1933-03-28

OFFICIAL REPORT


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.	_	* ' c **
[Stage Direction]
House of Commons Deflates
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Tuesday, March 28, 1933

Hon. W. A. GORDON (Minister of Labour):: I desire to lay upon the table of the house orders in council passed pursuant to the Relief Act.



CRIMINAL CODE AMENDMENT


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Hon. ERNEST LAPOINTE (Quebec East) moved for leave to introduce Bill No. 57 to amend the Criminal Code (Appeals to privy council).
Some hon. MEMBERS:: Explain.


Mr. LAPOINTE:: Subsection 4, of section
1024,	of the criminal code, formerly section
1025,	abolishes appeals to the privy council in criminal matters. This section is still in the statutes and has been the law of Canada for the last four or five years. In 1926 a case known as the Nadan case originated in Alberta and upon its being brought to the privy council this particular section of the Criminal code was declared ultra vires of the Canadian parliament because it came in conflict with an old Imperial . statute which granted leave to the subjects of His Majesty to appeal to the privy council. Under the Colonial Laws Validity Act of 1865 that law of the dominion parliament was declared ultra vires and also because of the fact that this parliament did not possess the right to give extraterritorial jurisdiction to its legislation. Under the Westminster statute these two legal incapacities were removed but the removal applied only to future legislation of the Dominion parliament. In order to give force and effect to this provision of our law it is necessary to re-enact
it and declare that it has full force and effect. This is the purpose of the bill.


Hon. HUGH GUTHRIE (Minister of Justice) :: Mr. Speaker, the question of the rights and powers of this parliament under the statute of Westminster which was adopted at the last session is now under consideration by the law officers of the Department of Justice with a view to introducing into this house at this session a bill which will deal with all questions that arise under the new authority given to this parliament by the statute of Westminster. This new legislation will cover not only the particular section of the criminal code mentioned by the hon. member for Quebec East (Mr. Lapointe) but also the extraterritorial effect to be given to all laws of the Dominion of Canada. It is hoped that a bill will be introduced during the present session to deal with all these matters rather than dealing with one at a time.


Ernest Lapointe: I a.m pleased that my hon. friend has made this statement. Perhaps he will allow the bill to be read a first time and remain upon the order paper until this legislation is brought down.


Hugh Guthrie: Certainly.
Motion agreed to and bill read the first time.



CONSERVATION OF HERRING

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On the orders of the day:
Hon. PETER J. VENIOT (Gloucester): I should like to inquire of the Minister of Fisheries (Mr. Duranleau) if any new regulations have been formulated in connection with the conservation of herring, and processes of salting, canning, etc. He may not have the information at hand at the moment, but perhaps he can obtain it for me.
Hon. ALFRED DURANLEAU (Minister of Marine):: I shall take this as a notice of question, and shall answer it to-morrow.

34G0

The Budget-Mr. Stevens



FRUIT MARKING

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On the orders of the day:
Mr. W. A. FRASER (Northumberland):: I should like to ask the Minister -of Agriculture whether h-e contemplates introducing legislation this session for the revision of the act relating to fruit marking.


Hon. ROBERT WEIR (Minister of Agriculture) :: The matter is under consideration.



THE BUDGET


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The house resumed from Friday.. March 24, 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.
Hon. H. H. STEVENS (Minister of Trade and Commerce):: Mr. Speaker, another year
in the fiscal history of this country has come and gone, and perhaps what is even more important is that another year of this period of intense economic and commercial depression is past and gone. 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.


Some hon. MEMBERS:: Hear, hear.


Henry Herbert Stevens: 
Mr. MACKENZIE (Vancouver):: It is.


Henry Herbert Stevens: I think it is not. If we
are sending out to the markets of the world a quantity of Canadian products reasonably commensurate in volume with what we were sending before, then I think we can claim that our trade is not in a bad state. Of course, the question of value enters into it;

The Budget-Mr. Stevens
no one denies that. But it is obvious that we could not export from this country in times of depression two or three times the volume of goods that we exported before in order to equalize the value of our exports due to the fall in prices. I submit this to the house, that if it can be shown that the volume of our trade is being reasonably well maintained during this period of difficulty, the hon. gentleman's argument falls to the ground1; and secondly, that if it can be demonstrated that prices have fallen in a corresponding ratio to the drop in revenues, there is nothing left to his case.
In the first place I shall deal with our trade, giving a few very striking illustrations. The year 1932 has been declared one of the worst years in our history both as regards trade and economic conditions throughout the world generally. I now give to the house the following increases in the value of our exports to some ten different countries, among them being many of our chief customers, and all these are increases on the basis by which my hon. friend from Shelbume-Yarmouth measures trade; that is dollar increases, an actual increase in the dollar value of the
goods exported, and therefore the volume of the trade itself must also have been greatly increased:
Exports
1932 increase in value over 1931
United Kingdom	$6,637,000
Netherlands	 3,334,000
Belgium	 561,000
Australia	 2,368,000
Peru	 89,000
Norway	 324,000
Sweden	 846,000
Spain	 1,497,000
Russia	 1,677,000
Ceylon	 5,000
That makes a total of $17,300,000 of an increase in the value of our exports to those countries. Consequently my hon. friend cannot claim that we are closing those markets to the Canadian producer.
Now I turn to our trade with the United Kingdom, and I will give to Hansard a statement which I shall read. I have included wheat in. the list for purposes of information not that I claim any trade significance in regard to it because wheat is something that is exported in very large quantities in all years:
Canada's Exports to the United Kingdom showing Increases Ten months ended January 31, 1932, 1933
Apples, green	Bbl.
Fruits, canned, preserved	Lb.
Fruit juices and fruit syrups	Gal.
Fruits, dried	Lb.
Oats	Bush.
Wheat	     Bush.
Bran, shorts and middlings	Cwt.
Flour of wheat	Bbl.
Macaroni and vermicelli	Lb.
Oilcake and meal	Cwt.
Tobacco, unmanufactured	Lb.
Senega root	Lb.
Lobsters, canned	Cwt.
Hides and skins, n.o.p	Cwt.
Beef, fresh, chilled, or	frozen	Cwt.
Bacon and hams	Cwt.
Canned meats	Lb.
Pork, fresh, chilled or frozen	Cwt.
Pork, dry salted	Cwt.
Poultry, dressed or undressed	Lb.
Cheese	Cwt.
Milk, condensed, powdered, evaporated. ..Cwt.
Animal fats, n.o.p	Gal.
Fish oil, n.o.p	 Gal.
Grease and grease scraps	Cwt.
Lard compounds	Cwt.
Honey	 Cwt.
Socks and stockings	Doz. prs.
Wrapping paper, kraft	Cwt.
Planks and boards	M ft.
Timber, square	M ft.
Castings	Cwt.
Rolling mill products	Ton
Typewriters and parts	No.
Automobiles, passenger	No.

Quantity		Per cent
1932	1933	increase1,240,482	1,315,128	6-04,733,671	8,400,971	77-5196,025	363,329	85-583,975	239,915	185-75,153,448	7,470,625	45-0101,293,076	135,292,710	33-0196,820	1,470,026	646-81,765,424	2,035,929	15-3761.385	1,587,194	108-543,208	75,811	75-53,571,594	9,590,922	168-543.497	63,108	45-128,106	28,646	1-94,951	10,331	108-74,781	19,382	305-4106,491	289,641	172-014,885	390,622	2,524-34,459	17,010	281-54,274	18,122	324-056,175	1,203,645	2,042-7800,481	821,013	2-665,560	157,946	140-988	17,533	19,823-916,574	187,086	1,028-85,973	-41	1,086	2,548-81,823,522	2,111,766	15-83,055	19,295	531-615,394	17,211	11-8100,612	159,855	58-918,674	21,773	16-62	3,032	151,500-04	240	5,900-0415	10.012	2,312-5219	1,562	613-3
The Budget-Mr. Stevens
Canada's Exports	to	the United Kingdom showing Increases			
Ten months ended January 31, 1932, 1933-				Cone.	
			Quantity		Per cent
1932	1933	increaseCobalt alloys.	.. ..Lb.	12,650	22,279	76-1Copper bars, rods, sheets, etc. . . .	146 174	868,577	494-2Lead in pigs, refined lead	774,018	1,061,356	37-1Abrasives, artificial, crude	. . . .Cwt.	30,107	55,536	S4-5Coal tar and pitch	.. ..Gal.	-	962,190	-Graphite	500	1.411	182-2Talc	18,152	25,938	43-0Cobalt, oxides and salts	.. ..Lb.	154,000	273,000	77-3This, Mr. Speaker, indicates the	Ill OTGSSC	in imports. With that in mind	I am goingin the volume of our exports to	the United	to give a corresponding table of the increase	Kingdom of the items I have	mentioned.	in imports from the United Kingdom to Can-	There are those who say there is	no	increase	ada. The list is	as follows:	Canada's Principal Imports	from the United Kingdom	10 months ended January 31, 1932-33	Quantities	Per cent1932	1933	increaseOranges	. .Cub. Ft.	21,611	35,402	63-8Nuts (except coconuts)	.. ..Lb.	621,100	1.050.228	69-1Castor oil	.. ..Gal.	74,588	133.587	79-1Cottonseed oil, crude	44,981	90,646	101-5Oil for soap	.. ..Gal.	112.581	179,622	59-5Crude rubber	.. ..Lb.	4,474	1.398,830	31,165-7Confectionery	.. ..Lb.	2,497.605	2.507,609	0-4Cotton yarn	.. ..Lb.	1,427.605	1,912.397	34-0Piece dyed	.. ..Lb.	1,478,284	1.640,946	11-0Velvets and plushes	.. ..Lb.	218.536	294.275	30-1Handkerchiefs, cotton	Lb.	227,S40	259,140	13-7Towels	Lb.	461.0S4	500.939	8-6Handkerchiefs	.. ..Lb.	98,599	105,080	6-6Wool noils	.. ..Lb.	105,632	677,812	541-7Worsted tops	.. ..Lb.	3,756,161	4.814.986	28-2Locomotive and car wheel tires. .	. . . .Cwt.	23,417	54,638	133-3Band and hoop iron	12.922	15,291	18-3Bars, including rails	68,558	105,607	54-0Galvanized sheets	290.793	401,757	38-2Sheets, No. 14 gauge or thinner..	.. . .Cwt.	114,617	212.345	85-3Bauxite ore	-	263,893	*	Tin in blocks, etc	4,179	5.104	22-1Batteries, storage	. . . .No.	19	178	836-8China clay	185,138	196.231	C-6Coal, anthracite	869,919	1.380,894	58-7Coke	.. ..Tons	1.103	40,113	3.536-7Common window glass	. .Sq. Ft.	488,486	1.030.988	111-1Salt	479.644	569,609	18-8Lithopone	.. ..Lb.	1,681,341	2.203.720	31-1Oxides	.. ..Lb.	1.022,432	1.095,167	7-1Zinc white	.. ..Lb.	2.639,697	4.852,053	83-8Potash and compounds	.. ..Lb.	370.428	485,247	31-0Soda and compounds	.. ..Lb.	15,447,188	18,430.356	19-3
The reading of these items may be a little wearisome, but the point I wish to make is that the hon. member who criticized the government so bitterly made the claim that our trade was diminishing. Undoubtedly the trade of Canada is diminishing, in common with that of the world, brought about by the calamitous fall in the price levels. But if it can be shown that Canada is maintaining in some measure the volume of its business, the export of its goods in weights and measurements, then we have reason for encouragement and hope. That is the point I am bringing out.


Mr. MACKENZIE KING:: May I ask the minister if he has corresponding tables on exports and imports with respect to world trade?


Henry Herbert Stevens: I shall come to that in a minute. Although I shall not read it in detail because it would be too wearisome, I shall give to the house briefly a resume of new busi-
The Budget*-Mr. Stevens

ness that has been secured by the various commercial trade agencies of the government in all parts of the world. This deals with the increase in the value of business, or the new business secured in the agencies established at the following places: Athens, Batavia, London, Bristol, Liverpool, Glasgow, Dublin, Oslo, Brussels, Hamburg, Milan, Paris, Rotterdam, Melbourne, Auckland, Calcutta, Port of Spain (Trinidad), Kingston (Jamaica), Rio de Janeiro, Havana (Cuba), Panama City, Lima (Peru), Mexico City, Buenos Aires, New York, Shanghai, Hongkong, Tokyo, Kobe, Cape Town and Cairo. In all these places substantial new business has been obtained by the trade agencies of the government, and it shows for the year in the 603 established agencies new business valued at $11,000,000. All this indicates the efforts being put forth by the government and its officials abroad, and the results being achieved.
Now coming to the question the right hon. gentleman asked a minute ago. He asked if we had any evidence to show that there is a general increase in business. I do not say that there is an actual increase in all our business, or in all our exports. But I have here a calculation made for me by the Bureau of Statistics which indicates that the fall in the volume of our trade as compared with 1930, is only five per cent. I refer to the total exports to all parts of the world. This, I think, is a creditable showing. The calculation is based upon this premise: I include in the statement, in both instances exports only, that is in the 1930 price and in the 1932 price. We take the volume of business in 1932, and measure it by the price level of 1930, or apply to the volume of business in 1932, the price of 1930. Revaluing the 1932 exports at the 1930 price we have this result:
Exports
1930	$895,000,000
1932	 840,000,000
Or a decline of $44,000,000 or about five per cent. That, I think, is substantial evidence of the extent to which we are maintaining the volume of our trade abroad.
The other day the hon. gentleman had another criticism when he said that the shrinkage in customs revenue was due to tariffs. Or, to use his own words, he said that our tariffs went on in May and then down went the imports, down went customs revenue with the result that our customs revenue in 1931 was $145,000,000 and in 1932, $69,000,000. In order to support his argument he gives a table of percentages. He shows in this table

that in 1926 the percentage of customs revenue to the total revenue was 42, and it has fallen in 1933 to 28 per cent. I ask the house to examine these figures. In the first place the hon. gentleman seeks to prove that because there was a fall in customs revenue in relation to total revenue, to 28 as compared with 42 per cent,-a fall it will be noted of 33J per cent,-that was entirely due to the imposition of restrictive tariff duties. I wish the house to follow me in a recital of price indices for Canada, the United States and the United Kingdom. We have the following rather interesting result. Taking 1926, which was the year he used in his calculations, as 100, we have this result; the Canadian price index, 100 in
1926,	was 63-6 in February, 1933, or a drop of 36-4 per cent. Irving Fisher's index, 100 in 1926 was 55-3 in February, 1933, a drop of 44-7 per cent. The Bureau of Labour figure in the United States, 100 in 1926, was 62-6 in 1933, a drop of 37-4 per cent. The Economist index in the United Kingdom, 100 for
1927,	was 61-2 in January, 1933, a drop of 38-8 per cent. In every instance, in Great Britain, in the United States, in Canada, you have a drop in prices of 36 to 44 per cent. Consequently there was bound to be a corresponding drop in the revenue collected from ad valorem taxes. So while there was a drop in the proportion of customs revenue of some 33-J per cent it is only reasonable to assume that it was in large measure accounted for by the drop in the price level of goods in that period of time.
Then I take another test of the fairness of my hon. friend's argument. I remind the house that the charge is that the rates of duty have been boosted unduly and unwarrantably. He says, "Up went the duties and down went revenue." Let us take the average duty on goods imported from the United Kingdom, other than alcoholic liquors, for the term in which my hon. friends opposite were in office. You have an average rate of 17-9 per cent. In 1932, under the present government's increased tariffs condemned so much by my hon. friends, we have a rate of only 18-62, about f of 1 per cent increase on the average on dutiable goods imported from the United Kingdom. If we turn to the United States we find this figure. During the Liberal term of office the average rate of duty was 23-9 per cent and under the present government in 1932 it was 27-45 per cent, in other words an increase there of about 3J per cent.


Mr. EULER:: Does that include the specific duties?

The Budget-Mr. Stevens


Henry Herbert Stevens: It includes all duties as far as I know. It is calculated in the regular way by the Bureau of Statistics and carried through in both instances on the same basis.
I wish also to give at this time an indication of the trend in Canada's trade, the proportions of Canada's imports from and exports to empire and foreign countries. In 1929 our imports from empire countries were 19-8 per cent of our trade, in 1932 this had increased to to 28-3 per cent. Our exports to empire countries, 33-4 per cent in 1929, had increased to 44 per cent in 1932. Then for foreign countries we find the reverse situation. It will be noted that there was an increase of about 10 per cent in the proportion of trade with empire countries in the last four years, and we find a decrease in our trade with foreign countries, from 80 per cent in 1929 to 71 per cent in 1932, for imports; and from 66 per cent to 56 per cent for exports. Taking the United Kingdom figures, we have 15 per cent of our imports coming from the United Kingdom in 1929, and 20 per cent in 1932; and our exports to the United Kingdom increased from 24 per cent in 1929 to 36 per cent in 1932. This will indicate the trend of Canadian trade. Unquestionably we are gradually seeing the result of the Imperial economic conference proposals and agreements of last summer.
My hon. friend, the critic of the opposition, denounced the government tax proposals very bitterly. His speech was designed, I think, to attract the support of every tax-dodger in Canada. He found fault with every form of taxation, every impost, that the Minister of Finance found1 it necessary to make. And he used this old hackneyed phrase; the taxation proposed, he said, will fall upon those least able to bear it.


An hon. MEMBER:: He was right.


Henry Herbert Stevens: An hon. gentleman says
he was right. Let him look for a moment at these facts. Here is the record from the public accounts, page 52. Taxes paid by banks, average for the years 1922 to 1930, $1,240,000. The average for the years 1931 to 1933 was $1,390,000. In other words there was an increasce of taxation of banks during the term that we have been in office as compared with the time when my hon. friends were in office. Then let us take income tax; the average amount of income tax during the 1922-30 period when my hon. friends were in office was $57,000,000 annually. In the last three years, 1931-33, the average is $65,000,000, and that with the falling off in earnings and diminution of revenue upon which this tax
could be imposed. So we see that in income tax and the tax on banks we have a larger imposition under this government than under my hon. friends opposite. Take sales tax. This is the tax, mark you, which comes under the category of the hon. member's description, taxation which will fall upon those least able to bear it. It is the tax he referred to the other day as the one that would be the poor man's tax. From 1922 to 1930 the average was $94,000,000. And in case my hon. friends say, Oh but there was a lot of business, let me remind them that for a very substantial portion of that time they had a 6 per cent sales tax, just what it is to-day. And for a very substantial portion of that time they had a smaller exempt list than we have to-day. In other words there was a heavier weight of sales tax during the term of office of my hon. friends than theTe is at the present time.


Mr. MALCOLM:: But values are lower
now.


Henry Herbert Stevens: During the years 1931-33 the average has been $59,000,000, as against $94,000,000 in the previous period. When my hon. friends go, as they will, with the speech of the hon. member for Shelburne-Yarmouth (Mr. Ralston), before this country and argue that this government is imposing taxes upon people who are least able to bear them, let them bear in mind where that weight of taxes rested during the nine years that they were in office.
Now the hon. member sneered at the agricultural stabilization plan. He said it was a very unsound principle. He said, in principle I am opposed, have always been opposed, to this sort of thing. Now the hon. member for Shelburne-Yarmouth spoke for the Liberal party. He is opposed to this thing. Absolutely opposed to it. Then he turned around and said the main thing that was wrong with it was that it was not extended to all kinds of products. He says it is unsound and uneconomic, but the chief thing wrong is that it is not extended to manufactured products. Not satisfied with that he says, "Why, you are only extending it to goods sent to the United Kingdom. You ought to apply it to goods going to all parts of the empire." Then, carried away with that, he said it should be extended to goods sent to the United States. He wanted to apply this form of stabilizing exchange to goods sent to the United States, whose money is at a premium in this country; that was his proposal. Let us examine his position.
The Budget-Mr. Stevens


James Malcolm: Would the minister
indicate in Hansard where the financial critic said he wanted the stabilization fund to apply to goods sent to the United States?


Henry Herbert Stevens: Yes, gladly.


James Malcolm: He said if it was sound why not apply it.


Henry Herbert Stevens: It does not sound very
well, I will admit. The hon. gentleman said:
Now, no one can tell how it is going to work out until he sees the result next year.
That is what we call, in slang, a wise crack. He is pretty safe there.


James Malcolm: That is logical.


Henry Herbert Stevens: My hon. friend says that
is logical. If a government should confine itself to the imposition of taxes and similar matters in connection with which the full result could be seen a year before the imposition was made, I do not think we would impose very many taxes in this house. Then the hon. gentleman went on:
I said the same thing about the wheat bonus and I repeat it now in regard to this matter. In principle I am opposed to this sort of legislation, because I do not believe it is sound, but if bonuses are going-


Mr. HANBURY:: 


Henry Herbert Stevens: My hon. friend is not improving his standing here by interjecting that sort of thing.
-if bonuses are going they ought to extend to every natural product and, as someone suggests, factory products as well. I cannot see how you can pick out some part of the community shipping to Great Britain and say to that class that they will have a certain amount made up on what they lose in shipping to Great Britain, while other exporters are given no such consideration. Take for instance the fresh fish producers. According to this they will get a bonus, but the preserved fish man does not.
Then the hon. gentleman went on to a discussion of other items such as canned and salt fish and lumber. A little later he said:
One could name numbers of natural products that fall into the same category. After all, Mr. Speaker, I ask you: Is there any guarantee, except what the Prime Minister said last evening to the effect that the government were considering the matter of machinery, that the man who actually produces the goods will get the .benefit of this bonus? The exporter is the one who will get it, according to the budget speech.
And so on.


