1933-04-10

Mr. SPEAKER:: On Friday, April 7, the right hon. the leader of the opposition raised the point that the house having control of its own records, the house should, before any statements are expunged from the official report of the debates, pass a resolution to that effect, and he submitted that the Speaker
being the servant of the house in this, as in all matters, the house itself should determine whether anything is to be deleted from any of its records.
In the case in point, the first opportunity I had of fully understanding the words complained of was when I saw the official report, and since I should have ruled them out when they were uttered I consider I was justified in ruling them out from the chair as soon as the house sat again. I agree that in dealing with Hansard the Speaker's authority is subject to the approval of the house.
Instructions for any alteration in the official report of the debates should not be given without communicating them to the house in session, and for this reason, whenever I have deemed it advisable to direct that certain statements be expunged, I have done so from the chair, thus giving a ruling which, under standing order 12, is subject to an appeal to the house. I have followed the precedent established by one of my predecessors who, on April 6, 1925, decided that an answer given by the government should be expunged, and he did so in the following words:
I therefore rule that the answer be expunged from Hansard, and if the question is put again, a distinct answer should be given.
I have dealt with all such cases as questions of order subject to the ordinary rules of parliamentary procedure.



PETITIONS PRESENTED

[Stage Direction]
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Mr. Speaker, under standing order 68 I have the honour to present four petitions addressed to the House of Commons endorsed, as required by paragraph 5 of the same standing order, by myself.
The first is from the electors of the parish of Notre Dame du Portage, in the county of Temiscouata, protesting against the proposed annexation of that parish to the county of Kamouraska.
The next is a petition from the electors of the town and parish of Trois-Pistoles, in the county of Temiscouata, containing the signatures of several hundred people, protesting against its annexation to the county of Rimouski.
The next is a petition of the parish of Sainte-Frangoise, in the county of Temiscouata, protesting against its annexation to the county of Rimouski.
The next is a petition from the parish of Saint-Jean de-Dieu, in the county of Temiscouata, protesting against its annexation to the county of Rimouski.
There are in all, on these petitions, about 992 names, mostly of heads of families.
Washington Conference

Hon. W. A. GORDON (Minister of Labour) :: Mr. Speaker, I desire to lay on the table of the house certain orders in council passed pursuant to the relief legislation.



WASHINGTON CONFERENCE


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: As a matter of
public interest, if the Prime Minister would not regard me as unduly inquisitive, may I ask if he has received an invitation from the President of the United States to meet him in Washington to discuss international problems, and if so, whether he intends to accept the invitation in person?


Right Hon. R. B. BENNETT (Prime Minister) :: Mr. Speaker, the answer to both questions is in the affirmative.


William Lyon Mackenzie King: May I ask
my right hon. friend one further question? Does he intend to pay the visit during the Easter recess, if that is not asking too much?


Richard Bedford Bennett: I am not in a position
to answer that question definitely, but at the moment I would say no.



SINO-JAPANESE DISPUTE SPEECH DELIVERED BY THE SECRETARY OF STATE AT GENEVA TO BE DISCUSSED

[Stage Direction]
On the orders of the day:
Hon. IAN MACKENZIE (Vancouver Centre):: In view of the extensive and somewhat conflicting press references to the speech delivered at Geneva by the Secretary of State, may I ask if the house will be given a definite statement of policy with regard to that question at an early date?


Richard Bedford Bennett: I do not think there is any necessity
of saying anything further than has already been said with respect to that particular matter. I had no notice that such a question was going to be asked, but I might add that when the estimates are under consideration an ample opportunity for discussing the matter will be given in fairness to the Secretary of State, who has not yet had the opportunity, and I trust that he will avail himself of it.



GRAIN COMMISSION REPORT

[Stage Direction]
On the orders of the day:
Mr. J. L. BROWN (Lisgar):: May I ask if the Minister of Trade and Commerce has

received the report of the Board of Grain Commissioners for the crop year ending July 31, 1932, and if so, whether it will soon be available to the house?


Hon. H. H. STEVENS (Minister of Trade and Commerce):: I will answer my hon.
friend's question definitely to-morrow.



CIVIL SERVICE SALARIES

[Stage Direction]
On the orders of the day:
Mr. W. F. GARLAND (Carleton):: May I ask if it is the intention of the Minister of Finance to have voted a proportion of the estimates in order to provide for the salaries of the civil service which are due on the fifteenth of this month?


Hon. E. N. RHODES (Minister of Finance):: I propose in the course of the afternoon, as soon as we reach government orders, to ask for interim supply.



SARNIA-PORT HURON VEHICULAR TUNNEL COMPANY

[Stage Direction]
On the order:
The house again in committee on Bill No. 41, an act to incorporate the Satnia-Port Huron Vehicular Tunnel Company (as amended).-Mr. Gray.
Richard Bedford Bennett: I would like to suggest to the hon.
member that he have the bill as it has now been amended after a conference with the officials of the Department of Justice reprinted before we proceed with it, because as it now stands it would be almost impossible for anyone to understand the various amendments which have been made if they are simply pasted on to the original. I think the bill should be reprinted. It is not a matter of very great expense, and I think it should be done.


Mr. GRAY:: I shali be glad to comply with the wishes of the Prime Minister.
Order stands.



QUESTIONS

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

Mr. COOTE:: 
Mr. WEIR (Melfort):: 1.
Manitoba	$ 3,482 36
Saskatchewan	
9,821	72Alberta	
3,518	09Total	816,822	17
2 and 3.
Dr. Chas. Head.. ..	..$ 1,476	$ 2,310 51Wm. McKirdy	.. 1,386	873 35Dr. J. A. Sinclair. ..	.. 774	1,557 13Dr. C. K. Geary.. ..	.. 1,341	1,974 87Col. J. J. Fry	.. 1,107	808 37Arch. McAlister.. ..	.. 1,062	2,151 94$ 7,146	$ 9,676 17
4. Out of 1,437 stallions examined, 291 were approved.
5.
Grants and bonuses paid to date. .$68,140 90
Outstanding approximately	 12,700 00
Total	$80,840 90


BEAUHARNOIS POWER PROJECT-LEASES
Mr. BARRETTE:: 1.	Is the contract dated December 10, 1908, repecting the leasing of the old Beauharnois canal, to which the Minister of Railways and William Cassell McIntyre and Edmond Arthur Robert were parties, still in force?
2.	Was the contract transferred to some other party, and who holds the contract at the present time?
3.	Are the obligations arising out of this contract still in force, and if any modifications have been made, what are they?
4. Are clauses 16 and 17 of the original lease respecting the transfer of the lease of the old Beauharnois canal still in force?
5.	If these clauses in the contract were cancelled, what reasons were adduced for their cancellation?
6.	Were similar clauses inserted in the agreement concluded between the federal government and the Beauharnois Light, Heat and Power Company?
7.	Was a guarantee to the effect that this company will not amalgamate or merge with or sell any of its shares to the Montreal Light, Heat and Power Company inserted in the contract of the Beauharnois Light, Heat and Power Company?
8.	Was the clause mentioned in paragraph 7 inserted in the contracts in which the federal government is interested directly or indirectly?


Mr. MANION:: 1.	Lease dated December 10, 1907, of the old Beauharnois canal, to William C. McIntyre and Edmond A. Robert (as renewed April 26, 1930) is still in force.
2.	On October 23, 1908, the lease was assigned to the Canadian Light and Power Company, which company now holds renewal of same.
3.	The obligations arising out of the lease are regarded as still in force.
4.	Clauses 16 and 17 of the original lease expressly forbade any assignment of the lease to the Montreal Light, Heat and Power Company, its assigns or successors; or any partnership or amalgamation. These clauses were waived by P. C. 3136 of December 18, 1920. This change is not regarded as a change in obligations entailed by the lease.
5.	The reasons set out in the order in council waiving clauses 16 and 17 were to the effect that the provisions of the clauses in question caused the company great hardship in financing its operations and prevented it from borrowing at advantageous rates on its securities, and had hampered the company's development, tending to increase the cost of power to the public.
6.	Not specifically, but it is provided therein that there shall be no assignment except with the approval of the governor in council.
7.	If the contract referred to is that embodied in Dominion order in council, P.C. 504, of March 1, 1932 (and not the agreement as between the province of Quebec and the Beauharnois Light, Heat and Power Company), the answer is that no such guarantee was exacted. However, as stated in answer No. 6, there is a measure of control, clause 31, of the agreement and of order in council, P.C. 504, providing:-
" That no assignment of the company's works nor of its rights under Chapters 19 and 20 of the Statutes of Canada, 1931, and/or under order in council (P.C. 504) dated the 1st day of March, 1932, shall be made unless the approval of the governor in council is first had and obtained; and in Case the company ^hall make any such assignment without such approval His Majesty may take over and operate the whole or any part of the company's works without compensation; Provided, however, that an assignment by the company to a trustee or trustees as security for an issue or issues of its securities shall not be deemed to be an assignment within the meaning of this clause."
8.	Answered by the replies to questions 6 and 7.


TRADE WITH FRANCE
Mr. GIROUARD:: 1.	What was the value of our exports to Prance from 1st of May, 1932, to the 1st of January, 1933?
2.	What was the value of our imports from France during the same period?
Questions


Mr. STEVENS:: 1.	Canada's exports to France from May 1, 1932, to January 1, 1933, were as under:
Canadian produce	 $8,803,442
Foreign produce	 38,863
Total exports	 $8,842,305
2.	Canada's imports from France from May 1. 1932, to January 1, 1933, were $6,188,129.


MONTREAL LIGHT, HEAT AND POWER COMPANY
Mr. BARRETTE:: 1.	Did tlie federal government consent to the expropriation of electric power by the Montreal Light, Heat and Power Company?
2.	If so, under what conditions?


Henry Herbert Stevens: 1 and 2. No.


ELECTRIC POWER COSTS-QUEBEC
Mr. BARRETTE:: 1.	Has the government received any complaints regarding the price of electric power
Date and No. of	Amount
order in council	of loan
Nov. 30, 1931-P.C. 2994	 $500,000
Feb. 6, 1932-P.C. 289	 500,000
Apr. 14, 1932-P.C. 848	 500,000
July 6, 1932-P.C. 1543	 500,000
Sept. 7, 1932-P.C. 1951	 500,000
3.	Nil.
in Montreal and in the province of Quebec?
2.	If so, what action will be taken by the government in this respect?


Mr. STEVENS:: 1.	The Department of Trade and Commerce has not received any such complaints.
2.	Answered by No. 1.


FEDERAL LOANS TO ALBERTA-MUNICIPAL LOANS
Mr. POWER:: 1.	What amounts were advanced by the Dominion government by way of loan to enable the province of Alberta to loan to municipalities in order that their share of works relief or direct relief may be paid (a) during the year 1931; (b) during the year 1932?
2.	What were the dates and numbers of
orders in council authorizing the said advances, and amount covered by each such order in council?	_	.
3.	How much has been repaid on the said advances ?


Edgar Nelson Rhodes: 1 and 2. Loans to Alberta for relief works and direct relief in 1931 and 1932 were as follows:
Purpose of loan
Provincial	and/or	municipal	share	public
works.
Provincial	and/or	municipal	share	public
works.
Provincial	and/or	municipal	share	public
works.
For loans to municipalities.
Provincial	and/or	municipal	share	public
works.


FEDERAL LOANS TO SASKATCHEWAN-MUNICIPAL LOANS
Mr. POWER:: 1. What amounts were advanced by the Dominion government by way of loan to enable the province of Saskatchewan to loan to municipalities in order that their share of works relief or direct relief may he paid (a) during the year 1931?	(b) during the year
1932?
Date and No. of	Amount
order in council	of loan,
Nov. 30,	1931-P.C.	2992	
$500,000	00Apr. 25,	1932-P.C.	922	
500,000	00Aug. 17,	1932-P.C.	1827	
646,962	043.	Nil.2.	What were the dates and numbers of orders in council authorizing the said advances, and amount covered by each such order in council?3.	How much has been repaid on the said advances?


Edgar Nelson Rhodes: 1 and 2. Loans to Saskatchewan for relief works and direct relief in 1931 and 1932 were as follows (excluding relief administered by Saskatchewan relief commission.):
Purpose of loan
Provincial and/or municipal share public work.
Provincial and/or municipal share public work.
Municipalities' share public works.

Questions


FEDERAL LOANS TO BRITISH COLUMBIA- MUNICIPAL LOANS
Mr. POWER:: 1. What amounts were advanced by the Dominion government by way of loan to enable the province of British Columbia to loan to municipalities in order that their share of works relief or direct relief may be paid (a) during the year 1931;	(b) during the year
1932?
Date and No. -of	Amount
order in council	of loan
Nov. 30, 1931-P.C. 2993	S 500,000
Feb. 20, 1932-P.C. 399	 500,000
Feb. 29, 1932-PjC. 479	 112,500
Apr. 14, 1932-P.C. 849	 500,000
July 28, 1932-P.C. 1703	 2,000,000
Oat. 28, 1932-P.C. 2406	 150,000
2.	What were the dates and numbers of orders in council authorizing the said advances, and amount covered by each such order in council ?
3.	How much has been repaid on the said advances?


Edgar Nelson Rhodes: 1 and 2. Loans to British Columbia for relief works and direct relief in 1931 and 1932, were as follows:
Purpose of loan
Provincial	and/or	municipal	share	public
works.
Provincial	and/or	municipal	share	public
works.
Provincial share-relief camps.
Provincial	and/or	municipal	share	public
works.
Provincial	and/or	municipal	share	public
works and direct relief.
Municipal direct relief.
3. 8243,909.49 by credits applied in respect of dominion's share.


FEDERAL LOANS TO MANITOBA-MUNICIPAL LOANS
Mr. POWER:: 1.	What amounts were advanced by the Dominion government by way of loan to enable the province of Manitoba to loan to municipalities in order that their share of works relief or direct relief may be paid (a) during the year 1931; (b) during the year 1932?
2.	What were the dates and numbers of orders in council authorizing the said advances.
Date and No. of	Amount
order in council	of loan
Nov. 30, 1931-P.C.	2990	$500,000	00Feb. 18, 1932-P.C.	361	
500,000	00Feb. 23, 1932-P.C.	411	
794,733	25Apr 7, 1932-P.C.	785	
262,828	30Apr. 22, 1932-P.C.	911	
500,000	00Apr. 30, 1932-P.C.	1025	
469,752	05May 26, 1932-P.C.	1243	
500,000	00Aug. 15, 1932-P.C.	1813	500,000	00Oct. 20, 1932-P.C.	2335	
300,000	00
3. Nil.
and amount covered by each such order in council ?
3.	How much has been repaid on the said advances ?


Edgar Nelson Rhodes: 1 and 2. Loans to Manitoba for relief works
and direct follows:	relief in 1931 and Purpose of loan	1932,	were asProvincial works.	and/or	municipal	share	publicProvincial works.	and/or	municipal	share	publicProvincial relief.	and/or	municipal	share	directProvincial relief.	and/or	municipal	share	directProvincial works.	and/or	municipal	share	publicProvincial relief.	and/or	municipal	share	directProvincial works.	and/or	municipal	share	publicProvincial works.	and/or	municipal	share	publicProvincial works.	and/or	municipal	share	public
Questions


BEAUHARNOIS POWER PROJECT-REFINANCING
Mr. GARLAND (Bow River):: 1.	In respect of the recent offer of the Montreal Light, Heat and Power Consolidated for the refinancing of the Beauharnois enterprise-has the Dominion government consented to permit its claim in respect of its guarantee of advances to the above enterprise to remain in abeyance?
2.	In the event of an alternative offer being made on behalf of the $30,000,000 debenture holders would the government be willing to consider permitting its said claim to remain in abeyance in respect to such offer?


Mr. BENNETT:: 1.	The holders of the $30,000,000 6 per cent collateral trust bonds of the Beauharnois Light, Heat and Power Company held a meeting called in accordance with the provisions of the trust mortgage deed securing the said bonds, default having been made in the payment of the interest thereon, and elected a committee to deal with the situation. A further meeting of such bond holders will consider a plan prepared by the committee, which involves certain action being taken by the Dominion government if 'the plan is acceptable to the bond holders.
2.	The government is aware of no reason why any interested person might not submit a plan for reorganization of the company to the committee of the bond holders. In the event of any plan being submitted, it would be for the committee to consider what appropriate action should be taken, but the committee would undoubtedly ascertain the views of the government with respect to its guarantee. The committee of the bond holders is charged with the responsibility of dealing with the plans for reorganization of the enterprise, and not the government.


FEDERAL GOVERNMENT EXPENSES
Mr. TETREAULT:: 1.	What were the ordinary expenses of the federal government for the fiscal year 1929-30?
2.	What did such expenses for the fiscal year 1932-33 amount to?


Edgar Nelson Rhodes: 1 and 2. The figures are shown at pp. 3446-7 unrevised Hansard, March 21, 1933.


SASKATCHEWAN RELIEF COMMISSION-FEDERAL ADVANCES
Mr. POWER:: 1.	What is the amount of loans or advances made by the Dominion government to the Saskatchewan relief commission (a) for general purposes; (b) for purchase of seed grain, during the years 1931 and 1932?

2.	What were the dates and numbers of orders in council authorizing the said loans, or advances and amount covered by each such order in council?
3.	How much has been repaid on the said loans or advances?


Mr. RHODES:: 1.	Loans and advances to province of Saskatchewan for Saskatchewan relief commission: (a) $10,250,000; (b) $6,000,000 for seed grain and seeding operations.
2.	Date and Number of
Order in Council	Amount
Sept. 19, 1931-P.C. 2336	S 500.000
Oct.	23,	1931-P.C.	2675	
250,000Dec.	7,	1931-P.C.	3027	
500,000Dec.	16,	1931-P.C.	3115	
1,000,000Dec.	31,	1931-P.C.	3195	
750,000Jan.	21,	1932-P.C.	131	
750,000Feb.	3,	1932-P.C.	256	
500,000Feb.	18,	1932-P.C.	377	
500,000Feb.	29,	1932-P.C.	491	
500,000May	18,	1932-P.C.	1172	
1,500,000Aug.	17,	1932-P.C.	1828	
1,500,000July	14,	1932-P.C.	1613	
2,000,000Total (a)	$ 10,250,000April	6,	1932-P.C.	767	
2,000,000April	12,	1932-P.C.	789	
2.000,000April	28,	1932-P.C.	974..	.. ..	2,000,000Total (b)	$	6,000,0003.	When the accounts for the Dominion's share are settled, credits of approximately $10,000,000 will have been applied to loans and advances of $10,250,000 for general relief. The sum of $410,000 has been repaid in respect of loans for seed grain and seeding operations.


FEDERAL LOANS TO SASKATCHEWAN-INTEREST ON TREASURY BILLS
Mr. POWER:: 1.	What amounts were advanced or loaned by the Dominion government to cover accrued interest on treasury bills deposited as security for loans made to the province of Saskatchewan?
2. What were the dates and numbers of orders in council authorizing the said advances or loans and amount covered by each such order in council?
3. How much has been repaid on said advances or loans?


Mr. RHODES:: 1.	$387,375.34.
2.	Dec. 17, 1932, P.C. 2757, S179,9S9.73; Mar. 4, 1933, P.C. 385, $207,385.61.
3.	Nil.

Questions


FEDERAL LOANS TO SASKATCHEWAN-PUBLIC WORKS
Mr. POWER:: 1.	What is the amount of loans or advances made by the Dominion government to the government of the province of Saskatchewan to defray cost of approved public works payable by the province and/or to loan money to the municipalities in order that their share may be paid (a) during the year 1931; (b) during the year 1932?
2.	What were the dates and numbers of orders in council authorizing the said loans or advances and amount covered by each such order in council?
3.	How much has been repaid on the said loans or advances?


