1932-11-10

UNEMPLOYMENT RELIEF

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.



QUESTIONS

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

Mr. POULIOT:: 1.	Has the line of demarcation of the internal waters of the St. Lawrence been changed since August 1, 1930?
2.	If so, on what date, on whose request, and why was this change made?
3.	What is, at present, the line of demarcation of the external and internal waters of the St. Lawrence river?


Mr. MURPHY:: 1,	2 and 3. The line of demarcation of the international boundary along the St. Lawrence waterways has not been changed since August 1, 1930.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. BLAIR:: 1.	What sums have been paid Peter White, K.C., or his partners, by the federal government, for professional services, since 1925, to date?
2.	In what cases or what services did he render for the government of Canada during the above period?
3.	How much did he charge each day and on what days did he perform services, and what were liis expense charges since 1925, to date, to the government of Canada; (b) in each case; (e) per day; (d) on wbat days and dates?


Sir GEORGE PERLEY:: This return is now tabled.



INVESTIGATIONS FOR POLITICAL PARTISANSHIP

Mr. POULIOT:: Wliat is; (a) the number; (b) the total cost of investigations for political partisanship undertaken by each department in each province since the month of August, 1930?


George Halsey Perley: This return is now tabled.



MOSAIC OR HEBREW EMIGRANTS

[Stage Direction]
Mr. DUGUAY;
1.	IIow many emigrants of Mosaic or Hebrew faith entered Canada between 1921 and 1930?
2.	On what grounds and upon what conditions did these emigrants enter the country?
3.	In what localities are the emigrants of Mosaic or Hebrew faith who entered the country as settlers established?


Mr. COOTE:: For a copy of the return made by the chartered banks of Canada to the Minister as required under subsection 2, section 91 of the Bank Act as on the last day of June, 1932.


Mr. RHODES:: I would like this to stand
until I have opportunity of conferring with the hon. gentleman who moved it.
Motion stands.



ST. FELICIEN, QUE., POST OFFICE

[Stage Direction]
Mr. G1R0UARD;
For a copy of all telegrams, letters, correspondence and other documents, relating to the inquiry into the conduct of the postmaster at St. Felieien, Quebec. Also a copy of the report made by the investigator.

[Stage Direction]
On the orders of the day:
Mr. D. M. KENNEDY (Peace River):: Looking over the record of the votes last Friday on the amendment to the amendment, I had a pair with the Minister of Agriculture (Mr. Weir), and did not vote. Had I voted, I would have voted in favour of the amendment. I ask that the correction be made.
Gasoline Prices



ILE-AUX-COUDRES-LES EBOULEMENTS FERRY SERVICE

[Stage Direction]
On the orders of the day:
Mr. P. F. CASGRAIN (Charlevoix-Sague-nay):: Might I ask the Minister of Trade and Commerce (Mr. Stevens), when it will be possible to obtain the correspondence and documents with reference to the ferry boat service between Ile-aux-Coudres and Les Eboulements? The order of the house was made for the production of these papers on the 28th of last month. I would like to have them before the session is over. I notice also that the minister on the date when the motion was adopted said:
There was no hearing and no evidence taken.
I would inform him however that in the month of May last a real investigation and inquiry took place at Baie St. Paul. It may be the minister has been misinformed but the fact is that witnesses from those and surrounding places in that district who were interested in the service were heard. That evidence was taken by the officials of the department who were sent down there to investigate the matter. So if such evidence was taken I would ask the minister to see that it is produced along with the documents referring to the service.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Mr. Speaker, I presume
it is not in order to discuss the matter, but I will try to answer my hon. friend briefly. I will inquire regarding the production. In reference to my own observations at the time the motion was made, the hon. member refers to what might be interpreted as a public hearing. There was no public hearing. An officer of the department charged with the responsibility of looking after this part of the department's business, in the course of his duties, made a personal inspection. It could not by any stretch of imagination be considered a hearing or the taking of evidence, because there was no such thought in our mind or in the officer's mind. I think that ought to be made abundantly clear. But I will look into the matter and endeavour to have the correspondence produced shortly.



RADIO BROADCASTING


[Stage Direction]
On the orders of the day:
Right Hon. R. B. BENNETT (Prime Minister):: Yesterday the hon. member for
St. Henri (Mr. Mercier) again raised the question as to the publication in the French language of the report of the radio committee

which sat last session. I find he was in error in assuming that it was not printed in French. I hold in my hand two copies of the votes and proceedings in French of May 9, 1932, No. 64, in which the report of the committee is printed in French. On the 11th of May, 1932, Mr. Morand moved concurrence in the second and final report of the special committee on radio broadcasting and it was agreed to. The hon. gentleman is not in his place, but I will send to his post office box the French copy of the votes and proceedings containing the report of the committee. Obviously he could not have had reference to the report of the royal commission on broadcasting, for that was published in English and French, the first part being in English, and on reversing it you have it in French. So there must have been some misapprehension on his part as to the proceedings of the committee not being printed in French.



GASOLINE PRICES

[Stage Direction]
On the orders of the day:
Hon. E. B. RYCKMAN (Minister of National Revenue):: Yesterday the hon. member for Willow Bunch (Mr. Donnelly) asked me a question and was good enough to furnish me with the newspaper clipping upon which the question was based. The question related to gasoline, and this newspaper item has the caption:
The Joker in the Gasoline Tariff
If it is a joker, Mr. Speaker, it is a joker that has been there from 1904, more definitely from 1907, and down to the present time. I am told that the provision in the customs tariff upon which the only allegation of a joker could be made was inserted in the tariff by the Right Hon. W. S. Fielding. The newspaper article goes on to say:
The Canadian government has been praised for removing the dumping duty on gasoline. But dispatches which intimated that all artificial valuation of this product for duty purposes was to be abandoned were astray.
I think that word " artificial " should read "real," because it deals with the fair market value of the goods for home consumption, as provided for by Mr. Fielding. That value of course included the excise tax. I think where there is an excise tax in the home market it must be obvious that that must be taken into consideration in arriving at the fair market value for any purpose whatever. If any one doubts that, let me say that the statute expressly provides that the excise tax of any foreign country in relation to the market value shall be taken into consideration

Gasoline Prices
if that country is under the general tariff. Therefore in this case the excise tax of the United States of one cent a gallon must apply. There is no escape from it. It has been the law for a long time and it is the law today.
A bulletin from Ottawa says that the Canadian importer must bring in his gasoline at the price for home consumption in the United States.
That is the law.
That is. he must import it at a price which includes the United States excise tax of a cent a gallon-slightly more than a cent on the Canadian gallon-although the United States government does not levy this tax at all on gasoline for export.
But we are not talking about gasoline for export, we are talking about gasoline and its value in the home market, what it sells for there. Of course the United States gives certain benefits to its exporters, as we do in our customs tariff:
The Canadian government imposes this United States tax.
There is nothing but an untruth in that statement, Mr. Speaker. Of course Canada does not impose any United States tax.
But the Canadian government does not get it. The United States manufacturer puts it in his pocket. His own government does not take it from him because he is exporting the gasoline. But he must, by order of Canada,-
How unfair and untrue that statement is!
-invoice the gasoline at a price w-hich includes it. So by order of the Canadian government the American manufacturer gets an extra cent.
The Canadian government does not deal with gasoline in any manner other than that in which it deals with any other articles that are brought in from the United States. This appraiser's bulletin which is referred to contains, as I have hastily summed them up, over twenty-five items, and gasoline appears in about the centre of these items, and they are all treated in the same way. So that if there is any inference that gasoline is subject to any other charge or import than relates to other articles in the same class or the same category, it is wholly untrue. And this bulletin was issued in the routine of the department in order to inform the collectors of customs specifically what under the law they should do. Instructions given and instructions expected to be followed. I am sorry to have had to labour this matter, but this article goes on to say:
The Canadian importer must not only pay this extra cent per American gallon but he must pay the exchange on it, and pay also the sales and excise taxes on the extra cent and on the exchange.
The inference there is that gasoline is subject to special taxes which are not levied in other cases. There is no hon. member of this house who does not know that this inference is untrue; in all similar cases the sales and excise taxes are levied and collected. The article goes on:
It amounts, when all is totalled up and allowance made for the difference in the American and Canadian gallon, to a cent and a half per gallon extra which the Canadian consumer has to pay because of the ruling from Ottawa that gasoline must be imported at the price for home consumption in the United States.
I have explained, Mr. Speaker, that there is no ruling from Ottawa. There is a statute of this country, which was initially placed upon the statute books by Right Hon. W. S. Fielding. The article concludes:
Under this absurd arrangement-[DOT]
Which is statutory.
-one cent of the additional impost goes to the American manufacturer and about half a cent to the Canadian government, in addition, of course, to the duty of two and a half cents per imperial gallon.
How that half cent is worked out in favour of the Canadian government I do not understand, unless it has to do with the sales tax, the special excise tax and the exchange situation, all of which apply to other cases dealt with in a similar way. Gasoline is not an exception. I submit, Mr. Speaker, that this article has a line of untruth and misrepresentation running right through it. If anyone wants to know what is the duty on gasoline today, I may say that it is the duty which has been determined by parliament, two and a half cents per imperial gallon.


Mr. DONNELLY:: But I should like to ask the minister if the government dtid not pass an order in council or appraiser's bulletin fixing the price for manufacturers or refiners at the refiners' price in the United States, and not including the one cent American excise tax.


Edmond Baird Ryckman: I would say that no such fixation was made. We did determine, as fairly and accurately as could be done, what was the fair market value of gasoline at certain pivotal points in the United States. I believed that was a fair thing to do, but it was the desire of many that it should not be done, and as a consequence that practice has ceased, as I believe my hon. friend knows. Now that we are simply carrying out the law I presume no objection can be raised by my hon. friend from Willow Bunch or by any other hon. member of this house.
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Imperial Conference-Trade Agreements


James J. Donnelly: Why were the refiners exempted from this one cent sales tax or excise tax in the United States?


Edmond Baird Ryckman: This bulletin which recites the action of the United States government in regard to excise tax upon a great many articles, became effective on June 21. I would tell the hon. member for Willow Bunch that this one cent per gallon excise tax was not enforced until June 21, 1932.


James J. Donnelly: Why were the refiners exempted?



BUSINESS OF THE HOUSE

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: I desire to say that I propose to give notice today for the adjournment of the house possibly some day next week. It might be desirable to indicate what date we will adjourn, but rather than fill in any arbitrary date I propose, with the consent of the house, to leave the date blank so that the views of those who sit opposite may be ascertained as to when we should reconvene. We will endeavour to suit the convenience of as large a number as possible, consistent with the disposition of government business. I have no preference at the moment, and if those who sit opposite have any views upon the matter I shall be glad to meet them so far as I reasonably can.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: I would say to the Prime Minister that we will abide by whatever he decides.


Richard Bedford Bennett: That is entirely satisfactory.



TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM

[Stage Direction]
The house resumed from Wednesday, November 9, consideration in committee 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-Mr. Bennett.-Mr. LaVergne in the chair.
The CHAIRMAN:: The committee are considering articles 2 and 4, together with schedule B.


Mr. BROWN:: Last night, Mr. Chairman, when the house adjourned we were discussing the question of the shipment of wheat via American ports. It will be recalled that the question has been raised a number of times in the house, and the Prime Minister has read the British regulations in regard to such ship-
[Mr. Ryekman.l
ments. Undoubtedly if those regulations are to be interpreted literally it will be impossible for Canadian wheat to get the preference if it goes via United States ports. In reading the regulations the Prime Minister did not himself undertake to interpret them; if I am not mistaken he simply read them and left it to us to put our own interpretation upon them. In my mind there is no question that if the regulations are to be interpreted literally wheat shipped via United States ports can have no expectation of getting the preference.
In discussing the matter with some of my colleagues, however, we felt that perhaps some arrangement might be arrived at if the regulations were interpreted liberally, which has been indicated as the intention in regard to all these agreements. Suspicions have developed in our minds that there is a definite arrangement in this connection which is part of a definite plan to divert Canadian wheat from the United States to the Canadian route.


Mr. QUINN:: Why not?


Albert Joseph Brown: That is the situation, and I want to know if that is true. Some grounds for that suspicion-we will not call it anything stronger at the moment-have been found in a statement recently made in the British house. I should like to quote a brief extract from an article appearing in the Winnipeg Free Press, which contains a Canadian Press report from England:
When an amendment was moved to allow the reconsignment of Canadian wheat in the United States, if the identity were certified by a Canadian government official, a statement was made by Leslie Hore-Belisha, financial secretary of the treasury. The Canadian Press reports says:
"Mr. Hore-Belisha explained the government had two reasons for refusing the amendment. Firstly, he said, customs procedure would make it extremely difficult to identify the wheat, and secondly, it would be against established policy.
"The government, he continued, had always made it a matter of policy to insist goods which enjoyed preferential tariff treatment in the United Kingdom be consigned from an empire country as well as have origin there.
"The purpose of the decision against reconsignment of Canadian wheat from the United States, he explained, was 'to encourage_ the storage of wheat either in Canada, which is to obtain the preference, or in the United Kingdom where we may obtain the advantage of storage and warehouse dues.' "
Mr. Hore-Belisha ended by asking: "Is not Canada in a position to store wheat and is not the United Kingdom in a position to store wheat?"
This has given rise to the suspicion in our minds that some understanding, some definite arrangement has been arrived at between the Canadian delegates and the British delegates, whereby such a strict interpretation shall be put upon the British regidation. If we are

United Kingdom
mistaken in that regard, we shall be very glad to hear it. I have no complaint to make against the British government; no doubt they have a right to fix any regulations they please with respect to the importation of wheat. \\ hat we should like to know, however, is what attitude has ibeen taken by our government in the matter. Has an understanding been arrived at? Have any suggestions been made in all the negotiations that have taken place between our delegates and the British delegates that such action should be taken, or has it been intimated to the British delegates that that rigid construction placed upon the regulations would be acceptable to the Canadian delegates?


Mr. SMITH (Victoria-Carleton):: Is the
lion, member opposed to Canadian wheat going through Canadian ports?


Albert Joseph Brown: There is no occasion to
answer that question. What I want to know, and what I think the country is entitled to know, is whether the passing of these regulations by the British government, and the giving of the interpretation which is indicated in this extract I have read, has been done entirely on their own initiative or whether our government has been a party to this particular method of procedure.
Mr. HANSON	(York-Sunbury):	Mr. Chairman


Mr. VALLANCE:: A question has been
asked the minister.


Mr. HANSON (York-Sunbury):: This
matter is of very great importance to the seaports of Canada.


John Vallance: Mr. Chairman, I was
waiting for a reply from the minister.


Armand Renaud La Vergne: The hon. member for
York-Sunbury has the floor now.


John Vallance: If the minister does
not. desire to answer the previous question asked him-


Some hon. MEMBERS:: Sit down.


John Vallance: I have some rights. If the minister does not intend to give a reply to the hon. member for Lisgar, I propose to take the floor. I had the floor.


Richard Burpee Hanson: I have the floor at the moment.


Armand Renaud La Vergne: The hon. member for South Battleford had my eye and I was going to give him the floor, but he waited for the minister to reply. In the meantime the hon.
member who is now addressing the chair got up. He has the floor, but in all honesty I must say that if the minister had not got up I was going to give the floor to the hon. member for South Battleford.


Henry Herbert Stevens: I think it would be just as well to hear what hon. members have to say. If they have any questions to ask, the ministry will be glad to answer.


Armand Renaud La Vergne: The hon. member for York-Sunbury has the floor.


Mr. SANDERSON:: Is that your ruling, Mr. Chairman?


Armand Renaud La Vergne: Yes; my ruling is that the hon. member for York-Sunbury has the floor.


Richard Burpee Hanson: I was going to observe that this matter is one within the jurisdiction of the United Kingdom alone, and any regulations which they may desire to make restricting or extending in any way the conditions under which the preference on empire goods may be extended to goods imported into the United Kingdom is their problem, within their jurisdiction, and for their consideration and decision alone. Similarly, the conditions under which goods of empire origin may be imported into this country and receive the preference are wholly within the jurisdiction of this parliament and have, I think, been well settled by this parliament. If there is one thing for which I can give credit to the right hon. gentleman who leads the opposition it is that he made that a fixed principle so far as * importations of Canadian goods under the British preference are concerned. In that he had our support.
Now, this is a question which is agitating the minds of our people in eastern Canada. For years our people down there have been putting up a fight and appealing to their brethren in western Canada to do something for empire trade through eastern Canadian ports. I may observe to my hon. friend from Vancouver Centre, who is smiling, that this matter is equally important to his port.


Mr. MACKENZIE (Vancouver):: I am
agreeing with you.


Richard Burpee Hanson: When the government of the United Kingdom, under the regulations passed in connection with the Import Duties Act of 1932, passed regulation No. 12, so far as Canada is concerned, I apprehend that they settled the question for themselves and that it will be the duty as well as the privilege of shippers of Canadian products such as wheat and other commodities
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Imperial Conference-Trade Agreements
to conform to their regulations if they want the preference, and it is none of the business of this government what the United Kingdom government has done in that regard. It just so happens that a proper interpretation of regulation 12 will promote that for which we in the Atlantic ports of Canada have been standing for and striving for for years. The facilities in connection with our ports can be used under this regulation, provided always there is sufficient storage on the seaboard to take advantage of the situation which has been created under the jurisdiction of the United Kingdom, and I want to appeal to our friends from western Canada, to help work out these regulations and the exportation of goods of Canadian origin through Canadian ports in the spirit in which it was intended by the British government that they should be worked out.
What is the position? It is this, as I apprehend it. There is no interruption in the shipment of Canadian wheat through American ports, provided always that it is consigned from the country of origin. to the importing country on a through bill of lading.


An hon. MEMBER:: It can't be done.


Albert Joseph Brown: It has never been done.


Richard Burpee Hanson: To say that it has never been done is not to say that it cannot be done. To take the position that you are never to do something simply because it has never been done is absurd.


Mr. YOUNG:: It is not practicable.


Richard Burpee Hanson: I say it
is practicable, "and I intend to show that it is practicable to any reasonable mind -and in that I desire for the moment to include the hon. member for Weyburn. I am trying to approach the subject, not in any narrow political partisan spirit at all, but from the point of view of a representative of eastern Canada who is vitally interested in the question. After all, as I have pointed out on many occasions, the people of St. John, out of their own pockets, tried for many years to build up this export business, and I am sorry to say that they got very little support from western Canada. It has been a tedious process of education and in many instances a most disappointing process because the results have not proved to be what our people have naturally looked for and what they say as a part and parcel of confederation they have a right to expect. I am not one who believes that you can alter the channels of commerce by a single stroke of the pen; I know that it is difficult to change the routes of commerce but when an

opportunity arises to change those routes without detriment to those who are immediately interested, then I appeal to hon. gentlemen opposite and particularly to hon. members from western Canada to give this matter a fair trial before condemning it offhand. The situation with respect to through consignments on through bills of lading has not been altered.
My colleague reminds me that hon. members have the Hudson Bay railway, but I shall leave that out of this discussion. I am trying to rivet the attention of the house and the country upon what is of substantial importance to the people with whom I am associated in the east, that is, the use of our ports for the shipment of Canadian products. So far as I have been able to understand the regulations, the only change I can see that has been made is that it will be no longer possible for shippers of Canadian wheat to store their grain at Buffalo. This storage has been carried on for years and I understand that very extensive commitments have been made in the way of storage facilities. It will be no longer possible for them to carry on in that way because they would not be able to ship on a through bill of lading from storage at Buffalo. From our point of view this is all to the good, although I expect hon. friends opposite to disagree. They have a right to their own opinion, but I say to them that had these commitments for storage facilities been made on the Canadian side, as I think they should have been made, there would have been no difficulty presenting itself at this moment. Furthermore, I understand that both the great railway systems of this country have put into effect a rate from the lower lake ports such as Midland, Port Colborne, Port McNicoll and elsewhere, where storage facilities are available, to our eastern ports equal to the rate from Buffalo to New York.


An hon. MEMBER:: The hon. member is mistaken.


Richard Burpee Hanson: I do not think I am wrong. As a matter of fact, no hon. member can say that this is or is not so without producing the rates in question. First class evidence of that character cannot be produced but I am informed by those who say they know that the railways not only have agreed to establish but have established this rate. Proceeding on the assumption that a six-cent rate has been established to Saint John and Halifax, and without considering whether or not that is an adequate rate, I say that there is no longer any excuse for the western shipper to continue to ship through

United Kingdom
New York at the expense of Canadian ports. What is the excuse offered? It is that tonnage may not be available. I do not pretend to be an expert in grain matters-a number of hon. gentlemen opposite do pretend to be experts, but on many occasions I have had my doubts-but I recognize that it is important that tonnage should be available. The chairman of the Halifax harbour commission who has made a very intensive study of this subject has told me that the availability of tonnage will not retard the movement of this commodity because if, as and when it is required, it will be obtainable. If he is correct in his statement the last point of opposition to this routing of Canadian wheat and other goods of Canadian origin is wiped out.
My appeal to hon. gentlemen opposite and to the public of western Canada is to give this matter a fair trial. I ask them not to bring pressure upon this government or upon the Minister of Trade and Commerce to have the British government change its regulations. If they do, I warn them here and now that there will be opposition to this move by the people of the maritime provinces. I put this proposal, which I think is a fair one, to hon. gentlemen opposite: give these provisions, established by a competent jurisdiction, the British government, a fair trial and then if you find you are being penalized, it will be time enough to ask for the abrogation of this regulation. I say this with great earnestness. This is my appeal to the shippers of western Canada.
I understand there are many reasons why this regulation has been made. The interests of the British ship owner have been considered. The British people rely to a large extent upon the invisible asset of the earnings of the British ship owners, and this fact should be given consideration in arriving at any arrangement of this character. I am told, although I do not know myself, that this regulation has, to a degree, been made in his interests. He is a factor and is entitled to consideration, and for this additional reason I suggest to hon. gentlemen opposite that they do not raise this question. This matter was not arrived at by this government under the conference agreements, it is a position which has been established and is now maintained by the British government under its own legislation without respect to conditions pertaining in Canada or the consent of the Canadian government. I do not think there is the slightest evidence to substantiate the innuendos and insinuations of the hon. member for Lisgar (Mr. Brown) that there has been a secret understanding
between the two governments in regard to this matter. The position is absolutely plain and he who reads the printed word may read it. It was something which transpired previous to the month of August, 1932.


James J. Donnelly: The hon. member does not know anything about it.


Richard Burpee Hanson: I may not know anything about it but I venture to say that I know as much about it as the hon. member for Willow Bunch (Mr. Donnelly).
I ask hon. gentlemen opposite to give this regulation a trial before they attempt to set one section of this country against the other. That is what it will mean. I commend this attitude to the right hon. the leader of the opposition as being a fair attitude which his party should take in regard to this matter. The people of eastern Canada believe that if preference is good in matters of trade and commerce, it is good in matters of transportation. I say further that they are extremely in earnest about this matter.


Edward James Young: So are we.


Richard Burpee Hanson: Any
pressure which may be brought to bear to vary or lessen in any degree the present position will be resented by them. As a matter of fact those who are most anxious about the matter want to go further, they want the through bill of lading wiped out altogether. I have said to them: You cannot walk before you creep and you cannot run before you walk, be content with this substantial measure of preference. I believe they will be content and I believe that when it is established this trade can go through Canadian channels without loss or detriment to the shipping interests in this and the old country, and there will be a hundred per cent movement in this regard.


