1932-11-07

[Stage Direction]
Hon. H. H. STEVENS (Minister of Trade and Commerce) moved for leave to introduce Bill No. 9, to amend the Canada Grain Act.
Mr. MACKENZIE KING:: Explain, please.


Mr. STEVENS:: Mr. Speaker, a condition prevails in the country well known to all hon. members. Commodity prices have fallen but the charges incident to such commodities have not in all cases fallen to a corresponding degree. The government has been studying
Questions

this situation with a view to lessening the burden placed upon the farmer by the movement of grain, and it has been found necessary to secure an amendment to the act in order to achieve this purpose. This bill is to amend section 134 of the act by adding the words "except by order or regulation of the board."
A full description or analysis of the situation can be given at a later stage of the bill.


An hon. MEMBER:: What will be the effect?


Henry Herbert Stevens: The effect will be to empower the Board of Grain Commissioners to lower charges in connection with elevation, storage and so on.


Mr. MALCOLM:: Handling charges.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. RINFRET:: 1.	How many permanent employees are there on the staff of the Montreal harbour commission?
2.	How many were there last year (1931) at this date?
3.	How many labourers employed during the season of navigation worked at the harbour of Montreal since the opening of navigation?
4.	Of the latter: (a) how many were residents of Montreal at the time of their employment; (b) how many resided at outside points?


Mr. DUPRE:: The following information has been furnished by the harbour commissioners of Montreal :
1.	Number of employees on staff payroll as at 31st October, 1932-176.
2.	Number of employees on staff payroll as at 31st October, 1931-172.
3.	192.
4.	(a) 188; (,b) 4.


JORDAN PALLS, N.S.-FISH WARDEN
Mr. RALSTON:: 1.	What persons have been holding the position of fish warden at Jordan Falls or vicinity, Shelburne county, Nova Scotia, since January 1, 1929?
2.	For what periods have they been respectively acting?
3.	At what rate or rates of pay?
4.	Has there been any difference in the extent * of the duties to be performed by the respective fish wardens during the period above named? If so, what?


Maurice Dupré: 1,	2 and 3. 1929-30 season-John McKay, from May 1 to July 31 by the day as required for 79 days at $3 a day; 1930-31 season -John McKay, from May 1 to July 31 by the day as required for 74 days at $3 a day; 1931-32 season-Howard Smith, from May 4 to June 30, by the day as required for 57 days at $3 a day; Isaac Harrison, from May 4 to 23 and July 1 to 31, by the day as required for 45 days at S3 a day; 1932-33 season -Howard Smith, from May 3 to July 16, by the day as required for 70 days at $2.50 a day; Isaac Harrison, from May 3 to July 26, by the day as required for 80 days at $2.50 a day.
4.	Yes. In 1931 the dams in the river were [DOT] made passable for fish, necessitating protection further up the river.


QUESTION PASSED AS ORDER FOR RETURN
Mr. GIROUARD:: 1.	Has the governor in council, under The Relief Act, 1932, loaned or advanced money to, or guaranteed the payment of money by any public body, corporation or undertaking?
2.	If so, on what date?
3.	What are the names of the public bodies, corporations or undertakings to whom money has been so loaned or advanced or to whom such guarantee has been given?
4.	What amount was so loaned or advanced or guaranteed to each public body, corporation or undertaking?


Mr. RHODES:: This order for return is
now tabled.


MOTION FOR PAPERS
Mr. RALSTON:: For a copy of all correspondence, letters, telegrams and other documents respecting the repairs, during the years 1931-32, on the breakwater at Comeau's Hill, Yarmouth county, Nova Scotia, showing the name or names of all the foremen, the nature of the work done, the bills for materials and supplies, time sheets, vouchers and other papers.


ST. VINCENT DE PAUL PENITENTIARY
[Stage Direction]
On the orders of the day:
Mr. J. A. MERCIER (Laurier-Outremont):: Mr. Speaker, I should like to inquire of the Minister of Justice (Mr. Guthrie) if there is any truth in the rumour that a fire has occurred at the St. Vincent de Paul penitentiary at Montreal?

Sun Life Company


Hod. HUGH GUTHRIE (Minister of Justice) :: Mr. Speaker, it is true that a disturbance took place in one of the branches of the St. Vincent de Paul penitentiary at about eleven o'clock this morning. Fifteen inmates were at work in the tailor shop and three guards were in attendance when the trouble started. The ringleader of the prisoners is said to be a man named Crossley. The building was set on fire by the prisoners and when the guards attempted to turn on the hose to extinguish the fire, the hose was cut by the prisoners. The doors of the shop were shut by the prisoners and immediately a serious condition arose. The last report I have had upon the matter came in at about one or two o'clock. The warden states that all prisoners are now under control and locked in their cells. No fatalities have occurred. Three guards have been injured, one by assault made by Crossley, another named Jacques is rather seriously burned, and another named Forger has also been injured. The warden states that prisoner Crossley has been removed from the burning building, that all prison officials behaved in a most exemplary manner, that the prisoners are now all in their cells and that the injured guards' have been taken to the Montreal hospital for treatment.


SUN LIFE ASSURANCE COMPANY
[Stage Direction]
On the orders of the day:
Mr. M. F. HEPBURN (West Elgin):: Mr. Speaker, I rise to a question of privilege. A few days ago I visited your office along with the hon. member for Bow River (Mr. Garland) and showed you a document on the strength of which I proposed to move the adjournment of this house in order to debate a question of urgent public importance. This matter concerned the financial position of the Sun Life Assurance Company and the conduct of a senior official. Your Honour told me that I would have your permission to make use of the document in full, and when I again visited your office accompanied by the hon. member for Battle River (Mr. Spencer), Your Honour repeated that I would have permission to make a statement on the floor of the house but that you would then rule against my proceeding with the motion as the matter was not one of recent occurrence. I then asked if I could have permission to treat it as a notice of motion, and you told me there was nothing in the rules to prevent that, I could put the entire
document on the order paper by way of a notice of motion. After the vote in this house on your ruling I sent the document to the clerk of the house by way of notice of motion. I was asked to modify it slightly, which I did, and I was then informed that the matter would appear in votes and proceedings of Thursday. When I received my copy of votes and proceedings on Thursday I found that it did not contain my notice of motion. Upon getting in touch with the clerk's office I was informed that through some mistake this notice had not been put in, but that it would be in today's votes and proceedings. Upon receiving my copy today I find that my notice is not included. Is some official of this house exceeding his authority or is there some powerful influence at work to conceal from the people of Canada the true situation in connection with the Sun Life? I make that statement because on Wednesday Your Honour stated that the rules of the house provided other opportunities for discussing this matter but my endeavours to avail myself of those opportunities have not been successful. I have been denied that privilege and I ask for some explanation.


Right Hon. R. B. BENNETT (Prime Minister):: Mr. Speaker, before an explanation is made I should like to point out that the hon. gentleman is perfectly right in making this a matter of privilege. This is a matter of parliamentary privilege in the largest _ sense-is - parliament to be used as a medium to make public a document with respect to which an injunction is now pending and in force in the superior courts of a province? Let us analyze the facts. A charge was laid against one Harpell for criminal libel. He was brought before the courts as provided by the code and was asked if he had a statement to make. He then began to read a statement which it is now sought to place upon the records of this parliament.


Mitchell Frederick Hepburn: That is not correct,


Richard Bedford Bennett: In part.


Mitchell Frederick Hepburn: I am not getting my
information from that source at all.


Richard Bedford Bennett: The judge having ruled
against Harpell, that that was not proper- every hon. member who is a lawyer knows that that ruling was correct-he was then asked to make any statement he might desire to make in answer to the charge against him prov'ided such statement was in accordance with the provisions of the code. Having
Sun Life Company

failed in his efforts he then proceeded to his presses at Gardenvale and set this statement up in type. It was his intention to publish it and send it broadcast throughout this country and the world, and in addition much of it was to be published in the current issue of the Journal of Commerce. The Sun Life is an institution doing business in practically every part of the world; it has thousands of policyholders in every province of this dominion with the possible exception of one. The company then proceeded to obtain an injunction in the civil courts of Quebec. An injunction prohibiting the publication of the document and that particular issue of the Journal of Commerce was granted. Harpell then removed himself to Ottawa and endeavours now to use the votes and proceedings and Hansard of this parliament as a medium to make public that which the courts of the province have prohibited being made public. This is a question affecting the highest privilege of this parliament. This matter is sub judice, it is now before the courts. I assume it is the duty of this parliament to refrain from prejudicing the cause of either litigant or party in any manner, shape or form, directly or indirectly, while the matter stands for consideration by the courts of the country. I submit that the privileges of this parliament should not be abused by permitting the placing upon the order paper of resolutions, recitals, short or long statements with respect to the conduct of this company when the moving force behind such action is the defendant in criminal proceedings now pending in Montreal, against which defendant an injunction has been issued by the supreme court of that province.


Mr. SPEAKER:: The hon. member has asked for an explanation of my statement, and I am prepared to give it. Since the conversation I had with him in the Speaker's office, at which conversation I told the hon. member that this matter might appear on the votes and proceedings by way of a notice of motion, it has come to my notice that the charges contained in the preamble to the resolution or motion as presented, are now in Canadian courts the subject of litigation on which a judicial proceeding is pending, and as the publication of the material therein contained has been forbidden and restrained by injunction order made by the Superior Court of the province of Quebec, it therefore must not be brought forward in debate. I would cite as authority, May, thirteenth edition at page 323. The material not being in order, will not be accepted for the votes

and proceedings. It was not published in the votes and proceedings or other official journals of the house pursuant to an order by the Speaker.


Mr. H. E. SPENCER (Battle River):: On a point of order, may I say I happened to be one of the members who accompanied the hon. member for West Elgin (Mr. Hepburn) at about two-thirty in the afternoon of the second of this month to Your Honour's room. I then heard you inform the hon. member that he would have the opportunity of reading his full statement as he showed it to Your Honour. I was more than surprised a short time afterwards, in coming to the house, to find that you took an exactly opposite stand. I for one am exceedingly surprised, more so than I have been as regards anything that has happened in the house before, at the action you took at that time. If I may, I would like to say that the matter that is now being referred to has not, so far as I know, been engineered by this man Harpell.


Some hon. MEMBERS:: Oh, oh.


Henry Elvins Spencer: I want to say that the imatter was taken up by us in 1927, 1928, 1929-


Pierre Édouard Blondin: On what subject is the hon. member speaking to the house? Is it on a question of privilege or on a point of order? That he may have been surprised at the Speaker's ruling is to be regretted, but it is not a matter for discussion by him or by the house.


Mr. IRVINE:: I just want to make a remark.


Henry Herbert Stevens: The other day the hon. member for Winnipeg North Centre-


Mitchell Frederick Hepburn: I am not through with my comments on this matter.


Pierre Édouard Blondin: I understood the hon.
member for Wetaskiwin (Mr. Irvine) was rising to speak.


William Irvine: I want to make a remark on this question of the privilege of the house before we leave it. No doubt the Prime Minister is quite right in seeing to it that parliament does not discuss any matter that might be in the courts, to the prejudice of one or other of the parties. I think we all agree with that, but the point of privilege as I see it is this: Who is to be the judge of that? It appears to me that if the Speaker decides quietly by himself that such and such a matter is before the courts, before it appears on the order paper.

Sun Life Company
84.
such action may involve the Speaker in many difficulties. My understanding of the rule- it may be wrong-is that we have the right to put on the order paper any subject we desire and then, if and when it comes before the house, it is regarded as being out of order, it will be so ruled. If I am wrong in that, of course my protest falls flat, but I understood that was the usual practice in the house, and if it is, I submit we are departing from that rule by permitting the Speaker to rule something out of order before the house knows what it is.


Pierre Édouard Blondin: The hon. member, if I
may say so, is in error. The material to be placed on the votes and proceedings or on the order paper is subject to scrutiny by the clerk of the house and supervision by the Speaker. If the Speaker's decision is not agreed to by the house, it may be overruled.


Mr. E. J. GARLAND (Bow River):: I
understood the Prime Minister a moment ago to suggest that since this matter was sub judice, it could not be discussed or considered in this chamber. I also understood him to say that the document which he supposes is the same one as that which the hon. member for West Elgin proposes to discuss, was not permitted to be read in the courts and is not the subject matter of litigation. I, for the life of me, cannot understand how, because the courts of Quebec serve an injunction to prohibit the publication of a document-and I do not know whether it is the same document or not-that injunction on their part shall be taken to prohibit discussion in this house of a subject which, as I understand the matter, is not under litigation in the courts of Quebec. The litigation there is a personal matter as between the President of the Sun Life Assurance Company, Mr. Macaulay, and Mr. Har-pell, on a charge of libel. I understand and have read in the newspapers that Mr. Harpell attempted to read some document into the records of the court. He was prohibited from so doing. That document, therefore, is not and will not become a subject of those litigation proceedings. That, I understand, is the matter in which the hon. member for West Elgin has an interest. Of course I am not a lawyer; the right hon. gentleman is in a better position in that regard than I am, but as a layman I find myself in considerable confusion over his suggestion in the matter.


Mr. MICHAEL LUCHKOVICH (Vegre-ville):: There is just one matter with which
I wish to deal. The other day the hon. member for West Elgin (Mr. Hepburn), was ruled out of order because the matter he wanted to
bring to the notice of the house was not of recent origin. Unless we know what the subject matter is in the paper which he wanted to read, we do not know whether it is of recent origin or not. Now I understand he is not allowed to put the matter on the order paper as a resolution.


Edgar Nelson Rhodes: Mr. Speaker, as I understand the matter, you have given a ruling. That being so, I do not apprehend that the discussion can proceed any further unless your honour should desire to withdraw your decision and allow the matter to be the subject of debate. If that were the case, I would be very happy to discuss it. Of course, if your honour insists, as I think you have every right to do, in maintaining your ruling, there is only one course open to the house-that is, to have an appeal; otherwise there can be no discussion.


Mitchell Frederick Hepburn: On the point of order,
the document which I was refused permission to read contained information obtained from the report of the Superintendent of Insurance of the recent development in the Chicago courts in respect to the Insull investigation and as to the connection of the Insulls with the Sun Life Assurance Company. The matter in the Quebec courts is one between two individuals. It is a libel case that arose out of a statement to the effect that Mr. Macaulay, in the opinion of Mr. Harpell, was a crook. It has no relation to this matter at all. This is a reference to the Chicago courts and the report of the Department of Insurance a copy of which was laid on the table by the Minister of Finance only a few moments ago.


Pierre Édouard Blondin: The hon. member for West Elgin well knows that the material he seeks to put on the votes and proceedings is by no means confined to the insurance report. That is incidental to it, and in my opinion the material is included in that matter which is prohibited by the injunction order. That is my ruling. If the hon. member wishes to appeal from it, it is open for him to do so.


Mitchell Frederick Hepburn: Am I permitted to appeal? I deprecate this attempt to conceal the truth from the people of Canada. If I am permitted to appeal from your ruling, I should like to appeal from it because I want to find ways and means of placing this before parliament and I have your word that I shall have means of doing so. What means shall I have? I have been ruled out of order on two occasions.


Pierre Édouard Blondin: It is not the prerogative
of the Speaker to conduct a school in parlia-
Trade Agreement

mentary procedure. I understand the rule and I hope the hon. member understands it as well as does any other hon. member.


TRADE AGREEMENT
[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING Leader of the Opposition): I wish to ask the Prime Minister a question arising out of a report which appears in today's papers of proceedings in the British House of Commons yesterday. It would seem in part to be in conflict with the statement made by the Prime Minister in this house yesterday, and I want to be quite sure as to the exact facts. The Canadian Press cable dispatch, referring to the remarks made by Sir Herbert Samuel, leader of the Liberal opposition in the British house, is as follows:	[DOT]
It had been made dear during the course of debate, he continued, that the agreements which purported to be for five years could be altered at any time by parliament whenever it chose.
I gather that the Prime Minister in his statement yesterday to this house agreed with that, at all events in so far as the powers of the British parliament are concerned, the constitutional power and the legal power.
* Reference is also made in the report to a statement by the Chancellor of the Exchequer, as follows:
Mr. Chamberlain replied for the government that new Canadian duties, substituted by the Anglo-Canadian pact for existing duties, could not be altered within the next five years except to a limited degree specified in the agreement.
That statement clearly would indicate that so far as this parliament is concerned we are not free to change the duties, though it is admitted that so far as the British parliament is concerned it is free to change the duties that are set forth in the agreement. I would like to ask my right hon. friend if he agrees with this statement of the Chancellor of the Exchequer, assuming of course that it is a correct report of what the chancellor may have said.
Richard Bedford Bennett: I am not prepared to make any such assumption, and the question can stand as a notice. I shall deal with it at the next sitting as I have to leave in a moment to catch a train.


UNEMPLOYMENT STATISTICS
[Stage Direction]
On the orders of the day:
Hon. II. H. STEVENS (Minister of Trade and Commerce): The other day the hon. mem-

ber for Winnipeg North Centre (Mr. Woods-worth) asked me when we might expect census figures relative to unemployment to be released. I replied that I understood a considerable portion of those figures had already been released and that I would advise him as soon as possible of the progress being made.
A bulletin showing the number of unemployed, male and female, as of date June 1, 1931, in cities and towns of 5,000 and over, was issued last April. In addition this was published in full in the Labour Gazette, the official journal of the Labour department. There is now being issued this month a further bulletin extending the figures to places of 1,000 and over, and giving the totals for the whole of Canada by provinces, differentiating by sex, and showing the causes of unemployment. This statement will be available about the middle of next week. These figures were ready some weeks ago but some last minute checking is found advisable to see that they are as accurate as possible.
In addition to the general summary above mentioned we have ready for the printer a series of about twenty bulletins on individual cities of 30,000 and over which will review the situation in full detail. I might add that the study of this subject will comprise some six or eight volumes, quite a number at all events, exhaustively analyzing the figures and the facts in connection with the situation. The preparation of this final summary is now well advanced, but it will be some little time yet before it will be issued. But the bulletin issued in April last is a fairly complete bulletin dealing with towns of 5,000 and over, which really comprise the major portion of the figures desired.
I should like to indicate to the house that the compilation of this data naturally takes some time, and I do not think there is the slightest reason to complain of the work done by the bureau in this regard. I am convinced, as far as I can judge from very close contact with the facts, that their work in this respect has been very commendable. I should not like the impression to be left that there was the slightest degree of neglect by the bureau in the production of these figures.
Mr. A. A. HEAPS (North Winnipeg):: Has the minister any figures in reference to the amount of unemployment in towns of over 1,000?


Henry Herbert Stevens: I have the figures for
towns of 5,000.


Abraham Albert Heaps: I understood the minister to say that the figures were being compiled for towns of over 1,000.

The Address-Mr. Garland (Bow River)


Henry Herbert Stevens: For the benefit of my
hon. friend I repeat that there is being prepared a further bulletin extending the figures down to places of 1,000 and over, and giving the totals for the whole of Canada by provinces, differentiating by sex, and showing the causes. This will be available about the middle of next week.


James Malcolm: I would like to submit to my hon. friend the Minister of Trade and Commerce that I doubt very much if he will get an accurate figure of the unemployment in this dominion by limiting the scope of the calculations to towns of 1,000. Canada, as my hon. friend knows, has never in the past had any machinery for computing unemployment figures, and we have always based our calculations on the number of men gainfully employed; comparing that index figure with the index figure of a previous day we can make a rough calculation of the number of unemployed by ascertaining how many fewer men are gainfully employed today. The greatest problem in unemployment, of course, always arises where men are gathered in the large centres of population, and where as a mass they are more difficult to take care of and' find employment for than in the smaller communities. But the fact is true that a great many of those who are unemployed in the Dominion of Canada have returned to the rural parts of the country and are now living back in the small villages and on the farms whence they came. In my opinion they are doing the wisest thing possible to relieve the unemployment situation by trying to act as good citizens in their own towns or on the farms, thereby not aggravating the unemployment situation in the large centres. I am of the opinion that a census of the rural parts of the province of Ontario, including the smaller villages, would reveal that there is very substantial unemployment represented by this class of citizen, who is causing no very great problem, but is nevertheless out of work. If our figures of unemployment are to be accurate to allow us to gauge the necessities of the situation, I submit to the minister that it would be wise to have a calculation of the number so unemployed.


Henry Herbert Stevens: I regret that I did not
make myself clear. I have been trying to emphasize to the house that there were virtually three stages: first, towns of 5,000 and over, which information was got out last April in order to give to the house and the country the information; secondly, towns of 1,000 and
over; and I added that the full study covering the Dominion by provinces, differentiating by sex, showing the causes, and giving the totals for the whole dominion, was in course of preparation and that the work was well advanced.


GOVERNOR GENERAL'S SPEECH
[Stage Direction]
The house resumed from Friday, October 14, consideration of the motion of Mr. P. G. Davies for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the proposed amendment thereto of Mr. Mackenzie King and the amendment to the amendment of Mr. Coote.
Edward Joseph Garland: Mr. Speaker, before the adjournment of this debate some weeks ago the group in this comer of the house found it necessary to move a subamendment. The reason for that subamendment was that the speech from the throne itself was completely-what shall I call it?

vague, indefinite, lacking in decisive plan for the reconstruction of conditions in this country, particularly with respect to business conditions, unemployment and agricultural affairs. We found it necessary because the purchasing power of the Canadian people has been depleted to a point which endangers the whole solvency of Canada, and further because of the fact that the group to your left, sir, the official opposition, had moved an amendment which, being purely negative in character could not be taken as reflecting the viewpoint of hon. members in this comer. May I remind hon. members of the house that our amendment urged:
That the dominion control of currency and credit should be so exercised as to provide and maintain sufficient purchasing power to;
(a)	Raise the price of agricultural products and other primary commodities to an equitable level in relation to the cost of production and the settlement of outstanding liabilities, public and private;
(b)	Increase consumption, thereby stimulating industry and providing employment for our people;
And that the issue of this currency and credit should be based upon the natural wealth and productive capacity of this country, not, as at the present time, upon one single commodity, gold, and that its volume should be determined by the goods and services to be dealt with, and the legitimate requirements of the people;
This house is further of opinion, that this step should be taken in the immediate future, pending other fundamental changes, and as an integral part of a system of planned economy,



The Address-Mr. Garland (Bow River)
which is becoming generally recognized as essential, in order that the natural wealth and productive energy of this country may be utilized to provide a satisfactory standard of living for all our people.
Mr. Speaker, the necessity for a motion of that kind must ibe apparent to hon. members who will examine the actual internal conditions of the country. If they will study the effects of unemployment and declining price levels they will be able to make a fairly accurate estimate of the decline in income brought about by unemployment and underemployment in industry. Taking the average wage in the dominion as around SI,000, and estimating the total on the basis of the number of unemployed we find that the loss of income in the term of three years is about
SI,320,000,000. There is that much money less with which to purchase goods produced or possible of production by Canadian industry.
Concerning agriculture even more accurate estimates are available. The gross agricultural revenue for the year 1929 was $1,631,081,000; by 1930 it had fallen to $1,262,047,000; by 1931 it had fallen to 8880,240,000. It is still falling rapidly. From figures available in the Bureau of Statistics we now find that there is a difference in the purchasing power of the farmer in 1930 over 1929 of $369,000,000, in 1931 over 1929 of $880,000,000 and in 1932 over 1931 of $800,000,000, or a total of over $2,000,000,000. In order to avoid any error in calculation and to make sure that overlapping is avoided, for the sake of being conservative in my figures I am willing to cut that figure in two, and to assume that the farmers have suffered a loss in income of only $1,000,000,000.
Now let us consider the condition of the earning classes, the salaried and professional people in the community. In connection with these people also we have means whereby we may make a fairly accurate estimate. The income tax returns supply us with that information. I do not think any hon. member will deny that in 1930 and 1931 the incomes of salaried and professional classes declined at least 20 per cent, and in the following year by 30 per cent. During the past two and three-quarter years it is fair to conclude that the incomes of individuals in Canada must have been depreciated to the extent of about $675,000,000.
We add up the three sums, namely, the $1,325,000,000 as a result of unemployment and under employment, the $1,000,000,000 for loss of income in agriculture, and the $675,000,000 lost by other individuals and we have a grand total of approximately $3,000,000,000. That, in short, is what the depression

has cost Canada, and the condition towards the correction of which the policy of this administration should be directed. So far they have failed to take any adequate steps in that direction for reasons I can quite readily understand. To check the continued destruction of business and continued unemployment requires not the patching of the competitive system but the institution of an entirely new economic and social order.


Some hon. MEMBERS:: Oh, oh.


Edward Joseph Garland: Hon. members opposite are inclined to laugh at facts such as I have stated. All right, I call to my support as witness one of the most eminent bankers of the British Empire, Sir Basil Blackett, director of the Bank of England. If hon. members will turn to Who's Who they will find who he is. Not only is he a director of that bank, but he is chairman of the Imperial and International Communications Limited, secretary to the Indian Finance and Currency Commission, and to the Capital Issues Committee of 1915. In October of 1914 he went on a special mission to the United States government in connection with exchange problems arising out of the war. He was a member of the National War Savings Committee, and representative of the British treasury in the United States from 1917 to 1919. This is a man whose reputation and respectability is beyond reproach. What does he say? In his last lecture before the Halley Stewart Institute of Great Britain as published in a book entitled The World's Economic Crisis by Salter, Stamp, Keynes, Blackett, Clay and Beveridge, his words appear at page 98 as follows:
I wish to put before you this evening the view that conscious corporative planning is not only a desirable means of progress but an unavoidable necessity-
Note the words, "unavoidable necessity"-
-if we are to save the economic structure of modern civilization from disaster.
Then, two pages later on, he calls upon the support of the Prince of Wales. Commenting upon a statement by the Prince of Wales, Sir Basil Blackett has this to say:
The Prince of Wales was calling for planned social effort by the individual, and it is significant that his emphasis was laid on the fact that such social effort has to be consciously organized and planned if it is to be of any use to the community.
Then, again at page 105 of the same document, having pointed out that in the forefront of the reforms which a planned

The Address-Mr. Garland (Bow River)
twentieth century demands is a stable money whose purchasing power will remain constant, he has this to say:
It is to our failure to seize this primary necessity of any rational monetary system that our present distress is preeminently to be attributed.
Not only are the facts I have recited concerning the condition of agriculture, unemployment and business ascertainable in these statistics supplied by the bureau, but we know from our own knowledge how desperate conditions really are. For example, how much longer can we expect the farmers to carry on when not only are the receipts from wheat and live stock below the cost of production, but the receipts from the products of mixed farming, that branch of agriculture which we were advised so strongly to go. into, have taken a similar fall.
In a letter from a farmer in the northern part of the province of Alberta, it is stated that it took four dozen eggs to buy a spool of white and a spool of black thread-four dozen eggs to buy two spools of thread. It took four dozen eggs to buy a cake of laundry soap and one of toilet soap. Two and a half dozen were required to get a box of matches, ten dozen to get a pound of tea, and two and a half dozen for a tin of pepper. To be fair, we follow this out and find that in the case of the manufacturer it takes many times more boxes of paper, many times more spools of thread to meet investment charges and overhead.


Mr. POULIOT:: Those eggs were not Easter eggs, were they?


Edward Joseph Garland: And so we find the whole structure of our country is collapsing because of declining price levels and that throughout the world the condition is precisely the same.


Mr. MACDOUGALL:: Oh, oh.


Edward Joseph Garland: 
William Irvine: What minister said that?


Edward Joseph Garland: I tell you frankly it is so like what we hear described as a nostrum or quack remedy that I am sure my hon. friends will not ask me to give the minister's name. I have too much regard for his mentality on normal occasions; I am willing to assume that these words burst from him in the heat of rhetoric.

The Address-Mr. Garland (Bow River)


Henry Elvins Spencer: Was it the red-blooded Canadian?


Edward Joseph Garland: I am afraid it was.


Mr. STITT (Nelson):: The hon. member will not tell us his name?


Edward Joseph Garland: I will, if you insist.
I have before me a part of the report of the central board of the British Cooperative Union to the sixty-fourth congress of the union at Glasgow, dated May 16-18, 1932. I use this quotation to demonstrate what others besides Lord Marley, Messrs. Keynes, Kitson and others have to say about this matter; they believe that the present order must undergo a drastic change. The report reads as follows:
Capitalist apologists cannot explain in terms which do not condemn their theory the disconcerting fact that, at the apex of productive capacity, world consumption and exchange of commodities are dwindling. Systematic destruction of valuable goods alleged to have been over-produced, the collapse of credit systems sanctified by banking tradition, and reversions to crude barter reveal even to the man in the street the lamentable failure of competitive industry and the flimsiness of its foundations. In such a world of unreality the simple verities of the cooperative ideal stand out as basic common sense.
We now find hon. members of the _ Conservative party taking a position which is not only antisocial and unintelligent but in direct variance with the policies preached and pronounced by just as sincere Tories in other lands. For example, I have before me an editorial which appeared in Lord Beaver-brook's Journal, the Daily Express, under date of Wednesday, April 13. It reads as follows:
The time is long overdue for a reversal-and a dramatic reversal of the monetary policy of Great Britain.
We have asked for that in this country for many years. The editorial continues:
The national need is for a steady expansion of credit facilities. The Bank of England is the obstacle in the way of that need, and because of its vested power it has imposed upon the government for ten years a policy of deflation.
Let me interject here a few remarks. I say to those who hold up the bogey of inflation to frighten the people that this country and most countries of the world have always been happier, better off and more prosperous on a measured and reasonable inflation than under deflation. I say to them furthermore that I defy them to demonstrate intelligently or logically in this house or any other place how they are going to restore industrial prosperity without inflation. We cannot continue with
the present price levels; debts cannot be paid, our own people and country are going into bankruptcy. We must have rising price levels and new activity, and we cannot have those without inflation. It must be remembered that no hon. member in this corner has ever urged the wild and stupid policies of rabid, uncontrolled inflation which have been pursued by desperate governments under desperate conditions; what we seek is a managed and intelligent inflation, an inflation which has a definite basis and a distinct regard for price levels and the quantities of goods to be consumed. It is the negation of intelligence to say that men do not exist or that bodies cannot be created that will have the power and intelligence to control such a policy. I should like to continue with Lord Beaverbrook's editorial, and I call the following to the attention of hon. members:
In other words, the Bank of England, which owes no responsibility to the electorate, dictates the government's financial policy.
The system is definitely wrong. It has played an enormous part in bringing about the postwar economic distress, and the men who conducted the bank's affairs then are still in charge.
It is no use tinkering with the question of reform. The present situation should be brought to an end.
The government must be master in its own house; the government must dictate the nation's monetary policy; and the Bank of England must be relegated to its rightful place as the servant of the nation.
If I could paraphrase by substituting for the words "the Bank of England" the words "the banks of Canada," or to be still more candid, "the federal reserve system of 'the United States" I would repeat word for word as part of my policy those words of Lord Beaverlbrook which appeared in the Daily Express. We must have control of our banking system. We can no longer leave that to the haphazard and foolish judgment of private individuals who, driven solely by the profit motive, have so jeopardized the whole existence of this so-called civilization and have brought it to a point where a new order is imperative. I simply repeat the words of the director of the Bank of England, whom I already quoted.
All along the line we have simultaneously to get to work to overhaul existing methods and practices and to rebuild our institutions. In the economic sphere agriculture, marketing, transport, housing, all need attention in close coordination with each other, and all have to be interrelated with the social services, with health services, with education, with the problem of provision for our leisured hours.
The same gentleman, having pursued much the same course as I have in depicting what
856	COMMONS
The Address-Mr. Garland (Bow River)
scientific genius has done for the human race, sums everything up by saying that it might well foe that our vision of the future may be too dazzling for us to bear. In his concluding paragraph, Sir Basil Blackett uses these words, which I call to your attention, Mr. Speaker, and to the attention of hon. members opposite with all the earnestness at my command:
For the first time in human history the mere problem of daily subsistence lias ceased to be the primary pre-occupation of a large part of the inhabitants of the earth. There is no reason why in a short time any human being should feel serious anxiety about the provision of food and clothing and houseroom for himself and for those for whom he is responsible. Science offers to us and to the generation immediately ahead of us a standard of living and of material comfort immensely higher than any that has been known to the most fortunate of those which have gone before.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata):	Mr. Speaker, as I have very little
time after perusing official publications, I must apologize for not being more familiar with the theories and systems of so many economists. Inflation might be interesting when considered theoretically, but although I am a poor man, I cannot believe in such a policy. I have a dollar in my pocket. Inflation can make it four, but the four dollars that I shall have by inflation might be worth one-fourth as much. So I shall not be much better off if inflation is applied to the country than if things are left as they are now.


Edward Joseph Garland: That, of
course, is rubbish.


