1929-03-11

MARINE AND FISHERIES


[Stage Direction]
Mr. WILLIAM DUFF (Antigonish-Guys-boro) presented the first report of the select standing committee on marine and fisheries.
Mr. Duff moved that the report be concurred in.
Mr. DEPUTY SPEAKER:: This motion
can be accepted only by unanimous consent.


Some hon. MEMBERS:: Explain.


Mr. SPENCER:: We do not know what
the report is about.


Mr. DUFF:: The report was read only a
few minutes ago, and if my hon. friend had been listening he could have heard it.


John Frederick Johnston: If there is an
objection to the motion being adopted it will have to stand as a notice of motion for to-morrow.
Motion stands.



BEAUHARNOIS POWER PROJECT


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I beg to lay
on the table a partial return to an address of the House of Commons dated February 13, 1929. with respect to the project commonly known as the Beauharnois power and canal proposition.


Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, I wonder if the
government would find it possible to lay on the table at the same time the papers in con-
Questions

neetion with the application of the St. Lawrence Power Company for a similar right some years ago, which application was refused. The papers must be in the possession of the department and they would be very interesting.
4.	How much revenue was raised from excise on cigarettes each year from 1912?
5.	How many cigarettes were imported into Canada per year during the foregoing years?
6.	How many cigarettes were manufactured in Canada each year during the same years?


Mr. EULER:: 


William Lyon Mackenzie King: Yes, if such
papers are there I will ask that they be laid on the table.



DIVORCE PROCEEDINGS


[Stage Direction]
Mr. W. J. WARD (Dauphin) moved for leave to introduce Bill No. 75, respecting the domicile of married women in proceedings for divorce.
Some hon. MEMBERS:: Explain.


Mr. WARD:: The purpose of this bill is
to give to women who have been deserted by their husbands or otherwise separated from them for a period of two years or longer the right to establish their own domicile, which right they do not possess at present.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. ARTHURS:: 1.	Is the steamer Wauketa, formerly named the Margaret, owned or operated under charter or otherwise by the Public Works department of Canada? If so, for what service?
2.	What was her cost or what is the charter cost per annum?
3.	What was the cost to Canada for service of the said vessel, if owned or employed, during the season of 1928 for, (a) repairs; (b) supplies and upkeep; (e) wages and salaries; (d) general; (e) total cost?


Mr. ELLIOTT:: 1.	(a) Owned; (b) For the inspection of harbour works, towing small plant and making repairs in the Toronto district.
2.	Built by the department at a cost of $15,650.
3.	(a) $3,350 for dry dock and renewal of hull, first time in fifteen years; (b) $596.11; (c) $1,121; (d) nil; (e) $5,067.11.


CIGARETTE TAX
Mr. GOTT:: 1.	What is the excise tax on cigarettes?
2.	When was present rate of excise imposed?
3.	How many times has raise in excise been made during the past fifteen years, stating increases as to, (a) time, (b) rate?

1.	Excise duty rates are as follows;-
Cigarettes weighing not more than 3 lb.
per M, $6 per M; Cigarettes weighing more than 3 lb. per M, $11 per M.
2.	Present rate was imposed June 30, 1923.
3.	Changes in excise duty rates since August, 1914, were as follows:-
August 22, 1914: Cigarettes weighing not more than 3 l'b. per M, $3 per M; cigarettes weighing more than 3 lb. per M, $8 per M.
May 24, 1918: Cigarettes weighing not more than 3 lb. per |M, $6 per M; cigarettes weighing more than 3 l'b. per M, $11 per M.
June 28, 1922 : Cigarettes weighing not more than 3 lb. per M, $7.50 per M; cigarettes weighing more than 3 lb. per M, $12.50 per M.
June 30, 1923; Cigarettes weighing not more than 3 lb. per M, $6 per M; cigarettes weighing more than 3 lb. per M, $11 per M.
4.	Excise duties collected on cigarettes during the fiscal years ended March, 1912 to 1928, were as follows:-
Fiscal year
1912		$ 1,889,376 74
1913	
2,357,705	811914	
2,809,347	021915	
3,004,822	141916	
3,252,797	581917	
3,929,130	151018	
5,002,576	441919	
8,852,076	021920	
14,657,162	631921	
14,650,577	551922	
14,710,869	681923	
14,079,064	111924	
14,767,259	511925	
15,197,878	401926	
17,308,109	011927	
20,011,204	661928	
23,569,641	005.	Imports of cigarettes entered for consumption in Canada during the fiscal years ended March, 1912, to 1928, were as follows:-
Fiscal year
Lb
1912		 65,173
1913		 75,555
1914		 79,875
1915		 44,339
1916		 30,222
1917		 22,398
1918		 23,698

Questions
Fiscal year
Lb
1919.
1920.
1921.
1922.
1924
1926
1928
21,085
19,933
25,611
27.136
36.127
31,880
42,115
50,896
45,622
46,670
6.	Cigarettes manufactured in Canada during the fiscal years ended March, 1912, to 1928, were as follows:-
Fiscal year	Number
1912		.. .. 783,982,185
1913		
1914		.. .. 1,166,707,610
1915.. 		
1916		
1917		.. .. 1,698,815,380
1918		.. .. 2,321,594,533
1919		
1920		.. .. 3,305,963,002
1921		.. .. 2,512,048,186
1922		
1923		
1924		.. .. 2,431,696,061
1925		
1926		.. .. 2,897,179,500
1927.. [DOT][DOT] .. ..	.. .. 3,313,551,110
1928


TORONTO HARBOUR
Mr. CHURCH:: 1.	What work remains to be done in Toronto harbour by the government under order in council and agreement made in 1913 with the city and harbour commission for harbour improvements?
2.	What sums of money have been spent to date by the government on such agreement.
3.	What were the terms of the erection of two bridges to Toronto island across the western and eastern gaps in said agreement aforesaid?


Mr. ELLIOTT:: 1.	By authority of order in council of June 10, 1913, the government was to undertake the following works which were estimated to cost approximately $6,400,000:-
(a) The excavation to a depth of 24 feet of a channel and basin in Ashbridge bay; the channel to be approximately 6,000 feet long and 400 feet wide, and the basin 1,100 feet by 1,100 square; along both sides of the channel and around the basin are to be constructed pile work retaining walls that will accommodate the traffic which it is intended to develop in this new industrial district; (b) The construction of a cribwork breakwater, approximately 18,600 feet long to protect the lake shore west of the western entrance to the harbour; (c) The construction of a seawall of pile work, approximately 17,295 feet long, to protect the lake shore on the east side of the eastern entrance of the harbour; (d) The building of two bascule bridges, one over the eastern entrance, and the other over the western entrance to the harbour.
Items (c) and (d) of the foregoing still remain to be done.
2.	*8,188,741.08.
3.	As included in the above mentioned order in council.


ALFRED PEAT BOG
Mr. CANTLEY:: 1.	What is the character of and what the obligation of Peat Fuels Limited to the government of Canada in connection with the Alfred peat bog?
2.	What amount does the Canadian government claim as due on account of sums expended on remodelling Alfred peat bog plant?
3.	Has the Dominion government any other claim against Peat Fuels Limited for rent, breach of contract or otherwise?
4.	During how many days did Peat Fuels Limited operate Alfred peat bog during 1928?
5.	What quantity of peat fuel did above company produce during 1928?
6.	What is the cost of freighting peat fuel from Alfred to Montreal?


Mr. STEWART (Edmonton):: 1.	Owing to the inability of Peat Fuels Limited to operate the Alfred plant, the government leased, under agreement, the plant and equipment of the company for a period of one year and eight months. Peal Fuels Limited agreed, on the expiration of this lease, to reimburse the government for all expenditures incurred in fully equipping the plant.
2.	Approximately $84,130.08, plus accrued interest from January 1, 1929.
3.	Yes, for sales of peat fuel $3,409.66.
4.	None. Plant was operated by the government.
5.	None.
6.	Eight cents, per hundred pounds for minimum shipments of 40,000 pounds.


EXPENDITURES FOR RELIEF
Mr. CHURCH:: What are the details of an item of $806,736.72 set out in Hansard in reply to the proposed aid to Welsh miners; of prior votes by parliament since 1905, for relief voted in cases of distress and famine in the British Empire and elsewhere, as set out on page 407 of Hansard, February 25th, 1929?

Unopposed Motions jor Papers


William Lyon Mackenzie King: 1905-	06-Relief of famine sufferers in
Japan	$ 24,824 91
San Francisco earthquake, relief	 100,000 00

1124,824 91
1906-	07-Jamaioa earthquake, aid
to sufferers	 42,743	47
1907-	08-Jamaica earthquake and
fire, aid to sufferers	 7,256	53
1908-	09-Earthquake in Italy relief
to sufferers	 100,000	00
1909-	10-Aid to sufferers from
floods in France	
1914-15-Sealing disasters, Newfoundland, relief to sufferers. ..
1920-21-Contribution towards fighting typhus epidemic in
Europe	
1922-23-Relief of war refugees in Constantinople	 $25,000 00
Russian famine relief " Save the Children Fund". .	40,000 00
1923-24-Japanese earthquake relief fund	
1925 26-Leeward islands hurricane, relief supplies	
1926-27-Isle of Pines hurricane, relief for Canadian sufferers....


$806,736 72 QUESTION PASSED AS ORDER FOR RETURN COMPENSATION FOR CATTLE DESTROYED
Mr. MORIN (Bagot):: 1.	What total amount was paid as compensation, throughout the Dominion, for cattle which reacted to the tuberculin test, during the years 1924, 1925, 1926, 1927 and 1928?
2.	What proportion of said amount was paid in the province of Quebec and what was the average amount per capita, (a) for pure bred and registered cattle, (b) for cattle not registered?
3.	During each of the said years, what was the total amount paid in salaries or compensation, by the Department of Agriculture, to officials who travelled through the province of Quebec to conduct this tuberculin test of cattle?


UNOPPOSED MOTIONS FOR PAPERS
Mr. McRAE (For Mr. Arthurs):: For a copy of the instructions issued to postmasters for compilation of the rural directory for the various constituencies of Canada.
[Mr. Church.1


REPAIRS TO LINDSAY ARSENAL
Mr. ROSS (Kingston) (for Mr. Peck):: For a copy of all letters, telegrams, correspondence, accounts, and other documents, passing between the Department of National Defence and E. A. McPhee, in reference to repairs to the Lindsay arsenal, during the years 1926, 1927, and 1928.


WHARF AT CAP CHAT
Mr. MacLAREN (for Mr. Cahan):: 1.	For a copy of all orders in council, correspondence, pay lists, and other documents, relating to the repair of the wharf at Cap Chat, county of Gaspe, Quebec.
2.	A return showing the name of the superintendent of said work, the salary he received, along with a copy of all correspondence with said superintendent in regard to said work.


TRANSFER OF NATURAL RESOURCES
Mr. MacLAREN:: For a copy of all correspondence, letters, telegrams and other documents passing between the government of the province of New Brunswick, or any department thereof, and the government of Canada, or any department thereof, in regard to the transfer of the natural resources to the prairie provinces.


POSTMASTER AT PICTON
Arthur Edward Ross: For a copy of all orders in council, reports, recommendations, correspondence, telegrams, resolutions, and other documents, on file in any department of the government or the Civil Service Commission, in any way relating to the appointment, cancellation of appointment or dismissal of S. Smith, and the appointment of B. J. Purtelle to the position of postmaster at Picton, Ontario.


MESSAGE TO PRESIDENT HOOVER
[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Before the orders of the day
are called I would like to ask a question. The press despatches indicate that His Excellency the Governor General sent a message of congratulation to the President of the United States on the occasion of his inauguration. I desire to ask the right hon. Prime Minister if such message was sent by His Excellency on the advice or with the approval of his constitutional advisers.


William Lyon Mackenzie King: The communication to
which my hon. friend has just referred was a personal communication in the nature of an international courtesy, for which I am prepared to take full responsibility.
50.000	00
25.000	00
200,000 00
65,000 00 182,369 55 7-,646 78 1,895 48

The Budget-Mr. Fansher (Last Mountain)


STRIKE AT OSHAWA
Mr. PETER McGIBBON (Muskoka-On-tario):: I would like to ask the Minister of
Labour (Mr. Heenan) a question with regard to the accuracy of a report appearing in the Toronto Evening Telegram of Saturday last with regard to a strike at Oshawa. In this article it is stated that the strike was caused by the importation of Germans on the advice of the Minister of Labour, and I would like to ask if it is the policy of his department to recommend the importation of Germans to put Canadians out of jobs.


Hon. PETER HEENAN (Minister of Labour):: The Minister of Labour is very
glad to inform the hon. gentleman that there is no foundation for that statement.


Peter McGibbon: And you deny the
accuracy of it?


SOLDIER SETTLERS IN BRITISH COLUMBIA
Mr. H. J. BARBER (Fraser Valley):: I
would like to draw the attention of the Minister of Immigration (Mr. Forke) to the serious state of affairs which appears to exist among the soldier settlers in a certain section of British Columbia. I have here a brief extract taken from one of the leading Vancouver papers, which is as follows:
Say Soldier Settlers are Starving Here Fraser Valley Delegation to Ask Settlement Board for Relief Plan
The soldier settlement board will be interviewed by a committee, to be appointed this afternoon by the Fraser Valley Milk Producers Association on annual meeting at Hamilton hall, it was decided this morning, to ask for relief in connection with assignment oif milk tickets by soldier-settler members for liabilities to the soldiers' settlement board.
Reduction in the price of butter fat has placed some of these members in a difficult position, it was stated. Some who have been unable to break the assignments have left the association altogether, while others, it was declared, with wives and children were starving.
I have also received1 a letter in connection with this matter, and I would ask the minister if some relief can mot be given.


Mr. FORKE:: I have no information
regarding this maltter, but I will make inquiries and give an answer to the hon. member.



THE BUDGET


[Stage Direction]
The house resumed from Friday, March 8, consideration of the motion of Hon. J. A. Robb
(Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Hon. Hugh Gulthrie.
Mr. W. R. FANSHER (Last Mountain):: Mr. Speaker, in rising to make a few observations on the budget as presented by the Minister of Finance (Mr. Robb), I would like to make reference to the remarks made the other evening by the hon. member for Yale (Mr. Stirling). He reviewed a state of affairs which exists with regard to the apple-growers of British Columbia, and his observations no doubt attracted considerable attention. I do not desire to have my remarks considered as offering any advice to those who have found themselves in the position described by the hon. member, but I would like to mention that the wheat-growers in the three prairie provinces found themselves in a somewhat similar position in 1923. In that year the farmers of western Canada found that they were, producing their crops at a very serious loss. Many farmers had an actual cash loss of $3,000, and some farmers lost as much as $10,000. We had our backs to the wall and we had to devise ways and means by which we could benefit from our experience, and from the morass of opinion which was expressed at that time was evolved what is known as the western wheat pool. We did not believe that we could ask for protection and have the situation relieved in that way, but we believed in the old adage that mutual self help was the best help we could gelt and we proceeded to set up an organization which would put our product on the markets of the world at the lowest possible cost. In reviewing the situation at that time we discovered that the consumer of our wheat was paying a much higher price than was commensurate with the price we received for the product. I think we have succeeded to a very large extent in eliminating that large spread between the price the consumer has to pay for the finished article, the loaf of bread, and the price we receive as the producers of wheat. I am sure that we in the prairie provinces pay a sufficient price for a box of apples to net the producers a very handsome return. I can recall having paid as high as $2.75 for class C apples, and up to $3.25 for class A; I know that the cost of packing is about 55 cents and the freight is about 65 cents per box, and I do not see any reason why the prairie provinces should not be treated in the same manner with regard to apples as are the consumers of wheat. I do not see any reason why the producers in Yale
824	COMMONS
The Budget-Mr. Fansher (Last Mountain)
and other constituencies in British Columbia could not make some arrangement with the consumers which would eliminate this wide spread. If that were done we would be able to consume more apples and the producers would receive a greater return for them. I only offer this as a suggestion, and I would like to see another goodwill deputation visit our provinces with' the definite object of getting together on this matter so that we might bath be mutually helped.
It is not my intention to detain the house in reviewing the budget, as I have a specific matter which I would like to bring to the attention of the house. A situation has grown up very recently in western Canada which, I think, should receive the very serious consideration of the Minister of Finance. I want to congratulate the minister on the very clear and concise manner in which he presented the financial statement of the affairs of Canada, and for the few reductions in the schedules which he has brought down. He also gave us a very clear understanding as to the indebtedness of Canada. If I have his figures correctly, he gave the dead weight debt of Canada as $2,330,835,086, a rather colossal sum. Although most of this enormous debt was created during the war, we must remember that the interest on this large sum of money, as well as any reductions in principal, must come through the efforts of the taxpayers of Canada. I am pleased to note that there is no reduction in the income tax in the budget of this year. We did have reductions in 1927 and 1928, and I remember receiving letters, pamphlets and exhortations from various organizations throughout Canada urging that I support the Prime Minister and the Minister of Finance in the reduction of the income tax. Whenever I answered any of this correspondence I always stated that I was opposed to any reduction in this tax so long as we had a war debt which had to be met; so long as we had a war debt upon which the interest charges were accruing year by year. The income tax along with other taxes, was specially instituted to take care of the enormous debt thrust upon us because of the war. It is a tax which comes from those who are best able to pay. Those who come under the present schedules of the tax, in my opinion and I am sure in the opinion of many members of this house, are well able to pay that tax. It is a tax that is easily collected; there is no particular expense in connection with its collection. On the other hand, if it were done away with, whence would the interest charges come and whence would the amounts necessary for the reduc-
tion of our enormous debt be collected? They would be collected principally from the customs and excise taxes and even now, as I shall endeavour to show a little later on, the burden is very heavy on many of us. It is not my intention to go into the matter fully, but if we take into consideration the platform that was given us in 1919 and again in 1921, I feel that we are moving all too slowly along this line. In that platform certain commodities were specified that would be put on the fre.e list. The government has been in power for seven years and the last item on the list, namely, fertilizers, has been put on the free list. I would impress upon the minister the necessity within the next few years of putting on the free list the next item, that is, cement. In looking over the report of the hearing before the tariff advisory board we realize that the cement people can well do without any protection whatever in the production of that commodity. It is a staple building material and it enters into the cost of our production to a great extent so that the removal of the duty would be of great assistance to us.
Passing on I should like to comment on the talk of prosperity in the Dominion. I was pleased to note in the speech delivered the other day by the acting leader of the opposition (Mr. Guthrie) that he said the prosperity had not reached the small towns and townships throughout Canada. If we pick up the papers and read the bank statements we would think Canada was rolling in wealth, and possibly from their point of view they are stating what actually exists. Bank statements show unprecedented prosperity; brokerage houses and financial corporations show a very large increase in their operations and profits. Our Canadian National railway was never before in its history able to make such a showing as it did during 1928. The gross earnings were far and away above anything it was able to show in previous years. The net profit that our nationally-owned railway made last year was $7,000,000, not including the interest accruing to the government. That is a very creditable showing. I just want to point out where the major portion of this revenue came from. In western Canada we had an immense crop, so far as quantity goes; considerably more than 500,000,000 bushels of wheat were produced there last year and from that crop the railways received the tonnage on which they were able to make such enormous earnings. But the western crop in the aggregate is not paying the cost of production. The revenue from this immense crop which has created such prosperity, we might