Some hon. MEMBERS:: Oh, oh.
[Mr. Stevens.}


Henry Herbert Stevens: What is the matter? I do not want to read the whole of the hon. gentleman's speech, but hon. members might listen to this:
I say to my hon. friend that he will not get very far in assisting the fishermen of the east in shipping fresh fish to England. I believe there was about $300,000 worth of fresh fish shipped last year to England whereas the shipments to the United States amounted to something like $6,000,000. If this provision is intended to assist the producer of fish, why does he not get the bonus for the fish he ships to the United States as well as to Great Britain?
So the hon. gentleman proposes to apply this exchange stabilization scheme to goods shipped to the United States, whose money is at a premium.


Mr. BAKER:: I rise to a point of order. It is that the Minister of Trade and Commerce is not being given fair play by hon. gentlemen opposite.


Henry Herbert Stevens: They do not worry me at all.


Mr. SPEAKER:: I did not notice any improper interjections, but the minister should be accorded perfect silence while he is speaking.


Henry Herbert Stevens: In the remarks 1 have just read the hon. member for Shelburne-Yarmouth says there is no advantage to the fishermen in this scheme. I want to ask him this question: Is it of no interest to those who last year exported $1,500,000 iworth of canned lobster to the United Kingdom that each pound sterling they receive should be worth $4.60 to them instead of S3.90 or $4.10? I ask him if it is of no interest to those who exported $3,500,000 worth of canned salmon to the United Kingdom that their pound should be worth $4.60 instead of $3.90 or $4.10? Is it of no interest to the fishermen that these two items alone, totalling over $5,000,000, should bring to Canada a larger return in terms of dollars and cents than would be possible under the existing rate of exchange? Is it of no advantage to the fishermen to obtain that increase? I have worked it out here and on these two items alone it would mean to the fishing industry an enhancement of their returns by over $750,000.
Then, Mr. Speaker, the hon. member turned to the Minister of Finance; with a very solemn look on his face he leaned towards the minister and said: "If the minister wants to help the fishermen of the maritimes why does he not deny licences to trawlers?" That seemed to be a very solemn and a very im-

The Budget-Mr. Stevens
portant matter in the estimation of the hon. gentleman. I took the trouble to look up the facts, and I find a very interesting record in this regard. I say to the hon. member, and in his absence I say it to his leader who was then leader of the government, why when they were in office and when this matter came before them did they not give the relief which they now very seriously tell the Minister of Finance ought to be given the shore fishermen? What are the facts? "Save the shore fishermen," says the hon. member for Shelbume-Yarmouth, "by refusing licences to the trawlers." In 1927, at his instigation, a royal commission was appointed headed by Hon. A. K. Maclean, now of the exchequer court. In 1928 that commission reported; four of the members were against issuing licences to trawlers, with the chairman dissenting. No action was taken. Where was the hon. member for Shelburne-Yarmouth and where was the government of the day at that time? They appointed a royal commission which presented a majority report, but they took no action whatever. Now they come forward and say this government is derelict in its duty in not refusing to grant those licences.
Furthermore the hon. gentleman, who is an able lawyer, drafted order in council P.C. 2196, dated November 2, 1929, which provided for the collection of one cent per pound for fish caught by trawlers in the maritimes. They were allowed to go on and no attempt was made to collect this fee until this government came into office in September, 1930, when the case was taken to the exchequer court. In that court the validity of the order in council was called into question and was thrown out as far as that tax was concerned. It was found to be ultra vires of this parliament. The hon. member who was chiefly responsible for drawing it up claims to be an able constitutional lawyer and when he drew it up he must have known that the order in council was not valid. My hon. friend, his leader and his colleagues in the previous government simply kidded the shore fishermen of the maritimes. There is an old saying in the law fraternity that when a man comes into court he must come with clean hands, and it ill behooves the hon. member for Shelburne-Yarmouth to twit the Minister of Finance upon the question of 'trawlers. The record is there to be seen by anyone who wishes to read.
I come now to a very important question to which I intend to give the closest attention. The hon. member criticized the government very bitterly for the assistance given in the stabilizing of the wheat market. When he referred to this matter the hon. member
for Quebec East (Mr. Lapointe) turned around and said that it was not hedging, it was gambling which the government had indulged in. This is too serious a matter to pass over lightly and I think the house ought to give it very careful consideration as it affects the life and welfare of the three western provinces.
This government has been faced with very serious problems in western Canada, one of them being that in connection with a drought which affected seventy municipalities and which lasted for three years. Large sections of the western provinces were affected. Another serious question which the government had to face was the collapse in wheat prices. Had it not been for the action taken by the government, of which I shall give a full explanation in a moment, the wheat market would have collapsed1 much more and prices would, I believe, have fallen to around the thirty cent level on the Winnipeg market. When we consider the problem of wheat prices we must remember that Winnipeg has become the most important price fixing centre in the world for wheat. The great Liverpool market is a buyers' market, but Winnipeg is the great world market for wheat. Chicago is no longer a world market; it is a great market as it handles the wheat for 120,000,000 people, but it is not a world market in the same sense as Winnipeg. The Winnipeg market is open and free for trading throughout the whole world.
When the hon. member declared that the action of the government was gambling and not hedging obviously he did not understand the action taken or the practice followed in connection with hedging on a market. The daily practice is that a purchaser, say the pools, a milling company, an exporting house or others, purchases a quantity of wheat, for instance, 1,000,000 bushels at the prevailing market price. The grain thus purchased goes forward to a central elevator at the head of the lakes or at Vancouver or to one of the storage elevators in the interior. If the transaction ended at that point the purchaser of the grain would be carrying all the risks of a possible fall in the market and to obviate or minimize that risk, the purchaser sells grain for future delivery. That is, he will contract to deliver wheat at some future time, usually three, six or nine months hence. Such sale is usually made at a price slightly in advance of the purchase price, plus storage charges, insurance, handling charges, et cetera. This is called hedging, or, in other words, insuring one's self against undue risk. It is not gambling but is the most conservative form of doing business. If such a practice is to be carried
The Budget-Mr. Stevens

on there must of necessity be willing buyers. If the hedging process is to be successful there must be willing buyers on the market to contract to buy grain for future delivery. In normal times there are many people willing to take the risk; they purchase these futures, or, in other words, enter into a contract to receive delivery of wheat at some future date for which they pay a margin down as an earnest of good faith. These contracts for future delivery are negotiable and may be passed from one person to another. The price paid is based upon calculations as to the likely price of wheat at a future date, such as May, July, October or December, the usual dates fixed for settlement of such contracts. These calculations are supported by the most minute information collected through various agencies as to the condition of crops all over the world, the amount of wheat available in exporting countries and the condition of supplies in importing countries. The most noted of these avenues of information are the International Agricultural Bureau at Rome, the American government agricultural department crop bulletins, Broomhalls, the Dominion Bureau of Statistics, crop reports as well as a large number of other agencies that gather information and supply it to the public. Up to this point it may be said that the practice is a normal one.


Mr. CASGRAIN:: From what communication is my hon. friend reading?


Henry Herbert Stevens: I anticipated that some
hon. member would be small enough to ask that question. For the information of my hon. friend I say that every word which I am reading was dictated by me merely for the purpose of accuracy and because of its importance.


Joseph Philippe Baby Casgrain: I thought the minister
was reading from a statement.


Henry Herbert Stevens: Other than one or two
minor changes made in the text, not one word has been changed since I dictated this. I dictated this simply for my own protection and I am not leaning on anyone else.


Joseph Philippe Baby Casgrain: I just asked if the minister was reading from a statement.


Henry Herbert Stevens: My hon. friend is not going to get awaj' with it in that way. His suggestion was that I was incompetent to prepare this document.


Joseph Philippe Baby Casgrain: Not at all. Generally
the minister does not read from anything and I was asking what he was reading from.


Henry Herbert Stevens: It is my own.


Joseph Philippe Baby Casgrain: I am glad it is his own.
[Mr. Stevens. 1


Henry Herbert Stevens: Up to this point it may be considered that the practice followed was a normal one. Now the Dominion government's stabilization plan comes into the picture. Two or three years ago it was discovered that due to the collapse of world commodity prices and stock market operations generally, the buying of grain for future delivery had virtually ceased upon the Winnipeg grain exchange. In other words, the public was not in the market. This condition presented at once a very serious problem because the pools were bound to buy and take physical possession of the wheat of their members. This entailed very heavy responsibility and the financing was carried on by the banks advancing large amounts of credit to the pools. As the market was obviously a falling market, there were no contract buyers available and it became clear that unless some agency would carry the contract risks, the market would utterly collapse and the price of wheat would fall much below the level which it did reach. Recognizing this fact and appreciating the serious loss which would be entailed, particularly to the producer, the government authorized Mr. John I. McFarland, the head of the pools sales agency, to purchase grain for future delivery when it was necessary to do so in order to hold the market steady. This was done and the whole transaction was successful in preventing a further serious reduction in the world price of wheat, as Winnipeg has been the pivotal point of wheat marketing, influencing the price of wheat in the world markets. The result of this movement has been to hold the market steady and prevent the dumping of unusual quantities of cash wheat upon the market. It also distributed the marketing of wheat over a longer period of time. There are strong evidences that by holding the market reasonably steady for the past two years, this movement will prove to have been successful in itself, because it has given time together with natural processes, for the absorption of the tremendous overhang of 350,000,000 to 400,000,000 bushels in the hands of the United States.
During the past two months, the wheat market has been very steady, showing an inclination for slow but sure advancement.
The Dominion government, through this action, is not faced with any immediate loss, as we are able to carry forward these contracts and liquidate them only as market conditions warrant.
Up to the present it has not cost a cent to do so, and the possibility of liquidating the whole situation without a dollar of loss is not an unreasonable expectation.

The Budget-Mr. Stevens
Let me again assure my hon. friend (Mr. Casgrain) I had this written out merely for the purpose of accuracy owing to the importance of the subject and my desire to get before the house as clear a statement as I could give it on this very important matter. But I pause now to emphasize this, and I ask my hon. friends, particularly those from western Canada, to accord to a government at least some measure of cooperation and support when we make an effort of this kind, obviously taking some risks in judgment, for the purpose of holding steady the great wheat market of Canada which is one of the most important things affecting our economic life.
My hon. friend opposed the budget proposals. He opposed the reduction of the pound for duty purposes from $4.40 to $4.25. He opposed the exchange stablization scheme. He opposed reductions in tariff on some thirty items.


Some hon. MEMBERS:: No, no.


Henry Herbert Stevens: He opposed increase in
the excise on perfumeries, the increase in the income tax. He opposed the adjustment of the sales tax. He opposed the revenue tax on sugar and he opposed and denounced the tax on bonds held outside Canada.


William Lyon Mackenzie King: Where does
the hon. member find justification for saying that the hon. gentleman opposed reductions in tariff?


Henry Herbert Stevens: I find it in the amende
ment to the budget, where he says:
They imply a continuance of fiscal and other policies which have not only signally failed to afford any solution of our national problems, but have been proven to have the effect of diminishing trade. . . .
The increases in taxation proposed in the budget resolutions will fall most heavily on those least able to bear the burden thereof.
Then he winds up his amendment by saying:
For these and other reasons, this house is of opinion that the present government no longer possesses the confidence of the country.
The right hon. gentleman rises in his place and asks:	Where do you find any justification for saying that we oppose these? The right hon. gentleman does not like to see these items brought out individually.


William Lyon Mackenzie King: I said justification for the statement that he was opposing reductions in tariff.


Henry Herbert Stevens: So he did.


William Lyon Mackenzie King: No, he did not.


Henry Herbert Stevens: The hon. member for Shelburne-Yarmouth, in this resolution, cheered and supported by the ex-Prime Minister and all his followers, condemned everything that was in the budget. The right hon. gentleman will not find in that speech of March 24, 1933, a single word approving of anything the government has done or proposes to do.


Some hon. MEMBERS:: Hear, hear!


Henry Herbert Stevens: Hon. gentlemen opposite agree. They say: "Hear, hear." The situation, however, is this, that in the proposals in the budget there are some points which we certainly realize will be distasteful to some of the taxpaj'ers. That is debatable ground; it is ground on which one might expect divergent opinion. But there are in the budget some things which my hon. friends opposite dare not oppose and then face their constituents. They will express a wholesale condemnation of the government instead of indicating that so far as the effort of the government is concerned, in certain respects they give it their endorsation.
The reduction of the pound for duty purposes from $4.40 to $4.25, is it good or is it not? Is it in the interest of Canada and her relations with the British Empire or not? Which is it? My hon. friends dare not oppose that individually, but they condemn the government and all its works as a whole and would vote it out of office. Is the exchange stabilization capable of support? Will my hon. friends from western Canada whom I see over there, my hon. friends from the rural districts of Ontario, from the rural districts of Quebec, support this or will they not?


Some hon. MEMBERS:: No.


Henry Herbert Stevens: They will not. That is their own lookout. As far as we are concerned, we believe it is in the interest of the primary producers. Will they support the increase in the income tax? They will not discuss it, but they will condemn the government that undertakes it. They will twit the government on being the friend of the big interests, although we are increasing the corporation tax from 11 to 12i per cent. In their resolution they condemn us for doing this. The other day the hon. member condemned us in so many words for imposing the five per cent tax on earnings from bonds held outside Canada. He stood in his place, with the right hon. gentleman behind him, and said to the Minister of Finance that he warned him that this was not a very promising source of revenue and something that might result in
The Budget-Mr. Stevens

serious trouble for him. Perhaps I am a little mean in saying this, but my hon. friends have rather provoked it. I wonder: When the hon. gentleman made that utterance, was he speaking as a legal man from the great city of Montreal or as a friend of the poor taxpayer of Canada.


William Lyon Mackenzie King: He was speaking as a member of parliament.


Henry Herbert Stevens: Well, on that occasion he was not speaking very wisely as a member of parliament.
Then the hon. gentleman, in order to cap the whole business, not only condemned the government for all these proposed taxes and its efforts in financing the affairs of this country, but he said: Let me remind the minister that the people of the United States only a few weeks ago turned the key in every bank from the forty-ninth parallel to the gulf of Mexico and from San Francisco to New York. What did he mean by that? Was he advising the government to turn the keys in the banks of Canada? He did not explain the statement, but he said: Here is courage for you; those people had the courage of their convictions, and he invited the government to exercise courage in this country. No other deduction can be made from the utterance, or its presence in his speech at all is inexcusable, than that he suggested that we should take our courage in. our hands and turn the keys in the doors of the banks of Canada. Let me say to the hon. gentleman and his associates that no more calamitous thing has happened to the United States than the turning of the keys in the doors of the banks of that great country. As yet only a small number of those banks is open; many cities the size of Ottawa have only one bank operating.


William Daum Euler: They are nearly all open.


Henry Herbert Stevens: No, they are not; the hon. member is entirely wrong. State banks are not open at all; many of the national banks are not open and many of the federal banks are not open. But the point of the matter is this: not only was it calamitous for the interests of that country, but it has precipitated there a financial crisis which has' already drawn into the maelstrom of ruin several of the great insurance companies. That brings me to the point referred to last night by the hon. member for Winnipeg North Centre (Mr. Woodsworth) who said: Why is this government interested in insurance companies? Why does the goverment, he asks, safeguard insurance companies when the people of this country are out of work? I wish the hon. member were in his seat because I should
fMr. Stuvens-l
like to talk perhaps more plainly than I care to in his absence. But I would say this, that that is the utterance of a demagogue. It is a suggestion, and I put this to my hon. friends in the corner angularly opposite, that the actions taken by the government in the last year or two years, have been for the purpose of saving rich companies, and that on the other hand we are disregarding the welfare of the people.
Now what are the facts? In these insurance companies there are seven billions of dollars of insurance in force in Canada, including life insurance, health insurance, accident insurance, and all other classes of insurance, and included in the ambit of that enormous sum are hundreds of thousands, if not over a million, people insured. It represents the savings of hundreds of thousands of our people. It is their hope for the future should the head of the family be disabled or die, as the case may be. It is the economic lifeblood, shall I say, of hundreds of thousands of people in this country, and yet some of my hon. friends, the hon. member for Winnipeg North Centre and the hon. member for Southeast Grey (Miss Macphail) and some others advocate the disregard of our obligations in regard to bond interest and in regard to the payment of bonds, provincial and municipal, and yet, Mr. Speaker, those are the assets behind this seven billions of dollars of insurance in force in this country. This is the class of securities into which is poured the millions of dollars of premiums of the people of this country. They have twitted the Prime Minister over constantly talking about the credit of Canada, but if the Prime Minister was to listen to some of the arguments put to him in the past year in this house and disregard the credit of Canada it would mean the ruination, not simply of half a dozen or a dozen insurance companies, but of countless hundreds of thousands of poor people in this country whose savings are in the form of insurance premiums. These are things that it is well to keep in mind. If the credit of this country should collapse it would largely destroy the savings of these people to whom I have referred.
My hon. friend the member for Macleod (Mr. Coote) had a few words to say the other night, and I wish to say to him that with much that he has to say I do not find particular fault, but his chief demand was for a central bank. He . wants a central bank, and he described that as a national bank owned one hundred per cent by the state. That is what he wants-a central bank owned by the state. What is to be the policy of such a bank? He says that its policy must be laid down in black and white. What is it? The

The Budget-Mr. Stevens
policy of such a bank would be that it should maintain price levels, he says. Let us look at that for a moment.
It sounds very simple and very attractive. My hon. friend says he wants a central bank owned by the state to maintain price levels. If one does not analyze the proposal very closely, there is an attraction about it because one of the things we want to achieve above everything else is the restoration of price levels for commodities in this country and throughout the world; there is no question about that. We want the staple commodities of the world to rise in price. I pause here to interject that there are really only two main schools of thought on the economic situation. One holds that the process of deflation must be continued until interest, wages, service charges, and rents are brought down to the low level of any and all the staple commodities. On the other hand, there are those, and I think in this school the government and those on this side of the house largely stand, who hope that there will be found, and that we can find, a method for restoring price levels and obviating the necessity of dragging down all these other things to the lowest possible level. On the one hand you have complete liquidation; on the other hand you have a restoration of credit, and when I say credit I do not mean some nebulous thing that is handed out without anything behind it. Credit is a tangible thing. It exists in tw'o or three things-commodities, land, real estate and character, because character is very often used as credit. But there must be something tangible before any bank or institution will extend what is commonly called credit. Credit is not something that is available without anything behind it. So I say there are those two schools of thought.
My hon. friend from Macleod says, knowing that the proposal is attractive and appeals to the people, that the price levels should be raised. He says let us have a central bank. But it does not follow that a central bank would raise price levels. I have given the matter a tremendous amount of thought, so far as I am capable of doing it, and I confess that I do not see that a central bank would or could affect price levels to any extent. I do not. I say this-I said it in 1923 when the Bank Act was up for revision, I have said it many times since, and I say it again now- that we now have machinery under the Finance Act almost if not quite as flexible and effective as that of a central bank. But I do wish to point out that a central bank cannot fix prices; there is no doubt about
that. Nor can it maintain price levels, because price levels are the result of world conditions.
Idealistic theories are pleasant things to trifle and play with, but some of us are more anxious to find out how to apply those theories. What we are anxious about is to find the mechanics-shall I say?-of many of these proposals.
I have spoken longer, Mr. Speaker, than I intended but I should like, if I might be permitted, to turn away for a moment from the realm of controversy. The opposition in a debate of this kind have certain duties to perform. They criticize the government, and I have no quarrel with them. I have duties to perform as well, and my duty as far as I am able is to present views representing a defence of the government's course and a justification for the action it has taken. Obviously our views will clash from time to time, but may I crave the indulgence of the house for a few moments while I say a few words of a non-controversial character?
I have attempted as far as I was able to defend the government this afternoon. I feel that in doing so I have been doing but justice to my colleagues, many of whom are carrying loads which I think few in this house realize. For a moment I refer to the Prime Minister, who is perhaps the pivotal point of a great deal of abuse from various parts of the country because he is not able to come forward with complete solutions not only for public problems but for problems almost of a private character. There seems to be a tendency these days to lean upon governments, and to expect from them a solution of even local or private problems. The Prime Minister is condemned for trying to maintain the country's credit. He is attacked for this and for that, and yet from day to day, without any sparing of his time or his energy, what he is seeking to do is to guide this country through perhaps one of the most perplexing times in our history, and doing it I believe from one motive only, and that is a high sense of public duty.
My colleague the Minister of Finance (Mr. Rhodes), and I know this from my contacts with him, is daily confronted with demands from provinces and from every part of the country for financial assistance to overcome difficulties which are entirely foreign to the duty and the constituted power of this government or of this parliament.
My hon. friend the Minister of Railways (Mr. Manion), to whom I want to pay a tribute in his absence, attacked the railway problem in this country two and a half or

The Budget-Mr. Motherwell
three years ago in a most intelligent and vigorous way, and it is very largely as a result of his efforts that the improvements which have taken place in regard to expenditures have been achieved.
Then we have the Minister of Labour (Mr. Gordon). Who would envy him his task in meeting the problem of unemployment, a task which it is impossible for one properly to describe. I say the government have endeavoured, as far as we can from day to day, to meet the problems of the day as they present themselves to us.
May I say this: Canada is a democracy, is still a democracy and I hope will remain a democracy. But the success of a democracy depends upon the extent to which each individual unit which goes to make up that democracy discharges his or her obligation as a citizen of the country. I fear that in these days there is a tendency on the part of many citizens to lean too much on governments, whether they be municipal, provincial or federal, and to look for help and assistance where very often they could fend for themselves. Unless we can imbue the mass of the people with a sense of responsibility, then there is not much hope for this Canadian democracy.
But, sir, I have hope for it. I have confidence in it. I believe our Canadian democracy will overcome the difficulties with which we are confronted. Not perhaps to-day or to-morrow but as the days go by and as the people once more become fully seized of their duty and their sense of responsibility, these difficulties will be overcome. All we can do as a government is to confront our task each day, and to endeavour to the best of our ability to discharge our duties. All we can ask of hon. members opposite, all we can ask of provincial governments and others holding public positions in Canada is that they shall attempt to do the same. We do say to hon. members opposite -not that we are asking any consideration for our actions-that we do feel that there are tasks in which all of us can join in an effort to solve the problems with which Canada is confronted.


