1933-04-04

AGRICULTURE COMMITTEE

[Stage Direction]
Third report of the select standing committee on agriculture and ooloniziation-Mr. Serin.
SALMON FISHERY On the orders of the day:
Mr. A. W. NEILL (Comox-Alberni):: I should like to direct a question to the Acting Minister of Fisheries (Mr. Duranleau). We have just been advised that the legislature of British Columbia unanimously adopted a

Trawler Licences
resolution emphatically opposing P.C. 206, passed on February 3, relative to the landing of salmon on wharves within twenty-four hours after being caught. In view of that decision by the province I should like to ask the minister if he will not consider cancelling or withdrawing that order in council.


Hon. ALFRED DURANLEAU (Acting Minister of Fisheries):: My hon. friend was kind enough to give me notice this forenoon of the question he intended to put. My answer is that we will get official confirmation of the decision of the legislature of British Columbia, and then the matter will be very seriously considered.



TARIFF BOARD

[Stage Direction]
On the orders of the day:
Mr. F. G. SANDERSON (South Perth):: I should like to ask the Minister of Finance (Mr. Rhodes) whether the recently appointed tariff board is functioning and, if not, when it will start to function as a board.


Hon. E. N. RHODES (Minister of Finance):: The board is making arrangements to begin its operations immediately. There is no delay at the moment, because eases are being considered in a preliminary way preparatory to the public hearings.


Frederick George Sanderson: Would the minister say where their offices are?


Edgar Nelson Rhodes: In the national research building.



TRAWLER LICENCES

[Stage Direction]
On the orders of the day:
Alfred Duranleau: With respect to the licensing of steam trawlers, Mr. Speaker, it may be of interest to recall the conditions under which steam trawling was begun in this country. Some years ago those who were engaged in the marketing of fish found that steadiness of supply was essential in order to increase the demand, and at that time there was no assurance of such steadiness of supply, particularly in the winter season. Hence in 1910 steam trawling was initiated with one vessel. With the development of the demand for fresh fish the number was increased to two in 1912 and in the following year to five.
During the war the demand grew rapidly, and probably the number of trawlers would have been increased more rapidly than it was had they been available. The largest number operated in the war period was eight in 1918. In 1926 the number had increased to eleven, and since then it has declined.
Following consideration of the majority and minority reports of the Atlantic Fisheries Commission of 1927-28, legislation for the better control of trawlers was adopted in 1929. The main provisions of this legislation were:
(a)	All trawlers must be licensed.
(b)	All trawlers should be registered in Canada and owned by Canadian companies or persons.
(c)	That trawler fishing should not be allowed within twelve miles of the shore.
(d)	That the minister may determine the number of trawlers to be licensed.
(e)	That regulations might be made by order in council prescribing the evidence to be submitted with applications for licences fixing the conditions under which licences should be issued and making any other provisions respecting licences.
By order in council of October 30, 1929, regulations were adopted under the authority of the new legislation. These regulations provided for the licensing of trawlers and for a fee of one cent per pound on all cod, haddock and halibut that were landed by foreign built trawlers and two-thirds of a cent a pound on all such fish that were landed by Canadian built trawlers, excepting on fish landed during the months of January, February and March each year, when no fee would be charged.
One of the trawler operating companies failed to pay the licence fee, and action was taken in the exchequer court to compel payment. This resulted in a decision of that court of the 9th of March, 1931, that the regulations w'ere ultra vires. After further consideration of the matter new regulations were adopted by order in council of August 14, 1931. These provided for a lioence fee of S500 for each trawler and that the applicant must furnish the minister with evidence that would satisfy him that the applicant could not obtain an adequate supply of suitable fish to enable him- properly to conduct and develop his business from the hook and line fishermen, and that the granting of the licence would not adversely affect the extent to which fish would be purchased from the hook and line fishermen.
Following the submission of applications, which were accompanied by the necessary evidence supported by declarations, licences for six trawlers were granted for the fiscal year 1932-33. Five of these were for trawlers operated by the Maritime-National company and one by the Leonard fisheries.
Fishermen's organizations and boards of trade have strongly urged that no trawlers be
Trawler Licences

licensed for the present fiscal year. On the other hand, the Halifax board of trade and the mayor of Halifax have urged very strongly the renewal of all the existing licences. Applications for renewal of the five licences held by the Maritime-National company have been made, and the Leonard Fisheries has intimated that it intends to apply for a renewal of its licence.
At this point it may be interesting to note that the decline in the trawler catch in recent years has kept pace with the decline in the hook and line catch. In Nova Scotia alone the hook and line catch of the kinds of fish landed by trawlers was 150,200,977 pounds. The trawler catch that year was 31,365,423 pounds. Last year the Nova Scotia catch of these fish by the hook and line fishermen was 108,645,871 pounds, while the catch by the steam trawlers was 22,956,729 pounds, or a decrease of practically 27 per cent in each case.
It is also contended that the trawler operators are amongst the largest purchasers of fish from the hook and line fishermen, and the former maintain -that it is only possible for them to continue to make such large purchases from the hook and line fishermen because of having the trawlers so that they can keep continuously in the market. It is also contended that the main landings by the trawlers are during the six winter months when hook and line fishing is reduced to a minimum, and during a portion of which no licence fee was charged on the trawler landings under the previous regulations.
It also may be of value to note that all dtther countries are allowing trawlers to operate. Out of European ports about 5,000 of these vessels are operating yearly. Out of United States ports there are usually over 300. These latter vessels as well as a large number from France and sometimes from other European countries, fish on the Banks adjacent to our coasts, so that even if our trawlers were withdrawn it would decrease the amount of trawling on these Banks by a very small proportion only.
After consideration of all the facts it is thought that if the Maritime-National had three trawlers instead of five operating they could reasonably assure the steadiness of supply as well as the proportion of haddock needed. Hence it has been decided that for the present year that company will be allowed three trawlers and the Leonard Fisheries one, as before. There are no other applicants. This will involve a reduction in number of 33 J per cent. This reduction will be put
[Mr. Duranleau.J
into effect from the first of May, thus giving one month to the company to enable it to fill certain contracts into which it has entered.



VISIT OF JAPANESE WARSHIP

[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: According to press dispatches a Japanese warship is to visit Vancouver harbour to-morrow. In view of the trouble in the orient and the withdrawal of Japan from the League of Nations, may I ask what the attitude of the government will be?


Right Hon. R. B. BENNETT (Prime Minister) :: I was not aware that the question
was to be asked, and I have nothing to say because I have received no correspondence with respect to the matter. If the ship comes into the harbour she is entitled to anchor, and I assume she will.


James Shaver Woodsworth: Is the government extending entertainment to this visiting warship?


Richard Bedford Bennett: I doubt not that the
citizens of Vancouver will extend to them the hospitality for which that city is proverbial.



PENITENTIARY ACT AMENDMENT


[Stage Direction]
The house resumed from Monday, April 3, consideration in committee of Bill No. 59, to amend the Penitentiary Act-Mr. Guthrie -Mr. Gagnon in the chair.
Hon. HUGH GUTHRIE (Minister of Justice) :: Since the committee had this bill
under consideration yesterday I have talked it over with the Deputy Minister of Justice in regard to one of the amendments which he made and in regard to which he thinks the language might be very much improved. I refer to subsection 3 of section 3. The following words were added as subsection 3:
All other officers, clerks and employees of the penitentiary branch of the Department of Justice shall be appointed and paid under the provisions of the Civil Service Act.
It has been pointed out that the words "shall be appointed and paid'' are not proper. There are more provisions in the Civil Service Act than appointment and pay. The amendment I have to propose is the insertion of a new clause in these words:
All other officers, clerks and employees of the penitentiary branch of the Department of Justice shall continue to be subject to the provisions of the Civil Service Act.


The CHAIRMAN (Mr. Gagnon):: Shall the amendment passed last night be rescinded,

Penitentiary Act
and the new section now proposed be adopted?


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Hugh Guthrie: On the suggestion of my
hon. friend from West Lamb ton (Mr. Gray), a clause' has been drafted to meet the question raised with reference to returned soldiers. The hon. member for West Lambton and myself and others went over the matter this morning and drafted a clause which I propose to insert, with the concurrence of the committee, as 20B:
In making appointments under the powers conferred by this act, the governor in council and the superintendent respectively shall extend to returned soldier applicants the preferences set out in section 29 of the Civil Service Act.


[Stage Direction]
Section agreed to.
Hugh Guthrie: There is one other matter which has been called to my attention since last evening. There is an anomaly in the Penitentiary Act as it now stands by reason of an amendment to the criminal code passed in 1929. Under that amendment the crown was permitted to appeal in criminal cases; in other words, where a man was tried for a crime and the charge against him was dismissed, the crown was permitted to enter an appeal. In many cases the prisoner was forced to remain in gaol pending the hearing of the appeal because he was unable to furnish bail. Sometimes a man would spend three, four or five months waiting the result of the appeal. Under 'the provisions of the Penitentiary Act as it now stands on the statute books, the time spent in gaol pending trial shall not be credited on the length of the sentence and it is now proposed to amend that section by providing the following:
Any period during which a convict is detained in the gaol or other place of confinement pursuant to the authority of this section shall not be computed as time served in the execution of his sentence unless he be so detained pending an appeal by the attorney general or counsel for the crown.
If the crown appeals and the charge against the man is subsequently abandoned or dismissed, the time spent in gaol pending appeal shall be considered as part of the sentence.


Mr. MACKENZIE KING:: Is he a convict if he has been acquitted?


Hugh Guthrie: We are not changing the
law with reference to an appeal by a man who has been convicted; we are dealing with the man who has been acquitted. After the crown appeals and the man is finally convicted; the time spent pending appeal shall be taken as part of his sentence.


Mr. YOUNG:: If he is acquitted?


Mr GUTHRIE:: The same.


Edward James Young: What will be his sentence
if he is acquitted?


Hugh Guthrie: If he is acquitted, he
goes free like my hon. friend. I move that this provision be added to the bill as clause 9. It would remove the anomaly which now exists by reason of the amendment to the criminal code made in 1929.


Mr. HANSON (York-Sunbury):: In the
case of a man appealing after being convicted, would the time he had spent in gaol count in his sentence?


Hugh Guthrie: No.


Richard Burpee Hanson: I do not
see why the converse of the proposition now proposed by the minister should not apply. I think in both cases the time spent in gaol should count on the sentence.


Hugh Guthrie: It never has applied.


Richard Burpee Hanson: Because
a thing has never been 'the law is no valid reason why it should not be the law.
Mr. MoINTOSH: You are right this time.


Richard Burpee Hanson: I am
always right.


William Lyon Mackenzie King: If a man is
acquitted how can he be described as a convict?


Hugh Guthrie: The section describes as a convict the man who has been convicted. The section reads, "any period during which a convict is detained in the gaol or other place of confinement pursuant to the authority of this section." Where a man has been convicted the time so spent shall not be computed as time served in the execution of his sentence. That has been the law for generations. Under the Ticket of Leave Act we often recommend that the time spent in gaol before trial shall be counted in reckoning the time after which ticket of leave shall be granted, but the matter of an application for ticket of leave is not involved in this. Ordinarily the warden computes the sentence as from the date it is pronounced in court notwithstanding the fact that the man may have spent a certain period in gaol before the trial. Where a man has been acquitted and the crown or the attorney general for the crown enters an appeal and the man is subsequently convicted, the time spent in gaol shall be counted as part of his sentence.


William Lyon Mackenzie King: Is it fair to
describe a man who has been acquitted of a crime as a convict?
Penitentiary Act


Hugh Guthrie: Where a man appeals and is subsequently convicted, he is still a convict.


Mr. MACKENZIE (Vancouver):: He is
not a convict until the appeal is decided.


Hugh Guthrie: He is a convict as soon
as the appeal is decided and the time spent in gaol pending appeal by the crown is taken as part of his sentence.


Ian Alistair Mackenzie: Should he
be termed a convict during the period prior to the deciding of the appeal?


Hugh Guthrie: The section does not describe him as a convict until he has .been finally convicted and is serving his term of imprisonment. That is the time referred to in this section, and it becomes a question of deciding when he will be released from penitentiary.


Mr. ELLIOTT:: Would the minister read
the section again?


Hugh Guthrie: It reads:
Any period during which a convict is detained in the gaol or other place of confinement pursuant to the authority of this section shall not be computed as time served in the execution of his sentence unless he be so detained pending an appeal by the attorney general or counsel for the crown.
That time shall count as part of his sentence.


John Campbell Elliott: But he does not become a convict until the court of appeal overrules his acquittal.


Hugh Guthrie: This section does not have any effect until the man is actually convicted and imprisoned. If this section is passed the warden of the penitentiary would be allowed to count the time the man spent in gaol pending appeal as part of his sentence. The ordinary man will get bail and will not spend that time in gaol, but if he has had to spend it in gaol it shall be counted as part of his sentence.


Mr. EULER:: I should like to ask a question of the minister as a layman. It is suggested that the time a man spends in gaol pending appeal shall be counted upon his sentence, but should not the time spent in gaol prior to his original trial be counted also?


Hugh Guthrie: It never has counted.


William Daum Euler: That is not a very good
reason why it should not be counted.


Richard Bedford Bennett: The judge takes that into s'onsideration when awarding punishment.


William Daum Euler: It should be taken into consideration on the appeal.


Hugh Guthrie: As a rule, the court of
appeal does not fix the punishment.


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


[Stage Direction]
The house resumed from Friday, March 31, 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, and the amendment thereto of Mr. Ralston.
Mr. A. M. EDWARDS (South Waterloo):: Yarn C S P 15. 13. 9. at $4
	 $22 60
	 3	78
	 2	13
	 1 02
Special duty	 1	70

These are actual invoices, which can be produced, of imported goods.
I wish now to say a few words concerning the unemploment situation as it applies to the textile industry. The other industries I have to do with are certainly in a very serious condition. Anything which has to do with furniture, or any of the iron working industries, is in bad shape. Personally I do not think 5371&-233J
very much can be hoped for until there is a larger building program where furniture is required, and machinery to make that furniture. The one bright spot in my particular part of the country is the textile industry, and perhaps hon. members will pardon me if for a few moments I speak concerning it. For several years in this house I have argued that certain lines of the textile industry-and in
The Budget-Mr. Edwards


Edward James Young: Is that Canadian wool?


Alexander McKay Edwards: I will come to Canadian wool in a moment. One of the most encouraging features to-day in the woollen branch of the textile business is the increased use of Canadian wool. I have taken the trouble to make inquiries regarding this feature. Prior to the revision of the tariff on worsted yarns in 1930, the combing and spinning plants of the country were practically closed, the reason being that worsted yarns were duty free. As a result yarn could be imported from England for less than the cost of production in Canada. This was due to the different wage schedules and other charges imposed on Canadian mills such as workmen's compensation, minimum wage laws and so on, which did not obtain in England. From the time the ten per cent duty was taken off in 1927, therefore, the combing and spinning plants of this country were practically closed, and no Canadian wool could be used. It was shipped out of the country. It is worthy of note that the arguments used by the Canadian mills when they protested against the removal of the ten per cent duty was used in turn by the English mills to protect themselves against yarns imported into England from mid-European countries.
I should like to illustrate this position. Dominion Woollens and Worsteds, Limited, have a large plant in my constituency at Hespeler, Ontario, with subsidiary spinning plants at Milton and Orillia. Prior to 1930, the Orillia
The Budget-Mr. Edwards

and Milton plants were closed, and the Hespeler mill had about 600 employees working part time. Since that time the Orillia plant has been re-opened and is running today with 60 to 80 employees on full time. The Milton plant ran for a short time but the equipment from this mill was moved to Hespeler for reasons of economy but the equipment is still in operation. The payroll of the Hespeler and Orillia mills has averaged from 800 to 830 employees this winter, with from 60 to 80 of these employees at Orillia.
One of the most encouraging features today is the increased use of Canadian wool in the products of these mills. Three years ago practically no Canadian wool of any kind was used in the Hespeler mill. To-day, however, the combing department is operated as a commission combing department for the wool trade, and is consuming Canadian wool at the rate of 3,000,000 pounds a year in the greasy or unscoured state. The tops produced are being distributed bjr wool dealers throughout the entire worsted spinning industry. This development appears to be in its infancy and, I believe, the use of Canadian wool will expand very quickly to a much larger figure.


Edward James Young: What percentage of the
3,000,000 pounds is tops?


Alexander McKay Edwards: About 20,000,000 pounds is produced in Canada.


Edward James Young: That was not my question. What percentage of the 3,000,000 pounds comes out as tops?


Alexander McKay Edwards: I could not say exactly. The combing department employs from 50 to 60 people, and it is estimated that the dealers handling the wool employ another 50 people. Three years ago the percentage of Canadian wool used in the manufacture of worsteds in Canada was practically nil; to-day all the medium and coarse quality cloth produced contains about 50 per cent of Canadian wool and this proportion is increasing steadily. It is estimated that within the next six or eight months at least two-thirds of the material in medium and coarse cloths will be Canadian wool. This wool is not being used in this plant in the manufacture of the finer qualities of cloth, but other manufacturers who are buying tops combed there appear to be using large quantities of botany wool grown in Alberta and Saskatchewan.
The question of dealing with wool prices is an extremely difficult one. The trouble is that the farmer sells on a grease basis at so much per pound, the wool including the natural

grease and acquired dirt, while the manufacturer buys on a clean content basis even though he may pay so much per pound in the grease. For example, a manufacturer has offered to him two wools which, when clean, can be used for the same purpose. I just want to deal with these two samples of wool in order to explain the variations in prices. For the first sample the manufacturer pays 8 cents per pound in the grease; there is a freight charge of 2 cents per pound and a scouring charge of 2 cents per pound, with a 50 per cent shrink. For the second sample the manufacturer pays 12 cents per pound in the grease; there is a freight charge of 2 cents per pound and a scouring charge of 2 cents per pound, with a shrink of 25 per cent. The clean cost to the manufacturer for one pound of wool would be: for the first sample, 16 cents for the wool, 4 cents for freight and 4 cents for scouring, or a total of 24 cents. For the second sample the cost would be 15 cents for the wool, 2J cents for freight and 2} cents for scouring, or a total of 20 cents. In addition there is a large number of different types of wool to deal with.
I hope I have made the situation clear with regard to the woollen and worsted part of the textile industry. I do not profess to know anything at all about the cotton end of the business, but the figures I have given in connection with woollens, including worsteds and worsted yarns, are absolutely correct.
I should like to conclude, Mr. Speaker, with a word of appreciation for the splendid manner in which this government, has handled the situation. We are in extremely difficult times, to get out of which it will be necessary for hon. members on all sides to cooperate. There is no panic in this country. The people are satisfied with the present government; and headed by the right hon. gentleman who leads it, will emerge from this situation. If the Prime Minister is given proper assistance he will pull us ou't of our present difficulty, and I am sure that we shall recover long before other countries that lack our natural resources are able to return to normal. The indomitable spirit of the Canadian people will triumph.


