1928-04-17

REPORTS OF COMMITTEES

[Stage Direction]
Third report of the select standing committee on railways and shipping owned, operated and controlled by the government-Mr. Goodison.
Fourth report of the select standing committee on banking and commerce-Mr. Hay.
[Stage Direction]
Report of the board of audit on the financial affairs of the Quebec harbour commission-Mr. Robb.

[Stage Direction]
CORRESPONDENCE, REPORT OF ADVISOR"? COMMITTEE AND REFERENCE TO SUPREME COURT
Right Hon. W. L. MACKENZIE KING (Prime Minister):: I beg to lay on the table
correspondence between the governments of Canada and the United States in 1927-28 with respect to the St. Lawrence waterway project; the report of the international advisory committee, dated January, 1928, and observations thereupon by certain of its members, and orders in council referring to the Supreme Court of Canada certain questions as to water-power rights of the Dominion and the provinces. I must express to my hon. friend opposite (Mr. Bennett), and to the house, my regret that owing to the early adjournment last evening I was not in a position to table these papers as I had hoped to do. I fully expected to be present to table the documents, but the adjournment took place earlier than was anticipated. I wish to move, seconded by Mr. Robb:
That 2,500 copies in English and 1,500 copies in French of the St. Lawrence waterway project papers now tabled be printed forthwith, and that standing order 64 be suspended in relation thereto.

St. Lawrence Waterway


Hon. R. B. BENNETT (Leader of the Opposition):: I quite appreciate the statement made by the right hon. the Prime Minister with respect to this matter, but I cannot but think that having regard to the circumstances that must have been present in his mind he might have tabled the documents at six o'clock before the house rose, for the press had them in their possession since the morning, although not to be used until later, as I understood at midnight; and the members of parliament might have been entrusted with the same documents at six o'clock or at eight o'clock at any rate. It is true the house adjourned rather earlier than was expected, but on the other hand the Prime Minister knew of his engagement and I am sure that if he had intimated that he would be absent from the house, they could have been laid on the table by one of his ministers at eight o'clock. I cannot think it is using parliament quite right to have these documents published in the newspapers and widely known to a very considerable number of people before we have any knowledge of them at all. I hardly think that is consistent with the dignity of the house. I do not, however, for a moment think that the Prime Minister wittingly adopted that method of dealing with documents intended for the information of the house.
The motion with respect to the printing of the documents enables me to say something further in connection with another matter of the same kind. Not long since, a document was published in a Toronto paper before it became known at all to the members of this house. I understand that the explanation of it is that the commissioner who made the report gave a copy of it to the newspaper thereby enabling it to be printed. That is, it seems to me, a very reprehensible practice and one that this house should not at all sanction. A report that is to be laid upon the table of the house should not be given to the newspapers until such time as it has been tabled. The adoption of a contrary course is really an insult to members of parliament. I investigated this matter at the time, and my information led me to conclude that the government was not to blame, but rather the commissioner who made the report. I think that principle is quite wrong. Certainly members of parliament should enjoy as much latitude in connection with matters of this kind as the press of the country.


William Lyon Mackenzie King: May I say
that I agree entirely with my hon. friend in all that he has said as to the procedure which should be followed, but I think the house will
see in a moment that it was a pure accident that hon. members did not receive these documents last night as was anticipated. In the first place as to the press having copies of the correspondence, my hon. friend knows that with respect to important documents of any length it is sometimes the practice to give copies in advance to the press on the undertaking that they will not be released until a certain time. In connection with the correspondence between the United States and Canada on the St. Lawrence waterway project the understanding was that the press in both countries should receive the documents on Monday at the latest, and the Canadian Press on Saturday night, but that the press summaries of the documents were only to be released for Tuesday morning's papers-


Richard Bedford Bennett: After midnight.


William Lyon Mackenzie King: Yes, the purpose being to enable the Canadian Press and the Associated Press to send full despatches and obviate the necessity of individual correspondents telegraphing lengthy communications to their respective papers. It was intimated to me by members of the press gallery that in the case of these papers it would not be advisable to confine the copies that were being given out to the Canadian Press, but that they should be given to all the members of the gallery on the understanding that they would not be released in any case until after the adjournment of the house on Monday night. This was agreed to and I have every reason to believe that the members of the press in that particular have kept faith with the government.
As to tabling	the	papers	at	six	o'clock, Imay say to my	hon.	friend	that I	had themin my desk and the thought entered my mind to table them at the hour mentioned when I recalled a conversation I had had with respect to the hour of tabling and mention of the- fact that what would be regarded as an early hour here was still earlier in some parts of the western states and western Canada, and that it	would	be	breaking faithwith others to	allow any	of	the	afternoon
papers to receive in advance any intimation at all of what was in the documents. Therefore I deliberately refrained from carrying out the thought I had at the moment of tabling the papers at six o'clock.
Now as to the events of the evening, I fully expected to be in the house not later than half-past nine. As a matter of fact I was in the house by twenty minutes of ten. In the interval, however, the house had adjourned and I had no alternative but to defer tabling the papers until to-day.
Federal District Commission


Sir GEORGE PERLEY:: I should like to ask the. Prime Minister a question. Could he not have intrusted the leader of the opposition and the leader of hon. members to the left of Mr. Speaker with copies of the correspondence on the same terms as in the case of the press?


William Lyon Mackenzie King: I should have been very happy to do so, had I thought my hon. friend might have wished to have the documents in advance. Another time I shall perhaps profit by this experience and see that he gets them a little in advance. As a matter of fact the documents were in my desk in the house and had it been anticipated that adjournment was to take place when it did some of my colleagues might readily have opened the desk and tabled the papers before the house adjourned. I think however everyone now has full information in the form in which it will be found most accessible.


Mr. CHURCH:: Will an opportunity be
given to resume the adjourned debate on this question?


William Lyon Mackenzie King: With respect to debates to be brought up in the house we shall have to follow the rules.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On motipn of Mr. W. T. GOODISON (West Lambton), the third report of the select standing committee on railways and shipping owned, operated and controlled by the government, was concurred in.

[Stage Direction]
Hon. J. L. RALSTON (Minister of National Defence) moved the third reading of Bill No. 197, to amend the Militia Pension Act.
Motion agreed to and bill read the third time and passed.	[DOT]

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the third reading of Bill No. 19o, to facilitate the provision of storage in Lac Seul in the province of Ontario, and to repeal the Lake of the Woods Regulation Act. 1921.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
Hon. ,T. A. ROBB (Minister of Finance) moved the third reading of Bill No. 201, re-

specting a certain treaty of commerce and navigation between the United Kingdom and Spain and a certain agreement between the United Kingdom and Spain regulating the treatment of companies.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
On the order:
Resolved, That the Federal District Commission Act, 1927, be amended to provide,
1.	That the period for the payment of the annual grant to the commission, at present fixed at sixteen years from the first day of April, 1927, be extended to thirty years from the first day of April, 1928, the said annual payment to remain at the sum of $250,000;
2.	That the commission may issue securities and the Governor in Council may authorize the guarantee of the payment of principal and interest thereon, the proceeds to be deposited to the credit of the Minister of Finance in trust for the commission and released by the minister in his discretion for the purposes of the act;
3.	That a sinking fund shall be created and maintained by the commission out of its actual annual income to provide sufficient funds to redeem such guaranteed securities as they respectively become due, and the provisions of the Expropriation Act instead of the Railway Act shall be made applicable to proceedings of the commission.
William Lyon Mackenzie King: My purpose in having this number called is not to proceed with the resolution but to ask the permission of the house to withdraw it in order that I may substitute a resolution ini somewhat different terms. If consent is given, I move that the resolution be withdrawn and that the order be discharged.


Richard Bedford Bennett: Carried.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The house resumed, from April 13, consideration in committee of Bill No. 199, to amend the Dominion Lands Act.-Mr. Stewart (Edmonton) Mr. Johnston in the chair.
The CHAIRMAN:: When this bill was last before the committee certain progress had been made. Section 1 had been struck out. The committee were considering what appears as section 2 in the bill and which will now become section 1.
On section 2-Second homestead.


Hon. CHARLES STEWART (Minister of the Interior):: I move to amend this clause in the thirteenth line by changing the figure "8" to the figure "5", and by striking from

Dominion Lands Act
the fourteenth and fifteenth lines the words "in the discretion of the minister". The clause will then read:
Provided, however, that any person who on the first day of January, 1925, had obtained or had become entitled to letters patent for a homestead as aforesaid, may be granted the right to make entry for a second homestead, subject to the provisions of this act.


Mr. DONNELLY:: I would like to know
why the change has been made to 1925. If a man is entitled to a second homestead who has become entitled to letters patent for his homestead before January 1, 1925, why should not that apply to the man who has become entitled to letters patent in 1926, 1927 or 1928?


Charles A. Stewart: The criticism of the clause as it was originally drafted was that it would give rise to speculation, although frankly I do not agree very much with that criticism. At all events, this provides for a longer interval between the dates on which a man has proved up and received letters patent for his homestead and the date upon which he may make application for his second homestead. It may tend to prevent an individual proving up and then at once selling his homestead and making application for a second one. On the whole, I think the precaution is a wise one.


Mr. EVANS:: Does this provision apply to
the whole of the western provinces or only to the dry area?


Charles A. Stewart: To the whole of the western provinces.


John Evans: When this scheme was first
projected, it was with the idea of giving a chance to those homesteaders who had failed to establish themselves in the dry parts of Saskatchewan and Alberta particularly. When we were called into conference last year at Regina, some of us understood that that was the purpose of the whole scheme. I must say now, as I said then, that I am opposed to giving a second homestead indiscriminately to all who may feel disposed to apply for it. It is going to upset tremendously conditions throughout western Canada. It will mean more vacant homesteads; the weed crop itself will be a considerable trial to the municipalities, and speculation and other factors will enter in so that conditions will not be improved by giving the second homestead indiscriminately to all who wish to apply for it. I would confine the application of this act to those who have settled in the dry areas and failed to establish themselves as they expected.


Mr. FRASER:: Does this apply to the
Peace River country and the land in the railway belt of British Columbia?


Charles A. Stewart: No, just to the crown lands open for homesteading.


John Anderson Fraser: There are crown lands
open for homesteading in the Peace River country, are there not?


Charles A. Stewart: In the
Peace River block, yes, but not very many of them.


John Anderson Fraser: And in the railway belt
also.


Charles A. Stewart: Not in the
railway belt.


Mr. STEVENS:: Oh yes. I think the minister is mistaken. There are pre-emptions granted in the railway belt.


Charles A. Stewart: That is
different.


Mr. VALLANCE:: I wish to say a few words in support of this measure. It is true, as the hon. member for Rosetown (Mr. Evans) says, that when we gathered in Regina to discuss this matter, he took the attitude there that he takes here to-day, but some others of us voiced the opinion that this was good legislation for various reasons. I know that in the particular district from which I come we have been homesteading for some twenty years, and we find there many good Canadians who have come in from other parts of Canada, particularly from Ontario, and immigrants from overseas. We find families who settled in that district eighteen and twenty years ago, with four or five of a family. Some of those families to-day have two or three boys who are in a position to take up a homestead, and who under the existing law could take up a homestead, but they do not wish to leave the family roof, and if the father can be given the opportunity of taking up a second homestead, it will keep the family united. I believe that that is a good thing, and from my own experience in homesteading I believe that those people who have already had experience in homesteading will be an asset to any new country that is being opened up. As conditions are to-day, these people cannot extend their activities in the district where they are already located because of the high price of land, and the result is that the boys are drifting into the towns and cities, but when the father is given the opportunity of taking up a second homestead, a privilege which I think should be granted, the boys will
Dominion Lands Act

come back home and probably homestead again. I am heartily in support of this particular section.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 3 agreed to.
On section 4-Terms of payment.
James J. Donnelly: Has the minister any intention of restricting the provision of this act to the dried out area? The constituency of Willow Bunch which I represent has been considered wholly in this dried out area, and we feel that that is a black eye for the district. We have been farming in there for the last fifteen or twenty years, and we have had crops every year, and we feel that we should not be dubbed as a dried out area. We think the definition of this dried out area should be limited in some way. All through that district we find many returned soldiers living in the towns and unaible to get homesteads because they have no land within the nine miles, and they have to fake either the sale or renting of land before they can file on land. Last fall we opened up a lease in that district, and some of the returned soldiers went in there and faked sales and leases of land to allow them to file on this land. We have farm labourers who have come into that district and worked there for four or five years, living with the farmer, and they cannot go out and take up a homestead, but the farmer's son can. They have to buy or lease land before they can enter on land for a homestead. There are some districts in southern Alberta where probably this might apply, but we do not think it does apply to the constituency which I have the honour to represent. We think this should be restricted.


Charles A. Stewart: When the
bill was in committee on a previous occasion the criticism was that the legislation had worked out very well, but that it would be unwise to widen its scope and throw all this territory south of township 31 in Saskatchewan and Alberta open for homesteading. I suggested that the amendment proposed be stricken out. I may say that I agree entirely with the hon. member for Willow Bunch (Mr. Donnelly). This summer I shall arrange in conjunction with the provincial government and their officials to make a close inspection of the territory mentioned by him and several other hon. members who represent constituencies in southern Saskatchewan, and next session I hope to submit an amendment that will provide for definite sections to be thrown open for homesteading generally.
I Mr. Variance.]


Mr. KELLNER:: From the remarks of the hon. minister I assume that there is no immediate intention to turn over to the provinces their natural resources. With respect to the terms of payment on school lands, as amended by section 4, I do not think the amendment goes far enough to meet the situation in Alberta. I have a return before me showing that at a sale of school lands last fall one Joseph S. McCallum purchased 3,739 acres, and another A. Shandro, purchased 19,677 acres. I think it may be taken for granted that neither one of those purchasers intends to farm the land so acquired. In all probability they found certain farmers were interested in purchasing, and then said, "All right>
you give us a dollar an acre and we will buy the land." I know one man replied that he was quite competent to buy the land himself, and thereupon those speculators ran the particular quarter-section up to $60 an acre, although generally speaking it would not be worth more than $10 or $12 an acre. That was the policy followed all through the recent sales of school lands: unless the farmers gave them a commission to make the purchase they ran up the price ridiculously high. I think it is the intention of those men not to make any further payments unless they can resell the land at a profit; otherwise they are prepared to lose their first payment. It is simply a case of speculation. I think the minister should so amend the act that no one purchaser would be able to secure more than a quarter or a half-section of land.


Charles A. Stewart: My hon.
friend may remember that some ten years ago W. J. McNamara purchased a large quantity of school lands along the right of way of the then Canadian Northern Railway system in northern Alberta. I felt this was an injustice to the people generally, and I spent two or three days down here with the then Minister of the Interior in an attempt to devise ways and means to prevent the recurrence of such a case. But we were met with this very practical difficulty, that all government officials have discovered that the fairest way in which to dispose of school lands is to offer them for sale at public auction. This results in better prices being obtained for the land and provides the most efficient means against fraud that has yet been devised. Of course, it does not prevent an individual from acquiring more land than he intends to farm, but it does have just the effect my hon. friend has mentioned, where a group of farmers get together and arrange not to bid more than a certain amount for any quarter-section. However, that is not the evil that I am trying

Dominion Lands Act
to cure by this bill. My primary purpose is to get a sufficient first payment. We have discovered that one-twentieth is too small an investment on the part of the purchaser to warrant his holding the land if it does not suit his convenience, with the result that he abandons it in very bad condition. I think to dispose of these lands at public auction without any particular restrictions is the best method that can be devised for attaining fair and reasonable prices and thus getting the largest return for the school fund-the object for which the land is set aside.


Mr. IRVINE:: What is the usual term after the initial payment has been made?


Charles A. Stewart: Twenty
years.


Mr. SPENCER:: When was the term
changed from ten to twenty years?


Charles A. Stewart: The change was made by me some three or four years ago.


James J. Donnelly: I do not agree with the Minister of the Interior; I think the terms have been absolutely too lax, with the result that many of our western farmers have gambled in school lands. This change from one-twentieth to one-tenth is a step in the right direction, but still the terms of sale are too easy. The trouble is that a man will buy school lands and not complete his payments, farming them for ten or fourteen years. If the department presses him very hard he will rent the land at fifty cents an acre and continue farming for another ten or fifteen years.


Charles A. Stewart: He can only rent the land pending another sale.


James J. Donnelly: The terms are far too easy. The purchaser should be made to pay in two or three years, just as he would be obliged to do if he had bought from a private individual. If he fails to make his payments the land should be put up at auction and rented at a certain percentage of the upset value. For example, if it was worth $25 an acre, make the rent 8 per cent on that value. Either do that or call for tenders. Many farmers will bid up land to $50, $60 and $75 an acre, and I have seen them bid as high as $80 an acre, with no intention whatever of buying it. They bid it in to control it for the next eight or ten years. He puts up one-twentieth and then sits back and in four, eight or ten years' time he throws it back on the government. He rents the land at fifty cents an acre, and neighbouring farmers who want to rent it cannot do so. This man continues to hold the land at fifty cents until the government puts it up at auction and then 56103-133
he bids it in again paying one-twentieth or one-tenth, and continues ownership. That has been done time and time again in the district I represent. Last summer in two or three sales I saw land run up 50 per cent more than the land was worth in what was nothing but a fake sale, for that land was not sold. The only object is that these individuals may hold the land in this way. Unless we become more strict in our sales we shall not be able to sell our school lands, and they will become polluted with weeds, dirt and so forth, so that they will be worth little or nothing. It seems to me the time has come when we should take measures to enforce more severe terms in connection with these school lands.


Henry Elvins Spencer: I wish to support what
the hon. gentleman who has just spoken has said. Two or three years ago I was informed that the money owing on school lands in Saskatchewan and Alberta amounted to some $3,000,000. As the hon. member (Mr. Donnelly) has said, there are school lands-I know of many cases-where the price was run up to a fair amount and only the first payment was made. That is going on all the time. There are people who hold lands for eight and ten years without paying anything more than the first instalment. In the interests of the country we should in my opinion, be more severe. It is only reasonable, where climatic conditions adverse to agriculture warrant it, to afford the buyers fair opportunity to come through. But where crops are obtained on these lands the department should be more strict than it is at the present time.


Mr. CAMPBELL:: Most of the difficulties
I have observed in connection with school, Indian and other government lands in my constituency have been due to the manipulations of speculators and' not to anything on the part of bona fide farmers. We find a condition out there such as the hon. member for Athabaska (Mr. Kellner) has referred to. A group of speculators will attend sales, and at the particular season of year farmers anxious to obtain lands may not have any money with which to purchase them. The result is that a speculator gets the land cheap; or perhaps a group of them will combine so as to eliminate opposition, and then by the time the regular farmer, the man who really intends to till the soil, to break up the land and make a farm out of it, is ready and anxious to get hold of the land, he finds that the price has gone up $5, $10 and in some cases $15 and $20 per acre. Then what

Dominion Lands Act

does the speculator do? He collects year after year all he can obtain from the farmer without turning one dollar in to the department. If the minister will look over the books in the school lands branch as well as in the other branches to which I have alluded, he will find case after case where land was sold to some speculator, a man who never was a farmer and never intended to farm, and then resold to bona fide farmers at greatly enhanced prices. His game is to withhold the money from the department, and in the cases in which I have had to make representations to the minister's department I have discovered that lands have been held five, six, and in some cases, ten and twelve years. During all this time the farmers have been making regular payments to the speculators while the department has not secured a dollar. I have been able to get the departmental officers in many instances to cancel their undertaking with the speculators and to re-lease to bona fide farmers, with the hope of ultimately selling to them when they are in a position to buy. If we are to avoid trouble of this kind in the future the proper thing for us to do is to compel the purchaser to effect improvements on the land. I would not go so far as to compel him to reside on it because the owner might be a farmer living on his own adjoining farm, But if the department is to avoid a lot of these difficulties in the future and at the same time be just to those who are tilling the soil it would be in the interests of these people as well as to the advantage of the government to impose some specific obligations upon the purchaser in connection with the land. Those difficulties of which I have knowledge in my own district have arisen for the most part in connection with Indian lands, and there are some very sad cases in this regard, where farmers have paid in $1,500, $1,800 and sometimes, $2,000 or more to the speculator, believing all the time that he was keeping up his payments to the department, and after a lapse of ten years he finds to his amazement that not a dollar has been paid by the speculator apart from the initial instalment. Then he is threatened with cancellation. In some cases the cancellation proceedings deprive the farmer of the land which he has been farming. But the speculator has secured his profit and he is not very greatly concerned. I agree with the minister on the reasons he has given for raising the initial payment from one-twentieth to one-tenth. That decision, I think, is sound. I think, however, the minister would relieve his officers of a good deal of trouble, and at the same
IMr. Campbell.]
time do justice to the farmers, if by legislation he compelled the purchaser to carry out certain improvements on the land within a specified time.