Hon. W. R. MOTHERWELL (Melville):: Mr. Speaker, let me at the outset congratulate the Minister of Finance (Mr. Rhodes) upon the very acceptable manner-


Some hon. MEMBERS:: Louder.


William Richard Motherwell: If the house will
just keep quiet I think I can get up steam soon enough. Mr. Speaker, I should like to begin over again, but as what I have said would come out of my forty minutes I do

not think I shall. However, before the interruption I was congratulating the Minister of Finance upon the very acceptable manner in which he performed his somewhat difficult duty. We realize he had not a very rosy picture to present, but he did it well enough. Then, the hon. member for SheUburne-Yar-mouth (Mr. Ralston) certainly displayed an ability to criticize the shortcomings of the budget. He levelled a devastating and withering criticism against the government, which the hon. member who has just taken his seat has not been able to break down.
My good friend the Minister of Trade and Commerce (Mr. Stevens) is recognized as one of the best parliamentary debaters, and for that reason he need not apologize for his inability to do anything. We never dreamed of casting any reflection upon his ability. When the whip of the Liberal party asked concerning the book from which he was reading, we were not casting any reflection.
I shall spend only a very few moments discussing some of the matters with which he has dealt. I shall not cover all of them because were I to do so my whole forty minutes would have expired. He indicated, first, that he hoped we were all wiser than we were last year at this time. There is not much evidence of increased wisdom as a result of experience either in the wide-world without or in the government of Canada, within. Certainly, that is so if we are to judge the government by its present policies. My good friend compares tiwo years of trade-both of them Tory years. That is not a very effective comparison. Because one Tory year happens to be better or worse than another Tory year does not assist us in arriving at any intelligent conclusion. In order to make a somewhat better showing my good friend, the minister, adopts a new system of comparison altogether. Apparently, now, when values are down, comparison of values is not the right way. How does the business man value his returns at the end of the year? How does the farmer value his returns? Does he figure out the number of carloads of wheat he grows, or the number of dollars he handles? We heard so much of that kind of comparison last year that we are simply fed up on it. There is not one word by Tory writers about the small amount we are getting in return. In order to make it look better he transfers our trade figures from values to volume, and in that transfer shows evidence that, on that basis, we import more castor oil, more bologna and more nuts, than formerly. Then he complains that as the values are low, inevitably our revenues must be low.

The Budget-Mr. Motherwell
He is trying to do the impossible when he attempts to convince this house and country that prohibitive duties produce revenue. At every convenient opportunity the government used the services of the Minister of National Revenue to jack up the pound to the necessary level for the purpose of making a higher price for duty purposes. They pegged the pound, increased values for duty purposes and then complain that they had not enough revenue or had not enough opportunities to impose higher duties and then wonder why our revenues are down. Their memories are very short indeed, Mr. Speaker. I would not have much trouble with even all the lesser points raised by the hon. member who has just resumed his seat as his futile efforts were quite laboured, but I shall have to turn to a discussion of other matters.
I shall speak first about the five or six good provisions in the budget. There are not many such, but there are a few. If I may, I shall also make one or two recommendations. Although my good friend does not speak in complimentary terms of our former recommendations, at all events I shall take my chance. In my view the appointment of a commission to investigate the monetary situation is good business. I have always taken the ground that the public have no right to expect any government to be a body of experts capable of dealing with every question arising. I am willing to concede all due credit to the minister, but I am suggesting that surely the government must have realized years ago that they did not know much about practical monetary problems and should have appointed this monetary commission two years ago. They may have had the theoretical knowledge, but they did not apparently know how to apply it. Yesterday the Prime Minister delivered a stirring address on currency, exchange, and so on, but how much of what he said does he carry out in the government of Canada, except what he should not, such as making the Canadian dollar hug the American dollar rather than the British pound.
Then there is the permanent elimination of the everlasting doubt about the duty on repairs to farm implements which is all to the good. The government jiggled that around, through the same Minister of National Revenue, to a point where the duty was as high as 25 per cent. However, it is now down to the old Liberal level of six per cent. If the repairs to an implement are only charged six per cent, what about the implement itself being reduced that low
tariff rate? Some day this government perhaps will attain sanity and not be taxing the farmers to the hilt on the implements of production and losing much needed revenue at the same time. I venture that hope, but I am afraid their term of office will not be long enough to get around to it.
Then we have certain bearer bonds being taxed very properly under this budget. I am surprised that was not done long ago. And Canadian bonds bearing interest that is payable in New York funds has also been made to contribute five per cent to the treasury which is also looking for needed revenue where it can be found. You cannot take blood out of a stone or take the breeks off a Hielan'man. Then again we have in this budget the reduction of the pound from 14.40 to $4.25 for dumping duty purposes. I cannot enumerate all the little tariff changes. We will do that in the resolution stage. There are four or five little items concerning which I will say the government did fairly well, but they are eclipsed by the bad things in this budget As to the very thing that is apparently intended to be the best, the stabilization fund, when I come to that there will be a question mark, how it is going to work out, and why it was not extended to all the exports to Britain. We have no opportunity at this stage of discussing as we would like to this question of adjusting adverse exchange with the old country by means of a stabilization fund, or of bringing witnesses to find out who inspired this happy thought. If it came from the regular source, the advisers of the government, why did they not think of it long years ago instead of waiting until farmers and others were bled white by the adverse exchange, and at this late moment dealing with it through the questionable medium of the exporter. I think we should have the matter referred to the committee on agriculture and colonization, where we can call witnesses and find out why the list of articles is so circumscribed, and why the provisions are not extended to other commodities of much greater national importance than honey or maple products, although they are both delightful foods. Then if it cannot be shown before the committee that the government is justified in circumscribing the number of articles that come within the intended benefits of this fund, it should apply to all our exportable commodities. Although it is the same pound, the same reduced pound, that is used in every case, and consequently all suffer adverse exchange alike, all are not treated alike in having it adjusted. Of course it goes without saying that we will support any reduced duties,

The Budget-Mr. Motherwell
-I do not think they are very important or they would have been read. But the bad things are so overwhelmingly greater than the goods things that when the vote comes we will certainly know which way to vote.
In order to get the proper setting for this blundering budget I will have to take the house back for a year or two. It is admitted that the government has made many heroic if futile attempts to aid agriculture. They have been both persistent and heroic but in large measure quite unsuccessful. I am going to recite some of these major blunders that have been made from time to time. I am not going to commend the government because they merely made the attempt to assist agriculture; the attempt to be any good must be successful and most of these heroics were foredoomed to failure from the very outset.
In the budget of June, 1931, the Prime Minister outlined some assistance that was going to be given to the wheat farmers by the railways absorbing five cents per bushel of the freight charges on Canadian wheat. That proposal was temporarily abandoned in favour of payment of this five-cent bonus to the exporter on all exported wheat. For two solid months less two days this Liberal opposition from early morning until dewy eve asked that this sum be given direct to the farmer rather than through the questionable medium of the exporter. It took us that length of time to convert, the government to our view of the little likelihood of it never finding its way back to the producer, but finally the Prime Minister became converted and adopted our suggestion. Yet in the face of that conversion he now establishes a new fund all of which goes through the same exporter avenue that they themselves virtually condemned and departed from two years ago. And they ask us now to throw up our sweaty caps and cheer for an institution of that kind-Last year's caps too, by the way, because we cannot afford a new one this year. But even after adopting the giving the five-oents bonus direct to the farmer, the government gave it to the farmer who needs it least, a Christmas box sometimes running up to $1,000 per grower and aggregating over $12,000,000, and then open a loan and collection department to deal with the poor fellow who had no crop; an order given and a note signed before they get enough to put in thedr eye and see any the worse for it. That is the kind of treatment the no-crop or little-crop farmers of Saskatchewan get, with respect to which the Prime Minister spoke with such eloquence on the first of July, 1931. A national calamity had struck western Canada, he declared. We were enthralled by his eloquence

and humanity and what he was going to do for this calamity-stricken portion of Saskatchewan. But the Prime Minister is frequently great oh profession and light on performance. He gave generously, to those who needed it least, and those who needed it most he treated in the way I have described and absolutely refused to distribute any bonus on an acreage basis so that it would reach those who had the misfortune to have no crop.
So we condemn the government on these counts; first, that the payment was first to be through the exporter; second, that when they did adopt the proper method they gave the money to those who needed it least and withheld it from those who needed it most, but gave them a loan and then within six months insisted on having half of it paid, although it was only contracted the previous six months. To-day those farmers, or many of them, are stripped barer than the day they were born because they were pressed to pay through the Saskatchewan relief commission on behalf of this federal government those loans and seed grain advances that they needed themselves to live on through this hard winter. The next blunder was the Stamp commission. I am in favour of commissions, but there are commissions and commissions. This was a good commission too, but before the report got through this house word went out that there was an appendix that should be taken out. Instead of using the proper surgical appliances to do it, instead of having a clever surgical operation, they asked us to tear it out ruthlessly with our bare fists. And it was torn out. Mine is in yet, because I want it to use before my audiences-I mean the appendix in my copy of the report, not in myself. Then we had the inquiry before the agriculture committee with respect to Garnet wheat. I do not know what possessed the government to take the attitude they did against one of the best wheats we ever developed. Our export trade shows to-day, and our customers on the other side say that there never was a time in the history of Canada when our wheat was more acceptable than it is at this moment. Yet we have 35,000,000 bushels of Garnet wheat, most of which goes to the Pacific as two Northern and No. 2 Pacific is one of the best selling wheats both in Europe and Great Britain to-day. However, I can congratulate my hon. friend the Minister of Trade and Commerce upon having seemingly receded from that untenable position, and having regard to that I will not press the point further.
Then as to the world grain conference and exhibition. The Minister of Agriculture (Mr. Weir) appeared rather to disadvantage in con-

The Budget-Mr. Motherwell
nection with this matter, but I do not blame him. No doubt he was speaking for the Minister of Finance; that was easy to see, but in spite of their fumbling and backing and filling with this great enterprise I believe it is yet going to be one of the greatest events of its kind ever staged in the world.
Now we come to the Mr. John I. McFarland episode. IVe have been lectured on more than one occasion by the Minister of Trade and Commerce as to the proprieties we should observe in the house; we have been told that we should have more consideration and less curiosity as to Mr. McFarland's activities on the grain exchange. Well, Mr. Speaker, when the government appoints a gentleman who has the backing of the banks and of this dominion I think we have a right to know what is being done. Did you ever hear of the federal farm board in the United States doing business by the surreptitious, hole in the corner, star chamber methods which have been adopted by this government with regard to this wheat transaction originally taken over on behalf of the wheat Producers, Limited, the pool? In the United States, where a federal board was set up, everything was done in the light of day; everyone knew what was going on and everyone was glad when it was all over. The speculative wheat activities of the American farm board and the stabilization committees appointed under it, contributed I believe very materially to the defeat of the Hoover government. But we have been censured on more than one occasion because we wanted to know a little about what was being done by this autocratic government under the unemployment relief measure which was financed with money raised by Canadian taxpayers and we surely should know. Last April, almost a year ago, one or two lion, members from the west suspected for over a year and were pretty sure that Mr. McFarland was in the wheat future business with a line of credit and government guarantees, yet it was not until a year had elapsed that the hon. member for Willow Bunch (Mr. Donnelly), the hon. member for South Battleford (Mr. Vallance) and the hon. member for Weyburn (Mr. Young) made certain inquiries as to just how the matter stood. I have not time to quote many of these inquiries, but I will read the question asked by the hon. member for Wey-burn and the reply given by the Minister of Trade and Commerce, and I need only refer to the admission later made by the Prime Minister (Mr. Bennett). I quote from page 2084 of Hansard for last year:
Mr. Young: Mr. Chairman, I have not the reference before me, but speaking from memory, and of course subject to correction, 53719-220
may I say that in the Financial Post of last week the statement appeared that when Mr. McFarland undertook to sell the 1930-31 crop he at the same time bought futures against it, and that as a result of his activities the government to-day is holding millions of bushels of future wheat which it cannot get rid of, except iat a loss, until the price goes up.
This was not a direct statement; it was simply an interrogation in order that the Minister of Trade and Commerce might say what he thought of that rumour. Here is what he said:
Mr. Stevens: I do not know of a bushel of wheat held by the government, either directly or indirectly.
That was a year ago, yet last November the Prime Minister admitted from his place in this house that the government through Mr. McFarland had been in the wheat business for more than two years. I do not know how to reconcile these two diametrically opposite statements, nor am I going to attempt to do so; these two hon. gentlemen, the Prime Minister and the Minister of Trade and Commerce can settle it between themselves. They cannot both be true, however, and we believe we know which is the correct statement and that it is the Prime Minister's. We know that the government is not only in the wheat business to the extent of the wheat taken from the pool but that they have bought practically the same amount of wheat in order to stabilize the market and protect their own investment. Why conceal it longer? These facts are known. I was disposed to be lenient with the Minister of Trade and Commerce when I dealt with this question last fall; I took the ground that possibly he thought it better not to admit publicly what had been done for state reasons. In other words it was a little diplomatic tarrydiddler rather than a straight out and out whopper. Now we want to know when they are telling whoppers and when they are telling tarrydiddilers. From now on we will not know, so I think it would be well if the two ministers should settle it between them, so that we may know which is telling the facts and which the fancies.
What has been the reason for this secrecy? The government will get nowhere by trying to do a wheat future business in a backdoor fashion. No wonder wheat went down. People in other countries, sensing what was going on in Winnipeg, threw their wheat on that market and jammed down the price. That is why the wheat-marketing policy of the government only succeeded in driving the little fellow off the market and forcing wheat to the lowest point it has reached in three hundred years. Great is Diana of the

The Budget-Mr. Motherwell

Ephesians; great are our political Dianas over there in the matter of holding up the price of wheat, not only in Canada but evidently all over the world. If this later stabilization proposition in this budget works out in the same way the minister will wish he had never introduced the proposal as the government is now heartsick of their wheat stunt. However, I will come to that in a moment. I will hurry along with this recital; it is not very pleasant but it is necessary in order to get the setting for the last step in the present budget in this ghastly array of blunders.
The next major blunder I have is the Ottawa economic conference. I think we heard of that in the early part of this session; there was some discussion of the so-called but delusive six per cent preference on wheat and the preferences on butter, apples, and other commodities. Why are these things passed up and disregarded, and excluded from the intended benefits of this stabilization fund? Is it because the government thinks some good has been done by Mr. McFarland, who tried to hold up the market but failed? Is it because they think the preference of six cents has put any lining in our pockets? They have not said so but they must think so or they would not dare pass by such important commodities as lumber, apples and all cereals. That is one reason why I want this matter referred to the agricultural committee. I think this is more important than the piffling milk investigation in which we are now engaged. We are getting a good deal of interesting information but we have no power to act, in my estimation; this is largely if not entirely a municipal matter, and in dealing with it federally we are just meddling in other people's business. So I hope the agricultural committee will try to redeem itself by considering a prdposition like the proposed stabilization fund that is worthy of the ability that can be found among its members.
We had a number of other proposals to assist agriculture among them the Serkau proposition, that famous 'cattle deal with Russia. The government tried to put the opposition in the position of being in favour of Mr. Serkau's proposal. Certainly we were in favour of trying to sell cattle or anything else to any country under the sun that would pay proper prices. Of course many of Serkau's proposals were absurd, though I suppose they were made as feelers, just as dickerers often make propositions to feel out the prospective customer. I think the Minister of Agriculture came out at the big end of the horn; so far as he was concerned as he showed that he wanted to make a bargain and trade our 
cattle for Russian oil and other products, and for that he is to be commended. But his lord and master came along from mid ocean on his way home and snuffed out that proposition like a candle, after which the minister had to get into line. Why is it that we cannot deal or barter with Russia? When the Liberal government was in power we were jeered at for selling five or six thousand horses which were running about our prairies eating up good grass, and which had no particular economic value to us. That was a much more difficult time to deal with Russia. Why cannot hon. gentlemen opposite with all their financial ability do the same? So far they have failed to do so when our western and eastern farmers have large herds of cattle, both dairy and beef, ready to be sold. Russia is hungry for these cattle but the government will not permit the two parties to get together to make a bargain. Is it any wonder the government is going down in public estimation? Every day the sun rises and sets this government is going lower in the estimation of a vast body of the people of this country. It has got to such a point that the electors are rearin' to go and get at the ballot boxes. Nothing in the world will save their political necks, not even their confreres in the Cooperative Commonwealth Federation corner to my left.
The estimates also for agriculture, the first industry in Canada, were slaughtered this session in a manner which seemed to give some hon. members opposite a great deal of delight. The preceding government had pulled them up-it took some pulling-to where they totalled ten or eleven million dollars, but down they went with a slam to three and a quarter millions less. Public sentiment was so enraged that the government restored about three quarters of a million, leaving a net loss of two and a half million. This vote has been banged down again this year by another $400,000 drop. We are told further that $14,000,000 is going to be cut off all the estimates in order to make the budget not balance next year and doubtless this will mean a further pro rata cut for agriculture.
Having got over that phase, we come now to this precious budget itself. This country has seen a succession of blunders which cannot be paralleled in any other country having responsible government. As I have often pointed out, the Minister of Agriculture has no chance to make good. If he was the angel Gabriel and had all the agricultural knowledge in the world, without more support than he is getting from his colleagues he could not make

The Budget-Mr. Motherwell
a showing for agriculture in Canada. I do not mean to say that he has no shortcomings himself, but I make that statement in justice to him.
I come now to the preferred products in the matter of exchange adjustments. I do not want anyone to think that I have anything against the tiny bee. I did a whole lot of work in my time to develop the bee industry. There is no more healthful and profitable way in which anyone can take the necessary saccharine requirements than through honey. This is more especially so since the price of sugar has been raised so greatly by this budget.
The next preferred item to which I shall refer is maple products. I think hon. members from Quebec will agree that the last government was the first one to give an official status to these products. About the last thing I had the privilege of doing when I was a minister in times gone by was to put these products upon an official graded basis. This action was met with the jeers of hon. gentlemen opposite. This statement will be confirmed by a reference to Hansard of 1929. The present government now seems to consider that these products should be put in the preferred list and others much more important left off. I intend to show the inconsistencies and the unaccountable way in which this government selected the list of thirteen preferred commodities. According to the official statistics, the average total export of honey to Great Britain during the last two years was about $1SO,000 and the average total export of maple products was $16,000. It must not *be forgotten that these items are exported elsewhere than to Great Britain. Yet wheat and lumber, the exports of which are valued in millions and tens of millions, do not appear in this list. How are we to account for that? Our good friends on the other side have been scratching their heads and bringing themselves near to a nervous breakdown in an effort to find something agriculturally which will be acceptable to the people of this country and which will "show us the way out." Apparently someone came along to the government at the last moment with the bright idea of this stabilization fund. Such a scheme is not new. I have before me an article by Doctor C. J. Robertson of the international institute at Rome which appeared in Saturday Night, of March 25. This article shows that all the ventures including this stabilization fund scheme have been tried before and in other countries but have failed in their purpose. I have not the time to read this article, but that is its purport.
53719-mi
Why is butter excluded from the intended benefits of this stabilization scheme? I asked this question of the Prime Minister but all the answer I received was that we were not upon an export basis and our butter was selling at a higher price than it was in Great Britain. He stated that as none was being exported, there would be no exchange charges to pay. Does he mean that this government intends to keep our butter upon a domestic basis all summer? Is that the hopeless program which the government has for the dairying industry? I do not think there have been more than three and at the most no more than five years during the first half century when we were not upon an export basis in the summer. If we are to attach any value to the Prime Minister's excuse- that is all it was-as to why butter was not included in this preferred list, it must be that he does not expect that we will be exporting butter this coming year. That is a damaging admission; that is the way this government is going to develop dairying.
There are some novices in this country who believe that we should produce only enough butter and other commodities to meet the needs of our own country. Let us carry that contention to its logical conclusion. It is contended by some that we should produce only enough butter for our own needs and never go upon the export market, because of the fact that when we do we have to take about six cents per pound less than the present prices. Of course a few boatloads of butter would be permitted to come in from New Zealand in order to make sure of having sufficient. If that is sound reasoning why not apply the same kind of foolish reasoning to eggs, to bacon, to wheat, to lumber, to apples, and to everything else that we produce? If we grew just enough wheat for ourselves thenv we would not be bothered by this pestiferous-exchange question. That would not be a very ambitious program for a young producing country like Canada, but the statement of the Prime Minister leaves no other conclusion to be drawn. Last year we went upon the export butter market about July 1 and I cannot understand why provision has not been made for similar action this year, the same as it was made m connection with cheese. That is my question and there is no answer. I will sit down and take the time out of my forty minutes if any hon. gentleman opposite has any reasonable answer to make. No, they have not an answer, because there is none.
347S

The Budget-Mr. Motherwell


Mr. BOYES:: Will the hon. member permit a question?


William Richard Motherwell: Yes.


Frank Boyes: Does the hon. member not know that cheese produced in Canada and shipped to the old country has a premium over cheese produced in any other country and that it will be better that the bonus be allowed on cheese so that we may produce more and in that way have our butter kept in our domestic trade?


