1932-04-18

Mr. SPEARER:: I have the honour to Inform the house that the clerk of the house has received from the chief electoral officer certificate of the election and return of the following member, viz:
Of P. G. DAVIES, Esquire, for the electoral district of Athabaska.



REPARATION CLAIMS

[Stage Direction]
Copy of order in council P.C. 718 of March 31, 1932, and one copy of the special report of Mr. Errol M. McDougall, illegal warfare claims commissioner, regarding the loss of the schooner Otokio.
Copy of special report upon Armenian claims for reparations by Errol M. McDougall, commissioner; and also, the following documents in connection therewith: Copy of Mr. Carlisle's petition "A"; copy of Mr. Carlisle's petition "B"; copy of Secretary of State's report to council dated January 20, 1932.
[Stage Direction]
Questions
[Stage Direction]
Copy of order in council P.C. 571 of March 12, 1932.
Copy of Paris expert's report.
Copy of the list of payments, including an explanation of how the assessments were made, and a list of rejections with the reasons therefor.-Mr. Cahan.

Hon. W. A. GORDON (Minister of Labour) :: Mr. Speaker, I desire to lay upon the taible orders in council numbers 790, 791, and 802 passed under the authority of the Unemployment and Farm Relief Act, 1931, and the Unemployment and Farm Relief Continuance Act, 1932, all referring to the expenditures of money under these acts.



QUESTIONS

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

Mr. RALSTON:: 1.	What is the analysis of the marketable grade of United States coal used on Canadian National Railways compared with the marketable grade of Pictou coal suitable for such use?
2.	What are the comparative prices of such Pictou run of mine coal and American run of mine coal delivered at Montreal and Toronto: (a) by water; (b) by rail?
3.	How much Nova Scotia coal was moved to Toronto by water, by water and rail, and by rail respectively, during the years 1930 and 1931?


Mr. MANION:: 1.	Approximate analysis on "air dried" basis:
United States Coal
Nut Freeport	R/M Pitts.	Egg Pitts.Seam Armstrong	Seam Indiana	Seam Monongalia	Co. Pa.	Co. Pa.	Co.W.Va.Moisture	. .. -97	1-00	[DOT]83Volatile	. .. 32-52	33-28	35-44Fixed carbon. .. .	. .. 60-04	59-05	57-39Ash	. .. 6-47	6-67	6-34Sulphur	1-51	1-52B.T.U	14,232	14,377Mine Run Coal ex Pictou	County,	N.S.Acadia Coal Company	Inter-	Albion	Allan	Vale	colonial	GreenwoodMine	Mine	Mine	Coal Co.	Coal Co.Moisture	.... 1-43	1-04	1-60	1-18	2-79Volatile	.. .. 27-75	28-00	28-75	25-52	26-17hixed carbon.. ..	.. .. 58-30	58-66	55-50	57-58	54-99Ash	.. .. 12-52	12-30	14-15	15-72	16-05Sulphur	.. .. 1-23	[DOT]91	1-43	1-27	1-66B.T.U	.. .. 12,923	13,251	12,394	12,503	11,828
These figures are based on Canadian National Railways' regular sampling and are considered by railway officials as representative.
2.	Water delivery at Montreal, duty and wharfage paid:	Pictou coal, no deliveries;
United States coal, $4.78 including exchange, $4.52 excluding exchange; British coal, $4.38.
Rail delivery at Montreal: Pictou coal, no deliveries; United States coal, $4.58 including exchange, $4.32 excluding exchange.
Water delivery at Toronto, duty and wharfage paid: Pictou coal, no deliveries; United States coal, $4.12 including exchange; $3.86 excluding exchange.
Rail delivery at Toronto: Pictou coal, no deliveries; United States coal, $3.90 including exchange; S3.S0 excluding exchange.

All figures are f.o.b. cars and nothing has been included for storage of Cape Breton coal for winter use.
3.	Nothing for the Canadian National Railways.


POST OFFICE SAVINGS BANK
Mr. SPENCER:: 1.	What has been the amount deposited in each year since the inception of the Post Office savings?
2.	What is done with the money each year, giving amounts?
3.	What percentage of interest has been allowed depositors in each year respectively?
4.	What is the maximum percentage of interest allowed by law?

Questions
5.	If deposited in a bank, what bank or banks, giving amounts, and percentage of interest, if any, paid by the said banks to Post Office Department?
6.	Are such deposits used by the government?
7.	How much has been used each year and for what purpose?
8.	Does the government borrow any of these deposits back from the banks?
9.	If so, at what interest, giving amounts and years?


Mr.   SATJVE@: 


I-POST OFFICE SAVINGS BANK
[Stage Direction]
Period
Total amount of deposits received during period
Total
amount
withdrawn
during
period
Three months ended June 30,
$ cts.
S cts.
1868	
Year ended June 30, 1869...
Year ended June 30, 1870...
Year ended June 30, 1871...
Year ended June 30, 1872...
Year ended June 30, 1873...
Year ended June 30, 1874...
Year ended June 30, 1875...
Year ended June 30, 1876...
Year ended June 30, 1877...
Year ended June 30, 1878...
Year ended June 30, 1879...
Year ended June 30, 1880...
Year ended June 30, 1881...
Year ended June 30, 1882...
Year ended June 30, 1883...
Year ended June 30, 1884...
Year ended June 30, 1885...
Year ended June 30, 1886...
Year ended June 30, 1887...
Year ended June 30, 1888...
Year ended June 30, 1889...
Year ended June 30, 1890...
Year ended June 30, 1891...
Year ended June 30, 1892...
Year ended June 30, 1893...
Year ended June 30, 1894...
Year ended June 30, 1895...
Year ended June 30, 1896...
Year ended June 30, 1897...
Year ended June 30, 1898...
Year ended June 30, 1899...
Year ended June 30, 1900...
Year ended June 30, 1901...
Year ended June 30, 1902...
Year ended June 30, 1903...
Year ended June 30, 1904...
Year ended June 30, 1905...
Year ended June 30, 1906...
Nine months ended March 31,
212,507	00
927,885	(Id
1,347,901	(III
1,917,576	00
2,261,631	no
2,306,918	00
2,340,284	00
1,942,346	00
1,726,204	00
1,521,000	00
1,724,371	00
1,973,243	00
2,720,216	00
4,175,042	00
6,435,989	00
6,826,266	00
6,441,439	00
7,098,459	00
7,645,227	00
8,272,041	(HI
7,722,330	00
7,926,634	00
6,599,896	00
6,500,372	00
7,056,002	00
7,708,888	00
7,524,286	0(1
7,488,028	(10
8,138,947	00
8,223,000	00
9,183,693	00
8,310,630	00
10,448,485	00
11,091,099	00
11,382,035	00
12,060,825	00
11,737,940	on
10,503,870	00
10,805,458	00
8,857 48 296,754 35 664,555 51 1,093,438 86 1,778,565 19 2,323,299 32 2,468,643 42 2,341,979 04 2,021,457 97 1,726,082 98 1,713,658 73 1,733,448 79 2,015,813 16 2,097,389 15 3,461,619 31 4,730,995 39 5,649,611 13 5,793,031 84 6,183,470 60 6,626,067 51 7,514,071 78 7,532,145 56 8,575,041 98 7,875,977 57 7,230,839 14 6,631,578 97 7,473,585 46 7,310,291 97 7,406,066 13 7,656,086 64 8,853,178 42 9,021,862 56 8,903,505 46 9,774,694 62 10,617,070 50 11,379,756 94 11,883,127 70 12,129,101 23 12,324,529 26
1907	
Year ended March 31, 1908..
Year ended March 31, 1909..
Year ended March 31, 1910..
Year ended March 31, 1911..
Year ended March 31, 1912..
Year ended March 31, 1913..
Year ended March 31, 1914..
Ye$r ended March 31, 1915..
Year ended March 31, 1916..
Year ended March 31, 1917..
Year ended March 31, 1918..
Year ended March 31, 1919..
Year ended March 31, 1920..
Year ended March 31, 1921..
Year ended March 31, 1922..
Year ended March 31, 1923..
Year ended March 31, 1924..
Year ended March 31, 1925..
Year ended March 31, 1926..
Year ended March 31, 1927..
Year ended March 31, 1928..
Year ended March 31, 1929..
Year ended March 31, 1930..
Year ended March 31, 1931..
8,803,233 00 12,293,544 17 9.415,569 29 8,816,511 71 9,957,016 17 11,054,877 19 11,299,963 88 11,346,459 39
10.154.189	07 8,539,742 07
11,974.434 11 11,791,966 66
12.593.190	06 10,003,067 58
6,631,684 58 3,499,338 86 2,606,610 61 7,118,912 00 4,089,058 97 3.508,288 52 3,178,563 92 3,090,163 81 2,910,146 98 2,746,049 92 2,535,562 84
9,330,766 39 13,610,865 95 13,132,239 00 11,699,649 54 11,470,360 24 12,303,688 13 13,389,966 01 13,842,924 98 12,925,606 20 9,981,914 13 10.606.900 87 14,427,194 11 13,604,410 70 21,293,281 63 10,699,748 72 8,496,546 78 5,764,442 11 5,199.219 63 5,316,583 68 4,839,856 06 4,493,872 21 4,350,711 12 4,519,506 99 5,820,365 52 4,604,104 72
2.	All moneys are transferred to the credit of the Minister of Finance and form part of the consolidated revenue fund.
3.	April 1, 1868, to September 30, 1889, 4 per cent; October 1, 1889, to June 30, 1897, 3i per cent; July 1, 1897, to date, 3 per cent.
4.	The Revised Statutes of Canada, 1927 (chapter 15, "An act respecting savings banks," section 43), provide-"The interest payable to the persons making deposits under this act shall be at such rate, not exceeding the rate of four per centum, as the governor in council from time to time prescribes."
5 to 9. See answer to No. 2.

Mr. POULIOT:: 1.	At what date, under the instruction of whom, and by whom were the letters tabled on page 6. 7, 9, 11 and the forms at page 8 and 10 of reference No. 244, sessional paper No. 257 of April 1, 1932, drafted?
2.	Were those forms used outside of the province of Quebec?
3.	If so, in what provinces other than the province of Quebec?


Mr. SAUVE:: 1.	All letters and forms referred to were drafted on instruction of the Postmaster General. The letters and forms were drafted by different officials in the ordinary course of their work. It is impossible to indicate at this date exactly who prepared each individual letter. In some cases the finished letter was the result of amendments made by different officials. The dates on which the various items were drafted are approximately as follows:-Page 6, drafted September 27, 1930; page 7, drafted September 27, 1930; Page 9, drafted January 20, 1931; page 11, drafted April 9, 1931; form A, drafted September 27, 1930; form B, practically the same as form A and was drafted on January 20, 1931, to accompany the letter which appears on page 9.
2 and 3. Yes. These forms were used in every province where charges of active political partisanship were made against postmasters.


TEMISCOUATA, QUE.-POST OFFICES
Mr. POULIOT:: 1.	Have any new post offices been established in the county of Temiscouata, since August, 1930?
2.	If so: (a) what is the name of each of said post offices; (b) what is the name of each postmaster; (c) in what parish were each of said post offices established; (d) on what date; (e) what is the nearest railway station to each
41761-132J
Questions

of said post offices; (f) what are the names of	Mr. SAUVE:
those who obtained contracts for carrying the	. y
mail from the nearest station to each of said	'	'
post offices?	2. oGG attached statement.
Name of Post Office	Name of Postmaster	Parish or Township	Date of Establishment	Nearest Railway Station	Name of Mail CourierGranbois	Felix Tardif	Township Viger, Parish St. Hubert.	9-3-31	St. Arsene....	Philippe Tardif (Service from Viger).Riviere Plate	Nazaire Lebel	Parish St. Cyprien..	1-10-31	St. Honore.,..	David Pelletier (Service from St. Cyprien ).Biencourt	Adelard Levesque..	Township Biencourt	4-1-32	Cabano	Adelard Levesque (Service from Squat-tack ).Auclair	Wilfrid Tardif	Township Auclair...	5-4-32	Notre Dame du Lac.	Adelard Tardif (Service from St. Juste du Lac).


RELIEF SHIPMENTS
[Stage Direction]
Mr. GOULET;
1.	Were the shipments of preserved food from the province of Quebec to the western provinces purchased by authority of the committee in charge of direct federal relief?
2.	How. where and by whom were said purchases made?
3.	How many carloads, to the knowledge of the government, were shipped from Ontario to the western provinces?
4.	Were these carloads of preserved food not shipped free of charge by our railways?
Wesley Ashton Gordon: The shipments referred to were made without reference to the federal government, and the Department of Labour has no information on points raised by Mr. Goulet.
j. s. ROY


Mr. POULIOT:: 1.	What work was carried out by Mr. J. S. Roy, of La Reine, Quebec, to relieve unemployment?
2.	Where was said work performed, and in what year?
Mr. STEWART (Leeds); 1. Mr. J. S. Roy acted as foreman on the work of cleaning 3 miles of Chaboiley river of brush, stumps, boulders and sunken logs and constructing a small sluiceway across the Chaboiley river at range 10, township of Desmeloizes.
2.	(a) Chaboiley river, P.Q., north of La Reine, P. Q.; (b) October 27 to December 4, 1931.


DISMISSALS OF POSTMASTERS
Mr. POULIOT:: How many postmasters were dismissed for active political partisanship since August, 1930:
(a)	in the province of Quebec; (b) in the other eight provinces?


Mr. SAUVE:: (a) 247; (b) 1S9.
"Mr. Pouliot.]


HUDSON RAY RAILWAY-FREIGHT RATE SCHEDULE
Mr. MOTHERWELL:: Is it the intention of the government when preparing both an incoming and outgoing freight rate schedule on the Hudson Bay railway, to make due rate allowance for the additional mileage distance of about forty miles each way, occasioned by this railway being constructed to within about ninety miles of Nelson before being finally diverted to Churchill?


Mr. MANION:: May I point out to the
hon. member that the government does not make any of these rates. The Hudson Bay Railway is, as it was under the late government, entirely operated by the Canadian National railway management; they will make rates subject to theCrowsnest pass agreement; and they hope to publish them in the near future. Should there be anything wrong with those rates, they are subject to the Board of Railway Commissioners, but the government itself has no direct power in the matter.


William Richard Motherwell: If the Canadian National Railways incur any deficits on the Hudson Bay railway, is it not a fact that such deficits are paid, not by the Canadian National but by the government?


Robert James Manion: That is right.


William Richard Motherwell: Then I presume the government must be primarily responsible for the rates.


Robert James Manion: The rate-making is in the power of the railways subject to appeal to the Board of Railway Commissioners.



ST. RAPHAEL D'ASTON, QUE., MAIL CONTRACT

Mr. DUBOIS:: 1.	What is the name of the person who replaced Mr. Alfred Vigneault as mail carrier at St. Raphael d'Aston, county of Nicolet?

Questions
2.	Were tenders asked for this contract?
3.	If so, what was the amount of the lowest tender ?


Mr. SAUVE:: 1.	Hector Laramee.
2 and 3. No, not necessary as contract rate is less than 8200 per annum.



CACOUNA INDIAN AGENT

Mr. POULIOT:: 1.	Has Mr. Alexis Michaud been permanently appointed as Indian agent, Cacouna agency, Quebec, by the Civil Service Commission?
2.	If so, at what date?
3.	If not, has the temporary certificate in his favour been renewed?
4.	If such is the case, at what date and until when?


Mr. MURPHY:: 1.	No.
2.	Answered by No. 1.
3.	No.
4.	Answered by No. 3.



UNCLAIMED BALANCES IN BANKS

Mr. BLAIR:: 1.	How much money is in the banks of Canada as unclaimed balances?
2.	How much money was in the Canadian banks five years ago as unclaimed balances?


Mr. RHODES:: 1 and 2. Unclaimed amounts reported by banks: As at December 31, 1931, $3,200,954.83; As at December 31, 1926, $2,811,058.39.



ST. VALLIER STATION MAIL CONTRACT

Mr. BOULANGER:: 1.	What is the name of the person who at present holds the contract for the distribution of mail on rural route No. 1, St. Vallier station?
2.	Was the present holder awarded said contract after the regular tenders had been submitted, and was he the lowest tenderer? If not, how was he awarded said contract?
3.	How much does he receive?


Mr. SAUVE:: 1.	Albert Belanger.
2.	(a) No.
(b) Former contractor, Ovide Belanger, to whom contract was awarded as result of public tenders, his tender being the lowest, asked to be relieved on account of ill-health and applied for a transfer in favour of his brother, Albert Belanger, also first surety to contractor.
3.	$474 per annum.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. GOBEIL:: 1. In what counties of the province of Quebec were amounts granted for municipal and provincial works pursuant to the Unemployment Relief Act?
2.	What amounts were authorized for each
county?	_
3.	How many requests for money from municipalities in the province of Quebec for unemployment relief works were refused by the federal Department of Public Works?



POLITICAL PARTISANSHIP INQUIRIES

Jean-François Pouliot: How many inquiries were requested in connection with active political partisanship since August, 1930: (a) by the defeated Conservative candidates from the province of Quebec; (b) by the defeated Conservative candidates from the other eight provinces of the dominion; (c) by the Conservative members from the province of Quebec; (d) by the Conservative members from the other eight provinces of the dominion?


Jean-François Pouliot: What is the number and the total cost of inquiries held in connection with active political partisanship, in each department of the Dominion government since August, 1930?



WHEAT FOR RELIEF PURPOSES

Mr. VALLANCE:: 1.	Who milled the two million odd bushels of wheat the government purchased for relief purposes?
2.	What did the milling of the said wheat
cost?	_
3.	What was the out-turn of the said wheat per bushel: (a) in pounds of flour; (b) in pounds of shorts; (c) in pounds of bran?
4.	In which of the provinces was the said flour distributed, and how much in each?
5.	In which of the provinces were the shorts and bran distributed, and how much in each?


Mr. BENNETT:: As this information is
in the hands, not of the government but of the commission, this question will stand as an order for return.



MOTION FOR PAPERS


Mr. ILSLEY:: For a copy of all letters, telegrams, memoranda, reports and other documents exchanged between the Department of Public Works and any person or persons in Nova Scotia regarding the expenditure of public money under the Unemployment and Farm Relief Act, 1931, on the construction of a wharf, and on repairs to an existing wharf, both at Great Village, Colchester county, Nova Scotia; also a copy of the payrolls, showing the amount expended in labour and how expended; also a copy of the accounts showing prices paid for iron, logs, ballast, ballast poles, timber and plank, and from whom-purchased.


Mr. STEWART (Leeds):: It appears that
on the 14th of this month, on motion of Mr. Duff, a return was tabled covering the information asked for in this motion. I shall

Imperial Economic Conjerence
be pleased if my hon. friend will ascertain if this is the fact and if all the information required is in that return. If not, we shall supplement it. In the meantime I suggest that the motion stand.


James Lorimer Ilsley: All right.
Motion stands.



UNOPPOSED MOTIONS FOR PAPERS


Mr. FONTAINE:: [DOT]
For a copy of all correspondence, reports, evidence, petitions and other documents, in connection with the dismissal of Mr. S. J. Gelineau, as postmaster of Marieville, county of Rouville, and the appointment of his successor.



C.G.S. ST. HILIERS

Mr. ARTHURS:: For a copy of all correspondence, letters, offers, telegrams, recommendations, agreements, and other documents, concerning the purchase of C.G.S. St. Hiliers, and payments therefor; also a copy of certificate and reports regarding alterations before delivery by vendors, and regarding repairs or alterations made thereafter; also a copy of any report or complaints as to the condition or seaworthiness of this vessel.



SHIPPEGAN, N.B., CUSTOMS SUB-COLLECTOR

Mr. VENIOT:: For a copy of all correspondence, reports and other documents, including evidence, in connection with an investigation held into charges made against Alphonse G. Robichaud, subcollector of customs at Shippegan, New Brunswick.



UNEMPLOYMENT AND FARM RELIEF


James Lorimer Ilsley: For a copy of all letters, telegrams, memoranda, reports and other documents exchanged between the Department of Public Works and any person or persons in Nova Scotia, regarding the expenditure of public money under the Unemployment and Farm Relief Act, 1931, in connection with the work done on the wharf at St. Joseph du Moine, in the county of Inverness, Nova Scotia; also a copy of the payrolls, showing the amount expended in labour, and how expended; also showing how many teams or trucks were employed in connection with this work, and how much was paid for the services of each team or truck; also a copy of the accounts showing prices paid for iron, logs, ballast, ballast poles, timber and plank, and from whom purchased.



L'ANGE GARDIEN, ROUVILLE COUNTY, POSTMASTERSHIP

Joseph-Théophile-Adélard Fontaine: For a copy of all correspondence, reports, evidence, petitions and other documents, in connection with the dismissal of Mr, Jos. A.

Barsalou, postmaster of 1'Ange Gardien, county of Rouville, and the appointment of his successor.



DEPORTATION OF DR. J. H. R. DE BEAUFORT FARIBAULT

Mr. FERLAND:: For a copy of all correspondence, telegrams, reports, inquiries, orders for deportation (being part of file No. 508731, Immigration department), and other documents, in connection with the deportation to the United States of Doctor Jules Hector Ralph de Beaufort Faribault.



ST. VALLIER, BELLECHASSE COUNTY, POSTMASTERSHIP

[Stage Direction]
Mr.	MERCIER	(St.	Henri)	(for	Mr. Boulanger):
For a copy of the complete file in connection with the appointment of a postmaster to replace Mr. Eusebe Marceau, deceased, at St. Vallier, county of Bellechasse.

[Stage Direction]
Mr.	MERCIER	(St.	Henri)	(for	Mr. Boulanger):
For a copy of the complete file in connection with the replacement of the mail carrier on rural route No. 1 at St. Vallier Station, county of Bellechasse.

[Stage Direction]
On the orders of the day:
Jean-François Pouliot: As we have not forgotten that there are Canadian delegates at the disarmament conference at Geneva, may I ask the government what is their stand on the French policy of world police?


Richard Bedford Bennett: The hon. member sent a notice to me that he proposed to ask this question on the orders of the day. In reply I can only inform him that the attitude of the government will be made known at the proper time and place. I may be able to add something to the information I now afford him when the estimate for the League of Nations is further under consideration and I have to make the statement promised the hon. member for Winnipeg North Centre (Mr. Woods-worth) .



IMPERIAL ECONOMIC CONFERENCE

[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Might I ask
the Prime Minister if at the present time an agenda has been prepared with respect to the

Beauharnois Power-Mr. Bennett
subjects to be discussed at the forthcoming Imperial economic conference, and if so, if the house might be favoured with a copy of it?


Richard Bedford Bennett: No completed agenda has been prepared, for obviously discussions must take place between the governments concerned. Whether or not a completed agenda will be laid before this house will depend on what is thought desirable after consultation with all the governments concerned.


William Lyon Mackenzie King: One other question with regard to the conference. Has the government established any committees, departmental or otherwise, to study the matters that are to be discussed at the conference, and if so, what committees are in existence?


Richard Bedford Bennett: It has established a large number of committees, but it does not think it in the public interest to make known who they are or what they are doing.