Hon. CHARLES STEWART (West Edmonton) :: The discussion of the budget is always the most important debate that takes place in the House of Commons in any session. I am afraid I Shall not have time to deal with the arguments put forward by those who have preceded me in the present discussion, but so far as the presentation of the budget itself is concerned, I desire, in

The Budget-Mr. Stewart (Edmonton)
common with others, to congratulate the minister. He made a splendid presentation of a very difficult subject. I do not think that in the history of Canada any Minister of Finance has had to face as difficult a problem as the present minister in presenting his budget to this house. For three successive years this country, with the rest of the world, has been suffering from a very severe depression. Let us try to be as fair as we possibly can. With other countries we have been suffering in consequence of that depression. Now the minister takes a great deal of credit from the fact that Canada, according to his statement, is not quite so badly off as other countries; he suggests that we have not suffered quite so much. I can hardly agree with that statement; I believe that the position which we occupy to-day, if matters were properly managed by the government, would not be as bad as it is, and many of the difficulties through which we are passing at the present time could be avoided.
I will not take time to recount the various promises which the present Prime Minister gave to the country when he was appealing for its support. Those promises have been frequently referred to in this house, and with one single exception the right hon. gentleman has failed to implement them. He has not carried out the promises which he made with so much vigour and force during the election. Indeed, many hon. gentlemen opposite owe their seats in this house to those promises made by their leader. I am not going to discuss the promises he gave the people, but there is one promise which I am bound to say he has kept, a promise that has had the most serious consequences for the people of Canada, and that is the promise to increase the tariffs of the country to the point where he would give protection to every industry in Canada and shut out imports. He has kept that promise one hundred per cent. I am glad that hon. gentlemen opposite applaud that statement; I am glad that farmers particularly applaud it, because if there is any comfort to a farmer in the faot that our tariffs have been increased to the extent they have been, I should like to see him rise in his place and say so.
I have listened with a good deal of interest to the remarks of the hon. member for South Waterloo (Mr. Edwards). He comes from a manufacturing centre and finds that on the average the tariff of seventy per cent on textiles has been of immense benefit to the industry in his locality. He frankly admits however that the furniture industry has
severely suffered in consequence. Let us give credit to the government for having kept this one promise. Let us give them all the credit that is coming to them for the fact that the world is passing through a period of depression. At the same time let us look into the faats for a few moments to see whether or not hon. gentlemen opposite have helped to improve the situation in Canada.
What was the great difficulty in 1930, according to Conservative speakers at that time? My hon. friends were not complaining about the financial situation in Canada. I venture to say that ninety-five per cent of them had no complaint to make about any suffering among the manufacturers. The manufacturers were fairly prosperous in this country. I suppose my hon. friend who has just taken his seat will take issue with me on that point so far as the textile industry is concerned. With the single exception of that particular industry, and the woollen part of that industry, there was certainly no serious complaint from the manufacturers, for they had enjoyed a period of prosperity never before known in any previous period in the history of Canada. They all admitted that. Unemployment was the evil that had to be cured. We had 117,000 unemployed in Canada-and I am quoting the words of the Prime Minister, which no doubt were repeated by other hon. gentlemen on the opposite side. There were 117,000 unemployed, and we rushed through increases in the tariff in the short session of 1930-to do what? In order to protect industry in Canada but primarily, as we were told, to cure unemployment. In connection with unemployment we were assured that another thing which was to be deplored would be remedied; there was to be no system of doles in Canada, but everyone was to be furnished with work.
Now, what is the record? I have no time to go into details, but hon. gentlemen opposite frankly admit that there are to-day in Canada nearly 900,000 people out of work. The question is:	Have tariffs helped to relieve
unemployment or on the contrary have they contributed' to the present situation? Undoubtedly they have, and that is the answer to the application of high tariffs as a means of aiding unemployment. What else has it done? We had fairly prosperous farmers in this country in 1930. There was not very much complaint in 1930 in regard to the returns from farming operations. Well, what is the condition of the farmers to-day, not only in the west but in Ontario, which as is so frequently stated in this house is the banner province of the dominion? What are the conditions in this province to-day
3690	COMMONS
The Budget-Mr. Stewart (Edmonton)
among the farmers? At least fifty per cent of them are facing bankruptcy. Not only were the increased tariffs going to help them, but we were told that we were going to blast our way into the markets of the world for the benefit of our farmers.


Mr. SPENCE:: AVhat could you do under
the circumstances?


Charles A. Stewart: Before I
conclude I shall be glad to tell my hon. friend. Now, what has happened to our manufacturers? What has happened to the mining industry? I know that hon. gentlemen do not like to hear these things; it does not sound so pleasing to the ear to be told that the woollen industry has had to carry on with seventy per cent protection. What about the mining industry, and what about the gentlemen who thought they were going to make fortunes by investing in mining stocks? What about the lumbering industry? What about the fishing industry? Where does the individual find 'himself to-day who is engaged in basic industry? He finds himself in such an unfortunate position that one of the salient features of this budget, one that is made so much of, is stabilization or bonus-ing as a means of keeping people on the land. That is the position our farmers are in; that is the position of those who are engaged in basic industries.
We are going to cure the situation by conferences. Notwithstanding the desperate plight of this country we are going to have another conference. You agriculturists and you who are engaged in the basic industries of this country are willing to await the consummation of another conference before you obtain relief. If fifty per cent of us are in the unfortunate position which I have just mentioned, I am afraid that before this conference takes place and we receive any results from it, we will all be in the unfortunate position of being bankrupts. That is the position in which we will find ourselves under the beneficent administration of this government. That is what this government has done for agriculture; that is what it has done for lumbering and that is what it has done for mining and fishing.
But hon. members opposite would have us believe that there is one bright spot-the wool industry has been helped. Out in my province you cannot even sell wool, you have to give it away. The hon. member for Lethbridge (Mr, Stewart) shakes his head, but three cents per pound is the magnificent price to be obtained for first class wool. If you happen to have a hide to sell you have to beg the purchaser to take it off your hands. That 
is the situation in western Canada. The hon. member for South Waterloo (Mr. Edwards), takes credit to his government for having helped the woollen industry of this country.


Mr. MOTHERWELL:: They have wool in their brains.


Charles A. Stewart: We have 900,000 people out of unemployment and on the government's own admission we are feeding 1,300,000, yet we require a seventy per cent protection to keep an industry running that employs less than 40,000 people even in good times. Sometimes I wonder if it would not be better to scrap the textile industry altogether. That may seem to be a rash statement but I sometimes wonder whether the tax we pay to this industry and the revenue diverted from the Minister of Finance is worth the results obtained. According to the figures given the other day by the Minister of Finance, in 1930 the collections from customs and excise amounted to $244,000,000; the collections to-day are only $110,000,000.


William Richard Motherwell: And still going down.


Charles A. Stewart: That is the estimate for this year and it may not amount to that much. It is casting the treasury of Canada more than $140,000,000 to continue exorbitant tariff protection of this kind. The Minister of Trade and Commerce (Mr. Stevens) did very well the other day with a bad subject. He succeeded in making himself believe, if he did not make anyone else believe, that Canada was not in such a bad condition. He stated it was unfair to use dollars and cents in making comparisons, that we should use volume in order to explain the real position of Canada. Unfortunately volume does not take our wheat out of the country, nor does it take care of our cattle. The government states it is going to do something, but this is the greatest to-morrow government I have ever seen. It has been going to do things for the past three or four years.
When the Minister of Finance delivered his budget I had hoped that his speech would show that he and his government realized that the imposition of these high duties was the cause to a large degree of the difficulty through which we are now passing. I had hoped there would be some remission in the-tariff, but there was not a sign except as it affected certain manufacturers and their raw products. I am not alone in this opinion, the best economists in the world hold with this position. Hon. gentlemen will say that other countries have done certain things and Canada would suffer if she did not follow suit. In reply to that I would refer them to the last

The Budget-Mr. Stewart (Edmonton)
four years of the Liberal administration. Other countries were putting up their duties to an unprecedented degree and vve did not seem to suffer very much as a consequence because we were able to make agreements with other countries. I had hoped that our tariff had been raised to such a point that it could be used in making favourable trade treaties with other countries willing to trade with us. Did it work out in that way? I need only refer to what the Prime Minister said when he attended the trade conference in England in 1930. He was not willing to trade with Great Britain and give her a chance to get her goods into this country. Hon. gentlemen may talk until they are tired about the encouragement given to empire trade by the conference agreements, but so long as Canada maintains her present position and refuses to buy, we poor individuals engaged in the primary industries will be unable to sell our products. It is futile to talk about blasting, that does not mean anything.
What has the government been forced to resort to? It has been forced to the subsidizing of the natural products of the country. There is also talk of reducing the wheat acreage and other matters of this kind. It is said we have overproduction but hon. members who have given any thought to this matter know perfectly well that we have not overproduction-our trouble is under-consumption. Do hon. members mean to tell me that the 1,300,000 people being fed by the government are consuming all they are capable of consuming? Not at all. The same thing applies to the people in other countries where similar policies are being pursued. Because other countries are carrying on a policy of trade restriction, it is said that Canada should follow suit. Such a policy is costing the treasury of this country more money than we can possibly estimate. I do not mean to say that under a different policy we would be able to collect $244,000,000; not at all, but I do say that we would not have the tremendous drop in revenue which has occurred through the infliction of these excessive duties with the consequent restrictions of trade.
In the forty minutes at my disposal I am not able to go very far into this matter, but I should like to deal with another point raised the other night by the Minister of Trade and Commerce. He referred to the stabilization of the wheat market through the injection of assistance by the federal government. I have sold and raised wheat for the past twenty-five or thirty years and may I say to the minister that whatever advantage this step may have been in 1930 and 1931, it certainly was no
advantage in 1932. Do hon. members mean to tell me that the government stabilized that market when, after they went into it, wheat which was selling at sixty cento a bushel, began to go down? Were we foolish enough to believe the government weTe stabilizing that market when the price of wheat would drop four or five cento a bushel within a day, until it reached the low price of forty cents, the lowest it has ever been since I have been engaged in farming in western Canada. I am bound to think and still believe if the market had been left alone, we farmers who produce the grain would have had more from our products than we have under the circumstances that exist. I have not time to go into details in that connection, but examining these orders in council and looking into the whole matter of what they fondly call stabilization of the Canadian market and what the Minister of Trade and Commerce said the other night, namely, that Canada played a very important part in stabilizing prices throughout the world, let me say to him that it is not such an important part Canadian products play in the stabilization of world prices.


Mr. STEVENS:: I said the Winnipeg grain market.


Charles A. Stewart: I am speaking of the Canadian market-the Winnipeg market, yes.


Edward James Young: The Winnipeg market is a
world market.


Charles A. Stewart: The minister did not say that.


Edward James Young: I say it.


Charles A. Stewart: The hon.
member may say it if he likes. One does not believe that sort of thing. So far as the stabilization of the Canadian market is concerned, if my hon. friend takes any comfort out of that, then I shall say to him that I would like a better explanation than the one he was able to give the other evening when presenting the case to the house.
Another matter the government seemed to be determined to preserve was the sanctity of the dollar; we must remain on the gold standard. It will be remembered that a few weeks ago we had in this house a vote on which most of us on this side voted for the placing of the dollar on a parity with sterling. I recognize some difficulty in this connection, but we were told by the Prime Minister that the government stood for a sound dollar and that there would be no inflation which it was assumed there would be were we to attempt
3692	COMMONS
The Budget-Mr. Steioart (Edmonton)
to place our currency on a parity with sterling. It was plain that to do so would reduce the value of the Canadian dollar to a very low point. To-day I made inquiry and I find that exchange is twenty cents; that the Canadian dollar is worth eighty cents in New York. That is what we have to pay if we wish to exchange Canadian currency into United States funds.	_	_
We were warned also that, this being the case, the situation in Canada would become serious. Let us examine this for a moment or two. According to the statement issued by the Minister of Trade and Commerce the other day, we owe in the neighbourhood of $3,700,000,000. It is assumed that the provinces and municipalities owe something in the neighbourhood of over $2,000,000,000, making a total of about $6,000,000,000, and that corporations and individuals owe in the neighbourhood of $2,500,000,000, bringing the total to about $9,000,000,000. If we take the whole amount, fully one-half of it is owed in Canada; the other half is owed in the United States and abroad. The first benefit from inflation would be that it would help the situation in Canada in connection with at least one-half of our obligations and to some extent, not altogether, offset the increase in our obligations abroad. In the second place we would not be talking to-day about stabilization of the items mentioned in the budget if we were on somewhat of a parity with sterling and we would not be having the complaints from hon. members on this side and from hon. members opposite, if they would speak their minds, regarding the selection of a restricted number of commodities. This benefit would apply to every Canadian commodity marketed in the old country; we would get the benefit all along the line. Hon. gentlemen say that they are going to increase prices by something like fifty or sixty cents on the British pound on all the goods on the selected list sold in Great Britain. If that is the case, the goods that are not mentioned will have to take a reduction of fifty or sixty cents on the pound sterling. The argument must be good both ways. Therefore the advantage to be obtained by inflation far ouit-weighs the bugaboo held out that our exchange will cost us too much and it will be the ruination of the credit of Canada. Let us see what happened in Australia-I have a quotation which puts the matter much more tersely and better than I could:
Two years ago the people of Australia confronted a situation more desperate and more disheartening than the people of Canada have ever faced. But to-day Australia is the most prosperous part of the British Empire.

We were told that Canada was, but apparently this economist does not think so.
The six and a half million people of that dominion found themselves two years ago saddled with the colossal debt of $5,000,000,000, their solvency despaired of, their export restricted, unemployment growing, and all the influences of the world-wide depression breaking upon (them as they did upon the people of Canada.
Australia has not defaulted one dollar of its interest payments abroad, and has not asked outside creditors to cut down their claims. These obligations hiave been met in full. The spread of unemployment has been checked, and the movement turned in the other direction. Business is on the upgrade. Exports have expanded. Deflation has not been allowed to run riot there. The farmers are drawing twice as much per bushel for their wheat as the farmers of western Canada. The country is buoyant with hope, money is cheap and plentiful and public credit has been restored.
I very well remember it was stated in the house the credit of Australia was doubtful two years ago.
These changes did not come about by chance. They were the direct and calculated results of public policy. Instead of submitting to the depression, Australia has fought it, and won. The government of Canada has let depression dictate conditions, with the results that we see, and another tax-raising budget as the latest of them. The government of Australia has actually started to reduce taxation!
There were three steps in the program by which Australia countered the change in world conditions. The first was a revaluation of the currency. The gold standard W'as abandoned and the Australian pound hitched to the British pound. Export trade went up to 26 per cent more than in the previous peak year. Australia had no wheat carry-over last summer. Her farmers sold out their crop at from 60 to 75 cents a bushel at point of delivery. Our farmers sold at half the price, and 130,000.000 bushels had not left the country when the shipping year ended.
As a second step, Australia increased the amount of its currency, otherwise "inflated," but only to a limited extent. That should interest our stand-pat economists who say inflation cannot be controlled. Australia has controlled it. It has applied no farther than to modify the ruinous process of deflation, that has been allowed to have full swing in Canada.
The third step was a plan of national economy. But the "economy" was not made to fall only on the civil servants, wage earners and poorer classes. Australian holders of public securities were asked to accept a cut of 221 per cent in interest rates. To their eternal credit, 97 per cent of them did so voluntarily, and only three per cent from compulsion. Interest on mortgages was cut 22J per cent.
A conversion loan was offered to the public. The result is particularly significant. Whereas the old six per cent bonds had fallen to 80, the new four per cent conversion bonds went up to 102. The bond holders who had sacrificed 22J per cent of their interest found themselves with their whole capital in hand. That shows what the Australians think of the way the

The Budget-Mr. Stewart (Edmonton)
depression has been met and what they think about the future. It shows also that they have money to invest.


Mr. COTNAM:: May I ask who is the writer of that article?


Charles A. Stewart: It is written by a very good friend of mine in western Canada who has just recently come from Australia.


Ira Delbert Cotnam: What is his name, may I ask?


Charles A. Stewart: John Jackson.


An hon. MEMBER:: Where does he live?


Charles A. Stewart: Why can we not do something of this kind in Canada? I have heard some reasons given, but frankly I cannot agree with them. Why is it that we drift on from year to year with no concrete plan for improvement? Why is it that we are simply waiting for the economic conference, the date of which has not yet been fixed? And all the time the load of debt taxation is increased from year to year, and we come to the end of the year in what condition? This year my hon. friend has to borrow $156,000,000 to supply what he should have received from the taxpayers of this country, and he has had to do the same thing every year since this government took office. How long can we keep going un.der those conditions? There has been added to the public debt of this country nearly $500,000,000, since the government took office. To-morrow I suppose we shall be discussing the railway bill because the railways are suffering for lack of business. To my mind, 75 per cent of the cause of that lack of business are the trade restrictions that have been imposed which kill traffic. What does my hon. friend propose to do about the railways? The government are appointing trustees, trustees in bankruptcy practically, to take care of the national railways of this country. I picked up the paper the other day and read that the drop in earnings of the Canadian National Railways for February over February of last year was $800,000, and that the drop in earnings of the Canadian Pacific was $132,000 over February of last year. Is it not time that drastic remedies be thought of in connection with public affairs in this country? Is it not time that we began to realize that the abyss spoken of by the Prime Minister is much nearer than many of us thought?
Yes, Mr. Speaker, we have to do something. What other indications do I see that the government are feeling a bit serious about the situation of this country after three years
of their policies? Just a day or so ago they took the right by order in council to depart from the gold standard. I say to them in all sincerity that if they had taken that step long ago we would have had some benefit, but as it stands we seem to have all the evils and none of the advantages of staying on the gold standard. I say to them now that one of the first things they should do is to pass that order in council right away. Let them abandon this idea of bonusing the natural products of this country exported to the United Kingdom, and instead let them spread the advantage over the whole gamut of exports to Great Britain and let every producer get the advantage. I am entirely in favour of that kind of policy. I feel that perhaps the government will do it, and I pray to the Lord that they will do it. I hope that one of the first orders in council they will pass will be that very order.
Have we not arrived at the place, Mr. Speaker, where we cannot afford to borrow any more money. I believe every thoughtful man in this country realizes that. Indeed, how are we going to borrow any more money when we cannot to-day pay the interest on what we have already borrowed? We are now borrowing money to pay the interest upon borrowed capital. That is the situation of this country to-day. How long would an individual last who found himself in that position financially? Yet no one will deny that that is the position in which we find ourselves. We need not talk about the western provincial governments and their difficulties, because a part of their difficulties is a result of these obnoxious tariffs which I have mentioned; that and the excessive taxation in this country. I do not say that that is the whole cause of their difficulties. I do not defend them. I know that they have been reckless in expenditure for many years, but something has got to be done, and done quickly. I doubt very much if Canada can continue to feed 1,300,000 people very much longer. Then what are we going to do about it?
I noticed that the other day a delegation came to see the Prime Minister and urged the government to engage in a building program on borrowed money. I was relieved the other day when the Prime Minister stated in this house, in reply to an inquiry as to what effect inflation might have, that many years ago this country did inflate to the extent of S68,-000,000, and no particular harm was done. We could not discover any evil consequences. The exchange did not go very seriously against us, and up to this day we 'have not yet discovered that that inflation worked any detri-
3694	COMMONS
The Budget-Mr. Stewart (Edmonton)
ment to Canada's position. Since that time the Canadian dollar has at times been at a premium in the United States. I have no fear, speaking for myself, of inflation at the present moment. I support it and believe in it. Not only that, but I would suggest to the government that in every city in Canada there are public buildings required in the public service of this country which might be constructed. This work could be begun at once. The government could take the responsibility of issuing currency for the purpose of constructing needed public buildings in every city in this country. Let them take this responsibility as it was taken in 1915, as depicted by the Prime Minister. If they are afraid of the effects so far as exchange is concerned, let them put a clause in the agreement reducing the issue by annual instalments from revenue for a period of fifteen years. The note issue will be reduced and we shall have the improvements and we shall have added nothing to the public debt on that account. The interest charges that we would have to pay on borrowed money would take care of the whole thing and provide work for a large number of the unemployed.
Those are some of the things, Mr. Speaker, which I would suggest to the government that they might do, and do immediately, to relieve the situation. Before this budget passes, for heaven's sake let the government remove some of the grievous inflictions which they have visited upon the trade of Canada with other countries. Let us do something to get rid of our surplus products. Let the government make some move. Do not simply sit still and wait for something to turn up, because it usually does not turn up.
This government has got a great deal of credit for the courage which its leader possesses. Let him exhibit some of that courage now and take a bold step as other countries have done; for the benefit of the taxpayers of this country. If he does that, not only will it help to relieve the situation, but it will save $15,000,000 or $18,000,000 for bonusing, which this government are going to pay out of the treasury, which apparently they consider inexhaustible. We deny our people the right to trade by imposing excessive tariffs, and then in order to provide some compensation for those whom trade restrictions hit the hardest the government dips into the treasury to give a hand-out to those people in order to square things. It cannot be done. In the long run it will mean that we shall not simply be standing on the brink of an abyss, but that we shall go right over unless

drastic action is taken. I say to the government, let them take action, and so far as I am concerned they may depend upon my support.