Jean-François Pouliot: It may be. It may be rubbish in accordance with theories that have not yet been applied. If the economists should meet together and concentrate their theories, forming one system instead of as many systems as there are individuals, then one might learn the practical result that might ensue from those systems. But until this is done, one may be allowed to be a little doubtful about the matter, although I do not challenge the good faith of my hon. friend who is always interesting when he delivers a speech in the house.
Yesterday a challenge was issued by the Prime Minister (Mr. Bennett), to every member of the House of Commons. May I refer to those explicit statements that were made during the campaign of 1930. At Cornwall, on June 27, the leader of the Conservative party said:
We propose at the first session of parliament to effect such legislation as will give Canadians (Mr. E. J. Garland ]
fair opportunity in competition with any country in the world. I will enact such tariff measures to give Canadians an even chance, or perish in the attempt. At the same time we will protect labour as well as consumers. There will be no exploitation.
The Prime Minister should be labelled as perishable. This is his declaration in regard to our blasting our way into the markets of the world. At Victoria, on June 17, he said, as reported in the Victoria Colonist of the same date:
It is true we must have foreign markets, and as I said the other evening we will blast a way to those markets on a world-wide basis with any exportable surpluses. We do not have to worry about that.
At Vancouver on June 18, as reported in the Province of that date, he said:
If Mr. Mackenzie King thinks I will not so build up our agricultural and industrial life that its strength will drive our products into the markets of the world, then he is wrong. For that I will do. If he thinks I will not establish new markets for these products, strive with all my heart to retain them, drive our products with all my power into new markets, into old markets, into reluctant markets, he is wrong. For that I will do.
After the election, on September 16, 1930, the Prime Minister made this statement as reported on page 238 of Hansard of that date:
He said: Mr. Speaker, in moving that you do now leave the chair, I do so because of the disturbed conditions that exist in this country and because of the circumstances that this parliament has been called to consider the problem of unemployment. I indicated a few days ago that the measures proposed were three in number, of which a tariff measure was one. Our tariff measure is not a general revision of the tariff, but deals only with such items in the tariff as it is believed will ensure additional employment to a large number of men and women in Canada.
Then he continues:
It is not for the purposes of protection that the tariff is being revised today.
He did not say "increased"; he said "revised." That was a euphemism. The tariff board had been dispensed with and the right hon. gentleman himself was revising the tariff without any other assistance. He continued :
The resolutions that are being submitted to this house are not for the purpose of affording protection in the sense in which that term is usually used; but if that term is used to designate just what we, during the election, indicated that it did mean, namely, the giving to Canadians an equality of opportunity with others who are building up their country to enable us to build up our dominion, and to give fair competition to the worker in Canada, be it man or woman, then it is protection that we

The Address

Mr. Pouliot
propose. Tliere can be no doubt, Mr. Speaker, in the mind of any hon. gentleman within sound of my voice that this government at least has a mandate to give effect to that policy.
That was true, but it was an experiment.
In every part of this dominion I was at great care to make it known to the audiences who listened to what I had to say, so that there could be no mistake as to what I meant, that in the event of their supporting candidates of our party they thereby supported a policy that -would ensure fair competition to Canadian workmen and workwomen and equality of opportunity to Canadians to build up their country.
He continues:
A number of items only will be dealt with. They will be dealt with on the basis of the employment that will be given to those who ' are not now unemployed. And we have very definite assurances from the producers in this country that as a result of the action we are taking they will increase the number of men and women in their mills and factories. I said the other day, Mr. Speaker, that the number might be estimated at 25,000 within a reasonable time.
I think that is too low an estimate, but I desired that the estimate should be at least conservative-as in keeping with the party for which I speak at this moment. When I say
25,000,	I think I am understating the number of men and women who will find employment by reason of the action that we are taking.
This is the last quotation from the observations of the present Prime Minister on that occasion:
We propose therefore to provide that so far as may be reasonably possible the requirements of the 10,000,000 people living on the northern half of this continent shall be provided by Canadian producers.
This was said during the special session on September 16, 1930. There is no excuse for poverty, as the hon. member for Bow River (Mr. Garland) has said, but there is a reason for it. The government tried an experiment by raising the tariff. These are the results, and the figures will give the house an idea of the logic of the Liberal party and of the lack of logic of the Conservative party. In 1930, the total Canadian imports were $1,248,000,000, a decrease of $17,000,000 from the preceding year. The exports were $1,144,000,000, a decrease of $243,000,000 from the preceding year. That decrease includes a decrease of S147,000,000 of exports to the United Kingdom. This explains why the Liberal government of that day submitted to the house and to the country a scheme of British preference. They wanted to increase the British preference in order to retain such a good client and to keep the trade going. After the present government had raised the
tariff during the special session, Canadian imports in 1931 amounted to $906,000,000, a decrease of $341,000,000 from the preceding year. The Prime Minister was blasting his way into the markets of the world and the result was a decrease of $341,000,000 in imports alone. Has he any reason to say now: "We have succeeded where others have failed?" The total Canadian exports in 1931 amounted to $816,000,000, or a decrease of $328,000,000 from 1930. The Prime Minister was blasting our trade into the markets of the world, and every time he blasted, the hole became deeper. Did he have any reason in 1931 to say, "We have succeeded where others have failed"? In 1932 our total Canadian imports were $578,000,000, a decrease of S328,000,000 over the preceding year. The Prime Minister was blasting, and again the hole became deeper. But he nevertheless continued to follow the same policy. Did he have any reason then to say, "We have succeeded where others failed"? In the same year, 1932, the total Canadian exports were $587,000,000, a decrease of $229,000,000 over the preceding year. The Prime Minister was blasting and the hole again became deeper. Did he have any reason there to say, "We have succeeded where others have failed"?
Here are the figures of the total decrease in Canadian trade for the two years ending March 31, 1932. The total decrease in imports was $669,000,000 or 53-7 per cent, and the total decrease in exports was $557,000,000 or 48-7 per cent. The Prime Minister was blasting our trade, and the hole became deeper and deeper.
At times we hear something said about a favourable balance of trade. If one buys nothing and sells only one cent's worth, one has a favourable balance of trade. It reminds me of the story of two old friends vho met. Paul asked Joe, "What is your business?" Joe replied, "I have a very good business." "What is it," his friend asked. "I am selling clay pipes," Joe replied. "Do you make much money at that?" asked Paul. "Oh, yes" said Joe. "How much do you pay for them, and what is your profit?" Paul asked. "I buy them for one cent, and sell them for one cent." "Then where is your profit?" Paul asked. "Oh," Joe replied, "a few may break occasionally." I think that story applies very well to the understanding of trade by the government, and especially by the Prime Minister.
May I submit some figures from the official report of the Department of Trade and
The Address-Mr. Pouliot

Commerce for the year ending March 31,
1931,	showing Canada's decrease in trade with different countries?
With the United Kingdom our trade was $368,000,000. The Prime Minister was blasting our trade in 1930 and in 1931, and the decrease with one country in one year was $102,000,000. Did he have any reason to say "We have succeeded where others have failed"?
With the United States our trade was
1933.000.	000. The Prime Minister was blasting our trade, and with what result? A big hole, for there was a decrease in one year of $428,000,000.
With the British Empire our trade in that year was $407,000,000. The Prime Minister was still blasting our trade, and with what result? A hole of $134,000,000. Did he have any reason to say, "We have succeeded where others have failed"?
With foreign countries our trade was
81.208.000.	000. The Prime Minister was blasting our trade and what was the result? A hole of $527,000,000 in that year. Had he any reason to say, "We have succeeded where others have failed"?
Our total trade in that same year was $1,706,000,000, a decrease of $662,000,000. Did the Prime Minister have any reason to say, "We have succeeded where others have failed"?
One would have thought that that was enough of that experiment; when the Prime Minister saw that the country was on the verge of ruin he should have changed his ways and abandoned his insane policy of high tariffs. On July 8, 1931, at page 3554 of Hansard, the Prime Minister admitted that he had changed in his first year of office nearly one-half of the total number of tariff items in the schedules. What was the result in the second year? Again, according to the official figures of the Department of Trade and Commerce for the year ending March 31,
1932,	our trade with the United Kingdom was $280,000,000. There was some blasting again. The new decrease in one year was $88,000,000, and two years' blasting resulted in a decrease of S190,000,000.
With the United States our trade was $586,000,000. As a result of the blasting of 1932 our trade with the United States decreased by $347,000,000, and in the two years there was a decrease of $775,000,000. Was it not a fine blast, Mr. Speaker?
Our trade with the British Empire for the year ending March 31, 1932, was $366,000,000,

showing a further decrease of $131,000,000, and a decrease in two years, after two formidable blasts, of $265,000,000. Had the Prime Minister any reason to say to this house that he had succeeded where others had failed? These figures are depressing, but in answer to the bombastic statements that we hear from the other side it is good to come down to plain facts, and my speech is very matter of fact as you must realize, Mr. Speaker.
With foreign countries our trade for the year ending March 31, 1932, was $788,000,000, a decrease in one year of $420,000,000, and in the two years there was a decrease of $948,000,000. Some blast!
Our total trade in that same year ending March 31, 1932, showed a new decrease of . $551,000,000. Our total trade for the year ending March 31, 1930, was $2,368,000,000, and for the year ending March 31, 1932, $1,154,000,000, a decrease in two years, after two successive blasts, of about $1,213,685,000. What a great chasm! How shall it be filled? By probabilities, possibilities and potentialities. That is all the government has to offer now.
But the same thing continues. According to a statement of the Department of National Revenue our imports for the month of September, 1931, were $45,000,000, and for the same month in 1932, $34,000,000. On the other hand, our exports for the same month in 1931 were $48,000,000, and for the same month in 1932, $42,000,000. After the last conference there was also a drop in our trade last month as compared with the previous year. I do not blame the members of the government so much as the Prime Minister himself for that. I regret to have to do it, but I feel it is my duty. The high tariff brought about by the Imperial economic conference reminds me of a client who came late one day to my office and said, "I do not feel well." I said: W'hait is the matter with you? He said, "I left home this afternoon quite late before taking my dinner, and on the train I bought a banana from the news agent. After I had eaten it I found it was rdtten." After having swallowed the agreements of the Imperial conference, if we may judge by his speech of last night, the Prime Minister must have the same feeling.
I wish to tell hon. members that we on this side of the house are willing to cooperate with the government, provided we are not addressed as schoolboys. Not one of us is a schoolboy; we are grown men and want to be treated as such by the Prime Minister. We want to be treated by him as well as

The Address-Mr. Pouliot
we are treated by his colleagues in the cabinet; they set a good example for him. If I were-thank God I am not-if I were on the other side of the house I would have spoken the same in caucus-


Mr. CHEVRIER:: In very few years we
will be there.


Jean-François Pouliot: Oh, yes. I would have
spoken the same way in caucus as I have spoken this afternoon. I cannot understand how hon. members opposite can accept dictation from any one. When they are told to do this and that, they are just as quiet as schoolboys, and when the prophet opens his mouth they kneel down in deep respect. If I were on the other side of the house I could not live for one second; I should die of asphyxiation. Over here we breathe the free air of liberty; one is free to say that which he thinks proper. Hon. members are entirely free, and I am sure hon. members opposite envy us the happy position of being able to say what we think, and envy our earnest and sincere views, which are our own.
One word in conclusion, and it is this: I understand that because of the Prime Minister's stubbornness in keeping tariffs at such a high altitude the trade of Canada has been ruined. No hon. member opposite has courage enough to tell him that; they prefer to cheer and applaud him; they choose to encourage him in his bad ways, and in the wrong way. As members of the opposition it is our duty to tell him that which his supporters are too shy to place before him. We have to bring him down to realities, and to show him the deep chasm he has made by his blasting. When he said during the last election, he was to blast our way into the markets of the world, he was stating pure humbug. Although he did not give a definition of humbug, he himself gave a very good description of it. Our trade was to improve, conditions were to be much better for employers and employees in Canada. But we have only disaster and ruin, and possibly we are on the eve of a revolution. I hope God will never permit a revolution in Canada, but we do know that we heard last week of very unfortuante conditions. A spark may light a big fire. Then, the sad details outlined this afternoon by the Minister of Justice (Mr. Guthrie) would indicate that that sentiment is growing in Canada. It is no time to fool the people; one must go to them and reason with them. One must not sit on a high tower, but must listen to the people and see what can be done for them. This is not the time to work so hard; hon. members in the government should learn that this is the
time to think. Let them think; let them stop working and begin thinking. I place on record those Latin words which I hope they have not forgotten: Desolatione desolata est terra, quia nullus est qui recogitet in suo corde. "The land is desolate to desolation because there is no one who thinks from the bottom of his heart." Let them think about the miseries of the people, about the coming winter. Let them think about their disastrous experiments in tariff legislation which have proved to be one of the greatest mistakes made in Canada. Let the government understand that railway employees are out of work because there is no traffic, and that there is no traffic because there is no trade. Let them cease to be so stubborn so that they may do something to help the men in industry.
Yesterday an apotheosis was outlined to the Liberal party, and when I make that statement of course I am referring to the speech by the Prime Minister. During the course of his remarks he mentioned occasionally the name of one of his predecessors, a leader of the Conservative party-Sir Charles Tupper. But when he wanted to shield himself, when he wanted to excuse himself for all the wrongs brought about by his nefarious policy of high tariffs, he invoked the memory of our own leader of other days, Sir Wilfrid Laurier. He mentioned that name not only once, but twice, three times, four times, ten times, twenty times, thirty times, and asked as many times that that great man should come to his rescue. Every time he uttered the name of that great leader of the Liberal party it was cheered to the echo by his own supporters in the Tory party. Sir, when Sir Wilfrid Laurier was in politics you were a young man; so was I, but I had great respect and affection for him. I knew him well enough to admire and not to forget him. We attend in this house at the cost of some sacrifice; we come here to do our duty, but there is a light showing us the way to come: the principles laid down by Sir Wilfrid Laurier. And when we see the leader of the Conservative party excusing himself, not by giving facts but by giving lectures, not by informing the people about the real situation but by promising possibilities, probabilities and potentialities, we say our duty is to fight his policy to the last ditch. In doing so we will live in accordance with the traditions of our own illustrious leader, Laurier.


Mr. E. J. YOUNG (Weyburn):: Mr. Speaker, I am sorry the hon. member for Bow River (Mr. Garland) has left the chamber.


An hon. MEMBER:: He left it last night
The Address-Mr. Young


Edward James Young: I listened to his speech as I always do, with interest; he is one of the most entertaining and interesting speakers in the house. He generally makes out a very good case for whatever side he happens to espouse. But as he made that powerful speech in support of the subamendment today I could not help but wonder whether or not, if the time came that his vote would decide that this policy should be put into effect, he would vote for it. The hon. member last night made one of the best speeches made in this house against the agreements now under consideration-and then he went out and hid behind the curtain because he had not the moral courage to vote against that same agreement. So when I listened to his argument today in favour of inflated currency I could not help but wonder whether he really would vote for such a thing if he had the chance.


An hon. MEMBER:: He would not.
iMr. YOUNG: One Statement he made attracted my attention. He said that if there was sufficient money in the hands of the people to buy production there could be no want, there could be no distress. I think we can all agree with that. How much money will be required in the hands of the people to buy production? Whatever money represents the amount of production you wish to buy. If you have a dollar in your possession it will buy one dollar's worth of production. If you tear that dollar in two and call each half one dollar the two halves will buy one dollar's worth of production. And by no trickery can you persuade people to give you two dollar's worth of production for the two half dollars which you call a dollar each.
If I understand aright, the arguments advanced by my hon. friends in the corner who believe in inflation are these: They do not pretend for a moment that anything we could do in the way of inflating our currency would have the effect of increasing world prices. No; they admit frankly that our wheat, lumber, pulpwood, newsprint, asbestos, copper, all the things we have to sell, would still ibe sold on the world market at world prices measured in terms of gold. For whatever we do with the gold standard, values will still be measured in gold throughout the world; whether we stay on it or not, whether other countries are on or off the gold standard, the world will still continue to measure values in gold. When Great Britain went off the gold standard, and said, we will no longer sell gold at so man}' grains to the pound, the

world said: Your pound is no longer worth $4.86 in gold; we will give you for your pound just what it is worth in gold. When Canada went off the gold standard and said: We will no longer give 25.8 grains of 90 per cent fine gold in exchange for the dollar, the world said: We will give you for your dollar just what it is worth in gold. So values will still be measured in gold.
So my friends admit that nothing we can do in the way of inflating our currency would affect world prices. But they say that after we have sold our wheat in the world market and received gold or its equivalent in exchange, if we inflate our currency we can turn that gold into more Canadian dollars than we do at present, and with these more Canadian dollars, even though they are not worth as much in gold, we shall be able to do more business in Canada. In support of that they quote wheat prices in Australia as against wheat prices in Canada. The comparison given the other day by my hon. friend from Macleod (Mr. Coote) as to wheat prices in Australia and here was hardly a fair comparison, in that he compared seaboard prices in Australia with prices on the siding in Alberta.


Mr. COOTE:: I am sure the hon. member
does not want to be unfair to me. If he will read the Commercial Intelligence Journal from which I quoted he will find the prices were given at country points.


Edward James Young: I have read, Mr. Speaker,
the Commercial Intelligence Journal. I took the trouble to go to the reading room and check Australian prices with Canadian. The latest paper we have from Australia is dated September 28. On that date wheat was quoted f.o.b. Williamstown 3s. 31d. Williamstown is a seaport in Australia. On a former occasion I referred to similar statements made by my hon. friend and said he should take into consideration the cost of putting that wheat on the world market as compared with our costs. The price the Australian farmer receives for his wheat will be the Liverpool price less the freight. The price we receive for our wheat will be the Liverpool price less our cost for freight. The freight rate on wheat, found in the same paper, September 28, from Melbourne to Liverpool, was 25s. per long ton, Australian funds. Figured in Canadian funds that is ten cents a bushel. The freight on wheat from Fort William to Liverpool, on the same date was 6-J cents to Montreal and 6 cents more to Liverpool, 12| cents a bushel. That is, to get our wheat from Fort William to Liverpool, we are paying 12| cents a bushel; the Australian from Melbourne to Liverpool pays 10

The Address-Mr. Young
cents; it follows then that the price of wheat in Australia cn that day should have been 2J cents a bushel more than it was in Fort William. What was the price? Spot wheat, No. 1 northern, at Fort William, September 28, was 50 cents. The same spot wheat, Wil-liamstown basis, on the same date was 3s. 3|d. Australian funds, which translated into Canadian money is 50 cents a bushel. We were getting identically the same price, but we were paying 2J cents more freight than they were. Why did the Australian not get that extra 2} cents for his wheat? What became of it? One of two things: either he was selling wheat cheaper than we were in the Liverpool market, or those who were engaged in the export business in Australia were demanding a larger profit on their transactions because they were dealing in a fluctuating currency, which made an extra risk. They not only ran the risk of fluctuation in the price of the wheat but also the risk of fluctuation in the price of the money they were handling, and to cover that risk they insisted on a larger profit. In any event the Australian farmer was receiving, measured in terms of gold, or of Canadian currency, 2\ cents a bushel less than we were.
But my hon. friends say they are willing to lose that, because they say the 77 cents depreciated currency that the Australian farmer appears to receive-in reality it is only 50 cents-would enable him to pay more debts and to carry on to better advantage than the fifty cents which we receive. Let us examine that statement for a minute. The Australian dollar is down to approximately 50 cents, about half its value, Now, if the value of the dollar be cut in half, one would naturally suppose that prices would double. The Australian dollar being cut in half, the farmer in Australia should have received a dollar in Australian funds for his wheat where we were getting fifty cents. But he got only 77 cents.
In September, 1931, Great Britain went off the gold standard. Since then the price level in Great Britain has declined 2-7 per cent. My hon. friends say that if we go off the gold standard, depreciate our currency, prices will rise. But Great Britain's currency today is down about 30 per cent, yet the price level there has actually declined 2 per cent. There is an explanation for that. The United States stayed on the gold standard. Since Great Britain went off the gold standard, prices in the United States, that is gold prices, have declined; commodity prices in a country that is still on the gold standard have declined 14-4 per cent. The difference between 14-4 and 2-7 represents the effect of the depreciation of the pound on commodity prices in Great
Britain. I think I have Sir Josiah Stamp as my authority on that. That is, prices in terms of gold declined 14-4 per cent, but in a country that had gone off the gold standard prices declined only 2-7 per cent. Then we can say the depreciation in the pound was responsible for holding prices up, equal to the difference, between 14-4 and 2-7, or 11'7 per cent. The pound is down about 25 per cent, so in other words, the effect on price levels is just about half the amount of the inflation. Australia inflated her money to half its value and prices advanced to only about half that extent. Great Britain's currency has been inflated until it is worth about only 75 per cent of its former value, but prices have risen only 11-7 per cent. So I think we can safely say that to whatever extent we inflate our currency, prices will rise only to about half that extent.
My hon. friends propose that we tie our dollar to the pound sterling, which today is quoted at about $3.60 in Canadian funds. That would bring our dollar down to about 75 cents, so that where we now get $3 for a given product we would get four of the inflated dollars. The value would be the same, but we would get four of those dollars, and my friends in the corner say that with those four inflated dollars we will be able to pay more debts than we can pay with the three uninflated dollars. That is true, if the dollars would be used for that purpose, but today the price of wheat in western Canada is approximately 25 cents a bushel. We are going to inflate our currency until the dollar is worth about 75 cents. The British pound sterling is down 30 per cent below our currency. If we inflate by an additional 30 per cent we can expect an advance in the price level of about 15 per cent. Add 15 per cent to 25 cents a bushel and you get a probable increase in the price of wheat of about 4 cents a bushel, in this depreciated currency. The price today is 25 cents, so the farmer would get about 29 or 30 cents in the depreciated money, and I want to ask how many debts he would be able to pay with wheat at 30 cents a bushel.


George Gibson Coote: I am sure that if the hon. gentleman would go over his figures carefully he would see that bringing our dollar to the level of the pound would increase the price of our wheat, at the present selling price, by about 15 cents a bushel.


Edward James Young: I have quoted the effect of inflation on the price levels of other countries;
The Address-Mr. Young

generally it has figured out that the price level has increased to just half the extent of the inflation. We have no reason to suppose that it would be any different in Canada.


George Gibson Coote: Would my hon. friend allow me to answer that objection? Wheat is an export commodity, sold in the market at Liverpool and paid for with the British pound. The dollar would be worth one-third more than it is now, and that would increase the price of wheat to the farmer by 12 to 15 cents a bushel, I think.


Edward James Young: That is my hon. friend's opinion, but in Australia wheat is an export commodity. Australia has cut her pound in half, but the price of wheat has not been doubled. It has been increased by about half.


George Gibson Coote: At country points in Australia the price of wheat is double the price in western Canada.


Edward James Young: The figures quoted by my hon. friend, as I said before, are seaboard prices; he can verify that by looking at the Australian papers, if he cares to do so. Does anyone suppose that an advance of five cents a bushel in the price of wheat, in this inflated currency, would put the farmer in a position to pay any debts at all? The farmer uses the money he has left after paying necessary running expenses for the payment of debts. Increase the price of wheat 5 cents, 10 cents or even 15 cents a bushel by this process. Will the farmer have anything left with which to pay debts? Every cent of that money will go to pay running expenses. How has it worked out in Australia? With their currency at one-half its former value we have farmers writing to the newspapers to say that they never will be able to pay their debts unless currency is further inflated.


Mr. McGIBBON:: That is Germany's
method.


Edward James Young: Yes. My hon. friend says he will anchor the dollar to the pound sterling. Where is the pound sterling today?


George Gibson Coote: Would it not be a good anchorage?


Edward James Young: I like to anchor to something firm and solid. Fifteen months ago the pound sterling was worth S4.86J. Great Britain went off the gold standard and immediately the pound dropped to S3.30. Later it rose to $4.20, but now it is back to $3.30. Is that a very good anchorage? We would foe anchoring to a floating cloud. Let me ask this

question: What causes the pound to rise and fall? What causes our dollar to rise and fall in the markets of the world? Why do these exchanges fluctuate? It is the supply and demand of dollars on the market that determines the value of our currency; it is the supply and demand of British pounds that determines the value of the pound. When you sell goods to Great Britain you get paid for them in Canadian money, but the buyer pays for them in British money. When he sells goods to us he gets paid in his own money, but we pay for those goods in our money. How is that arranged? When he buys Canadian goods he takes his British pounds to the market, sells them and buys Canadian dollars. When we want to buy goods in Great Britain, in order to pay him in his own currency we take our dollars to the market, sell them and buy British pounds. The more Canadian dollars there are for sale in the market and the less demand there is for them, the lower they go. Similarly, the more British pounds there are for sale in the market and the less demand there is for them, the lower they go.
So it is apparent that the value of the pound is determined by the trade situation in Great Britain, by her trade balance, if you like. The value of our dollar is determined by the trade balance of Canada, and when we undertake to tie our dollar to the British pound and, as my friend suggested the other night, pass an act providing that we will redeem the pound at par in our own currency, what are we doing? We are simply backing Britain's notes as far as she likes to issue them, and she is doing the same for us. Today the British pound is lower than it has been for some little time, and why? Because at this season of the year Great Britain is buying heavily of raw cotton. She is selling pounds in order to buy American dollars with which to pay for that cotton. We are not buying cotton today; we are selling wheat. Our sales are greater than our purchases at this time, so our dollar has gone up.
What could Great Britain do if we agreed to redeem her pound at par? She could pay for her cotton in this way: She could say: "We will not sell our pound in the United States to buy American dollars; we will pay for that cotton with Canadian dollars, because Canada will give us $4.86 for our pound." What would be the result? It would be that we, the Canadian people, would be taxing ourselves in order to buy Great Britain's raw cotton for her. That would be the inevitable result if we tied our dollar to the pound sterling.

The Address-Mr. Young
But my hon. friends say that the advantage in a depreciated currency is that you can undersell your competitor, and they have pointed out time and again that Australia has an advantage over us in the British market because, when they translate the British pound into Australian currency, they get about $6 for it. If that be true, the only advantage in inflating your currency is to inflate it more than someone else does. If we tie our dollar to the pound sterling, Australia will still have an advantage over us because their money is below the English money. Then the demand will arise for further inflation to get under Australia, and the result will be what?


An hon. MEMBER:: Go down still further.


Edward James Young: There will be further inflation and a race for the bottom. My hon. friends say that they are going to have an intelligently controlled inflation, but how do they intend to control it? It cannot be done. It would be like trying to climb the ever climbing wave; it would be always in front of them. The whole thing could not be stopped until our currency reached the level of Germany's, when it would be wiped out completely.
Let us suppose for a moment that the government declared its intention of accepting this amendment to depress our dollar to the level of the pound sterling, or let us suppose that the government did not do anything of the sort but sufficient hon. members got up and spoke in support of this amendment to leave the impression that this action might be taken. What would happen? Our dollar today is worth ninety-one cents, and the people would say: Parliament is going to depress our dollar until it is worth only seventy-five cents. WThat would happen then? Every person who had a Canadian dollar would want <to get rid of it; an effort would be made to exchange our dollars for the American gold dollar; everybody would be throwing Canadian dollars on the market, until the price of our dollar would reach not only the level of the pound sterling but would recede far below it. Every dollar in our savings banks would be withdrawn and transferred into American funds. Every dollar invested in Canada by Americans or other outsiders would be withdrawn. Then after our dollar had gone down perhaps to fifty cents, people would realize that it had gone down too far and there would be a rush to buy it back. Our exchange would fluctuate back and forth and business would be impossible because no one would know what
the dollar was worth. What we need in business is a constant measure, but the proposal offered by the hon. member would mean a most inconstant measure. Our dollar would be worth one thing today and something else tomorrow.


Mr. SPEARMAN:: What has happened
during the past year? It has been worth one price today and another price the next month.


Edward James Young: My hon. friend is mistaken.


Mr. MOTHERWELL:: When experts
differ, who shall decide?


Mr. GEARY:: My expert friend, probably.


Edward James Young: My hon. friend has suggested (that in order to deflate our currency he would ship $60,000,000 of gold to New York and buy bonds, and if that was not sufficient, he would ship more. Would that have the effect of bringing our dollar to the level of the pound sterling?


George Gibson Coote: I should like the hon. member not to misquote me, if he is referring to me. I did not suggest that we would ship that gold to New York.


Edward James Young: I thought my hon. friend
said that; I know he said something about disposing of our gold reserves.


George Gibson Coote: I suggested that the government might very well have bought New York exchange to the extent of $60,000,000 to liquidate the bond issue which matured a week or two ago.


Edward James Young: That is the same thing.


George Gibson Coote: No, it is not the same thing.


Edward James Young: Instead of shipping gold
to New York to buy bonds, my hon. friend would buy American gold dollars with which to retire the bonds-it is the same thing.


George Gibson Coote: I did not suggest that the $60,000,000 would be moved; it would still remain in the vaults in the east block. I do not want to be misquoted.


Edward James Young: I did not know that my hon. friend intended to leave the money there and buy on our note. However, I accept his correction.


George Gibson Coote: We could float a $60,000,000 loan in Canada to retire the $60,000,000 loan in New York. My hon. friend himself has said that when we buy exchange, the price goes up.

The Address-Mr. Young


Edward James Young: My hon. friend would borrow $60,000,000 from the Canadian people and take it over to New York to retire our loan maturing there. If this measure which he suggests were adopted, they would not accept our money at par; they would want two dollars for one.	_	_
My hon. friends seem to think that by increasing the volume of money in circulation the amount of business would be increased. I have before me a statement of the amount of money in the banks in July, 1930, and in September of this year. In a parallel column appears the debits against bank accounts. If you have ten dollars in your pocket or in your til! and you do one hundred dollars worth of business in a given time, you have turned your money over ten times; your money velocity is ten. Everybody knows that money turns over and over, and the number of times it turns over is the rate of the velocity of your money. The bank deposits in July, 1930, amounted to $2,034,000,000, the turnover or the debits against bank accounts amounted to $3,093,000,000; the velocity was 152 per cent, that is, the money was turning over one and one-half times in the month or at the rate of eighteen times in the year. In September of this year the bank deposits amounted to $1,841,000,000 and ths debits against bank accounts amounted to $2,097,000,000. The velocity was 113-9 per cent for the month, or thirteen and two-thirds times for the year. In July, 1930, we were turning our money over at the rate of eighteen times per year, today we are turning it over only at the rate of a little over thirteen times. If we go back to January, 1929, we will find that we were turning over our money at the rate of twenty-one times per year. If you increase the volume of your money without increasing the goods that are moving, what is going to happen? You will decrease the velocity. If the goods are there to be moved and nothing stops them from being moved, there is plenty of money with which to move them. Why? Because money today is travelling so slowly and when the demand for goods arises the velocity of money will increase. We do not need to do anything in connection with the money in circulation in order to increase business.
Another question I should like to ask the house is: What is the effect on commodity prices when a country goes off gold? The house knows that the price of gold, like the price of anything else, is governed by the law of supply and demand. When gold is available, the price goes down; when it becomes scarce and hard to get, the price goes

up. What happened when Great Britain went off the gold standard? In effect, she said: We will no longer sell gold at the old price, in fact we will not sell it at all. That made just one more place where gold could not be purchased.


An hon. MEMBER:: Why do we need to buy it?


Edward James Young: Because the people want it. From the beginning of time man has always been willing to take gold in exchange for goods when he would not take anything else.


An hon. MEMBER:: That will continue to the end of time.


Edward James Young: When Great Britain went off the gold standard that made one more place where gold could not be purchased. It made gold harder to get. Consequently the price went up. To refer again to the price levels in the United States which I quoted a moment ago, it will be found that prices have declined some 14-4 per cent since Great Britain went off the gold standard. When the price of commodities declines it is another way of saying that the price of gold has gone up.


George Gibson Coote: I wonder if the hon. gentleman would permit me to make a correction? He said that when England went off the gold standard that made one more place where gold could not be bought. I would direct his attention to the fact that at the time the Chancellor of the Exchequer said that they would not interfere with the free market for gold; it could be bought and sold freely in England.


Edward James Young: When Great Britain went off the gold standard she refused to sell gold any longer at the price required by law.


George Gibson Coote: At a fixed price, yes, but gold is still for sale in England.


Edward James Young: Not quite so freely. Great
Britain went off the gold standard and gold was harder to get. That is why she went off in order to keep her gold and prevent its disappearing too quickly. That was one more place where gold could not be purchased. The price of gold went up which is another way of saying that the prices of commodities went down. Every time a country goes off the gold standard, refuses to sell gold as she has been doing, it means there is one more place where gold cannot be secured; the price of gold will advance and the price of commodities will drop. Yet my hon. friend says that we should get off the gold standard.


George Gibson Coote: We are off it.

