1931-06-05

[Stage Direction]
Second report of the select standing committee on banking and commerce-Mr. Matthews.

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Hon. J. D. CHAPLIN (Lincoln) presented the first report of the select standing committee on railways and shipping owned, operated and controlled by the government of Canada.
Mr. Chaplin moved that the report be concurred in.
Mr. POULIOT:: I should like to ask the hon. member for Lincoln, who is chairman of the committee, when the next sitting will take place.
Rules of Debate


Mr. CHAPLIN:: The next sitting of the committee will be on Tuesday next.


[Stage Direction]
Motion agreed to.


Hon. HUGH GUTHRIE (Minister of Justice) moved:: That Bill No. 35, an act to remove the necessity for the reelection of members of the House of Commons of Canada on acceptance of office, which was read a second time on the 8th day of May, 1931, be placed on the order paper for consideration in committee of the whole at such time as may be appointed by the house.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Is this the bill of the hon. member for Cartier (Mr. Jacobs)? He is not here.


Mr. SPEAKER:: This is the bill introduced by the hon. member for Cartier, which was given second reading, but which was dropped from the order paper when the motion to refer it to committee of the whole was negatived.


William Lyon Mackenzie King: I had a talk with the hon. member in regard to the bill, and I understood he did not intend to proceed with it further this session.


Hugh Guthrie: That might be his intention, but I believe it is open to any hon. member to move to restore the hill to the list.


Pierre Édouard Blondin: The bill is the property of the house; it is a public bill, and I think it is open to any hon. member to make this motion.


William Lyon Mackenzie King: I do not take exception to your ruling, Mr. Speaker, but I should like it to be understood that it is being revived by the government and not by the hon. member himself.


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Motion agreed to.


[Stage Direction]
On the orders of the day:
Pierre Édouard Blondin: Before the orders of the day are called, with the indulgence of the house I should like to direot attention to a rule which appears in Bourinot with regard to proceedings of this house. During the

debate on the address very wide latitude was allowed in regard to the practice of reading from prepared speeches. May I direct the attention of hon. members to the following passage in Bourinot's Parliamentary Procedure, fourth edition, at page 335:
It is a rule in both houses of parliament that a member must address the house orally, and not read from a written, previously prepared speech; for the reason, that "if the practice of reading written speeches should prevail, members might read speeches that were written by other people, and the time of the house be taken up in considering the arguments of persons who were not deserving of their attention." It is the invariable practice to discountenance all such written speeches, and it is the duty of the Speaker to interfere when his attention is directed to the fact. Members may, however, make use of notes in delivering a speech.
I hope it will meet with the approval of the house if that rule is more strictly adhered to during the debate on the budget and in future debates in this house.


William Lyon Mackenzie King: Why confine it to the debate on the budget, Mr. Speaker? Why not enforce the rule at all times?


Pierre Édouard Blondin: I said also, the debate on the budget and future debates in this house.


William Lyon Mackenzie King: I beg Your Honour's pardon.



SALES TAX COLLECTIONS

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On the orders of the day:
Mr. F. W. GERSHAW (Medicine Hat):: I wish to ask the Minister of National Revenue (Mr. Ryckman) a question based on a telegram I have received from the chamber of commerce of Medicine Hat. Wholesale merchants of that city have been notified that the onus of collecting the sales tax will rest upon them, and they point out that this will work a grave injustice to the ordinary merchants of the country, who will buy from the wholesalers and add the sales tax to their price, while the chain and departmental stores will buy largely from the manufacturers. Will the minister give this matter his attention.


Hon. E. B. RYCKMAN (Minister of National Revenue):: I may inform the hon. gentleman that other telegrams have been received to the same effect. The matter is receiving attention.



PENSIONS AND ALLOWANCES

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On the. orders of the day:
Mr. C. G. POWER (Quebec-South):: May I repeat a question which I have asked the Minister of Pensions and National Health

The Budget-Mr. Smith (Cumberland)
(Mr. MacLaren) on several previous occasions, whether it is the intention of the government to bring down at this session any amendments to the Pension Act.


Hon. MURRAY MacLAREN (Minister of Pensions and National Health):: As I have before informed the hon. gentleman, the matter is under consideration.



INQUIRY FOR RETURN

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On the orders of the day:
Hon. P. J. VENIOT (Gloucester):: I wish to ask the Secretary of State a question with reference to a matter which I believe comes under his department. On April 22 an order of the house passed for the production of papers in the case of Nordin v. the King. The motion was not moved by myself but by the hon. member for Mount Royal (Mr. White); but inasmuch as this is a New Brunswick case in which I am somewhat interested I should like to know when the papers will be brought down.


Hon. C. H. CAHAN (Secretary of State):: If the hon, gentleman had asked the question yesterday I should have been able to tell him, because I had then a complete list of all orders indicating their stage of preparation. If he will give me the reference number I will look it up. Does the hon. member remember the reference number?


Peter John Veniot: No.


Mr. WHITE (Mount Royal):: It relates to the Railway department.



RIVIERE-DU-LOUP STATION

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On the orders of the day:
Hon. MAURICE DUPRE (Solicitor General) (Translation):: Mr. Speaker, with reference to an order of the House as regards information requested by my hon. friend from Temiscouata (Mr. Pouliot), namely:
1.	The date of departure of the Solicitor General for the Imperial Conference? The answer is: September 23;
2.	The date of his return? December 12;
3.	During the period of his absence overseas did the Solicitor General communicate by letter or wireless, cablegram or wireless telephone with whomsoever in connection with the proposed construction of a new railway station at Riviere-du-Loup? The answer is: no.
4.	If so, at what dates?
The answer to question 3 dispenses me with answering No. 4.



THE BUDGET


[Stage Direction]
The house resumed from Thursday, June 4, consideration of the motion of Right Hon. R. B. Bennett (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Ralston.
Mr. R. K. SMITH (Cumberland):: Following your general warning, Mr. Speaker, with respect to the reading of speeches, I shall endeavour to keep as far away from my notes as possible without getting lost. I may, however, have to refer to them occasionally in order to keep the trend of the discussion in some sort of respectable order before this honourable house.
May I at the outset extend my congratulations to the Prime Minister and Minister of Finance (Mr. Bennett) on his presentation to the house of one of the most comprehensive budgets delivered in Canada since the national policy was brought down in 1879. I am fortified in this view by expressions from one end of the dominion to the other by leading newspapers as well as by business men and others versed in this country's affairs. I desire to thank the Prime Minister on behalf of the people of Nova Scotia for the consideration extended to the coal-steel industry under the tariff readjustments and rail subventions. We have every reason to hope that they will be of inestimable value to the province down by the sea, and I feel I am expressing the unanimous sentiment of all those of independent thought in that part of the dominion when I say that the Prime Minister of the country has made an honest, sincere and, I think, most tangible effort to fulfil a pledge made by him to inaugurate in this country a national fuel-steel policy.
The budget may not be unanimously popular in the Dominion of Canada; that Was not the intention: it was not created for that purpose. A campaign budget was delivered in this house by the Hon. Mr. Dunning a little over a year ago. It was not a budget in the real sense as we understand them. This budget now before us is a business statement; it is not a campaign document. We are dealing at the present time not with theories but with conditions. The Dunning budget of 1930 dealt with theories and not with conditions. It lessened taxation when there was no justification in the world for doing so; and the Liberal party thereby conveyed to
2332	COMMONS
The Budget-Mr. Smith (Cumberland)
the people of Canada, with respect to the fiscal and financial affairs of this dominion, an impression which I am afraid misled them as to what that party intended to do in the future in matters of finance and trade. The people were expected to swallow all that was contained in the Dunning budget of 1930. But it occurs to me that the people thought they had their swallowing apparatus somewhat overtaxed and overworked during the past nine or ten years, swallowing doctrines contained in budgets and other pronouncements made by the King administration. On July 28 last, therefore, the people very wisely decided that they would no longer disturb their political digestion by swallowing a budget which was politically indigestible.
Considering the very thorough and capable manner in which the Minister of Trade and Commerce (Mr. Stevens) dealt with and disposed of the observations and criticisms made by the hon. member for Shelburne-Yarmouth (Mr. Ralston), whom I am very sorry indeed I do not see in his seat at the present time, inasmuch as I should like to make some references to his statements, I do not deem it necessary-in fact, I think it would be useless-to traverse a great deal of the ground covered so admirably by the minister in his splendid and vigorous speech. But it will be my endeavour to confine myself to a few observations concerning tariff readjustments in their relation to coal and the rail subventions.
I said I regretted the fact that the hon. member for Shelburne-Yarmouth was not present. He is a distinguished son of the province of Nova Scotia and I may say frankly that in common with his fellow-townsmen-* we both belong to the same place-I hold him in the highest esteem. I wanted to tell him that in my judgment he made a capable presentation, from his point of view, of this outstanding budget, but I cannot agree with his reasoning. The hon. member, in a speech lasting two hours, gave to the people of Nova Scotia but a scant ten minutes when he referred to the proposals contained in the budget which are bound to have a beneficial result to that province. He did not mention at all the steel industry, and referred only in a glancing way to the aid given to coal which is of such vital concern to the people of Nova Scoit-ia. The hon. member was very pessimistic over the budget, and considering the benefits we hope to result from the tariff readjustments and the rail subventions, it seems to me he was most unduly gloomy. The Liberals in that province are also most pessimistic; natur-< ally they are not pleased with some of the 
measures contained in the budget with respect to these important industries. It is natural to expect that they all would foe disturbed but I think the hon. member for Yarmouth should have said: Let us give these readjustments and subventions a fair trial. However, he was not willing to dio that but intimated that he did not expect there would be a change of any consequence in the quantity of coal placed in upper Canada or anywhere else through the provisions contained in the budget.
For the past number of years the newspapers mouthpiece of the Liberal .party in the province of Nova Scotia, located at Halifax, has been arguing with itself and a number of its fictitious readers that no government of the Dominion of Canada would have the courage to place an additional duty on coal because of the fact that other more thickly populated portions of the dominion were opposed to an increase in the tariff. During the last three campaigns in which I have been engaged, that was the main point argued against my reelection and against the attitude of the Conservative party. Although it W'as admitted that this party was protectionist and favoured safeguarding to some portions of Canada it was said that the protection promised would not be afforded to the coal industry because no government would have the courage to adopt such measures. Well, we have found a government that has had the courage to do it, and I think it has been done in a splendid-manner.
Not so many years ago a very prominent journalist in the province of Nova Scotia pamphleteered the entire country with a statement from his own pen that he was in faVour of regional tariffs because we had no hope whatever of obtaining tariff increases from any political party. It only goes to show that the Conservative party is standing true to its colours; it is a protectionist party and when it says it will do a thing, it does it.
There were some of us in the province of Nova Scotia, members of the Conservative party, and also a number of others-I might mention in particular the Halifax Herald which has been in the vanguard of every movement for the benefit of the maritime provinces-who had consistently maintained that if given the opportunity to legislate the Conservative party would place these vital basic industries in a position where they would be legitimately protected. Under the present budget and the readjustments which have been made in the tariff I think we might reasonably expect to reach an extended regional area in eastern Ontario and place there the products of the Nova Scotia mines to a degree which

The Budget-Mr. Smith (Cumberland)
we were not capable of doing before. If we were able to place upwards of a half million tons of coal in certain regions in the province of Ontario under the old subvention of one-fifth of a cent per ton mile surely an increase to one-third of a cent per ton mile will make it possible to extend that area that much farther west into Ontario. With the tariff increase on bituminous coal from fifty to seventy-five cents per ton, it is surely reasonable to expect that we will be able to penetrate farther into the Ontario region before we come in competition with the American coal which under the old rate overtook us before we got very far.
As I said before, this budget should be given a trial before being condemned. Yesterday the hon. member for Yarmouth said that he did not want to look a gift horse in the mouth; he is not only refusing to look a gift horse in the mouth but he is giving it the boot without inspecting it at all. I maintain that is not the view which should be taken in this important matter by an ex-minister of the crown coming from the province of Nova Scotia.
The decisions as to whether or not this budget will be ,of benefit to the coal industry of Nova Scotia need not be based upon what the hon. member for Yarmouth has said, or upon what any hon. member of this house might say; naturally our views are somewhat coloured, but I can give to the house views which are not coloured and which I think will prove to be convincing that what is contained in the budget is of great consequence to us. Mr. D. W. Morrison, the mayor of Glace Bay and president of the United Mine Workers of America,-


Mr. QUINN:: A very prominent labour man.


Robert Knowlton Smith: creased obligations, I believe the government has adopted a sane policy and pursued a wise course in endeavouring to steer clear of anything which would be in the least likely to disrupt the ordinary channels of trade.


Mr. HARRY BUTCHER (Last Mountain):: Mr. Speaker, as one who is no longer young in point of years but is young in respect of membership in this house, I want first of all to congratulate .the rigiht hon. the Minister of Finance (Mr. Bennett) upon the remarkable speech made by him in this house on Monday. Especially do I wish to express my appreciation of the care he took to explain in the clearest of terms the financial structure of this dominion. I am sure his explanation of our financial status has proved as interesting to other new members as it did to me. Having rendered that tribute to his monumental! effort, however. I regret that now I have to express disappointment in the fact tthat his speech so clearly revealed that he is still unshaken in his faith in the efficacy of a high tariff policy as a tonic calculated to restore prosperity in Canada. So much has happened since the special session of 1930 which might have caused the right hon. gentleman to change his views on this subject I *had hoped that he would not only refrain from further increases in duties but might have been led even to reduce the duties which have been imposed on goods which might be brought in from Great Britain and her sister nations. I firmly believe that in the commonwealth of nations composing the great British Empire we will at all times find our best customers.
I want briefly to refer to some of the events to which I have alluded, events which in my opinion might have induced the Prime Minister to change his views. First of all I would refer to the reception tendered to the proposition he voiced at the Imperial conference in Great Britain. I think he himself would admit that his proposals were not favourably received. In this connection I would like to read to the house two comments on speeches made by British parliamentarians and recorded in the Journal of the Parliaments of the Empire for the. month of January,. 1931. At page 27 of that journal I find the following comments on the remarks by the Right Hon. J. H. Thomas:
Continuing, Mr. Thomas examined Mr. Bennett's proposals and said that in exchange for 10 per cent on foodstuffs, British soft coal, now taxed at Is. 7Jd. per ton into Canada, would get a benefit of 5 cents per ton. Germany, the Argentine, the United States and the Netherlands all admitted British coal free now'. Railway rails had a duty in Australia of 2s. and 4d. per hundredweight against Great

Britain - the Netherlands and Argentine admitted them free. Sew'ing machines had a preferential rate into Australia of 15 per cent against Great Britain, while Germany only imposed 9 per cent. Cotton goods-55 per cent in Australia, Canada 15 per cent, Germany 6 per cent, France 10 per cent, Netherlands and Argentine free. After quoting other percentages, Mr. Thomas asked whether there was any business man who would dare to take the risk of saying that it -would be a good proposition to accept the offer. It was only after the government had seen' exactly how it would work that they said: "No, it is not a good business proposition, and it cannot be accepted by us."
At page 37 of the same publication I find the following comment on the speech by the Right Hon. Philip Snowden:
It was said that the government had missed a great opportunity. They had missed the opportunity of taxing the food of the people, of adding to their economic burdens, of injuring a large part of their foreign trade. . . .
It did not take the government long to make up their minds and to come to a conclusion as to W'hat their attitude must be in regard to Mr. Bennett's proposal. It was the only proposal that was put before the conference from the dominions. The proposal was this:-"I am not going to reduce the tariff against the United Kingdom, but I will raise the tariff against the foreigner by 10 per cent of the present rate." That meant that if there were a duty of 30 per cent against the foreigner now, the duty would be raised to 33 per cent. Mr. Bennett had been returned to power a few weeks before it was necessary to come to the conference, and for a fortnight before he left Canada he was engaged in preparing for the conference by making large additions to the duties upon British imports into Canada.
His constituency was interested in woollen goods and had a large trade with Canada. The Canadian raised the duty upon 30-oz. woollen cloth from 7}d. to 2s.-3id. Scores of other instances could be given of similar action by Canada and Australia. Then Mr. Bennett came and said: "If you will put a tax upon foreign wheat, I am going to give you no reciprocity. I am going to keep the tariffs against the United Kingdom as they are."
I want to say at this point that I am absolutely in agreement with the views of many of the followers of the right hon. gentleman who attribute to him certain very admirable characteristics. Quite repeatedly I have heard hon. members on the other side of the house refer to the sincerity of the Prime Minister, to his courage, and to the bluntness and plainness of his speech. I agree he possesses these characteristics and because of them often I find myself admiring him. In particular, every time I hear him speak concerning matters of tariff I am more and more impressed with his sincerity. At the same time however I hope that my belief in his sincerity does not render it wrong of me to doubt his judgment. Certainly I am impressed with his courage; he is a very cour-

The Budget-Mr. Butcher
ageous man. He went to the Imperial conference in a most courageous spirit. However I am reminded of the old saying to the' effect that valour should be tempered with discretion. The fact is, however, that he is remarkably blunt, and I believe all hon. members to a certain extent admire bluntness. We do expect however that those who are blunt will tolerate bluntness in others.