Mr. B. M. STITT (Nelson):: Mr. Speaker,
at the outset may I join with hon. members who have preceded me in congratulating the Minister of Finance (Mr. Rhodes) upon the lucid manner in which he presented the budget. I agree with hon. members opposite that the minister did not present a very popular budget; in fact there are many points in it which I do not like. At the present time however this government is not looking for votes, and consequently this is not a vote catching budget. It was framed to meet realities, not imaginations.
I followed with a great deal of interest the remarks of the previous speaker, the hon. member for West Edmonton (Mr. Stewart) and1 also those of the chief opposition critic, the hon. member for Shelburne-Yarmouth (Mr. Ralston). After listening to the remarks of these hon. members I am prompted, in all kindness, to class them as listless diatribes, with more heat than light.
Certainly the hon. member for Shelburne-Yarmouth made a very clever legal analysis of the budget, an analysis of which only a high priced corporation lawyer like the hon. member would be capable. I believe I would not. be unfair to him if I said that ten minutes after the close of his remarks he could have risen to his feet and made just as good a speech in favour of the budget, if he were honest with himself, with as much sincerity. All down the line we have been damned for our tariff proposals. Coming from western Canada I am not one who particularly favours tariffs. I have always felt that a low or medium tariff would be in the best interests of Canada as a whole. I realize that east is east and west is west, and what will make a meal for the east will starve the west to death. But, Mr. Speaker, Canada is not made up merely of the sum of its provinces; it is something greater than that. We from the west have to make sacrifices, the same as those in other parts of Canada, for the good of the body politic. That we are doing, and doing cheerfully.
The hon. member for West Edmonton was not quite so critical as the hon. member for Shelburne-Yarmouth. Of course he talked trade and tariffs, money inflation, gold standard, and touched upon all other subjects to the discussion of which we have been listening for weeks. In view of the economic conditions obtaining in Canada to-day, I am sometimes convinced that we need a human standard

The Budget-Mr. Stitt (Nelson)
more than a gold standard. How we are going to bring about that human standard I am not at the moment prepared to suggest. The hon. member for Shelburne-Yarmouth criticized at length the deficits on the Canadian National Railways. I believe there has been sufficient evidence adduced in the house to show that the Canadian National is not the only railway system suffering from deficits. Practically all of the greater railways in the United States are in the hands of receivers. The New York Central, one of the best and, in the past, most prosperous railways of the United States is to-day, in that position. For that reason I do not know why the hon. member felt justified in criticizing so severely the Canadian National system. It is simply a victim of conditions, that is all.
With his criticism of the pensions provision in the budget I find myself very much in agreement. I do not think it is necessary to take this crack at pensioners in the civil service. I believe there are other avenues of escape and other sources of revenue which might be explored. What is the position of these pensioners working in the service? When war broke out and Canada threw in her lot with the motherland, two things were asked for, namely men and money. We may picture two chaps, probably chums, one with a good job and the other with one not quite as good. One of these chaps enlists and in due time goes to France. He may come back all knocked to pieces, with a leg off, his nerves shattered and unable to resume his former vocation. The other fellow did not enlist, but stayed at home, and to make his contribution purchased bonds. The point I wish to make is this: We talk a good deal about the sanctity of contracts. If contracts are to be honoured, then, the promise made to the man who went to France is just as sacred as that made to the man who bought the bond. I think the government is ill advised in taking the step outlined in the budget. If it were going to stop there, it would not be so bad. However we have no assurance that provincial governments will not follow suit. Then, industries throughout the country will take similar action, and the first thing we know we will have a general condition as a result of the example set by the government.
If the government feels that returned soldiers should make a further contribution, and if it can be shown to those soldiers that they ought to help meet a national emergency, they will cheerfully make their contribution. But they want fair play. They do not want the government to take money from one branch of the service and let the rest go. We should not take it from the man who
went to France, and not touch the chap who stayed home, slept in a feather bed and had three square meals a day. If it is necessary to assess returned soldiers, I believe it will be much fairer to make a five per cent assessment on pensions up to S50, and ten per cent over that, such assessment to apply throughout the whole pension list. If that action were taken I do not believe there would be a squeal from returned soldiers. They are never very far behind when contributions are necessary.
The hon. member for Shelburne-Yarmouth has criticised the government because of the falling off in trade and read many figures and statistics to prove his contention. I do not believe the people of Canada are very much interested in the trade figures for the last five years. They want to know what is happening to-day and what is going to happen to-morrow. That is what they are interested in. It must have been most disconcerting to the hon. member for Shelburne-Yarmouth when, picking up the Ottawa Citizen the morning after he made that great speech, he read on the first page the following article:
Canada's foreign trade more stable than other nations. Decrease in export trade from 1931 to 1932 only 18-4 per cent, while that of the United Kingdom 20-7 per cent, United States 27-8 per cent, Germany 33-9 per cent, France 37-9 per cent and Austria 41 per cent.
That looks as though we are not the only country in the world which has suffered a loss in trade. I 'think those figures are very interesting in view of the statements that have been made by speaker after speaker from the other side of the house. From start to finish 'their arguments have been based on the assumption that the only country suffering from this depression is the Dominion of Canada.
Now I should like to say a word with regard to the government gamble in wheat, out of which the hon. member for Shelburne-Yarmouth sought to make a good deal of capital. The hon. member damned this government for taking a flier in wheat, as he termed it. Just what do some people in western Canada who are closely in touch with the wheat situation think about that government gamble in wheat? I would not be unfair to the hon. member for Shelbume-Yar-mouth, I think, if I were to say that these men in the west have forgotten more about wheat than he will probably ever know. I have a statement before me made by Professor Swanson of the university of Saskatchewan. This gentleman does not need to be introduced to members of this house; he is one of the best informed men in western
3696	COMMONS
The Budget-Mr. Stitt (Nelson)
Canada as well * as one of our leading economists. Professor Swanson says that western Canada was saved from economic collapse by the action of the Dominion government in entering the Winnipeg grain market to buy futures at a time when heavy deliveries from western farms were pressing on the market. I think 'the people of the west will be prepared to accept the judgment of Professor Swanson in preference to that of the hon. member far Shelbume-Yarmouth in this connection.
Then the hon. member went on to the stabilization fund, which is designed to help the agriculturists in western 'Canada who are so sorely in need of help at this time. I do not need to deal with the condition of that industry; every western member at least knows full well just what those people are facing to-day. The hon. gentleman damned the government for granting this bonus, as he called it. Again I would quote the opinion of a western man whose judgment I think should carry some weight in this house, and before reading his words may I say that he is not a supporter of the political party on this side of the house. I refer to the lieutenant-governor of Manitoba, who is a very strong Liberal, and who has farmed and raised cattle all his life in western Canada. Lieutenant-Governor J. D. McGregor is reported as having said:
The dawn of a brighter day for the western farmer as tile result of the Rhodes agricultural stabilization fund was predicted by His Honour the Lieutenant-Governor. J. D. McGregor, at the animal meeting of the agricultural bureau of the Winnipeg board of trade-
He goes on further to say:
I am sure we are on the upturn . . . because of the fact that we are getting into the British market on a better basis. It will give an impetus to the marketing of a lot of our products. There is a possibility also of entry into United States markets, but there is no doubt that the British market is our market if we can cater to it.
I think that statement pretty well disposes of the arguments of the hon. member for Sheilburne-Yarmouth.
I do not intend to follow the diatribes of those two hon. gentlemen at greater length; I am going to devote the remainder of the time at my disposal to the discussion of matters that particularly concern my own constituency. Two weeks ago I had no intention of speaking during this debate, but one day the hon. member for North Waterloo (Mr. Euler) made a vicious attack on the Hudson Bay railway, and I have never been backward in my support of that enterprise.
[Mr. B. M. Stitt-1
I have nothing against any hon. member opposite, but the hon. member for North Waterloo is one of those hon. gentlemen whom I like very much. I like his delivery; I like his attitude in debate, but I must say that I thought it was unfair of him to attack this project at this time. The Hudson Bay railway and the port of Churchill are just being put into operation this year. Previously that road has not been open for traffic; there was a dead line at mile 412, and Churchill is mile 511. If you wanted to get a passenger or a package of freight to Churchill you almost had to go down on your knees to some official in order to get a special permit. So really this is the first year the road has been thrown open for unrestricted traffic, and under those circumstances the hon. gentleman was very unfair in making his attack. We from the west who are supporting this project are not heard day after day and week after week damning the government because they have put $500,000,000 into a canal system in the east which does not even pay its operating expenses. You do not hear us damning the government for the Prescott elevator which cost $10,000,000, or for the Montreal bridge which cost $19,000,000. You do not hear us referring constantly to a dozen harbours in Canada that are not paying any interest on the investment. Right in the budget the minister was forced to take $26,000,000 from the active column and transfer it to the nonactive column, simply because these harbours are not paying any return on the investment. Why then do these eastern members pick out this particular project and damn it all the time? I would say to my hon. friend that this is no time for this narrow, picayune sectionalism and provincialism. If this country is to become great there must be the heartiest cooperation between all parts of the country. I sincerely hope I have heard the last of this sort of thing in this house. Give this road a chance.


William Daum Euler: My hon. friend will pardon
me if I remind him that my statement was made in reply to the remarks of the hon. member for Peace River (Mr. Kennedy), I think it was, in which he attacked Ontario and Quebec with regard to tariffs. I had no intention of making a vicious attack; I do not think I ever made a vicious attack on anyone or anything in my life. Would the hon. gentleman say that this was a fair attack' to be made by a western member?


Bernard Munroe Stitt: I am sorry if I
placed the wrong interpretation on the remarks of the hon. member; perhaps I am a

The Budget-Mr. Stitt (Nelson)
little sensitive with regard to this project, but I will defend it whenever it may be necessary.
During the discussion of the estimates the Minister of Railways (Mr. Manion) was asked certain questions, and there appeared to be some confusion as to the insurance charges out of this port. I am going to present these figures to the house. They are authentic; they are compiled from figures furnished by Thomas Harling and Sons, who chartered all the boats out of Churchill, and who should know what they are talking about. Before I conclude I will also state what I consider to be the proper time to open and close that port, because there was a little confusion in that regard also. These figures are as follows:
Cost via Churchill
Cents
per
bushel
Ocean freight 3/3 per 480 pounds at
exchange $4.10	8.325
Ocean insurance $1.25 per $100 value

say 60 cents per bushel	0.750
Out-turn superintendence and expenses
at discharging port	0.500
Say, total	9.575
Cost via Fort William and Montreal
Cents
per
bushel
Fobbing and expenses at Fort William.. 1 5
Lake freight	6.0
Lake brokerage	25
Lake insurance-25 cents per $100 value
say 60 cents per bushel	15
Fobbing and expenses at Montreal	375
Ocean freight 1/9 per 480 pounds at
exchange $4.10	4.48
Ocean insurance-25 cents per $100 value
-say 60 cents per bushel	15
Out-turn superintendence and expenses at discharging port	5
Say, total	13 405


Mr. BOWMAN:: Shipping to where?


Bernard Munroe Stitt: Shipping to Liverpool, and this in spite of the fact that we are paying just five times more insurance out of Churchill than they are paying out of Montreal. In the case of a steamer carrying 280,000 bushels, the total insurance out of Churchill would be $2,100 as compared with $500 out of Montreal. That gives a fair idea of the difference in insurance rates; it shows the iniquitous rates charged out of that port at the present time.
Another commodity which is as important to the west as wheat is flour. Last year some of the western milling companies shipped some flour out on one of the boats and saved 19 cents per hundred by doing so, even at the high insurance rate. That I think is very important to western Canada.
Next, let us take the live stock rates, Churchill compared with Montreal. I will give some of the points and the corresponding figures:
Live Stock Rates to Churchill and Montreal
To Montreal To Churchill
Savings in rates to tidewater
From-
Winnipeg stock yards
Swan river	
Yorkton	
Saskatoon	
Moose Jaw	
Edmonton	
Calgary	
(Rates per car of 20,000 lbs.)

Average reduction per car	'.	100 57
or 501 cents per 100 pounds.
These rates apply all down the line on dairy produce, wheat and wheat products, and every other commodity produced in western Canada. All these savings have been made in spite of the fact that that route is discriminated against most unfairly by the marine insurance underwriters.
I come now to the question of season. The Minister of Railways (Mr. Manion) was asked some questions with regard to the
season and I think the answers he gave were based on the length of time the port was open last summer. I think we should clear that up. The time that the first steamer arrives there and the time the last steamer leaves should not be considered as the length of time the route is open, because while the government maintains an icebreaker in the straits to assist incoming and outgoing vessels, the fact is that almost as soon as the last
3698	COMMONS
The Budget-Mr. Stitt (Nelson)
vessel clears she immediately leaves there and comes back east and finishes -her work for the season somewhere on the Atlantic coast. So that it is hardly fair to say that the open season lasts only from the time the first boat arrives until the last boat leaves. I have some figures with regard to the dates of
opening and closing of the harbour at Fort -Churchill,, taken from the Hudson's Bay Company log books. It is therefore official. The average is about four and a half months, from 1825 to 1894. I will- not burden the house by reading this long list but will hand it over to Hansard for publication:
Dates of the Opening and Closing of the Harbour at Churchill
(Compiled by the late Senator Ferguson, P.E.I. from Hudson's Bay Company's log books)
Year	Open	Closed	Length of open season1824	Nov. 2	1825	June	12	Nov. 18	5 months, 6 days1826	June	11	Nov. 22	5 " 11 "1827	June	24	Nov. 13	4 " 20 "1828	June	22	Dec. 1	5 " 9 "1829	10	1833	June	18	1834	June	21	Nov. 15	4 months, 25 days1837	Nov. 1	1838	June	27	Nov. 4	4 months, 8 days1839	June	21	1841	Nov. 25	1842	24	1843	June	25	1844	June	24	Nov. 23	5 months1845	June	19	1846	June	10	Nov. 28	5 months, 18 days1847	26	1848	June	19	Nov. 6	4 months, 18 days1849	Nov. 27	1850	Nov. 15	1851	Dec. 1	1852	June	13	Nov. 28	5 months, 15 days1853	24	1855	June	19	June	9	1857	June	21	1858	Nov. 11	1860	Nov. 8	1861	Dec. 4	1862	June	7	Nov. 5	4 months, 29 days1863	June	5	Nov. 11	5 " 6 "1864	June	21	Nov. 14	4 " 24 "1865	2 6	1866	July	2	1885	Dec. 4	1886	17	1892	June	19	Nov. 11	4 months, 23 days1893	June	19	Nov. 4	4 " 16 "1894	June	6	Nov. 19	5 " 13 "Average	
. 	June	19	Nov. 18	5 monthsEarliest (in 1863)	June	5	Nov. 1	Latest (in 1866)	July	2	1837 Dec. 4	1861 andl885	5 months, 18 daysin 1846 4 months, 8 daysin 1838
This table extends from the year 1824 to the year 1894, a period of seventy years; it gives the date of the opening and closing of Churchill harbour for all of these years, taken from the records of the Hudson's Bay officials, 
and it is found that the average day of opening is June 19, and the average day of closing was November 19, and that the average period of open navigation is five months.