Edgar Nelson Rhodes: 1, 2 and 3. See answers to preceding enquiry re loans to Saskatchewan.


FEDERAL LOANS TO BRITISH COLUMBIA-PUBLIC WORKS
Mr. POWER:: 1.	What is the amount of loans or advances by the Dominion government to the government of the province of British Columbia to defray cost of approved public works payable by the province and/or to loan money to the municipalities in order that their share may be paid (a) during the year 1931; (b) during the year 1932?
2.	What were the dates and numbers of orders in council authorizing the said loans or advances and amount covered by each such order in council?
3.	How much has been repaid on the said loans or advances?


Edgar Nelson Rhodes: 1, 2 and 3. See answer to preceding enquiry re loans to British Columbia.


FEDERAL LOANS TO ALBERTA-PUBLIC WORKS
Mr. POWER:: 1.	WTiat is the amount of loans or advances by the Dominion government to the government of the province of Alberta to defray cost of approved public works payable by the province and/or to loan money to the municipalities in order that their share may be paid (a) during the year 1931; (b) during the year 1932?
2.	What were the dates and numbers of orders in council authorizing the said loans or advances and amount covered by each such order in council?
3.	Plow much has been repaid on the said loans or advances?


Edgar Nelson Rhodes: 1, 2 and 3. See answers to preceding enquiry re loans to Alberta.


FEDERAL LOANS TO MANITOBA-PUBLIC WORKS
Mr. POWER:: I. Wliat is the amount of loans or advances by the Dominion government to the government of the province of Manitoba to defray cost of 53719-244^
approved public works payable by the province and/or to loan money to the municipalities in order that their share may be paid (a) during the year 1931; (b) during the year 1932?
2.	What were the dates and numbers of orders in council authorizing the said loans or advances and amount covered by each such order in council?
3.	How much has been repaid on the said loans or advances?


Mr RHODES:: 1, 2 and 3. See answers to preceding enquiry re loans to Manitoba.


UNEMPLOYMENT RELIEF-UNDERTAKING 66-114
[Stage Direction]
Mr. LaRUE:
1.	Has the provincial government of Quebec submitted an account to the federal government in connection with undertaking No. 66-114 respecting works carried out under the federal unemployment relief scheme?
2.	If so, whait does the account amount to?
3.	Has the federal government paid this claim; if not why?
Wesley Ashton Gordon: (1)	Yes.
(2)	Schedule 66 approved under the Unemployment and Farm Relief Act, 1931, provides for provincial works to relieve unemployment in the following sections of the county of Matapedia :-
St. Tharsicius, Ste. Irene, St. Cleophas, Ste. Jeanne d'Arc, Ste. Paula, St-Zenon, Padoue, Albertville, Ste-Marguerite Marie, Lac au Saumon, Amqui; comprising clearing, grading, ditching, cutting lumber and building bridges and warehouses.
The above mentioned undertakings to be carried out by the Department of Colonization at a total expenditure of $41,000; the dominion proportion being 50 per cent, or $20,500.
The following accounts have been received to date and paid in respect to this schedule:-
Date	Cheque	Total	Dominionmailed	Expenditure	ProportionFeb.	25th/32	1,837 20	918 60Feb.	25th/32	1,003 64	501 82Apr.	15th/32	793 30	396 65Apr.	15th/32	1,913 25	956 62Apr.	15th/32	319 40	159 70Apr.	15th/32	357 90	178 95Apr.	18th/32	3,610 80	1,805 40Aug.	26th/32	1,183 38	591 69Dec.	19th/32	5,920 74	2,960 37Dec.	19th/32	5,898 97	2,949 48Dec.	19th/32	1,540 10	770 05Dec.	19th/32	1.909 97	954 98Dec.	19th/32	133 21	66 60Dec.	19th/32	453 78	226 89
Motions for Papers

Date Cheque	Total	Dominionmailed	Expenditure	ProportionDec.	19th/32	311 07	155 53Dec.	19th/32	4,8S5 29	2,442 64Dec.	19th/32	537 62	268 81Dec.	19th/32	1,498 00	749 00Dec.	19th/32	1,860 50	930 25Dec.	19th/32	394 00	197 00Mch.	6th/33	54 00	27 00Mch.	6th/33	273 70	136 85Mch.	23rd/33	268 12	134 06Mch.	23rd/33	275 10	137 55Mch.	23rd/33	31 02	15 51Mch.	23rd/33	163 03	81 51Mch.	23rd/33	12 01	6 00Mch.	23rd/33	48 60	24 30Mch.	23rd/33	40 66	20 32Totals	. $37,528 35	$18,764 13(3)	See reply to No. 2.


QUESTION PASSED AS ORDER FOR RETURN
Mr. GARDINER:: 1.	What amount of money was paid to the maritime provinces in compliance with the Duncan report?
2.	How was it divided?
3.	What w>as the amount paid as freight rates?
4.	How much has been paid as subsidies on freight to move coal from the maritime provinces?


Mr. CAHAN:: The return is tabled forthwith.


MOTIONS FOR PAPERS
Mr. RALSTON:: For a copy of all payrolls, accounts, vouchers and other documents, in connection with work on Little Brook breakwater in the summer of 1931.


BELLIVEAU'S COVE, DIGBY COUNTY, N.S., POSTMASTER
James Layton Ralston: For a copy of all letters, telegrams, correspondence and other documents, on the files of the Postmaster General and of the Civil Service Commission in respect of the vacancy for the postmastership of Belliveau's Cove, Digby county, and the appointment of Peter Theriault thereto.


BARRINGTON, N.S., MAIL COURIER
James Layton Ralston: For a copy of all correspondence, papers or other documents, since November 1, 1932, in connection with the service furnished by the
fMr. Gordon.]
mail courier between Barrington, East and West Barrington, Smithsville, Port Latour and Villagedale, in Shelburne county, including a petition of the residents of such districts together with all letters, memoranda, reports, papers and documents respecting the services referred to in said petition and any changes subsequently made therein.


BANANA IMPORTATIONS
Mr. TAYLOR:: For a copy of all letters, telegrams, memoranda, or communications of any kind, passing between any company, individual, or group of individuals, and the Department of National Revenue, or any department of the government; relating to shortage of banana importation from the West Indies between the dates of .June, 1932, and April 1, 1933, or advocating the abolition of the special tax of 50 cents per stem levied under the West Indies treaty.


FEDERAL LOANS TO SASKATCHEWAN-P.C. 3131
Mr. DUFF (for Mr. Power):: For a copy of all correspondence, memoranda, telegrams and other documents, exchanged between the Dominion government and/or any of the ministers thereof, and the government of the province of Saskatchewan and/or any of the ministers thereof, in connection with the loan to the said province of Saskatchewan of three million dollars for governmental services, authorized under P.C. 3131, dated December 17, 1931.
FEDERAL LOANS TO SASKATCHEWAN-P.C. 2757 Mr. DUFF (for Mr. Power):
For a copy of all correspondence, memoranda, telegrams and other documents, exchanged between the Dominion government and/or any of the ministers thereof, and the government of the province of Saskatchewan and/or any of the ministers thereof, in connection with the loan to the said province of Saskatchewan of $3,153,739.73 for governmental services, authorized under P.C. 2757, dated December 17, 1932.
FEDERAL LOANS TO SASKATCHEWAN-P.C. 2267 Mr. DUFF (for Mr. Power):
For a copy of all correspondence, memoranda, telegrams and other documents, exchanged between the Dominion government and/or any of the ministers thereof, and the government of the province of Saskatchewan and/or any of the ministers thereof, in connection with the loan to the said province of Saskatchewan of $1,500,000 for governmental services, authorized under P.C. 2267, dated October 13, 1932.


FEDERAL LOANS TO SASKATCHEWAN-P.C. 2336
William Duff: For a copy of all correspondence, memoranda, telegrams and other documents, exchanged between the Dominion government and/or any of the ministers thereof, and the government of the province of Saskatchewan and/or any of the ministers thereof, in connection with the loan to the said province of Saskatchewan of two million dollars for governmental services, authorized under P.C. 2336, dated September 19, 1931.

Post Office Act


FEDERAL LOANS TO SASKATCHEWAN
William Duff: For a copy of all correspondence, memodanda, telegrams and other documents, exchanged between the Dominion government and/or any of the ministers thereof, and the government of the province of Saskatchewan and/or any of the ministers thereof, in connection with the loan to the said province of Saskatchewan of two million dollars for governmental services, authorized under P.C. 2084, dated September 21, 1932.


CANADIAN BANK STATISTICS
Mr. COOTE:: For a return showing as at October 31st in each year from 1914 to 1932, inclusive:	(a)
total bank loans in Canada; (b) total bank deposits in Canada payable on demand; (c) total savings bank deposits in Canada; (d) Dominion, provincial, municipal and other securities held by chartered banks in Canada; (e) bank notes outstanding; (f) Dominion notes outstanding; (g) advances under the Finance Act; (h) amount of gold held by Dominion government.


NOTRE-DAME DU LAC-POSTMASTER
Mr. POULIOT:: For a copy of all correspondence, telegrams, petitions, reports, plans and other documents in the possession of and under the control of the government, with respect to the appointment of the postmaster at Notre-Dame du Lac, Quebec, and the change of location of said post office, since November 7, 1932.


GILBERT VIAU MAIL SORTER-MONTREAL
Jean-François Pouliot: For a copy of the first application to the Civil Service Commission of Gilbert Viau, at present final sorter in the Post Office Department in Montreal.


LA COURONNE, QUE.-POSTMASTER
Jean-François Pouliot: For a copy of all correspondence, telegrams, plans, reports and all other documents in the possession of the government, respecting the post office of La Couronne, county of Temis-eouata, since the month of August, 1930.


FINANCIAL ASSISTANCE TO EDMONTON AND CALGARY
William Duff: For a copy of order in council P.C. 1543 of July 6, 1932, providing for financial assistance to the extent of $500,000 of which $250,000 was to the city of Edmonton and $250,000 to the city of Calgary.


Edgar Nelson Rhodes: A few days ago I spoke to the hon. member and, as a matter of fact, supplied him with a copy of the order in council. I understood it was his intention, if I am not mistaken, to drop the order. In the meantime I ask that at least it should stand.


Pierre Édouard Blondin: Stands.


COATICOOK, QUE.-POSTMASTER
Jean-François Pouliot: For a copy of all correspondence, telegrams, reports, plans, sketches, petitions, lists of eligibles, recommendations and all other documents in the possession of the government and the Civil Service Commission, respecting the appointment of a postmaster at . Coaticook, province of Quebec, since the month of August,
1930.


Richard Bedford Bennett: Hon. members will observe that motion No. 15, refers to all the documents in possesion of the Civil Service Commission, and raises the old question as to the extent to which all these papers may be made available. No doubt some of them are privileged communications with various correspondents whose names they do not wish to disclose, concerning the habits and characters of those seeking employment.


Pierre Édouard Blondin: Shall the motion carry, with those reservations?


Richard Bedford Bennett: Yes.


Pierre Édouard Blondin: Carried, with reservations.


POST OFFICE ACT AMENDMENT
[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to amend the Post Office Act to provide that the advertising portion of newspapers and periodicals transmitted for a greater distance than forty miles from their place of publication, or of which the publication is of greater frequency than once a week, shall he subject to postage of two cents a pound where the space devoted to advertisements exceeds 20 per cent but does not exceed 30 per cent of the total space; of 3 cents a pound where such space exceeds 30 -per cent but does not exceed 50 per cent; and of 4 cents a pound where such space exceeds 50 per cent.
He said: His Excellency the Governor General in Council, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
Hon.E.N.RHODES (Minister of Finance): Mr. Speaker, the operation of the provisions of the Consolidated Revenue and Audit Act,
1931,	make it desirable, indeed necessary, that we should have interim supply. I therefore would ask the unanimous consent of the house to vote one-twelfth of supply. If that con-
3S84
Interim, Supply Bill
[Stage Direction]
sent be given it is of course distinctly understood that the reservations usual in such cases as to full rights of discussion shall be preserved to all members of the house.
William Lyon Mackenzie King: As far as the
official opposition is concerned, there is no objection to meeting the request of my hon. friend.
Mr. RHODES moved that the house go into committee of supply.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata):	Mr. Speaker, before you leave the
chair-


Edgar Nelson Rhodes: May I point out that we
can only proceed in this way by unanimous consent, otherwise the motion would not be made. That being so I 'hope my hon. friend will not embark on a discussion, which would be out of the ordinary course.


Jean-François Pouliot: My hon. friend the Minister of Finance will have unanimous consent. What I have to mention to the house is a very important matter, and it will be very short. This is the only opportunity I have to bring the matter before the house now.


Edgar Nelson Rhodes: Mr. Speaker, may I say
with all deference to my hon. friend that if he exercises his right the same right is open to every hon. member, and we therefore could not proceed by unanimous consent, which is the only method by which we can proceed. If my hon. friend objects to the motion I will withdraw it.


Jean-François Pouliot: I will tell my hon. friend that I do not wish to be unpleasant to him, therefore I will take the first opportunity to bring this matter before the house at another time; but I hope that on that occasion the government will be just as courteous as I am now.
Motion agreed to and the house went into committee of supply Mr. Hanson (York-Sun-bury) in the chair.


Edgar Nelson Rhodes: Resolved, that a sum not exceeding $16,220,422.36, being one-twelfth of the amount to be voted as set forth in the main estimates for the fiscal year ending 31st March, 1934, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending the 31st March, 1934.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in.


[Stage Direction]
Mr. RHODES moved that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. Hanson (York-Sunbury) in the chair.
Edgar Nelson Rhodes: Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending 31st March, 1934, the sum of $16,220,422.30 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolution reported, read the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 72, for granting to His Majesty certain sums of money for the public service for the financial year ending March 31, 1934.
Motion agreed to, bill read the first and second time, considered in committee, read the third time and passed.

Hon. R. J. MANION (Minister of Railways) :: Mr. Speaker, I should like the house to consent to advancing resolution 31 to the stage of getting the bill before the house, because it is a financial bill for the Canadian National Railways. When the bill reaches second reading it will be referred to the select standing committee on railways, so this is a formal matter.


William Lyon Mackenzie King: A special committee?


Robert James Manion: Yes. I move that the house go into committee to consider the following proposed resolution:
That it is expedient to bring in a measure to empower the Canadian National Railway Company to issue notes for a sum not exceeding $13,058,604.63 for refunding requirements and capital expenditures for the calendar year 1933, and to authorize the Minister of Finance, with the approval of the governor in council, to make loans on the security of such notes to an amount not exceeding the said sum; and to authorize the Minister of Finance, with the approval of the governor in council, to make temporary and accountable advances not exceeding in the aggregate $47,941,395.37 to meet the net income deficits occurring during the

The Budget-Mr. Macdougall
calendar year 1933, the total of such deficits as certified by auditors appointed to audit the accounts of the company, to be included in the estimates submitted to parliament at the first session following the close of the said calendar year.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Hanson (York-Sunbury) in the chair.
Resolution reported, read the second time and concurred in. Mr. Manion thereupon moved for leave to introduce Bill No. 73, respecting the Canadian National Railways and to authorize the provision of moneys to meet expenditures made and indebtedness incurred during the calendar year 1933 and to authorize His Majesty to make loans and advances to the Canadian National Railway Company.
Motion agreed to and bill read the first time.
Mr. MANION moved the second reading of the bill.
He said: If the house would give permission, Mr. Speaker, I would move that the bill now be given second reading and referred to the special committee on railways and shipping.
Motion agreed to; bill read the second time and referred to the special committee on railways and shipping owned, operated and controlled by the government.

[Stage Direction]
The house resumed from Wednesday, April 5, consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the amendment thereto of Mr. Ralston and the amendment to the amendment of Mr. Lucas.
Mr. ISAAC D. MACDOUGALL (Inverness): Mr. Speaker, before offering any comment on the budget or the criticism to which it has been subjected may I pause briefly to pay a humble meed of tribute and of praise to the memory of a personal friend, a fellow commoner from the maritime provinces who, since the beginning of this session, has passed on to that bourne from whence no traveller returns. The late Mr. Cormier, who all too briefly represented in this house the constituency of Restigouche-Madawaska, was in every sense of the word an educated, cultured, Christian gentleman. He exemplified in
private as in public life the highest and noblest traditions of the French Acadian race in Canada, a race whose unselfish sacrifices, indomitable courage and fortitude in the face of travail and adversity; whose respect for law and constituted authority, whose love of home, and abiding faith in a triune and eternal God combined to earn for it a distinctive place in the annals of maritime history. To that race, which through the passing of Mr. Cormier has lost a distinguished representative; to the electorate of Restigouche-Madawaska ; to the many friends of the deceased and especially to his immediate relatives, on this occasion I extend my sincer-est condolences.
Mr. Speaker, as a fellow Nova Scotian may I be permitted-if he can stand any more felicitations-to felicitate my hon. friend the Minister of Finance (Mr. Rhodes) on the presentation of his second budget to the parliament of Canada. My hon. friend-and I wish he would not look at me at the moment, because I know 'his native modesty-has earned for himself an exalted place in Canadian public life. For some years he occupied the position which you, siir-and may I congratulate you also on having reached to-day the sixtieth anniversaa'y of your birth-occupy at the moment with such ability, impartiality and urbanity, the position of chief commoner of Canada. On two oooasions my hon. friend was selected by his fellow citizens of Nova Scotia to be premier of that province. When my hon. friend accepted the portfolio of finance he brought to the discharge of onerous public duties a keen sense of business acumen, a wide knowledge of men and affairs, natural intellectual endowments that are not surpassed in the House of Commons, 'high educational qualifications, and perhaps above all and more important than anything else an unsullied and irreproachable character. During the world depression and dislocation of to-day I think we can all agree, irrespective of party politics, that Canada is most fortunate in having the present Minister of Finance.
But let me have done with congratulations for the moment, Mr. Speaker; that is hardly a Highlander's role. I turn now to the speech of my hon. friend who so ably represents Shelburne-Yarmouth (Mr. Ralston), oveT the long distance telephone from Montreal. From the point of view of time my hon. friend's speech was the longest he has made in parliament; from the point of view of delivery it was the loudest, -and from the point of view of material it was by far the emptiest of his public addresses. From its exordium to the colourless and broken-backed amend-
The Budget-Mr. Macdougall
[Stage Direction]
menit with which it concluded there was not even the genesis of one constructive idea. But perhaps no one who has been in this house for the last few years would be surprised at that. For several years pa&t the sole role of our friends opposite has been to offer carping, destructive criticism. It would be just as futile, just as bootless, to expect anything of a constructive nature to emanate from the opposition benches as it would be to put a blind man in a dark room and expect him to discover a black cat that was not there.
My hon. friend, in the beginning of his speech, essayed the role of prophet, a role that sits rather heavily upon him, because as I understand in the last election he made some predictions that proved entirely unwarranted. In this role he predicted that there would be changes in the budget before it passed its final stages in parliament. May I tell him that there never was a budget presented to the parliament of Canada, either by a Liberal or by a Conservative government, in which material changes were not made before it passed'its final stages. But, sir, it does not lie in the mouth of any Liberal to talk about changes being made in the budget after its introduction. We all remember what happened in 1927. When the Liberal government of that day brought down its budget, one of the features of that budget was a reduction in the duty on automobiles. Shortly after the budget was presented to parliament a very large delegation of working men and also women engaged in the automobile manufacturing industry of Canada, stormed the citadel hill. The government of that day declared that they would stick to their guns, that nothing would be done to satisfy the automobile manufacturers. They paid no attention to that delegation of workmen, nor to other delegations that came to them. But when the automobible manufacturers themselves interviewed them, what happened? In the dead and darkness of the night-it must have been in the night because nothing was done that day-in the darkness of the night, I say, when evil deeds are wont to be perpetrated, my hon. friends sought and found a method of relief for the automobile manufacturers of Canada, and to the amazement of this country the very next day they reduced the sales tax on automobiles and completely wiped out the luxury tax, with the result that they put the manufacturers of automobiles in a more preferred position than they had been in before the Liberal party tinkered with the tariff at all. And if Dame Rumour be a wench of her word, as she sometimes is, in grateful

acknowledgment a couple of years later of this sneaking, contemptible, subterranean and typical Grit method of escape that was given to the automobile manufacturers of Canada by the then Liberal government, these same manufacturers pledged large sums to the campaign fund of the Liberal party in 1930.
I say therefore to my hon. friend from Shelbume-Yarmouth that it lies not in the mouth of any Liberal to talk about changes being made in the budget before it reaches its final stages in parliament. After assuming the role of prophet, my hon. friend went on to take the role of financial critic, and he criticized the government of the day because in its financial presentation it dealt with net debt and not with funded debt, forgetting, with that blissful forgetfulness of the Liberal party, that for nine years budgets were presented by the Liberal government and dealt solely and entirely with the net debt and not with the funded debt. The hon. gentleman also criticized the Minister of Finance for not laying aside a sinking fund. That is something that is becoming quite important to the Liberal party. In the days of buoyant revenues, before the world became enthralled in the present depression and when there was an opportunity to set aside a sinking fund, my hon. friends were in power for nine years and took no steps to set aside such a fund. But with that inconsistency which is the dominant characteristic of the Liberal party, the hon. gentleman censures the Minister of Finance for not setting aside a sinking fund in this period of depression.
The hon. member also referred to the fact that there were increases in the national debt, and it is true that there have been increases. But is there any man in Canada, who is not a fit and proper candidate for a lunatic asylum, who would think that there would be no increases in the national debt? This country, in common with every other country, had to meet an extraordinary situation and make extraordinary expenditures, and I do not hesitate to say that the increase in the national debt was justified. Those who argue otherwise must take the responsibility for saying that this government should refuse to discharge the fundamental right of a government in regard to the unemployed; they must say that the government should not have come to the rescue of those farmers in Saskatchewan who were suffering on account of circumstances over which they have no control. Extraordinary expenditures with respect to all these matters resulted in an increase in the national debt, but in every instance the increase was absolutely necessary.