BEAUHARNOIS POWER PROJECT


[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: I promised the house a few days ago that I would endeavour to-day to make a statement with respect to the Beauharnois undertaking, and that the government would endeavour to consider the matter carefully on Saturday last so that the statement might be as complete as possible. I shall have to ask the indulgence of the house for it is necessary for me to read documents of considerable length.
1.	The Beauharnois Light, Heat and Power Company is a creature of the Quebec legislature. It was incorporated in 1902, and its charter was amended in 1910, 1928 and 1930. It is therefore not a corporation over which the parliament of Canada has legislative jurisdiction.
2.	The Beauharnois Power Corporation is an entity created under the provisions of the Companies Act of Canada. It is a corporation over which the parliament of Canada has jurisdiction.
3.	In 1929 the Beauharnois Power Corporation Limited undertook to create and sell $30,000,000 thirty-year six per cent collateral trust sinking fund bonds. These bonds were to be dated the first day of October, 1929, and were therefore payable in 1959. These bonds were secured, not as some persons have assumed, by a charge against the undertaking,
but by a mortgage on the shares of the Beauharnois Light, Heat and Power Company Limited, and the Beauharnois Transmission Company, and the Beauharnois Land Company, and the Beauharnois Construction Company-all as mentioned in the second schedule to the deed of trust given by the Beauharnois Power Corporation Limited to the Royal Trust Company as trustee. The schedule to which I have referred is printed on page 75 of that document, and in order that there may be no misunderstanding with respect to the matter, I shall read the schedule:
39.989	(thirty-nine thousand nine hundred and eighty-nine) shares of a par value of $100 each of the capital stock of said Beauharnois Light, Heat and Power Company, being all the outstanding shares of the capital stock of said company, except eleven (11) shares held by the directors thereof:
49.989	(forty-nine thousand nine hundred and eighty-nine) shares (having no nominal or par value) of said Beauharnois Construction Company, being all the outstanding shares of the capital stock of said company, except eleven (11) shares held by the directors thereof;
49.989	(forty-nine thousand nine hundred and eighty-nine) shares (having no nominal or par value) of said Beauharnois Transmission Company, being all the outstanding shares of the capital stock of said company, except eleven (11) shares held by the directors thereof;
49.989	(forty-nine thousand nine hundred and eighty-nine) shares (having no nominal or par value) of said Beauharnois Land Company, being all the outstanding shares of the capital stock of the said company, except eleven (11) shares held by the directors thereof.
These shares constituted the security upon which the issue of collateral trust bonds was based. The provisions as to the amount of the proceeds arising from the sale of the bonds to be received by the Quebec company, the parent company, The Beauharnois Light, Heat and Power Company, are indicated by a document dated the twentieth day of November, 1929, being an agreement made between the Beauharnois Power Corporation Limited and the Beauharnois Light, Heat and Power Company. That document provides not only for the issue of the $30,000,000 of securities; but it also provides for what the operating or parent company was to receive from this issue, the figures being $22,500,000. Section 6 reads * as follows:
The corporation hereby undertakes and agrees to create and issue an issue of thirty year six per cent collateral trust sinking fund bonds of an aggregate principle amount of $30,000,000, and out of the proceeds thereof to make advances by way of loan from time to time to the company up to an amount of $22,250,000 as the same may be required from time to time by the company for any of the following purposes, namely:
(a)	for the payment of any of the obligations and liabilities assumed by the corpora-
2104	COMMONS
Beauhamois Power-Mr. Bennett
tion under the said agreement dated the 31st day of October, 1929, between the corporation and the Beauharnois power syndicate, which obligations and liabilities -are hereby assumed by the company as hereinafter set forth, or
(b)	for the payment of expenditures from time to time made or proposed to be made, either by the company or by any subsidiary company or companies of the company, for or in connection -with the development or marketing of hydro electric power resulting from the difference in level between lake St. Francis and lake St. Louis in the province of Quebec, Canada, including therein but without limiting the generality of the foregoing, taxes, rates and assessments, governmental fees and duties and overhead and other expenses of the company and of any of its subsidiary companies, and expenditures for the acquisition of properties and rights of any and all kinds in connection therewith; or
(c)	for such other corporate purposes of the company as the corporation may approve.
Provided however that any of the said $22,250,000 applied by the corporation in* payment of interest on the said $30,000,000 of thirty year six per cent collateral trust sinking fund bonds of the corporation, up to and including the interest payable on the 1st day of October, 1931, shall be deemed to have been advanced under this section 6 to the company by the corporation and to have been paid by the company pursuant to the provisions of section 9 (a) hereof. The corporation further undertakes and agrees to credit the company in the manner set out in section 9 hereof with an amount equal to the net income directly or indirectly received by the corporation on the portion of the said $22,250,000 from time to time remaining unadvanced to the company.
It will be observed from what I have just read that it is provided that the corporation was also to assume the obligations of the Light, Heat and Power Company in connection with the syndicate to which reference has been made so frequently. Those payments so far as one can ascertain amounted to nearly $4,000,000. So that the sum left, $22,500,000 was to be depleted by that further amount. It was also provided alike by agreement and by trust deed, as will be found at .page 38 of that document, that the moneys paid to the trustee upon the certification of bonds shall be available for the payment of interest until October 1, 1931. As the interest amounted to, it will be observed, $1,800,000 per annum, two years interest in round figures were also to come out of proceeds of the bonds, amounting in all to approximately $3,600,000.
4.	The next point I desire to direct attention to is the prospectuses that were issued for the sale of these securities. They were issued by many bond dealers throughout Canada, the one I hold in my hand being issued by Wood, Gundy and Company and providing that there should be an issue of first mortgage securities for the purpose of completing the undertaking, because it will 
be Obvious from what I have just read that the relatively small sum remaining out of the $30,000 000 collateral trust bonds would not be sufficient to complete the undertaking. In this prospectus it was intimated that it might be necessary to issue bonds against the enterprise not exceeding $50,000,000, that being the sum that was indicated as the maximum first mortgage bond issue that would be issued against the enterprise, and the earnings were indicated when 500,000 horse-power were installed at $0,200,000 per annum.
5.	The next point to which I direct attention is that when the enterprise began to function it did not take long to exhaust the moneys available from the sale of the $30,000,000 collateral trust bonds, which in fact and in law did not constitute a charge against the physical assets of the enterprise. When the investigations were being carried on by parliament, it became, as I have said, apparent, that further sums would be required, and following the usual course the company applied to the Bank of Montreal, the Royal Bank of Canada and the Canadian Bank of Commerce for advances secured by bonds, first mortgage bonds, bonds charged against the enterprise. Advances by the banks up to date amount to $6,495,000, and as security for the sums thus advanced the banks hold first mortgage bonds of the undertaking of a face value of $9,742,000.
6.	The next point to which I direct attention is that obviously for reasons that are apparent the banks did not propose to-advance too large sums, because it was not their business to do so, unless they were in some way secured beyond the mere holding of the bonds of the enterprise. The provisions for construction provided for a canal that would be satisfactory for navigation purposes, and would constitute a part of the St. Lawrence waterways as, if and when the St. Lawrence waterways may be completed. In view of the representations made as to what the cost of the canal would be, that is the extra cost involved to make it available for navigation purposes, in the light of what I have said as to its being a connecting link in the St. Lawrence waterways development scheme, an application was made, after the investigation in this house, to the government, to ascertain whether or not it would assist in keeping the enterprise going, and the government undertake, as I shall presently point out, to secure the banks against any loss they might make by advancing to the enterprise further sums of money beyond the sums already indicated. But the government asked that the banks should secure from the

Beauharnois Power-Mr. Bennett
enterprise bonds to the extent of 200 per cent of the advances so made, and to date the advances thus made by the banks amount to $7,951,500, and the banks hold as security for such advances, for the purposes of relieving any claim which might arise against the government, bonds of the face value of $15,903,000-that is, first mortgage bonds against the enterprise, it being represented that the total cost of the canal which is to be available for navigation purposes is somewhere between $15,000,000 and $16,000,000, although I personally think that is a somewhat larger figure than the facts warrant for the construction for navigation purposes beyond the construction of a canal for mere power purposes.
7.	Before the house rose last year it will be recalled that on August first, as reported at page 4504 of Hansard, I declared the policy of the government to be as follows:
The government by every means in its power wall endeavour to do the following: (a) secure continuance of the enterprise; (b) secure the rights of those who bona fide have put their money in that enterprise; (c) secure proper control and management; (d) take such other steps as may be necessary when terms and conditions are fixed as will ensure the greatest possible benefit to this dominion as a whole by reason of the undertaking now being declared to be a work for the general advantage of Canada.
In the light of that statement and of the position of the undertaking, the government gave the assurances that I have mentioned to the banks, and they-the banks-took security to the extent of approximately two hundred per cent of the sums advanced, the securities being first mortgage bonds of, not the power corporation, but the Beauharnois Light, Heat and Power Company that owns the enterprise.
8.	The next point to which I direct the attention of the house is that in furtherance of the undertaking which I gave to parliament at that time, we first of all secured the continuance of the enterprise. The securing of the rights of those who bona fide had put their money in the enterprise was of course limited and governed by the conditions of the contract under which they had advanced their money. I may add that people in every province advanced money on those second mortgage debentures, or collateral trust bonds as they are called. Subject to the terms of the trust deed, we took every step that could be taken first of all, to see that the terms of the trust deed were observed as to the payment of the half year's interest on the first day of October, 1931-this clause I have just read; and, secondly, that the enterprise was continued as I have just indicated, and that it was controlled and managed in the most efficient way possible. I should say for the information of this house and the country that expenditures to date have been within the estimates made, and the work has progressed up to the point that was expected in view of such expenditures.
9.	The next point I direct attention to is the action taken by the government after the house had risen. On Labour Day I met the representatives of the banks and of the company and of all those interested for the purpose of ascertaining what steps might reasonably be taken for the purpose of advancing the undertaking. Suggestions were made that the enterprise would best be managed by the four existing power companies doing business in the locality in which the Beauharnois Company was functioning. They are the Montreal Light, Heat and Power Company, Consolidated, the Gatineau Power Company Limited, the Shaw-inigan Power Company and its associated interests, and the Southern Canada Power enterprise. These four power companies are the large enterprises producing hydro-electric energy in the province of Quebec directly affected by this undertaking.
Nothing came of that, and on the 16th day of September, 1931, the premier of Quebec saw me at Ottaw% and with him was a member of his government. They were accompanied by Mr. Geoffrion, K.C., their legal adviser. It was then suggested that the best interests of all would be served if the enterprise were turned over to the Montreal Light, Heat and Power Company, Consolidated, as they had facilities for management, and they would be prepared to do the necessary financing to complete the undertaking. I intimated that that proposal did not commend itself to the government at that time. Within a week Great Britain went off the gold standard, and financing by any body or group of men became impossible. The government continued, however, to take the responsibility I have indicated in connection with the advances that were made in order to enable the work to be continued.
10.	A communication was directed to Mr. Wilson, general manager of the Royal Bank of Canada, who undertook to act as the corresponding medium for the banks that were interested in the undertaking. That letter I will now read because it is important in view of the reply that was made. The letter is dated the 3rd day of October, 1931, and is as follows:
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Beauhamois Power-Mr. Bennett
Dear Mr. Wilson:-
Re Beauliarnois Undertaking:
On the 16th of September, the premier of Quebec, the Hon. Honore Mercier and their counsel. Mr. Aime Geoffrion, K.C., interviewed me with respect to the reorganization of the Beauliarnois undertaking.
It is my considered view, as expressed to these gentlemen, that a reorganization of this undertaking, involving a radical change in its directorate and management, is necessary before the Dominion government and parliament can have confidence that the undertaking will be carried to completion in a manner and with results that will adequately safeguard the public interest.
The act respecting the Beauharnois Light, Heat and Power Company, Limited, which was passed by the parliament of Canada at its last session and which appears as chapter 19 of the statutes of Canada, 1931, approved by Mr. Geoffrion, K.C., on behalf of the province of Quebec, provides, in section 1, for the annulment of the existing orders in council made by the Dominion government and dated March 8, 1921, and June 22, 1929, and also for the annulment of the agreement between the Beauharnois Light, Heat and Power Company, Limited, and the Dominion government dated June 25, 1929.
I may add that Mr. Geoffrion sent me a note after this letter had been received by Mr. Wilson in which he intimated he thought it was rather too strong to say that he had approved on behalf of the province of Quebec. He was acting for the province when my colleague, the Secretary of State, completed the legislation, and it wiill be recalled that he, Mr. Geoffrion, endorsed his approval on the back of the draft bill, but he regarded that as approval of the form of the bill to accomplish the purpose aimed at rather than as saying that he approved merely on behalf of the province of Quebec, although he was acting as counsel for the province. The letter proceeds:
The second section of that act provides for the grant to the Beauharnois Light, Heat and Power Company, Limited, of the right to divert the waters of the St. Lawrence river up to but not exceeding 53,072 cubic second feet of water to be used for the development of hydroelectric power "in such manner, upon such terms and conditions and with such limitations and reservations as may be prescribed by order of the governor in council."
The terms of this statute indicate that all relevant negotiations in the future, as in the past, shall take place between the Beauharnois Light. Heat and Power Company, Limited, and the Dominion government;
I should add here that the word "limited" does not appear in the statute. It is incorrect to describe the company as limited, although as a matter of law the liability of the shareholders is limited. The letter continues :

-and it appears to me that as preliminary to a new agreement being negotiated, a reorganization of this company, involving very radical changes in its directorate and management, should forthwith be carried into effect.
I am not unmindful of the fact that the Beauharnois Power Corporation, Limited, has already issued $30,000,000 of collateral trust sinking fund bonds, which are now held by the public, payment of which is secured by a first fixed and specific charge on all the shares of the capital stock at any time outstanding of the Beauharnois Light, Heat and Power Company, Limited; and that in the present condition of the financial markets, it may be deemed advisable to avoid any disturbance of this security.
But I understand that the cash advances, which have been made by the banks to enable [DOT] the works to be carried on are secured by a first charge or lien upon the movable and immovable properties of the Beauharnois Light, Heat and Power Company, Limited; and that provision has already been or can now be made for the creation by this provincial company of such additional bonds as it may be necessary to sell and distribute to the public to provide for the capital expenditures required to utilize for hydro electric power the 55,072 cubic second feet of water presently available.
I would, therefore, suggest that the present board of directors of the Beauharnois Light, Heat and Power Company, Limited, should place their resignations in the hands of those presently interested in the financing of the company and its undertaking; and that those so interested should submit, through you to me, the names of the proposed directors of the new board, indicating what interests they respectively represent.
I would also suggest that arrangements be made forthwith whereby the right to vote a clear majority of the shares of the Beauharnois Light, Heat and Power Company, Limited, be vested in agents or representatives of the three banks who are now financially interested in the undertaking and that these agents or representatives should have the right, by vesting such majority of the shares, to elect and control the personnel of the board of directors for a term of five years, or for such lesser time as may be agreed upon between the representatives of the government of the province of Quebec and of this government.
'The vesting of the right to vote the shares of the Beauharnois Light, Heat and Power Company, Limited, as above suggested, need not prejudicially affect the security for the $30,000,000 of bonds of the Beauharnois Power Corporation, Limited, now outstanding.
It appears to me possible, if not probable, that such reorganization. as that above suggested; may necessitate the liquidation of the Beauharnois Power Corporation, Limited, which, subject to outstanding charges thereon, is the holder of the issue capital stock of the Beauharnois Light, Heat and Power Company, Limited.
It does not appear to me to be incumbent upon the Dominion government, upon the evidence elicited by the parliamentary committee which investigated this undertaking at the last session of parliament, to decide as to the respective legal rights of the holders of the capital stock of the Beauharnois Power Corporation, Limited; and, as a matter of fact, the Dominion government has at present no

Beauharnois Power-Mr. Bennett
contractual relations with, and, in the future, it is not likely to have any contractual relations with, that company. The shareholders of that corporation should settle and adjust their respective rights and liabilities inter se by mutual agreement or by appropriate legal proceedings. But in any event, all the properties and assets of all subsidiary and associated companies and, or organizations connected with the undertaking of the Beauharnois Light, Heat and Power Company, Limited, should be vested in or held for that company.
In the meantime, however, the Dominion government is prepared to open negotiations with the Beauharnois Light, Heat and Power Company, Limited, in respect of the parliamentary grant expressed in chapter 19 of the acts of 1931, of the right to divert 53,072 cubic second feet of water of the flow of the river St. Lawrence, and to negotiate with that company as to the terms and conditions, as well as the limitations and reservations, which should be prescribed, under the statute, by order of the governor in council, with respect to such diversion.
It appears to me that the bankers, their associates and clients interested should, forthwith, prepare and present to the government definite proposals with regard to the reorganization of the finances, directorate and management of the Beauharnois Light, Heat and Power Company, Limited, which they will undertake forthwith to carry into effect; and, if these proposals are deemed by the Dominion government to give satisfactory assurance that the undertaking will be carried to a completion efficiently and satisfactorily, then the Dominion government will be prepared to enter at once upon a discussion of the terms and conditions, with such limitations and reservations, as it may be deemed expedient to prescribe by order in council to ensure that Dominion rights and interests, in respect of such diversion of the waters of the river St. Lawrence, shall be properly conserved, and the rights of legitimate investors protected.
If the above proposals are carried into effect, the Beauharnois Light, Heat and Power Company, Limited, will be placed immediately in a position to complete its negotiations with the Dominion government with respect to the terms of the orders in council which are to be made and promulgated when the act respecting the Beauharnois Light, Heat and Power Company.	Limited, above	mentioned, is
proclaimed and brought into force and effect.
Yours faithfully,
(Signed) R. B. Bennett.
Negotiations extending over a period of months were carried on for the purpose of ascertaining just what might be done by those interested in the enterprise to secure its continuance, on the one hand, and that the necessary financial support should foe obtained to enable that continuance to foe carried on, on the other. However, it was not until the month of March this year that the final reply was received from the bankers on behalf of the enterprise. On February 5 intimation was given that the 80,000 shares of stock given to the Sterling Corporation for the purpose of securing such rights as it had on the river
should foe cancelled, and those shares have been turned in for cancellation. The letter dated January 8, reads as follows:
Montreal, January 8, 1932. Dear Mr. Prime Minister:-
Re Beauharnois Undertaking:
As you know, the representatives of the three banks and other persons interested have been giving very full consideration to the suggestions contained in your letter to me of the 3rd October last, and to the various other important points involved in this matter, all of which have been very fully discussed with you on numerous occasions since then, and we feel that it is now appropriate to place before you the considered views and suggestions of the three banks. This letter is written for that purpose, and is concurred in by all three banks.
We believe that this very important undertaking, in which so much money has already been invested, and the success or failure of which will have such an important effect upon the financial and economic condition of the dominion, should be carried forward to a point when the undertaking is producing and delivering power.
We believe that if at all possible those who have in good faith and relying upon grants and approvals made and given by the province of Quebec and the Dominion of Canada purchased securities of the company or lent moneys to it, should have their investments adequately protected.
In connection with the foregoing we have in mind the following salient features:
(a)	The company's auditors report that expenditures upon the project to date have been approximately $39,000,000. Funds for this purpose have been raised as follows:
(i)	proceeds of the sale of collateral trust bonds of Beauharnois Power Corporation, Limited, and shares of that Corporation represented by share warrants attached to the bonds, $27,000,000.
These collateral trust bonds of Beauharnois Power Corporation, Limited, of course rank after the first mortgage bonds, mentioned below, of Beauharnois Light, Heat and Power Company.
(ii)	loans from the three banks concerned, secured by first mortgage bonds of Beauharnois Light, Heat and Power Company, approximately, $11,900,000.
As you know, the loans from the three banks have been secured by the deposit of first mortgage bonds of Beauharnois Light, Heat and Power Company, of a face amount averaging one hundred and seventy-three per cent (173 per cent) of the amount of the loans, and after the loans by the three banks had reached $6,000,000 (the maximum amount of advances which the banks were willing to make) you, from time to time, authorized further advances of approximately $5,900,000 upon the understanding that the Dominion government would protect the banks against any loss.
(b)	We are informed that the balances of money required to place the plant in effective operation so as to meet its contracts, is approximately $13,000,000, of which amount approximately $4,000,000 will be required between now and March 31, 1932.
(c)	During the summer and autumn of 1931 the number of men employed on the site itself
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Beauharnois Power-Mr. Bennett
averaged 3,500 and during the current winter season the average number of men employed on the site has been 2,000. In addition, it is estimated that the project gives employment to about 2,000 persons as a result of the extensive purchases of equipment and materials.
It will thus be seen that the banks and the government by cooperating to assist the company in its undertaking have contributed extensively to the relief of unemployment.
(d)	The work has been laid out on a time schedule calculated to bring the power plant into production by October 1, 1932, the date when the two contracts for the sale of substantial and increasing blocks of power to the Hydro-Electric Power Commission of Ontario and Montreal Light, Heat and Power Consolidated call for initial deliveries. The reports of the company's officers and engineers show that, so far, the work has been carried out in such a manner that it is now up to schedule as to time, and is also within the estimates of cost made at the outset. It has progressed to such a point that it is reasonable to assume that if carried on without interruption, the power plant can be brought into production by October 1, 1932, and at a cost not exceeding the original estimate for such installation. Should anything intervene to prevent the completion of the work up to this point by October 1, 1932. this would jeopardize these two contracts which are vital to the undertaking. These contracts call for the ultimate delivery of 400,000 h.p. per annum. One of these contracts calls for the ultimate delivery of 250,000 h.p. per annum, and is for a period of forty years, and the other calls for an ultimate delivery of 150,000 h.p. per annum, and is for a period of approximately seventy years.
The banks, having in mind the great importance of the undertaking and the effect which the success or failure of the undertaking will have upon the financial and economic welfare of the Dominion as a whole, and in view of your government's attitude, have felt it incumbent to do their utmost to assist the undertaking financially as they have done, but it is of course obvious that these are loans which the banks should not be asked to carry indefinitely, and that the appropriate method of financing the undertaking is to do so by means of further issues of securities when the financial condition of the markets warrants such steps. It is obvious, however, that no such financing can take place unless and until the orders in council which have become necessary as a result of chapter 19 of the statutes of the last session have been promulgated, and the company is able to go to the investing public with conclusive evidence that its rights in this connection have been satisfactorily and permanently established.
As you have intimated in your letter to me above mentioned, and in your subsequent discussions of the subject with myself and others interested, that the establishment of the terms and conditions of the necessary orders in council hinge to a large extent upon your government being satisfied as to the reorganization of the finances, directorate and management of Beauharnois Light, Heat and Power Company, we have considered with you and others interested the various suggestions made in your letter and subsequently, and now have to report as follows:

