1931-07-22

[Stage Direction]
Fifth report of the select standing committee on standing orders.-Mr. Bury.
Mr. Bury moved that the report be concurred in.
Motion agreed to.

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker, I rise to a question of personal privilege. The press of yesterday and to-day in reporting the proceedings before the select standing committee investigating the Beauharnois project has in certain quarters placed its own interpretation upon the evidence which was given there. I have in my hand one publication bearing the following heading:
Beauharnois paid bills of ex-Premier King. Mackenzie King's jaunt to Bermuda with Senator financed by Beauharnois.
I just wish to say Mr. Speaker that no bills of mine were ever paid by Beauharnois. I
[Mr. Hanbury.l
had no connection whatever with Beauharnois in any way, with respect to any matter of travel or anything else, and also I did not make the trip to Bermuda with Senator Mc-Dougald, as one might infer by reading the headings of articles appearing in some newspapers of yesterday and to-day.
The statement upon which these articles are based is a voucher presented yesterday to the committee which reads as follows:
April 30, 1930.-Expenses of trip to Bermuda Hon. W. L. Mackenzie King and self, hotel Bermuda, $288.53. Fares Montreal to Bermuda and return, $395.04. Hotel, New York, $168.75. Total, $852.32.
If one were to read this voucher without reading the evidence given yesterday by Senator McDougald, there might be some justification for headings which would seek to place upon the matter the interpretation to which I have referred. Senator Mc-Dougald's evidence given yesterday however makes perfectly clear the facts that this voucher was one which was put in, if not by himself by some one connected with his office, that it should never have been put in, that it was not a correct statement of his expenses and that it was in fact wholly erroneous.
May I say that at Easter of last year I paid a visit to Bermuda. On the way through the city of Montreal I saw Senator McDougald. He came into my car for a moment and spoke to me there. I did not see him again until I arrived at Bermuda, and when I was leaving I found that Senator McDougald who had been there during part of my stay had in part settled the account of myself and Senator Haydon who accompanied me on the trip. Senator McDougald left Bermuda before I did, and I did not accompany him to New York. I saw him in New York. I stayed one night at the Ritz Carlton hotel. The senator himself was not in New York at the time; I had received word that he had reserved accommodation there for Senator Haydon and myself and we stayed that night in the hotel. On the following day Senator McDougald came to the hotel with his wife with whom he had been in Atlantic City, and took up the accommodation he had reserved for himself. Senator McDougald did not pay any expenses whatever of either Senator Haydon or myself for transportation from Ottawa to Bermuda either by land or water, nor did he pay any transportation whatever from Bermuda back to Ottawa. All he did was to pay, himself, some of the hotel expenses while he had been a guest with Senator Haydon and myself.

Privilege-Mr. Mackenzie King
May I say, Mr. Speaker, that any attempt to draw an inference from the fact that on an Easter vacation I went to Bermuda with another member of this parliament and was met there by a second member, and that this meant that in any way I was violating any matter of honour in any particular is an inference which cannot be drawn by anyone who has an honourable mind. My purpose in going to Bermuda was twofold: I had in mind first of all the need of some vacation at the Easter recess. As hon. members know, whoever is filling the office of Prime Minister in Canada when parliament is in session is on certain occasions very much in need of rest. I took very few vacations during the time I was Prime Minister, and last year when the house was having the Easter recess I visited Bermuda. The primary object in my mind in going to Bermuda was this: In the government we had been discussing the terms of what is known as the Dunning budget, under which it was proposed to increase the duties against the United . States on fruit and vegetables. It was further proposed to reduce the duties under the British preference, and I was anxious to ascertain whether in the event of fruits and vegetables being made free from Bermuda and the West Indies there was a possibility or a probability of Bermuda and the other islands reciprocating by lowering their duties on some of our commodities going into those countries. While in Bermuda I discussed this matter with several members of the legislature and received assurances that if Canada did lower her duties on fruits and vegetables they were quite sure the islands would respond speedily by reducing some duties in our favour. That step was taken very shortly after our return.
Had I been thinking of enjoying a vacation at the expense of anyone I might, I suppose, have interpreted the trip-had I so desired to do, or been of a mind to do that kind of thing-as one which was associated with public business. I was so scrupulously careful however to avoid anything which might even remotely resemble anything of the kind that I regarded the entire trip to Bermuda and return as a vacation, and not a cent of money was charged against any account of the government or of any other organization or corporation of which I have any knowledge whatever.
I just wish to make that statement, Mr. Speaker, repeating that I am in no way responsible for any bills that may have been submitted by Senator McDougald to the Beauhamois company. I had no knowledge
whatever of any such bills being submitted. I was horrified when I learned of the voucher that was presented before the committee; so much so that I immediately went to the Prime Minister and told him of my trip to Bermuda and the circumstances surrounding it. I fail yet to understand how any such voucher could possibly have been put in. I want the house to understand that any bills that were put into the Beauharnois company were not put in with my knowledge or with my consent; they were not put in by me or on my account, but were put in by Senator McDougald with respect to expenses which he himself had incurred.
May I add this further fact, which possibly I should have mentioned at the outset: That I had no knowledge that Senator McDougald had settled the hotel account at Bermuda until I was about to pay my bill, when the clerk informed me that the Senator, before leaving, had paid the account-for the most, part, not in its entirety-and that therefore there was no further charge to be made in connection therewith.


Mr. BURY:: Mr. Speaker, with the leave
of the house-


William Lyon Mackenzie King: With your permission, Mr. Speaker, and that of the house, there is one important statement that I should have made. During the entire trip to Bermuda I never discussed the question of Beauharnois either with Senator Haydon or with Senator McDougald, or with anyone else, nor have I at any time discussed with Senator McDougald any matters pertaining to the Beauharnois.



RULES OF THE HOUSE


[Stage Direction]
The house resumed from Friday, June 26, consideration of the motion of Sir George Perley for the concurrence in the first report of the special committee appointed to consider jointly with Mr. Speaker the amending of the standing orders of the house governing the procedure to be followed in taking a division.
Mr. SPEAKER:: Is it the pleasure of the house to adopt the motion? Carried.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The house resumed from Tuesday, July 21, consideration of the motion of Mr. Chaplin for concurrence in the third and final report
Questions
[Stage Direction]
of the select standing committee on railways and shipping, owned, operated and controlled by the government.
Pierre Édouard Blondin: Is the house ready for the question?


[Stage Direction]
Motion agreed to.

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

Mr. FRASER (Northumberland):: 1.	Who appointed the enumerators for Northumberland county, Ontario?
2.	On whose recommendation were they
appointed?	.
3.	How many were out of work at the time of their appointment?
4.	How many of them are married?
5.	How many of them are returned soldiers?
6.	What are the names and addresses of all enumerators for Northumberland county, Ontario?


Mr. STEVENS:: Tabled as an order for
return.


EX-SERVICE MEN-HOSPITALIZATION
Mr. AHEARN:: Will the hon. Minister of Pensions and National Health consider giving hospitalization to all ex-service men, regardless of length of service, who are suffering from tuberculosis and who appeal to the Department of Pensions and National Health for help?
Mr. MaoLAREN:	It has been and still
is under the consideration of the department.


POULAMOND WHARF-ENGINEERS REPORT
Mr. RALSTON:: 1.	Has an engineer's report been received on building a wharf or an extension to the existing wharf, at Poulamond, Richmond county, Nova Scotia?
2.	If so, is such report favourable?


Mr. STEWART (Leeds):: Mr. Speaker, it would not appear to be in the public interest at this stage to give an answer to this question. It asks for information received for the guidance of the department, and until some action is taken on the report I submit an answer should not be given to the question.


Pierre Édouard Blondin: Answered.
chevalier's scow


Mr. SEGUIN:: 1.	Did one Chevalier offer for sale to the harbour commissioners of Quebec or Montreal a scow owned and operated by him?
2.	If so, what is the name of said scow?
3! What price did the said Chevalier demand for the said scow?	. .	n
4.	Have the harbour commissioners of Quebec or Montreal purchased said scow?
5.	If so, what price did they pay for same?
[Mf. Speaker.]


Mr. DURANLEAU:: The following answers have been furnished by the harbour commissioners of Quebec:-
1.	There is no record in the Quebec harbour commissioners' files regarding such an offer, and the officials of the commission do not recollect any such offer being made.
2.	The name of said scow is unknown.
3.	The commissioners are ignorant of the price which the said Chevalier wished to obtain for his scow.
4.	No.
5.	No payment has been made by the commissioners in this connection.
The following answers have been furnished by the harbour commissioners of Montreal:-
1.	Yes.
2.	A. C. No. 3.
3.	$16,000.
4.	No.
, 5. See answer to question 4.


RAINY LAKE-BUOY CONTRACTS
Mr. HEENAN:: 1.	Who secured the contract for placing buoys in Rainy lake this season?
2.	What is the amount paid for this contract?
3.	What was the amount paid for this contract last season?
4.	Does the contractor own a boat necessary to perform this work?
5.	Does the contractor hold a position with the Ontario government?
6.	Who let this contract on behalf of the federal government?
7.	Who recommended the present contractor?


Alfred Duranleau: 1 to 7. There is no contract. The arrangement this season is the same as in previous years whereby the work is done under the immediate supervision of Mr. C. L. Parrott, sub-agent of the marine department at Kenora, who is authorized to purchase material and hire labour, and tug, as required. The work is more extensive this season than formerly on account of change in level of lake.


QUESTION PASSED AS ORDER FOR RETURN
Mr. RALSTON:: 1.	To whom were contracts awarded for coal to be delivered to the Department of Public Works for consumption in the maritime provinces?
2.	What grade of coal did the contracts call for and what price is to be paid, in each case?


Hugh Alexander Stewart: I desire to inquire of the member for Shelburne-Yarmouth (Mr. Ralston) which year he has in mind, the current or the past year?

Privilege-Mr. Veniot


Mr. RALSTON:: Any contract that has
been let or dealt with since my hon. friend has had charge of the department.


Hugh Alexander Stewart: Then I would ask, Mr. Speaker, that this question stand as an order for return.


CHICOUTIMI HARBOUR
[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved that the house go into committee to-morrow to consider the following proposed resolution:
That it is expedient to authorize a loan to the Chicoutimi harbour commissioners not exceeding $450,000 for the construction of terminal facilities, upon approval by the governor in council of detailed plans, specifications and estimates for such works, and the deposit of the debentures of the corporation to cover said loan.
He said:	His Excellency the Governor
General having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. H. E. SPENCER (Battle River):: Mr. Speaker, some little time ago I put certain questions on the order paper with respect to bank note circulation, and they were answered on July 6. This was one of the questions:
What was the total of chartered bank notes in circulation on 31st May, 1931?
To which this answer was given:

Looking at the return of the chartered banks to the Department of Finance, made at a later date, I find under the heading "Notes in circulation'' the total amount given as $143,749,692, or a difference of $20,000,000. less $1. This may be a clerical error, but I should like to know which amount is correct.


Right Hon. R. B. BENNETT (Minister of Finance):: I shall read the Hansard report of
what the hon. gentleman has said and answer him to-morrow.
PRIVILEGE-Mr. VENIOT
On the orders of the day:


Hon. P. J. VENIOT (Gloucester):: Before
going on with the orders of the day I rise to a question of privilege, which includes the privileges of parliament as well as the personal privileges of myself as a member of
parliament. On April 27 an order was passed for the production of papers in the case of Nordin v. the King. These papers were asked for by the hon. member for Mount Royal (Mr. White):	Seeing that the papers were
not produced, and being interested in obtaining the information contained in that file, on June 5 I took up the matter. The Secretary of State (Mr. Cahan) then informed me that he would look into the matter. I believe this was on a Friday, and the following Monday or Tuesday he informed me that he had discovered that the wrong file had been looked at, and that later on the matter would be attended to.
Up to the present time these papers have not been produced. Since this file has to do entirely with the Department of Railways and Oanals, and since it is not the practice for the Secretary of State to produce papers except when they come from more than one department, I would now ask the Minister of Railways and Canals (Mr. Manion) if there is any reason why these papers have not been produced, or if there is any reason why they should not be produced. When the minister gives that reason I should like to have the opportunity, on a question of privilege, of discussing the matter further.


Hon. R. J. MANION (Minister of Railways and Canals):: It is not in the least
the fault of the Secretary of State (Mr. Cahan) that these papers have not been produced. It is my own fault, or perhaps I should say it is to my credit that this has not been done, and the reason is this: The production of these papers is being asked for -and in saying this I am in no way reflecting upon my hon. friend-for the purpose of permitting someone who wishes to sue the government to get certain information from our files. Since our department does not believe that the people who are going to sue the government in this matter have a just case, it was and is my opinion that it is not the duty of the government or of any department of the government to submit files for the purpose of enlightening some legal firm who may desire to secure information from those files which will assist them in preparing their case. I am not saying this in any spirit of criticism with regard to my hon. friend, because an hon. member on this side of the hoi^e moved for the production of those papers, I believe, on a previous occasion. The resolution slipped through; I do not remember when it was passed and I do not remember knowing anything about it when it did go through, but at any rate it was passed.
Privilege-Mr. Veniot


Peter John Veniot: On April 22.


Robert James Manion: I do not question that,
nor do I question my hon. friend's intentions at all. But I repeat that I cannot see why, in a case like this, the government should be in a different position from a private corporation, which certainly would not show its files to an opposing group who might desire to sue them. I think the government, in the public interest, should refuse to permit the file to be brought down.


Mr. YOUNG:: Is that the infallible justice of the crown?


Robert James Manion: My hon. friend had better stick to free trade.


Peter John Veniot: In discussing this matter
further permit me to direct the attention of the Minister of Railways and Canals first to the fact that an order of this house has been passed directing that these papers be produced, and the minister himself has no right to refuse to obey the orders of this house. If there- were any serious objections to be taken to the production of these papers they should have been taken at the time the motion was before the house. No objections were taken. Further, let me refer to standing order 51, which has to do with the papers that may be produced. Among others I find:
.... for returns of petitions of right ....
There has been a petition of right in this case, and I claim that as a member of this house I am entitled to have that petition of right brought down and action taken upon it. Then the standing order goes on:
.... and cases before supreme and exchequer courts. . . .
Let me go further:	It is a principle of
British justice that the crown shall do nothing to prevent a citizen of the country from obtaining justice, and that the crown should in every way facilitate the obtaining of that justice. We have rulings on that point even from the privy council, and that is well laid down.


Robert James Manion: I rise to a point of order. The hon. member has brought up this question and I have answered it. It is true that the order of the house has been passed; I do not question that, but the order of the house does not state when the return must be brought down. The reason I rise to a point of order is that I do not think this is the proper time to discuss this case. If the hon. member will wait, we will have some supplementary estimates for my department and I will be properly prepared to discuss the matter. I did not know it was coming up to-

day and am not fully informed as to the facts. If the hon. member cares to discuss it then I would be quite ready to answer him, but I do not think this is in order on the orders of the day.


Peter John Veniot: I rise to a point of order
having to do with the privileges of parliament.


Pierre Édouard Blondin: When an hon. member
has a complaint to make with regard to the production of papers, the proper time to make the complaint is on the orders of the day.


Robert James Manion: The hon. member has
brought up the question and I have answered him. I do not think he has any right to go on and discuss all the details of the case at this time.


Peter John Veniot: Under your ruling, Mr. Speaker, let me proceed further. Paragraph 450, under standing order 51-


Hon. HUGH GUTHRIE (Minister of Justice):: Did we understand you, Mr. Speaker, to rule that there could foe a debate on this question on the orders of the day? The hon. member rose to a question of privilege. He has stated his question; a reply has been given by the Minister of Railways (Mr. Manion) and now the hon. member seeks to debate the question. If he is not satisfied he has -other remedies; he can move a vote of censure on the minister; he can bring up the matter when we take up the estimates of the Department of Railways and) Canals, but certainly he cannot debate it on the orders of the day.


Pierre Édouard Blondin: I did not understand the hon. member to be entering upon a debate; I understood him to be stating his position more fully. I hope he will not trespass upon the indulgence of the house to any great extent.


Robert James Manion: May I suggest-


Some hon. MEMBERS:: Order.


Robert James Manion: May I suggest, Mr. Speaker, that since this case is about twenty years old now, a few days more cannot make much difference.


Peter John Veniot: It is not my intention to discuss the merits or demerits of the case, but as a -member of this house I wish to have the privileges of parliament safeguarded.


Pierre Édouard Blondin: The rules are quite clear. The resolution came before the house and the house decided that the papers should be produced. As yet they have not been pro-

Canadian Copyright Act
duced, and if they are not brought down the hon. member has a remedy. There is no point now in citing standing orders and rules of the house. I would say that the incident had better be closed for the time being.


Mr. YENIOT:: But surely I can refer to the grounds upon which I am bringing up the matter.


Pierre Édouard Blondin: There is no question as to the right of the hon. member to the production of the papers as the matter now stands. It requires no argument to convince the house, I think, or to convince me that he is entitled to have those papers brought down.


MAFEKING CUT-OFF
[Stage Direction]
On the orders of the day:
Mr. A. L. BEAUBIEN (Provencher):: I should like to ask the Minister of Railways and Canals (Mr. Manion) if the report of the engineers in connection with the Mafeking cut-off will be made available to hon. members of the house before the session closes.


Robert James Manion: No, it will not. It is somewhat lengthy and we have not had time to give it proper study. Probably it wall be available next session.


DEPARTMENT OF IMMIGRATION
[Stage Direction]
On the orders of the day:
Mr. J. L. BROWN (Lisgar):: On July 8 an order of the house was passed:
For a copy of the report made by Mr. W. R. Little, of the Department of Immigration, covering an inquiry held in Glasgow, Scotland, in April, 1930, with reference to complaints made by Mr. A. M. Graham.
That order, as I say, was passed on July 8, but the notice had appeared on the order paper for at least two weeks before that. I knew there was hesitation on the part of the government in allowing that order to pass, but finally it was allowed to pass. Then the Prime Minister, in answer to another question of mine, made the statement that all the documents would not be produced, some of them being of an interdepartmental nature. Up to the present I have received none of the documents. In view of the fact that the government have not intended to supply all the papers in this connection, I am entitled to know as soon as possible just what they do intend to produce; for there might then arise a further question as to whether I was receiving all that I was entitled to. I would ask that whatever documents the government intend to produce be brought down as speedily as possible.


Hon. W. A. GORDON (Minister of Immigration and Colonization):: The information for which the hon. gentleman asks arose, if my reeo'lection serves me correctly, out of an investigation that was conducted by the late government, concerning the dismissal of a civil servant. It is true there has been some delay in making the return, but I can assure the hon. gentleman that it was not because this government was at all hesitant about making it. I will have the matter investigated this afternoon.
INSPECTOR OF CUSTOMS-CHANDLER On the orders of the day:


Mr. MAURICE BRASSET (Gaspe):: Some time ago a motion was passed in the matter of the dismissal of C. E. Thibault of Chandler, as inspector of customs. I should like to know when those papers will be laid on the table of the house.


Hon. C. H. OAHAN (Secretary of State):: I shall have to inquire into the matter. The returns already brought down exceed some 400 in number, nearly three times the number brought down in any previous session of the house except three. An effort is being made to expedite the production of docu ments. Stenographers are kept busy night and day preparing these papers, and I can assure the hon. gentleman that there will be no delay on the part of the Secretary of State. I shall make an investigation.
CANADIAN COPYRIGHT ACT On the orders of the day:


Mr. E. R. E. CHEVRIER (Ottawa):: On
July 2, I asked the Secretary of State certain questions with reference to the copyright situation in Canada, and on July 6, the questions were passed as an order for return. I would impress upon the hon. gentleman the importance of the questions I asked and would request him to press the matter. It is of considerable importance to know whether the copyright law is to be fully enforced in Canada; whether we are to adhere to the Berne convention; and what the status of the law is at the present time. The house will shortly prorogue and we are not aware whether that law is yet in effect. If the Secretary of State will refer to the questions I asked he will see how urgent it is that they be answered. Once more I impress upon him the importance of this matter.
Hon. C. II. CAHAN (Secretary of State): The answer to the question whether or not the amended Copyright Act is in force in

New Westminster Penitentiary
Canada is so obviously within the knowledge of the hon. gentleman, as it is within mine, that that particular question seemed to be of no special importance. The act was passed, it received the assent of the Governor General, and that assent was reported to the house. The other questions involve communications with the Dominion government office in London, the ascertaining from the government of Switzerland what other countries are adhering to the Rome convention, and other questions which can be answered only by information obtained from abroad. I understand that the Under Secretary of State for External Affairs is making due inquiry, and as soon as the information is obtained it will be placed at the disposal of the hon. gentleman.


Edgar-Rodolphe-Eugène Chevrier: Arising out of the remarks of the Secretary of State, I might, if I so desired, raise a question of privilege. I should have reason to resent the inference which may be drawn from his observation that I ought to be aware that the Copyright Act is in force in Canada. I am aware that it is in force, but I am not aware that the revised convention of Berne, to which we were supposed to adhere, and which is an appendix to that law, is in force in Canada. I should be very much interested if the hon. gentleman would say whether Canada is at present an adherent of the Rome convention, and whether the appendix to the act is in force or not. As a matter of fact, I doubt whether he himself knows.


Charles Hazlitt Cahan: There is no doubt that the government of Canada requested His Majesty to adhere, on behalf of Canada, to the Rome convention, some days before the expiry of the time fixed-I think it was June 30. The hon. gentleman asks what other nations have adhered, and we must obtain that information from abroad. It has not yet been obtained. With regard to the Rome convention being in force in Canada, this Dominion has adhered to that convention and this parliament has enacted the legislation which has been deemed necessary in order that the provisions of the convention may be enforced in the courts of Canada.