The Address-Mr. Young


Edward James Young: Yes, and my hon. friend
wants us to get further off it. In other words, the action he suggests we take will have a depressing effect on world prices, which is the very thing my hon. friends are trying to avoid.
I know of no subject on which it is harder to keep one's mind clear than the currency question. A wise man once said to his son: "'Son, if you want to go crazy, study currency questions." But in order that we may not become too much confused in the matter, there are a few truths that we should keep in mind. The first is this, that when a man goes into the market to sell the products of his labour and takes money in exchange, he is entitled to receive money that represents the product of somebody else's labour. I think that even my hon. friends in the corner to my left will agree that. If that money does not represent somebody else's labour, you have no right to ask a man to sell his labour for worthless paper.
The question is how to find the best measure of the value of labour. You cannot say that one hour of your labour is worth cne hour of mine, because you might be a better workman, more skilful and you might apply yourself more closely than I. How are 3rou going to find an accurate measure of labour? Different ways have been suggested, but the way that has generally been accepted is this: men say: We will find some commodity that requires a constant amount of labour for its production. No such commodity exists, but the nearest we can come to it is gold. Gold represents labour and the value of the gold, that is not in terms of grains and so on, but the purchasing power of gold on the world market, depends upon the amount cf labour required to replace that gold. That can be easily demonstrated. If you were to go out and discover a mountain of gold, so plentiful and so easily mined that you could shovel it up like sand, gold would be of no value at all. Why? Because very little labour would be required in producing it. It is because there is so much labour required to produce a given quantity of gold that it becomes very valuable. It has been found that no other known commodity varies less than gold in respect of the amount of labour required to produce it. So men say: Let us take that as a measure of value for labour. I do not claim for a minute that it is a perfect measure. Certainly it is not. Time was when gold was produced at les3 cost than now; time was, probably, when it was produced at greater labour cost than now, but it is the best measure we have found so far. If my hon. friends can suggest any more accurate measurement of the value of labour 53719-55
than the amount of gold that can be produced in a given time, then I am willing to consider their proposition.
What do they offer us? What is the basis they offer for currency? They say they will have an intelligent inflation with a definite basis. What is the basis? Let us look at the subamendment cf the hon. member for Macleod, which reads:
And that the issue of this currency and credit should be based upon the natural wealth and productive capacity of this country, not, as at the present time, upon one single commodity, gold, and that its volume should be determined by the goods and services to be deaitli with, and the legitimate requirements of the people.
They are going to base our currency on our natural resources and our productive capacity. We have forests of timber and mines of ore; we have fields where we can grow wheat and lakes and streams where we can catch fish, and on these things they are going to base our currency. When the farmer comes into the market with his wheat and wants to sell it, what are they going to give him for it? A dollar that represents an interest in an untouched forest or an unopened mine. With this money they are going to purchase the products of the farm, the forest, the lake and the mine. I ask the house this: What wilt our producers of wealth say, what will the world say, when we offer them this dollar in exchange for goods? They will say "There is no market for trees standing in the forest or fish swimming in the sea or ore lying in the mine. This dollar of yours which represents these things cannot be exchanged for consumable goods; we cannot give you anything for it." Our dollar would be worthless. Will the world take more of our wheat if you change our currency in that way ? Will it take any more of our lumber or asbestos or copper? Nothing you can do with our currency can open the world's markets. As I said before, the trouble is not with the amount of currency we have, but with the fact that the goods are not moving. Create the condition where the goods will move and currency will take care of itself.


Michael Luchkovich: I was paired with
the hon. member for Lanark (Mr. Thompson). Had I voted I would have voted for the motion.


Mr. GERSHAW:: I was paired with the
hon. member for London (Mr. White). Had I voted I would have voted for the motion.


Mr. KENNEDY (Winnipeg):: I was paired with the hon. member for North Battleford (Mr. McIntosh). Had I voted I would have voted against the motion.


James Layton Ralston: I was paired with the
hon. Minister of Finance (Mr. Rhodes). Had I voted I would have voted against the motion.


Mr. ROWE:: I was paired with the hon.
member for Beauce (Mr. Lacroix). Had I voted I would have voted against the motion.


George Reginald Geary: I was paired with the hon.
member for Laurier-Outremont (Mr. Mer-cier). Had I voted I would have voted against the motion.


Mr. NICHOLSON:: I was paired with the hon. member for North Timiskaming (Mr. Bradette). Had I voted I would have voted against the motion.


Mr. ILSLEY:: I was paired with the hon.
member for Port Arthur-Thunder Bay (Mr. Cowan). Had I voted I would have voted for the motion.


Sir EUGENE FISET:: I was paired with
the hon. Minister of Pensions and National Health (Mr. Maclaren). Had I voted I would have voted against the motion.
Mr. MacM'ILLAN:	I was paired with the
hon. member for Vancouver Centre (Mr. Mackenzie). Had I voted I would have voted against the motion.


Jean-François Pouliot: I was paired with the
hon. member for North York (Mr. Lennox). Had I voted I would have voted against the motion.


Mr. BARBER:: I was paired with the hon. member for Humboldt (Mr. Totzke). Had I voted I would have voted against the motion.


Mr. SHORT:: I was paired with the hon.
member for Kenora-Rainy River (Mr. Heenan). Had I voted I would have voted against the motion.


Mr. BELL (St. John-Albert):: I was paired with the hon. member for Nicolet (Mr. Dubois). Had I voted I would have voted against the motion.


Mr. EMBURY:: I was paired with the
hon. member for Swift Current (Mr. Both-well). Had I voted I would have voted against the motion.


Mr. HOWDEN:: I was paired with the
hon. member for Marquette (Mr. Mullins). Had I voted I would have voted for the motion.


Mr. CAMPBELL:: I was paired with the
hon. member for Mount Royal (Mr. White). Had I voted I would have voted for the motion.


Mr. THOMPSON (Simcoe):: I was paired with the hon. member for Maisonneuve (Mr. Jean). Had I voted I would have voted against the motion.


Mr. DUGUAY:: I was paired with the hon. member for Bagot (Mr. Dumaine), Had I voted I would have voted against the motion.


Pierre Édouard Blondin: The question is on the
amendment.

The Address-Mr. Speakman


Alfred Speakman: May I assure you, Mr. Speaker, at the very outset that it is not my intention to delay the house at this juncture with any lengthy oration or prolonged or extended remarks. It is my purpose chiefly to make a somewhat brief statement dealing in the main with one phase of the amendment now before us and to indicate as clearly and as definitely as possible my own attitude and that of those for whom I speak in respect to this amendment. Before doing so, however, may I offer a few very brief observations of a more general character which may serve as a background for the statement which I have in mind?
We meet here today under conditions and amidst circumstances that are a challenge to every member of this house, a challenge alike to our intelligence, our sincerity and our courage. We are faced by difficulties so great and by responsibilities so tremendous as to dwarf into paltry insignificance every consideration of political partisanship and political expediency, preconceived opinion and petty personal prejudice. We stand, parliament and the administration and the various institutions of which they form a part, before the bar of an aroused public opinion, and we shall be judged and shall stand or fall as we meet these difficulties and solve these problems in the interests of those whom we represent, for whom we are the trustees, and who are looking to us to-day in anxious and sometimes almost despairing expectation for guidance and leadership, and for action, prompt, definite and courageous.
Nor, Mr. Speaker, are these difficulties wholly insuperable or these problems wholly insoluble, although some, not all, are international in character and susceptible only to international cooperation and international action.
We in common with other nations are staggering beneath a load of international liabilities. We are surrounded by world tariffs impregnable to our assaults. Our foreign trade is hampered, our exports are restricted by world barriers, but many of these problems, and some of the first magnitude, are mainly, if not wholly, domestic in their character and are amenable to our parliamentary action. It is true that our foreign and export trade is hampered and frustrated by world restrictions, but it is equally true that we have within the confines of our own country, to say nothing of the empire, natural wealth and productive capacity sufficisat to provide within Canada and for all our people a stands ard of living higher and more secure than anything we have yet enjoyed.
53719-5SJ
It has been stated very often, and reiterated with such frequency as to have become almost axiomatic and accepted by many as a fact, that this country, and particularly western Canada, has been built and developed on export trade, that it is essential to our national existence, and that without it we must perish; and yet, Mr. Speaker, if you analyze that statement and subject it to close and logical scrutiny, I think you will agree with me that that is so farcical, so utterly false, as to be a fantastic absurdity. It is true, and we will admit it at once, that export trade is a very vital part of our present economic system, and that its cessation would necessitate drastic and fundamental changes in our entire outlook and in our methods of production and marketing. But to say that, because we grow more food, for example, in this country than may be consumed by our entire population, and are unable to dispose of the surplus to other lands for this reason, and as an inevitable consequence one-third of our people must suffer hardships and one-fifth must face starvation, is a positive absurdity, nothing more or less. I spoke of a challenge to our intelligence, and there is one-starvation in the midst of plenty. We know this phrase has been used so often as to become, to many, perfectly meaningless; it has come to be associated in many minds with	tub thumping and soap	box	oratory.Yet, if we analyze that phrase and look it straight in the face it becomes no mere phrase, but takes the form of a terrible and grotesque reality; it becomes a monumental and damning indictment upon our modern civilization. Starvation in the midst of plenty-a domestic problem, surely, and one within the competence of our own parliament. And while our	hungry	cry	for	bread,	our	farmerswho	produce	it	are	groaning	beneath theweight of impossible liabilities, of high interest rates and of price levels for all their products far below the cost of production. Can not this	problem	lbe	met	and solved,	or must
parliament and its leaders prove themselves as void and bankrupt of statesmanship and genius as our farmers of money?
It is not that we are asked to perform the impossible. Parliament is not asked to meet and to overcome the dire consequences of some destructive cataclysm of nature; we are not asked to produce wealth from barren ground. That wealth has been produced, and by those people whom we now represent. Our warehouses are filled with goods to meet our needs, ample for our requirements. What is lacking, and apparently all that is required, is money-money for our use, to facilitate our
The Address-Mr. Speakman

business, to permit the passage of these goods from him who has to him who needs, who in turn may possess that which the first man would secure. It would seem, however, that our financial structure has failed us and our money machine no longer functions. Yet in that condition, one obvious to all, we are assured through the lips of His Excellency the Governor General that the financial integrity of this nation has been maintained and is secure.
But what is the nation? Is it to be found in our wide acres, our spreading forests and our mines? Is that the nation; is it to be found in our tall buildings, our vaulted banks? Or, are these few men who control, or who have failed to control, that money machine wdiich no longer serves us-are these the nation? Rather, Mr. Speaker, the nations is our ten millions of people found everywhere in Canada, our farmers toiling in their fields-* courageous still, in near despair-our clerks, our business and professional men, striving against impossible odds to maintain their businesses, preserve their livelihoods and keep up appearances; our miners, our fishermen, our factory hands. These are the nation, the toiling multitudes within our borders who by brawn or brain produce our wealth and provide the foundation of ail our credit and all this nation's finance. They are the nation. Yes, Mr. Speaker, and even that vast army of unemployed who are crowding our cities, wandering along our highways, burrowing in our dump heaps, cursing, some of them, both God and man, and believing in neither, they too are the nation, and they look to us for action-not for words, for action.
Meanwhile a majority in this parliament, and its leaders, put their trust in ancient precepts, hold fast to old notions and strive to meet modern problems with ancient and timeworn methods. They prate of sound money as of a God, and dismiss any suggestion not hoary with age with the contemptuous appellation of a "nostrum" or a "quack remedy." Among the greatest of the powers which we hold with which to meet the situation is the control, vested in this parliament, of currency, credit and finance. As has (been stated, it is true we have farmed this out, this power and this responsibility and given it to private hands. Although we .may have done that we cannot divest ourselves of either power or responsibility, and in the subamendment there was a call upon the administration to resume one and to exercise the other to meet the nation's need and the people's good.
In the moving of the amendment now before us we saw a ray of hope, a hope that the

leader of the opposition and the great party which gave it sanction had seen the light and recognized the need. We recognized also that this conversion, if real, was of very recent date. We knew that within the last few months the leader of the opposition had vied with and even excelled the Prime Minister in reviling and condemning our suggestions. Although we recognized that the amendment as it stood was empty, meaningless and void, composed wholly of regrets, wholly negative and nothing positive, we saw that it might be made to mean something. We did not feel we should disturb one line of it, but left it as it stood, word for word, and endeavoured merely to add something to it which would make it positive, which would put meaning into it, and which, if accepted, would in its last phrase promise definite action.
Since the two amendments were moved, however, the situation has changed somewhat. I had in mind to judge of the sincerity of the Liberal party by their attitude towards the subamendment, but now I think of something that happened a day or two ago. I recall that the leader of the opposition and almost every member of his party then voted for parts of the suggestion we brought forward in an amendment we then moved, and which had for its purpose the bringing of our dollar to a parity with the English pound. To that degree at least they put sincerity and meaning into their protestations as to the necessity for dealing with the monetary system. Because they have promised action when the time may come, because they put something positive in their promise through their action and vote at that time, because their regrets carry with them the promise of something positive and some future action, and because of the saving remnant in the Liberal party who see as we see, who understand that we cannot conquer present difficulties, that we cannot conquer vast and complex problems with old-time worn out methods-because of all those things, for those who think as I do and for myself may I say that we shall give them the benefit of the doubt and shall support their amendment.


Milton Neil Campbell: I was paired with the
hon. member for Mount Royal (Mr. White).	
Had I voted I would have voted for the	
amendment.


Alfred Speakman: I was paired with the
hen. member for	Brome-Missisquoi (Mr. Piekel). Had I voted I would have voted for	
the amendment.


Mr. LUCAS:: I was paired with the hon.	
member for Yale (Mr. Stirling). Had I voted	
I would have voted	for the amendment.
Mr. MACKENZIE	1 KING: I was paired
with the right hon.	Prime Minister (Mr. Bennett). Had I voted I would have voted	
for the amendment.	
The Address-Pairs


Mr. VALLANCE:: I was paired with the
hen. member for Wentworth (Mr. Wilson). Had I voted I would have voted for the amendment.


Michael Luchkovich: I was paired with
the hon. member for Lanark (Mr. Thompson). Had I voted I would have voted for the amendment.


Frederick William Gershaw: I was paired with the
hon. member for London (Mr. White). Had I voted I would have voted for the amendment.


Abraham Albert Heaps: I was paired with the Minister of National Defence (Mr. Sutherland). Had I voted I would have voted for the amendment.


John Power Howden: I was paired with the hon. member for Marquette (Mr. Mullins). Had I voted I would have voted for the amendment.


Mr. STEWART (Edmonton):: I was paired with the Minister of the Interior (Mr. Murphy). Had I voted I would have voted for the amendment.


Mr. GARLAND (Carleton):: I was paired with the hGn. member for Russell (Mr. Goulet). Had I voted I would have voted against the amendment.


Jean-François Pouliot: I was paired with the hon. member for North York (Mr. Lennox). Had I voted I would have voted for the amendment.


Mr. EULER:: I was paired with the hon.
member for Moose Jaw (Mr. Beynon). Had I voted I would have voted for the amendment.
Mr. ST-PERE:	I was paired with the
hon. member for South Hastings (Mr. Tum-mon). Had I voted I would have voted for the amendment.


Mr. PERRAS (Translation):: I was paired with the hon. member for Stanstead (Mr. Hackett). Had I voted I would have voted for the amendment.


Mr. McKENZIE (Assiniboia):: I was paired with the hon. member for Durham (Mr. Bowen). Had I voted I would have voted for the amendment.


Mr. IIURTUBISE:: I was paired with the
hon. member for North Renfrew (Mr. Cot-nam). Had I voted I would have voted for the amendment.


Mr. MacMILLAN:: I was paired with the
hon. member for Vancouver Centre (Mr. Mackenzie). Had I voted I would have voted against the amendment.


Mr. EDWARDS:: I was paired with the
hon. member for West Middlesex (Mr. Elliott). Had I voted I would have voted against the amendment.


Mr. McDADE:: I was paired with the
hon. member for Laprairie-Napierville (Mr. Dupuis). Had I voted I would have voted against the amendment.


Alfred Burke Thompson: I was paired with the hon. member for Maison-neuve (Mr. Jean). Had I voted I would have voted against the amendment.


George Reginald Geary: I was paired with the hon.
member for Laurier-Outremont (Mr. Mer-cier). Had I voted I would have voted against the amendment.


William Earl Rowe: I was paired with the hon.
member for Beauce (Mr. Lacroix). Had I voted I would have voted against the amendment.


Pierre Édouard Blondin: The question now is on
the main motion.


Some hon. MEMBERS:: Carried.
Motion (Mr. Davies) agreed to on division.


Hugh Guthrie: That the address be engrossed and transmitted to His Excellency the Governor General by such members of the house as are of the honourable the Privy Council.


[Stage Direction]
Motion agreed to.
Hugh Guthrie: That this house will, on Monday next, resolve itself into a committee to consider of the supply to be granted to His Majesty.


[Stage Direction]
Motion agreed to.
On motion of Mr. Guthrie the house adjourned at 6.10 p.m.
Monday, November 7, 1932

Hon. W. A. GORDON (Minister of Labour) :: I desire to lay on the table several orders in council passed pursuant to the relief measures, all referring to the payment of money.


MONTREAL HARBOUR
[Stage Direction]
Hon. MAURICE DUPRE (Solicitor General) moved for leave to introduce Bill No. 10, to amend the Montreal Harbour Commissioners Act, 1894.

Questions as Orders for Returns
William Lyon Mackenzie King: Explain.


Maurice Dupré: By this bill the powers granted by paragraph (n) of section 26 of the Montreal Harbour Commissioners Act are extended. Paragraph (n) gave power to make by-laws for the regulation of all machinery and appliances used in loading and unloading vessels. With the amendment the Montreal harbour commissioners will have power to prescribe that no vessel shall enter the harbour or remain in it without permission of the commissioners, and power to levy a rate or sum of money thereon for the privilege of operating in the harbour and to regulate and control charges for such services.
Motion agreed to and bill read the first time.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. POULIOT:: 1.	To how many municipalities in Temiscouata county did the federal government grant direct relief since 1930?
2.	What amount was granted to each municipality?


Wesley Ashton Gordon: I would like to have this stand as an order for return. The information is quite voluminous and I shall table the return now.


ROYAL CANADIAN MOUNTED POLICE-PRINCE EDWARD ISLAND
Mr. MacLEAN:: 1.	What is the total cost of the Royal Canadian Mounted Police force, per month, in the province of Prince Edward Island?
2.	How many men are on this force at the present time in the said province?
3.	What agreement has been entered into with the province of Prince Edward Island regarding payment of the men in the Royal Canadian Mounted Police, who replaced the provincial police in that province?
4.	What is the full text of the agreement?
5.	What amount will the province of Prince Edward Island pay to the federal government, per man?


Hugh Guthrie: I would ask that this be made an order for return because it is rather voluminous, and I shall table the return now.


DIRECT RELIEF CONTRIBUTIONS
Mr. ROBERGE:: 1. What sum has the federal government disbursed as direct relief without the provinces or municipalities making any contribution, during the years 1930, 1931, 1932, in:	(a)
Ontario; (b) Manitoba:	(c) Saskatchewan;
(d) Alberta; (e) the Yukon Territory; (f) New Brunswick; (g) Nova Scotia; (h) Prince Edward Island; (i) Quebec?



TRADE AGENTS

[Stage Direction]
Mr. LaVERGNE:
1.	Who are Canada's trade agents?
2.	Where are their respective posts situated?
3.	When were they appointed?
4.	What is the salary of each agent?
5.	Do they rank as consuls?
Return tabled forthwith by Mr. Stevens. MOTIONS FOR PAPERS

[Stage Direction]
Mr. MeGIBBON moved:
For a copy of report made on the investigation conducted by Mr. H. McKenzie, inspector and investigator of the Canadian National Railways, at the instruction of Mr. Kingsland, general manager of the central region, from the 2nd to the 12th of February, 1932, concerning the activities and indiscretions of certain officers.
Hon. R. J. MANION (Minister of Railways) :: In regard to this matter, the government has no copy of any such report. It is an affair relating to the internal management of the railways and I do not think the house can pass an order requiring us to bring it down. We do not possess the report and therefore we cannot bring it down.


Pierre Édouard Blondin: Dropped.



E. J. F. SCOTT

Mr. MARCIL:: For a copy of the report and evidence taken at the inquiry held on charges made against E. J. F. Scott, the postmaster for Paspebiac West, county of Bonaventure, Quebec.



ST. PAUL, LOWER CARAQUET, WHARF

Mr. YENIOT:: For a copy of all paysheets for labour and material in connection with work done on wharf at St. Paul, Lower Caraquet, between June, 1931, and December, 1932.



TIED-DU-LAC, TEMISCOUATA, QUE., POSTMASTERSEIP

Jean-François Pouliot: For a copy of all correspondence, telegrams, reports and other documents in the possession and under the control of the government, relating to the position of postmaster at Pied-du-Lae, Temiscouata county, Quebec, since August, 1930.



NOTRE-DAME DU LAC, QUE., POSTMASTERSHIP

Jean-François Pouliot: For a copy of all correspondence, telegrams, petitions, reports, plans and other documents, in the possession of and under the control of the government, rvith respect to the appointment of the postmaster of Notre-Dame du Lac, Quebec, since March 2, 1932.

Penitentiaries



SULLY, QUE., POSTMASTERSHIP

Jean-François Pouliot: For a copy of all correspondence, letters, telegrams, reports and other documents, including the report of the chief inspector of the Post Office Department, in the possession of and under the control of the government, with respect to the appointment of the postmaster of Sully, Quebec, from February 10, 1932, to May 24, 1932.



TEMISCOUATA COUNTY POSTMASTERSHIPS

Jean-François Pouliot: For a copy of all correspondence, telegrams, reports and other documents exchanged between any person or persons and the Post Office Department, relative to the following postmasterships in the county of Temiscouata, Quebec:	(a) St. Eusebe de Cabano; (b)
Squattcek; (c) Le Petit Bois Franc, since the month of August, 1930, to date.



PETIT CAP, GASPE, WHARF

Mr. BRASSET:: For a copy of the paysheets showing the amount paid to each labourer engaged in works performed at the wharf of Petit Cap, in the county of Gaspe, since August 1, 1930, to date, also a statement showing the amounts paid for timber, iron and other materials used in the above works along with the names of the person or persons to whom such payments were made.



AU RENARD RIVER, GASPE, PUBLIC WORKS

Maurice Brasset: For a copy of the paysheets showing the days worked and amounts paid to each employee, in connection with works performed by the Department of Public Works at the mouth of Au Renard river, county of Gaspe, also a statement showing the amounts paid for timber, iron and other materials used in the above works.



SOUTH RIVER LAKE, N.S., POSTMASTERSHIP

Mr. DUFF:: For a copy of all correspondence, including letters, telegrams, memorandums and other documents, exchanged between the Postmaster General or any of his officials and any person or persons in the province of Nova Scotia, relative to an investigation held concerning the postmaster at South River lake, Antigonish county, Nova Scotia, and the dismissal of John A. McNeil from said position; also copy of the evidence, if any, in said hearing, as well as the report of N. D. Murray, commissioner appointed to investigate the conduct of said John A. McNeil.



PENITENTIARIES


[Stage Direction]
On the orders of the day:
Edward Joseph Garland: May I ask the government whether it has considered

the holding of a public investigation as to the causes underlying the riots in the Kingston and St. Vincent de Paul penitentiaries?


Hugh Guthrie: The question of holding an investigation other than the one which is now taking place at each institution will be decided after authority has been vindicated and order restored. There is an investigation proceeding at each institution now, in the Kingston case by the superintendent of penitentiaries and in the St. Vincent de Paul case by the warden himself. As soon as these are completed, we shall consider the question of my hon. friend.


Edward Joseph Garland: Is it true that there is grave overcrowding in both penitentiaries?


Hugh Guthrie: There was and is now overcrowding at Kingston, but I believe while there is still overcrowding at St. Vincent de Paul, every prisoner is accommodated in a separate cell. In Kingston we have not enough cells for the number of prisoners. The number in the penitentiaries at the present time is abnormal. The penitentiary population of Canada was always considered at about 2,400 or 2,500. It is now in the neighbourhood of 4.500. Consequently our accommodation has been greatly taxed.



BARBED AVIRE DUTY

[Stage Direction]
On the orders of the day:
Mr. II. E. SPENCER (Battle River):
I should like to'ask a question of the Minister of National Revenue, and to make my question understandable, I will read part of a telegram received from Leit-Murray and Company, Limited, of Vancouver:
Practically all barbed wire recently used in Alberta and western Saskatchewan comes from Holland manufacturer whom we represent and is sold by prairie wholesalers very cheap whereby farmers greatly benefit. Ottawa admits material not being dumped but has established arbitrary valuation whereby dump duty of 28 per cent ivould be applicable.
As we have an ad valorem duty of only 10 per cent on barbed wire, I should like to ask whether it is the intention of the government to remove this dumping duty of 28 per cent which naturally has the effect of raising the price of barbed wire.
Hon. E. B. RYCKMAN (Minister of National Revenue):: I cannot at all agree with the statement that Ottawa admits that there is no dumping of barbed wire. On the contrary, the Department of National Revenue is satisfied that there is dumping by a German

Trade Agreement
concern which ships into Holland in order to fix a low price and then reconsigns to Canada. The matter is under consideration at the present time, and I shall be glad to advise my hon. friend when a definite decision has been reached. I repeat that the friends who telegraphed my hon. friend are altogether incorrect in their statement that there is no dumping of barbed wire, because there is.



FARM RELIEF-SASKATCHEWAN

[Stage Direction]
On the orders of the day:
Mr. T. F. DONNELLY (Willow Bunch):: I should like to ask the Prime Minister when I may expect an answer to the question I asked him before the orders of the day on October 27 last.


Richard Bedford Bennett: I am sorry that I entirely forgot
it. I will look it up.



TRADE AGREEMENT


[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: The right hon. leader of the opposition on Friday last, at page 848 of Hansard, asked me a question, and in reply I desire to say, first, not having the context before me, I do not think it is desirable to make any answer to the question. In the second place, it would be improper for me to do so inasmuch as it affects the other dominions as well as this, and any construction I might place on any word might be at variance with that which might be placed upon it by the governments of the other dominions. I think that in the progress of the recent discussion it was made abundantly clear what was the position of this country and what our legal rights are, and so far as I have been able to see there has not been anything said by the government in Great Britain which, taken with its context, means other than what has been said in this house by the government.


William Lyon Mackenzie King: Apart altogether from the context, may I ask the Prime Minister this question? If a statement were made in the British house to the effect that the rates of duty substituted by the Anglo-Canadian pact for existing Canadian duties could not be altered within the next five years except to a limited degree specified in the agreement, or if that statement were made in this house or anywhere else, would it be correct?


Richard Bedford Bennett: The statement that we
had entered into a contract for a period of five years within the terms of the contract would be correct. We have made a contract for five years, and the terms are set forth in the agreement, and when they have been ratified they are binding upon this country.


William Lyon Mackenzie King: I am afraid
my right hon. friend is evading the question.


Richard Bedford Bennett: No. I do not intend to
answer it.


William Lyon Mackenzie King: May I ask my right hon. friend specifically whether this parliament has not the right to alter, within the next five years, any duties that may happen to be included in the agreement?


Richard Bedford Bennett: I made it perfectly clear
the other day, and I desire to repeat, lest there be any misunderstanding, that the power of this parliament is unlimited. Its honour is bound. Whether the right hon. gentleman would carry into effect the threat he made the other day, that if he was in power he would change these agreements, is not for me to say, but so far as we can in honour we have bound this parliament for a term of years and on the terms mentioned.


William Lyon Mackenzie King: I want to take exception to my right hon. friend's statement that I have made any threat. I have made no threat of any kind. I want to make it clear, however, that the Liberal party will not regard itself as in honour bound to maintain any policies of hon. gentlemen opposite which are diametrically opposed to those of the party.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day.
Richard Bedford Bennett: I think it well to direct the attention
of the house to the fact that on Friday next, Remembrance day, the house will not be in session, and I shall give notice to that effect.
I should be glad to accommodate the convenience of hon. gentlemen opposite in the conduct of the public business remaining as set forth on pages 10 and 11 of the order paper. There is only one other bill, so far as I know, that is not on the order paper, dealing with the administrative changes that I mentioned in the earlier part of the session in the Income Tax Act. A bill has been drafted and redrafted on several occasions, but some further slight changes have to be made to
Trade Agreement

conform to what the officers of the department think may be necessary for the proper administration of the statute. It rests entirely with hon. gentlemen opposite what time may be taken up before we place upon the order paper the motion for the adjournment of the house. But the house will not sit on Friday.


William Lyon Mackenzie King: I believe business would be expedited if the house as soon as possible were to go into committee of ways and means to consider the proposed changes in the tariff which have been placed before the house.


Richard Bedford Bennett: I propose to proceed first with the first reading of the bill based upon the resolution passed the other evening respecting a certain trade agreement between His Majesty's government in Canada and His Majesty's government in the United Kingdom, and probably the second reading as well. I can give the reasons now or later, just as the hon. gentleman prefers.


William Lyon Mackenzie King: The right hon. gentleman might give them now.


Richard Bedford Bennett: The agreement entered
into at Ottawa between the representatives of the United Kingdom and the representatives of the government of Canada sets forth in schedule E certain changes which are to be made in our tariff. The changes were not set out in detail, but simply with relation to the items that would be affected by them. Hence it was that when the Australian Trade Agreement Act was introduced on June 23, 1925, it was then read the first and second times, considered in committee, reported without amendment, read a third time and passed- all on the same day; no reference, of course, being made to the ways and means committee.
The French Convention Act of 1923 dealt with a very large number of items, but no more in point of fact than does the trade agreement here, if you total the items of both the French and the Canadian tariffs. That bill was introduced on February 20, 1923, and was then read a first time. It was read a second time on April 26, 1923, and then referred to the committee of the whole, from which it was reported without amendment on April 30. It was read a third time on May 1, 1923, and passed, and there was no reference to the committee of ways and means. The trade Convention Act between Canada and Finland was introduced upon a resolution and read a first time on May 14, 1925. It was read a second time, referred to the committee of the whole and reported without amendment on May 18,

1925. It was read a third time on May 19. 1925.	'
The Italian Convention Act was introduced on May 2, 1923, was then read a first and second time, referred to the committee of the whole, reported without amendment, and ordered for third reading at the next sitting of the house. It was read a third time on May 14, 1923, without reference to the committee of ways and means.
Had it not been for the fact that it was imperative that the items mentioned in schedule E should be put in form agreeable to the nomenclature in our tariffs and that some items which were rather cumbersome should be split into several items, it would not have been essential to refer the matter to the committee of ways and means; but in view of that fact, and the further fact that these tariffs are substituted for British preferential tariffs in the tariff schedules of the country, it was thought desirable to refer the matter to the committee of ways and means. The agreement ratifies and confirms the agreement as entered into, and the schedules referred to the ways and means committee are schedules that give effect in detail to the provisions of schedule E. Under those circumstances we propose to proceed with the ratification of the agreement by enacting a statute in form similar to that which was used in the ratification of the agreement with Australia in 1923 and of the agreements with Italy, France and Finland, and then proceed further with the changes to the tariff legislation that are brought about by reason of the ratification of the agreement.


William Lyon Mackenzie King: I understand
from what my right hon. friend says that he does not propose to allow us to discuss the proposed tariff changes until we have approved the agreement. That is what it comes to, is it not?


Richard Bedford Bennett: It is proposed to proceed as was done by my right hon. friend when he was on the treasury benches, namely, ratify the agreement by the vote of this parliament, based upon the resolution, and then proceed with the tariff changes as I indicated for the reasons I have given. I could amplify them, but they must be apparent to every member.
I would hardly think that the right hon. gentleman seriously meant that there would be any effort on the part of the government to preclude discussion. After having listened to or having read, at least, what has transpired for three weeks, I do not think it can be said that there has been any disposition on the part of the government to limit discussion writh respect to anything.

Income War Tax Act


William Lyon Mackenzie King: I do not wish
to appear to be debating any subject with my right hon. friend, but he asked at the outset as to what would facilitate the business of the house. I understand that these several measures contemplate changes in the tariff, that they are inter-related, also that question will arise as to the significance of the changes on each of the separate measures.
I believe we would finish more quickly if we discussed the tariff changes in the first instance, so that we may have a better understanding as to what is really involved by each and all of the several agreements. There would be very little time taken up in debating the different measures if we once understood what the tariff changes involved amount to. I do submit, however, that if we are asked by approval of the agreements in advance to make tariff changes without knowing their significance we are being asked to take an almost impossible position, and one which I am afraid will prolong discussion very much.


Richard Bedford Bennett: The house is being asked to do exactly what the right hon. gentleman did when he was leader. There is this exception, however, that we are affording the house an opportunity for detailed discussion of every item in the ways and means committee, so far as the United Kingdom tariff is concerned-an opportunity which was not afforded heretofore. I think the right hon. gentleman will agree that if he were in my place he would certainly desire that the legislation which gives the warrant for the ways and means committee to sit should be enacted, so far as the house is concerned, to the point where it is ready for third reading before the discussion in ways and means committee takes place. It must be apparent to every hon. member that, except by consent of the United Kingdom government, we cannot change, modify or amend the agreement as it stands. There are one or two items in connection with which there are slight changes which I propose to make known to the house on the first reading of the bill.



INCOME WAR TAX ACT

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into oommittee to consider the following proposed resolution:
That it is expedient to amend the Income War Tax Act and to provide,-
1.	That ministers, commissioners, officers, servants and employees of the government resident outside of Canada be made liable for income tax.
2.	That when the assets or shares of a company, having on hand undistributed income at
the end of 1929, are sold directly or through an intermediary to a company, which company issues shares, bonds, notes or other like documents as fully paid up by capitalizing the said undistributed income, then on the redemption of such documents the company redeeming shall pay a tax of four per centum on the amount of such document redeemed.
3.	That the time of filing information returns be advanced from March 31st to the last day of February in each year.
4.	That the provisions of the said act with respect to personal corporation be amended to make them more certain in their application.
William Lyon Mackenzie King: Mr. Speaker,
the resolution is fairly clear with the exception of paragraphs 2 and 4. Possibly the minister would give some explanation.


Edgar Nelson Rhodes: Would it not be better
to give the explanation in committee?


William Lyon Mackenzie King: It might be
better to give it immediately, unless the minister is not prepared.


Edgar Nelson Rhodes: Unless the right hon.
gentleman objects I believe the discussion might better be had in committee.


William Lyon Mackenzie King: All right.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.


