last analysis it does not make any difference whether we pay cash or issue bonds, for practical purposes we have to take into consideration the net result which is obtained.
That is a position which I submit, Mr. Speaker, is quite different from the position taken by the Acting Minister of Finance in his address. Nearly every speaker has spoken of the high taxation that prevails in Canada. I do not know that we always realize how high it really is, and we can only get at this by a comparison with taxation in other countries. We all admit it is too high, and that it should be reduced if possible. We are apt to think of England as a country in which the taxation is exceedingly high, and figures have been quoted in this connection; but if you take into consideration the taxation in the Dominion of Canada, including our federal, our provincial and our municipal taxation, we find that it is a little higher in Canada than it is in England. An authority dealing with this question quotes the taxation in England as $80, and in Canada our Dominion taxation amounts to $38. In the province of Ontario our provincial taxation is $13 and our school and municipal taxation $30, making a total of $81, just approximately $1 in excess of the taxation that exists in Great Britain.


James Alexander Robb: If my hon. friend is going to
quote the taxation in Canada as against the taxation in England, it would be fairer if he would quote all the provinces, instead of picking out Ontario where the taxes are high.


Hugh Alexander Stewart: I do not know
of any province where the taxes are low.


James Alexander Robb: They are lower in Quebec.


Hugh Alexander Stewart: I understand
other provinces are higher than Ontario.


James Alexander Robb: Not Quebec.


Hugh Alexander Stewart: British Columbia is higher.

The Budget-Mr. Stewart (Leeds)


James Alexander Robb: Yes.


Hugh Alexander Stewart: I do not know
about Quebec. Perhaps they have ways of getting revenue which the other provinces have not. We may overtake them after a little while. The discouraging feature of it is that while the taxation is high in Canada, it is getting lower in other countries, and we are not able to reduce our taxation. Australia, New Zealand, the United States and Great Britain are all able to reduce their rate of taxation. Canada on the other hand is not able to do so and we are going further behind every year. Let me quote a statement made by President Coolidge, which I .think is just as applicable to Canada as to the United States. He said:
All experience shows that a larger amount of money can be collected from large incomes at a moderate rate than at a high rate. When the Tate is too high large incomes disappear, leaving all the burden of taxes on the wage earners, and people of small means.
Then the Prime Minister of Australia says- and I think this is just as applicable to Canada as it is to that country-
I think all students of economics are agreed that nothing curtails development, hampers trade and industry and reduces the standard of living of the people more than crippling taxation. In comparison with other countries of the world our taxation is not excessive but having regard to our particular circumstances, it is having a disastrous effect. We are a young country, with illimitable natural resources, but no great accumulated wealth. A burden which could lightly be borne by an old country, with its great capital resources, is one which might strangle the future development of a young nation.
These are, I submit, particularly aipplicable to Canada. We all realize that to-day the greatest competitor of Canada is the United States, situated as it is just across the line. The same language is spoken in both countries. The difficulty of' transferring individuals or money from one country- to the other is not groat, and unfortunately we find that the transfer of people is very excessive, and there is no real sign of an abatement. On different occasions in this House I advocated the wisdom and the necessity of a reduction in income tax and I wish now to give a comparison of the rate of income tax in the United States and in Canada.
Income married man	Canada	United States$ 3,000	$ 40	$ 7 504,000	80	22 505,000	126	37 506,000	117 50	57 5010,000	619 50	207 5020,000	2,089 50	1,017 50I do not	need to pursue	this table anyfurther to show the great discrepancy between	the income	tax levied in the	two countries
and the immense advantage that capital enjoys in the United States as compared with Canada. I sincerely hope that the government will find some way to meet the many demands that come from all parts of this House for a reduction in the scale of income tax.
When we come to the tariff we at once get on controversial ground. We have had a good niany debates on the subject, even since the introduction of this budget, and no subject has been the cause of more prolonged discussions during the last quarter of a century than this same question. I do not, however propose to deal with it exhaustively to-night; I hope another opportunity will be presented when the resolution standing in the name of my leader comes up for discussion to go into the subject more fully. Let me briefly review the record of the government upon this important question. The government was elected upon a platform of a downward revision of the tariff; that was clearly set forth at the convention of the Liberal party in 1919 and was enunciated in this House by the Prime Minister when leader of the opposition and by all of his supporters during the last election campaign. When the government came into office their first budget showed a slight reduction in the tariff, so slight that it was entirely offset by an increase in the sales tax. Recognizing that this did not in any way amount to a fulfilment of their preelection pledges, they told us to be patient, that this was a beginning, that it was a step in the right direction-"Wait until you see us next year." Next year the Minister of Finance (Mr. Fielding), to the surprise of all, announced that we must have tariff stability, that it would not be right or proper to be always tinkering wfith the tariff, particularly as our tariff was only a moderate one anyway. I commend his statement to those hon. members who are accustomed to speak of our tariff as high. It is not a high tariff; it is a low tariff compared with the tariff of other countries, particularly since the war. In the third session of this parliament, notwithstanding that announcement by the Minister of Finance, the budget contained considerable reductions in the tariff, reductions which disturbed industry and alarmed capital, and resulted in no corresponding advantage; in fact it would be hard to imagine any advantage that could compensate for the injuries caused by these reductions. We were told that the government were carrying out their programme, which they would persist in until finally we had that all-round downward revision which had been promised in
2486	COMMONS
The Budget-Mr. Stewart (Leeds)
their platform. Shortly before the opening of this session the Prime Minister, in the course of a speech in Toronto, announced that there would be a pause in the downward revision, that after all there would be no serious tariff changes in the next budget. What do we find to-day? In this, the fourth budget of the government, instead of carrying out the earlier programme of a downward revision, we find there is an increase in the tariff on coal, and we have a sort of promise-for what it may be worth-that a tariff board is to be constituted.
The member for Springfield (Mr. Hoey), in dealing with this proposed tariff board, intimated that he thought it was really something that would enable the government to avoid responsibility, a sort of smoke screen behind which they could hide for protection. The proposition is so hazy, so indefinite, and the government have so frequently resorted to royal commissions of one kind and another to escape responsibility upon every vital issue that has come up, that I do not wonder at the member for Springfield looking upon this tariff board as a similar device. I think it would be possible to erect a commission that would really be helpful to the government and to all concerned in tariff matters; but this proposition is so vague, there is so little detail presented, that we are unable to judge whether such a board would be of any real service or not. I suggest, Mr. Speaker, that this proposal is put forward on the eve of a general election to enable the government to escape from the difficulty in which they find themselves. Is it not intended to make the tariff issue a free for all, to enable their candidates to preach high protection where it suits, to preach low tariff where it suits, to preach tariff for revenue where it suits -in short to suit the tariff policy of the government to the particular constituency, so that some of their candidates may pose as supporters of a tariff for revenue only, others as protectionists, and still others as free traders-ready to ring "the death knell of protection?" I submit that the proposal is open to this interpretation in view of the action of the government on this vital issue. But, Mr. Speaker, these tactics will not save the government. The Canadian people have been waiting for some clear, clean cut proOperating Revenue
Central	region	 $114,564,818
United States lines	 34,363,689
Western	region	
65,938,275Atlantic	region	
20,721,399
nouncement of policy on this important question, and they are not going to be satisfied with vague'and indefinite promises and platforms by those who in the past have failed to redeem their pre-election pledges.
As was pointed out by the member for Lincoln (Mr. Chaplin), tariff reductions resulted disastrously to Canada in connection with the French treaty. He showed that in ten months of the last fiscal year Canada lost in tariff duties and excise duties-lowered because of the French treaty-no less than
81,600,000.	What we need at the present time is tariff stability, something like continuity of tariff policy. The hon. gentleman also pointed out that this reduction was not upon the necessaries of life, but upon luxuries, of which he gave this list: Brandy, non-sparkling wines, silk fabrics, ribbons, silk stockings, perfumery, soap, jewelry and other articles of a similar character. The fact is, Mr. Speaker, that upon this vital question of the tariff the government has no policy, no programme except a sessional programme-whatever is necessary to get through the session from year to year.
Now I come to the question of railways. I do not propose to deal with that subject at any considerable length, as we shall have other opportunities for discussing it more fully. The member for North Waterloo went into the question exhaustively this afternoon, and one would think his laddress would either persuade or provoke the government into announcing some sort of policy that would put an end to the extravagant expenditure and waste of duplication that is taking place on these two railway systems in Canada. I have before me a portion of the statement of the Canadian National Railways for the last year. We find that their operating revenues decreased by $17,500,000, in round figures, and their operating expenses decreased by $14,300,000, in round figures. There was a net decrease of revenue of $3,186,000 odd. It is interesting to look at the regions of these railways which yielded a deficit and those which produced a profit, and I sincerely hope that our friends to our left will give serious attention to this phase of the question and consider it in connection with their claim for continued lower rates in the western provinces. I will quote the figures:
Operating Expense	Surplus	Deficit
$98,131,371	$16,433,446
28,883,527	5,480,162
67,062,628		 $1,124,353
24,266,403		 3,545,004
So that two of the regions showed a sur-	deficits incurred in the other two regions. That
plus, but that surplus is reduced by the	is interesting and illuminating in connection

The Budget-Mr. Stewart (Leeds)
with the present muddle in connection with the railway rate question in the western provinces, arising out of the Cro'wsnest pass agreement. We had hoped that the government would bring down before this time its policy upon this important question. Surely the time has come when this agreement, which operates in such a way as to work a serious discrimination, should be terminated and the whole matter turned over to the railway .commission for the framing oif a fair and .proper system of railway rates, based on such instructions as may be given it in any policy laid down by this parliament.
The two matters that call for action at the present time are the abolition of excessive and extravagant expenditures in a very high class of service, and the elimination of overlapping and duplication of the two systems. If a conference between the heads of these railways fails to bring about the desired result, then I submit the matter should be sent to the railway commission and. if necessary the Railway Act should be amended to enable the commission, upon application of either of the railway companies, of the Minister of Railways, or of the Governor in Council, to deal with this matter and! to make such order as will bring about an elimination of this needless competition.
Another matter which I desire to deal with very briefly is that of hydro electric power, and my reference to it is suggested by the imposition of an export duty on power. Hydro electric power is the most potent attraction for industry and development on the face of the globe to-day, and the province of Ontario is more interested in this than in any other future or possible development. It is an asset of almost inestimable value to Canada, and particularly to central Canada, because of the use of a vast quantity of coal and the extent to which electricity is taking the place of coal for power purposes and domestic use, both urban and rural. The development of hydro electric power, the extent of Rs use, and its successful transmission for long distances, is one of the remarkable developments of the last quarter of a century. A few years ago there was considerable anxiety with regard to the question whether a sale could be found for the large volume of power the development of which had been undertaken and was assured. Any fears in this direction have been entirely dispelled by the constantly increasing use of electricity for so many purposes, and the difficulty that now presents itself is to meet the demand, which has overtaken and overrun the supply. If there is any national asset which with
peculiar advantage may be retained and developed for the Canadian people, it is hydro electric power.
The passing of an order in council under the provisions of the Electricity and Fluid Exportation Act imposing an export duty of $1.95 per horse power per year raises the question as to what our policy should be. On a previous occasion I pointed out to this House the importance of this matter and urged that hydro electric power should not be exported but should be retained for the use of our people, the development of our natural resources, and industrial enterprise. At that time I was speaking with particular reference to the proposed development on the St. Lawrence, and urged that this government approve the plans filed by the Hydro Electric Power Commission of Ontario and allow the province to proceed at once with this new development to furnish power to supply a shortage which already existed and to meet the demands upon the Ontario system. I now wish to repeat that request and to condemn the imposition of an export duty. We should not, Mr. Speaker, export our power at all If export is now allowed difficulties will develop when we find it necessary to discontinue the export. Contracts will have been made and vested rights acquired, and many objections will be urged against the cancellation of export licenses.
Our experience in connection with the diversion of water by the Chicago drainage canal, made without permission or license, has been very unfortunate and has led to years of expensive controversy between Canada and the United States. A severe lowering of the level of our lakes and harbours has taken place because of this unauthorized diversion, with millions of dollars of consequent loss to shippers and a large expenditure of public money in deepening the channels of navigation and our harbours. The end is not yet. We must wait for years before conditions become normal, and in the meantime make additional large expenditures of public money. The .complications that are sure to develop in the export of hydro electric power are likely to cause a situation equally serious and difficult of adjustment. Let us take warning from our past experience and avoid future difficulty by preserving this asset intact for the benefit of Canadian agriculture, Canadian industry, Canadian labour and Canadian railways.
A similar policy should be adopted in connection with our pulpwood, either by the imposition of an embargo, or perhaps better still by a good stiff export duty, increasing
2488	COMMONS
The Budget-Mr. Stewart (Leeds)
from year to year. And the same with our asbestos and our mineral products.
We have heard a great deal, Mr. Speaker, about conditions in Canada. We have heard it urged by some that conditions are not satisfactory, that we are not prospering. Others have controverted that and said that we are doing pretty well, after all. Well, you can imagine the effect that a two-hour address by the Minister of Labour (Mr. Murdock) would have on a man who is out of work and seeking employment. You can understand how far his address would go towards giving a man in those circumstances satisfaction.
What is really wrong with Canada at the present time, because I think we all admit that conditions are not as they should be? What is really wrong with us, after all? We are suffering from dislocation of business and general confusion following the war. For this the government is not to be held entirely responsible, but the government must be held responsible for its failure to take such action as is best Calculated to overcome these handicaps. Canada is debilitated, run down, weak hearted, because of her repeated overdoses of tariff reduction. We need the stimulus that has been adopted by nearly every other civilized nation since the war, namely, the adoption of a policy of preserving the home market for our own population. Canada stands alone as the one nation adopting the opposite course of opening her markets to foreign competition from highly protected countries, from whose markets we are excluded. It will not be a cure for all our troubles and all our difficulties, but it is a first step necessary to restore confidence and give employment, and stop the exodus of our best workmen and young men from Canada. What does Canada really need at the present time? I have a few headings here which I think will suggest a good deal to the hon. members of this House.
First, we need thrift on the part of the Canadian people. Second, we need economy by all governments, federal, provincial and municipal.. Third, we need the adoption of a proper tariff policy and stabilization of our tariff. Fourth, we need readjustment of railway rates and removal of duplication in our railway services. Fifth, we need a readjustment of taxation, particularly income and sales taxes.	,
Now with regard to the first item, thrift. A great many people in Canada are suffering to-day because of extravagance and unnecessary expenditure. I am 9 p.m. afraid the Canadian people have to a large extent forgotten how to be thrifty as our ancestors were. The

people of the older countries, particularly Scotland, knew how to be thrifty, and they practised thrift to their own good and to the national advantage. Thrift keeps people out of debt; it makes them independent; it gives them confidence and corn age; it enables them to meet unexpected reverses. Economy on the part of governments is necessary. Governments, just like the people, have lost perhaps a sense of economy in large measure. In the old days the idea was that to be popular a government must be a spending government, but Mr. Speaker, for the next few years the government that will make good with the Canadian people will not be a spending government, but a government that practises economy, a government that sets aside all unnecessary public expenditure and that calls upon those who are demanding it to wait until we are in a better condition. This government pretends that it is practising economy. It has not succeeded in any large measure. I think when you look at the large number of commissions it has appointed, you will find that there is a failure to practise economy. What about the pulpwood commission that cost Canada $75,000, and that has enabled the government to dodge this question and that brought about no practical result? What about the grain commission that cost us $170,000? What about the abortive lake freights investigation that cost $41,000? What about the ocean rates investigation. by Mr. Preston, which report has finally been discarded and a contract made entirely independent of it? What about the purchase of the Union club for $2,000,000? What about the purchase of the Scribe hotel for $3,000,000? What about the raising of the Auditor General's salary from $6,500 to $15,000? And so on with a large number of other items I could mention. When the supplementary estimates come down, if, as last year, they disclose a large expenditure on public works, we shall find there very little evidence of economy on the part of this government.
I spoke of the adoption of a proper tariff policy for this country, a tariff policy that keeps our workmen at home, and that preserves our home market for our own farmers and our own people. I have gone into the question of the railway rates and the readjustment of taxation.
The government claims that we are prosperous in Canada. The Prime Minister spoke about two hours quoting statistics, and I think he must have been convinced that he had failed to satisfy the members of this House and the people of Canada because the Minister of Labour spent another two hours