1.	All the directors of Beauharnois Light, Heat and Power Company (and of the various other companies associated with that company, including Beauharnois Power Corporation. Limited) have placed their written resignations in my hands, and the resignations of three of these, namely, the Hon. Wilfrid L. McDougald, Mr. B. O. Sweezey and Mr. R. A. C. Henry, have been accepted. The acceptance of the resignations of the remaining eight directors has obviously had to be deferred until a new board can be elected, as otherwise the company would be left without a directorate.
2.	There has been submitted to you a list containing the names of nine persons suggested as directors of the company, namely:
Mr. W. A. Black, who is a director of the Bank of Montreal; Mr. C. F. Sise, who is a director of The Royal Trust Company; Mr. W. F. Angus, wffio is a director of The Royal Bank of Canada; Mr. F. B. Common. K.C., who is a partner of Brown, Montgomery & Me-Michael, solicitors of The Royal Bank of Canada; Mr. A. F. White and Mr. Miller Lash, who are directors of The Canadian Bank of Commerce; Mr. J. S. Norris, who is a director of Montreal Light, Heat and Power Consolidated; Sir George Garneau and Mr. Aimc Geoffrion. K.C., who have been selected by the premier of the province of Quebec.
It is, of course, not fair to ask these gentlemen to act unless the company is put in such a position that it will have reasonable prospects of carrying out its financing and its project, which involves primarily its being accorded the necessary approvals by order in council to permit the development of the undertaking and its receiving temporary financial assistance until its permanent financing can be done.
It will be noted that the above list would fill only nine of the eleven seats on the board, the intention being that the other two directors should be persons suggested by your government, or, if the government prefers not to mal*r suggestions in this regard, that these vacancies will be filled only by persons acceptable to the government.
3.	The three banks have given their most serious consideration to the suggestion which you make in your letter to me-
"that arrangements be made forthwith whereby the right to vote a clear majority of the shares of the Beauharnois Light, Heat and Power Company, Limited, be vested in agents or representatives of the three banks who are now financially interested in the undertaking. and that these agents or representatives should have the right, by voting such majority of the shares, to elect and control the personnel of the board of directors for a term of five years, or such lesser time as may be agreed upon between the representatives of the government of the province of Quebec and this government." but they are extremely reluctant to accept the responsibility of having the voting rights of the shares of Beauharnois Light, Heat and Power Company, or a majority of them, vested in representatives of the banks. The banks are of this view for the following reasons:
(a)	That it would be unwise for them to assume the responsibility of having their representatives exercise this voting control;
(b)	That the exercise of such functions by the representatives of the banks would prob-

Beauhamois Power-Mr. Bennett
ably mislead the public into believing that the banks had assumed responsibility for the undertaking of the company and its success or failure, a position in which the banks naturally do not desire to be placed;
(c)	That if the power to remove or to refuse reelection to the directors, or any of them, were vested in the representatives of the three banks, such a power would weaken the directorate's efficiency and dignity, and the existence of such a power in the hands of these representatives would render it difficult to induce the proper type of person to act as a director;	.	,
(d)	That the vesting of such a power in the three representatives of the banks would give too much power and responsibility to these representatives and the banks;
(e)	That if the banks themselves do not require to have their representatives exercise the voting control of the shares, then there would seem to be no reason for asking them to assume that responsibility;
(ft That the same result can be achieved by having Beauharnois Power Corporation, Limited (which is now vested with the voting rights of all the shares of Beauharnois Light, Heat and Power Company, unless and until the security for the collateral trust bonds of Beauharnois Power Corporation, Limited, tor which these shares are pledged as security should become enforceable) undertake and agree that for a stipulated period it would vote the shares for the election of a designated list ot directors.
4.	It is therefore suggested-
(a)	That a board of directors of Beauharnois Light, Heat and Power Company consisting of the above mentioned eleven persons should be elected at the outset by Beauharnois Power Corporation, Limited (which has the voting rights of all the shares of Beauharnois Light, Heat and Power Company);
(b)	That Beauharnois Power Corporation, Limited, should give a written undertaking to the government of the Dominion of Canada and to the government of the province of Quebec that unless and until the security for the collateral trust bonds for which the shares of Beauharnois Light, Heat and Power Company are pledged as security shall have become enforceable, the shares in question will be voted (subject to the provisions of (c) below) for the reelection of the designated board; this arrangement to remain in force for a stated number of years;
(c)	That in the case of vacancies occurring in the board, these will be filled by persons appointed by the remaining members of the board, the persons appointed to fill these vacancies to be acceptable to the two governments concerned.
In regard to clauses (b) and (c) above, it is suggested that the term for which this arrangement is to remain in force should terminate on May 1, 1934.
5.	As to the reorganization of the management of the company, we feel that this is a matter which should be left to the new board of directors when they take office,, as this board will be then in a position to study fully the financial, physical and administrative problems of the company and determine what is best in its interests.
6.	In your letter it is suggested that all the properties and assets of all subsidiary and
associated companies and/or organizations connected with the undertaking of Beauharnois Light, Heat and Power Company should be vested in or held for that company.
This suggestion can be carried out as follows:
(a)	By Beauharnois Power Corporation, Limited, causing to be transferred to Beauharnois Light, Heat and Power Company (subject to the provisions of the trust deed securing the collateral trust bonds of Beauharnois Power Corporation, Limited, and all the rights of the trustee thereunder) all the issued shares (except directors' qualifying shares) of Beauharnois Construction Company (which owns all the shares of Marquette Construction Company), Beauharnois Transmission Company and Beauharnois Land Company; and
(b)	By Beauharnois Power Corporation, Limited, notifying the trustee for the collateral trust bonds of such transfer and acknowledging that the right under the trust deed to receive proxies in respect of the shares of such subsidiaries as are pledged to the trustee is vested in Beauharnois Light, Heat and Power Company instead of Beauharnois Power Corporation, Limited.
In this manner the properties and assets of the subsidiaries will be held for Beauharnois Light, Heat and Power Company as the sole shareholder of those subsidiaries (aside from directors' qualifying shares), subject to the rights of the trustee for the collateral trust bonds of Beauharnois Power Corporation, Limited.
This method would carry out the second alternative proposed in your suggestion. This second alternative is preferable to the first alternative for the following among other reasons:
(i)	It is more expeditious, less cumbersome and less expensive than the first alternative;
(ii)	If the physical assets of the subsidiaries were themselves transferred to Beauharnois Light, Heat and Power Company, they would be subject to the limitations created by the trust deed securing the collateral trust bonds of Beauharnois Power Comporation, Limited, which restrict the amount of bonds and similar securities which may be issued secured upon the assets of Beauharnois Light, Heat and Power Company, and the purposes for which such bonds and similar securities may be issued, and places other restrictions upon such issue, whereas no restrictions are placed upon the issue of bonds and similar securities of the other subsidiaries. This is important, because such other subsidiaries will doubtless require to issue bonds and similar securities in order to carry out their respective undertakings; and
(iji) Some at least of these other subsidiaries have assets which are not required for or directly connected with the undertaking of Beauharnois Light, Heat and Power Company. For example, some of these subsidiaries have lands acquired with a view to furnishing factory sites, housing developments, etc. It is therefore appropriate and advisable that these assets should be kept separate from the assets of Beauharnois Light, Heat and Power Company.
7. One of the first duties of the new board when elected would be to prepare a plan for the future financing of the company and any reorganization which that might involve. We would earnestly hope that this would not involve the liquidation of Beauharnois Power Corporation, Limited, as we feel that such a

Beauharnois Power-Mr. Bennett
step would seriously prejudice or embarrass the future financing of the undertaking and it might cause injury and injustice to a wide list of shareholders and others who in good faith have invested their money in the securities of Beauharnois Power Corporation, Limited, relying upon the rights which that company's subsidiaries had acquired.
We hope that the foregoing suggestions will prove acceptable to the Dominion government, and that negotiations may now be commenced and brought to a speedy termination with respect to the terms of the orders in council which are to be promulgated when the Dominion statute respecting Beauharnois Light, Heat and Power Company is brought into effect.
It is needless for me to add that the representatives of the three banks (Bank of Montreal, The Royal Bank of Canada and The Canadian Bank of Commerce) are ready at all times to further those negotiations and to discuss with you in detail any of the suggestions made above.
Yours faithfully,
M. W. Wilson.
The Right Hon. R. B. Bennett, P.C.. Iv.C., Prime Minister of the Dominion of Canada, Parliament Buildings,
Ottawa, Canada.
There was also the letter dated February 5, in which it was indicated, as I have already stated, that the 80,000 shares issued to the Sterling Corporation had been turned in for cancellation in accordance with the demands made by the government. Negotiations were carried on with the banks and their representatives, legal and otherwise, and in the end, as this house knows, an order in council was passed confirming, by a title superior to that which had theretofore prevailed, the grant of the 53,000 odd second feet of the river, and the provisions, conditions and reservations under which that grant is made appear in the order in council tabled in this house some few days ago. The proclamation duly issued, the statute became operative and the order in council is, as I have said, predicated upon that authority.
11.	I next direct attention to the fact that on existing economic conditions which need not here be further alluded to than mentioned, the difficulties of financing were very great, that is the difficulties of selling first mortgage securities at the time, but in view of the position in which the undertaking was, we did in the manner indicated ensure its continuance up to the present time. Among the suggestions which were made was one that they might be able to secure assistance from the Montreal Light, Heat and Power Consolidated, and negotiations, I believe, were carried on in that sense as well as with one or other or all of the power companies I have mentioned. April 1, being the half-year in-
terest day, arrived and the company was without funds with which to pay its interest on the second mortgage collateral trust bonds. The government did not feel warranted in making any provision for the payment of interest on these securities in view of the terms of the trust deed which constituted the contract between the debenture holders, or the holders of the second mortgage collateral trust bonds and the issuing company, namely, the Beauharnois Power Corporation, for it will be recalled by the house, as I read from the document, provision is made that out of the proceeds derived from the sale of these collateral trust bonds, interest was to be provided up to the first day of October last and no provision was made for any date beyond that. We therefore felt under no responsibility in that regard, for it will be observed that nothing was said in the house or elsewhere at any time indicating that the government would place or would ask parliament to place the debenture holders or, as they are called, the holders of the collateral trust bonds, in any better position than they had placed themselves by the contract they had made when the securities were issued.
12.	I next direct attention to the fact that during the progress of the negotiations and discussions and, in fact, recently the exact terms of the contract between the Montreal Light, Heat and Power Consolidated, and the Beauharnois Light, Heat and Power Company, that is the parent company, first became known in detail to the government. It will be recalled that at the investigation the contract was referred to, but its exact terms did not seem to be a matter of very great importance beyond the fact that a given quantity of power was to be delivered, rising with the lapse of time to a maximum, and the price fixed for it was to be uniform with the price paid by other purchasers of power from the enterprise. I have, however, since obtained a copy of the contract and paragraph 10 becomes one of very great importance. Paragraph 10, which will be found commencing at page 20 of the typewritten contract, reads as follows:
Territorial, (a) It is agreed that during the term of this contract the company will not, without the written consent of the Montreal Light, Heat and Power, sell or distribute electrical power or energy, either directly or indirectly, within the territory which is or may be served directly or indirectly by the Montreal Light, Heat and Power, which territory is understood for purposes of this agreement to be limited to the island of Montreal and such territory as may lie within a radius of thirty miles from Place d'Armes square, in the city of Montreal, provided the territory so defined shall not at any time be deemed to include any part of the counties of Beauharnois, Huntingdon and Chateauguay, and that portion of the

Beauharnois Power-Mr. Bennett
counties of Vereheres and Richelieu fronting on the St. Lawrence river to a depth of five miles from the said river; and it is further agreed that the Montreal Light, Heat and Power will not, either directly or indirectly, sell or distribute any electric power or energy in the said three counties of Beauharnois, Huntingdon and Chateauguay.
(b) It is also agreed that each of the parties hereto will assist the other in procuring the necessary right of way for the passage of through-going transmission lines across the territories of each of them as hereinabove defined and will mutually facilitate the passage of such transmission line or lines.
The exclusive right to sell power within a radius of thirty miles from Place d'Armes square, that is a total width of sixty miles, is by this company conceded to the Montreal Light, Heat and Power, which company in turn concedes to the Beauharnois enterprise the right to sell power within the three counties of Beauharnois, Huntingdon and Chateauguay, and on the river St. Lawrence for a depth of five miles in the counties of Ver-cheres and Richelieu. That of course has a distinct bearing upon the attitude of other power enterprises towards interesting themselves in this undertaking.


Mr. STEWART (Edmonton):: May I ask
if that covers merely the 250,000 horse power mentioned in the agreement, or is it exclusive entirely of that?


Richard Bedford Bennett: It is an undertaking in
terms not to sell power in those areas.
13.	The next question to which attention should be directed is that which affects the rights of the $30,000,000 collateral trust bondholders. If the members of the house are interested, I shall give them the page of the trust deed on which the provisions in that regard will be found. Article 19, page 51, provides for meetings of bondholders and the provisions with respect to default being made by the enterprise in payment of its interest. There is the usual acceleration clause by which the whole $30,000,000 can be declared to become due, and thereafter follow the usual provisions in trust deeds for the remedies that accrue in case of default. They will be found in article 7, commencing at page 30 of the trust,deed. Shortly, after providing for the acceleration of principal and interest whereby the whole $30,000,000, with interest, may be declared to be presently due, it provides for entry into possession and restoration upon removal of default-that is not of importance- the sale by the trustees of the shares and the method by which those who desire to acquire them may use their bonds for the purpose of discharging the purchase price. There is a provision for the appointment of a receiver
or receiver manager by the trust company and the other usual provisions in that regard. I shall not trouble the house by reading them, but I think it is important they should be borne in mind.
The position at the moment, if I might direct the attention of the house to the matter, is that there has been default in the payment of interest due on April 1 to the holders of the $30,000,000 6 per cent collateral trust bonds of the enterprise; that that default must continue for a period of ninety days, which would be the months of May, June and July, to enable the holders of those securities to avail themselves of the provisions of the trust deed whereby they may exercise their rights of foreclosure, that is call for the payment of the whole sum, sell the shares and other securities that they hold for their bonds, and become practically, to all intents and purposes, the owners of the enterprise subject to the first mortgage bonds. That, I think the house will observe, is all they stipulated for when they made their advances of money on the security of the bonds, but to-day the parent company whose shares are their security has, subject to the observance of the terms and conditions of the order in council, a title to the water, which title it did not have before the investigation and which arises by reason of the fact that the 53,000 cubic second feet have been granted to them on the terms and conditions mentioned in the order in council under an act of the parliament of Canada which was assented to last year and declared effective by proclamation, I think on March 1 last.


Mr. DUFF:: Will the bondholders be represented on the new directorate?


Richard Bedford Bennett: We have not got that
far yet; I was just going to mention that. What action the holders of the $30,000,000 of the collateral trust bonds now in default may take is a matter for them to determine. There is a provision whereby the company may by extraordinary resolution appoint a committee in the meantime, which right I understand has been exercised; but the debenture holders themselves under the provisions of this trust deed may meet together and have a regular meeting for the purpose of determining what action they desire to take with respect to their enterprise, and it rests with them either by proceedings under the trust deed itself in the manner therein prescribed, or by arrangement, whichever is thought the more desirable, to determine what action they shall take.

Beauharnois Power-Mr. Bennett
In answer to the hon. member for Antigon-ish-Guysborough (Mr. Duff) may I point out to him that subject to the first mortgage bonds the debenture holders may, if they so desire, by appropriate proceedings become the owner of every share of stock of the parent enterprise to which I first referred, namely, the Beauharnois Light, Heat and Power Company. The question of being represented on the board is not the question at the moment for they themselves may become the proprietors of an enterprise subject to the bond issue which I have mentioned.
14.	It has been suggested that the government should guarantee the bonds of the enterprise and that other proceedings of various kinds should be taken. But we have now discharged our duty to these debenture holders, as they are called, the holders of these second mortgage collateral trust bonds of the enterprise. We have not only observed in detail and scrupulously the obligations which as I indicated to this house we regarded it as our duty to undertake, namely, (a) securing the continuance of the enterprise and (b) securing the rights of those who bona fide put their money into the enterprise, but I fancy that we have done that more scrupulously than they ever expected that it would be done, for it will be observed that of the total par value of these $30,000,000 bonds a little more than half, certainly not seventy per cent, became available for the enterprise, and two years' interest, $3,600,000 was paid back to them out of their own money. In addition it will be observed that the moneys paid to the syndicate-
Mr. STEWART (Edmonton) The $3,600,000 interest that is provided for in the agreement, and nothing beyond that?


Richard Bedford Bennett: Yes, the S3,600,000 provided for in the agreement.


Charles A. Stewart: The amount set aside for interest was specifically mentioned?


Richard Bedford Bennett: I want to make that
quite clear. Paragraph 2 (a) of Article nine provides for interest up to the first day of October, 1931. That paragraph reads as follows:
For the payment from time to time of the instalments of interest falling due in respect of the bonds up to and including the interest payable on the first day of October, 1931 (October 1, 1931).
That is the limit as to date. In other words, the payment out of their own money of the interest for the two years.


Charles A. Stewart: And not beyond in the construction period?


Richard Bedford Bennett: No, not during the construction period, for in the prospectus upon which the securities were sold it is apparent that it was never expected that the work would be completed for the purpose of supplying either in partial form the contracts entered into or the whole until at least October, 1932-


Charles A. Stewart: That is why I asked the question.


Richard Bedford Bennett: I want to make clear that there is no provision in the documents that we have seen, and they tell us that these are the only relevant documents for interest after the first day of October, 1931.
Therefore we have secured during the interim control and management and it is so satisfactory, the engineers certify, that their expectations both as to the amount of work that would be done by a given date as well as the cost of it have been more than met, and we have taken such other steps as we think a government might reasonably be expected to take, and perhaps many in this house will think perhaps more than we might reasonably be expected to take, to ensure that they have not only the continuance of their enterprise but their water rights, available for the parent company on the security of the shares of which the advances were made, and to-day they are in a better legal position than they were prior to the date of the passing of the statute of last year and the order in council based thereon.
15.	I have further heard it suggested that the language used by me last year contemplated that we were going to guarantee the payment of interest on these second mortgage securities. That is the reason that I have taken the trouble to read the exact words as they appear in Hansard as used in the House of Commons. Further, I think the answer is more complete when I state this, that the securities themselves, instead of rising in value, have decreased in value, which indicates at once the understanding that was placed by the public upon what we undertook to do and have done. In no event was it ever suggested that we should do more than protect them to the extent to which they protected themselves; and to the extent to which they have protected themselves, we have protected them. In addition to that we have gone further and secured for them, through the parent company as I have said, water rights that are beyond any possible chance of being attacked.
16.	As to the future, that is a matter, as the house will see, as to which the second

Beauharnois Power-Mr. Bennett
mortgage debenture holders, or the collateral trust bond holders, whichever term you desire to use, must in the very nature of things, take such steps as they think appropriate for the purpose of exercising the rights that are created and granted to them under the terms of the trust deed to which I have referred. We have indicated, as I said at the very threshold of my observations, that as this project was by common consent, alike by the late administration and by this, treated as an undertaking that was a link in the St. Lawrence waterway and that the canal should be a canal that would be available to navigation if as and when that' undertaking is proceeded with-we have indicated our willingness to take a very reasonable view of the situation, that is, as to the extra cost involved in constructing a canal for navigation, and if a plan of reorganization is arrived at the government will consider sympathetically, at least, any proposal that may be made involving the acquisition by the government of first mortgage securities to the extent to which the cost might represent the extra cost of the canal for navigation as distinguished from power purposes. But that in any event would not involve us in any payment that would not be repaid under the terms of the bonds themselves. In other words, it might be advisable and in the public interest that by the acquisition of first mortgage bonds funds may be provided in the same way as from any purchaser, for the purpose of enabling them to carry forward the undertaking to which they are now committed and in which they have placed their money to the extent I have indicated from the documents I have read.
17.	I think, Mr. Speaker, that that covers the position so far as I can place it before the house at this moment. I think it answers the questions that have been asked by the various members of the house during the last few weeks, and I offer my apologies, sir, for having trespassed so long on the time of the house, but there was no method which I knew of by which the matter could be clearly placed before the house other than by the reading of the documents which refer to the undertaking and its present position.


Mr. WOODSWORTH:: Might I ask whether the government concedes the claims of the province of Quebec with regard to the water powers or whether the government would consider placing before the supreme court a stated case as to the ownership and jurisdiction of water powers on the St. Lawrence?


Richard Bedford Bennett: I may say in answer to the hon. member for Winnipeg North Centre that the question has already been submitted 41761-133
to the supreme court. The answers are unsatisfactory; I think that is a fair way to put it. But having regard to the relation of this enterprise to navigation, and to its being a unit in the development of the St. Lawrence waterway, I see no reason why at this particular moment that should be done. It is not improbable that some day the question will be determined on a concrete case, but references by questions have always been found unsatisfactory. The privy council has itself indicated that it very greatly preferred that such should not be done, that it did not feel itself bound by the answers when a concrete case did arise, and further that the opinion thus given in answer to questions was not better than that of the law officers of the crown. For these reasons I am greatly disposed always to avoid references on abstract questions when concrete cases may ultimately determine the issue.


Mr. GARDINER:: Has the Prime Minister any objection to placing on Hansard the agreement between the Beauharnois Light, Heat and Power Company and the Montreal Light, Heat and Power Company-the whole agreement? The Prime Minister has read an extract from it, and it is a very important document.


Richard Bedford Bennett: If the house desires I
will hand the agreement to Hansard, so that not only paragraph 10 but the whole of the contract may be printed. Obviously however that could be done only with the consent of the house, because it is not part of the particular matter to which I referred. If it is desired however I shall be very glad to do so. It might be put into votes and proceedings-


Robert Gardiner: That would be all right.


Richard Bedford Bennett: The Minister of Trade and Commerce suggests it would be preferable to put it in votes and proceedings.


Robert Gardiner: That is satisfactory.


James Shaver Woodsworth: It seems to me that this is not an abstract question in the sense it was a few years ago, when the first presentation was made. To-day it is a very concrete question, and as such it is in an altogether different position.


William Duff: Mr. Speaker, may I ask the
Prime Minister if re-organization has yet taken place and if the nine gentlemen mentioned by Mr. Wilson, as directors, have been appointed, or if the government has appointed the two they are to appoint?


Richard Bedford Bennett: I hope my hon. friend
from Antigonish-Guysborough follows me

2114	COMMONS
Beauharnois Power-Mr. Bennett
when I say that it is now no longer the prerogative of the power corporation to appoint directors, for the debenture holders- that is, the collateral trust bond holders, as they are mentioned in the trust deed-can in the ninety days now avail themselves of their rights. In the meantime the directors, less the three whose resignations have been accepted, are carrying on.


James Shaver Woodsworth: Am I going too far in asking whether or not there is a very great distinction between the situation at this time and the situation at the time when the former questions were submitted to the supreme court?


Richard Bedford Bennett: Mr. Speaker, the hon.
gentleman is undoubtedly correct in saying there is a difference, but the difference is not such as would be reflected in any questions which might be framed. I endeavoured to make clear that the mere framing of questions, however carefully and intelligently it may be done, is fraught with no final result, or brings about no final determination, for the reasons given by the privy council itself. They are no better than an opinion of the law officers of the crown. But it is competent for litigation to be instituted and the matter determined in the light of evidence submitted.


Charles A. Stewart: In the event of the second mortgage bondholders taking action, as they are entitled to do, on the date fixed, would there be priority for all the issue of the first mortgage bonds, or only such as are hypothecated for purposes of carrying on the enterprise.


Richard Bedford Bennett: That is very difficult for me to answer, as a matter of law, without going into the matter with some care. Offhand I would say the courts would determine that the advances made would be the determining factor.