The Budget-Mr. Stitt (Nelson)
Doctor Robert Bell gives his testimony with regard to other points in the bay, somewhat south of Churchill. He says:
I have a record of the principal phenomena of the seasons at Martin's falls, on the Albany, extending through a period of fifty years, and from it I find that the river is open there on an average of six months in the year. _ I have also a record of the dates of opening and closing of Hayes river at York Factory, extending over more than fifty years, from which it appears to enjoy an average of fully six months of open water. The Nelson river is open for a longer period.
I will add to the foregoing statement the opinions of some men who know what they are talking about. They are opinions that carry more weight than those of gentlemen who sit behind mohogany desks in the old country and set these rates-men who would have a good deal of trouble finding Hudson bay on the map, to say nothing of having any information about it. I will give the opinion of Captain Bernier, an explorer who spent almost a quarter of a century in the northern waters and who knows the Hudson strait and bay probably better than any other man in the world. What does he say? This is the evidence which he gave before the Senate investigating committee:
The Hudson bay and strait are open to navigation the year around, but as far as the strait is concerned icebergs block the way in places according to where the current into or out of the bay drives them. With wireless stations established so that ships could be directed in their course the Hudson bay ports would rank amongst the most important on the continent, owing to the very appreciable difference in distance to Europe compared with that of other ports.
Radio stations and other aids to navigation have been installed and it is now admitted by all shipmasters who have been there to be one of the most foolproof routes in the world. I talk to almost every captain who has sailed into Churchill in the last two years, men who have sailed the seven seas and been all over the world, and every one of them says, without hesitation, "Mr. Stitt, we would much rather go into Churchill than into Montreal, any day." So that it does not lie in the mouths of eastern members to condemn the route before it has been given a fair chance to make good.
I hope that this year the government will see fit to declare the port officially open, and that some sort of celebration will be held there worthy of a route which is going to mean so much to the farmers of western Canada. We who are behind this route, who have given our time and money to bring the project to a successful conclusion, are going to make it our business to see that it gets a fair 53719-234
chance. We are going to tolerate no shenanigans or monkey business from anyone. I do not mean by that that either this government or any member of it has made any attempts at monkey business. I will say for the Minister of Railways that he has cheerfully done everything that any man could be expected to do to make the route a success, notwithstanding adverse criticism; and I can assure the house that had he failed in that respect at any time it would not have been long before I would have got on my feet and told him about it.
This route is being thrown open for business this year. It is still under the control of the Department of Railways and Canals and is in no way connected with the Canadian National Railways. This railroad runs through my constituency and I know a great deal about the territory it serves. This is one of the richest undeveloped pieces of territory in the world to-day. There are 178,000 square miles of virgin territory adjacent to this line, sixty peT cent of which is known to be mineralized. Only two per cent of that area has been prospected, yet we have one of the largest producing mines in the world at Flin Flon, a mine turning out $40,000 of new wealth every day. This development would not have been possible had the Hudson Bay railway not been constructed. Prospecting and exploration work is going on at a dozen different points and new gold finds are being made almost monthly. I hazard the guess that within the next two years there will be ten producing gold mines in that district turning out at least $15,000,000 to $20,000,000 of gold per year.
There are millions and millions of cords of black spruce, the finest pulpwood in the world, not to mention the millions of horsepower still undeveloped. There are other mineral resources besides gold as well as great fishing resources, despite reports to the contrary. I should like to see a proper organization installed as quickly as possible to handle this railroad. An operating superintendent who knows railroading from the ground up should be placed in charge. At the present moment a construction engineer is operating this line. I have no criticism to make of this man as a construction engineer because he is very honest and efficient in that line but we have reached the stage where we are going to put on long pants and a proper organization should be provided. If possible, a new divisional point should be made at The Pas. At the present time there are 772 miles of railroad running out of The Pas. There is the Canadian National line from Hudson Bay Junction to The Pas, the Hudson Bay



The Budget-Mr. Stitt (Nelson)
railway from The Pas to Churchill, the Canadian National line from The Pas to Flin Flon and the Canadian National line from The Pas to Sherritt Gordon Mines on lake Kississing, in all a total of 772 miles. This mileage is the average mileage covered by division points throughout the Canadian National system. With a new divisional point having an operating superintendent in charge, a colonization department could be organized. There are thousands of acres of the finest agricultural land in the world adjoining this railroad and no attempt has been made to tell people about it. The operating superintendent could organize a traffic department which could go out after new business for this road. One of the greatest difficulties facing this road is the fact that it is not connected with the Canadian National Railways although owned by this government. The Canadian National station agents throughout the west at points which this road could serve well and profitably go out of their way to route grain to Fort William or Port Arthur rather than to Churchill over the Hudson Bay railway. They do this because they get no credit for any new business they may obtain for the Hudson Bay line whereas they do get credit for new business obtained for the Canadian National Railways. If this road is going to be given a chance a new divisional point should be created with an operating superintendent in charge.
It is hoped that we will be able to have an official opening of the port this year. If that does take place I hope that as many members of this parliament as possible will attend. I can assure hon. members, especially those from the east, that they will have their eyes opened. A couple of years ago the Canadian chamber of commerce made a trip to Churchill in a special train. I can recall the fur coats and other heavy wearing apparel which they brought along but after their arrival at Churchill they found the weather so warm that the heavy coats were soon placed back in the cars. It was a bright sunny day, just the kind of day you get here in July. We have that kind of weather for almost six months in the year. It is true we have extreme cold and heavy snow storms, but such weather is to be expected in any country bordering on the Arctic. Personally I prefer that kind of weather to the so-called climate you have here. We at least know that we will have winter weather during the winter season. On behalf of The Pas and the north country I extend a most hearty invitation to all members to pay us a visit. They will be sure of a welcome such as only true northerners know how to extend.


Mr. MARTIAL RHEAUME (St. John's-Iberville) (Translation):: 
Mr. POULIOT (Translation):: We would
have to tax motor care made in the United States.


Pierre Auguste Martial Rhéaume: Then, we
have the automobile de luxe. A duty of 5 per cent has just been levied on tires. Do you think it fair and reasonable, sir, that a poor worker or farmer, who is obliged to have a motor truck to transport his products to the market or his milk to Montreal or elsewhere, should be placed on a level with millionaires who own a Packard, a Pierce-Arrow or the best makes of motor cars, and forced to pay 5 per cent on tires. We should have established a difference. It may be objected that a Ford tire does certainly not cost as much as one for an automobile de luxe. That is a fact. But the tires for ordinary truck with a capacity of one or two tons, which are used by the working class to earn a livelihood, are as expensive as those of an automobile de luxe. Ooukl not a person, who has the means of purchasing a motor car of $4,000, $3,000 or
S6,000,-that is his business after all-could he not, I say, afford to pay 5 or 10 per cent duty? One may object that 10 per cent is a high duty. However, when 6 per cent is levied on articles of prime necessity, which are absolutely necessary to keep one alive, do you consider, sir, that a tax on luxuries of 10 per cent is too much? I state that it is not. When comparing the sales tax on articles of prime necessity with that of a tax on luxuries of 10 per cent, it is certainly not an exaggerated one.
I happened to be in Montreal, yesterday, and called on a friend who is employed in a furniture store. He asked me to look over the new furniture they had received for the spring sale and showed me a bed room set; the latest thing out, made in Ontario. I inquired the price. It was $850. It is rather expensive, but very beautiful, indeed, a marvel, I said; however, a person who can afford to pay $850 for such a bed room set, when he can purchase a good one for $50 or say $100; I state, that he certainly can afford paying a tax to the country.
When a person buys his wife a silver fox fur and pays $50, $60 or $75. . .


Mr. PARENT (Translation):: $150.


Pierre Auguste Martial Rhéaume: ... also
furniture, dresses and many other things, do you think, sir, that it is unfair to put a tax on luxuries? When a lady purchases an evening dress and pays $35 or $40, the 6 per cent sales tax is included; when you require a comfortable overcoat and have to pay $25 or $30, the 6 per cent sales tax is also included. If you require an ordinary suit you must pay $25 and that includes the 6 per cent sales tax; if you require a tuxedo suit to attend banquets three or four times a year or you think you should have one in your wardrobe for your own satisfaction, you certainly are able to afford to pay 10 per cent more to help out the poor people of this country to weather the crisis.
Briefly, sir, I consider that the present budget-I do not blame the hon. Minister of Finance with whom I am personally acquainted, having chatted, on occasions, with him, he is a charming fellow, always well disposed, however, circumstances, so to speak, forces him to become the hangman. I state that before levying a tax on all articles of prime necessity, on farm implements which have been increased from 150 to 300 per cent, the government should weigh their acts after the promises made, in 1930, and the solemn pledge given to the people of this country.
When a candidate aspires to become mayor, councillor or member of parliament, either
The Budget-Mr. Rheaume

for a town or county, he pledges himself, if elected, to carry out certain reforms or measures. When the Prime Minister was touring the country, he also made promises to the working classes in Montreal and Sherbrooke. Last Saturday, while in Sherbrooke, I met a workman who told me that, when the Prime Minister came to Sherbrooke on his election tour, he had gone to the Armory to hear him speak, and, the Prime Minister had pledged his word that, if elected, within two months all the factories of Sherbrooke would be in operation, that everybody would have work. Although a Liberal he said, I took him at his word and voted for the Conservative candidate.


Jean-François Pouliot: He was
wrong.


Pierre Auguste Martial Rhéaume: There is
no doubt about that. Rest assured that he will not cast his vote for him at the next election. However, when the Prime Minister or the leader of the opposition, a minister of the crown or a candidate makes a promise to the people, he is bound in honour to fulfil it, yet our good friends opposite, from the eastern townships, made promises to the farming class, and since I have been in the house, I have not seen one rise and protest against the conference agreements entered into last autumn, such as the tariff increase on barbed wire and cream separators; no, not one rose in the house. The Liberal party was criticized for permitting New Zealand butter to enter this country, yet, to-day, it is flooding the market and not a protest is heard. Again, I state that they are false to their pledges. When a candidate presents himself before his constituents and pledges his word, it is a solemn pledge, it is not, one may say, an oath (serment), but it is his word of honour.


Mr. BOUCHARD (Translation):: That is
an anguish (serrement) of the heart.


Pierre Auguste Martial Rhéaume: Must we only act under oath! When a man has probity and honour, when he makes a promise, he fulfils it. His party may blunder; however, he must have the courage to rise, point out the errors of their ways, and protest. The other day an hon. gentleman opposite, the member for North Renfrew (Mr. Cotnam) protested on behalf of his constituents because lambs were not selling, on the Montreal or Toronto market, the price they should I congratulate him because I think he is the only member opposite who had the courage

to rise in the house and protest on behalf of the farming class.
In closing my remarks, sir, I state that the government has done nothing for the farming and working classes. Since three years the government has been in power, it has taxed, overtaxed and treble taxed the people. When the reckoning day comes, let me assure you sir, that the people will remember; and we, the Liberal party, are anxiously awaiting the day when the Canadian people will recover their rights and again enjoy prosperity.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILL


[Stage Direction]
Bill No. 49, respecting a certain patent application of Fred Charles Fantz-Mr. Anderson (Toronto-High Park).


[Stage Direction]
The house resumed 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, and the amendment thereto of Mr. Ralston.
Mr. W. T. LUCAS (Camrose):: Mr. Speaker, may I first take this opportunity of offering my congratulations to the hon. Minister of Finance (Mr. Rhodes) for the very complete and businesslike statement which he presented to the house and the country in his budget speech of March 21. In my opinion it gives to the ordinary person a very clear and vivid picture of the financial, condition of the country. It is a statement which should be easily understood, but if not, at least the application of its provisions will I think be readily felt by all. The addition of 8156,000,000 to our national debt should bring home to every citizen the fact that in spite of her great natural wealth, and her virile man power, Canada, under our present financial

The Budget-Mr. Lucas
system, is fast building up a colossal interestbearing debt which if not properly dealt with will eventually drag us down to ruin.
Perhaps one of the bright spots in the budget may be found in the first part of the minister's speech where under the heading, a short review of world economic conditions, he points out that a world financial storm of unprecedented severity first started in Austria, passed from one country to another, finally reaching the United States, which, with its huge gold reserves, had been thought to be impregnable. But the world has recently witnessed the financial debacle which took place in that country, and many are coming to realize that after all gold is not real wealth. Now, however, that the last stronghold has been bombarded and compelled to yield, it may bring home to the people of the world the fact that the financial policies of the past have proved themselves totally inadequate to meet present day conditions, and also that the men who have guided and directed those policies will either have to change their views or give way to men with a clearer vision of the new world in which we live, a world endowed with great wealth, with plenty for all who are ready and willing to work and play their part in society, or else carry on as we are doing, and be dragged down into the bog of misery and despair. The choice, Mr. Speaker, will have to be made and made quickly, for to quote the words of the Minister of Finance in introducing his budget, "Events are moving rapidly, driven by the urge of economic necessity."
Under our present financial system the object of every minister of finance is to balance his budget, a very laudable thing to do if it can be done without entailing too much sacrifice on the pant of the masses of the people. But with a total expenditure of approximately
8418,000.0000, only 8145,000,000 or roughly 35 per cent, of which is controllable expenditure, and with a total deficit of $156,000,000, if we are to balance the budget through economy alone we would have to wipe out all salaries and all services to the people, together with all upkeep of ou-r public works and public buildings, and on top of that find another $11,000,000. Ooe realizes then how absurd the argument becomes Yet we have such bodies as the Montreal board of trade circularizing the members of the House of Commons. advocating the cutting down of expenditures in order to balance the budget. A banker from the same city is also reported on the front page of the Ottawa Citizen, on March 23 last, as saying in regard to the present budget that the only disappointment in the
budget speech is a lack of a serious effort to reduce expenditures. I wonder just what services and expenditures these men would have us cut out. Or do they mean that interest charges, which is by far the largest item in our uncontrollable expenditure, should also be cut?
A careful perusal of the finances of the country shows that while the government have been making heroic efforts to reduce controllable expenditure by the reduction of salaries and services, and so forth, any savings which have been made in this direction have been largely offset by an increase in interest charges. For instance, at page 3223 of Hansard the Minister of Finance makes the following statement:
It is proposed therefore that the original allotments to departments of the votes for controllable services should, when supply is released in the new fiscal year, be so modified that ten per cent of the total, or approximately $14,000,000, will be withheld.
It will be noted that while $14,000,000 is thus to be saved during the coming year, on top of the cuts already made, our interest on the national debt inoreased last year by $13,-
820,000,	or almost all of the saving to be made. It will be seen therefore that while we sacrifice human values, that sacrifice goes to compensate the owners of so-called wealth. In my opinion, Mr. Speaker, it is not the cost of salaries and services that is strangling the people to-day, but our ever-increasing debts and interest charges, the burden of which has been increased tremendously during the past few years by the drastic fall in the price level, thus lessening our ability to pay.
Coming to the budget itself, I should like to deal for a few minutes with some of its provisions. The minister in his budget speech referred to debts and interest. As is well known, this question is now before the banking and commerce committee, and it is to be hoped that when that committee makes its report to the house, constructive suggestions will be offered which will give a lead in dealing with this vexed question. I should like to point out, however, that the figures so far disclosed show debts so enormous that it is hopeless to think of paying them in full. The figures given for dominion, provincial and municipal governments, direct and guaranteed alone show the staggering sum of $6,539,728,053, and when one adds to this corporation obligations other than those guaranteed by government, farm and urban mortgages and private debts amounting to many more billions of dollars, and when one realizes that on top of this our ability to pay has been lessened by fifty per cent or more through
The Budget-Mr. Lucas

the drastic fall in price levels, one then begins to realize the tremendous burden which is dragging us down and commences to see the cause of our present predicament. The proposal to lower interest rates is a step in the right direction but the reduction should be made worth while. However it is not only on savings deposits that interest rates should be reduced, but on bank, mortgage and other forms of debts upon which rates of interest are far too high.
Next we have reference to the conversion loan. By lowering interest charges the minister believes substantial savings can be made to the public treasury. I hope so. I see no reason why Canada should not follow the lead given by Great Britain and Australia, and if necessary make the conversion compulsory. This is no time to quibble with these matters. From all accounts Australia was in a worse financial condition than Canada, but she tackled this problem in a courageous manner. The economy was not made to fall only on the civil servants, wage earners and poorer class of employees. Australian holders of public securities were asked to accept a cut of twenty-two and a half per cent in interest rates, and the interest rates on mortgages were also cut by that figure.
While I heartily agree in principle with sanctity of contracts, I cannot for the life of me see why a contract with a bondholder should be considered any more sacred than a contract to compensate returned soldiers for disabilities received while fighting in defence of our country. Had it not been for these men who were so ready and willing to offer their lives, if need be, bondholders might have found themselves with something of very little valum May I ask if a government employee holding government securities will have his salary reduced by the amount of interest he receives? If not, why not? Why distinguish between pension payments and interest payments? If I might quote a few lines from the chronicle of the Pilgrim Fathers-
It wonderfully encourages men in their duties when they see the burden equally borne.
I will say this, however, that there are pensioners drawing one hundred per cent disability pension and holding jobs requiring one hundred per cent efficiency. I believe this should not be allowed. There can and should be adjustments in such cases, but lower paid men should not be penalized.
Next we have the proposed agricultural stabilization fund to apply to certain agri-

cultural and fish products. May I congratulate the government upon taking this step, which is at least a partial recognition of some of the handicaps under which the farmer has laboured? But, Mr. Speaker, those steps should have been taken long ago. If it is good for certain products, why should it not be applied to all? Because if there is one thing which has been strangling the trade of Canada it has been the disparity in exchange against our goods in British and foreign countries, the currencies of which have been depreciated so much more than our own. In regard to the present proposal, however, it remains to be seen whether the producer or the exporter receives the benefit. I am disappointed that the government has not taken any steps to set up an agricultural export marketing board, about which we heard so much last year. Had this board been properly constituted, and had it been given complete jurisdiction over exports, over shipping, and so on, there is no doubt that the producer would receive full value from the stabilization fund. It is hard to estimate the number of millions of dollars our farmers have lost through the disparity in exchange, and had the farmer benefited, as he should have done, this benefit would have been reflected in an improvement in all lines of business.
The reduction in the value of the pound from $4.40 to $4.25 for duty purposes is another step in the right direction. Again, however, it does not go far enough. The whole step should have been taken last year when the conference agreements were consummated, if we were to derive any real benefit from those agreements. I wish to commend the government upon the assistance it gave to the cooperative wheat pools, and for its efforts to stabilize the price of wheat. Again may I say, however, that much more effective assistance would have been given by bringing our dollar to a parity with sterling, which action would have helped not only agriculture but every other industry in the country. How can our farmers compete against those of countries which have tied their currency to sterling? Australia and New Zealand currency have even gone lower than sterling. In the last issue of the Commercial Intelligence Journal dated March 25, and issued by the Department of Trade and Commerce I find the following at page 419:
Not taking into consideration the acreage bonus which farmers anticipate, growers have recently been receiving from 2s. to 2s. 6d. per bushel of sixty pounds, in Australian currency, for wheat delivered at country railway stations, the disparity being the freight distance to the seaboard.

