1934-05-29

OFFICIAL REPORT


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itouste of Commons Debates
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Tuesday, May 29, 1934

SILVER COVERAGE On the orders of the day:
Mr. THOMAS REID (New Westminster):: I should like to direct a question to the Prime Minister (Mr. Bennett). According to reports appearing in the press, President Roosevelt has made representations to other countries to join with the United States in the restoration of silver. My question to the Prime Minister is whether any representations have been made to the Dominion of Canada.


Right Hon. R. B. BENNETT (Prime Minister):: As I intimated the other day, the Canadian minister is keeping closely in touch with the situation. No representations have been received here.
PREVENTIVE SERVICE SEARCHES On the orders of the day:


Mr. C. B. HOWARD (Sherbrooke):: I should like to direct a question to the Minister of National Revenue (Mr. Matthews). Did he or his department issue instructions to the preventive service to hold up and search the cars of private citizens, as they did on May 24, on the roads all over the eastern townships?


Hon. R. C. MATTHEWS (Minister of National Revenue):: I know nothing about the matter, but I will inquire into it.
CANADIAN PACIFIC LOAN On the orders of the day:


Hon. J. L. RALSTON (Shelburne-Yar-mouth):: I should like to ask the Prime Minister (Mr. Bennett) a question with regard to reports appearing in the press to the effect that the Canadian Pacific Railway are selling $12,000,000 of perpetual four per cent debentures. Is it the intention that the whole or any part of the proceeds of this sale will be used for the purpose of reducing the loan which has been guaranteed by the dominion?


Richard Bedford Bennett: As yet the sale has not been made. If, as and when it is made it will reduce pro tanto the amount of the guarantee of the Dominion of Canada.



MONTREAL RELIEF ACCOUNTS

[Stage Direction]
On the orders of the day:
Mr. ONESIME GAGNON (Dorchester):: I should like to direct a question to the Minister of Labour (Mr. Gordon). In yesterday's issue of the Montreal Le Devoir there appeared a dispatch with regard to the accounts due the city of Montreal. The article is headed, "Ottawa is Responsible" and it is to the effect that if the accounts Of the city of Montreal are unpaid it is because of the delay on the part of the federal government. I should like to ask the minister if such statements are true.


Hon. W. A. GORDON (Minister of Labour) :: When the accounts of the city of Montreal are received by us from the province of Quebec they are dealt with in exactly the same manner as the accounts from any other province are dealt with. It takes from three days to probably ten days after the accounts are received to have them checked by the officials of my department and the auditor general, before the cheque issues. Each account received from the province of Quebec with respect to the city of Montreal has been promptly dealt with by the government. At present there are very few if any accounts in the department from the province of Quebec disclosing amounts owing to the city of Montreal; any that are in the department are being looked after.
The delay which has been occasioned with respect to the Montreal accounts arises out of difficulties that the provincial auditors are having in auditing the Montreal accounts, as I understand it. It is unfortunate that this delay has occurred, but before accounts are sent by the province to the federal government it is highly desirable that proper and necessary audits be made. Just as rapidly as we receive the accounts from the province of Quebec in proper form they have been and will be paid.

Imperial Economic Committee



IMPERIAL ECONOMIC COMMITTEE

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On the orders of the day:
Mr. J. K. BLAIR (North Wellington):: I should like to direct a question to the Prime Minister (Mr. Bennett), as to the truth of a report appearing in yesterday's Toronto Mail and Empire. This report states that Hon. Howard Ferguson has been elected chairman of the imperial economic conference, which conference is to carry on the work of economic intelligence hitherto conducted by the empire marketing board, and it is suggested that the empire marketing board may be abolished. I think perhaps that board is under the control of the government of Great Britain, but I should like to get some information from the Prime Minister in regard to this report.


Richard Bedford Bennett: No question has been put, but presumably the hon. member has served the useful purpose of hearing himself make the statement he has made.


Some hon. MEMBERS:: Order.


Richard Bedford Bennett: There is nothing out of order in that; it is a perfectly correct statement. The hon. member did not ask a question, but if he will take the trouble to look at the report which has been laid on the table he will realize that, as a result of the conference which was held in London, England, last year, at which Doctor Skelton represented the dominion and of which conference he was chairman, the whole matter connected with the empire marketing board has been dealt with. The other statements read by the hon. gentleman have no foundation in fact, so far as I know.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker,
as I listened to the question asked by the hon. member for North Wellington (Mr. Blair) I understood him to refer to the imperial economic conference. If I am right in that, I think what he really meant to refer to was the imperial economic committee, and I should like to ask the Prime Minister if it is not a fact that the Hon. G. Howard Ferguson has become chairman of the imperial economic committee, which sits for the purpose of furthering economic cooperation within the empire?


Richard Bedford Bennett: It will be within the
memory of the right hon. gentleman, who has read the report, that provision was made for the maintenance of a committee to deal with matters which had in part been dealt with by the empire marketing board. I believe the various high commissioners have
[Mr. Gordon.)
been or will be chairmen of the committee, from time to time. Whether or not it is Mr. Ferguson's turn at the present time, I cannot say. I shall look into the matter, however, and make a statement. I think he was chairman, but whether or not he is at the present time, I cannot say. I shall ascertain the fact, and advise the right hon. gentleman.


Mr. LAPOINTE:: God save Canada.



PRICE SPREADS AND MASS BUYING

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On the orders of the day:
Mr. J. E. MICHAUD (Restigouche-Mada-waska):: I should like to ask the Minister
of Trade and Commerce (Mr. Stevens) if he has received a resolution passed by the board of trade of Campbellton, New Brunswick, dated May 25 of this year, urging that the Stevens committee investigate alleged unfair prices being paid for pulpwood in the province of New Brunswick. If the resolution has been received I should like to know whether it is the intention of the minister to have the matter investigated by the price spreads committee.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Naturally, I have received
hundreds of communications of a character similar to that indicated. I would point out to the hon. member that as he has presented it the matter is not one which would properly come under the order of reference. However, all communications of that character are answered as promptly as time permits. From the meagre information the hon. member has supplied I could not tell him whether or not the committee would decide to deal with the matter indicated, or whether such investigation would come under the order of reference. From what he has said I am under the impression it would not.



DOMINION COMPANIES ACT

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The house resumed from Monday, May 28, consideration in committee of Bill No. 64, respecting dominion companies-Mr. Cahan- Mr. Sullivan in the chair.
On section 41-When and how calls may be made.
Mr. CAHAN:: We are now on section 41.


Mr. CASGRAIN:: I should like to ascertain whether or not as we proceed along with the sections, the Secretary of State will tell the house in detail what provisions, if any, have been specially embodied in this bill to prevent the watering of stock and the circulation of

Dominion Companies Act
diluted shares which, of late, have been a source of trouble, and have meant the loss of a great amount of money to our people. I understood the Secretary of State to say that the purpose behind the bill was to try to prevent the operation known as the watering of stock, and to give the people a chance to know the real value of what they are buying, thereby preventing abuses which have existed in the past. As we proceed I should like the Secretary of State to explain in detail how the amendments he will introduce will give the desired result.


Charles Hazlitt Cahan: I believe we would do well to- discuss in their turn the clauses to which the hon. member has referred. He will find, first, that the statements which companies are compelled to make to their shareholders are much more detailed and stringent than they have been under any previous act. Respecting the issue of prospectuses shares must be issued and sold under the representations made in the prospectus issued by the company or its underwriters. The provisions for disclosing information are very much more specific and stringent than in any act in any British country with which I am familiar. Therefore I think the hon. member might reserve his question, because another hon. member opposite has given notice to me that he will ask to have those provisions stand, for the present, for the purposes of further discussion.


[Stage Direction]
Section agreed to.
Sections 42, 43 and 44 agreed to.
Section 45 stands.
On section 46-Executors, etc., not personally liable.
Mr. HANSON (York-Sunbury):: In regard to this section may I suggest that for the purposes of clarification the word "any" should be inserted before the word "such" in line thirty-four. I so move.


Charles Hazlitt Cahan: I have no objection to the amendment. The words "executor, administrator, tutor" and so on are mentioned in the alternative. The matter was discussed, and we were under the impression that the expression "such capacity" referred to the particular capacity in which the person acted, namely either as executor, administrator, tutor, or any other capacity indicated in the section. However if the hon. member thinks that the word "any" clarifies the section, I have no objection. Personally I do not think it clarifies it.	-


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
74726-219J
On section 47-Mortgagee not personally liable.
Richard Burpee Hanson: I would
ask What is the necessity for the use of the word "collateral" before the word "security" in line 44. That is a limiting phrase.


Charles Hazlitt Cahan: The word "collateral" was
not introduced by me. It has been used in the Companies Act, and specific definitions have been given by the courts of the word "collateral." The term "collateral security" is thoroughly defined I think in law and in fact, and after a very lengthy consideration we decided to retain that phrase. There was one advocate who objected to the change, and I have no doubt that he has instructed my hon. friend in regard to the matter, but I cannot accept his view because collateral security is a .term clearly defined and clearly understood.


[Stage Direction]
Section agreed to.
Section 48 stands.
Section 49 agreed to.
On section 50-Addition to name of company of "and reduced."
Mr. BUTCHER:: Why the change in subsection 2? It seems >to me that subsection 62 of the present act affords greater protection for creditors than does this amended section.


Charles Hazlitt Cahan: The old subsection 2 read
as follows:
(2) Where the reduction does not involve either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, the Secretary of State may, if he thinks expedient, dispense altogether with the addition of the words "and reduced."
The words "and reduced" were formerly used for the protection of the creditors of the company but my hon. friend will notice that where there is no diminution of any liability in respect of unpaid share capital the creditor is protected, and where there is no re-payment to any shareholder of any paid-up share capital the creditor is protected. The company has the same assets as before, and in such cases it has always been the practice of the department not to insert the words "and reduced," because the creditors have exactly the same security for its debts and liabilities due to them as they had before the reduction of capital. But these are the only excepted cases, and we have made a short exception which certainly covers the cases in which the Secretary of State has discretion to dispense with the words " and reduced." We have in the practice of the
Dominion Companies Act

department many regulations which are not expressed in specific terms, which it is difficult to express in a statute, but in case of every reduction of capital the Secretary of State demands from the applicant a statement of its accounts verified by an auditor and verified also by affidavit, so that it is easily seen from the documents so submitted whether the interest of the creditor is prejudiced or not, and in every case in which there is any possibility of the interest of the creditor being prejudiced we insist on having it brought to the notice of the creditor and the receipt of a waiver from the creditor over the creditor's signature before we exercise the discretion which is vested in .the Secretary of State in subsection 2. I think that is about as near accuracy as we can reach.


[Stage Direction]
Section agreed to.
On section 51-Objections by creditors and settlement of list of objecting creditors.
Harry Butcher: I will read subsection 4:
Where a proposed reduction of capital involves either the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital, the Secretary of State may, if having regard to any special circumstances of the case he thinks proper so to do, direct that this section shall not apply as regards any class or any classes of creditors.
What relation is there between shareholders and creditors in this subsection?
Mr. CAHA.N: That has to do again with the reduction of capital. If any reduction of capital is proposed that involves a reduction of the assets of a company which would prejudice the rights and interests of the creditor, then the Secretary of State must intervene. This section as now submitted is taken from the English act. If a creditor or any class of creditors is thoroughly secured, it gives the Secretary of State a discretion in those special circumstances to direct that notice, et cetera, to creditors shall not apply. I have simply followed in this amended section the English act where the courts have found that if creditors were amply secured it was not necessary to go through the form of giving notice.


[Stage Direction]
Section agreed to.
On section 52-Order confirming reduction.
Charles Hazlitt Cahan: I wish to delete the marginal note, Mr. Chairman, and substitute the words "supplementary letters patent confirming reductions," which is more accurate. As the marginal note is not subject to amendment by
[Mr. CahanJ
resolution of the house I am simply calling attention to it, and I would ask the officials of the house to change the marginal note accordingly.


[Stage Direction]
Amendment agreed to.
Mr. OOOTE:: I do not know whether this is the correct section on which to direct this question to the minister. I am not very familiar with this bill, and have not had much time to devote to it. I should like to ask the minister just what supervision does the department exercise over the capital structure of companies that are incorporated. It seems to me that that is where many investors get into trouble, putting their money into stock or securities of companies that are overcapitalized. I have received many complaints lately from the shareholders of one company. I must admit I do not know whether it is incorporated under the dominion act or not. The company in question is Burns and Company Limited. The shareholders have invested in about seven million dollars of preferred shares of this company, and they are going to lose practically all the money that they have put into those preferred shares. Would the minister be good enough to give us an idea of the supervision exercised over the capital structure of companies that are being incorporated?


Charles Hazlitt Cahan: Mr. Chairman, I have
spent many anxious hours over the question of the capitalization of companies by the terms of the original application and the issue of letters patent whereby the capital structure is limited in the first place, and secondly with regard to increases of capital which arise under section 48. The proposed capital of the company is indicated by the applicants in the petition to the department for incorporation by letters patent. How a department can ascertain whether any restriction should be placed upon the capital asked for is one of the most difficult questions in connection with the administration of the Companies Act. A company may be undertaking a work of construction, it may be a factory, a hydro electric station or some other engineering work and I assure the hon. gentleman that it is impossible for the department to revise the estimates of construction or the estimates of the probable outlay on the engineering work so as to determine with any degree of reliability that the amount of capital asked for in the petition is greater than the work necessitates. That would make necessary having an official in the department who could enter into almost every material

Dominion Companies Act
detail of the proposed undertaking and who is prepared to insert in the letters patent an expression of his own opinion which is contrary to the expert opinions of those engaged by the applicants to give them reliable estimates of the amount of capital required.
When increases in capital are required, under section 48-frequently the increases are so small that their necessity is obvious-we ask for the best estimates which can be given as to the application of this proposed increase in capital and the necessity for its issue. Having obtained that and the proper certificates from auditors and others, we are forced to rely largely upon the opinions and the certificates of auditors and the sworn statements of officials which are submitted to us. Beyond that we have no agency in the department which can be expected to give more reliable information than that given by the applicants on behalf of the company and that contained in the certificates of the engineers and agents which they have retained for the purpose of advising them.