The Bude/et-Mr. Fanaher (Last Mountain)
say in the upper strata of the financial world, has not brought prosperity to the men who produced it. I could name hundreds of farmers in my own constituency in western Canada who, when they drew out every bushel of wheat that was taken from the threshing machine and marketed the same, found the first pool payment on that wheat was not sufficient by several dollars to pay the cost of threshing which is a very minor cost in the production of wheat. That is a very serious matter and it is driving us in western Canada to look around for new methods of production. That is not all due to climatic conditions. True it is, we had a frost just when the wheat was ready to harvest. This wrinkled the bran a little in some instances but it did not harm the milling value at all. As was mentioned by the hon. member for Yale (Mr. Stirling) last week, their grading system in regard to apples militates against their profits considerably, and the same thing can be said with regard to grain in western Canada; the grading system under which we operate at present was not applicable to last year's crop. The producers of last year's crop are suffering to the extent of millions of dollars because they could not receive the intrinsic value of their product, and because of the over-production the farmer's plight is made even worse. True it is, we produced an enormous crop in western Canada last year. We are told that the surplus production of wheat throughout the world in the harvest of 1928 was more than 400,000,000 bushels, and yet we have an immigration policy which is bringing into Canada only farmers to settle here, open up new territories and produce more wheat to flood the world's market and in that way reduce the price. That is a policy which, I maintain, is fallacious. We should make a complete survey of the situation and see whether some better method cannot be found than bringing into Canada immigrants ostensibly to go on the land and produce where production does not show a profit. During the last number of years the position of the farmer has not been rosy. True it is, the 1927 crop gave us a little ray of hope, but it was dissipated when we started to thresh our last year's production.
This leads me to another phase of the situation which I want to draw to the attention of the house, and especially to that of the Minister of Finance. In his remarks in bringing down the budget he had these words to say, as reported in Hansard, page 595:
The constant expansion within Canada brings new problems. We should recognize that this generation has an obligation to build wisely for the greater to-morrow.
I want to bring to the attention of the house Canada's new problem. In western Canada we are not slow to adopt new methods of tillage, harvesting, marketing and so on. I might refer for a moment or two to what industries are doing. I remember well reading the report of the hearing before the tariff advisory board of the application for an increase in duty of fifty cents a ton on coke where one of the manufacturers engaged in the production of iron and steel threw across the table the remark that a certain institution in this country was a back number; that its machinery of production was out of date and that he himself was very strongly opposed to any advance of fifty cents a ton in the duty on coke, for the reason that he had spent several hundred thousand in putting into his plant new machinery, up-to-date methods of handling his product, and he felt that he should not be penalized to that extent because he wanted to keep abreast of the times. In western Canada in the last three years there has been an innovation in the harvesting of our crop and I want to speak particularly of the combine and the position in which it is placed through the tariff. I might draw the attention of the house to certain items in the customs tariff schedules which relate to harvesting machinery. Tariff item 445 specifies harvesting machinery as follows:
Mowers, mowing machines, harvesters, selfbinding or without binders, binding attachments, reapers and complete parts thereof:	British
preference, free; Intermediate, 6 per cent; General, 6 per cent.
The machine known as a combine, which is coming into extensive use in the west, is not wholly a thredher; it is only part thresher and part reaper; it falls under section 60 of the Customs Aot, and section 60 reads as follows:
If an article is enumerated in the tariff under two or more names or descriptions, and there is a difference of duty, the highest duty provided shall be charged and collected thereon.
To prove my statement that this machine is new in western Canada, and that the farmers are not slow in taking up advanced ideas in either tillage, harvesting or marketing, I would like now to quote you a few figures. I wrote to the Departments of Agriculture in the three prairie provinces, and I received from those departments similar answers, as they quote the figures given by the Northwest Farmer in their census of the situation. I hold here in my hand that document to which I have referred. It has been compiled from information secured from all machinery companies doing business in western Canada that sold or dealt in combines, and I want you to
826	COMMONS
The Budget-Mr. Fansher (Last Mountain)
note particularly the rapidity with which the western farmer has taken up this particular machine. Combines first made their appearance in any number in 1926. In the province of Manitoba during that year there were two in operation; in Saskatchewan, 148 and in Alberta, 26-not a very large number when you consider the thousands and thousands of farmers in western Canada. But in 1927 twenty-one were added in Manitoba; 382 in Saskatchewan and 195, in Alberta, making a total of 598 put into operation in 1927.
Undoubtedly, these combines were proving their effectiveness and efficiency, because when we come to 1928, we see an increase of 611 per cent- 611 per cent in one year. In Manitoba that year, in addition to those already in operation, they had 206; in Saskatchewan, 2.356, and in Alberta, 1,095, making a total for the year 1928 of 3,657 new machines.
The grand total of those machines brought in and put into operation in the last three years was 4,431. These machines came in, and were classified under tariff item 447b, which reads as fouGowg:
Wind stackers and threshing machine separators, including baggers, weighers and self-feeders therefor and complete parts therefor: British preferential. 5 per eent; Intermediate, 10 per cent; General, l0 per cent.
I want to detain the house a little while in explaining this. The rate is 10 per cent. It is 5 per oent under the British preferental rate and 10 per cent under the general tariff. A thresher-separator, that is, an ordinary thresher-separator, costs to-day anywhere from $1,600 to $1,900, according to its size. It is set in the field and remains in a stationary position, and threshes all day usually. It is not drawn around the field, and it is not subjected to any thing like the wear and tear that a combine is put to. The tractor that furnishes the power for that separator comes in free, but the motor that furnishes the power for the combine is taxed 10 per cent. There is in this a great inequality. The combine costs anywhere from $2,000 to $4,000, and it tabes a $4,000 combine to accomplish in a day the amount of work that can be done by the ordinary separator that costs $1,600. It is a new method of harvesting. It gets our wheat in a better condition to the elevator. It keeps it away from 'the snow because, as we know, we very often have a snow storm early in the season which necessitates threshing the remainder of the crop the following year.
It is my contention that this machine should come under item 445 and should be taxed 6 per cent instead of 10 per cent. If the combine would last as long as the f&lr. W. R. Fansher.]
ordinary separator conditions would not be so bad. But this particular machine is shortlived, and, under ordinary circumstances, a farmer will require two of them in the period of time during which an ordinary threshing separator would last him.


Mr. VALLANCE:: Might I ask a question?


William Russell Fansher: Yes.


John Vallance: Does the swather come
under the same tariff item?


William Russell Fansher: Yes,
the entire machine comes under the higher rate. The combine is essentially a harvesting machine. It does the harvesting and the threshing at the same time. When the crop is to be harvested it goes around the field, picks up the standing grain, threshes it and delivers it in the wagon. In being hauled around the field you will readily understand that the machine is in the dust and dirt all the time and, therefore, it is not a long-lived machine. It is my desire to impress upon the members very strongly this contention: that this particular machine should be designated as a harvester. It is essentially a harvester machine, and should be designated as such. Take last year, for instance. There were 3,657 of those machines brought in, and you must realize that the production of wheat in western Canada is penalized to a very great extent when I say that it was only in 1926 that they first made their appearance. The present classification is not in keeping with the spirit of the revision of the machinery schedule made a few years ago when all harvesting machinery then in existence was put under the six per cent rate and I am further convinced that no such classification was then contemplated. I feel sure that all the members of this house, whether they be agricultural producers or not, will see the inequality that exists in placing this machine which is, as I say, purely a harvesting machine, in a classification which so penalizes the production of wheat. May I repeat that the motor that furnishes the power to operate the combine is taxed ten per cent, whereas the tractor that provides the motive power for the separator which threshes the grain in the ordinary way-the system that has been in use in western Canada for many years-comes in free. The motors attached to the combine and the tractor develop practically the same power, they are largely identical in design, and yet, because one is attached to the combine and

The- Budget-Mr. Fansher (Last Mountain)
becomes a part of it a tax of ten per cent is levied upon it while the other being detached and classified as a tractor comes in free of duty.


Mr. STIRLING:: Is this machine made in Canada at all?


William Russell Fansher: To the best of my knowledge these machines are not made in Canada. I understand that the Massey-Harris Company have been manufacturing them in the United States and shipping them across the line.


John Vallance: It would not make any
difference.


William Russell Fansher: As my
hon. friend opposite says, it would not make any difference. Other harvester machinery comes under the 6 per cent schedule. Why not this? This is a very high priced, shortlived machine. An ordinary separator will outlast two of them. To be compelled to pay the higher rate of duty on such a machine seems to me to be altogether at variance with the spirit governing the revision of the machinery schedules that were dealt with a few sessions ago.
To show the rapid rise in the value of the imports of this particular class of machine during the past few years I propose to give the house a few figures which I have received from Mr. Coates of the Bureau of Statistics. In the figures are included threshing machines, wind stackers, baggers and so on-all parts of the threshing machine. Prior to 1926- the year that combines, we might say, made their first appearance in western Canada-our importations of threshing machines amounted in value to S2,482,830. The increase in the value of our imports for 1927 corresponds with the increase in the number of these combines that were imported, the figures being practically double those for the preceding year, that is, $4,044,503. It is not to be supposed that any more threshing machines were imported in 1928 than in 1927, presumably the ordinary importation to keep pace with the development of the country, but we find a very marked increase in the valuation of the machines imported, and this is due principally to the greater number of combines included :n the figures. In 1928 the value of our imports under that schedule was 88,214,938.
It may be argued by those who advocate high protection that 10 per cent is not an unreasonable rate of duty; but this particular type of harvesting machine, which may be said to be first cousin to the threshing separator, is subject practically to a 20 per cent duty. So far as the number of bushels
threshed is concerned, the combine cannot do any more work in a day than the ordinary separator costing 81,600, but it costs the farmer from $3,500 to $4,000. But although the combine does not do any more work than the ordinary separator, there is a* saving of time and in other ways by its use. But we have to meet the changing conditions, and if the extra tariff duty on these machines has to be borne by the producers of wheat, then they are unjustly penalized; and if the harvest conditions of 1928 are repeated over a few more years, I am sure that many of us in western Canada will have to quit growing wheat. Therefore I appeal to the house and to the Minister of Finance seriously to consider this situation. The hon. minister in his budget speech said that new conditions are arising, and that it is the dirty of the government to meet these conditions. Let me quote his words, to be found at page 595 of Hansard:
In accordance with the fiscal policy of the government, the tariff changes to be submitted to-day are designed to reduce taxation and to lessen the costs of production.
I am confident, Mr. Speaker, that if I had the time I could prove conclusively to this house that these combines should come under the 6 per cent rate.


Mr. GEARY:: Will the hon. member allow this question-in the majority of cases is the reaping done by the combines, or does the combine follow the reaper?


William Russell Fansher: It is done both ways. In the northern areas where the wheat has to dry in the stook the swather method is preferable. I use one myself. In the dry areas where the straw is stiff and stands up for a long period the method is what we call the straight combine-straight from the standing grain into the machine. But the swather is a part of the combine-an essential harvesting part. About one-half of the machine is the harvester, the other half is the thresher. Of course, a certain amount of the value is represented in the motor that operates the machine. I wish to quote further from the Finance Minister's budget speech. At page 594 of BansaTd he is reported as follows:
In so far as we have a fiscal problem, our task would appear to be that of readjusting,-
Will the house kindly note those words?
-that of readjusting, as necessity arises, our customs tariff schedules to meet new conditions, of removing inequalities where inquiry proves such to exist.
I think the hon. minister will agree with me that the rate of duty on this particular
S28	COMMONS
The Budget-Mr. Fansher (Last Mountain)
machine is undoubtedly such an inequality as he had in mind When introducing his budget. Therefore, I appeal to him to give the matter his very serious consideration, and I trust that he will see his way clear to have the tnachine designated as a harvester to bring it under tariff item 445. In this way I can assure him that he will be conferring a great favour on those who are engaged in producing Canada's staple crop-wheat.
I would be remiss in my duty, Mr. Speaker, if I did not congratulate the hon. gentleman (Mr. Guthrie) who led the opposition in the absence of his leader on the very able speech which he delivered in criticism of the budget. I have already noticed that he referred to the prosperity mentioned by the Minister of Finance as not reaching some of the small towns and townships of the Dominion. In this I heartily agree with him. It is true that there is in this country a growing spirit of resentment at some portions of President Hoover's inaugural speech, and I am afraid that possibly our desire to retaliate will get the better of our good judgment, with the result that something rash will be advocated. But be this as it may, I feel that we have not a great deal to fear, no matter what tariff action is taken by the United States. True, our cattle industry may be thrown out of joint for a little while, our dairy men may suffer very materially for a short time, but I am convinced that in the long run the consumers in the United States are going to be heard from. If I might offer a suggestion in this connection, I would propose that while we are waiting to see what action is taken by our neighbours in the matter of tariff revision we should evolve a definite tariff policy ourselves. I would suggest a remedy, and in proof I would quote from the speech of the Minister of Finance (Mr. Robb), Hansaird, page 504. He says:
It is gratifying to note the steady development of inter-empire trade. Canada, the pioneer of the British preference, looks on empire trade as the keystone of its external trade policy and desires in every way to foster closer trading relations throughout the British commonwealth of nations.
I would just offer a suggestion in closing. In answer to anything that may arise from the tariff juggling which may take place in the United States, I urge that we put into effect the principle just quoted and that we materially reduce the tariff against Great Britain. Great Britain takes the greater portion of our agricultural products. She takes upwards of $300,000,000 worth of wheat and wheat products; some put it at $275,000,000, others at $280,000,000, while others again claim that it 
is over $300,000,000. Now if we are allowed to ship such a large proportion of our exportable surplus to a country the size of Great Britain, surely we can consider giving her a very marked increase in the preference which she now enjoys in the markets of Canada. And we can do this as a very effective answer to anything that may be advanced in the way of argument in connection with the tariff raising policy of the new President of the United States.


Mr. J. A. CLARK (Vancouver-Burrard):: I am sure, Mr. Speaker, that you, like all the rest of us, in fact like all Canadians, perused with great interest Mr. Hoover's inaugural speech delivered on March 4, and I am sure also that your eye, as did the eyes of many others, fell upon one outstanding paragraph in that speech. I have no doubt that you looked through the speech to see what the policy of the United States was going to be towards this country, and it is rather significant that the paragraph in question should be so brief in a speech of such length. I should like to read the paragraph which relates particularly to the policy of the United States towards Canada and the outside world. That paragraph reads:
Action upon some of the proposals upon which the Republican party was returned to power, particularly further agricultural relief and limited changes in the tariff, cannot in justice to our farmers, our labour and our manufacturers be postponed. I shall therefore request a special session of congress for the consideration of these two questions. I shall deal with each of them upon the assembly of the congress.
A remarkably brief paragraph for a special session of congress. We in this country have never called a special session of parliament except in great emergencies, such as war. But apparently the point indicated in President Hoover's speech is considered in the United States as of sufficient importance to warrant the calling of a special session of congress. I think my hon. friend from Last Mountain (Mr. Fansher) who preceded me need have very little fear about what will be done by this government; all he need do is to follow the history of the Liberal party during the past seven or eight years and he may be fully reassured as to what that party's action is likely to be.
Mr. ERNST; Inaction.


John Arthur Clark: Yes, a policy of inaction.
Yet, Mr. Speaker, I am sure that you have with some alarm examined' the trade returns as between these two countries. Take for instance the year 1925. In that year we had an adverse balance of trade with the United States of $92,000,000. In 1926 that became

The Budget-Mr. Clark
$133,000,000; in 1927 $208,000,000; and in the fiscal year 1928 $222,000,000, and, for the calendar year 1928, $333,000,000.
I would point out that the New York Times, a very reliable newspaper, states that our adverse balance of trade with the United States for the calendar year 1928 was $427,000,000. Now, Mr. Speaker, is it not beyond comprehension that any member of this parliament can rise in his place and say, "Stand pat on such a situation"? In my opinion this is Canada's outstanding problem to-day. How are we going to remedy the situation? Can Canada continue to pay the United States $400,000,000 a year? Can the Minister of Finance (Mr. Robb) contemplate the situation with equanimity? A few years ago the Prime Minister (Mr. Mackenzie King) considered our balance of trade somewhat of a test with respect to our prosperity. I am sorry he is not in his seat; I should like to read to him his own words spoken, in his budget speech in 1926. However, I shall still read them. I quote from Hansard, May 18, 1926, at page 3485:
For the twelve months ending March, 1926, the visible trade balance of Canada amounted to $401,134,000, and that for the United States to $352,364,000. ... or a cool $50,000,000 less than our favourable trade balance in the same period. This fact is a remarkable demonstration of how Canada is holding her own in the markets of the world. The policy of the present administration, of cheapening the instruments of production, has operated to increase the volume of Canadian exports.
I direct the foregoing particularly to the attention of the Minister of Finance, in the absence of the Prime Minister, and ask him to examine the monthly summary of foreign commerce of the United States, which he will find in our library. Therein he will discover that the favourable balance of trade in the United States for the calendar year 1928 was $1,000,000,000 while the favoiyable balance of trade for Canada in the same period was just $127,000,000. Moreover, had1 it not been for a phenomenal crop our Minister of Finance would have presented us this year with an adverse balance of trade; because for the first three months of this year there was actually an adverse balance against Canada with all countries. But, as I say, due to a phenomenal crop the minister was enabled to bring down a statement which showed a favourable balance of trade. To-day, however-and I invite the Prime Minister's attention to this-in world trade there is a "cool" balance in favour of the United States as against Canada of $900,000,000 instead of a "cool" balance of $50,000,000 in our favour as was the case in 1926.
Surely, Mr. Speaker, these facts call for action; they called for action before Mr. Hoover delivered his inaugural speech and they call for action much more definitely today. I am sure you wondered, Mr. Speaker, as we all wondered, why the Minister of Finance delivered his budget speech on Friday, March 1, when he knew very well for months in advance that the President of the United States would deliver his inaugural address on March 4. I believe he did it at the dictation of the Prime Minister of Canada, who desires to dodge his responsibility.
It is very interesting to analyse our export trade with the United States. For the calendar year 1928 and really for the fiscal year 1928, since there is a difference of only about $4,000,000, our exports amounted to about $496,000,000 which, by the way, is less than in the years 1920 and 1921, when they ran well over $500,000,000. Of that $496,000,000, however, we find that $237,000,000 is accounted for by the exportation of forest products which the United States must have; practically one-half of our exports to the United States consists of our forest products, and it is very interesting to contemplate how completely they control us in this industry. We find that Mr. Graustein, President of the International Paper Company, comes over from New York, and, with some others gets a strangle hold on our resources; they create over-production and the next thing we know is that instead of Canada getting $80 per ton for her newsprint, a contract is made with Mr. William Randolph Hearst, whose publications always have been hostile to British traditions, for $50 a ton, a loss to Canada of $30 a ton, and this government permits that sort of thing to go on. I direct the attention of the government to a pamphlet called Forest Facts, published by the Department of the Interior, and from that publication I would like to quote a few sentences:
The forest resources of Canada are being depleted at the rate of about five billion cubic feet annually through cutting, fire, insects, and decay. If the reproduction and young timber are not protected, the stand of merchantable timber accessible for exploitation will not withstand this drain for more than twenty-five years. . . . Few people realize the urgent need which exists for a forest policy in Canada.
I wish the government of Canada would begin to realize that urgent necessity; one of their own departments publishes the facts but we see no interest taken by this government. No action was taken in the emergency which existed a few months ago in connection with the pulp and paper industry. It may be answered that this was a provincial matter, and it is true that Mr. Taschereau and Mr. The Budget-Mr. Clark

Ferguson stepped into the breach and have been able to do something; it is true that the provinces issue the licenses for the exploitation of these pulp resources, but the moment the timber is cut and is about to be exported it becomes a matter of fiscal policy; it also becomes a matter of trade and commerce and the responsibility devolves upon this government. The Minister of Finance was derelict in his duty during the past year in not calling into conference the heads of these few pulp companies and reading the riot act to them. It is high time that the men who have invested their money in the natural resources of Canada should be made to understand that with regard to our capital assets we will not tolerate any policy except one that gives to us a fair price for those assets. To-day we are not getting a fair price; we are sending to the United States annually about $250,000,000 worth of capital assets in the shape of forest products which we are not replacing, while the United States sends back to us products which are largely the product of American labour.
The policy of this government in regard to our great resources is also seen in connection with our industries, with one or two of which I will deal by way of illutsration. First let me take the sugar industry. In
1927	this country exported sugar to the value of more than $15,000,000; in 1928 these exports fell to $6,000,000, and for the calendar year of
1928	they were less than $4,500,000, a decrease of over $10,000,000 since 1927. I mention this because of the very interesting action taken by the British government to protect their sugar industry. On April 24, 1928, they introduced further safeguarding legislation with the result that the imports from Canada through the port of Bristol decreased to 645 tons, although in 1925 the imports from Canada had amounted to 6,193 tons. The effect of that policy on their importations from all sources is also very illuminating. For instance, in 1925 their imports through Bristol amounted to 62,024 tons, and this fell to 14,931 tons in 1928, showing very clearly the effect of a little safeguarding or protection on an industry.
My hon. friend from Last Mountain prayed that the government would not take any further steps in regard to protection of our industries as against Great Britain; in fact he advocated the repeal of all the existing duties against British manufacturers. It is very hard for one who has been brought upin the woollen industry, for example, to understand how anyone could have that point of view. On Saturday in this province, not far from where I was bom, I saw the plants of

three woollen mills, two of them closed and one which went bankrupt six months ago and which has been re-opened recently. In 1922, when this government came into office, according to statistics furnished by the bureau here, in thirty-seven identical mills there was an average of 4,333 employees. Since that year there has been a gradual falling off; I will not quote the figures for each year, but for 1928 the employees of these thirty-seven identical mills averaged only 3,683, showing the retrograde action in this industry. I point out, Mr. Speaker, that those figures only cover the thirty-seven identical mills and do not disclose the fact that dozens of mills have closed up altogether. No doubt the employees of such mills have migrated to the United States, but nevertheless we find members of parliament and citizens of this country actively advocating the further removal of duties from such an industry.
Let us look at the iron and steel industry. The Dominion Steel Corporation furnished the agricultural implement industry with nearly 6,000 tons of steel in 1903; in 1928 that figure had fallen to less than 900 tons. The same story would apply to the Nova Scotia Steel & Iron Company. The profits of the British Empire Steel Corporation fell off more than a million dollars, or thirty per cent last year. I have before me a summary of the trade of Canada with the United States for the calendar years of 1927 and 1928. The effect of the policy of this government upon the steel and iron industry is well illustrated in those returns. For instance, the importation of iron and steel products from the United States has increased from $113,000,000 in 1925 to a total of $295,000,000 in 1928; an astounding increase. In 1925 the Americans sent $10,000,000 worth of automobiles to this country, and in the calendar year 1928 that had risen to $40,000,000. In addition to that amount!1 they sent $48,000,000 worth of parts, or nearly $90,000,000 worth of goods in one industry alone. I say the Minister of Finance of this country has sold out that industry to the United States. The same story is told with regard to the agricultural implement industry. In 1925 we imported $6,000,000 worth of agricultural implements; in the calendar year of 1928 that amount had arisen to $39,000,000; another industry sold out to the United States. I suggest that the Minister of Finance is the greatest extravagance this country has. Any man who sells out industries with a total production in excess of $120,000,000 is a great extravagance for any country, and that is what our Minister of Finance has done.