NEW WESTMINSTER PENITENTIARY
[Stage Direction]
On the orders of the day:
Mr. THOMAS REID (New Westminster):: I wish to direct to the Minister of Justice (Mr. Guthrie) a question based on the reply he made to an inquiry of mine on July 8, when I discussed matters affecting the administration of the penitentiary at New West-

minster. At that time I asked him, in view of statements that had been made with respect to dismissals that had occurred in 192S, during the time Inspector Jackson wras in charge, whether the government intended to hold an inquiry and, if so, whether it would be of the fullest nature possible. The Minister of Justice, in reply, stated that no inquiry had then been instituted. In view of many serious statements that have now reached me concerning the administration of the penitentiary at New Westminster since the present officer took charge, some eighteen men, nearly all returned soldiers, having been dismissed, may I ask the Minister of Justice whether he will now institute a full inquiry into all matters affecting the present administration of the penitentiary.


Hugh Guthrie: The hon. gentleman was good enough
the day before yesterday to mention this matter to me, and he gave me a synopsis of some of the complaints which had reached him in regard to the administration of the New Westminster penitentiary. The matters which he brought to my attention I have referred to the officers of the department in order that they may obtain reports thereon. The whole question of the administration of this penitentiaiy is receiving the consideration of the department, but I am not prepared at the moment to announce any conclusion with respect to the matter.
INQUIRY FOR RETURN On the orders of the day:


Edward James Young: Mr. Speaker, On April 27 an order of the house did issue as follows:
For a copy of all correspondence exchanged between any or all of the Canadian oil refining companies and any department of the government since May 1, 1930, in regard to the importation of oil or oil products.
When can we expect this return?


Charles Hazlitt Cahan: I will make inquiry and inform my hon. friend at the earliest possible date.
RESTIGOUCHE RIVER BRIDGE On the orders of the day:


Hon. CHARLES MARCIL (Bonaventure):: Mr. Speaker, I desire to call the attention of the Minister of Public Works (Mr. Stewart) to a matter of urgency to our district. The provinces of New Brunswick and Quebec have undertaken by orders in council to provide for an interprovincial bridge over the Restigouche river. Is the hon. minister in a position to

Australian Trade Agreement
say whether effect will be given to this agreement? The commencement of this work would supply much needed employment to the district. The bridge has been needed for many .years and each of the two provinces has agreed to pay one-third of the cost.


Hugh Alexander Stewart: Mr. Speaker, the hon. member was
good enough to inform me that he proposed to ask this question. A copy of an order in council was received recently from the Minister of Public Works of the province, of Quebec intimating that that province was prepared to pay a portion of the cost of this bridge. Some time ago an order in council of similar purport had been received from the province of New Brunswick. Under these circumstances the Department of Public Works of Canada is prepared to enter into a discussion of the whole matter with these two provinces.


MARKETING OF WHEAT
[Stage Direction]
On the orders of the day:
Mr. JOHN VALLANCE (South Battle-ford) :: Mr. Speaker, on Monday last I
directed a question to the Prime Minister (Mr. Bennett) and asked if it would be possible for him to produce a copy of the correspondence containing the proposals he made to the tthree western premiers regarding the marketing of this year's crop. The Prime Minister promised to bring down this correspondence at six o'clock of that day, but as yet I have not received it.


Richard Bedford Bennett: Mr. Speaker, I told the hon. gentleman the purport of the letter which had been written to the three premiers. I have a copy of that letter but I neglected to bring it to the chamber because of having told my hon. friend what was contained in the letter. I did not go to the east block that night and the matter did not again cross my mind.


CIVIL SERVICE
[Stage Direction]
On the orders of.the day:
Mr. ARTHUR DENIS (St, Denis) (Translation) :: I should like to ask the government
a question. I regret I am unable to do so in English and receive a direct answer from the Prime Minister, however, I hope that the French Canadian ministers will give me the information either in French or English, as they may think proper.
I wish to know whether the government holds the views that it is preferable to place an employee on the retired list when it is found that his services are not satisfactory.


Hon. ARTHUR SAUVE (Postmaster General) (Translation):: We shall consider the
matter.


AUSTRALIAN TRADE AGREEMENT
[Stage Direction]
Right Hon. R. B. BENNETT (Minister of Finance) moved the second reading of Bill No. 123, respecting a certain trade agreement between Canada and Australia.
He said:	Mr. Speaker, when I moved for
leave to introduce this bill to ratify the trade agreement made between Australia and Canada and Canada and Australia I indicated in a general way what were the provisions of the agreement. The bill now before the house, the second reading of which I have just moved, provides for the ratification of that agreement. I assume that every hon. member has in the meantime probably read the agreement and is familiar with its provisions, but I will state briefly the general principles that governed in connection with its negotiation and execution.
It was realized that Australia produces a large number of commodities which are not produced in Canada and which Canada must import from some other part of the world. It was realized that Canada produces commodities which Australia imports and buys from other parts of the world. The agreement endeavours to provide and does in fact provide that such commodities as Canada produces and Australia requires shall find a favoured market in Australia and that such commodities as Australia produces and Canada requires shall find a favoured place in Canadian markets. That is the first great principle which governed in the negotiation of this agreement.
In the second place it has been provided that where goods or commodities are produced in Australia which would compete with Canadian goods or commodities, then there must be such tariff provisions as will ensure fair competition in Canada to the goods from Australia, and equally, goods produced in Canada which come into competition with Australian goods in Australia shall, by virtue of the tariff provisions, enter into fair competition in Australia with Australian goods.
I need hardly say that the effort made to negotiate this measure of reciprocity in trade between the two countries is further predicated upon the thought that the agreement must be of mutual advantage to both coun-
[DOT]1036
[Stage Direction]
Australian Trade Agreement
tries. If the principles to which I have alluded are applied, obviously they will be of mutual advantage to the communities affected. Unless a trade agreement benefits both countries it is not usually of very much use, but we believe and the Australians believe that the application of these principles will be mutually advantageous to Australia and to Canada.
In 1925 a trade agreement was negotiated with Australia. Under the terms of that agreement Canada received British preferential treatment with respect to four items out of a total tariff of 430 items; under the new agreement Canada will receive British preferential treatment on 415 items out of a total of 433. Under the agreement of 1925, Canada received intermediate tariff treatment on four items; under the agreement now before the house, Canada will receive intermediate tariff treatment on six items. Under the agreement of 1925, the general tariff applied on exportations to Australia in the case of 422 items; under the new agreement, the general tariff applies only to twelve items. In other words, while there were 430 items in the tariff of 1925 and 433 items in the tariff of 1931, we receive preferential treatment with respect to 421 items while the general tariff applies only to twelve items. Under the agreement of 1925, the general tariff applied to 422 items while preferential treatment was given only to eight items. The new agreement indicates a distinct advance and I believe it will commend itself to the judgment of this house and of the country. We are sure that this agreement will expand the trade of Canada in the east as well as in the west and it will afford an opportunity for raw materials as well as for finished products.
If on first perusal there are those who believe that too favourable treatment has been extended to Australia, in the main it will be because they have not perused the agreement with care. No agreement can be of service which does not afford a fair opportunity to Australia, such as we ourselves seek in her markets. I need hardly point out that I received a communication from a friend of mine saying that he was very much alarmed with regard to meats. He said that it was a serious situation, because Australia could produce meat readily. I replied that under the present agreement the rate was one-half cent a pound, but in order to maintain the principle to which I alluded in my earlier remarks, we have provided a duty of three cents a pound, which is four times what it was before with respect to some items, and six times what it was with respect to others.
i'Mr. Bennett.]
With regard to eggs which were on the free list under the old agreement, we have not imported a dollar's worth of eggs since the agreement was made. Now we have provided that there shall be a duty of two cents a dozen against importations except during certain months of the year. We have also made provision with respect to fruits and other products of the tropical sections of Australia. We have provided a market for the lumber of this country. I say frankly, as I have so often said, I have always found it difficult to understand how any bargain could be made with Australia that did not make some provision for a preference being given to Canadian lumber in that commonwealth; but such was not the case. In this agreement, however, that provision is made.
I shall not go through the various items in the schedule to the agreement, because they will be dealt with in committee. The bill follows the course that has usually been adopted in such cases and ratifies and confirms the agreement as it stands. It provides that if there is any inconsistency between the agreement and the act which ratifies it, and any other laws, the provisions of the act and the agreement shall prevail. Lastly, it provides that the agreement shall come into force on a day agreed upon by the government of Australia and the government of Canada as a result of a proclamation to be made by the governor in council in that commonwealth and in Canada as well.
I do not think there is anything I can usefully add to what I have said as to the principles that have governed in the negotiation of the agreement. How they have been applied will be Observed as the house proceeds to consider the agreement in committee. I believe it is such an agreement as will commend itself to the thoughtful and considered judgment of the house. I am already advised that it -commends itself to the business community of Canada in every part of it, and although at first sight there were some items that invited criticism, on further investigation it was found that there was no warrant for such criticism, nothing but a frank recognition of two great principles which have governed the negotiation of an agreement between two British commonwealths. We believe also this is a step towards the development of empire trade on sound lines, not of endeavouring to get without giving nor of giving without getting, but of giving and getting. That principle has governed and it will be the ultimate principle that will govern and prevail with respect to the development of trade throughout the British Empire.
William Lyon Mackenzie King: The bill, the

Australian Trade Agreement
second reading of which has just been moved by my right hon. friend, is one which creates -a new trade agreement with Australia. Inasmuch as the previous Liberal administration was the first to initiate a trade agreement with that particular sister dominion, we naturally take no exception to the underlying principle of the bill. The fact that this bill also recognizes the importance of reciprocal treatment in trade between different parts of the British Empire makes it only the more commendable in principle to those of us on this side of the house, for it will be remembered that it was a Liberal administration which was the first to introduce the principle of the British preference, and the first to make it an empire preference.
My right hon. friend spoke of some things being produced in Australia which could not be produced in Canada, and some things being produced in Canada which could not be produced in Australia. He said that the trade treaty would make possible the exchange of those particular commodities. In speaking on the budget I pointed out that I believed it would be possible for the Prime Minister (Mr. Bennett) in negotiating a treaty in accordance with the principles which he had laid down as those which should govern in trade agreements, to go further in negotiating a treaty with Australia, than would be the case with any other of the sister dominions, and very much further than would be possible in a trade agreement with the mother country, and this for the particular reason that Australia being a tropical or quasi-tropical country and Canada being in the temperate zone, there would, in the nature of things, be more in the way of what might be described as an absolute advantage in production on the part of each one of these countries in its relation to the other with respect to certain commodities than would be the case as regards Canada in relation to any other country. Therefore I am not surprised that my right hon. friend has started with Australia in his effort to make the further trade treaties which he has in mind.
But may I say that when he provides in this treaty for trading to any extent beyond the point of absolute advantage, he runs counter to the principle which he laid down as being fundamental in trade treaties, namely, that nothing should be imported into Canada which can be produced or manufactured in Canada. I think those are the words which the Prime Minister himself on different occasions has given to the house as setting forth his policy in trade matters. He has said repeatedly, that it is our business to see that what can be produced or manufactured in Canada should
not be permitted to be imported from other countries. There is in this treaty a considerable departure from that principle, and, indeed, if there had not been, I question very much whether any treaty could have been made.
My right hon. friend spoke of mutual advantage. I should like to ask him if he can tell me of any exchange that is ever made between individuals that is not believed to be in the nature of mutual advantage. Mutual advantage is of the very essence of exchange. One person parts with what he possesses either in the form of goods or money for something which he .wishes to get in exchange and which will mean more to him as a consequence of his exchange than to retain the commodity or the money which he exchanges for it. What is true on one side of a bargain is equally true on the other. International trade is nothing more than trade between individuals at large so far as one nation is concerned with individuals at large so far as another nation is concerned. All trade is, as I have already said, in the nature of an exchange for purposes of mutual advantage. It is there that there is a real difference between my right hon. friend and those who follow the doctrines which he lays down, and those of us on this side who believe that with greater freedom of trade there will be in the end a greater national development.
My right hon. friend has said that he assumes we have all had an opportunity to study this treaty and that we can discuss its items in committee. The criticism which I have to direct most strongly against the government with respect to this measure is that they have waited until the close of the session, at a time when there are so many important measures before the house, to bring in this particular treaty. There has really been no opportunity at all in the time that we have had since the agreement was laid upon the table, to consider its features in any proper manner. My right hon. friend speaks of four hundred and some odd items in one relationship and some four hundred odd or more in another. The value of the agreement can be estimated only when we discover the true significance of the different items. It may well be that some of them will indicate so far as Canada is concerned a possibility of more advantageous trade with Australia than that which existed before. Unless however we know in all items what the Australian tariff is in comparison with our own tariff we cannot make the comparisons necessary to draw proper deductions. That opportunity hon. members of this house have not had. In speaking the other day my right hon. friend said that he himself could not

Australian Trade Agreement
give the house a statement as to what the Australian tariff actually was, that it was being constantly changed, and that it was being changed at this very time. I have no doubt that some of those alterations will very materially affect the value of the agreement. My right hon. friend has said under the old treaty a very small number of commodities, relatively, were given a preference, while under the proposed treaty a very large number would be given a preference. Whether that preference means anything or not will depend upon the preferential tariff which exists in Australia, and whether it will mean more or less to Australia than to Canada will depend upon whether the preference given under the tariff in Canada is greater or less than that given by Australia to Canada. The Minister of Finance will not deny that the preference which under her customs tariff Canada gives Australia is very much greater than that which Australia gives to Canada under her customs tariff. So far as there is an advantage of one country over another in the exchange of goods or commodities, in this instance the advantage lies with Australia rather than with Canada, May I state further that the height of the preferential tariff in Australia is I believe in many cases quite as great if not greater than that of our general tariff,-certainly as great as that of our general tariff as it existed before it was amended in the special and present sessions.


Richard Bedford Bennett: Perhaps the right hon.
gentleman does not understand; on 400 odd items they extend to us the British preference.


William Lyon Mackenzie King: Exactly. On 400 items there is the British preference, but the British preference in Australia differs from the British preference in Canada. That is the point I am trying to make. Whereas in Canada the tariff rates governing our British preference might be rated-and I speak without reference to any particular item -at something like 20 per cent, that is to say the duty might average 20 per cent, in Australia in all probability it will be 40 per cent.


Mr. EULER:: Much more than that.


William Lyon Mackenzie King: My hon. friend the former Minister of National Revenue (Mr. Euler) says it will be much more than that. In other words the preference granted by Australia when it is examined carefully so as correctly to understand this measure, really does not amount to very much because even the preferential tariff is already virtually prohibitive.
In Australia they have done what my right hon. friend is attempting to do in Canada. They have really made it impossible, even
[Mr Mackenzie King.]
under the British preference, for commodities produced or manufactured outside of Australia to be imported into that country. What the result of that policy has been one has but to study the conditions in Australia to learn. Certainly it would scarcely be proper to refer here to a condition in any other country, particularly that of a sister dominion. The general position of Australia as contrasted with that of Canada is, however, well enough known to enable us to see for ourselves that the policy of making the tariff, both general and preferential, so high that most commodities cannot enter a country thereby restricting trade in large part, is not a policy which in the long run makes for good. In connection with the Australian tariff there is a 50 per cent-is it a surtax?


William Daum Euler: Yes.


William Lyon Mackenzie King: Yes, a surtax, in addition to the tariff which has to be met, that makes the importation of most commodities from this country into Australia almost prohibitive.
There is another circumstance which is most important and which I believe in large part will determine the fate of the proposed treaty, namely, the position of the currency in Australia at the present time. As is generally known the currency of that country is considerably depreciated, and in estimating how far it will be possible for Australia to purchase commodities from Canada we have to take into account the position of the credit and currency of that country. Again I say that I do not think it would be proper to reflect upon conditions in a sister dominion. I mention this matter however simply as one of the outstanding economic facts which has to be considered in discerning the merits of an agreement of this kind. It may be that if the government hopes to derive any real benefit from this proposed trade agreement it will have to extend credits to Australia to enable that country to purchase goods from Canada. If we are to judge from previous experience in giving credits to other countries to enable them to purchase our commodities, I submit that great care would have to be exercised before such a step should again be taken.
My right hon. friend has referred to the lumber industry and has said he could scarcely imagine an effective trade agreement with Australia which did not include a considerable opportunity for the export of lumber from Canada. He frequently speaks of the depletion of our natural resources as one of the terrible results of trade. Lumber is a manufactured natural resource. Following him in his own view I see somewhat of a contradiction in an arrangement which enables us to

Australian Trade Agreement
part more rapidly than we ought with the great natural resources of our forests.


Richard Bedford Bennett: I am sure my right hon. friend knows that, like other things, lumber reaches maturity, and as it reaches maturity it should be cu't and sold.


William Lyon Mackenzie King: I would remind my right hon. friend that in regard to our forests reforestation is a means by which natural resources may be preserved, and the parting in some measure with a natural resource through trade does not always mean its exhaustion, as my right hon. friend on different occasions has sought to make us believe. With respect to lumber however while my right hon. friend is pleased to credit his administration with what has been achieved in connection with that commodity may I say to hiim that he is reaping where others have sown. As he is well aware, for some time past there have been a number of gentlemen in Australia who went from the province of British Columbia with a view if possible so to persuade public opinion as to make possible a larger export of lumber from Canada to Australia. Those gentlemen were active during the time the previous Liberal administration was in office, and had that administration been returned to power I have no doubt that the Australian tariff would to-day be amended with respect to lumber in very much the same way as my right hon. friend has changed it.
These are the points I wish most to make. I have only this further to add, that after all, the benefit of the proposed trade agreement in comparison with the benefit derived from the previous one will 'be known only by results. The previous agreement was negotiated in 1925 and wTe have its effect on record. We know what the total trade of Canada with Australia became after the agreement had been in force and what our exports and imports were. It might be well for me to place on record the figures in that connection so that the house will have before it for purposes of future comparison the extent of the relative benefits derived. If I might be permitted to do so, I should like to place the figures on Hansard in detail. These are the figures:
Trade With Australia Under Australian Treaty, 1926
Total
Imports	Exports	trade1925. .	$2,634,713	$12,035,086	$14,669,7991926. .	3,042,054	15,411,746	18,453,8001927. .	6.296,165	18,965,881	25,262,0461928. .	5,301,618	14,189,446	19,491,0641929. .	3,484,836	19,470,305	22,955,141
*Year prior to treaty.
In other words, comparing the trade figures of 1925 and 1929, our exports to Australia increased $7,435,219, and our imports from Australia increased $850,123. I should like to ask hon. members:	Was not that a good
bargain for Canada? Did it not provide a lucrative market for Canadian goods? Did Canada not gain? As a matter of fact Canada under its previous treaty was exporting to Australia on an average four times as much in the way of commodities as it was importing from that country. That was the extent of the relative advantage under the last agreement.


Richard Bedford Bennett: The right hon. gentleman did not give the figures for 1930 and 1931.


William Lyon Mackenzie King: I have not
the figures.


Richard Bedford Bennett: I have them here.


William Lyon Mackenzie King: As my right
hon. friend is aware, the trade depression which affects the whole world set in in 1930, and I have no doubt it has had its effect upon the trade relations between Australia and Canada as well as upon trade relations elsewhere. But I am giving the figures I have for the time during which the old agreement was in existence under normal conditions.
Now may I say that personally I hope the new agreement so far as Canada is concerned will prove to be even more beneficial than the last. Surely we are all sufficiently one in our regard for the interests of the whole country to wish that any agreement which may be made by any government will be of great benefit to our country, and I do not wish to say a word that will in any way prejudice the success of this agreement. I hope it may prove to be all that the government expects it to be, but "by their fruits ye shall know them," and as the years go by it will be interesting to compare the results of my right hon. friend's negotiations under the views in respect to international trade which he entertains with the results which were obtained during the first few years the agreement, as inaugurated by the previous administration was in existence.


Mr. CAMPBELL:: Might I ask the right
hon. leader of the opposition in what way he considers the depreciated condition of Australian money works to the advantage of that state in that trade?


William Lyon Mackenzie King: Works to the advantage of that state? I think it works very much to the disadvantage of our state.
Australian Trade Agreement

I cannot see that the depreciated currency of Australia is going to help the Canadian who has commodities to sell to Australia. That is the point I was making. It will take much more depreciated currency to buy a commodity in terms of dollars than it would require of a currency that was not depreciated.


Milton Neil Campbell: Is it not as broad as
it is long, is there not that much more of the currency in circulation?


William Lyon Mackenzie King: If currency
was just a nominal affair and we could put whatever denomination we liked on our values, my hon. friend's argument would be correct; but my view is that currency is a measure of value and a medium of exchange, and so far as it is a medium of exchange its real worth in international relations is just what a given quantity will buy in terms of commodities.


