1931-07-01

[Stage Direction]
Mr. R. C. MATTHEWS (Toronto East Centre) presented the sixth report of the select standing commmittee on banking and commerce, as follows:
Your committee recommend that it be given leave to sit while the house is in session.
Mr. MATTHEWS moved;
That the recommendation contained in the sixth report of the select standing committee on banking and commerce presented to the house this day be concurred in.
Motion agreed to.

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

Mr. ILSLEY:: 1.	Has there been any petition or application to the governor in council to vary or rescind the order of the Board of Railway Commissioners made on or about October 28, 1930, dismissing the application of the Halifax harbour commission and the transportation commission of the Maritime Board of Trade for an

Questions
order reducing certain export grain nates to Halifax?
2.	If so:	(a) who was the petitioner or
applicant; (b) what was the date of the petition or application; and (c) what action has been taken?


Mr. BENNETT:: .
1.	Yes.
2.	(a) Halifax harbour commissioners and the transportation commission of the Maritime Board of Trade; (b) May 29, 1931. Received in the Privy Council office June 4, 1931; (c) No date has as yet been fixed for the hearing.


UNEMPLOYMENT RELIEF
Mr. RINFRET:: 1.	What sum of money lias been spent in the
city of Montreal by the federal government out of the twenty million dollars voted at the special session of 1930:	(a) on works as a
relief for unemployment; (b) as direct assistance ?
2.	How many workingmen are at present employed by tlie harbour commission at Montreal?


Mr. CAHAN:: 1.	(a) No accounts yet submitted to federal government in respect of public works in city of Montreal; (b) $173,666.67.
2.	The following information has been
furnished by the harbour commissioners of Montreal: 1,175 workingmen were employed week ended June 13, 1981 (this not including staff).	'


CENSUS IN ROCK ISLAND
Mr. HOWARD:: 1.	What is the name of the party who is taking the census in Rock Island, Quebec?
2.	Does he live in Canada or the United States?


Mr. STEVENS:: 1.	Mr. J. W. Downing.
2.	Mr. Downing is a Canadian, bom in the county of Comipton; his place of business and his post office address are at Rock Island, P.Q. At this point there is one community known as "The Three Villages" made up of Stanstead and Rock Inland in the province of Quebec and Derby Line in the state of Vermont. The entire population forms one community and the same churches, schools, moving picture theatres and railway station are used by the entire population. For example there is an ice skating rink at Derby Line, a roller skating rink at Stanstead, a golf course at Stanstead, an Odd Fellows hall at Derby Line, a Masonic lodge at Stanstead, and an opera house half in Rock Island and half in Derby Line. The public library is also situated on the line as well as the buildings of some of the residents,
PIER "b" UNIT-HALIFAX TERMINALS
Mr. DUFF;
1.	Is the construction work at pier "B" unit, ait the Halifax terminals at a standstill, have the men been laid off and was the larger portion of the equipment removed to points on the St. Lawrence river?
2.	If so, why was the said work interrupted?
3.	Will this work be proceeded with during the present calendar year?
4.	If so, when is it anticipated that work will be resumed?


Mr. DURANLEAU:: The following information has been furnished by the Halifax Harbour Commissioners:
1.	Construction work on pier "B" unit at the Halifax terminals is not at a standstill, and men have not been laid off. The con-contractors advise that only such portion , of the equipment as is not now required has been removed.
2.	Answered by No. 1.
3.	Yes.
4.	Answered by No. 1.


PRIVY COUNCIL APPEALS
Mr. LAPOINTE:: 1.	In how many cases which are to be submitted to the privy council at its coming sitting is the attorney general of Canada a party, or His Majesty in respect of the Dominion of Canada interested?
2.	Will a member of the Canadian judiciary who is also a member of His Majesty's Privy Council, attend the sitting and take part in the hearing and decision of those oases?
3.	If not, why?


Mr. GUTHRIE:: 1.	Five.
2.	The government is not informed.
3.	See answer to No. 2.


TRANS-CANADA HIGHWAY
Mr. BRADETTE:: 1.	Has an arrangement been arrived at between the Ontario government and the federal government that three survey parties would go over the ground this season to study the routing of the trans-Canada highway in northern Ontario?
2.	What was the nature of the arrangement between the Ontario and the federal governments?


Richard Bedford Bennett: It is hardly possible to
answer this question with a mere yes or no. I can only say that the Ontario government has suggested that they were sending survey parties over the ground of what might possibly be the routing of the completion of a trans-JCanada highway through northern Ontario. The only arrangement made was that, that suggestion having been made, this government stated that it would be very glad if such a survey were proceeded with. That is as far as it went.
Questions


UNEMPLOYMENT RELIEF
Mr. SANDERSON:: 1.	Has Premier Henry or any other member of the Ontario government requested or suggested assistance from the federal government for unemployment relief for the coming winter 1931-32?
2.	Has the Minister of Agriculture for the province of Ontario requested or suggested assistance from the present federal government in bringing about better conditions for the marketing of farm produce?
3.	Has any member of the Ontario government requested or suggested assistance from the present federal government in the construction of a trans-Canada highway through the province of Ontario?
4.	Has any member of the Ontario government requested or suggested that the present federal government should undertake the full payment of old age pensions in the province of Ontario?


Richard Bedford Bennett: It would hardly be satisfactory, perhaps, to the hon. member who asks this question if it were answered merely with a yes or no. With respect to the first question the answer would be this:	It has
been suggested that the arrangements made last year be continued or improved upon so far as the province of Ontario is concerned. With respect to the second question, some verbal suggestions have been made. The answer to the third question would be yes. With respect to the fourth question there is no very definite information available, but it is believed that suggestions were made that the federal government should discharge the payment in full of old age pensions as soon as possible.


ROYAL GRAIN COMMISSION-REPORT
Mr. MOTHERWELL:: 1.	Who was the secretary of the Stamp commission on grain futures?
2.	Is such secretary an officer of the government; if so:	(a) in what department; (b)
under vital minister?
3.	Was it the secretary of this grain futures commission through whom the typewritten copy of their report, ineluding exhibits filed in connection therewith, was lianded personally to the government, and to which particular member thereof?
4.	Did the minister receiving this Stamp commission report, or some of his responsible officers, carefully peruse the copy and check it up in its relationship to the various indices incorporated, before sending it to the King's printer?
5.	How many days elapsed between the receipt by the government of the typewritten copy of the Stamp commission report and the transferring of it, with exhibits, to the printing bureau?
6.	Have any copies of the Stamp commission
report, minus Appendix 12, been printed, ordered or distributed, and, if so:	(a) how
many; (b) by whom; (c) to whom?


Mr. BENNETT:: 1.	Mr. L. B. Pearson.
2.	Yes. (a) First Secretary, Department of External Affairs; (b) Secretary of State for External Affairs.
3.	Mr. Commissioner Evans and the secretary of the commission appeared before the Prime Minister on Saturday, May 2, with a typewritten copy of the report. The Prime Minister suggested to Mr. Evans and Mr. Pearson that the report should be printed, if possible, in time to be mailed to the chairman by the "Mauretania" which sailed from New York the following Wednesday. Only those exhibits which had been selected by the chairman were printed as appendices to the report. Among them was the chart which became Appendix XII.
4.	Neither the Prime Minister nor any representative of his perused or checked the report or its indices before they were sent to the King's Printer. The commission was responsible for its report.
5.	The main report was sent at once to the printing bureau on May 2. . The appendices were sent when the proof of the main report had been printed.
6.	10,126 copies of the report, minus Appendix XII, have been already distributed as follows:-
By file Printing Bureau
Mr. W. Kasper Fraser,	K.C.	Copies
Barrister.
320 Bay Street,
Toronto 2, Ont	 1
Mr. C. J. Bingley,
1608 15th Avenue W.,
Calgary, Alta	 1
Dr. Wm. Turnbull,
178 Anderson Avenue,
Winnipeg,	Man	 1
Legislative Library, e/o Acting Librarian,
Regina, Sask	 6
The T. Raton Co., Ltd.,
Dept. W-212.
Winnipeg,	Man	 100
Mr. F. R. MacMillan, M.P.,
House of Commons,
Ottawa	 10
Winnipeg Grain Exchange, c/o Asst. Secretary,
Winnipeg,	Man	 10,000
By the Secretary of the Commission
S. Travers Sweatman, K.C.,
Richards Sweatman & Co.,
Winnipeg, Man	 6
Robert D. Calkins, Esq.,
Stanford Research Institute,
California, U.S.A	 1
Total	 10,126

Questions
In addition, Appendix XII haa been removed from all copies of the report in the possession of departments of the government, and those persons to whom the report, with Appendix XII attached, has already been sent, have been or are being communicated with requesting them to remove the appendix in question from their copy or copies of the report.


ROYAL GRAIN COMMISSION-EVIDENCE
Mr. McINTOSH:: 1.	How many copies of the Stamp commission report containing Appendix 12, Chart 10, were printed and distributed by the government, and to whom?
2.	Is it .the intention of the government to print in full the evidence and exhibits as taken by the official stenographer at the different sittings of Said commission within the confines of Canada and outside thereof?
3.	Is the evidence now in possession of the Department of External Affairs, Ottawa, or the Department of Trade and Commerce, Ottawa; if not, where is it to be found?
4.	Were any copies of such evidence left in Winnipeg with Commissioner Evans, or anyone else?


Mr. BENNETT:: 1. (a) Total number of copies of the report, containing Appendix XII, distributed is 2,168, (b) Distributed to the following:
The Winnipeg Grain Exchange c/o The Assistant Secretary,	Copies . . 800
The Italian Consul General,	.. 6
Western Grain Co., Iitd.,	.. 260
Department of the Secretary of State,	.. 50
Searle Grain Co.,	.. 50
The Privy Council,	.. 25
Mr. Sanford W. Evans, 171 McDermot Avenue,	. . 100
German Consulate General, 1440 St. Catherine St., West, Montreal, Que		.. 2
The Consul General of Switzerland	in
Canada, Montreal, Que		. . 4
[DOT]lohann Krisitjanson, Esq.,	. . 1
George Bromhall's Corn Trade News, c/o Mr. A. B. Conlan, 214 Produce Exchange (Sin. P.), New York, U.S.A		.. 2
Mr. Julius B. Baer, 43 Cedar Street, New York, U.S.A		.. 3
Messrs. Hales & Hunter Co., c/o Manager, Seed De<pt., 166 West .Jackson Blvd., Chicago, U.S.A		
Department of Agriculture,
Mr. L. Leah,
Sedge wick, Alta	
Alfred L. Geiger, Esq.,
Attorney at Law,
1117 National Press Bldg.,
Washington, U.S.A	
The Empire Auto Supply Co., Ltd., 516 Portage Avenue,
Winnipeg, Man	
Mr. J. H. C. Honeym&n,
Chief Librarian,
Regina Public Library,
Regina, Sask	
Mr. Hermann .C. Morse,
5200 Wiivthrop Avenue,
Chicago, U.S.A	
Mr. Albert Moellmann,
Blaine Lake, Sask	
Mr. Keith M. Hopper,
79 Carleton Street,
Winnipeg, Man	
The Canadian Bank of Commerce,
c/o Mr. J. B. Hegan, Ottawa	
Canadian Industries Ltd., c/o Traffic Manager,
P.O. Box 1260,
Montreal, Que	
Ottawa	
The Montreal Board of Trade,
Attn. The Secretary,
Montreal, Que	
United Grain Growers Ltd.,
Attn. Mr. Law,
Winnipeg, Man	
Mr. W. M. G. Rail,
General Manager,
Pioneer Grain Co., Ltd.,
Grain Exchange,
Winnipeg, Man	
Canadian Wheat Pool,
Winnipeg, Man	
Messrs. Robinson & Climo Ltd., c/o The Treasurer,
127 Coristine Bldg.,
Montreal, Que	
The Chamber of Commerce of United States,
Attn. The' Secretary,
Washington, U.S.A	
The United States Legation,
Ottawa	
Alberta Pacific Grain Co., Ltd., Asst, to General Manager,
Calgary, Alta	
Mr. J. W. Taylor,
302 Boyd Bldg.,
Winnipeg, Man	
Department of Finance,
Ottawa	
Copies
3
1
1
12
28
24
25
1
6
12
Miss Ethel Cleland,
Branch Librarian,	.
The Business Branch of the Public Library,
Ohio and Meridian Streets,
Indianapolis, Ind., U.S.A	 1
Mr. E. C. Lantz,
304 Indian Rd. Cres.,
Toronto, 9, Ont	 1
Questions

Captain Christian Gross,
The Royal Bank of Canada, c/o Maud E. Martin, Librarian,
Montreal, Que	
Canadian Pacific Railway,
Attn. Mr. Morse,
Ottawa	
The N. Bawlf Grain Co., Ltd., c/o The Accountant,
Winnipeg, Man	
The British High Commissioners's Office, Wellington Street.,
Ottawa	
Mr. Sanford Evans,
171 McDermot Avenue,
Winnipeg, Man	
Col. 0. M. Biggar,
Victoria Bldg.,
Ottawa	
Sir Josiah Stamp, G.B.E.,
Euston Station, S.W.I	
Canadian Legation,
Washington, D.C	
Dr. Holbrook Working,
Pood Research Institute,
Stanford University,
California, U.S.A	
Second Secretary,
United States Legation,
Ottawa	
B. J. Roberts. Esq.,
Department of Finance,
Ottawa	
Leroy B. Gulotta, Esq.,
The Hollywood-Kenmore Hotel,
Chicago, U.S.A	
The Honourable J. T. Brown,
Chief Justice,
Court of King's Bench,
Regina, Sask	
Barrow Lyons, Esq..
Christian Science Monitor,
270 Madison Avenue,
New York City	
William Spencer, Esq.,
270 Scott Street,
Chicago, U.S.A	
Mr. R. H. Coats,
Dominion Statistician,
Bureau of Statistics,
Ottawa	
Travers Sweatman, Esq.,
Richards Sweatman & Co.,
Winnipeg, Man	
J. G. Harvey, K.C.,
410 Somerset Bldg.,
Winnipeg, Man	
J. A. Aiken, Esq.,
107 Glenheim Place,
Westmount, P.Q	
Frederick Hudd, Esq.,
Canadian Government Trade Commissioner,
New York	
George C. Fletcher, Esq.,
2875 Centre Street,
Montreal, Que	
Andrew Cairns, Esq.,
Statistician,
Central Selling Agency,
Canadian Wheat Pools	

Professor W. A. Mackintosh,	Copies
Queen's University,
Kingston, Ontario	 1
To libraries, etc., as per attached list.. 100 To members of parliament	500
2. No.	'
3.	An official copy of the evidence is at present in the possession of the secretary of the commission, Mr. L. B. Pearson, Department of External Affairs.
4.	Four transcripts of the evidence were made by the official reporters, one for each of the commissioners and the secretary, and are, so far as is known, still in their possession.
List "A"
The following is a list of libraries receiving publications under P.C. 1471, of 4th August, 1927, as amended by P.C. 1717, of 26th July, 1930:
Diplomatic and Special
The Canadian Legation,
I	Rue Francois-Premier,
Paris, France.
The Canadian Legation,
Tokyo,
Japan.
The Canadian Legation,
Washington, D.C.,

The Minister of France,
Victoria Bldg.,
Wellington Street,
Ottawa, Ont.
The Minister of the United States, Metropolitan Bldg.,
Ottawa, Ont.	.
The Minister of Japan,
Victoria Bldg.,
Wellington Street,
Ottawa, Ont.
Minister Plenipotentiary & Consul General of China,
82 Somerset Street,
Ottawa, Ont.
The Secretary.
Dominions' Office,
Downing Street,
London, England (3).
British High Commissioner in Canada,
II	Wellington Street,
Ottawa, Ont.
The High Commissioner for Canada,
Canadian Bldg.,
Trafalgar Square,
London, S.W. 1, England.
The Librarian,
League of Nations,
Quai Wilson,
Geneva, Switzerland.
The Canadian Advisory Officer,
League of Nations,
Quai Wilson,
Geneva, Switzerland.
The Dominion Archivist,
Ottawa, Ont.
Copies
3
6
3
15
2
1
1
2
1
2


Questions
The Under-Seeretary of State for External Affairs,
Ottawa, Ont.
(6 copies)
The Librarian,
The Library of Parliament,
Ottawa, Ont.
The Librarian,
Library of Congress,
Washington, D.C., U.S.A.
Legislative
The Librarian,
Provincial Library,
Charlottetown, P.E.I.
The Librarian,
Provincial Library,
Edmonton, Alta.
The Librarian,
Provincial Library,
Fredericton, N.B.
The Librarian,
Provincial Library,
Halifax, N.S.
The Librarian,
Provincial Library,
Quebec, P.Q.
The Librarian,
Provincial Library,
Regina, Sask.
The Librarian,
Provincial Library,
Toronto, 5, Ont.
Legislative Library,
Parliament Bldgs.,
Victoria B.C.
The Librarian,
Provincial Library,
Winnipeg, Man.
Universities and Colleges
The Librarian,
The University,
St. Francis Xavier's College, Antigonish, N.S.
The Librarian,
St. Dunstan's University, Charlottetown, P.E.I.
The Librarian,
University of Alberta,
Edmonton, Alta.
The Librarian,
New Brunswick University, Fredericton, N.B.
The Librarian,
The University,
King's College,
Halifax, N.S.
The Librarian,
Dalhousie University,
Halifax, N.S.
The Librarian,
Queen's University,
Kingston, Ont.
The Librarian,
University,
Bishop's College,
Lennoxville, P.Q.
The Librarian,
Western University,
London, Ont.
The Librarian,
McGill University Library,
3459 McTavish Street,
Montreal, P.Q.
Bibliotheque St. Sulpice,
340 Rue St. Denis,
Montreal, P.Q.
The Librarian,
University of Montreal, Montreal, P.Q.
The Librarian,
Fraser Institute,
359 Dorchester Street W., Montreal, P.Q.
The Librarian,
University of Ottawa,
Ottawa, Ont.
The Librarian,
University Laval,
Quebec, P.Q.
The Librarian,
Saskatchewan University, Saskatoon, Sask.
The Librarian,
Mount Allison University, Sackville, N.B.
The Librarian,
The University.
St. Joseph's College,
St. Joseph, N.B.
The Librarian,
Victoria University,
Toronto, Ont.
The Librarian,
University of Toronto,
Toronto, 5, Ont.
The Librarian,
McMaster University,
Toronto, 5, Ont.
The Librarian,
University of British Columbia, Vancouver, B.C.
The Librarian,
Manitoba University,
Winnipeg, Man.
The Librarian,
University of Acadia,
Wolfville, N.S.
Public
The Librarian,
Public Library,
Belleville, Ont.
The Librarian,
Public Library,
Brantford, Ont.
The Librarian,
Public Library,
Broclcville, Ont.
The Librarian,
Public Library,
Calgary, Alta.
The Librarian,
Public Library,
Chatham, Ont.
The Librarian,
Public Library,
Edmonton, Alta.
The Librarian,
Public Library,
Fort William, Ont.
Questions

The Librarian,
Public Library,
Galt, Ont.
The Librarian,
Public Library,
Guelph, Ont.
The Librarian.
Public Library,
Halifax, N.S.
The Librarian,
Public Library,
Hamilton, Ont.
The Librarian,
Public Library,
Kingston, Ont.
The Librarian,
Public Library,
Kitchener, Ont.
The Librarian,
Public Library,
Lethbridge, Alta.
The Librarian,
Public Library,
London, Ont.
The Librarian,
Public Library,
Medicine Hat, Alta.
The Librarian,
Montreal Civic Library,
620 Sherbrooke Street E., Montreal, P.Q.
The Librarian,
Public Library,
Moose Jaw, Sask.
The Librarian,
Public Library,
New Westminster, B.C. The Librarian,
Public Library,
New York City, U.S.A. The Librarian,
Public Library,
Niagara Falls, Ont.
The Librarian,
Public Library,
Ottawa, Ont.
The Librarian.
Public Library,
Peterboro, Ont.
The Librarian,
Public Library,
Port Arthur, Ont.
The Librarian,
Public Library,
Prince Albert, Sask.
The Librarian.
Public Library,
Regina, Sask.
The Librarian,
Public Library,
Saskatoon, Sask.
The University of Chicago, Chicago, 111.
The Librarian,
Strathcona Public Library, Edmonton, Alberta.
The Librarian,
Public Library,
Sault Ste. Marie, Ont.

The Librarian,
Public Library,
Shawinigan Falls, P.Q.
The Librarian,
Public Library,
Sherbrooke, P.Q.
The Librarian,
Public Library,
Stratford, Ont.
The Librarian,
Public Library,
St. John, N.B.
The Librarian,
Public Library,
St. Thomas, Ont.
The Librarian,
Public Library,
Sydney, N.S.
(2 copies)
The Librarian,
Public Library,
Toronto, Ont.
The Librarian,
Public Library,
The Carnegie,
Vancouver, B.C.
The Librarian.
Public Library,
Victoria, B.C.
The Librarian,
Public Library.
Westmount, P.Q.
The Librarian,
Public Library,
Windsor, Ont.
The Librarian,
Public Library,
Winnipeg, Man.
The Librarian,
Public Library,
Woodstock, Ont.
List of libraries receiving publications in French under P.C. 1471, of 4th August, 1927, as amended by P.C. 1717 of 26th July, 1930:
La Legation Canadienne,
1 Rue Fran?ois-Premier,
Paris, France.
The Minister of France,
Victoria Bldg.,
Wellington Street,
Ottawa, Ont.
L'Archiviste Federal,
Ottawa, Ont.
(6 copies)
Le Bibliothecaire,
Bibliothcque du Parlement,
Ottawa, Qnt.
Library of Congress,
Washington, D.C.,

Le Bibliothecaire,
Bibliothcque Legislative,
Quebec, Que.
Le Bibliothecaire,
Bibliotheque Legislative,
Toronto, Ont.
Le Bibliothecaire,
Bibliotheque Legislative,
Winnipeg, Man.

Questions
Bibliotheque Civique de Montreal,
020 Rue Sherbrooke, E.,
Montreal, Que.
Bibliotheque Publique,
Ottawa, Ont.
Bibliotheque Publique.
Sbawinigan Falls, Que.
Bibliotheque Publique,
Sherbrooke, Que.
Bibliotheque Publique,
Windsor, Ont.
Le Bibliothecaire,
Universite d'Alberta,
Edmonton, Alta.
The Librarian,
The Queen's University,
Kingston, Ont.
The Librarian,
The University,
Bishop's College.
Lennoxville, Que.
Le Bibliothecaire.
Bibliotheque St-Sulpice,
340 Rue St-Denis,
Montreal, Que.
Le Bibliothecaire,
Universite de Montreal,	[DOT]
Montreal, Que.
Bibliotheque Publique,
Fraser Institute,
359 Rue Dorchester O.,
Montreal, Que.
Le Bibliothecaire,
Universite d'Ottawa,
Ottawa, Ont.
Le Bibliothecaire,
Universite Laval,
Quebec, Que.
Le Bibliothecaire,
Universite de Saskatchewan,
Saskatoon, Sask.
Le Bibliothecaire,
College St-Joseph,
St-Joseph, N.-B.
Le Bibliothecaire,
Universite de Toronto,
Toronto, 5, Ont.
The Librarian,
British Columbia University,
Vancouver, B.C.
Le Bibliothecaire,
Universite de Manitoba,
Winnipeg, Sian.


CANADIAN BANK DEPOSITS
Mr. CARMICHAEL:: 1.	What is the total of deposits in all the banks of Canada?
2.	What is the total amount of loans outstanding from all the banks of Canada?
3.	What percentage in actual money do the banks have in relation to the total amount of money loaned by them?
4.	How much money do the people of Canada owe the mortgage companies, loan companies. banks and insurance companies?
5.	What is the amount of the national debt of Ca nada ?
6.	What is the amount of gold, silver bullion, and paper money in circulation in Canada?


Richard Bedford Bennett: Mr. Speaker, as a rule
the hon. gentleman is very considerate in the questions he asks. The information sought in this instance however is contained in the Canada Gazette and in various other publications which are supplied to members of parliament. One of the sections of the question however is not thus answered and, from any information in the hands of the government, cannot well be answered. I refer to part 4 which is as follows:
How much money do the people of Canada owe the mortgage companies, loan companies, banks and insurance companies?
That information of course is not in the possession of the government. Many of the mortgage companies are incorporated under provincial charters, and such information is not available to the federal government.


Mr. SPEAKER:: Paragraph 4 of question
No. 29 shall be stricken out.


CANADIAN NATIONAL RAILWAYS-RIVIERE DU LOUP STATION
Mr. POULIOT:: 1.	Were any letters sent after August 7, 1930. by any person to any minister of the crown, government official or civil servant relating to the construction of a new station building at Riviere du Loup marked private, personal or confidential after they were received by any such minister of the crown, government official or civil servant?
2.	If so, at what dates?
3.	By whom was each of 9aid letters signed, to whom was each one addressed and what was the date of each one?


Mr. MANION:: We have no record of
any such letters or documents as those asked for by the hon. member for Temiscouata. For that reason I do not know that the question can be further answered.


Mr. POULIOT:: Mr. Speaker, that question might be of interest to any minister of the crown, and would not be confined to my hon. friend the Minister of Railways and Canals (Mr. Manion).


Alfred Duranleau: In my opinion the
question is out of order because it involves every member of the cabinet and carries with it the insinuation that some documents accessible to the house have been altered either by the ministers or by their officials. For those reasons I contend the question is out of order. If my hon. friend has any charge to make against the ministers or the officials he must do it in another way.


Jean-François Pouliot: Mr. Speaker, I rise to a
point of order. I am asking for a statement
Questions

of fact, and there is no insinuation whatever in my question. My hon. friend the Minister of Marine (Mr. Duranleau) is entirely wrong when he insinuates that I have by this question made any insinuation. My question can be answered yes or no. If it is answered "no" there can be no insinuation, because no wrong would have been done. If it is answered "yes" there is condemnation involved. That is all I need to say.


Pierre Édouard Blondin: Question No. 30 will
stand.


*SS. ROBERT G. CANN
Mr. DUEF:: 1.	What subsidy was paid to the ss. Robert G. Cann or her owners for the twelve months ending April 30, 1931?
2.	What is the amount of subsidy being paid or to be paid to the ss. Constance for the same service, from Canso to Mulgrave and return?


Mr. STEVENS:: If it is acceptable to my hon. friend I believe I am in a position to give a verbal answer to the question. If he wishes a complete answer however the question will have to be held over. As to part 1 of the question, my reply would be that no subsidy was paid for the twelve months ending April 30, 1931. For the twelve months ending March 31, 1931, the subsidy was $27,400. My answer to part 2 of the question is that the amount of subsidy for this year as provided for in the estimates is $21,920. The steamer Constance is at present temporarily on the job.


Mr. DUFF:: I would like to have my question answered fully. I think the Robert G. Cann performed services last year and received a subsidy.


Henry Herbert Stevens: I have answered that.


William Duff: I think my hon. friend has not answered. I have asked what the Robert G. Cann received for the twelve months ending April 30, 1931, and the minister has said she did not receive amdhing.


Henry Herbert Stevens: No; surely my hon. friend could not have heard me. In answer to part 1, I said that as yet no subsidy has been paid for the year ending April 30, 1931.	'


William Duff: But that is not my question.