George Gibson Coote: I should like to illustrate
the case I am trying to put to the minister by referring to Burns and Company Limited. The securities of this company were sold for the purpose of purchasing and taking over the business of P. Burns and Company. The capital structure of the old company is shown here with 83,078,000 in first mortgage bonds and $3,943,000 in preferred stock, a total of 87,021,000. The capital structure of the new company shows $7,000,000 in first mortgage bonds and 86.900.000 in preferred stock, a total of 813,900,000. It will be apparent that the bonds were increased by 127 per cent and the preferred stock by 74 per cent. Certain extraneous assets belonging to the old company were not taken over. The increase averaged almost 100 per cent in preferred stock and bonds of the new company as compared with the old. As I say, I do not know whether this company was incorporated under the dominion act and it may be that I am taking up this matter in the wrong place. If so, the minister will correct me but, if not, I should like him at some stage of the discussion of this bill to advise the committee whether any steps are being taken in the drafting of this new bill to prevent occurrences such as those which took place in connection with this company. I might say that the preferred shareholders have had their equity almost wiped out. In the new company the management is confined to the holders of three management shares without
any par value. Although there is a total capital involved of nearly $14,000,000, the preferred shareholders have no say whatever in the management of the company. I should be glad if at some stage of the bill the minister would indicate what action if any is being taken to prevent such occurrences.


Charles Hazlitt Cahan: I thank the hon. gentleman. I can make a statement on this section although there is another section which is very material and -relevant. My acquaintance with the particular company to which he refers is due to the fact that the company applied recently to have its letters patent amended under an order of the judge who had presided over the meetings held to consider the reconstruction of the company. From my examination of the statements and accounts which were presented I know that there were and are probably very material grounds for the complaint made by the hon. gentleman. In order that such conditions may be prevented so far as possible, we have provided in this bill, in another section dealing with prospectuses, that any company issuing shares or purporting to issue shares for sale must issue a prospectus, which prospectus must be in the hands of every person who buys a single share of stock from the company or its underwriter and which also provides that, if .there is any material misstatement in that -prospectus, the company issuing it shall be responsible. In regard to the conditions under which the prospectus shall issue and the information which must be disclosed therein, we have gone the limit in compelling a company organized for the purpose of taking over a pre-existing company to give complete information with regard to the financial .condition and the operating -profits and losses of the pre-existing company so that every -purchaser may have before him a most complete and detailed statement of the existing conditions for his own information. When we deal with prospectuses I shall be very glad to have any suggestion from the hon. gentleman or other -hon. members of the committee. This bill is not a partisan bill, its object is to protect the public so far as it is within the legislative jurisdiction of this parliament so to do and at the same time to permit companies whose undertakings are above reproach and criticism to carry out such undertakings in industry and commerce for the benefit of the whole country.


Mr. NEILL:: Will the minister allow me a question .there? He stated that under certain circumstances of -misrepresentation the issuing company would be held liable. Would
Dominion Companies Act

that company be criminally liable? If not, they could easily evade their civil responsibility by setting up a straw company.


Charles Hazlitt Cahan: There are sections of the
criminal code which make directors who issue false statements liable. However, in the matter of criminal jurisprudence I shall have to submit to the more experienced judgment of my hon. friend the Minister of Justice, though I may say that if this discussion is postponed until we deal with the representations that must be made by a company issuing its shares, and the nature and extent of the information which must be disclosed, I shall be able to justify the statement which I now make to hon. gentlemen, that I know of no act in a British country in which the provisions are more stringent than those incorporated here.


George Gibson Coote: Will the prospectus to be
issued under the new act, in connection with any company whose capital structure is being reorganized, require those issuing the prospectus to state the capitalization of the old company as well as the capitalization of the new? If not, will the minister consider making provision in that respect?


Charles Hazlitt Cahan: All the material facts necessary to allow an intelligent reader of a prospectus to determine the actual financial condition of the old company must be disclosed, and if on further examination of these sections the hon. gentleman has any suggestions to make I shall be most happy to consider them.


Mr. STEWART (Edmonton):: I was intensely interested in section 48 for the very reason given for the present discussion.


Charles Hazlitt Cahan: That section stands.


Charles A. Stewart: I understand that, but the minister has taken this occasion to discuss the matter with another member of the house and I want to say this to him. I wish he would reconsider some of his statements, particularly as regards the inadvisability of going to the trouble of supervising the capitalization of companies. Some authority will have to undertake this unless, as he points out, he has surrounded the organization of companies with the safeguards and penalties that will make it impossible for companies to evade the law. Eight or nine years ago I raised this very question in the House of Commons and I was told then

I do not blame the minister who at that time made the reply-that such provision could not be incorporated in the

Companies Act. Well, we have reaped the whirlwind in consequence since that date, companies having been allowed excessive capitalization whereby they have exploited the public. I feel very strongly on this particular feature of the bill. Surely it is possible so to supervise the capitalization of companies obtaining charters from the dominion government so as to ensure that the sort of thing that has gone on, not only in connection with the Burns company but with half a dozen other concerns, where the public have been exploited in Canada, shall be prevented. I say this now in the hope that some provision will be made in this bill that will make that sort of thing impossible.


Charles Hazlitt Cahan: Section 48 stands. I think we have gone as far as it is possible for this parliament to go, if in the future any companies are to 'be incorporated under the authority of dominion legislation.


Richard Burpee Hanson: The crux of the evil complained of, under the capital structure set up in the letters patent, as I apprehend it, or in the borrowing powers that may be asked for by by-law, is the writing up of assets taken over from one company by another. Unless you meet that evil and provide for supervision over that aspect of the matter you will never meet the situation which at present confronts the investing public of Canada. You can put what you like into the requirements of the prospectus, but. unless there is a true valuation on the assets being exchanged by the old company for the securities of the new, or something of that character you will never prevent the crying evil which is complained of here and elsewhere. After very careful consideration, I believe I am correct in saying that this is the point to which we ought to direct attention. I will say this however, that if you do try to do that you will have a wholesale job on your hands; more than that, you will drive out of the federal jurisdiction the incorporation of practically all these companies. Unless therefore you can get uniformity as between the dominion and the provinces, I do not see any chance in the world of remedying the evil, and it is a great evil, which is complained of.


George Gibson Coote: In connection with Burns and Company Limited, the preferred shareholders, who are going to lose most of their equity, formed the preferred shareholders protective committee. That committee issued a letter to the preferred shareholders in which they asked them to subscribe to a fund to be used for the purpose of carrying out an investi-

Dominion Companies Act
gation and, if necessary, of taking action against the Dominion Securities Corporation who sold the securities. They claim that the prospectus of the company did not disclose the true position of the company. This circular came to the attention of the Dominion Securities Corporation, who floated the securities. The Dominion Securities Corporation have issued a circular letter to the preferred shareholders and I wish to quote the postscript, because it refers to the suggestion made by the minister that any company that floated securities improperly, or at least in connection with which proper information had not been disclosed, might be held liable for damages. Such action is contemplated and suggested by the protective committee to which I have referred, and this is what the Dominion Securities Corporation say in a postscript to their letter to the preferred shareholders:
We feel further that we should point out with reference to the form of power of attorney accompanying the circular of February 27. 1934, that if you give such power, and action is brought in your name and on your behalf, you may thereby incur a liability for substantial costs in addition to any funds which you contribute as suggested in the circular.
Here is the corporation that floated the securities issuing a warning to all preferred shareholders, discouraging them from getting together to take legal action if they have any ground therefor. As an hon. member suggests, it is a threat to the shareholders. I bring this to the attention of the minister So that when we come to discuss section 48 he will perhaps take it into consideration to see whether some better security or protection can be afforded shareholders who wish to take such action.
Mr. CAHA1N: The clauses with regard to prospectus will stand for to-day and may be discussed further in connection with section 48 if hon. gentlemen wish to renew the discussion.


[Stage Direction]
Section agreed to.
Section 53 agreed to.
On section 54-Penalty for concealment of name of creditor.
Charles Hazlitt Cahan: Hon. gentlemen will see as we go through these clauses that we are inserting penalties. For instance, in clause 54 we are inserting a penalty for misrepresentation:
Liable to five years' imprisonment or to a penalty not exceeding $1,000, or to both such imprisonment and such penalty.
We are in this revision increasing the penalties very considerably.


Richard Burpee Hanson: So far as I can see there is no change in this clause.


Charles Hazlitt Cahan: In this particular one the penalty may be the same, but in other clauses we are increasing the penalties very materially.


[Stage Direction]
Section agreed to.
Sections 55 to 58 inclusive agreed to.
On section 59-Preference stock by bylaw.
Mr. DUPRE:: I move in subsection 5 to strike out all the words after the word "part" in the 36th line.


Joseph Philippe Baby Casgrain: What is the effect of the amendment?


Charles Hazlitt Cahan: This amendment is proposed because we think the latter part of the subclause does not add anything to the force of the previous part. The subclause reads:
(5) Holders of such preferred or deferred shares shall be shareholders within the meaning of this part, and shall in all respects possess the rights and be subject to the liabilities of shareholders within the meaning of this part.
That broad statement is regarded by the best counsel whose advice I can obtain as being clear and definite and the suggestion is made that the addition of the following words is unnecessary:
But in respect of dividends, and in any other respect set out in the by-law as authorized by this part, they shall, as against the ordinary shareholders, be entitled to the preferences and rights given by such by-law.
Of course they are, because the other provisions of the statute confer those rights upon them provided they are given by bylaw, and the best legal advice T can obtain is that the addition of those words after the word "part" simply befogs the issue.


Joseph Philippe Baby Casgrain: Who was the counsel that advised that because for the information of the committee-
* Mr. CAHAN: I have had the advice of many lawyers in various parts of the country who have given the very best of counsel. This has also been before the leading accountants, professional institutes and professors of colleges and their advice has been digested to the best of our ability. The matter has been under discussion now for a year and a half.


Joseph Philippe Baby Casgrain: Too many cooks spoil the broth.


Richard Burpee Hanson: Although the minister states that these additional words are regarded merely as redundant and of no force or effect so far as the legislation is
Dominion Companies Act

concerned, they have been in the statute for a long time; I do not know that there is any decision on the point and I do not think it will do any harm to leave them in.
Section stands.
Section 60 agreed to.
Section 61 stands.
On section 62-Notice of changes in capital structure to be filed.


Charles Hazlitt Cahan: This clause has been the subject of considerable discussion and I have proposed a clause in substitution therefor. Clause 62 was before this house in 1930 and some difficulty has arisen with regard to the construction of it. I have not changed its purport, but I have, I think, made it clearer. For instance, the old section 62 which was reinserted in the original bill reads:
When	any	class	of	shares is	created	or
becomes subject to redemption or conversion into any other class-
The difficulty has arisen, I believe, in the courts as to whether "redemption" covers the words "purchase for cancellation" and so I have inserted the latter words to make the meaning abundantly clear. The clause will now read:
When	any	class	of	shares is	created	or
becomes subject to redemption or purchase for cancellation or conversion into any other class-
Simply for purposes of clarification we have inserted the words "purchase for cancellation," which in the ordinary course was deemed to be included in "redemption."


Maurice Dupré: I therefore move to strike out this section and to substitute therefor the following:
62. When any class of shares is created or becomes subject to redemption or purchase for cancellation or conversion into any other class, and such redemption or purchase for cancellation or conversion is effected, notice thereof, setting forth the number of shares of the class redeemed or purchased for cancellation or converted and the number of shares and the class into which conversion is made, shall be filed forthwith with the Secretary of State.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Richard Burpee Hanson: I would like to ask that clauses 63, 64 and 65 relating to borrowing powers stand. This is one of the important parts of the bill. Of course if the minister wants to go on with it, I cannot help it.


Charles Hazlitt Cahan: If the hon. gentleman wishes I will certainly allow these clauses to stand. I do not think the changes made are important except for purposes of clarification.
Sections 63 to 65 inclusive stand.
On section 66-Registration of mortgages and charges.


Charles Hazlitt Cahan: In respect of this clause there is a slight amendment. Provision was not made in the old act for a special condition of affairs prevailing under the civil law of Quebec. In that province a mortgage is executed before a notary and he retains the original document. Under the law of that province a notarial copy from the records of the notary has the same force and effect as evidence as has under the English law the original mortgage which is signed by the parties.


Mr. POWER:: It is an authentic document.


Charles Hazlitt Cahan: Yes; I was striving for that word. In order to make it clear that that is recognized by this bill I am proposing to insert on page 34, line 3, after the word "company" these words:
Or, in the province of Quebec, a notarial copy of such instrument.
I have been asked by the lawyers of that province to see that that defect is remedied.


Maurice Dupré: I move in subsection (1) of section 66, on page 34, line 3, to insert after the word "company" the words "or, in the province of Quebec, a notarial copy of such instrument."


[Stage Direction]
Amendment agreed to.
Charles Hazlitt Cahan: In line 29, after the word
"company" the same words should be inserted, "or in the province of Quebec a notarial copy of such instrument."


Maurice Dupré: I move an amendment
accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 67-Registration of order appointing receiver.
Harry Butcher: Would the minister allow this section to stand?


Charles Hazlitt Cahan: 'Certainly. I am quite willing to cooperate, because I regard this as a peculiar bill on which we should have the best judgment of all members on both sides of the house to guide us. When we allow these sections to stand, however, I should be very happy indeed if hon. gentlemen who

Dominion Companies Act
have definite opinions or suggestions to make with regard to these sections, would make such suggestions before the sections again come up for discussion, so that I may consider whether the amendments which they propose in relation to the other sections of the act, will result in a harmonious whole. I should be very glad if that could be done.


Charles Gavan Power: I do not think this is a
debatable bill; you are quite ready to accept the point of view of the province of Quebec?


Charles Hazlitt Cahan: Yes.


Charles Gavan Power: There may be some discussion on section 67; why not let it stand?


Charles Hazlitt Cahan: I was only suggesting that
if hon. gentlemen had in mind definite amendments they should advise me of them.


Charles Gavan Power: Why have any amendments? This is a good bill; it is not a political bill at all. I entirely agree with the Secretary of State; politics have nothing to do with this measure. We find that our law is not as good as we thought it was, but we want to get a good law and we are willing to do our best to amend it.


Mr. BOTHWELL:: In connection with the
sections that are allowed to stand I think many of us would be glad of the opportunity of discussing them with the minister altogether outside of the committee.


Charles Hazlitt Cahan: I will place myself at the
disposal of hon. members at any time.
Section stands.
Sections 68 and 69 agreed to.
On section 70-Company's register of mortgages.