The Budget-Mr. Macdougall
And this is true of every government that recognizes the functions and the duties of government. They could not have been avoided.
My 'hon. friend next dealt with the stabilization fund proposed in the budget. This he damned with faint praise. He spoke mostly in reference to the maritime provinces in dealing with this matter, but he forgets that the farmers in the maritimes are still producing pork, poultry and cattle, even though he has left, and this stabilization fund will be of great benefit to them. He dealt with the stabilization fund only as it applied to fish; and of course, in the political blindness of prejudice 'that obscured his otherwise clear vision, he said, "Why this refers to only $50,000 worth of fish." My hon. friend must surely know, as I believe he does, that the fish products of the Atlantic and Pacific coast affected by the stabilization fund, did not amount to $50,000 but over three million.
James Layton Ralston: My hon. friend will find
no such statement in my speech. He is quoting me and he must quote me correctly. There is no mention in my speech of $50,000.


Mr. MACDOUGALL:: I wish to do my hon. friend absolute justice-


James Layton Ralston: Do it.


Isaac Duncan MacDougall: -but I think he is a little bit afraid of justice in this matter. He reminds me of the story of the Irishman who appeared in a New York court. He broke down and someone said, "Don't carry on in that way; you will get justice here." The Irishman replied, "Begorra, that's the very thing I am afraid of." I will do my hon. friend justice; the amount of fish to which he referred was fresh fish, and he said $50,000-


James Layton Ralston: I must ask my hon.
friend to take that back; I did not say $50,000. My hon. friend must have been reading somebody else's speech.


Isaac Duncan MacDougall: $500,000.


James Layton Ralston: Nor $500,000.


Isaac Duncan MacDougall: Well, tell us what it was.


James Layton Ralston: I think I mentioned
$300,000 as the exports of fresh fish to Great Britain and about $6,000,000 to the United States. If that has any reference to $50,000 or $500,000, I do not see it.


Isaac Duncan MacDougall: My hon. friend
makes his position worse. He says it was only $300,000, but the trade returns absolutely contradict that statement. But the point is that when my hon. friend was reading the budget speech, there was not a period or a comma between fresh and canned fish, but there was a full stop after the word "fish." These are the returns which my hon. friend wants; I shall be glad to give them. The fresh fish and canned fish products that will be directly affected by the stabilization fund amount to $3,884,550. That is quite a different amount from $300,000. Those are the statistics of the Department of Fisheries and my hon. friend can verify them.
When I listened to my hon. friend making his statement I was not at all surprised that he was only about sixty-five per cent unfair to the present government. What I did wonder at is that he could be thirty per cenit fair to them. Knowing the deep dyed partisanship of my hon. friend, I could almost visualize the political labour pains he must have suffered in making a statement that was even thirty per cent fair to the present government in a matter redounding to its credit.
My hon. friend says that the right thing to do is to cancel the licences of the beam trawlers. For the purpose of being fair to him, let me go into the history of beam trawler operations in Nova Scotia. The first permit ever granted to a fish corporation to operate beam trawlers was granted by a Liberal government. To come nearer to the present time and to the time when my hon. friend joined the government in 1922, permits expired for the operation of beam trawlers in Nova Scotia and they were renewed by the King government for the benefit of the fish corporations. The permits expired again in 1923 and again they were renewed by the King government for the benefit of the fish corporations. The same thing happened in 1924 and 1925, but in 1926 my hon. friend, the present official critic of the opposition and the champion of the shore fishermen of Nova Scotia, entered this house as a member of the King government. The fishermen surely had a right to believe my hon. friend would make some protest against the renewal of permits, but the months wore on and the time came around in 1926 to renew the permits for beam trawlers. They were again renewed and the permits this time bore not only the imprimatur of the Prime Minister of that day but the nihil obstat of my hon. friend the member for Shelburne-Yarmouth, And to use his own words, women wept and the fishermen bowed their heads.
In 1927, 1928 and 1929, we had the same procedure, but in 1930, with a federal election on and after a report of a commission appointed to investigate the fisheries in the maritime provinces, steps were taken by order in council. I am sorry the leader of the
3S68
The Budget-Mr. Macdougall

opposition (Mr. Mackenzie King) is not in his seat at the moment because, when anything approaching constitutional matters arises in this house, particularly regarding the rights of parliament in matters of expenditure and taxation, he becomes very fidgety; he squirms and twists as if in some way afflicted with a malevolent form of constitutional "fleabitis."
But in 1930, what was done? A tax was levied by order in council on beam trawler caught fish. When my hon. friends levied that tax by order in council, and unconstitutionally, if I may use the term of my hon. friend in regard to matters of taxation, because they did not consult parliament, they knew the order in council would be annulled by the courts of the country. As a matter of fact, to my knowledge defeated Liberal candidates went to fish corporations in Nova Scotia and said: "Never mind, do not worry about this tax; it is only a little Grit stageplay; it will never be collected." It never was collected.


James Layton Ralston: If my hon. friend will allow me on a point of order, he says that this tax was not collected. He knows that it was. There was $5,000 collected which was paid back by this government. While I am on my feet, might I point out to my hon. friend that the order in council was not held unconstitutional. It was held that the act was not broad enough to cover it, but parliament had power to pass the act. May I also point out that the order in council was passed in October, 1929, and not in 1930.


Isaac Duncan MacDougall: That does not make any difference. My hon. friend is right about the date.


James Layton Ralston: The hon. member said it twice.


Isaac Duncan MacDougall: But I said it was not an act; it was an order in council. My hon. friend was a member of the government when it was passed.


James Layton Ralston: I said that.


Isaac Duncan MacDougall: A large fish corporation in Nova Scotia defied the government of this country and did not pay the tax. My hon. friend knows no attempt was made to collect the tax until ten days before the election when it became known in Nova Scotia that the National Fish Company were defying the government and Conservative speakers were making use of that. Then letters were written informing the fish corporations that they were expected to pay the tax. It is true that the Leonard Fisheries paid something in the neighbourhood of S5,000, but the National Fish Company paid nothing. When this gov-
	*
ernment came into power they took proceedings in the courts of this country, as my hon. friend should know, to collect and recover the amount owing. Mr. Neill R. McArthur, of Glace Bay, a very distinguished barrister of Nova Scotia, acted as the representative of the government, and the operators and owners of beam trawlers were represented by an equally able counsel in the person of Mr. C. J. Burchell, I believe a former law partner of the hon. member for Shelburne-Yarmouth.


James Layton Ralston: My hon. friend's information is wrong. Mr. N. W. Rowell represented the beam trawlers.


Isaac Duncan MacDougall: It was Mr. Rowell, was it?


James Layton Ralston: Why does my hon. friend make these statements?


Isaac Duncan MacDougall: The result was that this order in council was nullified in the courts of this country and payments were refunded to the Leonard Fisheries with the consequence that the National Fish Company had to pay nothing at all. If in the treatment of a public question there ever was as much persiflage, bluffing and hyprocrisy melted into one, it was the way in which the Liberal government, of which my hon. friend was a member, dealt with the beam trawler question in Nova Scotia.
But criticizing actions of hon. gentlemen opposite may not clear other hon. members from Nova Scotia who should fearlessly take their stand 'in regard to this matter. So far as I am concerned, I wish to congratulate the present government for taking what is at least a fearless, truthful, frank and open stand in declaring that its policy is to be gradual elimination of trawlers as a means of prosecuting the fishing industry in Nova Scotia.


James Layton Ralston: You are simply cutting out two of the three trawlers which are already tied up.


Isaac Duncan MacDougall: I know what they
are doing. They cut out two trawlers when my hon. friends cut out none at all. So far as I am concerned, as one representative from the province of Nova Scotia, I am unalterably opposed to the operation of any beam trawler, not simply one or four, in the fisheries of the province of Nova Scotia. I welcome this step which the government has taken as a step in the right direction, but so long as I am representing the people of my constituency, and I think that in this the hon. member for An-tigonish-Guysborough (Mr. Duff) will join with me-

The Budget-Mr. Macdougall


William Duff: I am not committing myself
just now.


Isaac Duncan MacDougall: That is tactful and rather good Liberal politics.


William Duff: I learned that from Sir Robert Borden.


Isaac Duncan MacDougall: He was a Liberal at one time until he saw the light. So far as I am concerned, Mr. Speaker, I believe that the beam trawler ought not to operate in competition with the shore and boat fishermen of the province of Nova Scotia. I am unalterably opposed to their operation, and I shall continue to support the fishermen of Nova Scotia who, through their cooperative unions, desire that beam trawlers shall not be allowed to operate in the fisheries of Nova Scotia. I congratulate the government on going as far as they did, and while they did not go as far as I would like to see them go, and I say that frankly, I trust that next year when additional representations are made, they will go a great deal further in this matter.
Here may I pay a tribute to the personal representative of Premier Harrington who so strongly urged upon the government not merely that the number of licences granted to beam trawlers should be reduced, but that they should not be allowed to operate at all in the province of Nova Scotia so far as the power of this government could prevent it. Those of us who believe that the beam trawler is furnishing competition which is unfair to the shore fishermen are prepared to carry the fight on until the beam trawler method of fishing is entirely suppressed, because in my judgment and in that of a great many more, in the judgment I believe of ten out of eleven fishermen in the province of Nova Scotia, it is a destructive method of prosecuting the fisheries.
Another matter was placed on the order paper which is of vital importance to the fishermen of the maritime provinces, and that was the resolution standing in the name of my good friend from Antigonish-Guysborough in reference to reciprocity. May I congratulate him upon placing that resolution on the order paper? He was fearless in his attitude towards reciprocity, but I noticed that he did not get very much support for his resolution from the Liberal party.


Ian Alistair Mackenzie: We have not had a chance yet.


Isaac Duncan MacDougall: The resolution was
adopted by the government. My hon. friend from Vancouver Centre (Mr. Mackenzie), though he is a very tall man, is always able to succeed in pulling himself up in sections to discuss almost any matter. I have seen no lack of jumping to his feet to discuss other matters. I have had many requests from Liberals in my constituency for the speech delivered on that occasion by the right hon. leader of the opposition on the subject of reciprocity, and I was very much pained to have to say in complying with those requests that it was the shortest speech that I had ever heard the right hon. gentleman make, because he said nothing.
Perhaps there is some little difficulty between the machine that controls the Liberal party in Halifax and my hon. friend from Antigonish-Guysborough, but I do not see why he should not have had support from his own party in this house for his resolution. Furthermore, the same resolution was introduced by a Liberal in the city of Halifax when nominating a Liberal candidate for the provincial house. I presume that he was a friend of my hon. friend from Antigonish-Guysborough, and he was made to withdraw his resolution.
In regard to reciprocity, I have always believed in a reciprocity treaty between Canada and the United States, but I make this statement, and there is not a man in public life who can deny it, that there never was any intention in 1911 on the part of the government of Canada of that day, or on the part of the United States, to enter into a reciprocity treaty. I do not hear that denied by any hon. member. If they attempted to deny it, I would quote the words of the Right Hon. W. S. Fielding who, speaking in this house in 1922, said that what was proposed:
-was not a treaty but a comprehensive agreement which was entered into in 1910-11 as the house will remember.
It was not a treaty.


James Layton Ralston: That is a fine distinction.


Isaac Duncan MacDougall: I am just going to
point out to my hon. friend, who may not be able to catch fine distinctions, what the fine distinction is. A comprehensive trade agreement can be cancelled overnight without notice being given by either of the contracting parties, but a treaty cannot be cancelled. It is for some specified time. Surely that, is not too fine a distinction for my hon. friend to catch.
I want to make this statement, although it may not find favour with hon. gentlemen opposite, that we are nearer to-day to a
The Budget-Mr. Macdougall

reciprocal trade treaty with the United States than we have been since 1911. Why was it that hon. gentlemen opposite who were in office in this country until 1930, and were so loud in their advocacy of reciprocity, never sought reciprocal trade arrangements with the United States. Time and time again on the floor of this house the leader of the party opposite was challenged in that regard, and he never committed himself as to whether he would ever seek, or whether he even desired, reciprocal trade arrangements with the United States-never.
And why is it that we could not have made a reciprocal trade treaty with the United States during the last ten years? The answer will be found in the trade returns of this country. Why should the American government enter into reciprocal trade arrangements with us when, under the weak-kneed trade policy of hon. gentlemen opposite, we had handed over to the Americans almost everything they wanted from the Canadian market without asking from them anything in return? Let me quote a few' figures for my hon. friend. In 1928, for example, under this wise fiscal policy of my hon. friends opposite, Canada imported from the United States 8825,651,549 worth of goods, and in 1929, the year before hon. gentlemen opposite went to the country and when they had not yet felt the full force of Beauharnois, we imported 8893,585,482 worth of American goods. We exported to the United States in 1928, 8491,566,297 worth of goods, and in 1929, $522,677,767. Do you think that the United States would ever seek a reciprocal trade treaty with us when they had a favourable trade balance to thia/t extent which was granted to them by the unwise fiscal policy of the previous administration? But to-day we have a party in power which has placed restrictions upon the flood of American goods entering Canada. To-day we have something to bargain with. That is the answ'er. As a result we are nearer to a reciprocal trade treaty with the United States than we have ever been in the last thirty years. But when that trade treaty is made-
I do not know about my hon. friends opposite, but I suppose that following their glorious record of inconsistency, they may hot support it-we on this side of the house, if that trade treaty does eventuate, have full confidence that the right hon. the Prime Minister will see that the position of Canada be safeguarded and that the treaty, if it is signed, will be mutually advantageous to Canada and the United States.

The hon. member for Shelburne-Yarmouth had something to say concerning the coal industry of the province of Nova Scotia, and in his remarks twitted the Minister of Mines (Mr. Gordon), suggesting that the government had not done all it should have done for that industry. In case there may be illusions in the minds of the people of Nova Scotia in connection with this matter, I shall spread on the records of Hansard exactly what the government has done for the coal industry and the people in the native province of my hon. friend and myself. Before giving the figures, I challenge the hon. member for Shelburne-Yarmouth, or any other hon. member, to dispute the statement that the Bennett government has done more for the coal mining industry of Nova Scotia than has any government we have had in Canada.


James Layton Ralston: I ask the hon. member
simply to look at the coal industry in Nova Scotia to-day.


Mr. SHORT:: Look at every other industry.


Mr. YOUNG:: Yes, look at all of them.


Isaac Duncan MacDougall: I make the statement that the present government has done more for the Nova Scotia coal industry than has any government which has held power since the Canadian union was consummated. I am not at all criticizing hon. members opposite for the little they did to assist the coal industry when they were in power. They made a step in the right direction, but that step was not sufficiently long.
Under order in council P.C. 539, of 1928- and I say to the hon. member for Shelburne-Yarmouth, quite frankly, that he had something to do with the passage of it-114,010 tons of coal were shipped from Nova Scotia under the assisted rates; the cost to the government of that day was $65,760, and the cost per ton for movement of the coal was 57-6 cents. In 1929, still under the administration of hon. members opposite, the tonnage of coal shipped from Nova Scotia under P.C. 539 was 304,744, the cost was $206,019.98 and the cost per ton 67-6 cents. Although during part of the year 1930 order in council No. 1300 applied, the tonnage from Nova Scotia under the assisted rates amounted to 371,800 tons, the cost was $214,142.58, and the cost per ton 57-7 cents. In 1931, under orders in council 539 and 1300, the tonnage shipped from Nova Scotia mines under the assisted rates was 403,976 tons, the cost to the government of Canada was $228,625.62, and the

The Budget-Mr. Kennedy (Peace River)
average cost per ton was 56-6 cents. In 1932, under the assisted rates granted by this government, the Nova Scotia coal operators shipped into central Canada 711,589 tons, the cost to the government of Canada was $538,110.16, and the average cost per ton was 75-6 cents.


Mr. D. M. KENNEDY (Peace River):: Mr. Speaker, the budget covers a wide field, involving many important changes. Having regard to the basic tariff and financial policies of the government, as indicated by their action since 1930, I certainly favour a number of these changes. I am prepared of course to support the tariff reductions, the income tax proposals, the wheat marketing assistance, and agricultural stabilization.
The hon. member for Shelburne-Yarmouth (Mr. Ralston) had something to say regarding the government's assistance to wheat marketing, and wound up with words to the effect that instead of gambling in wheat the government should take its loss, get out and be rid of the transaction. I do not believe the western farmers want the government to get out.


James Layton Ralston: The hon. member should read the whole passage.


Donald MacBeth Kennedy: Hon.
members must realize that there is a difference between what is known as gambling and assistance to provide a market.


James Layton Ralston: Hear, hear.