John Vallance: The hon. member who
has just preceded me has argued on the assumption-and I think I understand his argument aright-that all the wheat that is grown in western Canada goes to the United Kingdom. It is only that portion of the grain that is destined for the United Kingdom that would be affected by this measure. Let us see just how much that is, but before I deal with that let me draw this to his attention in connection with Buffalo and the investment we made there. When I say "we," I mean those who are interested in the marketing of the wheat crop of western Canada. This investment was made for economic reasons. Why did the United Grain Growers,

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Imperial Conference-Trade Agreements
an entirely farmers' company, why did the pools, build their storage there? It is because it was more economical and better for the wheat producer to do what they did at Buffalo so that they could ship from New York or Montreal.
Let me now discuss the portion of Canada's crop that will be affected by this provision. I think, Mr. Chairman, you decided last night that in dealing with article 2 we should couple with it article 4, because article 2 refers to the impost on foreign goods specified in schedule B. When you look at schedule B, you find the first item is "wheat in grain, two shillings per quarter," which is eight bushels. Article 4 deals entirely with wheat in grain,
copper, zinc or lead in the manner provided in the agreement. We are dealing with this agreement and its effect on wheat and the marketing of wheat, so that if I trespass by referring to article 4, I hope the committee will bear with me, because one cannot discuss article 2 without including the contents of article 4. We are now concerned about that portion of Canada's crop which is not sold on the British market. For the information of my good friend from York^Sunbury, may I place on the record some figures which will be of interest to him. I am dealing now with Canada's exports of wheat to all countries and to the United Kingdom, and I will give just the round millions, as follows:
Canada's Exports of Wheat to (a) all Countries and (b) the United Kingdom
Year ended March 31-
(a) To all countries Bushels
(b) To United Kingdom Bushels
1915	
71,913,000	64,301,0001916	
157,745,000	140,414,0001917	
189.643,000	152,043,0001918	
150,392,000	123,384,0001919	
41,888,000	37,317,0001920	
77,978,000	51,426.0001921	
129,215,000	29,294,0001922	
136,489,000	92,498,0001923	
215,074,000	166,846,0001924	
256,S70,000	173,221,000
We can continue and still get about the same average, namely, that it is less than 50 per cent that gees to the British market. The hon. member said that this ruling was embodied in the Import Duties Act, section 12, and that this government had nothing to do with it. What I would like to know is whether this government, having that knowledge, made any representations and, if so, what they were. Or did they understand at that time that the condition we are now investigating, if not complaining of, was possible? That question has been asked of the government before, and I think, when the minister rises to speak, he should fell us whether the delegates from this parliament discussed with the delegates from the United Kingdom our position in relation to this fact. Article 4 reads:
It is agreed that the duty on either wheat in grain, copper, zinc or lead as provided in this agreement may be removed if at any time empire producers of wheat in grain, copper, zinc and lead respectively are unable or unwilling to offer these commodities on first sale-
I should like to ask the minister to tell us at this point if he can, so that the committee may be informed, what a first sale means.


Henry Herbert Stevens: Let my hon. friend finish his remarks.


John Vallance: There are certain things I would like to say, depending upon the reply the minister gives. I want to assist the committee.


Some hon. MEMBERS:: Oh, oh.


John Vallance: Hon. members may
laugh, but we are here to do what we can to facilitate the solving of this problem. I have invited the minister to tell us now his interpretation of what he chooses to call a trade expression, as it is. What is the interpretation the government put on "first sale?" My hon. friend, however, says that he is not prepared to give that now. Article 4 continues:
-to offer these commodities on first sale in the United Kingdom at prices not exceeding the world prices.
What is the world price? The world price heretofore has been determined by Liverpool. Now we propose, by this duty of two shillings per quarter, as far as we possibly can, to put _ every bushel of Canadian wheat into the British market to the exclusion of the otheT countries of the world. What is the greatest

United, Kingdom,
volume of wheat that has ever gone into the British Isles for their own consumption? Article 4 reads:
On first sale in the United Kingdom at prices not exceeding the world prices and in quantities sufficient to supply the requirements of the United Kingdom consumers.
What does that mean? What are the requirements cf the United Kingdom consumers? Does that mean just the 45,000,000 or so people in Great Britain? Are we compelled only to give them just as much as will feed them, or does this mean that importers in Britain can, if they so choose, take 400,000,000, 500,000,000 or
200.000.	000 bushels of wheat out of Canada? Have we to give them everything they want, because if those are the requirements, they may take that wheat and mill it, meeting our millers in competition in the export markets. These are some of the questions I should like the minister to answer.
The first question I asked was:	What was
meant by "first sale?" Where will the price be determined? Heretofore Liverpool has been the basis of world wheat prices. If you are going to confine the British market and Britain is not going to set the price for her own wheat, but says she will take the world price, we must be going to move from Liverpool to some other point in Europe the right to set the price of wheat that we, the Canadian producers, will receive from the British importer. I think that is the position in which we are. Great Britain has the right under this agreement, to take all her requirements from Canada. Even supposing she were to do so, all you are doing is merely displacing that portion of Argentine, Russian or Australian wheat that now finds a place in the British market. You are releasing that from the British market and putting it on to the European market. Supposing she took all of ours, then that inferior wheat-and I say so advisedly-coming from those countries, is going to be the standard to determine the value of our wheat sold in the British market. You are not giving to the producer in western Canada an iota of difference in the price that he w'ould get if this agreement did not exist. If the British people want to exercise their right under this agreement, they can take 200,000,000 or 3,00,000,000 bushels of wheat, as the case may be.
I have the figures here of the importations into the British Isles from all countries, and of wheat that has found a place on the export market. The United Kingdom in 1915 imported only 165,000,000 bushels; in 1916,
186.000.	000 bushels; in 1917,	170,000,000
53719-66i
bushels. Between 1915 and 1931 the largest import which the United Kingdom made of wheat was 222,000,000 bushels last year, and that w'as from all sources. What was the production of Canada last year? It was away in excess of 222,000,000 bushels. In fact, we carried over from the previous year 130,000,000 bushels that we had no market for at all, and we have now probably in the neighbourhood of 500,000,000 bushels. Even if Great Britain took all her wheat requirements from Canada, the most she has taken in any year from 1915 to 1931 was 222,000,000 bushels, so that we would still have about 350,000,000 bushels that would have to compete with the wheat of Australia, Russia, the Argentine, and any other country with an exportable surplus, and that competition would decide the price not only of the 222,000,000 bushels but of the whole wheat crop of Canada. It simply means that you are doing just as the hon. member for Antigonish-Guysborough said you were doing in regard to fish. We will get no more for our wheat, but if the producers of the Argentine, Russia, and other countries with an exportable surplus ship their wheat to Great Britain they will receive six cents less. The world supply will determine the price of Canada's wheat; it will determine what the farmer on the western plains of Canada will get for his crop.
I will go this far and say that the Prime Minister before that conference maintained one note, and it was that he would .do nothing and see that nothing was done that would jeopardize the efficient industries of Canada. What I want to ask the Prime Minister is this: Did they carry that doctrine into effect when they brought about this agreement respecting the disposition of our wheat? I think they did, and I think they were ill-advised. My hon. friend from York-Sunbury says that the Canadian government had nothing to do with this. But surely the Prime Minister and the other Canadian delegates considered the effect that this would have on the largest portion of Canada's wheat crop, because the whole of the crop is affected, not simply the portion that is going to the British Isles. Not only that, but if you will go through the statistics you will find that in many years 300,000,000 bushels of wheat left the shores of Canada destined for Great Britain but never reached that country because it was diverted while on the ocean. So far as the producers in Canada are concerned, make it possible for us to ship our wheat through all-Canadian channels and I think
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you will find that the farmers of western Canada will extend the co-operation that has been asked for by the hon. member for York-Sunbury. I would ask the minister when he gets up to deal with what is meant by the first sale.


Richard Bedford Bennett: I will deal first with
the question asked by the hon. member for Lisgar (Mr. Brown). He suggested that there was some secret arrangement with respect to this matter. There was no such arrangement. I should think he would have been satisfied on that point when I read to him the other day the reply to the message which had been sent to London in order that misapprehension, if any, might be relieved. If there had been an arrangement wre would not have been asking the British authorities as to the interpretation placed upon the article in the agreement.
I can only say this, that so far as the agreement as it stands at the moment is concerned, and it will not be altered 'because it has been adopted by the British parliament, it provides just what it says, namely, that goods in order to secure the preference must be the product of the empire, and they must be consigned to the United Kingdom. The regulation that I read the other day is a regulation, I find, which was in force before this agreement was adopted. It is the standard regulation which Great Britain has had in use in dealing with matters of this kind.
I did, after the discussion in the house the other day, communicate with Winnipeg for the purpose of ascertaining just what the exact words were in use by the grain business in dealing with shipments through Buffalo. I secured those words, and prepared a cable to ask the British authorities if the regulation covered those words. I have not a reply, for the cable has not yet been sent, as a matter of fact, because the grain dealers in Winnipeg intimated that one cf their number might come here. As a matter of fact, he did net come although I thought he was on the way. That is the position so far as the question asked by the hon. member for Lisgar is concerned.
There is no doubt that the question has been much discussed and much debated in all parts of this dominion, and there has been an increasingly strong opinion that if the west is to secure all the advantages which it hopes for from time to time-we have made very large advances to western provinces during the last few months; we have loaned them large sums of money and carried on enormous expenditures; in addition the question was asked the other day whether the government had bought

grain, to which question I deferred the answer until Monday, but I may say now that the government has not itself purchased grain but did assist one of the enterprises that is owned by the people of western Canada to do so for reasons that I shall indicate next Monday- there is an increasingly strong opinion that Canadian ports should be utilized by one of the greatest Canadian industries if in turn it is bo ask for and receive always every consideration from the government of the day. This government is not the only government which has shown itself sympathetic to Canadian industry in the form of agriculture, for it is the greatest of Canadian industries. In addition, the purchasing power icf the people is at once reflected by the sale of Canadian grain in the fall. The ability to purchase the products of eastern Canadian factories or of factories abroad is at once reflected by the volume of business that is transacted every year through the sale of grain. It is in a sense the easiest and most rapid way that we have bo create new wealth except, if the hon. member for Willow Bunch will pardon me, by the securing of petroleum from the earth, which has been said by one economist to be the shortest and quickest way to create new wealth because petroleum can be converted into products very salable by the expenditure for machinery of a very small sum of money, say
S30,000,	under the old-fashioned way of refining. Of course, there is always gold. That is new wealth without refining, but it is rarely found in large quantities except in the alluvial deposits of some rivers. But wdieat creates new wealth easily and quickly ficr the reason that under our present methods we have a complete system established of elevators and terminals whereby the farmer hauls his grain to the elevator and the elevator gives him a ticket, under the Grain Act. The elevator man may have a limited amount of capital, perhaps just enough to own a single elevator, but from the bank he secures an advance based upon the hypothecation of the grain he has 'bought. Then the bank insists that he shall hedge his purchase, which means that for that immediate cash sale there is an exchange for a future sale. From that it at once follows that the price of the grain immediately goes into circulation, not simply the 20 per cent which the borrower has been able to borrow from the bank, but the price of the whole of the grain. That is why there is such an extension of credits in the fall under the Finance Act; the whole price of the grain is at once set in circulation, the banks provide the necessary credits for the balance between the margin that the operator has as capital and the price paid-and he has the facilities,-and that is

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the reason that the east as well as the west has been so interested in the harvesting of a large crop, and in its rapid movement out of the country. That is the reason that this year, although the price is very low, the crop being large, there has been realized for circulation in western Canada a very large sum of money, I should think /between seventy-five and a hundred million dollars. That is a large sum of money to set free in any area, especially one with a population of less than two and a half million souls.
The movement out of this country is of course of primary importance to every one. Through the harbour of Montreal there moves out of this country not only a large part of the Canadian crop, but an enormous number of bushels of the American crop. The reason for that is fairly obvious; all one has to do is to look at the map to realize and understand it. I say to my hon. friend from Lisgar (Mr. Brown) I have not been in sympathy with the construction of storage facilities at Buffalo, I think they might have better been put on the Canadian side. The movement from the storage facilities has been dealt with by the hon. member for South Battleford (Mr. Vallance); it is a matter about which opinions will always differ. But it is certain that many countries would have insisted by legislation that the movement should be through Canadian ports. One of the conditions under which the British preference is accorded is that the movement of the goods shall be through British ports. Two exceptions are made, I mentioned one the other day, the port of Beira in connection with the movement out of Southern Rhodesia. There are similar conditions with respect to other ports. For instance, sometimes shipping is not available, it became necessary in one instance to which my attention was directed last week that an order in council should be passed under the provisions in that behalf, authorizing it to provide for a movement that was not wholly through British or Canadian ports. As far as this section is concerned it was on the statute books of the United Kingdom in March, 1932. When the matter came up for discussion at the Ottawa conference it was one that was as important in a sense to Australia though not to the same extent, and to other countries that ship their goods to Great Britain, as it was to us. In the end the section remains as it is, and the construction placed upon it is: (a) the commodity must originate in the British Empire; (b) the commodity shall be consigned to the United Kingdom; and (c) that if it is either on a through bill of lading, as I mentioned the
other day, or identified by documents authenticated by the authorities that the British government have always chosen for that purpose, namely their consuls, which is the common practice I may say of all countries, vised by the consul, then the goods are treated as having been identified from the point of origin to the point of ultimate destination. That has been the condition imposed.
But because of the discussion that took place I have endeavoured to secure further information upon it, and the result of my inquiry was the telegram I read to the house the other day from the High Commissioner's office, which embodied the exact terms handed to them in writing by the Dominions' Office. Obviously in a matter of this kind I think the hon. gentleman from Lisgar would realize that no government would think of making any secret arrangement with respect to the construction to be placed upon a public document. It is solely within the power of the British authorities to determine the regulations under which the conditions imposed are met. But those conditions are statutory, and cannot be changed except by act of parliament of the United Kingdom. They involve: (a) origin within the empire; (b) consignment to the United Kingdom on a through transit-if I might use that word-although the transit might be interrupted; but as long as the point of origin is fixed, and the destination is the United Kingdom, even though there were delays in the transit, the preference applies.


Mr. VENIOT:: Was that through transshipment?


Richard Bedford Bennett: Yes, that was mentioned in the regulation. I read regulation No. 12 the other day, of which the British High Commissioner's office furnished me a copy again in order that I might be sure that it was the same one as that which had been in force previously, and there has been no change as far as I can ascertain.


Henry Herbert Stevens: There has been no change.


Richard Bedford Bennett: No change that involves the possibility of transshipment.
With respect to the value of the preference, I am in no sense critical of discussion in the house of commons, but it has been discussed in the house at great length. Our view on this side is that it is part of the agreement which we propose to try, and we believe it is in the interests of the Canadian producer. Of course, first sale means, as I think the hon. gentleman realizes, the sale made to the importer of the wheat in question. As far
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as world's prices are concerned, that is a term applicable to the metal market, the sugar market, the tea market, the cotton market, the coffee market, all these are matters which in trade parlance are affected by what is called the world's market, the world's market price, for instance the Baltic, Mincing Lane, the Cotton Producers' exchange of New York and institutions of that kind. You will observe in this very agreement a provision that the Metal Exchange is to be the determining body with respect to prices in connection with some of these metals. For instance, the contracts that were made in connection with oil from the Turner valley, when I was actively interested in the business there, provided that the price current appearing in a given journal published in Oklahoma should be the governing price. That is a matter that businessmen agree to. In this instance the world's price is the price that is current in the world, it is predicated upon the assumption that the hon. gentleman who has just sat down has strongly urged, namely, that there is a much larger production of wheat in Canada than the United Kingdom could take. It therefore follows that the price will not be fixed by that demand alone, but by the law of supply and demand. And that fixes the price for the first sale. The price at which the commodity could be purchased by any one desiring to purchase it on the open market of the world for sale anywhere would be the world's price for the commodity. And if, as I said the other evening, the British miller prefers to purchase wheat outside the British Empire he may do so, but if he does he will pay two shillings more for every eight bushels than if he had bought Australian or Indian or Canadian wheat. If he buys Esthonian or French wheat he will pay two shillings a quarter more than if he had bought Canadian or Australian wheat.
The circumstances under which this agreement was arrived at as far as wheat is concerned will be found indicated to some extent in the observations made by Mr. Graham in 1923 at the economic conference. I need not dwell upon the fact that for at least a generation-I can only speak about one, I have lived in western Canada thirty-five years- for at least the lifetime of a generation there has been urged by the farmers of the west the value of a preference for wheat in the British market. This preference has now been secured. If as hon. gentlemen think, it does not work out as satisfactorily as we hope, then of course we shall be disappointed and sorry. If it works out as we believe it will 
the effect will be to afford a larger market for Canadian wheat, but not at a higher price. We did not expect to be able to demand a higher price for our commodities; no one has suggested that. A few days ago the right hon. leader of the opposition spoke of the poor in England paying a higher price for their food. That effect always has been apparent to everyone who has thought about this matter, and there is no provision in this agreement that contemplates the poor paying a price higher than the world price. But in order that there might be no opportunity for the assertion that an effort had been made to place an undue burden upon the people of England by way of an enhanced price for Canadian or Australian wheat you will see that the world price is to govern, because the surplus of this country for export exceeds any possible importations that could be made by Great Britain.
I do not think there is anything I can usefully add to what has been said so frequently from this side of the house. The criticisms of hon. gentlemen opposite are upon record. If we are wrong and they are right we suffer and they gain; our judgment will have been in error and their criticisms will have been well founded. But we do suggest that the conditions warrant any government securing, if possible, a sheltered market for wheat for Canada and other parts of the British Empire, in the greatest importing wheat market in the world.


John Vallance: The only point on which the Prime Minister agrees with me is in connection with the world price and the world market. I think he will agree, because I want to be fair, that heretofore the price of wheat has been determined in Liverpool.


Richard Bedford Bennett: No.
Mr. VALLAN'CE: The Prime Minister says no. The only quotations that we ever got for the first sales were Liverpool quotations, which were arrived at by the method I had hoped the Minister of Trade and Commerce would have outlined. For the information of those hon. members who perhaps are not as closely in contact with the wheat situation as are some of us over here, the procedure is this: When the crop is about ready to move a small portion of wheat from every district throughout western Canada is collected by the standards board, on which are represented the growers, the trade, the cooperatives, the millers and also the grain board itself. These samples are assembled and sent out to the trade, and on those samples the trade deter-

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mines the value of the wheat, having in mind always the volume offered. The minister shakes his head. I hope he will correct me if I am wrong and that is not the procedure.


Henry Herbert Stevens: May I interrupt my hon.
friend?


John Vallance: No, not just now. This is my point: Now you are going to divert our wheat to the British market, perhaps to the extent of 222,000,000 bushels, but the European market will determine what price is to be paid for that wheat. Selling in that European market will be the surplus of our wheat which we cannot put on the British market, the Russian wheat, the Argentine wheat and the Australian wheat, which does not compare in quality with the wheat that is being sheltered, as the Prime Minister says, in the British market. On that wheat of inferior quality will be determined the price we will get for our 222,000,000 bushels exported to Great Britain, if that country chooses to take advantage of the agreement into which we are now entering.
That is the point. Not only that, but the wheat of all countries is not assembled as our wheat is, as the Prime Minister well knows. Argentine wheat sells on an f.a.q. basis, fair average quality. They jumble all their w'heat together and it is sold on the basis of the fair average quality. We do not do that; we grade our wheat, and sell it by grade. The point I am making is that the portion of our wheat sent to the mother country will be obtained for less than we would receive otherwise, because of the fact that she is not now determining the value of that wheat; it is being determined outside her boundaries.


Richard Bedford Bennett: I will amplify what I said by only a few sentences. World wheat prices are not settled in Liverpool; the mathematical computations are carried on there and at the Baltic, which is an entirely different matter. World wheat prices are determined by supply and demand, and whenever the supply is so much in excess of the demands of the importing countries as it is today, when the entire demand for wheat for a whole year could be supplied by the surplus in exporting countries with practically no new crop being grown at all, the result is a completely demoralized market. W'herever there is no demand and a surplus supply, that supply is offered in the markets of the world at a price which very often bears no relation to the cost of production. The circumstances under which the wheat market of the world has
broken since 1929 could be related as chapters in a story that follow so simply that no argument would be required to convince this house that the whole factor that determines prices is supply and demand, plus one other factor, the willingness of any one producing country to take any price at all for its product in order to undersell its competitors. That condition did arise at one time with respect to one country. I told this committee once that in 1930 I asked a Canadian to go to Liverpool and look at a cargo of wheat that had arrived there the day before and that was being sold for 60 cents a bushel at the dock, which was less than Canada, Australia or the Argentine were asking for their wheat, having regard to quality. As most hon. gentlemen know, the wheat grown in the northern part of Russia is not vastly different from the very best of Canadian wheat. This wheat was offered at a price calculated to undersell any competitor who might sell his wheat on the basis of showing a profit in production. That is the basis of all sales. When wheat went to S3 in the markets of the world, as perhaps hon. gentlemen will recall, in Canada it went from a little over $2 in the fall to over $3 in the spring, and wheat stored in elevators by Canadian farmers returned a very large profit. Why was that? It was because the expectations with respect to production in certain parts of the world were not realized, and the supply fell far short of what it was expected to be while the demand was constant.
That is the position. So far as the present condition is concerned I can only repeat that the price is not fixed at Liverpool. The mathematical computations, in which the figures are assembled for the purpose of knowing what wheat is available to meet the demands, are largely carried on there. The one great authority in the world is Broomhall, and as everyone knows Broomhall's figures at the moment are to the effect that something like
705,000,000 bushels will be required this year to meet the requirements of importing countries. He points out also that the quantity available, taking in United States wheat, is practically double that figure. The whole question that had to be considered was the extent to which the production that was ripening in the southern hemisphere, namely in Australia and Argentine, would affect the market by reason of the market already being overloaded with a supply that far transcended the demand. I understand the effect has been a reduction in price because of the willingness of some countries to offer wheat for a price
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lower than that obtaining before these crops came upon the world market in competition with existing surpluses.
I only desire to make it quite clear to the hon. gentleman that when we say Liverpool fixes a price we only say that the computations based upon Broomhall's very carefully considered estimates, both on the Baltic and at Liverpool, are computations that are based upon daily reports as to crop conditions. Violent winds have swept over areas in the southern hemisphere and the crop of yesterday has become a ruin, the effect being at once reflected in the market the next day. For instance, in western Canada we have all seen a magnificent crop of yesterday converted into no crop at all tomorrow, in very substantial areas, and that is reflected in the computations that are made by Broomhall's as to the available surplus to meet the market demands the succeeding day. When the world's supply and demand is mentioned as reflected in the world price, it is based on a well known and definite practice, and instead of endeavouring to define all the factors that constitute the world price, this agreement is made in that broad and generous * outline that would be expected on the part of Canadians making a bargain with their fellow citizens in Great Britain. We apprehend no difficulty, we have experienced none, nor have we any evidence of any with respect to this or any other clause.