Henry Herbert Stevens: However for the twelve months ending March 31, 1931, the subsidy paid was $27,400. The answer to part 2 of the question is that the subsidy provided in the estimates amounts to $21,920. The answer to the balance of the question is that the Constance is temporarily on the route. fMr. Pouliot.]


William Duff: Is she receiving the same subsidy?


Henry Herbert Stevens: No.


Pierre Édouard Blondin: Question No. 31 is
answered.


ROYAL GRAIN COMMISSION-REPORT
Mr. MOTHERWELL:: After the receipt of the Stamp commission report on grain futures by the government, was _ such report itself or a copy thereof, including indices, sent to Sir Josiah Stamp in England for his final perusal and identification, approval or signature, before being sent to the printing bureau in Ottawa and subsequently distributed.


Richard Bedford Bennett: The proof of the miain report with summary of contents, but without the appendices; was sent to London, England, for examination by the chairman as soon as it was printed. The chairman had requested the main report, so that he might see how it looked in print, check the proof and make any further alterations that seemed desirable. The appendices were not sent. They merely had to be reproduced as selected by the chairman and the checking of this work was left to the secretary.
After the report had been sent to England, the charts and documents previously selected by the chairman in New York for appendices were printed. No changes of any kind were made with respect to any chart. When the proof was returned to Ottawa the few changes and corrections-they were merely formal-[DOT] suggested by the chairman were made, the appendices were attached to the report, and the report tabled.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. SANDERSON:: 1.	W7hat are the names of the various municipalities (including towns and cities) in the province of Ontario which applied for grants under the Unemployment Relief Act?
2.	What grant was received by each municipality, city or town?
3.	What was the federal contribution in each case?
4.	What was the provincial contribution in each ease?
5.	What was the municipal contribution in each case?
6.	What amounts have been expended and paid by the federal government to each municipality in each oase?
7.	Were any amounts granted to these various municipalities out of the special fund and for charitable purposes by virtue of the Unemploy-. ment Relief Act?

Motions for Papers



IMMIGRANTS TO CANADA

Mr. BOULANGER:: How many immigrants were admitted to Canada each month between August 1, 1930, and July 1, 1931?



UNOPPOSED MOTIONS FOR PAPERS


Mr. MARCEL:: For a copy of the petitions received by the Post Office Department in connection with the Rivifere Caplan post office, Quebec, since the 1st of August last.



CENSUS ENUMERATOR FOR NEW RICHMOND, QUE.

Charles Marcil: For a copy of the letter addressed by B. C. G. McKenzie, of New Richmond, Quebec, to G. M. Kempffer, census commissioner for the county of Bonaventure, concerning his application for employment as enumerator for New Richmond, Quebec.



IIONFLEUR RURAL MAIL SERVICE

Joseph Oscar Lefebre Boulanger: For a copy of all correspondence, reports and other documents, relating to the establishment of a rural mail service at Honfleur, in the county of Bellechasse.



IMPERIAL CONFERENCE-ACTING PRIME MINISTER

Jean-François Pouliot: For a copy of the order in council appointing the right hon. member for Argenteuil (Sir George Perley), Acting Prime Minister, while the right hon. Prime Minister was attending the Imperial conference in London last fall.



GERARD SIMARD REPORT

William Duff: For a copy of the report made by Mr. Gerard Simard, commissioner for the Post Office Department, of the investigation he held in the post office of St. Godfroid, Bonaventure county, Quebec.



MR. PATRICK FLYNN

William Duff: For a copy of all correspondence, letters, telegrams, memorandums and other documents exchanged between certain parties in the county of Guysborough, Nova Scotia, and the Postmaster General and his officials, regarding Mr. Patrick Flynn, postmaster at Salmon River Lake, charging him with improper conduct in his position as postmaster.



ST. CAMILLE RURAL MAIL SERVICE

Joseph Oscar Lefebre Boulanger: For a copy of all correspondence, reports and other documents, relating to the establishment of a rural mail service at St. Camille, in the county of Bellechasse.


Joseph Oscar Lefebre Boulanger: With the permission
of the house I should like to withdraw motion 7 standing in my name.


Pierre Édouard Blondin: Number 7 will be withdrawn.



MOTIONS FOR PAPERS


Jean-François Pouliot: For a chpy of reports of the district engineer to the chief engineer, and the latter's reports to the Deputy Minister of Public Works, particularizing the vote of 1931-1932 for repairs to the wharf of Riviere du Loup.


Mr. STEWART (Leeds):: With respect to work which has not been completed or even undertaken, I scarcely think that recommendations and reports such as those mentioned in this motion should at this stage be produced. I believe it is not in the public interest to supply this information.


Jean-François Pouliot: Mr. Speaker, I rise to a point of order. When the item was passed by the house I could have asked my hon. friend to read the whole report of the engineer. I was good enough not to insist upon my hon. friend reading that report when the estimates were considered. We are always permitted to see office records. I do not ask that my hon. friend should go to any particular trouble. On the contrary he has been reimbursed the moneys that were unwisely spent in my county, and I congratulate him on his move in that respect.


Pierre Édouard Blondin: The motion is not debatable. Mr. Pouliot moves, seconded by Mr. Casgrain that an order of the house do issue for a copy of reports of the district engineer to the chief engineer, and for the latter's reports to the Deputy Minister of Public Works, particularizing the vote of 1931-32 for repairs to the wharf of Riviere du Loup. Is it the pleasure of the house to adopt the motion?
Motion negatived.


Jean-François Pouliot: If my hon. friend has more trouble he will not be able to blame me.



W. R. LITTLE REPORT

Mr. BROWN:: 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.
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Farm and Unemployment Relief


Richard Bedford Bennett: That order might stand, Mr. Speaker. The Minister of Immigration (Mr. Gordon) will have some observations to make before that return can be made. Part of the information sought is of a confidential character.


Pierre Édouard Blondin: Motion stands.



CIVIL SERVICE COMMISSION-EXAMINATION RATINGS OF CHARLES MOREAU AND OTHERS

Mr. POWER:: For a copy of all correspondence, documents, reports of examination, rating and marks obtained by each competitor, recommendations in favour of any competitor by members of parliament, or others, with respect to an examination held in Quebec during the month of April or May, 1931, and in particular the marks obtained by Charles Moreau, a disabled ex-soldier, for the position of caretaker, Department of Public Works, Quebec.


Richard Bedford Bennett: Mr. Speaker, the motion
involves obtaining documents from the Civil Sendee Commission, a body which at various times has taken the view that we have no such power as is indicated by this motion. On two occasions they declined to produce documents indicating what the marks and position of individuals were in connection with examinations. Whether or not that is a sound view, it was acted upon at least on more than one occasion. My own view is that if the Civil Service Commission is a body with the authority which it is suggested under a correct reading of the statute it possesses, then it is extremely doubtful whether we have any right to ask for papers in detail as to the marks any individual may have received at an examination. I think if the matter does not commend itself in that way to the hon. gentleman who made the motion (Mr. Power), it might stand in order that further inquiries might be made of the Civil Service Commission to ascertain what views they entertain in connection with the matter.


Charles Gavan Power: I may say, Mr. Speaker,
that in past sessions and particularly this session I have obtained from the Civil Service Commission returns which were couched in language almost identical with that in which this motion is couched, although I must apologize for its being somewhat involved in its form. But I have obtained returns showing marks and ratings, even confidential ratings, given by officers of the commission. That has been customary for at least two years.


Richard Bedford Bennett: They have refused to do so on numerous occasions.


Pierre Édouard Blondin: The motion stands at
the request of the Prime Minister to make further investigations.



FARM AND UNEMPLOYMENT RELIEF


[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Mr. Speaker, before the orders of the day are proceeded with I desire to mention a matter that was brought to the attention of the house yesterday by the hon. member for Willow Bunch (Mr. Donnelly).
To-day is the sixty-fourth anniversary of confederation, and it is not unusual on a day such as this that we pause and look back upon our past, take stock of the present, and look forward to the future. So far as the past is concerned I think we can contemplate it with some degree of satisfaction and pride. The achievements of the Canadian people have, I think, been unrivalled in the history of the world by any people so few in number and inhabiting so vast an area. So far as the future is concerned we contemplate it with great courage and hope and confident faith.
But with respect to the present it is undoubted that practically a national calamity has overtaken a portion of our country. In days gone by this parliament has voted very-considerable sums of money to assist others who have been deprived of their homes or who have suffered from great calamities when they were not citizens of our own Dominion or of our own empire. At the moment it is clear from the information the government has received, and is receiving, that in consequence of lack of moisture and of great heat a very considerabe portion of the province of Saskatchewan and smaller portions of the provinces of Alberta and Manitoba will not this year produce a crop. In some areas this is the third successive year in which no crop has been produced, in others it is the second, while in the smaller areas it is the first year that such a calamity has overtaken them. The estimates vary as to the area affected. The commercial and agricultural editor of the Manitoba P'ree Press, Miss Cora Hinds, has completed a survey of the province of Saskatchewan, and by questionnaire, of the other provinces with respect to the grain crop, and it is now quite clear that

Farm and Unemployment Relief
notwithstanding the copious rains of the last thirty-six hours it will not be possible for any harvest in the way of grain to be reaped in a very substantial area.
The government of the province of Saskatchewan being primarily responsible for relief measures for those directly affected, is carrying on a survey, and the results of that have, in part, been communicated to this government. It is believed that within a very short time all the relevant information will be in our possession, but it is clear that the tremendous heat has not only affected the possibility of the continued life of live stock over a substantial area, but that 5,000,000 acres of land have been adversely affected so far as crop is concerned, and probably more.
Under those circumstances parliament has never been hesitant in granting relief by way of financial and other assistance to countries beyond our borders when such a disaster has overtaken their people, and before this house rises it is the purpose of the government to submit to parliament a measure that will, we believe, at least in part, show the desire and purpose of the Canadian people to assist those who are less fortunate than the inhabitants of other parts of Canada at this particular crisis in their history.


Some hon. MEMBERS:: Hear, hear.


Richard Bedford Bennett: The extent to which that assistance will extend, depends, it is needless to say, upon the character of the information disclosed as the facts are more fully ascertained, but that it is tremendously serious goes, I think, without question, and I fear that perhaps it is the greatest national calamity that has ever overtaken this country. I hope that my fears are groundless, but I am confident from the information that has been given us that at least 100,000 people are directly affected, and their herds as well.
Obviously it has a direct bearing on the problem with which it will now become intimately associated, that of unemployment, and when dealing with this matter it is the intention of the government, after we have disposed of the business on the order paper and such other measures as we have to consider, to submit to parliament measures that we hope will enable us successfully to grapple with that difficulty during the coming winter and the balance of the year that is before us.
I think I could not do more than say that notwithstanding these disquieting symptoms of the manifest difficulties that must confront any government charged with responsibility at this time in connection with these and allied matters, the faith and confidence
that we have in our country is in no sense shaken, and although the trials and tribulations we face may be many and varied, we still have the confident belief that with the resources of our country and the perseverance and courage of the people we will be able to work out our manifest destiny upon the northern half of this continent. For that purpose I trust that whatever may be our beliefs politically, we may cooperate not only in rendering assistance to those stricken in the provinces, in the manner in which I have indicated, but in endeavouring to take care of the other situations which have developed in this country by reason of universal conditions prevailing throughout the world.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker, I am sure the country shares the profound regret of this house that a condition has arisen in western Canada of the serious character to which my right hon. friend has just referred, and I am equally sure the country will receive with satisfaction, as this house has received it, the assurance just given by the Prime Minister that the seriousness of this condition is fully appreciated by the administration and that the government is taking care to provide the necessary measures to meet it satisfactorily.
Referring to the introductory remarks of my right hon. friend, may I say that I share his view both as to the past and the future of this country, a past which has been very great and a future which we hope and believe will be greater still. I share his regret that the present is not what we would like to see it and I appreciate, and in fact have said all along, that the reason conditions in Canada are not as we should like to see them is in the main the result of a world condition. However, there has unhappily been added to that condition this, which I imagine is peculiar to our own country, of the serious damage which has been done the crops in a portion of western Canada.
My right hon. friend has spckem of the desirability of cooperation in a great national emergency such as the present. May I say to him that this cooperation will be given in the fullest measure and with the most hearty accord by all hon. members on this side of the house. I hope that if we venture to make one or two suggestions, my right hon. friend will not feel that those suggestions are made in a critical way, but rather as something which it is believed will be helpful and in its nature constructive.
In that regard may I say to him that it is now apparent that very large sums of
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Farm and Unemployment Relief
money will have to be spent this year to take care of the national calamity to which we are now referring, and that further sums will have to be spent in connection with unforeseen unemployment which may occur during the latter part of this year and throughout the coming winter. That being so, again I should like to suggest to my right hon. friend that he and the administration consider carefully the advisability of the immediate establishment of a national relief board, or something of the kind. I am not giving it any particular name, but I do wish to emphasize that I believe the matter is sufficiently important, and the amount of public expenditure sufficiently large, to warrant the government taking into its own hands, from a federal point of view, the administration of such funds as may be necessary for these relief purposes. At the time of the great Halifax disaster the government of the day appointed a relief commission to administer the 820,000,000 voted for purposes of relief. I imagine 820,000,000 will not begin to meet what the administration will have to spend in connection with relief matters this year, so I suggest that the administration very carefully consider the advisability of appointing a national board which will face this situation as a national emergency and a national obligation and become responsible, through the minister, to this parliament for the expenditure of public money from this federal source.
May I enlarge upon that suggestion to this extent, that I think such a scheme should include provincial boards and municipal boards in the larger municipalities, with which the national board could cooperate. The giving of public money to provinces or municipalities to spend in connection with their particular needs and obligations is not, to my mind, in the light of the experience we have had thus far in these matters, helping the situation; rather it is tending to aggravate it, and therefore I suggest to my right hon. friend and the members of the government that they consider very carefully this suggestion, which I am sure must have presented itself to their minds already.
I have just one further word to say in conclusion, and which I hope will not occasion a discordant note; as this is July 1, perhaps as my hon. friend has indicated, the day may assist us to come together in agreement on some matters which are of the past, particularly with respect to further discussion of them in the future. Hon. gentlemen opposite are now taking the view, I think correctly, that in relief matters the obligation is first a municipal obligation and in the next place a

provincial obligation, becoming a national obligation only when one or more of the provinces themselves represent to the Dominion that they are not in a position to cope with the situation as they find it within their own borders. That is the position of the administration of the day; that was the position I took more than a year ago, as leader of the administration, when sitting where my right hon. friend is sitting to-day. At that time, when I made the reference I did make to not giving a five cent piece to a province, hon. members wild see if they will look at the text in that regard that my remark was solely with respect to provinces that had not asked for any relief, that were not asking for relief at that time and that, in the circumstances, I felt were not entitled to any federal assistance simply because of certain demonstrations occurring then on this side of the house. I made that statement to-day in the hope that if hon. gentlemen opposite do not accept my word at the moment, a reference to Hansard will be sufficient to revise their views.
In conclusion may I repeat, Mr. Speaker, what I have already said as to the extent to which it may be possible for me personally to cooperate with the Prime Minister in helping to cope with this great problem. I shall feel it not only a duty but a great pleasure and privilege to be permitted to cooperate in in any way, and what I say of mysedf in that respect I say on behalf of all hon. members on this side of the house in regard to our cooperation with hon. gentlemen opposite in facing a matter of great national concern.


Mr. ALFRED SPEARMAN (Red Deer):: Mr. Speaker, in the crisis confronting this nation at the present time I think it is incumbent upon some member of the group in this corner of the house, representing as we do directly at least a portion of the area so badly affected and of the people who are suffering, to say a word on this occasion. In the absence of the hon. member for Acadia (Mr. Gardiner) my colleagues have asked me to undertake this task.
May I first express our profound appreciation of the attitude of the Prime Minister at this time. I think perhaps at no time since assuming his high office has he more fuliy demonstrated his capacity for fulfilling its onerous functions that he has done to-day in giving full and complete recognition to the nature and the extent of the calamity which has overtaken a part of this great country. When the Prime Minister asks this house for its cooperation, it is perhaps unnecessary for

Farm and Unemployment Relief
me to say how gladly we in this corner will accept that invitation and cooperate to the fullest extent in our power in that good work. Coming into this house as we do, holding many views which are not held by some members, we have at least this in common: we are here for the definite purpose of offering, and of giving the fullest possible cooperation in any matter of this kind when it is in our power so to do. Without going into details- for this is hardly the time or the place to discuss details as to the management of the work -I need only say, speaking for ourselves, and on behalf of the suffering farmers we represent, that we appreciate the recognition of the situation which has been manifested in the helpful and encouraging attitude of the Prime Minister, and we shall be glad now and at any time to give our cooperation and assistance with a view to having these good wishes carried into effect.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: As representing a grouip, even though a very small group, in this house, I feel bound to say a word in regard to unemployment. It was very satisfactory indeed to learn that the Prime Minister intends to give us a statement before the close of this session with regard to this important matter. I would just urge one thing-the urgency of the need. 'Possibly some of us who have, been very closely connected with the unemployed realize their needs more fully than some others, and I would point out that an absolute demoralization is taking place at the present time across this country. It seems to me that work ought to be provided-remunerative work-in the immediate future, and I would welcome any such suggestion as that made by the leader of the oppositon, that an emergency committee be appointed at once and relief works of a constructive nature on a large scale undertaken without delay, so that a large number of transients might be taken off the road and that the homes of the people might not be broken up, which is a real danger at the present time.


Richard Bedford Bennett: May I point out that the policy suggested by the right hon. gentleman who leads the opposition is one that involves questions of very great legal magnitude. These difficulties have become extremely grave by reason of recent decisions of the privy council. The method suggested is one that has been engaging the attention of the government for the last few months, and my right hon. friend is perfectly correct when he says that no doubt this matter has suggested itself to the government. It has.
But I should like the attention of the exMinister of Justice (Mr. Lapointe) and of those members of this house who are of the legal profession, and I ask them to reflect for a moment just what our powers may be in dealing with matters that are primarily within the jiirisdictidn of the provinces. The late Lord Haldane observed that the provinces were quasi-sovereign entities, and in dealing with questions of relief we can do so only at the request and with the consent of the provinces affected. But, this not being war time, when we endeavour to appoint a committee which would have jurisdiction to enforce its edicts or its will, there is a constitutional difficulty of the first magnitude. And the hon. member for Winnipeg North Centre (Mr. Woodsworth) has just touched upon the fringe of one of them. What about those who, offered work, will not take it but demand that they be maintained? That has happened already. I am bound to say that in my judgment it is part of a studied propaganda that does not emanate within Canada. But that is not a matter of importance at the moment. If any hon. gentleman within sound of my voice, who has given thought to this matter, has any suggestion to make and will send it to me either by note or otherwise, it will be greatly appreciated. For just how the forces may be coordinated and sufficient power vested in a central body to see that the policies and conclusions arrived at are made effective is a matter that is certainly not free from great doubt.
The Minister of Justice has been giving it careful consideration and attention for weeks. I pointed out, in answer to one of my hon. friends yesterday, that one of the provinces had said it required no assistance in dealing with the problem of unemployment. With respect to the making of grants, there is no difficulty; with respect to the controlling of their administration, there is considerable difficulty. The extent to which a committee set up by this parliament to function in every province, except under conditions that might make its operations more or less useless, is a matter that might engage the attention of many of our friends. One of my friends, when I discussed it with him, said, "The answer is simple: no one will object". Well, knowing as I do something of what is transpiring in Canada, I am perfectly certain that not only will objections be registered but that action will be taken that will involve the expression of opinions by courts. And courts must administer the law regardless of the fact that emergencies exist, unless parliament makes a declaration of a character which it



Farm and Unemployment Relief
may be very difficult for it to make, inasmuch as one of the provinces, as I have said, has intimated that it desires no assistance in dealing with the problem in question. I mention this because it seems to me to be the thresh-hold of all our consideration of this matter.
When I say to my right hon. friend that we have not entirely satisfied ourselves of our ability to enact such legislation, although for weeks we have been determining just exactly the form it should take, and have drafted what we thought might be a reasonable measure to deal with it, I am sure that the house will not underestimate the difficulties to which I refer. May I say this, with respect to the closing observation of my right hon. friend: He overlooked just one fact in connection with the matter. He did, on that occasion to which he has referred, and to which I would not have ventured to make reference this afternoon, mention the necessity of allegiance to a political party as a means of qualifying for assistance. I thought at that time, and I still think, that probably the statement was not intended in the sense in which it was made. At any rate, it remains just as it was said, namely, that there must be a certain quality of mind of a political type in order that the qualification for the aid suggested might be met. That was the only objection I had to the right hon. gentleman's remarks, and I felt I must state it. I thank the right hon. gentleman and those associated with him for their offer of assistance at this time, and I thank hon. gentlemen opposite for the suggestions they have made. I assure them the government will not be slow to avail themselves in every possible way of the assistance of every Canadian who, realising the magnitude of the problem with which we must deal, hopes for a successful solution of our difficulties that we may go forward on the pathway of progress.


William Lyon Mackenzie King: In reply to my right hon. friend may I say first of all, in reference to the legal difficulties to which he has referred, that I believe the precedent I have cited, of the Halifax commission-


Richard Bedford Bennett: That was a war measures act. We cannot pass a war measures act now.
Mr. MACKENZIE- KING: There was a statute of this parliament which gave power to the commission to administer funds appropriated by parliament.


Richard Bedford Bennett: There were other funds; only $5,0000,000 was voted by this parliament.


William Lyon Mackenzie King: Mr. Speaker, if that precedent is weak in any particular

may I say, speaking broadly, that I do not think there will be any difficulty in finding legal justification for a federal commission to administer federal funds. I do not go the length of saying that the obligation of such a body should extend to determining how all of that money is to be spent by municipalities or by the provinces, but what I do Suggest is that every municipality and every province before they receive any federal money should make clear their position to a federal commission which would be able to take into account not only the needs of the particular municipality making application, but the needs as well of other municipalities, and provinces throughout the Dominion. So far as any legal difficulty is concerned, if my right hon. friend were to form such a relief board and have associated with it the best legal counsel he could obtain, there would I believe be experienced no difficulty from a legal standpoint.
In regard to the other remark which my hon. friend said he could not resist making, if he will look again at my remarks as they were made at the time he will find that my reference to a political party was with respect to a purely hypothetical case, namely, that if this federal parliament were to be presenting money without a special request being made for it, that the government of that day, which was a Liberal administration, would not feel inclined to give public funds to a provincial administration which was politically opposed to it. That is to say, if they were making a presentation of public funds which of course no government could possibly do, they would prefer to make them to a political administration carrying out policies similar to their own. I point out again that the case to which my remarks had reference was purely hypothetical and provoked by an interruption. The ground which in fact I was taking was that this federal government had, as matters stood, no right to make any appropriation to any province; that until an application had been made by some province we would not be entitled to use federal money for the purpose being then considered. I think that is sufficiently clear, and that is the position which hon. gentlemen opposite are taking at the moment.


Hon. ERNEST LAPOINTE (Quebec East):: Mr. Speaker, with regard to the legal problem, the privy council has stated that the Canada Temperance Act was legal only because the liquor problem constituted-


Richard Bedford Bennett: It was a national evil.

Farm and Unemployment Relief


Ernest Lapointe: -a situation of national emergency when the act was passed. Surely the present situation as regards unemployment in Canada is more of a national emergency than was the liquor problem.


Hon. HUGH GUTHRIE (Minister of Justice) :: Mr. Speaker, I think it will be agreed that if this parliament takes the view that conditions existing in Saskatchewan and the general condition of unemployment constitute a dangerous emergency in this country, then under that clause of the British North America Act which gives jurisdiction to this parliament in regard to peace, order and good government of Canada, an act such as is suggested would be justifiable, and that no court in the land would likely interfere with the declaration of this parliament that such an emergent situation did exist. As war pointed out by the Prime Minister a moment ago, we realize that at the present time no emergent condition exists in some provinces and no relief is required. Certain it is that in the western -provinces of Canada action should be taken forthwith. Those are the difficulties, but in my opinion they can be overcome (by the declaration in any act which we put through that an emergent condition of national importance does exist which should be taken note of by this country.


Charles Gavan Power: Mr. Speaker, during the course of his observations the Prime Minister stated three times that one province had intimated that it would require no assistance. Judging from the reports which I see in newspapers friendly to the right hon. gentleman I take it that he refers to the province of Quebec. Am I correct in that statement?


Richard Bedford Bennett: Yes.


Charles Gavan Power: Has the Prime Minister
received any official indication either from the premier or from any minister of the province of Quebec to the effect that they require no assistance?


Richard Bedford Bennett: 
Charles Gavan Power: I should like to correct
the right hon. the Prime Minister. He knows very well that every day this government is being asked to extend the time during which relief measures provided by the Unemployment Relief Act of last year Shall be carried out.
22110-206i


Richard Bedford Bennett: They refer to the completion of the work.


Charles Gavan Power: The beginning and completion. If the right hon. gentleman will read the returns which have been brought down, he will find that in some oases they are asking to begin the work after July 1. If I understood the speech made by the premier of the province of Quebec, he said that that province requires no assistance of the character given last year, which involved a considerable expenditure of money without any measure of benefit being derived.


Alfred Duranleau: Mr. Speaker, I think the hon.' member for Quebec South (Mr. Power) is mistaken when he says that the premier of the province of Quebec stated that that province would not ask for any relief like that given last year. The speech delivered by the premier of that province was reported by the press and moreover it was heard by thousands of people over the radio, and he stated that the province of Quebec would be able to care for all unemployed people during next winter, and would ask nothing from the federal authorities.


Mr. HENRI BOURASSA (Labelle):: Mr. Speaker, it would be a pity if this great national emergency were now minimized by bringing into the debate thereon political speeches made by this or that one in one or the other of the parties. Whatever Mr. Taschereau or anyone else may have said, the crisis is just as acute although it may not be as bad in Quebec as it is elsewhere. I do not think the conditions as depicted by the Prime Minister as existing in the western provinces have been exaggerated, but I predict that the crisis in Montreal-for the moment I will not speak for the rest of the province-will be directly increased by the situation in the west. At the present time- I have my information on very good authority-every freight train coming in from the west with empty cars is carrying people who have no work and who steal their passage. They have a well-organized force to intimidate the officials of the Canadian National railways and partly through pity and partly through fear they are transported free of charge from the west to the city of Montreal. This is done because they have no money and because the officials of the Canadian National railways dare not leave them by the wayside.


An hon. MEMBER:: The Canadian Pacific railway is the same.
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Farm and Unemployment Reliej


Joseph Henri Napoléon Bourassa: The Canadian Pacific
railway is the same, although I understand they have not been quite as easy in the treatment of these individuals.


Pierre Édouard Blondin: I hesitate to interrupt the hon. member for Labelle (Mr. Bourassa) but the leaders of all parties have made their statements on this matter, and I am sure they spoke for the members of their respective parties. We should not at this time undertake any general discussion of the unemployment question, which matter can be discussed at the proper time when the measures indicated are introduced.