William Richard Motherwell: That is splendid; it is an heroic attempt to do what none of the rest of the government benchers would dare to attempt, but my hon. friend has failed in it. I know our cheese has a premium of two cents and I know the reason. It has had that ever since the Liberal government adopted the grading system for it.


Some hon. MEMBERS:: Oh, oh!


William Richard Motherwell: Yes, that is the situation. Since 1928, in fact, since 1927, after the grading system was adopted three or four years, Canadian cheese had a premium in the British market over any cheese that came from other countries. What is more, from that time on the buyers in Great Britain would buy our cheese on the certificate, without even seeing the cheese, the same as was done with our wheat. I am not deriding my young friend; he has Tory nostrums from his older brothers. If what I say is correct-and it is-[DOT] is not cheese the one best able to carry the load? It has a premium now of two cents a pound over any other cheese.


James Malcolm: The premium is being
bonused.


Frank Boyes: May I ask a question?


William Richard Motherwell: No, I have given
the hon. member one chance and he has failed.
I am not complaining about cheese being included; I am complaining about butter being left out, and according to my hon. friend's statement, butter is the weaker sister of the two and therefore should not be penalized.


Frank Boyes: If butter were being shipped to the old country, what price would it command?


James Malcolm: The hon. member should make his own speech.


William Richard Motherwell: Less of course and that is the reason it should be in the preferred list. So much for those two articles. We have 
canned vegetables, canned fruits; tobacco, meats, animals. I wonder how long it will take at this rate to include all the exportable commodities we export.


Mr. MULLINS:: Let me tell the hon.
member-


William Richard Motherwell: If I had time enough I would let my hon. friends talk until midnight, because the more they talk, the more they put their foot in it.


Pierre Édouard Blondin: An hon. member may, by resuming his seat, allow an interruption, but no one has any right to interrupt him without his permission.


William Richard Motherwell: I do not know
where I was, with all these interruptions. Oh yes; I think our tariff schedules will show that we have nearly 1,300 commodities capable of being exported, so at the rate of thirteen commodities a year it would take just one hundred years to reach the full fruition of the policy of this government in respect to this stabilization fund. If I have exaggerated the number of these commodities by putting them at 1,300, let us put them at one-half of that, or 650. In that case it would take fifty years to consummate that sort of progressive program to help agriculture in Canada. If that is too much, let us cut it in half again and it would take twenty-five years to cover the preferred list. But twenty-five years is too long to wait for this bewildered government to institute agricultural reform, that is not the way in which things are being done on the other side of the line. The Prime Minister is casting sheep's-eyes over there now himself in connection with the possible and, in fact, the sure advantage of reciprocity, so he should not object very much to my referring to it.


Mr. G. B. NICHOLSON (East Algoma):: Mr. Speaker, I know the hon. member (Mr. Motherwell) who has just taken his seat, will pardon me if I do not make any effort to follow him in the interesting remarks he has just delivered to the house.
I wish at the outset to congratulate the Minister of Finance (Mr. Rhodes) on the very able manner in which he presented his budget and the courageous budget that he did present under the most difficult conditions that have ever faced any minister of finance in this country.
I do not intend to follow anything that has been said on the budget. I do not purpose dealing materially with the budget as such;

The Budget-Mr. Nicholson
I desire merely to present one aspect of what I conceive to be the financial and economic condition with which this country is faced and to suggest a line which I think we might follow in an effort to get ourselves and the world out of the difficulties in which we now find ourselves. I wish to refer to only one matter that has been spoken of, and that was by the hon. member for Shelburne-Yarmouth (Mr. Ralston) when he ridiculed the Minister of Finance, who, after stating clearly and definitely that it was the business of each country to do everything it could to maintain its own position, said that nevertheless the situation was now worldwide and not restricted to any individual country. I would rather take the position of the hon. member for North Bruce, the ex-Minister of Trade and Commerce (Mr. Malcolm), when he made this statement in the house a short time ago:
In 1933, we are facing difficulties which have arisen, not through any action of hon. gentlemen at present, not through the action of the people of Canada but through the breakdown of the economic system of the world.
In its essential elements the crisis with which Canada in common with the rest of the world is faced is international, and it is only by international action that a remedy can be found. It is only by international action, if such may become possible, that civilization as we understand it is going to be saved. We are facing a problem, the climax of the period from 1914 to 1930, that can be solved only by sane, international action along sound economic lines. Mr. Ramsay MacDonald, speaking a short time ago at a meeting in London, made the statement that what was necessary in order to start the nations back towards recovery was a rise in world commodity prices, the freeing of world trade and the settlement of war debts and reparations, intimating by the third item that the problem was financial. I am not going to set my opinion against that of Mr. Ramsay MacDonald, but it is my opinion that before commodity prices can rise, before trade can be released, the financial problem must be dealt with. It seems to me that it would be impossible to suggest anything else when we compare the position the world is in to-day with that just prior to the war. The six nations now included in war debts and reparations-the United States, France, the United Kingdom, Germany, Italy and Belgium-expended during the war almost 885,000,000,000 in destroying the things which mankind had been creating for centuries previous to that time. Then, following the war, particularly from 1920 to 1929, the peoples of the world in all parts of it engaged in an orgy of extravagance unparalleled in
history, and the same six nations added to their national and international burdens an additional 880,000,000,000, making a total of almost $165,000,000,000 added to their national and international obligations without taking into consideration their obligations, municipal, provincial, state and so forth, all over the world. To expect that that could happen without a situation ensuing such as that with which we are now faced, to my mind is to expect the impossible. It would be like saying to a man wTho has laboured all his life on the best farm you can find in this country: "You gather up all your machinery, all your furniture, all the equipment and everything you have accumulated during your fife, and set fire to it, and then expect you are going to be just as well off as you were before." The thing to me is so utterly impossible that it is amazing for anyone to expect it.
Many remedies have been suggested. I shall touch on only one or two, and that very briefly. It has been suggested that we can get out of this difficulty by an inflation of currency, by something in the nature of a managed currency, by internal and external currency. But each of these remedies in my view is so honeycombed with difficulties and is so unsound that I do not intend to dwell on them. I shall deal with only one for a moment or two, and that is inflation.
What is it that has created our difficulties to-day? It is that we are living in the greatest period of inflation that the world has ever seen. The disease is inflation. In that connection I might quote a word or two which seems to me to touch the point very accurately. It is from the editor of The Annalist:
How much is enough? That is the question which the inflationists have never been able to>
answer and never will be. Once started on its. insane course, inflation becomes a wild monster,, powerful enough to wreck the best monetary-system ever devised by man, driving all kinds of business enterprise to destruction and business men to despair.
That has been the result of the inflation of the last nineteen years, from 1914 until to-day, and the inflation is just a photograph of the world's debts which I indicated a moment ago, obligations which it is impossible to meet unless some entirely niew plan is evolved, something that we have not yet seen put into effect in any country that I know of.
But there is another way. Sir Basil Blackett, in one of the Halley Stewart lectures, made this statement, that every period of deflation followed a corresponding period of inflation. The usual method by which the world has got itself out of these periods of inflation has been by the hard toil of individual men and

The Budget-Mr. Nicholson
women all over the world working back to the place from which they had slipped because of the inflation. I submit that the higher the inflation the deeper the deflation will carry you unless some means can be found by which it can be checked, and that, as my hon. friend the Minister of Trade and Commerce (Mr. Stevens) said in his speech this afternoon, is what the countries of the world are trying to find, namely, some way by which this downward slide of deflation can be checked and mankind can get back to a stable basis without the tortuous toil and suffering that will inevitably follow if we go to the full depths of deflation.


Mr. SPEAKMAN:: Exactly; I agree.


George Brecken Nicholson: Yes, we are gradually deflating, but the inflation of credit, the inflation of debts, individual, national, international, of every character, has been of such magnitude that if the world has got to work itself out by the old fashioned plan through its own efforts, then I shudder for future generations perhaps yet unborn. But is that necessary? I submit this-and. I do it with some humility, because I am not the author, and I say so frankly- that I have on my desk here a book written by a Canadian business man presenting a plan and a formula for putting that plan into effect, some will say that because he ds not a world-known author or economist, his plan essentially cannot have any value. Nevertheless I am going to put it to the house as nearly as I can in order that it may be considered, and perhaps the government may think it wise to put it into the hands of expert financiers and economists, with the aim of presenting it to the world economic conference which we hope is to meet early this summer.	_
May I say in passing, that notwithstanding all the slurs and gibes that have been thrown at economic conferences, the League of Nations and other international gatherings of the world's statesmen in an honest effort to get us through our present difficulties, I do not know where the world might have landed but for their efforts. They have not yet been finally successful, but just in the last ten days an effort has been put forward which is showing some signs at least of preventing another outbreak of war, which perhaps would be the last war.
The plan I have to submit to the house is the Revaluation of Gold. It is contained in a book written by Peter L. Robertson, and I want to give Mr. Robertson the whole credit for everything that I have been able to gather in this regard. His plan is not the revaluation of gold such as was suggested, for
IMr. Nicholson.]
instance, by Professor Stephen Leacock, the mere adding of thirty per cent or some other percentage to the currency value of gold. His plan is a revaluation and a redistribution of the world's monetary gold on a basis which in my opinion will provide the means whereby there will be some hope of the world getting out of its difficulties. In this connection I put the question of war debts and reparations and international long term and short term debts ahead of any other problem which the world has to face before it can attempt to adjust international tariffs, if you will, or provide some means for a central bank, if you will. So long as that nightmare of war debts and reparations hangs over the European world it seems to me to be utterly hopeless to attempt to get those people to sit around a table and try to work out other problems with which, to say the least, they are not relatively concerned. Let me give only one instance. I believe that the world's war debts and reparations, the national and international long term and short term debts, can in reality all be placed at the door of one country, Germany. In toto they now amount, scaled down as they have been through the Dawes plan and the Young plan, to a total of $31,000,000,000, a sum which anyone who looks at the pages of history must realize is an impossible burden to place upon the German people. Until that is removed, stability in Europe cannot be hoped for. The reason I pin my faith on the Robertson plan, if I may so term it, is because it does provide for a way in which Germany can be relieved of this impossible obligation.
In order that I may be accurate I shall quote what Robertson states:
The object to be aimed at by the revaluation and redistribution of gold-


Alfred Speakman: Did I understand the hon. member to say that under the present rearrangement Germany was asked to pay thirty-one billion dollars?


George Brecken Nicholson: Yes, thirty-one billion -thirty-one thousand million spread over a period of sixty years.


Alfred Speakman: I think the hon. member is mistaken.


George Brecken Nicholson: Perhaps I am; I give the figures subject to correction, but they are the latest figures I could secure.


Mr. McGIBBON:: Were they not wiped out at the Lausanne conference?

The Budget-Mr. Nicholson


George Brecken Nicholson: But the Lausanne conference has not relieved European nations of meeting their obligations to the United States. In my opinion it is unreasonable to expect them to meet those obligations.


Ian Alistair Mackenzie: Is the hon. member not confusing war debts with reparations?


George Brecken Nicholson: May I ask the hon. member this question: Unless they can collect from Germany, how are other nations to meet their war debts and reparations? Under the Young plan Germany was expected to pay twenty-seven billion dollars in sixty years. I may perhaps be a few million dollars out, but when it comes to the sum of thirty-one billion dollars, a million here or there on one side or the other does not amount to much.
However, in the revaluation of gold the objects to be aimed at are these: (1) Immediate liquidation of Germany's reparations' debts. If I have time I shall attempt to indicate the method proposed. (2) Liquidation of the allied nations' war debts to one another, and particularly to the United States. (3) Provision for the full gold covering of all currencies, inclusive of coins as well as notes. (4) Creation of an international gold coinage, which will terminate the exchange racket which makes international trade virtually impossible. (.5) The removal of grounds for misunderstandings from economic causes. (6) The extension of similar advantages to all nations at the conclusion of the currency treaty between the original six nations.
I add the last object because in the plan put forward it is suggested that it be applied primarily to the six nations involved in war debts and reparations. I do not for one moment suggest that in every detail the Robertson plan is absolutely correct. I do say, however, that when it is submitted, as I hope it will be, to those who handle the details, the plan may be applied to all the rest of the gold standard nations, in the first instance. But if it cannot the methods proposed, I am satisfied, will carry it through. However, I must hurry on.
Any plan for 'the reorganization of world currency on a gold standard basis, and the wiping out of war debts and reparations must be simple, direct and easily understood during the period of negotiations, as well as during the period of its application. It must offer benefits to all the treaty nations in equal proportions and with hardships to none. May I pause to interrupt at this point by stating that many suggestions have been put forward
to 'the effect that the way of escape, if I may use the phrase, is by redistribution of the present monetary world supply of gold. The plain fact is, however, that there is not a country in the world with sufficient monetary gold to cover the currency necessary to carry on its own business. There is not one country in that position. Many of them have such a small amount of gold, that it is but a mere fraction in comparison with the amount they should have. Any plan for the reorganization of world currency on a gold standard basis must recognize the principle that gold is the universal medium. It must reconstruct on a great international basis the very foundations of currency, of resources and credit, and banish the baffling intricacies of exchange between nations. It must embrace the immediate liquidation of war debts and reparations. It must be non-political, and must not include any contentious tariff considerations. The consummation of the plan must not be imperilled during the formative period or otherwise, by including a discussion on disarmament.
What does the plan involve? It is not, as I said, a mere fraction of increase in the gold coverage for the world's currency. It is a genuine revaluation. Is there any justification for that? Why should we revalue gold more than any other commodity in the world? In the first place it has taken the world at least from the time of King Solomon up to the present day to accumulate its present supply of monetary gold, plus that which has been used for industrial and ornamental work. I have a note, which I shall quote from memory, to the effect that since Columbus discovered America the total production of gold in the world for all purposes has been just about $20,000,000,000.
One other point. In relation to any other commodity you wish to name, what does the production of gold mean? If, for example, it were essential for the people of Canada in 1934 to double their production of wheat, live stock, iron, lumber, timber or any other commodity you like to name, it would be physically possible to do it. All we would have to do would be to make the necessary adjustments in labour, and we could double or treble the output of any single commodity, if it were nationally advantageous so to do. But what about gold? I know the suggestion has been made in this House of Commons that the government should employ a large number of unemployed men so that we might double or treble the output of our mines in northern Ontario. How long would it take to double the output of the Lake Shore mine,
The Budget-Mr. Nicholson

for example, and what would we do if we did double the output? All we would do would be to produce gold on an absolutely uneconomical basis, and work the mine out in half or quarter the time.
What is required to bring a gold mine into operation? For every producing gold mine in the world there are hundreds and hundreds of splendid looking prospects which have never amounted to anything, and into which millions of dollars have been put, and no return made. The bringing into production of a gold mine is something about which very few people who discuss monetary matters have any understanding. There is no single commodity of which I can think which is so stable in its annual production, or has followed as steady development for so long a period, as has gold. In the last fifteen years, for example, the world production has varied from $385,000,000 to $415,000,000. In five of these years the production was over $400,000,000 and in ten it was below that figure. True, we have had evidence in Canada of increased production of gold, but it is equally true that there has been decreased production in other countries.
One other point: If we take the world's present volume of monetary gold we will find that it was produced on a wage level not one-sixth of the wage level prevailing in the gold mines of Canada to-day. Consequently, on the basis of its economic value measured in terms of the amount of labour which men must put into the earth to get the gold out, it is due to be revalued, just the same as any other commodity would be under similar conditions.
Now may I come to the formula? The plan is to revalue and redistribute gold. It is to be carried out on a basis that will be fair or as nearly fair as is possible to the countries that have a large amount of gold compared with those who have a small amount. With that in mind it is not possible to do it in one stage, because if you simply doubled the value of gold all over the world you would simply increase the discrepancy that at present prevails in the distribution of the commodity that stands behind the world's currency. If we are ever going to get back on a sound basis of international trade, we must find a yardstick that will be understood in every country in the world and will be the same in every country in the world. The Prime Minister, speaking here yesterday afternoon, indicated clearly some of the difficulties through which we have passed not only during this period but for a generation back; notwithstanding the fact that a large number of countries were ostensibly on the

gold standard, strictly speaking they were not on the gold standard. The plan and formula suggested here is to have one hundred cents on the dollar in gold behind the currency that is issued. That will take care of world trade on the revalued basis.
But to come to the formula. The things to be taken into consideration in order that it shall be fair to all countries are: first, the present position; and second, economic needs.


Mr. LUCHKOVICH:: May I ask a question? What is the ratio of revaluation?


George Brecken Nicholson: I will come to that in a moment. Take the United States as an example, having regard to present position and economic needs. The following will indicate the theoretical estimate of the gold required by the United States to carry on her trade:
Actual gold in reserve.. ..$ 4,364,000,000 Annual national income,
$70,000,000,000, divided by	.
12, equals	 5,833,333,333
Combined export and import trade, yearly average over a five-year period,
$8,629,000,000, divided by
4, equals	 2,157,250,000
Moneys not in use, population 122,775,000 at $30 each, equals	 3,683,252,850
Total	$ 16,037,836,183
The present position is that if the United States carried on her trade on the basis of her currency it would be necessary to turn over her currency nearly 250 times in the year, or about once every one and a half days.
The plan under this formula is, first to have these six nations set up such machinery as they desire, and take over the monetary gold of the six nations on the basis of $40 an ounce. They will then redistribute it in this way: to the countries that contributed more gold in proportion than others a credit would be issued on the basis of $20.67 an ounce; a debit would be applied against the other countries, and the total would be reached in that manner. Without going into the minute details, because every member of this house either has or did1 have one of these books and can go through the formula for himself-I merely want to give an. outline- at that point the gold would be revalued and distributed on the basis of 5 to 1. Lest anyone suggests that this is multiplying the world's currency by five times, bear this in mind1; the world's currency in gold countries now is recognized as being on the basis of about forty per cent gold, forty cents worth of gold for each dollar issued, using the

34S3
The Budget-Mr. Nicholson
dollar as an indicator. Under the new scheme suggested the plan is to have a dollar's worth of gold behind every dollar's worth of currency, consequently instead of five times all you really have is twice the amount of currency available, you are really doubling the currency of the six nations involved.


Mr. KENNEDY (Peace River):: Would not that be a measure of inflation?


George Brecken Nicholson: No, just the reverse. Inflation is to issue currency in excess of the gold basis-that is our present position. The whole world's currency is in the shape of an inverted pyramid. This proposal is to provide an international basis, and then all currency issued would be on that basis. It would be understood by all nations.
The next point I wish to touch upon is the means by which the world's war debts and reparations and long and short term obligations can be met by this plan. I will just give a very brief summary of the final situation, for my time is short. The war debts and reparations have been arrived at on the basis of compound interest. After gold has been revalued and redistributed and the new basis for world currency provided, what may happen is, either the debtor nations may say to the creditor nations: Will you accept cash for these debts on the basis of compound discount? or perhaps more probably the creditor nations would go to the debtor nations and say: We will clean up these obligations now outstanding on the basis of compound discount. Then what would the situation be? First perhaps I can take time to illustrate what the position -would be before the payment of war debts. The United States would have in gold $19,000,000,000, France $8,000,000,000, Great Britain, $5,000,000,000, Germany nearly $4,000,000,000, Italy $2,000,000,000, Belgium $1,500,000,000. I omit odd millions; the figures are all available for any one who wishes to see them. Assuming the proposal were accepted that the creditor nations would receive the debts in cash on a basis of 2} per cent compound discount, what would the situation be? The United States would have $19,379,000,000 in gold, less a loan that they might well make to the debtor countries of $9,000,000,000. But they would have also receipts from war debts and reparations and the long and short term loans due them from Germany. I will take Germany's position to illustrate the final outcome. To-day Germany stands with world obligations of $31,000,000,000, a sum absolutely impossible to pay, and all she has behind her currency is $300,000,000 in gold. If this plan were put into effect, if the nations can be
got together to work this thing out-and I believe it can be worked out; I do not think it is in the slightest degree fantastic; it is absolutely sound on the basis of the commodity that the world has recognized as its basis for currency-then assuming that the nations accept these proposals, she would have $2,263,000,000 in gold behind her currency, and she would have one single long term commercial loan, or preferably a loan divided between the three countries with the largest amount of currency, namely the United States, France and Great Britain, of $9,000,000,000, something that, when she has been placed in that financial position, would be perfectly easy for her to carry and liquidate. This would relieve the whole world of this pressing nightmare of national and international debts and would lead the way to a new start in trying to find some plan by which we can get back trade and raise price levels, for we will never raise price levels until we put the people of the world in a position to buy. So long as we remain in this cramped, restricted position we will continue to go down the slide. In one quotation I have here from the editor of The Annalist that is put very -well. We are acting as a man might act in the summer towards a small boy who complains of stomach trouble; the man simply says, "Eat another half dozen green apples and see how you feel."
I have tried to outline, Mr. Speaker, as well as I could the plan that has been suggested and the formula for working it out. I have studied this plan for twelve months; I see nothing in it that is not perfectly sound, and I submit it to the house now in the hope that the government may appoint a committee of the house to join with experts in considering the matter or that the government itself, before going to the economic conference or submitting any proposals there, may arrange for some group to study this problem and present a finding, in the hope that out of it something may come which will bring the whole world back to a sound basis and save humanity what it is very likely to suffer if we continue going down the decline.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. CRIMINAL CODE AMENDMENT
The house resumed from Tuesday, March 21, consideration of the motion of Mr. Cas-grain for the second reading of Bill No. 46, to amend the Criminal Code (lotteries).
Motion negatived, on division.
!484
Railway Act-Rate Structure