Charles A. Stewart: A serious
difficulty suggests itself in connection with the point raised by my hon. friend. In connection with both school and Indian lands we find a good many farmers entering into agreements of sale with people who owe the government money, and never taking the precaution to notify us that the sale has taken place. We know nothing about the matter and we continue notifying the purchaser year after year. We make annual demands for payment and we receive what appear to be reasonable excuses for non-payment. No doubt in a few cases hardship is entailed where payments have been made to the purchaser while no return is made to the department; and this notwithstanding the fact that \Ve have sent out warnings pointing out the importance of our being notified. While we do not intend to be harsh in the collection of these outstanding accounts, I think the purchasers of these lands will realize from now on that we are going to be more insistent than ever that the obligations to the government shall be lived up to in connection with school lands and Indian lands as well. We have had a good deal of difficulty. Times have been bad and we have been somewhat patient, but there does not appear to be any good reason why we should not receive substantial payments and have a clearance of these outstanding obligation within a reasonable time.


Mr. ADSHEAD:: What is the effect of these words in subsection 4:
Provided that the government of the province in which the land is situated expresses its approval of the sale and price in each case.
Does that mean that the government of the province in which the land is situate must consent to and approve the terms of the sale?


Charles A. Stewart: No. It is
by agreement with the province that the sales take place, and by agreement with the province that the interest charges are fixed. With the single exception of the date of sale, the provinces are consulted about all school lands.


Herbert Bealey Adshead: But it says "in each sale."


Charles A. Stewart: That is
necessary in order to cover the situation.


Donald Ferdinand Kellner: I submit to the minister that the most important factor of the sale i3

Dominion Lands Act
not getting a big price for these lands. I think the upset price which is put on the land is the fairer price, and it would be better for the country generally if the land were sold at that price than at a higher rate. Perhaps the minister will remember when the Saddle Lake reserve lands were sold; a large tract of land was sold to two or three buyers, but the department cancelled the sale and later sold the land again. At the later sale no individual was allowed to purchase more than a half-section, and I do not see why a similar clause could not be introduced in this legislation.


Charles A. Stewart: The case is not parallel at all, because a portion of the Saddle Lake reserve was turned over to the soldier settlement board at a fixed rate of $10 per acre, if I remember correctly. They were unable to settle that land, and a portion of it was turned over for local settlement at the same price and with the same adjustment. The only provision we made was to prevent speculation, because the price was fixed, and we intended to prevent any individual from securing an undue portion of the reserve.


Herbert Bealey Adshead: I think the minister
should take into consideration the suggestion made by the hon. member for Mackenzie (Mr. Campbell).


Mr. McLEAN (Melfort):: With reference
to this matter of speculation, it is true that ten years ago there was a good deal of speculation in school lands, for several reasons. One reason was that the land could be secured by a comparatively small initial payment, and the price of grain was exceedingly high. When wheat was worth over $2 per bushel and oats sold for more than $1 per bushel, many men bought land at ridiculously high prices, expecting the high prices for grain to continue. Eight years ago this coming summer oats sold for SI .25 per bushel in the district to which the hon. member for Mackenzie referred, and at that price certainly land would be worth S100 per acre. Men went out and bought land at prices up to S70 per acre before the slump came in the fall; then oats dropped to about one-half the former price, and by the following summer oats of the same quality were selling for about 35 cents per bushel at the same point. If the department had stepped in then and dealt harshly with the people who had bought land, many of whom were not speculators but real farmers extending their holdings, there would have been a great deal of suffering caused and the 5 per cent of the purchase price which had been paid would 56103-133J
have been lost. That situation has been more or less cleaned up in the intervening years; agriculture has become more prosperous, and now is the time to guard against the recurrence of those conditions. The people throughout the western country are looking for an opportunity 'to buy school lands; the sale which was held last year indicated that there was a good demand even for land which was not new and which was not as clean in many cases as it might have been. There is a pretty good demand to-day from many legitimate farmers for this land, and I think this provision under which we will collect 10 per cent of the purchase price instead of 5 per cent will check careless speculating.
The example quoted by the hon. member for Athabaska a few moments ago is something which very rarely happens. Land worth $10 per acre was run up to $60, and of that sum 5 per cent was paid. That payment amounted to $3 or 35 per cent of its real value. The speculator could not run up the price of that land by himself; he had to have competition, and a real farmer does not often run up land to a ridiculously high price, although he will run it up to what it is worth to him because of its proximity to his own holdings. In this case apparently the department already has received 35 per cent of the value of the land, and if this amendment had been in force at that time the department would have collected for the school fund 60 per cent of its real value. In these cases there are two parties to the procedure; first, we have the real owners of these lands, and it is incumbent upon the minister to secure every dollar he can possibly get from these lands for the provincial school funds. At the same time what the hon. member for Athabaska has said must be borne in mind; it is better to sell these lands as nearly as possible at their actual value, because then it is more likely that they will be paid for.
Then just a word about improvements; that is a very loose term, and may include a great deal or very little. The hon. member for Mackenzie does not want to see a man forced to live on the land because that might interfere with his residence elsewhere, and I quite agree with him. But when he asks that the department should request the man to carry on other improvements I cannot agree, because I imagine he means breaking and cultivating the land, and in many cases that is the worst thing that can happen. It would not be a good thing to compel a speculator to cultivate land; the legitimate farmer is going to cultivate his land as quickly as possible, because there is no revenue from it
Dominion Lands Act

while it is idle, but to take steps which would force the speculator to cultivate the land himself would not be good business because in most cases it would become polluted with weeds and would have to be taken in and sold again if the speculator fell down in his payments. If that were done it would not be worth as much as it was worth before anything was done to it. There is a remedy for that condition, which has been working satisfactorily during the last few years. There is no doubt that the wild lands tax which is collected from such vacant lands in the western provinces has compelled large holders of land to either sell their land to someone who will cultivate it or to cultivate and improve it themselves in such a way as to enable them to avoid paying that tax.
I think this amendment raising to 10 per cent the deposit paid in the first instance is a good thing, and at this time, when demands for land are becoming more general, it will help avoid such speculation as we have had. The balance of the question can be handled by administration; this is a good time to tighten up on collections, because as we know any one who suggested in this house or in the country five or six years ago that we should tighten up on collections would not have been very popular, because it was hard for farmers to get along without paying anything on the capital cost of their land.


John Vallance: After listening to this
discussion I think there is a keen desire on the part of the committee to restrict the sale of school lands to bona fide farmers who can buy and pay for them. It has been suggested that by raising the initial payment we will keep out the speculator, but I have spoken to a speculator in land within the last few days who told me that that is not so, that the higher the initial payment is made the greater his chance will be. I quite believe that to a certain extent, because many of the western farmers to-day in those districts where school lands are available are not able to make a very high initial payment. However, we may have this condition; one man may buy school land for $10 an acre, while another man pays from $50 to $60 for similar land. They both fall down on their contracts, appeal to the department, sign a quit claim deed, and then obtain the privilege of renting that land for 50 cents per acre. If in the one instance the land was only worth $10 per acre while the other land was worth $60, surely the privilege of renting the land is w'orth more to the man who had the $60 land than to the man who had the $10 land. The higher price paid for certain land would indicate that the pro-

ductive power of that land is greater, and therefore I think there ought to be a further tightening up of the regulations. I am absolutely with the hon. member for Willow Bunch (Mr. Donnelly) in the statement that the land should be put in a condition where the farmer who is to cultivate it can do so as easily as possible.


John Evans: We have certainly fallen
somewhat on evil times in certain parts of the west during the last few years. With the exception of those in Alberta our people out there have not recovered from the years 1918, 1919, 1920 and perhaps will not for some time to come. I do not wish to see conditions made much harder for those people who are trying to establish themselves in certain districts where the rain-fall is rather scarce. Another thing, I am of opinion that this legislation is very untimely at this stage. Is there such urgency for the sale of school lands that on the very eve of the handing over of their natural resources to the prairie provinces the government feels impelled to pass a measure of this kind? What urgent need is there of this legislation? Does the minister think there is going to be a large sale of school land?	If not what is the
reason for this urgency? I think the whole thing is untimely and might just as well be deferred seeing that we are on the eve of giving to the prairie provinces their natural resources.


Charles A. Stewart: In reply to my hon. friend may I say that while there is every hope their natural resources will be transferred to the provinces the transfer has not yet been effected, and I am sure he would be the last one to suggest that the whole machinery under which those resources are operated should stop. May I assure him that no arrangement of this kind is made without the consent of the provincial governments or discussion with them with only one single exception and that is the plan alluded to with respect to the renting of the land. It is the intention to apply these amendments to lands that fall back on our hands where failure to make payment is made and the purchaser is closed out, and where we may have for one year, or two at the most, the land under lease. Because it is the most unsatisfactory business we have to deal with in connection with the sale of school lands. We much prefer to deal with purchasers rather than with tenants. We have had a great deal of difficulty in that regard. It is not our intention to allow tenancy to continue for more than two years but there will be a public sale of the lands and new purchasers will be sought for them. In the matter of the

Dominion Lands Act
short period that may intervene before there is a resale of the land, and other amendments also, we have been in consultation with the provincial governments concerned.


Henry Elvins Spencer: Has the department any rules by which the buyers of school lands are allowed to keep on with their payments without those lands being put up for resale? i
jfc. .


Charles A. Stewart: After consultation with the provincial governments it was decided not to execute the sale of the school lands, but I may say that I pressed upon them the desirability of allowing the sale of improved lands that were held under lease to go on in order to avoid the difficulties encountered in leasing these lands. So far as I know they are all sold at the present time, but reversions are always taking place. We have to take measures to prevent the lands growing weeds and the obvious thing to do is to lease them for a short period. I trust that period will be very short indeed in future.


John Evans: Have the provincial governments asked for this particular legislation?
M,r. STEWART (Edmonton): Yes.


Henry Elvins Spencer: What I wanted to find out was for how many years can a buyer continue to farm a piece of land after he has made only one payment or before his ownership is cancelled?


Charles A. Stewart: Unless he
suffers an absolute failure of crop we expect a payment every year. That has not been the case. I am free to admit we have been somewhat lenient during the bad years settlers have recently passed through. Now we are making more careful inspection, and where we know the purchaser has had a reasonable crop and should be in a position to make payment, we intend to press very strenuously for payment.


James J. Donnelly: Is there any intention
to change the terms of the lease?


Charles A. Stewart: I tried to
make it clear to the committee that it is not our intention to continue leasing. Just as soon as it can possibly be done we will resell the land.


James J. Donnelly: I wanted to know
whether you intend changing the terms of the lease?


Charles A. Stewart: It is not our intention to do so. We have a very simple method. It is easy of administration and it does not require inspection.
Mr. FAN3HER (Last Mountain):	What
objection would the minister have to stipulating that not more than one half-section could be purchased by any single individual? This would prevent operations by speculators and would give a bona fide farmer a much better chance of acquiring a holding if he desired to do 60.


Charles A. Stewart: If in any
given locality you restrict the purchase to a quarter or half-section, you immediately have collusion amongst the purchasers in the locality and the price will be depressed to that extent. We have found by experience that the easiest method is to allow free competition. I think there is no doubt that the school land fund has profited proportionately by the free competition which prevails in connection with the purchase of these lands, notwithstanding the fact that in some cases the prices of lands do go to unprecedented heights. I want to say that in many cases where high prices are paid we have not the same amount of difficulty in collection, and the reason that I am making the change back to the one-tenth payment down is that most of our difficulty arises from the fact that the actual individual on ordinary priced land, not on land purchased at too high a figure, appears to have good and sufficient reason for delay in making his payments, with the result that he falls into serious arrears.
May I say a word with respect to the improvements? These matters have all been discussed with the provincial governments who are extremely anxious to get the best prices possible, because, as I pointed out a moment or two ago, they are the ones who benefit by these prices. The better the prices are. the more money they have for their school land funds. While one can, find many criticisms to offer, after years of experience these are the methods that have been adopted. I am not averse at all and will agree this year, if we continue to administer these lands, to discussing with the provincial governments the advisability of asking for improvements during the first or second year of purchase; but until I have an opportunity of discussing this matter with them, I do not care to embody such a provision in the legislation.


Mr. COOTE:: I do not object to the
proposal of the minister to ask for an initial payment of one-tenth; but in view of the remarks which have been made by some members of the committee, I should like to suggest that, after a piece of school land has been purchased and several payments made upon it, the department should not be very
Dominion Lands Act



' COMMONS

[Stage Direction]
strict in enforcing payment of the principal, because the unpaid principal as soon as it falls into arrears is drawing seven per cent interest. The minister himself stated that it was the desire of the provinces to get as much money as possible out of these school lands. Once the principal is paid it is impossible for the government to secure a rate of seven per cent interest on it. In some cases I have made representations to the department on behalf of parties who were in arrears on their contracts, but who were keeping their interest paid up. As long as they are paying the interest, and particularly such a handsome rate as seven per cent, I think the department should not press these people for payment of the principal provided they are keeping the farm in good shape. It is good business for the provinces to have this rate of interest coming in.
Milton Neil Campbell: I quite agree with the minister that a sale free from all restrictions may make a better showing on the date of sale; that is, the amount realized at the date of sale might be a little larger than if certain restrictions such as I suggested were attached to the sale, but that does not mean that the government will ultimately secure that amount for the land. The reason I make that suggestion to the minister is that the sales will be good sales. The minister himself knows, and the records of his department will show that scores of these sales are not sales at all. Some speculator secures the land, turns it over to a farmer and expects the farmer to pay up the balance. The speculator collects all he can from the farmer; he stands the department off. and years after, when he has extracted a large amount from the farmer and got his money out of the land, he drops out of the picture altogether. In this way many cases of hardship arise as regards the department as well as the ultimate purchaser, and I think that should be avoided.
In that particular case you might have a very satisfactory showing on the date of the sale but it would not be very satisfactory ultimately to the department. Many of those sales, as I think the hon. member for South Battleford (Mr. Vallance) intimated, were made at a time when land prices were unduly inflated, and just because during a long period these speculators were standing the department off. little or nothing was collected. Now that land is in many cases back on the hands of the department and it must be sold for probably less than half the price it was sold for at that time. My point is that had that land been purchased originally with certain improvement conditions attached to the sale,
fMr. Coot.tf.1
it perhaps would not have sold at as high a price, but in most cases the department would have secured more money than they did on sales made without restriction. I still think the minister would be well advised to insert some such restriction as that in the statute.


Donald Ferdinand Kellner: The minister stated a
fete- minutes ago that he was afraid there might be collusion among the parties. Unquestionably there has been collusion under these regulations, and as regards getting into trouble, I think the minister is in trouble at present. Let us take, for instance, the case that I cited a moment ago of A. Shandro who purchased 123 quarter-sections. I am satisfied he is well known to the minister and I think the minister will admit that unless he sells that land again, it will never be paid for. The only way Shandro can pay for that land is by re-selling it, and I cannot for the life of me see the object in getting him to purchase a large quantity of land like that simply to make some bona fide farmer pay him a commission. The man does not intend to farm and he has no immediate prospect of re-selling the land. He will make his first payment; he will hang on until he runs across some farmer who wants to buy it, and he will then make that farmer pay him a commission. That is not good business for the government of this country to follow and I want even yet to endeavour to persuade the minister to add to this legislation a clause which will limit sales to at most half a section to any one person.


Henry Elvins Spencer: While I agree with the
hon. member for Athabaska (Mr. Kellner), who is trying to limit to a certain extent the purchase of land under the School Lands Act,
I would not limit it to quite such a small quantity as half a section. I think we should put a limit on people buying 25', 50, 75 or 100 quarter-sections. I take it that the main object in selling this land is to get more settlers, but sales made in this way are purely a matter of speculation.
I wish to say a few words with regard to the statement made by the hon. member for Macleod (Mr. Coote). There is something in what he says about not pressing the farmer too hard if the interest payments have been kept up; but my main criticism is that there are too many purchasers of land who are not keeping up their payments of either principal or interest, and in. those cases I think the department should be a great deal stricter than it is. Where they are not paying either interest or principal, their right to the land,

Dominion Lands Act
should be cancelled at an early date unless they are suffering from difficult climatic conditions.


Charles A. Stewart: I shall be
very glad to bring all these representations to the attention of the provincial governments; but inasmuch as this is being done by agreement between the Department of the Interior and the provincial governments, I do not care this year to add to or take from the amendment anything that will materially affect it.
I shall, however, be glad to bring before the provincial government the question of the restriction of individual purchases, although I say very frankly that I shall not advocate it;
I will oppose it, because I think the effect will be exactly the reverse of what my hon. friends expect. I think free and unrestricted sale is the best method of getting the most money out of these' lands. If an individual takes his chance on paying one-twentieth down on each quarter-section that he purchases, he is taking a chance on re-selling or on our closing him out if he is holding these lands for purely speculative purposes. That has not been done in the past, I am free to admit. I have in mind particularly those lands along the old Canadian Northern railway. It is not the intention to allow speculators to hold lands indefinitely out of use. They usually do not do so; usually these lands are leased for grazing purposes; but our difficulty starts when we have an individual farming the land and failing to make payments so that finally we have to close him out. In that case we have the cultivated lands on our hands, and if we do not do something with them they grow up with weeds and we are bombarded by the municipalities to clean them up. That is where our difficulty starts. However, I will make the best presentation possible of all these suggestions to the provincial governments and be prepared, if we are in control, to embody them in amendments next year.


Mr. GARLAND (Bow River):: I do not agree with the minister at all on one point, and it seems to be his chief ground for rejecting now, and expressing his intention of rejecting in the future, the suggestion that has been made by the hon. member for Athabasca. What is the minister going to do with a situation like this? Up in the district of Mundare, we will say, there are school lands to be sold. The people in the district of Mundare, many of them, do not speak English fluently, although a few of them do, of course. Some of them want to buy a piece of these school lands, and a gentleman of a certain delicate type of occupation learns that
there is to be a sale of these school lands, and he goes down amongst these people and says, "You are going to be up against a difficult proposition. Just leave it all to me. You do not need to appear at the sale at all.
I will buy the land for you and look after everything." He makes himself a good fellow, and for a commission proceeds to make the purchase. He buys the land from the department at a lower price than the land- would have brought had he not called off all these people. He will have an agreement with several of these people to get this one a certain piece of land, and that one a certain other piece. There is collusion of the worst type in the open auction sale method, because as soon as that agent has bought the land he goes back to these poor individuals for whom he has purchased it, and in addition to the commission he intends charging, he adds something to the purchase price of the land, and they have no way of dealing with him; they have simply to pay him his price, because the sale is made to him in the first place by the department. It has been called to my attention that many cases of that kind have occurred during the last year in the northern districts where school land sales have taken place. I do not know just how the minister is going to cope with that situation. I think the ideal solution would be to say that no land shall be sold to anyone who is not a bona fide farmer, but the difficulty there is to define a bona fide farmer accurately for the purpose of the act. In the face of that difficulty I think the minister should really take into his sympathetic consideration the proposal of the hon. member for Athabaska, especially in view of the fact that, in spite of the words of the hon. member for Melfort, there is no doubt in my mind but that if the prosperous conditions which my hon. friends opposite so loudly declare exist now in western Canada and elsewhere continue, then inevitably there is going to be a steadily upward trend in the price of land. These men know it. I feel myself that such will be the case, and if conditions in the west are going to be better, and I believe they are getting better now, there is going to be as wide speculation as possible.
I agree with the hon. member for South Battleford that the increase in the initial payment is not going to stop the speculator, but it will stop the farmer who has not much cash in the bank, but has a couple of growing sons for whom he would like to hold a certain piece of land. He has not the money to put up, but Mr. Doctor or Mr. Lawyer or Mr. Somebody else in the nearby town sees there a fine chance for himself. He has the capital,
2098	COMMONS
Convention with Czechoslovakia
and he grabs this land. He knows that the farmer's sons within five years must have the land or get out of the district, and so he says to the farmer, "Don't worry. Just as soon as your boys are ready to take up the land, I will sell it to you, and in the meantime you can use it for grazing." I do not think this amendment will prevent speculation.


Charles A. Stewart: I do not
say so.


Edward Joseph Garland: Nor do I
think it will put the land under cultivation any sooner. Under the old system, if the payment was smaller at the start, there would be more chance of the farmer getting the land and bringing it under cultivation. Frankly, I do not think the minister has made much of a job of these changes, and if the provincial governments have agreed to them, then all I have to say is that perhaps some of them need revision themselves, and some of them quite clearly do.
I think the best point that has been raised so far was raised by the hon. member for Mackenzie and by the hon. member for Athabaska. In my opinion in connection with all these sales of land the attempt should be to get them into the hands of bona fide farmers and bring them under cultivation as soon as possible, and you can best do that, first, by providing that the improvements must be done. They will not always do them, but that provision would help. Secondly, prevent the sale of large blocks of land to any single individual, not more than a section to any individual.