Peter John Veniot: For reasons that are well
known to the members of this house, I have not been able to follow1 very closely the discussion of the agreements made at the imperial conference. I did not expect, coming here this afternoon, that the question of the transportation of Canadian wheat through Canadian or American ports to the British Empire would be discussed. I thought that, under the sections of the agreement which I have read, it would not be quite in order to discuss that point of view, but since the discussion of it has been allowed, I wish to raise my voice as a representative of New Brunswick in behalf of our Canadian ports. As I understand it, our friends from the west have not, so far, raised any great objections to the shipment of wheat through Canadian ports. They have hinted, to some extent, their desire that the agreement might not, for the sake of the British preference, confine the shipment of Canadian wheat entirely to shipment through Canadian ports.
When we look at the record, I think it will be agreed that we, in the maritimes, are safe in claiming, as our western friends

claimed when money was expended for the accommodation of storing wheat at Buffalo, that what has been spent has been spent economically. We in the maritime provinces have worked along economical lines in the past and at the port of Saint John, for a certain period, without any help from any government in Canada, we have expended millions of dollars to prepare the harbour for the shipment of Canadian goods through that Canadian port. Later on, the government came to the assistance of the city of Saint John -I am not now referring to dredging and operations carried on in the past by other governments, but to recent expenditures. The government of the day came to the assistance of the city of Saint John, taking over the works on which they had expended in the neighbourhood of three or four million dollars, in order to prepare that harbour for export trade, to receive Canadian goods passing through a Canadian port. Since that time, without taking into account the money expended in consequence of the disastrous fire in the harbour of Saint John, the government has expended between ten and eleven million dollars to provide accommodation for shipping. It was not to provide accommodation for the shipping of foreign goods but to enhance the shipping value of a Canadian port, so that we in the province of New Brunswick as well as the people of Nova Scotia might do our share in the development of Canadian trade. When the government in 1923 or 1924 laid down the principle of an additional 10 per cent preference on goods coming through Canadian ports, we extended the facilities in the harbour of Saint John. Let me point out that all this was done for reasons of economy; not only was the province of New Brunswick interested along economical lines, but the whole dominion was so interested, because Saint John and Halifax were the only winter ports on the Atlantic coast, and in order to play our part we were prepared to make sacrifices. It is well known that we in the maritimes did all we could to assist the provinces of the west as well as central Canada.
Now, if the cheap rate of shipment is a question with our friends out west, let me point this out, that freight rates by rail and water combined are lower from the bay ports to Saint John and Halifax than they are to New York, by 3 or 4 cents per hundred pounds. If that is so, if from Port Colborne you can ship wheat down through the maritimes, landed at Halifax or Saint John, for 17-15 per hundred pounds, whereas from the same point of shipment to the central port of New York you have to pay 2 or 3 cents more, I want to

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know where the saving is to the western farmer. They tell me the saving would be on the water rates. If that is so, surely some arrangement can be made, in connection with our Canadian vessels using Canadian ports, to give a rate that would equalize the American.
As to the quantity of wheat which we may be able to handle, let me point out that in 192S-and we shall have greater facilities next spring or summer

we handled from 30 to 32 million bushels of wheat at that port, and the only reason we did not handle more was that it did not come. Of that 30 or 32 million bushels of wheat handled at Saint John that year, no less a quantity than 10 million bushels was American wheat. Our friends will say, yes, but if this agreement goes into effect the Americans will ship their wheat through their own port. Well, let them do so and it will give us more room to ship our Canadian wheat through Canadian ports. That is the stand I take in this matter.
If our western friends are afraid that we have not the facilities at Montreal, Vancouver, Saint John and Halifax to ship all Canadian grain that can be sold either in England or in other countries of the world, let me disabuse their minds of that idea. We can handle it. Montreal alone can handle hundreds of millions of bushels. The port of Saint John, if the wheat is sent in a proper way, in the winter season, from the month of December until May, can handle from 35 to 50 million bushels.


An hon. MEMBER:: No.


Peter John Veniot: Someone says no. It may not be greater but it will be no less than that. I do not know as to the capacity at Halifax, therefore I shall not speak on that matter.
I should like to give a few figures in connection with freight rates. The freight rate from Midland, Ontario, to St. John, Halifax and Portland is 15.17 cents per hundred pounds, while the rate from Midland to New York is 22 cents. The rate from Port Col-borne, Ontario, to Halifax, St. John and Portland is again 15.17 cents, while the rate from Port Colborne to New York is 17.50 cents and will be 18.50 cents after November 23 when a change comes into effect.
I do not desire to say anything which might be detrimental to the interests of any party, especially my hon. friends in the west. I know they have been suffering not only from low prices but from crop failures but let me say to them that they are not the only ones in agriculture who have suffered. We in the maritime provinces have suffered just as great hardships in proportion to population. What
wheat is to the western farmer, potatoes are to the farmer in New Brunswick and Prince Edward Island. We too have had failures in crops. The largest crop produced today in New Brunswick is the potato crop. When the planting took place this year the prospects looked splendid, it was expected that we would have the largest crop ever produced but, the blight came along and we will not take out more than forty or fifty per cent of what we put in the ground. The farmers in the west have suffered from drought but we in New Brunswick have suffered from the blight. I do not know what conditions prevail in the other maritime provinces but I know that the conditions in New Brunswick are pitiful so far as the farmers are concerned. While we feel for our friends in the west, while we are prepared to cooperate in anything that is reasonable in order to help them, as I know and feel they cooperated with us a few years ago when the question of better terms for out provinces was up, let me say to them in all seriousness that we feel we are doing no injustice to the west when we stand up for what we consider to be the rights of the maritime provinces. As a representative from that section of Canada I appeal to other sections to join hands with us to help us along in obtaining what is our due in the matter of transportation.
It must be remembered that if it were not tor the maritime provinces there might have been no western Canada. When confederation was mooted in 1867 the maritime provinces came in under the distinct understanding and contract that certain things would be done. Ontario and Quebec asked the maritime provinces to join with them in order to provide an outlet to the Atlantic coast so that they would not have to depend upon American ports for the shipments of goods to the British Empire. We came into confederation on the strength of certain promises which have never been carried out to the full extent. We have suffered and made sacrifices in the past, we are prepared to make sacrifices in the future; we will do our share to bring about prosperity and progress in this fair Canada of ours but I hope we will not be called upon to make sacrifices which we consider to be too great. A sacrifice which I consider to be too great is to consent to. the diversion of Canadian trade from the maritime provinces to American ports.


Donald MacBeth Kennedy: Mr. Chairman, I desire to make a few remarks relative to this matter of the preference being given to Canadian wheat in the British market. I cannot venture into this discussion as the represent-
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ative of a constituency which grows wheat but I do represent a constituency in the city of Winnipeg which I admit frankly is dependent upon the price of wheat for its future and which is indebted to the growers of grain in the west for its past. Representing such a constituency, I make bold to offer a few remarks on this subject.
Hon. members opposite have repeated again and again that the proposed preference to Canadian wheat in the British market contained in this pact will not fix or increase the price of wheat.


Albert Joseph Brown: The Prime Minister said
that.


Donald MacBeth Kennedy: It has been reiterated that it will not do so but I have yet to 'hear any hon. member on either side of the house contend that it would do so. If it will not do so, why not- let the matter rest? Why go on flailing threshed straw as the hon. member for South Battleford (Mr. Vallance) did a few moments ago? What is contended is that this pact will give the Canadian producer a preferred market for a very considerable portion of his export surplus.


John Vallance: With a possible low
price.


Donald MacBeth Kennedy: The hon.
member for South Battleford has had his say and as I do not intend to take very long I ask him to let me continue.
It is contended that this pact will give Canada an assured market for a very considerable portion of her surplus. We hear hon. members opposite say that what we need is more and wider markets; those are vague terms which they seem to love but for the life of me I cannot understand why, when they get a practical market assured to them, they say it is of no value. This trade agreement assures to Canada a certain market for a considerable portion of her exportable wheat surplus each year. We say that that should be of some value.
Let us try to envisage what will happen each year. The British buyers of wheat will bid to the world sellers for their products and Canada will come to the forefront along with the United States, with the Argentine and other exporters of wheat. Let us see whether or not this pact puts us in a preferred position. A man close to a market has an advantage over a man distant from a market, as hon. members from the west well know. Why? Because if it costs a farmer

at a distant point six cents a bushel to market his wheat, he is to that extent at a disadvantage. If I have a farm close to a market where I can sell my wheat, and if I save six cents in mileage or freight rates, I am that much better off than the man distant from the market although we are both selling at the world1 price. Am I not in a preferred position over a man further removed when I can save six cents a bushel freight rate on my wheat? Then, let us apply that to the situation in question. It is a question, not of mileage, but of preference, and whether Canadian producers get a preference of six cents a bushel by reason of a shorter haul or by reason of some other preference, it is six cents a bushel just the same, although the world price is the same. Without extending the matter further, let me put it in this way, and I submit that this is true: When world sellers seek entry into the British market, the Canadian producer of wheat will get in that market the world price. Those who do not enjoy the preference given in this pact will get what if they want to enter the British market? They will receive the world price less six cents a bushel. Hon. members may say that we have not influenced the world price of wheat. That is no doubt true, but the Canadian producer of wheat will get the world price, and those who have not the benefit of this pact will get the world price less six cents a bushel. Is there no advantage in that?
Let me put the matter in just one other form and then I shall have finished: Hon. members opposite decry this agreement; they say that it is no good. The United Kingdom has given us a preference of six cents a bushel on our wheat. Let me put the matter conversely. Supposing Canada were not able to have that preference; supposing the United Kingdom negotiated a treaty, not with Canada but with the United States, and supposing under that treaty the United States was given a preference of six cents a bushel in the United Kingdom market and Canada was not. What then would hon. members from the west say? Supposing Canada were not in this pact but that Australia was, that the Argentine was; that Russia or some other country was, and that they were given the six-cent preference and we were not. 1 think I have only to put that possibility to the committee fior any man to envisage, to realize what an outcry would come from producers of grain in the Dominion of Canada. I hesitate to suggest the headlines that would appear in all the western press irrespective of party politics. I hesitate ho think what the hon. member for South Battleford, if faced

United Kingdom
with such a situation, would say in this house. Then, indeed, you might hear, and perhaps with some reason, in various centres in this country, of the beginning of a movement to secede from the empire. What would this be called? It would be called discrimination against Canada, for which Canada would not stand, and I doubt whether Canada would stand for it. So I say that we can measure the benefit to Canada by virtue lof this preference in terms of the disadvantage she would suffer if a like preference were given to the United States and not to this dominion.


Mr. RALSTON:: After the speech from
the hon. member for Gloucester (Mr. Veniot), I feel that there is very little more which need be said from the point of view of the maritime provinces with regard to this matter of the routing of Canadian grain. I am sure we all share in the pleasure of seing the hon. member for Gloucester back again in the house. It is a great pleasure, particularly to us from the maritimes, to hear him in his characteristic style, standing up for the part -of the country from which he comes. It would be almost painting the lily for me to add anything to what he has said.
I just want to remind our western friends of this: If we from the maritime provinces had been writing the agreement, we might well have requested the government at least to endeavour to insist on the word "port" being inserted in article 1 instead of "part," so that it would ensure that grain to receive the benefit of the preference would have to go through Canadian ports. Those are the terms under which the 10 per cent additional preference is permitted under our Canadian tariff. That has not been done. The word "part" is used in the agreement, permitting the British government to make regulations whereby goods coming from a part of the British Empire, even though they are actually shipped from some foreign port, may be given the preference. I say to my hon. friends that we from the maritimes might complain of that. On the other hand, they complain that the agreement has not gone further so as to permit the preference to be extended, not only to goods which are in direct transit, but also to goods which may have been stored at a United States port. This seems to have been a compromise, and one which the Prime Minister quite frankly says was not stipulated for by the Canadian government but was part of the British regulations under the Import Duties Act.


Richard Bedford Bennett: I tried to make it clear that the regulation was one that had been in force with respect to shipments before the Import Duties Act was passed and incorporated one of the regulations under it.


James Layton Ralston: My right hon. friend corrects me-and I accept his correction-that it was in force even before the Import Duties Act was passed, or in other words, is a part of the British administration of their act with regard to duties. Under those circumstances I feel there is not very much chance of changing the situation to permit increased shipments through American ports and I .must say that coming as I do from the maritimes, I am rather gratified that such is the case. But when I "Say that, I say at the same time, and I hope my hon. friends from the west will not consider it as any empty expression, that I do not forget, and the people of the maritimes will not forget, the support which was given by our friends from the west about three years ago in connection with the matter of freight rates in relation to the question of maritime claims. All we ask them now is, that if this agreement is to pass, they join in giving this method of administration a chance and not press further than the agreement and the regulations already provide, for the elimination of Canadian ports. Canadian ports, under the agreement as it stands, can now be sidestepped to some extent. Great ports have been established on both the maritime and the western seaboards where large expenditures have been made. Those ports have been regarded as national assets and national expenditures have been made in the interests of the people, not only of the maritimes but of Canada generally. Let me conclude by saying I join sincerely and heartily in the views which have been so admirably expressed by the hon. member for Gloucester.
Mr. ROWMAiN: I wish to say a word or two with respect to the remarks of the hon. member for YorknSunbury (Mr. Hanson) who introduced this discussion, following the question of the hon. member for Lisgar (Mr. Brown). I am gratified to learn that the hon. member for Shelburne-Yarmouth (Mr. Ralston) has at last found something to commend the treaty to him.	.


James Layton Ralston: I am glad anyway I have made my hon. friend glad.


Mr. BOWMAN:: There was one remark made by the hon. member for York-Sunbury which causes me to say the few words I pur-
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pose saying, and that was that in western Canada there was little support for the use, as advocated by two or three hon. members this afternoon, of maritime ports. Let me just remind hon. members from the maritimes on both sides of the house that after all the sale of wheat is purely a business proposition, and that the difference of a fraction of a cent, a quarter or an eighth of a cent in the quoted price may mean the sale or loss of sale of millions of bushels. Consequently it is extremely important that the lowest possible cost of transportation should rule in the shipment of grain. Our freight rate structure in the west is built up very largely on the competition which our sale of wheat has met with in the open markets of the world.
Shortly after the hon. member for Cumberland made his remarks in the house the other day, I spoke to him with regard to this question. I was in some doubt what rates were in force from the eastern lake ports to Halifax and Saint John, and I was told by him that very recently the Board of Railway Commissioners had put into effect a special rate for the month of November which was equal to about six cents a bushel. Hon. members from the maritimes should bear in mind that this is the first time that wc have had this special rate, and that up to the present there has been very little to induce the western grain dealer to ship his grain to Halifax and Saint John if the overland route was to be followed. Undoubtedly the overland route could not have been used by grain dealers for the shipment of grain with the old rates prevailing. It must be clear also to hon. members when appeals are made to the wrest that it is not the western farmer who has anything to do with the routing of his grain. He sells his grain to the dealer, and the dealer in the ordinary course of business seeks the cheapest route so far as carrying charges are concerned, no matter whether it be via Montreal, Buffalo or some other port. It is purely a business proposition. Consequently if the maritimes are to appeal to the west on this proposition they must be able to show to the grain dealer of the west that the5r have a route available over which grain can be shipped as cheaply as over any other route. So far from there being any feeling in the west as against the use of maritime ports, I can assure hon. gentlemen from the maritimes that there is none, and more than that, the west would be more than pleased

if we could utilize our owm eastern ports and, in addition, our own Canadian railway transportation system in shipping that grain to the eastern ports.


Mr. CHAPLIN:: And western ports, as well.


James Langstaff Bowman: And western ports as well. While on that point, and speaking from memory, within the past year one of our western papers, the Manitoba Free Press, had a very prominent editorial advocating the routing of our grain east over the national transcontinental. So I would assure hon. gentlemen representing maritime ridings that they have the full sj^mpathy of the west in this matter, and I am sure that I speak for all the western members in that respect. As soon as they can prove that they have a feasible route which will compete with other routes in the matter of cost of transportation much more grain will go via Halifax and Saint John to the European market.
Before taking my seat may I refer to the remarks of the hon. member for South Battle-ford? Frankly I cannot follow him when he contends that our wheat will be offered at a lower price upon European markets.


John Vallance: I did not say it would be offered at a lower price. I said that the price would be determined in the way I indicated.


James Langstaff Bowman: And the price would be determined accordingly. Is that correct?


John Vallance: Would be determined in Europe.


James Langstaff Bowman: Quite true, but not only
in Europe but throughout the world because, after all, wheat is a world product, and as was pointed out by the Prime Minister a moment ago, the price is simply fixed by calculation in Liverpool. May I point out that by this preference we get an assured market in the United Kingdom for a certain portion of our grain. That leaves just that much less quantity to be sold in the European markets in competition with the grain of other grain-producing countries of the world. Consequently, to say the least, it will not have any effect upon reducing prices. Personally, so far as I am concerned, it does seem to me that this preference is going to give just what the government intended that it should give, namely, an assured and stable market in the United Kingdom for a substantial portion of our grain at the world's price.

United Kingdom


Donald MacBeth Kennedy: I think
the Prime Minister's statement has cleared up any difficulty I had over some of those newspaper reports. Regulation 12 in itself is plain enough. It will be found at page 576 of Hansard:
When empire goods consigned to Great Britain or Northern Ireland have been transshipped en route, or have been shipped from a foreign port after overland transit from the enipire country of origin, the importer at the time of making entry will be required to produce the through bill of lading or railway consignment note from the country of production to Great Britain or Northern Ireland in support of the certificate of origin.
I think that is plain enough. That is through transit. It goes on:
Where a through bill of lading or consignment note is not available, the invoice, local bill of lading or consignment note from the original point of origin, and a certificate of arrival or landing at, and exportation from, the port of transshipment will be required.
I think that also is perfectly plain. In the one case we have the one consignment note right through, and in the other the original note with the papers in connection with the shipment through. The Prime Minister stated today that the mere interruption of the through shipment alone would not interfere with the preference. The statement made by Mr. L. Hore-Belisha in the British house was somewhat disturbing. The amendment moved by Sir J. Sandeman Allen asked that grain consigned from an American port and certified by Oanadian government officer^ to have been grown in Canada should be entitled to t'he preference. The regulation calls for the original consignment note from the British country, but certified in connection with its transshipment through the foreign country. Quite different.
Since that debate in the British house, however, Mr. Chamberlain made a statement that appears in the Ottawa Citizen of November 4. Dealing with this matter, it says:
He then reiterated the government's stand that in order to gain the benefit of preference in the United Kingdom an article must not only have been grown or produced within the empire but must also have been consigned from an empire country.
"This does not mean," he elaborated, "that passage through another country necessarily deprives it of the preference. What it means is that in order to secure the preference it must be sent on a through note, and it is therefore open to the exporter in an empire country so to make his arrangements that when he makes his consignment he can accompany it by a through note and thereby secure the preference.
The whole question was whether it must be consigned through, either by the original consignment note and certificate, or whether interruption by storage would make it impossible to consign it through. I understand from the statement this afternoon that the interruption for a time does not do away with the possibility of consigning through and identifying the grain by the original consignment note, as stated in the regulation, with a certificate vised by the customs officer and by the British consul.


Mr. MOTHERWELL:: Mr. Speaker, I
would point out that we have two altogether different interpretations of this problem. According to the hon. member for York-Sun-bury (Mr. Hanson) it appears that we cannot escape being penalized with an import duty of six cents if we ship wheat to England via Buffalo. On the other hand the hon. member for Peace River (Mr. Kennedy) thinks it will go through and escape being penalized as foreign wheat. That has got to be cleared up. But whichever way it goes it looks to me as if someone is going to get stung. If this wheat is to be forced to go out via Canadian Atlantic ports against heavy freight rates- though I understand they are not so heavy now-at a greater cost than via Buffalo, someone will have to pay the shot. I do not think there is any member on either side of this house who would not be delighted to see all our grain go by Canadian ports; I have always been in favour of that, but always with one condition, that it must not cost too much more than by the other route. About three-fifths, on the average, of our wheat that goes by the east Atlantic goes via Buffalo and if it goes that way as the hon. member for York-Sunbury seems to think if part of it enters Britain via that route it will be treated as foreign wheat and that they will levy the six cents duty on it entering Great Britain.
Surely it is not the purpose of the minister in this matter to set the west against the maritimes, because if that is his object he is not going to succeed; we are not going to have any altercation with the maritime provinces on this question. They are perfectly right in doing the best they can for their ports, but I suggest to them that the government must assume the responsibility for this. They were a signatory to this agreement, and if it was not properly dealt with or properly understood the government will have to accept responsibility. Let the maritime provinces appeal to the government and get a freight rate that will be as cheap as the way via Buffalo and all hands will be up for the Canadian maritime ports.
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An hon. MEMBER:: They have got that
rate now.


William Richard Motherwell: Well, they may
have; I understand they got it quite recently. Then our wheat should begin to roll down there. Some always does; in the winter time there is a certain amount of railway equipment required in the east to bring back supplies for the west, and that is one reason why a certain amount of overland haulage of wheat always took place, even in the old days, when there was no special rate. But what I want to point out is that there is a regulation in Great Britain preventing them from doing what they now want to do or what we possibly woidd like them to do. The British government can have this regulation changed tomorrow if they want to; it is not like the laws of the Medes and Persians which alter not. It is not like a part of this agreement, which cannot be changed, and I agree that it cannot without consulting the other contracting countries. But a regulation or even a law, can be changed in the British house. And since this government secured the abrogation of the Anglo-Russian treaty because they so badly wanted that done, surely they could have had this regulation changed if they wanted to. If they had pointed out that the interpretation now put on it by some would make it necessary to change the routing of the great part of the three-fifths of our transatlantic shipments from the route that has been in use for the last fifty years it might have appeared to all as unwise and unjust, especially without warning. The hon. member for Willow Bunch (Mr. Donnelly) gave, the other day, the quantities moving by that route, and I will not repeat them. Our government must accept the responsibility for this, they were a party to these agreements-very much a party, I thought. It is up to them to see that our freight rates, not only on the lakes and by rail, but on the ocean also, shall not be higher by the eastern Canadian ports-if our wheat is to be forced that way-than by Buffalo and the American ports. Figures were given by the hon. member for Macleod (Mr. Coote) and I think the hon. member for Bow River (Mr. Garland) showing that ocean rates from New York to Liverpool and other British ports are invariably lower than from Halifax to the same point. So it is up to the government by some means, subsidy or otherwise, to make the cost of carriage by our own ports as cheap as by the way the traffic has been going. Then the problem will be solved, and I am sure I would like to

see it solved in that way. But there is one way that I am not going to see it solved, and that is by quarrelling with the maritimes. It is up to them to see that the government meet their requirements, and it is up to us to see that they meet our requirements. If the government finds itself on the horns of a dilemma as between being stung by losing the six cent British import duty if shipment is made by Buffalo or paying four or five cents more by the Canadian ports, then it will have to choose which horn seems easier to ride on. I would like to see both horns taken off; let us dehorn the dilemma. The conference w'as held in this building, and this is the place where this real problem should have been threshed out.
On the 31st of October I asked this question of the Prime Minister:
Did the dominion government prepare for and submit to the Ottawa economic conference or any committee thereof, data and information bearing on the important problem of whether or not Canadian wheat when stored at Buffalo or other American ports and rebilled for export to the United Kingdom would be eligible to enter that market under the British preference of approximately six cents per bushel on Canadian and other dominion wheat.
The answer given by the Prime Minister
was:
I need hardly point out that the question relates to an imperial statute. Representations were made to the conference with respect to the matter. The British, being large shipowners, claimed the right, which they have exercised, to determine the conditions under which the preference provided by the statute would be granted. I can add nothing further to that.
My right hon. friend was much more submissive in that case than he was with respect to the Russian treaty. If my right hon. friend had seen the difficulty as we see it now he surely would have had some explicit understanding as to whether our wheat going via Buffalo would be looked upon as foreign wheat or Canadian wheat after being stored there say one to ten months. The Prime Minister must accept the responsibility that rests upon him and the other Canadian delegates, present, and we look to him to solve this question, either by interceding with the British government or by negotiating with the maritime provinces. If it is the deliberate policy of the British government to make the condition what some understand it to be, that wheat is eligible for consideration as preference wheat only if it goes through our ports, I have no doubt Great Britain will be ready to negotiate. This is one of the differences provided for in the agreement that may be

United Kingdom
adjusted. They may ask some quid pro quo if any change is made, but surely this is one of the problems that should be solved, not so much by scrapping over it as by earnest negotiations and personal interviews.
I think it is time the Minister of Trade and Commerce took a hand. He will not get very many hon. members to follow the militant lead of the hon. member for York-Sunbury. I think he was looking for a little scrap with someone, but we are not going to scrap on this question. The hon. member for Peace River seems to take quite an opposite view; he thinks it is all right, and I should like to know if the hon. member for Peace River has had any information from the minister, or if the minister has any information to give the rest of the house that may help solve this problem. Perhaps we are all talking to no purpose; perhaps the wheat will go through Buffalo and be stored there for any period up to ten months, and still receive the exemption from British import duty of six cents. I think ten months is the time limit, after which it is charged the regular duty of forty-two cents by the United States. The minister might throw a little light on that question, as to whether our wheat going through the United States will be recognized as Canadian wheat. I am disposed to think some means will be devised whereby that will be done. I wonder if the minister could not enlighten us, and perhaps shorten this discussion.


