1928-02-16

["A special committee was\nappointed yesterday to consider problems affecting returned soldiers. The number comprising the committee was fixed at seventeen. Apparently seventeen is an infraction of the rule, which would limit the number to fifteen. 1 move, therefore:\nThat the provision of standing order No. 65, under which no special committee may, without leave of the house, consist of more than fifteen members, be suspended in connection with the resolution passed by this house on February 15, appointing the special committee on pensions and returned soldiers' problems."]
Right Hon. W. L. MACKENZIE KING (Prime Minister):: A special committee was
appointed yesterday to consider problems affecting returned soldiers. The number comprising the committee was fixed at seventeen. Apparently seventeen is an infraction of the rule, which would limit the number to fifteen. 1 move, therefore:
That the provision of standing order No. 65, under which no special committee may, without leave of the house, consist of more than fifteen members, be suspended in connection with the resolution passed by this house on February 15, appointing the special committee on pensions and returned soldiers' problems.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Mr. E. R. E. CHEVRIER (Ottawa) moved for leave to introduce Bill No. 45, to amend the criminal code (greyhound races).
He said: The object of the bill is to amend the criminal code for the purpose of placing greyhound racing on the same basis as horse racing as now carried on in Canada.
Motion agreed to and bill read the first time.

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

Mr. CAYLEY:: 1.	From what countries is butter being imported into Canada?
2.	How many pounds were received from each country ?
3.	What was the increase of total imports of butter in 1927 over 1926?
4.	What were Canadian and British prices of butter for 1927?
5.	How many pounds of butter were exported out of Canada in 1925, 1926 and 1927, respectively ?
6.	Can butter be produced more cheaply in countries exporting butter to Canada than in Canada? If so, why?


Mr. RINFRET:: 1, 2 and 3.
Quantity of Butter imported into Canada, by countries, years ended December 31, 1926 and 1927, with increase or decrease, 1927 compared with 1926.
Years ended	December 31	Increase + Decrease-1926	1927	1927 compared with 1926Countries from which Imported	Pounds	Pounds	PoundsUnited Kingdom	2,798,697	2,007,830	. - 790,867United States	99.127	104,236	+ 5,10962.720	- 62,720Australia	2,995,740	376,096	- 2,619,6448	- 8448	- - 448Fiji	4,760	+ 4,760Italy	9	4- 9Newfoundland	110	410	+ 300New Zealand	3,193,382	8,714,985	+ 5,521,603Syria	1.650	490	- 1,160Trinidad and Tobago	3	+ 3Total imports	9,151,882	11,208,819	+ 2,056,937
4.
Butter-wholesale prices at Montreal for 1927. (Quotations middle of Month)
1927	Cents per pound
January	 43
February	 42
March	 46
April	 39
May	 38
June	 36
July	 36
August	      38
September	  41
October	  42
November.,		40
December	 40

Privilege-Mr. Woodsworth
Butter-wholesale quotations London, England (Commercial Times) (Middle of Month).
1927	Argentine	Dutch	New Zealand	Danish
	Converted at Pai	[DOT] to cents per pound		
January 	,. 30.8-34.7	39.9-40.3	32.1-39.9	37.7-38.1February 	.. 32.1-34.3	42.9-43.3	35.1-39.4	40.7-41.1March	.. 30.8-33.0	37.7-38.1	32.6-35.6	38.6-39.0April	,. 31.3-33.9	38.1-38.6	31.7-35.6	38.6-39.0May	.. 31.7-33.4	33.0-33.9	33.0-36.0	34.3-35.1June	, . 32.1-35.6	33.4-34.3	33.4-37.7	34.7-35.1July	.. 30.8-35.1	33.0-33.9	29.1-35.1	34.3-34.7August	,. 31.3-36.0	36.0-36.4	34.3-38.6	37.7-36.0September	. . 37.7-38.1	40.7-41.1	36.0-40.3	41.1-41.6October	. . 33.4-38.1	41.6-42.0	36.0-40.3	41.1-42.0November	.. 33.9-37.7	43.3-43.7	34.7-40.7	44.6-45.0December	,. 31.3-35.1	42.1-41.1	32.1-34.7	39.0-5.	Exports of Butter from Canada	(Calendar Years,	1925, 1926 and 1927)	1925	1926	1927Pounds	Pounds	PoundsCanadian Produce.	26,646,535	9,814,000	2,696,000.Foreign Produce..	840	800	2,100Total Exports.	26,647,375	9,814,800	2,698,100
6. In the case of New Zealand-probably yes. As to other countries-not in a position to express opinion.
Butter can probably be produced more cheaply in New Zealand than in Canada owing to the fact that lush pastures are available there for twelve months in the year, thus saving a great deal of work harvesting forage and quite possibly lowering production costs as compared with Canada.


COST OP CARRYING NEWSPAPERS
Mr. GEARY:: 1.	What was the cost of carrying newspapers
by mail during each month from January 1, 1926, to date?	.
2.	What was the revenue derived from the [DOT]carrying by mail of newspapers during each month from January 1, 1926, to date?
3.	On what date did the reduced rates -authorized by parliament in 1927 come into effect?


Mr. VENIOT:: 1. The cost of carrying newspapers is approximately $8,500,000 per annum.
2.	1926	1927
January			$149,104 06
February	. .. 125,22 1 42	146,227 09March	.. 130,067 13	149,011 25April	. .. 137,300 93	133,038 97May	. .. 138,300 57	134,572 35June	. .. 136,301 31	131,505 61July	. .. 133,156 25	114,124 25August	.. 134 .284 35	116,248 57September.. ..	.. 138,322 94	118,358 47October	. .. 149,872 61	127,114 %November.. ..	.. 148,876 32	122,105 54December.. ..	.. 156,868 92	131,510 89
3. 16th April, 1927.
PRIVILEGE-MR. WOODSWORTH On the orders of the day:


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I desire to direct attention to an entirely misleading, I may say, false, statement, with reference to what I said the other day during the debate on national banking, which is contained in the Toronto Evening Telegram of February 14 in what purports to be an account of the proceedings of that date, despatched by the special staff correspondent. I find that under the guise of a report a vicious attack on myself. Under the special heading " Rebellion Suggested " I read:
But his language grew stronger as he went along, and he pictured the whole of the national credit drifting into the hands of two or three men and then recorded his sad conviction that, "If anything would justify armed rebellion against the established condition of affairs, I think such conservation of the banking system is the one thing that would justify it."
Strange, isn't it, how these peaceful little chaps-most of them pacifists-are always ready to talk red rebellion. Makes you wonder, if said rebellion ever did come, whether they'd fight or raise wheat to feed the fighters.
All that I said in this connection will be found recorded in Hansard' at page 389.
Some hon. gentlemen may remember a rather remarkable statement made during the election of 1925 by Sir Clifford Sifton. He said:
"We are rapidly approaching that condition in which two or at most three banks will be doing the whole of the business of the Dominion and you will have the spectacle of about three men sitting on the whole of the funds of the people of Canada deposited in the banks and deciding to whom they will loan these funds." And again:
"If anything would justify an armed rebellion against the established condition of affairs I
Royal Architectural Institute

think such a consummation of our banking system is the one thing that would justify it."
An hon. Member: Sedition.
Mr. Woodsworth:	Somebody suggests that
this is sedition. Well, such an utterance might be seditious in the mouths of some of my comrades in the working class, but I suppose it is comparatively safe for Sir Clifford Sifton tg make this statement.
I suggest that the members of this house ought in some way to be protected against misrepresentation of the proceedings of the house and of what is said by those who take part in them.


ROYAL ARCHITECTURAL INSTITUTE
[Stage Direction]
On the orders of the day:
Hon. J. W. EDWARDS (Frontenac-Addington):: May I call attention to an
article appearing in the Ottawa Evening Journal of yesterday?


Some hon. MEMBERS:: Oh, oh.


John Wesley Edwards: I may say
for the information of my hon. friends opposite that this is not a comic journal. The article in question refers to a very important convention which is to be held in this city to-morrow and the next day, namely, that of the Royal Architectural Institute of Canada, with representatives from coast to coast. I see in this article that the only person mentioned as representing the Department of Public Works is a gentleman holding a very minor position. This is an important convention and I should like to know from the Minister of Public Works (Mr. Elliott) whether his department will be represented by its chief architect or, if not by him, at least by some of its senior architects.


Hon. J. C. ELLIOTT (Minister of Public Works):: The department will be properly
represented.


William Lyon Mackenzie King: I may add for the information of my hon. friend that the government as a whole has arranged to receive a deputation from this particular organization. They are to meet the government as a body.


SOLDIERS ' CIVIL RE-ESTBLISHMENT REPORT OF ROYAL COMMISSION
[Stage Direction]
On the orders of the day:
Hon. R. J. MANION (Fort William):: I
desire to ask a question of the Minister of Soldiers' Civil Re-establishment (Mr. King, Kootenay). We have seen a good deal in the press within the last two months about the Hunter commission, which is considering questions relating to the Department of Soldiers' Civil Re-establishment. Would the

minister kindly tell the house when the report of the Hunter commission and the evidence connected therewith will be tabled for the information of members?


Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment):: I will have the report tabled at the next sitting.


Robert James Manion: And the evidence also?


Mr. KING (Kootenay):: If the evidence
is required I will include it.


Robert James Manion: I should like to have the
evidence also as many of us are interested in this question.


RESTIGOUCHE RIVER-SMELT SEASON
[Stage Direction]
On the orders of the day:
Hon. G. B. JONES (Royal):: Mr. Speaker,
I tried to get in touch with the Minister of Marine and Fisheries (Mr. Cardin) before the house opened, but I could not locate him. I desire to bring to his notice that the fishery overseer on the Restigouche river in New Brunswick has notified the fishermen and the buyers that the smelt season will not be extended ; whereas on the other side of the river in the province of Quebec, under exactly similar conditions, the season has been extended. I should like to know the reason for this discrimination.


William Lyon Mackenzie King: The Minister of Marine
and Fisheries is not in his seat at the moment. I will bring the matter to his attention.


ACQUISITION CF ALASKA PANHANDLE
[Stage Direction]
On the orders of the day:
Mr. W. G. McQUARRIE (New Westminster) :: Mr. Speaker, might I be permitted to
ask the Prime Minister if he has received a request from the government of the province of British Columbia to negotiate with the United States for the acquisition by Canada of the panhandle of Alaska; and if so, will he consider the request?
Right Hon. W, L. MACKENZIE KING (Prime Minister):	Mr. Speaker, I am not
aware of such a request having been received. When received we will give it consideration.
On motion of Mr. Mackenzie King, the house proceeded to government orders.


THE BUDGET
Hon. J. A. ROBB (Minister of Finance):: Mr. Speaker, by unanimous consent between

The Budget-Mr. Robh
the leaders of the different parties, which we on this side appreciate very much, I move:
That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Mr. Speaker, seldom have the annual statements from leaders of finance and industry throughout Canada so generally reflected such progress and prosperity as that of the year 1927; and the statement of the nation's business,' which to-day I have the honour to present, will show conclusively that, notwithstanding our annual reductions in the rate of taxation, our revenues have been ample to meet fixed charges, take care of the ever increasing needs of a growing country, and provide also for a reduction of debt.
Public Accounts 1926-27
In the budget speech of February 17, 1927, it was estimated that the net debt would be reduced by some $31,366,000. The public accounts recently tabled show that the net debt was actually reduced by $41,896,729.33, or some $10,500,000 more than estimated. This was due to the practice which has always been followed when estimating revenues and expenditures.
That there should be no uncertainty as to the correctness of the public accounts of this Dominion, I recommended to the treasury board that an independent audit be made of the balance sheet of the public accounts as of March 31, 1924, 1925, 1926 and 1927. The well-known firm of chartered accountants, P. S. Ross & Sons, of Montreal, Toronto and Winnipeg, were engaged and instructed to make a complete audit of the departmental accounts in question, and on the fifth of December last their certificate which is printed on page xiv of the public accounts for the year 1926-27, was received. Their report confirms the accuracy of the public accounts as submitted to parliament and certified that the reduction in the net debt during the period in question was $105,942,498.65.
Fiscal Year 1927-28 Revenue
With the permission of the house may I place on Hansard a comparative summary setting out the actual revenues and expenditures by sendees for 1926-27 and the corresponding estimated revenues and expenditures for the present fiscal year.
Revenues and Expenditures
Revenues Ordinary Revenue	Actual 1926-27	Estimated 1927-28	Increase	DecreaseTaxation Revenue- Customs Import Duties	$141,968,678 48,513,160	$153,600,000 57,000,000	$11,631,322 8,486,840	$War Tax Revenues- Excise Taxes (Sales, Stamps, etc.) Income Tax	
Delayed Business Profits Tax.. Miscellaneous Taxes	105,613,160 47,386,309 710,102 2,457,863	88,000,000 55,300,000 640,000 2,530,000	17,613,160 70,1027,913,691	72,137	Total Revenue from Taxation.	$346,649,272	$357,070,000	$28,103,990	$17,683,262Interest on Investments	
Post Office	8,559,401 29,069,169 3,327,273	10,190,000 31,000,000 3,400,000	1,630,599 1,930,831 72,727	Canada Grain Act	
Miscellaneous	2,582,984 8,507,677	2,600,000 8,320,000	17,016	187,677Total Ordinary Revenue.. ..	$398,695,776	$412,580,000	$31,755,163	$17,870,939Special Receipts	German Reparation Payments- Under Dawes Plan	1,756,704	2.977.000 3.790.000	1,220,296 3,790,000	Miscellaneous	133,000	133,000	Total Revenue	$400,452,480	$419,480,000	$36,898,459 17,870,939	$17,870,939

The Budget-Mr. Robb

Revenues and Expenditures
Revenues
Ordinary Revenue
Interest on Public Debt	
Pensions	"	[
Subsidies to Provinces	
Soldier and General Land Settlement-
Administration	
Soldiers' Civil Re-establishment.. .. " ''
National Revenue	
Post Office	'
National Defence	"
Agriculture	\	'
Public Works-Chargeable to Income..	..
Dominion Lands and Parks	
Trade and Commerce	
Civil Government	
Other Expenditure	'	".
Actual


$129,675,368 37,902,939 12,516,741 1.250,787 6,976,762 10,130,430 31,007,698 13,0S6,051 5,838,941 11,178,054 4.251.662 4,168,047 10.865,757 40.698,936
[Stage Direction]
Estimated
[Stage Direction]
Increase
[Stage Direction]
Decrease $	975,368
156,762
101,662
Total Ordinary Expenditure. $319,548,173 Special Expenditure
Adjustment of War Claims	 64,485
Discount and Expenses of Loan Flotations 3,278'o32 Miscellaneous Charges to Consolidated Fund 1,615,883
Maritime Freight Rates Act-
Estimated Amount Required-
Canadian National Railways.. ..		
Other Railways	
Capital Expenditure
Public Works	
Railways	
Canals	 ' ' '
Loans and Advances Non-Active
Canadian National Railways	
Canadian Government Merchant Marine. .
Quebec Harbour Commission	
Miscellaneous Non-Active Accounts	
2,920,670
2,792,343
13,845,689
10,000,000
426,817
680,000
462,596
[Stage Direction]
$355,634,688	$364,665,000 $24,134,304 $15,103,992
15,103,992
Surplus of Revenue over Expenditure $ 44,817,792 Assets written off as Non-Active-
Soldier Land Settlement Loans.. ..	2,921,063
Seed Grain and Relief-Advances.. .		
(Department of the Interior)
[Stage Direction]
Net Decrease of Debt	$ 41,896,729	$ 38,815,000
From this summary it will be seen that we estimate our ordinary revenues for the present fiscal year as $412,580,000, which, with special receipts of $6,900,000, (including $6,767,000 from reparation payments, of which $3,790,000 is in the nature of a delayed settlement) will give a total revenue for the year of about $419,480,000, an increase- of $19,000,000 odd over the revenues for the year 1926-27.
We expect to receive from customs duties $153,600,000, an increase of $11,600,000 over the previous year; excise duties $57,000,000, an increase of $8,400,000; income tax $55,300,000, an increase of $7,900,000; interest on investments $10,190,000, an increase of

$1,630,000; post office $31,000,000, an increase of $1,930,000; Dominion lands and certain other sources of revenue $8,530,000, an increase of $161,000.
The revenue services which will show decreases are,-excise taxes (sales, stamps, etc.) $88,000,000, a decrease of $17,600,000 under the previous year; delayed business profits tax $640,000, a decrease of $70,000; miscellaneous services $8,320,000, a decrease of $180,000. .
Expenditures
The estimated expenditures for the year are:	ordinary expenditures, $333,730,000;

The Budget-Mr. Robb
capital expenditures, $21,405,000; special expenditures, $7,115,000, including $3,843,000 to the Canadian National and other rail-ways on account of the Maritime Freight Rates Act of 1927. In addition there are loans in cash to the Canadian Government Merchant Marine of $1,000,000 and to the Quebec Harbour commission of $1,415,000. As these loans are carried in our accounts as nonactive assets, the amounts are included as expenditures for the year. The total expenditures will therefore fee $364,665,000, being an increase of $9,030,000 over expenditures for the previous year.
Mr. Speaker, with the consent of the house may I also place on Hansard:
First: Statement of our estimated ordinary revenues, by services, together with the percentage of such services to the total of the ordinary revenues as estimated.
Second: Statement of the estimated expenditures, by services, for the present fiscal year, showing the various amounts and their percentages to the total expenditures.
Estimated Ordinary Revenues
For the Fiscal Year, 1927-28		CD bp c3 - <d
		ti 3
Special War Tax Revenue	Amount	a>
O 55
Excise Taxes (Sales,	<U ^ cl ^ a	
Stamps, etc.)	$ 88,000,000	21.33Income Tax	55,300,000	13.40Delayed Business Pro-	fits Tax	640.000	.16Miscellaneous Taxes..	2,530,000	.61Total Special War	Tax Revenue.. ..	$146,470,000	35.50Customs Import Duties..	153,600,000	37.23Excise Duties	57,000,000	13.82Total Revenue from	Taxation	$357,070,000	86.55Interest on Investments	10,190,000	2.47Post Office	31,000,000	7.51Dominion Lands	3,400,000	.82Canada Grain Act.. ..	2,600,000	.63Miscellaneous Receipts..	8,320,000	2.02$412,580,000	100.00
Estimated Expenditure for
Principal Expenditure attributable to the Great War
Interest on Public Debt (Increase over 1914)
War Pensions	
Soldiers' Civil Re-establishment	
Soldiers Land Settlement Administration.. ..
Imperial War Graves Commission	
Battlefield Memorials	
Adjustment of War Claims	
Other Fixed and Public Debt Charges
Interest on Public Debt (as of 1914)	
Other Pensions	
Superannuation	
Subsidies to Provinces	
Discount and Expenses of Loan Flotations Premium Discount and Exchange	
General Expenditure
Charges of Management	
Civil Government	
Administration of Justice	
Legislation	
Penitentiaries	
the Fiscal Year 1927-28
Percentage of total
Amount Expenditure
$ 115,807,000	31.76
38,140,000	10.46
6,820,000	1.87
1,300,000	.36
574.000	.16
200,000	.05
1,660,000	.45
$ 164,501,000	45.11
$	12,893,000	3.54
	1,240,000	.34
	1,500,000	.41
	12,516,000 12,000 10,000	3.43
$	28,171,000	7.72
$ 910.000	.25
11.800,000	3.24
2,166,000	.60
2,430,000	.67
1,760,000	.48
The Budget-Mr. Robb
[Stage Direction]
Estimated Expenditure for the Fiscal Year 1927-28-Con.
General Expenditure-Con.
Agriculture	
Immigration and Colonization	
Health	
National Defence	
Royal Canadian Mounted Police	
Public Works-Chargeable to Income..	..
Railways and Canals Chargeable to Income
Canada Highways Act	
Mail Subsidies	
Ocean and River	
Lighthouse and Coast	
Steamboat Inspection	
Fisheries	
Mines & Geological Survey	
Scientific Institutions	*	
Indians	
Government of the Northwest Territories.. ..
Government of the Yukon Territory	
Special grant to Maritime Provinces	
Miscellaneous	
National Revenue (Outside Service)	
Post Office (Outside Service)	
Public Works Collection of Revenue	
Railways and Canals Collection of Revenue..
Dominion Lands and Parks	
Trade and Commerce	
Labour	
Public Printing and Stationery	
Miscellaneous Consolidated Fund Charges.. Capital Expenditure-
Public Works including Marine Department
Railways	
Canals	
Total Estimated Expenditure on Government Services . Other Expenditures .
Maritime Freight Rates Act-Estimated Amount required-
Canadian National Railways	
Other Railways	
Home Bank Depositors Relief Act	
Loans to Quebec Harbour Commission	
Loans to Canadian Government Merchant Marine	
Grand Total	
Amount
6.490.000
2.900.000
780.000
15.950.000
2.360.000
15.500.000
1.369.000 l 066,000
867.000
3.600.000
2.900.000
130.000
1.600.000
600.000 1,010,000
4.076.000
415.000
180.000
1.600.000
2.726.000
11.700.000
32.250.000 1,000,000
2.550.000
4.150.000
4.200.000 1,400 000
295,000
1.400.000
3.485.000
4.200.000
13.720.000
1165,535,000

[Stage Direction]
Percentage of total Expenditure 1.78 .79 .21 4.37 .65 4.25 .38 .29 .24 .99 .80 .04 .44 .16 .28 1.12 ' .11 .05 .44 .75 3.21 8.84 .27 .70
1.14
1.15 .38 .08 .38
.96
1.15 3.76
45.40
98.23
.93
.12
.06
.39
.27
Surplus $54,815,000
In the statements just tabled it is estimated that ordinary revenue will amount to $412,580,000 which, together with special receipts of $6,900,000, gives a total estimated revenue of $419,480,000. After deducting from this the estimated total expenditures of $364,-

665,000	there will be a surplus of revenues over all expenditures of $54,815,000.
Net Debt Reduced $38,815,000 After provision has been made to the extent of $16,000,000 for the writing down of certain soldier land settlement loans and other assets, the reduction in the net debt will be