George Gibson Coote: I think it would be good
policy for this government and for the provincial governments interested to say that not more than four quarter-sections of school lands shall be sold to any one man at any of these sales. I know of cases where speculators have bought as much as thirty quarters at a school lands sale, and then have sold that land to the farmers who lived near at an advance in price. It would take the farmer four or five years to pay off the increased value which the speculator had put on the land, and for years the farmer would not be able to pay anything to the department. The department kindly allows them to hold this land without paying interest, let alone principal, and after the farmer has taken four or five years to pay off the increased value which the speculator charges him, he then begins to pay off the department. I think the land would bring just as much if it was sold with a limit of four quarter-sections to any one man, and certainly it would cut out a lot of the speculation that now goes on. The
[Air. E. J. Garland.]
provinces will admit that it is to their interest to get this land under cultivation as soon as possible, as well as to get a good price for the land, and any loss the provinces might suffer by limiting sales to four quarter-sections to any one individual would easily be offset by the less amount of speculation which would take place and by having the land brought under cultivation sooner.


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

[Stage Direction]
The house resumed from April 16 consideration in committee of Bill No. 202, respecting a certain trade convention between His Majesty and the President of the Czechoslovak republic.-Mr. Robb-Mr. Johnston in the chair.
Mr. ROBB:: Mr. Chairman, when the house rose at six o'clock last night doubt was expressed by my hon. friends opposite regarding the words, " most-favoured-nation ", some contending that their inclusion would give Czechoslovakia the advantages of our tariff arrangements with the mother country. I observe that in May, 1925. when we were passing a similar treaty with The Netherlands the then leader of the opposition, the Right Hon. Mr. Meighen, raised the same point. To make sure of our position. I then wired to the representatives of The Netherlands and this is the reply I received:
I have tile honour to inform you that according to a cable dated May 20,'received from the Minister of Foreign Affairs at The Hague, The Netherlands government has not at all the intention to claim the benefits of the said British preferential tariff under article one of said Canadian-Netherlands convention; and furthermore, that in the opinion of The Netherlands government the claiming of the benefits of the said British preferential tariff would not be justified under the text of the said convention.
So there is a clear understanding as to that.


George Halsey Perley: Does the minister think that the opinion he has just read will be effective as against the Czechoslovakian government?


James Alexander Robb: The language is identical in
both treaties, and we have the same understanding with the representatives of that country. There is no doubt in their mind as to the scope of the treaty.
Bill reported, read the third time and passed.

Commercial Treaties



COMMERCIAL TREATIES WITH EUROPEAN COUNTRIES

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved the second reading of Bill No. 203, respecting trade between Canada and Esthonia, Hungary, Latvia, Lithuania, Portugal, Rou-mania, and the Serb, Croat and Slovene Kingdom.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Johnston in the chair.
Richard Bedford Bennett: Perhaps the minister will make an explanation with reference to this bill.


James Alexander Robb: Mr. Chairman, this is similar to the bill dealt with yesterday, with some exceptions. The United Kingdom has made various commercial treaties with world powers, most of them being styled " for commerce and navigation," and it is a general term of these treaties that they do not apply to the self-governing dominions unless the dominion gives notice that it intends to accept the treaty in whole or in part. In treaties with the foregoing countries it has been deemed advisable to accept the clause providing for the mutual exchange of the mostfavoured-nation treatment.
Let me give the committee the figures of our trade with these countries for the fiscal years 1926 and 1927. In 1926 our exports totalled $1,250,693, as against imports of $433,350; and in 1927 the relative figures were $2,374,021 as against $673,760.
In the classes of goods that we export our chief competitor is the United States, which enjoys the most-favoured-nation treatment with each country. [DOT] As our exports are considerably in excess of our imports from these countries, the benefits, both present and potential, are obvious. Several of the countries in question are new, and from time to time there is a gradual adjustment of tariff barriers, and as the United States is entitled to the most-favoured-nation treatment that country would immediately get the benefit of any local adjustment. Canada is now being placed on an equal footing with the United States.
This is the tariff position in each of the countries affected:
Esthonia has recently adopted minimum and maximum tariff schedules. The minimum rate is 50 per cent less than the general.
Hungary. Hungary has one tariff but has special treaty rates with a number of countries. There is also a provision that she can increase the normal rates three times where there is tariff discrimination against her goods.
Latvia. Latvia has now introduced a two-column tariff, the preferential being 50 per cent less than the general.
Portugal. Portugal has two rates, the maximum being generally double the minimum, although sometimes it is greater.
Roumania. Roumania has two rates, and it is provided that non-treaty countries may be called upon to pay the maximum, which is 50 per cent higher than the minimum.
The Serb, Croat and Slovene Kingdom. This kingdom has two rates. The maximum if often three times the minimum.
Lithuania. Early in 1926 Lithuania amended its customs tariff so that goods coming from non-treaty countries might be made subject to a duty of 30 per cent over the present one-column schedule. This new rating was never put into effect, but now that Latvia and Esthonia have adopted conventional rates Lithuania may do the same.
On section one-Short title.


Thomas Langton Church: Mr. Chairman, I am at
a loss to understand how these particular treaties are going to benefit Canada. Great Britain is a free-trade country, and to-day a million and a quarter men are out of work there because of such treaties as these. In a fiscal sense we are in an altogether different position as compared with the mother country. This simply means that we are following in the footsteps of Great Britain and adopting free trade piecemeal. We have given away the Canadian home market to foreign producers, with the result that 700.000 Canadians have had to go to the United States to look for work. As representing an industrial constituency I protest vigorously against this way of doing business. We are simply opening our doors to all the countries under the sun and making Canada the dumping ground for their surplus products and manufactures under a favoured nation free trade policy. One cannot go into any department store in the city I come from without finding on the counters every variety of goods imported from all these countries as well as from the United States, produced under such conditions as it is impossible for our manufacturers to compete against. In these European and Asiatic countries there is depreciated currency and cheap labour and the conditions are such that the Canadian manufacturers are entirely at a disadvantage. Treaties like the Australian, the French and others which this government has entered into, can have only one effect, and that is to destroy our home market.
Commercial Treaties

There is nothing before us to show how this is going to affect the home market here or employment in this country. The result will be the abolition of such little protection as we have. If that is the object, why not strike protection off the books altogether? I attended a convention where the word "protection," I am sorry to say, was not mentioned in any resolution, and the particular resolution in which it should have appeared I opposed. This proposal before us at the present time simply means that we are going to open our doors to free trade with Europe, South America and other parts of the world. We are not given any information as to how agriculture and many of our basic industries will be affected. W'hat we have before us to-day is nothing else than a second budget; that is what it is. It seems that this year we are geting our budget piecemeal-a part prepared by Mr. Moore, a part prepared by the Minister of Finance (Mr. Robb), and a part presented to us in these various favoured nation treaties. This parliament is in the economic position of adopting a "shut your eyes, close your mouth and see what I will put in it" free trade policy.
Why, I venture to say that half the members of this house do not know what they are voting for. Those hon. gentlemen who represent protectionist constituencies are not in the house to protect the interests of their electorate. It seems to me that the Liberal party is aiming at complete free trade such as exists in England. That is their platform -free trade, as they have it in England. As a matter of fact, they have all sorts of platforms, but their fiscal policy is a platform to get in on and not to stand on. As a consistent protectionist I absolutely protest against this sort of thing. I protest against favoured-nation treaties which are going to open the doors of this country wide to all the nations of the seven seas. On the pretext of something called " most favoured-nation treatment", we are making Canada the dumping ground for the surplus products of the rest of the world. The only country under the sun not favoured by this government is the Dominion of Canada; Canadians are the only people on the face of the earth who are not to enjoy any economic favours or a place in the sun. The result, as I say, is that 700,000 of our men are obliged to seek employment in the United States owing to economic reasons.
Linder the free trade favoured-nation policy pursued in Great Britain one and a quarter millions are receiving the dole and a million are out of work. But to-day England is beginning to find out her mistake; she is being

shut out of the markets of the world and is veering around to protection and the Safeguarding of Industries Act. England has lost the ship-building orders to the Germans, and many of her other basic industries are threatened. They will not be able to weather the storm. I was alone in protesting against such a policy when I attended the convention at Winnipeg and I am consistent to-day in again opposing a proposal which makes for free trade and adopts free trade as they have it in England, piecemeal, as an economic policy for Canada.


James Alexander Robb: All we are doing is giving to the countries concerned the advantage of our most favoured-nation column. But perhaps the best answer I can give my hon. friend is to inform him that of all those in Canada who have urged the government to negotiate these treaties the strongest representations have come from large industries in the city represented by him. I have in mind two particular industries there, doing a considerable business, and I may quote without giving names-although there is no reason whj' the names should not be given-


Mr. SPENCE:: Let us have the names.


James Alexander Robb: Well, one is the rubber industry of Toronto, a very large industry in which my hon. friend is no doubt interested. I will quote an extract from a letter received from Mr. Thomas Bradshaw of the Massey Harris Company:
We are extremely anxious that we should extend our European business in every way possible, and especially to do so at the present time in tho&e countries which are beginning to import our goods. The situation we find is that in certain European countries where the United States has a more favourable agreement than Canada, goods are being imported from the United States such as we manufacture in Canada. Trade connections are being made and we are absolutely unable to sell and make favourable connections. We know that we are losing a number of good opportunities now, and we fear it will be very difficult indeed for us to make good these losses in future years because many of the valuable connections which might be concluded will be taken up by United States manufacturers.
That is an extract from a letter dated February 8, 1926, signed Thomas Bradshaw.


Richard Bedford Bennett: What about 1928? What is his view now?


James Alexander Robb: We cannot make a treaty in half an hour, you know. We have been negotiating all the time and this is the conclusion of our work.


Mr. CHAPLIN:: Did these people ask you to extend all the privileges of the French treaty to these different nations in order to

Commercial Treaties
trade with them? That is what you are doing in this case, just as you did yesterday in the other case. That is exactly what you are doing. You are giving to these different small nations all the advantages of the French treaty.


James Alexander Robb: Admitting all that, we are getting something in return.


Mr. CAHAN:: What are you getting?


James Alexander Robb: You cannot sell unless you buy, and we are now selling to these countries, notwithstanding that we have no trade agreement with them. We are selling more than we are buying.


James Houston Spence: Keep on selling.


James Alexander Robb: But we wish to increase our trade. Now, I have given the spread in the different customs tariffs. It would take some time to run over the different countries to show the benefits to be derived.


James Dew Chaplin: The minister a moment ago spoke about the United States as our competitor. Is the United States giving to these people in its market the same advantages as we are extending to them in ours?


James Alexander Robb: It is not what the United States are doing; it is what they are buying from us. That is what interests our industries; it is the fact that they can get in there on the same terms as other countries. And everyone knows that the more they can sell there, the better for them. Take the agricultural implement industry, for example. If that industry can run night and day, one part of the time on export business and the other part on domestic business, does it not stand to reason that it can sell cheaper in its own country? My hon. friend will agree with that.


James Dew Chaplin: I do not agree with that at all. I do not agree that any business can run profitably night, and day, except a few industries, such as steel. It is ridiculous to talk about businesses running night and day because it is not profitable to do so.


Thomas Langton Church: There are some people
who call themselves manufacturers, but who are really the worst enemies of the manufacturers in this country; they want to grab all the privileges, and they do not care what becomes of those people who are out of employment. No wonder the minister has read letters from them; they want to secure all the advantages there are from such a treaty at the expense of everyone else. We have
had unfortunate experiencs with regard to the last three or four treaties, and I predict that this will not be different.


Charles Hazlitt Cahan: The other side of the question should be explained by the minister, namely what imports we are likely to receive from these countries and how these imports will affect our own markets. The hon. gentleman said he was selling something to these central European countries. So he is; he is selling the labour markets of Canada to the extent to which these countries are placed at an advantage in our markets over our own producers. We are also told that this will provide a greater market for the manufacturers of rubber and of agricultural machinery, but I would not give the Canadian market as represented by prospective imports from central Europe in order to assist those two large combinations known as the rubber combine and the agricultural combine. The great need of this country at present is not to advance the interests in foreign markets of the combines and trusts of Canada; outside of our agricultural and mining production our great need is to foster and encourage the small industries which formerly operated in Canada, giving employment to the people in our small towns and country villages. If we are to retain our population and give employment to those who may come to Canada from abroad we must encourage these smaller industries which formerly gave local1 employment to thousands of people and kept them at home. Therefore I believe that before we pass this bill we should know what imports we are likely to receive from abroad, what imports are given a particular advantage in our market. Otherwise it seems to me we are giving them our markets without a quid pro quo, and the only satisfactory thing about the treaty is the fact that it can be rendered ineffective by giving six months' notice.


James Houston Spence: It is not often I agree with the hon. member for Toronto Northwest (Mr. Church), but I endorse everything he said to-day, and I endorse also the remarks of the hon. member for St. Lawrenee-St. George (Mr. Cahan). I am not going to repeat their statements, but notwithstanding the representations made by the two large firms in Toronto who favour this treaty I think it would be far better for us to consider the thousands of other industries in the city of Toronto rather than those two combines which are getting everything from this government. The importations from these foreign countries will create a great deal of unemployment in
Commercial Treaties

Canada, and in addition to that everyone knows that every treaty we have made since this government came into power has been detrimental to the country as a whole. Unemployment is increasing every day, and I say this is the biggest farce in the world. Let England make all the treaties she likes, but let us sit quietly and do all the business we can without allowing foreign countries to dump their cheap goods into our markets. I never heard so much rot before and honestly I do not know how the minister can defend such a treaty. We know that since 1922 this government have been ruining the industries of this country, and in the end it will drive them all out of the country. It makes a man sick when he is accustomed to do business on the level.


James Alexander Robb: Perhaps that is why the stocks of all the different industries in Canada are so high.


James Houston Spence: That is no sign of prosperity.


James Alexander Robb: I listened to my hon. friend; surely he need not interrupt me.


James Houston Spence: I have heard that repeated too often.


James Alexander Robb: Perhaps that is why stocks
have increased in value, and perhaps that is why they are paying the same dividends although the shares have been split up. Perhaps that is why the great industries of our country are employing almost twice as manj' men as they employed in 1922, and perhaps that is why our exports have increased so enormously during that period.


James Houston Spence: But the minister must know very well that there are far more closed factories in Toronto now than there were in 1922, and there is not half the employment to-day.


James Alexander Robb: I do not know that, and no one else knows it.


James Houston Spence: That applies even to the Massey Harris Company, which has been propped up by this government


James Alexander Robb: Perhaps that is why they are building more houses-


James Houston Spence: Half of them are empty, and the same applies to the stores.


John Frederick Johnston: Order.


James Houston Spence: You cannot get away with that kind of stuff.


James Alexander Robb: In answer to the hon. member for St. Lawrence-St. George, if we take the

agreements as they come, Eslhonia is first. The imports from that country were fibrilla, flax fibre and flax tow. Those came in free; no duty at all was collected on them. We sold to Esthonia wheat flour, rubber manufactures, internal combustion engines, harvesters and binders, mowing machines, ploughs and other farm implements together with parts for such implements. Then we come to Hungary; the concession we have with regard to that country is of considerable value to the fishing industry and the manufacturing industry of Canada. The imports from that country were largely beans.


Richard Bedford Bennett: And we do not produce any beans in Canada?


James Alexander Robb: We do, but we had a bean crop failure last year. When we have plenty of beans we can take care of our own requirements, but when we do not grow them here we have to buy them from some other country.


James Dew Chaplin: Was that the only article
imported?


James Alexander Robb: Practically. The total value
of the imports for the year ending March 31, 1927, was $60,956, of which $58,000 represented beans. Then we come to Latvia; the imports from that country in 1923 amounted to $8,810, of which 87,286 entered under the free tariff. There tvere no imports in 1924, but in 1925 they amounted to $2,927, of which $2,844 came in free. I suppose that represented raw material for some of our industries. The total imports in 1926 amounted to $400 and they all came in under the free tariff column. In that same year we exported to Latvia articles to the amount of $528,765. From Lithuania in 1923 the total imports were $5,873. These came in under the free tariff column. They were required I imagine for some of our industries.


Charles Hazlitt Cahan: Why do you select 1923?


James Alexander Robb: Our record commenced in
that year. In 1924 the total imports were $525. That is to say $525 came in free.


James Dew Chaplin: The industries did not
require as much trade that year.


James Alexander Robb: I will answer that argument
just in a moment. In 1926 the total imports were $300.


Richard Bedford Bennett: The industries were
worse off still.


James Alexander Robb: In 1927 they were getting
better. The imports amounted to $4,107.

Commercial Treaties


Henry Herbert Stevens: They are getting worse
all the time.


Richard Bedford Bennett: No, better.


James Alexander Robb: From Roumania the imports
in 1927 were $35,666. There were $7,473 worth of nuts, $23,256 worth of beans, and $4,937 of other articles. We sell them canvas shoes, rubber tires, canned fish, agricultural implements, automobiles and other articles amounting in all to just about half a million. Before sitting down there is a matter I should like to put on record. I noticed in the press this morning some comment on the payments that have been made to Canada by different countries to which Canada loaned money during the reconstruction period, and there seems to be some misunderstanding as to Roumania. Under the agreement entered into in 1919, Canada loaned to Roumania $20,449,084- at 5-J per cent interest, and repayable in five years. My hon. friend did not object to trading with Roumania. That was during the time the friends of the hon. member for Lincoln (Mr. Chaplin) were in power.
Mr. ClIAPLIN:	I do not object to trading with them now, but I do object to the terms on which we are trading.


James Alexander Robb: Ah, but the terms now are
better than the terms in my hon. friend's time.


James Dew Chaplin: Not at all. The minister knows very well that that money was loaned as a war measure.


James Alexander Robb: Yes?


James Dew Chaplin: There was no trading
about it, it was a war measure.


James Alexander Robb: They are paying their own
way now.


James Dew Chaplin: We are very glad to hear
it.


James Alexander Robb: Up to the end of 1922 Roumania had paid no interest and no principal. Negotiations were undertaken by Hon. Mr. Larkin with representatives of Roumania with a view to placing this debt on a better basis. An agreement was made under which the arrears of interest plus interest thereon, amounting in all to $3,520,636, were capitalized with the original principal and new bonds for the sum of $23,969,720 were issued to Canada. These bonds bear interest at 4 per cent and mature April 1st, 1968. There is provision for a sinking fund which would retire the whole issue by the maturity date. The service of these bonds-interest and sinking fund-is secured by a special export tax on
grain, payable in sterling. To date, interest payments have been received by Canada regularly on the due date to the amount of $5,273,290 in all.


Mr. KAISER:: I was much impressed with the remarks of the hon. member for St. Lawrence-St. George (Mr. Cahan). It is all right for us as Canadians to consider our own products and whether we can market them, but we must remember that other countries are acting similarly and are seeking markets for their products. One of these countries, Lithuania, is a much smaller country than Canada with a population of 4,800,000, about one-half of our own. The articles they are endeavouring to sell are corn, cattle, hams, poultry, eggs, butter, timber, flax, linseed, hides and wool. Now as a Canadian I contend that our markets for butter, eggs and wool have been sufficiently invaded by the treaties already entered into without opening the door to every other country in the world to make inroads in our market which should be preserved for our own products.


Charles Hazlitt Cahan: I simply wish to remark in reply to the Minister of Finance that the imparts which we now receive from these countries is no indication whatsoever of the imports which we are likely to receive under the more favourable tariff which is being granted to them. Take every one of these countries if you will. Look at the discussions at the last Economic conference at Geneva last year and you will find that every country is looking to the preservation of its own markets for its own local industries in order to keep its labouring people at home. These treaties are simply breaking down every safeguard we have in Canada, and placing other countries in a most advantageous position to compete locally in our markets with such manufactures as they are able to develop.