James J. Donnelly: Coming from a wheat growing district, and being a wheat grower myself, I must say that this question of the marketing of wheat is of prime importance to the people of western Canada. Two things must be taken into consideration in the marketing of wheat, first the price we are to get for that wheat and secondly the quantity w'e may sell. I know how interested the people in western Canada were when they heard talk of a six cent preference on wheat, and the possibility of getting that much more per bushel. I know what it meant to them, because I know that the condition of the wheat grower in western Canada today is almost hopeless.
I am sorry that I must agree with the Prime Minister when he says that this preference will mean nothing to the farmers of the west in the way of higher prices. The Prime Minister has said, and I have to agree with him, that this six cent preference will not give us a higher price for our wheat. I believe that all westerners understand that today. The second question, however, is with
regard to the quantity we may sell. The people of the west are very much alarmed over this trade pact, which they think will be a detriment to them; they are afraid it will interfere with their ordinary trade routes and hinder them from selling their wheat in the markets of the world. As we have been told, over sixty per cent of our wheat has gone through United States ports, and if that sixty per cent cannot enter the United Kingdom market under the terms of this agreement it must find a market in Europe, outside the British Empire.
My hon. friend from York-Sunbury referred to the possibility of shipping our wheat through the maritimes. I may say candidly that western farmers do not know how their wheat is sold. They would just as soon see it go through the maritimes as any other place; in fact we would rather see it go from Canadian ports if that could be done without any extra cost to the western farmer. At present, however, we must realize that there are only two or three exporting companies in Canada handling wheat. Years ago we had the pool, the western grain growers and a lot of other companies, but today three companies do practically all'the exporting of wheat, and those companies have their headquarters in Prance. They have agents here who buy the wheat and send it to the markets of the world. I do not know whether or not these people, in selling that wheat, can get around the matter of storage at Buffalo.
I believe the Prime Minister said that this matter was brought up and discussed at the conference. If it was discussed there and provision was not made for our exporters to ship through United States ports, then I say the government neglected their duty. It was their duty to see that our grain could be shipped through United States as well as Canadian ports. Someone has referred to the elevators built by the pool, the western grain growers and other companies at Buffalo and other places. Surely that does not concern us; it was up to those people to build their elevators wherever they thought best. These companies built their own elevators with their own money; if they built them in the wrong places it is just too bad for them.
There is no doubt that Buffalo holds a strategic position in regard to the export of wheat and there is no doubt that if our exporters could send our wheat through Saint John and Halifax and get it to the markets of the world as easily and as cheaply as it can be sent through New York, Philadelphia, Baltimore and other places, our wheat would
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go from Canadian ports. More than that, I believe that if western grain growers had any say in the matter, and if it could be done just as cheaply, they would send their wheat by the Canadian route, but the western grain growers have nothing whatever to do with the way the grain is sold. The people exporting grain take two things into account, first the cost of export and secondly the facilities available. We know that one of our chief means of shipment is by ocean liners from New York, where they have a floating elevator which fills the liners with wheat as ballast, which is carried at a very low rate. These liners will not come to Halifax and Saint John in order *to get that ballast; in fact they will not pull up to the elevator; the elevator has to come to them. That is why so much wheat goes through New York; it obtains that cheap freight rate.
Let me repeat that if our government, in drawing up this tardy pact, neglected to take into consideration this important point, theirs is the responsibility and they will have to take the blame or the praise as the case may be for having arranged it in this way. The hon. member for Peace River thinks we can ship our grain through United States ports and hold it in storage there, and still get the preference. I have discussed this question *with some men who ship grain, and they have told me they think it might be arranged. It might be done iby some sort of subterfuge. They say it might be shipped down the lake, consigned to England; the exporting companies will consign it all to the British Isles and they will have it held over in Buffalo or New York or somewhere there, and then ship when it suits them, on to England. Whether that is so, I do not know. I should like to have an explanation from the Minister of Trade and C-ommerce with regard to this. Will he tell us whether it is possible for that to be done or not? I repeat, so far as the maritimes are concerned, if we can ship through maritime ports as easily and as cheaply as through New York or Buffalo, then the western grain growers are ready to ship that way; but the Minister of Trade and Commerce should give us a clearcut opinion as to what we can do with regard to these shipments going through Buffalo at the present time.


Mr. MYERS:: It is not my wish to prolong the debate on this question. I might say, however, in the five or six minutes I will speak, that with us in the maritimes this has been a burning question for a great many years. I am very much pleased indeed to hear the expressions of goodwill from western mem-

bers on both sides of the house with reference to the maritime provinces and maritime province ports. The hon. member for Melville (Mr. Motherwell) and the hon. member for WTllow Bunch, who have just spoken, are somewhat vague in their remarks, however. 0<j the one hand they hold out the olive branch to the maritime provinces, and especially the maritime ports of Saint John and Halifax, and apparently thejr try to convey to us in no uncertain tones the vast amount of goodwill and sympathy they have for us and our ports. Then they spoil their whole argument by turning round and trying to get the Minister of Trade and Commerce to assure them that there may still be some way out whereby their grain can flow through American ports. That is the phase of the argument that seems to spoil the whole thing.
In the maritime provinces the whole question of confederation still comes up frequently in political debate. It is a fact well known to any man who has studied the history of confederation that we in the maritimes were promised certain things by the rest of the dominion for the advantages which in our opinion we were losing in entering confederation. Our natural flow of trade before confederation was through the Atlantic seaboard. That is a story I will not go into now, but we were promised, upon entering confederation, that we should be linked up with the rest of the dominion by a railway system, and the Intercolonial railway was built accordingly. If anyone cares to look over the report of the Duncan commission, he will find that that commission went very thoroughly into these matters in 1926, and the commission states that the Intercolonial railway was built for the express purpose of inducing us to enter confederation-that it was purely a political road and was never intended to pay dividends on the money invested in it.
We have invested vast sums of money in terminals, elevators and docks in the seaports of Saint John and Halifax, and to us it is a great conundrum indeed why, after we have spent these huge sums of money in our railway system, in our docks and elevators at maritime province ports, they are not being used. We cannot understand it. We know that the bulk of the grain of the west will continue, during the open season of navigation, to flow down the St. Lawrence through the port of Montreal. We are satisfied with that; it is a Canadian route, a Canadian port. But when the St. Lawrence is frozen up we see no reason why a certain amount, enough to keep the elevators and railways busy,

United Kingdom
should not go through the ports of Halifax and Samt John rather than through American ports.
It has been said today that arrangements have been made with reference to freight rates, whereby if the western grain is shipped over this route the shippers will not suffer by reason of freight rates. Let me say that it is pretty nearly time that this arrangement was made. We own the railway and should be able to make such rates as would render it possible for this grain to flow over our own railway and through our own ports. Consider the situation as it is today. How many of our own Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Ontario railway-men are walking the streets idle, some in the bread line, for want of work? And just think of the work it would give our own railways and railway employees if, during the winter season, a great share of this wheat could be diverted through Canadian ports. Think of the work it would give our own railway employees and the joy and happiness it would bring to their homes.
We in the maritimes have always loyally supported both central and western Canada in any of the great undertakings in which the dominion as a whole has been engaged. We made no kick in the maritime provinces when western Canada asked for the Hudson Bay railway. We contributed our fair share to the building of that railway, and we hope that when the port of Churchill is further developed it will result in great benefit to a certain section of western Canada which will us.e that port. We have contributed our fair share to the building of the rest of our railways. We have contributed our fair share to the building of the great canal system in central and western Canada-all this for the benefit of western Canada, especially with respect to wheat. We in turn now ask that the ports of Halifax and Saint John receive that measure of assistance which has been long denied them.


Felix Patrick Quinn: As a representative from the constituency of Halifax, I feel that this subject should not be dropped without a small contribution from me. I want to endorse what has been said by the representative from York-Sunbury (Mr. Hanson) in bringing this matter to the attention of the house this afternoon. That hon. gentleman presented the case for the maritime ports very clearly and definitely. It is hardly necessary for me or any other representative from the maritimes to elaborate what he has said, except to endorse his representation and perhaps to add a word here and there to fill in some of the small gaps. For instance, some of our western friends, the hon. member for Melville (Mr. Motherwell), the hon. member for Willow Bunch (Mr. Donnelly) and others whom I have heard outside as well as in the house, seem to have some misgivings as to the facilities for handling grain shipped through Canadian Atlantic ports. I might be allowed to refer to a statement which should remove any doubts on that score. According to the export freight department of the Canadian National Railways, which I think should be sufficient authority, the cost of shipping bulk wheat from the so-called bay ports of the great lakes to Halifax and St. John by rail is less than the rail rate to New York and the same as the rail rate to Portland, Maine. The freight rate to St. John, Halifax and Portland from Midland, Ontario, is 15-17 cents per hundred pounds while from Midland to New York it is 22 cents. The rate from Port Colborne to Halifax, St. John and Portland is again 15-17 cents, but to New York it is 17-50 cents and will be 18-50 cents after November 23. I might point out that there is a special rate in effect at the present time for the fall movement of grain to the Atlantic ports. This is a rate of ten cents per hundred pounds and it meets the competition of the movement from Buffalo to New York where a similar rate prevails. I think these facts should remove any doubts or misgivings as to rates which our western friends have with regard to the shipment of Canadian grain through the ports of St. John and Halifax.
I have heard this afternoon of the considerable shipment of American grain through Canadian ports. The latest figures in this connection are for the calendar year 1931, and they show that the American grain shipped through Canadian ports during that period amounted to 12,050,000 bushels, while Canadian grain through United States ports amounted to 62,000,000 bushels. The United States grain passing through Montreal amounts to about one-fifth of Canadian grain passing through the port of New York.
I think I can remove any doubt there might be as to handling capacity. In Halifax the handling capacity is 30,000,000 bushels, while at Saint John it amounts to 65,000,000 bushels. This total of 95,000,000 bushels should take care of all the shipments to these two ports during the winter months.
Doubts have been expressed with regard to ocean tonnage. I have under my hand the latest schedule of steamship services from Halifax. This is issued by the harbour commission and shows that there are 181 fixtures

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for Halifax up to the end of January, 1933, providing a wide range of ports. This list does not cover tramp tonnage which, as all hon. members know, is flexible and moves from port to port as business warrants. In other words, within a period of two months there will be 181 sailings of ocean-going steamships without taking into account any tramp steamers. This is an average of three a day and I am sure it would take care of all the grain which could be handled through the port of Halifax.
The hon. member for Melville (Mr. Motherwell) seemed to have some misgivings as to ocean rates. I say to him that he need have no fears on that score because the rates from all the ports on the Atlantic are competitive. They are about the same between Halifax and Liverpool as they are between New York and Liverpool. I am pleased to note the sympathy expressed by hon. members, particularly from western Canada. I am sure that this will be very pleasing to the people of the maritime provinces and I hope that it will mean the accomplishment of the efforts of the representatives from eastern Canada over a period of years. The result will be that the winter business, particularly of the ports of St. John and Halifax, will be benefited to such an extent as to warrant what has been said in their favour.


Edward James Young: Mr. Chairman, my right hon. friend the Prime Minister (Mr. Bennett) stated a short time ago that no industry in the country produced so much new wealth in such a short time as did the growing of wheat. I agree with him in that statement, but I think he must agree that that new wealth is produced under such conditions that the farmer, the primary producer who produces the wealth, has none of it left for himself. One of the conditions which handicaps the western farmer is distance from his market. This fall the freight rate on wheat from Regina to Liverpool has been approximately thirty cents a bushel; every cent added to that freight rate is one cent subtracted from the price the farmer receives, every cent subtracted from that freight rate is one cent added to the price the farmer receives. That is a point which should be kept always in mind when considering this question.
My right hon. friend stated that there was no secret arrangement between his government and the British government in connection with the routing of our wheat through Canadian ports. We accept that statement; in fact, we never for a moment thought there was such an arrangement. However, when the agreement was being entered into between the

governments of Canada and Great Britain as to the preference on wheat it was the duty of our government to see that that agreement was worded in such a way that no British official could put an interpretation upon it which would prove injurious to our farmers. There is no doubt in my mind that the regulation of the British government, read last evening by the Minister of Trade and Commerce (Mr. Stevens) and to be found on page 1034 of Hansard, will have the effect of diverting a certain amount of our wheat from American to Canadian ports. We are told that that will not affect the freight rate, and, therefore, will not affect the price. I ask this question: if our wheat can be sent through Canadian ports just as cheaply as it can be sent through American ports, why has it not gone through these ports before? Wheat will follow the line of least resistance, it will take the route where the freight is cheapest and the service is best. We are told that from now on the rates from Halifax and Saint John will be competitive with those from New York, and we accept that statement. If the New York rates advance, the maritime rates will advance; if the New York rates decline, our rates will decline.


An hon. MEMBER:: They will be the same.


Edward James Young: They will be competitive. Let us see what effect this agreement will have upon rates. The hon. member for Willow Bunch (Mr. Donnelly) has pointed out that the New York rates are controlled by the ocean liners sailing from that port to European ports. These vessels are always seeking a cheap cargo to serve as ballast and they are willing to carry wheat at a low rate. Such a practice would reduce the rates from New York, and, therefore, from the maritimes. This arrangement will eliminate this competition from the market. An ocean liner that is coming into New York and that has been in the habit of carrying wheat from there to Liverpool at six cents a bushel will find itself confronted with this condition, that before it can land that wheat at Liverpool it has to pay a six cent duty. Will they carry wheat at six cents a bushel any more? They will do one of two things: either demand a higher freight rate on that wheat or drop out of the market for wheat. If they demand a higher freight rate, the rate from New York increases and the competitive rate from the maritimes increases. If they drop out of the market, you have removed from it the controlling factor that has kept freight rates down. In either case

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freight rates from New York and also from the maritimes will advance. As I said before, every cent you add to the ocean or any other freight rate is one cent subtracted from the price which the farmer receives for his wheat. I say to my friends from the maritimes: We cannot afford that. The hon. member for Vancouver Centre is, I see, enthusiastic for this arrangement.


Ian Alistair Mackenzie: I have
not said a word yet.


Edward James Young: I want to ask him this question which he can answer when he speaks: If it is in the interest of Canada that we should ship our wheat through our maritime ports, why should we not ship our British Columbia lumber through the same ports?


Ian Alistair Mackenzie: Oh, no.


Edward James Young: My ho*, friend says: "Oh, no." Why not? The answer is obvious. He will say that the traffic cannot stand this and he would be correct. I say the same to the committee : Our wheat cannot stand a higher freight rate, and if this arrangement is what it seems to be, it can have no other effect than to increase the ocean freight rate and therefore subtract from the price which the farmer receives for his wheat.


Mr. BRADETTE:: I am absolutely in
favour of any arrangement or agreement between any sections of the empire which will allow an all-Canadian routing of our commodities. There is a theory or philosophy of evolution, but so far they have been unable to find what they call the missing link. There is in the Canadian National railway system a forgotten link, which is the Transcontinental from Quebec to Winnipeg. For the last six successive sessions I have spoken in this house of the urgency and necessity of giving that transcontinental section a fair share of through traffic, so far as passenger, freight, grain and cattle traffic is concerned, from Winnipeg to the Atlantic seaboard; but so far, although I have received support from some members in the maritime provinces, I have not been successful.
I noticed this afternoon only one member mentioned the Transcontinental. I believe by this route we could very easily give to the western wheat growers and grain growers in general just as good rates as they are receiving at the present time on shipments through United States seaports. A few moments ago the hon. member for Weyburn said that freight follows the line of least resistance. That does not apply to Cochrane which is a divisional point between Winnipeg
53719-67^
and Quebec. If I buy a carload of flour for my trade, it has to go twice the distance necessary. It is billed not directly from Winnipeg to Cochrane, but by Fort William, North Bay and Cochrane, so that freight does not always follow the line of least resistance. I believe the Canadian people have not been treated fairly so far as the Canadian National Railway system is concerned in regard to giving the Transcontinental that through traffic for which it was originally built. The Duff report says that it cost an enormous sum of money to construct in the northern section in Canada one of the finest roadbeds there is on the North American continent, but with the exception of possibly two or three years when an experiment was carried on in the winter months, practically no grain from Winnipeg has gone through to the seacoast by this route. During the years that experiments were being carried on in connection with through traffic over that section, I received information that it cost the railway company, including a profit, eleven cents a bushel from Winnipeg to Quebec. When you consider that on that roadbed, on account of the extremely low grades and the very slight curvatures, you could haul a solid train of seventy-five full box cars, you will realize how the country has been cheated. If I understand the situation properly, any grain which is billed from the head of the lakes at Fort William to Buffalo will cost six cents a bushel. I do not know the exact rate from Winnipeg to Fort William, but it will be between four and six cents a bushel, so that a total of from ten to eleven cents will be paid to get the grain to a United States seaport. As I say, the experiments made prior to 1926 and during the winter months demonstrated that grain could be shipped from Winnipeg to Quebec via the Transcontinental for eleven cents a bushel. Under the present situation, as the railway employees are willing now to accept a reduction in their wages and also a decrease in mileage, I believe you could have the same haulage for at least from eight to nine cents a bushel, so on that score alone the country has been cheated to a large extent.
Although I belong, geographically speaking, to central Canada, I have always been sympathetic to the problems and claims of the maritime provinces, the three western provinces and British Columbia. I have always supported them loyally and listened to their arguments. Now I appeal to the western members that we in our section of the country have a grievance. If today we have a serious railway situation, it is partly due
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to the fact that the National Transcontinental has not received its fair share of through traffic. In 1908, as a young man, I saw a cartoon in the Montreal Star explaining the wonderful qualities of the new Transcontinental railway running between Quebec and British Columbia, whereby it was believed the time to the Pacific coast would be reduced by from forty-eight to sixty-four hours. To make the situation plainer, there was a cartoon showing two polar bears running around the North Pole and saying the}' had the record time for through traffic in the northern section of this globe. I hat particular method of shipping has never been applied t.o our section of the country. Further than that, at the present time the rails are rusting from Quebec to Winnipeg; there is no through traffic from one city to the other. We have only a tri-weekly passenger service from Quebec to Cochrane and no service directly from Cochrane to Winnipeg and Vancouver. That is the situation as it affects every citizen of that section of the country. This question is of importance not only to my section but to Canada as a whole, because we maintain that this transcontinental, which cost over $100,000,000 to construct in order to give more direct communication from ocean to ocean, is not receiving its fair share of through traffic. The experiment that was made applied not only to grain but to cattle and heavy freight, which all proved to be profitable. Therefore, on this score, I must repeat to the hon. member for Wey-burn that there are certain occasions when even the natural law of freight following the line of least resistance has never been applied to our section of the country.
During the debate this afternoon it was asserted several times that sometimes the routing of grain or other commodities or even freight from England going to Canada was decided upon in, as one man said, France. I was told on several occasions by railroad men that the routing of freight in many cases was decided in Liverpool. The same man told me that with regard to some freight cargoes leaving Liverpool and supposed to unload in the city of Quebec, that freight, on account of the fact that the bill of lading gave directions to unload in Montreal, had to go to Montreal first and then come back to Quebec. This shows the hon. member for Weyburn that sometimes freight does not follow the line of least resistance. As I am correct in my appeal, I shall be glad to receive support from hon. members from the western provinces. I believe that no one of them is set

in his idea that no grain should be shipped through our section. I shall go further. When the winter season comes to the head of the lakes, the ports of Port Arthur and Fort William are closed earlier than is Montreal, and no grain is shipped from that section to the United States seaboard. If they apply the principle, to serve the purpose of which the original construction of the Grand Trunk Pacific was intended, wheat could go forward all through the year, even during the winter months, because, as I have said, experience during the months of December, January, February and April, show that the scheme is quite practical. I am glad the opportunity has been afforded to give the viewpoint not only of the maritime provinces, but also of central Canada, because we who happen to be in the latter section are not receiving our proper share of through traffic.
Although this has nothing to do with the present discussion, I regret that the Duff commission did not find it possible to visit our section of the railway, a section which cost the people of Canada $100,000,000, and which was primarily meant for through traffic and not local traffic, although the latter has developed in a way that even the promoters did not deem to be possible. Had the Duff commission visited that section they would have found out for themselves that there we have the finest roadbed, the finest curvatures and the lowest grades of any road in Canada or the United States, but you might as well take the rails away for all the attention the road is receiving, I will not say from parliament, but from the Canadian people as a whole, who do not seem to realize to the full the opportunities we have there of giving service not only to the eastern provinces but also to the three western wheat growing provinces of our confederation.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Mr. STITT (Nelson):: Mr. Chairman, I listened with interest to hon. members advancing many reason why Canadian grain should be shipped by Canadian ports. I do not think I need tell this house that I am very much in sympathy with that argument. I also listened with great interest to the hon. members for South Battleford (Mr. Vallance), Lisgar (Mr. Brown), and Weyburn (Mr. Young), who were in great gusto crying to the skies for permission to ship their wheat by

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American ports, arguing why they should be permitted to ship by American ports in preference to Canadian. I find myself at a loss to understand why these gentlemen are advocating the shipping of wheat by American ports and why they are not concerning themselves with developing their own port at Churchill. The hon. member for Weybum made the statement that it cost thirty cents a bushel to ship wheat via Saint John and Halifax. May I point out that the rate per bushel on wheat from Regina to Churchill is 14-7 cents. In addition, the route is much speedier and certainly much safer than the St. Lawrence. That, I think, was amply demonstrated this year, when the Pennyworth landed flour in London just twenty days from the day the wheat was cut in Saskatchewan.
What is the history of this port of Churchill?
I have spoken of it several times. It was officially thrown open for business last year. Some ten cargoes of grain left that port, amounting in all to about two and a half million bushels. Now let us examine these shipments. Out of that two and a half million bushels, two million were shipped by the Continental Grain Company of New York and half a million by the Drteyfus Company, a French company also having its head office in New York. If there is so much merit in these American ports will my hon. friends kindly tell me why these American firms are shipping grain through Churchill? It cannot be patriotism; it cannot be mere sentiment; it must be a straight case of dollars and cents. I wish to say for the information of those hon. gentlemen that the Continental Grain Company saved four cents a bushel by shipping that grain through Churchill, in spite of the fact that they paid just twenty times higher marine insurance rates than the same grain would pay if shipped from Montreal. I Ihink that is something that is well worthy of consideration.
But that is not all. Last fall the Minister of Railways and Canals announced that the Churchill elevator would be available for winter storage. And it was filled to the roof. Once more I ask the question, by whom? By the Continental Grain Company of New York, for shipment this next summer. Surely there is something wrong with the western Canadian grain com,ponies, the wheat pool, the Grain Growers Limited, and these other people when they allow an American company to use that port, saving five or six or probably seven cents a bushel between now and the time the shipping season opens next spring. The Continental Grain Company will be able to undersell the Canadian dealers by five cents
a bushel on the Liverpool market. It is true that at the moment we are being penalized by iniquitous marine insurance rates. It is also true that the port of Montreal suffered from the same thing for many years. For a considerable time Montreal paid three and a half per cent; it was reduced to three per cent, then to two per cent, and it is now one-eighth of one per cent. But this reduction only came after many years had passed, and the necessary improvements had been made, of course, to that river route. In Churchill we are in the same position today as Montreal is as regards safety. There are no marine handicaps in Hudson bay or straits, in spite of the fact that we lost a boat this year, a boat that looked around two days before it found an iceberg.
Some hon. MEMBERS; Oh, oh.
Mr. STITT (Nelson); There is no question about that. That boat was deliberately sunk.


Armand Renaud La Vergne: Order.


Bernard Munroe Stitt: I think the evidence will prove it.
Mr. MACKENZIE (Vancouver); Who did it? Dominion Textiles?


Bernard Munroe Stitt: Now, I do not want to take up too much time; I just wish to say that I think the hon. members from Manitoba and Saskatchewan would be very much better employed if they would go back to their respective constituencies and do everything in their power to convince western Canadian grain companies and farmers that they should make use of this port. It is true we cannot ship all the grain from Manitoba and Saskatchewan through Churchill, but we can easily handle fifty million bushels a year at a saving of seven cents a bushel to the western Canadian farmer. I sincerely hope that when these western members go back home they will try to do a little missionary work amongst their people, because I think the time has arrived when they should not only think Canadian, but also act Canadian.


