1925-04-30

PRIVATE BILLS


[Stage Direction]
Bill No. 48, from the Senate, for the relief of George Thomas Grigor.-Mr. Martell.

Bill No. 49, from the Senate, for the relief of Ethel May Sheriff.-Mr. Church.
Bill No. 50, from the Senate, for the relief of Max Arno Frind.-Mr. Hocken.
Bill No. 51, from the Senate, for the relief of Elizabeth Burns.-Mr. Garland (Carleton).
Bill No. 52, from the Senate, for the relief of Fred Herdman Ogden.-Mr. Church.
Bill No. 53, from the Senate, for the relief of Marion Gooderham Smith.-Mr. Hocken.
Bill No. 54, from the Senate, for the relief of Edith Mary Wiles.-Mr. Garland (Carleton) .
Bill No. 55, from the Senate, for the relief of Annie Kate Winch.-Mr. Hanson.
Bill No. 56, from the Senate, for the relief of Florence Kate Coutts.-Mr. Ryckman.
Bill No. 57, from the Senate, for the relief of George Kerr Jess.-Mr. Hanson.

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

Mr. ANDERSON:: 
Hon. Mr. LOW:: 1.	In 1923, there were 295 plants making aerated waters in Canada.
2.	and 5. No information is available, but the subject is under investigation.
3.	Separate statistics of imports of citrus fruit juices are not available, except in the case of crude lime juice. They are grouped in the tariff with other fruit juices. Imports of fruit juices from the United States during the calendar year 1924, with duty collected thereon were as follows:
Lime juice, crude only.. ..Gallons	
Value $	
Duty	
Lime juice and fruit juices,
fortified with or containing
not more than twenty-five
per cent of proof spirits. .Gallons 809 Value $7,039 Duty 2,022 50

Questions
Lime juice and fruit juice, fortified with or containing more than twenty-five per
cent of	proof spirits.. ..Gallons	207
	Value	$2,725
	Duty	2,887
Lime juice and other fruit		
syrups	and fruit juices,	
n.o.p...		10,629
	Value	$33,549
	Duty	7,548
4.	Information not available at present further than as indicated in the items quoted under answer No. 3.


HALIFAX TERMINALS
Mr. BLACK (Halifax):: 1.	What has been the total expenditure to date on the new Halifax ocean and rail terminala?
2.	What is the estimated cost of finishing them in accordance with the original plan?
3.	What a,e the intentions of the government in regard to the completion of this work?
lion. Mr. GRAHAM:
1.	S17.064.76S.68.
2.	$6,000,000.
3.	The teiminals are under the control of the Canadian National Railways. Any recommendation by the management will be carefully considered by the government.


WINNIPEG RESEARCH LABORATORY
Mr. WARD:: 1.	Is it a fact that the salary of the official in charge of the research laboratory of the Department of Trade and Commerce at Winnipeg has been reduced from $4,600 to $3,300?
2.	If so, is there a precedent for such a reduction?
3.	Has any order in council been passed making the said reduction ?
4.	If so, will the minister correct the estimate, or brmg in a supplementary estimate covering the matter?


Hon. Mr. LOW:: The main estimates show a reduction in the salary referred to, but the department is inserting a sufficient amount in the supplementary estimates to maintain the salary for the position referred to, at its previous level.
Mr. W. T. R. PRESTON


Sir HENRY DRAYTON:: 1.	In view of the following statements made by Mr. Symington, government counsel, appearing before the special committee on certain ocean rates:
"Whether Mr Preston has published a proper report, an exaggerated report, or a false report, under the reference to this committee, so far as I see makes no difference" and "I do not care about the Preston report which is largely a matter of opinion. I am not saying that it is right or that it is wrong. I do not see that li makes very much difference, whether 't is right or wrong, so far as the facts are concerned" is the government still retaining W. T. R. Preston on the pay roll?
2.	If so tor what purpose?


Hon. Mr. LOW:: 1.	Yes
2.	Mr. Pr-eston's services are being retained for such time as he may be actually engaged in the work of the ocean freight rate inquiry.


TRADE WITH GERMANY
Mr. CHURCH:: What were the imports from, and exports to Germany for each of the following years: (a) 1910 to 1914; (b) 1919 to 1924?


Thomas Andrew Low: 


TRADE OF CANADA WITH GERMANY
[Stage Direction]
Exports
Fiscal
years
(a)
1910..
1911..
1912..
1913..
1914..
(b)
1919..
1920..
1921..
1922..
1923..
1924..
Imports	Canadian produce
t	$
7,935,230	2,065,768
10,047,340	2,028,649
11,090,005	3,577,847
14,214,547	3.049,105
14,586,223	4,044,019
75	
44,255	610.528
1,547.685	8,215.337
2,041,016	4,509.547
2,568,409	9,950,877
5,382,508	16,153,650
Foreign	Total
produce	exports
$	$
435,423	2,501,191
634,368	2,663.017
237,067	3,814,914
353.289	3,402,394
389,717	4,433,736
45,298	655.826
1,699	8,217,038
82,534	4,592.081
112.002	10.062,879
141,188	16,294,838

Mr. SUTHERLAND:: 1.	What quantity of wool, also worsted tops, as defined under items 555 and 556 of the customs tariff, have been imported into Canada during the years 1922, 1923 and 1924?
2.	What is the rate of duty on said commodities?
3.	What quantity of each has duty been collected on during the years referred to?
4.	What amount of duty has been collected in th.i*' connection?

Questions


Thomas Andrew Low: U)	(2)	(3)	w
			Amount on which	Amount
Fiscal Quantities	Duty wras	of DutyItems	Years Imported	Rates of Duty	Collected	CollectedPoundj	Preferential-	Pounds	Wool under tariff item 555..	.. 1922 75,117	2 cents per pound	75.117	$2,253 511923 17,749	Intermediate-	1924 	17,749	532 17General-	
Preferential-	Ca)	
	(a)	10 per cent		$ 255	$25 50
Worsted tops under tariff item 556.. 1922 $ 255		Intermediate-		
	1923 1.151	12 J per cent		1,151	122 35
	1924 510	General-		
		15 per cent		510	76 50
(a) Quantities of imports	under this item are not recorded.			
LEATHER BELTING IMPORTS		4. What was the total amount of duty		collected on


Mr. TOBIN:: same? 5. What amount of leather belting was imported into		
1. What amount of leather belting has been imported		Canada from all other countries during the said fiscal		
into Canada from the United	States during the fiscal	years ?	years 1920, 1921, 1922, 1923, 1924 and 1925?	6. What was the total amount of duty	collected on2.	What was the amount of duty collected on same? 3.	What amount of leather belting has been imported	same ?	into Canada from Great Britain during the same years?	Hon. Mr. LOW:	Imports of Leather	Belting into Canada	Fiscal years ended March 31	Imports of leather belting	from	United States-	1620	1921 1922 1923	1924	19251. Amount of imports.. ..	
$139,965 00 $128,129 00 $88,203 00 $138,005 00	$117,344 00	$90,705 002. Duty collected	
31,492 59	28.829,66 19,846 16 31,254 22	26,403 07	20,409 34Imports of leather belting	from	United Kingdom-	3. Amount of imports.. ..	
21.902 00	38.280 00 10.158.00 17.904 00	26,217 00	11,485 004. Duty collected	
3.285 30	5,752 95 1,546 57 2.6S5 60	3.961 27	1,735 73
Imports of leather belting all other countries-
5.	Amount of imports..
6.	Duty collected	
from
48 00 10 80
68 00 15 30
114 00 22 80


CLOTHES-PIN IMPORTS
Mr. TOBIN:: 1.	What was the quality of spring clothes-pins imported into Canada from Sweden during the fiscal years 1920, 1921, 1922, 1923. 1924 and 1925?
2.	What wan the total amount of duty collected on same ?
3.	What quantity of spring clothes-pins was im-r orted into Canada from the United States during the fiscal years 1920, 1921, 1922, 1923, 1924 and 1925?
4.	What was the total amount of duty collected on same?


Thomas Andrew Low: Spring clothes-pins are not specified in the customs tariff nor in the statistical classification of imports. No information is available.


STEFANSSON EXPEDITION
[Stage Direction]
On the Orders of the Day:
Hon. R. J. MANION (Fort William and Rainy River):: Mr. Speaker, in view of the
contradictory statements which are being made

and which are the cause of some agitation in certain sections of Ontario in regard to the Stefansson expedition and the cause of the death of Allan Crawford, I would like to ask the Minister of the Interior (Mr. Stewart) if when his estimates come down, in order to clear the air and give the facts as the government know them-not for any purpose of takng part in the controversy- he would be prepared to give a statement dealing with the whole expedition.


THE BUDGET
[Stage Direction]
The House resumed from Wednesday, April 29, consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave.the chair for the House

The Budget-Mr. Brethen
to go into committee of Ways and Means,
and the proposed amendment thereto of Sir Henry Drayton.
Mr. G. A. BRETHEN (East Peterborough):: Mr. Speaker, yesterday I referred to' the lack of team work'and' the need of better understanding among the many elements in Canada. When the House rose I was dealing with the argument advanced by some hon. members thus: The United States has high protective duties, the United States is prosperous, therefore high protective duties bring prosperity. In this connection I referred to the situation during the past winter in the highly industrialized city of Detroit, where the Ford motor plant was running but three days a week, and thousands of unemployed were almost on the bread line.
Referring to conditions in the United States and Canada I drew the conclusion from personal interviews with residents of the United States that the happy conditions there that we so often hear about were due not so much to a highly protective tariff as to certain other factor's, namely:	the tremendous financial
advantage gained by the United States by her late entry into the World War; the commendable reduction of some five million dollars in taxation; the immense building boom suspended during the war period and running up to some five or six billions of dollars; also to their system of financing, the very reverse of that practised in Canada, whereby credit instead of cash sales is encouraged. Fully ninety per cent, I believe, of the sales in real estate as well as business contracts, indeed almost-every commercial transaction is performed on the basis of a small cash payment down- ten, fifteen or twenty per cent-and the balance on paper. Further, there is the fact that apparently everybody in the big cities, doctors, lawyers, workers in the factories, and even nurses in the hospitals, subscribed to this financial practice.
The nature of practically every commercial transaction in the big industrial cities in the United States is well illustrated by this familiar example. A purchaser in the city of Detroit can go into the shop of a Ford dealer, -pay $12.50 down and promise to pay $5 a week, and drive out a fully equipped Ford car. Such a system in the final analysis is costly, wasteful, and vicious to the country at large. As the inevitable result we find the big industrial cities of the United States in the very midst of an inflated condition, with the rural districts experiencing a corresponding depression, due to the inflated values of everything -the farmer has to buy and to world market prices for everything he has to sell. In other 167i
words, the big industrial districts of the United States, which have attracted so many of the best of our young manhood during the past few years, are experiencing a situation very similar to that experienced in western Canada some years ago-unbounded optimism, easy credit, inflated land values, immigration pouring into the coun.ry, and men and women in every walk of life leaving the beaten paths of stable industry in an effort to get rich quick and at any cost-all the earmarks of seeming prosperity.
I will not attempt to refresh the minds of hon. gentlemen of this House with what ultimately followed such a financial practice, the results are too vividly in the minds of our people to be easily forgotten. Is such a system of finance sound? Is this the system ihat we are asked to strive to emulate? Given the same or similar premises, similar results are certain to follow, and with mathematical precision. If the industrial centres of the United States do not soon take stock, cease their fictitious trading with one another, and build on the more permanent basis of the stable prosperity of the country as a whole, then should any serious deflation occur, and it has occurred in the United States, the same unfortunate results, as we experienced in western Canada some years ago will follow. A house divided against itself cannot stand. Great Britain, the United States of America, the Dominion of Canada, France or any other country cannot go forward to permanent prosperity unless as a united people-united we stand, divided we fall. Developing this thought further, the Farmer's Advocate editorially says:
A movement is on foot in the United States to oring about a better understanding between industry nnd agriculture and conferences with this end in view ore held from time to time. The organizers look at it in this light: "Better results mean better times for manufacturers; better markets for farmers, better times for farmers; better markets for manufactured goods, better employment for labour." It is realized on every hand that the first step in the right direction is a "better understanding."
And that applies as well to Canada as it does to the United States. It goes on:
There is too much meaningless criticism offered in place of constructive suggestion, while both industry and agriculture are often the victims of demagogic attacks that are sometimes not even correct in theory. Considering the lack of understanding between classes and industries, between rural and urban people, and between labour and employer, it is remarkable that so much progress has actually been made.
Is it not t;me that the various organizations representing agriculture, manufacturing, finance and labour held fewer meetings by themselves and took a little time off to get acquainted with the other fellow's viewpoint ar.d the other fellow's conditions?
The Budget-Mr. Brethcn

As showing the need of a better working understanding among this great family, the Canadian people, I am reminded of the story of a young man whose trousers were too long. He went to mother and requested her to shorten them, but mother was too busy. He went to sister. Sister was too busy. Thrown upon his own resources, he decided to do the job himself. He took a generous slice off each leg, and hung the pants away for Sunday. Later mother regretted that she had not acceded to his request, and she also took a slice off the already diminished trousers. Sister's conscience bothered her and she repeated the operation, and when the young man on Sunday glanced ruefully at the abbreviated pants he remarked, "What this family needs is less operation, and more cooperation."
The politicians of France and the United States are putting everything they have in the way of indications of prosperity in the front shop window. Great Britain is plugging away in the background, but still going down to the sea in ships. Canada is divided. Some of us are working earnestly to bring about permanent prosperity on the basis of "equal opportunities to all and special privileges to none," while others are just busying themselves flashing 4.4 beer in the window or sulking in the cellar of pessimism. Is it any wonder that our Canadian boys turn from this drab picture of steady Canadian progress to the flashy picture of American boom and bustle and seeming prosperity?
But why should we be downhearted? The pound sterling is crowding the top perch with the American eagle. The Canadian dollar is at par, and John Bull and Jack Canuck, with the earnest patriotic support of every Canadian citizen, will some how paddle through.
How can we help to bring about happier conditions in Canada? By taking a few leaves from the book of our friends to the south. Put some of Canada's real assets to the fore. In this connection I should like to pay a compliment to the hon. member for Muskoka (Mr. Hammell) who refusing the other night, to be led aside into mere partisan debate, proceeded to put before this House and the world the revenue producing possibilities of the tourist traffic of Canada. We are all acquainted with the importance of the Swiss watch industry-everybody has heard of the Swiss watch-a great industry. But when compared to the tourist traffic of Switzerland the relation is $15,000,000 for the watch industry to $300,000,000 for the tourist.

traffic. Of course the Swiss people are a sane, frugal, efficient people. A story is told by a traveller of Swiss efficiency. When up among the mountains in that country one day, he came to a herdsman's cottage. Through the open door be saw the mother in the home with a book from which she was singing, in one hand, the other hand working a chum, and her foot rocking the cradie; and as the traveller looked into that window he soliloquized "What an illustration of efficiency; mind, eye, voice, hands and feet all working." But to his amazement when the woman in reply to his summons left her chair he saw she also had been pressing a Swiss cheese. I repeat, let us put the assets, the real assets, of Canada to the fore; put them in the front shop window. Let us tell our wealthy American friends, who annually spend hundreds of millions of dollars in sightseeing the world about this wonderful country at their very doors; about our sparkling lakes and rivers filled with the gamest, sportiest fish in all the world; its ease of access by railroad, by motor, and launch through scenery unsurpassed; about her snow-capped mountains, crystal streams, and hidden lakes which I have heard world travelled Americans describe as unsurpassed even by the Alps themselves. Here is a source of revenue whose fringe has scarcely been touched. I will support a largely increased expenditure for development here. Let us tell the world about our fertile fields, an empire in extent; our No. 1 northern that commands a premium on any market; about the wealth of our forests, our fisheries and minerals. Let us tell them about our wonderful water powers developed and undeveloped, and how they operate the wheels of industry; about our sturdy, reliable Canadian workers; our stable system of financing and sound economic practices in commercial transactions. We have been knocking Canada before the world long enough: let us boost some.
Let us take another leaf from the book of our American neighbour: Reduction of federal taxation. By a system of economies in small things as well as by eliminating expensive duplications in the service the United States has been able to reduce her federal tax from $54 to $27 annually. Since the war the United States has reduced her debt by over five billions.
How has this been accomplished? By old fashioned thrift, actually saving the pennies rather than talking about saving the millions: by co-ordination in the public service. To illustrate what can be accomplished here I should like to refer to the situation when President Coolidge became governor of the

The Budget-Mr. Brethen
state of Massachusetts. When he entered that office he found departments which aggregated 118 in number. He was successful in getting a bill through the legislature which allowed a reduction to not more than 20, and was given three years to do it in. The number was reduced to 18, and the thing seemingly impossible was actually accomplished in less than one year. Friends and enemies alike, said, "This is the death knell of your political future. These disgruntled partisans that have been turned out of office will spell your defeat." He came into office as governor of Massachusetts with the majority of 17,000, and was returned with a majority of 125,000, proving that the great mass of the people will support any government that has the moral courage to attack and correct this duplication and wasteful expenditure in the public service. Reduction of taxation by avoiding every unnecessary expenditure. How this may be brought about is well illustrated by the inaugural ceremony that has recently taken place at Washington. Formerly the outlay upon such occasions amounted to about
8100,000.	This year it cost but 85,000. This saving may not have pleased the elite at Washington, but looked good to the people who pay the taxes. President Coolidge has this to say:
I am interested in this policy of economy not because I want to save money but because I want to save people.
Another saving was effected through the creation of the bureau of the budget, This was referred to yesterday by the hon. member for West Lambton (Mr. LeSueur) in detail, and I take this opportunity of again congratulating that hon. gentleman upon his contribution to the debate. General Lord, who succeeded General Dawes as the director of the budget at Washington, has this to say: "Little or no saving was achieved in the public service prior to the budget." Since its inception the government has been enabled to reduce taxation some two billion dollars annually according to President Coolidge's statement in Washington, on January 26.
Reduction in taxation, federal, provincial and municipal, can only be accomplished when the government receives the whole-hearted support of the individual elector. The people can no longer reasonably expect to continue to receive lavish expenditures for public services from the government, and at the same time enjoy any drastic reduction in taxation. It can't be done I I know of no surer way of bringing this home to the people than by the practice of refusing every request for the expenditure of public money that cannot be
ear-marked "solely in the public interest." "Resolve every dloubt in favor of the taxpayer." New post offices such as the one referred to by the hon. member for Yale (Mr. Stirling) at Penticton, or the building of a wharf similar to the one at Belle River, whose existence was dependent solely on the return of a government supporter, would not be considered legitimate under this policy.
I have no personal grievance with anyone in the civ-1 service, and any words I have to say concerning that service will be directed against the policy and not against the individuals. I would suggest, in order to reduce taxation, a vigorous cutting-down of the civil service. This would not be a popular movement right here in Ottawaj but the government that had the moral backbone to effect such an economy would have the lasting gratitude of the people of Canada. The most effective way to accomplish such a reduction would be to remove the " haven of rest " idea with which the service is enveloped and place the service on a business basis. Lengthen the hours in the inside service from an average of less than six hours a day to a commercial eight-hour day. I believe by this means a real saving of possibly 810,000,060 annually can be made. The departments would not suffer any in efficiency, and such economy in the public service would be appreciated by the over-burdened tax-payer who works eight, ten, twelve or fourteen hours a day. If such action interferes with any section ci the Civil Service Act I would scrap or amend that section. The Civil Service Act was made for man and not man for the act.
Another suggestion would be the co-ordination of the departments. Will any hon. member offer any serious objection to the uniting, say, of the office of Solicitor General with that of the Minister of Justice? In a little by-play ui the debate the other day we learned that one of the best arguments for retaining the office of Solicitor General was that the now right hon. leader of the opposition (Mr. Meighen) at one time filled the office very ably. After the practical demonstration given by the sixty-seven-year-young Minister of Railways (Mr. Graham) in administering three departments, and acting as prime minister simultaneously, why should we be nervous if a 814,000 per year minister were entrusted with the combined offices of say Secretary of State and National Defence or Trade and Commerce? Great savings were accomplished in the United States along these
The Budget-Mr. Bret hen

lines. The people of Canada will appreciate a saving here.
I have never been very critical of the Senate, believing that with some minor reforms the upper house could well serve a very useful purpose. After a larger acquaintance with the working of parliament, with all due respect to the hon. gentlemen of that august body I am frank to admit, however, I am a convert to the idea of abolition. At present the good services that might be performed by the Senate in initiating good legislation and checking ill-advised legislation are largely offset by the practice of the elected representatives of the people in the House of Commons using the upper house as a smoke screen behind which they may hide in dealing with questions that may be of peculiarly lively interest to certain sections of our people. I believe every hon. gentleman now adorning the Red Chamber whose ability and physical condition would permit could serve his country better as an elected representative of the people in the House of Commons, and I have no doubt he would be welcomed as such. The British North America Act is evidently not perfect and an amendment to permit of such action would I believe meet the hearty approval of the people of Canada.
I doubt if much saving can be accomplished under the present practice of administering the departments of the government. The system savours too much of the cost-plus species of remuneration, with the inevitable result, gradually growing departments with higher administration costs. To me the only feasible method of reducing the ever-growing cost of departmental government is by way of a reduced allotment for each department by a body independent of government heads of the departments. I have no doubt that under such a system the head of each department would accommodate his work to the reduced expenditure, without any serious loss in efficiency, the same as the farmer and others have had to do under falling revenue.
Now I come to the consideration of this House itselfeconomy like charity should begin at home. I am heartily in favour of -he suggestion of many hon. gentlemen that i;he membership in this House should be materially reduced. This would seem an opportune time to give this matter serious consideration, in view of the expressed intention of considering at a near conference amendments to the British North America Act that would enable such changes to be made. Another change that is quite within the powers of

parliament and which I seriously recommend to members of this House is a reasonable reduction of the indemnity. While many good arguments can be advanced against such action, the truth remains that no drastic economies can be effected without the members of this House demonstrating their willingness to give a lead. Some say that with any reduction there would be no inducement for good men to enter public life. Answering this I should like to say "the lure of .the dollar can never attract; (the best men in Canada like the call of service." and I am sure no hon. member would suffer any permanent inconvenience when the good effects of such action are measured. The indemnity is not a salary but is supposed to be given to secure hon. members against financial loss. I recognize that members coming from the extremes of Canada, on account of their inability to give personal supervision to their business, suffer a greater financial loss than the member within a stone's throw of Ottawa, and therefore I would favour as fair and reasonable the payment of indemnity under a graduated scale or a zone system. Coming from Ontario I can suggest such a change with more freedom than could an hon. member from those parts of Canada who would be favourably affected by such an arrangement.
I do not purpose referring to our uncontrollable expenditures such as interest on national debt, pensions, and so on, further than to say that while some hon. members of the late government might be seriously criticized for their lack of vision in failing to reduce the capital expenditure during the period of good times following the war, the fact remains that these debts are with us, we must bend every energy to prevent them expanding and devise some means for their substantial reduction.
I have suggested some practical economies in the public expenditure that can and will be appreciated by every taxpayer in Canada. I would now like to refer for a few minutes to methods that might be employed to raise the necessary revenue with the least hardship to the people at large. What then should be our sources of taxation?
First:	Death duties carefully and stiffly
graded. This is the fairest of all taxes. When a man has had a life use of the money which the country has helped him to make, the country has a right to a share of it at his death. Of course, the interests of the widows and orphans must be safeguarded to a reasonable extent.

The Budget-Mr. Meightn
Second:	A graded income tax, beginning
well down and after a certain sum-say $10,000 a year-is reached, rising very sharply on large incomes. This is getting the money from where it exists. But I would make a distinction favourable to incomes reinvested in industrial enterprises over the latent or dormant income. Such a tax on a man's income is easily collectible and it is preferable to the tariff which is a tax on the poor man's needs.
Third: A sales tax which might be largely excuse in its character, bearing most heavily on luxuries and on such Canadian manufactories as enjoy the highest protection. Automobiles, for instance, would be considered as in such class.
Fourth:	A tariff for revenue. This, of
necessity, must be flexible and levied as far as possible on the non-necessities of life and luxuries. Tariffs are usually costly taxes, troublesome to collect and, in my opinion, an implement of taxation warranted only by dire necessity. When levied as protective, tariffs are unjust and ruinous taxes; they are a privilege granted to the few to bleed the many; they drain the country without filling the exchequer; they are heaviest on the best citizens, the men who are rearing worthily families whose needs have to be supplied; they are harsh on the poor. These are taxed out of all proportions to their means with every purchase. It is the purchasing power of the mass of the people that makes trade prosperous. It is the worker's needs supplied that makes work for workers.
I have been rather surprised during this debate to hear our friends to the right advocating almost with one accord reciprocity with the United States-reciprocity of tariffs, not of freer trade. Our Liberal-Conservative friends are not always protectionists; sometimes they are more Liberal than Conservative, and a few nights ago they w'ere almost Progressive in their leanings. A certain private bill was proposed by the member for St. Lawrence-St. George (Mr. Marler) which was to extend for six years a certain patent enjoyed by a manufacturing concern in Montreal. When it was strenuously opposed by the hon. member for Norfolk (Mr. Wallace) and others in this part of the House, to our surprise the only apparent support that came from anywhere in this House for the company seeking this particular protection came from that doughty protectionist, the sponsor of the bill. He was like " a voice crying in the wilderness." I am opposed to protective tariffs. They have been given a fair, reasonable trial in Canada for well-nigh fifty years. Successive
governments, as was showm by the hon. member for South Winnipeg (Mr. Hudson) have made insignificant, downward changes; yet when we point to the impoverished farmers throughout the country, when we point to the strikes of labouring men for higher wages, to seasonable unemployment and to the suspension of protected industries, our protectionist friends in this House say this is all due to a reduction or threatened reduction of the tariff. Such a charge I defy my protectionist friends to sustain. On the contrary they but discredit themselves by advancing such a baseless argument and by seeking to avoid responsibility for conditions, for which they are clearly and undeniably responsible.
In conclusion, Mr. Speaker, I would say that if the>e is any man in Canada who really believes that, under a democratic form of government where the people rule, where laws should be made for the good of all, any party has the right to impose taxes or to put burdens on one class in order to benefit another class, then that man is unworthy of a place in the free country in which he lives.
I have tried honestly to answer the question: What is wrong with Canada? and to offer some humble suggestions by' way of remedy. In so doing, I have endeavoured to avoid unduly hard or destructive criticism, believing that Canada needs at this time, as in the war-lime crisis, the united, unbiased, whole-hearted, patriotic efforts of every member of this House to bring Canada through.


Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Mr. Speaker, the debate
has this year extended to an extraordinary length, and I know all hon. members are relieved to be certain that it will close tonight. I am not making any reflection on the length of the debate, although it is well known that, as regards this side of the House, we were prepared to close last week. The budget debate in Canada serves a purpose which is not there to be served in many other countries. We are a very widely scattered people. We have great diversity of interests, physical conditions and occupations. The budget debate is the medium oy which the opposing views of many sections are expressed and brought together. I do not believe severe strictures on the length of the debate, therefore, are warranted; but at the same time it is possible to overdo everything, and I would have preferred had this debate closed sooner.
My contribution, if it can be called such, will not be lengthy to-day. We on this side
The Budget-Mr. Meighen

have on the order paper a notice of motion in my name which we have endeavoured to move and have discussed, but so far without-success. This notice of motion has to do with what is the transcendent question in Canadian politics to-day, namely, that of the best fiscal policy under	the
conditions of the world at this time. The notice of motion covers this field and this only, and I thin'k it will save the time of the House and contribute to orderly debate if I leave its discussion to the time when I may be able to move the motion.
I am going to attempt to analyse our financial position and to do so with all the clearness I can. I do not feel that I can speak with any pontifical authority, but I will do this for hon. members who do me the favour of listening:	I will give my authority
for each statement which I make, and leave the House to judge whether it is dependable or not. The result will be nothing very cheering so far as Canada is concerned, especially for our taxpayers. And while I believe that it is due in considerable degree to inefficiency, lack of control and lack of definiteness of purpose on the part of the government, I want to make it clear at the beginning that in my judgment the consequences are traceable in far greater degree to unsoundness of fiscal policy, to unsoundness of fiscal practice on the part of the administration, and to still greater seriousness of their fiscal threats.
I had intended making some reference, as a member of the late government, to remarks which fell from the hon. member for Chambly and Vercheres (Mr. Archambault); but on looking back over past debates I find that everything which he so recklessly alleged was irrefutably answered in 1917 in his own hearing, and to the material of which answers he made no reference. It was there 4 p.m. shown that, so far from there being any waste in respect of the matters to which he referred, each and every article was supplanted by another without a dollar of cost:	the Ross rifle by the Lee-
Enfield, rifle for rifle; the Oliver equipment by the Webb equipment, each for each; that neither of these was used one single day, so soon as it was possible to get another to take its place; and that far from its having been possible to have the substitution made earlier, so great was the scarcity, especially in rifles, that the British government were compelled, though they did not favour the Ross, to place large orders in this country for that very rifle. It is very hard to understand how an hon. member could drag these musty subjects into the debates of to-day and do so

with a good conscience, having regard to present conditions in Canada.
I pass now to a review of the year's results, and from that I shall move to a review of the full results of the past three years and a quarter. There is in the minds of many hon. members confusion, at all events there is very little in the way of agreement, as to what is disclosed in the budget speech of thi3 year. I do not think I can recall two hon. members who have given to the House the same deductions from the budget presentation. If there have been any single group who have agreed it would be quite a number, by no means all, of hon. gentlemen opposite, who draw a deduction which is manifestly wrong and which not one of them in a real encounter would venture to sustain. The hon. member for St. Lawrence-St. George (Mr. Marler) argues that the budget presentation is clear. Strange indeed it is, if such is the case, that hon. members of this House cannot tell what the result of it is; and stranger still is it that no one erred more frequently than the hon. member for St. Lawrence-St. George himself.
The budget presentation is not either complete or clear; it fails in the -main purpose of a budget presentation, a purpose which the hon. memlber for St. Lawrence-St. George endeavoured, I think conscientiously, to supply, but which it should not have been necessary for anyone to attempt at all to supply, if the budget speech had contained the one great element which should be its first essential. Hon. members to my left have repeatedly urged that something be stated which is clear, which they will understand, which other than accountants can understand. It is suggested that this is not possible. Why is it not possible? When the Minister of Finance (Mr. Fielding) presented his budget two years ago I complained that it was not complete; but no one in this House found any difficulty in deciding upon its results. The same was true of the budget he presented the year before; I never heard any complaint as to its not being clear. Nor was there any complaint of that kind in respect of any previous budget presentation so far as I can recall, though, years having passed, one may possibly have overlooked an instance. The reason that it is possible for the present budget to be obscure- is the fact that the finances of Canada to-day appear under two phases instead of under one; and it is obscure not because the bookkeeping of the country differs in principle, or differs at all, from the bookkeeping of previous years: it is simply because the government in presenting the results of the book-

The Budget-Mr. Meigkeu
keeping have concealed the result and facta from the public.
I have said that our financial affairs now run in two channels; everyone knows what I mean. We make two fronts before the world, first as Canada in its own account and secondly Canada as the National Railways. Each is our possession, the finances of each are our concern, and the debts of each are our responsibility. I am not complaining that the accounts are kept separately; no one would so complain. They should be. But they should not be kept separately for the purpose of concealing the result of one or failing to disclose the joint result of both. What is this joint result so far as 1924-25, the last fiscal year, is concerned?
If we look to 1922-23, the last vear of the Hon. Mr. Fielding's regime, we shall find that the result was given as a deficit of $31,000,000. He arrived at that deficit. Mr. Fielding-I must mention his name, if I may be forgiven [DOT]-took into account the whole of *'he finances of both phases, both of account No. 1 and of account No. 2. On this we are all agreed. In 1923-24, the first year of the present Acting Minister of Finance, the whole was not collected and a total result of the whole given the public. It is not fair, though, to say that all of one was removed to one side and the result of the other alone given as the result of the year. Part of one was given, and all of the other. Part of the railway result was included, that is to say, the cash advances, but not the assistance, the commitments in other forms; cash advances amounting to some $23,000,000-these the present acting minister included in his annual outlay in arriving at the result which he presented to the country, namely, a surplus of $35,000,000. I hope that, so far, I am clear. To arrive at that claimed surplus the Acting Minister of Finance placed all his receipts on one side, which was right; all the disbursements, ordinary, capital and special, of account number one on the other, and as to account number two, the railways, he included all cash disbursements, but no more. He did include what he had loaned in cash. He did add not only what he had loaned the railway in cash to his ordinary expenditure of the country, but he added his capital as well, and his special expenditure too. In a word, he included everything except the guarantees he made for the National Railways. Now I hope so far there is no difference of view; if there is, I am trying to state it accurately and I would be only too glad to be corrected or placed on the right track if I am wrong. This resulted in a surplus of $35,000,000. It is true the guarantees, which were not included, were 72V millions. With those included there would have been a deficit of 364 millions. Or, to put it in a word, the result of putting the two accounts together meant a deficit of 364 millions.


Mr. MARLER:: May I interrupt for a
moment? My right hon. friend has not taken into consideration refunding operations 

not yet, at any rate.


Arthur Meighen: I will in a moment. I did not take it into consideration in the discussion last year, for this reason: the Acting Minister of B'inance stated that the guarantees were for the purposes of capital investments; he mentioned no refunding.
Now I come to this year. If I were to ask hon. members of the House what the result this year is, I fancy if there was any agreement between two it would bo on the part of hon. members opposite, most of those who have spoken; they would say we have a surplus this year of $1,823,000. Another would say: Well, if we take in the interest from Roumania and Greece that is not paid, we would have a surplus of $5,823,000. Now, let us pause to inquire: Is that $1,823,000 arrived at the way the $35,000,000 was arrived at the yt-ar before? Will any hon. member suggest it is? That is what hon. members are claiming as the surplus for this year.


Herbert Meredith Marler: No.


Arthur Meighen: I know the member for St. Lawrence-St. George (Mr. Marler) did not; but what a significant silence on the part of everyone else! Not at all, the Acting Minister of Finance last year knew that if he made up his accounts and presented the total of both the way his predecessor had done he would have been compelled to show' a deficit of 364 millions; if he had done that this year he would have had to show a bigger deficit still. But he said to himself: If I make up my accounts and join the two together the way I did last year I shall be in the hole far worse than the 364 millions of last year-and he was determined that no newspaper would get a headline announcing a deficit. So what did he do? He not only put to one side the guarantees as he had done the previous year, whether for refunding or anything else, but he took the cash loans that he had made and put them to one side too.


Herbert Meredith Marler: Not at all.


Arthur Meighen: Without a question.
The Budget-Mr. Meighcn


Herbert Meredith Marler: The Acting Minister of
Finance claimed a surplus of $1,823,000 on ordinary services, as was done in previous budgets under the administration of my right hon. friend. He can see it if he looks up the budget debates.


Arthur Meighen: If the hon. gentleman will wait a minute he will see that his interruption had not very much pertinency and less excuse. The point is this: the $1,823,000 does not take into account the $18,000,000 loaned to the National Railways.


Herbert Meredith Marler: No one claimed it did.


Arthur Meighen: I am not saying he
claimed it did. The point is this: The year before, the $35,000,000 did take account of the cash advances for the National Railways. Why the difference? The difference was just in order to get a headline surplus instead of a headline deficit. Not content with leaving out the guarantees, as was done last year; with leaving out the cash advances, as was not done last year, he thought that would not be quite enough, so he quietly took the Quebec Harbour Commission moneys and put them all aside, too, giving as his excuse that that commission -was not paying interest. Then he took the merchant marine advance, $900,000, and set that to one side, too; and by the time he got all these four things to one side he had $1,823,000 of a surplus. Now, that surplus took into account all ordinary expenditure. It took into account more: it took into account all capital expenditure and all special expenditure, but it left out these other things, every one of which but one was included last year.
Now, I endeavoured to set the hon. member for St. Lawrenee-St. George right when he was speaking. He claimed then-he will not now, for he has looked into it-that the $1,823,000 was merely the excess of revenue over ordinary expenditure. It was not; it was revenue over ordinary capital and special capital expenditure, but it leaves out cash advanced to the railway, cash advanced to the merchant marine, $600,000 of the Quebec Harbour Commission, and1 all the guarantees.


Mr. MACKENZIE KING:: I will admit
what my right hon. friend says, but I will add this: It is precisely what the Acting Minister of Finance said.


Herbert Meredith Marler: May I make another
interruption? That is precisely the way Sir Thomas White did it, and also the way the member for West York (Sir Henry Drayton)

did it in his budget. If my right hon. friend will permit me, the difference is this-


Mr. BOYS:: Why did you not answer questions when they were put to you?


Herbert Meredith Marler: I am quite prepared, if
my hon. friends opposite want to-


William Alves Boys: You left the chamber without doing it.


Herbert Meredith Marler: Not while I was speaking. Now, if my hon. friend objects to questions I will not ask another single question in the course of this debate. All he has to do is to request me not to ask any.


William Alves Boys: Practise what you preach.


Herbert Meredith Marler: Well, does my right hon.
friend desire that I should not ask a question?


Arthur Meighen: If it is a question. The
hon. member has not asked one this afternoon yet.


Herbert Meredith Marler: Well, if my right hon.
friend will allow me to make this assertion, I wall say this-


Some hon. MEMBERS:: A question.


Herbert Meredith Marler: Well, are we going to be
reasonable about this debate, or not?


Mr. SPEAKER:: Order.


William Alves Boys: Why didn't you?


Herbert Meredith Marler: I was.


William Alves Boys: My hon. friend knows I asked him a question that he did not answer.


Herbert Meredith Marler: The hon. member for
South Simcoe- -


Hewitt Bostock: I would ask hon. members on both sides to listen without interruption to the address of the hon. member who has the floor, unless interruptions are permitted by him. I suggest that it is far better that the hon. member who is addressing the House should be allowed to proceed with his speech.


Arthur Meighen: When the Prime Minister admits I am right, I should not have thought any of his followers would question the accuracy of my statement. The difference is this, that there was no summation this year at all; no summation of joint accounts, no adding up. The defect which the member for St. Lawrence tried to fill should never have had to be filled. In other words, the Acting Minister of Finance tried to show what the whole result of the year was, but he discreetly left these things out because he

The Budget-Mr. Meighen
wanted a headline in his newspapers showing a surplus of $1,823,000. That is why he left them out.
I am going to inquire as to what the real result was first, and then I am going to discuss whether the principle at which I arrive is sound or whether it is not. The Acting Minister of Finance, as I stated, includes all his revenue, and puts against it his ordinary capital and special expenditure. His revenue shows a diminution of about $53,000,000; I believe it is a little over that now. If I asked hon. members of this House how much the expenditure was more, or less, than it was last year, aside from the railways altogether, I wonder if there is one who could answer me. I am saying that, not by way of reflection upon hon. members; I am saying it by way of comment on this budget.


William Lyon Mackenzie King: I will give my hon. friend the answer when I come to
speak.


Arthur Meighen: Unfortunately, the right
hon. gentleman is not very dependable when he speaks last. I wonder if there is one hon. member who can tell me now? If there, is, he cannot get it out of the budget. He will find that in ordinary expenditure there is $5,100,000 less than last year, but the budget speech does not compare the capital expenditure with last year's capital expenditure at all. Are hon. members surprised to know-it is some six millions more? The budget speech does not compare even the special expenditure this year with the special expenditure last year. This year's special expenditure is about $4,000,000 less, because no doubt of recession from the war. So, summing the three together, the improvement in expenditure less than the year before is approximately $3,000,000, or a little over. So we have $53,000,000 less revenue, and about $3,000,000 less expenditure-some $49,000,000 worse off in the. total, and this irrespective of the railways, than we were a year ago. Taking all together, irrespective of what the minister leaves out, we accept $1,823,000 as right.
Now what other obligations have we entered into during the past year? And may I say, especially with reference to some comment that has been made by the hon. member for North Waterloo (Mr. Euler)?- in arriving at our position we cannot, on the system we have followed for years, claim to have a surplus unless we have a surplus over everything. We have not done it for years. We never claimed a surplus in our time. We said we had a surplus over certain things,
but we showed clearly we had a deficit altogether. Expenditure on capital account was always included, has been for many years in this country, and because capital account is included in our expenditure as a country, why in the world should we distinguish it in our expenditure ah a railway? -the more so because whatever capital expenditure we put in now or for years to come, we cannot, if we are honest, call the return for that expenditure an active asset, of this country. For this reason: If we want to know where we are at, we must absolutely include every commitment until the day comes, if it ever does, when we can honestly consider our investments in our railways as active assets.
I stated that we were accepting the figure as $1,823,000, understanding that to one side were placed all the items I have referred to. Now these items are, according to the minister's own figures: $18,027,000 cash advance; $46,000,000 guarantees-National Railway bonds-and $18,000,000 further guarantees, aside altogether from another $17,000,000, which is for refunding. May I state my own view on this point? In arriving at our position, and in this I entirely agree with the hon. member for St. Lawrence-St. George (Mr. Marler), our endeavour should be to ascertain how much the National Railways have gone further into debt. Of course, to get how much further they' have gone into debt, we have to take off what debt has been paid. Now $17,000,000 of last year's guarantee was for refunding; $18,000,000 was not. So the total assistance to the railways is made up of these three items: $18,000,000, $46,000,000, $18,027,000, or a total of $82,027,000. In addition, there was $900,000 for the merchant marine, and $600,000 for Quebec harbour, making a grand total of $83,527,000. From this must be deducted the surplus claimed on the balance of our accounts; that is to say, ordinary revenue over ordinary expenditure, capital and special-$1,823,000.	This deducted we
find that there has been a net recession for the year of SSI,704,000. I do not think those figures can be honestly controverted. They take into account all refunding. This is the amount we have gone back this year-$81,-
704,000.
Now, it is claimed that if the government admitted $81,000,000, they would be putting themselves in a position unfavourable as compared with presentations made in previous years by the late government; that is to say, they would be admitting liability for guarantees of loans when the previous government did not admit those as part of the debt of
The Budget-Mr. Meighen

Canada. I am going to inquire into that contention.
In the first place, let me say that if we assume it as absolutely true-and I think I will show to the satisfaction of anyone it is not, but assume that it is-what difference does it make? We still have gone back $81,000,000 this year. All it would mean would be this, that we claimed to have gone back in certain former years less than we really did go back; that is all it would mean. So whether I succeed or not in showing that the comparison cannot be made to our disadvantage, it is established that we did go back SSI,000.000 this year anyway; and if the Prime Minister in his contention a year ago is right-that we did not include our guarantees even when they were not for refunding-all he succeeds in showing is that in those years we went back further than we admitted.
Now let us see if that is true. I do not know just how my hon. friend for St. Lawrence-St. George got some of his figures. I am sure he did not intentionally present them wrongly, but I could not follow some of his figures.


Herbert Meredith Marler: I will show my figures to my hon. friend now if he cares to have them.


Arthur Meighen: I have here the figures
from the reports of the National Railway Company as well as the department. I am sure they will agree, but I could not make them agree. Perhaps the hon. member can. I have more guarantees than he has. The guarantees that we gave '/ere in the fiscal year 1920, $25,000,000 for the Canadian Northern, and $25,000,000 for the Grand Trunk; and in the fiscal year 1921, the very same- $25,000,000 Canadian Northern, $25,000,000 Grand Trunk. The hon. member refers, as well, to a guarantee of $11,000,000 in the fiscal year 1921-22, which is right. But this was after the end of 1921; it was therefore by the present government; and in any event it was all for refunding. Mr. Fielding did not include it, and he was perfectly right. Therefore, I must direct my inquiry into the $100,000,000 I have named-$50,000,000 in 1920, and $50,000,000 in 1921.


Herbert Meredith Marler: Does my hon. friend intend to take in the unguaranteed securities?


Arthur Meighen: No, I have not been able to trace any. I know the hon. member says there were some, but I have not been able to trace any unguaranteed securities, unless possibly some for equipment.


Herbert Meredith Marler: There were some for
equipment that were not guaranteed.


Arthur Meighen: Yes, there may have
been some used for equipment that were not guaranteed at all.


Herbert Meredith Marler: They were not guaranteed but nevertheless formed part of the railway debt.


Arthur Meighen: Yes they are to-day
part of the debt of the Canadian National Railways.


Herbert Meredith Marler: And should be included
in making a comparison.


Arthur Meighen: Well, I was referring,
for the present, to the guaranteed securities, all those that I referred to a year ago.


Herbert Meredith Marler: If I may interrupt my
right hon. friend: if he refers only to the guaranteed securities he cannot get exactly the same comparison. Because some of the securities for equipment issued by this government were guaranteed whereac they were not all guaranteed by the past government.


Arthur Meighen: In the comparison I am
making I am taking exactly the government guarantees in each case.


Herbert Meredith Marler: If my right hon. friend
does not include the non-guaranteed issues I have indicated his comparison is not a fair one.


Hewitt Bostock: Order. This debate cannot proceed in this way. The right hon. leader of the opposition'has the floor, and unless he gives permission he cannot be interrupted.


Arthur Meighen: What I am pointing out
is this: In referring to what we have gone back this year I have taken into account the guarantees alone. In taking our total debt into account we have got to take into consideration those securities that were unguaranteed I admit, so there is no actual difference between us at all. There were $100,000,000 guaranteed in those two years. Now it is true that the proceeds of those guarantees did not go altogether to reduction of debt. That is quite true. I never contended that it dad. What I contended was this: That while we had guaranteed $100,000,000 we also provided the money, either in casih or guarantee, and reduced the debt by more than $100,000,000.


Herbert Meredith Marler: That is precisely what
my right hon. friend did not do.

The Budget-Mr. Mevjhen


Arthur Meighen: 
Herbert Meredith Marler: May I ask the right hon.
gentleman a question. Has the Finance department checked over these rt fundings? My reason for asking the question 's that my statement of refunding was checked over carefully by the department.


Arthur Meighen: I did not take them to
the Finance department. It is the railway company's business. If I read in a report of the company that a certain loan was paid I do not need to go to the Department of Finance to see that it was paid. Now, thi3 is as far as I need go, I think, in relation to last year. Suffice it to conclude that we went back by $81,000,000; this country is that much further in debt than It. was a year ago.
Now, I want to inquire as to what has been the result of the three years and three months up to April 1, of this year of the present administration. It is important so to inquire and I proceed to do so including both accounts of course. I proceed to do so taking into account all refundings and the way to get it
The Budget-Mr. Meighen

is this: To take the debt on the fust account as at the end of 1921 and take the debt on that account on 31st March, 1925. The difference is the increase or decrease as the case may be. Then in relation to the other account , the National Railways, take the debt at the end of 1921 and the debt at the end of March, 1925. Now, if I leave my statement that way it is not altogether fair. In getting the total increased obligations of the country it will not do to include the whole increase of the National Railway debt. All that it is right to include is the increase of the debt due to the public-due to the third parties; you cannot include the increase of the debt due the government, because of course that is not any increase of the joint debt at ali.
Now. what is the increase in the debt on the first account?-that is, the old account of the government of Canada proper. The Canada Gazette shows the debt on the 31st December. 1921, to have been $2,366,861,252.29. This government took office on December 29, 1921. The Acting Minister of Finance (Mr. Robb) shows the debt at the end of April to have been $2,431,487,112.88. The difference is $64,625,860.59. There can be no dispute of these figures. All the comment I have ever heard is this:	That when you
take the debt at the end of 1921, and add the debt for the three months succeeding, you are adding debt which was incurred under estimates prepared by the previous government. That is true. But the expenditure from the end of 1921, from the accession of tins government, was wholly under the control of this government, because when moneys are voted in estimates it does not mean that those moneys have to be spent. It is only authority to spend those moneys. The payments by this government after they come into office are their responsibility, and the responsibility of no other. The actual increase in debt is the $64,625,000 which I have just given.
Now I proceed to inquire where we stand in. relation to the railways. Certain figures have been put on Hansard by the Minister of Railways in response to questions put by the hon. member for West York (Sir Henry Drasdon). These figures show an increase in the three years, not taking into account these latter three months, of $294,000,000. That is the increase of public debt and of government debt both. Those figures do not differ very much from those given in the reports of the company, but they do differ somewhat. They differ very considerably in the division of the increase between the public and the government. I hold in my hand the report of the National Railways for this last year.
cMr. Meighen.]
This report gives the debt due the public at the end of 1924 as $913,913,082.80. This is due the public alone. This will be found at page 29 of this report. In order to find out what was due the public at the end of
192,1	it is necessary to have recourse to two authorities. One is the annual report of the Grand Trunk, because the roads were not united then; and in the annual report of that company for the year 1921, at page 8, the following is given as the debt outstanding on the 31st December, 1921; $371,042,194.75. Now if hon. members will turn to the annual report of the Department of Railways and Canals for the year 1922-that is the report for the previous year-they will find that out of this amount there is due the government the sum of $76,965,322.10. Take this away from the $371,000,000, the total debt, and we have the amount due the public $294,064,872. This is the debt on the Grand Trunk at the end of 1921. Now we have to get the debt on the Canadian National Railways at the end of 1921. This appears in the report of the Railways and Canals department at pages 35 and 38. The figures are:
Canadian Northern	 $302,399,006
Grand Trunk Pacific	 157,699,714
So that adding the three figures together, the S294,000,000 on the Grand Trunk, $302,000,000 on the Canadian Northern and the $157,000,000 on the Grand Trunk Pacific, we have a total debt to the public at the end of 1921 of $755,115,592. We have $755,000,000 odd due the public at the end of 1921, $913,913,000 odd due the public at the end of 1924, and since 1924, until the end of March of this year $18,000,000 more has been added according to the statement of the minister which is correct as we all know, the $18,000,000 being new money from proceeds of the $35,000,000 issue made this year.
Then adding all these together, the $913,913,082 and the $18,000,000 we have $931,913,082 as the debt due to the public at the end of March last. Deducting the debt due to the public $755,115,592 on the 31st December, 1921, when this government took office, we find the increase in our debt as denominated, Canadian National Railways, $176,796,490. This is the increase in the one account, the increase in the other account is $64,625,860, and the two together make a total on both accounts of $241,423,350. Nor does this represent the total increase in the debt from December, 1921. To arrive at these figures there is included the $4,000,162 that has been added this year on account of the debt of Greece and Roumania. There was included as well some $8,199,333.31 last year and $8,938,260

The Budget-Mr. Meujhen
the year before which were rightly taken in as an asset, but which were just as much our assets five years ago as they are to-day- exchange adjusted as due us by the British government; and a similar amount the year before. I am not complaining at least in the case of the latter two items being included in our estimates to get at our right debt now, but what I say is that we cannot fool ourselves by thinking we are that much better off than we were. We are just exactly in the same position. They were our property then as they are now. Adding these, the debt that we have gone into since this government took office, after all refunding is allowed for, is $262,561,105. I do not think it can be successfully contradicted that that is the real position. I do not think I am in disagreement at all with the hon. member for St. Lawrence-St. George in this respect.


Herbert Meredith Marler: My right hon. friend is totally in disagreement with me, because his figures are incorrect.


Arthur Meighen: I thank my hon. friend for so saying so frankly.


Herbert Meredith Marler: If my right hon. friend will permit me, the increase is $111,000,000 in the three years of this government's administration , taking into consideration the two debts, consolidated djebt and railway debt, less refundings.


Arthur Meighen: I thought the hon. member had said I was correct and I did not know how my figures could have been correct and those of my right hon. friend's also.'


Herbert Meredith Marler: I will be most happy to submit my figures to anybody.


Arthur Meighen: My hon. friend is entirely wrong. I have taken the debt to the public at the end of March from the reports of the companies. I have taken the debt to the public at the end of December, 1921, from the same reports and the reports of the Department of Railways and Canals, the onlj' sources from which they can be secured. I have read in every case the report. The difference is virtually the same as given by the Acting Minister of Finance. The only difference is this, that while he makes a total increase of debt practically the same, he divides it differently between the public and the government. The reports of the department are absolutely clear and the reports of the companies agree. It is, however, wrongly divided. The amount due the public is larger; the amount due the government is smaller.


Herbert Meredith Marler: I do not want to be factious in interrupting. All I can say is that these figures perfectly balance. They have been checked up and checked back. I am not trying to mislead my right hon. friend at all.


Arthur Meighen: The basis of them is
wrong.


Herbert Meredith Marler: No, the basis is right.


Arthur Meighen: Does the hon. member deny that there is owing to the public today $931,913,000 in respect of the Canadian National Railways?


Herbert Meredith Marler: What I state is this, if my right hon. friend would like to hear the statement, that from the 1st April, 1922, to the 1st April, 1925, the combined debt of this country, that is to say, taking all outgoings, including railways, less refundings, shows $111,473,508 of an increase.


