1926-05-10

DEATH OF QUEEN ALEXANDRA

Mr. SPEAKER :: I have the honour to inform the House that I have received the following message from the secretary of His Excellency the Governor General:
Ottawa, 6th May, 1926.
Sir,-I am desired by His Excellency the Governor General to inform you that the address of the Senate and House of Commons expressing their profound regret and deep sorrow at' the death of Her Majesty the Queen Mother was duly laid at the foot of the throne. His Majesty the King was profoundly gratified at its terms and commanded that his most sincere thanks should be communicated to the members of the Senate and House of Commons for the sympathy expressed with him and with the royal family in their sad loss.
I have the honour to be, Sir,
Your obedient servant,
A. F. Sladen,
Governor General's Secretary.
The Honourable
The Speaker of the House of Commons,
Ottawa.



MARINE AND FISHERIES COMMITTEE

[Stage Direction]
Mr. FRED STORK (Skeena) moved that the first report of the select standing committee on Marine and Fisheries be concurred in.
Sir HENRY DRAYTON:: Will the hon.
member please explain? What are we concurring in?


Mr. STORK:: The printing of the evidence.


Hon. J. A. ROBB (Minister of Finance):: Does this cover the printing of the evidence?


Mr. STEVENS:: That is what the chairman
says.


James Alexander Robb: I would like to draw attention to the fact, Mr. Speaker, that during the last session some hon. members advised doing away with Hansard in committee of the Whole

Budget Changes
House, as a method of economy. It would now appear that we are gradually enlarging Hansard, and are not only having it in the House, but in the committees as well.


Henry Herbert Stevens: I would like to draw to
the attention of the minister the fact that under the rules of the House all such motions are supposed to go to the committee on Printing, there to be dealt with. I have noticed this session that in perhaps five or six instances the rule has been suspended and printing has been authorized, but I think if the minister would allow the motion to go to the Printing committee that would solve his difficulty.


Alfred Stork: Let the motion stand.


Hewitt Bostock: Motion stands.
Motion stands.



BUSINESS OF THE HOUSE


Right Hon. W. L. MACKENZIE KING (Prime Minister):: With the consent of the
House I should like to move the following resolution, of which unfortunately I have not given notice:
That when this House adjourns on Wednesday, May 12, it stand adjourned until Friday, May 14.
I may say that it has been the custom in previous years for the House to adjourn over Ascension Day.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved for leave to introduce Bill No. 97, to amend The Dominion Forest Reserves and Parks Act.
Henry Lumley Drayton: Explain.


Mr. STEWART (Edmonton):: This amendment is for the purpose of eliminating from the forest reserves of northern Saskatchewan some lands that have been found fit for agriculture. When the bill was put through it included more land of a good agricultural character than was anticipated, and it is now desired to withdraw that land. The amendment also provides for the addition of some land to one or two of the forest reserves in Manitoba.
Motion agreed to and bill read the first time.



DUMPING DUTY-AUSTRALIAN BUTTER AND FRUIT

[Stage Direction]
On the Orders of the Day:
Mr. J. L. STANSELL (Norfolk-Elgin):: _ 1 notice the Minister of Customs (Mr. Boivin) in his seat, and I would like to renew the question which I asked on Friday last. It is reported in the press that owing to the heavy importations of butter and certain fruits from Australia the government have found it necessary to make use of the Dumping Act and enforce a duty of 6 cents per pound against these products. Is that report correct?


Hon. G. H. BOIVIN (Minister of Customs):: This matter was brought to my attention only this morning, and inquiries are being made at present by officials of the department. I will have a definite answer for my hon. friend to-morrow.


Henry Lumley Drayton: Perhaps the
minister would go a bit further and find out whether or not any order has been made. According to some papers not only has an order been made, but it is to apply to past transactions, going back to the first of the year.


Georges Henri Boivin: No order has been made
by the department, but no order by the department is necessary for the application of the dumping clause. The local collector has the right to apply the dumping clause without any order from the department.



CHANGES IN THE BUDGET

[Stage Direction]
On the Orders of the Day:
James Alexander Robb: Mr. Speaker, last week upon two or three .occasions I was asked if there were any changes to be made in the budget when we got into committee. The number of questions asked induced me to look up previous budgets presented, and by the way, I may say to my hon. and genial friend from West York (Sir Henry Drayton) that I read over carefully his budget of 1920, and I can assure him now that the changes which I shall propose will not exceed those that he made m his first budget of 1920.
So far as the budget proposals regarding automobile duties are concerned, which seem to interest hon. gentlemen particularly, the tariff of 27i per cent and 20 per cent remains; .there will be no changes. There may be in committee the addition of some words to clarify the situation for administrative purposes, but I can assure my hon. friends again that there will be no change in the principle.
Budget Changes


Henry Lumley Drayton: Now that my hon. friend is on that question, would he kindly tell us whether there will be changes in the sales tax having regard to automobiles, or changes in the luxury tax so-called, which is in effect an additional tax, or changes as to rebates, or any changes in the duties on the parts used.


James Alexander Robb: As I said before, there will
be no general changes as to parts. There will be some changes made in the language defining the parts, to make the position of the parts men absolutely safe. As regards the sales tax there will be no change whatever. I have been urged from time to time to make changes in the excise tax, and it has been represented to me that such changes would result in the machines being sold at a lower price to the Canadian public, but I have not yet been convinced that that is in the public interest.


Henry Lumley Drayton: As to the question of departmental regulation, does that cover questions of valuation?


James Alexander Robb: Oh, no.


Mr. H. C. HOCICEN (Toronto West Centre):: May I ask the Minister of Finance
whether there will be any change made in the customs regulation with regard to the admission of American magazines?


James Alexander Robb: Mr. Speaker, I listened to
the speech of my hon. friend from Toronto West Centre (Mr. Hocken), and I am bound to say that I said to some one near me at the time that the hon. gentleman had made out a good case from his point of view, but I am not prepared to say that there will be any changes in that regard.



PRIVATE BILLS CONSIDERED IN COMMITTEE

[Stage Direction]
Bill No. 20, respecting the Pacific Coast Fire Insurance Company.-Mr. Clark.

[Stage Direction]
The House in committee on Bill No. 92, respecting the Grand Orange Lodge of British America-Mr. Hocken-Mr. Duff in the chair.
Section 1 agreed to.
On section 2-Section 1, paragraph (e) repealed.
The CHAIRMAN:: I might point out that subsection 2 on page 2 should be a separate clause instead of a subsection.
[Mr. Robb.)


William Lyon Mackenzie King: If my hen.
friend is not really anxious to press this bill at the moment, but would allow it to stand until the chairman of the committee is present, I would be obliged to him. Unfortunately, the chairman is not present, but if there is any urgency about this bill, I will not press my request. If the hon. gentleman could let the bill stand until the chairman of the committee is in his seat, I would try and accommodate him in getting it through as soon as possible.	-


Horatio Clarence Hocken: I see no objection to
that, Mr. Chairman. The bill is very simple. It went through the committee without any objection from any source. It is simply expanding the powers of the order respecting insurance, the powers the order has now having been granted thirty-six years ago. Since then insurance has broadened very considerably. As a matter of fact, this is simply bringing the insurance branch of the order up to date. I am quite satisfied, however, ti wait until the chairman of the committee is present.


William Lyon Mackenzie King: Thank you.
Section stands.
Progress reported.



QUESTIONS

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

Mr. CAMPBELL:: 1.	Is it the intention of the Civil Service Commission to take any action in connection with the grievance of those civil servants who were in 2B of the second division at the time the Classification Act of 1918 was applied, and who by the application of this act were prevented from reaching the maximum of their class,. $2,100 per annum?
2.	What action, if any, has the Civil Service Commission taken in respect to the report forwarded some time ago in connection with this grievance, by the Civil Service Association?
3.	Is it the intention of the commission to make such recommendations in the upper revision of salaries that would tend to remove this grievance, to at least some extent ?


Right Hon. Mr. MACKENZIE KING:: 1.	No.
2.	The question has been given consideration.
3.	No. The request of the Civil Service Association was, in the opinion of the Civil Service Commissioners, fully taken care of by the Civil Service Act, 1918, as amended, and by subsequent reclassification. Under the Civil Service Act, 1918, as amended, positions

Questions
were to be classified according to the duties and responsibilities exercised by the employee, but the grading of the employee prior to the reclassification was retained by the employee if the compensation of the class in which he was placed by reclassification was lower than his previous grading. In the opinion of the commissioners the Civil Service Act of 1918, as amended, did not contemplate any Extension of the rights of an employee beyond the grade in which he was placed prior to reclassification.


SOLDIER SETTLEMENT-SALES OF LAND BY COL. MURRAY AND H. H. MOSS
Mr. BROWN:: 1.	What quarter sections or other parcels of land in Manitoba were sold to the Soldier Settlement Board by Colonel F. J. Murray?
2.	When was each of such quarter sections or other parcels of land acquired by the vendor and when in each case was it sold to the board?
3.	At what price did Colonel Murray acquire each of the said quarter sections or other parcels of land and what in each case was the price paid by the board?
4.	What are the names of the solicitors who acted for the vendor in each of these sales to the board?
5.	Did Colonel F. J. Murray ever draw a military pension? If so, is he still drawing it?
6.	What quarter sections or other parcels of land in Manitoba were sold to the Soldier Settlement Board by Mr. H. H. Moss?
7.	When was each of such quarter sections or other parcels of land acquired by the vendor and when in each case was it sold to the board?
8.	At what price did Mr. H. H. Moss acquire each of the said quarter sections or other parcels of land and what in each case was the price paid by the board?
9.	What are the names of the solicitors who acted for the vendor in each of these sales?


Charles A. Stewart: (1)	(2) a.	(2) b.	(3) a.	(3) b.	(4)Land	Vendor	Date vendor acquired land	Date sold to board	Price paid by vendor	Price paid by board	Vendor's solicitors%	%	W. i 2-16-1 E. 1st	F. J. Murray	May 17, 1920	May 6, 1920	2,240	5,120	Anderson, Guy & Chappell. Kennedy, Kennedy &N. i 34-17-10 W. 1....	F. J. Murray	July 29, 1919	July 30, 1919	3,840	4,480	Kennedy.S. h 22-19-10 W. 1	F. J. Murray	August 9, 1919	Nov. 5, 1919	2,250	4,680	
(5) (a) yes. (b) yes.
(6)
Land
Vendor
(7) a.
Date vendor acquired land
(7) b.
Date sold to board
(8) a.
Price paid by vendor
(8) b.
Price paid by board
(9)
Vendor's solicitors

S.W. 23-17-10 W. l...\ N.W. 14-17-10 W. 1./

S. * 14-17-10 W. 1....

H. H. Moss..
H. H. Moss.. Amy Moss, wife of H. H. Moss H. H. Moss..
H. H. Moss. H. H. Moss H. H. Moss.
July 27, 1917
by agreement of sale and Q. C. Deed, Wm. *Grant
to
Amy Moss, wife of H. H. Moss.
No information
July 2, 1919
July 2, 1919 Dec. 13, 1919
July 15, 1919
Dec. 13, 1919 July 17, 1919 May 22, 1919
14,080
for
the
two
sections
No information

2,000
2,000
5,000
4,160


' COO 4.160 4,800
[Stage Direction]
Kennedy, Kennedy & Kennedy.

Mr. PERRAS:: 1.	Was E. F. Beaudry employed at the Printing Bureau in 1920?
2.	If so. for how many years previous to 1920?
3.	What was his occupation?
4.	Was he a public servant?
5.	Did he receive the bonus?
6.	Is he still employed at the bureau? If not, when was he retired?
7.	Does he receive a pension? If not why?
8.	How are employees at the bureau retired since 1920?
Hon, Mr. ELLIOTT:
1.	Yes.
2.	Thirty years, 4 months and 12 days previous to 1920. Appointed August 19, 1889.
3.	Editor of Printing Copy.
4.	Answered by Nos. 1 and 3.
5.	Yes-1918-19, $250; 1919-20, $324; 192021, $199.50 to date of retirement.
6.	(a) No. (b) November 16, 1920.
7.	(a) No.

Questions
(b) Mr. Beaudry was, during the reorganization of the Government Printing Bureau carried out by the Civil Service Commision, retired on November 16, 1920, by Order in Council No. P.C. 2738, November 12, 1920, and under the provisions of Order in Council No. P.C. 2146, October 22, 1919, he was granted 2 months' salary and bonus in lieu of notice and an annual retiring allowance of $324.53 for a period of 5 years and 2 months beginning January 16, 1921. The allowance was based on his average salary and bonus of the last three years of service, and the duration of allowance was based on two months for each year of service. Mr. Beaudry's allowance expired on March 15, 1926.
8.	Subsequently to 1920 and until October 31, 1924, all employees were under the provisions of the Public Service Retirement Act. On July 19, 1924, permanent civil servants in receipt of a stated annual salary passed under the provisions of the superannuation Act, Chap. 69, 14-15 George V or continued under the provisions of Chap. 17, R.S. 1906-An Act respecting the Superannuation and Retirement of persons employed in the Civil Service of Canada. There is no provision by law with respect to the retirement of employees other than civil servants.


APPOINTMENTS TO CIVIL SERVICE
Horatio Clarence Hocken: How many appointments (permanent and temporary) were made to the general civil service by the Civil Service Commission in the years 1923, 1924, 1925?


William Lyon Mackenzie King: 
CANADIAN EXPEDITIONARY FORCE BATTLE HONOURS
Mr. HARRIS:: 1.	What battle honours to be carried on their colours for taking part actively in pitched battles during the Great War and for campaigns, have been awarded by the British War Office to the Canadian Expeditionary Force?
2.	Are all these honours allowed to be carried in scrolls on the regimental colours?


Hon. Mr. MACDONALD:: 1.	and 2. The matter of awarding battle honours to units of the active militia is still under consideration by the Department of National Defence.
[Mr. Elliott.)


CENTRAL SASKATCHEWAN-INDIAN HOSPITAL
Mr. HOCKEN:: 1.	Is it the intention of the government to establish an indian hospital in central Saskatchewan?
2.	Has the location of such hospital been decided?
3.	When built, will the hospital be under public management ?


Hon. Mr. STEWART:: 1.	No.	.
2.	and 3. Answered by No. 1.


ASSISTED TO IMMIGRATION
Mr. DOUCET:: What amount of money did the government spend in 1925 in assisting immigration; (a) in regard to assisted railway or ocean fares; (b) for assistance in land settlement; (c) for assistance in keep of immigrants?


Charles A. Stewart: (a) Grant, $116,827.21; recoverable loans, $130,703.21; total, $247,530.42; (b) $284,725.57; (c) $13,161.85,
The above figures are for eleven months ended February 28th of the fiscal year, 1925-26.


INDIAN AGENT AT CARDSTON
Mr. DAVIS:: 1.	Is a man by the name of Faunt employed by the government as Indian agent at Cardston?
2.	If so, was an investigation into his conduct recently held by Inspector Christensen of Regina?
3.	Whatt were the findings from the said investigation ?
4.	What is the intention of the department with regard to the said Faunt?


Hon. Mr. STEWART:: 1.	Yes.
2.	Yes.
3.	Unfavourable.
4.	Decision in abeyance.


LIVERPOOL, N.S. AND WESTERN HEAD-CARRIAGE OF MAILS
Mr. BLACK (Halifax):: 1.	Who has the contract 'for carrying His Majesty's mails between the Liverpool, Nova Scotia, and Western Head post offices?
2.	Were tenders called for this work, and if so, what were the names of the tenderers, and the amount of each tender?
3.	Was contract awarded to lowest tender? If not, why?
4.	On whose recommendation was the present contractor given this contract?
5.	Has the department any information that the present contractor is fully equipped and capable to perform the service?
6.	Were there any petitions from the citizens of Western Head and Mersey Point praying that the previous contractor be retained in the service?
7.	If so, did the government consider these petitions, and why was not effect given to them?


Hon Mr. ROBB (for Mr. Lapointe):: 1.	Walter H. Sperry.

Questions
2.	Yes.
Walter H. Sperry	$365	00Robert V. Fraelic	
360	00Fred. S. Balcom	
391	23Alonzo Roy	
700	003.	Yes.4.	The Post Office Act provides that the contract shall be awarded to the lowest competent tenderer.5.	In the absence of any report from the postal district superintendent at Halifax to the contrary it is assumed that the contractor is fully equipped and capable of performing the service.
6 and 7. Yes, petitions of this nature were received at the department on the 5th February, 1926, but instructions had already been issued to invite tenders.


POSTMASTER PIERREVILLE, YAMASKA COUNTY
Mr. DOUCET:: 1.	Who is the postaster in charge of the post office of Pierreville, Yamaska county, Quebec?
2.	What are the names of the employees of that post office ?
3.	Have any complaints been received by department as to the conduct of any employees?
4.	If so, does the department pro-pose making an inquiry re those complaints?


Hon. Mr. ROBB (For Mr. Lapointe):: 1.	Mrs. S. G. Boucher
2.	Gaston Boucher and Miss C. Proulx.
3.	No.
4.	See answer to 3.


LEAGUE OP NATIONS- CANADA'S REPRESENTATIVE AT GENEVA
Mr. ROSS (Kingston):: 1.	What is the strength of Canada's contingent at Geneva, in connection with the League of Nations?
2.	What are the names of the representatives and what position does each one hold?
3.	What is the remuneration of each?


Mr. MACKENZIE KING:: 1.	Two.
2.	Dr. W. A. Riddell, Canadian Advisory Officer, League of Nations; Miss Margaret Clark, secretary.
3.	Salary, Dr. W. A. Riddell, $6,000 per annum; salary, Miss Margaret Clark, $1,200 per annum.


INCOME TAX BRANCH-STATUS OF EMPLOYEES
Mr. LADNER:: 1.	Are the employees of the Income Tax branch of the Department of Customs and Excise considered as temporary employees without the rank and classification of civil servants?
2.	If so, what is the reason for obliging them to remain as temporary employees?
3.	Is it the intention of the government to place employees under Civil Service Commission and have them rated and classified regularly as civil servants, and, if so, when?


Hon. Mr. BOIVIN:: 1.	No.
2.	Answered by No. 1.
3.	No.


QUESTION PASSED AS ORDER FOR RETURN
Mr. DAVIS:: 1.	How many motor cars or trucks have been purchased by the government, throughout the Dominion of Canada, during the months of January, February, March, and up to April 16, of the year 1926?
2.	From whom were they purchased, and what departments used said cars?


William Lyon Mackenzie King: Stand as an order for return.


Henry Lumley Drayton: I point out to my right hon. friend that the government can scarcely have been purchasing motor cars on such a lavish scale for only four months of the present year that a long return is required to contain the particulars.


William Lyon Mackenzie King: If my hon.
friend will notice the question, it asks for particulars of cars purchased by all the departments. This of necessity means communicating with the different departments first, and that may take a little time. The government would prefer to answer the question by bringing down a return.


IMPORTS FROM UNITED STATES
Mr. DOUCET:: 1.	What has been the total imports from the United States, in the last twelve years?
2.	What has been the total imports of coal registered, both bituminous and anthracite, from the United States, in the last three years?
3.	Wliat has been the total imports of iron from the United States, in the last three yearn?
4.	What has been the total imports, during the same period, of other manufactured products from the United States, which could have been manufactured in Canada ?


James Alexander Robb: Return tabled forthwith.


UNOPPOSED MOTIONS FOR PAPERS
[Stage Direction]
INDIAN AGENT AT CARDSTON On the order:
Mr. DAVIS:: For a copy of all lettere, telegrams, correspondence and other documents exchanged between the department and any persons whomsoever, with regard to the suspension of Indian Agent Faunt o-f the Blood Indian reserve at Cardston. Also a copy of the report sent to the department by Inspector Christensen of Regina in this connection.



The Budget-Mr. Maloney


Charles A. Stewart: The conduct of the Indian Agent on the Blood Indian reserve is now being investigated. I would much prefer that my hon. friend would allow his motion to stand rather than that I should bring down the papers at the present moment.


Hewitt Bostock: Stand.