Mr. G. G. COOTE (Macleod):: Mr. Speaker, so far as I could hear the statement of the Prime Minister, I feel that very little exception, if any, could be taken to the basis which he says underlies the negotiations for this treaty. The number of items which have received the benefit of the Australian British preferential tariff is not necessarily any indication of the real worth of the treaty. I believe that on many items the Australian British preferential tariff is so high that we cannot expect to sell any goods to Australia.
I have not had time to secure the Australian tariff and go into the details of these different items, and I think we must wait until the committee stage is reached before we can determine how mqch value the British preferential tariff on any of these items will be to Canada. I hope the agreement will be just as beneficial to Canada as the Prime Minister seems to expect, but I think there is a tendency to overrate the advantages likely to accrue to Canada. In this connection I desire to quote from the Einancial Post of the 18th instant. I am citing this paper because it is considered a very reliable financial journal. Dealing with the new trade treaty with Australia it says:
The Australian treaty opens up, for the first time, substantial opportunities for many classes of Canadian producers in Australia. Canadians, in many items, are put on a parity with British manufacturers. Canada has a geographical advantage in relation to Australia which will be of help in some lines, unimportant in others.
Yet too much must not be expected of the treaty at the moment. Australian purchasing power is at a low ebb; Australian exchange 
is subject to a large discount. This penalizes importers by 30 per cent and gives to Australian exporters a corresponding advantage.
That is the point I want to emphasize for the moment, particularly the concluding words:
This penalizes importers by 30 per cent and gives to Australian exporters a corresponding advantage.
That corresponding advantage will amount to 30 per cent. Looking at schedule A of the treaty for a moment I find the first item mentioned there, meat, fresh, namely: (a) beef and veal, 3 cents per pound.
Assuming for the sake of argument these meats would be worth on the average 10 cents a pound when imported into Canada, the premium which the Australian exporter would receive would amount to 3 cents a pound, which would be equivalent to the duty that we have placed against beef and veal coming from Australia. That is putting us on a free trade basis so far as those two meats are concerned. On (b) lamb and mutton, the duty is 3 cents per pound. Lamb and mutton, I think, would have a slightly higher value than 10 cents a pound. But assuming for the moment that the value would be only 10 cents a pound, the exporter frqm Australia would have a premium of 3 cents a pound on the present rates of exchange The next item on the schedule is canned meats, poultry or game; extracts of meats and fluid beef, not medicated, IS per cent ad valorem. Clearly the 30 per cent advantage enjoyed by the Australian exporter will give him a sufficient premium to more than pay the tariff; it is practically double the tariff placed against canned meats. Coming down to eggs in the shell, they are free during the months of January and February; British preferential tariff during the other months of the year. That rate, I believe, is 2 cents a dozen. If these eggs have a value of even 10 cents a dozen when landed in Canada, the premium enjoyed by the Australian exporter will be 3 cents a dozen, which is more than the tariff placed against the Australian exporter to Canada. Then take cheese, item No. 17, on which the duty is 1 cent per pound. I suppose cheese should be worth at least 10 cents per pound wholesale, so the premium which the Australian exporter would enjoy would be 3 cents per pound, while our tariff is only 1 cent per pound. Then we come to butter, which is a very controversial item. Butter carries a duty of 5 cents per pound. I take it for granted that butter coming from Australia would be worth at least 20

Australian Trade Agreement
cents a pound, so the premium of 30 per cent enjoyed by the Australian exporter would be 6 cents a pound, which would more than pay the duty.


Richard Bedford Bennett: But the five cents per
pound duty would have to be paid in Canadian money.


George Gibson Coote: Then you could deduct a
small percentage from the six cents; it would leave at least five cents per pound. Then we come to hops, and I find that in the calendar year 1929, hops imported had an average value of 22 cents per pound, so the premium of 30 per cent on hops would practically pay the duty of six cents per pound under this tariff.
I do not wish to deal with any of the other items in detail at the moment, since we will take those up in committee, but I do want to point out that this premium which is enjoyed by the exporter in Australia is going to place him practically on a free trade basis in exporting goods to Canada. I know many members of the house think the advantage enjoyed by the Australian exporter is a myth, and for their benefit I should like to quote very briefly from a speech delivered in this house in 1922 by the present Minister of Trade and Commerce (Mr. Stevens) in dealing with the budget of that year. The minister was referring to the question of depreciated currency and was urging upon the then Minister of Finance the necessity for placing a special duty on goods coming from countries whose currency had depreciated by more than 50 per cent. Of course the Australian currency is only depreciated at this moment by about 30 per cent.


Henry Herbert Stevens: No, 24 per cent.


George Gibson Coote: The last figure I saw was
30 per cent, but whether it is 24 per cent or 30 per cent the same principle applies. I quote from the remarks of the Minister of Trade and Commerce as they appear in Hansard for June 8, 1922, at page 2642:
Now, I come to the next point, and that is the depreciated currency clause passed in amendment to the Customs Act last year. It is not necessary for me to go into the details of what it was; it was in effect simply this: That in any country where the currency had depreciated below a point of 50 per cent of par, the valuation for duty purposes upon goods imported from that country should be figured at a rate not less than 50 per cent.
Then he went on to deal with the German situation and to show that the tariff was very inadequate. Later on he referred to a statement made by the then member for West York, Sir Henry Drayton, as follows:
.... let me refer to a statement made by the hon. member for West York (Sir Henry Drayton), that this constituted free trade with Germany. I want to say to the house that it does not constitute free trade with Germany; it constitutes paying a premium on German imports.
I agree with what the hon. member said at that time. Then he went on to quote authorities to prove that this really was paying a premium. I do not want to take up too much of the time of the house, so I am only quoting very briefly from the remarks of the minister at that time. He went on to quote Doctor Melchior, a very prominent German economist, from an article which had appeared in the Manchester Guardian a short time previously, as follows:
The international value of the mark has a natural connection with its purchasing power in Germany,_ which in turn depends on inflation. The internal purchasing power of the mark .... is at present (April, 1922), between two and three times its international value. . . .
Then the minister said:
I want the house to follow very closely these last few words:
And he concluded the quotation from Doctor Melchior:
The falling currency has, it is true, brought apparent prosperity to German industry by means of a premium on exports-
Then the minister proceeded to quote further:
-which at the same time cripples the industries of the competing countries.
Doctor Melchior is an outstanding German economist who was very familiar with the German situation. There is no question but that he stated the case correctly; I am stating it correctly to-day, and the Financial Post is stating it correctly when it says the present rate which has to be paid in Australia for foreign exchange is creating a premium on the exports of that country which at the same time is crippling the industries of competing countries. Then the minister proceeded:
This is not my statement; this is not the statement of some wild-eyed, prejudiced person seeking vengeance on Germany; this is the statement of the highest economic authority in Germany who was at Versailles, who was the head of their economic agents and experts, and who has been at the head of almost every one of their conferences. Let me emphasize the words of Doctor Melchior: "Which at the same time cripples the industries of competing countries."
Then the minister went on to give some very good figures showing how impossible it

Australian Trade Agreement
was for a Canadian manufacturer, or a British or American manufacturer, to compete with Germany, and he proceeded to say:
Now, this is what I want to emphasize. The Canadian manufacturer to-day is manufacturing at a lower cost and under-selling both the British and the American manufacturer of this particular article.
He was referring to some kind of knife, and I want to direct attention to these words:
Why should we ask him, however, to compete with such utterly unfair competition as that to which I have referred with this depreciated currency?
I am not suggesting for a moment that the depreciated currency of Australia to-day compares at all with the depreciated currency of Germany in 1922, but I say that the same principle is involved when we have to compete with goods coming from Australia. Just on that point I should like to quote from an unquestioned authority in regard to this matter, in order to prove that the Australian exporter enjoys a premium. A week or two ago we had before the agricultural committee Mr. Richardson, a very prominent grain exporter of western Canada and a member of one of the oldest grain firms in Canada. He was asked the following question:
Mr. Campbell: Would you suggest, then, that if the Canadian currency were depreciated to the extent that the Australian is, that is if the world's exchange were against us, would it put the Canadian farmer in the preferred position?
Mr. Richardson:	If our exchange were
depreciated, our wheat would be higher by probably 30 per cent.
A little later I asked Mr. Richardson this question:
Mr. Coote: Just to clear up that point, Mr. Richardson, is it not a fact that Australia has largely taken the oriental market from us on account of their exchange situation?
Mr. Richardson: Undoubtedly.
Mr. Coote: And has it not made it easy for the Argentine to take our market away from us?
Mr. Richardson: Undoubtedly.
At the moment, Mr. Speaker, I am not objecting to this treaty even though Australia has a depreciated currency. I want to wait until we have heard all the items discussed in committee so that we may see their true significance, but I do suggest that here is good evidence of the beneficial results which would come to Canada if we would suspend the redemption of our notes in gold', as was done during the war. No doubt our currency would depreciate to some extent; I would not predict just how far it might go, but the value of our dollar should be allowed to depend upon our trade balance and not upon the gold standard. If that were done there is

no doubt that the price of our wheat would be advanced by 15 cents a bushel without cost to the government of this country, while the debts of all the producers in Canada would be materially lessened.
I do not wish to take up more time in dealing with this point, but I should like to emphasize that it will be difficult Bor us to get any advantage from this Australian treaty unless our currency is somewhere near par with Australia's. If we would allow our currency to depreciate to the point to which the Australian currency has depreciated, so that we might be on a level with that Dominion, we could sell her more goods and at the same time secure a distinct advantage when we came to export our commodities to any country in the world1. I hope that before the treaty is in force very long the government will see the wisdom of putting us on a parity with Australia in the matter of currency. Let us put a little more money into circulation even if our dollar does depreciate somewhat, so that we may enjoy the same advantage that Australia now enjoys in the markets of the world. Wheat is Canada's greatest item of export. We cannot export any to Australia, that dominion and the Argentine being our greatest competitors, apart, possibly, from Russia. Australia is taking the oriental market from us, according to Mr. Richardson, and the Argentine is largely taking away the European market. There is only one way to prevent them from taking those markets away from us and that is to sell wheat at a ruinously low price. I submit, therefore, that it would be to our advantage, if we are to derive any benefit from	the	treaty, for the	government to	seethat	we	are placed on	something like	an
equal footing with Australia so far as currency is concerned.


Hon. J. D. CHAPLIN (Lincoln):: In reply to the hon. member for Macleod (Mr. Coote), who	has	just concluded,	I would point	outthat	our	great difficulty	in this country	in
making a treaty with Australia is the fact that they already buy from us, and have bought for years, ten or fifteen times more than we have been buying from them. That is one of the difficulties that beset any government in Canada in trying to make a treaty with Australia. I pointed that out when the last treaty was made.
I shall have a word or two to say with regard to the currency question, but before discussing that subject I might refer to the remarks of the leader of the opposition (Mr. Mackenzie King). As usual, the opposition has to oppose, although the right hon. gentle-

Australian Trade Agreement
man's criticism took a mild form. He spoke of this treaty having been brought down at what he terms the close of the session. What a memory he must have. Do you know that when the first treaty with Australia was brought down it was brought down on the 25th day of June-I believe it was the 27th- and that we got through before the first of July? And on the 25th of June we had not seen the treaty; all we were dloing was discussing the resolution. So much for that.
As regards this treaty, while I am not entirely in favour of it, I will say that it is altogether superior to anything we have ever had.	I will pay the hon. member who
brought it in that compliment. It might be just as well to take a glance at the old treaty. That treaty was bound to fail. It was always headed for disaster, and disaster overtook it. And if there was any one thing more than another that caused my hon. friends opposite to sit on that side of the house it was that Australian treaty. One reason why I was not keen about the new one was that I thought possibly the same thing might happen to us. I feared it, I can tell you that.


William Daum Euler: Do you still?


James Dew Chaplin: I am not afraid to say
so at any rate. The first treaty was brought to this country by a great friend of my own -a personal friend-the Hon. James A. Robb, a canny Scotchman, sane in everything he did. I do not say that Mr. Robb was a brilliant man, but he possessed an unusual fpnd of good, sound common sense.
An hon. MEMBER. Hear, hear.


James Dew Chaplin: I am glad that one hon. member applauds. The applause was not very loud.


William Daum Euler: It is taken for granted.


James Dew Chaplin: But I know what I am
talking about. That gentleman was a keen observer of affairs. The great trouble with hon. members whom I see across the way, and who formerly sat on the treasury benches, is that they did not support Mr. Robb in the treaty he made. He went to Australia and made that treaty and they never supported it. What was the history of that treaty? The treaty was made in September. It was brought into this house in the following June, the house having been in session from January; but hon. members were afraid to bring it down. The treaty had actually been passed in the Australian house and it never got into this one at all. Why? Simply because they got cold feet. Had the gentle-
22110- 257
men who were supporting Mr. Robb, or should have been supporting him, taken his advice in the first place they would have brought in a treaty regarding which there would have been little complaint. But they changed the treaty in the process of making it and brought in one which was different from the one he made. That was the cause of their trouble. My hon. friends here have avoided that to a great extent, and I give them credit for it.
There are some things in this treaty which I do not like, and I am not afraid to talk about them-not a bit. Criticism may be a good thing; it may be a good thing for me also. As I have said, that first treaty was in the Australian house while this house had no information about it. We never got it until June. What we did learn about the treaty we learned from Melbourne or Sydney or through New York. That was the situation. How then could you expect any treaty to be successful based upon any such arrangement as that: And when the treaty was brought down it was referred to as a sort of aside in the speech from the throne. As I say, we never saw it until late, and when it did get here it was an entirely different treaty from what had been originally made. That was one of the causes of its failure.
Now, coming to the present treaty, I do not intend to discuss the item. I am getting too old now to enter into a fight-


An hon. MEMBER:: Oh, no.


James Dew Chaplin: I have lost my grip and vigour.


William Daum Euler: No.


James Dew Chaplin: At any rate, I do not want to get into any scrap. I shall therefore confine myself, so far as this treaty is concerned, to my own district and my own constituents. They are the people to whom I am responsible and for whom I intend to appeal. I wish to quote briefly from the remarks of Mr. Robb when the previous Australian treaty was brought in. Mr. Robb was a gentleman whom I always very highly respected. He was always a great friend of mine, and I want to let the house know how he approached the question. When somebody thought that butter would be of some consequence in the treaty he had no fear. At page 4647 of Hansard, of June 22, 1925, he said:
If you will allow me to make a personal reference, may I pause to say that next to that of the hon. member for South Oxford (Mr. Sutherland), I think I represent the largest dairy constituency in Canada. The census shows more milch cows in that con-


William Daum Euler: Mr. Speaker, may I first of all in the very brief remarks which I propose to make congratulate the hon. member for Lincoln (Mr. Chaplin) both on the tone and on the material of his remarks. While I know nothing about the grape growing or wine making industries-


An hon. MEMBER:: Does the hon. member know anything about wine?


William Daum Euler: That question is much too intimate. While I know nothing of those industries, I am quite willing to accept as fact almost everything my hon. friend said. I must, however, take exception to one statement he made, and that is that he feels he is growing somewhat old and has lost something of his vigour. Those of us who sit on this side must contradict him on that, although he has perhaps mellowed nicely in his method of presentation. My hon. friend also spoke of criticism from the leader of the opposition (Mr. Mackenzie King). He stated that the criticism was mild, but perhaps to some extent it was criticism in opposition to the treaty. I do not quite agree with my hon. friend in that regard. I may state in what I have to say, there is no real criticism of the treaty, because I feel that after all it is a matter of trial and test and we cannot say a great deal as to its merits until it has been thoroughly tried out. Possibly next year or the year after we may have something more definite to say.


James Dew Chaplin: I criticized your treaty when you first made it.


William Daum Euler: Quite so. By the way, I did not make it. I agree entirely with the Prime Minister (Mr. Bennett) in regard to the two principles which underlie the treaty, the most important being that a treaty to be successful must be mutually beneficial. Let me say frankly that upon looking at the treaty in a more or less hurried way-and it is impossible to ascertain all its bearings- it appears to be a pretty good production.
I am not going to say, as the hon. member for Lincoln did, that it is superior to any other treaty we have had. It may be true that it is, and it would be rather remarkable if, after the experience which we have had, some advancement might not be made along this line.
Possibly it would be a fair criticism that the Minister of Finance (Mr. Bennett) in the statement which he made this afternoon was rather unfortunate in making the comparison which he did, and that comparison which he made is really my only reason for saying
22110-237J
what I am about to say. He stated-and I think I am quoting him correctly-that whereas under the old treaty there were only some four or five items which enjoyed the British preference, this treaty gives the British preference to some 422 items. I am afraid the inferenee which he expected-perhaps he did not-the public to draw from that was that exactly to the extent of the figures which he gave the present treaty was better than the former one.


Richard Bedford Bennett: What I was endeavouring to convey was that the old treaty contained that limited number of British preferential items as applicable to Canada, while the new treaty contained some 400 or more British preferential items that were applicable to Canada.


William Daum Euler: My hon. friend is just confirming what I said a moment ago. What I object to is that the inference that ordinarily any man would draw from that statement is that this treaty is better than the former one as 422 is greater than four.
I wish in a general way to take objection to that method1 of making a comparison. It is unfair mathematically to make it in that way, for several reasons. In the first place it will be admitted that the four items which enjoyed the British preference under the old treaty were at least effective items; they bad some force. The 422 items in the present treaty are not in the same category. As a matter of fact, some of the commodities comprised in those 422 items are absolutely prohibited from entering Australia and they should be taken out of the picture entirely. Again-and I think some exception has been made to this by the leader of the opposition and it is very true-some of the items which under this treaty enjoy the benefit of the British preference, have such a high rate of duty even under the British preference, that I cannot see how Canada under those circumstances can export those commodities to Australia; and those items should disappear from the picture. Lest I say something which I cannot substantiate, I .might quote a number of items that, when the Prime Minister was speaking, were taken just at random from the table in the votes and proceedings.


Richard Bedford Bennett: The hon. gentleman knows I do not desire to interrupt him. The point is this: if they do import any goods of that kind or quality, necessarily Canada is in a better position than othe^ countries to export them to Australia. That was the point 1 was making

Australian Trade Agreement


William Daum Euler: But my point was this, that the four items on which we had a preference under the old treaty, we were in a position to export to Australia, whereas some of the 422 items on which we are now supposed to have a preference, are of no practical use. The Minister of Trade and Commerce (Mr. Stevens) shakes his head.


Henry Herbert Stevens: I think my hon. friend is overstating the case; that is all.


William Daum Euler: I have no intention of overstating the case. I am endeavouring to make a fair comparison. Some of those commodities cannot be imported into Australia because they are prohibited, and others have under the Australian tariff such a high rate of duty still that for all practical purposes they may be wiped out of the picture. It may be that in time to come, if the treaty remains in force, those items may be of some value. Let me take a few items from the list and I shall be glad to be corrected if I am wrong. In regard to certain articles of clothing, the Australian tariff under the British preference still remains 60 per cent plus a surtax of 50 per cent of that 60 per cent, or a total tariff of 90 per cent. Is it conceivable that Canadian manufacturers of that particular kind of clothing can hope_ to sell any goods in Australia whale the tariff is 90 per cent, unless nothing of that _ type of clothing is made in Australia and it has to be imported? As regards boots and shoes, the Australian tariff under the British preference as against Canada is 45 per cent, plus 50 per cent of that, or another 22i per cent, making a total tariff of 67i per cent. If I am wrong in this I shall be glad if the Minister of Trade and Commerce will correct me.
The next item I shall take is that of cordage and twines which, by the way, are made in my own town, and as the hon. member for Lincoln said, we are all concerned about the industries in our own cities.
Australian tariff British preference 40 per cent 35 per cent 65 per cent 55 per cent 40 per cent
50 per cent

Article
Cordage and twines	
Paints	
Switches and fuses	
Certain kinds of machinery..
Belts and belting	
plus 50 per cent of the 40 per cent, or a total of 60 per cent.
Furniture	* [DOT] [DOT] [DOT];	[DOT] [DOT]
plus 50 per cent of that, or a total tariff of 75 per cent.
The furniture industry is a very large one in my constituency.
Australian . tariff British
Article	preference
Gramophones	 59 Per cent
plus 50 per cent of that, or a total tariff of 75 per cent.
These are also made in my riding.


Henry Herbert Stevens: So far we have not even
had British preferential rates and my hon. friend is simply selecting certain abnormally high rates and wholly ignoring the fact that last year $277,000,000 worth of goods entered Australia under the British preference from the United Kingdom. Now we have access to the market which bought those goods.


William Daum Euler: I am not ignoring that at
all, and I am quite willing that my hon. friends should make out a good case. I hope they can because I want to see Canadian manufacturers and producers and the people generally derive benefit from this treaty. This is not factious criticism.


Henry Herbert Stevens: My hon. friend is inferring we are being penalized under the British preference.


William Daum Euler: When the 422 items were
mentioned, the public will gather, I believe, that we have a preference that is of some use to us in the exportation of all these goods to Australia. I have picked out only a few; there are many others-


Henry Herbert Stevens: It is of as much use to
us as to anyone else.


William Daum Euler: If these items are not of
use to anybody, they should not be included in the 422 given for purposes of comparison.


James Dew Chaplin: Were my hon. friends
not in a similar position when, under the Dunning budget, they counted them all up?


William Daum Euler: But Mr. Dunning made certain explanations.


Mr. MOTHERWELL:: Mr. Dunning made the explanations in the budget.


William Daum Euler: 
Richard Bedford Bennett: That is the reason for
article IX.


William Daum Euler: I do not remember the
terms of article IX, but I presume it is the article in the agreement which states that upon giving three months' notice any particular item may be removed from the treaty. I was going to add-


Mr. RYCKMAN:: Unless the countries
agree.


William Daum Euler: Unless the countries come
to an agreement in the interval. I was going to inquire whether the dumping duty will be applicable when that item at the end of the three months' period stipulated in the agreement goes back to the general tariff list.


Richard Bedford Bennett: Then it is treated as
any other general tariff item, and the dumping act would apply.