Donald MacBeth Kennedy: I say,
however, that if a farmer sells his wheat in the fall and buys options he may be accused of gambling, but in so doing he would be doing exactly the same thing as if he kept his wheat in a granary all winter, awaiting a favourable opportunity to haul it out. In effect he would be running exactly the same risk. For those reasons I believe the criticism is not well taken. Time will show, when the final figures are given to the house, to what extent the government is involved and to what extent it may lose money. But I do not believe it would be fair to say that, if the government loses some money in connection with the stabilization of the wheat market, it should be condemned. Undoubtedly the stabilization of the wheat market is of vastly greater importance to the three western provinces than
it is to the rest of 'Canada. However in ascertaining whether or not a certain policy is fair to the whole country one must consider all factors, one must balance all the policies of the government, and their advantages or disadvantages to every part of Canada.
There can be no doubt that tariff legislation is of more advantage to Ontario, Quebec and British Columbia than to the three prairie provinces. It is possible that when the maritime provinces advanced their claims for additional moneys and bonuses by way of freight rates, the western provinces may have felt that the maritimes had received special consideration. It is possible that the maritimes may feel that in connection with wheat stabilization the west is receiving special consideration. I say, however, that if we are going to be fair to every part of Canada we must consider not one policy, but the combination of all policies, and do our best to weigh their advantages and disadvantages. The business of the government and parliament is to see that so far as possible the advantages and disadvantages balance so that the various parts of Canada may share equally. I believe I would be stating the opinion of the maritimes as truly as the hon. member stated the opinions of western farmers if I were to say that the government should pull out and take its loss, so far as the maritimes are concerned. Were I to take that stand I would be as near the truth as was the hon. member when he said that the western farmers want the government to pull out of the wheat market altogether. Certainly that is not so, as far as the farmers in my constituency are concerned. I believe the stabilization fund will be of some advantage. There is no question that it was the loss due to exchange that put the cooperative pool practically out of the business of shipping cattle to the old country. Even if it were one hundred per cent true that the cost of paying this amount to those who undertake to export cattle, getting rid of the five per cent surplus, must be borne by the ninety-five per cent of the cattle sold in Canada, it would in my judgment still be a substantial advantage to the farmers of Canada. For it is a hopeless task to try to market ten head where are are only purchasers for nine. Whether or not some day, under conditions where supply and demand are just about equal, we will be able to work out something better in price control, this is the only thing possible to-day.
3S72	COMMONS
The Budget

Mr. Kennedy (Peace River)
I want to reier in passing to the question of the royal commission on banking. The Macmillan committee in the old land found its terms of reference, which appear to be fairly wide, were still not wide enough to enable them to deal with the issues they thought it necessary to deal with. I want to call attention to a few words in the concluding note of the full committee:
We have now completed all the recommendations which we are able to make for remedial action by the monetary machine itself. If our recommendations relating to international action are given effect, we should hope for a great improvement in the situation in due course. If, however, progress along these lines is delayed or if the action taken is insufficient, we believe that our own monetary authorities will not be able to remedy matters without assistance from changes in other non-monetary factors by which the volume of our domestic output and employment, and in particular our balance of trade, are also much influenced.
Several members of the committee made additional recommendations. I say that as a result of that experience we should see that the terms of reference to the banking commission do not confine the commission to inquiring into banking alone, but if certain changes in monetary policy are found desirable then the commission should have reasonable power to enable them to deal with these other matters as well, as far as they are directly connected with changes they may recommend in monetary policy.
Now, Mr. Speaker, I agree with a good deal that has been said about the budget. I have already stated that I am supporting certain matters initiated, and certain policies embodied in the budget. But it is a deflationist budget. That is made quite clear by certain words of the Minister of Finance (Mr. Rhodes) and on that ground we challenge it. It is said that Naaman the Syrian, captain of the hosts of the king of Syria was a great man with his master and honourable. He was also a mighty man in valour but he was a leper. The budget is a comprehensive review of Canada's financial situation, it proposes many changes of importance, some of them good and some not so good, but it is a deflationist budget. I do not agree with those who say that in Canada we are bound up altogether with world conditions and that we can do nothing by ourselves. I cannot agree that the policies of the government alone are entirely to blame for the present price levels and the present situation in Canada. But it is taking a hopeless position to say that because of world conditions we. can do nothing. It is just as foolish as to say that everything that has happened in Canada in the 
way of distress and unemployment is due to the policy of this government or any other government. We must consider what we can do on our own part with regard to money, with regard to tariffs, as well as what we can do in cooperation with others. And the test to be applied to any government is whether, of itself as a national government, it has taken action along the lines it should, and whether in addition to that it has offered cooperation along the lines best calculated to improve the world situation and the national situation as well.
I have said that the budget is based on deflation. This is clearly shown by the words of the Minister of Finance as reported at page 3208 of Hansard:
During the past year Canada was the only foreign country that was able to borrow in the public markets of the United States.
This enviable position has been and can be held only by the maintenance of sound financial and monetary policies. Much has been heard in recent months about inflation. Some of the advantages claimed for inflation may seem alluring to industries harassed by falling prices and declining turnover. But let the sponsors of inflation never forget that apart from the other difficulties and dangers involved in their program, one inevitable result would be a flight from our dollar, a withdrawal on a large scale of the capital invested by foreigners in this country in the form of securities and bank deposits. There are also to be considered internal reactions to any steps which might impair confidence in a country's currency. Against policies which might lead to such dangers, this government has resolutely set its face.
Now, Mr. Speaker, I think it can be said, if that defines the government's position correctly, that the government says we will have no inflation. They stand, for the present at least, by the deflation of recent years, which in three years since 1929, in credit and currency amounts to approximately $700,000,000. We have challenged that policy by an amendment, calling for controlled inflation. Those who stand by the gold basis, as far as it has been possible to stand by it-but I do not think we can take that position very seriously, since so many nations have abandoned the gold basis

but those who stand by it in theory seem to think it is a limitation on the amount of currency that may be. issued, and so prevents uncontrolled inflation. I do not think, however, that inflation and deflation are necessarily tied up with or free from the gold basis at all. I think you can have both on the gold basis, if any country to-day is on the gold basis. What is inflation and deflation? The best definition that I have come across is given by Doctor Marvin, the econo-

The Budget-Mr. Kennedy (Peace River)
mist of the Royal Bank. In a few sentences he gives us inflation, deflation and stabilization. This was an address delivered, I think, in Montreal about two years ago:
When credit was expanding at the same rate as production, the price level remained steady. It is true that the price level depends upon the ratio of credit and production. When credit expands excessively, prices rise, and when credit is unduly contracted, prices fall. When the volume of credit is kept proportionate to the volume of production, prices remain stable. These last three sentences constitute the whole story of what was wrong with the engine and tell how distribution can again be made to function.
Irving Fisher, in chapter III of his book on The Money Illusion, answers the question, Why does money fluctuate? He says:
The question now arises, Why does money thus change in its buying power? The answer, in brief, is "relative inflation and deflation." The emphasized word "relative" means inflation or deflation relative to the volume of trade in any given period.
There are two or three things that enter into the question of the variation in the purchasing power of money. When we say money we mean the money that circulates, whether based on bank credit, figures in bank books, actual currency, silver and copper coins; it is all money, all buying power. Inflation, then, is simply an increase in the volume of money, and the velocity of circulation as well, relative to the amount of goods and the state of trade in the country. Deflation is simply the opposite, and it is because we have had so much deflation since 1929 that we are calling for a controlled inflation at least back to the place we he'd, so far as credit was concerned, in 1929. For the moment I am not arguing that this was the only factor that helped break prices. It has been said that we have everything in Canada now that we had in 1929 except the flow of money, but that is not right. We have not the demand for wheat that existed before 1929, but simply because the world demand for wheat fell off I do not see that we should superimpose on the industrial structure of this country a ruinous policy of deflation, and thus intensify the depression. If our farmers were to take that position and stop raising the amount of wheat they have been raising what would happen? If our railways were allowed to cut off services what would happen? If our medical men cut down the service they give simply because they are not getting the returns they received previous to 1929 what would happen to the health of our people? If the lawyers took the same position what would be the result? Why should we not look for something in the nature of stabilization, when so many economists tell us that the volume of money in circulation determines what will be the price level? This is an important factor, though it does not determine it absolutely. Instead of a policy of deflation I think we should have had an attempt on the part of the banks to keep money in circulation.
What are the arguments against reasonable inflation? The Prime Minister (Mr. Bennett) stated in Toronto some time ago that those who were supporting inflation were calling for something like what happened in Germany during and after the war. There is no doubt that there are dangers in connection with inflation, but there are other and perhaps greater dangers in connection with deflation. We cannot get away from danger; we must try to adopt a reasonable course. My hon. friend the Minister of Finance, in his speech in London last December, pointed out that Canada should not depart from the position of sound money; he said that if our dollar were on a parity with the pound sterling for twelve months it would cost Canada approximately $150,000,000. The hon. gentleman was supported in that statement by Sir Thomas White, and a few days ago in Winnipeg we' had the statement by Mr. Jackson Dodds, manager of the Bank of Montreal. He held up some stamps that were taken off letters which came from Germany in 1923, at the height of inflation; he said we might expect to pay a good many dollars to send a letter around the country if we adopted a policy of inflation.
I contend, Mr. Speaker, that it is utterly ridiculous to argue that because Germany inflated in that way we should not reflate or inflate back to where we stood in this country in 1929 with regard to the volume of credit, without running the same risk. If we did that and we had the same fall in the dollar that took place in the mark in Germany, wheat would be worth $716 a bushel.


George Gibson Coote: It would not take long to
pay off the mortgage.


Donald MacBeth Kennedy: John
Maynard Keynes, in his book Monetary Reform, states that Germany's pre-war currency totalled six milliard gold marks, an average of about $25 per head. In 1920 it totalled eighty-one milliards, and by August of 1923 it had increased to 116 thousand milliards. Is it fair to say that because Germany did that in the years 1920 to 1923 we would do the same thing in Canada? Every nation inflated during the war; Canada, the United States and Great Britain, yet nearly every nation was back on the gold
3874	COMMONS
The Budget-Mr. Kennedy (Peace River)
standard by 1925. They did not allow it to go uncontrolled. What was the position of Germany? She started her inflation in earnest after she was defeated. I refer again to John Maynard Keynes, in his book, The Economic Consequences of the Peace:	All
her fleet was ceded to the allies, together with her overseas possessions and property. The allies reserved the right to retain and liquidate all property rights and interests belonging to and controlled by German nationals within the former German colonies. In Alsace-Lorraine the same provisions applied; the allies reserved the right to retain and liquidate all property rights and interests belonging to German nationals in their territory. Article 260 of the financial clauses provided that the reparation commission might demand within one year the expropriation of German nationals and the delivery to the commission of any right and interest of German nationals in any public utility in China, Turkey, Austria, Hungary and Bulgaria. Germany renounced her right to any participation in any financial or economic organization of an international character operating in any of the allied or associated states, in Austria, Hungary, Bulgaria, Turkey or any dependencies of those states, or in the former Russian empire. One-way tariffs were established between Germany and Alsace-Lorraine. Upper Silesia, with a plebiscite ceded to Poland 22 per cent of the German output of hard coal, and the Saar mines were ceded to France. It has been said that Germany was built on blood and iron. That is not so; Germany was built on coal and iron. The Rhine, Upper Silesia and the Saar made possible her steel, chemical and electrical industries. The total reparation bill was $40,000,000,000, and under these impossible terms she inflated and absolutely wiped out all her internal debt. She was the same credit risk after the war that a man would be who had been convicted of some heinous criminal offence and against whom a judgment had been issued for three or four times what he was worth, with practically all his civil rights taken from him. Would anyone say that Canada today could be compared to Germany at that time? That will not go; some better argument than that will have to be brought forward. We have inflated under the stress of war and other national circumstances, and we did not let it get out of hand. There is no reason in the world why we should not do what we can to raise the price level, through our monetary policy, by a reasonable inflation in Canada, though I do not say that this would cure all our troubles at once.

The next point, of course, is to what point we should inflate. When would you come to the point where you would stop inflation and, if possible, attempt to control any further increase in prices? I think Sir Josiah Stamp said that point would be somewhere around the average of 1924 to 1928. In any case it must be a place which will establish a reasonable parity between the earning power of the people, the expenses of government and the debts of the country, private, municipal, provincial and federal. What was wrong with the conditions existing in this country between 1924 and 1928? We were able to balance government budgets, no matter whether those governments were Liberal, Conservative or Farmer; we were able to advance reasonable public works, railways and municipal improvements, and I do not believe the creditor class suffered particularly because of the fact that the purchasing power of money was not what it is to-day. I do not think there is any question of the fact that during that period we had a reasonable parity between the general price level and our debts, the cost of government and so on. I submit therefore that that would be a reasonable point to aim at. I do not know whether experience will show that we can get there; we cannot get there so far as wheat is concerned. I am certain, however, that even if we cannot get there with regard to wheat, this country dare not liquidate on the basis of the present level of Wheat prices. The statesmen of Great Britain as well as of Canada have recognized that. We know that to bring other commodities down to the level of wheat prices, to bring wages down, would mean absolute ruin to the country. In Winnipeg the other day Jackson Dodds said that we should have to do that, among other things. He said:
"Before better times can come," he added, "competition in depreciation of currencies must cease; international debts must be adjusted, tariff barriers which have been erected beyond peace time needs must be lowered reciprocally, permitting of exchanges of goods, and payments in goods; government expenditures and taxes must be decreased; budgets must be balanced -which in our own case include federal, provincial and municipal-wages and prices must be brought into proper relationship again, so that prices received by farmers and other producers of raw materials may be brought into balance with prices of products of the factory, thus restoring activity and employment in cities and so increasing the demand for the products of the farm and factory, providing traffic for railways and ships. . .
Such a policy would greatly increase our debts.


An hon. MEMBER:: Hear, hear.

The Budget-Mr. Kennedy (Peace River)


Donald MacBeth Kennedy: My hon.
friend says "hear, hear." Well, the significant part of the debt of the country is not what the hon. member for Shelbume-Yarmouth pointed out, that there has been added to the national debt within the last three years or so about 8400,000,000. What is of significance is that all debts have been doubled-not the $400,000,000, but all debts-because of a drop in commodity prices; and if we must drag down labour, if we must drag down factory prices to the level of wheat prices as they are to-day, then we are also going to drag the creditors down without any question. It means therefore wholesale liquidation, and we cannot do it without increasing our debts in the first place. It is possible that if nothing can be done to increase the prices of primary products we shall be forced to do that, but it will mean a tremendous sacrifice and terrible hardships so far as the Canadian people are concerned.
The Prime Minister himself indicated this pretty well at the Imperial conference. I quote from Annex III, statement made before the committee on monetary and financial questions by the Prime Minister of Canada, the Right Hon. R. B. Bennett:
Canada, like all other countries, has suffered severely from the calamitous fall in commodity prices. Since August, 1929, our index of wholesale prices has fallen 32 per cent and is now only 4 per cent above the pre-war level. This means that the dollar has increased in purchasing power by 48 per cent. As a result of this rapid and persistent decline in the general price level and the inevitable disparities created between different kinds of prices, normal business relationships have been disrupted, profit margins have disapeared in many cases, enterprise has been discouraged, unemployment has steadily increased, the fiscal problems of all our public bodies have been greatly aggravated, and the burden of fixed charges is exerting an almost intolerable pressure upon some of the strategic elements in our national economy. . . . Interest charges represent the most important of the fixed or semi-rigid element in our cost structure. If prices remain on their present level, such charges will constitute an intolerable or almost intolerable burden in many cases. Even if it can be borne, the fortuitous gain to the creditor of 40 to 48 per cent in general purchasing power above what he contracted for appears to be a grave injustice.
I agree with that, but judging by some statements that have been made subsequently, I take it that the government has not thoroughly grasped the gravity of the injustice. There is one statement made by Jackson Dodds with which I heartily agree, because it is a satisfactory statement.


Mr. SPENCER:: Only one.


Donald MacBeth Kennedy: Just one.
He says:
"It is an elementary fact," he remarked, "that one must return whatever one borrows- whether it be a book, a lawn-mower, a guinea or an American dollar. No abstruse question of exchange enters into it so far as the lender is concerned: he merely wants back what he lent, plus the hire of interest according to agreement. Certainly we in Canada would not have accepted at par German marks. . .
Now that is exactly what we want, and it is because we believe that deflation in Canada has made it impossible to pay back the kind of dollars we borrowed that we want inflation. We do not borrow dollars to eat; we borrow dollars to buy food, clothing, lumber and so on, and other necessaries of life. A reasonably honest dollar, a sound dollar, is one which you can borrow at the beginning of the year and repay at the end of the year, being sure that its purchasing power will remain the same or reasonably the same; and it is because the present dollar does not do this that we are opposed to it.
What is sound money? I have been trying, in all the speeches I have read and in the various declarations that have been made in this house, to find out what sound money is. It is not the kind of money we have in Canada to-day, because the Prime Minister himself said that the present situation was a grave injustice to those who had borrowed money; and you cannot have a sound monetary policy nor sound social conditions based on a grave injustice. The only sound dollar is the dollar that is within reason stable in its purchasing power from year to year. We believe that at least a reasonable inflation will tend partly to bring that about-it will not do it alone, but it will tend to do it in part- and that is why we are asking for reasonable reflation or inflation.
Sound money is just a catchword. I remember I used to argue years ago with a socialist friend of mine in Alberta about socialism, and when I began to ask him questions he could not answer, he always ended up by saying, "It's the hell of a system we are living under." I could not answer that; it was not an argument.


An hon. MEMBER:: It was a description.


Donald MacBeth Kennedy: We find another catchword in the Acts of the Apostles. The silversmiths met together when they found that Paul was telling the people that the silver images they were making were not gods, and Demetrius got his followers together and said, "You had better come with me and we will protest against this heresy of Paul's. We are

ask, Mr. Speaker, if the problem was not manfully 'tackled and skilfully handled. There are those who complain to-day that the government has not healed this running sore. There are those who criticize the government because millions are still required each year by 'the government railways, but may I ask: What is it possible to do? Who has suggested any possible remedy which would enable the government to escape from the liability of its endorsement of the Canadian National bonds? Has the Canadian Pacific Railway ever offered to assume the liabilities of the Canadian National? Let us merge these railways; let us give them away; let us wash them into the sea, but the burden of $60,000,000 to $70,000,000 of interest due each year will remain. I have given no small amount of thought and no small amount of honest endeavour to the study of the problem. I fail to see how any action that the government might have taken in the last three years at the dictation or invitation of the most wise could have delivered this country from the burden which weighs upon it to-day. Ft is suggested by some that we might repudiate 'the obligation. Fortunately that suggestion is not very seriously taken, nor made by anybody who is very serious.
But, Mr. Speaker, I would like parliament and the country to realize that however, manfully and fearlessly the government might have wrestled with this problem, it could not have done away with the railway debt which is Canada's debt, assumed by the people of Canada. The only possibility of relief from this burden lies in increased revenue from the railways and increased revenue from the railways can only come with increased tonnage and increased business. I think, Mr. Speaker, that not only in this country but in all countries men of good will are seeking for that specific which will bring back business and bring back tonnage not only to our own railways but to the railway and other transportation facilities of the different countries of the world.
We hear a great deal in this house about banking and currency. I am not of those who are skilled in the arts of the economist. I listen in reverential awe every time that an economist tells us that we can make ourselves rich by writing promissory notes, and that it is now possible to lift oneself by his boot straps. I have but very scant faith in shortcuts back to prosperity. In my view the way will be long, those who travel it must know industry, frugality, possibly penury. The government is providing an opportunity to examine the monetary, banking and currency

questions. The bankers and all interested will have an opportunity to suggest any and all specifics which may possibly yield a remedy. I contend it is not quite fair to say that the government has been entirely supine, that it has been negligent of the requirements of the country or deaf to the prayers of any section.
What about the trade agreements? Were they not conceived in the highest patriotism? Was the opportunity for their perfection not brought about by skilful, courageous and constant negotiations? Have those trade agreements not yielded a return, or have they not justified the hope for permanent betterment which was incident to their signing?