The Budget-Mr. Lucas
Taking the minimum price of two shillings, it would equal 48 cents per bushel net to the Australian farmer, compared to 30 cents or under for our Canadian western farmer. Some hon. members who preceded me in this debate, speaking on this question, have when making comparisons converted Australian currency into Canadian currency. But may I say that the Australian farmer does not pay his debts in Canadian currency; therefore their argument falls to the ground.
The increase in the income tax is to be commended. Coming on top of the increase of last year it is very substantial, but there is still room for further increases, especially in the higher incomes. I am pleased to note that my suggestions of last year when dealing with taxation in regard to bearer bonds have been adopted, and I am confident this should realize a substantial amount of revenue.
The two cents a pound tax on sugar is in my opinion excessive, and will place a tremendous burden on the already overtaxed householder. The poor man with the large family is the one who will be hit hardest, and our farmers in the west who are struggling to make a living, and the good housewives who try to store up some of the wild fruit to be used by the family during the long winter months, will find it more difficult.
The removal of the exempted list under the sales tax is particularly bad at this time, as it will only tend to lower the standard of living of a great mass of the people, when as a matter of fact what is needed is an increased standard of living so that the great body of people who exist on a mere living wage, or less, may be enabled to consume more of the surplus goods on hand, and thus create a demand, which would again set our factories running and relieve the unemployment burden which is weighing so heavily upon us all.
In fact, Mr. Speaker our action reminds me of the following lines in the Church of England prayer book:
We have left undone those things which we ought to have done, and we have done those things which we ought not to have done, and there is no health in us.
Certainly there is no health in our economic life to-day.
I now come to what I consider by far the most important announcement in the budget, namely the appointment of a royal commission to study the organization and working of our entire banking and monetary system, to consider the arguments for and against a central banking institution, and to make recommendations for revising or supplementing our existing
banking and monetary legislation. In my opinion, Mr. Speaker, the future happiness and prosperity of the people of this dominion, for at least some time to come, will depend largely on the outcome of this investigation, and the success or failure of this commission will depend wholly on the type of men selected. If the government appoints men of the old school, with the orthodox bankers' viewpoint they might just as well save the country the expense of such a commission. If the world is to be saved from the catastrophe which is now facing it, far-reaching changes will have to be adopted in connection with our banking and monetary	policies.	One	of the greattroubles in the past has been that the people have been kept in ignorance in regard to monetary problems and the intricacies of finance. In	support of	that	statement Ishould like	to	quote a	short	passage from
Norman Angell's book, The Unseen Assassins, at page 143:
We deem	it	necessary	to let our scholars
know about the structure of the earth, its movements round the sun, facts in geography, botany, zoology, something of the stories of kings and queens, snatches of dead languages, and much else, but in all that strange medley of information not one word, from the day that he enters school to the day he leaves, about the most indispensable, the most powerful and the most frequently used of all the devices of our daily lives: the money in our pockets and in our banks, the thing about which-or about matters intimately related to it-we are all of us in some measure called upon to make vital and far-reaching decisions, decisions of _ public policy which affect enormously the distribution of wealth and the fives of millions. Abiput that, we are, speaking broadly, taught nothing whatsoever. The thing which, of all things in human society, concerns us most insistently every day, almost every hour of our fives, and aboxit which man has made some of his worst mistakes and developed his worst understandings-something which has grown into an elaborate system and around which our whole civilization rotates-is something which our popular education completely neglects.
As this quotation points out, the average citizen has been taught little or nothing about monetary matters, and in the past a tendency developed to place our financiers and bankers upon a pedestal surrounded by a veil of mystery, behind which it was considered the rankest kind of sacrilege for the average citizen to attempt to penetrate. But, Mr. Speaker, the happenings of the last few years have disillusioned many people; they have discovered that these men were far overrated and that these so called pillars of finance, upon whom they depended, after all were mere men of clay. The crisis through which we are passing, in my opinion, is purely monetary in character. Other adjustments will have to be
The Budget-Mr. Lucas

made, but they will all prove futile unless we tackle the root cause of the disease and find a remedy for it. I am supported in that statement by an article appearing in the financial column of the Toronto Saturday Night, a publication printed in one of the financial centres of the east. Under date of January 7 Saturday Night has this to say:
The immediate cause of this depression (which need never have occurred) was the inadaptability of our monetary and credit systems to latter day requirements and their inability to stand the extreme strains to which they were subjected, notably by the payment of war debts in gold. Though serious unemployment is a product, this depression is a monetary and not an unemployment depression, and solution of our monetary problems will enable the cure of the unemployment evil.
The Liberal party pins its faith largely on a lowering of tariffs as a remedy. I do not ignore the strangling effect of tariffs as they exist throughout the world to-day but, Mr. Speaker, if we are effectively to lower tariffs we must first remove the root cause. Last year the London chamber of commerce appointed a committee of its members to study this question and make a report, which might form a basis for a discussion of the monetary question at the Imperial economic conference held in Ottawa last July. I think those in charge of the conference made a tremendous mistake when they ignored the report and treated this most important question so lightly; one might almost say it was conveniently shelved. If one will take the trouble to read this report and study the names of the men who composed the committee I think it will be agreed at once that they are men of the very highest standing who could not by any stretch of the imagination be accused of being imbued with communistic doctrines. I should like to quote just a few lines from this repent:
The committee, on January 5 last, issued a memorandum, for private circulation, giving its conclusions. These, however, related only to the domestic aspect of the question, and were designed to provide a currency which would rise and fall automatically with business activity, instead of in accordance with the fortuitous influx and efflux of gold.
The following resolution was adopted:
That in the opinion of this council, monetary reform is of outstanding importance. The arrest of progressive deflation is, in their view, the condition precedent to a restoration of world prosperity, and no other measures which may be taken can prove effective substitutes.
The report goes on to say that the problems with which industry and commerce are faced are these:
(i)	To restore and expand the purchasing power of the peoples of the world, without
[Mr. Lueas.l
which unemployment must remain, and defaults, national and individual, must increase.
(ii)	When once a fair price level has been restored, bo eliminate so far as may be practicable, fluctuations in price level due to monetary causes.
I should like hon. members to listen to this next paragraph:
(iii)	To remove the causes which are inducing nations to strangle world trade by tariffs, quotas, exchange restrictions, etc.
In the final summary, speaking of British domestic matters, the report recommends:
The Bank of England should become a central bank pure and simple. The currency should be issued against all commodities, as represented by the eligible commercial bill-i.e., a bill relating to current production and distribution, and not against one commodity, gold, which can be cornered.
Finally the report states:
With full internal purchasing power in the participating countries, none would object to a fair exchange of commodities with other countries. since imports, visible and invisible, would equal exports, visible and invisible, to a corresponding value. (This does not, of course, mean that the exports to an individual country would necessarily equal the imports from it, or vice versa.)
And again:
Excessive tariffs would therefore tend to disappear. Differences between nations in the volume of internal taxation would be a matter of domestic concern to each, and would not cause disequilibrium as between one nation and another.
International money payments, whether in respect of interest or debts, reparations, etc., could only be received in the form of goods or services against which no corresponding export was made by the receiving country.
There are those who state that the members in this corner stand for a system of uncontrolled inflation. I want to deny that charge. What we are opposed to is any controlled or uncontrolled policy of deflation such as we have had in the past few years. When we find that the total amount of bank loans and currency in Canada is approximately $700,000,000 less to-day than it was three years ago it bears out the statement I have just made. The hon. member for Macleod (Mr. Coote) speaking a few days ago quoted Irving Fisher as saying that we want neither inflation nor deflation but that we should keep the car in the middle of the road. Perhaps I might illustrate this in a more homely way. Let us take a standard quart of milk, with which everyone is familiar. If we add sufficient water to make two quarts we all know what will be the result; we will have twice the quantity but the food value will not be any greater. This might be called inflated milk. If we start again with a standard quart of milk and put it through a

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process of dehydration we also know what will be the result; finally we will have what is called powdered milk. This might be called deflated milk. If to that powdered milk is added sufficient water to fill the bottle then we will once more have the standard quart of milk with which we started. No one could say that was inflated milk; rather it might be called reflated milk. We would apply this principle to our money problem; this might be called reflation, and the object would be to restore the volume of circulating media to a normal relation to the volume of business to be done. Is there anything unsound in such a proposal?
I venture to predict that a measure of inflation will be adopted at the coming world conference, most likely by depreciating the value of gold in our dollar; but it will be inflation just the same. So long, however, as those in authority feel that they must still tie our -currency to some metal, if we get some measure of inflation that will give some assistance I am sure we shall all appreciate it.
Let us pause and ask ourselves just what is wrong to-day. Has nature failed us? Has man's inventive genius lessened? Has the large percentage of the human race refused to work? Is there any real lack of demand for the necessities and luxuries of life? Have our transportation systems broken down? No, Mr. Speaker, emphatically no. None of these things have failed nor are they seriously at fault, but the one thing money, using that term in its broadest sense, our medium of exchange, has ceased to function properly, to -distribute the goods which we can produce so abundantly; and until the whole monetary system is made to serve mankind, instead of mankind serving money as it is doing at present, I see no hope for a permanent recovery.
Let all the money in the world disappear to-morrow and ask yourself: Would the world be any poorer, so far as the necessities of life are concerned? Money is not wealth, but only a symbol of wealth. I could quote many authorities in support of this statement, but I will not take time to-night to do so. Are we then to starve amidst the greatest plenty the world has ever known? Surely the intelligence of mankind, which through science has conquered and subdued to his commands the superhuman powers of nature, will not now perish because forsooth we cannot find sufficient gold, which is of no value so far as human needs are concerned.
Here may I quote a short passage from one of Professor Soddy's works, The Inversion of Science, at page 13:
What solution have the statesmen to offer? Mr. Baldwin has recently remarked that it is no use our being able to make things if we
cannot sell them, a true deduction from what Ruskin termed mercantile economy, but not a statesman's sentiment. Is there no one now in the state to regulate its bits of paper and metal so that people who can and do make things can buy them? The recent president of the board of education, justifying his betrayal of his trust, remarked, "The grim goddess of finance exercised, as she always must, an inexorable power.'' These utterances show that the ostensible government of this country is not its real government and that^we are in the grip of a money power which will rivet unemployment and war upon society till its doom.
Only a few short years ago the world was gripped in a death struggle, the greatest war ever known in human history, and while those who fought thought they were fighting to end war, we find now, only fourteen years after, almost superhuman efforts being made to avert another conflict. And what is the main cause? Let me quote again from the same work of Professor Soddy, at page 15:
Anticipating somewhat the conclusions to be arrived at, we may define here the cause of war more precisely as due to an accumulation of mutual international indebtedness without any possible method of repayment. Strong nations at once get the weaker into their debt and prefer to extort from them a permanent annual tribute of wealth by way of interest, rather than to allow them to repay the principal and go free. War cannot be abolished till that is rectified.
History records that down through the ages some form of human slavery has always existed, some form of mastership controlled. As our civilization developed, mankind revolted against this form of treatment and a determined effort has been made to free the human race from such tyranny. It may be within the memory of some men in this house when human slavery was abolished on this continent; but while the type of slavery of which we have been accustomed to think has been abolished, another form more subtle, more insidious in its character, has been fastened upon a great majority of the human family. I refer to the financial power that dominates the world. The slave of old had to be clothed, fed and sheltered and could at least sleep from bodily fatigue; but what about the millions of people to-day who, because of the burden of debt, even find it hard to sleep from worry and fear, fear of seeing their life savings disappear, in most cases through no fault of their own, fear of the spectre of want, fear of being thrown upon charity for their subsistence, the fear of thousands of our youths coming out of school, fitted and ready to make their contribution to life but denied the right to work? Let me ask, how long is.this sort of thing to continue?
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Just as the barons in days gone by wrung from King John that charter of liberty which we prize so highly to-day; just as our forefathers fought and conquered one obstacle after another, to lift mankind to a higher plane; just as science and research have rid the world of that dread spectre of famine and scarcity, so surely we in our day and generation will not hesitate to do our part in ridding the world of that giant octopus money power, wiliich is spreading its tentacles in every direction and dragging the human race down to destruction. I hope and trust therefore that the government will realize the important task which lies ahead of this royal commission which is to be appointed.
Finance has developed to such an extent along with the development of the industrial machine that it has become the very lifeblood, or the air of our business and industrial life. We would not for a moment think of granting to a small group of men the right to control the air about us, which we all need in order to live, and yet we have done that very thing so far as our business and industrial life is concerned; and while this power, granted no doubt unconsciously, has grown up gradually, clothed in a veil of mystery to the average citizen, the disclosures of the past few years have broken the spell and in my opinion the time has come when the people will demand that this money monopoly must be broken and the control returned to the people to whom it rightly belongs.
. Mankind has made tremendous strides in learning how to control and prevent disease, and has long since discarded the belief that pestilence and plagues are an act of God. When he develops the will to do so, man can also prevent unemployment and poverty. Man is no longer the slave but the master of nature, in so far as eliminating the fear of scarcity is concerned; and when he discards the cloak of mystery and superstition which surrounds our economic structure and assumes the control and regulation of finance in all its various phases, in the interests and general wellbeing of all, he will for the first time in history become the real master of his fate, and carry civilization to new heights of achievement in peace and security.
In regal'd to the Liberal amendment, Mr. Speaker, it is nothing but a sweeping condemnation of the government, without offering one constructive suggestion, something which the people are looking for at this time. I am inclined to believe that the people of the country are more interested in a change to a system that would bring some relief to their sufferings than they are in a mere change from

one party to another, which would carry on along very much similar lines.
While we in this coiner of the house recognize that the budget contains certain commendable features, while we recognize that under present world conditions any government in power must face tremendous difficulties and carry heavy responsibilities, yet we feel that we must register our protest against a continuation of the present disastrous policy of deflation. But in doing so we wish to offer something of a constructive character, something which we believe, if put into effect, would go a long way towards relieving the people of the tremendous burden, under which they are at the present time struggling, and also restore that measure of prosperity and happiness which we are all so anxious to bring about.
I therefore beg to move, seconded by the hon. member for Winnipeg North Centre (Mr. Woodsworth), the following:
That all the words after "therefor" in the said proposed amendment be struck out, and the following substituted therefor:
"Whereas, the present depressed condition of agriculture, industry and of business generally, with its consequent unemployment, is the direct result of fundamental defects in our economic system, accentuated during recent years by the policies of deflation and of credit restriction which have been followed by different governments and financial institutions, and
"Whereas, while it is recognized that the present budget contains certain commendable features, including the proposed appointment of a royal commission to investigate hanking and finance, and a measure of assistance to agriculture, it must also be recognized that it is based in principle upon a continuance of the aforesaid ruinous _ policies of deflation and an increased restriction of purchasing power, and 'Whereas, the continuance of these policies, accompanied as they must be by a constantly increasing burden of debt, recurring budget deficits, and a decrease of purchasing power, and therefore of consumption, must inevitably result in a condition of still greater depression, and increasing unemployment, and
"Whereas, it is imperative, in view of the foregoing facts, that such policies be inaugurated as will have the effect of restoring the price level of agriculture, and other primary products, increasing purchasing power, reducing the burden of interest bearing liabilities, encouraging consumption and raising the standard of living amongst our people;
"Therefore be it resolved, that in the opinion of this house the government should give immediate consideration to the introduction of such measures as may-
"(a) Make available the real credit of the nation through the instrumentality of a national central bank, and render possible the utilization and control of this credit for the legitimate needs of the people of this country;
"(b) Bring about such a degree of controlled inflation as would stabilize the price level of

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our chief commodities at a point where it would bear a reasonable relation to costs of production and to incurred obligations;
"(c) Provide employment and purchasing power to our people, through the above mentioned means, and where necessary, by the direct use of our national credit in the construction of public works of various kinds, and in other ways which might be suggested including the construction of houses, etc.;
"(d) Ensure a more equitable distribution of the national income through well considered methods of taxation, and the legislative control of interest, profits and investment;
"(e) Nationalize our insurance systems, including the establishment of such systems of social insurance as may be necessary for the protection and well being of our people."


Mr. P. G. DAVIES (Athabaska):: Mr. Speaker, it has been said that the path of popularity and the path of duty do not always coincide, and I feel sure that if the hon. Minister of Finance (Mr. Rhodes) was not fully acquainted with all the implications of that aphorism before he took over his present portfolio, he has become convinced of its truth since that time. I am sure all hon. members of this house are fully appreciative of the fact that a most difficult task was placed in the hands of the Minister of Finance, but I think hon. members, on this side at least, will acknowledge that that task has been done very well. I have not been a member of this house for any great period of time, but I have been here long enough to know that the character of its deliberations are both varied and variegated. Sometimes its deliberations are most serious; at other times they are interesting-not only because they are serious-but also because, unfortunately, they are both amusing and tragic. It is because I think that the address delivered on March 24, by the hon. member for Shel-burne-Yarmouth (Mr. Ralston) comes within the four corners of these qualifications, and in particular within the confines of the latter two, that I hope to make reference to it, in some measure of detail, before I conclude.
In passing may I say that as I sat and listened to the address of the hon. member I could not help but think of the similarity which existed between him and his speech and Christopher Columbus and his voyage westward. Hon. members will recall that Christopher Columbus, after taking the blessing of the Queen of Spain-and incidentally all her money-started out on his voyage. When he started out, he did not know where he was going; when he got there, he did not know where he was, and when he came back, he did not know where he had been. So it was, it seems to me, with the speech of the hon.
member for Shelbume-Yarmouth. When he started out, it was obvious, at least to all hon. members on this side of the house, that he did not know where he was going. When he got to where he did not know he was going, it was equally obvious that he did not know where he was, and when he came back home from where he did not know where he was going to, it was again obvious that he did not know where he had been.
May I refer for a moment or two to that portion of the budget in which the Minister of Finance announced the appointment of a royal commission to make a study of the financial structure of the country. I think the minister is to be particularly commended for having decided to do this, because unquestionably, as many hon. members have stated, this matter goes to the root of our present difficulties. There is one question which I hope this royal commission will study in detail, and that is the relationship between our present monetary base and unemployment. My knowledge, I must confess, is very elementary, but I am convinced that some relationship does exist between these two matters. A great many different economists have been quoted in this chamber and strangely enough, there is just one thing upon which they all agree, namely that the present depression which started with the financial collapse of 1929, is substantially nothing more nor less than a breaking down of the medium of exchange. Upon different occasions hon. members sitting to the extreme left of Your Honour have referred to the results. They have stated, not infrequently, that in the world to-day we find want in the midst of plenty. May I say to them that if hon. members on this side do not express the same opinions to the same degree it is not because they do not recognize that such conditions exist throughout the world. On the contrary, may I venture the opinion that a good many more grey hairs have been added to the heads of hon. members sitting on this side of the chamber, who perhaps have talked less about these things, than to the heads of those who have done much more talking; for we on this side of the house have had the misfortune-it is the good fortune of the country-to be charged with the responsibilities of government in these distressing times.
I should like to refer particularly to the conditions which exist in the United States, because I think that country provides an apt illustration of exactly what our difficulties are and fortifies me in my belief as to the real
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difficulty. While the diagnosis may not be very difficult, unquestionably the cure is.
Hon. members who are acquainted with United States statistics will perhaps recall that the export trade of the United States-I speak from memory, but I think I am right-is approximately only ten per cent of its total production. Therefore it must be obvious to all that the greatest market for that country is its home market. The United States has practically everything it needs and it has the possibility of being the most independent country of any in the world; nature has endowed it with everything. They grow oranges in California, bananas in Florida; they have huge coal mines in Vermont and Pennsylvania; they have iron ore in tremendous quantities in Minnesota; they have oil in Oklahoma, Texas and California, and they have the great wheat fields of the plains of the middle west. It is not sufficient, therefore, for the United States, having regard to the fact that its exports are only ten per cent of its total production, to say: WTell, quotas and tariffs have quenched our export trade; because, after all, the greatest market for its products is within its own boundaries. Nobody will deny that the productivity of the great republic to the south of us is ample to take care of all its needs; nobody will deny that in that population of 120,000,000 there are many more millions of wants waiting to be satisfied. It would seem therefore safe to draw the conclusion that the only reason the productivity of that country cannot be taken advantage of by those who wish to do so is that the means of exchange has broken down-she has an antediluvian system of exchange. This brings us logically to the money question.
Is there anything more pitiful than the conditions to which the breakdown in the exchange situation has brought us? Is there anything more pitiful than an honest man, with a wife and family, who wants a job, a chance to earn an honest day's living, and cannot get it? That is the problem which faces all governments throughout the world, and the present civilization has to solve it or else in the course of time nothing but anarchy can result.
I should like to pause for a moment to ask what the purpose of government is. I must confess very frankly that until I decided to say a few words in this debate, I had not stopped to consider the question of the purpose of government. But I think all hon. members will agree that the purpose of government, whether here or elsewhere, should be to create an ideal state. Many hon. members may disagree as to what that is. I have been

in the house for a sufficient length of time to know that the idea of the hon. member for Weyburn (Mr. Young) of an ideal state might be one which did not have any tariffs. The idea of the hon. member for Winnipeg North Centre (Mr. Woodsworth) as to an ideal state might well be one which did not have a criminal code, or if it had to have one, it would be one in which section 98 was deleted. I do not think I would be unkind in saying that possibly the idea of the hon. member for Southeast Grey (Miss Macphail) of an ideal state would be one where "someone would do something sensible." I see the leader of the opposition (Mr. Mackenzie King) is not in his seat, but I imagine he might have an entirely different conception of an ideal state. He might think it would be one which would be a broad plain, completely flat, in order that there might be no "valley of humiliation" in it.