S38 815,000. Thus, during the five-year period ending 31st March, 1928, after providing for writing down certain assets, we will have succeeded in reducing our net debt by $144,700.000. „ , , Chapter 68 of the statutes of 1927 amended the Soldier Land Settlement Act of 1919, and provided for the revaluation of loans to settlers for the purchase of lands. The soldier settlement board advise the Department of Finance that the total amount likely to be written off through this revaluation will be about $8,000,000. We propose reducing our assets as shown in the public accounts at the close of the present year by this sum of- $8,000,000. The soldier settlement board also advise that there will be a further loss on the re-sale of stock and equipment, as well as on farms which have reverted to the board. Certain of these farms have been resold, but some 3,000 properties remain to be disposed of. In the opinion of the board a loss will eventually be sustained in connection with the assets referred to of approximately $6,000,000 which sum the government proposes to write off as a non-active asset.
It has also been deemed advisable to reduce by some $2,000,000 active assets now carried as seed grain and relief advances, transferring this amount to non-active assets. These accounts have been running for many years and a certain number are now considered of doubtful value.
Outstanding Public Debt. Representations have been made in this house and elsewhere that, through a sinking fund properly invested, provision should be made for retirement of our total debt within a limited number of years. I do not intend to go into the merits of this proposal beyond remarking that there are opinions both for and against the adoption of a fixed plan. In the final analysis it must be recognized that a net surplus of revenues over all expenditures is the only effectual sinking fund for debt retirement. In 1845 an eminent British economist, McCulloch, dealing with the question of sinking funds and taxation, declared:
The greater productiveness of industry and the greater well_being of the community are the real sinking funds which a wise government should exert itself to build up and encourage.
In recent years we Canadians have succeeded in reducing annually both debt and taxation; each reduction of interest bearing debt has enabled us to reduce taxation further, and while welcoming any workable plan that will ensure the retirement of our national debt, I submit that until Canada is nearer
The Budget-Mr. Robb
the pre-war rate of taxation, annual reduction of taxes is as important as reduction of debt. Our policy is to reduce both.
Retirement of Maturing Loans
Mr. Speaker, total maturities for the current fiscal year, amounting to $100,505,650, were provided for as follows:
On the 1st and 15th November, 1927, the 5^ per cent renewal loan of 1922 amounting to $29,068,400, and the 3-year 4 per cent notes amounting to $8,000,000 matured and were redeemed in cash.	_
On the 1st December, 1927, a portion of the 54 per cent 1917 victory loan, tax-free, amounting to $63,437,250 matured. We were able to redeem $18,437,250 in cash. To meet the balance we issued 4 per cent 3-year treasury notes to the amount of $45,000,000 which we sold direct to the chartered banks of Canada at par. All of the chartered banks subscribed to this issue. The sale of these treasury notes marks the first financing since 1912 which the Dominion government has effected at a net cost as low as 4 per cent.
The saving in interest resulting from these transactions will be $3,607,000 annually. An additional advantage will accrue from a further reduction in the amount of outstanding tax-free bonds, as the December 1st maturity of $63,437,250 carried exemption from taxation.
Guaranteed Securities
Canadian National Railways
Financial requirements of the Canadian National Railways were met by an issue of $65,000,000 44 per cent 30-year bonds dated July 1. 1927, guaranteed by the Dominion of Canada.
This issue was made to provide for the following authorized commitments of the railway company:
$20,000,000-for the refunding of a like amount of 4 per cent Dominion guaranteed 3-year notes which matured July 1st, 1927, as authorized by the Canadian National Refunding Act 1927 (chap. 27).
$15,000,000-for the funding of a temporary loan obtained by the company to finance capital expenditures and miscellaneous maturing obligations as provided for in the railway appropriations for the previous year, 1926-27. The vote for the year was $31,000,000; $10,000,000 was advanced by the government as reported in the budget speech of last year and $15,000,000 was borrowed temporarily as authorized by vote 372, Appropriation Act, 1926-27, which vote also authorized the issue and guarantee of securities to take up the temporary loan.
[Stage Direction]
The Budget-Mr. Robb
$16,600,000-to provide for expenditures authorized in the railway appropriation for 1927-28 for general additions and betterments and miscellaneous maturing obligations as provided for by vote 408, Appropriation Act, 1926-27-"Loans to Canadian National Railway Company."
$4,000,000-for capital expenditures in connection with the Toronto viaduct scheme as authorized by the legislation of 1924 and 1925.
$9,400,000-on account of construction of various branch lines as authorized by the special acts passed in 1924, 1925 and 1927. Montreal Harbour Commissioners During the year, the government guaranteed a demand obligation of the Montreal harbour commissioners for $4,000,000 in connection with the financing of the South Shore bridge, as authorized by Chap. 58 of the Statutes of 1924. This, together with a guarantee for a similar amount, previously given, brings the total of guaranteed obligations issued in connection with this project to $8,000,000.
Canadian National (West Indies) Steamships Ltd.
Parliament last year authorized the government to guarantee securities of the Canadian National (West Indies) Steamships Limited to provide for the construction of steamships for the West Indies service. A guarantee to the amount of $8,000,000 has been executed but actual borrowing will take place only to meet cash requirements as construction proceeds. The company has arranged for bank advances as collateral for which the guaranteed securities are to be pledged.
The international trade of Canada is well maintained. Our fiscal year does not end for some weeks but the records for the nine months ended December 31, indicate a substantial favourable balance. This is particularly note-worthy at a time when industrial expansion and undertakings of various natures create a demand for machinery, construction material and other necessary articles not procurable in Canada. Imports of necessary supplies of raw materials for further manufacture are also on a larger scale. As we look back to the years when railways were being extended across the Dominion and western Canada was being settled, it will be recalled that there were annual unfavourable balances of trade, the adverse balance in the calendar year 1913 being $222,000,000, one of the highest in our history.
The League of Nations in 1927 made an interesting comparison of the international trade of the world and for this purpose took the calendar years 1913 and 1926. It was 
found that in 1913 only three nations had favourable trade balances. In that year the United States had a favourable trade balance of $7.13 per capita, Argentine $6.78 per capita, and British India 60 cents per capita. Thirteen years later there were six countries with favourable balances of trade, and Canada, which in 1913 had an unfavourable balance of $29.61 per capita, in 1926 led the world with a favourable balance of $29.34 per head of population. The countries so listed are:
Country Canada .. .. United States Brazil .. . . British India South Africa France .. ..
Favourable Balance per Capita .. $29 34 ..	3 22 '
1 97
.. 1 01 .	14
.	02
In the first nine months of the present fiscal year, viz., from April 1 to December 31, our total imports were $823,054,094; while the total exports amounted to $970,154,998, giving a favourable trade balance of $147,100,904. A comparative statement of our total trade for the same periods in the past two years follows:
Free .. Dutiable . Electricity
Imports
April 1st to December 31st 1926	1927
.. $277,186,180 $297,055,594 .	489,576,862	525,932,873*	66,508	65,627
Total .. . $766,829,550 $823,054,094 Exports
April 1st to December 31st n ,.	,	1926	1927
Domestic produce $983,924,100 $950,103 367
£°r"S"	
11,361,988	16,391,583Electricity ..	.	3,452,786	3,660 048
Total .. . $998,738,874 $970,154,998 Both the decrease in exports, $28,000,000, and the increase in imports, $56,000,000, can be attributed principally to greater domestic demand under conditions of prosperity such as we have been enjoying. But it is also apparent that our ability to produce still exceeds our capacity to consume by a broad margin and that our exporters annually market over a billion dollars worth of goods in other lands.
Trade With Treaty Countries
Favoured nation treatment is of importance alike to basic producers and to manufacturers of finished products. Our prolonged winters tend to restrict employment in some industries while others have only a short marketing season in Canada. Consequently, to maintain a high state of efficiency, ex-

The Budget-Mr. Robb
port markets are to many industries, as well as to basic producers, of almost primary importance. Canada now enjoys favourable trade relations with many foreign countries to whom we sold $157,000,000 of goods in the fiscal year 1927, purchasing in return $78,000,000. '
Empire Trade
Our trade records show that in the fiscal year 1927 we sold to the empire goods to the value of $542,000,000 and purchased in return $214,000,000, collecting in duties from these imports $36,598,000. Sometimes comparisons are made to arrive at the average rates of duties assessed under various columns, so it may be pointed out in passing that nearly 35 per cent of the total duties collected on empire imports was paid on $25,711,000 of alcoholic beverages. If we except the United Kingdom from the calculations it will be noted that in the fiscal year 1927 Canada purchased from other British countries goods to the value of about $50,000,000. On these imports $4,267,000 were collected in customs, over 54 per cent of the total being paid as duties on sugar and spirits, thus showing in a broad way that the major portion of our imports from the British dominions and possessions consists of non-competitive and raw products. As practically all of our $94,000,000 of exports to those British dominions and possessions are fully manufactured, the value of working for closer trade relations within the empire is surely apparent.
Reductions in Taxes
Provision having been made for expected expenditures in the coming fiscal year and heed taken to maturing obligations, it is with pleasure and satisfaction that once again we are in a position to propose further reductions in taxation. As an added encouragement to business, as a measure of relief to taxpayers and to those provinces where local income taxes are levied, it is proposed that the Dominion shall continue gradually to lighten the load in the income tax field. Last year a reduction of ten per cent in all 'ates of the income tax was announced. To-day we are able to go a step further and to propose that the income tax payable by individuals be reduced an additional ten per cent. The list of exemptions is to be increased by allowing an exemption of $500 to those supporting dependents over twenty-one years of age who are incapable of self-support on account of mental or physical infirmity. In the case of corporations and joint stock companies, it is proposed that the tax be eight per cent net.
A general reduction of twenty-five per cent will be made in the sales tax.
The Customs Tariff
We come now to the customs tariff. The Advisory Board on Tariff and Taxation has concluded its hearings in respect of the textile group, excepting silk and artificial silk, and in the proposed revision there will be shown a general reduction in rates.
Cottons
Considering first the items comprising the cotton schedule, it is proposed that the maximum under the general tariff be reduced from 374 per cent to 30 per cent with a single exception.
On a large range of household cottons, and also on cotton socks and stockings, cotton underwear and cotton clothing, the rates will be materially reduced.
Coupled with the general lowering of rates on the finished products is a lowering of rates on yams and other materials used by the manufacturers for further processes. In the proposed changes the needs of the Canadian consumer and manufacturer have been carefully considered, while incidentally the scope of the British preference has been materially widened.
Woollens
In revising the woollen schedules two main considerations have been kept in mind, the vital necessity for warm clothing in a climate such as ours, and the position of the Canadian mills which weave woollen and worsted cloths. It is proposed to aid the Canadian weaving industry by granting free yarns for weaving purposes. The importations of woollen and worsted yarns are large, and the concession proposed should be of material assistance to the industry.
The drawback of duty on dry spun yams will be abolished on October 1, 1928.
Material decreases in duty will be made in the preferential rate on woollen goodg imported in the gray for dyeing and finishing in Canada.
There will be a reduction in the duty on all mitts and on all but the more expensive lines of woollen underwear, socks and stockings. A reduction is also proposed on certain woollen fabrics.
Linen, Flax and Jute Products The classification of linens and of flax and jute products will be separated from that of cottons. The linen schedules now proposed will conform in structure to those relating to cottons and wollens.
In respect to the finer grades of linens, which are not produced in Canada, there will be reductions in the British preferential rates.
The Budget-Mr. Robb
[Stage Direction]
Silk and Artificial Silk
Practically no changes in rates are made in the silk or artificial silk items, as hearings on these groups have not been completed; but the wording of the schedules has been revised to conform to that of the cotton, woollen and linen schedules.
Textile Machinery
As a further assistance to the textile industry, the duty on machinery incidental to the working-up of fibrous materials will be adjusted. This machinery is now entered under items 467 and 468. The Department of National Revenue find difficulty in administering these items, as one overlaps the other. It is considered advisable to merge the two items into one. The new item may result in an increase in the duty on a small portion of the imports if such imports enter under the general tariff, but the reduction under the British preferential and the intermediate tariffs will more than offset that increase. On a small part of the machinery imported under the first item there will be no change, but on a large part of the importations a reduction is proposed from ten per cent to free under the British preferential tariff and from ten per cent to five per cent under the intermediate tariff.
Other Tariff Changes
The duty on machinery for mining and concentration of ores will be reduced. This reduction applies to locomotives for underground haulage in mining, to mine hoists of a class or kind not made in Canada, and to parts of certain mining machinery. It is proposed to make the duty on press blankets of a class or kind not made in Canada free under the British preferential tariff, five per cent under the intermediate tariff, and ten per cent under the general tariff. At present the imports of these blankets come in under the general tariff, the rates ranging from twenty to thirty-five per cent under different items.
It is proposed to reduce certain paper mill wrappings from fifteen to five per cent, British preferential tariff, and from twenty-five to ten per cent under the general tariff.
Flake calcium chloride, for road-treating purposes only, is placed on the free list.
It is proposed to make free under all tariffs non-alcoholic preparations or chemicals for disinfecting, dipping or spraying.
Crude petroleum, not in its natural state, imported for refining purposes, is made free under all tariffs until July 1, 1931.
The tariff rate on engines for fishing boats is now fifteen per cent under the general tariff. It is proposed that the parts therefor shall enter at the same rate. This is a reduction of twelve and a half per cent.
The present rates covering engines, and complete parts, for equipment of aircraft, are to be extended until July 1, 1930.
It is proposed to place on the free list under all tariffs nickel chromium, in bars or rods, of a class or kind not made in Canada, for use in the manufacture of electric resistance wire.
Drawbacks
Assistance is given the publishing industry by granting a drawback of 80 per cent on certain papers used in the production of magazines.
A drawback of 99 per cent is granted on bituminous coal used in melting or evaporating salt produced in Canada.
A drawback of 60 per cent is to be allowed on materials used in the manufacture of various tools when at least fifty per cent of the production cost has been incurred in Canada.
A drawback of 50 per cent is given on materials used in the manufacture of engines for the equipment of aircraft. After July 1, 1930, no drawback shall be paid unless at least 40 per cent of the cost of producing the finished engine has been incurred in Canada.
The Department of National Revenue has difficulty in administering the present tariff item 531 covering cloth for bookbinding. This item is repealed; a drawback of 99 per cent is granted instead. This will give the bookbinders practically the same concession.
The following statement classifies the proposed changes according to the industries affected:-
[Mr. Robb.l

The Budget-Mr. Robb
	Preferential Tariff		General Tariff	
	Old Rate	Proposed Rate	Old Rate	Proposed Rate
Mining Industry Xanthates and cresylic acid for concentrating ores and				
minerals	15 p.c.	Free	17j p.c.	FreeLocomotives and motor cars for underground haulage..	221 P-c.	10 p.c.	35 p.c.	20 p.c.Mining hoists of a class or kind not made in Canada	15 p.c.	10 p.c.	27§ P-c.	20 p.c.Machinery for concentration of ores and minerals	
Printing and Publishing Industry	15 p.c.	10 p.c.	27j p.c.	20 p.c.Press blankets	
Drawback on paper used in the production of magazines.. Fruit and Horticultural Industries Small onion plants for transplanting or propagation pur-	22\ p.c. 80 p.c.	Free	35 p.c.	10 p.c.poses	
Preparations or chemicals for disinfecting, dipping or	15 p.c.	Free	17£ p.c.	Freespraying	
Fishing	10 p.c.	Free	20 p.c.	FreeAluminium floats of a class or kind not made in Canada..	15 p.c.	Free	Parts of engines for fishermen's boats	
Road-Making	15 p.c.	10 p.c.	27J p.c.	15 p.c.Flake calcium chloride for road-treating. Per 100 pounds Aviation Hngines and complete parts thereof for the equipment of aircraft-Present rates continued until July 1, 1930.	10 cents	Free	15 cents	Free
A drawback of 50 p.c. will be allowed on materials usedin the manufacture of aircraft engines. After July 1, 1930, no drawback will be paid unless at least 40 p.c. of the cost of production has been incurred in Canada.
Mechanics Tools
A drawback of 60 p.c. will be allowed on materials used in the manufacture of certain tools, when at least [DOT]50 p.c. of the cost of producing the finished article has been incurred in Canada.
Salt Industry
A drawback of 99 p.c. will be allowed on coal used in producing salt.
It is estimated that the reduction in taxation will be $19,000,000.
In order to foster empire trade there is a general tendency in the Dominions and the mother country to increase the percentage of cost of production requirements on goods receiving the benefit of the British preferential tariff. At present Canada requires 25 per cent to be empire labour and materials. It is proposed to double this percentage. There will be similar increases in the percentages required on goods entering under treaty rates and the intermediate tariff.
In summing up the statement presented today little need be said, because, sir, the figures, speaking for themselves, require no words to emphasize the sound position of the Dominion's balance sheet. A general tone of optimism exists throughout Canada. Nevertheless, may I be permitted a word of iriendly caution as to the future.
To-day we are widening the inhabited frontiers, penetrating and developing our great northern domains. Federal and provincial governments, transportation companies, commercial corporations and individuals share in the work. It is a national undertaking of importance, for it not only develops Canada in a material way, but in addition, gives a better balance to our geographical groupings of population. Should we not profit by experiences of the past and keep this expansion within proper economic bounds, so that at no time will undue strain be placed either on the resources of the governments or of the investors.
In May, 1922, the first post-war budget presented by the government of the Right Hon. Mackenzie King was submitted to this house. Business was then passing through a period of depression, and a deficit of $81,000,000 was announced. With a view to balanc-
[Stage Direction]


The Budget-Mr. Robb
ing the budget, expenditures were reduced, taxation re-adjusted and measures of relief to basic industries enacted. Thus by policies beneficial to all parts of Canada, national development both in industry and population, has been encouraged. Canadians are returning home-
Some hon. MEMBERS:: Oh, oh.


James Alexander Robb: Does anyone challenge my
statement that Canadians are returning home?


An hon. MEMBER:: Everybody.


James Alexander Robb: The Budget-Mr. Robb
Tariff Item	Goods	When Subject to Drawback	Portion of Duty (Not including Special Duty or Dumping Duty) Payable as Drawback1001	Woven fabric manufactured for covering the outside of books, of a class or kind not made in Canada.	cles on various subjects, current topics, political and other news or reviews, criticism or other informative matter, or fiction, being bound, wire stitched or otherwise fastened together	
When imported by bookbinders for use exclusively in binding books	80 p.c. 99 p.c.1062	bit braces, marking gauges of metal or wood, levels of metal or wood, planes or hand tool scrapers of metal or wood, spoke shaves, try squares and bevels with metal or wood handles: Provided that no drawback shall be paid under this item unless at least fifty per cent of the cost of producing the finished article has been incurred in Canada; And provided further that no drawback under this item shall be payable more than	60 p.c.1063	engines for use only in the equipment of aircraft: Provided that on and after July 1,1930, no drawback shall be paid under this item unless at least forty per cent of the cost of producing the finished engine has been	50 p.c.1064	Seamless iron or steel tubing over four	natural gas under high pressure from the gas wells to point of dis-	50 p.c.1065	Wlien used in meking or evaporating salt produced in Canada: Provided that no drawback under this item shall be payable on coal used in producing salt or brine when such salt or biine is further manufactured than salt enumerated in tariff items 40, 41, 42, and 42a	99 p.c.
3.	Resolved, That any enactment founded on the foregoing resolutions shall be deemed to have come into force on the seventeenth day of February, one thousand nine hundred and twenty-eight, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date and to have applied to goods previously imported for which no entry for consumption was made before that day.
Resolved, That it is expedient to amend The Income War Tax Act, and to provide:
1.	That the schedule of rates of Income Tax pertaining to individuals be reduced for the year 1927 and thereafter by twenty per centum.
2.	That the Income Tax of companies for the year 1927 and thereafter be eight per centum.
3.	That allowance for exhaustion of mining lands, oil and gas wells and timber limits be afforded to and apportioned between lessee and lessor.
4.	That the income from the operation of ships owned or operated by a non-resident person or corporation be exempt from taxation, provided that the country of residence grants an equivalent exemption in favour of a person or corporation resident in Canada.
5.	That $500.00 exemption be given persons supporting dependents twenty-one years of age and over, incapable of self-support on account of mental or physical infirmity.
6.	That upon election by the trustee controlling a superannuation pension fund or plan to have the investment income exempt from taxation the contributions by employees shall not be exempt.
7.	That provision be made for procuring information as to payments made from the source of payment.
Resolved, That it is expedient to introduce a measure to amend the Special War Revenue

Grading of Wheat-Mr. Campbell
Act, chapter 179 of the Revised Statutes of Canada, 1927, and to provide:
1 That section eighty of the said Act which imposes an excise tax on automobiles adaptable for passenger use be amended by adding thereto the following subsection:
"4. When goods of any class mentioned in schedule I are manufactured c-r produced in Canada and are for use by the manufacturer or producer thereof and not for sale, such goods shall, for the purposes of this part, be deemed to have been manufactured or produced in Canada and sold, and the sale shall be deemed to have taken place when the goods are used or appropriated for use. The Minister may determine the value of the said goods for the tax.'"
2. That the rate of consumption or sales tax be reduced to 3 per cent and that any enactment which may be founded on this resolution No. 2, shall be deemed to have come into force on the seventeenth day of February, 1928, and to have applied to goods imported or taken out of warehouse for consumption on or after that date and to have applied to goods previously imported for which no entry for consumption was made before that date.
Resolved, That it is expedient to introduce a measure to amend The Copper Bounties Act, 1923. and to provide that the payment of bounties at the rate of one-half of one cent per pound on copper bars or rods, as described in the said Act, be continued up to the thirtieth day of June, 1931.
1.	Resolved, That it is expedient to amend schedule A to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927.
2.	Resolved. That schedule B to The Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, be amended.
3.	Resolved, That any enactment founded on the foregoing resolutions shall be deemed to have come into force on the seventeenth day of February, 1928.
4.	Resolved. That it is expedient to amend The Income War Tax Act.
5.	Resolved, That it is expedient to introduce a measure to amend the Special War Revenue Act. chapter 179 of the Revised Statutes of Canada, 1927.
9- Resolved. That it is expedient to introduce a measure to amend The Copper Bounties Act, 1923.
On motion of Mr. Cahan the debate was adjourned.
On motion of Mr. Mackenzie King, the house proceeded to the consideration of public bills and orders.


GRADING OF WHEAT
[Stage Direction]
The house resumed from Wednesday, February 15, consideration of the motion of Mr. Millar:
That, in the opinion of this house the statutory definitions applying to all contract grades of wheat in the western inspection division, should be amended in such a manner as to provide for including protein as a factor.
Mr. M. N. CAMPBELL (Mackenzie):: When the house rose at six o'clock last night I was endeavouring to explain why, in my opinion, the resolution, in so far as creating a statutory grade for the protein contents of grain, is difficult of application. I realize that there are a great many difficulties in the way of putting this into effect at the present time, but I am very much in favour of further research work in connection with it. I suggested to the minister-and may I emphasize it again-the necessity for increasing the facilities at the bureau at Winnipeg and giving Dr. Birchard all the help that he requires to carry out this work. I believe if that bureau is properly equipped and manned it will be a great help to the farmers of the prairies. A farmer who considers that he has grain of a high protein content and high protein quality can send his sample to this bureau and receive a test, and find out just what its value is before he ships it from his farm. It seems to me that would simplify matters very considerably, and I would again request the minister to agree to have this resolution sent to the committee on agriculture and colonization. I believe that, if it . is referred to that committee and those who are interested are given an opportunity to present their views, we will get some information that will put this house in a better position than at present to determine just in what way to proceed. If the grain dealers, representatives of the pool, the millers and the farmer's organizations can come and present their views, I believe that committee will be in a position to make some concrete and constructive proposals to this house as to how the matter should be further dealt with.