Arthur Meighen: I do not know why it
was necessary for my hon. friend to keep forever repeating his conclusion. It would have been enlightening if he had given us his method of arriving at it. I have given my method of arriving at the result just presented and I have quoted my authority at every stage. My hon. friend is entirely wrong as to his figures of a surplus. I commend, to him, more careful inquiry, more deliberation and less determination to get back into the good graces of the government.
What is the significance of all these returns? Has this House been prepared for the fact, which is admitted even in the report of the Minister of Railways, that in the three years, irrespective of what has taken place in the last three months, the National Railway debt to the public and the government increased by more than $294,000,000? Is it prepared for the fact, which nobody disputes, that, adding the last three months, it is now, according to the minister, about $312,000,000-or, according to the reports of the companies, about $327,000,000-more than it was just at the end of December, 1921? The increase to the public i3 colossal in any event; the increase in both is still worse. We have been supplied all along with data as to how the operating account was running. We were told through the year 1923: "It is improving." The operating account was improving. We were told through the year 1924: "It is getting worse." It was getting worse. But the operating account discloses only a mere fraction of the whole truth as to the National Railways and the real position we are in to-day.
The Budget-Mr. Meighen

Let me say a few words by way of persona! reference. I am not one who has been predisposed to criticize the National Railways. I have been assailed myself most severely for the part I took in amalgamating the roads under the government of Canada at the time they were amalgamated, especially, for the acquisition of the Grand Trunk. No one hoped more ardently than I did that the operation of those roads, controlled by the statutes which were submitted and passed by this House, would be a success. After the first two years' reports came down, the hopes that I had originally entertained were strengthened. When the Minister of Railways presented his report in the spring of 1922, I commented, as the House will remember, most favourably upon it and looked forward hopefully to the success of the system so amalgamated. In 1923, I followed in the same vein. It is certainly with a degree of disappointment, which I do not think anyone will sincerely question, that I now am compelled to say that the whole aggregate result to-day is discouraging. It is not that the disappointment is so great in respect ol the result of operations, but the disappointment, indeed, is keen when we have regard to the fearful pace at which, in these last three years, the capital account has been increased. I know the capital account was very considerably increased prior to 1921. When we took over the Grand Trunk railway particularly, it was in a dilapidated condition. The board of arbitration found that that company had been paying to shareholders dividends which should have been applied to their system, which should have been invested in rolling stock, in their line of railway, in maintenance and things of that kind. The condition of the road was such that millions had to be invested to get it into the shape in which we found it in 1922. Those millions, however were not as great as have been generally believed. They were given by the hon. member for St. Lawrence-St. George and they were given correctly; but everybody thought at the end of 1921 that these large capital investments would be over. Nobody thought all capital additions vould be over. You cannot maintain a railway without some enlargement of capital investment. In the year 1922, this policy was rightly, honestly pursued. The board of management of that year added to the debt of that railway in 1922 only the sum of $59,000,000, as is shown by the minister's return. This sum of $59,000,000 could have very little in it except the deficit inclusive of fixed charges and operation.

The deficit alone would be something over $50,000,000, so that the amount of capital investment in 1922 was relatively very small. The management at that time was under Mr. Hanna and the former board and it determined that we had gone as far in the way of investment as we should go for the time being; that our business was to take the property we had and make it go, to endeavour to get traffic enough for it to give returns to the people of Canada and not to continue the process of adding million by million to the capital debt of the system.


Mr. EULER:: Would the right hon. member state, in detail, just what his objections are to the moneys that have been expended on capital investment?


Arthur Meighen: Does the hon. member
mean: To which expenditures I object?


William Daum Euler: Yes.


Arthur Meighen: I do not know because
I have not seen a statement of them. Where can you get them? I know this, that according to the minister's returns, in the next year, 1923, instead of $59,000,000 being added, it was $116,000,000 odd. This is a terrific sum, and in the next year, 1924, it was $118,000,000. A cording to the reports of the companies it is more than either of those figures, about $12,000,000 more. These figures are staggering.


William Daum Euler: Does the right hon. member think that the mere statement of the size of the sum is in itself a proof that the money is ill spent or not properly expended?


Arthur Meighen: It is not a proof, no;
but it is a proof that the policy tha+ has b ien followed is unwise. Never under the conditions of these last three years was this country justified in putting 3327,000,000 more into the National Railways; even if you assume-which I will not-that the money is now represented by tangible assets, the policy was not the right one. We already had over $1,100,000,000 in that road and to-dav we have $1,492,000,000. And of that, $327,000,000 has been put into the railways since this government came into power. These figures, I say. are staggering; they have staggered the people of Canada. And this government under ths law of the land is responsible for all moneys provided for capital expenditure of the Canadian National Railways. Let no one forget that fact. The statute makes the government responsible for capital. I could point to investments of the railways that have not been sound; but I do not claim that under any management every investment that is

The Budget-Mr. Meighen
made will be sound. What I ciaim however is that the road has been run without financial direction, of a quality adequate to such an enterprise, ever since the end of 1922.
You may have a high opinion of Sir Henry Thornton or you may not; he has his critics and his friends, and he has many of both. But neither Sir Henry Thornton nor any other man in charge of a railway can be master of all the phases of this huge enterprise. Name me the president or general manager of any great system half the size of this who is surrounded with the class of men whom this government provided to manage a road .n which- including the Intercolonial and Transcontinental-we have invested nearly two billions of the money of the ; ecple of 5 p.m. Canada. This road's operations are twice the size of the titanic United States Steel Corporation; and I wonder if we would compare the directors of tne United States Steel Corporation with the Talbots, the Goughs, the Dawsons with whom this government supplied Sir Henry ThornTn at the end of 1922. Where is the man on that board-or rather, where was the man on that board, for I shall comment on rhe present board in due course-who was competent to render any real assistance to Sir Henry Thornton, assuming that he himself was competent, giving him every credit for what he has done, when the old board was changed at the end of 1922? Instead of Mr. E. R. Wood, instead of Mr. Riley, instead of Mr. Hobson, we had on the board, the men I have named. The consequences are now upon us. There has been a little improvement of personnel lately, I admit. I do not object vo, rather I commend, the appointment of two or three men, Mr. Gardiner, I think, was a good appointment; so was Mr. Brown. But these men have been only lately put on the board. Up to their appointment who was there on the board who held the slightest control over the financial direction of that colossal enterprise? No control from the directors, no control from the government-and Canada to-day finds itself $176,000,000 more in debt to the public in respect of the railways, and $327,000,000 more in debt altogether since this government has come into power.
Canada is not a country that can afford to go down hill at such a pace, and the hon. member for St. Lawrence-St. George is absolutely right when he calls attention to the inevitable end. Such a state of affairs cannot continue and the responsibility is on the administration, who having the power to control this tremendous outlay has failed to exercise that power. They have allowed millions to go into Scribe hotels, golf courses, 168
radio sets and all that sort of thing. If this country were going ahead it would not be so bad. If we were expanding and the population were growing, if there were sufficient traffic to supply both railways, with a surplus, these expenditures might be justified. But when there is only a limited amount of traffic available, to be spending the money of the Canadian people in tens of millions in a mad effort to get the traffic from the other enterprises is manifestly not wisdom. It is because of this policy that we find ourselves where we are to-day.
I said there was no expansion. Have hon. members observed what has been going on? Has there been any attempt at co-ordination or economy? I look at the Colonization department alone and I find that what in 1922 was about $160,000 has increased until now it is $770,000. And this in competition with the immigration efforts of the government. How can such a duplication of effort be justified? During the fiscal year 1923-24 the government spent $3,482,986 on immigration work, or $1,128,000 more than was spent during the year 1922-23. And with all this duplication we have an immigration of 111,000 as against 148,000 the year before. This year the Canadian National Railways' expenditure in colonization has gone up by 150 per cent; while, as I have stated, the government has spent $1,128,000 more on immigration. Yet, notwithstanding all that additional expenditure, to say nothing of the overlapping, we have received about 37,000 less in immigrants than we did the year before.
The Prime Minister (Mr. Mackenzie King) has been in the habit of telling us that when his government started this work they had to begin at the bottom of the hill; that the old government had allowed the immigration machinery to go to rack and ruin, and so the present administration had to start at the bottom; and the people must therefore wait until later figures would be available to see what the full harvest of the government's policy will be. Well, by actual count, they have announced nine policies in their three years of office so far as immigration is concerned. The figures however show that our immigration, as at the 31st of
March, was as follows in each of the years enumerated:
1920		 111.338
In that year our soldiers had not all returned.
1921		 148.477
1922		 89,999
1923		 72,887
1924		 148.560
1925		 111,000



The Budget-Mr. Meighen


William Lyon Mackenzie King: Has my right hon. friend been adding in the cost of the Wembley exhibition as part of the immigration expenses he has quoted?


Arthur Meighen: My secretary got the
figures from the department; I do not know whether that item is included.


William Lyon Mackenzie King: Can the right hon. gentleman not tell us whether it is included?


Arthur Meighen: If it is I cannot dispute it; my secretary got them from the department's returns.


William Lyon Mackenzie King: The right hon. gentleman ought to be more careful before quoting figures.


Arthur Meighen: It would make little difference anyway, because there has been a great increase in the immigration figures. But I got the figures from the department; and if the items referred to should not be included under the head of Immigration why did the department so include them?
Now, these are the consequences which we have to face. They are not very cheerful to contemplate, nor will recovery from them be very easy. I sometimes wonder how the government can justify the course it is pursuing. We have abundant resources, we are told; but abundant resources are not enough, unless we manage them for the benefit of the people of our country. All this talk about great resources is just so much air; what is essential to accompany resources is a policy which will develop them; and the government should see to it that the people of Canada shall get the benefit of the full harvest of that development.
We have been met year after year with admissions: things were not any too good, but they were going to be very good soon. One year we had one excuse; the next year we had another; the third year we had still another; and I wondered what was to be the excuse this year. I remembered that last, year the Acting Minister of Finance told us in his statement that with these reductions of duty on basic commodities, on the "instruments of production," there would be so much to buy and so much money to buy it with that our workmen would be employed overtime and our factories running night and day. This was the prophecy made in the closing words of the budget of last year. Instead of that, everybody knows-not only everybody here but the people throughout the whole country-that the very reverse

has been the fact; and I wondered what the Acting Minister of Finance would say by way of explanation when he came before rhe House this year with his budget. He looked about for some new excuse. The three best had gone; he had to have another. He looked across to Europe, and he said: "1 know what the trouble is; it is the reparations problem over in Europe. Europe is all mix:'I up; the people there cannot buy. The reparations trouble left them in chaos up to last year, but last year they got it fixed up by the Dawes plan, so now we are on the eve of expansion." Do hon. members really think there is the slightest thing in that? Do hon. members really think that is valid to the extent of one per cent? Is it difficulty in selling our exports that has been our trouble? Have we ever got as good prices in history, in time of peace, as we got this last year? I do not think we ever did, nor do I think we have ever found so ready a sale-that is, for our raw product, the production of which and the marketing of which was going to make us all so busy, all so happy, all so rich. On the contrary it is business at home that has become stagnant, the people at home who have become discouraged. I ask, with such policies as this government is pursuing-the National Railways running more or less wild, expenditure mounting up and revenue decreasing-what will be our position next year? Does the government anticipate that next year we will get higher prices for our products? If so, on what is that expectation based? Does the government expect that a contracted population is going to produce more than an expanded population? If it does nol expect these things, upon what does it rely to extricate this country from the mire of debt into which it has fallen?
Now, the hon. member for West York (Sir Henry Drayton) in the amendment says this and this alone: that the essential thing for Canada to-day is reduction of taxation, especially of those taxes which bear on the masses of the people and which this government has increased-the sales tax, these nuisance taxes, and the like. Reduction of all taxes is necessary, but of these especially. The amendment says, as welt that there is disclosed in the budget of this year no evidence of that economy that will make such a, reduction possible. I ask, is there any hon. member of this House who in his heart of hearts thinks he can discover any such evidence in the budget of this year? Is there an hon. member to my left-and they are on trial in this debate as well as the rest of us-is there one of them who has not

The Budget-Mr. Mackenzie King
stated in this House the very things that are stated in the amendment? Has there been one hon. member to my left who has uttered in this debate an opinion which conflicts with the statements made in the amendment? Are those statements not of importance? Is it not of value that this House should declare a fact-and it is a fact-so vital to the welfare of this country? If hon. members admit those facts, how is it that they are going to vote against them? Some hon. members have said, "These people to our right are protectionists." Well, there is no protectionist statement in the amendment. We have not diverged from our views-and I own it-on the subject of protection; we stand where we stood in office and we are going to stand there. Further, we are going to do everything in our power to get the judgment of the people of Canada on the issue. We have a statement of our faith in that respect on the records of this House'; there it has been since the first day of this session, and there it will stay until it is moved and discussed in parliament. But if we had included in the amendment a declaration with regard to protection, duplicating our other declaration of faith, hon. members to our left would have said: Oh, the rest of your amendment is all right; we are with you on economy, we are with you in reduction of taxation, but there is that protection declaration-we have to vote against you on that account. But this time they have no such excuse. This time the sincerity of their professions on this question are to be tested. This time the country is going to know whether hon. members to my left are more interested in continuance in office of this government than in the adoption of sound principles of public administration.
As for this government I can make no such appeal to them. They are interested in one thing, so far as I can see, and one thing only- the retention of power. But I do ask them to have some regard, before it is too late, to the actual condition of this Dominion. I do ask them to adopt principles and practices, both of administration and of fiscal policy; I do ask them to adopt such courses as will relieve the discouragement of industry, the lassitude of trade and the wastage of population which confront us now.


William Lyon Mackenzie King: Mr. Speaker, the rules
of this House have been so arranged as to make possible a discussion on particular occasions of matters of great concern to the 168i
country as a whole, and at such times the House and the country have a right to expect that the topics which are the subject of consideration will be brought under review particularly by the party leaders in the House. It is customary on the occasion of the budget debate for all political leaders to discuss the budget proper. A time has been set apart for the discussion of railway problems. In order to permit of the fullest possible discussion, matters relating to railways are referred to a select committee of the House with power of examining in detail all the questions involved of calling witnesses and going into all the facts and figures and circumstances relative to the railways of the country. When the report of the committee is presented to the House, it is reasonable to assume that railway matters will then and there be considered and that every member will be prepared to discuss them. But I submit, Mr. Speaker, that when we come to discuss the budget, if we are to follow established precedent we have a right to expect from the right hon. leader of the opposition (Mr. Meighen) a discussion, if not, above all else, at least in some measure, of the fiscal policy of the country. He told1 us this afternoon that he regarded the fiscal policy of the country as an all-important question. I think we will all agree with him in that, and I think it goes without saying that the time for the discussion of fiscal policy is when the House is assembled for that express purpose, namely, to debate the budget. Instead we have listened this afternoon to a discussion on the part of the right hon. gentleman which has had to do almost exclusively with railway matters.
We are told by the right hon. leader of the opposition himself that he does not intend to discuss the fiscal policy at this time. Well, Sir, I do not know what motive my right hon. friend has in mind in not wishing to discuss the fiscal policy, in not wishing to bring forward his own fiscal policy and have it made a subject of debate here, unless it be that he is either ashamed or afraid of his own offspring. On the eve of the assembling of this parliament my right hon. friend issued a manifesto to this country, a manifesto dealing with fiscal matters. The House had every reason to expect that when we came to a debate on the budget, my right hon. friend would move a3 an amendment at the first opportunity, as he had the right and privilege to do what he had set forward as the fiscal policy in which he believed. Dad he adopt that course? He was careful when the House assembled to place on the order paper in the

The Budget-Mr. Mackenzie King
form of a notice of motion this statement of policy to which I refer and which he had first given to the public through the press as a manifesto. He knows the rules of the House, better I will pay him the compliment of saying-better I believe than almost any other hon. member, and he knew as well as ail hon. members assembled here know, that the time to debate a question of that kind is when the budget resolutions are before this House. When he placed his resolution on the order paper, he also knew as well as every other hon. member that the chance of the resolution coming up at an appropriate moment for discussion before the budget was introduced was remote indeed. I say, Mr. Speaker, that my right hon. friend this afternoon as the leader of a party has been departing altogether from the spirit of the rules of this House in having selected this occasion to discuss, practically exclusively, railway matters, and in omitting altogether to discuss the great question of fiscal policy, on which his party has one view, and on which hon. members in the rest of the House have another.
May I further point this out? If my right hon. friend really desired to have his fiscal policy considered, he could at any appropriate time in this debate have done so by speaking on the budget. He has carefully waited until virtually the last moment of the last day, after this House has been discussing matters pertaining to fiscal policies for a month and a half, to tell us he does not propose to discuss at all at this time the fiscal question, which, mark you, he says is all important. Well, the public will draw its conclusion, just as every hon. member will draw his conclusion, with respect to what my right hon. friend has had in mind. The truth of the matter is that he knows, and knows very well, that had he presented his resolution, had he presented his fiscal policy in the form of an amendment to the budget, it would have been so overwhelmingly defeated in this House that he would have been even more ashamed of it than he is at the present time.
My right hon. friend began his address by making reference to the length of this debate. I should like to say just a word or two following him in that regard. When the government called parliament together early in the month of February, it did so with the hope and expectation that the business of the country would be expedited, that the convenience of hon. members would be consulted, and that, the government being prepared to bring down its measures rapidly as opportunity permitted, it would be possible for
TMr. Mackenzie King 1
this House to adjourn before the end of the spring days or at any rate before the beginning of the summer days, thus suiting the convenience, as I have already said, of most of the members of the House, and certainly also meeting with the wishes of the general public, who, I think, do not like to see time indefinitely consumed here to no particular purpose. Having that object in view, the government presented to this House almost on the day of opening, certainly as soon as opportunity permitted, the Auditor General's report in its complete form. The government brought down as soon as opportunity permitted the estimates and placed them on the table of the House. The debate on the Address was a short one. The government was proceeding with business rapidly, and I think every hon. member felt that the session had opened in a mannei which promised rapid and expeditious disposal of the several questions that were tc come before the House. Then, for some reason or other, we began to meet with protracted discussion. Hon. gentlemen opposite, my right hon. friend and those who sit about him, began to protract and delay the proceedings of the House in a most inexcusable manner and, I might add, in a manner without precedent.
When the government signified its intention of introducing an ocean rates control bill, it was intimated by the hon. Minister^ of Trade and Commerce (Mr. Low) at that time that before the House would be asked to pass on the measure itself, the bill would be referred to a select committee of the House, where the fullest opportunity would be afforded to go into all details. Hon. members were told that the committee would have the full powers, given such committees. In accordance with customary procedure we then started in briefly to discuss the resolution, as a preliminary to bringing in the bill itself, and while the resolution was under discussion the House was assured over and over again that the questions which were being asked at the time could be answered more satisfactorily if the measure were in committee. In view of this fact the government repeatedly made overtures to hon. gentlemen to allow the measure to get to a committee and save the time of the House.- But what did hon. gentlemen opposite do? They kept up a debate day after day, until fully seven days of the time of the House were consumed on the resolution before the bill was even introduced, and when finally the government decided that a vote on the resolution must come some time, they complained they

The Budget-Mr. Mackenzie King
had been badly treated because a vote was taken at the end of this seven days' debate. I have said, Mr. Speaker, that that kind of procedure is without precedent so far as dealing with a preliminary resolution of the kind is concerned.
May I now show the House how different the action of this government was from the action of hon. gentlemen opposite under similar circumstances? We have heard a great deal from my right hon. friend this afternoon with respect to the deficits on the National Railways. How were the National Railways acquired? Who was responsible for the acquisition of the major portion of the National Railways? A colleague of my right hon. friend opposite was the one who brought in the resolution for the acquisition of the National Railways. Now in the case of the acquisition of the National Railways, there was a necessity as in the case of the contract for the control of ocean rates, to precede the bill itself by a resolution. What position did the government of which my right hon. friend was a member take with respect to that resolution? It contended that the House had not even the right to debate the resolution. It would not allow one hour's debate on the resolution for the acquisition of the Grand Trunk Railway system.


Arthur Meighen: Has the hon. gentleman got the quotation there?


William Lyon Mackenzie King: Does my right
hon. friend deny it?


Arthur Meighen: I have not the slightest recollection of it, and I do not think it is correct.


William Lyon Mackenzie King: I think I am coming to know my right hon. friend's methods. I thought he would say exactly what he has just said so I brought the Hansard with me. I have in my hand the Hansard of the second session of 1919, volume II, page 1012, and where I find the following:
GRAND TRUNK RAILWAY SYSTEM Resolution Respecting its Acquisition by the Government
Hon. J. D. Reid (Minister of Railways and Canals! moved that the House go into committee to consider the following proposed resolution:
Then follow three columns of Hansard setting forth the resolution for the acquisition of the Grand Trunk Railway system. It goes on:
Mr. Speaker: Is it the pleasure of the House to adopt the motion?
Some hon. members: No.
Mr. Devlin: Mr. Speaker, I would like to ask the
minister-
Mr. Speaker: The motion is not debatable. Of course, if hon. members desire that a vote be taken on the motion, that would be quite in order. Is it the pleasure of the House to adopt the motion?
Some hon. members: No.
Some hon. members: Carried.
The House then divided on the motion of hon. Mr. Reid which was agreed to on the following division:
And the division is there recorded.


Arthur Meighen: The right hon. gentleman quoted the Speaker's ruling. The government did not ask for it, and my right hon. friend quoted nothing to that effect.


William Lyon Mackenzie King: My right hon. friend has the finest sense of chivalry and loyalty of any man I know! I have quoted the record showing what was done at a time when the Speaker of his own party was in the chair, and when action by the Speaker was asked by one of his own colleagues in the ministry. He turns round here when the Speaker is no longer in the House and asserts such a pretext as that.


Some hon. MEMBERS:: Oh, oh.
Mr. MEIGHENRubbish. The minister never asked for it.


William Lyon Mackenzie King: I tell my right
hon. friend that the country as well as the House is beginning to understand his methods and his actions.


Arthur Meighen: Nonsense.


Some hon. MEMBERS:: Try again.


William Lyon Mackenzie King: What did ray right hon. friend say this afternoon in another effort to deceive the country? He began quoting figures with regard to immigration costs. He began by saying that the government had increased the outlay on immigration [DOT] by more than a million of dollars, and when I asked him if he was including in that statement the cost of the Wembley exhibition which amounts to over a million dollars, the right hon. gentleman said "I do not know, my secretary got this memorandum." In the former case to which I alluded the right hon. gentleman blamed the Speaker, but in this instance he puts the blame on his private secretary.


Arthur Meighen: Rubbish. I said my
secretary got it from the Immigration department and I took full responsibility. Was it any crime to get it? If the statement was wrong ask the minister why it was wrong.


William Lyon Mackenzie King: The responsibility devolved upon my right hon. friend to
2638	COMMONS
The Budget-Mr. Mflckenzie King
satisfy himself in advance that the figures he was giving the House and the country were correct before he used them.


Arthur Meighen: I took the minister's
word for it.


William Lyon Mackenzie King: I think hon.
members of the House will know what value to attach to the other statements which my right hon. friend gave this afternoon and which I venture to say are in every particular as misleading as the two particular instances I have just mentioned.
Now, Mr. Speaker, let me continue with respect to the delay there has been. Perhaps my right hon. friend will dispute even this: The next measure that was brought forward- related to canteen funds. Because the government knew that the returned soldiers were anxious to have legislation affecting their interests introduced without delay

this measure, intended to be followed by others, was brought forward in the House at an early date so that it might go to the Senate as soon as possible, and that no question would arise there of full opportunity not having been given for consideration. That was the bill respecting the canteen funds.


Mr. ARTHURS:: That has nothing to do with the returned soldiers.


William Lyon Mackenzie King: It has to do
with matters in which the returned soldiers were interested.


James Arthurs: It has nothing to do
with the Pension Act.


William Lyon Mackenzie King: The soldier is vitally interested in the question of canteen funds, and the intention of the government, as soon as that question should be disposed of, was to bring in other legislation of interest to returned soldiers. Nevertheless when that particular matter was brought before the House hon. gentlemen opposite took up three days debating the resolution. Now, that resolution passed this House last session as did the bill based on it. It contained no new features; the whole effect of it was in accord with-	.


James Arthurs: The right hon. gentleman is absolutely wrong in the assertion that this measure was before the House last year.


Mr. BELAND:: It was passed last year.


James Arthurs: The canteen bill?


Henri Sévérin Béland: Yes.


William Lyon Mackenzie King: When my hon. friend's constituents read his remarks this

afternoon they will wonder what he doe3 with his time while away from home. The records of parliament speak for themselves. I repeat, the measure passed this House last year and my hon. friend possibly may find that he took part in the debate.


James Arthurs: The right hon. gentleman
is distinctly mistaken in saying the measure was passed last year; it was thrown out by the Senate.


William Lyon Mackenzie King: The measure
was not thrown out of this House, it was passed here. I am speaking of this House not of the Senate.	.


James Arthurs: I want to ask-


Some hon. MEMBERS:: Order.


Mr. DEPUTY SPEAKER:: I must ask
that the hon. member be allowed to put his question if the Prime Minister consents.


James Arthurs: I merely wish to ask a
simple question:	Was the canteen fund bill
thrown out by the Senate last year?


Henri Sévérin Béland: Yes it was.


William Lyon Mackenzie King: The point I
wish to bring to the attention of the House is this-that three days of the time of parliament were taken up by, I think it is fair to say, wholly unnecessary discussion.


Robert James Manion: May I just interject the
statement that we took parts of three days not three full days, and that we agree^ with the government to finish at a certain time. That agreement we lived up to.


William Lyon Mackenzie King: The greater
part of three days was consumed as I have indicated.


Robert James Manion: Part only.


William Lyon Mackenzie King: The point I
wish to make is this:	For reasons best
known to hon. gentlemen opposite there has been evidence, not only in this debate but in the case of the other two matters to which I have referred, of a deliberate effort to protract the proceedings of this parliament. The reason of it, if I am not misinformed, is that hon. gentlemen apposite have it in their minds that the government has thoughts of appealing to the country this year, possibly in June, and they are going to take good care that the government will not be given a chance to make the appeal at that time.


Some hon. MEMBERS:: Oh, oh.

The Budget-Mr. Mackenzie King


William Lyon Mackenzie King: A higher compliment could not be paid the administration than that at all costs they must be kept in office, and that all through this discussion, which has been running on for a month and a half-during which hon. members have discussed all kind of topics pertaining to all parts of the country-we have not heard either from hon. gentlemen opposite or any of the other groups, the slightest demand to this government to make an appeal to the people and test public opinion.


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: I tell the right hon.
gentleman that what he is saying is not true. The demand has been made over and over again in the debate, and I make it now.


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: My right hon. friend
had better stay in the chamber and hear the debate.


William Lyon Mackenzie King: My right hon. friend might put that in the form of a motion and let us debate it.


Arthur Meighen: Give us a day for it.


William Lyon Mackenzie King: I mention
these facts because I think the country is entitled to some explanation as to why the proceedings have been protracted in this way. May I say with regard to the present debate that I believe it is the longest budget debate that has ever taken place in this parliament. Certainly it is the longest that has taken place in the last thirty years, and over a budget that is in the main non-contentious. What has been the nature of the debate? Most of the time has been taken up by hon. gentlemen of the official opposition in saying that the government should have put the tariff higher, and by hon. gentlemen of the Progressive group in saying that they were not satisfied because the government had not made the tariff lower. As a government we are being condemned by hon. gentlemen opposite not because they agree. If they join together in a vote against the budget their vote will only have this significance, that we are being censured because at one and the same time we have not gone in diametrically opposite directions. That is the force of the opposition that has occupied a month and a half of the time of this parliament, the government is to be criticized because it has so sized up public opinion in Canada to-day and in this House that it seeks to avoid an extreme in either direction, and to do at the present time the
thing which the moderate, sensible people of this country wish to be done.
It may interest hon. members to have a review of the length of time that has been spent year by year over the last thirty years in debating the several budgets. In twenty-three years of the last thirty the debate on the budget has not occupied a longer time than ten days at the outside. In several sessions it has not occupied more than five days and in some sessions but one or two days. In 1896 it occupied twelve days. That was just before an election and probably at the present time some hon. members feel it is necessary to speak on the budget because they think there is a possibility of an election coming on in the near future. In 1915 the budget debate lasted thirteen days. In 1902 and in 1922 the budget debate lasted fourteen days. Last year it occupied nineteen days. In 1900, before the general election of that year, it lasted twenty-three days. This year the debate has run into twenty-four days. We began on the 24th March and to-morrow will be the 1st May. The time of the House, with the exception of a brief adjournment at Easter and the ordinary adjournments over Saturday and Sunday has been given continuously to the discussion of this budget.


Mr. LADNER:: Have the hon. gentleman's followers not taken one-half the time?


William Lyon Mackenzie King: No, they have not. I am glad my hon. friend asks that question, because if he looks at the records he will find the greater part of the time has been taken up by himself and those who sit around him.


Arthur Meighen: That is not correct. It is not within a mile of the fact.


William Lyon Mackenzie King: We are not
discussing distances, but time.


Arthur Meighen: Will my hon. friend give the pages?


William Lyon Mackenzie King: May I now
come to what in other particulars has been the nature of the criticism directed against the government. It has been in part along the line taken by the right hon. leader of the opposition this afternoon. First of all, there has been criticism of the manner in which the public accounts of the country have been made up. In the next place there has been criticism of the method in which the budget has been presented and the time at which it was introduced, and finally there has been the amendment of the ex-Minister
2640	COMMONS
The Budget-Mr. Mackenzie King
of Finance (Sir Henry Drayton) and the different points referred to therein. I think in these particulars we have summarized fairly well the nature of the opposition which has come from hon. gentlemen opposite. May I say that I think it ought to be possible for hon. gentlemen in this House to debate public questions without either impugning the honour of ministers of the crown or the integrity of government officials. It is because hon. gentlemen opposite, including my right hon. friend this afternoon in the course of his remarks, have descended to that level, that I wish to take the strongest possible exception to the nature of the pronouncements they have made against the government and one of its honourable members, as well as against members of the public service of the country. My right hon. friend last year-and hon. members opposite have done the same thing this year -insinuated that the government in some way caused the public accounts to be made up in a different fashion from the form in which they had been made up hitherto. In fact, the sole point of my right hon. friend's remarks this afternoon is that the government has not taken into account in connection with the discussion of the government services as such and what relates to the government services as such, the railways and facts and figures relating thereto. There has been a direct statement-I will not call it an insinuation, although it started as an insinuation, and, as in the case of many other things oft repeated, those who repeated it have come to believe it themselves, it comes now to a direct statement-that the government has changed the method of making up the public accounts so as to deceive the House and the country. Hon. gentlemen will recall that over and over again we heard the statement that we had not included in our public accounts as contributing to the net consolidated debt the guaranteed and unguaranteed amounts which the railways had expended and which they say we should have included, and further that by not so doing we were altering the method of bringing the public accounts before the people of this country. Hon. gentlemen opposite, when they were confronted with the sworn statement of the auditors who in their day audited the books of this country, found that while they might make that assertion a few times they could not make it indefinitely, and so they have abandoned it as my right hon. friend abandoned it to-day, and have come now to make the statement that it is not the books of the country that have been altered, but it is the method of the presents-. fMr. Mackenzie King.]
tion by the Minister of Finance of the accounts of the country.
Let me come to the statement of the books of the country. In the year 1920, the then Minister of Finance, the present member for West York (Sir Henry Drayton) called in a firm of accountants from the city of Toronto to go over the books of the Finance department to see if they were kept in a proper way and to audit them. I think it was a wise and desirable course to adopt. There had been large expenditures during the war. The minister wished to have a sense of security that in these vast outlays there had not been too much in the way of confusion; and he brought in a firm of auditors and gave them not only the task of auditing the books of the Finance department but gave them also the further task of straightening out the accounts of the Finance department in such a way that they would more readily compare in form with the methods adopted by great financial institutions or railway companies and industrial concerns. I will read to the House the statement that appears in the report of the Deputy Minister of Finance in the Public Accounts for 1920. It is as follows:
In carrying out the policy of making the balance sheet simple and illustrative its usual form has, under the personal supervision of Mr. George Edwards, F.C.A., C.B.E., of the well-known firm of Messrs. Edwards, Morgan and Company, Chartered Accountants, head office in the city of Toronto, been revised and set up in a manner more in conformity with those of banks, railway corporations and other financial institutions. Mr. Edwards and his firm have given considerable attention to this revision without remuneration. The revised balance sheet will undoubtedly be favourably received by outside business concerns.
Then there is the certificate of the firm of Edwards, Morgan and Company, chartered accountants, dated Ottawa, December 1, 1920, which appears in the Public Accounts 1920, at that time:
We have examined the balance sheet of the Dominion of Canada (shewn herewith) as of March 31, 1920, also the expenditure and revenue account for the fiscal year ended on the said date, and have verified the same by reference to the Dominion ledgers. We certify that the above-mentioned statements accurately set forth the matters therein referred to, and are as shewn by the said books.
Edwards, Morgan and Company,
Chartered Accountants.
That is the firm this government retained to examine the public accounts and books of the Finance department last year, after hon. gentlemen opposite had said they were made up in a different fashion. We asked them to certify to parliament as to whether or not any change had been made in the manner of presenting the public accounts. This is the certificate which that firm has given, a firm

The Budget-Mr. Mackenzie King
which I wish the House to remember was retained by hon. gentlemen opposite in the first instance, and which was requested by this government to certify whether there had been any change in the method by which the public accounts for 1924 were made up. This certificate appears in the Public Accounts of this year:
We have examined the balance sheet of the Dominion of Canada as at March 31, 1924, and we certify that the balance sheet conforms to the balance sheets of previous years in not including in the net debt of the Dominion, issues of the Canadian National Railway Company and companies included in its system, which carry the guarantee of the Dominion of Canada. Such guaranteed issues are shown year by year as indirect liabilities.
Geo. Edwards,
Of the firm of Edwards, Morgan & Co.
W. Garth Thomson,
Of the firm of Peat, Marwick, Mitchell & Co. Ottawa, Canada, 27th January, 1925.
With that certificate before us, can any hon gentleman any longer argue in this House or in this country that the present government has sought in any particular to deal dishonestly with the House or with the public in separating the railway accounts from the rest of the public finances? I marvel at hon. gentlemen opposite daring to suggest such a thing. It is not patriotic. It is not honest. It is not true. Talk of deceiving the public-that is the way to deceive them. I say that it cannot again be questioned that, as regards the railway accounts, this country from the beginning of confederation down to the present time has kept the railway accounts separately with respect to guaranteed and unguaranteed amounts, and if this government were to change that method, it would only serve to bring confusion into the whole national situation by making impossible comparisons between the cost of government to-day with the cost of government in previous or succeeding years and the cost of national control of railways, a matter which is being given a fair trial at the present time.
Let me say a word in regard to this matter of the control of the National Railways and the bringing of their accounts into the government accounts. First of all, I would ask hon. gentlemen: Who was responsible for having the Grand Trunk railway system being made a charge upon this country? Who brought into being the National railway system as we have it at the present time, or rather not as we have it at the present time, because this government has organized by legislation efficiency out of the chaos left by the previous administration?
Hon. gentlemen opposite were the ones who, by act of parliament, decided that this bankrupt railway system should not be allowed, as has been done frequently in the United States, to go into liquidation, but instead should be bought at a particular price in the condition it was in and made part of the National system. It is very fine for my right hon. friend and his friends to turn round now and try to indict this government and this party for enormous expenditures which, he says should not have been added to the debt of this country, when as a matter of fact we have had no responsibility whatever in the initiation of that policy.	We have a
responsibility in the matter of carrying on the control of the railways, and I shall endeavour to show,	as	I continue to speak, how we have sought to discharge that responsibility and what we have done in that connection. It will reflect very favourably, I can assure the House, as compared with the methods of my right hon. friend during the short time he had control.
The point I wish to make here is that the National' railways were turned over to the government, and when this was done, the government had to decide upon one of two policies. I am going to submit this to the fairness of the hon. members of the House and of the country. The two policies that were possible in connection with this vast railway system were: Either to administer the system as a part of the government business of the country under the control of a minister of the crown who would be responsible for everything that was done, who would have the complete direction and control and who would have to give an accounting to the country; or to take the National railway system entirely out of the control of politics and entrust it to a president, board and a set of officers, who would be assured that they would be given a free hand and that there would be no political control at all from the government's point of view. Those are the only possible alternatives. We adopted the latter, believing that that was most in accord with public opinion, that it would give, as nothing else possible could give, a fair chance to the National railways to show whether they would pay or not. But I ask hon. members: Having done that, having parted with control, in deference to public opinion, and I might say, in accordance with the unanimous wish of this House, because there is not an hon. gentleman opposite but said that that was the policy that ought to be adopted, are we to be held responsible and the government blamed for all the expenditures, all the debts, all the difficulties that arise in connection with the
2&12	COMMONS
The Budget-Mr. Mackenzie King
National Railways? If we are to have responsibility, then we must have control; but if we have not control, we cannot be held responsible at the same time for the methods or consequences of administration.
I think the country is pretty well satisfied, despite whatever my right hon. friend may say about Sir Henry Thornton or the gentlemen who surround him, that Sir Henry Thornton was the ablest executive it would have been possible to find anywhere. If the roads can be made to pay at all, they can be made to pay better under his direction and guiding genius than under the direction and guiding genius of any other person these gentlemen can name. The government will take responsibility for the appointment of Sir Henry Thornton. That was our responsibility. We took our time; we made inquiries in as many directions as possible; we moved cautiously; We considered different railway executives and when we had come to the conclusion that we had found the one man that we really believed possessed the qualities to make the National system a success, if it could be made a success, we took the responsibility of offering him the appointment. If he had failed, ours would1 have been the responsibility for the poor executive we had chosen. In the first talk I had with Sir Henry Thornton, I told him that the responsibility would be upon him and his officers for the running of the road; that there would be no interference in the nature of political control with them so far as it was possible for me or any of my colleagues to prevent it, that they would have a free hand. Sir Henry Thornton was equally frank in saying that he would not undertake the responsibility of administering a system as vast as that on any other basis.
Having parted with and given to Sir Henry Thornton that right of control, and the country having endorsed that proceeding, is it right to say that this government must bring into its public accounts to-day the whole accounts of the Canadian National system when such a course has never been adopted before at any time and when sudh a procedure would serve only to create confusion? The Acting Minister of Finance (Mr. Robb) never for one minute claimed that the surplus he spoke of or the figures he gave to the House related to other than ordinary government business as is so understood. He made it perfectly clear to the House that there was to be considered by this parliament at this time the ordinary government business; that there was the railway business also to be considered

but at the appropriate time. If we understand that there can be no room for difference between us.	I agree with the
view that every dollar of public expenditure that the railways incur is an expenditure of which account should be taken in estimating the finances of the country. But there is this vast difference between the railway and the ordinary business of government. The railway is in the nature of an industrial enterprise, conducted from a financial .point of view for the purpose of profit or gain. The business of the government is not of the same character. The National railways are an industrial corporation, taken in hand by the state for a short time or for a longer period, as time may disclose, but this administration is a wholly different kind of business from the administration of the affairs of a country. I think hon. members will agree with that; I am sure the country will. This financing as done in calendar years, ours in fiscal years ending with March 31. From now on, so far as my discussion of the matter is concerned, I shall keep to the line which the Acting Minister of Finance adopted, which the officials of his department advised him to adopt, which hon. gentlemen1 opposite adopted when in office, and which will have to be followed in future if we are to avoid the sort of confusion which has been thrown into the debate to-day by the speech of the leader of the opposition wherever we fail to keep separate the ordinary business of the country from the finances of the railway system.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


William Lyon Mackenzie King: Mr. Speaker,
before recess I was endeavouring to make clear that the government in the presentation of its financial statement to the House had no desire other than to give to the House and to the country the fullest information on the financial situation, and that we were following in our budget presentation this year and last year, the methods followed in previous years by this administration and by previous administrations. I was pointing out also that we felt it would not be in the interests of the government services, in the interests of the railways, of the public, or of parliament, to occasion confusion by changing these methods in such a way as to bring all the railway business into the discussion of the fiscal questions involved in the presentation and consideration of the budget address. I want to

The Budget-Mr. Mackenzie King
repeat that in what I have to say to-night about the finances, answering my right hon. friend, I do not intend to take account of railway finances at all except to refer to the expenditures made during the time we have been in office as compared with those made under the administration of my right hon. friend and his party. There has been no desire, in the presentation of the financial statement, in any way to mislead or deceive the country. The government wants the country to understand that it is keeping the whole railway situation separate and distinct from the general finances. We are prepared to admit all that the committee that has been specially appointed to look into the railway situation find to be the deficit of the railways year by year after having had an opportunity of examining expert witnesses and getting all the facts. We have no desire to conceal anything. Our policy with respect to the National railways is to give government ownership a fair chance-as fair a chance as it is possible to give it in the face of the tremendous handicaps that the National system has fallen heir to through the manner in which it has come into being. In other words, this bankrupt system was taken over by our predecessors and it has to be carried on by us; I doubt very much whether government ownership is getting or can possibly get a fair trial under an inheritance of that kind. However, it is in no way the fault of this administration that the inheritance is what it is. We are responsible for taking circumstances as we find them and doing the best we can to give the railways every possible chance. That was our policy as enunciated when the government came into office; it was stated as our policy when we made our appeal to the people, and it is the policy which we intend to follow in dealing with these railway matters. We do not intend to confuse the railway situation with the other business of the country, that is to say the ordinary business of government.
As I have pointed out, the criticism of the opposition against the government has been, first of all. as to the method in which the public accounts have been presented. I think I have made it very clear that there has 'been no alteration in the method of presenting the accounts. There was the further charge, or insinuation, if it was not a charge, that the Acting Minister of Finance had presented his figures in a way that was different from the method ordinarily followed. I wish again to assert that there has been no change in that particular. The method followed by the minister, as must be apparent to anyone
who will give the matter careful study, is on all-fours with the method always followed by finance ministers in presenting their financial statements to the House. The custom is this: The Finance Minister first of all states what his total revenues are. He deals with the preceding year, then he deals with the year which he is presenting 'his estimates. In dealing with the preceding year he states what his revenues have been; then he goes into the matter of ordinary expenditure. He sets out the ordinary expenditures, then certain outlays on capital account, then outlays on special account. These are presented as a first statement, set off against the revenues. In addition, he presents another statement of indirect liabilities which are a charge upon the public debt of the country which go to maJre up the total net consolidated public debt. These figures include cash advances made by the government to railways, loans or cash to such institutions as harbour commissions, payments on account of the merchant marine-in other words, services that are not regarded as part of the ordinary services of the government, but involving advances which, nevertheless, constitute liabilities and which have to be taken into account in estimating the net consolidated public debt. Now, that is exactly what my hon. friend has done; in all particulars he has presented his statement in the usual way. Then, he has said there are in addition, the railway finances to be taken into account.
The right hon. leader of the opposition insinuated, if he did not directly charge it, that the Acting Minister of Finance, in bringing down the budget before we had entered upon the new fiscal year, had some ulterior motive in view. My right hon. friend sought to leave the impression that this should not have been done; that he was surprised at the precipitate manner in which the government had brought on the budget; and the inference thrown out was that the Acting Minister of Finance for reasons best known to himself wished to have the budget over before the figures of the year were complete. Well, I want to tell my right hon. friend that in presenting his budget the Acting Minister of Finance was careful in every particular to underestimate the revenue of the country and to overestimate the expenditure. Had he waited till the fiscal year was ended, he would have been in a position, as I am to-, night, to present a much more favourable statement to the House of Commons.
Before giving to the House the figures, let me correct the false impression my right hon. friend sought to create as to the method of
2644	COMMONS
The Budget-Mr. Mackenzie King
procedure and the time at which the budget should be brought in. My right hon. friend knows very well that the [DOT] proper thing to do is, if possible, to bring the budget in and have it discussed before the old fiscal year is over and the new fiscal year to which it also relates begins. Our fiscal year for many years ended on June 30th, not on March 31st, as it does at the present time. It was in 1906 that the change was made to March 31st, and from 1890 down to 1906, with the exception of the one year, 1905, the budget was brought into this House before the expiration of the fiscal year on every occasion. Remembering that the fiscal year from 1890 to 1906 ended on June 30, the budget on one occasion during that period was brought down in January, once in February, six times in March, three times in April, three times in May, and twice in June before the month was out. After 1906 the budget was brought down before the end of the fiscal year in 1907, 1908, 1910, 1911, 1912, 1915 and in 1916. In fact, it is only of very recent years that it has been as late in coming down as we appear to have witnessed it here. In 1919 it was brought down on June 5, very late; in 1920, it was brought down on May 18, also late, the business of the country being somewhat delayed as a consequence. In 1921, 1922, and 1923 it was brought down in May. Last year it was brought down on April 10, and this year it was brought down on March 24.
The government, if anything, is entitled to credit for having endeavoured to expedite the business of the House by bringing the budget in at a much earlier stage. Indeed, if it had not been, as I pointed out this afternoon, for the manner in which debates were protracted before the budget was brought in, the government was ready a fortnight before, as I stated to the House at the time, to present the budget, and the budget making allowance for a period of nearly a month for the purpose of its budget debate, might well have been out of the way before the Easter recess and we would then have been free after the Easter recess to get along with the other important measures to be dealt with by the House.
Hon. gentlemen opposite are making inquiries from time to time as to when certain particular measures are going to be introduced. How is it possible for the government to say what it is going to be possible to do this session when we are confronted with the kind of protracted discussion that we have met with in the last two months? I will have something further to say about that before the debate concludes, but I just wish to make

plain to hon. gentlemen opposite that the government has been ready to proceed with its business expeditiously, has had its measures in readiness and has been awaiting an opportunity to get them before the House for discussion at as early a date as possible. If some measures fail of discussion the fault will not be with the government, but with the circumstances that we have been unduly hampered as all hon members know, in the manner in which I have described this afternoon.
Now let me give the figures of my hon. friend the Acting Minister of Finance. He presented his budget on March 24th, and today is April 30th. The fiscal year having ended on March 31st it is now possible to give with greater accuracy just exactly what the revenues and the expenditures are likely to be for the past year. My hon. friend the Acting Minister of Finance gave as his estimate for ordinary revenue $344,000,000. Now the figures which I shall give at the present time I am assured are still an underestimate; they are still erring, so to speak, on the safe side, so that when the final statement is given, when all the revenues are in, they may be expected to run beyond the figures which I now give. The latest estimate is that the ordinary revenue will be not $344,000,000, but $344,700,000.
Now as to the expenses of the government. My hon. friend has considerably over-estimated here. He gave as an estimate for government services $342,177,000. As a matter of fact, the expenses for government services will not exceed $339,884,000.
The surplus which he estimated on government services, and I ask hon. members to note that he laid no claim to this being a surplus on the score of the net consolidated debt, it being stated that it was a surplus only on the ordinary business of the government, was $1,823,000. The latest estimate indicates that there will be a surplus on government services of revenue over expenditure of $4,816,000, or an increase above what my hon. friend the Acting Minister of Finance gave the House of $2,993,000.
Now of other receipts of which my hon. friend made no mention, namely, receipts by way of special revenue, a total of $725,000 has come into the treasury.
Other expenses-this is the part that goes to make up the total debt-my hon. friend estimated would total $19,527,000. In that he included the cash advances that would be made to the railways. As a matter of fact, these other expenses, instead of totalling $19,527,000 will probably not total $11,602,000; in other words, my hon. friend over-

The Budget-Mr. Mackenzie King
estimated expenses there to the extent of $7,925,000. In statistical form the figures are as follows:
Estimate Fiscal Year 1924-25
	Budget	Latest
Item	Estimate	Estimate
	March 24	April 30
Ordinary Revenue	
Expenditure-Government	$344,000,000	$344,700,000Services	342,177,000	339,884.000Surplus, Government Ser-	vices	1,823,000	4,816,000Other receipts: Total Special Revenue..	725,000Other Expenditures, total.	19,527,000	11,602,000Summary	Increase of surplus, government services,	over budget estimate.. ..	$2,993,000Special revenue not previously taken into	account	725,000Reduction effected in "other expenditures",	previously over-estimated.	7,925,000Total savings over budget estimate	
$11,643,000Increase in public debt estimated in budget $13,703,000 Deduct savings over budget estimate.. ..	11,643,000Increase net consolidated public debt, according to the latest estimate	
$ 2,059,000
These figures disclose that the increase in the net consolidated public debt of Canada for the year 1924-25, made up as the net consolidated debt of Canada has been made up from the days of confederation down to the present time, will not exceed $2,059,000, and this in the year following the budget in which the government made the large reductions which it did in the customs tariff, removed a large proportion of the sales tax, and relieved the people of this country from a very considerable tax burden.
Now what have my hon. friends opposite to offer? They have criticized our method of financing; what have they to offer in place of it? The ex-Minister of Finance (Sir Henry Drayton) in his amendment says we ought to reduce the sales tax and other levies. The hon. member for Vancouver Centre (Mr. Stevens) said that we ought to reduce the income tax, and he was also a member of the previous administration, a former minister of the crown. Then the ex-Minister of Finance (Sir Henry Drayton) made another statement. He said that the $700,000,0(Xbodd worth of imports into this country should never have come in, that we should have manufactured all the things represented by those imports at home. My right hon. friend the leader of the opposition says that his remedy is " protection, protection, more protection; put up the tariff" and his former
Minister of Finance says that to the extent of $700,000,000 the goods that are coming in and that yield a revenue should be kept out. The government, in the opinion of my hon. friends opposite, ought to lower the sales tax, lower the income tax, and give up customs duties, and still carry on the business of this country, two-thirds of which is in the nature of uncontrollable expenditure, two-thirds of which is in the nature of money which has to be collected by the government, acting more or less as a collecting agency, to pay the interest on the public debt, to pay for pensions, to pay bondholders, to pay subsidies to the provinces, and to meet different items over which the government has no control whatever. It is easy for hon. gentlemen opposite to talk about reducing taxation all along the line, but you cannot reduce taxation all along the line in this general fashion and at the same time carry on the government of Canada. Conditions in this country are different from what they have been at any preceding period in the country's history; and sources of revenue are required without which we might possibly be able to get along were it not for the conditions resulting from the war.
Now may I come to the suggestion which the ex-Minister of Finance makes in his amendment, and which the right hon. leader of the opposition says affords common ground on which both the members of the Progressive party and his own followers can vote against the government. I will read the amendment as it has been moved:
Moved by Sir Henry Drayton, seconded by Mr. Baxter:
Conditions in Canada urgently demand reductions of taxation, especially of the sales tax and other levies which have been increased by the present government, and the House regrets that the financial statements now presented show no evidence of the economy necessary to make such reductions possible but rather disclose an alarming increase in the public debt.
An examination of thalt amendment will disclose that for the most part it is in the nature of mere generalities and platitudes, intended, as the right hon. leader of the opposition frankly admitted this afternoon, to Tarry the support of both sections of what he speaks of as the opposition, and that for the rest, it contains statements that are not only misleading but which are untrue. It refers to "an alarming increase in the public debt." Now the increase in the public debt this year, as I mentioned a moment or two ago, will not exceed between two and three million dollars. That is the alarming increase that my hon. friend speaks of, and that in the light of the fact that the government has saved to the
2646	COMMONS
The Budget-Mr. Mackenzie King
country some $30,000,000 odd of taxation, as the result of the tariff changes made last year. I think I shall be able to show that in other particulars the statements set forth in this amendment do not deserve the support of hon. gentlemen, at any rate those of the Progressive party.
In the first place what do the statements as brought down show? My right hon. friend this afternoon said he would review the government's situation during the last three years. Well, I will take the last three years and I will be a little fairer than he is. I will compare our record of the last three years, not with the previous three years, but with the previous two years, and I state to the House that the record shows that with respect to financial matters there has been an improvement, first of all, on ordinary business account; in the second place, in respect to the railway accounts, and in the third place, with respect to the combined debt including all the accounts that can be possibly brought together. In all these particulars this government's record of three years of expenditure will show less in the way of expenditure, less in the way of public debt, than does the record of two years of the time when my right hon. friend the leader of the opposition was for the most part leading the government. What is the first fact in regard to ordinary business from the exact figures? The truth is that the previous administration in two years added $174,000,000 to the public debt. That is what hon. gentlemen opposite did in the two years 1920-21 and 1921-22. Hon. gentlemen will Observe that so far as the period of the war was concerned it ran from 1914 to 1918. Then there was the period of demobilization; I am allowing two years for that, 1918-19 and 191920. So that I give only the period of 192021 and 1921-22 for hon. gentlemen opposite. In those two years they added, as I have said, to the public debt of this country, taking the figures of the debt at the beginning of the period I have mentioned in comparison with them at its expiration, the sum of $174,000,000.