Edgar Nelson Rhodes: Mr. Chairman, the first
clause in the resolution is necessitated by the fact that while it has hitherto been the intention that the salaries of ministers, as such, should not be subject to income tax, the position has heretofore been taken that ministers and others designated in this paragraph have not been residents of Canada, but of other countries. The result has been that they have escaped the payment of income tax upon their personal incomes apart from their salaries. The purpose of this amendment is to make it clear that their incomes shall be taxable, as if they were residents of Canada.


William Daum Euler: Mr. Chairman, are these
employees of the government subject to the income taxes of the countries in which they reside? And, the further question: Are the public servants of other countries resident in Canada subject to Canadian income tax?


Edgar Nelson Rhodes: In most instances, Mr. Chairman, it has been a matter of mutual arrangement. We, in Canada, do not tax representatives of foreign countries upon their salaries.


William Daum Euler: It would not be fair to tax
them twice.
Income War Tax Act


Edgar Nelson Rhodes: No. With respect to the
second paragraph, probably I would do well to defer explanation until we have reached committee stage on the bill. I may say, however, that the necessity for this legislation arises through a series of technicalities, a court interpretation, and amendments to the Income War Tax Act. Perhaps I might say in connection with paragraph 2-and the same statement would apply to the whole bill-that the amendments are entirely in keeping with the original intention of the act, and tend simply to remove existing doubts.
The third paragraph is self-explanatory. Then, as to the fourth there is an endeavour to make clear the original intention of the act. The purpose of the clause is to make sure that incomes from personal corporations shall be fully taxed in Canada. It has transpired that such corporations have been set up outside of Canada, although managed within Canada. The result has been that in many instances we have not received income tax from those personal corporations. The act will provide, if the suggested amendment becomes law, that hereafter notwithstanding the fact that the personal corporation is outside of Canada, the individual in Canada shall be subject to the provisions of the Canadian income tax legislation.


William Thomas Lucas: Is the minister making provision for the taxing of bearer bonds? I think I dealt with that matter last year when another resolution was before the house.


Edgar Nelson Rhodes: The hon. member will see
that there is a resolution upon the order paper with respect to that very subject. I would not care to make an announcement now, but there will be an announcement before the session is concluded which I trust will be satisfactory.


Jean-François Pouliot: In this section of the
house it is difficult at times to hear what is being said on the opposite side. I understand that paragraph 1 of the resolution provides that ministers, commissioners, officers, servants and employees of the government resident outside of Canada shall be made liable for income tax. I believe they are already subject to the income taxes obtaining in the countries in which they live. In that event they -would be paying an income tax not only to outside governments, but to the government in Canada. IV ill the tax they pay to foreign governments be subtracted from their salaries, and if so will they be required to pay Canadian income tax in accordance with
[Mr. Euler.l
their salaries, less the amount they pay in taxes to the countries in which they live, or, will they be taxed upon their whole salaries?


Edgar Nelson Rhodes: Mr. Chairman, my hon.
friend from Temiscouata (Mr. Pouliot), I think did not hear the explanation I made a moment ago. It was to the effect that the act proposes that we shall tax the income of those individuals apart from their salaries, and that income apart from their salaries is not taxable in other countries.


Mr. QUINN:: I am led to believe that
there are quite a number drawing substantial pensions from this government. I want to suggest to the minister that they might also come under the provisions of this act.
Resolution reported, read the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 11, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.



CANADA GRAIN ACT AMENDMENT


[Stage Direction]
Hon. II. II. STEVENS (Minister of Trade and Commerce) moved the second reading of Bill No. 9, to amend the Canada Grain Act. (Domestic grain).
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
Thomas F. Donnelly: I would like to ask the minister what the charges are now and what they have been during the past two or three years. We all know that the farmer today is getting a very small price for his grain. It seems to me that under present conditions the charges for cleaning and inspection and weighing should be reduced in order that the load on the farmer may be lessened somewhat. Under present conditions the charges seem very unfair. Elevation, for example, used to cost 1 cent a bushel, now some of our country elevators are charging 2i cents. It is time these charges were brought down to where they were when the price of wheat was somewhat nearer what it is at the present time.


Henry Herbert Stevens: Precisely what my hon.
friend desires is what this bill empowers the board of grain commissioners to do. Under the Canada Grain Act, once a year the board of grain commissioners meet and fix fees for the ensuing year. They hold hearings throughout the country, and anyone who has any grievance may come before the board and

Canada Grain Act
express his views. Advantage is sometimes taken of this opportunity. The practice hitherto has been to fix the rates at a time just prior to the movement of the new crop, usually during the month of August. This practice was followed this year; no protests were filed with the board, no complaints made with the exception of one individual complaint, as to the rates charged by the elevators. But the government, reviewing the situation, realized that owing to the fall in the value of grains, wheat particularly, the charges for storage entailed a somewhat heavy percentage of the value of the grain. The storage rate at present is 1/30 of a cent a day, one cent a month. 1 am not desirous today of stating dogmatically what the new rate will be, but we are providing in this bill power for the board of grain commissioners to vary the charge, the intention being that the charge will be reduced to a point considered reasonable in the light of all the facts now prevalent. I would say it will likely be a very substantial reduction in the storage charges.
The bill is a very simple one, I do not think there is any need to go into an exhaustive discussion about matters that might be relevant but not profitable to discuss now. That is the simple point in the bill, that section 134 should ibe amended to permit the board of grain commissioners, by regulation or by action of the board, to reduce rates between the times at present fixed by statute.


Thomas F. Donnelly: Do you include inspection and weighing?


Henry Herbert Stevens: Inspection and weighing will also come under review if the bill passes. All charges.


Thomas F. Donnelly: IC does not mention inspection and weighing.


Henry Herbert Stevens: All charges. The word "handling" covers the whole business.


Charles A. Stewart: Is not the minister putting in the hands of the grain commission complete authority and control over charges to be levied on grain?


Henry Herbert Stevens: No more than they have at present-let us be perfectly clear on that -except in one respect. Hitherto, under section 134, such action by the board could be taken only once a year, and the fees having been fixed the board could not make any change except subject to some other paragraphs in the act. The only object we have in view is this: During this time of stress the board is precluded from taking any action and we want to empower them to take action.
I may say there is a very general willingness and desire, lam informed today, on the part of the elevator companies to conform to any reasonable action of the board. In fact it is possible they may take action even before this bill is passed. I am certain that there is a willingness and desire to meet this situation and all who are interested in lessening the burden of costs upon this commodity will welcome this privilege being given to the board of grain commissioners at this time.


James Malcolm: I would like to make an observation. The minister speaks of this being a very simple change. It is, but in my opinion it is a very dangerous change. My reason for saying that is that while the power given the board may in this particular instance be for the most laudable of objects, it also makes it possible for the board to raise rates between seasons, after the whole question of rate charges has been argued out at the first sitting. This might not be nearly so laudable as the object which the minister presents at this time.
I think the minister might also explain to the house, in introducing this bill, just what reason there is for reducing storage charges at the present time; whether or not the government is supporting the idea of holding wheat, and whether the government has been supporting the wheat market by carrying big stocks of wheat in the hands of the pool. There is no doubt that the American farm loan board experienced a very serious loss by holding wheat. It is quite possible that the attempt to steady the wheat market may mean a very serious loss to the pool, and if storage charges are to be lowered to the point where they become infinitesimal they may be also wiped out by this change. On the other hand, at some future time when it \\ ould be to the interests of the elevator companies to raise charges, they could be raised.
I am going to say to my hon. friend the minister that I have not the slightest objection to giving the board power at present to lower rates or handling charges or anything else, but I do not want to subscribe to a bill which gives them the broad power to raise rates, it they see fit to do so, after the crop season is open and the farmers know what rates they expect to pay during the ensuing year. I think the minister is putting a lot of power into the hands of the board for what at the moment may seem desirable.


Jean-François Pouliot: This bill contains a provision with regard to the storage of wheat. We find that in the elevators we have wheat
Canada Grain Act

that has been stored for many years, and I have been told that the elevators will not be able to store the crop this year. Therefore I take the liberty of suggesting to the government that when navigation closes some ships should be chartered in order to provide sufficient storage this year. Then I should like to ask the minister what amounts have oeen guaranteed by the government to the pool for wheat purchases during the last two years.


Henry Herbert Stevens: My hon. friend has raised a point in connection with the storage of wheat. I presume it is quite true that if we tried to put all the wheat in Canada into storage at the present time our facilities would be taxed beyond their capacity, but I believe there is reasonably ample storage. There will be no trouble in that connection, I am confident. With regard to the use of vessels for storage purposes, that has been the practice for as long as I can remember, at least for thirty years. When the freeze-up comes in the east vessels are used for winter storage; that is a very common trade practice. I may reassure my hon. friend; I do not anticipate any difficulty in handling the grain that may come forward. There always have been and always will be periods of congestion during the handling of our grain crop, but when pressure becomes too heavy at one point it usually finds an outlet elsewhere.
In connection with the last question of the hon. gentleman, Mr. Chairman, I think it would be inadvisable to wander very far afield in this discussion. When the grain estimates are up 1 will be happy indeed to go into all phases of the grain trade, but I am pressing this bill now, in this emergent session, because I consider the purpose for which the bill is introduced as an emergent demand. I ask the house to simply receive the bill in its very simple form and pass it or otherwise as the case may be.
I can assure my hon. friend from North Bruce (Mr. Malcolm) that I have no anxiety along the lines he has mentioned. We are not enlarging the powers of the board; we are merely saying that instead of those pow'ers being limited, as they are under this section, to one period of the year when the fees can be fixed, the board may exercise those same powers during other parts of the year if they find it necessary to do so. The Canada Grain Act is a well established act that has been administered by various commissions, very successfully and very satisfactorily, for many years. I do not think the powers given the board have been abused.

The commission exercises these powers under well established practices and rules, and I think a careful perusal of the act will show that at almost every point there are safeguards in regard to these matters. The board is not going to act recklessly under these enlarged powers, and I submit to the house that at this time it is highly desirable that the board should be released from this restriction in order that we may give some relief to the western farmer in connection with storage charges, in the movement of this crop which is being sold at such low commodity prices.


John Vallance: I have every sympathy with the intention of this bill, but I should like to point out to the minister that the relief to the western farmer will be almost negligible. I have not the grain act before me, and I know the minister has a copy under his hand. I should like to ask the minister if, instead of leaving the board with an absolutely free hand in this connection, he might consider it desirable to include in this bill a limitation as to the maximum charge?


Henry Herbert Stevens: So far as I am concerned I am quite willing to limit this bill to reductions only.


James Malcolm: If the minister would change the wording to read "shall not be reduced during any crop year except by order of the board," I think he would cover the point. Then it could not be increased.


Charles A. Stewart: I do not take objection on that score, but let us assume that next week the board passes an order reducing these charges. How many farmers in western Canada will profit by that action? Almost seventy-five per cent of the farmers have sold their wheat.


Henry Herbert Stevens: No.


Charles A. Stewart: I beg my hon. friend's pardon; I think if he will make a careful estimate he will find that I am correct. Therein lies the chief virtue of having the price fixed before the crop movement commences; the farmer then gets some benefit from the fixation of the handling charges. I can tell my hon. friend that he is not going to help the farmer very much by any reduction at the present time, or in the middle of any crop movement. By that time the farmer has disposed of his crop, and it is in the hands of the trade. That is one reason why I take exception to the bill. I do not object to the board having the right to increase or

Canada Grain Act
decrease the charges, but the old method of fixing charges prior to the movement of the crop certainly ensures to the farmer his share of any reduction that may be made.


Edward James Young: Could the minister tell us how much grain is in storage at the present time ?


Henry Herbert Stevens: I could not tell my hon. friend offhand, but I know there is a very considerable quantity. I must speak without any authority before me, but I would say there is probably 130,000,000 bushels in storage.


John Vallance: Would the minister consider the suggested amendment?


Henry Herbert Stevens: Yes, but frankly I think it would be a little difficult to draft it in connection with this clause. If we take up an amendment of that kind I am afraid we will have to take up the act as it relates to the fixation of charges. I chose this method because it is simpler. I can assure the house that there is only one object in bringing forward this bill, and that is the object I have stated. My hon. friend from West Edmonton suggests that the farmers would receive no benefit this year. I am strongly advised that this is not so, because a very substantial portion of this year's crop has not yet reached the elevators. I think anyone from the west will agree with that statement, though certainly some of the crop has gone forward. I have been considering this question for only a short time, and I wished to act quickly in order to give at least the maximum benefit to the farmers this year.


James Malcolm: Could the minister tell us about what reduction he proposes in the storage rate?


Henry Herbert Stevens: I have no objection to saying what is my view; I would say %5 instead of %o. Of course that is in the hands of the board; I am not going to dictate to them, but since my hon. friend has asked me I will tell him frankly what is my view.


Thomas F. Donnelly: What charge does the
minister propose to make with respect to inspection and weighing? Most of the farmers' grain at the present time has been inspected and weighed and paid for. The grain has passed into terminal or private elevators in the country, and most of it is in the hands of neither of these two; it is in the hands of the trade. This will not benefit the farmer. There is no doubt about that. With regard to grain that is going in, what reduction does the minister propose to make in connection with weighing and inspection, and so on all
the way through, so that some benefit may accrue to the farmer?


Henry Herbert Stevens: That question I am not
prepared to answer at the moment; it is a question that will have to be carefully considered by the board. The main point is the cost of storage. My hon. friend shakes his head. Well, I suggest that his statement that most of the grain is now in the hands of the dealers is not correct; it would be overstating it to say that half the crop is. I think figures could be produced to show that. But that is not worth haggling about. There is a substantial portion of the crop still in the hands of the original owners.


Charles A. Stewart: My hon.
friend does not suggest that 50 per cent is in the hands of the farmers, either in storage or in granaries.


Henry Herbert Stevens: I certainly do.


Some hon. MEMBERS:: Oh, oh.


Henry Herbert Stevens: I do not think I am very far out. I do not wish to bandy words with my hon. friends opposite with regard to this question. I am acting in good faith; I am not trying to put anything over.


Charles A. Stewart: Nobody is
suggesting that.


Henry Herbert Stevens: As regards the question
of inspection fees, weighing and handling charges and so forth, I am not prepared to give an expression of view today; I think it would be foolish for me to do so. It is a highly technical matter that requires a great deal of consideration. The board has the question under consideration at the moment, at my request, and will decide what, in their opinion, is the wisest course to follow in that respect. Under pressure I have given my views with regard to charges in storage, and I think they are reasonable in the light of the fall in commodity prices and the drop in the general cost of handling. I think we are justified in suggesting a figure of that kind, but it will be in the hands of the board to determine what ultimately shall be done.


John Vallance: Has the request for this bill come from the trade or from the commission itself, or from the department?


Henry Herbert Stevens: It has come from myself, has been opposed by the trade, and latterly has support from the farmers.


John Vallance: Then, in view of the
statement made by the minister, that it comes from him, I would point out that he has
sso
Canada Grain Act

included in the bill charges in connection with the cleaning, storage and handling of grain in any public terminal.


Henry Herbert Stevens: That is right.


John Vallance: He has it in the bill
and does not propose to discuss it. Why was it put in the bill? When the minister is sponsor and originator of it, surely he can give us the reasons.


Henry Herbert Stevens: That is scarcely a proper question; at least it is not stated in a proper form.


John Vallance: Why not?


Henry Herbert Stevens: I have not put it in the bill; it is in the act now. I do not wish to get irritated with my hon. friend, ibut, frankly, he is not fair. I did not put it in the bill, I repeat. The bill simply adds seven or eight words to a clause already in the act.


John Vallance: Yes.


Henry Herbert Stevens: Let us read it. The clause as it now stands reads:
Notwithstanding in this act, the tariff of charges made for cleaning, storage and handling of grain in any public or semi-public or terminal or eastern elevator shall not be subject to change during the crop year.
Two weeks ago I suggested to the board that a reduction in charges should be made, but they drew my attention to this provision and said they were sorry but they could not do anything. We studied the problem very carefully and it was suggested in this conference that the best way to deal with the matter was, instead of going into a revision of the sections of this bill with regard to inspection charges, that we should simply add these words to this clause, which would make it permissible for the board to deal with the matter. And now my hon. friend upbraids me because I have not come here-


John Vallance: I did not.
Mr. STEVEN'S: Yes, my hon. friend upbraids me because I have not come here prepared to discuss the technique, the fairness or otherwise, of handling charges and so forth. I have very fair views on these things, but I think it would be presumptuous of me to say to the house that handling charges should be this, that and the other, where we have our highly trained staff, an excellent commission to deal with the very subject. I repeat, this question will 'be in the hands of the board, in whom I have confidence, and I would remind my hon. friends opposite that the personnel of the board comprises gentlemen whom they themselves appointed.


John Vallance: We are not questioning that.


Henry Herbert Stevens: I have very great confidence in the chairman and in all the members of the board, and I am prepared to leave it to their judgment. As I have said, I have certain views on the question of storage, handling charges, weighing and so on, but these are matters upon which I prefer not to express my own opinion because my own opinion is not of sufficient authority, or ought not to be, to influence the house.


Edward James Young: If the grain trade are
opposing this legislation, one would naturally suppose that they do not own any of the wheat now held in storage. Can the minister give us an idea as to who does own it?


Henry Herbert Stevens: I can only say that my
hon. friend's guess is as good as mine. The grain in the storage, elevators is owned by the large grain companies such as Bungey. Dreyfus, Richardson and other companies, and the pools-three pools are operating now separately I think-own substantial quantities. There must be and always are substantial quantities of grain held in the various terminal elevators by individuals, farmers on a large scale and others who have merely carload lots, and also by small dealers. The grain is held now exactly as it has always been held. I can assure my hon. friend that there is nothing in the world behind this bill except the one thought in my own mind, which has been concerning me for several weeks, namely, the desire to lessen the burden of charge against the movement of grain, and I am hoping that the maximum result null go to the farmers. I am a little sorry, I confess frankly, that I had not the matter in my mind earlier. It had escaped my notice that when the board fixed the rate it was fixed for the whole season. That is a point that had not been in my mind. I may have been ?t fault; perhaps I should have been apprised of all the details. However, when I came to study the matter three weeks ago these difficulties presented themselves and this is the solution. I repeat, there is not a thing in my mind prompting this except the one desire to lessen the burden of charge on the movement of grain and, as I say, I trust that the maximum return will go to the owner of the grain, namely, the farmer.


Charles A. Stewart: I am not
taking exception to the amendment on the ground that it gives power either to increase or to reduce rates. I well remember the discussion on this very section when the grain

Canada Grain Act
8S1
act was lip for revision. It was contended that it would be very much in the interests of the producer to have the rates fixed at the beginning of the season. My hon. friend states that at least 50 per cent of the crop is out of the hands of the producer.


Henry Herbert Stevens: I did not say that. I
said I thought I was stating an excessive amount.


Charles A. Stewart: May I say
to my hon. friend that even if you take into consideration the subscribers to the pool, who, of course, would benefit by this-that I am willing to admit-even allowing for those producers who are a very considerable number in the western provinces, I have not any doubt that more than 50 per cent of this year's crop is now out of the hands of the producers who will not benefit one iota by this provision.


Mr. BOWMAN:: What about the other
50 per cent or even 35 or 40 per cent?


Charles A. Stewart: You can
take the other 50 per cent and divide it by two, and then you will have a generous division; that is to say, 25 per cent of it will be in the hands of the producers at the present time. Hon. gentlemen have a right to their opinion. I am giving mine and I say that the only exception I take to this change is that it is not made at a time when it will help the producer. If you are going to make the change, make it at the time when it will do the producer some good. It will not do him any good now. I have had my say and if the minister believes this is going to be beneficial, I withdraw my opposition.


Mr. LOUCKS:: For the benefit of the hon. member, the Cereal Grain Company distributed a circular just last week stating that 80 per cent of the wheat was still in the hands of the growers.


John Vallance: Might I suggest to the hon. member that the date of that letter is September 22. This is now November 7.


William John Loucks: I want to compliment the Minister of Trade and Commerce on bringing in this measure. The hon. member for South Battleford knows the practice in western Canada as well as I do and he should be willing to admit that we pool our wheat there. It has already been intimated by the Minister of Trade and Commerce that this costs us a certain amount per day. If there i3 still 50 per cent or even 30 or 25 per cent still with the growers, why should they hesitate
to take advantage of this change because they did not come in during the earlier part of the season? It will still benefit practically 50 per cent of the growers and so I congratulate the Minister of Trade and Commerce on introducing this provision.


James Malcolm: I do not want to delay the passage of this bill, but I should like to make a remark for the benefit of those members who have not been through quite as much discussion in connection with the revision of the Canada Grain Act as have some of us on this side of the house. The minister very properly says that he has every confidence in the board; so have I. The minister also says that his desire is to reduce the carrying charges on grain in storage. On that laudable object I want to compliment him. He says further that he is not prepared to discuss the details of carrying charges and so forth, and as to this I do not think he is wrong; the house cannot expect him to discuss the details. But he says we should be willing to discuss the principle and pass the bill. Let me say that no other point was more thoroughly debated and gone over than this very point when a committee of this parliament last revised the Grain Act. Members then in opposition, now sitting to the right of the Speaker, were insistent as were all members of the committee, that the whole business of handling grain, including the charges to be collected by the elevators, should be reviewed at the beginning of each crop year so that the charges could be based on a known factor. It was felt by the committee, as I recollect the matter, that it was a mistake to have rates changed at intermediate times to suit the need or exigency of some particular occasion that might arise. I can say quite frankly that such was the view of the committee and so power was left with the board, as the minister pointed out, at the beginning of the crop year to fix exactly what the elevators had a right to charge.
I want to point out this: to-day there seems to be a policy, with a low wheat market, to carry wheat. My personal view has always been that every time we have tried to carry wheat we have lost. Every year we have allowed our wheat to flow out on the markets of the world-and I am speaking not of todays' depressed market condition, but of other years-we have received the best crop prices we have ever received in the history of this country. There was a substantial opinion in this country that the pool could dictate prices to Europe. The pool, however, was unable to do so, and the American farm loan board



Canada Grain Act

could not do it by holding lip the movement of their surplus. When we are holding a large quantity of grain, as we are doing at the present time, there is no question that with elevators full, the elevators will not lose by a lowering of charges. A full elevator at the rate the minister suggests, will make money. I at present have no objection to the rate he suggests but when the situation is reversed, when the elevators are not full, when there is not much wheat in storage, what is to hinder operators from going to the board and saying: We cannot operate our elevators with only 10 per cent of our bins full; we must have a higher rate or we shall have to close up business and cease providing storage facilities? These matters were discussed in the committee as hon. members will remember and it was finally decided that the only time to revise these charges was at the beginning of the crop season.
The minister frankly says that he regrets he did not make this suggestion to the board about setting the rates at the right point at the right time and it is only because he is desirous of helping the situation that he wants this clause inserted. I want to make this suggestion to the minister. I am quite willing to admit that a benefit may accrue to the whole grain trade from lowering storage charges in the fall and winter of 1932-33, but I am not willing to admit that it is a good practice to change from the custom we have always followed, namely, of having the charges set at the beginning of the crop year. I am going to suggest to the minister that he make this bill operative for this year only, when an emergency exists, and that next year, when the charges are being set, he use his influence with the board to have them set at the correct figure. I see the present need of the suggested change; I am willing to support the bill, but after the experience we have had in revising the Canada Grain Act, due to criticism of the act, from many hon. gentlemen in the house, and after the care we took and thought we gave to the revision of this act, I do not want to see a principle, which members on both sides of the house approved and made permanent, changed although there may be need for such action this year.


Henry Herbert Stevens: The hon. member for
North Bruce has just intimated in his remarks that there was a good deal of controversy over this particular section when the act was revised. I would like him and the house to recall that the desirability of fixing a rate at a given time and making no change until the end of that crop year is entirely in the

interest and at the instance of the dealer, in order that the dealer who buys or sells grain for future delivery will know that his rate of storage in the interim will not be changed. It does not affect the producer at all.


James Malcolm: My hon. friend will
admit that it helps the farmer who puts grain into storage, and many have done so.


Henry Herbert Stevens: It does. My hon. friend has been arguing that no grain is in storage; that it is out of the hands of the farmer. That is just what I am arguing in regard to this bill, that it will help the farmer who has grain in hand now, but as regards the dealer who may have bought or sold grain for future delivery based on the old storage charges, it will vary the return on his investment. For that I am sorry, but I weighed the question very carefully and decided that the interest of the producer far outweighed that of the dealer who might have grain on hand or who might have sold futures or bought futures as the case might be. That was the reason I decided in that way.
Referring to my oversight in not drawing this to the attention of the board of grain commissioners at the end of the crop year, let me point out that it is the duty of the board to hear as it is the privilege of everyone interested, dealers, farmers, pool and so forth, to appear before the board and make their protests. No such protests were made, so I do not wish to leave the impression in the house that I was derelict in my duty in not bringing the matter to the attention of the board. When the matter became, as I thought, acute, the time had passed, and then I discovered the board were precluded from taking action by this particular section which we are now asking to correct.


Thomas F. Donnelly: I notice this refers
to storage in public, semi-public terminal or eastern elevators under section 134. What about the storage in our country elevators under section 119? Will this apply to them and will they have to charge the same?


Henry Herbert Stevens: My hon. friend must not confuse section 134 with the powers of sections 15 and 17. Under sections 15 and 17 and 83 the board is given power to act in connection with feed, and it was to avoid touching these three or four different sections that I sought to amend simply one section. The board will have full power and discretion in regard to all storage charges.


Thomas F. Donnelly: This simply says,
"public or semi-public terminal." It does not say anything about country elevators.


Excise Act


Henry Herbert Stevens: What I am asking is merely that the board shall not be precluded from making a change, which the present section 131 precludes them from doing.


George Gibson Coote: I think the minister should be congratulated upon bringing in this bill. I should not like to commit myself and say that the bill is perfect, but I think it does something that is very necessary.


James Malcolm: At the moment.


George Gibson Coote: Very necessary at the moment. I think some of the charges which are now levied for handling and storing, and particularly for cleaning, should be reduced now that the price of grain is as low as it is. As far as the present board is concerned, we can trust them to see that the charges are changed in the right direction. I am very glad indeed that the bill has been brought in.


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

[Stage Direction]
Hon. E. B. RYCKMAN (Minister of National Revenue) moved the second reading of Bill No. 7, to amend the Excise Act.
.Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1-Excise duties on spirits.
Edmond Baird Ryckman: This bill deals with the duties on spirits and cigarettes. The occasion for it is brought about by the agreement which was entered into with the United Kingdom. It will be noted from the schedule to the agreement that the customs duties on spirits were reduced from $10 right across the columns to $8 British preferential, making a reduction of $2 per gallon. Prior to any agreement with the United Kingdom, in fact, in the year 1930, I was waited upon by the distillers who pointed out that the excise duty, which was then $9 a gallon, was altogether too high. In 1931 they saw the department again and made the same representations. Those representations were repeated again this year before the conference was held. The customs duty having been reduced by $2 a gallon, it having stood at $10 when the excise tax was at S9 a gallon, it was thought upon consideration that the same ratio should be preserved and that the $9 excise duty should be reduced to S7. That is what the first page of this bill deals with. Frankly I am sorry to see that revenue go, but I think it will be in part made up by this fact, that we are hitting 53719-56^
the bootlegger $2 a gallon more, and his profits therefore will be $2 less. Our distillers support 25,000 people of our community. They cannot be said to be making huge profits, and it is only fair that when we make this reduction in the customs duty at the instance of the United Kingdom we should take compensatory action on behalf of those engaged in that business in this country.
Section 2 of the bill deals with allowances to be made to distillers when their product is stored. There is a slight change here, and it is being made now because it has been pressed for, and in my opinion there is reason for it. In the first place, you cannot expect, when spirits have evaporated, that the one who holds them should be called upon to pay the duty on spirits that have gone into the air, especially when he is not responsible therefor. There was an export sale for liquor in this country, especially rye and Bouibon whiskies, which were manufactured before the Export Liquor Act came into force, and now that the source of that sale has dried up, I do not think in all good conscience that we should tax evaporation. We set a standard below that of Great Britain, but in my opinion it is at least fair to the government that this change should be made.
The next and last item that the bill deals with is cigarettes. As the schedule will show, we made a change in the preferential tariff on cigarettes at the instance of representatives of the United Kingdom. That tariff was changed from $4.10 per pound and 25 per cent ad valorem to $3.50 per pound and 25 per cent ad valorem. It was thought necessary to strike a proper ratio, and it will be found, if ycu work it out, that in all cases the difference will be at least $2, depending upon whether three pounds or two and a half pounds of tobacco go into a thousand cigarettes. I believe this will not result in a great loss in revenue. In the first year there may be some loss, but I would hope that in the second year it would be made up. I believe the law of diminishing returns applies here. Due to the fact that cigarettes have been smuggled, and that many are rolling their own, the revenues from this commodity have fallen off. I believe members of the committee will be surprised to learn that 75 per cent of the fine cigarette tobacco manufactured goes into what was known as roll-your-own cigarettes. I believe that those who make their own cigarettes will :eel that they may purchase manufactured cigarettes at a reasonable cost. May I point out that all we get from that source will mean a gain of $3.40 a thousand in the amount collected by the Department of National
Excise Act

Revenue. I would hope that what might be a loss brought about by this deep cut in the tax on cigarettes will be made up at any early period through the plan suggested in the bill- cheaper cigarettes.
I can remember that my first experience in the house was in connection with the item of cigarettes. The late Mr. Fielding put a tax of 81.50 per thousand upon them and I stated that I thought the tax would result in a loss in revenue. Immediately following that he said that if such were the case the tax would be taken off. In the following year he came back and removed the tax. I now have hopes, as I told the committee, that it will work the other wayr. With our tobacco of the best quality', and our cigarettes as good as those of the United States, I believe that the private and professional bootleggers and smugglers will in a large measure be put out of business. I confidently ask the committee to support the bill. It is now brought before us because it arises through an arrangement we were asked to implement at the time of the Imperial economic conference.


The CHAIRMAN:: Perhaps I should read the titles of the different sections to be considered. First we have "Excise duties on spirits"; then, "Made from 90 per cent of unmalted grain or sugar." Then a paragraph headed "Made from malted grain." Then, last on the page "Made from molasses sy'rup, etc." Those all appear on the first page.


William Daum Euler: Mr. Chairman, I had intended to follow the example of the minister, and review briefly every clause in the bill. If we are now discussing only one clause I do not know whether or not I would be ruled out of order if I made some general statements.


Mr.   CHAIRMAN@: As the minister spoke
to the whole bill I believe the hon. member for North Waterloo (Mr. Euler), would be justified in following his example.


William Daum Euler: Concerning the reduction in
the excise on cigarettes I favour the action taken by the minister. In fact, I hazard the opinion that he has not gone quite far enough. When some y'ears ago I had the honour of being in charge of the Department of National revenue I thought that the tax cn cigarettes was too high, and that it defeated its own purpose. That condition was brought about chiefly because of smuggling. It did not stand to reason that smuggling would not take place when men or boys could go across the border and buy cigarettes at prices ranging from twelve to fifteen cents a package, whereas in Canada the prices would be two or three times as great. The same is and was true of tobacco.

I had hoped the minister would make some adjustment concerning this commodity. For some time in the United States tobacco has been selling for from ten to fifteen cents per tin whereas in Canada one must pay from thirty cents to thirty-five cents. I am not objecting to the minister obtaining revenue, but I am inclined to believe that he is defeating his own purpose. I have no doubt there will be a continuation of smuggling of cigarettes into Canada. The minister believes that revenue which otherwise he would lose will be compensated for by' the fact that smuggling will be diminished. I am inclined to think that the reduction now under consideration, one which will be passed on by' the manufacturers to the consumers, will hardly be sufficient to discourage either smuggling or the practice of "rolling your own." I am inclined to believe that the boys will continue to roll their cigarettes, and I should have been quite happy to support him had he seen fit to make a still greater reduction.
I now direct attention to the clause dealing with the compensation to distillers for evaporation in storage of whiskies or liquors. The only point which occurs to me is this: Allowance is made for a ten-y'ear period, and provision made in the bill for an increase to fifteen years. I cannot understand why allowance should not be made so long as the liquor is in stock, no matter what the period of time may be, and according to the evaporation which may' have taken place. That, however, is merely' by the way.
Concerning the duty' on whiskey and liquor, where formerly the importers paid a duty of 810 a gallon, and the excise on the Canadian product was $9, there is now a reduction to $9 and 87 respectively. Certainly' if the minister makes a reduction in the duty on the British article it would be only' fair to the Canadian distiller to offer a similar reduction. I should like to ask the minister, however, what loss he will suffer by way of revenue; I am wondering if he has made an estimate. If the importation of liquor remains constant he must of necessity sustain a very decided loss in revenue. That is a mathematical certainty, unless compensation is made through higher consumption of liquor. I should like to know the minister's opinion in this connection. Is he going to lose revenue and, if he cares to make an estimate, how much? On the other hand, does he think compensation will be made by higher consumption -something which I should rather dislike to see. What are the minister's views in these

Excise Act
matters? I am inclined to believe that he will hardly make up the revenue by interfering with the activities of the bootleggers.


Edmond Baird Ryckman: I am sorry to tell the
committee that we would expect, on the basis of the current business for the twelve month period, a drop in revenues of between $7,000,000 and 88,000.000. This is a change which has been made as a result of the trade agreements. The request was made and we acceded, in an effort to fulfil our part of the bargain. Through benefits from other arrangements I hope that in time any loss will be fully made up.


Charles A. Stewart: My hon. friend does not anticipate eight million dollars decrease?