The Budget-Mr. Clark


Mr. RALSTON:: Does the hon. member suggest there should be higher duties ou automobiles and agricultural implements?


John Arthur Clark: I suggest that the government is possessed of the power and has the information necessary whereby every agricultural implement used in this country could be produced in Canada without increasing the cost. The cost has gone up since my hon. friend's government tinkered with the tariff three or four years ago.


James Layton Ralston: I am still waiting for an answer to my question.


John Arthur Clark: The hon. gentleman does not need to wait for an answer; what I have given is a complete answer.


James Layton Ralston: I asked if the hon. member would raise the duties.
Mr. CLARK I would adjust the tariff in a manner which would result in these agricultural implements and motor cars being manufactured in Canada. That would solve the immigration problem and another minister, who is our second greatest extravagance, the Minister of Immigration (Mr. Forke), might then become an asset, because then and then only could Canada have an effec-tice immigration policy. When my hon. friend sees the folly of importing $120,000,000 worth of goods in two industries alone, every item of which could be produced here, he will then be in a position to do some good work for his country. He cannot do it now with the policy he is following.


James Layton Ralston: The hon. gentleman will
not say whether that is his remedy; I have not heard of any other remedy except raising the duty.


Mr. MANION:: We are not trying to convince the hon. gentleman.


James Layton Ralston: The remarks seem to be
addressed to me.


John Arthur Clark: My hon. friends have established the tariff commission, which might be classed as the third greatest extravagance of this country. It has been the means of disseminating political propaganda through this country but it has been the most useless thing the country has ever seen. It costs about $120,000 per year, and there must be an additional cost of upwards of $200,000 to the companies who are dragged to Ottawa and put to the inconvenience and expense of retaining counsel to defend themselves against attacks inspired by members of parliament organized under the guise of a Consumers league. One hundred and fourteen industries have been investigated, but
no constructive action has been taken by this government. It has been a mere useless camouflage, and the hon. gentleman is a party to it.


James Layton Ralston: I am still waiting for an answer.


John Arthur Clark: You will get your answer
after the next election.
One does not have to look very far to discover the reasons for the prosperity that exists in Canada to-day. The abnormal wheat crops of the past two years are something for which this government should thank Providence every, night. Another outstanding reason for this prosperity is to be found in the stock market. The market value of one mine, the International Nickel Company, has risen in three short years from about $100,000,000 to $1,200,000,000. That is greater than the gross agricultural wealth of the province of Alberta; greater than the gross agricultural wealth of the provinces of Prince Edward Island, Nova Scotia, New Brunswick and Manitoba combined; and within $100,000,000 of the agricultural wealth of Your Honour's own province of Quebec. Mr. Speaker, think what it would mean if the wealth of your own province could increase twelve hundred per cent in three years. What would that mean to your province and to the country at large? Think of the prosperity that would result if the agricultural wealth of the provinces of Prince Edward Island, Nova Scotia, New Brunswick and Manitoba increased twelvefold in three years. That is what has happened with this one mine, and there is nodoubt that thousands of people have reaped their total prosperity through the increase in the value of that stock. Another illustration might be the Consolidated Mining & Smelting Company. That stock has increased three thousand per cent in a very few years. The people of Canada can thank their natural resources for their increase in wealth and for the present prosperity of the country. What has this government done to assist in the discovery of these mines, to increase their production to find markets for them? The French treaty?
I am sorry the Minister of Finance (Mr. Robb) is not present, because next to giving a market of $120,000,000 to the automobile and farm implement industries of the United States, perhaps the French treaty is his greatest extravagance. Last year that treaty cost Canada $23,500,000. Our adverse balance of trade with France was $16,500,000, whereas our favourable balance before the treaty was negotiated had been $7,000,000. The Minister of Finance represented to the house that that treaty would be of value for
The Budget-Mr. Clark

marketing nickel products. I take nickel products as an example. Under that treaty we sold France $19,000 worth of nickel, and that is typical of what that treaty has done for Canada. It has 'been one of the poorest pieces of business ever transacted by this country and one of the best for France.
While we are on the question of extravagances I might mention, apart from the purchase of a $10,000 car for the Minister of Agriculture (Mr. Motherwell) to tour Europe with, apart from the European trip which he gave his chauffeur; apart from extravagances in the constituency of the Minister of Trade and Commerce (Mr. Malcolm)-and incidentally it might be observed that the Minister of Trade and Commerce still has a duty of 30 per cent on his furniture. What are the hon. member for Weyiburn (Mr. Young) and the consumers league going to do about that?


Mr. YOUNG (Weyburn):: What about the duty on coal?


John Arthur Clark: Apart from the $3,000,000 wasted in tearing down revenue-producing properties in Ottawa in order to produce a tiny park, the interest on which investment is going to cost the country $150,000 a year plus the upkeep, we find another extravagance which I do not think has been mentioned in the house this year. That is an extravagance on the part of the Minister of Public Works (Mr. Elliott) in the purchase of the New Edinburgh mills. That purchase is one of the most disgraceful performances we have had with public money in this country. The purchase cost the country the sum of $525,000, and, according to the minister's own statement, it will cost $125,000 to make it habitable. It is a place hardly fit for a stable but it is to be used to house the Bureau of Statistics although it is inconvenient to members Who use the bureau most of all. It is a property unsuited for residential purposes, unsuited for stores, unsuited for every commercial purpose, except possibly a warehouse or a factory, and it is very much antiquated for that. In fact it could not be used for those purposes to-day. The Minister of Public Works said that it had some water-power connected with it, I think 2,000 horse-power, but with the hydroelectric development surrounding Ottawa, any development of 2,000 horse-power, even for a particular industry, will never be undertaken again because the cost would be prohibitive. That amount of power can be bought much more cheaply from the hydro power companies or from the Hydro-Electric Power Commission of Ontario. That amount

of $525,000 plus $125,000 to make the property habitable, or a total of $650,000, is money thrown away. That money might have been spent more advantageously anywhere within the vicinity of these buildings, have beautified Ottawa and have given to the public service of Canada a useful asset.
We have a new bridge up the Ottawa river. I mention this bridge because recently in Vancouver we made a request of the government for a contribution for a. bridge crossing a public harbour, thereby making necessary a draw. The bridge is going to carry rail traffic, giving facilities to the Canadian National in the city of Vancouver. A small contribution was asked of this government for that purpose, and it was refused, yet a bridge for the beautification of Ottawa is built without any hesitation whatever. Where a bridge is going to serve a commercial purpose and Where it is going to cross a harbour which, admittedly, is the second most important and in the not far distant future will be, I believe, the most important harbour of this country, a small grant in. order to make that harbour safe is refused. Other similar instances might be mentioned.
What I have stated does not exhaust the extravagances of the government. I notice a despatch from Vancouver dated March S which states:
. A select committee of the legislature started out this morning to investigate the secret service liquor fund. .	.	. Andy Blygh, former
justice of the peace in Vancouver, said he was paid $165 a month by the Liberal attorney general and part of his duties was "to anticipate the arrival and public appearance of Liberal cabinet ministers from Ottawa and Victoria and to arrange for an enthusiastic audience, plenty of hand clapping and cheering, so as to make a public impression of hearts welcome and enthusiastic reception."
I wonder how this is going to be carried on now that their allies have been ousted from power. Will the Minister of Finance grant supplementary estimates for that purpose? He got quite a good reception there last year. I do not know whether it cost one month's pay to Andy Blygh or not. We would like to see him there again and I -think we would give him an excellent reception foT nothing.


Mr. CHAPLIN:: They say the Minister of Trade and Commerce got a better one.


John Arthur Clark: I do not know what that
cost. My time is drawing to a close and I am sorry it is because I (have a good deal more that I could discuss with -the government this afternoon. However, before I take my seat

The Budget-Mr. Pouliot
I should like to direct attention to the statement of the Minister of Finance in regard to debt reduction. I note that the public accounts show a debt reduction from 1922 to 1928 of some $126,000,000, and a further general reduction for the current fiscal year of $69,000,000 making a total of $195,000,000 of reduction since 1922.
I have before me, Mr. Speaker, a list of guaranteed securities of the Canadian National Railways which have not been taken into consideration in that' net reduction. They amount to $327,000,000. I realize, of course, that some of those guaranteed securities were guaranteed for the purpose of refunding-:n all, I believe about $150,000,000 refunded from cash and guaranteed securities.
If, Mr. Speaker, these figures are analysed it wild be found that there has been no debt reduction whatever, if the same system were followed to-day as was followed up to the time when Mr. Fielding left the office of the Finance department. And I would like to point out also that year after year some of the reported surplus has been swelled by moneys, which, Mr. Speaker, were paid to this country for the benefit of widows, orphans, and men who have been maimed or suffered loss and who Should have received those moneys years ago. This country now has in its possession $15,000,000 to pay reparations provided for under a treaty, claims little in excess of $4,000,000, and yet the Finance minister retains those moneys and annually permits his surplus to be swelled thereby.
I would like to appeal to the sense of fairness of the Finance minister, and to the sense of fairness of this government, that they should no longer hold these moneys, that they should no longer permit the annual surpluses bo be swelled by moneys that rightly belong to men who served their country during the war, or to their widows and their orphans, and their dependents generally.


Mr. J. F. POULIOT (Temiscouata):: Mr. Speaker, I have just a few words to say to my hon. friend from Vancouver-Burrard (Mr. Clark). He spoke about the Edinburgh mills. We have there the. bureau of statistics from which we get very valuable information, and if he had obtained his information there instead of finding it in American magazines or publications, he would have been more accurate in his quotations.
I wonder if the house should be thankful to my hon. friend for the tip he gave us on International Nickel? I wonder if the stock will go up now. In any event, however, I 73594-53
entirely disagree with him on the matter. I have been telling my people that it is a very dangerous practice for them to trust to the stock market. No doubt some make money but they are the exceptions. They are few, and if my hon. friend is one of the few, I wish to congratulate him. But the vast majority of the people do not make money on the stock market.
As to the hon. the Minister of Agriculture (Mr. Motherwell), we disagree again, because I think he is one of the ablest ministers oi agriculture that we have had in this country since confederation. And I am very sincere in praising his accomplishments. If Canada is prosperous to-day we owe it first to Providence, and then to the government, because Providence is acting through the government in those accomplishments.


Peter McGibbon: The answer is, their cup of inquity is not yet full.


Jean-François Pouliot: We believe in Providence on this side of the house, and we are very glad that toe good years in Canada are the years during which the Liberal party have been in power. It reminds me of what the acting leader of the opposition (Mr. Guthrie) said the other day in his very illuminating speech. He said that toe surpluses at toe time when the Tories were in power were much bigger than the present surpluses under the direction of the very able Minister of Finance (Mr. Robb). Well, there is a great difference. The surpluses before 1921 were made of borrowed money, and the surpluses these last few years since the Liberals have been in power are, in fact, made up of earned money. As I say, there is a great difference.


Richard Bedford Bennett: May I correct the hon.
gentleman? The surpluses were surpluses of the consolidated revenue fund and did not include borrowed money. The borrowed money was to pay for demobilization and railways.


Jean-François Pouliot: I see that my hon. friend (Mr. Bennett) is just as mixed up as his acting leader.


Richard Bedford Bennett: See pages 44 and 45 of
the public accounts.


Peter McGibbon: What is a surplus, any
way?


Jean-François Pouliot: I did not mean to deal
with my hon. friend from Muskoka (Mr. McGibbon) just now, because I hope to quote him later on.

The Budget-Mr. Pouliot

With regard to the grading and standardization of farm products, the Minister of Agriculture the other day said:
But the policy we have adopted has been commended by those who are buying our goods, and I am encouraged to go forward in a policy of grading.
And he added:
I look for some measure of support, if not from my friends immediately opposite, then from the balance of the house in carrying forward this policy of standardization of the remaining articles that are the be dealt with.'
I think it would be just as well to quote my hon. friend from Muskoka now. I wish to say something about dairy products, and I am very glad that he mentioned the fact that the cattle herds have been reduced in all provinces except in Quebec and British Columbia. That is why I want to quote my hon. friend.
I have the report of the Minister of Agriculture for the year ended March 31, 1928. Quebec sold 294,197 packages of first class pasteurized butter-0.6 per cent of special,
92.1	per cent of first, 7.0 per cent of second and 0.3 per cent of third. That was for 1927. That shows a large increase over 1926. In
1926,	220,528 packages wer sold in Quebec-special, 1.1 per cent; first, 88.7 per cent; second, 9.4 per cent; third, 0.8 per cent.
With regard to unpasteurized butter, I am pleased to be able to state that in 1927, Quebec sold 87,122 packages, 74.7 per cent first quality, 24.2 per cent second quality, and
1.1	per cent third quality. Ontario during the same period, 1927, sold 47,179 packages of butter-78.0 per cent first, 20.9 per cent second, and 1.1 per cent third.
Ontario, on the other hand, produces more cheese than Quebec, but I am glad to say that the province of Quebec is the banner province with regard to the butter industry.
Grading has resulted in great improvement in quality and, as the records will show, it has brought about a much more satisfactory condition for producers and manufacturers. The average price of first class butter per pound is as follows: 1923, 38-4 cents; 1924, 37-2 cents; 1925, 39-4 cents; 1926, 39 cents;
1927,	40 cents; July, 1928, 40 cents; August,
1928,	41 cents; September, 1928, 43 cents; October, 1928, 42 cents; November, 1928, 43 cents, and December, 1928, 43 cents. The price has increased since 1925, the year in which the Australian treaty came into force, in spite of what was said in this house by the former member for South Oxford, our genial friend Mr. Donald Sutherland, who spoke on the matter at great length when the treaty was under consideration. I see by my hon. friend's

smile that they remember the occasion very well. At that time we were warned that Canada would become bankrupt by the operation of the treaty but as a matter of fact it has done no harm to our commerce.
The farmers in eastern Canada are complaining that the price of potatoes has gone down this year, but it should not be forgotten that the price varies according to the demand. Larger areas were cultivated and the yield per acre was greater in 1928 than in the previous years. Therefore the larger supplies depressed the price and it went below fifty cents a bushel. Not so good as International Nickel.


Mr. HANSON:: Or butter.


Jean-François Pouliot: That shows that there will be a continuous market for seed potatoes. Then I have another interesting despatch which appeared in the Montreal Gazette of December 10, 1928. This is fAm Fredericton, New Brunswick, and is as follows:
New Brunswick seed stock, although of high quality, is meeting severe competition because of the heavy yield of potatoes in all sections of the country. A considerable movement of seed potatoes took place during November with the states of Maine and Vermont taking the shipments. Other shipments are on order and will begin to move in January with others following in February and March. Virginia and North Carolina will take the bulk of that with some going to Long Island. The first of the shipments now on order amount to 15 carloads.
Fifteen thousand bushels of seed potatoes moved out previously. A price of $2 and $2.50 per barrel was paid for the best.
Then follows a despatch from Charlottetown, Prince Edward Island, as follows:
A total of 1,094,580 bushels of potatoes were shipped from this province during November, 719,250 bushels going by rail and the remainder by water from the following ports: Georgetown, 271,547; Summerside, 145,716; and Charlottetown, 58,067.
About 560,000 bushels of table stock were shipper to Ontario this season, and 150,000 bushels to Quebec.
I have here an interesting article written by Mr. D. Baribeau, of the Department of Agriculture, which appeared in a Rimouski paper Le Progres du Golfe, under date of .February 22. It is very short, and I will read it:
It may be inquired how this decrease in the potato crop of the province of Quebec can be overcome and outside competition met. Just simply (1) procure seed potatoes from certified stock (that is the main and indispensable requirement, without which you will^ not succeed in lowering the cost of production. Prince Edward Island sows 65 per cent of its area with certified seed stock and note the yield per acre). (2) Set aside a portion of land in order to maintain the yield of certified seed stock at its maximum. (3) Reduce the sown area, have a better prepared soil and make use of chemical fertilizers. (4) Sow the variety or varieties which the market demands. (5) Spray thoroughly with Bordeaux mixture. (6) Uniform grading of the varieties which are the most popular on our markets.
Now, Mr. Speaker, may I point out to this house the importance of this trade, which is of interest not only to my province or my section of that province but to all the provinces of Canada, because farmers everywhere grow potatoes. Although I am not a technician in this matter I will take the liberty of submitting some proposals which would perhaps improve not only the production, but also the sale of potatoes. No farmer in my constitu-

ency would ask for potatoes the price that was paid during the war owing to peculiar circumstances; they would be very well satisfied with an average price of $1 per bushel, and I think the consumer could not complain, of thal price. First I would ask the Minister of Agriculture to see if something could not be done in regard to the grading of potatoes, because it is very important that different grades should not be mixed. You may have a very good brand of potatoes, but if they are mixed with other potatoes they cannot be used as seed stock. That is my first point, and my second is that potato sheds should be built at railway stations by the provincial governments. The government of Quebec had this in view for some time, but the idea was finally abandoned. I think this proposal should be revived, because if there are sheds built something like the grain elevators, although not so large, where the potatoes could be placed and where Green Mountains, for instance, would not be mixed with Early Roses, it would be a great advantage to the farmers, and I believe our provincial governments should undertake that work.
My next point is that there should be a reduction in railway freight rates and also in maritime rates, because if we are to get new markets it must be made easier to ship our products to those markets. I take this opportunity of thanking the Minister of Agriculture, the Minister of Railways and the officials of the Canadian National Railways for what they have done in that direction. One cannot forget that the government does everything possible for the farmer.
My last point is that we should promote the organization of cooperative societies for the exportation of farm products. It is very hard for a single farmer to send his products to Hong Kong, Bermuda or anywhere else abroad; there must be something in the nature of a cooperative movement by which the farmers may be brought together. This might be done by means of the agronomists who are employed by the provincial governments; there are two of these gentlemen in my county, very able fellows, and I think they might organize cooperative societies and also try to locate new markets for farm products, especially potatoes. I believe if this plan were carried out it would be of great advantage to our farmers. This system has been put into force already; a cooperative movement has been organized, under the direction of the provincial agronomist in connection with maple products, at Compton, Quebec, as published in L'Action Catholique of February 7th last.

The Budget-Mr. Hanson
I have another article here by a professor at the university of Fribourg. This does not deal with potatoes, but covers general cooperative associations for the exportation of farm products. This method of procedure has been carried out in New Zealand in respect to dairy products, and it has been shown to be very successful. Under the circumstances, I hope the federal and provincial governments will continue to do what they can to relieve this situation.
What has the Department of Agriculture done with regard to the dairying industry? We have cargo inspection, iced butter ear service, iced cheese car service, dairy news letters, dairy market intelligence, subsidies to cold storage warehouses, creamery cold storage bonuses, research in dairying, the excellent administration of the Dairy Industry Act and milk utilization service. There is a useful cold storage warehouse in my county, which has been operating very well. I hope that what has been done for the dairying industry will be done for the potato growers and that both will be equally successful in the future.