Charles Hazlitt Cahan: There is a slight amendment to this section. In drafting section 70 originally I overlooked the fact that a subsection of section 66 deals with similar matters. In order that the two may be in perfect harmony I am suggesting an amendment which will be read by my colleague the Solicitor General.


Maurice Dupré: I move that in subsection
(1) lines 18 to 22 inclusive be struck out and the following substituted therefor:
70 (1). Every company shall keep a register of mortgages and enter therein all mortgages and charges particulars of which are required to be delivered to the Secretary of State and of all other mortgages and charges specifically affecting property of the company not being mortgages or charges to which subsection (1) of section sixty-six does not apply, giving in each case a short-


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 71-Right to inspect copies of instruments.
Charles Hazlitt Cahan: I would like to suggest that in line 47 the word "a" be inserted after the word " to." Then it will read, " to a fine " instead of " to fine."


Maurice Dupré: I move an amendment
accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 72-Right of debenture holders to inspect register.
Charles Hazlitt Cahan: In the twenty-eighth line
of this section it will be noticed that the words "who knowingly wilfully authorizes or permits" appear. It has been suggested that the word "knowingly" should be struck out, because the word "wilfully" implies not only knowledge but intent as well. Therefore it would avoid confusion if the word "knowingly" were struck out, so that the line would read, "who wilfully authorizes or permits."


Maurice Dupré: I move an amendment
accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 73 to 80 inclusive stand.
Section 81 agreed to.
Sections 82 and 83 stand.
Sections 84 to 95 inclusive agreed to.
Section 96 stands.
Sections 97, 98 and 99 agreed to.
On section 100-Power of court to order meeting to be called).
Harry Butcher: Section 100 seems to be a very good one, but I should like to ask the Secretary of State the special reason for its introduction. It is a new section.


Charles Hazlitt Cahan: After careful consideration
we thought this section necessary in order to enable the holding of meetings in the event of no directors or officers being available [DOT]to call such meetings, and in case it is impossible to obtain the necessary signatures to enable a meeting to be held on requisition of the shareholders. We have met with difficulties in this connection in regard to a number of companies which were in extreme financial difficulties. The directors and officers would resign and leave the shareholders in the position where a meeting could not be called, under the provisions of the present act. After careful consideration of the complaints received, we deemed this new section very
Dominion Companies Act

important, so that the court in certain cases may be authorized to call meetings.


[Stage Direction]
Section agreed to.
Section 101 agreed to.
On section 102-Mortgagee may vote.
Charles Hazlitt Cahan: In connection with this
section the word "mortgagee" which appears in the marginal note, should be "mortgagor." It is a misprint.


Maurice Dupré: I move:
That the word "mortgagor" be substituted for the word "mortgagee" appearing in the marginal note.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 103

Books.
Charles Hazlitt Cahan: There is a short amendment to this section.


Joseph Philippe Baby Casgrain: What is the nature of
it?


Charles Hazlitt Cahan: In subsection (2) it is proposed to delete the words in the eleventh, twelfth and thirteenth lines, "at which the principal duties of such agent in connection with the recording of such transfers are performed" and substitute therefor the words " where register of transfers is kept." The words appearing in the section constitute a ohrase which has crept into ou-r statutes when, possibly, some lion, member in committee has made the suggestion offhand, and they have caused confusion. We desire to use a simpler expression, namely, " where register of transfers is kept."


Maurice Dupré: I move in accordance with
the changes outlined by the minister.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 104-Register of transfers.
Charles Hazlitt Cahan: In the fourteenth line we
are suggesting to delete the word "a" appearing before the word " company," and substituting therefor the word "the," so that the section will begin with the words " the company." Then, in the nineteenth and twentieth lines we propose to delete the words " entered the particulars of every transfer of shares in the capital of the company " and to substitute therefor the words "recorded the particulars of every transfer of shares in the capital of the company entered on such a register." This constitutes a record and the legal term "recorded" is used to avoid

confusion. Then, in the twenty-sixth line we propose to strike out the word "or" after the words "branch registers" and substitute therefor the word "of." This is a misprint. Then, we propose to delete subsection (3) and to substitute the following:
(3)	Entry of the transfer of any share in the capital of the company in the register of transfers or a branch register of transfers, whether kept at the head office of the company or elsewhere, shall, for all purposes of this part, be a complete and valid transfer.
We wish to make it clear that a valid transfer is effected when it is entered in a branch transfer. Then, subsection (4) would be:
(4) In each branch register of transfers shall be recorded particulars of every transfer of shares in the capital of the company entered on such branch register of transfers.
And subsection (5):
(5)	A book or books shall be kept at the head office of the company or at the place within Canada where the register of transfers is kept, in which shall be recorded a copy of particulars of every transfer of shares in the capital of the company entered on every branch register of transfers.
Then we propose to renumber subsection (4), and make it subsection (6). The purpose of that is, that so far as effecting a legal transfer is concerned, the recording of the [DOT]transfer in the branch register is effective. But we state that there shall be kept at the head office of the company or where the register is kept a register in which the entries in the branch registers shall also be entered, so that on going to the head office of the company for purposes of investigation one may find there a complete list of all transfers which have been made either in the head office register or in the branch registers of the company. I think that is clear, and undoubtedly required.


Maurice Dupré: I move in accordance with the amendments outlined by the minister.


[Stage Direction]
Amendments agreed to.
Section as amended agreed to.
On section 105-Books to be open for inspection.
Charles Hazlitt Cahan: In the third line of subsection (1) I sliggest that we should insert after the word "transfers" the words "and books." It is an obvious mistake in printing and the section as amended would read: "register of transfers and branch registers of transfers and books mentioned in section 104."


Maurice Dupré: I move accordingly.

Dominion Companies Act


Mr. ELLIOTT:: I suggest the words should be "and the books."


Charles Hazlitt Cahan: The word "the" does not help the section.


John Campbell Elliott: It would probably avoid confusion.


Charles Hazlitt Cahan: If the hon. member wishes to have the word "the" inserted, I shall not object.


The CHAIRMAN (Mr. Sullivan):: Then, the change will be to add the words "and the books."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 106 and 107 agreed to.
Section 108 stands.
Section 109 agreed to.
On section 110-Report of inspectors to be evidence.
Charles Hazlitt Cahan: I suggest that there be added after the word "investigated" in the third line the words "or by the seal of the Secretary of State." It would then read:
A copy of the report of any inspectors appointed under this act, authenticated by the seal of the company whose affairs they have investigated or by the seal of the Secretary of State shall be admissible in any legal proceeding as evidence-
We have found this difficulty, that when investigation is made of the affairs of a company at the request of the shareholders, the officers of the company have at times refused to authenticate the report by affixing, thereto the company's seal, and we think it would be a good alternative to allow the report to be authenticated by the seal of the Secretary of State.


Maurice Dupré: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
John Campbell Elliott: Is there a provision for compelling the inspectors' report to be sent to the Secretary of State?


Charles Hazlitt Cahan: The inspector is appointed by the Secretary of State, and so the report us delivered to the Secretary of State, following which authenticated copies are distributed to the persons interested.
Section as amended agreed to.
On section 111-Books of aocount. Contents.


Charles Hazlitt Cahan: I should like to have added as subsection 3 the following:
In case the operating accounts of the company are kept at some place outside Canada, there shall be kept at the head office of the company such comprehensive records as shall enable the directors to ascertain with reasonable accuracy the financial position of the company at the end of each three months' period.
We have a number of companies organized under the Companies Act which are operating outside 'Canada, and the directors who are bound to be cognizant of the financial operations of the company sometimes, if in a minority, are not able to inspect the operating accounts because they are held outside. In other cases the parties have complained that where an investigation was made of a company whose operations were wholly or in part conducted outside Canada the records at the head office did not disclose the material facts with regard to these operating accounts. Therefore in the interests of the shareholders and others interested I am suggesting this amendment to the effect that there shall be kept at the head office of the company comprehensive accounts from which the directors may ascertain with reasonable accuracy the financial position of the company at the end of each three months' period. It is very stringent but I think it is necessary.


Maurice Dupré: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 112-Duties of directors at annual meeting.
Charles Hazlitt Cahan: I suggest in subsection 2, paragraph (j) that the words "the amount of shares of each class subscribed for and allotted" be struck out and the following substituted therefor:
The amount of shares of each class issued and outstanding.
That is more definite and comprehensive, and I am sure it will be helpful.


Maurice Dupré: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 113-Amounts paid to directors to appear in statements.
Charles Hazlitt Cahan: I wish to suggest that there should be added at the end of subsection 3 the following words:
Provided that where depreciation, obsolescence and depletion are charged against manufacturing or operating costs by the company in its accounts, net operating profit
Dominion Companies Act

may be shown after depreciation, obsolescence and depletion, if the amount charged in respect of those items for the financial period is shown as a foot note to the statement of income and expenditure.
That has been suggested by the Society of Accountants and Auditors. Some companies out of their incomes set aside the necessary amounts for depreciation, obsolescence and depletion, and if they are charged against the manufacturing or operating costs by the company in its accounts, so that the net operating profit is shown after the deduction of these amounts for depreciation, obsolescence and depletion, a footnote shall be placed at the foot by the auditor explaining that fact.


Maurice Dupré: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 114 and 115 stand.
Section 116 agreed to.
On section 117-Copies to be sent.
Charles Hazlitt Cahan: The word "is" at the end of line 40 should be changed to "in." It is a misprint.


Maurice Dupré: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 118-Appointment of auditors.
Charles Hazlitt Cahan: I suggest, Mr. Chairman,
that subsection 5 be struck out. I will present the matter as fairly as I can for the consideration of the committee. Complaint has been made to the Secretary of State that when auditors are appointed by the shareholders and do their duty without fear or favour they sometimes incur unmerited reproach and are not likely to be reelected because of their persistency in presenting the real facts to the shareholders. That is the statement that has been made to me. In order to meet this I at first suggested subsection (5) which reads:
A person other than a retiring auditor may be appointed auditor of the company at an annual meeting as hereinbefore provided, only upon a resolution passed by at least two-thirds of the votes cast by shareholders voting on such resolution.
This clause has received widespread criticism as it is claimed that it places unnecessary difficulties in the way of selecting auditors. The previous clauses provide that if an appointment of auditors is not made at an

annual meeting, the Secretary of State may appoint on behalf of the shareholders. It is also provided by subsection 3 that there must be notice of intention to appoint a particular person as auditor. It is contended that if notice of intention is given to each shareholder with regard to the appointment of new auditors, a majority vote should be sufficient. After listening to the discussion on both sides, I ask the committee to delete subsection 5 and renumber the other sections accordingly.


Maurice Dupré: I move that amendment.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 119 agreed to.
On section 120

Report.
Harry Butcher: Could not subsection 3 be amplified slightly to provide that on the request of shareholders holding ten per cent of the stock or of any class of stock the auditor shall be required to attend the annual meeting?


Charles Hazlitt Cahan: We could let this section stand in the meantime.
Section stands.
Section 121 agreed to.
On section 122-Meeting of shareholders to consider compromise.


Charles Hazlitt Cahan: These are the provisions which exist in our act to-day and they are in accord with the revised provisions of the English act. It will be noticed that subsection 3 contains the words, "unless the said judge in his discretion otherwise orders." We have sought to preserve the discretion of the judge, and I think that is the only material change made.


[Stage Direction]
Section agreed to.
On section 123-Meeting of shareholders.
Charles Hazlitt Cahan: There is a slight amendment in the twentieth line, to strike out the words "and voting."


Maurice Dupré: I move accordingly.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 124-Notice to dissenting shareholder.
Mr. BDLIOTT:: Has this section any relationship to the act passed a year or two ago with regard to compromises between companies and creditors and tying up proceedings until a meeting is held?

Dominion Companies Act


Charles Hazlitt Cahan: Since the Canadian act was passed in 1927 certain amendments were made in 1929 to the English act. We followed that act in the first place and we are now endeavouring to maintain conformity in order that the English decisions may provide guidance to our legal fraternity.


Mr. JACOBS:: I understand the hon. member for West Middlesex (Mr. Elliott) was referring to the amendment to the Bankruptcy Act. I assume that these provisions do not conflict with that act.


Charles Hazlitt Cahan: These are not in conflict with the Bankruptcy Act and they are also in conformity with the Companies' Creditors Arrangement Act passed a year ago.


[Stage Direction]
Section agreed to.
On section 125-Books to be prima facie evidence.
Charles Hazlitt Cahan: In the fourth. line the word "the" should be "be." I have another suggestion to make for a new subsection 2. Some of the legal fraternity have suggested that it might be held that this section would limit the meaning and effect of section 106, and in order to make it clear I suggest that the following be added as subsection 2:
Nothing in this section contained shall limit the meaning or effect of section 106.


Maurice Dupré: I move those two amendments.


[Stage Direction]
Amendments agreed to.
Section as amended agreed to.
On section 126-Proof of service by registering letter.
Charles Hazlitt Cahan: I have no suggestion to make except that the word "registering" should be deleted in the marginal note. This word is not included in the section itself.


[Stage Direction]
Section agreed to.
Sections 127 to 132 inclusive agreed to.
On section 133-Time from which service reckoned.
Mr. MBBC'IER (St. Henri): Why should not this be by registered letter?
John Alexander Sullivan: That is covered by section 126.


Charles Hazlitt Cahan: This is simply the notice of meeting and we thought the ordinary mail would be sufficient. The usual procedure is for the secertary to make affidavit at the opening of the meeting that he has posted the notices and delivered them to the post office.
Mr. MERCIiER (St. Henri): That is covered by section 131, and I am satisfied.


[Stage Direction]
Section agreed to.
Sections 134 to 138 inclusive agreed to.
On section 139-Application of part.
Charles Hazlitt Cahan: This section is intended to apply to all corporations incorporated under it, and to certain others, so that after the word "applies" in the first line I suggest that we should insert the words "to all corporations incorporated under it and," so as to make its meaning clear. Part of the line was dropped out in the printing.


Maurice Dupré: I move that amendment.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 140-Application without purpose of gain.
Samuel William Jacobs: There are important amendments to section 140.


Charles Hazlitt Cahan: With regard to applications for incorporation for certain purposes, provided the company operates without pecuniary gain and for objects of a national, patriotic, religious, philanthropic, charitable, scientific character, and so on, that provision had previously been inserted by an amendment in the main provisions of the Companies Act. Difficulties arose by incorporating these provisions in the Companies Act, and therefore to obviate these difficulties and prevent confusion, part 1 deals with the incorporation of companies for commercial and industrial purposes, having share capital, and we have taken out from the old Companies Act those provisions which applied to corporations without dhare capital, and have inserted those provisions in part 2, which applies exclusively to corporations without share capital. That is the only change made, I think.