Joseph Henri Napoléon Bourassa: I respectfully submit,
first, that I do not belong to either party whose leaders have expressed their views, and, secondly, I think it my duty and my right to respond to the appeal made by the Prime Minister for all practical suggestions in order to enable the government, when they frame the policy which will be announced within a few days, to do something to meet the situation. I wanted to point out that at the present time the number of outsiders coming every day into the city of Montreal to increase the number of unemployed people there is beyond calculation. It is the same in other centres in the province of Quebec-in the constituency which I represent, in the constituency of my hon. friend from Sherbrooke (Mr. Howard), in the constituency of my hon. friend from Quebec West (Mr. Dupre), in the constituency of omy hon. friend from Beauce (Mr. Lacroix). In all those constituencies in the province of Quebec where you have a large population living largely on lumber operations and, to a very small extent of their resources, upon farms, there is a large number of people who, finding no work to do in the rural parts of the province and having reaped no sufficient results from the cultivation of the small bit of farm which they have, are now flocking to the large centres. While the two great railway companies, with the help of a few individuals, are beginning to-day to get back to the land some of the farmers who came to the city of Montreal two. or three years ago, as fast as these people leave the city their places are taken by newcomers, and unless something is done immediately this summer by the federal government with the cooperation of the provincial and municipal authorities and any private institutions in Montreal whose efforts may be coordinated in the work, the markets of Montreal, the groceries and bakery shops, will be thrown open and pillaged next winter. It is no use

hiding the fact. It is going to be so. There are people in Montreal starving to-day. Every week some of us purchase loaves of bread to give to needy people who have nothing to support them from day to day-whole families in many cases. I live near the mountain in Montreal, and I dare say that every night there are from 150 to 200 people sleeping out under the trees at eleven o'clock.


Pierre Édouard Blondin: I think the hon. member understood what I tried to indicate to him, that the giving of these details in the house on the orders of the day will not in any respect help in the solution of the difficulty. These details can all be represented to the Department of Labour or to the government in the proper way. I must call the house to order.


Joseph Henri Napoléon Bourassa: Very well, Mr. Speaker. I have said enough, I think, to open the eyes of the government.



INQUIRY FOR RETURN

[Stage Direction]
On the orders of the day:
Jean-François Pouliot: The other day the Prime Minister stated that it was competent on the orders of the day for any hon. member to inquire as to the delay in the production of papers ordered by the house. His remarks will be found at page 2381 of Hansard of June 8. I wish to refer to order 354, to which an incomplete answer was given by the Minister of Marine (Mr. Duranleau) on June 17. The order was passed by the house on June 1. I was asking for the answer to a letter dated October 2, 1930, sent to the hon. Minister of Marine. The answer that he brought down was a letter that he had written three and a half months afterwards on January 19, 1931. Not satisfied with giving me this incomplete answer, the assistant to Mr. Horton, in charge of returns, came to my office at the request of the Minister of Marine and asked me to give him back the incomplete answer which the minister had given me. So, the minister not only gave me an incomplete answer but he took it back. I had to write to him repeatedly. I sent a copy of one of my letters to the right hon. the Prime Minister, who was courteous enough to answer me. I brought the matter up three or four times in the house but got no answer. Again I wrote to the Minister of Marine, but still no answer. I would ask him to abide by the rules of the house which I will quote, from May, 12th edition, page 564.
If parties neglect to make returns in reasonable time they are ordered to make them

Inquiry for Return
forthwith: or so much of returns as has not heen made. If they continue to withhold them, they are ordered to attend at the bar of the house; and unless they satisfactorily explain the causes of their neglect, and comply with the order of the house, they will be censured or punished according to the circumstances of the case.
I have been lenient for a long time, and as to-day, the first of July, is the anniversary of the first of June when the order was passed by the house, I would ask the minister to comply with that order of the house forthwith.
Hon. ALFRED DURANLEAU (Minister of Marine); It appears to me, Mr. Speaker, that the hon. member does not know what he is talking about. He has asked for returns many times, and some of his demands overlap others. What happened was this; He asked for an answer to a letter sent by Mr. Dube of Riviere du Loup about the building of a station at Riviere du Loup. I stated to the hon. member at that time that there were two letters, one signed by my secretary during my illness in the west, stating that I was absent and that on my return I would answer his letter. The answer to Mr. Dube's letter I filed in the return brought down to the house, and the letter of my secretary was also filed in the return brought down to an order moved for my my hon. friend in which he was asking for correspondence from every member of this government and their secretaries. As a matter of fact, a copy of my secretary's letter, which is of no importance whatever, was sent by my department to the Secretary of State on the 18th of June. My hon. friend was told of that by the hon. Solicitor General. I do not know why my hon. friend brings the matter up in the house to-day and asks for something that was sent to the Secretary of State a month ago. There are no other letters than these, and I have told my hon. friend so both in this house and privately. I wish to tell him that we are too busy these times to be answering every day the long letters that he is sending to us. I would rather answer my hon. friend in this house. I think that is better. If he want3 to go to the Secretary of State, he will be able to read in that ofiice my secretary's letter.


Jean-François Pouliot: I thank the hon. member, who has never been so charming in his life.
Mr. SPEAKER; Order. The hon. mem' ber has stated his grievance and the government has replied.



ROYAL GRAIN COMMISSION


[Stage Direction]
On the orders of the day:
Mr. E. J. GARLAND (Bow River):: I .
would ask the Minister of Trade and Commerce if he is now in a position to table the correspondence in connection with the Stamp report which I asked for on the 26th of June?


Henry Herbert Stevens: The whole question, I
understand, will be discussed to-day. I shall make inquiry as to whether these documents are in hand.


Edward Joseph Garland: The minister will appreciate that the discussion may be hampered by the absence of the documents to which I referred.



TARIFF SCHEDULES


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: The Prime
Minister was kind enough to mention some days ago that he would have members of the house furnished with a consolidation of the customs tariff and amendments. I do not think they have been distributed yet, and I was going to ask my right hon. friend if he could arrange for that.


Richard Bedford Bennett: I think they were sent up to the
distribution office the day after I spoke to my right hon. friend. I will send out and inquire.


William Lyon Mackenzie King: They have not been distributed yet.


Richard Bedford Bennett: They are probably at
the distribution office.



INQUIRY FOR RETURN

[Stage Direction]
On the orders of the day:
Jean-François Pouliot: May I ask my hon. friend the
Secretary of State when the correspondence referred to to-day by the Minister of Marine will be tabled in the house?


Hon. C. H. CAHAN (Secretary of State):: I have no memory of the particular incident to which the hon. member refers. I do know that about fifty per cent of the time of my

Ce/nsus Enumera tors
department is taken up with preparing documents at his request. I shall inquire if there is any addition to be made by the Secretary of State with respect to the matter which he has mentioned to-day.


Jean-François Pouliot: I wish to thank the hon.
gentleman, who is always so kind.



WAYS AND MEANS


[Stage Direction]
Right Hon. R. B. BENNETT (Minister of Finance) moved that the house resolve itself into committee of ways and means.
Ernest Lapointe: Mr. Speaker, before the house resolves itself into committee of the whole, I wish to inform it of a protest which was left with me by the hon. member for Bona-venture (Mr. Marcil) who is at present absent. It is more the grievance of my colleague than my own which I wish to make known. Many members have complained in the house of the way in which the census has been taken in certain localities, especially in Montreal and Ottawa. The member for Bonaventure is in receipt of a letter from the Rev. Father Vital, superior of the Capuchin Community of Saint Anne de Restigouche, an extract of which reads as follows:
Yesterday morning we had the visit of the census enumerator. He had only English forms with him. We drew his attention to this. It was, however, a loss of time, because to him this form was sufficient. When he asked for my name, I told him: "Reverend Pere Vital". He wrote down "Reverend Father Vital, Reverend Father Pacifiqne, etc." And this notwithstanding our protests. He even wanted to write down for one of our friars, "Brother Alexander" instead of "Frere Alexandre". Is it not disgraceful to note how we are treated in the province of Quebec?
I must protest as Superior of the Community of "Saint-Anne de Restigouche".
To this letter the following "post-scriptum" was added:
Some patriotic persons irritated and roused by the disgraceful behaviour of the census enumerator of their district, wish to countersign this letter as a mark of their strong protest.
1 am well aware that the hon. minister has no knowledge of these details, however, I think that some apology is due to those who were so treated by an official as ignorant as he is ill-bred.


Pierre Édouard Blondin: Shall the motion carry?
'M-. rkhan.1


Richard Bedford Bennett: My hon. friend has raised a question which would properly belong to the Department of Trade and Commerce. I understand his remarks concerned the taking of the census in the county of an hon. gentleman who is absent. I believe my hon. friend has said that those taking the census are not familiar with the French language.


Ernest Lapointe: More than that.


Richard Bedford Bennett: Well, that the}' are not familiar to the extent they should be, and that in connection with taking the census they are using only the English language. If I have understood my hon. friend's remarks correctly I shall bring the matter to the attention of the Minister of Trade and Commerce (Mr. Stevens) at once. It is a matter concerning which I have no immediate knowledge.


Ernest Lapointe: I know' the minister is not personally responsible, but I referred particularly to the action of an ignorant agent.


Mr. CASGRAIN:: For which the government is responsible.


Richard Bedford Bennett: For which the government is not responsible.
Motion agreed to and the house went into committee of ways and means, Mr. Hanson (York-Sunbury) in the chair.



SPECIAL WAR REVENUE ACT

Richard Bedford Bennett: I think when the committee rose last evening my right hon. friend opposite said that in the votes and proceedings would appear a resolution dealing with the sales tax, and the exemptions in connection with its operation. Since that time I think the bill also has been printed and distributed in English and in French so that it may be more, convenient for hon. members to follow the discussion. Through the votes and proceedings I think there has also been circulated a copy of the resolution which was placed before the house last evening.
As the matter now stands the. resolution has the effect of raising the sales tax from one to 4 per cent, and a number of articles which were previously taxed at the full rate have been added to the exemptions from the sales tax. As I indicated last night there was provision made for "articles and materials for the sole use of any bona fide hospital when purchased in good faith for use exclusively by the said hospital, and not for resale." There were exempted from tax a certain limited number of articles under tariff items 476 and 476a. This makes it perfectly clear that when ' articles are purchased at a high cost for the

Special War Revenue Act
maintenance of hospitals, and for use exclusively by the said hospitals and not for resale, they shall be free from tax.
I also intimated last evening that another item had been added, namely that there would be a division of fence posts from round to split, because of a difficulty which had arisen in practice with respect to split fence posts.
Another item was added concerning articles purchased in Canada for the use of the Governor General. In practice no sales tax has been paid on these articles, and the officers administering the department desired that they should be added so that there would be no question as to the correctness of the procedure followed. Then there was a further item concerning item No. 695a of the customs tariff, -'"Paintings in oil or water colours, and pastels valued at not less than $20 each; painting and sculptures by artists domiciled in Canada but residing temporarily abroad for purposes of study, under regulations by the minister." That is not a matter of very great importance, but there was a suggestion that it should be inserted in the exemption list because of difficulties that at one time arose, but which do not amount to a very great deal.
Then there are the goods now taxable vdiioh are exempt. My hem. friend from West Edmonton (Mr. Stewart) asked for those last evening and roughly I gave them to him.
I shall nowT repeat so that there will be no misapprehension:	Hops, when produced
in Canada; salt, when manufactured or produced in Canada; oleomargarine, margarine and butterine previously exempt, all of which are prohibited in this country. Sales and importations are prohibited, as is known, except when manufactured from milk or cream.


Mr. STEWART (Edmonton):: Are hops
taxable?


Richard Bedford Bennett: Yes.


Charles A. Stewart: My right lion, friend said they were prohibited.


Richard Bedford Bennett: They would be taxable
also. Importation of oleomargarine is prohibited, but this product would be taxable if made of milk or cream only.
Then there are certain other goods mentioned in the customs tariff items. I read last evening to hon. gentlemen that corn, maple and other syrups were in the exemption class. There is however a "not otherwise specified" item with respect to glucose and matters of that kind which have been added under items 139 and 140 of the tariff, to which reference
is made in the resolution. Those are n.o.p. items.


Charles A. Stewart: Do I understand my hon. friend to say that glucose will be in the same category as hops?


Richard Bedford Bennett: No, I said that molasses, corn syrup, and sugar cane syrup are included in the exemption list which I gave last night. Maple syrup as well is included. There are certain by-ptroducts however that are not otherwise specified in tariff items 139 and 140 which are taxed. Then my friend asked me concerning the items which were previously taxable at half rate, but have been added to the exemptions from the sales tax; that is the next class. In that class there are only two items, apples dried, desiccated or evaporated; and fish and products thereof. Those are the only two items. There was one other question my hon. friend asked, namely as to what
goods were formerly subject to the full duty but
now have been reduced to half. In that connection there was the item of yeast. As hon. gentlemen opposite perhaps know, a strong claim has been made to have yeast added to the exemption list. I believe that was under consideration last year. It was thought however that having regard to the fact that there is a very large consumption of yeast for other than baking purposes, if it was placed on the half rate list sufficient exemption would be provided.


Mr. DUPUIS:: A few days ago I received
a telegram from an association of farmers in my riding who have undertaken the canning of vegetables. The telegram is as follows:
If any modification of sales tax exempting food products please arrange for exemption on canned vegetables canned fruits, jams, jellies and so forth which are essentially agricultural products; the only other material used is sugar which is now exempt. Jams particularly are competitive with honey, molasses, etc.
I would like the right hon. gentleman to tell the committee if these canned vegetables are exempted?


Richard Bedford Bennett: I was about to speak to that item, but I find there is one other item intervening-that is, goods formerly taxable at half rate which are now taxable at the full rate. There are only two other tariff items, 85 and 105e. One is mushrooms and truffles, fresh, dried or otherwise preserved. Those are luxuries. They should have been in the list anyway, and they were omitted merely because of the changes in the tariff. They are now made to pay full rate.


Mr. RALSTON:: Will my hon. friend read the last item?
Special War Revenue Act


Richard Bedford Bennett: This is item 105e:
Fruits and peels, crystallized, glace, candled or drained; cherries and other fruits of creme de menthe, maraschino or other flavour.
May I say to my right hon. friend that the distribution office tells me this copy of the tariff was placed in the members' boxes on Saturday last.


William Lyon Mackenzie King: I may say that none has come to my box and I find several other members in the same position.


Joseph Philippe Baby Casgrain: We did not receive any. What we received was this compilation of the three.


Richard Bedford Bennett: I sent out personally for the boy and gave him this copy and asked him if it was distributed. He tells me it was taken to the post office anyway. Answering my hon. friend, the following goods were previously subject to the half rate-


Mr. McMILLAN (Huron):: What is the
right hon. gentleman reading from?


Richard Bedford Bennett: From my notes at the
moment. My hon. friend will find these items in the copy of the resolution placed in his box to-day or in the copy of the bill now on his desk. Of course, he will not find this explanation there, but it appears in the schedules. The goods that will now be subject to the half rate only if produced in Canada are:
89.	Vegetables, prepared, in air-tight cans or other air-tight containers;
(a)	Beans, baked or otherwise prepared;
(b)	Corn and tomatoes;
(c)	Peas;
(d)	N.o.p.
90.	Vegetables, prepared or preserved;
(d) Pastes, hash and all similar products, composed of vegetables and meat or fish, or both, n.o.p.
105.	Fruit pulp, with sugar or not, n.o.p., and fruits, crushed or frozen.
105d. Jellies, jams, marmalades, preserves, fruit butters and condensed mJjTce meats.
106.	Fruits, prepared, in air-tight cans or other air-tight containers, the weight of the containers to be included in the weight for duty;
(a)	Apricots, peaches and pears;
(b)	Pineapples;
(c)	N.o.p.
All those now become subject to half the rate of the sales tax if produced in Canada; if imported they are liable to the full rate of 4 per cent.


James Layton Ralston: What is the reason for
putting pineapples in that list?


Richard Bedford Bennett: It is in connection with the Australian agreement, particulars of which

I cannot do more than indicate in that way at the moment in view of the fact that the original has not yet arrived.


James Layton Ralston: My hon. friend does not get my point. The provision is that articles in schedule IV shall be subject to only 50 per cent of the sales tax. This exemption applies only if goods are produced in Canada, and pineapple is one of the fruits 6n which this reduction is made.


Richard Bedford Bennett: I did not quite grasp my hon. friend's question. He is entirely right. It is merely a reprinting of the tariff item without change. The word "pineapples" has no significance there because pineapples are not produced in Canada. As my hon. friend will see, in all these instances what has been done is to copy verbatim the tariff items. Obviously it has no relation to the payment of the 2 per cent, because no pineapples are produced in this country.


James Layton Ralston: Has my right hon. friend considered carefully the exemption of fruits which are not produced in Canada but which are canned and preserved here? I have in . mind canned grapefruit which is becoming a common article of diet. Up to this time it has been entitled to a 50 per cent exemption of the sales tax. By the introduction of the clause half way down schedule IV these goods will not get the 50 per cent reduction unless they axe produced in Canada, so that canned grapefruit becomes subject to the 4 per cent sales tax. I am sure there are other fruits which are also becoming very common articles of diet and which are not produced in Canada. -Of course, I understand this clause is inserted ;to encourage Canadian producers, but there are no Canadian producers of these products. Will my right hon. friend consider extending that schedule to permit of the exemption covering all fruits in common which are not produced in Canada?


Richard Bedford Bennett: I think my former answer may have misled the hon. gentleman. As I understand it, canned grapefruit in large quantities is produced in Canadian factories. I know of two factories where grapefruit and pineapples are canned in increasing quantities. They carry half the rate.


James Layton Ralston: The word "manufactured" applies there perhaps?


Richard Bedford Bennett: Yes; but the words "produced in Canada" would have reference to the complete commodity in the can, and therefore grapefruit will carry the half rate.


James Layton Ralston: So long as my right hon. friend gives us that assurance.

Special War Revenue Act


Richard Bedford Bennett: Perhaps I should have completed that explanation before my hon. friend continued his question. In one part of Ontario there is a very large factory which produces increasing quantities of canned grapefruit. Some of the product is actually exported from this country, strange as it may sound. In recent years .considerable quantities of pineapple have been canned in Canada in glass containers. As my hon. friend knows, this also will carry the half rate as an incentive to Canadian production.


Vincent Dupuis: I understand from the explanation of the Minister of Finance that canned vegetables will pay only half the sales tax, that is 2 per cent. If I could show that there is no intention on my part of making political capital out of this question-


Richard Bedford Bennett: We take that for granted.


Vincent Dupuis: Then in the name of the farmers of this country, especially those of Quebec, who now are not able to sell their hay, because automobiles eat no hay-


Some hon. MEMBERS:: Oh, oh.


Vincent Dupuis: -and there are too many automobiles, as the Prime Minister said on another occasion, those farmers are bound to find some other way of making both ends meet. During the last five or six years they have canned a lot of their vegetables, because during the summer time there is often an over-production of vegetables on the Montreal market-I am speaking particularly of my people in Laprairie-Napierville-and they are obliged to take home their fresh vegetables. The only means they have to avoid loss is to can those vegetables. Would it not be one of the best ways to help those farmers if the vegetables that they can were exempt completely from sales tax?


Richard Bedford Bennett: I am bound to say I have no doubt that the schedule is prepared to meet a situation other than that of the individual producer-in this case, the farmer. The very language indicates that. I may tell my friend from Shelburne-Yarmouth (Mr. Ralston) that in the schedule to the act, page 20, any difficulties he may have with respect to the word "produced" is overcome by the words "when produced or manufactured in Canada."


James Layton Ralston: Yes.


Richard Bedford Bennett: The point the hon.
member for Laprairie-Napierville (Mr. Dupuis) raises is worthy of consideration. The list of exemptions, with the list of commodities that pay only half rate sales tax,
has been prepared having regard to production on another scale than that mentioned by the hon. gentleman. In a broad and general way the list of exemptions extends to practically everything the farmer buys, and as I have said the list is not framed for the half rate or full rate on the assumption of an individual farmer producing perhaps eight or ten or a dozen cases for sale. I do not know just how the language could be changed to meet that particular situation, but before the bill is given its final reading I will look into it further and advise my hon. friend. As will be observed, there is great difficulty in making an exception to the general rule.


Mr. EULER:: I take it that milk and
milk products such as condensed milk, and even ice cream, are completely exempted?


Richard Bedford Bennett: The hon. gentleman has the list before him.


Mr. VENIOT:: I understand that schedule 3 oontains the full exemptions?


Richard Bedford Bennett: Yes.


Peter John Veniot: In schedule III fish and fish products are completely exempted, but subsection (d) of clause 90 in schedule IV includes pastes, hash and all similar products, composed of vegetables and meat or fish, or both, n.o.p. There is an overlapping here. If fish and fish products are exempt under schedule III why should you impose a half rate under schedule IV?


Richard Bedford Bennett: Answering first my hon.
friend from North Waterloo he will observe at the bottom of page 13 the words:
Milk foods, n.o.p.; prepared cereal foods, in packages ....
I think my hon. friend's point is covered. The hon. member for Gloucester perhaps did not observe the letters n.o.p. following the paragraph which he read. Pish products not within the terms mentioned in the exemption become liable to the half rate.


Mr. ELLIOTT:: Might I refer to the question brought up by my hon. friend from Laprairie-Napierville. I take it that at the present time, under schedule III honey, molasses and similar products are entirely exempt from sales tax, but under schedule IV jams, jellies, canned vegetables and so forth pay a 2 per cent sales tax. I assume that is twice what they paid before.


Richard Bedford Bennett: 
John Campbell Elliott: I have had some representations made apparently similar to those re-
Special War Revenue Act

ceived by the hon. member for Laprairie-Xapierville, and tihe argument of those interested in these jams, jellies, preserved fruits and so on is that they come very closely in competition with honey, molasses, maple syrup and that class of commodities; they are very closely related, as my hon. friend will see. They urge that the same exemption should apply to these articles as applies to the honey, molasses, maple syrup and so on.
I submit that argument of the people who are in that business; it does seem there is a good deal of force in what they say.


Richard Bedford Bennett: I think perhaps my hon. friend will realize that the items mentioned are exempt under schedule III because they enter into the preparation of the articles mentioned in schedule IV. It is hardly correct to say that honey or maple syrup compete very greatly with canned vegetables, preserved fruits, jams or jellies. To some extent the commodity mentioned in the first instance is used for the purpose of producing the commodity mentioned in the second schedule. At any rate, there has been no change except to add the words "produced in Canada" so that ouir Canadian producer will have a 2 per cent preference over the brands imported from other countries. Without specifying a particular brand, which I have found to be inadvisable, there is a well-known brand of preserved fruits coming from another country which has come into very serious competition with our products. Some think the duties are high, but at least this will afford a little additional protection to the Canadian husbandman engaged in this business, sometimes on a cooperative basis. This will give him a 2 per cent preference over the imported article.


Mr. CARMICHAEL:: There is an insect
poison used by rural municipalities in Saskatchewan to a considerable extent. I am not sure whether or not the name is Insecticide. but I believe it is purchased in quantity lots by the association of rural municipalities and distributed tq the individual municipalities every year in order to poison grasshoppers. It is used very extensively, and the only way they can pay for it is bytaxing the people in the various rural districts. I understand the full sales tax is being levied against this poison, and I have been asked to request the minister to have this article exempt from sales tax. I wonder if such representations have been made to the minister also and, if so, whether he will include this item in the list of exemptions.


Richard Bedford Bennett: I think that is exempt
now. If my hon. friend will refer to item 209b and the following item he will find:
209b- Nicotine sulphate;	[DOT]
219a. Non-alcoholic preparations or chemicals for disinfecting, dipping or spraying, n.o.p.; materials, n.o.p., for use only in producing or manufacturing preparations specified in this item, under regulations prescribed by the Minister of National Revenue;
Dry preparations used for the same purposes as goods enumerated in item 219a.
I have no means of knowing the name of the poison to which my hon. friend refers, but I assume it may be nicotine sulphate; perhaps some of his colleagues will indicate if there is some other name for the poison to which he refers. Generally, the exemptions cover all such articles as that to which the hon. gentleman has referred, and certainly it will be news to me if it is not exempted. There has been no change with relation to these articles.


Archibald M. Carmichael: I shall be glad to
secure the name and submit it to the minister.


Mr. REID:: I should like to direct the
attention of the minister to an article w-hich affects the farmers on the Pacific coast. As the minister knows, we on the Pacific coast require a considerable quantity of stumping powder for the clearing of land. Until this year the provincial government allowed a rebate of $2.50 per case in order to encourage farmers to clear land, but this year it has been cut down to $2. Here it is taxed 4 per cent, so I wonder if the Prime Minister would consider allowing that commodity to be exempted when used for the clearing of land.


Richard Bedford Bennett: My hon. friend, unfortunately, has read the item exactly in the reverse way. All those items on page 17 are exempt, including blasting or mining powder, so my hon. friend's wishes are met.


Thomas Reid: In regard to the increase in postage rates, including letters-


Richard Bedford Bennett: That item will come up a little' later.


Air. HOWDEN:: The Prime Minister referred to hospital supplies. I did not catch what he said.	.


Richard Bedford Bennett: I said that some difficulties had arisen because the items in the tariff referred only to specific articles such as surgical supplies and things of that sort. It is now proposed to exempt from the sales tax all articles and materials for the sole use of any bona fide hospital when purchased in good faith for use exclusively by the hospital and not for resale.

Special War Revenue Act


John Power Howden: That would include the surgical instruments they have on hand for use of their own staff?


Richard Bedford Bennett: Surely.


Mr. FACTOR:: I have received a letter from the Toronto Public Library board asking me to make representations to the Minister of Finance with a view to securing exemption for books purchased for the library.


Richard Bedford Bennett: They are exempt now.


Mr. NEILL:: Do I understand that canned salmon has been taken out of the 50 per cent exemption category and put into the total exemption class?


Richard Bedford Bennett: At page 11 my hon. friend will find that fish and fish products are included. They are exempt.


Alan Webster Neill: That includes canned salmon?


Richard Bedford Bennett: Yes.


Alan Webster Neill: It used to be in the 50 per cent class.


Richard Bedford Bennett: Yes, and it is now made exempt. The hon. member for Gloucester raised a question as to why paste and hash and other products composed of vegetables and meat or fish, or both were liable to the tax while fish and fish products were free. The answer was that they were not otherwise provided for and were in fact a mixture of fish and vegetables constituting a paste.


Alan Webster Neill: I also failed to catch the explanation with regard to oleomargarine. Do I understand that this is struck out of the exemption list?


Richard Bedford Bennett: No. Oleomargarine is
prohibited from being imported into Canada, but some forms of oleomargarine have been manufactured from milk or cream, and they will now carry the full rate of 4 per cent if they are sold in this country. I understand that sometimes they are sold under that name, and the name has been used.


Alan Webster Neill: Is it not a contradiction in terms to speak of oleomargarine made from butter or milk?


Richard Bedford Bennett: I should think so.


Alan Webster Neill: It is rather opening the door to the entry later on of oleomargarine.


Richard Bedford Bennett: I raised that question myself. The words oleomargarine, margarine and butterine seem to have assumed in the course of years, in the process of administration of the department, a meaning that makes it advisable for administrative purposes that
we should continue their use. The hon. gentleman will remember the discussion of last evening, and he will appreciate the difficulties that are experienced in that regard.