Richard Burpee Hanson: Mr. Speaker, I desire to congratulate the hon. member for Temiscouata (Mr. Pouliot) on the amount of research which he has evidently made in the preparation of his speech. I am sure when all these figures reach his constituents that they will be very much elated at the effort he has made. I was struck with the tribute which he paid to the Minister of Agriculture (Mr. Motherwell) in connection with the prosperity which is alleged to be prevailing in this country. He put the Minister of Agriculture (Mr. Motherwell) on a pinnacle and it was a long time before I could understand why he was doing it. But in the latter part of his speech the nigger in the wood pile appeared; the Minister of Agriculture and the Minister of Railways (Mr. Dunning) have given the farmers of Temiscouata, Rimouski and Bonaventure counties a special freight rate on potatoes-that is the reason we have had this paean of thanks to the Minister of Agriculture this afternoon. If the Minister of Agriculture is entitled to all the encomiums which the hon. member has given him this afternoon, then I can only say in words of the poet Cowper:
God moves in a mysterious way His wonders to perform.	[DOT]
I am sure the Minister of Finance (Mr. Robb) will not expect me to waste any time on empty compliments to him. I intend to devote a few minutes to some general observations on his budget, but before I do so
I want to take this opportunity of placing on record my appreciation of the magnificent speech which was made by the hon. member for South Wellington (Mr. Guthrie) on Thursday last. I have been a member of this house for some eight years and I think I can truthfully say, and I believe hon. gentlemen on both sides of the house will re-echo the statement, that there has never been a more forceful, clearer or more courteous exposition of the budget made by an opposition critic, and we have had some very able opposition critics during those years. I hope that the message contained in that speech will not only get across the floor of this house but get across to the people of this country. It would do a world of good if that could be the case.
With all due respect to the Minister of Finance, for whom I entertain a very high personal regard, I would say that during the six years he has occupied the position of either Minister of Finance or acting Minister of Finance, we have never had a real budget, such as the term is understood in England, on the financial condition of this country. Budgets may be viewed from two or three aspects. We have had a resume of the country's business for the preceding year; we have had certain taxation proposals and readjustments, but we have never had in any one of the budget speeches which he has delivered a straight categorical statement of the fiscal policy of this country, or any policy upon which the business men of Canada could build for the succeeding year. Apparently the Minister of Finance considers that there is only one aspect to a budget; a mere tabulation of fiscal and trade figures. Viewed in that light his budget is clear and illuminating, and to that extent he is to be congratulated, but from the standpoint of its being a disclosure of public policy it is as disappointing as it is gratifying on the former count. We have never had from him any estimate, based on announced fiscal policy, of the result of the nation's business for the ensuing year; we have never had submitted to us in any one year a true balance sheet of the country's business. Any hon. member who is interested in corporations knows that there are many ramifications in business; that many companies have subsidiary companies, and it is invariably the custom that every company submit annually to its shareholders a consolidated balance sheet, not. only of the parent company but of all the subsidiary companies. We are the owners of the entire issued capital stock of the Canadian National railway system, and I believe it is the duty of any Finance minister, no matter what his predecessors may have done in that regard, to submit annually to the people of Canada a
The Budget-Mr. Hanson

consolidated balance sheet which will take in the assets and liabilities of that great system. We have not had that from the minister, and that is one of the things for which I think he is to be criticized.
Why was this budget brought down on Friday last? Some wag on this side of the house has said it was because there was no meat in it. There was some meat in it, as that, of course, was only by way of a passing joke. Undoubtedly the Minister of Finance was anticipating the inaugural address of Mr. Hoover. Mr. Hoover has delivered that address and it is now an assured fact that he will implement his promises by both executive and congressional action. Friday's papers announced that congress had been called to meet in a special session on April 17th. The call for a special session of congress proposes legislation for agricultural relief and limited changes in the tariff. The proclamation says:
These matters cannot, in justice to our farmers, our labour and our manufacturers, be postponed.
Those are very significant words for the people of Canada. We may expect, and undoubtedly we do expect, that tariff schedules aimed directly at the agricultural production of this country, if not against other production, will be the	direct result.	What is	theattitude of this	government?	We	do	notknow. If we are to judge from the statements of the Minister	of Finance in his	budgetspeech; if we are to judge from the veiled references in the minister's statement, the administration intend to adopt a policy of " watchful waiting." That is the policy which destroyed	Mr. Asquith,	and	let	me
tell the Minister of Finance that that policy will destroy him and his government. Are we not entitled at this juncture to something more specific than the veiled references contained in the speech of the Minister of Finance? Is there in this country anyone, aside from the blind partisan followers of the government, Who can view with composure such a declaration of "watchful waiting"? Is there anyone who believes this government, when they are actually confronted with the situation which will undoubtedly arise in the next few weeks, will rise with the weapons that are available to meet that menace? I use those words advisedly, because the action of the United States congress will be a menace to this country and it is up to our people to protect themselves. If there is any doubt upon this point, an analysis of the budget speech of the Minister of Finance, shows that he makes one specific declaration

which to me at all events is very significant. I refer to his statement that-
The policy of this administration is not a high tariff policy; it is a low tariff policy.
When he nails his colours to the mast on a low tariff policy he turns his back upon the only effective weapon he can use against the menace to which I allude. In other words, he has wiped out from under his own feet the only ground upon which he can effectively stand when the time for action comes. Such a declaration indicates to me but one thing-the unwillingness of the administration to use the only weapon at its command, namely, the application of the principle of protection. The situation cannot be better met than by the method indicated by the acting leader of the opposition in his speech in the house last Thursday. As reported at page 757 of Hansard, He raid:
So far as I can see, any difficulty that may possibly arise in the future can be completely overcome by action on the part of this government and of this parliament. We have nothing to fear in Canada in this respect, though 1 grant that we are going to reach as last a situation

if things develop as I anticipate they will-in which we must introduce into the tariff of this country, to protect our own people, that element of protection which the Canadian tariff does not now afford.
On the next page he advocates:
A radical change in our fiscal policy will soon be necessary; the government must face this situation. They can do it; we know what we can do in this country; we have everything at our disposal. Do not let us have stage fright and do not let us feel any over-anxiety in regard to the matter. The matter rests entirely in our own hands. AH can be put right, and if this government does not put it right another government will take its place in the very near future.
Does anybody believe-and I say this with respect-that the Prime Minister, in view of his well known past history, in view of his well known affiliations of the past, in view of the fact that for years he has advocated and when in power has put into execution a policy which has made for the peaceful penetration of the business of (this country and the absorption of its industries and natural resources by United States capital, will do anything to protect this Dominion? Does anybody believe that the Minister of Finance, a low tariff man, will willingly use the only effective weapon at his command? Rather shall we not see again the spectacle of the government turning the other cheek in the face of hostile United States tariff schedules? Time only will tell, but a policy of "watchful waiting" should not be the declared policy of this country at this

The Budget-Mr. Hanson
juncture. A declaration of virile Canadian independence ought to have been made in the fiscal budget. Such a course would have won the respect of and, I fully believe, would have been heeded by those now framing the proposed tariff schedules for presentation to congress.
The Minister of Finance in his remarks spoke of the optimism which is now obtaining in Canada, and I agree with him there is optimism. We have always been optimistic; those of us who believe in this country are optimistic and I associate myself with what the Minister of Finance said in that regard. But there is a vast difference between optimism and prosperity. The one is the hope, the wish for things yet to come; the other is an accomplished fact, and I deny absolutely that there is universal prosperity in Canada. If anybody does not believe me, let him come down to New Brunswick and mingle with the agriculturists and industrial people of that province. Last year we had tinkering with the tariff schedules; we had readjustments of the tariff, and the effect of those readjustments on the cotton industry in my constituency robbed the operators in that industry of eight per cent more of their labour and wages. In other words, they are receiving eight per cent less than they did the year before. They have been on short time practically every year since he and his government came into power, and to-day in the cotton industry, in the cotton mill town in my constituency the operators are feeling the direct pinch in the lack of wages. That has been the result of the minister's interference with the tariff schedules.
In reference to the agricultural population, we grow more potatoes in New Brunswick than in any other part of the Dominion of Canada. Can there be prosperity among the agriculturists of New Brunswick with potatoes at thirty cents a barrel, which was the price payable for potatoes in my province just prior to my coming to Ottawa The farmers of New Brunswick are going bankrupt; you cannot prate about prosperity to a farmer who cannot pay his fertilizer bill. That state of affairs is not by any means confined to New Brunswick. A similar state of affairs prevails in Prince Edward Island, Cape Breton, Nova Scotia, anywhere you like, and before I conclude my remarks I shall have something more to say about the potato business.
I do not intend to refer at any length to the dairying industry and to the losses which our farmers have sustained by reason of the importation of so much New Zealand butter.
But would you believe, Mr. Speaker that today we are eating New Zealand butter in the restaurant of the House of Commons? I know the Ottawa Dairy Company imported six carloads of it within the last few weeks. That is butter that should be produced and sold by Canadian farmers. I believe the Minister of Finance made the greatest slip in his whole history when he put through the Australian treaty and forgot about New Zealand and its right to come in under the provisions of that treaty.


James Dew Chaplin: They deliberately added
New Zealand afterwards by order in council.


Richard Burpee Hanson: While I am speaking about optimism and the condition of our farmers, I should like to refer to the delay of now nearly two years in putting into effect the Farm Loan Act that was passed by parliament in the session of 1927. Everybody knows that that legislation was put through the house and the act brought into effect with the greatest reluctance on the part of the Minister of Finance; that it was put through at the behest of the western farmers who, at that time, had a real need for such legislation. The scene has changed; a few good crops have obviated the necessity for the application of that act in the west, so far as I have been able to learn-


Some hon. MEMBERS:: No.


Richard Burpee Hanson: -but the necessity for the act in the east is most imperative and it is nothing short of an outrage that two years have been allowed to go by without the will of this parliament having been put into effect by the Department of Finance. I make no criticism of the appointment of Doctor MacLean as chief of the Canadian' Farm Loan Board. I am told he is a good man. It may be that political pressure was brought to bear upon the minister to appoint him. I do not make any such charge, but what I do complain about is the delay in putting the act into effect in the province of New Brunswick, which accepted it from the very beginning. And I want to go a step further and say that there have been a good many complaints among the farmers in New Brunswick because they could not get the benefits of that act. We have in the province of New Brunswick to-day, organizing for the Liberal party, a gentleman who was formerly a Progressive member in this house, a loud-mouthed member, who sat here in the front seats year after year; and he had the audacity to go around the province of New Brunswick and say that the Farm Loan
The Budget-Mr. Hanson

Act had not been put into effect there because the provincial government had not requested it. The Minister of Finance knows that is not so. He knows the provincial government accepted it from the very beginning, and they are anxious and willing to have it put into effect. I myself have had applications from-I was going to say hundreds, but I will limit it to dozens of farmers, who find themselves in the position where they must have relief or go into the bankruptcy court, and I ask the minister to put that act into effect in the province of New Brunswick at the earliest possible moment.


Mr. ROBB:: May I reply to my hon. friend now on that point? We will put it through just as soon as the provincial legislature passes its corresponding legislation.


Richard Burpee Hanson: He laughs best who laughs last. I am informed by the Attorney General of that province that the legislation to which the minister refers was put through in 1928.


Mr. TOTZKE:: It is only March yet.


Richard Burpee Hanson: That is twelve months. How long does it take to make this great body move?
I wish to say a few words with respect to the national railways, I do not want anyone to say that I am an enemy of the Canadian National railway system. I had the honour for ten years, from 1911 to 1921, to be general counsel for the Canadian National Railways in the province of New Brunswick. I devoted a very large portion of my professional time to their service, and I think the Department of Justice will say that I won more lawsuits for them in New Brunswick in that period of time than all the ten thousand dollar counsel they have employed since.
Much of the railway history that was given by the member for South Wellington in his illuminating address last week was news to me. I was not a student of what took place in this house in 1919 to the extent of going deeply into the political events of that time. But I have had occasion to verify some of the things the acting leader of the opposition said, and if all he said is true, as I believe it is, the attitude of the present administration with respect to the national railways-save and except the Minister of Customs (Mr. Euler), who ever since he came into this house, and even before, has been a friend of the national railways-the attitude of the present administration in respect to the national railways is one of pure effrontery. Go back to 1919 and read the records for yourself; read the part that was played by 
the Minister of Finance. I wonder that he does not often blush at his action of that day. If you want any confirmation of the attitude of the Liberal party go to the session of 1922 when the railway estimates were under consideration in this house and read what Mr. Walter G. Mitchell, then member for St. Antoine division of the city of Montreal, said in a prepared brief on this very question in which he condemned the action of parliament in nationalizing the railways. Mr. Mitchell on that occasion, if I remember aright, made just half a speech. He got to the point where he condemned the action of the government, but he had no alternative proposal to offer. The Liberal party accepted that brief. It was their only attitude, it was the only policy they ever had-and again I want to except the Minister of National Revenue, because I heard him stand up against his own party in respect to this very matter, and I want to give him due credit for honesty of purpose.
When the party opposite were confronted with the responsibility of power, however, we had a change of attitude. We had the adoption of the policy of "fair trial," and I congratulate them upon their change of heart. It is very difficult, I know. It is very difficult in domestic life to take in an orphan child and treat it as your own. So far as they have done so, however, the government are to be congratulated upon having given the railways a fair trial-if they have done so. But I want to make the assertion right here that the government, at all events certain portions of the government, have not been free from political interference in the matter of the operation of the Canadian National railways. They have said that they have taken the adtninistration of the railways out of politics. Well, perhaps they have. I hope they have. So far as I can speak as a member of parliament, I sincerely hope that the administration of the national railways is out of politics. But there are so many evidences accumulating on every hand that they are not out of politics that one begins to wonder at the good faith of the declaration of the government. If I were to go down to the city of St. John I could show you a defeated candidate who takes upon himself the burden of saying who shall be appointed as sectionmen on the national railways in that city.


Richard Bedford Bennett: One of the ministers
sent a telegram dismissing one.


Richard Burpee Hanson: You will find that the most petty positions are under the thumb of Mr. Ryan, the defeated candidate in the city of

The Budget-Mr. Hanson
St. John; at least, he arrogates to himself that position. I am not going to say anything more about that, but it is petty to say the least.
I have in my hand, however, concrete evidence of direct political interference with ratemaking on the Canadian National railways, and if I wanted any corroboration of it, I find it in the speech of the hon. member for Temiscouata. In the St. John Telegraph-Journal of last Friday, the 8th of March, there appeared an editorial based on an interview with the chairman of the transportation commission of the maritime board of trade. This editorial is headed "Unjust Discrimination," and I commend it to the Minister of Railways, who, unfortunately, is not in his seat. I also commend it to the Postmaster General (Mr. Veniot) who will please bring the matter to the attention of the Minister of Railwaj's. The St. John Telegraph is a journal which once thought very highly of the Postmaster General; in fact, I think it does so yet. I quote it to him:
In granting special emergency rates on potatoes to shippers in the Matapedia valley-
Please note that the Matapedia valley is that portion of the province of Quebec comprising the counties of Rimouski and Temiscouata, and possibly the county of Bonaventure. I think it would be fair to say that Bonaventure is included in it. It goes on:

without extending similar reductions to dealers in the maritime provinces, the management of the Canadian National railway committed an act which has been interpreted as unjust discrimination against the shippers east of the Quebec province boundary. While the reduced freight tariff was put into effect, according to a note on the face of the tariff, "to assist in meeting adverse agricultural conditions temporarily in the limited section from which it is applicable," similar conditions have been troubling the potato shippers of New Brunswick, and consequently they should have received the same consideration as did their neighbours in the province of Quebec.
Why the Canadian National railways should mete out one kind of treatment to an agricultural community on one side of the Quebec-New Brunswick border, and deny the same treatment to those residing on the other side, and being in a similar plight, is more than the people of New Brunswick can understand.
Will the house please note this:
The railway made the keeping of the reduced tariff in force contingent upon there being no objection to it from other localities. In other words, they shifted the responsibility for its cancellation onto the shoulders of the potato growers and shippers of New Brunswick and of other places who might disagree with the favoured treatment accorded the Quebec potato men. This is unjust, and has placed the maritime potato shippers in an awkward position-if they object, they lay themselves open to a
charge of having injured their fellow potato dealers in another province-if they hold their peace, they must face a discriminatory freight rate against them.	_
The logical and only fair solution of the question lies in the Canadian National railways maintaining the reduced rate to the potato dealers in the Matapedia valley and extending it to those of the maritime provinces.
This afternoon we had public thanks given by the member for Temiscouata to the Minister of Railways and the Minister of Agriculture for their action in getting that reduced discriminatory rate in favour of the potato growers in the Matapedia valley and against the potato producers of the province of New Brunswick. They are told: If you object to this rate being given to the Matapedia valley potato growers we will cancel it. In other words, they place on New Brunswick the burden of saying: You have been unjust to us and have favoured Quebec. I do not blame the member for Temiscouata for asking for that reduced rate. There is a distressed condition among the potato growers in eastern Canada, but we are ten times more entitled to a reduced freight rate in Prince Edward Island, New Brunswick and Nova Scotia than they are in the province of Quebec, because we are just that further away from the Montreal and Toronto markets. When the railway does that and attaches the rider that I have read, I think the situation is almost hopeless. I lay the charge, believing it to be true, that political interference has brought about this special rate, and that it was granted at the instance of the federal members from the province of Quebec working through the Minister of Agriculture and the Minister of Railways.


Jean-François Pouliot: May I correct my hon.
friend? The request was made by the Department of Agriculture of Quebec.


Richard Burpee Hanson: All right; it is political
action again, and it makes the situation worse. I am glad to have the admission. Representations indeed were made through a certain channel by the hon. member for Temiscouata. If he was alive to his responsibilities as the federal representative for Temiscouata it was natural for him to do what he believed to be his duty when he requested that special rates be given in the circumstances; but 1 object to the discrimination against the people of my province, and the government have not heard the last of it, neither have the management of the national railways.


Mr. MacLEAN (Prince):: My hon. friend
I believe would like to be fair. There is a special rate to the other provinces.
The Budget-Mr. Hanson


Richard Burpee Hanson: Certainly I want to be fair, but the hon. gentleman does not know what he is talking about. I hold in my hand the report which appeared in the St. John Telegraph-Journal, which quotes verbatim a part of the order. It reads as follows:
This emergency tariff is issued to assist in meeting adverse agricultural conditions temporarily prevailing in the limited section from which it is applicable and expires with April 30th, 1929, unless sooner cancelled, changed or extended.
In reply to a query from Mr. Paterson as to whether the same reduction could not be made applicable to maritime shippers, Mr. Cornell wired as follows:
"Canadian National advise that rates were made from Matapedia valley under distinct understanding that same would be cancelled if any apposition were made by other shippers, and will not make any change in maritime rates."
So the hon. member for Prince does not know what he is talking about-unless it is something that has taken place since last Friday. Perhaps he has got something for his constituency?


Alfred Edgar MacLean: No. The rate was put through over a month ago and was published by the national railways. It is applicable to the three provinces. If this is a further reduction, I am willing to be corrected.
Mr. HANS'ON: This is a special privileged rate. Let me quote the following for my hon. friend's benefit:
The reduction is applicable to potatoes shipped from
L'Anse a Giles, Matapedia. Mont Joli, Mont-magny, Riviere du Loup, St. Alexandre, St. Andre, St. Charles, Ste. Florence, St. Francois, Ste. Louise, St. Pacombe, Sayabec and Tobin, all in the Matapedia valley.


Jean-François Pouliot: Is my hon. friend against that reduction?


Richard Burpee Hanson: No, I made that quite plain. I am against the discrimination. Not only am I against the discrimination, I am against the political interference with the national railways. I would not think of asking Mr. Appleton to put in a special rate for the county of York-Sunbury. I know he would turn me down; it would not be wise for me to make the request.


Jean-François Pouliot: When there were freight rate reductions for the maritime provinces, was there discrimination?


Richard Burpee Hanson: Well, my hon. friend got his share of it.


Mr. SINCLAIR (Queens):: Will the hon. gentleman give the date when the rate went into effect?
'


An hon. MEMBER:: He has already given it.


Richard Burpee Hanson: I will give the hon. gentleman the date. But I have only five minutes more at my disposal, and I do not want to be interrupted if that is the object.


John Ewen Sinclair: No, I simply want the information. Perhaps the hon. gentleman will give the date of the newspaper despatch.


Richard Burpee Hanson: March 8.


An hon. MEMBER:: He gave that before.


John Ewen Sinclair: I thought only one hon. member was speaking from the benches opposite.	[DOT]


Richard Burpee Hanson: One at a time is quite enough.


John Ewen Sinclair: Hear, hear.