Mr. J. G. ROSS (Moose Jaw):: 
Mr. GARLAND (Bow River):: Will my
hon. friend permit a question?


John Gordon Ross: Certainly.


Edward Joseph Garland: I wonder
if he can produce any substantiation of the statement that no grain is dried until after the close of navigation, for if so he will be performing a wonderful service to our country.


John Gordon Ross: I shall be only
too glad to ask the Minister of Trade and Commerce (Mr. Malcolm) to make a return of the number of cars of grain actually dried. I think such a return will clear the matter up, because in talking to the elevator men I have been' informed that up to the close of navigation there is no drying of grain, and that in a great many of the private terminal elevators the driers are practically never used, being put there simply as a bluff.
Now, in regard to moisture content in grain, it has been found by experiment that wheat which is slightly bleached is not
damaged in any particular for milling into flour. Wheat that is heavily bleached is changed, but it is not damaged to anything like the extent that our grading system penalizes it to-day. For instance, there are times when the crop is of high quality as a whole, but there is some heavily bleached or sprouted wheat. At those times it has been the practice of the millers in this country, and also in fhe United States, to buy those heavily bleached and sprouted wheats at a premium in order to blend them with a high protein, high viscosity wheat so as to mill out a flour which will make a better baking flour, without using other commercial improvements. These wheats, under our present system, are placed in the No. 4 wheat for grade. That is they are put in with wheat containing a large percentage of green kernel or heavily frosted wheat, and heavily frosted wheat or wheat containing a large number of green kernels is a very poor milling wheat. This sprouted wheat which is a good milling wheat and the heavily bleached wheat should be kept separate altogether from the No. 4 so that it can be used for the purposes that I spoke of.
Let me say a word with regard to the buyers of our wheat in the world market. The miller of grain in Liverpool, or the European miller, is in this position in buying wheat:	He has to mill to the same standard
at all times, and must keep to that standard constantly, otherwise he will lose his customers. Therefore when the different wheats from different parts of the world start to come to Europe, he analyses those wheats and finds out how much wheat of different kinds he needs in order to mill to the standard he has maintained for years. In one year he will need a Canadian grain of high protein and high viscosity to a much greater extent than in another year. If the wheat of the world is low in protein and low in baking strength, that year he will need Canadian grain to a greater extent than another. He is willing to pay a premium for it, and would be only too willing to have our grain grade based upon the strength and the amount of protein that is in our wheat. The Canadian miller of grain is in a different position. He buys his grain in a country where we have ordinarily a large amount of high protein and high viscosity or high baking-strength wheat. Nevertheless this year the Canadian millers are buying thousands of cars of wheat, on the ordinary grade in the market, and in some cases are turning back into the trade as much as two-thirds of the cars that they have bought after
528	COMMON'S
Grading of Wheat-Mr. Ross (Moose Jaw)
having tested them in their laboratories. The protein of the Canadian crop this year is a bit lower than usual. In other words the Canadian miller this year is picking from the run of our crop the high protein wheat, and is turning back the lower protein wheats into the export channel. Or to put it another way, the poorer part of the Canadian wheat crop is going to the world's markets to set the price for the whole wheat crop of Canada.
In the United States the miller is in a different position still. In that country the greater part of the crop is of soft wheat, low protein, low baking-strength wheat. He is in a restricted market, and he is much more ready to bid high prices for high protein than anyone else, because he has to get that high protein to blend with his soft wheats in order to bring up the baking strength of his flour. Therefore, the examples that have been given in this house regarding the prices that will be paid for protein in the United States do not hold good as to Canadian grain or grain going to the world's markets, because the demands in the world's markets are not as great as they are in the restricted markets in the United States, or do not exist to such a great extent. In the Canadian market there is a very limited demand for high protein because our average crop is high protein content. In some years there is a demand in Canada for low protein wheat or soft wheat, bleached or sprouted wheat, to blend with the high protein wheat.
Now in regard to mixing. Our present Grain Act allows the buyers of grain in this country to mix grades. If you buy No. 3 northern grain there is a wide spread in that grade. A good No. 3 is just too poor to be a No. 2; a poor No. 3 is just too good to be a No. 4; a good No. 4 wheat is just too poor to be a No. 3; and a poor No. 4 is just too good to be a No. 5. Now the buyer of grain in this country to-day can buy a good car of No. 3 northern and a good car of No. 4 wheat, can mix the two together, and come out under our grade system with two cars of No. 3 northern at an advance this year of 12 to 13 cents per bushel. As a matter of fact there have been cars of grain this year of No. 3 northern straight grade, and the specially good No. 5 wheat could have been mixed and graded to make a straight 3 northern. I do not say that without assurance for this reason: this very crop year I picked from cars that were going through a specially good sample of 5 wheat, and I took an average sample of No. 3 northern, and mixed the two together in the proportion of fifty-fifty. I put the re-
suit of that mixing in front of an inspector under the board of grain commissioners, paid by the Dominion government, and it was graded by him as No. 3 northern wheat. However, I was not satisfied with that. I took it to another inspector, and had him grade it, and he got the same result. There was a difference in that case of 26 cents per bushel on the one carload of grain. A grading system that will allow things of this kind most assuredly should be changed. Such a thing as that is entirely wrong, and the people of western Canada who are growing grain today are losing millions of dollars as a result of our grading system.


Edward Joseph Garland: The hon.
gentleman is opposed to mixing?


John Gordon Ross: Absolutely.


Edward Joseph Garland: I wonder if the hon. gentleman would tell the house why a resolution with respect to mixing was withdrawn from the order paper by one of his colleagues.


John Gordon Ross: I am sure I cannot tell the hon. gentleman; I know nothing about it. I did not even know the resolution was withdrawn.
Now, Mr. Speaker, I would ask that this resolution be sent to the agriculture committee, or to the council on scientific research,
; to have these matters looked into and see if we cannot get in Canada a grain grading system scientifically based upon the milling and baking values in our grain. I would suggest that when that is done the matter should not be left wholly to university professors in different parts of the country, some of whom I believe are to constitute part of the membership of this board. I think the Department of Trade and Commerce should see that the proper amount of money, under the vote for research, is given to the laboratory at Winnipeg where they have been investigating matters and have advanced quite a distance in this work. I would also suggest to the Minister of Trade and Commerce that he call into conference with him the board of grain commissioners and tell them that we in this house are vitally interested in this being done and that they should facilitate in every way possible the elucidation of these matters. At the present time I do not wish to say much about the board of grain commissioners.


Edward Joseph Garland: Why not?


John Gordon Ross: I may do so at
a future time, but I will say this, that I think they could be a little more sympathetic

Grading of Wheat-Mr. Gershaw
to the producers of grain in this country than they have been in the past and not quite so sympathetic to the organized grain trade of western Canada. This is one of the most important resolutions before this house this year. If it is carried out, it means millions of dollars a year put back into the pockets of our people to buy Canadian goods, because to-day the producer of grain under the Canadian grading system is not getting a proper return for his grain.


Mr. F. W. GERSHAW (Medicine Hat):: Mr. Speaker, the hon. member for Qu'Appelle (Mr. Millar), in bringing forward this resolution has done a very good service for the people of Canada. At the present time many people throughout the western part of this country are vitally interested in the grading of wheat. The selling of the wheat crop is often the one great venture of the year for the wheat farmer and during the present year there has been widespread dissatisfaction over the grades which are being given. It seems that the board of standards issues certain instructions each year, but often their instructions do not apply to all parts of the country. Their instructions may deal largely with rust conditions and things of that kind, and in certain parts of Canada the inspectors are given very little guidance and have only their own judgment to rely upon in grading the grain, a matter which is so vital to the producers. The present method, of course, is an arbitrary one, depending upon the individual judgment of the inspector, and many examples could be quoted where one inspector will assign a certain grade to a certain sample while another inspector will give the same sample an entirely different grade. Many things enter into their judgment in these cases, for instance, the colour of the grain, the number of unmatured kernels, the amount of starch in the sample and whether the grain has been slightly frosted or not.
In the wheat-growing provinces there are many varieties of grain. The older varieties are still used and still make up the standards, but many new varieties are being tried out by individual farmers. I realize that the department is doing a good deal to discourage farmers from planting these new varieties until they have been thoroughly tested out in the different experimental farms, but I know much grain does not comply with the older standards because these new varieties are being used. The chief inspector, I believe, says that there are about seventeen hundred different grades of grain at the present time. In a way we in Canada are in an especially good position as regards our grading 56103-34
system. I refer to the markets of Europe. While grain from the chief countries which compete with Canada is liable to be re-graded in Europe, European buyers will accept Canadian grades and this possibly would make it a little difficult to change our system of grading. Such countries as Australia, India and the Argentine are liable to have their grades changed or their grain re-graded in Europe, whereas Canadian grades are accepted.
As I have said, however, widespread dissatisfaction and a great deal of doubt exist in the minds of Canadian farmers as to whether they are really getting all they are entitled to get in selling their grain crop. Whether fairly or unfairly they often assume that they are not getting what is coming to them as producers of grain. For instance, when nearly all the grain of a district grades No. 4, they wonder whether all the flour produced from that grain will be No. 4 or not, and they also wonder if there is any way whereby buyers of grain could have their records checked up in order that it might be seen whether they sell the same quantity of, say grade No. 4, as they buy. If anyone doubts there is much dissatisfaction, he has only to consider what has been said by hon. members who have spoken on this subject, and if he does I am sure he will agree that an investigation is required into the present system of grading with the hope of finding some system that has more scientific accuracy in it.
The official standards for wheat do not at present contain any reference to protein content and they contain no element that constitutes a reliable indication of the protein content. We know that gluten, or the protein content, is the quality required chiefly by the bakers. We know that millers pay and are willing to pay a premium for high protein wheats, and we are not convinced that under present conditions this premium which they are willing to pay is fully reflected back to the wheat growers. This operates to the dissatisfaction of the producers of some of our choicest wheats. I refer to our dry land farmers. They are distant from milling centres and terminal markets and they' are largely at the mercy of the people who buy their grain. Surely, if a premium is being paid at all, it should be fully reflected back to the primary producer of the grain who worked so hard to bring his crop to the market.
I wish to read just a short extract from the Wheat Studies of the food research institute of Stamford university. It discusses the various



Grading of Wheat-Mr.. Coote
grades of grain and the methods of judging that grain, and it says:
Nevertheless, all things considered, the amount of gluten, that is, of protein, seems in the light of the present-day knowledge to be the nearest approach to an ideal index of baking strength available. The baker who depends upon it alone will now and then be deceived. If, however, he knows the variety and place of origin, of the wheat from which the flour is milled, he will less often be misled.
I contend, Mr. Speaker, that this is a subject which requires a good deal of investigation and very careful study. I am most firmly convinced, however, that the farmers of Canada are not satisfied with the present method of grading, and they hope that some better method may be worked out. The people in the United States are also alive to this condition, and the chairman of the United States board of review stated in conversation that:
If Canada should establish protein as a grading factor, the United States would be forced to do the same. Pressure was being brought to bear all the time. The United States laboratories at Washington were working hard on this question at the present time. He believed the bakers were driving the mills to furnish high protein flour, and competition between the mil's forced them to comply.
I believe that the wheat of Canada might have a better place on the markets of the world owing to its high protein content, and I think the farmers of Canada would be much happier if they did not have the impression that the present system was working unfairly to them.


Mr. G. G. COOTE (Macleod):: Mr. Speaker, I think the hon. member for Qu'Appelle (Mr. Millar) is to be congratulated upon his persistence in keeping this subject before the House of Commons. It is a subject of great importance to the farmers of western Canada, and therefore of great importance to the country as a whole.
It is almost a waste of words to say that there is great dissatisfaction existing among the producers of grain in western Canada over our present grading system. Very much has been said in praise of our grading system, and possibly a good deal of it deservedly said. I think that a great deal of the dissatisfaction which undoubtedly exists has been caused by the lack of uniformity in our grading. It is very difficult under the present grading system as outlined in the Canada Grain Act to secure the uniformity which we ought to have. The chief inspector is reported to have made the statement when he was before a farmers' convention recently that grading was after all a matter of opinion. To producers the grading

of their wheat is too important a matter to be done simply upon the opinion of the inspector.
I do not know enough about the subject to say whether we would improve conditions by basing our grading system on the protein content of the wheat. Two years ago I visited the Minneapolis sample market while on my way to Ottawa and spent two days there, and while I was on the trading floor of their sample market I saw a buyer for one of the mills offer a premium of twenty-eight cents a bushel for one car of wheat over what he would offer for another car, although both were graded the same, No. 1 dark northern spring. The broker who was selling these two cars of wheat had secured a protein test of each car. One car tested something over fifteen per cent protein, and the other about ten and one-half per cent protein, and the difference in the protein content of those two cars of wheat made a difference in value, in the judgment of this buyer, of twenty-eight cents a bushel. There was also one instance in that season wheTe a premium of fifty-two cents was said to have been paid on the Minneapolis market for high protein wheat.
As the hon. member for Moose Jaw (Mr. Ross) said, it is generally believed that Canadian wheat is almost uniformly high in protein content, but we are probably assuming too much, with our present knowledge, if we assume that to be a fact. I personally would like to see this subject very carefully investigated. What I saw in Minneapolis convinced me that we diould at least make a thorough study of this subject, and I would suggest that this resolution be sent to the agriculture committee for consideration. I know that there will be much opposition raised to the suggestion that we should change our present system and base the grading of wheat upon its protein content, but I would point out that the sections of the present Grain Act covering the grading definitions take into consideration the milling value of wheat, and the milling value is, I think, largely determined, especially in the case of our higher grades, by the protein content. I do not know whether it is a fact that the protein content is the determining factor only in our higher grades of wheat. I think that sometimes our low grade wheat although it might show a high protein content, is not of very high milling value because the quality of the protein has been injured by weather ' conditions, by frost, possibly, or some other condition.
I do not think I should discuss our present grading system at very great length upon this resolution. I think it is sufficient to say

Grading of Wheat-Mr. Donnelly
that at least fifty per cent and possibly more, of our grain producers think that the system could be improved upon, and if that is a fact -we do not need to discuss the present system at any length at this time. I think we have sufficient justification for asking that this resolution be sent to the agricultural committee for consideration, and possibly we may get a recommendation from that committee as to any change they deem desirable in the act, or whether they think the subject should be further considered by our research department.


Mr. CAYLEY:: Is the protein test made use of anywhere in the world, and what is considered a high protein content?


George Gibson Coote: I do not know that protein
is used as a basis for grading in any country in the world, but I think it is used as a basis for selling the great bulk of the wheat which is sold on the Minneapolis market, which is the biggest hard spring wheat market in the United States.


Thomas Merritt Cayley: Is the protein test made
use of in buying?


George Gibson Coote: Yes, by the buyers. As the wheat arrives at Minneapolis, principally from Montana and North Dakota, it is graded in practically the same way as our own Canadian wheat, although we would consider their grades easier than ours. But after this wheat is graded it is nearly all sold on sample; at least, it is all offered for sale by brokers on the Minneapolis sample market. There is a large milling industry established in Minneapolis and a great deal of this wheat does not go any farther than that city, but is ground there. The buyers for the mills in Minneapolis do not buy much wheat without first securing a protein test. I think every mill there has its own laboratory in Which it can make its own tests. In addition a commercial laboratory is located on the ground floor of the chamber of commerce, where the market is held. In this laboratory a sample of wheat may be tested in a very short time for a charge of, I think, fifty cents. I visited the laboratory and the proprietor told me they had tested that morning over 500 samples of wheat. The test is made in a very short time.


An hon. MEMBER:: What is considered the average' per cent of protein?


George Gibson Coote: I do not claim to have enough knowledge of the subject to answer that question positively, but we have in Canada a great deal of wheat which I think would test at least 15 per cent protein. I think the' 56103-344
records show that in some of the laboratories many samples tested between 16 and 17 per cent, and maybe an odd one over that; but in my opinion, which I have arrived at as a result of conversation with grain men and millers, I believe anything in the neighbour-.hood of 13 or 14 per cent may be considered a high protein, and there is a great deal of wheat in the United States, and possibly some in western Canada, that will test less than 10 per cent. I believe the millers want a wheat for milling that will give a uniform baking value1. To secure that they want a uniform protein content, I do not know exactly what that protein content has to be, but I know that if they buy a quantity of wheat with too low a protein content, they will offer a premium for a car with an exceptionally high protein test, to mix with it and that is what has caused a high premium to be paid on the' market at Minneapolis for wheat with a high protein content. Whether that condition would obtain in Canada is hard to say, because many people here contend that so much of our wheat is of high protein content that there would not be sufficient demand to ensure the payment of very much premium for high protein wheat. However, I think we have evidence enough before us to warrant us in asking that this matter be referred for consideration to the committee on agriculture. They can, if they think necessary or advisable, call in the services of our chief chemist at Winnipeg, or the chemists who are making the experiments for the mills in Canada. I would suggest to the Minister of Trade and Commerce (Mr. Malcolm) that he would be very well advised to allow the resolution to be referred to the committee on agriculture.


Mr. THOMAS DONNELLY (Willow Bunch):: Mr. Speaker, with the others who have spoken I wish to congratulate the hon. member for Qu'Appelle (Mr. Millar) on having brought this resolution to the attention of the house. I consider this an important resolution to any farmeT in western Canada or to any man interested in farming, as it has to do with an honest endeavour on the part of the mover to secure for the farmer the right to demand and obtain the true value of his wheat. Now, we all concede that Canada is and will be for some time to come a distinctly agricultural country. The prosperity of the country depends upon agriculture. If the farmer is prosperous the whole country is prosperous and if western Canada has a good crop it stimulates trade throughout the whole Dominion, and that means a period of prosperity. Agriculture is and will be' for many years the

Grading of Wheat-Mr. Donnelly
basic industry of Canada. Any legislation therefore which enables the farmer to receive the true value of his product is good legislation and merits the support of the members of the house.
There are only two ways in which we can improve the conditions of the farmer and give him a greater net return for his product. One is by decreasing the cost of his production and the other is by increasing the price of wheat to the wheat grower. To increase the price to the wheat grower only two ways are open. One is to decrease the cost of the distribution of wheat. This problem has, to a great extent, been solved by the wheat pools in western Canada. It has been calculated that the wheat pools, by their work of distribution, have increased the price of wheat to the wheat grower by at least 25 cents a bushel, without in any way increasing the price of bread to the consumer. This has been brought about through the more efficient method of distribution, and we hope to see the wheat pools become still more efficient in the years to come. We can also increase the price to the wheat grower by inducing him to produce a better and higher grade of wheat. The wheat in western Canada is valued in the world's market chiefly on account of its hardness or the amount of protein which it contains.
Much work has been done in past years, and we hope to see much improvement in the years to come. This resolution asks that in fixing and applying standards of value account be taken of the basic property of wheat. That is the protein. Protein is that property of wheat which supplies viscosity to the dough: in other words, it is that property in the flour which, when made into dough and fermentation begins to take place, keeps and maintains each air particle separate and distinct from the other, as the dough will stretch and will not allow the air spaces to break into the other and so cause the dough to fall. Our system of grading has been in force for some years and is probably the best system in the world from a commercial standpoint. The system is convenient for commercial purposes and enables the wheat to be handled easily. It does not take into account the amount of protein contained in the wheat. In our grading system we only take into account the amount of moisture, the weight, the colour of the wheat, as well as the frost and so on, but we do not take into account the amount of protein. No account is taken whatever of the chief element for which the wheat is valued, and that is its protein. Our spring wheat grown in Canada is valued to-day throughout the

world for its protein content, and yet in our grading system no account whatever is taken of this, and though our system of inspection of wheat is old and has not been changed for years, and though we have had a commission for many years past looking into the grading of wheat, we have had no report whatever on inspection or grading of wheat, and I may say to-day that this year, above all years, there has been more complaint concerning the grading of our wheat than ever before. I believe the time has come when this government should look into the whole system of the grading and inspection of wheat.
If there is one fault I have to find with the resolution, it is that it does not go far enough. We should ask for a complete investigation into the whole system of grading and inspection of our wheat as it exists today. At the present time we have wheat grown in some parts of western Canada containing as low as seven or eight per cent of protein. It may have a bright, large and starchy kernel, but is low in protein, and on the other hand we may have wheat containing as high as 16 or 17 per cent protein, clear in colour, but small kernels, and yet these two grades of wheat, one containing B per cent and the other 17 per cent, receive exactly the same price on the world's market. This probably affects my constituency more than any other part of western Canada. I have the honour to represent a constituency in which there is a new soil, practically all virgin, lying in an area that does not receive too much moisture but just sufficient to raise a good, hard, red spring wheat. Yet, although we grow a wheat with a high protein content, we receive no more for it than do those who grow a product of lesser protein content, probably only seven or eight per cent. We are glad to note that during the past year the Saskatchewan Co-operative Wheat Producers Limited have been investigating the whole matter of the grading and inspection of grain as it exists in Canada to-day, with a view to securing such information as will enable them to recommend a more equitable application of the grading system to the individual farmer. It is also gratifying to know that the Dominion government, through the board of grain commissioners, have had scientists at work in this connection for some time, and we trust that the result of their efforts will be the acquisition of information of a practical nature. We are convinced that better results would be achieved if the services of more scientists could be secured in this field.