William Daum Euler: It has been said that the
butter item in the old Australian treaty was more responsible than anything else for the defeat of the late administration, and my hon. friend from Lincoln (Mr. Chaplin) has said that in the present instance probably the same might happen with regard to wine. I do not know, but I should like to point out that under the late administration no butter came into Canada from Australia, because while we had a tariff of only one cent per pound against Australian butter we did apply against them the six cents which they received under the Paterson scheme on butter for export. That really meant a tax of seven cents per pound, as the dump could be applied. As I said no butter came into Canada. Under the agreement now before us no dump can be applied. I should like to know-I suppose the information will be given-whether under this agreement the Australians are going to keep in operation their Paterson scheme; because if they do and the dump cannot be applied that six cents cannot be considered at all. Under the old agreement there was a one cent duty and the six cents under the Paterson scheme, making a total of seven cents against Australian butter,^ whereas under the present agreement there is a tariff of only five cents against Australian butter. It is possible that my hon. friends opposite may slip out of office on the butter question because there is still a difference of two cents a pound as compared with the duties under the late administration.


Henry Herbert Stevens: The Paterson scheme is down to 2% cents net.


William Daum Euler: Yes. The treaty states
specifically that either country may apply special duties, although dumping duties are excepted. I am free to say that I do not understand the provision and I should like the Minister of Trade and Commerce (Mr. Stevens) or the Minister of Finance (Mr. Bennett) to make an explanation, if it is worth while explaining.
In conclusion may I say, not by way of criticism, that I am sorry it was not found possible to place on the preferential or special list some of the important commodities we produce in Canada. Many commodities remain under the general tariff, which is so high as to prohibit our getting into that market. I refer particularly to such commodities as Canadian flour and agricultural implements. Perhaps my hon. friend from Brantford City (Mr. Ryerson) would be interested in this matter. Rubber automobile tires are manu-

Australian Trade Agreement
factured to a very large extent in the constituency I represent, and I regret it was not found possible to have such commodities placed on the preferred list. Even paper, apart from newsprint which is manufactured in Canada, is still on the general list.
I do not know whether my remarks will be regarded as a serious criticism of the new treaty. They are not, however, so intended. I hope the treaty will turn out to be just as advantageous to Canada as my hon. friends expect. If it does, I shall be one of the first to congratulate them.


Mr. A. W. NEILL (Comox-Alberni):: Mr. Speaker, I wish to deal with the matter now before the house from the point of view oi the province of British Columbia. The present treaty greatly concerns that province and I wish quite heartily to congratulate the government and more particularly the Minister of Trade and Commerce (Mr. Stevens) because I understand he was largely instrumental in bringing about the agreement now before us. I should like particularly to compliment him, as others have not done so, on that section' of the treaty-I think it is article IV- in which by a rather ingenious method he has managed to get around the trouble concerning freight charges. His action will result in increased business for the railways of Canada and the port of Vancouver. Of course it is easy to criticize, but we must remember that the treaty was not formulated by the Minister of Trade and Commerce alone but appeal's before us as a result of negotiations with another man who was probably equally alert in looking after the interests of Australia. Necessarily, the present agreement is a compromise. I believe it will materially benefit the fidhing, lumbering and newsprint industries in British Columbia. I regret only the fact that the coal industry of that province could not have received the same beneficent treatment. I might say that while the press of British Columbia is largely Conservative all papers have struck a very pleased note concerning the completion of this treaty. There may be certain industries less vocal at the present time, and as time goes on undoubtedly they will indicate where they may think their interests, if not actually hurt, have at least not been looked after.
One fact which must militate against the general success of the treaty is the one referred to by other hon. members, namely, that on a great many items Australia has enormously increased her tariff. It has been stated that the British preferential rate we get is so high as to be possibly of very little
[Mr. Euler.l
benefit. I might give an illustration. It is the first item on one of the statements issued by the hon. Minister of Trade and Commerce in Votes and Proceedings, No. 83. On that first item we get the British preference, but the British preference is 60 per cent, then there is a surtax of 50 per cent on top of that, and a primage tax of ten per cent as well; then in addition there is a 30 per cent preference due to the depreciated currencymaking a total protection of about 125 per cent. The hon. Minister of Trade and Commerce says the currency depreciation is only 24; I am figuring it at 30. A few weeks ago it was 35, and under the distressful conditions of Europe we do not know what it may be from one day to another in the future. We all hope some day it will come back to par, but that may be a long time away.
To deal with some of the interests individually. The lumber interests of British Columbia have expressed themselves as being entirely satisfied with the treaty, and that being the case, it hardly becomes me to make any criticism of it. But there is an item to which I should like to call attention. I note a preference is given on redwood, which is entirely a Californian product; coupled with it is red cedar, which is our product. I notice the preference given California on redwood and Canada on cedar is 2 shillings out of a total of 4 shillings per unit; in other words, 50 per cent. But the bulk of our wood, the woods we are most anxious to get sold in Australia, are Douglas fir, hemlock and spruce. Hemlock and spruce, especially hemlock, are regarded as cheap and inferior timber. We find that we are to get a preference on that in another item, and the preference pro rata is very much less; for instance it is 2 shillings on 12s. 6d., or something like 16 per cent. There may be but little force in the suggestion, but presumably the inducement on the part of the Australian would be to buy the better wood on which a lower tariff is placed. At any rate the British Columbia timber people have expressed themselves as being highly pleased with the treaty-and they ought to know.


Henry Herbert Stevens: Our cedar has the same
rate as redwood, and it is the competing wood.


Alan Webster Neill: Australian Trade Agreement


Henry Herbert Stevens: There is another clause in the letter asking that the duty be restored. Will the hon. member read the rest of the letter?


Alan Webster Neill: I will read it all-I wanted to save time. The letter continues:
Canada is well able to supply all her own requirements of eggs. We have more at the present time than we can use, and could produce a great many more if a profitable market could be found. It is entirely unnecessary to bring eggs here from any other country.
Here is the clause my hon. friend refers to:
We respectfully request that, in the interest of the poultry industry of Canada, the section of the agreement which provides for the free entry of Australian eggs entering Canada during January and February, and the reduced duty during the other months of the year, be cancelled, and the rate of duty be maintained at 10 cents per dozen. If this is not done, in our opinion the poultry producers here will not be able to carry on.


Henry Herbert Stevens: At this point I should like to ask my hon. friend a question. How are we possibly jeopardizing the egg producing industry when, since 1023, we have not imported a single egg from Australia although during that period eggs could have come in free during the whole year? Now we have reduced the free period to two months and we are told we are ruining the egg industry. Those are the facts. My hon. friend read something about restoring the duty to 10 per cent, but there was no such duty.


Alan Webster Neill: This letter asks that Australia be put on a par with other countries and pay 10 cents per dozen. My hon. friend spoke a little too soon; I did not make the statements to which he referred1.


Henry Herbert Stevens: No; I say, how can the gentleman who wrote that letter which my hon. friend has just read justify the statements he has made in view of the facts I have recited?


Alan Webster Neill: I was going on to say that I was well aware of the facts just stated by my hon. friend; I knew there was no duty on eggs at all under the last Australian treaty and that of late years practically no eggs have come into Canada from that country. I quite admit that, but I was merely stating that this association, which represents practically the entire egg industry of British Columbia, have a right to have their views put on record. I was going on to say that while I quite admit the force of the argument of the minister, there is this to be considered: Possibly this may operate to give them a greater advantage. There is the fact of the

reduced currency, which makes 20 cent eggs worth about 26 cents, and the further fact that the government have taken power to remove the dumping clauses, with which I will deal in a moment. Mention has been made of the Paterson scheme; the Australians are very fond of that sort of bonusing, and it applies to a great many articles other than butter, although we have not perhaps come in contact with them as yet. It is quite possible that Australia may take advantage of the removal of the dumping duty to extend something like the Paterson system to other articles, such as eggs, which would permit them to enter this country. There is a certain amount of danger in that regard, but I frankly admit that if anything of the kind happens it will be because of the lack of a dumping duty and because of the depreciated currency rather than because of the reasons advanced in the letter from which I have quoted although, if they export 5,500,000 dozen eggs to England it is quite obvious they will be anxious to enter a market so much closer.
I next come to butter, which leads me to the consideration of article IX of the treaty, which agrees not to enforce a dumping duty. It may be presumption on my part, but I cannot think that this will have the beneficial effect anticipated by the Prime Minister in his remarks the other day. I think it is a very serious matter indeed, and I am afraid it will work out in this way:	The idea was
that if there were one special article in connection with which some grievance arose, such as butter in the case of the New Zealand agreement, we would not have to cancel the whole agreement but could strike out the preference on that particular article without prejudice to the rest of the agreement. Let us look at it from the standpoint of the New Zealand agreement. Once you did away with the preference on butter you could have torn up the whole agreement, as far as New Zealand was concerned, and if we had not cancelled it no doubt New Zealand would have done so. Even supposing that were not so and you took one article and put it under the general tariff; later on you took another article and did the same thing, and how long would it be before the other party to the treaty would say, "This is not good enough; if you are going to pick out our best commodities one by one we will have to do the same thing, and there will be no treaty left." I believe that may be the way it will work out.

Australian Trade Agreement
For years past I have listened to the Conservative party stressing the need not so much for dumping clauses, since we always had a technical dumping clause, but for what we might call the safeguards which rendered it possible to impose the dumping duty. The Conservative party demanded those safeguards from time to time very vigorously, and last September we saw those clauses enacted. I voted for them, believing they were required, but I rather regret my action after having seen how readily, how easily and above all how secretly it can be applied. There is no publicity at all; it simply appears in the Gazette, and how many of us take the Gazette? When you find your goods hung up at the border there is not much time left in which to look up the Gazette, or perhaps after having contracted for goods in the old country you find that the dumping duty is applied. It is not such a nice arrangement as I thought it would be.
Be that as it may, it is the settled policy of the Conservative party to have these safeguards, and we have them. Now, at a time and under conditions when, if ever, they would be most useful and most required, they have been taken away absolutely; we have legislated ourselves out of our rights. There was never such a thing done before; at least we always had the frame-work for a dumping duty, but now we are not going to be allowed to employ it under this treaty. I am afraid it will work very much against our interests. We know that the Australians are always changing their tariffs; they are changing them at the present time and they may do so at any time in the future. While, perhaps under a gentleman's agreement, the dumping duty might never be put in operation, it is a wonderful safeguard to have in the background. It was the means of remedying the butter situation; Australian butter would have been rushed in here but for the fact that we were able to keep it out through the dumping duty. It was bonused under the Paterson scheme, although I do not think it was quite as much as my hon. friend from North Waterloo (Mr. Euler) has said, because there was a 15 per cent restriction. At any rate, we took advantage of the dumping duty, having regard to the Paterson scheme, to stop Australian butter coming into this country.
As my hon. friend from North Waterloo has said, under the old treaty the Australian butter exporter had to pay a total of 7 cents. Supposing he sends a pound of butter to Vancouver which is sold in the open market
for 30 cents per pound in competition with British Columbia butter. Under the old treaty the Australian would have received 23 cents, and that difference was sufficient to stop the importation. Under the new duty he will get 30 cents less 5 cents duty, and in addition he has the advantage of a depreciated currency which at 30 per cent would be 8 cents, so his pound of butter would realize him 33 cents as against only 30 cents to the British Columbia man. I know my hon. friend will say 30 per cent is an excessive statement of the fluctuation of Australian currency, but it was 35 per cent a few weeks ago and may be 36 per cent again, so I think 30 per cent is not excessive. If the currency improves, of course, that condition will not obtain, but we have no knowledge and in fact very little hope, I think, that the Australian currency situation will improve in the near future.


Richard Bedford Bennett: On the contrary, there is every reason to believe it will improve.


Alan Webster Neill: I am glad to hear that, but after all we are dealing with things as they are and we cannot make treaties on hope.


Henry Herbert Stevens: The Australian people
have .been making great efforts to that end, which have been highly successful.


Alan Webster Neill: Next I should like to tell the house how the Australians regard their prospeets with reference to butter. They may say, "No butter came in before and none will come in now, so what are you making such a fuss about?" Here is what the butter exporters of Sydney, New South Wales, say:
Butter exporters see a large and profitable market. . . .
Here is another quotation:
"Butter exporters have every reason to be satisfied," said the chairman of the Victorian section of the Australian dairy produce export board.
If he has reason to be highly pleased he has some knowledge which we do not possess, because the treaty cannot do him very much good unless by way of the lack of the dumping duty and the fluctuation in the currency. 'Then we have New Zealand, within three days sail of Australia by fast passenger steamer equipped with cold storage facilities. They see that they are paying a duty of 14 cents a pound on their butter coming into Canada while, in a country around the corner, there is a rate of 5 cents, which is in reality a bonus of 2 cents, if you take the depreciated currency into consideration. Are they going

Australian Trade Agreement
to stand for that? There is a duty on New Zealand butter going into Australia, but they may get around that by establishing branch factories or shipping the cream to Australia.


Richard Bedford Bennett: Direct shipments, the
produce of Australia.


Alan Webster Neill: But butter is a product of
Australia if it is manufactured in that country from cream. It is a manufactured article, the other being the raw material. Knowing the alertness of New Zealand, and how anxious she is to sell her butter, I should look for some sort of legal manoeuvre by which they would endeavour to meet that situation. The temptation is too great-14 cents in one place and 2 or 3 cents of a bonus in the other. I would again remind the house that, when the old treaty was introduced, there did not seem to be any fear that it would be injurious to us, as regards its application to New Zealand. Political use was later made of it, and the government was blamed for the consequences-properly, of course, because they must shoulder the responsibility and stand the results. But no one in the house at that time ever anticipated that the treaty with Australia would result in such an enormous influx of butter from New Zealand. No one voiced any such anticipation.


James Dew Chaplin: They were warned of it.


Alan Webster Neill: The warning was mild.


Robert James Manion: Mr. Donald Sutherland
spoke for hours about it.


Alan Webster Neill: Yes; I remember his discussing it for hours. So long as there was any political object to be gained he would talk for days.


Robert James Manion: The hon. gentleman can
understand that.


An hon. MEMBER:: What are you doing now?


Alan Webster Neill: The criticism in regard to
New Zealand butter was entirely trivial, for it was not anticipated that the influx of that butter into Canada would be what in fact it turned out to be. Nevertheless, the government paid the price. I am not kicking about that at all, but I am pointing out that what happened once may happen again. Some unexpected development of trade may eventuate, and we are powerless in the absence of the dumping duty.


Mr. BOWMAN:: What do you suggest?


Alan Webster Neill: Retain the dumping duty.


Henry Herbert Stevens: Does the hon. member
suggest rejecting the treaty if the dumping duty is not retained?


Alan Webster Neill: That is not a fair question.
We know very well that the treaty is here, and if we do not accept it in its entirety it will be rejected. That is the threat the hon. member holds out.


Henry Herbert Stevens: It is not a threat.


Alan Webster Neill: Perhaps not; but the hon.
gentleman is asking me to place myself in that position, to reject the manifold advantages of the treaty because of some disadvantages I have indicated. But I suppose it would be possible, without a total loss of the treaty, to refer the matter to Australia and ask for further amendment. I am willing to give the Minister of Trade and Commerce credit for having got the last advantage that could be obtained under the treaty, and he knows better than I do that it is useless going back for improvements. Still, these facts remain and must be faced.
Let me now sum up the situation so far as British Columbia is concerned. The fish and lumber people and the newsprint interests are getting a great benefit, and I heartily approve of the treaty in that regard. With respect to the pulp and sulphite industry, they will not be assisted but may be injured to some extent. I cannot allow that fact to pass without comment, no matter how much anyone may try to prevent my discussing it.


Henry Herbert Stevens: How will they be injured?


Alan Webster Neill: By the fact that the Australian is encouraged to buy newsprint rather than pulp and sulphite. They have no preference whatever, and-


Henry Herbert Stevens: How does that injure
the industry? The hon. gentleman makes the bald statement that the pulp industry will suffer. Will he kindly tell me how they will be injured by the treaty?


Alan Webster Neill: I do not know that I said
"they will be"; I said they are likely to be injured. But they certainly have reason to complain when they see a competing branch of their own industry given an enormous preference under a treaty negotiated by the government, while they themselves are getting nothing at all. Are the conditions in the pulp and sulphite industry so far removed from the conditions that exist in the newsprint industry that there should be this discrimination?

Australian Trade Agreement


James Langstaff Bowman: Is it not better for us
to sell paper rather than pulp?


Alan Webster Neill: Yes. But pulp and sulphite
are not raw material, in that they require a considerable degree of manufacturing. And there are circumstances in which they cannot convert the pulp and sulphite, out of the raw timber, immediately into newsprint. Yet they are being penalized and placed at the mercy of the newsprint companies to whom they must sell their product.


Henry Herbert Stevens: How are they penalized
in comparison with their present position?


Alan Webster Neill: They are penalized because
newsprint is getting a big preference and they are getting nothing at all.*


James Langstaff Bowman: Is it not better to sell
them manufactured paper?


Alan Webster Neill: Not if it is impossible to manufacture the article under certain conditions. The hon. gentleman is not familiar with the situation. He does not know that there are remote localities and other conditions where it would not be profitable to convert the timber into newsprint. But they can make sulphite which is afterwards taken to the factory and manufactured into newsprint. Surely, however, the hon. gentleman will not suggest that the pulp and sulphite industry Should have been, to put it mildly, neglected. Surely he does not suggest that they should be passed over and ignored.


Henry Herbert Stevens: Has my hon. friend received complaints from the pulp industry of British Columbia on the subject?


Alan Webster Neill: Not since the treaty was
passed, but I received an urgent request that I should endeavour to have some consideration given pulp and sulphite. I was asked to see whether the industry could not be given some of the benefits Of the treaty.


Henry Herbert Stevens: Did my hon. friend try?


Alan Webster Neill: Yes, I tried.


Henry Herbert Stevens: I don't remember.


Alan Webster Neill: Yes, I tried.


Henry Herbert Stevens: I do not remember having heard from him at all-not a single word. I never heard from him.


Alan Webster Neill: No?


Henry Herbert Stevens: Not on that subject.


Alan Webster Neill: He has heard from me often.


Henry Herbert Stevens: The hon. gentleman said he tried to get it in the treaty. He never came near us, nor asked us, nor suggested it to us.


Alan Webster Neill: Am I not trying to get it in now?


Henry Herbert Stevens: After the treaty has been signed?


Alan Webster Neill: The treaty has been signed, it is true-


Henry Herbert Stevens: Signed by both parties
and delivered.


Alan Webster Neill: It has been signed but not ratified; and it is not law and is not binding until it is ratified.


Henry Herbert Stevens: Will you reject the treaty to get it in or take the treaty without it?


Alan Webster Neill: That is the same question: the hon. gentleman is trying to trick me into a false position. He asks, "Will you forego the great advantages of the treaty because certain things are not included in it?" Well, two blacks do not make a white, nor do two wrongs make a right. I am saying that the treaty is of great advantage to a large number of interests in British Columbia, but I am pointing out that certain interests have been ignored.


Henry Herbert Stevens: The hon. gentleman made no representations on their behalf during the last nine months while the treaty has been under negotiation.


Alan Webster Neill: My time is drawing to a close and I must finish what I have to say. As regards eggs, I have already put on record the opinion of those who are best calculated to know what the results will be. As regards butter, I fear that the market will again be flooded because of the absence of the dumping clause. I regret that the dumping clause has been abandoned in this regard1. That is one outstanding mistake in the treaty. Notwithstanding this, however, and on the principle of the greatest good to the greatest number, I may answer my hon. friend's challenge whether I will vote for the treaty by assuring him that I will. It will be of considerable advantage to a great many people in British Columbia, and on that principle, of the greatest good to the greatest number, I will support it. But that does not and will not prevent me from pointing out wherein I think it might have been improved upon, without any very great loss to us with regard to the interests I have indicated.


Mr. QUINN:: Don't be wasting our time.

Australian Trade Agreement


Alan Webster Neill: My hon. friend is very fond of interrupting. If he will get up on his hind legs and address the committee in whatever language is familiar to him, I will listen to him. If he is not getting the amount of hay and oats-or perhaps thistles-he thinks he is entitled to, let him go to his keeper.


Felix Patrick Quinn: If I cannot make a better speech than that the proper thing for me to do is to keep my seat.


Mr. G. B. NICHOLSON (East Algoma):: I do not intend to detain the house, but I wish to refer to two items in particular in the treaty, namely, lumber and newsprint. In passing, may I comment briefly on the observations of my hon. friend from Comox-Alberni (Mr. Neill) with reference to newsprint paper versus pulp and sulphite. That, I think, was the way in which he referred to these two items. There are three kinds of pulp manufactured in Canada, sulphite, sulphate and groundwood. Sulphite and ground-wood are used in the manufacture of newsprint in the proportion of approximately 84 or 85 per cent of groundwood to 15 or 16 per cent of sulphite. If you make provision by which you are enabled to export 15 or 16 tons of sulphite and 84 or 85 tons of groundwood pulp, you simply take away from yourself a market for 100 tons of newsprint. From the standpoint of British Columbia, where both pulp and paper is manufactured, if we can export newsprint we provide a market for an equal tonnage of sulphite and groundwood pulp. It is better for the country to manufacture the paper to the highest possible degree and give employment to an additional number of Canadian workmen. Although I have not the information before me, I believe the same thing would apply to sulphate which is used in the manufacture of kraft paper. When my hon. friend says that sulphite and pulp-I presume he is referring to groundwood-cannot be manufactured into newsprint, I believe he must be mistaken.


Alan Webster Neill: I did not say that.


George Brecken Nicholson: I understood the hon. gentleman to say that the sulphite and pulp industries were being penalized because conditions were such that those commodities could not be converted into newsprint.