Richard Bedford Bennett: There are two or three points to which I should like to direct attention. First, these treaties are not set out in the statutes but such portions of them as the minister thinks desirable are referred to. I do not think it is sound legislation to proceed in that manner and not have before us the treaties upon which these concessions are based. Some of the treaties are very old, One is dated 1914, another is dated 1923, and a third bears as late a date as 1927. What we in effect are doing is giving adherence to treaties about which we know nothing. It is not sufficient to say that we are giving our support to the trade portion of these treaties. Let us look at the preamble, and the preamble is an important part in this regard:
Commercial Treaties

Whereas by treaties of commerce and navigation or by agreements made by exchanges of notes between the United Kingdom of Great Britain and Ireland and the countries and on the date set out in the schedule to this act, it is provided that the stipulations of the said treaties or agreements respectively shall not be applicable to any self-governing dominion unless notice is given of the desire of His Majesty that the said stipulations shall apply to such dominion but that nevertheless goods of such dominion shall enjoy in each of the said countries respectively the same treatment as would be enjoyed by similar goods if produced in the United Kingdom so long as goods produced or manufactured in the respective countries are accorded in such dominion favoured-nation treatment; and whereas it is desirable that Canada should have the benefit of that portion of each of the treaties or agreements which provides for the exchange of the said mutual trade advantages: Therefore His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:-
Now the effect of that is what? I ask the minister to state definitely what the effect of this notification or expression of desire to deal with these several countries is? Are we bound by all the provisions in the treaties or are we bound by portions of them only? If we are bound by portions of them only, how can that be having regard to the terms of the treaties themselves? The excerpts that are set out in the explanatory notes certainly throw no light upon that point There are references to particular articles of the treaty by which it is provided that the treaty itself shall not apply to self-governing communities nor to India, except under certain conditions. I should like to know whether or not we are bound by all the terms of the treaty merely because we give notice in that particular regard? It will be noticed that with respect to Esthonia, article 28 provides:
Nevertheless, goods produced or manufactured in India or in any of His Britannic Majesty's self-governing dominions, colonies, possessions or protectorates shall enjoy in Esthonia complete and unconditional most-favoured-nation treatment so long as goods produced or manufactured in Esthonia are accorded in India or such self-governing dominion, colony, possession or protectorate treatment as favourable as that accorded to goods produced or manufactured in any other foreign country.
Have we the right to limit our adoption, or as was said yesterday, our acceptance of that treaty with that particular foreign country?


James Alexander Robb: That is clearly understoood.


Richard Bedford Bennett: The trouble is that we have not before us the treaties themselves. It is a wrong principle to ask parliament to exercise its legislative powers with respect to certain sections of a treaty without our having before us the whole of the treaty that has been negotiated between the two con-

tracting countries. That is the first point. Then the minister has made the point that the export trade of the country will be greatly developed by the adoption of these treaties. May I point out to the minister that the argument he made with respect to the agricultural implement business is answered in the United States Commercial Intelligence issued only a few weeks ago. They say that to-day they are displacing Canadian implements in Canada to an extent they never did before; that the business of the United States was greater in agricultural implements last year than it was ever before in their history, and that the business which they do in Canada is greater than they do in any other part of the world. What is the minister doing in this case? He is displacing Canadian manufactured goods in Canada by those of a foreign country and he is endeavouring. to open up a foreign market, a market that may be destroyed overnight. Let me ask the minister this further question: How long are these treaties for? It is not stated in this bill how long they are for, there is nothing to indicate how long they may last, because I find that each of them is on a different basis. There is at the end of the bili a provision with respect to the legislation coming into force and the suspension of inconsistent laws; but when is it to be ended? Are we bound by the terms of the commercial treaties that England negotiated with these countries for a term of fifteen or twenty years?


James Alexander Robb: They may be terminated on twelve months' notice.


Richard Bedford Bennett: Where is that to be
found?


James Alexander Robb: In the explanatory notes.


An hon. MEMBER:: The third section.


James Alexander Robb: They have different terminations but they are all covered.


Richard Bedford Bennett: Section 3 reads:
The governor in council may make such orders and regulations as are deemed necessary to carry out the provisions and intent of this act, and may upon giving six months' notice to the government of any of the countries mentioned in the said schedule of his intention so to do, order and direct that the favoured nation treatment accorded to such country by this act shall cease and determine, whereupon it shall cease and determine accordingly.
The point I make is that it is not competent for the Dominion of Canada to pass that section if the treaty itself says that it shall be a treaty that requires two or three years' or twelve months' notice. Each treaty has its own particular provision.

Commercial Treaties
There is another point in that regard to which I wish to direct the attention of the minister. The Minister of Justice (Mr. Lapointe) the other day read certain paragraphs from the findings of the Economic conference at Geneva. That Economic conference adopted as a principle the view that treaties of trade and commerce should be of long date and they gave the reasons why. Now we say that we are negotiating a treaty, because that is what this amounts to, with these various countries, Lithuania, Esthonia, Latvia, from which we buy beans and other goods of that sort amounting, according to the minister, to $4,000 in one year. I believe one year it got up as high as $5,000, and in another it dropped as low as $300. When our business in agricultural implements in Canada has been displaced by United States goods, as it was last year, according to their statement, as it never was before in our history; when we cannot sell at home but are trying to sell somewhere else, and when suddenly those foreign countries give us notice that they are through with us, what is going to happen to our business in this country? That is a question which the minister should be thinking about. He is telling us how he is expanding Canadian trade. I suggest to him that he should endeavour to expand it at home instead of leaving Canadian agricultural implements to find markets in other parts of the world while the Canadian demand is being supplied by long trainloads of United States machines, the manufacture of which provides employment for United States workers. These foreign countries in which the minister is endeavouring to find markets for our goods are building up their industries by highly protective tariffs; they are endeavouring to produce goods in their own countries, and when that trade is lost to us we shall turn in vain to our country for a market that has been displaced by goods manufactured by the people of the United States. I suggest that the time has come when the minister should direct his attention to the filling of Canadian requirements with Canadian-made goods.


James Alexander Robb: Does my hon. friend argue that we should impose an increased duty on agricultural implements? Let us understand each other on this.


Richard Bedford Bennett: It is the old story-draw a herring across the trail if you can. I will answer the minister's question. Parliament took the duty off agricultural implements and the price became higher. The material, the steel, the iron and everything else imported that went into those goods we gave a drawback upon not only for foreign trade but for local trade as well. Notwithstanding that
fact, the United States industry has displaced our Canadian implements to an extent that never occurred before in our history. The United States Commercial Intelligence for February, 1928, states that the greatest market the people of the United States have to-day for their agricultural implements is the Dominion of Canada.


James Alexander Robb: How does my hon. friend propose to stop that?


Richard Bedford Bennett: Apart altogether from the fact that it is the business of the minister and not mine to stop it, I will tell him how I would do so. I would stop it by changing seats with the Minister of Finance. That is a very simple way too. I can only say this that if the party which I have the honour for the moment to lead were in power, these things would not continue. Further, we have in our hands what instruments, what tools, to use the words of an Englishman, to accomplish that end? We have the tariff, the excise tax, drawbacks, freight rates; we have in our hands all these things as tools that will enable us tlo see to it that this thing ends without increasing the cost to the consumer by a single dollar. Why is it that the price of agricultural implements has gone up in the last five years? Why has the price not gone down, if the argument of my hon. friend is sound? Why is it that the figures cited by the hon. member for London (Mr. White), the hon. member for Halton (Mr. Anderson) and the hon. member for Ontario (Mr. Kaiser), have not been controverted? Because they cannot be controverted, because they are taken from trade journals, because they are statements of fact. The minister says: If you were in power, would you impose a duty? It might be that a duty would be necessary, but I would Utilize the machinery of government and the power of this parliament to an extent that would secure us against the invasion by the people of the United States of our market and not compel us to go abroad to seek markets for our products.
When the Minister of Finance read a letter from the head of a great manufacturing concern dated in 1926, all he had to do was to take the figures for that same concern for 1927 and bring them up to date and he would find that, instead of expanding their trade in in this country, they are yielding it to their United States competitors; that they have taken over the J. I. Case Company in the United States so that they may be able to get some benefit from that in addition to the factory which they have in France, and that they are depending more and more upon their export business and less and less upon the
Commercial Treaties

domestic consumption which is being taken away from them by somebody else, owing to the fact that conditions are as they are.
What will happen when these markets are lost to us? There is one market that we have control of, and that is our own. There are six markets that we have not control of, and those are mentioned in the schedule of this treaty. That is the point we desire to make, and that is the point which the minister should keep in his mind. While he can legislate for Canada he cannot legislate for Esthonia and Latvia, and when they give notice to terminate the treaty, when they no longer receive our goods under the mosWavoured-nation treatment, we shall seek in vain for a channel for our trade, after we have developed a channel across 3,000 miles of sea and a long distance by land, and at the same time have neglected the opportunity at home, and had our home market taken from us by somebody else. I have upstairs-and I can get it for the minister; I showed it to him during the recent debate-the statement made by the Americans that they had established in this country last year the greatest channel of trade for their implements that they had in the world, and now we are going to Esthonia and Latvia with foreign shipments, foreign currencies, and all that is therein involved, and neglecting the market at home.
The Minister of Finance asks, what would you do? Would you put on a higher duty? My answer is very simple. I would do whatever is necessary to enable us to manufacture at home the goods required by the Canadian people, and it is not necessary to increase the cost to do it either. You may appeal to your agrarian friends from Saskatchewan and ask them to cheer loudly when you speak of low duty. You may appeal to the hon. member for Weybum, with his repeal of the order in council dealing with the values to be placed on vegetables and eggs, or to the hon. member for Comox-Alberni who asks for a duty on eggs and makes his recital as a free trader that the duty would not increase the price. You may tell the cotton industry in Quebec that it is necessary to have a duty of 7^ per cent on yarns, and then abandon it because the agrarians demand that you should do so. You may do all that, but in the end this humbug will be understood by the people. This is nothing more or less than the old story; it has been practised so long in this country that it has become a habit with the minister. He appeals to the agrarians with one tale, and to the manufacturers with another, hoping to hold them both. If he wants to know what the market gardeners of Quebec think about it, let him ask that delegation

that is about to wait upon the Prime Minister headed by the hon. member for Laprairie-Napierville; let him ask the agrarians from Saskatchewan whether they are going to let the order in council go or have it re-enacted; or ask my hon. friend from Laprairie-Napier-ville whether he is going to see the market gardening industry of Quebec destroyed. The humbug will end at last. To the left you have those who insisted on having the order in council rescinded. My hon. friend from Wey-burn has a smile on his face, like the cat that came in with the canary. He realizes that he has been successful in having the order in council cancelled. My hon. friend from Laprairie-Napierville is not smiling, because he has discovered what the cancellation of the order in council means. Yes, I see him smiling now, to think of the reception that his delegation will get from the Prime Minister and the cabinet when they ask for the re-enactment of the order in council and my hon. friend over there from Marquette is wondering what is going to happen; is the government going to rescind it and then re-enact it the same session? Is my hon. friend from Weyburn to have the pleasure of Seeing it rescinded in the early pant of the session, and then reintroduced and passed in the dosing days of the session? Is protection to be made effective on market gardening by order in council after the house prorogues? Ask the hon. gentleman who heads the delegation. Ask him what speech he will make when he presents the delegation to the Prime Minister and his colleagues.
It is the same old story, Mr. Speaker. Here we have it again in connection with these treaties of trade and navigation to carry Canadian goods into the far recesses of Austria, Esthonia and Latvia and the other communities that came into being by reason of the treaty of peace. But while all this is happening, what about Canadian markets? That is the problem we are putting to the hon. Minister of Finance, and it is a problem with respect to which we have a right to an answer. The hon. Minister of Justice, whom I see in his seat, smiling urbanely as ever, appealed the other day to Caesar, Caesar being the league of nations. May I ask him if he has read what the economic conference said about negotiating treaties of this kind with a short life? It was said that they should not be subject to easy termination because the channel of trade that may be destroyed makes great difficulties for both parties. After we have been sending our goods to Esthonia and Latvia, when that channel of trade is suddenly terminated by the people of those countries saying they do not need

Commercial Treaties
our goods any longer, the Canadian manufacturer will look in vain for his market at home, for he will have lost it to the United States of America. That is the position we put to the minister, and he rises in his wrath and asks, would you put a duty on agricultural implements?


James Alexander Robb: I am not wrathy.


Richard Bedford Bennett: Then perhaps he is
righteously indignant. He asks, would we put a duty on agricultural implements. I answer, we would do anything that may be necessary.


Some hon. MEMBERS:: Louder.


Richard Bedford Bennett: I am so glad that my
hon. friends are interested in what I am saying. Per adventure it may be the rescinding of an order in council that I am speaking of.
I do suggest to the hon. Minister of Finance that we have a right to see what is involved with respect to the various terms for the termination of these agreements, for obviously we cannot by mere statute change the terms of the agreements. They date back to 1914, I believe. Lastly, it is quite apparent from what has been said that this is but a little more of what the great Napoleon described as ammunition, as fodder with which to feed the electorate as to the vast foreign trade developed by this country-830,000 worth of beans one year, and $500 worth of something else next year.
My hon. friend took occasion to refer to the loan to Roumania, and to the fact that in this morning's press adequate appreciation was not expressed of the great services of this government in collecting the interest from Roumania. Does he recall how we were condemned as a party because we loaned the money to Roumania? Does he recall the speeches, embalmed in Hansard, that were made against the Minister of Finance of that day and his supporters regarding the loan to Roumania? It was money lost and gone forever, he then said, and now he rejoices in the fact that, like the poor woman, Roumania has found her treasure again. He says it is due to the genius of the Liberal government because they reduced the interest from 5 to 4 per cent, and the Hon. P. C. Larkin was the genius who has discovered that Roumania can pay her interest. Does the Minister of Finance recall his speeches of those days condemning the loan to Roumania? I should judge from the smile of the Minister of Trade and Commerce that he did not think much of the loan to Roumania.


Mr. MALCOLM:: I do not think much of it yet.


Richard Bedford Bennett: No, but unfortunately
the Minister of Finance was rejoicing in the fact that his High Commissioner in London has been able to negotiate an arrangement by which the loan is perfectly safe beyond peradventure.'


James Alexander Robb: No. I said that we had
collected 85,000,000 outstanding, and when we came into office not one cent of interest or principal had been collected.


Richard Bedford Bennett: Of course not, for the
loan had been made only a short time before. The loan was made to Roumania during her reconstruction period on the understanding that credits were to be available in Canada to give employment to Canadian workingmen during the period of reconstruction in this country. That credit having thus been used, there was some difficulty in the days of reconstruction for Roumania, but very shortly afterwards she found her feet and now every day is making progress towards stability. The Hon. Mr. Larkin told me in London what had been negotiated a few days before with Roumania, and that there had been assigned to this particular debt the proceeds of an export tax upon wheat. Now, wheat is one of the most important exports of Roumania, and we have this export duty upon wheat for the service of this loan. Our interest is being paid promptly, a sinking fund is provided, and the loan is safe. Yet my friend the Minister of Finance takes responsibility for having reduced the interest rate to four per cent and accepted new securities for the old. I am sorry my friend the Minister of Trade and Commerce has so little confidence in the loan with regard to which there has been a complete novation; the loan now is the loan of this government and not of its predecessors. But I think the hon. gentleman should at least say that those who made the loan had high faith and confidence that it would ultimately be repaid, and that it was made by us as an international obligation and duty and to give employment at that particular period of reconstruction to a large number of Canadian workmen. The government of that day believed the loan was well secured. It now transpires that it was safe in every particular, and although the government have reduced the rate of interest to four per cent, they probably did so for reasons perfectly good to themselves, because they compounded some of the old interest. I wish my hon. friend a long life of peace and happiness in some other office than that which he now occupies, for in that event he will be with us until 1968 when the securities mature.

Commercial Treaties


Mr. MANION:: The Minister of Finance
a few minutes ago, replying to an hon. member on this side of the house, stated that there was very little unemployment in this country. Again and again the members of this party are accused of being unpatriotic because we have drawn attention to the obvious fact that there is unemployment in the Dominion. I have in my hand the Canadian Unionist, the organ of the All-Canadian Congress of Labour, and I propose to quote its opinion on the question of employment in this country which the minister says is in such excellent condition. The article begins:
The government spokesman, moving the adoption of the address in the House of Commons on January 27, declared that "unemployment was considerably lessened and the demand for labour has increased."
Then a little lower down I find the following:
The desire to minimize the prevalence of unemployment is shared by both the old-line political parties.
I read that passage to show that this paper is not the mouthpiece of the Conservative party; it is a labour organ pure and simple.
Again:
Nowhere can one obtain statistics of unemployment that have any claim to accuracy or completeness, without collating the reports of at least two government departments.
And again:
The prosperous condition of Canadian industry is proclaimed from high places: the partial returns on unemployment are quoted as though they revealed the whole situation. But casual observation is sufficient to convince one that prosperity is confined to comparatively few among the population and that unemployment is rampant among the masses.
In another part of the article the writer estimates that the unemployed in the cities and towns of Canada amount to a quarter of a million. He says:
To sum up the situation of the Canadian working class:	the dry-as-dust figures from
official sources speak with a horrible eloquence, and they prove beyond dispute that among more than one-third of the workers (the only section for which statistics are available) unemployment is rife. Applied to the remainder of the workers by simple rule-of-three, they show that a quarter of a million urban wage earners are involuntarily idle and suffering from unmerited poverty.
And he concludes:
-and government spokesmen. . . are contemptible indeed when they seek to beguile the public with platitudes about a "prosperity" that is a delusion and a snare.
I have quoted the article, Mr. Chairman, because continually we on this side of the
t.Mr. Bennett.]
house are accused of exaggerating any ill conditions in the Dominion and are taunted with being unpatriotic in drawing attention to undoubted facts. Only a few minutes ago the Minister of Finance made the broad statement that Canadian employment is good and that no one could deny it. Well, the Canadian Unionist denies it. It reminds me of other broad statements the hon. gentleman has made without adducing the slightest proof of their soundness. Again and again he has told this house that his tariff reductions last year did not do any harm to the motor industry of Canada. Yet the Department of Trade and Commerce has issued statistics that the manufacture and export of automobiles has decreased and the import of automobiles has increased. Those figures I placed on Hansard some time ago. I bring this to the attention of hon. members because I believe general statements of this character made by the minister should be backed up with ample proof, and that the government should hesitate to accuse the official opposition of. unpatriotic motives simply because we have described conditions as they actually exist, and as confirmed by this labour organ.


James Malcolm: Is the writer's statement true?


Robert James Manion: He gives figures.


James Malcolm: But he admits that there is no authority for his figures.


Robert James Manion: He simply says that the
figures given out by the government are not reliable.


James Malcolm: I think if my hon. friend will read the article again he will find that the writer says that statistics are difficult to obtain.


Robert James Manion: But after criticizing both
political parties, he expresses an opinion similar to that which we on this side of the house have expressed. He is speaking as an expert on labour, and it is claimed that the All-Canadian Congress of Labour is the largest Canadian-controlled labour organization in existence. However, I wish to put his opinion on record because it confirms what we have frequently pointed out, that there is a great deal of unemployment throughout the country. Only the other evening while in Toronto I was stopped three times by people asking for the price of a meal as I walked from my office to the Albany Club, a distance of less than a mile.


Mr. LAPOINTE:: You are looking so
prosperous.

Commercial Treaties


Robert James Manion: Perhaps so; I try to look
as prosperous as my income will permit. I might point out that the same condition exists in Montreal, where soup kitchens have had to be opened.


Mr. McINTOSH:: The hon. gentleman is
dealing with seasonal unemployment.


Robert James Manion: I am dealing with unemployment in general. The winter season is a little worse than the summer season; that is all. I submit that unemployment is severe in the Dominion, that in consequence we are losing our people to the United States, and that undoubtedly such a treaty as this will still further decrease the employment of our own people and increase the employment of foreigners.


James J. Donnelly: Is there not unemployment even in the United States?


Robert James Manion: The papers describe the
unemployment there as very bad. But for that matter the unemployment condition is also very bad in free trade England. The Minister of Finance cited as proof of prosperous conditions in this country that the prices of stocks are soaring, and that therefore employment must be good. In the United States stock prices have gone up even more markedly than in this country, and yet unemployment there is very bad too.


Charles Hazlitt Cahan: We have not yet reached
section three of this bill, Mr. Chairman, but it is pertinent to a discussion of section two. It provides that the government upon giving six months' notice may determine the treaty. In looking over the articles of these various treaties which are quoted in the explanatory note annexed to the bill, it will be found that in the case of Esthonia the treaty may be determined on twelve months' notice; in the case of Hungary, on twelve months' notice; in the case of Latvia, on twelve months' notice; in the case of Lithuania, three months' notice; in the case of Portugal, twelve months' notice; in the case of Roumania, six months' notice; in the case of the Serb, Croat and Slovene kingdom, twelve months' notice. Why does the hon. gentleman provide. for six months' notice in respect of treaties where our very adhesion is an assent that we will only exercise our rights to determine them by longer notice?