George Gibson Coote: Mr. Chairman, there was considerable discussion this afternoon regarding the shipment of grain from Canada to Great Britain through American ports, but it seems to me that there is one point which has not been brought out very clearly. I think there is no doubt that under the present practice a large amount of grain is shipped from the head of the lakes to Buffalo and New York, particularly in the fall, and held in elevators there for shipment to any point where sales can be made, and at any time that sales can
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be made. This is particularly true of New York. Very often advantageous freight rates can be secured on wheat from New York to Liverpool and London because there are so many liners sailing from that port. It is rather significant that the freight rate from New York to Liverpool and London, as pointed out before, averaged two years ago four and a half cents a bushel, while the freight rate from New York to Glasgow was seven and a half cents, and the rate from New York to Antwerp and Dunkirk the same year was ten cents. I think that proves conclusively that it is the service available on the liners sailing out of New York to Liverpool and London which keeps those rates so low. I do not see how under the new arrangement wheat can be kept in New York elevators available for shipment on short notice on any liner sailing for Europe. The agent of a steamship company now goes to the exporter in New York and says something to this effect: We have space for fifty thousand bushels of wheat on a certain boat sailing the day after tomorrow. We will give you a very special rate; we will offer you four cents a bushel. That may 'be a saving of one-half or one cent or more over the usual rate, and will in many cases enable that exporter to make a sale to some person in the old country, a sale which he could not have made had he to pay the extra one or two cents a bushel freight. So far as I have been able to find out from listening to the discussion and reading the regulations it will not be possible to send half a million bushels of grain, for instance, from the head of the lakes for storage in New York elevators, and then be in a position to send it to the old country in ten or twelve different shipments going at different times and to ten or twelve different importers. If that cannot be done it will place an impediment in the way of the shipment of our grain through these channels and we will not be able to get the benefit of the low freight rates that we have enjoyed in the past. If this should be the case I think it is to be very much regretted, though of course I hope it will not turn out that way. So far I have been unable to see any way in which this can be handled. Once this agreement is put through in Great Britain-perhaps it is already in effect-I hope this government will do all they can to see that some regulations are brought in under which it will be possible to carry on this trade. Personally I do not know how it can be done, but perhaps the government can find some way of doing it.
Just before I sit down I should like to refer to what was said this afternoon with regard to shipping our grain through Saint

John and Halifax. I believe one hon. member said that the railways now granted a rate of six cents a bushel from Midland or other Georgian bay points to Halifax and Saint John. That distance must be at least nine hundred miles, and for the life of me I cannot see how our railways can afford to haul grain that distance for six cents a bushel. The distance from my shipping point in the west to Vancouver is about 800 miles; the rate is 12i cents per bushel, and we have been told repeatedly in this house that this rate is too low, that the railways are losing money. I do not think the railways are losing anything, but if they are hauling it at even the proper cost I do not see how they can afford to haul grain from Midland to Saint John for a rate fifty per cent lower. Surely we should be careful about forcing traffic into such uneconomic channels as this would appear to be. I think we should hesitate before we attempt to do the impossible. Someone said this afternoon that you cannot divert trade into new channels with a stroke of the pen. I would say that you can kill trade with a stroke of the pen, and I would suggest to members from the maritime provinces, with all due deference, that we are attempting the impossible when we say our railways should haul grain from Georgian bay points to Saint John and Halifax for six cents per bushel.
I think it is time wTe approached these problems from the economic point of view. Let us not try to do the impossible. The price of wheat is so low in western Canada, and the production of wheat is so important to Canada, as was pointed out by the Prime Minister this afternoon, that this parliament should do nothing, particularly at this time, W'hich will lower the net return to the wheat producer by so much as a fraction of a cent a bushel.


Mr. SMITH (Cumberland):: Would my
hon. friend object to a competitive rate from the lower lake and Georgian bay ports to the Atlantic seaboard, to meet the rate from Buffalo to New York?


George Gibson Coote: I do not know exactly what
the hon. member means by a competitive rate.


Robert Knowlton Smith: An equal rate.


George Gibson Coote: I will say this: I think it
is impossible for the railways to haul grain from Midland to Saint John, a distance of approximately 900 miles, for six cents a bushel. I do not think it can be done.

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Mr. COWAN (Long Lake):: In my view the hon. member for Nelson is to be greatly commended for having drawn the attention of this house to the fact that the Liberals over there, and some Progressives, have completely forgotten the Hudson Bay railway. As long as they could make political capital out of it the Hudson Bay railway was everything in the province of Saskatchewan. Now that we have made a success of that railway-


Some hon. MEMBERS:: Oh, oh.


Walter Davy Cowan: Hon. members laugh. A few moments ago the hon. member for Weyburn was caught in a trap by the hon. member for Nelson and all he could do was sit and laugh at himself. I like to see a person able to laugh at himself when he is caught in a trap; it is a good thing to be able to do. We Conservatives started that railway and carried it through to success. For a time the Liberals tinkered with it, but we succeeded in carrying it through, and today it is a success. The point is this: So far as we are concerned in western Canada the ports of Vancouver and Churchill are Canadian ports as well as Montreal, Halifax and Saint John. We are here to build them up, while hon. gentlemen over there evidently are sold to Buffalo, New York, Philadelphia and other Yankee ports. I quite understand that since the Hudson Bay railway has lost its political significance they are willing to forget all about it, and instead they are now standing behind some companies in western Canada. In years gone by those companies invested their millions of dollars in Buffalo and other ports; they built up those Yankee institutions at the expense of this country, and if they are losing their money now it serves them blamed well right, and I have no sympathy for them.
So far as I am concerned I recognize that grain from west of Moose Jaw is tributary to the port of Vancouver, but the hon. member for Vancouver Centre does not seem to realize that fact. From Moose Jaw east to about Brandon the grain is tributary to Churchill, and from Brandon east to Fort William it should go to Halifax and Saint John, and to hang with the Yankees.


Albert Joseph Brown: Allow me to say that there has been some misapprehension in regard to the attitude of western members. We have no antagonism towards Canadian ports. We have full sympathy with the Hudson Bay railway, and I heartily commend the hon. member for Nelson on his remarks. We have not forgotten Churchill, Vancouver or the
maritime ports, but we must deal with thing3 as they are. We must take into account shipping conditions as they prevail today, and when steps are to be taken which will change those conditions we must very seriously consider the effect of those steps, and that is what we are doing here. It may be thought by some that we have been unduly critical in regard to this matter of wheat as it refers to this treaty, but it must be remembered that this has been entered into solely on the responsibility of the Prime Minister, against the advice of the grain trade, against the advice of the United Grain Growers, and against the advice of the pool.


Richard Bedford Bennett: That is not right.


Albert Joseph Brown: And on the advice of only one or two men.


Richard Bedford Bennett: That is not correct.


Albert Joseph Brown: This is correct, anyway: Representations were made to the Prime Minister by the grain trade and by the United Grain Growers; I know that to be a fact. Representations were made also by the pool.


Richard Bedford Bennett: And they abandoned them.


Albert Joseph Brown: I have never heard that they did. One or two may have abandoned their position and given the advice sought by the Prime Minister. That is quite possible, but I say advisedly that thi3 was entered into against the advice of the great majority of those who are interested not only in producing wheat but in marketing it as well, and against the wishes of the government of Great Britain.


Richard Bedford Bennett: I beg pardon; against the wishes of the government of Great Britain? What does the hon. gentleman mean?


Albert Joseph Brown: I mean this, that it was pressed upon the government of Great Britain, and they yielded because of the pressure exerted by the Prime Minister. Do we think for a moment that this was done because the people of Great Britain felt it in their interest to do it? Not for a moment.


Richard Bedford Bennett: The hon. gentleman knows they voted in the house on it the other day.


Albert Joseph Brown: I know they did, but that does not alter the facts as I have stated them. I know it was not done at the request of the people of Great Britain, and it was done against the advice of the great majority of those in Canada who are interested in the producing and marketing of grain. That fact is not in dispute. We must bear in mind that
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whenever anything is done to turn trade into different channels by means of tariffs or by such a method as is here proposed, unforeseen results are always possible. We, in criticizing this treaty, have indicated some of the possible difficulties that may arise, and to that extent, I think, we are justified in calling the attention of the house to these matters. I am happy to agree with the Prime Minister on this point-


Richard Bedford Bennett: Then he must be wrong.


Albert Joseph Brown: No; I will concede that the Prime Minister for once is right.


Ian Alistair Mackenzie: We are not so sure of that. What is it?


Albert Joseph Brown: I was greatly pleased with the first speech I heard the minister deliver in this house in 1926, when he emphasized the fact that wheat is our greatest source of new wealth. At that time it was difficult for us from the west to convince the people of eastern Canada that that was so. We resented very keenly the attitude of the present Secretary of State when he sought to belittle the Dunning budget because it gave primary attention to wheat. I have here the words which he used, but I cannot be bothered referring to them. That was the position which he took, however, in a speech he delivered at Buckingham during the last election. On that point, therefore, we are agreed: wheat is our greatest source of new wealth. The hon. member for Weyburn pointed out that while that is true, it is also true that there is very little of that new wealth left in the hands of the farmers. - Every cent that can be taken from the freight rate is that much put into the pockets of the farmers, and on the other hand every additional cent that goes in freight rates is that much taken out of their pockets.
Let me say this again in regard to maritime province ports. If it is necessary for the wellbeing of Canada that grain should be shipped through the ports of Halifax and Saint John, and if that cannot be done economically, then it must be done at the expense of the country generally and not at the expense of the producers of wheat.


Mr. ERNST:: Are you willing to try it?


Albert Joseph Brown: I simply lay that down as a proposition to which we adhere, that if it is necessary, in the national interest, to ship grain through Halifax and Saint John, and if it cannot be done economically, then it must be done at the expense of the country as a whole and not at the expense of the producers.


William Gordon Ernst: Are you willing to try it?


Albert Joseph Brown: The fact is abundantly clear today that wheat cannot be moved by way of these ports at the same rates, under favourable conditions, as by way of New York.


Richard Burpee Hanson: I challenge that statement. Prove it.


An hon. MEMBER:: Why hasn't it been going that way?


Richard Burpee Hanson: Because
the rate has been put into effect only recently-the rail rate.


Albert Joseph Brown: The fact is that the wheat does not go that way, and, as the hon. member for Weyburn pointed out, it will go along the lines of least resistance.


William Gordon Ernst: Are jrou willing to try the maritime route?


Albert Joseph Brown: I have nothing to do with it.	'


William Gordon Ernst: Yes, you have.


Albert Joseph Brown: Wheat is shipped by certain companies and the farmers who grow the wheat have nothing to do with it. Alternative routes are open at any time, and wheat has gone via New York in the proportion stated this afternoon. I have no doubt that in time the port of Churchill will develop just as we have hoped it would all these years, but we are dealing with present day conditions and with a situation of emergency, and we cannot wait until the conditions are such that all wheat can go by way of Hudson bay.


An hon. MEMBER:: Oh, oh.


Albert Joseph Brown: I wish the hon. member were able to discuss the question with some regard for the rules of ordinary logic and sane thinking.
The hon. member for York-Sunbury this afternoon held up his hands in holy horror at the suggestion that we were interfering with the British government in regard to the regulations. I have never been one to advocate that we should take part in determining the course of British politics, but it certainly does not lie with hon. gentlemen opposite, in view of all that they have done in the past and in view of their boast that the Prime Minister was responsible for turning the British people from the path of free trade into the rather dangerous path of protection, to reprove us now if we suggest that negotiations might be entered into with the British government in this matter. I must, of course, accept the statement of the Prime Minister that there has been no understanding or agreement with the British government

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in this regard. He did undoubtedly say, however, that the matter had been discussed, and if it was discussed then we can only conclude that they did not consider the point as worth laying emphasis upon. If that is the situation, then we must of necessity hold them responsible for the fact that the point was not seriously considered. These are the reasons why we have paid so much attention to this question of the wheat preference and its effect upon the shipping of wheat. It has been said in all honesty that some evils may possibly result. We may be wrong in that, but again I say that when there is interference with the channels of trade there are very likely to arise consequences that no one thought of at first. Therefore, it behooves us to consider this matter of the preference on wheat in all its implications, and to consider it with a good deal of care.


Richard Bedford Bennett: We are discussing an
agreement which cannot be varied by this chamber and which must be adopted in its entirety. That is a matter that has been referred to by hon. members on both sides of the house. Now it is fair criticism to point out that the agreement may not be as satisfactory as some people think it will be, but when that is done, why waste $15,000 per day of the taxpayers' money, $100,000 a week, in reiterating statements not one word of which adds any new information? The full particulars have been given to the house and nothing has been added to the controversy. I am content that we should stay here as long as necessary, but it is costing the taxpayers $100,000 a week.


William Richard Motherwell: To whom have we to look for information if not to the minister and the Prime Minister? But we are not getting it. I have been in parliament quite a while and I have never seen a minister so glued to his seat as the Minister of Trade and Commerce has been since three o'clock this afternoon, for he has not vouchsafed us one word, and I was here all the time. And now to-night hon. gentlemen are complaining as though we should be giving the information instead of the minister.


Henry Herbert Stevens: I have been sitting here
listening to the discussion, and on every occasion that an hon. member sat down, one or more other members immediately rose to speak. I was quite willing at any moment to get up and answer any question, but let me tell the hon. member for Melville (Mr. Motherwell) that all this was gone over last evening.


Ian Alistair Mackenzie: Not at all.


Henry Herbert Stevens: Perhaps not all the
speeches, but full information was given. I have been over this myself about three times. Hon. members leave the chamber, and upon returning, realize they have not heard parts of the discussion and proceed to ask questions which have already been answered.


Ian Alistair Mackenzie: We have been here all the time.


Henry Herbert Stevens: Some hon. members have, but others have not. This afternoon my right hon. leader gave an exhaustive and authentic explanation of this matter, and if I were to talk from now until the morning I could say nothing which would add one whit to what the Prime Minister has said or to what I said yesterday and a day or two before. I must apologize to you, Mr. Chairman, for violating the rules of the house in making a tedious repetition-.because that is all it is-'but I must do it in order to satisfy the hon. member for Melville. However, I will confine my remarks to as few sentences as possible.
In the first place, this government has nothing whatever to do with the fixing of the conditions under which goods are admitted to the United Kingdom.
In the second place, the regulation which has .been read into Hansard at least three times and referred to repeatedly during the debate is one which has been in force since about 1919. I am not quite sure of the precise date of its origin, but I have in my hand one regulation dated February 1, 1926, in which paragraph 12 appears as paragraph 13. I could read this paragraph again, but I do not see that anything would be gained by doing so. This regulation has been part of the regular law of the old country.
In the third place, let us remember this: Great Britain has passed these regulations for the control of business entering the country This particular one is applicable to Southern Rhodesia on fruits passing out at Beira; it is applicable to goods transshipped from New Zealand or South Africa; it is applicable to the transshipment of goods from the Straits Settlements at Hongkong, and it is applicable to goods going from Canada via New York Boston or any other American port. It is a regulation which has been in force and which has been operating successfully and satisfactorily. Those who argue the extreme on one side want everything to go through Canadian ports, while those who argue on
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the other side apparently want to maintain precisely what is happening now at Buffalo.
The only duty cast upon any Canadian shipper is that of seeing that his documents are in proper shape. In the middle of the afternoon the hon. member for Melville asked a question clothed in a lot of supposititious language which he himself could repeat on the hustings and claim that the minister was unable to answer. He wanted to know if we could ship wheat through Buffalo in the same way as we have always shipped it. I told him no, because this regulation called for documentation. Any man with common sense would know that. We could go on and argue this thing for a week, but the fact remains that the regulation provides clearly for the transshipment in a foreign country on consignment provided that the documents are in proper shape. There is no question whatever of that. In the next place, a Canadian exporter is not permitted to consign his grain to a foreign country and leave it there to be reconsigned at will to the motherland. No one with any sense of fairness would ask that. That ought to be clear.


Albert Joseph Brown: The agreement is a joke.


Henry Herbert Stevens: The hon. member says it is a joke.


Albert Joseph Brown: That is the attitude the hon. minister took in connection with the Dunning budget.


Henry Herbert Stevens: Perhaps so. The hon. member says that this is a joke, but I say to him that I do not think he appreciates what I have said. If the hon. member asks whether a Canadian exporter can take his grain, consign it to a foreign country and then reconsign it to the mother country, I say that that cannot be done and never has been done. But the grain can be shipped through a foreign country if this simple regulation is complied with. There can be a direct shipment by consignment or an interrupted shipment accompanied by the proper documentation. The regulation reads as follows:
WThere a through bill of lading or consignment note is not available, the invoice, local bill of lading or consignment note from the original point of origin, and a certificate of arrival or landing at, and exportation from, the port of transshipment will be required. Such certificates are to be signed by the proper colonial or foreign customs officer at the port of transshipment, and in the case of the latter the signature must be vised by the British consular authority.

That is merely common sense which might be incorporated in a regulation passed by any country when dealing with goods passing through another country.


Edward James Young: Read the rest of it, please.


Henry Herbert Stevens: It reads:
It is essential to prove that the goods were consigned from a part of the empire to Great Britain or Northern Ireland, and not to a foreign country from which they were subsequently reconsigned to Great Britain or Northern Ireland.
That is precisely what I have been saying. I repeat, Mr. Chairman, I am sorry to take up the time of the committee in going over this matter once again. This is a British regulation which has been in force for some ten or twelve years. Hon. members suggest that this government, should go to the British government and ask them to change a regulation here and a regulation there. Would we allow the government of Great Britain, the government of Australia or any other government to come here and tell us what form of regulation we should have? It is not done, that is all there is to it. Ninety per cent of the suggestions made this afternoon by hon. gentlemen opposite were based on statements like this: If so and so happens, ruin will come. These things are not happening and are not likely to happen.
The hon. member for Lisgar (Mr. Brown), the hon. member for Weyburn (Mr. Young), and one or two others have been suggesting that there will be no shipping available at Canadian ports. I tell them now that the Cunard line are putting on a new service from Saint John and Halifax consisting of three sailings per week to London and Glasgow. Not only are these ships to be liners, but they are the vessels which have been going to New York. An official of the company advised me last night in my office that they were going to do this. Why are they doing it? Because we have entered into these agreements and they feel that the demand for shipping services from Canada will be sufficient to warrant this new service. Other steamship companies are doing the same thing.
Hon. members talk of these ports as though they were little by-ports. I was in Halifax a few weeks ago and I saw several ships from New York, Great Britain and other countries. These large ships constantly touch at this port, such ships as the Baltic and others. Some of the liners out of New York make a call at Halifax, which possesses a harbour unsurpassed by any other in this country, in-

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eluding my own harbour of Vancouver. They can sail right into the harbour and up to the quayside within fifteen minutes. Elevator and other services are right at hand. Why should we decry our own ports when there is no need of doing so?
Saint John possesses marvelous facilities, and let me say that, yesterday I was advised on the very best of authority that, in spite of the fact that we had rebuilt the burned area last year-and by the way, that was a splendid achievement by the contractors, who did the job in four or five months-they expect that within a month or two there will not be sufficient space for the shipping coming into that harbour. It is time we had a little pride in the achievements in both the extreme east and the extreme west. Instead of decrying Churchill, a project the development of which I believe many people watched with a great deal of anxiety because it was known to be a venture-


Edward James Young: Who decried it?


Ian Alistair Mackenzie: No one on this side did. You did.


Henry Herbert Stevens: I did not.


Ian Alistair Mackenzie: Well, we did not.


Henry Herbert Stevens: My hon. friend had better be quiet.


Ian Alistair Mackenzie: I will not be quiet.


Henry Herbert Stevens: Instead of decrying Churchill, we ought to have a measure of pride in that port. As regards the extreme west, I expect that out of Vancouver this year, close to 100,000,000 bushels of grain will be moved. During the autumn months Churchill has moved its quota of grain. Out of Montreal we have moved very large quantities of grain, and I am sure every Canadian is proud of that port which is a more advantageous one than New York or any other. In the winter months we shall have Halifax and Saint John, and as I said a moment ago I venture to say that this winter, if they are given the united support of this country, these two ports will handle goods for export in quantities never before known in our history. But with all that, let us not forget that this has not been done at the sacrifice of any Canadian interest.
Let me say a word about the Buffalo situation. Some hon. gentleman-I have forgotten just who it was-said a moment ago that three-fifths of our grain goes out by Buffalo and that the benefit on all that is going to be lost to us. That is pure, unadulterated nonsense.


William Richard Motherwell: That statement was not made by anyone.


Henry Herbert Stevens: It was made, because I heard it and I know what I am talking about. Let me explain how foolish such a statement is. In the first place, a substantial portion of the grain that goes out by Buffalo goes to the continent of Europe, and nothing in this agreement or the regulations interfere in that to the extent of a single bushel. In the second place, as regards that particular quantity which goes to the another country, a substantial portion will go, as it has always done, on through bill of lading as is provided for in the regulations. That is not touched. We have now narrowed the quantity down to a comparatively small balance. So my hon. friends, in raising these bogys are simply erecting hypothetical cases, imaginary grievances, something that is going to come with a big "if" in the future, instead of trying to look at this matter only in the interest of the west and of the east, in order that we may all pull together to make of Canada what it can be, one of the greatest countries on the face of the earth.
When I think of the old civilization down in the maritime provinces-and when I say "old civilization," I am speaking of it in contrast with the extreme north and west of this country, which are comparatively modern- when I think how the people down there stood behind the development of Canada, I feel it is about time we took an interest in their welfare. We need not sacrifice anything in so doing. Let us take at least a smiling interest in their welfare and see if we cannot help along business through those ports. I ask the same interest for the movement westward. In connection with this regulation, there is no need whatever to fear that any Canadian interest will be injured. On the other hand, it will probably greatly help Canadian interests and at the same time do no harm. Let us at least give it a chance.
When my hon. friends were speaking a moment ago they directed a question to me about the advantage of this six cent rate. It just struck me: What would they have said if this government, instead of securing a six cent rate, had said to the British government: Oh, well, we are not interested. The hon. member for Lisgar, who has spoken about the matter two or three times, asserts that the grain growers of western Canada say they do not want it. I can tell him that officials of the grain growers of western Canada, men much higher in their councils than he is, representative men, men who knew what they were talking about, men of standing, came to
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my office and said to me: "We do not wish to come forward and advocate the imposition of a duty in Great Britain, because that is, generally speaking, contrary to our principles." They were referring to the tariff. But they did not insist, as the hon. gentleman says they did, upon our refraining from asking for the imposition of a duty. Suppose we had taken the advice of the hon. member for Lisgar and one or two other hon. members opposite and said to the British government, as he tells us tonight we ought to have done: "We do not want this duty on wheat to apply to Canada at all." And suppose Australia came along, as she did, sat in on the committee and said: "We want a duty on wheat." South Africa wanted a duty on maize; she was not interested in wheat. Then suppose Australia is given a duty on wheat. Where would this front line be tonight facing hon. gentlemen opposite with a proposition of that kind? My hon. friend would be one of the first to say that we had betrayed the farmers. He and others opposite would have said to us: You did not watch the interests of the western farmers. Look what you allowed to be done for Australia while you did nothing for us.
Let us view these agreements with a degree of common sense. What happened? I said this last night, but with apologies, Mr. Chairman, I shall reiterate it. We had a committee of all the dominions studying this question. I was chairman of the committee on cereals; the Minister of Mines was chairman of the committee on metals; Mr. Coates was chairman of the committee on dairy products. The cereal committee went into the whole question much as is expressed in the various agreements reached at the conference. Australia, South Africa and Canada were the countries chiefly affected. India was affected on some items only. Every one of them asked for a duty on wheat. New Zealand was not much interested. Then they went on to deal with the other items. I was delegated as chairman, together with Mr. Bruce, who accompanied me, to meet Mr. Chamberlain and Sir John Gilmour and discuss this question with them. The hon. member for Lisgar asks:	What
mysterious understandings were arrived at? There were no mysterious understandings; there was a frank conference between Mr. Chamberlain, Sir John Gilmour, Mr. Bruce and myself on this question, and we worked out the details as we have them before us. After that was done and the other committees reported, the whole matter was brought together into this composite form, and agreements with the various dominions drafted and

passed in the form in which they appear at the present time.
Let us, as I said a moment ago, get away from this idea of supposititious happenings in the future and try to face the facts that we have in these agreements advantages for Canada, for Australia and for South Africa. On the other hand, we have given the mother country advantages in this market. Let us try to view the situation from a business standpoint and give these agreements an opportunity to become effective. I can assure any hon. member opposite, as well as my hon. friends in the opposite corner to my right, who have been very reasonable in the matter, that after these agreements have been put into effect, should anything crop up that seems to be working harm to any Canadian interest, this government will certainly be glad to take the matter into consideration and do what is necessary to effect adjustment and improvement. That is the very reason we left the agreement in that form, so that consultations might be had for the removal of any difficulties or complaints.
I apologize to the committee for occupying so much time, but my hon. friend said that I was glued to my seat. I am not glued to my seat very often. My hon. friend takes great liberties in this house. The language he frequently uses is neither elevating to the house nor a credit to himself. But for long years we have known the hon. gentleman; we respect his age, we know his temperament, and let his observations pass. But when my hon. friend directs observations like that to me again I should like him to take at least some cognizance of the facts as they have been put before him in the speeches delivered by hon. members here this afternoon.