FREIGHT RATES TO AND FROM PACIFIC COAST
Henry Herbert Stevens: For a copy of all correspondence, letters, telegrams, applications or memorandums and official documents of all kinds, having' reference to reduction, equalization or otherwise dealing with the freight rates to and from the Pacific coast and passing between the government of British Columbia or the Hon. John Oliver, Premier of British Columbia, or any person acting on behalf of the said government on the one hand and the Prime Minister, the Minister of Railways or any member of the government or any officer of the government since April 1, 1925, together with a copy of all orders in council passed since the said date, and having reference to the said subject.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House resumed from Friday, May 7, the debate on the motion of Hon. J. A. Robb (Minister of Finance), that the Speaker do now leave the chair for the House to go into committee of Way3 and Means and the proposed amendment thereto of Hon. R. J. Manion.
Mr. M. J. MALONEY (South Renfrew):: Mr. Speaker, just previous to the adjournment of the House on Friday night I had offered to the Minister of Finance my very sincere congratulations on the manner in which he had delivered the budget speech some three weeks previously. It was with a great deal of pleasure that I was able to do this. I must confess to him to-day, however, that it is with equal sorrow I find myself not able to follow him into the promised land to which the singularly wonderful budget delivered by him holds out the prospect of leading us. I am satisfied that the hon. gentleman himself is really none too sanguine in his expectations despite his rosy anticipations. The Finance Minister talked to us in terms of millions. He referred to the imports and exports, to the balance of trade, to the reduced taxation which he claimed has been brought about, and to the improvement in the railway situation and the figures he used were up in the millions. I cannot help thinking that while these figures sound good they are of little interest to the ordinary citizen 
of this Dominion. In this country the great percentage of our population is really struggling to make a living and is not interested in the millions spoken of by the Minister of Finance. That hon. gentleman would have us believe that prosperity is right upon us, and that Canada is prospering to-day as she never did before. Yet deep down in his own heart, and deep down in the hearts of all those hon. gentlemen who uphold him in his argument, they must admit that at every street or crossroads comer in city, town, hamlet or country place the same old lament is heard, " Times are hard, and money is hard to get." That is the condition which exists throughout Canada at the present time. I have sat in this House ever since January 7th last, and every day there has been a sitting I have heard a cry of despair go up from some hon. member or from the representative of a particular section in this Dominion. Yet it is said we have prosperity in Canada.
Conditions in the west have been spoken of. We all agree that there are some conditions there which can and ought to be remedied. We all agree that the people of the west are not as prosperous as the Minister of Finance would lead us to believe. What did we find within the last year and a half? That actually, because of the gloomy outlook, some outstanding men in the west were talking of secession, of separating from the eastern part of Canada. Why should that be, if conditions are so prosperous as they say? But Mr. Speaker, if. we go into the west we find millions and millions of acres of soil possessing sufficient fertility to produce vegetation of all kinds in abundance and a sturdy race of men and hardy women, who are not indolent, but who are toiling to build up that great country and to provide a heritage for those who will follow them. Why should these men talk secession, if they are prosperous?
Let us look into conditions in the Maritime provinces. Y'ou know Mr. Speaker, that member after member from that section of the House has been on his feet day after day telling us of the needs, the wants and the wrongs of those eastern provinces. We do not have to take the word even of these hon. gentlemen. We all recollect what occurred in the House not more than a year ago. We all remember that a certain industrial condition existed down there which cost the lives of human beings. You will remember that in connection with the industrial unrest in. Nova Scotia human lives were sacrificed. Human blood was shed. Why? Because they were prosperous? Not at all. It was-

The Budget-Mr. Maloney
because of industrial conditions which existed then and which exist to-day and which will continue to exist as long as we live under the same system of government as we have in this House at the present time. What did % the government of Canada of that day do to remedy conditions in Nova Scotia? Did they do one single, solitary thing to help relieve the suffering miners and their families? Did they do anything to bring about better conditions in that section? They did nothing at all. Well, yes, they did one thing. They sent soldiers down there from Toronto and Kingston to shoot down if necessary a^y man who would raise a hand in defence of his starving wife or children.


Charles A. Stewart: Surely my
hon. friend is not going to repeat the statement that has been frequently made in this House, when he knows that this government did not send them down.


Martin James Maloney: Who sent them down?


Charles A. Stewart: They went
at the request of the government of Nova Scotia.


Martin James Maloney: With whose permission?
Was it not with the permission of this government?


Charles A. Stewart: It makes no difference.


Martin James Maloney: Did the Minister of
National Defence not send them down?


Charles A. Stewart: It is unnecessary to make that statement, because we have had this matter before the House time and again. Hon. members on the other side have been told frequently this government had nothing to do with the sending of troops. They simply acted under the statute of this country.


Mr. MACDONALD (Kings):: At whose instigation?


Martin James Maloney: Did these soldiers not
require to have the consent of the Minister of National Defence before they left their barracks in Toronto?


Charles A. Stewart: No they did not. If the hon. member will look up the statute he will find my statement is correct.


Martin James Maloney: Are they allowed to
roam scot-free throughout the country wherever they wish to go?


Charles A. Stewart: No, they
are to go upon call. If the hon. member looks up the act he will understand it better.
14011-206J


Martin James Maloney: And who will send them when the call is received?


Charles A. Stewart: If the hon. member will refer to the statute he will find all the provisions embodied in it.


Martin James Maloney: To whom is this call
sent?


Charles A. Stewart: The parliament of Canada passed this act.


An hon. MEMBER:: When?


Charles A. Stewart: A good many years ago.


Alexandre Joseph Doucet: It was amended in 1924.


Charles A. Stewart: It was
amended so that troops could be sent only on a call issued at the instance of the attorney general of the province, and payment of the expenses was to be made by the province. It was so amended as to make it impossible for the federal government to send troops, except upon the requisition of the provincial government.


Martin James Maloney: The soldiers were sent
down. There must have been some authority centered right here in Ottawa to allow them to go down, and they had orders when they got there to shoot down if necessary, any man who would dare raise his hand in defence of his wife and family. Wrhy should such a condition exist in Nova Scotia-Nova Scotia the garden of eastern Canada, a province with resources second to none? Why should we have con.-, ditions of actual starvation in that province, if Canada is in a prosperous condition today?


William Lyon Mackenzie King: I think it would not be proper to permit the statement of my hon. friend to go unchallenged. He has said that orders were issued to shoot down the men if necessary. Can my hon. friend produce a copy of any such order?


Martin James Maloney: W'hy should the soldiers
go there, if they did not have that authority?


William Lyon Mackenzie King: The hon. member said they had authority to shoot the men. He cannot produce that order.


Martin James Maloney: When a soldier is placed on duty, what is the first order given?


William Lyon Mackenzie King: Will the hon gentleman produce any order to shoot down the men? I say he cannot, and I challenge him to produce it.

The Budget-Mr. Maloney


Martin James Maloney: When you send a soldier out on duty his orders are to shoot down men if necessary. I have touched upon conditions in the west. I have referred to the condition in the Maritime provinces. I will ask hon. members for a moment to come back to the central provinces and see what evidence of prosperity we find? You can go into town after town from one end of Ontario, or of Quebec, to the other, and you will find factory after factory with the doors securely locked. You will find man after man looking for work. Then go out into the country districts and you will find many farmers, at one time prosperous, who have abandoned their farms. You will see farm after farm abandoned. You will find farmer after farmer struggling to make a meagre existence, and yet they tell us we have prosperity in Canada.
In order to increase this wonderful prosperity the Minister of Finance has brought down his budget. Let us see what species of cure-all this budget is. It is not my intention to go into it at great length, but I will deal with the main item. We are told it is a poor man's budget-for the benefit of the poor man. We shall see. The first item of that budget, which perhaps is the most serious of all, is the one providing for a cut in the automobile tax. At one fell swoop the Minister of Finance cut the head off the most thriving industry in Canada, one of the best industries for the future of the country, and yet he tells us it is in the interest of the poor man. We all know the poor man does not owTn an automobile, and those of us who are foolish enough to own one, *even though we are poor, know that the amount saved by virtue of the reduction in the duty will mean very very little indeed. Why Mr. Ford in his price list just published claims a reduction of from $10 to $45 in the various models which he turns out. We know the average life of one of these cars with ordinary care is perhaps ten years. In other words we save from $1 to $5 a year on our car. Again that saving of from $1 to $5 a year you have the fact that the government, by virtue of this legislation, has jeopardized t'he position of 30,000 of our citizens, who are to-day engaged in the occupation of manufacturing and distributing automobiles. In addition to this 30,000 you have their dependents, numbering more than 125,000, whose living is jeopardized by this cut. Furthermore you strangle the industry, prevent its future development, but, greater than all, you weaken the confidence of investors in the fiscal future of the great Dominion of Canada. Now, Mr. Speaker, we want cheaper automobiles. We all believe that to-day auto-

mobiles are selling at a price altogether too high, but is there no way in which a reduction of price might be [DOT] brought about, without strangling the industry, and injuring our fiscal .future? The thought occurred to me that if instead of cutting off or lowering the duty, as has been done, or will be done if the budget is passed, we raised the duty on all automobiles coming into Canada to such a height that the Canadiafi market would be preserved for the Canadian manufacturer, it would mean for them a larger market. Then after this tariff board has been fully authorized to do business, we might let them go down, examine the books and audit the accounts of the various automobile manufacturers and if necessary, set a reasonable price at which cars might be sold in Canada. If not, we could limit the profits which might be derived from the manufacture and sale of these cars. In that way automobiles might be sold much cheaper than under the present legislation while at the same time this industry would be encouraged and our fiscal interests preserved.
We are told that the income tax is another item in the budget affecting the poor man. We know that prior to this budget being thought of, a married man writh an income of $2,000 was exempt from this taxation. We do not consider that a man with a salary of $2,000 a year is a poor man; as a matter of face compared with many people in this country he is a rich man. In the year 1923 the farm labourers of the Dominion from coast to coast drew an average annual wage of $372 with board, or $611 without board, and employees in industrial establishments drew an average yearly salary of $937. In all, almost 500,000 Canadians were drawing an average salary of $800 a year. Will they call this a poor man's budget? What has the government done for the labourer by bringing down this budget change with regard to income tax? It has shifted the burden of our national debt from the shoulders of those who are most able to bear it to the people who are drawing salaries of less than $1,000 a year, and yet we are told that this is a poor man's budget.
The reduction in the postal rate from three cents to two cents was indeed a surprise. Nobody ever thought of it; there was no great desire on the part of the people of Canada for a reduction in postage. What does this reduction mean? It means a loss in revenue to the Post Office Department of $5,000,000 a year. It is to the credit of the Postmaster General and the splendid officers who are to-day working under him that the work they have been doing is so excellent

The Budget-Mr. Maloney
that their department is able to stand a reduction if this kind. If this reduction means a decrease in revenue of $5,000,000 for that department, what does it mean to the poor men of this country? The ordinary individual who is not doing business writes possibly fifty, sixty or seventy letters a year. The farmer, for example, may write fifty or seventy-five letters a year and he will therefore save fifty or seventy-five cents through this reduction; but what the farmer is more particularly anxious about to-day is not to save this fifty or seventy-five cents, but to have an improved mail service throughout the Dominion?
I say to the hon. member for Brandon (Mr. Forke) who is supposed to be the leader of the farmers from the Atlantic to the Pacific: You are anxious for the comfort and welfare of those whom you are supposed to lead; if you are really desirous of making life on the farm more congenial for the boys and girls there, I would ask you to have the government remodel this item of legislation because you have the power to do that. Let them raise the postal rate again from two cents to three cents, and in doing so, save $5,000,000 to the revenue of this country. Then have the government spend that sum of $5,000,000 in extending the rural mail service through sections in your constituency, my constituency and every other rural riding from end to end of Canada.
The greatest boon to rural life in this country within the last half century has been the introduction of the rural mail. It is with great pride that I offer to you, Sir, as perhaps the father of that legislation, my most sincere congratulations, and I believe every citizen of Canada who enjoj's the benefit of the rural mail delivery will back me up in that statement. If the Minister of Finance is still determined to put two-cent postage into effect in this country I would ask him to consider the advisability of allowing us to use these two-cent postage stamps where today we have to employ a separate stamp, an inland revenue stamp. If this could be done it would materially simplify matters with business men and in addition it would help to make up in some small degree the loss of revenue which will ensue to the various postmasters throughout the Dominion by virtue of the change in the postal rate. I would be in the interest of the department and I believe it would bring in more money in the end.
I would like to refer for a moment to the question of old age pensions. It has been said that an offer, a gesture has been made. What has been the effect of that gesture? I
listened a few days ago to the hon. member for Skeena (Mr. Stork) referring to the hardy fishermen of the frozen northwestern boundary of his constituency. What a wonderful thing this pension would be for these men in their old age and their dependents? The government have made that gesture; they have raised the hopes of the aged from end to end of Canada; but when this bill becomes law. if it ever does, those hopes will be dashed to the ground because this legislation cannot become operative without the-consent of the provinces. They place so-much money in the hands of the provinces-and ask them to shoulder the balance and administer the law. Why should they place on the shoulders of the provinces this additional burden when already they are bowed down underneath loads of debt. I say to those self-constituted labour leaders of the city of Winnipeg:	If you believe that the
labouring classes are behind you in your desire for a system of old age pensions-and I believe they are-prevail upon the government to bring in a real old age pension law a pension to which they will contribute in its entirety irrespective and independent of all the provinces. If you will do that you will have behind you the support of seventy-five per cent of the membership of this House. While I do not like the legislation which has been introduced, while I do not believe it will ever come into effect in Ontario, or Quebec, or some of the other provinces, yet because of the fact that I am in favour of a system of old age pensions, I will support this legislation. We have heard a great deal in connection with the improvement in the railway situation in Canada. I could take you, Sir, into the county of Renfrew and show you how it is that the distinguished gentleman who presides over the destinies of the Canadian National rail-way system is able to produce a statement as good as the government claims it to be. In that particular district of the county of Renfrew, a thickly populated district front which during the last few years have gone-into the coffers of this government and the provincial government thousands and thousands of dollars of lumbering operations and other general business carried on in that section, I could show you two points a distance of fifty miles apart where it takes four days to make the round trip on the Canadian National railway. This has been brought about by the cutting down of the service

and no doubt this is typical of many other sections-to such a point that it is absolutely useless; we would be better without such a service at all if we could have these tracks

The Budget-Mr. Maloney
taken up and a good automobile road built throughout that district. If he has been following that plan throughout the country it is little wonder that expenses have come down, but when travelling from city to city in eastern Canada one does not see any evidence of anything of this kind. What one finds is one train trying to be better than another, and there is a multiplication of trains from day to day.
My hon. friends to my left have been promised many things by this government, and no doubt they have been assured that everything from their standpoint will be ideal in the days to come. I would ask my hon. friend from Brandon to take to heart the words of that old French poet:
Kings' promises are airy dreams
And scarcely la9t between the day's extremes.
The great trouble in Canada to-day is lack of stable government and the want of confidence on the part of the people in this adJ ministration. If there is one thing more than another that we require in this country it is a government in office such as the people can trust. But the government of the day, through its Prime Minister (Mr. Mackenzie King), has broken faith with the Canadian people. The right hon. gentleman broke faith with them in relation to his Richmond Hill speech, and again he has failed to keep the pledge he gave them in the Speech from the Throne. I say therefore that it is his duty to resign.


Mr. FORKE:: Oh, oh.


Martin James Maloney: Canadian said some time ago that what Canada needed was a fiscal policy, relief frcm burdensome taxation and immigration. I believe that the reduction of $25,000,000 in these troublesome and burdensome taxes will make Canada a more attractive place to live in and will be a great step towards the realization of these three aims.
A good deal has been said since I came into this House as to the desirability of establishing industries. The hon. member for East Algoma (Mr. Nicholson) pointed out that St. Paul and Minneapolis had increased their population, providing a market for the farmers, to a much greater extent than had Regina, Swift Current, Moose Jaw and Prince Albert. Another hon. member argued that we should first build up the cities, and the rural communities would develop later. We tried that in the west, and if you go to any of the Canadian cities mentioned you will find a number of deserted, shut down and neglected factories. Medicine Hat is perhaps better endowed by nature as a manufacturing centre than any of these cities, but a number of industries have started and failed there. It was not a question of protection; it was not because of lack of capital; they failed because there was no market to absorb their product. These industries will be built up and will prosper some time, but not until the general development of the country provides a market for their products. You cannot build a tower without a foundation, and you cannot build an industrial city without a market.
Having in mind conditions as they actually exist, I believe we should trade with other countries in order to get a market for the products of our farms and factories. As a person uses six bushels of wheat a year, it would take about seventy million people to consume our surplus wheat production, and as a person uses sixty pounds of beef a year, it would be necessary to have thirty additional cities the size of Hamilton, Ontario, to consume the cattle exported last year.
It has been asked in this House why Canada should have a low tariff when every other country in the world has a high tariff. I do not believe all the people in the world are in favour of a high tariff. I have here a resolution which was passed unanimously by the Congress of International Chambers of Commerce at Brussels last year. At this congress were represented thirty-five nations, by their leading bankers and commercial magnates. The resolution is as follows:
The chamber has directed attention to interferences with the return of normal trade conditions and employment caused by artificial barriers, obstructive to intercourse between the nations, such as extreme tariffs, unreasonable customs regulations and 	,
restriction on transportation. All of these have the effect of increasing the delivered cost of goods and preventing the widest possible distribution and use of the world's products, which are the basis of better living standards and progress. The chamber appeals to the business men of all countries to study these questions, and to exert their influence for the removal, as promptly as possible, of all unnatural and uneconomic restrictions of this kind.
I believe, Mr. Speaker, that agriculture is an industry which must be carried on with a very small margin of profit, and in the past the farmers have had to pay too much for the things they have had to buy. It has been stated in this House that prices may be low even though the tariff is high, but experience teaches us that the opposite is usually the case. There is not sufficient competition to assure us that the prices will be right if the tariff is very high, and although the last speaker referred to the possibility of fixing prices, no one has suggested any practical way by which the prices of the dozens of varieties, of the hundreds of articles used in this country could be fixed. It would therefore seem that the tariff is the best method of keeping prices low and preventing exploitation. A few articles may occasionally be sold at a low price if the tariff is high, but all articles must always be sold at the right price if the tariff is low because outside competition will force them to be sold at that price. Therefore, the first casualty resulting from putting on a high tariff would be the exhausting of the purchasing power of the people of the country and the stifling of the basic industries, and the second casualty would be the destruction of the market which the manufacturer had enjoyed for his goods.1* I have listened with a pretty open mind to the discussion which has taken place in this House, and I have heard it argued repeatedly that we are exporting raw materials and bringing back the finished products. I have looked up the records for 1914, 1922 and 1925, and this is what I find: Take our dealings with the Argentine republic, for instance. We exported manufactured goods as follows to the Argentine republic:
Exports to Argentine Republic
1922	1925
$ 293,900	Rubber goods	$1,234,0481,104,156	Agricultural implements	4,125,943470,291	Sewing machines	1,110,315558,389	Automobiles and	parts	2,242,906
Our total exports to the Argentine for 1922 amounted to $3,233,423, and for 1925 to $10,322,373, an increase in the three years of about $7,000,000. There were also other manufactured articles such as razors, iron pipe and tubing, nails, copper and structural steel that we exported.

The Budget-Mr. Gershaw
Now let us test it in another way. Take Italy, for example. We export a lot of flour to Italy. In 1925 we exported $514,660 of flour to Italy, or more than our total exports of all commodities to Italy in the year 1914, when hon. gentlemen opposite were shaping the destinies of this country. Our exports of fish, canned and dried, to Italy in 1925, amounted to $1,568,419, or three times the amount of our total exports of all commodities to Italy in 1914. Now I submit that if we found a market in Italy for fish to that extent, our fishermen were that much better off, because their purchasing power was increased, and as far as the manufacturer was concerned, it was better for him that we shipped this fish to Italy because thus the Canadian market for manufactured goods was enlarged, and the manufacturer found a larger market for the sale of his products.
We might follow this record of our increased trade through the entire list of countries with which we do business, and we will find exactly the same condition existing. Everywhere we are extending our markets for manufactured goods. The increase in the export of a few manufactured goods between the years 1922 and 1925 is shown as follows:
Manufactured Goods Exported
1922	1925
$4.061.S09	Rubber goods	$11,458,4585.345,308	Agricultural implements	11,342,712
If you take sewing machines, vehicles, including automobiles, razors, pig iron, and machinery other than agricultural implements- in all these cases you will find that our export of manufactured goods is rapidly and progressively increasing. This is good business for us because it helps to increase the purchasing power of the people of this country, just as the lowering of the tariff, which makes prices lower, helps to increase the purchasing power of the people.
During the election campaign last October our Conservative friends said that the Liberal policy was all	wrong. They said that we
were sending our raw products to the United States to be manufactured, and importing manufactured goods from that country. Since I have come to Ottawa I have taken the trouble to look up the United States Statistical Abstract and I find that the United States are shipping out a great deal of stuff in the raw or unmanufactured state, as follows: 1922	1925
Raw materials.... $1,445,000,000	$1,876,000,000
Partly imanufactured..	..	1,035,000,000	1,223,000,000Manufactured	
1,210,000,000	1,670,000,000
You will note from these figures that the United States is sending out quite a bit of stuff in the form of raw material. You will
note also that she made a marked increase in the export of raw materials in 1925. Why do they do this? Every country in the world exports raw material, and they do it because it pays them to do it. Britain exports coal, and buys cotton; Canada exports wheat, and buys crude oil; the United States exports cotton, and buys wood and oil. Nations, protected or otherwise,	no matter what their
tariffs are, must trade with one another. Let us see what Canada is doing in this regard. The following table shows our exports to the United States for the years 1922 and 1925, in round figures:
1922	1925
Raw materials	$108,000,000	$140,000,000Partly manufactured	..	..	72,000,000	115,000,000Manufactured	
111,000,000	160,000,000
You will notice that in the three years our exports to the United States increased by $125,000,000, and of this $32,000,000 was accounted for by raw materials, and $93,000,000 by the increase made in the export of manufactured, or partly manufactured, goods.
Some hon. gentleman opposite have said that they can see very few signs of prosperity in Canada. One hon. gentleman a short time ago mentioned the fact that prices of Canadian stocks and securities had risen very greatly since 1921, and some hon. gentleman opposite pointed out that that did not necessarily mean prosperity, that it might mean capital was very timid and that people wished to invest in these seasoned securities. I think there is very little to justify that view. In the Financial Times of May 7, 1926, I find this:
The gross earnings of 65 Canadian companies reveal an increase of $25,000,000 over those for 1924.
From a shareholder's point of view, the extent of the improvement is more exactly reflected by the improvement in average earnings on the common stocks of the companies under review. A gain of over 21 per cent on the average outstanding common capitalization is shown with earnings equivalent to an average of 11.5 per cent as compared with earnings equivalent to 8.9 per cent during the year 1924.
Surely if the stock of these companies is advancing so rapidly in price, and if they are able to show earnings of 11.5 per cent in 1925 as compared with 8.9 per cent in 1924, these large industrial concerns are doing fairly well and do not need the help which hon. gentlemen opposite would have us believe.
I believe that the budget will meet with the approval of the Canadian people because it is helping those who have the best right to that help, and I believe that it will not interfere with the prosperity of the large industrial concerns. I think that the policy behind this budget is one which is bringing about a fair share of prosperity, is bringing about national well-being, and above all, what
3246	COMMONS
The Budget- Sir Henry Drayton
we all most earnestly desire, national unity. I believe it would 'be fatal for the people of Canada to execute a right-about face in the tariff policy at the present time and embark upon a policy which is more likely to act as a wedge and separate the various parts of this Dominion.