Richard Burpee Hanson: One of the professed policies of this administration is the development of inter-empire trade, and with that policy, generally speaking, the Conservative party is in hearty accord provided always-and I want to emphasize this proviso-that such a policy does not involve the sacrifice of any basic industry in this country, such as has happened as a result of the Australian treaty and its effect on our dairy industry. But in the light of this declared policy, what is to be thought of the recent declaration of Sir Richard Squires, Premier of Newfoundland, who recently visited this country, and who in a newspaper interview is reported to have said, in effect, that he found Canada cold to any proposals for closer trade relations? What underlies this statement? A declaration from the Minister of Trade and Commerce (Mr. Malcolm) would seem .to be in order. Newfoundland is one of the oldest British colonies, and is one of our nearest neighbours. We have a large trade with that colony now. There is no reason why we should not have it all. But Sir Richard Squires went to the south of us and got a cordial reception, and before we know it he will have negotiated a trade treaty with the United States that will be altogether to the detriment of Canada, as happened once before.
Connected closely with this question of inter-empire trade is the question of trade generally with the countries of the West Indies and central and south America. I had the good fortune to visit thirteen West Indian and central and south American ports during the month of'January last. Primarily the trip was a holiday, but I had the good fortune to have with me letters of introduction to the

The Budget-Mr. Hanson

various managers, inspectors and supervisors of the Royal Bank of Canada, that great Canadian financial institution which has such extensive ramifications in all those countries. Being keenly interested in the development of trade with these countries, especially as such development may tend to the betterment of the welfare of the maritime provinces, I sought and obtained a great deal of valuable information.
I do not venture to go into any detail in regard to this important subject-time will not permit-but I have one constructive suggestion to make. With the Latin-American countries there is an abundant opportunity to conduct a large and profitable trade, most of which to-day is going to the United States. I found that business men in these Latin-American nations cordially detest the United States and would be delighted to open up new trade channels with Canada, but there is no point of contact save and except through the medium of the bank.
I was told that what is required at the moment are some live trade commissioners who have a competent knowledge of the Spanish language, I commend that suggestion to the minister. That is what the banks do; as far as possible, they train these men before they go there, and on their arrival they rapidly learn the language and become a valuable asset to the banks. I met Mr. Young, our trade commissioner at Port of Spain, Trinidad. I have no doubt that he is doing a good work there, but if one has visited that part of the world one will realize how great are the distances between the various ports and islands and how difficult is communication. Intercommunication between these ports and islands is very slow. Transportation converges on New York or Canada, and one man cannot possibly cover the whole territory. I suggest therefore the appointment of a competent itrade commissioner at Panama, which is the pivotal point and now the most important port on the great highway from North America to South America. Advantage should be taken of the ramifications of the Canadian banks which are located at all these important points. They are willing, indeed eager, to assist in the creation of Canadian trade in this region and I commend this suggestion to the Minister of Trade and Commerce.
Like my friend the hon. member for Fort William (Mr. Manion), I have a suggestion to make to the government, which is this: In view of the impending special session of the United States congress called to meet on the
17t'h of April and the certainty almost of further tariff changes sure to affect adversely Canadian trade with the United States, I suggest to the government, and to the Finance minister especially that this budget be not closed-I do not mean to keep the debate open; God forbid, but I suggest that it is possible to devise some means Whereby, after the tariff proposals presented to congress in special session have become known, this parliament at this session may be prepared to take yand do take, action to protect our position. If you let it go a year it will be too late. That is my word to the Minister of Finance.
I have had large dealings, covering many years, with United States business men, and I find them among the keenest and most honourable business men in the world. At the same time they are hard bargainers, but they respect always the Canadian business man who stands up for his rights and who meets them squarely and on equal terms.	I fear
that the same cannot be said for the average United States politician, but I have no doubt that if this country meets the situation about to be created, resolutely, firmly and with a determination to protect Canadian interests, we shall at once-obtain the respect of that nation and bring them to a realization of the fact-and they are already realizing it, if one is to believe what was written only a day or two ago in the Wall Street Journal and New York Evening Post-that they cannot afford to alienate trade with their best customer. I say therefore to the Finance minister that he should not close the budget proposals, and that if necessary this house should be adjourned, if other business is not available, and reassemble with the idea of dealing frankly and adequately with the situation that is bound to be presented. The Canadian people will expect any government charged with administration of our affairs to meet this situation resolutely and courageously, and if this government does not do it the frowning disapproval of the Canadian people will be manifested immediately and a new government, prepared to face the situation courageously by and through the means that are easily available, will carry out the will of the Canadian people.
What is there in the budget proposals of 1929 which makes provision for reasonable safeguarding and protection of the interest of this country, either agricultural or industrial? Absolutely nothing, and at a time, if ever there was a time when the agricultural and industrial interests, the interests of employer as

The Budget-Mr. McMillan

well as of employee, should be safeguarded and protected. This party to which I have the honour to belong is therefore amply justified in bringing forward such an amendment *to the budget as has been proposed by the hon. member for South Wellington and I heartily give my assent thereto.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. THOMAS McMILLAN (South Huron):: Mr. Speaker, may I ask the attention of the house for a few moments this evening? Notwithstanding all that has been said by hon. members opposite, I consider this country fortunate in having as its Minister of Finance a gentleman of the calibre of Hon. James Robb. The budget which he presented on March 1 is a model of precision; 1 congratulate him on its presentation. It's substance should gladden the heart of every Canadian. It is most encouraging to think that after meeting all our obligations, in six years Canada has been able to reduce her national debt by over 8226,000,000.
The vision of the Minister of Finance enables him to view this country as a great estate, a goodly heritage in the form of a big farm, placed in his charge under a heavy mortgage resulting from the war, and after being exploited by those who seemed willing to do almost anything to retain power and position. Like a thrifty parent with the lasting welfare of a large family at heart he realizes the wisdom of paying off the mortgage before dividing his property. His family is large; their names are agriculture, forests, mines, fisheries and numerous additional secondary births many of which have grown great and vigorous through the support of the eldest son, agriculture, but which persists in asking further nourishment from the same source. This eldest son, agriculture, has been a most dutiful and industrious child; he has toiled and spun; he has sacrificed and given of his substance for the whole family, and no one knows this better than the Minister of Finance. If it were not for the continued stamina of this eldest son the whole family fabric would fall to pieces. But there is some indefinable thing called high protection standing in the way, placed there by a group of trustees into whose keeping the property was confided some years ago, with disastrous results. This doctrine of protection somewhat blurs the vision of the minister and prevents him from seeing as clearly as he might. His 
eldest son, agriculture, is continually endeavouring to appeal to his reason, tr3ring to make him see a little more clearly, but the blur still continues. In that respect his senior partner, the Prime Minister, has no misgivings; his vision is as clear as the noon-day sun. He knows what should be done, but he also realizes that it is not what any great statesman thinks ought to be done, that it is not always wise to attempt at the moment, but rather what step in advance can be taken and carry your countrymen with you.
There is a further difficulty in the way; the same party which fastened that vicious principle upon the economic life of this country is still lurking around the corner always ready to raise the tariff as high as Haman's gallows, as they did on July 13, 1926, the very moment they were sworn in. Moreover, that party now has at its head a brilliant and astute leader whom I greatly admire and whose political ebullitions throughout Canada last year require some consideration. I admire his amazing energy and the spirit with which he endeavours to revive a protective policy which has been rejected by the people of Canada no less than seven times since the beginning of 1896-


Richard Bedford Bennett: And which is still in
force.


Thomas McMillan: -and which was given such a cold shoulder at the Winnipeg convention that they were afraid even to mention the name "protectionist," and where their resolution on trade policies was an emasculated expression disavowing the very name of protection. After having taken such an attitude, and more particularly after their milk and water amendment to the budget last year, why do they not come out boldly and repudiate the whole system? If they would only do that they would be on solid ground and might attain some healthy growth, but instead the old protectionist horse is trotted out once more. It came into sight very clearly the other day, with the leader of the opposition holding a string around its neck and his leading lieutenant hanging on by the tail.
Immediately after the close of last session the leader of the opposition went to Toronto and told his Tory stalwarts that the King government were imposing such a burden of taxation on this country and were so utterly extravagant, particularly with respect to undertakings designed to please their friends, that nothing but an aroused public opinion would remedy the situation. If only he had told his supporters that the King government

The Budget-Mr. McMillan
were standing like watch-dogs guarding the public treasury against the attempted raids of himself and his friends it would have been nearer the facts. Every member of this house knows that when we were considering t'he estimates last year, hon. gentlemen opposite were always asking for increased expenditures; during the course of one day no less than seventeen hon. gentlemen opposite demanded increased expenditures, while just the other day they were highly indignant because this government would not immediately embark on a highway policy which would lead to the expenditure of $200,000,000 or more.
It is well known that the Department of Public Works is necessarily one of the great spending departments of the government; this is due to the necessary expenditure of money on dredging and other works to provide further canal and harbour accommodation and also to the construction of public buildings and other requirements brought about by the increasing needs of a young and growing country. The expenditure upon public works should bear some relationship to the growing trade of the country. During the fiscal year ending March 31, 1914, when our Conservative friends were in power, the foreign trade of Canada amounted to $1,074,000,000, and $27,991,000, or 2.7 per cent of the total foreign trade, was expended upon public works. During the last fiscal year, when the foreign trade of Canada had increased to over $2,359,000,000, this government expended upon public works, not $27,991,000 as their opponents had done, but only $17,408,000, or less than three-quarters of one per cent of the foreign trade of Canada as against 2.7 per cent under Tory rule. That is a striking instance of the manner in which this government is husbanding its revenues and exercising the strictest economy consistent with efficiency in control in one of the great departments of the public service of Canada.
After the hon. leader of the Conservative party left Toronto he went down to Quebec and the maritimes to enlighten the people in that part of the country. At Knowlton, Quebec, he exhorted the good women of that province to study politics, and then he proceeded to say:
Who is there that does not believe that if we had reciprocity -with the American people we would have long ago have lost our identity and been absorbed in and by the United States?
I wondered if he had lost all his common sense when he made an unguarded statement of this kind in a province where absorption with the American people would mean the loss of their long-cherished official language. But he
proceeded to say it was a shame that the home markets of the farmers of Canada had been taken away from them and given to the farmers of New Zealand and the United States. As a Canadian, Mr. Speaker, it is humiliating to me to think that the leader of a great political party would hand out such mental trash to intelligent Canadians. Does he not know that the Liberal trade policy of gradually reducing tariff restrictions upon all necessaries, together with reciprocal trade, not only with our neighbours but with the whole world, are the two factors which will tend to build up a permanently successful agriculture and encourage industry, shipping and international trade? Does he not know that Canadians have become world citizens? Does he not know that Canada has emerged from doing business on the back streets and has opened her stand upon the great international business highways of the world? Canada can no longer continue to live within herself. The manufacturer in this country who within the next five or ten years, if a Liberal government is in power, does not realize that he must cater to the world's trade, will be a back number.


An hon. MEMBER:: They will not be in that long.


Thomas McMillan: With fewer than 10,000.000 people we now stand fifth among the great commercial nations. Our increase in international trade since 1913, and more particularly since 1921, is simply marvellous. Our per capita trade is more than double that of most countries. Situated in such a pivotal position between the orient and Australia and New Zealand on the one hand, and the old world markets on the other, with two highly equipped lines of transcontinental railway, with such a wealth of still largely undeveloped natural resources, and the highest quality of production, our watchword ought to be to scale down gradually our needless trade barriers and go forth to win in open competition with the world. We are competing successfully with the world to-day and there is no good reason why we cannot continue to fortify and improve our present favourable trade position. As Sir George Paish, the British economist, has said:
Unless the United States and many other nations cease telling their people to sell here but don't sell there, the world will, sooner or later, suffer an economic cataclysm which no country will escape.
If we are to be worthy of fully appreciating our great possibilities it is our duty to scale down gradually all needless trade bar-
The Budget-Mr. McMillan

riers and let Canada lead the way. Hon. gentlemen opposite would have this country again go through the humilitating experience it suffered between 1878 and 1896 under the national policy.


An hon. MEMBER:: You have that yet.
Mr. MeMILLAN: That policy inaugurated eighteen years of stagnation in Canada, with trade dead, debt increasing, population at a standstill, immigration reduced to a minimum and migration at full flood, the greatest period of migration from Canada, more particularly to the United States. It was the dreary, hopeless period of Canadian history. During the eighteen years in which that policy strangled Canadian development, our total exports increased from $79,154,678 to $116,314,543. During the single month of July, 1927, our exports totalled $80,770,925, and in the month of July, 1928, the total was $127,368,623. The increase of July, 1928, over July, 1927, was more than $9,000,000 greater than the entire increase in exports during the whole eighteen years under the national policy. The paralyzing influence of those eighteen years of high protection in Canada should never be forgotten. Canada has never yet shaken herself entirely free from the blighting effect of that policy, and I urge upon this government that its duty is to proceed more rapidly along the lines of a well-considered tariff reduction. The danger cry has always been: Oh, we need the revenue; we must be careful. That argument can no longer be used. Every successive tariff reduction has verified our opinion in that it has yielded a greater revenue. I urge them again that we can do this kind of thing only in periods of good times. We cannot do it in times of adversity. Now is the golden opportunity and we should be taking advantage of it. Apparently, however, they seem inclined to mark time.


Mr. COOTE:: Is this the time?
Mr. MeMILLAN: It may be wise. I do not know what the special session of the United States congress will do; I am no prophet, but I know President Hoover has never shown himself to be a foolish man. There is no doubt he has a most friendly feeling towards his northern neighbour. He knows Canada is his best customer. He knows, further, Canada has a standing offer to his government of reciprocal trade in food products. He knows that 66 per cent of the United States people live in incorporated towns and cities and desire a lower cost of living. In our own particular lines Canada produces the finest quality of foodstuffs in the world. He also knows there is

a decided shortage of fresh meat products for the domestic requirements of his own country. In 1927 there was a deficiency of more than 400,000,000 pounds below the previous year's production and in 1928 there was a further deficiency of some 642,000,000 pounds. Canada is the only country from which the United States can secure a supply of disease-free, high-class fresh meat. He knows further from the lips of the Prime Minister of Canada (Mr. Mackenzie King), in a declaration made openly on the floor of the house, that if Canada receives fair treatment she is open and aboveboard and willing to cooperate in every legitimate way, in so far as federal jurisdiction will permit, in the development of the St. Lawrence waterways towards which he himself has set his heart. In the face of all those facts does anyone believe that the very first international act of President Hoover will be to hand out a serious economic handicap to both his own country and Canada? I refuse to believe it; I believe the United States people have elected to the presidential chair a great American who will prove himself worthy of the name. But I deprecate the attitude of hon. gentlemen on the floor of the house towards the United States people and government. That attitude in both gesture and expression manifested at this time for purely partisan purposes i-beneath the dignity which should characterize the proceedings of this deliberative assembly. After repeated assertions by the hon. member for Fort William (Mr. Manion) listen to the following:
But, I repeat, President Hoover has recently announced a policy of increasing the United States tariff against our farmers.
I dispute the imputation and I invite the hon. gentleman to quote from President Hoover's inaugural message one syllable which will bear any such construction. Mark the different tone of President Hoover's words in regard to the tariff:
Limited changes cannot, in justice to our farmers, our labour and our manufacturers, be postponed.
listen also to his noble expression in regard to permanent peace.


Some hon. MEMBERS:: Oh, oh.
Mr. MeMILLAN: My hon. friends opposite are laughing.


Mr. COTNAM:: Why not ?
Mr. MeMILLAN: Bear yourself in silence. When the hon. gentleman speaks, we will listen to him. The fact is that when hon. gentlemen opposite rise to speak in parliament,

The Budget-Mr. McMillan
it is very seldom they have anything worth saying. Listen to the noble expression of President Hoover respecting permanent peace:
The United States fully accepts the profound truth that our own progress, prosperity and peace, are interlocked with the progress, prosperity and peace of all humanity. ... It is impossible my countrymen, to speak of peace without profound emotion. In thousands of homes in America, in millions of homes around the world, there are vacant chairs. It would be a shameful confession of our unworthiness if it should develop that we have abandoned the hope for which all men died. Surely civilization is old enough, surely mankind is mature enough so that we ought in our lifetime to find a way to permanent peace.
Contrast these words with the blustering, defiant mood in which the hon. member for Fort William jumps on to a big "if":
If at that special session called by President Hoover any more restrictions are placed upon our sales to the United States. . . . then we in turn should deal in a red-blooded Canadian manner with their tariff attitude towards us.
But even that does not satisfy him and he becomes still more violently bombastic, and proceeds:
I think we have been taking too white-blooded an attitude towards the United States all the time, and I submit that it is time for us to stand up and take a good red-blooded Canadian attitude.
That is the blood that courses through the veins of my hon. friend from Fort William, and it is also the blood which coursed through the veins of every member of the "shadow" cabinet when, in June 1926, they sat on the treasury benches, when the present Prime Minister metaphorically speaking, laid every one of them over his knee, and, after administering a sound spanking compelled every one of them to admit that not one of them had taken the oath of office and that they were guilty of endeavouring to mislead and deceive parliament and to put over the most indefensible act of power usurpation ever attempted on the floor of the Canadian parliament.
But that is not the spirit in which Canada should maintain the proud position which she occupies throughout the world to-day. Canada has achieved a high position in the minds and hearts of European nations. Great benefit has accrued to her through the sojourn of the Prime Minister in Great Britain and on the continent during the past year. His timely message of international peace, goodwill and conciliation rather than armaments as a means of settling disputes has lifted Canada to a high place among the nations of the world. Do these hon. gentlemen opposite want to discredit our
proud position and trail it in the dust? Canada has no<w signally qualified as interpreter nation along the lines of peace, as a means of settling international disputes. The peace of the world depends more upon establishing good relationship between the United States and Great Britain and between Great Britain and France than upon any other single factor. The people of Canada, largely made up of two dominant races-the French and the British- have learned by experience to respect and honour the respective characteristics of those races. We have long since blended together those traits of character which enable us to work hand in hand and with the heartiest feelings of kindly cooperation have enthusiastically set ourselves to the task of building up a great and prosperous nation on the northern half of the American continent; building it upon the noblest principle of humanity, namely, the principle of peace on earth and good will towards men.
With such a prospect in view, and living alongside a nation with whom we enjoy the most friendly and intimate relationship, this Dominion understands and can interpret the French, the British and the United States characteristics. We are, therefore, qualified to act as an interpreter nation, and Canada holds it in her power to cement closer and closer those bonds which exist between us. But we also hold it in our power, by just such expressions as I have indicated coming from the opposite side of this house, to blast our good reputation and discredit Canada's prestige throughout the world.
Hon. gentlemen opposite would convey the impression that the Australian trade treaty has been an injury to the Canadian dairy industry. I am not going into an elaborate analysis of the effect of that agreement, but the fact is that it has not been detrimental to the dairy interests of Canada. Every economic student of those conditions knows that until very recently Great Britain has been the world's best market for dairy products and consquently the greatest distributing and price-regulating market of the world. But what happened? On October 1, 1925, the Australian treaty came into operation. From that time on there was a steady advance in the price of butter in Canada till March of 1926 when No. 1 pasteurized butter was ten cents per pound higher in Montreal than the price of Australian butter in London, and, generally, it has remained higher ever since. During the whole of the year 1926, the averag-price of No. 1 pasteurized butter in Montreal was 2.46 cents per pound higher than Australian butter in London. For the whole year
The Budget-Mr. McMillan

1927, it was an average of four cents per pound higher in Montreal than Australian butter in London, and during the past year Canadian dairy products have ranged for 2-| cents to 3 cents per pound above the world's market price. Yet the hon. gentlemen of the Conservative party want the consumers of butter in Canada to pay a still higher price for that product. I want every consumer of butter in Canada, and more particularly the mothers of families in every town and city in this Dominion, to know that this is the policy of the Conservative party under their present leader-wanting them to pay a price higher than the world's market price, and just to that degree destroy the purchasing power of the Canadian people.
On the 25th of October of last year the hon. leader of the opposition in the city of Montreal said:
What are we doing to safeguard our agricultural life, not only for to-day but for tomorrow ?
And after referring to the importations of butter under the Australian treaty, he continued :
The dairy industry cannot be built up in a day or in a year. It is being destroyed.
His inference is that nothing is being done by this government to safeguard the agricultural life of this country. I wonder where the hon. gentleman has been sojourning when he thinks that the Canadian dairy industry is being destroyed. Has he actually sunk into such depths of real bachelordom? If any of our other bachelor leaders should develop such density we would have them married at once. That, sir, is the surest cure for any such ailment. The whole thing reminds me of an incident last June after I had put on Hansard the facts in connection with butter and the Australian treaty. I happened to meet some of my good Tory friends out in the corridor and they said: "Say, Mac, where is that butter?" " Boys," I said, " I plastered you all over from the soles of your feet to the crown of your head and you could not help yourselves. That is where the butter is." Apparently, however, their hon. leaders have never thoroughly cleansed themselves and are now living in an atmosphere of such lacteal density that their mental peregrinations are most amusing. They call to mind that divine injunction, " Man, know thyself." The greatest study of mankind is man, and, goodness knows, we members of parliament have a wonderful opportunity for study along that line. I often wonder where the hon. gentleman was browsing mentally when, in 1915, the American government removed

every restriction against the importation of Canadian finished live stock and fresh meats and also placed wheat, flour and potatoes on the tentative free list. He was then very close to the members of the Canadian government. Why did he not then show his appreciation and safeguard the live stock industry of Canada by insisting that the government remove the duty on like American products coming into this country? Is it any wonder that after five years' experience of an entire lack of appreciation, during which time the Tory government in Canada maintained an almost prohibitive duty against like American products, the American government saw fit to withdraw the privilege? That was the time when he and his political friends should have shown some concern for the interests and welfare of Canadian agriculture, but they were asleep at the switch.
However, we do occasionally get a glimpse of their hon. leader's meanderings. Speaking at Cookshire, in the province of Quebec, last summer, he said:
There should be in Canada a tariff commission such as they have in the United States . . . . This should determine the conditions under which our manufacturers and our producers have to meet the competition of the world.
According to press reports, on the 2nd of October, 1926, in his own city of Calgary, he made a similar statement:
A tariff board, such as they have in the United States, should hear all the evidence and make its recommendations. By that we stand or fall.
What kind of tariff board have they in the United States? It is in effect a tariff commission for the purpose of giving the manufacturers the full power to exploit the consumer. For instance, it investigated the sugar duties. Its report was presented to the president. From that day to this the president has failed to make that report public. So close were the big interests linked up with the operation of the tariff board in the United States that actually the representative of the sugar interests was present on the board in the person of Mr. H. H. Glassie. Common decency and common justice should have intimated to that gentleman that he should abstain from sitting on cases in which his personal interests were so apparent. But this he refused to do. Congress passed a special law removing Mr. Glassie from the payroll of the nation until the case was finished. Yet this is the kind of thing that passes for a tariff board in the United States. Naturally this aroused some storms. Investigation was threatened. Senator Smoot, one of the big