Edmond Baird Ryckman: Between seven and eight million.


William Daum Euler: Do you think they will buy more Scotch liquor instead of Canadian?


Mr. BROWN:: The minister has indicated that this was a matter of representation by the British representatives at the conference and that they yielded to those representations. I only wish the government had yielded to some of the representations of other interests, for instance those representing the textile industry rather than the liquor manufacturers.
The minister has also indicated that there is likely to be a loss of revenue, which from the standpoint of revenue is serious. He has expressed his opinion also that it will interfere with the bootleggers. I do not think it will, to any degree at all. I have given some consideration to this matter of the customs duty and the excise duty on liquors, and I came to this conclusion long ago, that while I do not like being placed in the position of receiving revenue from the liquor traffic, either the government or parties, as we had some discussion about a few years ago, yet we are as it were on the horns of a dilemma; we have either to make liquor cheap and increase the consumption, or make it dear and decrease the consumption and incidentally get the revenue. So I have come to this conclusion, that the best thing for Canada to do is to make liquor as dear as possible, and that way decrease consumption. I am very sorry, as I have said already, that our government saw fit to yield to the representations of the whiskey manufacturers in Great Britain rather than those of the manufacturers of woollens and cotton, boots and shoes and other things that the people need and can use without doing harm to themselves. So I can only express my regret, apart altogether from the matter of loss of revenue, that the government has seen fit to reduce the customs duty from $10 to S8 and the excise duty from $9 to $7. We admit of course that, the one having been done, the other should be done, that naturally follows. Nevertheless I cannot but feel great regret that the government has seen fit to take this position. I would also express my belief that the expectation of limiting the activities of the bootleggers will be disappointed.
As far as the clause dealing with the question of evaporation is concerned, I suppose in principle it is fair, I am not disposed to go into details on that phase. But I do not think it is good for the men or the growing boys and girls of Canada that liquor should be made any more available to them than it is at present. If this action has any effect at all it will be to increase consumption rather than decrease it, and that it is a thing to be deplored.


Mr. GOTT:: If you gave it away nobody would want it.


An hon. MEMBER:: Try it and see.


Thomas F. Donnelly: I would like to ask the minister if he has any assurance from the distillers that this reduction of excise tax will be passed on to the consumer?


Edmond Baird Ryckman: I would expect that result, without the necessity of agreement. I have heard it said that they could not possibly charge more than it was worth.


William Daum Euler: I would like to ask the
minister whether they considered the question from the point of view of the protectionist? The British distiller, in asking that the duty be reduced, certainly hoped thereby to increase his sales to Canada, and thereby reduce the sales of the Canadian manufacturer. How does the Canadian manufacturer like that?


Edmond Baird Ryckman: The importations from
Great Britain, as my hon. friend knows, are large. This was asked-we did not go to the distillers themselves, but the United Kingdom representatives asked that this be done- and it was done.


William Daum Euler: Hoping to get more business.


Edmond Baird Ryckman: It was thought to be in the interests of Canada, and it was done.


William Lyon Mackenzie King: I understood
the Minister of National Revenue (Mr. Excise Act

Ryckman) to say that he expects to lose about eight million dollars by the reduction of the duties on liquor and cigarettes as provided for in the Canada-United Kingdom agreement. Would the minister tell us if there are any other commodities under the agreement on which there is to be a reduction of duties, and with respect to which his department will likely lose any amount of revenue comparable to the amount it is losing on whisky and cigarettes?


Edmond Baird Ryckman: Mr. Chairman, I think
the right lion, leader of the opposition is not quite correct in quoting me, I think it is even worse, that this loss of between seven and eight million dollars will fall on the spirits alone, not on spirits and cigarettes. The fact is, as the committee knows, that the heaviest taxed industries in Canada are the distillers, the brewers and the manufacturers of tobacco. They pay millions, it runs in my
mind that one tobacco concern pays in the neighbourhood of $28,000,000 in taxes. Naturally then, when we start losing revenue with these major taxpayers it runs into large figures very quickly. I do not recall any commodity that is in any sense as important from the revenue point of view, that will mean loss in revenue by reason of the agreement entered into.


William Daum Euler: May I ask the ministerperhaps he has not the information here- what has been the amount of duty collected on importations of liquor per year?


Edmond Baird Ryckman: Mr. Chairman, I happen to have that information. This is a list of the imports of alcoholic beverages from the United Kingdom which entered for consumption in Canada, with import duties collected, during the fiscal years ended March 31, 1929, to 1932:
Ale, Beer, Porter
Gallons
1929		   199,704
1930		 209,803
1931		 191,567
1932		 155,270
Value

Duty
collected

Distilled Liquors
Proof
gallons
1929		 1,934,302
1930		 1,792,887
1931		 1,412,258
1932		 1,028,786
Value

Duty
collected

So it will be seen that from 1929 to 1931 there was a drop of over $8,000,000 in the duty collected on distilled liquors. Now I will give the figures in connection with wines:
Duty
Gallons Value collected
1929	
25,695	$175,619	$35,3811930	
39,252	247,657	38,3631931	
37,236	205,744	30,4961932	
43,477	216,241	30,111


William Daum Euler: Could the minister give me
the total amount of duty collected in the last year? That is what I am trying to get at.


Edmond Baird Ryckman: The total would be obtained by adding together $65,213, $10,015,951 and $30,111.


William Daum Euler: The point I was trying to
make was this: I understood that the duty on liquors alone was over $10,000,000 in the last year. Now the rate is reduced from $10 to S8 per gallon, a reduction of 20 per cent, which would mean a reduction of only about $2,000,000 in revenue instead of the $8,000,000 predicted by the minister.


Edmond Baird Ryckman: But we must take into
account the fact that wre are also reducing the excise tax from $9 to $7.


William Daum Euler: What is the consumption
there?


Edmond Baird Ryckman: I only have the total,
which is about $7,800,000, on the basis of the revenue collected this year.


Mr. ROBINSON:: I should like to suggest to the minister that if we repealed the act prohibiting the export of liquor to prohibition countries we would have about $15,000,000 a year to make up for our losses in this regard. In the last four years we have lost $60,000,000 in revenue, for which we have received no thanks. At present there is a spread of about $1 between the British distiller and the Canadian distiller. The Canadian distiller has a municipal business tax of 150 per cent over and above the assessed value of his plant, which amounts to about $1 per case on the output of the plants. [DOT]
The British distiller has several other advantages over our manufacturers. They do

Excise Act
not have to carry losses in warehousing, vat-ting, blending, reducing and bottling. The allowance to British distillers while in warehouse continues as long as the liquors are kept in bond, 'but there is a limit on the allowance to Canadian distillers. At the present time Canadian distillers have their warehouses filled with goods, some of which will be held for twenty years. I think it only fair that they be allowed the evaporation, as the minister suggests. The British distiller also gets 3d. a gallon on the liquor he exports, while the Canadian distiller has bo pay 3 cents a pound on the malt used in distilling.
I do not agree with the hon. member for Lisgar (Mr. Brown) that the 'higher you keep the price of liquor the lower will be the consumption. I think on the other hand it will increase bootlegging and be an additional incentive to the making of home brew.
Section 1 agreed to.
Section 2 agreed to.
On section 3-Duties on cigarettes.


Eccles James Gott: I am not interested in liquor, Mr. Chairman, but I am vitally concerned in the tax on tobacco. The tobacco industry in Canada is the most highly taxed industry in the country, paying approximately $46,000,000 to the federal treasury each year. I should like to ask the minister if he would accept an amendment to this section, because I believe this government is ready and willing to do whatever it can for the fanner.


Some hon. MEMBERS:: Oh, oh.


Eccles James Gott: A foolish fellow always laughs when he has nothing on his mind. The situation in the tobacco areas of western Ontario is deplorable. Section 3 reads:
(f) on cigarettes made from raw leaf tobacco or any substitute therefor, weighing not more than three pounds per thousand, four dollars per thousand.
I suggest to the minister that this be amended to read as follows:
(f) on cigarettes made from raw leaf tobacco grown and processed in Canada, weighing not more than three pounds per thousand, four dollars per thousand.
I might explain to the hon. gentlemen opposite who laughed a moment ago that every time they smoke a cigarette-


Albert Joseph Brown: I do not smoke cigarettes.


Eccles James Gott: Even if he does not smoke them, the hon. member for Lisgar would not know a good cigarette if he saw one.


Albert Joseph Brown: Thank you for the compliment.


Eccles James Gott: If that is a compliment you are welcome to it. The tax on a single cigarette is six-tenths of one cent, or $6 per thousand on all cigarettes weighing less than three pounds to the thousand, while it is $11 on cigarettes weighing more than three pounds to the thousand. The cigarette smokers of Canada contribute $30,000,000 a year to the federal treasury. The ex-Minister of National Revenue said the reduction was not sufficient to suit him. I hope he was not serious, because this reduction is $2 per thousand more than we were able to get during the nine years the Liberals were in power. I do not care the snap of my fingers for those who roll their own cigarettes; all I am interested in is having Canadian tobacco used in Canadian cigarettes which are consumed by Canadian smokers. It has been stated-and it may be quite correct-that each year a billion cigarettes are smuggled into this country from the United States, and the approximate annual consumption of cigarettes in Canada amounts to about five billion.
I agree with the ex-minister when he says that a reduction in the excise duty will bring about a falling off in revenue. The United States had the same experience a few years ago, when they reduced the excise tax on cigarettes from $6 to $3 per thousand. Naturally their revenue fell off, but within five years the output and consumption -of cigarettes had doubled, making up for the .previous loss in revenue. I contend that while we may lose money in revenue this year, and possibly for another year or two as well, within five jmars the consumption and output of cigarettes in Canada will have doubled. This means a good deal to the Canadian grower of tobacco, and I do humbly suggest to the minister that he accept the amendment I have offered.


Mr. MULLINS:: I cannot agree with the hon. member. What about the health of the minors of Canada? Is that to 'be ruined? What about the growing populace of this country? If you double the production and the use of cigarettes you can see what the results will be. One has only to walk down the street and look at the sidewalks paved with half-smoked cigarettes to see where the waste is taking place in Canada. We could pay off the national debt with the money that is consumed in cigarette smoke. I am absolutely opposed to anything that would increase the consumption of cigarettes in this

sss
Imperial Conference-Irish Free State
country, or to any provision that will make it easy for our minors to purchase cigarettes and ruin their health.


Eccles James Gott: My suggested amendment is for the purpose of having Canadian tobacco used in the manufacture of Canadian cigarettes instead of foreign leaf.


Edmond Baird Ryckman: My hon. friend must realize that this bill is in the interests of the Canadian tobacco grower. That is obvious. In every way we can we are furthering the sales of Canadian tobacco. I believe that last year much more than half of the raw material used by one of the largest firms in the business was Canadian tobacco.


Eccles James Gott: Why not one hundred per cent?


Edmond Baird Ryckman: Not so very long ago we did not have Canadian tobacco for the purpose, but it has come forward and, I am glad to say, is now a great crop and one which manifestly will help the farmers. This government is going to look after the farmers, and this bill is in their interests.
Amendment negatived.


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

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. 4, respecting a certain trade agreement between the Dominion of Canada and the Irish Free State.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
Sections 1 to 4, inclusive, agreed to.
On the schedule.
William Lyon Mackenzie King: With regard to the schedule, I observe that for the most part its purpose is to secure both the Irish Free State and Canada against duties being raised against each other. It is protection as against the raising of duties on the part of either country.


Richard Bedford Bennett: I do not think the right hon. gentleman has followed the language of the schedule. The first article reads:
Goods the produce or manufacture of Canada, imported into the Irish Free State, shall not be subject to other or higher duties than those paid on similar goods, the produce or manufacture of any other country.
	,
In other words, no more favourable terms can be accorded any other country than to Canada. Then, so far as the complementary article is concerned, it provides:
Goods, the produce or manufacture of the Irish Free State, imported into Canada, shall not be subject to other or higher duties than those paid on similar goods, the produce or manufacture of the United Kingdom of Great Britain and ^Northern Ireland.
That is to say, the British preference expressed in terms of duties charged against goods of the United Kingdom and Northern Ireland. In other words, if duties were increased by Great Britain then the rates here might be made similar to those, and if the rates charged by the Irish Free State against the country at the present time enjoying the most favoured terms were increased, the same action might be taken with respect to Canadian goods; the standard being in one case the most favourable terms granted by the Irish Free State to any other country, and the standard in the other case being the duties charged by Canada against goods from the United Kingdom or from Northern Ireland.


William Lyon Mackenzie King: It may be said, however, that, generally speaking, the emphasis is on the protection of each country against higher duties, rather than-


Richard Bedford Bennett: No. I think I can put it fairly by saying that it does not do either one or the other. It does, however, secure this preference to Canada, <that we shall receive the benefits of the lowest rates imposed by the Irish Free State; and, conversely, we afford to them the rates, whatever they may be, charged against the United Kingdom and Northern Ireland.


[Stage Direction]
Schedule agreed to.
On section 5-Suspension of inconsistent laws.
Richard Bedford Bennett: This section is not expressed in terms that are entirely satisfactory to me. I believe the law clerk has some amendment with respect to the section. It is a rather cumbersome piece of language, as my right hon. friend, who is a purist in style, will appreciate:
The operation of all laws inconsistent with the giving to the provisions of the said agreement and of this act their full effect shall from time to time be suspended to the extent of such inconsistency.
The Minister of Justice will put it in better form, and the committee might rise and report progress and ask leave to sit again, possibly this day.
Progress reported.
NOVEMBER 7, 1932	ggg
Imperial Conference-Southern Rhodesia


Pierre Édouard Blondin: When shall the committee have leave to sit again?


Richard Bedford Bennett: This day.



TRADE AGREEMENT BETWEEN CANADA AND SOUTHERN RHODESIA

Richard Bedford Bennett: (Prime Minister) moved the second reading of Bill No. 5. respecting a certain trade agreement between the Dominion of Canada and Southern Rhodesia.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
Section 1-Short title.
Richard Bedford Bennett: I might say to members of the committee that the clause that is of particular interest is clause 3 which provides for the transport of goods from Rhodesia to the seaboard, although the seaport from which they may be shipped is not a British seaport.


[Stage Direction]
Section agreed to.
On section 2-Trade agreement approved.
William Lyon Mackenzie King: This clause refers to the schedule to the bill. Will my right hon. friend kindly indicate just what the schedule really signifies? It is difficult to make much out of the reading of it.


Richard Bedford Bennett: I think I can do that in not too many words. It follows the usual form so far as the provision relating to our customs tariff is concerned; that is the general provisions of our tariff are, as my right hon. lriend will see from article I, not suspended or abrogated. Then we provide:
(a)	goods the produce or manufacture of southern Rhodesia, enumerated in schedule \ to this agreement, shall, when imported direct into Canada, enjoy the benefits of the tariff concessions indicated in the said schedule;
(b)	all other goods, the produce or manufacture of Southern Rhodesia, shall when imported direct into Canada, enjoy the benefits of the British preferential tariff.
In other words, article I of the agreement contemplates certain Southern Rhodesian goods receiving better than the British preferential treatment, and those that do not receive better than the British preferential treatment, will receive the British preferential treatment. That number, as the right hon. member will observe from schedule A, is very limited. It includes:
Indian corn, n.o.p.
Grape fruit, when imported from the place of growth by ship, direct to a Canadian port.
Oranges.
Lemons.
Limes.
Peanuts, green, in the shell or not further processed than shelled.
Peanuts receive the same treatment as we accord in the case of Australia. That we thought to be ample, as it is covered by a treaty.
The rest of the goods other than those that come within the specifications of schedule A are to receive the benefits of the British preferential treatment. It will be observed, however, that the complementary side of it is contained in article II. I will not take up time explaining or reading it because, as I see, the committee is thoroughly familiar with it. But article III reads:
1.	Goods, the produce or manufacture of Southern Rhodesia, enumerated in schedule A to this agreement, shall, on importation into Canada, enjoy -the benefits of the lowest rates of customs duty applicable to similar goods imported from any country.
That makes it quite clear again that the goods enumerated in schedule A enjoy the benefits of the lowest rates of customs duty applicable to similar goods imported from any country.
Section 2 of article III reads:
2.	Similarly, goods, the produce or manufacture of Canada, enumerated in schedule B to this agreement, shall, on importation into Southern Rhodesia, enjoy the benefit of the lowest rates of customs duty applicable to similar goods imported from any country.
Schedule B will be found on page 4. It will be observed that they comprise not a large number of items. They include:
Cream separators.
Batteries.
Boots and shoes.
Boxes.
Wood.
The two latter items cover the timber business.
Paper.
Another branch of the lumber industry. The details I apprehend the committee has read. There was, however, one difficulty. Those who are familiar with the geography of Southern Rhodesia will know that it is a longer distance from Southern Rhodesia to ports in South Africa than it is immediately to the ocean across intervening Portuguese territory. It will be observed that these words in clause 3 of the bill cover that situation:
3.	After the said agreement is brought into force, and so long as it remains in force, goods, the produce or manufacture of Southern
890	COMMONS
Imperial Conference-Trade Agreements
Rhodesia, conveyed, without transhipment, from a port of any British country enjoying the benefits of the British preferential tariff, or any lower tariff, or from the nearest seaport accessible to Southern Rhodesia, into a sea, lake or river port of Canada, shall be admitted to Canada at the rates of duties provided in the said agreement.
In other words, that is regarded as a direct shipment, As a matter of fact the port, Beira, as I remember it, is distant from Rhodesia only about 100 miles, whereas it is 600 miles or more to reach the other port.


William Lyon Mackenzie King: Can my right hon. friend indicate in a general way the extent of Canada's trade with Rhodesia?


Richard Bedford Bennett: The Minister of Trade and Commerce has the figures; I have not them beside me at the moment. The trade is not very considerable, but it shows signs of possible improvement. For instance, Rhodesia produces Indian corn rather extensively. So far as grape fruit is concerned, it will secure a place in our market at a time when the other British possessions supplying that commodity would not be competing. The same may be said with respect to oranges, lemons and limes.
With regard to the items mentioned in schedule B the trade promises very substantial improvement in what one might call the lumber or timber items. On boxes it will be observed there is a five per cent preference in favour of Canada. On wood they give us the most favoured nation clause. As regards paper we have a preference on newsprint in reels or in the flat, 10 per cent ad valorem. That promises to be a trade that might be fairly expanded. On the other paper items w'e have a 10 per cent preference. On wrapping paper there is a 10 per cent preference and the same with respect to a special kind of wrapping paper which they carry in their schedule in a particular manner, namely, for wrapping fruit. I think it fair to say that the general preference is 10 per cent on the lumber items and products of lumber except boxes, where it is five per cent. On boots and shoes the preference is 10 per cent ad valorem duty for ours and a 15 per cent advantage, making it a 25 per cent tariff against foreign countries. With respect to electrical batteries, the preference against foreign countries is 15 per cent although our items are taxable five per cent. I do not carry in mind the exact volume of trade. I asked my colleague, the Minister of Trade and Commerce, to get it and he informs me the papers are on their way, and he will give the figures to the committee at an early moment.


Mr. POWER:: Do I understand the Prime
Minister to say that the preference on wood is 10 per cent? There is no preference at all.


Richard Bedford Bennett: I said that in the main
the preference on lumber items is 10 per cent.


Charles Gavan Power: Only on boxes.


Richard Bedford Bennett: On boxes it is five.


Charles Gavan Power: And on the ethers there is
no preference at all.


Richard Bedford Bennett: Oh, yes.


Charles Gavan Power: It is all paper.


Richard Bedford Bennett: On wood it is the lowest
rate to any country.


Charles Gavan Power: What is the prevailing duty?


Richard Bedford Bennett: The lowest rate I do not carry in mind at the moment.


William Lyon Mackenzie King: In the meantime may I ask my right hon. friend a question? As I read the agreement there does not appear to be any increase in duties by Canada against Southern Rhodesia with respect to any commodities coming from that country. Is that correct?


Richard Bedford Bennett: That is quite correct.


William Lyon Mackenzie King: May I ask my right hon. friend if our duties against foreign countries are increased in any way with special respect to Rhodesia?


Richard Bedford Bennett: My memory is that there was an increase of duties with respect to some foreign countries, with regard to the items that carry 25 per cent. But as I say, the papers are not here. They will be in a moment and then I shall be able to answer definitely.


William Daum Euler: I observe that the rate to Canada on rubber footwear is 10 per cent, and that the rate to other countries is 25 per cent. Did we have that preference before, or has our preference been increased?


Henry Herbert Stevens: The old rate to Canada was 10 per cent, and the old rate of foreign countries, 25 per cent or one shilling per pair.


William Daum Euler: So there is no change really?


Henry Herbert Stevens: No, there is no change. I have here some figures regarding the amount of trade with Southern Rhodesia which the right hon. gentleman asked for. Canadian

Southern Rhodesia
goods imported into Southern Rhodesia during 1931 were:
Motor ears and parts	$	476,445
Tires and tubes	 224,897
Wheat, flour, oatmeal	 102,069
Footwear and clothing	 49,915
Sodium cyanide	 43,872
Paper and cardboard	 32,539
Farm implements	 27,425
Electric materials	 26,301
Manufactures of wood	 15,712
Hardware	   11,211
Machinery	 11,085
Preserved fish	  9,206
Timber and shooks	 9,211
Iron pipes and fittings	 7,508
Apples	 6,832
Preserved milk	 5,503
Rubber goods	 5,182
Electric batteries	 3,951
Confectionery	 3,650
Bands and belting	 3,358
Mechanics' tools	 2,822
Sausage casings	 2,190
Other goods	 7,133
Total	$ 1,088,017
The average value of the imports of Southern Rhodesia during the last six years was approximately $49,000,000 per year and exports $35,000,000 per year. Approximately half the imports come from the United Kingdom, the leading articles during 1930 being railway rolling stock and locomotives, valued at S5,400,000; machinery, $1,660,000; wearing apparel, $1,500,000; iron and steel manufactures, SI,490,000; rails, sleepers and railway material, $837,000; cotton piece goods, $825,000; motor cars and parts, $500,000; alcoholic beverages, $194,000; books, printed matter and stationery, $313,000; footwear, $290,000; haberdashery, $248,000. Eleven per cent of the imports in 1930 were from the United States, comprising chiefly:	Mineral oils, $863,000;
motor vehicles and parts, $811,000; picture films, $335,000; farm machinery, $209,000; and wearing apparel, $135,000.


William Lyon Mackenzie King: Can my hon.
friend give any indication of the total value of Rhodesia's imports from Canada?


Henry Herbert Stevens: Rhodesia's returns show
an average importation of Canadian goods over the last six years of $1,250,000.


William Lyon Mackenzie King: What are our
importations from Rhodesia?


Henry Herbert Stevens: There is some difficulty
in segregating the records of Rhodesia's imports. I do not think we have the exact figures. We imported Rhodesian oranges to the value of $10,000 in 1930, and to the value of $15,000 in 1931. Our main exports from Rhodesia I imagine came through Cape Town,
and were regarded as imports from South Africa. I have not at the moment under my hand the figures of our imports from Southern Rhodesia. There was considerable sugar. The citrus fruit business is increasing. To my amazement I found that recently very considerable quantities of sisal were coming in from -East Africa, not necessarily from Rhodesia. I think it comes chiefly from Kenya and other colonies on the East African coast. These articles came to Canada through the United States, and were not segregated in their trade returns. We are now endeavouring to segregate these imports so as to get more exact information as to where they come from; that is, as to the point of origin rather than the country from which they were re-exported to Canada.


William Lyon Mackenzie King: Can the minister answer the other question I asked, as to the instances in which the preference has been given Rhodesia by increasing the duty against foreign countries?


Henry Herbert Stevens: We are waiting for the
officials who have all this information under their hands. I was not expecting this question to arise. Does my right hon. friend refer to an increase of tariffs on Canada's part?


William Lyon Mackenzie King: Yes, an increase by Canada against foreign countries with respect to some of these commodities that are mentioned in the schedule as likely to be imported from Rhodesia.


Henry Herbert Stevens: I think there is none.


William Lyon Mackenzie King: The Prime
Minister thought that there were some.


Henry Herbert Stevens: Yes, articles that come
under the general preferential list, but those were dealt with by the British agreement. In this special agreement there would not be any so far as I can see at the moment.


William Lyon Mackenzie King: Do I understand the minister to say that the rates as set forth in the British agreement will affect some of the commodities coming from Rhodesia?


Henry Herbert Stevens: No. What I mean is this, that to the extent that Southern Rhodesia benefits from the general preferential rate which is accorded to her and to the extent that those rates vary our own tariff, there would be increases, of course, but they are not specified in the schedule of the Southern Rhodesian agreement.
892	COMMONS
Imperial Conference-Irish Free. State


James Lorimer Ilsley: Would the minister explain the wording of tariff item No. 100 which reads: "Grape fruit, when imported from the place of growth by ship, direct to a Canadian port." The wording is different from that used in connection with the items for lemons and limes. What is the reason for the difference, and what is the explanation of that wording?


Henry Herbert Stevens: It is merely a recital of the item in the general tariff, for the sake of currency. There is no other significance.


Charles Gavan Power: But there is some ambiguity. It says, "when imported from the place of growth by ship, direct to a Canadian port." As I understand it, the ship cannot get to the place of growth.


Henry Herbert Stevens: My hon. friend will, of course, appreciate that the effective factor in these things is the item in the tariff.


Charles Gavan Power: But it is just as well to put it in English.


Henry Herbert Stevens: If my hon. friend will permit me, I admit that there is an apparent ambiguity as he mentions, but it is necessary that these agreements should, so far as possible, identify the item with the corresponding item in the tariff, and that is what is being lone here. But under the arrangements we aave made in the case of Southern Rhodesia we are waiving the direct passage to the degree that has been explained by the Prime Minister.


Charles Gavan Power: Then there is a contradiction.


Henry Herbert Stevens: Yes and no.


George Gibson Coote: That is a contradiction, is it
not?


Richard Bedford Bennett: I think the explanation
is found in this, that section 3 interprets as direct importations goods conveyed to Canada from the nearest seaport accessible to Southern Rhodesia,


[Stage Direction]
Section agreed to.
On section 3-Rates of duties on goods imported from Southern Rhodesia.
William Lyon Mackenzie King: May I ask the minister whether in his opinion the net result of the agreement is that as a result of the tariff changes tariffs will really be lowered as against Rhodesia?


Richard Bedford Bennett: The answer is found in
the fact that the goods come in free. I would think it would be difficult to say, but in my judgment the effect would be probably to

lower the tariff. I say that with some degree of hesitancy, however, in view of the fact that the trade is very limited. It is believed that with respect to Indian corn a very substantial trade will develop. In that regard it would have the effect of giving a British possession part of a market which has been largely controlled by countries not within the empire.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5-Suspension of inconsistent laws.
Hugh Guthrie: This clause appears in all the agreements, and in my view is not very well worded. I do not know whether or not I have improved upon it, but I am moving, seconded by Mr. Stevens, that section 5 be stricken out and the following words be substituted therefor:
AH laws and regulations inconsistent with this act and the said trade agreement shall to the extent of such inconsistency and in respect only of the said trade agreement be suspended during the currency thereof.


William Lyon Mackenzie King: That is much
better.


[Stage Direction]
Amendment agreed to.
Jean-François Pouliot: Is the currency used in
Southern Rhodesia the British pound sterling?


Richard Bedford Bennett: Yes.


Edward James Young: Does it impose a double
duty because of exchange?


Richard Bedford Bennett: My memory is that the
Rhodesian pound sterling is not at a discount.


Henry Herbert Stevens: Like the South African
money, the Rhodesian pound is at a premium.


Edward James Young: If it is at a premium you
still impose the dumping duty, do you not?


Henry Herbert Stevens: No.
Section as amended agreed to.
Bill reported.



TRADE AGREEMENT BETWEEN CANADA AND THE IRISH FREE STATE

[Stage Direction]
The house resumed consideration in committee of Bill No. 4, respecting a certain trade agreement between the Dominion of Canada and the Irish Free State.-Mr. Bennett.-Mr. LaVergne in the Chair.
Edgar Nelson Rhodes: I move that the following be substituted for clause 5 of Bill No. 4, respecting a trade agreement between the Dominion of Canada and the Irish Free State:

South Africa
All laws and regulations inconsistent with this act and the said trade agreement shall to the extent of such inconsistency and in respect only of the said trade agreement be suspended during the currency thereof.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. 3, respecting a certain trade agreement between the Dominion of Canada and the Union of South Africa.
Right Hon. W. L. MACKENZIE KING
{Leader of the Opposition): I notice that article IV of the schedule attached to this agreement provides that:
His Majesty's government in the Dominion of Canada will, in regard to the goods enumerated in schedule "A," maintain the margins of tariff concession represented by the difference between the rates accorded to Union goods in that schedule and the presently existing rates on similar goods when imported* from any foreign country.
Under that article the government is asking us to bind ourselves to maintain certain rates of the general tariff for the period of the agreement, a period of five years. I wish to say that I think the parliament of Canada should be free at all times to alter its tariff in any respect that it desires, and that we should not bind ourselves to maintain a certain tariff rate, even if it is fixed only so as to continue a margin of preference; but subsequent parliaments, or the same parliament at subsequent sessions, should at all times be free to alter rates of duty in any and every particular. My right hon. friend will probably say, "we are binding ourselves only in honour," that "of course parliament is supreme at all times." But while he may bind himself in honour to maintain a certain tariff rate with l-espeet to commodities coming into this country, I, as representing the Liberal party in Canada, cannot bind myself in honour to maintain any tariff rates so long as I may be of the opinion that at some subsequent time the people of Canada may desire to have those rates changed. I want to take this first opportunity of emphasizing what I feel to be a very grave objection to this particular phase of this agreement, a phase which is to be found in some of the other agrements as well. The tariff schedule is a very lai'ge one; we have had no opportunity whatever of discussing it, and I question very much
if the Prime Minister will allow us an opportunity of going into committee of ways and means before this second reading is disposed of, or even after it is disposed of, to discuss item by item the several articles mentioned in the schedule. And without going very carefully through that schedule I submit it is impossible for this house to say to what extent it is binding itself with respect to the maintenance of certain protective rates of duty for the next five yeai's. I realize that the government have bound themselves to carry this agi'eement through, and they probably will do so by the strength of their majority in the house. But I should be entirely lacking in appi'eciation of what I feel is owing to the other party to the agreement if I did not make it perfectly clear that as far as the Liberal party is concerned we intend to assert and maintain the principle that parliament is supreme at all times with respect to all matters, and to none more than those which concern taxation, and that at any time we feel it to be in the public interest that rates of duty should be changed, we, should we be exercising authority at the time, will not regard ourselves as bound in that particular by anything that appears in the agreements in the form in which they are.
Richard Bedford Bennett: Mr. Speaker, I have no right to reply, as I moved the second reading of the bill. I only desire to say that the same practice as settled by this house in connection with the French treaty, the Italian treaty and other treaties will be followed in this case, and my right hon. friend and those behind him are at perfect liberty to pursue the course pursued by the opposition of that day in connection with this agreement.


William Lyon Mackenzie King: As the Prime Minister has taken advantage of speaking twice, perhaps I may do the same thing-


Pierre Édouard Blondin: I think- the right hon.
leader of the government is under a misconception as to his right. By the usage of this house the mover of the second reading has been accorded and always has the right of reply.


William Lyon Mackenzie King: I did not
know that we were through with the discussion on the second reading. Certainly the Prime Minister when he spoke said he did not think he had the right to speak again, but was doing it by courtesy of the house. If Your Honour does not wish to extend to me the same courtesy-
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Richard Bedford Bennett: I did not deal with the merits of the case at all, because I did not feel that I had the right to reply on that aspect, whether I had the right to reply at all. I was careful not to deal with the merits of my right hon. friend's argument.


William Lyon Mackenzie King: I intended to
be equally careful in regard to replying only to what my right hon. friend had just said. I wish to say that I think the same courtesy should be extended to both sides of the house by Your Honour in matters of the kind.


Richard Bedford Bennett: I think it always has been.