Mr. MOTHERWELL:: Good logic.


Harry Butcher: Mr. Bennett has been
referred to as the outstanding man at the Imperial conference; no doubt that reference is correct. Mr. Snowden has said that Mr. Bennett was the only person who submitted a proposition to the conference; we find however that his proposals were not accepted by Great Britain. It seems to me that the right hon. gentleman holds the view that we can continue to sell to other countries without in turn buying from them. From his speeches I believe we may reasonably draw that inference. As a matter of fact, referring to the budget speech of the right hon. gentleman we find that he quoted with approval the remarks of the president of the United States Steel Corporation. The quotation is as follows:
It is a sound economic principle to sell in markets where the product is needed for consumption and where there is no surplus of the same commodity.
I submit, Mr. Speaker, that that is very elementary economics. I wonder as a matter of fact that the president of the United States Steel Corporation would give expression to anything so elementary, and I certainly wonder that the right hon. gentleman saw fit to quote it. I think our manufacturers would say that to sell in any market whatsoever that will purchase our goods, not taking into consideration whether those goods are needed for consumption or whether there is a surplus of that commodity in the purchasing country, is a sound economic principle. I would go farther than that however and submit that even as an economic principle it is very imperfect. It is only fifty per cent of a principle, if I may say so, and there is a correlative fifty per cent which might be quoted as follows:	It is a sound
economic principle to buy only in markets that will buy from you your surplus products to at least approximately equal value. In other words, Mr. Speaker, I do not see how we can expect to find a market which needs our goods without purchasing something from that market in return. That is at least my personal conviction. We must bear in mind
also that we are not the only country that has surplus goods to sell, and if we will not buy from the countries which need the products we have to sell, they will find other countries which will buy their products.
I remember hearing an hon. gentleman say in this house some time ago that the present depression had existed1 in other parts of the world before it came into existence here. He said that after all we were in the backwash of that depression. I will go further and say that there has been over the world since the war a tariff mania. Would' it be incorrect, Mr. Speaker, to call it tariffobia? I think we might use that word. We find to-day that very many countries are regretting the stand they took in the past on this question. I said that one of the things which happened, which might have convinced the Prime Minister that it would be wise to amend his tariff policy, was the reception he received at the Imperial conference. I think a second matter might be the diminution of trade which is quite evident since the tariff policy of to-day came into force 'last September. A third point might be this: We find leading business men and economists throughout practically all the countries which have high tariffs beginning to move away from the idea that high tariffs are good for the country. We hear complaints on all sides, and I believe that in Europe, in parts of the United States, in Australia and in other countries associations of business men and economists are being formed with a view to inducing their governments to reduce tariffs.
Another reason was this: we expected a continuation of the Imperial conference in Canada this fall, and in view of what I would call the failure of the high tariff policy in the past I was hoping the Prime Minister might come to the house and say that no tariff increases would be made at this session, but that concessions would be made to other parts of the empire. At the same time the Prime Minister gave expression to that economic principle enunciated by the president of the United States Steel Corporation when he said:
May I point out to the house that all the domestic trade of this country which represents imports is foreign trade to some other country. . . . Our business is to see that we do not expand the foreign trade of any other country when we ourselves are producing or can produce the goods so imported.
Does that not apply to other countries also? Is it not true of every other country? That which may be exports from this country most certainly is imports to some other country, and other countries have as much right to

The Budget-Mr. Butcher

adopt those words and use them for themselves as we have. Then the Prime Minister said:
It is very simple.
Yes, I presume it is very simple. I will adopt those words as well, but I will go further and point out that I do not use the word "simple" with the same meaning. I looked in the dictionary before coming to the chamber to find the meaning of the word, and I find it has at least two meanings. The first meaning is "intelligible, clear, plain"; the second meaning is, "not wise or sagacious; silly." I would not for a moment say that any proposition brought .before the house by the Prime Minister is silly, but I do say that in my opinion it is not wise or sagacious to expect that we can continue to sell our surplus goods to other countries without buying anything in return.
I wonder if hon. members of this house have noticed how the spirit is spreading. Have you noticed that even the governments of our provinces are advertising that we should purchase the things we need only in our own province, and that we should not buy from other provinces if we can avoid it. Thus we have a "Buy in Saskatchewan" campaign and a "Buy in Manitoba" campaign, and it is worse than that. We find they are trying to put walls around our cities and towns. We are told that we should support home industries. That is all right; there is nothing wrong with that principle, but it can be amplified too much, in my opinion. There was one gentleman in western Canada who went even further than that; I refer to the Minister of Agriculture for Saskatchewan. According to the Manitoba Free Press of March 31 of this year:
. . . . Mr. Buckles also said that things that farmers used to make for themselves on the farms are now being made in factories, with the result that farmers now depend more and more on cash returns for their prosperity. "I have always maintained," the speaker said "that it should be the duty of every farmer to produce his own requirements."
So the farmer is to put a wall around his farm and manufacture what he needs himself and buy nothing outside; the town or city is to call upon its inhabitants not to deal with ether towns or cities; provinces are to call upon their people not to deal with other provinces, and the Dominion of Canada is to say, "We do not want to purchase from any other country." It is very simple indeed, I frankly admit.
The right hon. Prime Minister also made some statements with regard to inter-imperial trade. He said:
Hon. gentlemen opposite seem to find difficulty in working that out.

He was referring to the fact that there was no reason why we should not confine our trade largely to within the empire:
Of course they will find difficulty, for the simple and obvious reason that for nine years the colossal failures they made themselves indicate their inability to do so, and that is why we are here to-day.
I do not think the Prime Minister gave due consideration to those words before he uttered them. I look at our trade returns for the nine years to which he refers, and I find that with only one exception our imports and exports increased year by year. Our imports were as follows:
1922	 $ 747,804,332
1923		 802,579,244
1924		 893,366,867
1925		 796,932,537
1926		 927,328,732
1927		 1,030,892,505
1928		 1,108,956,466
1929		 1,265,679,091
1930		 1,248,273,582
With regard to exports, we find the same rate of increase until the last year, as follows:
1922	 $ 753,927,099
1923		 945,295,837
1924		 1,058,763,297
1925		 1,081,361,643
1926		 1,328,700,137
1927		 1,267,573,142
1928		 1,250,598,034
1929		 1.388,896,075
1930		 1,144,938,070
The year 1930 was the only one during that period when there was a reduction in our exports.


Sir GEORGE PERLEY:: Would the hon.
gentleman mind completing the record by giving the figures for the last fiscal year, so that they can be put immediately after the others?


Harry Butcher: Unfortunately I have no figures later than March 3ll, 1030. 'I was referring to the nine years to which the Prime Minister himself referred. The total trade increased from, roughly $1,501,000,000 in 1922, steadily every year until 1929, when there was a total trade of $2,654,000,000. Then it dropped in 1930, when it was $2,393,000,000. So that every year except last year there was an increase in the total trade done by the country. It seems to me, therefore, that the Prime Minister was not fair in stating that the Liberal party had been a colossal failure during the last nine years, so far as trade was concerned.
I shall now say a few words with regard to the Prime Minister's statement with reference to his proposed methods of raising revenue.

The Budget-Mr. Butcher
At page 2171 of Hansard the Prime Minister is reported as follows:
We propose, therefore, to indicate now to the house the methods to be adopted for the purpose of raising necessary revenue to meet expenditures. . . . Two principles have to be borne in mind; the first is that however tempting the field may be, in a period of great depression departure from known practised methods of taxation should be as slight as possible. In other words, there should be as little dislocation of business as possible and the taxes imposed should be those with which the people are familiar. The second is that taxes should be as light as possible having regard to the conditions which prevail.
I wish hon. members to note this:
Applying these rules first of all we take up customs duties, or the tariff. By this government the tariff is used for the purposes I have indicated. . . . With that in mind we have undertaken revision of only such items as it was necessary to deal with to ensure the maximum of employment by reason of the operation of the new rates. A similar result was obtained by our action during the last session.
It will be noted that the Prime Minister says that this is to be one of the methods employed for the raising of taxation. He says later that this was the idea in mind also in raising the tariff last session. The prime reason for doing this was to ensure employment in the country. It is quite clear, therefore, that his idea is that there shall be no imports of these particular goods. I ask, then: how can any revenue be raised, how will duties be imposed on goods that will not ibe imported-on goods in fact that cannot be imported, seeing that the reason for raising the tariff is to keep out such goods? The Prime Minister in this regard said:
I pause at this time to ask hon. members opposite what the condition of this country would have been had there been no short session. I just put that question to my hon. friends.
With his permission I will answer that question to the best of my ability. I say frankly that had there been no short session at all, and had no other arrangements been made to meet the serious conditions then prevailing, the results would have been disastrous to the country. I frankly admit that the expenditure of the $20,000,000, coupled with expenditures provided by the provinces, assisted very materially those who would otherwise have had no means of subsistence during the winter. But that is but one phase of the situation; there is another answer to the Prime Minister's question. Had there been no special session, but had the government instead, by governor general's warrant, allotted the sum of $20,000,000 for the purpose of relieving unemployment, the unemployment situation
22X10-149i
would have been relieved and, without that special session, we should not have had the increase in customs duties. And that, I believe, would have been all to the good of this country, for it would have enabled the Prime Minister to go to the Imperial conference in a very much better position to meet the situation that then existed than he was in view of the fact that we in Canada spent those two weeks raising the tariff against goods that might have been brought in from the old country.
The Prime Minister said further:
We, therefore, propose to provide that the freight rates shall be adjusted by this country absorbing 5 cents per bushel on all wheat that is exported of the crop of this year.
Now it is difficult even to comment on this statement inasmuch as the right hon. gentleman did not enlighten us how he proposed to see that this 5 cents should be paid. Personally I think there may be some difficulty. I do not say that the Prime Minister cannot get around it, but I do not for a moment see how wheat that is used for domestic purposes can be distinguished from wheat intended for export. When the wheat is sold by the load to the local elevator or is shipped by carload to the terminal elevator, it becomes a part of a very large bulk of wheat, and I do not see how you can distinguish the export from the domestic wheat. I suggest that a better way of doing it would be to have the 5 cents per bushel paid to the farmer when he delivers his load to the elevator, or added to his grain cheque when he receives payment. Then every farmer would receive that 5 cents.
Some hon. members, I understand, feel that it is not right for the farmers to be paid this 5 cents per bushel because it is a departure from the time-honoured principle which the farmers of the west at any rate have so long held, that there should be no bonuses to either farmers or industrialists. It does seem to me, however, that since the government has deemed it advisable to assist the manufacturers by imposing a duty on imported goods, and also to assure profits to corporations, the farmers are justified in accepting the 5 cents and wishing it were 10 instead.
With regard to the income tax, I wish the Minister of Trade and Commerce (Mr. Stevens) were in his seat, because I think he made a mistake in his speech yesterday. I do not think he intended to be misleading, but that is the effect of his words. At page 2312 of Hansard he is reported:
Let me state it clearly: the increase of 25 per cent in the corporation income tax will bear more heavily upon the richer men, and will cost them more than they would save by
[DOT]2340
The Budget-Mr. Coote

the reduction of the personal tax maximum to 25 per cent. Let us take the other point, the proposal in these resolutions to reduce to 25 per cent the maximum that may be taken in income tax. Why is that done?
I think the minister has made a mistake there, and the country will be very unwilling to accept the explanation he gave. Indeed, it seemed to me that he laboured very hard in making that explanation; he was not satisfied with it himself. As a matter of fact, I think you will find, if you look closely into the matter, that the man whose income is a million a year-there are not very many in Canada, but I understand there are some- will be taxed to the tune of $120,000 less than he would have been had the old income tax schedule remained in force.
I will close my remarks with one suggestion to the government. Notwithstanding all we may say, notwithstanding our unwillingness to advertise our troubles to the world at large, I firmly believe that the coming winter will see much of hardship and distress throughout the country as a result of unemployment and poor crops. It would be wise, therefore, for the government to prepare soon to provide for the needs of people who are suffering. In this country, with millions of bushels of -wheat to spare, with stares full of clothing, and with an abundance of fuel, it will be a .crime if our people are allowed to be hungry, Ill-dad or cold during the coming winter.