Harry Butcher: Subsection 4 in the present act provides that
By-laws or regulations not embodied in the letters patent may be repealed or amended, but such repeal or amendment shall not be in force or acted on until the approval of the Secretary of State has been obtained.
Why was this subsection deleted?


Charles Hazlitt Cahan: In clause (c) of subsection 2 of section 141 we have provided that the application for the charter and the charter shall provide the mode of repealing or amending by-laws, with special provision that the repeal or amendment of bylaws not embodied
Dominion Companies Act

in the letters patent shall not foe enforced or acted upon until the approval of the Secretary of State has been obtained.


[Stage Direction]
Section agreed to.
Sections 141 to 146 inclusive agreed to.
On section 147-Powers constructively conferred by charter.
Joseph Philippe Baby Casgrain: Will the minister give some explanation of this?


Charles Hazlitt Cahan: Throughout the history of Canada we have been incorporating by special statutes separate and distinct companies, and we have always provided in a general act that certain general clauses should apply to those companies which are incorporated by special statute. This is simply a re-enactment of the special clauses which apply to companies incorporated by special statute, bringing those clauses, in one or two instances, into conformity with the general provisions of the Companies Act.


[Stage Direction]
Section agreed to.
Sections 147 to 159 inclusive agreed to.
On section 160-Shares to be persona] estate.
Samuel William Jacobs: There is an amendment in this section. It is stated that the shares in the capital stock of the company shall be personal estate. Are they not now?


Charles Hazlitt Cahan: The present act speaks of capital stock and the owners of capital stock. That is confusing, and we have introduced throughout the words "shares in the capital stock," which is the proper nomenclature.


[Stage Direction]
Section agreed to.
Sections 161 to 181 inclusive agreed to.
On section 182-Contracts by agents and officers.
Charles Hazlitt Cahan: I will ask that this section
stand as it is one about which hon. members have asked for further consideration.
Section stands.
Sections 183 to 185 inclusive agreed to.
On section 186-Liability in case of loans by company to shareholders.


Samuel William Jacobs: Anything new there?


Charles Hazlitt Cahan: The company is liable not
only for the loan but for interest as well. If malfeasance of a director leads to the making of an improper loan, he should be responsible not only for the return of the principal but for the interest which has accrued thereon in the meantime.


John Campbell Elliott: There is no change in the penalty.


Charles Hazlitt Cahan: Yes, there is. It will be
remembered that a case arose in which it was claimed that in the event of such a loan being made the directors who made the loan were liable to the creditors of the company for all debts, and we have provided that they shall be jointly and severally liable to the amount of such loan with interest to the company and also to creditors of the company for all debts of the company then existing. In other words, it must be a then existing debt for which they are liable.


John Campbell Elliott: That is, existing at the
time of the loan?


Charles Hazlitt Cahan: Yes.


[Stage Direction]
Section agreed to.
Section 187 agreed to.
On section 188-Liability of directors for wages unpaid.
Harry Butcher: A change has been made in this clause. Section 196 of the present act reads:
The directors of the company shall be jointly and severally liable to the labourers, servants and apprentices thereof, for all debts, not exceeding one year's wages, due for services performed for the company whilst they are such directors respectively, but no director shall be liable to an action therefor, unless the company is sued therefor within one year after the debt became due, nor unless such director is sued therefor within one year from the time when he ceased to be such director, nor unless as execution against the company at the suit of such labourer, servant or apprentice is returned unsatisfied in whole or in part.
In clause 188 of the new bill I notice the period for which wages are due to employees is reduced to two months. Why is that?


Charles Hazlitt Cahan: The hon. gentleman has
indicated the change. Hitherto, under the old act, directors were jointly and severally liable personally for all wages for a period of twelve months. In respect of companies employing a large amount of labour, this simply meant that a director who might be very wealthy to-day would to-morrow have everything he owned wiped out simply because of the large amount of wages which might have accrued. In reconsidering this we thought under modern conditions provision for two months' wages was satisfactory. Wages are usually paid monthly and if they are not paid for two months, then we suggest making the directors personally liable; but to make them liable for anything in excess of that would

Dominion Companies Act
place a very heavy liability on directors and make it almost impossible to procure directors for companies which may be very large employers .of labour. I am, however, in the judgment of the committee.


Mr. MERCIER (St. Henri):: Why should
the period .not be three months instead of two?


Charles Hazlitt Cahan: I am quite willing to make it three months instead of two.


Paul Mercier: I move that in the third line of section 188 the word "two" be replaced by the word "three."


Mr. GARLAND (Bow River):: I protest against the change and also against the amendment; they are both quite inadequate. The old legislation provided for twelve months' wages; that the directors should be liable for wages for the full twelve months. If there is anybody who should get what is coming to him it is the worker in the factory and I am still convinced that directors should direct and therefore should be held responsible afterwards for unpaid wages. This action on the part of the minister appears to me to be quite retrogressive in decreasing the liability of the directors for wages from twelve to two months; in any case the reduction is too extreme.


Joseph Philippe Baby Casgrain: In the Bank Act the liability is put at three months.


Edward Joseph Garland: I am talking about this legislation. I should like the minister to state any case of extreme hardship under the operation of this section under the old act. Can he give any single case?


Paul Mercier: An industrial company that could not pay wages for a year is one that would go into bankruptcy long before that.


Joseph Philippe Baby Casgrain: In the Bank Act
clause 88 limits claims in respect of wages to three months. Wages, salaries or other remuneration of persons employed shall have precedence over the claims of the bank for a period not exceeding, three months.


Charles Hazlitt Cahan: I am in the judgment of the committee. Personally I would not vote to make the period a year because I think it is excessive. If employees, servants, officials of a company are not paid within a period of three months, which is the term my hon. friend suggests, they should take appropriate means to obtain a judgment and security by judgment and levy against the property of the company. I do not think it is right or
just that in many cases officials such as clerks and others who are receiving large salaries should hold off for month after month and then proceed against the directors of the company. I know in one case, although I had not this in mind when this change was made-the change was made by a general recommendation-I was not compelled thereto by the court, but, recognizing the law, I paid out thousands of dollars of my own money in order to pay off clerks and other officials employed in a company when I, as a director, had no knowledge that their salaries were accumulating. They knew I was then a man of some means and could be compelled to pay, and they thought to secure judgment against me. I state that from my own experience and it happens in many cases. It is quite right that a period of two or three months should be provided, but employees ought to take proceedings before the assets of the company are completely dissipated and not rely entirely upon the responsibility of an individual director who may have no knowledge or notice of the fact that their salaries are not paid.


Paul Mercier: We must
not forget that this is a special privilege given by section 188 against individuals in connection with the salaries of workingmen. In the province of Quebec a workingman is only entitled, according to law, to the last twenty days unpaid, as a privilege.


Joseph Philippe Baby Casgrain: I do not know if there
is an amendment before the committee, but if there is no amendment I will move that it be made three months. I do not see anything wrong in that when in the Bank Act it is also made three months.


Mr. GUTHRIE:: This is hardly the same as the Bank Act. In that act it has to do with a claim against the assets of the company, while this is a personal claim against the directors of the company.


Joseph Philippe Baby Casgrain: The directors are supposed to be responsible.


Hugh Guthrie: Under the Bank Act it
is the assets that are liable, and there is a three months' preferential claim allowable for wages. In the present act there is a personal claim against the directors of a company.


Joseph Philippe Baby Casgrain: I do not see that there would be anything wrong in making it three months.


Edward Joseph Garland: I do not
see that it would be wrong to leave it in its original form. Neither the minister nor
Dominion Companies Act

any other member of the house has yet adequately justified the proposed amendment. I do not see why the minister is now cutting down the period from a year to two months, nor do I see the point of the hon. gentleman to my right in raising it one month more. While I may be affected to some slight degree by the personal experience of the minister I do submit after all that he was in a better position than the unfortunate wage earners were at that time, and that his suffering was considerably less than theirs. In my opinion the government will not improve their position by amending this legislation in this way.


Samuel William Jacobs: Does my hon. friend want
to improve the position of the government?


Edward Joseph Garland: If they
can improve their position by passing good legislation that takes into consideration the well being of the masses of the people rather than of a few directors, I am in favour of their doing so.


Samuel William Jacobs: Does my hon. friend know
that this is an exceptional law? The indebtedness is always due by the company, but inasmuch as the workmen may or would suffer they have incorporated a special clause which says that in addition to the company proper the directors also, will be responsible. That is why we want to make it as light as possible on the directors, because at common law they are not responsible; it is the company that is responsible. By special statute, however, we are saying that inasmuch as the directors might have exercised more care and prudence in seeing that the people were paid, they should be penalized by being made personally responsible in addition to the responsibility of the company.


Edward Joseph Garland: I do not
think the directors should be allowed to escape the full onus of their responsibility if they neglect to inform themselves in connection with the affairs of the company.


Joseph Philippe Baby Casgrain: They do not.


Edward Joseph Garland: The hon.
member has interrupted quite a lot, but I am not sure that he knows very much about it.


Joseph Philippe Baby Casgrain: I know as much as you do.


Edward Joseph Garland: Then I am surprised that the hon. member is not defending the rights of the workingman rather than the rights of the directors.


Joseph Philippe Baby Casgrain: I am doing it in my own way.


Paul Mercier: I doubt if there has been a workingman who has had to claim wages for one year.


Charles Hazlitt Cahan: Unless you change this statute it simply means that the moment a director finds that there is a delay in the payment of the wages of the employees he will resign to escape this liability, because the moment he resigns he is free of further liability. What we desire is to have a provision in this statute by which the director will know exactly what liability he assumes personally by continuing to give his services in the direction of the affairs of the company. Rather tian have wholesale resignations such as we have seen in past years to escape this personal liability I was suggesting that the period be made two months. I am perfectly willing to accept three months, or if the committee prefers four months I am quite willing to accept that. My own view in the matter is not decisive, but if we continue the section as we have it now, so that a director's liability for wages continues for one year you will find in the future, as you found in the past, that you will simply provoke the resignation of directors without protecting the workingmen.


Harry Butcher: I notice that under part I of the present act directors are liable for wages for six months. That is in section 113, which reads:
The directors of the company shall be jointly and severally liable to the clerks, labourers, servants and apprentices thereof, for all debts not exceeding six months' wages-
That is in the case of a public company. Here we have the case of a company incorporated by statute, where the period of responsibility is twelve months. I think that is excessive; I agree with the Secretary of State, and I am quite willing to support the amendment, reducing it to six months.


Charles Hazlitt Cahan: Supposing we agree on six months, which is certainly ample.


Mr. MITCHELL:: I cannot agree to that. The minister said he had received representations from many sections of the country, from men skilled in this form of legislation. So far as I know he has not consulted any of the labour organizations in this connection. I do not know that any great injury was done to business under the old legislation, and I think some protection is due the men and women engaged in industry, under legislation of this description. I do not see any reason for the change.

Dominion Companies Act


Hugh Guthrie: Does it occur frequently or at all that wages are in arrears for twelve months?


Joseph Philippe Baby Casgrain: That is what I was going to ask.


Hugh Guthrie: I remember when the particular clause in the Bank Act that has been referred to first came up for consideration in this house; I recall that I had the honour of putting it in the Bank Act, and at the time it was very bitterly opposed by certain interests. Until the revision of 1913 there was no protection, and I claim to be the author of that clause, as the records will show. It was represented to me at that time that three months was ample. I brought in the clause at the instance of trade and labour organizations in Guelph, where men had suffered very serious losses through the failure of two companies, which I well remember. At that time it was represented to me that very seldom, if ever, were wages allowed to go three months in arrears. I do not know the situation to-day, but in my experience wages are not allowed to run in arrears for a year. Personally I would think that six months would be ample to protect the rights of the wage earners, though I have no very strong opinion one way or the other, except that they should be protected.


Mr. BURY:: I find myself rather opposed to the suggested change, for I think a director can very well protect himself. But if it is to be changed to sax months I would suggest that where a director has positive knowledge that the company is carrying on without paying its servants, that positive knowledge should make him liable for twelve months, and exonerate the directors who have no positive knowledge that the company has been carrying on so long without paying its labourers and servants, or limit their liability to six months. I think a director who is a party to carrying on the business of a company, knowing that the employees are not paid, should pay for what he knows. After all, it is easy to say that employees should take action against a company, but in most cases,-and aspecially with conditions as they are to-day -employees do not wish to take actions for wages, because it would mean that they would be put out of employment. They hold on to their jobs in the hope that the business of the company will improve, and that ultimately they will be paid. If an amendment could be made in such a way as to make a director who has positive knowledge that the employees and servants of the company are 74726-220
not being paid liable for twelve months, and the directors who do not know and who have not that knowledge for six months, I would have no objection.


Mr. RYERSON:: How are you going to do that?


Ambrose Upton Gledstanes Bury: Let the matter be brought to the knowledge of the directors by employees of the company.


Mr. DUPUIS:: On whom would the burden of proof be placed, the director or the employee, to prove that the director has knowledge of the fact that wages are not being paid?


Edward Joseph Garland: Yes, how could that be proved?


Ambrose Upton Gledstanes Bury: I think there would be no difficulty. Naturally, the burden of proof would be on the servant or the employee.


Vincent Dupuis: That would be unjust.


Ambrose Upton Gledstanes Bury: It would be on the employee who is making the claim. He could give positive notice to the directors in whom he has faith, and in that way he would be in a position to prove that he called the attention of the directors to the fact that his wages had not been paid.


John Campbell Elliott: I think the change from twelve months to two months is too radical. I agree however that twelve months is too long. I cannot accept the point of view of the hon. member who has just spoken, namely that we will be much farther ahead, or that the wage earner will be much farther ahead if he has imposed upon him the obligation of showing that a director had knowledge. As a general rule, the substantial man among the directors against whom the old section operated most harshly would not have the knowledge. Frequently, even if he did have it, it would be quite difficult if not impossible to prove it. My recollection of the law with regard to preferential liens for wages, under our own Assignments and Preferences Act, was that the period was for three months. I am speaking only from memory, but that would seem to be about the proper time. As this is a change from what we have had previously I would favour going no farther than cutting the previous time in two. I think it should be a six months limitation.


John Alexander Sullivan: The amendment before the committee is that the word "two" be replaced by the word "six."