James Alexander Robb: My hon. friend has just answered the inquiry asked by the leader of the opposition (Mr. Bennett) as to the termination of the treaties. This bill was prepared by the law officers of the crown, and the tariff 56103-134*
commissioner having directed my attention to the point. I had intended when we came to this particular article to move that it be amended so as to make the maximum twelve months. Some of them expire in three months, but the maximum is twelve. I intend when we reach the clause in question to move an amendment accordingly.


James Dew Chaplin: Is the minister going to
conclude the schedule of goods that are imported from these countries? He has given two or three of the countries and I should like to have the list complete.


James Alexander Robb: I thought I had given them
all.	[DOT]


James Dew Chaplin: I have not the information in regard to the Croat and Slovene kingdom and Portugal.


James Alexander Robb: I will take that up.


John Evans: I did not expect that this
discussion would develop into a protectionist-free trade argument. I want to correct the leader of the opposition in regard to the agricultural industry. It is not by any means a matter. of sale that prevents that industry from prospering; if it is not prospering it is due to the price. No one knows this better than the Minister of Finance (Mr. Robb), who a little while ago received a petition to put agricultural implements on the free list. In our research department of the United Farmers we have found that an implement made in Hamilton-a seed drill-was selling $30 cheaper in the United States than it was being sold to the western Canadian farmer. Indeed, an hon. gentleman near me declares that it was $55 cheaper to the United States than to the Canadian farmer. I wonder what the hon. member for West Calgary (Mr. Bennett) has to say to that?


Richard Bedford Bennett: I say I do not think the
statement is accurate.


John Evans: It is accurate, I can assure
the hon. gentleman of that.


Mr. BELL (Hamilton):: Give us the name of the maker of the drill.


John Evans: I cannot, offhand.


Leslie Gordon Bell: I should like to
take it up in Hamilton.
Mr, EVANS' This is in line with what is going on in other directions.


Mr. FANSHER (Last Mountain):: There are affidavits to support the statement.


Leslie Gordon Bell: I want to know the name of the maker.
Commercial Treaties


John Evans: Our Canadian manufacturer
seems to be unable to do anything until he is linked up with the politician, and for that reason imports are kept out. As I have said before in this house, there is no enterprise among the manufacturers, and the small dealer is all the time being closed out in the small towns. The small manufacturer has no place to-day in Canada where workingmen can be employed. There is no room for workmen except in great companies in the larger centres of industry where labour is concentrated. I *do not know why things should be thus, but acts of brigandage of this nature are taken advantage of by certain men to the detriment -of the rest of the country. f remember having :paid on one occasion $164 for an agricultural implement in Saskatoon when a relative of mine in England actually bought that implement $26.50 cheaper. The hon. gentleman has been asked how he would remedy these things and put the implement industry on a sound basis. He is afraid to tell us and today 1 challenge him. He said he would do what was needed. Well, what more is needed? The western farmer is to-day paying the price in freight rates and tariff, and there is a differential in favour of the Canadian manufacturer on shipments from the industrial centres of the east to the western provinces. If this is not enough for the manufacturer, what does he want? I challenge my hon. friend to say. Apparently the manufacturers have come to rely solely upon the tariff; they are coming to regard the tariff, rather than their own enterprise and industry, as the foundation of their success.


[Stage Direction]
Section agreed to.
On section 3-Orders in council authorized.
James Alexander Robb: I move that, in line three, the word " six " be struck out and the word " twelve " be substituted therefor.


Charles Hazlitt Cahan: The minister promised us within the past half hour that when he proposed the amendment it would be that the notice provided by the treaty itself should be given. V e should therefore have the amendment appropriately worded to provide, in the case of Lithuania, for example, the giving of three months' notice, in the case of Portugal, twelve months' notice, and so forth, as provided in the treaties themselves. In the case of Roumania it is six months. That is to say, the notice which we give should be in accordance with the terms of the treaty to which we are acceding.
Mr. C. w. Bell.]


James Alexander Robb: That would cover the point; there should be that reservation. I therefore move that the committee rise and report progress and ask leave to sit again this day, and in the interval the necessary amendment may be drafted.


Richard Bedford Bennett: You have to provide for the termination of the agreement within the period specified in the treaty itself.


James Dew Chaplin: Will the minister bring in the return asked for?


James Alexander Robb: Yes.


Mr. GEARY:: During the dinner hour will the minister obtain for us information as to what trade goes to England from these different countries? It is to no purpose, in support of a treaty of this kind, to quote imports of goods into this country in times past. These different countries expect to get something from these treaties and surely they expect to increase their exports to Canada as a result of the lowering of our duty on certain articles they manufacture.


James Alexander Robb: Surely.


George Reginald Geary: What are the products of
those countries?


James Alexander Robb: I will give a list.
'Mr. GEARY: That is, dealt in with Canada. But that has nothing to do with the information I am asking for. If we were given some figures' ito show the exports of those countries into Great Britain, it would be an indication of what we may expect to have come into . Canada under lower duties. There is nothing at all in what the minister has said to indicate the wisdom of this treaty. Nothing that he has said in regard to imports indicates what the benefit to either country will be under the treaty, and it is obvious that these countries are not entering into the treaty for the fun of it: they expect to find an outlet for their manufactured goods and their other produce. Now, what are those manufactured goods and those products which under a lower tariff they expedt to ship ito this country?


James Alexander Robb: Perhaps it will ease my hon. friend's mind if I observe that those countries are largely agricultural.


George Reginald Geary: I know that.
Progress reported.
At six o'clock the house took recess.

Private Bills
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill' No. 24, to incorporate the Highwood Western Railway Company-Mr. Coote.
Bill No. 41, respecting the Imperial Guarantee and Accident Insurance Company of Canada-Mr. Edwards (Ottawa).
Bill No. 48, respecting the Calgary and Pernie Railway Company-Mr. Gershaw.
Bill No. 52, respecting the Canadian Pacific Railway Company-Mr. Speakman.
Bill No. 60, respecting the Canadian Surety Company-Mr. Hocken.

[Stage Direction]
The house in committee on Bill No. 53, respecting the Manitoba and Northwestern Railway Company of Canada

Mr. McLean (Melfort)-Mr. Johnston in the chair.
On section 1-Extension of time for completion.
John Frederick Johnston: An addition has been
made to this clause. After the word " may " in the eleventh line the words have been added " within two years after the passing of this act continue the construction of and". A further amendment has been made by the addition in the twenty-fourth line after the word "if" of the words "within the said periods respectively." In the twenty-fifth line the words "so commenced and is not" have been added.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported, read the third time and
passed.

[Stage Direction]
The house in committee on Bill No. 57 respecting the Edmonton, Dunvegan and British Columbia Railway Company-Mr. Kennedy-Mr. Johnston in the chair.
On section 1-New branch lines authorized.
Mr. DUNNING:: There is an amendment to that section, Mr. Chairman.


John Frederick Johnston: In the sixteenth line
the word "township" is changed to "townships", and the words "seven to" are struck out and the words "eight or" substituted
therefor. In the seventeenth line the word "eight" is struck out and the word "nine" substituted therefor. The words "from mileage sixty-five at or near Wembley" in the twentieth and twenty-first lines have been deleted. The words "township seventy-eight" in the twenty-fourth line have been struck out and the words "townships seventy-eight or seventy-nine" substituted therefor.


Mr. KENNEDY:: I think the amendment made in the railway committee was to substitute the words "seventy-eight or seventy-nine" for the words "seventy-seven to seventy-eight" in subsection (a) and in subsection (b) "township seventy-seven or seventy-eight" instead of "seventy-eight."


John Frederick Johnston: That is not in the bill I have. In my copy in subsection (b) the words "township seventy-eight" have been struck out and the words "townships seventy-eight or seventy-nine" substituted therefor.


Charles Avery Dunning: My hon. friend from
Peace River knows the ground but the copy in possession of the Chairman is signed by the chairman of the railway committee. "Seventy-eight or seventy-nine" is written in in subsection (b). If my hon. friend is sure it should be "seventy-seven or seventy-eight" instead of "seventy-eight or seventy-nine" he could move that amendment. He knows best the precise location.


Richard Bedford Bennett: Look at the map.


Charles Avery Dunning: I have not a copy of
the map handy.


Charles Hazlitt Cahan: Unless it is a mere correction, notice would have to be given of that amendment.


Charles Avery Dunning: I think that is right.
Perhaps the hon. member for Peace River would consent to leave the bill in committee in order that he may determine what amendment should be made.


Donald MacBeth Kennedy: That would be the
better way. I am fairly sure about it, but I do not like to put my word against the signed copy of the chairman.


Charles Avery Dunning: It can be understood that my hon. friend will give due notice of the amendment before the bill comes up again in committee.


Mr. CAHILL:: If the figures are not right there must have been an error on my part in putting them down. In that case I hardly think it necessary to give notice of an amendment.
Private Bills


Donald MacBeth Kennedy: I am quite certain that
in subsection (a) the words should be "seventy-eight or seventy-nine."


Charles Avery Dunning: That is quite right.


Donald MacBeth Kennedy: And in subsection (b)
"seventy-seven or seventy-eight."


Charles Avery Dunning: If my hon. friend is
prepared to move an amendment now, in view of the fact that apparently there is a clerical error in the record we may dispense with the usual notice.


Edward Joseph Garland: I submit
that no amendment is necessary; there has been a mistake in the notation made on the original bill, and all that is necessary is to make a correction.


Charles Avery Dunning: In any event the mistake must be corrected by some formal action on the part of this committee. I suggest to my hon. friend that he leave the bill in committee in order to enable him to confirm his impression, or he may move the necessary substitution now.


Donald MacBeth Kennedy: Let it stand.


John Frederick Johnston: Bill No. 57 stands.



BRITISH EMPIRE ASSURANCE COMPANY

[Stage Direction]
The house in committee on Bill No. 40, to incorporate the British Empire Assurance Company.-Mr. Edwards (Ottawa)-Mr. Johnston in the chair.
On the title.
George Reginald Geary: May I ask the chairman of
the committee or the proper minister, what steps, if anj'', have been taken to ensure that the name appropriated by this company does not clash with that of some other insurance company? There is an insurance company called the Empire life Assurance Company, or the Empire Assurance Company, something very similar to this.


James Alexander Robb: I have no record of that, but
I imagine that the matter would be closely scrutinized first by the Department of the Secretary of State, which grants the charter, and afterwards by the Department of Insurance.


George Reginald Geary: The company to which I
refer is a provincial company.


Malcolm McLean: There is also a
Western Empire Life Assurance Company, so that there are evidently two Empire insurance companies already in existence in Canada.


Mr. RYCKMAN:: This bill was proposed
by the British America Assurance Company which has been incorporated for seventy-five years or more. They desire to have a subsidiary company and they are following the law which was passed last session. United States companies enjoy that privilege; English companies have it, and now for the first time Canadian companies have it. The bill was carefully considered in committee and no objection whatever was taken in this connection.


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

[Stage Direction]
The house in committee on Bill No. 56, respecting the Sun Life Assurance Company of Canada.-Sir Eugene Fiset-Mr. Johnston in the chair.
Mr. HEPBURN:: Before this bill passes I
should like to discuss the merits of it. Last session a bill similar to this was introduced into the house, its purpose being to increase the capital stock from $2,000,000 to $4,000,-
000.	We who opposed the bill at that time both in the banking and commerce committee and on the floor of the house maintained that the real purpose of the bill was to increase the profits of the shareholders at the expense of the participating policyholders. This contention was upheld by the Superintendent of Insurance, and with due respect to that gentleman I think he is generally recognized as one of the outstanding financial men in the Dominion of Canada. He is a man who cannot be swayed by anything other than his own good judgment. We often hear references made in vague and indefinite terms to the influence of the big interests on the governing body in this Dominion, and I was glad indeed that parliament saw fit to block that proposed legislation, which was obviously unfair not only to the policyholders of the company, but to the insurance business in general.
The contention that the main purpose of the bill was to increase the profits of the stockholders was denied by the sponsors of the bill, who waxed wrathy at the mere suggestion of any such thing, but those who were in favour of the bill were put to the test by an amendment moved by a member of the Progressive group proposing a 15 per cent profit limitation on the proposed new capital. The amendment was endorsed by the Minister of Finance, who said at the time that after all it was the policyholders' money which provides the real capital of the company. He

Sun Life Company
also said that a 15 per cent profit limitation was not an unfair rate of interest on any legitimate investment. The amendment was carried, and immediately the bill was withdrawn. Anyone who had had any question in his mind up to that point as to the real purpose of the bill certainly was in doubt no longer. The fact that the company withdrew its bill and refused to accept the 15 per cent limitation was a complete admission on the part even of the company itself that the real purpose of the bill was to re-arrange the company's stock so as to exact a greater profit, and to do that with the authority of parliament. The company is back this year with a bill of a similar nature, but this time they have carefully paved the way. A reorganization of the directorate has taken place and men of political prominence now sit on the board, it being expected, no doubt, that they will in some way or other be able to facilitate the passage of this bill through the house. On top of that, the best lobbyists were obtained, and they canvassed members before the bill was even introduced. I believe that this has been the most thoroughly lobbied bill in the House of Commons that I have seen so far. If one were to judge by the enthusiastic support this bill received in the banking and commerce committee, those who are opposed to it must be a small minority, but we are not discouraged, and we hope to stir up enough opposition so that the policyholders will take some action and their sentiments perhaps be reflected in some way or another on the floor of this house. We are encouraged by the fact that the Superintendent of Insurance is again opposed to this bill, in face of the fact that a press report, emanating no doubt from the head office of the Sun Life Assurance Company of Canada, appeared some time ago to the effect that some agreement had been reached with parliament by which the passage of this bill was assured. This report, I believe, was responsible for the stock of the company, which stood at that time at $560 per share, soaring to its present value of $2,000 per share. Before passing this bill in its present form parliament must consider this matter very carefully because certain principles are at stake.
Canada stands second among the nations of the world to-day in per capita life insurance. Life insurance is a real economic necessity. It is of national importance, and is rendering a service comparable only to that rendered by our chartered banks and trust companies, and from a humanitarian standpoint it gives protection to widows, children and dependents. The operation of life insurance companies should therefore be supervised
and guarded closely. This company is attempting a stock manipulating scheme which is not in the best interest of the policy-holders or the insurance business generally. To-day, when the whole trend of events in the insurance world is towards mutualization, the Sun Life company is asking permission of this parliament to increase its capital. Those who have taken out insurance with the company have done so on the present basis of operation. If we pass this bill, we will be a party to a breach of contract between the company and the policyholders. It is useless to argue that this increase in capital will not be a tax upon the policyholders. To bear out this contention I would refer to the evidence of Mr. Macauley, given before the royal commission on insurance. Under oath before this commission he stated, in reply to a direct question, that he had been repeatedly requested to allow shareholders to pay up more money and had refused, (1) because the company did not need the money or capital; (2) because the new capital would be taking away more of the profits belonging to the policy^ holders.
To use his exact words, he stated:
The reason that guided me particularly in refusing was always that it would be a tax on the policyholders.


Mr. ERNST:: May I ask if the hon. gentleman is a policyholder in the Sun Life company?


Mitchell Frederick Hepburn: Yes, I am. In 1901 the Canada Life Assurance Company increased its paid up capital from $125,000 to $1,000,000. The president of the Sun Life company at the time issued a circular in which in caustic and severe terms he criticized the action of the Canada Life company in that regard. Referring to the part which dealt with the direct effect of an increase of capital of $875,000 upon the Canada Life policyholders, he stated:
And now let us see the extra amount of profits that the change will cause to be absorbed. On an 8 per cent basis, half of the interest on the paid up capital $40,000, will likely be taken from the policyholders' earnings, which is $35,000 more than in the past. Therefore the policyholders will be mulcted yearly to that extent. On a 20 per cent basis the policyholders' annual loss would reach $175,000.
How does that harmonize with the president's statement that the policyholders cannot suffer in any way whatever by the calling in of the capital stock.
That was what the president of the Sun Life thought of the action of the Canada Life at that time. What must the company honestly think of itself to-day, when it has not only called in its unpaid capital, but is actually asking parliament to let it issue more
Sun Lije Company

capital stock? The calling in of the unpaid capital stock, and the issuing of new stock, brings up another matter upon which some light should be thrown.
At the time the Canada Life Assurance company increased its paid capital its shares were quoted at $525. The minute the $875,000 was paid in, according to the president of the Sun Life, the market value of the stock became $4,593,000, and to use his own words:
The shareholders would seem to pocket the whole benefit of the difference of $3,718,000, and seemingly all for the best interest of the policyholders, another admirable illustration of the administration of a great trust maintaining the people's interest even against their opinions.
Now I agree that the president of the Sun Life was perfectly right at the time. It was a get-rich-quick scheme. To-day Canada Life stock stands around $1,200 per share, and those same stockholders have been enriched by a further four million dollars or so.
But the point I want to make is this. If the president of the Sun Life was right at the time, and he surely was, how does it apply to-day to his own company? A few months ago the Sun Life increased its paid up stock to its full authorized capital, from $1,500,000 to $2,000,000. Its stock is quoted at approximately $2,000 per share. On a 20 to 1 basis its $500,000 paid in is now worth ten millions. Therefore the shareholders in question benefited by the transaction to the extent of $9,500,000 on the present market values, the interest on which is borne by the policyholders. If the two millions of new capital stock asked for in this bill is issued at par, with a fixed dividend of 25 per cent, and enjoying a share of the reserve fund now the property of the shareholders, it will mean that the marketable value will be at many millions, which will mean another melon the interest upon which will be borne by the policyholders.
Mr. Macauley, the present president of the company, is an astute business man, and in order to facilitate the passing of the bill has conceived the brilliant plan of throwing up a smoke screen, and so he says that the Americans are trying to buy up control of the company. The patriotic appeal is the last resort. Since 1911, however, the old flag-waving stuff has lost its punch. The Superintendent of Insurance points out that if the Americans were trying to buy up the stock, which is not the case, the two millions of new capital asked for is not necessary to protect the company from such a contingency.
It might be interesting to point out the inconsistency of the Sun Life in this respect- about as inconsistent as many of the arguments advanced by some of our opposition

friends in regard to trade treaties.	They
appear to entertain the idea that they can make a hole in the fence big enough to let their chickens through into their neighbour's garden, but not big enough to let their neighbour's chickens trespass in their own gardens. From information under my hand 1 find that the Sun Life has money invested in 233 foreign concerns, mostly American, and on top of that a fair share of their insurance business is done in the United States. The company has twenty thousand shares of fully paid up stock, and at the present time sixty-five people own 15,126 of these shares, or over 75 per cent; and 194 people own the balance of 4,874 shares, or about 25 per cent of the capital stock. So with the whole of the capital stock in the hands of so few people, it is quite obvious to me that there is no danger of any outsiders obtaining control against the wishes of the present shareholders. Their whole argument in this regard lacks force and reason, and may well be treated lightly.
A brief statement of the company's affairs shows that the original paid up cash capital was $305,000. From that small sum of money the company's business was built up. Special dividends and stock bonuses have been declared, bringing the capital stock prior to January of this year up to $1,500,000. To do this they divided a stock bonus of $845,000 and declared a special dividend of $350,000. On the actual capital of $305,000 they have been declaring dividends annually of $225,000, or at the rate of 73.8 per cent on the actual cash investment. At the same time the company has been piling up a huge reserve, which is the property of the shareholders. On January 1 of this year the marketable value of the 15,000 paid up shares was $30,000,000. So the cash investment of $305,000 has grown in value by nearly a thousand times the original amount. Now, I think that is nearly enough for the company to have, and that a halt should be called in their manipulations. Stock manipulations and stock watering are all too common in this country, the result being that the Canadian public is weighted down to-day paying interest on tremendous capitalizations of this kind, built up by manipulations and profits taken from the people themselves.
Referring again to the financial record of the company, a few years ago when it was necessary to increase the capital in order to operate in the American market they issued their new stock at a premium, and properly so, of $300 per share. This premium went where it should go

to the policyholders. There is no intention on the part of the company this time to divide the money with the policyholders,

Sun. Life Company
to whom it rightly belongs. On the contrary, according to the bill this stock will be issued at par to their friends, and immediately it assumes a market value they will make a profit ranging from ten to forty million dollars by the transaction.
I understand that the hon. member for Battle River (Mr. Spencer) proposes to move an amendment that the capital stock to be issued be held in trust for the policyholders.
I am quite prepared to support this amendment, but on general principles I would rather see the bill thrown out entirely. Therefore I reserve my right to vote for the amendment, but if there is sufficient support I shall vote for the rejection of the bill itself.