William Duff: When the budget was brought down on June 1 a number of items which were exempt from sales tax under the previous administration were placed at four per cent. I notice by the amendment of last night that these items are now exempt. I refer particularly to implements used in the fishing industry-gasoline	engines for fishermen,
engines of all kinds for the industry, vessels, boats and dories and other implements necessary for the prosecution of the fishing industry. I understood the Prime Minister to say last night, in answer to a question, that while the government had reversed their policy with regard to this matter, as a result I presume of the widespread agitation in Canada, it was impossible to pay back the sales tax to anyone who had paid it since June 1. May I point out to the Prime Minister and the Alinister of National Revenue, with respect to some of these items, that it would be a very simple matter to have the money refunded. If it is good policy to reverse what the government proposed to do on June 1, then I say that wherever it is possible to do so the money should be paid back to those who have paid it in. Take the sales of gasoline engines or engines for the use of fishermen. These engines go direct from the manufacturer to the fishermen. The manufacturer has a complete list of his customers, and he knows to whom he has sold engines s'ince June 1. There is no question about it, that, under the policy of the government, the manufacturer of gasoline engines had to add the four per cent to the price of the engine and the fishermen had to pay the amount. In such a case there would be no difficulty whatever in the Department of National Revenue refunding to the fishermen the extra amount paid by them, which payment the government now admits is not good policy. The same thing applies to the building of vessels and motor boats and dories. In Nova Scotia last year contracts were entered into by the shipbuilders of that province, mostly with American citizens, for the construction of $5,000,000 worth of vessels or yachts. These contracts were made prior to the bringing down of the budget by the present government. In figuring the prices of these vessels, the builders did not know, of course, anything about the sales tax. If these vessels were completed and launched at any time from June 1 until yesterday when the change was made, the shipbuilder
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had to pay to the Department of National Revenue four per cent on the contract price. Clearly this involves a hardship on the shipbuilder. If he had a contract for, let us say, $45,000 on a vessel, he would not have anticipated this four per cent sales tax inasmuch as there was an exemption under the previous government. He entered into a contract to build that ship for someone, either in the United States or in Newfoundland, where practically all of our business in Nova Scotia is done, and he was compelled, under the budget of June 1, to pay into the treasury of this country $1,800, which was practically his profit on the transaction. In view of the fact that this four per cent was paid by the builder of the ship to the government, there should be no difficulty in tracing the person to whom the refund is due, and I submit that the government should arrange to pay back to the shipbuilder the amount w'hieh he had to pay in. He could not collect this four per cent from the man-


Richard Bedford Bennett: My hon. friend need not argue further. It will be paid.


William Duff: Have I so impressed the
Prime Minister?


Richard Bedford Bennett: The hon. member need
not go further.


William Duff: On behalf of the people of
Nova Scotia I thank the Prime Minister. That, of course, will apply to gasoline engines, ships and boats-


Richard Bedford Bennett: Fortunately there are not half a dozen items concerned.


William Duff: There are a few more than
that. I shall be glad to give them to the Prime Minister if his officials have not got them.	_
The hon. Minister of Fisheries last night moved a resolution whereby certain items are exempted from the one per cent excise tax. In the budget brought down on June 1 the excise tax was imposed upon all goods coming into Canada, and I desire to deal with one of the four items mentioned in the resolution brought down by the hon. Minister of Fisheries, carrying out the wishes of his leader, the Prime Minister. The resolution asks the house to exempt fish and other products of the fisheries of Newfoundland. While perhaps I would suffer more than a good many people from the effects of a tax of this kind, because for some thirty years I have been buying fish from Newfoundland, in view of the protests made by the fishermen's associations all over Nova Scotia during the last

twelve months, I would like to know why this particular item has been exempted from the excise tax. I would like to know also why it is necessary to exempt fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada. If I know anything about the high seas, and some people say I know a good deal more than I do know-


Richard Bedford Bennett: Than the hon. member
lets on.


William Duff: -it seems to me that when a Canadian vessel catches fish .on the high seas, those fish are Canadian fish whether caught on the Grand banks of Newfoundland, the Sable Island banks, the Brown banks,-


An hon. MEMBER:: The Royal bank.


William Duff: -the Royal bank or the Bank of Montreal, which is my bank. I do not see why this item should be included.


Richard Bedford Bennett: I have intimated already to the hon. member for Aniigonish-Guysborough that so far as we can ascertain -the returns will be made a few days hence- there are very few items which could give any concern at all, and with respect to those an order in council will be passed refunding the money so paid.
With respect to the second matter, I think the hon. gentleman knows better than any of us that there is a long-standing convention between Newfoundland and Canada. While it might be incorrect to speak of it as being an absolutely legal or binding obligation, I do not think any government would care to disregard it. The late government did not disregard it, and I am certain that this government will not. This convention provides that Newfoundland fish shall come into Canada free from any tax, and it is to give effect to the provisions of this long-standing convention that this item is included in the resolution. I am advised that this convention has been in force for some thirty or forty years.
There is another matter to which the hon. member has directed attention, namely, fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada, and the products thereof carried from the fisheries in such vessels. No one knows better than my hon. friend that at various times we have had discussions with respect to the modus vivendi of placing taxes upon fish landed from vessels of Canadian registry or boats that stopped at ports for the purpose of transhipment, and matters of that kind. It was abundantly made clear that any fish caught upon any of the banks to which the hon. member has referred, either

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[DOT]within or without the three or twelve mile limit, shall be exempt from this tax, because such a catch is the result of the effort of the individual made beyond the territorial limit of our country, but made by a vessel which is Canadian, either by registry or by ownership by any person domiciled in Canada. "Domiciled" is a very difficult word to define. As we in the legal profession say, it involves the absence of any intention to go to some other country to live. It is to meet the very situation to which the hon. member referred that these fish are made free of this tax.


William Duff: Mr. Chairman, in my opinion
it would never do to put a tax of any kind, whether it be an excise tax or otherwise, on fish coming in from Newfoundland, because of the fact that our fishing vessels must go to Newfoundland for their bait. We have had different examples of retaliation, and if a tax were put on fish coming in from Newfoundland, I have no doubt that the Newfoundland government would immediately tax our vessels on the bait which they must purchase in Newfoundland and which they can purchase nowhere else. In other words, the deep sea fishing of Nova Scotia would be ruined if these fish were not exempt from the tax, and I hope my hon. friend the Minister of Fisheries will give me credit for which I have just said.
I took up with the Minister of Fisheries and the Minister of National Revenue a question which is of great importance at the present time to Nova Scotia. Under the Canada Shipping Act vessels over a certain tonnage must have masters possessing a certificate. These fishermen start to work sometimes as young as twelve years Of age. They go out first as threatens, and then as headers, then as splitters, and then they go into the dories as steersmen, and in working up from throater to captain they do not have an opportunity to acquire a sufficient education, nor have they the time to spare from their vocation to attend a navigation school and take the necessary examination for a captain's certificate. Under the present act the captain of a vessel over a certain tonnage, not possessing a certificate, cannot clear that vessel from port. During the war Canada lost practically all of her shipping due to the legislation with regard to this matter. At that time the ships in Nova Scotia practically transferred from Canada either to Newfoundland or the Barbados, where they allow a captain to sail a vessel without a certificate provided he is capable of doing so.
Last year a splendid new type of fishing schooner was built, but when that boat was measured by the surveyor of shipping it was found it was over-tonnaged, and the result is that the captain must get someone else to clear his boat. These boats are cooperatively owned, one man owning one Share, another a half share, and another two shares and so on; all the shareholders being fishermen, or members of their families. I took up this matter with the Minister of Fisheries and the Minister of National Revenue and I would like to have some information so that I can telegraph to the people in Lunenburg who manage this vessel whether or not this vessel, owned in Nova Scotia and manned by Nova Scotians, can bring her fish into Nova Scotia free of duty and excise tax.


Richard Bedford Bennett: The hon. member has
raised a question which is covered, as he perhaps knows quite as well as I, by the provisions of the Canada Shipping Act. That act imposes upon us certain very distinct limitations which will be removed by the statute of Westminster. In other words, the power to pass sections of the Canada Shipping Act will be unlimited after the legislation we were discussing yesterday shall have been enacted by the imperial parliament. But may I say to my hon. friend that the issue which he raises is not limited to fishermen alone. I can show him on the statute books of this country in the various provinces legislation that allows a man to practise law without having passed the requisite examination, and there is at least one case of a gentleman being permitted, by act of the legislature, to practise medicine. In other words, there is a recognition of the principle that a certain measure of experience plus certain limited other qualifications which do not come up entirely to the examination requirements set by the bar association or the medical association shall be taken as sufficient. What my hon. friend has suggested is that that principle should be applied to others. You have young boys going to sea in fishing vessels. They go out upon the banks and work their way up until they are able to become mates and finally masters, but the statute says that they shall not clear those vessels from a port if the tonnage of the ship is greater than the limited tonnage mentioned in the statute; I think it is set at 100 tons.


William Duff: One hundred and fifty tons.


Richard Bedford Bennett: Yes, it is 150 tons now In other words, if a ship by the measurement
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of the registrar of shipping has a greater tonnage than 150, it must have a certificated master. That is a question which succeeding governments have had to consider in connection with lawyers and dentists and doctors and other professions, and it has been felt that a certain standard must be set and that that standard must be maintained. With respect to men who acquire their ability to handle ships from what you might call experience, without ever having passed examinations, there was until recent years a much wider latitude allowed, but as the statute now stands an uncertificated mariner cannot clear a ship in excess of 150 tons. I think I have put it correctly. The question of changing that cannot come up under this statute. It is, however, a matter of first-rate importance, which will have to be considered when the authority of this parliament to deal with the Merchant Shipping Act is complete and unrestricted. But as it stands I cannot see that it will affect this, because if my hon. friend will be good enough to look at the wording of the sales tax exemption, he will see that there is an absolute freedom from the excise tax of the catch, which is the important thing, that is, the fish taken by the mariner on the high seas, on the banks or elsewhere, if it is done in a registered Canadian ship. The other case mentioned by my hon. friend is also dealt with; that is the case of the vessel on the register of Barbados or the Bahamas, or some other country, manned by one domiciled in Canada.


William Duff: And owned in Canada.


Richard Bedford Bennett: Yes, it is both owned and domiciled. My hon. friend will find that on page 8. That meets the case to which my hon. friend refers.


William Duff: Are there two distinctions there? Would that mean, first, fish caught by vessels registered in Canada, and secondly, owned by persons domiciled in Canada? If it means that, it is satisfactory.


Richard Bedford Bennett: There is no doubt that there are the two classes. I think it is meant to cover the case my hon. friend has in mind.


Archibald M. Carmichael: I now have the information which I did not have when I spoke before. I find that I gave the wrong use for the poison. I thought it was for the destruction of grasshoppers, but I find that it is for the destruction of weeds. I have here a letter from the secretary of the Saskatchewan 
Association of Rural Municipalities, dated [DOT]Tune 16, 1931. He says:
We are enclosing herewith copy of a letter forwarded to Hon. Robert Weir Minister of Agriculture, having reference to the action of the government in imposing a sales tax to four per cent on certain commodities which were previously exempt from such tax.


Richard Bedford Bennett: What is the name of the commodity?


Archibald M. Carmichael: I will read that
portion of the letter which gives the names of the commodities. I see that Atlacide 's the name of the commodity that is used for the destruction of weeds. Apparently, according to this letter to the Minister of Agriculture, Atlacide had been exempted from the sales tax and it is now charged the 4 per cenl, rate. The secretary of the association points out that in addition the equipment for applying the chemical is also charged the four per cent sales tax. Further on in the letter he points out that gopher poison, which is being distributed through this association to the municipalities, is also charged the 4 per cent sales tax. He asks in this letter that all weed chemicals and the equipment for applying them, and gopher poison-those three things- be exempted from the operation of the 4 per cent sales tax.


Richard Bedford Bennett: If these items were not subject to the sales tax prior to the 1st of June, they are not now. I will look the matter up and ascertain definitely whether the items are in the exempted list.


Charles A. Stewart: I think they are not exempted.


Richard Bedford Bennett: I assure my hon. friend from Kindersley that if they are not exempted, provision will be made accordingly.


Archibald M. Carmichael: I thank the Prime Minister for that statement. The letter which has been written to me by the secretary of the association states that the four per cent sales tax has been imposed since the early part of June, while prior to that it had not been.


Vincent Dupuis: I should like to revert to the question of canned vegetables. In looking through the act I find that schedule III on page 11 refers to vegetable plants and other farm produce sold by the individual farmer of his own production, also to fish and products thereof. Would that include canned salmon? Would the same interpretation of the act as was given to my hon. friend from Comox-Albemi apply in this case, where the words "other farm produce" are used? Would

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that include also the cooperative societies? Many of the fanners in the province of Quebec unite to form a cooperative society and they manufacture canned fruit and canned vegetables of various kinds.


Richard Bedford Bennett: My hon. frined will
observe by page 11 that vegetables, fruits, grains and seeds in their natural state, and so forth, are all free from this tax, and it also provides that other farm produce sold bv the individual farmer of his own production is exempt. I take it that bees, honey, sugar and so forth, if of his own production, will be free from the sales tax if he sells them. I have no doubt that that would not apply to the cooperative societies as it now stands. As the statute now stands the cooperative enterprise would be liable to a tax of two per cent.


Vincent Dupuis: Fish and products thereof are produced by the cooperative societies.


Richard Bedford Bennett: They are in exactly the same position.


Vincent Dupuis: They are exempt?


Richard Bedford Bennett: Yes, they are exempt.


Vincent Dupuis: So that this schedule III
on page 11 would apply only to those who canned their own vegetables at home?


Richard Bedford Bennett: Yes.


Mr. HANBURY:: I would like to call to
the attention of the Minister of Finance conditions in the lumber business in British Columbia. Probably a different condition exists there than in any other portion of Canada. Many of the loggers manufacture logs and sell them to the saw mills. I have been unable to find wherein those logs produced by loggers will be exempt from this sales tax. The loggers would be paying sales tax, and then the lumber manufacturer who ' purchases the logs would also be paying a sales tax when the lumber is sold by him. Does the schedule provide for relief in respect to that situation?


Richard Bedford Bennett: I assure my hon. friend
from Vancouver-Burrard (Mr. Hanbury) that the tax will not be payable twice with respect to the same commodity.


Mr. GASGRAIN:: Who will pay it?


Richard Bedford Bennett: It will be paid once and
once only. The question as to who shall pay it will be determined by the language of the exemption. My hon. friend will observe on page 11 of the bill that logs and round unmanufactured timber are exempt.


Wilfred Hanbury: I think that refers only to farmers.


Richard Bedford Bennett: Oh, no, that refers to
everyone. There are "logs and round unmanufactured timber; British and Canadian coin and foreign gold coin; split fence posts; fence posts, railroad ties, pulpwood, tan bark and other articles the product of the forest, when produced and sold by the individual settler or farmer." That does not refer to logs and unmanufactured timber, but refers to other articles following. In practice, no tax has been collected heretofore, and that is a reenactment in that regard of the provisions which previously existed.


Wilfred Hanbury: I should like to refer
again to the item of yeast as it appears on page 20 of the bill. I understand the Minister of Finance referred to it a minute ago He said that yeast was used in Canada in large quantities for purposes other than that of bread making. Would it be impossible to separate the yeast used and give exemption to that part which is used for bread making?


Richard Bedford Bennett: In view of the very large exemptions accorded in connection with all the products used by the baker in the manufacture of bread it was felt that yeast might reasonably be subjected to half of the sales tax. I think on consideration my hon. friend will admit that such a tax is no hardship, because yeast after all is not a very large item in the manufacture of bread.


Mr. ILSLEY:: I wish to ask a question in
reference to spraying and dusting material-covered by tariff item 219a as it appears at page 13 of the bill. Those articles have been exempt from sales tax. They were taken out of the list of exemptions on June 1 and have now been placed back in the list of exemptions. My point is this: In the Annapolis valley a large quantity of these dusting and spraying materials are used in the month of June, and as I understand the situation the dealers in these spraying and dusting material-added the sales tax to any they sold during that month. I am not sure about that, but I fancy it is the case. Presumably the returns will be now made.


Richard Bedford Bennett: Shortly.


James Lorimer Ilsley: I believe they are to be made .by July 1. They will not have, to pay the government anything by way of sales tax. Is there any way of protecting the persons who bought spraying and dusting materials?
32m
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Richard Bedford Bennett: The question is perfectly clear; they should have the money refunded to them.


James Lorimer Ilsley: By the dealer?


Richard Bedford Bennett: Yes. When the returns come in we will see to it that an attempt is made to have that done.


James Lorimer Ilsley: All right.


Richard Bedford Bennett: It is only fair and proper that it should be done.


James Layton Ralston: Following that up, and directing the attention of hon. members along the same line I wish to point out to my right hon. friend that the matter referred to by my hon. friend would be of a very serious nature and could not be governed by order in council. My right hon. friend suggested to the hon. member for Antigonish-Guysborough (Mr. Duff) that where the tax under the original budget proposals has already been paid in connection with a vessel an order in council could be passed making a refund. I know of cases, however, as I am sure every hon. member does, in which goods have been actually purchased by the consumer. The consumer has paid the retailer, and quite possibly the retailer has made and will make no return. It will be difficult to get the money back. I wish to comment particularly upon articles in connection With which I feel very strongly, namely articles used by fishermen in connection with their work such as rope, head ropes for fishing nets, and fishing nets themselves. These are articles necessary for the outfitting of fishermen and in connection with which they have paid the dealer an amount equivalent to the regular price of the articles plus the increased sales tax. I submit to my right hon. friend that there must be some way of giving the money back to those, consumers. To my mind it is not fair that they should have to pay. The money has gone into the pockets of the wholesalers, or probably has gone another step farther, namely into the coffers of the government. I suggest that the government should not keep that money. Simply because those people happened to be outfitting at a particular time of the year is no reason why they should have to pay that money. Householders who have gone into stores and purchased cereals, ice cream, meats, salted or smoked, or any similar articles which were taken off the exemption list, upon which the sales tax of 4 per cent was imposed and which are now back on the exempted list, should not have to pay that money. I realize

my hon. friend will have some difficulty, and I do not think the difficulty can be overcome simply by saying that an order in council will be passed.


Richard Bedford Bennett: I did not suggest it could.


James Layton Ralston: I understood my hon.
friend to say that the difficulty would be easily overcome because there were only a few cases involved. May I say to him that there are hundreds, perhaps thousands, of cases thoughout Canada.
Following the remarks of my hon. friend from Antigonish-Guysborough I wish to refer to a matter which I do not think has been touched upon. In the town of Shelburne, in my own constituency, a yacht was being built and was being finished in June. Budget resolutions were brought down which imposed a sales tax of 4 per cent, and in addition a special excise tax of 5 per cent. When the owner came to get his register from the Department of Customs in the month of June he found he could not get it unless he paid something like $2,000. I do not know whether or not that amount has actually been paid to the department, but I submit this is a case upon which one could place his finger as indicating how far the budget resolutions went with regard to an industry in the province of Nova Scotia. That is a case where through the new budget resolutions about 9 per cent was being charged.


Richard Bedford Bennett: Does my hon. friend
know any cases where the money was paid?


James Layton Ralston: No. I have brought the matter to the attention of my right hon. friend to indicate to him the burdensome nature of the tax that was being imposed. I am very glad I am now in a position to bring the matter to the attention of my right hon. friend and to ask that if any money has been paid a refund be made.


Richard Bedford Bennett: My hon. friend from
Shelburne-Yarmouth will recall that five daya after the first of June the Minister of National Revenue (Mr. Ryokman) made a statement with respect to the method of collection, the effect of which was more far-reaching than the mere statement itself. I am informed by the officials of the department that although the returns will not be made until the next few days, few, if any, complaints have been received of payments having thus been made. I will consider whether it may not be desirable to add to the bill a section declaring that any moneys paid with respect to such cases as that mentioned shall be returned to

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the person from whom it was recovered. I wholly agree with my hon. friend that an order in council would have no effect in such a case, but I was directing my attention to the order in council which refunded money under the general law of the country to the person who paid the $1,700 or $1,800 mentioned by the hon. member for Antigonish-Guysborough. We are wholly in accord with respect to the incidence of this legislation, and if my hon. friend could think of it in those terms as well as my hon. friend from Hants-Kings (Mr. Usley), and would prepare a declaration that would be ample to protect the rights of those who have paid, I should be very glad to have it. Ajt the moment as a matter of fact, we have received no information on the subject; I inquired this morning. That may be because time has not sufficiently run to enable complaints to reach us.


Mr. ROSS:: Has my hon. friend received any communication from the universities and colleges with regard to the exemption of chemicals used for educational purposes only? I have received a communication from Queen's university on the subject, but I cannot satisfy myself whether or not such chemicals are exempt.


Richard Bedford Bennett: Would not that depend upon each chemical that is used?


Arthur Edward Ross: That is why I should like to get the information. I see that "preparations" are mentioned. What would preparations be?


Richard Bedford Bennett: I am told the word is construed to cover everything that has to be used' in connection with educational work. Whatever the construction has been heretofore it will be continued, for the same officials are continued.


Arthur Edward Ross: That will be satisfactory,
because from the last communication I have received I would say these chemicals had been exempted before.


Mr. OHABLIN:: I understand fruits and vegetables to 'be free from the tax. What about the packages in which they come?


Richard Bedford Bennett: I mentioned last evening, Mr. Chairman, and there will be found in the bill, a special item dealing with coverings. I am quoting from page 12:
Usual coverings to be used exclusively for covering goods not subject to the consumption or sales tax; materials to be used exclusively in the manufacture of usual coverings to be used for covering goods not subject to the consumption or sales tax.


Mr. COOTE:: I would urge the Prime Minister to include canned vegetables in the exemptions from sales tax. I notice it was said to-day that canned fish are exempt, and on page 13 I notice that prepared cereal foods in packages are also exempt. This being so, it seems to me to be only logical that canned vegetables should be exempt. I believe they are just as necessary an article of food as canned fish or cereal in packages. Will the Prime Minister seriously consider their exemption? I think it is really improper to tax them.


Richard Bedford Bennett: I will take the matter under consideration. I cannot give an answer until I ascertain what is involved.


George Gibson Coote: Just one other question. Can the Prime Minister tell us whether arsenic is exempt? It is used chiefly for poisoning grasshoppers. The matter was mentioned a little while ago. I am unable to find it in the bill. If the Prime Minister has not the information I would ask him to look into it.


Richard Bedford Bennett: I understand it is exempt, but I will satisfy my mind on the point.


Charles A. Stewart: I may say it is exempt, because I was preparing to attack my right hon. friend on this very item. I may say he removed a good deal of the opposition that I had to the sales tax provisions in the budget when he restored the large exemption list. I am bound to say, however, that I scarcely understand the attitude of mind of hon. gentlemen opposite, who a year or two ago were going to abolish the sales tax altogether. Now they are in office they have to resort to a very stiff increase.


Robert James Manion: We will abolish it before we go out of office.


Charles A. Stewart: Well, we came very near abolishing it.


Joseph Philippe Baby Casgrain: Another promise.


Charles A. Stewart: I would advise my hon. friend not to be too rasih in making such a promise now. I think my right hon. friend will find it very difficult, if not almost impossible, to trace the gales of goods throughout the past month in the price of which the sales tax has been included, in order that he may be able to return the sales tax so collected. Hon. gentlemen opposite take every occasion to point out how cautious the Liberal leader had been in bringing down legislation, but a little caution on the part

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of hon. gentlemen opposite with respect to this matter would be very helpful as well. I think the rather unfortunate incidents the other day with respect to glass would not have occurred had a little caution been exercised by them. As a former member of the treasury board, may I say that I pressed very hard to have those exemptions made, they grew year by year as succeeding budgets were brought down under the Liberal regime, and naturally I did not want to see the present government lay violent hands upon the list. When you get the tariff increases coupled with the wiping out of the sales tax exemptions you hit very hard the people who must of necessity pay both taxes and are the least able to bear them. I want to congratulate my right hon. friend on his afterthought in now deciding to introduce by way of amendment the complete list, with one or two exceptions, of the exemptions from sales tax that we put into effect. When we come to the tariff items I shall voice a very strong protest against some of the increases, as they are most extraordinary, particularly in view of the fact that at the September session the government clothed themselves with very large powers to deal with the fixation of prices.


William Duff: I notice calcium chloride is
subject to the 4 per cent sales tax. In view of the circumstances confronting the government I agree it may be necessary that this tax should be collected from individuals; but the provincial governments buy very large quantities of this article for laying road dust. I think my right hon. friend might very well take into consideration exempting provincial governments from payment of the sales tax where they buy calcium chloride direct.


Mr. MacLEAN (Prince):: I notice the
maritime provinces are using a great deal of this material now; the government of Nova Scotia has just placed an order for $90,000 worth. They are going to try it out on their roads to see if it will lay the dust, and the province of Prince Edward Island is considering trying it also.


Richard Bedford Bennett: Is the hon. gentleman
sure it is calcium chloride? I will see what the item means in dollars and cents and let the hon. gentleman know.


Peter John Veniot: This is used to lay the
dust on gravel and dirt roads, and costs in Canada between $27 and $32 a ton. The government of New Brunswick last year spent between $100,000 and $110,000 in connection 
with this work. I believe machinery used by governments for road purposes is exempt from sales tax, and this would come under the same classification.


William Lyon Mackenzie King: I should like to ask my right hon. friend a question with regard to the excise tax of 1 per cent. The clause reads:
.... there shall be imposed, levied and collected a special excise tax of 1 per cent on the duty paid value of all goods imported into Canada.
If I recollect aright, when my right hon. friend was speaking on this matter he said this 1 per cent would apply to goods coming in free. Is that correct, or is it not? As this item reads at present I do not see how goods coming in free could be subject to the 1 per cent tax, because they have no duty paid value. On the other hand I should be sorry if goods which come in free at present should be made subject to this 1 per cent tax, because there must be very strong reasons for free importation, reasons which undoubtedly will affect the cost of living of many people, and which will affect also the industries of the country.


Richard Bedford Bennett: I had intended that this tax should apply to all importations. As it stands now it applies to the duty paid value of goods imported into the country, as the hon. gentleman has said. I do not recall, looking at the returns since it became operative, but my memory is that it has not been collected on free goods. However, I will satisfy myself on that point, perhaps during the dinner recess, and advise the right hon. gentleman.


William Lyon Mackenzie King: I should like
if it does not apply to duty-free goods to emphasize once more the importance of leaving the resolution as it is, because I am sure there must be very good reasons why certain goods come in free. Those reasons would apply to an excise tax just as strongly as to the customs tax.
Then I should like to ask my right hon. friend a question in regard to the proviso that the sales tax shall not apply to goods the duty paid value of which does not exceed $25, when imported by mail or express. As my right hon. friend knows, there is a good deal of travelling back and forth between this and other countries, and sometimes people bring in articles of trifling value. Is it the intention that the sales tax should be imposed on all articles brought in during the course of travel, or will this $25 exemption apply to articles of small value brought in by people

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*who may be passing through the United States say by motor and returning to Canada from that country, or returning after a visit of any kind.


Richard Bedford Bennett: As I explained last evening the idea is to render free of the excise tax goods valued at $25 or less brought in by mail or express. By the way, this is not the sales tax proviso; this has to do with the excise tax. As I explained last evening, when articles valued at $25 or less come through by express or mail they go upstairs in the customs house and very often are assessed a nominal duty.
I am frank to say that the question of the imposition of the tax on articles brought into the country by individuals had not entered into my thought at the moment, for the reason that usually the customs officers have exercised a very wide discretion in connection with small valuations, because of the fact that in the United States goods are exempt to the value of $100. Articles valued at $15 or $20 usually have come in without question, but I understand they are liable to the excise tax and, if the entry is made, they would have to pay the tax as it stands at the moment.