Samuel William Jacobs: If we accept the amendment we will have to revert to section 96.

Dominion Companies Act


Charles Hazlitt Cahan: That applies to another class of companies.


Samuel William Jacobs: But they are companies, and it makes no difference to the labourer how a company is incorporated. We cannot make fish of one and fledh of another. If we change one to six months I suggest we should change the other to six months.


Charles Hazlitt Cahan: They do not apply to the
same companies.


Samuel William Jacobs: I know that.


Mr. MacINNIS:: I was wondering who
asked for the change in the section, the representatives of the companies or the representatives of the employees.


Charles Hazlitt Cahan: I can tell the hon. gentleman at once that this does not arise from a suggestion of mine. In the last two years we have had case after case concerning small companies conducted in towns and villages by directors who have handed in their resignation because they were becoming liable for unpaid wages. Their employees have gone to them and besought them to remain in office so that the enterprise might be carried on for a longer time in the hope that some compromise might eventually lead to the reestablishment of the company. Under the old arrangement the only alternative to the director was to resign, to get out and to leave the company to await dissolution.


Angus MacInnis: As the government is
bringing in this measure they will certainly take some responsibility for relations between employers and employees. Instead of reducing the number of months I think there could be a clause inserted in the bill whereby the onus would be placed upon a company to notify the Secretary of State that such company was no longer able to pay wages. Then it would be the function of the government to take whatever steps were necessary under those circumstances to protect the employees. But we are not going to protect them by simply reducing the number of months.


Charles Hazlitt Cahan: So far as I know this clause does not affect only the ordinary day labourer. It includes superintendents, clerks, and a whole body of well paid employees and officials. The ordinary employee has his three months' preferential right with respect to the entire assets of the company.


Edward Joseph Garland: I have lost my understanding of the English language if the interpretation given by the minister is correct.


Charles Hazlitt Cahan: I said in actual operation.
^Mr. Jacobs.]


Edward Joseph Garland: The clause does not refer to high paid officials, but refers to clerks, labourers, servants and apprentices.


Charles Hazlitt Cahan: The term "clerk" has a very broad meaning.


Edward Joseph Garland: It evidently has, in the mind of the minister.


Hugh Guthrie: It really includes the
whole staff.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 189 to 205 inclusive agreed to.
On section 206-Registration and transfer offices within and without Canada.
Charles Hazlitt Cahan: In order to make this clause consistent with other clauses as amended I propose an amendment to it. The amendment has been printed in the votes and proceedings, and I believe hon. members are familiar with it. There is nothing inconsistent except this, that it provides not only for the registration and transfer of shares but for the registration of bonds and other outstanding securities. The provision with regard to registry is the same as that already adopted in the previous provision, and it applies to all companies. At the present time under the Ontario Companies Act there is a provision that if there is an improper registry application may be made to the court on a summary proceeding. We did not have that provision in the Companies Act of Canada, and therefore I am providing that the court of any province in which the head office or chief place of business of the company is situate, shall have jurisdiction upon the application of any person interested, to order that any improper entry in the books for the registration and transfer of shares of the capital stock of a company may be struck out or otherwise rectified on the ground that at the date of such application the entry as it appears in any such book of registry does not accurately express or define the existing rights of the person appearing to be the registered owner of any shares of the capital stock of the company; and the court, in deciding such application, may make such order as to costs as the court may deem proper.
Then subsection 5 is new. It reads:
An application for the rectification of any entry under the next preceding subsection may be made either by filing with the proper officer of the court a petition or an originating summons or notice of motion; and the court may direct the trial of any issue arising out of such application.

Inquiries Act
It introduces a provision with respect to dominion companies whereby in case a rectification of the register and transfer book is required to prevent fraud, a summary application may be made to the court by petition as in the province of Quebec, where an originating summons does not form a part of the procedure. In other provinces the usual procedure is by an originating summons or a notice of motion, and on that the judge can hear the application and state an issue to be tried summarily. A similar provision exists in some of the provincial acts, but in respect of the dominion act it has always been necessary heretofore to commence a substantive action in the ordinary course.


Maurice Dupré: I move the amendment
accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 207 and 208 agreed to.
On the schedule.
Charles Hazlitt Cahan: At page 98, line 27 of form 1 of the schedule there should be a blank 6pace before the word "shares."


Maurice Dupré: I move accordingly, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Schedule agreed to.
Ambrose Upton Gledstanes Bury: A complaint has been made
that, in the case of companies which have set up subsidiary companies, the shareholders of the main company are not given the information to which they are reasonably entitled as to the operations and financial position of the subsidiaries. One company in particular which has a number of subsidiary companies was mentioned to me. The subsidiary companies have lost considerable funds, and the shareholders of the original company, as I understand it, have not been able to get information as to the financial condition or operations of the subsidiary companies. Can the Secretatry of State tell me whether there is any provision at all in this bill covering that?


Charles Hazlitt Cahan: There are provisions in the bill which require a very full disclosure with regard to subsidiary companies. Those sections now stand for further consideration. In the meantime I will bring them to the attention of the hon. gentleman in case he should wish to make any other suggestions.


Samuel William Jacobs: Might I ask if the hill will
be reprinted before it comes up for third reading?
74726-220 J


Charles Hazlitt Cahan: I did not intend to reprint
because every one of the suggested amendments will be found in the votes and proceedings of this morning.
Progress reported.



INQUIRIES ACT AMENDMENT

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved the second reading of Bill No. 84, to amend the Inquiries Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Gobeil in the chair.
On section 1-Authority to confer powers upon.
Joseph Philippe Baby Casgrain: May we ask the hon.
minister who is in charge of this bill to give *us an explanation? I see it contains only two clauses.


Hugh Guthrie: The explanation is very
simple. We propose to add a new part, part 4, to the Inquiries Act. The purpose of it is to enable international commissions and tribunals to take the evidence of witnesses in Canada, subject to such limitations as the governor in council may impose. Part 1 of the present Inquiries Act provides for the issue of a royal commission to take evidence and conduct inquiries in Canada. It frequently happens that another nation issues a commission and desires to take the evidence of persons in Canada. There is no power at present to grant them that right, and so it is proposed by this bill that when the governor in council sees fit, and under such limitations as he may impose, this courtesy shall be extended to other nations which extend the like courtesy to Canada.


Joseph Philippe Baby Casgrain: Does that mean that
these commissions will examine witnesses and inquire into facts in Canada at the instance of other governments?


Hugh Guthrie: Yes.


Joseph Philippe Baby Casgrain: Has the minister any
case in mind which brought to his attention the necessity for such a provision? Has there been any case where we did not have but wanted such a provision?


Hugh Guthrie: I think I could suggest
them. The bill is brought in at the instance of the Department of External Affairs as a matter of courtesy to nations that grant us the same privilege.


Samuel William Jacobs: Does that apply to criminal as well as civil matters?
3472	COMMONS
Supply-Agriculture-Insect Pests


Hugh Guthrie: No, the Inquiries Act applies only to civil matters.


Joseph Philippe Baby Casgrain: What inquiries might be instituted under subsection 2.


Hugh Guthrie: Inquiries in connection with estates which have been held in abeyance and things of that kind are the only requests of which I have heard.


John Campbell Elliott: Subsection 1 reads: "The governor in council may, whenever he deems it expedient," and so on. Is it intended that each application shall be dealt with separately?


Hugh Guthrie: Oh, yes, no commission will issue except on special application.


Samuel William Jacobs: I suppose we have corresponding rights in other countries?


Hugh Guthrie: Unless we have we will not issue a commission.


Samuel William Jacobs: Reciprocity.


John Campbell Elliott: A step in the right direction.	-


[Stage Direction]
Section agreed to.
Bill reported.

[Stage Direction]
The house in committee of supply, Mr. Gobeil in the chair.
Entomology, including investigations and inspections relating to destructive insects and pests, $350,000.
Mr. MOTHERWELL:: We were discussing this item last Friday and the concluding words of the minister were that last year there had been no neglect of the grasshopper work, that everything was done properly and expeditiously. I do not know personally but what it was but I pointed out that whoever was to blame, the fact was that the provincial government ran out of poison bait on more than one occasion giving the grasshoppers a free fling for quite a while. The result was that their flight was more general and scattered and they spread to pastures new as far north as the North Saskatchewan river, and likewise over the other prairie provinces, according to grasshopper maps supplied by the minister's officials. I should like to know if any of the votes under the relief act were earmarked for the control of grasshoppers last year? I know there is one this year of a million and a half dollars.

Mr. WiEIR (Melfort): I could not say how the money was supplied. My memory is that it was in the nature of a loan to the province but I believe there was no special earmarking. One of the difficulties last year was that the organization was not as complete as it is this year. This year every energy of both governments has been devoted to this problem.


William Richard Motherwell: The votes and proceedings indicate that there is a large loan of a million and a half dollars for the control of grasshoppers in Saskatchewan during the month of May alone. I was just wondering how much of this was to control grasshoppers and how much was to control "Grithoppers." A vast sum has been poured into Saskatchewan; I am not critical as they will need it and a lot more to secure any political results, but I should like to direct attention to the support or lack of support given last year and that given this year. Last year there was no election and the grasshoppers had it pretty nearly their own way. I am not critical except to approve about money being spent to control grasshoppers but there is such an amazing difference between the amount going to Saskatchewan and that going to the two adjoining provinces for all purposes. As far as I can make out, the other provinces are covered with an equal density of grasshoppers, but a lesser crop acreage. The maps show that Saskatchewan is well in the red but so are Manitoba and Alberta. There are no large sums, or indeed any at all, going out to control grasshoppers in Alberta and Manitoba but there are no elections in those two provinces. I think the minister would be well advised to post himself on these things. I have been unable to get to the bottom of it but I have learned enough to know that millions are being poured into Saskatchewan and relatively much more than the adjoining provinces combined. It has not been a few thousands at a time, it was a million and a half at a time and there have been nearly 16,000,000 poured into Saskatchewan for grasshopper control, relief road work, etc., during this month of May, and it is not out yet. There may be another loan shower before the end of the month. The areas in the other provinces may not be quite as large, as Saskatchewan turns out a crop nearly equal to that of the other two provinces combined, but these other provinces have nearly as many grasshoppers.


Sir GEORGE PERLEY:: Will the hon.
gentleman explain what he means by saying that $6,000,000 have been sent this month to Saskatchewan to look after the grasshoppers?

Supply-Agriculture-Insect Pests


William Richard Motherwell: Not the whole of
it. There was a million and a half for grasshoppers plus the balance of the six million for relief, public works and roads. All of this is very handy in an election year.


George Halsey Perley: Does the hon.
gentleman object to this government loaning money to Saskatchewan?


William Richard Motherwell: 
George Halsey Perley: I am sure the hon. gentleman does not want to make political capital-


William Richard Motherwell: Oh no, but I want to let the country know what my hon. friends are doing-


George Halsey Perley: Quite so.


Mr. McINTOSH:: Are they trying to buy them with their own money?


William Richard Motherwell: -pour into that province another five millions. I will not object to it, but I can tell my hon. friends that it will be of no avail to them politically. Nothing will save the situation for them out there-not if they put in the entire agreement amount, and I do not know what that is. Maybe my hon. friend opposite, the dean of the government, who is getting a little bit worried, will let us know to what amount they go in the agreement with Saskatchewan this year. What is the aggregate of loans to Saskatchewan provided for under the last agreement?
3474	COMMONS
Supply-Agriculture-Insect Pests


George Halsey Perley: As regards these loans in May, this month, they were in part a direct loan but in greater measure they were simply renewals of cddi loans. The province had not been able to pay, and if the hon. gentleman thinks we ought to force Saskatchewan to pay now, he will have to consult the province.


William Richard Motherwell: I did not count the old loans; that would be additional.


George Halsey Perley: I beg your pardon-


William Richard Motherwell: I did not count the old loans in this. I am quite familiar with the difference between new notes and renewal notes. These are new orders. Let the ministry who have charge of it all give us the correct figures if I am wrong. Let the vote stand until we know what is going on, because we are entitled to know why all this money has been going out to Saskatchewan at this particular time and no assurance that any will be spent at all on grasshopper control. I would suggest to the members from Ontario that they check up on how much is going into that province just now. It would be just accidental of course, but it is an interesting study.
Maybe there will be enough out of the six millions loan to clear up the grasshoppers; if so it will be much better than was done last year otherwise the next flight will land the hoppers up into my hon. friend's constituency. On the west side of the province they are up to the north Saskatchewan, and they will be up through Melfort unless they are kept down this year much better than last. This six millions may do the trick, but I would suggest that they reserve a little bit for the grasshoppers and not all for the Grithoppers. The minister ought to make a statement before six o'clock. I notice that the press carried a beautiful statement from him last Saturday but that is all they did carry. Will they carry anything of this expense, I wonder. If so they will need to view it from a different angle. But I don't care a continental whether they do or not. That is for the benefit of the gallery.
The grasshoppers' eggs are deposited through Saskatchewan from the Manitoba boundary to the Alberta boundary, going up as far north in Manitoba as lake Manitoba, lake Winnipeg, east of Winnipeg and right out to the Saskatchewan frontier. If my hon. friend will consult his officers he will find that the area covered with grasshopper eggs and grasshoppers this year is four times

as large-well, I will not say four times because I have not made measurements, but at least three times as large as last year. And this is due largely to the fact that the Saskatchewan government had not the poison dope to keep the hoppers down before they started their flight and were not supplied with any earmarked loan for hopper control by the federal government as has been done this year.
The statement my hon. friend made last Friday was not strictly accurate when he said it was not attributable to the neglect of the government. Whose neglect was it? It was a bankrupt province they were dealing with a year ago just as much as now, but it was not an election year, and the grasshoppers had their full swing with the result that we are faced now with an invasion three times as dangerous as we had a year ago. The minister gets out a nice statement indicating that he had an agreement or arrangement with the United States. But the United States government spent much money last year, on the fight against hoppers, and my hon. friend cannot tell me whether his own government contributed anything other than advice and supervision. It would be a relief to me to learn that he had, because that would exonerate them from some blame and the suggestion that they gave money for grasshopper control only in the year of an election. There are enough prospective grasshoppers now 'to eat sixty per cent of the entire crop in Saskatchewan, we are officially informed, but the minister hopes to save fourteen bushels out of every fifteen.


An hon. MEMBER:: Grasshoppers?