Grading oj Wheat*-Mr. Donnelly
I wish particularly to call the attention of the government to a portion of the report of the committee which was appointed by Saskatchewan Wheat Producers Limited, in which special reference is made to some of the faults which they discovered in the grading system. Let me quote one of their recommendations:
We next looked into the practice of grading as it is carried on at Winnipeg, checking the work of the samplers, deputy inspectors and chief inspector, and received much valuable information which has been submitted to you in detail. From Winnipeg we went to the head of the lakes and while there formed an opinion, which we still hold,, that there is a difference between the standard grade at Winnipeg and at the lake head. There has been some fairly severe criticism with regard to this opinion being expressed by members of the board, but notwithstanding anything that has been said, we are still of this opinion and would recommend that the resolution which was unanimously agreed upon by the inter-provincial meeting held in Calgary in March last be again taken up with the dominion government at the next session of parliament, the resolution being as follows:
"That steps be taken to provide that, in accordance with the Canada Grain Act, terminal elevators, both public and private, shall be compelled to maintain outturn grades of the same standard as that in use at primary inspection points; and further, that if the Canada Grain Act as at present constituted does not provide for this, steps be taken to obtain an amendment thereto to bring it into effect."
In this the claim is made that we have two standards of grain, one for inspection at Winnipeg and the other for inspection at Fort William. The grain commissioners also, at the same time, fix a standard whereby grain is sold at Fort William or at the head of the lakes, and as you will see from this recommendation it is felt that the standard applicable to wheat as sold at Fort William is not as high as the standard by which the wheat is bought at Winnipeg. This militates against the farmer, to the benefit of the distributor or the grain dealer. They claim that there is one standard by which they buy and an inferior or lower standard by which they sell. To substantiate this argument or to prove that the wheat, when it is being sold or is leaving the country, is not of as high a grade as when it is bought, let me refer the house to some of the work that has been done along this line. Forty-seven samples of wheat of contract grades were taken from Buffalo. These were inspected by both the government inspector at Winnipeg and the inspector attached to the Saskatchewan Wheat Producers Limited. From four to six samples were sent at a time from Regina to the inspector at Winnipeg out of these forty-seven
samples. Sixteen samples maintained their grade, and it was agreed by the inspector of the wheat producers as well as by the inspectors at Winnipeg that these were correct. Thirty-one were lowered by the government inspector, while twenty-one were lowered by the superintendent of the wheat producers. Every one of these samples had a small percentage of foreign grains such as barley, rye and so forth. Samples were also obtained from points on the Atlantic seaboard. From the public elevators at Baltimore, Philadelphia, Portland, Maine, New York and Montreal, samples of contract grades were taken and only one of these samples held the grade. That was sample No. 4 taken from the public elevator at Montreal. These samples were graded by Mr. Steele, of the Wheat Producers Limited, who was fully qualified to judge of the proper grade of wheat. Not satisfied with this, the Wheat Producers Limited had a number of samples, originally shipped across the Atlantic, brought back from England, and many of them I saw. There were from fifty to sixty of these samples. Invariably they were one grade lower, at least, than the contract grades at Winnipeg. The Wheat Producers Limited of Saskatchewan have had at least from forty to fifty samples of their shipments brought back from the old country. The general opinion seemed to be that our grades were more uniform, and if anything a little better than they were last year. Last year the old country millers complained bitterly about our No. 3 grade on account of its having dried wheat in it. This was almost a universal complaint, for it came not only from millers overseas but even from eastern Canadian millers. Nos. 1 and 2 grades were fairly uniform but they were just line grades; in other words, they were on the line between 1 and 2 or between 2 and 3, and invariably they were graded into the higher grade. This is some of the work that has been done and it shows that the grades that are shipped out of the country are lower than the grades received by the farmers at Winnipeg. This condition of affairs necessarily enables the private terminal elevators at the head of the lakes to indulge in the habit of mixing grain for export from Fort William and therefore lowering the standard of our wheat on the world's market.
Let me quo^e an example of mixing. I could cite many examples, but I will content myself with giving one to show the extent to which wheat is mixed at the head of the lakes, thereby reducing the standard. A fair example of the way wheat is mixed at Fort
534	COMMON'S
Grading oj Wheat-Mr. Donnelly
William is given by the following shipment made on the steamship Royalton in November, 1926:
125,000 of Nos. 3.
65,963 of Nos. 3.
20,000 of Rejected 3.
1,200 of Tough 4.
6,720 of No. 5.
5,280 of Nos. 1 & 2 Kota.
8,580 of Moisture 3 & 4.
4.730	of Tough 3 Kota.
4.730	of Tough 3 Red Durham.
1,300 of Durham & Spring.
6,500 of Dried No. 1.
This mixture was shipped out and sold on the markets of the world as No. 3 wheat. This is one of the worst examples of mixing that we have had and a great profit is made by this process at Fort William; and while our pool elevators are returning to the farmer in a great measure much of the profits of mixing, by indulging in the mixing process themselves, it is felt that it is an evil practice and it would be far better if it could be done away with entirely.
For the past ten years our standards of wheat have been depreciating in the markets of the world through this process of mixing, and though we are endeavouring by every means to increase the standards of all other farm products, it is regrettable that our major farm product should be allowed to suffer in this way. We try to raise the standard of our butter, our cheese, our bacon, our fruit, in fact the standard of every farm product but our major farm product-wheat, which to-day is being depreciated in the markets of the world. In this connection I find in the Regina Leader of January 17, 1928, the following article:
Canada is losing her world markets through failure to maintain her products at high quality, Mrs. IT. M. Aitkens of the institute branch, Ontario Department of Agriculture, declared to-day in addressing the Ottawa branch of the National Council of Women.
Discussing her impressions of Canada standing in the various countries of Europe which she recently visited, and in substantiation of her statement that Canadian produce was losing its former high ranking, Mrs. Aitkens said, "Canadian wheat is deteriorating; last year alone growers of the Dominion having lost $9,000,000."
This is a quotation from the report of the committee appointed by the board of directors of the Saskatchewan Co-operative Wheat Producers Limited.
In connection with this worlj we had found out from our general sales manager, Mr. D. L. Smith, and from the perusal of correspondence and cables received from the United Kingdom and continental Europe, that there was some dissatisfaction in connection with the standard of Canadian grain which was reaching those countries, a complaint being particularly strong 
in connection with our No. 3 Northern wheat. We also found a fairly general opinion expressed by terminal operators of long standing and by grain men generally that our grain standards were being gradually reduced, due partly to the many varieties of wheat that are being grown in the three provinces at this time, and due to the fact that most of the terminal elevators at the head of the lakes were being operated as private terminal elevators or mixing houses, and that very few of the terminaf elevators were operating under a public' terminal license, in fact only six of all the elevators in Fort William and Port Arthur at this time are operating as public terminal elevators.
The Department of Trade and Commerce should look carefully into this whole matter and endeavour by every means in its power to keep the standard of our wheat at the highest possible point in, the markets of the world. It is felt that there is no necessity for two standards, one at Fort William, the other at Winnipeg. We believe that we should have only one inspection point for wheat, and that it should be at Winnipeg. I am speaking, of course, entirely of wheat shipped out through Winnipeg and Fort William. I submit that there should be no inspection point at all at Fort William, and that the wheat which the farmer has to sell should be inspected at Winnipeg, and that the wheat which is sold for export from all private elevators should also be inspected at Winnipeg, even if the mixing system is allowed to continue. A sample of the wheat that is being prepared for export should be taken out of the private elevators and sent back tc Winnipeg, to be there inspected by the * same inspectors that inspected the farmer's wheat. We do not believe that the graders at Fort William are crooked, we do not believe that they are not d'oing their work efficiently, yet there exists in the public mind a feeling that these men are not doing their work as it should be done, that there is too much room for graft. When we take into account the spread in wheat to-day between 2 and 3 northern has been on an average throughout the whole season at least 15 cents, and that boatloads are being shipped of two, three and four hundred thousand bushels, we find that a difference in those grades involves a loss running from $30,000 to $60,000. Now when * it is borne in mind that the men who are doing this grading are only getting $2,500 to $3,000 a year-well, we cannot help but think the same sometimes as the man in the country, " human nature is human nature." In short, the chance for graft is too great. This chance should not be present. We think in fairness to the men themselves they should be. relieved of all suspicion and the government should take eveTy precaution to

Grading of Wheat-Mr. Bothwell
this end. In order to relieve the men of all suspicion of questionable methods, either in grading or taking samples, I believe it would be wise if the samples were not only taken at Fort William when the boat is being loaded, but again at Buffalo or at any other point where the boat is unloaded, these samples to be sent back to Winnipeg to confirm the former grades.
Let me say in conclusion, Mr. Speaker, that I heartily support this resolution, but I think it should be enlarged so as to take in the whole question of grading and inspection of wheat, and that it should be referred to the agriculture committee, to thoroughly investigate and report thereon.


Mr. C. E. BOTHWELL (Swift Current):: Mr. Speaker, I have listened to the discussion of this resolution with a great deal of interest. Every member from the prairie provinces must realize that the grading of wheat is a most important part of the great industry that is carried on in the west. Every year we hear complaints about the grading of wheat, and this past year has been no exception, in fact last fall I think there have been more complaints of wheat grading than ever before.
I am doubtful, though, if we are yet at the stage where we can accept this resolution. It reads:
That in the opinion of this house the statutory definitions applying to all contract grades of wheat in the western inspection division should be amended in such a manner as to provide for including protein as a factor.
I take it this means that if the house passes the resolution, immediately the duties imposed upon the Board of Grain Commissioners, through instructions from the Department of Trade and Commerce, to prepare an amendment to the Grain Act, but from what I have heard in this debate I am very doubtful whether we are yet ready to accept such an amendment. Yesterday in introducing the resolution the hon. member for Qu'Appelle (Mr. Millar), at page 497 of Hansard, quoted the following paragraph from the proceedings of the Research Council of Canada:
All endeavour so far has failed to disclose any method by which strength may be measured other than the baking test but this method is unsatisfactory for many reasons. It is inexact, depends chiefly on the skill of the operator, is time-robbing, and when completed it is impossible to express the results numerically or in a way that would be universally understood. Also reliance can scarcely be placed on a single test, and often as many as three bakings must be made to make certain of the results.
If that is a true statement of fact so far as the research council is concerned, surely we
are not yet ready to amend the act and make provision for taking the protein content as a factor in the grading of wheat, with all that that implies. I do not know just what effect it might have on the wheat industry in western Canada. And I should like to know what effect it might have on the mills at or near the points of inspection. These mills often purchase the wheat immediately it comes into Winnipeg, and we do not know just how long that grain is going to be held up in order to have these tests made. We do not know further what effect it may have upon the railway traffic in connection with moving the tremendous crop of wheat that we have in the west each year.
For these reasons, and also the fact that apparently the investigators are not yet able to give a definite report as to how protein content can be accurately obtained, also that they are not yet able definitely to fix what percentage or quality of protein should be taken to determine the value of wheat- as shown by a clipping from the Southwestern Miller, which I should like to read-I do not think we are yet ready for the change suggested in this resolution. The article to which I refer is dated at Kansas City, July 21, and reads as follows:
"The percentage and quality of protein is having more and more effect on the market price of wheat," says H. M. Bainer, director of the Southwestern Wheat Improvement Association. Continuing he says, "Millers and grain dealers are paying a good liberal premium for hign protein wheat, especially when they know that the protein is of good quality. The wide margin in price often paid at the same market on the same day for different lots of wheat of the same grade is almost always due to the difference in protein.
The country grain buyer cannot determine the protein content in wheat; the work is too intricate and special chemical equipment is necessary. The only way the wheat grower or grain buyer can determine the percentage of protein is by sending a small composite sample to the state grain laboratory or to a cereal chemist for analysis. Protein may run as low as 8 per cent and as high as 18 per cent, but 12 per cent is a good, high average."
I think it was the hon. member for South Oxford (Mr. Cayley) who inquired as to the protein content of our Canadian wheat. Taking the report of the Regina Leader last year as to the six more commonly tested wheats from the western station in the prairie provinces the results are as follows:
Per cent
Reward	 17.52
Kota	 17.29
Ruby	 16.99
Marquis	 16.20
Garnet	 15.89
Kitchener	 14.54

Grading of Wheat-Mr. Motherwell
Now, Mr. Speaker, having regard to the facts I have stated, that we are not yet able to put into operation any definite system of grading wheat according to protein content, but that protein content, as shown by these quotations, is a most important factor in the grading of wheat, I beg to move, seconded by Mr. Vallance, the following amendment to the resolution as it now stands:
That all the words after the word "that" in the resolution be struck out and the following words substituted:
Whereas the protein content is an important factor in the value of wheat,
Therefore be it resolved that in the opinion of this house the national council of industrial and scientific research, in conjunction with the board of grain commissioners, be asked to investigate and report on the feasibility of utilizing the protein content of wheat as a basic factor in the grading of that product.
And further be it resolved that this resolution be referred to the committee on agriculture and colonization for consideration and for such suggestions in connection with the grading and inspection of wheat as it deems advisable to pass on to the said national council and board of grain commissioners.
I move that for the reason that our own research council, as shown by a report made on January 11 of this year is not yet ready to make any definite recommendation. I quote in support of the amendment as I have worded it the following from the report of F. J. Birchard, chemist in charge:
Among the other problems now under investigation, or which it is proposed to study very shortly, the following might be mentioned.
The relation between the variety, weight per bushel, size of kernels and various other factors on the oil content of flax.
The effect of various percentages of different forms of damaged wheat on the milling and baking value of the flour produced therefrom.
The development, if possible, of a practical method for determining the quality of the gluten in wheat.
A study of the chemical composition, milling and baking characteristics of the different grades of wheat originating in different parts of western Canada.


Hon. W. E. MOTHEEWELL (Minister of Agriculture):: I desire to make just a few
observations before the amendment is put. I feel that the thanks of the house are due to the hon. member for Qu'Appelle (Mr. Millar), and those associated with him, for the persistency with which they have kept this important question before the house and the country generally. For the last forty years, at least every time there has been an off-year in the matter of grades, there has been an agitation and a natural and proper demand for some betterment in the matter of our wheat grading system. The fact that not much improvement has been made is not an argument in 
favour of giving up the fight, but rather an argument in favour of pressing onward until that betterment has been obtained in every possible respect. The house will recall, at least those members who have had the opportunity of reading Dean Eutherford's account of his visit to the old country will do so, that when the dean visited the old land he could find no miller or importer who would venture the opinion that wheat could be successfully graded on a protein basis for export, because of the great difficulty of retaining the identity of the various wheats on that basis. I will not enter into a discussion of the matter, except to point out that we have a tremendous multiplicity of grades now, and anything that will tend to increase the present number, without bringing about a commensurate advantage, should be avoided. Take for instance No. 1 northern. It may be tough or damp; it may be rejected for smut, and I do not know what else. If we had to grade it on the basis of the protein content-whether it were 16 per cent, or 15 per cent, or 14 per cent, or some other percentage-that would multiply the number of grades very considerably. While that is the case, something I think can be done and the hon. member for Macleod (Mr. Coote) indicated it. The prices are governed, at least for the home market and in the United States, very substantially on the basis of protein. Where the millers are right on the ground and can see the sample they are buying on the sample market, and there is very little damage, if any at all, from frost, they can reasonably well buy on that basis. But on the other hand, where this low grade wheat is due to either frost or rust, grading on a basis of protein content might be quite misleading and might, as a matter of fact, have the very opposite effect to that which is contemplated. As I have already pointed out, the very lowest grade wheat, namely, No. 6, might run just as high in protein content as the highest grade, namely, No. 1. The protein content in the case of wheat will mean nothing unless the quality goes with it, and everybody knows the quality cannot go with a No. 6 northern wheat which has been put into that grade as a result of damage by frost; neither can it go with wheat affected by rust, because the yield will be so adversely affected. The whole question, therefore, is properly a matter for the committee on agriculture to consider, and it Should also be the subject of research.
I hope the house will not draw any wrong inferences from the suggestion of the hon. member for Macleod (Mr. Coote) that there is a possible difference of twenty-eight cents

Grading oj Wheat-Mr. Vallance
a bushel with regard to two samples of wheat because of the difference in the protein content,
If the quality of the wheat were adversely affected in any of the ways in which Canadian wheat may suffer damage, a greater quantity of protein in content would have no appreciable effect in counteracting that * damage; as a matter of fact the effect might be the opposite to what is contemplated. If we refer this matter to the committee on agriculture we shall have the decided advantage of being able to call in our experts, for instance, Doctor Shutt, Dominion chemist, who has done a great deal of experimenting in this respect, and Mr. Newman, Dominion cerealist. We could also call in Mr. Harcourt, of Guelph, who is in charge of one of the best milling and baking laboratories in Canada, if not in America, and we could find out from them first-hand just to what extent the protein content can be made use of without our being misled in the direction indicated by various speakers.
I should like to make a few observations with respect to the remarks made by the hon. member for Willow Bunch (Mr. Donnelly) on another matter which is correlated to this one, and that is with respect to the standards of our outgoing grain from the head of the lakes. The evidence he produces goes to show that a large number of samples of outgoing grain differed very materially from the samples where the standards were set at the time of purchase, namely, in Winnipeg. Without doubt that is a very important point, and I wish to draw the attention of the house to the fact that provision was made in the Turgeon report for correcting just that sort of thing, but at that time the committee on agriculture and the house were not prepared to move in the direction of the Turgeon report. I have no doubt whatever if the request were made by the growers through their pools that grain which is mixed at the public terminals at Fort William should be graded on the same basis as the grain at Winnipeg, there would be a disposition on the part of the agriculture committee of the day and this house to accept such a suggestion coming from such a source.
Some hon. members from the west who can recall the late eighties of last century know that mixing grew to such enormous proportions during the latter part of that decade that the grain trade itself came to parliament and asked to be saved from its own conduct. In the year 1900 the new Grain Act was introduced as a result of the agitation of that time and mixing was prohibited. About 1912 -and I need not go back to the reasons for this-mixing was resorted to again, and it
has been going on and on, and being more generally practised, until we now have the complaints referred to by the hon. member for Willow Bunch. In my estimation we shall have history repeating itself. This evil will cure itself because those who are practising it and the farmers themselves will, in due course come to parliament and ask that this condition be remedied. I am very much in favour of the amendment and all the facilities of my department will be made use of for the purpose of having the parties to whom I have referred brought before the committee to give evidence.


Mr. JOHN VALLANCE (South Battle-ford) :: Mr. Speaker, I am rising to second this amendment because I believe the proper place to discuss this resolution and to do it justice is in the committee cm agriculture. As has been pointed out by the Minister of Agriculture (Mr. Motherwell), there we can have the millers, growers and others who are interested come before that committee to give their views on this matter. Perhaps this resolution and the amendment are somewhat premature, because I think the whole proposition would benefit if discussion of the matter were deferred until the report of the research council is available. We would then be in a better position to discuss the matter intelligently.
It is quite apparent in this debate that every member from the western provinces has attempted in some way to expose the evils of the present grading system, but I do not think all the evils have been printed out. The hon. member for Moose Jaw (Mr. Ross) pointed out one particular instance, namely, the moisture content of wheat. In a year such as the crop year 1927, where we had a large quantity of tough wheat, this was a very pressing question with the farmers of western Canada, and I had pointed out to me on more than one occasion that too much latitude seemed to be given within the grade, for instance, that wheat shall contain 14.4 per cent of moisture in order to get into dry wheat. It is common knowledge, at least to us western farmers, that the greater bulk of the wheat grown on the open prairies of Saskatchewan and Alberta contains as low as 11 per cent of moisture, and the farmer who is growing wheat with 11 per cent of moisture content feels that he is being somewhat penalized because he has to accept it as containing 14.4 per cent of moisture. Therefore, we are selling on the world market wheat of a grade that may contain 14.4 per cent of moisture although on many occasions we are growing wheat with a great deal less moisture content. As long as there is a latitude within
538	COMMONS
Grading of Wheat-Mr. Young (Weyburn)
the grade, as is the ease under the present grading system, we shall have to submit to two standards of grade. I believe, from my experience after growing wheat for twenty-two years on the western plains, that we, the farmers, sell our wheat at the maximum moisture content and that when it goes on to the world market it is sold at the maximum, thus giving the grain trade a great deal of latitude in the mixing. At the present time, particularly in Saskatchewan yhere the Cooperative Wheat Producers, Limited, control eighty per cent of the wheat, this mixing is not as great an evil to the farmer as it was prior to the establishment of the wheat pool, because we enjoy the same mixing privileges as do the other grain interests. If this whole question is referred to the agriculture committee, we shall be able to bring the very best brains before the committee and be able to deal with the question intelligently. Therefore it affords me very great pleasure to second the amendment.


Mr. E. J. YOUNG (Weyburn):: I wish to rise in support of the .amendment. I am of opinion that the proper thing to do in this regard is first to get the opinion of the national research institute, when that organization is set going, so that we can arrive at as definite a scientific opinion as is possible.
As I understand it, the aim of the resolution was to make the protein content if not the determining factor at least a greater factor than it is at present in determining the grade of wheat. I was much impressed by the remarks of the hon. member for Moose Jaw (Mr. Ross) when he pointed out that although protein is an important factor it is not always the only factor which the millers require in 'buying wheat. In the United States protein is very largely the determining factor for this reason: Minneapolis is a very large milling centre. It draws its wheat from a large area where the wheat is of low protein content. It is only on the northern borders of Montana and Dakota that wheat of high protein content is produced. Consequently the millers of Minneapolis, wishing to make a flour up to their standard grade, are looking for wheat of a high protein content to tone up the wheat which they get from other parts of the country that is of a lower protein content. Protein is therefore always at premium in the Minneapolis market. They have their grades over there just as we have here. You will find on the Montana side of the line that wheat of a certain grade, selling say for one dollar a bushel, will, if it contains a large percentage of protein, bring a premium of sometimes as high as twenty-eight cents a bushel. But that would not apply univer-

sally; it would not apply in this country. Our wheat is very largely of high protein content. Protein, then, not being so scarce in Canada as it is in the United States, would not necessarily command the same premium.
_ What is the practice at the present time in grading wheat in this country? We grade largely by the eye and by the scale. If the wheat weighs sixty pounds to the bushel and contains a certain percentage of bard, bright red, vitreous kernels, these can be inspected and judged by the eye, and that wheat is put into No. 1 grade. Much has been said of the dissatisfaction over the grading that has existed in the west during the past year. I have never seen so much dissatisfaction over our present grading system as I have this year, but is that dissatisfaction due to the presence or absence of protein? I do not think so. I think the trouble is this: The farmer looks at his sample and he sees that the great bulk of it is composed of hard, bright red, vitreous kernels, sand he thinks that that surely will grade No. 1. He ships his car, and a sample is taken at Winnipeg. The inspector looking at that wheat is not looking for hard, bright red, vitreous kernels; he is looking for defective kernels, and if he finds a certain number of green, frozen or damaged kernels, he puts that wheat down a grade.
It seems to me that possibly the Grain Act might be improved in this way, without waiting for such a reference as this: The inspection department will not separate wheat from wheat. If you ship a carload of wheat which contains a certain percentage of wild oats, it might go through as No. 1, but if you ship another car of identically the same wheat, but containing, instead of wild oats, a certain percentage of small, green, shrunken kernels, that wheat will be degraded because they will not separate wheat from wheat. Now these damaged kernels could be taken out just as easily as the wild oats.


Mr. DUNNING:: More easily.


Edward James Young: Yes. It seems to me there is room for improvement there without having regard to protein content. I think that could be done quite easily. I believe that is the principal cause of the greater part of the dissatisfaction which exists in the country at the present time with regard to our grading system.


Mr. MILLAR:: Reverting to what the hon. member said a moment ago, that the premium commanded in the United States could not be expected in Canada, would not the adoption of this system of grading wheat where protein is a factor broaden the field of com-

Grading oj Wheat-Mr. Brown
petition so as to include the American buyer, who is now importing a lot of our wheat for grinding with his own soft wheat both for export and for domestic purposes? Would it not also include the British buyer? Would it not broaden the field to include Canada, the United States and Great Britain, whereas now the field is confined to the Canadian miller?