The Budget-Mr. Stewart (Leeds)
endeavouring to accomplish the same result. I would point out, Mr. Speaker, to this government some of the things that I think most clearly indicate a lack of prosperity in Canada. First, our falling revenue. There has been a decrease in the revenue as compared with last year of approximately $52,000,000, partly due, undoubtedly, to a reduction in the sales tax and the lowering of duties. The Acting Minister of Finance last year estimated that our loss of revenue in this direction would amount to about $24,000,000, but it is double that amount showing that there is a falling off in the volume of business from which the revenues of this country are to be derived. There is a decrease in the amount received from income tax in 1922 as compared with 1924 of about 31 per cent. There is a decrease in the gross railway earnings for 1923-24 of the two national systems. In the case of the Canadian Pacific the decrease is about $14,000,000, and in the case of the Canadian National Railways about $17,000,000. Is there any evidence of prosperity in these decreases? Then there is a continued exodus to the United States annually of at least 150,000 of our best people, of which number only about one in four return.
These, I submit, Mr. Speaker are facts which show that Canada is not prospering as we would like it to prosper, but that on the contrary it is going in an opposite direction. Prosperity is its own best witness, and when it comes to Canada all the Canadian people will recognize it and gladly welcome it. We shai! not require long speeches by ministers of the crown to let us know when it is here. Prosperity will not come under an administration such as we have had for the last three years under the present government. Its policy has no stability upon any vital issue, particularly upon the tariff. The government's policy has been sessional, it has gone forward and then backward'; it has stood still; it has sidestepped, wobbled, and pussyfooted until it has become dazed and confused, and does not know in which direction to move. It has introduced anti-dumping legislation, and then has itself dumped its own legislation. But the great dumping act will take place at the next election when the Canadian people dump this government. Some people will vote against it because it has not fulfilled its pledges; others will vote against it because it has tinkered with the tariff-sometimes raising it, sometimes lowering it, sometimes pausing in its programme of ringing the death knell of protection, and now proposing a commission behind which to take refuge for 159
at least another session; others will vote against it because it has mud led our finances and increased our taxes and pubic debt; workmen will vote against it because many of their number are out of work and others have been forced to emigrate to the United States to secure employment; capital will vote against it because it has destroyed confidence; farmers will vote against it because it has refused their reasonable request for a fair measure of protection against the large volume of products of 'the United States, and because they are in a large measure losing their home market. The government's sole desire has been to retain power at the expense of principle. In its confusion it does not know what to do, how to lead. Prosperity will come in Caqada when we adapt a sane, stable tariff policy that will protect agriculture, labour, industry and capital, and will give to the hundreds of thousands of Canadian workmen employment in Canada instead of in the United States. Prosperity will come when we adopt a policy that will preserve our forests and our resources of field, mine and water-power for the benefit of Canadians and those who may desire to become Canadians. This policy will solve our immigration problem by retaining our own people and attracting desirable immigrants. By doing this and providing additional freight for our railways deficits will disappear, and our burden of taxation -will be lightened. The Canadian people are longing for the adoption of this policy, and realize that they must look not to the present government but to a new government with courage, with capacity and with determination to face the present difficult situation fairly and squarely.


Harold Putnam: I understood from the
hon. gentleman's remarks that he conceived that the Canadian people at the last general election had voted for a downward trend in the tariff; is that his view?


Hugh Alexander Stewart: I did not say
that. I said that the government had promised a downward revision of the tariff, and I added that it had not fulfilled its pledge. I want to say further that not only did the government appeal for votes on a downward revision of the tariff, but there are hon. gentlemen sitting on the government side because they ran on a policy of a higher tariff-it was a case of one policy here and another policy there; anything at all in order that they might be elected.

The Budget-Mr. Stuart (Leeds)


Harold Putnam: The hon. gentleman distinctly and in terms said that the government was elected on the platform of a downward tariff.


Some hon. MEMBERS:: Order.


Hugh Alexander Stewart: I said the government secured votes on that issue and undoubtedly it did secure some.


Harold Putnam: You said it was elected on that platform.


Hugh Alexander Stewart: It was elected on anything and everything.


Harold Putnam: You have changed what you said.


Hugh Alexander Stewart: It was elected on inconsistent promises-promises here and promises there; high tariff and low tariff, free trade, a tariff for revenue, anything under heaven to get votes. The hon. gentleman knows that.


Harold Putnam: I must thank you for your frank answer.


Hugh Alexander Stewart: When interrupted I was just about to conclude. I was saying that what we needed in Canada was a sane, stable tariff-a tariff that protected industry, that protected capital, that protected labour, and that preserved our natural resources and developed them up to the last point for the Canadian people.


Harold Putnam: How?	.


Hugh Alexander Stewart: By using them at home and not sending the raw material to the United States as is the case now; by keeping the home market for the Canadian farmer, by keeping out the many million dollars' worth of farm products that are coming into this country-


Harold Putnam: How high would you go?


Hugh Alexander Stewart: -just in the same way as the government is protecting the coal industry in the Maritime provinces and for which policy I presume the hon. gentleman is going to vote in connection with this budget. Such a policy, Mr. Speaker, is outlined in the resolution of the right hon. leader of the opposition and which I hope will be discussed at length before the end of this session.
I am convinced, Mr. Speaker, that the budget proposals do not meet the present requirements of Canada, or promise any relief from our present taxation; that the financial statement presented is confusing and misleading; that our debt is increasing alto-

gether too rapidly; and for these reasons I intend to support! the amendment qf the hon. member for West York (Sir Henry
Drayton).


Mr. T. H. McCONICA (Battleford):: Mr. Speaker, the first matter that naturally presents itself in this discussion is the amendment by the hon. member for West York (Sir Henry Drayton). That amendment recites that conditions in Canada demand a reduction of taxation, especially of the sales tax, and deplores the fact that the financial statement does not show the economy necessary to enable the government to do this. I apprehend that we are all agreed that a reduction of taxation is desirable, that it is a "consummation devoutly to be wished"; on this point we are all in accord. While this is true, Mr. Speaker, I have a theory that the Canadian taxpayer gets more value for the dollar he pays the tax gatherer than for any other dollar that passes through his hands. I believe that is true. I believe that he gets the most substantial value-in the way of items that are inestimable and beyond price-for the money he pays the tax gatherer. The great burden of taxation is represented in the amount paid for the war debt, for the expenses incidental to that great struggle. When we consider the scope of the catastrophe which we escaped can we rightly estimate what that victory meant to us? Can we, in any way, conceive what would have been the disaster if the victory had gone to the other side and Canada to-day was under the German flag, or the heel of the military despot was on our necks and we were paying reparations beyond all measure while our own obligations were postponed? No. we should pay that tax and pay it thankfully that we had escaped the disaster that threatened us. Do we begrudge the money we pay our wounded soldiers? I think not. I think that tax is a sacred duty and that we pay it willingly. We are told that we are burdened with our railroad deficits, and that is true. We are told that our railroads are overbuilt. We probably do not need them all at the present time; but the time was when these railroads were all needed, when every acre of land that they developed and brought under cultivation was required. During the war we saw long trains sweeping across the prairies and over the mountains loaded with our soldiers, with workmen from China and the Orient, with supplies gathered from all quarters of the earth, with the golden stream that flowed from the prairie provinces

The Budget-Mr. McConica
over the prairies across the mountains and over the sea to our soldiers and our allies. Those railways were absolutely necessary; we needed them badly in those dark days, and we could not, in all probability, have succeeded without them. I still think there was something almost! providential in the fact that they were built and that the land in the west was developed as it was. No, we needed those railroads then and our railway situation to-day is improving. The condition is far better to-day than it was when I came to this parliament. We are gradually evolving towards the light. I am satisfied that some plan will be arrived at by which the deficit will be met, it may be by the plan of the hon. member for North Waterloo (Mr. Euler), or that of the venerable Nestor of the House (Mr. Maclean), or that of the hon. member for Leeds (Mr. Stewart). The day will come and it is not far distant when we shall meet that deficit. The time will come, in my opinion, very soon when we shall remember those dark days and the memory will be a pleasure to us.
Then we have the tax for the ordinary expenses of the government, a comparatively small portion of our expenditure, not very much more than we spent prior to the war. We have a list of the public utilities and public services rendered in our estimates. Ye go over them carefully; we look at them individually, and we decide that each one is worth more to the taxpayer than it is costing him; that it would be a distinct loss to tihe country to discontinue them. The time may come when it will be necessary to discontinue some; but let us remember that Canada is a going concern and that we must not curtail those things the curtailmennt of which will inflict a loss beyond the loss we are suffering in the taxes we are paying. We examine these estimates fairly carefully. It is charged that there is great waste. I do not see just exactly where it is. We look over the estimates; we decide the purpose for which the money shall be expended; we decide the amount that is to be spent, and if there is profligate and extravagant waste, we, as members of this parliament, are responsible for it. We cannot hide behind the skirts of the government. Every man here is responsible if there is wild extravagance in the expenditure for the current demands of the government. I do not think there is sudh extravagance. It would be a marvel if some money did not get away; but upon the whole, considering the magnitude of the enterprise I am of opinion that it is not very good business to be trying to convince the people 159i
that they are being unmercifully taxed and that money ie being recklessly squandered. I do not think that is a very patriotic thing to do, and I do not believe it should be done. The people are meeting their obligations manfully. They know they must pay heavy taxes; they realize the condition of the country, and they are meeting their taxes with little grumbling. We hear more of it in this House than we hear anywhere else. More fuss is made in one day here about taxes than in Saskatchewan in a year, and I do not think it is patriotic to perpetuate this sort of propaganda.
But our friends to the right tell us that a reduction of taxation is desirable, and we agree with them. How do they propose to bring this about? Take a dollar off the sales tax and1 add four dollars to the indirect taxation 1 Take a penny off a man's tax bill and add a pound to ithe cost of his coat, for it takes four dollars paid by the consumer .'to put one dollar into the treasury. If we take a dollar off the sales tax, we must make it up by the tariff, and wre pay four dollars to make up the deficit. That is not the kind of taxation relief that the country needs, and I do not believe the taxpayers are looking for that sort of benefit. This is like the relief which the vulture gives to the lamb when he covers and devours it. Four dollars on for one taken off! That is the philosophy of our protectionist friends.
To what end is this to be done. In order that we may keep our manufacturers busy. What is the trouble with our manufacturing enterprises to-day? Is it that the home market has gone? Why, our imports fell off by the million last year. If there is any market here, we have it for our manufactures. The trouble with the protective proposition is that the thing has undermined itself. It has sapped the purchasing power of the country until our workmen are living from hand to mouth in rented houses, our salaried men are just able to live, our farmers are working on mortgaged farms with impaired and worn out equipment, and there is no purchasing power. You may galvanize it with all the high protection imaginable, and you cannot sell a single dollar's worth of goods more than you are selling today. The trouble is not that our factories cannot manufacture under the present tariff. The only trouble is that they cannot sell. They tell us that we are over-industrialized. I suspect we are. We are told also that money is not being invested in manufacturing enterprises. Certainly it is not; it was not before the chan re in the tariff. It has not been invested in manufacturing enterprises since the war, and there is no call for it.
The Budget-Mr. McConica

I was rather interested in the pathetic story told by the hon. member for Vancouver Centre (Mr. Stevens) in his speech on the Address. He told us that there were large amounts of iron ore within half a day's ride of Vancouver, and large quantities of splendid coking coal in the immediate vicinity. He intimated that if it had not been for the reduction in the tariff there would have been iron mills and steel plants out there and that country would have blossomed into a hive of industry. I do not doubt that these minerals exist. I have no reason to question the hon. gentleman's accuracy on that point. I have no doubt they are there, and they have been there for some time. They were put there before the morning stars sang together, and for fifty years we have had a tariff, and during much of that time we have had a bounty on steel; during a great part of that time we had in power a party in favour of increasing the tariff if asked to do so. And yet during all those fifty years not a ton of that ore was smelted and not a ton of that coal found its way into a blast furnace; yet the hon. gentleman would have us understand that if we had not taken just a shaving off the tariff at that particular time, just an infinitesimal amount, that whole country would have blossomed into a busy hive of industry, the hillsides would have been speckled with workmen and the valleys would ramble with rolling mills and great fumes of black smoke would be shooting up from those factories until they had tarnished the very stars of heaven. But that little change was made in the tariff, and that stopped the whole proceeding. Now, Mr. Speaker, if that enterprise was so weak and wabbly that that trifling change in the tariff was going to kill it, it was better that it should stop in embryo, in my opinion,- better that it should have stopped before it was born; otherwise we would have had another lame duck on our hands asking for more protection.
It is said that no money is now going into new plants, and yet we are told that just across the river a new concern is to be started, with a capital of $27,000,000, quite a considerable amount, more money than I have seen for a month. They are going to start manufacturing, and they are going to employ Canadian workmen. They are going to use Canadian raw materials and Canadian power. They are going to compete with the pauper labour of Europe and the massed production of the United States. They are going to turn out goods and sell them in the markets of the world. That is the kind of factories we need.