William Lyon Mackenzie King: I think
there should be a definite understanding on that matter. For example, an hon. member might be called suddenly to spend a day in New York and in his hurry to get away forget to take with him his pyjamas and tooth brush. He would on his return have to pay an excise tax on both those articles if he brought them back. Surely in emergencies of the kind some reasonable discretion should be allowed.
Then may I ask my hon. friend another question:	Can he give to the committee any
idea of the amount of revenue likely to be foregone as a result of restoring these exemptions under the sales tax?


Richard Bedford Bennett: I promised last evening
that this morning I would inquire into that matter. Speaking broadly and generally it may be said that each one per cent of the sales tax has produced approximately $20,000,000. Last year the total was $20,783,944.15, but that was a poor year. In the previous year, when the rate was two per cent, the sum total was $44,858,751.22 and the year before, when the rate was 3 per cent, the amount collected was $63,646,671.22. In the previous year, however, when the rate was four per cent, each one per cent returned approximately $18,000,000. That was a very bad year; the total amount collected was $72,100,244.12, and in the years preceding that, each one per cent produced something less 22110-207J
than $20,000,000. The officers of the department are unable to state with any degree of authority what the changes in the exemptions will mean in dollars, but it will be a substantial sum of money running into some millions of dollars in any event. I am told it will be impossible to make any estimate of the exact sum. We budgeted on the assumption that each one per cent of the sales tax would produce something between $18,000,000 and $20,000,000. Before the third reading of the bill I will give the committee a statement of the amount received for the month of June. I will not have the revised figures, but to-morrow morning the figures will be available with respect to June, and I will give them to the committee.


William Lyon Mackenzie King: I feel certain there will be general satisfaction that these exemptions are continued. They were made in the first instance because the articles concerned were largely in the nature of necessaries of life, or articles that affected the basic industries and the implements and instruments of production used in their development.
Doubtless now my right hon. friend will have to consider ways and means of making good some of the revenue he has lost in this connection, -and I should like immediately to make a suggestion to him in order to give him an opportunity to consider it before we proceed with some of the other resolutions. I suggest that my right hon. friend consider the advisability of restoring the graduated rate of tax formerly imposed on incomes in excess of $24,000. I feel sure that if he will do that he will receive from the public at large an appreciation equal to that which will be felt in connection with his action in restoring what formerly were exemptions under the sales tax.


Richard Bedford Bennett: I will deal with that
matter when it is reached. The largest income from the sales tax was in the year 1923-24, when the amount collected was $100,990,076.80.


William Daum Euler: Has the minister made any estimate or has he any definite idea as to what additional revenue he will receive from the restoration of the excise stamp tax on cheques under ten dollars?


Richard Bedford Bennett: The officials of the department find it difficult to make an estimate, with respect to certain matters the tax was removed toy order in council. The officials inform me that it is quite difficult to give any certain information in regard to the matter. After the tax has been in operation a month or so they will be able to give a definite
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statement. It is just possible that we shall not 'be able to do it before the house rises because it does not become effective until the first of July. I am sorry I cannot give a more definite answer.


William Daum Euler: This is a tax to which personally I have been always opposed. It is a nuisance tax and nothing else. So far as I am concerned, I was always in favour of wiping out altogether the tax on cheques, and I am sorry that it was retained. Although I admit the necessity for revenues, I regret that the Minister of Finance has seen fit to restore that tax, making it in degree even worse than it was before. I would criticize that one provision in his budget as much as anything else. Its removal would be appreciated not only by business men but by those who issue small cheques and who find it a definite burden. And certainly it is a good deal of a nuisance. I would very much rather have seen this revenue raised in some other way and the nuisance tax on cheques wiped out. I can see no logical reason for placing a stamp tax on cheques. There are two principles of taxation that should be observed: one is a tax for service received, and the other a tax because of the ability of the taxpayers to pay. I do not think this tax is in accordance with either principle. Certainly there is no service received by the man who pays the tax on the cheque nor does it necessarily follow that because a man issues a cheque he has great ability to pay. There are very many people who issue cheques by reason of the nature of their business and who are not particularly wealthy or able to pay. It is in my opinion as had a tax as the old tax on window glass, on the panes of glass a man had in his bouse. I have not received very much sympathy in my objection to this tax, and so far as I was concerned I always argued against it in toto. I wish that the former administration, having partly removed it, had wiped it out altogether. It is a retrograde step now to widen the application of the stamp tax. I had hoped that the minister would be able to say how much revenue is obtained from the added tax, but I can understand, from a knowledge of the work of the department, that it is difficult to get such information. I have every sympathy with the Minister of Finance in his endeavour to get as much money as he can, but because this tax is based on no definite principle I must oppose it. It is simply a matter of reaching out and taking money where you can get it, but there is no principle upon which it rests. Moreover, it certainly involves a great nuisance from which the people might have been relieved.
[Mr. Bennett.1


John Livingstone Brown: On a former occasion I
brought up the question of the stamp on cream cheques, and I asked whether the Minister of Agriculture had been able to impress upon the Minister of Finance the desirability of exempting those cheques.


Richard Bedford Bennett: The question asked by
the hon. member (Mr. Brown) and that raised by the hon. member for North Waterloo (Mr. Euler) touch the same matter-the imposition of a stamp tax on cheques. The tax in this country is 2 cents. In England it was a penny halfpenny and now twopence halfpenny, or perhaps it is only twopence. The fact is that this tax does represent a service rendered by the state to every person who issues a cheque. A cheque is drawn upon a bank, and a bank is the creation of the Dominion parliament, which assumes certain obligations with respect to safety, by supervision and inspection-


William Daum Euler: Why not tax the bank?
'Mr. BENNETT:	It is taxed-I am coming to that-and taxed heavily too.


William Daum Euler: Not in this way.


Richard Bedford Bennett: A distinct service is rendered by the state to all those who issue cheques-a service in the way of the preservation of law and order, and the maintenance of freedom of action in relation to all matters involved in commercial transactions. This is not a nuisance tax because there is provision made that postage stamps may be used instead of the excise stamp, and when you can use either you cannot describe it as a nuisance. But what is more important is that the embossed cheque in every country in the world is practically taking the place of the stamp which is affixed by an adhesive.
I do not think there is anything that brings home to the people better the importance of some measure of thrift and economy than a small tax on cheques. With respect to the cream cheques to which my hon, friend ha3 referred, may I say this. Under this list of exemptions the farmers are practically exempt from all forms of taxation. I may misjudge my fellow Canadians engaged in farming, but I do not believe there is one who will not be glad to make a contribution of 2 cents on every cheque in order to help this country to discharge enormous responsibilities of a financial character which it has to bear ,by reason of the calamity to which I referred this afternoon. That is my conviction; and
1	believe that many people who issue these small cheques will realize, as they affix that
2	cent stamp, that they are making some contribution to the revenues of the country.

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I care not how small it is, there is nothing better for this country than that everyone should feel that he or she is taking some part in maintaining our institutions and providing the money which is required. It may be said that the sum involved is insignificant. Well, it is small. Take the cream cheque: the stamp represents perhaps 10 cents a week, $5 a year. And as I go about the country, afterwards receiving letters from people from whom I should little expect to receive them in these difficult times, I find that many of them, instead of asking to be relieved from this taxation, take this view: "Well, we think it is pretty hard, but we are glad to do our part." I have never seen a better spirit of cooperation manifested anywhere than I have observed in the letters I have received in respect to these matters. If there is one tax that can be justified it is that small tax on every cheque issued, and I venture to think that as time goes on no government will want to remove it. It will be recognized to be what I have said, an indication of willingness on the part of the people to make a real contribution, however small, to the wellbeing of the state and the maintenance of its institutions. If the tax has done one thing more than any other, it has made the people more curious as to how their money is being spent, and more insistent upon a strict accountability on the part of those who spend it. In time it will no longer be regarded as a nuisance tax but as one of very beneficial effect.


William Daum Euler: * The Prime Minister says that this is one means of impressing upon the people of Canada the fact that they must bear taxation. I do not think it is at all necessary to do that, because that fact has been impressed upon the people in more ways than one. As to its bringing in revenue and the statement that the people should be glad to contribute something to assist those who are destitute, and all that sort of thing, I cannot quarrel with that although I think every person in Canada who has the means is prepared to help those who might be less fortunate. However, this tax is in the form of a nuisance to the person who has to lick a stamp to place it upon a cheque, and to my mind the same revenue might have been raised in some other way which would have been less of a nuisance.


James Shaver Woodsworth: If this tax represented by the stamp is a recognition of a service b5f the community, wh}' should it not be proportionate to the amount of the cheque? If* one cheque is for $10 and another for $10,000, it seems to me that we might very well have
a proportionate amount collected since there would be a .larger service rendered by the community.


Richard Bedford Bennett: The hon. member is a
student of economics. He finds more time to read than I do, and he should realize that this matter was the subject of debate in the British House of Commons and House of Lords. The proportion of service rendered is not determined by the amount appearing on the face of the cheque; it matters not whether the cheque is for $10 or $10,000, the service rendered by the state is the same in both instances. It will be recalled that some years ago we had a tax based upon the amount of the cheque, but that was abandoned as being in every real sense a nuisance tax. There was the difficulty of making the correct computation, and I have seen promissory notes covered with stamps because of the small denomination available. There are many services rendered by the state which cannot be measured by the amount of income of the individual, by the amount of a particular commodity which he consumes or produces, or by the amount of wealth which he puts into circulation. In this instance it is perfectly clear that a $10 or a $10,000 cheque imposes upon the country the same obligation with respect to the preservation of law and order, freedom from attack, movement through the post, the law of merchants, and other services which provide for freedom of exchange and freedom of movement.


James Layton Ralston: Those services are paid
for in proportion to the value which is rendered.


Richard Bedford Bennett: No.


James Layton Ralston: A man pays assessment
according to the amount of property he owns, and his income tax is based upon the same principle.


Richard Bedford Bennett: The prosecution of
offenders, which is a provincial obligation, is not measured by the amount involved.


James Layton Ralston: A man pays according to his property.


Richard Bedford Bennett: The measure of service
rendered is as great with respect to $10,000 as it is with respect to $10.


James Layton Ralston: A man pays in proportion to the amount of property which is protected.


Richard Bedford Bennett: The hon. member asked
me why a cheque for $10,000 carried only the two cent tax imposed on a cheque for $10.
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and he said that the amount of the tax should be measured by the amount of service rendered by the state. I pointed out that the state renders the same service with respect t-o the $10 cheque as it does with respect to the $10,000 cheque.


Thomas McMillan: I would like
to disabuse the right hon. gentleman's mind of the apparent false impression he entertains of the anxiety of the people of this country to pay sales tax.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Mr. BEAUBIEN:: May I say a word with regard to the stamp tax as applied to creamery Cheques? The Prime Minister is aware that most of the agriculturists in this country today are selling their products below the cost of production. I have never yet sold any commodity that I have produced on my farm, and for which I have been paid by cheque, without having to pay the stamp tax on the cheque myself, no matter at what rate the stamp tax was. If I sell a carload of wheat and take payment by cheque, the stamps that are put on the cheque are charged to my account. On the other hand, if I issue a cheque for anything I buy I am compelled to put the stamp on the cheque. I would ask the Prime Minister if some way could not be found whereby the man who issues the cheque would put the stamp on himself.


Richard Bedford Bennett: That is the law now.


Charles-Philippe Beaubien: It may be the law, but when I go to the grain exchange and sell a carload of wheat at, say, $1,000, the full amount of the stamps put on the cheque is rharged to me on the bill, and previous to some years , ago the stamp tax was heavier than two cents. If I ship a can of cream to any dealer in Winnipeg the stamp tax on the cheque in payment will be charged to me no matter at what price I sell the cream. In the remarks that I made on the budget I cited the case of a friend of mine who shipped a can of cream to Winnipeg. I grant that it was not No. 1 cream, but he got $1.13 for it. Now under the present practice and the practice which has obtained ever since the stamp tax was imposed, the stamp put on the cheque in payment will be charged to him.


Hugh Guthrie: You can refuse a cheque and insist on cash.


Charles-Philippe Beaubien: I have taken the matter up with the firms myself and they say that

they have no means of absorbing that tax. The facts are just as I have stated to the Prime Minister. On any cheque that I have received in payment for any of the commodities I produce I have had to pay the tax, and on any cheques that I have issued in payment for goods I have had to pay the tax. I do not know if they are violating the law in not putting the stamps on the cheque. I would ask the Prime Minister if there is any way in which they can be prevented from doing that.


Robert James Manion: They are violating the law if they do not put the stamp on the cheque.


Charles-Philippe Beaubien: I am looking for a suggestion, not offering a criticism. I have had a good deal of complaint about it, and if there is any way in which the Minister of Finance can prevent the practice as it has been carried on in the past I would appreciate such action, and I am sure the people of this country would.


Mr. LUCAS:: What amount of revenue does the Minister of Finance expect to obtain by the imposition of the stamp tax on cheques up to $10?


Richard Bedford Bennett: I stated this afternoon that the officials were not in a position to indicate clearly what they did expect.


Charles-Philippe Beaubien: I wonder if the Prime Minister would reply to the suggestion I made.


Richard Bedford Bennett: The hon. gentleman has, for some reason, been imposed upon.


Charles-Philippe Beaubien: But all farmers are in the same position.


Richard Bedford Bennett: The law prevents that action being taken and compels the issuer of the cheque to pay the stamp tax, and for this reason: The hon. gentleman under the circumstances he indicated was entitled to cash. If he takes a cheque instead of cash, it must be a cheque issued in compliance with the law, which means that they must issue a cheque upon which the stamp has been affixed. If there is any general violation of the provisions of the law in that regard, when the bill is in committee or on third reading, a section can be added to provide a penalty for those who do not affix a stamp against the issue of a cheque. But I think that that provision is there now.


William Daum Euler: 
Richard Bedford Bennett: One and a half per cent I think is the figure now.


William Daum Euler: We will say one and a half per cent. The banks no doubt have some other incidental expenses in the issuance of circulation. Now they lend that money to the general public of Canada at six and seven, and my friends from the west say even as high as eight per cent. That is discharging a very necessary function, no doubt, and I have no fault to find with giving the banks the right to lend that money, but I do submit that the amount of tax which they pay is not commensurate with the great privilege which is given to them by the Dominion of Canada. My suggestion briefly is this, that the Minister of Finance should replace this nuisance tax by making the circulation tax one or two or three per cent higher than it is to-day. That change would be made on the principle that was laid down here at least by myself, that the tax should be based on some service rendered by the state. I submit that a great service is rendered by the state when they allow the chartered banks to issue currency to the extent I have indicated. I submit my suggestion to the earnest consideration of the Minister of Finance.


Richard Bedford Bennett: I am sorry to say that the argument of my hon. friend is specious. I thought exactly as he thinks now in the statement he has just made to this house, until I investigated the facts. It is not correct to assume that the banks issue money by way of circulation to an amount equal to their capital, and then loan it at five or six or seven per cent.


William Daum Euler: They have that power.


Richard Bedford Bennett: They have the power so to do, but in practice they cannot do it.


William Daum Euler: Not to the full amount.
Mr, BENNETT:	Nor to anything like it.
The average return from the circulation, as indicated by the chartered banks of the Dominion, taking one year with another, leaves a very insignificant profit so far as I have been able to ascertain. If the hon. gentleman will take the trouble to look at the bank returns he will find a reason for this. In the first place we will take the example of bank "A" with a capital of $30,000,000 It has the right to issue circulation to the amount of another $30,000,000. The tax to the country is based on the average circulation, and I think at the moment the tax amounts to one and one-half per cent per annum, a very substantial sum of money. If however he will take the bank return for any given period of time he will find not only that the entire capital of the bank plus its average circulation for the month is locked up in specie and in bank premises, but that there usually is a balance the other way. That balance is made up by the bank's reserves against which i't may not issue circulation, except under exceptional circumstances during certain seasons. I am certain that any of the banks will be very glad to indicate clearly their dealings in respect of their circulation from year to year. I am disclosing no secret when I say to my hon. friend that I believed that was a very proper source to tax at a higher rate, and some years ago as well as recently I looked into the matter. On computations, which have been checked and are not challenged, it is found that the circulation is not a fund that may be loaned at 5, 6 or 7 per cent and from which may be deducted only the cost of management plus a tax of one and one-half per cent. The circulation being constantly in movement, and the bank being compelled 'to carry in its vaults unused packages of bills against situations which frequently arise; and the cost of printing being very large, as perhaps my hon. friend has learned-


William Daum Euler: No, not with us.


Richard Bedford Bennett: It is found that the net profit arising from circulation is a very insignificant sum, and does not contribute
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markedly to the bank's profits. At the present time the circulation fund is taxed ratably higher, considering the benefits which accrue to those who issue it, than most other items in our taxing system.


William Daum Euler: I should like to ask the
right hon. gentleman whether his investigations were made during the business of the past year, which we know has not been as good. There seem to be large sums of capital in the bank's vaults that in two years are loaned out.


Richard Bedford Bennett: My investigations were
first made years ago because I entertained very strongly the view my hon. friend has just expressed. The figures as presented were verified, and as I have said the average from year to year indicated that the statements were correct. I have not any papers before me, because I had not anticipated the question which has now been brought to my attention, but the reports made by the heads of the institution, men who have gone into this matter in great detail, indicated that there was no foundation for the information which I held. May I say that my view at that time was exactly similar to that which my hon. friend has now expressed. I did not refer to last year's figures.
Mr. WOODSWOiRTH: Before the committee rose at six o'clock I had asked the Prime Minister why there should be a flat rate on cheques. I do not like the stamp tax at all, but it seems to me that if we are to have a stamp tax of the kind proposed such a tax ought to have some relation to the value of the cheque issued. The Prime Minister took the ground that the stamp tax really represents the maintenance of law and order, and that kind of thing, and that that was a service which was rendered equally to all in the community. I must disagree with that kind of reasoning. For some people law and order means the maintenance of a beautiful home with every comfort, travelling, the education of their families, and the like. For another man law and order means a struggle to the utmost degree to earn a precarious livelihood, that he must live on a mean street and must experience great difficulty in properly educating his family. To still another man law and order means that he must travel on freight trains in order to make a living at all, or in the hope of making one. I wonder at the Prime Minister taking the ground that the maintenance of law and order means the same thing to every citizen. It seems to me that since in practice there

is such a very great difference, the difference should be recognized in matters of taxation.
If I understand anything in connection with the principles of taxation I think it is a recognized principle that men should pay in accordance with their ability. I think the same principle should apply in this particular form of taxation. I cannot see why a man who issues a cheque for $10 should pay the same amount as a man who issues one for $10,000. That does not seem reasonable: certainly it is not in accordance with the generally accepted principles of just taxation.
Further than that the Prime Minister resorted to the argument that every citizen ought to be willing to do his bit, that he ought to play his part and that the very poorest ought to pay to the extent at least of two cents. That reasoning might be fair if it was not also urged that the millionaire ought to do his bit. I wish to suggest that the people across Canada are getting tired of being told that the poor man should pay what he can, and yet leam that the rich man claims special exemption and does not want to do anything more than the poorest man in the community. If we are to accept this form of taxation it seems to me only the barest justice that the taxation should bear some sort of relationship to the extent of the transaction as indicated by the amount of the cheque.


Mr. IRVINE:: I wish to extend to the Minister of Finance a plea in connection with the two cent stamp on cheques and I may say that in doing so I am merely stating the representations of the people of my constituency.
Last Thursday at the town of Leduc I attended the United Farmers of Alberta convention in the constituency I have the honour to represent, and the matter of the two cent tax was one of the items with which the convention dealt. May I say to the Minister of Finance that the people in that constituency fully appreciate the necessity for securing revenue for the country. I think they also fully appreciate the fact that they have to pay their share, and I believe they are willing so to do. I think also that at least in imagination they have some idea of the difficulties which the Minister of Finance must face in trying fairly to tax all the people. We must realize that if one class secures an exemption to any extent other classes have an equal claim and no doubt will make such claims. If the Minister of Finance listens to all claims very soon he would have no revenue at all. The people dn my con-

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stituency appreciate that fact. It is because we think that in connection with this particular tax a certain class of farmers are being discriminated against that I now extend to the Prime Minister this plea. If my remarks are not well founded, I shall not expect my right hon. friend to pay any attention; if they are, I should hope that he would at least give the matter some consideration.
It is the conviction of the small farmers who are shipping cream, butter and other dairy products two, three or four times a week that a two cent stamp on the small credit slips or cheques that they receive bears too high a proportion to their small incomes. Many of these cheques are for 30, 65, 70 and SO cents, SI, SI.50 and so forth, and by the end of the year they have paid a very considerable amount of their income in stamp tax-an amount which they think is much more than their fair share. Moreover, they argue that in addition to having to pay the stamp tax on these small cheques, they must also pay a two cent stamp on every cheque they draw. They do not object to this latter tax, but they are perturbed at having to pay two cents on their small cream cheques.
I know it is contended that the farmer does not pay the tax, that the dealer does. In this connection I think we must listen to the farmer himself, because surely he is the best judge as to whether he does or does not pay the tax. Mixed farming is extensively carried on in my constituency, and at this convention which I attended recently composed of delegates from all over the constituency, nearly every one of whom was shipping cream, they all maintained that they themselves paid the tax on their cream cheques. Let us assume, for instance, that the creamery or the dealer in cream and other dairy products has an annual overhead of about $150,000. The agent of the creamery or the proprietor of the business naturally is anxious to reduce that overhead or absorb it, and the question arises, can that be done more easily by increasing, the cost to the consumer, or by decreasing the price paid to the [DOT]farmer. Each finds that it is easier to ab-sord his overhead by taking the latter course; and so the farmer pays the stamp tax. But suppose the minister refuses to believe that that is so, then I refer him to the cooperative creameries. In this case the tax of course would come from the members themselves on every can of cream that they ship to the cooperative creameries. There can be no doubt that the farmer pays this tax.
The convention to which I have already referred urges the finance minister to make an exemption on cream cheques for amounts up to $5. That would relieve the smaller farmer. The farmer who is in a position to allow his cream credits to accumulate for two or three months can obtain his income at the price of a two cent stamp; but the poorer the farmer is the more necessary he finds it to take his small cheque ever}' time he ships a can of cream, and therefore he must pay the two cent tax on every cheque.
Now I ask the Minister of Finance to give consideration to this plea. I repeat, if the statements I have made cannot be substantiated I shall not expect the minister to pay any attention to my plea, but if he finds those statements are true, if he finds that the farmers do pay more than their share of the stamp tax since they get their income in these small cheques, then I ask him to make the exemption on all these small cheques up to S5.


Alfred Speakman: I should like to say a word, Mr. Chairman, in confirmation of my hon. friend's statement. The committee will remember that some years ago the same condition prevailed when the tax was placed upon these smaller cheques, including the creamery cheques. A campaign of protest was carried on for some months, at the conclusion of which we managed to persuade the government then in power that our suggestion was the correct one, and that a tax on such small cheques was not fair to the farmer. But if the tax was not fair then, it is still less fair to-day, because of the low price of cream. Moreover, the small dairy farmer is further penalized by his very laudable attempt to ship the very best quality of cream and so get the best possible grading, because in order to do that he must ship his cream in small quantities and very frequently. The committee will realize that on thousands of cheques of 50, 70 and 75 cents a two cent stamp, small as it may seem, in the aggregate amounts to a very heavy tax. In my riding we have established one of the largest cooperative creameries; it is the headquarters of the Central Alberta Dairy Pool Limited. And naturally when it was announced that this two cent stamp tax on small cheques would be reimposed I got a number of protests. First of all I received this very short wire:
Estimate handling ninety thousand cream settlements during year proposed postage and cheque adds three cents each settlement twenty-seven hundred dollars annually. Sales tax on supplies adds another four hundred dollar
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burden total tax thirty-one hundred. Can you do anything get cream coupons exempt from cheque tax otherwise pool members have to pay this. Average cream cheque at present two dollars and fifty cents.
That is the average of the ninety thousand cream settlements. In the letter which folows the manager of the pool discusses who pays the tax and says:
It is idle talk to say that the issuer of the coupon pays the tax, as the money comes from the cream, and the tax just increases the spread between butter-fat prices, and butter prices.
Which is obvious to anyone who knows anything about dairy matters, and particularly in respect to cooperative creameries where the members naturally share all the profit and bear all the costs. While I am not very hopeful, for I realize the tremendous obligation resting on the Prime Minister at the present time to obtain all the revenue possible, still I do believe he is anxious to obtain that revenue as fairly as possible and not add to the burdens of a class which he himself acknowledges is very heavily burdened. The committee will realize on a moment's reflection that whether this stamp tax is paid directly or indirectly by the man who ships the cream, it simply increases the already too great spread between the price of his butter fat and the price of the butter. I add my plea to that made by the hon. member for Wetaskiwin (Mr. Irvine) and others that the minister reconsider the matter. The amount of revenue may not be very considerable, but the principle is an important one, and the irritation caused is very great indeed.


Mr. RINFRET:: I also desire to say a
word on this tax. It is a matter on which perhaps more than on any other I have received representations from my constituents and from other electors in the city of Montreal. I am not surprised that quite a number of hon. members have risen already to plead with the Minister of Finance to reconsider this part of his budget. We are somewhat at a disadvantage in discussing the matter now, because the minister himself is not in a position to state the exact revenue he expects from this cheque tax, and we are also at a further disadvantage at this stage of the discussion because we have before us resolutions covering only part of the budget. I think it would be easier to show that the Minister of Finance could easily make up the money he would lose by dropping this part of his budget if he would alter other sections which are now before the committee. In the general discussion which took place on the budget one of my efforts was to show 
that while the Minister of Finance had not hesitated to impose taxation on the common and poor people in a general way, he had shown some generosity towards certain classes whom we think are more able to pay. I am quite sure that if the minister now pays some attention to the representations being made with regard to the stamp tax on cheques, when he comes to another part of his budget it will be easy for him to make up what he would lose by dropping this feature of his proposals.
During this discussion it has struck me that while hon. members agree that this tax is not desirable they are not quite in accord as to how they would shape it themselves. My good friend the hon. member for North Waterloo presented the argument that this is a nuisance tax, that it is indefensible and that he would gladly do away with it. The hon. member for Winnipeg North Centre argued that if the tax is to be maintained, rather than collect it on small cheques he would have a scale, as we had some years ago, increasing the tax as the amount of the cheque is increased. The hon. member for Wetaskiwin made a half way proposal, that the minimum be $5 instead of $10.
When the Minister of Finance introduced his budget he made a remark in connection with this tax which rather impressed me; he said it would not make much difference to certain large companies who had embossed cheques. The minister stated that very often these companies used these cheques for amounts below $10. I can tell the minister that I am not speaking for those companies at all, but I do know that in my own constituency and in the city of Montreal at large there are a great many people who issue several cheques each month for less than $10 in order to pay the grocer, the butcher or perhaps the dry goods store. They will feel it very much if they have to add this amount, small though it may be, to every cheque they issue. There is also the other point, that special stamps must be used. That is a nuisance in itself; you have to look for the stamps and sometimes you have to go a considerable distance to secure them.


Richard Bedford Bennett: It is provided in the
act that postage stamps may be used.


Louis Édouard Fernand Rinfret: Is that a new regulation?