Henry Herbert Stevens: The right hon. gentleman has raised a point which he 'has laboured I think on previous occasions, complaining in regard to certain provisions of this treaty. It will be observed that the government of the Union of South Africa also undertakes to maintain the margin of preference created in schedule B to Canadian goods over similar goods when imported from any foreign country. I think the house should bear in mind in dealing particularly with this agreement that the Union of South Africa in its policy regarding trade matters has not followed the same course that we have in Canada. Instead of giving a certain preference- say a British preference-as we do on all goods, they limit the goods on 'which Great Britain is entitled to a special preference to a certain, list. And they have done the same thing with us. Their practice is this, that when they do fix a list which seems to be most suitable to the part of the empire to which it is extended, the preference is limited to the country to which that list is applied. In this case Canada gets a preference on a certain list of articles which in our estimation are the most advantageous to our trade, and that list is not extended to other countries. That is the principle upon which they have carried on their trade. South Africa said to us: "We will maintain this preference for you, but you must maintain the preference on the limited list that you extend to us." It is on that limited list that this preference is extended. As to the right hon. gentleman's reference to the list as a large one, it is not a very large list. There are probably about twenty-five items in it, out of a tariff list of some 900 or 1,000 items. So it is not a very large list, but it includes items that are typical of Canadian trade.
It might be well for me at this point to deal with the way in which Canadian trade with South Africa has developed. It will be recalled that the Union of South Africa, origin-

ally the four colonies, established in 1903 a preferential ad valorem rebate to the United Kingdom, of three per cent on most of their goods. This was not applicable to all their goods. It was extended to Canada because we had extended British preferential tariff treatment to South African goods. In 1925 South Africa discontinued this uniform three per cent ad valorem rebate and adopted a tariff with columns of maximum and minimum duties, although on many items maximum and minimum rates were the same. In 1925 they adopted a new policy, and that is the tariff system which is now in force. The preference allocated to Canada in 1925, following this adjustment of their tariff system, conceded the minimum tariff to Canada on wheat, wheat flour, preserved fish, hosiery, binder twine, pipe and fittings of iron and steel, cocks, taps, meters, electrical cooking and heating appliances, mechanics' tools, white lead, rubber tires and tubes, newsprint and unmanufactured wood. It is only on these goods that a tariff preference is now granted to Canada by the Union of South Africa. The new agreement retains the former preferences, gives increased preference on two items, provides new preferences on ten, and secures to Canada the most favoured nation treatment on fifteen other items. This was considered a very valuable extension of privilege for Canadian trade in the South African market. As complained of by the right hon. leader of the opposition, we have undertaken on a certain limited list to maintain the preference, and South Africa has undertaken correspondingly on a similar limited list of Canadian articles to maintain the preference, or the margin, in that market.
I confess that I cannot follow my right hon. friend in the alarm he expresses as to the adoption, as he calls it, of this principle. I think that very largely, if not absolutely, we were similarly bound in connection with the French treaty. At least we were in this position, that we fixed certain duties under the French treaty that we could not change, and that were accorded to twenty-three other countries by virtue of the most favoured nation provision; and we were without power to change that unless we abrogate the treaty.


William Lyon Mackenzie King: Six months' notice was all that was required.


Henry Herbert Stevens: But we had to abrogate the whole treaty to do it. I think the house ought to pause in this controversy that has been going on for the last two or three weeks to consider the significance of that. My right bon. friend takes refuge, shall I say, in the fact that six months' notice was provided in the French treaty. But surely when we enter

South Africa

into a treaty we do not expect that if there are some items in it that do not quite suit us or do not come up to our expectations, within a few days we will abrogate the treaty, because that is the only remedy. In all these treaties, while we have fixed a period of five years and have adopted certain provisions with regard to the maintenance of a spread, there is the spirit of adjustment and compromise by consultation. There is present an entirely different atmosphere from that which we find in the ordinary treaty between two foreign countries, and I think that should be borne in mind. There is nothing alarming in this matter of maintaining a spread; the items are comparatively few.
Another point about which my right hon. friend complains is this: a moment ago he intimated -that he did not suppose the Prime Minister would allow the house to examine these schedules in committee of ways and means. Let us look at that question very frankly. The British treaty and the treaty under consideration have been presented to the house in a normal manner. We come to the house and say: "We have entered into agreements with Great Britain, with Southern Rhodesia, with the Irish Free State and with South Africa. We now bring forward these bills, by which we ask the house to ratify our action." Then what happens? The bill is read a first time in the ordinary course. It is presented to the house and read a second time. By giving the bill that second reading the house approves of the general principle of entering into an agreement. Then we go into committee of the whole on the bill and the schedules. In committee of the whole we can examine every item, every figure, every letter, the dotting of every "i" and the crossing of every "t". There is nothing we cannot examine, and the fullest information desired by the house may and will be given. Having gone through that procedure we give the bill third reading, but still the measure is not complete. It is still open; i-t must go to the other house, where it is given similar treatment. There is not an item affecting the tariff that we are not competent to examine while a bill is going through that process, precisely as we examine these items in the committee of ways and means. What is that committee for? It is simply to regularize all these agreements in the nomenclature of the tariff, to harmonize the provisions of the bill with the general tariff provisions. That is what the committee of ways and means is for.
I submit that my right hon. friend is doing himself and the public an injustice when he seeks to leave the impression that because we
do not go into committee of ways and means on something we have not yet ratified, we are doing an injustice to this house. I submit this to the right hon. gentleman: having gone through these processes we send the bill to the other house. Mark you, the ratification is not complete until the bill passes the other house and gets royal assent, but we send the bill out of here; then we go into committee of ways and means, and go through the whole process again. If we went into committee of ways and means before passing the bill it would be similar to putting the cart before the horse; we would be amending the tariff, harmonizing it with something we had not considered. I wonder if my right hon. friend has thought of that. Here we have measures which he says we should not consider at all; he says we should just lay them aside and adjust the tariff in accordance with these agreements. If we are not going to ratify the agreements after full examination, there is no need to make the amendments to the tariff; of course, in that case the whole thing is wiped out.


Edward James Young: Did I understand the minister to say that we cannot go into committee of ways and means until the bills have passed the Senate?


Henry Herbert Stevens: No, we do not wait until they have passed the Senate; as soon as they go from this house we proceed in an orderly way to harmonize what we have done with the general tariff, in the ways and means committee. If we did otherwise we would be putting the cart before the horse. We simply work into this schedule of more than one thousand items, which we call our tariff, the adjustments that we make in these agreements, and if we are to follow the ordinary precedents of this house the agreements first must be passed.
Perhaps I have gone into this matter a little more than is necessary, but twice this afternoon and on previous occasions as well my right hon. friend has suggested that we are not treating the house fairly in asking the house to consider these agreements first. I invite the right hon. gentleman to the most careful scrutiny of these schedules. A moment ago my hon. friend from Quebec West asked a question with regard to one of the items, and he found that we simply sought to harmonize that item with the general tariff schedule. It is highly technical and narrow, if you like, but these things must be done and they can be done only in the committee of the whole.
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My right hon. friend said we had not all the information before us. I am reminded that at least since Friday, October 7, the full list of items and all the amendments to the Tariff Act and the tariff schedule have been before the house, not those affecting just one treaty but all the necessary changes, covering every item cited in all the agreements. Not only is that the case; in these lists we have also given the old and the new rates, and I am sure that on second thought the right hon. gentleman will realize that every possible bit of information has been given the house that could be given. Now we are here prepared to analyze the schedules in detail. I invite my right hon. friend to join with us in scrutinizing these items. We are prepared to discuss them. Of course we hope that we will be able to satisfy any reasonable member of the house that each item has been carefully considered before being agreed to. Each one has been gone into with great care, and we are sure we will be able to meet the reasonable requirements of any hon. member in this connection.
I should like to come back for a moment, however, to the point stressed by the right hon. gentleman, that there is something that does violence to his sense of parliamentary practice and to his ideas of constitutional procedure, in guaranteeing to South Africa a spread on a limited number of items. Let me remind the house that South Africa has given us the same guarantee, and that guarantee is more important to us than is our guarantee to South Africa. I may assure hon. gentlemen of that. So we submit to the house that there are no grounds for objection, constitutionally, in practice or in equity, to this method of procedure. We leave it, then, to the judgment of the house.


Hon. J. D. CHAPLIN (Lincoln):: I wish
to recall to the house what happened in connection with the Australian treaty. That treaty, it will be remembered, was made in October, and it got into this house when parliament opened in January or February, but nothing more was heard of the treaty. No details of that treaty came to this house until three days before prorogation. It was discussed in this house for three days.


Henry Herbert Stevens: What year?


James Dew Chaplin: I think it was in 1925.
The leader of the government of that day thought that three days was enough to discuss that treaty, right on the eve of prorogation. It is an entirely different matter now. It is true this is a more important treaty, but I have seen no evidence of any desire

on anyone's part to limit discussion. There has been no limit of discussion on the other side, heaven knows. Let hon. gentlemen stop and think what happened then and what is happening now. My hon. friend also speaks of the French treaty as if it were some paragon of virtue. They kept it in force for ten years, and it should have been abrogated in six months. Hon. gentlemen sitting over here opposed that treaty at the time. Why was it opposed? Because of the minimum tariff which the old government agreed to. It will be understood that France had no tariff which could be described in the same way as our own. In our tariff we had three, divisions: A general tariff, an intermediate tariff and the British preference. France also had three tariffs, one of which was called the minimum and which they could change at any time. There was a long list of our goods which France allowed to go in at the minimum tariff, but take wheat as an example. When that treaty was made, wheat into France had about 10 cent's per bushel of a duty, but under the arrangement which the government of hon. gentlemen opposite made at that time, the rate was changed within a year to 50 cents, and within two years to 75 cents per bushel.


Alfred Speakman: And it is double that
notv.


James Dew Chaplin: Yes, and it would have
been the same if the treaty had still been in force. In other words, we accepted a tariff at no certain figure. We gave them, on the other hand, a tariff that was fixed, a tariff which we could not change unless we abrogated the treaty. That is why it should have been abrogated in six months' time.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.
Mr. G. G. COOTE (Macleod). Mr. Speaker, I should like to say a word or two in support of the contention of the leader of the opposition (Mr. Mackenzie King) that before proceeding further with this bill, we should go into committee of ways and means on the proposed changes in the tariff schedules. The Minister of Trade and Commerce (Mr. Stevens) this afternoon suggested that that was putting the cart before the horse, but it seems to me that if we first went into committee of ways and means on the tariff schedules it would be putting the horse before the cart, and the passage of the bills would

South Africa
not take so much time. There are many matters to be considered in connection with the schedule attached to this bill and 1 suppose they will have to be discussed again when we come to the schedules of the other bill dealing with the United Kingdom. If we went into committee of ways and means first, the whole situation could be cleared up there and we would be in a much better position to judge the merits of the bill. I might point out that the house was moved into committee of ways and means over two weeks ago and it would assist the house in appraising the bill exactly if we could have the committee of ways and means stage first.
The hon. member for Lincoln (Mr. Chaplin) this afternoon referred to the treaty with France, the manner in which it had been put through the house, and the results which ensued from it. I thought he chose rather an unfortunate example, because, since the treaty with France was denounced by Canada, the tariff on our wheat entering France has been doubled. It now pays a duty of about $1.70 a bushel, whereas it formerly went in at a duty of 85 cents a bushel. The United States can send wheat into Belgium at one-half the tariff rate which Canada must pay. That, however, is only by the way. I think it would be a sensible procedure, whether it is the one which has been customary or not, if we were to have committee of ways and means first. I am not very much concerned with the question whether this is following precedent or not. We should adopt the method which would seem the most sensible and the most expeditious.


Alfred Speakman: Mr. Speaker, I am not going to waste any time speaking in support of the contention of the hon. member for Macleod (Mr. Coote) but in relation to this I would point out one fact: the Minister of Trade and Commerce (Mr. Stevens) suggested that since October 7 we had before us in the schedules all the information which we could possibly require. I might suggest this to the minister: The mere statement of the schedules, the mere statement as to the percentages of tariff up or down, means little or nothing until we know in addition the quantity of the goods which have or may come in from those different countries affected under those tariffs.


Henry Herbert Stevens: As soon as we get to the schedules we are prepared to give that information.


Alfred Speakman: Surely; but I was
going to suggest, as has been suggested by others, that just as the Conservative party 53719-57
when in opposition urged that it was perhaps fairer to discuss those details and to get that information before passing the bill itself and committing ourselves to the principle involved, so it is fairer now to do so. I am not, however, going to continue with that argument. It has been urged that the customary procedure is to do as the minister has stated and probably that course will be followed.
Definitely in connection with this treaty, and perhaps of equal application to all the treaties, there are two points which impress me as being of some importance, although they have not received very much discussion, in fact .have been seldom mentioned. The first is in relation to the suggestion or the fact that under the terms of these treaties this parliament is bound for five years to maintain certain definite schedules, certain definite tariffs, certain definite spreads in the tariff schedules, and so this parliament is unable to deal with its own tariff in relation to other countries and to make treaties into which we might otherwise enter. I am assuming that these treaties are not imperial in the true sense of the word; that is, they are not an integral part of an imperial policy; but that each one is a separate treaty which has to do almost wholly with the two countries which are vitally concerned; that it is possible at all times to vary the terms of that treaty up or down if the two countries mainly concerned agree on the changes which should be made. Therefore it struck me, while the leader of the opposition (Mr. Mackenzie King) was speaking-and may I say I find myself in a great deal of sympathy with his attitude towards future tariffs-that if the time came, as he suggests, that we should have a different government in Canada, and that within the life of these treaties, and that this different government should have very definite ideas on the tariff and wish to lower it substantially but should find itself prevented from doing so by the preferences Which had been given, it would be unthinkable were Great Britain to refuse very sympathetic consideration of all those points were the government then in power to offer to Great Britain by way of compensation, for example, substantial concessions in the line of textiles. I can hardly conceive of Great Britain refusing to Canada the right to wipe out entirely her tariffs on cream separators, to reduce not only to Great Britain but to other countries her tariffs on many other articles, even to wipe out all the preferences by wiping out all tariffs on certain items, if in return the Canadian government

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were prepared to offer real concessions in the larger field. The field would be at all times open to enter into new negotiations-in fact the machinery had been provided-and if this government decided to adopt an entirely different policy, to offer more substantial concessions to Great Britain, no difficulty would be found in opening the way to just as great reductions as the two countries together might agree upon.
But there is another point, and it is one which has given me some concern. We have heard a good deal about the restriction of the right of parliament to deal as it felt inclined with its taxation policy, its tariff and all the other matters, the right, the freedom of parliament at all times to do exactly what it likes and to maintain its own inherent control over its policy. But at the same time we have heard a great deal of 'another subject, namely, the necessity of international cooperation and agreement by means of which we should have a substantial lowering of tariffs amongst all countries. It seems to me that you cannot have absolute individual freedom, whether of man or of nation, coupled with a policy of complete cooperation. As soon as you begin to cooperate, whether that cooperation is between individuals or nations, to the extent of your cooperation, you must surrender your individual right or freedom. To me at least, it seems wholly contradictory, wholly impossible, to talk about international cooperation, future international agreements and world action for a common end, and at the same time to insist that at all times and under all circumstances we in this country and in this parliament must retain our individual right to act exactly as we please. You cannot have those two things together. Because I am so firmly convinced that the future of the world rests much more upon cooperation than it does upon the individual right of every country to act as it sees fit, I for one would be willing to surrender a good deal of our right to deal with our own private affairs as we wish, if in surrendering that we were able to lead the way or take part in world cooperation towards world recovery. But, as I say, you cannot have the two together. I was brought up in the old MJanchester school of free trade and individualism. I have not lost my feeling towards free trade if it is world-wide, but I have become convinced that we have long passed the stage when the school of individualism has a leg left to stand on, and we have to surrender such individualism, whether as a man or a nation, in order to cooperate
[Hr. Speakman.]
-and cooperation, let me repeat, whether it is in the matter of the lowering of tariffs or anything else, must mean that we have to surrender some of our own rights of action and personal freedom. It is no use saying that you stand for individual freedom and the untrammelled rights of parliament, and at the same time for future cooperation and international action in the lowering of tariffs or anything else. That is the inconsistency which has struck me and which we shall have to keep in mind.


William Lyon Mackenzie King: May I ask my hon. friend a question before he sits down? He has spoken about the willingness, as he sees it, of another government, the government of Great Britain or of South Africa, to alter the agreements on representations that certain changes would foe made in the tariff by the government of Canada, and to that extent I take it that he means we would not be bound either legally or in honour to keep the tariff rates at the figures set out in these agreements. May I ask him if his conception of being in honour bound would go the length of applying, for instance, to the textile interests of Canada, so that we would be equally bound in honour to the textile interests to keep the tariffs at the figures set under these agreements?


Alfred Speakman: I would no more consider parliament in honour bound to the textile interests to .maintain what I think is an unnecessarily high tariff on textiles than we would foe bound at any session of any parliament. The textile interests know that parliament is at liberty to change the tariff any year, and they have to work on that assumption. Our honour would not be affected in the least so long as the changes made were made with the consent of both parties to the agreement. Under those conditions our honour is not in the least concerned. So far as being bound by the terms of this agreement or by any tariff passed at any session is concerned, I do not think we are in honour bound to continue to our industries a protection which many of us think is far too high and quite unnecessary. I do not think our honour enters into it. It is a matter of business and common sense.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
Section 1 agreed to.
On section 2-Trade agreement approved.
William Lyon Mackenzie King: May I ask the Prime Minister if he would consider this the

South Ajrica
appropriate time to discuss the items in schedule A before this clause is carried, or does he expect the clause to be carried before we discuss the individual items?


Richard Bedford Bennett: I cannot express any expectations, Mr. Chairman. We are simply following the course that has been pursued with respect to other trade agreements which have been offered to this house. We offer this one now for ratification and approval. To it are attached schedules that are being treated in exactly the same way as similar legislation has been treated by preceding governments, and will be treated, I suppose, by all governments. The ways and means committee schedules are really the collection of all the schedules expressed in terms that conform to our tariff legislation. It might well have been that they would not have been introduced by ways and means committee at all had one seen fit to amplify them in the first instance, but as they stand now the agreements are here just as they were signed for ratification. Whether or not the right hon. gentleman thinks it desirable to discuss the schedules now or later, I am sorry I cannot assist him in arriving at a conclusion. I can only refer him to what was done when, his minister submitted similar agreements to the House of Commons.


Armand Renaud La Vergne: I think it is better to follow the rules of the house and discuss the clauses, and that each member should confine himself to the clause under consideration.


William Lyon Mackenzie King: That is exactly what I am doing, Mr. Chairman. I am speaking about clause 2, which refers to the trade agreement between the Dominion of Canada and the Union of South Africa. I would ask you, Mr. Chairman, to read each of these clauses so that we may understand what is before us.


Armand Renaud La Vergne: Clause 2 reads:
The trade agreement between the Dominion of Canada and the Union of South Africa, copy of which is set forth in the schedule to this act, is hereby approved.
I understand that the schedule can be discussed with this clause.


William Lyon Mackenzie King: That is the point which I was asking the Prime Minister about. It was not whether we can discuss the schedules before the committee of ways and means considers them. I am speaking of a schedule which is mentioned in this clause, and which is a part of this bill. Can we discuss that schedule before we pass upon the clause itself approving of the schedule?
53719-57J


Richard Bedford Bennett: As I understand it, the custom has been, and I can only speak as to that, that when the schedule is called by the chairman at the conclusion of the consideration of the clauses, a committee discussion proceeds with respect to the schedules, which include the various items.


Armand Renaud La Vergne: Clause 2 refers to the trade agreement, a copy of which is set forth in the schedule of the bill. I may be wrong, but I would understand that the schedule can be discussed in connection with this clause.


Richard Bedford Bennett: I see no reason why it should not be.


Mr. MACKENZIE  ICING@: That is the point. Then we can proceed with the schedule and consider the items. Will you pass to the schedule, Mr. Chairman?


Armand Renaud La Vergne: The committee will discuss the clause, and the right hon. gentleman can refer to the schedule.


Richard Bedford Bennett: The detailed items must be discussed when we come to deal with the schedules in detail. They can be referred to in general terms in the discussion on the clause, but a detailed discussion of the schedule cannot proceed until the schedule is reached.


Armand Renaud La Vergne: It is in order for the right hon. gentleman to discuss the principle of the schedule and to refer to it, and then after the clause has been adopted the schedules can be taken up in more detailed discussion.


Edward James Young: I would like to discuss article I of the schedule, Mr. Chairman. Is this a proper time to do it?


Armand Renaud La Vergne: The hon. member can discuss clause 2 of the bill and refer to the schedule, and discuss it to a certain extent, but the schedule will have to be approved afterwards.


William Lyon Mackenzie King: Take, for instance, article IV of the schedule. Assume I wish to strike out that article: What would be the sense of my moving to strike out article IV after I had approved of clause 2 of the bill?-because in approving of that clause I approve of the schedule attached to the bill. It is impossible to consider the matter properly unless we first take up in detail all that we are expected to approve in section 2.


Armand Renaud La Vergne: I think the right hon. gentleman misunderstands me. I am speaking subject to correction, but my understanding
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is that under clause 2 you can discuss the trade agreement and refer to the schedule and discuss any item of the schedule, but if it is desired to strike out any part of the schedule the committee will have to wait until the schedules themselves are reached.


Richard Bedford Bennett: There can be no doubt
as to that. The committee now has before it clause 2 of the bill. It either approves or disapproves of it. If the right hon. gentleman desires to call up his forces and vote upon it, they vote upon it, and if the motion for the adoption of the clause is not carried, the government is defeated, and that is the end "of it. If, on the other hand, the clause carries, it is carried, not with the acquiescence of the right hon. gentleman and his followers, but with their disapproval, and having voted against it their rights are reserved to strike out any article or item of the schedule. They can make the motion, of course, but it is perfectly obvious that the agreement stands as a whole and it is not competent for this parliament without defeating the administration and terminating the agreement to strike out any item in the schedule. That is the position beyond all question.


William Lyon Mackenzie King: If that is the
position, Mr. Chairman, I certainly cannot support the second section of this bill which approves the entire agreement, and I cannot do it for the following reasons: I have not had, and under your ruling I cannot have, the opportunity of understanding, as I would wish to understand them before I approve the entire agreement, the schedules which are attached to the agreement.


Armand Renaud La Vergne: Perhaps I did not
make myself clear. The right hon. gentleman has a right to refer to the schedule and to cite any article thereof he believes should be stricken out. But the rule is clear that the schedules are to be discussed only after the sections of the bill. We must discuss the clause now before us, although the right hon. gentleman may support his argument by quoting from schedules as much as he likes. He cannot at this time, however, move for the striking out of any part of the schedules, or move to amend any schedule. That is my understanding of the rules of the house.


William Lyon Mackenzie King: 
Alfred Speakman: I did not refer to it as not being part of an imperial policy, but I intended to convey the thought that an imperial policy was not bound up in each of these agreements. It was not necessary to consult every dominion within the empire in order to make a change in any particular agreement, that the agreements were not imperial agreements in the wide sense of the term, but were separate agreements each made between two distinct parts of the empire, and all of course coming within the scope of the general policy, but not in the sense in which I referred to them.


William Lyon Mackenzie King: Technically
no, perhaps, but in reality, yes. If the hon. member would read the book to which the Prime Minister referred a day or two ago, namely Mr. Hewins' Apologia of an Imperialist, he would find therein the emphatic statement by Mr. Hewins that having tried to bring about imperial policies through an imperial parliament, and having failed in that direction, imperialists who seek imperial consolidation by imperial tariff policies should today approach the matter by means of bilateral treaties between the different parts of the British Empire. When those bilateral treaties are drawn up at an imperial conference, and when all parts of the empire are represented at one table, they acquire a significance entirely different from treaties such as the Australian-Canadian agreement of a year or two ago which was negotiated between Australia and Canada, with no relation to what might be transpiring at a round table of the Imperial economic conference.


Alfred Speakman: I was merely referring to one point, namely the consent required in order to effect a change in the agreement.


William Lyon Mackenzie King: 
James Dew Chaplin: My complaint was it fixed rates for one side and not the other.


William Lyon Mackenzie King: Not only that, but my hon. friend- said it fixed rates and those rates Should not, he said, have been continued for six months; but now he joins with his leader in binding this parliament not to lower certain rates for a period of five years.


James Dew Chaplin: You bound us for eight years.


William Lyon Mackenzie King: Never.


James Dew Chaplin: We were subject to that treaty that length of time, and the Japanese treaty the same.


William Lyon Mackenzie King: The treaty at any time could have been changed.


James Dew Chaplin: What about the West Indies and Japanese treaties?


William Lyon Mackenzie King: I answered that when I spoke on the resolution which preceded the bill. The French treaty could have been changed any time on six months' notice, my hon. friend knows that.


Henry Herbert Stevens: No-could have been abrogated.


William Lyon Mackenzie King: Well, abrogated and changed by mutual consent, abrogated if consent not obtained. As far as the Japanese treaty is concerned, may I point out that there is a very great difference between agreeing to a treaty being binding for a term of years where there are considerations involved other than merely the commercial ones that enter into the arrangement, and where all parties in parliament at the time the agreement goes through are agreed upon its provisions. As I recall, that was the ease in respect to the Japanese treaty. There were considerations apart altogether from those purely commercial, considerations having reference to the Japanese alliance, to our imperial obligations, and the like, which were important factors in regard to that agreement. In regard to the West Indies treaty, my hon. friend knows that was a treaty that related quite as much to the inauguration of a steamship line, the subsidizing of a steamship line for the purpose of developing a certain trade between the West Indies and Canada with regard to classes of commodities which were complementary, and which for the most part in no way entered into competition with one another as items covered by these particular agreements do.


James Dew Chaplin: The steamship line was a matter of building to the extent of $10,000,000, not subsidizing.


William Lyon Mackenzie King: My hon. friend must not get so cross. I am simply trying to indicate that everything has to be decided on its merits and on ail relevant circumstances.


James Dew Chaplin: My right hon. friend should be correct in his statements.


William Lyon Mackenzie King: Here we are beginning something on a very large scale, an innovation in imperial tariff making. It is not a matter of an agreement affecting a small number of commodities; this is an endeavour to change the whole fiscal policy of the British Empire by means of a series of agreements that have been reached at a round table, by governments the members of all of which are protectionists, who are seeking to raise a protectionist tariff wail around the British Empire and rivet it there for a period of five years. I say that that is something that those of us who believe in preserving to parliament its fiscal freedom and its right to change tariffs as we think conditions necessitate, can never agree to. For that reason I certainly am opposed to this section.

South Africa


Richard Bedford Bennett: Mr. Speaker, the argument of the right hon. gentleman resolves itself into this-it is a very simple one: Do not make family bargains for a term of years because it will interfere with your making bargains with the foreigner. That is his argument.
We met as a family. We dealt with our problems as a family, we entered into agreements as members of a great family. And we propose to endeavour to give effect to the bargains we made. May I remind the right hon. gentleman that the time was when he agreed with that view. Maybe he has changed. But these were the words of the 1917 conference, which he formally approved in 1923:
The time has arrived when all possible encouragement should be given to the development of imperial resources and especially to making the empire independent of other countries in respect of food supplies, raw materials and essential industries. With these objects in view this conference expresses itself in favour of-
(1) The principle that each part of the empire, having due regard to the interests of our allies, shall give specially-favourable treatment and facilities to the produce and manufactures of other parts of the empire.
That was in 1917. And instead of modifying it in 1923 it was formally approved by the unanimous view of all these gentlemen, and I am bound to say that substantially the same gentlemen attended in 1932 as in 1923 as far as the governments were concerned. I do not know whether the right hon. gentleman regards Mr. Runciman, the president of the Board of Trade, as a protectionist. Mr. Runciman would deny it, but perhaps he was not far wrcng the other day when he said he thought it might be well for the right hon. gentleman to look after Canada and leave him alone.


William Lyon Mackenzie King: He did not say anything of the kind.


Richard Bedford Bennett: That is the sense of what he said.


William Lyon Mackenzie King: No, it was not. I have the exact words.


Richard Bedford Bennett: Then there are three, because another gentleman has them too. He said: I would like to know that these words were quoted with authority. He said: We have not interfered with the policy of Canada and we know of no reason why they should with ours.


William Lyon Mackenzie King: Quite different.


Richard Bedford Bennett: I put this to the committee, a very simple position. We have seen fit to enter into an agreement with members of the family, sitting around the table. Now the complaint is that by reason of these agreements being for a period of five years they impose a restriction upon the freedom of this dominion to enter into agreements with foreigners. There is the issue plain and simple. We say that it has been the considered policy of statesmen of the British empire for a period of years commencing before 1917 to endeavour to maintain and support the policy of friendly trade relations between the dominions, and that we have felt that that is the best way to ensure stability in our own trade, permanency in our fiscal relations, so that we would not be subject to what happened to Canada a few short years ago. I saw the entire ranching industry of western Canada practically destroyed by the Fordney-McCumber tariff. I saw a gentleman who measured his wealth by millions ruined completely. W'hy? Because the United States enacted a new tariff law after the Wilson tariff that completely destroyed our ranching population. If the right hon. gentleman would ask the banks what their losses were in connection with these matters; if he would ask the individuals who found themselves insolvent by reason of it, he, I think, would quite agree that it is highly desirable that somewhere within this world we should have a channel of trade that would not be subject to the whims of an election, the mere caprice of the day. That is what we have done; that is what we have endeavoured to prevent. We had free wheat, we had free cattle, we had free lumber and grains, and the Fordney-McCumber tariff ended that, and did a tremendous injury to our people. We had lumber at a given rate; the other day a foreign country suddenly placed a higher tariff against it, with great injury to our people.


George Brecken Nicholson: And doubled it last
week.


Richard Bedford Bennett: Now we are endeavouring to establish a channel of trade that will not be subject to these forces. And five years seemed to be a reasonable period to establish that channel of trade upon a permanent basis. And we have done it for that reason. Every treaty, however small it may be or however great it may be, involves some restriction on both parties to it. The restriction in this particular case extends over a period of five years. The principle is not different from the principle of a treaty for six months or a year. In the one instance you are certain that you have time in which to establish your channels of trade; in the other it is done in the confident belief that, at the end of six months, neither party will give notice, but in any event the treaty is there for the period of time specified. The treaty with the West Indies, which was a family treaty and which was put forth as
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such, is for twelve years. That was brought forward as a family arrangement, because we desired to assist our brethren in the West Indies, and did so. Both parties in this house accepted that treaty. It is true that it involved a loss of $1,000,000 a year to the Dominion of Canada, because of the obligations we incurred, but no one complained because it was a family arrangement.
This, too, is a family arrangement with South Africa; we have told them that for five years we will maintain the status quo in order to enable trade to be maintained; in order to enable us to find markets there to meet the requirements of our trade, and in order to enable them to find markets here for the requirements of their trade. It is for that reason that we seek the term of five years. Many people think that term too short; many people think a term of five years will not enable the greatest advantages and benefits to be derived from this agreement. At any rate it is for that period and, as I say, that is in addition to the fact that this is a family arrangement; in addition to the desire to obtain secure markets and clear-cut channels of trade upon which we can depend, so that we will not be subject to the caprices and whims of people not within the empire, by which our fiscal fife may be destroyed at a moment's notice, and by which the individual may find himself ruined through the sudden change of tariffs by a foreign country. We have chosen to prefer our kinsmen within the empire to the foreigner without, and upon that we stand or fall; upon that this government stands or falls.
We still believe-and I have heard no argument that in any sense touches the question-that it is highly desirable that this country should know that it has a fixed and certain market embracing a quarter of the population of the world, a market that will not be taken from it as the result of a general election in any particular part of the empire, and that there will be a constant opportunity during a period of five years, with the ebb and flow of trade to establish a channel that, if it succeeds, will be perpetuated. If it fails it will be terminated.


William Lyon Mackenzie King: The Prime Minister says I am taking the position that I favour trade agreements between Canada and foreign countries but that I do not favour trade agreements between Canada and other parts of the British Empire. There could be no possible misrepresentation of my attitude greater than that. I have repeatedly said there is everything to be said for trade agreements between different parts of the empire, (Mr. Bennett.]
provided that those trade agreements do not restrict or prevent us from making trade agreements with other countries of the world which may be ito the advantage of Canada, and which being to -the advantage of Canada I claim will also be of advantage to the British Empire. These agreements go much further than simply affording to other parts of the empire an opportunity to trade in Canada on certain terms. If the agreement under discussion simply gave South Africa a preference in our market I would have much less to say about the five year period for which the agreement is to run. Give to the countries of the British Empire an opportunity to trade in our market under a preference afforded through a lowering of tariffs and I will not quarrel greatly with hon. gentlemen opposite over any length of time they wish to have such an agreement run.
That is not the situation here, Mr. Speaker. Under the guise of a family agreement the government is asking us first to raise the tariff against foreign countries and then to agree to maintain the tariff against foreign countries at the very high level which the margin of preference may necessitate its remaining at a margin which may be prejudicial to the great consuming and producing portions of the country, and in many cases to the manufacturing interests of Canada as well. In connection with these agreements we also must remember how inordinately high our tariff is at the present tiime, and how it came to be at such a level. It is not the tariff which my right hon. friend inherited when he came into power in 1930. In the fall of that year the tariff which existed at that -time was increased against Great Britain as well as against foreign countries. That tariff was further raised in 1931, and last session it was increased yet again. It is higher -than ever now by virtue of certain interpretations which have been put upon legislation passed and by other features of its administration, and it is that particular tariff-at inordinate heights-which in some cases is being lowered to a very slight extent but -which is so fixed by marginal preferences as to maintain a very considerable protection against foreign countries during the entire life of these agreements. This is not a family feature at all. As I said before, the family feature which obtains where a preference is given through a reduction of tariffs is all to the good, but when apart from this you ask us so to fix our tariffs that we cannot trade with other countries during that period of time on any terms under which we may wish to trade with them, you create quite a different situation.