William Richard Motherwell: I don't mean
bushels of grasshoppers. He hopes to save, out of every prospective fifteen bushels of wheat to the acre, fourteen bushels. If he can do that he should be kept on as Minister of Agriculture from now until eternity, or at least until the grasshopper plague is over. Nobody has so far been able to do it and I shall be the first to congratulate the minister and his officials if they can. There is no doubt good work was done in the preparatory operations of last fall. As was pointed out, however, by the hon. member for Willow Bunch (Mr. Donnelly), the government officers were out advising, supervising, telling the farmers what to do-to plough deep and bury the eggs. Hon. members know the old ditty:
Plough deep while sluggards sleep
And you shall have corn -to use and' to keep.

Supply-Agriculture-Insect Pests
How could the farmers plough deep with their skinny horses, the bones just cutting through the hide, and the government coming along with the oats two months too late, at the tail end, always behind like a cow's tail? In ithe meanwhile the grasshoppers are hopping around and getting their work in. That is the situation. I shall be the first to congratulate the minister if he can show that he has had big loans earmarked by orders in council for hopper control last year. I shall still have some inquiries as to why over five times as much money is pouring into Saskatchewan in the month of May as into Manitoba. This may be just an accident; there is an election on in Saskatchewan but surely that is not the only reason.


Cameron Ross McIntosh: Three weeks from today will tell the tale.


William Richard Motherwell: The two adjoining
provinces are nearly as red as ours with grasshoppers, but they are not getting as much together as Saskatchewan is getting alone nor nearly half as much, and none at all for hoppers. Will the minister kindly explain?


Mr. WEIR (Melfort):: To clear up one
reference made by the hon. member for Melville about the saving of fourteen bushels out of fifteen bushels to the acre, may I say that that statement was made with the qualification: If the farmers would carry out the program, as outlined. It was not on the basis of an estimate; it was on the basis of actual results as having taken place when thorough control methods were lived up to.


William Richard Motherwell: I think that would be right. If there were enough grasshopper bait and sufficient man help to distribute it, that could be nearly done, I think.


Robert Weir: The areas 'that
are infested with grasshoppers are as follows:
Very Severe
Province:	Acres
Manitoba	 661,000
Saskatchewan	  18,123,000
Alberta	 3,064,000
Total Area of Crop Land Requiring Organized Control
Province:	Acres
Manitoba	 2,000,000
Saskatchewan	 14,755,000
Alberta	 3,500,000


Cameron Ross McIntosh: Just what parts of the
three provinces dio those figures cover? Mostly in the south and centre?


Robert Weir: Mostly south and
centre.
It is rather difficult for one coming from Saskatchewan and having been as closely in touch with conditions in that province as I have been through the portfolio I hold, to reply with any degree of restraint to what I consider the most unworthy exhibition that has ever been given in this house since I have had the honour to be in it-


William Richard Motherwell: Hop to it as far as you like.


Robert Weir: -and especially because of the support the hon. member for Melville was given by the hon. member for North Battleford, also from the province of Saskatchewan.


Cameron Ross McIntosh: Hear, hear.


Robert Weir: And the hon. member says "hear, hear," showing that he has no shame with reference to the remarks he has made. The method of dealing with grasshoppers, outside the supplying of poisoned bait, is that of ploughing down the grasshoppers at times when it is recommended that this operation should take place. In Saskatchewan we have 18,000,900 such acres that have to be cultivated and prepared to meet and defeat the ravages of the grasshoppers. The regrettable part is that this area is one where for years there have been successive total or very considerable partial crop failure. The result is that the farmers there are not equipped with feed to carry out these operations or with gasoline for -those who use tractors. It is in this connection that the money is advanced so that they may pay for feed that is bought and for which commitments have been made or where necessary that they may buy more feed for this particular operation. For this purpose some of this feed has been already purchased and used and this year the same as other years the identical policy has been followed of meeting the demands of the various provinces when they submit a statement to us that they are in a position to deal with the abnormal demands made upon them. This is true particularly in connection with Saskatchewan that has been hit incomparably with other provinces by forces over which neither they nor any other human agency had any control. In Saskatchewan the cost of feed for live stock, including the price of the feed itself and also the freight, has been the biggest load they have had to carry. The area being
Criminal Code-Lotteries

so extensive necessitates a long rail haul and heavy charges in getting the feed into the districts from localities where a supply of it is available. That is why it has been necessary for us to make these large payments and I can assure the hon. member for Melville (Mr. Motherwell) and the hon. member for North Battleford (Mr. McIntosh) that I could not imagine any greater contrast than the attitude of the members of the government of Saskatchewan who have for the past four years been charged under drastic conditions with the administration of the affairs of that province and especially of looking after the farm population, and that of the hon. members whom I have named. Their whole outlook toward public service or public administration or public welfare seems to be in this case in the open with guards down, purely political. In that respect one could not expect anything else; they are worthy followers of their leader who not only made the statement but repeated it at a later sitting of the house in 1930, showing that it was well thought out, that his attitude towards public funds was this, that when a province had a government that was not of the same political party as his own he would not give a five cent piece.


Cameron Ross McIntosh: That is a lot of rot.


Robert Weir: His whole attitude was political and I say that the hon. members who have spoken this afternoon have certainly given ample evidence that they are his worthy and true followers.


William Richard Motherwell: What is my hon. friend giving evidence of? He has made no answer to my statement except a lot of blather about a number of other irrelevant matters.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILL



THIRD READING

[Stage Direction]
Bill No. 28, to incorporate Ancient Foresters' Mutual Life Insurance Company.-Mr. Bell (West Hamilton).

[Stage Direction]
Mr. P. F. CASGRAIN (Charlevoix-Sague-nay) moved the second reading of Bill No. S3, to amend the criminal code (lotteries). IMr. R. Weir.]
He said: As I said on a previous occasion, Mr. Speaker, the object of this bill is to amend section 236 of the criminal code which makes it an offence to print or conduct a lottery scheme, or to sell or buy lottery tickets. Subsection 6 of that section excepts from the operation of section 236 raffles at church bazaars, certain rewards to promote thrift, securities recallable by drawing lots, the Art Union of London and the Art Union of Ireland. The present bill seeks to add to that list of exemptions lotteries conducted for educational or public charitable purposes under the law of any province.
I might remind the house that at the last session of the Quebec legislature Bill 41, to authorize the organization of a lottery for educational and public charitable purposes, was adopted unanimously by the lower house and accepted by the legislative council of that province. That bill is to become law when it is sanctioned by the lieutenant-governor in council. Section 6 of that act provides:
The power given to the lieutenant governor in council by section 1 shall be exercised only if a lottery of the nature of that contemplated by this act is not prohibited by a statute of the parliament of Canada.
Moreover, such power shall not be exercised if the parliament of Canada authorize the Canadian government to organize a general lottery in the whole of Canada, for purposes similar to those contemplated by the preceding provisions.
I think the real purpose of this bill was to come to the assistance of the educational and charitable institutions in the province of Quebec. Some days ago there was a debate in this house on another bill, which had not the same purpose, which bill was defeated. During the course of the debate reference was made to the bill now under consideration. The Secretary of State (Mr. Cahan) is reported as having said:
Therefore, on that issue if the bill introduced by the hon. member for Charlevoix-Saguenay comes before this house for decision I think my position is clear. Unless I hear some very strong objection which, up to the present, 1 have not heard', I think I should have to except the provincial law from the operation of the criminal code, and to that end would vote for the measure. So far as any personal request of mine may have force and effect in this chamber may I state I think it most desirable that an opportunity be given by the house to the consideration of Bill No. 83.
In another place the hon. gentleman said:
Therefore, if we are to approach the real issue it appears to me that it can be approached only by some such amendment to the criminal code as that proposed by the hon. member for Charlevoix-Saguenay (Mr. Casgrain).

Ways and Means-Customs Tariff
Therefore I have introduced this bill and I would ask that hon. members give it their best possible consideration, because in the province of Quebec it has been considered necessary, in order to further the objects and aims of that province, to adopt such a lottery system which would be conducted according to the rules and regulations set out in the bill which received the unanimous support of both houses of the legislature of that province. I think this is the proper way to deal with the question; I hope hon. members will see their way clear to support this bill, since it does not force lotteries upon any province of Canada but merely allows the province of Quebec to make use of lotteries in accordance with the bill to which I have referred.
Hugh Guthrie: Speaking on behalf of the government in regard to this measure I have only to say that as the house expressed its opinion on the general principle involved in this bill only a week ago, with a very decisive majority, the government -cannot accept this bill as an amendment to the criminal code.
Motion negatived on division.

The house in committee of supply, Mr. Stirling in the chair.
Progress reported.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Stirling in the chair.
Customs tariff-99e. Dates, n.o.p., per pound: British preferential tariff, 1 cent; intermediate tariff, 1| cents; general tariff, 24 cents. When in packages weighing two pounds each, or less, the weight of such packages to be included in the weight for duty.
James Layton Ralston: I just want to see the
order in which the minister proposes to take up these resolutions. Is he dealing with the tariff first?


Mr. RHODES:: I thought I would take
up the tariff items first, which appear at page vii of the votes and proceedings of April 18. Before dealing with the first item which appears in the schedule, which is item 99e, in order to preserve the chronological order of the items as they appear at present in the tariff. I want to deal with items 79, 79b, 79c, 81 and 82, which have to do with nursery stock, arising out of a report of the tariff board recommending certain changes in the various items which I shall table as soon as
the house resumes. For that purpose, inasmuch as it might not be desirable to proceed at the moment with the individual items, I propose to place the changes in the hands of the chairman, so that they may be shown in the votes and proceedings and will be available to hon. members the next day we are in committee.


James Layton Ralston: Would the minister
indicate the effect of the report?


Edgar Nelson Rhodes: Yes. The first commodity dealt with is peonies, shown in present item 78. The rate is left precisely as it is now. The rates as proposed on hydrangeas in the recommendation of the tariff board are free, 15 per cent and 20 per cent, as against the present rates of 15 per cent, 25 per cent and 25 per cent.


James Layton Ralston: Item 78 does not include hydrangeas.


Edgar Nelson Rhodes: No, that is correct. Then, item 79 includes dwarf polyantha rose bushes, and the rates recommended by the tariff board will be free, 15 per cent and 20 per cent, as against 124 per cent, 174 per cent and 20 per cent. At present the tariff rates on laurel are free, free and 40 per cent.


James Layton Ralston: What item is that?


Edgar Nelson Rhodes: Item 79; I refer to the proposed item. You cannot follow them exactly, because the present item is 79b.


James Layton Ralston: They do not correspond?


Edgar Nelson Rhodes: No, it is reworded. The new rates are free, 15 per cent and 20 per cent. Then, the present rates on holly, natural, are free, free, and 40 per cent, and the new rates will be free, 15 per cent and 20 per cent. The present rates on holly, preserved, are 15 per cent, 25 per cent and 25 per cent, and the new rates will be free, 15 per cent and 20 per cent. Then, the present rates on buds and scions for grafting are free, 15 per cent and 20 per cent. Under the new rates they will be free, free and free. Peach pits at the present time are 5 per cent, 10 per cent and 15 per cent, under item 73. The new item will be 79c, and the new rates will be free, free and free. Under the present rates apple trees are listed at 2 cents, 24 cents and 3 cents under item 81. The new item will be 81a, and the rates will be free, 6 cents and 74 cents. Then, pear, plum, cherry, apricot and quince trees at the present time are shown at 2 cents, 24 cents and 3 cents, whereas under the new rates they will be free, 8 cents and 9 cents

Ways and Means-Customs Tariff


James Layton Ralston: Under what old item?


Edgar Nelson Rhodes: The old item will be the same.


James Layton Ralston: What number?


Edgar Nelson Rhodes: The new item is 81b. Then, peach trees, including June buds, are at the present time 2 cents, 2i cents and 3 cents. The new rates are free, 5 cents and 6 cents. Under the present item 82, grape vines, gooseberry, raspberry, currant and rosebushes, are shown at 12i, 17J and 20 per cent. The new rates on grape vines, gooseberry and currant bushes, item 82a, are free, 2 cents and 21 cents. It will be observed that under the intermediate and general rates there has been a change from an ad valorem to a specific duty. Then 82b includes raspberry, loganberry and blackberry bushes, upon which the present rates are 121 per cent, 171 per cent and 20 per cent. The new rates will be free, one cent and one cent. In respect to the new item 82b, the present rates under item 711 are 15 per cent, 25 per cent and 25 per cent, and the new rates are free, one cent and one cent.


James Layton Ralston: Does the new item apply to specific articles, or is it the same general item?


Edgar Nelson Rhodes: It deals with rhubarb roots. Then 82c includes asparagus roots and strawberry plants. The present rates are 15 per cent, 25 per cent and 25 per cent and the new rates are free, one-quarter cent and one-quarter cent.


James Layton Ralston: What is the number of the old item?


Edgar Nelson Rhodes: The same as the last one, 711. Then, rosebushes, 82d, now found under item 82, are shown at 121 per cent, 171 Per cent and 20 per cent, and the new rates are 11 cents, 3 cents and 7 cents. On trees, shrubs and vines, commonly known as nursery stock, the present rates are 121 Per cent, 171 per cent and 20 per cent, and the new rates are 121 per cent, 171 per cent and 30 per cent. That covers the complete list.


James Layton Ralston: These changes are all proposed to be made as a result of reports by the tariff board?


Edgar Nelson Rhodes: Yes; I have the report of the tariff board which I shall table as soon as we are in the house. Perhaps I had better table the resolution at the same time.


James Layton Ralston: When was the report brought down, or made?


Edgar Nelson Rhodes: I have had it a few days, but my hon. friend will realize it would be impossible to bring it down prior to the moving of the resolution itself.


James Layton Ralston: The report was not down at the time of the budget?


Edgar Nelson Rhodes: No; it has been in my hands only a day or two.


James Layton Ralston: I understand the minister will not deal with these items in detail tonight.


Edgar Nelson Rhodes: No, I am quite content that they should stand until the next sitting.


The CHAIRMAN (Mr. Stirling):: Shall the item carry?


Edgar Nelson Rhodes: The effect of item 99e is really to lower rather than to increase, because at the present time under the wording of the item the duty is charged upon the heavy wooden box containers in which the dates are packed. Under the amended proposal the only package which will be included with the weight of the dates for duty purposes will be the cardboard cartons contained inside. The general effect is to lower.