Edward James Young: No.


Mr. HACKETT:: The hon. member says
no, and is entitled to his view. I think however he will agree at least that the majority in the house feel his decision has been taken a little too hastily. I for one believe that the faith, good will and spirit of sacrifice which characterized the signing of the agreements will not be entirely fruitless. I believe that the men who met in Ottawa, in an honest attempt to solve the difficulties of that portion of the world which they represent, came with a fund of information and experience, and an intent to deal fairly with all, which must bring good results.
There is one policy of the government which is bound to be of definite assistance: I refer to the back to the land movement. Many hon. members who have spoken concerning this movement have shown little faith. Only the other day the hon. member for Willow Bunch (Mr. Donnelly) said, "You cannot expect to make a farmer out of an artisan who is out of a job." He went on to point out that probably the agricultural population had greater grounds for complaint than had any other element in Canada. I ask the house to consider, for a moment, the trend of events in Canada during the last fifty years. Fifty years ago only eighteen per cent of our population lived in cities and towns. Thirty years ago only thirty-seven per cent had gone to the larger centres of population. But the census taken only a year ago shows that 5,572,000 Canadians were urban dwellers, whereas only 4,800,000 were on the soil. How long can this progression from the soil towards the city continue? Is it not evident that of necessity there will result an unbalance and disequilibrium which, as in all cases of lack of equilibrium, is bound to manifest itself in an upset. Is it possible that we can take away

The Budget-Mr. Hackett
from the land a greater and greater number of people, and still maintain the strength and the poise characterized by perfect equilibrium. It is true that life on the land has not always been attractive, and that to-day the prices of farm products are extremely low. Yet, should we not recall that regardless of the fact that there is no money, regardless of the fact that there is a fair amount of drudgery, -and then some-the population on the land is the only population in Canada which is certain of food, shelter, clothing and fuel. True, there have been areas, such as that in Saskatchewan, which through an unusual occurrence were denied any returns from their fields. That condition was dealt with in an unusual way. I submit however it is true that on the land there is shelter from the economic storms which is not found in the cities and towns. I do not suggest that these men should return to the land to make fortunes by selling vast crops in the world's exchanges, or that they should return to enable the manipulators to make fortunes, but that their return should be for the purpose of supporting themselves and their families with the food they can get from the land. The plight in which hundreds of thousands of Canadians find themselves to-day, having to depend upon sources other than their own earnings for the food necessary to keep body and soul together is devastating. There comes from the very acceptance of that type of support a disintegration in the fibre of a people which is regrettable, and which is bound to manifest itself in a weakened spirit in this and future generations. I submit that back to the land is the most hopeful outlet from this dismal position in which we find ourselves at present. We are now at the spring of the year, and I ask the government to encourage the provincial and civic authorities to help the many thousands of people in the cities who were raised on the land to get back to the land. It is not necessary to take them away to remote regions; there are numerous opportunities in proximity to the large centres for a man to cultivate ten or twenty acres and provide himself and his children with the necessaries of life. I thoroughly believe that by disembarrassing the cities in this way, relieving them of the intolerable burden that now rests upon them, much can be done to overcome the present depression. We find in the United States cities like Chicago and Detroite-unfor-tunately we have them within our own area- which are on the verge of bankruptcy. Some have even failed to meet their obligations, because of the money they have been forced to spend to provide food for their citizens. It may mean a return to a more frugal mode
of life, but what of that? It may mean a lesser margin for luxury, but what of that, when starvation seems to be the alternative?
I submit, Mr. Speaker, it is impossible for this country to continue much longer the generosity-that may be an improper word-of the dole that has been meted out for the last three or four years. It is beyond our resources; the substance is not there for it.
One other matter about which I should like to say a few words is expenditure. Many people wince to-day under the burden of taxation. Others find in a disinclination to pay taxes what they take to be the growing pains of statesmanship. They say, why should the government levy $70,000,000 additional taxes? Why does not the government stop spending, retrench to the extent of $70,000,000?
I have pointed out the futility of that suggestion with regard to the railways, but one sees in the press news items and editorials which take the view that increased taxation is not necessary, that the budget could be balanced by reducing expenditure. I think it well that the people should have these facts placed clearly before them. This year we have estimated that the cost of government will be $445,000,000. Of that sum $369,000,000 represents ordinary expenditure. Every penny of that amount, less $143,000,000, is a fixed charge, something that cannot be escaped, something that is nailed down. We find among the items which constitute this total $138,000,000 of interest charges. There is a deficit on the Canadian National Railways of $55,000,000; pensions and soldiers' care, $58,000,000; subsidies to provinces, $15,000,000; old age pensions, $12,000,000; unemployment relief, $35,000,000. We find that of the $143,000,000 which is controllable nearly the entire amount represents services. In the abstract everybody wants expenditure reduced in order that taxation may be reduced, but everybody does not seem to be aware that nearly that entire amount is spent in wages paid to somebody, and that when it is reduced-and it is being reduced by $14,000,000-somebody gets less wages or loses his job; and when somebody loses his job he is another candidate for the dole. These services are possibly wise, possibly useful; at any rate we are wedded to them, we want them, we complain if they are taken from us. Looking over some of the possibilities of curtailment-my hon. friends opposite and even my friends on this side will see that I have been indiscriminate in the selection-I find for instance that the Receiver General has an office in every one of the nine provinces. In Montreal his office is in the offices of the City and District Savings
The Budget-Mr. Hackett

Bank, who perform the service for $25,000 a year and lose money on it. Is it necessary that there be an office in each of the maritime provinces? Of course not; there is more business done in three weeks in the Montreal office than there is in three years, I was going to say, in the maritime provinces-


Some hon. MEMBERS:: Order.


John Thomas Hackett: But attempt to take away one of these offices, and you will be opposed with much vehemence by my hon. friends from the maritime provinces, on both sides of the house. And if one attempted the same thing in the prairie provinces the result would be similar. I merely take this as an example to show how difficult curtailment is, although it be necessary. Everyone knows that the estimates of the Department of Agriculture have suffered a considerable reduction: $2,792,000 have been taken from its estimates since 1930. We know7 that the department gives excellent service. Take the experimental farms; they are useful, well manned, economically run, but the question is, can we afford them? Yet try to close up one and find out what would be the attitude of the area it serves. The same is true in regard to forestry; both agriculture and forestry are essentially within the ambit of provincial activities, yet the federal government spends large sums of money in that work. If an, attempt were made to reduce those services I fear there would be much discontent.
Let us move to national defence. I dare say the number of units could be reduced without materially interfering with the efficiency of the service as a training or fighting agency, yet if either party attempted to curtail or restrict or do away with any of these units there would be much ado. Old age pensions and war pensions make heavy demands ipon us. We recall that a few years ago pensions were increased because of the increased cost of living. Now7 that the cost of living has fallen is it not possible to make a corresponding reduction in pensions? We all know that anything affecting the returned soldiers is an extremely difficult and delicate matter to deal with, yet I submit to that gallant body that someone must lead the way. Everyone wants reductions but no one wants to give up very much himself; he wants the reduction to be made at the expense of someone else. Bondholders are receiving 4| per cent, 5 per cent and 5i per cent to-day. They may not be anxious to take a lesser return, but it may be necessary for them to do so at an early date.
Much has been said about the tax on sugar.
It is unfortunate that a commodity so univers-(Mr. Hackett.]
ally used and so vitally necessary should be taxed, yet I think there are possibilities of good even in this tax. I would suggest to the government that they cause to be printed small tags indicating that this tax is to be used in aid of the Canadian National Railways, let us say; one of these tags might be attached to each package of sugar so that the individual buying the sugar would realize that the government is not a beneficent Santa Claus but that expenditures made by the government must be met by taxation.
I am one of those, Mr. Speaker, who believe that our government-and I say this without regard to party-has followed a protective, paternal, socialistic theory which seems to permeate the whole administrative fabric. Unless we are w'illing to turn sharply to the right we will find that our charges will continue to increase. Every politician knows before he is out of his nonage that it is impossible to cut sheer across either the history or the habits of a people and start afresh from a clean edge, but I submit that unless the people of Canada are willing to depart from the principles of socialism which they have introduced into their government by socializing their means of transportation, their means of communication, their production of power and to some extent their methods of buying and dealing in certain commodities; unless they are willing to do something to resurrect the rugged individualism of the past, we can only expect to follow the course of those nations that have yielded to this insidious doctrine and that to-day are under the control of dictators. If our people can be made to realize that services must be paid for, and that the people must pay for them, they may be willing to yield up in aid of economy a good many of the excellent services which are being lavished upon them at the present time, not because those services are not well administered, not because they do not add much to the ease of life, but because at the present time the Canadian people cannot afford them.


Mr. CHARLES BELEC (Pontiac):: Mr. Speaker, I feel it my duty to my constituents of the great county of Pontiac to give an account of my stewardship. First I should like to congratulate the Minister of Finance (Mr. Rhodes) on the exceedingly able manner in which he presented his budget to this house on March 21. I am strongly in favour of that budget and of the policies of the right hon. Prime Minister (Mr. Bennett), whose courage and ability have done much to see Canada through this time of crisis.

The Budget-Mr. Belec
The county of Pontiac, Mr. Speaker, is one of the largest counties in Quebec, if not in Canada. It is rich in minerals, water power, timber and agricultural products, and particularly in red blooded Canadianism. We have the sturdy sons and graceful daughters of those brave pioneers who did so much to build up our country. With such worthy, true citizens I believe we need have no fear for the future, because in the past few years we have overcome obstacles greater than ever confronted us before.
I have such a diversified county to represent, Mr. Speaker, that I must divide my speech into two parts; first I will deal with the mines and then I will have a word to say with regard to agriculture. First, however, I should like to say that in my opinion the coming year will see heavy orders for lumber placed in Canada by Great Britain. Russia has been supplying Great Britain's wants to our disadvantage, but I have reason to believe that this condition will not exist much longer. Already the agreements arrived at here in Ottawa are building up our trade, especially in agricultural products.
There are two matters of wide interest to my constituents which I should like to discuss at this stage of my remarks, and first I should like to refer to the highway between Sheen-boro and the Timiskaming district. I was in hopes that the provincial government would take advantage of the Dominion unemployment relief scheme to build up this highway. It would afford employment to a good many and open up a large forest and lake region, establishing communication between old Pontiac and Timiskaming. It would shorten the travelling distance between these two points by many miles and our people would not have to leave their own county to make the trip. Then in regard to the back to the land movement, Mr. Speaker, I want to say that I was amazed when I listened to the speech delivered by my hon. friend for Temiscouata (Mr. Pouliot) with respect to the back to the land settlers. I have received many letters from settlers stating that they are well pleased with the treatment they received and are now receiving. In Riviere Solitaire, Lonely River, region over 400 families settled there since early last spring. They have a parish priest, a hospital with good equipment, and two post offices are to be established shortly. I visited that region, Mr. Speaker, long before there were any settlers, and I was amazed to see the large tract of land, thousands of acres, and if it were cleared it would make the best farming section in the province of Quebec.
I want to tell the house that I have the biggest county in Canada. I visited every corner of it last summer and I was glad to go to the mining section where there is no depression. Quebec's gold production-all in the county of Pontiac, amounted to 401,105 fine ounces last year. This was an increase of 34 per cent over 1931. The Noranda copper mine is the large producer, and the Siscoe, Granada and the O'Brien Cadillac all showed an improvement in output last year. In addition, considerable active prospecting was carried on, and at the Beattie property a large low-grade gold mine will commence production early in 1933; an 800-ton mill was completed, and low cost of operation is expected.
Last, year, as I have indicated, the production of gold in Pontiac county totalled 401,105 fine ounces valued at 88,291,576. In 1931, the gold produced amounted to 300,075 fine ounces valued at 86,203.101. So you see, Mr. Speaker, that our great Noranda and other mines are increasing their output and doing much to relieve unemployment and bring about better conditions. Our mines have shown the ability to survive the worldwide economic crisis and great credit is reflected upon the management and employees of the mines for their successful work. In total value of output mining is exceeded only by agriculture and forestry, but our mines in Pontiac, with their many requirements for all kinds of materials necessary to their successful operation, are playing an important part in the general industrial life in Canada.
In regard to agriculture, the different countries of the world, as well as the different classes of our business interests in Canada, to-day realize more than ever that the restoration of agricultural prosperity is the first and most essential national necessity. It has been said by many hon. members in this debate that agricultural soundness depends upon the more thorough development of the live stock industry as the basis. Our soils require and demand this change. The present government are true to their promise to encourage and foster the live stock industry. They have restored a better sire policy, have bonused better breeding stock so essential to improved grade, as well as lower cost of production. They also, upon assuming power, raised the duties on poultry, dairy and other live stock products. True, our prices have been low but we have no control of world prices; therefore when there is an exportable surplus of any product, the domestic price of such product is influenced by that price. On the other hand, of the products we can protect, the price has
The Budget-Mr. Belec

been maintained more nearly normal than in any other country under present conditions. For instance butter prices have been ait times 10 cents per pound better than in London, England, during recent months.
The Prime Minister has made great efforts since assuming power to secure our proper place in the British market, the greatest market in the world. The agricultural stabilization fund provided for in the present budget gives direct assistance to the farmers. It increases returns to the farmer by 12 per cent, placing the value of the English pound at $4.60 by direct payment from the treasury to make up for the difference between exchange value which is now $4.10. This, it is true, is on export products only, but the price of export surpluses naturally becomes home market prices. It will therefore increase the value of a 200 pound hog at the present exchange rate and market value by $1.50. It will therefore increase the farmer's returns on one load of 15 hogs more than an amount sufficient not only to pay his sugar tax, but to buy more sugar than the average family in Canada would use in twelve months.
This should also increase the price of poultry and agricultural products in view of the fact that considerable poultry has been at different seasons of the year exported to the United Kingdom. It will be recalled that last fall
1,000,000 pounds of poultry was exported to the British market bringing reasonably good returns to the producers. Had the agricultural stabilization plan been in effect at that time, it certainly would have increased the returns substantially. It should also prove to be of real value to those in the riding whom I have the honour to represent, who are interested in cheese manufacturing as we export a large amount of cheese annually and therefore it is one product that almost at all times is priced according to world conditions and overseas markets. It should raise the price of cheese at least one cent per pound or more, which after all is an important factor in view of the present dairy situation.
It is only by more milk being manufactured into cheese that the domestic butter prices can be improved. We hear a good deal with reference to the overproduction in milk producing districts even near the larger cities such as Toronto, Montreal and so forth. This oversupply invariably forces the price down to levels that are even below the cost of production. By the stabilization fund as presented by>
the government, our export market for cheese is bound to be improved, thereby consuming an increased volume of milk production.

It can readily be appreciated by at least everyone interested in the dairy business that it will have a stable influence on the domestic market. It will be noted that this fund is not applicable to butter exports, chiefly for the purpose of encouraging expansion of the cheese manufacturing business. It has been recognized for many years that Canada can make as fine cheese as is made in the world and has for forty years maintained an extensive foreign market for this production; while other countries with much more favourable climatic conditions can produce high grade butter more successfully and cheaper than we can in Canada. It would therefore appear that if Canada's exports of dairy products are to be increased it must be through an expansion in cheese manufacturing as well as such special products such as condensed milk and so forth. This must be done before any effort is made to develop our butter trade in other markets where that product meets with such strong competition. Every housewife in the rural districts of this country will realize that her returns in the dairy and poultry and products will be materially improved by this plan.
As a farmer I find myself in favour of the proposals made by the hon. member for Dufferin-Simcoe (Mr. Rowe) for the appointment of a live stock export products commission to encourage more careful and uniform grading and to ensure if possible a greater regularity of supply to overseas markets. The United Kingdom buys a large amount of foodstuffs and Canada should make every possible effort to secure markets which we lost through the carelessness of the former government.
I also believe lowering of interest rates would help agriculture a great deal. The farmer to-day is carrying a heavy burden of debt incurred when prices were much higher and is carrying a debt on those values at a very heavy rate of interest as well. I believe he is sharing an undue burden at the present time and that an equalization of conditions is absolutely essential in order that he may restore, for the common interest of all, prosperity that must by necessity be born in agriculture first.
At six o clock the house took recess.
After Recess
The house resumed at eight o'clock.


Henry Elvins Spencer: Mr. Speaker, in rising to take part in this debate I wish first of all to congratulate the Minister of Finance (Mr. Rhodes) on the very able

way in which he presented the country's budget. Finance ministers during the present crisis have a very difficult task to perform, and whether or not we agree with the finance minister's budget proposals and his system of taxation, we must all admit that he presented the budget in an admirable manner.
This year, as during the last three years, we have unfortunately a very large deficit. I do not think any member of the house expected anything else. I do not think the government could have expected anything else; for in spite of the fact that the world is passing through a very difficult period the government I believe could not have done more to aggravate the situation than they have done in the last three years. We have only to look at the enormous increases in the tariff to see how they have helped to crush the trade of this country and what a tremendous factor they have been in reducing our revenue from customs tariffs. We have only to look at the exchange dumping duties which were imposed by this government to see at once how they interfere with the 'business of importers. Further, we see an enormous curtailment in bank credit. Although that may not be the direct responsibility of the government, so long as they shelter the banks in the program which the latter are carrying out, the government must bear a certain share of the responsibility. Or we might look at the tremendous curtailment which has been made in public works in the last three years. That in itself has meant a reduction in purchasing power and increased difficulty in carrying on business, which must have diminished taxpaying power. In the last three years we have had to face an enormous increase in taxation. We cannot tax a people on the one hand, cancel money out of existence when it is paid, and then expect trade to grow. So, taken all in all, I do not think the government could have done much more than they have done by their policies in the last three years to curtail the purchasing power of the people, and for these reasons, Mr. Speaker, it was not surprising to find that we have a considerable deficit. The solution of the government for this problem is heavier taxation, on the one hand, and curtailment of public works on the other. They also give advice which was perfectly right a hundred and fifty years ago in an age of scarcity, when the people were advised to work longer hours and consume less, in other words produce more and consume less. But this is an age of plenty.
We have been given figures in a tremendous amount of detail in the budget so far as cash received and cash spent is concerned,
The Budget-Mr. Spencer
also cash borrowed and cash lent, but it seems to me that, in some respects, the budget could have been fuller than it was. For instance, we have never yet had a budget which presented to us -the total amount of national production and the total consumption in Canada in a single year. Why should we not in our total assets show the following three items: total production, total appreciation, total imports; and against them the total consumption, total depreciation, and total exports. If we had those items set out in the budget we should find that Canada, instead of being a poor country as so many people think, is not only a very rich country but is getting richer every year. Canada's assets in round figures are supposed to be 30 billions of dollar's. If an individual uses a good deal less of his income than he receives in the year he thinks he is fairly well off, and that is exactly the position of Canada, because she produces a great deal more every year than sine actually consumes. Therefore in a commodity and service sense, if not in the arbitrary financial sense, we are getting richer every year.
The Finance minister in his budget indicated a favourable trade 'balance of about
870,000,000, and he seemed to be pleased about it. Personally I think that if we took all the trade figures into consideration we should regret very much the questionable showing. For instance, while the government boasts of having a favourable trade balance of 870,000,000 we have to admit, on the other hand, that our export trade 'has suffered a drop to the tune of $250,000,000. If we go on at 'that rate it will be quite possible eventually to have a favourable trade balance of $100,000,000 and yet do much less trade than we have done even in the past year.
There are certain things in the budget which I am very glad indeed to support, and I express my appreciation for their inclusion. First of all I want to congratulate the government upon deciding to appoint a royal commission to look into the whole banking and financial situation. Such an inquiry is long overdue, but even at this late date, if the commission is appointed and it is, in the words of the Finance minister, "an unbiased one and above-suspicion commission," there is no reason why it should not be productive of enormous good, particularly if it reports before the Bank Act comes up for revision next year. I sincerely hope that when the personnel of the commission is being chosen, great care will be taken to select men of worldwide repute, -and I trust that the scope of the commission will be as wide as is necessary.
The Budget-Mr. Spencer