Edward James Young: No, I do not think so. I think that the American buyers coming over here looking for a particular quality of wheat would proceed in this way: They send their experts all over the country while the wheat is growing; they know before the harvest just where the kind of wheat they want can be got, and they instruct their buyers to get wheat from that particular district.


John Millar: This would deprive them
of that privilege. They would have to pay for it.


Edward James Young: Perhaps so, but
there is another way of getting around that difficulty. It seems to me that in determining our wheat grades the first man we should consult is the old country miller. He knows what he wants; he will be prepared to tell us exactly what he wants, and what he would be willing to pay for it. The producer of any other article, clothing, for instance, or anything else, first consults the market to ascertain its needs, and then he tries to produce the kind of article the market wants. Our principal market is in Great Britain, and having determined our grades in accordance with what they want, we should then see to it that they always get the minimum grade. Never give them any better than they pay for, nothing more than the law requires. They do not expect anything better.


John Millar: Has not the British miller
by his practice in selecting high protein wheat already let us know exactly the kind of wheat he wants? He wants it of high protein content.


Edward James Young: No. I shall have to revert back to the remarks of the hon. member for Moose Jaw, who pointed out that generally speaking that is so, but at such times as the world's wheat crop is coming from several different countries and contains all qualities of wheat, the English miller requires less protein content than he does at other times; then it is not protein content that he is looking for. Let us arrange the grades to suit the English miller, and then let us see to it that he never gets anything better than he pays for. Let us see to it that the wheat going over to the old country is always at the bottom of the grade.
There is another question, and that is how to get for the farmer the true value of his wheat. To-day the farmers with No. 1 wheat, whether it be good No. 1 or a poor No. 1, get the same price, but there might be a difference of from five to ten cents in the milling value as between two cars of No. 1 wheat; and the same would apply to the other grades. The question is how to get to each individual farmer the true value of his carload. The remedy for that situation would be a sample market, with samples within the grade, if you will, where professional buyers representing the terminals in which this wheat would be mixed could attend, and where every carload would be tested. Let them give a bid on every car and say exactly what that car is worth in the light of what the market is demanding at the moment; then ship that wheat to the terminals and allow it to be mixed right down to the bottom of the grades. It seems to me that that is a solution of the problem that is about as rational as anything I know of. I heartily support the amendment.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. J. L. BROWN (Lisgar):: Mr. Speaker,
my contribution to this debate will not detain the house very long. I rise as a Manitoba member to associate myself with hon. members from the other provinces who have emphasized the importance of the subject under discussion. I was not in entire accord with the resolution presented by the hon. member for Qu'Appelle (Mr. Millar), not because I had underestimated the importance of the question, but because I felt that at the present time our knowledge of the subject is not sufficient to warrant our taking immediate steps to apply the principle which the hon. member for Qu'Appelle emphasized. I discussed the question many times with my hon. friend and he knows my views in the matter. While the question is one of supreme importance, I have had very grave doubts in my mind as to whether it would be possible, under the conditions which prevail in our grain market-especially when we remember that the greater part of our wheat is for export-to apply those principles which are so successfully applied in the Minneapolis market.
It	has	been	suggested _ that	in this matterthat	we	may	have or will	get help fromexpert chemists. I am not sure whether we need	very much more from	expert chemiststhan	we	have	at the present	time. Some of
Grading oj Wheat-Mr. Evans
us visited the central experimental farm two years ago and spent a very interesting time with Dr. Shutt and his helpers at that institution, and we found that while they had much to present that was very interesting from a scientific point of view, they were absolutely helpless in the matter of offering us any means by which we could apply their principles in the grain trade. However, if this subject is to be referred to a committee, as I believe it will, I am in entire accord with the amendment that has been moved. In the event of its reference to a committee, together with the related subject mentioned by the hon. member for Willow Bunch (Mr. Donnelly), it would seem to me unnecessary to go into any detailed discussion of the matter. I repeat that as a Manitoba member I desire to associate myself with those who have emphasized the importance of the subject. The farmers of Manitoba are at one with their brethern in the other prairie provinces in the endeavour to find a solution for some of the problems which have been troubling us for the last twenty-five years.


Mr. JOHN EVANS (Rosetown):: Mr. Speaker, the question of grading wheat according to its protein content was of more importance years ago, and in common with the hon. member for Lisgar (Mr. Brown) I am of the opinion that it is not even practicable for the farmer of western Canada to market wheat under that method. Some years ago we urged the government to establish a sample market. They did not do so, for obvious reasons. A sample market is a necessity for the hard wheat farmer on the North American continent, if it were possible for the farmer to market all his wheat at home. I would say that we should by all means establish a sample market, so that the farmer would get the intrinsic value of his wheat; but having to export about nine-tenths of this great wheat crop of Canada the difficulty is for any foreign miller to get the wheat he has bought on sample to its destination where he would be able to take advantage of it, and the protein content he has bought, at his own mill. It has to pass through so many terminals and transfer between Fort William and the seaboard that the identity of any wheat bought on sample is.bound to be submerged in the common whole. In the first place, it is sent forward to Fort William in such quantities that after it is graded according to its content of protein at Winnipeg, bills of lading are exchanged by all companies and it is unloaded at the terminal most convenient to be used at the time.

I believe that this principle of grading wheat is not as yet practicable. Besides, I think the need of the growler has been obviated somewhat by about 60 or 70 per cent of it now being marketed by himself through the pool method, and he is to-day getting nearer the value of his product than he ever did 'before. If it were profitable to transfer and to preserve the identity of the wheat between the grower and the ultimate miller, I would then be in favour of such a system; but at present I cannot see that it will help the grower very much. I am not against the resolution and shall be glad to have it discussed in committee, but at present I cannot see that it is at all practicable.
Amendment (Mr. Bothwell) agreed to.
Motion as amended agreed to. 4



DOMINION ELECTIONS ACT


[Stage Direction]
Mr. L. P. BANCROFT (Selkirk) moved the second reading of Bill No. 32, to amend the Dominion Elections Act.
Mr. LAPOINTE:: Explain.


Mr. BANCROFT:: I explained the bill
briefly on the first reading and I hardly think it necessary to discuss it at any great length now. I will ask the house to pass the second reading and allow the bill to go to the committee on privileges and elections for detailed consideration. The object is to obviate the disfranchisement of clergymen, school teachers and students when, in the pursuit of their various callings or studies, they find it necessary to change their place of residence from one constituency to an- , other within the period during which, under the present law, such transfer of residence would disqualify them. This period covers about four months prior to the date of the election. Most of our federal elections are held in the fall of the year. Practically every federal election since 1896 has been held in the fall, and clergymen usually change their pastorates during the summer months, while school teachers take up new duties about the first of'September and university students and those in business colleges about the first of October. Should any of these three classes change their place of residence at the beginning of their respective terms they are disfranchised under the present act if the election happens to take place in the fall. The act provides that

Dominion Elections Act
the voter shall reside in his present polling subdivision for a period of sixty days prior to the issue of the writ of election, and as the writs are usually issued about two months before the election it means that the voter must reside in his division for about four months preceding the election.
The question may be asked, why make an exception in favour of clergymen, school teachers and students? I would point out that under the act as it stands a similar exception is made in favour of railway employees, sailors and commercial travellers, in the interests of whom advance polls are provided.
I brought down this bill last year and it received its first reading but it could not be dealt with at that session. I would remind the house that before introducing the bill then I took the matter up with Colonel Biggar, then chief electoral officer, and discussed it fully with him, and he agreed that the amendment proposed should be carried into the act. As I say, objection might be raised to confining it to these three classes.


Mr. HEAPS:: Why not include harvesters?


Leland Payson Bancroft: I should like to see
every harvester's franchise preserved to him and every Canadian citizen enabled to exercise his voting rights. But in framing the bill we confined it to those classes by whom .the concession would be impossible of abuse.


Abraham Albert Heaps: Does the hon. member
suggest that harvesters would abuse the privilege?


Leland Payson Bancroft: I do not say1 that
harvesters would abuse it, but I can conceive the possibility of a transfer of votes on the part of harvesters from one constituency to another, where you had a close seat in one place and a safe seat in the other. Some particular brand of harvesters might migrate from the safe seat to the close seat and cast their vote there.


Mr. KELLNER:: Is that not possible with
students?


Leland Payson Bancroft: This is confined to
students in the higher institutions of learning -universities and business colleges. All students entering these institutions are obliged to make application, wherein they must state their place of residence. The secretary, or whoever happens to have charge cf such matters, the registrar of the institution, perhaps, knows pretty well the history of every student coming in. Moreover, the bill provides that the person making application to
the registrar to have his or her name put on the voters' list shall satisfy that officer that he or she is qualified in every other respect, apart from t'he question of residence. The same thing applies to school teachers and clergymen:. When people apply for positions as school teachers the secretary of the school district, to whom the applications are sent, learns their history to a certain extent. The' secretary of every school district knows where a particular teacher comes from, how long he has been in his last place of residence, and gets sufficient information generally on which to enable the registrar to decide whether or not the applicant is qualified to vote. In the case of clergymen, I believe, every religious denomination has some board or other body that passes upon all transfers from one pastorate to another. In each of these three cases, therefore, the record can be checked up if necessary, and the onus is placed upon the applicant who, when he applies to the registrar to have his name included in the list, must furnish satisfactory proof that, apart from residence, he is qualified to vote. The provision in the act which this bill seeks to amend reads:
-has ordinarily resided in Canada for at least twelve months and in the electoral district wherein such person seeks to vote tor at least two months immediately preceding the issue of the writ of election.
This bill will add to that subsection the following:	"
Provided, that clergymen or school teachers following their respective occupations or students attending a university or other institution of learning and following their studies, who have ordinarily resided in Canada for at least twelve months immediately preceding the issue of the writ of election, shall be permitted by the registrar to have their names placed on the voters' list if it be proven to the registrar's satisfaction that they will be residing, on the day the election is to take place, in the electoral district wherein they seek to vote, and the rules ill schedule A and B of section thirty-two of the act shall apply to this proviso in so far as they are not inconsistent therewith.
As I said when introducing the bill, this amendment affects approximately 12,000 clergymen, 63,000 teachers and 75,000 students.


Mr. BENNETT:: What warrant is there
for making that statement?


Leland Payson Bancroft: The Dominion Bureau
of Statistics.


Richard Bedford Bennett: There are that many in
Canada?


Leland Payson Bancroft: Yes.
Dominion Elections Act


Mr. McGIBBON:: But they do not change every year.


Leland Payson Bancroft: It would be very hard
to find out how many change every year, but it affects them all because they all change from time to time. I would ask the house to allow the bill to be read a second time and [DOT]referred to the committee on privileges and elections.


Abraham Albert Heaps: Mr. Speaker, I am not a member of the committee on privileges and elections and consequently will not have an opportunity of taking part in the discussion of this bill should it be referred to the committee. There is no analogy between the advanced poll provided for by the Dominion Elections Act and the purpose of this bill. The advanced poll only gives to the individual voter an opportunity to vote in the riding where he or she is entitled to vote; but this bill proposes to give the right to three particular classes in the community to vote in a constituency other than that in which under the act they now would be entitled to exercise their franchise. If the hon. member wants to shorten the time of qualification for voting, he should have brought in a bill aptly worded, and made all classes equal in this respect; but this bill applies to three particular classes, students, clergymen and teachers, and puts them in a preferred category. There are other men and women who may find themselves in exactly the same difficulty at election time as the people in question, and1 why should they be deprived of the privilege to be granted- by this amendment? Men engaged in railroad work and harvesters cannot vote at the advanced polls provided for under the act, although they have a right to the franchise. I am as anxious as the hon. member is to give every elector an opportunity to cast his vote at election time, but I am opposed to granting favours to a few and thus creating inequalities undei our electoral law. The hon. member has given the number of students, clergymen and teachers who would be benefited by the passage of this bill, but although he gives those figures on the authority of the Bureau of Statistics, it does not follow that all those people are entitled to vote; a large percentage of the students, for instance, may be under the age of twenty-one, and others may not be Canadian citizens. I have no objection to this bill going to the committee on privileges

and elections, but I do hope that that committee will thoroughly look into the inequalities to which I have drawn attention and put every section of the community on an equal basis.


Ernest Lapointe: Mr. Speaker, as the mover of the
bill says he agrees to its being referred to the committee on privileges and elections, I have no objection to the second reading.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on privileges and elections.


[Stage Direction]
Mr. J. C. BRADY (Skeena) moved the second reading of Bill No. 38, to amend the Bankruptcy Act,
He said: Mr. Speaker, under the Bankruptcy Act each province becomes a bankruptcy district, but the governor in council may divide such districts into two or more divisions and appoint an official receiver for each division. In the centre of British Columbia, an immense area through which are scattered many small towns and business centres, there are only two official receivers, one at Vernon and the other at Prince Rupert, and tremendous distances have to be travelled by the debtor in order to appear before the official receiver for examination. The purpose of the amendment is not to interfere with the basic principles of the act but simply one of procedure in examination of the debtor and to obviate the present necessity of the debtor being obliged to travel so far to the detriment of the creditors, because his travelling expenses naturally come out of the estate. This bill would make the Bankruptcy Act operative in those areas wherein to-day it is . inoperative, due to the conditions that I have just referred to. In other words, it would enable creditors there to benefit by the act as they do in urban centres.
Let me give the house an illustration typical of the difficulties in securing a debtor's examination in those areas. . A bankrupt who formerly carried on business near Prince George is now resident in Vancouver. From Vancouver to Prince George the distance by the Pacific Gre'at Eastern railway is 480 miles, and via Prince Rupert by w^ater and rail the distance is about 1,200 miles. Now, the debtor is obliged under severe penalties to travel to Vernon to appear for examination before the official receiver of the district

Bankruptcy Act
wherein he formerly resided. Later he must go to Prince George where the creditors' meeting would naturally take place. The purpose then of the amendment is not to interfere with the basic principles of the act but to render the act operative in those areas wherein to-day it is not possible for the creditors to benefit by it. I think, therefore, that anybody who has studied the bill and read the observations set forth therein will have no difficulty in seeing that it is of great importance that the creditors be enabled to get something at least out of the estate. In one particular instance where the act was taken advantage of the creditors were obliged to pay the debtor's expenses on two occasions and yet they received no benefit whatsoever out of the estate. The purpose, therefore, of the amendment is simply to render the act operative* throughout the whole of Canada, and likewise to enable the creditor or the creditors to receive the benefits which it was intended by the act that they should receive.
Mr. C. H. CAHAN (St. Lawrenoe-St. George):: Mr. Speaker, the hon. member for Skeena placed before me some time ago, simply as a friend, the difficulties of securing examinations in British Columbia and in some of the districts of the northwest. It has seemed impossible to bring debtors five hundred, six hundred, or a thousand miles, through rough country oftentimes for the purposes of examination. I think the gist of it is in section 1, subsection 1, the last sentence :
The examination of the debtor shall be taken before a magistrate, justice, commissioner for taking affidavits, notary public or any qualified person authorized by the court to take evidence, at such place of business or residence, or as near thereto as possible.
It will be made under an order of the court anyway, and in my opinion it simply gives a judge having charge of bankruptcy proceedings authority to have an examination, as we say in the English law, de bene esse. I thought that under those circumstances it was a proper amendment for the consideration of the house, but it could be more particularly studied in committee if the Minister of Justice would consent that it go before the committee for study and consideration. It is simply a matter of procedure, not an amendment of substantive law.


Ernest Lapointe: This bill having been printed only
a couple of days I admit that I have not been able to give the matter the consideration it deserves. The Bankruptcy Act was put into our statutes after long consideration by
committees of the house, and every section of it was carefully studied. I am rather reluctant, therefore, to change the act without giving the fullest consideration to the proposed change. However, I will say this to my hon. friend: I admit that the act as it is may in some special cases involve rather a hardship. Under section 128 of the act the debtor is required, within three days of the assignment, to present himself before the official receiver for examination, and that under penalty of imprisonment. I think the ordinary practice is to have this examination at the same time as the debtor presents his assignment to the official receiver. He has to travel some distance, a long distance in some cases, and at considerable expense. In some cases there are not many assets, and even if there are assets the debtor personally has no money. Even with a provision that he should be reimbursed out of the proceeds of the assets he could not go for the examination. On the other hand I am advised by the officers in charge of the administration of the law that they do not know of any case where a man has been imprisoned because he did not, owing to lack of funds, go for his examination. I may say to my hon. friend that those are obstacles, but they were purposely put into the act in 1923 because of the flood of assignments which occurred at that time, especially in rural districts. In my own province it was considered a plague, and those obstacles were placed in the way of these many assignments, which were regarded as a real danger.
Now the question is whether the time has come to remove the obstacles and in what way that shall be done. One method would be to appoint more official receivers. For instance in the province of Quebec there are at present thirteen official receivers and thirty judicial districts. If there were an official receiver in every district there would be thirty instead of thirteen. I am considering the advisability of authorizing the official receiver to appoint a deputy in some cases in other parts of the district. I may say to my hon. friend from Skeena (Mr. Brady) that as far as his province, and I think his district, is concerned, I have come to the conclusion that an official receiver should be appointed at Prince George. I think this would go a long way to remove the difficulties of which my hon. friend complains. The question of distributing the work between the judges of the high court and of county courts is also engaging the attention of the department. As to authorizing a notary public or minor magistrate to do the work which
Bankruptcy Act

is mentioned in the bill, I am not sure that it would be an improvement. However, we are at the present time considering changes to be made to improve the act.
I do not know whether it would be better to send this bill to the committee on banking and commerce-I suppose that committee would be the natural one-or, perhaps, allow it to stand. In the latter case my hon. friend might discuss the matter with me and the officers of my department and we might come to a conclusion that would satisfy him.


Mr. BRADY:: That would be very satisfactory. While the minister was speaking I was thinking that the Yukon, for example, has no official receiver. There may be no bankruptcy cases up there; possibly they settle such cases in their own way. I have never heard of a Yukon bankrupt; apparently he is non-existent, but there are many cases to-day in British Columbia where the creditors do not utilize the Bankruptcy Act, or benefit by it, because of the great outlay involved.


Ernest Lapointe: Stand.
Hon. R. B.. BENNETT (Leader of the Opposition):	The motion for the second
reading has been moved, and the Minister of Jupstice has expressed the opinion of the administration with respect to it. I hardly think the bill could be allowed to stand now; the debate would have to be adjourned. That I think would be the proper procedure. In view of what the minister has said as to the general condition of the law I am sure he will agree that the most we have done thus far this session has been to amend statutes that were consolidated during the last few years and which came into effect in revised form on the first day of this month. This particular statute was one of them. The subject matter here is worthy of the most careful attention on the part of the government, having regard to the size of the territory and the limited number of people in the area affected, and it perhaps would advance the public business if we just allowed this bill to go pro forma to the committee. Then if the minister concludes it will be desirable to adopt this amendment, we will get it off the order paper and advance it that far. Perhaps the minister might be willing to deal with it in that way.


Ernest Lapointe: I hope I shall be able
to agree with all the proposals of my hon. friend as I am pleased to agree with this one.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on banking and commerce.
	.


Mr. STEWART (Leeds):: For a copy of all reports, petitions, correspondence, orders in council, recommendations, communications, memoranda, and other documents in any way relating to the change in the location of the post office at Mallorytown, in the county of Leeds, Ontario.



DALEM LAKE-BOULARDARIE I'OSTMASTERSHIP

Mr. JOHNSTONE:: For a copy of all correspondence, letters, and other documents in connection with the dismissal of Alex. McDonald, Dalem Lake, Bou-lardarie, Cape Breton, from the position of postmaster, and also all similar papers in connection with appointment of his successor.



WESTERN SHORE POST OFFICE

Mr. ERNST:: For a copy of all correspondence, telegrams, letters, and other documents in connection with the removal of the post office at Western Shore in the county of Lunenburg, in the province of Nova Scotia, from the residence of Mr. E. Holman to another part of the district.



CONQUERAI.L BANKS POSTMASTERSHIP

William Gordon Ernst: For a copy of all correspondence, telegrams, letters, and other documents in connection with the dismissal of Mrs. Albert Rafuse from the position of postmistress at Conquerall Banks, Lunenburg County, Nova Scotia, and in connection with the appointment of her successor.



MAHONE BAY-CHURCH LAKE MAIL ROUTE

William Gordon Ernst: For a copy of ail correspondence, telegrams, letters, and other documents in connection with the proposed change of mail route between Mahone Bay and Church Lake, in the county of Lunenburg, Nova Scotia.



RELATIONS WITH SOVIET RUSSIA

Abraham Albert Heaps: For a copy of all correspondence, telegrams, orders in council and other documents, pertaining to the breaking off of relations between Canada and Soviet Russia.


William Lyon Mackenzie King: There is no objection to bringing down this return; but I should mention to my hon. friend that some despatches have passed between the British government and our government, and as is customary in relations between governments,
I should wish to get the consent of the British government in regard to any communications that have come from or gone to that source before laying them on the table.


[Stage Direction]
Motion agreed to.