Mr. SPEAKER:: May I suggest that if the document to which the Prime Minister has referred is to be put in the votes and proceedings, it should be laid on the table of the house.


Richard Bedford Bennett: I was going to move,
with the consent of the house, that we now revert to motions so that I may move that a copy of the agreement in question be laid upon the table.


Charles A. Stewart: May I ask
that the agreement with the government arising out of legislation also be laid on the table.


Richard Bedford Bennett: That order in council
was filed some days ago.


Pierre Édouard Blondin: The house will revert
to the order for motions.


Richard Bedford Bennett: I move, with the consent of the house:
That the agreement between the Montreal Light, Heat and Power Consolidated and the Beauharnois Light, Heat and Power Company be laid upon the table of the house and printed in the votes and proceedings for this day, together with a copy of the order in council, P.C. 504 dated the first day of March, 1932.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Hon. ARTHUR SAUVE (Postmaster General) [DOT]:	Mr. Speaker, the hon. member for
Winnipeg North Centre (Mr. Woodsworth) on Thursday last called the attention of the government to a circular issued by my department in regard to the hours of duty and the elimination of payment of overtime to post office employees. Unfortunately I was absent from the house last week, owing to illness, and was not in a position to furnish an answer. At this point I should like to thank the Prime Minister for his statement, and the reasons he gave the house for my absence. I am pleased to hand the hon. member a copy of the circular to which he has referred together with a statement setting forth the necessity for departmental action. After reading the statement and my explanation, if the hon. member desires to make further observations I shall be pleased to listen, and to give him what he requires if it is available.
James Shaver Woodsworth: (Winnipeg
North Centre):	Mr. Speaker, the Postmaster
General has not answered my question; I have read the circular. I asked whether his department was going to alter the agreement which had been in operation for years, and was going to increase the hours of work.


Pierre Édouard Blondin: Order. The Postmaster
General has given what he considered to be an answer, and the matter is not debatable.


Peter John Veniot: Mr. Speaker, I wish to ask t'he Postmaster General (Mr. Sauve) if he will lay on the table of the house the new regulations regarding the hours of work of post office employees referred to by the hon. member for Winnipeg North Centre (Mr. Woodsworth) last Thursday.


Arthur Sauvé: I will do so with pleasure.

The Budget-Mr. Mullins



THE BUDGET


[Stage Direction]
The house resumed from Thursday, April 14, consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the proposed amendment thereto of Mr. Ralston, and the proposed amendment to the amendment of Mr. Gardiner.
Mr. H. A. MULLINS (Marquette):: When the house adjourned on Thursday night I was endeavouring to place on Hansard some of the reasons for the low cost of farm commodities, a subject referred to foy the hon. member for Southeast Grey (Miss Maophail) and the hon. member for South Huron (Mr. McMillan). They spoke of the great difficulties affecting agriculture, but they offered no explanation for its 'being in its present shape. I have endeavoured to satisfy myself why the primary products of the farms are selling at such low prices to-day. Take our importations of canned meats. These importations, I may tell my critics opposite, are larger than I expected to find them. From the Argentine, a favoured country with whom we have a treaty made by 'hon. gentlemen opposite, we imported in 1930 canned meats to the extent of 7,087,820 pounds, from all countries a total of 8,758,250 pounds; in 1931 our total importations amounted to 5,992,336 pounds. All critics thrive during a depression; that is the time they get their work in. I wonder if our critic from Southeast Grey endeavoured to find out why our farm products were affected to that extent? We are told the price of hogs is low,-four cents a pound. I admit it, but there is a reason for this low price. As I told the house before it adjourned on Thursday night, a corporation in the city of Toronto imported two carloads of hams on July 28 and 29, 1931, from the United States. They brought them in under a duty of five cents a pound, expecting to get away with that duty, but the Minister of National Revenue (Mr. Ryckman) put on a dumping duty, and that firm did not attempt any further importations. But those two carloads broke the market in Toronto by one-half for the Canadian raised product, which is far superior to that imported from the United States. If I were at liberty to tell how those American hogs are raised and fed as compared with the Canadian hogs, I think it would surprise this house, and our people 41761-1331
would not buy the imparted article. I see my friend from Weyburn (Mr. Young) laughing.
I wonder that even he, a low tariff man, would permit American hams to come in and break the 'bacon market for our farmers. That is why the price of hogs went down a cent a pound. In 1931 we also imported from the United States 8,242,059 pounds of barrelled pork in brine. I want hon. members to get these figures, particularly the hon. member for South Huron. They might have been useful to him when 'he was telling the house how he intended to help agriculture, although he tries to block us on this side of the house when we are doing everything humanly possible to aid that great basic industry agriculture to get out of the hole. Through the policy of hon. gentlemen opposite that staggering quantity of pork in brine was brought into this country under a low duty. Some of it is even coming in free. It is brought in to ship stores in bond, and is then taken out beyond the three mile limit where it is used by our fishermen. If I had my way I would not permit them to eat that pork because I know 'how the hogs are raised and fed in the United States. I would prefer to have them supplied with the Canadian fed product. The Americans are getting the benefit of that business. Why won't you protect the Canadian grown product and so protect the Canadian farmer? Before I get out of the Marquette seat I will have protection for the farmer's primary products- protection is abused so much by our critics opposite. I want the Minister of Inland Revenue to listen to this, because I desire 'him to apply the dumping duty and save the situation in Canada. For the manufacture of cottonseed meal and refined cottonseed oil we are bringing into Canada from the United States 180,169 hundredweight of crude cottonseed oil; peanut oil and refining oil for edible purposes we imported to the extent of 337,163 hundredweight. That product was brought in to compete with the fine lard of this country, the best shortening you can have. These figures have been furnished by the Bureau of Statistics and they must be correct. The imports of cottonseed oil amounted to 8,218,214 pounds and of other vegetable oils, 68,885,823 pounds. The house should consider these figures; this material is coming into this country to compete with our hog raising industry. I see hon. members laughing, but it is nothing to laugh about. They are willing, in the agriculture committee, to talk their heads off about wheat, but the country would be better off if more time was spent in the
The Budget-Mr. Mullins

discussion of the hog raising industry. Hon. members talk nothing but wheat and then wail and cry that this government is to blame for present day conditions in t'he live stock industry.


Mr. BROWN:: Is the hon. member aware
that last session the agriculture committee spent nearly all its time talking about hogs?


Henry Alfred Mullins: What has been done this last two weeks? Wheat has been the only matter under discussion. There has been some talk about the whiskers on wheat, but nothing about hogs. The committee has been spending its time discussing durum and other varieties of wheat, why does it not discuss pure bred cattle and help conditions in Canada? This country cannot exist without live stock. A farm does not look like a farm unless there are some live stock. When I go on a farm and see a lot of machinery scattered all over, it does not look like a farm to me. As I said some years ago, a sowless and chickenless farm is not the proper type of farm for this country; this country needs mixed farming. The figures which I have quoted give the true reasons why this industry has been driven into the ground by low prices. I have heard the hon. member for Lisgar (Mr. Brown) and the hon. member for Provencher (Mr. Beaubien) speak on the tariff. The following was said a short time ago by the hon. member for Provencher:
If the hon. members for Marquette (Mr. Mullins), Souris (Mr. Willis), Selkirk (Mr. Stitt), Portage ia Prairie (Mr. Burns), Dauphin (Mr. Bowman), Nelson (Mr. Stitt), Springfield (Mr. Hay), and Brandon (Mr. Beaubier) had told their electors that if the present Prime Minister was returned to power lie would increase the tariff. I do not believe they would be here to-day. They know that very well, and they know that they told the electors that the Conservative party was not a high tariff party. Can they go back to their electors to-day and tell them that? If they do they will be misleading those who put them in office.
The Conservative party was never a high-tariff party.


Some hon. MEMBERS:: Oh, oh.


Henry Alfred Mullins: Hon. members may laugh if they wish, but that is the fact. For a considerable period I lived next door to the son of that great man, Sir John A. Macdonald; I sat in the provincial houses with him and I have visited him in his home. I have talked over that great national policy of his illustrious father, and he told me that it was never his father's intention that that policy should be based on high tariff principles to injure the consumer. That is not

the policy of the right hon. gentleman now leading this government; it is his intention that no oppression shall be placed upon the consumer. Hon. members should not forget that advertisement which appeared in the Journal the other day. Hon. members opposite put the duty on agricultural implements down until it had reached six per cent, but all the time the price of machinery was climbing in price until it finally reached a prohibitive figure. A large manufacturing company in Toronto has reduced the price of machinery by ten per cent and has allowed a reduction of the same amount on all debts due to the company. That means that to-day a binder can be purchased for $28 less than it could have been purchased during the administration of hon. gentlemen opposite. How can hon. gentlemen answer that fact? There is a tariff of 25 per cent on agricultural implements, but the price is coming down. I can remember in 1891 when the duty on agricultural machinery was 35 per cent, a binder could be purchased for $150; under the late administration the duty was reduced to six per cent but the price of a binder had gone up to $281. How can hon. members explain that to the electors? Put the tariff up just as long as the price of the machinery comes down. I want some degree of protection to save this great agricultural industry for the people of Marquette. I met the president of the Massey-Harris Company in front of this building and told him that he never would be able to sell machinery in western Canada with the present low price of wheat. The farmer needs new machinery. I helped a friend of mine for half a day to repair an old mower. There was a broken cog in one of the wheels and we were trying to get the machine together. The price of machinery must be lowered or the western farmer will be put out of business.
This is an answer to the free trade critics on the other side. Free trade is not possible in this country, when all countries have protection. I remember some years ago when I was in England walking around the tower of London, I wondered why so many men were loitering around the tower. I asked one man and he told me he was out of work. He said he had worked for forty years for one company without losing a day's work, but that they had put up two poles, one bearing a large loaf and the other a small loaf of bread and he was asked to vote for the large loaf. He told me that his present condition made it impossible to buy the large loaf and that if he had realized what he was doing, he would have voted so that he would have had sufficient money to buy the small

The Budget-Mr. Mullins
loaf. At that time he was receiving only one day's work per week, and that was the result he obtained from free trade. Germany entered the British market and undersold the home product, and this man was put out of work. We cannot have free trade with protection all around us.
I am sorry the hon. member for Southeast Grey is not in her place. I do not know why she always leaves the chamber when I speak. It may be because I am not very interesting or because of my grey hairs. I shall not discuss the tariff any longer, but will go on to another matter. I find in this morning's Journal a severe criticism of the project which has been the hope of western Canada and which was to assist in the moving of our products. I am referring now to the Hudson Bay railway. The people of western Canada have been living in hopes of being able to ship their produce out of that country by some means or other, and if it is not to be by way of Hudson bay, then let us deepen the St. Lawrence waterway, so that we may be enabled to ship our products out; because no man can farm and pay present freight rates. This article on Hudson bay is just another one of the Journal's pipe dreams. It published a good many articles of the same kind when I was here in 1926; it did not give a tinker's curse for Mullins or anybody else who had anything to do with the Hudson Bay railway. I ask hon. members to read for themselves the statements made in that article with regard to navigation in that great channel. That channel is navigable; it can be made navigable, and I hope to live to see the day when liners will be going out of there in large numbers.
Now I come to the question of unemployment. This country is fdled with the unemployed and the great question is-What shall we do with them? There is just one answer: they must go back to the land. They must be taught that tilling the soil is not a disgrace. They left the land a few years ago and crowded into the cities, which to-day are filled with unemployed who will do any kind of menial work. A good many men want to be doctors, preachers and lawyers, and they will do anything so as to escape the drudgery of the farm. These men must be turned back to the land. They must become producers; they must make homes on the prairies. I want to see men happy and comfortable so that they will be contented citizens.
There is another thing I want to mention with reference to the unemployed who appeared on parliament hill a few weeks ago. On that occasion I happened to walk down
from the building and it struck me forcibly, as I looked at the sidewalks, to see it littered with cigarette butts. I wondered what the idea was. Before I leave this House of Commons, Mr. Speaker, I am going to bring in a resolution to prohibit the news stands from selling cigarettes to minors. Just think of what you see in the streets of the cities today. A little girl of fifteen driving a motor car, with a cigarette stuck between her fingers. A short time ago I was driving my daughter's car in Toronto when one of these little girls nearly smashed into me, and all I could see was her nose above the wheel and a big cigarette in her fingers. These girls will never make mothers. I leave it to any medical man in this house to say whether I am right or not. I want to read into Hansard a statement that appeared in the Toronto Star some time ago, bearing on this subject, because it will show what sort of women these girls will make when they grow to womanhood. Youngsters of twelve and fourteen years will go up to news stands and buy cigarettes, in one of these cheap cigar places. A well-regulated cigar store will not sell cigarettes to minors. What are our provincial governments doing? A few days ago I saw a gentleman from the city of Ottawa taking four delinquent boys to Toronto. When he got off this side of Toronto to go to the home, one of the little chaps pulled a cigarette out of his pocket and lit it behind the gentleman's back. It was easy to see where that boy would land in later life. It is these boys and girls that I want to save. In the Toronto Star on March 19, there appeared the following:
Surely it cannot be that in the face of such evidence as that furnished by Mayo Brothers, of the Rochester Clinic, of Dr. Kellogg of the Kellogg Institute, Dr. D. H. Kress, neurologist, Washington sanatorium hospital, and countless others, the publishers of The Star would want to see the girls and women of Canada become addicted to the cigarette. Dr. Kress has said that if young women take up this habit, there will be a landslide in physical and moral degeneracy.
At a medical association conference in Chicago in 1928, a woman doctor of Detroit who had made a study of this phase of the cigarette habit, extending over a period of twenty years, reported that 62 infants out of every 100, born to cigarette smoking mothers never lived beyond the second year. A prominent physician in Washington, D.C., stated that of 5.000 maternity cases coming under his observation not one mother was able to nurse her baby, if she smoked cigarettes.
They put a leech on the arm of one cigarette smoking woman and the leech died from nicotine drawn from her system. It is to be regretted that such an example should be set the rising generation.
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I am not opposed to smoking; I find no fault with a man of mature age who does so. Indeed, there is nothing I like better than to see a man in front of a fireplace, lighting his pipe; but I detest looking at a woman smoking cigarettes. The first woman I ever saw smoking a cigarette was in the city of Rome, Italy. When I saw her light one of these things I thought what a remarkable thing it was. Now you can see scarcely a woman who does not smoke. They nearly all have the pernicious habit in cities.
My time is about up, but I will say this in conclusion. I want the old days back; I do not want present day conditions. Present day conditions will not make Canada what we all want to see this country become. I say: What are you doing? Are you changing? Yes; you have the specialist now. Well, I want the old family doctor back. I do not want the specialist that looks me over first to see how much I have and then takes everything off my back. You can tax a lawyer- and, God help them, we have lots of them here-but you cannot tax one of these specialists. He takes your statement, figures how much you can stand, and then prescribes for you accordingly. Again, I want to see the old storekeeper back in the towns, not the department stores, I want to have the old cattle buyer back in the field-the man who comes to the farmer and says, "How much do you want for these cattle?" And the farmer, with some initiative of his own, states his price and does his own business right there. Give me 'back the old timers, the conditions we had in the early days, and do away with your new corporations, wheat pools and everything else, that has not competent management.


Mr. E. J. YOUNG (Weyburn):: it does not suit their convenience might have a disastrous effect on their business. If our rubber manufacturers, for instance, find it profitable to buy their raw rubber in New York instead of in Malay where it is produced, it must be because it pays them to do so, and if at the coming Imperial conference tariffs should be so arranged as to force those manufacturers to buy their raw material in the country of origin and bring it directly to Canada through our own ports, it might conceivably have the effect of adding so substantially to the cost of that raw rubber that our manufacturers would not be able to compete in the world's markets.
We also hear rumours of plans being made to establish complementary industries within the empire-that is to say, assigning different industries to different parts of the empire; saying to Canada, for instance, you are better suited to the production of such and such products, so you confine yourself to them; saying to Australia, you are better suited to producing these products, so you confine yourself to them; and so on. I do not think that any government, even this one, would be foolish enough to adopt such a policy as that, and hence I shall not waste any time on it.
But there is one matter that is of vital concern to us all, and that is those sections of our Customs Act which give the minister power to fix values for duty purposes, and thereby to raise the tariff at will. I refer to sections 35 to 43 inclusive, of the Customs Act and to the dumping clause in the customs tariff. So long as those sections remain on our statute books any agreement that may be entered into at the conference will not be worth the paper it is written on. It will be absolutely worthless. If at this conference, with these sections still on the statute books, our government should make an agreement with the governments of other parts of the empire to admit their goods into this country under certain conditions, and if the exporters in those countries were then to ship their goods to Canada thinking that they would enter this country under the terms of that agreement, the minister under the clauses I have mentioned could shut out those goods at will. The sections to which I refer should be repealed before this parliament prorogues. Otherwise it is the duty of the Prime Minister at the opening of the conference to say to the representatives of the different governments assembled: "Gentlemen, we are here if possible to make trade arrangements with you, but before engaging upon that task I

must warn you that we have certain provisions on our statute books that will enable us at will to raise the duty against your goods and shut them out by that means in spite of any agreement we may reach at this conference." If the delegates from Great Britain and other parts of the empire are wise, they will refuse absolutely to make any agreements with us so long as those provisions are on the statute books. But I want to urge upon the minister the necessity of repealing these clauses before going into the conference, or at least of assuring the delegates from other parts of the empire that they will not be applied against them.
The Prime Minister, in a previous debate this session, made a remark that is rather disturbing. He said that he hoped that at the conference they would be able to discover some means of stabilizing the exchange values of the currencies of the empire. What does that mean? To stabilize the exchange values of the currencies of the empire simply means that we will agree to redeem each other's currencies at certain fixed values. If we should agree to purchase British pounds at the rate of four Canadian dollars to the pound and Britain agreed to purchase Canadian dollars at the price of four to. the British pound, and then the Canadian dollar should go below that value, Britain would be in a position of having to redeem our dollars for more than they were worth. The value of a country's currencies depends very largely upon certain factors that are under the control of the government of that country, and not under any outside control. If the various governments were to agree on certain exchange values for their respective currencies, and if one of those countries should see fit to act in such a way that its currency becomes worthless, how can we expect other parts of the empire to redeem that currency at the price agreed upon? We have in this house some who .would depreciate our own currency to half its present value. Suppose that at this conference we agree with Great Britain to -buy her pounds at four Canadian dollars to the pound, and she agrees to buy our dollars at four to the pound, and then that the men having these ideas as to currency get into power and depreciate our dollars to one-half its present value. Under those circumstances could we expect the British government to live up to its agreement and redeem our currency at the figure agreed upon? The thing is absurd. Backing each other's notes is poor policy for nations, as it is for individuals. Our delegates going into that conference could

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not do better than to memorize and keep ever in their minds the words of Edmund Burke:
In politics it not infrequently happens that the magnanimous course is the profitable course. Great empires and little minds go ill together.
I would like to say a few words in regard to the subamendment. It reads in part as follows:
Therefore, be it resolved, that in the opinion of this house, as a first step towards general economic reconstruction, our financial system should be nationalized, and provision be made to issue immediately sufficient money to bring the value of the dollar as speedily as possible to that point at which the major portion of our debts were incurred during the war; stabilize the dollar at this point internally and thereafter manage credit and currency issue to secure and maintain a stable price level within Canada.
The object of the subamendment seems to be to stabilize the price level. In my opinion the trouble with the price level is not that it is not stable, but that it is not level. The difficulty is not the price level but the inequalities within the price level. The existence of society, the very existence of the human race itself on the earth to-day, depends upon the division of labour and the exchange of goods. The world could not sustain her present population by any other means. It is only by the division of labour and the exchange of goods that it is possible for the world to produce enough of the necessities of life to support its present papulation. But the exchange must be equitable. That is to say, making due allowances for differences in skill and differences in the degree of application with which different men work, the exchange should be on an equal basis, that one man's labour is equal to that of another. One day of your labour ought to be as valuable as one day of my labour, and the product of your day's labour should exchange for the product of my day's labour. But that condition does not prevail. We all know, we see on every hand, men drawing big wages for rendering very little service. We also see men rendering valuable service and receiving very small wages. These are inequalities that must foe ironed out. It is not so much the price level as the inequalities within it.
We have been told in this debate that the price of primary products to-day is just fifty per cent of what it was two years ago and that the price of manufactured goods i3 eighty-five per cent of what it was two years ago. If you adjust the price level, raise the whole level as my friends to my left would, by inflating the currency, what would happen? You would bring back the price of primary
products to one hundred per cent of what it was two years ago, and at the same time you would raise the price of manufactured goods to one hundred and seventy per cent of what it was two years ago. Can you solve the farmers' problem in that way? As at what date, I ask you, would you stabilize the price level? My friend says that he would stabilize it at the price goods were when most of our debts were incurred. I make this challenge; Name any date you like in this century, in the last century or in any other century, and say that you would stabilize the price level as of that date; I will prove to you that the price level at that date was not equitable, that prices within the level were not fair and just to all. This proposal to correct things by raising or lowering the whole price level will never iron out those inequalities. What is the trouble in Canada to-day? Is it not this: We produce a certain limited variety of commodities, and produce them in vast quantities-more than we can use ourselves. We have a surplus of those commodities which we must sell abroad. When the producers of such commodities can sell their goods abroad they receive in exchange purchasing power, which goes into circulation in Canada and creates employment in all other forms of industry. At the present time our primary producers, those of us who produce goods for export, find they cannot sell their exportable surplus. They have no purchasing power with which to buy other goods in Canada. They have to reduce their staffs. Those from whom they are in the habit of buying have to reduce staffs, bringing about the unemployment and the trouble we are having to-day.
The subamendment proposes to remedy this condition by some change in our financial system, by some change in our currency system, or some change in our banking system. I ask hon. members this question:	Why can
we not sell our wheat? The Minister of Trade and Commerce explained the reason the other night, namely that European governments have decided not to admit it to their countries. The same applies to our newsprint, our lumber and practically everything we have to sell. I ask my hon. friend from Acadia this question: What change will you make in our banking system; what change will you make in our credit system; what change will you make in our currency system that will persuade the people of Europe to buy our wheat, if their governments will not allow them to import it? What change will you make in our banking system;
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what change will you make in our credit system; what change will you make in our currency system, that will give us a better price for our wheat, if our own government will not allow us to bring that price into the country when we get it?
I think I understand the argument concerning inflation. They say the farmer to-day is loaded with a vast burden of debt which he incurred during a period of inflation and which he now has to liquidate during a period of deflation. They say when he borrowed $2,000 a few years ago he was borrowing the equivalent of a thousand bushels of wheat. To-day he has to pay it back with the equivalent of three thousand bushels of wheat. That is true. A real difficulty arises there. But I ask hon. members this question: Who hold the mortgages on the farms of this country? Most of them are held by the great life insurance companies, and when loaning money on mortgage most of those life insurance companies insist that the mortgagor take out a life insurance policy for an amount somewhat larger than the face of the mortgage. That has had the double advantage of increasing the life insurance business and improving the security of the loan.
Let us consider the case of the farmer who mortgaged his farm for say $2,000 during the period of inflation, and took out a life insurance policy for $3,000 at the same time. If the proposals in the subamendment were carried out and the dollar depreciated to half its present value, that man would be able to pay his $2,000 mortgage with 2,000 fifty-cent dollars, but the insurance company when his policy becomes due could pay him off with
3,000	fifty-cent dollars. Will that help the farmers? I do not think so. He will find that the rule works both ways. In the subamendment there is a suggestion to go back to the time when the debts were incurred, to a period of inflation. Is it not strange that these debts were incurred during a period of inflation, and yet my friends in the corner ask for another period of inflation?
When are debts incurred? Certainly always during periods of inflation. If a man familiar with the economic history of the human race had twenty years ago been transported to the northern wilds and kept there in absolute ignorance of everything that has since happened in the world, and were brought back to-day and presented with a statement of the present debts of our people as compared with the debts we had twenty years ago, and were asked his explanation, his answer would be, "You must have gone through a period of inflation." It is always during periods of inflation that we get into debt. This is how

it works: money becomes cheap; every dollar is torn in two and each half is called a dollar. We are handling more counters. We think we are prosperous. Land values go up; every man tries to buy his neighbour out- goes into debt to do it. The price of stocks goes up-but not in real value, only in the number of counters. When stocks begin to go up everybody begins to speculate. We buy stocks in the morning at 50, and by night they have reached 60. Then we think we have made a profit of ten dollars. We feel rich and begin to live accordingly. Money is plentiful and easily borrowed; credit is easily obtained, and with that credit we buy more houses, more cars, finer furniture, finer clothes, consuming real wealth and giving worthless paper in exchange. That is the story of inflation. Inflate the currency again, and what will happen? There would be another boom in real estate, another boom in common stocks, another period of wild speculation, another period of living beyond our means. Then some fine morning we would wake up to find ourselves more hopelessly in debt than ever.