Mr. GRAHAM:: That does not include the railways. '


William Lyon Mackenzie King: No it includes the ordinary business. Now what is the position of this government with regard to the public debt. Instead1 of adding $174,000,000 to the public debt in two years, the figures show that in three years this government has actually reduced the public debt by $3,000,000. In other words the public debt of this country to-day is $3,000,000 less than it was when this administration took office. Now may I give

the actual figures. Taking the two year period, on March 31, 1920, the public debt stood at 2.248 millions. On March 31, 1921, it was 2,340 millions. On March 31, 1922, it stood at 2,422 millions, a net increase in the two fiscal years ended March 31, 1922 of $174,000,000. Now the consolidated net public debt for the three year period that this government has been in office was as follows: For the year 1922-23 it stood at 2,453 millions; in
1923-	24, it stood at 2,417 millions; and in
1924-	25, it stood at 2,419 millions, or a net decrease in the three years since 1922 of $3,000,000. This is what the ex-Minister of Finance calls "an alarming increase in the public debt". I want again to make it clear that the government is not trying to make the claim that the net public debt of this country in the three years we have been in office has been reduced $3,000,000 taking into account the deficits of the railway. I say it has been decreased by that amount leaving out of account the railway situation which we will discuss by itself and for which we will take our responsibility. Let me say also that the above showing has been made in spite of the enormous burden that was left to us by our predecessors when we came into office. Hon. gentlemen opposite know there were many obligations entered into by them which had been left unfulfilled and which we had to meet, obligations that should never have been incurred but which we found on the doorstep when we came into office.
Then what is the position in regard to the railways? I am going to quote from the figures prepared by the hon. member for St. Lawrence-St. George (Mr. Marler). I do not think any hon. member of the House will feel that the hon. member for St. Lawrence-St. George has tried to underestimate the railway situation and the seriousness of it. I think he has estimated it accurately, as far as I have been able to check up the figures. I have gone to considerable trouble with regard to all the figures I have given to have them verified by officers of the Finance department and the statistical department of the government; and in giving the figures I am presenting to the House to-night I am speaking with the full sense of responsibility which I have in having to speak in the name of the government. I think my hon. friend from St. Lawrence-St. George presented a correct point of view when he said; let us, in estimating the railway business, find what is the amount of new money put into the railways, the amount of money put in by hon. members opposite and new money put in by hon.. members on

The Budget-Mr. Mackenzie King
this side of the House. What are the figures? I will give the three-year period first, but will still hold to what I have said that in three years this government has not put in as much new money as the hon. gentlemen opposite did in two, viz.: 1920 and 1921. Their advances of new money to the railways were as follows:
1919-	20	
$106,000,0001920-	21	
144.000,0001921-	22	
105,000,000


NON-TAXABLE DOMINION OF CANADA BONDS
[Stage Direction]
Domestic lo per cent
1915-	25	
51916-	31	
51917-	37	
51917-22	
5i1917-27	
5i1917-	37	1918-	23	
5£1918-33	
5*OutstandingOriginal issue	Dec. 1, 1924$ 100,000,000	$ 42,014,500100,706,300	52,931,600172,926,800 230,737,950	90,166,90069,051,900	63.437,250246,366,450	236,298,850172,471,150 446,663,800	446,658,800*1,544,924,350	$931,507,900Balance	converted	to	later	issues.Balance	converted	to	later	issues.Balance	converted	to	later	issues.
Redeemed.
Balance	converted	to	later	issues.Balance	converted	to	later	issues.
Redeemed.
The interest charges per annum at the above-mentioned rates of interest on the $931,507,900 of non-taxable bonds which were outstanding on December 31, 1924, amount to $50,307,369.50.
George Perry Graham: That would pretty nearly run the railways.


William Lyon Mackenzie King: Those are the
figures at which hon. gentlemen financed

The Budget-Mr. Mackenzie King
these bonds. I have sought to have an estimate made of how much the country loses in income tax on them. As I say, we have to meet the interest charges annually, and yet hon. gentlemen who are responsible for the issue of these bonds say that the conditions of Canada demand a reduction of taxation. Let us see how much income tax is lost on these tax exempt bonds? My right hon. friend said the other day that he did not think it was possible for an estimate to be formed showing what would be lost in that way. That is not the opinion of the officers of the Finance department who are accustomed to dealing with these matters and who think they can form a reasonable estimate, and I have the following as a basis which more or less errs on the safe side. The rate of income tax on $1,000, when the total income of the individual is over $100,000, but does not exceed the next division is $630. When the total income is over $200,000, but does not exceed the next division, the tax is $714. When the total income is over $500,000, the tax is $745.50. When the total income is over $1,000,000, the tax is $766.50. If the average income of holders of tax paid bonds exceeds $100,000,-and that is regarded as a fair estimate-the loss of revenue during the calendar year, 1925, would amount to $18,487,958. This is estimated by onc-half being held by individuals, totalling $15,846,821, and one-half held by companies, totalling $2,641,137, making a total of $18,487,958. I am prepared to say that this statement may not be accurate. It is merely an estimate, but it is an estimate which financial men of experience believe to be a fair and reasonable one. It helps to show one more of the difficulties that the government faces in having to meet the financial situation when called upon to reduce taxation.
Not only did the late government finance the entire cost of the war without levying a dollar of taxation for the purpose; not only did they issue these tax exempt bonds on which there is an annual interest charge of $50,000,000 to be paid and which is costing the country in loss of income tax some $18,000,000 odd to which I have referred; but if one looks at the method of financing of hon. gentlemen opposite, he will find that the method they adopted both during and especially since the war was to issue long term loans at high rates of interest, unnecessarily long terms and unnecessarily high rates of interest. These loans cannot be called in. They fall due at a particular time and they carry till then these high rates of interest. Let me give to the House the figures with respect to some of these loans. I will not take all of them, but I will ask the House to pay particular attention 169
to the last loan of hon. gentlemen opposite in comparison with the first loan made by the present administration. I shall not discuss loans issued during the war period, interest rates on which were high; but I shall come at once to the period subsequent to the war, subsequent to demobilization, to the time when my right hon. friend was Prime Minister of this country and when the hon. member for West York the ex-Minister of Finance (Sir Henry Drayton), who has presented this amendment to the House, was handling the finances of Canada. In October, 1920, my right hon. friend's government floated a guaranteed loan of $25,000,000 running for twenty years. The rate of interest was 7 per cent and the annual interest charge is $1,750,000. This issue sold for 96.20. In December of the same year the same right hon. gentleman floated another guaranteed loan of $25,000,000. The rate in this case was also 7 per cent and the annual interest charge is $1,750,000. This loan sold for 94.05. In February, 1924, the present administration floated a thirty-year guaranteed loan of $50,000,000. This loan bears interest, not at 7 per cent, but at 5 per cent, and the annual interest charge is $2,500,000. This loan sold at 97.81. Thus the interest charges which we are at present paying and will continue to pay until 1940 on $50,000,000 issued by hon. gentlemen opposite are exactly $1,000,000 greater than the interest charges on a like amount issued in 1924 by the present government. If we admit that interest rates in the meantime have declined, the issuing of long-term bonds when the interest rate was at its peak of 7 per cent, amounts to a glaring instance of financial incapacity.


Sir HENRY DRAYTON:: Oh, oh.


William Lyon Mackenzie King: My hon.
friend who laughs so heartily takes this as a light matter, but this was the money of the country, not his own. Again let me compare the last loan of the late administration with the first loan of the present government. In July, 1921, the ex-Minister of Finance floated a guaranteed loan of $25,000,000. This loan runs for twenty-five years and bears interest at 6i per cent, giving an annual interest charge of $1,625,000. This issue sold for 92.05. In March, 1922, only a few months later, the present government floated its first guaranteed loan of $11,000,000. This loan ran for three years and bore interest at 5 per cent, giving an annual interest charge of $550,000. This loan sold for 99.03. I might add that during the present year the Acting Minister of Finance

2650	COMMONS
The Budget-Mr. Mackenzie King
has refunded some of the loans that fell due within the past few months. By has financing, going into the market himself at this time, he has been able to effect a saving of $2,643,264.92 in the annual interest charges. That is the result of the 'better financing which he has effected this year. Yet hon. gentlemen of the Progressive party and other hon. members of the House are asked to support this amendment and condemn the present government on the score of the manner in which it has ad-ministred the finances of the country.
Take another item which helps to account for the fact that it is impossible to reduce the taxation which we have to shoulder in this country. Hon. gentlemen opposite wthen in office paid $10,000,000 for the stock of the Canadian Northern, which, according to the ex-Minister of Finance (Sir Henry Drayton) himself, in a report, was not worth a five cent piece and for which not a dollar of money was ever paid. The accrued interest on this amount capitalized every year at an average rate of 5' per cent would come to $3,808,167. Were the present government not obliged to pay these vast sums, we could soon bring down the rent.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: 
CIVIL GOVERNMENT ESTIMATE, 1925-26
[Stage Direction]
Compared with Estimates of 1924-25
Department	Increase Decrease
$ cts.
Governor General's Secretary's Office-
Salaries, including Governor General's Secretary additional to salary authorized by R.S.,
c. 4, $3,600	 875 00
Contingencies	
Agriculture-
Salaries	
Contingencies	
Auditor General's Office-
Salaries, including Auditor General at $10,000 additional
to 7-8 Edward VII, chap. 6.. Contingencies	
Civil Service Commission-	33,151 30Contingencies	
Customs and Excise- Salaries	
Contingencies	
External Affairs-	Salaries	4,775 00Contingencies	
Finance-	Salaries	Contingencies	
Inspector General of Banks, salaries and contingencies.. Health-	Salaries	
Contingencies	2,752 50
$ cts.
1,730 00
24,500 00
3,160 00 10,000 00
4,500 00
27,505 00 10,000 00

[Stage Direction]
Compared with Estimates of 1924-25
Department	Increase Decrease
High Commissioner's Office-
Salaries	
Contingencies	
Immigration and Colonization
Salaries	
Contingencies	
Indian Affairs-
Salaries	
Contingencies	
Insurance-
Sallaries	 4,800 00
Contingencies	
Interior-
Salaries	
Contingencies	
Justice-
Salaries	
Contingencies, including $2,000 for the Solicitor General's
Office	
Labour-
Salaries	
Contingencies	
Marine and Fisheries-
Salaries	
Contingencies	
Mines-
Salaries	
Contingencies	
National Defence-
Salaries	
Contingencies	
Patent and Copyright-
Salaries	
Contingencies	
Post Office-
Salaries including amount required to pay allowance to Office Appliance Operators, Grade 2 operating Hollerith card punching machines, in accordance with provisions of Order in Council P.C. 156/2521, dated
24th December,	1923	
34,211	00Contingencies	
50,000	00
Privy Council-
Salaries	 945	00
Contingencies	
Public Archives-
Salaries	
Contingencies	 1,000	00
Public Printing and Stationery-
Salaries, including $500 to Fred Cook as Secretary to the Government Printing and
Stationery Committee	 1,820	00
Contingencies	
Public Works-
Salaries	
Contingencies	
Railways and Canals-
Salaries	 2,497	30
Contingencies	 [DOT]
Royal Canadian Mounted Police-
Salaries	 520	00
Contingencies	
Secretary of State-
Salaries	
Contingencies	
$ cts. 540 00
$ cts.
20,637 00 465 00
1,000 00
63,867 75 5,000 00
743 33
2,785 00
12,280 00
3,500 00
18,757 00
1,560 00 2,000 00
7,505 00
18,665 00
600 00
9,030 00 3,500 00

The Budget-Mr, Mackenzie King

[Stage Direction]
Compared with Estimates of 1924-25
Department	Increase	Decrease
	$ cts.	$ cts.
Soldiers' Civil Re-establishment- Salaries	 Trade and Commerce-		7,320 00
Salaries			38 32
Contingencies	 Appropriation not required for		2,000 00
1925-26			45,755 00
[Stage Direction]
It will be seen, that the civil government estimates show a decrease this year over those of last year of $170,516.30; and these estimates take into aiocpumt the amount that has to be voted for statutory increases in the civil service. How does it come about that notwithstanding the statutory increases we have been able to effect a reduction of over $170,000? It has been ;by continuing the process of reducing the numbers in the permanent service. In that regard my hon. friends say there has been no evidence of economy. What are the facts with relgarld to the public service during the last three or four years? The following figures are interesting in that connection:

[Stage Direction]
Civil Service: Jan. 1922... Jan. 1924...
Personnel	Reduction	Expenditure	Reduction41,094 38,062	(Month of January) $ 4,985,613 4,746,694 (being at rate of ap lions per	$ 238,919 rrox. 2f mil->rar).3,032	
There is indicated in the estimates for 1925-26 a further reduction in personnel of Civil Service of abou 100 during 1924-25.
National Defence:	Personnel	Reduction	Expenditure	Reduction4,896 4, ess	(Month of January) $ 511,176 1,52,979 (being at rate o: f millions per y	$ 58,197 approx, ear).Jan.1925	663	Royal Canadian Mounted Police: Dec. 31, 1921	Personnel	Reduction	Expenditure	Reduction1,676 986	(Fiscal Year) 1921-22 * 3,527,570 1924-25 * 1,999,872	$ 1,527,698Dec. 31, 1924	690	
In other words, there has been during the time the present government has been m office a net reduction in the three services- civil government, National Defence, and the Royal Canadian Mounted Police-of at least 4.485 persons, certainly approximately 5,000 and a saving of at least $5,000,000 annually in expenditure on salaries.
May I take a few minutes to make one further comparison? The ex-Minister of Finance (Sir Henry Drayton) is the one who speaks to us about economy, about reduction of taxation. I want to compare for a moment his financing with that of the present Acting Minister of Finance. The following table makes an interesting comparison in that regard:

[Stage Direction]
Year	Total Revenue Receipts	Accrued from Taxation	Per Head of Population$	$	$ cts.1920-21	434,386,573	369,010,605	41 991924-25 (estimate)	344,000,000 (approx.)	294,000,000	31 38
In other words, the per capita pressure of taxation is three-fourths less this last year than it was under the preceding administration or if I may put the matter in another way, for every dollar the average Canadian paid in taxation in 1921, when my hon. friend was in
2654	COMMONS
The Budget-Mr. Mackenzie King
office, he is paying to-day seventy-five cents, or to express it in dollars, for every $4 per capita that was being paid when my hon. friend was in office only four or five years ago, to-day we have the taxation down to $3 per person. Or, to put it in still another way, the present government is collecting in 1925 about $75,000,000 less in taxation than the hon. ex-Mdnister of Finance collected in 1921.
Now let me make a further comparison, because I want hon. members to see wherein it is difficult for any government to attempt to go much further in the reduction of taxes under existing circumstances.
We have to meet out of our taxation these special obligations that I have referred to as being in the nature of uncontrollable expenditure, the interest on the war debt, provincial subsidies, part of the railway deficits and the like, all of which are met out of the $294,000,000 revenue raised by taxation. We have left after we have imet this uncontrollable expenditure about $99,000,000 to carry on the regular business of the country or between $10 and $11 per bead of population. Comparing that with 'the last year of Sir Wilfrid Laurier's administration this $99,000,000 of taxation has to do the work which in 1911 required a net tax revenue of about $81,000,000. The population having increased since then, it means that to-day there is actually a lower per capita cost in dollars, in spite of a rise of some 50 per cent in commodities and service. Or take the last pre-war year of Sir Robert Borden, 1913-1914. In that, year $127,000,000 was collected. From this must be deducted provincial subsidies amounting to $11,000,000, leaving taxation for Dominion purposes of $116,000,000, as compared with $80,000,000 odd in the last year of Sir Wilfrid Laurier's administration, or an increase of more than 43 per cent in the tax burden of the Canadian people in the first three years of the Conservative administration.
Comparing Sir Robert Borden's last year with the present administration, $116,000,000 tax revenue was required in 1913-1914 to do the work which our $99,000,000 of taxation revenue does to-day, despite the increase in the cost of commodities and services.
The hon. member for West York in his amendment blames us for the addition of $13,000,000 to the public debt this year. As a matter of fact, as I have already shown, there has been an addition of only $2,000,000. Compare that with what he added. We have added $2,000,000 to the debt in 1925, and the hon. member for West York, after collecting $75,000,000 more in taxes than we did, added

in 1921, $92,000,000 more to the debt than we did; in other words there has been a total improvement in the finances in this one fiscal year, over that year of his administration of $165,000,000.
I am sorry to take up the time of the House with these figures, but I think they are necessary in order to show clearly the position of the present administration in its endeavour to deal with debt, with taxation and with matters of economy, and I submit that when one considers the handicaps under which we have laboured1 since we came into office, the economic conditions of the country and the unsettled condition of the world, and the vast obligations we have been called upon to meet, this is as good a showing as any administration under like circumstances could possibly have made.
What I have said with respect to these matters of public debt, taxation and economy in referring to the amendment of my hon. friend from West York are equally applicable to what in part my hon. friend the leader of the Progressives (Mr. Forke) said in the amendment which he introduced into the House, but which under the rules of the House was not permitted to be moved. I hope that my hon. friend will feel, having before him at the present time figures which he had not in his possession at the time his amendment was drafted, that perhaps the government is entitled to more consideration than was given it in the form of his original draft. He referred to one other matter, which is a matter of great importance, and that is the question of the cost of living. I would like to have gone into that, but I have spoken at considerable length, and I think I will reserve for another time the remarks that I have to make in that connection. But I would like to point this out to my hon. friend and hon. gentlemen opposite, that the cost of living in Canada has been considerably reduced since the present administration took office. The cost of living has been reduced, first of all through the reduction of taxation to which I have just referred, a reduction which amounts to a difference in payment of taxes of $3 per head as against $4 per capita when we came into office.
The cost of living has also been materially affected for the better by the changes which were made in the tariff last year-the removal of the duties on implements of production to a very considerable extent, also the sales tax thereon which has had the effect of cheapening materially the cost of production in the basic industries, and as hon.﻿2655

The Budget-Mr. Mackenzie King
members know, whatever affects materially any of the basic industries will affect all the subsequent industrial life of the country. I might add also the changes made in the tariff in the two preceding years not only on implements of production but on many articles of daily consumption, food, clothing, and the like affecting the homes of countless numbers in our land.
The cost of living has also been affected by the reductions we have made in the income tax by means of increased exemptions in the case of families, first of all in our raising the exemption to $300 per child and then later increasing that amount to $500. thus making a considerable saving to a large number of families.
In addition to that, the sales tax besides being removed from the implements of production as,mentioned, has been completely taken off a large number of commodities, commodities that enter into the daily needs of a large number of families. We have sacrificed a considerable amount of income in that regard. True, we found a certain rate of sales tax. We added to that for a time, and reduced it in part again, but we also made perfectly free large numbers of articles that enter into the ordinary consumption of the great body of the people.
In addition to that we removed the duties from the coverings usedi exclusively for covering goods not subject ito sales tax, these include cheese boxes, butter boxes, fruit .packages and the like and constitute a very material reduction which also has its effect upon the cost of living. We also have given a 10 per cent discount upon preference rates where goods come into Canada via Canadian ports.
I would further submit that the great development that has taken .place in trade under the present administration has had the effect [DOT]of giving the average citizen more in the way of purchasing power and a man's cost of living has to be estimated, as it were, in terms of two quantities, the price of the things he buys, and the money he has to purchase them with, and if trade is more extensive as it certainly is, I submit that the lot of the average man in this country through increase of purchasing power has to that extent improved.
I would like to give just one brief summary in respect to the cost of living which has been carefully .prepared by the aid of statisticians in the government service, and which will help to indicate what has taken place. In September, 1921-which I will compare with September, 1924 as well as March. 1925, so that it will not be thought that I am choosing particular months, and I take September, 1921, because it was the time my right hon. friend was getting ready to make his appeal to the country-in September, 1921, the cost of living as based upon a family budget of foods, fuel, lighting and rent, was 159.3 per cent of what it was in 1913. In September, 1924, the index number had fallen to 147.2, and in March of 1925 it was 148.4, or a decline of about 11 points since September 1921. Foods, which had been at 161.1 in September of 1921, were 140.4 in September, 1924 and 142.6 in March, 1925. All the foods in the budget except mutton, rice, tea and coffee were lower in September, 1924 than in September, 1921.
Again, the retail index number of fuel and lighting, which includes coal, wood and coal oil, was 189.0 in September, 1921, 175.9 in September, 1924 and 175.4 in March, 1925. While rent shows little change since 1921, the retail price of clothing has fallen from 167 in September of 1921 to 155 in March, 1925.
These index numbers, however, do not tell the whole story. They do not include some of the most notable of the achievements of the present government in the reduction of taxation. Thus, for example, they dlo not include reductions in the rate of income tax. Yet, to take a very ordinary case, the married man with an average family of three children .and an income of $3,500 a year, who in 1921 paid $36 in income tax to the government of that day, is to-day entirely exempt therefrom.
There is no doubt therefore that the position of the average man and his ability to make ends meet has considerably improved during the years of the present administration. I should like to supplement my remarks in this connection with a table which I have, giving in graphic form the figures I have just quoted: Index Numbers of a Family Budget of Staple Foods, Fud and Lighting and Rent in Sixty Cities in Canada
1913 = 100
Sept. 1921 Sept. 1924 March 1925
Foods	
181.1	140.1	142.6Fuel and	lighting	189.0	175.9	175.4Rent	
144.6	146.7	146.5Total ..	..	159.3	147.2	148.4
All foods included in the budget were lower in September 1924 as compared with September 1921, except mutton, rice, tea and coffee.
A calculation for clothing places the index for September 1921 at 167 and for September 1924 at 155.
Now, Mr. Speaker, it had been my intention to-night not to debate the question of finance but to discuss the question of the tariff. I thought that this debate would be largely concerned with matters of fiscal policy, but as
2656	COMMONS
The Budget

Mr. Mackenzie King
the right hon. leader of the opposition has not discussed those matters, has run away from all tariff discussion, I shall defer until some other time what I had intended to say in that regard.
There is one point however, which I wish to make perfectly clear to hon. members of the House because it has been one that has been differently viewed in the course of this debate, and that is with respect to the reference contained in the speech of the Acting Minister of Finance to the intention of the government to have an advisory board to advise the Minister of Finance on taxation whether in the form of customs duties, or excise duties, income tax or in other forms. Hon. gentlemen of the Conservative party advocate a tariff commission. They purpose to appoint independently certain gentlemen who will be given power to make examinations on their own account and make recommendations to the government. Should the government in power be that of my right hon. friend if that government were to act in accordance with the terms of his manifesto, it would not be obliged to carry out those recommendations; the commission may make recommendations but that is all there is to it in that regard. The proposal for such a body takes away from parliament altogether the settlement of the fiscal policy. Now, I submit, Mr. Speaker, that it is utterly impossible to remove from the arena of the House of Commons the settlement of the fiscal policy of the country. Parliament necessarily concerns itself amongst other things with the business of taxation and from time immemorial has exercised the right of imposing taxation. That right should never be handed over to any tribunal of men, no matter whom they may be, but should always be in the hands of the representatives of the people. Hon. gentlemen opposite talk about appointing a commission representative of manufacturers, of labour, and of some other class. I contend, Mr. Speaker, that in this House of Commons we have representatives of manufactures, we have representatives of labour, we have representatives of agriculture, we have representatives of all the classes that go to make up this country, and this is the place where the voice of the people thus represented should be heard. What the government feels is this: That in order to discuss intelligently these matters of the tariff, these complicated questions of taxation-and in view of the conditions in which this country and the rest of the world finds itself to-day, there is greater need than there ever was of expert advice and guidance,-that the Minister of Finance should have attached to his 
department experts, men of great experience, who will command the confidence of labour, of the manufacturers, of the farmer, who will be so trained that they will be able to go through the various tariff schedules and indicate the effect of existing tariffs upon industry and upon revenue, indicate what the effect of certain changes will be upon industry and upon revenue, so that when the Minister of Finance comes to the government or comes to the House with his budget he will be in a position to give the fullest and most accurate information it is possible to have with respect to the basis upon which taxation is made.
My hon. friend the leader of the Progressive party (Mr. Forke) thinks the tariff should be revised so as to bring in a larger amount of revenue. As to that I am in entire accord with him. We believe that the tariff should be used for purposes of revenue; it should not be used as my hon. friends opposite contend for purposes primarily of protection. The two things are entirely different; the two objectives are different. We join issue with hon. gentlemen opposite on this. They say we want a tariff for protection. Protection of what? Certain special industries. Then they go on enlarging, and enlarging, and enlarging, until what is the result? They want to include all the industries, and then after they are all included the costs all round will be raised by a corresponding amount. What they really want is the protection of certain special interests for the benefit of those whose capital has been invested in them. They say they want protection in the interest of labour. How is labour going to gain? Will not the wages of labour continue to be settled as they are to-day through competition in the labour market? Is there any guarantee that if two, or three, or four manufactures get special protection while capital may secure its extra monopoly profits the labour in those industries will be paid any wage other than that which competition of those available for these particular industries, may determine? Talk about protection! What about the women of this country who are not engaged in the specially favoured industries, who are nevertheless the heads of families and that to-day have to provide for needs of the household? Do they not need protection? Do not they and all other women need some protection with respect to the commodities they have to buy? What about all the younger element of the country? What about those who are in the civil service of Canada? What about those in the learned professions, what about those who go to make up the great numbers performing the clerical work of the country? What

The Budget-Mr. Mackenzie King
about all these classes? Are they not to be considered? Are you going to limit the protection to special interests in which some specially favoured happen to have capital invested on which they want to make a higher rate of profit? Our position is that if you are going to have protection then protect the people as a whole and not merely a favoured few. Have your tariff so arranged that it will help to bring in revenues to the country in a manner which will relieve taxation not add to it and thereby serve the best interests of the people at large.
That is the intention with respect to this tariff board to which I have referred. There are in the government service at the present time gentlemen who have very full and accurate statistical knowledge; some with regard to trade, some with regard to customs, some with regard to income tax and the like. That information ought to be made available to the government and to the particular member of the cabinet on whom it devolves to bring down the budget to this House. We propose by this means to get such information as we can obtain; but we propose also to supplement the clerical staff that may be used for this purpose with two or three expert advisers who will give all of their time-not part of their time, as these other gentlemen will be expected to give-to studying taxation problems, tariff schedules, schedule after schedule and the like; studying the effect, as I have said, of the existing or a proposed tariff on a particular industry, and the effect of the tariff upon revenue; the effect of depreciated and appreciated currencies and kindred topics. They will not be appointed for an indefinite time but they will be appointed for a year at a time, and the appropriation will be made by this parliament. The minister will be responsible for those whom he appoints. What we will seek to bring into our tariff discussion will be more light and less heat so that in discussing these matters we shall be able to do only what is most in the interest of the people as a whole.
Now may I conclude what I have to say by making a reference to the subject of trade. But just before I d'o, let me make this reference in case I should overlook it. It has been intimated to me by some hon. members that they would like me to state what the government is going to do with certain measures that have still to be brought forward. On that point may I say this: The government brought on this session, as I have already intimated, early in the month of February, the first week of February in fact, in the hope that we would get through business at least before the hot
weather came. We brought on the session when we did believing that it was in the interest of the country to have the public business put through with despatch. We believe the people do not want the public money wasted in lengthy discussions involving prolonged sittings of this parliament. As I intimated in the early part of my remarks this afternoon we believe there has been and is a deliberate attempt to protract the session, and in view of that fact it would be impossible as I stand here to give any assurances as to what measures can be brought down and put through at this particular session of parliament. We have some very important legislation still to introduce. There is the railway rates legislation, which is important, and which we ought to have been discussing a month ago. There is the legislation respecting the Home Bank depositors which is important. Hon. gentlemen opposite have asked me two or three times about the alternative vote. I promised last session that it would be brought down, and it will be brought down and we will proceed with it. These are measures which will take considerable time. The Grain Act has been drafted. The minister made mention earlier in the session of his intention to bring down that measure and I hope we will be able to put it through. As to some of the other measures, rural credits and the like, I am unable to speak definitely until I see how the work of the session progresses: but I want to say this, and I want to make it perfectly clear: This government does not intend to stay here through the summer months trying to carry on the business of the country'; and if for no other reason than that hon. gentlemen opposite wish us to go in two opposite directions at one and tlhe same time, or because hon. gentlemen directly opposite want to prevent by undue discussion a campaign from being brought on, I will say here and now that if for these or any other reasons the government finds it impossible to carry on the business of the country in an expeditious and in a satisfactory manner, I shall not for one minute hesitate to ask His Excellency to dissolve this parliament and give us a chance to appeal to the people. So far as the business of this country is concerned, I believe that the people of Canada have the same view that the people of Great, Britain and the people of the United States apparently have had; they want to see in power a government that will not be faced with uncertainty in its proceedings, and that will not be faced with embarrassment because it is surrounded by groups at variance with each other; they
[Stage Direction]
The Budget-Mr. Mackenzie King
want to see in power a government with a strong majority that will be able to carry on the business of the country without fear and without favour in any direction, and I can tell hon. gentlemen opposite that when the time-comes to appeal to the country, it is on these lines the appeal will be made.
I have given an outline of the manner in Which the government has endeavoured to carry on the business of the country. I have shown that, despite the obstacles we have had to contend with, the heavy legacy of public debt and other financial obligations, our majority of one, the unsettled conditions throughout the country and the world, a divided opposition, a Senate which is politically hostile to us, and embarrassments of different kinds, we have been able to make a record of which any administration might well be proud. Not only that, but I have only to give to the country the figures that I hold in my hand with respect to trade development to show how Canada has prospered during the period the present government has been in office. I shall quote these figures, and with that I shall conclude. What are the figures with respect to the trade conditions of the country?
In the fiscal year 1920-21, when hon. gentlemen opposite were in office, the trade imports exceeded the exports $30,000,000. The result was that in November, 1920, $1 of American money required an exchange of $1.20 in Canadian money. In 1921-22, for nine months of which my hon, friends were in office, the exports exceeded the imports by $6,000,000. The result was that in November 1921 one American dollar was worth $1.09 Canadian money. In January, 1922, immediately after the change of government the American dollar commanded only $1.05^ in Canadian money. In 1922-23 the exports of Canada exceeded the imports by $142,000,000. In 192324 the exports exceeded the imports by $165,000,000, and now the 30th April has come and I am able to give the House the exact figures with respect to the last fiscal year. We find the exports last year have exceeded the imports by $284,000,000, the largest favourable balance of trade that had ever been known in this country, with the possible exception of the period of the war.
Again I wish to say to hon. gentlemen opposite,-and here I speak more particularly to my friends of the Progressive party-the government has been able to accomplish this in no inconsiderable part through the cooperation which has been accorded us by hon. gentlemen belonging to the Progressive party, and in spite of the difficulties which have been put in our way by hon. gentlemen directly

opposite. We have endeavoured while seeking to carry on the economic side of the work of this country also to do another work which is perhaps even more important. We have sought to remove, as far as we were able to do it, all that there was of discord and division among the people on racial, religious or sectional grounds in different parts of the country. We have worked steadily for national unity, and hon. gentlemen have helped' us in that. Last year we made considerable changes in the tariff which I think I am right in saying benefited more than any other part of the Dominion the part of the country from which the majority of hon. members of the Progressive party come. In doing that we were not only helping hon. gentlemen opposite, but we were helping all parts of Canada. Hon. gentlemen on this side of the House stood solidly with the government in helping to bring about changes which we believed were for the good of western Canada, and whilst improving conditions from an economic standpoint would help to make for the furtherance of a spirit of national unity throughout the Dominion.
This year, as far as the tariff goes, we have thought it advisable to permit an unobstructed view of the effect of our changes of last year, so that the country will have an opportunity of seeing that they need not be alarmed with respect to tariff changes, with respect to the reduction of duties on agricultural implements or other commodities, where made after mature consideration, and in accordance with a policy that goes to make for the welfare of the country as a whole. We believe that the country is being steadily reassured, and it is for that reason among others that we have thought it inadvisable to make any change of a material character. One change we have made, continuing our policy of last year, a change designed to benefit some of the fishermen of the Atlantic and Pacific coasts engaged in a basic industry which did not come in for as full consideration as others at the last session. We have beside 'lowered the duty on bituminous coal three cents a ton. Not much has been said of that, but it gives some benefit to the consumer. The household consumers of coal use bituminous coal, they do not use slack. We have raised the duty on bituminous slack coal, and why? Well, for two or three reasons. In the first place at the time the duties were fixed it was never thought that bituminous slack coal would begin to enter into effective competition with run of mine bituminous coal, which is a product of the mines not only in the Maritime province but in Alberts well. The gov-

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eminent of the day did not- believe it would result in the customs being defrauded and in purchasers being defrauded, as has certainly been the case, because we know on account of the difference in the tariff, slack coal is being brought into this country, paying a lower rate of duty, than mixed with run of mine and sold as run of mine, with the result that the purchaser is defrauded in what he pays for and the government defrauded in duties as well. We have felt further that there is one part of our Dominion which to-day has been having a hard struggle; no one can deny that. The Maritime provinces have had and are having a hardl time. We were not without hope that our action in this particular would put new faith and comfort into the hearts and minds of the people of the Maritime provinces and for no class more than those who are engaged in the hard work of mining coal in connection with the primary industries of that part of our country. We felt this was helping on as well a great national policy of self-sufficiency in the matter of our coal supplies in this country. Those were great national reasons transcending, I believe, all other reasons. I ask my friends of the Progressive party: Are you not going to be magnanimous enough to sink any little feeling you may entertain with respect to some theoretical maximum on tariffs and stretch to our friendh in the Maritime provinces the same helping hand they stretched out to you in good faith and good fellowship last session? You have an opportunity to do so on this budget. You have an opportunity by your action on this budget to show that in your outlook you are something more than sectional; that you have a broad vision; that you are thinking first of Canada as a whole, not only of the particular constituency from which you may come. Nay, rather, may I say this in justice to your constituencies? I should feel pretty badly if I thought that any group of men and women in western Canada in the constituencies from which you come would not respond to attitude of that kind and would not rather condemn you if you failed to assume it. You have your chance on this budget and it is for you to say. I again appeal to my lion, friends. It has been from this larger point of view, from the point of view of national interest as a whole,, national economy, national well-being and national goodwill, that the government has taken the stand that it has on the tariff question at this particular session.
Let me conclude with these words. In the short time that we have been in office now
some three years or more, we have reduced the public debt. We have reduced expenditure. We have reduced the taxation of this country. We have reduced' the cost of the public service. We have reduced the cost of living. More than that, we are able to point to a vast increase in the trade of the country, reflecting improved conditions of industry, to an improvement in our credit enabling us to borrow in the worlds money markets at business rates of interest. Not only has our money been at par for some time past but if you will look at this evening's paper, you will see what I had the pleasure of reading to-night in large letters across the centre page:	"Canadian dollar quoted at a
premium." Above all this we have achieved a growing national unity. Having regard to these and other circumstances, I think the government is entitled to ask from all or at least hon. gentlemen who have promised honourable co-operation in the government's efforts to serve the country's interest a ready measure of support of the budget now before the House.
Mr. D. W. WARNER (Strathcona):: Mr. Speaker, the tariff has been emphasized more than any other phase of this debate, and so I will offer a few remarks on that first. The tariff is important, but at the same time we realize that some other subjects are also important although, perhaps, not very much has been said about them during the course of the debate. As regards the emphasis placed on the tariff, it appears to me that to my immediate right the emphasis has taken the position almost of preaching blue ruin on account of small reductions that have been made in the tariff. The people who sent me here want a lower tariff than we have at present, and I think they are quite reasonable in not expecting that reduction to be brought about all at once. At the same time they want progress made all along that line. Our friends to the right have been all the time using the United States as an example for Canada to follow. I know something about conditions there from experience and in other ways as well. The idea is held out that the prosperity in the United States has been brought about by the highly protective tariff which they have had continuously. My opinion is that the United States have become prosperous in spite of the tariff rather than on account of it. I lived there long enough to form that conclusion from experience. The statement has been made that the United States have three times as high a tariff as Canada has. It makes a difference how you undertake to figure that tariff. I
The Budget-Mr. Warner

want to read just a little from a clipping taken from the Ottawa Citizen and I think it is a pretty good authority under the circumstances under which it was taken:
Early in the session, Mr. Stevens, of Vancouver, spoke of the United States "with a four thousand mile boundary and a tariff three times as high as ours." This information was given as an argument for the increase of the Canadian tariff to equal that of the United States, accompanied by the understanding that conditions in the United States due to higher tariff were more satisfactory than in Canada.
A little further on in the same editorial, we have this:
For his benefit, as well as for the information of students of tariff affairs generally, the following comparisons may be quoted from Imperial sources. For the year 1924 the per capita rate of duty in Canada was $14.65 and in the United States $4.86.
I think that is a fair way of looking at the tariff; we must consider it from the per capita point of view. These calculations have been carefully checked on the data furnished by the above-mentioned reports. As a matter of fact, if the year 1921 is taken, the comparison shows in all three of the above that the Canadian rate is higher than in the United States.
Our friends to the right in stressing the tariff have gone beyond what they ought reasonably to expect, and I wonder if they really want the sort of tariff that they are talking about. I was a candidate in 1917 as well as in 1921 for election to this House and in both those campaigns the Conservatives apologised for the high tariff which they had had in that part of the country where I was running; and some of them went so far as to declare that a reduction was necessary. And the only way they could justify the tariff then in force was to say that it was no higher than the tariff that had been in effect at any other time under the Liberals. I will not discuss that point as it has no bearing on the present question. However, hon. gentlemen have emphasized in this House their claim that the reduction of the tariff will mean the ruin of this country. Just what their object is would not seem to be quite clear, but it strikes me that they have been making a desperate effort to prevent this government from reducing the tariff to a greater extent than they have done. What effect this move on the part of hon. gentlemen will have on their supporters back home I do not know, but that is what they have evidently been doing. As I see it, there would appear to be in the minds of hon. gentlemen some idea of party advantage in stalling the government in their endeavour to reduce the tariff, and then turning round and telling the people throughout 	i
the country that the government had not carried out their pledges.
Now, the Progressives want a lower tariff and perhaps most of them will vote against the budget on that account. I can see that this will place the government in a very undesirable position; I can quite readily understand that. But whether hon. gentlemen vote against the government because they want a lower tariff, or whether they vote against the government because they are anxious to stall them for the purpose of conveying to the country the impression that this administration have failed to fulfil their pledges, the vote in either case will be an adverse one. It does seem to me
10 p.m. that we could put in our time to better advantage than by talking for the purpose of furthering party interests; I think the country is in too serious a condition for us to carry on a debate for four or five weeks merely for party purposes.
I shall say just a few words now about the tariff commission. Parliament cannot dodge its responsibility for dealing with the matters which members are sent here to consider. I do not want to be put in the position of opposing a tariff commission, but I should like to know just what is intended in this connection. I think we have some assurance from the Prime Minister (Mr. Mackenzie King) and from the government benches that this tariff board is not to decide what shall be done in the way of changing the tariff; its purpose is merely to gather information. If the board is to obtain information and come to a decision as to how industries in the country will be affected by tariff changes, either up or down, and if its function is to be simply advisory, then it would seem to be a good thing to have such a body to advise parliament. Ever since I can remember, the tariff has been a political football in the United States and this country, and I do not think that it is the best thing for any country to allow its fiscal policy to be treated in that way. I believe that the people are entitled to full information in regard to tariff matters; they should know what their tariff is and how its changes would affect them. But under the conditions that have existed in this country, how are the people to know just what the exact state of affairs is? This tariff question is largely comparable to religion; a man may hold any religious belief he pleases; he can prove that his opinions are right in bis own opinion by the Bible; he can take the Bible to prove any position he chooses to assume. Similarly, a man can belong to any party at

The Budget-Mr. Warner
all and support any kind of tariff policy he wants to, with the party information and the party statistics with which he is supplied. But I do not believe that it is to the advantage of the country to have the tariff handled in that way; and if we had a board that would provide the proper information which we could depend upon I think it would be a good thing; we should then be able to arrive at conclusions a great deal more satisfactorily than we can without such a board or some similar body to supply us with information.
Now I come to another subject which I wish to discuss to some extent; I refer to the question of raising revenue in this country. The revenue-earning power of the tariff would appear to me to be rather doubtful; and we never know how much we get out of it nor how much it costs us for what we get. Let me for a moment or two refer to the question of direct taxation. The organization that has sent me here to serve as their representative believe in direct taxation. I do not want to be understood as opposing the idea of direct taxation, but I want that direct taxation to be fair, if it can be made so; and that is the idea I want to emphasize in my remarks on this subject. If direct taxation is fair and we know how much we have to pay in connection with it, then we are ready for direct taxation instead of this conundrum, the tariff, as a method of raising money.
I wish to refer for a moment to the question of milk and cream tickets. I have here a letter from a gentleman who is secretary of the National Dairy Council and who is counsel for that organization, and I would like to put it on Hansard. It is as follows:
In answer to your request for information I beg to say that, acting as counsel of the National Dairy Council, I secured a ruling last year from the Department of Customs and Excise, to the effect that a cream ticket which was not addressed to a bank was not a cheque and was not subject to the law requiring a stamp upon cheques. However, the department decided that a cream ticket was a receipt and that therefore, if the cream ticket amounted to $10 or more, the law requiring a two cent stamp on a receipt of $10 or more applied, and a two cent stamp had to be put upon the cream ticket. Acting as counsel for the dairy interests, I advised to this effect.
The practice of paying for each can of cream by issuing a cream ticket, which is followed by the creamerymen in the provinces of Alberta, Saskatchewan and Manitoba, is not followed in Ontario and Quebec. In these two provinces the dairy farmer is paid every two weeks by a cheque or express order. This used to be the practice also in the prairie provinces, but some time ago it was changed to the cash system, which has been found most beneficial to the western farmer and the merchants in the western towns. These cream tickets which may be sent by mail to a farmer a hundred miles away from the creamery are treated as cash by the merchants and the banks and therefore have
been of material assistance in times of stress, by keeping money in circulation.
Another practice that exists in the prairie provinces, which is not generally followed in Ontario and Quebec, is the paying of cream on grade. There are three principal grades, being special, first and second. The farmer who ships special, gets a better price than is paid for first grade, and the farmer who ships first grade gets a better price than is paid for second grade. The result is that cream is shipped frequently and in comparatively small volume. This practice results in a better quality of butter being made and it has been encouraged by the cash system of payments through cream tickets.
From my knowledge of the dairy industry, I am satisfied that the system of cash payments through cream tickets is a decided improvement on the system of half monthly payments and therefore I sincerely hope that nothing will be done to prejudice the system now existing in the west.
I have read this letter in order to show how this system grew up. It is the opinion of creamery men that under this system a better grade of butter is produced than can be produced under the system that was formerly followed. I take it that the secretary of this organization, which acts for all the dairymen of Canada, is a good authority on this subject. We want the dairy business to grow. This government have been doing all that one could expect any government to do to encourage the dairy business, but if they impose this extra burden upon it the result will be very detrimental to those who are engaged in it. I have here a wire from the Alberta Dairymen's Association, through their secretary, representing all the creamerv men and dairymen in Alberta; I have also a letter from him. I shall not read either the wire or the letter, but they would be good reading and contain information that it would be well to have on Hansard. I have also a letter and a wire from the chairman of the producing section of the Alberta Dairymen's Association, who speaks for all the producers in that province. It is the view of all these men that the business cannot stand the extra burden that it is proposed to place upon it in the form of this tax. I have also communications from private creameries- from the Edmonton City dairy, the Woodland dairy, the Wetaskiwin dairy and the Camrose dairy. I have a statement by the manager of the Wetaskiwin dairy that I would like to put on Hansard; I judge that he is a pretty good authority on this subject and that the figures he gives may be taken as approximate. Speaking to the Kiwanis Club of Wetaskiwin, he said:,
In 1919 about 13,000,000 pounds of butter were made in Alberta, while in 1924 this figure was increased to 22,000,000 .... In 1922 the Dairymen's Act of Alberta was passed, making the grading of cream compulsory. Saskatchewan and Manitoba have followed Alberta's
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example in this respect, and to-day the butter from the prairie provinces has a place on the world's markets second to none.
That is what we are aiming at; we want to turn out the best product that can possibly be manufactured, and the ticket system helps to bring that about. It can only injure the industry if these tickets are regarded as cheques instead of receipts and are all required to have a two cent stamp. I said at the outset that I was in favour of direct taxation if it was fair, and I believe the stamp tax, properly applied, is a fair tax. But a different situation is created if, in accordance with the minister's proposed amendment, these tickets are treated as cheques instead of receipts. We have men delivering small amounts of cream to those dairies every day for which they would receive one or two dollars, so you can see at once that if you put a 2-cent stamp on five of these cheques there will be a tax of 10 cents to pay on amounts as low as ten dollars. That is surely an unfair amount of taxation to place on that business. On the ordinary ten dollar receipt a man has only to pay a two-cent tax, whereas the man taking his cream to the dairy will pay the very same tax on an account of one or two dollars.
Now I come to the cheques. Suppose they issue cheques. Very few of these accounts are over ten dollars, and most of them are below that. On an ordinary business cheque for fifty dollars you only have to pay a two cent tax, but you might have to pay fifty cents if you were in the dairy business and took fifty dollars worth of cream to the dairy. There is no other business this tax strikes so hard, on account of the budget calling these receipts cheques and requiring them to be stamped the same as the ordinary cheque. If these accounts were paid in bigger cheques it would not be so bad, but hardly any of these accounts reaches ten dollars. The dairymen all say that they are willing to put on a two-cent stamp if the account goes over ten dollars, but you can see what a handicap the tax will be to the business if a two-cent stamp is required on every ticket, however small, and I want to tell the government that I do not believe they are going to get the revenue they expect from these tickets, because the dairymen will be compelled to go back most likely to payment every two weeks or once a month
I have here a number of letters that I shall not put on Hansard as time is passing, but they all go to show that the dairy business cannot stand this tax, and they will have to adopt some other method. The government

are going to get these creamery men into a lot of difficulty. They will simply have to avoid this stamp tax in some way because they cannot afford to pay it, and it means they will have to change their system. The government in that case will not get the revenue, but they will fall into discredit with a whole lot of farmers who want the cash system that is now in operation continued. The creamery-men cannot undertake to give cash to each man who brings in his cream. That is out of the question, because not one man in twenty takes his own cream in to the creamery; he gets someone else to haul it in for him, and some of it is shipped a hundred miles. These cream tickets are as good as money to the farmer because the merchants or anybody
will	take	them in as	cash	knowingthat	the	creamery men	will	make itgood;	so	it is really a	cash	system.
But you cannot take money out of the bank and pay actual cash to the producer who sends in his cream to the creamery, because he does not go to the creamery himself. We do not want a handicap ito be placed on this industry from a lack of knowledge of what this tax will mean, and that is one reason why I am taking time to explain the system to the House to-night. These gentlemen who are in the business certainly know what they are talking about, and they know another thing, that they will not be to blame if they have to go back to the two weeks or monthly payment system, and that will be a step backward. The cream will have to be kept too long so it will not make good butter. The man who is getting these cash payments in the west certainly needs these certificates every day in order to carry on his household expenses and support his family. Now why do we need to put a two-cent stamp on this dairy certificate? What is the reason we have to do it? It has not been made clear to me yet, but what has been made clear to me on investigation is that there are already some exemptions allowed. For instance, when a man clips a coupon from a bond and deposits it in the bank he does not have to put a stamp on that. I am not going to say that that is not wise provided we can afford it, but I do say that it is not fair to exempt the coupon clipper and to tax the dairyman, upon whom you are depending to build up this country in every part of it. There are other exemptions I might mention. One dollar will pay the maximum amount of revenue that you have to put on any cheque,, even if it amounts to $100,000. All amounts over $2,500 are exempt

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Now, Mr. Speaker, and gentlemen, hon. members of this House, when you allow those exemptions is it fair to tax the small man who is producing a little cream to take care of his family through the summer season, and many of them are now depending upon it for the winter as well? If you want to be fair, if you are going to tax the cream ticket, I say tax the man that puts a bond coupon in the bank, and put a tax of two cents on every fifty dollars when a cheque is drawn no matter for how large an amount;
I do not care if it is a cheque for $100,000. A man who can afford to write a cheque for that amount can better afford to pay the tax than the small dairyman.
You might say that the creamery men should stand this tax. But it is like any other business, there is a certain amount of overhead, and this tax will be charged in their overhead, and the small producer will have to pay it. It will not be the consumer who will pay it in this case, because the world's market makes the price for butter, and the rest of the butter at home will sell at the price butter will bring in the world's market, less the cost of transportation there, so the tax will come back to the small man. It may not break the dairy business, but it will be a handicap on the business, and I claim that it is an unjust tax. If there were other businesses that were exposed to so much expense and had so many small accounts to pay then perhaps there would not be so much objection. The dairy business is growing, and I have a number of statistics here that will indicate the growth. Our butter is being regarded with more favour on the world's market. In the British market, in Japan and in other parts of the Orient, and in a general way all over the world, our butter is establishing a reputation for itself. With the new system now in vogue, in view of the system of cash payments and the small amounts of cream going into the dairy while it is sweet, our dairymen are able to compete with the dairy products of any other country in the world's market. The fact that our butter is getting such a good name for itself is a strong factor in enabling our. product to compete with the butter from other countries and secure a top price. We have not yet exported in any great volume, although it is increasing satisfactorily and we hope that given proper treatment the business in future will enormously increase. Before I leave this subject I must say that this development in the dairy industry has been brought about as the result
of information furnished by the Department of Customs by their classing milk , tickets as receipts, it has not been brought about through	any violation of the	law.	To-daythe industry is not asking for any special favour;	all it is asking	for is	even	handedjustice and a fair deal.	That	is all	we are
asking for and we think that as dairymen we are entitled to it.
Now,	Mr. Speaker, I	have	several notes
here dealing with matters on which I wished to speak, but the time is going faster than I realized and I cannot take them all up. But I do want to mention the subject of rural credits,	I have not heard much on that
question this session. Nevertheless throughout the country the people are looking for something along that line to be done at this session of parliament. Reports on the subject were presented in 1924 and 1925, by a commissioner employed by the government to investigate the feasibility and the possibility of a rural credit system. I claim that in those reports we have information enough to enable us to make a start on that line. This subject was investigated by a special committee appointed to consider agricultural conditions in Canada, and Dr. Tory, the commissioner in question, states in his report that he has followed very closely the suggestions offered by the committee on Agriculture based on the evidence that the special committee took. We also have his statement that he has followed very closely the recommendations of the committee on Banking and Commerce. In the second report on agricultural credits made last year to the Minister of Finance, and printed as sessional paper No. 142 there is a resolution passed by the Banking and Commerce committee. I quote from the report:
This resolution was concurred in by the House of Commons on Friday, July 18, 1924. Subsequent to this action instructions were received from the Acting Minister of Finance to complete the investigation suggested by the resolution of the select standing committee on Banking and Commerce referred to above.
Now, there are many quotations that I should like to put on Hansard if I felt that I had the time, but in view of the lateness of the hour, and the fact that a number of other gentlemen wish to speak, I shall read only a further quotation or two from Dr. Tory's report:
In Canada we have invested in lands under occupation approximately $2,250,000,000, upon which there is live stock valued at about $1,000,000,000. In addition, the average crop production for the five years ending 1923 was $1,230,000,000. It is respectfully suggested that the time has come for the creation of financial organizations which will think in the terms of this industry, aiming specifically and definitely and without excuse
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The Budget-Mr. Warner

the government was imposing such a low tariff it was going to ruin the whole country on account of the 22 per cent of Progressive members who were dictating to the government. I do not think any party in this House have come as near to having their way as the Conservatives have. They are trying to prevent the government from giving a lower tariff, and have succeeded. The people throughout Canada want a lower tariff; they have sent a large majority of members here who are in favour of a lower tariff if they represent their constituents as they should. Hon. members to my right have prevented the govern-meat from going further with their lower tariff policy. As the saying goes, the government are between the devil and the deep sea. At the same time it has been the Conservatives with a few Tory-Liberals added who have preached the ruination of this country on account of a very little bit having been cut off the tariff at last session. If they wanted a higher tariff, why did they not have it when they were in power and could get it? They did not have a very much higher tariff than the Liberal party, and they made the claim in 1917 and 1921 that they would be just as low tariff people as the Liberals if they had a chance. We are not, as I say, taking a hand in the political fight. We do not feel that we came here to carry on any political fight. Our people have told us over and over again that we are here to represent them, we are here to support the government when they are doing what we can afford to support, to help to carry on the business of the country in a proper way and to oppose measures which are not in the interest of those whom we represent. We are not sent here to build up any party machine nor to strengthen any party machine that is already built up. If this debate has lasted longer than it should have, I believe the country will understand that that is due to the political propaganda that has been carried on.
The soldier settlers in our country are appealing to members of parliament in some way to take enough off their indebtedness that they may be able to make good and hold their farms. I am in favour of immigration to our country, but I want to see the right kind of people coming here and I do not want to see money wasted in bringing in the wrong kind of people. We have a great big country that needs many more people in order that we may carry it on economically and profitably. We have in Canada these 
soldier settlers, a class of settlers that we cannot afford to ignore, and we should give them an opportunity to make good. They have already suffered loss, and if their equipment and stock have shrunk in value until they will not return the money paid for them, you cannot expect the soldier settlers to carry on under those conditions, because most of them had1 no capital outside of that furnished to them by the government. They are, therefore, up against an impossibility, and if necessary I would be in favour, instead of spending all our money to bring other settlers into this country, of spending some of it in helping the soldier settlers that we already have here- sufficient at least to enable them to make good. These men have done their very best; and if in some cases they have not come up to the standard! that we might expect of them, that is no reason why we should treat shabbily those who have exerted their best efforts. I do not think we can afford to close this session of parliament without doing something to reduce the indebtedness of these men, whose position at the present time is simply impossible.
I have just one word to say with regard to the Hudlson Bay railway; I certainly think that undertaking shodld foe carried through to completion. The people in my part of the country 'are more interested in this matter than they realize. They have not been pushing very strenuously for it because they have had their eyes to the west; they have been looking to western shipping. But I think that this Hudson bay proposition is cf more importance to them than they realize just novr, and in order to save the investment we have already sunk in it we should go ahead and finish the road I think we have sufficient information on which to take action.
I have said little about ths tariff inasmuch as I felt that these other problems were more important, but I would make just a brief comparison between the United States and Canada. Notwithstanding the great difficulties we have to put up with in Canada, it is my opinion that none of (hem is great enough to render this country unprofitable for any immigrant who wants to come out to this part of the world and establish a home where he can live comfortably on a farm. In my opinion, such an immigrant would find it more profitable to come to Canada than to go to the United States. I am not saying this as a guess ; after the experience of a lifetime in the two countries I have come to this conclusion. I do not suggest that this would be true unless we did our part; we must do our best to

The Budget-Mr. Jones
lighten the burden of taxation in every possible way. I can see that the government has so much in the way of fixed charges to contend with that it is a difficult problem for us to reduce taxation in Canada. But at the same time we must do everything we can to relieve the people of this burden to as great an extent as possible, and we must help our people to produce by lowering the cost of production. This is imperative if Canada is to be made a prosperous country. This is not a country in which money can be picked up along the roadi; you have to work for it. But when this is said, I think that people have in Canada a chance which is greater than can be found anywhere else in the world. That is my opinion, although I do not forget that difficulties do exist. But the more we can and do help ourselves, the more the government can push forward production by assisting the people in the way of reduced taxation and reduced cost of the implements of production. I must apologize for the time I have taken up, but I feel that the subjects I have touched upon call for some consideration, and I shall leave these few remarks with the House.