Alan Webster Neill: Oh, no.


George Brecken Nicholson: The wood itself is the raw product.


Alan Webster Neill: My hon. friend has misunderstood me. I said that it could not in many instances be manufactured profitably immediately into newsprint.


George Brecken Nicholson: There is no doubt a
paper mill cannot be erected wherever a pulp mill is in operation, but it is equally true that sulphite and groundwood are the semi-raw products from which newsprint is manufactured, and if you provide a market for newsprint you provide a market for sulphite and groundwood, which in turn provides more employment for Canadian workmen.
Every million feet of lumber which is exported from any part of Canada will provide more employment than an equal value of any other product produced in Canada. The provision of a market for an additional 100,006,000 feet of lumber would provide, directly or indirectly, for 50,000 Canadians. It would provide directly for 7,500 people, then there would *be in addition all that is involved in the maintenance of 7,500 people, and the purchase of equipment, provisions and so on, which would involve an amount almost equal to the sum paid in wages in the industry.


Alan Webster Neill: My hon. friend was stressing the point that pulp and sulphite should not be exported but should be manufactured into newsprint, but he says now that the raw lumber should be exported.


George Brecken Nicholson: That argument does
not hold. A hundred different articles can be manufactured from faw lumber. The principal use to which raw lumber is put is the erection of all kinds of buildings. Does my hon. friend suggest thart. we should limit the export of lumber until we can provide the means by which we would erect the buildings, and export them as such? Ground-wood and sulphite are the raw products for newsprint, and when we export newsprint we are exporting groundwood and sulphite. Does my hon. friend contend that we should limit the export of lumber because we do not manufacture the buildings for export? Lumber which goes into the manufacture of furniture is of an entirely different class. Some goes into the manufacture of doors, but that article is provided for in the treaty. The exporting of lumber would provide more work for Canadian people than a proportionate amount of any other commodity manufactured in this country.


Alan Webster Neill: This is unmanufactured
lumber.


George Brecken Nicholson: To what does my
hon. friend refer as unmanufactured lumber?


Alan Webster Neill: Not manufactured.


George Brecken Nicholson: If I understand this
bill it provides for all sizes of lumber.


Alan Webster Neill: Including logs.
Australian Trade Agreement


George Brecken Nicholson: Yes, but how many
logs will be exported to Australia? I am not very familiar with the lumbering trade of British Columbia, but I do know that some of the largest saw mills in the country are located in that province. When a market is provided for the product of those mills the pressure will be relieved which is now being *exerted on the eastern market by the British Columbia trade. If there were no other provisions in the treaty than those covering the export of newsprint and lumber, the treaty would be well worth while. There is no other industry in Canada, not excluding wheat, in which unemployment has increased to a greater degree than in the lumbering and newsprint industry'.


Peter John Veniot: Under the terms of the
old treaty, salmon, sturgeon and other canned fish were all on the same basis. Under the terms of the new treaty salmon receives a preference of three pence as compared with one and a half pence.


Richard Bedford Bennett: Perhaps the hon. member would prefer to wait until we get into committee so that answers can be given without violating the rules of the house.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. WILFRED HANBURY (Vaneouver-Burrard):: Mr. Speaker, I have noticed some
criticism of the Australian treaty, and I will venture tihe assertion that it is unlikely there ever will be a treaty which will not call for criticism from some branch of the community or some individuals interested. Speaking as I do for my constituency in British Columbia, I can only say frankly that I congratulate the government upon the treaty. In so doing I should like to associate, and I feel confident the Minister of Trade and Commerce (Mr. Stevens) would also associate with this treaty, those gentlemen from British Columbia who, about a year and a half ago, partly at the expense of tire British Columbia Lumber and Shingle Manufacturers' Association, assisted by the government of that province, went to Australia and New Zealand, their main purpose being that British Columbia lumber should be given a preference in those two dominions. The gentlemen to whom I refer are Mr. J. C. McDonald, Mr. J. G. Robson, bath of them from the city of New Westminster, and Mr. T. Gadd, of the city of Vancouver. All of these gentlemen are members of the British Columbia Lumber and Shingle Manufacturers' Association. As secretary of that group they took along with them Major Andrews, and it may be of some interest to members of the house to know that the Major Andrews to whom I refer is a son-in-law of the Premier of British Columbia, the Hon. Doctor Tolmie. They were given a great deal of encouragement by the governments and industrials of both Australia and New Zealand. Prior to their departure from Canada they had been in consultation with the then Minister of Trade and Commerce. After their return they arranged that Major Andrews, who had accompanied them on this trip, should reside permanently in Australia. It is only right that the efforts of all these gentlemen should be recognized in connection with this treaty.
Newsprint is to be an item on which Canada gets a preference in the markets of Australia. I would, however, point out to the house that Canada, or British Columbia-it is practically the same thing in this particular case-has been furnishing approximately one-third of the newsprint requirements of Australia. The other two-tliirds have been purchased from Great Britain. So that it is difficult to see wherein British Columbia is to get a preference over what has been in the past our chief competitor. Unquestionably, however, the preference has been increased to such an extent that there is little likelihood of other nations successfully competing for the newsprint market.
In respect to Australia's lumber requirements we have not been so fortunate. Canada has never been given a preference in connection with the lumber requirements of Australia. The total importation into Australia of lumber that could have been supplied by British Columbia-I refer chiefly to Douglas fir-was 212,000.000 feet in 1928. Of that Canada supplied only about 13 per cent. In 1929 we increased the percentage to some extent. Australia imported approximately 266,000,000 feet, but even so, less than 22 per cent was furnished from Canada, practically the whole of the remainder being obtained from Washington and Oregon, which compete directly' with British Columbia in furnishing Douglas fir, or, as it is known in many countries, Oregon pine. I am pleased to note that the treaty also includes redwood or cedar. Redwood is not grown in British Columbia, but cedar is. In the past I understand redwood from California has had a preference in Australia over British Columbia cedar. Now British Columbia cedar will have a preference over the redwood of California,

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and this should be a big advantage to the lumber interests of our province.
As regards canned salmon, we have in the past supplied approximately 70 per cent of the requirements of Australia. Therefore, from the standpoint of British Columbia we have a possible expansion of the newsprint supply; we have a possible expansion of 200 or 300 or 400 per cent in the quantity of lumber, and a possible increase of 50 per cent in the quantity of canned fish that can go from Canada to Australia. Consequently the treaty appeals to me as one that is worthy of the favourable consideration of the house.
Some criticism has been made in connection with our importation of eggs and butter. It is only reasonable to assume that if we can increase the production of newsprint, lumber and canned fish, the increase in the number of the employed will result in the consumption of a very large quantity of the surplus eggs that are now available. At the present time, however, eggs in Canada are on an export basis and so long as this condition continues I can see little disadvantage to the Canadian producer, whether eggs come into this country and force the sale of a larger quantity of his surplus outside Canada, or whether he sells his whole production inside or outside this country. So long as butter and eggs are on an export basis I can see very little injury to butter or egg production in Canada.
It has been stated as a ground of criticism that many items of the treaty are not such as will be exchanged between Canada and Australia. True, we may not exchange these commodities, but I can see no disadvantage in having them mentioned in the treaty. It is something like the cast iron pipe and cut flowers about which we heard so much a year or so ago.
The important question is not so much whether the exchange of commodities is to be to the advantage of Canada, but whether it will be possible for Canada to sell gobds to Australia at all. As was pointed out this afternoon by my leader, many of the duties, even under the British preference, are higher than our general tariff, and in addition to that they have a surtax of 50 per cent on many items. The latter, we are informed, is a temporary measure, but the fact remains that this surtax of 50 per cent does that much more to exclude the importation into Australia of goods from any country and makes it just that much more difficult for Canadian shippers to reach the consumer in Australia. In addition to the duty and the surtax, they have what is known as a general primage tax duty of 10
[Mr. HanburyJ
per cent, so that in many cases there is the surtax of 50 per cent, and in all cases the primage tax. That, however, is to my mind not the worst feature, because Australia has in the past, and will in the future purchase goods regardless of the height of her tariff.
What should concern us chiefly at this time is the inability of Australia to furnish money with which to purchase the commodities not only of Canada but of every countiy in the world. At the present time Australia is restricting the export of exchange. There are merchants in Canada who for some time past have been unable to transfer their credits from Australia to Canada, and I understand that condition exists to-day. Therefore Mr. Speaker, if we are to take advantage of the Australian treaty, if we are to furnish work for the lumbermen of British Columbia and other parts of Canada, for the paper mills and paper mill workers in British Columbia and other parts of Canada and, for the fishermen, we must make some provision whereby the goods they produce can be sold in Australia. Otherwise of what advantage would such a treaty be to this or any other country?
I suggest therefore, since each of these commodities entails a very high percentage of labour, that in view of the present economic and unemployment conditions the government could, if on no other grounds, justify an extension to Australia of a credit which could not be used outside of Canada. Until Australia is able to set her own house in order, until that country can permit the exportation of credits I see very little advantage in placing this treaty on the statute books. I suggest to the Prime Minister (Mr. Bennett) and to the Minister of Trade and Commerce that every effort should be made to establish credits in Canada so that the Canadian producer may sell his goods to Australia.
During the past few years the old Australian treaty was criticized in every part of Canada -yes, even in British Columbia. The basis of the criticism was that benefits accrued only to British 'Columbia. True, on account of her geographical position that province must reap the greater benefit of any treaty with Australia, New Zealand or any of the Pacific countries. In this particular treaty, however, I feel that the government of the day have provided some preference to producers of all classes of goods in all portions of Canada. Therefore I for one believe that an advance has been made, that a step forward has been taken, and I have no hesitation in saying that I for one heartily support the Australian treaty as submitted to this house

Australian Trade Agreement


Henry Herbert Stevens: Mr. Speaker, I had intended to reserve my observations until the 6ID reached the committee stage, 'but after listening to a number of addresses this afternoon I have come to realize that at this stage perhaps a few words of explanation and some observations in reply to statements made by hon. members may be useful. If the house would consider that details can be given more fully in the committee stage my present remarks might tend to shorten the debate on the second reading.
During the long months which have elapsed since this treaty was originally under discussion there has been on the part of the representatives of Canada as well as of Australia nothing but the most earnest desire to cooperate in the production of an agreement which would be mutually advantageous. I think my colleagues will agree that throughout those months, which have entailed a great deal of labour there has been nothing but the most cordial good-will between the two dominions. Some difficulties have been experienced due largely to the great distances separating the two countries. Negotiations soncerning the treaty were commenced during the sessions of the economic conference, and at this point I wish to pay tribute to Mr. Moloney, who represented his country on the economic committees of the Imperial conference, upon the manner in which he approached the subject and the generous support he gave us in our efforts to bring the matter to a satisfactory conclusion.
Certain attitudes have been taken to-day towards the treaty, and I think a few words of explanation would serve to remove at least some of the apprehensions in the minds of hon. members opposite. I shall try to deal with hon. members in the order in which they have spoken, referring first to the observations of the right hon. leader of the opposition (Mr. Mackenzie King). He referred to the fact that the Prime Minister Mr. Bennett) had said the agreement before us was a treaty of mutual advantage to both countries, and reiterated a homily on the mutuality of trade generally. I would invite the house to this thought however, that while certainly an exchange between two individuals must be or usually is of mutual advantage in that the two making the exchange are both pleased or satisfied, it is not correct to say that such is true between nations. The right hon. member laid it down as a definite and proven principle that because an exchange between individuals is mutually advantageous an exchange between
nations must necessarily be of the same order. Here is the difference. Trade between countries is trade between different individuals in each of the countries. For instance, if one country has no tariff at all-I use the extreme example in order to get the full force of the point-and the other has a high tariff, the individuals in the country with the low tariff could buy goods in the country with the high tariff and bring them in to the disadvantage of some of its own nationals. On the other hand it would be next to impossible, or certainly much more difficult, for individuals in the free trade country to ship their goods into the high tariff country to the injury of the individuals over there. It is conceivable therefore that a condition may exist between two countries where trade is not mutually advantageous. If however the two countries come together and examine the conditions of trade in each and the conditions controlling the interchange between the two, it is possible to iron out differences or at least to minimize the injury which might be done. That is precisely what we have tried to do in the agreement between Australia and Canada. It is clear that there are goods produced in both countries which are competitive; I might say that in some few instances they are highly competitive. On the other hand, there is a wide range of commodities where the one is the complement to the other. In this treaty we have sought to avoid the injury which keen competition from one of its commodities would do to the importing country. While we have sought to minimize, and indeed, almost eliminate, such a danger, on the other hand there is a wide range of exchange of goods that may be carried on without injury to either country, and that is what we have tried to facilitate.
Now, I was very sorry when I heard the right hon. gentleman offer criticisms of the Australian tariff rates. He has been followed by several other hon. members who have indicated .the extremely high tariff rates obtaining in Australia. It may be advisable at this point for me to refer briefly to the conditions which have brought that about, and I think in justice to Australia we ought to appreciate two or three matters to which I shall make reference. It is true that Australia has in recent years drastically increased her tariff rates. It is also true that Australia's exchange at the moment is under a serious discount. But why is it so? The reason is that Australia over a great number of years indulged, I might say, in rather expensive social legislation, which resulted in a very costly type of administration. This was followed by a very heavy expenditure, in proper-

Australian Trade Agreement
tion to her population, during the great war. I think I am correct in saying that the contribution which Australia made to the cause of the allies cost her perhaps more than that of almost any of the other dominions; at least in proportion to population it was a very heavy charge. Subsequent to the war, for these two reasons in the main, Australia found herself confronted with internal financial difficulties, and it was only in the last couple of years that her statesmen addressed themselves seriously to the correcting of those difficulties. Bringing their efforts down to date, they first of all increased the exchange rate. I may say that the Australian banks deal with this matter in a different manner from that followed by the Canadian, American or British banks. In Canada, United States and Britain, and, I think, in nearly all the other major countries, the exchange varies from day to day according to the necessities of the case-according to the demand for the money of one country in the market of the other, or the obligations to be met from time to time. So that exchange is constantly varying up and down in those markets. But under the Australian system of administering their banks, they arbitrarily fix the rate of exchange in a given period.
Now, under the circumstances to which I referred a moment ago, that is, the pressing necessity to correct their internal financial handicap, and the further necessity-which I overlooked-of paying their heavy interest charges abroad, both in New York and in London, Australia found it necessary to curb imports-that was her first step-in order to increase as far as possible the spread between exports and imports, thus giving her the goods or the financial value to pay her obligations abroad. To achieve this she imposed drastic increases in her tariff, and she raised her exchange, A year ago last January it was 3 per cent; it remained there for several months until she advanced it to 7 per cent; where it remained for several months and then she advanced to 9 per cent; where it remained until last January, when for a few days she raised it to 13 per cent, and later to 24 per cent, where it remains to-day. I am talking about the official exchange rates.


Milton Neil Campbell: Is that imposed arbitrarily by Australia? Is it not imposed at ihe other end on Australia?


Henry Herbert Stevens: No, it is fixed by the Australian banks themselves, for the dual purpose of restricting the export of cash and the import of goods, with the idea of stimulating the exports in order to meet their obliga-

tions abroad. In addition to that Australia raised her tariff very substantially. Then the Australian authorities took one further step, for which I believe they deserve great credit. They cut all civil servant's salaries by 20 per cent; they cut all classes of pensions, including war pensions, 20 per cent; they cut down internal subventions 20 per cent; and they put into effect other drastic economies which have materially reduced their internal obligations. As a result of these efforts they have corrected their trade situation until for their fiscal year, ending, I think, last June, their exports exceeded their imports by $100,000,000. I cite that because those who are studying the situation closely believe that in this achievement alone one can perceive an early return of their exchange to par. I do not suggest that it will return to par rapidly, but I do believe that we shall see an improved condition in Australian exchange in the near future. I do wish to impress upon hon. members that the statesmen of Australia have seriously addressed themselves to the task of correcting the internal financial difficulties and uncertainties of the country. Therefore instead of criticizing the means which they have taken to achieve this end, I think we ought to recognize that they have taken a courageous and a bold stand in an effort to bring about this result.
Now, my hon. friend from North Waterloo (Mr. Euler) I am very sorry to observe is not in his seat, because I always prefer to direct my remarks to hon. members when they are in their seats, and I shall have to answer some of his points in his absence. Usually the hon. gentleman is perhaps one of the most fairminded and moderate debaters in the house, and I was a little disappointed in the attitude he took to-day in regard to this treaty. It is quite true he intimated that he was not opposed to the treaty, that he thought there were some good features about it, but then he spent the rest of his time citing individual items which he held up before the house as evidence of the ineffectiveness of the treaty, and that it would be indeed of little value to the country. In that respect I am fair to him in saying that he limited such remarks to the application of the British preference.
I am going to examine a few of the items he examined and a few more that he did not deal with; I am not going through the whole list. By the way, he was seeking to show that the Australian rates were so absurdly high that in any case the British preference meant nothing. "Why," he said, "the first item on this list carries a duty of 60 per

cent under the British preference, plus a surtax of 50 per cent of the duty." He did not say what the item was, but let us see what it is. He said, "You are not going to ship much goods under such a high rate; it means 90 per cent plus the primage tax and so on, so you need not expect to do much business under that rate." What is that item? It deals with corsets, an antiquated article of female attire. I do not know much about ladies' wear, but I am under the impression that the item of comets does not play quite so prominent a part as it did in my younger days, and I question whether, after the treaty has been in effect for a year or so, my hon. friend will find that the failure to jump the Australian hurdle of 90 per cent under this item of corsets is going to be a very great detriment to Canada.


William Daum Euler: I never mentioned corsets.


Henry Herbert Stevens: No, my hon. friend was
very careful not to mention them; he was a little shy and delicate. He said the first item on the list, and I am reading the first item.


William Daum Euler: I did not say that.


Henry Herbert Stevens: Yes, my hon. friend did
say so. Then he came along and made rather a pathetic appeal for his own riding. He said. "I have in my own riding a cordage factory," and he cited binder twine and yams.


William Daum Euler: I did not cite binder twine.


Henry Herbert Stevens: Yes, my hon. friend did.


William Daum Euler: I did not cite binder twine.


Henry Herbert Stevens: My hon. friend certainly
spoke of the item to which I am referring.


William Daum Euler: I spoke of cordage, but not
of binder twine.


Henry Herbert Stevens: Then my hon. friend did
not read the item correctly if he did not mention cordage. He said this item carried a duty of 40 per cent which, plus the 50 per cent surtax would be 00 per cent, and he said, "I cannot see much help for my riding under this item." That is the item covering binder twine and yarns, but immediately adjoining is an item covering cordage and twines. I look across the page, and I find that under the old treaty it was 10 per cent, running up to 50 per cent in the case of some of the finer yams, while under the new treaty it is free and up to 40 per cent on some classes of yarns. In other words we are getting that item on the free list, but my hon. friend did 22110-258
Australian Trade Agreement
not see that; he saw only the other item, which carries a very much higher rate of duty.
Then my hon. friend wept over refrigerating condensers and coils, which he said carried the iniquitously high rate of 45 per cent.


William Daum Euler: I never mentioned refrigerators, and I am surprised at the statement of my hon. friend.


Henry Herbert Stevens: My hon. friend certainly
did. Does he say he did not refer to refrigerators?


William Daum Euler: No, I did not.


Henry Herbert Stevens: I cannot contradict my
hon. friend, but if he did not do so my memory is playing me false. At any rate, my hon. friend referred to another item below at 45 per cent, and the only one I see carrying that rate is the item dealing with refrigerating apparatus. But immediately adjoining that item is item 164, covering churns, cheese presses, dairy coolers and non-household refrigerators. Formerly this item carried a rate of 35 per cent while under the new treaty the rate is 22 i, per cent, which is a substantial reduction. This is the British preference rate, which will certainly permit us to enter that market in competition with British manufacturers.
Now 1 turn over the page, and while my hon. friend did not refer to these separate items he referred to certain agricultural items as not being under the British preference. I am going to refer to a number of items and give the rate which we now receive under the British preference, and I will also show what were the previous rates. The first item is handworked rakes and ploughs combined; handworked cultivators and handworked seed drills; under the old treaty the rate was 10 per cent and it is now free. Then come threshing machines, which carried a rate of 10 per cent under the old treaty and are now free. Then there is an item covering channelmaking graders; road scoops and scrapers; scoops; stump extractors; horse road rollers and machines, which under the old treaty carried a rate of 30 per cent and under the new treaty a rate of 20 per cent. The next item covers garden and field rollers and spraying machines; lawn mowers, sweepers and sprinklers; garden hose reels and syringes. Under the old treaty the rate was 30 per cent, while under the new treaty it is 20 per cent.



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Mr. STEWART (Edmonton):: I see
threshers are under the general tariff, while my hon. friend has just given them as free. How would that happen?


Henry Herbert Stevens: We come under the
British preference with regard to threshers. Discs for agricultural implements, formerly 10 per cent, now are free; grinding machines, formerly 10 per cent, now are free; unspecified metal working machinery, formerly 10 per cent, now is free. I may add that there is no surtax at all on any of the items I have just mentioned. Then there is an item covering boiler tubes which I hope will be of some value to Canada. Under the old treaty the rate was 10 per cent, and now they are free.
So I might go on; there are a larger number of these items, but the point I want to impress upon the house is that perhaps the most valuable provision of this treaty is that Australia extends to Canada the British preference, which previously we had only on four items. I pause to say this to my hon. friends:	When the discussions leading up to
this treaty were first undertaken there were two main points which had to be overcome. The first will answer the hon. member for Comox-Alberni (Mr. Neill) with regard to the dumping clause. Australia insisted that the application of the dumping clause should be waived on our part. On the other hand we insisted that the British preference should be extended to us in full. When that was ironed out we came to consider individual items now contained in the treaty, but those were the two main principles to be considered first. I regard them as of extreme importance. Let us look at the history of the dumping legislation. In 1925 Canada entered into a treaty-and I am not now going to blame my hon. friends opposite; I will say that Canada entered into a treaty with Australia, knowing perfectly well that there was such a thing as the Paterson scheme, and we put the rate on butter at one cent a pound. The treaty was passed in the autumn of 1925.