Mr. DUPUIS:: Has the hon. member anything to say about his leader (Mr. Bennett) who is not in his seat?


Percy Griffith Davies: I shall say that before I conclude. The conception of the hon. member who hails from Temiscouata (Mr. Pouliot) might well be a state in which he could speak in parliament for 100 per cent of the time instead of just for 99% per cent of it as he does now.


Mr. COOTE:: Where stations grow on every bush.


Percy Griffith Davies: I think perhaps, economically speaking, we might all agree an ideal state conceivably might be one in which there would be more jobs than men to fill them and in which every honest day's work would bring an honest day's pay. Out of such a definition it would naturally follow that such a state would have a reasonably stable price level.
The next question I should like to consider is what hope we have of achieving an objective of that nature with our money based on gold. I frankly confess I cannot see much hope in the light of my present knowledge. May I give my reasons? In the first place, if gold is to be the basis of our currency, it necessarily follows that it determines the amount of currency that is issued, whether it be metal coins or notes, subject only to slight qualification. Unfortunately the gold production of the world is more or less static, but business is progressive. Science, invention and discovery are improving the means of production, and the needs of the people increase as new wants are created. But the production

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of gold has no relation whatsoever to the goods that have to be handed over and the services that have to be rendered. This is clearly illustrated if one looks at the present situation in Canada. We have on hand approximately $78,000,000 of gold and about $175,000,000 of dominion notes outstanding. In February the deposits in our savings accounts amounted to about $1,397,000,000, and current bank loans were approximately $1,000,000,000. Theoretically those loans would cancel the deposits, but again, theoretically speaking, everybody with a savings account is entitled to draw his money out if he wants it, and if so, he is entitled to demand dominion notes. If we were on the gold standard -we are not-he would be entitled to demand gold for his dominion notes, and we therefore have this huge credit structure built up on merely $78,000,000 worth of gold, an amount which bears no relation whatsoever to the structure.
My second complaint against gold as a money basis is that no provision is made in gold for the retention of the national income when debts are being deflated. May I make myself a little clearer on this point? After all, every time a bank loan is repaid, money- purchasing power-is taken out of circulation unless at the same time as that bank loan is repaid, a new loan is taken out. That is a matter which I think we should all recognize; we can follow it through very simply. Under our present arrangement, let us suppose that the supply of the products of an industry is too great and that the demand is not there. What happens? The industry lays off men, who join the ranks of the unemployed and thus lose their purchasing power. In losing their purchasing power, they are no longer taxpayers; they even have to be kept by the state and become a charge on all other taxpayers. Their unemployment-no purchasing power-further aggravates the situation. That is what is happening now; it has happened all along; it has happened in previous depressions. It explains business cycles, because when debts have to be paid out of earnings, without a new loan being made, the process of deflation is started.
What does the policy of "easy money" mean? I look forward to such a policy. I was glad to hear the Minister of Finance say that the government was prepared to reduce the interest rate on postal savings, but while the banks have been talking for some time of reducing their interest rate on deposits, it is hardly possible they will do so unless there is cooperation throughout the country. The provinces must reduce interest rates on their
deposits because it is unreasonable to expect the banks to reduce their interest rates while provinces, which are in competition in taking public funds into their savings, do not do so also. If this adjustment is not forthcoming in the not distant future and if there does not appear to be cooperation between these various bodies, I hope the Minister of Finance will take advantage of the provisions relating to "peace, order and good government" so as to bring about that cooperation. Why do we look forward to this policy of easy money? Is it only because we think w-e will be able to pay our debts more easily, or is it not also because it will be easier for us to go into debt? After all, every credit is a debt; is it not a fact that we are waiting for somebody to go into debt in order to get business going and thus clear away the depression?
Another objection that I have to gold is this. With gold as a basis of money, having regard to our present available supplies, it seems to me it is dependent upon a contracting and expanding body of unemployed labour for stabilizing the price level. What I mean is this: under- the gold standard, if the supply of the products of industry is too great for the demand, men are laid off. It is expected then that production will diminish to some extent, and when it does catch up again, if it does, if we do not run into another cycle of deflation and depression, we expect the men to be reemployed to meet the new demands for production. I should like to spend more time in registering one or two other points in this connection, but I must pass on in order even roughly to cover the field.
It seems to me that with gold as the money base there is only one logical way of solving the problems of a depression or period of deflation, and that is by putting everybody- all the unemployed-to work in the gold mines. I cannot see any other way. I can see ways of relieving the situation, but I cannot see the solution. Let us assume for a minute that all the provinces in Canada had potential gold mines. Then the logical thing to do when a man became unemployed would be to put him to work in a gold mine, to produce the money base. The result would be that Alberta gold would be sent to the Minister of Finance and he could issue new bills against it. That would create new purchasing power, and that is the only way in which he can create it. This in turn would stimulate industry and national income would be maintained. If all the countries of the world had potential gold properties where they could put their unemployed to work the depression would be solved quickly under the gold standard; but they do
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not happen to have them. Our gold mines have been of tremendous benefit to us, but it seems to me that they have not been of the benefit they might have been, because we happen to be a debtor country. What happens at the present time is: that the gold mines of Canada are being entirely supported by the taxpayer's of the country. I am not objecting to this because it is what we have to do; but we are paying the gold mines for the gold they produce and then sending that gold to New York to meet our obligations. The difficulty therefore at present is that all the gold we are producing is not a basis for currency expansion in Canada. Neither is it any good to the United States because she has not used her accumulated gold reserves as a basis of monetary expansion. The work was done in Canada'-this does not 'help the United States.
Now if we can agree that the logical way to solve this depression is to put everybody to work in the gold mines at the production of the metal base of our currency, I think we can reasonably agree, further, that that indicates a weakness in gold alone as a money base, for it is something that is too scarce; it is not plentiful enough, and is not equitably distributed.
A great many suggestions have been offered as to what might be done to patch up gold. The hon. member for East Algoma (Mr. Nicholson) told the house of the revaluation plan of Peter Robertson. Doctor Stephen Leacock has published a little book in which he puts forward a plan which amounts to the same thing. His book is entitled something to this effect: How to solve the depression in six seconds, eradicate it in six minutes, and permanently cure it in six hours. He advocates the reduction of the gold value of the dollar by twenty-five per cent.
Then there is the suggestion of an international banker or economist that gold certificates should be issued by the Bank of International Settlements, and that these gold certificates by treaty should be accepted in all the various countries as gold. They would be loaned out to countries in need of gold reserves. There is also the suggestion that silver should be remonetized. But these suggestions are all practically the same in principle. They all admit the fact that there is not a sufficient quantity of the monetary base in the world. I do not for a moment doubt but that by these various means the price level can be raised1; there is no doubt that it can be. I do not doubt that through bringing about revaluation a reasonable measure of prosperity can be brought back, but so far as producing an ideal state, or a return of permanent prosperity is concerned,

I must confess that I cannot see any very definite hope in that direction through such suggestions. I am afraid we will just be preparing ourselves for another business cycle.
How do my hon. friends in the southeast corner of the house view the situation? They look at it in this way:	Here is a man who
has been working in a boot factory and is now out of work; there are others who need boots. Here is the plant. They say: "This whole thing is a dirty mess. Let the government take it over." I think that is what socialism is. I cannot agree with my hon. friends in the southeast corner in their method by which they would get us out of the depression. They look upon the government, as one writer has called it, as an omnicompetent political chore-boy robot who can accomplish everything. I do not view the function of government in that light. If that form of state socialism was adopted-and that is what they advocate -unless the real causes are got at, would we have anything more than something in the nature of a glorious scheme of national relief?


Mr. MITCHELL:: What have we now?


Percy Griffith Davies: We can do that now just
as well under the present system, and there is no use changing unless your system has something better to offer, and it hasn't. Then my hon. friends in the southeast corner look at the banks. They see the beautiful buildings and the nicely polished brass doors. They see the weekly bank returns showing savings deposits of approximately one and a half billion of dollars, and they say: "Let us nationalize the banks and take the whole thing over; we will fix this thing up." But is that necessary? With our banks nationalized and our bank managers and bank employees directly or indirectly civil servants, would it be easier to lend a dollar to any man than it is under existing conditions? There are only two ways to get purchasing power into the hands of the people; one way is to give it out and get something done; the other way is to hand it out and get nothing done. I firmly believe that under a socialized or nationalized banking system if money would be handed out without any reasonable expectation of its being returned -and I submit that it would not be returned under existing conditions-the final result would be that the banking system would run the state into bankruptcy much quicker than the Canadian National Railways has any possibility of doing.
It seems to me that there is another very substantial defect in what my hon. friends in that corner of the house advance, and that is that it would bring credit into the sphere

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of politics. It would seem to me that that is an evil which above all we should steer clear of. If we are going to have a democracy-and they tell us that under their scheme we would have-and that democracy is going to operate the banks, how could you keep credit out of politics? What would be the consequences?
The question naturally arises, what should be done? It is much easier to see what some of the fundamental causes of our difficulties are than to suggest practical remedies. May I, however, draw the attention of the house to a book recently written in which the writer puts forward a suggestion which I have not heard put forward in this house. I am not in a position to say .that the suggestion is sound, but this writer, who has been studying the question for a great many years, advocates public improvements as a' money base. He says that it would solve the depression and ensure permanent employment by making public improvements the money standard. He would at all times put the unemployed to work on public improvements. He selects public improvements because there is no limit to the public improvements which a nation will want as time advances-roads, bridges, sanitation schemes, cleaning up the slums, and so forth-all of which would raise our standard of living. He would pay for these public improvements with a newly issued money, just as if we had half a billion dollars' worth of gold produced in this country which we did not have to send abroad to pay our debts, and the Minister of Finance would issue new currency when that was delivered to him. He would retire by taxation the currency thus issued at the rate of depreciation. This writer points out that under this scheme unemployment would be done away with. Let us suppose that through technological improvements in industry men would be thrown out of employment; his plan would be to put them to work on public improvements-put them into the production of the money base, just as if we cou'ld put men to work in our gold mines to-day of which we have not sufficient, despite the fact that we are the world's second largest gold producer. In this manner he submits that the purchasing power of the people, in other words the national income, would be retained while debts were being deflated, which unfortunately is not the case at the present time. If one were to compare such a money standard with the gold standard, one might make the comparison first on the basis of redeem-ability. Well, it must be obvious that such 53719-235
a currency would not be redeemable. If the Minister of Finance was presented with a dominion note he could not walk over to the east block, pick off a couple of huge stones and say, "Here is your portion of the public funds." Obviously such a currency would not be redeemable. But, on the other hand is gold redeemable? Gold is only redeemable, it seems to me, so long as you do not ask for it to be redeemed. The essence of its re-deemability is that you do not ask for it. We have seen what happened in the United States, and throughout the world. Once you ask that it be redeemed, you cannot get it.
Then, as to its utility: It would seem desirable, I suppose, that our money should be based upon something which would have some utility-which gold has not. He compares it with gold in this way, by saying, "We mine gold, and put it away in the vault. I doubt if it creates much happiness or raises our standard of living." On the other hand he continues: "With public works as a money standard; as you continually launch your public works program the standard of living of the people would be raised, because they would have utility."
There is one other item I should like to refer to in this connection. I said I hoped that the commission would study the relation between unemployment and money, and our money base in particular. That brings me to express this view: We have been told that the big thing behind our money, that which is of most importance, is "confidence." We have been told, furthermore, that "confidence" is largely dependent upon our ability to meet our foreign debts in the terms of our contract. If that is so, if that is what "confidence" is dependent upon, may we not make further inquiry and see upon what does our ability to meet our foreign debts depend. It seems to me there are only two ways in which foreign debts can be met, one is by the shipment of gold, and the other by the creation of credits in a foreign or creditor country, which is done by the shipment of goods and the performance of services. Otherwise, the only way left open to us to meet foreign debts is to borrow in a creditor country. If this is so it naturally follows that every time one joins the ranks of the unemployed, there is one less working to help establish these foreign credits.
It was the hon. member for North Waterloo (Mr. Euler) who said he did not understand why, when we issued $68,000,000 of dominion notes during war time and had no gold behind them, it was possible that since that time our currency was at a premium over United States funds. May I say to the hon. member that

The Budget-Mr. Davies


Mr. J. L. BROWN (Lisgar):: Mr. Speaker,
it is a happy circumstance that in this house, where there is such a great difference of opinion on almost every subject that is brought up for discussion, there should be one thing on which we are unanimous; that is, the manner in which the budget speech was presented to the house. So I should1 like to add my congratulations to those already expressed.
Before dealing with the budget itself I should like to offer some criticisms with regard to some of the speeches that have been made, and to point out the fallacies contained in some of the arguments that have been advanced. While in the main I disagree with the remarks of the Minister of Trade and Commerce (Mr. Stevens) there was one remark which he made in opening that I think will be received throughout the country with the same measure of approval that was shown in this house-at least this will be so if the future works of the government give evidence of the new faith that is in them. The Minister of Trade and Commerce said:
. As we look back over the past year and, indeed, over the past three or four years, many of us are willing to admit that we are much wiser to-day than we were three or four years ago. Many proposals made with great confidence that some suggestion, if accepted, would cure all the ills from which we were suffering, we now realize were mistaken ideas.
That expression was received with a great deal of applause from this side of the house, and my hon. friend added:
My hon. friends opposite seem to think the monopoly of that rests with this side of the house, but I have very definitely in mind innumerable weird suggestions that have come from the other side.
Just at this point let me say to the minister that the policies which have been advocated from this side of the house are not on trial; the policies advocated by the government
53719-235J
during the past two or three years are on trial. Those are the policies that have been weighed in the balance and found wanting. Let us hope, however, that the minister's statement means that the government have recognized that the proposals they made, which were to bring about the salvation of the country, have been found not to have accomplished the end hoped for. Let us hope that his statement means a repudiation of the doctrine of Canada first, as defined by the Prime Minister (Mr. Bennett); let us hope that it means the repudiation of such doctrines as shutting out the foreigner and making the foreigner pay tribute to the empire, or that red-blooded doctrine enunciated by the Minister of Railways and Canals (Mr. Manion). Let us hope also that it means an end to that long series of letters which, following the election of 1930, the Minister of Trade and Commerce addressed to the people of Canada, and which were published in all newspapers throughout the dominion at public expense.
I wish I had time to readi extensively from this document, which is one of the first if not the first of the letters issued. It is headed and addressed as follows:
Department of Trade and Commerce Ottawa, Canada
To my fellow citizens, in every part of the Dominion:
I should like to quote a few sentences from this letter:
Every year for the past few years Canada has been importing $800,000,000 worth of merchandise that she might just as well have been producing from her own mines, on her own farms or in her own factories. Some things, of course, like raw cotton and raw rubber, she must import. But making due allowance for such items, the fact remains that $800,000,000 of her annual imports have been of a class or kind that she was quite capable of producing for herself.
Then in the next paragraph he goes on to argue that if proper policies were pursued employment would be given directly to 147,527 workers in Canada. It was in order that effect might be given to this policy that during the session of 1930 the government undertook to raise tariffs immediately. A little later another letter appeared, headed with these words: "Remember the Golden Rule."
I think the minister and the country will have to recognize that the golden rule has a very much wider application than has been given it by those who advocated the Canada first, the shut out the foreigner and the make the foreigner pay tribute policies. Finally let us hope that the statement of the minister
The Budget-Mr. Brown

means the repudiation of that famous creed which was presented to us in such an attractive form. Therein lies its danger. Ever since the woman looked upon the forbidden fruit and saw that it was pleasant to the eye, evil has 'been most insidious when presented in a form that was not outwardly repulsive. Sometimes it has worn the garb of innocence; indeed sometimes it was seemingly good. We recognize this in our English speech; we refer to the wolf in sheep's clothing; we speak of Satan arrayed as an angel of light. So this creed, containing as it does many beautiful expressions, nevertheless contains the germ of that disease which has been afflicting the world, that extreme nationalism which has brought our modern civilization to the very brink of the precipice.
This is not the only confession of past error we have had since the opening of this session; we had another from the Prime Minister. When the hon. member for Antigonish-Guys-borough (Mr. Duff) moved his resolution advocating reciprocity with the United States we were completely astonished to hear the Prime Minister raise his voice in favour of that suggestion. There is no question of what his attitude has been in the past, but when he changes his faith I think he should take his supporters into his confidence so they will not make contrary statements. For example, it would have been well if the right hon. gentleman had taken the hon. member for Brandon (Mr. Beaubien) into his confidence before that hon. gentleman issued this long letter to his constituents, in which he said:
Canada may as well make up her mind that she cannot hope for anything like dependable trade arrangements -with the United States. That country, whether it is a Republican or a Democratic administration, and no matter what the political complexion of congress, doesn't propose to buy anything from Canada that it can help; and any arrangements that it can make with Canada of a contrary nature will be a temporary arrangement, subject to withdrawal at congressional caprice.
That is just one paragraph from this letter; it is not at all in agreement with the statement made in this house by the Prime Minister, in the course of which he said that he now favours a reciprocity with the United States. There is no question that in the past the Prime Minister did commit himself to the policy of no trade with the United States except when we could not deal within our own country. Evidently the right hon. gentleman has seen the error of his ways; he has seen the complete breakdown of that policy of extreme nationalism which has been the curse of modern times. It would be more honest if he would candidly admit his error and not try to give the country the im-
I Mr. Brown.]
pression that it was not the principle of reciprocity that he opposed but the form in which it was presented to the people. That is what he tried to tell us in the house when the matter was before us a few weeks ago. Oh no; he did not seem to be opposed to reciprocity, but he did not like the idea of a loose agreement that could be cancelled in a very short time.
I know it is not permissible for me to quote from a former debate in the same session, but we all remember that speech and we remember the reason he gave for his having opposed reciprocity back in 1911. But *that was not the attitude taken by the Conservative party at that time. They opposed reciprocity because they thought they saw in that agreement our entire separation from the British Empire. One of the chief Conservative leaders at that time was the late Sir George Foster, and I want to read the closing words of his speech, delivered in the House of Commons on February 14, 1911, so that the house may see 'the reasons he gave for opposing the reciprocity pact, and also just to what extent his reasons agreed with what the Prime Minister told us a few days ago. Let me quote:
This proposal cuts square across that national ideal, challenges it at every point, will endanger it undoubtedly, may destroy it entirely. Should we not think before we enter into it? Ninety-three millions to the south of us mean it in the way of absorption and hegemony and mean it in no other way, hence these gifts. This proposal cuts our country into sections and at every section bleeds the life blood from it. The well-filled arteries of interprovincial trade will be drained until the whole system grows anaemic and flabby. Do not treat it lightly. The sustained pressure of ninety-three millions to eight millions, the far-reaching effect of business affiliation, the close proximity and constant efflux and influx, the seductions of commercialism, the constant intercourse of business, social and official life, will inevitably weaken the ties of empire and wean the thoughts of our newer generations, if not of ourselves, towards the predominant power, and create new attachments, until like Samson we would arise and would shake ourselves and find that our strength is gone.
I utter the most solemn words I have ever uttered in my life, and I believe them to the very bottom of my heart, that there is danger, and deep danger ahead. This path entered upon leads us away from home to a strange country. I pray, sir, that the full meaning of this first step may sink into the hearts of members of parliament and into the hearts of the people of this country until there shall burst forth a protest of such strength that the steps contemplated will be recalled to the old paths, leading east and west, in and out amongst our own people, converging on the great metropolis of the mother land, and which we may follow without uncertainty and without menace to our national existence.