I also want to congratulate the Minister of Finance upon his reference to the necessity of cutting down debit and interest rates. While it was all right for him to make that statement and to hope that an improvement might be brought about, it is within the government's power to bring about decided reductions in bath debt and interest charges. I also wish to congratulate the government upon the effort that is at last being made to help out the agricultural situation by setting up an agricultural stabilization fund. Although it is something in the nature of a bonus, and although bonuses may not be right in principle, at the same time when other industries are getting help from the government in this and other ways, it is only fair that agriculture should also be considered. My criticism is that consideration was not given to agriculture just about three years earlier.
It will also be very reassuring to importers to know that they are going to get some relief through the partial elimination of the adverse exchange dumping duties. To have carried on an import business in Canada during the last two or three years must have put any business man to a very severe test. I appreciate that the income tax rates have been made a great deal steeper than they were. If I had any criticism at all it would be that larger incomes should have been taxed even to a greater extent. I have under my hand figures given me a few months ago by the Income Tax department showing incomes in the fiscal years 1927-28 and 1930-31. In the earlier year only 8,510 people paid taxes on incomes ranging between $10,000 and $50,000; in 1930-31 there were 12,848 paid on those incomes. In 1927-28 only 345 people paid taxes on incomes between $50,000 and $100,000, whereas in 1930-31 there were 470. While only 75 people in the earlier year paid taxes on incomes of $100,000 and over, in the later year there were 131. So hon. members will note that in every instance those large incomes increased despite the bad business period through which we have been passing.
There are certain unpleasant factors in the budget which I should like to draw to the attention of the Minister of Finance. I regret very much the general trend of deflation in which the government is persisting. Up to the present time it has cost us dearly enough, and if it continues it will cost us a great deal more. Personally I can see the ultimate possibility of a financial crash if this policy is not changed. We cannot tax ourselves into prosperity, and apparently that is what we are

trying to do. I should like to place on Hansard certain figures taken from the last three budgets. In 1931 we had a deficit of $94,500,000. The reply of the government was to increase taxation in the following year to an equal amount. In the year 1932. instead of balancing the budget, unfortunately we were $119,000,000 short, and again somewhat similar efforts were made to balance the budget. In that year there was increased taxation, and in one way and another $50,000,000 was lopped off the estimates for public works, etc. However, such measures have not had the desired effect, and we find that this year we are faced with a deficit, including that of the Canadian National Railways, of about $156,000,000. Again I say we cannot tax ourselves into prosperity.
I am sorry to see the sales tax placed on certain commodities which were previously exempt. This will be a consumers' tax and will be paid very largely by those who, to use the common phrase, are the least able to bear it. I have no doubt the Prime Minister (Mr. Bennett) has had voluminous correspondence regarding the tax on sugar. No doubt we all eat about the same amount of sugar, but some of us who may be in a better financial position may be able to afford it. There is no doubt it will hurt the poor householder, and particularly those in the country who can a considerable amount of wild fruit. The extra tax will make the canning more expensive.
The next item which I purpose to criticize I hope the government will see fit to change, namely that affecting soldiers' pensions. There may be a few ex-soldiers in the service who are receiving very large pensions and also a considerable allowance by way of a wage or salary. However, taking all in all, the proposed change would be a great hardship, and the amount of extra money collected would be infinitesimal as compared with the hardship involved. I am sorry, further, to see the tax on postal notes increased from one to three cents. No doubt this change will have the effect of driving business to the private banks. When we have an institution of our own such as the post office, in my view we should do everything possible to support it.
With regard to the criticism by the Minister of Finance concerning any suggestion of controlled inflation, I have a few comments to make. At the outset I shall quote from the Commercial Intelligence Journal of February 25, 1933, issued by the Department of Trade

The Budget-Mr. Spencer
and Commerce. At page 262 I find an article concerning Australia under the following head-note :
Improvement in Australian Financial Outlook, 1932
In part the article is as follows:
There are, however, some features apparent which distinctly point to the improvement, these including a return to stable government and a bountiful supply of cheap money. This latter has resulted in a readjustment of all capital values to a higher level, and the nominal increase in wealth and confidence is being reflected in a greater freedom of credit. The increasing confidence over the past few months has had a stimulating effect on public spending, and at the close of the year the sentiment was one of restrained optimism.
W ould that Canada could say the same thing! Unfortunately we are realizing that we are getting into a more critical position as the months go by. The government seems to have two pet obsessions, the one to balance the budget and the other to have a favourable trade balance. I should like to point out first that we could balance the budget, and continue to balance it, but at the cost of bringing the people to a very low standard of living; secondly, a favourable balance of trade means little if in the effort we lose trade valued at hundreds of millions of dollars.
The present situation in Canada is unique. A rich country, yet we are simply twiddling our thumbs, as it were, and not making use of our great natural advantages. I believe our inactivity lies in the fact that our problem is financial, and we have not tackled it from the proper angle. For instance, from Halifax to Vancouver we are badly in need of public works. At the same time there are in Canada about 800,000 unemployed, and we are continually adding to their ranks. Those men would be only too anxious to find employment on public works; instead they are kept on relief. Although we have plenty of food in the country we are feeding through public charities about 1,300,000 people. Again, our railway problem is caused not because people do not want to travel or send freight, but because they cannot afford to do either except to a very limited extent. We have the great industries of agriculture, forestry, fishing and manufacturing, with possibilities of tremendous production, yet all of them at the present time facing bankruptcy. We have much sickness in this country-in times of stress such as this there is always more than in normal times-yet many of our doctors and nurses have not enough to do, and many others are idle because people cannot pay. Never more
than at this time do we need life insurance, but during the period from 1930 to 1932 inclusive live insurance policies surrendered amounted to 8782,500,000, and insurance lapsed amounted to 81,224,000,000. These, Mr. Speaker, are serious figures. It only shows the extraordinary intensity of the financial crisis through which this country is passing, and which I think could be in large measure alleviated if the right thing were done. The Minister of Justice (Mr. Guthrie) the other day informed the house that during the last few' years the gaol population of this country has doubled. These problems will not be solved by the cutting of wages and salaries; that is no final solution. The only benefit is that in some instances there is an equality of sacrifice where high salaries are reduced; otherwise in the aggregate it is a bad thing, because it is cutting down purchasing power, the one thing we need more than anything else.	*
The reasons for the lack of purchasing power, I take it, are largely two. First is inequality of income. That is being adjusted to a certain extent, by income and other taxation. Secondly the government does not seem to appreciate the fact that the total amount of money paid out in the cost of producing goods is never equal to the price of the goods. That being so it is necessary to put new money into circulation, and that new money should not be put into circulation through credits in the shape of debt, but by drawing on the national credit of the country, and that without interest. New money to-day is put into circulation only for productive purposes. As long as that is done we will always have difficulty in getting rid of our so-called surplus goods. We have to find a means of putting new money into operation through the consumers' channel.
There are certain facts it seems to me that we should face, and face boldly. First we should recognize that we need more money, more purchasing power. Does the minister not realize that to-day bank loans are over
8600,000.000 less than they were four years ago? Does he realize what that means to business? We in this corner have advocated controlled inflation. Those who would criticize us leave out the "control;" that is their fault, not ours. We stand solidly for controlled inflation. We recommend trying to get to a definite agreed-upon price level, and putting new money into circulation until we get to that price level; we should then have controlled inflation.
The Budget-Mr. Spencer

We must find a means of getting the food to the people without its going through the channels of charity as it is doing to-day.
We have to find the means of putting people to work. Surely that is not beyond man's power and initiative; when there is so much to be done in every part of this country, surely it is not beyond our power to find ways and means of putting men to work.
Another problem we have to face, and I am glad to see it is mentioned in the budget speech, is the debt problem, whether private, municipal, provincial or federal. We cannot go on with a dear dollar and cheap goods and expect to meet these liabilities.
We have to recognize that we should show the same consideration to commodity wealth as we show to financial wealth. For instance, there is no reason why money put into a business that is for the benefit of the community should not be just as sacred as money put out at loan. The government Should alter its policy with regard to public works and taxes. It seems to me it is a wrong process to tax heavily when times are bad; taxation should be heavy when times are good and people have the money to pay. On the other hand public works should not be encouraged when times are good, when business is active, but should be carried on a large scale when times are bad and business generally is frozen. To-day general business is too nervous to start the wheels of progress moving; the government is the only body in a position to start the machinery, and if that were done' there is no doubt that general commerce would follow.
I would like to quote from Mr. V. C. Vickers who wrote a preface to Doctor Eisler's book, Stable Money. I may say that Mr. Vickers was a director of the Bank of England from 1910 to 1919. He said in part:
If for the time being we concentrated a little more upon assisting productive work, and a little less upon balancing the budget, it would, in the end, be better for us all. Our aim should be to go forward to a new economy, not back to the old regime.
I particularly commend that statement to the finance minister.
In closing I should like particularly to draw the government's attention to the following quotation, and to suggest that consideration of the principle stated therein is long over due:
A new orientation of national policy is needed to take care of the interests of the consumer, but there is no sign of it, nor likelihood of it, so long as the general belief is that prosperity at home is dependent upon exporting to markets abroad.


Mr. CHARLES BOURGEOIS (Three Rivers-St. Maurice):: Mr. Speaker, there are
a few .observations which I should like to make upon the budget. The previous speaker (Mr. Spencer) like others from the same side, has complained about the new taxes. It was not expected, sir, that the budget brought down by the hon. Minister of Finance (Mr. Rhodes) would be a pleasing or cheery document. At no time in the history of Canada has a government been faced with problems more gigantic, problems of greater difficulty. Governments the world over are grappling with tremendous financial difficulties, and all that could be expected was that the government would introduce drastic measures to meet the situation.
A cheering feature of the budget is the agricultural stabilization fund. From it there will be paid to exporters to the British market the difference between the price actually received for the pound sterling and $4.60. In other words, if the pound sterling falls below $4.60, as it is at present, the difference will be made up from the fund. This feature of the budget should be heartily commended; it will bring a higher price for the products the farmer exports, it will encourage production and will result in bringing wealth from outside to the agricultural districts in Canada. This in turn will stimulate trade and work to the good of all.
Last fall I was criticized by one hon. member for having made a promise during the by-election to the effect that a premium would be granted on cheese. The advantages which will result from the stabilization fund, in connection with milk products, doubtless are more than equivalent to those that would result from the granting of a premium, and I am sure the Minister of Agriculture (Mr. Weir) will not contradict me when I say that I repeatedly made pressing representations to him to have cheese included under that fund. This stabilization plan is more than a bonus on agricultural products exported to Great Britain; it is an attempt at equalization. During this depression agriculture has taken the hardest blow; farm products have shown the greatest shrinkage in value, and the farm income has been greatly reduced though the articles that must be purchased have been kept at high prices. This measure introduces some attempt at equalization, and I am sure there will be no complaints so long as all classes contribute equally during hard times and share equally in times of prosperity.
I sincerely regret the necessity of taking up the time of the house with personal matters, but I think it better that these points should be settled once and for all. Some hon. mem-

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bers who have not forgotten the defeat of their candidate in the Three Rivers-St. Maurice by-election have expressed certain innuendos with regard to promises made by the Minister of Marine (Mr. Duranleau) concerning the expenditure of some $700,000 on the Three Rivers wharf and $50,000 for a retaining wall along the river in the bay of Shawinigan and St. Boniface parishes; they say these promises have not been fulfilled. On October 25 the hon. member for St. Johns-Iberville (Mr. Rheaume) informed this house that it was his intention to ask some question in this connection. I expected that the hon. member would formulate his questions and have them included in the orders of the day, but so far as I know he has not done so as yet. For his information and for the information of his friends let me say that the sum of $700,000 has been spent by the government in the construction of a wharf at Three Rivers, and that the retaining wall which the inhabitants of the Bay of Shawinigan and St. Boniface parishes and the northern part of St. Maurice county have been requesting for the past twenty-two years is now an accomplished fact. While the main principle of the government's policy is the curtailing of expenses I dare, for it is my duty, to request the building of sheds on the new wharf.
From the Montreal press I understand that the government, by granting the land required, intends to assist in the construction of an additional elevator at Sorel. I do not wish to object to that proposition, but I would suggest that the elevator be erected at Three Rivers, because lake St. Peter constitutes an obstacle to navigation at Sorel. From early in December until late in April the Sorel harbour is blocked by the ice from lake St. Peter, so the harbour of Three Rivers has the advantage of having navigation open two months longer than is the case at Sorel. Three Rivers is a first class shipping port and is the centre for a considerable portion of the cattle shipping trade on the St. Lawrence river. I sincerely regret that the hon. member for Marquette (Mr. Mullins) is not in his seat, because I know he is an authority in this matter. I invite him to pay us a visit and look over our facilities. I am sure that he would corroborate my opinion. Our position, near lake St. Peter on the north shore of the St. Lawrence river and at the mouth of the St. Maurice, gives us the advantage of the natural deep water of the St. Lawrence while we also command the vast St. Maurice territory, which exceeds 17,000 square miles in area. Until a few years ago the city was forced to struggle
along with the development of its own harbour, but later this work was taken over by the federal government. Since that was done rapid progress has been made in the construction of a great permanent harbour, and at present Three Rivers boasts of the facilities it can offer all classes of inland and ocean going ships. An additional 3,600 feet of wharves has been completed and will be ready for use with the opening of navigation, and with the completion of the present building program Three Rivers will have a modern commodious harbour. Any person visiting Three Rivers will be convinced that we have the most advantageous spot for the purposes of the cattle shipping trade. From the city limits, extending westward along the St. Lawrence river for several miles, we have a magnificent tract of beautiful grazing land, as level as a prairie, and watered by several streams. This land is traversed by the main line of the Canadian Pacific Railway, with a branch line to deep water on the wharves, forming without exception the most desirable storage for cattle trade which can be possibly imagined.
I must not omit a reference to the supplies required for feeding cattle on the Atlantic voyage. At Three Rivers any required quantity of first class hay and oats can be purchased and at lower price than at other ports of the St. Lawrence. A certain quantity of live stock can also be purchased for shipment, in Three Rivers, and in the back country, which includes Shawinigan Falls and Grand'Mere; so that, in fact, all circumstances combine to facilitate in a remarkable degree this most important branch of the Canadian export trade at the port of Three Rivers.
I may add that several petitions have been circulated and signed throughout the Three Rivers district requesting that a measure should be adopted by the federal government in order that 'the Canadian National railway should reach Three Rivers at a point situated between Charette Mills or another point on the Canadian National railway. I submit that if, owing to the conditions now prevailing, this cannot be done, it would be possible to utilize the Canadian Pacific line from Les Piles. The only thing which would have to be done would be for the federal government to compel the Canadian Pacific Railway to allow the Canadian National Railways to use its line from Gameau to Three Rivers. It is to be noted that under section 16 of the Canadian National-Canadian Pacific Act as passed by the Senate on the 23rd of February

The Budget-Mr. Bourgeois
of this year, 1933, and now under consideration in the house, this scheme should be absolutely realizable.
In regard to the measures adopted by this government in connection with unemployment and farm relief, it may be said that on the whole, and taking into account the urgency of the situation, they were beneficial. But, without caking any blame on those who were charged with the distribution of the money voted by this parliament for relief purposes, one may ask whether with the experience acquired since that relief policy has begun, some modification should not be made to it. We are all agreed on the principle that people should go back to the land, provided there is a reasonable hope of their earning a living. But the first thing to ascertain would undoubtedly be: Have they the natural disposition and the experience required to earn their living in that way? Then consideration should be given to the place where these would-be farmers are sent. They should not, as it has been said, have to find their way through stumps and underbrush. In many parts of Canada, at least in the province of Quebec, there are farms, small farms which have been already under cultivation and which have for one reason or another, been abandoned, their owners having migrated to industrial centres in Canada or to the United States.
Without agreeing with my hon. friend from Temiscouaita (Mr. Pouliot) concerning the administration of the back to the land movement, as far as the province of Quebec is concerned, my suggestion would be that the money which the government intends to contribute in helping the unemployed should, first and principally, be used in attempting to place them on those farms where they would have far greater chances of making a living than by becoming settlers on undeveloped lands in remote regions.
While disclaiming any desire to be an alarmist, the hon. the Minister of Justice (Mr. Guthrie) has lately told this house that communistic activities are more acute and dangerous in this country than in many years past. The agents of Russia are busy fomenting troubles among the unemployed and the economically distressed. Reds are putting forth renewed efforts to undermine the loyalty of veterans' associations, it is said in Mail and Empire, April 4, 1933, by the familiar method of penetration from without. The returned men are invited to attack the authorities. The Minister of Justice is no doubt in possession of specific information from the veterans' association that overt acts are contemplated 
in certain populous centres. It is no doubt for such reasons that he asked for the means to increase the strength of the Royal Canadian Mounted Police in the event of possible emergency. The minister and the government will undoubtedly have the backing of every loyal person in adopting a policy of adequate preparedness. These are days of stress and strain, when the decent citizen looks to the powers that be for timely, efficient and effective protection. It is to be noted that at President Roosevelt's request the United States congress is putting through severe legislation to prevent any disloyal section of the United States press publishing information inimical to the national welfare. One may doubt whether section 98 of our criminal code is sufficient to repress seditious activities which, it is reasonable to surmise, are caused by communistic propaganda. It is known that there is among us a campaign conducted by communists who are not only advocating and diffusing ideas subversive of our economic ant' political institutions, but attacking religious ideals in general and overtly preaching atheism Their insults to Christianity and their blasphemies against God are so violent and so frequent that every Christian in this country must believe it is time such offences were repressed and punished by our criminal law and I submit that our criminal code should be amended accordingly.
In Montreal there are two so-called labour
universities, one on Craig street and the other on Montcalm street. At those places meetings are held every night attended by numerous unemployed workmen who are taught the pernicious doctrines of soviet Russia. In consequence attempts to burn, and actual burnings of churches in the province of Quebec have reached a point where surely the authorities would feel it necessary to take drastic action to discover what is beyond those dastardly acts. The utmost condemnation of such acts must be felt by all; indeed it is difficult to imagine any one capable of such conduct who is not out of his mind. It is well known that the psychology of the Russian five year plan, which was put into effect on October 21, 1928. is one of militant communism and militant atheism or aniti-religious propaganda.
The man's the gowd for a' that.
The refrain of Burns' immortal song is just the reverse of that theory. "There is a divine law of rewards. When the Creator gave us the earth with its fruitful soil," said William Jennings Bryan, " The sunshine with its warmth and the rains with their moisture," he proclaimed as clearly as if his voice had