Charles A. Stewart: That would be the time to sell out.


Edward James Young: Yes; everybody thinks he
will sell out just before the crash comes. The unfortunate fact is however that he does not do so. When one man sells another man usually buys. Somebody is always caught.
I think the most unjust and immoral suggestion that has been made in this house since I have been a member of it was made by the hon. member for Acadia when he suggested we should tax the savings of the people into circulation. These are his words:
If I were the minister of finance just for long enough to bring in the budget I would take the attitude that under present conditions we are justified in taxing those enormous savings into circulation.
I do not know what justification he can find for such a statement. We will suppose that two men working side by side receive their pay envelopes on Saturday night. One goes to town and spends his money, having a good time. The other takes a more serious view of life and says, "I will not spend all my money; I should like to save a little for my old age. I should like to educate my children when they grow up." He spends half his income and saves the other half. Surely he is entitled to his savings. If it is taken away from him, what happens? If we tax the savings of the people as suggested, we are taxing those men who make it possible for us to live in our houses. No man can build a house without

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borrowing money, or at least using someone else's savings. A man either has to save his own money or use somebody else's if he intends to build. If that money is taxed and taken away from him, what will he do? He will have to live outside until he can build his own home. If you tax that money into circulation you say to the banks, "Give us the savings of the people." What will the people do? They will take their money out of the banks and put it into their stockings-the first national bank.


Mr. CAMPBELL:: They might put it into government bonds.


Edward James Young: Yes, and encourage the government in its extravagance. How would you get that money into the hands of the unemployed? How are we to get it into the hands of those who cannot pay their debts? These are the questions with which we are faced. The people will say, "We cannot put our money into the banks, so we will put it into stocks."


An hon. MEMBER:: Or socks.


Edward James Young: Stocks or socks, yes. If it is put into socks, it is hidden away and is of no use to anybody. If it is put into stocks-


Mr. RYERSON:: Would it be the socks the hon. member exhibited in the house last year?


Edward James Young: If my hon. friend wishes to see those socks he may do so any time he likes. If he puts it into stocks he will be investing it in more plant and equipment to which my hon. friends in the comer object.
And now, for a moment, I should like to deal with the suggestion made by the Minister of Trade and Commerce (Mr. Stevens) to the effect that we might restore prosperity by artificially increasing the value of silver in its relation to gold. A few nights ago he made a very elaborate argument to prove that our trouble to-day is due to the fact that gold has become very dear. He said the fall in the price level had been the cause of all our trouble. As we measure everything by gold, a fall in price level means a rise in the price of gold. The minister says we can bring prosperity to China -w'hich uses silver as her standard-by doing the very thing with their standard that has been done with our standard, and has brought disaster upon us. He says we should artifically increase the price of silver in China. If an increase in the price of our standard has resulted in disaster in this country, would not an increase in the price of China's standard have the same effect in that country? He seems to labour under the impression that China buys
its imports with silver. China does not buy goods with silver; she buys silver with goods. China has no silver mines. She buys her silver from us, from Mexico, and other countries that produce it. If you artificially increase the price of silver you compel the Chinaman to give you more goods for the silver he wants. Can you restore prosperity to China in that way? I am afraid the Minister of Trade and Commerce was a little loose in his thinking on that occasion.
Coming now to the gold standard, are we or are we not on the gold standard? Some say we are not. We are not; and we are. In so far as redeeming our dollars in gold is concerned, we are not on the gold standard but in so far as measuring values is concerned, we are on the gold standard and we cannot get off it. Our values are still measured in gold, and when we divorced our dollar from gold, our dollar, still being measured in gold, dropped in value to eighty cents, the amount of gold it was worth. The law says so many grains of gold is a dollar, but the law does not say what that many grains of gold will buy, and when we said, "We won't give that many grains of gold in exchange for the dollar," then the business men of the world, and the public generally, the people said, "Well, we will give you for your dollars just exactly what it is worth in gold." I do not agree with the member for Wetaskiwin (Mr. Irvine) when he says gold was chosen by Sir Robert Peel as the standard because it was pretty and could be cut up in pieces without hurting it. That was not the idea at all. Gold was chosen as the standard of value because in every country, in every age, and under all conditions, it was the one commodity that men were willing to take in exchange for whatever they had to sell. It did not matter what you wanted to sell, where you were, when or under what circumstances, you would always take gold for it. It did not matter what you were trying to buy, people would always be willing to accept payment in gold. The governments of the world in selecting gold as the standard of value simply said: "We recognize this condition which already prevails." That condition prevails, because, as my friends said, the metal has a certain quality in itself. It is imperishable; it is convenient to handle; it can be cut up without injury; it is attractive in ap-pearence.


Milton Neil Campbell: It is the most useless metal mined.	.


Edward James Young: Maybe, but the human race are willing to give work in exchange for it.
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Milton Neil Campbell: You cannot make an axe out of it.


Edward James Young: I say the human race are willing to take it in exchange for anything they have to sell, and it is the only thing they are willing to take in exchange. It is no concern of ours whether the metal is of any practical value or not, whether they want it to eat or to wear. The essential thing is that they are always willing to take it in exchange for what they have to sell. That is the reason why gold was chosen as a standard. It has an advantage too. Speaking broadly, the value of anything should be determined by the human labour required to produce it. It would be impossible to determine the value of one man's labour for a day against the value of every other man's labour for the same time, and it was necessary to find some commodity whose value was determined, as I said, speaking broadly, by the amount of labour required to produce it, and which varied in value very, very little. There is nothing produced in the world to-day that I know of the labour cost of whose production varies so little as that of gold. That is one of the great advantages of the gold standard. My friends object to it because it does not vary. They want a measure that does vary. But the mariner must always steer by a fixed star, not by a wandering comet. If we are going to determine the values of other things we must have something stable to measure them by. It would not do for us to measure to-day by a thirty-six inch yard stick and to-morrow by a thirty-eight inch yard stick. We want something that varies less than anything else
and gold is that thing. Those who would abolish the gold standard and put something else in its place must find some other commodity that has all the advantages of gold and that will not vary in labour cost any more than does gold.


Mr. HEAPS:: What are they doing in England just now?


Edward James Young: As I said, as a measure of value, England is not off the gold standard any more than we are. True, she is not redeeming her pound in gold, but gold is the measure of value to-day just the same as it was before, and that is the reason why the pound is down so low. Its value is being measured in gold and people will not give as much gold for it as formerly.


Abraham Albert Heaps: Is not the pound the measure of vailue. Not gold?


Edward James Young: No, gold is the real measure of value, and because the pound is not redeemable in gold it has lost its value.
Now, in regard to the proposal that we should nationalize our banks, again I say I cannot agree with the subamendment. What would you do if you nationalized the banks? You would have to set up some sort of body to control them. Who is going to control that body? Would you set that body up independent of everybody else, a self-perpetuating commission not answerable to anybody, and let that commission do as it liked with currency and credit? If not, then you will have to make them responsible to somebody. To whom will they be responsible ? To this house, to this parliament. And being responsible to parliament means being responsible to the government of the day. I ask my hon. friends in the corner if they would like to go into an election with all our 'banks under the control of my hon. friends opposite? Of recent days we have had some light cast on the inner workings of some of our government institutions. Don't you think there is too much political interference? Can you have such government control without political interference? If we made such a body responsible to the government, the government would be held responsible for their actions and they-the government-would have the right to control.


Mr. COOTE:: Is my hon. friend trying to discredit the political party system?


Edward James Young: No. I should like to quote a few words from John Stuart Mill's essay on Liberty in regard to this movement to put everything in the hands of government. He
says:
Every function superadded to those already exercised by the government causes its influence over hopes and fears to be more widely diifused, and converts, more and more, the active and ambitious part of the public into hangers-on of the government, or of some party which aims at becoming the government. If the roads, the railways, the banks, the insurance offices, the great joint-stock companies, the universities, and the public charities, were all of them branches of the government; if, in addition, the municipal corporations and local boards, with all that now devolves on them, became departments of the central administration; if the employees of all these different enterprises were appointed and paid by the government, and looked to the government for every rise in life; not all the freedom of the press and popular constitution of the legislature would make this or any other country free otherwise than in name. And the evil would be greater, the more efficiently and scientifically the administrative machinery was constructed-the more skilful the arrangements for obtaining the best qualified hands and heads with which to work it.

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Further on he says:
If indeed all the high talent of the country could be drawn into the service of the government, a proposal tending to bring about that result might well inspire uneasiness. If every part of the business of society which required organized concert, or large and comprehensive views, were in the hands of the government, and if government offices were universally filled by the ablest men, all the enlarged culture and practised intelligence in the country, except the purely speculative, would be concentrated in a numerous bureaucracy, to whom alone the rest of the community would look for all things; the multitude for direction and dictation in all they had to do; the able and aspiring for personal advancement. To be admitted into the ranks-


The ACTING SPEAKER (Mr. MacNicol):: The hon. gentleman has spoken forty minutes.


Edward James Young: Will you iplease allow me to finish this sentence, Mir. Speaker?
To be admitted into the ranks of this bureaucracy, and when admitted, to rise therein, would be the sole objects of ambition. Under this regime, not only is the outside public ill-qualified, for want of practical experience, to criticize or cheek the mode of operation of the bureaucracy, but even if the accidents of despotic or the natural working of popular institutions occasionally raise to the summit a ruler or rulers of reforming inclinations, no reform can be effected which is contrary to the interest of the bureaucracy.


Mr. F. T. SHAVER (Stormont):: Mr. Speaker, I desire first of all to add my congratulations to those already extended by hon. members on both sides of the house to the Minister of Finance (Mr. Rhodes) on the presentation of his first budget. The province from which he comes is comparatively small in area and perhaps small in population as compared with some of the other provinces of Canada, but it has given to the public life of this country many eminent statesmen, and I am quite sure that throughout Canada today there is no one who is regarded in higher esteem than the hon. gentleman who now holds the portfolio of finance, for which he is so eminently fitted by education, by training, by long political experience and, most of all, by great personal ability.
I listened with a great deal of interest to the long address delivered a few days ago by the hon. member for Shelbume-Yar-mouth (Mr. Ralston), the chief financial critic of the opposition. His remarks have been echoed and reechoed-sometimes the echoes were rather hollow-by hon. gentlemen apposite who followed. I noticed that his remarks were absolutely one-sided, and I was particularly interested in one observation he made, which appears on page 1421
of Hansard. Criticizing a speech made by the Prime Minister (Mr. Bennett), the hon. member stated that he had substituted information for argument. When I heard that remark I did not think it could be possible, and I verified it my consulting Hansard; I did not believe a man could be criticized for substituting information for argument. Information presented in logical order which is the method always followed by the Prime Minister, is the very best of arguments, and the speech of the Minister of Finance owned its strength to the fact that it was a presentation of that character. After looking through the long speech of the hon. member for Shelburne-Yarmouth, which took nearly two and one-half hours to deliver, one must come to the conclusion that such criticism could not be applied to him, as his speech contained the maximum amount of argument built up on the minimum of information.
One of the criticisms levelled against the present government by many hon. gentlemen opposite who have taken part in this debate is the fact that Canada's foreign trade has declined since this government came into power. We all know that that is simply the result of world conditions, and that the foreign trade of every other country is also declining. I venture to say that if the comparisons were stated not in dollars but in tons, yards and cubic feet, in quantities rather than values, there would not be such a great discrepancy between the figures for 1931 and those for preceding years. The policy of the government now in power has placed the foreign trade of this country in a relatively better position when compared with other exporting and importing countries than it has been for many years past. In a period of depression-we can make a correct estimate of whether our foreign trade is advancing or receding only by comparing it with the trade of other nations. According to the statistics for 1930, the last year in which hon. gentlemen opposite were in power, our country was fifth among the importing countries of the world, and in sixth position when exports were considered. In 1931, under the protective policy of the present government, we had dropped to sixth place among the importing countries but had risen to fifth place among the exporting countries. In 1930 we occupied seventeenth position with regard to our favourable trade balance, the favourable relation of exports and imports, but in 1931 we have moved up to fourteenth position. There is absolutely nothing in the arguments advanced by hon. gentlemen opposite in an effort to discredit
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the government because our foreign trade had declined.
Attempts have been made during the last and present sessions to belittle the work of the Prime Minister at the imperial conference. We were told by practically every hon. member opposite who spoke last session-some have referred to it during the present session -that the Prime Minister had made a great mistake when he proposed that Great Britain should adopt a protective tariff, that such an attitude would result in nothing but failure as far as the results of the economic conference were concerned. The major and minor prophets on the opposite side of the house said that Great Britain would never forsake her old policy of free trade. There now seems to be a pathetic look on the faces of some hon. gentlemen opposite-rather like the expression of a man who has been betrayed in the house of a friend-when they realize that the last country in the world to which they could look to carry on free trade, and from which they derived all the shibboleths they proclaimed so loudly during 'the election, has forsaken the policy she followed for so long and has become a protected country. I am reminded of the remark made on one occasion by the great Disraeli when he described a political opponent as a man who was distinguished among his colleagues because he possessed only one idea, and that idea was wrong. As far as economic ideas are concerned I am sure that many hon. gentlemen opposite possess only one, that of free trade, and it has been proven to be wrong by the greatest exemplar of free trade.
I regret the many attacks which have been made against the manufacturers of this country. It has seemed almost impossible for some hon. members to make a speech without making deprecatory remarks about our manufacturers. They have been referred to as the protected vested interests, as those receiving special benefits from the government, and so on; but coming from a constituency in which there are several large industries, knowing what has been done by industry generally and realizing that no other class deserves the thanks of the Canadian people to a greater extent than the manufacturers, I desire to protest against this attitude. During this period of depression through which we are passing no class has been readier to make sacrifices, and to take such steps as would enable men and women to earn a decent living, than has the manufacturer. I am not concerned so much with the manufacturers as I am with the four thousand men and women in my own county who are making a living

in industry and who are enabled to keep their families in comfort and send their children to school because they have had steady jobs since this government came into power. I know it is difficult to touch the hearts of some hon. gentlemen opposite by making an appeal on this basis. There may be hon. gentlemen who would prefer to buy agricultural implements manufactured in a country other than Canada, who would rather drive an American automobile than one made in Canada, who would prefer to use in their homes cotton goods made in the southern states or in Czechoslovakia rather than in the mills in my own county; who would prefer socks made in Japan to those made in Canada; and I know it is difficult to touch the hearts of such hon. members by making an appeal on behalf of the four thousand working men and women in my county. However, I do appeal to them at least to be reasonable and to give the manufacturers a fair show.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Frank Thomas Shaver: Resuming where I left off
when the house rose at six o'clock, I would refer for a few moments to the taxation proposals brought down by the Minister of Finance in the recent budget. Every hon. member, I presume, is interested in the reaction of his own constituents to these proposals; he is anxious to know whether they have received them with satisfaction or the contrary. The hon. member for Glengarry (Mr. McGillis), whose constituency is next to mine, and I have received several letters from those whom we represent, strongly approving of the taxation proposals contained in the budget. The Cornwall Freeholder of April 9 had a series of interviews with prominent business men in that town, about equally divided between the two political parties, and while there were some minor criticisms of a few secondary points in the budget, they agreed in the main entirely that these taxation proposals are fair and equitable and so adjusted as to fall on those best able to bear them. I will read one paragraph of an interview with one of the prominent business men of that town. He said:
We must appreciate the fact that the government must balance its budget, and that the money must come out of the public. I believe that the budget taxation is chiefly aimed to take the most revenue out of those best able to afford it.

The Budget-Mr. Shaver
That is a clear indication that the majority, at any rate, of the people in my constituency are thoroughly satisfied with the taxation proposed in the budget, particularly in this period of depression through which the country is passing.
Returning now to a consideration of the conditions of industry in Canada, a question which I touched upon briefly before six o'clock, I think that one indication of the progress of industry is supplied in the number of failures in industry in Canada, comparing 1930 with 1931. In 1930, the last year in which hon. gentlemen opposite were in power, there were 2,402 commercial failures in Canada, and in 1931 the number had decreased to 2,216. The Bureau of Statistics informs us that 141 new industries of outside origin have been established in Canada since September, 1930, without taking into account any of the additions made to industries already in existence. Everyone in this house knows the beneficial effect on the automobile industry. For several weeks, in fact extending over a period of two or three months, we frequently saw in the newspapers reports of American automobile firms, one after another establishing branch plants in Canada, many of which are now in operation. The hon. member for Toronto Northwest (Mr. MacNicol), in the excellent address he delivered in this house the other evening, gave a very clearcut and comprehensive idea of the advantage which the changes made in the tariff by the present government have brought to the iron and steel industry. The hon. member for South Waterloo (Mr. Edwards) similarly explained in full the beneficial effect of the present tariff on the knitted goods and woollen industry of this country. These are two phases of industry that have been actually benefited. But I would refer hon. gentlemen to an authority entirely outside Canada, an authority wholly unbiassed and one who has no political preferences so far as Canada is concerned. The following appeared in a despatch dated Washington, D.C., April 14, 1932, and published in the morning newspapers of that day:
Administration economic experts definitely attribute the expansion of American industrial branches in Canada to the influence of the Canadian tariff policy. The branch factory movement has been considerably retarded by the depression, except in the case of Canada, where it has been maintained primarily by the pressure of a definite tariff policy.
That is the opinion of Dr. F. B. Feiker, of the Bureau of Foreign and Domestic Relations of the United States.
I would refer more especially to conditions obtaining in my own county. Last year, in a
speech I made in this house, I told of the benefits derived by the industries of Cornwall, and those outside the town, from the tariff policy of the present government. I am very glad to ibe able to tell the house that that improvement in industry has been maintained during the past year. I have here part of a report of the president of the board of trade which was printed in the Cornwall Freeholder of February 6, 1932, dealing with industrial conditions in the town' in the year 1931. This is a very clear and comprehensive report under the heading, "Some improvement in conditions here during past year". I will read one paragraph dealing with industry:
I now pass to statistical information concerning the industrial phases of our town and the surrounding district. The collective figures for fourteen of our industries are as follows: number of men employed. 3,353; amount of wages and salaries, $3,036,591.58; value of finished products, $12,264,377.48. This is a very slight decrease from last year and it is due to the fact that I am able to report for fourteen industries only, whereas last year, figures for seventeen industries were given. In has been impossible for us to get the figures of the remaining three industries, and should we have had them, there is no doubt that there would have been a slight increase over last year.
I am sure that in this period of world depression, when the president of a board of trade of any town is able to report a slight improvement in industry in 1931, it is a matter .that must be gratifying to the Canadian people and especially to those of us on this side of the house. I mentioned last year that one of the largest industries in my county, Court-auld'fe Limited, rayon manufacturers, were constructing an addition to their plant, costing 82,000,000, and giving employment to 300 men during the winter of 1931. That addition to their plant has now been in operation for several months, and whereas when this government came into power 1,000 persons were on its payroll, there are now 1,400, working full time.
The hon. member for Toronto Northwest mentioned the beneficial effect which one successful industry had on others throughout the country, supplying that particular industry with the various chemicals and raw materials it used. As an indication of that truth, this industry to which I refer used last year over three-quarters of a million dollars' worth of Canadian materials including wood pulp from such widely separated parts of the country as Temiskaming, Ontario, and Campbellton, New Brunswick; coal from Nova Scotia; chemicals from Sulphide, Ontario, from Windsor and Montreal, and various other materials from other points.
The Budget-Mr. Shaver

Let me mention the fine paper industry, represented by two mills in the county of Stormont. By the abolition of tariff item 1060, in the short session of 1930, those industries were greatly helped and encouraged. They received many orders from Canadian magazine publishers, who had formed}' received under the terms of that item a rebate of eighty per cent of the duty on paper purchased in the United States. The concerns in question received a good deal of additional business that way. Further, in consequence of the tariff changes made at the last regular session, many American magazine publishers were forced to come into Canada and publish here. That has also brought a good deal of additional business to these mills. In addition to that, stimulation of business in other industries has been occasioned by the tariff policy of the present government, and that has meant a good deal of business for the fine paper industry.
With reference to cotton textiles, which are represented by three mills in my county, it is a fact well known to anyone who has looked into the matter, that since the war there has been a world-wide overproduction of cotton textiles. That is true of nearly every country in the world that manufactures textiles of this kind, except Canada. To show clearly that there has been no overproduction in this country, I would point out that in 1930 the production of the Canadian cotton mills was, in money, $58,587,366; but we imported in the year ended March 31, 1931, $22,634,074 worth of cotton textiles. This proves that there has been no overproduction in Canada; on the contrary, there is great room for expansion in that industry. Let me show how this industry was gradually languishing under the policy of hon. gentlemen opposite. In 1929 the production of the cotton mills of Canada amounted to $90,079,956, and, as I said before, it dropped in 1930 to $58,587,366. There was a corresponding reduction in capital investment, number of employees and salaries and wages paid. I have not been able to obtain complete figures for 1931, so that I cannot give a comparison showing the result of the policy of the present government on that industry as a whole in Canada, but I am able to give a comparison as regards the mills in my constituency, and they show a very clear and definite improvement. This table shows the production of manufactured cotton in mills in my county in 1930, the last year hon. gentlemen opposite were in power, and that in 1931:
Year	Production
1930	 6,579,178 pounds
1931	 7,135,315 pounds

That shows an increase of 556,137 pounds or 8i per cent, so that it is apparent the industry has been materially benefited.
Some hon. gentlemen opposite have compared prices; they have told us that prices on manufactured products have not declined to the same extent as those of the products of the farm. That is very true. It is something that always happens when there is a decline in prices, and that everyone deplores; but at the same time the reduction in the price of manufactured products has been much greater than hon. gentlemen have stated in the figures they have given to the house. In a short speech which I delivered a few weeks ago, I pointed out the reduction in price on various items as given to me by one of the leading merchants in my county, a gentleman who has been in business for a long time, who keeps accurate records and who is able to give a clear and correct computation of the reduction in prices. His figures show that in the last two years there have been the following reductions:
Commodity	Reduction in price
Dry goods	 22 to 25 per cent
Boots and shoes	 18 to 20 per cent
I notice the hon. member for Shelburne-Yarmouth (Mr. Ralston) said that there had been a decline in price of 4.6 per cent on boots and shoes, and his figures were confirmed by the hon. member for West Middlesex (Mr. Elliott). If they had visited some manufacturers or wholesale merchants or had bought a pair of shoes of the kind they were accustomed to buy two years ago, I am sure they would have found the reduction was much more than that. A gentleman who has a very wide connection with the furniture trade told me that furniture had decreased in price at least 25 per cent.
I wish also to place on Hansard a comparison compiled from figures on sales slips in the country store in which I am a partner. I am comparing prices in January, 1930, on goods on an actual sales slip of that date with prices on the same goods in January, 1932. I have several sales slips, but I have time to place only one on Hansard. I select this one because it consists entirely of manufactured goods, as follows: two pairs of rubbers, one suit underwear, five yards of ticking, pair of overalls, two pairs of woollen socks. The prices are as follows:
Date	Price
January, 1930	 $11 00
January, 1932	 8 10
That shows a reduction of 26.36 per cent, proving conclusively there has been a great reduction in prices of manufactured goods.