Mr. G. G. COOTE (Macleod):: Mr. Speaker, the Prime Minister (Mr. Bennett) took two and a half hours to deliver the budget speech which we are now considering, but as I am allowed only forty minutes I am sure the house will not expect me to cover the budget in detail. Like every budget which has been presented, there are some things in this one of which we approve and other things of which we disapprove. We will have to wait until the schedules are being considered in committee in order to have a complete discussion of these different proposals. However, there is one outstanding thing in this budget, the great deficit shown in the country's financial statement, the greatest in any year since I have had the honour to be a member of this house. I think one of the first things we should do is to inquire as to the cause of this deficit, amounting to something in excess of $75,000,000. A budget always gives some indication of the financial condition of the people. The revenues of this country are derived very largely from taxes on trade and if our revenue falls off it is a good indication that trade has also fallen off. One of the outstanding features of the Prime Minister's

statement is his attempt to balance the budget by means of drastic increases in taxation, on the one hand, and reduced expenditures, on the other. I do not think the budget can be balanced by such methods. It is a very fine thing to have the budget balanced but it is not essential. The Prime Minister does not occupy his present position because he promised the people to balance the budget; he is Prime Minister because he promised to cure unemployment, and I cannot find any suggestion in this budget that unemployment is to be cured. I do not think the budget as brought down will even reduce unemployment, and it does not hold out any *promise that unemployment relief will be granted to get us through this winter. The Prime Minister prided himself that this was a real budget, that he had given an estimate of the expenditures and revenues for the coming year, but so far as I am aware it does not contain any estimate of expenditure for unemployment relief this coming year. I trust that that is an oversight on the part of the Prime Minister because some provision must be made before this house prorogues to take care of the unemployed this winter. In my opinion this budget will not reduce unemployment. The only hope held out in this regard is that the tariff increases will bring about the establishment of more factories in Canada which will give employment to our people. What is the use of building more factories if we cannot buy back from the factories which we now have the goods which they can produce? What is the use of building more factories unless the people of Canada have money in their pockets, or credit in the bank wherewith they can buy the products of those factories? A lot of empty factories established through-out Canada will not do us any good.
If we are to continue under the capitalistic system it is absolutely necessary that we have some reform in our monetary system, and any budget which does not promise some such reform at a time like this I can class only as a failure-a failure to recognize conditions which actually exist. The proper way to secure a balanced budget is to increase the trade of this country, and then the taxes already levied will bring in sufficient revenue to balance the budget. Let me quote the Right Hon. Reginald McKenna, a prominent banker of London and a former Chancellor of the Exchequer. In referring to this question, he said:
Someone else may urge you to reduce the amount of money and bring down prices to the pre-war level or to such other arbitrary level as he happens to think the right one. Yes,

The Budget-Mr. Coote
and trade will remain depressed and the unemployed will be with you all the time. Moreover the burden of the national debt with the higher value of money will become intolerable, and no chancellor of the exchequer will be able to balance his budget.
There you 'have the case iput in a nutshell, and Mr. Reginald McKenna should be regarded as an authority on this question because of his experience as Chancellor of the Exchequer.
It is unfair to the people to increase taxation at this time, particularly to increase the sales tax. I cannot think of any words which Your Honour would regard as being parliamentary which would permit my expressing my opinion of the changes which have been made in the income tax in order to relieve some of those paying on large incomes. We will have to leave that matter until the bill itself comes down, but the change in the income tax and the increase in the sales tax bring to my mind a verse in the scriptures reading as follows:
For whosoever hath, to him shall be given; and whosoever hath not, from him shall be taken even that which he seemeth to have.
The cause of the present depression is the low price level of commodities, and particularly of the products of the farm. In an article appearing in the Sherbrooke Record of February 28, Mr. R. S. White, an hon. member of this house, writes as follows:
The aggregate value of all field crops produced in Canada in 1930 was $631,593,000 as compared with $948,981,000 in 1929, and $1,125,003,000 in 1928. That represents a tremendous shrinkage in the income of our farmers from- field crops, almost $500,000,000 in two years.
Is it any wonder trade and industry have declined in face of this immense reduction in farmers' income?
During -the last twelve months the prices of western grains have fallen 60 per cent; the prices of prime steers, 40 per cent and the prices of select hogs, 43 per cent. No other industry could stand such a cut in the prices of their products and the only reason why the farmer is carrying on to-day is because he is working without wages. The farmer is particularly hard hit because he sells at wholesale prices and buys at retail. The Bank of Nova Scotia, in their letter of March 31, state that since September, 1929, -the index of prices of Canadian farm products has fallen 46 per cent and of manufactured goods, 15J per cent while the index of retail prices has fallen only eight per cent. In other words, retail prices have fallen half as fast as wholesale prices, and only one-quarter as fast as -the price of farm products. Is it any wonder the farmer is not able to buy the products of our manufacturers?
The farmer suffers from still another handicap; he buys at Canadian prices, which are protected or inflated, and he sells at the prices prevailing on the open markets of the world.
I quote Mr. J. C. Armer, vice president of the Dominion Forge & Stamping Company, in support of my statement that Canadian prices are inflated, as follows:
Canadians pay more for their automobiles . than Americans pay for theirs. Canadians also pay more for all other manufactured articles than the selling price in some other parts of the world. They do this because it is the only way in which to build up a well-balanced nation which can provide work for all classes. Few people in Canada, however, realize that this price differential in motor cars is less than in most other manufactured articles.
I would direct the attention of the house to that last sentence. It is no wonder that the farmers of western Canada who have produced all these billions of new wealth which the Prime Minister talks about are now in their present condition. A five-cent bonus on the freight rate on wheat has been promised, and I suppose this is one of the compensating adjustments which the Prime Minister mentioned during the last campaign. This is the sugar coating on the protective tariff pill which the farmer must swallow. The coating is very thin but I suppose if the farmer has to swallow this pill it is just as well to have a little sugar coating. I regret the coating is not a little thicker; five cents per bushel is pretty small but I am glad that even that much has been granted. It looks as though the Prime Minister is having a little change of heart.
Over-production is blamed by the majority of people for the present depression, but I intend to try to make it plain that overproduction is not the cause of the present low price ievel. The Right Hon. Arthur Meighen said recently that he doubted whether there would be any over-production if the people could exchange their surplus products, one with the other. I think I am correctly interpreting his remarks. He also said:
The standard of living has increased and will continue to increase in proportion to the increased production provided the world's monetary system is such as to enable the exchange of those goods to be effective.
Mr. Meighen has put his finger on the weak spot in our economic system, that is the medium of exchange. Money was invented as the medium of exchange and let us consider that money includes the amount of bank credit which is in existence. We must look for the remedy in the whole monetary system. Professor Warren of Cornell university says:
The Budget-Mr. Coote

Prices are a ratio of the value of gold to the value of another commodity.
To assume that all commodities are overproduced and only gold is stable is like bringing the mountain to Mohammed.
But the majority of people in this and other countries appear to think the mountain should be brought to Mohammed. May I now quote Lord D'Abernon, a prominent banker in England who has often been quoted of late. In an address which he gave to the Royal Empire Society in London, England, recently, he said:
What had really occurred-without deliberate intention-was a hold-up in currency-
When anyone holds up a bank and we catch him, we put him into the penitentiary for a while, but the bankers hold up the entire country and nothing is done about it.

The falling currency has, it is true, brought apparent prosperity to German industry by means of a premium on exports,-
I want to emphasize these last words:
-which at the same time cripples the industries of competing countries.
Our wheat industry in Canada is being crippled by the competition of the Argentine and Australia because they have this 30 per cent advantage over us. What are we going to do about it? With a government pledged to protect the interests of the farmer I think that they should give us some depreciation to put us on an equal footing with our competitors and give us at least a fair chance. The only logical thing to do is to adopt the same measures which Australia and the Argentine have adopted and abandon the gold standard and allow our currency to depreciate. If any hon. members think I am exaggerating the beneficial effects of a depreciated currency, I would refer them to the speech of the hon. Minister of Trade and Commerce, to which I have just referred, in June, 1922. I would quote further from it if I had time, but this forty-minute rule, as a friend of mine says, certainly cramps one's style.
I have here a report of the tariff committee of the Canadian Manufacturers' Association, made in 1926. Four pages of it are devoted to this question of depreciated currencies showing how depreciation of the currencies of some European countries enabled them to undersell their competitors. May I quote just two sentences from that report? It says:
The depreciation in value of Belgian currency has resulted in large foreign markets being opened up for Belgian goods.
May I change the word "Belgian" to "Canadian", to show what would happen if we had our currency depreciated. It would then read thus:
The depreciation in value of Canadian currency has resulted in large foreign markets being opened up for Canadian goods.
I would like to make one further quotation from that report:
The Belgian manufacturer, favoured by the higher internal purchasing power of the franc, is enabled, owing to his lower cost of production, successfully to compete w'ith the British manufacturer.
I would like to change the word "Belgian" to "Canadian" and read it thus:
The Canadian manufacturer, favoured by the higher internal purchasing power of the dollar, is enabled, owing to his lower cost of production, successfully to compete with the British manufacturer.
I am absolutely convinced, Mr. Speaker, that if the present government had abandoned

the gold standard last September and had allowed our dollar to depreciate to the extent to which Australian and Argentine currencies had depreciated, it would have done more for t'he Canadian manufacturers than all the tariff increases introduced last September together with those contained in the present budget. There is absolutely no doubt about it.
Coming back to the farmers, I want to say that they are in an impossible position. Those who have money, and there are a few of them with a little money left, are producing at a loss. They are using up the capital they have built up over a long period of years, and it will be only a few years before they will be in the same position as those who are now bankrupt. What a shame that Canada should allow our farmers to get into that position! We have the most drastic legislation on the statute books of Canada, passed last September, to prevent the dumping of any goods into this country, and yet every bushel of wheat that we produce is being sold at dump prices whether it is sold in this country or elsewhere. What is being done about it? Canada has a very large export trade, and general business conditions are dependent on the prioe that we get for our exports. A depreciation of 20 per cent in our currency would increase the price of wheat 15 cents a bushel. I made that statement in a speech I made in the house some time agio, and in reading Hansard I noticed that the Prime Minister interjected, although I did not hear him at the time, "Surely the hon. member does not mean that." If I had heard him make that statement, I most certainly would have told him thalt I did mean it, and the statement is easily proved. When the price of wheat in Montreal is over 70 cents a bushel, if you allow the currency to depreciate 20 per cent, that will add 15 cents a bushel to the price of wheat; and if you allow the currency to depreciate by 30 per cent, as it has done in the Argentine, it will add 20 cents a bushel to the price of wheat, and that would enable our farmers to carry on, for 20 cents may be the difference between producing at a profit or at a loss.
The pulp and paper industry also needs help very badly. A depreciation in our currency of 30 per cent would put that industry back on its feet and would enable some of the companies .engaged in it to pay the interest on their bonds. It would increase the price not only of wheat but of all other grains, and of cattle and other farm products. It would increase the price of lumber, nickel, copper, zinc and coal. It would do more, in fact, to increase the returns to the coal indus-

The Budget-Mr. Coote
try, and would better enable the Canadian coal industry to secure the central Canada market than all the money the government proposes to spend under this proposed new fuel policy. I am not objecting to that fuel policy at all. I am glad to see that the government have at last brought down a fuel policy. I am sorry that I have not time to deal with that subject to-day. By depreciating our currency the price of all our exports would be increased just to the extent of whatever depreciation took place. It would probably mean a difference to us of anywhere between $250,000,000 and $300,000,000 per annum. This increased amount of money put into circulation would do more to stimulate business in Canada and create employment than any other thing which this government could do right at the moment. It would restore some of the confidence which is now so sadly lacking. If the currency did not depreciate fast enough, and some people tell me that it would not, we could easily arrange that by a little inflation. There are a lot of people who think that if you label anything as inflation you have at once discredited it. Unfortunately there is that impression, but in that connection let me read what Professor Soddy of England has to say in regard to it:
Whereas no changes of revenue, so long as the currency remains constant, affect the relative proportion of the whole revenue secured by the creditors, any increase of currency diminishes their relative share and hence is known as inflation, while any decrease increases their relative share, and hence is called sound finance.
We certainly have the sound finance just now, but it is very disadvantageous to our people. A little measure of inflation would easily be justified. Professor Day, of McGill university, in a speech reported in the Montreal Gazette of February 28 last, says, although to be fair to Professor Day I must add that he did not suggest the abandonment of the gold standard:
A reasonable general inflation might easily be justified now as merely correcting the excessive deflation of values which is giving us so much trouble.
Mr. Neill, in his statement to the annual meeting of the Royal Bank expressed somewhat the same opinion. Speaking of the restoration of the previous stabilized price level, he says:
To accomplish this, money must again flow freely through the financial arteries of the world.
We cannot regulate this matter for the world, but we could arrange that money should flow more freely through the financial arteries of Canada. This can only be done
if we suspend redemption of our notes in gold. Under the present system we can put more money out, but it will not stay out. It will come back for gold. It might be advisable to stabilize the dollar at 70 or 75 cents. I am not going to say just where the dollar should be stabilized. If it is to be stabilized the main factor to be used in determining the point at which this should be done would be the cost of living in Canada. To allay the fears of those people who think the cost of living would increase in proportion to the depreciation which would take place may I quote the words of Professor Plumptre:
If we raised the price of gold one-fifth, and the exchange is moved against us to that extent, all our imports would cost us that much more. The cost of living would be raised slightly (Not more, probably than 3 to 4 per cent since the cost of imports at wholesale constitutes but a small proportion of the cost of living). This arbitrary raising of the cost of living, might, in more normal times, have been called an injustice, but after the year 1930, in which wholesale prices have fallen about 20 per cent and retail about 8 per cent, a plan which attempts to restore them towards their 1929 level can hardly be called unjust. It might be called inflation, but the proper term would be anti-deflation.
Mr. Speaker, I am sure no harm will be done to anybody if the cost of living does not rise beyond the point it reached in 1926. According to the words of Professor Plumptre, we could have a depreciation of 30 per cent without reaching the 1926 level. Some people who object to the suspension of the gold standard say that if we abandon it we can never get back to it again. Those people remind me of the old lady who watched the operation of Stephenson's steam engine. She watched the locomotive get up steam and volunteered the remark "that thing will never run." However it did run, and she said, throwing up her hands in terror, "My God, it will never stop!"
We abandoned the gold standard in 1914 and our dollar came back to par in 1923. We went back to the gold standard in 1926. I wonder why we fear abandonment at the present time? When lately a banker expressed this fear to me I said, " There has not been a time since confederation when the bankers could not get the government to do anything they wanted. Why do they fear that in the period ahead of us, in the days that are to come they will not be able to go to the government, when the proper time comes and say that the time has arrived to return to the gold standard?" I know probably some of the bankers would object, but that is no reason why we should not carry out the suspension.
The Budget-Mr. Coote