Henry Lumley Drayton: Mr Speaker, I desire in the first place, to assure my hon. friend the Minister of Finance (Mr. Robb) that I regretted exceedingly not being able to be here to listen to his very interesting budget and to have a first hand opportunity of saying something about it. In the second place, I wish to thank the hon. member for South Wellington (Mr. Guthrie) for the very excellent presentation he made and the criticism which he gave of the budget, a criticism which has never yet been answered. I gaze upon the Finance Minister with absolute amazement to-day. I am simply astonished that my hon. friend could be so right and at the same time so wholly wrong in such a short document. The minister is exceedingly right in some things he has done. He is exceedingly right, for example, when he gets rid of his receipt tax. His supporters too are exceedingly right when they refer to the taxes that have been got rid of as "nuisance taxes," taxes for which this government are responsible to the extent of one hundred per cent. In things like that the Finance Minister is absolutely right, but in many instances he is hopelessly wrong. I do not blame him, I do not think anyone ought to hold him up to censure, because at one time he had four portfolios to look after. I think the number he is administering now is three, and he has just had a chance at the budget when opportunity was given him, a chance snatched between runs from one department to the other. Then my hon. friend has other arduous duties to perform in keeping things straight around the Privy Council.
Just let us see how hopelessly wrong one can be sometimes. Let us take the income tax, for example. When my hon. friend introduced his budget he told us that all his proposals were in a downward direction. Times have been so good and the present government's administration has been so prudent, of course, that there is no suggestion of an advance in any direction. Every single step was toward a reduction. Then my hon. friend went on to say that he was making these reductions with a desire to make available new money for development. With this object in view he stated he proposed reductions all along the line. I pause at this stage to make this observation. If I had for one fMr. Gershaw.]
moment thought that the minister knew anything about these proposals I would have said that he was deliberatly deceiving the House and the country. But I do not make that charge. The department have drawn up these resolutions, they have prepared the new schedule. I do not know whether my hon. friend found time to read over his proposals or not, but I do know that he, like the rest of us, now knows that very large increases have been made in income taxes. There is no secret about it at all. We all know that a very large part of development, not only of this but of every country, is carried on through the activities of companies and corporations. Nevertheless my hon. friend doubles-well, you cannot say doubles exactly because all these things depend upon the incidence of the rate of taxation having regard to the assessment of an individual-but he practically doubles the taxes on the dividends of these companies. The Liberal policy here -I think it runs pretty fairly true to Liberal policies generally-is this: We want to secure new money for development, and in our endeavour -to secure new money for that purpose we propose to tax the capital so used at a higher rate than is imposed upon any other capital. We want to increase business, we want to increase development in the country, and so we are going to give those interested in development the opportunity of just paying double the taxes Which they would pay if they did not do anything to develop this Canada of ours. That is how this budget works out.
I ask my hon. friend this question:	What
is the capital in Canada that does the most useful w-ork? If my hon. friend answered fairly he would say "The capital which is supplying employment, the capital which is developing the country, the capital which is making the factory chimneys to smoke and the whole countryside to function." And my hon. friend would also say "There are two classes of capital. There is that class of capital which works for the country, and there is the capital that takes no chance whatever, the capital that exists in tax-free securities, the capital that is to be found in first-class mortgages, the capital that is to be found in bonds, the capital that is to be found in real estate and which depends entirely on the unearned increment from that real estate." There you have a different class of capital. No one who is either serious or honest will deny that the capital -which is desired, the capital which is of use to the country, is the capital which is engaged in the country's development and industrial work. The minister is applying a

The Budget- Sir Henry Drayton
double rate of taxation to useful capital but it is absolutely impossible to comprehend how, when applying the double rate of taxation, the minister can make the claim that it is being done for the purpose of aiding development. The thing is absolutely inexplicable unless the explanation is this:	That one
method of taxation may be temporarily popular and the other unpopular, and that all ordinary financial rules applicable to such a situation are to be swept to one side for the purpose of temporary political advantage. I am afraid the departmental officials did not fully instruct the Minister of Finance as to what they were doing.
My hon. friend claims there is a reduction in taxation of $25 000,000. Is there? We have not had any particulars at all as to how that reduction is made up. I am not going to ask my hon. friend for them now,
I do not suppose he has the data with him. He takes what the department has given him and, as I said before, he is running three departments; he has not had time to inform himself as to the details. But just let us see how this matter works out. Last year the companies were taxed to the amount of $31,091,274. That was the sum of money received from them, out of a total tax of $55,248,042. That means that we took out of these companies, whose dividends are now to be taxed twice, more than 55 per cent of all the money raised under our income taxation. We are told that there are no increases in this budget or in this taxation, while as a matter of fact we know that there are many cases where the rate of taxation is doubled as a result of these proposals. Setting aside the individual instances, let us consider the situation having regard to the statement made that the country is getting the benefit of the $25,000000 reduction. We took over $31,000,000 from these companies under a tax of 10 plus 5 per cent. That would make practically lOJ per cent and would mean that the earnings on which those taxes were levied approximated $300,000,000. Now I admit at once that all that money does not become subject to a double tax. It is only the amount of the company's earnings paid out in dividends that becomes subject to the double tax. All company earnings are now taxed under the budget 9 per cent instead of 10.5 per cent under the old law. Everything is taxed, but it is only the dividends that are subject to the double tax. It might be thought to have been entirely wrong. I am not now justifying it. It is true that I enforced it. It is true that I administered an act which is exactly the same, but it may well be asked, I admit, what is the fairness
of taxing companies on their total annual earnings, when a large amount of those total earnings have to be put back into the business for the purpose of carrying it on, and when the directors think that only a certain moiety, say 80 or 90 per cent, can safely be paid out in the form of dividends? I am not raising that point at all. That system continues. That is common, if it be an error, to my hon. friend, to myself and to our predecessors. But allowing for the difference between the $300,000,000 of earnings and actual dividends, I think my hon. friend will agree that $250,000,000 would be a fair amount to look upon as the dividend paying power of the companies and corporations in this country. I do not know whether my hon. friend has the information. If his department had not the information at the time they brought down this resolution and placed it in his hands, I should think they would have it now, so that they would know what they were doing, but I submit $250,000,000 would not be so very far out. Taking $250,000,000 as the dividend paying power of the companies in Canada, what are we assessing? I am aware at once, Mr. Speaker, that Canadians unfortunately do not own all those dividends or all that stock. In the year 1921 a return was brought down by the statistical department which showed that the amount of American holdings in the stock and bonds of our companies was considerably under a third. In 1920 a similar calculation was made by an American authority-my recollection is that the author was Mr. Fels
__where it was shown that Canadians owned,
. of their own investments, stocks and bonds in companies, over 64 per cent, the American holding being under a third, the balance being taken up by the British holdings and the holdings of other nationals. I am aware that in the last few years it has become a practice-well it is not a matter of declared government policy but it is a matter of the continued and continuous and everlasting handing over just a little bit more and a little bit more, a bit of Canada here and a bit of Canada there, this factory _here and that market there to the United Slates. That is the practice of this government, and the fact is that it has been the practice of this country, irrespective of any government, to a far greater extent than it had any right to be, but this government most markedly have never yet properly appreciated the necessity of a policy looking to the development of Canada for Canada, and by Canadians for Canadians. They have never yet got down to it, the trend has been much more marked and it is going on more and more all the time.
324S	COMMONS
The Budget

 Sir Henry Drayton
I am not prepared to say that the third of American holdings that I referred to is not now a half; it may be, but I hope it is not. I have not the recent figures but surely again it is not out of the way to assume that Canadians to-day hold 50 per cent of the stock and bonds in their own companies, and if that statement be correct, just see where the Minister of Finance finds himself placed in connection with his so called reductions. The reason why I am differentiating between Canadian and other holdings is that, as I understand it, it is only the Canadian investor who is subject to the double tax. If I am wrong the minister will correct me. Very well, I am cutting the dividends down then to $125,000,000 as against $250,000,000, and we have then under these proposals increased assessable wealth amounting to $125,000,000, to be assessed double for the first time by a government that actually claims its proposals are all reductions. The return to the government will depend entirely upon where the moiety and the average of the dividends will be assessable. If it is to be found in very large incomes, the increase in revenue will be enormous. If it be found on the other hand in the lower income the increase will not be as great.
My hon. friend will tell me at once if I am wrong in the figures which I take. This is only an estimate, a guess; it is impossible for anybody who is not in the office to do anything more than guess. But suppose we find this result that, out of the increase, this extra $125,000,000 of assessable wealth falls on the average within the class of incomes which, after all exemptions and allowances' for children, are taxable at $7,000, and we find that the average of the whole is to be represented by incomes of $7,000-in that case-and I do not think I am putting it at a very high figure-the rate would be seven per cent under my hon. friend's proposals. He will check me if I am wrong and I have not properly understood him although I think I have. The new revenue collectable would then amount under this budget that is supposed to be doing nothing but cutting taxation, to an extra tax collected from the people of $8,750,000.
Let us take another figure. If it be found that the average assessment in respect of that tax falls within incomes of the $10,000 class, the rate would be ten per cent and the extra taxation collectable from the people of the country would be $12,500,000. I do not know what information my hon. friend has as to where that average is to be found; but I know that if the average is where I suggest that will be the result, and I know that

irrespective of where it may be there is a very large increase in this item of income taxation directed by this government against an interest, a public necessity, namely, that of development which at the same time they are saying that these proposals are taken in ease of. I think my hon. friend will pardon me when I say that I look upon him with all amazement as being so absolutely right when he is referring to his nuisance taxes and the like, so absolutely wrong when he is referring to the effect of his proposals and the larger aspects of this case.
One question which I think deserves more than passing notice is raised by this budget: Have the people of this country, have those doing business in this country, the right to take the word of the government, the word of the Prime Minister as meaning anything? Of all the different ways in which pledges may be given by governments I would have thought that a Speech from the Throne would be one of the most positive, but I am not now referring only to that. We have the statements made by the leader of the government at Richmond Hill; we have the Kingston speech also made during the election campaign and many others. I am not referring to one thing by itself; but if there be anything which one would think ought to be observed it is the considered statement of the government, not made in the height of a political campaign, but contained in the Speech from the Throne. I bring this up not only because I think it is an absolutely vital matter, but because in bringing it up I desire at the same time to answer again statements which have been made by the leader of this government and other ill-advised supporters of it in connection with what occurred in 1921.
In 1921 there was a Speech from the Throne in which the statement was made that the tariff would be revised. The tariff was not revised, not because of any intervening action taken by the government, not because of any intervening question of political expediency which might affect the government, but simply and solely, as was stated at the time, because the United States government were considering whether they would make permanent or not tariff items which we rightly or wrongly thought to be very disadvantageous to this country and we were told from Washington that if we took that action which any self-respecting Canadian government would take on the assumption that those were to be permanent taxes, we might afford a further excuse for making these taxes permanent. I am going to refer to the reasons which were then given.
I do this because whenever this government have no defence-and it is very often they

The Budget- Sir Henry Drayton
have no defence; it is only an accident when they have one-their whole plea is that somebody else did it-the tu quoque argument.
A pledge was given by this government that there would be no interference in tariffs except on the report of the tariff commission. If that was not to be considered as a pledge, what was the reason for appointing the tariff commission? Was the only justification for the appointment of the tariff commission to give political friends salaries with empty offices and thus pile up expenses on the people? Or was the idea, as that pledge would indicate, that the tariff board was to function, and that no changes should be made before an investigation had taken place? This is not the only breach of faith on the part of the government which we have had to point out. This is not the only instance in which a promise has been given only to be broken. We have pointed out the same thing before, and always the answer is a shrug of the shoulders and " Oh, yes." And that is all. In 1921 there was a budget speech, from which I shall read. The tariff was going to be amended and it was not.


James Alexander Robb: Hear, hear.


Henry Lumley Drayton: My hon. friend
says "hear, hear." This is his whole case. This miserable attempt has been made throughout the country ever since to make a case for disregard of promises out of the fact that the tariff was not altered at that time. Now I am going to ask the minister if he can fairly take exception to one single word that I shall now read. He cannot and I know he will not. I am reading now from the budget speech of 1921, dealing with this very question of the tariff.
The tariff deals with international business and the proper interests of the country can only be considered in the light of international business and the tariff laws of other countries.
Does my hon. friend object to that? Can anyone object to it? If so, we ought to find quarters for them in some other place.


An hon. MEMBER:: The Senate.


Henry Lumley Drayton: No, it will not be the Senate; we can find cheaper quarters for people of that sort.
It is idle to attempt to disguise the fact that any proper Canadian tariff must have consideration to the settled tariff conditions obtaining in the United States.
Does any hon. gentleman want to object to that? I think not.
Of our total trade of the past year 57 per cent was with the United States. Of total imports of $1,240,125,056, those from our neighbour to the south were $856,593,470 or 69 per cent of the whole. As already
pointed out, temporary tariff legislation of the United Staties would place a barrier against our exports to that country amounting to no less than $168,000,000. Such or similar action made permanent, of necessity, would require a careful and thorough revision of the Canadian tariff for the purpose of ensuring the proper continuance of Canadian business-of ensuring employment and Canadian stability-a matter of gravest moment to all classes of our citizens, of moment to the farmer as well as to the industrial worker, of moment to the farmer because of the home market-
Of course my hon. friends will not agree with that.
-always of importance and value to him, would become in view of the action of the United States and of the difficulties of financing overseas sales, more important than ever. . . . Under the circumstances, having special regard to the fact that there ought not to be a general revision of the Canadian tariff now and another after the close of the United States congress, no action will now be taken.
There is the reason no change was made at that time. And what did Mr. Fielding have to say on the question? At page 3154 of Hansard of 1921, he says:
I notice that the Minister of Finance made a very brief reference to the condition of the American tariff, though I must do him the justice to say that he treated it with more gravity than some people do. There are people throughout Canada who flippantly say that they do not care what the American tariff is.
Mr. Fielding did care, and so did I. And for that reason the government of that day was determined that in face of that temporary legislation which congress was considering making permanent, as un-5 p.m. fortunately has happened since, nothing would be done by this country which could for one minute afford the slightest excuse to any action that might be taken by the United States to our detriment. That is why no change was made in the tariff. It was not a question of the exigencies of Canadian politics nor was it a matter of making a concession for votes which otherwise we should not get. There was no suggestion of having to make appeals here and overtures there, for the fact of the matter is that we rather lost support. But what we did we believed to be the right thing and that is why we did it.


James Alexander Robb: Did not Mr. Fielding conclude his observations on that day by moving an amendment?


Henry Lumley Drayton: My hon. friend is perfectly right; certainly he did. Throughout his speech he took the view that irrespective of the general conditions at that time it would be a good thing to get the Union government out of office, and he moved accordingly. How much real sincerity there was in the amendment my hon. friend will find if he consults the budget of 1922. Therein
3250	COMMONS
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 Sir Henry Drayton
he will see exactly what Mr. Fielding thought at that time.
The shocking thing about the automobile reduction is that it seems to indicate on the part of the government a state of mind which evidently is above all ordinary considerations of honour or honesty. The government can say what it likes and promise what it likes and can change its mind just as it pleases. Furthermore, the tariff reduction in the case of automobiles exhibits the government's absolute disregard of consequences. I want the minister to correct me if I am wrong, but I have noticed in the public press advertisements showing that the tariff duty which the industry enjoyed before was not a net duty. Last session I took occasion to point out to hon. gentlemen, with much deference, that none of them knew anything about the tariff, for not one of them could tell me what the net protection was under any item contained in the schedule. We have had some light since. We have had Mr. Deachman's articles, which apparently constitute the only expert opinion the minister has received apart from certain references he has made to what the Chief Conservative whip and some others have said. But Mr. Deachman never pointed out what the net tariff was, and I notice the statement in the press that the net protection which the automobile dealers received before was 17 per cent. Did the minister inquire into that assertion and find it wrong? The net protection was 17 per cent as against an apparent protection of 35 per cent. Does my hon. friend quarrel with that? And what is the net protection which the minister is now giving with 20 per cent? Now, so far as the budget is concerned the net protection was never considered by the minister; I do not think I am unfair when I submit that it was never taken into account by the government. The item looked big and the manufacturers appeared prosperous, and there are a certain number of people who always like to throw a brick at anyone who they fancy is prosperous. The minister, I repeat, did not know what the net protection was, or at any rate he did not take it into account. If I am wrong he will contradict me. He does not contradict me, so that the government apparently has brought down these changes without knowing what the net protection was which the automobile industry was receiving, and without knowing what it was doing. They are learning now; they are getting the information, which should have been first obtained. It is quite possible, of course, for the government to do with the automobile

industry as they did with the farm implements business. It is quite possible for them to cut down the tariff on the one hand but by concessions, free materials, sales tax and the like not only to make up the cut, but even to exceed it. I do not know that the government intend doing that, but I want to point out that there has been a great change in industry since the war. I have in mind at the moment two factories operated in the same interest which, before the war, made carriage wheels. When the war started, in response to the demand for munitions these plants were converted into the making of shells. The war being over they were then converted into factories making automobile hubs and axles. They had to borrow money, something in the neighbourhood of 8450,000 if I remember rightly, in order to make that change. That firm is going to be wiped out as things now stand. Why should it be wiped out? Let us get some reasons. It paid $50,000 a month to Canadian workmen.


Mr. MANION:: Did it pay dividends?


Henry Lumley Drayton: Besides paying that amount it paid taxes to this government and to the municipalities, and for seven years paid no dividend whatever; last year a dividend of 5 per cent was declared. The minister did not know what he was doing; that is the real truth of the matter. He never deliberately set to work to injure such plants doing business, not in the manufacture of automobiles but in the making of parts. They were trying to develop this country; trying to give work to Canadians, trying to do just what the minister says he is trying to do in this budget, in reducing income taxes-make it more easy to get money for the development of Canada. But what he is doing is making sure that some of the money already obtained for our development will not be worth very much when he is finished with it. It is a serious thing if the people have not a right to accept the word of their government.
I know that great claims are being made by this government on the ground of the return of prosperity; I think my hon. friend calls this the " prosperity " budget. If he had really been seized of conditions and of what he was doing I think he would have called this the "gold brick" budget, instead.
Let us see where the prosperity is, and if we can find it. With those who have studied conditions I think it is common ground that following the war, deflation set in, reaching its culmination in 1921. During that time we went down and down, not only in Canada .

The Budget- Sir Henry Drayton
but practically throughout the whole world. The great United States had then not a few but hundreds of thousands, even millions of people out of employment; everyone felt it. That is surely common ground with both my hon. friend and myself. Does he deny it? I do not think he would. He certainly should not, and with his knowledge of the subject I am quite confident that he will not. Neither will he deny that that deflation was inescapable; it was forced on the country and was not the result of any governmental measure. We struck the bottom in 1921 and, in common with the rest of the world, began to pick up in 1922. There was progress everywhere; not very much in Canada, but a little.
In 1922 we had the first budget of the King government, in which were made irritating little changes here and there, although the budget did not really amount to anything one way or the other. The only bad thing was that it indicated a trend of policy dangerous to the country, dangerous to industry and to capital; it was an unsettling budget. There were no serious cuts; we used to call it the 2J per cent budget, but the underlying ideas and the statements made in the House were unsettling, as a result of which people thought it was not safe to go on and expand business. My hon. friend will also agree that that is not altogether a Conservative thought; that others than Conservatives knew that fact. The Right Hon. Mr. Fielding, in his budget speech of 1923, stated:
Business men do not' like to be always threatened with changes in the tariff.
He recognized then that business stability, which he desired, could not be obtained without tariff stability, and he further stated:
Speaking broadly, it is possible to give the country a reasonable assurance of stability of tariff. Such assurances are very desirable, for no business man would care to enter upon enterprises which may be brought into peril by frequent tariff changes.
Such statements are, of course, merely obvious truisms. Everyone knows them; everyone with any knowledge of business or financial affairs is fully aware of them. The country did not need to be told by the right hon. gentleman, but people were glad to get that assurance; the country quickly responded to this statement of policy, and conditions in 1923 improved.
Our return to normal conditions, Mr. Speaker, has always been held up from time to time; that has. been the trouble. We had a proper policy laid down, by Mr. Fielding in 1923 "tariff stability" and we had immediate action, with business starting to pick up again at once, with a greater volume of production. The
trouble is that we are always being halted and thrown back through this government forgetting all about pledges and statements. Under this government pledges were only made to be broken. We had a period of tranquillity and stabilization in 1923, but my hon. friend brought down his famous "death knell of protection" budget in 1924, and oh, what a year that was! Any member of the House who has followed things at all knows that 1924 was a very bad year. Conditions were better in 1923, but in 1924 the famous "death knell of protection" budget was introduced. Now this year the Minister of Finance says:
Nowhere are the results-
When pointing to the country's growing trade:
Nowhere are the results of this growing trade more accurately reflected than in the increased earnings of Canadian railways and in the annual statements of Canadian financial institutions and Canadian industrial corporations.
The minister is absolutely right in his reference to railway traffic. Railway traffic is an excellent barometer. The best barometer we have to-day, so far as this House is concerned, is found in the reports of our own ralway which have, been considered by committees of this House, and with which the hon. member for North Waterloo (Mr. Euler) is very familiar. He will be able to tell my hon. friend that he is entirely wrong from his knowledge of what the country did. He will be able to take the minister's barometer, the minister's yardstick, and say to the minister: Yes, there was nothing wrong done in 1925 as regards the tariff-some of the few still sane members of the Liberal party on fiscal questions saw to that-there was nothing wrong done as regards the tariff in 1925, and the country starts to pick up. We gained, certainly wre gained in 1925, just as wre gained in 1923, just as we go off in 1922, just as we come on after the pledge of the Right Hon. Mr. Fielding that there would be no more of this nonsense. We go down again in 1924 just so soon as notice is served on Canadian industry to get out, that the first step" has been taken. Then we have the reassuring budget of last year the effect of which was to increase the customs duties by approximately $1,000,000. Then when you get the country responding and going ahead again, my hon. friend the Minister of Finance this year tries to see if he cannot put another kink in that progress.
I said the hon. member for North Waterloo could show how wrong the minister is in thinking that the Canadian National figures
3352	COMMONS
The Budget- Sir Henry Drayton
showed great progress. Let us see. This government always says that it has nothing to do with the management of the Canadian National Railways, and of course it has not, except sometimes when certain matters are up, perhaps a by-election here or a by-election there, and then they seem to get a little bit of assistance, which we do not think is quite right. But speaking generally they have nothing to do with the railway.