Chicago Drainage Canal-Mr. Cohan


Charles Hazlitt Cahan: For a return showing: 1. The report of the three Canadian members of the international waterways commission, dated on or about April 25, 1906, recommending the negotiation of a treaty with the United States respecting the international waterways lying along the international boundary between the United States and Canada, and referring to the diversion of
10.000	cubit feet per second by way of the Chicago drainage canal to the Mississippi river.
2.	The joint report of the international waterways commission to the governments of the United States and Canada, dated May 3, 1906, recommending, amongst other things, that a diversion for sanitary purposes not exceeding
10.000	cubic feet per second be authorized for the Chicago drainage canal.
3.	A report, dated January 4, 1907, by the international waterways commission recommending that the government of the United States prohibit the diversion of more than
10.000	cubic feet per second for the Chicago drainage canal.
4.	All reports, correspondence or documents in the possession or under the control of any department of the government of Canada, which would tend to substantiate or to qualify the statement made to the foreign relations committee of the United States Senate, when the waterways treaty of 1909 was under consideration, that the representatives of the government of Canada "consented to leave out of this treaty any reference to the drainage canal, and we are now taking 10,000 cubic feet per second for the drainage canal which really comes out of this lake system."
5.	Copies of all correspondence, reports or documents relating to any protests made by or on behalf of the government of Canada against the diversion of waters from lake Michigan by the sanitary district of Chicago.
He said: The subject of the right of the Chicago sanitary district and of the state of Illinois to divert water at Chicago has been discussed in this house on a number of occasions, and the present Minister of the Interior (Mr. Stewart) made remarks in regard to the matter on March 26, 1924, again on June 3, 1924, and more recently in this house during the session of 1926. On January 25, 1926, tlie Minister of the Interior, in the course of a review of the whole matter, made to the house a formal statement in which he referred to a judgment of the Supreme Court of the United States dated January 5, 1925, restraining the Chicago sanitary district from withdrawing water from lake Michigan through the Chicago drainage canal in excess of the quantity then authorized by the United States Secretary for War. The Minister of the Interior then said:
This judgment-*
Referring to the judgment of the United States federal court.
-recognized for the first time, that the diversion affects and was contrary to Canadian rights under the Boundary Waters treaty of 1909.
I examined that judgment at some length, but I was unable to find in the terms of the judgment any such recognition as suggested by the Minister of the Interior. In any case the injunction was obviated by the fact that the United States Secretary for War, on March 3, 1925, granted a further permit to the Chicago sanitary district to withdraw water up to the quantity then required. The Minister of the Interior on that occasion also referred to a bill then before the United States Senate which "provides for the construction of a nine-foot navigable channel in the Illinois and Mississippi rivers based on the diversion froin lake Michigan through the sanitary district canal of an amount of water not to exceed 10,000 cubic feet per second." The minister continued:
The government is fully alive to the menace of the provisions of this bill to the navigation, power and other interests of the great lakes and St. Lawrence river, and is registering with the United States government a vigorous protest against its passage in so far as it contemplates the withdrawal of water from the great lakes.
It seems to me, Sir, most important in view of subsequent developments that these protests, such as they are, should be laid before the house so that the house may really understand the nature of the position taken by the government as represented by the minister.
On June 7, 1926, the United States Supreme Court referred three suits then pending in the federal courts-in which twelve states appeared as complainants against the state of Illinois and the Chicago sanitary district as defendants, all of which were consolidated and referred-to Charles Evans Hughes, as master, to take the evidence and to report thereon. The appointment of master in the federal courts of the United States, as it is in our own courts, is usually made of an appointee versed in the law, but of some impecunious lawyer who has not very much of a practice to occupy his attention. The appointment of a former secretary of state of the United States, a former governor of the state of New York, and an ex-judge of the supreme court of the United States, seems to suggest that the appointment of Mr. Hughes had political as well as judicial significance.
The prolonged inquiry before Mr. Hughes as special master, which continued from November 8, 1926, to June 23, 1927, was at length completed, and in November, or early in De-

546	COMMONS
Chicago Drainage Canal-Mr. Cahan
cember last, Mr. Hughes filed his report, which seems to be of special interest to this country. In this report Mr. Hughes briefly finds:
That the congress of the United States has power to regulate the Chicago diversion and to determine whether and to what extent it should be permitted;
That congress has by various enactments conferred authority upon the United States Secretary of War to regulate such diversion;
That the permit of the Secretary of War under which such diversion is now being made is valid and effective according to its terms;
That there is, in law and in fact no unlawful or illegal diversion of waters at Chicago.
In other words, in popular newspaper parlance, there is no "Chicago steal" so far as the United States is concerned. This report is satisfactory to this country, I should think, at least in this respect, in that if it is confirmed, as seems likely, it affirms unconditionally that, so far as the United States is concerned, the congress of the United States has exclusive control over this diversion at Chicago. So that so far as Canadian interests are affected thereby, it would seem that the federal government of the United States must accept full responsibility.
Healing with conclusions of fact, that report also affirms what has been the contention made in this house by members of the government, namely, that the effect of a diversion of 8,500 cubic feet per second has been to lower the mean levels of lakes Michigan and Huron six inches, the mean levels of lakes Ontario and Erie approximately five inches, the mean levels of the connecting rivers, bays and harbours, which have the same mean levels as the lakes I have mentioned, to the same extent respectively, and that each additional diversion of 1,500 cubic feet per second would lower the above levels by approximately one inch more; and finally there is the conclusion of fact from the evidence that if this diversion at Chicago were ended, assuming that other diversions remain the same, the mean levels of the lakes and rivers affected by the Chicago diversion would be raised in about five years in the case of lakes Michigan and Huron, and in about one year in the case of lakes Erie and Ontario, to the same levels as they previously were before they had been lowered respectively by the Chicago diversion.
So far the report was well within the bounds of the reference to Mr. Hughes, but in the evidence as submitted to him there were certain reports which had been made by the old international waterways commissionin which the American members and the Canadian

members of that commission had concurred, and which came under review by Mr. Hughes in making his report; and he perhaps goes beyond the scope of his reference, or, at least, the finding which he made in that respect is not binding upon Canada at all events. Mr. Hughes suggests that Canada has no valid ground of complaint under the waterways treaty of 1909, and that, in fact, Canada is now precluded by the conduct and consent of its representatives and by the terms of the waterways treaty of 1909 from making any effective protest against such diversion.
The evidence discloses the following sign,-ficant facts;
For many years prior to 1909, the congress of the United States had under consideration the diversion of 10.000 cubic feet of water per second from lake Michigan into the Illinois river and thence to the Mississippi river for the purposes of the sanitary district of Chicago, and also to provide a connection between the navigation of the great lakes and the Mississippi river and its tributaries.
I shall not review at length in the short time at my diposal the various statutes passed by the congress of the United States under which these diversions were authorized.


Mr. STEWART (Edmonton):: As to the amount of water-


Charles Hazlitt Cahan: I have all the permits here. Permits were granted at various times up to 8,500 cubic feet per second, in addition to about 1,400 or 1,500 cubic feet which had otherwise been diverted.


Richard Bedford Bennett: Not exceeding 10,000 cubic feet in all.


Charles Hazlitt Cahan: Yes. It is about 9,800 cubic feet in all.


Charles A. Stewart: But my hon. friend is not arguing-


Charles Hazlitt Cahan: I am not arguing at all. I am simply making a statement with regard to a prima facie case.


Charles A. Stewart: I just want to get it clear. Do I understand that my hon. friend says that the Hughes judgment suggested that 10,000 cubic feet was actually being diverted under the treaty of 1909?


Charles Hazlitt Cahan: I have not gone that far, and I am not suggesting it. I will tell you in a few moments what he does say. These early statutes to which Mr. Hughes refers in his report were passed by the congress of the United States, some ten years prior to the negotiation of the waterways treaty of 1909. On November 18, 1900, a board of engineers, appointed under the act of congress of March

Chicago Drainage Canal-Mr. Cahan
3, 1899, referred to the drainage canal as of ''sufficient depth and width for any possible requirements of navigation", and reported that "from the west end of this canal the waters of lake Michigan, in a steady flow amounting to from 5,000 to 10,000 cubic feet per second, are discharged into the bed of Des Plaines river and are carried thence down the Illinois river to the Mississippi".
Subsequently further permits were issued, and then we come to the appointment of the first international waterways commission. This commission was formed in pursuance of an act of congress of the United States, known as the River and Harbour Act, of June 13, 1902, and with the permission of the house I would like to place this one clause of that act on Hansard without reading it:
The president of the United States is hereby requested to invite the government of Great Britain to join in the formation of an international commission to be composed of three members from the United States and three who shall represent the interests of the Dominion of Canada whose duty it shall be to investigate and report upon the conditions and uses of the waters adjacent to the boundary lines between the United States and Canada including all of the waters of the lakes and rivers whose natural outlet is by the river St. Lawrence to the Atlantic ocean, also upon the maintenance and regulation of suitable levels and also upon the effect upon the shores of these waters and the structures thereon and upon the interests of navigation by reason of the diversion of these waters from or change in their natural flow and further to report upon the necessary measures to regulate such diversions and to make such recommendations for improvements and regulations as shall best subserve the interests of navigation in said waters.
It provided for a commission on which Canada should 'be represented by three Canadian members to be appointed by the government of Canada, the United States by three American members to be appointed by the government of the United States, who were to form an international commission. These six members were to represent the interests of their respective countries, and it was their duty to investigate and report upon the conditions and uses of the water adjacent to the boundary line between the United States and Canada, including all of the waters of the lakes and rivers whose natural outlet is by the river St. Lawrence into the Atlantic ocean; also upon the maintenance and regulations of suitable levels, and also upon the effect upon the shores of these waters and the structures thereon, and upon the interests of navigation, by reason of the diversion oif these waters from or change in their natural flow, and so on. The Canadian government, of which Sir Wilfrid Laurier was then Prime Minister, accepted' the invitation of the
56103-35J
United States, and by order in council dated April 27, 1923, made provision for Canada making appointees to this commission for the purposes mentioned in the act; but it was not until January, 1905, that the three Canadian members were all actually appointed, and the order in council of the government of Canada, among other things, authorized them to inquire into the levels of lake Huron and lake Erie by the construction of the Chicago drainage canal.
The commission held its first meetings in Toronto on June 14 and 15, 1905. The United states Board of Engineers reported to congress on January 18, 1905, as follows:
The Chicago drainage canal was brought into use in January, 1900. It has not yet been completed to its full capacity as desired. When fully completed it will have a capacity of about
10,000	cubic feet per second flowing at a low velocity. As now constructed it has a depth of about 22 feet and a bottom width in different parts, 110 feet, 160 feet and 202 feet respectively. It constitutes a navigable channel, able to accommodate the largest vessels now navigating the great lakes. It extends from the Chicago river to Lockport, where it discharges into the Des Plaines river. . . In preparing its estimates the board-
That is the United States board-
-has assumed that the full discharge of 10,000 cubic feet per second contemplated in the plans of the sanitary district will eventually be permitted by the Secretary of War.
The effect of this diversion upon the level of the great lakes was even then clearly apparent. In the same report, the United States board of engineers says:
The effect upon the level of lake Michigan of withdrawing 10,000 cubic feet per second for an indefinite period has been the subject of elaborate investigation under the office of the lake survey at Detroit, and the conclusion reached is that the final effect will be to lower the level about six inches.
Which was as subsequently found in the evidence adduced before Mr. Hughes last year. That report was dated December 18, 1905, and on December 29, 1905, the Canadian section of this international waterways commission made its first report Showing that a subcommittee of the commission personally visited the Chicago drainage canal and that the drainage canal was not then completed. Their report continues:	1
The canal is not yet completed. It was designed to take up eventually a volume of 10,000 cubic feet per second. This represents about five per cent of the flow over Niagara falls which is about 222,400 cubic feet per second. The Chicago drainage canal when completed will, according to a calculation furnished by an engineer of the Canadian section of the commission, lower the level of lake Huron by six inches and the level of lake Erie by four and a half inches. But the Chicago drainage canal
548	COMMONS
Chicago Drainage Canal-Mr. Cahan
takes now less than half of the volume originally contemplated. The United States war department in its power of conserviency to protect the navigation in the Chicago river has, December 5, 1901, limited the volume of water which can be taken through it into the Chicago drainage canal, to 250,000 cubic feet per minute throughout the 24 hours of the day which is about 4,166 cubic feet per second. If the original plans of the Chicago drainage canal are carried out. and it seems likely that this will be done, it will eventually take out as above stated, 10,000 cubic feet per second.
Therefore the result of this diversion was well kn own at the time to the American members who made a separate report to their government and to the Canadian members who also made a separate report to their government, both concurring in the facts stated. Then on the 9th of March, 1906, the three representatives of the United States on the international waterways commission in a report to congress recommended legislation authorizing the diversion of 10,000 cubic feet per second through the Chicago drainage canal. Note the time! And on April 25, 1906, the following month, the three Canadian members of this commission recommended to the Canadian government that the proposed diversion at the Niagara river should be limited to 36,000 cubic feet per second on the Canadian side and to 18,000 cubic feet per second on the American side, exclusive of the amount required for domestic uses, saying that the apparent advantages to Canada were more than counterbalanced by the complete diversion of 10,000 cubic feet per second by way of the Chicago drainage carnal to the Mississippi river, and urging that the diversion at Chicago should be limited to the quantity mentioned.
On April 25, 1906, the Canadian members of the international waterways commission also reported to the Canadian government, as follows:
At Chicago the Americans have built a drainage canal which, when in full operation, will use about 10,000 eubie feet of water per second. The quantity of water required for the purposes of a ship canal is comparatively small, but the character of this drainage canal at Chicago is such as to involve a continuous flow of water which will have the effect of lowering lake Michigan by over six inches and lake Erie by four and one-half inches.
Then they go on to say that this water by being diverted can be used to generate some
30.000	horsepower, and they say:
As the diversion from lake Michigan to the Mississippi river is of much more serious character than the temporary diversions from the Niagara river, it is felt that the amount of water to be taken on the American side of the Niagara river should be limited to 18,500 cubic feet per second.

They proceed:
It is exceedingly important, in the interests of navigation both to ourselves and to the people of the United States, that the diversion by way of the Chicago drainage canal should be limited.
Then they proceed-and I will not detain the house by quoting it all:
If our proposals are carried out the diversions will be about as follows:
Diversions on the American side
Per second cubic feet
Niagara falls	 18,500
Chicago drainage	canal.. ..	10,000
Total	 28,500
Diversions on the Canadian side
Per second eubie feet
Niagara falls and on the
Niagara peninsula	 36,000
The Canadian commissioners thereupon proceed to recommend that:
The diversion by the Chicago drainage canal should be limited to the use of not more than
10,000	cubic feet per second, and they also recommend that on the Canadian side at Niagara a diversion for power purposes should be authorized of 36,000 cubic second feet, and on the American side at Niagara only 18,500 cubic second feet.
And the Canadian commissioners add:
This would give an apparent advantage to Canadian interests, but as the diversion is not of serious injury to the falls and does not materially affect the interests of navigation it is more than counterbalanced by the complete diversion of 10,000 cubic feet by way of the Chicago drainage canal to the Mississippi river.
This report, which deals with the question of Canada's receiving compensation in respect of the 10,000 cubic feet per second proposed to be used in the diversion at Chicago, is signed by George C. Gibbons, chairman, Louis Coste and W. F. King, members, and Thomas Cote, secretary of the Canadian section. Then follows in the same year, indeed about eight days later, a joint report from the international waterways commission, including both the American and the Canadian members. That report, submitted to the respective governments, contains the following:
The commission, therefore, recommend that such diversions exclusive of water required for domestic purposes or the service of locks _ in navigation canals be limited on the Canadian side to 36,000 cubic feet per second and on the United States side to 18,500 cubic feet per second (and in addition thereto a diversion for sanitary purposes, not to exceed 10,000 cubic feet per second, be authorized for the Chicago drainage canal) and that a treaty or legislation be had limiting these diversions to the quantities mentioned. The effect of the diversion of water by the Chicago drainage canal
FEBRUARY 16, 1928	54S
Chicago Drainage Canal-Mr. Cahan
upon the general navigation interests of the great Lakes system will be considered in a separate report.
Then on January 4, 1907, the following year, the Canadian members of the international waterways commission reviewed and again reaffirmed their recommendations of April 25, 1906, and also reaffirmed the joint recommendation of the international waterways commission of May 3, 1906, that:
A diversion for sanitary purposes, not to exceed 10.000 cubic second feet, be authorized for the Chicago drainage canal.
That recommendation was signed by the Canadian members, Messrs. George C. Gibbons, chairman, and W. F. King and Louis Coste, members, and Thomas Cote, secretary. They closed their report as follows:
The position at Niagara falls has been dealt with having regard to the exceptional circumstances there existing and taking into consideration the large permanent diversion by way of the Chicago drainage canal.
On January 4, 1907, tlje joint commission also reported to their respective governments. I have not time now to review at length that most extraordinary report, but I merely quote from the summary contained in the report as jointly prepared:
The diversion of 10,000 cubic feet of water per second at Chicago will render practicable a waterway to the Mississippi river fourteen feet deep.
This joint report, in which the Canadian members concurred, after reviewing all the facts, formally recommends:
Careful consideration of all the circumstances leads us to the conclusion that the diversion of
10,000	cubic feet per second through the Chicago river will, with proper treatment of the sewage from areas now sparsely occupied, provide for all the population which will ever be tributary to that river, and that the amount named will therefore suffice for the sanitary purposes of the city for all time. Incidentally, it will provide for the largest navigable waterway from Lake Michigan to the Mississippi river which has been considered by congress.
I wish to put on Hansard their joint recommendation in the form in which it appears:
We therefore recommend that the government of the United States prohibit the diversion of more than 10.000 cubic feet per second for the Chicago drainage canal, all of which is respectfully submitted.
W. F. King, chairman, Canadian Section.
Geo. C. Gibbons, Louis Coste, members, Canadian Section.
O. H. Ernst, Brig.-General U.S. Army, retired. Chairman, American Section.
Geo. Clinton, E. E. Haskel, members, American Section.
Attest: W. Edward Wilson, Secretary, American Section.
Thos. Cote, Secretary, Canadian Section.
On March 9, 1908, the Canadian members of the international waterways commission,
who were then George C. Gibbons, Louis Coste and William J. Stewart, made a supplementary report to the Canadian government reaffirming the recommendation of the joint commission of May 3, 1906, that:
A diversion for sanitary purposes, not to exceed 10,000 cubic feet per second, be authorized for the Chicago drainage canal.
Thereupon the government of Canada, with the full knowledge of the reports cited, began the negotiations with the government of the LTnited States that resulted in the waterways treaty of 1909, which was signed at Washington on January 11, 1909 and subsequently confirmed by this parliament. That treaty was negotiated, as nearly as I can ascertain from a study of the record, by three members of the Canadian government, Hon. Mr. Pugsley, since deceased, Mr. afterwards Sir George Gibbons, also deceased, and the then Minister of Justice, who is now a member of the upper house, Sir Allen Aylesworth. When the matter of the ratification of this treaty came before the house, Mr. Aylesworth, as he was then, said on December 6, 1910:
I take, with each of my colleagues, the fullest responsibility for recommending the acceptance of the treaty which is under consideration.
I quote from page 908 of Hansard of 191011. Sir Wilfrid Laurier, then Prime Minister, said:
I may say it was only after careful and exhaustive consideration on my part that 1 agreed to accept the treaty as it has been written.
The Hon. Elihu Root, who was then Secretary of State for the United States, and who negotiated the treaty on behalf of that country, in submitting the draft treaty to the foreign relations committee of the United States Senate, said.
I have carefully guarded the terms of this treaty in order not to include lake Michigan and not to involve Senator Cullom's constituents in the drainage canal in this treaty in any Way.
Of course, his statements are not binding on us. However, Mr. Root continued:
The great bulk of the water goes on the Canadian side and the waterivays commission that was appointed some time ago to deal with the question of the lake levels reports. I think, that 36,000 feet can be taken out on the Canadian side and 18.500 feet on the American side, without injury to the falls. I thought it wise to follow tlie report of the commission and I put in 1,500 feet in addition to get round numbers.
Then he proceeds:
We are now taking 10,000 cubic feet a second out of lake Michigan at Chicago and I refused to permit them to say anything in the treaty
550	COMMONS
Chicago Drainage Canal-Mr. Cahan
about it. The definition of boundary waters was carefully drawn in order to exclude lake Michigan. ... In the third place-
Referring to the reasons for allowing the United States to divert only 20,000 cubic feet while Canada was allowed 36,000 cubic feet. -they-
That is, the Canadians.
-they consented to leave out of this treaty any reference to the drainage canal and we are now taking 10,000 cubic feet per second for the drainage canal which really comes out of this lake system.
Mr. Hughes, quoting these words, finds that:
The statement of the Secretary of State (Elihu Root) before the foreign relations committee of the Senate, when this treaty was under consideration, shows that it was not intended to cover lake Michigan as a boundary water, or to affect the diversion through the drainage canal at Chicago.
Now, this treaty is still in full force and effect, but it may be rescinded on twelve months written notice by either party to the other. The treaty was negotiated, as stated in its preamble:
To prevent disputes regarding the use of boundary watersand to settle all questions which were then-[DOT]
-pending between the United States and Canada involving the rights, obligations, or interests of either in relation to the other or to the inhabitants of the other along their common frontier.
Then I may go on and show that by the express terms of the treaty lake Michigan was excluded. The preliminary article of the treaty defines "boundary waters" as:
The waters from main shore to main shore of the lakes and rivers and connecting waterways or the portions thereof along which the international boundary between the United States and the Dominion of Canada passes.
Therefore by the express terms of the treaty lake Michigan, through which the boundary line does not pass, was excluded. I think that is common ground. But apparently to place beyond doubt the reservation of lake Michigan from the operation of the waterways treaty, it was inserted in the treaty that the term "boundary waters" shall not include:
Tributary waters which in their natural channels would flow into such lakes, rivers and waterways-
-as are included in the term boundary waters. Thus making it very clear that, although the waters of lake Michigan may be of the same level as lake Huron and may connect with and flow into lake Huron, lake Michigan is nevertheless not included in the term "boundary waters."

Then article 2 of the waterways treaty further expressly reserves to each of the parties:
The exclusive jurisdiction and control over the use and diversion, whether temporary or permanent, of all waters on its own side of the line, which in their natural channels would flow across the boundary or into boundary waters.'
It is suggested that this reservation by the United States in respect of lake Michigan undoubtedly gives them under the treaty the right to control the use and diversion of the waters of lake Michigan. But article 2 of the treaty provides:
But is agreed that any interference with or diversion from their natural channel of such waters on either side of the boundary resulting in any injury on the other side of the boundary shall give rise to the same rights and entitle the injured parties to the same legal remedies as if such injury took place in the country where such diversion or interference occurs.
That is, if Canadians suffer by reason of a diversion of waters on the American side of the boundary they may go into American [DOT]courts for redress and have exactly the same rights as Americans would have in their own courts; but the very fact that congress had authorized the diversion would preclude citizens of the United States from seeking redress in the courts of their own country, and Canadians seeking redress in those courts are placed on the same plane, and therefore would have no right of action.
But the representatives of the United States wdio negotiated this treaty went still further apparently so as to leave no room for doubt, for they inserted the following proviso to article 2:
But this provision-
As to the right to seek redress in the counts. -shall not apply to cases already existing, or to cases expressly covered by special agreement between the parties hereto.
And it is suggested that the waterways treaty therefore expressly reserves cases of diversion of water then existing. Chicago was then diverting as an actual fact something like 5,000 cubic feet per second-they claim more, but at least 5,000. And the treaty also withdraws from the jurisdiction of the courts those cases which are covered by special agreement. I am not stating that it is incontrovertible, but prima facie the suggestion is that in so far as the 5,000 cubic feet per second diversion is concerned, it appears to have been guarded against in that clause which I have cited; and, in so far as the full 10,000 cubic feet per second diversion is concerned, it is also guarded against in the same clause of the treaty, if there was.