Charles A. Stewart: Is my hon. friend correct in his statement that the Paterson scheme was in operation in 1925?


Henry Herbert Stevens: Certainly.


Charles A. Stewart: I doubt it.
That is not my information.


Henry Herbert Stevens: Butter had been coming
into Canada quite freely, and I remember that my friend the late Hon. Mr. Boivin, Minister of Customs at that time, was
[Mr. Stevens.l
alarmed about the importations of butter and he imposed the dumping duty of 6 cents against Australia because of the Paterson scheme.


Charles A. Stewart: In 1926.


Henry Herbert Stevens: Yes, about February of
1926. The matter was discussed in January and February, and I have forgotten the exact date the dumping duty was imposed. Australia considered that this was more or less a shabby trick, shall I say, and they have never agreed that it was a fair imposition of the dumping clause. There was an element of unfairness in it, for this reason: All butter produced in Australia contributes 3 cents a pound to a pool, out of which was taken 6 cents per pound which was paid to the exporter of butter, so that really the exporter had already paid into the pool 3 cents a pound. Originally the amount involved was 9 cents per pound; that is, 3 cents was paid in and 6 cents was paid out. Later that was reduced to 6 cents, so that for a number of months, if not for the last year or two, there really has been a bonus of only 3 cents a pound. Recently-I have the date under my hand-that has been reduced to 5 cents a pound, so there is a bonus on Australian butter of cents a pound net, because prior to receiving the bonus the butter has contributed to the pool.


Charles A. Stewart: There is really no difference, except the reduction of one cent. They were doing the same thing before.


Henry Herbert Stevens: Yes, but it started at 9 cents, then dropped to 6 cents and now is 5 cents. That is the point I am making. I refer to that to emphasize the reasons why Australia requested the waiving of the dump. They never regarded it as a fair imposition and they insisted that it should be waived in the treaty. We waived it, but included in the treaty, by agreement with them, of course, after we had worked on it a considerable time, article IX, which we shall deal with in due course. Article IX is simply this:	that
either party to the agreement, if it is found that goods from the other country are being imported to the injury of any industry, may notify the exporting country accordingly and request the restriction of such exports. And it is assumed that the exporting country will immediately take action to restrict those exports. As regards Australia, the situation

Australian Trade Agreement
is very simple. They have export boards controlling butter, eggs, canned goods, meats and, indeed, most of the goods that may be affected by the treaty.


William Daum Euler: By what method can they restrict exports?


Henry Herbert Stevens: The export boards also control wine. In answer to the hon. gentleman's question, I am afraid I cannot go into details, but the method is this. They have export boards from which all exporters must get a licence before they can export goods.


William Daum Euler: We should have to have legislation to that effect?


Henry Herbert Stevens: We have not got that system. I am pointing out that Australia, whic-h affects us most, because we are the importing country, has the necessary machinery which it will put into operation the moment the need arises. Our experience with them during the past nine months gives us confidence in their fairness and we believe that they will actually put it into effect if necessary. But should they not do so, under Article IX we can, by our own action, remove the particular item from the treaty and it will fall automatically into the general tariff. The reason for that is this. We learned from the experience with the last treaty that an entire treaty may be wrecked by one item, and both countries agreed that this was an unwise position for either to find itself in. We therefore worked out Article IX to meet that difficulty, and: there is a genuine understanding, embodied in the treaty in definite language, and clearly understood by both, that an item may be removed without jeopardizing the rest of the treaty. And when the difficulty or dispute, or whatever you choose to call it, is adjusted, the item will go back into the treaty automatically by action of the government. We consider that an excellent method.
Reference has been made by one hon. member to the fact that we have lost our market in China for wheat, Australia being able to ship wheat to that country, under her depreciated currency, at much lower rates. Now, it is well sometimes to look at the facts. It is perfectly true that Australia this year has found a larger market in China for her wheat. It is lucky for us that she did, because it as lifted that much more wheat off the congested market of Europe. And we were delighted to see it. But what injury has that
22110-258J
done to Canada? Let me quote the figures for the last five years. Our exports to China, in bushels, have been:
1927		 3,397,000
1928		 2,364,000
1929		 7,469,000
1930		 2,266,000
1931		 7,266,000
And 1931 is the year in which we have been injured. These figures I submit indicate that no injury has been done to Canada-no material injury-in the Chinese market by Australia. On the contrary, the disposal of a large portion of Australian wheat in the far east has relieved the congestion of the European market, and personally I am delighted that Australia has found that eastern market this year, for her surplus wheat.
My hon, friend from Comox-Alberni (Mr. Neill), in his usual manner, opened his remarks with a rather complimentary reference to the government and the treaty.


Alan Webster Neill: Is that my custom?


Henry Herbert Stevens: No, but I will tell the hon. gentleman what his custom is. I accept the correction. In opening his remarks he made some rather complimentary references to the government-


Alan Webster Neill: To the treaty.


Henry Herbert Stevens: -but, as is his custom, he spoiled the effect and value of these kindly and, I trust, just remarks by proceeding to a most unfair analysis of certain items of the treaty. Referring to eggs, he took good care to read into the record a letter from the Poultry and Egg Producers' Association of British Columbia. I received precisely the same letter, which I took care to answer, giving information which would remove the false impression they had. The hon. member knew -he admitted he knew-that the writer of that letter, a Mr. Wallace, was labouring under a misapprehension, not understanding all the facts. He had made the statements that appear in his letter without having the full information before 'him, or without troubling himself to look it up. Now what are the facts? I indicated them this afternoon. For the last six years eggs from Australia have been on the free list. During the last eight years, from 1923 to the present time, we have imported no eggs from Australia although they have been on the free list the whole of each year during that period. In this treaty we have restricted the free period to two months ' of the year, or one^sixth of the time under the old treaty; yet there are some who say that we are striking a dire blow at the very heart
*1062

Australian Trade Agreement
of the egg producing industry. The thing is so absurd that only a complete disregard of the facts or a complete ignorance of them would justify anyone in making any such statement. I was therefore veTy much surprised that my hon. friend from Comox-Albemi, who knew better, should read into the record the Letter in question. And the reason I interrupted him was that that letter appearing in his speech, which he would likely send out through the egg producing district of his riding, should not go without some challenge to the accuracy of the statements made by the hon. member, together with the letter as it was read.
The hon. gentleman then referred to butter, expressing apprehension of the effect of this treaty in the importation of butter into British Columbia in particular, and into Canada generally. I have already indicated the operation of the dumping clause. The facts regarding butter are these. Under the old treaty butter was one cent per pound, with the application of the dumping clause available to the government. Under the new treaty butter is five cents per pound but, instead of the application of the dumping clause, we have article IX, which provides a much more effective, expeditious and definite way in which to prevent any flooding of the market with butter. Bet me say as earnestly as I can that we are confident that Australia will not attempt to flood the Canadian market with butter. Australia takes the position that Canada during recent years has been a butter importing country, and she merely asks that if and when we import she may have a reasonable advantage in our market. We have given an advantage restricted to five cents per pound duty. During the session -we have been condemned because we put on a duty of more than four cents per pound. The hon. member for Melville (Mr. Motherwell) read a letter purporting to come from the national dairy council at Winnipeg wherein they declared that they did not want a duty of more than four cents per pound. He impressed this upon the attention of the house, and condemned the government because too high a rate was being put on. Australia has agreed to the rate of five cents per pound and we consider it reasonable and adequate, fortified as it is by article IX of the treaty.
This afternoon the hon. member for Cornox-Albemi attempted to get away with the assertion that he had been asked by the pulp industry to see that they were protected against any possible damage which might be done by this treaty. He modified that statement by saying that he had been asked to

speak on their behalf so that their interests might be protected. I told him this afternoon and I repeat now that he never presented that protest to the government. He is not a shy man, nor is he modest in the slightest degree- I question if he knows the meaning of the word-and if he had in his possession a request from the pulp industry of British Columbia asking for special consideration in the matter of preferences in connection with pulp, he never presented it to the government.


Alan Webster Neill: I said I had received the letter and I spoke absolutely correctly, but 1 did not say I had it with me. During the dinner recess I looked up this matter and, it being my custom to close up my files at the end of each session, I found that it was not on this year's file. Therefore it must have been last session and I must have presented it to the late government.


Henry Herbert Stevens: This afternoon my hon. friend was very positive that he had this letter. He was very certain that we were penalizing the pulp industry, he was very certain that we were neglecting this industry and that we were injuring it. I challenged him to show how we were injuring it, how we were penalizing it or how we were neglecting it, and he was narrowed down to asserting that he had the letter. Now he tells us that he has not the letter; it must have been a letter he received last year and passed on to hon. members opposite. I shall be very much interested in seeing that letter.


Alan Webster Neill: I will send it to my hon. friend as soon as I get home.


Henry Herbert Stevens: 
Milton Neil Campbell: Does the minister think that the rate of Australian exchange will work to the advantage of that state in shipping goods to Canada?


Henry Herbert Stevens: I appreciate the sincerity of my hon. friend, but to discuss that question fully would necessitate one of those long debates which we have experienced in years gone by. I will answer the question, but I do not pretend that the answ'er will be complete. Undoubtedly some advantage would accrue to a country with a depreciated currency in the exchange of its goods with other countries, but it must be remembered that although it may not synchronize with the depreciated currency, the time will come when the cost of production rises correspondingly. It does not follow that that rise will be as rapid as the rate of depreciation; it never is, but it follows that the depreciation gradually is offset.


Milton Neil Campbell: The advantage, then,
would be only temporary.


Henry Herbert Stevens: Quite so. It is a grave
question whether or not it is of any advantage to Australia, and I question whether it is of any advantage at all. We are undoubtedly concerned about it in a sympathetic way, but we believe the situation is being corrected and we look in the near future to a very rapid correction olf it. We certainly would not advise the holding up of this treaty because of the fact of depreciated currency. Furthermore, while I am not certain, I believe Australia has a provision in her tariff to prevent, and is recognizing the wisdom of preventing, the unfair competition of goods from countries with depreciated currencies. The other day a cargo of goods from Russia entered Sydney harbour, and the Australian government are, I believe, taking action to prevent those goods from entering into unfair competition with her own products. If that be so-and I believe it to be-certainly they will appreciate an appeal to them should it be proved that goods from Australia are entering Canada 'because of depreciated currency, in an unfair manner in competition with our goods.
Just a word in conclusion. Australia and Canada have similar tariff systems; they have a preferential, an intermediate and a general rate. Hitherto Australia has extended the British preference to the United Kingdom and New Zealand, and on four items, to Canada. She now extends the British preference to Canada, as the Prime Minister said this afternoon, on 415 items. True, on some of those items the British preferential rate will be high and will not permit of exchange, but this preference will give us perhaps two or three hundred items upon which we may enter the markets of Australia in competition with the United Kingdom. Furthermore, this is certain: whatever opportunity any countries may enjoy of entering the Australian market, we certainly enjoy the best. Last year Great Britain shipped goods into Australia to the extent of $277,000,000, and the preference netted Great Britain $35,000,000. That is what it is worth to Great Britain. We have

Australian Trade Agreement
now equal opportunity with Great Britain on all the range of goods that she sells to Australia. It may also be interesting to know that Australian imports are	divided	as follows:United Kingdom	
42	per	centUnited States	
23	per	centCanada	
3	per	centI invite the house	to	consider	the	possibilities for Canada under the new treaty with the British preference and special privileges that we have in the specified items. The United States have to their credit 23 per cent of the imports of Australia, while we have only 3 per cent, and now we have an opportunity in the Australian market on conditions surpassed by no other country, not even Great Britain.
The principle which has directed our efforts in connection with this treaty has been that o>f friendly cooperation between Australia and ourselves. We have at all times sought to work these things out in a fraternal spirit, if I might so put it. On every occasion we have been met with the most kindly response, and we anticipate the most hearty cooperation on their part just as we shall give it to them in the working out of the terms of the treaty.
Another point to which I might call attention is that so far as the items in the two schedules are concerned, we maintain the spread between the general tariff and the specified rates to Canada or to Australia, as the case may be. That is, however we may change our rate or they may change theirs, the spread between the general and the specified rates will be maintained.


Charles A. Stewart: Will my hon. friend explain that spread a little more fully?


Henry Herbert Stevens: In so far as the items
specified in the two schedules are concerned, the spread between the preferential rate extended by us to Australia or by Australia to us and the general rate will be maintained.


Charles A. Stewart: In the
Australian tariff?


Henry Herbert Stevens: And in ours-both ways.
I might mention also in connection with the treaty the question of inland freight rates. Under the Australian law determining the value for duty freight in the country of origin to the point of exit is included. To illustrate: Goods originating in Toronto, if shipped via Buffalo and San Francisco, would be dutiable in Australia at the cost of the goods plus the freight rate from Toronto to Niagara or Buffalo. If the goods perchance went by Vancouver, the rate of duty would be applied

on the cost of the goods plus the freight rate to Vancouver. The result was a tendency to ship the goods via United States ports, thus depriving Canadian ports of that business. That situation has been completely corrected. It was, I may say, in part corrected a year or two ago on the westward haul, but not on the haul eastward to Montreal, Halifax or St. John. Under the treaty this freight situation is completely corrected and the only freight charge to be added to the invoice price will be that to the nearest point of exit. From Toronto the nearest point will be Niagara or Buffalo.


Mr. MORAND:: Does that apply to
Canada?


Henry Herbert Stevens: It applies to both
countries. It is not important as applying to Australian goods coming into Canada, but in the case of Canadian goods entering Australia it is of great importance.


Raymond Ducharme Morand: It does not apply to the
United States?


Henry Herbert Stevens: No. I have already given an explanation of article IX, and I shall not now repeat it.
We are asking the house to look upon this treaty as a genuine effort on the part of Canada as a whole, irrespective of party affiliation, or business interests, or locality, because we believe the treaty will be of advantage to the whole of Canada much more than is perhaps at the present time understood. We offer the treaty to the house in that spirit, that Canada as a whole has sought to work out and we believe we have succeeded in bringing before parliament a trade agreement with a sister dominion, which, while it may not be perfect or wholly satisfactory, is at least for the time being the best we could hope for and one that will be of advantage to Canada and, we trust also, of advantage to Australia.


Charles A. Stewart: 
Henry Herbert Stevens: That is not the case.


Charles A. Stewart: My hon.
friend will give me the information no doubt when we reach the committee stage.


Henry Herbert Stevens: All I wish to say is that that is not the case.


Charles A. Stewart: Australian Trade Agreement
taken is that the general tariff must increase by the same percentage as the preferential tariff. Speaking generally, therefore, we have no preference on agricultural implements, of which in former days we shipped considerable quantities to Australia, and we must go into the Australian market on the same footing as the United States. No hon. member opposite has said a single word about agricultural implements. To some degree at least we have been put out of that market through the sale of American machinery.


Richard Bedford Bennett: They make it themselves.


Charles A. Stewart: My right hon. friend will admit on account of our having no preference in the market the Americans did secure a fair share of the Australian business and to a considerable degree we lost out in the farm implement business. After all the main items in connection with which Canadian trade will profit the most, and the items I am very glad indeed to support-in fact I am glad to support the whole treaty-are timber and paper. My hon. friend from Lincoln (Mr. Chaplin) was very critical of the action of the government which negotiated the treaty in 1925. He said if we had adopted the proposals of the late Mr. Robb we would not have had such a serious condition. True, there may have been some trouble, chiefly I believe in regard to raisins. At the time, however, the difficulties did not seem to be serious. Some members of that government felt that food products should be procured as cheaply as possible for the consumers of Canada, and to some extent we did oppose the proposal to increase the duties upon raisins. In the present instance my hon. friend is alarmed about wine; he fears that the industry in Canada will be interfered with by the importation of that commodity. Well, the minister has my sympathy. To introduce schedules in a treaty to please every part of Canada is a very difficult matter.


Henry Herbert Stevens: I am quite happy in that regard; there is no difficulty.


Charles A. Stewart: I am glad to know my hon. friend is happy, because the severest criticism he has received has come from my hon. friend across the way, who I believe intends to make further observations in committee.
After the argument of my hon. friend I cannot see that under the Paterson scheme, there has been any reduction, except the one cent which prevailed when the embargo was placed on the importation of Australian butter. The result was that Australian butter

did not come into Canada because the embargo kept it out. I am not complaining about that, nor would I complain very much if there was no duty upon Australian butter or if it had a free market in Canada. Hon. gentlemen opposite, of course, in order to carry out the theory that they advanced so strenuously during the recent campaign when they talked so much about the importation of New Zealand butter-and undoubtedly they did a great deal of damage to our government-felt it incumbent upon them to put a duty on butter, notwithstanding the fact that we told them time and again that owing to the 'Canadian product being shut out of the American market, we would within a period of a year or eighteen months at least be on an export basis; then it would not make very much difference whose butter was being imported into this country, for prices would be regulated in the markets in which we would have to sell our surplus. And that has happened to-day. Notwithstanding what hon. gentlemen opposite said throughout the rural constituencies, to-day they are forced to go back and admit that all the duty they have placed on butter does not help the price one iota so long as we are on an export basis. For a short time we did happen to be out of the export market, then a higher price for butter prevailed in Canada than in any other country, and New Zealand promptly diverted her Shipments from Britain to Canada. At once hon. gentlemen opposite took advantage of that exceptional condition to decry the Australian treaty and to make statements from one end of Canada to the other that were utterly untrue. In consequence they were able to secure the return of a greater number of their candidates than otherwise would have been possible. If it was butter that defeated the late government, and the same condition prevail again that we become a butter importing country-it will not happen, of course, because the United States will not admit our butter into their market again, and we shall be on an export basis when hon. gentlemen opposite appeal to the country four years hence-a duy of five cents a pound will not keep out imports of butter, particularly from Australia, for so long as the Paterson stabilization scheme is continued we shall have practically free imports of butter from Australia, and it would simply be a fitting retribution that hon. gentlemen opposite should slide out of office on the article on which they slid into office.
As the result of this treaty I hope our trade with Australia will be at least as great in volume as it was under the former treaty

Australian Trade Agreement
which hon. gentlemen opposite maligned so much. While I do not expect that that trade will be so much in favour of Canada, yet if we get our share of it, then it is all to the good. May I say to the government that so long as they secure business for Canada by treaties negotiated on a reasonable and equitable basis, then I am for them, for I have some sympathy with the statement made by the hon. member for Stanstead (Mr. Hackett) the other night. He mentioned a few things that are worth thinking about. For the last twenty years we have been improving our ports and our railway facilities, we have been spending huge sums of money upon our transportation systems, largely for the purpose of external trade, but the action of the government that he supports has put the greatest stumbling block in the way of our securing that trade and making payments on the vast expenditures so incurred. Every time there is any encouragement for Canada to increase her external trade, I am for it, so long as the trade treaty is upon reasonable and equitable terms for Canada.


Peter John Veniot: Mr. Speaker, I cannot allow this treaty to be adapted by the house without expressing my views. At the outset permit me to say that I approve of the treaty in almost all its terms. I have listened to the various speeches made this afternoon and to-night, and I have come to the conclusion that the introduction of this treaty has been a field day for British Columbia. The only reason I rise to enter a protest of any kind is that in some respects the treaty constitutes discrimination against the maritime provinces. I find item 51 (c) covers fish preserved in tins or other airtight vessels including the weight of liquid contents. This gives salmon a preference of 3 pence while crustaceans and other canned fish have a preference of only 1) pence. Now, every one knows that British Columbia is the largest producer of salmon in the world-


Richard Bedford Bennett: Not now; northern
Russia and Japan.


Clarence Joseph Veniot: Well, outside of northern
Russia.


Richard Bedford Bennett: And Japan.


Peter John Veniot: British Columbia does not
produce the crustaceans and other canned fish to which I have referred; these are produced in the maritime provinces and exported in large quantities. I wish to enter my protest on behalf of the fishermen of the maritime provinces against this way of treating that section of the Dominion. I have no fault
to find with the substantial preference given British Columbia in that respect, but I claim the maritime provinces should have been put on an equal footing with relation to their crustaceans and other canned fish as is British Columbia with respect to its salmon.