What they can do others can do. As the hon. member for Leeds (Mr. Stewart) said, electrical power in this country is the great attraction. Now, why under heaven manufacturing cannot be carried on in Canada where we have an abundance of the cheapest and best power in the world, and more that can be developed easily is difficult to understand. Why we cannot manufacture with the raw material at hand, with the best workmen, or as good workmen as are to be found in the world, just as skilful, just as industrious and efficient, and why we cannot compete in the markets of the world is something I cannot understand.
If we are to develop a manufacturing nation we must compete in the markets of the world; otherwise we cannot consume the products of all our factories nor the products of our farms. We must have a foreign market, and in order to sell abroad we must buy from abroad. One trade brings another and we cannot simply ship our produce across the ocean and bring back the money. We must take goods in return or else we will find no market. The hon. member for East York (Mr. Maclean) tells us that market gardeners need protection. He would like to protect the market gardener, and starve the people for ten months of the year with the hope that they would eat more during the other two months. But at would not have that effect. The fact that in April or May I eat strawberries that were raised in New Jersey early in the spring is no reason why I will not eat them in July if they are raised in Ontario. A man's dinner is not like his coat. It does not last him three or four years. He must have at least one dinner a day. I have a theory that the market gardener should be supported for the people instead of the people for the market gardener. But that argument is as logical as any of the tariff arguments we hear. The theory is, make the people take what you want to give them and when you want to give it to them, charge them a good round price for it, and if they grumble and object to it they are not patriotic. I will not prolong this argument. I am glad to know it only costs me $2,700 a day and I do not want to pay for very much extra time.
This tariff situation is an important matter. We are going to have a vote on the budget. I do not propose to vote for the amendment. That is quite settled in my mind. Now, how about the budget? My hon. friends to my right are going to vote against it because the tariff is not high enough. My friends to my left are supposed to vote against it because it is too high. If I vote against it and my friends on my right vote against it, are they

The Budget-Mr. Robitaille
voting with me or am I voting with them? Or are we trying to hitch up a team and puil the government from the seat of power, with one horse pulling east and the other pulling west? And if we succeed, who is going to get the credit and who is going to take the responsibility? That is the question I would like to have settled in my mind. What would be the issue in the next campaign if we were to put the government out of office on this vote? Would it mean that we were in favour of a higher tariff or in favour of a lower tariff? That is a question for hon. gentlemen to try and settle one way or the other. I have been thinking at over pretty thoroughly, and I am going to keep on thinking for a little while, and listen to the balance of the discussion.
There are some questions I should like to have threshed out. I think it was a great improvement when they amended the dumping clause. I supported the Progressive amendment with enthusiasm because I especially objected to the dumping clause. That clause, I am glad to see, is to be eliminated. I hope there may be some other eliminations. I am in favour of a lower tariff. I khould like to have seen a reduction in tariff at this time not on the items reduced last year but on other items. I believe that we should gradually come down to the point where we have a tariff for revenue. I do not believe we can walk on industrial stilts to the end of time, and get them longer and longer all the time. If we do, we are bqund to take a tumble. I believe we should get down to the ground, and stand on a firm foundation where we can manufacture and sell in the markets of the world. I believe we can do that. Until we do, we will not have an industrial Canada.


Mr. CLEMENT ROBITAILLE (Maison-neuve) (Translation):: Mr. Speaker, I wish to express my sorrow for the illness of the hon. Minister of Finance (Mr. Fielding), which deprives us of his presence in the House. Even if I must wound the modesty of the hon. Acting Minister of Finance (Mr. Robb), I want to congratulate him and express to him my admiration for the way he administers both the Department of Immigration and the very responsible Department of Finance.
I shall not thresh out the budget; other members better able than I am have clearly shown its nice points and advantages, and the country, I feel sure, is well satisfied.
I cannot pass over in silence the remarks of the hon. member for Kent (Mr. Doucet) in regard to the French language. It is unfortunate, that he was not a member before, he might have been able, perhaps, to infuse
in his leaders a few principles of equity and justice towards the French Canadian, for he cannot have forgotten that the province of Quebec had almost always been ignored under the Borden-Meighen government. The hon. member for Kent must not have forgotten that his present leader, when Prime Minister, only invited or was only forced to invite French Canadians into his cabinet in the dying hours of his government; however, the province of Quebec, faithful to its motto, remembers.
The hon. member for Hull (Mr. Fontaine), in the course of this debate', has shown that the present government had always endeavoured to be fair to French Canadians and he gave proofs to support his contentions.
One could add further proofs. For intance, it was a French Canadian that the present government chose to negotiate with the French Republic, on behalf of Canada, a parcel of land which would serve to commemorate the glory of our brothers fallen on the battlefield, and it is you, Mr. Speaker, who obtained from France this grant of land on Vimy ridge.
The hon. member for Hull forgot to mention all the positions to which our people had been appointed and which, perhaps, would be too long to enumerate. Fie neither mentioned that at the door of every office in this building, we notice, this year, for the first time, bilingual inscriptions engraved on brass plates.
The friends of the hon. member for Kent, have never shown much enthusiasm for our language, if we are to judge from the answer given to the hon. member for Charlevoix-Montmorency (Mr. Casgrain) to questions he put to the government on May 5, 1920:
1.	Why is the calendar of the Clerk on the table-of the House of Commons in English only?
2.	Is it the intention of the government to have also on this table a French calendar?
3.	If so, when?
4.	If not, why?
Sir George Foster: My reply to the question asked by my hon. friend the member for Charlevoix and Montmorency is this:
In placing that calendar on the table of the House of Commons, traditions of former years since the origin of Confederation until our days have been observed. Under these circumstances, I do not deem it necessary either to replace it with another one or to put another one on the Clerk's desk. What was sufficient for the Fathers of Confederation should surely satisfy us, for we are not less intelligent nor more patriotic than our predecessors.
I think, Sir, that it is befitting to say a few words regarding the political campaign being waged by the friends, old and new, of the right hon. leader of the opposition (Mr. Meighen), in the province of Quebec. Important ques-
The Budget-Mr. Robitaille

tions are being discussed: tariff, British preference, protection, etc. In the "et cetera" is included conscription, of which the right hon. leader of the opposition has proclaimed himself the father. They reproach the 65 members of the province of Quebec for not having this act repealed. Is 'there a more low and despicable campaign than this one? I think, they are men connected with the law, barristers, who discuss this question in public. They have certainly forgotten an important factor; it is the views of their leader, who for them, is infallible. Allow me to remind them of it. On April 3, 1922, the present Premier (Mr. Mackenzie King) speaking on this question, among other things stated, what follows, which will be found on page 640 of Hansard:
If the statutes were being revised, Mr. Speaker, the commissioners would simply drop this act altogether. For us to proceed any further would be to take action which is wholly unnecessary.
To the above Mr. Meaghen answered immediately :
Of the correctness of the position taken by the Prune Minister (Mr. Mackenzie King) there is no doubt whatever. The act has no present force and effect; there is no room for legal dispute of any kind on that ,point. The act plainly applied to the then war, and to no other; it could not by any government be applied to any other emergency, contingency, or war whatsoever. Consequently, on the termination of thaA war, the act became obliterated so far as actual operation at any time is concerned.
The 'hon. Speaker put an end to the discussion in the following manner which will be found at page 644 of Hansard:
In any judgment this discussion is out of order. Any resolution presented in the House must have something positive as to its effect. If a motion is made or a bill introduced with a view to repeal that legislation must be in existence. From the opinions -of the Law Officers of the House of Commons and -of the Deputy Minister of Justice, and, after the 'opinion expressed by some of the leaders on both sides, I come to the conclusion that the Military Servioe Act, 1917, cannot be repealed, because it Shas exhausted itself, and is considered as non-existent at present in the statutes. Therefore I give it as my opinion that this bill should be dropped and that the discussion should not proceed and I so rule.
In spite of this fact, the friends of the hon. eader of the opposition continue at their neetings, to use this question for purposes of political capital by seeking to lead the people of our province astray. Tariff, protection and national policy are also discussed. What did they do with the tariff when they were in power? Did they alter it? Did they do anything to help trade and the labouring class? No. Yet these gentlemen charge us with ruining the manufacturers. Have the latter to complain of the changes made to the tariff 	.
by the present government? Far from complaining they are well satisfied.
Now, we are told that if business is at a standstill it is due to the British preference. In a brief article which appeared a short time ago in the newspaper La Patric it was stated that the manufacturers of boots and shoes of Maisonneuve, were not satisfied with the figures quoted by the hon. member for St. Denis (Mr. Denis) in his address on the budget, in regard to imports of boots and shoes, and they hoped that I would make the necessary corrections. I wish to state that I have received no protests on the part of the manufacturers of boots and shoes of my electoral division-and you are aware, Sir, that they are numerous-I am further informed that many are not affected by the British preference. Yet, this preferential tariff exists since a number of years-since 1907, I think. We heard of no protests when the Conservatives were in power; it is only within the last few years, since the Liberal party is at the helm of affairs that a great stir is set up in regard to this preferential tariff. I have a few official figures in hand; they are far from gainsaying those of the hon. member for St. Denis. It was thought in certain quarters, that the figures quoted by the hon. member for St. Denis only applied to imports of leather footwear, while in reality they included imports of all kinds of boots and shoes: leather, canvas, rubber and footwear made up of leather and canvas.
However, what is most important to us, what concerns the most our manufacturers and our leather workers, is to know exactly the figures of imports in leather footwear, that get the benefit of this preferential tariff. I have before me the statistics of the Department of Trade and Commerce which give the following figures for each fiscal year: 1914, imports $4,349,587-no mention is made of the years 1914 to 1918, they are exceptional years; 1918, imports $3,179,138; 1920, $2,731,591; 1921, $2,200,121; 1922, $1,338,775; 1923, $1,220,734; 1924, $1,546,216. Well, Sir, if figures speak, it is certain that the criticisms of our opponents are uncalled for when they state in our manufacturing centres, that the Liberal government's policy is on the eve of closing up all the factories. Far from closing their doors, our factories are working quite normally. I understand that quite a number of people are out of work; but if the boot and shoe manufacturers are unable to operate

The Budget-Mr. Coote
their factories to their full capacity it is clear the preference tariff in vigour since 1907 is not to be blamed for it, as we are importing to-day far less goods from England than in 1914 and in the following years; it is rather due to the overproduction in evidence under the extravagant administration of our adversaries. Moreover, these imports are bound to decline, on account of the pound sterling being now at par.
Allow me, however, to make a suggestion. I understand that if we favour the importation of British goods it is certainly not for the sake of the mother country, it is because we have mutual trade relations, and we grant certain advantages to England because we are getting something in return. Now, under the Act at present in force, imported goods must contain at least 25 per cent workmanship and! material of British origin, whilst Australia demands that at 'least 50 per cent of the workmanship and material be of British origin. I submit, Mr. Speaker, that we would do well to raise our ratio to 50 per cent at least.
The necessity for economy is another point insisted on by our opponents in the cities. They falsely contend that economy is not practised by this government. It is all very well for them to urge economy! It is all very well for these gentlemen to say: Do as I tell you and not as we do or have done. After squandering millions and billions, they now advocate economy 1 What they have saved does not amount to much, unless it be daylight, through their daylight saving enactments.
Now, Sir, I shall take the liberty to point out an anomaly in the Income Tax Act: it is that the consorts under the community of property clause are less favoured than those whose regime is separation of property. The incomes of consorts living under the community of property clause are considered as forming a whole, while those of consorts married under the separation clause are figured separately. In the last instance, the husband and wife benefit by the statutory exemption while the consorts living under the community regime are entitled to a single exemption.
I am of opinion, Mr. Speaker^ that the present discrimination that is being made in connection with the income tax of Public Utility
Companies providing gas and electricity should be done away with. Private companies are made to pay the tax while public ownership companies, like the Hydro-Electric of Ontario go scot-free. This is a disadvantage for the labouring class and citizens at large of Montreal and other cities similarly situated, since private companies invariably recoup themselves at the expense of the consumer.
Of course, taxes of whatever nature they may be, are not popular, and a further grievance is the lien retained by the government on the property of tax-payers in arrears. I think the government would perform an act of justice if it would cancel this section of the act which may be detrimental to the real estate business.
In conclusion, Mr. Speaker, I submit that the government would be well advised to establish a free section in the port of Montreal. That would be a great help to promote trade. If the plan proved profitable, a free section might be provided in the other harbours. I think these recommendations should be considered by the government, and I am satisfied that if carried out they would greatly further the progress of our country.