I noticed during the course of this debate, although perhaps not to the same extent as a year ago, some hon. gentlemen opposite are still holding post mortems on their defeat in 1930; they are still blaming New Zealand butter for that wonderful landslide which took place in July, 1930. They have only themselves to blame, they had placed themselves in a position where there wras no possibility of escape. For four years prior to the last general election they were telling the people from the public platform, in the press and on the floor of parliament that large quantities of New Zealand butter coming into Canada were not detrimental, but in a sense beneficial to our dairy farmer. The hon. member for West Elgin (Mr. Hepburn) has been using that argument during the present session. The Canadian farmer, who in their opinion apparently did not know his own business we'll enough to control his production, had to be warned away from getting on the foreign market, protected from doing so, by the method of allowing butter from countries which could produce it more cheaply to come into Canada at a low rate of duty or under no duty at all. My hon. friends opposite used that argument until a few weeks of the election; then they brought down the Dunning budget and reversed everything they had said1 during the previous four years. They placed a duty on butter and gave notice of the abrogation of the agreement with New Zealand.
At that time I was making a personal canvass of the electorate in my constituency. I had been at this work for a couple of weeks, and the morning after the Dunning budget came down I noticed a different attitude amongst the farmers. They were convinced already-no argument on my part was needed -that the government which those of them who were Liberals were following, was entirely wrong, because they had admitted this by their
Between January, 1932, and December, 1931..
Average for year, 1913	
Average for year, 1931	
Average for year, 1930	
That proves conclusively that comparatively the reduction in prices has not been nearly so marked in Canada as in the United States. I have also the average yearly jobbing prices of creamery butter. For a great many years there has been a spread between the price of butter in New York and Montreal. For the year 1931 when we had a protective tariff in effect-and this is significant-the spread between the New York price and the Montreal
The Budget-Mr. Shaver
own action. But the Liberal party were true to their policy of setting their sails to catch every chance political breeze, and they received the reward which they deserved1. Hon. gentlemen opposite have told us about the low price of farm products and have endeavoured to lay the blame for that on the government of today. In my constituency I never told anyone that the Canadian price would be raised if world prices declined, but I said to the farmers that they were going to have fair and equal competition in their own markets; they were to have a chance to supply the people of Canada with butter made in this country. That was the argument I used.
The low price of farm products is common throughout the whole world, but I think I can prove conclusively the action which the present government has taken has been of great assistance in maintaining prices of farm products at a higher level than would have been the case had hon. gentlemen opposite remained in power. There is no question that their policy of admitting farm products of different kinds at very low rates of duty had the effect of keeping down the price at different periods of the year when there would be a chance from various causes for prices to rise; there was always this influence of a large quantity of foreign commodities coming on the market. I have under my hand a comparison of price reductions in Canada and in the United States, and I think it is a fair one. The percentages of price reductions in Canada are given by the Bureau of Statistics, and those in the United States by a bulletin issued by the United States Department of Agriculture on February 15 of the present year. This takes the average of wholesale prices of farm products for January, 1932, and compares them with those at various times in the past. The figures are as follows:
Percentage of Reduction Canada	United States
1-9 per cent 16-9 per cent 8-8 per cent 36-9 per cent
8 per cent 37 per cent 22 per cent 53 per cent
price was not nearly as great as it had been in the four preceding years. In 1927 the New York price was 8.72 cents higher than the Montreal average for the year; in 1928, 9.41 cents higher; 1929, 5.75 cents higher; 1930, 5.46 cents higher; and in 1931 the spread had been reduced to 4.15 cents.
I would also compare the prices of eggs. The average price of fresh firsts for the whole

The Budget-Mr. Shaver


Milton Neil Campbell: I wish first of all to congratulate the Minister of Finance (Mr. Rhodes) on the fact that his budget speech was on such a high plane and couched in cultured and dignified language befitting the occasion, that occasion being the presentation to the shareholders of Canada of their annual statement of accounts.
Of primary importance in the budget is the increase in the income tax. I wish to congratulate the minister on his income tax proposals, not simply because he has increased the tax, nor because I like to see an increase in the taxes of someone else beside myself, but because I believe that when we must have additional revenue the income tax is the very surest way of securing it; it is also the fairest tax because it is based purely on the principle of ability to pay.
Perhaps I may be permitted to put on record a few figures to show that the income tax is capable of being used still further as a revenue producer. I will give first the figures of the income tax for 1921, when the present government went out of office, about the end of the war period; the reductions made in income tax in the last regime, and the new income tax, which is still considerably lower than the tax as it was in 1921. The figures that I shall quote are for a married person without children :
Income	Tax 1921	Tax 1930	New tax	$ 10.000	$ 619 50	$ 232 00	$ 354	9020.000	2.089 50	1,232 00	1.730	4030.000	4.084 50	2,880 00	3.918	60100,000	32.749 50	19,064 00	25.248	30200,000	97,849 50	51,496 00	67,859	4041761-1341	
I think, Mr. Speaker, these figures will show that the income tax is capable of being used still further, provided that additional revenue is required another year.
I wish again to express my appreciation of the fact that the Minister of Finance has seen fit to postpone for another year the imposition of the increased duties on implement repairs, and I hope by the time another year has come round he will see fit to cancel them altogether. In this section of the house, where hon. members are so very much concerned with the matter of implement repairs, we appreciate the minister's action very much indeed. This budget stands in a -class by itself, and enjoys the unique distinction of containing no increases in the tariff, and only one decrease. The reasons are of course fairly obvious. I presume on account of the approaching Imperial economic conference -the government is postponing alterations until that time. For that reason we appreciate all the more the fact that the minister has made -this one exception by postponing the imposition of the duty on implement -repairs.
There is just one other feature to which I should like to draw the attention of the minister, namely the method of application of the so-called excise tax. This is increased from one to three per cent, and as it applies only to imports it really -constitutes an increase in the tariff. My understanding of an excise tax is that it should apply equally on home products and imported goods. In this case the minister is sim-ply following the example set by the Minister of Finance for the year 1926, the late Hon. Mr. Robb, who, I think for the first -time, made the excise tax on motor cars applicable only to imported cars, amounting to an increase in protection.
I think I may safely state that so far as we can now see the outstanding event in the year will be the Imperial economic conference. People in all parts of the British empire are looking forward with hope and confidence to the conference, and I trust the Canadian government will not disappoint the people of Canada or of other parts of the empire by failing to do its share to measure up to expectations. Any disappointment or failure of the conference to measure up to the hopes of the people will indeed be serious. Disappointment would mean reaction, and would have an adverse psychological effect on business. I suggest that the government be prepared-probably they are; but there is no harm in suggesting that they go to the conference prepared to make some substantial
The Budget-Mr. Campbell

reductions in duties on British imports. It seems to me that unless they are ready to do that so far as we are concerned the conference will come to an end. If we expect to secure preferred treatment in the British market for our wheat, butter, cattle, lumber, copper or the many other products of Canada, we must be prepared to meet them in a spirit of fair play and make substantial reductions in the tariff on certain classes of British goods.
When we survey the schedules we cannot help thinking that textiles will be one of the commodities British people will be expecting to ship to Canada. The textile industry is being more carefully nurtured and better protected than any other industry in Canada. Some lines in connection with the textile industry are not indigenous to this country, and we should be prepared to make some concession to British interests in that regard.
I should like to say a word or two concerning the St. Lawrence deep waterway. From one end of Canada to the other there is considerable discussion as to whether or not this project is feasible, but I believe the consensus of opinion throughout Canada is that it is a practicable proposition. From the standpoint of both transportation and power it seems to me that the completion of that project would be a good thing for Canada. At the present time materials and labour are cheaper than they have been for a quarter of a century, and this is an opportune time to go ahead with and complete the work. Cheap material and cheap labour would be available, with resulting lower overhead and lower costs of power and transportation for all time to come. Already part of the scheme has been completed. We have the great Welland canal, the construction of which cost about S125.000,-000, and the Beauhamois canal, now almost completed, at a cost of about $20,000,000, ownership of which has been vested in the federal government. In any arrangement made with the .United States, Canada would be entitled to a cash credit for her interest in parts already completed, and that is something we may well take into consideration. I do not listen to many of the extravagant predictions concerning reduced rates on our grain and other commodities, put forward by those favouring the project. Undoubtedly many unwarranted and extravagant statements are being made in that connection, but I feel quite sure that from the standpoint of transportation the completion of the project is fully justified.
Then we must consider the development of power. Cheap power is the basis of industry.

The more cheap power we can put on the market in Canada the more likely we are to bring industries from other lands. I do not believe I am overstating the facts when I say that to-day Canada has more potential water power than all the rest of the world put together. It seems to me that by a proper development of that power, seeing to it that the overhead in the development is not too great, we can lay a foundation for the greatest industries Canada and the world has ever seen. I may be looking ahead some distance, but I am convinced that Canada has greater opportunities in that respect than any other country in the world. The distribution of money, the employment of labour necessary in the construction of a work of this kind, would be a stimulus to industry and have beneficial effects all round. In addition undoubtely the government would be saved the expenditure of millions of dollars in unemployment relief. Practically the only market we have to look forward to for our wheat is Great Britain, but I still believe the United States is the logical market for many of the products of our farms, our forests and our mines, and it is a market of which I hope we shall ultimately secure a fair share. The completion of arrangements for the construction of the St. Lawrence deep waterway should be a powerful factor in creating more harmonious relations between Canada and the United States-relations which would, I trust, ultimately result in trade arrangements to the mutual benefit of both countries.
May I draw attention more particularly to the Liberal amendment. It simply asks for a reduction of tariff, I presume back to the position where it stood when the Liberals -left office in 1930. Quite obviously this is not sufficient to cope with the present depression. The moving of such a meek and anaemic amendment was not a fitting end to the very able presentation of the case for his party made by the hon. member for Shel-burne-Yarmouth (Mr. Ralston). In looking over this amendment in the face of the very serious problems confronting us to-day, I would say it is utterly unworthy of the great traditions of the Liberal party.
On the other hand, the subamendment goes to the very root of present day conditions. Of first consideration in dealing with the depression is the condition of agriculture. In this connection I should like to place upon Hansard some figures from the Economic Annalist, a publication issued by the Minister of Agriculture (Mr. Weir):

The Budget-Mr. Campbell
Annual and Monthly Index Numbers of Prices and Production Computed by Dominion Bureau of Statistics
Retail
Wholesale prices, 1926=100	prices and
All	Farm	Field	Animal	cost ofFear	commodities products	products	products	services1913	
64-	62-6	56-4	77-	65-41920	
155-9	161-6	166-5	149-9	124-21926	
100-	100-	100-	100-	1001931	(Feb.). 76-	60-9	45-	87-5	94-11932	(Feb.)	
69-2	52-1	43-7	66-2	84-6
It will be noted that while all commodities dropped thirty-one per cent from 1926 to February of this year, farm products separately dropped forty-eight per cent. It will also be noted that the index figure for farm field products to-day is just about twenty-five per cent of what it was in 1920. This was about the time when, I believe, the great bulk of the- debts of our western farmers, were incurred, so it can easily be seen what a desperate position our farmers are in to-day with respect to those debts. I should add that the column dealing with retail prices and cost of services includes food, rent, fuel, clothing and sundries. I draw attention to the fact that while these retail prices dropped only about fifteen per cent from 1926 to February of this year, field products dropped fifty-seven per cent. This will show one of the reasons why agriculture is adversely affected to a much greater extent than other industries.
The Minister of Trade and Commerce (Mr. Stevens) in the very able and very excellent speech he gave us a few nights ago dealt with the money question. I wish to congratulate him on the study he has made of this question, and for the moral courage he had to express the opinions he did from the government benches. I -would say that he is the first federal cabinet minister who has ever attacked the money problem from that angle. He stated that there were four factors in the present depression-price levels, debt, interest and trade. In dealing with the fluctuating value of money and showing its effects on liabilities and debts, he asked the pertinent question as to what would happen if the system of weights and measures fluctuated as have commodity values during the last few years. He told us that what we needed today more than anything else was stability of prices. I may say that the minister's speech was almost a complete endorsation of the subamendment, because that is exactly what is aimed at. The minister did imply -that it would be necessary to have an international agreement to bring about any stabilization of commodity prices and to correct the evils in
the money system. I quite agree with him that we cannot deal with this question fully outside of an international agreement, but I do contend that if we sit here and wait until there is an international agreement arrived at nothing will ever be done. We in Canada can correct the position to a very large extent even without assistance from the outside world at all. Let us take the position of France in the depression of 1920-21. I do not think it will be contradicted by anyone that the international bankers' association agreed on a general deflation in 1920 ini order to bring the various countries back to the gold basis. Arrangements were made to have this brought about concurrently throughout the great countries of the world. The United States bankers deflated and they put six million men out of work, involving great misery, suffering and hardship. The English bankers deflated, two million men were put out of work, and they have been unemployed ever since. We know what happened in Canada. We had a period of very great distress, not so serious as the depression we are going through now, but very serious indeed. But the action of the French government is worthy of our attention. The government of France forbade their bankers to deflate as the bankers did in the other great countries, and while in- other countries prices were tumbling and men were thrown out of work with all the consequent hardship, misery and suffering, commodity prices remained fairly stable in France throughout that period, and every single man was working. As a matter of fact, while two million men were out of work in England, and six million were unemployed in the United States, France was bringing in workmen from Poland and the other eastern countries of Europe to keep her industries running.
An horn. MEMBER:	They are not doing
it now.


Milton Neil Campbell: I quite understand that, but France did pull through that period much better than any other country in the world, largely because she refused to follow the
The Budget-Mr. Campbell

general deflation policy of the international bankers and maintained the level of prices. It was not until 1927 that France went back on the gold basis, and she did it then by establishing her currency at 25 per cent of its normal value. That meant writing off about 75 per cent of her national debt, but she did not strangle her industries; she kept her people working. That action of the French government should be an object lesson to Canada and to all other countries in the world. It seems to me that the preferred position in which France finds herself to-day is due to the action taken at that time by the government. After reducing her debts, after refusing to deflate and to go back to the gold basis, France to-day is the second largest holder of gold and she is almost supreme in dictating the financial policies of the rest of the world. If that means anything, it means that in Canada we can do the same thing regardless of whether or not there is an international agreement.
I do not need to take up the time of the house in discussing the relationship of the amount of money in circulation to commodity price levels. I think it is generally recognized to-day that the commodity price level is determined by the amount of money in circulation. This afternoon the hon. member for Weyburn (Mr. Young) criticized severely the hon. member for Acadia (Mr. Gardiner) in connection with his subamendment. The hon. member stated that it is absolutely necessary to have gold in order to maintain stability of prices, but I would say to him that the value of gold is fluctuating from day to day. This is a recognized fact among world economists. A short time ago thirty-eight cents in gold was all that was necessary to maintain the United States on a gold basis; to-day it takes about eighty cents. The standard of measurement has simply been lengthened. Gold to-day is one of the most useless metals; gold hidden away and sealed in the vaults in New York is performing no useful function. We have got into the habit of worshipping gold, and until we get away from that habit and get on to a sounder basis, we cannot expect to have prosperity in Canada.
The hon. member for Weyburn overlooked another factor with which this subamendment proposes to deal, and that is the relationship between commodities and debts. Debts were contracted when money was at a low valuation and now that we have almost quadrupled the value of money we have to pay three or four times the amount borrowed. This applies equally to public and private debts. One

object of the subamendment is to bring about the return of a proper relationship between commodity values and debts, to bring about the relationship which existed at the time the debts were created. As a matter of fact, there is no other way of paying these debts; going on as we are going on to-day simply means cancellation. My hon. friend probably would throw up his hands in horror at the suggestion of a general cancellation of debts, but we are on the horns of a dilemma-we must either inflate and get back to higher commodity levels in order to pay our debts, or we must cancel many of our debts. There is no middle course; we must choose either the one or the other. May I be permitted to quote a recognized authority in these matters, the Royal Bank of Canada, one of the largest banks in Canada. Dealing with the depression, their monthly letter said:
The present depression is usually explained in terms of extravagance, overproduction, excessive tariff barriers, etc., but, speaking generally the controlling influence has been the mismanagement of money and credit.
Could anything be more striking, coming as it does from one of the largest banks in Canada?
I direct the attention of the house to the fact that we have in Canada to-day the largest amount of bank deposits we have ever had in the history of the country. The latest figures for February show that these deposits amount to SI,390,000,000, and the increase from January to February amounted to S22,000,000. In some quarters this fact is considered as evidence of stability and prosperity; as a matter of fact it means the very opposite, it is an indication of business stagnation. If there were good investments available in business, this money would soon find its way into those channels. The hon. member for Acadia dealt with this particular question, and it is one of the points upon which he was severely criticized by the hon. member for Weyburn. The hon. member for Acadia suggested that these deposits be taxed into circulation, but I think the hon. member for Weyburn had an entirely wrong impression of what was being aimed at. The hon. member for Acadia was suggesting that something must be done to get this money into circulation, to get it working. For instance, only a short time ago the province of Alberta had to pay nearly 7 per cent on a loan issue. Just imagine-a provincial government having to pay nearly 7 per cent interest; and I understand there were additional inducements in the way of tax exemptions and other guarantees of that kind. Ontario, the wealthiest province in Canada, had to pay 6)

The Budget-Mr. McDade
per cent interest on a loan recently floated. All this at a time when there is more money in the savings banks of Canada than ever before! Is it not reasonable to suggest that some governmental action should be taken, not to turn this money into speculative channels, as suggested by the hon. member for Weybum, but into investment channels in municipal and government bonds?
I have another suggestion to make. Supposing the government were to set a maximum interest rate to be charged by the banks? If that rate was a reasonably low one, the banks in turn would be forced to reimburse themselves by reducing the rate of interest paid on deposits. When the depositor found his interest rate cut down to li or 2 per cent, he would probably buy some good Ontario, Alberta or Saskatchewan bonds, or perhaps the federal government bonds. That is one of the important things which we have to face to-day; we need a lower rate of interest on government loans. However, the main object of the subamendment was to increase the money in circulation and thus stimulate business and cause the rise of the commodity price level. As the Minister of Trade and Commerce pointed out, a rise in prices means a corresponding decrease in debts, both public and private.
A short time ago the members of this house were treated to a very excellent address by a distinguished gentleman from the old country, Sir Josiah Stamp. Sir Josiah Stamp is not a mere theorist or student, he is one of the biggest business men in England, being a director of the Bank of England and of the London, Midland and Scottish Railway. Perhaps I could not pay him a higher tribute than to quote the words used by the Prime Minister in introducing Sir Josiah. The Prime Minister referred to him as the greatest and soundest mind dealing with world affairs ever known.


Edward James Young: What did he say about the
gold standard?


Milton Neil Campbell: I shall come to that in a moment. He predicted that England would not return to the gold standard; as a matter of fact, he suggested that England should reduce still further the value of her money. He said there would be no prosperity in England until they got back to the 1929 price level, and in order to get back to the 1929 price level there would have to be further inflation and a further reduction in the value of the pound. Sir Josdah did not attempt to tell us how to run our business in Canada, but his inference was strong. He said something to which this house and the people of Canada might well pay attention; the words of a gentleman who merits the praise applied to him by the Prime Minister should be taken seriously.
In conclusion, I should like to quote another authority, the monthly review issued by the Midland Bank of London, England. This is the most powerful bank in the world, and, dealing with the depression, this is what it says, in part:
Humanity is notoriously slow to learn by its own mistakes and inefficiency. It is easy to cry to heaven and denounce the slump as an act of God. But the old proverb still holds good, that heaven helps those who help themselves. A first task in self help is to devise a sure means of regulating the commodity price level and thus to avoid the repetition of a large part of the troubles we have brought upon ourselves.


Mr. G. M. McDADE (Northumberland):: May I join heartily in the congratulations extended to the Minister of Finance (Mr. Rhodes), on his elevation to this most important portfolio. The hon. gentleman has had a long and distinguished career in the public life of Canada. For a time he held the high position of Speaker of this assembly, and afterwards was Prime Minister of his native province of Nova Scotia, both of which offices he occupied in an eminently satisfactory manner.
The matter of paramount importance before this house for some time seems to have been the unemployment situation. May I be permitted to dwell briefly on some phases of the subject, particularly as it affects the province of New Brunswick and the county of Northumberland, the constituency I have the honour to represent in this house. We all appreciate the fact that the present depression is world-wide. Some of my good friends opposite, in the course of a discussion that took up about three weeks, seemed to lose sight of the fact that conditions in Canada are no exception to those that obtain in many other countries to-day. As a matter of fact, conditions are better in Canada than in other countries, due reasonably to the sound policies of this administration. I submit, therefore, that it is unfair and illogical to attach any blame to the present government for the existing depression and distress which we find generally in this country. It is, I repeat, a worldwide condition.
Coming particularly to the province of New Brunswick, I may say that there was expended under the 1931 regulations on a contributory basis, on unemployment relief works, the sum of $2,165,020. This, I submit, is a record of which we may be proud. We could not have
The Budget-Mr. McDade

carried on in New Brunswick if these expenditures had not been made. The following table of expenditures speaks for itself:
Municipal work. . . Provincial works, such as clearing land rebate in
stumpage	
Provincial highways. Trans-Canada. . . .
Total Federal share $ 439,600	$117,400 00
292,445	146.222	501.030,175	412,070	00148,000	74,000	00$1,910,220	$749,692 50
Works of strictly federal character were carried on in New Brunswick under the unemployment relief to the value of $247,800, on public works, and $7,000 in the Department of Agriculture, making a total of federal moneys expended in New Brunswick of $1,004,492.50, aside from direct relief, purchase of ties and ordinary federal public works expended and not coming under the provisions of the unemployment relief fund. In the county of Northumberland, under the 1931 regulations, the following expenditures were made:
Chatham	
Newcastle	
Northumberland county
highways	
Bartibogue river dredging. .		
Bay du Yin	
Burnt Church	
Total	Federal share
$ 45,000	$15,000
45,000	15,000
150,000	60,000
5,000	5,000
4,500	4,500
15,000	15,000
Also $5,000 in 1932 estimated.
Chatham wharf extension $10,000 voted but not yet spent.
* Oak Point wharf, $1,000.
Rebate in stumpage $120,000 for all lumber operations, $60,000.
This is not wholly confined to Northumberland county.
In addition, the purchase of ties in Northumberland under the 1931 regulations-and here I wish to thank the Minister of Railways (Mr. Manion) for his cooperation in using his good offices with the president of the Canadian National railway system-amounted to $85,000, while about $100,000 was expended by the federal govermnent for strictly federal works, not coming under the unemployment fund.
So far as federal expenditures under the unemployment relief fund in the county of Northumberland are iconcemed, no politics whatever was practised by the hon. member who happens to occupy that seat at the present time. As a matter of fact some of my good friends, particularly on the north side of the Miramichi river, saw fit to call a meeting and pass a vote of censure upon the member because he did not see fit to interfere in the handling of unemployment expenditures.