The Budget-Mr. Macdonald (Kings)
sugar men of the United States, was always on the job to block investigation. All this is mixed up with the notorious speculative sugar market of 1921 when the exploitation of the American people by the sugar trust was one of the most glaring instances of the looting of the consumer by predatory interests ever brought to the attention of the American public. Yet this is the kind of thing which the honoured leader of the great Conservative party apparently wants to have in operation in this country. Naturally very strong opinions are voiced in the United States regarding the work of the American tariff board. For instance, Dr. Taussig, of Harvard University, and a former chairman of the tariff commission, at a meeting of the American Economic Association two years ago, expressed it as his opinion that:
The interests involved in the results of tariff making were so powerful and exercised such influence upon the party in power that disinterested and non-partisan action was practically impossible.
Those are strong words, but they come from a man of calm and reasoned judgment, a man who had had experience on the tariff board, and who was by no means an opponent of tariff protection. Dr. E. P. Costigan, of Denver, who also has had experience with the tariff" board, said:
It should have turned upon it the clearest searchlight of publicity, that its past performances have little to commend it, and until it conforms to disinterested standards of public service, congress should refuse any further financial appropriation for its work.
There is the situation. Possibly the hon. gentleman would like to revive the battledore and shuttlecock methods which were in operation just before the Conservative party was defeated in the fall of 1921.
It might be interesting to lift the veil for a moment on one commodity-sugar-to disclose the true situation. To really understand the facts, it should be known that when James Murdock resigned his position as the last remaining member of the original Board of Commerce of that day he preferred serious charges against members of the cabinet. Rather than investigate those charges, the government filled the vacancies on the board by appointing three paid servants of the government. There never was a ease which showed more plainly the absurdity, the injustice, and the injury to the consuming classes of the enactment of customs duties than did this sugar monopoly in Canada. In the whole muddle one fact was clear, that the sugar trade of this country was largely in the hands 78594-54
of a group of refiners who for most purposes acted together, and who for many years had very successfully controlled the sugar situation in Canada to their own exhorbitant profit through the kindly aid of the tariff. In this particular case-I regret, Mr. Speaker, that I have exhausted my forty minutes.
Hon. JOHN A. MACDONALD (Kings): Mr. Speaker, in rising briefly to discuss the budget, I feel that the masterly criticism delivered last Thursday by the then acting leader of this party (Mr. Guthrie) covered the ground so thoroughly that the Conservative case might well be rested there. However, there are usually some local aspects to which those members who follow the leaders can give attention.
As has already been stated, the financial condition of the country is set out in the budget speech in clear and concise terms. The facts and figures are doubtless correctly stated, but the conclusions which the Minister of Finance (Mr. Robb) seeks to draw therefrom I submit are not altogether warranted. It can easily be shown that other factors besides the so-called Robb budgets have contributed to the prosperity and increasing trade of the Dominion. It can also be shown, as the member for York-Sunbury (Mr. Hanson) pointed out this afternoon, that the much-vaunted prosperity is not as far reaching as is claimed by the government and their supporters. The prosperity is largely a paper prosperity and is confined to the larger cities. As a matter of fact the annual reports of our banks and large corporations are relied on as evidence of that prosperity, t agree with my hon. friend from York-Sunbury that if you apply the prosperity test to New Brunswick, Nova Scotia and Prince Edward Island, to the farmers and fishermen of those provinces, and to many others who to-day are struggling for a livelihood, the result is not as satisfactory as the government would have us believe.
The eloquent speech of the hon. gentleman who has just resumed his seat (Mr. McMillan) was the most amazing example of inconsistency that I have heard this session. He opened his address by stating that everything is prosperous, but that high protection stands in the way of prosperity. He seems to overlook the fact that the government of which he is such an enthusiastic supporter are maintaining this high protection, and at the same time they lose no opportunity to proclaim the great prosperity which the country is enjoying under their beneficent control. But the hon. gentleman goes further, he character-

850	COMMONS
The Budget-Mr. Macdonald (Kings)
izes this high protection as embodying a vicious principle, notwithstanding the fact that the government which he has supported so unquestioningly have had the power at any time during the last seven or eight years to put an end to high protection. Then he would eliminate trade barriers. Well, apparently, he still believes in the trade theories of Bright and Cobden and their contemporaries. But those theories are entirely out of date to-day. The nations of the world are protecting their industries and striving to build up a powerful industrial system and it would be utterly impossible for Canada situated as she is, to maintain her economic position under free trade. The hon. gentleman also stated that high protection brought eighteen years of stagnation. Yet he claims that we have this wonderful prosperity under the very system which has been continued with very little change down to the present time.
The tariff policy of the new administration in the United States was also discussed by my hon. friend. But why not face the facts? Everyone is aware that last fall the outstanding feature of the policy of the Republican candidate for the presidency and his party was protection for the farmers to cover all their products. There is no question whatever about the fact that the special session of congress that has been called is to be devoted to this particular purpose.
With regard to the tariff, the Liberals have always, in my recollection, claimed that the tariff was a tax; we have had to meet that argument in all of the elections I have had anything to do with for many years past. Yet in the face of present conditions they claim that they are reducing the taxation of the country. But what do we find on looking up the figures? The last summary issued by the Department of National Revenue shows that in the ten months of the present fiscal year, up to January, 1929, the duties collected in this country amounted to $162,703,554, as compared with the duties collected for the same period in 1928 of $139,355,327, or an increase in the last ten months, in duties paid-which the Liberal party has always claimed to be a tax- of $23,348,227.
A few days ago the hon. member for South Wellington (Mr. Guthrie) showed by figures taken from the public records that the average increase in taxation during the last five years, as compared with the last five years of Conservative rule in Canada, amounted to $51,000,000 per annum. Yet, in face of these facts, hon. gentlemen opposite will stand up and say that they are reducing taxation. The fact is that there never was a time in the history

of Canada when taxtation was as high as it is to-day by many millions of dollars; and notwithstanding the fact that they claim some credit for a reduction in the rate of taxation here and there, the situation shows that taxation has very largely increased. If this increase in taxation, resulting in increased revenue, were being economically made use of, if we were getting from it the services which the country stands most in need of, if we were obtaining a reduction in the debt to the extent that we might have by the practice of economy, then all would be well. But apparently this additional money has had the effect of tempting the government into a period of extravagant expenditure in which no amounts are too large.
I am one of those who would like to see Ottawa made beautiful; I am just as anxious as anyone else to see this done. But I do not believe that the millions of dollars voted for this purpose are being well expended, especially at the present time when the country has so many other pressing obligations, including the burden of debt which we are carrying. I do not believe that half a million -or more than half a million-expended on automobiles in this country is an economical or reasonable expenditure. And there are many others that one could cite; one could go on for an hour proving reckless and extravagant expenditures. These are but samples. Yet the government, because, as they claim, they have no money, are obliged to discontinue the technical education grant; the statement from the treasury benches is that there is no money. And they are obliged also to refuse any contribution to good roads in Canada; they have no money with which to assist the provinces along that line. But I would point out that there is no movement in this country to-day which would be of as great value to the farmers and to others who are attempting to carry on business as would be the improvement of the roads.
The last speaker (Mr. McMillan) referred to a national highway to cost $200,000,000. Why, sir, that is simply sidetracking the issue; no one would seriously consider such a thing. But there are ways and means of promoting the development of good roads in this country without tackling such a project. This Dominion, I believe, should follow the lead given by the late Conservative government when $20,000,000 was voted to assist the provinces in road work.
There is no question about the fact that if the government turned over a new leaf and practised sufficient economy they could wipe out the sales tax entirely and still not hamper the finances of the Dominion. So that, from

The Budget-Mr. Macdonald (Kings)
the standpoint of economy, they are failing; there is no doubt at all . that rank extravagance can be proved against the government.
There are many matters involved in a discussion of the budget, and among these may. be included, as important questions, markets and transportation. When we come to look at this government's work along this line we also find much room for criticism. Markets and transportation are largely complementary; they go hand in hand. And when this government established, under the British West Indies trade agreement, the Canadian National Steamship Line and put steamers on that route, they made, it seems to me, a very serious error in not including as a port of call for these steamships the city of Havana in Cuba. I realize, of course, that under the treaty as it now stands this may be difficult and perhaps impossible. But I would urge as strongly as possible on the Minister of Trade and Commerce (Mr. Malcolm) and the Minister of Finance (Mr. Robb), who have this work in hand, the desirability of making Havana a port of call for these steamships. Probably the British West Indies would not agree, inasmuch as they are paying a subsidy in support of the service. I submit, however, that it would pay the country, it would pay-the Canadian National Steamships, to abandon that subsidy and make Cuba a port of call. What would happen? To-day these boats are going to the West Indies with very little freight; they are not half loaded. But if they were allowed to touch at Havana every cubic foot of space would be filled with potatoes every trip. That would mean that the earnings of the Canadian National Steamships would be largely increased. Moreover, it would give very much needed accommodation to the maritime provinces. The situation at the present time lends itself to monopoly in this regard. The ordinary shipper cannot ship to Havana at all: yet that is the biggest and best market we have to-day for our potatoes. That market takes 3,000.000 bushels a year from New Brunswick and Prince Edward Island, but no producer can ship a bushel there unless he is big enough to charter a steamer and despatch a whole steamer load. I submit that if it is possible to make some arrangement whereby these boats could call at Havana-they pass that port within a few miles every two weeks-it would operate to the advantage of the maritimes. If this cannot be done, some other service should be established and subsidized by the government in order to provide a connection with the port of Havana.
That brings us to the general condition of the potato market at the present time, which everyone knows to be very bad. If it were not for the fact that Prince Edward Island potatoes are recognized as the best obtainable anywhere we would have had a very poor market last fall; in fact it was poor at its best, but to give you some idea of how largely the quality enters into the marketing of our crop I will just quote from the United States market report in connection with the Boston market a few days ago. The quotations show a very decided preference for Prince Edward Island stock, as follows:
Maine, 100-pound sacks, Green Mountains, United States No. 1. sacked locally, $1.20-$1.25.
Prince Edward Island, 90-pound sacks, Green Mountains A grade, $1.50-$1.75.
That condition assisted us very materially in marketing our potatoes this year, because the same preference is shown in Cuba and in the Canadian markets. Even at that, however, we cannot unload the large quantity of excellent potatoes which still remains in the hands of the farmers. In that connection I might say that we have been endeavouring to take advantage of the market which exists in western Canada; it is not a good market with regard to price but it could be made an outlet for a considerable quantity of our potatoes. In endeavouring to make use of it the Canadian National Railways did give us a very nice reduction in freight rates, but it was not sufficient to enable us to send our produce to western Canada; the freight rates were still too high although quite a few carloads were shipped. A few years ago we had a similar condition; the Minister of Agriculture (Mr. Motherwell) took a hand in the matter then and claimed credit for a reduction in freight rates which was given. In a circular which he sent out at that time he said:
We would add here a reminder that this movement will be in competition with selected stock imported from well-organized shippers in Minnesota and North Dakota, their shipments over shorter distances bearing lower rates, particularly to Winnipeg, but with 33 cents per one hundred pounds duty.
This winter the shippers appealed to the Canadian National Railways for a further reduction of 15 cents per hundred pounds, which would enable us to ship quite a few potatoes to the west. We were not able to obtain that reduction, but the government had it in their power to give us that 15 cents advantage by raising the duty on potatoes to 50 cents per hundred pounds, which would place it on an equality with the United States duty. If that were done we would have the advantage we
852	COMMONS
The Budget-Mr. Macdonald (Kings)
need in order to compete with the potatoes of North Dakota and Minnesota. That would apply to the condition of not only this year but'every year; never a year passes without many thousands of bushels of potatoes coming into Canada from the United States in the spring while our last year's crop is still in first-class condition and fit for use anywhere. I venture to say that within a month we will be offered new potatoes from Florida and Georgia in the restaurant of this house; that has happened every year in the past and probably will happen again this year, although there are millions and tens of millions of first-class potatoes in Canada which we should be eating instead of using potatoes from the United States.
These are matters to which the government should give some attention, matters with which they should deal in order to protect our farmers from this outside competition, and give them a chance against our neighbours to the south, who take advantage of our markets to dispose of their surplus products in the off-season. They should give protection when needed, something which will be stable and which will allow our farmers to carry on with a reasonable assurance that they will at least have the full benefit of the Canadian market when the foreign markets will not absorb our products.
These same arguments may be applied to the butter trade, and notwithstanding the statements of the last speaker we find that there has been an enormous change in the imports and exports of butter since the Australian treaty came into effect. We find that there has been a serious decrease in the dairying industry generally, and we all know that the number of cattle in Canada has dropped seriously. What are some of the results of this treaty from a marketing standpoint? In 1925 Canada exported about 24,500,000 pounds of butter; in four years our exports dropped to 2,056,500 pounds. These are the latest figures taken from the dairy letter issued by the Department of Agriculture and received to-day; the figures include our exports up to January of this year. Now let us consider the other side of the picture; in 1925 we imported 162,848 pounds of butter, while according to the same letter last year we imported 21,108,929 pounds, valued at over $7,000,000. The farmers of this country should have produced that butter and should have distributed that money among themselves. And the loss is not only the money lost by not producing this butter, as every farmers knows; in eastern Canada especially we are not able to keep up the fertility of the soil if we do not keep 
cattle. We must have cattle in order to maintain the fertility of the soil, so that in addition to the direct loss there is a heavy indirect loss. Practically all milk products, as well as butter, show a decrease in exports with the exception of cheese, which increased to some extent.
What is the cure for this condition? We know what we are up against; what are we to do about it? There is only one way to go about it; we must look at the whole matter from a broad national standpoint; we must endeavour to build up Canada as a whole from coast to coast with all kinds of industries and an industrial population which will provide markets for the produce of the farms. Then, if we protect these markets, the farmers will be reasonably safe. It might be said that I am speaking against foreign markets, but I am not. I have as much respect for foreign markets as any person in Canada, but they are always treacherous and tricky. If you have a well developed home market, a large consuming population of your own, then you are safe. In various parts of Canada, and especially in the maritime provinces, we have always had the Liberal party holding up before the people this policy of protection as a fearful bogey; telling them it would increase their cost of living; it would ruin them in various ways and make millionaires of all the manufacturers, and build up the cities at the expense of the country. The Liberal party has been able to put that over so successfully that practically solid delegations of Liberals have at times been returned from the maritime provinces; wholly solid from Prince Edward Island and Nova Scotia and nearly so from New Brunswick. But that day is past, and the maritime provinces have awakened to the realization that they must fight for protection for their industries and see that it is provided for the rest of Canada. They have come to realize that even though they have to pay a little extra for a machine-I do not admit that this necessarily follows-which they would have to buy once in ten or fifteen years, it is better to pay that extra cost and have it manufactured in Canada. By doing that they establish a safe market for what they produce with that machine. They were told their industries had been killed by the industries of upper Canada. This was true to some extent, but we are getting our stuff much cheaper today than in the days when we were manufacturing at home in a small way. It is true we have lost our industrial population, and, as far as Prince Edward Island is' concerned we have lost over twenty per cent of our total
8o3

The Budget-Mr. Bradette
population, but we are producing more to-day with that smaller population and we are getting our stuff at a cheaper cost because of the mass production of upper Canada. Unfortunately, there is also some coming in from the United States, which has killed off our little industries.
I would like to refer to the question of old age pensions, particularly as it applies to Prince Edward Island. It has been said that I opposed old age pensions when that question was before the house in 1926. That statement is not correct. I, with others on this side, opposed the system by which the government was putting more than half the burden upon the shoulders of the provinces. We regarded that as being unfair and argued that the government should make it a federal scheme entirely. There is much difficulty in the smaller provinces with a limited revenue in taking hold of this situation. Take the position of Prince Edward Island, with its small revenue and lack of all resources from which revenue can be secured except by direct taxation on the farmers. According to population, this scheme would be more expensive there than it would be anywhere else in Canada. Many of our young people leave during the producing age and we have a smaller proportion of that class in our community than is to be found in any other province in Canada. The following comparative statement is taken from the census of 1921:
Per 1,000 population
Prince
Ages	Edward Island Canada
10 to 19 years.. 20 to 44 years.. 45 to 69 years.. 70 years and over..
204.32	195.14
312.33	365.27
203.79	169.38
60.24	28.11
From the above tabulation it will be seen that Prince Edward Island has a much larger percentage of population from 10 to 19 years than the rest of Canada. But when we come to the ages of 20 to 44 years, which are the best producing years, we find that Prince Edward Island has a lower average than the rest of Canada. The population coming under this class are producing revenue in the other provinces, they have left Prince Edward Island and we lose in that respect. In the classification of 44 to 69 years Prince Edward Island heads the list again, and when we come to 70 years and over it is found that Prince Edward Island has a very much larger percentage than the rest of Canada. It can be seen quite easily that Prince Edward Island would have considerable difficulty in undertaking the carrying out of the old age pensions scheme. I still believe that this should have been undertaken by the federal government, because provinces like Prince Edward Island, which may not be able to undertake it, will have to contribute towards the scheme for the benefit of the other provinces.
I would like to refer to the work of the Department of National Revenue with special reference to the prevention of smuggling. In order that the house may have some idea of just what the conditions are in Prince Edward Island, I wish to read an article which appeared in the Charlottetown Patriot, on January ISth. This paper is an out-and-out suporter of the government. The article is as follows:
Laxity in Enforcement
We all know that smuggling is rampant not only here but elsewhere, and that bootlegging is constantly on the increase, while the number of places that it is rumoured in which liquor can be procured either by telephone message or personally are said to be constantly multiplying. Further, it is declared that in many of these places liquor is sold by the glass, as well as by the bottle.
It is a well known fact that for the past three years there has been more smuggling of liquor than previously, and as a natural consequence more people should be fined.
I would like the Minister of National Revenue (Mr. Euler) to take note of this statement as put forward by a newspaper which is an ardent supporter of his government. I suggest that something be done in connection with this very serious situation. We who live there, surrounded as we are by water, with opportunities for the vessels to get into every creek, bay and river, know that there never was a time in the history of the province when there was as much liquor floating around as there was last year. I would urge upon the minister that in making arrangements for the coming year he take this fact into consideration and make some effort to enforce the laws in this respect.


Mr. J. A. BRADETTE (North Timiskam-ing):: Mr. Speaker, before I speak on the budget and its amendment I would like to make a few remarks with reference to a question which has come to the forefront in the province of Ontario, more particularly since the beginning of this session. I refer to the activities of the Ontario Prohibition Union. In the past few weeks circular letters have been received from organizations working to assist the United States in preventing Canadian liquor from entering that country. I have always been an advocate of temperance and I am always prepared to sponsor and further true temperance. At the same time I cannot see why we Canadians should be called upon to enforce United States law. I have read

The Budget-Mr. Bradette

many comments in both wet and dry papers in the United States, and they are firmly convinced that the Canadian government is following the proper course in that respect. It is a well known fact that the officers of the United States government have a right to enter any ship on this side of the line and examine the papers before the ship is released, and it is also a well known fact that they have access to all boats, whether Canadian or American, on the other side of the line. It is also a well known fact that unlimited quantities of intoxicating liquor are finding their way into the United States from Cuba, which is a protectorate of that country. Cuba is yearly shipping enormous quantities of-intoxicating liquor, and apparently no checks are being used against such a practice. But I consider that the demands made to the Canadian government by the United States were absolutely unwarranted; they should have made the same demands to Great Britain and France. It is a well known fact that even under the Volstead Act liquor is being used for sacramental and also medicinal purposes in the United States. The government of the United States through its dispensaries has been receiving tens of millions of dollars in the sale of liquor. Therefore I am convinced, as one of the leading temperance men in northern Ontario, that the government in this instance is following the proper course. It must also be considered that the exportation of spirituous liquors from Canada to the United States represents only two per cent of the total consumption, so they must get it much more extensively from other sources.
The budget speech of the Minister of Finance (Mr. Robb), with the facts and figures contained in it, speaks very eloquently of the present prosperity of Canada. In all parts of the country we find a spirit of optimism that can be brought about only by a general improvement in business. It is noted with great satisfaction that every year since 1923 has seen a decrease in the net debt of the Dominion, the reduction this year amounting to more than $50,000,000. As the interest on the funded debt at the present time represents about one-quarter of the yearly revenues of the country, this debt reduction from year to year makes possible an ever-increasing reduction in taxation and at the same time larger expenditures on the necessary developments of the country.
We are also pleased to note that the Dominion bond issues maturing during the year have been paid instead of being renewed and by following the same policy in future it should not be necessary to renew any bond

issues until 1933. As I have said, the country seems to be well satisfied; and this budget, the same as the five previous ones, has been accepted by the country as a whole, as a "Robb" budget, meaning by that that there is keen satisfaction with it throughout the length and breadth of the Dominion.
It was acknowledged by the acting leader of the opposition (Mr. Guthrie) in a magnificent oratorical effort, that we are experiencing prosperity. A person has only to glance over some of the headings in the newspapers and periodicals of the country to realize to a very large extent that we are really experiencing prosperity. Let me quote a few of them coming from the industrial issue of the Ottawa Journal:
General expansion placed pulp and paper industry in unusually good position.
Annual review of industry shows expansion in newsprint production more rapid than consumption-exports to countries other than United States increase-New laboratory in Montreal.
This is another one:
High mark for construction reached in past twelve months is likely to be maintained.
Normal building year now exceeds 1912 boom -building likely to continue at present levels- Ontario leads all other provinces.
Another one:
Wide distribution of bank assets make for safety and permanence unaffected by market conditions. Underlying conditions of trade today make for greater stability of Canadian banking institutions as compared to conditions at confederation.
Over 211 million bushels grain handled by harbour of Montreal but limit by no paeans reached. Is world's premier grain shipping port, having reached new record during past summer-many improvements under way including port for aircraft.
Record wheat yield of year outstanding contribution to present prosperous era. All previous records broken states C.P.R. president, who is most optimistic-he believes time has come when immigration regulations should be relaxed.	_
West is entering industrial field with oil and mining also prominent states president of national lines.	.
Prairie provinces outgrown period when agriculture only industry-new records made by C.N.R. in 1928-extensions made and services improved.
Advance in Canada's foreign trade one of outstanding achievements in modern economic development.
Noted banker reviews export trade which has developed 100 per cent since 1913-recognizes value of great tourist expenditure.
There is one particularly from northern Ontario-:
Continued progress is noted with the Lake Superior corporation. Public shows great interest.