Richard Bedford Bennett: Yes.


Louis Édouard Fernand Rinfret: Then so much the better; I will withdraw that part of my argument. On the other hand, however, that will make it almost impossible to tell the revenue from

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this particular tax, which will place us under an even greater handicap than is the case to-night. I share the views of the hon. member for North Waterloo, with certain reservations since this tax was introduced by the Liberal party some years ago. This is a nuisance tax, in that it is not defensible or justifiable on its principle. I do know that it has had the effect of influencing the poor and medium class people, for whom we usually speak, to do away with cheques to a certain extent, which shows that the imposition of even a small tax like this means something.
I repeat what I said a moment ago, that if the whole budget were before us I could at once put my finger on some of the provisions under which it would be easy to find many times the amount expected from this tax, but if the Minister of Finance feels that he must maintain the tax I would support the argument of my hon. friend from Winnipeg North Centre and say I would rather see the old scale restored than have the tax collected on these small cheques. I know the Minister of Finance is a man of decision; when he brings down something he does so with considerable vigour, but at the same time he is a practical business main and is quite willing to alter his views when he thinks he has good reason to do so. Yesterday he brought down a lengthy list of exemptions under the sales tax, and I think thereby improved his budget very considerably. I am quite sure that if he gives further consideration to the representations made this afternoon and to-night with regard to the tax on cheques, perhaps when the bill is before the house some amendments may be moved whereby the tax will start with cheques of $10. If he needs more money from that tax, he might increase the tax on the larger cheques, but I would strongly urge that he leave the small cheques exempted from any tax.


Charles A. Stewart: When the
two cent tax on cheques up to $10 was abolished by the Liberal government, that action was taken largely because of the agitation which arose throughout the country with regard to cream cheques, and undoubtedly the same agitation will arise again. When one considers the way this tax works on small cheques it is seen to be a very drastic tax indeed. The Minister of Finance stated this afternoon that to pyramid the tax on larger amounts was a process rather difficult of administration, but that is no more so than with cheques for smaller amounts. I admit that this will produce a very large revenue. As one hon. gentleman stated just a few moments
ago, ordinary cream cheques are for $2 or $2.50. On an amount of $10 made up of those cheques there would be a very considerable contribution to the federal treasury, and our experience was that we would be much better off to forego what was termed, together with other taxes of a similar character, this nuisance tax and secure our revenue from some other source. I quite appreciate the necessity of raising revenue, but I think the government are drying up other prolific sources of revenue by the excessive application of tariffs. If these nuisance taxes are to be reestablished for the purpose of securing revenue because other sources are being lost, then we are likely to have a great crop of them. On the other hand, from an administrative standpoint I think the government would be well advised to consider leaving the two cent stamp tax on cheques for $10 or more, though even that is an unfair tax. My right hon. friend sought to defend it this afternoon, but after all it is easy of administration. After the change was made I did not hear that any considerable agitation arose against the imposition of the two cent tax on cheques of $10 or more, so I think the government would be well advised to consider dropping this resolution, as they have done with several others.


Mr. CAYLEY:: I can easily see that this two cent tax will be quite a burden, because I understand that it covers money orders, postal notes, pay cheques and travellers' cheques, most of which affect the farmer, the labourer and the poor man throughout the country. I can readily see that it would be adding to the already heavy burden which they have to bear. The Prime Minister this afternoon said something to the effect that the tax would be a sort of patriotic contribution towards the maintenance of the country's institutions in this present emergency. I admit that. There is not a Canadian who would not be glad to help Canada at this time. It seems to me, however, that people might express their patriotism in proportion to their ability to pay. Suppose we decided upon 2 cents up to $100, exempting cheques up to $10; then for the next $100 the tax would be 4 cents. And so on up to a certain limit. That would be a true test of patriotism, and the man who could issue a cheque for $200 would feel glad to contribute 4 cents; while the smaller business men would contribute according to their means. I think of the many expenditures which the farmer has to make: he has to keep up his insurance premium; he has to send money orders to the business houses in the cities, and he has to spend money in various
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other ways. In my opinion it will be not only difficult to collect this tax, but it will be also an injustice to impose an additional burden upon the farmer when he is already overburdened. And this applies not only to farmers but to thousands of poor people throughout the country.
I should like to get some information from the Prime Minister in regard to drainage tiles for agricultural purposes, which I see are exempt. Are we to interpret "agricultural purposes" here to include drainage tiles for roadsides in the construction of municipal roads? Thousands of tiles are used for that purpose..


Richard Bedford Bennett: Used by whom?


Thomas Merritt Cayley: I presume, by the municipal council. It is further provided that crushed stone produced or manufactured by any municipality exclusively for use in building or maintaining roads or sidewalks, and not for sale, and sand, gravel and rubble, shall pay the tax. There are many privately-owned gravel and sand pits, the owners of which will have to pay the sales tax. I wonder how that will be collected.


Richard Bedford Bennett: I am told that there is no change now in this item. With respect to tiles used for agricultural purposes, for drainage on the farm, out to the drain, there has been no tax. On tiles used by the municipal council there has been a tax. As regards gravel, crushed stone and rubble, the. tax has been collected from the proprietor who sold it and not from the municipality that used it in connection with the maintenance of highway facilities within the boundary of the municipality. I remember on one occasion

not in parliament-urging upon the minister of that day some such provision, the matter having been brought to my attention on the train; and that government later provided that no collection should be made when the gravel or crushed stone is used for the purposes of the municipality.


Charles Gavan Power: I am under the impression that there has been a decision of the department to the effect that stone, rubble and gravel are not taxable even when taken from the individual pit.


Richard Bedford Bennett: I am told that when it is sold by the proprietor the tax has been exacted. It may be that in the particular instance to wffiich the hon. gentleman has referred the tax collector might not have been sufficiently well informed to collect the tax.


Charles Gavan Power: This was a decision of the department.


Richard Bedford Bennett: I am told by the commissioner that it is taxable. With respect to the tax on cheques, it was- to remove the nuisance feature that the tax was made of universal application. The nuisance arose from the fact that in one instance a cheque for $12 had to have a stamp, while a cheque for $9 had not. With the use of embossed cheques, provided free by the banks, except for the charge for embossing, the result in many instances was that a cheque for an amount under $10 was written on that form of cheque, and it was a nuisance for one to remember that a cheque under $10 did not need the stamp.


William Daum Euler: People are no better off this way.


Richard Bedford Bennett: In this instance all
cheques carry the stamp, and there is no necessity for remembering that the tax is not payable on cheques under a given amount. There is one hon. member in this house who likes to suggest that one is always thinking in terms of companies. I am not thinking of companies at all. One of my colleagues told me that, in paying for household goods, his wife always used the embossed cheque, and she sometimes discovered that she need not have used a cheque providing for the 2 cent tax. One does not use a different cheque book in writing cheques for amounts under $10. With regard to the representations made to reduce the amount to $5, for the reason that some cream cheques are less than $1, I shall take the matter into careful consideration before the bill is disposed of. The government will consider these representations and determine whether or not such action as suggested is warranted.


William Lyon Mackenzie King: Do I understand that in regard to the postage stamp there is an addition of one cent excise which is applicable only to letters within Canada, and not to letters addressed to other parts of the empire?


Richard Bedford Bennett: All letters originating in Canada, wherever destined, pay the one cent tax. Already the drop letter, so-called, pays the one cent. That is to say, the local rate in Ottawa is two cents, one cent postage and one cent tax. When the government of my right hon. friend removed the one cent tax from three cent letters they did not remove it from the drop letters in the cities. The result was that the rate was one cent plus one cent tax. There has now been added to all other letters an additional one cent. My hon. friend from Gloucester last evening asked a question with respect to the air mail service. He will find

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that the section does cover the air mail, because it refers to all mail which is handled by post, and the one cent applies to all letters and postal cards that are transported by post, which has a definite meaning under our institutions.


William Lyon Mackenzie King: The section
provides that there shall be levied and collected on every letter for transmission by post, over any distance within Canada, a tax of one cent in addition to postage payable. That is only for letters posted in Canada. The postage has been two cents anywhere within Canada, and penny postage throughout the empire. As I read the section, there will hereafter be penny postage throughout the empire, but letters carried over any distance within Canada will have to pay the additional one cent.


Richard Bedford Bennett: That is only a way of expressing it. Every letter that moves any distance in Canada will pay an additional cent. A letter cannot reach any part of the empire without travelling through Canada, and it also pays the one cent. The language used in the section is only a form of expression, but all letters originating in Canada will pay the additional cent.


William Lyon Mackenzie King: In other words, it is three cents within Canada and throughout the empire?


Richard Bedford Bennett: Yes.


William Daum Euler: Is the one per cent special excise tax imposed on duty free goods?


Richard Bedford Bennett: My first impression seems to have been correct. Duty free value, as defined iby the statute, means free goods, and the value is their fair market value. That is defined by statute.


William Lyon Mackenzie King: Hereafter there is to be a tax on everything that comes into Canada.


Richard Bedford Bennett: Yes, one per cent. With respect to the point raised by my hon. friend from Quebec South, I may say that the decision of the department was made on August IS, 1928, that crushed stone produced or manufactured by any municipality exclusively for maintaining roads and not for sale shall be free, and not otherwise. That was made by order in council following the recommendation of the department, on August 18, 1928.


Thomas Merritt Cayley: That means that thousands of farmers throughout the country who have small pits will have to keep track of what
they sell hereafter that does not go to road construction. And the tile makers throughout the Dominion will have to differentiate between tiles sold for agricultural purposes and the few odd tiles they sell for other purposes.


Richard Bedford Bennett: There is no change in the law - as it has been administered since 1928. It may be that the fanner very seldom makes a claim. He may be very frequently asked to make it. But I am referring to what the law is and has been, and I have stated what it is and has been since August 18, 1928.


Thomas Merritt Cayley: That may be all right, but still I think the thing is going to be a nuisance and a very hard matter to enforce.


Henry Herbert Stevens: Has it been?


Richard Bedford Bennett: The commissioner tells me that there has not been any trouble.


William Lyon Mackenzie King: In view of what my right hon. friend has just said about this one cent tax applying to everything, I asked him a little earlier if he would indicate whether or not an exception would be made in the case of small articles brought into the country as the result of purchase in the course of a visit to the adjoining country.


Richard Bedford Bennett: I have noted that.


William Lyon Mackenzie King: As the resolution now stands, unless those articles are brought in by mail or express, in which case they are exempt up to $25, they will be taxed. Under the proposed law if one takes a trip to the United States and purchases $5 worth of goods, he would have to declare those goods and pay the tax.


Richard Bedford Bennett: I have made a notation upon the margin of my bill to look into that matter.


James Layton Ralston: I appreciate the assurance of the Prime Minister that the representations made with regard to fixing a minimum of $5 in the case of the cheque tax will receive consideration, and we hope that that may be a forecast of favourable action. I submit that there can be no logical reason for not having that same exemption apply to money orders, travellers' cheques and receipts for money.


Richard Bedford Bennett: In my judgment, the application would be to all.


James Layton Ralston: My right hon. friend has said that in connection with the handling of money the tax is a small fraction of the amount involved, but two cents on a $10
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Alfred Edgar MacLean: Is there to be a two cent charge on every money order?


Peter John Veniot: Certainly.


Alfred Edgar MacLean: Would the Minister of
Finance look into the effects of that tax upon the revenue of the Post Office Department? Take a post office order for one dollar, there would be a two cent stamp on that, plus the tax, which would make it four cents.


Richard Bedford Bennett: There would be a two cent stamp on it if it were being sent away; two cents for the letter, and two cents for the money order.


Alfred Edgar MacLean: The cost of the money order would be two cents, and then there would be the two cent stamp on it, making a total of four cents for a small order, and then one cent extra postage. The people would be apt to use cheques and discontinue the buying of money orders. The committee is aware that the mail order business is earned on mostly by post affice orders, and to my mind this would be a direct tax upon the ladies of the household who do most of the buying from these mail order houses. It would entail three cents additional expense in the case of each small purchase. The leader of the opposition referred to parties return-

ing from a trip to some other country and bringing in certain articles. I have a case before the customs department in connection with a person' who spent the winter in England. A fur coat was purchased in that country but upon arrival in Montreal in May or June the coat was held by the customs department until the duty of $36 had been paid. This seemed to me to be rather an extreme case, as the coat had been worn all through the winter months. It seems the customs officials have the right to do that. Now I suppose the excise tax and the sales tax will be added to that.


Richard Bedford Bennett: That has nothing to do
with either the sales tax or the excise tax on the statement as made. I know nothing about the case, but just listening to the statement of the hon. gentleman I would say it was a seizure because of failure to make a declaration.


Alfred Edgar MacLean: The department ruled
that it was quite within the jurisdiction of the customs officials to tax articles brought in in that way.


Richard Bedford Bennett: There always has been
the right on the part of the customs authorities to make a seizure where there has been no declaration, and if the customs officials had not been told of the coat which the hon. gentleman referred to it would be competent for them to seize it. I understand that that has always been the law.


William Lyon Mackenzie King: To come back to the additional one cent tax on postage in Canada. I wish to see if I understand exactly what my right hon. friend means. Is there any necessity whatever for the words " for any distance within Canada." The resolution reads:
Resolved, that it is expedient to introduce a measure to amend section seventy-one of the Special War Revenue Act, chapter one hundred and seventy-nine of the revised statutes, and to provide that there shall be levied and collected on every letter for transmission by post for any distance within Canada a tax of one cent, in addition to postage payable.
I would interpret that as having been intended originally to mean that the additional one cent postage applied to letters that were mailed in Canada and were to go any distance within Canada but would not include letters to go beyond Canada. I may be mistaken in that. The Prime Minister is quite sure. I would ask if there is any necessity to retain those words " for any distance within Canada " in order to give the meaning he is now placing upon it?

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Richard Bedford Bennett: I can only say to my
right hon. friend that the draftsmen have used this language as covering the end sought to be attained. That is, if it was transmitted by post for any distance within Canada it paid the additional tax. To be truthful, when I read it, I assumed that they had in mind the possibility of letters posted on outgoing ships and matters of that kind. I do not know whether that was meant by it or not, but clear it is that this covers it in any event.


William Lyon Mackenzie King: I imagine it is just a case where the draftsman has become a little confused [between my right hon. friend's policy of Canada first and his policy of Empire first. He evidently thought at the outset that the intention was to be Empire first, and then came to the conclusion that it had better be Canada first, and between the two he did not know just what to do, and so he left the whole paragraph ambiguous.


Richard Bedford Bennett: The right hon. gentleman spoke just a little too soon, for we have adopted exactly the language of his statute, and have merely added the words, " letter and ". So whatever conflict there might be between Canada first and Empire first, we find ourselves in accord in this instance.


Peter John Veniot: That clause applied because we had a two cent rate all over the empire Now you are having a three cent rate. Does that apply to the empire as a whole, or to the British possessions, the Union of South Africa, and so forth?


Richard Bedford Bennett: Yes. We have merely added the words, " letter and


Peter John Veniot: For any distance within Canada.


Richard Bedford Bennett: The exact words that were there before. If it moves any distance in Canada it pays the one cent before it goes out of Canada, whether it goes to the United States or to another part of the empire or anywhere else.


William Lyon Mackenzie King: My right hon. friend says that I spoke a little too soon. I may say to him that perhaps he ha3 spoken a little too soon. In order to interpret his own act I observe that he has had to go back to our legislation, as he has done in most matters of this kind.


Richard Bedford Bennett: It is pleasing in turn to realize that my right hon. friend's legislation was copied or taken from his predecessor's.


William Daum Euler: If I might revert for a moment to the question that was asked some time ago by the hon. member for South Oxford (Mr. Cayley) and referred to by the hon. member for Quebec South, that is, the matter of sales tax on stone and gravel if produced by the individual farmer, my impression was very strong that we had exempted the small individual farmer who sold an occasional load of sand or gravel from the operation of the sales tax because it was almost impossible to collect if. It was my impression, and I have verified it, that an order in council was passed exempting the small farmer from the payment of that tax.


Charles Gavan Power: Exempting everybody, and it 'is in the resolution itself. If the Prim? Minister will read it I think he will come to the conclusion that the resolution itself specifies that sand, gravel, rubble and field stone are exempt. I do not think it is worth while having any discussion about it, but if the Prime Minister will read the resolution he will find that the order in council to which he referred a moment ago says that crushed stone produced by a muncipality is free and sand, gravel, rubble and field stone no matter by whom produced are free. I am quite sure that that is the interpretation given by the department.


Richard Bedford Bennett: It is the other way.


Charles Gavan Power: I yield to my right hon. friend's superior legal knowledge.


Peter John Veniot: As I understand, it, you are permitted to put either an excise stamp or a postage stamp on cheques. How are you going to differentiate between the two departments as to revenue? Where are you going to give credit? You cannot give credit for the whole to the National Revenue department, for they can only get credit for the excise stamps issued by them and the returns made. The Post Office Department would have to get credit for the postage stamps used on cheques. That will not give you as much revenue as though you used excise stamps altogether because under the Postal Act you have to pay 70 cents up to five thousand, and 50 cents between five and ten thousand, so you have a 50 per cent and 70 per cent deduction from the revenue you anticipate on that transaction.


Richard Bedford Bennett: There is no doubt about what the hon. gentleman says. This is done to accommodate the people and remove what might be considered a nuisance. The Post Office Department will get credit for all postage stamps sold during the year, and the
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National Revenue department for the others. It is amazing the complaints made by people that they cannot conveniently use a two cent stamp, which most people have in a pocket book or elsewhere on their person.


Peter John Veniot: Do away with the excise
stamp and leave it to the post office entirely.


Richard Bedford Bennett: I have always had some
doubt as to how it came into being, but it did, and we are merely providing that either may be used.


William Lyon Mackenzie King: May I say
a word as to how it came into being? One is not expected to disclose anything that takes place in the cabinet but controversy was carried on in this house so perhaps I may speak of what occurred here. That I remember very well, there being considerable discussion on the point as to whether it was advisable to keep the revenues of the two departments separate and distinct, and Mr. Bureau, who was then Minister of Inland Revenue, made out a very strong case before his colleagues and this house on the advisability of issuing separate and distinct stamps for revenue purposes. I quite well recall that at that time it was thought in the public interest to keep the two separate although it would involve the inconvenience which my right hon. friend has spoken of. I believe it would be well for him to discuss the matter very thoroughly, with both the Postmaster General and the Minister of National Revenue, if he has not already done so, before making a decision.


William Duff: I remember distinctly that this discussion came up some years ago when the Hon. Mr. Bureau was Minister of National Revenue. Up to a certain time one either could use postage stamps or excise stamps on cheques. It was shown that the government was not receiving a great deal of revenue, due to the fact that if postage stamps were bought the postmaster received the most of the revenue and, of course he kept it. Although I cannot remember the exact year, a change was made in the law to the effect that only excise stamps would be used, and in that way the government received a great deal more revenue. It seems to me there is no reason why that should not be carried out in this instance. Wherever stamps are required for cheques I think the postmasters in the little country districts or towns should be supplied with excise stamps to sell to their people so that the government might receive the whole of the revenue.


Richard Bedford Bennett: That is what is done now.


Mr. SPENCER:: I wish to congratulate the Prime Minister upon the change providing that the public may use either postage or excise stamps. I should be pleased to see excise stamps eliminated altogether. I do not think anything has caused more inconvenience in connection with the stamp tax than has the necessity for keeping both kinds of stamps on hand. The convenience o-f the public will be well served by the change which is being made.


Charles A. Stewart: May I ask the. minister if there is any considerable volume of business in connection with fire insurance, particularly by foreign companies, on which he has imposed the 15 per cent?


Richard Bedford Bennett: It will be observed by those who have read the section dealing with the 15 per cent tax that it does not come into effect until a proclamation has been made. There are in this country a very large number of fire insurance agents extending from the Atlantic to the Pacific who receive 15 per cent of the premiums on the services they render. They have felt that owing to the necessity of their maintaining offices in Canada they should not be subjected to the competition I have mentioned. That competition at the moment pays a 5 per cent tax. As I have said this tax is now under litigation and it is expected the privy council will deal with the matter this summer. Litigation is pending in which the validity of the tax is questioned


Charles A. Stewart: I do not just follow the remarks of my right hon. friend. Does he refer to a tax on foreign companies?


Richard Bedford Bennett: Yes; that is now under litigation. This increase from 5 per cent to 15 per cent will not result in the greater amount being collected until a proclamation is made bringing it into force. I am informed that a number of the provinces have made a rather heavy impost on similar companies, and all that will be carefully considered before a proclamation is made. I have mentioned that, although I could go into more detail if required. I think however the hon. gentleman realizes that the. rate bears some relation to the rate which our people have been receiving for the issuance of policies and the collection of premiums in connection with their own Canadian business. The proclamation bringing this measure into effect will not be made without the fullest information.


William Daum Euler: Would it be possible to make a levy of less than 15 per cent?


Richard Bedford Bennett: There is a levy of 5 per cent being made now, and that will continue until the proclamation.

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William Daum Euler: If it were decided that 15 per cent were too much, could it not be made 10 per cent?


Richard Bedford Bennett: Not as it stands in this statute.


William Daum Euler: My right hon. friend would not have discretion?


Richard Bedford Bennett: That discretion is not granted. However the hon. gentleman has made a suggestion which I may frankly say I had not considered. It is worthy of consideration. I think my hon. friend is referring to a percentage not less than 5 and not more than 15.


William Daum Euler: Yes.


Richard Bedford Bennett: That is not usual, but I shall consider the suggestion because. I think it is worthy of consideration.


William Lyon Mackenzie King: I do not wish to take up the time of the committee in discussing further the matter of postage. I do believe, however, the question is more involved than would appear on the surface. The Post Office Department differs from some other departments of the public service in that it is a public service department. The payment for postage is a payment for services rendered by the state as distinct from payment of a tax for revenue purposes. If my right hon. friend's present intentions are carried out I am afraid he will find that if there is any considerable amount of revenue raised from the tax the Post Office Department will soon reach the position where there will be surpluses rather than deficits, and pressure will be brought to bear upon my right hon. friend to reduce postage. In so doing, however, he will really deprive himself of a source of revenue which would have remained to him if he had kept the revenue of the Department of National Revenue entirely separate and distinct from that of the Post Office Department. I know that at the time the former administration decided to insist upon the use of revenue stamps on cheques my feeling was exactly as that of my right hon. friend at the present time. I felt that to make the public buy revenue stamps would impose an additional obligation, and that as most everyone would have postage stamps in his pocket it would be infinitely more convenient to use postage stamps on cheques. After having gone into the matter, however, and having listened to a full discussion between the Minister of National Revenue and the Postmaster General, all the members of the former administration were convinced that it was highly 22110-208
desirable to keep the two sources of revenue entirely separate and distinct, to keep the post office revenue in its own account and the revenue of the Department of National Revenue in another. I think the matter is worthy of careful consideration.


Peter John Veniot: In support of what has
been said by the leader of the opposition let me draw the attention of the right hon. gentleman to two facts which have occurred to my mind. There were over eight and a half million postal notes issued last year. Taking those postal notes at one cent each we have a revenue of about $80,000 or $85,000. There were about seventeen million money orders issued, bringing in a revenue of about $350,000 at the 2 cent rate. Those postal notes and post office money orders will all bear the two cent postage stamp, because they are sold in the post office, and revenue stamps will not be placed on them.


Richard Bedford Bennett: I think they always have, have they not?


Peter John Veniot: No, there have been no
postage stamps used on cheques in the last three or four years.


Richard Bedford Bennett: No, not on chequeson postal notes.


Peter John Veniot: Yes, exactly. Lately, however, there has been no excise revenue stamp in the shape of a 2 cent postage stamp on post office orders. There has been a regular fee charged by the post office which was figured in ratio to the amount of the order. Apart from that, however, we have one cent in the case of postal notes and two cents for money orders. Instead of that money going to excise, at least $430,000 of it will go to the Post Office Department.
As an ex-Postmaster General I wish to see the Post Office Department get all the revenue possible, and while this $400,000 odd will give an increase to the rural postmasters at the rate of 50 per cent in one case and 70 per cent in the other, thereby increasing their remunerations, and while I am perfectly satisfied to see that take place, yet if that action is being taken for revenue purposes to swell the receipts of the excise department I think my hon. friend is missing the mark, because he will not get that revenue for the excise department.


Richard Bedford Bennett: There is no doubt that
the ex-Postmaster General is correct in his statement. However, the moneys go to the same pool in the end, namely, the consolidated revenue fund of Canada.

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Peter John Veniot: I beg your pardon, not in the rural districts. There are at least four thousand post offices, the revenue of which does not go into the consolidated revenue fund; it is paid to these postmasters under commission.


Richard Bedford Bennett: Of course, but the surplus goes into the revenues of the country. My hon. friend does not mean for a moment that any surplus does not reach the consolidated revenue fund?


Peter John Veniot: No, it does not.


Richard Bedford Bennett: Excuse me. Once every month an adjustment is made. The rural postmasters cannot put the money into their pockets; it goes into the revenues of the country the same as the excise tax. The postmasters have been selling excise stamps during the last two years.


Peter John Veniot: No sir, they have not.


Richard Bedford Bennett: They did, but they are not now. I stand corrected in relation to that. But it is a question of balancing the convenience against the inconvenience; that is all it is. What the hon. gentleman has said has been considered, I think, by every member of the government, as to whether or not this provision is one which should find its place in the statutes. It is a question whether or not a man who usually has on his person a two cent postage stamp in his pocket book, and should find himself unable to write a cheque without violating the law because he has no excise stamp and cannot get one, should be able to use his postage stamp and issue the cheque. If not, he is violating the law by issuing his cheque without placing a stamp upon it, and is incurring a possible penalty of $50. I have no very fixed conviction about it, but my view was, weighing the balance of convenience and inconvenience, that it was a convenient thing to use a postage stamp. In view of what has been said by the right hon. gentleman and by the former Postmaster General (Mr. Veniot) I will have the matter again investigated by the officials with whom I have already discussed it. If there is any insuperable reason why the proposal should not be adopted, we will not proceed further with it; but if it does appear that it would be a convenience to all those who issue cheques, I think the balance of convenience should be respected. If I thought by retaining this proposal we should be able to balance the income and outgo of the postal department next year, I think the right hon. gentleman would agree with me that it would be a splendid experiment to keep it there. But I do not think he need

have any fear because the postal department is not making a profit to-day that we can balance the account merely by exchanging postage stamps for excise stamps in the manner indicated.


Alfred Speakman: There is another point to be considered-after to-day we shall be using the three cent postage stamp and the two cent stamp will be a rarity.


Peter John Veniot: You can attach two ones.


William Lyon Mackenzie King: I entirely agree with the Prime Minister as to the question of convenience, but sooner or later the question of revenue is going to come up in connection with both the Post Office Department and the Department of National Revenue. It is dangerous to prophesy, but I do venture to predict that if the matter is left as my right hon. friend now proposes he will find that his revenues will drop very perceptibly in the Department of National Revenue and those of the Post Office Department will increase to the point where there is a surplus. Then great pressure will be brought to bear upon him to bring back postage to a two cent basis-pressure that he will not be able to resist if times improve, as we all hope they will. The public generally will become confused as to the reason for the improved position of the postal revenue, and we will find it difficult to explain how the post office revenues have increased while others have fallen off.