Donald Ferdinand Kellner: Mr. Chairman, I also
wish to add my voice in protest against the passage of this bill. The hon. member who has just spoken (Mr. Hepburn) has gone into the activities of the company so thoroughly that I need not quote any figures. I will content myself with the broad statement that in my opinion this is an effort to water the. stock in order to make some money for the company without its rendering any service whatever in return. Further, I hold that it is the duty of the government to regulate such activities. The government is entrusted with the welfare of the people of Canada, and in view of the fact that under the law it is an offence not to have any money at all, I argue that correspondingly it should be an offence to have too much money. If a Canadian strolls into any city or town of this Dominion and is found to be without this "visible means of support" he will be arrested. Now, it seems to me that it is reasonable to argue conversely that if anyone in this country has too much money, and has not obtained it honourably, he also should be subject to the same treatment as the beggar. Only parliament can determine the ways by which it may be permissible for any citizen of Canada to obtain money. Therefore I think an application of this kind should be scrutinized very carefully to make sure that it is not an attempt to get the privilege of passing out to the shareholders a huge amount of money without rendering any corresponding service therefor.
It is worth while, Mr. Chairman, to consider the reasons advanced by the company for this increase in their capital stock. I well remember that a short time ago it was argued in the press that in order to enable this company to go into foreign fields and underwrite insurance and engage in other business activities it was necessary to increase the capital stock. Well, at the present time
Canada is making very strenuous efforts to induce foreign capital to be invested in the development of this country. So long as we are going to the four comers of the earth to induce capitalists to invest their money in Canadian enterprises, why should we make it easy for the Sun Life Company to invest their funds in foreign countries? Then the previous speaker touched on another matter. He stated that the newspapers a little while ago carried a notice from the president of the company that there was grave danger of the Americans getting control of the company. I remember having read some of these articles. The president would evidently lead the Canadian people to believe that in some secret, unseen manner the Americans were going to come over and simply steal this Canadian company. Anyone who has gone into the history of the company to any extent will realize that the directors had it in their own power to keep the Americans or anybody else from doing anything of the kind. Until a short time ago only 75 per cent of the stock had been fully paid up. The directors had control of the transfer of shares until such time as the shares were fully paid up. If they wanted to maintain this as a Canadian company and to retain practically the same shareholders as were formerly in the concern, all they had to do was to refrain fiom calling for the last 25 per cent on the shares. But a few months ago they sent out a call, and the remaining 25 per cent was paid up. Now the directors have no say in the matter and the shares may be transferred without their approval, so that there is an opportunity now for the shares to get into the hands of others than Canadians. That there is a possibility of this happening is a different matter.
It is worth while considering the very great advance that has taken place in the shares of the company. A few months ago the shares were somewhere around $600 or $700; at the present time they are about $2,000. Do hon. members think that the investing public of this country and of the United States sat down and figured out the possible earnings of the company within the next few months and, after looking into the matter more thoroughly, decided that, whereas, a few months ago the company had an earning power which would justify the payment of $600, now it has an earning power on its shares that will yield a value of $2,000? Will anyone argue for a moment that there is any possibility in the world that the investing public of this country came to the conclusion, after mature deliberation, that Lhese shares were worth that much more than they were a few months previously?
Sun Life Company

One thing more I wish to touch upon. This possibly has been one of the most successful companies we have ever had in Canada. It operated for a considerable time on a very small capital; in fact, until 1897 it had a paid-up capital of only $30,000. Now if they have been getting along so marvellously well on so small a capitalization, is it not rather risky to give them the privilege of materially increasing their capitalization, especially at a time such as we are passing through, particularly having regard to the investments that are offering? All companies are liable to make indiscreet investments, and while this is an ably managed company and all that, parliament owes a duty to the shareholders and policyholders of the company and would do well, I submit, to discourage this endeavour. We owe this to the policyholders at least, in order to ensure that they snail receive that consideration to which they are entitled.
Possibly no other company in Canada has made money more quickly or has gone further afield to make it. We find that the Sun Life has investments practically throughout Europe and North America. If increasing the capital stock is going to facilitate these foreign investments, I Should think it would be very much better if we left the stock where it stands. Possibly no country in the world today requires capital more than Canada does, and certainly none is making a greater bid for it. It is almost nine o'clock, Mr. Chairman. I submit that this question should be given very serious consideration. It would be a grave mistake for this house to pass a measure like this without considering it thoroughly, and in view of the fact that we have had only half an hour to-night to discuss the subject, I move that the debate be adjourned.


Thomas Langton Church: I shall take only a few
minutes of the time of the committee on this bill. The principle of the bill is laid down in its preamble. This company is in a good financial condition. The bill should have gone to the private bills committee and not to the committee on banking and commerce. Our Insurance Act needs an overhauling in the interests of the policyholder and of the poor lapsed-policy man who loses his all. If he cannot pay more than three years' premiums, then the company confiscates and hoards those premiums.
This company has been coming to parliament, asking for special legislation, which has been passed on their behalf in the following years: in 1865, by chapter 43; in 1870 by chapter 58; in 1871, by chapter 53; in 1882, by chapter 100 and in 1897, by chapter 82. And
Mr. Kellner.]
now they are seeking to have this bill put through. They want to amend their various acts and to increase their capital stock as well as to alter the economic and financial laws and, by legislation, change the par value of their shares for the good of their stockholders and at the expense of their shareholders. The capital of the company is now $2,000,000. By the general Insurance Act, section 70, the capital of a company shall be deemed to be impaired when its assets, exclusive of its paid-up capital, are less than its liabilities calculated according to the requirements of the act. Mr. Finlayson, the capable superintendent of insurance, offered objection to this bill. The company also seeks power to alter the stock qualifications of its directors in order to make certain handouts, dividing the stock into different classes. I submit that this parliament should protect the policyholders.
Progress reported.



COMMERCIAL TREATIES WITH EUROPEAN COUNTRIES

[Stage Direction]
The house resumed consideration in committee of Bill No. 203, respecting trade between Canada and Esthonia, Hungary, Latvia, Lithuania, Portugal, Roumania, and the Serb, Croat and Slovene Kingdom-Mr. Robb-Mr. Johnston in the chair.
John Frederick Johnston: When the committee
rose at six o'clock we were considering section 3 of the bill. The minister moves that the words " six months " in the third and fourth lines of section 3 be struck out and that the words " within the respective periods required by each of the several treaties or agreements in regard to the termination of the same " be inserted in lieu thereof.


Charles Hazlitt Cahan: This amendment is a fair attempt to carry out the understanding at which we arrived, but I think it would be clearer if it were to read " within the respective periods prescribed by each of the several treaties or agreements for the termination of the same ",


James Alexander Robb: This amendment was prepared by the law officers of the crown, but I see no objection to the words proposed by my hon. friend; perhaps they are better, I will therefore accept that suggestion. I ask for leave to withdraw the amendment I have proposed, and to substitute the words suggested by my hon. friend.


John Frederick Johnston: The minister moves
that section 3 be amended by striking out the words "six months" in the third and fourth lines and inserting the following in lieu thereof :

Commercial Treaties
Within the respective periods prescribed by each of the several treaties or agreements for the termination of the same.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 4 agreed to.
On section o-When act comes into force.
George Reginald Geary: Before the house rose at six o'clock I asked the minister to give some of the information which he must have collected during the negotiation of these treaties, and his answer was that we were supposed to know that the products of these different countries were mainly agricultural. I suppose the minister was referring to beans, which seem to have been the product most in evidence as coming from any one of these countries Other articles cited by the minister came in free. But that gives us no information at all as to the possible effect on the trade of this country of the agreements now contemplated. Probably the minister had something to do with the negotiation of these treaties, and I think he owes it to the house to give some of the information he thus acquired. It is no help to us to give the exports from these different countries to Canada under the old tariff; we want to know the probable or possible effect of the new tariff upon the agricultural and industrial life of this country, and we can secure that information only by learning what are the products of these countries and to what extent and under what conditions they have been exported to other'countries, such as Great Britain. I do not know where the agreements were negotiated; we have had no information in that regard. Probably they were put through by half a dozen trade commissioners and concluded by correspondence between the different capitals. These agreements may have a disrupting effect on the industries of this country; we do not know. If the minister has been closely in touch with the negotiations no doubt he has weighed the possible advantages and disadvantages which may result in the future, so I would like him to answer that question a little more fully. It is not well to pass it off by saying that we are supposed to know that the products of those countries are mainly agricultural. If the minister knows that they are or are not such, let him say so, but we are entitled to have some statement from him as to the probable effect upon the commerce of the country.


James Alexander Robb: The observations of my hon. friend lead me to believe that possibly he was not in the house when I introduced this measure, because I then explained that we were accepting the terms of a trade agreement made with the mother country, to which we are entitled to subscribe. During the course of the afternoon I placed on record statements of the imports from these different countries. Was my hon. friend present when I did so?


George Reginald Geary: If the minister had listened to me he would have heard me touch on that, but the point I made was that he gave this house no help in determining the future effect of these agreements upon the commerce of Canada.


James Alexander Robb: My hon. friend is giving a
very large order. WTe have looked carefully into the trade of the country and we have determined that it would be advantageous to Canada to make this trade agreement, but we are not able to say-my hon. friend knows it is impossible to do so-how much of the trade now going to other countries will be diverted to Canada. The fact remains, however, that the balance of trade now is largely in favour of Canada.


George Reginald Geary: I asked the minister to tell
us what has been the result of his inquiry during the negotiations mto the possible effect of the new tariff on Canadian trade. I am a little suspicious of the different trade treaties which this government has entered into. The minister himself has a passion for making treaties, and I cannot recall any country in Europe, except perhaps Monte Carlo or Russia, with which he has not proposed to enter into a treaty. I should like to know a little more about what the result of his observations was in regard to the effect of this treaty, but so far the minister has given us nothing.


James Alexander Robb: I repeat that I have not
placed before the committee the extent of the trade of the different countries with which we are making treaties with all the other countries of the world, but perhaps it might ease the mind of my hon. friend if I were briefly to review the general situation as it affects Canada. We heard this afternoon from hon. gentlemen opposite, and particularly from the gentleman who has a right to speak for that party, that as a result of these trade treaties we are exposing our industries to the competition of those countries apparently forgetting that at the same time they are opening their doors to our products. My information is that our products are going to those countries. The leader of the official opposition chided me very severely this afternoon for entering into these agreements, and, when asked what he would propose, emphasized particularly the in-
Commercial Treaties

creased importation of agricultural implements into Canada during the past year. I invited my hon. friend to come out flatly and say what he proposed to do to stop that. The hon. gentleman was very careful not to use the word "protection," although his friends around him I believe entertained the idea that protection was the cure he had in mind. My hon. friend hedged very carefully by saying that we could adjust matters through the instrumentality of the railways.


Richard Bedford Bennett: I did not say that.


James Alexander Robb: That was the inference from
what my hon. friend did say.


Richard Bedford Bennett: I did not say that.


James Alexander Robb: My hon. friend did not say
that? I will give the hon. gentleman credit that he did not say so explicitly. In the case of the transportation of grain and grain products there is, a special reduced rate on export business. We do not reduce the rates on products intended for the home market but we do reduce them on products that are shipped out of this country. I did not understand my hon. friend to say that he intended to reverse that policy.


Richard Bedford Bennett: I did not say anything about it.


James Alexander Robb: No, my hon. friend was very careful. He was almost as careful as they were at the Winnipeg convention.


Richard Bedford Bennett: He was not quite as careful as my hon. friend himself usually is.


James Alexander Robb: Let us look at the trade of Canada and find out whether there is any justification for the charge made against us that by reason of these treaties trade is not as good in Canada as it was in 1922.


Richard Bedford Bennett: No one said that.


James Alexander Robb: Let us find out if unemployment is greater now than it was in 1922. No,
I shall take the trade of Canada first.


Richard Bedford Bennett: Is this a speech for the gallery?


James Alexander Robb: Oh no, my hon. friends have invited it.


Henry Herbert Stevens: It is a third budget speech.


Richard Bedford Bennett: It is the budget for 1929. We have not had that yet.


James Alexander Robb: I have here a statement of the trade of the world prepared by the economic committee in Geneva. They point out that in 1913 the per capita trade of Canada was $145.50. In 1926 the per capita trade of Canada was $240.84. They also point out 
that in 1913 three countries had favourable trade balances per capita: the United States, $7.13; British India, 60 cents; Argentina, $6.78. la that year Canada had an adverse balance of trade. Hon. gentlemen opposite were then in office.


Richard Bedford Bennett: They were just getting ready for war in the Balkans.


James Alexander Robb: There was no war then. Canada had an unfavourable trade balance that year, 1913, of $29.61 per capita. What were the conditions in 1926? There were six countries that had favourable trade balances per capita, as follows: the United States, $3.22; British India, $1.01; Brazil, $1.97; South Africa, 14 cents; and France, 2 cents. Canada which in 1913, under the administration of my hon. friends opposite, had an unfavourable trade balance, in 1926 had a favourable trade balance of $29.34 per capita.


Richard Bedford Bennett: That is the fourth time this'session the statement has been read.


James Alexander Robb: Is it? I have some information here which has not yet been read this session. My hon. friend was very much alarmed this afternoon over the condition of the agricultural implement industry. He pointed out that we had to compete with other countries, and that there was a considerable inorease in the importation of agricultural implements from the United States. Let me show what was the result of the change in the tariff on agricultural implements of which my hon. friends complained so bitterly, and which they resisted for many weeks and finally voted against. We had some difficulty in putting it through; we were told we would ruin the agricultural industry. The change in the tariff took place in April, 1924. In August of that year the employees in 37 factories in the agricultural implement industry numbered 4,49S. In 1927 the same factories reported 8,698 almost double the number. There are 69 firms manufacturing agricultural implements in Canada. In 1924 they reported an average for the whole year of 6,700 employees. In 1926 they reported 10,091 employees. So much for the agricultural industry which it was said we had ruined.
Let us come to the automobile industry. This afternoon we heard from the hon. member for Ontario (Mr. Kaiser) in whose constituency there is located a very large automobile industry-I do not want to say that it is the largest in Canada. I do not want to accuse my hon. friend of being a party to what took place, but I know that when we reduced the duty on automobiles in 1926,

Commercial Treaties
there came to Ottawa a very large delegation composed of men who were sincere, who believed that we were going to ruin the industry.


Mr. McGIBBON:: The minister fixed it up later.


James Alexander Robb: That is not what my hon.
friend said this afternoon. He complained that we had ruined the automobile industry and he was supported by his leader.


Thomas Erlin Kaiser: I am afraid that the minister is a little wrong in his calculations. I never said a word about the automobile industry.


James Alexander Robb: He said that we had ruined industries, and his friends around him referred especially to the automobile industry.


Robert James Manion: I spoke of the automobile industry and I quoted the statement of the Department of Trade and Commerce. If the minister wishes, I will quote it again.
Mr. ROBB. All right.


Robert James Manion: This is the exact quotation. After a brief summary of the situation, they say in this report of the Department of Trade and Commerce, under a government in which my hon. friend (Mr. Robb) is Minister of Finance:
In review, a comparison of statistical data covering the Canadian automobile industry for 1927 with the figures for the corresponding period of a year ago shows the following features:	(1) Production was lower by 13 per
cent: (2) exports were lower by 23 per cent; (3) imports were higher by 28 per cent.
Then I said:
Has the automobile industry been adversely affected? The answer is obvious. Let me quote further:
"During December, 1927, the production of automobiles in Canada amounted to 3,435 cars. This was the lowest output reported for any month during the past three years, being only slightly over one half the number of 6,617 cars made in the previous month and less than one half the number of 7,752 cars produced in December of a year ago."
This is my quotation from the same report, and I will finish it:
I quote still further:
Imports of automobiles into Canada during 1927 totalled 36.630 cars, an increase of 28 per cent over the 28,535 cars imported last year which in turn was almost double the 14,632 cars brought into Canada during 1925. . . Exports of automobiles from Canada during 1927 amounted to 57,793 cars, a decrease of 23 per cent from the 74,553 oars shipped to foreign countries in 1926.
That is the report of my hon friend's Department of Trade and Commerce in regard
to the situation in the automobile industry during the past year.


James Alexander Robb: My hon. friend has quoted
statistics and I find no fault; but no person in this house knows the answer better than he does. He knows that the Ford industry was closed down. He knows that dealers throughout Canada in Ford car? were unable to get their supplies. I am not going to argue the question with my hon. friend, who is a doctor and a good one. I am going to put in evidence the statement of a gentleman who is at the head of one of the largest automobile industries in Canada. I have in my hand the Commercial and Financial Review for 1927, published by the Montreal Gazette, and in that publication I find at page 159 a statement by Mr. R. S. McLaughlin, president of the General Motors of Canada. He should be an authority; my hon. friends in 1926 considered him an authority on automobiles. This is what he says in that statement about the automobile industry:
Although Oshawa is an outstanding example, more than fifty other Canadian cities and towns benefit by the increasing importance of Canadian automotive industry. Important steps were taken during 1927 to increase the content of Canadian labour and materials in cars fabricated in this country. Contracts involving millions of dollars for parts and materials were let for the first time in Canada. In 1926 it was said that 100,000 persons in the Dominion were dependent on the automotive and allied industries. In 1928 it is probable that there will be half again as many, exclusive of the thousands who are involved in the sale and servicing of cars through dealer organizations from coast to coast. There seems little doubt that the coming year will be notable not only for the passing of the million mark in automobile registrations, but for the setting up of new records of production in the automotive industry in the Dominion.
That ia the statement of a man who is in the business and who ought to know, and the people of Canada will be more ready to accept such a statement than the tales of woe of hon. gentlemen opposite.


Robert James Manion: It was claimed by men
engaged in the automobile industry that the reduction in the tariff, until it was changed again, would ruin that industry.


James Alexander Robb: But they guessed wrong.


Mr. STEWART (Leeds):: The minister,
by many words and by a great deal of irrelevant argument, has entirely evaded the question that was very properly put to him by the hon. member for South Toronto (Mr. Geary) and which was, as I understand it, what imports were likely to come into Canada as a result of this treaty. The minister in
Commercial Treaties

connection with the Australian treaty had no doubt as to the object of Australia. We were told that they expected to increase their exports of raisins. He had no doubt whatever as to the intention and expectation of New Zealand when the treaty was made with respect to agricultural produce, the result being that imports of butter have been enormously increased to the great detriment of the dairy industry of Canada. What the hon. member for South Toronto is asking is what products these countries have in mind under similar circumstances and for which of these they hope to secure an increased market in Canada. The minister was well informed in regard to these other treaties; surely he must have similar information in regard to this one. That is what the hon. member is asking for and that is just what the minister has avoided giving to the committee.


James Alexander Robb: I can only repeat that I have
not those figures before me. My hon. friend knows from the trade we have had in the past what the trade has been in Canada. I say frankly to my hon. friend that we are changing these countries from the general tariff to the most favoured-nation tariff, and only time will tell to what extent it will help them. We know that we are getting the most favoured-nation tariff on our raw products.


James Dew Chaplin: Will the minister provide the information respecting the two countries he left out, namely, Portugal and the Slovene Kingdom?


James Alexander Robb: The imports from Portugal
are as follows:
Commodity
Figs, dried	
Wines, non-sparkling ..
Other seeds	
Sardines	
Damask of cotton	
Bed quilts of cotton ..
Handkerchiefs	
Sheets and pillow' cases,
cotton	
Embroideries	
Clothing, c-otton	
Other cottons	
Damask of linen	
Doylies, traycloths, et cetera, of linen..	..
Other flax, hemp, and so
forth	
Corkwood, not manufactured	
Corkwood, manufactured
Salt	
Containers, n.o.p. (packages)	
All other articles..	,.
$ 348,817	$ 471,026
The exports were as follows:
Commodity	1926	1927
Wheat			$1,141,908
Flour of wheat		$ 2,456	
Rubber manufactures .	2,350	14,881Codfish, dried	77,250	90,702Masts and spars. . . .	341	Planks and boards.. ..	7,077	705Harvesters	12,086	4,261Ploughs and parts . .	1,169	1,313Other farm machinery	and parts	732	1.648Needles and pins.. ..	3.085	1,995Automobiles, passenger .	14,810	3,078All other articles. . ..	417	12,966Total	
$121,773	$1,273,457
With reference to the kingdom of the Serbs, Croats and Slovenes, about 80 per cent of the population are engaged in agricultural pursuits. The kingdom has a population of twelve millions. The principal exports from the kingdom include grain, wheat flour, beans, prunes, hemp, live stock, meats, eggs, wood, cement, copper, ores and minerals. The imports into Canada during the fiscal year ending March 31, 1927, amounted to $6,854, and the exports from Canada for the same period $116,325. The principal exports were:
Wheat flour	 $ 37,128
Ploughs	 4,275
Parts of agricultural implements	 1.487
Automobiles	 61.159
Other articles	 12,276
Total	 $116,325
Their import tariff consists of two columns containing the minimum and the maximum duties.