The Budget-Mr. Bradette
Various subsidiaries making up huge indus-tral group reveal pronounced trend toward increased activities-scope of companies is broadened.
Canada's advance is outstanding in present day economic history while future is full of promise.
Statistics prove achievements were not equalled by people of any other country- bumper crops one of chief factors in financial situation in which all classes shared-advances in mineral development.
General anticipation is that present wave wilt continue during first six months of 1929 at least
It is true that the opposition maintain that this is all due to Providence, but I believe in the fine old idea that the Lord helps him who helps himself. While the administration has much to do with the present situation, there is a spirit of cooperation throughout every part of the country, and I feel certain that the people have more confidence in the present administration than they had in that of a few years ago.
I was amazed to hear some of the criticisms levelled by the acting leader of the opposition at some of the reductions in taxation, particularly when he stated that the government, in removing the tax from Pullman tickets, were helping only the richer class. In the part of the country which I have the honour to represent they do not regard it is a luxury to buy berth accommodation when they travel from northern Ontario to Ottawa, Toronto and Montreal, so this is helping the working and travelling class as a whole. The same thing applies to the criticism levelled against the reduction in the tax on cables and telegrams. The hon. gentleman said that this was going to benefit only the big corporation. But the larger corporations have always the happy peculiarity of unloading every possible tax on the public as a whole, and this principle applies also on telegrams and cables.
I listened with a good deal of attention to some of the remarks made by the hon. member for Kingston (Mr. Ross), the hon. member for Nanaimo (Mr. Dickie), and this afternoon to the hon. member for Vancouver-Bur-rard (Mr. Clark), in regard to the exportation of raw pulpwood to the United States to the amount of 1,500,000 cords a year. One thing every hon. member must have in mind is the fact that raw pulpwood to a settler is the finished product. I was in full sympathy with the action that was taken by the premiers of Quebec and Ontario in calling a pulpwood conference to discuss the situation in which the newsprint industry has found itself in the way of over-production and lack of market. We all know that prices were pared to such an extent that in many eases dividends could not be paid. I would be the last man to put too heavy demands on the
newsprint industry. In the constituency which I represent we have three pulp and paper corporations: the Iroquois Falls Pulp and Paper Company, Limited, The Mattagami Pulp and Paper Company and the Spruce Falls Pulp and Paper Company, which have a daily capacity of 1,300 tons of finished newsprint. Therefore I would be the last man to wish anything harmful to that industry. One thing that surprised me was the fact that the premiers of those two provinces did not see their way clear to have the pulpwood producers or the settlers represented at that conference. I have under my hand figures giving the actual cost of the pulpwood production to the newsprint industry. This is given by the companies themselves.
Per cord
Cut on their limits	 $6	25
Duties to government and also ground
rent and fire rent	
2	35Overhead	
1	50
Total for each cord of wood cut by
the companies themselves	$10 10
For the same quantity of wood, the same size of pulpwood, not delivered at the mill, the price is $5.75 to the settler. I believe there is an anomaly there which should be remedied as rapidly as possible. I would be the last man to be in favour of a policy of price-fixing, but at the same time I was absolutely in favour of the two premiers of Ontario and Quebec calling a conference, because the newsprint industry was not receiving a fair remuneration for the finished product.
During the course of last week in the Ontario legislature, the Minister of Lands and Forests in putting a bill through that body said that in northern Ontario the worst enemy of the forest was the settler. I believe that in respect to some instances may have been right, but I have no doubt that generally speaking he was wrong on that score. But if the settler of northern Ontario is the enemy of the forest, it is simply on account of the fact that he is not able to realize a sufficient price for his product. Up in that country there is what we call the clay belt, an area of 35,000 square miles. It is one of the best rural sections in the whole of the country. They have plenty of pulpwood up in that section but. as far as I have been able to ascertain, the settlers have never been able to receive a fair price for that product. So you will readily understand why the settlers are not trying to save the forests. There was exported to the United States last year 1,500.000 cords of pulpwood; and it is indeed surprising to learn that American buyers come hundreds and thousands of miles to buy that wood and pay a higher price for it than do

The Budget-Mr. Bradelte
the local buyers. The settlers have no remedy in such a situation. They have to find an outlet for their product in some way or other.
I would urge upon this government the necessity of calling a conference between the settlers and representatives of the pulpwood industry. I know that I am talking shop now, but this is a very important problem and one that should be dealt with if we are to advance the colonization of northern Ontario.
I desire to congratulate the Finance minister on the reduction of duties on mining equipment. That is just one instance showing that high duties are not always wise, are not always best for the development of any district, especially a new district like northern Ontario. We see it quite often in the newspapers that the empire is looking northward. Most of our present day development is in that north country, getting farther and farther away from the large industrial centres. We hear of large mining corporations. One of the hon. members to-day spoke of one of those companies being capitalized at one billion dollars. It is true that these companies are investing large amounts of money, but it is also true that people going into the mining game are gambling purely and simply. True, a lot of those ventures have turned out all right, but others have not turned out quite so well. This government must help the people in northern Ontario. I myself have received many letters from organizations like the Hollinger and other mining corporations, first, pleading for a reduction of the duty on their mining equipment, and later congratulating the Finance minister upon the reduction of duties of mining equipment in general.
Some big mining men in Toronto and Montreal have started up an industry, that of manufacturing mining machinery. It is true that some of their equipment is purchased here in Canada, but in almost every instance the equipment is purchased either in Great Britain or in the United States, and I am pleased to say that the mining interests in northern Ontario are perfectly satisfied with the reductions that have been made.
It seems to me that pur friends oq the other side think that they have a cure for all ills. One member said to-night there was no mention of protection at the last Conservative convention at Winnipeg. During the whole of last session I remember very well some of the members on this side tantalizing members on the other side as to what they meant by certain expressions, but hon. gentlemen opposite would never commit themselves.

Ever since the session the leader of the opposition has been going up and down practically every section of the country telling the people that the only solution he could offer was higher protection. But I must state with all frankness, as a representative of northern Ontario, that the people of that part of the country realize that this government has the only real policy in connection with tariff. We realize also that this government is not satisfied with the tariff policy that was good for this country fifteen or twenty years ago. We realize, however, that this government is formulating a tariff policy applicable for this year just the same as the tariff of twenty years ago was applicable to the needs of the country at that time.
On account of our geographical situation, we Should be free traders, but we are fully alive to the needs and requirements of governmental administration-, the revenue for which must partly be raised by indirect taxation or collection of customs duties. We produced last year thirteen hundred tons of finished1 newsprint daily and it would be absolutely impossible for northern Ontario, or for that matter, the whole of the province of Ontario, to consume even a very small proportion of that newsprint. Of necessity, we must go to the outside markets of the world. Not only that, but on account of being a -new section of the country, and being quite a distance away from the industrial centres, we must naturally buy on a high tariff market all the commodities that we require. But we are perfectly satisfied to play the game with the rest of the country. We believe that under some circumstances a certain amount of protection is required in connection with a new industry, and we need a tariff for revenue purposes. Hon. friends opposite would seek to put up a high tariff that would not be acceptable to the whole of New Ontario-. At the present time, we must export. Take our mining industry; it must find its outlet in- t'he markets of the world. Our newsprint industry must find its outlet in the markets of the world, and high protection is absolutely a policy and a principle that I am positive my hon. friends opposite were they in power, would never dare to apply to that section of the country which I have the honour to represent.
With regard to vegetables and fruits, I do not believe that we will ever be able in that section of the country to produce a sufficient quantity to supply the needs of the people there, or the people of Ontario. However, the growers should have protection. I believe that the British Columbia growers have suf-

The Budget-Mr. Bradette
ficient protection in connection with their industry. There is one thing, however, that puzzles me, and that is that we have to pay such excessive prices for British Columbia fruit. In northern Ontario, in the winter time, for instance, we have to pay 25 cents for three British Columbia apples, yet the growers of British Columi'ba claim that they have not sufficient protection.	There was
quite a movement inaugurated last fall by the fruit growers of British Columbia, complaining of the fact that there was practically no tariff protection extended to the fruit growers of this country. As I was very much interested in that question, I took the trouble to make an inquiry into the matter, and to my astonishment I found that we had a higher rate of protection against American fruit than they had against us. I will just give a list of eight fruits to corroborate that statement. Let us assume that a Canadian importer imports one thousand pounds of each
of the fruits enumerated.	At the	same time
an American importer	also imports one	
thousand pounds of each of these fruits. The duties paid by each of the parties would stand		
as follows:	Present	Present
	Canadian	American
	Rate	Rate
Apples	$ 6.00	$ 5.00Pears	5.00	5.00Strawberries	20.00	12.50Peaches	10.00	5.00Plums	7.50	5.00Cherries	20.00	20.00Apricots	5.00	5.00Raspberries	20.00	12.5093.50	70.00
So at the present time the fruit industry is fully protected. There are times when we have to pay, in northern Ontario, as much as fifty cents a pound for tomatoes. Someone must be making a certain amount of money at such a price.
As I say, we are perfectly satisfied to play the game with other sections of the country, but at the same time I am firmly convinced that higher tariffs will be no solution of the situation in this part of the country. . I believe this government is following the proper course, a business course, a course that will be beneficial to all1 concerned.
I do not intend to deal at any length with what the United States are going to do in connection with their tariff. It amused me, however, this afternoon, to hear some of the hon. members opposite mention the fact that the Minister of Finance waited until Friday to place his budget before the house; that he
should have brought it down after the inaugural speech of the president of the United States. I do not see the logic of that argument, and I do not see why we should time our actions in accordance with theirs. I for one am not dreading the situation as some of the hon. members opposite seem to dread it. As has been well said by one member on this side of the house to-day, I fully believe the United States are going to maintain the amicable relations they have had with us in the past, even on tariff matters. We must also consider that there are two schools of thought in the United States the same as here in Canada on that question. It is true that perhaps some farmers situated near the border on the American side will benefit by an increase in tariffs on Canadian farm products, but as the urban population in the United States is much larger than the rural population, so I am not apprehensive of that movement. It would be a movement that would be resented by the majority of the people of that country which sentiment the American politician must take into consideration.
Now, even if the United States do increase their tariff at the special session of congress next month I do not believe it would be prudent for us to take such steps as. would simply increase the cost of living in this country. Speaking for a large section of northern Ontario, I am positive that if the Canadian tariff is raised we are going to pay for it in good Canadian dollars. But I have sufficient confidence in this government to realize that they will deal in a logical way with whatever situation may develop. In this connection I may be permitted to quote certain authorities. Writing in Barron's Weekly, Sir George Paish expresses the following opinion:
The world cannot enjoy political peace in a condition of economic war. The great world conference convened by the League of Nations, in affirming that- "no machinery for the settlement of international disputes can be relied upon to maintain peace if the economic policies of the world so develop as to create not only deep divergencies of economic interest between different masses of the world's population but a sense of intolerable injury and injustice," stated a truth that cannot be doubted. Political peace is impossible without economic peace, and economic cooperation. The nations must work together for the common good. No nation can live at the expense of another.
In the bankers' plea for the removal of restrictions on European trade, it was wisely stated that our neighbours are our customers, and that their well-being is essential to our own welfare. The world economic conference affirmed this truth in language that cannot be misunderstood. But the nations, by their . actions, are still unconvinced of its truth.
The Budget-Mr. Brndette

Indeed, they seem to be convinced that it is untrue. Trade restrictions and tariffs are still being increased in many directions. Even in Great Britain "safeguarding" is being extended. The whole world is pursuing a policy of trade restriction, the effect of which is the exact reverse of that which the situation demands.
The principle here enunciated applies also to Canada to-day. It may be true that the American tariff will be raised on certain commodities that we now export to the United States, but it is not certain that any substantial increases will be made. My other authority is Sir Herbert Holt-a practical man,, not a theorist. At the annual meeting of the shareholders of the Royal Bank of Canada he said:
In spite of the fact that the present trade relationship between the two countries-
Referring to the United States and Canada.
-is disproportionately favourable to the United States, there is active discussion of further tariff increases that seem likely to shut out the few competitive items which Canadians now sell there. It would seem that those who propose such tariff changes fail to realize that checks upon Canadian prosperity automatically cheek the volume of goods which can be bought from the United States, and that on the other hand continued improvement in Canadian conditions brings corresponding increases in the volume of goods which they can sell us. From this viewpoint it might be considered economic statesmanship for the United States to discover means to increase their purchases from Canada, [DOT]rather than to consider measures which will constitute new trade barriers.
Moreover, it is not feasible for a country to sever completely foreign polijey from tariff policy. Official observers from the United States at the world economic conference at Geneva, and influential representatives of the United States Chamber of Commerce at the meeting of the international chamber of Commerce at Stockholm, expressed disapproval of such measures as would be likely to hinder the flow of international trade. With other nations looking to the United States for assistance in reconstructing the world's economic organization, the proposed tariff increases would constitute a severe blow at international economic cooperation and goodwill.
If further handicaps are placed upon the exports of Canada to the United States, it will be imperative for Canadians to seek more favourable trade agreements-
No mention of higher tariff.
-with other nations and to change the present relationship by the application of measures for their own protection. As a last resort, it may be necessary to meet this situation by direct tariff increases and by granting further preference to Great Britain and to most-favoured-nations. This is not a statement in favour of exhorbitant tariffs. I am not suggesting tariffs which will increase the cost of living in Canada, but rather such measures as will permit the continued growth of Canadian production and stimulate trade relationships with those coun-[Mr. Bradette.I
tries who are willing to buy agricultural and other products from this country on terms which will permit the maintenance of a reasonable and stable prosperity.
Those are practically the words of the Minister of Finance in his budget speech. There is no mention of retaliation. No one will dare say that Sir Herbert Holt is a dreamer. His practical views should be very carefully considered before we go on the rampage with respect to tariff matters. By hasty retaliatory measures, instead of penalizing our friends to the south we might penalize our own people.
Now, Mr. Speaker, a few words on immigration. At the outset I may say that I firmly believe Premier Ferguson is a friend of northern Ontario, as is also his Minister of Lands and Forests. Northern Ontario is a wonderful part of the province, immense in area, and richly endowed with minerals, with water-powers and with forest resources. It is also one of the best agricultural sections, the 35,000 square mile clay belt being admirably adapted for settlement. At the same time I do not think an immigration scheme on a large scale will be feasible in that country. I presume all members of this house are familiar with the failure of the Kapuskasing colonization experiment, on which the provincial government spent millions of dollars. Unfortunately, the immigrants were not familiar with farming conditions in northern Ontario and did not become acclimatized, and of course they failed to make good. In fact the government had to transfer those people to Toronto and other large centres. Recently I read in the December issue of the Empire Review an article by Premier Ferguson in which he described the kitchen garden farms of Denmark. Speaking of the size of these farms the Premier of Ontario said that they were from 15 to 50 acres in area. Had he visited that country four or five years ago, I would have been inclined to believe that he had tried to apply the same principle to northern Ontario. About five years ago, and apparently without any consultation with the settlers of that section of the province the size of the farms was reduced from 150 to 75 acres. But those small farms would not be suitable in northern Ontario. Not a single farmer from the older portion of the province would attempt farming in northern Ontario on such a small scale. Everybody familiar with a timber farm will tell you that allowance must be made for a certain amount of waste land. In clearing such a farm the pioneer must select an elevated spot on which to build his home and start farming operations, and eventually he gets access to the lower

The Budget-Mr. Campbell
lying land, but almost invariably there is a good deal of rocky land which cannot be brought under cultivation. I am sorry that I cannot air my views on this subject in the provincial legislature, and therefore I must take this opportunity to do so here. I submit that northern Ontario is not equipped to take care of a large immigrant population. In many sections where the people have been on their farms for ten or fifteen years they are still without roads and therefore have no access to markets. I have stated that they are not getting a fair remuneration for their pulpwood, and it is absolutely necessary that they should, because they rely upon this for their living. The farmer depends upon his pulpwood for himself and his family. So that we must be very careful in dealing with this matter. We are also trying to get agriculturists to come to Canada, and we know that eventually 50 per cent of them will find their way to the larger centres.


The ACTING SPEAKER (Mr. Power):: The hon. gentleman's time has expired.


Mr. M. N. CAMPBELL (Mackenzie):: I
do not propose to enter into a general discussion of the whole budget, but I desire to deal with a matter which I consider to be of paramount importance at the present time; and in this connection may I quote from the budget speech of the Minister of Finance (Mr. Robb) delivered in this house on February 16, 1928-that is to say, the budget speech of last year. The remarks to which I wish to call the attention of the house will be found at page 513 of Hansard of that year:
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.
Now I will not accuse the Minister of Finance of attempting to deceive the house, but I did receive an entirely wrong impression because, when I began to study the situation, I came to the conclusion that this regulation would have exactly the opposite effect. Speaking in this house on February 27, 1928, I drew the attention of the minister to that fact. May I be permitted to quote briefly from the remarks I made on that occasion. I said:
Ninety per cent of the short staple cotton used in British mills is purchased outside the empire. 30 per cent of the total American exports of cotton going to the United Kingdom.
Not more than 15 to 20 per cent of the cost of the finished product of the British cotton mills is labour.
I pointed out that the effect of this regulation would be to debar British manufactured cottons from the benefits of the British preference. It might be that when the raw cotton was very low in price the labour and other materials might happen to be 50 per cent or more of the cost, and under these circumstances these cottons might come in under the British preference. But when cotton prices were high certainly cotton manufactured goods from Great Britain would be debarred from the benefits of the British preference. I pointed out that in effect the Minister of Finance was saying to the consumers of Canada that when cotton prices were low the duty might remain as it was, but that when cotton prices were high he proposed to increase the tariff. In fact, I quoted some figures, which I will read at the present moment.
In ten years the average value of the raw cotton used in British mills was 46 per cent of the finished value of the goods. In one year it was about 58 per cent. It is quite obvious, then, that under this new proposal the advantage of the British preference will largely be lost to the British cotton manufacturers.
.On February 29, two days later, the Minister of Railways (Mr. Dunning) was addressing the house on the budget and I presume he was referring to my remarks when he said, as reported at page 893 of Hansard:
As to the criticism which has been uttered with respect to the intimation by the Minister of Finance that in future it was proposed to ask that all goods coming in, taking advantage of the British preference, should have a 50 per cent British or empire content. I desire to say just this: the Minister of Finance gave that intimation in no sense intending thereby to limit the British preference in the slightest degree.
Further on he said:
Some hon. gentleman in the far corner-I forget who it was-instanced the possibility that the raising of the limit to 50 per cent might have the effect of debarring British goods. I can assure my hon. friend on the authority of the Minister of Finance that there is no intention to permit it to be used for any such purpose, and if as a result of experience it is found necessary to provide a different percentage of content for different classes of goods, as other British dominions have done, it is quite within the competency of the government to work out the solution along those lines.
That assurance seemed fairly definite. But that is not all. On March 13 the Prime Minister (Mr. Mackenzie King), speaking in the same budget debate, made further reference

The Budget-Mr. Campbell

to this matter. Referring to this provision regarding the British preference, he said:
May I say this to the house:	If we discover,
in connection with the enforcement of a regulation of that kind, that the consumers of this country are in any particular losing the benefits which the British preference was intended to give, we shall not hesitate speedily to make such changes as the circumstances may demand.
Then the Prime Minister proceeded to deal with what I presume were my remarks, in which the suggestion was made that when cotton prices were high that was the very time the duty would be raised; and concluding on that particular point the right hon. gentleman said:
I wish to say that if that situation arises it is not the intention of the government to make the existing 25 per cent British content 1 per cent higher than it is at the present time.
Now these remarks of the two ministers cannot be misunderstood, and for my part I went home after last session feeling assured that this provision would not be carried into effect. Imagine my surprise, however, when on the first of February this year the provision, without being modified or amended to any degree, was put into effect. And it is in operation at the present time.
Some protests have been made by the British High Commissioner and by the British Federation of Industries over the enforcement of this provision. Their opposition is based, of course, on the opinion that it will debar some British goods from the benefits of the preference. On March 4, a week ago, I secured an order from this house for the return of correspondence between the government and the British High Commissioner and between the government and the British Federation of Industries with respect to this matter. I regret that although one week has elapsed I have not received these papers. On Saturday morning I called at the minister's office and was told that they were all ready, but the minister had not given his authority for them to be turned over to me. Of course I am not suggesting that he was withholding them until after this debate, but certainly the matter has been overlooked. I am sorry that these papers are not in my hands, because I should then be in a better position to deal with the question. At the present time the only information I have with respect to the protests made by the British High Commissioner and the British Federation of Industries is what I have gleaned from the newspapers. May I quote from the Manitoba Free Press of February 11 last. In a rather lengthy article dealing with this provision and its effects on interimperial trade the following appears:

Imports of cotton under the preferential tariff will be radically restricted unless the new regulations are modified. Efficiency of cotton spinning, weaving and finishing in England is so great that in many of the early stages of manufacture the cost of raw cotton, 20 cents a pound at the present time, is more than 50 per cent of the sale price of the article. Under the new regulations various cotton goods will be unable to qualify for the British preferential tariff.
And further on:
In the case of low count yarns, for example, the preferential tariff is 10 per cent and the general tariff 20 per cent. Grey cotton fabrics are dutiable at 12J per cent preferential and 22J per cent general.
This means actually doubling the tariff on many articles of cotton manufacture. Further on the article draws attention to the fact that Canada's importations of semi-manufactured and manufactured cotton goods in 1928 approximated $33,000,000. It goes on to say that ' this trade is divided between Great Britain and the United States; the British trade is almost entirely in manufactured goods while the United States trade is at least partly in semi-manufactured goods; and in conclusion the article says:
Therefore the new regulations, unless modified, will be of assistance to the Canadian textile industry.
On this point there is no dispute; the Canadian textile manufacturers are well aware of this feature of the new policy which, by the way, they are strongly supporting. The Canadian Textile Journal of January 17 says:
The new regulation is a progressive step and it should be enforced without qualification or equivocation.
Again I quote from the Manitoba Free Press of February 12, which contained an article dealing with the various commodities which will be affected by this provision. First there is the question of copper, and the article quotes from a memorandum presented to the minister by the British Federation of Industries:
"It is true," says the memorandum, "that copper is imported into Great Britain from within the British Empire but the main source of the world's supply is the United States of America. With the best of intentions British manufacturers will be quite unable to certify that any finished copper article exported to Canada is made of Australian copper and still less of copper from any other part of the empire, for the simple reason that firms importing copper cannot segregate supplies coming from one particular source or another."
Then it refers to the fur industry :
Still another industry to be affected will be fur manufacturing. There are no raw furs produced in the United Kingdom, and while quantities are brought, from Canada, a large part comes from Russia.