Mr. G. B. JONES (Royal):: properties out west would have no buildings on them, and I claim that every one of the farms listed here is a real value, and needs consideration by the Immigration department of this country. We have propositions to offer intending settlers that should be fully advertised.
Just for a few moments I wish to refer to conditions in my constituency. Agriculture is the chief industry that is followed there. Over fifty per cent of the entire dairy products of the Maritime provinces is manufactured and put up in the constituency that I represent. I do not think that can be successfully contradicted by anyone, because the statement has been made for a number of years down there on different occasions, and I have never known anyone to say that it is not correct. Our farmers at the present time are not very prosperous on account of unsettled conditions, the high cost of living, the great burden of taxation, and especially on account of the very high freight rates on all the commodities they purchase and on the products they have to place on the market. Our dairy farmers have to import large quantities of bran, shorts, middlings and other feeds to keep their stock at a high-prodticing standard, and their manufactured product of butter, cheese and milk has to be transported a considerable distance to the larger centres and shipping points.
The farmers of this country need protection about as much as any other industry. I noticed in an American paper just a few days ago that the president of the National Dairy Council of the United States, Mr. M. D. Munn, appeared before a committee of the government at Washington urging that the tariff on* butter from Canada into the United States be raised from eight to twelve cents. Mr. Munn states that they manufacture in the United States more than two billion pounds of butter, and that they import about twenty-five million pounds, which is a very small amount compared with the amount they produce themselves. He goes on to say, however, that that amount is enough to upset their market and at various times in the year to break their price from five to seventeen cents a pound. We are under the same conditions in this country, especially in the Maritime provinces. Whenever our butter and eggs get up to a fair price there are large imports coming in from the United States, whilst our tariff against their products is less than half what their tariff is against ours.

In the province of New Brunswick, the next largest industry to agriculture is lumbering. In the constituency I represent about 75,000,000 feet are cut annually. That amount was cut down considerably during the past year on account of over-production the year before and the slow sale of lumber during the year, due also to the competition that we meet in the New England states, the city of Montreal and other large centres by importation from the Pacific coast. This industry is very badly handicapped, and knowing conditions as I do, I might say that of the large number of operators and manufacturers of lumber on the north shore of the province, I do not believe there are more than two or three whose business is not for sale at the present Pme. The hon. member for Northumberland, NJ3. (Mr. Snowball) is a large operator and has been ever since I can remember. The name of Snowball is very well known in the Maritime provinces but the hon. member's firm is doing very little business this year, in fact it is only operating a portable mill where it has two very large stationary mills. The hon. member in question, during his speech earlier in the debate said that conditions were not extra good in New Brunswick, but quoted newspaper clippings to show that business was improving and that conditions were better than they had been. I have been in business at the place where I am located for the past thirty-five years, and I have never known conditions on the farm, in lumbering, and in industry generally, in that district, to be in such a sluggish and bad state as they are at the present time. To prove this statement I wish to refer to a speech delivered in the New Brunswick legislature on April 8, and the quotation is taken from the Telegraph-Journal, a newspaper printed in the city of St. John. N.B. The gentleman who made the statement in the New Brunswick legislature is Mr. J. D. McKenna, president of the Telegraph-Journal. I am only going to read the headlines placed on the speech; I shall not weary the House by reading the statement itself. One headline is;
Vision provinces, enduring most hideous annexation form in movement to U.S.
Then another one:
King's legislator tells House young people are leaving country by thousands and asks broad minded men devise new methods.
This does not bear out the statement made by many hon. gentlemen who claimed that conditions in Canada are good, and that conditions in the United States are worse than

The Budget-Mr. Jones
they are here at the present time. I do not think statements of that character made in this House, would bear the light of investigation. To further demonstrate that conditions are not as they were represented to be by the hon. member for Northumberland, I wish to read an extract from an address delivered by Mr. J. A. McLeod, general manager of the Bank of Nova Scotia, in the city of Toronto. Every person in this country knows that the Bank of Nova Scotia is one of our good, solid, substantial banks and that dependence can be placed upon the statement of its officers. Mr. McLeod, in the address in question, said:
Last year we referred to the onerous taxation which was pressing upon industry in Canada. There has been no improvement in this situation during the year. If business is to be revived, we feel that some relief from the burden of taxation will have to be given. We fully realize that the cost of the war has to be met, but we do not believe that our governments, by which we mean the Dominion, provincial and municipal authorities, yet realize the seriousness of the situation. New obligations continue to be incurred which are bound to result in increase of taxation rather than decrease. There should be such economy in all departments of government as will permit of some reduction of taxes, in order to encourage the business man to go ahead with new projects in the expectation that he, and not the tax collector, will reap the whole benefit of his industry. The British and United States governments have already made substantial tax reductions, but the tendency of Canadian taxes has been steadily upward. If we are to maintain and develop our foreign trade, our producers and exporters must not be handicapped by a heavier scale of taxation than applies to their competitors in other countries.
Another of our great problems in the Maritime provinces at the present time has to do with the old story of freight rates which have been very much increased. I realize that under conditions as they exist here to-day this is a very hard problem to deal with, but I believe that something could be done in this direction which would tend to relieve the present situation. Just at this point, and to contrast the conditions prevailing in the United States with those existing in Canada I wish to read the following clipping taken from the Financial Review and published a short time ago.
Railroads Break Freight Records American Lines Attribute Increase to Manufactured Goods
New York, March 20-(United Press).-American railroads during the first ten weeks of 1925 handled the greatest volume of freight ever carried at this season of the year-9,000,328 cars having been loaded from January to March 7.
That is 144,858 cars higher than the previous record established last year.
These figures were announced at the meeting of the directors of the American Railway Association here to-day.
The bulk of the increase has come from manufactured products or commodities used by the manufacturing industry. Since most agricultural products moved last Fall and early in the winter, there has been a decrease in the loadings of those commodities.
On March 1, 1925, railroads had 4,988 serviceable locomotives in storage compared with 3,800 on March 1. 1924.
You will observe that the movement referred to is not the movement of a large quantity of wheat or other natural products; it is a shipment of manufactured goods produced in the United States. It is not my intention to dwell on this matter very much longer except to discuss to some extent matters affecting the Canadian National Railways. In dealing with this branch of the subject I wish to say that I am not inspired by any feeling against the Canadian National Railways. Being a resident in the Maritimes and living on the main line of the National system I have always been a supporter of it and have tried to give it all the business possible. My firm-you will excuse me for this personal reference-gives the Canadian National Railways about 250 car loads of outward freight every year, and about 80 car loads of inward freight, besides freight in less than car load quantities and other business, so that any reference I may make to the National railways is not of a personal nature. I am prompted to speak as I do because of what I would term the most gross extravagance that has prevailed on the National railways under the management of Sir Henry Thornton. When that gentleman was appointed president of the National Railways I certainly wasivery hopeful that we would see a change in conditions, but as time goes by apparently the management is going from bad to worse. We were assured at the time Sir Henry Thornton was appointed that he would be above political influence, and would not stand for any political interference so far as the management of the road was concerned. I think that everyone in this country at that time believed that Sir Henry Thornton would not stand for any political interference, but after following Sir Henry Thornton in his different trips to tihe Maritime provinces, and keeping tabs on him in the rest of Canada, I believe that Sir Henry is a very clever and astute politician, and that he is paying about as much attention to the polititoal side of the question as was done by -certain officials in the days of the management of the old Intercolonial in the Maritime provinces.
I am glad the Secretary of State (Mr. Co-pp) is in his seat, because I intend to refer to another matter now. Last December there was a provincial by-election held in the city of Moncton for the seat rendered vacant by the elevation of the Hon. C. W. Robinson to the Senate of Canada. That vacancy existed for
The Budget-Mr. Jones

some time, I suppose they considered the seat in Moncton as perhaps a little doubtful, although my hon. friend the Secretary of State in the last federal election had a majority in the vicinity of seven thousand' in his constituency.


Mr. COPP:: A comfortable majority.


George Burpee Jones: A very comfortable majority indeed, and one would think there would not be any fear in bringing on a iby-alection there and that a melmber of one of his own parity would be able to secure election. The election was held1 on December 1st, and about a week before the Moncton election Sir Henry Thornton made a trip through the Maritime provinces and conveniently stopped off at Moncton, that being the chief railway town and the head office of the Atlantic region of the Canadian National Railways. And by the way a gentleman for whom I have the finest regard1, Mr. Matthew Lodge of Moncton, was appointed a director of the Canadian National Railways about that time. I believe he will make a good director and I am not saying anything against his appointment, because I am sure he has the interests of the province at heart, and when he has those interests at heart he will be looking after the interests of Canada as well, because we surely form a part of Canada. Every effort I believe was made by the government of the province of New Brunswick to get certain matters straightened out in Moncton city, and they thought matters were straightened out. However, Mr. Rand, who was a candidate in Moncton and who aspired to the office of Attorney General was defeated by about nine hundred dollars

01 rather votes.


Arthur Bliss Copp: It cost him more than that sum.


George Burpee Jones: I have no doubt it cost him a lot more than that amount, according to reports, and I have every reason to believe they are correct. That night Premier Yeniot of our province had to look round for some excuses for this great reverse in that election. One of his excuses was that there was a heavy snowstorm just the day before. Another reason he gave was the unpopularity of the National Railways, that there had been certain dismissals, parties had lost their positions there, and that if he had received Mr. Dalrymple's wire on the previous day in. all probability they would have been able to pull through. Mr. Dalrymple, I might say, is the vice-president of the Canadian National Railways.


Arthur Bliss Copp: Has the hon. member a copy of the telegram from Mr. Dalrymple?


George Burpee Jones: No, I have not, but the Premier of New Brunswick said the telegram came a day or two after the election, in place of the day before.


Arthur Bliss Copp: I never heard of it.


George Burpee Jones: It was public talk in the city of Moncton. I was discussing the matter of the attitude of the management of the Canadian National Railways, and I said at the beginning that I believed there was the most gross extravagance going on, especially under such conditions as we are confronted with in Canada to-day. I am only going to mention a few of them, and the first will be the Scribe hotel in Paris, the grant of $3,000,000, the Union club ini London, 11,500,000, and the radio broadcasting stations. It is not only what the cost of the installation of radio stations will be, but their upkeep for all time to come, and of course it is going on all the time. Then we have the golf courses, parks and operation of hotels, and the question of rolling stock on the Canadian National Railways. The first year of Sir Henry Thornton's management of the railways was 1923, and a question was asked of the Department of Railways and Canals regarding the building of new steel cars for the Canadian National. In 1922-1923, being Sir Henry Thornton's first year, he had not got well established in the business, and no new steel cars were purchased, but in 1923-1924 we find that 154 steel cars were bought by the Canadian National: in 1924-25 we find 65 steel cars, or in the two years 219 steel oars were purchased, at a cost of about $15,000,000. I claim these expenditures unwarranted and extravagant under present financial conditions. There are hundreds and hundreds of good first class and other cars which could be used. All they need is a coat of paint and a little reipairing of the upholstery to make them all right under conditions such as we are confronted witih in this country at the present time. I dlo not believe the people of this country will approve such extravagant expenditures.
Another matter is the use of private cars. I am not opposed to some private cars. I believe in the use of private cars for presidents of railways, or perhaps for cabinet ministers if they do not abuse it. For managers of railways the private car is just as essential as an office at headquarters, (because in going from one point to another in a division they can carry on business just the same practically as in their offices. But what I object to is this:	I have heard mention made of
trips that Sir Henry Thornton made in the Maritime provinces, and in fact in the rest

The Budget-Mr. Bird
of Canada, not merely in private oars but in private trains of eight or ten cars, just as if he were going up and down the country on a joy ride. I object to this expenditure on the Canadian National Railways, because when patrons of the road in remote sections ask for trifling concessions, they are invariably denied their just demands on the plea of economy.
I will close with just one more reference to a matter that was referred to iby a number of other hon. members at this and other sessions of parliament. It was referred to this session by the hon. member for York-Sunbury (Mr. Hanson), and it is the matter of representation in this House. I would support and do everything I possibly could to have a reduction in the number of representatives. It is too large. Canada, with a population of eight or nine million people, is certainly overgoverned and there is too much expense in every way. A reduction in the membership of the House would necessitate a reduction in the cabinet by at least one-third, and I believe you would get more effective and better work if the present cabinet were cut in two.
I am also in favour of a reduction in the indemnity, and if the resolution that was on the order paper for a couple of years had ever come to a vote, it was my intention to support it. I believe the session could be shortened up very much, yes, by at least one-third. A lengthy session may be all right for members from Quebec who live in the vicinity of Montreal and that section and members from Ontario who live near Ottawa, but members coming long distances, from the west and the Maritime provinces, are here for five or six months listening to debates on academic questions that get us nowhere.
The Prime Minister, (Mr. Mackenzie King), in his closing remarks referred very feelingly, I thought, to our friends the Progressives in regard to the budget. He told them it was up to them whether they would support him or the amendment of the hon. member for West York (Sir Henry Drayton). He said that if he did not have a good substantial majority, he did not see anything left for him to do, but resign. I do not know what our friends the Progressives are going to do in this regard, but the best thing for them to do if they have any interest in the welfare of this country, would be to oppose the present budget and give the Prime Minister a chance to dissolve parliament, go to the country and receive the condemnation he so richly deserves.
Before I take my seat I wish to say that the Prime Minister favoured me with a speech
in my constituency during the campaign of 1921 when he spoke in the opera house in the town of Sussex. There he referred to my right hen. leader as an autocrat. He stated that business was going to the wall; that the cost of living was high, and that if the electors of Canada would only elect him and his party, we would see a great change in conditions in this country. In making his address here to-night, he said that he had reduced the cost of living, but wherein, he did not say. The Canadian people have reasons to think otherwise. I do not know that he said he had increased the speed of the wheels of industry, but that matter will be decided by the electors when an opportunity is given them at the ballot box and the wheels drawing the chariot of the present administration to its down-fall will move with great velocity.


Mr. T. W. BIRD (Nelson):: Mr. Speaker,
when the Prime Minister (Mr. Mackenzie Kinig) was addressing the House, he charged the opposition with protracting this debate. He threw the charge over to this side of the House in somewhat of an indiscriminate manner, and in order to make the position as clear as possible, I should like to read out these figures which have been given to me and which, I think, will make it absolutely plain to the House who it is that has been protracting the debate. Prior to the present time, 46 Liberals have filled 823 columns of Hansard, averaging 18 columns for each speaker; 26 Conservatives have filled 583 columns of Hansard, averaging 22i columns each, and 31 Progressives have filled 381 columns of Hansard, averaging 12jr columns each. The showing is yet more in favour of the Progressives if you consider the pointedness of the speeches which have been made.


Leon Johnson Ladner: Has the hon. gentleman
calculated the number of columns contributed by members on the government side as compared with those contributed by the combined opposition? It is about even.


Thomas William Bird: The government have followed the policy of intervening in the debate after each Conservative and after each Progressive.


Mr. DUFF:: No, they have not.


Thomas William Bird: I think, therefore, the charge
of protracting the debate does not come very well from that side of the House. The Prime Minister also forgot to make it clear that the Progressives took no part in protracting the debate on the Petersen contract. I thought he forgot also to -tell us about his own four-hour speech. All that is by the way. These little matters influence public
The Budget-Mr. Bird


Mr. MOTHERWELL:: Did the hon. member take note of my remarks with regard to Captain Bernier's evidence?


Thomas William Bird: I was coming to him. As I
was saying, if the minister had read these systematic and scientific reports issued by his own government, instead of listening to what after all are only sea yarns, however interesting they may be, he would have refrained from expressing the opinion which he gave. I have the greatest respect for Captain Bernier, whom I consider one of Canada's finest seamen; and I am glad to note that at the age of over seventy he is fitting out for another Arctic expedition. There is no doubt that as a seaman his skill and ability are beyond all question; but as an authority on Port Nelson, I do not think he should have been listened to for a moment by the minister. I am willing to admit that the minister, after an insufficient investigation, has blundered into that position, a position which is contrary to public opinion throughout the west; and the opinion which has come from him is calculated to play into the hands of those opposed to the completion of this road. Public opinion will not be so kind to him as I am prepared to be.


William Richard Motherwell: I will take my chances on that.


Thomas William Bird: Already I have had intimations that opinion in the west regards the minister's utterance as a smoke screen behind which the government can carry on its policy of delay in this matter. There is a time to correct that view, and when the Minister of Railways (Mr. Graham) gives his statement, then the government may have an opportunity to make clear to the public
12 m. just what its policy is on this important matter. That is all I intend to say at the present time in regard to the Hudson Bay railway.
I want to say a few things touching the budget in general. A- large part of this debate has been taken up with a wrangling over our methods of government bookkeeping. It appears that we have developed a system of bookkeeping which is designed to justify the government that happens to be in power instead of throwing any real light on the questions before the public. From the debate which has been going on it is impossible to draw any other conclusion. It seems to me to be a system of bookkeeping worthy of a Chinese laundry. What the public needs is not an elaborate and confusing justification of whatever government happens to be in power; the public needs a straightforward,

The Budget-Mr. Bird
unequivocal presentation of the facts. Why not put the revenue on one side and the expenditure on the other and give the public a chance to see where the balance really lies? Some countries go so far as to put their annual statement forward in diagrammatic form, and that is a suggestion which I would pass on to the government, so that the man who runs may read and understand without every year having to be dragged through a maze of balances and distinctions that are meant to confuse him. I have been reminded during this debate of the old fashioned grocer who used to keep his accounts by means of certain hieroglyphics which no one understood but himself. It was all right so long as the grocer was an honest man; but how was any one to tell whether he was honest or not? And that is precisely true of our present way of accounting; it has never been meant to enlighten the public but rather to justify the government that happened to be in power. I believe that we have probably spent too much time discussing this matter and too little time discussing what is the real substance, the heart of the annual statement. After all the people are not very much interested in the kind of book entry that has been made; they are interested in the amount of taxes they have been paying and the way in which they have paid them. This year the government has taxed the people to the extent of $290,000,000, a stupendous sum, and the only satisfaction we have in contemplating it is that it is somewhat less than the amount last year. It would be premature to congratulate the government, because when you strike the average for the last three years, which is something like $323,000,000, two or three millions higher than it was when this government came into power-when you look at it in that way, while it may not reflect any discredit on the government it does reveal the plight of the taxpayer. I do not think Edwards Morgan & Company could make it any plainer -$291,000,000 taken from the people in taxes this year. But that is not the really important thing from the taxpayer's point of view -that is, from the point of view of the ordinary taxpayer, the ordinary consumer and producer. What they are interested in, perhaps more than the amount, is the incidence. They want to know just where the blow has fallen, and that is one thing that has been neglected in this debate-an attempt to show the public just how they have been taxed. Canada for many years has been notorious amongst democracies in the way the cost of running an expensive government has been loaded on
the shoulders of the consumer. What has happened in the last two or three years? It was bad enough before, but during the two or three years of a professedly popular government, what has happened? We find that in that time indirect taxation has grown from an already high figure of 67 per cent to 80 per cent. That is to say, 80 per cent of the cost of running this country to-day rests upon the shoulders of the consumer and of the producer. Eighty per cent of the interest on the war debt; 80 per cent of our war pensions; 80 per cent of the cost of this debate, rests upon the shoulders of the consumer, the workingman with a family, the soldier settler struggling on a bush farm, the pensioned soldier and his family living on a government pittance. I do not think we can find in this world a country that lays any claim to democratic development that so cheerfully lays the burden where it is most difficult for it to be borne. Search the world through, and I question whether you can find a country where the principle of ability to pay is so much neglected as it is in this Canada of ours. Whether you go to free trade Britain or to protected America, you will find that tlhis is true. In Great Britain 57i per cent of the taxes are raised by direct taxation, and in the United States 55 per cent; and if you add the estate duty it brings the United States figure up to the level of that of Great Britain, which proves that those two great democracies have been in step in evolving democratic forms of taxation. We in Canada are lagging behind, and the reason is because the governments we have had for a generation or two have not been concerned about legislating for the people as a whole, because the people as a whole during that time have not been represented. Their voice has not been heard here, and the annual budget for more than two generations has absolutely ignored the common people, with the result that at present we are raising by indirect taxation 80 per cent of the total cost of running our government.
Our friends to the right, .the Conservative*, are almost silent on this phase of the budge1!. -and very naturally so; it accords well with the ancient Tory practice of bolstering up a privileged few at .the expense of the many. But we do not look for that kind of doctrine from a Liberal government whose traditions are so opposed to that kind of taxation. The Conservatives have in their amendment made a gesture in this direction. The leader of the opposition (Mr. Meighen) when he was speaking addressed his remarks most particularly to this side of the House. He looked at
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us almost in a threatening manner when he was dealing with this question. Were we as Progressives, he asked, going to vote against an amendment proposing a reduction in the salee tax? Well, we Progressives, while we miay be simple men, are not so easily taken in as the leader of the opposition seams to imagine. It is very easy to see .through that amendment. A reduction in -the sales tax, coming from the Conservative party, simply means baiting the protectionist trap. The Conservative wants to lower the sales tax and the stamp tax and the income tax; where is he going to get his revenue? There is only one source left, and that is the tariff. 'Surely in vain the net is spread in the sight of any bird." He cannot expect the Progressives to be misled1 by such a simple device as that.
The Conservatives have not said very much about reducing the income tax, but I have noticed that certain papers for a long time now have been exerting a silent pressure in that direction, and it seemed to find an echo in the speech of the member for Vancouver Centre (Mr. Stevens). When that hon. member was speaking he compared the plight of the income tax payer in Vancouver with the plight of the income tax payer in Seattle. I would not question his figures for a moment, but the real significance of them is this: There is no doubt that the income tax payer in Canada is carrying a heavier burden than the individual income tax payer in the United States, but so is the consumer in Canada bearing a heavier burden than the consumer in the United States. The fact is this, that Canada as a country is much more heavily burdened than the United States as a country. We are groaning under a burden that the United States knows nothing about. The difference is this, that in Canada the burden is more inequitably placed than it is in the United States. In the United States the burden is fairly distributed; in Canada the burden has been shifted over onto the backs of the consumer. If you take the contribution of the average tax payer of the United States, you will find it amounts to $17.50; in Canada the average contribution is $6.50, which is a very vivid demonstration of how the burden is being distributed in this Canada of ours, and the result of that policy is written right across Canada. For some years there has been a tendency in this country, on the one side, towards an effiminating luxury, and on the other side, and I speak sincerely when I say it, a tendency to a degrading poverty, and that process has been going on quicker than some hon. gentlemen imagine. Dives has been having a little more purple and fine linen each year, a little more sumptuous 
living, while poor Lazarus has had just a few less crumbs to his share. You are faced every day of your life with business buildings and bank buildings that resemble pagan temples, and on the other side we have homes which resemble mediaeval hovels rather than homes, and yet there are some hon. members here who would still further denude the homes of the people in order that they might embellish still more the homes of the well-to-do, because that is what this system of taxation means.
I turn for a few moments to the question of the tariff, that time-worn topic in this annual debate. I notice that the two chief protagonists on these occasions are the hon. member for Brome (Mr. McMaster) and the ex-Minister of Finance (Sir Henry Drayton). When the ex-Minister of Finance was speaking, he twitted the member for Brome on his "ism," as he called it, but the ex-Minister of Finance is also smitten with an ism, whether he knows it or not, and I am afraid his ism is perhaps a little more wild-eyed and impractical than the other. The member for Brome has this advantage for his theory, that it has been associated for a long time with the fine traditions of good British common sense, but the ism of the ex-Minister of Finance, as I understand, was spun some years ago out of the brain of a German professor who promulgated the doctrine that it was a very fine and patriotic thing to tax the agricultural population in order to build up a strong productive power. That is real Frussianism, and I want to say that it is just as anti-social .as it is antiBritish in its spirit. The unfortunate thing is, Mr. Speaker, that humanity cannot live on theories alone, it does not- matter how respectable they are. When we are offered free trade on the one hand, and protection on the other, we are really not offered very much at all in a country like this, for this reason, that tlhe Canadian people for one oause and another have never been able to accept either doctrine. A medicine that the stomach will not retain is really no medicine at all, and yet for a good many years Doctor Liberal and Doctor Conservative have been called in to minister to an ailing country. Those nostrums are all that they have ever had to offer to an ailing Canada, and Canada for some reason or other has never found itself in the frame of mind to accept either of them. I think that situation is capable of being explained. I believe the reason that Canada does not accept the doctrine of the hon. member for Brome is because of a certain state of mind, We as Canadians are subject to a

The Budget-Mr. Bird
certain fear complex, born of the proximity of another country which far surpasses us in population and productive power. That overshadows us and it makes it very hard to convince the average Canadian of the virtues of the Cobdenite doctrine-very hard indeed. It also makes it very easy for our Tory friends to influence them in the other direction. The one wave of the flag is worth a dozen arguments to our protectionist friends. They do not need to do much arguing at all, for psychology works furiously on their behalf. Now so long as protection dominates the international situation, and so long as the gigantic trusts hide behind these tariff walls and carry on their commercial aggression, just so long will Canadians resist the eloquence, the very fine eloquence, of the hon. member for Brome. I pity him, and I pity them. On the other hand, the reason why Canadians do not accept the protectionist doctrine is purely upon economic grounds.
Canada is a predominantly agricultural country, under the necessity of exporting its products and selling them in the world markets at the world's prices; and so long as that maintains, Mr. Speaker, the average Canadian will resist the doctrine of high protection. But this brings us to a rather curious position to which I want to draw the attention of this House for a few moments, because I think it is a most significant thing in Canadian public life. The attitude of the present Liberal government on the tariff brings us to the crux of the whole situation. That policy of theirs, which is so inconsistent with their out-of-office professions is the most significant thing in Canadian, public life. Now, our Tory friends attribute it to the moral degeneracy of the Liberal politician. I think that is a very superficial way of looking at it. This thing is not due to the moral delinquency of the Liberal politicians. I think on the whole they stand up just as *well in that regard as perhaps any of us, But this thing, this strange phenomenon is due not to the moral degeneracy of the Liberal statesman, but rather to the political acumen of Liberal statesmen. That is not a theory of my own, because we have had ample demonstration of it in this debate. The Liberals no longer apologize for that attitude. This is an attitude which comes from divining that public opinion is not crystallized upon this question. For a generation or two the Liberals have pursued that policy. It is a purely political policy. It is as far removed from economics or from the science of government as it can be. It is
pure politics, unabashed politics, and for a good many years the policy adopted by the Liberals has been profitable to them. They have got away with it, and it has yielded to them the sweet and delectable fruits of office for a good many years; and after all what is policy for but to win office by? Now the Minister of Justice in his speech-yesterday was it?-alluded to this phase of the question. The Minister of Justice has the typical philosophic mind, and he made it his business to take this political attitude of the Liberals and erect it into a philosophy. I listened very attentively to him while he was trying to do it. The Liberal party from now on is going to assume the role of a centrist group, holding the balance between the Tories on the one hand and the Progressives on the other. They are going to save Canada from disruption by holding that balance. Now, while he was speaking I could not help remembering that that is just exactly what the Liberal party in Great Britain thought, that is just the role they thought they were going to play; but I would remind the hon. minister that it is a position that is getting more and more difficult to hold 'as people become more enlightened on political matters. Why just fancy this government going to the country and trying to persuade the average Canadian citizen that they are neither the one thing nor the other. We are reminded of the old revival hymn which used to say "Oh to be nothing, nothing!"


George Perry Graham: My hon. friend has sung
that often.


Thomas William Bird: Yes? I think I will sing it
again, probably, with no diminished fervour. The hon. Minister of Justice thinks that he and his colleagues can tip-toe along the invisible line which divides progress from re-action. I very much doubt whether it can be done any more. A kind of political Blondin that walks over the angry whirlpool of public opinion on the tighLrope of a vacuous policy. They used ito be able to do that when I was young, it was the sum and substance of the old political game; but I feel convinced that the game is played out-this old futile game of free trade vs protection played between those two phantom goals for the delight of the Canadian public every four or five years. The public of Canada has undergone mighty changes since those things used to foe successful. Somebody here will very likely ask: What is the Progressive attitude on these questions, what is the Progressive attitude on protection and free trade? Well, that goes to the very root of our being, to the very root of our
The Budget-Mr. Bird

existence. The Progressives four years ago were sent here as a protest against the predominance of urban ideas in this parliament. The Progressive party has no other cause for existence but that. The tariff is not the only question that has been framed according to urban ideas; there are others too. The tariff was put over on this country, saddled upon it, long before rural Canada was organized. If rural Canada had been organized it never would have been put over. Since that time rural Canada has been organized and it stays organized; and there will be no peace in this parliament until this tariff question is settled along lines that bring something more like justice to the producers of this country.
The farmers of Canada are not unreasonable as some people try to make out. They are not sectional; they are not divisionists; they are among the most stable citizens in this country. The farmers do not think they will ever get it all their own way; they are not numerically preponderant; they never dream they will exercise autocratic political power in this country-that is not the point at all. I do not believe that the average farmer in this country thinks for a moment that he will get his own way even on the tariff question. But I will tell you what the average farmer, at any rate in the west, demands from this government, from this parliament, is a broad, constructive policy that will be designed to give him, for the first time in his existence, something like justice -justice in comparison with other elements in the community. Until now he has had no chance at all. He has been faced in this parliament with governments that were bourgeois in character, that were urbanized in their point of view and still are-governments which had their eyes everlastingly glued to the sources from which came their political power. That kind of thing cannot endure. It is no use the Prime Minister making his emotional appeals to members on this side of the House; we have long ceased to be moved by emotion. The realities of the situation will not permit us to be stirred up by eloquence of that kind. The Prime Minister in his subtle manner may try to drive us before the public mind into a position where we will be looked upon as divisionists and as sectionalists, but we have been too long in the confidence of the people who sent us here to permit him to succeed. He will have to couch his overtures in more reasonable language than he has done before he can meet with any success. What we want is not emotional appeals of the old political kind. We want a definite announcement of 
what he is prepared to do for rural Canada. He lias not given us that. He has evaded the question every time it has been put up to him. His policy has been a policy of evasion, and it is no use trying to answer the proposal that I am presenting by a peroration of the kind that he delivered to-night. I know there is a very insidious influence in that casuistic idea that if we vote against the government we will vote with the Tories, but the Liberals cannot get away with that in the fourth year of our experience here. If it had only been our first year they might have done it. The idea of trying to put us into that camp because we happen to vote against the Liberals is childish. My position is that I am not an enemy of the government. I would gladly support the government if I could see any indication of a policy that would be suited to that portion of the country which I represent. The details of the budget do not concern me very much. I do not scruple very much about the tariff this way or that in any particular budget. My conscience would not balk at that. I am voting on the budget in the way members always vote on it. I am voting on the general policy of the government and on their attitude towards the Crowsnest pass agreement and the Hudson Bay railway. In short, I am voting on their entire attitude towards the rural population of the west.


Mr. MICHAUD:: The hon. member is voting like a Tory.


Thomas William Bird: If the way I am going to vote is voting like a Tory I will be proud to vote like one. If that is the hon. member's definition of voting like a Tory I think it argues profound discrimination on his part. I will have to go a long way before I will be as Tory as some of the hon. gentlemen on the other side of the House. What the Canadian public want is for this government not to occupy the dead centre, not to sit there eternally like a row of extinct volcanoes, with no positive proposition that is of any use for the man who is earning his bread on a Canadian farm. The government has to declare itself. It cannot be serving two masters. It cannot be all the time subject to a paralyzing fear from the direction of Montreal and at the same time trying to persuade the Progressives to come over in a body to that side of the House. The government must declare itself, but that is just the thing they dare not do, because if the government did declare itself it would split up into smithereens. The government dare not declare itself on the Crowsnest pass agreement because a fissure would be opened

The Budget-Mr. Bird
right through those benches at once. They dare not declare themselves on the Crowsnest pass agreement, because a chasm would immediately yawn right through their midst. But the government would be well advised to declare itself, because the spirit of Liberalism is not dead in this country. It is still to be found in the hearts of the common people. Liberalism is the doctrine of the common people, but the people have ceased almost to hope for any manifestation of it from that side of the House. When I vote against the budget I am voting for Progressive principles, and nobody is going to divert me from voting for Progressive principles. Those principles are what placed me here. That is the trust I have to hold and maintain in this parliament. I have no other reason for being here. No casuistry or no juggling can divert me for one moment from casting my vote on behalf of what I conceive to be Progressive principles and those principles mark you are exactly the same as the principles enunciated by the Liberal party when out of office.


Pius Michaud: Is that the principle the amendment to the budget expresses?


Thomas William Bird: I am not voting for the amendment to the budget and I thought I made that abundantly clear. I said I had no positive dislike for the Liberal policy as they profess it, when out of office, but I have a distinct dislike for the policy of my Conservative friends. I never could hide my dislike of their policy. The only policy of the Liberals that I dislike and to which I am antagonistic is the policy they put in practice immediately they come into office. [DOT]


Mr. STEWART (Argenteuil):: Does my
hon. friend object to the reductions in duty which were made last year?


Thomas William Bird: No, I voted for the budget
last year and expressed my approval of it.


Mr. MALCOLM:: Does the hon. member
object to the reduction the government gave in respect of grain rates by the restoration of the Crowsnest pass agreement.
M-r. BIRD: No, it delighted my heart. It struck me that there was something good left in the Liberals after all.


James Malcolm: Why does the hon. member object?


Thomas William Bird: I do not object. My criticism is not of the Liberal policy, in those details but I want to say the attitude of the government on the Crowsnest pass agreement is not satisfactory and has not been satisfactory.
They brought the Crowsnest pass agreement into a very dangerous situation.


Charles A. Stewart: I would like the hon. gentleman to tell us how.


Thomas William Bird: They had full power to prevent the Crowsnest pass agreement being in the situation it is at present.


William Richard Motherwell: The Supreme court gave a decision on the matter.


Thomas William Bird: This government is supposed to maintain the statutes and defend them when necessary.


Charles A. Stewart: It did.


William Duff: Did not the members of the Progressive party agree with the Liberals on the committee when this question was before them?


Thomas William Bird: What committee?


William Duff: The hon. gentleman ought to know.


Thomas William Bird: I certainly do not know what the hon. member is thinking about.


William Duff: Of course the hon. gentleman knows. It was one of the most important committees of the House.


Thomas William Bird: If it will clear up the situation, I will say again that I am not opposed to certain attempts that the Liberal government has made during the last four years to bring something like ordinary justice to the western farmers. But some of those attempts have been half-hearted; some of them have been bungled, and some of those out of which they tried to claim the most merit are by no means settled. Are the government expecting us to vote for them on trust? I think that is what they are doing. They are expecting us to give them a blank cheque. Has the Prime Minister said to us what he is going to do this session? Has he opened up his policy? I do not think he has. It irks me even to seek to introduce a note of political antagonism, but I know the views of my constituents, and those I have expressed are moderate as compared with the views that are held by the people amongst whom I live. I know that is their judgment. I am ^peaking to the government with a good deal more sympathy in my nature than my words would seem to express.


An hon. MEMBER:: I hope so.


Thomas William Bird: I hope, too. I hope my words will bear fruit; that the Liberals will in the future attempt to emulate the doctrine which they so freely preach when out of office. They
The Budget-Mr. Shaw

are the friends of the farmer, the producer, the working man, when out of office, why not be a friend when in office?
Mr. JOS. T. SHAW (West Calgary): Mr. Speaker, for fear there should be any misunderstanding, I would like to say at the outset that the party to which I belong, which consists of myself, is not responsible so far for any space taken up in Hansard save a very small section of some ten.' lines in which I asked a question of an hon. gentleman on the opposite side. I feel that the American system might be copied in some particulars. In congress, they have a system by which a member can hand in his manuscript and the printer does the rest. I do not know but that it might be advisable -to change the rules in that respect.


Mr. POWER:: Does the hon. member wish that we give him permission to do that tonight? If so, it will be readily granted.


Mr. SHAW:: If I had my speech prepared, I would not hesitate to agree to the suggestion of the hon. member. I would ask the indulgence of the House for a few minutes while I discuss what seem to be the vital and important matters before us. Our attention in this debate, by reason of the amendment and the motion itself, has been attracted in two directions, first of all to the matter of economy and, second, the budget itself directs our attention to matters of finance and of fiscal policy. I dislike being put into a position where my attitude must be entirely one of criticism. If I cannot be in a position where I can helpfully criticize, I have no desire to criticize merely for the sake of criticism. So I approach what few remarks I intend to make, not with the attitude of mere captious criticism, but for the purpose of seeing if I can add anything of value to this already overburdened Hansard.
It seems to me that, with regard to the question of economy, there are two promising and fertile fields 'for investigation into our situation to-day. There is, first of all, the railway situation. The matter has been gone into at great length; but briefly, the position assumed by the hon. member for North Waterloo (Mr. Euler) expresses so Clearly and definitely the views that I hold in the matter that I do not propose to weary the House by going into it in any detail this evening. In the first place, I am convinced that consolidation of these two railway systems must come. I am convinced likewise that that consolidation must be only under a system of national ownership. If these points are established, if they are accepted, why cannot

we take steps now to accomplish our purpose? Why wait until one or the other system gives evidence of a breakdown before we actually put our hands, as the government of Canada, to the wheel, take control of the situation and save, not millions, but tens of millions of dollars annually? After all, both railways get their money from the people of Canada; the people of Canada pay the railway transportation charges, and if one railway steadily increases its earnings, the other railway will necessarily, and to an increasing extent in the future, decrease its earnings. So, I say, if these two principles are established, why should the government, why should not this parliament, now formulate a definite proposal, present it to the Canadian Pacific Railway Company and say:	Here is a proposition
for your acceptance or refusal? The Canadian Pacific will realize that if they refuse the proposal, they must face the competition of the Canadian National Railways in increasing measure in the future, with the result that, peilhaps, in a few short years it may be in a much worse position as regards deficits than the Canadian National is in to-day. So I suggest to the government that now is the opportune time, now is the appointed hour to present to the Cana dian Pacific a proposition for the consolidation of these two railways. I have not the slightest doubt that a consolidation of that character will save tens of millions of dollars yearly. It is important that the opportunity should be grasped. There is no use in trying to save money in petty ways when in. such a large way we can save such vast sums.
The next field and a very promising field for the economizing in expenditure of the public money is that of federal administration. Government, after all, is the biggest and most important business that we have in this country. The government should aim to be a model employer. The government should also, keeping this principle in mind, aim to establish economical and efficient business administration. In the field of government expenditure and administration do we reach those high standards in any particular? Some people look at the anuual expenditures; they are shocked by the amounts, and then they promptly wield the sword on the heads of any unoffending civil servants who may happen to be within their reach. That, it seems to me, is not the proper way to approach this problem. Whatever fault there may be rests, not with the individual civil servant, but rather with the system which has grown up in this country.

The Budget-Mr. Shaw
May I preface what I have to say by asking hon. members this question for example: What are the numbers of our civil servants and what is the payroll of the civil service? I am going to give you two or three figures. A Senate committee last year made a very careful examination of this and allied problems and they came to the conclusion that for the fiscal year ending March 31, 1924, the government of Canada had on its payroll 42,238 employees, the annual payroll amounting to $48,206,527. The hon. member for Bow River (Mr. Garland) at the beginning of the session asked for a return showing the cost of the civil service, and the number of employees in the month of January, 1924, as well as in July of the same year. The figures submitted show that in January, 1924, there were 38,062 employees at a monthly cost of $4,746,694.90. These were the figures given Hansard to-night by the Prime Minister (Mr. Mackenzie King). In the month of July, 1924, the number of employees was 40,927, the monthly salary including bonus being $4,814,724. Taking these two months as the average, this would indicate that the annual payroll is $58,000,000 and not $48,000,000 as the Senate found. I turn now to the Auditor General's report for last year and I find therein that the cost of the civil service is given as not less than $74,000,000 per annum Why these vast discrepancies-forty-eight, fifty-eight, and seventy-four millions? I wonder which of these is right.


An hon. MEMBER:: One is for the inside
service while Hie other includes inside and outside.


Joseph Tweed Shaw: If the hon. gentleman is
using these terms in their accepted sense he is mistaken. Now, we find that _in Canada we have under our system thirty-six officers holding the rank of deputy minister and enjoying an annual payroll amounting to $277,500; whereas in the United States there are only twenty-one heads of departments with an annual payroll of $157,500. I am not suggesting at all that these men in Canada are over-paid: I believe in paying the best possible salary and requiring the best possible service in return. But I do think that we are altogether too much over-departmentalized. May I now make some reference to a matter which was discussed the other day by the hon. member for West Lambton (Mr. LeSueur).


George Perry Graham: I think it would be fair to say that the heads of the departments in the United States do not have to spend six 171
months of the year in session; they are not members of congress.
Mr, SHAW: I am not talking about cabinet ministers in Canada; I am referring to deputy heads of departments. The hon. member for West Lambton discussed in some detail the bureau of the budget
1 am. as established in the United States, and I would like to give to the House, if I may, a somewhat more comprehensive survey of the situation in that country in order that we may see if it is possible to make in this country some application of a system which seems to me to have much merit I am not doing this in any spirit of criticism. Perhaps I might tell a story here. A rooster had wandered somewhat afield from his own barnyard and he discovered to his surprise a large ostrich egg. With infinite patience and with much labour he rolled it up before the gaze of his admiring flock, to whom he gave this assurance,
" This is not intended as a reflection; it only shows what can be done ", It is in that spirit that I desire to say something wTith regard to the bureau of the budget. The Budget and Accounting Act of the United States was passed in the year 1921. At that time the United States had a very large debt approximating $24,000,000,600, and they had an annual expenditure of $5,700,000,000. In the year ending June 30, 1921, their deficit was something like $80,000,000. On account of the financial chaos and the generally difficult conditions in which that country found itself, congress at that time passed the Budget and Accounting Act to come into effect on July 1, 1921. Perhaps I should say one or two things with regard to the purpose of that act, and in this connection I may read a statement made by President Harding before a group of the departmental heads in that government. He said:
I am very glad to come before you and stand sponsor for this meeting. The present administration of the federal government is committed to a period of economy and efficiency in government. The statement is not made with any thought of criticizing what has gone before. It is made in a new realization of the necessity of driving at the loose, unscientific expenditures of government. There is not a menace in the world to-day like that of growing public indebtedness and mounting public expenditures. There has seemingly grown up an impression that the public treasuries are inexhaustible things, and with it a conviction that no efficiency and no economy are ever to be thought of in public expense.
We want to reverse things. Congress, in order to aid in the change of policy, has provided, for the first time in the history of the federal government, for a bureau of the budget. It has been my privilege and my responsibility to choose the director of the budget. After a conference with him, it was

The Budget-Mr. Shaw

decided that the way to begin with an efficient system under the budget was to look to those who are in fact responsible for government efficiency and economy. Sometimes in our habits we overlook those who really do things in this world, and in the federal government there are tens of thousands of public servants who axe giving the best that is in them to bring about a satisfactory administration of affairs, but whom the public never knows.
I want to bring into this picture of a drive for efficiency and economy you servants of the government who are directly responsible for a better order of affairs, if it is to be brought about.
And so the first thing President Harding did was to appoint General Dawes to be director of the budget. General Dawes was a former controller of the United States treasury in the McKinley administration, and he knew much about the civil service. He had been chief of staff overseas of the United States army during the war, a position of tremendous importance and responsibility, and it was felt that he would be a good man, with the adequate amount of experience and training, to give the . United States a business government. The first thing he did was to select some twelve or fifteen of the best business men of the United States whom he could gather together. May I say that General Dawes agreed to stay only for a year, and that at a salary of $7,500, and he engaged, the business men at one dollar per year. They went to Washington and went into the various departments of government. General Dawes decided that he was not going to build up a new bureau, a new form of autocracy; he determined to make use of the men in the various departments; so from the departments he selected key men familiar with the work of the various government services, who were to be strictly responsible to the director of the budget, the director himself being the direct agent of the President of the United States. Now, what did General Dawes find when he commenced to investigate the service? He found a great deal of duplication of service. He found considerable over-manning. He found that as soon as a vote was granted, the departments, as a general rule, felt that it was necessary for them to spend the amount appropriated. He found that, generally speaking, government was in a very inefficient condition and working certainly at a great disadvantage.
General Dawes promptly called the meeting to which I have referred, which was addressed by President Harding from whose address on that occasion I have just read an extract. Their work in connection with the estimates would ordinarily have been concerned with the year 1923, because with the fiscal year ending on June 30, the estimates IMr. Shaw.3
had already been provided by congress for the ensuing year. But General Dawes was not satisfied with that. He said: We will look into these estimates that have already been passed by congress. Accordingly he asked the heads of the various departments to submit to him, with the assistance of the officers he had selected in each department, recommendations with a view to economizing in expenditure. Within a month he had a report, and the result was that the amounts provided by congress were reduced to the extent of some $112,000,000. Now, let me give some further figures. We have been so accustomed to dealing in millions, throwing them recklessly about here and there, that perhaps hon. members will not object if we raise it a little bit and call it billions.
For the fiscal year ending June 30, 1921, the expenditure of the United States government was $5,538,000,000, and the receipts totalled $5-,
624,000,000. For the year ending June 30, 1922, the first year of the operation of this budget, the expenditure had been decreased over $1,-
700,000,000, to the sum of $3,795,000,000. The receipts of the government, by reason of lessened taxation made possible by reductions in expenditures, were reduced to $4,109,000,000, a drop of $1,500,000,000. For the year ending June 30, 1923, the expenditure was further reduced to $3,697,000,000, and the receipts also, by reason of lessened taxes, fell to $4,007,000,-
000.	In the year ending June 30, 1924, the expenses of the United States government were further reduced to $3,497,000,000 and the receipts totalled $3,995,000,000.
Now, the estimated expenditure for the year ending June 30, 1925, was $3,083,000,000. I should say that under this system the President meets half-yearly the officers of the budget bureau heads. In his address to the gathering in June last President Coolidge asked them to reduce this expenditure to three billions, and for the current year, as the result of continued executive pressure, the estimates have been reduced to that figure. What has been the result of the bureau's activities? Putting it in percentages, before this budget scheme developed the expenditure of the United States government was 59 per cent of all governmental expenditure throughout the United States.


Mr. McMASTER:: Including state and
municipal?


Joseph Tweed Shaw: Yes, state and municipal expenditures. The figures have just been reversed, so that to-day only 41 per cent of governmental expenditure in the United States is

The Budget-Mr. Shaw
represented by federal expenditure. May I say, too, that the public debt of the United States in that period has decreased from $23,976,000,000 to $21,254,000,000, a decrease in three years of $2,722,000,000, an interest saving alone of $120,000,000 a year. Further, and as one result the tax receipts of the United States government have been decreased to the extent of $6,000,000 a day. Not only that, but the personnel of the service has been reduced in that period by 51,000; in the month of March last it was reduced by a further 2,500.
As I have indicated the director of the budget- was at first concerned primarily in revising estimates. But he soon found that he could render much more valuable service than that, so he undertook the work of co-ordinating the public services. Now, I know that a word like "co-ordinate" is not acceptable to some people in this House. I know that the right hon. leader of the opposition will object if I use the word "cooperation", and others will object if I use the word "collaboration". But I may say on the authority of General Lord that these words have been written into the United States civil service dictionary for the first time, and now that service understands fully the significance of these words.
As I say, General Dawes in his investigation found within a short period of years a tremendous overlapping in the services. What did he do? He appointed a chief co-ordinator in whom he had the utmost confidence. He then appointed assistant oo-ordinators with jurisdiction in nine areas in the United States, those areas corresponding with the existing military districts. It is the duty of these persons to see to it there that there is no overlapping, no over manning, no duplication in the service. Let me suggest one of the things discovered. The War Department of the United States had a large quantity of surplus supplies. They called for tenders and sold them to a group of speculators at figures much below the original purchase price, and the speculators promptly turned round and sold at a great advance exactly the same goods to the Naval Department. That is the sort of thing that was going on in the United States service. The director of the budget among other things organized a central purchasing department, something that is very greatly needed in this country, and generally the whole system has worked out entirely satisfactorily. As I said before, business meetings are held every six months, with the President and the members of his cabinet right on the platform, and the 1714
director of the budget talks to them just as he talks to those who come under his immediate supervision. Every few months the director of the budget calls for reports fron bureau heads and from his co-ordinating staffs and asks them: What have you done in the last few months in the direction of economy? They make their reports, and it is rather interesting to read what has been done as a matter of actual practice as the result of the application of this system.
Hon. members may be interested in knowing what this costs, because after all the cost of such an organization is an important factor. In the first year, congress appropriated the sum of $225,000 for this service. The bureau of the budget spent only $120,000 in the first year, and the estimate for the current year is just $180,000. That small expense is possible by reason of the fact that the director is using the services already provided. He stands there as the direct agent of the President, who is the chief executive officer of that nation. He has his finger upon every department, and with the co-operation of these departments with his own staff collected for co-ordination purposes he has been able to achieve the results which I have indicated.
Now there can be no doubt that this result has been largely achieved by reason of the budget bureau, and by reason too, particularly, of the splendid spirit which has animated the whole civil service. A real spirit of co-operation is certainly evidenced in the United States. Just let me read one or two words from the statement of President Coolidge on June 30, 1924. He said:
The insistent demand for economy and reduction in expenditures necessarily requires increasing * efficiency of administration. I realize that it is making an ever increasing caJll upon the administrative ability of responsible officials, but this is a call for real service. It demands a most searching inquiry into the field of your activities, so as to remove entirely from them all elements which are not essential, and so as to curtail all those which may be reduced without prejudice to the welfare of the nation.
He says further, and this I commend to the members of this House:
We must have no carelessness in our dealings with public property or the expenditure of public money. Such a condition is characteristic either of an undeveloped people or of a decadent civilization. America is neither. It stands out strong and vigorous and mature.
Further on he says:
I am for economy. After that I am for more economy. At this time and under present conditions that is my conception of serving all the people.
Now it is all very well to see what can be done, but have these facts no immediate
The Budget-Mr. Shaw

concern for us in this country? I suggest, Mr. Speaker, that they have. We had in 1923 a committee appointed by this parliament for the purpose of investigating the operation of the Civil Service Act, and one of the suggestions made by that committee, whose report, however, was never adopted by this parliament, reads as follows:
Your committee is impressed with the necessity of co-ordinating and harmonizing the various departments of the public service into one efficient administrative unit in order to prevent duplication and over-lapping and to eliminate over-staffing.
Some progress has been made, but your committee is convinced that the fullest efficiency can only be secured by definitely charging some central authority with this important task. The Prime Minister, it is suggested, is the proper authority to act as the coordinating head and business manager of all government services, but the serious and grave responsibilities attached to his office, particularly with reference to government policies, would probably make it necessary that this duty should be delegated to an expert, in the same manner that the government has delegated its responsibility in connection with the management of government railways. Such an expert could be also entrusted with the duty of supervising public purchasing and contracts, with a view of securing business efficiency.
That is the recommendation of the Malcolm committee of 1923. I am not going to tell you who was responsible for writing into the report that particular provision, but I want to make what I think is a practical suggestion. First of all, the success of the United States plan has resulted from the application of executive pressure through the executive agent, the director of the budget. The Prime Minister, I think it cannot be denied, is the chief executive of this nation. He is charged, in addition to other duties, with administrative functions. He is the one who is primarily responsible. Now I say, let us give him the machinery, let us give him whatever is necessary in order to carry out his duties, and then let us hold him fully and completely responsible for economy and efficiency in all government expenditure.
We have in this country a Civil Service Commission which has two functions to perform, an examination function for the purpose of determining the qualifications of applicants for the service, and a second function, namely, the duty of organization. I am not going to discuss the first function, but in regard to the second, I claim that the Civil Service Commission have wholly failed. They have not, except in a few isolated instances, made any attempt to carry out their statutory obligations to organize efficiently the various departments of government, and what is the reason they give for their failure? The reason given is that they cannot get the co-operation of the government departments. Now I suggest the act. makes no provision about getting the co-
Mr. Shaw.!
operation of government departments. The act says it is the commission's duty, and there being no limitation, they must be held accountable for their failure in that regard.