James Dew Chaplin: Is there a clause in the
Portuguese treaty similar to the one in the Czechoslovak treaty respecting wines whereby we guarantee that no provincial tax shall be charged against them unless a tax is charged against ours? We have not the treaty before us and have to take everything for granted.


James Alexander Robb: They receive most-favourednation treatment, so I imagine they will have those terms. My hon. friend pointed out-


James Dew Chaplin: I pointed out in connection with the other treaty that we were particular to see that by its terms the foreigners were protected in the Ontario market, for example, that this government could look after them, but it could not protect our own people in the Ontario market.


James Alexander Robb: I pointed out to my hon.
friend in connection with the other treaty that that applied only to goods in transit and in warehouse.
1926	1927
$ 6,586	$ 8,098
218,032	248,091
	3,642
1.318	980
$ 16,280	$ 4,298
146	54
474	174
703	1,639 225
516	395
1,328	3,024
1,876	4,852
671	6,345
124	1,384
79,772	123.597
19,275	60,902 1,474
357	359
1,359	1,493
Total.. .. 

Commercial Treaties


James Dew Chaplin: The minister made that
statement, but the transit clause had nothing whatever to do writh the other. The transit clause stood by itself, and the other stood by itself. One had reference only to the goods, and the other referred to their transit. There would be no sense to it otherwise. Now the same clause comes in here again.


John Anderson Fraser: I would like to remind
the minister that when he was speaking in regard to our importations from Hungary he stated that out of a total importation of $60,OCX) we imported $58,000 worth of beans. Will the duty on beans from Hungary be reduced under this treaty? Will they come in under the preferential tariff?


James Alexander Robb: I will give my hon. friend
the tariff, and then he can judge for himself.


Henry Herbert Stevens: Give us the item.


James Alexander Robb: 
Richard Bedford Bennett: Over what they had before?


James Alexander Robb: Yes, but they will still have
to pay 221 cents a bushel.


John Anderson Fraser: Evidently this treaty will
result in a greater importation of beans. The minister has stated that we had a poor bean crop last year. I cannot say whether that is correct or not, but at all events we increased our importation of beans from 146,000 bushels in 1926 to 595,000 bushels in 1927, about four times as much. I do not want to dispute the minister's statement that we had a poor bean crop in Canada last year, but I do know that in my district in British Columbia we used to grow a lot of beans, but at the present time the farmers have quit growing beans for the simple reason that they cannot compete with the cheap beans from Hungary and Japan, and this reduction in the tariff will still further aggravate that situation. The amount of beans grown in that district may seem small, but it is large for that particular locality, which exports quite a large quantity of beans. But the minister by this treaty is making conditions worse for that section. At the present time they cannot make the living growing beans that they did a few years ago, and now the duty is to be decreased, resulting in greater importations than ever.


James Alexander Robb: There will still be a duty of
221- cents a bushel.


Richard Bedford Bennett: The minister has a very
insinuating manner. He came in this evening having in his possession the annual report made by a newspaper upon economic conditions in Canada. He proposed to produce that report containing an article written by the president of an automobile industry in Oshawa, and then to endeavour to make the member for Ontario (Mr. Kaiser) responsible for statements with respect to automobiles which were made by the member for Fort William (Mr. Manion).


Robert James Manion: On the word of the Minister of Trade and Commerce (Mr. Malcolm).


Richard Bedford Bennett: Yes. I saw him produce the report and get it ready with the aid of the Minister of Railways (Mr. Dunning). He then proceeded to fasten upon the member for Ontario a statement which he did not utter in order to make capital out of the observations made by the president of the automobile industry in Oshawa. The attempt failed because we would not let him get away with it. It was unworthy of him. When the government introduced their legislation to reduce the tariff on automobiles they told the people of this country that under no conditions would they vary it. They received a delegation in a theatre in this city, and the Minister of Finance at least had courage enough to say that he would stand by his guns-and those guns turned out to be squibs. Then he changed his legislation so as to afford a higher measure of protection to the industry than it had theretofore enjoyed. He knows it and everybody who understands the facts knows it. He raised the protection, not by the tariff, but by the use of the excise. I put upon Hansard the other day, and I repeat now, the figures of the Trade and Commerce department showing exactly what was imported into this country with respect to automobiles last year compared with the preceding year. When he says there were bad times in the automobile industry because the Ford Motor Company at Ford was closed that year, he is entirely beside the facts. As a well-informed minister of the crown he should know that at page 454 of the Commercial Intelligence Journal it is shown that in 1927, we imported for assembling purposes $29,582,000 worth of automobile parts, as against only $25,000,000 worth in 1926; in one year the value of the imports had risen by over $4,000,000. That is the answer. And the same state of affairs prevails with regard to other parts that enter into the manufacture of automobiles.
But the minister stated that I made certain observations with respect to the agricultural
Commercial Treaties

implement industry, and then he endeavoured to raise a target which he proposed to demolish. What did I say? That during the last few years this country has been steadily increasing its exports of agricultural implements and as well increasing its imports of such implements from the United States. Let me take the same authority that he quoted this afternoon, Mr. Thomas Bradshaw. What did he say when the government brought down its tariff with respect to agricultural implements? And what did Mr. Vincent Massey, the president of the Massey-Harris Company then say? They said the industry would be ruined if the policy initiated by the government was carried out. What was done by the administration? Rather than go back on their promises to the agrarian interests, and still desiring to placate the manufacturers, with that well-practised double-dealing, on the one hand blowing hot and on the other blowing cold, they gave a drawback upon all the imported materials entering into the construction of agricultural implements-wood, steel and iron-and thus afforded a larger measure of protection to the industry than it had theretofore enjoyed. The hon. gentleman knows it. What has been the result? There has been an increase in the prices paid by our farmers for their implements, not a decrease. And no one on the other side has risen to answer what was said by the hon. member for London (Mr. White) the other evening, that whereas in the year prior to the legislation with respect to drawbacks we manufactured 63 per cent of all the agricultural implements used in Canada, the last return we have shows that we made only 54 per cent. We have not the complete figures for last year, but they will show that more than half of all the agricultural implements used in this country were not of Canadian manufacture.


William Lyon Mackenzie King: How much did
we export?


Richard Bedford Bennett: I am just coming to that point. But we are told, our manufacturers have been busy. Busy on what? On manufacturing agricultural implements for export.


William Lyon Mackenzie King: All right.


Richard Bedford Bennett: Just let me read the
United States government report with respect to that, because it is all-important to keep in mind their statement as to what has happened to their own agricultural implement industry. I am not going to give a summary, for fear of misapprehension. Here are the exact words as stated at page 437 of the commerce reports issued by the United States Department of Commerce. I commend this 
to the Prime Minister in view of what he said in 1923 with respect to these matters:
The outstanding feature of the shipments of agricultural implements during the year 1927 was the large total that went to Canada, amounting to $29,791,472 which was 33 per cent of the total shipped to all countries, and which exceeded the shipments to all of Europe by more than $8,000,000.
Now the hon. Minister of Finance is talking about the business we are going to do in agricultural implements in Europe, whereas the United States did more business in Canada by $8,000,000 than they did in the whole of Europe last year.


James Alexander Robb: What year is my hon. friend quoting, 1927 or 1928?


Richard Bedford Bennett: I am quoting the commerce reports issued by the United States Department of Commerce on February 13, 1928, dealing with the calendar year 1927. Let us go a step further:
Canadian purchases in 1927 were the largest ever reported and were greater than the average shipments to all countries in the years prior to 1918.
Further:
These large Canadian purchases resulted from the^ material betterment of conditions in Ontario and the prairie provinces, especially Saskatchewan and Alberta, where American tractors, threshing machines, and harvesters were sold much more extensively than in 1926. Purchases of wheeled tractors were exceptionally large, amounting to 15.749 valued at $12,421,105 as compared with 8,173 valued at $6,823,648 in 1926. Sales of American implements in Canada have been showing consistent and rapid increases during the past three years and, since each of these years has been a good crop year, the buying power of the farming population lias been materially enhanced. It is also worthy of note that exports of implements to Canada comprised 90 per cent of shipments to all of North America, including Central America and the West Indies, and exceeded those to all of South America by $10,000,000.
That is the story during the three years that have elapsed since this government dealt with the tariff on agricultural implements. Let us see just what that means. The right hon. Prime Minister asked me what we have been exporting. Ah, Mr. Chairman,, no question could better prove my case, for it proves that while the American manufacturer has been taking advantage of the market near at home, the Canadian manufacturer has been forced to ship his product three thousand miles by sea and thousands of miles by land to find a market to replace his home market captured by his competitor to the south as I have read from the United States report. That is the glorious procedure of this government. Then they talk of our expanding foreign trade! May I in this regard refer to

Commercial Treaties
the language used by the right hon. Prime Minister just one year before he was forced- forced, I	say-by his supporters from
Saskatchewan to take this course, in order to make it seem that he was meeting their wishes in regard to the tariff on agricultural implements, while at the same time he was endeavouring to tell the manufacturers of these implements that all was well. These were his words when dealing with the tariff on May 23, 1923:
What is the position with regard to the United States? Since the Liberal convention was held, there has been enacted by the United States a much higher tariff than ever before existed between Canada and the United States. The Fordney-McCumber tariff, so-called, to-day is operating to the disadvantage of Canada. Is there any member of this house who will stand up in his place and say: Notwithstanding that obvious fact we think we should throw down our bars against the United States and give them an opportunity to come in here and affect our industries in a manner even more seriously than they have already been affected.
That was the question! propounded by the Prime Minister in 1923. In 1924, yielding to pressure to put these items on the free list, he appeased the manufacturers when they complained by giving them free raw material, free ore, free steel. The result has been that we have decreased the quantity of agricultural implements produced in Canada by upwards of 10 per cent since this tariff came into force. In other words, we have bought from foreign lands 10 per cent more of our agricultural implements than we were purchasing at the time this legislation was enacted, with no advantage to the farmer inasmuch as prices have not been lowered. The facts placed on Hansard by the hon. member for London (Mr. White) the other night cannot be controverted; they cannot possibly be denied. The trade journals which the hon. member produced, giving references to page and date, abundantly establish his contention. But there has been another effect of this policy: it has compelled the Canadian manufacturer to seek his markets thousands of miles away while his competitor across the imaginary line south of us has been able to pour his *products in over a few hundred miles by train to the destruction of the Canadian manufacturers' market. There is no dioubt about this; the figures conclusively prove it. It may foe said, as has been said frequently in the past: "Oh, well, we are a low tariff party; we are reducing the tariff on implements of production",-then turning to the manufacturer and saying: "We will not hurt you; we will give you a drawback on everything you import, so that while it may appear that we are reducing the tariff we are in reality affording you greater protection than ever".
That is the hypocrisy of the tariff policy of the Liberal party. That is the sort of double dealing which they practise: one story in the east and another in the west. It is the same in regard to fertilizers and other things as well. The Minister of Finance (when in Winnipeg last year discussing the tariff was prone to tell the people about the difficulties encountered during elections, when so much exaggeration was indulged in. He pointed out how little real basis there was for the statements made at such times. But when it comes to the question of getting votes I doubt whether there is anyone who can trim his sail to any passing breeze, without coming up in the wind, to greater advantage than can that hon. gentleman. In that regard he is more practised than his leader. It is indeed a valuable accomplishment to be able to catch the advantage of every passing breeze The Minister of Immigration (Mr. Forke) smiles.	No doubt he is thinking of the
speeches he made in 1925 in the province ol Manitoba with respectt to this government. That evidently is what is passing through his mind. He is reflecting on the threats of destruction which he was then breathing against the government-the disaster that would overtake them if they did not reduce the duties. But notwithstanding that they have not fulfilled his wishes, he can well1 smile, for they have made him an exalted minister of the crown. It is no wonder; he smiles because of the power thus entrusted to him. In the most serious moments of his life he could never contemplate the possibility of *a capacity so small invested with authority so great.


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: I say that with great
deliberation, because the administration of the department shows that he is wholly unfit for the duties of administration. We might as well be perfectly frank and fair about it, and the house will have an opportunity to decide whether or not that is so. The time has come when it is desirable in some things to speak with great frankness; and when you find departments administered as some departments are administered in this country, hon. members would be lacking in courage if they did not express themselves candidly. That is my opinion in that regard and there is no need for apology.
The Minister of Finance in the treaty he has introduced to-day has been careful to avoid dealing with the subject directed to his attention by the hon. member for Cariboo. He realizes that in respect of many of the articles to which reference has been made he

Commercial Treaties

is bringing about, in this instance, the same condition that resulted in relation to the Australian treaty with respect to raisins and other commodities. In other words, by giving a blanket concession, absolutely regardless of the details of his agreement, he is incurring the risk of having our markets destroyed with respect to such commodities as may be produced in the countries with which he is dealing. Now we are endeavouring to develop our resources. As the Prime Minister asks, if the markets to the south of us are shut off by the Fordney-McCumber tariff or any other policy that may be adopted in the United States, what happens? Here we are adopting a blanket policy with respect to these various countries with which we are making agreements, and the only stipulation we make is that the lowest tariff we give to any people in the world, with the exception of the British tariff, shall be extended to them.


James Alexander Robb: And they say they will give the same tc us.


Richard Bedford Bennett: Yes, they say that they will give us the lowest tariff they have. But I submit that the treaty is in its essence wholly wrong because it pays no regard to the varying circumstances and conditions prevailing respectively in the two contracting countries. I do not think a treaty is sound which provides a blanket concession such as this. It was not customary in days gone by to negotiate treaties in this form; it was customary to name the articles affected and to determine the measure of duty that should be applied. What we have done is this: we have gone to these countries and said, "You give us your best tariff and we will give you that tariff which is most favourable to you." Bear in mind that the League of Nations, to which the Minister of Finance made reference this afternoon, has stated that the only country in the world that has reduced its tariff since the war is Canada. We have a lower tariff than any of these six nations affected. If we are the only country that has reduced its tariff since the war, and these new states that came into being by reason of the doctrine of self-determination have erected, according to the report of the economic conference, high tariff walls for the purpose of endeavouring to render their communities self-sustaining and self-contained, it is obvious at what a disadvantage we have placed ourselves. Willy-nilly we are making a blanket arrangement by which we say to them, "You give us the lowest you have and we will give you the lowest we have." But as Senator Dandurand says, Canada has reduced its tariff three times since the war, and

- it follows therefore that our tariff is relatively low to those of the various countries involved. My hon. friend from South Toronto, who is desirous of ascertaining the tariff rate with respect to some of these items, has asked for certain figures. We had certain figures given to us yesterday, but none have been volunteered to-day. We do not know what the tariff is in relation to Esthonia or Latvia or Lithuania or the country of the Serbs. We do not know what their tariff is on the various items involved; we have no idea what intermediate tariff they levy. In negotiating this treaty, to which we are asked to give our approval, the minister has offered us nothing in any shape or form to indicate what duties are imposed by these foreign countries. We know of course that they have varying tariffs; they have high tariffs and low tariffs; some have intermediate tariffs and others have not. Others again have one tariff against the world. But we have undertaken to accept the lowest tariff from them, whatever it may be, and we are giving them in return-apart from the British preferential tariff-a rate lower than that we shall enjoy from any of them. Aud this we are doing regardless of any other consideration. I submit that is not a proper basis on which to negotiate a treaty. For instance, we should know exactly whether, by reason of such a treaty, raisins are to cost us $2 or $3 per pound in duties. Had we known that when the treaty was negotiated with Australia, the situation would have been different, because there are many admirable things in connection with that treaty. I suggest, however, rhat if the minister had had the knowledge of bargaining he should have had, he would not not have made that agreement with respect to raisins. He has said himself, and we have it on record, that when he went to Australia ne tried to raise the tariff so that he would have something with which to bargain, having in mind the very fact to which I now allude. So it is painfully apparent to us as the years go by that to place upon the statute book a treaty about which we have nothing before us to indicate the measure of the duties imposed is but to put our heads in a noose and leave the noose open. As a result some products may come in here more readily than they will go anywhere else, while at the same time we have the advantage of the lowekt tariff, whatever it may be ,in these countries in Europe. There is nothing to indicate that the protection is fair or just, and certainly it is a departure from the principles under which tariff treaties were negotiated in the early history of this country. For that reason

Commercial Treaties
we are directing attention to the undesirability of entering into blanket treaties with respect to trade which contain no specific reference to the various matters affected, and which do not allow this country to safeguard its industrial, agricultural and indeed its national life through this parliament. We have had occasion during the last few weeks and months to direct attention to the fact that the treaty negotiated with New Zealand by order in council has brought into Canada from the country during the last few months thousands of pounds of butter. I do not refer to the Australian treaty; I speak of a tariff treaty negotiated by order in council, with respect to which this parliament was not consulted. I submit that to negotiate commercial treaties in this way is to bring about injury to the economic life of this country which cannot be easily overtaken, because as he said not long ago my hon. friend realizes the difficulties with which he had to deal in considering the effect as regards raisins and the effect of the New Zealand treaty with respect to butter.
I do not want these cases to be similar in character, and for that reason we venture to point out the undesirability of negotiating blanket treaties with no reference to the articles affected, leaving the lowest tariff in each country to affect the imports into the respective countries without regard to the peculiar circumstances and conditions under which we maintain our national life.


William Lyon Mackenzie King: My hon. friend has spoken so rapidly and has covered so many subjects in the course of his remarks that I hope he will pardon me if at the moment I do not fully grasp the significance of all that he has said. However, he did begin by referring to the agricultural implement industry, and I believe he cited Mr. Bradshaw as an authority. The impression he sought to leave with the committee was that through its legislation the government had in some way injured the agricultural implement industry.


Richard Bedford Bennett: I will correct that; if
I spoke so rapidly that my hon friend could not hear me I will now speak slowly. I said that when the legislation was introduced lowering the duty on agricultural implements Mr. Bradshaw said that if it remained as it was it would be ruinous to the industry, and that the government gave drawbacks upon the steel, iron and other raw materials entering into the construction of these implements, so that the industry was better off than ever.
56103-135^


William Lyon Mackenzie King: Do I understand my hon. friend to say that the effect of the legislation really has been to help the agricultural industry?


Richard Bedford Bennett: To give it the same protection it had before.


William Lyon Mackenzie King: Is my hon.
friend arguing that the effect of the legislation has been to help the agricultural implement industry or to injure it?


Richard Bedford Bennett: I repeat-


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: There is no difficulty in answering that question. The legislation passed by the government has afforded to the agricultural implement industry as much protection as it had before, if not more. The point I made was with regard to the duplicity involved in endeavouring to make one part of the public believe the government were removing duties while they were really putting the manufacturer in a better position than he occupied before.


William Lyon Mackenzie King: My hon. friend must not get away from the point. His argument was that the agricultural implement industry was now obliged to export very much more largely than had been the case formerly, and the inference was that it did so because it was not in as favourable a position as it had been before the legislation had been passed by the government, or as it would be were it supplying the home market primarily.


Richard Bedford Bennett: That is true.


William Lyon Mackenzie King: I assume my hon. friend will still admit that Mr. Bradshaw is an authority deserving of quotation?


Richard Bedford Bennett: Certainly he should be.


William Lyon Mackenzie King: Then allow me to read to my hon. friend what Mr. Bradshaw has said in reference to the agricultural implement industry as his words will be found in the Montreal Financial Times under date of March 9 of this year. He says:
The year 1927 witnessed a conspicuous advance on the part of the implement industry in Canada. Sales showed a substantial increase in most fields-
Later on he said:	,
Production in all Canadian implement factories last year was noticeably greater than before, and in many of them it was necessary to engage m night shifts to a considerable extent.


Richard Bedford Bennett: That is export business.

Commercial Treaties


William Lyon Mackenzie King: That is the
business in which these companies are engaged. Mr. Bradshaw proceeded.
Although the implement industry was able to make a substantial advance in Canada in 1926. its progress in 1927 was even greater. All companies reported increased business both in east and west.
Further on he said:
In view of the generally good conditions as outlined and the substantial progress made m recent years, the implement manufacturer feels justified in taking an optimistic view.
I think we can accept the statement o,f Mr. Bradshaw as to the position of the implement industry, and I think the manufacturers of agricultural implements know their business better than does anyone else. If it is profitable to make their sales in an export market rather than in the home market I think the manufacturers should 'be given that privilege, so long as the Canadian consumer has the opportunity of getting his goods from whatever sources they can be obtained at fbe lowest cost possible. His interests then will be amply protected. I say therefore the policy of the government in enabling the consumer to obtain his implements from sources which may be even more advantageous to him than those of the home manufacturers, and at the same time enabling our manufacturers to increase their total production, and in particular their export business, has helped both the producer and the consumer.