William Richard Motherwell: I am glad, Mr. Chairman, that I succeeded in getting my hon. friend on his feet. I have to admit what I seldom have to admit, that I was unavoidably absent from the house last evening, and this is the first time that I have heard his explanation. I would remind him that when he was sitting over here and I was over there I had to make the same explanation four or five times, sometimes for the benefit of the hon. gentleman himself. But now he complains because he had to give his answer twice.


John Vallance: He never gave it last night.


William Richard Motherwell: All I know is that he did not give it this afternoon or evening. Moreover, he was just as dumb as if he were glued to his seat, for he never rose at all.

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I will ask you, Mr. Chairman, if I could possibly have been more conciliatory or less offensive than I was this afternoon, so much so indeed that one hon. gentleman opposite said that I was holding out the olive branch. That does not look as if I were trying to make political capital for the hustings. We do not have to: hon. gentlemen opposite are making it for us every day.
I took the ground this afternoon that if it were required, the British government could change the regulations without any difficulty just as easily as they abrogated the Russian treaty at the instance of my right hon. friend. I am not saying whether that was bad or good, but it was done. Now the Minister of Trade and Commerce says: We cannot go to the British government and ask them to change the regulations because it simply is not done. Just let us read the next article and see whether it can be done or not. Article 5 reads-


Armand Renaud La Vergne: Order.


William Richard Motherwell: I think I am justified. Mr. Chairman, in reading it. At all events, I will say that the next article obligates the British government to invite parliament to introduce the necessary legislation to change the regulations for the admission of our cattle into Great Britain.


Armand Renaud La Vergne: On the suggestion of the right hon. leader of the opposition, it was agreed to consider the treaty article by article.


William Richard Motherwell: But I can give the substance of it, Mr. Chairman. Anyone who has the agreement before him and reads article 5 knows that the regulations can be changed. The minister says that they could not ask the British government to do that. When did hon. gentlemen opposite get so submissive? It must have been since the conference closed. They can do it, Mr. Chairman, and they are simply trying to shirk responsibility in this matter.
I pleaded for the maritimes this afternoon. I have always been suspicious of Buffalo. I never liked our wheat going there because we have very little control over it. You do not know what is being done with regard to mixing at Buffalo or Boston or Philadelphia or New York. For both sentimental and business reasons, as a farmer and a citizen of Canada, I would like to see our grain going down through the maritimes and at no extra cost.


Richard Burpee Hanson: Why not help it?


William Richard Motherwell: I am helping it. I am trying to get this point cleared up. According to the minister now our grain is going to go both ways. That will be better still. A little always has. I pleaded with the minister to divulge his best hand this afternoon and said that it would help to Shorten the discussion, but he did not do it, and now he accuses us of wanting to make political capital for the hustings. Why, Mr. Chairman, we have such cartloads of it we do not know what to do with it all now. The minister says that we have nothing to do with the conditions under which our wheat will enter Great Britain. We have everything to do with it, or should have had at the recent conference. The minister also spoke as if no change could possibly be made. Before I sit down, Mr. Chairman, I desire to thank the minister for breaking his long silence and say that if he is going to stay another year or two where he is, he will have to get accustomed to anwering questions twice, especially important ones like this.


Ian Alistair Mackenzie: May I say in the first place, Mr. Chairman, that I take strong exception to the interjection of the Prime Minister when he said that we were spending $15,000 a day discussing these various items and agreements which we have now [DOT]before us for consideration. If the right hon. gentleman were here I should like to remind him and his administration that we were called here specifically for the purpose of implementing the agreements arising out of the Imperial conference. I should like further to inform him that this afternoon, when the hon. member for Lisgar (Mr. Brown) very properly introduced the argument as to the two possible routes, via Buffalo and New York or via our maritime ports, it was the hon. member for York-Sunbury (Mr. Hanson) who by inference introduced the suggestion that those of us who sit on this side were opposed to the development of our Canadian ports. I should like further to remind the Prime Minister and the Minister of Trade and Commerce that more of the time of the house has been occupied this afternoon and evening by the government benches than has been occupied by the opposition. The Minister of Trade and Commerce said a few minutes ago that we spent hours yesterday discussing this matter. What are the facts? That, sir, is a deliberate or inferential misstatement of the facts. I refer hon. gentlemen opposite to the record.


Henry Herbert Stevens: I did not say for hours yesterday. I said that this matter had been discussed on previous occasions.
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Mr. TOTZKE:: You said yesterday.


Henry Herbert Stevens: It was discussed yesterday,, and it has been discussed half a dozen times. I refer you to Hansard of three weeks ago.


Ian Alistair Mackenzie: I accept the minister's statement as to what he said, but if he will look at Hansard he will see that not one page of it was occupied in discussing yesterday either article 2 or schedule B. Am I not correct? What does the record show?


Mr. SPENCE:: What were they talking about then?


Ian Alistair Mackenzie: You were talking about nothing. If my hon. friend desires information and does not desire to be impertinent I shall tell him what we were discussing yesterday. We were discussing one of the most important sections in the agreement, article 1, and in regard to article 1, afler three weeks of debate, we obtained for the first time in this committee yesterday the admission from the administration that we were not guaranteed a margin of preference under the terms -of article 1.


Henry Herbert Stevens: That is not true.


Ian Alistair Mackenzie: Not only did we spend no more than fifteen minutes last night in discussing article 2 and schedule B, but the leader on the government benches last night, fifteen minutes before the time of the committee was up, moved that the committee rise and report progress. And the Minister of Trade and Commerce tells this committee now that this matter is very simple, after his own followers this afternoon had absolutely beclouded the issue. We on this side of the house are as keen for the development of Canadian ports, Vancouver, Churchill and the maritime ports, as any hon. gentleman on the Tory benches.


Mr. PORTEOUS:: Do you speak for your party or yourself?


Ian Alistair Mackenzie: After all we were the administration that spent most of the money for the development of Vancouver and Churchill and Halifax too. May I tell my hon. friend the member for Nelson (Mr. Stitt), that I entirely agree with his suggestion. I believe that a very large part of the wheat of western Canada, when proper adjustment of freight rates is made, will go by Vancouver and Churchill. I shall support all possible development of our maritime ports, but the members from western Canada who raised this issue this afternoon did so why? Because they are chiefly concerned with the

economic condition of the struggling farmer in western Canada, and I want to tell you that the needs of Canadian farmers to-day, especially those on the plains, must come before any sectional interests. We must have a readjustment of freight rates when the condition of our railways will justify it.
The Minister of Trade and Commerce tells us now that there is no difficulty in this, that it is only a matter of documentation. What did the Prime Minister tell us a few hours ago? He told us the whole situation was so terribly uncertain that he was drafting a special cable to send to London to find what it all meant. The Minister of Trade and Commerce and hon. gentlemen seek to draw red herrings across the trail, impugning the motives of hon. gentlemen on this side. The whole result is that we do not believe the administration yet appreciates the significance of this article; they- do not know its implications. The Prime Minister himself is now in communication with Hon. Howard Ferguson in London to find out from the Secretary of State for Dominion Affairs what is the significance of this agreement. My hon. friend contributes a lot of heat and tells me to be quiet when I make a sensible interruption-


Henry Herbert Stevens: What are you mad about?


Ian Alistair Mackenzie: I am not mad, I am just giving you back some of your own. Hon. gentlemen on this side are capable of looking after themselves in this matter. We know the western wheat situation. We have many brilliant economists on this side of the house who know the effect on the western farmer. On my responsibility as a member of this house I say that there is nothing in this six cent preference that will help the producer of grain on the western prairies, that will help to reduce unemployment on the prairies. But my hon. friends opposite have camouflaged the issue and tried to arouse prejudice. They accuse some hon. members on my left of being against the development of Canadian ports because they know that from an economic point of view there is nothing in this agreement. I resent the suggestion of the Prime Minister in regard to this debate costing $15,000 a day. I say we have a duty upon us to get all the information we can-


Mr. LAPOINTE:: You are not getting
much.


Ian Alistair Mackenzie: -on behalf of the Canadian people so that we may know exactly the significance and the implications and the effect of this agreement.

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Edward James Young: The Minister of Trade and Commerce (Mr. Stevens) made a statement a moment ago that should not be allowed to go unchallenged. He said this regulation of the British Board of Trade had been in effect for ten or twelve years. It may have been in effect for ten or twelve years, but it is the regulation governing the conditions under which our wheat enjoys the six cents preference, and the six cents preference has not been in effect ten or twelve years, it is only taking effect now. It was the duty of this government when they drafted that agreement to know of the existence of that regulation and the effect it was likely to have on the preference.


Victor Clarence Porteous: Do you want it taken off?


Edward James Young: It might as well be off for all the good it is. The minister contributed heat to the discussion, but not light. He accused us of belittling Canadian ports, but he totally ignored the arguments that we advanced. The argument is that the effect of this regulation will be to force the big liners which are now carrying wheat at low rates from New York either to charge higher rates or to stop carrying the wheat. If they charge higher rates, in sympathy with that increase the rates from the Canadian maritime ports will advance also, and higher ocean rates will mean lower prices to the farmers. Let the minister answer that.


Henry Herbert Stevens: I have already answered it. In the first place, I pointed out that there was a very considerable extension of liner calls at the Canadian maritime ports. I pointed out to my hon. friend a moment ago that he was working on the supposition that there were no liner services at Halifax and St. John. I took the trouble to point out that many of the big liners from New York now call at Halifax. I have been in Halifax and seen them.


Mr. DUFF:: Not for freight, for passengers and mail.


Henry Herbert Stevens: "Wheat is a cargo that can be loaded in an hour or two, and it is loaded just as the hon. member said a moment ago regarding New York. That is what makes it a valuable cargo for these passenger liners. But in addition I pointed out that passenger and freight liners of the usual type that had been going to New York now go to Halifax and Saint John. My hon. friend says that the result of taking away this wheat traffic from the port of New York will be that these liners will not be in the competition, and
freight rates will rise. I pointed out to him just now that so far as a very substantial portion of the wheat that moves through New York is concerned it goes to the continental ports and is not affected at all. I have a wire upstairs from one of the biggest exporters in this country, and he says he is perfectly satisfied with the arrangement. A great part of the wheat, as I say, will go to the continental ports, and that is not affected. No one questions that which goes through on direct consignment. The hon. member for York-Sun-burv (Mr. Hanson) with all his enthusiasm for the maritimes, does not question that. But there is a certain other class that may be called in question, as we frankly admit. I have read this thing more than three or four times already; the Prime Minister has elucidated it; the method of documentation that must be followed is clearly shown. I see no reason for alarm. I have no hesitation in saying that I hope the lower freight rates that have recently been put into effect from the west to the maritime provinces will result in the diversion of a large movement to the maritime ports.


William Duff: So do we.


Henry Herbert Stevens: I am sure you do.


Mr. STEWART (Edmonton):: Has there
been any recent reduction in rates?


Henry Herbert Stevens: Yes, two or three months ago. It is a very low rate, a competitive rate with New York.


Charles A. Stewart: Well, it was in effect before-a six cent rate.


Henry Herbert Stevens: There is a very much
lower rate.


Charles A. Stewart: The six cent rate has been in effect for at least three or four years.


Henry Herbert Stevens: I do not wish to get off into a discussion of freight rates. I think my hon. friend has in mind that special rate put on several years ago to Quebec, but that is not what we are referring to. It is from the Georgian bay ports to the maritimes as against Georgian bay ports to Buffalo and New York. But as I was pointing out, there is this, shall I say, classification left about which he is alarmed-because that is all about which he can have any alarm. I have been trying to point out the increased facilities at Canadian ports, increased passenger and freight liner services from the ports of Canada as one way in which it will be improved. The competitive service from New York will remain just the same, because it will be kept
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alive by the through shipments, which are inevitable. You have Port Colborne and one or two other ports adjacent to Buffalo from which goods can be shipped as easily as they can be shipped from Buffalo. Do not forget that; it is another competitive factor. It is just as easy to ship goods from those Canadian ports as it is to ship them from United States ports. Prescott is in the same position. Wheat can be sent through to New York from Prescott as easily as it can be sent from Buffalo. I want to assure my hon. friend that he is entirely wrong when he says the competitive feature will be removed.
Let me repeat : We will be pleased with the improvement in the movement of grain through Canadian ports so long as it is done, as we know it will be done, without any sacrifice by or loss to the producers of the west.


Ian Alistair Mackenzie: I should like to ask the minister a question on a different point. Let me read article 2 again:
His Majesty's government in the United Kingdom will invite parliament to pass the legislation necessary to impose on the foreign goods specified in schedule B appended hereto, the duties of customs shown in that schedule in place of the duties (if any) now leviable.
Schedule B, of course, is before us. I am not going to discuss article 1, which we disposed of last night, and which deals with the question of free entry. We also dealt with schedule A, which has to do with certain articles which are guaranteed free entry only for three years. Now I should like to read article 3, for purposes of explanation. That article reads:
His Majesty's government in the United Kingdom undertake that the general ad valorem duty of ten per cent imposed by section 1 _ of the Import Duties Act, 1932, on the foreign goods specified in schedule C shall not be reduced except with the consent of His Majesty's government in Canada.
Article 22, states that the general duration of the agreement shall be five years. The question I wish to direct to the minister is this: After a careful reading of article 2 I find that it only states that His Majesty's government in the United Kingdom will invite parliament to pass the necessary legislation. That has been done; I understand that legislation now is through both houses of parliament in Great Britain. In the opinion of the minister is there anything in article 2 which binds the government of the United Kingdom, and which prevents it from reducing the duty on the articles referred to? They have passed the legislation necessary to impose the duties on the foreign goods specified in schedule B,
LMr. Stevens.]
but is there anything there that prevents the government of the United Kingdom from reducing the various rates set out in that schedule? Let us look at schedule B. It covers wheat in grain, butter, cheese, raw apples, raw pears, canned apples, dried fruits, eggs in shell, condensed milk and copper. Wheat and copper are mentioned especially in connection with the regulation concerning world prices, and of the remaining articles, some again are affected by schedule A, which we considered last night. According to my construction of article 2 and schedule B, Mr. Chairman, there is nothing whatever there that prevents the government of Great Britain from reducing the specific duties. In support of my contention I should like to read just a short paragraph from the London Spectator of October 29, 1932:
New or increased duties are to be levied on such commodities as wheat, rice, butter, cheese, eggs, condensed milk and various kinds of fruit, from other than dominion sources. Practically all these commodities form the food of the poor.
These are the words I want to emphasize:
In these cases it is open to the British government (though Canada at one moment appeared to think otherwise) to reduce or remove the duty when it chooses.


Henry Herbert Stevens: Who says that?


Ian Alistair Mackenzie: That is from the London Spectator of October 29 of this year.


Henry Herbert Stevens: Is it an editorial?


Ian Alistair Mackenzie: Yes, an editorial on page 568. Just let me finish my argument. You will find that in connection with the articles set out in schedule C a distinct guarantee is given that there will be no reduction except with the consent of the Canadian government. We have not yet considered schedule C, but the list of articles contained therein is very small, including freSh sea fish, canned salmon, other canned fish, asbestos, zinc and lead. So my contention is this: Article 2 as we have it now provides only that His Majesty's government will invite parliament to pass the legislation. This is the construction that has been placed upon this article by English reviewers in the Spectator, the Economist and other newspapers. According to article 22, which we have not yet reached, this agreement is for five years, but the agreement is fulfilled by the government of the United Kingdom inviting parliament to pass the necessary legislation. My question is this: Has the adminis-

United, Kingdom
tration any information to communicate to the house that will give U3 any assurance that on the part of the United Kingdom government there cannot be a reduction in the rates of duty imposed on foreign goods set out in schedule B, under article 2?


Henry Herbert Stevens: The question is quite a proper one, and I am very glad to have the opportunity of answering it. The answer is that t'he assurance is in the facts of the agreement. I will explain what I mean by that if the Chairman will permit me to refer to article 3, because it is essential to do so in order to make the point clear.
It will be noted that article 2 refers to schedule B, which, by the way, includes goods that are of very great importance to Canada. On reference to schedule B it will be noted that the rates of duty to be imposed against foreign goods are set out. Consequently when the agreement is signed and ratified by parliament the preservation of the duties shown in schedule B is obligatory on the government of the United Kingdom unless there is consent on the part of the government of Canada to vary the general terms of the agreement.


Ian Alistair Mackenzie: That is all I wanted.


Henry Herbert Stevens: While I am on my feet
I should like to make another observation, because the question may arise later. Article 3 refers to schedule C, and on reference to schedule C it will be seen that no rates of duty are extended, because those come under the composite tariff of ten per cent.


Ian Alistair Mackenzie: I should like to ask a question in relation to the explanation of the minister, which I am very glad to get. Is this statement his own construction of the phraseology of the agreement, or has he the assurance of the United Kingdom government that this is their understanding with regard to article 2 and schedule B?


Henry Herbert Stevens: There is no assurance
other than the signed document we have before us.


Ian Alistair Mackenzie: Then
I am sorry, but I must absolutely disagree in regard to the legal construction of article 2, because there is nothing at all definitely stated there. We had the same trouble last night in regard to article 1. We found an omission in article 1; there was no guaranteed margin of preference. Now we come to article 2 and find another omission. I should like some of the lawyers on the other side
who can construe language to give their opinion on this section. Is there any obligation on the contracting parties contained therein, unless there is a special understanding? Let me read the language again:
His Majesty's government in the United Kingdom will invite parliament to pass the legislation necessary-
There is nothing in that article except the obligation upon the government of the United Kingdom to invite parliament to pass this legislation in regard to schedule B, that is, to put into effect in Great Britain the schedule of duties set out in this document. I respectfully suggest that there is nothing within the four corners of article 2 that binds the United Kingdom to maintain those duties for a period of five years. I was hoping there was some other understanding outside the terms of article 2, but apparently there is not. This is not entirely my own submission, because I find that some of the best economic journals in the old country hold the same opinion. If that is so, the value of article 2 and schedule B, if there is any value, disappears.


Henry Herbert Stevens: Perhaps my hon. friend
will permit me a word in reply. He invited the lawyers to argue this question, but I trust he will give me credit for some knowledge of these matters although I am not a lawyer, and in saying that I am not at all reflecting on the lawyers.
In the first place my hon. friend emphasized the words "His Majesty's government in the United Kingdom will invite parliament." Of course that must be taken in the sense that the delegates could not say what parliament would do, and it was simply put in that form. I think that verbiage can be dismissed now that this legislation is in effect. The hon. member must read article 2 of schedule B in conjunction with article 22. The United Kingdom and the Canadian delegates agreed to impose certain duties referred to in schedule B. This agreement between the government in the United Kingdom and the government in Canada
-is to be regarded as coming into effect as from the date hereof (subject to the necessary legislative or other action being taken as soon as may be practicable hereafter). It shall remain in force for a period of five years, and if not denounced six months before the end of that period, shall continue in force thereafter until a date six months after notice of denunciation has been given by either party.
Then article 23 provides:
In the event of circumstances arising which, in the judgment of His Majesty's government in the United Kingdom or of His Majesty's

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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.
The terms of article 2 are these:
His Majesty's government in the United Kingdom will invite parliament to pass the legislation necessary to impose on the foreign goods specified in schedule B appended hereto, the duties of customs shown in that schedule in place of the duties (if any) now leviable.
During the life of the agreement, these duties against foreign countries remain unless by agreement with the Canadian government they are varied.


Mr. ILSLEY:: This is a very important
matter, as the Minister of Trade and Commerce will readily recognize, and I want to address to him an argument in favour of the construction suggested by the hon. gentleman who represents Vancouver Centre. I hope that construction is wrong, and I am inclined, to think that perhaps it is, and that the Minister of Trade and Commerce is right, but I must say that there is room for two very reasonable interpretations of this article
2.	The interpretation suggested by the hon. member for Comox-Alberni last night, and by the hon. member for Vancouver Centre today, has something to support it. If the minister will follow me, I will try to make my point as clear as possible. He will note that all the duties imposed by schedule B are changes in the present rates of duties imposed. Am I not correct in that? If I am not correct in that, then my argument does not stand.


Henry Herbert Stevens: I think that is substantially correct in regard to most of them; I cannot speak positively about every one.


James Lorimer Ilsley: It would follow from that,
therefore, and it is fair to assume, that if Canada had been content with the present preference on a particular commodity, that commodity would not have appeared in schedule B. It would therefore be subject to article 1, and no margin of preference would be granted. Now the question is: Is any margin of preference guaranteed because there is a change from ad valorem to a specific duty or a change from one specific duty to another specific duty? The hon. member for Vancouver Centre says no, and he has this to support his contention, that the duties set out in schedule B are duties which are to be levied "in place of the duties, if any, now leviable"-notice, it is "now leviable." In other words, the object of

schedule B is not to place the duties therein mentioned in a different category from the hundred and one duties that are imposed upon the ordinary run of commodities entering the United Kingdom, and which are subject to article 1. It is simply to change the rate for the time being, and these duties are, as the article says, to take the place of duties now leviable. But the duties now leviable are, it is agreed by all, subject to change. That was settled last night by the admissions of the ministry. There is no margin of preference guaranteed on the hundred and one or thousand and one commodities on which Great Britain levies duties. Article 2 does not contain a single commodity upon which the duty remains as it is at the present time. If there were in the list duties which are the same as the duties now leviable, it would be a clear indication of the intention on the part of the persons entering into the agreement that that margin of preference was to be guaranteed for the five year period. But all are changes; they are changes made simply to take the place for the time being of duties now leviable. That, I assume, is the basis of the argument which is being put forward in the British papers and to which my hon. friend from Vancouver Centre referred, and I suggest to the Minister of Trade and Commerce that it is not a frivolous argument. I am inclined to think that the matter is doubtful. I hope and sincerely hope that the Minister of Trade and Commerce is right, and if there is any way of getting an agreement between the British government and this government as to the interpretation that is to be placed upon it, we should get it. The agreement is badly drafted as it stands now, when you take article 1 and article 2 together. There should not be room for this difference in interpretation and for the possibility of the margin of preference being swept away on that list of very important commodities.


Henry Herbert Stevens: It must be remembered that schedules B and C are perhaps the most important part of this agreement. These are the items which were specifically selected for Canadian purposes and Canadian interests, and there can be no doubt whatever in my mind upon the point that has been raised. I quite see the reason for raising it, but there is no doubt in my mind as to what the acceptation of it is. In the first place we must bear in mind that this agreement is unquestionably one of good faith. It is not a forced contract in which there might be an attempt to escape from some of its provisions; on

United Kingdom
both sides it is an agreement in good faith. That is the first point to remember. In the second place the differentiation which the hon. member for Hants-Kings has pointed out between article 1 and article 2 is, I think, quite easily explained when one bears in mind that the main object of article 1 is the extension beyond November 15 of the provision of free entry. That is the major theme in that article, and article 2 deals specifically with what I might call the choice schedule of the whole agreement. Without stretching the reasonable legal interpretation, without stretching one's imagination or the language, and bearing in mind that the whole agreement is for a period of five years, and the fact that the British government's invitation to parliament to pass it was a serious undertaking, I submit that, article 2 providing as it does that the mother country will impose these duties, had the parliament of Great Britain not imposed them, the whole agreement would have fallen down. There is no question about that; the agreement would not have gone into force. But they undertook to do it; they presented it to parliament and passed the legislation and this now becomes the law of Great Britain and is enforceable for five years except with the consent of the dominion to vary it.