John Livingstone Brown: I am not
going to discuss the treaty at any length, Mr. Speaker, but I should like the Minister of Trade and Commerce (Mr. Stevens) to secure accurate information as to the present standing of the Paterson stabilization scheme. I have before me the November issue of the Journal of Agriculture of South Australia, and I desire to quote two paragraphs from a paper read by Mr. R. J. Finlayson at a conference of the Murray Lands Branches at Minardie. on October 1, 1929. Referring to the Paterson stabilization scheme he said:
The price of butter having advanced 3d. per pound, the farmer was immediately paid the enhanced price by his factory. Out of this 3d., however, he received only lid. per pound, the other lid. per pound being placed in a fund to provide the money necessary to pay a bounty of 3d. per pound (the difference between the two markets) on butter exported. The factory exporting is, therefore, no better or worse off than it was before, while the farmer, under this arrangement, was lid. per pound to the good.
Under the scheme all factories in the commonwealth have contracted to subscribe to the scheme, and to furnish each month to the secretaries of the various states duly certified returns, showing the amount of butter manufactured and the amount of money deducted from the farmers' payment. This money, which is forwarded to the secretaries, is placed in the bank to provide funds for the paying of bounties when butter is shipped.
After the plan had been tried out for two years, the committee found from experience gained that it could give further advantage to the supplier by increasing the levy and bounty, therefore on July 1st last-
I may say this is dated November 15, 1929.

the levy on the farmer was raised to lid. per pound and the bounty available for butter exported was raised to 4Jd-. per pound. The difference between the two prices was then 2fd. per pound, which amount the farmer receives by the extra price which he is paid for his butter.
It would seem that when this address was delivered the export bounty was equivalent to 9 cents per pound, but this evening I was informed by a gentleman who makes it his business to know these things that recently that amount has been reduced. He was not able to tell me exactly the amount, but was of the opinion that it was about 7) cents.


Henry Herbert Stevens: I hold in my hand a recent despatch which states that the Australian

Australian Trade Agreement
bounty on butter manufactured for export has been reduced from threepence to two-pence-halfpenny per pound, with effect from April 12.


Mr. DEPUTY SPEAKER:: Ait the moment hon. gentlemen should address themselves to the principle of the bill. A discussion of the individual items would be more in order in committee.


John Livingstone Brown: Perhaps the minister will be prepared to give a little more information when we discuss this measure in committee. I hope he will secure the fullest possible information on this point. I should like to know not only the bounty at the start, but what it was later and what it is at the present time. I should like also to be informed as to the time the Paterson scheme became effective. To-night it has been stated that this scheme was in operation when the former Australian treaty was negotiated. On that point I musit express a little doubt, because I am told the Paterson scheme came into effect in January, 1926, while the former treaty was made in 1925. Perhaps during the discussion in committee we will get these matters cleared up.


William Richard Motherwell: This will be the third occasion this session on which I have had the pleasure of supporting a government measure. The first was in connection with a very modest bill to amend the Root Vegetables Act, and I made what little contribution I thought necessary to assist the minister at that time. The second occasion was when I supported the duty on foreign oranges. That was a very unpopular thing to do, but nevertheless I think it will work out all right: That action was on all fours with the policy of the Liberal government in respect to bananas a few years ago, when the trade treaty with the West Indies was negotiated. Prior to that time 'bananas were nondutiable coming from all parts of the world, and the government of that day imposed a duty of 50 cents a stem on foreign bananas, leaving them free from the West Indies and other British dominions. That has worked out splendidly, and I think that the same result will come about in connection with oranges. I hope that within a short time we will be able to obtain sufficient oranges from the various parts of the British Empire to make us independent of foreign countries.
To-night I have much pleasure in supporting this bill, almost without reservation, though I intend to point out some defects and I hope my hon. friends will not take exception to what I have to say. I think they realize now

that they cannot buy a market in any country without paying for it. You cannot go into any store in this city and buy a hat, a pair of boots or anything else without having to pay some coin, and you cannot go to a sister dominion or to any other country and secure a market without not only giving something for it but also allowing them to export commodities which will compete with commodities produced in our own country.
I am supporting this bill for two particular reasons. It is the first evidence this session of returning trade sanity on the part of this administration, and I think it would be a terrible thing to not encourage that development in the future. The second reason is that this is the proper thing to do. I think from now on this parliament as a whole should support any bill which brings into being a treaty, after it has been threshed out with a sister dominion or whatever country it may be. When the government come down with an agreement and say, "This is the best that can be devised," we should give it a trial before condemning it. That is my honest opinion, as one who 'believes in the principle of interempire trade. Just imagine, Mr. Speaker, what would happen to this bill-because there are weak points in it, although to-night I am looking only for the strong points-if we ripped into it as hon. gentlemen opposite did with regard to the first Australian treaty from its very inception. Would that promote the cause of inter-empire .trade? I do not think it would. So I think from now on Canada should realize that any treaty brought down by any government should be given a fair measure of support before it is subjected to severe criticism by the. opposition, whatever opposition it may be. Give it a probationary trial; I think that is fair to any government, and it is the proper thing to do. I realize that to-day because of the utterly unfair criticism of the Conservative party in connection with the first Australian treaty. I do not want to say that with any soreness or bitterness; I speak as one who has experienced what it means to have a government measure very unfairly criticized and a treaty jeopardized. I always thought the old treaty was economically sound, but it was politically weak when exposed to the attack of an opposition which knew no limits to its criticism. So for those two reasons I support this bill.
Now I should like to refer briefly to some of the remarks of my hon. friend from Lincoln (Mr. Chaplin). I have been asked once or twice this session, I think by my hon. friend from North Renfrew (Mr. Cotnam), why the government enacted the first treaty

Australian Trade Agreement
containing the tariff provision it did contain with regard to butter. It was stated from Melbourne, just after the late Mr. Robb left there in 1924, that we had the option of either increasing the general tariff or lowering the preference; we could do either so long as we gave Australia a 3 cent preference. Those are not my words; I say that is the statement which came from Melbourne. Assuming that to have been correct, we had the option of [DOT]either putting up the general tariff to 7 cents and leaving the preference at 4 cents or of putting the preference at 1 cent and leaving the general tariff at 4 cents. Whether we did rightly or wrongly, we took the latter course, which was in conformity with the general policy of the Liberal party in regard to preferences. We believe in creating preferences by lowering the British preference rather than by raising the general tariff. We raised the general tariff in connection with bdnanas as I have said, but that was an exceptional case.
As I say, rightly or wrongly we chose the. course which conformed to the general policy of the Libera! party with respect to preferences and lowered the British preferential rate instead of increasing the general rate. As a matter of fact I do not believe we could have passed the bill through this house if we had increased the general rate. As you know, Mr. Speaker, at that time the Progressive party were sixty-four or sixty-five strong and we had a majority of only one if everyone was in the house, so in a measure we were dependent upon that party. I think they advocated an even lower tariff then than the Liberal party, although we have some pretty low tariff men on this side of the house.


James Dew Chaplin: If my hon. friend will look up the records he will find that the Progressive party voted against that treaty.


William Richard Motherwell: I know they did last session, but not at that time on butter. And it was on a different question altogether-raisins, not butter. There is one matter with which I fancy the newer members are not familiar. The very first session after the late government came into power, the session of 1922, there was a real stand-up fight on the question of oleomargarine. The question was whether or not the prohibition of the manufacture and importation of oleomargarine should be restored. The government that had preceded that Liberal administration had continued the manufacture and free importation of oleomargarine, and when we came into power I myself took the position that we should revert to the pre-war condition of prohibition of this commodity.
The prohibition had been instituted by the Hon. Sydney Fisher, and it was abolished during the war, in 1917, as a war measure. I felt it was only fair all around, to the dairy industry particularly, that the prohibition should be restored, and the fight continued in 1922 and 1923, and almost into 1924. It seemed to me that anything in the way of a tariff that would artificially raise the price of butter at that time would once more start the agitation for the manufacture and importation again of oleomargarine. For four years after the Australian treaty was enacted butter in Montreal, No. 1 pasteurized, was selling at 40 cents per pound wholesale during the month of January. That would mean practically 50 cents per pound retail; and with butter selling at 50 cents per pound-indeed, it went higher, but we may take that as the average-and especially so soon after the struggle over the oleomargarine question, there was almost bound to be a renewed agitation for the removal of the prohibition against the manufacture and importation of that substitute. It was a severe fight, and I did not want the experience a second time. That was one . reason why I favoured a reduced preference to one cent per pound on butter rather than raise the general rate to 7 cents. I was of the opinion that anything that would raise the price of butter artificially would surely create an agitation for the importation and manufacture again of oleomargarine. Those were three reasons why it seemed advisable and expedient to do what we did at that time.
I will go further. The national dairy council came to the government on one or two occasions during 1926 and 1927 and interviewed Mr. Robb and myself with regard to the increasing of the duty to what it was before, that is, up to 4 cents. Mr. Robb invariably advised them to go to the tariff board. But the national dairy council had nothing in particular to submit to the board at that time. They had no evidence that New Zealand butter was injuriously competing with Canadian butter, and it was not until 1929 that they did appear before the board. By that time they felt they had a case, and as soon as they presented that case the matter was approved of by the tariff board and Mr. Dunning took the necessary steps to restore that duty, giving six months' notice. I suppose that had the dairy council worked up a case at an earlier date they would have gone to the board and obtained the same results. But as soon as they did go in 1929 they got the approval of the board and of

Australian Trade Agreement
the government as well. That is the story in a nutshell.
Under this new treaty the duty is one cent more than the dairy council asked for. What that 5 cents will mean I do not know. Now, I do not pretend to be very well versed in economics, but it was news to me that Australia could choose her exchange at will. I think there was a time when she could.


Henry Herbert Stevens: It is arbitrary.


William Richard Motherwell: It may have begun as an arbitrary depreciation of currency but 1 fear it is involuntary now. I remember well when our money had depreciated 13 or 17 cents. That was no act of Canada's. My own impression is that the exchange or any country depends upon the money markets of the world, and I have more than a suspicion that this is about the way it stands with Australia to-day, although I hope, as I am sure we all hope, that, they will soon be back to par. But in the meantime will the Australians not make as much on the present exchange as the duty represents? Will they not make 5 cents on the exchange? I think they will.
The hon. member for Macleod (Mr. Coote) this afternoon made a speech that had something in it, not only as regards butter but as regards every other commodity which Australia sells to Canada. I do not wish to make too much of this, but if the minister is relying on any deliberate act of Australia to restore her money to par to set this matter right, in order to give the 5 cents its full value, he is making a treaty based on pious hopes rather than on actual facts. I hope he will not resent my calling this to his attention. More than that, he has thrown away, rightly or wrongly, any power to dicker on the basis of the dumping duty.


Henry Herbert Stevens: Oh no.


William Richard Motherwell: After three months' notice, of course. That was always there. I myself got the opinion of the Deputy Minister of Justice that we could have abandoned any one feature of the act ourselves by giving six months' notice. And if I remember rightly that was what Mr. Dunning did in regard to New Zealand.


Richard Bedford Bennett: It was the whole treaty.


William Richard Motherwell: That may be; I
was not here at the time. However, I had the opinion of the Deputy Minister of Justice that the duty on butter could have been dealt with separately if we had thought it advisable to do that, by giving the usual six months' notice. At any rate, I do not believe that the national dairy council, when they supported 
the proposal for 4 cents rather than 8 cents on Antipodean butter, took into consideration the question of depreciated currency. And I must admit that when I discussed the matter earlier in the session I did not take it into consideration either. But I know what the effect is. I shipped grass seed into the United States for many years, at a time when our currency was depreciated, and I was surprised when I deposited in my local bank the cheque I got from the American side for my carload of grass seed to find that for every 8100 I had been expecting I received 1113 Canadian dollars. That was the first time in my life I was so agreeably surprised by a similar cause. I knew, of course, that if I spent that money in a foreign country I should lose as much as I had gained. I knew in a general way that a depreciated currency enabled you to sell your commodities in another country to better advantage than you could when your own money was at par. So much for that.
May I now briefly refer to eggs. I always thought that two weaknesses had developed under the old treaty; I will make that admission. Those weaknesses were not inherent in the treaty at the beginning but they appeared later. I refer to the matter of eggs and onions. I do not believe that anyone ever expected that very many eggs would be shipped either way. Under the old treaty eggs from Australia were free. I am not sure at what rate eggs were going into New Zealand and Australia from Canada under the British preference, but if I remember rightly the rate into New Zealand was 8 cents and into Australia 17 cents. But that did not matter much so long as no eggs were moving either way. And the fact is that practically no eggs came from Australia to Vancouver or elsewhere in Canada. But some trade was worked up once or twice when the markets for eggs were quite low in eastern Canada; Vancouver tried to ship to Australia. Their eggs, I believe, had to climb over a wall of 10 or 17 cents; I do not remember exactly which. Perhaps my hon. friend can tell me what it was under the old treaty. What is the duty on eggs going into Australia under the new treaty? Are they not 10 cents into Australia?


Henry Herbert Stevens: I think they are 10 cents.


William Richard Motherwell: Sixpence.


Henry Herbert Stevens: I am not certain.


William Richard Motherwell: It seems strange
that Canadian eggs can go over the Pacific waters to Australia in fair condition while Australian eggs cannot acceptably come to Canada. If the hon. Minister of National

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Revenue (Mr. Ryckman) were in the chamber I believe he would agree that Australia and South Africa were about to ship eggs to Canada when he put a dumping duty on eggs. I believe my information is correct, because I obtained it from the Canada Gazette or the newspapers or elsewhere.


Henry Herbert Stevens: It has never applied against Australia, and no eggs came in from that country.


William Richard Motherwell: They did not come in because there was a dump put on.


Henry Herbert Stevens: The dump was not applied against Australia.


William Richard Motherwell: Was there not a dump put on last fall and applied to South Africa?


Mr. GOTT:: For the last ten minutes the hon. gentleman has been speaking of the old Australian treaty.


William Richard Motherwell: I would rather speak of the new one, but I wanted to make a comparison.


Armand Renaud La Vergne: We are discussing the new Australian treaty. The hon. member should wait until we go into committee before asking questions.


William Richard Motherwell: Some time ago I promised the hon. member for North Renfrew (Mr. Cotnam) that when the new Australian treaty was before the house I would answer certain questions which he asked regarding butter and eggs.


Armand Renaud La Vergne: The hon. member may discuss the treaty, but he should not put questions to the hon. minister who is not allowed to answer. He should wait until we go into committee.


William Richard Motherwell: 
Some hon. MEMBERS:: Hear, hear.


William Richard Motherwell: The government I repeat has had the experience of five or six years and if they could not make an improvement on the old treaty they would not amount to very much. I hope we will learn, as an opposition, from hon. members opposite, how not to treat a new treaty with a sister dominion. Perhaps that will be one benefit which will come out of this treaty.
I do not think it would be quite fair to judge the trade results of the new treaty by the old. It is not fair to compare the last four or five wonderful years of development under the old treaty with the next four or five possible sub-normal years under the new. I do not know how long I will have to keep myself under discipline and refrain from criticizing this new treaty. Conditions probably will not be sufficiently normal for at least two years, but I do not know whether I will have sufficient grace to keep quiet about this treaty and give it a fair trial for that length of time, but I will try.


Mr. ALFRED SPEAKMAN (Red Deer):: Mr. Speaker, I intend to make but a few general observations on the principle of this bill. In that this treaty represents an earnest and honest endeavour on the part of the government to improve the trade relations of Canada with our sister dominion, I think hon. members generally thoroughly approve

Australian Trade Agreement
of it. My own opinion is that the treaty is a fair one for Australia and a useful one for Canada. It has every promise of bringing to us that which we need and of providing an extension of markets for many of our products, particularly those of our fisheries, our lumbering and paper industries, and certain of our manufacturing industries. The principle of the treaty is similar to that of the treaty which was put into force by the former government.
So far as Canada is concerned, there are two main points in the treaty. First, we give Australia an advantage in our markets for her agricultural products, and, second, we give Australia a preference on some of her fruit exports. As to the latter, we give a preference by increasing the duty against other countries, notably the United States, and in so doing we extend the principle made operative by the former treaty in respect to raisins and apply it to other fruit, such as oranges.
On behalf of agriculture I must voice a protest. The inevitable outcome of a treaty with a dominion such as Australia is that any advantage given to certain classes of industry in this country must be paid for. Unfortunately, owing to the fact that Australia is not a manufacturing country, that preference must be paid for by agriculture, not by a reduction of duty but by the opening of our doors to the agricultural products of Australia. I am not taking violent objection to that. Anything we get that is worth while for Canada as a whole must be paid for by some sacrifice on our part. It is unfortunate of course that invariably such sacrifices must be made by agriculture; to what extent this will affect agriculture time alone will show. I am not of opinion that Australian butter, eggs or meat will at the present time at least, enter Canada in any large quantities to displace the Canadian article. As regards butter-and I am speaking of butter because it was perhaps the outstanding issue of the last treaty, particularly as it related to its extension to . New Zealand-the situation has completly changed since that time. We were then in a position to take advantage of a domestic market and to receive a higher price for our butter in this country than the world market would justify. At the present time we are, and I would expect for some time to come we shall be, on an export basis. Therefore I doubt very much that there will be any large imports of Australian butter, and also whether any imports there may be will have any effect on the price under present conditions.

Speaking generally, then, we have negotiated a treaty favourable to this country; it is favourable particularly to certain industries, and to the extent that it is paid for by any corresponding sacrifice within this country, it is paid for by agriculture. Time alone will show the extent to which agriculture may have to pay for it. But on the face of the treaty as it stands to-day, and leaving out two factors which I shall mention briefly in a moment, I think it is a fair treaty which can be supported. We can leave it to time to show whether it will work out to the ultimate advantage of all. I certainly agree with the ex-Minister of Agriculture (Mr. Motherwell) that it would be foolish, unjustifiable, for us to attempt at this stage to destroy the treaty.
The two factors to which I allude, and the full significance of which is at this stage unknown, are the question of exchange and the question of the Paterson bonus scheme upon export butter. It is obvious, by the action of the Australian bankers as described by the Minister of Trade and Commerce (Mr. Stevens), that, whatever arguments may be adduced in opposition, they at least believe that this discount on their exchange works to the advantage of their exports, making it easier for them to place their exports in other countries. The same thing is clear from our own experience when our currency was at a discount in the United States and when we could ship cattle into that country and pay the duty through the disparity in exchange. How long this situation will last and to what extent it will affect us, time again alone will show. At the moment, however, it is apparent to everyone that the disparity in exchange alone will at least equal the protection which remains to domestic as compared with Australian butter, and the same thing applies to Australian meat, eggs and any other article coming from that dominion. In the same way and to the same degree Canadian exporters, those who, it is expected, and we hope, will be benefited by this treaty, will be placed at some disadvantage if the expressed object of the Australian bankers is fulfilled, namely, to increase exports and to discourage imports, to make it easy for them to sell and to make it difficult for us to sell in return. While this fact is obvious, the extent to which it will operate and the time over which it will extend are unknown quantities.
As regards the Paterson bonus scheme, there is a levy of two and a half cents a pound in our own money and a bonus of five cents a pound. This means a net bonus of two and

Australian Trade Agreement
a half cents a pound, because the export butter pays one-half of the bonus it receives. So we have to add to the other advantage another two and a half cents a pound. Again, no one knows the extent to which that will work, or to what degree it will place a disadvantage on our farmers. So long as we are on an export basis, may I repeat I doubt whether it will make much difference, but the moment we slip below an export basis, then we shall be able to see exactly what the result will be.
I repeat that I am sure no hon. member in our part of the house would feel justified in placing obstacles in the way of a treaty which in its general terms is designed to nullify part of the policy of the present government; which is designed to encourage international trade and the interchange of commodities between this Dominion and Australia. So far as the disadvantage may be placed upon any individual product of the Canadian farmer or manufacturer, we may again look to article IX if that disadvantage becomes obvious and if the unfairness becomes equally so. It is certainly to the advantage of the government to see that this treaty operates to the benefit of Canada and does as little harm as possible to any Canadian citizen. Undoubtedly for the sake of their own reputation, apart from their honest desire to serve Canada, they will see that such is the case. We shall trust, then, that under article IX they will be able to meet any unexpected and untoward situation which may arise, and in the meantime, reserving any further remarks until the bill is in committee, we can assure the minister of our qualified and, in view of the principle which I have already outlined, somewhat critical support.


[Stage Direction]
Motion agreed to, bill read the second time and the house went, into committee thereon, Mr. MacDonald (Cape Breton) in the chair.
Sections 1 to 5 inclusive agreed to.
On section 6-Coming into force.
William Richard Motherwell: I assume there can be no material changes in this bill without consultation with Australia?


Richard Bedford Bennett: No.


William Richard Motherwell: Then we might as
well put it through as fast as we can read it.


[Stage Direction]
Section agreed to.
Schedule, articles I to XI inclusive, agreed to.
On schedule A.
Armand Renaud La Vergne: (Mr. MacDonald, Cape Breton):	Is it the wish of the committee
that we consider the items in the schedules separately?


Some hon. MEMBERS:: No.


Mr. HOWARD:: I should like to say a
few words concerning item 18 in schedule A, which deals with butter. I shall make some statements and if I am incorrect I hope the Minister of Trade and Commerce will put me right. Under the old legislation the duty charged against butter entering Canada from Australia was one cent per pound. At that time the Minister of National Revenue applied the dump against Australia. With six cents added to the one cent duty, the duty against butter from Australia was raised to seven cents a pound. Under the present schedule the dump against butter is not to be applied under any consideration, and the duty of five cents per pound is in force. The result is that the duty against butter is two cents less than it was under the late administration.