Peter John Veniot: I do not want to delay
this item, but let me point out again to the Prime Minister that the additional two cents on money orders and the additional cent on postal notes, with the additional cent on air mail service will bring him an additional revenue of $800,000.


Richard Bedford Bennett: That is splendid.


Peter John Veniot: That is what you are going to get.


William Lyon Mackenzie King: You are going to lose it from the Department of National Revenue.


Peter John Veniot: But of that you are going
to lose $400,000 from the national revenue department. I think if the right hon. gentleman will look into these figures he will find that I am correct within $50,000 I base my calculations from my knowledge of the department on the quantity of mail carried last year by the air service. From the two cent routes you will get an extra $199,000; from the five cent routes $80,000 to $85,000; and from your postal notes and money orders the revenue will be over $420,000. I am with the right

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hon. gentleman on the question of convenience, but I want him to know what revenue he is receiving for the taxes that are being imposed. He will not know it from the postal department, and consequently the people will have no knowledge of the amount of taxation which has been imposed upon them in this way.


William Daum Euler: Mr. Chairman, I think it
is highly desirable that the government should know exactly what revenue is obtained from this particular source. I think it is just as desirable that the public be inconvenienced as little as possible. On which side the balance turns I am not prepared to say, but possibly both purposes could be served in this way. Would it not be possible, since all the cheques go through the various clearing houses in our cities, to have a record of the exact number of cheques that are handled throughout the year; multiply that number by two and you have your revenue in dollars and cents; then you can deduct that from your total receipts in the Post Office Department and you have the excise stamp revenue also.


William Duff: The stamp duty is reimposed
on the small cheques in order to gain revenue. If people are allowed to use a postage stamp instead of an excise stamp on these cheques, for every dollar's worth of stamps which are so used the government will receive only 50 per cent, or perhaps 35 per cent in post office revenue. So there is not going to be very much revenue received by the government from this tax if they are to receive this small percentage. If the postmasters of the various districts are going to get 50 per cent commission, or whatever it may be, we might as well go back to the old system of not putting stamps on cheques of $10 and under. If it is not compulsory to use excise stamps on cheques I think you will find the government will get little, if any, revenue, from this source of taxation. With regard to the convenience or inconvenience of the public, I think I know something about the rural districts where the people .might be inconvenienced by not being allowed to place a postage stamp on cheques. To-day if I make out a cheque for payment of an account here, and I have no excise stamp in my pocket. I hand the payee two cents, and when he gets down to the bank he buys a excise stamp and places it on the cheque. That practice is followed all over Canada. If a man way back in the country makes payment by cheque, and has no excise stamp handy, all he has to do is to hand out two cents and when the cheque is deposited at the bank it is duly 22110-20Si
stamped. In this way the law is fulfilled in the spirit if not in the letter. Nine or ten years ago I had as much to do as anybody with convincing the finance minister of those days of the desirability of requiring excise stamps to be used on cheques. If the government expect any revenue from this source there is only one thing to do. It will not inconvenience the people to any great extent to put excise stamps on cheques, and the government will get practically all the revenue from those stamps, since the customs officers only receive a commission of one-half or one per cent. I strongly recommend to the government that they decide not to allow the postmasters to sell the stamps which will be placed on cheques, because as I said a moment ago there will be no revenue to the government. The postmasters in the different districts will have their salaries increased much more than is necessary. I remember during the war, when this tax was put on first, that several cases came to my notice where postmasters had doubled their salaries, and in the towns many postmasters received a great deal more revenue than they were entitled to receive, through the sale of these postage stamps for use on cheques and notes, especially when the tax was graduated. I know something about this matter; I live in and represent a rural constituency, and I say the government need have no fear of inconveniencing the people. I would lay down the law that excise stamps should be used only for the purpose of cheques or notes.


Charles Gavan Power: I must take issue with my
hon. friend from Antigonish-Guysborough. In practice it will work out that the person wishing to put a stamp on a cheque will find he has only a three cent stamp, because now it will cost three cents for a letter. The result will be that the government, in an indirect and I think wholly improper way, will get a greatly increased revenue. One cent stamps will not be in general circulation; every person will buy three cent stamps.


An hon. MEMBER:: He can put on two
one cent stamps.


Charles Gavan Power: He could put on two one
cent stamps, but he is not likely to have them. I believe it is more than probable that in at least twenty-five per cent of the cases the cheques will bear a three cent stamp, and the government will derive that additional revenue.


William Duff: No, the postmaster will get it.


Charles Gavan Power: The postmaster will get
perhaps fifty per cent, but the government
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will be getting more than it should get. On the other hand, my hon. friend speaks of people in the rural districts and suggests that the postmasters be allowed to sell excise stamps. The postmasters will not do that unless they are paid a commission, and if you pay a commission it might as well be paid on postage stamps. One of the points stressed most strongly by persons who have discussed the budget with me has been, "Let us get away from the nuisance of having to carry excise stamps." I do believe that the vast majority of people who give out small cheques would much prefer to attach a postage stamp to them rather than an excise stamp.


Louis Édouard Fernand Rinfret: If I might try to sum
up this discussion, I find that every hon. member is agreed on two points. In the first place, we all agree that it would be a great convenience to do away with the excise stamp and use a postage stamp instead. In the second place we are agreed that it is desirable to be able to tell what is the amount of revenue from the post office and what is the amount from other sources.
Perhaps it is possible to conciliate those two points. If we think it would be a great convenience for the public to have just the one stamp possibly we could get the information we desire in some way other than by selling different stamps. The hon. member for North Waterloo made a suggestion a moment ago which appeals to me. The banks might be able to report the number of cheques that have gone through the clearing house, and in that way it would be very easy to find out the tax paid on cheques. The same thing could be done in the Post Office Department. My good friend the former Postmaster General, by merely looking at the estimates, has been able to tell us that this will involve about $400,000. If by a casual glance at the estimates the former Postmaster General, whose ability I admit to be above par, is able to say what this will mean, surely the Post Office Department under my genial friend will be able to establish the same thing. The Post Office Department knows how many postal notes are issued in a year. If there is a fixed amount of taxation, be it one cent or two cents on every postal note or other note issued by the post office, then it will be the duty of the Postmaster General in making his report to mention the amount paid by way of taxation on those notes. Therefore we will know, when the revenue of the Post Office Department is given to this house, that a certain percentage of that revenue really belongs to the Department of National Revenue.

I therefore submit, Mr. Chairman, that we should make every effort to retain in the bill the sections which permit the general public to use postage stamps, which I suppose will mean the eventual disappearance of the excise stamp, and greater care should be taken by the government to establish by Statistics the amount of taxation collected not only in connection with letters but from all other sources requiring the affixing of a stamp.


Richard Bedford Bennett: I think my hon. friend the ex-Postmaster General entirely overlooked the fact that as the law now stands, under sections 69 and 70 of the Special War Revenue Act the stamp affixed to a money order is a two cent postage stamp. These are the words:
No money order for an amount exceeding ten dollars shall be issued under the provisions of the Post Office Act unless there is affixed thereto or to the relative advice a postage stamp of the value of two cents.
So as an actuarial computation the statement of the ex-Postmaster General does not seem to have much value, because under the statute as it was the two cent stamp had to be affixed.


Peter John Veniot: Are you not now adding two cents more?


Richard Bedford Bennett: No.


Mr. YENIOT:: Yes, you are.


Richard Bedford Bennett: No. Then the next section reads:
No postal note for an amount exceeding ten dollars shall be issued under the provisions of the Post Office Act until there is affixed thereto a postage stamp of the value of one cent, to be paid for by the purchaser of the note.
Those are additions to the cost of the note and the money order at the moment, and we are merely providing that i!t may be a postage or other stamp. There is no additional two cents.


James Layton Ralston: But the additional revenue is to be derived by reason of the fact that you are now taxing a money order or postal note, a travellers' cheque or a bank cheque, the amount of which is below $10.


Richard Bedford Bennett: But that is not what the hon. gentleman said. He read from the report that 17,000,000 money orders and 8,900,000 postal notes had been issued, and he proceeded to make his computation as though they were all for amounts less than $10, but that number included all the notes and orders, whatever their value. As the statute now stands the tax is paid by postage stamp and not by excise stamp. As my hon. friend will observe, the revenues of the Post Office Department

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were swollen by the two cents in the case of the money order and the one cent in the case of the postal note. The amendment merely makes it applicable to all money orders or postal notes whether over or under 110, and the computation made by the ex-Postmaster General, he will see at once, is as far beside the question as it is possible to be.


Clarence Joseph Veniot: You are reading from the revised statutes of 1927?


Richard Bedford Bennett: Yes.


Peter John Veniot: Is there an excise or postage stamp affixed to-day to postal notes and money orders, for excise purposes?


Richard Bedford Bennett: If they are over 110, for war revenue purposes; that is what I am told.


The CHAIRMAN (Mr. Bury):: Shall I report the resolution?


Richard Bedford Bennett: There is a part of the bill which has to do with exemptions from the operation of the Excise Act which heretofore having been granted, as well as others which have come before the department for consideration. One is the sale, transfer or assignment of bonds and debentures of the Dominion of Canada, about which some doubt existed The next is the assignment of the allotment ot the shares of any association, company or corporation; and the new one is the sale to any person resident and domiciled without Canada of any bond, debenture or share of debenture stock transferable by delivery to bearer.


James Layton Ralston: That is new.


Richard Bedford Bennett: Yes, but I fancy it is not unfamiliar to members of the house. While it has not been observed in practice, it imposed a penalty upon Canadians as against foreign brokers when they made transfers.


Thomas Merritt Cayley: The Prime Minister will remember that some days ago I had the pleasure of a conference with him with regard to the purely farm mutual companies engaged in fire and weather insurance. I asked whether he would consider putting them in the same category as the fraternal benefit societies.


Richard Bedford Bennett: That is not in this resolution.


Thomas Merritt Cayley: I thought that insurance came under this.


Richard Bedford Bennett: No, only the excise
feature.


Thomas Merritt Cayley: The insurance question came up a short time ago.


Richard Bedford Bennett: That was another matter. If there is any doubt about it, I will discuss the matter when the bill is in committee. I understand it is in the other bill. I wish to protect my hon. friend, so that his position will not be prejudiced.


James Layton Ralston: I wish to direct the attention of the Minister of Finance to the excise tax proper of one per cent, which is a brand new tax. My right hon. friend says it applies to present duty free goods as well as to dutiable goods. He has provided certain exemptions from that tax, not very many, but exemptions which I submit do require some explanation. I have in mind two. First there is an exemption from this one per cent tax of material used for the manufacture of binder twine for export. I should like to know why that exemption is restricted to material used in the manufacture of binder twine for export and not in the manufacture of binder twine for use in this country.


Richard Bedford Bennett: This tax as it stands applies to all articles, free or otherwise. The exemptions apply to raw leaf tobacco, and so on, and fish and other products of Newfoundland, and the material used in the manufacture of binder twine for export, there having grown up a considerable body of export business. If under the law as it stands that tax were imposed it might have the effect, because of the fiscal laws of other countries, of destroying that export trade. And that is something that has to be very carefully considered in relation to many of these articles. So far as I can see, this is the only one that stands in that position.


William Lyon Mackenzie King: My right hon. friend will discover that international competition along many lines has become so keen that the imposition of a one per cent excise tax may mean the difference between our exporters losing altogether 'certain markets they have to-day and their being able to retain them. That is the 'great danger of this one per cent tax, and it is the objection which, of course, we have to the general imposition of customs duties foy my right hon. friend. I venture to say that what is going to happen as a result of the imposition of extended customs tariffs is that a large part of the export market will be lost altogether, and lost for the simple reason that competition has become so keen in the markets of the world that the placing of this extra burden upon
Special War Revenue Act

our own manufacturers and producers will make it impossible for them successfully to compete abroad.


James Layton Ralston: Let me now refer to the next exemption. I do not think my right hon. friend has given any reason why the first exemption which I have mentioned should not apply to binder twine used in this country. It is all very well to give a benefit to the foreign market, but at the same time those who use binder twine in this country should have the benefit of exemption from this one per cent excise tax. I want to ipoint out also the exemption mentioned by my hon. friend from Antigonish-Guy^borough-the exemption of fish and other fish products of Newfoundland'. My right hon. friend gave as a reason for that exemption the fact that there was some convention with Newfoundland. I have looked up the act, and there is no convention. Perhaps my right hon. friend has something else in mind. There is no convention which prevents the imposition of an excise tax on that fish. The exemption contained in section 8 of the Customs Tariff Act is to the effect that, notwithstanding anything in that act, fish and all other products of the fisheries of Newfoundland may be imported into Canada free of customs duty until otherwise determined by the governor in council, by order published in the Canada Gazette. So that there is nothing about any convention. There is nothing to prevent my right hon. friend from imposing this unusual one per cent excise tax on that fish. But that is not the worst of it. The right hon. gentleman in his declaration, that he is going to impose an excise tax on articles which are free as well as on articles that are dutiable, is striking at the fishing industry in this country in two ways. In the first place he is letting in fish from Newfoundland exempt from the excise tax; and in the second place he is taxing what is now free, the rope used by the fishermen as one of their implements of production. The fishermen, therefore, are being struck from both sides by this one percent excise tax, and I ask my right hon. friend seriously to consider whether an implement of production such as rope, which is a raw material used by these men in carrying on their industry, should not 'be exempt in order to assist the producers of Canada. I remember distinctly the right hon. gentleman's declaration: "To her products I pledge my patronage, and to the cause of her producers I pledge my devotion." I am urging upon him the cause of the producers of Canada, particularly the fishermen, who at the present time are allowed to bring in rope free and who are now struck by this one per

cent excise tax on the one hand, having at the same time on the other to meet additional competition from fish coming in from Newfoundland. I submit to him that this is one instance in which the principle of assisting the primary producer should be carried into practice.


Richard Bedford Bennett: I am sure the hon. gentleman did not intend to suggest that we were now striking a blow at the fishing industry, because we have not changed the law as it stood. The Canadian fisherman has always been subject, since 1907, to competition with Newfoundland, and he still is. How has he been Struck?


James Layton Ralston: He has to pay an excise tax of one per cent on the rope which he imports, and which is his raw material. The general law of Canada provides that all imports shall be subject to a one per cent excise tax, while the import which competes with him is exempt from that tax. And yet the raw material which he uses is to be taxed.


Richard Bedford Bennett: Fish does not compete with beef. This is a case of fish, and in Nova Scotia and New Brunswick the fisherman stands in the same position to-day as he did before with respect to Newfoundland fish.


James Layton Ralston: Not at all.


Richard Bedford Bennett: Absolutely the same
position. He is subject to the same competition, and by no specious argument can the hon. gentleman get away from that fact. The putting of a duty of one cent on a pair of scales does not change the question of competition of Newfoundland with New Brunswick and Nova Scotia fish. Section 17 of the Newfoundland customs tariff reads:
Provided always that the governor in council may, at any time when it shall be made to appear to him to he for the interest of the colony, by proclamation to be published in the Newfoundland Gazette, suspend the operation of this clause for a limited period, the duration of the said period to be stated in the said proclamation, in respect of all or any of the above mentioned articles.
This covers such items as flour, pork and so on, which now go from this country to the colony of Newfoundland. A convention has been maintained for many years which provides that our products shall be permitted to enter Newfoundland free of duty and that we are not to put imposts against their fish coming into this country.


James Layton Ralston: I submit that there is no convention to prevent the imposition of an excise duty.

Special War Revenue Act


Richard Bedford Bennett: The Newfoundland legislature did not limit it to customs duty. This matter has been crystallized into the form of a convention by which our exports go into Newfoundland free of duty and their fish comes into this country free of duty. This procedure has been enforced by statute since 1907, with the limitation that we might at any time by proclamation make their products subject to our duty. The hon. member this afternoon admitted, very properly, I think, that we might put the government of Newfoundland in a position where they might issue a proclamation. Such action would be undesirable; the loss to the country as a whole would be greater than any benefits which might accrue. If our fishermen were being subjected to greater competition than they have had to meet heretofore, the position would be different. The competition remains the same; there has been no change, and no change is contemplated. Newfoundland fish came in free, they will continue to come in free; our exports found a market in Newfoundland by reason of the convention to which I have referred, and they will continue to do so.
It is true that the impost of one per cent applies to rope, but it will be noticed that this will amount to only one dollar for $100 worth, and $10 for $1,000 worth. That is the only impost with respect to rope, as this article will be free from the sales tax. I do not think any fisherman will raise a question as to the payment of that small tax.


James Layton Ralston: The right hon. the Minister of Finance made that same argument this afternoon, that no fisherman or no citizen of Canada would object to paying this tax. He seems to have the idea that the only tax paid by the people of this country is the stamp tax and the special taxes included in this resolution. If the people of the Dominion of Canada will look at their dinner plates or at their clothes they will soon see the taxes they are paying to this country. It does not need a one per cent excise tax or a Stamp on cheques to convince them that they are paying their share to assist what my right hon. friend describes as a national emergency.
I submit that the fishing industry is being discriminated against as compared with the other primary producers. If there is any import which competes with the farmer, he is protected to the extent of the imposition of the one per cent excise tax. In the case of the lumberman, pulpwood coming in from Newfoundland is subject to the one per cent excise tax. If anything is imported which competes in any way with the miner, the
same tax is imposed. But in the case of the fisherman the one per cent excise tax is taken off and at the same time a tax is imposed upon his tools of trade. The fisherman is left exposed to this competition, and I submit that in order to be able to meet it he should be compensated by receiving exemption on the articles used in his trade. My right hon. friend may not know it, but it costs these men $700, $800 or $1,000 per season to fit out, and no small part of that amount is made up in the purchase of rope. I have asked my right hon. friend time and time again to try to see my point of view, namely, that the fisherman is exposed to competition which is not open to any other primary producer, and at the same time he has to pay this additional tax. I do not intend to delay the committee, but I submit that the convention can easily be overcome. If the excise tax can be excepted in the case of Newfoundland fish, then it can be excepted in the case of the rope which is used by the fishermen of Canada in connection with their fishing operations.


Mr. PORTEOUS:: Would the Minister of
Finance advise the committee if clause 14 on page 2 of the bill applies to mutual fire insurance companies?


Richard Bedford Bennett: That is not in this bill.


Mr. YOUNG:: I confess I cannot understand why this one per cent tax is called an excise tax. It looks to me very much like a straight customs duty. Under the new rates many articles will carry a duty of 100 per cent, and that would mean not a one per cent excise tax, but a two per cent tax to be levied on the real value of the goods, because this tax is levied on the duty paid value. There is a considerable list of exemptions, and I should like to know upon what basis the Minister of Finance determined what articles should be exempt. I see that split peas, barley meal, pot barley and vegetable plants are exempt. Upon what basis did the Minister of Finance select that list?


Richard Bedford Bennett: Is the hon. member referring to the sales or excise tax?


Edward James Young: Excise tax.


Richard Bedford Bennett: The excise tax is section 88.


Edward James Young: That is the one to which
I am referring, the one per cent excise tax.


Richard Bedford Bennett: The resolution reads:
Provided, further, that the said tax shall not apply to articles on which other excise taxes are imposed on importation by part XI of this act-
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That is to avoid double taxation.
-nor to raw leaf tobacco when imported by licensed tobacco or cigar manufacturers, material for the manufacture of binder twine for export, when imported by the manufacturers thereof, British and Canadian coin and foreign gold coin, fish and other products of the fisheries of Newfoundland; fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada, and the products thereof carried from the fisheries in such vessels; donations of, clothing for charitable purposes, nor to goods enumerated in customs tariff items 700, 702, 703, 704.
And so on. Item No. 700 covers animals and articles brought into Canada temporarily and for a period not exceeding three months, for the purpose of exhibition or of competition for prizes offered by any agricultural or other association. The other items are as follows:
701.	Menageries, horses, cattle, carriages and harness of, under regulations prescribed by the minister;
702.	Carriages for travellers, and carriages laden with merchandise, not to include circus troupes or hawkers, under regulations prescribed by the minister;
703.	Travellers' baggage, under regulations prescribed by the minister;
704.	Apparel, wearing and other personal and household effects, not merchandise, of British subjects dying abroad, but domiciled in Canada; books, pictures, family plate or furniture, personal effects and heirlooms left by bequest;
Then 705 covered settlers' effects, and 705a was another form of settlers' effects, and 706 covered articles for the personal or official use of the representatives of His Majesty's governments, and 707 articles for the use of the Governor General.


Edward James Young: That is a very limited list. It virtually means that the free list is abolished. There is practically nothing except a few things that would come in duty free, and the tax will work out in a great many cases to two per cent and not one per cent, which is equivalent to another increase in the tariff additional to the increases embodied in the budget, and without any justification. I would ask the minister why he calls this an excise tax?


Richard Bedford Bennett: Because it is.


Edward James Young: In what respect?


Richard Bedford Bennett: It is just what it says. It is a duty of one per cent imposed on the value of all goods brought into the country.


Edward James Young: Collected by customs
officials?


Richard Bedford Bennett: By whatever officials may be designated for the purpose, but presumably by the customs officials, although the excise department takes credit for it and it will appear in their returns.


Edward James Young: Wherein does it differ from a customs duty?


Richard Bedford Bennett: The duties of the customs tariff are either specfic or ad valorem duties or both, and some articles come in free. This has nothing to do with a customs tariff at all. It is a straight excise tax on all importations.


Charles Gavan Power: The 'minister's explanation
has not been explained yet.


Richard Bedford Bennett: There is no explanation
beyond the fact that the tax is imposed to raise revenue at this time.


Charles Gavan Power: It is an excise tax because
you call it so.


William Lyon Mackenzie King: I draw the
attention again of my right hon. friend to what I think is going to be the effect of this tax on the export trade of Canada. In the first place it is a tax on all imports coming into Canada. The imports coming into Canada to-day may broadly be classified in three groups: commodities in the nature of necessaries of life; luxuries; or something that enters into some line of manufacturing or the development of the primary industries, either raw materials or implements of production. In other words, they are all, except luxuries, articles that enter into either the cost of living or the cost of production. They are coming in, that is to say being imported, for the simple reason that our people can obtain them by importing them at less cost than they could obtain them if obliged to pay for them when bought in Canada. On these goods is being placed a duty of one per cent. That duty is being imposed on the duty paid value of the goods imported, which will make the tax higher than appears on the face of it. That means with respect to all of our export trade, whether it arises from the primary industries-fishing, lumbering, mining, or any branch of	agricultureor from the secondary manufacturing industries, that those engaged in the export trade will have to the extent of more than one per cent on imported materials, tools and implements, and imported necessaries consumed by workers in industry, an additional burden of taxation to bear, and that will have to be carried notwithstanding that the only place where these surplus commodities can be sold is in world markets, which are the most competitive of all markets. I repeat that in world markets one or two per cent additional taxation placed upon those who are engaged in any branch of exportation, whether in the primary or in the manufacturing industries, may be just sufficient to cause the country to

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lose its market abroad. While my right hon. friend may think he is going to get additional revenue in that way, I am afraid that what he will gain in one way, he will more than lose in export trade. What those engaged as producers or manufacturers in our export trade will lose will cost him and the coiuntTy very much more in the long run than all he will raise by this proposed taxation.


Mr. VALLANCE:: Take the case of raw
material coming in for the manufacture of binder twine. If the binder twine is consumed in Canada by the farmer, we pay the one per cent tax, but if exported the tax is not paid. Am I right in that?


Richard Bedford Bennett: Perfectly correct.


John Vallance: Is that fair?


Richard Bedford Bennett: Yes.


Thomas Merritt Cayley: I notice that raw leaf
tobacco when imported by a licenced tobacco or cigar manufacturer is exempt. We have a considerable tobacco industry coming along in our part of Ontario, and I was just wondering if the finance minister had considered every phase of this question and assured himself that there would be no injustice done to the growers of tobacco in Ontario.


Richard Bedford Bennett: I do not know whether
my right hon. friend has observed that the new section 94 of the bill provides for a drawback of 99 per cent of all the excise tax that has been paid on goods that are exported. It used to be a drawback of 99 per cent of the consumption or sales tax applied in respect of materials used, but now we are providing for a drawback of 99 per cent with respect to any good used for export.


Vincent Dupuis: I wish to call the attention of the Prime Minister to a definition of excise. I always understood that an excise tax commonly meant a tax imposed within the country itself. Just for the information of the house I should like to give this dictionary definition of excise:
An inland duty or. impost levied upon the manufacture, sale or consumption of commodities within the country.


Mr. CHAPLIN:: That is what this is.


Vincent Dupuis: Manufactured within the
country? I hardly understand how that could be applied to goods coming in from outside. To prevent misunderstanding I think it would be better to call this tax by another name.


Edward James Young: By its own name, a tariff.


Charles Gavan Power: I do not want to delay the
committee, but I think there is a clause here
which really requires' explanation from the Prime Minister. Now that we have the Prime Minister here I trust that he will see to it that it is at least clarified. Item 704 covers:
Apparel, wearing and other personal and household effects, not merchandise, of British subjects dying abroad, but domiciled in Canada.
This afternoon we had from the Prime Minister a definition of domicile. It was the residence of a gentleman residing in a country and intending to reside there. It is true that this country may become a veritable paradise if the right hon. gentleman continues in power much longer, but at the same time the poor dead man has no chance. He has to go somewhere else, and if he is dead I doubt very much whether he can really be domiciled in Canada.


Richard Bedford Bennett: With my hon. friend's fund of information and knowledge of law he must know that every man has a domicile. As Lord Haldane said in the Jeffries case, a man's place of birth is his domicile of origin. He may lose that domicile of origin, and if there come a time when he no longer has a domicile he reverts to his domicile of origin. Every man who dies has at the time of his death a domicile.


Charles Gavan Power: Where is his animus re-vertendi?


Richard Bedford Bennett: The case in point is the Widener case in the House of Lords, with which I have no doubt my hon. friend in the course of his reading has become familiar. The person in question had lived for about twenty years in England, but the animus as expressed from time to time by his speeches was that he always looked upon the United States as his country; in other words he had given expression to an animus revertendi, a desire to return to his native land. The House of Lords decided that the United States was his domicile. The matter before us is not quite the joke that it might seem to be; every man who dies has a domicile either of origin or of choice.


Charles Gavan Power: If my right hon. friend had expressed it, "whose domicile previous to his death was in Canada," the statute would have been more properly drawn.


Richard Bedford Bennett: I quite agree, but my hon. friend will realize that the statute to which attention is now being directed mentions only a section of the Customs Act which existed for many years in its present form. All we have said is that the excise tax shall not apply to the provisions of that section, so that the wearing apparel and personal
Special War Revenue Act

effects of the deceased who is domiciled in Canada shall not be subject to the tax. No doubt my hon. friend with his ready wit thought this was a fit occasion for an enjoyable joke at the close of a difficult and hot session. On further consideration, however, he will realize that this is merely the mention of a section with the draftsmanship of which we are not at the moment concerned.


Charles Gavan Power: I do not ascribe to my right hon. friend the drafting of this section. But why exempt the wearing apparel of the dead man when the poor live man has to pay? Is there any reason for that?


Richard Bedford Bennett: Perhaps the real reason lies in the difference between the government and the opposition.


Charles Gavan Power: The government, being itself on the verge of disillusionment, has great sympathy with dead men.


Richard Bedford Bennett: Oh, no.