May I foe permitted to say a word respecting the Canadian National Railways? I wish to congratulate the Minister of Railways (Mr. Manion) upon the very substantial reduction that has already 'been effected in operating costs. I am sorry that I am not in agreement with the hon. member for Brome-Missisquoi (Mr. Pickel) in his statement that the Canadian National railway system should be sold to the Canadian Pacific Railway Company. We from the province of New Brunswick would be opposed to such a proposal unless and until we receive the report of the Duff commission, which has made a careful investigation into the various ramifications of the railway situation and which will be qualified to submit a fair and impartial report. At the same time I wish to say a word for the Canadian National Steamships. I have it on reasonably high authority that next year there will be a sufficient operating profit to discharge not only the operating expenses, but also the interest on the debt incurred. While I am on the subject, I should like to urge upon the Minister of Railways the desirability of including in the small special committee-the executive committee of management-one of the directors from the maritime provinces. We in the maritimes are great admirers of the Minister of Railways, and we feel that as the Intercolonial was the pioneer part of the Canadian National railway system, and particularly as we have such important questions affecting the great ports of St. John and Halifax, the minister and the management might reasonably include in this subcommittee a representative from the maritime provinces.
A matter of outstanding moment to-day in world politics, particularly in empire politics, is the approaching economic conference. I wish to congratulate the distinguished Prime Minister of Canada (Mr. Bennett) and his colleagues on bringing this important economic conference to the capital city. May I humbly suggest that we approach the conference in a quid pro quo attitude; that we be prepared to give reasonable concessions in exchange for preferences in the mother country. Of especial interest to us on the north shore of New Brunswick is the policy of the administration to endeavour to secure preference for Canadian lumber. Lumber on the north shore of our province is our basic industry. It is indeed regrettable that private enterprise on the Miramichi is not doing more. The once great activity of lumbering operations which characterized this river some twelve or fifteen years ago is now practically negligible. Last year only 23,000,000 feet were cut, including a large number of ties by the Canadian National, large quantities of lumber supplied

The Budget-Mr. Deslauriers
to the St. John, harbour reconstruction, and valuable orders from the Canadian National Railways. This shows that private enterprise is not acting reasonably in the present economic crisis. Canada's timber supply is estimated to be 424,637,000,000 feet board measure of raw material and 1,121,933,000 cords of small material such as pulpwood, fuel wood, posts and so forth. Fifty-five species of wood occur; 32 hardwoods and 23 softwoods. Forest wealth, including accessible raw materials, and pulpwood and capital invested in forestry operations, is estimated to be $1,866,000,000. Annual production from the forests is valued at $500,000,000. Exports of wood, wood products and paper in 1930-31 amounted to $230,514,474.
I quote those figures, Mr. Speaker, to afford some indication of what a preference for Canadian lumber in the great market of the mother country would mean to this industry. In discussing this matter may I be permitted to observe that crown land timber leases in the province of New Brunswick will expire as of August 31, 1933. This is a very important phase of the question and it is to be hoped that the government of New Brunswick will give fearless, honest and intelligent attention to the renewal of those licences. Our democracy is such that if the American company now holding practically a monopoly of the leases does not see fit to operate the crown lands, those lands should be taken away from them and given to bona fide operators who will go ahead and1 operate.
I submit, Mr. Speaker, that thoughtful and intelligent people are prepared to support this administration upon its achievements. Great problems have been attacked. A favourable trade balance has been established. New trade treaties have been negotiated, vigorous action has been taken to stimulate agriculture. The railway problem is being investigated by a board of experts. Unemployment has been grappled with and to a great extent eliminated. Tariff changes have already brought into this country many new industries. A report on the great harbours and seaports of Canada has been submitted by an eminent British authority. Another eminent authority has reported relative to trading in grain futures. The port facilities of St. John, which were destroyed by fire, have been rebuilt and are now bigger and better than ever. Civil service problems and radio are receiving careful study. Public men charged with irregularities have been forced to face investigation. Without impairing the efficiency of the service, the most drastic economy has been put into practice, and above all, the budget has been balanced for the ensuing year.
In spite of all this there is considerable misery and suffering in the country. These are dark days for Canada and the world, but all is not lost; we still have God. When those sacred and fundamental principles of Christianity have been attacked it is well that we should accept the challenge and effectively combat it. We have in the distinguished and illustrious Prime Minister of this country a man standing firmly by those Christian principles. Can there be any doubt, Mir. Speaker, of our ultimate success and triumph? The times always produce the man, and my native province of New Brunswick has had the honour of giving to Canada, to the empire and to the world a noble character, a brilliant leader and a self-renunciating statesman whose policies and whose principles will 'bring Canada to immeasurable prosperity and restore happiness to our great Canadian people.


Mr. HERMAS DESLAURIERS (St. Mary's) (Translation):: Mr. Speaker, I wish, at the outset, to congratulate the hon. Minister of Finance (Mr. Rhodes), on his clear and methodical statement on the budget. However, owing to the necessarily incomplete nature of his statement, it is true to say that the discussion of it is difficult. Not having noted any tariff changes and being aware that the right hon. Prime Minister (Mr. Bennett) is convinced that Providence alone can solve our problems, and that he reposes no faith in the parliament of Canada to assist him-basing such a statement on the Act, No. 58, by which he assumes all executive and legislative powers, I therefore contend that this budget is certainly incomplete and brought down simply to follow the sessional custom.
Although deprived of our prerogatives, as long as the representatives of the people are allowed to meet in this chamber, under your presidency, sir, we shall continue to fulfil our duty, at least by making suggestions which we deem in the people's interests, since our cooperation is no more needed; and that is the course I intend to follow.
It is true that our financial position is seriously affected, but nevertheless, I do not think that our condition is so desperate as to prompt the hon. member for Acadia (Mr. Gardiner) to suggest to the Prime Minister to seize the savings of the people, savings which were accumulated, thanks to their thrift and sacrifices. The government can gradually bring about great reforms in the administration which will surely foster an appreciable degree of prosperity.
The Budget-Mr. Deslauriers


Hermas Deslauriers: The
Treaty of Versailles has not succeeded in establishing peace among nations. President Wilson who first conceived the idea of founding a league of nations could not even get the United States to join. Ever since the outset of this institution the United States always opposed its proposals and never will they consent to pledge their responsibilty.
In 1923, when the project of mutual assurance came up, so as to give the necessary assistance to a nation attacked, a number of the great powers refused to endorse it. In 1925, a new attempt was made with the protocol of nations. This again was a failure. In 1925-26, the Locarno treaty was signed, the work of Mr. Briand, by which all nations were to pledge themselves to form a "bloc" against countries declaring war. Again this was a failure. Then follows the establishment of a tribunal at The Hague, to arbitrate disputes between nations. Again this was useless and always for the same reason because this tribunal had no power to enforce its decisions. The treaty of Versailles was amended, the Dawes' plan is adopted, then comes Young's plan; delays are granted for the payments of war reparations. A short while ago, Germany declared that she was unable to meet her payments; to-morrow she will clearly refuse to do so. We will then witness a number of nations anxious to have their loans repaid previous to war reparations, side with her. This is, in a nutshell to what the League of Nations amounts.
Can one possibly believe that "France has no cause to be fully armed and maintain friendly relations with the small European nations which she has freed from the German, Austrian or Hungarian yoke, and was also instrumental in having restored to them their territories, so unjustly cut up and tyrannically exploited. After The Hague tribunal, we have had the Briand-Kellogg pact signed by fifty-two nations and which can have no practical result when a well armed country goes to war. The fact is that a number of first class powers have not yet signed this treaty. All these institutions had a very laudable and friendly object in view. Their intentions were the very best. Nevertheless, they failed. To reach the aim which the League had in view, all nations should have joined it and it should have been entrusted with the power to carry out its decrees and, moreover, all nations forming part of the league have given evidence of their good faith. That is Mr. Tardieu's contentions.
After the failures which I have just enumerated, and without the conditions that I mentioned above, we are led to believe that all plans of disarmament so as to promote peace among nations, are purely utopian.
If the procedure of the League of Nations is closely studied, one easily discovers the lack of sincerity and good faith shown by some of its members. The United States in-
The Budget-Mr. Deslauriers

vented this sovereign remedy and, for twelve years, have fought shy of it. Are they sincere?
It is well known that Great Britain carries on trade with Russia, thus encouraging forced labour to compete with free labour and this during a crisis. It thus fosters a system of revolutionary government that all civilized nations condemn, precisely when this system has most need of this help to succeed. Did not the League of Nations itself approve of loans to this same Soviet republic? Yet, does not article 23 of the League of Nations oblige all those who signed the pact to endeavour to obtain satisfactory and human conditions of labour for men, women and children in all countries, and to resist forced labour? Is their attitude rational? Would not its duty be to leave to this dangerous power all its over production in order that its own citizens should fully benefit of this abundance?
To-day when conferences on disarmament are held, arms and machinery to manufacture them are being sold to Russia.
Faced with this series of uninterrupted failures of the League of Nations, including the Manchuria fiasco; bearing in mind the inconsistency of its members who pledge themselves [DOT] one day to follow a very determined line of action, and who, the very next day, do the contrary, are we not allowed to share the views of Mr. Eric Loow-a minister in the South African Union government -which were transmitted by the correspondent of the Canadian Press, in New York, in June, 1931. Mr. Loow stated that he was of the opinion that his country should resign from the League of Nations, adding that the latter had sadly failed in its negotiations regarding the conflict in Manchuria, in 19311932, as it would similarly fail in the future to settle any conflict in which the interests of a powerful nation were at stake; that the clear political tendencies of certain recent decisions of the international court had shocked and disgusted the most enthusiastic partisans of the league; that his observations, as head of the South African delegation to the meeting of the league in 1929, had convinced him that the league served as a lobby for intrigues, where most of the important questions are settled behind the scene, by way of underhand dealing, among the various great powers.
It is a known fact, in well informed circles, chat England wishes to do away with land armies, submarines and air forces, but that she will never consent to abandon her cruisers; that Italy intends to keep her land armies and the necessary navy to rule the 
Mediterranean sea. Germany claims equality of armament and has arranged to have her war material manufactured secretly in Holland, Scandinavia and Switzerland; Japan agrees with any peaceful movement, providing she is allowed to put the Chinese lords where they belong, through the mouth-piece of her guns; and the United States are bent on the disarmament of other nations. So that we are faced with nations more or less sincere, most of whom through interest, envy or simply stupidity seek to disarm France.
While Germany was taking part in the deliberations at Geneva-in the interest of world peace-on the anniversary of the Versailles treaty, June 28, 1931, the Reischwehr unveiled on the manoeuvring fields of Dobaritz, near Berlin, an enormous map of the world made of stone, over which the German Eagle soared, and bearing the following inscription: "German soil in the hands of foreigners: Alsace-Lorraine, the Polish Pass, Upper-Silesia, Schleswig-Holstein, the Camer-ouns, the Togo, German South East and South West Africa." One need not be a prophet to foresee, through the numerous conferences on disarmament, that many a bloody battle will be fought before Germany reconquers all these territories. Going back a few years, we find Italy refusing the intervention of the League of Nations, at Corfu; then come the republics of South America settling their difficulties by the intermediary of the United States after having bluntly refused the good office of the League of Nations; it was powerless to prevent war between Russia and Poland; its influence was nil in the conflict between Italy and Jugo-Slavia; d'Annunzio laughed at it. Its intervention was limited to humbly requesting parties concerned to desist, it might just as well have requested lions to trim their claws, because, without the power to impose its will, it felt powerless.
Ambition, interest, hatred and vengeance are sentiments which are intimately linked with mankind and will survive, as long as nations exist; conferences, congresses, tribunals will always meet on their path these indestructible obstacles which render world peace impossible.
When we have witnessed while war was raging, Thyrsen, the Rothchilds, the Krupps at work, all moved by the same sordid feelings when their brothers were dying by the millions; it is but right to point out these despicable individuals concocting their diplomatic intrigues in lobbies, hidden in large hotels, and spoiling the plans devised for the welfare of those concerned. I was most amazed in reading in the Senate Hansard of March 10, 1932, a statement of a former dele-

The Budget-Mr. Deslauriers
gate to the League of Nations, prophesying that in six years we would witness a considerable reduction in armaments. He should have said in ninety-nine years: the danger of being wrong would have been less. And I am still wondering on what he bases his prophecy?
Therefore, backed by facts and common sense, while acknowledging the honesty, hon-ourability, earnestness and good faith of our delegates, I state that it is not less true, that the part played by the League of Nations-apart from questions of a sociological order, which each nation can settle at home- amounts to introducing resolutions which have no force, forming committees, sub-committees and super-committees, commissions, sub-commissions and super-commissions maintaining a staff of secretaries, assistant secretaries, private or public, stenographers type-writers, from class A to C, translators in as many languages as there are nationalities; having printed similarly in as many languages, documents the last of which has no more value than the first and is hardly worth the paper on which they are printed. Within the last twelve years, a bevy of young aristocrats associated with a few old parliamentarians, has sprung up in Europe, at a cost of $300,000 per year representing our contribution in an effort to suppress common sense and substituting in its place perpetual motion. This joke, at Geneva, has already lasted too long, and it behooves the government to cease participating in the League of Nations; such expenses, should no longer be defrayed by taxes levied on the Canadian people.
It seems that the more the question of armament crops up, the more this cancer spreads in all spheres; we even come across traces of it in the policy of this government. For instance, apart from the new taxation, the salaries of all civil servants have been cut ten per cent, except those who bear arms in the country's defence in peace time. 139 officers receive a salary from $4,000 to S4,900 ;	30
receive a salary from $6,000 to $6,900; mostly military bureaucrats, apart from an army of a few hundred men detailed to escort the right hon. member for Argenteuil (Sir George Perley), and the hon. Solicitor General (Mr. Dupre) when they leave to attend the Disarmament conference, Oh, irony of fate! on behalf of peace and security. These defensors of Parliament Hill are exempt from the ten per cent cut. This exemption is unfair to the other civil servants and meets with our disapproval.


Mr. SEGUIN (Translation):: Hear, hear 1


Hermas Deslauriers: A
third point to which I want to draw the attention of the government and make some suggestions, is the amendment to the Customs Act enacted on June 11, 1928, in connection with alcohol traffic between Canada and the United States. The government of that day wishing to keep up good relations with our neighbours, amended the Customs Act, chapter 16 George V of the Revised Statutes, so as to facilitate to the United States the task of enforcing their regulations.
From that date the Canadian government kept its word as regards fits preventive service staff, paid from the treasury funds, pursuant to *the act and to the benefit of our neighbours. The liquor industry, in Canada, fell short by about $20,000,000, on which we lost the excise tax; in return, our neighbours, to repay our kindness, thought proper to close their markets to practically all our products, by erecting a prohibitive tariff wall. Liquor traffic is recognized as legal in Canada; it is carried on under the regulations of our governments, and cannot be looked upon as an immoral trade; we therefore should not hesitate to cancel this act which makes Canada play a deceitful part. I submit, sir, that the amendment to the Customs Act, chapter 16 George V, Article 151 and the following in our Revised Statutes should be cancelled, leaving to our neighbours the full task of enforcing their regulations within the limits of their territory so far as spirits are concerned, just as the}' do in regard to foreign products which cross their border.
After all, this change is only right, because we should not tax the Canadians, in these hard times, to please others. I feel convinced that should my suggestions be adopted, the federal treasury would be the richer and the country would greatly benefit thereby.
Mr. J.-E. TETREAULT (Shefford) (Translation) :	Mr. Speaker, I feel greatly awed in
rising for the first time, in the house, as the representative of the county of Shefford. I avail myself of this opportunity, to thank my constituents for the honour they bestowed upon me by electing me to represent this beautiful county.
Mr. DUPUIS (Translation); Hear, heart


Mr. TETREAULT (Translation):: I say:
This beautiful county. Indeed, the county of Shefford has been highly honoured in the past, thanks to the fame of its renowned politicians and distinguished speakers who represented the county in the parliament of
The Budget-Mr. Tetreault

Canada. To mention but a few names, I shall recall to your memory those of the Hon. Mr. Huntington and the Hon. Mr. Boivin who were its representatives, the former from 1867 to 1878, and the latter from 1911 to 1925.
These two men proved themselves worthy of the two great races of this country and were numbered among the leaders of their day.
Being only a newcomer, sir, I do not harbour the illusion that I represent the county with as much authority as did these two hon. gentlemen. However, if devotion to duty and work mean anything, my constituents will know that they did not bestow this trust in vain and the future will bear evidence that I endeavoured to deserve it.
I am pleased to state, at the outset of my remarks, that if I have been elected, it is because we had as leader of our party one of the greatest statesmen that Canada has so far produced, and that the policy he advocates could, alone, extricate our country from the old beaten path where the previous regime had led it.
My friends opposite have not yet realized this, but the future will prove to them that there was but one effective policy, and that was the policy which gives protection to our industries, our trade and our farm products.
The right hon. Prime Minister (Mr. Bennett), was placed in power, thanks to his motto of ''Canada First"-our hon. friends opposite reminded him of it often enough. He gave proof at the Imperial conference, that it was not an empty election cry.
The Social Labour party which was for a time at the head of the most Conservative country in the world, lost for a moment the sense of British traditions, it failed, as communism is failing in another Conservative country: Russia.
England, however, needed a vigorous Conservative impulse to make her realize her situation and it came, for the first time, from the outside. It was the right hon. Prime Minister of Canada, who, at the Imperial conference, was to write down the historical page of this impulse.
Mr. Speaker, as I wish to be understood by all the members of this house, I beg of my French speaking colleagues to allow me to continue my remarks in English.
Mr. Speaker, I claim the indulgence of hon. members as I -rise to make my maiden speech in this house. Although it was not my intention to speak at this time, I feel it my duty to make a few remarks concerning the attitude of some hon. members on the other side of the house. I have listened attentively to the debate, and I wonder if any hon. member

opposite has said one word in favour of the government. Of course it does not surprise me that they should not do so, because I know the kind of cooperation we receive in the province of Quebec. Hon. members who had the opportunity to listen to Liberal speeches during the last provincial election campaign will readily appreciate the type of cooperation the Prime Minister may expect to receive from hon. members opposite. We have heard them criticize everything the present government has done. Why can they not be sincere and tell the truth to the people of Canada? I should like to tell hon. members what this government has done for my own town of Granby. Before going further may I say that we have had the cooperation of every citizen in that town, regardless of -political views. The people have worked together when the interests of our town were at stake.
Mr. ST-PERE: Nobody denies that.


J.-Eugène Tétreault: Thanks to the tariff changes, we have attracted four new industries to our town. I am proud to say that we are the only town with a population of
10,000	which has succeeded in making such progress, and our success was partly due to the cooperation of the board of trade and the Southern Canada Power Company.
Mr. ST-PERE: They do not charge too much for their gas?


J.-Eugène Tétreault: No more than they do in Montreal. If hon. members opposite do not appreciate the efforts this government is making, I am in a position to prove that in the county of Shefford we have some intelligent citizens who do appreciate them.
With your permission Mr. Speaker I should like to quote from a few letters I have received from people in my constituency since this government took office. In these letters are emphasized the benefits received from the policy of protection adopted by the leader of this government.
The first letter is dated September 27, 1930, and reads as follows:
Dear Mr. Tetreault,
1 have your -letter of the 20th instant with reference to the new change in tariff.
I am thoroughly convinced that the present government has made a wonderful move which will result in far better business conditions in the Dominion of Canada. There are undoubtedly certain items which will have to be readjusted in the carte blanche program they have put through, but so far as our particular industry is concerned, it is just what we needed.
You might be interested to know that in view of this tariff, we are planning to put up an addition which will double our output. This will not only give work to contractors and

The Budget-Mr. Tetreault
labourers in the building of our plant, but will also enable me to employ considerably more hands in the near future.
This past week I have been visiting the retail trade in western Ontario, and find them, in every instance, quite pleased with the fact that we are getting an additional protection on our merchandise. I have convinced them that even though there may be a slight increase in the cost of our rayon yarns in the near future, I do not intend to raise iqy prices, and that I am in hopes with the added protection to be able to decrease my prices in the near future.
On the whole, I think the present government deserves a great deal of credit, and it is through the cooperation of such firms as ours who are not raising their prices, and who will decrease prices if at all possible, that their policy will succeed-
For your further information, you will no doubt be pleased to note that due to the protection given the corset manufacturers, each of them is looking for an increased business and placed orders with us this past week far in excess of yardages ever procured before.
With kindest regards, and my best wishes for the success of the present policy, I am Yours very truly,
Carl Stohn of Canada, Limited.
Then I have the following letter dated April 25, 1931:
Dear Mr. Tetreault:
I have your letter of the 22nd with reference to the improvement on our plant since last September.
For your information, beg to advise that immediately upon receipt of the news that a new tariff had been brought into effect on last September, the writer called a directors' meeting of our firm, and within ten days' time a contract was let for the building of an additional 27,000 square feet to our present plant. On October the 10th the contractors started to break ground in preparation of the starting of the building. Orders for additional machinery etc., were immediately placed and up to the present writing we have expended approximately $200,000 in building and machinery. Needless to say, our payroll has increased considerably and we are now employing approximately 160 hands, whereas last September, we were employing 92 hands. Our payroll has increased approximately 35 per cent in dollars and cents.
It is very interesting indeed to note our increased sales in spite of the general poor conditions throughout the country. Up to the end of March, our sales increased approximately 37 per cent over and above the first quarter of 1930, and we might say that 1930 was the best year in our business. We can definitely trace orders which have come to us which would have been placed in the United States had it not been for the increased tariff.
Thanking you for your kind interest, we beg to remain,
Yours very truly,
Carl Stohn of Canada, Limited.
On September 18, 1930, I received this letter from the Granby Manufacturing Company Limited:
Dear Eugene:
Mr. Carl Stohn was in our shop yesterday and we discussed the new tariff. He states that the new duty on textile will be of the greatest assistance to them. In fact he went so far as to state that they intended to build a new factory to look after the increased business-
I thought you might be pleased to hear the above and might have an opportunity to give Mr. Bennett at least one example of the results of his Canada-first policy.
Yours truly,
N. E. Clouston.
On June 4, 1931, the Atlas Plywood Corporation, Waterloo, Quebec, wrote me:
Dear Sir,
We received yours of the 3rd with list of new tariff enclosed which certainly comes pretty near to what we were asking for.
We wish to thank you sincerely for the part you took in this matter for us and for all the trouble you have been to. Can promise you that when the occasion arises again you can rely on us in every way.
On June 8, 1931, the manager of the corporation wrote me this second letter:
Dear Sir,
Thanks very much for the booklet you sent me. I am forwarding this on to our Boston office and am also enclosing your letter and am telling them that you, personally, are the one who assisted us in getting what we asked for.
And again on February 24 of this year the Atlas corporation wrote me the following letter:
Dear Sir,
Replying to yours of the 17th instant in reference to the new tariff of veneers, would say that the change has certainly been a benefit to our company.
In 1931 we had from 45 to 60 employees and paid per month $3,539.40 and made shipments of 615,739 feet per month, while in 1932 we have had continually from 65 to 70 employees, paying $4,117.17 per month and shipping 910.695 feet per month, so by these figures you can see we have benefited by the tariff.
If there is any further information that we can give you please let us know, and in the meantime we wish to thank you for the many courtesies you have .shown us since you have been in Ottawa.
On May 21, 1931, the Macdonald Metal Products Company Limited, Waterloo, Quebec, wrote me this letter:
Dear Mr. Tetreault,
Your letter of May 19th has been received, and we certainly appreciate the activity which you are taking in regard to our products.
You will be pleased to learn that our factory is running on practically the same basis as it was this time last year, due entirely in our estimation to the department's increase of tariff on nickel-plated goods, particularly our line of nickel-plated cake turners, mixing spoons, and other kitchen utensils. The effect of last fall's increase in this tariff item has made it possible for us to manufacture just as many articles in
The Budget-Mr. Tetreault

this poor year as we did last year, and has not increased the cost of these articles to the consumer one cent.
They wrote me again under date of June 3, 1931:
Dear Mr. Tetreault,
We are quite pleased to note in the various changes in the budget that the item dolls and toys of all kinds has been raised from 30 per cent to 40 per cent duty. We believe that this is going to make a tremendous difference in our business here, and we wish to thank you at this time very much for the effort that you have put in at Ottawa on our behalf. We believe also that this 10 per cent increase will greatly discourage the importation of German cap pistols. A few of the items that we import through necessity have been increased in cost on account of the budget, but we are quite content with these increases as no doubt they are designed to help other manufacturers.
That is what we call cooperation.
You will be quite pleased, I am sure, to know that our sales to date this year are practically the same as they were last year, and also that we attribute this to the increase of the duty put through last fall on nickel-plated goods. Also in this connection, we would advise that instead of our prices going up on account of the increased duty there have been a number of changes downward.
Mr. ST-PERE (Translation): This does not contain letters from unemployed?