Henry Herbert Stevens: My hon. friend is not
quite correct. I have already explained that Australia always felt more or less hurt concerning the action of Canada in applying the dump. She felt that under the terms of the old treaty such action should not have been taken, and the matter of the dump became one of the principle points of adjustment between the two countries. Through the adoption of article IX an adjustment was reached and while it is clearly understood that section 6 of the Customs Tariff,- the dumping clause, will not be applied, article IX will take its place. Instead of one cent per pound against butter we have a definite duty of five cents. Should Australian butter enter Canada in a manner which would prejudicially affect the interests of dairymen, notice is given to that effect. I may say that this article has been in operation, although it has not existed in the form of a contract. Australia however has voluntarily complied with requests to curb exports to this country when it was felt that such exports would be injurious to Canadian interests. Under the article such a curb becomes obligatory. If measures to remedy the conditions complained of are not put into effect by the exporting country within three months, the notice is made effective by action of the importing country. We believe article IX will be quite effective if not more effective than the dump, and will remove the stigma of applying a dumping duty.
4074	COMMONS
Australian Trade Agreement


Charles Benjamin Howard: With those remarks I
agree most heartily, nevertheless the statements I made a few moments ago still stand. It is true that if butter enters Canada to the detriment of the Canadian dairymen the government may apply article IX. That condition however does not change one iota the statement I have just made. The late government did apply the dump of six cents a pound against Australian butter. With a duty of one cent a pound the total duty became seven cents. The present rate is five cents; there is no denying that statement. With the last part of the minister's remarks I fully agree; naturally if butter comes in the government will have the right under article IX to rectify the situation.


Alfred Speakman: I notice under a prior
article that the treaty itself stands for one year, after which it remains in force until terminated by six months' notice on either side. Under article IX can three months' notice be given at any time after the treaty comes into force?


Henry Herbert Stevens: Yes, at any time.


Alfred Speakman: I was going to ask the minister a hypothetical question as to the possible effect of depreciated currencies, but I believe his answer has covered the point. I understand that if Australian butter or any other agricultural product comes in in such quantities and at such prices as prejudicially to affect our own interests, article IX will be invoked.


Mr. HACKETT:: I believe that the statement of the hon. member for Sherbrooke (Mr. Howard) is incomplete. I think it should be completed. The Paterson scheme which obtains in Australia has undergone a very radical change since last year. The bonus to butter exported is only 24 cents per pound, and not 5 cents, as-


William Daum Euler: Twopence halfpenny-5
cents.


John Thomas Hackett: The bonus is only 2i
cents a pound, I think if the hon. gentleman will hear me for a moment he will agree with me. For every pound of butter produced in Australia 24 cents is paid into the pool, and when any portion of that butter is exported it is bonused to the extent of 5 cents per pound.


Charles Benjamin Howard: Yes, 5 cents.


John Thomas Hackett: But having contributed
24 cents a pound to the pool the net bonus is only 24 cents.


William Daum Euler: Relatively that is exactly
the same as under the six cents scheme.


John Thomas Hackett: Relatively, but there is
an entirely different situation in Canada, which makes a difference. The point I wish to accentuate particularly in connection with the remarks of my hon. friend from Sherbrooke is, Canada is now on an export basis and so long as we are on an export basis we are absolutely immune from any harm which may come to us through importations from Australia.


Mr. MACKENZIE (Vancouver):: Is my
hon. friend speaking for the government?


John Thomas Hackett: To the government, not
for it. So that any harm which may have come to Canada when it was not on the export basis-and that was our pitiful plight for three or four years-has now been removed by the fact that again we are on an export basis and we can suffer no harm or injury from this item in the treaty so long as we remain on that basis.


Charles A. Stewart: If my hon.
friend will look at Hansard he will find that speeches very similar to his were made in 1925.


William Daum Euler: I wish to say to my hon.
friend from Stanstead (Mr. Hackett) that under the former government so far as Australia was concerned we were never in any pitiful position, because Australian butter was not permitted to come in. I think my hon. friend is referring to New Zealand butter and not the Australian product at all. In the course of my remarks this afternoon I asked a question of the government which has not been answered. It was with regard to article VI, which states:
Nothing in this agreement shall be construed to affect the right of either country to impose any special duty or tax (other than dumping duty)-
What is the significance of that particular clause?


Henry Herbert Stevens: 
Charles A. Stewart: How do
you figure it so far as Canada is concerned-


Wilfred Hanbury: We are not interested-


Henry Herbert Stevens: Wait a moment,1 please.
It was reduced to 2J pence per pound, or 5 cents, 2i cents of which is paid into the pool and the balance is t'he net bonus.


Charles A. Stewart: That has always been so.


Henry Herbert Stevens: Yes, but my hon. friend
will pardon me; the idea has been that the full amount of the bonus was recognized throughout the history of this stabilization scheme.


Charles A. Stewart: Yes.


Henry Herbert Stevens: That is not so, because
originally, as I pointed out, down to December last the bonus was 9 cents a pound, but having paid 3 cents into the pool that left an actual bonus of only 6 cents a pound. That is what has been applicable for five years. But this year these reductions have occurred so that now the actual bonus is only 2J cents a pound. I hope that is clear because I have applied in each case exactly the same operation.


William Richard Motherwell: Having regard to
the lower value of butter to-day is not the 2-5.-cents bonus just as high as 6 cents was, say, a year ago? In other words, relatively the bonus is just as high as it was formerly.


Richard Bedford Bennett: Mr. Chairman, the hon.
member for Sherbrooke, (Mr. Howard) is entirely in error in stating that the dumping duty was 7 cents.


Charles Benjamin Howard: I did not say it was 7
cents; I said 6 cents.


Richard Bedford Bennett: Or 6 cents. The rate is one cent and the dumping duty has averaged 3 cents under the treaty of 1925, the maximum being 16 per cent of the duty paid value, and 30 cents being the maximum, 15 per cent of that is 4i cents, which added to the one cent made 5J cents as the maximum. But the maximum was 30 cents, the general price was less. At 24 cents per pound, 15 per cent meant a duty of 3-6 cents per pound, which added to one cent made 4-6 cents. As is known, the Australians objected very strenuously that it was bad faith to impose that duty upon them at all. We know a former member of the late administration wondered how it could be done, because where the duty is specific a dumping duty applied on an ad valorem basis is a little difficult to appreciate, there being no ad valorem duty; but the hon. member for Weyburn (Mr. Young) will be able to solve that difficulty without any trouble.
While I am on my feet I should like to pay one tribute to our Australian friends. Last year was a serious year for the dairy industry of this country. Perhaps hon. gentlemen will be glad to know that when the Australians were passing through here on the last day of the old year, after they had discussed the matter with the Minister of Tradte and Commerce, they made an agreement with the Minister of Agriculture (Mr. Weir) whereby they stabilized the price of their butter that they had already shipped for this country, a part of it through London, and the result, according to Mr. Robinson, who is no particularly friendly witness so far as our duties are concerned, meant last year not less than $10,000,000 additional money paid to the dairy interests of this country. Now, $10,000,000 is a very substantial sum to have disbursed in one season to the dairy interests of Canada by reason of the action so taken. That is the testimony of Mr. Robinson himself, and if any hon. gentleman has any doubt as to what his words were I think it well that they be read into Hansard.


Charles A. Stewart: As a matter of curiosity, what became of the butter from Australia that was in storage in Canada?


Richard Bedford Bennett: The Minister of Trade and Commerce can give the details of that.
We thus had our wholesale butter market-
Said Mr. Robinson:
-maintained all winter at a level from seven to ten cents over world parity, and most of the time at the latter figure. During the period in question about 75,000,000 pounds of butter was produced in this country . . . . which thus resulted in an extra return to the



Australian Trade Agreement
producers of about $7,000,000. This figure of $7,000,000 applies to butter only, and does not take account of the fact that prices of whole milk, sweet cream, ice cream, etc., could not have been maintained at the level actually paid if butter had been selling for 22 cents instead of 32 cents. The actual benefit received by dairy producers last winter in the form of extra income was therefore greater than the above figure. I could not hazard a guess at the real total, but am very sure that it was over $10,000,000.
Mr. HAiCKETT: Will the right hon. Minister of Finance tell the committee if the excise duty of one cent applies also to butter?


William Daum Euler: One per cent.


John Thomas Hackett: One cent on the dollar.


Richard Bedford Bennett: Yes, that applies.
Mr. MdMILLAN (Huron): I too accept this Australian treaty under reservations, and those reservations-


Richard Bedford Bennett: There is great controversy in England about reservations.


Mr. McMILLAN (Huron):: I am not going to discuss those provisions at the present time, but in reply to the hon. member for Lincoln, who made such a tirade this afternoon against the old treaty, I should like to place on Hansard the figures of our exports and imports from Australia for the fiscal years from 1925 to 1931 which speak for themselves.


Eccles James Gott: We had that this afternoon; it is all on Hansard.


Thomas McMillan: Very well; if so that is sufficient. Then with respect to butter: While the statement read by the Prime Minister undoubtedly is Mr. Robinson's opinion, it is not borne out by the prices of Canadian butter when compared with the prices of butter on the British market. From the early part of 1926 until the election of 1930 the price of Canadian butter in Montreal was invariably higher than the price in the world market.
Just before schedule A is carried I should like to refer for a moment to the matter of sugar. Tariff item 135 reads as follows:
Sugar, above No. 16 Dutch standard in colour when imported or purchased in bond in Canada by a recognized sugar refiner, for refining purposes only, under regulations by the minister, when exceeding 98 degrees, but not exceeding 99 degrees polarization, 31-64 cents per hundred pounds.
I have no fault to find with that rate of duty, but I want the committee to realize that this grade is practically refined sugar, and the present duty from Australia is $1.09 per hundredweight, so that this is a clear hand-out

to the refiners of this country of 77.36 cents per hundredweight. On the 20,000,000 pounds of sugar imported from Australia at present this gives the refiners the nice little hand-out of $155,000 per annum.


Raymond Ducharme Morand: Think of the poor consumer.


Thomas McMillan: That is just what I am coming to. It has been suggested that Australia may be able to supply our entire requirements, which amount to some 800,000,000 pounds of sugar per annum, and this would mean an annual hand-out to the refiners of $6,188,000. I have no fault to find with the duty suggested under this item, but for God's sake give the consumers of this country a part of that reduction.


Alan Webster Neill: A few moments ago the hon. member for Stanstead, speaking on the Paterson scheme, said it had been radically reduced. Those were his words as I took them down, but there is nothing to prevent its being radically increased again and we have given away the only measure by which we could have prevented that from happening, the dumping duty.


John Thomas Hackett: Article IX then would apply.


Alan Webster Neill: No, I do not think it would apply, because any action under article IX would call for retaliation immediately. While I am on my feet may I do a tardy measure of justice and clear the reputation of my hon. friend from North Waterloo (Mr. Euler) by telling the Minister of Trade and Commerce that it was I who referred to that item regarding corsets. The reason I mentioned it only by number was because of that modesty which he would not allow me to possess half an hour ago. These two material errors of fact may be taken as a fair gauge of his accuracy with regard to other remarks of mine.


Charles Benjamin Howard: I do not accept the statement of my right hon. friend that we are charging one-half cent per pound more than under the old tariff, but I would like to direct attention to the fact that at the time we were charging 7 cents on Australian butter coming into Canada-


Richard Bedford Bennett: We never did.


Charles Benjamin Howard: -the price of butter in Canada was 35 cents a pound. To-day the price is only 20 cents per pound.

Australian Trade Agreement


Richard Bedford Bennett: There never was a time when there was a 7 cents duty, and there never was a time when the price for duty purposes was 35 cents.


Edward James Young: A moment ago the hon.
member for South Huron spoke of the reduction in duty on sugar above 98 degrees polarization. I should like to ask the minister what further refining process is necessary in connection with that sugar. I notice in the tariff schedules there is nothing quoted above 98 degrees, which seems to be fully refined sugar. I should like to know if further refining is necessary.


Henry Herbert Stevens: Under our general tariff
sugar up to 98 degrees carries a steadily increasing ratio of duty. From 98 to 99 degrees it jumps, instead of at about one cent per pound, from about 30 cents to 35 cents. There is a little higher degree of refining in the first process. As hon. gentlemen know, there are two general processes, the milling and the refining. In most of the countries exporting sugar to Canada the sugar is purified to 96 degrees, and some of it to 97 and 98 degrees. One colony, Mauritius, I think, purifies it up to 99 degrees, but when Australia installed their milling system, which merely deals with the raw cane, and established their refineries they did so on the basis of the first process carrying the purification up to about 99 degrees-I am not certain whether it is 98j or 99 degrees, but for our purposes they are about the same. So in order to give Australia a portion of our Canadian market for what is known as raw sugar we increased the classification from 98 to 99 degrees, which permits the sugar from Australia to enter our market for refining purposes.
The hon. member for South Huron is mistaken, and I do not criticize him for it because these are technical matters. I do not pretend to be an expert in them, but I have given a good deal of study to this question during the past few months, and I can assure the hon. gentleman that there is no bonu3 at all going to the refineries under this item They have to pay the same ratio of increase for this added degree as they pay down the whole list; it increases at a steady ratio, and sugar of 99 degrees polarization is not a refined sugar. Probably it is a little more intense, but they pay a little more for it for that reason, and this simply puts Australia on the same basis as the West Indies and other parts of the empire in that respect.
May I add this one word: I consider this one of the important items on the Australian side of this agreement. One of the difficulties 22110-2591
in our trade with Australia is that much of our business with them is bulk business- paper, lumber, and heavyweight cargoes- while much of their business with us is more or less of confined space, like dried fruits, and so on. It was thought desirable to get some bulk cargoes back from Australia for freight-equalizing purposes, and sugar offers about the only commodity we can bring in. We expect that Australia will obtain from 50,000 to 100,000 tons a year of our business which she has not heretofore received from this sugar item.


Edward James Young: I believe I have seen that
sugar refined to 99 degrees, and it is a sugar that could be sold in the stores. I wonder why its importation at this rate is confined to refiners. Why should no one else be allowed to bring it in at the same rate?


Henry Herbert Stevens: I doubt whether that
would be desirable. When I was a young lad in the old country, in some of the stores they used to sell what was known as. Demerara sugar. That is a raw sugar and is very sticky and disagreeable to handle. It cannot be put into ordinary paper bags and containers of that sort, and it is difficult to handle in private use. I doubt whether it could be sold in Canada at all in the general trade. In its transportation through the country by rail it is usually shipped in hogsheads and sometimes in heavy jute sacks of 200 or 300 pounds. To handle it locally would, I think, be almost impossible.


Edward James Young: I am afraid that either the minister does not understand me or I do not understand him. The sugar I refer to is plantation refined, a granulated sugar. It is not quite as attractive in appearance as the refined sugar which we are accustomed to buy, but still it could be sold in the stores at retail. I do not see any objection to allowing the wholesalers to import it for sale on the same basis as the other. It is not a sticky sugar.


Henry Herbert Stevens: The sugar to which the
hon. member is referring does not come under this item; it comes under the general classification.


Richard Bedford Bennett: That comes now from
Cuba.


William Daum Euler: The Prime Minister has laid down certain definite rules of policy in connection with the tariff, one of which is the desire that the Canadian producer should have at least an equal opportunity with the foreign producer. With that I agree. He has also laid down the principle of protec-

Australian Trade Agreement
tion for Canadian industry. Further, he has said to-day-and I agree with him in this- that we should try to buy from other dominions those things which we do not produce ourselves in order that they may buy from us those things they do not produce. It seems to me there is one item in this schedule A which absolutely violates every one of these three principles. I approach it perhaps with some hesitancy because it deals with a commodity to which many people are opposed-brandy. I have no special brief for anyone in that business, but the committee will agree that so long as it is a legal commodity which is produced in this country it is at least as much entitled to protection as any other commodity. Brandy coming from Australia is allowed in at a duty of $8 per gallon. Brandy is produced in Canada.


Richard Bedford Bennett: Where? I am told not.


William Daum Euler: I understand it is. However, I will read a telegram which I have received and I shall be glad to get an adequate reply; because, so far as I can see, the protest is a just one. Australian brandy can. come under this treaty at $8 peT gallon. Canadian-produced brandy pays to the government an excise duty of $9 a gallon, so that it has not an equal opportunity. The two are not even on an equal basis, the Australian producer actually having an advantage over the home producer of $1 per gallon.


Robert James Manion: Where is brandy produced in Canada?


James Dew Chaplin: You are doing the same thing under the French treaty at this moment.


William Daum Euler: That may be, but two wrongs do not make a right.


James Dew Chaplin: I agree with you.


William Daum Euler: My hon, friend has protested against the reduced duty on Australian wines; but so far as wines are concerned the Canadian producer has at least a little protection left. The Canadian producer of brandy, if there are any producers,-


Henry Herbert Stevens: No.


William Daum Euler: -on the other hand, is discriminated against. Perhaps I had better read the telegram I have received. I repeat, I have no brief for them, but if there are legitimate producers of brandy in Canada they have a right to protection under the principles laid down by my right hon. friend. I have no doubt he has also received this telegram. It reads:
Understand Australian treaty allows entry into Canada of Australian brandy at eight dollars per gallon. At present Canadian excise

duty on spirits is nine dollars per proof gallon so that a substantial preference is given to importers over the domestic manufacturer who employs Canadian labour not only directly but indirectly through many other industries. Canadian distillers are also large users of Canadian rye and barley. It is obviously unfair that this important Canadian industry which has thousands of shareholders should thus be discriminated against and we respectfully ask that appropriate steps be taken _ to remove the disadvantage placed on Canadian spirits.
It is signed by ten distillers. I need not read the names.


Richard Bedford Bennett: It might be just as well.


William Daum Euler: They are: Hiram Walker & Sons, Limited; Distillers Corporation,Limited; Jos. E. Seagram & Sons, Limited; Gooderham & Worts, Limited; Canadian Industrial Alcohol Company, Limited; Consolidated Distilleries, Limited; Wiser's Distillery, Limited; B.C. Distillery Co., Limited; United Distillers, Limited; Pioneer Distillers, Limited.


Richard Bedford Bennett: I suggested that my hon. friend should read the names for this reason. I say to him here and now that not one of those firms produces a single gallon of brandy.


William Daum Euler: If they do not, I have nothing to say.


Richard Bedford Bennett: I have under my hand from one of the largest of the firms who have signed the telegram-I need not mention the name-a letter in which the statement is made:
Answering your inquiry, would say no brandy is manufactured in Canada.
I wish to make rthat perfectly clear. And as the hon. gentleman has said that he has nothing further to say if there are no producers of brandy in Canada, it is not necessary that I should take up the time of the committee further.


William Daum Euler: If it is the fact that no brandy is produced in Canada, I have nothing to say.


Richard Bedford Bennett: That is the fact.


Peter John Veniot: While there is no brandy produced in Canada, the preference given to brandy from Australia, as against the S9 per gallon excise on Canadian spirits, makes brandy cheaper and it therefore comes into competition with whiskies and other spirits manufactured in this country. That is why they are protesting. It will be observed that in the telegram they say "Canadian spirits;" they do not say brandy. Brandy having a $1

preference over the Canadian excise of 89 per gallon, it is so cheap as to come into competition with all Canadian spirits.


Richard Bedford Bennett: In view of the observations of my hon. friend from Gloucester (Mr. Veniot), perhaps I might add this. My hon. friend from North Waterloo will recall that this afternoon, when moving the second reading of the bill, I explained that it was our purpose to prefer, under equal conditions, the British dominions to foreign countries. This brandy comes into competition with French brandy, and we could not apply a higher rate than $8 because the French treaty stands in the way. This treaty was made by my hon. friends and fixed the duty at that rate. If Australian brandy is to compete in this country with French brandy, obviously the same rate or less had to be applied. France is something like three thousand miles away from this country while Australia is over twice that distance.
Schedule A agreed to.
On schedule B.


Clarence Joseph Veniot: I would like to have an
explanation of what appears to me to be a discrimination against fish packed in the maritime provinces.


Henry Herbert Stevens: There certainly was no
intention to discriminate against the maritime provinces. It must be recognized that Australia fixed the rates in this schedule.


Peter John Veniot: Why would they determine to give such a high preference to salmon? Surely the minister should have discussed the other fish.


Henry Herbert Stevens: We not only thought of
it but this was one of the important items which were under negotiation.


Peter John Veniot: It is a good thing for
British Columbia but it would appear to be discrimination against the maritimes.


Henry Herbert Stevens: 
Peter John Veniot: She does not can other
kinds of fish.
Private Bills


Henry Herbert Stevens: Oh yes, they can some.


Peter John Veniot: Not the type of fish we
send to Australia. The largest sardine canning factory in the world is located in New Brunswick, and this country has always held the Australian market for sardines. The preference on sardines has not been increased while the preference on salmon has been doubled.


Henry Herbert Stevens: The duty on crustaceans is
five cents per pound British Preferential and eight cents per pound general tariff. That is a three cents per pound preference on crustaceans.


Peter John Veniot: And six cents per pound
on salmon.


Henry Herbert Stevens: Yes, that is right.


Peter John Veniot: Does the minister think
that is a fair deal?


Henry Herbert Stevens: It is the best we could,
do.


Peter John Veniot: I want to see this treaty'
go through, but I want to see fair play given to the people of the maritime provinces. I suggest to the minister that between now and the next session he take up this matter with the Australian authorities and see if we cannot obtain the same preference as applies to salmon.


Henry Herbert Stevens: We shall be glad to discuss it with Australia.


William Lyon Mackenzie King: Is it not a
fact that this agreement has to pass in its entirety and that no matter how long we continue the discussion, there is no possibility of
amending it?


Richard Bedford Bennett: That is quite right.
Schedule B agreed to.
Bill reported, read the third time and passed.


PRIVATE BILLS
Mr. T. H. STINSON (Victoria, Ont.):: Mr. Speaker, by leave of the house I desire to move, seconded by the hon. member for West Algoma (Mr. Simpson):
That the following bills of the Senate, namely: Bill No. 137, for the relief of Pearl Whelan and Bill No. 138, for the relief of truce Raymond Diamond, be now read a first and a second time and referred to the select standing committee on miscellaneous private bills.


[Stage Direction]
Motion agreed to.
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Questions
[Stage Direction]
Thursday, July 23, 1931.