Sir EUGENE FISET:: Did they not reorganize some departments of the government, but not all?


Joseph Tweed Shaw: I am giving the reason for
their failure to go into all the departments of the government. I did say they have gone into one or two departments, the Printing Bureau, for instance, and the Militia department, and I think they have organized those departments efficiently, but with regard to the Interior department, for example, they have not apparently as yet developed any scheme of reorganization, and that is a department which I think stands in great need, and I say it without reflecting on anybody, of the closest scrutiny with a view to reorganization. If I may use the lurid language of General Dawes, when he found that there were some department heads he had difficulty in cooperating with, he said that it seemed like using a pile driver to kill a flea but that he was prepared to put the hook, as he called it, into these rat holes of covert hostility, and in that way secure co-operation and assistance.
Now my idea is this, that this organization branch of the Civil Service Commission should by an act of this parliament be taken away from the Civil Service Commission and be placed directly under the Prime Minister of this country. It should be made directly responsible to him as the chief executive officer of this country, and then, given his opportunity, given his duty, we should hold the Prime Minister responsible to see that there was developed in Canada an efficient business administration. If some such policy was adopted I am satisfied that there would be a tremendous saving in government expenditures and in the expenditure on the public service in this country. The saving to the country I suggest, under the consolidation of the railways would mount up to tens of millions of dollars a year. The reorganization of the public service would certainly save millions of dollars a year.
I come now to the fiscal proposals embodied in the budget. Frankly I propose to vote for the motion, and I am going to tell the House my reason. There are two or three items in the budget that I want to discuss very shortly. There is a reduction in the tariff, so far as it affects well-drilling machinery, of 22i per cent. This is a very substantial reduction. The tariff on well-drilling machinery is a tax from which western Canada has sought relief for many years. We have great hopes

The Budget-Mr. Shaw
in the province from which I come that our whole area is underlaid with oil reservoirs- I hope it is anyway-but the depth is such that the ordinary Canadian machinery is not adequate to meet the difficulties incident to deep well-drilling. The result has been that we have been forced to largely buy well-drilling machinery from Pennsylvania and pay a duty of 27J per cent, and in that way this enterprise-which under the best of circumstances must be a speculative one-this effort to develop our natural resources is hampered by reason of this heavy tariff exaction. And so I look with approval, and I am sure the people of western Canada do also, to that very substantial reduction in the tariff on well-drilling machinery.
There is another item to which I wish to direct attention, and that is the matter of the duty on slack coal. Here there has been an increase. Now, I do not pretend to be dogmatic so far as particular items in the tariff are concerned. If I felt that that increase of the duty on slack coal would solve the serious labour problems in the province of Nova Scotia, or the serious coal-mining problems in the province of Alberta, I would not hesitate for a single moment in the interests of peace and harmony in those fields to sacrifice my principles to the extent of voting for the duty on slack coal. In my opinion, regardless of what may be said, the economic unity of this country is an absolute essential, economic peace in Canada is an absolute essential; and we in a matter of this kind cannot say that we are called upon to pay too high a price or make too much of a sacrifice of principle if it has the effect suggested. Frankly I do not know. The coal miners in my province are in favour of it; the coal miners, as I understand it, in the province of Nova Scotia have assumed a noncommittal attitude, and have suggested that they want primarily a fact-finding commission for the purpose of investigating Besco. But with that reservation, with the reservation that I am not sure that the duty on slack coal will have the effect contended, I say that if it did accomplish that purpose I would have no hesitation whatever in the interests of the economic unity of this country in supporting that proposal.
Now the budget does not advance very much beyond the tariff proposals of last year. It is suggested that we have got to allow a breathing apeffl after the proposals which were incorporated in the budget of last year. There is no doubt that our revenues have fallen very much, and it may be that it is desirable that for the present at least no further substantial
change should be made. In this connection I am reminded of a speech made by the hon. member for Brome (Mr. McMaster) on the occasion of the liberal convention held in this city. I recall his militant language; I think, perhaps, he may have been slightly intoxicated-


Some hon. MEMBERS:: Oh, oh.


Joseph Tweed Shaw: Perhaps my hon. friends will permit me to finish. He may have been slightly intoxicated with the enthusiasm of the occasion which led him to use this somewhat militant language. He said-and apparently he pointed in a certain direction-"yonder is the castle of special privilege surrounded by the redoubts of protection." I take it he was referring to this chamber, or to the government of the day, perhaps, and then his suggestion was "Let's up and at 'em". Now when the smoke of battle cleared away I think the hon. member for Brome retired from the stricken field dismayed)-shall I say?-but yet undaunted. I have had a little experience in military matters, and one lesson which I learned was this: That where you find an enemy entrenched-imy hon. friend from Brome would indicate that the forces of special privilege were entrenched, and I think he is right-the attack .must be made by men who are like-minded and who have the one high purpose to serve. If there are deserters why of course the attack will not likely be a successful one. But in addition to that, experience shows that where specially entrenched foes of this character are attacked, the attack seldom can be made in one grand effort-it must be done by continuously exerted pressure. Every new position gained must be consolidated before a further attack is made. And so I feel with regard1 to the tariff that we must consolidate the position already secured if we hope finally to achieve the result to which all aspire. Then may I say again that in tariff matters I have tried to adopt a consistent position. I think perhaps if hon. members will examine my record on tariff matters before the House they will find that my position in supporting this budget this morning is absolutely consistent. Let me just shortly indicate-and I state this only for the benefit of my friends whose confidence and good wishes I would like to maintain: I am indifferent as to my enemies-the course which I have pursued. In 1922 I voted against the government proposals because to my recollection they went-in fact they did not go at all. In 1923 we had a slight advance, as I recall, on the budget of 1922. There was some lowering of the tariff on some important items-not con-
The Budget-Mr. Shaw

siderahtle but some; there was a turning in the direction at least of freer trade. But in conjunction with that the tariff was also raised* in some particulars. Not only that but we had the introduction of copper bounties, of hemp bounties, and I dio not know what other bounties. And I was surprised to find this year that some of my hon. friends on this side of the House were parties to the introduction at least of one of those bounties. As I say in 1923, because of the suggestion that tariff stability was the thing required and because of that more or less mixed budget I voted against the government's proposals. In 1924 we had a situation which has not persisted, a situation which did not exist before during my experience in this House. An amendment to the government proposals which went a considerable distance in the direction of freer trade was proposed by the hon. member for Centre Winnipeg (Mr. Woodsworth), an amendment which represented my fiscal views on the tariff. I had no hesitation, although I found myself only in the company of sixteen or seventeen hon. members, in supporting the amendment to the budget which was then proposed, but I did not deny support to the government for the proposals such as it made. So I say that my position to-day is thoroughly consistent, if consistency be a virtue. I do not know that it always is, but if consistency be a virtue my position to-day is substantially and exactly in accord with the position I have always taken on tariff questions. More than that I am satisfied that the issue is directly between those who stand for freer trade, be the progress slow or fast, and those who stand for high protection. Personally I do not propose by my vote to give any solace or comfort whatever to the advocates of high protection in this chamber or outside of it. Under the circumstances, in voting against the present proposals of the government it seems to me that I would be directly doing what it is my purpose not to do.
I apologize to the House for having taken the time in discussing my position, but I feel, by reason of the misrepresentation which has been made as to my position, that in all fairness I should make my position perfectly clear.
There are a couple of matters I desire to speak about before I conclude. The first is the matter of rural credits. I sincerely hope that the government this year will not allow the opportunity to pass without giving effect at least to some variety of long term rural credit. We all speak about the importance (Mr. Shaw.]
of agriculture. We all stress its difficulties and its trials. I think we are all well advised in so doing. There is no problem to my mind of such consequence to the farmers to-day, particularly those in western Canada where the need is greatest, as adequate credit facilities at a low interest rate, and credit of a kind suitable to the needs and requirements of agriculture. The farmer in western Canada to-day has only two sources of supply to meet his demand. He may go to the bank, but he cannot borrow money on his real property from the bank, because that is prohibited under the terms of the Bank Act. He may go to a mortgage company but its rates of interest vary from eight per cent upwards. No farmer in western Canada can afford to pay eight per cent per annum, and the result is that the farmers find themselves in continual and increasing financial difficulties. More than that, the Canadian farmer must meet the competition of the world. He must meet competitors, all of whom enjoy rural credit facilities at a much lower interest rate than he himself enjoys, and so I say to the government, if many things must pass by the board, let not this particular subject be forgotten. I know there are interests, financial and otherwise, that are opposed to it. I know that there is propaganda abroad in the land against a system of rural credit, but I say to the government, of all the problems before us no one is deserving of prior consideration to this matter of adequate credit facilities for our farming population.
Another matter to which perhaps I may be permitted to direct the attention of the House is the matter of railway rates. Unlike the hon. member for Nelson (Mr. Bird), I do not hesitate to say that the government has, in my judgment during the whole course of this controversy beginning with the very first session of this parliament, taken exactly the correct and proper attitude with regard to the Crowsnest pass agreement. The hon. member for Nelson has apparently not studied this matter with his usual capacity and industry, because the fact is that in 1922, at the first session of this parliament, the government allowed the one section of that rate agreement covering eastbound commodities,-to come into operation, and in July last year, they allowed, by the effluxion of time and the operation of law, the section of the agreement dealing with westbound rates to go automatically into effect. What else could the government do?' They might have taken the opposite position and introduced legislation to prevent the operation of the Crowsnest pass agreement. But they did not. Along

The Budget-Mr. Shaw
came the Board of Railway Commissioners. They heard a case, and they held in October of last year that the Crowsnest pass agreement, although incorporated in a statute of this country, was not an agreement binding on the railway commission. An appeal was taken to the Privy Council in Canada, and the Privy Council held that the Crowsnest pass agreement, in so far as it had been affected by the judgment of the railway commission, should again come into effect. What else could the government do? There was nothing further they could do. This is the very application which I made before the Governor in Council when I attended here acting on behalf of the United Farmers of Alberta in November last.


Andrew Ross McMaster: Was the appeal made to the Privy Council? Was it not rather to the Supreme court?


Joseph Tweed Shaw: There was an appeal made by the provinces to the Privy Council, and subsequently an appeal to the Supreme Court of Canada. The two methods of appeal are open. Then later the matter came up under the consideration of the Supreme Court of Canada, and that court refused to follow the railway commission andi endorsed the position taken by the Privy Council, the difficulty arises in the restricted application of the Crowsnest pass agreement by reason of the decision of the Supreme Court of Canada.


Mr. JACOBS:: Was not the appeal to the Privy Council in Canada, to the government?


Joseph Tweed Shaw: The hon. member is quite
right. I should have said to the Privy Council of Canada. The position is that by reason of that decision of the Supreme Court of Canada the Crowsnest pass agreement has only a restricted application, and the result is a certain amount of rate chaos and rate discrimination in all parts of Canada. I am satisfied the government must take action in the matter. I trust the government will take no action which will eliminate this Crowsnest pass agreement as a rate-controlling safeguard to the people of western Canada. I think the people of eastern Canada do not realize the significance of that agreement. That agreement arose primarily because, while other parts of Canada had the benefits of water competition, thereby keeping their rates down to a minimum, western Canada, by reason of its geographical position has no such safeguard. Suppose there is a railway deficit and no maximum rate controlling agreement such as the Crowsnest pass agreement, such deficit can only be collected in rates from western Canada. In other words any deficit of the Canadian National Railways could only be made good by the people of western Canada. Now we do not want that. We want to pay our fair share, we pay now some fifteen per cent increase in the rates imposed on eastern Canada. We do not vrant, in addition, to have piled on to that, for the purpose of making our railways show a balance, any deficit that accumulates from year to year.
May I, just in conclusion, suggest that to the appeal for unity in this country, certainly I for one as a Canadian will not turn a deaf ear. We have great difficulties. We have diversities, not only in economic conditions, but in our people. We have racial differences, religious differences. It is urgent, and vitally important, that every effort should be made to weld a real nationality out of Canada as it exists to-day. Ours is a country struggling against the facts of geography; and unless we are prepared to do our part in seeking and furthering all proper plans or suggestions by which we can preserve unity, this country has a very sad future. As a Canadian I have always objected to and will continue to protest against the suggestion of secession in this country. In western Canada there are, from time to time, suggestions of that kind, and I think they should be frowned upon, not only because they are impossible of accomplishment but also because the last state would be worse than the first. This would, without question, divide the country and make impossible of success the result that we should achieve, make impossible the achievement for this country of the destiny which, I am sure, we all hope for and desire. No mere Hudson Bay railway will solve the problems of Canada. I for one quite frankly am against the Hudson Bay railway proposal. I am satisfied the people of western Canada are not a unit at all in connection with that project. I know, in the province from which I come, by reason of the opening up and development of the Vancouver route not nearly as much interest is taken in it as in other days. But this is not a plan which will solve our problems. We require the closest studentship into the great economic difficulties that surround us if we hope ultimately to secure unity, and after all political unity can be based only upon economic solidarity.


Mr. HOEY:: Did the United Farmers of Alberta at their last conference not pass a resolution asking for the immediate completion of the Hudson Bay railway?

The Budget-Mr. Black (Halifax)


Joseph Tweed Shaw: The United Farmers of Alberta from year to year have passed such a resolution. This year,'if my recollection is correct, there was no discussion on it at all. If the project had been discussed, I doubt in view of the changed conditions that I have suggested, if the proposal would have received anything like the support that it did receive.


Mr. McMURRAY:: Before Alberta got an opening through to the coast, were the people of that province not very much in favour of the Hudson Bay railway?


Joseph Tweed Shaw: I rather think they were.


Mr. W. A. BLACK (Halifax):: Mr. Speaker much has been said respecting the budget; it has been many times criticized and attempts have been made to uphold it. I will not take up the time of the House over it except to say that, with conditions as they have been in Canada during the past twelve months, with well-managed business houses closing their books, year after year, with a loss, is it reasonable to suppose that the business of this government, or any government, managed in an unbusiness-like way, can show a profit? -to have a surplus-I do not believe the budget, as presented to this House, represents the actual financial state of the country.
In my address before this House last session, I deplored the situation in relation to the Maritime provinces, especially regarding Nova Scotia, and I expressed the hope that some stepd might be taken by the government to discover causes and apply remedies. I hoped that my colleagues representing that province would exert themselves to disclose reasons for the depression now existing amongst us, and endeavour to improve conditions. Further, I referred to the fact that I had lived in a preconfederation period and have had personal experience of the results which have come to the province since the formation of the union. I was speaking with knowledge. I speak now with knowledge. Impressed by that knowledge, after laying the case as fairly as I could before the government and parliament, I said this:
I implore the government to rectify the grievances. I say to you, Mr. Speaker, and the country, that early action is imperative. I warn you that failure will bring us all to regret, if not to disaster.
Now, after a year is passed, I ask myself if anything has been done by the government of the day to rectify the grievances which I referred to; or to insipre the people of the province of Nova Scotia with confidence in the government; or to decrease discontent and distrust, and to increase buoyancy of spirits and contentment. I am forced to say that con-

ditions are worse to-day than they were a year ago, and that the government has not taken any heed of the warnings I venture to give them.
I realize that the government has proposed a change in the tariff on coal. This is being reluctantly done after persistent representations were made to them. But it is a small measure of the justice which the province of Nova Scotia demands-which it justifiably demands-and which it should be receiving at the hands of the government.
At the time representations were made to the government in regard to the coal duties, the need of tariff assistance for the Nova Scotia steel industry was just as strongly urged upon them. But nothing is being done for it. The argument for the one is just as powerful as the argument for the other. Why, I ask, is the province being put off again with a pittance instead of substantial justice? It is a well known fact that the government's tariff changes of 1924 militated seriously against the stability and progress of the Nova Scotia steel industry. Certain of its products were the raw materials of other industrial plants in central Canada. These plants were the only markets of the Nova Scotia steel industry for such products. This government deliberately took those markets from the Nova Scotia steel industry. They did that by tariff changes which permitted the plants in central Canada to import, free of duty, products of the classes I refer to, for the purposes of their manufacturing business; and worse still, they enlarged the classes of plants which might thus import such products free of duty. This action of the government was a telling blow at the Nova Scotia steel industry. It deprived that industry of markets. It forced that industry partially to close its doors. Its men were laid off. The injury extended to the coal mining industry. The quantity of coal used in the steel plants was substantially reduced. Men who work in the mines were thrown out of employment, or put on short time. In brief, the government's decision to let foreign steel makers supply the products which should be made in Nova Scotia, and foreign labour do the work which should be done by Nova Scotia labour, contributed largely to the industrial debacle which is now being witnessed in eastern Nova Scotia and which is palsying the whole economic life of this province. When representative men a few weeks ago presented these matters to the government, and besought them to deal fairly with those two fundamental and vital industries of Nova

The Budget-Mr. Black (Halifax)
Scotia, coal and steel, the government grudgingly agreed to make a small concession to Nova Scotia in regard to coal, but turned a deaf ear to the equally convincing argument for justice in regard to the steel industry.
This government is pursuing the fetish of low cost of living as if it were a thing of substance. It is only an incident of existing conditions. Low cost of living is the evidence of few opportunities. Higher cost of living is the evidence of many opportunities. Of what advantage, might I ask, could cheap living be to the men of the coal mining industry and their families in eastern Nova Scotia when they are unable to obtain employment and earn wages? Give them steady work and good wages and they would never be heard grumbling about high cost of living. The government magnifies this fetish into a creed, apparently thinking that the acme of contentment would be reached if everything were cheap. How can everything be cheap unless wages be lowered, and people be willing to adopt primitive methods of living? Shall we emulate the nationalities that are contented to live in squalid conditions, whose spirituality finds no expression in the comforts and accompaniments of modern life as we would have it in our own country, in order that Canada may be advertised as a cheap country? I say, Mr. Speaker, that the government's policy in this regard is founded in error, and stupidly persisted in. Let prices go up, let wages go up, let opportunities increase, let prosperity grow. These things are all incidents one of the other. It is infinitely better to have a country so conditioned, than one in which a man can live cheaply, but find himself in a dead environment.


Mr. ARCHAMBAULT:: I rise to a point of order; I call to your attention, Mr. Speaker, the fact that the hon. member is reading his speech, which is contrary to the rules of the House.


Hewitt Bostock: Unquestionably it is
against the rules for any hon. member to read his speech, but I must say that in the course of this long and protracted debate there has been a tendency in all parts of the House, if not to abuse, at any rate to deviate from the spirit of this rule. Hon. members on all sides have been reading their notes. There are certain amenities that should be observed in the House and when a new member is speaking he is generally accorded by unanimous consent the courtesy of referring to his notes. Under the circumstances I would
ask the hon. member (Mr. Archambault) not to press the point.


Joseph Archambault: It is now two
o'clock in the morning and I think that the Speaker should enforce the rule
2 a.m. in this case. We have been listening to speeches all night and we shall probably not reach a vote until five or six o'clock. The hon. gentleman is not a new member, and he read his speech last year. I insist on the point of order.


Hewitt Bostock: The spirit of the rule is of course that no speeches shall be read. But I cannot prevent the hon. member from referring to his notes, and I take it that this is all he is doing.


William Anderson Black: I assure you, Mr Speaker, and the hon. gentleman who has interrupted me, that I am merely following some extended notes as did the hon. gentleman, Mr. Archambault, when addressing the house two days ago. There has been a great deal of discussion in which the issue has been the state .of the country in general. On the government side, reams of figures have been put into Hansard to prove that Canada is prosperous. I may say that these figures do not prove anything. We have only to look around and see with our own eyes and know that the figures do not truly testify. If this great mass of statistics were collected and published in .one massive volume, and were placed in the hands of the people of Nova Scotia, not one mind would be convinced by them. The people would not be convinced because they know by personal experience and through personal knowledge that Nova Scotia was never, in all of its history, passing through such a gruelling period of depression as it is suffering to-day. Yet this government thinks to make Nova Scotians believe that they are really in a golden era; and that that golden era is the product of the wisdom and activity of the government. When Nova Scotians ask for bread they are handed a stone. When they ask for redress of grievances and the granting of a fair measure of justice in accordance with the undertakings given at the time of confederation and since then, they are supplied with volumes of figures, and are told tc study those figures and be satisfied that the government of the day is providing bountifully for them, and have bestowed' upon them prosperity such as they never enjoyed.
It is a tragedy in history that there should be in control of the affairs of this country a government so blind to facts, and so impervious to the force of reason, and deaf to the

The Budget-Mr. Black (Halifax)
calls of justice, as is the government now in office in Canada.
I shall) not repeat what has been often well said in regard' to the understandings and agreements which were corner-stones in the union of the provinces in 1867; which understandings and agreements, Nova Scotia claims have not been faithfully lived up to; dn respect to which Nova Scotia claims redress. These matters have been fully set before the governments of the dominions. But the people of the province are stall forced to wait for a square deal.
Let me remind the House further of that other later period of history, pregnant with interest to Nova Scotia, when the government of the day assisted the great ventures of constructing second and third transcontinental lines of railway at enormous cost. We in the Maritime provinces were again given pledges by the government. We were invited to support the government's pdlicy, with the assurance that it would mean the inauguration of national transportation on Canadian territory and through Canadian ports. Our country was to be freed from the domination in commerce and transportation of the neighboring republic. The Maritime provinces were to reap the direct and fructifying fruits of this national (policy. At last some justice was to be accorded to them. This is one of the pledges given in 1903 by Right Hon. W. S. Fielding, now Finance Minister whose continued) illness, I, in common with other hon. members, deplore:
Surely, Sir, the time has come after years of deception, humbugging and trickery about the lines of the Maritime provinces, that faith should be kept with these people, and they should have a through line running on Canadian territory from ocean to ocean.
I might refer to the national pledges which the then Prime Minister, Sir Wilfrid Laurier, and his government gave to the people, speaking in the House on July 30, 1903. On one occasion he said:
Now, Sir, we lay it down as a principle, upon which we are to be judged by friend and foe, that we are to have a transcontinental railway, and that its terminus must be in Canadian waters, and that the whole line, every inch of it, must be in Canadian territory. We say further, that such a line is a necessity to our commercial independence.


Joseph Archambault: I beg to move
that by unanimous consent the hon. member have leave to put the notes on Hansard.


William Anderson Black: I will quote again, Sir, from the speech of Sir Wilfrid Laurier on the occasion referred to. This is what he said:
Now, there is another feature of this contract to which I shall call the attention of the House. If we have gone into this contract, our intention has been, 
as stated in the preamble, to force traffic in Canadian channels and through Canadian waters. We have made it a special condition of the contract and this condition is expressed in section 42, as follows.
The section referred to, paragraph 42, reads as follows:
It is hereby declared and agreed between the parties to this agreement that the aid herein provided for is granted by the government of Canada for the express purpose of encouraging the development of Canadian trade and thip transportation of goods through Canadian channels. The company accepts the aid on these conditions, and agree that all freight originating on .the line of the railway, or its branches, not specifically routed otherwise by the shipper, shall, when destined for points in Canada be carried entirely on Canadian territory or between Canadian inland ports, and that the through rate on export traffic from the point of origin to the point of destination shall at no time be greater via Canadian ports than via United States ports, and that all such traffic, not specifically routed otherwise by the shipper, shall be carried to Canadian ports.
Paragraph 43 emphasizes that. It says:
The company further agrees that it shall not, in any matter within its power, directly or indirectly advise or encourage the transportation of such freight by routes other than those provided above, but shall in all respects, in good faith, use its utmost endeavours to fulfil the conditions upon which public aid is granted, namely the development of trade through Canadian ocean ports and Canadian channels.
These two sections have been a dead letter since they were written twenty-two years ago. Again, in 1911 when the 'Canadian Northern Ontario railway was seeking assistance, we had this provision in the legislation granting that assistance:
It is hereby declared that the aid herein provided for is granted by the government for the express purpose of encouraging the transportation of goods through Canadian channels.
Then again in 1914, when that same railway was applying to parliament for $45,000,000, we had this declaration:
That at all times hereafter all freight originating on the lines of the Canadian Northern Railway, or on the lines of any of the constituent companies, or on any line or lines of railway now or hereafter owned, leased or operated by the Canadian Northern, or by any of the constituent or subsidiary companies, their successors or assigns, shall, when destined to points in Canada, be carried over the lines of the Canadian Northern or of the constituent companies, or over some other Canadian railway or railways (which term shall include the line operated by the Canadian Pacific Railway Company between Montreal and St. John, N.B.) and that the through rate on export traffic from the point of origin to the point of destination shall not be greater via Canadian ports than it would be via United States ports; and that all inward and outward ocean traffic shall be carried to Canadian ports, and that the Canadian Northern and the several constituent and subsidiary companies shall not, in any matter within their power or control, directly or indirectly advise or encourage the transportation of any such freight by routes other than those above provided, but shall in all respects, in good faith, use their utmost endeavours to further the development of trade through Canadian channels and Canadian ports.

The Budget-Mr. Black (Halifax)
I have not taken the time to read these paragraphs in their entirety, but with the permission of the House I would ask that they be placed on Hansard.
Again I would quote from the Right Hon. W. S. Fielding, as follows:
With this road built, instead of being dependent on the Canadian Pacific Railway only, St. John will have two strings to its bow. Not a pound of traffic that goes to St. John now will be taken away, and St. John will stand its chance of getting a fair share of the new traffic to be created by this road. Halifax with its peerless harbour will have advantages which it has not hitherto enjoyed. Surely, Sir, the time has come after years of deception, humbugging and trickery about the lines to the Maritime Provinces, that faith should be kept with these people, and they should have a through line running on Canadian territory from ocean to ocean.
What, may I ask, is the faith that was to be kept ; and how has it been kept? While these assurances were being given out by the leaders I have mentioned, in another place, the Hon. Mr. Scott, cabinet minister in the government of Sir Wilfrid Laurier, was explaining the situation in these words:
Therefore, it is to our interest if we are going to have that grain go east through Halifax and ports along the St. Lawrence, to do something to induce it to go there.
It goes without saying that Nova Scotia has contributed its full share to all public works in Canada. But let us consider her position in this matter. The Maritime provinces' portion of the cost of railways and canals since confederation amounts to the huge sum of $304,745,338. Nova Scotia, having a population of a little less than one-half of the three provinces, pays, $152,372,669, or say, $150,000,000, which is equal, in round figures, to 2| millions annually. What has Nova Scotia in return for this huge expenditure? Not a foot of transcontinental railway was ever built in the province-not a canal.


William Duff: Where would you build canals
in Nova Scotia?


William Anderson Black: You can answer
that.


William Duff: I am asking you.


William Anderson Black: These figures are
amazing, and I am sure will surprise not only members of this House but the country generally, and especially Nova Scotians. Public buildings cost Nova Scotians about $150,000 annually, over and above income. Under such conditions as these, can the government of Canada ignore the demands of the Maritimes, especially those of Nova Scotia? But, Mr. Speaker, faith has not been kept. The railways have been built. First the Intercolonial railway, which was to be the special agency
for the development of the Maritime provinces by providing those provinces the means of reaching the markets of central Canada. Later the railways sponsored in 1903 were built for the purposes mentioned by the leaders of the country whom I mentioned. But instead of helping developing the Maritime provinces, instead of helping them and making them prosperous; they have been converted into agencies for the depression of those provinces. They have become millstones around the necks of the Maritime provinces. They have imposed freight rates which deny Maritime people access to the markets that were warranted to them in the days of nation building. Listen while I read the language of Premier Armstrong in regard to this matter:
The remedy for this condition undoubtedly lies in a Canadian-wide appreciation of Maritime disability, and a general realization that excessive freight rates are choking out our industrial life.
I do not preach sectionalism; such is inadvisable, in fact deplorable.
Nova Scotians are not suppliants. They ask that pledges be carried out. A policy is what they want which will benefit all sections of the country. This government has no policy that benefits any section of our Dominion.
The question of freight rates is a burning one with Nova Scotians. So exorbitant are these rates that traffic is being handled daily by other means. I give one instance:	The
freight rate on brick, less than car-loads, from Pugwash to Dorchester, is one and a half times greater than the cost of the brick. I read this morning that sugar is being Shipped from the Halifax and St. John refineries to Montreal by water-the freight and charges being less than if shipped by rail.
Western shippers complain of ocean freight rates when they reach 10 per cent of the value of the article shipped; what would they say if the rates were from 50 to 150 per cent of the value of their products?
In addition to this, the 5 per cent sales tax is a serious handicap on basic commodities used in the building trades.	*
As to the promises of 1903, not a vestige of satisfaction has been awarded to the people of Nova Scotia. The keeping of faith is still a mere figure of speech. And the grain spoken of by Hon. Mr. Scott has been pouring out through foreign ports without regard to promises made or the vital necessity of building up Canadian commerce on Canadian territory, and doing at least some of the "forcing" through Canadian ports, which Sir Wilfrid Laurier so vividly portrayed and pledged the country to see done. '
2692	COMMONS
The Budget-Mr. Black (Halifax)
I do not overlook the fact that after prolonged electioneering dodging, a contract is at last let for the construction of a small grain elevator at Halifax. The government evaded its election promises in this regard as long as it could, and only took steps to have the promises made good, -in part after it was driven out of every hole of retreat. This, again, is but a slight instalment of the "good faith" promised to Nova Scotia over twenty years ago. It will not go very far towards restoring the province to its rightful place in the Canadian confederation. The government cannot excuse themselves by asserting that they do not possess understanding of the minds of the people of my province and the other Maritime provinces. It is well known that the Premier of Nova Scotia has been at Ottawa on several occasions, and that he brought back with him alleged glittering assurances from the government there. These have proved to be entirely made of tinsel, which quickly fades. If Premier Armstrong truly reported what was said to him by the Prime Minister and others of his cabinet, we are again forced to the conclusion that good faith is not being kept.
Twelve months ago, after the duty on fertilizer was reduced, a factory in Halifax closed down. The buildings are now vacant, and the machinery idle. This factory gave employment to a number of men, nearly all of whom supported families; to-day they are probably with the tens of thousands across the line, to the south of us. This factory was a further benefit to Halifax, because the company imported cargoes of raw material, such as phosphate rock, bones, and so forth, and the vessels which brought these cargoes disbursed large sums of money in the port-pilotage, for instance, hospital dues, port wardens' fees, tug-boat charges, wages earned by longshoremen in the discharging and storing of the cargoes, insurance thereon; furthermore, each of the members of the crew of the vessel, from the captain down, receives the wages due him, or at least a portion thereof, a portion at least of which is spent amongst the shopkeepers of the city. The vessel is provisioned for her next voyage and buys more or less paint, rope, canvas, and so forth, possibly going into dry-dock. Quite a large sum of money is disbursed in this operation which is now lost to our longshoremen, shop-keepers and others. This is a concrete instance of the value of one small industry to a community. After the closing of this factory, what did I find? Belgian fertilizer was imported and advertised, and as evidence, I could exhibit an advertisement, a whole page nearly, in large

attractive letters and form. Details of this kind are, perhaps, not often given in this House, Mr. Speaker, but I look upon these cases as a striking result of free trade policy in this country, and worthy of mention.
A similar factory in Sydney, was also closed down.
Now a word as to immigration. The Mari-times have not even been thought of, or mentioned, in this connection. They have no status in the Immigration department of this government. A suggestion was made to that department that half a dozen families of Hebrideans out of several hundred reported coming to Canada this spring be located in Nova Scotia, but the idea was pooh-poohed; all these people were wanted out west. Yet out of the two hundred and one-third millions of dollars spent on immigration by Canada, Nova Scotia contributed $400,000 of this amount, without a family being located in that province.
National Parks receive liberal federal aid, about $2,763,000 having been spent on such parks throughout the entire country, but the Maritime portion is insignificant.
I submit, Sir, that the Mari times are a valuable asset to Canada, contributing as they do so generously to the finance of this country, and possessing such exceptional and diversified natural resources, but apparently no place have they in the minds of this government.
Owing largely to the immigration policy of the United States, the number of steamers calling at Halifax has considerably increased. The dock facilities are insufficient, and these steamers are delayed in consequence on account of the incomplete wharf and shed accommodation at the new terminals, and although the department of the government responsible for this work has been repeatedly appealed to for completion of these different works, nothing has been done. Again is Nova Scotia ignored, as she is in so many other instances.


William Duff: Does my hon. friend say that this government is responsible for the build-' ing of the Halifax terminals?


William Anderson Black: They are responsible for not completing them.


William Duff: You said they were responsible for building them. The Tory government built them, and you know it.


Arthur Meighen: You are getting sleepy.


William Duff: The hon. member is.

The Budget-Mr. Black (Halijax)


William Anderson Black: Hundreds of
thousands of dollars can be spent on radios, but not one dollar can be obtained for the completion of the necessary sheds and facilities for economically conducting the business of the port of Halifax.
Very recently, however, as this House knows, a very large delegation of Maritime province men came to Ottawa to interview the government and the members of parliament; and to lay before them the case of those provinces. I am speaking in the hearing of honourable gentlemen who saw and heard this delegation; and I can safely leave it to them to say whether or not that delegation presented a powerful argument on behalf of the Maritime provinces. I am satisfied that they did; and that what was said shows conclusively that if this country is to make the progress which we all, as good Canadians, desire, measures must be adopted to wipe out the discontent which prevails in those provinces, and to give the people substantial reason for believing that they are not to be further treated with disdain. This feeling, I regret to say, prevails. I can call Premier Armstrong to witness on the point. In April, 1923, an interview with him was published in a Montreal newspaper, and he expressed himself as follows:
While dismissing any ideas of secession, however, the Premier pointed out that the people of the Maritime provinces felt keenly that they have not been fairly treated by the rest of the Dominion. They have been made to feel, he said, that they are and should remain isolated, more or less forgotten, tolerated at the best and not provided for like the more fortunate provinces to the west.
I commend these sentiments to the earnest consideration of the government. They should convince the government that the utterances of the Maritime provinces are not the catchpenny cries of a few partisans; but are the expressions of sincere convictions of the whole people. And I remind the government that it is disastrous to the whole country to have any parts of Canada imbued with the conviction that justice is not being done.
What I have just said is emphasized by the stand which the government of Nova Scotia is now taking in regard to what are deemed to be the wrongs and the rights of the province. Premier Armstrong has submitted to the legislature a series of resolutions in which he sets out these wrongs and rights as his government sees them. It is unnecesary for me to say whether I concur in all of his views. For the purposes of my argument it is sufficient to state that the government of the province, now confronted with general elections which must be held within a few weeks, is forced by existing conditions to agonize
over the distressful state of the province, and to appeal to the government of the Dominion and this parliament for the square deal which has been so long denied. It may be true that Premier Armstrong is taking this action because his government has lost the confidence of the people, and he hopes by these means to win back that confidence. The fact remains that the people are dissatisfied and discontented, that the province is not making progress, that the outlook is discouraging, and that the blame is largely placed on the shoulders of the Dominion government for neglecting to recognize the just claims of the province.
This is how the people are thinking; and it is vitally necessary to eliminate this conviction from their minds, if it be desired to have contented Maritime provinces and a united Canada. Hon. members will see that I am not exaggerating. The final proof, if any more were needed, is expressed in the attitude of the Armstrong government, the friends of the government of the Dominion. The Armstrong government would not assume the attitude I have described if thev did not feel themselves forced into the position by the overwhelming power of public conviction in the province, and their own impending destruction.
Nova Scotians are still crossing the line- the best blood of the country, skilled in all departments of work-in order that they earn a livelihood. It is said that there are more Nova Scotians in Massachusetts and the New England states than in the province itself.
I,	at times, picture our fair province with all these native born at home-Halifax, a city of 150,000 and all other parts of the country doubled or more in population. What a bee hive we would have. What numbers to feed, clothe, and so on. But alas! Industries are closed, markets are unreachable, and on all hands there is idleness.
In conclusion, therefore, I again entreat the government of the day to give heed to the warnings that come from Nova Scotia. I repeat what I said last year, that early action is imperative. I repeat the warning, that failure will bring us all regret, if not disaster.


Mr. HARRY LEADER (Portage la Prairie) :: Mr. Speaker, while I am sorry to have to make my remarks at this late hour, I do not intend on that account to apologize for a moment. I claim it is my right to make the observations I intend to make to-night, and that in doing so I am only performing my duty. During the debate on the Address
The Budget-Mr. Leader

in reply to the Speech from the Throne, arrangements were made to desist from further discussion. I as a Progressive member was the next on the list to speak when that arrangement was arrived at, and I agreed to drop out. I would have been willing to do the same to-night, had such an arrangement been made in time, I would gladly have agreed to any proposal such as that. I do not think the time is entirely lost in discussing matters here; but when a debate is drawn out to the length that this one has been, I do not think there is any real value in any further discussion. However, I must make my remarks even at this late hour. Hon. members will wonder, perhaps, what it is I have to say. They will wonder if I have anything new to offer, and I think perhaps I have. My remarks will be based more especially upon the Auditor General's report, and I will have figures to prove any of the statements or arguments that I advance.
I intend on this occasion to make a plea for economy, as I have done on previous occasions in this House. Hon. members have discussed the same question; in fact there have been pleas for economy from all sections of the chamber. But the truth is, Mr. Speaker, that we prate about economy and forget the very first principle involved in it, and that is to spend less money. I am going to make the charge that this government have failed to adopt any real policy of genuine economy, notwithstanding the excellent speech delivered by the Prime Minister to-night. He told us that we had a surplus of $11,000,000 over ordinary expenditure this year, but he admits that there was an increase in the public debt of between two and three million dollars. It appears to me, Mr. Speaker, even with my imperfect knowledge of book-keeping, that we are still in the hole, and that we have cause to worry yet. I intend to prove that this government have not enforced a policy of economy to the satisfaction of the people who have to pay the bill if not to the satisfaction of the government itself. Can I not say in truth, Mr. Speaker, that every revision of the salaries of the public servants of this country since this government came into power has been a revision upwards? Can I not say that this government have found offices for a group of favorites? In this connection I might mention Mr. Duncan Marshall, and Hon. Dr. Pugslev now deceased, not forgetting W. T. R. Preston. I want to prove on the present occasion that not only has there been an increase in the inside government offices in Canada, but there has been an increase in the expenditure in the outside service. I 
have some figures here extracted from the Auditor General's report of 1923 and 1924. I wish to place these on Hansard for their educational effect, because I do not believe people know money is being spent in this manner. First, I wish to say that there has been an increase in the expenditure on the high commissioner's office in London; In the year 1923 the total expenditure in connection with that office was $112,107. In 1924 it had grown to $121,905, an increase of $9,978. The Paris agency in 1923 cost $29,942, in 1924 $31,065, an increase of $1,123.
The Canadian representative in the United States in 1923 cost $10,994; in 1924, $13,008, an increase of $2,014.
Now it seems to me that a policy of economy can be inaugurated in regard to our overseas offices. I see there are travelling expenses in connection with the high commissioner's office, notwithstanding the fact that he is drawing a salary of $10,000 a year and $5,000 in lieu of house and furniture. I see he has a travelling account in 1922 of $2,913, in 1923 a travelling account of $4,168 and in 1924 of $5,265. In the Paris agency we have a man by the name of Philippe Roy. He receives a salary of $14,000 a year, and in addition to that a bonus of $500. As far as I can go back in the Public Accounts, I find he has an allowance of $3,000 for the maintenance of an automobile. It seems to me that $3,000 would purchase a brand new automobile every year, and I think economy should be exercised there. In 1923 I see he had a travelling account of $1,582.
I have on previous occasions placed the fact before this House that we have spent considerable amounts of public money in entertainments, public dinners and so on. I do not intend to go into that at length to-night, but I have selected' four items which I intend to give to the House. These are not all by any means, because in going through the Auditor General's report and the Public Accounts we will find there are dozens of public entertainments and dinners. Sometimes we find items of $50 and $75 for cigars and cigarettes.
I do not wish to be partial or to make any charges against the present government that cannot be made against all previous governments, and' therefore I have selected two dinners from the Auditor General's report of 1921, first a dinner to the Imperial Press Conference in Ottawa which cost the sum of $1,335.56, and also a dinner to the French Mission at the Country club which cost $1,257.67. That was the previous government. In 1923-and now it is the present government -we find an entertainment at the experi-

The Budget-Mr. Leader
mental farm Ottawa, $1,115. Then there is a grant to the entertainment of the A.V.M.A., $1,000.


An hon. MEMBER:: What is that?


Harry Leader: I cannot tell you. It is all very well, Mr. Speaker, to say, "Hurrah boys!" when you are spending other people's money. I want to read to the House to-night some of the hotel bills we have paid for distinguished visitors coming to Canada. The figures I am quoting are from the Auditor General's report of 1921. These expenses were incurred by the previous government. The expenses are as follows:
French mission, hotel expenses, Chateau
Frontenac Hotel	$080
Windsor Hotel, Montreal	 872
Chateau Laurier, Ottawa	 755
King Edward Hotel, Toronto	 339
Royal Connaught Hotel, Hamilton ....	458
Clifton Hotel, Niagara Falls	 757
Of course they had to see the falls. Then the previous government also entertained a lady-a distinguished lady no doubt-by the name of Miss Cartier. One of her expense bills in connection with the Ritz Carleton hotel was $1,218.


William Alves Boys: Can the hon. member verify
that?


Harry Leader: Yes, everything I have
said is accurate. I have some figures here in regard to trips taken by members of the government and cabinet ministers attending conferences in Europe. I am also going to give figures of expenses incurred by the previous government and expenses incurred by the present government. In 1921 we start off with the ex-Prime Minister (Mr. Meighen) travelling expenses $7,293, and Hon. Dr. Tolmie, $6,831. Then we have expenses of delegates to the League of Nations at Geneva:
Hon. C. J. Doherty, Sir George Foster,
Hon. N. W. Rowell	 $14,645
At the Genoa conference we have travelling expenses as follows:
Sir Charles Gordon	 $8,000
Edouard Montpetit	 8,000
Then these distinguished gentlemen I have last mentioned have had the sum of $1,131 for hospitality fund entertainment. I do not know what that would mean, unless it would mean that they took $1,131 and said, "Hurrah boys! have this on me to-night".
Then we have the conference-also by the 'previous government-on the Limitations of Armaments at Washington, headed by Sir Robert Borden, with a total cost of $17,956.57. Then expenses incurred here, including $1,500 for a second hand Cadillac car. The car had
to be repaired and insured. Making a total cost of $1,938.
Now we come to expenses incurred by the present government. First is travelling expenses to the League of Nations:
1923: Travelling expenses to the League of Nations:
Hon. W. S. Fielding	
Hon. Ernest Lapointe and
staff	 $15,391	00
Expenses of Mr. Fielding to
Brussels and Paris	 8,265	00
International Labour Conference:
Hon. Ernest Lapointe	
1,784	00Hon. James Murdock	
3,482	00Total expenses of delegates..	$12,625 00
1924: Imperiail Economic Conference:
Travelling and living expenses of Premier King
and staff	 3,032	00
Hon. Geo. P. Graham and
staff	
6,217	00Sir Lomer Gouin and staff..	6,698	00

The Budget-Mr. Leader
with the stock promoters-commercial travellers, you might call them-that are employed in that department.
Again, placing the two old parties together, because many people say that there is very little difference, if any, between them, I have gone to the trouble of finding out what the travelling expenses of the previous government amount to, and I find they total up almost equal to those of the present government.


Samuel William Jacobs: Does the hon. member contend that these people should travel for nothing?


Harry Leader: I do not, but I am pleading to-night for economy. There is room here for us to save a few hundred thousand dollars to the taxpayers of this country, if we would utilize the keen brains that, I know, each and every one of the ministers possesses.


Samuel William Jacobs: Is the hon. member able to place a figure upon what these gentlemen should have spent when in Europe?


Harry Leader: I do not know, but I think if they were travelling at their own expense, they could cut it one-half. As I stated before, what I am saying to-night is a matter of education for the people of this country, because I do not believe they know how their money is being spent.
I want now to deal briefly with some extracts from the Auditor General's report in regard to our external affairs. The duty and function of the Minister of External Affairs who, in our case and in that of the previous government is the Prime Minister himself, is one of entertainment. A great deal of the money spent in that department is spent in entertaining distinguished visitors who come to Canada. I am going to read to the House some of the expenses incurred by the previous government. This is taken from the Auditor General's report for the year ended March 31, 1922:
Visit of Premier Massey of New Zealand.. .. $ 593 11 Unforeseen expenses	 606 11

Visit of Admiral Beatty	 $1,506 S3
Visit of delegation from Washington of American senators and congressmen	 1,517 20
Dinner at Uoyal Ottawa Golf Club, $695.65;
special cars to golf club, $45	
740	65Luncheon at Chateau Laurier	
300	00E. J. Chambers, personal services, $300; travelling expenses, $176.55	
476	55
Visit of Marshall Foch ($1,053.70)-
Hotel expenses: Chateau Frontenac, Quebec,
$134.45; Windsor Hotel, Montreal, $258.50	392 95
Auto hire, $486.25; telegrams, $42.58; sundries, $27.92	
556	75E. J. Chambers, travelling expenses	
104	00
Then, coming to 1923, we have the following expenses incurred by the present government: 
Visit of Rt. Hon. Srinivasa Sastri ($6,106.84)- Transportation, $1,451.78; supplies for private car, $316.79	 1,768	57
Hotel expenses:
Victoria, $447.40; Vancouver, $186.45; Lake Louise, $35.50; Banff, $25.95; Winnipeg,
$76.75; Ottawa, $268.41; Montreal, $602.65;
Quebec, $202.40	 1,845	51
Dinner at Country Club, Ottawa, $635.85;
entertainment at Niagara Falls, $46.30.. ..	682 15
Motor hire, $405.90; telegrams and telephone messages, $178.48; baggage transfer, $78.60	662	98Meals, $50.10; tips, $155.45; album of press clippings, $125	
330	55
No doubt this would be interesting reading to that distinguished visitor when he reads all the nice things that the Ottawa papers said about him. There is another item here from the Auditor General's report of 1923-24, in connection with unforeseen expenses: Transportation and entertainment of distinguished visitors to Canada; Australian Trade Delegation, $763.09; Rt. Hon. D.
Lloyd George, $913; President Harding of the United States, $5,082.21 ; Hon. Chas.
E. Hughes, Secretary of State of the United States, $1,278.85; Rt. Hon. W. F. Massey,
Premier of New Zealand, $1,076.15;
Premiers of New South Wales and Victoria, $501.76; Hon. E. J. Theodore,
Premier of Queensland, Australia and party, $682.15; Hon. W. R. Warren,
Premier of Newfoundland and party,
$6,255	 $10,359 76
Cadillac car for Prime Minister, $7,150; less allowance for old car, $300	 6,850
There is a story in connection with this car. Going back to the second-hand Cadillac car purchased by Sir Robert Borden in Washington, I think if you follow it up, it is the Old car that they traded in for an allowance of $300 on this $7,000 car. That seems to be very poor business. We are all business men in this House, and I do not think any hon. member here would undertake to bring over a $1,900 car, pay duty and freight on it, and then trade it in for $300 on a new one. A lack of business is shown in all these departments and even in that of the Prime Minister himself.


Samuel William Jacobs: How long was that car in
use?


Harry Leader: Less than two years, I
would say-between the time of the delegation at Washington and the time the government was defeated. The hon. member knows himself the time that intervened between those two dates.
What I am about to refer to now is rather of a personal nature. I regret that very mudh, but I think I have charity for all and certainly I have malice towards none. I intend, however, to use the motto used by the Hon. Alexander Mackenzie, and that is "to

The Budget-Mr. Leader
seek no man's favour and fear no man's frown." I think too much public money is being paid to able-bodied men in pensions. Last year I think I brought before the House the fact that we have thirty-eight judges drawing pensions, many of whom are still able-bodied and quite capable of work. Some of them are living in a foreign country and the taxpayers have to go down in their pockets and pay pensions to these retired judges. I think the annual payroll to these retired judges is in the neighbourhood of $200,000. I have before me a newspaper clipping which expresses certain views in regard to the matter in better language and more concisely than I perhaps could, and I intend to take the liberty of reading it to the House. This was clipped from a paper printed in Toronto called the Orange Sentinel some time last fall. The item that I am going to quote is entitled "A Scandalous Abuse." It reads:
When a man can retire from the public service with a superannuation allowance of six or seven thousand dollars a year, and then engage in other activities that bring him anywhere from four to ten thousand dollars a year additional, it must be admitted there is something wrong with the act.
The principle underlying superannuation must surely be to provide for old servants of the country when they become unable to carry on their work. To shield an old public servant from poverty in his last years is a duty the state owes him. He, on the other hand, owes a duty to the state to perform his official duties as long as he can do so efficiently. It should not be possible for a man like General Fiset to retire from the service at fifty years of age with a pension of $0,000 a year. He is physically fit to continue as Deputy Minister of Defence for ten, or perhaps twenty, years yet. But he becomes a six-thousand-dollar-a-year-burden on the country, and then takes a place in the House of Commons, from which he will draw four thousand dollars a year more. If he is vigorous enough to run for parliament, and to bear the strain of a five months' session, he is strong enough to retain his place as deputy minister. It is nothing short of an outrage that he should be permitted to draw a double income from the taxpayers.


Eugène Fiset: Will the hon. gentleman permit me? He should inquire about the real facts of the case instead of reading extracts from papers that, not only he is not sure of, but contain absolutely blunt untruths.


Harry Leader: If I am reading anything
that is untrue, I am very sorry, but I do not accept the responsibility.


Eugène Fiset: Then you should
not mention it.


Harry Leader: It was given in good faith and if the hon. gentleman will contain himself for a few minutes he will have an opportunity to speak when I am through.


Mr. POULIOT:: Do you believe all that is written in the Orange Sentinel?


Harry Leader: If the hon. member is
vigorous enough to bear the strain of a five-months' session, I say that he is strong enough to take his place as deputy minister and he should not be permitted to draw a double income at the expense of the taxpayers.


Mr. MACDONALD (Pictou):: Let me assure the hon. gentleman that the hon. member for Rimouski (Sir Eugene Fiset) at the time of his retirement was pronounced by the best medical authorities of Canada to be incapable any longer of holding the position he then filled, and this by reason of the severe illness he had gone through. It is fortunate for Canada that Providence has spared him and enabled him to come through. The conditions surrounding his retirement were vouched for by the best medical authorities of the country, and Canada will be the better for his recovery.


Harry Leader: That may be all true, but on
the ground of economy I still take the stand that an able-bodied man should not be drawing a pension when he is able to bear the strain of a five-months' session. At any rate legislation should be passed to protect the taxpayers of the country from such an imposition. I intended reading a little further from this article.


Edward Mortimer Macdonald: What is the hon. member reading from?


Harry Leader: I am reading from the
Orange Sentinel.


Edward Mortimer Macdonald: Does the
hon. gentleman think that the Orange Sentinel's views should dominate this country?