At this time I wish to quote the remarks of Professor Soddy:
Institute a complete organization for ascertaining, on every public proposal, the feeling of the city, and the views of the captains of finance and banking, but act in precisely the opposite direction. From the point of view of the welfare of the community rather than of its creditors, you could hardly fail to be right every time.
I think there is a great deal of truth in that paragraph. There are just one or two other points I wish to emphasize before my time has elapsed. One point I wish to 'bring to the attention of hon. members is that lower price levels increase debt. Surely the fact is apparent to anyone that if the prices of commodities produced in Canada are reduced a larger share of such commodities is required to pay interest and to pay debt. The debts of producers are stated in terms of dollars. When the producer has to pay more of his products for interest bills and for instalments on the principal of his debt he has that much less money left to purchase the product of the factories in Canada. That is one of the reasons we have so much unemployment today. The bonded debt 'of Canada including dominion, provinces and municipalities is approximately four and a quarter billion dollars, not taking into account the debt of the Canadian National Railways. There are no figures available as to the amount of private debts, but it is safe to assume that they are greater than the public debts. I heard a man estimate recently that the total debts in Canada would certainly be in excess of ten billion dollars, or at least one thousand dollars per capita for our total population, including men, women and children. The burden on our people of that debt is so tremendous that we cannot afford to allow it to be increased. The interest on such debts can be paid only out of production. Sir Thomas White is reported to have said that if Canada's war debt were ever to be repaid it would be from the top six inches of 'Canada's soil. Our present monetary policy is making production impossible. The debts of the western farmer have been doubled iby the low price level of farm products. Pretty soon he will be unable to produce. When he finds himself in that position I wonder how the interest on our debts will 'be paid. The same is true of our pulp and paper industry. If the debts of that industry are to be repaid the price of the commodity that industry is producing must be raised.
At this time, Mr. Speaker, I have come to a statement which I hesitate to make. I feel compelled to say however that unless some action is taken to improve prices of staple

farm products and other commodities, we are faced with business stagnation and human suffering beyond my power to describe. The prospects are that hundreds of schools will have to be closed and thousands of farmers will be forced into bankruptcy. School and municipal debentures will have to be defaulted; millions of dollars invested bv loan, trust and life insurance companies in farm mortgages and millions of dollars of bank loans will have to be written off. Our whole financial structure is endangered. Thousands of people of moderate means living on rents and interests will find their incomes wiped out and thousands of our people will be thrown out of employment, thousands of lives will be sacrificed. What for? Aparently all this havoc is to be wrought merely to maintain the gold standard. I think the statement made by the late William Jennings Bryan, that the people are being crucified on a cross of gold is certainly coming true to-day. Why should we be afraid to consider depreciation? Why should we be afraid to abandon the gold standard? We did it in 1914, and the situation with which we are now confronted is just as serious as the situation which confronted parliament at ithat time. Why can we not suspend our gold standard at this time?
I admit-and with these words I will close my remarks-that this depreciation would not be a solution for all the economic problems facing us now. Beyond a doubt however such depreciation would increase the purchasing power of those engaged in agriculture, in our forests, in our mines and fisheries, and' enable them to buy more shoes, clothes, furniture, automobiles, radios and other products of our manufacturing industries. This depreciation would do more to increase employment in the industries I have mentioned than all the changes this budget will make in the tariff. It will d'o more than anything, else to solve the problem facing the Canadian National Railways. It will enable the Minister of Finance to balance the budget without the drastic increase in taxation which he now proposes. In the meantime we should endeavour to arrange a conference of world powers to discuss the proposal of Mr. Darling to monetize silver. We should adopt the suggestion of the bon. member for Red Deer (Mr. Speakman) to establish in Canada a bureau of economic research. We should procure the best brains available in Canada and charge them with the task of suggesting an economic system which will enable us to distribute among our own people, not only all the food, clothing and shelter they need but also some of the modern conveniences which we can produce so well.

The Budget-Mr. Hackett
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, in the short time at my disposal I wish to discuss only one topic, that of the growing debt of the Canadian National Rail" ways. First I shall speak of the period which has elapsed since the beginning of 1923. Since that time the funded debt of the Canadian National Railways has been increased by $433,010,171 and the unfunded debt by 88,993,000, making a total of $442,003,171. There has been advanced to the Canadian National Railways in the same period, in cash and by appropriation, the sum of $101,056,396.15, making a total of $543,059,567.96. During the same period the funded debt to the public has increased from $823,099,056 to $1,238,565,862. and the interest owing and annually paid to the public on this funded debt has increased from $34,652,324.38 during 1922 to slightly over $54,000,000 in the current year. I would warn those who take the trouble to check my figures to beware of the hiatus of three months between the close of the railway year, which ends with the calendar year, and the close of the departmental year, which ends on the 31st March. The figures I have given are for the period ending March 31 last.
So much for the period from 1923 to 1931. There is another period beginning in 1909 and another item of $604,406,239.42 which was the subject of some discussion between the right hon. Prime Minister (Mr. Bennett) and the hon. member for Shelburne-Yarmouth (Mr. Ralston), who replied to the budget speech. I find that the item was paid in its entirety to the constituent companies of the Canadian National Railways, and to the Canadian National Railways, between the years 1909 and 1923. After consolidation of these constituent companies in 1923 the Canadian National received $57,482,652 of this amount. It is well to recall that these figures refer exclusively to the Canadian National Railways and the companies which constitute it, exclusive of what we call government lines, which include the old Intercolonial railway, the line in Prince Edward Island, the National transcontinental and the Hudson Bay railway. This amount of $604,406,239.42, less about $156,329,236, was paid to the constituent lines which go to make up the Canadian National Railways, after 1919. Why interest should not be paid on these amounts; why they should be called bookkeeping entries and consequently not debts payable is a matter concerning which I will require additional information. At the moment I cannot see why these amounts should be treated otherwise than as money loaned upon which interest should be paid.
Now let us turn for a moment to the report of the Canadian National Railway System for
the year 1930. We find that its liabilities amount to $2,919,000,000. At this point I should like to ask why such an unusual and misleading system of accountancy has been adopted in this report. The liabilities amount to $2,919,000,000; the deficit amounts to $575000,000, yet the total given at the bottom of the column on page 15 is $2,344,000,000. If the ordinary rules of accountancy were observed we would have a total of $2,919,000,000 on the side of the liabilities and a red ink entry on the side of the assets showing a deficiency of $575,000,000, I point this out, Mr. Speaker, because I think it imperative that the people of this country should foe afforded every facility to know more accurately than they do know the exact situation of this, vast transportation system which we are attempting to administer and which has made such terrible drains upon our resources.
In going over these liabilities we find that the railway company has been called upon to pay interest, or has paid interest, only on one item going to make up the total $2,919,000,000. It has paid interest on the funded debt owing to the public, which amounts to $1,168,000.000. It has charged itself with but has not paid $32,067,462.53 interest on the loans from the Dominion of Canada, amounting to $604,000,000. On the balance of over a billion dollars owing to the dominion it has paid no interest and has not charged itself with any. Therefore I submit that the argument in favour of eliminating from the computation the ordinary interest charges upon the $604,000,000 is without cogency or point. Despite the fact that we have put into this system some $543,000,000 of new capital, it has gone on accumulating deficits from year to year. In round figures those deficits were:
1923		 $51,697,000
1924		 54,860.000
1925		 41,444.000
1926		 29,894,000
1927		 37,636.000
1928		 33,350,000
1929		 40,933.000
1930		 61,287,000
With regard to the years 1928 and 1929 I have not stated the full deficit, because I have been unable to find the deficit on eastern lines, although I know it is substantial. During those eight years this system has accumulated deficits amounting to $351,000,000, an average of $43,888,162 per annum. If one were to comply with the suggestion made, that the interest on $604,000,000 be entirely eliminated, we should then have a total deficit over these eight years of more than $100,000,000, or an average deficit or more than $12,000,000 per annum. I think such a result is worthy of the thoughtful consideration of
The Budget-Mr. Hackett

the people at large and of the careful scrutiny of the house in particular. I told the house, when I spoke briefly on this subject a few weeks ago, that I considered the peril to our financial fabric, to our national credit and even to our solvency was both real and imminent as a result of the ownership of this system.


Mr. HEAPS:: What would the hon. gentleman suggest?


Mr. HACKETT:: If the hon. gentleman
will restrain himself for a few moments I shall endeavour to answer that query. I am opposed to the public ownership of these lines. I am opposed to it because in my opinion it is not the function of government to engage in competitive commerce. It is the function of government to encourage commerce; it is the function of government to direct and develop commerce and at times, if it tends to be unruly or predatory, to restrict commerce. But I am opposed-


Mr. CAMPBELL:: I wish to remind the
hon. member that it was the failure of private ownership that left these roads at our doorstep.


John Thomas Hackett: I am grateful to the
hon. member for the suggestion, because it affords me an opportunity to tell him that private ownership, of which he complains, has done more for Canada's credit and for the people of Canada than any system, of which this one under discussion may be the prototype, can ever do for the country. And if the hon. gentleman-I am sorry he has found it necessary to leave the chamber-will take the annual report of the Canadian Pacific Railway for last year, he will find that this road, which I daresay he would style a predatory institution, after paying 10 per cent, dividends and all its fixed charges, paid out but $4,000,000 more than the interest which the Canadian National pays annually on its funded debt to the public of Canada, overlooking entirely the $604,000,000, on which it pays nothing, and the other thousand million which it did not take into consideration at all.
I would tell the hon. gentleman that public ownership is incapable of bringing to the administration of business that prudence and skill which private ownership can furnish. And I would furthermore tell him, if he wishes to carry the point a step further, that so long as governments are what they are it is absolutely impossible to obtain efficient administration under government control, cloaked thinly as it may be by independent or so-called independent administration. If the hon. gentleman doubts me, I would ask him to

read any page of the history of Canada which refers to the railways. I would ask him to go back to the year 1903, when the government began to dabble in rather a big way in railways. I admit candidly that Canada has built railways for .reasons other than profit. It built the Intercolonial to fulfil a pledge; the Canadian Pacific Railway was built to fulfil another pledge. And it may be necessary to help these roads from time to time to overcome geographical difficulties and satisfy political exigencies. In the early years of this century, we had one privately-owned transcontinental road which was moderately prosperous and moderately efficient and which was satisfying the needs and requirements of our people. What happened? Mackenzie and Mann began to build roads on the prairies, and about 1903 they sought an o-utlet toward the Pacific and another toward the Atlantic. It was then that the Grand Trunk, becoming jealous, wished to construct a transcontinental road of its own. It was then that the Dominion government, headed by Sir Wilfrid Laurier, decided that the government would finance a transcontinental railway and would have a great deal to say with regard to its construction and something to say with regard to its administration and operation. I should like to tell the hon. gentleman who interrupted me, were he here, just how far we went astray, how far the parliament of Canada went astray, and how far that eloquent chieftain of the Liberal party was able to lead the people astray, when he engaged it in public ownership. I say, without disrespect to the memory of that great man, that if there be one blot upon his reputation as a man of affairs and a man of prescience, that blot lies in the fact that he engulfed this country in the abyss of public ownership of railways.
I turn back to the days of 1903 and I ask you to listen to the utterances of Sir Wilfrid Laurier with regard to the construction of this railway. When it was contended by the then Hon. Mr. Borden that it was not the time to construct another Transcontinental system, that the need was not imperative and that there was no necessity for it, Sir Wilfrid said, urging immediate construction:
. Such is our duty; it is immediate and imperative. It is not of to-morrow, but of this day, of this hour, and of this minute. Heaven grant that it be not already too late.
That was what Sir Wilfrid Laurier said in 1903. I will tell the house what he said about the cost of constructing the road. Hon. members will recall that the government of which Sir Wilfrid Laurier was leader undertook to build the National Transcontinental

The Budget-Mr. Hackett
from Winnipeg to Moncton and to pay the carrying charges on it until the Grand Trunk Pacific, which had undertaken to construct a road from Winnipeg to the Pacific with bonds guaranteed by the Canadian government- which it has since paid-was ready to operate both. The house will recall that Sir Wilfrid told the country and parliament that there would be practically no expense in connection with it. I would ask the house to take note of the words of Sir Wilfrid Laurier, which appear at page 7676 of Hansard of 1903, as follows:
Therefore, let our friends on the other side of the house, and let our friends on this side of the house also, take note of this fact, that with the exception of a few years of interest, to which 1 shall allude later on. we shall have this portion of the railway built by the government from Moncton to Winnipeg without the cost of one dollar to the Canadian people."
And again at page 7690:
Now, sir, what is the liability incurred by the government for the construction of this road from Winnipeg to the Pacific ocean?
And again:
-and the total interest for three years will be $3,780,000. This is the whole of the liability which is incurred by the government for the construction of the railway from Winnipeg to the Pacific ocean.
And then on page 7691:
The sum total of the money to be paid by the government for the construction of that line of railway from Moncton to the Pacific ocean will be in the neighbourhood of $12,000,000 or $13,000,000, and not a cent more. Now, sir, what is $13,000,000 in the year 1903?
In reply to tihe lion, gentleman who asked me what I thought of government ownership, I will say that the thirteen millions in the year of grace 1903 have rolled up until they represent the larger portion of a thousand millions of dollars to-day. It is largely be-oause the government of 1903, in the face of all the hazards, the difficulties and the perils which surround undertakings of this kind, made its noble experiment in public ownership, that the people of this country are labouring to-day under the heavy burden which was placed upon them by an administration of that time.
All of this may be somewhat irrelevant, because we have government ownership, we have got the Canadian National, or possibly it might be more accurate to say that the Canadian National has got us. All of which reminds me of an episode which occurred recently; two of the principals were known to me. These gentlemen were fishing on one of the lakes which stud the eastern townships. One of them espied something crossing the lake which investigation disclosed to be a
bear. The anchor rOpe was used as a lasso and the bear was caught. To the amazement of my friends the bear not only swam toward the boat but nearly upset it as he clambered in. One of the party said, "Now that we have got him, what are we going to do with him?" The other replied, "Now we have got him, what is he going to do with us?" This turned out to be a very pertinent remark, as the sequel shewed: bruin manned the ship and the fishermen sought sanctuary in the icy waters of the lake. I do not wish to push the analogy further.
I will now attempt to answer the question put to me by the hon. member for North Winnipeg (Mr. Heaps) when he asked: What are we going to do with this system? I take it for granted that this country is incapable of bearing up under a burden of from $40,000,000 to $50,000,000 of deficits each year; I take it that this house is unanimous in the decision that such a condition cannot be allowed to continue. If it cannot go on, what are we to do?
At this point let me pause long enough to say that a by-product of this administration of the railways by the government has been the undoing or near undoing of another national institution. The Canadian Pacific Railway is an institution in which the people of this country and of other countries have invested large sums of money. It is a system of transportation which is known all over the world, not only on this continent but on the seven seas. Parliament has so conducted itself towards the administration of the Canadian National that it has placed a price on the head of the Canadian Pacific Railway; it has placed a bonus on the bankruptcy of that company and the day will come and come rapidly, unless something is done to curtail the rivalry between these two roads -parliament can curtail it because it is parliament which supplies the funds-when we will see the Canadian Pacific beaten to its knees. That company already has cut its dividends and the wages paid to its workers; its officers and men are now working three days a month without remuneration. If it passes its dividend entirely and becomes bankrupt it will then behoove this country to take it over and the government will then have a monopoly of transportation. If the government bring to bear upon that monopoly all the skill and wisdom which has characterized its administration of our national railways, we may then have a Pretorian guard but no emperor.
In reply to the question, "What are we going to do?" asked by the hon. member for North Winnipeg, I reply that we must
The Budget-Mr. Hackett

eliminate this annual deficit. The suggestion of writing off the liabilities is childish. It is no remedy. That was the method adopted by our friend of other days when bluebooks did not exist. Mr. Harold Skimpole refused to learn how to count so he would never know how much he owed. Thus he was always at peace with himself if not with his creditors. One way of making this system pay or making it cease to be a drain upon our resources is by raising the tolls. I can imagine how popular that action would be, especially in the land slightly beyond that represented by .my hon. friend from Winnipeg. Nevertheless, be it said that the freight rates in this country are from 10 to 15 per cent lower than they are anywhere else in the world, and also let it be said that the only portion of our railway system which .pays is that portion which lies in the United States where they have an adequate rate.
Another way is to reduce the wages and salaries of the men who operate the road. I know full well that that would create a terrible outcry. These wages and working rules were fixed by Mr. McAdoo some years ago when he was seeking a presidential nomination in the United States, and they have made a heavy demand ever since upon the earnings of all railway systems. Were wages decreased I know that many hon. members who sit in this house would disappear, that might not be the greatest calamity. Possibly I would be of the number as my constituency is traversed iby no less than three railway lines, and I am sure that the railway men do not desire that their wages and salaries be diminished. But the extent by which we shall have to raise tolls or diminish salaries and wages depends upon the extent to which we are able to make savings elsewhere. There are opportunities and methods which are apparent to all of effecting substantial saving alsewhere.
In the first place we are told that passenger traffic does not pay, yet we find the most lavish and competitive passenger traffic in the world operated by the Canadian National system. We are told in their magazine, which they publish monthly, that the finest, fastest, most luxurious and best equiped train in the world operates between Montreal, Toronto, Detroit and Chicago. We know there pull out of Ottawa many luxurious and fast trains each day for Toronto and Montreal. We know that ancillary to this passenger service there has been established on the Pacific coast a boat line-and heaven forbid at this junction that I make any reference to our merchant marine other than as an incident 
to the folly which I am now discussing. It has lost to Canada almost as much money in comparison with its size, age and opportunity as the Canadian National itself. We have on the Pacific a boat line which is losing money every trip that is made. We have put nearly 120,000,000 into hotels. I do not happen to come from Halifax, but I make bold to say that Halifax has about as much need for a Canadian National hotel as any small village in any constituency which is represented here might have for an hotel of equal cost. We also know a hotel was built in Charlottetown. We know that in Saskatoon they are spending $4,000,000 on a hotel. We know that a hotel is operated in Winnipeg. We know they are building a hotel in Vancouver, and the Canadian National magazine devotes pages to a description of it.