The Budget-Mr. Bourgeois
thundered from the clouds:	Go, work, and
according to your industry and your intelligence, so shall be your reward." . Let us hope that our country, "this blessed country, this earth, this realm, this Canada," shall ever escape the danger of being ruled according to socialistic principles.
It is through immigration that the socialistic and communistic ideas may subvert our economic system. It was then wisely that on August 7, 1930, when he had been carried to power on the twenty-eighth of the preceding month the right hon. the Prime Minister caused an order in council to be adopted putting an immediate stop to immigration, and now every immigrant in order to be allowed to come and settle in this country is bound to go through the strictest immigration formalities. I dare say that on account of the splendid services he has rendered to this our country, the Prime Minister, like the celebrated English statesman, the Right Hon. Joseph Chamberlain, may rightly say:
I have faith in our race and in our nation.
I believe that all the forces and enthusiasm of which democracy alone is capable will complete and maintain that splendid edifice upon greatness, which, commenced under aristocratic auspices, has received in those later times its greatest extension, and that the fixity of purpose and strength of will which are necessary to this end will be supplied by that national patriotism which sustained the most strenuous efforts and made possible the greatest sacrifice.
In my opinion the Prime Minister is and will remain among us as a teacher of the will to do and a professor of energy. He should be valued not in the abstract, but with due regard to the conditions of the time. I have not in the least the desire to minimize the worth of any of our statesmen of by-gone years. A thorough Canadian should admire in their turn all those who have given to this country more comfort, more renown or glory. The Prime Minister has a very high conception of the functions of his office, and he fulfils them with a rare firmness. He has adopted a program and stuck to it in the extremely difficult circumstances which have existed since he has been the head of this government. All of us, barring all differences of opinion and party feelings, should honour him as a servant of our country who is doing his duty manfully at a time when the interest of Canada requires, of course, that every Canadian shall do his duty, but especially he who has in his hands the direction of our destinies.
The comments I have just made, Mr. Speaker, in connection with the budget and the criticisms I have ventured to develop with regard to socialism and communism may have been lengthy and somewhat tedious, but I
trust I shall be forgiven. Now, may I invite you, sir, and all the hon. members of the house to come to Three Rivers, the second oldest city of Canada, to participate in the festivities which will take place in July 1934, in commemoration of the third centenary of its foundation. While the city of Three Rivers has been and is still affected by the economic depression, perhaps in a larger measure than most other industrial centres; while its main industry, the pulp industry, lies in a state of quasistagnation and leaves a large number of men and women without employment, the citizens of Three Rivers, in a worthy spirit of optimism and because they have faith in the future, have come to the conclusion that, in spite of the difficulties and anxieties of the times, they should, as a matter of duty, celebrate this anniversary.
Our city, founded by Sieur de la Violette, has a history which reads both like a poem of heroism and an adventurous tale. For a hundred years Three Rivers was a most important post for the fur traders. It was also there that was created and developed, so to speak, that type of man so truly Canadian, the shantyman, who lived in the wide open spaces; who heard the tumultuous voices of the falls and impetuous torrents; who loved to seek the adventures and brave the dangers of lands beyond, and who filled the forest with the echoes of his songs. One may recall among the travellers or voyageurs from Three Rivers, such famous names as those of Nicolet, Godefroy, Chouart, of Hudson ibay fame, and Gaultier de Varennes, Sieur de la Yerendrye, of Rocky mountain fame, a great Canadian discoverer, and other names glorious and immortal in the annals of Canada.
It might also be recalled that Three Rivers was the cradle of metallurgy in Canada. For nearly a century and a half what is still known as Forges St. Maurice furnished the country with the iron products that it required. Of the three cities established on the shores of the St. Lawrence during the French regime, Three Rivers is decidedly not the most important, but while Quebec is the seat of the provincial legislature and Montreal the commercial metropolis, Three Rivers has doubtless charms of its own in which to glory on occasion.
To be particularly proud of such a city as Three Rivers, I am sure is permissible to one who was born there and who has the honour to represent that city in this parliament. This feeling on my part shall not, I am sure, astonish any of the members of this house who at the time of the Imperial conference in August, 1932, paid a visit to Three Rivers and observed its marvellous possibilities of development.
The Budget-Mr. Barrette


Mr. J. A. BARRETTE (Berthier-Maskin-onge) (Translation):: Mr. Speaker, the courage displayed by the hon. Minister of Finance (Mr. Rhodes), in bringing down a budget so burdened with taxation, is certainly worthy of praise. 1 especially wish to draw the attention of the house to the well established fact that alone the economic depression of which Canada, as well as the rest of the world, Buffers, has forced the government to resort to such a budget.
All members of this house realize, better than I can express it, the moral courage displayed by a government, when it risks its popularity by increasing the taxes which burden a nation. It is the outward and fearless expression of a government conscious of its duty. It is the accomplishment of this disagreeable duty which all statesmen have to face when the nation's credit, upon which the prosperity of the people depends, demands it.
Above all, the duty of our governments is to safeguard the nation's economic system, so rudely shaken by a world-wide depression and which the hon. member for Winnipeg North 'Centre (Mr. Woodsworth) would completely cast aside because as he states " the present economic system is responsible for the fact that a large number of people are out of work, and that both our natural resources and the social organization in this country serve the interests of a few and not those of the people, as a whole."
These two statements are baseless and the hon. member carefully avoided substantiating them. In what way is our present economic system responsible for the unemployment of so large a number of people? The hon. member does not state. This economic depression is world-wide, as the hon. member pointed out. Almost all countries differ in their economic systems and even Russia's economic regime was powerless against this depression. Ever since the world was created, at various periods, there have been economic crises in all countries and under all economic regimes. All forms of government were tried and none of them were able to stem the rising tide of economic crises.
This economic depression has been attributed to a thousand causes, however, there are plausible reasons to believe that the main cause is the lack of trust among nations as well as among individuals. It belongs to a moral order rather than to a material one. The world's wealth lias remained intact but badly distributed, and a large portion of it has remained unproductive owing to this lack of trust. It is clearly a trial sent by Heaven. The world was likewise upset when the erection of the tower of Babel was undertaken. 
The entire population of the world worked on the construction of this tower. It was the golden period of those past ages. All had work and cherished great hopes in the achievement of this gigantic tower which eventually would reach Heaven. Suddenly, God's hand smites the world. The workmen can no more understand one another as God has given them different languages. No more cooperation can exist. All their hopes have vanished. The tower remains unfinished, the people are left without work and they are forced to rest. That was, perhaps, the first world-wide economic depression. It must have been terrible since history has recorded the fact. It was certainly not the economic system of that period which was responsible for that crisis. It was a punishment inflicted upon human pride. Why not attribute the present crisis to the same cause?
Then, why assert that our natural resources and the social organization of the country's production are diverted to benefit a few? It is certainly an unfair statement. The hon. member for Winnipeg North Centre (Mr. Woodsworth) is fully aware that, if the working classes have no wrork, it is because those who had wealth have lost it and cannot carry on their industries. It is true that there are a few capitalists left and it is fortunate for us, and our few industries which remain. As long as there is a scarcity of wealthy people, we shall be deprived of industries and our people will be unemployed. Captains of industries are needed so that the people's savings may 'be invested and bear fruit. That is the work of financiers. The profits they make are infinitely small compared to the benefit the nation derives. During the periods of prosperity our working classes earned wages varying between $4 and $10 per day. Do you not think, sir, that our workmen would not gladly seethe fortunes lost by our financiers returned to them, so that they might again receive the wages they once earned and enjoy the prosperous days of the past.
Among all these wealthy men, there were certainly robbers and profiteers, but, even while robbing they contributed to the happiness of the people.
That the state should better control industrial trusts, I agree; but I do think it absurd to suppress them. The economic conquest is carried out just like a war is waged: with soldiers and generals. The soldiers are the workmen and the capitalists are the generals. The worker is therefore interested that his employer should make sufficient profits which will allow him to continue his operations, and, in fact, a good worker, is always glad to see his employer acquire wealth 'because he is

The Budget-Mr. Barrette
bound sooner or later to derive some benefit from it. Self-interest is one of the most potent incentives of life, it compels man to work and leads to achievement. It is the prime mover of human effort; it is the main incentive of production, trade, researches, discoveries, inventions and all human activities. All social organizations must tend to foster private initiative for the greatest welfare of the community and all political reforms tending to curtail the freedom of private individuals are directly opposed to human nature, destined to failure and lead to disorder. Human activities small and great, must be the result of private initiative to be beneficial.
If the lot of our people is to be improved, there is but one thing to do:	preach by
example and word the social and religious truths which alone can assure the progress and happiness of humanity. Preachers of religion should avoid persecuting, under the pretence of religion, their fellow-citizens; similarly those who are intent on reforming morals or society should avoid upsetting social institutions under pretence of social welfare and putting everything to the sword and fire. Let us point out to the people not only their rights but also their duties. Let us seek the means of being useful to others while serving our own interests. Let us seek the real aim of life. Let us remember that freedom is indispensable to attain moral progress, which, to be efficacious, must not be interfered with.
Mr. IRV'IXE: On a point of order, Mr. Speaker, I would draw your attention to the fact that there is not a quorum in the house.
The Clerk having counted the members:


The ACTING SPEAKER (Mr. Gagnon):: I am informed that there is a quorum.


Joseph Arthur Barrette: The Budget-Mr. Barrette

have but two. Since 1927, the Auditor General's report shows that we have received $17,000,000 less for public works than to what we are entitled.
More than $4,000,000,000 have been expended on railways while our share has been only $489,000,000, that is $600,000,000 less than our quota. All our ports are neglected. The Montreal harbour owes its development to its citizens. We are entitled to double the number of grain elevators and many more wharves. And to mention more recent events, how can one justify the discontinuance of a certain undertaking in connection with the Canadian National Railways, at Montreal, which has left an open and large excavation in the centre of the metropolis, thus depriving the Canadian National Railways of an economic terminus, when millions of dollars are expended to complete the doubtful enterprise at Fort Churchill. The St. Lawrence channel should have been dredged to a depth of 35 feet, on a width of 600 feet, at least 10 years ago.
I never neglect an opportunity of reminding the Prime Minister and his colleagues of these grievances. That is the only source of our quarrels. However, I note that the Prime Minister greatly sympathizes with me and I still have hope of convincing him to take this question of French Canada out of Canadian politics by granting us the fair quota to which we are entitled in the administration of this country, especially, as I expect that the next house will be composed of 60 French Canadian members from Quebec, elected to uphold the principles and ideas advocated by the Conservative party, which are the best and wisest for the government of our country, but, especially, in order to insist that our rights be entirely recognized. The new imposts may not be popular; the hon. members of the opposition may be piously listened to by the people in distress; the gloomy description of our situation may still further dishearten our citizens; utterances like those of the hon. member for Quebec East (Mr. Lapointe) may rouse the passions of the people; however, all these appeals to prejudice and human selfishness can in no way belittle the deep gratitude which our people feel toward the right hon. Prime Minister and his colleagues. A moral force emanates from their courageous attitude in facing the problems which rise daily and which they are busy in solving for the greatest welfare of our people.
Thus, further revenue had to be raised to consolidate our credit, assist those in want 
and help our people through this crisis; therefore, the government levies an impost on sugar, increases the income tax and taxes other articles.
With their good common sense the people fully understand that the moment taxes are levied, the rate payer's must be assessed. Bear in mind that the working or farming class does not form a caste apart and that it is as disagreeable to them to note that the village employer, merchant or banker is taxed; in either case, the workman or farmer knows that he will equally share in the distress or prosperity of his fellow citizens, whatever high position they may occupy. The people are fully aware that the present distress started higher up, by 'the financial losses made by the upper classes. The prosperity of a nation is closely linked to eveiy form of taxation, no matter how unequally distributed it may seem at first, it ends by reaching directly or indirectly all individuals.
All the government must decide is the amount necessary to administer the country's affairs. Should $300,000,000 be required, there will necessarily be $300,000,000 levied in taxes. If the government were in 'a position to know exactly .the salary or income of each individual, the problem of taxation would soon be solved, as all would be assessed in proportion to his resources. But, unfortunately, it is practically impossible to arrive at exact figures concerning the income of each individual. The government is therefore forced to resort to taxes easily collected which will bring in the revenue foreseen. The sugar tax will thus enrich the treasury by $20,000000. This anticipated amount is not gainsaid. We could analyse all taxes and always arrive at the same conclusion. We should avoid levying them, but, unfortunately, they are necessary. All we can request from the government is that it should only levy the taxes which really benefit the treasury.
I trust the hon. Minister of Finance will permit me to make a suggestion. Why not confine ourselves to customs duties and excise taxes, reducing the latter by 50 per cent, so as to foster domestic trade, and why not abolish all other imposts, such as taxes on corporations, sugar and sales tax, briefly, all existing taxes, and replace them by a 1 per cent tax on all bank transactions? The latter amounted to the enormous sum of $31,000,000,000 in 1931, and would have brought a revenue of $315,000,000 to the state. The collection of such a tax would not cost a cent to the government.

The Budget-Mr. Barrette
All banks would retain on. cheques presented at the teller's wicket, 1 per cent of the cheque amount, as a government tax. The majority of cheques are generally drawn to pay bills or debts, and the tax would fall on the payee, which after all would only amount to 1 per cent deducted on his bill. Thus, the poor man who has no banking account would be exempt from taxation, while those who have large banking accounts would be taxed according to their standing in the financial world. It would be a far more equitable tax than the income tax, because nobody could escape it. A 1 per cent surtax could be demanded for each endorser, other than the beneficiary, so as to avoid that the same cheque be used by various holders, thus avoiding the tax.
Note that with this proposed system, the 1 per cent tax is levied on the payee and not on the person who issues the cheque; there would be no inducement to pay with cash; and t'he banks, thereby, would have no fear of receiving less deposits.
Another advantage attached to this form of taxation would be that large companies as well as prominent financiers would be obliged to practically pay their taxes daily, thus their financial affairs would be better balanced than with the present system, which consists in paying at the end of the fiscal year an income tax, when, in the ordinary course of business, they have already invested their money in various enterprises and find it most difficult to raise the necessary cash to pay the enormous tax which the state collects each year, at a fixed period. And it is the moire burdensome because no person can figure out the amount he must pay before first making a complete survey of bis affairs; it is then too late to think of suppressing other expenses or industrial investments to meet this tax.
The uncertainty as to what the income tax will amount, necessarily makes capitalists very cautious and forces them to set aside, each year, much larger amounts than the tax calls for, because of the fear of making an error in their calculations; this actually deprives industry of a much larger amount than the tax collected.
The objections to the taxation which I suggest must necessarily be numerous, because all taxes meet with opposition. However, I wish to point out that this tax has a great redeeming quality; it will be economical and easy to collect. I believe that the cost of collecting the income tax and other excise 53719-246|
taxes, etc., amounts to more than $8,000,000 per year; while this 1 per cent impost would practically cost nothing to collect; because the channel through which the government gets its information already exists; the banks, at present, supply the government with monthly statements on cheques passing through their institutions. The government, therefore, has always this information on hand. The amount varies between $2,000,000,000 and $3,000,000,000 per month; thus banks when forwarding their monthly statements would simply have to inclose a cheque of 1 per cent on the amount mentioned in the statement. The government would, therefore, receive, monthly, a cheque varying between $20,000,000 and $30,000,000. I do not think that any doubt could foe cast on the honesty of our banking institutions as regards their statements; at all events, it would be an easy matter for a few government inspectors to check up the books of the various banks.
This tax is so simple in its practical application and so devoid of complication, compared to the existing tax system, that the government should have no hesitation in adopting it. What would be more simple than the collection of this tax; when a cheque is presented at the bank, the teller would only pay 90 per cent of the amount mentioned, and would debit the account of the client 100 per cent. At the end of each day, banks add the total amounts of cheques presented and debit their clients' accounts with said amounts. This operation would immediately indicate what amount is due to the government, namely 1 per cent of the total amount of the cheques. At the end of each month, banks would forward to the government a statement showing the total amount of the cheques debited to the accounts of their clients; this is actually in practice, it would therefore require no further outlay by the banks. In preparing their statement the banks would simply mention that they have deposited to the government's account 1 per cent of the total amount of cheques cashed. Is there any simpler system as regards tax collection? Compare this system with that of the present collection of the income tax, consider all the irregularities to which the latter system gives rise and the necessity the government is under of continuously checking up their employees and seeing that they carry out their duties, notwithstanding the always growing temptation of granting favours to their friends. There could be no possible favour granted to friends
3S94
The Budget-Mr. Barrette

with this 1 per cent tax, so that you suppress the factor of human weakness which should not be put to a test. All are aware of the corrupt practices of which the putting into force of the Volstead Act was the occasion in the United States; the Income Tax Act is similar to the Volstead Act and is destined sooner or later to corrupt officials and weaken the moral force of the whole administration. We should make a strong effort to abrogate all laws which are generally disregarded by the large majority of citizens. If by the [DOT]excessive severity of our laws, we tempt the great majority of our people to disregard them, we thereby tempt these same people to break other laws which are of a much higher moral order, the observance of which is absolutely necessary for the moral uplift of our people.
To foster agriculture I would suggest that the government erect cold storage plants, costing about $10,000 each in all farming counties. Farmers could then store their perishable products and banks could be authorized to loan to farmers 50 per cent of the par value of these products. In order to market these products abroad, I would suggest that the government promote a commercial organization of salesmen something similar to the organization existing in the past to induce immigrants to settle here. When we were endeavouring to increase the population of this country, we had immigration agents in all European centres liable to : send us immigrants. These agents were paid :a salary and a commission of so much per 'head. We thus succeeded in drawing thousands of immigrants to these shores, although such a policy cost us many millions of dollars.
I would suggest that the government appoint agents in all large European cities in a position to purchase our farm products. These agents would be supplied with a list of all our farm products in cold storage. In each respective country they could employ people who would visit the various retail stores offering for sale our farm products. Each day, orders thus obtained would be grouped to make up a complete cargo so that reasonable shipping rates could be had. In this way we would have abroad thousands of [DOT]clients, instead of being at the mercy of a few wholesale houses. It might be necessary to erect some cold storage plants in a few large European cities so as to always have on hand a surplus of our products for quick sales. The government could be reimbursed for this outlay by adding a small storage charge on the sale of these products.
JMr. Barrette.]
Is it not time, in order to further assist the Canadian farmer, that we should, as a measure of expediency, settle what is to be the minimum prices on farm products? For instance, why not decree that. the minimum price of butter should be 25 cents per pound and that of cheese 10 cents a pound. Such measures would tend to encourage the Canadian farmer to raise his spirit depressed by this crisis which has already lasted too long.
Other means of indirectly assisting the farming class and stemming unemployment would be to allow Canadian distillers to export alcohol, which would result in reopening again the doors of distilleries. WTe must bear in mind that a distillery of Melchers Gin standard, operated within the limits of my constituency, uses millions of bushels of Canadian grain, without mentioning the hand labour and by-products of these manufactures utilized by the farming class. Moreover, when the debate on the Robinson bill took place, it was proved, without a doubt, that alcohol exports brought into the treasury an amount varying between $15,000,000 and $20,000,000. Would not this amount have been sufficient to permit our government to carry on without levying a 2-cent tax on sugar? Such a measure would be well received by the people, because those who are making millions of dollars, to the detriment of our industries, have a questionable reputation, and to-day the United States doors are wide open to clandestine trade.
Other means of checking unemployment would be to further develop the Beauharnois power and St. Lawrence waterways. These two undertakings would give work to about forty or fifty thousand men and would completely relieve unemployment in this country. No doubt, sir, you are aware that between 1872 and 1878 there was a similar crisis in this country and that the construction of the Lachine canal contributed in a large measure to end that crisis.
Recently I received a letter from a Montreal friend who pointed out the necessity of curbing the electricity trust in Canada. The letter is as follows:
1280 Bernard Ave., Outremont,
March 28, 1933.
Mr. J. A. Barrette, M.P.,
Ottawa, Out.
Dear Sir,-
Pursuant to our conversation, I respectfully submit the following facts:
The Beauharnois Company such as organized, with its advantageous and permanent current contracts, provides for the payment of all interests on mortgages and bonds, and more-