RAILWAY ACT AMENDMENT

[Stage Direction]
The house resumed from Friday, March 24, consideration of the motion of Mr. Reid for the second reading of Bill No. 50, to amend the Railway Act (rate structure).
Mr. A. W. NEILL (Comox-Alberni):: Mr. Speaker, I support this bill and shall take this opportunity of answering some of the objections which have been raised to it. The argument of the hon. member for East Algoma (Mr. Nicholson) is so untenable that it hardly warrants a reply. It is easy to build up an argument based upon premises made to fit the argument rather than upon- premises based upon fact, and that is what the hon. member did. He built up his argument upon the supposition that this bill would compel the railway board to cancel rates. We have no reason to believe that the Board of Railway Commissioners is composed of either fools or knaves or will be so composed in the future. The hon. member's minor argument was that the bill would compel a reduction of rates which would prove to be unprofitable to our railways already in the red financially. There is a wide difference between cancelling rates and asking that rates for the same commodity should be equalized for the same distance. It is extra discrimination when a low rate applies on a valuable product and a high rate applies on a low priced article. The rate for domestic wheat is considerably more than double the rate for export wheat, and by far the greater bulk of the wheat going to British Columbia is for export. The railways compete for this export trade, therefore it must be assumed that the railway heads, being business men, consider that this business pays. If the low rate business pays, surely the railways will not be ruined by handling more business at the same rate. As an illustration, let us assume that a trainload consisting of thirty cars of wheat is being shipped from the prairies to British Columbia. Twenty-nine caTS are loaded with export wheat at the low rate. This business must be profitable because the railways compete for it, yet they say that they cannot carry the thirtieth car loaded with domestic grain except at a rate more than double what they are willing to accept for the bulk of the trade. That does not seem to be a logical argument. The hon. member argued that it would be disastrous to reduce rates but he should not foTget that the railways themselves reduced the rates on export wheat.
The remarks of the hon. member for Fraser Valley (Mr. Barber) consisted mostly of a political attack upon the hon. member for New Westminster (Mr. Reid) w*ho introduced

this bill. I think such an attack was entirely out of place inasmuch as the hon. member for New Westminster did not give a political slant to his remarks. However, the hon. member for New Westminster is quite capable of taking care of that himself.
Now let us analyze and define the situation to see if there is any need for this bill. That is the manner in which we should approach a matter of this kind. A long time ago the rate on export wheat to British Columbia was much higher than it is at the present time, but it was still lower than the domestic rate. Representations were made and the export rate was cut down substantially but the domestic rate was not reduced at all. The spread was made still greater. That happened on at least one more occasion, and I am not quite sure whether or not there was a third deduction. The differential is now very great, being more than double. If it were right to have the differential as it was in the original schedule, it cannot be right to have that differential increased to the extent to which it is at the present moment.
From time to time the governments of British Columbia protested against this differential, but their protests were more or less in vain. This action was taken by governments consisting of different parties. In contesting these applications for reduced rates, I think the railways broke a very important law, that known as the law of diminishing returns. This law works as inevitably as the law of supply and demand. To put it another way, you cannot charge more than the traffic will bear. That is a well known axiom in railway or other lines of business. The result was that they killed the goose that lays the golden egg or, in this case, the hen that laid the golden eggs.
I have before me a communication from a well known businessman in the district I represent. This was written a few days ago and he states that a great many of the remaining flocks of poultry have been shipped out and he believes that not more than fifteen per cent are left. That is to say, there has been a falling off in the poultry flocks in that district amounting to eighty-five per cent. I can corroborate that statement from my own knowledge. I remember people who used to have two, three or four thousand birds but who at the present time have not a single bird. They have been cleaned ou>t and absolutely ruined. This man says that eighty-five per cent have been cleaned out, and I believe he is correct. The railways have lost not only the shipping of feed which these poultrymen would need, but also the shipping of supplies and other accessories. There is also the very

Railway Act-Rate Structure
profitable shipment of eggs back to Montreal. They have charged more than the traffic will bear and they have lost the business.
British Columbia appealed to the Board of Railway Commissioners on several occasions and, failing to obtain redress there because of reasons into which I will go later on, they took their appeal on more than one occasion to the Dominion government. I do not intend to throw stones at either the Conservative or the Liberal administrations, because they both seem to be guilty of having stalled things off. In 1931 a debate took place upon this matter, and the Prime Minister is on record on page 1794 of Hansard of that year. The Prime Minister stated that the Board of Railway Commissioners was a court and that he would hesitate to advise the cabinet to override or even investigate a decision made by that court. He stated that the law was such as to permit an appeal to be made to the cabinet but he used the expression that the cabinet were partisan and he did not think it a good thing to have an appeal taken from what was practically a court and put into the hands of partisan judges. Of course, a partisan judge is an anomaly in itself. I agreed with the Prime Minister upon that occasion and am so on record. In my opinion, such appeals should go to the supreme court rather than to the cabinet. As I say, the Prime Minister said that he believed the experts on the Board of Railway Commissioners were well qualified to deal with such a matter. I quite agree with him in that, but those men should at least be competent to deal with it. Perhaps I am using the wrong word; I do not mean that the members of the railway board are incompetent, but I think the legal expression is that they are not seized with the proper jurisdiction and therefore they cannot give a just decision. They have not the authority to do so, and that is what the bill proposes to give them. I am very sure, although if I were put to it, I could not prove it, that a former member of the Board of Railway Commissioners told me that we would not get justice in British Columbia in regard to that matter until the act was changed because it did not give the board authority to deal with the question. We also heard the hon. member for New Westminster (Mr. Reid), when he was speaking on this subject, quoting very freely from the report of the Duncan commission which was composed of able men. Not only did they say that this action should be taken, but they actually used the very language which the hon. member has largely introduced into his bill.
The Duncan report was considered to be and I suppose still is a valuable document. It was
called the magna charta of the maritimes. I well remember the emphasis with which the opposition of those days insisted that it should be put into effect, and I think it was to a large extent put into force by the government of that day with, I believe, satisfactory results to the provinces concerned. If those men were wise and capable and their recommendations carried weight as they apparently did, why stop at the maritimes? Why, when they came to recommend something of material advantage to British Columbia, was it ignored? There is no question as to their view, because the hon. member for New Westminster put it on Hansard the other night. This bill gives the railway board the power which the Duncan report says they ought to have, and that is all it does, that power which a former member of the board said they lacked and which the Duncan report said in set terms, giving the exact language, they ought to have.
I do not think anyone has really tried to justify these rates; they have not done so openly at any rate, although they may have done so in a covert sort of way. These rates are too unjust for anyone to attempt to justify them. At this point might I mention a danger that has not been put forward before in connection with this legislation. On page 20 of the report of the last imperial conference will be found the resolutions of a general character adopted by that conference as distinct from the specific agreements. The first resolution they passed-at least it is placed first in the summary-is one regretting and deploring any system past, present or future, that the participating dominions might put into effect in the way of a bonus on their exported goods. They deprecated such action.
I have in mind the Patterson scheme of bonus-ing in Australia and other plans of that kind. They pledged themselves at the earliest opportunity to do away with any system of bonusing of that nature. The spirit of that resolution would certainly be entirely antagonistic to imposing any more bonuses. Our present system of railway rates in British Columbia is a clear and definite case of bonusing exported wheat at the cost of domestic wheat. That conclusion cannot be got away from when you charge twice as high a rate for the one as for the other. That regulation is working a wrong ini Canada to British Columbia, but it is also liable to cause very serious troubles in Britain itself because the people there are touchy; they are already asking that a duty be put upon Canadian products and this is an argument ready to their hand.
So we have the situation over a number of years as I have briefly outlined it. The appeal
34S6
Railway Act-Rate Structure

of the British Columbia government and the various farmer bodies who appealed, finally reached the governor general in council in Ottawa, I think two and a half years ago. The government could have done several things: they could have granted the appeal; they could have refused it; they could have referred it back to the Board of Railway Commissioners, which course the Prime Minister hinted would be the one they would take if they did anything at all, or they could have continued doing nothing as they did for quite a period. But they did none of these things. There was a suggestion by somebody in the cabinet, and I more than suspect it came from the Prime Minister, because it was something that would suggest itself to his alert mind. I do not think it was the Minister of Railways (Mr. Manion.), because I do not believe he would have thought of it. Someone suggested that instead of litigation, so to speak, the railways and the consumers should get together. This was not a bad idea at all, because, when you are in any way approaching litigation, it is always wise to compromise with justice to both sides. The only trouble was the method by which this was carried out. We often hear in the house charges thrown at the Prime Minister of being a dictator. Sometimes a dictator is a good thing; I only wish in this case the dictator had himself handled his original suggestions, but unfortunately he turned it over to the Minister of Railways, and the latter and the head of the Canadian Pacific, Mr. Beatty, sat in a poker game with British Columbia interests as the stakes and it was just too bad for British Columbia interests. Had the Prime Minister sat in at that game, I do not think we would have had Mr. Beatty walking off with the hair, hide, flesh and tail of the animal and leaving us with-well, what was left. To change the metaphor to that of the race track, the horse carrying Mr. Beatty's colours came in first and the British Columbia horse was not even in sight when the race was over.
Let me consider for a moment what Mr. Beatty got out of the deal. I could discuss first what British Columbia got out of it, but that could be put on the back of a postage stamp and still leave room for a gerrymandering redistribution map. It is more important to consider what Mr. Beatty got out of it. The first thing he got was the dismissal of the appeal. This was a fatal error for the government to make and a most unfair deal for British Columbia. Mr. Beatty, stipulated and demanded-and he got away with it-that the appeal should be dismissed, not left as a. protection for us in the future, not , left' even 
only as a means of enforcing the agreement which was merely a gentleman's one and not binding in law. The appeal should have been left at least as a club to guarantee the carrying out of the agreement, but the minister gave way and I think he made a fatal mistake. I shall give him full credit for one thing lie did, because Mr. Beatty, a smart, capable, able man, was out to get one hundred per cent and a little bit more; he also demanded that this arrangement should be a final ending of British Columbia's claim, but the minister to his credit stood out and said that we must leave the door open. It will be open for British Columbia to start the case again, but we realize the enormous delay and expense that would be. It would take years-and that is not a figure of speech-and great expense to fight the case before the railway board, have it come here and then be stood over for a year or two before it was dealt with.
The second thing Mr. Beatty got away with was this: It is said that be met us half way; that he gave up half the differential. The answer to that is no, and again no, and a thousand times no; he did not do anything like that at all. He met us half way on grain alone. Our claim was for two classes: grain and mill feeds. Mill feeds consist of bran, shorts and middlings and they constitute by far the larger amount of the traffic involved. Let me explain. A hen eats wheat, shorts, bran and, to some extent, middlings. A cow does not eat wheat; it eats bran and shorts, and a hog eats shorts and middlings and does not eat wheat. The consequence is that the quantity of bran, shorts and middlings, that is of mill feeds, carried in relation to the quantity of wheat, will be in somewhat- the same proportion as the size of the hen compared with that of the cow. That is not perhaps exact, but there is a far greater- amount of mill feeds carried than of grain alone.
I see the word "screenings" was put in, and hence we have to raise up our hands and sing psalms and give glorification for being able to get screenings from the prairies at a reduced rate. Every British Columbia man knows that we do not import screenings from the prairies. We can get screenings at a very low price right out of the elevators at New Westminster and Vancouver. That is just a bit of window dressing.
It was right to cut the difference in rates in half. I think it should have been cut out altogether; that is the differential. Why is it not right to do it on mill feeds? There is no answer to that. The Minister of Railways pleads ignorance and says that he did not

Railway Act-Rate Structure
am sorry that he is not in his seat, but he cannot get away with that. I have a letter here showing that a large feed company in British Columbia wired him on February 24 urging him to put mill feeds into the agreement, and he replied that it was too late, that the deal had been consummated by order in council the day before the wire arrived. That is a mistake. The order in council was passed, as he says, on February 25, but it was not the order in council that implemented the bargain at all. The order in council simply dismissed the appeal. It may have been in consequence of the bargain, but the bargain itself is not expressed in that order in council. It is expressed in a letter signed by the two railway heads and addressed to the minister. Anyhow I have a copy of a letter in front of me which I wrote to the Minister of Railways dated February 2, urging the inclusion of mill feeds, and the order in council was not passed until February 25. The agreement was changed in another respect on February 15, thirteen days after the date of my letter. The minister told us in the house the other day that the agreement did not go into effect until March 10, so there was ample time to have adjusted the matter and to have included mill feeds as well as wheat because, as I say, on February 15 a change was made in the agreement.
I said that there was no excuse for such action, but that is going too far. I should have said no justification. There is an excuse and it was put forward by the Minister of Railways and by the hon. member for Fraser Valley (Mr. Barber). They said, and I presume they are correct, although we have not the correspondence, that the British Columbia government accepted this transaction, gave it their imprimatur, O.K.'d it as being satisfactory; but I ask these two gentlemen who say that the British Columbia government accepted that deal, did British Columbia itself accept the acceptance of its government? I do not think so. Did they consult anybody? There is no record. Did they consult the dairy or poultry interests? There is no record. An election is coming on very shortly in British Columbia, and the government will have many things to answer for, for many of which they are not to blame, but it will have a hard job explaining its action in giving consent to such a onesided agreement as that.
But it was not the only blunder which the British Columbia government made. As I said before, Mr. Beatty is a very astute man. He was out apparently to get everything he could out of the innocence of the Minister of Railways. He arranged the deal in the first place-'the evidence is before me; I have
the letters-that the agreement was to apply only to wheat of No. 6 grade and lower, and to barley of equivalent grades. I have been in the feed business for seventeen years myself, and I have very seldom used No. 6 for chicken feed at all. It is almost invariably No. 5 or No. 4. The quantity of No. 6 that I would buy in a year would not amount to muich. Well, we were going to have this brilliant arrangement put through, confined to No. 6 wheat and lower grades, and it would not have been worth a snap of the fingers; and British Columbia government, so we are told, agreed to it. But thank heaven, apparently, there was somebody with more intelligence. Hon. Mr. Hoadley, a minister in the Alberta government, interposed and said: No; it is nonsense to make it No. 6 grade, it should be No. 4; and it was so arranged. Unfortunately the Hon. Mr. Hoadley, apparently representing largely the farmers, did not take the trouble to look into the feed question, or I suppose we should have got redress on that also; but we did not.
The next trick that Mr. Beatty took-he took twelve out of thirteen-was to arrange that the agreement would be in force for one year only, and then we have to go back to the old ra'te. True, the minister provided, and I thank him for it, that then we could begin all over again and go over the long and extensive route of going to the Board of Railway Commissioners and appealing to the government again, at the end of one short year. But the rate was to exist for one year only, and then we could reappeal and go over the whole ground again.
The next trick that Mr. Beatty won was a somewhat similar one. He arranged that the rate was not to come under the railway board, that it was not to be authorized by that board as all other rates have to be. No, this rate was put in a little division by itself subject to nothing except the railway's own good will or to a gentleman's understanding. Had it been arranged that the rate was to be authorized by the railway board, then .at the end of a year the railways would have had to give reasons for changing it, but now they do not. The rate drops automatically, and then it is up to us to go through the whole performance again right from the beginning. I would almost call that a trick and a half to the credit of Mr. Beatty. There is no method of appealing against this thing. If we find that the rate is not being put into effect or that modifications are being introduced of their own conception, we cannot go to the railway board, nor can we go to
34SS
Railway Act-Rate Structure

the government, because the government would say: We do not know what the interpretation was.
Last of all they arranged that nothing was to be any good, so to speak, unless there was a certificate. Just picture to yourself this situation. This is the way it reads:
Agents will not apply these rates unless a certificate in duplicate signed by the Deputy Minister of Agriculture of the province of British Columbia is surrendered by consignee.
Remember this, that before he can give this rate the station agent in Saskatchewan has to have a certificate signed by the Deputy Minister of Agriculture of British Columbia certifying that the wheat or grain is to be used only for feeding stock or poultry or both. That certificate has to be produced in the railway station in Saskatchewan. That is where the rate is to be applied, at the point of origin. It is a silly regulation anyhow. What are you going to use No. 6 or No. 5 wheat for? To feed a Ford car, or to feed people, or to feed stock? The certificate is not necessary, and it hampers business. When I was in the business-I am not now-I very seldom bought carloads of grain by letter. I almost always ordered them over long distance or by telegraph. But now a man wiring to the agent in Vancouver to send a carload from Calgary or Medicine Hat would first have to write to the Deputy Minister of Agriculture in Victoria, go through a certain form of red tapeism, get the certificate, and send it on to the little station in Saskatchewan, and then get his goods shipped. Look at the delay and the annoyance, and what good would it be to anybody when they did it? I have a facsimile of the certificate here, and it says distinctly that it must be stated that the stuff is to be shipped by so and so at so and so, showing that it has to be filled out and produced to the railway station agent before the rate is put on at the point of origin. By the way it also says, and I must hand it to Mr. Beatty for this-I have one or two shares in his company and now I have more confidence in it when -I see how able the -man at the head of that company is-it says:
No miiling-in-transit, stop-off, or reassembling privileges will be permitted.
It is permitted in the case of every other kind of grain, flour and merchandise coming from the prairie. These stopovers are a regular thing; I have taken advantage of them myself. Many small dealers cannot afford to buy a whole carload from the prairies in one shipment, as their requirements do not justify it, and so they buy it in mixed cars in
[Mr. Neill. 1
Vancouver, and in that case I doubt if there would be any benefit in this at all.
Here is another doubtful thing in this gentleman's agreement which might be interpreted in different ways. I am doubtful if it would be of any use at all unless the importer was the -man who actually fed the stuff to his own stock. The certificate must state that the material is for feeding live stock. I am somewhat doubtful whether that would apply in the case of a creamery company, or 1 other dealer reselling. I think it might be narrowed down to poultrymen, and only poultry-men having a sufficiently large number of birds to buy a whole carload of wheat at once. I do not suppose there is a man in British Columbia who would be able or willing to do that.
These are only some of the difficulties I see. The Minister of Railways has unloaded this baby upon our hands. We are supposed to dangle it on our knees and look pleased. But the more I look at the baby the less I like it. I am doubtful about its parentage, and every time I look at it it has darkened in colour. I believe it will turn out to be a nigger before we are finished with it-a nigger in the woodpile. In view of all these things, which are capable of being checked and verified; in view of the fact that we have lost our appeal, and it will take two or three years to get it back; in view of the Prime Minister's definite statement to the effect that these matters were not for decision by the cabinet, and that if ever they reached the cabinet they would be sent back to the Board of Railway Commissioners; in view of the Duncan report, which says that the principle contained in the bill is necessary-in view of all these things it will be only justice to pass the bill.
In it the Board of Railway Commissioners are not- compelled or given power to do anything wrong; they are only given power to do what one of them said was necessary. They are given power to do what the much-heralded Duncan report said was essential and right. That is all that is contained in the bill. If it passed nobody would be robbed or injured; the Board of Railway Commissioners are reputable men who would not lose -their character or reputation over night. The board will take care of railway interests, as they have done in the past. Nobody would be hurt by the passing the bill.
I should like to see reconsideration by the government, so that the bill might at least reach committee. If there is anything wrong

Railway Act-Rate Structure
with the details of it, corrections could be made in committee. I am convinced the spirit behind it is right. We need it; for many years in British Columbia we have waited for it. We have found out what is necessary, and we will not be satisfied until we get justice.	*


Mr. W. J. LOUCKS (Rosetown):: Mr. Speaker, I notice that on March 7, 1932, there was a discussion concerning domestic freight rates on grain and grain products, and on that occasion I spoke. I believe I said something to this effect, that I wished the bill then before us had gone farther and taken in gasoline, and some other commodities I mentioned. I was referring more particularly to the commodities entering our province from Alberta. Upon that occasion I quoted rates to Delisle. I do not wish to criticize the previous speaker, but it seems to me he has been very critical of the concessions which have already been given. Probably those concessions have been obtained through the efforts of hon. members on this side of the house, along with those of the hon. member for New Westminster (Mr. Reid) who took a very active part in the debate. Upon that occasion I did support the hon. member, and intimated that I was not satisfied with it because it helped only the province of British Columbia. So far as we were concerned, there was nothing coming back. After the explanation given by the Minister of Railways and the fact that the representatives of the four western provinces met in Ottawa during the recess, I cannot help but think that the provinces were intelligently represented. I take it that they came to a satisfactory understanding, and so far as grains coming into British Columbia from the prairie provinces are concerned I believe a fair and reasonable adjustment was made.
The hon. member who has just spoken has mentioned a very excessive rate. I am not saying he is not right. But on the other hand I am convinced more firmly than I was a year ago that our export rate is probably the lowest in the world. I know whereof I speak when I say that our rates are lower than those of the country to the south of us. When in Montana some time ago I had an opportunity to check up, I found that the rate from Big Sandy to Minneapolis, a distance of about 1,000 miles, was 41 cents a hundredweight, whereas the rate from Delisle to Fort William, a similar distance, was only 22 cents, or only about half.
My impression is that if we press too far in the matter of domestic freight rates in
times like these, when we are facing large deficits, there is only one alternative open to the managers of the railroad. If we insist upon a further reduction in domestic rates, they will increase the export rates. I think people in Saskatchewan and hon. members from that province in the house would rather leave the export rate alone than have it suffer for the benefit of the domestic rate. If we press unduly at this time that is probably what would occur. I wish to assure the hon. member for New Westminster that at a later date he will have my support, at a time when the management of the roads can show us that they have eliminated the deficits. We might take further action when the time comes-and I believe it will come- when these deficits shall have been eliminated.
One further observation: I notice that in the bill there is an intimation that power will be taken from the government. The hon. member who has just taken his seat referred to the opportunity we have of appealing through the Minister of Railways. If I interpret the bill correctly, upon its passage that opportunity will be eliminated. At the present time it is not. We can discuss it in the house; we have a say in it; influence can be brought to bear upon the management of the road. But in the measure before us that influence will be eliminated. I cannot quite understand the hon. member, because when the railroad measure was up only a short time ago he opposed it because it was taking control away from the government. To my mind that is the very thing he is doing in this bill-taking control away from the government. So far as British Columbia is concerned, I believe they should be satisfied with the adjustment that has been made. If there is any grievance it should come from the prairie provinces.