South Africa
Let me put this in the clearest possible terms. As I read them, these treaties or agreements are not so much treaties for the purpose of promoting trade within the British Empire-which is a very laudable end, and the purpose which hon. gentlemen opposite are putting forward-as they are treaties to make more difficult trade between different parts of the British Empire, and Canada in particular, and the other countries of the world. That is exactly the case, and an examination of the treaties will confirm that statement. May I point out that there is a school of imperialists who believe that this is the right thing to do, and I do not hesitate to say that the Prime Minister belongs to that school. He believes that is the very thing he is doing. I believe hon. gentlemen opposite may be thoroughly honest and sincere in their point of view, When the Prime Minister says that he believes the way to bring about a consolidated British Empire is by tariffs which will make difficult trade with other parts of the world he is only saying what Mr. Hewins says in the book which the Prime Minister quoted the other day; he is only saying what Richard Jebb has said in his treaties on the imperial conferences, he is only saying what hundreds of other imperialist protectionists have said is the best way of securing a consolidated empire. My view of what is best for the future of the British Empire, however, is that it does not lie in the direction of a consolidation which will lead to the centralization of government and the adoption thereby of imperial policies for the empire as a whole. I believe that the conception of the British Empire as reached at the imperial conference of 1926, which has found its expression in the statute of Westminster passed this very year, and which looks upon each part of the empire as a self-governing community, sovereign in its fiscal and all other rights is the only true conception. I believe that on this basis the British Empire will last, but I say that the moment you try to bring about a consolidated empire by way of tariffs which restrict its parts from trading with other parts of the world, at that moment you begin [DOT]to create a kind of protection that will help [DOT]destroy the empire. The British Empire has been founded on freedom, not restraint, and the whole evolution of the empire has been through getting rid of restraints, political and [DOT]otherwise, and making each part of the empire free to determine its own policies.
Hon. gentlemen opposite seek now to reverse the whole process and, by this system of tariffs, make it increasingly difficult for this country, as a part of the British Empire, to
[DOT]trade with other countries. If we are called [DOT]upon as members of parliament to consider these matters, having considered their ill effects, desire to change any schedule, then we [DOT]are charged with disloyalty to the other parts of the British Empire. I say that is not a [DOT]fair or right position in which to put this-country or this parliament in relation to other [DOT]parts of the empire.
My right hon, friend quoted a resolution which was passed in 1917, at an imperial conference held in London in that year, which, resolution declared that every effort should be made to develop the resources and industries of the different countries of the empire in such a way as would help to make the empire independent of other parts of the world. He says that we are going counter to that resolution and adds that I was a party to the approving of it. Does anyone fancy that I would have approved of that had I thought that it would be construed as meaning that the only way in which the British empire could be made independent of other parts of the world was by means of tariffs which would render it impossible for Canada to carry on trade with other countries? That is the interpretation he places upon the resolution,, and that is the trouble with my right hon. friend and others who think as he does. They think altogether in terms of protection and protection alone. They cannot conceive of the possibility of a great British Empire founded upon freedom, above all freedom of trade, notwithstanding the fact that Britain has reached her present prominence through decades of fiscal freedom and freedom of trade. If I w^ere to express my own mind I should say that in my belief every portion of the empire would develop more fully and would promote the development of a greater empire, as a whole, and the empire would become more independent of the rest of the world,' if all its component parts along with other nations were free to develop their own industries in the way they deemed best, regardless altogether of tariffs.
There are many ways in which the industries of a country can be built up, apart from tariffs. Indeed, I believe that tariffs have done as much to destroy the industries of countries as they have done to help to create industries.


An hon. MEMBER:: Why keep them?


William Lyon Mackenzie King: They have done this for the reason that under protection capital has been diverted into channels that have been relatively unproductive, whereas under a system of free competition such capital
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would have gone into industries which the country was best adapted to develop, and the point would have been reached long ere this where the countries of the empire would have been largely independent of others. That is the significance which I attach to that resolution of 1917-preference within empire by the lowering, not the raising of tariffs,-and which I attached to it at the time it was under discussion at the imperial conference to which my hon. friend has referred. That resolution was accepted, not because of its wording or of any interpretation that could be put upon it by those who were politically opposed. I took care to inquire into the significance of the terms and I state again that if I had thought for a moment that there would have been put upon that resolution such an interpretation as that which my right hon. friend seeks to put upon it at the present time, I would certainly not have agreed to it. My hon. friend asks, what about some wealthy individual who lost a huge fortune at a shot because of the Fordney-McCumber tariff? I ask him, What about the thousands and hundreds of thousands of people who to-day are finding it difficult to obtain food, clothing and shelter-the people who under these agreements which are before the house are going to be compelled to continue the payment of a toll not only to the country in the form of taxes, but to the textile and other industries as well, in the form of dividends and profits? These are the people about whom I am concerned. The individuals who possess vast estates and great -wealth will be able to look after themselves. But when you ask us to bind Canada for five years to some of the high tariffs fixed in these schedules, then I say that the time has come to inquire how these schedules will affect the hundreds of thousands of consumers in this country, who are finding it difficult to get food, clothing and shelter and all the necessities that are affected adversely by the height of these tariffs.


Henry Herbert Stevens: The right hon. gentleman has focussed his persistent opposition to these agreements mainly upon two points; one is the five year period, and allied -with that, he says, is the fact that we are binding this country in a certain limited list of items to a fixed preference. That is to say, we are binding ourselves to maintain a tariff, a general tariff or an intermediate, of an amount equal to that preference at lea*. And he cites that as a reason for the bitter opposition to this and the other agreements. He says it is a violation of principle and, in his recent remarks as in several speeches he has delivered,

he declares that it is a very serious departure from the best known' principles of governmental procedure.
I have here the West India Treaty, article 2 of which reads:
Subject to the provisions of the Customs Tariff, 1907, the Dominion of Canada grants to the articles enumerated in schedule A, being the produce or manufacture of any of the colonies aforesaid, when imported into Canada, the preferential treatment indicated, in respect of each such article, in the said schedule A.
That is the first provision which I would cite from that treaty. Then in article 20 I find that:
This agreement shall remain in force for twelve years, and thereafter-
And so forth. Then I look at schedule A and I find, with respect to sugar of polarization of 96 degrees-the degrees vary up or down from that point, but 96 is the point at Which the greatest quantity is imported-that we undertake to maintain a preference of $1 per hundred pounds. Now, my right hon. friend has just been shedding crocodile tears with regard to the food) of the poor; but he, himself, bound Canada-and we are still bound

for a period of twelve years to maintain in this country a tariff of at least $1 per hundred pounds, or one cent per pound, on sugar.


Edward James Young: It has been raised since.


Henry Herbert Stevens: And that provision is there yet; you could not depant from it. It binds our hands, just as my right hon. friend remained bound all the time he was in power. We are still bound by it.


William Lyon Mackenzie King: Where is sugar now?


Henry Herbert Stevens: Precisely where it was
then.


Edward James Young: No; you raised it by order in council.


Henry Herbert Stevens: My hon. friend is not
going to get me away from the point I am discussing. I shall in a moment state what changes, if any, have been made. I will have it looked up, but I do not believe there were any changes. The point I am making, however, is that under this agreement the right hon. gentleman bound the parliament of Canada for twelve years to maintain a tariff of at least SI per hundred pounds on sugar. As a matter of fact, it was in this agreement that the general tariff was fixed at SI per hundred pounds above that of the West Indies. I find that bananas were made free to the West Indies as against a general

South Africa
tariff of 50 cents. Tlie right hon. gentleman bound us there again, on fruit for the pool people of Canada, to the extent of 50 cents per bunch. I come now to cocoa beans- someone mentioned cocoa beans as the food of the poor because it was cheap; this statement was made in the debate the other day. In regard to cocoa beans, roasted or crushed, the preference per hundred pounds is SI .50 intermediate and |2 under the general. The food of the poor! For twelve years the right hon. gentleman tied the hands of this parliament. Lime juice, we find, carries a preference of 15 cents per gallon, and limes are free as against a general tariff of 15 cents. What a terrible thing to put in a statute! He tells us that for twelve years we must maintain a tariff of 15 cents. I come now to arrowroot, which is the food of the sick and invalids: free as against a general tariff of 14 cents per pound. Then we have cocoa-nut free as against a general tariff of 75 cents per 100 pounds; grape fruit, a preference of SI under the general tariff. This is the language of this agreement under which my right hon. friend tied our hands for twelve years. On rum-and let me draw the attention of the hon. member for Lisgar to this- his leader tied the hands of this parliament with a preference of $2 per gallon, proof strength. Onions

I suppose that is the food of the rich-free as against a general tariff of 30 per cent. The hands of parliament were bound for twelve years with a tariff of 30 per cent. Cocoa butter free as against a general tariff of two cents a pound. Coffee, green, free as against a tariff of three cents per pound. Think of tying the hands of parliament for twelve years by imposition of a duty of three cents a pound on coffee! That is scandalous. Ginger and spices, free as against a general tariff of 124 per cent. Pineapples, fixed at one-half cent. Sponges, free as against a general tariff of 174 per cent. In order to make the matter doubly clear this provision is made:
Provided that nothing herein contained shall prevent the government of Canada from changing the rates of duty provided the preference* granted herein are maintained.


Richard Bedford Bennett: That is the whole story.


Henry Herbert Stevens: There was nothing wrong
in tying the hands of parliament for twelve years, nothing wrong in tying the hands of Canada for twelve years on sugar, beyond doubt an important item of daily household use; nothing in the world wrong with that, but, my! what a terrible thing this government is now doing in dealing with the mother
country and South Africa! I find some very illustrious names signed to this agreement: the Right Hon. George P. Graham, now in the Senate; and two others who have passed away, the late Mr. Robb and the late Mr. Low; the Hon. W. R. Motherwell, Mr. John E. Sinclair, who has been translated to the other house; the Hon. P. J. A. Cardin, now in the front benches opposite, then a member of the government.
Some of these gentlemen, still with us, are voting to condemn this government and to put it out of office because it makes a treaty with the mother country for five years and fixes a preference on a certain list of articles, yet these gentlemen bound the country for twelve years in precisely the same way. I am not quarrelling with the right hon. gentleman for doing what he did; not at all. But what I say is this: What degree of confidence can anyone in this house or out of it put in the sincerity of the right hon. gentleman now? Does he think he has added an iota to this debate by the attitude he has taken? Or the hon. member for South Battle-ford, who is so eager to intervene in the debate?


John Vallance: I did not say a word. I was busy listening.


Henry Herbert Stevens: My hon. friend has that
dark growl which percolates through the chamber. He will stand up and vote slavishly for a twelve year maintenance of a cent a pound on sugar, but he will oppose and criticise this government for doing precisely the same thing as was done by his own party when in power, the only difference being that the time limit in this case is five years instead of twelve.
I cannot understand my right hon. friend. Not only have we this action of his before us, but wa have him in imperial conferences proclaiming to the high heavens the very same general principle that the present Prime Minister sought to carry out in these agreements. He has given utterance to that in the old country and to the world from the public platform. I noticed a few minutes ago he was quite careful to correct some of his utterances by saying:	Of course we are in
favour of this family idea. He was not very much in favour of this family idea a few days ago, but since these damning quotations were read the other night he has thought it desirable to place himself a little more in line with his own utterances when he was in office and when he was over at the imperial conference. I invite him now to the penitents' bench; I invite him to put himself in line
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with himself when he was negotiating this treaty with the West Indies, to put himself somewhere measurably near his attitude when he had the responsibility of office, instead of putting himself where he is now, in bickering opposition to these things. Neither the right hon. gentleman nor those associated with him can find any reasonable fault with these agreements. I can understand some of my hon. friends in the far corner opposite, who hold strong free trade views, and the hon. member for Weyburn, who has wobbled very much on that question in recent years, taking objection to any of these things, but it does not lie in the mouths of hon. gentlemen directly opposite, who sit behind the right hon. leader of the opposition, who give their allegiance to him, to criticise this government, for its tariff policy, other than perhaps in ^ regard to some of the items; because in principle they are not at all apart from us in what we are doing here, and they will find it exceedingly difficult to hide their heads from justifiable attack in regard to the former utterances of their leader.


Edward James Young: Practically every argument advanced by hon. gentlemen opposite in reply to those presented from this side against the treaties has amounted to this, that in some past time the Liberal party did a similar thing. I am not greatly concerned about what the Liberal party may have done in past ages. I am more concerned about these agreements that are before us tonight. My hon. friend has just said that we, when we were in power, fixed a duty of one cent a pound on sugar for twelve years. My hon. friends opposite have increased it since they have come into office.


Henry Herbert Stevens: May I interrupt my hon. friend? My officers have just checked the matter up and they tell me there has been no change since we have been in office.


Edward James Young: There is no change in the tariff schedule, but an order in council was passed fixing a value for duty on sugar. We raided the question in the house last session, and the Minister of National Revenue explained the situation in this way: that the beet growers of Canada came before him and told him that unless something was done to increase the duty on sugar they would not put in a crop.


Richard Bedford Bennett: Not the duty on sugar It was to take care of the sugar that came from Cuba under circumstances which, as the hon. gentleman knows, were destroying not only the beet sugar industry here but the

West Indian sugar industry as well. It was to preserve the market we had promised them under the treaty as well as the beet sugar industry here that the order in council was passed dealing with Cuban sugar.


Charles A. Stewart: The duty was raised by order in council.


Richard Bedford Bennett: Not the duty.


Edward James Young: The value for duty was fixed, and so the duty was raised. The minister told us that that was done to encourage the farmers to sow beets, but what did he do? He raised the duty on refined sugar and left the duty on raw sugar where it was.


Richard Bedford Bennett: That was covered by the treaty, and he could not change it. Surely the hon. gentleman knows that.


Edward James Young: Then what benefit was the beet grower going to get out of it? He was going to sell raw sugar.


Richard Bedford Bennett: It kept Cuban sugar out.


Edward James Young: The beet growers went home thinking they were getting something, but my hon. friend raised the duty on refined sugar and left the duty on raw sugar where it was. Article 23 of the agreement between Canada and Great Britain reads:
In the event of circumstances arising which, in the judgment of His Majesty's government in the United Kingdom or of His Majesty's government in Canada, as the case may be, necessitate a variation in the terms of the agreement, the proposal to vary those terms shall form the subject of consultation between the two governments.
That is to say, if the governments of Canada and Great Britain are agreed that the agreement should be varied they can hold consultations and arrange to vary it, but there is no such provision for changing the South African agreement. If you will look at the schedules in the South African agreement, you will find that most of them read, preferential rate, preferential rate, preferential rate. The fact that this South African agreement will be in existence will nullify article 23 of the agreement between Canada and the motherland. Subsection 2 of article I of the South African agreement reads:
To enjoy the benefit of the tariff advantages provided for in section 1 of this article goods originating in and coming from the Union of South Africa shall be imported direct into Canada.
I take that to mean that unless the goods come direct from South Africa to Canada they will not enjoy these preferential rates but

South Africa
will come under the general rates. Am I right in that? I turn to the customs tariff of Canada, and appendix No. 1 reads:
The British preferential tariff shall apply to goods the produce or manufacture of the following countries

Then follows a long list of countries in which is included the Union of South Africa. Further down on the same page I read:
Provided, however, that goods entitled to the benefits of the British preferential tariff shall be accorded such benefits when such goods are shipped on a through bill of lading consigned to a consignee in a specified port in Canada when such goods are transferred at a port of a British colony or possession not enjoying the benefits of the British preferential tariff, and conveyed without further transhipment into a sea or river port of Canada.
That is to say, heretofore South Africa enjoyed the preferential rates. Now the rates in this schedule are mainly preferential rates. South Africa enjoyed them before, but she was allowed to ship her goods to England, transship them from there to Canada, and still get the benefit of the preferential rates; but that privilege is denied her in this agreement.


Richard Bedford Bennett: Do you not suppose that South Africa might be the one to complain? They are satisfied.


Edward James Young: I am pointing out that under this agreement South Africa will have to ship direct to Canada, and if she ships to England and then transships to Canada she does not get the preferential rate.


Richard Bedford Bennett: Who suffers from that?


Edward James Young: We will suffer. Further down I read this:
The importer of goods entitled to the benefits of the British preferential tariff shall be entitled to a discount of ten per centum on the amount of duty computed under such tariff, when such goods are conveyed without transhipment from a port of a country enjoying the benefits of the British preferential tariff into a sea, lake or river port of Canada.
That is to say, hitherto goods coming directly from South Africa to Canada paid ten per cent less than the preferential rate. Now, with that clause abolished and the goods required to come direct from South Africa to Canada to get the preference, they will not get the benefit of that ten per cent discount.


Henry Herbert Stevens: Oh, no.


Edward James Young: It is there in plain English.


Henry Herbert Stevens: My hon. friend is wrong.


Edward James Young: He is right. These goods are not allowed to be transshipped under this
agreement. Hitherto if they came direct without being transshipped they got ten per cent below the preferential rate. The result is that the effect of this agreement has been to increase the duty on goods coming from South Africa to Canada by ten per cent.


Henry Herbert Stevens: That is wrong.


Edward James Young: It is not. Read the section.


Henry Herbert Stevens: I am very sorry, but my hon. friend is wrong.


Edward James Young: It reads:
The importer of goods entitled to the benefits of the British preferential tariff shall be entitled to a discount of ten per centum on the amount of duty computed under such tariff, when such goods are conveyed without transhipment from a port of a country enjoying the benefits of the British preferential tariff into a sea, lake or river port of Canada.
When you look at the schedule of this agreement you will find that most of the rates are substantially the same as the preferential rate was before.


Henry Herbert Stevens: If my hon. friend will permit me, the whole preferential is still enjoyed by South Africa.


Edward James Young: But subsection 2 of article I of the agreement between Canada and South Africa provides that unless the goods come direct to Canada they do not enjoy the rates set out in the agreement, and if they do not enjoy those rates they will pay the general rates. Surely that is plain enough; anybody can understand it. Most of the schedules are the same as the preferential rate. Why, then, make an agreement with South Africa fixing the duties at what they were without the treaty? The reason I believe is to be found in article IV of the agreement between Canada and South Africa. It reads:
His Majesty's government in the Dominion of Canada will, in regard to the goods enumerated in schedule A maintain the margins of tariff concessions represented by the difference between the rates accorded to Union goods in that schedule and the presently existing rates on similar goods when imported from any foreign country.
That is to say, this agreement does not lower the duties on goods coming from South Africa; it simply agrees not to lower the duties on goods coming from anywhere else. We have raised the duty on goods coming from South Africa by ten per cent, and we are agreeing not to lower them against any other country.


Edmond Baird Ryckman: I am sorry to have to take any part in this debate, but I have been drawn into it by the reference made to sugar.
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The situation in regard to sugar was this. There was a very important sugar manufacturing industry at Wallaceburg, also at Chatham. Six thousand farmers enjoy the privilege, so long as it is offered to them, of furnishing sugar beets to this factory. It is an important factor in the life of everyone who lives in that district, and anyone who knows anything about the industry is well informed with regard to it. Remember that there are three points at which those who seek to attack our sugar market in Central Canada may do so. There is Windsor, and next Toronto, and farther east, Montreal. This factory at Wallaceburg said: We want to help those six thousand farmers and we want to take care of all the sugar beets with which they can supply us, but owing to the transportation situation, refined sugar can be landed in Toronto at a rate which we cannot beat because of the dumping; they do not take account of the transportation charges, and in order to kill us in the western part of Ontario they are furnishing sugar at such and such a price. Notwithstanding what may be said on the other side of the house, this government was sincerely anxious that those six thousand farmers, and it may be a much greater number than that, should get the benefit of the sugar beet industry. The company undertook that it would not raise the price of sugar, so what we did was simply to step in and fix the value for sugar, and to tell those who wanted to knock off the freight rate and dump their sugar on the market to go east and west, that they could not do it. The action was taken in the interest of the farmers, and, I submit in the interest of all Canadian trade.


Edward James Young: Was it on refined or raw sugar?


Edmond Baird Ryckman: Refined.


Edward James Young: Precisely.


Edmond Baird Ryckman: Now that I am on my feet I should like to address my remarks to one argument concerning this or any other of the agreements. These trade arrangements were reached through negotiations. In this instance the conclusions were satisfactory to the representatives of South Africa, and the representatives from the United Kingdom were satisfied with their agreement. The agreements were bilateral, such as one government might enter into with a neighbouring government. In such case one's neighbour may be satisfied with the way he has been treated, and you may be satisfied with the way he has treated you. Why waste the time of the house dealing with these matters? Investigate them, surely; but these are agree-

ments reached by men of equal ability-let me put it that way-by men with ability equal to that of any hon. member in the house. The agreements represent their bargaining as well as ours. Why inveigh against us? Why suggest that the whole responsibility for the agreements and the results flowing from them depend upon the party on this side of the house? In our dominions there are parliaments whose representatives sat with us. Those men-Olympic men, may I say-did their share in framing the agreements, and I suggest that when hon. members opposite criticize us they are inveighing against the representatives of other parts of the empire who agreed that the deliberations in Ottawa were in their own interests as well as ours. If they were satisfied that their interests were helped by the agreements at the conference, surely it is fair to say that they did not, as has been suggested in this house, throw into the air all rights and benefits accruing to them from constitutional law and the like. They are just as anxious to maintain the dignity of the component parts of the British Empire as are any hon. members in this chamber. When accusations are lodged against the party on this side of the house I should like the accusers to bear in mind that these agreements were entered into after thorough discussion, and I resent the idea that there was anything in the nature of coercion. It was my privilege to be a delegate, and as such I believe I saw what was taking place.
I have been pained to hear the allegations that coercion took place, and the suggestion that there were unseemly arguments. I heard nothing of the kind. Remember that these agreements have been reached after deliberations between men sitting in this house and others from beyond the seas, men who were just as anxious to work for the benefit of their countries as we were to work in the interests of ours. I suggest it is not fair to pillory this side of the house alone and to state the intention of overturning the agreements, because these agreements were concluded only after deliberations with men who are not now here but who worked in concert with us.


William Duff: Is it not true that the additional price fixed on granulated sugar by way of value for duty purposes was also fixed on raw sugar?


Edmond Baird Ryckman: I have not that information before me at the moment, but I shall be very happy to look it up.


Edward James Young: The bulletin mentioned only granulated sugar.

South Africa
[DOT]911
Mr. RYiCKMAN: Probably the hon. member for Weybum knows.


Edward James Young: The bulletin referred only to refined sugar.


Edmond Baird Ryckman: I am told that it was for refined sugar only.


James Layton Ralston: I do not wish to take the time of the committee for more than a moment or two, but I do not think the Minister of National Revenue should be impatient and talk about what he has termed a waste of time. We must remember that these agreements are important, and have been so regarded by the government. The country, the press and the public generally have followed their history, and aLl people have been interested in the results of the conference. I feel therefore that we ought to be forgiven if, not as olympians, but as ordinary individuals we try to find out what is in them, and subject them to the scrutiny prompted by our sense of duty, so that we may discharge our responsibilities as legislators.
The minister has mentioned that other, men in other countries have been parties to the agreements, and has suggested that in criticizing Canadian representatives at the conference we are criticizing people in other countries. I want him and the committee to remember that there is a vast difference between the agreement made by representatives from the United Kingdom and that made by the Canadian representatives. Within the last few days we have been shown very forcibly that while we may have made an agreement which binds us solidly for five years, men on the other side of the Atlantic, with regard to the long list of articles to which the Prime Minister referred in his speech when introducing the resolution, consider themselves free to change their duties as they see fit. They allege they are not bound for five years, and therefore I submit they are not open to the criticism which may properly be levelled at the heads of hon. members opposite. That is the first difference between the agreement as it applies to us and as it applies to other countries. My suggestion is that that constitutes one of the essential points of criticism. When we look at the United Kingdom agreement as defined in Great Britain and find that we receive only free entry, but no agreement that the duties are to be kept up or imposed against the rest of the world, and compare with that our agreement which provides that the margin of preference shall be maintained, and that the present tariff rates on one hundred and fifty-nine articles are to be pegged for five years, we immediately realize the difference.
The Minister of Trade and Commerce has invited criticism, I submit I have made a valid objection, and one which has received considerable attention in Canada. My hon. friends opposite have tried to slur over the suggestion that Great Britain was not bound. The statement was made in the British house only a few days ago that Great Britain is not bound for five years, but we are. The committee and country may as well get that idea into their minds.


Henry Herbert Stevens: I know the hon. member does not wish to be unfair; he has invited me to state the matter clearly. The Union of South Africa is bound precisely the same as the Dominion of Canada.


James Layton Ralston: Yes, but I am answering the argument made by the Minister of National Revenue and by the Prime Minister, who talked about family agreements. The agreement with South Africa is merely a side issue; the five year term there may not mean much one way or the other. Hon. members opposite are always impressing upon us the fact that they have made some splendid agreement with the United Kingdom and that when we criticize this government we are criticizing gentlemen on the other side of the ocean. I am pointing out that there is good ground for criticism of our representatives who have made an agreement binding us for five years, but have not required the same preference in our favour.
The other objection is this: What we have tried to say and what we will continue to say is that the very spirit of economic and fiscal relations within the last year or two years has been towards lower tariffs. And you will find as late as last month, October of this year, the report of the Bank of Nova Scotia again reiterates that the world-wide isolation by means of tariffs is one of the things which is causing the present difficulties and preventing the return of prosperity. We hoped and believed, the world hoped, and I am sure Canada hoped, that this conference would have been the beginning of a lowering of tariffs. Mr. Baldwin in his opening address made it very clear that he expected and hoped that preferences would be reached by lowering tariffs and not by raising them. The point we are making, and that is not, and I think cannot be answered by the other side, is that on nearly one hundred and fifty -items of the United Kingdom agreement-I cannot tell how many in this, because I have not examined it-on nearly one hundred and fifty items the tariffs have been raised. And instead of having freedom of action we have a higher tariff nailed on Canada than has ever been
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there before. That is one of the differences between this and the West Indies agreement- and I commend it to the Minister of Trade and Commerce-the West Indies agreement in general did not raise tariffs, but in the United Kingdom agreement tariffs have been raised on nearly one hundred and fifty items in our schedule in order that a preference might be given. And this at a time when the tendency of the world in regard to tariffs-and everyone is talking about it, not only economists, who were rather sneered at by the Prime Minister the other night-


Richard Bedford Bennett: That is not correct.


James Layton Ralston: -but statesmen and men of affairs and business leaders are all saying that the time has come to reduce tariffs. Yet in face of that this conference is held and Canada emerges with an added tariff on nearly one hundred and fifty items, and that tariff riveted on us for five years. That I submit is an objection which is fundamental and goes to the very root of these agreements. That is why we are taking the time, in spite of what my hon. friend the Minister of National Revenue, said to impress that on our friends opposite and on the country generally.
My right hon. friend the Prime Minister says it is necessary to have stability, so we must have this for five years. I asked him then why did not the statesmen from Great Britain, -the men from Olympus as they were referred to by my hon. friend the Minister of National Revenue-give us a five year preference and stabilize our trade relations?


Richard Bedford Bennett: She did on practically all the agricultural products of Canada.


James Layton Ralston: Yes, my right hon. friend talks about the agricultural products-


Richard Bedford Bennett: Look at the rest.


James Layton Ralston: My right hon. friend did
it very cleverly, very a'bly; we all admit his ability. He stood up in this house and put on the table a list of I think about one hundred and fifty items, and the opening paragraph of his speech left the implication that we had for five years a preference of the difference between the duties which were laid down in the schedule which he presented and free entry. We find that is absolutely empty, there is no such thing, we have not any preference on those items.


Richard Bedford Bennett: That is not so. The hon. gentleman must know that that is not so. Read the agreement. The hon. gentleman surely does not mean that. There is a guaranteed list of agricultural products on which there will be no change for five years.


James Layton Ralston: My right hon. friend cannot get me away from my point. I am referring to article I, I am talking about the list of articles on which Canada is guaranteed free entry, and I point out to him that the list of articles which he laid on the table of the house, in connection, with which he suggested that Canada was guaranteed free entry, does not provide a preference for Canada. It is true that under article 2 there are some items which get a three year preference.


Richard Bedford Bennett: A five year preference.


James Layton Ralston: A three year provision is made. It is true there are a few articles on which there is a five year term. But generally speaking I say that far the largest number have no guarantee of preference for a single month or a single day. I say that to my right hon. friend in all seriousness; he says we must have stability and that is the reason for the five years. I say to him, why did he not get it in regard to Canadian products?


Richard Bedford Bennett: We did.


James Layton Ralston: He did in regard to a few; why did he not in regard to the articles mentioned in article I? And echo answers "why?"


Some hon. MEMBERS:: Oh, oh.


Armand Renaud La Vergne: Hon. members may not interrupt unless the member speaking consents.


James Layton Ralston: I am quite willing to be interrupted: I am dealing with a situation which I think is pretty well admitted now. We have got down to brass tacks, after a long time, and we find that only on schedules B and C is there any guarantee of a certain time for preference, and those articles constitute a very small percentage of the total articles in the United Kingdom agreement. I submit then, Mr. Chairman, that there are these two fundamental differences at least, besides others which have been mentioned, which I think should lead the house to pause before it approves the second section of this bill.
Now with regard to the method of dealing with this matter: I suppose the ruling has been made-the right hon. Prime Minister has rather intimated that we may not discuss the schedule.


Mr.   CHAIRMAN@: Yes; hon. members may discuss the schedule and refer to the tariff proposals.
NOVEMBER 7, 1932 __________ South Africa


James Layton Ralston: But it does seem a contradiction in terms, first solemnly to pass a section saying that schedule so-and-so is hereby approved and not have passed on schedule so-and-so to decide what shall be the subject of that approval.


Armand Renaud La Vergne: You will have to change the rules.


James Layton Ralston: Well, I do not know of
any rule.


Armand Renaud La Vergne: I have referred the hon. member to the rule.


James Layton Ralston: But it seems wrong. Take for instance a couple of items. Take corn-meal; do people realize that by this schedule -not this section, except indirectly-by this schedule the duty on cornmeal coming into this country is pegged at twenty-five cents for the next five years? My right hon. leader says it is by this very section, and that is true; because when we pass this section we approve the schedule Which makes cornmeal free from South Africa. But if we look at our tariff, which most of us have not done, we find that the duty against foreign cornmeal is twen'ty-five cents and since we agree to maintain the margin of preference to South Africa it means that our general tariff on cornmeal is 'pegged at twenty-five cents for five years. Take raisins and dried currants; from South Africa they are free, it is true, but the duty is pegged at four cents a pound on Taisins and currants from the rest of the world. Cantaloupes are pegged at 20 per cent, and so on. I mention these to show you that it seems hardly fair for us to pass this section in this way, when the only way we could pass it intelligently is by first discussing the schedule which it is sought to approve.


Armand Renaud La Vergne: The only schedules
which will be approved by this clause are the schedules which will be adopted by the house after the clauses have been considered.


James Layton Ralston: I follow that. Now grape fruit the same way, it has a tariff of one cent per pound and that is pegged for five years; sugar from $1.50 to $1.89 per hundred weight and so on and so on.


Edward James Young: I notice in the schedule an item of raisinis. I have here a bulletin issued by the department which wild be rather amusing to some hon. members:
Raisins in packages other than usual bulk transportation packages of twenty-five pounds or over are held to be subject to appraisal 53719-58
under section 36, ss. 2 of the Customs Act at not less than 5i cents a pound f.o.b. point of production. Such packaged raisins are held to he of a class or kind made or produced in Canada.
We have provision in our dumping legislation that goods of a class or kind produced in Canada are subject to dumping duties under certain conditions. Raisins are not produced in Canada, buit the department, wishing to increase the duty on them, simply declares that they are made in Canada.. I want to know if that kind of thing is to go on under these treaties, if that power is still to remain with the minister.


Edmond Baird Ryckman: I would not have my hon. friend think for a moment that there is anyone in the house who believes that raisins are grown in Canada. But packages of raisins are produced in Canada; they are processed here by three important concerns. So that packages of raisins are produced in Canada.


Edward James Young: Is that to apply generally? Can anything that is not made in Canada be declared to be made in Canada because it is packed in Canada? That would be a queer ?.rrangeiment. There is no use in having a tariff schedule, no use in having an agreement, if the Commissioner of Customs has power to say that if in Canada a box is put around a certain commodity it is made in Canada and therefore subject to dumping duty.


James Dew Chaplin: Who passed that dumping act, anyway?


Edward James Young: I do not care who put it through; it is there.


William Lyon Mackenzie King: I should like to ask the Prime Minister a question with regard to the bearing of these tariff rates upon anything that may transpire at the forthcoming world economic conference. My right hon. friend will recall having mentioned that the conference was to be held this year, but apparently they are debating now whether it can be held before next summer. However, when the conference does meet, will the fact that Canada has agreed to maintain certain of its tariffs at a certain figure in any way prejudice the freedom of that conference to declare in favour of the rescission of all tariffs, say, if they wished to go that far?


Richard Bedford Bennett: I rather think the right hon. gentleman is not serious in asking that question. What he asked as to the world economic conference was a perfectly sound question, though I do not know whether or not it touches this agreement. The truth is

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that when the matter was under debate in the house the agenda was being considered, and at that time it was thought that the date of the conference would be fixed for some time this month. I dare say the right hon. gentleman has seen what the Prime Minister of Great Britain said the other day with regard to the delay in settling the agenda, which was being looked after at Geneva. I assume that all the countries concerned will be represented at the world economic conference, and if a situation arises where it is felt desirable that there should be any abrogation, by consent, of agreements that have been entered into not only between Great Britain and the dominions but between Great Britain and foreign countries, or trade agreements between foreign countries that have nothing to do with us, I assume if it is agreed that it is desirable and in the interests of the various countries that such abrogation should be brought about there is nothing to prevent its being done. But obviously, I say, the right hon. gentleman is not serious in asking the question he has directed to me, for despite the great appreciation that he concedes me with regard to these matters-which I imagine is more illusory than real-I am not in a position to answer that question. I very much regret it.


William Lyon Mackenzie King: My right hon. friend can answer it so far as Canada is concerned. As he knows, the world economic conference is being called for the purpose of helping to remove some of the restrictions to trade. That is one of the main purposes of the conference, to see what can be done in that regard.