The Budget-Mr. Picket
over raises the value of the common stock to many millions of dollars, why then should not the original bondholders receive for their investment 100 cents on the $1?
As it is believed in well informed quarters, if the Montreal Light, Heat and Power Company acquire the Beauharnois Company under the stipulations of reorganizing the company as stated, those who subscribed the original $30,000,000, will be deprived of $12,000,000. Should this scheme succeed, it will be a clever stock exchange transaction, without precedent, to cover the loss of $24,000,000 that the Montreal Light. Heat and Power Company sustained in their investments.
We feel confident that the leader of the government will not force the original bondholders to make such a gift to Mr. Holt and his silent associates, why not preferably make this gift to the people of Canada, if one absolutely wishes to be philanthropic.
With the slightest effort, the least gifted can calculate what the realizable profits the Beauharnois Company will make:
Contracts signed, 400,000 h.p. at
$15	$ 6,000,000
Contracts not yet signed, 100,000
h.p. at $15	 1,500,000

Yearly operation outlay	 1,000,000
Profits	$ 6,500,000
The total cost of the undertaking wall reach $70,000,000; at 6 per cent the interest will amount to $4,200,000; after the interest on mortgages have been earned and paid, if the Montreal Light, Heat and Power became the owners, their yearly profits would amount to $2,300,000; this would increase the value of the common shares to $40,000,000. Now that all the risks entailed by the project are things of the past, a shameful proposal is suggested to those who risked their hard earned money under the pretence that alone the Montreal Light. Heat and Power Company is unable to finance the Beauharnois Company. Will a theft of $12,000,000 be permitted openly, notwithstanding the protest of intelligent people who know these facts?
It is a cunning scheme; they wish to acquire, by every possible means at their disposal, a sound and splendid enterprise to cover the poor investments made by Mr. Holt.
If the Beauharnois project passes into the hands of the ogre, it will no more be the imposing and gigantic undertaking which was the pride ol its promoters and of all the citizens of this province. It will become a simple subsidiary enterprise paying its tribute as regularly as the hum of its turbines.
We have faith, hov'ever, that our representatives in parliament will act promptly and energetically.
Believe me, Sir,
Yours sincerely,
(Sgd.) J. C. Cote.
At present in the United States, commissions are being appointed to inquire into the financial operations of the banker Pierpont J. Morgan. The Canadian people would very

much like to get to the bottom of the financial operations of Sir Herbert Holt; perhaps, they might find out how the people were exploited and robbed and whether it is possible to make these large financiers stump up what they have robbed from the public.
You are no doubt aware, sir, that the Quebec government has just enacted a measure permitting the exportation of electricity. Could not the Dominion government disallow such an act, so as to conserve all our electrical energy to develop our own industries? It behooves the Prime Minister, who has the exceptional advantage of being supported by a large and united majority, who repose in him their trust, beside having a great admiration for his achievements, it behooves,
I state, the Prime Minister to oppose such a measure. Will he follow the example of Mussolini, Hitler and Roosevelt who took advantage of their prestige to introduce in their respective countries new principles of government, setting aside class prejudices, financial influences and red tape procedure, which are inherent to all governments, in order to give their respective countries an administration rendered necessary by the present crisis, and which seems destined to solve, happily, their national problems.
I trust that the right hon. Prime Minister will openly prove, without constraint, his reputation of statesman and leader of men, for the greatest welfare of Canada.


Mr. F. H. PICKEL (Brome-Missisquoi):: Mr. Speaker, 1 wish first of all to supplement a few words that I said in March with respect to the committee on agriculture. I have a resolution on the order paper calling for the division of the agriculture committee into two sections, an agricultural section and a wheat section, but I wfeh to state now that the western members on that committee are helping us in every possible way. They are doing everything in their power to help us in our investigation of the milk situation, in which they seem quite interested. I do not now request that the agriculture committee be divided, and I have much pleasure in withdrawing that resolution.
The western farmer has been interested in dairying for the past year or two simply because wheat has been so low in price, and if this depression starts the western farmer into the right channel and he will only go in more for mixed farming than he does at present, it will not have been wholly in vain. There is a great potential market in the east for the western farmer. Undoubtedly the farmers in the west could supply Canada with butter. We understand they would have
The Budget-Mr. Pickel

difficulty if they entered into the manufacture of cheese, as milk is bulky and collection would ibe difficult. Ontario, Quebec and the maritimes should in my opinion devote all their energies to cheese making. Although at the present time butter is selling at better prices than cheese, comparatively, the fact is 'that the year round there is more money in the manufacture of cheese than in the manufacture of butter. Eastern farmers should be instructed and intelligently directed to devote their efforts to cheese making. On the English markets -our 'cheese is supreme, and brings a higher price than cheese from any other part of 'the world. On the other hand our butter, as a general rule, grades lower than butters from other countries. After making that statement in the month of March of this year I received a protest from the Provision Trades Association of Montreal, in which they sent statistics showing that Canadian butter graded higher than any other butter on the English market. I have taken great pains to ascertain the facts with regard to the marketing of butter, and I find that the best grades of Australian, New Zealand and Danish butter supersedes those of Canada, and that our butter is classed higher than 'that from 'the Soviet and Poland. These are the facts, and I amend my former statement accordingly.
After I made my speech in March on agricultural conditions a practical joker from Winnipeg sent me a postcard containing a massage which I Should like to place on Hansard:
Dear Rip Yan Winkle:
Wake up; did you ever visit a farm out west? Please be advised that all the eastern prizes for butter are always won by western fanners, and we can all milk cows-and how?
I had no intention of intimating that the west could not make butter. I believe that they are capable of making butter as good as and probably better than we make. However that is not the point in question. Further, I received a letter from a gentleman in Edmonton, one or two paragraphs of which I should like to place on Hansard:
In the northern portion of this province, of which Edmonton is the centre, we have not had a crop failure in the last twenty years, in fact nine out of ten years we have had real good crops. In the ten years from 1922 to 1932 we really had only two years of depressed prices. In other words we had eight years in succession from 1922 to 1930 with good crops and good prices. I will venture to say there is not one out of ten farmers here who set aside any surplus or reserve during these eight years to take care of a lean year. The surplus, generally 
speaking, was spent in trips to the south. They have few, if any, cows and hogs to look after during the winter and the ones that have these few, the hired man or neighbour looks after them. The horses are usually cut loose around the straw piles to be taken up in March or April by the farmer, when he returns from the south.
Then he goes on to give a history of the western farmer:
You may think you have a lot to put up with having to listen to a few western M.P. farmers in the House of Commons. We have this to listen to every day in the year from our local U.F.A. members. Our farmers here, bad they behaved themselves, would be in a much better position than the farmers in Ontario and Quebec. The farmer here, or his father, got a good 160 acres of land at a cost of $10-homestead fees, and one of the first things he thinks of, on receiving his title, is how much he can borrow on it.
I have very little more to add with regard to the western farmer except that he has made millions where we have made only thousands. Many farmers out in the west make more in one year than the eastern farmer makes in a lifetime.


Edward James Young: How many?


Follin Horace Pickel: The hon. member for
Southeast Grey (Miss Macphail) made the statement I had suggested that all the western farmers should go into mixed farming. I made no such statement, but suggested merely that those western farmers who could go into mixed farming should do so. It would be not only in their own interests but in those of the whole country.
For many years the Canadian farmers have been sadly neglected. The only real help that has been given to the mixed farmer has been since 1930, when the government gave the fruit farmers and market gardeners some seasonal protection. The people affected have certainly derived great advantage from the help given, and I hope and trust that in its wisdom the government may see fit to extend those seasonal helps. Ever since Mr. Joseph Chamberlain made his memorable speech in Glasgow in 1903 I have been favourably impressed with his views. On that occasion he advocated preferential trade within the empire; to-day we have it. Ever since 1896 every government in this country has striven to attain that end. But they were all unsuccessful until the right hon. the Prime Minister (Mr. Bennett) went over to the old country and in a businesslike way, laid his cards on the table, and a preferential tariff within the empire was the result. I contend

The Budget-Mr. Picket
that the right hon. gentleman is entitled to be and should be acclaimed the Right Hon. Sir Richard Bedford Bennett, the saviour not only of Canada, but also of the British empire.
I think he has done more for the empire than any other statesman that ever lived.
I am glad that the hon. member for Sherbrooke (Mr. Howard) has just come into the chamber. One of his chief occupations since I have been in this house, as also of the hon. member for St. Johns-Iberville (Mr. Rheaume), has been to compare prices in Canada with prices in the United States-butter so much in Canada, so much in the United States; eggs so much in Canada, so much in the United States. But this session, Mr. Speaker, we have not heard anything about that. Why? We are getting 28 cents a pound for butter in Canada, and in the United States it is 18 cents.


Mr. HOWARD:: Who is getting 28 cents in Canada ?


Follin Horace Pickel: To-day for the first time since 1914 every farm product in Canada is selling at higher prices than anywhere else in the world.


Edward James Young: How about wheat?


Follin Horace Pickel: Don't worry about wheat. Canadian wheat is bound to come back; we raise the best wheat in the world.


Edward James Young: It has not come yet.


Follin Horace Pickel: It is bound to regain its level. It is low at present, and we are sorry for it, but it is a world wide condition and I do not know what you can do to help it.


Edward James Young: What about the tariff?


Follin Horace Pickel: The hon. member for Sherbrooke and the hon. member for St. Johns-Iberville stand up in this house with voices full of tears and eyes as dry as dust, and with a pious and fervent 'hope in their hearts that things would get worse to serve their political ends. Remember, Mr. Speaker, they are both distributors. They are not working for the farmers; there is politics underlying it.


Charles Benjamin Howard: You ought to be fair at least. How do you make me a distributor?


Follin Horace Pickel: We have not heard any comparison of prices this session. If to-day we were on a butter export basis, instead of getting 28 cents a pound we would be getting 11J cents.


Mr. MERCIER (St. Henri):: Mr. Speaker, I rise to a point of order. I do not think any
hon. member can discuss in this house, even on the budget, a matter which is sub judice before a committee of the house.


Onésime Gagnon: I regret to say that the point raised by the hon. member is not well taken.


Follin Horace Pickel: If we were to-day on an export basis, instead of getting 28 cents we would be getting 114 cents. For that reason I advocate the making of just sufficient butter in Canada to supply our market, production intelligently controlled to make just about what we require. The minute we begin to export we take the export price. It would be much better for us, rather than run any risk of having butter to export, to have to import a little.


Mr. TOTZKE:: Who is going to direct the production?


An hon. MEMBER:: The cow.


Follin Horace Pickel: I am not a political
economist, and I am not versed in railroads or banking or anything of that kind. Last session I had the privilege through the courtesy of the Prime Minister of hearing two very learned addresses delivered in the House of Commons restaurant. One was by Sir Josiah Stamp, the other by Lord Reading. They were very careful in their remarks in contrast with hon. members in the southeast corner of the house who think it is the easiest thing in the world to inflate, deflate, and arrange our currency just as they please. These gentlemen, who should know what they were talking about, were very careful in their suggestions.
As far as the railroad situation is concerned I advocated a year ago that our railway should be either leased, sold, given away, or scrapped, and I am still of that opinion. I voted for the railway bill in the hope that a change might be beneficial, but I have not much faith that it is going to be much good. I do not quarrel with the statement of which we have heard so much, "amalgamation never, competition ever." It is rather a taking slogan. I am for competition, but I do not think the government should be in business, the government should not be one of the competitors.


Edward James Young: We will put them out of business at the next election.


Mr. BOUCHARD:: There is no business left.


Follin Horace Pickel: The government has been trying to do too much business. At the pre-
The Budget-Mr. Picket

sent time we are investigating the milk situation in Canada. As far as I am personally concerned I feel this is just a stop-gap; I think every branch of agriculture should be investigated. There is not a branch of agriculture to-day in which the farmer is not exploited. Hog grading, egg grading, packing houses, stockyards, millers-the farmer pays the price every time. In the circle with which I am acquainted I do not know a farmer who pays income tax. I have one farm of 400 acres in which I have nearly $47,000 invested, and I did not make one per cent on it last year. I made sufficient to pay my insurance and taxes; that is all.


Edward James Young: You were lucky if you did that.


Follin Horace Pickel: I know it. That is a bad condition. And it is not due to the prices of commodities; if the farmer were sure of getting a square deal and his fair share of what his goods sell for, he would be on easy street. He was never much better off than he would be to-day if he got his just share.


Joseph Georges Bouchard: It is the tariff.


Edward James Young: 
Mr. JEAN LOUIS BARIBEAU (Champlain) (Translation):: I wish to congratulate the hon. Minister of Finance (Mr. Rhodes) of his clear and precise statement on the financial situation of this country. The budget speech of the hon. Minister of Finance, is not an election one; however, the Canadian people, as they did during the great war, must unite and make sacrifices so as to check this depression which prevails not only in Canada but throughout the world.
The balance sheet of the Dominion shows a deficit of 853,000,000 for the present fiscal year; ordinary expenditure was reduced by 819,000,000, notwithstanding this fact there is a gap between expenditures and ordinary revenue. Funds had to be found to meet the deficit, therefore new taxes had to be levied. The Canadian people expected that such measures would be taken, because the late administration had been extravagant during prosperous years, when our administrators of that date should have economized so as to prepare for rainy days, these years of crisis and depression. They were improvident and the people, to-day, are called upon to make sacrifices. We, therefore, note that 40 per cent of our federal budget will be absorbed in meeting the interest on loans contracted in the past.
. All are interested to see that the finances of our government should be placed on a sound basis and to obtain such a result all must contribute their quota.
The burden will, however, not be felt by the ratepayers with little means; the large majority of our people will be affected by only one of the new taxes, namely, that on sugar. The latter has given rise to innumerable criticisms by our opponents; however, if we admit that the government needs further revenue, we must also recongnize that all
The Budget-Mr. Baribeau


Mr. FRANK BOYES (East Middlesex):: Mr. Speaker, I wish to make a few observations in connection with the question now before the house, but before doing so I would like to take this opportunity to congratulate the Minister of Finance (Mr. Rhodes) upon the very .admirable budget he presented to this house. I feel sure that this budget is being received with considerable favour throughout the dominion. I have the honour of representing a riding located in the western part of the province of Ontario, that of East Middlesex. The population of this riding is partly rural and partly urban, and I feel it to be my duty to represent the people of the rural districts as well as those of the urban centres. This duty has been a comparatively easy matter because of the fact that the Prime Minister (Mr. Bennett) as well as the government have been thoughtful of both classes. My riding contains part of the city of London and the eastern half of the county of Middlesex, and I should like to join with the hon. member for London (Air. White), who has represented that riding so ably for so many years, in bringing a couple of matters to the attention of this government.

this government cheese is receiving a benefit of seven cents per pound. Were it not for
this protection I feel confident New Zealand would be*exporting cheese to Canada, and our price would be less than it is. As I have said, it is possible that we may soon be required to export cheese to England, and I should like to bring to your attention, Mr. Speaker, some of the advantages we will receive when we enter the export market. I shall place on Hansard some figures showing a percentage increase in price due to stabilization of the pound at $4.60.
Increase per pound
Exchange at	with cheese at 10 cents
$3.60	2.77
3.70	2.43
3.90	1.79
4.00	1.50
4.10	1.22
I believe these figures show a considerable benefit and I am certain that those who produce the milk for the production of cheese will receive this budget with great favour. We are producing a very large quantity of cheese in Canada to-day. In 1930 we exported 74,260,700 pounds of cheese, whereas in 1932 we exported 83,813,900. Hon. members will see that the benefits received on that quantity of cheese will be considerable.
I should like to say a few words with regard to the grading of cheese in Canada. A few years ago the federal government appointed a staff of cheese graders to grade cheese for export. I give the government of that day credit for arranging for that grading. Our cheese enjoys a good reputation in England to-day. Hon. members who have spoken before me have stated that we are receiving a preference on our cheese. The statement was made a few days ago by the former Minister of Agriculture (Mr. Motherwell) that the previous government should receive credit for the premium paid on Canadian cheese in England. I am afraid I cannot agree with the hon. gentleman, because even though the former government did establish the grading system, the actual inspection has been carried out by the provinces. If the grading of cheese ensured a premium on Canadian cheese in the English market, I cannot understand why the former Minister of Agriculture would favour one province and not another in that connection. I can say that the grade of cheese in the province of Ontario and Quebec, so far as No. 1 quality is concerned, is not equal. In the province of Quebec the average percentage of cheese scoring No.
1 and special in 1931 was 89-41, and in 1932 
the average percentage scoring No. 1 and special was 86-32. This is a very good showing indeed in the province of Quebec, but I wish to point out to the former Minister of Agriculture that the inspection as carried out in the province of Ontario has been a little more effective than it has been in Quebec-


Mr. FAFARD:: Will the hon. member permit a question? Is my friend aware that Quebec took first prize at Toronto exhibition last year?


Frank Boyes: I was not aware of it. It
will have to be proven to me that it is the case. If it is I shall be glad to note the improvement. But in Ontario in 1932 the average score of No. 1 and special cheese was 96-38 while in the province of Quebec it was 86-32. I am not wishing in any way to discredit the province	of Quebec;	even ascore of 86-32 is good, yet in Ontario with their special system of instruction they were able to attain an average score of No. 1 and special of 96-38. Further, sir, I wish to draw to your attention the fact that the province of Ontario is divided into different sections-the northern, eastern, western, and central, and in the northern section the average score was 88-42; in the eastern section, 95-29; in the central section,	96-87,	and in	the	westernsection, 98-37.	I wish	to give	credit wherecredit is due,	that is	to the	men	in the
western part of Ontario-they have done excellent work, making a very fine article of cheese grading an average score of 98-37. In the county I have the honour to represent, the county of Middlesex, the average score of No. 1 and special was 99-1. This will show that those in that county are doing very excellent work.
As I stated before, we are receiving a premium for our cheese in England. [DOT] The government of Ontario has tried to do its duty in seeing that the finest possible article is produced. The province of Quebec is also making an excellent article, but I do feel that the instruction work in the province of Quebec might be a little more effectively carried on and the percentage of high grades increased up to what it is in Ontario, and then we might receive in the old country a greater premium on our cheese than we do at the present time. I hope this will be carried into effect in the near future, as it will result in a great deal of benefit.
In conclusion I wish to say that I think this budget is being received with great favour in the Dominion of Canada, and especially in the province of Ontario. The

Statute oj Westminster
agricultural population, I am sure, thank the Minister of Finance for the benefits to the agriculturists. I have heard quite a number who are opposed to me in politics commend this budget and express themselves as very favourable to this feature. If hon. members to your left, Mr. Speaker, were not so strongly influenced by their politics, if they expressed their honest sentiments, they would join with us on this side of the house in the belief that we have in the Right Hon. R. B. Bennett the right man in the right place.
On motion of Mr. Maclnnis the debate was adjourned.
On motion of Mr. Guthrie the house adjourned at 10.50 p.m.
Tuesday, April 11, 1933