J.-Eugène Tétreault: There
are no unemployed in my county.
Mr. ST-PERE (Translation): Lucky fellow ! This is not due to the government you support.


J.-Eugène Tétreault: Neither is it due to the opposition.
On February 9, 1932, I received another letter from the Macdonald Metal Products Company, Limited, of which I will give the house the concluding paragraph:
We -wish to have you convey to the Prime Minister our thanks for the various protective changes made last year, and advise him that we operated about one-third more time last year than wre did in 1930, and that this year we expect to operate practically to full capacity throughout the year, which should mean about a full 50 per cent better than 1930 operations.
The next letter I am going to read is not from a manufacturer, but from a firm engaged in growing mushrooms. They say.
Dear Sir:
We have just received a circular from the horticultural council at Ottawa informing us that the department had placed a minimum value of 30 cents per pound on mushrooms for import. In consequence this will fix this matter up in a thoroughly satisfactory manner for ourselves. as the dump duty applies on anything brought in below this value.
[Mr. Tetreault.l
We wish to thank you for the trouble you have taken for us in this matter, and will endeavour to do whatever we can for you at any time.
Yours very truly,
Slack Brothers,
The next letter is in French. This too is not from a big manufacturing firm, but from a man engaged in making charcoal:
Flodden, Que., June 5, 1931. Mr. J. E. Tetrault, M.P.,
Ottawa, Ont.
Dear Sir,-[DOT]
My most sincere thanks and congratulations on your success as regards the tariff on charcoal. The new tariff will have as an immediate result the reopening of factories and the building of new plants which will employ 2,500 men.
My employees as well as the farmers who sell me wood join with me in expressing our thanks and congratulations.
Yours gratefully,
Ovila Pratte.
I have received from another newly established industry, a letter which demonstrates that these new companies recognize that they are receiving cooperation from this government. It reads:
We have your letter of March 16th, enclosing a copy of the commissioner's letter of March 14th, relative to William Wagner.
Will you please express to Mr. Joliffe our sincere appreciation of his cooperation in allowing us to bring in the different helpers that we required from our other mill.
Mr. J. W. Stark and the writer both feel that there has been a real understanding of our problems, and the promptness with which our requests were granted has been most gratifying.
It is very apparent that our needs have been most promptly and clearly placed before the commissioner, and it is therefore again a great pleasure to thank you most heartily for your service in looking after us so thoroughly and well.
An hon. MEMBER (Translation): Is that the end?


J.-Eugène Tétreault: I have some more.
Mr. ST-PERE (Translation): Read them.


Mr. DUPUIS:: Has the hon. member received a letter complimenting the government upon the establishment of a company to make soap out of butter? The price of butter at the present time is so low that it is being used in the hon. member's district to make soap.


J.-Eugène Tétreault: If I receive such a letter I shall be glad to let the hon. member know. Hon. members opposite have been criticizing the government but they do not mention the fact that new industries have been established in their own constituencies. I should like to read an article which appeared

in La Presse of April 2, 1932. Hon. members opposite know that that is not a Conservative paper.
Mr. ST-PERE: Very independent.


J.-Eugène Tétreault: As my hon. friend will be some time.
Mr. ST-PERE: I mean that La Presse is independent.


J.-Eugène Tétreault: The article is as follows:
Normal Times Return
The Dominion Statistics of Trade and Commerce show a favourable balance of $15,000,000 for the period of the eleven months of the fiscal year just ended. It is a sign of the times of which we can rejoice, since it indicates a movement towards the reestablishment of the economic equilibrium in the Dominion. Our exports are in excess of our imports, that is we sell more than we buy. We consume still more home products, and this is all to the advantage of Canadian producers, as well as to that of the consumers themselves.
These are not the views expressed by members on the opposition side.
A country which is self-sufficing, which produces at home what it requires, instead of purchasing it abroad, is economically independent and its political life is less subject to changes.
A recent report of Mr. Frederick Hudd, Canadian Trade Commissioner in New York, gives interesting facts on trade dealings between Canada and the United States. Although, he states, the United States exports to Canada and the imports of Canada from the United states have shown a large decrease, in volume as well as in value, the largest decrease is found in United States exports. The latter total $395,647,609 in 1931, compared to $659,093,588 in 1930, therefore a decrease of $269,296,780 or 39-9 per cent. On the other hand, the Canadian imports from the United States amounted to $266,296,780 compared with $402,350,280 in 1930, a decrease of $136,053,509 or 33*81 per cent. Briefly, the unfavourable balance of trade of Canada with the United States totalled $139,350,821, in 1931, instead of $256,743,308. as in 1930.
Mr. Hudd points out a few groups of products on which the variations of Canadian-American international trade was more marked. As regards agricultural products, the value of Canadian corn exports amounted to $1,181,829 compared with $4,179,489, in 1930, and that of raw cotton was $7,247,434, instead of $13,051,040. As to the group of mineral products, the value of the U nited States exports of bituminous coal to Canada came to $37,624,093 compared to $49,981,697 in 1930. Crude oil and gasoline as well as manufactured metal products still show a greater decrease. The same can be said of United States imports of cheese, cattle hides, furs, linseed, unbleached sulphite paste, newspaper, non-eoncentrated copper, lead ore and lead matts.
However, the imports of bleached sulphite paste and concentrated cupriferous articles have greatly increased.
As a whole, our trade balance with the neighbouring republic tends to improve, while our trade with Great Britain, Australia, New 41761-135
18, 1932	2145
The Budget-Mr. Tetreault
Zealand and the other countries of the Empire give rise to great promises. There are encouraging prospects which portend to normal economic conditions for the future and therefore the end of the present crisis in a still nearer future.
My hon. friends will note that it is La Presse which makes this statement.
If hon. members opposite do not believe that the government is taking the proper means to solve the great problems facing this country, they can find the proof in the statement which appeared in La Presse.
I have mentioned what this government has done for industry and trade, and I should like now to draw the attention of all the government members to the situation confronting our farmers. The exact position in which the farmers of this country now find themselves may not be realized, but they know that the government is ready to cooperate to the fullest extent with the provincial governments in order to improve their position. I submit that the Quebec government, with its surplus dating back many years, should come to the rescue of the farmers of that province. The system of farm loans has been found to be nearly useless as far as Quebec is concerned, as only fourteen per cent of the loans applied for have been granted. It is not fair to help only fourteen per cent of the farmers and let the rest starve. If I am to be allowed to make a suggestion to the farm loan board, it would be that changes be made at once which would enable the farmers to obtain the amounts they urgently require. Hon. members opposite have been criticizing the government for not properly taking care of the farmer, and we should all work together, provincially and federally, to try to relieve the situation of agriculture. As things are going just now, conditions will be bad for the farmers this fall and some plan should be evolved to give required assistance to the farmers of Quebec and the other provinces.
I should like now to refer to a question of mine which appeared on the order paper for February 15 concerning the number of married women in the service of the government. It was a great surprise to me to learn that seventy-four of these women were not living with their husbands. I believe that the cause of this is that they have a position which enables them to be independent. I have received many letters from married women who protest against the employment of other married women who are not living with their husbands. I should not like all married women to believe that I am an enemy of women because I have a wife of my own who is certainly my best friend. However, in

The Budget-Mr. Arsenault

times of depression we certainly should give preference to the married man who has a wife and family to support. The government should investigate the matter, and if there are any cases where the father of a family could be employed instead of some married woman who is not the sole support of a family, then let such a man be employed.
Since I have a few minutes more I want to read now an article from the Canadian Textile Journal, with reference to Manhattan Mills Limited:
Manhattan Mills Ltd. Establish Rayon Weaving Plant at Granby
144 Loom Plant to be Brought from Taunton,
Mass. New Building to be Erected at Once
Another new textile industry for Canada was announced the latter part of March, The Manhattan Mills Limited, manufacturers of rayon and silk dress materials.
They have decided to locate in Granby, Que., where a new factory, 70 ft. x 240 ft. one storey brick and cement construction, will be built at once and it is hoped to complete the building within two months.
The new company starts off under unusually strong conditions. Mr. Harry Altman who will assume personal direction of the new company is well knovm as being thoroughly capable in this line having many years of practical experience in making fine dress goods. Their selling organization in Canada is already well established as the Manhattan Silk and Woollens Limited, of Montreal and Toronto, who have achieved success as wholesalers and jobbers in this line, are merging their interest with the new company.	.
The coming of this company to Canada is different from most companies in that instead of this being a branch of an American firm, in this case the entire factory consisting of 144 looms and other necessary complementing machinery will be moved entirely to Granby from Taunton, Mass., where it has been operating.
Textile and Industrial Centre
Granby was selected as the location for the new factory after investigating a great many sites, and should prove a happy choice, as this city has become well known as an exceptionally fine manufacturing city, as the many diversified industries successfully operating there bear witness. In the textile trades in Granby are, The Granby Elastic Web Co. Limited, The Esmond Mills Inc., Carl Stohn of Canada Limited. The Nordic Hosiery Limited, Stark Bros. Ribbon Corp. of Canada, while other large industries outside of the textile group located in Granby are, The Miner Rubber Co. Limited, The Imperial Tobacco Co. Limited, The Stedfast Rubber Co., Giddings Limited, reed and rattan furniture, The Meyer Thomas Co. Limited, box manufacturers, Granby Last Company. The Granby Manufacturing Co. Limited, makers of celluloid tees and novelties, United Maple Products Limited, Barre & Charron. interior woodwork, Kent Lumber Co., Albert Morin Mattress Factory, James Topp Cigar Co., and many other smaller industries.
Several of the above factories outside of the textile group use large quantities of textiles,
[Mr. 'KtreaultJ
such as the Miner Rubber Co. Limited, Giddings Limited, Stedfast Rubber Co. and others.
Work on transferring the Manhattan mills to Granby will be rushed with all possible speed and it is hoped to have this factory ready for operation within three months.
Such a record was made when the Stark Bros. Ribbon Corp. opened in Granby late last fall, as they were delivering ribbon three months after they decided to open a factory in Granby.
The Manhattan mills expect to employ about 150 people when they commence operations.
Before resuming my seat, I should like to assure hon. members that we from Quebec are proud to have in that province a large number of English speaking people. In my own constituency we have about twenty per cent English speaking, and in the town of Granby the two races are getting along wonderfully.
Mr. St-PERE: We are getting along very well.


J.-Eugène Tétreault: In my constituency
French Canadians and English Canadians are working hand in hand, and it is only by means of such cooperation that we can hope to build up this beloved Canada of ours.


Mr. TELESPHORE ARSENAULT (Kent, N.B.):: In rising to say a few words on the question before the house, I am aware of the difficult task that faces a new member when, from a sense of duty towards those whom he represents, he undertakes for the first time to address himself to his colleagues in the House of Commons, many of whom have had many years of parliamentary experience. Coming from a county where the majority of the population are of French descent, I think it is proper-and I believe the house will agree with me-that I should express myself in the beautiful language with which I am more familiar.
Mr. ST-PERE (Translation): Hear, hear.


Telesphore Arsenault: Mr. Speaker, I wish to extend my sincerest congratulations to the hon. Minister of Finance (Mr. Rhodes), not only on the high office he so worthily fills today, but also for his clear and concise statement on the economic situation of Canada which he has so well explained in the budget, and which lucidly defines our revenues, liabilities and expenditures. Speaking on behalf of the citizens of Kent county, who have entrusted me with a mandate' in this parliament, I also wish to add my token to the great mark of confidence of which the right hon. Prime Minister (Mr. Bennett) is at present the object, for the courage, ability and earnestness he displays in the great crisis

The Budget-Mr. Belec
we are going through. While that crisis is world-wide in its effect, it, however, places upon us serious obligations and duties, a difficult and ungrateful task. We have faith in the future, and the country's affairs could not be in better hands than those of the man whom all acknowledge to be honest, highly experienced and well versed in financial matters. I refer to the right hon. Prime Minister. _ In previous debates, the Liberals unceasingly reminded the Prime Minister of his pledges to the electorate during the last election. They seem to ignore that the situation we have to face to-day has been greatly aggravated by uncontrollable causes. They forget that the gates have been closed to immigration in order to keep unemployment at its lowest ebb; that the raising of the tariff resulted in preventing our markets from being flooded by foreign products, thus keeping the Canadian markets for our own producers when times become more favourable. They further forget that the obligations contracted in times of prosperity, the changes brought about by the motor car and its greater perfection, are as many burdens which weigh more and more, add to this the hardships prevailing, accustomed as we were to living somewhat in comfort. Hence these fixed charges such as the enormous amount entailed in the pensions to veterans, the interest on the national debt and the necessary maintenance of our national railways. These new burdens have greatly increased owing to the world wide crisis, and they thrust upon us the pressing duty to economize instead of distributing favours, to cut down salaries instead of increasing them; to reduce the number of civil servants instead of enlarging it. Now, sir, addressing myself to the people of Kent county, mostly fishermen or farmers, I wish to assure them that their special interests have not been lost sight of by the federal authorities who are aware that the fisheries and the farm are, in our section of the country, the two main industries. To the farmers of my county, I shall repeat what, the other day, the president of the French Canadian Association on Education stated to the French Canadian Agricultural Association of Ontario: while certain members of the family-under the guidance of the father and mother, heads of the establishment -will produce grain, fodder, vegetables, other members will busy themselves with making clothes, others will look after the fruit, the preserving of food, the making of cheese and butter, still others will utilize their time in making and repairing furniture, vehicles, sledges, farm implements and erecting and repairing the buildings. So that each member 41761-1351
of the family will have work distributed to him according to his age, abilities and fitness. Every one being thus interested in his task, knowing that he is working for himself and his family, will not think of leaving the locality, where he finds continuous and remunerative work, to go to the city or the mills, where the assurance of work and remuneration become daily more uncertain. It is true, that for a number of years, the whole economic organization of this country has tended to destroy home industries and to commercialize certain branches of agriculture. The result is that our rural districts are short of money which is constantly being drained to other centres. All agricultural branches which have been exclusively industrialized have been the cause of over production and have ruined many a rural family who had followed such practice. For ininstance, the wheat growers who realized large profits as long as their products found an easy market, but the moment the wheat market fell, distress replaced abundance among this class of farmers who have specialized in one branch of agriculture without paying any attention- to providing clothes or food products for family consumption.
As to the fishermen of the county of Kent, I wish to inform them that the federal Minister of Fisheries is alert to all which may interest them and, if the present depression is hard on them, they must not lose faith, but hope that their lot will soon improve.
To these two groups, as well as to others, I wish to extend the assurance of my sincere sympathy and unceasing zeal for all that concerns and interests them.
In closing my remarks, let me once more express to the people of the beautiful county of Kent my very sincere thanks for the honour they have bestowed upon me by electing me as their representative. I wish to assure them that on all occasions I shall deem it my duty to protect the special interests of my county and the country at large.


Mr. CHARLES BELEC (Pontiac):: Mr. Speaker, at the outset of my address may I follow the excellent example of those who have preceded me in this debate, and extend my congratulations to the Minister of Finance (Mr. Rhodes) upon the excellent manner in which he has explained the budget to parliament and the country. The budget is a businesslike statement which clearly sets forth Canada's high position among the nations of the world. It shows how Canada has balanced -her trade, met all her obligations and maintained her credit. The government of which I am a supporter has courageously tackled the
The Budget-Mr. Belec

unemployment problem and thus brought relief to thousands of Canadian people. The budget has been well received by the country: it has not disturbed business and it has shown that, despite the world economic crisis, our position is relatively better off than that of any other country.
The tax levies in the budget have been placed on those best able to bear them, and will not prove a hardship to the farmer who in these days has problems of his own. 1 should also like to remind the house that the government has saved our country industrially by enacting proper tariff protection. As a result of the tariff policy of the Bennett government more than 157 new industries have been established in Canada since the last-dominion election, and they are employing Canadian men and women who were idle during the latter years of Liberal misrule.
I should like to tell the house something of the county which I have the honour to represent in this parliament. Pontiac is undergoing the stress of hard times, but undergoing it with courage. The people of that county are descendants of sturdy pioneer stock who have contributed so much to our country. Pontiac is going through the depression, but is not going back. It is true that lumbering, which has been one of our basic industries, is not what it has been in the past, but in agriculture and mining my county is second to none in this or any other country. Think of the diversified wealth in Pontiac. We have the rich Rouyn gold area with the great Noranda mine, while in the Abitibi district the discovery of rich ores presages great development. At Timiskaming we have the great plant of the International Paper Company. In regard to lumbering, may I say that we have untold resources in pulp and hardwood. As a matter of fact the only virgin pine in Quebec is to be found in Pontiac around Grand Lake Victoria.
The constituency of Pontiac extends from the town of Aylmer on the Ottawa river to James bay, and is one of the largest in area in Canada. We have the resources, but best of all, we have the people. The census taken in June of last year shows the population of Pontiac to be 64,155, which represents a gain of nearly 20.000 since the last census was taken in 1921. This is the healthiest sign of all that our county is increasing by leaps and bounds. The northern part, Abitibi, has increased enormously; it has a population of 22,133, which is almost 10,000 more than ten years ago. The people of the northern end of my county, like the people of old Pontiac, depend not upon doles but upon themselves; they are workers, the best in the country.

As regards financial matters, may I say that old Pontiac is out of debt as far as county rates are concerned, and most of the municipalities are in the same happy position. My own municipality of Mansfield does not owe a dollar. I have been a member of the Mansfield council for thirty-five years, mayor for fifteen years and, besides that, chairman of the school board for years. In Pontiac we pay our way. Our people are not extravagant, but limit their spending to their means.
I should now like to say something about agricultural conditions in my county. Prices, in common with those the world over, are the lowest in years, and I would respectfully urge the Minister of Agriculture (Mr. Weir) to include Pontiac in the schemes of departmental activity. I regret to say that under the previous government our county was neglected, and, may I say, ignored. I often hear the former Minister of Agriculture (Mr. Motherwell) speaking in the house, but I find that during his administration the Department of Agriculture did absolutely nothing for the farmers of Pontiac.	.
May I point out some of the agricultural resources of my county? The last census of live stock shows the following for Pontiac-I will deal with the Abitibi district first: horses, 2,877; cattle, 11,631; sheep, 1,651; swine, 4,461; poultry, 56,900. In Timiskaming the total live stock is as follows: horses, 2,934; cattle, 21,908; sheep, 10,130; swine, 7,581; poultry, 50,028. In old Pontiac there were 7,606 horses; 38,929 cattle; 25,844 sheep; 15,746 swine, and 162,770 poultry. Thus' the live stock census of 1931 showed the following for the whole county: horses, 13,417; cattle, 72,658; sheep, 28,625; swine, 27,688; poultry, 269,698. I have quoted these figures from the Bureau of Statistics to show that our country is progressing despite the hard times. But what we want is a market for our products. I would like to endorse the suggestion that was made by the hon. member for Dufferin-Simcoe (Mr. Rowe), that mixed farming be encouraged by means of a cash bonus. This is an emergency situation, and such a step would bring great relief to the farmers of Pontiac county, who are all engaged in mixed farming. I believe that if our exports of live beef were bonused by two cents a pound it would greatly increase production and as well restore the purchasing power of the farmer. In this regard may I point out that the farmers of Canada represent forty-six per cent of the total population of the country, and until their purchasing power is restored general prosperity cannot return.
I would like to see the farmers of Canada recapture the bacon market in Great Britain, and to help them in accomplishing this the

Sales Tax-Containers
government might grant an export bonus of two cents per pound. Denmark now enjoys the bacon market of Great Britain. In 1930 Denmark sold millions of pounds of bacon to Great Britain while we sold only a fraction of that amount. I would also respectfully urge the government to give the farmers a bonus on cheese and dairy products, and a bonus of say three -cents per dozen on eggs. This would bring prosperity to the farmer. Establishing a bonus system for our exportable farm surplus would automatically stimulate the market at home and return about $30,000,000 to the farmers of Canada through the increase in the price of farm products. The prices of farm products have dropped fifty per cent, and I -would respectfully suggest that it is time that something be done for the farmer.
We are looking forward -with the keenest anticipation to the Imperial conference to be held in Ottawa this summer, which I am sure will result in a marked stimulus to empire trade, bring about mutual advantages to the various parts of -the British Empire, and herald the return to better days and prosperity.
On motion of Mr. Reid the debate was adjourned.
. n motion of Mr. Rhodes the house adjourned at 10.45 p.m.
Tuesday, April 19, 1932