Harry Leader: I do not think that the Orange Sentinel should dominate the country, but I think that its views have as much right to be stated here as have the opinions of any other newspaper published in the country. And let me tell the hon. gentleman that I am no more an admirer of the Orange Sentinel than of any other sectarian newspaper in Canada.


Mr. HEALY:: Will the hon. gentleman permit me a question?


Harry Leader: We are not getting through with the debate.


Albert Frederick Healy: This is the only question I am asking. Does the hon. gentleman suggest that retired civil servants should be killed off in order to save the country money?

The Budget-Mr. Leader


Harry Leader: I would hesitate to kill
anyone. I was going on to quote the following:
General Fiset is not the first pensioner to double his income in that way. Hon. Charles Doherty, who was Minister of Justice in the cabinet of Sir Robert Borden, drew a judge's pension of $7,000 a year besides a cabinet minister's salary of $10,000, and sessional indemnity of $4,000. He was supposed to be the fountain head of justice, but anybody who can see the elements of justice in that must have second sight.
As a matter of fact, the Hon. Mr. Doherty's pension was $6,666.66. Now I have given figures to show our extravagance in public expenditures and I intend to offer some suggestions in the way of retrenchment. I introduced a resolution on the floor of the House two years ago for the pur-3 a.m. pose of reducing our sessional indemnity, and I did so not because I thought it was too much but because I considered that if any lead in economy whs to be given the country, and if we were sincere in our advocacy of retrenchment, it was our duty to set the example. Hon. members know what happened to that resolution. Again, last year at the proper time, when the Prime Minister (Mr. Mackenzie King) himself was introducing the bill in regard to redistribution, I took occasion to suggest that it was then an opportune moment to consider the question of reducing the representation in this House; I suggested that the membership be reduced one-third. But the Prime Minister did not take kindly to that suggestion. I also offered the further suggestion that the cabinet representation be cut down.


Edward Mortimer Macdonald: Did not the hon. member know when he made that suggestion with regard to a reduction in the representation that it would require an amendment of the British North America Act by the Imperial parliament.


Harry Leader: I am perfectly aware of
that. But is that act iron-clad? When this country wanted to retain the representation of Prince Edward Island at its present figure there was no trouble about amending the British North America Act.


Edward Mortimer Macdonald: Why did
you not move the resolution in the proper way, instead of talking?


Harry Leader: I know that this will get
under the hide of some ministers, and I intend that it should: I suggested that the number of cabinet ministers should be reduced, and I made that suggestion believing we have too many of them. I suggested that the number could be reduced to at least ten.

The much-respected Minister of Railways (Mr. Graham) was not very favourably impressed with the proposal; he took me to task for daring to suggest such a thing. I have here an article written in one of the newspapers last year in which it is stated that Sir George Foster in the Senate recommended that the cabinet could be cut down to twelve members, and he states what departments could be amalgamated. I had also a clipping from an article written by the Hon. T. A. Crerar in MacLean's magazine, in which he suggested that it was reasonable to expect a reduction in the nuiriber of cabinet ministers. Both these gentlemen had served as cabinet ministers and they should know what they are talking about if I do not. Unfortunately, these men have the inclination when they have not the opportunity; and when they had the opportunity they had not the inclination. I have some figures here but I shall be considerate enough to refrain from reading them at this hour. But they go to show that the cost of our representation in proportion to population is four times greater in Canada than it is in tihe United States; the cost of representation in the Senate is six times greater here than it is in that country; and the cost of our cabinet ministers-and this is where the real overcrowding takes place-is twenty times greater in Canada than it is in the United States, on the basis of population.
Now, as a practical suggestion looking to economy, I think that we might abolish the-office of Lieutenant Governor in each province-of the Dominion. We have nine Lieutenant-Governors, and in two of the provinces they are receiving salaries of $10,000 per annum, while in six other provinces the salary is $9,000, and in Prince Ediward Island $7,000. This makes a total of $81,000 a year which we are paying out in salaries to Lieutenant Governors. I do not know what their expenses amount to, but I think they are paid by the provinces. The province of Alberta this year abolished Governiment House, and to show how this action was regarded by the Lieutenant Governor himself, I may say that he confessed tbiat he was glad of it inasmuch as it would save him $20,000 a year in expenses for entertainments. I think we might very well abolish the office of Lieutenant Governor-or at any rate provide by legislation that the salaries of these officers be paid by the provinces; that would bring about the same end.
I shall now touch upon a delicate subject, and as a prefatory remark I will tell the House that I am as loyal as any man here. My father was bom in England and I am of Eng-

The Budget-Mr. Leader
lish stock; so that no man can impute to me any sentiments of disloyalty. What I am about to say ds by no means a reflection on the present Governor General. His Excellency had already won our admiration and respect by his gallantry as commander of the troops at Viimy Ridge; and he has added to that our confidence in him as a representative of our Sovereign. But I want to give some figures to the House and to the country with reference to the expenses in connection with this institution. I do not think that I have them all, but I have sufficient to serve my present purpose. It has been, declared by eminent writers, both men and women who are supposed to know what they are talking about, that Rideau Hall has cost the people of Canada some $5,000,000. Now, this is only guess work on my part; it may be near the truth or it may be over or under estimated. However, the figures that I shall now give are authentic, having been gleaned from the pages of the Auditor General's report. In 1924 I find that the following were some of the expenses in connection with the residence of the Governor
General, Rideau Hall, and grounds:
Governor General's	office	 1149,271
Alterations	 13,248
Improvements	 60,000
Fuel and light	 19,000
Telephone service	 1,825
Water	 2,792
Governor General's	cars	 42,659
288,795
Interest on Rideau Hall at 5 per cent.. ..	250,000
Total	 {538,795
I think the time has come when serious attention should be given to a reduction in the expenses in connection with that institution. I do not know whether or not it would be wise to do away altogether with the office of Governor General; I do not think it would be.	-


Edward Mortimer Macdonald: Would my
hon. friend suggest w'hat would be substituted for it?


Harry Leader: I would substitute the
Chief Justice of the Supreme Court of Canada, who now is the Governor Generals' deputy.


Edward Mortimer Macdonald: Has the hon. member thought very much about that?


Harry Leader: Perhaps I have given it
more thought than the hon. minister has, or he would not treat it so frivolously.


Edward Mortimer Macdonald: Does my
hon. friend suggest that the Chief Justice of the Supreme Court of Canada should be 172i
Governor General and that he should perform the duties of both offices without any additional salary?


Harry Leader: Perhaps not, but if you
gave him $100,000 we would still be $400,000 to the good.


Edward Mortimer Macdonald: Who would represent His Majesty here?


Harry Leader: He would represent His
Majesty.


Edward Mortimer Macdonald: Well, you had better arrange with the Imperial parliament about all these wonderful reforms of yours.


Harry Leader: When it is found convenient, the arrangement can he made all right. So far no attempt has ever been made to make it.


Edward Mortimer Macdonald: You had better start in and you will find out what it will lead you to.


Harry Leader: I have been interrupted a good deal, Mr. Speaker and that accounts for my taking longer than I would otherwise have taken. I have about completed my remarks, but I have not yet explained my position in regard to the vote that is to be taken to-day. Hon. members will have guessed that I intend to vote against the budget. The amendment of my hon. friends to my right holds for me no attraction.
I want to take just four or five minutes now to discuss a little article that I find in a paper called The Western Record, printed in Winnipeg. It says:
A\e have been asked if The Western Record is a Conservative organ? Rather a stupid question for anyone to ask if they have carefully read it. It is a Conservative organ and has clearly enunciated the policies of both Dominion and provincial Conservative parties.
The article makes an attack upon the Progressives here at Ottawa. I am going to read one or two little samples of the material we1 find in this article. Following up a statement it makes as to our holding the balance of power at Ottawa, the article says:
Unfortunately this marvellous group, with the nomenclature "Progressives" comprised such a bunch of hayseeds that they were unable to make use of their power, and they furthermore had not the gumption to realize that- when a political party enunciates principles and fails to stand by them it destroys political morality. Not only that but puts the cog in the wheels of government machinery which naturally impedes national progress.
Then it goes on to say:
It was not long before this inflated group of windjammers began to disintegrate. The big suave Crerar found it impossible to lead his sheep.
The Budget-Mr. Boys

Then it goes on to say that now the Progressives are being led by the "doublepronged Forke." But the paragraph to which I wish particularly to call the attention of the House is one which was brought up in the House here the other day by the whip of the Progressive party, (Mr. Johnston.) The statements contained in it were most emphatically denied by him, and he deplored the fact that any newspaper of any standing in this country should dare to print such an article. I find that this Conservative paper printed in Winnipeg carried the same article, and I will read it so that the record may be available for future reference. It says:
Ottawa has been watching with amusement the conduct of this Progressive group. As everybody knows, the wheat market has been in a highly nervous condition, and at a recent important division a preliminary count by the whips showed 30 Progressives missing, their presence was needed to save the government. Where do you suppose those representatives of the farmers of the west were? Down town at brokerage offices watching the rise and fall of wheat prices on the blackboards, in which they were all interested. Autos were hastily commandeered and a little later a bunch of bareheaded members were located and their mental deliberations disturbed by being dragged back to the House, and the government was saved by a narrow margin.
Now, we are called "hayseeds," Mr. Speaker, "wind-jammers" and betrayers of public trust. I wonder if the Conservative members in the House here at Ottawa endorse what I have read in this Conservative paper printed in Winnipeg? I am glad to hear the chief whip of the Conservative party say that he repudiates the article. I wish to add, Mr. Speaker, that such scurrilous articles are a disgrace to our newspapers and an insult to the intelligence of our people, they are sure of the condemnation they deserve. If the rremnants of the once great party persist in [DOT]using such tactics the sooner the remnants are -disposed of the better it will be for our citizenship. If this kind of dope is what the Grand Old Party relies on to win the next election, they had better cash in and give up the ghost.


William Alves Boys: May I crave the indulgence of the House, Mr. Speaker, for five or six minutes? I did not intend to take part in the discussion, but in justice to the party to which I belong, and also to my hon. friends of the Progressive party, I feel that I should try to put right a very extravagant statement made by the Prime Minister (Mr. Mackenzie King) in his speech to-day. He accused this party of obstruction, of taking up a tremendous amount of time, and he accused with us my hon. friends of the Progressive party. I think it is only fair that the House and the country
	' r f 'T 'G
should know the length of time consumed in the debates upon the three matters to which he referred.
Last week I gave to the press a statement which I believe to be accurate regarding the time consumed in the debate on the budget. I have brought these figures down to date. I do not blame the government at all for taking up the time they did; I realize that they are entitled, if they want to, to put up speaker for speaker. In other words, they have one speaker while we of the opposition, both groups, have one speaker; and I concede to them that right. But I think we may properly object to any intimation on the part of the Prime Minister that we have taken more than the share of the time which belongs to U3. Up till yesterday-I cannot make the calculation for to-day because one cannot tell just how many columns of Hansard will be used by that portion of the debate which has not yet been published-the Liberals in the present debate have taken up 843 columns of Hansard. The Conservatives have taken up 634, and the Progressives and Independent 558. The Liberals have put up 46 speakers, the Conservatives 26, the Progressives 26 and the Independents 7. In connection with the ocean shipping rates discussion, about which the Prime Minister had so much to say, and in connection with which he made the most extravagant statements, statements which will not be borne out for one moment by an analysis of Hansard, we find that the debate started on March 3, and that it continued on the 10th, 12th, 13th, 17th, 19th and 20th. May I say in this connection that the Prime Minister accused the party to which I belong of consuming most of the time, and with us he coupled my friends of the Progressive party. What, are the facts? The Liberals took 279 columns of Hansard, the Conservatives 228, and the Progressives, including the Independents. 126. But how the right hon. the Prime Minister could venture a criticism of any group in this House in view of his own action in that debate is beyond my comprehension.


Mr. LOVETT:: In proportion to your
numbers you took more time by far than the Liberals.


Mr. CASGRAIN:: Hear, hear.
Mr. BOYrS: I am glad that affords comfort to my hon. friend. I do not know how I can do it any more fairly than I am doing it. I am quoting to the House the actual columns of Hansard, and if there is any other way in which I can do it better, I would be glad to do it. It is true that some speakers speak

The Budget-Mr. Kennedy (Edmonton)
faster than others and do not consume as much time, but one cannot calculate that. I am taking the columns of Hansard, and I have given you the totals.
And now let us look at just one other feature of that same debate, and if the Prime Minister pauses to consider this, one wonders how he could ever presume to accuse this party or the Progressives of consuming unnecessary time. He took himself 79 columns of Hansard, one-third of the total time of the Conservatives who spoke on this side of the House in that debate, 16 in number. He took 79 columns himself in that debate as against 126 by the Progressives or over half as much as all the Progressives that spoke in that debate, and yet he stands up here and attempts to criticize us of the Conservative faith and my Progressive friends of obstructing the business of the House.
He then dealt with one other feature, that is the canteen funds debate. Now I want to say to the House that my figures in this connection may not be accurate. I have honestly tried to find out what the truth is. It is difficult to go through it and be sure of your figures. I did it in a hurry, and I may be wrong, but so far as I could find from a search of Hansard to-night that matter was dealt with on one day, on March 5th, and the total time occupied-


Some hon. MEMBERS:: No. More than that.


Mr. MURDOCK:: On three days.


William Alves Boys: My hon. friends can correct me if I am wrong. I have tried to be fair, and if my friends now can point to another day, I will admit at once I have overlooked it, but I could not find it. On March 5th I find that out of the whole day the only time consumed in connection with the canteen funds was 38 columns of Hansard, and I leave it to the judgment of this House whether the remarks of the Prime Minister, wTho tried to pass on to us and to my Progressive friends the thought of obstructing is justified in view of the facts I have stated. There has been no justification. The Peterson contract is an important matter, and warranted all the time that was taken upon it, and I venture to say that when it comes back, if it ever does, the members of all parties in this House will want to spend some time discussing it. My own view is that it will never come back from the committee stage.
I think it is only right to put this matter in its fair and true light. I think I have correctly calculated the time that was taken by the various speakers in this House, and if
my figures are correct, I think hon. gentlemen even on the opposite side of the House will agree that the Prime Minister could not have made a calculation, and that he spoke without thought, without looking the matter up, and without justification.


Mr. D. M. KENNEDY (West Edmonton):: Mr. Speaker, I know this is not a very good hour in the morning at which to start a speech, but possibly hon. members will not suffer any more than I have in listening to what has gone before. I can assure hon. members of this, however, that what I have to say I shall say in as few words as possible, but on the other hand I intend to say it. I have not previously taken any part in a budget debate, and I was anxious from the first to take part in this one.
Since the commencement of this debate we have heard a great many attempts made in this House to classify the budget. There are those who think it is a protectionist budget; there are those who think it is getting somewhere near a free trade budget; and there are those who think it is a moderate budget. So far as the members on the government side of the House are concerned, we have had almost free trade speeches in favour of the budget; we have also had members who stand out distinctly for protection apparently give the budget their blessing. The hon. member for Chambly and Vercheres (Mr. Arehambault) the other night in his speech said that this budget broke the back of the Conservative opposition. He said that the Tories were out apparently trying to scare the people by saying that there was a general reduction in the tariff coming, and that this budget had broken the back of that propaganda in the country. I believe, Mr. Speaker, that for the present at least the budget has done that very thing. But it has gone further than that in my judgment. It is a repudiation of the Liberal platform of 1919, and of the professions made by the vast majority of the Liberals before the people of Canada in 1921.
The Liberal party met in Ottawa in 1919 and drew up a platform. Now there are those who say that a platform _is all very well for the time at which it is drawn up, but that conditions change. Well, this platform was not drawn up by a party' that had had no experience	in this*
sort of thing, because the party had been in existence a great many years and hadi previous experience, and in its ranks at that day and at that convention were men who-had been in the Liberal party in 1893 when they drew up that platform, which the country
2702	COMMONS
The Budget-Mr. Kennedy (Edmonton)
were assured meant that the Liberal party, once they came into power, would so fix the tariff for revenue purposes that not a cent would be taken from the pockets of the people that did not go into the treasury of the Dominion of Canada. I wish to read the tariff part of the Liberal platform of 1919, so that the House and the country may know what was definitely promised in this regard. The reason I want to do so is, that there has been a tendency throughout Canada to justify any reductions that have been made in the tariff on the ground of concessions to the Progressives. Now I do not believe that the Liberal party or any other party has the right to make concessions to any party for support. Wherever reductions are made in the tariff they ought to be made on the ground that they are believed to be the best thing for the Dominion of Canada. But I wish to demonstrate this morning that even though there have been some reductions made, those reductions do not come anywhere near meeting the definite pledges made by the Liberal party in 1919, and 3gain in 1921 to the people of this country. The resolution on the tariff at the Liberal convention of 1919 reads as follows:
That the best interests of Canada demand that substantial reductions of the burdens of Customs taxation be made with a view to the accomplishing of two purposes of the highest importance: First, diminishing the very high 'cost of living which presses so severely on the masses of the people; second, reducing the cost of the instruments of production in the industries based on the natural resources of the Dominion, the vigorous development of which is essential to the progress and prosperity of our country.
If the platform had stopped there there might not be much difficulty, but it becomes very specific from that point to the end:
That, to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery:	farm tractors,
mining, flour and saw-mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net-twines and fishermen's equipments; cement and fertilizers, should be free from customs duties, as well as the raw material entering into the same.
That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption (other than luxuries), as well as on the raw material entering into the manufacture of the same.
That the British preference be increased to 50 per cent of the general tariff.
And the Liberal party hereby pledges itself to implement by legislation the provision of this resolution when returned to power.
Now, it might have been argued, indeed it was argued in the first session after the general election of 1921, that the Liberal party should not be expected to go the full length of their platform in their very first budget; but this is the fourth budget brought down by this government, and we have not made much more than a respectable beginning, if it could be called that, towards the accomplishment of those definite promises made to the people of Canada-the pledges that the party promised to implement when returned to power. I have taken those definite promises made to the people. I have examined the various items as they stood in the tariff in 1921, and where they stand to-day, and we will take them in the order in which they appear in this platform:
-	British Preference Tariff	Inter- mediate Tariff	General TariffWneat, when imported from a country which imposes the customs duty on wheat grown in Canada, per bushel	8 cents	12 cents	12 cents
There has been, no reduction whatever in this item. The tariff stands as it did in 1921:
Wheat flour and semolina		30 cents		
			
The d?ties stand at the same figure to-day. have taken out just a few. We will take, for The principal articles of food."	example, sugar which is one of the neces-
This would be a very long list, and so I sit-ies of life.
Sugar, 1921	
Sugar, 1925	
Apples, 1921	
Apples, 1925	
Raisins and dry currants
$1 52 0 S3 0 60 0 60 i cent
SI 93 1 50 0 90 0 90 f cent


SI 93 1 50 0 90 0 90
[Stage Direction]
| cent
[Mr. D. M. Kennedy.}

The Budget-Mr. Kennedy (Edmonton)
On raisins and dry currants there is a possibility that the rates will be 3 cents under the British preference, 3 cents under the intermediate, and 3 cents under the general tariff if our treaty with Australia goes through. On tea there has been no
change whatever. On coffee there has been no change. On tomatoes and other vegetables, which are necessities of life, the tariff stands practically to-day as it stood in 1921. Farm implements. These were going on the free list. Item 445 of the tariff reads:
Mowing machines, harvesters, self-binding or without binder, binding attachments, reapers, and complete parts thereof, not including shafting or malleable iron castings, 1921	12| p.c.	121 P-c.	121 P-c.Mowing machines, harvesters, self-binding or without binder, binding attachments, reapers, and complete parts thereof, not including shafting or malleable iron castings, 1925	Free	6 p.c.	0 p.c.Cultivators, 1921	10 p.c.	15 p.c.	15 p.c.Cultivators, 1925	Free	74 p.c.	71 p.c.
Traction ditching machines were free under all tariffs in 1921. To-day they are also free.
1921 ploughs and complete parts thereof	124 p.c.	171 p.c.	171 P-c.1925 ploughs and complete parts thereof	5 p.c.	10 p.c.	10 p.c.Windmills and complete parts thereof, 1921	121 P-c.	174 p.c.	174 P-C.Windmills and complete parts thereof. 1925	124 p.c.	171 P-c.	17j P-c.
I might point out that windmills affect years. In portable engines there has been no particularly the cattle industry. It is one change. The figures are 12| per cent, 171-branch of the agricultural industry that has per cent, 174 per cent, been hit hardest within the last two
' 	British Preferential Tariff	Inter- mediate Tariff	General Tariff12| p.c. 5 p.c.	20 p.c. 10 p.c.	20 p.c.10 p.c.
Mine and quarry machinery is free.
5 p.c.	71 p.c.	10 p.c.5 p.c.	74 p.c.	10 p.c.10 p.c.	15 p.c.	20 p.c.
Planks and boards were free under the tariff	and dressed on one side only, and so on, were
of 1921 and thej7 are free today. There was,	free in 1921 under the three tariffs and they
of course, 7i per cent war tax. Planks, boards are free to-day. and other lumber or wood, sawn, split or cut,
Gasoline under -725 specific gravity at 60 degrees temperature, 1921	Free	FreeGasoline under -725 specific gravity at 60 degrees temperature, 1925	Free	FreeGasoline -725 specific gravity but not heavier than -750 specific gravity at 60 degrees tenperature, per gallon, 1921	\ cent	i cent	1 cent
That is the tariff to-day. There has been natural state. It was free in 1921 and it is no increase there. Crude petroleum in its still free.
Illuminating oils, composed wholly or in part of the products of petroleum, 1921	
15 p.c.
171 P-c.	20 p.c.
The percentage is the same to-day under all three tariffs.
Lubricating oils, 1921
11cents
21 cents
21 cents
2704	COMMONS
The Budget-Mr. Kennedy (Edmonton)
The tariff is the same to-day. In the case of oils-petroleum

the rates in 1921 were 4 cent in each case. The same rates appfy to-day, 4 cent per gallon.
I wish to call the attention of the House to the tremendously high duties in connection with clothing, and clothing of course is one of
the necessaries of life especially in this country. I take item No. 563 of the tariff, women's and children's dress goods. This of course was not to be made free according to the Liberal platform, but substantial reductions were promised. This is how the item stood in 4921 and how it stands to-day:
Tariff Items.	-	British Preferential Tariff.	Inter- mediate Tariff.	General Tariff.Women's and children's dress goods, 1921	15 p.c.	21| P-C-	25 p.c.Women's and children's dress goods, 1925	15 p.c.	22J P-c.	25 p.c.565	Blankets composed wholly of pure wool	22! p.c. 22! p.c.	30 p.c. 30 p.c.	35 p.c. 35 p.c. less 10 p.c.568 567	Undershirts, drawers and knitted goods, n.o.p	
Fabrics, manufacturers, wearing apparel and readymade clothing, composed wholly or in part of wool,	22b p.c. 20 p.c.	30 p.c. 30 p.c.	35 p.c. 35 p.c.1921 France, Belgium and Netherlands	30 p.c. 27| p.c.	35 p.c. 35 p.c. 35 p.c. 35 p.c. 32| p.c. 32! P-c. 32! p.c.	35 p.c. 35 p.c. less 15 p.c.568a 611	Socks and stockings of all kinds	
France and Italy	
Boots and shoes, pegged or wire fastened, with un-	25 p.c. 25 p.c.	35 p.c. 35 p.c. less 10 p.c.stitched soles close edged	17! p.c. 15 p.c.	22! P-c. 22! p.c.	25 p.c. 25 p.c.61	Boots, shoes, slippers and insoles of any material, n.o.p. 1921 France, Belgium and Netherlands	20 p.c. 17| P-c.	274 P-c. 27' p.c. 274	30 p.c. 30 p.c.
Now the other clause states:
That the British preference be increased to fifty per cent of the general tariff.
I am not going into any specific cases because that has not been done, but I want to say that there is not, as far as I can see, any reasonable excuse for not carrying out those specific and definite pledges to the people of Canada, for the simple reason that the gentlemen drawing up this platform had experience previously both in drawing up platforms and in the government of the country, and understood the financial condition of Canada- at the time the platform was drawn up, and if anybody challenges me this morning to provide something constructive I would say that the constructive suggestion I should like to offer to this government or to any other government is that when a government makes definite pledges to the people of Canada they should keep those pledges. There has been ever since 1921 and ever since the campaign a line of argument taken by various members of the government, and members supporting the government to the effect that the Liberal party is the great central party, the moderation party, a party between the two extremes, the high protectionists and the free traders. Well, Mr. 
Speaker, that may be, but that point of moderation has been shifting considerably. I remember back in 1921 this position was taken by the Prime Minister in his manifesto to the people of Canada. It was taken by the Prime Minister in his speech on the discussion of the budget in 1922. It was taken also by the hon. member for Chambly and Vercheres (Mr. Archambault) the other night, and taken by the Minister of Justice (Mr. Lapointe) yesterday; but I wish to say that it is not a justification to say that because the Liberal party stands midway, or claims to stand midway between the high protectionists and the free traders, or the extremely low tariff party, they are necessarily right. They are not right according to the standards set up by themselves, and the definite promises they made to the people of Canada, and there ought at least to be some substantial reason given to the people of Canada as to why these pledges have not been carried out and why the policy has been changed. I wish to say that I believe that the last election should mean something to the government and to the party supporting the government. In this campaign book, the Speaker's Handbook, we have not only the Liberal party ' platform, but we have the Farmers' platform, and a little further on we

The Budget-Mr. Kennedy (Edmonton)
have an article devoted to reasons why the Farmers and the Liberals ought to get together, and having appealed to the people of Canada on the basis of this platform, we have about 117 Liberal members, of course a few of these refused to recognize the platform, but still the vast majority of them stood apparently on the platform, and we have about sixty or sixty-five members in this corner of the House elected on a platform, going not only in the direction of the Liberal platform but a little further, and therefore I claim that there was a mandate given to the government and to the House of Commons to fulfil at least all the pledges of the platform of 1919. I think it would not be unreasonable to say that it should be done in the first session, and it is certainly not unreasonable that after four sessions it ought to be carried out in full. The argument has been advanced that the country needs revenue. Well this statement was met by an argument in this -campaign handbook; both the protectionist and the revenue arguments are treated here. I am not going to take time to read from it at any great length. I find in the Handbook an article headed, "Women and Politics," and at page 4, the following:
There are two ways which the country has of raising the taxes necessary to pay its debts. One is by direct tnxation which means that every man and woman must pay from his or her income a certain sum annually. If an individual's income is over a certain amount, that individual will easily understand how much he will have to pay by way of income tax. Among working people this income may not be sufficient in amount to be directly taxed, and therefore it may appear to such individuals (who make up, after all, the bulk of the nation) that they are not paying taxes at all. This is a mistaken idea- Every man and every woman pays taxes in some form.
Now regarding the tariff this book says:
Let us suppose therefore that in the United States there is a manufacturer of shoes who can make ordinary wearing boots for $3 a pair. Suppose the cost of selling and transportation of these boots from the United States factory to the consumer in Canada amounts to $2 a pair,' a duty on these goods coming into the country	is,	say	50 cents per pair,	they canbe sold in Canada	for	$5.50 in all. The	50	cents
duty goes into the government treasury for the payment of the country's obligations. It is collected at the boundary as a customs dutj\ The real duty is much higher.
If, in Canada, there is a manufacturer of shoes who can also make the same kind of wearing boots at $3 a pair and if the selling and transportation from the Canadian factory	to	the	Canadian buyer costs	also,say, $2 a pair,	making	in all a cost of	$5,	yet,
nevertheless, he sells the boots in Canada for the same price as does the American producer. He gets $5.50 for the boots, but the difference of 50 cents he puts in his own pocket. This difference is the amount of protection that the home manufacturer gets behind the tariff wall, which shelters him against American competition.
Mr. GARLAND (Bow River):: What is the hon. member reading from?


Donald MacBeth Kennedy: The Speaker's Handbook.


Edward Joseph Garland: Of what?


Donald MacBeth Kennedy: Of the
Liberal party of 1921. Then I refer to page 6, of the same pamphlet, " Mr. King against High Protection ". This deals with the question of protection and the repudiation of it by the Prime Minister, and also the question of revenue:
Mr. King thinks first of the people and second of the industry. All the people are greater than a few manufacturers. Mr. King stands for all the people. Mr. King is against high protection. In the example of the pair of boots just referred to, Mr. Meiglien would stand for the manufacturer getting fifty cents for himself on each pair of boots. That is the tariff should be fifty cents per pair. But Mr. King would say:	No-twenty c<nts a pair is enough. Let the
manufacturer have this amount to aid his industry, but let the other thirty cents per pair be allowed to the woman who buys the boots making the price to her $5.20 instead of $5.50. All over the country the difference in these policies on every article to wear, to eat, for the husband, the wife, the children, means millions saved in the homes and incomes of the people, and the manufacturers will still have a fail profit as well.
It means besides, that there is still a tariff on the American boots of twenty cents per pair instead of fifty cents per pair. The twenty cents per pair as duty collected against foreign goods will still go to the government in customs duties. This explains the difference between a tariff for protection and a tariff for revenue.
This is a little different from the 1893 explanation, of course.
But, some one argues, that on such a reduction of duties the customs revenue will fall and the government will fail to get money with which to carry on. The answer is reasonable, lowering of tariff duties means a great increase in trading, a great increase in buying by the consumer because he can get so much more for his money and consequently-
And the rest is in heavy black type.
-a sure increase in government revenue.
But they go further than that. This is the plank resolution on "Financial condition and taxation," and I am going to read just a small part of it. I leave out the various "whereases."
Be it and it is hereby resolved:
1.	That the serious nature of the country's financial situation calls for the profoundest consideration of all patriotic citizens-


Mr. SPENCER:: What is the hon. member reading from?


Donald MacBeth Kennedy: The National Liberal Convention of August 5, 6 and 7, 1919, the official report:
-and the exercise of the severest economy by the government;
2.	That increase of revenue must be sought from an equitable and effective imposition and collect kv
2706	COMMONS
The Budget-Mr. Kennedy (Edmonton)
of graduated taxes, on business profit's and income, applicable to all incomes above reasonable exemptions ;
3.	Taxes on luxuries.
I think we ha/ve there an official declaration by the Liberal party tihiat they are ready to go on and give the country a large reduction in customs tariffs, to put a certain number of articles on the free list, and they are certain that the result of that will be an increase of revenue. In any case they know where to go for increases in revenue in case the reduction in the tariff duties should not provide the same. In view of that fact, I have a very strong feeling that they have not ketpt their solemn pledges made to the Dominion of Canada. I believe it is the duty of a government to do that, not by way of concessions to Progressives or Conservatives or anybody else; but because they have made those pledges, they ought to stand by them or at least to test them out. It is because I believe no serious 'attempt to go in that direction has been made that I have voted against the various budgets. I did vote for the budget last year, although I voted for the amendment as well.
I wish to say just a little about the amendment. I cannot vote for the amendment. The amendment arils for a reduction in the sales tax. I would) like to see a reduction in the sales tax, but I would like still more to see a reduction in the tariff. I believe the sales tax is objectionable in many ways, but I believe the tariff is still more so. It has been argued in this House-and I believe ;it is nearly correct-that the sales tax pyramids nearly 100 per cent. When customs duty is paid at the boundary on goods coming in the goods will go through very nearly the same selling process as goods on which the sales tax is paid, and we must have pj^ramiding to the same extent. We must have an equal pyramiding on goods that are manufactured in Canada and on which the manufacturer charges the tariff or a portion of it for his own benefit. Therefore, because at the present time we are apparently being held up on tariff reductions on account of the need of revenue or for some other reasons, I am not in favour of further reductions in the sales tax. I want first reductions in the tariff duties which, in my judgment, are about two or three times as objectionable as the sales tax.
We have an increase in the tariff this year as a result, of the government's action with regard to slack coal. We have a small reduction from 53 to 50 cents a ton on certain kinds of coal, and then we have a general increase

in the duty on slack coal. I suppose this increase was given as a result of representations made to the government by delegates from Nova Scotia and, I was told also, by someone from Alberta, I believe it was the Premier of Alberta. Possibly the difficult situation in Nova Scotia with regard to the coalmining industry has been the chief lever in this regard, but I have not seen anything to convince me that this duty on coal is going to relieve conditions there. I believe conditions in Nova Scotia require a thorough investigation, and when the Minister of Labour (Mr. Murdock) and other members of the government argue that it was hardly the Tight thing for the government to go in and investigate conditions there, I could hardly help thinking they were not using their best judgment. It is a strange, palsied attitude to take-no, we cannot go in and do anything because that is the duty of the government of Nova Scotia. They are the proper authorities, but we come later with a tariff tax on the rest of the people of Canada. Surely if conditions there are as bad as we have heard they are-and I think the convincing arguments have come from those who have been telling of the difficult situation that the miners are labouring and living under-there was justification and urgent need for the government, before doing anything in this regard, to make absolutely sure of their ground and to know where they were travelling. I have been informed very definitely that one of the troubles in Nova Scotia is an increase in overhead through the opening of too many mines owing to the high price of coal during the war, and I suppose the same thing is true with regard to Alberta. All industries in Canada as a result of war renditions ha 1 a tremendous increase of overhead and a great many mines like a great many farms were brought under operation which. Under normal conditions could not exist; and the government owe a duty to the people of Canada, whom they are taxing for the benefit of certain parties in the west or in the east, to make absolutely sure of their ground. I do not think that has been done. I am told that in the province of Alberta one of the difficulties is that a great many mines have been opened up that should have been left untouched. But in any case there is a commission there investigating the whole question, and this action on the part of this government is premature. And in Nova Scotia we have no guarantee that one cent of the duty will ever reach a miner who may 'be in distress. It seems to, tne that

The Budget-Mr. Kennedy (Edmonton)
there are men at the head of the British Empire Steel who are not worthy to develop industries in this Dominion. What about our friend Mr. Wolvin? We remember some of his operations in connection with the combine on the Great Lakes, and he was referred to somewhat severely by the now Solicitor General (Mr. Me Murray) in 1923. This is what the Solicitor General then had to say about him:
This combine that had the audacity to charge these terrific rates and to impose an illegal and altogether improper insurance on the shipper had the temerity to intimidate the people of Winnipeg. There is a s.ries of interesting telegrams that passed between the members of this combine. They appear at page 19 of the report and I think that in all fairness to those who may come after us they should be placed on Hansard so that there may be no misapprenhen-sion if the subject ever comes up again for discussion. These telegrams display the same intimidating attitude to those who had the courage to appeal to this government for protection against the injustice and the predatory measures practised against them. When one reads and carefully studies this report, when one ponders the evidence, one is appalled at the boldness of these men who secured control of the only shipping channel for our western grain. The name " Wolvin " is significant, and it is difficult for anyone to speak dispassionately and calmly as he realizes that significance in its fullest extent. The nearest synonym that I can suggest for it, if it has any English equivalent, would be the word "wolverine'The wolverine is described as a " voracious, sagacious and ferocious animal ", and apparently these men exhibited all these qualities, because they were certainly voracious, they were undoubtedly sagacious, and to the shippers of Western Canada they were beyond any question " ferocious ". Hon. members will realize the audacity of this whole matter when they read the telegrams that were exchanged, as disclosed in this report.
I think that in view of the past record of Mr. Wolvin it is not surprising that we hear the reports we do of him and his officers, or that his officers should say that they are willing to "do their worst" and that the men "cannot stand the gaff". It looks 4 a.m. as though they were running true to form. It seems to me that these allied industries, in which this Dominion has placed millions of dollars, I believe something like $19,000,000, by way of bonuses, should get no help directly or indirectly until there is a cleanup and the whole business is put on a proper footing, either by means of Whitley councils or some method of that kind, to ensure at least a living wage to the men who are working for the corporation. There is not a millionaire's fortune in Canada or in the United States or anywhere else the saving of which could be justified by such conditions as exist in Nova Scotia. The very first thing that should be taken into consideration in connection with an industry is the question whether or not it will provide a living wage and a decent standard of living for the workmen and their families; and profits and the financial operations of men like Mr. Wolvin ought to be a decided, a far second. I think therefore, in view of the fact that the government has taken this step, that they should not be considered as having justified it by saying that the present affairs are no business of theirs; have we no right under these circumstances to tax the people of Canada unless we are able to do so with a complete knowledge of what we are doing. If on the other hand the duty is to stand I think it ought to be left in such a way as to give the greatest benefit to the greatest number and I do not think that this has been done, because with a drawback on coal coming from the United States to coking plants we shall have, so far as Alberta is concerned I understand, a worse condition than we had before. I am not an expert on the coal business but I have received that information from an expert, and possibly we shall see later on how true it is. It seem* to me that if the Premier of Alberta did make representations for a duty on coal he got a little of what he wanted and a great deal of what he did not want.
A suggestion was made to me a few days ago by the hon. member for Bow River (Mr. Garland) that there was a possibility of raising additional revenue iby means of a graduated tax on radios. I believe that the present tax is $1 per annum on every radio, and the boy who makes a small set in town pays the same tax as the man who owns a $500 outfit. There are 100,000 radios in Canada and a graduated tax applied according to the number of tubes, one, two or three as the case might 'be, might be a fruitful source of revenue. If a boy with a 95-cent set or a man with a $40-set pays $1 per annum and that is considered equitable, then possibly the people who can afford the luxury of a $300-set might 'be able to pay something a little higher than $1.
The hon. member for Brantford (Mr. Raymond), for whom I have a great deal of respect, said the other day that the Progressives were not satisfied. He seemed to be of the opinion that these few reductions in wagons had been made for our benefit and he thought that we should support the government on that account. I cannot understand the logic of the protectionist who thinks that because he has been allowed to tax the people of Canada 10 or 15 per cent for a period of twenty or thirty years, and because that tax is reduced to 6 per cent, there has been a concession made to the man who has been paying the tax all these years. I believe
2708	COMMONS
The Budget-Mr. Kennedy (Edmonton)
that the people of the west are clear thinking enough and vigorous enough to demand complete equity in this matter of taxation, and I trust that they will never submit quietly without protest to being taxed for the benefit of any private individual in the Dominion or elsewhere, unless it is a case of distress.


Mr. ROBICHATJD:: If this reduction of taxation from 15 to 6 per cent is not a concession, wlhat is it?


Donald MacBeth Kennedy: It is still taxation of 6 per cent. It is taxation of the man who buys implements for the man who has been selling them. It is still taxation of the private individual for the benefit of the "manufacturer, and you have not attained equality until neither is taxed anything for the benefit of the other. If there ever is worked out a system of protection that will protect the home market and guarantee quality and fair prices then you may get acquiescence in it, but not until then, and I do not know of any way it can be done.
Now, I am going to make a few observations with regard to the railway situation, with particular reference to a railway that I am interested in. We are told these days that we ought to ease up on railway construction simply because we have too many railways. I do not think we have too many railways, but I think we have too many in some places. My home is twenty miles from the end of steel, and I am not willing to submit to that argument, particularly when it comes from those who are living in districts w'here they can hear the sound of an engine's whistle practically any hour of the day or night. It is very easy for the men who live in a city where street cars and railways go past them in all directions to say, "Let us ease up on railway construction." I understand that the investigation that is being carried on by the railway heads is demonstrating that the places where the railways are losing some money at least is in the thickly populated centres through duplication of services that are not required. I wish to support the hon. members in this House who have been pleading for a consolidation of railways, and I believe that ought to be done under national control in order that we may save the people of Canada a great many millions per annum. I was rather surprised the other day when the hon. member for North Waterloo (Mr. Euler) in the course of his remarks on this subject said that the Canadian Pacific should be taken over by the government that consolidation should be effected under national control; to hear the

Minister of Railways say that it could only be taken over with the consent of the bondholders. Well, if the bondholders are not willing that the property should be taken over on a fair basis to save the people of Canada $100,000,000 in transportation charges, I do not think they have a right to expect, if a scheme can 'be worked out, that Canada will continue to pay this $100,000,000 per annum extra in freights and railway service charges in order to allow them to carry on the particular form of organization they desire. If the $100,000,000 can be saved, and the people of Canada are convinced of that, then no government can exist that will not go ahead and try to put it through.
On October 10, 1924, the Prime Minister made the following statement in Edmonton:
There is north of this city a vast tract of land that is crying out for development. The Peace River country is immense and among the richest in Canada ... I pledge myself that as soon as it is humanly possible the great Peace River country will be given that means of railways that will bring to the people of that country the outlet that has been so long delayed, and will open up the country.
I believe that that undertaking was made in good faith. I find however that the Speech from the Throne uses much more guarded language; it says that in due course steps will be taken to open up the Peace river, and so on. A few days ago when I asked the Minister of Railways (Mr. Graham) regarding the matter, he said that he found that the question was a difficult one. Now, that is not progress, Mr. Speaker; it is really the opposite of progress. I hope that even though the minister has not disclosed anything definite to us yet, some progress is being made behind the scenes. I may say that I have not been asking these questions' to embarrass the minister or the government, but because I represent people who are putting up a heroic struggle to do something in the development of Canada and to establish themselves under difficult conditions. They have come to that stage where it is very nearly a question of life and death with them. We have not any special delight in embarrassing anyone, but I believe the interests of the people who are carrying on that struggle are more important than the comfort of any minister or any railway executive in Canada.
We have, Mr. Speaker, a good country. We have one of the best climates in the country, or as good as any. We have land as rich as there is anywhere, I think, in Saskatchewan, Manitoba or Alberta, or, for that matter, in Ontario. We are geographically situated, potentially at least, very favour>
The Budget-Mr. Kennedy (Edmonton)
ably. We are practically as near Vancouver as Edmonton is, but with our railway development as it has taken place we are just about twice as far from Vancouver as Edmonton is.
Now, that country was settled in 1910. Previously there was some settlement, but a big inflow of settlers took place in that year. The settlers, of course, carried on for a few years in the hope that the Canadian Northern railway *would go through northwest from Edmonton to the Pacific coast. In 1912, after having gone over the Edson trial 210 miles on what the Irishmen call the " mud cana'l," we met Canadian Northern representatives in the village of Grande Prairie who told us that the very limit of time it wiould take to get the Canadian Northern through there would be three years, and they were buying options on right of way through the country then. That resulted in a great deal of settlement, but the Canadian Northern is not half way to the Peace river country yet. That country is served by the Edmonton, Dunvegan and British Columbia railway. This line leaves Edmonton and runs northwest to McLennan, 132 miles north and 150 miles we^t of Edmonton. It forks there, one past running into the Peace river, and then across the river and west through the settlement north of the Peace river for a distance of 23 miles. The other goes directly west through Spirit river, then south to Grande Prairie, running through the Grande Prairie district, a distance of about 25 miles. We are situated 400 miles northwest of Edmonton. In order to get to Vancouver we ought to be able to go south about 200 miles and then directly west about 500, but instead of that we have to go southeast to Edmonton about 400 miles, south to Calgary another 200, and then west 650 to Vancouver. The Grande Prairie country is about 400 miles north of the international boundary, 'and it embraces the Grande Prairie district about 80 miles in length, and of an average width of from 30 to 40 miles. Grande Prairie is densely settled. There were no Canadian Pacific or Hudson bay lands in that district, so that everything has been taken up; and the same is true df the district north of Peace river, where we have a territory about 70 miles in length and 15 to 20 miles in width. Then we have that other prairie in the constituency of my hon. friend from Cariboo, the Pouce Coupe district. I want to endorse what the hon. member for Cariboo (Mr. McBride) has said about the difficulties of the settlers in that district. They are still 60 miles from a railway, and some of the people in the Grande Prairie district and north of the Peace river are from 10 to 45 miles from a railway. I.have
seen cattle shipped out from Pouce Coupe, raised to the age of two years, driven 65 miles, and still a liability of 25 cents a hundred on the hands of the farmer who raised them. It cost then-in 1922-one dollar a hundred at the very least to ship cattle from Spirit River to Edmonton, and I have seen those cattle, after having been raised on Pouce Coupe and driven sixty miles to the railway, shipped to Edmonton at one dollar a hundred, and sold on the Edmonton yards at 75 cents a hundred. It is no wonder that we say the settlers there have carried on a heroic fight and it is no wonder that they are looking for some relief.
There is only one possible real solution of this question so far as the Peace river country is concerned, and that is a direct outlet to the Pacific and we ought to be in a position to-day to get a decision on that matter. We have spent during the last two years a total of $125,900 for surveys. I have stated in this House that I thought the route down to Brule or some point on the Canadian National east of the mountains was the best route but now that these surveys have been made we must, of course, allow the engineers of the railway to determine which is the better route. We have had surveyors working on this question for two years, at a cost of $125,000, and II think we should know what the decision is. The Canadian Pacific railway has been in that country for five years and they also have done some surveying, and I say we ought to be in a position to get a statement from the Minister of Railways as to what the intention of the government is. It is very important that the proper route be decided on because though we have four hundred miles of railway running from Edmonton north to the Peace river country, yet there is much well developed arable country not served by local branch lines. It is not wise to develop those branch lines until the outlet to the Pacific coast is determined on and laid out, because you cannot lay them out wisely so that they will fit in with the general scheme until the outlet has been decided upon. Furthermore, it is very important that we get an immediate decision. I think that ought to be available after the money we have spent on surveys and after the work the engineers have done.


Mr. CAHILL:: I understand my hon. friend to be advocating the construction of a line from Peace river to the Pacific coast, and that such construction would be very important to his constituency. Does he think that by criticizing the government and saying that the government will not keep their Word he is acting in the best interests of his constituents?
2710	COMMONS
The Budget-Mr. Kennedy (Edmonton)


Donald MacBeth Kennedy: I have not said the government will not keep their word. What I did say was that they have not carried out their pledges. They may do so some time in the future, next year, for instance.


Frank S. Cahill: What is the difference?


Donald MacBeth Kennedy: I would say to my hon. friend that I am not walling to shut my eyes to facts. I want to face the facts, and I would like the government to do the same. I hope the government will face the railway issue and the tariff on their merits. My criticism, if it is founded in fact, should have no bearing at all on the question of whether that outlet will be built or not. I am not willing to bargain my support for a tariff if I think it is wrong, or to give my support for the sake of getting something else.


Frank S. Cahill: Does my hon. friend think the best course to take in order to get this railway is to vote the government out?


Donald MacBeth Kennedy: I remember when we came into the House of Commons first, the hon. member for East Calgary advocated that we should vote on questions on their merit, without involving confidence or no confidence in the government. I supported that view, and I still believe in it. My hon. friend, I believe, and those around him voted to call almost any adverse vote on any government question a vote of want of confidence. That is a difficulty we are facing. I want to tell my hon. friend that I am not willing to submit to that rule. I have protested against it, and if it lands us in difficulties we shall have to face them. In the meantime I am offering my criticism to the government for what it is worth, and I intend to stand by my convictions in the matter. If the government is going to make it a personal matter, I cannot help that. I am not dealing with this matter on a personal basis at all. I am acting in what I believe to be the public interest. I may be wrong, and it may be that the people of my constituency will think it will be better to elect somebody else who will support the government through thick and thin, right or wrong, to get certain things. But I cannot do that; I am not doing it now, and I do not intend to do it.
Mr. Speaker, the Peace River district is only part of my constituency. I represent an area about half as large, I believe, as the province of Alberta. The people in the Peace river district are hanging on, and I say that it is not fair to keep them hanging on, if we

have got the facts, without letting them know what we are going to do. They have gone into that country about three hundred miles back from a railway, and have freighted their supplies in there for the first few years. During the last few years most of the men hauling out wheat have been hauling it out over trails from thirty to forty miles long. They have been doing that in the hope that something better was coming, and I think it is only fair that the government with the facte in its possession should come out definitely and state its policy, whether it intends to do anything or not.


George Perry Graham: Which government does my hon. friend refer to;-The government of Alberta that has leased to the Canadian Pacific the Edmonton and Dunvegan, in whose hands rests the transportation so far as that country is concerned, or the federal government which has no control over the Edmonton and Dunvegan whatever?


Donald MacBeth Kennedy: I was not informed until now that the Alberta government had re-leased to the Canadian Pacific.


George Perry Graham: I say there has been a lease for several years. It does not expire till July. I thought my hon. friend was referring to the Alberta government giving its decision about a lease.


Donald MacBeth Kennedy: That is a
fine point.


George Perry Graham: No, it is not; it is the truth.


Donald MacBeth Kennedy: I want to tell the minister that the present arrangement with the Canadian Pacific will not save that country, and what this government has to consider is whether that country is worth saving or not. If the agreement with the Canadian Pacific terminates in the near future, if the Canadian National go into that territory, there is no question about the Canadian Pacific being able to make some arrangement with the Canadian National to give us direct connection, or they will have to get out and let the Edmonton and Dunvegan railway fall into the National Railways hands. They could not possibly compete with the route to the west. You may say: let us use the present route and save the additional capital expenditure. Well, there is something to be said for that, but unless it is possible to give us a decent reduction in freight rates, the thing is hopeless. The real question back of this whole business is this, whether this Peace river country is

The Budget-Mr. Kennedy (Edmonton)
worth saving and worth developing. Men who have been hauling wheat thirty and forty miles for years begin to feel old age creeping upon them very, very fast. When men go into a country some distance from a railway, they go in there with the hope that a railway service is coming. They have been promised it in days gone by, and I think that the government ought to decide in the very near future whether or not they are going into that country. Under present conditions I do not think the Canadian Pacific can possibly help us out. The main line of that company runs to our natural exporting port at Vancouver, but it involves travelling by Calgary and over the high grades in the Rocky mountains. The Canadian National railway is two hundred miles nearer the Peace river country and it has favourable grades through the mountains. That territory is therefore a natural territory for the Canadian National. I wish to give some figures regarding freight rates between Alberta points and Fort William and Vancouver:
To	To
Fort William Vancouver
Freight rates from-	per 100 lbs.	per 100 lbs.
Edmonton-Calgary.. ..		22} cts.
Lethbridge	... 25	231Grande Prairie	,. .. 43	39}Sexsmith	. .. 43	394Spirit River	.. .. m	39B rwyn	... 42J	39Wembly	... 44	401Whitelaw	.. .. 43	39.}
I have also a statement regarding traffic originating in the Peace river country. It is as follows:


DOMINION BUREAU OF STATISTICS-TRANSPORTATION BRANCH, EDMONTON, DUNVEGAN AND BRITISH COLUMBIA RY.
[Stage Direction]
Year		Grain	
	Origin- ating	Received from other	
	Road	Canada	
Tons	Tons	Tons1916	15,868	44	15,9121917	11,460	7,629	19,0891918	29,162	10,226	39,3881919	37,941	3,600	41,5411920	41,538	8,394	49,9321921	42,210	3,143	45,3531922	48,061	19,949	68,0101923	49,102	11,196	60,2981924	79,229	17,022	96,251
DOMINION BUREAU OF STATISTICS-TRANSPORTATION BRANCH, EDMONTON, DUNVEGAN AND BRITISH COLUMBIA RY.-Con.
Year	Live Stock		
Originating on this Road	Received from other Roads in Canada	TotalTons	Tons	Tons1916...	2,740	222	2,9621917	3,499	1,540	5,0391918	4,975	2,528	7,5031919	13,088	405	13,4931920	7,380	799	8,1791921	3,708	1,086	4,7941922	8,712	2,321	11,0331923	7,472	3,043	10,5151924	9,047	3,036	12,083Year	Total Freight Handled	Originating on this Road	Received from other Roads in Canada	TotalTons	Tons	T f. ns1916	159,906	7,224	167,1301917	112,045	58,661	170,7061918	141,700	48,218	189,9181919	149,215	6,110	155,3251920	157,863	20,047	177,9101921	137,805	22,433	160,2381922	142,393	39,288	181,6811923	189,969	32,458	222,4271924	314,626	49,395	364,021
In spite of the fact that we have been losing a large part of our population traffic is increasing. The reason, of course, being this: In a new country it is very difficult to produce a large amount per capita for a few years until buildings, wells, fences and so on have been conveniently built. After the settler gets to that stage he can increase his production, especially in a good year. I would have nothing to say if the Canadian Pacific Railway could and would give us a direct outlet, but it can operate the Edmonton, Dunvegan and British Columbia railway, only in connection with its lino to Edmonton or Clallgary. Therefore it can never in my opinion do anything than fight for very high freight rates, rates that place us at a tremendous disadvantage with the rates granted to the rest of the country. Therefore, I say it is the conviction of men who are farming in that,district and will have to pay those rates that we will have a very difficult time unless a line is built directly to the Pacific coast. The Canadian National is comparatively close to the Peace river country as compared with the Canadian Pacific railway, therefore, I think it is the duty of the former system to solve that problem. I think that if they do they are bound
2712	COMMONS
The Budget-Mr. Kennedy (Edmonton)
to take over under some arrangement the Edmonton, Dunvegan and British Columbia railway because I do not see how the Canadian Pacific can handle it. I want to say this much further: Owing to unnecessary mileage having been built in days gone by through a wrong location, I fear we will have to face the problem of possibly taking some loss in connection with it. But I also say the counsel that because we have made mistakes in the past we should tie ourselves up and do nothing in the future is the counsel of despair and a hopeless counsel for this Dominion. It is up to us to learn wisdom from our past mistakes and past successes, and try to apply that knowledge in the solution of the future problems of the country.
I notice that the hon. member for Brome (Mr. McMaster) is in the House, and there is one other thing I wish to refer to before I sit down. That will involve going back to the tariff again. A statement has been made that the reductions in the duties on implements were about 83 cents per half section to the farmers of Canada. The hon. member for Brome challenged those figures, and I think he was justified in making the challenge. Apparently the sacrifice in duty, so far as the government was concerned, amounted to 83 cents. However, I have a statement here which was prepared by one of the government departments which I wish to place on Hansard. It will speak for itself:
COMPARATIVE STATEMENT SHOWING THE.BENEFIT TOTHE: FARMERS	CANADA
(b) OF THE THREE PRAIRIE PROVINCES BY THE REDACTIONS IN THE TARIFF ON AGRICULTURAL IMPLEMENTS IN SESSION 1924.
Statement No. 1-
Duty on dutiable farm equipment entered for consumption from April 1st to October 31st, 1923 and 1924 for all Canada.
Value
$5,644,528 (free 3,684,418)
Duty
...$ 814,331.01
Percentage of Dutiable goods
%
1924
$3,156,986 (free 1,697,896)	S 306,836.57	 97
On imports of all dutiable agricultural implements valued at $3,156,986, April 1 to October 31, 1924, there was a reduction of duty of 4-7% or an actual reduction of duty paid by the farmers of the whole ot Canada of $148,378.
By return to E. J. Garland acres in field crops	 57oft
half sections	 ®nS3 ™
saving per half section	 83
Statement No.2
Duty on dutiable farm equipment entered for consumption from April 1 to October 31, 1923 and 1924 for Manitoba, Saskatchewan and Alberta.
		1923			
Value	Duty	% ,$	1,767,320	(free $787,095)	$ 260,347.40	14-72,184,635	(free 1,433,465)	321,595.43	14-7Alberta	610,940	(free 313,820)	84,184.95	13-7$	4,562,895	$ 666,127.78	14-4 average1924	$	853,259	(free $432,248)	$ 85,409.80	10-0979,994	(free 524,279)	97,795.39	9-9Alberta	346,722	(free 140,807)	34,640.27	9-9$	2,179,975	$ 217,845.46	9 [DOT] 9 average
So it will be seen that the saving to the was given for a half section, and the figure of farmers was three times 83 cents or about $2.49 would be for a half section also. I may $2.49 per half section. The figure of 83 cents say that that statement would be pretty well 

The Budget-Mr. Gardiner
borne out by a statement made by the Minister of Finance (Mr. Fielding) who I regret is unable to be with us. This statement is to be found at page 3151 of Hansard of 1921 as follows:
But it must be remembered-and economists, I think will agree-that the saving you make in a case like that is not to be measured only by the amount that you did not pay into the Customs: you have to take into account also the check that was put upon the rise of prices at home, and that for every dollar saved to the people in that direct way probably two dollars were saved in the difference between the prices prevailing and those which would otherwise have been charged by the home manufacturer.
William Alves Boys: In making a few remarks an hour ago I referred to the discussion on the canteen fund, and stated, that I had only been able to find one day, March 5, on which 38 columns of Hansard were occupied in dealing with it. I did say that I was not certain that I was right. I have since found I was wrong and in justice to my hon. friends opposite I want to put myself right. I find that on March 24, 67 columns were occupied in dealing with the canteen fund out of a total of 114 columns on that date. On March 25, Wednesday, a half day, 37 columns were occupied out of a total of 52. I think it is only right that I should correct myself and not leave a false impression.