George Gibson Coote: Mr. Speaker, my chief reason for taking any part in this budget debate is a desire to place before the House and before the country the present condition of the farming industry in western Canada. I want to deal with the question as it affects western Canada particularly, because I do not pretend to be very familiar with conditions in eastern Canada. I make no apology for discussing this particular industry, because I think it is the most important in Canada. It employs more capital than any other industry in this country; it gives employment to more people; it provides the greater proportion of our exports. The hon. member for Vancouver South (Mr. Ladner), speaking a few days ago, referred to the amount of our export of agricultural produce. I think there was some mistake in the figures which he quoted. I have here a table taken from the trade report showing just what part agriculture plays in the matter of our total exports; I will not read this statement, but if I have the permission of the House I would like to place it on Hansard.
The Budget-Mr. Coote

The statement is as follows:
Exports
1921	1922	1923	1924Wheat, bushels	.. 129,215,157	136.489,238	215,074,566	256,870,237Wheat value	$179,090,730	$252,145,805	$267,758,559Flour, value	53,478,150	60.075,426	62,783,118Total wheat and flour	$233,468,880	$312,221,231	$330,541,677Total grains and farinaceous products	. .. $418,394,620	$272,021,473	$350,640,813	$363,608,617$409,898,38293,493,020
Total Canadian	farm products	 $503,391,402
Foreign farm products	 24,416,226
Wild life origin	*	 18,426,213
Marine origin	 30.988,812
Forest origin	 273.603.598
Mineral origin	 170.686,286
Mixed origin	 23,838.519

It will be seen from this statement that our total exports were $1,045,000,000 odd. Of that amount the export of wheat and flour was valued at $330,541,000. Wheat and wheat flour together constitute 31 per cent, Canadian field crops 40 per cent and Canadian farm products 48 per cent of our total exports. That shows that agriculture .plays a larger part in providing the exports from this country than any other industry.
Agriculture is very important also to our manufacturing industries in Canada. I have a statement here, copied from the Canada Year Book for 1922-23, giving the value of the products of forty of the leading industries in Canada, and the following will show the value of the products of the first four of these industries:
Value of Product
Slaughtering and meat packing	$ 240,000,000
Flour and grist mills	 239,000,000
Pulp and paper	 236,000,000
Lumber, lath and shingles	 207,000,000
These first two industries are entirely dependent upon our agricultural industry. I believe there is a general impression throughout Canada that a .big crop or a big yield .means prosperity to the farmer or to the man producing the commodity in question. The Right Hon. Mr. Fielding, I think, made a statement, two years ago, that one or two good crops would mend conditions in western Canada. Well, we have had two of the 'biggest crops western Canada ever had; 1922 and 1923 were two of the beet years we have ever seen in that part of the country, but the conditions there are not yet anything like ideal. I have before me an article from the Financial Post headed, 'A half size crop but more revenue in Saskatchewan". It goes on to show that the proceeds from this year's crop are practically

the same as those from the crop of 1923, although the yield is only half what it was in that year. I have another article from the same paper-and I like to quote articles from the Financial Post because it is generally highly regarded by many who are not engaged in the farming industry. This article is headed, "Farmers' profit based on prices more than yield". It goes on to show that in some of the years when the farmers have had the smallest crop they have had the largest financial returns. Let :me read just Ithe last two sentences of this article. It says:
Comparing the years 1920 and 1922. we find that in 1920 the total value of agricultural products was $550,641,471 while in 1922 it was $505,318,966, although in the latter year the wheat yield was 250,167,000 bushels, or very nearly two and one-half times as great as in 1920. Taking the years 1919 and 1921, the figures furnish the same undeniable proof that it is the price and not the volume of production which makes for prosperity in agriculture. In 1921 the farmers' total (income was $444,937,773, the smallest during the five years, but the wheat yield amounted to 201,347,483 bushels as against only 89,993,685 in 1919.
We have often heard in this House and we have often read in the press statements regarding the cost of producing wheat in Canada and in the United States as found by the United States Tariff Commission. This commission made a very extensive inquiry to determine the cost of producing wheat in both countries, and I think it would be interesting to this House to know something of what that commission did report.
I have here another article, again from the Financial Post. It is headed, "Costs ninety-one cents to grow bushel of western wheat, but there are objections to calculations of United States expert." It goes on to say:
It cost according to the Tariff Commission of the United States which spent a good many thousand

The Budget-Mr. Coote
dollars to find out, 91 cents a bushel to grow wheat in western Canada in the three years from 1921 to 1923 inclusive. That is the cost of wheat at the elevator.
Further on it says:
But next you have to make an adjustment on account of taxes. Taxes were left out of consideration by the Tariff Commission, but they can in no wise be left out of the calculations of the farmer. You can estimate those for the period reviewed by the commission at from five to ten cents a bushel to be added to the 91 cents.
Further on, alter drawing attention to some other discrepancies in this report, it says:
Let us call it one dollar a bushel, and to recall the statement that many farmers have repeatedly made in the past two years, that if they could be assured of a dollar a bushel net at the elevator for their wheat, before paying handling and transportation charges, they would be content.
I have here a statement prepared by the Bureau of Statistics, showing that the farmers of the three wesltern provinces produced in the years 1921, 1922 and 1923, 1,107,552,000 bushels of wheat, and that they received for that $826,-
376,000.	Now the total production as I have stated was 1,107,552,000 bushels, and taking the cost price alt $1 per bushel, as figured out by the Financial Post, it gives you a production cost of $1,107,552,000. If you deduct from that the $826,376,000 that the farmers received, you will find that the farmers of the three prairie provinces lost in those three years in the production of their wheat crop $281,176,000.
We have heard a good deal, Mr. Speaker, of the losses that some of our other industries have sustained, but I would like to know whether any one of them has sustained such a loss in its production as the farmers in western Canada on their wheat crop.
If you object to these figures in the Financial Post, and take rather those as set out by the Tariff Commission, of 91 cents a bushel, you find that the farmers of the three prairie provinces lost in the production of those three crops $181,496,320.
I have here a statement taken from an immigration pamphlet issued by this government. It is entitled " Canada, the New Homeland," and is issued by the department of the hon. the Minister of Immigration. It says in part:
Evidence was given in 1923 before the United States Tariff Commission to show that the Canadian farmer was able to produce a bushel of wheat for 46 cents less than the United States farmer. The per bushel cost in the United States in that year was $1.49; in Canada $1.03.
In 1923, according to the statement of the Bureau of Statistics, we produced 452,260,000 bushels of wheat. At $1.03 a bushel the cost
of production of our total crop that year wfis $465,827,800. The amount that the farmers received for this crop, as given by the Bureau of Statistics, was $294,686,000, showing a loss to the farmers on their wheat production for 1923 of $171,141,800. I would not like to say that this statement of the Immigration department was right, but on the other hand,
I do not think they have overstated the case. I do not think it can be fairly shown that wheat can be produced for less than the cost per bushel which they give here. This article which I have taken from the Financial Post goes on to say that the writer started out on his calculations with the spending power of the farmer in mind. He says:
We have calculated away the profit or devoted it to the payment of debts. Has the farmer's purchasing power vanished in the calculation? Not at all. It is the current turnover of this business of farming that is important.
In what other business, Mr. Speaker, is the turnover considered as important? In every industry discussed in this House, it seems to me, except agriculture, it is the profits that are the determining factor. If profits can be made and dividends paid, that is the supreme end to be attained, but according to these financial papers, with agriculture it is different. The important thing, it says here, is the turnover. It says:
A business with a total cash return of $350,000,000 is a pretty important thing to other business even if the whole receipts are eaten up in the living of the proprietors and their families, and the upkeep of their establishments. You do not calculate the importance of an industry to the country by the amount of dividends drawn out.
I hope when we come to discuss some of the other industries in this House that point will be borne in mind, but I have never seen that statement in the Financial Post or in any other financial journal in regard to any industry except agriculture, and it cannot be wondered at by financial men in this country that the farmers finally decided to send farmers down here to speak for them in this House, and demand of this House a little bit of fair play. It says further on:
The business is going on again next year.
That is the business of producing wheat, whether produced at a profit or a loss:
The business is going on again next year, again with a necessary turnover of from three hundred to three hundred and fifty million dollars. Some debts paid off this year will simply mean the re-establishment of credit for another year's operations. Make all allowances necessary for such purely financial transactions as are involved in the purchase of land and the payment of interest on mortgages and debts and you come to the conclusion that the business of raising wheat in western Canada involves the expenditure on actual purchases of merchandise and
The Budget-Mr. Coote

material of from two hundred to two hundred and fifty million dollars.
How those expenditures are likely to be distributed is another story, but at least it is clear that there is big business here.
It is quite clear, Mr. Speaker, that there is big business here, whether or not there are any big profits. I want you to notice just what the writer stated, that the business of raising wheat in western Canada involves the expenditure on actual purchases of merchandise and material of from two hundred to two hundred and fifty million dollars.
'Compare that with the actual receipts to the farmers which were in 1921, $219,000,000, in 1922, $312,000,000, in 1923, $294,000,000.
I expect, Mr. Speaker, that some hon. gentleman will ask, what about the crop of
1924?-we heard you got $2 a bushel for it. I have tried to figure out 10 pun. the cost of producing the crop of 1924 by the same method as was employed by the United States Tariff Commission, and to the best of my ability I find that it cost about $1.15 to $1.20 a budhel to produce the 1924 crop. I find from the statement furnished by the Bureau of Statistics that the farmers of Manitoba netted $1.24 per bushel, those of Saskatchewan $1.21 per bushel, and those of Alberta $1.20 per bushel. I should like to have the permission of the House to place on Hansard these two statements furnished by the bureau:
Area, Yield and Value of Wheat in the Prairie Provinces, 1924
Province	Area acres	Yield per acre bush.	Total yield bush.	Average price	Total valueManitoba	. 2,459,408	16.9	41,464,000	$1.24	$ 51,415,000Saskatchewan	. 13,033,000	10.2	132,918,000	1.21	160,831,000Alberta	. 5,573,813	11.0	61,312,000	1.20	73,575,000Prairie Provinces	. 21,066,221	235,694,000	285,821,000 [DOT]Area, yield and	value of wheat	in the Prairie	Provinces, 1921,	1922 and 1923	Province	Area acres	Yield per acre bush.	Total yield bush.	Average price	Total valueManitoba-	1921	. 3,501,217	11.2	39,054,000	$0.91	$35,539,0001922	. 3,125,556	19.3	60,051,000	0.83	49,842,0001923	. 2,915,915	12.3	35,804,000	0.67	23,989,000Saskatchewan-	1921	. 13,556,708	13.8	188,000,000	0.76	142,880.0001922	, 12,332,297	20.3	250,167,000	0.85	212,642,0001923	, 12,791,000	21.3	271.622,000	0.65	176,554,000Alberta-	1921	, 5,123.404	10.4	53,044,000	0.77	40,756,0001922	. 5,765,595	11.3	64,976.000	0.77	50,031,0001923	5,172,643	28.0	144,834,000	0.65	94,143,000Prairies Provinces-	1921	, 22,181,329	280,098,000	219,175,0001922	21,223,448	375,194,000	312,515,0001923	20,879,558	452,260,000	294,686,0001,107,552,000	$826,376,000
In order to present to the House the prices received by western farmers as compared with those paid to farmers in other parts of Canada I should like to place another statement on Hansard if I have the desired permission. It shows the price of wheat, oats, 'barley, hay and clover received in the provinces of Quebec, Ontario, Manitoba, Alberta and British Columbia:
Average price per bushel received by farmers in different provinces, crop 1923
Wheat-
Quebec	 $1 47
Ontario	 97
Manitoba	 67
Alberta	 65
British Columbia	 1 20

Oats-
Quebec	 57
Ontario	 44
Manitoba	  30
Alberta	 24
British Columbia	 62
Barley-
Quebec	 91
Ontario	 60
Manitoba	 37
Alberta	 33
British Columbia	 82
Hay and Clover-	Per	tonQuebec	$11	00Ontario	
10	80Manitoba	
8	00Alberta	
6	00British Columbia	
20	25
The price received for wheat is indicative of the prices received for all commodities.

The Budget-Mr. Coote
It will be noticed that the price of wheat in Quebec was $1.47, in Ontario 97 cents, in Manitoba 67 cents, in Alberta 65 cents, and in British Columbia $1.20. I should now like to have placed upon the record a statement showing the prices paid for fat steers, fat cows, and hogs in Montreal, Toronto, Winnipeg and Calgary. Given in that order they are:
Best steers per
hundred pounds
Montreal	
$6	16Toronto	
7	04Winnipeg	
4	57Calgary	
4	53
I should like you to note, Mr. Speaker, that there is a difference of about $2.50 per hundred pounds between the price received in the east and that received in the west.


Herbert Meredith Marler: What accounts for the
difference between the Montreal price and the Toronto price? My reason for asking the question is that I am very much interested' in the subject.


George Gibson Coote: I would not like to account
for the difference; I am not well enough acquainted with the conditions in the east.


Herbert Meredith Marler: There is a difference of
about $2 is there not?


George Gibson Coote: No, the difference is about
90 cents. The price given is $6.16 in Montreal and $7.04 in Toronto.


Herbert Meredith Marler: I would think that the
price would be more in Montreal than in Toronto?


George Gibson Coote: Yes, if the home market
fixes the price it ought to be better in Montreal. But possibly the price is regulated by a packers' combine. Now as to the price of cows:
Per hundred ipounds
Montreal	 $4 55
Toronto	 4 25
There the condition is reversed; 25 cents more is paid in Montreal.
Winnipeg	
$3	30Calgary	
2	90
Select hogs:
Per hundred pounds
Montreal	
$10	09Toronto	
10	12Winnipeg	
8	67Calgary	
8	55
I am giving these prices, Mr. Speaker, in order to impress upon the House the difficulties which the farmers of western Canada are confronted with.


Henry Herbert Stevens: Will the hon. member give the authority for his information and the dates?


George Gibson Coote: Yes, this information is taken from the Monthly Bulletin of Agricultural Statistics issued in January, 1925, and the prices are for December, 1924. The former statement which I gave is taken from the same bulletin, January, 1925. Then from the bulletin issued in February, 1925, I shall quote figures to show the difference in price of farmers' produce to-day as compared with 1915:
Alberta-	1915	1924
		 113	38
		 69	38
Other cattle	
49	23Total cattle	
53	27Ql^ppp	
8	10
13	12
The only live stock which show an increase in price in that time are sheep. In all other classes there is a very big decrease, particularly in cattle, the price for total cattle dropping from an average value of $53 to an average value of $27. To further impress upon the House the position of the man who is producing cattle in western Canada and the loss which he has taken, I may say that the average value of cattle exported from Canada to the United States in 1921 was $73 per head. In the year 1922, the average value had dropped to $23 per head. I have not the publication from which those figures are taken but they were published in one of the government reports issued a year ago.


Herbert Meredith Marler: Could my hon. friend point out to those who desire to try and get some knowledge of this subject what his reasons are for this drop in price? I am merely asking for information not to combat my hon. friend's statement.


George Gibson Coote: There are quite a variety of causes. The chief one was I think, the deflation which hit us in the year 1921; then a poor crop which made feed very scarce. The western farmer in many instances as a consequence was compelled to sacrifice his cattle because he did not have feed for them. In other cases he was forced to sell-either by banks, loan companies or some other creditors -and there seemed to be nothing to uphold the market. Prices went down until one-half the cattle were sold for their value for canning purposes.