The Budget-Mr. Campbell
Then it refers to the matter of velvet, and says:
The raw material of velvet comes from China and Japan and is brought to England where it is woven. Then it is sent to Germany to be fabricated and back to England to be finished.
Then it refers to boots and shoes, and says:
It seems that much of the raw material going into British boots and shoes-leather raw hides-comes from the Argentine. To most people it will seem incredible that the cost of the raw leather should exceed 50 per cent of the cost of the finished product, but it is so represented in Ottawa. No doubt the cheaper grades of boots and shoes are more particularly affected.
Let us analyse these particular items; first there is the question of copper. Under ordinary circumstances it might be said that this provision would compel the British manufacturer to use Canadian raw copper, but at present this will be of no benefit to Canadian copper producers because, as hon. members know, there is a world shortage of copper. Just now it is not a matter of selling our copper; the output has been sold for months ahead, and all the copper mines in the world cannot keep up with the demands of the industry. Copper has risen over 50 per cent in the markets of the world during the last six months, so for that reason this provision will be of no benefit to the copper industry.
Then we come to cotton, and there seems to be no question but that the British cotton manufacturer must purchase his raw material in the United States, which debars cotton from the benefits of the British preference altogether. This affects not only Great Britain but also Australia, New Zealand, Czechoslovakia and France, countries which now enjoy special treaty tariffs.
I would like to point out that from what I have gleaned from the press the British High Commissioner has been very moderate in his demands. He is not asking the Canadian government to repeal this regulation; he simply asks the government that all materials not produced economically within the empire should bo exempt and that a list of the articles so exempt should be published as has been done in Australia land New Zealand. I may say that cotton is an outstanding example of these articles. Now may I quote again from a London despatch appearing in the Manitoba Free Press of January 21, as follows:
The British overseas trade department confesses itself surprised at the discovery that certain cotton goods exported to Canada from Lancashire cannot claim more then 50 per cent of their value to be due to British labour. An
important official said to me:	"I make it my
business to watch all that concerns trade relations with Canada and when the regulation requiring 50 per cent qualification for preferential tariff was announced it never occurred to me that textiles would be affected. There wSre some goods affected of relatively small importance, perhaps only one British firm would be supplying them to Canada, but in this case of cotton it affects Lancashire. I find that the goods causing the difficulty are grey cloths. Haw cotton comes here, is spun and woven and then sent to Canada for bleaching and dyeing. You will see that last year Canada imported nearly 29,000,000 yards of greys, of which more than 9,000,000 went from Britain. It is almost the largest item in our cotton trade with Canada and the new regulation will drive the trade to the Lnited States.
Now I would like to quote again from an Ottawa despatch appearing in the Montreal Gazette of January 18. This includes many figures which go to show that the effect of this provision will be to drive that trade to the United States rather than to Great Britain. It states:
During the first six months of the present fiscal year, Canada imported from the United Kingdom yarns and threads to the value of $2,136,714,'an increase of $300,000, as compared with the corresponding six months last year. This trade will be greatly handicapped if not entirely shut off under the regulation effective on February 1 next. On yarns over forties single. Britain has recently been taking the Canadian import trade away from the United States owing to the British preference, the customs duties being 10 per cent on goods from the United Kingdom and 15 per cent on goods from the United States.
Further oh there are figures which tend to prove this contention, and then the article proceeds:
The change a fortnight hence will undoubtedly result in dwindling imports from the mother land and increased purchases from the United States. British manufacturers claim that they are helpless, for they must import their raw cotton from the United States. -
If there were any doubts as to the ultimate effects of this regulation and as to the sources from which pressure was brought to bear upon the minister, those doubts may be set at rest by an editorial appearing in the Canadian Textile Journal of November 29 last, which states in part:
Manufacturers and producers will welcome the announcement from Ottawa that after February 1 goods to enjoy the British preference entering Canada will be required to be 50 per cent of empire material and labour, instead of 25 per cent as at present. The new ruling, which was forecast in the last budget, also applies to goods coming into Canada from other countries enjoying special treaty privileges, in which case goods must contain at least 50 per cent of the labour and material of the country from whence imported.

The Budget-Mr. Campbell
I would like to quote further from an article dealing with this regulation which appeared in the same issue of the Canadian Textile Journal:
This increase in empire content was foreshadowed by Hon. James A. Robb in his last budget and is due to the repeated demand of Canadian producers. -
So there should be no doubt whatever as to the source from which came the pressure. I hold in my hand a memorandum which was sent to the minister two years ago by the Canadian Manufacturers' Association recommending this very provision, with the exception that in some cases they requested a 75 per cent content instead of 50 per cent. Apparently this memorandum was turned over to the tariff board on May 5, 1926, and it seems not to have been heard by the board at all. Just here I want to point out what I consider a serious discrimination on the part of the minister. A year ago the United Farmers of Canada sent a delegation to wait on the minister asking for certain tariff changes which they considered in the interests of their industry. The minister refused to listen to them and said they must go before the tariff board. It now appears that these textile manufacturers were allowed in by the back door; they were not obliged to go before the tariff board and place their cards upon the table, but when the farmers asked the same thing they were curtly told they must place their case before the board. The following appears in an editorial of the Canadian Textile Journal of December 6th, 1928:
There is still much to be done on the question of the textile tariff, and it is gratifying to learn that the wool cloth items wll be reviewed again shortly either in a public or private enquiry, but it is our opinion that having stated its case publicly this branch of the industry will gain more through private conference with the Commissioner of Customs than by further public reiteration of its adverse condition.
Apparently they were speaking from experience.


Robert Forke: If I understood the hon.
member correctly, he made the statement that a deputation from the United Farmers of Canada came down to lay their case before the government and were refused a hearing and told to go before the tariff board. I was present at that meeting, and I think the Prime Minister was there, as well as the Minister of Finance and other ministers. Those men made their statement before a committee of parliament, so they were heard when they came to Ottawa.


Milton Neil Campbell: They must have been
told their case could not be considered, because certain members of that delegation came to us and informed us that the minister told them they would have to lay their case . before the tariff board. My complaint is that there is discrimination here; these other gentlemen were not obliged to go before the tariff board with their case. I would just as soon have it heard by a committee of ministers as by the tariff board, as long as there was no discrimination in the matter.
The following appears in an editorial in the Saskatoon Star of February 15. This editorial deals with the change which was announced in the method of applying the British tariff, and says:
When the change was announced it was remarked here that the effect wrould be simply to cut down the advantage enjoyed by British manufacturers in this market, and just to that extent, to discourage British imports into Canada.
The editorial goes on to itemize the various commodities affected, and in conclusion says:
Unless something like this is done, the change which occurred this month will be in effect nothing more than a straight increase of tariff taxation on British goods of several sorts. Increases in tariff taxation of any kind are certainly not in line with the declared policy of the government, nor are they demanded by the Canadian public. Least of all is there any call for higher duties on goods from Britain. Our trade with Britain now shows a very heavy balance in favour of Canada. If any change is to be made in the tariff levied on goods from the United Kingdom, the preference should be increased and not cut down. One may expect to see the government questioned on the matter during this session.
I would like to quote from the speech delivered by the minister (Mr. Robb) in this house on March 1, as follows:
Canada, the pioneer of the British preference, looks on empire trade as the key-stone of its external trade policy and desires in every way to foster closer trading relations throughout the British commonwealth of nations.
In this instance I think the actions of the minister belie his words. The minister continues:
As the years go by an increasing quantity of our domestic production must necessarily be marketed abroad. It is our desire to trade freely with any and all who are willing to trade with us.
That has been taken throughout the country, and I believe throughout the United States, as a gentle hint to the new government of the United States. But the same kind of hint may be given to us by Great Britain, because we are in precisely the same position with respect to that country as are the United

The Budget-Mr. Campbell
States with respect to Canada. On reference to the official trade report of the Department of Trade and Commerce, I find that our total imports from the United States in the year 1928 amounted to $825,740,612, while our exports to the United States amounted to $492,541,120. This leaves what we commonly call an unfavourable trade balance of $333,199,492. This figure is really increased in another way.
I noticed an article in the Financial Times of March 8, taken from the Wall Street Journal, protesting against any raise in the tariff on Canadian goods and pointing out that Canada is not only one of the United States' best customers for manufactured goods, but is also one of the best customers for its money. The article stated that up to the end of 1928 there was an investment of United States money in Canada amounting to $3,250,000,000. Taking an annual dividend of about five per cent on that amount, which should be paid by the shipment of goods to the United States, it will be seen that it would increase our unfavourable trade balance to about half a billion dollars. The trade reports show that our imports of cotton from the United States in 1928 amounted to $44,171,933, but of this amount $27,107,186 represents raw cotton, which leaves a balance of $17,064,747 in manufactured goods. I find that our imports from the United Kingdom for the same year amounted to $190,712,351, while our exports amounted to $447,883,646, leaving what is commonly called a favourable trade balance of $257,171,295. This is a trade we should foster and not put into effect regulations which will tend to destroy that favourable trade balance. We imported manufactured cotton from Great Britain to the value of $13,593,034, and our exports to Great Britain of grain and grain products amounted to $325,092,144.
Anything which will tend to interfere with the trade between Canada and England will be fraught with serious consequences for our grain trade. At the present time Great Britain is practically the only market we have for our grain and grain products. It is absurd to say that Great Britain must buy our grain, because there are other countries producing grain. Russia may be in a position in a short time to supply a great deal of the British market, and these other countries are prepared to buy dollar for dollar from Great Britain for the grain they sell. I would like to quote from a speech of Sir Herbert Holt delivered recently at the annual shareholders meeting of the Royal Bank of Canada. Referring to the agitation in the United States for an increase in the duties against Canadian products, he says:
It would seem that those who propose such tariff changes fail to realize that checks upon Canadian prosperity check the volume of goods which can be bought from the United States, and that on the other hand continued improvement in Canadian conditions brings corresponding increases in the volume of goods which they can sell us. From this viewpoint it might be considered economic statesmanship for the United States to discover means to increase their purchases from Canada rather than to consider measures which will constitute new trade barriers.
Any student of political economy will subscribe to the principle laid down by Sir Herbert Holt, and, paraphrasing his words, let me say: From this viewpoint it might be considered economic statesmanship for Canada to discover means to increase their purchases from Great Britain rather than to consider measures which will constitute new trade barriers. Sir Herbert Holt continues:
As a last resort, it may be necessary to meet this situation by direct tariff increases and by granting further preference to Great Britain and to most favoured nations.
When a known protectionist like Sir Herbert Holt advocates an increase in the British preference, one would not expect this government, which claims to be a low tariff government, to be putting further trade barriers in the way of Great Britain.
The following is a resolution passed at a recent convention of the United Farmers of Canada, held at Saskatoon:
Whereas the existence and continuation of agriculture in the prairie provinces depends upon satisfactory markets being found and maintained for wheat;
And whereas at the present time Great Britain buys a very high percentage of our wheat, while the United States virtually ex-eludes it by a prohibitive tariff;
And whereas Great Britain must sell her manufactured goods if she is going to be able to buy our agricultural products;
And whereas it is the avowed purpose of the Republican party to increase the duty against Canadian agricultural products;
And whereas many lines of goods now purchased from the United States could be supplied by the British manufacturers, Which could create a greater purchasing power for our wheat and other agricultural products;
Now therefore be it resolved that we call upon the government of Canada to immediately increase the British preference, and provide for successive reductions each year until we have free trade with Great Britain.
Let me appeal to the minister and particularly to the Prime Minister (Mr. Mackenzie King) to implement the pledges and assurances which they gave to the house last year that this provision would not be allowed to do what we know it is doing at the present time. I trust that if the government cannot see its way clear to eliminate the regulation alto-
The. Budget-Mr. Cam-pbell

gether, it will at least modify it to eliminate those products that cannot be economically produced within the empire.
I have just a few moments left and I wish to refer briefly to a matter which was brought up in the house by the hon. member for Acadia (Mr. Gardiner) when he spoke on the address. He drew the attention of the government to an agitation that was going on in western Canada asking for the dismissal of the Board of Grain Commissioners. I am not going to constitute myself a judge of the Board of Grain Commissioners, but this agitation cannot be overlooked; it cannot be dismissed because there is more behind it than a mere demagogic impulse. Resolutions were passed by the United Farmers of Alberta and the United Farmers of Canada calling for the dismissal of the board. I thought, after the matter was drawn to the attention of the government by the hon. member for Acadia, we would have had some pronouncement from the government, and I wish to point out now that we should have some pronouncement. This cannot be ignored and it cannot be delayed.
For some reason or another-I am not going to say just how-certain sections of the Canada Grain Act were ignored and overridden last year by grain companies. Sections 150 and 225 are the ones about which we have heard these complaints. Section 150 of the Canada Grain Act gives to the producer the right to determine the destination of his grain. We know that pool farmers placing their grain in line elevators have been refused that right time after time by private grain companies. Section 225 stipulates the form of ticket that shall be used, and it says that no ticket except that provided by statute or by an order in council shall be used. The ticket to which the hon. member for Acadia referred, and which is commonly called the "hybrid" ticket, was in general use last year. It is not one of those prescribed by statute; it is not covered by any order in council and yet, while repeated complaints were made to the Board of Grain Commissioners, no action whatever, so far as we know, was taken to carry out the law. As I say, we have no government pronouncement of policy with respect to the matter and we are entirely in the dark as to what the government propose to do. There are rumours-
I have read them in the press-that the government propose to ask parliament for a change in the Grain Act. It is absurd for the government to come and ask parliament for another change in the Grain Act until we enforce what we have at the present time. That
rMr. Campbell.]
is what the farmers are asking for to-day and until an honest attempt has been made to enforce the act, it is useless to come to the house and ask for other changes. I wish to impress this matter on the Minister of Trade and Commerce (Mr. Malcolm) who, I am sorry, is not in his seat. So far he seems to be very sympathetic to suggestions that were made to him from this side of the house, but I want to point out to him that the temper of the western farmer is such that this cannot be ignored, and neither this government nor any other self-respecting body would want to have its statutes overridden as these have been. The fact that these two clauses in the Grain Act-have been overridden during the past year has cost our western pools some millions of dollars. Millions of bushels of grain that should have gone directly to the pool terminals went to the terminals of the line companies. We know what has happened there; the grain is mixed down to what we call the minimum of the grade. The cream of the grain is sold and the premium secured and the skim milk, as it were, is turned over to the pool. In addition to that there are serious complaints of alteration in routing. Many factors that I cannot explain at the present time enter into this, but I wish to impress upon the government that it is imperative that some action be taken at the earliest possible moment with respect to the matter.


Mr. F. W. PERRAS (Wright):: Mr. Speaker, in company with other members, I take very keen pleasure in saying a few words in unqualified approval of the budget, so ably prepared and presented by the Minister of Finance (Mr. Robb). Ordinarily, a budget, being composed almost entirely of figures, makes very dry and uninteresting reading; but in the present instance at the very outset vivid interest is aroused by the figures quoted, in view of the fact that they mean a substantial reduction in our net debt of 850,984,137.17 for the fiscal year 1927-28, and that the estimated total revenues for the fiscal year 1928-29, ending March 31, will be in the neighbourhood of $454,942,000. Nothing can speak more highly in favour of the present administration than these figures, and, w'hen the increases of $28000.000 in customs revenue, $6,000,000 in excise duties, $1,900,000 in income taxes, $660,000 interest on investments, and $840,000 from miscellaneous sources are taken into consideration, even the youngest student of statistics is struck by the results. A rapid calculation of revenue and expenditures gives the gratifying result of $69,782,000 of estimated surphn revenue.


The Budget-Mr. Perms
The scrupulously clear compilation of figures prepared by the hon. Minister of Finance shows that Canada's finances are in competent hands and that we need have no fear of mismanagement. Figures do not lie, and the substantial increase in revenue over expenditures can mean nothing but commendation of the government and its methods. No effort has been spared to place before the public, in a most implicit manner, undeniable proof of honest endeavour, combined with ability, to place Canada on an enviable footing. Progress is the watchword.
There is something in this year's budget to meet all requirements. The reduction in the sales tax will please the purchaser; the reduction in the national debt will please everybody ; improvements in various services have been carried out, and although there is bound to be some criticism-for if there were no criticism there would be no opposition-yet there is no denying that this government has done wonders.
It is indeed a very great honour, Mr. Speaker, of which I am deeply appreciative, to represent in this parliament the county of Wrighf. Situated as it is along that wonder-fid valley [DOT] of the Gatineau-and I may say in the heart of the Laurentian hills-it is unsurpassed in beauty and in picturesqueness by any portion of the so-much talked of and so much admired Swiss Alps. I doubt indeed if the grandeur of the Rockies can compare with the beauty of the Gatineau valley and the Laurentian hills. But, sir, I am not only concerned about the physical features of that wonderful country; but I am even more anxious to see that the interests of those pioneers be looked after as a component part of this great dominion. I am satisfied that those interests, diversified as they are, have been well safeguarded by the policy of the Liberal government, and particularly by the budget speech of the hon. the Minister of Finance.
Of course we all know that agriculture is at the base of the national prosperity of Canada, and that to that hard-working, self-sacrificing and patriotic class we owe a great deal. But I feel that by virtue of the Liberal policies those interests are well protected under the able administration of the present Minister of Agriculture (Mr. Motherwell). I want to state clearly that this basic industry of agriculture must continue to be safeguarded, to be properly looked after, and that the interests of those who contribute such a large part to our national existence should continue to receive all the care and attention to which they are so well entitled.
Now, Mr. Speaker, there is one subject on which I must say a few words-the Beau-harnois project, which loomed up not so very long ago as a mountain of contention and resolved itself into a national windfall. There . is no doubt whatever that the realization of this enterprise will mean a lasting benefit to Canada. The bugbear of a monopoly of untold magnitude has been duly enlarged upon, but this argument was met by such an able refutation that even those who wavered in their allegiance became firmly convinced of the necessity of supporting this measure.
The Prime Minister (Mr. Mackenzie King), in laying before the house all the data in connection with this undertaking, left nothing to be guessed at; with the exception of the technical details that must necessarily be left to expert engineers, we know all there is to be known about this great national enterprise. The findings of the advisory board, the decisions arrived at in conference, and the wording of agreements have given us ample assurance that Canadian rights will be protected in every possible way and no serious-minded Canadian citizen can possibly feel alarmed because an undertaking of great magnitude has been consummated. There are, of course, conscientious objectors, but the really fair-minded, far-sighted business man could not but feel that he is in duty bound to give the project favourable consideration.
In conclusion, Mr. Speaker, I must say that one does not need to be an incurable optimist to feel elated over the success that has attended the efforts of this administration, and even the confirmed pessimist will eventu-aly, if he finds it too difficult to become a convert, silently fold his tent, and, like the Arabs, steal away. I do not want to pose as an extremist in fair weather prophecy, but the figures have been tabled, concrete results have been shown, and deficits are conspicuous by their absence-what better proof could' be asked for?
On motion of Mr. Brown, the debate was adj ourned.
On motion of Mr. Robb the house adjourned at 10.40 p.m.
Tuesday, March 12, 1929