An hon. MEMBER:: What about the
Canadian Pacific?


John Thomas Hackett: The great difference between the Canadian National and the Canadian Pacific is that the Canadian Pacific hotels have paid and the Canadian National hotels have never paid and cannot pay. In the hotel here in Ottawa there has been installed a swimming pool which has cost from half a million to a million dollars. What possible return is there on it? The Canadian Pacific has its hotel at Banff and we have dropped' our millions into Jasper, for what purpose? We are told that the passenger service cannot pay; that it does not pay on any railway, and yet we are spending these vast sums without purpose or point or possibility of return. I read in this morning's paper that the' telephone system on the train running between Montreal and Toronto cost $83,333.21 last year and yielded monthly but $73.43. We have radios on all these trains. These things are insignificant in themselves but they point to a lavishness, a desire to spend on the part of the management which bodes ill for economy I pass to another opportunity to save after we have eliminated some of these luxuries. In Montreal we find at the present timd this longing to be lavish, to expand and to spend, seeking its final expression. I do not deny that the quarters into which the Canadian National now runs are entirely unseemly and unbecoming; I admit that better quarters should be provided, but what is required in Montreal is a union station. If the Canadian National station and the Canadian Pacific station were separated by ten miles, the solution would be very obvious and easy;.

Private Bills
everybody would see what was required and everybody would know what to do. But because they are but three or four hundred feet apart, we are told it is absolutely impossible to bring them together. It behooves parliament to see that a union station is built. Parliament is providing the money. A separate Canadian National station will bring in its wake a Canadian Pacific station, because the Canadian Pacific must follow suit or admit it is worsted, and not a penny's return will result from either venture! It is largely within the control of parliament to determine whether or not this great source of waste shall continue.
I now pass on to another source of waste, and that is the terminals that are being constructed in Montreal. We have heard a great deal about the Palmer report. Let me turn to it and read to the house the final paragraph of the 45th section:
As a whole, the service would be excellent, but worked in two separate and competitive interests, many of the advantages of adequate distribution are vitiated.
We find there that a new and unnecessary line of elevated railway is to be built about Mount Royal from Longue Point to Eastern Junction when there already exists such a line. The Canadian National, in order to bridge a gap on the water front of a little over a mile, is now running out to l'Epiphanie and back, a distance of 109 miles. It wishes to construct a line nine miles in length, when, if it were given running rights over a portion of the Canadian Pacific, it could save 85,000,000, cut off five miles of the distance which it would have to run over the line which is projected, and thus avail itself of an excellent opportunity of saving money which is so sadly needed for other purposes.
We have babbled much in the house about Russia and her five-year plan. We have marvelled at the blind enthusiasm which has held this people in its grasp while it went forth to accomplish most difficult and painful tasks. We have marvelled at the forbearance and docility of that people and of that country. I would suggest, Mr. Speaker, that the blind and dumb docility of that people has found a perfect prototype in the docility and blindness of the Canadian people. Blindly we have followed the administration of this road, up not five, but nine years of vistaed hopes, and I for one refuse mutely to follow that administration further down into the vaulted gloom of financial dissolution. It is there that we are going unless some means can be found to stay this orgy of spending: and, Mr. Speaker, the danger is not all there. I do not wish to underestimate or understate the ability, energy and driving force of the man who, to use a colloquialism, has put the Canadian National on the map, but I do say that he has overshot the mark; he has gone too tar. The other night, speaking in the house, I ventured in terms courteous and with honesty of purpose to make some reference to the way in which this property is being administered. The next night in Winnipeg, the gentleman in question is reported to have made some reference to a certain long-eared animal that had so perfectly acquired the art of kicking that he became the author of his own undoing. In the press he is reported to have said, "Let those who attack us, hop to it." Mr. Speaker, if that was an invitation, it was entirely unnecessary. If it was a threat, it was entirely unworthy. That gentleman in charge of the administration of the Canadian National Railways-independent administration is a fiction as long as parliament supplies the funds; if we are honest we must admit it -is the servant of the people of Canada. He must accept orders from the parliament of Canada. If when criticized by parliament he resents that criticism in the tone in which he resented the honest and straight-forward criticism which was levelled at the company a few weeks ago, he has lost that sense of proportion necessary to a useful servant either of the road or of the country.


Mr. MACKENZIE (Vancouver):: Is this
official?


John Thomas Hackett: The hon. member for
Vancouver Centre (Mr. Mackenzie) will undoubtedly get his hotel.


Ian Alistair Mackenzie: Better
leave Vancouver alone.


John Thomas Hackett: I sincerely hope that
when it is erected it will be more profitable than any of the other hotels that have been erected along the line of the Canadian National.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS



EVANGELICAL LUTHERAN JOINT SYNOD OF OHIO

[Stage Direction]
On the order:
House in committee on Bill No. 52, to amend the Board of Management of the Canadian
Private Bills
[Stage Direction]
District of the Evangelical Lutheran Joint Synod of Ohio and other states, and to change its name to the "Board of Management of the Canadian District of the American Lutheran Church."-Mr. Gershaw.
Frederick William Gershaw: Mr. Speaker, under chapter 143 of the statutes of 1913, this board of management was incorporated. Its purpose was to represent in Canada the synod of Ohio and other states of the United States of America. The present bill provides for two things, first that the name of the board be changed, and second, that the headquarters be changed from Melville, Saskatchewan, to-


Hugh Guthrie: Is the house in committee? I point
out to hon. members that Mr. Speaker is in the chair.


Pierre Édouard Blondin: To discuss a bill on the
motion that the Speaker do leave the chair for the house to resolve into committee of the whole on private bills is not the usual practice. I take it that the hon. member moves, seconded by Mr. Young, thalt the house do resolve itself into committee of the whole.
Motion agreed to and the house went into committee, Mr. Stirling in the chair.
On section 1-Name changed.


Frederick William Gershaw: Before the house resolved itself into committee I had stated that the purpose of the hill is to change the name of the board to conform to the name of the parent body which it now represents. In 1930 the synods of Ohio, Buffalo and Iowa united to form one 9ynod, and the board in Canada will carry out the obligations of and have exactly the same relationship to the parent body in the United States as the old board had to the former body in that country. The relationship will be in no way changed. This board I may say deals only with the temporal affairs of the church and has nothing to do with its spiritual activities. Money is collected, chiefly in the United States, loaned out to congregations in Canada, and after the first four years a low rate of interest is charged. At the present time the secretary and officers arc located in Medicine Hat. The college which was situated in Melville, Saskatchewan, has been Closed. Therefore because of geographical considerations and to facilitate travelling there is a provision that the headquarters be changed.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.
fMr. Hackett.]

[Stage Direction]
Bill No. 54, for the relief of Agnes Sarah Evelyn Ballard McNaughlt.-Mr. Mackenzie (Assini'boia).
Bill No. 55, for the relief of Dorothy Helen Marie Debnam Aknon.-Mr. Jacobs.
Bill No. 55, for the relief of Rosa Maud Thomson Checkefcts.-Mr. Bell (St. Antoine).
Bill No. 57, for the relief of Mary Ellen Margaret Montague Burrows.-Mr. Lawson.
Bill No. 58, for the relief of Olive Hamley Fraser Mann.-Mr. Willis.
Bill No. 59, for the relief of Eleanor Fritz Lawson.-Mr. Bell (St. Antoine).
Bill No. 61, for the relief of Ellen Jane Easton Graham.-Mr. Bell (St. Antoine).
Bill No. 64, for the relief of Joseph Norman Berger.-Mr. Bell (Sit. Antoine).
Bill No. 66, for the relief of Joan Marguerite Loggie.-Mr. Geary.
Bill No. 67, for the relief of Alice Boyne Ostiguy.-Mr. Bell (St. Antoine).
Bill No. 69, for the relief of Eileen Sybil Wolfe.-Mr. Factor.
Bill No. 70, for the relief of Helen Borland Beattie MaoNicoI.-Mr. Bell (St. Antoine).
On division.

[Stage Direction]
Bill No. 68, for the relief of Ruth Rosenberg-Mr. Bell (St. Antoine).
On division.

[Stage Direction]
Mr. ANGUS MacINNIS (Vancouver South) moved the second reading of Bill No. 45, to amend the Canada Shipping Act.
Some hon. MEMBERS:: Explain.


Mr. MacINNIS:: When the Marine estimates were under consideration a few days ago, there came up some items which had a bearing on this bill. In that discussion it was pointed out that the existing shipping act was passed in the year 1854, that is to say, thirteen years prior to confederation. The act as passed ait that time and as it now stands on the statute books has remained pretty much the same except for a few minor amendments. I am advised that no amendments whatever have been passed since that time, affecting common seamen, and the amendments now proposed are intended to improve the conditions under which such seamen work and to bring those conditions more into harmony with modern requirements. In 1913 the Minister of Marine of that day, the Hon. Mr. Hazen, prepared various amendments to the act and submitted them to the interested parties, with a view to a complete revision

Canada Shipping Act
of our shipping law. Owing to .the outbreak of the war, however, in 1914, that revision was abandoned. In 1923, and again- in 1924, the Trades and1 Labour Congress of Canada adopted a resolution with reference to the act, submitting a number of amendments. They declared:
Whereas the Canada Shipping Act as at present constituted is obsolete so far as its application to conditions of the day is concerned, and contains many weak clauses which give the operators of steamship lines a chance to evade the real intention of the act-
And they go on to ask f-or various amendments. These amendments -have been urged at every convention of the congress from 1923 to the present time. The first amendment proposed is section 213A, which applies to the physical examination of seamen, and the section as we have it here is taken from the Merchant Shipping Act of Great Britain, which has been in effect there since 1894. The section which we propose is slightly different from the British act so far as the last two lines are concerned:
And if such report finds that the seaman is not in a fit state for duty at sea, he shall not be employed.
These two lines do not appear in the British Shipping Act of 1894. The next amendment proposed is section 213B, which refers to the inspection of provisions and water intended for the use of the crew of any Canadian sea-going ship. At present there is no inspection of food or water on our ships. Any three members of the crew of a ship may make complaint in reference to provisions or water and an inspector is appointed to inspect such provisions and water and report back to the port officer. If, however, the complaint of these members of the crew is not substantiated by the inspection and it is found that neither the food nor the water is of inferior quality, the crew are penalized by the imposition of a fine amounting to a week's wages. I think the committee will agree that this is rather drastic. This proposed section provides:
"213B. (1) All provisions and water intended for the use of the crew in any Canadian seagoing ship shall be inspected either on board the ship or before shipment, and if on such inspection the provisions or water are found to be in any respect deficient in quality, the ship shall be detained until the defects are remedied. Such inspection shall be made within the three days before the ship proceeds to sea, and another inspection shall be made if the inspecting officer has reason to suspect that any of the articles inspected have been subsequently removed, injured or destroyed.
Subsection 2 of this section 2-13B, reads:
(2) If the inspecting officer is of opinion that the articles inspected are deficient in 22110-150
quantity or quality, or are placed in improper receptacles, he shall give notice in writing to the shipping master of the port where the ship is lying, and also to the master, owner or consignee thereof, and the master of the ship, before proceeding to sea, shall produce to the shipping master a certificate under the hand of the inspector that the defaults found to exist have been remedied, and if such certificate is not produced, the ship shall be detained until it is produced.
Subsection 3 provides for a scale of provisions for the use of Canadian registered ships, in accordance with the first schedule to the Merchant Shipping Act of 1906. A few days ago I read the schedule and 1 need not go into that phase of the matter to-night.	*
I submit that these provisions are very reasonable and I do not think there can be any real objection to them. The next section which we propose refers to the working hours of seamen on all Canadian sea-going ships. We are asking that they shall not exceed eight hours a day except in cases of emergency. My information is that not only do ordinary seamen work more than eight hours a day but that they are working as a rule seven days a week and do not get a day off except when they are discharged. This refers to ordinary seamen, firemen, trimmers and so forth. The eight hour day is fairly well recognized now as the ordinary working day in all trades, and with the extent of unemployment in Canada to-day I do not think there is any reason why any man should be asked to work more than eight hours. As a matter of fact, we cannot provide eight hours of work a day for a great many people in the dominion at the present time.
Subsection (2) of section 213C, which refers to compensation for injuries, reads as follows:
The master or owner of every such ship for which an agreement with the crew is required under this act shall make provision for the payment of compensation to any member of the crew suffering an injury arising out of his employment, equal to that paid under the Workmen's Compensation Act in the province in which the ship is registered.
The reason for drafting that subsection in -that way is because a doubt exists that the Dominion government has power by statute to bring any industry wi'thin the provisions of the provincial compensation acts, and this amendment places the onus in regard to an injured seaman upon the owner or -master of a ship. Under the present Canada Shipping Act the owner's obligation to the seaman ends when the seaman is brought into port, and in many cases these men are left stranded without any provision being made for convalescence. The