James Alexander Robb: Just what does my hon. friend mean when he says we get a little assistance when a by-election is on?


Henry Lumley Drayton: Let my hon.
friend just ask the minister next to him, the Minister of National Defence (Mr. Macdonald), and if his memory is good-sometimes it is bad-he will be able to tell him as to the political disclosures of certain reductions in rates in Nova Scotia which came very conveniently for a certain election.


Mr. MACDONALD (Antigonish):: Not at all.


Henry Lumley Drayton: My hon. friend's memory is bad; I pass on.
There are two propositions here, Mr. Speaker. The first proposition is that the government has absolutely nothing to do with the railway net figures. The government can claim credit if, as a result of government fiscal policies, new industries are set going and there is increased production. It can claim credit for the gross revenue of the company, though most of the credit is the fields', I admit. If the traffic goes up markedly, the government can say: Look at this traffic; it shows the country is going ahead very well under our regime. The Canadian National figures dhow a drop in 1924 as against 1923 of 4,749,721 revenue tons. The yardstick of the railway's activities in freight, namely, the ton miles of revenue freight, fell off 1,613,998,426 revenue ton miles, and as a matter of fact there was a reduction in gross railway revenue that year of 117,547,305.
In 1925 the attack on Canadian industry ceased for the time being. With practically no tariff changes, the country starts to function better, and just here let me point out one peculiar thing which I commend to the study of the hon. member on the other side who has particular knowledge of the railway situation. This country really starts to get on its feet and get going when the government cannot function. If there is any moral to be drawn from last year it is that this government is of no help, but a danger to the country when it can function, but when it cannot function; when it is in dry dock wait-
ing for repairs; when 8.O.S. calls go out to the west and the embattled farmers are not here yet, and when the Governor General will not sign orders in council for them, the country starts to go ahead and do well. The moral is there; the facts also are there. Well, business improved in 1925. Does my hon. friend think business ought or ought not to improve having regard to the distance that Canada has travelled from the universal cataclysm of the war? Does he not think so? Does he not think our curve should be up? Does he not know it? If he thinks so, just let us see what he is doing when he refers to these railway figures. It is perfectly true that the railway figures my hon. friend has in mind show a net income of $32,264,414 in 1925 as against an income of $20,430,694 in 1923, but the hon. gentleman when he saw those figures forgot that the government had not anything to do with them, and that the whole betterment-did the hon. member for Rimouski (Sir Eugene Fiset) say, Hear, hear?


Sir EUGENE FISET:: No. You are
stretching your imagination.


Henry Lumley Drayton: Perhaps the hon. gentleman just yawned. He is a good yawner.


Eugène Fiset: It is not surprising either.


Henry Lumley Drayton: I admit that
some gentlemen would like to forget that the whole of that betterment is the result of economies in the administration of the railways and notwithstanding smaller revenues. The whole claim my hon. friend makes to improvement is to be found in those figures, and they are the only railway figures that will give him any comfort. I say there was less traffic, yes, less gross revenue and less traffic; for the Canadian 'National Railway statement shows that in 1925 the revenue was $244,971,202, while for 1923 it was $253,000,000 odd. What had this government been doing to the country in the meantime? Well, they had been playing with their tariff reductions. Instead of there having been progress from 1923 onwards there has been retrogression. Let us take my hon. friend's own yardstick, the business activities of the railways, and let us see what they disclose. They show a decrease in gross revenue of $8,164,285. It may be said that some of the orders made as to rates are responsible to some extent for that reduction. But that would not be true in the case of tonnage. In 1925, the great year of prosperity, according to my hon. friend, there was, as compared with 1923, a drop in revenue tonnage of 2,249,081 tons. There was also a drop of 519,614,436 ton miles of revenue

The Budget-Sir Henry Drayton
freight in that year of alleged wonderful prosperity. And the figures of our railway are confirmed by the government's own figures. The Dominion statistician has issued a report on railways, including of course the National railway, and that Shows a total freight of 103,75i,559 tons in 1923 as against 96,239,379 tons in 1925, a decrease in Canada's activities in 1925 as against 1923 of 7,518,180 tons. Perhaps I am wrong in using the expression "Canada's activities"-


Mr. EULER:: Could not some of that reduction be attributed to the fact that the railways encountered motor truck competition?


Henry Lumley Drayton: Ah! The motor truck is always with us. I did not notice that the minister said very much about that when he was dealing with the railways.


William Daum Euler: It is a fact though.


Henry Lumley Drayton: We have to consider also the through traffic, but there is not much difference there; at any rate the difference seems to be fairly proportionate. I have not worked out the calculation myself, but looking at it roughly I do not think the difference would amount to a great deal. I have just taken the figures which the statistical department gave me as to the gross tonnage, and the hon. gentleman will agree with me that there is an astonishing falling off.
My hon. friend has been drawing certain conclusions from certain trade statistics. As to that he is right; the trade statistics standing by themselves are good. But taking his own figures as to the activities of our railways, and these trade figures, can they both be right? It is true that we are exporting much more than we formerly did, but do these figures alone indicate national prosperity? No, Canadian labour has not enjoyed its proper share of trade. The prosperity of the country, outside of certain lines, is unfortunately more fictitious than real. I put these questions to the Minister of Einance: Does he think that a country can really be said to be prosperous that has a diminishing home market? Does he not really think that it is a great thing to have Canadian labour employed and to have a large national payroll? I think he does. I think he would agree with me that no country can be said to be really prosperous whose home market is diminishing. The minister's own figures prove the truth of what I say. Taking his own yardstick as the gauge of prosperity, namely the business done by the railways, we find that we had less production 14011-207
in 1925 than we had in 1923. Can there be any doubt about that? The minister's budget speech, yardstick, shows it so there can be not much doubt about it. Our exports for the calendar year 1925-and I take the calendar year because our railways follow the calendar year-were 8254,569,672 greater than they were for 1923, and at the same time our imports for 1925 were less by 812,763,167 than they were for 1923. Smaller production, Mr. Speaker, with increased exports and lessened imports, indicate no general prosperity. Will my hon. friend claim that it does? Can anyone claim honestly that it does? Let me state it again. This is what the minister has proved:	There have been increased exports
and lessened imports. But smaller production, with increased exports and lessened imports, does not indicate general prosperity. What does it indicate? It indicates lessened domestic activities, a shrinking home market, a shrinking national pay roll-what else can it indicate? We might just as well be honest with ourselves-what else can it indicate? Here is the home production that much less. Here is that enormous increase in exports, and lessened imports. What does it amount to except that the great buying power of the country, which is always the wages of the masses, is not here to make its home purchases as it did in 1923?
Again, is this condition not another indication of what the exodus of our workers really means? I admit at once that certain price modifications will be found. In 1923 our wheat prices were not as good as they were in 1925. Therefore we got more dollars for tonnage exported in 1925 than in 1923. But that is only a modification; it does not furnish a complete answer. While we have had an increase in the case of wheat there have been declines in the case of other commodities. For example, we have had a drop in the price of paper-a very important article of commerce, as my hon. friend will admit. Does my hon. friend really think that exports, at the expense of a loss in the home market, make Canada prosperous? Does he not really know, as has been pointed out by an American authority, that Canada is borrowing? I am not now speaking of government borrowing. We never borrowed very much in New York, but eight months ago the direct government obligations of Canada, although three times as great as they were when this government took office, were small compared with the great borrowings which as a country we have made in New York. My recollection is that in 1915 or 1916, when the calculation was made, American investments



The Budget-Sir Henry Drayton
in Canada amounted to $420,000,000. I saw a statement, I think by the general manager of the Royal Bank-and it seems to be fortified by American authority-that the American investments in Canada to-day amount to approximately $2,500,000,000. Does my hon. friend not know that with the necessity for finding interest on that immense amount of money we must have larger exports? Here unfortunately we are not paying merely by these exports, increased as they are; but by the continued transfer of the natural resources of Canada to our friends to the south. Again, that a country cannot hold its own population is no indication of prosperity.
I am not going into figures which have been given before in regard to immigration. I will take the government's own figures relating to present conditions. The last I have been able to get are for January and February of this year. In January the number of immigrants entering Canada was 2,324, and in February, 4,396, a total of 6,720. As against the total immigration into Canada for the same two months in this wonderful year of prosperity, we find that the figures given by the Department of Labour of the United States show an emigration from Canada into the United States for January of 7,155 and for February 6,086, a total of 13,241 or 6,521 more than our total immigration for the two months-nearly double the number of people we have been able to get into this country, with all the millions we have been spending. My hon. friend will know very quickly when we have prosperity in this country: we will have it when we have work for the people who are here, thus obviating the necessity of their leaving. And you will have immigration to Canada when there is a job for the man who comes in. There will be immigration when money is really available for the development of the country, something which my hon. friend wishes, but which he takes such painful care in this budget to prevent.
I am now going to deal with the claim with regard to prudent administration. It is a lovely mouthful of words. I always like to take my hon. friend's own figures. He has been very good this year, in the preparation of his budget, in classifying the expenditures under different heads. He sets forth three different classes of payments which this country has to make-the principal expenditure attributable to the war, other fixed and public debt charges, and general expenditure. He then gives us the costs under those different headings which he conceives to be proper, and I am going to follow them as closely as I can.

I will first refer to the principal expenditure attributable to the war. I have taken my hon. friend's list and made out a similar list for 1921-22, dividing the expenditures as he has divided them. I have tried t-o make it so that it will be fair as a matter of comparison. For example, under the heading of National Defence is now grouped not only the militia activities but also the naval and air activities. I have put them all together, therefore, for 1921-22. In 1921-22 we collected our income tax through the Finance department; we now collect it through the Customs department, therefore I have transferred the item of the cost of collecting taxes from Finance in 1922 and put them under Customs, so that this item can be comparable. In connection with the first heading we have a reduction in cost. These war expenses in 1921-22 amounted to $179,264,098, and for the year just closed, $163,-
997,000,	a saving of $15,249,098. I wonder whether anyone who thought for a moment would not expect that? We have not had an intervening war. As we move from the war those costs go down. Take for example the drop between $9,000,000 and $10,000,000 under the head of soldiers' civil re-establishment. Does anyone claim credit on the part of the government for that saving? There simply was not another war. The number of men still to be taught by way of vocational training and otherwise is disappearing. There was no economy there; it was simply a case of less ground to cover. As a matter of fact, on fair grounds no credit whatever is to be taken by any government for the saving of that $15,249,089.
The next item is, other fixed and public debt charges. In 1922 those amounted to $27,034,553; for the past year they amounted to $31,458,000, an increase of some $4,400,000. Well that is an increase of this government, but it would be absolutely unfair to charge this government with the increase in discount and expenses of loans-just as unfair as it would be to charge the old government with the large item of premium, discount and exchange of $3,302,674 which was peculiar to 1922. Both are matters over which the administration as such had no control whatever. This administration has no control over the item which they have had to insert of $3,530,000 as against $82,636 in 1922 in connection with discount and expenses of loans. The accident is that the loans fell due and my hon. friend had to look after them. In 1922 the accident was that I had to produce a great deal of money for loans falling due in New York. My hon. friend nods his head in assent. I am giving

The Budget-Sir Henry Drayton
the government in this the benefit of $200,000 because their item is $200,000 more than mine
was.
Unless we throw both these items out I have an absolute right to take credit for making the country a great deal of money in connection with the item of exchange, because over and above every single penny paid out for premium, discount and exchange during those years of bad exchanges, we made $9,848,643. But I am saying nothing about that; it goes; it was an accident; it is something that does not enter into the details of ordin^ ary administration. I would do with that just as I would do with the other item which is against my hon. friend, namely, get rid of it. They ought both to be thrown out. The result there is that instead of an increase of $4,423,447, the real increase is only $976,083 I am not blaming my hon. friend at all in regard to it; he has added that in connection with not war pensions, but the pensions and superannuation of servants of the House. I am not saying anything about this addition of $976,0S3, but it is an addition.
I come now to general expenditures. For general expenditure the amount actually paid in 1921-22 was $159,421,140 as against $147,-
435,000	in 1925-26. If we deduct from that item of $3,292,674 that my hon. friend agrees should come out, just as I have taken off from his item of $3,447,364,-we have an actual decrease of $8,693,466. That means that this government had the right to say on these figures: We have run the business of the country for $8,693,466 less than in 1921-22. That falls very far short of the claims that have been made; but just let us look into what the figures of 1921-28 contain. I am sure my hon. friend will agree with me that it is not fair to charge the administration of 1922 with railway deficits which in his administration are transferred to the railways. No man with any ordinary sense of fairness would suggest that. Yet we were charged in 1922 with railway deficits amounting to $6,386,800 for running expenses and $1,364,254 for capital.
We used to help the provinces under the Agricultural Instruction Act. My hon. friend wipes that out. The government say that while they admit agricultural instruction to be a good thing, it is immoral to help the provinces with money raised by Dominion taxation. I might point out in passing how briefly this government can stay with anything, because only this very year we have this proposition that so long as the provinces want money wrung from the Dominion taxpayer, not for the laudable purpose of agricultural instruction but for the equally laud-14011- 207J
able purpose of old age pensions, it is quite moral and proper to give it to them. So it is. As the hon. member for West Calgary (Mr. Bennett) suggests, one means votes in this House and the other does not.
Under the Highways Act payments to the provinces are reduced by $1,399,008. There is no administration there, under the terms of the act the payments are reduced. I wonder if the government think we should also compare this item of $5,592,703, the final payment for the government's shipbuilding programme which was stopped in 1928. Are they entitled to any great credit because they have not gone on with another? Nevertheless, for the purpose of comparison that is what they must urge, although it is ridiculous to attempt such a comparison. All these items together make a total of $15,769,335. We have the reduction of $8,693,466 shown by including all these items which are not the subject of comparison under the wildest guess, because the work is all stopped or transferred to the provinces or the railways. The government cannot throw the money away for these purposes even if they want to do so; there is no demand on them for it. In order to find the correct result, therefore, we must deduct from those non-comparable items of $15,769,335 the alleged saving. What do we find? In this past year when things are supposed to be more nearly normal, when difficulties are supposed to be composed, we find that the government have actually spent in comparable sendees $7,075,869 more than was spent by the government in 1928.
In getting at that result I am not taking the figures down to the last five cent piece or anything like that; I am taking them by and large. For example in 1928 we had all the cost of the Grand Trunk arbitration which amounted to something like half a million. I am not taking that off, although there was nothing last year to compare with it. I recognize that from time to time you have these different items; you have something one year and something else another year. It is therefore not fair to strike them off, but it is absolutely unfair to seek to compare accounts with other accounts which contain items and liabilities entirely transferred on to other shoulders, items transferred to the provinces and items transferred to the railways.
So that this " prudent administration " just comes down to this, that in respect of comparable items and expenditure within their control the government have managed to spend in the last year of grace $7,075,869 more than the former government, whom they accuse of such frightful extravagance, spent


James Alexander Robb: And notwithstanding all that
my hon. friend has said, we have reduced taxation.


Henry Lumley Drayton: I will deal with that for a minute. The government has boasted of having got such immense revenues, and certainly it has levied taxes which no other government has ever done. It can devise nuisance taxes in a way unknown to any other government and it can multiply and duplicate those taxes in a manner peculiar to itself. Before talking of reduction of taxation the minister should compare the basis of taxation in 1922 with that of to-day.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Henry Lumley Drayton: The Budget-Sir Henry Drayton
I say we did not do it. On the other hand, as far back as 1919-20 we recognized the fact that the railways stood on our books for far more than they were worth, and we treated $284,000,000 odd in that one year as inactive, something which could not be relied upon, something which certainly was bringing in no income, and we increased our net debt accordingly. Some hon. gentlemen who were not in the former House may not be quite familiar with this. We arrive at our net debt by deducting from our gross debt our assets, and when we ourselves knew that we had not the assets there, we thought we might just as well be honest to the country and to outsiders and say so, and so we did. We took off that sum, which had the effect of adding to our national debt in that one year $284,000,000.


Mr. EDWARDS (Frontenac):: What year
was that?


Henry Lumley Drayton: In 1920, and
that has been referred to by supporters of
the government. I will not say that any members of the government were quite so foolish as to do it, but the increase in the debt that year has been referred to as an evidence of improper Conservative administration when the whole fact of the matter is that it was simply a belated statement of truth. That is what we did.
Now I am going to put on Hansard the figures taken from the books of the Finance department and from the public accounts showing exactly how this debt question has been treated. In the first instance, the statement shows the net national debt at the end of each fiscal year ending March 31st; these are the figures of the Minister of Finance and of his department. Then under the heading of "Aid to Railways" is shown the cash loans granted. The next column gives the aid given by guarantee of bonds, and the next shows the total redemption of debt both from cash loans and guaranteed issue proceeds. The table is as follows:
Net National Debt, fiscal year ended March 31st	Aid to Railways	Total redemption of debt both from cash loans and guaranteed issue proceeds-	By cash loans*	By guarantee of bonds	$	$	$	$1920	2,248,868,623	45,780,690	17,109,027	For redemption1921	2,340,878,983	109,662,655	50,000,000	purposes. 56,382,6261922	2,422,135,801	97,950,645	61,000,000	48,871,4431923	2,453,776,868	77,863,936	nil	25,275,9021924	2,417,783,274	23,710,616	72,500,000	11,469,3691925	2,417,437,685	9,934,452	81,000,000	24,007,533Treated as inactive assets and not deducted from Gross Debt. As I said before, Mr. Speaker, the answer sponsible for the	final marshalling of the	
to the charge that the surplus of guarantees over debt retirements could not be deducted from the gross debt always was: Well, you did it. No such charge can be made for 1920 when we voluntarily added $284,000,000 to the debt, nor in 1921 when debt retirements were actually $6,382,626 more than the guarantees.
Then the year 1922 comes along, and in that year the endorsements amounted to $61,000,000; the retirements amounted to only $48,871,443. Now of that year this administration was responsible only for the final quarter. I think, as a matter of fact, the railway payments had been made in the first part of the year; I do not think railway guarantees were given during the latter part of the year. I may be wrong in that, but it makes no difference. Right or wrong, there was only one government re-
[Sir Henry Drayton.l
figures, and that was this government. These figures are marshalled in March, of 1922; the Conservative administration went out of power in December, of 1921. But the whole defence is that we did it. Well, as a matter of fact, we had absolutely nothing to do with the marshalling of these figures. Payments are made from time to time in the Finance department, the same as in any other department, from cash on hand as the necessity arises, but the marshalling is always done, as it ought to be done, in the department itself, when the accounts for the year are being made up. So the result of it is for those three years, that we have a surplus, the last year, of guarantees over debts paid of $12,000,000 odd, and taking the full three years into consideration we have a surplus of $5,745,931 of guarantees over the debts paid off.

The Budget-Sir Henry Drayton
In the year 1923 we have a large sum of money coming in from England, something not earned by this government at all, something earned by the transactions of the former government with the Mother Country. That money is paid in cash. The government has the cash and they pay the whole of the commitments thrown upon them in cash, namely S77,863,936. The next year, 1924, simply because this government has not the cash, we start in with heavy guaranteees, and guarantees were given amounting to S72,500,000, as against retirements of $11,469,369; and in 1925, $81,000,000 as against retirements of $24,007,533.
Everyone agrees, first, 'that the property is not worth anything like what we have against it; secondly, that all the cash payments 'through all these years have been treated as money put away, treated as money bringing in nothing, treated as a dead asset, and they have not been deducted from the gross debt. Hon. ' gentlemen will also see that the real controversy turns entirely upon these two years, 1924 and 1925, where we have a net addition of guarantees over and above debts-and therefore of liabilities 100 per cent-of $118,000,000.
In the first instance, Mr. Speaker, let us just consider the absurdity of this position. When the money is your own money that you can afford to put into the property it is gone. It is no good, it is something to be written off. When you have no money and you borrow and get the cash, as was the case in some of the previous years, again the money that you borrow and put in yourself is gone. It is not deducted from the gross debt. On the other hand by some peculiar kind of-well it is not reasoning, it is misleading the public-


An hon. MEMBER:: Juggling.