James Lorimer Ilsley: The Prime Minister drew attention to the proposed section No. 94, and the right hon. leader of the opposition pointed out that the exporting industries of the country were to be prejudiced by the imposition of a one per cent special import tax. The Prime Minister's answer was that under the proposed section 94 a drawback of 99 per cent of that tax would be allowed. But section 94 is of no help whatever to those industries which export natural products.


Richard Bedford Bennett: Quite so.


James Lorimer Ilsley: I do not think it is.


Richard Bedford Bennett: No. There would be no importations in the instance referred to by my hon. friend.


James Lorimer Ilsley: Yes, there are importations.


Richard Bedford Bennett: The section reads:
.... paid in respect of materials used, wrought into or attached to articles exported, may be granted; provided that payment of a specific sums in lieu of such drawback may be authorized by the governor in council ....


James Lorimer Ilsley: In this connection I wish to mention an industry in the province of Nova Scotia which makes use of at least three classes of raw material or implements of production which have to be imported. First, fertilizers, which are brought in from Europe and the United States; second, spraying and dusting materials, a large proportion of which are brought in from abroad; third, spraying and dusting machines and apple grading machines, most of which are brought in from abroad. These machines are imported because

the imported products seem to be more suitable than the type produced in Canada. The proposal of the government is to place upon all these machines and the raw materials connected with the industry an additional import tax of one per cent. That industry cannot in any way be compensated by drawbacks. At least 80 per cent of the product of that industry is sold abroad upon the markets of Great Britain and Europe, and to say that a section is to be passed under which drawbacks can be granted is no answer. In so far as exporting industries are natural industries those drawbacks can be of no benefit.


Richard Bedford Bennett: If they are dutiable, of course section 94 has no reference to them. As to the excise tax of one per cent paid upon them, my hon. friend will observe it is proposed that in respect to this sum of one per cent paid in respect of materials used, wrought into or attached to articles exported, the drawback may be granted. I am not prepared to say how far that language would carry my hon. friends view, or how far it would fall short of carrying his view. I have not had previous occasion to consider the matter, but I shall do so at the first opportunity. I believe it has been held that the section is sufficiently comprehensive to warrant drawback being given with respect to natural products in which imported goods have been used, in connection with which drawbacks have been provided by the customs tariff. However I shall discuss the matter further.


Ambrose Upton Gledstanes Bury: Shall the
resolution carry?


John Livingstone Brown: I suggest that the same consideration should be given to binder twine.


Richard Bedford Bennett: It has been given.


John Livingstone Brown: Binder twine is an article which enters into the production of goods exported abroad. If my right hon. friend is willing to adopt the principle advocated by the hon. member for Hants-Kings, I suggest the same principle be applied to binder twine.


Richard Bedford Bennett: There is a provision that materials for binder twine are free from excise tax.


John Livingstone Brown: If my right hon. friend accepts the argument offered by the hon. member for Hants-Kings that materials used in the apple industry should receive the benefit of the clause, I contend the same consideration should be extended to binder twine and everything else used by the farmers in the production of wheat.

Supply-Royal Grain Commission


Thomas Merritt Cayley: I do not think I understood the explanation given by the Prime Minister as to why raw leaf tobacco was relieved from the one per cent tax.


Richard Bedford Bennett: When the hon. gentleman was not in the committee I explained that that consideration was given because there is already a heavy excise duty on that commodity. Two excise duties are undesirable.


[Stage Direction]
Resolution agreed to.
Ambrose Upton Gledstanes Bury: Shall I
report the resolution?


Richard Bedford Bennett: Have we all the resolutions?


William Lyon Mackenzie King: That covers the Special War Revenue Act.


Richard Bedford Bennett: It was intended to. I want to be sure I have them all.


Charles Gavan Power: I do not think it covers the resolution on the order paper.


Richard Bedford Bennett: I think so. I move:
That the committee do rise and report the resolution.


Charles Gavan Power: As amended; there was last night's amendment.


Thomas Merritt Cayley: I should like to put a question concerning mutual insurance.


Richard Bedford Bennett: I said to my hon. friend that I think that falls within the provision of the insurance bill.


Thomas Merritt Cayley: But it is part of this resolution.


Richard Bedford Bennett: No; that is another. If it falls within this resolution the hon. gentleman will have the fullest opportunity to discuss the matter when the bill is in committee. I assure him he, need have no apprehension on that point.
Resolution reported, read the second time and concurred in. Mr. Bennett thereupon moved for leave to introduce Bill No. 106 to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.



TRADE AND COMMERCE

[Stage Direction]
The house in committee of supply, Mr. Tummon in the chair.
The Canada Grain Act, including management, operation, maintenance and equipment of elevators, administration of, $2,681,000.
John Vallance: Mr. Chairman, the last time the committee sat the minister was asked
to have available for members certain information before this item was called again. Certain questions have also appeared on the order paper, but they have not yet been answered, and it is certainly impossible for us to further consider this item until we have had an opportunity to go through those returns.


Richard Bedford Bennett: I think Mr. Chairman, that the returns asked for have been brought down. I regret I was not present the other evening when this matter was under consideration. It is only fair to say that it originated in the Department of External Affairs and not in the Department of Trade and Commerce. I have already indicated to the house the circumstances under which Sir Josiah Stamp was asked to become chairman of the commission. The grain trade selected Mr. Sanford Evans as its representative on the commission, and the Hon. Chief Justice Brown became the representative of the agrarian interests. As is indicated by the return filed to-day, Mr. Pearson of the Department of External Affairs was selected to act as secretary.
When the commission had concluded its labours Mr. Pearson returned to Ottawa and Mr. Sanford Evans also came here. Each of the commissioners had a copy of the evidence. The report had been drafted only, and it had been agreed that as Sir Josiah Stamp could stay in this country only a limited number of days, the typewriting of portions of the report that he had indicated, apart from what he had written, should be completed, and the report would be set up in type and mailed to him on the Mauretania, sailing on the succeeding Tuesday, so he might be able to revise and return the report to Canada. Mr. Pearson undertook the overseeing of that work. At the time among the appendices was the number 12 which had been put in evidence by Mr. Pitblado practically at the conclusion of the hearing, under the circumstances mentioned by him in his telegram.
I said the other day, and I now repeat in passing, that the real objection to that appendix was the red ink statement which drew inferences from the chart itself. I knew nothing of this, neither did anyone in the department so far as that is concerned. The report came back from London, approved by Sir Josiah Stamp. There were one of two typographical errors that he had corrected. But recall this, if you please, there were no appendices sent to Sir Josiah Stamp with the report.
When the report was returned, Mr. Pearson -a competent young man who has long been in the department and enjoys the confidence

Supply-Royal Grain Commission
of his superiors-sent the draft to the printing office, had it printed, and included with the appendices the appendix in question. I am informed that this was done in the ordinary course, it being believed that this was one of the appendices that should be attached. I am informed by Mr. Pearson that some little conversation took place between him and Mr. Evans, Mr. Evans believing that the appendix should be included as part of the report, and Mr. Pearson, as secretary, concurring in the suggestion of the commissioner because the appendix had been put in evidence at the hearing It is an elementary rule that any document put in in evidence may be printed as part of the report and the proceedings. This appendix was so included.
I	tabled the report. I notice it is suggested that it was my duty to read the report. I think not. The report was made to me by the commission, and it was my duty to table the report as I received it, without making any comment on it in any way, shape or form; which I did. Some days later I was called up by telephone asking if I had observed that the appendix had been included in the report to which exception had been taken by certain of the grain interests. I said the matter was entirely new to me because as a matter of fact I had not read the appendix. I immediately got the report and looked at the appendix. Then I went down to the office and inquired into the circumstances under which the appendix had been included in the report, with the results that I have just given to the committee.
I believe that the appendix would not have been received by a judge in a court of law if attention had been directed to the inferences drawn from it and which are printed in red. So far as the appendix itself is concerned, we would say that it could be put in evidence just for what it is worth. The inferences to be drawn would be left entirely to the commission itself rather than to the person who prepared the return. I understand the return was prepared by the statistical agency in Winnipeg of which Mr. Evans is the head. I am only told that; it does not appear so from the report.
There is nothing further that I can add. The copy of the evidence and the other documents were lodged in the department by Mr. Pearson in his capacity as secretary of the commission; they were not so lodged as a part of the files of the department. The documents are still in the department. I do not think the correspondence which took place is any part of the departmental correspon-

dence, I not having written any communication then in respect to it. As I have said, the communications which took place between the chairman, the members of the commission and the unfortunate secretary are in no sense part of the records of the department over which I can in any sense have control, and I do not regard them as such. I regret more than I can say that these difficulties arose, but they would have arisen in spite of any supervision which might have been made, because Sir Josiah Stamp indicated when he came to Canada that it was absolutely necessary for him to leave on a certain date by a certain ship. The inclusion of the appendix as a part of the report is in no sense objectionable either as a matter of evidence or fair dealing or as a matter of good faith between the commission and the department from which the commission issued. But, as I stated when my attention was directed to it by the hon. member for Humboldt, in my opinion the red printing which drew inferences from the document should not have appeared.
I issued instructions that the appendix should foe removed from all copies of the report in the department, and Mr. Pearson saw that the appendix was in fact removed. Those which have been circulated since that time have not contained that appendix. A certain number of copies, as indicated by the return filed to-day, have been issued to public libraries and to individuals who have asked for them; the Winnipeg Grain Exchange printed a certain number of copies of the evidence and obtained a number of copies of the report as well. From those copies of the report the appendix in question has been removed.


William Lyon Mackenzie King: Mr. Chairman, I do not rise to question in the least the accuracy of any statement made by my right hon. friend, but I hope he will not judge me too severely if I am a little critical of one aspect of what he has just said. The Prime Minister said it was his duty to present the report to this house just as it was received, without reading the report in the first instance himself or having anyone read it on his behalf.


Richard Bedford Bennett: It was read in the department, of course.


William Lyon Mackenzie King: I do not agree with the Prime Minister in that statement; I think he is responsible for the report being presented at all. His responsibility goes the length of his being obliged either to table the report and allow matters to develop as they may as a result of his so doing, or to

Supply-Royal Grain Commission
withhold the report either temporarily or permanently and give to parliament his reason for so doing.
I just wish to illustrate where the failure of appreciating that circumstance has led my right hon. friend. He has brought into the discussion to-night the name of a member of the civil service who is not in a position to make any statement in his own behalf.


Richard Bedford Bennett: If the right hon. gentleman will pardon me, I did not bring his name into this matter until it had been brought in through the report filed, in which he desired his name should be put as secretary of the commission.


William Lyon Mackenzie King: That does not matter in the least; I wish to make a very clear statement about the position and rights of members of the civil service of this country. It is a rule of parliamentary practice and procedure that members of the civil service who are not in a position to answer for themselves or to make statements on their own behalf should be protected from having their names mentioned in discussion on the floor of parliament by any minister or any member of this house unless they are being criticized personally for some act for which they must take the full responsibility. My right hon. friend would have been perfectly within his rights had he said that all this was due to the fact that a member of his staff, or a member of the public service, had inserted this chart without his knowledge, that he regretted the circumstances though prepared to take responsibility for it. The responsibility would necessarily be his for not having observed that the chart which should not have been inserted had been placed there. He cannot escape that responsibility.


Richard Bedford Bennett: What nonsense.


William Lyon Mackenzie King: It is not nonsense; I take distinct issue with my right hon. friend, and I think we might as well have the difference understood at once.


Richard Bedford Bennett: Yes, let us talk it right
out.


William Lyon Mackenzie King: I think I
approached this matter in a courteous way; I hope to proceed in the same manner, and I ask the Prime Minister to extend a like courtesy to me during my statement. I say, on behalf of the civil service of Canada, that the Prime Minister of any country has no right to bring in, by way of excuse for any action of the government, the name of any member of the civil service. That is a fundamental rule of, parliamentary practice and
procedure, and if the Prime Minister has not known it up to the present he had better follow it hereafter. The public service is entitled to all the protection parliament can throw around its members; if individual members seek to do their duty faithfully and well they are entitled to the protection of every hon. member of this house, of the government, and most of all of the Prime Minister. I say it is an entire breach of what is right and proper that Mr. Pearson's name should have been mentioned at all by the Prime Minister. The Prime Minister should have taken full responsibility and should have said quite frankly, as he is quite capable of doing, that the fault was that of the department of which he is the head and for which he is responsible. He must take responsibility if an error is committed, and he has no right, by way of escape of censure, to bring the name of a public servant into the discussion at all.
May I say that I do not think this error of mentioning the name of a civil servant and holding him responsible would have been committed if my right hon. friend had taken the true view of his responsibility as a minister of the crown. He is responsible for every act of the department over which he presides, just as other ministers are responsible for the acts of their departments. A minister cannot escape responsibility, and it is not at all necessary for a minister to lay any document on the table of the house without so much as having read it or of having others read it in the first instance. The first duty of the government is to peruse every document coming before it and decide whether or not the document is to be made public. If there is an order of the house calling for the production of documents the ministry exercise the right, which in fact its members have been exercising all along this session, of saying documents are not in a form in which they cam be presented to parliament, and that they cannot be produced except on an order of the house. I do submit that my right hon. friend should be more careful about bringing in the names of members of the public service. I am not saying this in a critical way, but I do feel it my duty to the public service of Canada to assert the principle I have, so that an error of this kind may not be repeated.
Mr. B'ENNETT: Mr. Chairman, the name of Mr. Pearson was brought into this matter in consequence of a colleague of the right hon. gentleman, the ex-Minister of Agriculture, asking who was the secretary of the commission.

Supply-Royal Grain Commission
To that question an answer was given, and Mr. Pearson's name appears as the secretary of the commission. Further questions were asked by the hon. member for North Battle-ford and by the hon. member for Melville, the former Minister of Agriculture, to which replies have been made indicating the circumstances to which I have alluded.
The doctrine now propounded by the right hon. gentleman opposite is novel, and if I were not moderate in my language I might say worse. Only a few months ago in England, where they have due regard to the public service and not a spasmodic solicitude for the interests of its members, there was a case in the foreign office which most hon. members will recall. In that case it was at once realized that the person concerned should leave the service, and he resigned. The discussion was very considerable with respect to what had transpired in connection with certain matters which need not be referred to here. It would indeed be a strange doctrine, would it not, if a public servant who acts as secretary to a commission is to be precluded from having his minister state to the house the circumstances under which a document was included in the report of the commission of which he was secretary? What is meant by it? Is he to be dumb; is there to be no method by which he can make known the facts? Should not his minister take his word for it? Is he not to communicate to the House of Commons the circumstances of the case? That is all that has been done, and the department has not endeavoured to escape in any shape or form its responsibility with respect to it. I told the hon. member for Humboldt, when he asked me, some days before it was brought down, whether the report would be presented to parliament, that as soon as it was received it would be submitted. For I take the view that when a public commission is appointed, whether it finds adversely or favourably to the administration or to individuals, it is the duty of the government to which the report of that commission is directed, to table such report. Nor have I the right to question the contents of that document. I have no right to be concerned about the contents of the commission's report. It was directed to me as head of the department; and if I asked that any change be made in it, that the language be so amended as to alter its meaning, I should be recreant in my duty, because I should have altered the meaning which the commissioners intended to convey.


Mr. MACKENZIE (Vancouver):: They
did not-


Richard Bedford Bennett: I certainly did not.


Ian Alistair Mackenzie: No; I
say they did not make the report.


Richard Bedford Bennett: They did.


Ian Alistair Mackenzie: Not as
a commission.


Richard Bedford Bennett: The hon. member
apparently knows much more about it than anyone else. I have no reason to believe that the secretary's report tabled in this house is not an accurate statement of the proceedings, and the report has been tabled in response to a question-


Ian Alistair Mackenzie: May I ask the right hon. gentleman whether the return asked for by the hon. member for South Battleford (Mr. Vallance) has been tabled.


Richard Bedford Bennett: Which report-the cor-respodence?


Ian Alistair Mackenzie: Yes.


Richard Bedford Bennett: I have stated that it will not be brought down, and I have indicated why. It is correspondence over which the ministry has no control-correspondence between the secretary and members of the commission, which is a matter of commission return. I do not know about it; I am not concerned about it. But my duty was to table that report. It has been suggested that I should ascertain what the contents of the report were, and that if I did not like them I should not bring them in.


William Lyon Mackenzie King: Not at all.


Richard Bedford Bennett: What does it mean? Either one of two things: if I did not like it I should be warranted in not bringing it in; or if I did like it I should bring it in.


Ian Alistair Mackenzie: Has my right hon. friend received any protests from one of the members of the commission, Chief Justice Brown, against the insertion of appendix 12?


Richard Bedford Bennett: No. Chief Justice Brown sent a telegram in which he said that it was not brought to the attention of the commission except that it was put in evidence, and he became a party to leaving the final preparation of the report to Mr. Commissioner Evans and the secretary.


Ian Alistair Mackenzie: If there was a protest from one of the members of the commission, paid or otherwise, under the control of parliament, is not parliament entitled to see such a telegram?

Supply-Royal Grain Commission


Richard Bedford Bennett: Yes, certainly.


Ian Alistair Mackenzie: Why
should we not get it?


Richard Bedford Bennett: But that is not the question raised. It is a question of correspondence between members of the commission and the secretary.


Ian Alistair Mackenzie: No. If the right hon. gentleman will read the motion for the return asked for by the hon. member for South Battleford he will see that it is a request for a return of all correspondence either prior to, during, or subsequent to the appointment of the commission, between any member of the commission and any minister of the crown.


Richard Bedford Bennett: So far as I am concerned, I have had no communication except one telegram-the telegram which Mr. Evans sent in the same sense to myself as to others and which was published in the press. There was, as I recall, a telegram from Chief Justice Brown after this difficulty had been raised, and not until then. And it is 'n evidence that he left the matter to Mr. Commissioner Evans and the secretary to complete. There is no doubt and there never has been any doubt raised by anyone that this appendix was put in evidence by counsel for the grain interests, Mr. Pitblado. And what is more, at the conclusion of Mr. Cairns's evidence, just as the commission was leaving, this evidence was put in by Mr. Pitblado as indicated by the telegram read. It therefore became part of the record.


Charles-Philippe Beaubien: Was it accepted by the commission?


Richard Bedford Bennett: Certainly.


Charles-Philippe Beaubien: The chart was accepted?


Richard Bedford Bennett: Yes; they could not help themselves.


Ian Alistair Mackenzie: I think
the right hon. gentleman is correct, that this was filed with the evidence. Was the exhibit, filed by Mr. Pitblado as part of the record of evidence taken by the commission, exactly the same as appendix 12 which we have in the report?


Richard Bedford Bennett: Absolutely; and it was
initialled by the chairman, or a number was put upon it-I forget which. He either put a number on it or initialled it.


Ian Alistair Mackenzie: Did the
commission as such decide specifically upon the inclusion of appendices 1 to 12 as part of the report?


Richard Bedford Bennett: In answer to that question I can only say this: I was not present. The information in the return filed to-day is that the commission instructed the secretary and Mr. Commissioner Evans to complete the report, and it is included as a part of the report by the secretary at the instance of Mr. Commissioner Evans, to whom it was left.


Ian Alistair Mackenzie: Has the
Prime Minister any information to the effect that this appendix was inserted in the report over the protest of the secretary of the commission?


Richard Bedford Bennett: Well, his report is filed
here.


Ian Alistair Mackenzie: I have
not seen it.


Richard Bedford Bennett: It is among the papers
brought down.


Ian Alistair Mackenzie: Is the
right hon. gentleman able to answer my question?


Richard Bedford Bennett: I cannot, because I have not discussed the matter with the secretary of the commission, except that when I found what the difficulties were I asked him to take the necessary steps to clear them up. That is all. I deny the right of any minister to be held responsible for other than the acts of the officials of his department within the scope of their activities as such. In this instance the secretary was a permanent official and when he acted as secretary and was released for that purpose his obligations were not to the department but to the commission which he was released to serve. I am not responsible, nor can I be held responsible for what transpired on the part of a commission appointed in due form, with a secretary named in due form, who was released by the department for the purpose. And that is why I have the utmost right to discuss this language that has been used with respect to a civil servant not being in a position to defend himself. He has placed on record his position in answer to inquiries made by the former Minister of Agriculture. And so far as I am concerned, the gentleman is regarded, when I am discussing the matter, not as an employee of the department but as secretary of the * commission which he was released to serve.
Surely it would be a monstrous doctrine that the head of a department is not permitted to discuss or to refer to the actions of a member of the civil service who is released by the minister for the purpose of serving as secretary of a commission. If I may say

Supply-Royal Grain Commission
so, I think there has been a great deal more importance attached to this matter than can possibly be warranted by the facts. That the document was properly placed in evidence no one denies.


Ian Alistair Mackenzie: We are
not talking about evidence.


Richard Bedford Bennett: It was part of the record. My hon. friend from Vancouver Centre is a lawyer by profession, and he knows as well as any living man does that an exhibit is part of the testimony of a case-*


Ian Alistair Mackenzie: Quite
right.


Richard Bedford Bennett: -and when this exhibit was put in evidence the chairman marked it. The marking of an exhibit may be done in many ways; it may be by initials or by numbers. I am informed that a number was placed upon the exhibit, and when the chief commissioner left he handed over that document to the secretary of the commission. That document, with that mark upon it, is still in the custody of the secretary. Chief Justice Brown then left to Mr. Commissioner Evans the settlement of the draft of the report, and the report was drafted with the exhibits and sent to the chairman. And amendments were made, not of import, but as regards the way in which some of the sentences were framed. That was sent back and then when the secretary printed it at the instance o'f Commissioner Evans he printed that exhibit as part of it.


Mr. GRAY:: The right hon. gentleman
stated that he has withdrawn that graph.


Richard Bedford Bennett: I said that I have instructed that the graph should be withdrawn from the remainder of the reports in the possession of the government.


Ross Wilfred Gray: If the right hon. gentleman is correct in what he said previously, what right has he to interfere in any shape or form with the report?


Richard Bedford Bennett: When he submitted it, he had none, 'but he had some right when complaints were made as to what was contained in the report. That right was given by what was said by the commissioner. The government has another responsibility in connection with the king's printer. When the complaint was made that that document should not have been printed, I said, "I trust you will remove that from the rest of the documents."


Ross Wilfred Gray: By what right?


Richard Bedford Bennett: The right which any government has when complaint is made with

respect to the publication of a report. To have done it before would have been a dishonourable act; I could not take anything away from that document which was handed to me.
Mr. BEAUBIEiN: A reflection is being cast upon Sir Josiah Stamp.


Richard Bedford Bennett: Not at all; he said he was perfectly satisfied that that document should be removed.


Ian Alistair Mackenzie: Has the right hon. gentleman any correspondence with any members of the commission?


Richard Bedford Bennett: I have not; nor have I carried on any.


Ian Alistair Mackenzie: The
right hon. gentleman just thinks that the chairman of the commission would be satisfied with the exclusion of this paper?


Richard Bedford Bennett: I said I was informed, and I repeat that statement.


Ian Alistair Mackenzie: How does the committee know that?


Richard Bedford Bennett: A return was tabled in reply to a question asked by the hon. member for Melville (Mr. Motherwell), and I believe another hon. member asked a similar question.


Ian Alistair Mackenzie: Has
the right hon. gentleman any correspondence from the chairman of the commission?


Richard Bedford Bennett: None whatever.


William Lyon Mackenzie King: Mr. Chairman, may I say a further word in connection with the subject of ministerial responsibility to which my right hon. friend has referred? In this connection may I point out that in the latter part of his remark my right hon. friend adopted a course very different from that which he asserted at the outset.


Richard Bedford Bennett: Not the least.


William Lyon Mackenzie King: I will show my right hon. friend that he is pretty good at side-stepping, at manoeuvring from one position to another.


Richard Bedford Bennett: That does not help any.


William Lyon Mackenzie King: May I draw
the attention of my right hon. friend to the case he cited to this committee? He spoke of a civil servant in the foreign office in Great Britain whose name had been brought into a discussion. This man had been dismissed from the service and considerable discussion took place in the House of Commons.

Supply-Royal Grain Commission
In the course of my remarks, I said that if a civil servant were guilty of a misdemeanour or if his work were of a character which demanded his dismissal, certainly his name might be brought into public discussion and nothing could prevent this being done. In such a case the minister would foe obliged to make some public explanation as to why the officer was no longer retained. However, so long as a civil servant is performing his duties in a department and the minister did not find it necessary to dismiss or suspend him, the minister must take full responsibility for the actions of his officers. In the latter part of his remarks my right hon. friend admitted that. He did so when he said that a minister was responsible for his staff and for what they did, but then he veered away from the stand he had previously taken and said: This officer had ceased to be one of my officers; he was made the secretary of the commission and it was as secretary of the commission and not as an officer of the department that he is responsible. Let my right hon. friend read his own opening remarks and he will see that he began by admitting quite frankly that the error was one which had occurred in his own department At that time he was seeking to protect or excuse the Minister of Trade and Commerce and he stated that as Minister of External Affairs he must take the responsibility for the mistake which had occurred. I think it would have been better for him had he held to that ground.
May I go a step further. I do not agree with my right hon. friend in what he says about his obligation to lay a document on the table of the house without first perusing it. He is responsible for everything he does. My right hon. friend was responsible-this is the crux of the whole situation-for the appointment of the commission itself and as a consequence of his having appointed the commission he becomes responsible to parliament for any of its errors.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: Hon. members laugh, but I wyuld like to know if this is not true where ministerial responsibility begins and where it ends. If a government appoints a commission which proves unworthy of the confidence of the government, or of parliament, the government must take the responsibility for its own act. That is one of the responsibilities of a ministry which appoints a commission. When hon. members laugh they simply disclose the fact that they do not appreciate the elementary principles of ministerial responsibility. The government cannot get away from full responsibility for any executive act. The appointment of a royal commission is an executive act and the ministry must take responsibility for every act of the commission. The government may not be satisfied with the actions of a commission, they may if they so desire dismiss it, but in that event they must come to parliament and take the responsibility for the dismissal. If a secretary or any other officer of a commission makes a mistake, the ministry cannot escape full responsibility for the consequences of the mistake. That is why I say it is the duty of the ministry, before presenting a report to parliament, to make sure of what appears in the document. If the ministry are not to be responsible for what is contained in reports, it would be open to any member of the public service if he so desired to libel any citizen in the report he might make. A report when laid before parliament thereby receives publicity which it would not otherwise receive. One of the many obligations resting upon a ministry is to make sure of everything which in connection with the administration of public affairs is made public. They are at the same time obliged to give to the country all documents requested by members of parliament, unless there is some good and sufficient reason for not doing so in which event they must take full responsibility for their refusal. I submit that if a commission makes a report in connection with which there is a slip on the part of some officer, that slip should be detected or the ministery that has appointed the commission becomes responsible for the consequences of publicity. The ministry would be justified in case of a slip, and it is the one thing which they cannot be justified in not doing, in withholding a report until the slip is rectified, and the document put in such shape that its accuracy would be beyond question when presented to the public through parliament. I do not say that the ministry must necessarily agree with the particular views expressed by a commission or anything of that kind; they may repudiate the views, but they cannot repudiate full responsibility for the appointment of the commission which was expressed therein and all acts in connection therewith. They have no right to shield themselves from the results of errors by bringing into public discussion on the floor of parliament the names of members of the public service who are not here to speak for themselves.

Questions


Henry Herbert Stevens: I move that the committee rise, report progress and ask leave to sit again.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Thursday, July 2, 1931.