Canada Shipping Act

substance of this subsection was discussed some few days ago under a resolution introduced by the hon. member for Kingston (Mr. Ross) and I understand that the Prime Minister (Mr. Bennett) agreed that this is possibly the best way to deal with the matter.
Subsection (1) of section 560 deals with a board of steamship inspection, and provides that a representative from the National Association of Marine Engineers shall be a member of this board. I think the principle has been fairly well established that in a matter of this kind where the employees are concerned, they should have representation.
Reverting again to the section dealing with compensation, I should like to refer to the manner in which the compensation act works in the province of British Columbia. Where a man is hired in a port in the province he is covered by the compensation aot, but should he be hired in a foreign port he does not receive these benefits. It is possible to have on the same ship members of the crew who are covered by the act and others who are not, and there is a tendency to discriminate in favour of seamen picked up at foreign ports, because in that case the owners would not be liable under the British Columbia compensation act for compensation in case of injury. The Canadian Pacific Railway Company have ships sailing from Vancouver to Australia, and the seaman taken on in Vancouver is covered by the aot but should a member of the crew be taken on in Australia he is not covered. That is a defect in the act which should be remedied.
The next section of the bill covers subsection (1) of section 935. When this bill was up for first reading the Prime Minister stated that possibly certain of the sections would be ultra vires of the dominion parlia-i ment. I believe this is the section to which he was referring, and I think ithe objection is well taken. I do not intend to say anything on this section or to press it, because I 'believe it to be ultra vires of this parliament.
The amendments asked for are quite simple, and unless there is some difficulty in administration I see no reason why they should nob pass at this time, regardless of the fact that the Minister of Marine (Mr. Duranleau) has stated that he contemplates a general revision) of the act in the near future. I do not know just how soon that revision will take place. It may be within a year or so, but in the meantime these amendments should be passed in order to give the working seamen the bene-i fits contained therein until such time as a complete revision of the act can take place.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I do not know that it is necessary to add a great deal to the very clear exposition of this bill which has been presented by my colleague from Vancouver (Mr. Maclnnis). It is quite obvious that legislation passed in 1854, as was the present Canada Shipping Act, is entirely obsolete. I believe the minister has admitted that, so it is not necessary to stress the point.
In the old.act there is a definition of coastal trade, but at the present time a trade has developed between the ports -of Montreal and Vancouver which is commonly known in shipping circles as intercoastal trade. So far as I can learn there is absolutely no definition in the act as to what intercoastal trade really means. Under the old act and in the old days there was a provision by which a seaman in case of discharge might be taken back to his home port, but there is no provision at the present time for that kind of repatriation in the case of this intercoastal trade. A man may ship at Montreal and be discharged at Vancouver and then have to find his way home as best he can. It is absolutely ridiculous that such should be the case, because Vancouver, as we all know, is farther away from Montreal than are many foreign ports; it just happens that both ports are in Canada. In a number of instances the city of Vancouver has forced the shipping companies to send men home overland. There should be a definite safeguard with regard to a matter of this kind.
When the original act was drawn up in 1854 there was still a good deal of despotism at sea. I recognize that there must be discipline on board a ship and that the captain must have powers which are not ordinarily granted to an employer on land, but at the same time very frequent complaints are made of the arbitrary action of certain sea captains. Some of the officers who have been brought up in the old sailing ships imagine they are still back in that dajr and have not changed their attitude towards their men.
I believe that some points not mentioned in this bill will have to be taken up in the near future. For example, there is the fining of men for delinquencies of various kinds. The penalties are often excessive and there is no easy method of appeal.
In many instances conditions on board ship are considerably better than is required by the laws as they now stand. Many captains are actuated by humane considerations and they see to it that their seamen are well looked after, but of course there are certain captains who do not care anything about

Canada Shipping Act
their men, and I suppose it is to such that the laws are designed primarily to apply. The men ought to have some safeguards other than they have at the present time.
With regard to hours, I know that on many ships there is a day off; Sunday as we all know is taken as a sort of sailor's holiday. He is allowed that time to himself to clean up, wash his .clothes and so on, so that there is often not the ordinary routine on that one day of the week. On the other hand, however, the hours for certain classes of seamen are still long. Officers, engineers and firemen work four hours on and eight hours off; sailors, except the wheelmen, work four hours on and four off, making a twelve-hour day. Why not, as I understand is the case in United States ships, have an eight hour day for sailors? Why not, as in British ships, have extra pay for overtime? Under our act there is no provision for that sort of thing. Again and again the British North America Act has been put forward as an excuse for nonaction on the part of the federal government. Clearly this is a case for action on the part of the federal government. Conditions at sea come directly under the purview of the federal government, and we ought to see to it that the eight-hour -day for sailors is adopted.
My colleague the hon. member for South Vancouver (Mr. Ma-olnnis) did not dwell upon section 935, which would prohibit coastal trade from ships not registered in Canada. It may be that, as he said, such a provision is ultra vires of parliament and we may have to wait for the passing of the statute of Westminster. But I would point out the abuses that exist under the act as it stands to-day. Several years ago I cited a case in which Chinese sailors were employed in the Besco ships bringing coal from Sydney to Montreal-ordinary coastal work. It was said that they were employed in bond, and at that time we made strong protest against that kind of traffic. The following year, for some reason best known to that company, the Besco ships were registered in England and operated by an English company. We were then told, when we brought up this question of Chinese sailors, that the dominion government could not do anything about the matter because the boats were not of Canadian registry. Obviously an abuse of that kind ought not to be allowed to continue, and I hope when the minister is making his changes after the statute of Westminster comes into effect, he will see to it that the coastal trade 2211C-lBOi
is carried on only by ships of Canadian registry.
Trob&bly these are the only points that need special emphasis at this time. I quite recognize the fact that the amendments which are offered in this bill do not go far enough; there are scores of amendments not provided for by the bill but which ought to be introduced; in fact, the whole act needs overhauling from stem to stern. You cannot do much with it; you cannot patch it up to make it really seaworthy. These are only some of the outstanding evils, provisions for the removal of which might keep the old ship afloat for another twelve months until the minister can see his way clear to bring about a thorough revision of the act.


Mr. D. J. COWAN (Port Anthur-Thunder Bay):: I have not had time to consider carefully all the amendments contained in the bill now before the house, which seeks to amend the Canada Shipping Aict. I desire, however, to discuss for a few minutes section 3 of the proposed bill, which seeks to amend section 935 of the original Canada Shipping Act. Perhaps it is because .this act was passed so many years ago that it does not now fulfil the requirements of operators and owners of Canadian shipping. It has been said that the whole act will be amended very shortly. I think it is wise at this time to state objections to the act as it exists at present, so that when the amendments are brought before the house, the government charged with the responsibility of amending the act will have these features in view.
Let me state a case which I think demands attention. Reports last week indicated that there were shipped out of the ports of Pbrt Arthur and Fort William 2,030,000 bushels of wheat for shipment down the St. Lawrence. This is Canadian wheat grown in Canada by Canadian farmers, and it may surprise hon. members to know that the total quantity of 2,000,000 bushels was shipped in United States bottoms. The other side of the picture is this, that in the ports of Port Arthur and Fort William there were standing idle that week fifteen Canadian bottoms with no cargoes. The space was there: the operators were willing to have their boats chartered, but all this wheat was shipped in United States bottoms. Such a situation ought not be tolerated.


Mr. YOUNG:: Why not?


Donald James Cowan: The matter
would be different if we did toot have the Canadian bottoms, but they were there, ready
Canada Shipping Act

for -cargoes. What happens is this: under our coastal laws we have not the same consideration as -the United States gives to their shipping interests. The United States law may be stated simply in these words:
No merchandise shall he transported by water under penalty of forfeiture thereof from one port of the United States to another port of the United States, either directly or via a foreign port, or for any part of the voyage, in any other vessel than a vessel of the United States.
Our shipping interests simply say: We desire to be put upon an equal footing with the shipping interests in the United States. Our law is such that a caigo of Canadian wheat may be shipped from the Canadian head of the lakes to Montreal in a United States boat provided that it first touches at the porit of Buffalo or any other United States port, is there unloaded into another United States boat and taken down the St. Lawrence river. I think I can say without fe-ar of contradiction that this is only a subterfuge whereby a United States boat can call at Port Arthur, take on a cargo of Canadian wheat, go to Buffalo and either unload it into an elevator or reload it into a canal-sized boat owned again by United States interests so tha-t i-t may be taken from Buffalo down to Montreal. Such a situation would not be tolerated so far as shipping of United States grain in Canadian bottoms from Duluth to Buffalo or other United States ports is concerned.
The law should also be amended in this regard: In the United States no foreigner may own any share in a boat if it is going to operate under their laws. In Canada such is not the case. At the present time, United States citizens can form a Canadian company and operate a boat or bring it in from the United States at a low valuation. This, I may say, has been done frequently. The Eastern Steamships Company, for instance, has established a head office at Port Colborne, where they keep a skeleton staff or the nucleus of an office, their real head office being in Buffalo. That is done simply to evade the Canadian regulations. I submit, Mr. Speaker, that our Canadian boat owners should be put on a parity with those of the United States. I suggest in all earnestness that this should be considered when the coastal laws are amended, and that such provision be made as well, make it not enough just to maintain a skeleton office in this country. The boats should be owned and operated by Canadian captains and Canadian seamen. I do not think at this stage I need labour the point, in view of the statement of the Prime Minister

a day or two ago that, when enabling legislation goes through, this country will have complete control of its shipping laws. I hope that at that time these [DOT] suggestions will be taken into consideration and the law amended accordingly.


Edward James Young: As a representative of the western grain growers I take exception to the suggestion of the hon. member for Port Arthur-Thunder Bay (Mr. Cowan) that our grain should be shipped only in Canadian-owned boats. We farmers of the west claim the right to ship our grain by the cheapest boat we can get. We must reduce expenses at every possible turn in order to compete on the world market. It is no argument to say that because the United States discriminates against her farmers and delivers them into the hands of her shipping interests, therefore we should do the same. This government has no right to say to the western farmer: You must ship your grain by a Canadian boat even though it charges you more than an American boat. We claim the right to ship by the cheapest boat, and we will stand by that position.


Mr. A. E. ROSS (Kingston City):: That
argument -would be all right if my hon. friend allowed it to apply in the case of the elevators, instead of saying to the elevators: You will ship the grain just as we tell you.


Edward James Young: Would the hon. gentleman explain just what he means?


Arthur Edward Ross: If my hon. friend d-oes not understand what I -mean, I have not time to explain now. I want to say a word on our coastal laws. The trouble is that when the federal government-, in order to meet the situation to which the hon. member for Weyburn (Mr. Young) thas referred, abrogated our coastal laws so that Americans -could in times of stress come in and take Canadian grain, American shipowners deliberately violated the privilege granted the-m, and instead of simply bringing the grain down and storing in a Canadian port as they were -privileged to do, they unloaded it at a Canadian port and immediately returned to the head of ithe lakes for another cargo, in contravention of the conditions under which the -coastal laws were suspended. The result was that- our Canadian seamen sat idle last fall and the fall before, when the abrogation was made, with only g-ood intentions on the part -of the Canadian government. We repeatedly called the attention of the government to the situation, even giving the names of the American ships violating the law, but no action was taken. I trust, therefore, that this year the minister in charge of

The Budget-Mr. Beaubien
this department, a member on this side of the house, will 'be more careful of the interests of Canadian seamen than were hon. members opposite in the past.
Just in passing I would point out that whenever one does plead the cause of a Canadian workman my hon. friend from Weytourn is about the first man to get up on his feet and knock the proposal. If the Canada Shipping Act cannot now be revised, at the latest there should be a full revision nest year, including the amendments proposed here. There is not one interest on the Canadian side but is anxious for such a revision, and pending that revision I trust that the minister will see that the abrogation of the present coastal law shall be strictly observed and not violated as it has been in the past against the interests of our Canadian seamen.


Hon. ALFRED DURANLEAU (Minister of Marine):: As it is almost nine o'clock, Mr. Speaker, and I cannot finish my remarks 'before the hour for private bills expires, perhaps you would call it nine o'clock.


Pierre Édouard Blondin: The minister may continue his remarks the next time this matter comes before the house.


Alfred Duranleau: I have listened with much interest to the remarks made by hon. members on this question, but I do not think the time is opportune to accept the principle of the bill sponsored by my hon. friend for Vancouver South (Mr. Maclnnis). As was stated the other day when my estimates were before the house, the intention of the government is, when we have full power, as we shall have in the very near future, to .make a complete revision of the Canada Shipping Act. We admit (that the act as it stands to-day should in .certain important particulars be amended for the protection of Canadian shipping interests and Canadian mariners. There is no doubt about that.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Right Hon. R. B. Bennett (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Ralston.
Mr. A. L. BEAUBIEN (Provencher):: In rising to make a few observations in the present debate, I intend to follow my usual practice and to be brief in anything that I
have to say. May I be permitted first to congratulate the hon. member for Shelburne-Yarmouth (Mr. Ralston) for the very fine address which he gave yesterday in reply to the budget speech delivered by the right hon. the Prime Minister (Mr. Bennett). In my experience in this house in the last ten years I do not think I have ever heard a reply to a budget speech more ably or more fairly presented.
I hope I shall be pardoned if I do not follow the remarks of my hon. friend from Stanstead (Mr. Hackett), who took his seat just before six o'clock, except to the extent of a few general Observations. It ill becomes any member of this house, no matter on which side of politics he belongs, especially at this time when the Canadian National Railway is facing a serious situation, as is practically every other business organization throughout the dominion, to try to lower the national railway in the estimation of the public. I have not the quotation before me, but I understand that in 1912 or 1913 the present Prime Minister referred to an hon. member of this house as the gramophone of the Mackenzie and Mann interests. May I be permitted, Mr. Speaker, to say I am inclined to believe that the hon. member for Stanstead, if one may judge by his attack this afternoon on the Canadian National Railways, is the gramophone of the Canadian Pacific Railway. I do not make that statement in criticism of the Canadian Pacific Railway, one of the finest organizations of its kind and one which is rendering a service to this country of which everybody should be proud. I repeat however that no man has a right to attack the Canadian National Railways to the extent they were attacked this afternoon, and no one has a right to create a false impression throughout the country concerning those railways. The remarks of my hon. friend from Stanstead reminded me of an eminent lawyer trying to boost his corporation by knocking another. No commercial traveller ever sold an article by knocking the article of a competitor; it is not good business. My hon. friend also referred to the swimming pool in the Chateau Laurier and wanted to know to what use the pool could be put. I am informed-and if my information is not accurate I wish to be corrected -that the right hon. the Prime Minister uses that swimming pool almost every day. Through the use of the pool he keeps himself fit. A man who has to do the work the Prime Minister does, a man trying to run
235S
The Budget-Mr. Beaubien

the whole government of this country, needs a swim every morning to keep himself in trim. I am given to understand also that during the election campaign GeneraJ McRae, the organizer for the Conservative party, kept himself fit by taking a swim in the Chateau Laurier pool every day.


Ian Alistair Mackenzie: I think
the pool is justified.


Arthur-Lucien Beaubien: Probably if General
McRae had not been in a position to take that swim every morning hon. members opposite might be sitting on this side of the house.


James Dew Chaplin: I wonder that the hon.
member did not take a swim in that pool.