Mr. LEWIS:: Was there about the same kind of cattle in 1921 as in 1922?


George Gibson Coote: No, I think the class exported in 1922 were not quite as good as those exported in 1921, I should say that in all fair-
The Budget-Mr. Coote

ness. The reason for that was, as I say, that in 1922 cattle were 'being forced out of the farmer's hands on to the market for a variety of reasons. Many of these cattle of course, were young and not finished, and that partially accounts for the big decrease. The increase in duty under the Fordney tariff, or tihe emergency tariff that was in force I think at that time, was also very largely responsible. We had the home market to ourselves, as an hon. member sitting near me suggests, but the home market was not sufficient to absorb the production.
I have here a little item from the report of the telephone department of the government of Alberta for the year just ended and I think it will give some indication of the condition of the farmers in Alberta at the present time. In the year 1923 we had the biggest crop in our history, but it would be along in the year of 1924 before a great many of those fanmers would have received the value of that crop so that its purchasing power could be felt. In 1924 although we had a short crop the price was the biggest we had received since the closing of the war. Yet I find that in the year 1924 there was a drop of $4,508 in rural phone revenue; a total of 1,937 rural phones were removed during the year; and 1,318 phones were added showing a net loss of 619 rural phones. In exchange phones there was a net gain of 904 during the year, showing the difference in the condition between urban and rural districts. There is now a total of 54,000 phones in use of which 20,000 are rural. There are said to be 75,000 farms in Alberta, so that apparently less than one-third of those farms can afford to own a phone. Now, this certainly shows the reverse of prosperity after having had in 1923 the biggest crop that Alberta ever produced, a bigger one than we may naturally hope to produce for some years to come. Just what use is there in this country deluding itself with the idea, in the face of these actual conditions, that the farmers in the west are overburdened with prosperity? I am not expressing my opinions here; I am trying to give some actual facts to this House. I sometimes think this is useless because, as a rule, the budget speech of a back-bencher like myself is not listened to with very much attention. I am a little surprised that somebody has not already risen and suggested that we should try mixed farming. I have endeavoured to show this House that there is very little hope for the farmer in raising cattle. We have increased our production of butter in Alberta during the last year when I find the production was 21,500,000 pounds as compared with

17,800,000	pounds in 1923. I remember, about a year ago, being told that our trouble in the west was that we were all grain farmers and that we did not keep any milch cows or poultry or pigs on the farm. I was a little surprised the other day to find that Alberta now stands second, I think, of the provinces with reference to the number of poultry on farms, the average number in that province being 80 as compared with Canada's average of 63.9. I also notice that Alberta's egg exports grew 33 per cent during 1924. I have figures here, but I will not take time to read them to the House showing that the total grain crops last year were less than one-half the value of our agricultural production. Therefore, hon. members will see that the Alberta farmers are trying, not only grain raising, 'but any avenue of production that they feel is open to them at all. The question will naturally arise, how the farmers can go on producing wheat at a loss, as I have already shown in my statement tonight. The first reason is that they are working for less than a living wage. Not only that, but the wife is helping to earn the living. She is trying to keep things going by raising poultry and milking cows. If there are any children in the family, they are pressed into service and they are encouraged to raise hogs, ' calves, chickens, and to help to milk the cows. In fact, the whole family must work hard in order to keep the home going.	As I go
through Canada from one end to the other, it strikes me very often that in no other industry do we see the women helping to earn the living. I remember noticing a statement in a paper here recently in reference to some noted farmer in western Canada who had been to the Old Country, I think under the auspices of the Immigration department. This paper was telling how well this gentleman had done in the west, and I noticed one thing that it stated in reference to his wife was that she had at times cooked for twenty-four men. Any man who has a wife capable of cooking for twenty-four men, helping to earn the living, surely should make some progress. He should be able to make enough to get a trip to the Old Country once in a while.


Mr. STEWART (Argenleuil):: Did he take her along?


George Gibson Coote: I believe he did, and I am glad that he did. But there are many women in western Canada who have cooked for a number of men for many years and who are not yet in a position to take a trip to the Old Country. If there is one thing more than another that makes me wish to stay in this farmer's fight for a fair deal, it is the con-

The Budget-Mr. Coote
dition of many farm women in western Canada. I have not been to Nova Scotia to see the shacks that the minere are living in there;
I believe some of them are very poor affairs; but I have seen people living in shacks in western Canada that, I think, are not any better. Some of these shacks are one-ply of boards covered with tar paper, and both the boards and the tar paper were protected by a very substantial tariff. That is just on the side. I do not want to dwell on this too long, so I must hurry on. One reason why the farmers are able to continue producing at a loss is that the farms are depreciating. Buildings and fences are not being kept in repair and the land is becoming weedy. They cannot afford to hire sufficient help to do all these things. Neither can they afford to buy the necessary paint to keep their buildings painted.
Then, the cost of raising wheat varies in different localities. This statement of the United States Tariff Commission to which I have referred shows that some of this wheat was produced at a cost of about sixty cents per bushel, but in other localities the cost ran as high as $1.40 per bushel. In those districts where they receive more than the average crop, they are able to go on producing under present conditions, but in those districts where they are receiving less than the average crop, the farmers are gradually going deeper into debt. Because so many of these farmers are going into debt and have got into debt in the past through no fault of their own, I want to urge upon the government that one of the first things they should do when this budget is finally disposed of, is to bring down some amendments to the Bankruptcy Act, such as were recommended by the Banking committee last year. The government refused to bring in legislation to give effect to those amendments. I do not know all the reasons that may have deterred the government from bringing in this legislation; but it will cost this government absolutely nothing to bring them in and if they refuse to do so, we are going to lose another few thousand bankrupt farmers who will go to the United States to get rid of their debts. If they were given an opportunity of going through bankruptcy, I think they would remain here, and in time they might again become successful farmers. They are far better citizens for us to have in this country than many of the immigrants brought in from Europe to take their place.
I want to urge the government to revise the Canada Grain Act at this session. The Minister of Trade and Commerce (Mr. Low)
I understand-I did not happen to be in the House at the time-stated that he did not intend to proceed with the act this year. I want to urge the government to proceed with that act. I think the present act caused a loss of millions of dollars to the farmers in western Canada last year, and that loss could have been avoided, I believe, under a proper Canada Grain Act. As the hon. member for Humboldt (Mr. Stewart) pointed out the other day, we have large wheat pools operating in western Canada, and the Grain Act, needs some revision to allow these wheat pools to operate fairly with the old grain companies that are doing business there. I do not think this House should prorogue until the Canada Grain Act has been revised, regardless of what else we do.
I wish to urge upon the government some action in reference to establishing a system of rural credits. I am not going to -argue the subject because I think it is pretty well understood in this House. But I want to impress upon the government -and the House that western farmers cannot continue to carry on under circumstances such -as I have pointed out here and pay from 8 to 10 per cent on long term loans and from 8 to 13 per cent on short term loans. But the most pressing thing is the long term loan. Many of our farmers now are just on the very edge of going into bankruptcy or keeping out of it. Some men will say that the farmers have had too much credit, and I will agree that many of them have had too much credit. It has been the ruination of them. But it costs a farmer no more to carry a loan of $8,000 at 5 per cent than to carry a loan of $5,000 at 8 per cent. That is just where the difference comes in. The farmer possibly can make use of two or three thousand dollars if he could obtain it at 5 per cent, but if he has to pay 9 per cent he had better do without it. Many of these farmers are in a position where they now owe the money they obtained by a short term loan at 9 per cent. I mean a four or five year loan. But a man in that situation has very little purchasing power. Every cent he can make must go on the mortgage. I do not think we can do anything in Canada which would stimulate business more than establishing and putting into operation a proper system of rural credit. It would mean a reduction of 2 per cent in the interest rate, and that would be equivalent to three or four cents a bushel added to the price of the wheat. It is pretty difficult for us to devise means of increasing the price of wheat three or four cents a bushel. Two per cent reduction of interest would ba
The Budget-Mr. Cootc

equivalent to that increase. Just here I want to refer to a matter which possibly may seem very small to the Acting Minister of Finance, but I desire once more to urge it upon him; that is that he should abolish the war stamo tax on notes. I have here a statement made to me by a banker in Alberta showing one loan current since 1919, as follows:
Loan account current since 1919, various amounts which have not been paid and which now aggregate in the neighbourhood of $10,000-total revenue tax $42.89. This loan is in addition to temporary borrowings for current expenditures, et cetera and as the party is unable to pay any part of the loan the revenue tax was added into each renewal thus increasing his loan more rapidly.
I have a statement of another loan current since 1919, various amounts aggregating at the present time in the neighbourhood of $20,000, where the revenue tax amounted to $101.38. I wish to ask the Acting Minister of Finance (Mr. Robb) if he thinks it is a proper method of taxation to tax a man who is hopelessly in debt. We heard a great deal from the hon. member for North Waterloo about the nuisance taxes, and I heartily agree with most of what he said. I believe that we may have to put up with the nuisance tax for a while but surely the tax on notes could be abolished, or reduced to two cents, the same as the tax on receipts. The man who has received payment can afford to pay a two cent tax, but in the case of the man who owes the debt and is forced by his creditors to put a stamp on his note of four cents a hundred dollars it seems to me nothing less than robbery.
Then I urge the Acting Minister of Finance to place the farmer's income tax on a three year basis. There are many cases where a man has produced three or four crops at a loss, and sometimes he does not get a crop at all. Then a good year comes and he makes sufficient profit to render him liable to assessment for income tax. In some cases a creditor would have a lien on all his crop and the man would have absolutely nothing to pay his income tax, although he was liable for it.


Hugh Alexander Stewart: What is the
difference between the farmer and the professional or business man in similar circumstances?


George Gibson Coote: foreign and British capital, as of January, 1923, in Canadian government, provincial, municipal and corporate securities, properties and enterprises, about 5J billion dollars.
Later on he says:
It is computed that more than two hundred branch factories were opened in Canada by Americans in 1919 and a great number in 1920 and 1921, and that late in 1922 there must have been over 700 such establishments, with a further number seeking suitable locations. One of the incentives for this development is that the American manufacturers can thus supply the Canadian market and at the same time escape the Canadian tariff.
I hope hon. members will note that sentence :
-and at the same time escape the Canadian tariff.
Then he continues:
American investment in Canadian industries has unquestionably largely increased since 1919, and so on.
And he adds:
This is apparently what has happened, the United States has made a brand new investment in Canadian enterprise of a billion and three quarters of dollars.
It seems to me, Mr. Speaker, that this investment of American capital in Canada has been largely increased because of our tariff. I do" not believe that the Canadian people have given enough serious thought to this condition. It would be interesting to know just how much we have taxed ourselves through the tariff for the benefit of the American millionaires who establish these industries in Canada. Take the Ford Company of Canada as an example. The dividends they have paid and their present equipment total about thirty-million dollars on an investment of a hundred and twenty-five thousand dollars; and American stockholders hold the majority of the stock in that corporation. This article states that about seven hundred American manufacturers have established branch factories here. It is to be hoped that they have not all taxed us to the same extent as has the Ford Company of Canada. And yet when I bring in a resolution asking for a reduction of the duty on automobiles so that these American millionaires could not tax us quite so heavily, the Acting Minister of Finance says that he cannot accept it because he must have the revenue from the tariff on automobiles. I did have a statement showing the tariff revenue from automobiles for each year for the past ten years, but I neglected to bring it with me. It shows that the customs duties collected on automobiles are growing less and less each year as these factories are established in this country and secure the market. Not only have we taxed ourselves to establish these branch factories here, but we

must go on taxing ourselves in perpetuity, because if we are to believe the arguments of our protectionist friends, if the tariff is removed or lowered a little bit these factories will be closed up, and then we shall have taxed ourselves for nothing. It seems to me that we are taxing ourselves to establish American industries in Canada so that they may charge us higher prices than they charge to their customers in foreign countries. In fact, as I put it on a former occasion, wTe have taxed ourselves on automobiles to the extent of 40 per cent-that is what it works out at-so that the manufacturers can sell automobiles cheaper to New Zealanders than they do to us. I have here a statement showing the percentage of capital owned in Canada and the percentage owned outside of Canada in a number of leading industries in this countiy, published in 1919. I do not want to read it all to the House, and if I may be allowed to place it on Hansard I would like to do so.
The statement is as follows:
Percentage of Capital invested in Canadian Industries Year 1919	Owned
Owned outside in	of
Canada Canada
Per	Per
cent	cent
Lumber industry	61	39Pulp and paper	
68	32Agricultural implements	
58	42Foundry and machine shop	
70	30Building and construction industry. 46.4	55Electrical apparatus industry	
36	64Meat packing	
57	53Rubber	
40	60Patent medicines	
12	88Paint and varnish	
47	53Sugar	
67.2	32.8Car construction	
40.4	59.6Drug and chemical	
36	64Brass and copper castings	
55	45Condensed milk	
48.5	51.5Refined petroleum	
46.7	53.3Automobile accessory	
6.5	93.5Automobile industry	
39	61
There has undoubtedly been an increase since that time in the percentage held by the United States investors in certain industries, notably the pulp and paper and automobile industries.
Now, just a word or two more about the establishment of these American industries in Canada. I brought to the attention of the House what it cost to have the Ford Company establish a branch in Canada. I could give many examples, but I shall refer to just two or three. One is the Canadian General Electric Company. I notice they have recently announced a dividend of six per cent on the common stock of $10,000,000; their preferred stock is $2,000,000. This company is,

The Budget-Mr. Coote
I am informed, really a branch of the General Electric Company in the United States. But we put on a tariff to protect them from the competition of the same concern in the United States, with the result that a radio which sells at $S3 in the United States costs $98.75 in Canada. Then I have here a statement of the Sherwin Williams Company in Canada, which I believe is really a subsidiary or branch of the Sherwin Williams Company in the United States. I find that this company consists of a merger of three companies, formerly the Sherwin Williams Company, Lewis Berger and Sons, and the Canada Paint Company. They had a total capitalization of $2,500,000. After the merger was completed, we find they had bonds of $2,450,000; perferred stock, $3,000,000; common stock, $4,000,000; total capitalization, $9,450,000. I quote from Greenshields' market report of a year ago regarding this stock. It says:
After provision for all prior charges, including depreciation, renewals and interest, earnings available for dividends on the 7 per cent cumulative preferred stock have averaged since the inception of the company $585,210 per annum. This is equal to 18.1 per cent on the average preferred stock outstanding and is equal to approximately two and a half times the annual dividend requirements at the present time.
Dividends are now being paid on the common at the rate of 6 per cent.
There is a duty on paint, "not otherwise provided," of 20 per cent, 27| per cent, and 30 per cent. Every time I travel from here to Montreal and look at the large number of buildings that have never received a coat of paint I cannot help but wonder that these Montreal magnates do not lower the price of paint a little bit. I suppose those who defend this tariff would say it makes work for the paint makers in Canada. That may be true, but if paint were cheaper the farmers might be able to hire somebody to put paint on their barns and we would provide some work for painters and give employment to more men than are now employed in the paint factories. Nothing looks more desolate to me than building after building that has never received a coat of paint. Some of them have probably been without paint for thirty years and I suppose they will stay without it for another thirty years before we will get the duty on paint reduced.