Mr. DEPUTY SPEAKER:: The hon. member has already spoken on the bill; he cannot speak twice.


William John Loucks: I am sorry if I am out of order. I might say, however, I was on my feet when the hon. member got up.


Alan Webster Neill: No; I waited for the hon. member.


William John Loucks: I got up, but you did not see me. However I am satisfied to take my seat.


Donald MacBeth Kennedy: Mr. Speaker, it may be that I shall be called upon to vote on this bill, and before doing so I should like to say a few words. I have always been in sympathy with the removal of the
Railway Act-Rate Structure

differential on grain or other products moving westward. However this bill goes much farther than I think we ought to go in conferring power and responsibilities upon the Board of Railway Commissioners. Take section 2:
The board may consider the question of what should be reasonable compensation under the circumstances, and may establish a rate structure in the interests of trade development and public policy, though such experimental rates may not at the time or of themselves give reasonable compensation to the railway companies.
Surely this parliament cannot hand over to a board of five members, which is really ^ a subdepartment of the Department of Railways, the right to establish a rate structure in the interests of trade development and public policy. The words are very indefinite, and capable of wide interpretation. Such matters can only be dealt with by parliament itself. For instance we might have the Board of Railway Commissioners deciding to establish a rate to develop a certain industry in a certain locality. But we might have a tariff policy, or a financial policy, of an entirely opposite effect. Only that body which has the power of coordinating and weighing these various questions can properly determine and lay down policies in the interests of trade development.
Another reason why I am opposed to this bill is that if we were imposing on the railways of Canada, the privately owned as well as the publicly controlled railway, rates that of themselves admittedly were not paying rates, how long would it be before the Canadian Pacific Railway Company would be coming here and saying: Pay us our deficit? I do not think we could avoid that. While I do not agree that there is real justice as between domestic and export rates going westward from the prairie provinces to Vancouver, and while I have spoken in this house against that disparity, though I was not here to vote on the other bill-I think I was ill when it came up,-I cannot vote to confer upon the Board of Railway Commissioners such powers as are proposed to be given them by this bill.


Mr. THOMAS REID (New Westminster):: Mr. Speaker, I would like to make a few remarks in view of what has been said by some previous speakers who have taken part in this debate. Dealing with the remarks of the hon. member for Fraser Valley (Mr. Barber), I am sorry that he substituted personal innuendo for argument. I hope it is not merely to cover the fact that he will not support this bill just because it is intro-
[iMr. D. M. Kennedy.]
duced by me. After such an action I can now understand why British Columbia has long been left out in the cold, especially if that has been the past policy of many of its members.


Mr. BARBER:: You have been appointed
spokesman for British Columbia, have you?


Thomas Reid: Such expressions, in my
opinion, lend strength to t'he cry of the people to-day wbb say: Away with all parties. That is somewhat to be expected, especially when hon. members instead of reasoned argument will indulge only in personal innuendos. I have been careful to avoid personalities; even to the Minister of Railways (Mr. Mandon) I was fairly mild, although in a previous speech he had attacked1 me. In almost every speech that the hon. member for Fraser Valley has made since I came to this house he has introduced the personal element particularly against myself.


Harry James Barber: I have only spoken once
this session.


Thomas Reid: Last session he did just the
same tiling. But I do not intend to imitate such tactics. I would have been very glad to support any bill on behalf of the people of British Columbia had he seen fit to introduce such a measure. It is regrettable that the hon. member cannot get away from that old political stuff and give fair consideration to a matter that is so vital to the province of British Columbia. I am not interested in the question of who gets the credit. He was so anxious to claim credit for his friends that I wonder why he left out his friend Leon Ladner who has been engaged by the province of British Columbia and paid by them. He was no doubt anxious that both the Minister of Railways and Mr. Leon Ladner get something, the one credit and the other the cash.


Harry James Barber: What about your friend,
Jerry McGeer, who got $60,000?


Thomas Reid: He blames me for looking
after the votes of the farmers. Last year he blamed me for looking for the votes of the labour men. I suppose that is his idea of a member who works solely in the interests of his constituency. At any rate I do not know how he gets the votes. Service, Mr. Speaker, should be the only thing that keeps men in public life. I resent very much, however, these personal attacks; they do not add; anything to the dignity of the house. I have put forward this bill as well as the bill on freight rates in a straightforward manner and without personalities.

Railway Act-Rate structure
My hon. friend blames me now for changing my attitude. This bill I might say, was introduced after the other one was turned down -that was the bill I introduced asking parliament to grant to British Columbia the same freight rates it had granted first in 1897 and again in 1925 on grain and grain products leaving Calgary or Edmonton for points east. That was turned down at the beginning of this session. That being tinned down, I then endeavoured to follow the matter up by asking that further powers be granted to the Board of Railway Commissioners, to permit of further appeals to them. It is well known to every hon. member of this house, and particularly to those from British Columbia, that British Columbia has spent thousands of dollars in appeals before the Board of Railway Commissioners. The case has also been before the governor in council not only during the term of office of this government but during the time the Liberal party was in power. Every hon. member knows that British Columbia has failed in those appeals, and we have been told by the board that we cannot hope to succeed by simply quoting the Crows-nest pass rates. It is futile for us to go before that board unless some further powers are granted to it. I was sorry the freight rate bill was turned down, and now it appears this bill is going to be turned down-at least they are blocking its going to committee where it could be properly discussed. I was not making a wild guess at something when I introduced this bill. This is the recommendation embodied in the report of the Duncan commission, which made a thorough investigation into the powers of the Board of Railroad Commissioners and who put it on record that that board had not the power to grant in the national interest any reduction in freight rates, but that it was desirable that they should have that power. That was the recommendation of that commission; it did not emanate from myself.
I notice that the hon. Minister of Railways in his remarks paid particular attention to the second paragraph but ignored the first paragraph entirely. It seems strange that he left that alone; it looks as if there must be some good in that section. He should at least have allowed it to go to committee. But he said that this bill might interfere with the present railway bill. That is one of the things I fear. I fear- that when the present railway bill relating to the Canadian Pacific-Canadian National goes into effect, freight rates may be one of the matters to be controlled by the tribunal which is to be set up, and if so the matter will be very serious indeed.
Regarding the arguments made by the hon. member for East Algoma (Mr. Nicholson), they were so childish and simple that I hate to take up the time of the house discussing them. He said this bill was designed to take the control of freight rates away from the Board of Railway Commissioners. What nonsense, Mr. Speaker! Surely no one would advance that argument in all seriousness. It is plain that the hon. member does not know as much about the Board of Railway Commissioners as he does about timber and timber leases.
I should like to see this bill go to the committee, Mr. Speaker, where it could be amended if that was thought necessary. The principle and the details of the bill were recommended by the Duncan commission, who went fully into the whole matter of the powers of the Board of Railway Commissioners. They recommended that such powers be granted to that board. The bill is not mandatory; the board would have all the data before it. No one could go before the board and hope to have an appeal granted because of the fact that he lived in some remote district, and so pleaded for low freight rates.
I should like to have gone more extensively into this question, but it is almost nine o'clock so I will conclude by asking the government even now to allow this measure to get second reading and go to the committee for further discussion and, if necessary, amendment.


Mr. GEARY:: I was paired with the hon.
member for Laurier-Outremont (Mr. Mercier). Had I voted, I would have voted against the motion.


Mr. MERCIER (St. Henri):: I was paired with the hon. member for Hamilton (Mr. Bell). Had I voted, I would have voted against the motion.


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


Mr. HAN BURY:: I was paired with the
Minister of Railways and Canals (Mr. Manion). Had I voted, I would have voted for the motion.


Mr. SMOKE:: I was paired with the hon. member for South Oxford (Mr. Cayley). Had I voted, I would have voted against the motion.


Mr. JOHNSTONE:: I was paired with the hon. member for Willow Bunch (Mr. Donnelly). Had I voted I would have voted against the motion.
	.


Mr. CANTLEY:: I was paired with the
hon. member for Richilieu (Mr. Cardin). Had I voted, I would have voted against the motion.


Mr. DUPRE (Translation):: I was paired
with the hon. member for Joliette (Mr. Fer-land). Had I voted I would have voted against the motion.



THE BUDGET


[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 proposed amendment thereto of Mr. Ralston.
Mr. J. L. IL3LEY (Hanta-Kings):	Mr. Speaker, there are a few observations which I should like to make upon the budget. First of all let me say that of the seven budgets which I have had tihe privilege of listening to since I became a member of this house, the present one is the most disappointing, the most disheartening and the most depressing. I suppose many hon. members who came into this house for the first time after the elections of 1930 thank it a usual thing for budgets to be brought down from year to year which disclose huge deficits, huge additions to the public debt, and huge increases in taxation. To those of us who sat in the last parliament and listened to the budgets presented by the late Mr. Robb and by Mr. Dunning, budgets which year after year disclosed large surpluses, large decreases in the public debt, and large reductions in taxation, the three budgets which have been presented by this administration since the elections of 1930 are nothing more or less than fiscal nightmares.
It is impossible within the forty minutes at one's disposal to deal with all the features of the budget, but I would not attempt to do so even if I had the time. This ground has been covered far better than I could do it by my esteemed colleague, the hon. member for Shelburne-Yarmouth (Mr. Ralston). The speech which that hon. member delivered on Friday last was a magnificent effort; I think it the ablest speech of his distinguished career. Able though he is, the Minister of Trade and Commerce (Mr. Stevens) could not succeed this afternoon in touching the salient points put forward by the hon. member for Shel-burne-Y armouth.

The Budget-Mr. Ilsley
Joseph Philippe Baby Casgrain: The poorest speech in his career.


Mr. ILSLEY:: Before I deal with the few features of the budget which I think deserve some comment, I should like to say that we seem to be getting into the habit of regarding budgets not as financial statements of the government's intentions but as preliminary drafts only. In 1931 when the Prime Minister (Mr. Bennett) was Minister of Finance he introduced a budget which later on was very materially altered. The same was true of the budget of 1932 and it will no doubt be true of the budget of 1933. I have no objection to changes being made-the changes which have been made in the past have been good ones-but I do think it unfortunate that ministers, of finance should get into the habit of simply getting up something and bringing it into the house by way of a preliminary draft and then having us go through the discussion in committee of ways and means with the idea of getting something out at the end of the session which may perhaps meet the requirements of the case. Such action misleads the business interests of the country because one does not know until the discussion has ended just what the budget actually will be.
I think this is all a vindication of the position taken by the opposition during the past two years that we in this House of Commons or in this parliament should not delegate legislative functions to the governor in council. Large powers are now vested in the governor in council under the various relief acts. These powers are such that the governor in council can deal with intricate and difficult matters, and if the manner in which the government will deal with them in council is exemplified by the manner in which they prepare their budgets, this House of Commons could certainly do a better job with the legislation of the country than could the governor in council.
There are a few and only a few provisions of the budget with which I wish to deal. The first is that relating to ex-service men. I want to read the part of the budget that deals with pensions. On page 3223 of Hansard of March 21, 1933, the Minister of Finance is reported as follows:
In this connection, I may say that with respect to pensioners who are in the employ of the government and who are paid the salary of the position, action will be taken whereby the payment of pension will be suspended during the period of such employment. Where the full salary of the position is not paid, the pension payment may not exceed the amount
53719-221 i
of the difference between salary received and the established salary of the position. If the pension is greater than the salary, the employee shall elect either to be paid the pension and relinquish the position, or to retain the position and have the pension withheld during the period of such employment. This will be made applicable not only to the government service but also to boards or commissions whose activities are financed from the Dominion treasury.
The Minister of Finance, in a statement which he made last Friday, indicated that another statement might be made in regard to the government's intentions with respect to pensions, and from the newspapers I gather the impression that those intentions may be substantially modified. But we do not know that; no such statement has yet been made. Therefore I feel I would be derelict in my duty if I did not take the statement literally as set forth in the budget and submit to the house a few of the consequences that will follow if it is applied as it now stands.
There is, in the towns and villages of this country, a large class of disabled men, in receipt of disability pensions, who, encouraged by a provision that has been in the Civil Service Act since 1918 to apply for public positions, have done so and are now in charge of post offices and the like, in positions which give them a small return. A very common class in the villages and towns in the country is that of which the type is a pensioner who has lost an arm or a leg or has some other disability; he is getting a small pension and a salary of a few hundred dollars, and by uniting the pension and the salary he is able to support his wife and family. If the passage that I have read from the budget speech means what it appears to mean, that pensioner is to be put to a choice; he must choose between continuing to take the pension and continuing to take the salary, and if the salary is larger than the pension, this means, despite the statement of the Minister of Finance that the government has no intention of interfering with the sanctity of pension contracts, that this man will be deprived of his pension. It is not, I think, necessary to argue to the house the injustice of such a course. It is completely subversive of the whole principle underlying the pension legislation, and without labouring the matter any further, I feel sure that will be one of the budget provisions which will be changed. It will have to be changed if the justice of the case is to be met and if the obligations of the country to ex-service men are to be carried out.
Another provision of the budget about which I should like to speak for a few minutes, which will not be changed, and which I should
The Budget-Mr. Ilslcy

not like to see changed, is the proposal of the government to appoint 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 hanking institution and to make recommendations for reviving or supplementing our existing banking and monetary legislation.
My only comment is that that intention has been announced very late in the day. Had the government appointed a royal commission eighteen or even twelve months ago, I feel sure this country would be better off than it is to-day. In September, 1931, Great Britain went off the gold standard. At that time our currency went down in terms of United States funds. The British pound went down to a very marked degree and immediately currency became, if it was not at that time-and I think it was then-one of the burning questions before the people of the Dominion of Canada. Great Britain, realizing the importance of the question, had, before that, appointed the Macmillan commission, which had made its report on currency and monetary matters in the old country. Canada should have taken a similar course,, or at least she should not have pursued the policy of laissez-faire.
I want to bring to the attention of the Minister of Finance the importance of the question from a practical standpoint. In the constituency that I have the honour to represent in this house, currency, the value of the pound sterling, is a matter of everyday conversation. As hon. members know, the largest single industry in my riding is apple growing and exporting, and when the pound sterling went down, as it did within the last shipping season, to between $3.55 and $3.60 in terms of Canadian money, our apple exporters suffered a terrible blow so far as their purchasing power was concerned. Consequently they have begun to ask and have been asking questions, and they have been taking a tremendously deep, not academic, but practical interest in this subject of currency. They had been brought up on the idea, I think, that gold should be the standard and that we should remain on the gold standard in this country. But when they saw that Great Britain went off the gold standard with results which apparently were not unfavourable; when they saw that the Scandinavian countries, Denmark, Sweden and Norway followed Great Britain off the gold standard; when they saw the Dominion of New Zealand and the Commonwealth of Australia taking steps to lower the value of their currency, and, finally, when they saw South Africa, the greatest gold producing country in the world, deliberately link its pound with the pound sterling, they began
[Mr. Ilsley.J
to wonder whether a policy of laissez-faire in currency matters was the proper one for this dominion. They saw that when our dollar went down in the United States, instead of this hurting them, it helped them, because the pound sterling went up in the Annapolis valley; they got greater returns for their apples. They wanted authentic information as to what this country should do; they desired to know whether it was just that debts-and the majority of them are loaded down with indebtedness to banks, mortgage companies and private lenders on mortgages-which were contracted when money was not worth very much, should be paid off in full in money which is worth a great deal more than when the debts were contracted. They realized that if our dollar became depreciated it would mean that municipalities and provinces, the dominion itself, and certain corporations in this country would have a greater burden of debt if they had to meet their debts in American funds, but they wondered whether that disadvantage would not be overcome by the corresponding advantage of an awakened business activity through inflation. It will be recalled that in 1925 in Great Britain the bankers, almost unanimously I think, were of the opinion that Great Britain, for the same reasons that the Prime Minister and the bankers of this dominion advocate what is called sound money to-day, should be brought back to the gold standard on a parity with the United States dollar. They did that against the advice of some economists who were regarded as radical and unsound at the time, but who since have been proved by universal consent to have been right. No one to-day contends that Great Britain was wise in going back in 1925 to the gold standard on a parity with the American dol'la-r. It is a question in the minds of economists whether the policy outlined by the Prime Minister yesterday, and stated by him and the Minister of Finance in public addresses throughout this country and in this house, of what has come to be known as "sound money", is really a sound policy. But to these questions there has been no authentic answer, and I say that this government has pursued a wrong policy in keeping the question shelved. At the beginning of this session the Bank Act should have gone before the banking and commerce committee for revision in the usual way. The appointment of a royal commission at this late date will mean delay in the solution of this problem, and the postponement of any action whatever on this important question for another year at least. The .commission should

The Budget-Mr. Ilsley
have been appointed a year or eighteen months ago. I support the appointment of the royal commission, yes, but I say that the government is to be censured for not having taken long before this some step in relation to currency and banking and monetary problems.
I want to refer for a few minutes to the taxation provisions of the budget. Before I do so, let me say that the statement made by the Minister of Trade and Commerce (Mr. Stevens) this afternoon to the effect that the hon. member for Shelbume-Yanmouth (Mr. Ralston) and every member of His Majesty's opposition are opposing every provision of this budget by supporting the amendment moved by the hon. member for Shelburne-Yarmouth is not a correct statement.


Ian Alistair Mackenzie: It is nonsense.


James Lorimer Ilsley: Moreover, there was a misstatement of fact by the Minister of Trade and Commerce this afternoon which I should like to draw to his attention. He stated that the member for Shelburne-Yarmouth approved of nothing in the budget, and in particular he mentioned that he was opposed to a reduction of the valuation of the pound sterling from $4.40 to $4.25. Now the hon. member for Shelburne-Yarmouth very distinctly stated in express terms that he approved of that. At page 3379 of Hansard of March 24, 1933, which contains the speech of the hon. member, he said this:
I am glad indeed that the Minister of Finance has seen fit to alter the rate of exchange and at least to make the fixed rate at_ $4.25 instead of $4.40. That indicates two things, that he is recognizing, I think, the representations which have been made in this country, and also the representations which have been made from Great Britain; but I say to him that I do not think there is anything more fundamentally wrong than that exchange dumping duty which he and the government of which he is a member pledged themselves to remove as soon as possible after the Imperial conference.
There are provisions in the budget, of course of which we on this side of the house approve. There are provisions in every budget of which we approve. If I were asked to criticize the provisions of the budget which ensure that the holders of bearer bonds will pay income tax, I could not criticize that.


Ian Alistair Mackenzie: The suggestion came from this side of the house.


James Lorimer Ilsley: Yes. Nor could I effectively criticize the provisions of the budget relating to the taxation of foreign investors, although there may be some objection to that of which
I do not know. Indeed, if it is necessary to raise immense stuns of money by way of taxation, we all realize that taxes must be imposed. I just have this to say about the general principles of taxation. The imposition of the sugar tax meant the imposition of a terrific burden, a forty or fifty per cent tax upon a necessity in daily use by the poor people of this country. It was the sort of tax that should not have been resorted to except in case of great extremity. What occurs to me is this, that perhaps that extreme tax should not have been resorted to until something more was done in the way of taxing more heavily the higher incomes. I realize that many of the higher incomes in this country are pretty heavily taxed at the present time, but the old argument that you must not take all of a man's income over a certain amount because that would deprive him of his initiative is now passe. The country is in such a condition to-day that I personally do not see any objection to taking the whole income above a certain ample exemption figure, and the government should have gone very far toward doing that before they had recourse to a terrifically heavy tax, forty or fifty per cent, on a necessity such as sugar.
Certain circumstances in connection with the imposition of that tax have embittered the people. A tremendous amount of profiteering is taking place in sugar from one end of the country to the other. I am in touch with the province of Nova Scotia, and the complaint is universal that in some way or other dealers laid in stocks to take advantage of the tax at once, and are profiteering on sugar to a tremendous extent, making large profits on the stock they laid in. That, sir, is all I have to say with regard to taxation.
I pass now to what I should like to speak about for the remainder of the time I propose to take, and that is the feature of the budget which is called by the Minister of Finance the agricultural stabilization fund. What is this agricultural stabilization fund? It is a high sounding term, but all it means is that an export bonus is to be paid to the exporters of certain commodities, thirteen in all, which go to the United Kingdom market. In order that the record may be complete let me read them:
Animals, meats (including bacon and hams), poultry, fresh fish, canned fish, tobacco, cheese, milk products, canned fruits, canned vegetables, maple products, eggs and honey.
The exporter is to be paid the difference between the value of the pound1 sterling at the time of shipment or at the time of remittance and $4.60. If the pound sterling, for
The Budget-Mr. Ilsley

instance, is at $4.10, he is to get 50 cents on every pound. That is to be done by order in council, not by legislation. The order in council is to be passed under the Relief Act, which had its third reading yesterday. The door is not closed, the Prime Minister says, to the admission of other commodities to the charmed circle. Persons who consider that they have -a right to the same treatment for other commodities may come to the government and1 present their arguments for the passing of numerous other orders in council throughout the year admitting to the list of commodities which will share in the benefits from this fund the products in which they are interested. The position I take in this regard is the position which the Minister of Trade and Commerce this afternoon endeavoured to ridicule, namely that taken by the hon. member for Shelburne-Yarmouth. I believe the house wlil agree that when the Minister of Trade an'd Commerce read the remarks of the hon. member for Shelburne-Yarmouth they did not appear as he said they would; they did not sound ridiculous at all, but on the contrary sounded quite reasonable. The hon. member for Shelburne-Yarmouth said that the principle of bonusing industries and exporters is unsound, but if applied it must be applied equitably, fairly and equally. Surely that is an intelligible position. It is the position I have taken since 1930. If the Minister of Finance is sufficiently interested -and I do not know why he should be- he could look up the speech I made in September, 1930, in reference to the high duties being imposed by this administration. He will find that I said something to the effect that this country must be careful not to do as Australia did, that she must not protect and bonus herself into bankruptcy. I said that in 1930. At the same time I said, probably with the use of a slang expression, that if there was to be a handout it should be an all-round handout. I do not think that position can be successfully or reasonably assailed.
There is only one principle which can be applied to the bonusing of industries, and that is the principle of equality. Ever since this government has come into power, importers of farm machinery in my riding have been burdened with heavy taxes and heavy tariffs and have found it impossible to import machinery without paying vexatious dumping duties. The increase in tariffs was not as troublesome as the imposition of dumping duties. They found it impossible to take advantage of favourable terms offered them by American exporters. Manufacturers of spraying materials in the United States offered

to take their pay in Canadian funds, but importers were not able to import because of the dumping duties imposed by this administration. About the same condition obtained in regard to fertilizers. I have watched the people in my district get poorer and poorer, their debts become greater and greater. I have watched the value of their produce go down and down until at the present time they are in very sad and distressed circumstances indeed.
Last fall when the Imperial economic conference agreements were laid before this House of Commons, promising advantages to the primary producers, and particularly to the apple growers, I felt constrained, due to the distress of my people, to support the agreements. However I want to say, and to say with sincere regret, that so far as the apple growing industry of Nova Scotia is concerned, and the apple growing industry in Canada as a whole, the promised advantages have not materialized.
I notice the hon. member for Digby-Anna-polis (Mr. Short), the constituency adjoining the one from which I come, is in his seat. I remember that in an aside in the debate which took place he said that it would be worth a million dollars to the Annapolis valley. Probably the hon. member will remember making that statement; I am sure he would not make it to-day. It may work out that way in another year, but I am not sure about it-I hope it will. During the year which has passed, however, as indicating the results the figures are eloquent.