Henry Lumley Drayton: Yes, "juggling"
is a better word. Where you do not get money out of your own pocket, or on your own bond, but simply endorse the bonds of your agent who cannot pay you-namely the board -in that case the investment is perfectly good, and there is no responsibility. The thing is so perfectly ridiculous that my hon. friends were very well advised in the past when they admitted that there was no defence of the practice except the defence of "you did it." Now, I will simply put on Hansard the figures. The addition which ought to have been made to the net debt of the country for these years is $118,023,098. That is made up in this way: In 1924 the bonds guaranteed amounted to $72,500,000 odd, less redemptions of $11,469,369, leaving of increased responsibility $61,-
030,631. In 1925 the bonds guaranteed amounted to $81,000,000, less redemptions of $24,007,533 odd, leaving $56,992,467 added to the country's liability. Total $118,023,098.
I am not going to say anything about the little differences we have had in connection with fixing our national debt. We have had a revaluation of securities in the past, for example in connection with the debts contracted by Roumania and Greece, and the course followed by the directors of the late lamented Home Bank, which added pretty well to the showing for the financial year in which the particular arrangement was adopted. Now we had a change of ownership in connection with an elevator at Vancouver, built, if I am correct, by the Conservative administration. A debt reduction follows in the case of this elevator because it has 'been transferred to the commissioners at Vancouver and they are paying interest. In that case technically I think they are right because any investment which is paying interest ought, I think, to be deducted.
With these aids the Minister of Finance now calculates our net debt as $2,395,084,685. But if we are to be fair to ourselves and to the country we have got to add the $118,023,098, the increase of the country's railway guarantees over obligations retired, which makes the net debt not $2,395,084,685, as the minister states -but $2,513,107,783, or $90,971,982 more than when the present government took office. Whatever defence may be hunted up by the government I hope it is not going to be the same defence as in the past, namely, "you did it." I have given the actual figures, and they cannot be controverted by the minister. Why, I am fairer to the minister than he is to himself. Take for example his statement as to guarantees. Last year over and above retirements he says it was $64,000,000. In my calculation I did not bring it as high as that, I Only made it approximately $56,000,000.


Mr. DIONNE:: Who is right?


Henry Lumley Drayton: Will the hon.
gentleman who asked the question stand up so that I may see who he is?


Georges-Léonidas Dionne: I simply asked the question who is right in regard to these figures.
-Sir HENRY DRAYTON: I think the figures of the minister may be correct, but in fairness to him I think I should reduce the amount as I am reducing it.


Georges-Léonidas Dionne: Will the hon. gentleman
answer the question?


Henry Lumley Drayton: I wonder if my hon. friend will keep quiet for a few minutes.

The Budget-Mr. Woodsworth
I should like to see the government act with a little fairness in regard to this question in the future. We have not had the truth in the past, but we ought to have it in the future so that there should be no dispute about the matter. The figures of the department have been given. If they are wrong let us get them right. Do not let us argue any more about things as to which there should be absolutely no room for debate at all.
Now, Mr. Speaker, I have shown what the figures for the national debt really are. I have also demonstrated what the results have been of the so-called "prudent administration." I have endeavoured to show you of what the so-called tremendous prosperity consists, and now close, reserving further comment until the complete government proposals will be disclosed in committee.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, a short time
will suffice for me to say what I have to say with regard to the budget.
First of all, let me call the attention of the House to one or two items in the estimated expenditure which I think are of vital interest. The Minister of Finance has given the expenditures attributable to the war as $163,997,000 or 47.83 per cent. Subsequently he shows that these are not all the expenditures, and he enumerates a number of other items which I take it would bring the total lip to over 50 per cent. It ought to be clearly understood by the people that of the total annual expenditures which we make here, fully one-half goes toward the payment of the interest charges of the last war. We are told that we need some war memorials. I would suggest that in this huge amount we have a very imposing war memorial, and one that is likely to prove very enduring indeed. Notwithstanding that huge amount, I observe that later on the amount proposed this year for what is called " national defence " is higher than the entire amount proposed to be spent on civil government. I know some hon. members in this House are inclined to take some of us to task because we take the opportunity from time to time of calling the attention of the government and of the country to the necessity of reduction in our war expenditures and the futility of war expenditures. Sometimes the papers take a fling at us and say we are making our annual speech on the war proposition, but I cannot accept this budget without emphasizing these figures given to us very clearly by the Minister of Finance (Mr. Robb) that show that we spend half our entire income upon war expenditures connected 
with the past war. As long as that situation continues it seems to me we are fully justified in discussing any measures that would tend to prevent any future occurrence of this kind.


John Wesley Edwards: What part
of that expenditure would the hon. member eliminate, or what part could be eliminated?


James Shaver Woodsworth: Of the war expenditure?


John Wesley Edwards: Yes.


James Shaver Woodsworth: I will come to that a little later. It is there now as a charge, but I suggest here merely that we should be very careful not to do anything that might increase the charge in the days to come.
There are other fixed and public debt charges amounting to 9.17 per cent of the total expenditure on government services. That means that fully 60 per cent of the entire expenditure of this country is what is termed fixed charges, so that at the best we in this House have control over less than 40 per cent of the expenditures. Again, of that 40 per cent a very considerable proportion of that amount is in the form of certain statutory expenditures; so that after all the amount that we directly control in this House is comparatively small.
I do not intend to enumerate the items which were given us by the Minister of Finance, but I might note two or three by way of illustration. For example, for the health of the people of this country we spend .19 per cent of our total expenditure. For scientific institutions we spent .29 per cent. For labour, a department in which I am of course interested, I note we spend .36 per cent. These most important departments of our public life are of such insignificance in the eyes of the parliament of this country that adding these three items we spend less than one per cent in carrying on what some of us regard as very important matters. We have, however, the opportunity of making some savings, it seems to me, even within the limits which I have indicated. We all recognize that in the co-ordination of the civil service we might effect very considerable saving. I should like to read a sentence or two from the Ottawa Citizen of January 26, 1926, which indicate the possible extent of such saving. On the editorial page there are certain facts and considerations as follows:
1. That the National Civil Service Reform League of the United States estimates a loss of $750,000,000 per annum in all government services or 25 per cent of the whole.

The Budget-Mr. Woods-worth
2.	That in Canada there is an approximate comparative loss of $60,000,000 through loose, inefficient, and non-competitive government business.
3.	That in 1918 the total personnel in the federal civil service was taken out of patronage and placed under open competition, or merit. To-day 33i per cent of these positions have been returned to the patronage system as political plunder.
I think that any one who wishes well for the future of Canada will come to the conclusion that we must not return any further along the road of patronage. I do not intend to discuss to-night the weaknesses that have been exhibited in our civil service. We are all aware of these from the recent investigation, but at the same time, as a country we cannot afford to return to the patronage system. We should restore to an independent commission those positions which have been taken back under government patronage. The same -might be said in regard to the great purchasing agencies where undoubtedly a large amount that is now expended, might be saved. Such a procedure would also greatly improve the general morale of the public.
Turning for a few minutes to the revenue side of our account, I note that from the income tax we received only 14.73 per cent of our total ordinary revenue. We have had a great deal of discussion in the last three weeks in this House in regard to the reduction in the income tax. It would seem to me that we have not so fully borne in mind that, after all, the income tax forms a very very small proportion of the total taxation of the people of this country, being less than 15 per cent. There are those who have objected to the income tax on the ground that we need more money for our investments. I am inclined to think that those who make such statements have not given sufficient attention to the underlying economic conditions. Our banks say they have money standing idle at the present time. I should like to suggest that instead of more money for investments we need greater buying power on behalf of the great masses of the people of this country. I would commend the Minister of Finance for reducing the taxes on the low incomes, and I would commend him for distinguishing between the incomes derived from earnings and the incomes derived from investments, but I am sorry to see any lessening of the tax on the higher incomes. On the other hand, I should like to see these very greatly increased, because as it is we are giving larger and larger amounts for investments, perpetuating and accentuating one
of the evils from'which the people are suffering the world over.
Certain hon. gentlemen have been ridiculing the analysis of the economic situation which was made a few years ago before the Banking and Commerce committee. The hon. member for Fort William (Mr. Manion) and the Minister of Finance himself have laughed at the analysis which was made there. There are many thoughtful students of economics today who are voicing some of those opinions in ever louder tones. I should like some hon. gentlemen if they have time to read this article which I note in the April number of the Atlantic Monthly, because it contains in summary form an argument which has been recently set forth in a very important book on Profits, by Foster and Catchings. I want to read just a paragraph or two that will give the idea of the argument. For example the article states:
The engineering societies, under the direction of Herbert Hoover, have shown that we are already equipped to double our volume of production.
That is, instead of wanting to invest more fixed capital in railways, factories and other machinery of production, we have already at the present time capacity on this continent more than to double our present production. Why then do we want more investment? The trouble fundamentally is, as the article goes on to show:
What the people must have if prosperity is to last is the money with which to pay for goods rather than more and more devices for enabling them to acquire goods for which they do not pay.
We are told and we have been told in thi3 House that the labouring people are receiving higher and yet higher wages. The authors of this article go on to say:
The recent researches of Paul H. Douglas, soon to be published, show that the gain in real wages in the United States from 1890 to 1919 did not average one-half of one per cent a year. For a generation or two we have fallen far short of making the gains in human welfare which should have resulted from our scientific progress.
Progress towards greater total production and resultant higher standards of living is retarded because consumer buying does not keep pace with production.
In rather a humorous way the authors of this article, which is entitled "The Dilemma of Thrift," put the situation which faces us at the present time.
What a mess we get into! We work hard to pile our shelves high with what we most desire, and then we have to stop working because we are unable to take these things off the shelves and enjoy them. Though we produce much less than we could easily produce, we do not distribute to advantage even what we succeed in producing. We condemn extravagant buying at the very time when industry slows down because people are not buying enough. Then, while business wanes because it lacks consumers, we put taxes on

The Budget-Mr. Woodsworth
consumption; and, precisely \^ien 'business is in greatest need of people with incomes to spend, we reduce those incomes by reducing wages and dividends. We celebrate "buyers' week" and "thrift week" at one and the same time. By investing our savings, instead of spending them, we deny ourself to-day in order to produce more in the future, although we are already equipped to produce more than we know how to use. While many at home are in want, we strive more and more to send more of our wealth abroad; but we are loath to import much in return. Nations, at least, seem convinced that it is more blessed to give than to receive. A topsy turvy world! Alice in Wonderland found nothing more paradoxical.
I would like to turn back to our accounts for a moment. I said that we received only 14.3 per cent from our income tax, but we expect to receive from our excise taxes, namely sales tax, stamp tax and so on, 25.35 per cent, and from our customs import duties 33.80 per cent. It is not the income taxes that weigh the heaviest or that weigh at all upon the ordinary citizen. The great majority of Gur wage-earners and the lower salaried men in this country do not pay income tax at all. The tax that weighs on the ordinary citizen is the indirect tax such as the sales tax and the import tax and on this customs import duty alone we pay 33.80 per cent. The greater part of our taxation comes ia this indirect way.
In our income taxation we have been very careful to exempt those who have children; the more children you have, the less heavy the income tax weighs. But in the case of indirect taxation the more children you have, the heavier the tax, because of course we have heavier expenditure for food, clothing, housing and all along the line. So that in these indirect taxes which form the great bulk of the taxation which is placed upon the people of this country, there is not only no exemption for those who have the heaviest burdens to carry, but an added tax on those who are already overburdened. That is about the situation as we find it with regard to our estimated expenditure.
I have spoken of the way in which we may conserve something of the comparatively small amount of our revenues over which we have control. Just to illustrate some questions which arise outside of this parliament building but which receive scant attention inside, I should like to quote a paragraph from an address recently delivered by Dr. C. D. Howe, Dean of the Faculty of Forestry of Toronto University, to the Canadian Club According to the Ottawa Citizen, he said:
In the last seventy-five years nearly a million square miles of forests have been destroyed by fire in Canada. Even to-day three million acres are burned each year, equivalent to a strip of land a mile wide from Halifax to Vancouver. Does it matter who is Prime Minister as long as we continue to lay waste our forest wealth at the rate of three million acres a year?

This is my point: We spend a great deal of time talking about a few dollars rise or fall in income tax, about a few cents rise or fall in certain customs duties, while in the meantime great economic questions find hardly any place in the discussions 'which go on in this House. I think Mr. Howe is quite right in the question which he asks:
Does it matter who is Prime Minister as long as we continue to lay waste our forest wealth at the rate of three million acres a year?
I will not take the time of the House to go into the way in which we have been dissipating many of our other natural resources. There came into- my hand only a few weeks ago a paper delivered last March by Mr. C. M. Campbell before the Canadian Institute of Mining and Metallurgy, on our Canadian natural resources. Some of us have been rather prone to emphasize the fact that we have almost unbounded natural resources in this country, but these scientists are now beginning to tell us that we have been altogether to optimistic with regard to these matters and that already our soils are being depleted, our forests are rapidly diminishing and even our mines are not nearly so extensive as we have imagined them to be. These things, it seems to me, should give us pause, and instead of spending three or four weeks in discussing what, after all, are almost entirely political matters, we as representatives . of the people ought to spend a great deal more of our time in considering the conservation and the proper utilization of these great natural resources.
I wish hon. gentlemen could read a little book, The Tragedy of Waste, by Stuart Chase, with regard to the wastes that are occurring on this continent through lack of co-ordination in the management of our industrial affairs. I remember several years ago reading an interesting little book by King C. Gillette, a practical business man who was accustomed to sizing up industries from the standpoint of the efficiency engineer. He looked over the industrial field and asked whether we were at all efficient? He said, among other things:
The engineers estimate that the loss to industries, through lack of efficiency is as follows: Mens' clothing industry, 63.78 per cent; building industry, 53 per cent; printing industry, 57.61 per cent; boot and shoe industry, 40.93 per cent; metal industry, 28.66 per cent; textile industry, 49.20 per cent.
This, he points out must average something like 50 per cent, a loss which he thinks is chargeable to lack of co-ordination. In the author's opinion, an individual under the system of co-ordination which he is advocating could produce enough in five years to

The Budget-Mr. If ood-sworth
maintain him for a lifetime of seventy years, no matter how extravagant he might be. This comes, not from some university professor or from some academic dreamer, but from a practical business man who, after looking over the arrangements of our industrial system as it operates to-day, suggests that there are great gaps to be filled in and duplications to be cut out, and that co-ordination is absolutely necessary if we are to produce and distribute economically and avoid the waste which is now taking place. I suggest that if our industry is 50 per cent inefficient we should pay a little more attention to recommendations of that kind and less attention to protecting our industrial concerns from outside competition. Let me say again, as I have said before that in my judgment neither protection nor free trade will solve our present problems; we must get behind all that and recognize clearly that solutions which perhaps might have been satisfactory some years ago are no longer feasible inasmuch as new factors have entered the industrial field in recent years.
There is one other matter to which I desire to call the attention of the House in connection with our financial statement. I have spoken of the estimated expenditure and the estimated revenue and made a few comments in each case. There is also the balance sheet, if I may so describe it, which the minister ha3 submitted to parliament. On March 31, 1925, our net public debt stood at $2,417,437,685.59, and the minister estimates that there will be a decrease in the debt this year to the extent of $22,353,000 odd. That sounds a large amount, and as some hon. members of the opposition have pointed out it is only apparent in view of the fact that the Canadian National Railways have not been taken into account. Personally I hope the time is not far distant when, in preparing the balance sheet, our government will include the Canadian National Railways among the public works of the country. But after all, it must be remembered, this apparently large decrease of $22,000,000 which is anticipated is less than one per cent of the debt, so that if the Canadian National Railways are taken into com sideration it is evident that we are not even paying the interest on our debt, let alone reducing the debt. That is the great point for us to emphasize. Most of us are unable to think in terms of millions or billions, but there are few who are incapable of thinking in percentages, and that is why I am trying to emphasize the percentages. We are therefore reducing the debt nominally by less than one per cent. And while this is an improvement on previous years it is still a very small reduction and does not touch the main problem at all.
As I have pointed out before, it is somewhat difficult for those of us who
9 p.m. belong to the minor parties to know how to vote on the budget, for the simple reason that only one amendment is permissible. We have therefore to vote for or against the amendment, and then for or against the main motion, for under normal circumstances we have no means, of stating what we think should be the fiscal policy of the country. It may be, in fact it is true, that we in the labour movement are so small numerically that it could make no immediate difference to the House or to the country what we might propose as a fiscal policy. Nevertheless we are here to submit our policy to parliament, and as I cannot move an amendment to the budget I want to put on Hansard again, as I did two years ago when I had an opportunity of proposing an amendment to the budget, the views of those whom we labour members represent in this House.
With regard to taxation we believe (a) in the abolition of fiscal legislation that fosters and sustains class privilege; (b) in the removal of taxes from the necessities of life; (c) in the taxation of land values; and (d) after the exemption of small incomes, in a steeply graded income and inheritance taxation. And the eleventh plank of our platform provides for a capital levy for the extinction of the war debt.
I want to call the attention of the Minister of Finance (Mr. Robb) to the last two proposals. I cannot see why we in this country ought not as a federal government to impose an inheritance tax.


William Daum Euler: Would the hon. member add that tax to the inheritance tax already imposed by the provinces?


James Shaver Woodsworth: Yes. Some of the provinces have an income tax which their citizens have to pay in addition to the federal income tax and I see no reason why we should not have a federal inheritance tax. In this connection I would observe that as between administrative bodies taxation is after all merely a matter of adjustment, and it is one that could be worked out between the Dominion and the provinces. I am inclined to think that in some respects the federal government have pre-empted too great a proportion of the taxation of the country. However, I am not discussing that question at the moment; rather, I am considering the principles underlying the proposal for an inheritance tax. I believe that we are absolutely right in suggesting that after a certain exemption, sufficiently large
The Budget-Mr. Woodsworth

to enable a man's estate to provide for his immediate dependents, the rest of that estate ought to be very heavily taxed. Personally I would go a great deal further: I would say that it ought to be expropriated.


An hon. MEMBER:: What would be the limit?


James Shaver Woodsworth: I would not make any sugestion offhand; I am merely stating a general principle. But I would allow au exemption sufficiently large to enable the estate to take care of the man's immediate dependents, to give them a start in life, and after that I should think the state might very well take over the remainder. After ali, when you come to financial wealth you must remember that you are dealing with something that is different from the real wealth of the country. In the case of real wealth the more I have the better it is for me and it is none the worse for you, but in the case of financial wealth, dollars and pounds, the more I have the worse it is for the community, because after all the dollar is simply an order on the services of the rest of the community. If we allow large numbers of these orders to be passed on from generation to generation it means that the rest of the community, that the unborn children of the rest of the community, are saddled with debt and have to pay services for which those who inherit these orders have rendered no real value. These are considerations to which we should give attention.
I would go further than this. With regard to the war debt, as has been suggested in a good many countries, we should go beyond taxing the income and tax the principle. In previous years I have called the attention of the House to what I think should be very clearly recognized by all Canadians. During the war we paid very little of the war expenditure; we simply borrowed and borrowed and put off until after the war the settling of accounts. The result was that a large number of people were enabled to profiteer during the war. Since the war we have issued a large number of tax-free bonds, and a large number of people indirectly profited by the war after it was over. And what is the result? The greater part of Canada's debt is not owed to people outside of this country; if it were it might then be regarded as an international debt which we were under obligation to pay. - But the greater part of that debt is owed to people within the bounds of Canada, which simply means that we are drawing in these large revenues from different sections of the country, from the mass oi
	.
the Canadian people, and turning them over to another group of Canadians, who I fancy do not constitute a very large group. Over a hundred million dollars a year is being drawn from the mass of Canadians to pay those comparatively few who own our war debt, and over half this amount is in tax free bonds. It often seems to me that we in this House are not occupying a very enviable or exalted position, when our job seems to be that of a great collector, drawing from every man from Halifax to Vancouver what little sums he can afford; securing these not from him directly but indirectly through the things he buys; collecting all these little driblets from the different sections in order that, when we have collected them, they may be turned over to the few people who really control the situation. I do not know whether the bankers' proposition which is now put forward by the International Bankers would be a very great departure from the present scheme of things. They propose to collect the debts directly instead of through the different governments. I am not sure whether or not that would be feasible. After all the end is the same, whether debts are collected through the governments or directly; it means that a certain group of Canadians are paying tribute to another group of Canadians, and in regard to the returned men I would say that they are paying with the rest of the citizens, and paying heavily, in these forms of taxation, especially in the indirect taxation which forms so large a part of what we are able to collect.
I had not intended to say very much with regard to this budget as it affects labour. I think we may say that on the whole it is a fairly satisfactory middle class budget. So far as it may stimulate general prosperity, and lessen unemployment it may be beneficial to the workers. But on the whole it does not relieve to any great extent the burden which the workers are now carrying.
Since a good many gentlemen have brought up the matter during this debate, I would frankly admit that a good many of the labour men in eastern Canada are protectionists, and that they vote Conservative. That is their right, but I would also suggest that a very large number of these same people are not at all in favour of political action on the part of labour. Some of us in this country are trying to develop along the British lines, rather than along American lines. One of the Toronto members referred in eulogistic terms to Mr. Samuel Gompers, and thought we should follow his lead and not draw labour into the political sphere at all. I would like to say that some of us who have had British