Mr. McMASTER:: The wood would need
to be sound.


George Gibson Coote: Well, it is good Canadian
lumber. I have here an item from the Financial Post of a year ago telling about a meeting of manufacturers in Liberal Quebec at which a pretty strong protest was registered against any proposal to reduce the protection 160
necessary for the prosperity of the industry. It says that among those attending was "W. S. Fallis, Sherwin Williams Company, Montreal". He was there, I presume, to look after the duty on paint.
Then, coming to some strictly Canadian companies, I want- to throw out a word of cheer to those who are so concerned about the steel industry in Canada. I find that the Steel Company of Canada was a merger of five companies, the combined capital of which was $9,969,500. Of this amount a large percentage was common stock, because there had been several mergers before. The new merger issue consisted of bonds $7,500,000; preferred stock, $6,496,300, and common stock $11,-
500,000,	a total capitalization of $25,496,300. You will notice that over half of this was water, but it is now capital. Here is an item from the Financial Times of a year ago. It says in regard to the Steel Company of Canada:
During the decade there has been paid on account of preferred dividends a sum of $4,547,411. Deduction of this figure from the ten years' net income leaves net earnings available on the common stock of $15,828,053, which indicates average annual earnings over the period of $1,582,805, or 13.76 per cent per annum. This is almost double common stock dividend requirements of 7 per cent per annum.
I quote the following also as showing the earnings of the Steel Company of Canada for the past year:
Steel of Canada's position is steadily becoming stronger, in 1924, despite adverse conditions and the tariff.


Herbert Meredith Marler: Its earnings were less,
though.


George Gibson Coote: I did not take the trouble
to read about the earnings. Anyway, the company is still in a splendid position and still able to pay dividends out of earnings.
I seem to have mislaid a statement I wanted to give the House in Tegard to the textile industry, because the member for York-Sun-bury (Mr. Hanson) bewailed the condition of that industry and I wanted to make some reference to it. However, I should like to draw7 the attention of the House to the fact that the common stock of the Dominion Textile Company when this merger was formed was $5,000,000, but the money invested in that stock was only $500,000. That is, it was sold	at $10 a share.	The	earnings on thisstock	have certainly	been	very	handsome.A few years ago the stock had risen to $213	per share. As	that	made	the stockhard	to trade in on	the market	there was
a split, up of three shares for one, and now the common stock of that company stands at $15,000,000. They have paid dividends on

The Budget-Mr. Coote

this common stock for many years. I think I gave some statistics about this company two years ago, so it is not necessary for me to go into it further now; an investment of $500,000 some years ago has now become $15,000,000. We have here, I think, a good example of how capital is created.


Herbert Meredith Marler: I think I should correct my hon. friend in that respect. The Dominion Textile Company took over a number of mills at a very moderate price. In addition to the $500,000 my hon. friends speaks of, those who got the common stock had to put up a great deal of money with respect to the bonds. I think my hon. friend should be quite certain of the statements he makes with regard to that company. I am not trying to defend it in any way, but I do not think it fair to say that $500,000 has increased to the amount he suggests.


George Gibson Coote: I think a fairly complete statement regarding this company is given in the Journals of the House for the year 1919, and I think the facts there will be found exactly as I have stated them to-night, except that since that time the $5,000,000 has been increased to $15,000,000. If I had the Journals of the House I could produce the statement.


Herbert Meredith Marler: The Journals of the House are not necessarily right. A statement made in 1919 is not necessarily right.


Joseph Archambault: May I point out that during the inquiry into the high cost of living the president, I think, of the Textile Company admitted those facts.


George Gibson Coote: I think that is substantially correct. It was not the president, but the secretary of the company.


Andrew Ross McMaster: It was Mr. Daniels.


George Gibson Coote: I believe it was Mr. Daniels. I would like to point out now how capital is created. I have here a statement of the Sun Life Insurance Company, issued a year ago, and in a printed list of their investments I find that they hold common stock of the Dominion Textile Company for $1,007,656,23. The money which the people of Canada have paid to this insurance company to provide for their widows and orphans would surely be considered actual capital, and we now find this money invested in this common stock. So I think it can fairly be claimed that this $15,000,000 is now actual capital. The men who originally purchased this stock I presume will still control at least 51 per cent of it. They have received handsome dividends, because some years ago I saw a statement made
IMr. Coote.]
that this common stock had returned in dividends ten times the amount originally paid for it. They have sold a large part of this common stock to the public, and they now have several millions of real money invested in the common stock of this corporation. I am sure they feel perfectly secure, knowing that the public will now protect them because as I have shown the public are vitally interested.
I could show, too, that this insurance company, one of the largest of its kind in Canada, has $350,000 of the common stock of the Canadian General Electric Company, and $1,965,000 of the General Electric Company, as well as common stock in several other companies.
I do not wish to deal with the tariff any . further, Mr. Speaker, except to refer very briefly to the question of protecting the farmer through the tariff. I't is rather strange that a tariff on wheat does not increase the price of wheat, whereas a tariff of 35 per cent on automobiles affects the price of automobiles to the extent of 40 per cent. The tariff will increase the price of goods if those who are producing the goods are few enough to get together in a combine or gentleman's agreement and fix the price. A tariff on boots and shoes will not hurt us very much in this country if the boot and shoe men do not take advantage of the tariff to force up their prices, nor will the tariff on any other article increase the price very much under those conditions. The producers of wheat are too numerous to get together and force up the price of wheat, even if you did put a tariff on it. I admit that some farm produce can possibly be advanced in price through the tariff. That the price of apples can be advanced through the tariff has been demonstrated to be a fact; that is the way it has worked out. But it will not work that way with wheat and cattle because the men producing them are too numerous to get together.
I have here a little article from Commerce and Finance, a financial paper issued in New York entitled, "Congress, Coolidge and the Farmer." It deals at some length with the situation of the agriculturists in the United States. It mentions the desire of the government and of the public men in the United States to improve the financial position of the farmer in that country. It devotes considerable space to the McNary-Haugen bill, which would create a government body to handle wheat and charge the American consumer about 42 cents a bushel more for wheat than was charged to the buyer in foreign countries. It goes on to say that this bill was killed in

The Budget-Mr. Coote
congress for certain reasons. It then says that the bill will be up again, and if that bill is not put into effect some other marketing agency will likely be created in an endeavour to assist the farmer in marketing his products and in charging the American consumer more than the foreign purchaser of wheat. It also states that in the United States they are endeavouring to persuade the farmer to limit his production, but the writer of this article says:
Whether the remedy be production or marketing the starting point is production. If this first step is omitted, the experts and the congressmen may mill
around in circles, but will never arrive at any goal.
I want to draw the attention of the Minister of Immigration to that fact. If he goes on endeavouring to fill up the vacant lands in this country with farmers, what are we going to do with that production? This article is by James E. Boyle, Professor of Rural Economy, Cornell University, who has made a particular study of this subject. This is what he says about the tariff:
I am no defender of the protective tariff. I agree with the official findings of the American Farm Bureau Federation that our present tariff is costing the American farmers three hundred millions of dollars a year.
I do not think I can leave the question of the tariff with any better quotation than that. That is the last remedy I am going to suggest to the Acting Minister of Finance for the position the farmer in the west finds himself in to-day. He might reduce the tariff -on a few necessities which the farmer has to purchase.
I have here a little pamphlet published by the Edmonton Journal, which, as you all know, is generally regarded as a Conservative organ. They are advocating a " Canada Forward " policy. They evidently have discarded the old National Policy. They say:
A Canada Forward policy should recognize frankly that agriculture is and must be for some time Canada's basic industry, and that there can be no general or permanent prosperity in this country except under conditions that make for a prosperous agriculture.


Charles A. Stewart: They are
not advocating reduction of the tariff, are they?


George Gibson Coote: Yes, I think I can show they are advocating it, but I do not want to make too long a. speech.


Charles A. Stewart: I never
caught them at that before.


George Gibson Coote: They go on to say that if there are certain industries in Canada which cannot stand on their own feet, they have 160i
got to be eliminated, or something to that effect. He says here in part:
If Canada is to compete with other nations our agricultural methods and our industrial processes must reflect the latest achievements of agricultural and industrial science. Much of our agricultural products is sold in the world market where tariffs cannot avail, and Canada cannot afford the luxury of tariff protection for industries that are not one hundred per cent efficient in their industrial processes.
And I think on another page he does advocate a gradual tariff reduction.
Now I want to refer to certain remarks made by ithe hon. member for Vancouver South (Mr. Ladner) in his speech two days ago. He said in part^-page 2432 of Hansard:
My submission is that it is entirely because of the Progressive party, and very largely their views from a purely economic view are sound. They say: We produce wheat in our country; wTe sell in the markets of the world and we buy in a protected market; therefore if we can eliminate the protective duties we may get our goods cheaper and have a bigger margin of profit or be able to sell more wheat in the markets of the world. That is a hard argument to answer from the economic point of view.
Later on he says:
The value of w'heat and wheat flour exported was $327,000,000, or 22 per cent of the total agricultural production. So that this 22 per cent, representing the views of the prairie provinces through the Progressive party in this parliament, are dominating the government and the fiscal policy of this country. There is our trouble.
I should like to draw to the attention of the hon. member for Vancouver South -the statement of the Premier of Ontario, made I think about a year and a half ago, and as near as I can repeat it it was that Ontario had always dominated the politics of the Dominion. I thought at the time that the Premier of Ontario had made a very correct statement, and I should like to suggest to the hon. member for Vancouver South that he might confer with the Premier of Ontario and see whether he is not, after all, mistaken. I feel that Ontario, and possibly we might add Quebec, has dominated the policies of this country and I think, possibly, will continue to do so. It is only natural for them to expect that they will, because they are the populous parts of Canada and return a majority of the members of this House. But I should like to refer you again to some of the words used by the hon. member in question. He says the Progressive argument is a hard argument to answer and he admits that it is hard to answer our argument from the economic point of view. But he goes on to point out that we are in the minority and asks why should our views prevail-why should they influence this government? If our views were influencing this government I
The Budget-Mr. Coote

for one would support tie present budget; but I do not think this is the ease, and I am going to vote against the budget not simply because our views are not influencing the cabinet, but .bycause I think the policy laid down in the budget is not one that I can support; it is not in line with the platform on which I was elected and I intend to stand by my principles. But when the hon. member was elaborating this point that although we might be economically sound and we had a hard argument to answer we represented only 22 per cent of the people so why should we influence the government-I looked on the mace-the glittering mace we have on the table-and I thought the hon. member was simply advocating the policy that had been in force in this country for many years; the policy of using the big stick on the minority although they might be economically sound in the views which they were advocating. What I would advocate, Mr. Speaker, is that this mace should be removed from the table; we should not have big stick government in this country. In place of the mace I would place on the table the figure that I think all members have seen where the goddess stands with the scales weighing out justice to all. That is what we must have in this country instead of having a big stick waved at the minority. "You may be economically sound," we are told, "but then you are advocating something that the majority do not want, so we will just take the big stick to you and you can climb down."
We hear a great deal about national unity; we have heard more from this government than we ever heard on the subject before. Why have we heard it? We would hear very little about national unity if all sections of Canada were getting justice. You are not going to get national unity until something more nearly approximating justice is granted than is the case to-day. There are two schools of thought in this country, Mr. Speaker, at least on this particular subject. One is that the west-I should not say the west-but those who are advocating lower tariffs cannot get their wishes carried out; that we are going to have protection, and that if we put the Conservatives into power we will get higher protection than we have now. Therefore we must continue the present government in office at all costs because they will not raise the tariff. Well, I cannot subscribe to that doctrine; I believe in justice to all. If our views are economically sound and our argument hard to answer but nevertheless we are denied what we are asking for, then it is up to those who are opposing us to show in

what way our demands may be fairly met. Are the people of the west to remain in this position forever, advocating something that is economically sound but being denied it because they are in the minority? Surely confederation cannot be held together on such a policy as that. I have listened in this House to a great many speakers on the budget, and on other subjects, and I have yet to hear a suggestion from any hon. member as to what way or in what manner any quid pro quo for this protective tariff is to be given to us. On the other hand I have heard admissions from many members that the protective tariff is of no benefit to us, that in fact it is a hinder-ance. The hon. member for North Waterloo (Mr. Euler) this afternoon in a very well reasoned speech advocated the wiping out of the British preference on the ground, as nearly as I can recollect it, that he did not believe in sentiment influencing our economic policies in this country. Well, is it taken for granted that sentiment will persuade the west indefinitely to continue under a policy which is economically unsound for it?
That is the point I want to impress upon this House; there is no use our trying to gloss it over. This feeling of injustice has been bearing particularly hard upon the west while we have had adverse conditions and poor prices to contend with. So long as the people are prosperous they will put up with a wrong economic policy, but when it begins to bear hardly upon them they must seek a remedy. There is no use disguising the fact that there is an agitation in certain parts of western Canada to get rid of this domination of the east in some manner, and I think it is the duty of this House-I do not think it is too strong a term to use-it is the plain and bounden duty of this House, to see to it that that feeling of injustice is no longer * allowed to grow. There is a demand, as I say, for some action which will relieve us from this position. If some action is not taken, if we are allowed to go on as we are going to-day, I believe that feeling will grow in spite of all the talk upon national unity that can be handed out to those people.
Before I sit down, I should like to say in regard to this point which I have been bringing to the attention of the House, that as long ago as 1910 this feeling was very strong in certain parts of western Canada, and the late Mr. Bramley-Moore issued a little book entitled "Canada and her Colonies or Home Rule for Alberta". I do not think the late Mr. Bram-ley-Moore's loyialty could be questioned at all, as he was an Englishman who, when war broke out, although he was a member of the

The Budget-Mr. Beaubien
Alberta legislature, enlisted, I think, as a private, went overseas and was killed in the Great war. But Mr. Bramley-Moore, in his book, endeavours to point out-and I think he makes a very good case-that as regards the western provinces, they were being treated by, I would say, older Canada in regard to this tariff in the same manner as Britain, Spain and Portugual treated their colonies years ago. He makes this statement:
Hitherto no colony of the Anglo-Saxon race has rested content in being made subordinate and subservient to the interests of the Mother Country. It remains to be seen whether western Canadians have lost the s>pirit of their fathers. In these days when state interference with individual liberty of action is becoming more and more pronounced, we may be tending to acquire the mental characteristics of the orientals who bend their patient backs beneath a government's tyranny with a proper self-effacement and equanimity.
I do not want to keep the House any longer; but surely the time has came when the people of western Canada particularly should be told whether this is the tariff that they have to put up with or not. If this is the minimum tariff that the Liberal party, who are the traditional low 'tariff party in this country, are prepared to endeavour to put into force, that should be made dear to the west. As I have said already, if there is any quid pro quo to be offered to western Canada, I think that should be done at this session of parliament.