Ian Alistair Mackenzie: If that is the case-and I hope it is the proper construction of schedule B-then why have a different provision in article 3-in conjunction with schedule C-where it is specifically stated that the duties shall not be reduced except with the consent of His Majesty's government in Canada.


Henry Herbert Stevens: That is a fair question
and I will answer it. Please note that article 3 refers to schedule C, which enumerates a list of articles which I shall not read other than to refer to zinc, lead, fish and asbestos. These articles now bear a ten per cent duty. They were lifted out of the broad general list of commodities imported into Great Britain and it was guaranteed that they would not be less than ten per cent. That was the reason why they were put in the form they are in article 3, in other words, the British did not wish to change the ten per cent rate on those articles. I may say that some suggestion was made that certain specific duties should be applied, but in the discussions it was thought to be not advisable. Therefore, they were left in the list with a ten per cent duty, but Great Britain undertakes that she will not reduce these articles below ten per cent. They are in contradistinction to the broad general list which is now outside these agreements altogether.
53719-68J


Mr. BURY:: Mr. Chairman, as I understand the matter, article 1 deals entirely with guaranteeing free entry after November 15 to certain articles which but for this agreement would be subject to the Import Duties Act. It has nothing to do with a margin of preference; it provides only for free entry. In article 2 we have the provision that the British government will invite parliament to pass the legislation necessary to impose certain specified duties upon foreign goods. Again there is no express reference to or provision for a margin of preference. As I understand the remarks of the hon. member for Vancouver Centre, the question now arises whether or not the provisions and benefits of article 1 and article 2 are to remain for five years and whether or not there is anything in the agreement, other than contained in article 22, suggesting or implying a five year continuance. My purpose is to point out to the committee my belief that there is such a suggestion in article 1. If that article is not to be supposed as holding for five years, if it is intended that the goods referred to therein shall enter free and it is not intended to give any undertaking as to how long they shall enter free; if it is thought that by merely allowing free entry to these articles the mere act of allowing that freedom of entry carries with it the power, not provided against, of stopping free entry within six months or one year-


James Lorimer Ilsley: Will my hon. friend permit
me?


Ambrose Upton Gledstanes Bury: Let me continue, please.


James Lorimer Ilsley: Is he taking into account the ensured continuance?


Ambrose Upton Gledstanes Bury: Yes, but the argument advanced was that it did not ensure continuance for any particular time.


James Lorimer Ilsley: For five years.


Ambrose Upton Gledstanes Bury: It is quite clear that five
years is intended although not expressed. Five years is intended for the simple reason that there would otherwise be no meaning in introducing the reservation contained in schedule A. It is perfectly clear that we must take article 1 as an undertaking to continue for five years the benefits of that article, otherwise the reservations contained in schedule A would be meaningless. I submit that the same reasoning is good for article 2 and for every other article unless it contains something inconsistent with that construction. In other words, article 1 contains no period of continuance, but the whole spirit and purpose of the agreement, including the content of
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article 22 and the implication contained in schedule A, is that there will be a five year continuance. I maintain that the provisions and benefits of each article are to continue unless it contains, as do article 3 and schedule C, something to the contrary.


Mr. REID:: Mr. Chairman, there is one
point which I should like to raise and which I do not think has been referred to during the discussion. The Prime Minister gave specific reasons why certain articles not mentioned in schedule E but mentioned in the Australian and New Zealand tariffs would obtain certain benefits. The hon. minister has said that the articles in schedule B were specifically selected as being the most important to Canada, but I notice that while this schedule contains the article, " condensed milk, whole, sweetened," it does not contain the articles, " milk powder and other preserved milk, not sweetened, and condensed milk, whole, not sweetened," which are contained in the Australian and New Zealand schedules. The hon. minister knows that milk powder and other milk products are produced in large quantities by the farmers' organizations throughout Canada, while sweetened condensed milk is produced only in small quantities. Will the minister be good enough to tell me why these other milk products have been left out of schedule B when they appear in the New Zealand and Australian schedules? I might mention also honey which has been left out of the Canadian schedule while appearing in both the schedules previously referred to. It seems to me that these articles are of sufficient importance to have been mentioned in the Canadian schedule.


Henry Herbert Stevens: There were many items
which we woidd like to have had in, but let me say at once that the benefits derived by the articles appearing in the Australian and New Zealand schedules accrue to Canada just the same as the benefits derived by the articles in the Canadian agreement accrue to the other dominions. Certain things which were considered as being of primary importance to New Zealand were included in their schedule, but it was not considered necessary to include them in ours. My hon. friend will find a list on pages 945, 946 and 947 of Hansard wihch contains the items upon which Canada will have an ensured preference, either by virtue of our own agreement or by virtue of the agreements between the United Kingdom and other dominions.


Ian Alistair Mackenzie: May I ask the minister a question regarding copper? Will it be necessary for us in British ColumnVTr. Bury.]
bia to have our copper refined at Trail or within the province, or can we arrange to have it smelted as before at Tacoma, and still get the benefit of the preference?


Henry Herbert Stevens: I have a draft of the British bill, and I presume the act as it now is in the British house is in conformity with this clause. It is section 2, subsection 5 of the bill, Ottawa agreements:
During the period of three years from the passing of this act or such further period as may be prescribed, any copper produced in any part of the British Empire but refined outside of the British Empire, being copper to which this subsection applies shall, subject to proof being given in the prescribed manner that it has been so produced and that it has been consigned from the country in which it was refined, be treated for the purposes of this section as if it had been consigned from a part of the British Empire.
This is in relation to the powers given to the treasury board to carry out the agreement. Copper produced in any part of the British Empire will receive the benefit of the preference, although it may have been refined in some other country, provided, of course, that satisfactory documentation-and I use that word in a broad general sense-is furnished to ensure the identification of it as a British Empire product. It does not permit of the smelting of empire ores in a foreign country. That is the position at the moment.


Mr. SPENCER:: Is there a limit to the quantity of capper that Great Britain will take from the dominions?


Henry Herbert Stevens: I think I can give a fair idea of that, although I speak with reservations. Great Britain consumes (between
150,000	and 200,000 tons of refined copper a year. A few years ago, when I carefully checked this matter, the quantity was 150,000 tons. That would be approximately eight or nine years ago. But between that time and the present there have been periods when it went as high as 200,000 tons. I should say about 175,000 tons will be about right. Great Britain and the United States are the biggest consumers of refined copper in the world. Germany comes next. I think I am safe in saying that it has not yet been fully demonstrated that sufficient copper is produced in the British Empire to supply the British market. But we know this, that with the large copper fields of South Africa, and with the copper production of Canada, developed to anything near its maximum, there would be ample. Whether, however, sufficient i3 at present being exported, is a question; but it is anticipated that we shall have sufficient to fill those requirements.

United Kingdom


Henry Elvins Spencer: Has Great Britain undertaken to take all the copper we can supply?


Henry Herbert Stevens: Of course if another country pays the duty of four cents a pound and someone in Great Britain wishes to buy copper from that country, he can buy it. There is no prohibition of foreign copper, only the handicap of four cents a pound.


Henry Elvins Spencer: The point I have in mind is this: suppose Great Britain has taken all the copper she requires and we still have a surplus which she refuses?


Henry Herbert Stevens: We cannot ask her to take more than her requirements.


Frederick George Sanderson: The minister speaks
about a duty of four cents a pound on copper. All the United Kingdom agrees to do is to take the copper at world prices.


Henry Herbert Stevens: Quite true.


Frederick George Sanderson: Which does not mean much at all in regard to enhancing prices.


Henry Herbert Stevens: I do not want to labour
the point, but those who studied the matter consider it means a tremendous amount. South Africa looks upon it as being of extreme importance.


Frederick George Sanderson: How does Canada
look upon it? I do not care about South Africa.


Henry Herbert Stevens: Canada views it as a very valuable concession.


Frederick George Sanderson: At world prices?


Henry Herbert Stevens: Yes.


Ian Alistair Mackenzie: If in
British Columbia we must have this copper smelted at Trail, will the freight rate between Trail and the coast interfere very much with the shipment of copper on this new basis?


Henry Herbert Stevens: Does my hon. friend refer to smelting or refining?


Ian Alistair Mackenzie: Smelting.


Henry Herbert Stevens: T am speaking now without having the facts before me, but I would think there would be a considerable handicap in moving ore from the coast, for instance to Trail, but I do see the possibility of moving ore by boat, for example, to Howe Sound or to Anyox. That would be much cheaper, in my opinion, than moving it to Trail.


Mr. SPEAKMAN:: I understood the minister to say, I am not sure whether today or yesterday, that the duty on butter had been
changed at the suggestion, I assume, of the Canadian delagates from an ad valorem duty of ten per cent to a specific duty of fifteen shillings a hundredweight, because it was more advantageous. The ad valorem duty of ten per cent became, of course, less and less effective as the price fell and also became a very small protection when prices were low. The specific duty of fifteen shillings per hundredweight would at par equal three cents a pound, based on the long hundred. That would be ten per cent ad valorem on thirty cents a pound butter. If butter rose above thirty cents a pound, of course ten per cent ad valorem would be a heavier preference than fifteen shillings a long hundred. It seems to me that thirty cents a pound was rather below the average price of butter in Great Britain. Has the minister any information, I shall not say as to the average price of butter, because that is an altogether unfair question, but as to the price of butter at the present time or during this year on the British market? Of course this is a year when prices are unusually low; they would be far below the average.


Henry Herbert Stevens: I should think that thirty cents a pound would be looked upon as a very fair market price, and of course London is the greatest market in the world for butter. For a considerable time now, I should say for two years, one shilling a pound or less has been about the prevailing price.


Ian Alistair Mackenzie: Has the
minister the information before him now in regard to the percentages, let us say of exports to old country markets of apples from the various sections of Canada, that is, British Columbia, Nova Scotia and Ontario?


Henry Herbert Stevens: It would be difficult for
us to get, without having a little time to do so, the exports from the different sections of Canada. The exports from Canada to Great Britain of fresh apples are as follows:
Year	Barrels
1928		 931,000
A barrel representing, I think, two and a half boxes. The boxes are changed into barrels by a certain fixed, understood rate.
Year	Barrels
1929		 1,275,000
1930		 1,562,000
The figure for 1931 I have not at hand, but I may say that this season's movement is exceedingly good and the information we had a month ago was that this year looked like an excellent season for Canadian apples.
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Ian Alistair Mackenzie: Did I
understand the minister to say that we are shipping apples from Canada altogether in barrels?


Henry Herbert Stevens: Oh no, but in our computation of statistics we change boxes into barrels.


Frederick George Sanderson: Has the minister those returns by provinces?


Henry Herbert Stevens: I have just said that it is a little difficult to compile our exports by provinces. We could set our staff to segregating the figures, but it is not usually done.


Ian Alistair Mackenzie: What I wanted to get was the percentage of exports of British Columbia into the United Kingdom market and into the markets of Canada and other places.


Henry Herbert Stevens: I would hazard an opinion on that. I should not think our export from British Columbia to the United Kingdom would exceed 20 or 25 per cent of our production. It varies very much; in the first place, according to the crop. If the crop is of a good quality and of a character that will stand up, it will be exported, but if there has been a wet period just before the ripening of the crop, the apples may be soft and not ship well, or if the apples were not of good size or good quality they would not export well. I should not think it would be much more than 20 or 25 per cent.


James Lorimer Ilsley: If the minister will permit me, at one time I compiled the figures for the apple growing districts for the five years ending and including 1929, and the proportion of apples exported from British Columbia was 20 per cent, from Ontario 15 per cent, and from Nova Scotia 83 per cent.


Edward James Young: Can the minister give us any idea of the total world production of copper?


Henry Herbert Stevens: I could not undertake to give that to my hon. friend at the moment. The Minister of Mines reminds me that it would make a difference what method of refining my hon. friend had in mind, whether it was fire refined or refined by the electrolytic method.


Edward James Young: I mean refined to the point mentioned in the item, "copper, unwrought, whether refined or not, in ingots, bars, blocks, slabs, cakes, and rods."


Henry Herbert Stevens: I have not that information under my hand; neither has the Minister of Mines. There might be considerable diffi-[Mr. StevensJ
culty in getting an accurate figure of the world's production, because, for instance, copper is produced in Russia and almost all parts of the world. I have some information here which may be helpful to my hon. friend. The total world's consumption in normal times is approximately 1,700,000 tons. At the present time the production is about half that


Edward James Young: Thank you. I was trying to estimate the effect of this article on the * world price of copper; for the copper must be sold at the world price. Let us assume that the world consumes 1,000,000 pounds of copper per year and produces somewhat more than that. Copper is already at a depressed price, five cents a pound, I understand, and the effect of this regulation would be to remove from the market perhaps the heaviest buyer of copper, a country which takes 200,000 tons a year. It will also remove from the market
200,000	tons of copper. You will then have reduced the world's supply of copper outside the British market by about one-fifth, and reduced the demand by about one-fourth, leaving a larger percentage of copper without a buyer in the outside world market. The inevitable result of that larger percentage of copper for which there is no buyer will be to force down the world price. Acording to this agreement our copper must be sold at the world price, and so I am inclined to the opinion that the net result of this agreement will be that we shall receive a lower price for our copper.


Henry Herbert Stevens: I quite concede that my
hon. friend sees nothing but ruin in the agreement anyway.


James Lorimer Ilsley: Might I ask the minister
if the duties in schedule B have been imposed and are now in force by the British government, and if so, when?


Henry Herbert Stevens: The practice in Great
Britain is different from ours in this country. Our practice from time immemorial has been that any changes in the tariff come into effect when the Minister of Finance tables the resolutions, and even before the house considers them. That is not the practice in Great Britain. There the resolutions must pass through the ways and means committee. I cannot say definitely whether the duties are actually in force, but they are certainly very close to it. I am informed that the opinion is that they are in force now, but I cannot state that definitely. It was expected that they would be definitely in force before November 15.

United Kingdom


Charles A. Stewart: Is it not
a fact that a large percentage of these duties are in effect in Great Britain under the Import Duties Act?


Henry Herbert Stevens: Yes, but my hon. friend
from Hants-Kings was asking about the duties in schedule B, which are entirely new duties.


William Duff: Before article 2 and schedule
B carry, I would like to say a few words with regard to the discussion today on the shipment of grain through Buffalo and our own maritime ports. What did the minister say?


Henry Herbert Stevens: I am waiting to hear my hon. friend.


William Duff: Let me say to the minister
that I have some rights here just as he has.


Henry Herbert Stevens: I did not interrupt my
hon. friend in the slightest degree.


William Duff: You did interrupt me. I
heard you say that I was going back to it again.


Henry Herbert Stevens: My hon. friend can take
it as he likes.


William Duff: I heard you say it, and it does not become a minister of the crown to speak in that way to any member of parliament.


Henry Herbert Stevens: Hopeless.


William Duff: I want to say to the minister and everybody else that I have certain rights in this parliament in spite of the fact that it is costing $15,000 a day. I have not taken up as much time in this debate as the Prime Minister or several other hon. members who have been discussing this matter and other matters. I think this day has been very well spent. What I was going to say if the minister had not interrupted me-


Henry Herbert Stevens: I did not interrupt.


William Duff: It was an aside, then.


Walter Davy Cowan: Go on.


William Duff: If my hon. friend wants to
say something let him get up and say it.


An hon. MEMBER:: You have a chip on
your shoulder.


William Duff: I have not a chip on my
shoulder, but I will not allow anybody in this house to browbeat me. I have a right to discuss this matter, which to my mind is very important, and if hon. gentlemen will allow me to go on I shall only take about five minutes.
I am interested, Mr. Chairman, in wheat and other products going through our maritime ports, and in fact through any of our Canadian ports. But there are certain things which we must take into consideration in discussing this matter. First let me say that it is strange that in discussing the shipment of grain through the maritime ports and Buffalo neither the Minister of Trade and Commerce nor the Prime Minister, in spite of their having sat in on this agreement, knows today exactly what is going to happen. Let me tell them what is going to happen; let me tell my western friends what is going to happen. Every bushel of wheat going through Buffalo for transshipment to England will not have to pay that six cent duty; it will go through as Canadian wheat? Why? Because there have been bonding privileges ever since this traffic has existed.


Mr. SMITH (Victoria):: Do you object to
that?


William Duff: No, but I am trying to tell
my hon. friends something. I say the bonding privileges are an international matter, and Great Britain, the world's great seafaring nation, more interested than any other country in the world in international rights, would never dare to interfere with the bonding privileges on wheat or any other goods passing through the United States. So my friends from the west need have no fear so far as wheat going through Buffalo is concerned. The Minister of Trade and Commerce and the Prime Minister have not been able to give the answer to the question raised on this point, although we have been asking for it for a week, but I say, that as far as wheat going through Buffalo is concerned, if proper precautions are taken it will go through in bond, and can stay in Buffalo for any length of time, up to ten months, that they want to keep it there.
Now let us deal for a minute with wheat going to the maritime ports. We on this side of the house need not be ashamed of what we have done for the maritime ports or maritime rights. Who built the elevator at Halifax? Who spent millions in improving the terminals at Halifax? It is quite true that the Tory government in 1912 and 1913 wasted $35,000,000 in Halifax harbour in a place where the money should have never been spent, and it was necessary for the Liberal party when they came into power to put the piers and sheds into shape so that business could be* done.


Ernest D'Israeli Smith: Will my hon.
friend let me ask him a question?


William Duff: Yes.
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Ernest D'Israeli Smith: In view of this
expenditure, is it possible that my hon. friend is arguing against trade being diverted to the maritime ports?


William Duff: I might say to my hon. friend that I am as much, in favour of goods being shipped through the ports of Halifax or Saint John as any man in Canada. What I am trying to say is that we on this side of the house were charged this afternoon with not being favourable to goods going through these ports. I say the Liberal party did as much for the ports of Halifax and Saint John as any party in this country. We built the elevator at Halifax; we extended the facilities both at the deep water terminals and at the terminals up the harbour. Besides that, it was the Liberal party which arranged for the reduction in the rate on flour to compete with New York and shipped through Halifax and Saint John. It was the Liberal party which gave the reduction of twenty per cent in freight rates on the eastern division, and it was the Liberal party which gave the reduction in freight rates so that coal could move to the west.


Ernest D'Israeli Smith: Wasn't that the
Duncan commission, not the Liberal party?


William Duff: There is only one thing which prevents the ports of Halifax and Saint John from being used to the fullest extent. It is beyond question that there is no port in the world better than the port of Halifax, and no port that could be used more. But what is the trouble? The reason you will never get any great quantity of grain shipped through Halifax is this; these ships that come across the Atlantic do not turn there; on the western voyage they call only to land passengers and mail and then go on to New York. During the time they are turning in New York, some three or four days, they take the cargo on board, so that when they call at Halifax again on their eastbound trip they are delayed only an hour or so to take on mail and passengers. Until such time as this country has a population of from thirty to fifty millions, and until it changes its tariff policy, you will never get any great quantity of grain loaded at Halifax, because until such time as the ships load and unload their cargoes and turn at Halifax there will not be a very great movement of wheat from that port.


Felix Patrick Quinn: They are doing that now.


William Duff: Of course I know the hon. junior member for Halifax (Mr. Quinn) is interested in this matter; so am I. I am not

criticizing; I would like to see every bushel of wheat on the western prairieS go through the port of Halifax-I would not even want it to go to Saint John. But we must face facts as they are.


Felix Patrick Quinn: Will the hon. member say there are no steamers turning at Halifax to-day?


Ernest D'Israeli Smith: He doesn't know.


Felix Patrick Quinn: Only this last week the Furness Withy line have established a line between Halifax and the British isles.


William Duff: I did not say there are no steamers; but how many steamers are turning at Halifax? Are there enough to handle the wheat that now goes through Buffalo and New York?


Felix Patrick Quinn: No, but we have wonderful prospect of development.


William Duff: Sure you have, but you will never get that development as long as the Tory party is in power and maintains tariffs of thirty to fifty per cent.


Felix Patrick Quinn: That is just where you are wrong. As long as the Tory party stays in power we will have a development of steamship services between Halifax and Saint John and British empire ports. If the hon. gentleman will permit me I will read a report that appeared in the press the other day:
The first fruits of the Imperial trade agreements, where Halifax is concerned, are contained in the announcement that the Furness Withy Company is instituting a direct service between the British isles and this port this winter.


William Duff: Mr. Chairman, the Furness Withy line have had a direct steamship service between the old country and Halifax for a hundred years, and my hon. friend seems to have j-ust wakened up. He is another Rip Van Winkle. I am trying to say to my hon. friend that while there will be a few steamers taking grain out of Halifax, and I wish there were ten times as many-


Ernest D'Israeli Smith: I want to ask the hon. gentleman a question. Is he in favour of diverting trade from the maritime ports?


William Duff: Now, Mr. Chairman, I listened very attentively this afternoon to my hon. friend the junior member for Halifax-


Felix Patrick Quinn: Stick to the facts; give us the whole truth.

United Kingdom


William Duff: I am trying to give my hon. friend and the house the facts as I see them. I am certainly not going to take second place to the junior member for Halifax as far as marine matters are concerned.


Ernest D'Israeli Smith: I want an answer to my question. Are you in favour of diverting trade from the maritime ports?


William Duff: No, I am in favour of diverting trade to the maritime ports. Now my hon. friend got into a controversy with me before, with the result that he and I got two suits of pyjamas apiece.


The CHAIRMAN (Mr. MacDonald, Cape Breton):: Order.


William Duff: There is another reason, so far as Halifax is concerned: until such time as we can take goods to the seaboard and carry return cargoes, a large volume of wheat will not move from Fort William to Halifax. Everyone knows that in the last ten years attempts have been made to have steamers load at Fort William and take their wheat to Halifax, but because there have been no return cargoes from Halifax those attempts have failed. Ships will not take wheat to Halifax and come back empty.
In my opinion, Mr. Chairman, the way to develop trade in this country is not by agreements of this kind, which raise tariffs against other countries. I want to show you what this agreement is like, and why Halifax, Saint John, Montreal and the other ports in this country will not get the business they should get. I was reading from the report of a speech delivered by a gentleman who only a few months ago was Mr. Philip Snowden, but who now is a member of the House of Lords. Here is what Viscount Snowden said yesterday:
The dominions at the Imperial conference had all been "obsessed with the idea of economic nationalism, and had looked solely to what they could get. ... At two o'clock on the morning the United Kingdom's delegation was due to leave Ottawa the conference was on the point of breaking down."


Ernest D'Israeli Smith: What are his
politics?


William Duff: I do not think he has any now; he is a member of the House of Lords.


Ernest D'Israeli Smith: A free trader.


William Duff: That is a good thing to be; it is too bad there are not more. I think my hon. friend is a bit of a free trader himself; he does not object to purchasing shoes in the United States and bringing them to this country. He talks about protection for the manufacturer but he does not mind going to
the United Stats and bringing back boots and shoes, so perhaps he had better not say anything about free trade.
"We know something of Premier Bennett;" continued the noted Labour member. "In 1930 he threatened us that if we would not agree to his demands he would make arrangements with foreign countries."
Viscount Snowden was a member of the British government when the Imperial conference was held in 1930, and he must know what he is talking about. Then he goes on:
"I have been informed that in the list of
8,000	items Mr. Bennett was said to have submitted to the British delegation early in the conference, the same item was repeated several times under different headings. Mickey Mouse appeared three times under three headings."
This is the kind of agreement we are asked to consider now. The Prime Minister does not know what this agreement means; the Minister of Trade and Commerce does not know; the hon. member for Vancouver Centre could not get the information and he does not know, and even the hon. member for Hants-Kings, who voted for the agreement the other night does not know. It seems to me that the very best thing to do with this agreement is to adjourn the house until sometime in January in order to give the people time to study it, and then see what happens.
I notice that in this agreement there is nothing mentioned in regard to coal. Previous to 1930, when the Liberal government was in power, hon. gentlemen liked to talk a great deal about coal, and to say what a terrible thing it was to have coal coming from other countries, interfering with the miners of the province of Nova Scotia. I remember that during the election of 1930 Conservative speakers went up and down the province of Nova Scotia with lumps of coal in their pockets, saying it was coal imported from Russia.


Ernest D'Israeli Smith: Does the hon.
gentleman advocate the importation of coal from Russia to compete with Nova Scotia coal?