Chicago Drainage Canal-Mr. Stewart (Edmonton)
an agreement between the United States and Canada to carry out the joint report of the international joint commission, which I have quoted, that Chicago should be authorized to divert 10,000 cubic second feet. But if these contentions of the United States are correct-and apparently there is a colour of right in them-then from the Canadian point of view there is no semblance of a " steal," nor so far as the federal government of the United States is concerned. Newspapers on each side of politics and members on both sides of this house have during the last five or six years frequently referred to the diversion at Chicago as an illegal act of the United States, or of the state government of Illinois, or of the Chicago sanitary district-reference is usually made to the illegal act of the United States authorities, and this diversion is frequently characterized as a "steal".
Now, if Canada acquiesced in the diversion of 10,000 cubic second feet at Chicago, if, knowing all the facts, Canada with open eyes received compensation therefor in the shape of this extra 16,000 cubic second feet for use at Niagara falls, there is strong ground for the conclusion that it has made an agreement with the United States with respect thereto. I say there is a prima facie case, but in view of the relations between this country and the United States and in view of the documents which I have cited, I think the time has come when the government should, through the Prime Minister or one of his ministers, thoroughly consider this matter and state to this house and to the whole country what is the position of Canada in respect thereof. Those public documents are now known in the United States; I have seen within the last two or three days a number of them republished in American papers. If we have acquiesced in this diversion, if we have accepted compensation therefor; the honour and good faith of this country is involved, and we cannot afford to repudiate the agreement made in our dealings with a great neighbour such as the United States. If, on the other hand, there are any grounds available in the diplomatic correspondence and in the reports of those who negotiated the treaty, for contending that we have not acquiesced as the American authorities believe we have, then it is due to parliament and the people of this country that the real facts should be disclosed. It is on that ground that I urge the supreme importance of having all available documents relating to the Chicago diversion presented to the
house so that we may be able to form a clear and intelligent opinion with respect thereto.


Charles A. Stewart: Mr. Speaker, I think the house is indebted to my hon. friend for his very clear and lucid speech in connection with the transactions that took place leading up to the treaty of 1909. I was not aware, however, that all of the documents in connection wfith the negotiations had not been brought down and placed in the custody of parliament. I wish bo assure him here and now that any documents that have not been brought down will be, and that we shall cheerfully acquiesce in his request for production of all the documents contained in the order for return.
I am not going to attempt in a detailed way to make a presentation to the house or to review many of the statements made by my hon. friend, but I am going to take some exceptions to the conclusions he arrives at. Dealing with the negotiations prior to 1909, I think it is within the knowledge of everyone that those negotiations were carried on by the accredited representatives of the Canadian government and of the United States government, and it is quite probable and within the 'bounds of reason, I think, that those accredited representatives wrould from time to time make reports to their respective governments upon conditions as they found them. It is quite true that as far back as the early forties Chicago had begun diversions from lake Michigan, and naturally in these reports the Canadian commissioners assumed that lake Michigan was boundary water, as I think we may very well assume still. My contention, as one humble member of this house, has always been that if the outflow from lake Michigan is into the great lakes system then of necessity it must be part of the boundary waters. I think that contention-if I may say so without going into detail, and I do not propose to do so to-night-undoubtedly was in the minds of the Canadian members of the commission prior to 1909, and all the documents concerned are on file here as reports to the Canadian government. No one will seek to deny that. But may I say this, and I am in no way refuting the argument of my hon. friend: at the time the treaty of 1909 was inaugurated all this knowledge was before the negotiators, and the American negotiators refused to allow lake Michigan to be included in the boundary waters, and it is not so included in the treaty of 1909. Undoubtedly one of the reasons was the very considerable
552	COMMONS
Chicago Drainage Canal-Mr. Stewart (Edmonton)
diversion that was in effect at Chicago. My bon. friend has argued, and it has been argued specifically before, that the diversion authorized in 1909 was exactly 4,167 feet. My hon. friend may argue that compensation was given us at Niagara by the diversion for the Welland canal.


Charles Hazlitt Cahan: I am not arguing.


Charles A. Stewart: My hon.
friend presents that aspect of the case-may I put the matter in that way?-and infers that because the negotiations have taken place, because these reports and documents were in the hands of the government, we are in some sense committed to a diversion at Chicago of 10,000 cubic feet per second.


Richard Bedford Bennett: Are we not?


Charles A. Stewart: If my hon friend will allow me to conclude my argument I think I will show him that we are not committed to that extent. My hon. friends opposite will admit that reports of various kinds may be made in connection with any dispute, or for the purpose of settling the negotiations in connection with what may become a dispute. Well, the documents signed and sealed indicate in no uncertain terms what took place and what was in the minds of the negotiators at that time. I am not going to deny that perhaps the Canadian negotiators felt that to a certain extent the diversion at Chicago was not warranted; but I do say that it is not part of that treaty for the specific reason that lake Michigan was left out of the award altogether. It is not part of it, nor was the Chicago drainage, and no one will argue that we have any reference to 10,000 cubic feet in that treaty.


Charles Hazlitt Cahan: I thought so.


Charles A. Stewart: I did not think from my hon. friend's argument that he did.


Charles Hazlitt Cahan: I find it possible to believe that the diversion, if it was agreed to between the parties up to that time, was practically confirmed by the treaty.


Charles A. Stewart: I am arguing against the inference that because of the statements and reports made prior to the treaty the Canadian government in some way were committed to a diversion of 10,000 cubic feet. I say now, as I have said before, that 4,167 cubic feet was the diversion permitted by the Secretary of War. We are glad to know now that we have not to deal in this matter with the city of Chicago or with the state of Illinois, but with congress itself.
TMr. C. A. Stewart.]


Mr. GEARY:: Is it the contention of the minister that the diversion to the extent of 4,167 cubic feet was authorized by the treaty of 1909?


Charles A. Stewart: I am not arguing that at all. .


George Reginald Geary: I am just asking for the sake of clarity, that is all.


Charles A. Stewart: If we are committed to anything-and we are not committed under the treaty to any diversion at Chicago, as I understand it-we are committed to an ordeT signed by the Secretary of War for the diversion of 4,167 feet at Chicago. But I do not think we are committed to that, because it is not embodied in the treaty, or in any treaty with the Canadian government that I know of. Surely if it had been the clear intention of the Canadian government to agree to the diversion something would have been said about it in the treaty. My contention is that these reports were for the purpose of leading up to the negotiation of a treaty. As there is no reference to it in the treaty which was concluded between the government of the United States and the government of Canada, we are not committed to it except by inference. Governments cannot escape the responsibility of what is a matter of record, but I reiterate that inasmuch as the diversion is not part or parcel of that treaty-it is not mentioned in any treaty to my knowledge-then the government of Canada are not committed to it.
I do not know that there is very much more to say. So far as I am concerned-and I want to have this clear-I make this statement on my own responsibility. Of course I am not without the knowledge that I am speaking on behalf of the government, but I am speaking on my own responsibility in this connection. I am quite aware that the American government-perhaps I should not say the American government but those who represent the Chicago interests and are desirous of continuing this diversion-will continue to urge that Canada is committed by the reports of the men who acted in her behalf. I claim, however, that as these reports were not acted upon the government cannot be committed to them.
May I say further that I do not think it is the intention of congress to pres for the diversion of 10,000 feet at Chicago? I will admit this, and admit it very frankly, having some knowledge of these negotiations, that we have done nothing further than protest against this continued diversion and the attempt to increase it, believing that the in-

Chicago Drainage Canal-Mr. Geary
terested states surrounding Illinois and the city of Chicago, some twelve or thirteen in number, who are fighting this diversion with the desire to have it reduced, are bringing far more pressure upon the American government in this respect than perhaps we would be able to do. We are interested in every hearing, we are interested in every protest. We have maintained steadily, ever since I have come to Ottawa and became a member of this government, that we are desirous that congress should see a great reduction in this diversion and that the difference of six inches in the levels of the international waters-particularly in the St. Lawrence river, which means so much to navigation-will be restored by the return of at least a very large proportion of the nine or ten thousand cubic feet per second that are now passing through the drainage canal at Chicago.
My hon. friend mentioned one other very important point, namely, that the treaty can be terminated in one year on notice. The treaty was not intended in any sense to be a continuous document, to be in force for all time; it was intended to meet the urgencies of the case at the time it was made.


Charles Hazlitt Cahan: Does the minister think the termination of the treaty would terminate those provisions of it which deal with the exclusion of lake Michigan?


Charles A. Stewart: I am well
aware that governments are in honour bound to keep their word and I would not seek for a single moment to evade responsibility in that particular. But my hon. friend knows full well that many questions which will arise in connection with the adjustment of the international waterways will perhaps present a way by which redress can be had for the diversion at Chicago. I agree with my hon. friend it is regrettable that our newspapers have to some extent misrepresented the situation. This does not tend to improve conditions for a settlement of difficult matters of this kind-and we have difficult matters to deal with in connection with our international waterways. It does not tend to improve the relationship between foreign countries and ourselves. But at the same time I do not think for a single moment that the people of Canada, through their government by any action on their part, are committed to the diversion of ten thousand cubic feet per second in Chicago. That is the position I take and that is all I have to say on the matter at this time.


George Reginald Geary: Mr. Speaker, I have listened with a great deal of
interest to the presentations we have heard from both the hon. member for St. Lawrence-St. George (Mr. Cahan), who sits in front of me, and the Minister of the Interior (Mr. Stewart). I trust that what the minister has said is right. Nothing to me would appear to be more disastrous to the interests of Canada in the matter of navigation than that the government of the late Sir Wilfrid Laurier in 1909 should have in some way or another committed this Dominion to the loss consequent upon a diversion of ten thousand cubic second feet at Chicago. The Minister of the Interior has laid some stress upon the termination clause in the treaty, but at the moment I fail to see what satisfaction we can get from that. The whole quantity of water diverted at Niagara falls is in use in a very extensive way. It is devoted, I take it, largely to the purposes of the Hydro Electric Power Commission oi Ontario and works are constructed there to such an extent and the use of water has become such a matter of common everyday life of the people of the province that it is impossible for us to contemplate any restoration of the 36,000 feet or the 18,000 feet over and above the 20,000 feet which were arranged to be given to United States interests. Moreover if we could and should terminate the treaty under the provisions, we are still, according to the statement of the Minister of the Interior, without any recourse as regards the diversion at Chicago, because, from the minister's statement. I take it he is of opinion that that diversion not having been mentioned in the treaty, it is of course not covered by the treaty. Surely then it would not be affected by the termination of a treaty which does not cover it.
I am very much interested, as all people have a right to be interested, in the attitude of the government with respect to these negotiations. They have dragged along for a long time. We have had ever present before us the danger of this diversion, and when the diversion is completed to the full 10,000 cubic feet per second shipping will be very seriously damaged. As a matter of fact it is very seriously damaged to-day and men engaged in the shipping business in the great lakes estimate the loss of revenue in lack of draught at many millions of dollars per annum. If we are to go through with the St. Lawrence waterway, extending a route in one way or another-and I do not want to discuss the method by which that may be done or what arrangements may be come to in regard to it- if we are to realize a dream that many of us have that some day there will be a through waterway from the outer St. Lawrence to the
554	COMMONS
Chicago Drainage Canal-Mr. Geary
great lakes, this question of the diversion at Chicago assumes a magnitude that we can hardly over-estimate. To my mind, it is almost the first step to be taken in regard to that through waterway. If we are to have the lake level restored and made permanent as far as we can, we can do so only by having this question of the diversion of water at Chicago settled.
I have yet to hear of any progress being made by the Dominion of Canada in that regard. So far as my recollection goes of the statements that have been made by the minister on behalf of the government, no one in this Dominion can be seized of the position that Canada is taking at present, how far she has gone and what are the prospects, whether by pressure, negotiation or otherwise, of this Dominion contributing to the shutting off of this diversion. True it is, that the lake cities, Cleveland, Detroit, Toledo, Milwaukee and other United States cities along the front, are as vitally interested in this as are we of the Dominion of Canada, and for the very same reasons, because the harbours, while they are not passing out of existence, are very seriously affected and the draught of lake vessels, as I intimated a little while ago, has suffered to such an extent that many millions of dollars in carriage are being lost annually.


Charles A. Stewart: May I interject one thing that perhaps I should have said before? My hon. friend is speaking of no progress being made.


George Reginald Geary: I am.


Charles A. Stewart: The recent
order of the Secretary of War granting a
diversion of 8,500 cubic feet provides that there shall be a reduction annually up to 1935 and that the diversion at that time shall not be more than 4,167 cubic feet. I should have mentioned that.


George Reginald Geary: That is conditional on the
construction of certain disposal works by the sanitary district of Chicago. The diversion at Chicago may be restricted in 1934 to 7,500 cubic feet per second, but that is more than the Dominion of Canada and our friends on the opposite side of the great lakes can stand. The waterborne commerce of the country cannot stand a diversion to that extent. What I am urging upon the government is a more strenuous opposition, some results that can be laid before this house, something to prove to the people of Canada that the government is up and doing, is alive to the situation and is making some progress in its representations. We have had suggestions made that the gov-

eminent of Great Britain should be called upon to intervene in this matter, and that the government of the Dominion of Canada should make definite representation.
We have an embassy at Washington. It would be interesting to know how far that embassy has been entrusted with the work of negotiation, what it is doing, and whether or not the people of this country can hope with some certainty that this government will be so active in the opposition to this diversion as to ensure some success in that opposition. That I am, I say with all frankness, Mr. Speaker, unable to accept as proved for the moment. Last session and the session before we heard from the minister and from the other side of the house often enough that they were active in the matter, but what has been done, what result has been accomplished, and how far the Dominion of Canada has been able to assert its rights, I for one do not know, and I should be glad to know.
I trust that the prima facie case outlined so ably by the hon. member for St. Lawrence-St. George (Mr. Cahan) is merely a prima facie case, that there is no substance and real strength in it. I hope, and I believe he hopes and wishes just as much as I do, that the Minister of the Interior (Mr. Stewart) is right, but the fact remains that Mr. Hughes, the master, in his decision lately handed down, which I should say has a very good chance of being sustained by the supreme court of the United States when it comes before it, does set out-it may be obiter, it may be something with which the report had nothing to do-the facts that my hon. friend from St. Lawrence-St. George has set out, and evidently on behalf of the United States relies upon that position.
Perhaps it is true, I hope it is true, that the country has not been committed in any way by the reports made by our Canadian members of the international waterways commission. There has been no formal agreement so far as I know entered into between the two countries, but if my hon. friend the minister is forced to admit that the "cases now existing" refers to the diversion of 4,167 cubic feet then existing, it seems very difficult not to understand the remaining language of the clause as applying to a diversion to be extended in the future. The language is almost express, and I trust that the government will use every effort to sustain the position the minister has taken in urging that the government is not bound beyond the strict letter of that treaty, whatever it may be. I am sure he will do that.

Chicago Drainage Canal-Mr. Bennett
Again 1 would say that if the government would convey to this house the assurance that it is using its best efforts and is getting some results in its protest against the diversion of water in Chicago, I am sure the country would be very much relieved. At present the matter is in great uncertainty, and the country is fearful of the outcome. There is no matter before the house at the present moment that is of more importance to this Dominion in practical affairs than this question of the depth of our great waterways in the great lakes and down the St. Lawrence river.


Richard Bedford Bennett: I think there are few questions
of more practical importance that can engage the attention of this house than the subject matter of the1 motion which has been made by the hon. member for St. Lawrence-St. George (Mr. Gahan). It is quite clear that the' American attitude towards this question, as expressed in their public journals during the last few weeks, is that by negotiations which took place between the representatives of the government of Canada and representatives of the United States, the Chicago sanitary canal commissioners acquired certain rights-to divert not exceeding 10,000 cubic second-feet of water from lake Michigan for sanitary purposes and power. That in itself is a proposition to which this country at the present moment is or is not bound. Whether we are bound or not depends largely upon the construction to be placed upon large numbers of documents and papers, including correspondence that has passed between the two governments, and reports that were made by certain Canadian commissioners in connection with these matters.
I find by looking at Hansard of 1909 that it is abundantly clear that the government of that day took the view that they were bound to negotiate a treaty with the United States almost in the terms in which the treaty was finally submitted for consideration. In column 867 of the Hansard of 1910, when the waterways treaty came up for consideration, the late Hon. William Pugsley, speaking for the government, discussed the proposition of international law upon which the United States government relied. He made it abundantly clear that while those propositions did not commend themselves to him as a lawyer, they were propositions which unfortunately he and others concluded they were bound to accept. I do submit that their acceptance of those propositions of international law, which are not usually accepted by nations as binding but represent a new doctrine set up
by the United States; propositions which Mr. Borden, now Sir Robert Borden, then leading the opposition, opposed and stated he and those associated with him were not prepared to accept, but which Mr. Pugsley, Sir Allen Aylesworth and finally Sir Wilfrid Laurier himself after the discussion had taken place for some hours accepted; for Sir Wilfrid rose in his place and indicated, in effect, that because of our nearness to the United States and because of their general position of influence and power we were acceding to their views-the acceptance of these propositions, I say, has greatly embarrassed this country and is the source and foundation of our present troubles. I cannot think that in this day at least one would accept such propositions as easily as they were then accepted.
I refer hon. members of this house to the discussions that took place in 1909, because I take it there is not a member of this house that does not realize his great responsibility in connection with this matter. Any hon. member who will be good enough to read what I shall not trouble the house to-night to read, the long series of speeches that were made with respect to this matter, will have, I submit, a much clearer appreciation of the situation than he now has.
I have observed in some quarters a tendency to attach blame to the British government in connection with the negotiation of this treaty. The treaty itself, which is found in the statutes of 1911, pages 245 and onward, is signed by the late Lord Bryce as the plenipotentiary acting on behalf of his majesty, and by Mr. Root on behalf of the United States of America. When that treaty came before parliament for consideration, Mr. J. D. Reid, now Senator Reid, was very anxious to ascertain to what extent the Canadian government was acting in this matter. He asked the question as to who was responsible for the treaty, and at column 9183 of the Hansard of 1911 Mr. Pugsley answered in these words the question that was put to him:
The interests of the Canadian government were looked after by Mr. Gibbons, the chairman of the international waterways commission, who was constantly in conference with the British ambassador, and who was assisted by Dr. King and Mr. Campbell, both of the Department of the Interior. On different occasions I went to Washington to render what assistance I could, and the Minister of Justice (Sir Allen Aylesworth) also went to render assistance at one stage in the negotiations.
Mr. Reid continues to put questions; at column 91S4 he asks:
Then the negotiation of this treaty was practically delegated to the Minister of Public
S56	COMMONS
Chicago Drainage Canal-Mr. Bennett
Works and the Minister of Justice on behalf of Canada, and they are responsible for the treaty being in its present shape.
To which Mr. Pugsley answers:
The whole government is responsible.
So it is abundantly clear that the responsibility for this treaty and for all that is involved with it rests upon the Liberal administration of that day. I do not say that in the sense of endeavouring to make party capital against the Liberal administration, but I do say that any effort that may be made to divert responsibility from that government to the British plenipotentiary who negotiated the treaty must fail in view of the statements made at that time to the House of Commons by Mr. Pugsley, the minister in charge, when he was submitting the treaty to the house for ratification.
Further, it will be found that in the waterways treaty itself there is a distinct reservation of the rights of the United States with respect to the waters in lake Michigan. That treaty dealt with international problems, with international waterways, with international boundaries, and there was a special reservation of the rights of the United States with respect to its own waters, on the one hand, and with respect to Canadian waters that were solely the property of Canada, on the other. The result is that lake Michigan, which is not a boundary water and not an international waterway, as is lake Superior, between the United States and Canada, was, as Mr. Root pointed out in the Senate, specifically reserved in terms from the operation of the treaty, and so it is that by our acceptance of the United States claim under this doctrine of international law, to which Sir Robert Borden objected and to which Sir Allen Avlesworth and Sir Wilfrid Laurier agreed-the claim that they have the sole right through their congress to license the use of the waters from lake Michigan, it not being an international waterway-by our government's acceptance of that doubtful and in my judgment erroneous proposition of international law this country now finds itself in the position in which it is, despite as I have said, the objections made by Sir Robert Borden, Mr. Magrath, Colonel Currie, then member for Simeoe, and others who had given much consideration to the matter. It is in my judgment therefore important that all these documents that touch on the matter, that will in any sense throw light in any way upon the questions involved as to the application of this new principle of international law set up by the United States with Mexico in the first instance, should be laid on the table. The attorney general of the United 
States set up certain principles of doubtful practice in regard to international law in a dispute with Mexico in respect of the Rio Grande river. The government of the United States endeavoured to assert the same principle against this country with respect bo lake Michigan. When Sir Robert Borden protested, the final answer was that "with our rich and powerful neighbour we are practically bound to do as they suggest, and we recognize that they can formulate new principles of international law." Against that proposition in this day and age I protest.
I might refer to something in connection with our own Alaska boundary arbitration, which occurred in the life of the late President Roosevelt-and I say that the Canadian parliament should protest against the application of such a new principle of alleged international law. That is a question which I think this house should thoroughly consider before it permits itself to be further drawn into the acceptance of a principle, set up by one nation only as a sound principle of international law, that has not the support or acceptance of the nations of the world. When Sir Wilfrid Laurier was confronted with the American proposition he said that the United States have always treated us very fairly and decently, and while he might have quoted Vatell on the rights of nations in reference to this matter, he thought it better to deal with it in the manner I have indicated. I submit on these facts that every possible scrap of paper that can have any bearing upon this matter should be laid upon the table so that the House of Commons of Canada may be able to determine whether they are bound to accept a new doctrine of alleged international law, which through ignorance has been forced upon us. We should be in a position to determine whether this country is bound to accept the proposition that the congress of the United States can validly authorize a license to the Chicago sanitary commission to divert 10,000 cubic second-feet of water from lake Michigan regardless of the effect upon the user by Canadians of the international waters of lakes Superior, Ontario and Erie or of the St. Lawrence river.
I think the matter has now reached a point where our position is one of great difficulty.
I learned last year that when these hearings were being held, when former Justice Hughes was receiving testimony with respect to the diversion of water by the sanitary district of Chicago and the protests of the states were being heard, a young lawyer was sent from Canada to Chicago to watch the proceedings on behalf of Canada. He went to the hear-

Chicago Drainage Canal-Mr. Bennett
mg, sat there a while, went away, and came back in the afternoon. I submit that the government is not doing its fair duty to the people of Canada in dealing with the matter in this way. I say it in all seriousness, and if we on this side of the house can render any assistance in making the situation clearer and enable the government to uphold the position of our country with more strength than, has been done, we shall be glad indeed to do so. I do not regard it as being other than a matter of first rate importance, from the standpoint of our rights, at least to have the level of lakes and rivers which are admittedly international protected from being lowered by the user of water by a country which contends that the whole of the water of lake Michigan belongs to it, that it has the right by authority of congress to divert as much water as it) pleases from the lake regardless of the effect upon its neighbour. It is that doctrine that Sir Robert Borden assailed, and I submit it is unfortunately that doctrine that is recognized in the treaty that followed. That false doctrine was asserted in 1909, and finds expression in the treaty of 1911.
That is the position of the matter, and nothing can be said to change the essential facts. I cannot think the government will permit the present situation to be much longer continued.