Arthur-Lucien Beaubien: Mr. Speaker, in rising to make a few observations on the present budget, it is my intention to follow the example set iby members in this part of the House and to be very brief. I said some two years ago that any remarks that I would make in this House would not be much longer than twenty minutes and I intend to close within that time to-night.
First, I desire to express my regret at the absence of the Minister of Finance (Mr. Fielding) through illness. I am sure we all miss his presence in the House and we all hope for his speedy recovery. I also wish to thank the Minister of Marine and Fisheries (Mr. Cardin) and the Minister without Portfolio, the senior member for Ottawa (Mr. McGiverin) for the visit they paid to the constituency which I have the honour to represent in this House. I am sure the electors of Provencher appreciated their visit. I think members of the government and every member of parliament should acquaint themselves with the different problems throughout the various parts of this country. There is only one way in which they can do so and it is by paying visits to the different parts of Canada. One of our chief difficulties in solving our national problems is that the knowledge of a great percentage of the members centres around their particular constituency and province, and until the members know the whole country, it is impossible for them to give justice to the various national problems that we have to solve.
On September 1, 1921, the present leader of the opposition (Mr. Meighen) made a speech in London, Ontario, before 3,000 electors, announcing a general election. He stated the main issues, and I would like to read a few extracts from his speech as published in the Montreal Gazette of September 2, 1921. Tihe right hon. gentleman said:
But there is an issue. Here are 3,000 people! You have watched the shaping of events and the movements of political forces for the past few years. Is there one of this whole 3,000 who does not know as he sits in his seat to-night that there is something that Canada must decide and decisively decide before we square away for the journey ahead? I do not think there are two opinions in this hall as to what we have to decide. It is the tariff of Canada.
Then he goes on:
But there is a challenge from the official opposition under Mr. Mackenzie King. They adopted two years ago in solemn convention a resolution that bound them to place on the free 'list nineteen classes of articles including foodstuffs, farm implements and machinery and lumber of every kind, and to increase the British preference 50 per cent and to substantially reduce the tariff on boots and shoes and articles of consumption.
The point I want to make in reading the remarks of the then Prime Minister is that the tariff was a well-defined issue at the last general election. The Liberal party covered this whole country, going from coast to coast, preaching low tariff. The Progressives did the same. They all preached low tariff, and the Conservatives went from ocean to ocean and preached protection. On the 6th day of December, 1921, the electors gave their verdict, and the verdict given by the electors should be taken notice of and respected. The electors on the 6th December, 1921, elected with large majorities 186 members who preached low tariff throughout this whole country, and they returned only 49 protectionist Conservatives. What was the meaning of that verdict given by the electors? There is no denying that it was a mandate to the government who took office substantially to reduce tariffs on the implements of production and the necessaries of life. This government has been in power now for four years and this is its fourth budget. I do not want to be too. critical, but in my opinion we have had three stand-pat budgets and one with slight reductions on the implements of production. Is the government prepared to

The Budget-Mr. Beaubien
go back to the electors and say to them: We have taken no notice of the mandate that you gave us in 1921, but return us to power and we shall see what we can do? I say you cannot fool the electorate all the time.
What has been the result of the government's failure to keep its promises? It has been to produce the present conditions of business depression and industrial stagnation. The government cannot take any credit for the improvement in agricultural prices. They have no control, for example, over the price of wheat. Nothing they can do would cause it to rise or fall. The farmers' returns are determined, broadly speaking, by world conditions which no government can affect; but with general business and industrial activities the condition is different. The government may help or hinder these interests. If the government had last year devoted its surplus revenues of some $24,000,000 to reducing the general tariff, business and industry would be to-day in a more flourishing state. The taxes remitted would have added to the purchasing power of the people, and in addition to the gain to the consumers of the country by the reduction of the tariff taxes paid to the exchequer, something like $3 for every $1 of revenue collected would also have been saved to the farmers and the consumers generally, by the reduction of the concealed bonuses paid to the manufacturing industries of the country under the protective system. Thus, instead of $24,000,000 of additional purchasing power something approaching $80,000,000 or $100,000,000 would have been available.


Mr. BOUCHARD (Translation):: Will the hon. member allow me a question? I wish to ask him how he can explain that, on the one hand, the Conservatives tell us that the stagnation in business is due to the lowering of the tariff, and that, on the other hand, a good Progressive like my hon. friend, asserts that the depression is due to the high tariff maintained by us?


Mr. BEAUBIEN (Translation):: My hon. friend is, himself, well aware that the reason *why business is at a standstill, and factories Slot producing as much as they should, is that she people have not the necessary purchasing power, and as I have just stated, for each dollar of revenue turned over to the Treasury, the people have to put up three dollars.
This huge sum spent by the people at large upon the implements of production and the necessaries and comforts of life would have brought about a stimulation of industrial and business conditions. We should to-day see far

less unemployment and far greater prosperity if the government had the foresight and the courage to live up to its promises to the electors to reduce the tariff.
This year no reduction of taxation is proposed. Thanks to trade depression the revenues have fallen off. The Acting Minister of Finance (Mr. Robb) has, it is true, a surplus on paper of $1,820,000, but the figures on which this surplus is based are, after all, only estimates.	'Comparison of the minister's
estimates of expenditures at the beginning of the fiscal year and his estimate made a month before	the end of the year
show a difference of $9,386,300.07. It i3 somewhat remarkable that the minister who would be entitled to Plaim credit for so considerable a saving on the year's administration did not do so. It would be interesting to know just how and where these apparent savings accrued, but we are not afforded the information.
Everybody admits the need for economy. The need is the greater since revenues have fallen so alarmingly, and there is yet no evidence of their recovery. Reduction of taxation is a prime necessity and it is evident that it can result only from savings in public expenditures. The ministers cannot reasonably contend that reductions cannot foe made in the expenditures for which they are responsible. The record of the United States in this respect is one that they might profitably emulate. Writing in MacUean's Magazine of April 1, 1925, Mr. J. Herbert Hodgins makes the following comment:
Federal estimates in the United States provide for the spending of $3,062,277,407 for 1925. President Coolidge wants the amount to an even $3,000,000,000.
Then a statement by General Lord, who is the director of the Bureau of the Budget, as follows:
General Lord has counselled all federal spenders: " Go over your estimates with a microscope in one hand and a 'pruning knife in the other. If there is doubt whether a cut should be made-cut, resolve every doubt in favour of the taxpayers."
Further on in this article Mr. Hodgins says:
President Coolidge, with the active help of the director of the Bureau of the Budget, has given the United States lower taxes, "a material reduction of about $2,000,000,000 yearly" as he, himself, stated in Washington on January 26, 1925. Which, after all, touches the average citizen in his most sensitive spot, his purse, and convinces him of the worth-whileness of the national effort.
In a previous article I quoted figures that were presented by President Coolidge to show, how in four years, 1921-1924, there was the remarkable cut in the United States public debt of $3,198,000,000. This reduces the annual interest from $999,000,000 to $865.000,000-

The Budget-Mr. Beaubien
a saving of $134,000,000, or a sum within one million dollars of Canada's annual interest bill.
President Coolidge has saved the United States more than $5,343,000,000.
Now, Mr. Speaker, if they can do that in the United States, if they can reduce the expenditures of Great Britain, there is not the slightest reason why we cannot reduce our expenditures in Canada. I might oiler a few suggestions as to how we could reduce our expenditures. I do not think the Minister of Agriculture (Mr. Motherwell) would agree with me in this respect, but I think we could make a reduction in the expenditures for experimental farms. We have too many experimental farms in this country. I know that these farms have been a benefit to Canada; I am not denying that, but they do not reach the farmer to-day, or else the farmer does not reach them. I think the government could reduce the expenditure on experimental farms by a large amount, and devote a certain percentage of that saving to research work.


George Perry Graham: That would not reduce the expenditure.


Arthur-Lucien Beaubien: No. I said that we
could spend a certain percentage of that reduction in research work, which would be of greater advantage to the Canadian people a3 a whole. We might reduce our public printing. I go down to the post office in the morning, in the afternoon, and in the evening and it is always full. It contains many government publications some of which are beneficial. With reference to the others, most of the members throw them in the wastepaper basket. We might reduce our expenditures on national defence. I see the minister is in his seat just now.


Mr. MACDONALD (Pictou):: Would the
hon. gentleman favour spending money on the Hudson Bay railway?


Arthur-Lucien Beaubien: If it is of public
importance I would.


Edward Mortimer Macdonald: It is not a
question of "if"; is the hon. member in favour of it?


Arthur-Lucien Beaubien: I am in favour of spending the money where the taxpayer and the country as a whole are going to get the benefit from it.


Edward Mortimer Macdonald: That is very general.


Arthur-Lucien Beaubien: If the Canadian .people are ever to reduce their national indebtedness, with its accompanying annual payments of interest, some thrift must be exercised and the old-fashioned policy of cutting our coat according
to our cloth must be made effective. To the people of western Canada, Mr. Speaker, this budget is disappointing. Not only because it does not reduce taxation, but because it does nothing to fulfil the promise held out to them of relief from the unduly high cost of the instruments of production and of the necessaries of life. Agriculture must be made a profitable industry if this country is to be fully and properly developed. It can be made so only by the removal of the handicaps it suffers from excessive taxation and from the protective policy.
This, Mr. Speaker, brings me to another point,-the lack of facilities for obtaining adequate loans on favourable terms, which is a serious disadvantage to our agriculturists. In his latest report, Dr. H. M. Tory says:	.
The question of agricultural credit is not one coming by accident out of the peculiar conditions of to-day, and therefore requiring only a temporary solution, but it arises out of conditions that are permanent and require to be dealt with on a permanent basis.
This statement, I am sure, will be endorsed by everyone who has given any attention at all to western conditions. The financial difficulties of the western farmers fall into two classes-those which are of a very pressing but quite temporary character, and those which will remain after all the immediate difficulties have been overcome, and which require the permanent remedy indicated in Dr. Tory's statement. Many of our western people could derive no benefit at the present time from a permanent scheme of rural credits because they are too heavily in debt; they have no credit left. Under the influence of circumstances, largely outside their own control, they have become deeply involved financially, and some way must be found to relieve their immediate financial necessities and to put them in a fair way to prosperity as well as to make their industry profitable. Then, and then only, will they be in a position to make proper use of rural credit facilities.
One of the chief instruments in assisting the heavily indebted farmers to place themselves in a more advantageous position for the pursuit of their industry is to be found in the Bankruptcy Act. At the close of last session certain amendments to that act were recommended to this House by the standing committee on Banking and Commerce. These amendments were drafted with the object of making the administration of the act more equitable and more effective so far as farmers are concerned. The government was pressed at that time to pass legislation along the lines recommended, but was unable to do so owing

The Budget-Mr. Beaubien
to the advanced stage of the session. But no effort seems to have been made in the present session to give effect to the committee's recommendations. We on this side of the House would urge upon the government the necessity for immediate action in this matter. If the process of debt adjustment and of relieving bankrupts from their impossible situation could go ahead with greater freedom, there would be some prospects that hundreds of farmers would be retained upon their farms who otherwise will be driven off their land and probably out of the country, while thousands of others will be enabled to adjust themselves to existing conditions and to take advantage of any permanent facilities for rural credits which it may be found possible to establish. To this end the passage of the proposed amendments to the Bankruptcy Act are indispensable. Some such legislation must precede the application of any permanent plan for providing farm loans, and I would again urge upon the government the need for action at this session of parliament.
There is another point, Mr. Speaker, on which I feel it is my duty to say a few words. I refer to the proposed embargo on pulpwood. I will not go into the details of that question, as many hon. members know more about it than I do and they can treat the subject more adequately. It has been shown, and conclusively shown, I believe, to every member of this House who has given the matter a careful and unbiased study, that only the very small group of manufacturers who are urging an embargo on pulpwood would benefit by it. Its enforcement would spell injustice and hardships to hundreds who would be deprived of a good, and perhaps a near market for their products. In my own constituency of Provencher many settlers depend entirely upon the sale of pulpwood for their living until their farm products give them a sufficient revenue to live on. As they are located near the main Canadian National railway line, or one of its branches, the nearest point where they can sell their pulpwood to good advantage is International Falls, and the proposed embargo would close down the market to them What would happen then? There is no doubt most of them would have to leave the land to go either to the United States or to increase the number of unemployed in our cities. On behailf of those bona fide settlers I appeal to the government not to chase out of their farms those hard workers who constitute one of the best assets of our country, and who should not be made innocent victims of a few selfish and voracious manufacturers. It has been proven that of the yearly destruction of 
our forests 90 per cent is due to fire, winds and inseicts. Of the remaining 10 per cent statistics show that the proportion used in various industries is as follows:	In Canada,
84 per cent; outside of Canada, 16 per cent. Then. 16 per cent of 10 per cent of all the timber cut or destroyed each year in Canada, or in other words, one-half of one per cent only of such timber is exported. Why is it that to 'save such a smali proportion of our timber the proponents of the embargo wiould not hesitate to injure the settlers, the farmers and the woodland owners? It is that they would reap big profits in forcing the sale of that percentage of timber to their own mills at their own prices. Will the government listen to them, or will they listen to the farmers who claim that our first duty is to protect our forests against fire, insects and other controllable causes of destruction? I hope, Mr. Speaker, the government will not hesitate to give fair treatment to our settlers.
I repeat, M,r. Speaker, -the budget is disappointing to the western people, who look upon it as an anti-national and unfairly balanced policy. If there be an election this year, as has been foreshadowed by some newspapers whidh claim to be well informed, I consider it will be my duty t.o tell the electors of my constituency that the present government has utterly failed to keep the pledges of the Liberal platform of 1919 which seems to have been drafted not in a spirit of sincerity, but as a vote-oatcher.
Before taking my seat, Mr. Speaker, I wish to emphasize the fact that notwithstanding the villainous attacks of petty politicians whose aims seem only to be to find fault with others and to sow discord and strife between the different classes of Canada, the Progressive group has constantly worked for the welfare of the whole country and of every individual of all classes. Our main object has been to try to .place all Canadian citizens as nearly as possible on the same level, not by reducing the higher classes but by improving the lot of those who heretofore had to bear the heaviest burdens and by trying to secure for them a fair share of the prosperity and of the happiness which our country 'has in store for its inhabitants. In trying to reach our aim, we raised ourselves above all questions of race and creed, and we worked to promote harmony and unity in basing our actions on the principle of equal rights to all. In the course of his remarks the other day, the hon. member for Chambly and Vercheres (Mr. Archam-bault) recognized the fact and speaking of the "restoration of harmony and unity between the different races, religions and sections of