The Budget-Mr. Woodsworth
training do not propose to take the lead in political matters from Mr. Samuel Gompers or those who have accepted his policy. We are following, and propose to follow much more closely, the example of the British Labour party.
An appeal was made the other day in front of this building by a large delegation from' one of the industrial centres of the western part of this province, and we were told that theirs was the voice of labour. I mingled with that throng and talked with a good many of the men. I was very much interested in discovering that they were very carefully marshalled by their employers. I was rathe: surprised to learn that they had even brought the company's police along, in order to keep order among themselves. I would also like to call attention to the fact that within those factories represented in that delegation there is no labour organization, so those people who are not yet strong enough to organize in their own behalf were the people brought down here by their employers to present their case. I do not at all question that they believed theirs was almost a holy crusade; I know that was their belief, but I would like to say thai these men had given very little attention to the underlying factors in their problems.
Labour after all is only one factor in the cost of production, and wages bear very little relation to the service rendered by labour. Before sitting down I should like to repeat some figures given in a previous debate by the hon. member for Macleod (Mr. Coote). He pointed out that protection amounted to 35 per cent, but that the wages and salaries amounted to only 16J per cent; that is, the protection afforded was more than double the wages and salaries. He went on to say:
For 1924 the total salaries and wages paid by the automobile industry was $14,219,137 and the value of their production $88,000,000. Wages and salaries were therefore 16.1 per cent of the value of the production. The protection enjoyed is 35 per cent, and the increase in price over the United States price is also 35 per cent. In other words, the increased price which our automobile manufacturers exact from the Canadian people because of the tariff is twice the total salaries and wages paid by the industry.
Supplementing those remarks I would give these figures. The Ford Company book for 1925 shows salaries and wages of $10,13S,927; the Financial Post of February 12, 1926, shows the net profits of that company for 1925 as $6,131,352. I would say, Mr. Speaker, that these figures amply bear out the statement I made a few moments ago, that labour is only one-and in this case a minor-factor in the cost of production, and further that the wages paid seem to bear very little relation to the service rendered.
The budget from our standpoint is by no means what we would like to have it. As far as the people whom we specially represent are concerned, it does not relieve their burdens a very great deal, and yet I believe that there are certain important reductions which will be beneficial to the country as a whole, and therefore, as we cannot propose our own policy in an amendment, we intend to vote for the budget.
May I add a few general considerations. I believe that to-day we of the Labour group are representing not merely so many hundreds or so many thousands of a particular class, but are representing a new principle in the political life of this country, and that is the principle that we should elevate human rights above property rights. In the past, the polices of the older parties have on the whole been so dominated by what we commonly call the big interests that the ordinary men and the ordinary women across this country have had comparatively little chance. I do not wish to precipitate any general discussion, but I should like to make a reference to the Old Country where things are taking place to-day that are profoundly influencing the thought of the people not only all over Great Britain but in Canada as well. I have no desire whatever to-night to discuss the merits of the great industrial strike that is taking place in Britain, but I would like to take advantage of the attention that is being focussed on that great strike and which is forcing us to think, to consider for a moment some general conditions that exist in this country as well as in Great Britain. One of our local papers, the Ottawa Journal, in its issue of May 7th, said in an editorial headed "Let Canada Keep out of It," dealing with this industrial strike:
Labour and Farmer organizations in Canada might well refrain from interfering with the strike in Great Britain. The strike is a purely British matter, and a very vital one.
A good rule to follow in such leases is to try to let the people in their own country work out their own destiny in their own way.
I want to congratulate the Ottawa Journal on taking that stand. I think it is veiy interesting to find that the Journal has put it in that way. I hesitated a great deal to mention this matter until I Saw that some Conservative organizations had begun to communicate with Mr. Baldwin in connection with his policies, and I find , that certain of our own journals would like to dictate to our citizens as to what action they should privately take on a matter of this kind. It is all very well to let the people in the Old Country settle their own matters in their own way. I tried
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to say that in a discussion on imperial relations the other day and I found that there were hon. gentlemen who told me that that was going to disrupt the empire, that we as a Dominion ought to be interested in all that concerned the welfare of the empire. Let the British government settle the industrial dispute by all means, but I would like to ask very frankly: how about the case when some opium dealers want to force the opium trade upon China? How about the case when some diamond capitalists want to force certain policies in South Africa? How about the case when certain cotton growers want to retain certain very important privileges in Egypt? How about the case when certain big oil companies want to get concessions in the Near East? How about the case a few years ago when certain concessionaires wanted to get control in Siberia, when we interfered to the extent of an expenditure of several million dollars? I say that if we propose to apply this rule with regard to one part of the policy of the British Empire, it is well that wo should remember that we should apply it with regard to all the policies of the empire. An editorial the next day stated:
It is, we think, a profound error to regard the present general strike as an ordinary industrial conflict. It is something mudh more serious.
Agreed, but what is it? Briefly, the coal industry as at present organized cannot provide at the same time profits for its owners and a living wage for the miners. I think that is conceded in almost every editorial that we have had given to us. The owners, on the one side, refuse to reorganize and, on the other hand, they refuse to relinquish their profits. The miners, on their side, refuse to lower their standards of living and demand reorganization of the industry. I refer to this matter simply because the situation in the Old Country puts before us in a dramatic form the struggle that we have the world over and the fundamental cleavage that divides us here in this country when we come to a consideration of our financial affairs.
An hon. gentleman asked me a few moments ago-he is no longer in his seat-how would we deal with the debt? It is taken for granted that the debt is something that is inviolable, even though it has to be paid to Canadians. It is regarded as something we must not touch, that interest upon it is the first charge. It is that position, Mr. Speaker, that I want to take this opportunity to challenge. We say that the rights and the needs of the ordinary people of this country is a first charge on industry, and if there is a con-
[Mr. WoodsworthJ
flict between these two, we say that the needs of the men and the women and the children must come first, and I would like to see that general principle translated into our budget statements in the years to come.


Mr. MacLEAN (Prince):: Do I understand that the hon. member would favour repudiating the payment of interest on the public debt?


James Shaver Woodsworth: I said this-I do
not know whether the hon. gentleman was here a few moments ago-that the greater part of our public debt was owed to the people in Canada, and I said that at present the payment of the debt and the interest upon it meant that we had to tax the people with families, many of the poor people in this country, to extract from them, by every conceivable device that can be invented by the Minister of Finance, this money to turn it over to a few, many of whom are comparatively wealthy. Would you say that nc matter what happens that debt is a prior claim to the needs of those people?


Alfred Edgar MacLean: When the money was needed it was very essential that it should come from some source so that the war could be carried on, and I suppose the people who put their money into victory bonds at that time did so in good faith, I would say that the country should stand behind its obligations to these people.


James Shaver Woodsworth: I would like to
call the hon. gentleman's attention to the fact that the war had to be carried on; there was a lot of men needed to carry on that war, and what did the government do? They went into the homes of people all over the countiy, took out individuals and told them to go to the front, and I urge that if it is right to conscript men, it is right to conscript money. The men were conscripted; the wealth was not conscripted.


Alfred Edgar MacLean: I agree with the hon. member there.


James Shaver Woodsworth: Wealth should have been conscripted, and do you mean to tell me that we have no right to so adjust our taxation that it will bear heavily on those whose wealth should have been conscripted and was not.


Alfred Edgar MacLean: It should have
been conscripted at that time.


James Shaver Woodsworth: Do you mean to
tell me that we ought to refuse to adjust our taxation so as to bear heavily upon those who have wealth? I would like to think that the

The Budget-Mr. Woodsworth
hon. gentleman is a good Liberal. If he were, I think he would be behind me in that. On the whole, the majority, whether on .the Liberal or on the Conservative side, are somewhat inclined to regard wealth as sacrosanct, and if there is not enough to go around the interest charges have to be paid whether men and women suffer or not. I am simply going so far as to say that we should provide for the men, and women and children first. Afterwards if there is enough to go round we should attend to the other obligations.


Mr. WARD:: Is it not a fact that when
the matter was being discussed in parliament Sir Robert Borden made the statement, and gave his word to the labour people and others in Canada, that if conscription of men were forced in Canada wealth would also be conscripted?


James Shaver Woodsworth: I am not prepared to say whether that statement was made or not. I know there was a very general impression that it would not be the common people that would be loaded down with the war debt after the war was over. There was a general impression, too, that after the war we were going to have a large measure of reconstruction so that the mass of the people would be placed on a different footing.
Let me give this other quotation from the article to which I have referred, because it seems to me to indicate so well the point of view of a large number of people all over the country. Referring again to the situation in Great Britain it says:
Two governments are functioning in London at the present time. One of these governments which is now acting on the defensive is the politically representative ministry of Premier Stanley Baldwin, and the other is the industrially representative general council of the Trades Union Congress.
I think, Mr. Speaker, the writer should have gone further. He has omitted the most important government of all, the third government. The third government is the financially representative government of the landowners and the bankers which throughout the years has largely dominated the political government of Great Britain. That dominance is challenged. I am not suggesting that the method of making the challenge is a good method, I am not at the moment passing any opinion with regard to that. But I will say that throughout the history of England, and especially in recent years, the financial control has been so great that there has come a shifting of power gradually from the old feudal land owners to those who have control of the financial system of the country. And they have, to no small extent, controlled the
policies of parliament and control them today; and to-day the labour people-through political action during the last few years, and now through industrial action, whether this is advisedly undertaken or not-are challenging that dominance and are saying in regard to the mines over there that if profits can be paid only by lowering the standards of the people of England, such a condition must not continue; the standards of the people must be maintained even though it means a reorganization of the whole mining industry of the country. That is what lies behind the struggle over there, and that is what we have to consider here in this country.
When we are faced with a budget of this kind and are told that we control less than forty per cent of our expenditures, that the greater part of the taxes we raise are raised by indirect taxation which bears heavily upon the mass of the people, we encounter this very selfsame problem here in this country. Although labour and the farmers are undoubtedly not yet politically strong in Canada, we come challenging the dominance of the financial masters of this country. Members of the older parties have come here from year to year, from decade to decade, and have advocated the policies very largely of the manufacturers, of the big transportation interests, and of the big financial interests. And when anyone dares to question the ideals and policies of these great interests he is ridiculed, and is told that, he is talking wildly, or that he is talking all sorts of academic stuff. I want to say that although it may not suit the ideas of certain gentlemen in .this House, there is a rising tide of public opinion much along the lines that I have been trying to indicate to-night; and I am quite sure that in the days to come we will find more and more the mass of the people asking questions with reference to the reorganization, or, as it was called in immediate post-war days, the "reconstruction", of our industrial and financial system. If we are to go on year by year with a comparatively small group enjoying the prosperity so glowingly referred to in the Governor General's speech, while a large number of .the people are quite unconscious that prosperity has yet arrived, are we not undermining those institutions of parliament which we have said should foe supreme? After all in a democratic country parliament has a right to govern only so far as parliament represents the ideals of the masses of the people of that country.
The Budget-Mr. Tummon


Mr. W. E. TUMMON (South Hastings):: Mr. Speaker, not having taken part in any of the debates so far, perhaps I might be permitted to make a few observations at this time. In so doing I do not purpose to detain the House at length.
May I briefly summarize recent events in regard to this government? In his Richmond Hill address of September 7th last year, the Prime Minister complained very bitterly that having only a majority of one, he was unable to successfully carry on, and seemingly intimated that unless he obtained a substantial majority he would resign. The country defeated the Prime Minister and eight of his cabinet ministers, and reduced his following in this House to 101. It also decreased the parliamentary representation of the Progressive party from 65 to 24. On the other hand the Conservative party was returned with 116 supporters, an increase of 69. But the government did not resign. The Prime Minister then said he would call parliament and allow the people's representatives to decide who should carry on. A statement to that effect was issued by the Prime Minister and appeared in the press on November 5 last. Parliament was called on January 7 but not for the purpose indicated. It was called to permit the government, through the Speech from the Throne, to present a programme to this House whereby they 'hoped to obtain here what the country refused them on October 29th. In the Speech from the Throne the government declared among other things:
-that in the interest of industrial development every effort should be made to eliminate the element of uncertainty with respect to tariff changes; that changes in the tariff should be made only after the fullest examination of their bearing upon both primary and manufacturing industries and that representations requesting increase or decrease of duties should be made the subject of the most careful investigation and report by a body possessing the necessary qualifications to advise the ministry with respect thereto. A Tariff Advisory Board will accordingly be appointed forthwith.
That was part of the programme upon which this government obtained the necessary vote3 to permit them to carry on and remain upon the treasury benches. It was thus a surprise to many when the Minister of Finance, in presenting his budget, announced the tariff reduction on automobiles, and only eight days after the Tariff Advisory Board had been appointed. Thus to my mind the situation, is that the government, in order to obtain a majority in the vote on the Speech from the Throne, declared one thing; then, having obtained that majority, proceeded to do an-

other. On the other hand, it has been said that my hon. friends to my left are responsible for the tariff reduction on automobiles. It seems to me that they then, would be in the position of giving their support to the government on one policy, and, having sustained them in power, are demanding another policy. As to who might be responsible I am not concerned. But the result is to have the very opposite effect to that sentence in the Speech from the Throne, which says:
That in the interests of industrial development every effort should be made to eliminate the element of uncertainty with respect to tariff changes.
Thus instead of tending towards the elimination of uncertainty the course of the government has and is increasing the element of uncertainty that ivas already prevailing, As to whether or not the automobile industry was enjoying too much protection I am not prepared to say. I do not feel that I am competent to judge. So far as I can see it would perhaps make little difference to manufacturers of automobiles whether they manufactured in Canada or in the United States. I believe the Canadian plants are most all, if not all, branches of American firms. But it wrould make a great deal of difference to the Dominion of Canada if we should lose that industry! and it does mean much to the thousands of workmen and their families who are dependent upon that industry for a living, many of whom no doubt felt that they were engaged in a legitimate business and that their jobs were secured; and they probably purchased homes and assumed other obligations which to them were comparatively as great as the obligations that the company which employed them assumed in the carrying on of their business. While I recognize, Mr. Speaker, that there may be certain difficulties, yet with all due respect to the time honoured custom of keeping the contents of the budget a secret, not revealing them until their presentation to parliament, and then announcing drastic changes such as the one I have referred to, to take effect immediately, with a resulting tendency to demoralize and disrupt-legitimate business and create uncertainty and distrust in the mind of the workman as to his ability to retain his job or to find employment, it seems to me it is wrong and damaging. There were many in Canada who looked forward expectantly to the appointment of a tariff board which they hoped would overcome this difficulty, but their hopes have been shattered when even the government seemingly would not trust its own child. My complaint against this government is that although such a board was created prior to the introduction

The Budget-Mr. Tummon
of the budget, the government ignored its own creation and failed at the first opportunity to fulfil its promise in the Speech from the Throne, that-
-this board will be expected to make a careful study of the customs tariff, the revenue to be derived therefrom and tihe effect of the tariff and allied factors on industry and agriculture.
In regard to the income tax I have only one observation to make, and it refers to the proposed increased exemption. I notice that in discussing this tax two or three different expressions have been used. First, it has been said that the increased exemption will be $3,000 for married men; again it has been stated that the exemption will apply to the heads of families, and again that it will apply to householders. Upon reflection it will be seen that each of these phrases means something different. "Married man" may mean just simply what it saysi-married, perhaps not iiving with his wife, without a family, house, or anything else, and he would get the benefit of the expression. "Householder" means the owner and holder of a house, but the head of a family would mean the possessor of a home who was maintaining therein a wife or housekeeper, and children of his own or children whom he may be keeping as a matter of charity. As the head of a family he would comply with all the requirements, and I consider the increased exemption should apply to that class. I have now in my mind more than one example, but will just mention one to illustrate the point. A widower had a son who met with an accident and died, the son leaving a wife and three children. The daughter-in-law is the 'housekeeper for the father-in-law, and the latter is keeping and providing for the daughter-in-law and grandchildren as if they were his own. The father-in-law should therefore be entitled to the exemption. I think the exemption should apply to the head of a family maintaining a home, a wife or housekeeper and any children solely maintained therein by him.
Coming as I do from a district which was a pioneer in the dairy industry in Canada, a district which can not only lay claim to being a pioneer but also to being one of the leading dairy districts of Canada, where every farmer is practically a dairy farmer, it naturally follows that we are intensely interested in anything that relates to that industry. I propose to refer briefly to the Australian and New Zealand treaties. I have listened while the hon. Minister of Finance (Mr. Robb), the hon. Minister of Agriculture (Mr. Motherwell), and I think the hon. Minister of the Interior (Mr. Stewart) quoted the price of butter on the Montreal market 14011-208
during the winter months, for the purpose of showing that notwithstanding these treaties, and the fact that butter was coming into Canada at the time in large quantities, the price of butter in Canada remained at a high figure. I noticed that the ministers confined their quotations largely, if not wholly, to the one market. I submit, Mr. Speaker, that at a time when the home consumption equals or exceeds the home production, no one market or place is a true gauge of the general price of butter in all other places. I have seen in the winter months in my constituency which is fairly compact, comprising a territory perhaps thirty miles long by an average of fifteen or sixteen miles wide, five or six different prices varying from two to sometimes ten cents per pound according to conditions that exist in each small centre and according to supply and demand.
I also saw a shipment of foreign butter come into one of those small centres during the past winter, and as a result the price of butter fat to the producer immediately dropped because in every case the foreign product was offered at a less price than that of the home product.
For many years both the federal and provincial departments of Agriculture have been urging increased production upon the dairy farmer. I can well remember a number of yeaTS ago the hon. member who sits upon the government side of this House for South Huron (Mr. McMillan) touring our county as a lecturer of the old Farmers' Institute. One of the favourite subjects of those gentlemen in those days was increased production of the daily cow. Anyone who is at all familiar with the handling of dairy cattle knows that some of the ways in which this can be accomplished is by doing away with the culls, by better care, better feeding and better housing but one of the most effective ways is by increasing the lactation period.
In those days-and I refer to eighteen or twenty years ago-dairying was confined almost wholly to the production of cheese. Cheese factories started operations about May 1 and ceased operations about October 31. The farmer's wife after the closing of the cheese factory was able to dispose, at the local market or at the country store, of a couple of churnings of butter; she would then pack sufficient to keep the family supplied during the winter months, and the cows were allowed to cease milking about December 1.
Going back we find that in 1900 Ontario produced only 7.559,542 pounds of creamery butter. Eighteen years ago there were less than half a dozen creameries between the city



The Budget-Mr. Tummon
of Toronto and the Ottawa river: there was at that time little encouragement for the farmer to increase the lactation period of his animals because he could not profitably dispose of his product. I can remember when the first can of sweet milk was shipped from the Belleville district, 120 miles east of Toronto, into the city of Toronto. It was shipped about November 1, after the closing of the cheese factory in the fall, and the man who shipped it was looking around for a market whereby he could milk his cattle for a longer period. Other farmers took up the idea; for years thousands of cans of milk went from that district to Toronto, and herds which had previously ceased milking about December 1 were milked on as a rule until the middle or the end of February.
Eventually creameries began to be established .in convenient centres and these supplied the veiy market the farmer required in order to lengthen the milking period of his herd. To-day in that same territory from Toronto to the Ottawa river where eighteen years ago there were onfy five or six creameries, there are operating to-day seventy-five or eighty creameries, and the production of creamery butter in Ontario for 1925 according to the Dairy and Cold Storage branch was more than 60,000,000 pounds, while Canada as a whole produced in that year 180,663,783 pounds of creamery butter of which she exported 26,646,435 pounds. That does not take into consideration dairy butter and we are told by the Dairy and Cold Storage branch that the manufacture of dairy butter in Canada last year was approximately 100,000,000,-pounds. That makes a total of about 280,000,000 pounds of butter of which we exported only 26,646,435 pounds, or in other words, for every pound of butter that we exported last year we consumed in Canada eleven pounds. Where are those who will tell us that the home market does not amount to much?
We are told by officials of the Dairy and Cold Storage branch of the Department of Agriculture:
There is lots of room for a continued increase in Canadian production of dairy products. The world in the past few years has had an increasing demand for butter and cheese. This is quite marked in Great Britain where as yet our (butter sales are only a drop in the bucket. Canadian butter is quoted on the market there for but a few months in the year and our prospects for increased prices would be better could an all-year supply be provided.
It is plain that in a country such as Canada an all-year supply can be provided only by winter dairying. Winter dairying has been steadily increasing as I hhve endeavoured to show, but it means production under the

most difficult and costly conditions and it needs all the encouragement which this or any other government can give it. Yet in face of these things this government enters into treaties with Australia and New Zealand which permit producers of butter and other dairy products, of the Antipodes producing under the most favourable circumstances, to compete in the Canadian market at the very door of the .Canadian producers, producing under the most difficult conditions. This has been and is creating in the mind of the dairy farmer the same feeling of uncertainty and instability about his business that this government has succeeded in creating in the commercial and industrial life of this country. It seems to me that if there is anything we in Canada need more than another it is a sound, settled, fiscal policy that will eliminate the uncertainty that seems to exist everywhere and restore stability and confidence at large, a policy that will proclaim not only to Canadians but to people of other nations that Canada will supply as far as possible the wants of Canadians.