Mr. CANTLEY:: Good stuff.

The Budget-Mr. Brown


John Livingstone Brown: Good stuff perhaps, but
very different from ryhatt the Prime Minister gave us the other day. Well, the campaign was fought out along those lines. I remember the Manitoba campaign organized by the present member for Winnipeg South (Mr. Rogers), who then had the reputation of being one of the greatest election winners in Canada. At any rate, the campaign was organized by that hon. gentleman, and he brought with him Mr., afterwards Sir Robert Borden and another gentleman who afterwards became a cabinet minister, ito the town of Morden in my constituency. I travelled from my own town to hear them, and I remembeT the dire picture they painted of what would happen to Canada if we entered into that arrangement. I remember (hearing of the 90,000,000 head of cattle that would come from the United State's and graze in our pastures, and of the disastrous consequences that would follow if we yielded to the solicitations that were being put forward. I remember the Conservative candidate at that time, a gentleman who now sits in the other house, telling us after it was over, "We saved Canada". That was the way the campaign was fought and it ended, as other campaigns have ended, by the people responding to the absurd pleas that were made to them. lit was another instance in which, in our judgment, democracy showed its weakness by counting the number of heads instead of taking the quality into consideration.

To many of us, it seems but fitting that a member of the royal family should open a new parliament, with a new government with a clear mandate from the people on a great issue, indicating in no uncertain terms a settled conviction that the Canadian people would consider no trade proposals that menaced, even remotely, their fiscal and national independence, or threatened to lessen the strength of the ties that bind them to the British Empire,-
We remember what we heard a session or two ago about cutting the painter that binds us to those islands across the sea.
-or rendered for a moment more difficult the realization of the hope that lives in all of us for the commercial and organic union of that empire.
Mr. Speaker, the risk was real and the danger imminent. I doubt not that when the proposals to which I have referred were first introduced, they were regarded merely as trade proposals; but when it was ascertained that in their ultimate results they involved the whole future
of Canada, then it was that the national spirit of our people was aroused. I venture to think that the right hon. gentleman who so successfully leads the opposition in this house would not have introduced those proposals if he could have foreseen that there would have arisen around them an agitation, the results of which were so vital to the imperial and national future of the country.
I shall stop there, for I am afraid that if I continue reading from it I may not have time to say all I want to. But that extract shows sufficiently that the opposition of the present Prime Minister to reciprocity in 1911 was not on the ground that the agreement was loose, as he now says; rather, the reason was as indicated in the quotation I have just given.
When I heard the confession of the Minister of Trade and Commerce (Mr. Stevens) that the government's policies had now proved inadequate, I was reminded of another confession I once heard him make, and I wast still more reminded of it as he proceeded with his speech. He once admitted in a burst of candor that when his case was weak he was unusually vigorous in presenting it; in other words, he made up in vigour what he lacked in logic. There were a number of illustrations of that truth in the speech to which we listened the other day. For instance, when ihe turned his guns against the hon. member for Shelbume-Yarmoutfa (Mr. Ralston) with regard to stabilization. He tried to prove that the hon. member was inconsistent because in the first place he had condemned the principle involved and then later, as the minister tried to make out, the hon. gentleman had urged the application of the same principle to all exports. But someone on 'this side pointed out that the minister was forgetting that little word "if"-if it was sound. The minister saw he had made a mistake and it was rather amusing to see him floundering about for a while. It reminded me of the only other time I have ever seen Hie minister completely floored, the time he undertook to defend the hon. member for East Simeoe [DOT] (Mr. Thompson) when the Vigilant matter was before the house. That was one of those cases where he could not even be vigorous when his argument was bad. After a while he got started again and soon found his feet, but it was not long before he again fell into the same error. He taunted us with opposing everything in the budget. He said we were opposed to the reductions in the tariff and to tire reducing of the valuation for dumping duties from $4.40 to $4.25. He said we had nothing good to say for it. He adopted these same tactics last fall when we were discussing the question of trade through
The Budget-Mr. Brown

Canadian ports. At that time he said that we were opposed to Nelson, to Churchill, to Saint John, to Halifax and to Vancouver. This was the accusation levelled at us when we ventured to say that we wanted the American ports kept open as competing routes. No one knows better than he that that is not a fair argument to use. When he voted against the budgets presented by the former government, did that mean that he was opposed to everything that they contained? He knows perfectly well that that is an entirely wrong interpretation to place upon the actions of any group. Of course there are some things in the budget of which we approve. We approve of the reductions in the tariff, in so far as -they are reductions. We certainly approve of the placing of repair parts for farm implements upon the items in 'the lower range of the tariff. Why should we not approve of that when the matter was [DOT]brought to the attention of the house by hon. members on this side?


Some hon. MEMBERS:: No.


John Livingstone Brown: Does he think we are going to go back on our own work? No, that would be too absurd.
There was another matter in connection with which he used that kind of language which he alone knows how to use. Referring to the hon. member of Shelburne-Yarmouth he said:
And he used this old hackneyed phrase; the taxation proposed, he said, will fall upon those least able to bear it.
He then went on to tell us that the taxes paid by the banks for the yearn 1922 to 1930 averaged $1,240,000 while the average for the years"1931 to 1933 was $1,390,000. I am not at all impressed by the fact that the taxation of the banks has been increased by ten per cent when I recall that every bank statement issued last fall showed tremendous profits and the payment of large dividends. The two cents per pound tax on sugar is an infinitely greater burden upon the ordinary householder than the tax paid by the banks. I wonder if the house has got a true picture of just what jthis tax on sugar means? It is estimated that labout 50,000,000 bushels of wheat are consumed each year by the Canadian people. At .fifty cents per bushel this would be valued :at $25,000,000 which is only $5,000,000 more than the government expects to get from the tax upon sugar. Think of it, the tax upon sugar amounting to almost the total value of the wheat consumed in one year by the Canadian people.
The minister then referred to the decrease u revenue, and objected again to the criticism
JMr. Brown.]
of the hon. member for Shelburne-Yarmouth. Is the house surprised at the fact that there has been a decrease in the revenues received from customs tariffs? It is only what could be expected. The minister gave us to understand that the whole trouble was the decrease in the volume of goods. Undoubtedly that is a factor, but it is not the only factor. This was recognized a year ago by the Minister of Finance when making a statement in explanation of the reduction in customs revenue which had taken place up to that time. He admitted that one factor in the reduction was the policy of the government in encouraging Canadian production. That is just as true to-day as it wras a year ago; it has had the same effect upon the revenue this year as it had a year ago, but the Minister of Finance made no mention of this factor when delivering his budget this year? A year ago we pointed out that the new excise tax of three per cent would not bring in additional revenue from the customs. It wars called an excise tax but in reality it was a customs tariff. We pointed out that while the tax might bring in some revenue from those goods that were coming in free or under the lower rates, the effect upon other goods would be to place them in the non-revenue producing class. That was the inevitable effect of the tariff, and our argument has been proved valid.
The claim has been made that the tariff rates were lower under the Conservatives than under the Liberals. In answering this argument I shall include with the Minister of Trade and Commerce, the hon. member for Souris (Mr. Willis). I wish hon. members on the other side would come to some agreement among themselves as to whether the tariff has been raised or lowered or as to what extent it has been changed. Speaking this afternoon, the hon. member for West Edmonton (Mr. Stewart) referred to the tremendous increases which had been made in the tariffs. This statement was received with great applause from the other side. How can that action be reconciled with the statements of the hon. member for Souris and the Minister of Trade and Commerce? The hon. member for Souris said:
That is somewhat important in my opinion in view of the way in which elections are conducted in western Canada. We were told in the west in 1930 that we must vote for the low tariff policy. Had the people done so at that time, they would all have voted Conservative, but they did not. As usual, Mr. Barnum was right; the people like to be fooled.
Yes, and they were fooled badly in 1930. Such statements remind me of the story of the policeman who arrested a man for speeding. When charged with speeding the man said,

The Budget-Mr. Brown
"I was not speeding, I was not going thirty miles an hour, I was not going twenty miles an hour, I was not going ten miles an hour". "Hold on," the policeman said, "the first thing you know I will have to charge you with backing up." The hon. member for Souris has fallen into the same error into which that famous statesman Malt-on N. Campbell, now on the tariff board, fell when he made a computation of tariffs.


Mr. DUFF:: He fell into a good job.


John Livingstone Brown: In computing the rates of tariff, the hon. member for Souris fell into the same error as did Mr. Campbell. In fact, one would almost think he had taken his figures from Mr. Campbell's statement. The hon. member included the year 1922 in making his list of Liberal tariffs. He knows, or at least he should know, that the fiscal year ends on March 31.


Mr. WILLIS:: What difference does that
make in the results?


John Livingstone Brown: I have not figured it out.
The Conservative policies were in effect up until the end of May, 1922. I shall indicate the difference in the results a little later on. I should like to point out to the house the fallacy of all arguments based on average percentages. Mr. Campbell said that at that time the only index as to tariff trend was the average duty colleoted. That seems to be the opinion of the Minister of Trade and Commerce and of the hon. member for Souris. Nothing could be more fallacious than that. So many factors enter into the problem that it is practically impossible to arrive at an accurate conclusion. If it were true that the duties had been increased by only such an infinitesimal amount as that indicated by the hon. member, what becomes of the pledge of the Prime Minister (Mr. Bennett) to make tariffs fight for us?


Errick French Willis: So he has done.


John Livingstone Brown: Wihat becomes of the argument that was used again and again during preceding parliaments that Canada alone among the nations was reducing tariffs? That was the argument we heard again and again. If it was true, then this other statement cannot be true.


Errick French Willis: That is how we got the
imperial conference agreements.


John Livingstone Brown: I shall have something
more to say later about the conference agreements, and I shall point out another fallacy of the hon. member. As I say, so many factors enter into the problem that it is
almost impossible to arrive at an accurate conclusion. The first, for instance, is specific duties. Let me give an illustration. These figures go back to 1927. Cast iron pipe was for years brought into Canada at rates of duty of $6, $7 and $8 a ton under the various tariffs. In 1918 the price was S66 a ton, but in 1927 it was only S47 a ton. Naturally, calculated on an ad valorem basis, the tariff had risen, but there was no difference in the amount of duty collected, which still continued at $6, $7 and $8 a ton respectively. On an ad valorem basis it might have been contended that in the first case the duty was 11-7 per cent and in the latter, 14-7 per cent. Yet those figures do not give us a proper picture. There are on our tariff list a large number of items of that class and these prices fluctuate from time to time, so that it is impossible to form an accurate conclusion.
Further, in the years quoted by the hon. member for Souris there appeared in 1917 and 1918 when we were exporting large quantities of war material to Europe, and the raw material for those commodities was imported in large quantities at a low rate of duty. This naturally affects the average. It will be noted in the figures given by the hon. member for Souris for those years, the average was down to about 12 per cent. That of course affects the whole computation.


Errick French Willis: The average was over 20
per cent.


John Livingstone Brown: But for the two years. The hon. member will note that, according to the figures he gave the duty on all imports was 12-1 in 1918 and 12-3 in 1919.


Errick French Willis: It was 21-5 per cent.


John Livingstone Brown: Why can the hon. member not be fair? I have his own figures before me: average rate of duty on dutiable imports, 21-5, and average rate of duty on all imports, 12 1 in 1918 and 12-3 in 1919.
Another factor that affects the question is prohibitive 'tariffs. I have already referred to the fact that prohibitive tariffs shut out goods, and consequently when one comes to compute average rates of duty, this whole class of goods that has been shut out under prohibitive tariffs is not taken into account in the computation.
Another factor is that of luxuries. In hard times luxury goods are perhaps the first class to be dispensed with. These goods carry high tariffs. Let me give an illustration: In 1918, for various causes the importation of liquor had been cut down and it was then only 84,350,000 worth from Great Britain.
The Budget-Mr. Brown

This was given at the time in answer to Mr. Campbell's argument that the British preference was not as great under Liberal rule as it was under Conservative rule, but by 1927 that importation had reached 840,314,000, and that commodity bore a high rate of duty. Necessarily that would have its effect when one comes to compute averages. The same condition holds to-day and is responsible in some degree for the present situation. For instance, the importation of distilled liquors in 1929 amounted to 2,604,769 gallons and by 1932 this had dropped to 1,426,214 gallons.


Henry Herbert Stevens: I excluded liquors from
my computation.


John Livingstone Brown: I remember that, but I am pointing out that this must be observed as a general principle when we are discussing tariff averages. The importation of alll beverages amounted to 848,844,111 in 1925 and 825,929,880 in 1932. Therefore the same arguments may be made now as could have been made in the years from 1921 to 1927.
The matters with which western members will have to deal are not tariff averages, but the tariffs imposed by the present government on agricultural implements, the tariff imposed on barbed wire, the tariff of 25 per cent on cream separators, while liquor is being imported at a reduction of $2 a gallon in the duty. I wonder whether the Minister of Trade and Commerce would hold that this will increase or decrease the consumption of liquor in British Columbia, or, for that matter, in any part of Canada. These are the points hon. gentlemen opposite will have to explain, and they will not be 'allowed in the country to get away with the same fallacies that they have tried to put over on hon. members.
As regards the wheat preference, we have the hon. member for Souris saying, as reported on page 3592 of Hansard:
Fifthly, I should refer to the fact that under the Imperial conference agreements we receive a six cents a bushel preference on our wheat, due to the imposition of a duty of six cents a bushel on wheat entering Great Britain from other countries. Of course, we have to sell our wheat at the world price. The benefit of this preference was brought vividly to my attention when I happened not very long ago to be in Fort William, where I saw beside an elevator the grain vessel, Le Moyne, with a capacity of 600,000 bushels of grain. If that grain vessel had been from Russia, before it could have been unloaded in Great Britain it would have had to pay a duty of $36,000, but if it were loaded with grain from Canada it would have to pay nothing at all.
[Mr. Brown.1
Unfortunately for his argument, the grant would not under the circumstances go to Great Britain; it would go to another market which helped fix the world price. That is the situation. Once admit that we are selling our wheat at world market prices and the argument falls absolutely to the ground.
In conclusion, I shall vote against the amendment to the amendment, first because it proposes to nullify the amendment, which deals with fundamental facts in our economic life; and secondly because it makes no reference at all to the fiscal policies of this government which in large measure I believe are responsible for the depression. I shall also vote against the budget, not because it does not contain some things that we approve, but because there is nothing in it that indicates any radical change in government policy, even although the Minister of Trade and Commerce indicated in the first part of his speech that he recognized the error of their ways.


Mr. V. C. PORTEOUS (North Grey):: Mr. Speaker, this is my first voluntary attempt to take up the time of this house. On the occasion of my last speech in this house I was associated with the late member for Resti-gouche-Madawaska, and I shall always entertain fond memories of the late Max Cormier.
The task of the Minister of Finance (Mr. Rhodes) on an occasion of this kind is no easy one, and I am sure that he is to be complimented for the able manner in which he discharged that task.
Following the hon. member for Lisgar (Mr. Brown) in this debate, and hearing him talk about sincerity and denials and backings up, I could not help wondering as I looked over his records if he was himself sincere, and whether he, like Peter of old, has not sometimes denied his leader; because I understand that in the last general election he ran as a straight Progressive and denied any association with the Liberal party.


John Livingstone Brown: That is not true, Mr. Speaker. It is a complete misstatement of fact.


Errick French Willis: What about 1926 then?


John Livingstone Brown: I want that statement withdrawn, Mr. Speaker. I was elected at a joint convention of Liberals and Progressives, and I announced that I supported the Mackenzie King policy.

The Budget-Mr. Porteous


Victor Clarence Porteous: I made no statement; I said I understood that the hon. gentleman ran as a straight Progressive in the last election, and he is reported in the Parliamentary Guide as having done so.


Mr. ROWE:: Take it out of the Guide.


Victor Clarence Porteous: Shortly after coming to this house I listened to the right hon. leader of the opposition (Mr. Mackenzie King) giving an analysis of the 1930 election figures, and I wish to quote from his speech on that occasion as reported in Hansard:
May I say at once that the victory which my hon. friends have achieved is much more apparent than real. They sit opposite in numbers considerably greater than those who are sitting on this side of the house. Nevertheless when the vote is analysed, when we look into the figures of the official returns of the votes cast on July 28, it will be seen that the number of those who voted for hon. members sitting on this side of the house ivas considerably in excess of the number who voted for hon. gentlemen opposite.
He goes on to say that the total vote cast on July 28, according to the official figures, was 3,898,995, that of this vote the Conservative party received 1,909,955 votes, and that the total vote opposed to the government was 1,9S9,040. I want to point out, Mr. Speaker, that that is a very unfair analysis of the vote at that time because, as a matter of fact every Liberal candidate in that election was a government candidate, and every candidate who opposed a Liberal candidate was opposed to the then government. A true analysis of the vote in 1930, gives a total vote of 3,898,995, of which the Liberal party received 1,714,860, and there was opposed to the government 2,184,135 votes.
Further, on looking over the votes in the last four elections I find that there was opposed to the Liberal party in every one of those four cases a majority of the votes polled. At no time, in other words, did the right hon. gentleman now leading the opposition have the confidence of the people of Canada, as expressed by a majority vote, to assume the portfolio of Prime Minister and to lead the government. In 1921, the Liberal party had 117 members in this house; in 1925, 101; in 1926, 116; and in 1930, 88. I go further and say that the Liberal party has never received a majority vote in any general election in this country since 1908.
There has been much talk among the members of the opposition with regard to trade expansion and trade relations. Looking over the trade returns of Canada during the periods of Liberal regime I find that our imports
increased from a total of 8747,804,000 in 1922, to $1,248,273,000 in 1930. Our exports in 1926, amounted to $1,328,700,000 and they had decreased to $1,144,938,000 in 1930. So during the regime of the Liberal government there was a general decrease in the trade of Canada. During the ten years from 1920 to 1930, we had an unfavourable trade balance with the United States of $2,120,142,484, and in that same period our gross debt, dominion, provincial and municipal, increased by $3,872,136,780. Hon. gentlemen opposite speak slightingly of a favourable trade balance, but I ask you, Mr. Speaker, if a man buys more than he sells and continues to do so until his credit is exhausted, what happens? Everybody knows, and it is the same with a nation as with the individual. We canot keep on having unfavourable trade balances and remain solvent, and therefore I say that the hon. Minister of Finance is to be complimented on the showing he made in his budget speech, that during the first eleven months of the fiscal year we had a favourable trade balance of $70,000,000.
With regard to trade and taxation I have before me figures showing the taxes collected from duties between the years 1922 and 1930, and I learn that the Liberal party collected from the people of Canada ever increasing amounts of duty, beginning with $71,864,000 in 1922 and reaching $122,122,000 in 1930. The hon. member for Shelbume-Yarmouth has said the only way to balance the budget is to cut down expenditures. I challenge his sincerity in this statement, because of the fact that any demands made by this government to cut down expenditures have been opposed by hon. members opposite. It is all very well to talk about cutting down expenditures in a wholesale way, but when the items come before the house and are vigorously opposed we have evidence of the insincerity of such suggestions. The total expenditures of the dominion today, because of expenditures for unemployment relief, old age pensions and other things, have greatly increased. Yet hon. members in the far comer of the house come to us at this time with a new movement known as the Cooperative Commonwealth Federation, having for its purpose the socialization of our whole system.
The people's ability to pay will at some time reach its limit. It is not possible for one half of the people of Canada to keep the other half; therefore we must work towards economy. The amendment to the amendment has been based upon the inflation of currency. From time to time Australia has been set up
The Budget-Mr. Porteous