Richard Bedford Bennett: I do not think that is definitely stated.


William Lyon Mackenzie King: The consideration of tariff barriers, or the equivalent, is one of the questions to come before the conference- At any rate, if the -conference is not called for the purpose of helping to remove restrictions to trade, I do not see what possible service a world economic conference could render at this time, because the world must look to greater freedom of trade between nations. Surely my right hon. friend can answer this question, as to whether in his opinion he, as the leader of the government in this country, apart from all the other countries, would feel that these agreements in any way restricted his freedom in the matter of declaring for or against the abolition of the tariff or any -particular commodity that might be mentioned in the agreements.


Richard Bedford Bennett: That is a very simple
question to answer, Mr. Chairman. If I had to consider the question of sugar, for example, I would realize at once that the contract or agreement which the right hon. gentleman entered into prevented me from dealing with that matter. Therefore I could not deal with it. I would be bound in honour to respect the agreements of Canada, and if I had to deal with other countries with which we have outstanding contracts or agreements I would be bound by the same considerations. Unless the parties to the agreement consented to abrogate such agreement and terminate their rights I would have to be bound by that agreement. That is particularly so with respect to many items covered by contracts made before we came into office. We are equally bound by those we made after we came into office as by those which were made before. We will respect the obligations of Canada, because Canada is not a matter of political parties. We will respect the obligations of this dominion whether they were entered into by hon. gentlemen opposite or by ourselves; it matters not.


William Lyon Mackenzie King: My hon. friend speaks of agreements which existed before he came into office and of others which were made later. May I suggest to him that there is a consideration which might be taken into account at the moment, and that is what may transpire before this economic conference takes place and before this parliament binds the hands of its ministers with respect to any of the matters with which they may be called upon to deal at that conference. With respect to contracts existing today that bind the government perhaps we are not in a position to give a free hand to the government, but presumably we are not bound by this agreement as yet. Would the Prime Minister agree to add a clause to the agreement, to the effect that nothing herein shall be held in any way to prejudice what may take place at the world economic conference? That would serve the purpose I have in view.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: Hon. gentlemen opposite smile; but what is the economic conference for if not to try to make trade freer as between different nations? Why tie our hands at this moment if, in any way, we can postpone doing so until after the conference has taken place? May I say to hon. gentlemen opposite who laugh that this very proposal was put forward in the parliament of Great Britain.

South Africa


Richard Bedford Bennett: It was not considered.
Mr. MACKENIE KING. No, it was not carried, because the majority of those opposed to the lowering of tariffs would not support it. But we on this side feel it imperative that we should stress the importance of taking that step, and we feel that it should be taken even if hon. gentlemen opposite object.


Richard Bedford Bennett: I am sure my right hon. friend does not even mean what he says.


William Lyon Mackenzie King: He does.


Richard Bedford Bennett: He does not mean that
we should pass agreements and say by another clause that it will be just as though we did not pass them. Surely the right hon. gentleman does not mean that he would make parliament a joke, that we should pass an agreement and then put in a clause stating that in spite of the fact that we have reached an agreement, that agreement is without prejudice to the fact that there is no agreement at all. Surely the right hon. gentleman does not mean that.


James Layton Ralston: Does my right hon. friend say that would be the effect of such a clause?


Richard Bedford Bennett: There is no doubt about it. There would be no agreement at all qua the world economic conference.


James Layton Ralston: Does this prejudice the
economic conference then?


Richard Bedford Bennett: Yes; the right hon.
gentleman says it does. If the agreement is without prejudice to anything we may do thereafter it means that the agreement has no value, and we are not prepared to subordinate the honour of Canada to that position. We have signed on behalf of this dominion; England has signed on behalf of the United Kingdom, and England has passed the statute. The English parliament met twelve days after this parliament met, but they did not spend their time talking about the injury the agreement would do to Canada. That was brought up by hon. members here, who are so solicitous over the harm they say is being done to England, and who are so concerned about the injury to the United Kingdom. They can take care of themselves. They always have done so and I believe they always will do so. I have no reason to believe that they are so lacking in astuteness or love of country that they are willing to abandon their country to the care of any part of the overseas empire.
53719-58|


Edward James Young: We need someone to take
care of us.


Richard Bedford Bennett: All that is being said
now is that Canada is not letting United Kingdom goods enter our markets easily enough. Well, they agreed to these provisions, and they are fair judges. They are satisfied. Not only were the members of the government satisfied, but parliament adopted the statute by an overwhelming majority. They declared that what their representatives did in Ottawa, in agreeing to the rates of duty that Canada should charge against goods from their country, was acceptable to them. I fancy that tomorrow or the next day the measure will pass through the House of Lords and become part of the law of the country, or it may be through the House of Lords now for aught I know.


William Lyon Mackenzie King: My right hon. friend has spoken of consultation. I have no doubt that a great many people in Great Britain would be very much relieved if they thought that so far as Great Britain was concerned this and the Canada-United Kingdom agreement might stand over until after the world economic conference. Would the Prime Minister agree to consult the British government before the agreement is passed in both countries?


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: My hon. friends laugh. Apparently that is the extent of their desire to have an economic conference free to act in the interests of the different nations of the world. We only get a laugh.


Richard Bedford Bennett: I fancy hon. members are not laughing at that; they are laughing at the thought that the suggestion could be made by any reputable hon. member of this house that, having obligated ourselves forthwith to submit these matters to parliament, and having called parliament for that special purpose, while the world economic conference is still being considered we should consult with them as to not doing what they have already done.


William Duff: In view of the fact that the Minister of Trade and Commerce was good enough before dinner to intimate his willingness to give us any information we desired with regard to the schedules, I presume that my hon. friends who are opposite will not tell me to sit down, but that I am in order in asking for information. Of course, if there is any attempt at browbeating I will not sit down; I am not scared.
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Henry Herbert Stevens: You wouldn't stand for that.


William Duff: I should like some information with regard to item 135 on page 6, schedule A, "sugar above number 16 Dutch standard", and so on. I notice that this is the same as the British preferential rate, which I find is
31.64	in the other schedules. What is the duty on that item under the intermediate and general tariffs, for this class of sugar?


Henry Herbert Stevens: As regards item 135a, invert sugar, that is not the ordinary sugar that is imported. The rate of duty on invert sugar-


William Duff: I am inquiring about item 135.


Henry Herbert Stevens: The British preferential rate with regard to sugar above number 16 is
31.64	for 98 degrees to 99.


William Duff: I wish to know what the general and intermediate rates are.


Henry Herbert Stevens: My hon. friend understands that there is about a page or more of itemized degrees and so forth. He does not wish me to read all that. May I deal with the article which is commonest, 96 degrees.


William Duff: Raw sugar?


Edward James Young: Will the minister take the one at the top of the page, in italics.


Henry Herbert Stevens: I will deal with the matter referred to by my hon. friend from Antigonish-Guysborough. With regard to sugar of 96 degrees, the rates of duty are: British preferential, 29-688 cents; intermediate, $1-3255; general, $1-3255. As regards sugar, 97 to 98 degrees, the rates are: British preferential, 30-664 gents; intermediate, $1-35798; general, $1-35798.


William Duff: That will do for my purpose. Thanks very much. Will the minister please tell me now where this raw sugar has been imported from in the past?


Henry Herbert Stevens: Up until the last few months, the great proportion of it came from the West Indies.


William Duff: What part of the West Indies?


Henry Herbert Stevens: Trinidad, Barbados and Demerara.


William Duff: What about Cuba?


Henry Herbert Stevens: Very little has come from Cuba, and of course what came from Cuba came under the general.


William Duff: I should like to know how much came from Cuba last year.


Henry Herbert Stevens: I have here the imports for the fiscal year 1932, showing that Canada imported sugar to the total value of $19,843,003. The chief sources of supply were: British West Indies, $7,005,750; British Guiana, $4,299,543; Fiji, $2,596,044; British South Africa, $2,367,855; British East Africa, $1,225,420; San Domingo, $520,550; Cuba, $401,256.
>
Mr. DUFF: We are all interested in the remarks made by the Minister of National Revenue, in which he told us how very much interested he was in the 6,000 farmers around Wallaceburg or some other place-


Edmond Baird Ryckman: County of Kent.


William Duff: -in Ontario. I can understand, and we all appreciate, his sympathy for these farmers because, like him, we are all interested in the farmers of Canada, whether in Wallaceburg or Guysborough or on the Pacific slope. But what has been the result of this government's policy with respect to the duties on raw sugar? The minister told me a moment ago that under the British preference the duty was 29.688, and under the intermediate it was raised by this government-


Henry Herbert Stevens: No. It was fixed in the West India agreement by the government of hon. gentlemen opposite.


William Duff: It was raised against Cuba.


Henry Herbert Stevens: No.


Edward James Young: By order in council.


Henry Herbert Stevens: Under the West Indies treaty of 1922 the preference was fixed, with respect to 96 degrees, at $1 per hundred pounds. It was fixed definitely and the rates have not been changed up or down since then. The rates were fixed in the tariff by my hon. friends opposite, and under that treaty with the West Indies we are bound to maintain that spread of $1 per hundred pounds or one cent per pound. We cannot vary that.


Charles A. Stewart: To the West Indies.


Henry Herbert Stevens: We are bound to maintain that spread.


Charles A. Stewart: To the West Indies.


Henry Herbert Stevens: We are bound not to vary that spread of $1. If we allowed sugar from the West Indies to come in free, the intermediate and general would be $1 at least to all countries.

South Africa


William Duff: Did not the government by order in council raise the price for duty purposes on sugar coming from Cuba?


Edmond Baird Ryckman: That was not done; my hon. friend is mistaken in regard to Cuban sugar. When the hon. member for Shel-burne-Yarmouth was speaking in the debate on the address in reply to the speech from the throne, the charge was made that I had fixed the value for duty on Cuban sugar, and I remember saying then that that had not been done either by order in council or by the minister. It was a mistake then and it is a mistake now.
Mr. iSTEWART (Edmonton): Was not the price raised for duty purposes?


Mr. REID:: In the schedule in the treaty with Rhodesia, grape fruit, oranges, lemons and limes enter free, whereas in the South African schedule they are free from May 1 to December 31. What is the reason for that difference?


Henry Herbert Stevens: That is their season for this class of fruit, just as the autumn is the season with us for apples and pears. Those are the months that are useful to them.


Jean-François Pouliot: I notice that the duty to be imposed on butter by Great Britain in agreement with South Africa is fifteen shillings per hundredweight.


Armand Renaud La Vergne: The treaty under discussion is that between Canada and South Africa. The treaty between the United Kingdom and South Africa does not interest us now except probably as the basis of an argument in regard to these schedules.


Jean-François Pouliot: Very well; I will sum up my remarks in this way. Without discussing this item in particular, I sincerely believe the government-I am speaking in a general way -was within its right to make trade agreements with the Union of South Africa, Southern Rhodesia and the Irish Free State, because it was a matter of nation dealing with nation. Relations between nations may be likened to those between individuals, and this is why, without discussing each item in particular, my idea is that the only way to make treaties is to bind one nation to another nation and not for several nations or dominions to sign a treaty or different treaties at the same time and under the same circumstances with one particular nation. When this occurs it is no longer a treaty, it is an auction, and in that auction each one is to be treated in the same way. I quite understand that there should be imperial political conferences
that have for their aim to give a certain status or certain political rights to all the dominions and to each of them. But when the matter becomes one of trade, it is entirely different, because there must be competition between those dominions which have similar products to offer to the mother country or to another dominion. In this instance we have to consider not only this treaty between the Dominion of Canada and the Union of South Africa, but also the treaty that has been passed between the Dominion of Canada and the United Kingdom. This is why I say that if I approve, not the general lines but the drafting of this treaty between the Dominion of Canada and the Union of South Africa, I cannot understand how the Dominion of Canada has agreed to meet with the other dominions in order to get some advantages from Britain, because in each case when an advantage was given to one of the dominions which had sent delegates here, the same advantage was given to each one. No one could get more than another, and they all receive the same treatment on the British market.


Edward James Young: There are about fifty items in schedule A and I notice most of them receive the British preferential rate. In some of them figures are quoted and in some just the words "British preferential rate" are used. South Africa has heretofore enjoyed the British preferential rate. Why is it necessary to put those articles in the schedule when they are already enjoying the British preferential rate?


Henry Herbert Stevens: If my hon friend will
recall, this afternoon I tried to explain the policy of the Union of South Africa in dealing with their tariff. It is somewhat different from that of any of the other dominions. They give to one country a list of privileges, shall I say, that is usually limited to that country. Some of them may be extended as in this case to Great Britain, but not to the other dominions. Then they would give to another dominion privileges on a list of articles that in all probability would not be extended to the Dominion of Canada, but the list is selected as that most satisfactory to both parties. Such is the case in this agreement. But when we were fixing the rates of duty it was thought desirable and acceptable to them to put in "British preferential rate" in many cases instead of specifying a certain rate. That method leaves it free to change the item according to the change in the British preferential rate. In other words, as long as they got the British preferential rate, they were satisfied. Does that answer my hon. friend's question?
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Imperial Conference-Trade Agreements


Edward James Young: No; it has been answered in a way, but not exactly as I wanted. They were already getting the British preferential rate without an agreement; they had it on all goods. Now on certain goods we insert in the treaty that they shall enjoy the British preferential rate. Sometimes we do not say that, but we say "free", which they were before, and then we give the other rates, intermediate and general as heretofore. The effect is this: you have not changed the rate an iota on goods coming from South Africa, but you have agreed that the rates on goods coming from other countries shall not be altered, and that is the only effect of the agreement.


Edmond Baird Ryckman: If my hon. friend will allow me, I think I can answer the question. It is quite true that the British preferential rate obtained before, as the hon. gentleman has said. It is also true that Canada, had she so desired, could have altered that British preferential rate in her tariff. As a result of this agreement South Africa is, by agreement, to get the British preferential rate, whatever that may be. In a word, formerly the item could be changed from the British preferential rate. Now the item cannot be changed; it remains at the British preferential rate by agreement with South Africa.


Edward James Young: If I understand the matter aright, the position is this: we have agreed that we shall not alter these rates against South Africa and that we shall mot alter them against anybody else; that the rates shall remain for the next five years as they been heretofore.


Richard Bedford Bennett: The British preferential
rates.


Edward James Young: And also the others. Article IV says that the same margin of preference shall be continued. You now by agreement fix the rate on goods from South Africa at what it is and agree to maintain -the same margin of preference. In other words you agree that you will not lower the rate to anybody else. That is the only effect of the agreement. Has the minister further considered the objection I made a moment ago that the effect of this agreement was to wipe out the -ten per cent reduction in the preferential rate due to direct shipment ?


Henry Herbert Stevens: I have looked up the matter very carefully. My hon. friend will realize that the provisions that are set forth in the Tariff Act and in the regulations based thereon are fairly well standardized and underfMr. Stevens.]
stood by those who are administering the act. That is, in enforcing the law, it becomes necessary to establish certain interpretations. In regard to the interpretation of the clause to which my hon. friend refers, it means in effect this, without going into any elaborate detail, that goods from South Africa, billed directly to Canada, it being clearly understood and shown in the documents that they are destined to Canada, may come to this country via Great Britain. If they are there transshipped and sent on to Canada it does not in any sense, interfere with what we call direct routing. That is the clear-cut interpretation and practice, and it is in accordance with the regulations.


Edward James Young: In the past.


Henry Herbert Stevens: And now.


Edward James Young: Under this agreement?


Henry Herbert Stevens: And under this agreement. I can assure my hon. friend that all of that was carefully considered at the time. When he asked the question I recalled it and asked my officers to check me up and they have done so since. I can assure my hon. friend that that is the interpretation and understanding of this agreement, and further it has been the practice up to this moment; so he -need have no fears on that point.


Edward James Young: I do not know how the
courts would interpret it, but as a layman I would certainly put a different interpretation upon it.


Henry Herbert Stevens: That is the interpretation of the term direct routing.


Edward James Young: Would my hon. friend consider an amendment that would -make it clearer?


Henry Herbert Stevens: No, we could not, because it is clear now' and perfectly understood between South Africa and ourselves, as well as being the established practice. My hon. friend can accept that as definite and authoritative.


Edward James Young: Yes, but what about the
ten per cent reduction that was provided for where the goods were not transshipped?


Henry Herbert Stevens: The British preferential
rate, wherever it applies in this agreement, whether it is the broad, British preferential or otherwise, will be entitled to the ten per cent just the same. This agreement does not alter that at all.

South Africa


Edmond Baird Ryckman: My hon. friend will find a complete answer to his question in section 5 of the customs tariff.


Mr. MACKENZIE  ICING@: May I ask if
the tariff rates in schedule A are in force at the present time?


Richard Bedford Bennett: Substantially, as I explained this afternoon, they are incorporated in the schedules that are before the ways and means committee. There may be some little variation in language necessary in some of them, but they are in force.


William Lyon Mackenzie King: Then I would ask the Prime Minister by what authority are they in force.


Richard Bedford Bennett: 
William Lyon Mackenzie King: I would draw
the attention of the Prime Minister to article VIII of this agreement which provides:
This agreement shall be subject to the approval of the parliaments of the Dominion of Canada and of the Union of South Africa. Upon approval being given it shall be brought into force upon a date to be agreed upon between the governments of the Dominion of Canada and the Union of South Africa.
I venture to say that no date has been agreed upon as yet between the governments of Canada and the Union of South Africa. If there has been I wish the Prime Minister would tell us what that date is.


Richard Bedford Bennett: We agreed with the South African delegation before they left here that we would follow our usual practice in these matters, and we agreed similarly with the others as well, that when the tariff items were introduced in the form of resolutions they would contain the usual clause as heretofore.


William Lyon Mackenzie King: This act does not go into force until a date yet to be agreed upon, as I read it, and I was going to ask the Prime Minister, at the risk of again meeting with a refusal, if he would not agree with South Africa to wait until after the world economic conference before putting this agreement into effect. But that is a separate question.
I do submit that there is no authority whatever for the tariff changes proposed in this schedule being in force at the present time. This parliament has not yet approved this agreement, and yet we are told that these particular schedules are in force. In other words, taxation is being imposed upon the people of this country without the consent of parliament, and notwithstanding that the language of the agreement expressly provides that these duties shall not be imposed until a date yet to be agreed upon between the two governments. The general language which the Prime Minister has used in reply does not at all meet the situation. There may be parliamentary procedure regulating how certain rates are to go into effect, but when an agreement expressly provides that it shall not go into effect until a date yet to be agreed upon no portion of that agreement should be in force until that time.


Richard Bedford Bennett: I am sorry that my right hon. friend has not followed me. We have introduced certain resolutions which are now before the ways and means committee. The last budget that was introduced into this house by the Minister of Finance was introduced in exactly the same way, and the schedules became operative from the day the resolutions were laid on the table. This agreement as such will become operative upon proclamation, but the rates having been agreed upon and put into force as I have indicated, are now in force just as under the Dunning budget so-called the resolutions became effective and telegrams were sent to every collector of customs accordingly on the evening of the delivery of the budget. These items before us, in accordance with our arrangements, are being treated in exactly the same way and are being acted upon accordingly.


William Lyon Mackenzie King: I contend that it is wholly irregular. A budget is one thing and an agreement of this character is another. The tariff changes proposed in a budget as everyone knows, go into force the moment the tariff resolutions referred to therein are tabled. But here is a specific agreement which, according to its own terms, does not go into force until a date still to be agreed upon. There is the distinction between the two, a distinction which ought to have been taken notice of. May I draw attention to the difference between the agreement entered into between the United Kingdom and Canada and this agreement? The agreement with the United Kingdom went into effect on the date it was signed, August 20, 1932, but this agreement does not go into force until a date still to be agreed upon. In those two particulars
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the agreements are different, and that is why I was going to ask the Prime Minister, while there might be some difficulty in the way of consultation and getting a postponement of the agreement between Canada and the United Kingdom until after the economic conference, if he could not arrange for such a postponement so far as the agreement between Canada and South Africa is concerned.


Richard Bedford Bennett: 
Thomas F. Donnelly: I notice that items, 53, 54, 54a and 55 refer to commeal and Indian com. I presume that the rates on these tariff items have not been changed from what they are in the present tariff schedule?


Henry Herbert Stevens: No, they have not.


Thomas F. Donnelly: Either in the 1930 or the
1931	session the general tariff rates were changed on cornmeal and Indian corn, and I should like the minister to place before the committee the figures as to imports of corn from March 31, 1931, to March 31, 1932. I should like to have the figures for corn used both for distillation and for general purposes.


Henry Herbert Stevens: In the fiscal years 1931 and 1932 Canada imported cornmeal to the value of $159,830 and $95,109 respectively. In
1932	the United States supplied $93,958 and the United Kingdom $1,151 worth. Imports of Indian corn for distillation purposes were valued at $385,989 for the fiscal year 1931 and $95,599 for the fiscal year 1932. In the latter year the Argentine supplied $92,913 worth, British South Africa $2,023 and the United States $683 worth. As to Indian corn for the manufacture of starch or cereals, the imports of that commodity are not separately classified. Then, of Indian corn n.o.p., Canada's imports for the fiscal year 1931 were $7,031,282, and for 1932 they were $3,825,654. The imports from the United States in the year
1931	were $2,549,654, and in 1932 they were $1,306,073. From the Argentine in 1931 imports were valued at $3,449,586, and in 1932 at $851,973, In 1931 the imports from British South Africa were valued at $795,812, and in
1932	at $1,632,368. I believe these figures cover the information sought by the hon. member.


William Lyon Mackenzie King: Would the Minister of Trade and Commerce be kind enough to indicate the items in schedule A in connection with which our tariff as existing at the time of the conference has been raised in order to give the preferences there indicated, and the extent of the increase in the different items.


Henry Herbert Stevens: So far as I am aware there is no such item in the schedule.


William Lyon Mackenzie King: None at all?


Henry Herbert Stevens: So I am informed, and I have no reason to doubt the accuracy of my information.


George Gibson Coote: Section 1 of article I in the schedule refers to "goods, the produce or manufacture of the Union of South Africa." Is there any specific labour content required there, or must it be wholly South African?

South Africa


Henry Herbert Stevens: The ordinary Canadian law or regulation in that respect applies.


George Gibson Coote: Can the minister tell us what that percentage is?


Henry Herbert Stevens: In the main I think it is fifty per cent, but there may be some particular cases in which there are variations. In connection with cotton I think the content is forty per cent.


William Lyon Mackenzie King: I am wondering if the minister understood my question. I did not wish to ask whether or not there were any cases in which the duties against South Africa had been raised, but I did ask whether or not there were any instances in which the general tariff had been raised in order to give the preference to South Africa indicated in the agreement.


Henry Herbert Stevens: No, there are none; that was the question I answered-


Edward James Young: The customs bulletin I
read a while ago referring to raisins, and dated September 17, has the effect of adding a dumping duty in respect of those raisins.


Henry Herbert Stevens: That has nothing to do
with this agreement.


Edward James Young: They are mentioned in the schedule.


Henry Herbert Stevens: I am not seeking for one
moment to escape from the statement of the hon. member, but what he has said has nothing to do with the agreement. The provision to which he has referred was made in the ordinary course of the administration of the law. It has not resulted from this agreement, and has no relation to it.


Edward James Young: It would have this relation
to it, that the South African would think he was going to ship in raisins duty free, but would find that when he ships them he has to pay a duty.


Henry Herbert Stevens: No.


Edward James Young: He certainly will.


Henry Herbert Stevens: No. South African raisins will be admitted duty free under this agreement.


Edward James Young: In packages?


Henry Herbert Stevens: No,- they do not ship
raisins in packages, as the hon. member suggests. They are shipped in what are known as bulk boxes weighing from fifty to sixty pounds.


Edward James Young: I should like to ask a question regarding article V, which reads as follows:
t 1. Indian corn or maize, the produce of the Union of South Africa, imported into the Dominion of Canada at a price not lower than that quoted for Indian corn or maize of similar quality on the Baltic exchange, London, shall not be subject to the provisions of section 6 of the Customs Tariff of Canada.
2.	The provisions of this article will cease to be operative if after the thirtieth of April, 1934, the export of Indian corn or maize from the Union of South Africa to the Dominion of Canada be subsidized.
I take it that the corn imported into Canada duty free is to be brought in for sale to farmers for stock feeding purposes. Naturally under present conditions the farmer wants to buy his feed as cheaply as possible, but this particular article seeks to provide for importing com from South Africa, provided it is not sold too cheaply. If the South African charges enough for the com he can ship it in duty free; if on the other hand he dares to cut the price, he has to pay a dumping duty. Will the minister explain that?


Henry Herbert Stevens: The hon. member seems
to have explained it to his own satisfaction.


Richard Bedford Bennett: Quite so.


Henry Herbert Stevens: The point is that the
Union of South Africa did propose in some cases to pay a bonus on certain primary products when exported. This country, in common with other countries, has looked askance on goods imported into Canada under a bonus. It is felt that they do not permit of fair competition. As a matter of fact corn exported from South Africa to Canada was never bonused, because the South African government and South African exporters knew that Canada had provision for the imposition of a dump on bonused imports. They did not pay the bonus in order that the dump might not apply, and for that reason the dump was not applied. This matter was discussed fully with South African representatives and they agreed frankly it would not be fair to Canadian corn producers to have bonused com enter the market in competition with our own home-grown product. They have agreed therefore that no bonus will be paid, and in order that we may have a check it is provided that the invoices of the com when landed in Canada must show a price of not less than the
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Imperial Conference-Trade Agreements
quotation on the Baltic exchange, plus freight, on the day in which the sale was made. In order that we may have an assurance of the bona fides of the shipment, and may know that it is not bearing a bonus, we resort to that check. This bonus, by the way, was for one year, but they said they were more or less duty bound to extend it for another year, although I do not think they were very anxious to do so. It will expire in 1934. But this later provision is for this purpose, that should it not expire in 1934, then this clause is taken out altogether, is ended, abrogated, and the ordinary laws of the land will apply to this com as to corn from any other section. I trust that is clear.


Edward James Young: I understand. My hon.
friend's regard seems to be for the producers of corn in Canada who sell their com as corn. Meet farmers who grow com in Canada use it themselves for stock feeding. Perhaps the minister could give us an idea what percentage of com grown in Canada is sold as com and what percentage is fed on the farm. It is only what is sold on the market that will come into competition with imported com.


Henry Herbert Stevens: That is a question to which a good deal of study has been given recently. Com happens to be a farm product that is perhaps the most difficult of the major productions to check and keep track of. The reason is that most of the com is produced in western Canada and there are not adequate public warehouse facilities and drying plants to take care of it. Consequently it is not accumulated in large quantities like other grains such as wheat, oats, and barley, and it is rather difficult to keep track of its movement anl the manner in which it finds its way to market. But there is no doubt that a very substantial portion of that com is fed. My hon. friend must remember that the major uses for which corn is imported are, I would say, first for distillation purposes, second for the manufacture of starch and other products of that general character, syrup, cornmeal and so on; and third, in some sections of the country, particularly the maritime provinces and the seaboard, for feed. Now it will be clear to my 'hon. friend that to move com say from western Ontario to the maritimes is difficult in competition with seaborne traffic. The consequence is, I imagine, that the bulk of the com used in the maritime provinces and eastern seaboard, as well as the western seaboard, is imported com. Of course it would be impossible

to transport com from western Ontario to British Columbia, so that a considerable quantity is imported. Up to a year ago, or within the last year, the major portion of this corn came from the United States, and some from the Argentine. But by the imposition of certain tariff provisions this business has tea large extent been diverted to South Africa, and South Africa and Rhodesia will undoubtedly be the major sources of supply of corn imported into this country.


Edward James Young: Would my hon. friend tell
us who asked for this legislation? It would not be the farmers of the maritimes, for they buy com; nor would it be the farmers of British Columbia.


Henry Herbert Stevens: May I remind my hon.
friend that we are dealing with an agreement between Canada and South Africa, and this is one of the many items in the agreement which resulted in the whole treaty.


Edward James Young: That is not a very clear
answer. Somebody in Canada must have been interested in that and asked the government to put it in the agreement.


Henry Herbert Stevens: No. My hon. friend surely realizes that this is cue of the major exports from South Africa, and to put it very frankly, it is one of the items that South Africa asked us to put into the agreement.


Edward James Young: South Africa did not ask Canada to put in the clause which provides that they may not sell it too cheap.


Henry Herbert Stevens: My hon. friend is referring to what wre might call the protective clause? That was certainly asked for by the producers of Canada.


Edward James Young: What producers?


Henry Herbert Stevens: The ones I have mentioned in western Ontario. I have not to look very far around the house to see half a dozen members who were quite vigorous in their request for it, representing the producers or growers of com in Canada, and I can look out of the comer of my eye to the southeast comer, and see there hon. gentlemen who were rather solicitous for the welfare of those who said they had competing feedstuffs, such as barley.


Edward James Young: One more question. My hon. friend said we used to get this com from the United States, and by raising the duty on American corn they have diverted the trade to South Africa. Can he tell us what it cost in higher prices of corn, to divert that trade?

South Africa


Henry Herbert Stevens: Nothing at all.


Edward James Young: What is the duty on corn *coming in from the United States?


Henry Herbert Stevens: Twenty-five cents a bushel.


Edward James Young: We have added twenty-five cents a bushel to the cost of American com coming into Canada.


Henry Herbert Stevens: No. My hon. friend will find that the importations from the United States dropped-


Edward James Young: Of course they did.


Henry Herbert Stevens: -from $2,549,000 to $1,-
306,000.


Thomas F. Donnelly: Change that into
bushels.


Henry Herbert Stevens: I cannot do that offhand.


Thomas F. Donnelly: That means there is practically as much coming in as before, taking the lower price.


Henry Herbert Stevens: From the Argentine it dropped from 83,459,000 to 8851,000; whereas from British South Africa it increased from 8795,000 to 81,632,000. There has been a considerable increase from South Africa.


Thomas F. Donnelly: In 1931 when this duty was put on com the argument advanced to justify that action was that com was to be replaced by barley. We were to get a big price for our barley, which would come to eastern Canada to feed stock. Can the minister tell us how much barley has replaced corn, and how much the price of barley has increased because of this duty on com?


Henry Herbert Stevens: I can answer the first part of the question by saying that the barley stocks have been very materially reduced, I think about half this year of what they were a year ago.
Mr. ClIAPLIN: I would like to inquire of the minister what were the imports into Canada last year of raisins, and what duty was paid on those imports. I do not think you were in the house, Mr. Chairman, when the duty was put upon raisins by the "free trade" party on the other side of the house.


Edward James Young: We did not say they were made in Canada, though.


James Dew Chaplin: These gentlemen who
practice protection when they get into office and talk free trade when they are in opposition put the duty upon raisins. What for? Not to protect any home grower, but they were so much interested in raisins that they
protected the grower in Australia. That is the kind of free traders they are.


Henry Herbert Stevens: The duty on raisins is, British preferential, free; intermediate, four cents; and general, four cents. The importations amounted to 83,205,000, of which Australia supplied $2,113,000 and the United States
51.000.	000, Spain 850,000, United Kingdom
823.000,	South Africa, $9,500.


Albert Joseph Brown: What was the duty on raisins provided in the Australian treaty?


Henry Herbert Stevens: Free.


Albert Joseph Brown: I mean the general tariff.


Henry Herbert Stevens: Four cents a pound.


Albert Joseph Brown: Was it not three cents?


Henry Herbert Stevens: No, four cents.
Progress reported.



TRADE AGREEMENT WITH THE UNITED KINGDOM

[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the first reading of Bill No. 8, respecting a certain trade agreement between His Majesty's government in Canada and His Majesty's government in the United Kingdom.
He said: I understand that the motion is not debatable; I merely make it in consequence of the leave given to introduce the bill on Thursday evening last.
Motion agreed to and bill read the first time.

[Stage Direction]
Mr. BENNETT moved the adjournment of the house.
He said: The business we will consider tomorrow will be the agreement with South Africa and the second reading of the bill to which first reading was given just now. I believe that bill is printed in both English and French, ready for distribution if we can reach it. I suppose there is no chance of finishing it to-morrow, but if we should do so we will take up the other items on the order paper.
William Lyon Mackenzie King: Including the redistribution act?


Richard Bedford Bennett: Including the amendment to the Customs Act and the representation bill, before we go into committee of ways and means. If it suits the purpose of my right hon. friend not to discuss the bill at great length, assuming as I do that he and his party are opposed to it, we will be able
Questions

to go into committee of ways and means and enter into what I suppose will be the more lengthy discussion of the two.
I had thought of moving the representation bill at the proper time but I did not intend to do more than move the second reading, together with a resolution that it be referred to a committee, which might be named either before or after adjournment as the house thinks best. The right hon. gentleman will remember that in 1923 the motion was that the bill be referred to a committee, and later the committee was named by resolution which does not require notice. I will pursue either course as the right hon. gentleman and his friends desire. I thought we might give the bill second reading and provide for its reference to a committee; then the committee could be named now or when the house reconvenes as may be thought best. It did occur to me personally, however, that it might be desirable to set up the committee so that during the recess the individual members might have an opportunity to consider the question from the various standpoints from which they think it should be considered in order to enable them to arrive at a report. If during the next day or two the right hon. gentleman has an opportunity to consider the question I shall bo glad to meet his wishes in that regard.
Motion agreed to and the house adjourned at 10.45 p.m.
Tuesday, November 8, 1932