Charles A. Stewart: Is my hon. friend referring to the continuance from 1911?


Richard Bedford Bennett: Under article 2 and
other articles of the treaty it may be fairly inferred that the United States wall not permit the waters of lake Michigan to become the subject matter of a treaty, on the grounds that these waters are theirs and theirs only, and that they only have the right to deal with them. They contend that they can use the waters of lake Michigan as they please and that the question whether the waters of other lakes and rivers are thereby lowered is not a matter in which Canada has any concern. It may not, perhaps, be improper to recall the fact that these waterways agreements to which attention has been directed- I have reference to the treaty of 1909-were discussed in the house in that year. The treaty of 1909 you will find as I have said at page 245 and following pages of the statutes of 1911, and the heading reads as follows: "Treaty with the United States relating to boundary waters and questions arising along the boundary between Canada and the United States, signed at Washington, January 11, 1909." The treaty was not ratified in that
year; for it will be recalled that when the treaty was in the Senate of the United States one of the senators had certain amendments made to the resolution of ratification, and it was not until 1911 that it was adopted by this parliament. It will be observed that the date on which the act of ratification was assented to is May 19, 1911-chapter 28. At that time certain other negotiations were pending of a trade character between the two countries. You will find in Hansard for that year the protests made by those who voiced opposition to the treaty. But the treaty was ratified by this parliament. We cannot blame England for the bargain that was made; Mr. Pugsley, speaking for the government. stated in parliament that the government of that day was responsible for the treaty, as I have already read to the house. Under those circumstances, facing these facts, I submit we should look at this matter as one in respect to which it might well be said that much W'ater has flowed over the dam. The facts cannot be blinked or overlooked; and it is our duty, by the most careful examination of every scintilla of evidence-not next year or the year following, but now-to protect the rights of the people of this country in the waters of the lakes to which I have alluded in consequence of the diversion of water from lake Michigan.


Charles A. Stewart: As a matter
of record it would be interesting for the hon. member to tell us where he gets his inference that we are committed to the Chicago drainage scheme, inasmuch as lake Michigan was withdrawn altogether from the treaty of 1909.


Richard Bedford Bennett: So far as that is concerned, all I can say is to repeat that the United States authorities refused absolutely to bring lake Michigan into the treaty. They contended, by the application of this doctrine of doubtful international law to which I have alluded, that they and they alone had the right to license the diversion of water out of that national lake and that it was none of the business of the people of Canada what happened in consequence. The United States were looking after their affairs and we might look after ours, and in that view apparently we acquiesced. That, briefly, conveys an idea of the attitude they have taken, and if there is any evidence needed to support this statement as to their general view on such matter I would refer hon. gentlemen to the life of the late Theodore Roosevelt by Lord Charnwood, in his reference to the Alaska boundary question. It will be remembered that a commission of six considered the prob-
558	COMMONS
Chicago Drainage Canal-Mr. Bennett
lem that developed in that connection, and it is interesting to read what Lord Chamwood says. At page 131 we read:
When the new commission was to meet, Roosevelt took a step characteristically drastic and characteristically gentle in manner, to make a miscarriage unlikely-or in other words to prevent any influence that might make the Lord Chief Justice vote wrong. Avoiding the offensiveness of any diplomatic representation, he wrote to a valued American friend of his own and of the British statesmen concerned, and asked to have his real determination made known to them in friendly conversation. It was, he said, only his "very earnest desire to get on well with England" which had made him consent to this second commission. If it failed, he shoidd take measures which would make arbitration quite impossible, and use the troops (which in fact he had sent to Alaska to keep order) to "run the line as we desire it, without any further regard to the attitude of England and Canada. . . If," he said, "I paid regard to mere abstract right, that is the position that I ought to take anyhow; I have not taken it, because I wish to exhaust every effort to have the affair settled peacefully and with due regard to England's dignity." This step of his was of course not publicly known till long afterward.
Lord Charnwood expresses the opinion that President Roosevelt was justified in making his views known to the British foreign Secretary. English authorities declare that the Lord Chief Justice was not advised of the message. Be that as it may, we have here a doubtful doctrine of international law apparently assented to by the Canadian government of the day in 1911, for the very same reasons, I suppose, which Lord Charnwood discloses as having actuated Mr. Roosevelt. The time has come, surely, when we should stand by the principles of international law and insist upon their being observed between nations. We talk glibly about the peaceful relations that exist to-day, but the real situation is as has been fully disclosed to-night. And this is why the question is brought to the attention of the house at this time. We should no longer permit the matter to drag from day to day and, by acquiescence, have it inferred that we have agreed to the contention made by our powerful neighbour. Might and power are not to be the determining factors where our rights are at stake. No one nation, however rich and powerful it may be, has the right to take the attitude that international law consists in the extent to which it is able by force to carry its will into effect. I submit, therefore, that every scrap of evidence bearing on the matter should be laid upon the table at the earliest possible moment, in order that the house may consider the facts affecting the rights of Canadians who use these lakes, which rights have been impaired by the license granted by the United States Secretary of 
War, under authority of an act of congress. These rights I trust we have not lost, and for that reason the present motion should be adopted.


William Lyon Mackenzie King: To the purposes of the
motion as set forth in its text, no exception whatever can be taken. I agree entirely with the mover of the resolution (Mr. Cahan), and as well with the leader of the opposition (Mr. Bennett), that it is wholly in the interests of parliament to have before it all the documents that have any bearing on the question of the diversion of water at Chicago, and the government will be only too ready to see that documents not already in the possession of the members of this house, if there be such, shall be laid on the table in accordance with the request made by this order. I am inclined to think that all the documents mentioned in the motion are already in the possession of such hon. members as are interested in the question. Indeed, they must be more or less of a public character cr my hon. friend could not have made the references to them that he has done in his speech to-night. Let me say further that I am 'in entire accord with the leader of the opposition when he says, with his great skill, that, if there is a doubtful principle of international law being enunciated by the United States, strong exception should be taken to it by this parliament and by the people of Canada. On behalf of the government I desire to join with him in opposing any principle of international law which is not fully recognised in British practice and procedure.


Richard Bedford Bennett: International practice.


William Lyon Mackenzie King: It does appear to me, listening to the discussion this evening, that hon. gentlemen opposite have had in' mind some purpose other than that of merely procuring the documents requested in the motion with an object of strengthening the position of Canada in a matter of international negotiation. Perhaps I might present the matter in this wise: If there is a weak spot in Canada's contention-a weak spot arising out of negotiations that took place some twenty years ago-is this the time to expose that spot, seeing that we are now seeking to effect a satisfactory adjustment of the differences that call for settlement? If there is a weak spot in Canada's case with respect to the diversion of water at Chicago, is this the place to furnish arguments to those in the United States who are doing their utmost to defeat Canada's contention in this matter?

Chicago Drainage Canal-Mr. Mackenzie King


Richard Bedford Bennett: What I said was that
in the United States press these arguments were set forth. In this building yesterday I saw a magazine, published by a gentleman named Bede, I think, which contained all the essential facts that have been advanced.


William Lyon Mackenzie King: Yes, and in the press of the United States to-morrow all the arguments that are presented by hon. gentlemen here to-night will be cited against Canada as the opinion of the Conservative party in this country in a matter of serious international negotiations now pending. That is the objection I take to the present discussion. I do not take exception to the motion which my hon friend opposite has moved, but to the argument he has presented to the house and in which he has been supported by his hon. leader-an argument which, I am sure, everyone in the United States interested in maintaining the diversion at Chicago will be only too ready to quote sentence by sentence, paragraph by paragraph, to its conclusion.
There is one other remark on the part of my hon. friend to which I must take exception. The leader of the opposition alluded to a possible accusation of the British government touching the negotiations of 1909-11. I would ask my hon. friend this question: Has he heard anyone make a concrete or specific reference to any dereliction of duty on the part of British negotiators respecting the question of a diversion of water at Chicago? I have never heard any suggestion of that nature, at least from this side.


Richard Bedford Bennett: I did not say in this
house. It has been freely alleged, however, that this is another of the British treaties in the category of the Alaskan award.


William Lyon Mackenzie King: I do not agree with my hon. friend, and I doubt very much whether he can cite any reputable authority as the source of that allegation.


Richard Bedford Bennett: I have heard it
frequently.


Mr MACKENZIE KING:: I gathered
from the remarks of my hon. friend that in his opinion, in reference to another matter of international negotiation, namely, the Alaskan award, which he has just mentioned, there was room for criticism of the management of that arbitration on the part at least of one who was acting at the instance of the British government.


Richard Bedford Bennett: That is denied.


William Lyon Mackenzie King: But my hon.
friend's remarks to-night and the quotations which he gave left ample room for an inference such as I am drawing at the moment as to what was in his mind at the time.
May I say, Mr. Speaker, with respect to the position of Canada in protesting and presenting argument against the diversion at Chicago, that the Canadian position has been strongly maintained by the present government ever since it came into office. It has been mentioned by other speakers to-night that for every interest affected on this side of the international boundary corresponding interests have been affected on the other side. My hon. friend from South Toronto (Mr. Geary) gave a list of great communities on the United States side that were adversely affected by the diversion of water at Chicago, and be made it apparent to the house that so far as influence and power go, if they are to be judged by the number of persons affected and the size of the communities, the communities in the United States adversely affected by the Chicago diversion are larger in number and probably have larger interests at stake than have the communities on this side.	If that is the
case, is it not clear to everyone that in relation to the United States government in the states bordering along the international waters the states and interests affected in the United States are themselves doing all that possibly can be done to see that their interests, which are similar to ours, are duly and fully protected. I ask the house, if a like situation presented itself in Canada, and the people of Ontario and Quebec were doing their utmost with the federal government here to maintain their position, would hon. members think the position of those two provinces would be materially improved if the United States forced its way into the situation, other than by supporting in the strongest possible degree what was being done by others similarly affected in this country?


Mr. CLARK:: Is that the reason why this government has done nothing?


William Lyon Mackenzie King: I would say
to my hon. friend that comment of that character is not argument.


John Arthur Clark: I am asking the question.


William Lyon Mackenzie King: It is not even a question. If my hon. friend had been asking a question I should have been pleased to answer it. It is comment of a character that has no application whatever, because earlier in the course-


John Arthur Clark: Has the Prime Minister
any evidence to offer that anything has been done?
5S0	COMMONS
Chicago Drainage Canal-Mr. Cahan


William Lyon Mackenzie King: I said to my hon. friend-and he was looking at me when I made the remark-


John Arthur Clark: I heard it.


William Lyon Mackenzie King: The fact that he heard it will convince him that his question is utterly futile, and nothing but an interruption.


John Arthur Clark: I did not wish to interrupt
the Prime Minister. I think there is a doubt in the minds of the people of the country that the government has done anything, and I am asking if the Prime Minister has any evidence to offer us that anything has been done.


William Lyon Mackenzie King: If I say to
my hon. friend that the government has evidence, will he accept my word for it? I will ask him to answer that question. Now, I should like to tell him that the government has evidence, documentary evidence, which will be produced at the right time and in the right place. The government has not been negligent or indifferent or apathetic in this matter. We recognize that it is a great problem which affects the interests of Canada as a whole, and we have been watching closely and carefully the interests of the Dominion in our representations to the United States authorities.
There is nothing further, Mr. Speaker, that need be said at this moment. If the government declines to follow the example of hon. gentlemen opposite in trying to develop argument that cannot fail to serve the purpose of those by whom we are being opposed in delicate negotiations which are being carried on at the present moment, it is only because we feel that such a course is not only prejudicial but-may I add-in the existing circumstances unpatriotic.


Charles Hazlitt Cahan: Mr. Speaker, I ask the right to
close the debate if no one else wishes to intervene.


Mr. SPEAKER:: If any other hon. members wish to speak now is their opportunity.


Charles Hazlitt Cahan: I simply wish to suggest to
the Prime Minister (Mr. Mackenzie King) that when he alleges indirect or wicked motives on the part of those on this side who have asked for these papers, his argument is entirely beside the mark. The main documents to which I made reference this evening are in evidence in the suit in Washington. The Prime Minister also says they are in the records of this government. I have found some of them here, and to that extent have

verified the claim that authentic copies were produced in evidence in the United States. When an ex-Secretary of State and an exjudge of the supreme court refers to these documents which I have quoted to-night, I say it is utterly useless for the Prime Minister or the government of this country to play the ostrich trick of burying their heads in the sand and accusing others who call them to wakefulness in the performance of their public duty of being unpatriotic. It is futile for the Prime Minister to suggest that we should not discuss a matter of great public interest such as this for fear that we would make known to the authorities of the United States documents which they have in hand, documents which are well known to their officials, and documents which they themselves, within the past few months, have put into evidence in one of the most important suits ever carried on in the United States. It is the patriotic duty not only of the members on this side of the house, but of the parliament of Canada to investigate and ascertain what grounds there are available to support our contention; and if our grounds are not valid and solid, if they are not tenable, for goodness sake let us cease bluffing with the United States, let us cease presenting to them childish arguments which they know to be futile and contrary to the evidence which they have in their own possession. Let us deal with the matter frankly. There is nothing unpatriotic on our part. I brought this matter up because the press of the city which I have the honour to represent has for a number of years referred to this Chicago diversion as a water "steal"; because every ship that comes into the harbour of Montreal loses from $1,000 to $5,000 per trip due to the lowering of the levels of the water in the harbour; because an engineer of the harbour commission of Montreal-which has always received the high approval of the Prime Minister and his colleagues-has alleged in a recent report that some $25,000,000 a year is lost to the commerce and shipping and trade of Montreal by reason of the lowering of the levels of the great lakes by the Chicago drainage canal. Therefore it is a matter of public interest that should be discussed, especially when we are to be asked during the present session to vote a million dollars to deepen the channel below Montreal-a channel the depth of which has been decreased by this diversion at Chicago of which we complain.
All I ask of the Prime Minister is that he shall credit us with having as patriotic motives as those which, I am sure, he has himself. If I have presented the case to-night with some

Unemployment Insurance-Mr. Heaps
ardour, let me say that I was not presenting my own point of view, I was not attempting to make an argument for the United States, but I was attempting in fair, clear, impartial language to present to this house the case which the United States are making, and the case which so far is alleged to have been established in the proceedings which are now pending at Washington between twelve states as complainants against the Chicago sanitary district and the state of Illinois.
Motion (Mr. Cahan) agreed to.



UNEMPLOYMENT, SICKNESS AND INVALIDITY INSURANCE

Abraham Albert Heaps: That, in the opinion of this house, the committee on industrial and international relations be authorized to investigate and report on insurance against unemployment, sickness and invalidity.
He said: Mr. Speaker, last year I introduced a motion almost identical with the present resolution, and was extremely pleased with the very hearty support which it received from members in all parts of the house. However, on account, of the fact that it was brought up on a Wednesday afternoon there was no opportunity of dividing the house, with the result that a determination of the question was postponed and I had to place the motion on the order paper once more this year.
This particular matter is not by any means new. It has been debated in this house on several occasions, and it has also been discussed by several of the provincial legislatures. In the platform of the Liberal party of 1919 one finds a reference to this very important question. I was also glad to note that in the platform of the Conservative convention at Winnipeg in October a reference, although indirect it is true, was made to legislation of this particular character. In view of these facts I do not see that there can be very much objection to referring this question to a committee for consideration and report. The grounds for such a reference are strengthened by the fact that not only have the members of this house discussed this question, but many of them have expressed their approval of the principle involved.
It may be argued that this matter is not entirely a federal one. I do not think there are many hon. members here who will claim that unemployment, and all the problems connected therewith, are matters of purely municipal or provincial concern. The unemployment question is a problem which affects 56103-36
the Dominion as a whole, and I believe it should be dealt with by the federal .parliament. In 1919 this house appointed a royal commission to investigate the unemployment question. That commission reported favourably in regard to the questions of unemployment, health, sickness and invalidity insurance. In 1921, and also in several subsequent years-I am giving these facts in order to show to hon. members that the federal parliament in the past has assumed certain obligations and also a certain responsibility in regard to this question-the Dominion house gave relief to the provincial governments so as to alleviate the unemployment condition in several parts of the country. In 1924 the government of that day summoned a Dominion-wide conference in order to discuss the question of unemployment, thereby recognizing the fact that the problem was a Dominion one and not purely provincial or municipal in its character. I do not claim that we can cure unemployment under existing social conditions. I believe that unemployment is inherent in our modern system of capitalism, I do not believe we can get rid of it, but that does not mean that because unemployment is inherent in our economic structure we should not take steps to relieve unemployment and, as far as we can, alleviate the evils attendant upon it.
In looking into this question I find great difficulty in getting accurate information as to the exact amount of unemployment prevalent in this country. There is very little reliable data that is available to the people to show the exact extent to which unemployment exists. A commission appointed by the Ontario government conducted an investigation and reported as a result of that inquiry that unemployment in Ontario amounted to about 14 per cent, whilst an authority on economic problems at Toronto university expressed the opinion that unemployment approximated about 44 per cent in the mouth of October when employment was supposed to be at the very highest. This demonstrates that unemployment is permanent in Canada, and I believe that parliament would be remiss in its duty if it did not take some action towards alleviating these conditions.
As to the causes of unemployment it has been said that certain parties in this house advocate a policy which will provide a solution for the problem. Certain hon members to my left set up the claim that if we had greater protection there would be less unemployment. I do not take that view; I do not believe that protection in itself is a cure for unemployment. It may increase the volume of employment in a certain district, but that does

562	COMMONS
Unemployment Insurance-Mr. Heaps
not mean to say that it would bring about a decrease in the volume of unemployment generally. It may mean that more men would be employed in connection with certain industries in certain particular localities, but the volume of unemployment would remain about the same.
In this connection may I be permitted to read a statement that was made in the other house by Senator Robertson, during a discussion which took place there on March 23, 1927. The hon. senator on the occasion referred to spoke as follows:
I was astonished the other clay to find the real situation is, and I will quote just a paragraph. The manufacturing industries of Canada in 1924 employed 516,177 persons- only 974 more than were engaged in those industries in 1910. But the capital employed in 1924 was $3,380,000,000 compared with $1,247,000,000 in 1910. That is, the capital invested in manufacturing industries in Canada increased 183 per cent in that period of fourteen years, while the number of employees or man-power necessary to handle that greatly enhanced production and value, increased one-sixth of 1 per cent.
The working people of our country find themselves in this position, with the advance of science, the improvement of machinery, and the large mechanical production of the present day. So great every year is the rush and struggle and competition between the hundreds of thousands of workmen looking for employment, that the old man finds himself shoved aside, and when a man gets beyond fifty years of age in Canada, unless he has a trade or is skilled in some particular line, he finds it difficult to get a living.
There we have one statement from a senator who has made probably a little study of that particular problem. I want now to come down to figures which perhaps might help to give an illustration of existing conditions in industry, and why the unemployment problem is with us and likely to stay with us. In the year 1917-and I am going to ask permission to allow this record to go on Hansard, it is taken from the Canada Year Book-there were employed in industry 552,968 people. In 1924 we find the number of persons employed in industry was 432,273, or a reduction of approximately 120,000. In the same period the gross amount of wages paid was about the same in 1917 as 1924, showing that although the number of persons employed in industry was less in 1924-the latest year, by the way, in which figures #re available-there is only a slight increase in wages to persons employed in industry. Taking wages in 1917 as 100, wages have risen to 111.4. The statement is as follows:
Average Yearly Earnings and Real Wages of Wage-earners in Manufacturing Industries, 1917-1924.
Years	Amount of wages paid	Average number wage earners	Average yearly earnings	Index numbers	Average yearly earnings	Retail prices	Real value of average yearly earnings$	No.	$	1917	420,094,869	552,968	760	100 0	100-0	100-01918	480,949,599	547,599	878	115-5	113-7	101-61919	490.570,995	529,327	938	123-4	122-2	101-01920	583,853,225	526,571	1,109	145-9	142-8	102-21921	381,910,145	381,203	1,102	131-8	125-1	105-41922	374,212,141	398,390	939	123-6	115-7	106-81923	428,731,347	446,994	959	126-1	116-7	108-11924	420,269,406	432,273	972	127-9	114-7	111-4
I want to point out another very interesting and important factor which is bound to have some bearing upon this question. I am also going to ask permission to have this tabulation placed on Hansard, as it is so closely related to the one to which I have just referred. In 1917 the amount of manufacturing production was $2,873,000,000 and in 1924, $2,695,000,000. But if we are to take the value of the production in those periods we find that in one case, taking the production for 1917 as 100, the production had actually increased to 104.65. The tabulation is as follows:


Mr. KAISER:: Whose permission does the hon. member ask for putting these statements on Hansard?


Abraham Albert Heaps: The very same permission
that other hon. members ask.


Thomas Erlin Kaiser: I have been refused.


Abraham Albert Heaps: I am sorry the hon. member was so unfortunate.


Thomas Erlin Kaiser: The excuse made was that this costs a good deal of money. If in these forty minute speeches we can ask permission to load up Hansard with statements, I should like to have known that before I made my speech.


William Lyon Mackenzie King: My hon. friend is quite correct. Last year he endeavoured to load up Hansard with a lot of figures that he did not read to the house and we on the government side took strong exception to that procedure. If my hon. friend is endeavouring to put on Hansard something which is part of a speech which he ought to deliver, he should be prevented by the Speaker from so doing.


Abraham Albert Heaps: Do I understand that the
Prime Minister wishes me to read these figures?


William Lyon Mackenzie King: I think my hon. friend should do so.


Abraham Albert Heaps: I am quite prepared to read them, but I think conditions this year are so totally different from those of last year that objection ought not to be taken. Seeing that last year hon. members had unlimited time in which they could state their case to the 56103-36i
house while this year they are restricted to forty minutes, I believe a little more latitude might be allowed in regard to figures.


William Lyon Mackenzie King: I hope my hon. friend will not misunderstand my intention. I am endeavouring simply to uphold the rules of the house as laid down by itself.


Abraham Albert Heaps: I am just as anxious as the Prime Minister is to uphold the rules. I was not very anxious to proceed to-night, and I would not have discussed the matter, if I had received the assurance of the house that it would go to committee without discussion. Hon. members will understand it is very easy for other hon. members who are opposed to this resolution to speak until eleven o'clock and then the whole matter would lie over until next year.


William Lyon Mackenzie King: As the rule now
stands, this resolution becomes the first order the next time these motions are taken up.


Abraham Albert Heaps: Provided that I speak until eleven o'clock.


William Lyon Mackenzie King: The hon. member can go on again to-morrow and complete his forty minutes.


Abraham Albert Heaps: 
Hewitt Bostock: It being eleven o'clock-


Abraham Albert Heaps: Do I understand, Mr. Speaker-


Hewitt Bostock: If the hon. gentleman has not finished, the resolution will retain its place on the order paper.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, February 17, 1928