William Duff: There is another subject in which the hon. member for Victoria-Carleton is interested, Mr. Chairman, and I will deal with that tomorrow. I refer to potatoes. If the hon. member will wait until I come to that we will have a real old fashioned argument, but just now I am discussing coal and the promises of the Conservative party in that connection. There is no mention of coal in this agreement, and in my opinion that is one of the most important problems in Canada.
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Imperial Conference-Trade Agreements
What has happened? I have before me the monthly bulletin of the bureau of statistics, which gives the quantities of coal produced during the last few years in different countries. In 1929 Canada produced 1,023,000 tons. In 1930, after this government came into power, we produced 864,000 tons. In 1931 our production dropped to 705,000 tons, and in 1932 it was only 540,000 tons. The reason I am bringing up this question of coal, and the reason I say it should have been discussed at the Imperial conference, is this: As I said a moment ago, our Conservative friends went up and down the province of Nova Scotia saying we should keep out Russian coal in order to give work to the miners of Cape Breton and Nova Scotia. The Prime Minister said in Sydney and other places that if he were returned to power he would see that those miners obtained work. Here we see what has happened; there has been a steady decrease in the production of coal each year since this government came into power. Let us see what happened in Great Britain during the same period. The production of coal there was as follows:-
Tons
1929		 21,736.000
1930		 20,639,000
1931		 18,641.000
1932		 18,984,000


Ernest D'Israeli Smith: How will the present arrangement affect the importation of coal from the United Kingdom?


William Duff: My hon. friend is a supporter of the present government; he votes for every tariff increase that is proposed. I do not argue that this would be a proper policy, though it would be so far as my hon. friend is concerned. I say that if this government had tried to carry out its pledges to the coal miners and operators of Nova Scotia and New Brunswick, there would have been a duty on coal coming from Great Britain. During the last three years we have imported large quantities of coal which has competed with Nova Scotia coal.


Mr. MOORE (Chateauguay):: What about American anthracite?


William Duff: My hon. friend did not understand me. Why draw a red herring across the trail?


William Henry Moore: I am not trying to draw a red herring across the trail.


William Duff: Yes you are. I am discussing
the problems of the Nova Scotia coal industry and I am saying that owing to the fact that this government, through their policy of pro-

tection, have allowed both anthracite and bituminous coal to come in from Great Britain in large quantities free of duty, the coal industry of that province has been very seriously affected.


Ernest D'Israeli Smith: You don't know what you are talking about.


William Duff: Let me say to my hon. friend that if I do not know what I am talking about I have been in very good company all day. I refer to the Minister of Trade and Commerce and the Prime Minister. I am serious in regard to this coal situation because no mention of coal is made in the agreement notwithstanding the fact that the Prime Minister and prominent members of his party promised during the campaign that if returned to power they would see that larger quantities of bituminous coal from the mines of Nova Scotia would be used in Canada and that foreign coal would be kept out. I say therefore that in this agreement something should be done with regard to importations of coal from Great Britain. So far as the coal miner in Nova Scotia is concerned, whether he be in Sydney or North Sydney, in Stellarton or in Springhill, he does not care where the coal comes from, whether from the United States or Great Britain, if it prevents him from earning his living and getting his daily wages. The members of the government before they were elected promised the coal operators of Nova Scotia that if returned to power they would see that a great deal more Nova Scotia coal and Canadian coal generally was used in this country, but in the last two years much larger quantities of coal, both anthracite and bituminous, have been coming from Great Britain and this government has not turned a hand or crooked a finger to see that the miners of Nova Scotia get a square deal.
Mr. LUCHKOVIiCH: The hon. member for Antigonish-Guysborough is interested in coal and I am interested in wheat. The other day I wanted to ask a question of the Prime Minister with regard to wheat going through the United States, but I think the hon. member for Antigonish-Guysborough has answered it better than either the Minister of Trade and Commerce or the Prime Minister could have done.


William Duff: Thank you very much.


Mr. LUCHKOVICH:: He says that there is an international law that would prevent discrimination against our wheat passing through foreign countries, and therefore we should not worry about our grain going through the

United Kingdom
United States not reaching Great Britain and getting the benefit of the preference over there. I will therefore refrain from putting the question to the Minister of Trade and Commerce because the hon. member has satisfied me in that respect. This is once that nobody can say that nothing good can come out of Antigonish-Guysborough.


William Lyon Mackenzie King: In schedule B certain duties are set forth, and article 2 provides that these duties are to take the place of duties, if any, now leviable. Can the minister tell us what duties existed at the time this agreement came into force compared with the ones in schedule B?


Henry Herbert Stevens: I doubt whether I have the exact information from the British list, but I can say this with safety, that perhaps, with the exception of condensed milk which is sweetened and would probably carry a sugar duty, the other items were all free. I make that statement with reservation. Butter and cheese were carrying 10 per cent but as far as I know the other items were free.


William Lyon Mackenzie King: Could my hon. friend tell us, with respect to these items, upon how many of them it was proposed to place similar or other duties at the conference of 1923?


Henry Herbert Stevens: I have not that information under my hand.


William Lyon Mackenzie King: Perhaps the
minister will give it to us another day. I shall ask him later.


Finlay MacDonald: Before this article carries, I want to say a few words with regard to the observations of my hon. friend from Antigonish-Guysborough. The hon. gentleman has been here a number of years-ten years I believe.


William Duff: More than that, seventeen sessions.


Finlay MacDonald: That
make3 his offence all the more grievous. When he presumes to discuss the coal situation there are some facts that must be well known to him. When this government came in it increased the duty on coal 50 per cent. When the Liberals came in in 1896 the duty was 60 cents a ton and they reduced it in two steps to 50 cents, but this government increased it to 75 cents per ton. That was the highest rate of duty ever placed on coal in Canada, so that the miners of Cape Breton realize that the pledges made to them by the present Prime Minister have been carried out as far as he was able to do so. In addition
to that, the subventions on which the Liberal party so prided themselves were increased very materially so that during the past year, owing to these subventions, over 330,000 tons of Nova Scotia coal has found its way into the upper provinces. That movement has been a direct result of these subventions. Surely when a person is so obsessed with partisanship that he is not fair enough to give the present government credit for what it has done for the coal industry he is not in a position to pose in this house as an authority on the coal situation. It is true there has been a falling off in coal production in Nova Scotia, and I will tell you why. It is simply because the market for our coal in the industrial sections of Ontario and Quebec has been shot to pieces by this depression. That is the answer. As a result of that, and as a result also of the competition which our coal has to meet from oil, electricity and the development of hj'dro in many of the industries that previously used our coal, the market has diminished. It is owing to these subventions introduced by this government two years ago that our sales have increased to the extent I mentioned, namely, 330,000 tons. But not only has this government done that; it has put a premium of $1 a ton on our coal that is now used in the manufacture of coke in Montreal. That is surely something, and when a person comes forward with the very slight knowledge which the hon. member for Antigonish-Guysborough displays, and criticizes this government for its failure to look after the coal industry then I must inform him in all friendliness that he is not standing on very solid ground.


William Duff: I do not resent in the slightest the lecture which the hon. member for Cape Breton South (Mr. MacDonald) has given me. I understand that he is very sensitive about the coal question. However, I do remember the Prime Minister making certain statements during the last election, and I remember that other hon. gentlemen-I will not name them-also made statements as to what they were going to do for the coal miner in the province of Nova Scotia. What I said was that there had been a great falling off in the production of coal in spite of the fact that the Prime Minister promised the miners of Nova Scotia-no one knows this better than the hon. member for Cape Breton South ; he knows of that letter he got the other day and which he answered-that he would give them work.


Finlay MacDonald: May I inquire what that particular promise was?
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Imperial Conference-Trade Agreements


William Duff: Does my hon. friend want
the promise he made or the promise made by the Prime Minister?


Finlay MacDonald: I should like to have them both.


William Duff: Surely my hon. friend remembers the promises he made during the election? He must remember going around with a lump of Nova Scotia coal in his pocket and trying to make the poor miners believe it was Russian coal. My hon. friend has tried to misrepresent me. Of course, he is a lawyer and one of the traits of a lawyer is to try to switch things around; that is what he is paid for. The reason I was discussing the coal question was that no mention was made of coal in this agreement. I showed the committee that there had been a great falling off in the production of coal in Canada and practically no falling off in the production of coal in the United Kingdom. I admit that my hon. friend knows more about coal than I do, but figures do not lie, although liars may figure. They were not my figures; they were taken from the statistics as to the world's production of coal, and I do not think hon. members can insinuate that I am saying anything that is not correct. The United Kingdom has sent thousands of tons of both bituminous and anthracite coal to Canada during the last two or three years which has helped to increase their production, and yet, in spite of the fact that Canadian production has fallen off, neither the Prime Minister or any of his colleagues who attended the imperial conference did anything in connection with the coal situation as it affects the miners in Nova Scotia and my good friend, the hon. member for Cape Breton South. He should applaud me for the action I am taking, because he cannot very well get up and criticize the government for not having discussed this coal question at the conference. Instead of condemning me, he should praise me for standing up to argue in favour of the poor coal miner in Cape Breton South.
My hon. friend has said that this government has been very good to the miners in Nova Scotia, but its actions are no better than those of the previous government. I admit that both governments have given a subvention, but the late government did not do what this government did through its Minister of Mines (Mr. Gordon) in saying that because of the subvention they gave last year there would be a million tons more coal sold from the coal mines in Nova Scotia than in the previous year. My hon. friend said that because of the subvention given by this government 330,000 
tons moved this year from Nova Scotia to Ontario and Quebec, but the fact remains, which he admitted, that the sales of coal in Ontario and Quebec were very much below what they had been when the Liberal government was in power. He must not forget that the Liberal government also gave a subvention upon coal from Cape Breton and the west moving to Ontario and Quebec.
What I am complaining about is that in spite of the promise made in 1930 by the Prime Minister that he was going to see that the coal miners in Cape Breton obtained work, during the last two years nothing has been done to encourage the operation of the coal mines in the province of Nova Scotia.


Armand Renaud La Vergne: I am afraid we are wandering away from the discussion of schedule B.


Wesley Ashton Gordon: Before the item passes I Should like to make a few observations with respect to the coal situation, especially with reference to the remarks of the hon. member for Antigonish-Guysborough (Mr. Duff). I would not be making any observations were it not for his last remark, that I had made the statement that the subvention put on by this government would bring about an increase of a million tons in the production of the mines of Nova Scotia. I made no such statement either within or out of this house.
The problem which has confronted the government in connection with the coal situation has been complex and difficult. The desire was and is to have Canadian coal burned in Canada wherever it is economically possible and to support the coal mining industry throughout Canada in order that that industry might be preserved and the miners engaged therein be kept in fairly steady employment. I do not intend to make any statement with regard to the soundness of subventions, but the fact is that these subventions were commenced by the late government.
In connection with the prohibition of the importation of Russian coal, the motive which inspired this government to prohibit these importations was not a dislike for Russians as such. Russia was introducing into Canada a fuel to be sold at a cost below the possible cost of production in this country having regard to our standards of living and to the wages which we hoped to maintain to the labouring man in this country. This Russian coal was meeting competition only from American anthracite, a coal which we do not produce. There was great distress in the Welsh coal mines, which produce a kind of coal which is in my opinion better than the

United Kingdom
American anthracite. This coal was available to the Canadian market and, rightly or wrongly, the government decided to make this market available to the British coal miners, which has been done without any increase in price to the consumer. I contend that the prohibition of Russian anthracite to give favourable consideration to British coal was a very proper thing for this government to do.


Armand Renaud La Vergne: I am afraid I shall
have to rule out of order the discussion of coal when we are dealing with schedule B.


William Duff: I think I should be permitted to accept the minister's word that he did not make the statement that because of the policy adopted by the government another million tons of coal would be-


Armand Renaud La Vergne: Order.


Some hon. MEMBERS:: Order.


William Duff: Do not hon. members want me to apologize to the minister if I am mistaken? I am willing to take his word that he did not make this statement but two days after the subvention was brought down a very respectable Conservative paper, the Halifax Herald-


Armand Renaud La Vergne: Order.


William Duff: -contained an editorial with regard to this matter to the effect that a million more tons of coal would go from the mines of Nova Scotia.


Wesley Ashton Gordon: Mr. Chairman, if I am not in order I will promptly take my seat, but I should like to interject a few remarks. When the subvention was granted by this government upon Nova Scotia coal it was done upon the representations of the coal miners of Nova Scotia who stated that if the government would take this action it would increase the production and consumption of Nova Scotia coal to the extent of a million tons. If this increase has not come up to their expectations, it is not the fault of the government.


William Duff: Again I apologize. The minister now says it was the Nova Scotia miners who said a million tons more coal would be produced and moved because of this subvention. The minister made another statement with regard to Russian coal. I may not have understood him but I think he said the reason for their prohibiting the importation of Russion coal-


Some hon. MEMBERS:: Order.


William Duff: The Chairman has permitted me to answer the minister.


Richard Bedford Bennett: The Chairman stopped the minister.


Armand Renaud La Vergne: I stopped the minister.


William Duff: Doesn't the Prime Minister want to hear this? It is vei-y interesting.


Armand Renaud La Vergne: I must remind the hon. member that this discussion is costing the country considerable money.


William Duff: I want to make one matter clear. The Minister of Mines has stated that the reason the embargo was placed on Russian coal was that the cost of production there was lower than it is in Nova Scotia. The minister knows the Russian coal was anthracite and the Nova Scotia coal is bituminous, and that the Russian coal would not come into competition with the Nova Scotia coal.


Wesley Ashton Gordon: Everybody knows that.


William Richard Motherwell: I want to ask my second question on these four first articles. I have asked only one question on the first four articles and I should like to ask a second.


Armand Renaud La Vergne: Article 3 is not under consideration. Article 2 is under consideration now.


William Richard Motherwell: I know. I am still at a loss to understand the purpose of this proviso:
At prices not exceeding the world prices.
If that were eliminated, what difference would it make in the meaning of article 4? I think that- is a fair question.


Henry Herbert Stevens: It would make a great deal of difference. Let me read the article once again. This matter has been discussed several times.
Article 4. It is agreed that the duty on either wheat in grain, copper, zinc or lead, as provided in this agreement may be removed if at any time empire producers of wheat in grain, copper, zinc and lead respectively are unable or unwilling to offer these commodities on first sale in the United Kingdom at prices not exceeding the world prices and in quantities sufficient to supply the requirements of the United Kingdom consumers.
This means precisely what it says, that the duties imposed upon these items may be removed if exporters or producers in Canada are unable or unwilling to offer these commodities at prices not exceeding world prices. We had a long dissertation this afternoon on what constituted world prices. The Prime Minister very properly pointed out in his remarks that "world prices" in connection with these items, as in connection with nearly all of what we call staple commodities, is a trade matter well known to everybody.
1086	COMMONS
Imperial Conference-Trade Agreements


William Richard Motherwell: That was not
exactly what I wanted. Will the minister permit me to repeat my question? I heard the discussion and that was not what I asked. The Prime Minister, in his speech of October 12, said that he had not asserted that this preference would raise prices. I think it was quite candid of him and I believe it was correct. If that be correct, what effect would the removal of this proviso, "at prices not exceeding the world prices," have on this article? What effect would it have on the meaning of this whole article and the price of our grain.


Henry Herbert Stevens: I confess I think the
answer is clear and is contained in the article. It would mean simply this, that there would not be any need for the article being there at all. The article is there for the purpose of ensuring that if we receive this preference in the British market, we shall not seek to exploit the consumers in the British market, and if we do do that, the British government may remove this preference or protection.


William Richard Motherwell: I think that was the answer that my right hon. friend gave in his speech; it is quite consistent with it. What is the likelihood of the producers in this country, under conditions such as we have today, exploiting the British buyers? Did you ever hear of any grower or producer of grain exploiting the British buyer when the latter has the whole world from which to buy, especially in a buyer's market like the present?


Henry Herbert Stevens: I submit to my hon. friend that the producer of the grain is not the one who, as a rule, puts the grain on the British market.


William Richard Motherwell: I know that,
although farmers' cooperatives do sometimes export.


Henry Herbert Stevens: The grain passes through the usual trade channels, and my hon. friend should not suggest that the government is reflecting on the probity or honour of producers. The grain or zinc or copper will pass through the ordinary channels of trade and the article is there for the purpose of protecting the British consumer against exploitation.


William Richard Motherwell: It is for the purpose of seeing that the prices are not raised by the preferences?


Henry Herbert Stevens: Yes.


William Richard Motherwell: I should like the Western farmers to realize that. This is put

in to see that the western farmers do not get any more for their wheat as a result of this preference. That is the joker which has come out at last. It is quite a big joker in this pack. There are many and this is one of them.


Henry Herbert Stevens: No.


Edward James Young: In regard to this article, I understand it was inserted in the agreement at the request of the British delegates who feared, because copper, zinc and lead were cartelized commodities, the prices of which were controlled by world-wide organizations, that grain might come into the same class because of the action of Canadian and Australian pools, and the British consumer might find himself at the mercy of certain powerful Canadian mergers, if one might call them such. Therefore they had that clause inserted to protect the British consumer. I do not see anywhere in the agreement any such clause that will protect the Canadian consumer. Everything coming into Canada appears to be introduced in the agreement with the idea of increasing the price. Is it possible that our government, in drafting the agreement, entirely lost sight of the Canadian consumer? I would like an answer from the minister.


Henry Herbert Stevens: The answer to the last part of the question is no.


Edward James Young: How' then are the Canadian consumers protected? They are not protected in the same way as is the British consumer. We have in this schedule articles the price of which is controlled by world wide organizations. It might easily happen, when we shut out competition from the outside world, that we shall find ourselves in the grip of a British monopoly, and yet our government has taken no steps to protect our consumers from such exploitation.


Henry Herbert Stevens: Our consumers are all protected by the statutory acts of Canada, the Combines Act and other acts.
Article 2 agreed to.
Schedule B agreed to.
On article 3:
His Majesty's government in the United Kingdom undertake that the general ad valorem duty of ten per cent imposed by section 1 of the Import Duties Act, 1932, on the foreign goods specified in schedule C shall not be reduced except with the consent of His Majesty's government in Canada.


William Lyon Mackenzie King: May I ask the Chairman to read schedule C?

United Kingdom


Armand Renaud La Vergne: Schedule C:
Canada: Timber of all kinds imported into the United Kingdom in substantial quantities from Canada, in so far as now dutiable.
Fish, fresh, sea.
Salmon, canned.
Other fish, canned.
Asbestos.
Zinc.
Lead.


William Lyon Mackenzie King: Might I ask
the right hon. the Prime Minister if as a matter of principle he would agree to a clause that no Canadian duties should be raised except upon the consent of the British government?


Richard Bedford Bennett: I do not think the answer to a hypothetical question has anything to do with this case. This agreement is here, this paragraph is here, and the terms of the agreement are open to criticism. I do not propose to answer hypothetical questions.


William Lyon Mackenzie King: I quite expected that my right hon. friend would not answer the question or even attempt to answer it. There is not a member of this parliament who would stand in his place and say that he would agree that any duty should not be raised or lowered in this country except with the consent of the British government, and yet we are being asked now to say that certain duties shall not be lowered in Great Britain except with the consent of the government of Canada.


An hon. MEMBER:: They have agreed to it.


William Lyon Mackenzie King: They may have agreed to it, but I am speaking about what Canada is doing, not about what they are doing in Great Britain. I say I do not think this parliament should be asked to approve of anything in an agreement with respect to another country of the empire that this parliament itself would not be prepared to have put in an agreement respecting its own affairs. It establishes a precedent if it does nothing else, and an entirely wrong precedent. I cannot imagine anything better calculated to work mischief between the different parts of the British Empire than that one government should be permitted-I will go further and say that one parliament should be permitted -to do something within its jurisdiction only by consent of the government of some other part of the empire. It is impossible to think of any single thing that could be more at variance with the whole conception of selfgovernment, and all that relates to the autonomous rights of parliament and of a country than a condition which obliges the government of one part of the empire to maintain its tariff in any particular only by the consent of the government of another part of the empire. That is certainly substituting for the present ties of empire an economic tie that is in the nature of a fetter. It is not helping to make the relations, either economic or political, of the empire any closer. It is establishing the kind of thing that begets a sense of restraint, and once a sense of restraint is begotten arising from the interference by other governments with the government of one's own country, that moment trouble is certain to begin. I cannot conceive how any government of Canada could expect its parliament to support a course of action which brings us back to the days of the struggles of the thirteen colonies in the 18th century when they were asserting the right to regulate their tariffs to suit themselves. As hon. gentlemen well know it was an endeavour on the part of the government of one part of the empire as it was then to force the colonies to accept a duty on tea which led to the revolution and to the loss by Great Britain of her colonies- just that very sense of restraint that they were not free to do what they wished to do with regard to their own duties but had to act with the consent of a government across the sea. That is exactly the kind of thing this parliament is being asked to sanction at the present time in an agreement to which it is a party. Anyone who respects the right of self-government for himself should respect it equally for others, and any country that wants complete self-government and complete control of its fiscal policy should not be a party to an arrangement which is going to restrict the fiscal freedom of another country in however slight a manner. The principle involved, the precedent established, are all important. It is little wonder that an ex-member of the British government when he read that clause made the exclamation that so far as Great Britain herself is concerned " the day has come when we have not the status even of a dominion"; or words to that effect. ''Our status is something less than that of a dominion " were, I think his words. So far as dominion status is concerned, I wish to say that I believe it extends to complete freedom in all that pertains to the fiscal policy of a country. We in this parliament will claim that, and certainly those of us who belong to the Liberal party will be prepared to accord it to all other governments of the empire and will never ask anything to the contrary.
1088	COMMONS
Imperial Conference-Trade Agreements


Richard Bedford Bennett: Mr. Chairman, it is extraordinary that one with any experience should be guilty of the observations that have been made by the right hon. gentleman tonight. It is incredible, and when the public read them, when business men hear that in this house such statements were made by a reputable leader, they will not only be amazed but they will wonder, as they did the other evening, why they supported tying the dollar to the pound-Downing street and London are hereafter to fix the value of the dollar.
Here is a clause by which the British government said: This preference shall not fall below ten per cent unless Canada agrees, and there is a provision by which there shall be consultation between the two governments. The hon. member for Quebec South (Mr. Power), who is not in bis place, was sent to Ottawa as the special representative of Quebec to represent the lumber interests. He came to the conference for that purpose. The lumber interests suggested that it might be possible that this import rate of ten per cent be reduced. The same representations were made with respect to fish, because fish is regarded as very important, and also with respect to asbestos, zinc and lead. The British government said: We certainly will agree to a provision in this agreement that the duty shall not be less than ten per cent unless you agree. And according to the right hon. gentleman this is now a constitutional problem which is going to wreck the whole sanctity of the ark of the covenant and Britain is about to abdicate her position as a great power. Suppose the right hon. gentleman begins to think for once about his own country. Suppose he abandons this solicitude for other countries and begins to think about his own. Suppose he begins to think whether it was wise or not that there should be adequate safeguards that the duty on lumber should not go below ten per cent. Suppose he begins to think of the interests also of the producers of lead, zinc and asbestos, and of fish from the sea.


William Duff: It does not mean anything at all.


Richard Bedford Bennett: All that this does is to say that there shall be no reduction of that ten per cent preference unless both parties agree to it. I am glad that the hon. member for Antigonish-Guysborough says that it means nothing at all, because his leader has said that it means a very great deal. One thinks that it is going to wreck the empire, and the other that it does not mean anything at all.


William Duff: He is talking about the constitutional question; and I am talking about the practical question.


Richard Bedford Bennett: It is wrecking the empire to one, and to the other it is quite all right; it means nothing. Between those two extremes you perhaps can get the moderate view.


William Duff: You are the happy medium.


Richard Bedford Bennett: Exactly. The phraseology was acceptable to the British government, as I have said; that with respect to these matters there should be no change without the agreement of both parties to the contract. It could have been put in this way: We agree to a ten per cent preference and it shall not be changed without the consent of both parties to the agreement. To the right hon. gentleman, of course, it is a constitutional question, wrecking the constitutional rights and privileges of all the people.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Monday, November 14, 1932