Harry Bernard Short: The hon. member has just made reference to a remark I made. He certainly must agree that the apple exporters of the Annapolis valley are receiving a preference of more than a dollar a barrel on the 730,000 barrels which they have already shipped this year. The trade agreement has brought them in an extra dollar a barrel, has it not?


James Lorimer Ilsley: I am tremendously surprised to hear my hon. friend make that statement, because the figures show that that is not the case at all. The effectiveness of the preference in the British market depends upon the extent to which American apples are kept off the market. Let me give to the committee a few figures to indicate the extent to which they have been kept off. The exports of United States apples to the United Kingdom for the season up to March 11, 1933, show a decrease of 43 per cent on barrels and 25 per cent on boxes. But the crop in the United States during the past year has been much below normal. The crop for the 1932 season

The Budget-Mr. Ilsley
was about 85,000,000 bushels, while the crop for the 1931 season was 103,000,000 bushels. In 1930 it amounted to 101,000,000 bushels. Not since 1929 do we get a comparable crop figure. In that year the crop of the United States was 80,500,000 bushels, of which were exported to the United Kingdom 953,000 barrels. The export this year was practically the same, or 983,140 barrels up to March 4, 1933. The box shipments were somewhat less. The figures show for the present season that box shipments from1 the United States total 1,929,326 boxes, whereas in 1929 they were 2.654,000. So that the shipment to the United Kingdom market has been about normal during the last year
With regard to price I happen to have under my hand a report from J. Forsyth Smith, Canadian Fruit Trade Commissioner, in which the statement is made:
Actually there was no shortage of supplies and no rise in wholesale prices, which continued to be lower than normal. As far as retail prices were concerned, the effect observed was the reverse of what the fruiterers' organizations had anticipated and the great mass of medium class fruiterers found it necessary to stimulate trade under generally depressing conditions by shading their profit. Whereas, therefore, one had been in the habit of expecting six pence per pound, to be about the minimum for boxed apples. This was no longer the case and prices of four pence and five pence per pound were by no means uncommon.
It has been the experience of apple growers in the Annapolis valley, from which I come, that the amount received during the past season for their apples has not been sufficient to meet the cost of production.


Harry Bernard Short: They got four shillings sixpence per barrel more than the Americans did.


James Lorimer Ilsley: Mr. Speaker, it would take too long to refute that statement with mathematical certainty, but all I can say is that it simply is not in accordance with the facts. Everybody in the Annapolis valley, and I think the hon. member himself knows it. In the selection of the thirteen commodities, why has the government not included apples, one of the commodities we would expect to find near the top of the list? We are told that we are getting four and a half shillings per hundred pounds in increased price on the British market. As a matter of fact we are getting nothing of the kind, because the operation of supply and demand, in the absence-of an effective prevention of American competition, has brought the price down on the British market. Now, sir, I have turned over in my mind as carefully as possible the principles which may have guided the government in the selection of the commodities to be included in this list, and I am at a complete loss to find evidence of any definite or consistent principle. In my humble opinion the list constitutes discrimination of the rankest kind. Looking at it on the basis of volume, it might be said: "Oh well, we have selected this list to encourage shipments that actually go; we have left off commodities that are not exported to the British market in any volume." Indeed that is what the Prime Minister said yesterday in regard to butter. But I find maple products on the list, the exports of which last year amounted to only $5,333; eggs, the exports of which amounted to only $3,972; honey, exports of which amounted to only $184,341, and other commodities not much greater in quantity of export. So the basis of the list cannot have been volume. It has been suggested that certain articles, apples for instance, were not included because they already enjoy a substantial preference. But I find on this list other commodities which enjoy a substantial preference, notably tobacco. Why should tobacco be on the list and apples be left off? It may be said that the list was selected with a view to helping the primary producers. But persons who should know inform me that there are on the list a number of processed products as to which the manufacturer or processor will get the benefit of the bonus while the persons who supply the products will not. The most notable instance of that, I am told, is bacon, and second to that I should say canned apples. Why are canned apples bonused, and evaporated apples and cider and concentrated cider and green apples left off? What is -the basis of selection? I have made inquiry and I am told that the bulk of the fruits that are canned in this country come in from the United States; the canner sends the canned fruit to Great Britain and gets the bonus. About seventy carloads of pears were exported from Canada to Great Britain last season, while pears come from the United States to be canned. The pears that are shipped by the primary producers will not get the bonus, but the canners of American pears will get it, because canned fruits are on this list and fruits in their natural state are left off.
Then it may be argued that this is a relief measure; in fact the other night the Prime Minister said so. If it is a relief measure I cau tell the Minister of Finance of a great many industries producing natural products other than those covered by this list which
The Budget-Mr. Ilsley

are in a condition requiring relief. Or it may be said that this list is selected to give general benefits from one part of Canada to the other, well spread over the dominion. But that again is not correct. Coming from the maritime provinces, I have scanned this list to find what maritime province products are bonused. What are they? Nothing in any substantial quantity at all. So if the principle is geographic, the maritime provinces are left out of the distribution of benefits.
So I say the government cannot, in justice, leave this list of bonused products in its present shape. There is only one principle to apply, that is the principle suggested by the ex-Minister of Trade of Commerce, the hon. member for North Bruce (Mr. Malcolm), the other night: if you are going to give a bonus to any exporters to the British market you must give a bonus to all exporters; you must apply it across the board, all along the line. When I was in Nova Scotia about a week ago I was going over the condition of the apple industry with some of my friends. We were naming the fruit growers one by one; we knew their financial standing pretty well. This man, they agreed, could not come out, he was too deeply in debt; this one we thought might possibly pull out; the next we thought was good and would probably be good for some time to come. Some of my friends said: What could the government reasonably be asked to do to assist the apple growing industry of Nova Scotia? One gentleman suggested that the government might be asked to make up the difference between the present price of the pound sterling and par. But as soon as he suggested it he said he realized that that would be an unreasonable request, because if it were done for the apple exporters the government would have to do it for all exporters. To our simple old-fashioned intelligence it appeared elementary that you could not pick and choose and give a bonus to some and deny it to others, yet that is what the minister is doing. I say to the Minister of Finance as forcibly as I am able that the apple industry of Nova Scotia, and I think of all Canada, will resent the discrimination shown in the compilation of that list of products to be bonused under the proposed agricultural stabilization fund, and the government will incur tremendous unpopularity-I do not say that as a threat; it is simply a statement of fact-for they cannot justify that unjust discrimination in favour of certain exporters and against certain exporters, to the British market.


Mr. W. D. COWAN (Long Lake):: Mr. Speaker, the outstanding feature of Canadian
[Mr. Ilsler-l
life during the past few years has been the splendid coolness which has characterized our people. We know full well, all of us on both sides of the house, including those in the broadcasting comer, that times have been exceedingly hard. We know full well that the whole world has suffered, and we know that the Canadian people have suffered with the others. We have had bard times, we have had privation, we have it yet; we are not yet quite out of the woods, although we are getting there at a lively rate thanks to the Imperial economic conference agreements and other measures of this government. Our people have behaved splendidly; there is absolute calmness everywhere. There has been no rioting, no revolution, no panics such as have characterized other places. Even a great nation of 120,000,000 people, supposedly the wealthiest in the world, has recently had banking panics. None of these have we had. As far as I know in Canada we have had only one stampede, namely the Calgary stampede; and the Prime Minister was there in charge of that so that everything was run on a sound money basis.
The coolness of the Canadian people under all these trying circumstances proves conclusively that thej' have great confidence in the powers that be. We find the people standing by constituted authority, believing as they do that those in charge in the various parts of the dominion will be true to their duty and that as a result we shall come through this depression quicker than any other nation and as satisfactorily as may be possible in the circumstances. And that is exactly what has happened. The people have confidence in their leadership. It is quite true that the Supreme Being is over us all, but when we come down to mere man we find right in this house a. leader of the government who commands the admiration and confidence of the entire people, even though they do not always agree with him. Hon. gentlemen opposite know that the Prime Minister (Mr. Bennett) is the best man in Canada for that position; they will not admit it, but they know it. That is all I ask, and they can keep their knowledge to themselves if they wish.
It is true that we have this fine government, which has been of great benefit to Canada, but it is also true that some hon. gentlemen opposite, particularly those from Saskatchewan sitting in the third row, always make the most extraordinary demands. Those demands can be reduced to one word:	money, money,
money. You may call it assistance, relief, grants or what you will; when you come right down to it it is money, money, money, and

The Budget-Mr. Cowan
help, help, help. The difference between hon. gentlemen opposite and hon. gentlemen on this side of the house is that they are always asking for it and we are always handing it out as far as the treasury of the country will permit. We are doing; they are talking, and I would much rather be a doer than a talker
When we get down to that broadcasting corner, hon. members there are worse than the hon. members from Saskatchewan. They demand just as much money, but they want 27 per cent compound interest and they want it with arrears upon arrears. There is no limit to the amount they want. I wish Canada could meet all these demands, but I should like to remind hon. gentlemen opposite and particularly those in the comer that they have not submitted a single proposal designed to place a dollar in the federal treasury. My mother was a good old Scotch lassie; she used to say, "I will spend all the siller you give me but I want you to get the money first," and that is a mighty good principle. We must get the money in our treasury before we can pay it out.


Mr. YOUNG:: Tell that to the Prime Minister.


Walter Davy Cowan: Let me say to my hon. friend that we have not much time to waste here, he and I. Three years ago I thought the hon. gentleman was the worst man in the house, but he has improved wonderfully. You know the old rule: The older you get the more experience you acquire; the more experience you acquire the wiser you become, and the wiser you become the more of a Conservative you are.
I feel sure, and I know what I am talking about, that Canada has handled this distressing situation better than it has been handled in any other country in the world. It may be that to-day the United Kingdom is leading the world; it may be that France is able to keep all her people employed. She has a great many men in her army, which may account for it. I do not know whom they are going to lick next, but in any case, apart from those two countries Canada has beaten the world. The relief situation in the United States has not been handled as it has here. I lived over there for some years; I know something about that country and I have many correspondents there. All I have to say is this, and if it is out of order I hope the Speaker will check me up: Thank God I am a Canadian. If that is not in order I am sorry.


Edward James Young: Withdraw.


Walter Davy Cowan: I know hon. gentlemen opposite say that their general policy is to reduce tariffs and so increase trade. Oh, what an easy thing to say! We can reduce our own tariff; we can wipe out every factory in Canada; we can have every blessed thing manufactured in Christendom dumped into Canada if we wish. That is our privilege, but I should like to know what hon. gentleman opposite controls the United States. Does anyone? Can hon. gentlemen opposite tell me how we are going to make the United States reduce its tariffs? There is Mussolini; go to Italy and order him to reduce tariffs in order to permit the entry of Canadian goods. There is Hitler; go to Germany and tell him to let Canadian goods enter. How can we export goods against these tariffs? Until hon. gentlemen opposite can show me some method by which we can get something in return for all we give I say their policy must be an absolute failure. The only tariff policy that could have succeeded under existing conditions was the policy enunciated by the Prime Minister, that of blasting our way into the markets of the world. We raised our tariff until now we have blasted our way into those markets. What has happened? We have blasted an unfavourable trade balance clear out of existence; to-day we have a favourable balance of S60.000.000 or 370,000,000. Now I suppose hon. gentlemen opposite will get up and say that since we have that favourable balance we should give it back. Is that their policy? How is that to be done, and to whom is that to be given? I should like to get some of that money myself. Hon. gentlemen opposite know their policy is absolutely foolish; they really do not believe what they say.
I am glad to see that my hon friend from North Battleford (Mr. McIntosh) is here. We all remember how in 1931 he moaned and groaned about the terrible conditions that existed in Saskatchewan. I called a boy and asked for a mop; I wanted to mop up the tears the hon. gentleman shed, but the boy did not know where they were kept. At any rate the hon. member groaned about distress and misery, but what happened? Shortly afterwards the hon. gentleman went back to Regina and attended a meeting of the rural newspaper association. In Regina we have a leading organ of the Liberal party, and my hon. friend could not refrain from letting the people know be was there. He gave an interview rvhioh appeared in that newspaper on October 10, and here is what he said:
People have had a good crop, will have plenty of grain to sell, and also have stock on which to rely. Mixed farming, he says, is growing apace in the Battlefords and people appear to be hapnv and contented.
The Budget-Mr. Cowan

I would like the hon. member for North Battleford to tell me how a man can be both happy and miserable and how a woman can be both contented and discontented.


Mr. McINTOSH:: The hon. member ought to know himself.


Walter Davy Cowan: Canada and
the United Kingdom are both away to the good. I like the old motherland, the mother of parliaments. As Britain prospers so prospers the world. Get her going and the rest of us will follow. We will do very well to walk along side by side with the old motherland. The British business man is the best on earth, bar none. Other business men hare more conceit, but when it comes down to the real thing, the British business man gets the business. That country is carrying on and is succeeding. Since the session resumed in January, not one word 'has been said about the economic agreements. Why? Because they are successful. I know it is unparliamentary to refer to previous debates, but if these agreements had failed in their purpose, hon. gentlemen opposite would have found five hundred ways of getting the matter into the house.


Edward James Young: They have failed; they do
not amount to a hill of beans.


Walter Davy Cowan: I will not
pay any attention to the hon. member because no one ever does.


Mr. GOTT:: The hon. member for Weyburn knows they have been successful.


Walter Davy Cowan: The following is an article which appeared in the Commercial Intelligence Journal:
In agreement with the arrangements concluded at the Imperial conference at Ottawa, the "Importation of Canadian Cattle Order of 3933" was passed and became operative on January 17 last. Under its provisions the trade in Canadian cattle is made easier; certain unnecessary costs are eliminated, and restrictions on their landing and movement to markets, etc., that were not applicable to other cattle, have been removed. In consequence there has been established a more favourable opportunity for their delivery and sale in the United Kingdom.
That article was written by Mr. W. A. Wilson, Agricultural Products Trade Commissioner for Canada in Great Britain. Who is he? He used to be the dairy commissioner and at one time lived in Regina. He and I know each other mighty well. He is the rankest, most ripsnorting Grit that I ever met in all my life. He is a big sixfooter and he used to go around with a companion just as big as himself. They objected to the Tory 
doctrines which I was advocating and one day when it was thirty below zero they picked me up bodily, put me under the town tank and turned on the hose. I never was so cold in all my life; it was the worst dose I ever got. This just shows the type of man we have over there. Surely hon. gentlemen opposite will accept the opinion of a member of their own party who is right in the centre of things.
There is one thing I would like to say to whomever is leading the government. If we ever have a condition such as we had four or five years ago when a dozen so-called independents were able to take the government of the day by the throat and compel them to acknowledge them as masters, I am going to say to my leader-I would not care whether or not he liked it-that I would rather vote Liberal than put up with such a condition. I do not believe in that kind of government. I, for one, object to these independents getting us by the throat. A short time ago the hon. member for Winnipeg North Centre (Mr. Woodsworth) spoke in Saskatchewan and he is reported as follows in one of the Saskatoon papers:
Success of the Independent Parmer-Labour movement depended on Saskatchewan, said Mr. Woodsworth. It was the key province and must swing into line.
When he comes out with his "must" he is going to find me on the other side. The people of Saskatchewan are not going to be driven in any such way. Apparently this new group has selected Saskatchewan as its centre, but they will never succeed. Why? The combination of labour and fanner is an absolutely impossible one. They say that the combination is possible because the farmer employs labour, but I do not agree with that statement. What price are they going to exact from the farmers of Long Lake? They might as well tell me now because they will have to tell it on every platform in that constituency. Here is what the president of the Trades and Labour Congress said when speaking in Calgary:
It is a disgrace for any municipality to offer to keep the wives and children of workers, while at the same time forcing the men, their lawful bread-winners, to work for farmers at slave wages.
He is suggesting that the farmers of Saskatchewan and Alberta are slave drivers. I represent a constituency of farmers-thank heaven there is not a single civil servant in the whole constituency-and I know them pretty well. I want to say that the farmers of that section of the country are prepared to pay a reasonable wage to their employees at

The Budget-Mr. Cowan
any time, but they are not going to be held up as they have been. They have been bled right and left. Not long ago a taxi man who brought me to this building told me that he wanted to get back to Regina. I said: "Why do you want to go back there?" He said: "I want to get back to work on a farm". I asked him where he had worked, and he gave the name of the farmer. I said:	"Why do
you want to go back?" He said:	"Because
I get such good wages; I get $12 a day". I said: "What were you doing?" He replied: "I was running a tractor". He did this all summer until freeze-up. No farmer in Saskatchewan can afford to pay $12 a day, and yet a certain type of labour, represented by such people, come in there; they wait until they see a field of, say 3,000 acres of wheat all ready to cut, when the farmer has to hire help immediately or the crop will be lost, and they demand an exorbitant wage which the farmer has to pay. That is one reason our farmers are broke as they are to-day. That sort of thing must stop.
I do not believe the leader of the Labour party ever did a day's work in his life. I have; I served my time and worked and I can do it now. When I was in Philadelphia I was one of the officers of the Knights of Labour, which was then a powerful labour organization in the United States, and I believe I still have somewhere my card of membership. Therefore I know something about hard work. Some people will say that it is beneath the dignity of a member of parliament to admit that he has ever worked. The calluses are still on my hands from the cooper's adze and the carpenter's hammer. I will tell the house bluntly and plainly that I would rather have calluses on my hands and corns on my feet than bimions on my brain as some people have. I am opposed to that combination of farmer and labour, because they are out to exploit labour; they are out to exploit the farmer and they are going to do this if they can, but they will never get away with it in our province. They may get away with a certain amount of it, with the rag-tag and bob-tail, but the sane part of the population, the sane Liberals and sane Conservatives, will not stand for that kind of thing, and they form the great bulk of our population.
I see the hon. member for Temiscouata (Mr. Pouliot) is not in his seat, but he will probably read my remarks in Hansard. I want to pay him a compliment in regard to that series of questions which he put the other day; they entitle him to my gratitude and, I think, that of the whole of Canada. He asked hon. members in the far corner opposite about
200 questions which they cannot answer to save their necks. They may reply to two or three of them and by doing so they consider that they have answered them all. The hon. member twitted me with belonging to the Ku Klux Ivlan. I do not care if he did. Out of gratitude to the hon. member for the splendid series of questions which he asked in opposition to that broadcasting corner group, I will tell him what I am going to do. I am going to send to Louisiana for the whole Ku Klux Klan outfit, if the Minister of National Revenue will allow me to import it free of duty; I am going to have it embalmed with me; when the hon. member reaches the pearly gates, he will find me waiting there and I will pull him in through the pearly gates, I do not care whether I get him in head first or feet first.
I want to ask a few more questions of the Farmer-Labour party. Let me read a letter from a man who is a farmer in a big way because he occasionally markets 30,000 bushels of wheat. He writes this letter which appears in the Liberal paper in the district of Long Lake, the Craik Weekly News. He addresses it to the provincial leader of the Farmer-Labour party. This is the letter:
As Mr. M. J. Coldwell, leader of the Farmer-Labour party is to speak in Craik next Saturday, all who can possibly do so should attend, as he is an able speaker and has given much time to the study of socialism. And if socialism has something definite and practical to remedy the condition we are in, then that is what we want.
So if Mr. Coldwell has the time to spare I would like him to explain the following things:
The Canadian national railroad is owned and controlled by the people of Canada (socialistic), yet since taking over through slackness in operating it has cost the taxpayers of Canada 446 millions of dollars.
The Saskatchewan wheat pool, owned and controlled by the people of Saskatchewan (socialistic) through lack of ability and business experience has cost the province $13,500,000.
The Saskatchewan Cooperative Creameries-
Started by the ex-Minister of Agriculture (Mr. Motherwell).
-'also owned by the people, through poor judgment and slack operating management have cost the province over $1,500,000.
The Registered Seed Pool has cost the government several hundred thousands of dollars.
The U.F.C. head office owes the banks around $60,000.
These concerns are all managed along the lines of socialism; how is it they are all in debt and but for the assistance of capitalism would be out of business?
How would socialism handle the Calgary exchange difficulty?
When the socialists were in power in Great Britain with an able leader and a large majority, why was not national banking and national currency put into operation?
The Budget-Mr. Cowan