as a good example of an inflated currency policy. May I quote from the remarks of Mr. Bruce on monetary standards as they appear in the report of the 1932 Imperial economic conference, as follows:
With this growing trade, no one will welcome stable exchanges more than we will if they come with higher prices. But any attempt to restore stable exchanges without a tolerable level of prices would be a mockery. A true international standard must give us stability of prices both in place and in time. By that I mean that we need currencies stable in their relations all round the world. We need, even more sorely, money that will enable a debt contracted in one year to be repaid by a comparable service when it falls due in another. If out of the present universal distress we can learn something of the art of reconciling these two stabilities we may yet extract from adversity a lesson of unrivalled value. Perhaps that reconciliation is not so difficult. Even now, the way to it may be clearing.
In conclusion I recognize that anything that Australia or any other dominion can do in relation to this great problem is relatively unimportant. The influence of action by Great Britain however, cannot be exaggerated. We trust that Great Britain will make a definite declaration of her policy and give us and to the whole world the lead which she alone can give.
The matter of inflation of currency has been ably dealt with by the hon. member for Athabaska (Mr. Davies). There is one thing certain, however, that if we as a nation wish to deal with other nations we must have an international basis of exchange. We are a self-governing nation, and therefore the parity of our currency cannot always be established because of the fact that it depends on our ability to pay. If we spend! extravagantly as a nation, and our ability to pay becomes hampered, then w?e must of necessity suffer an adverse balance of exchange. The amusing part of it is that those who have stood up in the house from year to year and talked against tariffs now stand up and introduce an amendment to the amendment for the inflation of our currency in order that they may give us an advantage in other markets and put to a disadvantage those other nations dealing with us.
I now come to the stabilization fund as set up in the budget. The farmers of Canada recognize the fact that when Great Britain departed from tihe gold standard and thus made an adverse rate of exchange between Canada and Great Britain, they were being hampered in their trade so far as exports are concerned. In recognition of this fact I think I can safely say that every hon. member of this government has from time to time received communications from farmers asking the government to take steps to stabilize the
(Mr. Porteous.]
exchange between here and Great, Britain. The government decided that inflation of currency was dangerous, but at this time they have set up -a stabilization fund which does exactly the same thing as the inflation of currency, so far as our exportable surplus of farm products is concerned. Prices of exportable surplus of any commodity are governed by the price in the country to which the goods are exported, minus ithe obstacle confronted in order to get into that market. In the paist those obstacles have in many oases been transportation, sales and excise taxes, and 'tariffs. We are now faced, however, with a new problem of exchange. I believe the stabilization fund will do more for the Canadian farmer than any other legislation which has ever gone through the House of Commons, because of the fact that it will not only raise 'the price of that surplus but will also raise the price of all the commodities affected in Canada. This is fully recognized throughout the farming districts, and I think it only shows the insincerity of those member's who condemn the stabilization fund when they say it was designed not for the benefit of the farmer but for the benefit of the processor of meats and meat products, canned goods and so on. If our currency were on a par with the British pound sterling wTe would derive exactly 'the same 'benefit that we will derive under this stabilization fund.
There is much talk to-day about economy; you cannot go to any municipality where that is not a common topic of conversation. The only way any government can economize is by spending less, and I think that should be impressed upon all governments. As I have already said, in some cases the ability of the people to pay has reached its limit. There is no use trying to get taxes from sources which are not taxable; therefore the income tax schedules have been increased so that those receiving the large incomes pay the large taxes. I am not in favour of a capital levy, but I have always maintained that some method should be devised whereby certain investments could be taxed that to-day are not taxed. I think that might be considered by governments in the future. I will give an example. A man buys a farm for 810,000, and has to borrow 86,000 in order to do so. Just as soon as he takes possession of that farm he begins to pay taxes on real estate valued at 810,000, but the man from whom he borrows the $6,000 escapes the payment of any tax unless he pays income tax. I think this is very unfair to the purchaser of real estate; it discourages investments in real estate. It encourages people to invest their money where it will not be taxed,

The Budget-Mr. Bothwell
and I think some small tax might be established under which the holder of the mortgage would pay part of the tax.
In conclusion, Mr. Speaker, may I say that, a great deal of ridicule has been directed at the government and particularly at the Prime Minister. This is nothing new; history records the fact that the greatest men have been condemned by the people they served, and the greater the service the greater the condemnation. So it is only to be expected that much unjustified abuse should be thrown at the Right Hon. R. B. Bennett. There may be times when I doubt his qualifications as a politician, but not for a single instance have I ever entertained the least doubt as to his qualifications as a statesman, administrator or prime minister. I believe the day will come when the people of Canada will appreciate to the fullest extent the ability he has shown in guiding and directing the Canadian people through this grievous period of depression.


Mr. C. E. BOTHWELL (Swift Current):: I hope the hon. member for North Grey (Mr. Porteous) will pardon me if I do not attempt to follow him in the arguments lie has advanced.
I think every person in the Dominion of Canada, Mr. Speaker, who has given thought to the situation in which we find ourselves will sympathize with the Minister of Finance (Mr. Rhodes) for having to bring down a budget at this time; I think everyone will realize the difficulties with which he is confronted in his endeavour to balance the budget. We are passing through the most difficult times Canada has ever known. It is title that the early settlers had difficulties also, but they were able to accommodate themselves to the conditions which existed perhaps better than the people of to-day can accommodate themselves to the conditions which exist now.
The budget was eagerly awaited by all the thinking people of Canada. Everyone was wondering if it would contain some ray of light and hope. So far as I can gather, Mr. Speaker, from the correspondence I receive from my own constituency and from the conversations to which I have listened, this budget has been reoeived with a feeling of despair on the part of the people of Canada. Perhaps they were expecting too much; perhaps they were hoping that the Minister of Finance would be able to change things overnight and usher in the dawn of a new era for Canada.
Many things have contributed to this feeling of despair. We are well aware that there is a world depression affecting all countries, but, with many others in this country, I believe that the situation in Canada might be remedied
to a very considerable extent. We do not see anything in this budget, however, tending to help matters at all. I should like to congratulate the Minister of Finance on his presentation of the budget; I think he explained the situation in an admirable manner and gave us facts which perhaps we did not expect to hear. The hon. gentleman did not try to paint the picture any brighter than the situation warranted.
Perhaps the first contributing factor to this feeling of despair which I mentioned is the continual drop in the trade of Canada. I find that at page 3206, of Hansard the minister stated that for the eleven months ending February 28, 1933, the trade of Canada had decreased by 8250,521,000 as compared with the eleven months ending February 29, 1932. We have been hoping for an increase in our trade. We do know, and we may congratulate the minister on the fact, that the government has brought about a favourable trade balance; but there is still a tremendous decrease in the trade of the country. We believe that the trade of Canada must increase if we are going to usher in that period of prosperity we are looking for. Then we have the falling revenue, for which we have been looking. We knew there would be a falling revenue, and that was not much of a surprise to most of the people. We have been studying railway statistics in the past few days. There has been an enormous drop in the earnings of the railwaj^s, not only in the Canadian National, which has been talked about so much, but also in the Canadian Pacific, and we believe on this side of the house that these deficits are largely attributable to the stagnation in trade which has been brought about to a considerable extent by the restrictions on trade which have been put into force by this government. We do not believe there is any chance of our railway earnings increasing with the freight rates that are now in effect, but the people of Canada cannot pay any higher rates, unless there is an increase in the trade of this dominion, and unless we give our railways something to do.
We had a good crop in the west ladt year. The railways have always in the past made money when there was a good crop in the west, in transferring the crop to the eastern seaboard, but in past years, in addition to hauling tihe crop, they have had cargoes to carry back. But the trade restrictions that have been imposed, together with the general depression, have eliminated that return traffic. The people of the west cannot buy, and about the only shipments that are going west are absolute necessities of life, a large proportion of which is made up of purchases through relief commissions.
The Budget-Mr. Bothwell

We had hoped that the government at this time would do something to ease the burden that lies on the consuming public of Canada, but we cannot find in this budget anything that tends to do that. Additional taxes are being levied under this budget upon people who are unable to pay the taxes that are now in force. We thought that something would be done to equalize the imposition of taxation upon the people. In his budget address the Minister of Finance gave a statement of the funded debt of Canada, and among the items enumerated at page 3219 of Hansard I find that there is the sum of $774,650,000 odd of outstanding bonds that are tax free. There is an annual interest payment on those bonds of $39,347,950.25- bonds that are tax free. A portion of that will become taxable on the first of November of this year, namely, the sum of $276,688,100, but the balance will run for a further term of years. The people of Canada, not only in the west butt in central Canada and in the maritime provinces, the ordinary person, the labouring class, the consumers, the common people of the country, are doing their utmost to make ends meet, but they find i't impossible to pay taxes on farm lands, if they own farms, or to pay taxes on town properties if they have houses in the town. I think we were entitled to expect at this time, after' two or three years of a depression such as we have been going through, that in this budget some step would have been taken to see that those people who have been escaping taxation should be brought just a little closer to the average man in the country. It may seem to the minister and to the government a rather extreme thing to do; it may look like renouncing contracts. But you must realize that the great majority of the people of Canada have been forced to renounce contracts; they are not able to live up to contractual obligations, and if there are 1,300,000 people in Canada on relief in addition to the hundreds of thousands who are on the verge of relief, surely it is time for some of these corporations and individuals who are holding tax free bonds to contribute to the upkeep of the country. A suggestion of that kind was made this afternoon by the hon. member for Nelson (Mr. Stitt), but he dad not give us the figures to show what amount was involved. There is however a sum of S774,000,000 odd, as I calculate from the statement of the Minister of Finance, of tax free bonds in this country.
I believe we have come to the time in the history of this country wiien every person must help to carry the load. It does not

seem fair any longer to 'leave the great bulk of the Canadian people suffering while those who were fortunate enough to get hold of tax free bonds go scot free. I realize that investments which they may have in corporations and in industrial concerns may not be earning the dividends they have in the past; I readily understand that these people are taking a substantial reduction in income right now. But they can afford to take a still greater reduction, or can afford to pay some part of the taxes of the country instead of the government endeavouring to tax the home, the housewife and children by such levies as an additional two cents on sugar. Before such taxation was levied, I submit that the government should have exhausted every other source. I know it sounds almost revolutionary to suggest breaking contractual relations even with individuals within Canada, but the time has come when, in my opinion, it has to be done.
I should like to refer to another matter. I think the government would be well advised to make a reduction in the duties imposed against certain classes of commodities coming into this country, for example, gasoline. It does not seem to me to be a fair proposition that oil companies such as Imperial Oil, the British American, the McColl-Frontenac, the Shell Oil, and other companies which may be able to take advantage of the protection afforded to the larger companies, should be able to draw out of the pockets of the people of Canada moneys to which they are not entitled. This commodity has a protection of two and one-half cents per gallon plus the excise tax. A dumping duty was in effect and a form of dumping duty is still in effect notwithstanding what the Minister of National Revenue (Mr. Ryckman) says. It is time that the people of Canada were able to get some of the benefits to be derived from the cheap gasoline being sold throughout the world. If this government was deriving any benefit from these duties it would not be so bad, but duties should not be imposed simply for the sake of protecting an octopus like the oil industry and penalizing all individuals who find it necessary to buy gasoline and oil. Such action is not fair in times such as we are now experiencing. One oil company was able to ship $12,000,000 of profits down to the Standard Oil Company of New Jersey to enable that company to get on the right side of the ledger for last year's operations to the extent of $8,000,000, whereas otherwise they would have shown a loss of some $4,000,000. This is only one class of industry which is protected by the tariff legislation put through

by this government in 1930, and 1931. Most of the people in Canada have not enough to pay their absolutely necessary outgoings, and yet the Imperial Oil Company have been protected to such an extent that they were able to ship out of Canada some $12,000,000 of profits taken from the Canadian people in order to build up a parent concern.
I was rather surprised at the effort made by the Minister of Trade and Commerce (Mr. Stevens) and the hon. member for Souris (Mr. Willis) to show that this government has not raised tariffs. It seems to me that they must be in a bad way to find something to talk about when they endeavour to prove a thing like that. The other evening the hon. member for Souris gave some rather astounding figures which he had taken from the publication Trade of Canada, On page 3496 of Hansard the following appears:
Increase in average Mackenzie King tariff, 1922 to 1929, over previous Conservative tariff, 1917-1921 on dutiable imports 2-2 per cent.
Increase in average Bennett tariff, 1930-32, over previous average Mackenzie King tariff on dutiable imports 2 per cent.
I ask the house to listen to this:
In their first full calendar year in office the Mackenzie King government increased the average tariff by 4-3 per cent, and similarly in the first full calendar year the Bennett government increased the average tariff by 1-6 per cent.
If any hon. member will take the trouble to look up that particular page of Hansard he will find that the hon. member included the year 1922-I assume that is the fiscal year ended March 31-as a Liberal year. The records will show that after the elections of 1921 the Mackenzie King government came into power, I think in the month of December and the budget was not brought down until May, 1922. The great increase of 4-3 per cent referred to by the hon. member took place under a Conservative and not a Liberal regime. That is the first mistake he made.


Mr. CASGRAIN:: They made many more.


Charles Edward Bothwell: The hon. member took bis figures from the publication Trade of Canada, but I should like to know what sense there is in having a column headed "Average Ad Valorem Rate of Duty on Dutiable imports" and then another column showing the average for total imports. In order to arrive at an average rate one must take into consideration all the goods imported as well as the various rates under which they were imported. This morning in the committee on banking and commerce Doctor Coats illustrated this in connection with another matter. He said that in order to arrive at an average rate of interest it would not be fair to
The Budget-Mr. Bothwell
take $1,000,000 at six per cent and $100,000 at eight per cent and strike an average without taking into consideration the amount of money which bore the different rates of interest. The same thing applies in striking an average ad valorem tariff rate. A number of commodities entering this country bear a specific duty. If you have a $4 duty on a $40 article, you have an ad valorem duty of ten per cent, but if you have a $4 duty on a similar article worth $80, you have only a five per cent duty. To put it in another way, if you have a duty of $4 on an article worth only $20, you have a twenty per cent duty. The hon. member for Souris simply took the average duty, not the average weighted duty. A drop or increase in the price level would make a considerable difference as would the quantity of the various goods coming into the country. In order to prove my point I would refer again to the statement made by the hon. member which I quoted last, as follows:
-and similarly in the first full calendar year the Bennett government increased the tariff by 1-6 per cent.
The other evening the hon. member for South Huron (Mr. Golding) gave certain figures in connection with duties. I should like to quote a few of these to show the house the difference between the duties imposed by the Mackenzie King government and those imposed by the present government, even after the preference was allowed. The first figures he gave were in connection with cotton printed piece goods. Under the Mackenzie King government the rate was 18 per cent while under the preference of the Bennett government the rate was 58-5 per cent. That rate includes the dumping duties and the exchange duties.
King Preference
% %
White cotton flannelette....	15	52Wool piece goods	
24|	64Wool overcoating	
241	93High grading suiting	
24|	68Wool hosiery	
201	82Blankets	
201	80
Then, coming to the agricultural end of the duties, he gave the following figures:
Binders	
Seed drills	
Manure spreaders..
Cultivators	
Milking machines..
Hay loaders	
Incubators	
Ensilage cutters. . Barbed wire.. .. Cream separators..
Old rate	New rate
Liberals	Conservatives
%	%
0	25
74	25
74	25
74	25
10	25
10	25
10	25
10	25
Free	10
Free	25
The Budget-Mr. Bothwell

When those figures go out to the Canadian people, will any of them believe the statement that the hon. member for Souris says ho took from the condensed preliminary report of the Department of Trade and Commerce? I do not need to quote other instances, because they were quoted in the press after the Imperial conference, on actual shipments of goods into Canada showing what the increase was, and all along the line they were similar to what I have already mentioned.
I should like to say a word in regard to the stabilization fund. An attempt has been made by some hon. gentlemen opposite to show that we on this side are in favour of it. I have listened to most of the speeches delivered from tins side, and if I understood them correctly, what was stated was this: If you are going to establish a stabilization fund for the benefit of some thirteen products, then you should go further and apply it to all other products. I have not 'heard any hon. member on this side say either that he was definitely opposed to the stabilization fund if it were applied in that way or that he was in favour of it as being applied only to the thirteen commodities to which it now applies. It is something like the wheat bonus. I heard the hon. member for Qu'Appelle (Mr. Perley) the other afternoon state that we on this side were opposed to the five cent bonus on wheat. I was in the house during that time; I heard the debate on that particular subject and I know from this side we were opposed to the five cent bonus on wheat in the way it was originally introduced; that is, when we thought it was going to be paid to the railways on account of freight, we were opposed to it. Then when we thought it was to be paid to the grain trade, that is to the exporters of wheat, instead of going back to the farmers, we were still opposed to it. I believe many hon. members then stated that they were opposed to 'the principle of the five cent bonus on wheat, and I do not blame anybody for t'ha't attitude. We derived some benefit from that bonus in the west, but the people there who were most in need of help in that particular year, received no benefit at all from the five cent bonus. The same thing applies to this stabilization fund. No one is anxious to take any benefit that may be derived from that away from those who can get the benefit of it, but if a certain number of people in this country are to derive benefit from it, then we believe there is a great body of other people in Canada who are also entitled to derive similar benefits on other products. The fact of the matter is that we believe the government by its tariff
[Mr. Bothwell.1
legislation has so penalized the people, the producers of Canada, it is necessary for it to hand out bonuses of one kind and another in order to keep things moving. Just in that connection I want to draw attention to a report that was made by one of our Canadian correspondents in London, Mr. M. H. Halton, after the budget came down. He said:
"The Canadian plan wron't, of course, nullify any Ottawa preferences," he said, "but it's exactly the kind of dumping which, on the part of other countries, raised so much protest here and in Canada. However, it is almost bound to benefit Canadian primary producers."
He went on:
The board of trade said no British law exists against importation of bonused products. Sir Douglas Newton, agricultural expert at the Ottawa conference, expressed intense surprise at the announcement, and said the plan W'ould necessitate much consideration. Sir John Gilmour also seemed surprised but refused to comment. The London Central Markets, the chief British wholesale meat and meat products associations, however, is frankly cynical. "It's dumping, but what of it?" said an official, "and it won't increase Canadian meat sales over here."
If Britain is going to consider a payment out of this stabilization fund as a bonus to agriculture as a species of dumping, then I think we would be better without it. In any event it is not fair to the people of Canada unless the stabilization fund is established for the benefit of all primary producers who are able to produce goods for export.
On motion of Mr. Rowe the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, April 5, 1933