James Alexander Robb: My hon. friend has been quoting figures, and to substantiate what Mr. Bradshaw has said I find that in the year 1921, when hon. members opposite were in office, the importation of agricultural implements from the United States amounted to $24,134,783. Today my hon. friend complains because that business amounts to about $18,000,000.


Richard Bedford Bennett: 


James Alexander Robb: I see the reason for the difference ; I am quoting the figures for the fiscal years.
Mr. SPEN'CE: You are quoting them to suit yourself.


James Alexander Robb: It makes no difference; it is [DOT]a year's business just the same. During the fiscal year 1927 our export of agricultural implements to the United States amounted to $4,204,,581, so the trade goes both ways.
I must have misunderstood my hon. friend from Toronto; I thought he was asking for the export of goods from the different coun-

tries mentioned to the United Kingdom, but now I infer that the house requires information as to the difference in tariffs, and I ana quite prepared to put that information on record.


George Reginald Geary: What I suggested to the
minister was that he should take the house into his confidence as to the negotiations, and as to what he learned which induced him to enter into this treaty. He has given us nothing whatever on these points.


James Alexander Robb: My hon. friend wanted to
know-


George Reginald Geary: What the prospects are under the new tariff.
Mr. RjOSBB :	My hon. friend wants me to
give the difference in the tariffs. For instance in Esthonia we are getting a reduction of from 10 to 50 per cent.


John Anderson Fraser: What are the rates?


James Alexander Robb: I will give the rates. On explosion motors operated by naphtha fuel, and other machinery, the rates are 0.23i gold francs per kilo. The reduction under the French treaty with Esthonia is 20 per cent off the general tariff. In the case of agricultural machines the general tariff is 0.02 francs. The reduction under the French treaty with Esthonia is 30 per cent. Their franc is one-fifth of a dollar in round figures, and we get a reduction of 30 per cent.


James Dew Chaplin: Is the rate so much a
pound or so much a kilogram?


James Alexander Robb: A kilogram, I imagine. There are reductions of 50 per cent, 50 per cent, 20 per centt, 33i per cent, 25 per cent and 50 per cent.


John Anderson Fraser: What is the rate on beans entering Hungary?


James Alexander Robb: We do not ship beans.


John Anderson Fraser: You referred to Hungary this afternoon. I do not know what you meant by it.


James Alexander Robb: We do not ship beans to Hungary.


John Anderson Fraser: What does Hungary charge if we want to ship them to that country?


James Dew Chaplin: We may have a chance to export beans.
Mr. ROBlB: I have not the rate on beans.


Thomas Erlin Kaiser: The Prime Minister and the Minister of Finance are quoting figures purporting to show what has been accomplished in the matter of agricultural implements. They

Commercial Treaties
claim that as the result of a change made in the tariff the agricultural implement people employed more hands. Now in the case of this large industry when the duty was taken off the government endeavoured to assist them from the bottom by permitting certain materials from a foreign country to enter Canada free and to go into the manufacture of agricultural implements. When the members of the government are setting up claims in regard to the number of men employed in the agricultural implement industry why do they not state how many men were thrown on the street in Oshawa because the malleable iron works closed for a year or two? For years and years we made malleable iron for this industry and thus built up a large industry. It was a secondary industry and this government never considers the little industries. Canada needs the smaller factories, and they require to be looked after just as well as the larger ones. Malleable iron entering into the manufacture of these implements was allowed to come into the country free or almost free. A few days after the government made this change the large industries took from their factories in Oshawa every mould and every pattern. They were actually closed down, the men were thrown on the street, and the malleable iron industry in Oshawa would have been out of business to-day had it not been for the springing into existence of the automobile industry, whereupon the malleable iron works changed from making malleable iron for agricultural implements to making iron for automobiles. But this readjustment required several years. The government effected a little change in the tariff in the interest of the large industries and put a number of small industries out of business. This is something which should be taken into consideration when the government make such boasts as those in which they have been indulging.


Henry Herbert Stevens: My hon. friend the Minister of Railways (Mr. Dunning) grins and laughs; I do not know why.


Charles Avery Dunning: May I not smile? I was not thinking about the hon. gentlemen.


Henry Herbert Stevens: My hon. friend may smile if he chooses but there are two ways of doing it. Last night when a similar treaty was under discussion we drew the attention of the minister to the fact that the French treaty would be carried en bloc into these treaties. We have no way of judging what the effect of the French treaty upon Canadian trade is as applied to these different countries; the minister is not vouchsafing any information on that subject. I want to take
this opportunity of protesting, as I did yesterday, against the system of blindly incorporating one treaty into another without any knowledge of the possible effect of the treaty with France upon the seven treaties we are now adopting. I call the attention of the committee and the minister to the fact that in the explanatory notes in this bill we have nothing before us at all except the quotations from the treaties indicating that Canada may, under certain conditions, join in the benefits or what are suggested as benefits likely to result from those treaties. We have no information before us as to what the effects of these treaties will be. I draw attention to the further fact that these seven treaties are made with Great Britain, which has an entirely different fiscal system from that of Canada, and we have not before us any information that will enable us to judge whether or not treaties which it may be quite proper for Great Britain to make are suitable to the fiscal policy of this country.
There is another thing I want to refer to, because there has been some argument and a bit of cross-firing regarding the effect of the tariff in two or three principal industries. The minister quoted figures for two selected years regarding the agricultural implement industry. What I wish to place before the committee in that respect is a quotation from the Trade of Canada for the fiscal year ending March 31, 1927. I shall not bore the house with the details, but I have them here and if required I will give them. The total imports of agricultural implements in 1923 were $8,392,000. That was the year, if I recall rightly, when the amendment to the tariff was made.


James Alexander Robb: No, it was in 1924.


Henry Herbert Stevens: I will give the other years. About that time an amendment to the tariff was made reducing the duties, and this is the story in regard to imports of these agricultural implements. I am giving the round figures:
Year	Imports
1923		
1924		
1925		
1926		
1927			 18,800,000
The point is this, that in these few years the importations jumped to more than double what they were prior to the change in tariff.


Charles A. Stewart: Has my hon. friend the figures as to the output of Canadian companies during that period?
Commercial Treaties


Henry Herbert Stevens: I will deal with that in a moment. The export trade shows a corresponding increase. The figures are as follows:
Year	Exports
1923		 $ 6,000,000
1924		 9,000,000
1925		 11,000,000
1926		 13,000,000
1927		 17,000,000
It is not a sufficient answer to say: Oh, you have lost a great deal of business in Canada; there has been a tremendous increase in imports, but you have been exporting. This is what I want to draw to the attention of the committee. The Minister of Finance and his colleagues argue on the basis that if we can keep Canadian trade just about even, we are doing well. Canada ought to be progressing more effectively and in a larger degree than any other country in the world.


James Alexander Robb: Canada is doing so.


Henry Herbert Stevens: It ought to do so. Its
natural conditions warrant us in expecting it to expand in every direction, but it is not doing so in these particular branches of trade. We have increased our exports and that is all to the good, but we must look at the other side of the story and realize that we have increased our imports in this industry. I have under my hand the figures, which I shall not bore the committee with at the moment, but which show that the cost to the Canadian purchaser has not been reduced correspondingly; as a matter of fact there is an increase in the cost to the Canadian purchaser. But Canadian factories have lost about $10,000,000 worth of business owing to increased imports in this particular line.


Charles A. Stewart: Does my
hon. friend intend to give the committee the increase in the home trade?


Henry Herbert Stevens: The figures are not given


Charles A. Stewart: They would be interesting.


Henry Herbert Stevens: I make this suggestion,
although it will take a little mental arithmetic. We might take the exports and if we deduct from them-


Charles A. Stewart: All I want
is the bare increase in business.


Henry Herbert Stevens: I have not the figures
under my hand. I was endeavouring to suggest a way by which they might be arrived at. I am not saying that there has been no
fMr. C. A. Stewart.]
increase. I am saying that there has been a large increase in exports, but there has also been a tremendous increase in imports.
Let me deal now with imports of automobile parts. The figures are as follows:
Year	Imports
1923		 $14,000,000
1924		 16,000,000
1925		 14,000,000
That is an average of about $15,000,000 a year. Then in the second budget of 1925 we amended the tariff adjustments that were first introduced and we put certain parts and materials on the free list, with what result? The result was that importations of automobile parts increased in 1926 to $23,000,000 and, ini 1927, the figures for which the minister did not quote, to $29,000,000. What has been the .effect? The effect of the amendment to the tariff in 1925 has been simply to double our imports of parts entering into the manufacture of automobiles. Let me take some of the items. For instance, a line of manufacture .that is handled wholly in Canada is tops, wheels and bodies. I see no imports of these prior to 1925, but in 1926 we have an importation amounting to $6,000,000, showing a tremendous increase in this importation and naturally a loss to Canadian trade. The result ,of the whole thing is this, as my hon. friend .pointed out a moment ago: You closed up in Oshawa a malleable iron factory for a period of time. It is true they reopened that and are working again. In another section of Canada near Windsor there was a factory successfully manufacturing automobile tops, and this factory has been closed up and out of business ever since. Authorities that know tell me that in Ontario alone there are two hundred industries that are seriously affected by these amendments to the tariff. It is not sufficient to say that Massey-Harris, the International Harvester, possibly the General Motors and a few other large companies have compensated their loss in some other way, if other industries in other cities and towns have been seriously and adversely affected. That is our complaint. We say to the minister in regard to this treaty just as we said in regard to the treaty that was under discussion yesterday: We have no way of gauging its possible effect upon Canadian trade. Personally I am quite prepared to endorse the principle of making trade agreements with other countries; but I would want to use our bargaining power, that is our tariff, in making specific treaties with these different countries, getting some advantage in their market in return for an advantage ' offered in our market. But in this case we .are given nothing of the kind, and I venture to say that the minister has not an official

Commercial Treaties
in his department nor has the Department of National Revenue an official who can give us any idea of the possible effect of this treaty. This series of treaties will go into operation; imports will start to come in and then industries which are adversely affected will come pext year before parliament or before the government and plead for some redress in regard to the unfair competition to which they are subjected. That is not a reasonable way to legislate or to make treaties, and we are justified in complaining very bitterly that the minister is unable to give us any information regarding the possible or likely effect of this treaty. When the hon. member for South Toronto put his question to the minister this afternoon, it was a pertinent query that ought to have brought forth some response, I repeat what I said yesterday in regard to the treaty with Czechoslovakia, that we are blindly ratifying to-night these seven treaties without knowing any of their terms. Furthermore, we do not know to what we are committed in the way of navigation, because these are trade and navigation treaties.


James Alexander Robb: There is nothing about navigation. We are accepting only the trade part.
Mr. STEVEN'S: It is very comforting to get that information from the minister.


James Alexander Robb: I would direct my hon. friend's attention to 'the preamble, which is very clear:
Whereas it is desirable that Canada should have the benefit of that portion of each of the treaties or agreements which provide for the exchange of the said mutual trade advantages.
That is all we accept.


Henry Herbert Stevens: I read this also in the preamble:
Whereas by treaties of commerce and navigation or by agreements made by exchanges of notes between the United Kingdom of Great Britain and Ireland and the countries and on the dates set out in the schedule to this act


James Alexander Robb: That is the title.


Henry Herbert Stevens: No, it is the preamble.
It is provided that the stipulations of the said treaties or agreements respectively shall not be applicable to any self-governing dominion unless notice is given of the desire of His Majesty that the said stipulations shall apply to such dominion but that nevertheless goods of such dominion shall enjoy in each of the said countries respectively the same treatment as would be enjoyed by similar goods if produced in the United Kingdom so. long as goods produced or manufactured in the respective countries are accorded in such dominion favoured-nation treatment;


James Alexander Robb: Read on.


Henry Herbert Stevens: and whereas it is desirable that Canada should have the benefit of that portion of each of the treaties or agreements which provides for the exchange of the said mutual trade advantages: Therefore His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: -
We have not a single article of the treaties before us except these articles which refer to the method by which we shall become a party to the treaty. That is the complaint we make, that the minister ought to have given the house copies of these treaties long ago so that we might have studied them carefully, together with information regarding trade other than just the bare imports and exports-because, after all, we are not making this agreement simply to deal with $300 worth of beans, which was mentioned in regard to one of the countries, but with the expectation of doing a growing business. If we expect to do additional business we want to know what direction that business is going to take. If we expect to increase our importations from these countries-and there can be no other object-we want to know what effect that is going to have on Canadian trade.
My hon. friend from Cariboo a moment ago drew attention to the question of beans. It raised a laugh in the house, but I want to say that I know that particular district and have known it for nearly thirty-five years. There are hundreds of farmers in that district, which is in what is known as the dry belt of British Columbia, who succeeded years ago in raising a very high quality of bean. It was their whole crop, and was just as important to them as the wheat crop is to the prairie farmer or the vegetable crop to farmers in other parts of the country. It was life or death to them, financially; it meant success or failure. Conditions were difficult for them because of competition from Japan and China, and the beans from those countries, by the way, were found upon examination in Canada to contain a certain poison, and there was a time when we had to shut those beans out of this country in the interest of the health of the people of Canada. There is now coming in from certain of the Balkan states what is known to be an inferior bean, a small yellow bean, which is not on a par at all with the beans we can produce in the district to which my hon. friend has referred and in other sections of Canada; they are not comparable at all, and yet our farmers are faced with this competition. The minister and others may say, what do the few beans we import amount to? But I say that it means all the difference between these farmers continuing in business or being driven out of business.

Commercial Treaties


An hon. MEMBER:: It means spilling the beans.


Henry Herbert Stevens: Yes. It makes all the
difference in the world to them. It is a serious matter. I notice in the tariff which I have under my hand a long schedule of stuff coming in from Japan. Now the Japanese treaty of 1913, irrespective of what it contains, is to become our treaty with these seven different countries, and I ask the minister, does he know, in the light of the Japanese treaty, what the effect of these other treaties will be on Canadian trade. He may answer that he does not think they will have much effect. I do not know; I have not had time to check it up, but the point I am making is that both the French and the Japanese treaties become our treaties with seven other countries by one stroke of the pen, without the slightest information being furnished to parliament as to the possible effects. I submit that that is not fair to the people of Canada. Those in Canada who will be affected will not know it for one, two, three, four, six months, or perhaps a year, and then they will begin to realise that importers in Montreal and other parts of Canada are bringing in goods with which they cannot successfully compete. Someone may say, let us buy these goods in the cheapest market; but owing to the depreciated currency in these countries, and that factor, I am glad' to say, is lessening from year to year-


Mr. YOUNG (Weybum):: How does depreciated currency affect the situation?


Henry Herbert Stevens: The depreciated currency
of Europe has been one of the most serious factors affecting our trade. My hon. friend can shake bis head, but I know it; I have studied it from end to end. And not only is that a factor, but there are also the long hours of labour and the low wages paid in those countries. There is no gainsaying that their standard of living is lower than the Canadian standard. It is all very well to come forward . with this rather fantastic theory that the great desideratum should be to buy your goods in the cheapest market and sell them in the dearest, and then fold your arms and feel that you have propounded a profound philosophy, but as a matter of fact these things are not dealt with by theory; they are not determined by any philosophical reasoning, but by cold facts, competition and experience, and the experience of Canada will be suddenly to wake up and find that she has entangled herself in a dozen treaties in the last few hours which parliament is blindly ratifying without adequate information as to what the effects will be.
(Mr. Stevens.]


James Alexander Robb: My hon. friend was for a short time-for altogether too short a time, I have no doubt he imagines-Minister of Trade and Commerce, and he knows the staff of the department fairly well. I think he will agree that among our best trade commissioners is Mr. Wilgress, who represents Canada as trade commissioner with headquarters at Hamburg. My hon. friend complains that we have no information before us from any of the officers of the department recommending treaties with these countries.


Henry Herbert Stevens: I did not say anything of the kind. I said that parliament has no information before it. The minister may have the information on his desk, but we have been discussing these matters now for two hours; one of these treaties we discussed for nearly two days, and I submit that, whatever information the minister has, it has not been placed before parliament.	.


James Alexander Robb: We have a letter from Mr. Wilgress dated September 21, 1926-possibly he was then writing to my hon. friend as minister-in which he says:
You will note that while Canadian goods are at present receiving the reductions, the Estho-nian government are awaiting official notification from Canada that most-favoured-nation treatment is being extended to goods of Es-thonian origin. I cannot too strongly urge that steps should be taken as soon as possible to officially notify the Esthonian government in the above sense, since there are practically no products which Esthonia could export to Canada, and hence the advantages would be all on the Canadian side if such a step was taken.
I admit at once that perhaps it might have been better had we had printed and distributed among the members more detailed information as to the difference in the tariffs, but as I pointed out on the introduction of the measure, we are obtaining concessions running from 10 to 50 per cent in the tariffs on our goods going into these countries. My hon. friend complains that this treaty is based on the treaty made with Japan, and he mentioned particularly beans. My hon. friend surely is not going to chide me over the Japanese treaty, which, was made by the Conservative government in office in 1913.


Henry Herbert Stevens: That is not my point,
and the minister knows it.


James Alexander Robb: I am not finding any fault
with the government of that day; I think it was a pretty good trade agreement with Japan. In 1922 we imported from Japan $8,194,682 worth of goods, and we exported about $14,900,000 worth; in 1927 the respective figures were $11,000,000 and $30,000,000 odd. That is a pretty good kind of trade.

Commercial Treaties
I submit experience will prove not what my hon. friend has suggested, but that this trade will be of equal advantage to the Dominion.


James Dew Chaplin: Will the minister give us
the trade under the French treaty?


James Alexander Robb: In 1922 we imported from
France $13,482,005 worth of goods, and exported $8,248,000 odd; in 1927 the respective figures were approximately $23,000,000 and $15,000,000. I admit at once that in this case the balance of trade is against us.
Referring again to agricultural implements, mentioned by my hon. friend, I observe that our total exports to all countries for the fiscal year ending March, 1927, were about $17,000,000 in value, and our total imports about $18,000,000. But had my hon. friends thought for one moment they would not have brought up this question, particularly as to the increase in our importations, because the records show that this increase is represented mainly by farm tractors and tractor parts. My hon. friends did not treat that industry as kindly as we did the agricultural implement industry in 1924. In 1918 they put these tractors on the free list, but did not make any provision for our manufacturers to get their raw material on the same basis, with the result that they put the industry right out of business. To-day we are not manufacturing any farm tractors, and last year we imported $8,000,000 odd.


James Dew Chaplin: What we did in 1918 was in the nature of a war measure to increase the production of grain at less cost. The minister knows that very well. What has he done to alleviate the condition? Nothing.
Mr. STEWART (Edmonton);	Did the
government supported by the hon. gentleman do anything for the industry between 1918 and 1921?


James Dew Chaplin: We simply took off the
tariff.


Charles A. Stewart: But you
did not put it on again.


James Dew Chaplin: When the Union government was in power it was well understood that no tariff changes would be made except in a few instances; that is, there was no general adjustment. If what we did was wrong, why did not the present minister make the necessary change? Has he done anything?


Henry Herbert Stevens: The minister has again
followed his old course of imputing to me an adverse reference to the Japanese treaty that I never made.


James Alexander Robb: No.


Henry Herbert Stevens: What I complain of is that by this omnibus measure we are embodying in the seven treaties dealt with the treaty with France and the treaty with Japan, without any adequate knowledge of what the effect will be. Then the minister told us we had no information. But after we have been debating this and the other treaties for two days, he produces for the first time a letter from our trade agent in Hamburg. That letter contained only a suggestion to the government that the time had come when we should enter into treaties with these countries. My complaint is that the minister has had since 1926, when the letter was received, until 1928, to prepare his precis of this whole business, which should have been laid on the table with these bills so we would know what the effect would be. I am not complaining of the officers of the department. I am complaining that the government of the day brings down measures without furnishing the information to enable us to judge their merits. I protest vigorously against passing these treaties. It may be that they will work out satisfactorily, but we are going blind at the present time. As I said on a previous occasion, neither the minister himself, nor any of his colleagues, nor any official of his department, is competent to say now what will be the effect of these treaties.


[Stage Direction]
Section agreed to.
Schedule agreed to.
Bill reported.
Mr. ROBB moved the third reading of the bill.
Mr. SPEAKER:: Shall the said bill be read a third time?


Richard Bedford Bennett: On division-.


Hewitt Bostock: Carried on division.
Motion agreed to and bill read the third time and passed.
On motion of Mr. Mackenzie King the house adjourned at 10.53 p.m.
Wednesday, April 18, 1928