The Budget-Mr. Evans
this country" he said that "the great task was accomplished with the co-operation of the Progressive party." I would be glad, Mr. Speaker, were I able to return the compliment to the hon. member for Chamlbly and Vercheres, and to declare that his party has stood by the principles embodied in their platform. On May 15, 1923, in a very eloquent speech delivered on behalf of this group, the hon. member for Nelson (Mr. Bird) laid down our policy. He said:
I want to say, moreover, that the Progressives are out for the unity of Canada, and I make bold to say that we have the only basis upon which there can be such unity, that is, the basis of justice as between classes in Canada and as between sections in the community. That is the only real basis upon which there can be any unity. We have no traditional spites and no petty feelings of strife behind us. Our sole stock in trade is what we carry with us, just a straightforward economic policy, that is all. It does not matter what you are religiously, socially or provincially, you are equally welcome into this fellowship, because we do not specialize in any of those things that divide one Canadian from another. The basis on which we work is the basis on which all the people can co-operate.
In concluding, Mr. Speaker, I will say without fear of being contradicted that we have always lived up to those principles, and I feel sure that for the good of Canada the Progressive group will always stand by them.


Mr. JOHN EVANS (Saskatoon):: debarred from exporting except as they can charge their loss to the home consumer. I think it might be logical to assume that this is what Canadian industrials have done for many years, past. They have reaped an undue profit on what they have sold or they charged their losses to the home consumer; that is on their export trade.
Despite all that the Minister of the Interior (Mr. Stewart, Argenteuil) said in his speech this year-and he did last year give this House and the country the impression that the government had made it their policy to do away with the tariff as far as protection was concerned-they now seek to tighten up on us by increasing protection, and announced boldly in the budget that goods imported are not to be valued for customs purposes at the price at which they are sold to the trade in the country of origin, but instead they are to be valued according to the discretion of the minister, and at the instigation of the manufacturing or distributing concerns affected. However, since then the government has announced that this change has been withdrawn. As far as we are concerned or as far as the country is concerned, the Acting Minister of Finance, need not have withdrawn the alteration as announced in the budget. The budget statement only crystallized what ha3 been the practice of the Department of Customs for a long time past. It all goes to show that the government have no intention of lowering this wall of protection or of decreasing the cost of living; in fact it seems that they seek by every means possible to increase the price by the dark and devious ways of withdrawing the administration of the tariff act from under statutory regulations, and putting the whole thing at the discretion of the minister. I cannot help viewing this as being all designed to better hide from the public the reason that the cost of living is kept up to its present height.
A tariff board is to be appointed and the government is now seeking to place the responsibility for class privilege on a board to be appointed and composed partly of officers of the Customs and Excise service. I look on this, Sir, as an abandonment of Liberalism and the government's own platform. It is a capitulation as complete as the betrayal of 1897 to the demands of the class that has sought and obtained vast privileges for the last forty years. It is an acknowledgment that the trade prevention tax, or tariff imposition, is the natural right of the urban industrialists of this Dominion. The government is abandoning its own principles, it is putting the responsibility for unjust taxation on a body to be further

removed from the people. Some may say that it will depend very largely upon the personnel of this board as to what the results will be-I deny, Sir, the right of any government to appoint a body of men, however learned or expert in taxation matters, to determine the extent to which one class of the people shall be placed in bondage to another.
This is all to be done for the sake of the industrial area situated between Montreal and Windsor. The appointment of a tariff board is an attempt to permanently establish the tariff imposition on the agriculturists of this Dominion, and to further concentrate the wealth of the country in this industrial area. In view of all this, I ask what prospect is there for western provinces, what prospect is there for the Maritime provinces, when by the force of numbers Quebec and Ontario intend to dominate this Dominion? What else is to be expected but a dissolution of confederation if things go on tins way? By the appointment of a tariff board the government may hope to shirk responsibility in this matter-I say, Sir, that parliament is the only body to deal with this question. To appoint a board is a foregone conclusion that there is a class in this country which has a right to lay under tribute the agriculturist and the worker, and that these have no partnership in this commonwealth. The appointment of a tariff board is a natural step to take by a government which believes in special or class privilege. The Liberal party, I believe, when in power has led in ' this feature since the 1897 revision of the tariff. If the government by its action during the last four years had given the country some assurance that it meant to carry out its own principles as laid down in its platform, a tariff board might have been appointed to best carry out that policy, and the country would have accepted it; but under present conditions this is not possible. The dominant idea seems to be to separate as widely as possible the government and the people. By a tariff board it may be hoped to still widen the gulf, but unless the political perceptions of the people can be lulled into a comatose state of stupidity, the government cannot hope to escape the responsibility. This, along with the immigration scheme to replace the intelligent farmer and worker by an ignorant drudge, seems to be the present policy of the government. Our government has again confirmed itself as the head of the great communism of pelf.

The Budget-Mr. Evans
To show some of the methods, Sir, used by the tariff authorities for greater protection than it would seem the law calls for, I would detain the House just a little longer. I wish to show how completely the Customs Tariff is set aside. The public has believed all along that they knew what duty they had to pay by the classifying of merchandise and the rate imposed, as laid down by the Customs Tariff of 1907, brought up to date by various orders in council. But the fact is they do not know. The Customs Act here comes in, which lays down the method of arriving at the value for duty, and also the method to be used by customs appraisers in arriving at the status of the importer, something which no government has a right to take into account. It would be safe to say that for every dollar collected from large importers, two dollars or more are . collected from the consumer on the very same articles imported in the same quantities. To illustrate this point, I will take as an example any common household utensil, particularly kitchen hardware, which seems to lend itself best to this sort of manipulation. I will set out the status, the discount allowed, the rate of duty, the value for duty, the amount of duty, and the sales tax on these articles as paid by the varying classes of importers. The list price to all is $100. To the small dealer there is a 50 per cent discount plus 15 and 5 per cent; the rate of duty 30 per cent; the value for duty then becomes $40.38, the duty $12.11, the sales tax $3.14: the total cost to this importer would be $55.63. To the large dealer there is a discount of 50 per cent plus 15 and 10; the value for duty would be $38.25; the duty itself $11.47; the sales tax $2.98, or a total cost of $52.70. To the departmental store the total price would be, $49.71. To the jobber there is a 50 per cent discount, plus 15 and 20; the value for duty in that case would be $34.01; the duty $10.20; sales tax, $2.65, or a total of $46.86. Now, to the consumer, for customs purposes no trade discount is allowed; it does not matter What quantity or what the class of goods may be; so the value for duty is $100; the duty itself is $30; the sales tax $7.80, or a total of $137.80. You see, the consumer has to pay $137.80 for what the others get at from $46 to $55. These widely divergent values for duty of the same article purchased in varying quantities by dealers and consumers are governed by sections 40 and 41 of the Customs Act, which read as follows:
Section 40. Whenever any duty ad valorem is imposed on any goods imported into Canada, the value for duty shall be the fair market value thereof when sold for home consumption in the principal markets of the country whence and at the time the same were exported directly to Canada.
Section 41 reads:
Such market value shall be the fair market value of such goods in the usual and ordinary commercial acceptation of the term and as sold in the ordinary course of trade.
I think this last sentence gives the authority to classify the different citizens. In the first instance the manufacturer is protected all that he asks, namely, 30 per cent as against the large importer, and as against the man who pays the impost, the consumer, about 90 per cent. In the second case the situation is more glaring, as the protection afforded the manufacturer is a shade over 150 per cent. I would alter sections 40 and 41 to read as follows:
Whenever any duty is imposed on any goods imported into Canada, the value for duty shall be the fair market value thereof, when sold for home consumption, by the manufacturer thereof in quantities taking the maximum discount allowed by the manufacturer, in the principal markets of the country whence and at the time when the same were exported directly to Canada.
The value for duty of goods, when subject to any ad valorem duty, imported under other conditions than set out in the foregoing section, shall be the fair value of such goods as sold at the first sale in the principal markets of the country exporting same directly to Canada.
Then section 41 would follow, further confining the transaction in terms of Hade. I believe in free trade, Sir, but if we are to have a tariff at all let us by all means get rid of these injustices, such as the classifying of citizens in the application of the law. It is not the right of any government to discriminate between one citizen and another. That is not government; I would call it brigandage. If every citizen-and here comes the chief objection-was on an equality as regards the law, the chain of privilege, of which the politician forms the chief part, would be badly shattered. I have reason to believe that even the members of the cabinet, or many of them, are unaware to-day of the methods used to fleece the workers of this Dominion. The hon. member for Nanaimo (Mr. Dickie), speaking the other day, almost pitied the misguided members of the Progressive party in their plea for freer trade, but I venture to say that he himself has no idea of the extent to which the privileged class of this Dominion enjoy protection. Many of them, in fact, are protected against importations by consumers to the extent of about 150 per cent. I ask, Sir, is it any wonder that under these conditions our young men and women are going to the United States, a country of protection, it is true, but where callousness is nc^ embodied in legislation as it is in Canada 1
The Budget-Mr. Evans

For the year 1924 the per capita rate of duty in Canada was S14.65; during the same year in the United States it was $4.86. These figures have been taken from the Canada Year Book and also from the report of the Secretary of the Treasury of the United States. The hon. member for Vancouver Centre (Mr. Stevens) said that the tariff of the United States was about three times as high as that of Canada, but it is quite the other way. In 1924, $135,122,345 was taken in through the customs tariff, but it cost the country two and a half or three times that amount to collect it. This amount was collected on imports valued at $640,000,000, but the consumption of home manufactured goods was over $1,608,000,000, or just about three times as much as was imported. That would mean that the tariff cost the people of Canada last year some $391,000,000, only $135,000,000 of which went into the Dominion treasury. Over $256,000,000 went into the pockets of the privileged class, for which the people got nothing in return.
Sir Richard Cartwright calculated that the first thirteen years of tariff protection after 1879 and up to 1893, when the great Liberal convention was held in this city, took a billion dollars out of the pockets of the people for which they got no return whatsoever. During some of that time Canada Pad less than four millions of people. Industry in Canada does not need to lean as it does on Agriculture; it is quite capable of bearing its own burdens. Yesterday I came across an advertisement of the Brantford Cordage Company which is very illuminating in view of the deathlike howls from the Conservative party in this House. The Brantford Cordage Company claims on its own admission to be the greatest concern of its kind in the British Empire. The advertisement says:
The Brantford Cordage Company is an old-established business which started operations in 1901. The company now owns three mills, occupying seven and one-half acres at Brantford. It put into operation, last January, the third new mill with most modem equipment, increasing its productive capacity fifty per cent. The business has steadily expanded until to-day it is the largest manufacturer of binder twine in the British Empire.
We all know that twine is on the free list; there is free trade in twine. This is an advertisement offering shares to the public at eight per cent. The advertisement is very interesting in view of the fact that most of our manufacturers say they cannot live without some help from other industries. This is an industry standing on its own feet and not only that, it is doing very well, despite the fact that it is burdened with the high cost
of production due to the high cost of living in a protected country.
In conclusion, I wish to say that there is one thing that must be done. When Right Hon. W. S. Fielding brought in the first budget of this parliament, he emphasized the fact that we would seek reciprocity with the United States. I wonder what the government has to say that it has done during this last three years to bring about that measure which would be so beneficial to the whole of this country. We would like to know. The natural market for the cattle of this country is in the United States. They have the means of finishing beeves there that cannot be attained with the same ease and profit in any part of Canada, owing to the climate and the irregular rainfall over much of the agricultural parts of the Dominion. In the middle states, where com is grown to such an extent, there is always a great supply of the feed necessary to the finishing of beeves. They want our store cattle, which can be raised with ease and profit in western Canada on the tremendous surplus of roughage consequent in any grain growing area. I think, Sir, that everything should be done to bring about the freest kind of trade that is possible with our neighbours to the south. It is no use talking the way our friends of the opposition do and place an embargo on the export of everything we have to sell. We have done plenty in years gone by of this nosecutting business. The prosperity of this country lies in the greatest freedom of exchange that is possible to arrange with all countries, and while we would like to have free trade within the empire, the destiny of this country lies very largely with our neighbours to the south.
I think, Sir, one of the means of attaining this end will be to appoint a representative of this government at Washington, and I would urge on the government the necessity of doing this, and that we should not do anything further to create enmity and ill feeling between ourselves and the people of the neighbouring country, which khould prove the best market for our agricultural products.
I would like to remind the government that their own political platform is a contract which they have violated so far. The budget is today a violation of their own principles. I can never understand the attitude of men who believe that any contract when openly and

The Budget-Mr. Milne
honestly entered into can be violated without any excuse or under any set of circumstances with advantage to those who offered it as their pledge.
On motion of Mr. Milne the debate was adjourned.
On motion of Mr. Graham the House adjourned at 1 a.m. Tuesday.
Tuesday, April 28, 1925