[Stage Direction]
Item agreed to.
Customs tariff-117. Halibut livers, fresh: British preferential tariff, free; intermediate tariff, free; general tariff, free.
James Layton Ralston: Can the minister tell us the amount of halibut liver oil manufactured in Canada, and what amount is consumed in Canada? In other words, do we manufacture enough for our own consumption?


Edgar Nelson Rhodes: I am sorry I am not in a position to give that information because up to the present time this item has not been segregated and there has been no opportunity to give the figures for which the hon. member has asked. I am informed, however, that the use of halibut liver for purposes comparable to the uses heretofore made of cod liver is increasing at a very rapid rate, and this free entry will enable the production of halibut liver oil in Canada. It will enlarge the opportunity. I think perhaps the hon. gentleman who sits to my hon. friend's immediate left (Mr. Hanson, Skeena) will be able to give far better information in that respect than I can.


James Layton Ralston: Will the minister allow this item to stand?


Edgar Nelson Rhodes: Certainly.

Ways and Means-Customs Tariff


James Layton Ralston: I have written for gome information in regard to it. The thing I am concerned about is whether we produce in Canada sufficient halibut liver, that is the raw material, to supply the demand in Canada. If so it seems to me that by this item we are perhaps taking a backward step so far as the fishing industry is concerned, if we permit halibut liver to come in free from the United States.
Item stands.
Customs tariff-180. Photographs, chromos, chromotypes, artotypes, oleographs, paintings, drawings, pictures, decalcomania transfers of all kinds, n.o.p., engravings or prints or proofs therefrom, and similar works of art, n.o.p.; blue-prints, building plans, maps, and charts, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 224 per cent; general tariff, 224 per cent.
Mr. RHODES; The only change is the insertion of the letters "n.o.p." in the third line, which is made necessary by the next succeeding item. There is no change in the rates.


[Stage Direction]
Item agreed to.
Customs tariff-180c.	Decalcomania transfers, when imported for use exclusively in the manufacture of tableware of china, porcelain or semi-porcelain: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 124 per cent.
James Layton Ralston: Would the minister explain this item?


Edgar Nelson Rhodes: This is a new item to afford reduced rates under all tariffs on decalcomania transfers for use in decorating tableware and china, et cetera. Although transfers of many kinds are 'made in Canada none are made suitable for 'the production of ceramic products such as tableware. It has been represented to the minister by the Canadian industries engaged in the manufacture of chinaware that since sudh tableware may enter free of duty from Great Britain, provision should be made for lower rates on the decalcomania transfers used.


Charles A. Stewart: Will the bulk come in from Great Britain?


Edgar Nelson Rhodes: Transfers of this nature are available chiefly in Great Britain, Germany and the United States.


[Stage Direction]
Item agreed to.
Customs tariff-187. Albumenized and other papers and films chemically prepared for photographers' use, n.o.p.: British preferential tariff, 15 per cent: intermediate tariff, 25 per cent; general tariff, 30 per cent.
Edgar Nelson Rhodes: The only change here is to provide for the insertion of the letters "n.o.p." This change is made necessary because of the next succeeding item.


[Stage Direction]
Item agreed to.
Customs tariff-187a. Hypersensitive or supersensitive panchromatic films, unexposed, for aerial photography:	British preferential
tariff, free; intermediate tariff, 10 per cent; general tariff, 15 per cent.
Edgar Nelson Rhodes: This is a new item to
provide lower rates of duty on the thin hypersensitive or supersensitive panchromatic film which is used in aerial photography. This film is not made in Canada but can be imported from either the United States or Great Britain. The largest user in Canada is perhaps the Department of National Defence.


Charles A. Stewart: Where have we been getting our supplies?


Edgar Nelson Rhodes: From both the United
States and Great Britain-.


Mr. BOUCHARD:: If the film is used for
other purposes than for aerial photography will it be protected by the former duties?


Edgar Nelson Rhodes: I am informed, Mr. Chairman, that this is a film of a special character, exceedingly thin and suitable only, and used only, for purposes of aerial photography.


James Layton Ralston: The former item was
187?


Edgar Nelson Rhodes: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-203b. Aniline and coal tar dyes, adapted for dyeing, in bulk, or in packages of not less than one pound weight: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent. Provided, that when such dyes are permitted entry into the United Kingdom, by licence, under section (2) of the Dye-Stuffs Act (1920) the rates of duty shall be: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: The only change in this
item is the substitution of the phrase "adapted for dyeing" for the phrase "soluble in water" This is a conference item and there has arisen some difficulty in its administration. Many dyes which are imported are not soluble in water. We have accepted this wording at the suggestion of United Kingdom authorities and with the approval of the Department of National Revenue.


[Stage Direction]
Item agreed to.
3480	COMMONS
Ways and Means-Customs Tariff
Customs tariff

207.	Dried blood, n.o.p.:
British preferential tariff, 5 per cent; intermediate tariff, 7J per cent; general tariff, 10 per cent.
Edgar Nelson Rhodes: The only change in this
item is to include the letters "n.o.p.", made necessary by the nest succeeding item.


[Stage Direction]
Item agreed to.
Customs tariff-207b. Dried blood, soluble: British preferential tariff, free; intermediate tariff, free; general tariff, free.
James Layton Ralston: What is this used for?


Edgar Nelson Rhodes: This is a new item providing free entry under all tariffs for soluble dried blood, which is used as a base for glue compounds in the furniture industry.


Alan Webster Neill: Is not all dried blood soluble in the final analysis?


Edgar Nelson Rhodes: I am told not.


[Stage Direction]
Item agreed to.
Customs tariff-208e. Cresylic acid and compounds of cresylic acid, used in the process of concentrating ores, metals or minerals, n.o.p.: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 15 per cent.
Edgar Nelson Rhodes: The only change is the addition of the letters "n.o.p." in consequence of the succeeding item.


Mr. HANSON (Skeena):: Some time ago representations were made to the minister by some of the mining companies in British Columbia complaining that they could not get this material except from two sources, Great Britain and the United States, and that under the existing tariff it was impossible to get it from Great Britain. I should like to ask the minister if anything was done to meet those representations. Are these the only two sources of supply?


Edgar Nelson Rhodes: My hon. friend is referring to an item that we have not yet reached. We shall reach it in a moment and then I shall be glad to give him a reply.


[Stage Direction]
Item agreed to.
Customs tariff-208g.	Calcium molybdate,
when imported for use exclusively in the manufacture of steel, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff,
5 per cent.
Olof Hanson: Will the minister explain this item?


Edgar Nelson Rhodes: The only change in this item is to permit the importation of this commodity by importers who may in turn sell.

Hitherto the importation has been limited to the actual manufacturer, and it has been a handicap in the case of the smaller manufacturer, prohibiting him from going to a warehouse, for example, and purchasing a small quantity. Otherwise he would be penalized by having to pay a higher duty.


James Layton Ralston: I do not quite understand that explanation. This is an item which applies to a commodity imported for use exclusively in the manufacture of steel, and I understood the minister to say that this permitted the purchase of calcium molybdate from jobbers. It does not seem as if that would be the purpose of the item.


Edgar Nelson Rhodes: If my hon. friend would
read the existing item he would observe the difference. The existing item says "by a manufacturer," while those words are left out of this item.


[Stage Direction]
Item agreed to.
Customs tariff

208u. Xanthates and sul-phothio-phosphorie (dithio-phosphoric) compounds, for use in the process of concentrating ores, metals or minerals: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: This is the item to which my hon. friend from Skeena referred.
-Mr. HANSON (Skeena): Representations were made to the minister by the Premier Mine Company, one of the biggest in British Columbia, which is trying to operate on very low grade ore. They started up a new mine of very low grade ore and they had to have this material for their concentrates, but their representations are that under the present prohibitive duty on this material it is impossible . to keep the mine open.


Edgar Nelson Rhodes: This is a new item intended to restore 'to the free list certain -cresylic acid compounds and derivatives thereof which became dutiable at rates of free, 15 per cent and -15 per cent as a result of the imperial economic conference. Under the budget of 1933 one group of these compounds, known commercially as xanthates, was restored to the free list under the tariff classification of item 208u; on the representation of mining interests whose processes have been built up upon -other -cresylic acid derivatives commercially known as "aero-float", "reagent 301" et cetera, -these latter were added to the free list. The reagents referred to are royalty preparations made only in the United States. They have been imported from the same sources for many years and as there are no

Ways and Means-Customs Tariff
British interests benefiting from the preference, His Majesty's government is unreservedly concurring in their return to the free list.


[Stage Direction]
Item agreed to.
Customs tariff-208v. Butyl alcohol, until October 15, 1934: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: This is a new item and it is being placed o.n the free list. It was previously dutiable at free, 25 and 25. This is a conference item but Great Britain has concurred in the temporary free listing because of the fact that for five or six months in the immediate future she may have difficulty in supplying the demands of Canadian and domestic consumers.


Mr. EULER:: Is it made in Canada?


Edgar Nelson Rhodes: No.


[Stage Direction]
Item agreed to.
Customs tariff-208w. Theobromine, crude, and dimethyl, sulphate:	British preferential
tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-210d. Sodium, sulphate of, crude, or salt cake, per pound: British preferential tariff, J cent; intermediate tariff, § cent; general tariff | cent.
James Layton Ralston: Has some body of manufacturers or producers made representations with regard to the large number of chemical items; who initiated these changes, generally speaking?


Edgar Nelson Rhodes: My hon. friend is not referring to this item alone?


James Layton Ralston: No.


Edgar Nelson Rhodes: Representations have been received from fifteen or twenty large consumers of these commodities throughout Canada. I have not the individual names before me.


James Layton Ralston: It was not an association of some sort?


Edgar Nelson Rhodes: No, they were individuals.


Charles Edward Bothwell: What is the reason for the reduction in this particular item? Has this matter been before the tariff board?


Edgar Nelson Rhodes: This change arises in consequence of a report of the tariff board which was tabled in the house some considerable time ago.


Charles Edward Bothwell: I have been asked to make a protest on this item and I shall give it to the minister in the words in which it was
passed on to me. This letter was written from Moose Jaw and it has reference to the Natural Sodium Products Company at Dunkirk. The author of the letter is interested in this company and he says:
The company with which I am connected, the Natural Sodium Products, and which operates a plant near Dunkirk, south of Moose Jaw, carried on for many years and spent some hundreds of thousands of dollars before it got on a basis of profitable operation. At present the business is doing very well, and is giving employment to a lot of people in an area where employment is very much needed.
And again:
It seems to me that if there is an industry in Canada that deserves the benefit of a tariff, it is this industry. It is only just nicely getting on its feet, and the freight rate is a great handicap to it. The purchase of the commodity by the Canadian manufacturers of paper in Canada means not only business for these small industries in the west, the development of the resource, but it means business for the Canadian railways, and one would gather that the railways are in need of all the business they can get, and surely if we are to have a tariff, this industry is deserving of the benefit of that tariff. As I have said, it is possibly the only industry of any account in Saskatchewan that derives any benefit from it, and one would think under the conditions that prevail, that industry in this province would get fair treatment and not be singled out to be discriminated against in Canada's tariff policy.
And again:
I can assure you it is being carried on on a very small margin at the present time; in view of the freight rate, a very small reduction in the protection afforded to it is simply going to necessitate the closing down of these plants in Saskatchewan, or the weaker of them in any event.
I do not know whether these protests have been made to the minister, but if they have not been made to 'him I assume they have been made to the tariff board. I think it would 'be enlightening if the minister could give us the information which was given to the tariff board in connection with this item.


Edgar Nelson Rhodes: The company referred to
by my hon. friend was represented at the hearing before the tariff board and made very complete representations. As to his inquiry as to whether protests have been made to me, I may say that none have been received. He will bear in mind that if protests should be made, they would be made as a result of the findings of the tariff board because the proposals we now make are in exact conformity with those findings. These findings are as follows:
The Bathurst Pulp and Paper Company, the applicant, as a consequence of being located at Tidewater, can secure its salt cake requirements
34S2

Ways and Means-Customs Tariff
more economically from the United Kingdom than from Saskatchewan.
British salt cake is higher in price at the source than Canadian salt cake, and the British producers can compete in Canada against the Saskatchewan produce only at points situated at tidewater, and then only where the consumers are prepared to buy in bulk, in cargo lots.
Disregarding all customs duties, the Canadian producers are very advantageously placed to secure all the business of the Canadian users receiving their supplies in small shipments, and it is apparent that the present duty is unnecessarily high adequately to ensure to the Saskatchewan industry competitive access to its economic market in Canada.
I may say that as a matter of fact the company referred to by my hon. friend has been and is exporting large quantities of salt cake to the United States. The findings continue:
Evidence at the inquiry established that, at current prices, the protection afforded Canadian salt cake at point of production is approximately 135 per centum.
A duty under the British preferential tariff of i cent per pound would be sufficient to allow the British Columbia producers, when they begin operations and if they should desire the market, full opportunity of reasonable competition, via the Panama canal, with United Kingdom producers for the business of the mills situated on the Atlantic seaboard.
It will be noticed1 that we do not intend to interfere with the intermediate and general tariffs; we are simply reducing the British preferential from one-half cent to one-fifth cent per pound.


William Daum Euler: The minister stated that an application was received from only one paper company, the Bathurst Pulp and Paper Company. I should like to know if they were joined by other paper manufacturers when they requested reduced duties?


Edgar Nelson Rhodes: No, the only application
we received was from the Bathurst company.


[Stage Direction]
Item agreed to.
Customs tariff-210e.-Nitrate of soda or cubic nitre when imported for use as a fertilizer, for use in the curing or pickling of meats or for use in the manufacture of vitreous glazes and enamel frits, or when imported by manufacturers of explosives for use exclusively in the manufacture of explosives, in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: I have an amendment to
move to item 210e. It reads:
Nitrate of soda or cubic nitre when imported for use as a fertilizer, or as a flux in the reduction of electrolytic copper slimes, or for use in the curing and pickling of meats or in the manufacture of vitreous glazes and enamel

frits, or when imported by manufacturers of explosives for use exclusively in the manufacture of explosives in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
This is a conference item and it is being widened further as a result of the concurrence of the British government.