Mr. JOHNSTON:: Now that the whip of the Conservative party has risen to a question of privilege, I do the same, and I would like to explain to the House that as there has been some discussion as to the time occupied by the different members of the different parties of this House I think it is only due to members of the Progressive party that I should give the figures and place them on Hansard. The Liberal speakers up to last night numbered 46. They used 838 columns of Hansard, or an average of 18.2 to the speaker. The Conservative speakers numbered 26, using 629 columns, or an average of 24.1. The Progressives, of which party I have the honour to be the whip contributed 25 speakers, who used 382 columns of Hansard, or an average of 15.2. The Independents, which number 13, and one member I believe who is not connected with the 13, contributed 7 speakers, using 175 columns of Hansard, with an average of 25 columns. I think it is only due to the members for whom I have the honour to act that I should give this statement to the House.
M-. ROBERT GARDINER (Medicine Hat):	I recognize the fact that this debate
has been continued to an extensive length, but notwithstanding that fact, Mr. Speaker, and the fact that it is almost breakfast time, I 173
still feel it is my duty to make some remarks upon the budget, even at this early hour of the morning. So far as I am personally concerned,
I am very greatly disappointed at the budget. After the government last year made some slight reductions I had hoped personally that they would continue along those lines and that this year we would get some substantial reductions that would be really worth while; but unfortunately the government have not seen fit to give us' any reductions worth mentioning. Since this House met in session this year I believe the Prime Minister has made the statement that the reductions made last year have been a great success, but he has also made the statement that notwithstanding the fact that he recognized that those reductions were a great success, we must still pause to see how much this success really amounts to. One would naturally think that when a person or a government had been successful in any line of endeavour they would continue upon that line and reach a greater success, but that does not seem to be a propensity of this particular government, and under those circumstances naturally we feel very much disappointed. I quite recognize the fact, Sir, that the protectionists in Canada are very active in pressing their demands. They can readily mobilize, they can get the ear of the government very quickly and press their demands to an ultimate conclusion. But there is one point to which I should like to draw the attention of our protectionist friends, and that is this: That while they claim they are entitled to the home market and claim also that because of the fact they are entitled to the home market they should receive such a protection as would ensure that home market for them; yet I have never heard any of the protectionists make any suggestion to put into effect a policy that while they control the prices, they would see to it that they do not take undue advantage of the protection Canada affords them. We also find our protectionist friends telling us that protection will provide employment and good wages for our workmen. This seems to be a somewhat ridiculous claim, because if you will look the world over you will find that in some of the highest protection countries in the world they have the greatest unemployment, and furthermore, if we ever go to free trade England, we find they have unemployment there, and consequently it does not seem that the question of protection or free trade is a great factor in providing employment for the people of the various countries. There is one point that always appeals to me when I hear our protectionist friends discussing the question of adequate protection, and that is this: That in my judgment pro-



The Budget-Mr. Gardiner
tection has absolutely failed to protect the purchasing power of the people in Canada. And in my judgment I believe also that the question of the purchasing power of the people of Canada is a bigger factor to-day than the question of protection or free, trade is. At the .present time naturally we pay some attention to the question of the purchasing power and the distribution of that purchasing power, and I am satisfied that our industries will never meet with the success that they should until this problem is solved. We find also our protectionist friends pointing to the United States and telling us what a great success protection has been in that country. They maintain that conditions in the United States at the present time have been brought about by the extraordinarily high protection that the United States affords to its manufacturers, and when the Speech from the Throne was being discuss.ed on February 10, 1925, the hon. member for Vancouver Centre (Mr. Stevens), in referring to the United States, made the following statement :
And with a 4,000-mile boundary and a tariff three times as high as ours.
In the first place the hon. gentleman's imagination runs away with him when he mentions the boundary line between Canada and the United States, but when he mentions the question of the tariff being three times higher in the United States than in Canada his imagination goes out of bounds altogether, and I propose to give to the House to-night the actual figures in that regard. I desire to give the House and to place on Hansard a comparative statement, in so far as the United States of America and Canada are concerned. The first item that I want to bring before the House is the duty collected in both of these countries. In Canada in the year 1921 there was collected a total duty of $179,667,683. The population at that time was 8,788,483. That meant a per capita duty collected in Canada for that year of $20.44. In the United States for the same year the per capita duty collected was only $2.86. In the year 1924 the per capita duty collected in Canada was $14.65 and in the United States only $4.86.
I have another table here which is very important and interesting and which deals with the average rate of duty on dutiable imports. In the year 1921, the average rate of duty on dutiable imports was 21.20 per cent in Canada and 20.30 per cent in the United States. Therefore, hon. members will notice that the average rate of duty collected on dutiable imports in that particular year was greater in Canada than in the United States. When we come to the year 1924, we find conditions somewhat changed, but this is applicable only to last year's business. In 1924, the average rate of duty collected in Canada was 22.85 per cent and in the United States it rose to 35.51 per cent. Another point with regard to these duties as between Canada and the United States and which we must recognize, because it is very important, is the average rate of duty on total imports. That includes the free, of course, as well as the dutiable imports. In 1921, the average rate of duty on the total imports into Canada was 14.49 per cent, and on the total imports into the United States it was only 8.43 per cent. In 1924, the average rate of duty on total imports into Canada had risen to 15.13 per cent, and on total imports into the United States it had risen to 15.33 per cent. That means to say that the average rate of duty collected in the United States last year was only .20 per cent higher than the average rate of duty collected in Canada. That, of course, leads us to believe that, while on certain imports going into the United States, the rate of duty is much higher than the duty on goods going into Canada, the United States has a much larger free list than we have in Canada, and the tax payers of the United States are, to all intents and purposes, rot paying much higher import duties on the average imports into that country than we are doing in Canada. Therefore, when our protectionist friends point to the United States as an example of prosperity, we must believe there is some other factor connected with their prosperity that is not within the scope of the protective tariff. I will place this list on Hansard and hon. members will find at the bottom explanatory notices which will give the references for the various items. The list is as follows:

The Budget-Mr. Gardiner


COMPARISON OF AVERAGE RATE OF TARIFF DUTIES CANADA AND UNITED-STATES
[Stage Direction]
-	Duty	Population	Canada	U.S.A.$	$	%Duty collected per capita	(g) 179,667,683	8,788,483	20.44	1921 	(a) 308,025,102	107,833,284	2.861924	(h) 135,134,894	9,226,740	14.65	1Q24 	(b) 545,012,115	112,078,611	4.86Duty	Imports	p.c.	p.c.Average rate of duty on dutiable imports	1921	$179,667,683	(i) 847,561,406	21-20	1921 	308,025,102	(c) 1,517,000,000	20-301924	135,134,894	(j) 591,299,094	22-85	1924 	545,012,115	(d) 1,535,000,000	35-51Average rate of duty on total imports	1921	179,667,683	(k) 1,240,158,882	14-49	1Q91 	308,025,102	(e) 3,654,000,000	8-431924	135,134,894	(1) 893,366,867	15-13	1Q94 	545,012,115	(f) 3,554,138,268	15-33
Explanatory Notes:-
U.S.A.-For items (a) and (b) see annual report of U.S. Secretary of the Treasury, 1923-24, p. 391.
For items (c), (d), (e) and (f), see U.S. Trade Information Bulletin No. 27G, p. 2.
Canada.-For items (g) and (h) see Canada Year Book 1924, p. 455.
For items (i), (j), (k) and (1), see Canada Year Book , 1924, p. 452.
Mr. WHITE:: Can the hon, member give the House the per capita imports for Canada and the United States for the same years?


Mr. GARDINER:: I was coming to that next. The hon. member for Vancouver South (Mr. Ladner), when speaking in this House a few days ago, purported to give certain figures with regard to imports and exports. I called his attention at that time to the fact that, in my judgment, they were incomplete and did not disclose the actual situation. I, therefore, went into the matter and I have this information to give to the House. This deals with the per capita imports and exports of the United States and Canada. Last year the exports from the United States amounted to $40 per capita, that is, taking the population at 112,000,000. The imports into the United States amounted to $32 per capita. Therefore, we see that the United States last year exported more than they imported to the extent o.f $8 per capita. Last year the exports from Canada amounted to $118 per capita, that is figuring a population of 9,000,000, and the imports into Canada amounted to $38. Let us take the percentage of imports tc exports in the United States and Canada. We find that in the United States
mi
they imported 80 per cent of their exports, or in other words, they imported four-fifths of the volume of their exports. In Canada the percentage of imports to exports is 75 per cent. That is to say that the Canadian people imported 'less per Capita on a percentage basis than did the people of the United States. Consequently, we must come to the conclusion that it is not high protection that is making the United States prosperous. The reference to these figures will be found in the Commercial Intelligence Journal of March 14, 1925, and for Canada in the Department of Customs and Excise.
Many members in the House, in discussing the budget dming this session, have suggested the possibility of imposing an export duty-on certain raw materials leaving Canada. They have maintained that it is essential that we should manufacture practically all our raw material in thi-s country if possible and they have pointed to the United States; as an example of a country that is manufacturing to all intents and purposes its raw-material and exporting the surplus of the-manufactured product. I am going to quote again from the Commercial . Intelligence' Journal of March 14, 1925. This deals -a groups with the exports of the United States
The Budget

Mr. Gardiner

for the year 1924. The first item we have amongst these export figures is:-
Percentage
Article	Amount of total exports
to United States
Crude materials for use in
manufacturing	$1,326,285,567	29.19
Foodstuffs in crude condition
and food animals	 302,135,202	8.72
Foodstuffs partly or wholly
manufactured	 575,036,612	12.76
Manufactures for further use in manufacturing, that is to say, goods only partly
manufactured	
610,553,785	13.58Manufactures ready for consumption	
1,588,183,340	35.30Miscellaneous	
6,555,533	.15
This shows conclusively that the argument put up by our protectionist friends, that we should manufacture all the raw material we can produce in Canada, does not hold in the great protectionist country to the south of us, where as a matter of fact the manufactured goods ready for consumption amount to only 35.30 per cent of the total exports. I think therefore that we should pause to consider whether we should put an export duty on certain raw materials, or to impose an embargo as the case may be, in view of the fact that a large percentage of all the exports of various countries go out in the form of raw materials, and this for the reason that the people who purchased raw materials demand them and will procure them no matter from what source.


Mr. DICKIE:: How much raw material, of the kind with which our argument was concerned, is shipped out of the United States, such as wood and wood products? And the hon. member must remember that this is not a yearly crop.


Robert Gardiner: I have not the figures in regard to that item; the statement just gives all crude materials.


Charles Herbert Dickie: These particular materials are not an annual crop.


Robert Gardiner: The Acting Minister of Finance (Mr. Robb) brought down an amendment to the Dumping Act. As already stated in the House on more than one occasion, the minister proposes to withdraw this amende ment and allow the act to stand as it is at the present time. While personally I believe in the greatest freedom of trade that we can possibly get in this country, I am just as satisfied of the fact that so long as this Dumping Act remains on the statutes it will be idle for the people to think that they are getting any reductions even when such reductions have ostensibly been made. So long as the [Mr. R. Ciardiaer.l
department has the opportunity of enforcing the Dumping Act just as they see fit then I am satisfied that any reductions that are made in the duties will be of very little avail.
I am not of course in the con-5 a.m. fidence of the Acting Minister of
Finance and consequently I do not know what reason he would have for withdrawing the amendment to the Dumping Act. Possibly some pressure may have been brought to bear upon him; but whatever the reason may be I feel satisfied that he is doing the right thing in withdrawing it and I should be still further satisfied if the Dumping Act were put in such shape that it could not be applied by the officers of the department as they saw fit or to suit their particular mood.
The government proposes to establish a tariff board, or rather to employ certain men fn the departments to go into the whole question as to whether it is desirable to raise or .lower the tariff as the case may be, as circumstances warrant. There is just one point I want to raise in this connection and that is this:	if these employees of the different departments are merely to keep the information to themselves or give it only to the Minister of Finance or the government, then the tariff board will be of very little use to the people of the country. I maintain that so long as there are employees of this description in the service of the people, and so long as they are paid to perform a certain duty, which in this case would be the securing of information, the members of this House should be just as much entitled to that information as any member of the government; and I shall never be satisfied, if we are to get justice in this regard, unless the information is forthcoming from time to time. It is quite tine of course that the protective tariff is very advantageous to the manufacturing industries of Canada. But how does it affect the agricultural industry, which after all is a highly important one? Many hon. members seem to forget the importance of that particular industry, and we must therefore examine the situation to see how protection affects the farmer. It may be true that in some few cases of no great importance the farmer may derive some benefit from certain protective duties. But I am satisfied that in the long run the Canadian farmer has to bear the brunt of the protective system, -which can be so manipulated that eventually the burden will rest upon the shoulders of the agricultural community. They are the ones who have to bear the largest portion of the protective tariff.
I have said that agriculture is a very important industry in this country and I am going to quote a few figures from the De-

The Budget-Mr. Gardiner
partment of Customs and Excise, being a summary of the Canadian trade for the twelve months ending March 1925. The total exports from Canada last year amounted to $1,069,067,353, while the export of agricultural products totalled $606,330,292, the exports of all other products being $452,737,061. In other words, the agricultural exports of Canada last year were in excess of all other exports to the extent of $143,593,231. So that the percentage of agricultural exports, in relation to the total exports from this country last year, was 56 per cent. Of course, some of these agricultural exports were partly manufactured, and that added to their value. Nevertheless we must recognize that those products have their origin on the farms of Canada, and just so long as agriculture is responsible for the exportation of such a large volume of commodities in comparison with all other commodities produced in Canada, then it is only fair that agriculture should be given due consideration. But when we come to consider the tariff duties in force in this country I can say very emphatically that agriculture has never been given the consideration it should have received.
I wish to refer for a few moments to the conditions of western agriculture, because that is primarily what I am interested in. I think it can be stated that, taking it by and large, the farmers of western Canada are producing at a loss. Just what the extent of that loss may be it is very hard to determine. I am aware, of course, that in certain favoured districts during the last year where they had the good fortune to have heavy grain crops, some of the farmers-and the phenomenal rise in the price of grain was also an important factor -did very well. But we cannot deal with isolated localities; we must deal with average conditions, and I believe we are justified in saying that on the. average the grain crops of Canada last year were produced at a loss.
So far as the constituency I have the honour to represent is concerned, I would like to direct attention to the conditions in that part of the province. True, they have similar conditions in other parts of the province. This land was thrown open for settlement about 1908 or 1909. It was advertised to the world as land fit for settlement, capable of producing good crops, grain, fodder and so forth. While it is true that the first few years we were in there the conditions were fairly good, in recent years the land has not been as good for agricultural purposes as we anticipated, and as we were led to believe. Before this land was thrown open for settlement I understand that the officers of the Department of the Interior used all the persuasive powers they could exert upon the minister to advise him against the opening up of this section of country on the ground that it was not first-class agricultural land. Remembering the fact, therefore, that the minister opened up this land against the advice of the officers of his department, we must hold the government responsible for the mess that that part of the country is in. I have travelled through practically the whole of my constituency during the last two years, and I can assure you that I have seen some heartrending scenes. For instance, last. fall I was on a trip and I went down to see some people -with whom I was fairly well acquainted. I found that they had left the district for good. This couple came from the United States after reading the advertisements sent out by the Department of Immigration. They have buildings on that place to-day that I will guarantee could not be built in these times for less than $20,000, and the investment they made in that property represented their entire saving of a lifetime. They are now an old couple, and last fall they left that district and the man went out to find a job. That is one of the isolated cases, and it is but representative of thousands of similar cases in that part of the country. The question that arises now is, what is the government going to do about it? The federal government cannot escape the responsibility, having invited those people there. Not only is there a large capital investment in the farms themselves, but there is a tremendous investment in the towns and vil-ages, so much so that the people in business there have been in the same unfortunate position as the farmer that is to say, they have lost everything they put into their business. I sincerely trust that the government will give some consideration to this question, because it affects a very large portion of the southeastern comer of southern Alberta as well as a portion of Saskatchewan. In justice to the people who are still there and desire to make, a living there, the government should endeavour to find out what this land is suitable? for and by what method those who are in that country can attain some measure of success'. I am satisfied that the land is good for something, but the people have not the means for carrying on experiments to find out what it is fitted for. I trust the government will lose no time in looking into the matter.


Mr. LEWIS:: What is the rainfall in that
district?


Robert Gardiner: It varies from eleven inches up to twenty. Of course it is sometimes less than eleven inches.

The Budget-Mr. Gardiner
Now, the farmers of the west have been advised to go into mixed farming. The country I represent could go into mixed fanning because fodder corn can be grown there without any difficulty. But very few of the people know anything about the growing of corn, and if the government could give some lead in that respect, I am satisfied we could work out a system of agriculture that would be satisfactory in that district, and produce a tremendous volume of agricultural products. But when we attempt to go into mixed farming, when we attempt to milk cows for the cream and butter we can get, the government comes along and puts a tax on the tickets we use in that connection. During the last few days I have had more telegrams in regard to that matter than I have been able to read. The eastern farmer can deliver his own milk or cream to the factory, but in western Canada the factories are few and far between, and sometimes we have to ship our cream very long distances by express. That entails heavy expenditure to the farmer who is selling the cream, but on top of the express rates the government imposes this tax to which I have referred. I suggest that the government should give this matter also their attention and see if some remedy can be effected.
In my judgment the farmers of Canada are faced with many problems which are just as important as the tariff problems. I am satisfied of this fact, that while we might get substantial reductions in the tariff, which would be appreciated, at the same time those reductions would hardly begin to solve the problems that we farmers have to meet. If you take price levels say just prior to the war and compare them with price levels today, ;you will find that in so far as manufactured goods and services are concerned, the prices of manufactured goods to-day are much much higher than the prices of agricultural products, rand this has been the case for quite a few years. I feel that until such a time arrives as we can get price levels more equalized than they are to-day, agriculture is going to have a very strenuous time in Canada, and just so long as agriculture is having a strenuous time, industry in Canada may also expect to have a strenuous time.
The position the farmer is in is something like this. When the farmer has worked hard and produced some agricultural product, when that product is ready for the market he looks for a buyer. When he finds someone who is willing to buy his product, what is the question that he asks the buyer? It is this: What is the price you will pay me for this product? If the farmer sells his product and

gets the money for it, he no doubt goes to the general merchant to buy something that is required for the farm or the home, as the case may be, and when he sees what he requires in the store, what is the question that the farmer asks the storekeeper? It is this: What is the price? So that the farmer is in the imfortunate position that both when he sells and when he buys he has to ask that same question, what is the price? And just so long as the farmers are content to stay in that position, agriculture will never be prosperous. It is impossible for it to be prosperous under those circumstances. I will guarantee there is no business in Canada except farming that could exist for twelve months if it was placed in that same position the farmer is in of having to ask both when he buys and when he sells, what is the price?
That brings us, of course, to the problem, what are the farmers going to do under these circumstances? We have attempted in western Canada to do something to deal with this particular question. W e have organized our co-operative selling organizations for the purpose of the better marketing of the products of the farm. True, we have not them organized as extensively as we would like, but we are proceeding very satisfactorily, and I am hoping to see the day when these cooperative selling organizations will have in them every farmer in western Canada, in fact, every farmer in the whole Dominion. When that day arrives, Mr. Speaker, we can expect something worth while to happen, because when the farmer gets into that position where he will be selling co-operatively, instead of individually he will be in a very different position from what he has ever been in before in the history Of this country or of any other country in the world, for he will be in the position of having something to say as to the price of the commodity he has to sell. He will also have something to say as to the price he will pay for the commodities he has to buy. We will then be in a position to say to our manufacturing friends:	Now we will
exchange the products of the farm for the products of the factory on the basis of the units of labour contained in the various commodities, and on no other basis at all. I am satisfied of this fact, that to-day when the farmers of Canada exchange the products of the farm for the products of the factory they are giving at least five to six units of labour in exchange for manufactured products that probably contain only two and a half to three units of labour, and just so long as the farmers remain in that unfortunate position

The Budget-Mr. Gardiner
those who have exploited them in the past, and who are to-day exploiting them, will continue to do so until the farmer in self-defence joins the co-operative selling organizations and does his selling co-operatively instead of individually. In my humble judgment there are greater possibilities so far as agriculture is concerned in these co-operative selling agencies than in almost any other thing I know of, and I am trusting and hoping to live to see the day when that idea will be brought to full fruition, because Mr. Speaker, I expect to enjoy a good laugh at the expense of our manufacturing friends, who have been exploiting us so handsomely and for so long.
I would like to give the House a little information with regard to the price of agricultural products, and to show to the House if I possibly can why it is that the purchasing power of the farmer to-day is to all intents and purposes gone, and why it is that industry also of course is beginning to feel the pinch as severely as it does at the present time. In the year 1918 the total value of agricultural products amounted to $1,881,718,000; in 1919, 82,109,291,000; in 1920, $2,011,201,000; 1921-and here you will note a tremendous drop from the previous year-$1,383,-95S.OOO; 1922, 81,389,289,000; 1923, $1,350,096,000; 1924, $1,453,388,000. Now if you examine those figures very closely you will find that the purchasing power of the farmer in 1924 as compared with the year 1920 dropped about
8700,000,000, and when you find the purchasing power of any class in this country drop to the extent of 8700,000,000 you can readily understand that all the other industries in Canada are going to feel the effect of that drop. That is the trouble that we find our farmers are up against to-day, and just so long as they lack purchasing power, just so long may we expect the privileged interest of Canada to come knocking at the doors of the government asking for higher protection in order that they may be able to get a little more profit if they possibly can. But that in itself is no solution. It will not solve the problems that we have to meet, and we will have to meet those problems in a different way and in a way that will be more equitable to all. We have heard a good deal of discussion since the budget was brought down as to just what is the national debt of Canada. It is very hard to find out just what that debt is. The experts that we have heard in this House all had different figures; and when we find that experts disagree we can hardly expect the ordinary member of parliament to be able to .determine what the actual debt of Canada is
at the present time. But the point I wish to make this morning is that we have a great national debt, growing a little it is true all the time. What are we doing to try and meet that national debt? No provision is being made at all for the liquidation of the national debt. We are making no provision for any sinking fund that I am aware of, nor in any other manner whatsoever, to meet the great burden that we have now upon our shoulders.
I am satisfied of this fact, however, that the people of Canada are expecting this government, or some government, to start and look into this question of trying to meet our national debt and doing so at the very earliest opportunity.
The hon. member for Portage la Prairie (Mr. Leader) when he .spoke earlier in this sitting gave some figures with regard to the cost of certain departments of the government of this country. I have here a rather extended statement which shows the comparative costs of parliaments and the cost of government generally in Canada. Let me say here, Mr. Speaker, that I am in no hurry and if any other member of the House wishes to speak I will be glad to wait for him.


Hewitt Bostock: Order, order.


Robert Gardiner: The Budget-Mr. Gardiner
tal, was $424,645,217, in the provinces $130,887,303. In the municipalities, that is to say municipalities containing a population of 1,000 and upwards, the total cost of municipal government amounted to $247,255,345. Taking all these different forms of government we have in this country it cost the Canadian people for these legislatures $802,787,865. If we take our population again at nine millions we find it cost $89 per capita for government in Canada, or $445 for the average family of five. That is what it costs us for the various forms of government that we have in this country.
Now let us take a comparison of the cost of federal cabinets. We will again assume that the population of Canada is nine millions. First we have a governor general who receives a salary of $50,000; we have 18 cabinet ministers, one receiving $19,000 and 17 receiving $14,000, a total cost of $257,000. Adding these two items together we find that our federal cabinet costs us $307,000. The cost per million of the population is $34,111. That is for the federal cabinet alone. Now let us take the United States. The president receives $75,000, and there are twelve cabinet ministers at $12,000. The amount paid to the twelve is $144,000 or a total of $219,000, as against an expenditure in Canada of $307,000. The cost per million in the United States is only $1,991, as against $34,111 in Canada.
Now let us take our other services, say for instance our deputy ministers and other employees in the government services enjoying the rank of deputy minister. In Canada we have 22 deputy ministers and their salaries involve a total cost of $173,500. We have also 14 employees in the government service that have to all intents and purposes the rank of deputy minister. They cost Canada another $104,000. If we add these two items we find that our deputy ministers and those holding the rank of deputy cost Canada $277,500. Now let us look at the United States. They have deputy ministers there, or men in the employ of the government having the' same rank as our deputy ministers, to the number of twenty-one. They may be enumerated as follows:
Department of	Agriculture	
1Department of	Commerce	
1Department of	Interior	
2Department of	Labour	
2Department of	State	
4Navy department	
1Treasury department	
4War department	
1Post Office department	
4Justice department	
1The cost of these employees	in	the UnitedStates, 21 at $7,500,	equals	$157,000.	Let
us see the comparative statement between che United States and Canada for these offi-
cers of similar rank. Canada has 36, costing $277,500, or $30,833 per million of population. The United States of America has only 21 costing $157,500, or $1,432 per million of population. Now those figures are very important and are something that this House should give attention to. We have in Canada a very sparsely populated territory, and we cannot afford to carry all these high-paid officials, and while it is true that probably the saving might not be very much, yet at the same time it would be appreciated by the people of Canada and would be an incentive for the people to go ahead and do the best under the circumstances.
From time to time we hear a good deal of talk about secession from confederation in Canada. This is presumed to be heard in the Maritime provinces and also in the western provinces. Let me make my position very clear. I would be very loath indeed to see confederation broken up, and I would go a long way to try and retain it. But there is a point of view which must not be lost sight of, and it is this:	That people generally
speaking will only stand so much injustice, and when the pressure of injustice becomes too strong they will naturally resent it and take what means they have in hand to get away from that injustice. In so far as I am personally concerned, I have heard more talk about secession in the cities and towns of western Canada than I have in the rural districts. Now I think this is very unfortunate, but I would just like to place before the House the view that some of these people have placed before me, and they put it in this way: They say, " Suppose these nine provinces in Canada had no confederation at all, the provinces having full jurisdiction over their own affairs." And they go further and say, " Suppose the provinces of, say, Ontario and Quebec, came to the other seven provinces and said, 1 Here, let us have a confederation of these provinces and let us turn them into a Dominion.' These other seven provinces would naturally say ' All right, but under what terms do you propose to create this Dominion? ' " Now, Mr. Speaker, suppose these two provinces that I have already mentioned were to say, " These are our terms," and if they mentioned terms similar to those in existence at the present time, what do you suppose the other seven provinces would say to the two provinces? Do you presume for one moment that, say, the Maritime provinces and the three prairie provinces would accept, the conditions that we have imposed on us to-day and enter confederation on that basis? Why, the idea is simply ridiculous. If,

The Budget-Mr. Gardiner
therefore, they would not enter confederation on the present basis, how can Canada expect to maintain confederation unless those disabilities are removed? I have stated already that I would like to see confederation kept intact, but with a full responsibility of what I say, I am just as satisfied, Mr. Speaker a3 that I am standing here this momiDg, that unless a little more serious consideration is given to the various needls of the several provinces of the different parts of Canada I am very much afraid for confederation.
We find our protectionist friends, as I have stated before, appealing to the government for higher duties. I do not think that higher duties would be of very much benefit to the industries of this country bemuse of the fact that during recent times we have had a new factor entering into the whole situation, and that new factor that we are up against is this: That industry in Canada to-day is controlled by finance, and the captains of industry are not to-day free to develop their industries as they would like to, and just so long as parliament is willing to allow industries of all descriptions, including agriculture, to remain under the throttling influence of finance, I am satisfied that neither industry nor agriculture will prosper. It is an impossibility. Now in what position do we find ourselves to-day in regard to the financial situation? First of all, let me say that parliament, either in its wisdom or otherwise, has turned over to private individuals for their own private profit the function of printing and putting into circulation money; and money in the final analysis should be used only as a medium of exchange. That is the prime function of money, but because of the supineness of governments in the past we find that the financiers of Canada, as of the world over, are not only using money as a medium of exchange, or putting into circulation as a medium. of exchange, but they also have turned it into a commodity, and because of the fact that they have turned it into a commodity and find a greater profit in buying and selling money as a commodity than they do using it purely as a medium of exchange, the circulating function of money has been made subservient to the commodity nature that the finaneies have incorporated into money. In the final analysis, the basis of the real credit of Canada rests upon the ability of the Canadian people to produce and deliver goods. That being the real basis of credit, and being ,also the real basis upon which our money comes info circulation, naturally those who are responsible for the creation of the real credit of Canada are in an almost hopeless condition when they desire to use some of the circulating medium for 'the purpose of their
business. I do not see any hope that the government will ever seriously tackle this situation. I do not think they will. But I am satisfied of this fact, that it will be tackled in a serious way in the very near future, not alone by those who are engaged in agriculture, but by those who are engaged in industry, that is if they want the industries to survive. When our industrialists in Canada realize -the position they are in at the present time because of the fact that our Canadian financiers control the circulating medium, and when they recognize how closely that control is identified with their success, I am satisfied that both industrialists and agriculturists will demand that we nationalize the money system in Canada. I am not going to say anymore about that to-night because I believe I have taken up my allotted time,.
I want, however, before I conclude, to pass a few remarks with regard to the attitude of the Prime Minister (Mr. Mackenzie King) to-night. When he was speaking this evening, he adopted what, in my opinion, is a very peculiar attitude. In fact, if the rules would allow me, I would say that the Prime Minister adopted a very childish attitude, but if the rules of the House will not allow me to say that, I will not say it. The Prime Minister to-night thought it was quite within his privilege to lecture the Progressive members in this House 'and those who sit close by them. When I was nominated to contest the seat that I now have the honour to represent, there was a very distinct understanding as to my attitude in this House, and that distinct understanding was that I should not be guilty of engaging in political bargaining. The attitude of the people who sent me here is this, that I am to consider the measures that come before the House and to use my judgment regarding those measures. If I feel those measures are in the interest of Canada as a whole they expect me to support them; but if I feel that any measure that comes before the House is not in the interest of Canada as a whole, they expect me to oppose it. I do not propose to depart from that principle. Therefore, if the government requires my support at the present time, I shall be only too glad to give that support when I deem that the measure is one in the interest of Canada as a whole. That is the only basis upon which they can ever receive my support. It ilhbecomes the Prime Minister of this country to suggest even the possibility of political bargaining, and I was very sorry to hear him make the statement that he did to-night.


William Lyon Mackenzie King: What was the suggestion?
The Budget-Mr. Gardiner


Robert Gardiner: The suggestion was, to all intents and purposes, as I understood it, that if the Progressive party in this part of the chamber desired certain legislation to be brought before the House this session, t-hej'' had better behave themselves and be careful.


William Lyon Mackenzie King: There was absolutely nothing of the kind. My hon. friend is putting a false interpretation entirely upon what I said. I was trying to treat hon gentlemen opposite with a degree of courtesy. I had been asked to slate to some hon. gentlemen on the other side what legislation would be brought down and I tried to give an honest frank, straight-forward statement as far as I was able. There was no bargaining or thought of bargaining.


Robert Gardiner: I am very glad to hear the Prime Minister's explanation. If that was his intention, I shall be happy to withdraw my remarks.- If at any time I should misinterpret any member of this House and the misinterpretation is called to my attention I will be pleased to withdraw. I assure the House I do not want to do any hon. member an injustice, but I interpreted the Prime Minister's remarks in the manner in which I described them. I am glad, however, to hear his explanation. I think it will soon be breakfast time, I do not propose to take up the time of the House any longer.
I should like to say a word with regard to the amendment moved by the Conservative party. I do not propose to support that amendment, on the principle that, while they ask for lower taxation, by way of a reduction in the sales tax, I, like my hon. friend the member for West Edmonton, (Mr. Kennedy) think any reduction in taxes should be made in the tariff instead of in the sales tax. That is the reason why I cannot support that amendment. As regards the budget, I regret very much that I cannot support it. Had the government, as I stated earlier in my address, proceeded with reductions in the tariff along the lines that they did last year, I would have been only too glad to support the budget; but in view of the fact that they have stopped short in their good mission, I propose to apply the principle that I outlined before. I am going to vote for or against it on its merits, and this budget, in my judgment, having no merit, therefore I cannot support, it.


Mr. W. C. GOOD (Brant):: Mr. Speaker, I am not responsible for being compelled to speak at this hour or not at all. The Prime Minister (Mr. Mackenzie King) talks of delay and obstruction, and gently intimates to us that we ought to keep quiet. The Minister of Labour (Mr. Murdock) can speak for

three hours; the Minister of Agriculture (Mr. Motherwell) can speak for three hours-perhaps it was more

and	many
other	members	of	this	House can
speak for two, three or four hours; but now it is intimated that we must not delay or "obstruct." Well, I can assure the Prime Minister (Mr. Mackenzie King) that, speaking for myself, I have not consumed much of the time of the House this session and I do not propose on the present occasion meekly to extinguish myself. I consider I have a duty to perform, an unpleasant one I grant you, but I do not shrink from the task. I have something to say and I intend to take what time is necessary to say it. That. I think, is a sufficient apology for my participation in the debate on the present occasion.
I would not attempt to speak at this hour if I did not at least try to break new ground; I have no use for repetitions of what has been said over and over again. I therefore propose this morning to deal in the main with the topic which I shall now announce: I shall try to examine why it is that the ordinary free trade argument appeals so little to our citizens while the protectionist argument appeals so strongly to them. I think that is a study worth while; I have not heard it discussed in the House and I intend to consider it on the present occasion. However, before entering upon that examination I should like to draw the attention of the House briefly to some remarks made by the hon. member for West York (Sir Henry Drayton), the ex-Minister of Finance, on March 26. He said:
Let us see how much Canada helped the United States in the period of railway exploitation.- In the period ending in 1913, the United States enjoyed the comfortable, favourable trade world balance of $1,564,000,000 odd and Canada accounted for no less than $1,303,000,000 odd of that enormous sum. Just think of it!

out of a favourable trade balance of $4,564,462,410 Canada accounts for $1,306,950,513.
I submit that the ex-Minister of Finance ought to have left a clearer impression on the minds of hon. gentlemen in regard to the whole question of trade balances with which he dealt at such length. I am not going to clear up the confusion he left in that regard, but I shall bring to the attention of the House a document which does in a (measure clarify the matter: I refer to the second volume of the report submitted by the commission that investigated the subject of the high cost of living, which report was published in 1915. This volume was compiled or prepared by our present Dominion statistician, Mr. R. H. Coats, and I think it is a wonderful tribute to that gentleman's knowl-

The Budget-Mr. Good
edge and industry and insight. I only wish that the ex-Minister of Finance (Sir Henry Drayton) were in his seat, because I would like to direct his attention and the attention of the House to a section of this report, beginning at page 887, entitled " General Economic Conditions in Canada 1900-13." It is a fairly exhaustive examination of Canada's trade and industry during that period. I call special attention to the summary on page 906. First, we have the exports, amounting to $4,031,400,000. Then we have deductions from the exports; and I hope that hon. members who talk so glibly about favourable and unfavourable balances of trade, and 6 am. who apparently have such a lack of information on the whole question of trade, will listen to this and note the deductions which must be made in this case from the sum total of the co-called exports,
as follows:
Interest	 $1,488,000,000
Remittances to friends	 150,000,000
Tourist expenditures	 150,000,000
Emigrant expenditures	 245,000,000
Insurance payments	 117,000,000
Freight	 60,000,000
Call money outside	Canada ..	35,000,000
Total	 $2,245,000,000
Deducting that from the total exports, we have net exports, of $1,786,400,000. Now we c.ome to the imports, which we find total $5,359,700,000. And the following are the deductions that must be made from the imports:
Receipts from immigration	 5 650,000,000
Tourists in Canada	 140,000,000
Remittances to friends	 50,000,000
Insurance payments to Canada..	..	20,000,000
Total	 $ 860,000,000
Making these deductions our net imports are found to be $4,499,700,000. Now, the balance of imports over exports, which is ordinarily described as the net unfavourable balance of trade during that period is $2,713,300,000. And that represents Canada's borrowing during that time.
I have some further evidence which I should like to bring to the attention of the House, particularly to' the attention of the ex-Minister of Finance, who ought to know, and who I think does know, enough about these subjects to give the House an intelligible and accurate presentation of the case. I refer to a book which has been recently published dealing with this particular period in the history of Canada and which is entitled:
" Canada's Balance of International Indebtedness 1900-1913: An inductive Study in the Theory of International Trade," by Jacob Viner, Cambridge; Harvard University Press.
Professor Viner I understand has made an exhaustive study of this particular period in Canada's history and has written the already mentioned book on the subject.
I have, here a review by our Dominion Statistician of this book, and I should like to quote a few sentences from this review in order to draw the attention of hon. members to what I think is a very desirable attitude towards problems of this sort, an attitude which I regret to say I have seen very little of in this House.


Mr. McBRIDE:: Mr. Speaker, I would like a ruling on this point. Surely it is against the rules of the House for an hon. member to stand up and read speeches.


George Newcombe Gordon: I understood the hon. member to say he was giving a citation or quotation:


Some hon. MEMBERS:: No.


An hon. MEMBER:: He is reading his speech.


George Newcombe Gordon: If the hon. member is reading his speech, he has no right to do so.


William Charles Good: I think the hon. member for Cariboo (Mr. McBride) and all other hon. members of the House understand that I am making a quotation from a book review. I suggest that it would expedite the proceedings if there was a minimum of interruption.


Mr. PARENT:: I suggest that at this hour of the morning the hon. member have leave to put the whole report in Hansard without reading it.


William Charles Good: If we had the facility which members of the House of Representatives have in the United States we should be able to save the time, of the House and yet place ourselves on record. I understand, however, that that is not permitted here, so I proceed as follows:
In the final analysis Professor Viner places the importations of capital into Canada during the period 1900-1913 at 2,506 millions, as against 2,713 millions of the earlier estimate-
Mr. Coats is here referring to an estimate which he himself made in the volume that I have already mentioned.
-and his statement is probably as accurate as it can be brought without an excessive amount of further research.


Georges Parent: What page is the hon. member quoting from?


William Charles Good: Page 537 of the quarterly publication of the American Statistical Association, December, 1924.
The Budget-Mr. Good


Georges Parent: How many more pages have you to read?


William Charles Good: I am going to proceed, Mr. Speaker:
In part II, Professor Viner treats of the adjustment of the general price level and of the currency and banking systems of Canada to the above-mentioned heavy importations of capitail. In other words, he shows how the capital represented in the adverse trade balance entered Canada in the form of goods. It is in this section that he has especially broken new ground, and if his treatment is still short of finality, he has organized materials and outlined a method that will be permanently valuable. His chapters on Canadian exchange and gold movements and on the operations of the Canadian banks in the adjustment of the trade balance are a clear exposition of a process that is popularly but little understood even in Canada, especially in its theoretic aspect. The gold movement into and from Canada is a matter wholly of banking and currency, the cash reserves of the banks and the government reserves against Dominion notes being its leading index.
Now, what I wanted to do in this connection was to direct the attention of the ex-Minister of Finance, who unfortunately is not here, and the attention of members of the House, to what I regard as the proper way of approaching the discussion of problems of this sort. In this connection I should like to again express my appreciation of the valuable services of our Dominion Statistician. It seems to me there is very little disposition in several quarters to make use of the experts we have or to secure experts in the departments where none are now available; and I shall refer to one particular matter in this connection shortly.
In concluding my reference to this question of international trade, and having specially in mind the attitude of and the arguments advanced by the ex-Minister of Finance, I should like to quote the following from Sir George Paish which I find in an extract from the Western Producer, Saskatoon, of April 2, of this year:-
"People have not yet realized,"said Sir George Paish, the noted financier, speaking in Winnipeg lately, "that the object of selling is not to get money or gold which are valueless, except as a medium of exchange with which to buy goods. We sell in order to buy, and for no other reason.
"Canada, along with the other nations of the world, must realize that she cannot sell the agricultural and dairy products, which she is so well equipped to produce, if she is not prepared to buy the goods of other nations. If she does not accept these goods, she must do what the United States has done, and in doing has almost ruined the world That is, to refuse to buy the goods of other nations, accepting only gold in payment. The United States has that gold, and now finds that it can not use it."


Edward Mortimer Macdonald: Mr. Speaker, I rise to a point of order. Mly hon. friend is reading material that he has already put on record in the committee on Banking and Commerce. I can hardly understand why he

should do that at this hour of the morning unless it is purely for obstruction purposes.


William Charles Good: Mr. Speaker, I am astonished at the statement of the Minister of National Defence (Mr. Macdonald, Pictou). It is absolutely erroneous. I have not referred to or read any of these extracts in any committee of this House either this year or any other year, and I am not obstructing the business of the House. I know the minister is indifferent to the argument I am presenting, but I am presenting it not to him but to the people of Canada, and I exercise my right in so doing.


Edward Mortimer Macdonald: Does my hon. friend expect the House to listen to him at this hour?


Hewitt Bostock: Order. I do not see that the hon. member who has the floor is obstructing the debate, and I would point out that no hon. member has the right to state that another hon. member is obstructing the business of the House. I think the hon. member for Brant (Mr. Good) is proceeding on right lines.
Though it is early in the morning, the hon. gentleman has had no chance to address the House before. He is entitled to address the House, provided he does it regularly.


Edward Mortimer Macdonald: He has had five weeks' chanice.


William Charles Good: I would like to know who is obstructing just now. Mr. Speaker, I think that the problems confronting the Canadian people at the present time are very serious indeed, and after being here four years I must 'confess to a sense of deep disappointment at the method of approach to our serious problems. I want to say a word or two in that connection before I deal with the main topic of my remarks.
I am tempted, Mr. Speaker, to refer to an incident that occurred in my own experience when I was younger than I am now, 'and which I think illustrates the situation very well. I beg to assure you that the incident I shall narrate is absolutely authentic and accurate. There was in our neighbourhood when I was a young man an old man who used to do odd jobs around the countryside, and he frequently worked for my father, particularly in the fall of the year. I remember on one occasion we had a cow in the stable that was ailing somewhat, and I took the old man in to seek his advice. I thought perhaps he might give some suggestion as to what ought to be done for the cow. As soon as he had seen the animal he Stated with the utmost assurance that he knew the

The Budget-Mr. Good
disease very well. It was " hollow horn and wolf in the tail." I am not inventing the story; it is an actual fact. He said, "I can cure it. Get me some pepper and salt." I got him some pepper and salt, and he mixed them together, and then taking out his jack-nife cut a slit in the skin of the tail, and opening the skin up a little inserted the pepper and salt, and then closed up the wound. He told me with the utmost assurance and with the utmost confidence and sincerity that that was the cure for that particular disease, and that I need not worry about the outcome. Well now, Mr. Speaker,
I must confess to the feeling that we are dealing with an ailing Canadian economic life pretty much as the old man dealt with that cow, and I suggest the propriety of altering our attitude of mind and our methods towards a number of these problems that are vexing and worrying us, and which, unless we solve them, are going to bring us to catastrophe. In particular, I want to say that I deplore the party spirit and party politics 'as 'I see them exhibited in this House. So	far	as	the	consumptionof time goes,	so	far	as futilityand aimless effort goes, I attribute a great deal to what may disgust the House and may disgust the country to the prevalence of partisanship. I am told that the House now is better than	it used to	be;	I	do not knowas to that but	I do	think	and	I	want to submit now that if we could cast our party affiliations to the winds and get down to study questions on their merits and vote on them on their merits, regardless of who makes the suggestions, regardless of what is the attitude of this party or of that, we would be nearer a solution of our difficulties than we are at the present time. Here we have a party in power,-so-called " in power "-facing an election in the near future, and a party in opposition facing an election. So far as I am concerned I confess to a disbelief in the whole theory of partisan government. That is my growing conviction from observation in this House. I may be all wrong. I am not going into the question of constitutional methods now. I may deal with that question in the future, but not now; but I do think there is a vast amount of useless party warfare- though perhaps interesting, entertaining- across the floor of this House, because we have one party in power and one in opposition, and the opposition wants to get into office, and the government wants to stay in. Now I submit in all seriousness, that there is the strongest possible temptation to subordinate the national welfare to the welfare of parties and of individuals under this system. I need
only point to the applause which greets a clever attack, daring thrusts, shrewd defence. It is easy enough to arouse the fighting spirit; everybody knows that. It is often inevitable. But I submit, it is rarely helpful in connection with matters of this sort. We develop a good deal of hysteria in connection with our public life, and particularly in connection with our party discussions, and I want to refer to a sample of it. I presume the members on the government side will applaud this, because it has to do with the official opposition. Here is a statement which was made by the right hon. leader of the opposition-
I wish he were here at the moment-published in the campaign literature of the Conservative party during the campaign of 1921:
If this Government should be defeated-and whatever you think to-day, you will not have much fear of its d.feat if you wait three, four, or six or ten months from now-if this Government should go down,
I say here that the party that would be in office would be dominated by the men who, inspired by class consciousness, driven by agitation, led astray by distance from the real facts, have swallowed this principle of free trade. They would be in the ascendancy, along with those who are ready to take hold of free trade, or Sovietism, or semi-Sovietism, or Redism, or anything else, in order to hurl down any Government in pow'er. That is the class who would dominate the Administration if the present Government were defeated, and every single element of that class is a wrecker and a puller-down, and could never do anything to take us forward or upward.
If the right hon. gentleman were here, I would ask him now if he is not 'ashamed of making a statement of that sort in a public campaign. I cite it now as a sample of the hysteria, the folly, to which we are led in our party warfare, and as one of the reasons why I dislike and disapprove of the whole idea that seems to underlie what many people pride themselves on describing as the British constitutional method of responsible government.
Our problems are not to be solved by these methods, and I am afraid the seriousness of the situation will soon begin to force upon us a more co-operative spirit. There must be more dispassionate study, more open-mindedness, greater absence of partisanship. The problems awaiting solution are not to be solved by slamming one another, but by grappling with error, overcoming ignorance and striving to know the truth. There is a saying in the Good Book "Ye shall know the truth and the truth shall make you free." What is Liberalism if it is not an exaltation of freedom? And freedon of the proper kind certainly depends upon liberation from error and ignorance. I believe in Liberalism and I call myself a Liberal, but that does not mean that I necessarily adhere to or vote for the so-called Liberal party which is often illiberal in its attitude towards public questions.
The Budget-Mr. Good

I have already referred to the very admirable study of the question of international trade in this volume under my hand and I have suggested that we ought to make a greater use of experts in the study of our economic problems. There is a disposition to scoff at academic persons. I take it-if I may refer again to the story which I told a few minutes ago-that- the old man mentioned probably prided himself that he had never read anything. He would be ashamed, I fancy, to be caught reading a book. He was a "practical" man, a very "practical" man-a man who prided himself on his practicalness-and I find in this House, I think, if I may make a personal reference without giving offence, that the Acting Minister of Finance prides himself on being a "practical" man. The old man who doctored the cow had some experience. He was an old man and had lived a long time, while I was a young man; therefore he ought to have known more than I did. I do not like to find a minister of the crown, making reflections upon people who have given a lifetime of study to matters which perhaps the hon. minister has not had time to study; I do not blame him for not understanding some of these things. I have in mind a certain statement made by the Acting Minister of Finance not so long ago, and I submit to the House it is an attitude of mind that no minister of the crown ought to find satisfaction in expressing. As a matter of fact the academic man, while he may be wrong, has a pretty good chance of being right. He is removed from the warping influence of financial interest as a rule far more than most of us, far more than politicians, and far more than business men. Why should we scoff at economists as theorists? I will read the following from "The Mind in the Making," a book by Professor James Harvey Robinson of New York:-
On the 28! h of October, 1831, three hundred and .fifty years after Galileo had noticed the isochronous vibrations of the lamps, creative thought and its currency had so far increased that Faraday was wondering what would happen if he mounted a disk of copper between the poles of a horseshoe magnet.
This is a reference to what led Galileo to study the solar S3rstem.


An hon. MEMBER:: Why not read the
whole library.


Hewitt Bostock: I would ask hon. gentlemen not to interrupt the hon. member. He is a fair debater and he is entitled to a fair hearing from the House.


William Charles Good: Let me continue reading:
As the disk revolved an electric current was produced. This would doubtless have seemed the idlest kind of an experiment to the staunch businessmen of the time-

Mark 3'ou, Mr. Speaker and hon. gentlemen, this is applicable to the situation in this House.
This would doubtless have seemed the idlest kind of an experiment to the staunch businessmen of the time, who, it happened, were just then denouncing the child-labour bills in their anxiety to avail themselves to the full of the results of earlier idle curiosity. But should the dynamos and motors which have come into being as the outcome of Faraday's experiment be stopped this evening, the business man of to-day, agitated over labour troubles, might, as he trudged home past lines of " dead " cars, through dark streets to an unlighted house, engage in a little creative thought of his own and perceive that he and hia labourers would have no modern factories and mines to quarrel about had it not been for the strange practical effects of the idle curiosity of scientists, inventors, and engineers.


An hon. MEMBER:: That is interesting.