Arthur-Lucien Beaubien: The hon. member for
Stanstead this afternoon attempted to criticize the efficiency of the Canadian National Railways. I fear no contradiction when I state that no railway in the world is giving more efficient service than the Canadian National Railways are giving to the Canadian people. The Canadian people are proud of the system, and the speech by my hon. friend this afternoon will not change their view in that .respect. In order to prove that the Canadian National Railways are considered by the 'Canadian people to be an exceptionally fine institution I refer hon. members to a speech .delivered on March 8, 1928 by the present (Minister of Justice (Mr. Guthrie). In that speech my hon. friend from Stanstead will find all the information he wishes regarding the Canadian National Railways.
I intend now to deal as briefly as possible with the budget. First I shall attempt to discuss the stamp tax on cheques, followed by some observations on the increase of the sales tax, the restoration of the tax on tea, the increased tariffs, amendments to the income tax, and the five cent speech of the right hon. the Prime Minister.
Before I go on with those remarks, however, may I tell the house at least a part of what I told my electors during the election campaign. I told them that if the right hon. gentleman-at that time I called him Mr. Bennett-became Prime Minister there would be several millionaires in his cabinet from whom the poorer people could not expect much sympathy. I do not know how many millionaires there are in the present cabinet. However, it makes no difference to me what the number is, because I can go back to my electors at the close of this session and say to them that even if there are not as many millionaires in the cabinet

as I had prophesied, the first budget presented at a regular session by the present Prime Minister of Canada is a rich man's budget, and none but the rich will receive any benefit from it.
During the debate on the address in reply to the speech from the throne the Prime Minister accused hon. members on this side of the house of exaggerating conditions in western Canada. He chastized us very severely. He went to the extent of telling us that we had produced $1,900,000,000 wealth in the last three years, that tens of thousands of farmers had money in the bank, that we had a great many automobiles, and that we paid a large sum of money by way of tax on gasoline. Those are true statements, Mr. Speaker. We did produce about $1,900,000,000 in wealth in the years mentioned. But where did that wealth go? Some of it went to the railroads, some of it to our institutions, and by the time we had finished producing it there was nothing left for us-nothing. It is a fact that a considerable sum was paid by way of gasoline tax, but who spent it? The tourists spent a great deal of it, but people in the cities spent most of it. Who own the automobiles in western Canada? Does the Prime Minister want to deprive the poor farmer of his "tin Lizzie?" Does he want him to keep his family at home and give them no enjoyment of any description? The statements made by the Prime Minister are true, Mr. Speaker; I am not denying them. I do however object to the information that he has broadcast throughout Canada in an attempt to create the impression that the farmer who is trying to get relief of some kind is wealthy and does not need relief.
In the same speech, and the next breath, the Prime Minister asked: What is the cause of the great depression? If there is a great depression hon. members on this side of the house simply place the situation before the government by telling them exact conditions. The Prime Minister admits there is a great depression. By providing in his budget speech for five cents per bushel on western wheat he has admitted that there is a depression. Tf there is any exaggeration of the economic condition of the western farmer, it can be traced to the inference broadcast by the Prime Minister in his speech of April 21. The truth is that conditions in western Canada are bad. The Prime Minister knows that, and if he does not it is because he has not tried to acquaint himself with the facts. I am afraid if conditions do not soon improve in western Canada the results will be disastrous.

The Budget-Mr. Beaubien
In my speech delivered in the debate on the address in reply to the speech from the throne I said that prosperity would come to Canada just as soon as and no sooner than the agricultural industry was put on a paying basis. Nobody can successfully deny that statement. Neither the Prime Minister nor any other minister can deny it. Prosperity will come to Canada when the farming industry is put on a basis of prosperity whereby after working the whole year the farmers can have something left. I said, and I repeat, that there is only one way to bring that condition about. The Prime Minister admits, as I think every man who has made a study of world conditions in regard to the sale of cereals and other farm products will admit, that we must lower the cost of production. We cannot expect much higher prices for our products, so what is there for us to do? Are we to stop producing, or are we to try to reduce our costs of production in order to compete in the world markets? I claim that we must reduce our costs of production. But how are we to do that under a government which is imposing tax after tax on the people least able to bear the burden, and at the same time relieving those best able to bear it? How can we reduce our costs of production when this government is running wild with tariff increases? The Prime Minister is fond of having concrete examples put before him, and in a few moments I am going to give some examples of how the tariff works.
Now let me deal for a moment with the stamp tax on cheques under $10. A friend of mine shipped a five gallon can of cream the other day to Eaton's in Winnipeg. I will admit it was not No. 1 cream, but for that five gallon can he received $1.13. As soon as this stamp tax comes into force what will be done by Eaton's, by the dairies and the other milk purchasers? They will charge the farmers the two cents they have to put on the cheque, and on that five gallon can of cream, which netted my friend $1.13, that would amount almost to a two per cent tax. I hope my constituents will remember that I told them they could not expect anything else from a rich cabinet.
Then let us go on to the sales tax, which is being increased from one per cent to four per cent, while many commodities previously exempted are now to be subject to tax. More commodities which go into the cost of living and which are absolutely necessary will be taxed four per cent instead of one per cent, and this at a time when the poor people can hardly earn enough to support
their families. I am sorry the Minister of Justice is not in the house. The hon. member for Shelbume-Yarmouth quoted him yesterday in regard to the Canadian National Railways, and I should like to quote him in regard to the sales tax. In 1929 the late Mr. Robb reduced the sales tax from three per cent to two per cent, and the Minister of Justice, then sitting on this side of the house, had something to say in regard to that proposal. I find in Hansard for March 7, 1929, the following:
When it comes down to the ordinary, everyday people of Canada, all he has to say to them is this: I have taken one per cent off the sales tax. That is some relief. The sales tax last year at three per cent yielded sixty million dollars. Next year at two per cent the yield will be twenty million dollars less. But why maintain this war tax which is so burdensome upon the backs of the poorer people of the dominion?
The minister almost had crocodile tears in his eyes. He went on to say:
Do the people know even yet that they have to pay two per cent on their wearing apparel, one per cent on their boots and shoes, and two per cent on practically everything that goes into the ordinary household?
If this statement held good at that time, Mr. Speaker, it holds good to-day when the poor people are much less able to pay the sales tax than they were in 1929. Yet the tax is increased from one per cent to four per cent.
Then we come to the restoration of the tax on tea. Now that the price of liquor is so thigh we have to drink itea, butt what will happen? As soon as this tax is put -back I am afraid the people will have to go back to liquor. Why not make everything the people must have as cheap as possible? Why put on this tax while relieving the rich man of the income tax? It is not logical; it is not common sense; it is not fair; it is not equitable.
Now we come to the tariff increases, which will take a tremendous toll from the Canadian people. I am not a free trader, as the word is usually understood; I know it is impossible to have free trade at the present time, but I do not think we should go in for higher and higher protection for our industries. Our industries are controlled by human beings. They are taking advantage of the tariff to the fullest extent; they always have done so and always will do so. In that connection I have two or three concrete examples for the consideration of the Prime Minister. During the short session last September, when the Prime Min-
The Budget-Mr. Beaubien

ister was presenting to the house the proposed increases in the tariff, he said he had guarantees from the people who were getting the increased protection that they would not increase the prices of their goods. The Prime Minister placed on Hansard letter after letter from these different firms. What did we say on this side, and -whait do I say now? I say he cannot prevent these people from increasing the prices of their goods unless he is going to oversee every little detail of all these companies. How would the bon. member for Lincoln (Mr. Chaplin) like to have the Prime Minister, or the auditors of the Department of Finance, looking through his books in order to find out whether or not he was charging too much for his goods?


James Dew Chaplin: If I make a promise nott to Charge any more, there will be no more charged.


Arthur-Lucien Beaubien: I accept the statement of the hon. member, (because I think he is a man of his word, but the trouble is that everyone in this country is not like my hon. friend. Perhaps if we had more people like him it would be a good thing for Canada.
Now I am going to give some further examples to the Prime Minister, and I hope he will do -me the courtesy of looking into these matters. I presented one case to the Minister of National Revenue last fall in regard to fruit, but I have heard nothing more about it. The government just -put on new duties whenever they feel like it; they go from oranges to potatoes and to radishes and increase the [DOT]tariff. Here is a concrete case of a price increase. J. W. Miller and Company, of Toronto, are manufacturers of equipment -for poultry farms. They do a large mail order business and publish annually illustrated informative catalogues. I have here a comparison of their catalogue prices of 1930 and 1931. The tariff was increased at the short session from 10 per cent to 25 per cent, an increase of 15 per cent. Now, there has been a substantial increase in the prices of the commodities sold by this concern-the commodities which are indispensable to the chicken-raising business and which the chicken-raiser must have if he is to put eggs on the market. And wh-ile these prices have gone up, the chicken-raiser is getting 5 cents a dozen in the west for his eggs. With this considerably reduced return for his work, he finds, when he goes to buy what you might call his implements of -production, that the prices charged -for -these things are very much higher.

Let me give some illustrations taken from the catalogues of this company for the years 1930 and 1931 respectively:
1930	1931
Incubator, 400 egg size	$32	00	$38	40Incubator, 85 egg size	
12	75	14	70Incubator, 150 egg size	
16	50	19	80Incubator, 250 egg size	
21	90	26	25Incubator, 600 egg size	
46	75	56	10Incubator, 800 egg size	
64	00	72	80Incubator, 1,200 egg size	
96	00	115	20
Brooder, double draft 500 chick
size	 11	50	12	95
Brooder, double draft 1,000 chick
size	 14	75	15	55
Brooder, double draft 1,200 chick
size	
17	50	19	45Brooder, automatic, 250 chicks..	9	95	11	95Brooder, automatic, 500 chicks..	10	95	13	15Brooder, automatic, 1,000	chicks.	11	95	14	35


Mr. MORAND:: Are those Canadian-mad** goods or are they imported?


Arthur-Lucien Beaubien: They are the goods the farmer has to buy. If they dlo not make them in Canada, why put on a duty?
Mr. M'ORAND: I just wanted to find out.


Arthur-Lucien Beaubien: I have given a sufficient number of illustrations to show what the trend is. In other words, since the special session the prices of these commodities have gone up between 10 and 12 per cent. These articles the farmer must procure if he is to carry on business, and while their prices have gone up there has been a decline from about 22 cents to 5 cents a dozen in the price of eggs in the west. Is there any justice in such a condition of things? I repeat, notwithstanding what the hon. member for Lincoln may think, that these high tariffs will result in an increased cost of production. It cannot be otherwise. Let me give you an illustration from my own experience. At Easter the Prime Minister was kind enough to give us a long holiday and I thought I would go home and see what my constituents had to say in regard to what this government has done. I should hate to tell you, sir, what they told me to come here and say, because it would be unparliamentary. However, being a farmer, I happened to be in need of a smutcleaning machine. For your benefit, Mr. Deputy Speaker, although I believe you were brought up on a farm yourself, I may describe the smut-cleaning machine. Every year we have to pass our grain through a formalin solution in order to safeguard it from smut. This is a technical term which may not be familiar to the house. When the grain matures the ear may turn into a black

The Budget-Mr. Beaubien
powder and you have no grain. Consequently we have to put the grain through this solution every year, and it is one of the most essential of our farming operations. Now, I went to my dealer to buy one of these smuLeleaning machines and I asked him what he wanted for it. He gave me both his 1930 and 1931 price lists. In 1980 an 18 inch smut machine with perforated bottom and extra long carriers cost, f.o.b. Winnipeg, $24; Saskatoon, $26; and Edmonton, $27. In 1931 the price of that very same machine had increased. Mind you, they did not go to the trouble of printing a new price list; they simply took a little piece of yellow paper with the new prices printed on it, and pasted that slip over the old prices. Apparently they did not want to go to the expense of printing a new list. In 1931 the price of that 18 inch smut machine, f.o.b., was $28 in Winnipeg; $30 in Saskatoon; and $31 m Edmonton. Perhaps I had better give the name of the firm: it is The Hart-Emerson Co., Ltd., of Winnipeg, Saskatoon and Edmonton. They make these machines. Well, I asked my dealer the reason for the increase in price, but he said he did not know. What was the result so far as trade was concerned? Why, I simply refused to buy the machine. Instead, I went home, took out my old machine and fixed it up the best way I could. I came back to Ottawa and went into the tariff in order to find out just what the situation was. I found that smut machines are dutiable under tariff item 409, subitem (f), and the duty in force prior to the special session of last September was: British preferential, free; intermediate, 10 per cent; general tariff, 10 per cent. At the September session the Canada first policy was carried into effect. That is now a famous slogan- Canada first. An hon. gentleman says it means, "Soak the Canadian people." I think he is right-soak them first and others afterwards. The Prime Minister increased this duty, making the rates: British preferential, free; intermediate, 15 per cent; general tariff, 25 per cent. Now, the British preference does not figure here at all; the only tariff that figures in this is the general tariff, and that tariff was increased 15 per cent. My hon. friend from St. Boniface (Mr. Howden) tells me-and I think he is right-that 75 per cent of durum wheat, of which we grow a great deal in the west, is subject to smut and must be treated all the time. Now, what was the increase in the tariff on the article so greatly needed in this regard? The increase, f.o.b. Winnipeg, was 16 per cent; Saskatoon, 15
per cent; and Edmonton, 14 per cent. Remember, Mr. ^Speaker, that the British preference does not apply here. The only tariff which would apply is the general tariff, and that was increased by 15 per cent. The price of the machine was increased by 15 per cent, which proves beyond question that my contention is correct. I can pass this list to any hon. member to show that the price of the machine was increased by the exact amount of the increase in the tariff. These tariff changes increased the price of the commodities which the farmer needs in order to carry on his operations.
I repeat, and I hope that the Prime Minister will read my remarks, that prosperity will come to Canada just as soon as and no sooner than the agricultural industry is put on a paying basis. Every action of this government, as shown by this present budget and the results of the last session, has aggravated the situation and increased the cost of production to the farmer.
For a few minutes I would like to discuss the wheat situation and the five cent speech of the Prime Minister. We heard a good deal about the five cent speech of the right hon. leader of the opposition (Mr. Mackenzie King) during the last campaign, but we now have another hon. gentleman in this house who comes within the same category. I do not know very much about this five cent bounty on freight rates on export wheat, and I have not been alble to find any other hon. member who does. I have asked every hon. member with whom I have come in contact- except you, Mr. Speaker, and I am sorry I did not go to you; perhaps if I had I would have obtained the information I desired. No one has been able to give me any explanation as to how it is going to be applied. I do not know how the government intends to get it back to the farmer. I suppose the Prime Minister will be able to give the house some explanation. Why not put a five cent bonus on barley? The province of Manitoba in 1929 produced 28,565,000 bushels of wheat, and in 1930, 45,278,000 bushels. The barley production in 1929 amounted to 36,518,000, and in 1930, 49,974,000 bushels. We produced more barley than wheat. What relief is offered to the man who has sown barley this year and who has not sown any wheat? Wheat cannot be sown every year; the crops must be rotated.
If the Prime Minister wants to give relief to the farmer-and I suppose that is what he intends to do-I hope he is not trying to convert him to his system of protection by giving him this five cent bounty on freight. If the
The Bridget-Mr. Beaubien

Prime Minister is trying to give relief to the farmer, this five cent piece is wholly inadequate, and he knows it. If he desires to give relief to western Canada, let him give the farmer something tangible, let him give to the farmer as much as he is giving to the manufacturers.


Mr. MANION:: Is my hon. friend opposed
to the five cent assistance?