Mr. JOHN VALLANCE (South Battle-ford) :: Mr. Speaker, may I join with others in congratulating the Minister of Finance (Mr. Robb) on the splendid budget he has presented to the House? I believe it has been received by the majority of the people of this country as one of the best budgets that have been presented for a great number of years. It is, I believe, what is commonly called throughout Canada a budget of the common people. It indicates a reduction in taxation which I am sure is very favourably received throughout the Dominion.
The removal of the receipt tax is, I believe, also appreciated, while the removal of the sales tax on many articles is a move in the right direction. Then, on Dominion Day we return to the two-cent postage; and last, but not least, there is the lowering in the income tax. I believe the reduction in the income tax will be of great advantage to great masses of the people. I know that in my own constituency, which is a rural one, this reduction is greatly appreciated, especially among the farmers. As you are no doubt aware, Mr. Speaker, the farmer in western Canada has a great many obstacles to fight, such as drought, hail, rust and frost. Over these things he has no control, so that some years he practically has no returns; and of course when his returns are low he escapes the income tax. On the other hand, when in years of large crops, such as the past year, he reaps a large harvest and receives good prices he naturally has to pay an income tax. I have always

The Budget-Mr. Vallance
contended that, so far as western Canada was concerned, the income tax was one of the greatest grievances of our farmers. And it is of western Canada that I speak. I have always held that in deciding upon the income tax as it affects the farmer of the west an average should be struck over a period of years. I have heard it thrown across the floor of the House to the Saskatchewan group that while we have the largest per capita wealth of any province of the Dominion we do not pay the highest per capita taxation. This is easily explained: we have no very rich men in Saskatchewan, our wealth being more evenly distributed.
There are better times ahead of us in spite of the blue ruin talk we hear from the other side, and I believe that the western farmer is beginning to get on his feet again. I had the privilege while travelling in western Canada during the recess of talking to one of the inspectors of a large banking concern in that part of the country, and he told me that whereas at the corresponding period last year it required four men to write the agricultural credits from the city of Regina, at the time he was speaking one man could easily do this work. Of course the chief reason is the fact that we have had a large crop and, coupled therewith, good prices. But while this is true, while we have had a splendid crop and good prices, I fancy that the explanation lies in this, that the farmers themselves have at last begun to have some say in the marketing of their produce.
Referring to the marketing situation in western Canada, I should like for a few moments briefly to outline the operation of the wheat pool. I believe that
10 p.m. with the operation of the wheat pool and the orderly marketing not only of our wheat, but also of all other grains we shall get all there is in it. We have been accused of establishing the wheat pool with a view to forcing up the prices of wheat, but that is entirely wrong; the pool was organized to control the flow of wheat to the market. In the old days the bulk of our grain was in the hands of speculators, three months after it has been threshed, whereas under the pool we are selling wheat all the time. In this way the market is kept steady, but under the present system the payments are extended over a period of time; we have one initial, and three interim payments, each one coming when the farmer most needs the money. You may ask any banker or mortage or machine company, and they will all tell you the same story, that under this system of marketing the farmer is meeting his obligations better all the time.
HOI 1-208j
Since coming to this House I have heard a good deal of talk about protecting the farmer. Now we western farmers believe that it is utterly impossible to protect us as wheat growers. We have to the south of us a country which it is agreed is one of the most highly protected nations in the world, and what do we find? I have here a review of an article entitled The Plight of the Farmer. It is taken from The Nation, New York, the author being Mr. Smith W. Brookhart, one of the United States senators for Iowa. Senator Brookhart is of the farmers' bloc and is one of the ablest American Progressives. That is what he has to say:
"In the last five years," he begins by saying, "more than a million farmers have become bankrupt, and the value of farm /property has decreased by twenty or twenty-five billions of dollars." Senator Brookhart is speaking of farmers and farm property in the United States. There are many reasons to accept his statement as accurate. Bank failures in the farm states, statistics of rural depopulation and the insistence of farmer politicians on measures of "relief" for agriculture are all evidence that the past few years have seen a decline in the prosperity of American farming.
In the last five years in Canada thousands of farmers have regained financial soundness and the value of farm property has increased iby millions.
Senator Brookhart cites some facts which explain this difference. The causes of the farmer's plight, he writes, "lie for the most part in discrimination against agriculture in the laws that have been enacted for the benefit and protection of business." There is, he says, an enormous discrimination against farmers in transportation. They must pay freight to get their products to market. When they buy the things they need, freight is included in the price. The same situation obtains in Canada, but rates on farm products are veiy much lower here than in the United States.
Another discrimination noted by Senator Brookhart is in tariff legislation. The great manufacturing industries, protected against all competition, fix the price of their product. The price of farm products, on the other hand, is fixed by what can be got for the exportable surplus. The farmer sells in an open market and buys in a closed one. Once again, the position is the same in Canada but the handicap against fanners in the Dominion is not nearly so great.
Senator Brookhart proceeds to suggest a remedy for the farmer's economic distress. His proposals are less interesting to Canadians than the prospect that the plight of agriculture in the United States may drive many American farmers north into this country.
They can buy land much cheaper here than south of the line. With the same amount of work it will produce just as many bushels per acre as land in Minnesota or Kansas. Perhaps it will produce more and the quality of the grain will be superior.
It costs less per acre or per bushel to sow and reap a crop in Canada than in the United States.
I want you to pay particular attention to this:
It costs less to ship grain here. Freight rates are lower now in the Dominion and with the completion of the Hudson Bay railway farmers in the prairie provinces will have open to them the best of all routes from the heart of America to Europe.
All that stands in the way of a land movement northward on this continent is the natural disinclination of settled farmers to migrate.

The Budget-Mr. Vallance
That is the plight of the highly protected American farmer, and yet hon. members opposite would like to protect the wheat grower of western Canada. I wonder if they ever think of the time during the war when they were on the treasury benches, and the protection they gave to the farmers at that time. I wonder if it was to protect the farmer that they set the price of wheat when it started to go up in 1917, and whether it was to protect the farmer after the war, when prices started to tumble, that they ceased to control the market. These are questions which quite naturally arise in the minds of practical farmers.
That brings me to another phase of agriculture which I would like to bring to the attention of the House, and that is the cattle industry. I must congratulate the hon. member for Marquette (Mr. Mullins) for the persistency with which he has kept this question before the House. I do not think any line of agriculture has suffered more since the war than has the cattle industry. We all remember that in 1917 and 1918 we were being advised to go into the cattle business; credit was easy, and the bankers were advising the farmers to borrow money and buy cattle. Many of us did so; cows were bought at from S100 to $150 per head in 1917, and by 1920 the price had fallen to $35 per head; thousands of farmers were ruined. These are plain facts, as every farmer in this House knows, and it is for these men I desire to plead. What we need most is markets, and this is where I do not quite agree with the hon. member for Marquette. I have here an article taken from the Farm and Ranch Review of December 10, 1925. As I remember the words of the hon. member for Marquette, on the two or three occasions when we dealt with the cattle industry, he was somewhat opposed to the development of the market in the United States, and on that point I wish to take issue with him.


Mr. MULLINS:: May I ask a question?


John Vallance: You certainly may.


Henry Alfred Mullins: On no occasion in the
House did I oppose the opening of the American market for large cattle, but I did oppose the shipping to the United States of immature cattle, and still do so.


John Vallance: No one in this House
knows the extent of the Old Country market better than I do. I lived there until I was twenty-one years of age, and I know the type of cattle the Old Country feeder wants. There are many years in western Canada when we have thousands of cattle which

would not pay for shipment to even Winnipeg, and it is almost impossible to find a market in the Old Country for such cattle. I think it was Shakespeare who said:
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune.
I believe our tide has now arrived, and it is up to this government and the people of this country to do whatever can be done to remove this injustice and allow our cattle to enter the United States market. The article says:
The psychological moment has arrived when we can appeal to Washington with arguments of commercial self-interest. An enormous com crop has been harvested an the middle west this year. Carter Field, in the New York Herald-Tribune, sizes up the situation as follows:
"With a three-billion-bushel corn crop being dumped on a market Which had been expecting to absorb a two-and-a-half-billion-boishel crop, and with the price of corn on the farm as a result reduced to fifty cents a bushel, President Coolidge has sent two experts to the middle west to see what can be done to save the situation."
Later the article goes on to say:
"The chief trouble is that the corn raisers of this country have piled up a crop estimated at 3,000,000,000 bushels, as against a crop last year of slightly less than 2,500,000,000 bushels. This 20 per cent increase of production naturally would have a tremendously depressing effect on the price, even if there were no other complications.
"Added to this, it is pointed out, is the fact that the number of feeders is much smaller than expected and consequently there is not the normal supply of cattle and hogs which can be fattened on corn..
"The third factor in depressing the price is the fact that the farmers never have fully recovered from the hard times which followed the war. As a result they are not able financially to hold their corn until the natural demand for it increases, but feel obliged to dump it on the market regardless of what they get for it.
"So corn, which they claim cost seventy-five cents a bushel to produce, is being sold on the farms at fifty cents a bushel."
We are told here that one of the difficulties facing the middle west feeder in disposing of his present unprofitable corn crop is that he has not available the normal volume of feeder cattle to enable him to turn his cheap corn into beef. On this point, the Kansas City Star says:
"More than 80 per cent of the corn raised on the farm is marketed on the hoof. The farmer who has plenty of animals on his place feeds his corn to his cattle and hogs. So the price doesn't so much matter. He sells his corn, not as corn, but as beef and pork. So long as he gets a fair price for his finished product, he doesn't worry over the cheapness of the raw material that goes to making that product. It is when a farmer has to buy high-priced corn to feed low-priced animals that he is in trouble."
Canada is irrevocably wedded to a live cattle export trade, and deprived of the United States market we cannot succeed. This is the unvarnished truth. I can readily see, Mr. Speaker, why the hon. member for Marquette would not be in favour of shipping

The Budget-Mr. Vallance
these live cattle to the United States. He and I differ somewhat, I as a breeder and he as a feeder. Towards the end of July and August, if one of those dry summers which quite frequently comes to the west, is prevalent, pasture gets scarce and we naturally have to get rid of a certain percentage of our cattle. It is then that such men as the hon. member for Marquette step up on the Winnipeg market and buy these cattle for what they care to pay. If I were at home I believe I could show a cheque for $1 from a commission house in Winnipeg, for a cattle beast; they will not even pay the freight. Not only do they get cattle at their own prices on the Winnipeg market, but they hold them until we start to ship out our wheat, and with the wheat, we ship the feed with which they fatten these cattle. We even have to pay the freight, We have in that western country one of the greatest cattle raising areas Under the sun. The grass that grows there can bring cattle into the very best feeder condition. All we need is more and wider markets, and I believe the market to the south of us is the best market we can have for this class of cattle. I leave this subject, Mr. Speaker, for the consideration of the House, and I hope that when the resolution of the hon. member for Macleod (Mr. Coote) comes up asking for a special committee to examine into the whole cattle industry in this country, these conditions I have pointed out will not be overlooked.
They talk about protecting the farmer. I would like to cite a few figures showing just what real protection the American farmer gets with his 42 cents tariff on wheat. In the crop year of 1924-25 there was a tariff of 42 cents on Canadian wheat going into the United States. Yet from August of 1924 until July of 1925 we had a higher average price in Canada. The average price at Winnipeg during that period was 1,685, and at Minneapolis for the same period, 1,675. "Vet they tell us they would protect the farmer by a tariff! These figures prove that any commodity of which you have an exportable surplus cannot be protected, and you must take the price on the world's market.
I notice that quite a number of hon. members opposite from eastern Canada have been advising us westerners to quit growing wheat; for instance, the hon. member for East Algoma (Mr. Nicholson) and the hon. member for Toronto Northeast (Mr. Baker). Mr. Speaker, I have been growing wheat in Saskatchewan for the last twenty years, and like the hon. member for Willow Bunch (Mr. Donnelly) who sits behind me, I have never grown it when I could not sell it. I have here figures showing the amount that has been exported
vaeh year since 1914, and they show what that western country can do:
	Average Price No. 1 Northern	Exports
	at Fort William	Fiscal Years
Y *ar	(Calendar year)	^usheiVurn	1.001	120,426,579s1915	1.282	71,913 3851916	1.381	157,745.469*1917	2.202	189,643,846?1918	2.223	150.392,0371919	2.371	41,808,8971920	2.511	77,978,0371921	1.649	129,215,1571922	1.235	136,489,2381923	1.084	215.074.5661924	1.274	256.870,2371925	1.643	191,764,5371926	1.459*	249,583,470^Average for 3 months.


William John Ward: Those figures are	for Saskatchewan alone?


John Vallance: I secured them from the Bureau of Statistics the other day and along with these they gave me the average price of No. 1 Northern at Fort William. In 1926 the average price for the three months was 1.459. In 1925-26 we marketed one of the largest crops we ever had, and we received a price equal to that received during some of the war years and a great deal higher price than in the years previous to the war. I believe, Mr. Speaker, that one of the most important factors, if not the most important, in bringing this about is the wheat pool.
I do not know whether it would be wise for me to deal with one or two things regard^ ing the tariff, but I might say that when the tariff commission toured the country in 1920. the manufacturers' association piesented a petition to the commission which contained these words:
The test of the efficiency of fiscal system is the country's all-round development. The best way to tell whether or not Canada has prospered under the policy of adequate protection is to study the statistics and see how the country has developed since 1878.
Let us do that; it may be possible to show that this country does better while it is being ruined by low tariffs than when it is being pampered by high prices. Let me give a few figures regarding the total trade of Canada, as follows:
Total Trade of Canada
	Exports and Imports	
1878..	
$ 119,791.879	Increase1896..	
221,675,704	$101,883,8251911..	
742,724,813	521,049,1091914..	
1,074,631,222	331.906,4091922..	
1,501,731,341	427,100,1191925..	
1.887,356,445	385,625,104
Hon. members will note that the trade of Canada goes forward under the firm business administration of the present government.

The Budget-Mr. Vallance
They will also note that under the National Policy, full blown and virgin as it was from 1878 to 1896, Canada almost stood still.
The protectionist judges progress by the increase an exports, that is his test. He wants to restrict imports. As I heard it put the other day, the protectionist is like an individual who is seasick-everything going out and nothing coming in. Let us apply that test. Here are the figures of our exports taken from the trade report of Canada for the year 1925:
Exports Canada
1878	 $	79,154,678
1896	 116,314,543
1911	 290,000,210
1922	 753,927,009
1925	 1,081,361,643
The biggest three year gain in exports in all the history of Canada was made in the last few years. In fact, it may be questioned if ever in the history of the world so great a gain was made by the same number of people in the same time. Part of this change is due to prices. Liberals are not inclined to take unfair advantage in a matter of this kind. However, we can show the position more clearly by comparing Canada's position with that of other countries. I have here a comparison of the trade of the nineteen principal countries of the world, which with the permission of the House, I will put on Hansard:

Comparison of the Trade of the Principal Countries of the World (Years ended December 31, 1913 and 1924)
Foreign Trade (Merchandise only)	Increase (+) Decrease (-)	Trade per Capita	Countries	Net Imports for Consumption	Exports (Domestic)	with 1913	Imports	Exports	1913	1924	1913	1924	Imports	Exports	1913	1924	1913	1924$	$	$	$	%	%	$	$	$	$406,605,000	799,705,000	465,582,000	975,996,000	(+)	96-7	(+)	109-6	46-74	79-24	53-61	99-19370,624,000	635,741,000	354,002,000	602,645,000	(+)	71-5	(+)	70-2	78-30	109-53	74-78	103-83894,865,000	826,554,000	701,475,000	653,095,000	(-)	7-6	(-)	6-9	118-07	108-67	92-55	85-87325,981,000	314,225,000	314,732,000	431,173,000	(-)	3-8	(+)	37-0	13-41	10-26	12-94	14-07594,121,000	766,687,000	781,947,000	1,204,313,000	(+)	29-1	(+)	54-0	1-88	2-40	2-48	3-77659,064,000	795,621,000	436,218,000	1,058,058,000	(+)	20-7	(+)	142-6	87-55	86-23	57-95	114-67208,349,000	367,419,000	170,811,000	329,892,000	(+)	76-3	(+)	93-1	75-08	109-61	61-55	98-411,625,317,000	2,134,250,000	1,327,882,000	2,204,531,000	(+)	31-3	(+)	66-0	41-04	54-43	33-53	56-232,563,331,000	2,174,144,000	2,402,967,000	1,554,954,000	(-)	15-2	(-)	35-3	38-62	36-32	36-22	25-98703,608,000	851,098,000	484,746,000	629,193,000	(+)	20-9	(+)	29-8	20-28	21-92	13-97	16-20363,257,000	1,007,358,000	313,054,000	738,628,000	(+)	177-3	(+)	135-6	6-94	17-23	5-99	12-631,575,036,000	914,451,000	1,239,368,000	642,508,000	(-)	41-9	(-)	47-3	256-35	128-13	201-71	89-25104,101,000	214,287,000	102,123,000	229,298,000	(+)	105-8	(+)	124-6	98-89	158-72	97-01	169-85252,069,000	729,205,000	204,123,000	381,355,000	(+)	189-2	(+)	86-8	12-64	33-44	10-23	17-49226,872,000	' 374,375,000	219,049,000	334,295,000	(+)	65,0	(+)	52-6	40-44	62-33	39-05	55-66370,525,000	478,402,000	265,645,000	381,981,000	(+)	29-1	(+)	43-8	97-99	122-95	70-25	98-17196,516,000	284,399,000	133,970,000	348,499,000	(+)	44-7	(+)	160-3	28-72	40-31	19-58	49-393,207,951,000	5,094,441,000	2,556,234,000	3,555,282,000	(+)	58-8	(+)	39-1	69-68	114-26	55-52	79-741,756,863,000	3,552,494,000	2,448,284,000	4,542,727,000	(+)	102-2	(+)	85-5	18-10	31-63	25-23	40-45
s
>
The Budget-Mr. Vallcmce

The Budget-Mr. Vallance
That brings me, Mr. Speaker, to a very interesting point. We hear a great deal nowadays about Canada exporting her raw materials. One would imagine that we were the only country in the world that exported raw materials. But let us look at the United States for a moment. The report of the United States Department of Trade and Commerce for 1924 gives the following details
of exports by that country:
Raw materials	 $1,302,452,932
Foodstuffs in crude state	 203,348,604
Foodstuffs partly manufactured.. ..	561,801,130
Gords partly manufactured	 595.636,779
Manufactured goods	 1,554,472,575
The United States exports tremendous quantities of raw cotton, but I have never heard the imposition of an export duty on raw cotton suggested. Still, the imposition of an export duty on wheat has been frequently urged on this side of the line.
Now, Mr. Speaker, I should like to say a few words in regard to the duty on automobiles. I expressed my views on this subject on a former occasion when a resolution advocating a reduction in the duty was being considered. But I received a letter the other day, and I thought that if I had the privilege of speaking during the present debate I would bring it to the attention of the House. There are still in western Canada a great many outlying districts remote from railway communication, and the letter in question ilustrates the difficulties from which the settlers in such districts suffer. The 'etter is as follows:
Dear Sir:
The Big Gully Development Association present compliments, and beg your interest in the urging of the build ng of a branch railway line between the north Saskatchewan river and the Big Gully creek.
Many of us have spent almost twenty years in opening up this district and establishing homes, and are still upwards of thirty miles from a railway, which means that practically one-third of our working time is spent on the winter trails.
When we settled in this place it was with the distinct understanding that a line would be built long before this.
At, the time that the average citizen is closing up his business for the day, we start out on the twenty-five mile return trip through the darkness and western cold, which has to be experienced to be understood. This travelling over the everlasting trails is not profitable to us, nor to the country, neither does it become more pleasant with the passing years.
We respectively request your influence with the powers that be to see that this heavy and unfair burden is lifted in the near future.
It is of people such as the writer of the foregoing letter that I am thinking in connection with the duty on automobiles. I doubt whether many of them have reached the state of affluence that would permit them

to buy an automobile, but if it is at all within their power it would prove an immense boon to them. They would be able to transport their wheat by motor truck instead of hauling it long distances by team. It has been figured that we can farm at a distance of twenty-five miles from the railway if we can have the use of a motor truck. The average one-ton truck will travel at the rate of twenty miles an hour but even if it did not cover more than fifteen miles, it would be a great convenience to people who live at such a distance from the shipping point as I have indicated. There are in Saskatchewan many districts such as the writer of the letter indicates. It is of people so circumstanced that the average Saskatchewan member thinks when the duty on automobiles comes up for consideration rather than of persons engaged in the industry, more especially when we consider the enormous profits the industry has yielded to the manufacturers.
I do not wish to occupy any more of the time of the House, but in closing I desire to say this:	In spite of all the blue ruin talk
from hon. gentlemen opposite the facts disclose that Canada has prospered under the present government. With a budget of the kind brought down on April 15 last, coupled with the legislative programme submitted for our approval, there is not much danger but that Canada will continue to forge ahead and enjoy even better times in the future.


Mr. THOMAS HAY (Springfield):: Mr. Speaker, it is not my intention to occupy very much of the time of the House to-night, but I feel it incumbent upon me to make a few remarks upon the budget, and also to deal briefly with some of the problems which are confronting the country at the present time.
At the outset may I be allowed to refer to the speech of the hon. member for Winnipeg North Centre (Mr. Woodsworth) in which he spoke of the delegation which waited on the government some two weeks ago with regard to the cut in the duty on automobiles. The hon. gentleman stated that the members of that delegation did not represent organized labour, in fact, to use his own words, that the large delegation had been marshalled by the employers in the towns from which the representatives came. I believe the large delegation in question represents labour more truly than does the hon. gentleman himself. They represented the 25,000 people engaged in the automobile industries in Canada, and the 100,000 women and children dependent upon those industries. In corroboration of that statement I will read from the Labour Leader, Canada's national labour weekly, published in Toronto,

The Budget-Mr. Hay
and dated April 23rd, 1926, an appeal to the members of the House of Commons to the following effect:
An appeal to the members of the House of Commons of Canada.
Representing, as you do, the citizens of this great Dominion, the Labour Leader on behalf of the men who work in the Canadian automobile factories and the various factories that make parts and accessories, numbering about twenty-five thousand, with about one hundred thousand women and children dependent upon them, earnestly request you to refer the clause in the budget that deals with the tariff on motor cars to the new tariff commission, so that these workers may have an opportunity of placing their views before them. Gerutlemen, forget your political parties, and lend a hand to these hardworking toiJers.
There is another article along the same line in tfhe Labour Leader but I will not take up time by reading it at present. Yet in the face of articles of that kind, coming from the official organ of the Labour party in Canada, the hon. gentleman in question has the temerity to stand up here and say those people did not represent organized labour.
I desire to refer to some remarks made by the hon. member for Lisgar (Mr. Brown) when he was speaking on the budget a few days ago. The hon. member tried to intimidate some of the hon. members from Manitoba on the matter of their vote on the budget. He said that we would be watched closely and that he and his colleagues would make it a point to inform the electors of our respective constituencies as to how we voted on the present budget. In reply to the hon. member I wish to say that, so far as I am concerned, he can go out into the highways and byways in my constituency and tell the people all he knows in connection w'ith this matter. He can tell them how I voted and what my attitude towards the tariff is. I fancy the hon. member will be kept fairly busy in his own constituency in explaining some things. The hon. member for Brandon (Mr. Forke) a short time ago gave an interview to a Star reporter in Toronto, and I desire to place the report of that interview on Hansard, because I want the people of my constituency at any rate and the people of western Canada to know where that hon. member stands. The interview reads:
"After all," said Mr. Forke, "Progressives are simply Liberals in action. I believe Mr. King is a Liberal. When I say that, I mean a real Liberal."
And then it goes on to say further:
Mr. Forke denies the stories about wielding the big stick over Mr. King. "There's nothing in it" he said. "I think we're learning by bitter experience that the Progressives can't be as independent as we should like to be.
He practically renounced his independence


Robert Forke: Might I inform my hon.
friend that I publicly denied that statement in the press, and the press have never seen fit to make any reply to my repudiation of it?