I want my friends in the -far corner opposite and also those immediately opposite to note this final question. They are always talking about Russia and bartering with her:
Why is socialistic Russia, after being in operation for fifteen years, trying to buy cattle from the farmers of western Canada on credit?
That "on credit" settles the matter. This is an ordinary, everyday farmer; he is a good farmer, I admit, and he is a level headed man, but he is not the only level headed man we have in Saskatchewan. I wish I had time to go into the situation. The fanners out there are as level headed and as well informed as any you can meet anywhere. There are no better informed people in this country, and, as you can quite appreciate, they are not standing for any nonsense of this kind. A number of them in the Long Lake district have been deprived of their land! by mortgage and investment and insurance companies. To-day Saskatchewan is taking drastic action. These investment companies have brought their own troubles on their heads; the position they are in is due entirely to themselves. In Saskatchewan to-day we have thousands and thousands of acres which have been taken away from the fanners by these companies, and what are they going to do with them? I would point out to the Minister of Agriculture (Mr. Weir) that these thousands and thousands of acres ought not be allowed to stand idle. They should be cultivated, otherwise they will be nothing but hotbeds for noxious weeds and all kinds of pests and insects. I would rigidly enforce the act relating to noxious weeds so as to compel the cultivation of every quarter-section of these lands, no matter what it costs the company.
But what are the conditions to-day? As I said to this house the other day, and I want to drive it home again now, in 1931 there were thirty-three states in the republic to the south of us which were absolutely drought stricken. The great American desert came into its own for a year. In those states that were stricken by drought there lived thirty millions of people, and they had made it a good country to live in, just as we have made Saskatchewan a good place to live in. But the drought swept over that country, and coming up to western Canada from Arkansas, Montana, Dakota and Idaho, it caught us. We could not stop those winds. But they have passed, and we may never have them again in our lifetime. Why should we be blamed, as we are being blamed, for a condition which is only temporary? To-day we have all kinds of snow out there, which we have not had for years, and it is quite evident to me that

we are again back on the path to old-time prosperity, and upon that I am going to build.
Take this editorial from the Ottawa Journal -and it makes me sick. The editorial is headed: "Now We Can Believe Anything," and reads in part:
Out in Saskatchewan-of all places

the municipality of Harris not only is collecting no taxes this year but actually is paying to its ratepayers a dividend of two mills out of an accumulated surplus.
That is not unusual. The municipality of Pense, in the constituency of Long Lake, has no debt either. It was drought stricken for four years and it has got millions of dollars' worth of acres. A financier who has invested out there, referring to -these conditions, says that something is wrong. He is not a socialist ; he is far from being an extremist; he is a great financier. He says:
We seem to have reached the last line of defence in Saskatchewan, for when a farmer will come in with from four to eight clear titles for quarter-sections-
That would be from 640 to 1,280 acres of land:
-which he operates and which so far have never carried an encumbrance of any kind, these men are now offering part or all of these titles for sufficient advance to see them through their operating expenses for 1933, and find that neither the banks nor mortgage companies are disposed to entertain their agreement, then I think you will agree with me that matters have reached a very serious condition indeed.
A man would go out there and buy a quarter-section of land, and out of that make a farm, and when he was doing well he would buy another section, until perhaps he had four or eight quarter-sections all free of encumbrances, and with a good home, good buildings and everything he wants. But today when such a man in that area that was stricken by drought wants a few dollars he cannot get a cent from any of the banks or mortgage companies, and I say that something is lacking. We want somebody who will come between the banks and mortgage companies and the people, to enable our farmers to carry on.
I -think my time is up, Mr. Speaker.


Pierre Édouard Blondin: The hon. member has
two more minu-tes.


Walter Davy Cowan: Then in those two minutes I will speak of the Prime Minister. I am sorry he is not here to-night. I met him the other day and he said, "I am sorry I do not see you very much." The way I like to discharge my parliamentary duties, Mr. Speaker, is not to go near the ministers.

The Budget-Mr. Golding
I would rather go to the men below, and discuss matters with them, and then when everything is Completed I can get it across to the minister. I have known the Prime Minister for very long, for thirty-five years anyway. He and I drove a rig together in that western country, and we bad a mighty good time together.


Some hon. MEMBERS:: Time.


Walter Davy Cowan: There was
no "time" when R. B. Bennett was speaking. I shall never forget the first speech I heard him make in the legislative assembly in denunciation of the government of the day. As he made his points, time after time he would bring his fists down on the desk until you would think it would break, as he cried, "Make things happen, make things happen, make 'things happen." That has been his principle all his life, and the man who cannot make things happen for himself is a mighty poor scrub.


Mr. W. H. GOLDING (South Huron):: Mr. Speaker, in rising to make my first speech in this house I have that sense of embarrassment which I presume every new member has experienced; but there is an old saying that misery likes company, and there is some satisfaction in knowing that others have passed through the same ordeal.
At the outset I should like to say that I hope the hon. member for Long Lake (Mr. Cowan), who lias just taken his seat, will not think me discourteous if I do not follow him in his remarks. As a matter of fact, I would not care to follow anybody in a debate who had made some of the remarks made by the hon. member.
I have heard it said, Mr. Speaker, that this House of Commons is a strange and difficult place in which to speak. I believe I can say I fully realize the truth of the statements I have heard to that effect. Many hon. members who now sit in this chamber have been highly honoured by their constituents by the fact that time after time they have been elected to parliament, with the result that they have spent many years in this House of Commons. Those hon. members in their extensive parliamentary experience have listened to the addresses of many other hon. members, and have heard many new members make their first speeches in the house. I appreciate the fact that those hon. members, with the experience of years behind them, are well acquainted with parliamentary procedure and with the many views which have been expressed on political problems. With those advantages they are therefore in a position
to detect an error in a speech, whether it be simply grammatical or on a matter of policy. In view of these facts I appeal to hon. members not to be too harsh in their criticisms of what I may have to say.
The house is aware that as a result of the by-election held in South Huron on October 3, I came to this House of Commons. I am sure all hon. members regret exceedingly the circumstances which brought about that byelection. I refer of course to the unfortunate death of our honoured friend, the late Mr. McMillan. He was a man who to a marked degree had the confidence and respect of the electors of his constituency. Indeed, in making a personal canvass I was more than pleased to hear so many complimentary remarks concerning our late friend, remarks which came from people entertaining all shades of political thought. While all did not agree with his political views, yet they realized that his opinions were honest and sincere. From early manhood he had made a study of agricultural and political problems; indeed even at the early age of eighteen years I am told he was speaking from public platforms concerning these matters. For over fifty years he had taken a leading part in the public discussion of political problems. As the representative of the constituency which repeatedly honoured our late friend by electing him as its representative to the House of Commons, I take this opportunity of expressing my sincere thanks to the right hon. Prime Minister (Mr. Bennett), to my honoured leader (Mr. Mackenzie King), to the leader of the group to my left (Mr. Gardiner) and to all hon. members in the house for their kindly references at the opening of the session to the passing of our friend. I thank them, further, for their message of sympathy which was unanimously extended to his bereaved daughter, Miss Margaret. Let me assure the house that these kindly acts were appreciated, and I feel I should be remiss in my duty were I not to offer to all hon. members the grateful thanks of our people.
In regard to the budget which was so ably presented by the Minister of Finance (Mr. Rhodes), and which is now the subject of debate, I must say that one cannot but view with alarm the financial situation of our country which in the speech was so plainly indicated. Someone has been unkind enough to say that we listened to a typical Tory budget, and that the outstanding features were taxation, tariffs and deficits, with the emphasis on the deficits. I submit that it is hardly possible to discuss the budget and our financial situation without at least in a
The Budget-Mr. Golding

measure referring to our position before this government assumed the control of affairs. Every hon. member will recall that in 1929 certain events took place which seriously affected business conditions. In the western provinces there was a partial crop failure; there was a market crash in the United States, and the depression which had existed in many countries was gradually creeping into our own. In 1930 these disturbing factors were still being felt, creating of course a certain amount of anxiety and unrest.
Our Conservative friends, then in opposition, were quick to note these conditions, and, regardless of the effect it would have upon the country, felt the time opportune for an appeal to the people. With that in mind they began clamouring for an election. On the other hand the Liberal party felt that the Dunning budget had been designed to cope with existing difficulties, anid, believing in the efficacy of their policy as outlined in the budget, believing also that the Canadian people would appreciate the splendid legislation brought down by the Liberal administration, and the outstanding results wdiich had been attained between the years 1922 and 1930, accepted the challenge, and the country was plunged into a general election.
The outstanding incidents of that election are still fresh in our minds. Practically every Conservative speaker traced the depression, only in its infancy so far as Canada was concerned, to the policy and legislation of the Liberal government. They condemned the government in every way, shape and form for not finding more markets and getting higher prices for agricultural products. They denounced the government in every manner, in spite of the fact, mark you, that this country had just passed through an era of unprecedented prosperity. The expansion of trade in Canada had been perhaps greater per capita than that of any other country in the world. Our Conservative friends, however, appealed to the people for the control of affairs. In order to obtain support they broadcast some of the most extravagant promises that were ever heard in any political campaign. I have no desire unfairly to criticize the Prime Minister or any other hon. member, I believe there is such a thing as fair criticism and I shall endeavour to keep within that limit.
I was deeply interested in and somewhat, surprised at the remarks to-day of the Minister of Trade and Commerce (Mr. Stevens). I have not been a member of parliament very long, but for many years I have read Hansard, and I was just wondering, when he was complaining about criticisms which had been made,

if he was the same hon. member who sat on the opposition benches and criticized so severely the late Liberal governnient. Was he the same hon. gentleman who during the election campaign criticized the Liberal government so severely? I have pointed out that immediately before the election this country was beginning to feel the effects of the world depression, and the number of unemployed was increasing. Every effort was made to make political capital out of the very undesirable situation which was developing. At every Conservative meeting the unemployment problem was particularly featured, and the responsibility therefor was charged directly to Liberal legislation. The Prime Minister made some definite statements concerning unemployment. I have no doubt they have been quoted many time?; in fact since coming to this house I have heard them read, but I take the liberty of making further reference to them. Speaking at Moncton, New Brunswick he is reported as follows:
The Conservative party is going to find work for all who are willing to work, or perish in the attempt; it is going to call parliament together at the earliest possible date after July 28, to take such steps as will end this tragic condition of unemployment and bring prosperity to our country as a whole.
He went on to say that Mr. King promised consideration of the problem of unemployment, and then made the amazing statement: "But I promise to end unemployment." And he asked the question; Which policy do you like best? Speaking at other places he ridiculed the suggestion of the Liberal leader that a conference be called to consider all features of this problem. Speaking at Sarnia he is reported as having used these words:
Someone is responsible for unemployment, not individuals but governments.
I want to emphasize that-"not individuals but governments." Governments are responsible for the enacting of all legislation. Of course at that time there was a Liberal government in power, but I think every fair-minded person will agree that if that statement was true then it is equally true at the present time.


Ernest Lapointe: More so to-day.


William Henry Golding: If it was true then, this government stands convicted by the statement of its leader of being responsible for all the unemployment which we have from one end of the country to the other, and all the misery and distress and tragedy connected with it.
I do not think, Mr. Speaker, anything is gained by being unfair, and let me say I did

The Budget-Mr. Golding
not think that was a fair statement to make at the time it was made, neither do I think it would be fair to say now that this government is wholly and entirely responsible for the condition of unemployment that now prevails. But I do submit that the high tariff policy which has been adopted by practically all countries as well as by this government has contributed more to bringing about the chaotic condition which exists in the world to-day than any other one thing. In my opinion it has added enormously to the number of unemployed. And having adopted that policy this government is to that extent at any rate responsible for the situation that confronts us at the present time. It is a well known fact that after the war this policy of high tariffs began to operate in practically every country. In Canada its operation was delayed by a low tariff government, but since 1930 it has been in full effect, and we have certainly felt its evil results.
In regard to the promise to end unemployment, it was most unfortunate that in order to obtain votes promises of that kind were made with little or no hope of their being fulfilled. These promises had a demoralizing effect upon the workers of Canada. It is well known that every industrial worker, indeed every one no matter what his vocation in life may be, must make his individual effort to provide for himself and his family. But when this .assurance was given that everyone who wanted work would be provided with work, that no one would be permitted to go hungry or cold, the very thing happened which anyone who had made any study of psychology would expect to happen-the workers of our country in ever increasing numbers began to look to the government, and rightly so, to see that these election promises were carried out. I have noted since that election that members of the cabinet in making public addresses have endeavoured to point out that there is not the individual effort that there should be, that there is a tendency to depend too much on the government for the provision of all needs. This is especially true in regard to the addresses given by the Minister of Trade and Commerce and the Minister of Railways and Canals. One cannot sow the wind without reaping the whirlwind. We are reaping the harvest to-day from a seed which was thoughtlessly sown during the campaign of 1930. As an industrial worker myself I know that there was need of help being given in many cases, but I also know that the picture presented to the unemployed of our country during that campaign was so impossible of fulfilment that one cannot but regret that such statements
were broadcast throughout our land. I am satisfied that this promise to end unemployment secured for the government thousands upon thousands of votes, and in my opinion contributed more to their success at the polls than any other one tiling. Now after almost three years in office what has been done by the government to implement this premise? I submit that nothing whatever has been done to end unemployment. It is true that money has been spent like water on unemployment relief, but no legislation has been passed which any reasonable -person can claim to have ended unemployment. A survey was made after -the last election to ascertain the number of the unemployed in Canada, and the returns indicated that abo-ut 117,000 were out of work. At the present time it is estimated that practically 800,000 -are unemployed. The figures speak for themselves; I quote them only to show how completely the government has failed to fulfil this promise, a promise which never should have been given.
To emphasize their failure more clearly one need only refer to the recent conference between the provincial and federal governments to endeavour -to find a solution of this very difficult problem. It is worthy of note that after nearly three years in office the government, partly, at any rate, adopted the very suggestion made by my honoured leader during the 1930 comipaign, namely the calling of a conference to explore the whole situation, wh-i-ch suggestion was ridiculed and made light of -both by the present Prime Minister and by Hon. Mr. FeTguson, who took such an active part in that campaign.
Many promises, sir, w-ere made in addition to those which we have been discussing. Many promises were made to agriculturists and great hopes were held out to them in all parts of the dominion. Speaking at Winnipeg Mr. Bennett is quoted as having used these words:
Listen, you agriculturists in the west, and all other parts of Canada, you have been taught to mock at tariffs and applaud free trade, tell me when did free trade fight for you? You say tariffs are only for the manufacturers, I will make them fight for you as well, I will use them to blast a way into the markets that have been closed to you.
At Victoria he said:
It is true we must have foreign markets, and as I said the other evening, we will blast a way to those markets on a world wide basis with any exportable surpluses; we do no-t have to worry about that.
We are all familiar with the many promises that were made regarding the prices that were to be received by the dairy industries, the prices of wheat and cereals and live stock.
The Budget-Mr. Golding

Indeed the picture presented to the agriculturists was as beautiful as the one for the unemployed, and I need hardly add that both classes were equally disappointed. As a result of the present high tariff policy, with its restrictive and strangling effects on trade, the prices of agricultural products are sinking to depths hitherto unknown, while the prices of commodities that the agriculturist must purchase are through the same tariffs kept at heights out of all proportion to the prices that the farmer receives.
Having in mind the Prime Minister's promise that he would blast a way into the markets of the world for all agricultural products, I confess that I was amazed to hear such statements in reference to the empire treaties as that they were designed to shut out the foreigner, and that all nations outside of the empire would be asked to pay tribute for the privilege of dealing with the empire. These are damaging statements so far as any effort to secure foreign trade is concerned, and are sure to have their reaction; undoubtedly they will make it more difficult to secure the markets that Canada must have if we ever hope to regain prosperity or restore our country to the position it held during the regime of the late Liberal government. Instead of blasting a way into the markets of the world for the farmer, the farmers' market is paralyzed. Canadian farmers were never in a worse financial position than that in which they find themselves to-day.
The rates are as follows:
Cotton printed piece goods White cotton flannelette..
Wool piece goods	
Wool overcoating	
High grading suiting.. ..
Wool hosiery	
Blankets	
We are all willing to admit that these are not normal times. We are willing to admit that no matter who 'had been selected to govern this country we would have had unemployment. But while admitting that, I am satisfied that the policy adopted by this government has aggravated the whole situation and made matters infinitely worse than ordinarily they would have been. I am confident that even if conditions had been normal, the policy of this government would have brought about a serious situation in our country. I have heard hon. members opposite claim that had the Liberal party remained in power conditions would have 'been worse than they are at the present time. I would suggest that those hon. members study the records of the two parties in regard to the securing of markets and, the reduction in taxation and in the national debt, and I am satisfied that they will be convinced as to which party has the better record. Time does not permit me to go into details as I should like, but I *want to put some figures on Hansard in order to show how disastrously the present policy has affected the basic producer in regard to the commodities he has to purchase. I have here a table of comparative prices under five different tariff programs. These rates are applied to imports from Great Britain; they were taken from invoices received not so long ago, though I appreciate that they will be lower under the new valuation for the pound.
Borden	Meighen	King	Bennett	Preference%	%	%	%	%25	25	18	61	58.5174	174	15	55	5230	30	24|	68	6430	30	24J	100	9330	30	24f	72	6825	25	20i	92	82224	25	20i	106	80
I should like to place on Hansard also the tariff increases on farm implements under this government:
	Old rate	New rate	
Liberals	Conservatives	Percentage%	%	increaseBinders	
6	25	300Seed drills	
74	25	233Manure spreaders	
7*	25	233Cultivators	
74	25	233Milking machines	
10	25	150Hay loaders	
10	25	150Incubators	
10	25	150Ensilage cutters	
10	25	150Barbed wire	10	-Cream separators	25	-

The Budget-Mr. Golding
Before leaving this point, Mr. Speaker, I should like to say that these tariffs constitute a real hardship on the basic producer. In my experience as an industrial worker for over thirty years I have found that with increased duties we have had less employment. We had that experience after the election of 1911; we had it again during the regime of Mr. Meighen and certainly we have it now. I remember very well reading in the Toronto Globe in September, 1921, that there were thirty thousand men out of work in that city. I think we should get it into our minds that anything that interferes with or hinders the progress of the basic producer is bound to have its reaction in regard to the purchase of manufactured products.
During the 1930 campaign the promise was made that our debt would be reduced, but now we find that instead our debts are increasing to an alarming extent. During the regime of the late Liberal government we had a steady reduction in the national debt. I am not going to trouble the house with extended references to the debt reductions made during those years except to say that they totalled $257,866,932. Now, however, we are about 8445,000,000 worse off than we were before. The debt increase for one year is more than double the debt reduction made in any year since confederation. In the period from 1930 to 1932 this administration added $202,000,000 to the national debt, while in the two previous years under the Liberal government the debt was reduced by $119,000,000. In the first two years of this administration expenditures were higher by $107,000,000 than in the last two years of the Liberal regime. During the years from 1923 to 1930 the reduction in taxation amounted to approximately $116,000,000, but now we have increased taxation
Year-
1926		
1927		
1928		
1929		
1930		
1931		
1932		
1933	(estimated)
on almost every conceivable article, and at the same time our public debt is mounting by millions of dollars each year. We were promised that expenditures would be reduced, but what has happened? As compared with previous governments our expenditures are mounting by millions, while at the same time our exports have been cut in two. In 1930 our exports amounted to $1,145,000,000; in 1932 they amounted to only $587,000,000. In 1930 our expenditures totalled $398,000,000, while in 1932 they amounted to $448,000,000, an increase of almost $50,000,000. This year they are estimated at $417,000,000, an increase of S19,000,000 over those of 1930, while our exports will be approximately $651,000,000 less than they were in that year.
The Minister of Trade and Commerce spoke in my home town during the by-election, and the Conservative paper there quoted him as follows:
Referring to the financial record of the government, Mr. Stevens told of the success of loans secured in recent years, which indicated, of course, the faith the people had in the integrity of the Prime Minister and his government.
I submit, sir, that conditions are serious when, after two years in power, in regard to our financial position this government can only boast of the loans they have put over.
With regard to the increase in expenditure as compared with our exports I should like to place on Hansard our exports, our expenditures and the percentage of expenditures to export. I submit that this represents a serious situation. The Minister of Trade and Commerce quoted volume; I propose to quote value, because we must remember that the government was elected to raise the price of


[Stage Direction]
commodities.	The statement	is as follows:Exports in millions of dollars	Expenditures in millions	Per cent expenditure to total exports. .. $1,328	$355	26.7. .. 1,267	358	28.2. .. 1,250	378	30.2. .. 1,389	378	27.2. .. 1,145	398	34.7. .. 817	440	53.9... 587	448	76.4. .. 494	417	84At eleven o'clock the house adjourned, without question put, pursuant to standing order.	.
Questions
[Stage Direction]
Wednesday, March 29, 1933