William Charles Good: Yes, and if my hon. friend will take it to heart it ought to be more than interesting, it ought to be edifying. Now, Mr. Speaker, I submitted on a previous occasion in this House that our Department of Finance, one of the most important departments in the public service, one that is concerned with the whole problem of taxation and the problem of securing and expending revenue-particularly securing revenue-having charge of all the financial operations of this government, is without a single expert, without a single man who has anything but a mere routine knowledge of this whole question. The Acting Minister of Finance is too busy, he has not had the opportunity of acquiring the knowledge. I am not blaming him for his admitted ignorance on many of these matters that lie ought to know about, or somebody in the department ought to know about.


Herbert Meredith Marler: May I interrupt? Is my hon. friend taking the Acting Minister of Finance to task for ignorance of financial matters? Does he say the officers of the Department of Finance have no knowledge of financial affairs? It is rather a broad statement.


William Charles Good: I am quoting the remarks of the Acting Minister of Finance (Mr. Robb) in a previous debate. The hon. member can refer to it if he likes.


Herbert Meredith Marler: What debate is it?


William Charles Good: It is the debate on the motion of the hon. member for Centre, Winnipeg (Mr. Woodsworth.) Last year I had some hope- and I refer now to the question of the proposed tariff board-that the government might have in contemplation the creation of some commission or committee to study not tariff schedules, which are superficial things, but the

The Budget-Mr. Good
whole question of the incidence of taxation. That is a matter I dealt with at some length myself in my address on the budget last year.
I have not heard anybody refer to it, either in commendation or otherwise, but I was hoping last year that we might see the inauguration of some sensible, method of approach to these problems, and that our partisan discussion in this House year after year, for years and years, consuming days and weeks and months of time might be avoided. But I am charged now with obstruction. I say that these partisan methods we have been following have' the effect of obstructing the business of the House and the business of the country.
I refer to this particular matter, because I was hoping-and I think it was in the mind of the Prime Minister at all events-that we might get something really worth while out of the study of methods of taxation. Apparently that has gone to the wrind, and we have now a proposal to create a board which, so far as I can make out, will have nothing to do but to study tariff schedules and their effects. I submit this-and I do it very briefly as I did last year-that the more important question is to decide upon right principles of taxation. What is a just system of taxation and what is an unjust system of taxation? That is a very important question. We do not study it here. To some extent, perhaps, we discuss it in this House, but here is a proposal brought down last year and again brought down this year by the government for the creation of a tariff board. If I felt that that board was going to be properly constituted, and would devote itself not merely to the study of tariff schedules but rather to the principles of taxation and the kind of taxation that would be best from the standpoint of justice and economy, I would support the proposal warmly. If any such proposal can be brought down to the House I will support it, but I am not going to support the proposal to create a board merely to look over tariff schedules and make recommendations or give advice to the department in that connection. I tell you, Mr. Speaker, that this government and other governments unfortunately do not consult men who are relatively free from influence by special interests. Whom do they consult, or who comes to make representations to the government in connection with tariff matters? Special interests-those who are benefited I think all this must be changed. I had more to say on this point but I am going to cut some of my remarks short, which I know will be appreciated by hon. members and give some satisfaction to those present.


Edward Mortimer Macdonald: Does my hon. friend think the government should consult him in regard to these matters before they are brought down?


William Charles Good: If I may answer the question of the Minister of National Defence, I say that I think I have given more study, at least more independent study uninfluenced by reason of any financial interests, than many of the business men who come here to make requests of the government.


Edward Mortimer Macdonald: My hon. friend has read a lot to tell us what the books say; but he does not give us his own opinion.


William Charles Good: I have my opinions and have expressed them frankly on the floor of the House, and intend to do so as long as I am here.
The next matter I want to present is a summary, or a concise statement, of the protectionist philosophy. I remarked at the outset that I proposed to deal mainly with the question as to why the free trade argument had gained so little support and why the protection argument had gained so much suppoi* and I think that ought to be of some interest to my Conservative friends. I am going to make this statement as brief as I can, and I have therefore written out my remarks in the main, so that I can be concise. I am going to state what I regard as the essential philosophy of the free trade versus protection controversy.
I think in the first place we should earnestly answer the question, should legislation be in the interests of the people generally or be in the interests of the minority of the people? If in the interests of the people generally, which is best for society, abundance or scarcity?
I am quite prepared from the standpoint of theology, morals and so on, to say tha., hardship and misery and pain and troubles may sometimes be a wholesome chastener, but I submit on the whole we agree-and there will be very little dispute in regard to my statement, that the aim of a sound national policy should be to secure abundance rather than scarcity: that is to say, a maximum of useful commodities, and services. Do I find anybody disputing that statement? And yet is not the policy of scarcity widely preached? We have our Conservative friends constantly declaiming against dumping, which gives us cheap goods. They talk about inundating this country with the products of cheap labour. Abundance is decried. There is talk about over-production on every hand. On every hand we find a direct or indirect criticism of
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the philosophy of abundance. Why this enigma?
Consider the indi%ddual man in modem society. He grows richer in proportion to the return for his labours, this depending largely on the price he can get for his services or the product of his labours.
And on what does price depend? Very largely upon scarcity. Therefore we conclude that in the case of an individual producer, scarcity enriches him, provided of course that this scarcity does not equally affect his own labour products. Applying the same reasoning successively to all producers, we construct the theory of soarcity and proceed to apply it by raising prices artificially through tariffs and so forth.
We may argue in like fashion as to abundance. When any product is plentiful, it sells at a lower price, and therefore the producer gets less. If all producers are in the same situation, they all lose. Therefore, it is abundance that ruins society.
Now, what is wrong with the argument? Simply this:	It ignores the fact that man
is consumer as well as producer, and the foregoing reasoning considers him only in the latter role.
As a producer, a man may become richer by reason of scarcity. He may take advantage of other people's needs. But as a consumer he benefits by abundance, because then he buys things cheaper. By extending this reasoning to all consumers, we arrive at the *theory of plenty.
If, therefore, we consider the selfish interest of men as producers, we arrive at one conclusion:	whereas,
if we consider their interests as consumers, we arrive at the opposite conclusion. And this is natural, because as sellers we have an interest in dearness, and therefore in scarcity. But, as buyers, our interest is in cheapness and abundance.
Now, on which theory, that of abundance or that of scarcity, should public policy be based? I should like sincerely to submit this to my Conservative friends. The question is not an idle or a fantastic one. It is a burning one which confronts or ought to confront every finance minister when he is preparing his budget proposals. Nor can it be airily dismissed or lightly answered. Let us examine this matter and try to answer the question.
If a man consumed all he produced; if he did not exchange the products of his labours for the products of the labour of others, there could be only one answer: Abundance would be advantageous. It would be perceived at once that labour is a means, not

an end, and that anything that would save labour would conduce to progress and prosperity. Take the case of any farmer working for himself on his own farm. What an absurd thing it would be for him to argue in favour of or follow any policy that would lead to scarcity. Every labour saving device he could apply, anything by which he could economize, would certainly be to his advantage. But, with the division of labour, with exchange, with diversification of employment, the situation becomes complicated. In relation to any particular commodity, two interests are created and these are directly opposed to each other.
Take the case of any producer. His im-me'diate selfish interest lies in 'having the fewest possible producers in his line, and the greatest possible number of consumers. Supply limited, demand great, and up goes the price. But the immediate interest of the consumer is that supply may be increased relatively to demand, so that prices may fall. Now, as producers, our desires tempt us, and our opportunities enable us, to be anti-social. For example, as farmers we may be interested in and financially benefited by crop failures as long as they do not affect our crops. We may be financially benefited by war as long as it does not affect our farms. We may profit by the sinking of vessels, as occurred during the war, so long as our crops are not involved. If we are carpenters, masons or builders, we may be benefited financially from devastating fires or earthquakes. As lawyers we may be benefited financially by the growth of quarrels and litigation. I quote a sentence from the old French writer, Montaigne, in this connection. He said:
The shopkeeper thrives only by the irregularities of youth; the farmer by the high price of corn; the architect by the destruction of houses, the officers of justice by lawsuits and quarrels.
Producers are, of course, social in so far as they are efficient workers. For example, if a farmer grows crops above the average because of his superior intelligence or industry, and thereby receives a greater reward for his labour, his personal welfare coincides with that of society generally; but in so far as he gains by price enhancement, he does so at others' expense, and is therefore in this regard anti-social. The fact is that, as producers, some of our activities are social and some anti-social.
But when we come to consider the immediate interest of the consumer, we find that it is in perfect harmony with the general interest. As consumers, our interests are practically identical. We all want food, clothing,

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housing, and many other necessaries and comforts. Though we may be divided into a hundred different occupations as producers, we all spend what money we earn through these occupations pretty much in the same way. As consumers, we desire to see the markets wtell supplied. We welcome good crops and labour-saving machinery. We rejoice in rapid and easy means of transportation and communication. We may indeed as consumers push our desires to an absurd length, without having them become antagonistic to the public welfare. Were we able to obtain necessaries and comforts of life as freely and as easily as the air we breathe, there would be nothing therein incompatible with the general interest, since all consumers would be equally benefited.
Public policy ought therefore to be based on the interests of people as consumers, rather than upon their interests as producers.
The Prime Minister went up and down this country not long ago, I think in 1921, claiming that he was going to protect the consumers. I submit to him and to the government, and particularly to the Conservative party that the interest of the consumer should be the basis of public policy. May I state again?-Public policy ought to be based on the interests of people as consumers, rather than upon their interests as producers. Only thus can it serve the general welfare and conform to the motto: "The greatest good to the greatest number." The protectionist, therefore, lands in this dilemma:	Protective tariffs
produce scarcity, or they do not. If they do, then general injury is inflicted. If they do not, then supply is not restricted and the producer does not gain. They are either harmful or useless. I am prepared to admit that there are conditions-and I shall refer to them later-under which this argument does not apply, or applies only to a limited extent. I had intended to read to the House in this connection an extract from a book which I referred to last session entitled Fallacies of Protection, by Frederic Bastiat, a Frenchman who wrote in the forties of last century.


An hon. MEMBER:: Put it in Hansard.


William Charles Good: I should be pleased if I could obtain the permission of the House to put on Hansard a certain quotation from this book, but I presume that would be out of order. I quoted part of it last year and I intend to quote the whole of it this year.


An hon. MEMBER:: Not the whole book.


William Charles Good: The whole of this particular section. I should like to have this printed in 174
Hansard, but I cannot insist upon it. It may be out of order. I shall be compelled to read it or to drop it.


Some hon. MEMBERS:: Read it.


Some hon. MEMBERS:: Drop it.


William Charles Good: I get requests from one side to read it and from the other side, to drop it. I am going to read it as it is early yet.


Mr. LOGAN:: Put it on Hansard.


William Charles Good: I would if I could.


Hance James Logan: Nobody is objecting.


William Charles Good: May I put it on Hansard without reading it?


Hewitt Bostock: By unanimous consent.


Thomas George McBride: Do I understand that the hon. member is going to put the whole book on Hansard?


William Charles Good: Just one little section as my hon. friend can see.


Hewitt Bostock: I understand that, by unanimous consent, the hon. gentleman can place this extract on Hansard.


William Charles Good: I am desirous of saving all the time of the House that I can without destroying the force of my argument. The extract is as follows:
Chapter VII.-Petition of the Manufacturers of Candles, Wax-Lights, Lamps, Candlesticks, Street Lamps, Snuffers, Extinguishers, and of the Producers of Oil, Tallow, Resin, Alcohol, and, Generally, of Everything Connected with Lighting.
To Messieurs the Members of the Chamber of Deputies.
Gentlemen,-You are on the right road. You reject abstract theories, and have little consideration for cheapness and plenty. Your chief care is the interest of the producer. You desire to protect him from foreign competition, and reserve the national market for national industry.
We are about to offer you an admirable opportunity of applying your-what shall we call it?-your theory? No; nothing is more deceptive than theory-your doctrine? your system? your principle? But you dislike doctrines, you abhor systems, and as for principles you deny that there are any in social economy. We shall say, then, your practice-your practice without theory and without principle.
We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself our trade leaves us-all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is no other than the sun, wages war to the knife against us, and we suspect that he has been raised up by perfidious Albion (good policy as times go); inasmuch as he displays towards that haughty island a circumspection with which he dispenses in our case.
What we pray for is, that it may please you to pass a law ordering the shutting up of all windows, skylights, dormer-windows, outside and inside shutters,

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curtains, blinds, bull's-eyes; in a word, of all openings, holes, chinks, clefts,	and fissures, by or
dirough which the light of the sun has been in ise to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves we nave accommodated our country-a country which, in gratitude, ought not to abandon us now to a strife so unequal.
We trust, gentlemen, that you will not regard this our request as a satire, or refuse it without at least previously hearing the reasons which we have to urge in its support.
And, first, if you shut up as much as possible all access to natural light, and create a demand for artificial light, -which of our French manufactures will not be encouraged by it?
If more tallow is consumed, then there must be more oxen and sheep; and, consequently, we shall behold the multiplication of meadows, meat, wood, hides, and, above all, manure, which is the basis and foundation of all agricultural wealth.
If more oil is consumed, then we shall have an extended cultivation of the poppy, of the olive, and of rape. These rich and exhausting plants will come at the right time to enable us to avail ourselves of the increased fertility which the rearing of additional cattle will impart to our lands.
Our heaths will be covered with resinous trees. Numerous swarms of bees will, on the mountains, gather perfumed treasures, now wasting their fragrance on the desert air, like the flowers from which they emanate. No branch of agriculture but will then exhibit a cheering development.
The same remark applies to navigation. Thousands of vessels will proceed to the whale fishery; and in a short time we shall possess a navy capable of maintaining the honour of France, and gratifying the patriotic aspirations of your petitioners, the undersigned candle-makers and others.	*
But what shall we say of the manufacture of articles de Paris? Henceforth you will behold gildings, bronzes, crystals, in candlesticks, in lamps, in lustres, in candelabra, shining forth, in spacious ware-rooms, compared with which those of the present day can be regarded but as mere shops.
No poor resinier from his heights on the seacoast, no coal miner from the depth of his sable gallery, but will rejoice in higher wages and increased prosperity.
Only have the goodness to reflect gentlemen, and you will be convinced that there is, perhaps, no Frenchman, from the wealthy coalmaster to the humblest vendor of lucifer matches, whose lot will not be ameliorated by the success of this our petition.
We foresee your objections, gentlemen, but we know that you can oppose to us none but such as you have picked up from the effete works of the partisans of free trade. We defy you to utter a single word against us which will not instantly rebound against yourselves and your entire policy.
You will tell us that, if we gain by the protection which we seek, the country will lose by it, because the consumer must bear the loss.
We answer:
You have ceased to have any right to invoke the interest of the consumer; for, whenever his interest is found opposed to that of the producer, you sacrifice the former. You have done so for the purpose of encouraging labour and increasing employment. For the same reason you should do so again.
You have yourselves obviated this objection. When you are told that the consumer is interested in the free importation of iron, coal, com, textile fabrics- yes, you reply, but the producer is interested in their exclusion. Well, be it so; if consumers are interested in the free admission of natural light, the produce*s

of artificial light are equally interested in its prohibition.
But, again, you may say that the producer and consumer are identical. If the manufacturer gain by protection, he will make the agriculturist also a gainer; and if agriculture prosper, it will open a vent to manufacturers. Very well; if you confer upon us the monopoly of furnishing light during the day, first of all we shall purchase quantities of tallow, coals, oils, resinous substances, wax, alcohol-besides silver, iron, bronze, crystal-to cany on our manufactures; and then we, and those wlio furnish us with such commodities, having become rich will consume a great deal, and impart prosperity to all the other branches of our national industry.
If you urge that the light of the sun is a gratuitous gift of nature, and that to reject such gifts is to reject wealth itself under pretence of encouraging the means of acquiring it, we would caution you against giving a death-blow to your own policy. Remember that hitherto you have always repelled foreign products, because they approximate more nearly than home products to the character of gratuitous gifts. To comply with the exactions of other monopolists, you have only half a motive; and to repulse us simply because we stand on a stronger vantage-ground than others would be to adopt the equation + X + = -'* in other words, it would be to heap absurdity upon absurdity.
Nature and human labour co-operate in various proportions (depending on countries and climates) in the production of commodities. The part which nature executes is always gratuitous; it is the part executed by human labour which constitutes value and is paid for.
If a Lisbon orange sells for half the price of a Paris orange, it is because natural, and consequently gratuitous, heat does for the one what artificial, and therefore expensive, heat must do for the other.
When an orange comes to us from Portugal, we may conclude that it is furnished in part gratuitously, in part for an onerous consideration; in other words, it comes to us at half-price as compared with those of Paris.
Now, it is precisely the gratuitous half (pardon the word) which we contend should be excluded. You say, How can national labour sustain competition with foreign labour, when the former has all the work to do, and the latter only does one-half, the sun supplying the remainder? But if this half, being gratuitous, determines you to exclude competition, how should the whole, being gratuitous, induce you to admit competition? If you were consistent, you would, while excluding as hurtful to native industry what is half gratuitous, exclude a fortiori and with double zeal, that which is altogether gratuitous.
Once more, when products such as coal, iron, corn, or textile fabrics are sent us from abroad, and we can acquire them with less labour than if we made them ourselves,	the	difference is	a	free gift conferred upon us.	The	gift is more	or	less considerablein proportion as the difference is more or less great. It amounts to a quarter, a half, or three-quarters of the value of the product, when the foreigner only asks us for three-fourths, a half, or a quarter of the price we should otherwise pay. It is as perfect and complete as it can be, when the donor (like the sun in furnishing us with light) asks us for nothing. The question, and we ask it formally, is this: Do you desire for our country	the benefit	of	gratuitous consumption, or the pretended advantages of onerous production ? Make	your	choice, but	be	logical; for as
long as you exclude, as you do, coal, iron, corn, foreign fabrics, in proportion as their price approximates to zero, wrhat inconsistency it would be to admit the light of the sun, the price of which is already at zero during the entire day!

The Budget-Mr. Good
I have also a very short quotation dealing with the same subject that I should like to quote from a very interesting book by a Belgian named Henri Lambert, who was quite conspicuous during the war. The title of the book is Pax Economica. It is a study of the relationship between international trade and international peace, and I think that is an important subject. I quote the following short extract from this book; page 37:
To deny the benefits of international exchange-and consequently of free exchange-is, in fact, to deny the advantages of division of labour and the increase in productiveness resulting therefrom. It is, therefore, to deny that which is evident. A country which determines to be self-supporting must resign itself to an inferior productivity and standard of wealth. If such a country continues to prosper, it will be by reason of natural advantages, because of high intelligence and labour energy of its inhabitants; because of interior free exchange, and despite its efforts to be self-sustaining.
Now I pass on to the next section of my argument. If the protectionist philosophy and argument are so completely discredited, how comes it that protection has had and continues to have such a strong hold on the world? That is an interesting question and one of paramount importance and I propose to submit for the consideration of hon. members some reasons why, despite the logical discrediting of the protective philosophy, it yet has such a hold upon people generally. The motion my right hon. friend the leader of the opposition (Mr. Meighen) has on the order paper declares what is an obvious fact, that the protective system is widely extended and is very popular. I do not deny that. I want to examine why, in the face of so many good reasons against it, it is so popular. The causes of this condition I shall enumerate. In the first place, the benefits of protection are localized and concentrated while the losses are widely diffused. On this point I desire to read one paragraph from Henry George's book Protection or Free Trade which I commend to the House:
Those who are specially interested in protective tariffs find it easy to believe that protection is of general benefit. The directness of their interest makes them active in spreading their views, and having control of large means-for the protected industries are those in which large capitals are engaged-and being ready on occasion, as a matter of business, to spend money in propagating their doctrines, they exert great influence upon the organs of public opinion. Free trade, on the contrary, offers no special advantage to any particular interest, and in the present state of social morality benefits or injuries which men share in common with their fellows are not felt so intensely as those which affect them specially.
1 icammteaid that to my Conservative friends as a very cogent and clear statement of an obvious fact. Let me give an example to illustrate the point, further. Suppose we consider the tariff on boots and shoes, in which the 174J
Minister of Justice (Mr. Lapointe) is so much interested, or at least in which he is stated to be so interested. Suppose that through a tariff on these articles a certain manufacturer stands to gain $25,000 a year; and suppose that by virtue of the same tariff the consumers of boots and shoes stand to lose $50,000 a year. Divided among 200,000 consumers that would represent a loss of 25 cents each. Now, the individual consumer would likely say that this was a trifle about which he would not worry. The consumers are unorganized and a loss of 25 cents each probably would not occasion any great concern among them. But 7 a.m. $25,000 a year to one man is a considerable sum and he would naturally fight for it; he would contribute to party campaign funds and so get his quid pro quo. That is an illustration of the truth that has been so well stated by Henry George in the extract I have read.
I should like also to submit a very interesting editorial from the Montreal Witness which appeared a few years ago, during the 1921 election campaign, I think.
WHERE IS THE CONSUMER?
It is related that once, in the long departed golden age of the world, it was agreed among mankind that they should all shout at the same moment. It was thought that thus the sound might reach the moon, and provoke some response from the inhabitants of that sphere. The time for the universal shout, arrived, the moment when the tremendous clamor should burst forth. What happened? Nothing! A woman in Norway and a boy in Spain were the only two who opened their mouths. Ah the rest were listening.
Something of this kind has overtaken the consuming multitude in Canada as regards the sittings of the Tariff Commission. The manufacturers are there. They sit in a row outside the rail-lumber, cloth, boots, pickles, glass, reapers, cement-waiting their turn. . As one sits down the next jumps to his feet. But where are the millions whose daily toil is burdened to provide the prosperity these gentlemen cherish so devoutly?
Can no labourer be pried loose from his spade for an hour or so to tell the commission that these well-fed producers are all riding on his shoulders? His hat, his boots, his braces, his socks, his overalls, the spade he wields, the material and furniture of his narrow apartment, are just so many pipe-lines from his lean purse to their fat pocket books. He cannot enter a store but they accompany him. No purchase of his is so small but they take part of the money he lays down. And they attend the session of the Tariff Commission to complain that if the labourer did not support them they would starve to death.
Alas, the consumer is so numerous that he is anonymous. Unorganized, scattered, hard-worked, with no funds wherewith to buy legal brains and literary skill, he perseveres at his digging. And so the country is delivered from the havoc and devastation of a lowered tariff and the gentlemen manufacturers are saved from starving to death.
Let me. now submit again this consideration, that public policies on tariff matters should be based on the interests of consumers and not on the interests of producers; that is the only basis on which we can reconcile the interests of all the people as citizens.
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My second reason is this: that the protectionist appeal is directed to local or personal selfish interests. This to some extent overlaps on the preceding reason, but I should like to direct the attention of the House in that connection to the obvious fact that very often producers get an exaggerated notion of the benefits of protection. For instance, it is not the total nominal protection which ought to interest any producer, from his own selfish point of view; it is the net protection. Indeed the ex-Minister of Finance (Sir Henry Drayton) in his address some time ago pointed out to the House that certain brass manufacturers had a protection of 10 per cent while they had to pay an extra price, owing to a tariff of 15 per cent on their raw materials, and he justly claimed that their net protection had vanished. Our protectionist friends are going to go around the country making campaign promises of this, that and the other thing to each individual community. The appeal will be an appeal to the selfish interests of the particular community or industry, and they are going to forget or ignore the fact, as their listeners will forget or ignore the fact, that protection given in one locality will nullify the protection given in another. I seriously commend that to the consideration of my hon. friends. If I take any part in the campaign I shall call the attention of the electors to the fallacy of that argument, and I can point to the ex-Minister of Finance himself as elucidating that principle, in his address. Take it in connection with the manufacture of tin plate and of tin cans, a very important industry in this country in connection with fruit growing. If my Conservative friends are going to offer protection to the manufacturer of tin cans, say, to the extent of 30 per cent, and the same to the manufacturer of tin plate, what will happen to the first offer? It will be pretty well in the nature of a gold brick, I take it.
We have heard for many years that famous phrase, " Adequate protection to all Canadian industries." One of the first political meetings I attended was addressed by Sir Robert Borden, and that was his stock phrase, his catchword on that occasion. It is a very plausible, a very attractive slogan, but what is there in it when you come to analyze it coldly and dispassionately? What would it really be like if we had "adequate protection " for all Canadian industry, if the farmers were protected from exploitation by the manufacturers just as much as the manufacturers were protected from exploitation by other manufacturers either inside or outside the country? What benefit would " adequate protection" confer, if it were possible, which it is not? Would it be worth while? I do

not see that it would, or that it -would confer any benefit upon any industry. I have had in my mind for many years this picture of " adequate protection to all Canadian industry ": I picture a ring of snakes each swallowing the other by the tail at the same rate. We must postulate that each snake starts at the tail of the one in front and swallows at the same rate so that none has any advantage over the other. What is going to happen? Will hon. members use their imagination? Then they will see a stoppage in the process at some time or other. That is just about what adequate protection to all Canadian industry would be like if it were possible. But it is not possible. I appeal to my Conservative friends, can they protect local industry'; can they protect the farmer, the wheat grower when he exports the great bulk of his products? Can they protect half the industries of Canada? Let them start out to apply this plausible catchword, this attractive policy, to Canadian industry, and what is going to be the result? Simply that the fellows that can pull the wires best are going to get the plums. The leader of the opposition when he comes to debate his motion is going to claim that he can protect the farmer, can protect everybody; but I say he cannot do it, and if he could do it, it would be useless to all concerned.
Now, my third reason is as follows: Protection develops into economic militarism. I want to submit to the House in that connection a concise expression of opinion from an English economist, J. A. Hobson, in his book, Democracy After the War. I quote:
The explanation lies in the opposition between the interests of certain classes within each nation and the welfare of the nation as a whole, and in the ability of these classes to impose their class interests upon the statecraft of their country. Protection is a bad policy for a nation. It diminishes its total output of wealth, distributes it unfairly, imposes a secret, onerous and wasteful method of taxation, breeds political corruption. establishes monopolies and provokes illwill and quarrels with other nations. But it is a good policy tor capitalists in certain well organized industries, who, by their political pressure can frame a tariff that enables them to raise their prices and increase their profits at the expense of the weaker industries, and the consuming public. A part of the illicit profits which it yields can be applied to maintaining and enforcing the political pull and to spreading propaganda representing protection as a sound national and imperial policy. The ill-will which tariffs beget in surrounding nations and the reprisals they evoke go to feet the delusion that trade is fundamentally a form of competition, not of co-operation, and that nations are hostile competitors. The diplomatic and sometimes the military conflicts which ensue from tariff wars confirm this delusion. So protection passes from the position of an unscrupulous scheme of class plunder into that of a patriotic public policy. Finally, giving favouring circumstances, it can be rivetted upon the state as a political and military necessity, for states which

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stop the natural courses of trade with neighbours, cripple their development, " steal " their markets, and othenvise inflict economic injuries, live in fear lest the injured interests in these neighbour states may be strong enough to coerce their governments into forcible intervention.
Let me recall in that connection the economic rivalry between Great Britain and Germany prior to the Great war, and the consequence of it. The Germans wanted " a place in the sun "; and what has this nation, and what have other nations sacrificed? I submit, Mr. Speaker, that the protectionist idea, fructifying in that way was largely responsible for that awful world catastrophe. I proceed:
Given a group of powerful states, each controlled in Jts fiscal and its foreign policy by strong business interests, it is easy to perceive that a generally dangerous situation emerges. Each state, considering the possibility of invasion on the part of a foreign power or group of powers, must look not merely to its forcible but to its economic defences. So a national economy of industrial, agricultural and commercial self-sufficiency assumes the guise of a vital policy, and permanent protection is established as its chief instrument. Under these conditions protection becomes an essential feature of national defence, an economic militarism.
I submit to the House, and to the Conservative party in particular, that there is the goal towards which they are heading-international warfare and world catastrophe. They are heading the wrong way, I think their motives are sincere; I am not questioning the sincerity of protectionists at all, many of them are my personal friends, but I say their philosophy is wrong and is heading the world for disaster. Now I come to the main and last point of my argument.


Some hon. MEMBERS:: Hear, hear.


William Charles Good: I am afraid it will be longer
than some of my hon. friends would wish, but I will get through it as quickly as I can. The chief reason why protection has such a hold upon the modern world is that the doctrine of free trade as currently conceived, preached, and applied is hopelessly inadequate to meet the actual needs of present-day society. I will go that far with my Conservative friends, and I will go that far in criticism of some of my friends on the other side of the House, that their current conception of free trade is hopelessly inadequate and hopelessly unable to meet the needs of the present day. I think that the protectionists are making an honest effort in a misguided, ill-advised way to meet an actual need. Let me elaborate that thought.


An hon. MEMBER:: Here is another book.


William Charles Good: Yes, Mr. Speaker, I shall
have to refer to books. Books are my friends,
and I would like to feel they are the friends of everyone who wishes to widen his acquaintance in the worlds of place, and time.


Lewis Johnstone Lovett: Will my hon. friend tell
me when (he intends to break .that new ground?


William Charles Good: I am breaking new ground now if my hon. friend could only see it.


An hon. MEMBER:: Break it with the Brantford plough.


William Charles Good: I am of the opinion, Mr. Speaker, that I might conclude my argument more quickly if I were allowed to quote from this book, which expresses the point more clearly, more emphatically, and more concisely than I could express it. I shall quote from Henry George's book on Protection or F'ree Trade. The following is from his chapter on The Inadequacy of the Free Trade Arguments:
Free traders usually attribute the persistence of the belief in protection to popular ignorance, played upon by special interests. But this explanation will hardly satisfy an unbiased mind. Vitality inheres in truth, not in error. Though accepted error has always the strength of habit and authority, and the battle against it must always be hard at first, yet the tendency of discussion in which error is confronted with truth is to mfike the truth steadily clearer. That a theory which seems wholly false holds its ground in popular belief despite wide and long discussion, should prompt its opponents to inquire whether their arguments have really gone to the roots of popular belief, and whether this belief does not derive support from truths they have not considered, or from errors not yet exposed, which still pass for truths-rather than to attribute its vitality to popuiar incapacity to recognize truth.
I shall hereafter show that the protective idea does indeed derive support from doctrines that have been actively taught and zealously defended by the very economists who have assailed it (who, so to speak, have been vigorously defending protection with the right hand while raining blows upon it with the left), and from habits of thought which the opponents no less than the advocates of protection have failed to call in question. But what I now wish to point out is the inadequacy of the arguments which free traders usually rely on to convince workingmen that the abolition of protection is for their interest.
I had intended to quote somewhat more at length from this chapter, but I will abbreviate the argument.


An hon. MEMBER:: Go ahead.


William Charles Good: Mr. Speaker, one is tempted to lengthen out the discussion owing to these constant interruptions. I will, however, abbreviate by pointing out that the ordinary free trade argument has reference only to the tendency of free trade. Free trade logically is perfectly sound. It ought to produce certain results; it has a tendency to produce certain results, but there may be things in the road. A stone has a tendency to fall to
The Budget-Mr. Good

the ground but I may hold it up with my hand. And Henry George points out that under certain conditions the natural tendency of free trade is frustrated. Let me read this paragraph from the concluding part of this chapter. He has spoken of the way in which the belief in protection has survived despite all these demolitions. He goes on:
This may also be inferred from what protectionists themselves say. Beaten in arguments, the protectionist usually falls back upon some declaration which implies that the real grounds of his belief have been untouched

My hon. friends in the Conservative party, of course, occupy that position:
and which generally takes the form of an assertion that though free trade may be true in theory it fails in practice. In such form the assertion is untenable. A theory is but an explanation of the relation of facts, and nothing can be true in theory that is not *rue in practice. But free traders really beg the question when they answer by merely pointing this ^ut. The real question is, whether the reasoning on which free traders rely takes into account all existing conditions? What the protectionist means, or at least the perception that he appeals to, when he talks in this way of the difference between theory and fact, is, that the free trade theory does not take into account all existing facts. And this is true.
As the tariff question is presented, there are indeed, under existing social conditions, two sides to the shield, so that men who look only at one side, closing their eyes to the other, may continue, with equal confidence, to hold opposite opinion.
And that the distinction between them may, with not entire inaptness, be described as that of exclusively regarding theory and that of exclusively regarding facts, we shall see when we have developed a theory which will embrace all the facts, and which will explain not only why it is that honest men have so diametrically differed on the question of protection vs. free trade, but why the advocates of neither policy have been inclined to press on to that point where honest differences may 'be reconciled.
Now let me pause to make comment. For years we have had a classic and annual display in this House between protectionists on the one side and those who claim to be leaning towards free trade on the other. Is it not possible that, as both sides are honest, both sides are sincere, both sides are trying to do something for the benefit of the country, yet that one side is looking on one side of the shield as Henry George points out and the other side looking at the other side of the shield. And is it not possible that if they could just turn around and both sides see both sides of the shield there might be a reconciliation? Now, Mr. Speaker, I know the disposition of the House to object to my continuing argument at this hour, but I stated at the outset that I was not responsible for being forced into this position. I do think it is a misfortune that honest men i'l different parts of this chamber who want W io something for the benefit of Canada
[Mr. Good.l
should differ so radically on a question of this kind, and I want to submit that in this little book, if hon. members will read it and study it and meditate on it, there is a possibility of finding reconciliation, a possibility of remedying the unemployment difficulty that my hon. friends in the Conservative party are harping so much upon, without applying the remedy they think to be the only remedy. Now, I desire to close as quickly as possible.
I read the following final paragraph in the next chapter on The Real Weakness of Free Trade.
Trade is a labour-saving method of production, and the effect of tariff restrictions upon trade is unquestionably to diminish productive power. Yet, important as may be the effects of protection in diminishing the production of wealth, they are far less important than the waste of productive forces which is commonly attributed to the very excess of productive power. The existence of protective tariffs will not suffice to explain that paralysis of industrial forces which in all departments of industry seem to arise from an excess of productive power, over the demand for consumption/ and which is everywhere leading to combinations to restrain production. And considering this, can we feel quite sure that the effect of abolishing protection would be more than temporarily to increase the production of wealth?
May I submit this again to my protectionist friends. I think, in a measure, that their point of view is right in contending that under certain conditions it is far better to put up with the economic loss involved in tariff protection than to put up with the economic loss involved in unemployment. I think that is a fair statement of the case.
I sympathize with their objective if there is no other way of remedying the tragic unemployment that we have-if there is this excess of productive power going to waste all the time, men who want to work standing idle because they cannot get jobs; if there is no other way of remedying that situation then, at least, as a palliative or as an emergency measure, I do not know but that I would support something in the way of state action to stimulate business activity. But I would like to submit to them most humbly but most emphatically that theirs is the wrong way to solve the problem, and I do hope that they will turn their attention to a solution of the problem that will not involve the absurdities and the waste that are involved in protective tariffs.
Let me read the following paragraph from the next chapter on The Real Strength of Protection:
The truth is, that the fallacies of protection draw their real strength from a great fact, which is to them ^ as the earth was to the fabled Antaeus, so that they are beaten down only to spring up again.

The Budget-Mr. Good
How many times have my hon. friends to my right been beaten in argument but spring up again and maintain their position!
This fact is one which neither side in the controversy endeavours to explain-which free traders quietly ignore and protectionists quietly utilize; but which is of all social facts most obvious and important to the working classes-the fact that as soon, at least, as a certain stage of social development is reached, there are more labourers seeking employment than can find it-a surplus which at recurring periods of industrial depression becomes very large. Thus the opportunity of work comes to be regarded as a privilege, and work itself to be deemed in common thought a good.
Heie, and not in the laboured arguments which its advocates make, or in the power of the special interests which it enlists, lies the real strength of protection. Beneath all the mental habits I have spoken of as disposing men to accept the fallacies of protection lies one still more important-the habit ingrained in thought and speech in looking upon work as a boon.
Protection, as we have seen, operates to reduce the power of a community to obtain wealth-to lessen tho result which a given amount of exertion can secure. It " makes more work."
Let, me commend this to my Conservative friends-"it makes more work."
-in the sense in which Pharaoh made more work for the Hebrew brick-makers when he refused them straw; in the sense in which the spilling of grease over her floor makes more work for the housewife, or the rain that wets his hay makes more work for the farmer.
Yet, when we prove this, what have we proved to men whose greatest anxiety is to get work; whose idea of good times is that of times when work is plentiful?'
A rain that wets his hay is to the farmer clearly an injury; but is it an injury to the labourer who gets by reason of it a day's work and a day's pay that otherwise he would not have got?
The spilling of grease upon her kitchen floor may be a bad thing for the housewife; but to the scrubbing woman who is thereby enabled to earn a needed half dollar it may be a godsend.
Or if the labourers on Pharaoh's public works had been like the labourers on modern public works, anxious only that the job might last, and if outside of them had been a mass of less fortunate labourers, pressing, struggling, begging for employment in the brick-yards-would the edict that, by reducing the productiveness of labour, made more work have really been unpopular?
The point I make should be obvious, and I think it is a point which if perceived and followed up should result in a reconciliation of these opposing schools of thought that have been battling one another across this chamber for so many years. Therein lies the solution of the problem that bothers the protectionist. Why, what have we heard in this House during hours and days of discussion on unemployment and the deplorable condition of business? The protectionist sees only one remedy-to make work. Well, perhaps under certain conditions it is better than no remedy at all but I say let us get the better remedy, let us get the remedy that will go to the root of the problem and remove the source of the evil.
I am going to suggest later on what that remedy is. But let me now read the following:
Protectionism viewed in itself is absurd. But it is no more absurd than many other popular beliefs. Professor W. G. Sumner of Yale College, a fair representative of the so-called free traders who have been vainly trying to weaken the hold of protectionism in the United States without disturbing its root, essayed, before the United States Tariff Commission in 1882, to bring protectionism to a reductio ad ab-surdum by declaring that the protectionist theory involved such propositions as these: that a big standing army would tend to raise wages by withdrawing men from competition in the labour market; that paupers in almshouses and convicts in prisons ought for the same reason to be maintained without labour.
There we come to the same question we were discussing some time ago in connection with our penitentiaries, and I had some correspondence, as other members had, with regard to the impropriety of putting free labour out of a job by giving employment to prison labour. The quotation continues:-
That - it is better for the labouring class that rich people should live in idleness than that they should work.
How frequently has that fallacy been preached in this country? I heard it everywhere in my youth-the laudation of the rich men-if they would only spend their money, :lo no work themselves but give work to poor people who are out of a job, what a good thing it would be! The quotation continues:-
Trades unions should prevent their members from lessening the supply of work by doing too much; and that the destruction of property in riots must be a good thing for the labouring class, by increasing the work to be done.
But whoever will listen to the ordinary talk of men and read the daily newspapers, will find that, so far from such notions seeming absurd to the common mind, they are accustomed ideas. Is it not true that the good times during the war are widely attributed to the "employment furnished by government" in calling so many men into the army, and to the brisk demand for commodities caused by their unproductive consumption and by actual destruction? Is it not true that all over the United States the working classes are protesting against the employment of convicts in this, that or the other way, and would much rather have them kept in idleness than have them "take work from honest men"? Is it not true that the rich man who "gives employment" to others by his lavish waste is universally regarded as a better friend to the workers than the rich man who "takes work from those who need it " by doing it himself?
In themselves these notions may be what the Pro'? fessor declares them, "miserable fallacies which sin against	common	sense," but they	arise	from therecognition of actual facts. Take the most preposterous of them. The burning down of a city is indeed a	lessening	of the aggregate	wealth. But isthe waste involved in the burning	down	of a cityany more real than the waste involved in the standing idle of men who would gladly be at work in building up a city? Where every one who needed to work could find opportunity, there it would indeed b# clear that the maintenance in idleness of convicts, paupers	or rich	men must lessen	the	rewards of
workers; but where hundreds of thousands must endure privation because of their Inability to find work, the
The Budget-Mr. Good

doing of work by those who can support themselves, or will be supported without it, seems like taking the opportunity to work from those who most need or most deserve it. Such "miserable fallacies" must continue to sway men's minds until some satisfactory explanation is afforded of the facts that make the "leave to toil" a boon. To attempt, as do "free traders" of Professor Sumner's class, to eradicate protectionist ideas while ignoring these facts, is utterly hopeless. What they take for a seedling that may be pulled up with a vigorous effort, is in reality the shoot of a tree whose spreading roots reach to the bedrock of society. A political economy that will recognize no deeper social wrong than the framing of tariffs on a protective instead of on a revenue basis, and that, with such trivial exceptions, is but a justification of "things as they are," is repellent to the instincts of the masses. To tell working men, as Professor Sumner does, that "trades unionism and protectionism are falsehoods," is simply to dispose them to protectionism, for whatever may be said of protection they well know that trades unions have raised wages in many vocations, and that they are the only things that have yet given the working classes any power of resisting a strain of competition that, unchecked, must force them to the maximum of toil for the minimum of pay.
Now Mr. Speaker, may I try to briefly express the thought in my own mind, the problem, and the paradox that faces us, and the reason for all this battling in this Chamber for years and years-which I suppose, will continue: That the free trade argument as expounded refers only to freedom of exchange. Now exchange is part of the productive process, but it is only part, and if we do not have freedom in the other parts of the productive process, if we do not have freedom to produce, of what use is freedom to exchange? The free trade argument as ordinarily preached and expounded, as I say, refers only to a part of the productive process. It does not refer to the fundamental and initial stage in the process, and this is one of the important economic discoveries of the last fifty years, not yet appreciated by most of our people. I want to submit to the House that in the wider and better and fuller conception of free trade, the freedom to produce as well as to exchange, the freedom that applies to all the stages and parts of the productive process, we have a solution to unemployment, and we have a reconciliation of opposing schools of thought. I therefore submit to this House and to this country that it is worth while to make an effort to study rather than to battle. Let me repeat: I said before that our problems were to be solved by study and research and not by partisan recriminations and battling. I believe there is a reconciliation and I believe we can find it. I believe if we have a proper attitude of mind that we can measurably attain it.
Mr. Speaker, on account of the noise in the Chamber, it is difficult for me to make myself heard.


Hewitt Bostock: Order, order.


William Charles Good: There is a persistent protest against the prolongation of the debate, for which I disclaim all responsibility. I am ready to adjourn the debate any time. I think I can sum up the argument of Henry George thus-


Hewitt Bostock: The rules of the House are made for the protection, not so much of the majority as of the minority. The majority can always protect itself. I appeal to hon. members of the majority in that they may some day have to invoke the rules in order to protect their rights.


Frank S. Cahill: Is there not a well known
rule against reading speeches in this House?


Hewitt Bostock: Yes, there is a rule against reading speeches, extracts, newspapers, books, but this is what May says on the subject:
Members are not allowed to read books, newspapers or letters in their places. This rule, however, must be understood with some limitations; for although it is still irregular to read newspapers, any books and letters may be referred to by members preparing to speak, but ought not to be read for amusement or for business unconnected with the debate.
In the present instance, I have followed very closely the speech delivered by the hon. member, and I say that he is quoting extracts which are connected with the debate.


Frank S. Cahill: I Should like to make the
suggestion that the government might buy this book of Henry George and distribute it to the members. They would save time.


William Charles Good: Such remarks ill-become a
member of this House. I want to read, in conclusion, a very clear statement of the point of view that I have been trying to impress upon the House. With that I end my argument, save to say a word or two about my vote on the motion before the House. This is from page 2S6 of Henry George's Protection or Free Trade.
Let us turn again to the tariff question.
The mere abolition of protection-the mere substitution of a revenue tariff for a protective tariff-is such a lame and timorous application of the free-trade principle that it is a misnomer to speak of it as free trade. A revenue tariff is only a somewhat milder restriction on trade than a protective tariff.
Free trade, in its true meaning, requires not merely the abolition of protection but the sweeping away of all tariffs-the abolition of all restrictions (save those imposed in the interests of public health or morals), on the bringing of things into a country or the carrying of things out of a country.
But free trade cannot logically stop with the abolition of custom-houses. It applies as well to domestic as to foreign trade, and in its true sense requires the abolition of all internal taxes-
Will hon. members note this?
-that fall on buying, selling, transporting or exchanging, on the making of any transaction or the carrying on of any business, save of course where the motive of the tax is public safety, health or morals.

The Budget-Mr. Ward
Thus, the adoption of true free trade involves the abolition of all indirect taxation of whatever kind, and the resort to direct taxation for all public revenues.
But this is not all. Trade, as we have seen, is a mode of production, and the freeing of trade is beneficial because it is a freeing of production. For the same reason, therefore, that we ought not to tax anyone for adding to the wealth of a country by bringing valuable things into it, we ought not to tax any one for adding to the wealth of a country by producing within that country valuable things.
I pause there for a moment. We ought not to place a tax upon production inside the country. What are the government doing in that respect? If they will take the taxes off industry in this country, they will solve the problem of unemployment for my Conservative friends. What have the hon. member for St. Lawrence-St. George and other hon. members been declaiming about and objecting to? The taxation of industry. True free trade will not permit the imposition of a tax upon industry. Henry George continues:
Thus the principle of free trade requires that we should not merely abolish all indirect taxes, but that we should abolish as well all direct taxes on things that are the product of labour; that we should, in short, give full play to the natural stimulus to production- the possession and enjoyment of things produced-by imposing no tax whatever upon the production, accumulation or possession of wealth (i.e., things produced by labour), leaving every one free to make, exchange, give, spend or bequeath.
I do not know that I would go quite as far as that as regards death duties. But there is the solution of this perennial controversy. There is the solution of the problem that hon. gentlemen have been wrestling with for weeks and for months as regards the condition of industry. I stated last year in this debate-and it has had no recognition-that in my judgment taxes on industry, on consumption, were unjustifiable. I instanced last year two kinds of taxes that were theoretically defensible. First, there is the income tax and I gave my reasons for it, including in that tax the inheritance tax. And second, there is the tax on land values. I commend to hon. members the considerations that I advanced last year in this respect. I contend now that, as regards taxation and fiscal matters, we are operating in the wrong direction. I object to indirect taxation. I object to direct taxation of many kinds that are now imposed. I object to the taxation of industry. There are other kinds of taxation that are justifiable. As I remarked earlier in my speech, I was hoping that the government would have appointed a committee to inquire into this matter so that we might make some real advance and would not be threshing over old straw year after year; so that we might get down to basic principles.


Thomas George McBride: Is it not the case that this government appointed a committee on Banking and Commerce and that the hon. member has taken up the time of that committee from beginning to end?


William Charles Good: I 'do not think I need answer that question. I have just a word or two to state in conclusion. Regarding the amendment, I do not feel myself able to support it. I have no particular objection to it. I think it is futile. I do not see that it merits support. I was inclined to refuse to vote on the amendment at all, but if I vote on it, I shall oppose it on account of its futility.
As regards the budget proposals of the government, I cannot support them, for two main reasons: first because I think the government was elected on a very distinct understanding, and I do not think they have been true to that-I am not judging their motives, nor am I constituting myself a judge as to their consciences. I was much interested in the remarks of the Minister of Justice (Mr. Lapointe), as to the propriety of what he calls a middle course in the conflict of opinion. But I do not find myself able to support the government, because practically all gentlemen on the government side as well as those in this corner were elected on virtually the same platform, a platform which the government does not show any inclination to carry out, except to a very limited degree. I supported the budget last year because I thought it was to some extent a realization of that platform; I cannot support the budget this year
S a.m. because in my opinion it is merely marking time. Another reason for my inability to support the present budget is the fact that I see no vision, no outlook in the government's fiscal policies but rather a disposition to pursue the old lines that are discredited. Now I am finished, Mr. Speaker, and I must thank many hon. members of the House for the patience they have shown in listening to my somewhat lengthy remarks.


Mr. W. J. WARD (Dauphin):: I had an
address of an hour and a half prepared, and if I thought for one moment that the rank and file of hon. members were responsible for the silly and stupid practice of taking the budget vote on either a Tuesday or a Thursday, I should be inclined to detain the House even at this inopportune hour. I say with all due respect to the House that I regard this practice as one having its roots in pure and unadulterated selfishness on the part of the members from Quebec and Ontario. I think
The Budget-Division

it would have been only fair if those hon. members who have enjoyed week-end vacations at home and at their businesses throughout the entire session had extended to members from the more remote sections of the country, who are forced to. remain here continuously during the whole course of the session, the courtesy of taking the vote at a more favourable time. Personally, I have not lost a day so far; I have remained here over every week-end. I repeat, therefore, that it would have been but fair for those hon. gentlemen to have extended to us some measure of consideration and to have so arranged matters that the vote might be taken on Friday instead of Thursday. I would not for a moment think at this hour of the morning of inflicting myself either on Hansard or on the House, and I shall therefore refrain from saying what I had intended to say in discussing the budget. I say it is entirely unfair that such a situation should be possible and I hope that the committee now considering a revision of the rules will see to it that, for example, after the session has progressed to a certain extent, Wednesday nights shall be used to expedite the business of the House. We do not sit on that night, and we might have taken advantage of it to further the discussion of the budget; or, as I have suggested, the vote might have been taken on Friday night. I trust that these matters will be considered by the committee now revising the rules.


Joseph Tweed Shaw: Mr. Speaker, I was paired
with the hon. member for Centre Winnipeg (Mr. Woodsworth). Had I voted I would have voted against the amendment.


Mr. R. J. WOODS (Dufferin):: Mr. Speaker, I spoke on the amendment on March 27, and I desire to say a word or two now in explanation of the position I took at that time. I stated then that a manufacturing industry in the county I represent was at that time working in day and night shifts. That statement was challenged by the hon. member for Vancouver Centre (Mr. Stevens) on the following Monday by the reading of two telegrams, I being absent from the House. Now, if I made any statements that were not absolutely correct I assure hon. members of this House that I did so inadvertently. My authority for making the statement was this: Before the House opened I spent a day in the town of Orangeville where the manufacturing establishment in question is located. I am well acquainted in Orangeville and I know something of the conditions in connection with this institution. I heard the statement made that day that the Dods Knitting Company wa3 operating night and day. That night I passed the company's plant and as the building was all lighted up took that as evidence of the fact that it was operating at night. After the House opened and I listened to hon. gentlemen in this House talking about the industries being driven out of business through the reduction in the customs tariff, about the middle of February, I wrote to a leading citizen and business man in the town of Orangeville, an ex-mayor of that town, and I received a letter from him in answer to my question whether the Dods Knitting Company was operating in the day only or day and night shifts. He stated that the Dods Knitting Company was then operating in day and night shifts and had been for some time. After making my speech on the amendment I immediately took the train to spend the
week-end at home. As I have stated, in my absence on Monday the hon. member for Vancouver Centre made his speech on the amendment, and he read telegrams to the House after quoting my statement, and said he thought it strange and sought more definite information. The telegrams that the hon. gentleman read were as follows:
Dods Knitting authorize me to inform you plant has not been operating night and day; that they are being forced to go on part time immediately. He is wiring explaining more ^fully.
And the following:
Dods Knitting Company are not working day and night and are arranging to close to part time.
When I returned to the House on Monday night and was informed by my friends of what had taken place I was surprised, and I took advantage of the first opportunity to go to the hon. gentleman's room in the building and speak to him on the subject. I asked him if he would permit me to see those telegrams. He stated they had been received by a gentleman in Ottawa who might not like his name brought before the public, but he assured me that the first one I have just read was from the Manufacturers' Association of Toronto.	.


Mr. STEVENS:: No, my hon. friend is
mistaken. I said it was from the Knitting Association or the Woollen Mills' Association.


Robert John Woods: The Knitting Association? Then I was mistaken in my understanding of what the hon. member said. Anyway, the second one was direct from the Dods Knitting Company. I then wired to a gentleman I know well, a man of undisputed integrity, and ex-mayor of the town of Orangeville. I asked him if the Dods Knitting Company was then operating day and night shifts, or day shifts, and he replied in this telegram, which I shall read:
Dods mill still running day shift. Closed night shift about month ago.
Then in order to have a full statement of the facts, I wired to another business man in the town of Orangeville, a man of unquestionable character and integrity, and also an ex-mayor of the town of Orangeville. From him I received the following telegram:
Dods Knitting Company running full time days with full staff. No night shift now.
Now, Mr. Speaker, the facts are these: While my statement in words was not absolutely correct when I made the statement in the House, yet it was correct in the spirit, and the fact is that the Dods Kintting Mill was running day and night shifts, and at the time I got these wires was running day shifts full time and full staff. I am very
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NAYS Messrs:
grateful to the House for allowing me the opportunity to make this explanation, and I leave it to hon. members and to the country to judge of the merits or demerits of the arguments that I presented in regard to the prosperity of that company.


Joseph Tweed Shaw: I was paired with the hon. member for Centre Winnipeg (Mr. Woodsworth) Had I voted I would have voted for the motion.


Charles Gavan Power: I was paired with the hon. member for East Hamilton (Mr. Mewburn). Had I voted I would have voted against the amendment and in favour of the resolution.
The House went into committee of Ways and Means, Mr. Gordon in the chair.
Progress reported.
On motion of Mr. Mackenzie King the House adjourned at 8.55 a.m. Friday.)

Canada-U.S. Treaty
Friday, May 1, 1925