Thomas Hay: The report proceeds:
He further stated-
I do not know whether he will deny this or not.
-that he did not expect to see any of the members back from Manitoba after the next general election.


Robert Forke: I have repeated that statement often.


Thomas Hay: The hon. member is reported to have made the statement that the Progressives cannot be as independent as they would like to be, and I know that the statement is going out to the country. If he did make such a statement it will do much to defeat him and his followers in the next election campaign. He denies that he said that they could not be as independent as they would like to be. The hon. member denies that I suppose.


Robert Forke: I have publicly denied that statement printed by the Toronto Telegram.


Thomas Hay: I refer to an interview in the Toronto Star.


Robert Forke: I never gave that interview.
I do not know anything about-the Toronto Star statement, because I never met the Toronto Star man at all.


Thomas Hay: That is taken from the Toronto Star. I do not know whether that is the paper to which you refer.


Robert Forke: I think the statement in the Toronto Telegvam was reprinted in the Star.


Thomas Hay: I cannot vouch for the truth of it, but if there is any truth in it I think it would come as a rude shock to his supporters in Brandon, because I know that the hon. member has in season and out of season declared in western Canada that he would retain his independence, and that his party would also retain their independence in the House.
Before proceeding further, I should like to refer to an article which appeared in the Manitoba Free Press on April 3, 1926, entitled "Manitoba M P.'s and Protection." The article says in part:
In the last election six Conservatives were returned from Manitoba, and having regard to the traditional Views of that, province on the tariff, it was thought that with the exception of the Right Hon. Arthur Meighen they would act as a brake on the wheel of the Conservative protectionist chariot.
The Budget-Mr. Hay

Then it goes on to say:
Careful reading of Hansard will show that all of the Manitoba Conservatives have defined their positions with the exception of Thomas Hay of Springfield, and T. G. Murphy of Neepawa, who have bravely declined so far all opportunities to speak, and who are indeed the only bushel covered lights remaining in the opposition so far.
In reply to that article I have only this to say, that so far as the principle of protection is concerned I believe in it. I am a protectionist and believe that protection is the only policy that will make Canada a prosperous country. Whilst almost every other country in the civilized world to-day is raising her tariff and protecting the industries and the home market, some Canadians are the only ones to-day who are preaching free trade in the face of what is happening in the world, and I cannot understand how the doctrine of free trade can be preached when all other countries are preaching and practising protection,. The Free Press need have no doubts as to where I stand so far as protection is concerned. I believe in a protective policy and I preached that policy from every platform in my constituency during the last campaign. I believe in a policy of protection that will, first of all, protect our Canadian industries, that will protect our Canadian workingman, that will protect their jobs and protect our natural resources; a policy of protection that will protect the Canadian farmer as well and protect and build up his home market.
I wish to refer to a speech made by the hon. member for Rosetown (Mr. Evans) during the debate on the Address in reply to the Speech from the Throne. That hon. member declared himself to be a free trader. Mr. Michael Clark was accounted as the apostle of free trade in this country for some years; his mantle must have fallen upon the shoulders of the hon. member for Rosetown. That hon. member is a reformer, and I believe a reformer of the destructive type, as I will try to show in the course of my remarks. Some hon. members on my extreme left laugh, but I think after I get through they will conclude that I am absolutely correct in what I say. That remark applies to the hon. member for Lisgar (Mr. Brown), the hon. member for Brandon (Mr. Forke), the hon. member for Winnipeg North Centre (Mr. Woodsworth), the hon. member for North Winnipeg (Mr. Heaps), the hon. member for Southeast Grey (Miss Mac-phail). I think these hon. members can all be included in the one class.
The hon. member for Rosetown (Mr. Evans), speaking on the tariff during the debate on the Address in reply to the Speech from the Throne, said that he believed in free

trade. He said further at that time, speaking of our industrial institutions, that they were built up on hothouse methods and that they must be destroyed, put out of the way. Consequently, I say that the hon. member is of the destructive type, the Carrie Nation type, if I may use the expression. Carrie Nation flourished in the United States a few years ago as a reformer, a reformer too of the destructive type. She used to sally forth with her little axe and destroy everything that came in her way. As regards the hon. member for Rosetown and the others whom I have mentioned, while their little tomahawks are not much in evidence at the present time, I feel that if their policies were put into effect they would be more destructive than Carrie Nation's little axe.
I should like to refer to a speech made by the hon. member for St. Boniface (Mr. How-den) who I am glad is in his seat. It was the hon. member's maiden speech in this House, and while it was well and forcibly delivered I for one cannot agree, and I am sure very few members on this side of the House will agree, with the conclusions arrived at by that hon. gentleman. Speaking of the tariff he said that if it so happened that during the night all the industries from one end of Canada to the other were wiped out of existence, while the country would receive a very rude shock it would eventually recover from that shock and the people engaged in those industries would eventually drift to the land and become producers. That has not been the experience of the Canadian people during the last four years.


Mr. HOWDEN:: That is hardly a correct statement. I said that those who had been engaged in industrial operations would probably find their way to the land or to other places.
Mr. STEWART (Leeds)): To the United States principally.


John Power Howden: Yes.


Thomas Hay: To the land. I say that that has not been the experience of the Canadian people during the last four years, because we find that those who have been engaged in our industries, when those industries have been closed or forced out of existence by the policy of the government opposite, have drifted over the border into the United States. The hon. gentleman went on to say that this would not affect the farmers. I do not want the hon. gentleman to misunderstand me; this is what he said in effect, if not in so many words. He

The Budget-Mr. Hay
said that the farmers would continue raising their crops and selling them in the markets of the world. That might apply with some force to the producer of wheat or other grain because, on account of the splendid quality of the wheat that we raise in Canada, it has always been possible up to the present to find a market for it in the markets of the world. But the day is coming when it will perhaps not be possible to market all our wheat abroad because other countries are fast increasing their production and coming into the market as our competitors. Consequently we must realize that our home market is of some value.


John Power Howden: Does the hon. gentleman not know that there is always a market for the best article on the market?


Thomas Hay: I say that the hon. gentleman's remarks might apply to producers of wheat and other grain, but he must bear in mind the fact that many hundreds and thousands of people in the Dominion of Canada are to-day engaged in other lines of agriculture such as market gardening, dairying, poultry raising and so on.


John Power Howden: Would the hon. gentleman not say that our dairy products find their way to the markets of the world?


Thomas Hay: Very little. I believe the statement made by the Minister of Agriculture (Mr. Motherwell) with regard to butter was that out of 275,000,000 pounds produced by Canadian producers only 25,000,000 pounds found a market abroad.


John Power Howden: What happened to the
rest?


Thomas Hay: I will refer to that later during my address. As I say, while the hon. member's statement might apply to those who are engaged in raising wheat, the other people to whom I referred a moment ago-gardeners, truck farmers, dairy producers and poultry raisers-must depend daily on the home market. They place their goods on that market daily and if we do anything to injure or destroy that market, we shall put that class of people practically out of business. Our hon. friends opposite lose sight of the value of the home market; they forget that there is a value in the home market.


John Power Howden: Does the hon. gentleman think Canada as a whole would suffer very greatly if those people were put out of business?


Thomas Hay: I would indeed. I want to make another prediction and say to the hon. member for St. Boniface that during the recess of parliament following prorogation he will not go back to the rural district of St. Boniface and make that same speech. If he does,
I want to be there to hear it and see the reception he gets.


John Power Howden: The hon. member will
certainly get an invitation.


Thomas Hay: I desire to quote from a letter which I received from a gentleman who lives just adjoining the constituency of the hon. member for St. Boniface. He is an old-timer, a descendant of one of the original settlers. He is a man of wide experience who, I think, is well known to the hon. member. This is what he has to say regarding this matter:
If an opportunity affords you in the House our gardeners need protection from especially the early stuff being dumped from the United States so that when our products are ready the price is down to nothing.
Then he says further:
It was one of our members who won a prize at the Royal show, Toronto, last fall with his collection of vegetables.
That is a pretty good recommendation for ths gardeners of Manitoba.
The Progressive party, in advocating certain policies which they have been advocating ever since they first came into this House as a group, such as the policy of free trade and the cutting off of the duty on all agricultural implements, or implements of production, as they generally term it, are in my opinion rather narrow in their outlook. They are somewhat restricted in their vision in advocating such a policy. I suppose they are sincere in their beliefs, and they seem to think that if the policy they propose were put into effect they would be able to buy binders, mowers, ploughs and other agricultural implements cheaper than they can get them to-day. They remind me of the story I used to read as a schoolboy, of the dog which while crossing the brook with a bone in his mouth snatched at the reflection in the water, mistaking it for another and better bone than the one he had. He lost the one he had and found that there was no other. Hon. gentlemen put me in mind of that fable: they are quite ready to grasp at the shadow, taking a chance on losing the substance. They are willing, indeed, to sacrifice other industries in order to advance the interests of their own, failing to see the fallacy that underlies such a policy. That is not a national policy; it is not a policy that should commend itself to the people of the country. In my opinion

The Budget-Mr. Hay
it is a policy which the Canadian people when they have an opportunity will reject.
With regard to the budget and the speech of the Minister of Finance in introducing it, I have no doubt that when placing his annual statement before parliament he really felt that he was offering something that would be satisfactory to the people at large. It seems to me, however, that after it has been analysed and carefully looked into the budget as a whole will not appeal to the people. They will not be quite so enthusiastic about it as the minister and the government evidently assume. It is not such a budget as will appeal to the common people, the labourers of Canada; it will to a greater extent affect the people of means. It may take from such people something more in the way of income tax, and I have no objection to that, because in mj' opinion no man with an income of $5,000 or $10,000 should be reluctant to pay a fair share of taxation. But so far as the poor man is concerned, the budget offers no great relief. The present proposals will not tend to any great extent to relieve the poor people of Canada of the burdens which they are bearing to-day, so that when the government refers to it as the poor man's budget they are misapplying that term. We must however give the Minister of Finance credit for candour in presenting his statement. I admire the rugged honesty he showed in informing the House at the outset that (he reason he was able to submit to the oeople what he considered a satisfactory budget- and he made no bones about it-was because bountiful nature had blessed us with a good crop during the past year. He is quite right in that. It is not by reason of any policy of the government that we are enjoying some measure of prosperity to-day; it is simply because bountiful nature has been kind to us.
When the minister speaks of the prosperity which prevails just now, I want to refer him to an item of news which appeared in the Ottawa Journal some time ago. No doubt he will discount it, seeing the source from which I take it. However, the article in question refers to a statement made by a labour delegate at a meeting held in the city of Ottawa on February 20, I bell p.m.	lieve-the date does not appear
-to the effect that there were in Ottawa at that time over 6,000 men out of employment and that their families were practically facing starvation. Now, I would ask the Minister of Finance whether there is any use in any government or any set of men telling the country that we are prosperous while such a condition of affairs exists.

Could the Minister of Finance possibly convince any one of those 6,000 men that conditions to-day are prosperous? Could he make any one of the hundred thousand men who are out of employment throughout Canada at the present time believe that general prosperity prevails? I say, while he may be sincere he is beside the mark in stating that this Dominion as a whole is prosperous. I appreciate the fact that a measure of prosperity does exist in certain districts, and particularly among the market gardeners and farmers, the men who, my hon. friend from St. Boniface says, would not be hurt if they were deprived of the home market. It is useless to talk about prosperity under present conditions. I certainly do believe that we are on the eve of a great era of progress if only we can secure a sound policy under stab'e government. There is nothing that could stop us unless it were an unstable policy such as the policy now in force, which is undermining public confidence in our institutions and in representative government. Here we have supposed representatives of the people promising at one time to stabilize conditions, and at another, without any warning, introducing such changes as will throw thousands of men out of employment.
I want to refer for a moment or two to some remarks made by the Minister of Agriculture (Mr. Motherwell) during the debate that occurred on the Australian treaty, as well as during the discussion of other treaties consummated by this government. During the consideration of the Australian treaty protests came in, I think I am safe in saying, from every province in the Dominion, against the unfair competition to which our people would be submitted in consequence of that and other treaties entered into by this government. One or two of those protests I wish to read to the Minister of Agriculture for his information, because at the time, in my opinion, he treated them very lightly,
I have a quotation here from Three Rivers, Quebec, dated February 26, 1926. in connection with which I would like to make some remarks. It says:
A plea for adequate protection for Canadian butter against foreign competition was made this evening by Frank Byrne, of Charlesbourg, first vice-president of the General Breeders' Association of Quebec, at the closing meeting of its thirty-fourth convention.
"If we could produce 15.000,000 pounds of butter more annually." said Mr. Byrne, "we could sell them, but a difficulty arises in the way of success. Other countries threaten to sell their butter here. We ought to hit foreign butter as hard as foreign countries hit our butter. Duties as high as those established bv foreign countries ought to be imposed here, and 1 hope that the government will see to it."

The Budget-Mr. Hay
That is one of the protests which came to the Minister of Agriculture during the discussion of these treaties. With reference to this particular article I would like to say that these people who met in convention in Three Rivers must have represented the Conservative party very largely, because it will be noticed that in the resolution passed by that convention the brick for brick policy denounced by hon. members opposite is advocated. That is the tariff which the Conservative party has been advocating, so far as it relates to the products of the Canadian farmer, and that is the tariff which those people believe in. When our friends opposite from Quebec try to show by figures that .the vote on October 29 last throughout Canada was in some respects favourable to the Liberal party, I want to tell them that the vote in Quebec must have been largely for the policy indicated by this article, the policy advocated by the Conservative party in Canada. We can take no other meaning from the article I have just read.
We had other (protests from the provinces of Saskatchewan, Alberta, and particularly from British Columbia. In Manitoba also a resolution was passed somewhat similar to the one passed in Quebec, reading as follows:
That the National Dairy Council appoint a committee to wait on the federal government to urge adjustment of the Australian treaty.
When these protests were coming from all quarters and from almost every province in the Dominion, the Minister of Agriculture insulted the dairying interests by his attitude at that time with respect to their protests; his language was an insult to the dairying interests of Manitoba. When these protests were coming in the minister said that if the dairying interests of Canada would devote more time to improving the quality of their butter rather than to making protests against trade treaties between Canada and Australia, they would do more good. Our butter has a reputation on the markets of the world for quality, Mr. Speaker, and when the. hon. minister makes that statement he is unfair to the dairying interests of the Dominion of Canada.


Mr. MOTHERWELL:: I think my hon.
friend is not quite fair. Surely I did not put it in just that way. Has my hon. friend the statement?


Thomas Hay: The minister went further, and
belittled the dairying interests of this country.


William Richard Motherwell: Oh no; my hon.
friend goes too far.


Thomas Hay: He even went so far as to insult the good old Canadian dairy cow as well. He said that the unit of production was the dairy cow, and that if we wished to compete successfully with other countries we must improve the productivity of the dairy cow. In my opinion-and I know something of farming and of cows-the good old Canadian dairy cow has been doing her duty by the people of Canada for many years, but I fail to see that the Minister of Agriculture is doing his duty by the Canadian dairy cow.


William Richard Motherwell: Does the hon.
gentleman know the production of milk per cow in Canada?


Thomas Hay: I say the minister is not doing his duty by the Canadian dairy cow, because he is placing her up against an unfair competition from outside sources; he is placing her up against competition that she cannot successfully meet. At a time of the year when our dairy cattle are being housed, with dry feed, it is impossible to meet the competition of the Australian or New Zealand dairy cow which, at that season of the year, is out on the green pasture; when her flow of milk is greater than the flow of milk from the Canadian cow at that season. When the minister speaks of improving the quality of Canadian butter, I want to refer him to a letter received from the External Trade branch of the Dominion Bureau of Statistics, dated February 10, 1926. In response to a request for information from this department in connection with the Manitoba dairying interests I received this reply, which is headed, "Dairying in Manitoba." I will only read part of the letter, as I do not wish to take up too much of the time of the House:
Three hundred and fifteen carloads of creamery butter was shipped out of the province of Manitoba last year, or a total of 126,000 fifty-six pound boxes, totalling 7,056,000 pounds valued at $2,416,680. The most of this butter was shipped direct to the British market during the summer months of heavy production, and when the butter was fresh and in the best condition. Manitoba butter has given excellent satisfaction on the British market.
That was from Manitoba alone, a province only in its infancy as regards dairying. Then the letter goes on to state that most of this butter was shipped direct to the British market, during the summer months of heavy production, and that it had given excellent satisfaction there.
It will be seen from that letter that our Canadian creamery butter, particularly, has a
The Budget-Mr. Hay

very high reputation for quality in the markets of the world, and consequently I think it ill becomes the Minister of Agriculture to belittle the quality of that butter.
I should like to give a quotation as to the effect of the Australian trade treaty on the butter situation in Canada. I am sorry that my friends of the Progressive party have deserted the chamber. I was going to say to them that if the statements attributed to the hon. member for Brandon in the interview which he denies were true, they could no longer be called Progressives. I think the term applied to them, and which they resented very much some years ago, could truthfully be applied to them at this time if the statements credited to the hon. member for Brandon were correct; and that term was that the Progressives were but a dilapidated annex of the Liberal party.
I will now give the quotation from the Scoop Shovel, in its issue of April, 1296. This publication is the official organ of the Manitoba Co-operative Wheat Producers Limited and of the Manitoba Pool, and is published in Winnipeg. It says:
Prices of dairy products for the past few months have been very remunerative to the producers, but we arc reaching a stage where we must be prepared to accept lower prices on account of importations of Australian and New Zealand butters, largely due to the more favourable conditions brought about by the action of the government in entering into the Australian treaty which lowered the duty against the entry of Australian butter. Had this butter not been brought in we could have expected a steady market for at least the month of April or until the season of heavy production, when the production of Canadian butter exceeds the consumption.
Coming from such a source, this view should have some weight with the hon. Minister of Agriculture.
It is evident, Mr. Speaker, that some kind of family compact exists between the Liberal party and the Progressives. In that connection I should like to remind my Progressive friends that the Minister of Agriculture, speaking in the town of Selkirk, Manitoba, made the statement that the greatest block on the wheels of progress in this country to-day was the Progressive party. I do not know whether he will deny that or not, but I believe his statement is absolutely correct. While there is evidently some agreement existing between these two groups, some kind of unholy alliance, there is evidently no love lost between them, for I notice that at a Liberal convention at Edmonton in the province of Alberta, held the other day, which was attended by Liberal representatives from all over the province, a gentleman was chosen 
as the provincial Liberal leader by the name of Shaw. I have not the honour of knowing him, but no doubt he stands high in the councils of the Liberal party. I believe that he at one time deserted the Liberal party to which he originally belonged, joined the Progressives, and now after a time has gone back to his first love. Mr. Speaker, his very first act after being chosen leader of the Liberal party in Alberta was to make an attack upon the Progressives of the province of Alberta and upon the Progressives of the Dominion generally. I want to place these words on Hansard because I may have oe-casion to refer to them if I ever go before the electors again. The newspaper report says:
At the afternoon session, Joseph T. Shaw, newly elected leader, launched an attack upon the Farmer government of Alberta, terming it one of inaction.
That describes the attitude of the Progressives, not only in Alberta, but in the Dominion as a whole.
I do not wish to take up very much more time, Mr. Speaker. In conclusion, there is no reason to my mind why Canada should be to-day not merely one of the most prosperous countries of the world, but actually the most prosperous country in the world. With its immense areas of fertile agricultural lands, with its great areas of timber, with its wealth of fisheries, with its vast undeveloped natural resources, with its great possibilities for the production of cheap hydro-electric power, there is no reason why Canada should not be the most prosperous country on the face of the globe. But the fact is, Mr. Speaker, that confidence in this country has been undermined by policies which have been unstable and unsound, and until we put into effect sound and stable policies we cannot expect to have that general prosperity which every Canadian would like to see in this country. Our great natural resources, when properly developed, should make this country the richest in the world. It is estimated that some 19,000,000 horse power of hydro-electric energy can be developed in the Dominion, and I am proud to say that some five or six million of that amount can be developed in the province of Manitoba alone. With a proper policy, this source of energy will make not only Manitoba prosperous, but the Dominion as a whole. It only requires sound and proper policies to develop our great natural resources and make this country the greatest and most prosperous in the world. There is no reason why we should not attain

Dumping Duty
that happy position. I thank you, Mr. Speaker, and the House for your kindly attention.
On motion of Mr. Heenan the debate was adjourned.
On motion of Mr. Motherwell the House adjourned at 11.22 p.m.
Tuesday, May 11, 1926