Arthur-Lucien Beaubien: I am not opposed to
anything that can be applied, and the minister knows that very well.


Robert James Manion: I thought the hon. member was opposed.


Arthur-Lucien Beaubien: No, I did not say I was, and I do not want the hon. minister to put that inference on my remarks.


Robert James Manion: My hon. friend makes his own remarks, but I can put on them whatever inference I desire. The hon. member gave every inference that he was opposed to the five cent assistance.


Peter John Veniot: He did not.


Arthur-Lucien Beaubien: I think the Minister of
Railways and Canals (Mr. Manion) is very unfair in saying that. I would not put any wrong interpretation upon his remarks and I hope he will not on mine.
I had intended to read to the house an editorial, but the time remaining at my disposal will not permit my doing so.
In conclusion may I say that had the people of Manitoba at the last election been told by the Conservative candidates who now act on the other side of the house that if the Conservative party were returned to power the government would go on a rampage in regard to tariff increases, I feel certain that those members would not have received the votes they did. If the hon. members for Marquette (Mr. Mullins), Souris (Mr. Willis), Selkirk (Mr. Stitt), Portage la Prairie (Mr. Bums), Dauphin (Mr. Bowman), Nelson (Mr. Stitt), Springfield (Mr. Hay) and Brandon (Mr. Beaubier) had told their electors that if the present Prime Minister was returned to power he would increase the tariff, I do not believe they would be here to-day. They know that very well, and they know that they told the electors that the Conservative party was not a high tariff party. Can they go back to their electors to-day and tell them that? If they do they will be misleading those who put them in office.


Mr. STITT (Nelson):: Mr. Speaker, on
a question of privilege; my name has been

used in this house and I wish to correct the hon. member-


Pierre Édouard Blondin: The hon. member is not stating a point of privilege.


Bernard Munroe Stitt: The hon. member
has quoted me.


Arthur-Lucien Beaubien: I have not quoted anyone. I said that if the hon. members I have mentioned had told the electors in the elections of 1930 that they were going to support increases in the tariff to the extent shown by the budget of 1931, then the farmers would not have voted for them.


Mr. SPOTTON:: How do you know?


Arthur-Lucien Beaubien: I have proven my case to this house; I have given the Prime Minister and the government concrete examples; I have given the name of the company and the prices of their commodity, and it is up to the Prime Minister to make good the promises he made to this house and to this country last September that no one receiving the benefit of a tariff increase would be allowed to increase his prices.


Mr. C. H. DICKIE (Nanaimo):: Mr. Speaker, I do not know whether I may be considered as fortunate or unfortunate in following the hon. member who has just resumed his seat (Mr. Beaubien). At the outset I desire to express my gratification for the budget brought down by our esteemed leader (Mr. Bennett). It was a comprehensive and courageous budget-comprehensive because it entered into every detail of the economic life of Canada, and courageous because it takes courage to impose taxation upon a people. The taxation was necessary because we were in dire straits; we are going to see if we cannot balance our budget during the coming year.
I do not intend to take up very much of the time of the house in discussing the subject matter of the budget, as I have not heard any arguments advanced from the other side of the house which call for refutation. On the other hand, I have heard some magnificent arguments by the hon. members for East Essex (Mr. Morand) and Cumberland (Mr. Smith). The hon. member for Cumberland has shown how this budget will give great relief to the iron and steel industry. He speaks with authority, as he is familiar with the conditions which exist in that part of the country. The hon. member for East Essex gave as an illustration how each automobile built in Canada meant $450 or the equivalent

The Budget-Mr. Dickie
of three months' work to workmen engaged in its manufacture. We should build our own automobiles in Canada; we are ten years behind with this budget program in this country, and there is no reason why we cannot build automobiles here? If we had built in Canada automobiles equal to the number that wo imported in 1929 from the United States, we would have had 11,000 workingmen employed at good wages doing that work and that would have meant an additional population of 50,000 in this country.
This budget is an additional step to stem the outflow of capital from this country to the United States. It will stem the tide of imports and help to keep our money here, and if we keep our money here, we shall be doing the best that can be done under the present conditions. Surely no hon member would say that we should carry on as we did in 1926 and 1927, those halcyon years when there was a balance of trade of $400,000,000 against us in favour of the United States. Those people were laughing at us; they called us gentlemen and fine people, but they wondered at our simplicity in permitting such a condition of affairs to exist. They were accepting our raw material, welcoming it, but we could not get them to accept from Canada anything into which Canadian labour entered. Finally it was decided that a tariff would have to be imposed, and Mr. Dunning, more for political purposes than anything else, had a tariff regulation enacted at that time. The present Prime Minister (Mr. Bennett) has said-and he is living up to his promises - that he is going to stem the tide of imports and to make this Canada of ours a self-supporting country. There is no reason why we cannot bring that about. We can keep our money here; we can keep our people here, and now that we have put a stop to immigration from Europe, there is no reason why we should not have more stable conditions in this country when we once more get on our feet. When that time comes we can pass social legislation for the benefit of our wage earners to give them the treatment which we cannot accord to them at the present time.
I did not intend to say anything with respect to the budget, because it has been so ably dealt with by others who have already spoken. My reason for addressing the house to-night is that we have grievances in British Columbia and although we have not been heard crying out, we have had our backs against the wall. We have taken our medicine standing up, but we in that province still have many problems
confronting us. It is my hope to-night that what I say may induce the government to grant us a little more relief than has been accorded in the past in order that we may come through the trying times through which we are at present passing.
Last season we had a magnificent catch of fish in British Columbian waters. Our individual fishermen made good money but our canners are on the verge of bankruptcy. One canning company lost over a million dollars last year, for the simple reason that they could not sell their pack in the markets of Europe. They had built up in France quite a market for our red salmon when Russian representatives told the French people that no matter at what price Canadian canners put their salmon on the market, the Russians would let them have theirs at fifty cents a case cheaper. In regard to this I am speaking of something that I know is absolutely the case. Russian salmon entered into Great Britain and the markets of continental Europe and we were unable to sell our salmon at prices that would be profitable to the British Columbia canners.
We have a metalliferous province, if I may put it in that way, and with copper at the present time at eight cents a pound, lead at four cents, zinc at about the same price, and silver very low, our mining men are in despair and we would like to see something done for them.
As regards lumber, we have the same story to tell. We have a wonderful lumber industry in British Columbia. We ship our lumber to Great Britain, but we now find that the British market is supplied from Russian sources. We have lost large orders there and the lumbermen of British Columbia hardly know what to do at the present time, due to the great Russian menace. We do not hlame any government for the troubles that I have mentioned in these three industries; they are the result of world-wide conditions. We cannot help what that soulless country, Russia, does at this time, but still we are handicapped to a great extent by their lumber, fish, and also wheat; because we look to the prairie provinces to buy much of our produce from British Columbia and the price of wheat being forced down by the wheat from Argentina and Russia, the people of the prairie provinces are unaible to purchase as they used to do from British Columbia producers.
But there is something that I think can be done with respect to the coal situation. We have coal mines in British Columbia, and
The Budget-Mr. Dickie

for the information of the house I might give the following statistics:
Table of figures compiled from official reports, showing the decline in coal production and the increased consumption of foreign	fuel oil in
British Columbia from the year 1910 to 1930, both inclusive:
Total coal production in British
Columbia	tons	3,139,235Vancouver Island	tons	1,616,030Fuel oil (imported)	gals.	5,041,746
Total cost production in British
Columbia	tons	1,887,130Vancouver Island	tons	988,805Fuel oil consumed (estimated) .gals.	130,000,000Decrease in coal tonnage for British Columbia	(1910-1930)..	40%Decrease in coal tonnage for Vancouver Island	(1910-1930)..	40%
Increase in consumption fuel oil
(1910-1930)..	..	  300%
Men Employed in Mines 1910
Men employed in British Columbia	7,758
Men employed in British Columbia
(part time)	 4,645
Decrease of	 40%
Men employed in Vancouver Island	4,499
Men employed in Vancouver Island
(part time)	 2,771
Decrease of	 38%
Oil Imports for Use in British Columbia
Fuel oil imports subject to dominion Year duty of ic. per gal.
1926..	..	62,214,000	gals.1927..	..	42,954.000	gals.1928..	..	38,124,000	gals.1929..	..	35,697,000	gals.1930..	..	30,000,000	gals.
Decrease 50%
Fuel
oil produced in B.C. from crude oil refined and free of duty
42.000.	000 gals.
79.000.	000 gals.
96.000.	000 gals.
110.000.	000 gals.
130.000.	000 gals. Increase 300%
Many of the men employed in the mines on Vancouver island are British miners; they have their little homes there, and the hardships which they are enduring at present are more than they should be expected to bear. They are willing to work. During the war, when we were having all sorts of trouble with the foreign mining element in Brule and other places to the east, our miners stuck to their work, never asked for a cent extra pay, and came through clean and creditable to British Columbia. We want to see something done for these men.
The Minister of Marine (Mr. Duranleiau) has very graciously given us a hydrographic 
steamer to work on the Pacific coast. Although it was represented that fuel oil had to be used on that steamer, I am proud to say that the minister supported us nobly and said that it mudt burn coal. That, of course, is simiply a gesture, but it gives a little heart, to the coal miners of British Columbia. We have an immense hotel being erected at a cost of 18,000,000. We made representations at Ottawa to have coal burned in that hotel, but Sir Henry Thornton, or those under him, said that this was an impossibility; they would not aocede to our request. They said that it would cost $5,000 additional to burn coal over what it would cost to bum oil. We still continued our efforts; we told them that those figures were absurd; but even if such were the case, the ooal would be brought from Nanaimo, which is a very good customer of the city of Vancouver. We did not cease our efforts in the matter, and just the other day we were informed by the Minister of Bail-ways and Canals (Mr. Manion) that coal will be burned in the great furnaces of that hotel. There is no reason why this should not have been done, and I am glad indeed that pressure was brought to bear to that end. There was some reason why the management of the railway changed their ideas with respect to the fuel they would burn in that hotel. It will mean work for some of the miners, because it is a large hotel and I am sure they will ge't along just as well with ooal as with fuel oil. We instanced the ease of the Empress hotel at Victoria, as pretty a hotel as there is in the world. They have been burning coal and are well satisfied with it, and we saw no reason why the Canadian National should not do the same in a hotel belonging to the people of this country. It would mean giving a little work to the miners of this country, instead of sending the money out of Canada to California for fuel oil.
Let me give a few figures to show the inroads fuel oil has made on the coal industry in Canada. In 1926 we produced in British Columbia 42,000,000 gallons of fuel oil from crude oil refined and admitted free of duty, and in 1930, 130,000,000 gallons. We imported in the same years fuel oil to the amount of 62,0000,000 gallons and 30,000,000 gallons respectively. That oil all came in from California. The reason why the fuel importations fell off from 62,000,000 to 30,000,000 between 1926 and 1930 was due to the fact that the dominion government imposed a. duty of half a cent a gallon on fuel oil. The crude oil which is refined in British Columbia and from which fuel oil is produced, and

The Budget-Mr. Dickie
gasoline and other gaseous products, leaves fuel oil as the residue, and it is this oil coming in from California with which we have to compete in British Columbia. Last year we bought from the United States 130,000,000 gallons of that fuel oil. That would represent about $5,000,000 or $6,000,000, which went to enrich the oil people of California. We believe that the people of British Columbia will be quite willing to burn coal if we can put the question properly before them. We are told by the coal people that a regional duty in the way of an excise tax of one cent or one and a half cents a gallon would give employment to between 500 and 1,000 men in our coal mines at Nanaimo, Cumberland and Ladysmith, nice little towns where the miners are now walking around hollow-eyed looking for work. Such a duty would mean that these men would get work and would be able to live on in the little homes where they hope to spend the rest of their days. This would be a regional tariff not affecting any other part of Canada. The people of Vancouver city, who are the greatest consumers of fuel oil, I feel sure would not object any too strongly to a tax of that kind. Of course, there would have to be exemptions with respect to some parts of the lumber industry and with respect to the oceanic steamers plying from the port of Vancouver. They would have to receive a rebate of that one cent or one and a half cents a gallon on the fuel oil imported. Such a step would be of incalculable benefit to the coal industry of British Columbia.
The Prime Minister has proposed in the budget to give a bonus of 25 cents a ton on coal used for fuel purposes, for ship's stores or for export. We appreciate that bonus. It will do some good, but it will not accomplish what we wish to accomplish. I know of no reason why we should send out of this country four or five or six million dollars to enrich the people of California, and at the same time have our coal miners working only part time and sometimes not working at all. Let us keep that four or five or six million dollars in British Columbia and put our own people to work, and then we will have contented communities, things will go on very much better, the money will remain in our country and each of us may get a chance at it. There may be lions in the path; it may be impossible to carry this out, but I am going to expend all the power I have in trying to induce the government to grant further relief to the coal mining industry of British Columbia.
I have been a little amused iby some of the statements that have been made on the other side of the house with respect to our worthy and esteemed leader. One matter that has been frequently brought up by hon. members opposite is that the Prime Minister said, according to them, that immediately he came into power he would end unemployment. Whether he said that he would immediately end unemployment when he .came into power, or that he would immediately take action to end it, I do not know, but the question is so simple that I am amazed that hon. members opposite bring it up time and time again. No child on the street would expect the Prime Minister to end unemployment immediately. He meant doubtless that he would take immediate steps looking towards ending unemployment. This he has done, and when I hear hon. members opposite belittling the granting, of the $20,000,000 appropriated last September to help the unemployed in Canada I marvel at them, because that money provided work for a great many people, and the people are grateful for it.
Another matter of which hon. members opposite speak in a belittling way is the five cents a bushel bonus on wheat shipped from the prairies, which this budget grants. I know that five cents does not sound very impressive. I do not know just how this will be administered, but five cents a bushel on, say, 400,000,000 bushels, which we estimate will be the output of the prairies this year, amounts to $20,000,000, which the people throughout the rest of Canada are ready to pay in order to try to do something to help that badly harassed industry of agriculture in the prairie provinces. It is not becoming of hon. members opposite to 'belittle such assistance.
I am sure, also, that the people of Canada will be willing to pay the taxes which the Prime Minister proposes in this budget in order to stem the influx of imports into this country, because such action will result in keeping the money in this country and provide work for our own people. The people believe that the Prime Minister is doing the best that can be done. This is a time to perplex the souls of men, but I am sure that the people believe that the Prime Minister is giving of his best to bring Canada once more back on an even keel, and when that time arrives I hope that we shall not be wafted by indulgent breezes away again from the shores of sanity by trying to keep up with the Jones's and spending our money lavishly, laying nothing aside for the grey days of lean years which must inevitably recur in all countries. If our
Questions

people in many districts of British Columbia that I know of had only lived a little more carefully, there would not 'be the dire distress that there is to-day. This keeping up with the Jones's is all right, but it does not work out when the grey days come, and if nothing has been learnt from these dark days but the lesson of thrift and the making of provision for a rainy day, something worth while will come out of it all.
On motion of Mr. Brasset the debate was adjourned.
On motion of Mr. Guthrie the house adjourned at 10 p.m.
Monday, June 8, 1931.