Joseph Georges Bouchard: I think the minister
is to be congratulated for this change which benefits the farmer and for having carried into effect the constructive suggestions from this side of the house.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-216d'.	Phthalic anhydride,
adipic, abietic. maleic and succinic acids and ethylene glycol, when imported by manufacturers of synthetic resins, for use exclusively in the manufacture of synthetic resins, in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-219. (ii) Solutions of hydrogen peroxide containing twenty-five per centum or more by weight of hydrogen peroxide:	British preferential tariff, free:
intermediate tariff, 22-J per cent; general tariff, 25 per cent.
Item agreed to.
Customs tariff-219e. Mixtures containing cyanides, for use in combating destructive insects and pests: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-242. Dry red lead, orange mineral and titanium oxide; zinc oxides such as zinc white and lithopone: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 15 per cent.
Edgar Nelson Rhodes: This is a conference item
and is being widened. I move to amend it so that the item shall read:
242. Dry red lead, orange mineral, titanium oxide and antimony oxide; zinc oxides such as zinc white and lithopone: British prefer-ental tariff, free; intermediate tariff, 15 per cent; general tariff, 15 per cent.
This represents a very substantial reduction. Under the British preference it was 15 per cent and is now free; under the intermediate it was 20 per cent and is now 15 per cent; and under the general it was 22\ per cent and is now 15 per cent.


Charles A. Stewart: Does the
bulk of the imports come from Britain?


Edgar Nelson Rhodes: Under the item as it stood last year, and up to the present time, the total importations have been 23,733,291 pounds

Ways and Means-Customs Tariff
of a total value of $950,000 odd, of which 16,841,196 pounds came from the United Kingdom; 2,979,655 pounds came from the Netherlands, and 2,881,952 pounds came from the United States.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-246b. Stains and oxides, valued at not less than 20 cents per pound, and liquid gold, for use exclusively as colouring constituents in the manufacture of vitreous enamels and pottery glazes: British preferential tariff, free; intermediate tariff, 20 per cent; general. tariff, 22J per cent.
Edgar Nelson Rhodes: I have an amendment
which is purely administrative in effect, to improve the wording. The item will read:
Stains and oxides, valued at not less than 20 cents per pound, for use exclusively as colouring constituents in the manufacture of vitreous enamels and pottery glazes; and' liquid gold paint, for use exclusively in the manufacture of tableware, of china, porcelain or semi-porcelain: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 22J per cent.


James Layton Ralston: Under what item did this come?


Edgar Nelson Rhodes: Item 246, and we have
made an addition.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-254. Gums, viz.:-Arabic, Australian, copal, damar, elemi, kaurie, mastic, sandarac, Senegal, Tragacanth, gedda, and barberry; gum chicle or sappato gum, crude; lac, crude, seed, button, stick and shell; ambergris; Pontianac:	British preferential
tariff, free; intermediate tariff, 15 per cent; general tariff, 15 per cent.
Edgar Nelson Rhodes: I move that this item be amended by striking out the word Arabic. We have now the concurrence of the British government in widening the item, which is a conference item.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-254a. Gum, amber: British preferential tariff, free; intermediate tariff, free; general tariff, free.
James Layton Ralston: Under what does gum Arabic come?


Edgar Nelson Rhodes: Under 254.


James Layton Ralston: But I understood the minister to say that arabic was struck out.


Edgar Nelson Rhodes: I have a new item to move. I move that item 254a be amended to read:
Gums, viz., amber and Arabic: British pref-erntial tariff, free; intermediate tariff, free; general tariff, free.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-267b. Crude petroleum not in its natural state, -7250 specific gravity or heavier at 60 degrees temperature, when imported by oil refiners to be refined in their own factories, per gallon: British preferential tariff, free; intermediate tariff li cents; general tariff, 1J cents.
Charles A. Stewart: Do we get any considerable proportion from Britain?


Edgar Nelson Rhodes: Last year our total importations under this item were 21,715,000 gallons of which we imported from Trinidad 19,262,000; from Russia, 1,958,000 and from the United States, 494,000. This makes it free under the British preferential instead of J cent.


Mr. YOUNG:: What .is the significance of the words "when imported by oil refiners to be refined in their own factories"?


Edgar Nelson Rhodes: This is the item as it stands now and has stood for many years. All we are doing is to ohange the rate under the British preference, making it free instead of one-half cent.


Joseph Philippe Baby Casgrain: What do the refineries use it for?


Edgar Nelson Rhodes: It must go to the refinery; it is only a semi-crude oil, not in its natural state. It has to be still further processed.


Joseph Philippe Baby Casgrain: To what use is it put?


Edgar Nelson Rhodes: There has to be a certain amount of distillation.


Joseph Philippe Baby Casgrain: I understand that, but into the manufacture of what products does it enter?


Edgar Nelson Rhodes: It is manufactured into gasoline, kerosene and probably naphtha.


Edward James Young: Who uses it, apart from the oil refiners?


Edgar Nelson Rhodes: I am advised that no one but the oil refiners could use it.


Edward James Young: Then why not strike out those words?


Edgar Nelson Rhodes: This is a time honoured item.

Ways and Means-Customs Tariff


Edward James Young: That would not make any difference. Let us strike out the words if they are not necessary.


Edgar Nelson Rhodes: I did not say that they were not necessary.


Edward James Young: If nobody but a refiner wants this, then nobody but a refiner wants it. Strike out the words.


Edgar Nelson Rhodes: This item was not asked for by the refiners; they knew nothing about it. It was asked for by the Island of Trinidad. I am sure we would grant this further concession to a British country.


Edward James Young: I do not think Trinidad would make any objection if we struck out these words.


James Layton Ralston: Does crude petroleum for the manufacture of gasoline come under item 267a?


Edgar Nelson Rhodes: Yes. The crude item is right beside it. Of course, as my hon. friend knows, item 267 covers a really crude oil.


James Layton Ralston: I would like to know the real item which includes the natural product from which most of our gasoline is manufactured. Is it item 267a?


Edgar Nelson Rhodes: Yes.


Edward James Young: In view of the fact that nobody but a refiner would want this and Trinidad would not object to having the scope widened, I move that all the words after the word "temperature" be struck out.


Edgar Nelson Rhodes: Item 267a deals with a crude article, and it is free across the board, yet it contains these very same words:
When imported by oil refiners to be refined in their own factories.


Edward James Young: We can deal with that when we come to it. In the meantime let us strike these words out of the item.


Edgar Nelson Rhodes: Perhaps the hon. member does not appreciate the fact that this is purely an administrative requirement. If these words were struck out neither the country nor the situation would be helped. The fact that this requirement has been there for so many years is evidence of its necessity.


Edward James Young: It seems to me that if those words are in there they are there for a purpose.


Edgar Nelson Rhodes: That is the purpose.


Edward James Young: The only effect they can have is to give somebody a rate somebody else does not get. That is the reason I move that they be struck out.


[Stage Direction]
Item agreed to.
Customs tariff-278b. Crude peanut oil, for refining for edible purposes, used as materials in Canadian manufactures: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Charles A. Stewart: There is an increase in the intermediate and general tariffs. What is the explanation?


Edgar Nelson Rhodes: The idea is to direct this commodity through British channels.


William Daum Euler: Which British possessions or territories would be benefited by the protection placed against other countries?


Edgar Nelson Rhodes: Peanuts are produced on the west coast of Africa. There are crushers located on the east coast of Great Britain and on the coast of British West Africa. Peanuts can be supplied from British East Africa, British West Africa and British India.


William Daum Euler: What are the total importations from the various countries?


Edgar Nelson Rhodes: Last year the total importations were 410,780 hundredweight of a total value of $1,661,000. I am leaving off the odd hundreds. They come from various sources as follows:
Hundredweight
Germany	 139,268
China	 125,815
United Kingdom	 55.302
Denmark	 45,320
United States	 25,815


[Stage Direction]
Item agreed to.
Customs tariff-278d. Olive oil for manufacturing soap or tobacco or for canning fish; olive oil for use in the processing of textile fibres, including the finishing of fabrics: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Alan Webster Neill: Would the minister explain
the change? Previously a part of it carried a duty of 20 per cent. What part was that?


Edgar Nelson Rhodes: The portion which was
used in textile operations. That is now made free.


[Stage Direction]
Item agreed to.
Customs tariff-294. Gypsum, ground, not calcined:	British preferential tariff, 10 per
cent; intermediate tariff, 12£ per cent; general tariff, 15 per cent.
Edgar Nelson Rhodes: This is purely a question of wording.


[Stage Direction]
Item agreed to.

Ways and Means-Customs Tariff
Customs tariff-326c.	Concave blanks of
uncoloured clear glass, when imported by manufacturers to be used exclusively in the manufacture of silvered mirror reflectors for lighting systems:	British preferential tariff,
free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Edgar Nelson Rhodes: I have an amendment to
move to this item, that it be amended to read as follows:
Blanks of uncoloured clear glass, when imported by manufacturers to be used exclusively in the manufacture of silvered mirror reflectors or acid etched reflectors or refractors, for lighting systems: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.


Charles A. Stewart: That is a
new item.


Edgar Nelson Rhodes: It was a budget item but it is now widened.


Robert Charles Matthews: I move accordingly.


William Daum Euler: Will the minister say whether these are manufactured in this country?


Edgar Nelson Rhodes: They are not.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-326d. Beads, drops or other shapes of glass, when imported by manufacturers of imitation pearls, for use exclusively in the manufacture of such articles in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-334. Kryolite or cryolite: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-339a.	Lead capsules for
bottles: British preferential tariff, free; intermediate tariff, 27J per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-353. Aluminium and alloys thereof, crude or semi-fabricated, viz.: Pigs, ingots, blocks, notch bars, slabs, billets and blooms; bars, rods and wire; angles, channels, beams, tees and other rolled or drawn sections and shapes; pipes and tubes; plates, sheets and strips, including circles; leaf, n.o.p., or foil, less than -005 inch in thickness, plain or embossed, with or without backing; wire and cable, twisted or stranded, reinforced with steel or not; aluminum powder: British preferential tariff, free; intermediate tariff, 30 per cent; general tariff, 30 per cent.
James Layton Ralston: What is the change in this item?


Edgar Nelson Rhodes: This change is merely to insert the (letters "n.o.p." as a result of the item which follows.


[Stage Direction]
Item agreed to.
Customs tariff-353a. Aluminum leaf, less than -005 millimetres in thickness; aluminum scrap. Provided, that nothing shall be deemed to be aluminum scrap except waste or refuse aluminum, fit only to be remelted: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: This item as at present in the tariff covers aluminum scrap free of duty and it is proposed herewith to widen it to cover aluminum leaf which is described in the item in technical language.


[Stage Direction]
Item agreed to.
Customs tariff-362a. Metal parts, electroplated, for loose-leaf binders: British preferential tariff, 20 per cent; intermediate tariff, 37 i per cent; general tariff, 45 per cent.
Item agreed to.
Customs tariff-365a. Findings of metal, not plated or coated, including stampings, trimmings, spring-rings, bolt-rings, clasps, snaps, swivels, vest chain bars, joints, catches, pin tongues, buckle tongues, coil pins, clip actions, settings and eyepins, when imported by manufacturers of jewellery or ornaments for the adornment of the person, for use exclusively in the manufacture of such articles, in their own factories: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff, 30 per cent.
Edgar Nelson Rhodes: This is a tariff board item.


[Stage Direction]
Item agreed to.
Customs tariff-365b. Wire or strip, viz.: Gold, gold-filled, silver, silver-filled, brass or nickel silver, knurled, twisted, figured or with ornamental design rolled or drawn thereon, and wire of nickel silver, plain, in coil or otherwise, when imported by manufacturers of jewellery or ornaments for the adornment of the person, for use exclusively in the manufacture of such articles, in their own factories: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 25 per cent.
Edgar Nelson Rhodes: This is also a tariff board item.


[Stage Direction]
Item agreed to.
Customs tariff-370. Copper rollers, and stones, used in the printing of textile fabrics or rvallpaper: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-375. Ferro-alloys:
(a)	Ferro-manganese, spiegeleisen and other alloys of manganese and iron containing not more than 1 per centum, by weight, of silicon -per pound, or fraction thereof on the man-
[Stage Direction]
3486	COMMONS
Ways and Means-Customs Tariff
ganese contained therein: British preferential tariff, free; intermediate tariff, 1 cent; general tariff, 1J cents.
(b)	Silico-manganese, silico spiegel and other alloys of manganese and iron containing more xhan 1 per centum, by weight, of silicon-per pound, or fraction thereof, on the manganese contained therein: British preferential tariff, free; intermediate tariff, 1J cents; general tariff, 11 cents.
(c)	Ferro-silicon, being an alloy of iron and silicon containing 8 per centum or more, by weight, of silicon and less than 60 per centum -per pound, or fraction thereof, on the silicon contained therein: British preferential tariff, free; intermediate tariff, li cents; general tariff, If cents.
(d)	Ferro-silicon, being an alloy of iron and silicon containing 60 per centum or more, by weight, of silicon and less than 90 per centum -per pound, or fraction thereof, on the silicon contained therein: British preferential tariff, free; intermediate tariff, 2J cents; general tariff, 2f cents.
(e)	Ferro-silicon, being an alloy of iron and silicon containing 90 per centum or more, by weight, of silicon-per pound, or fraction thereof, on the silicon contained therein: British preferential tariff, free; intermediate tariff, 5 cents; general tariff, 5i cents.
(f)	All alloys used in the manufacture of steel or iron, n.o.p.: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 5 per cent.
James Layton Ralston: There is an increase here. Will the minister explain it?


Edgar Nelson Rhodes: As the committee will Observe, this item has been entirely rewritten. We have not disturbed the free entry under the British preferential tariff, but in some of the items there has been an increase in the intermediate and also in the general. We have an extremely valuable and important industry at Welland called the Electro Metallurgical Company of Canada, Limited, which will derive substantial benefits by this changed wording.


James Layton Ralston: There is no part of the tem free now across the board?


Edgar Nelson Rhodes: No.


Thomas Reid: I wonder if the minister can explain why in the first part of the item ferro-manganese is not designated by the percentage of manganese content. In paragraph (b) you have silico-manganese and other alloys, containing more than one per cent of silicon by weight. I am just wondering why in (a) you have not designated the amount of manganese as well as the amount of silicon.


Edgar Nelson Rhodes: My hon. friend has me in rather a technical realm here, and I am not sure that I can enlighten him as completely as I would wish. This is an alloy with a

manganese content below thirty per cent. The importation is comparatively small, just two or three thousand tons a year.


James Layton Ralston: What does the one cent per pound specific duty amount to ad valorem?


Edgar Nelson Rhodes: I am advised that on a specific basis it would work out in the neighbourhood of thirty-two to thirty-four per cent.


Joseph Philippe Baby Casgrain: What is this ferro-manganese used for?


Edgar Nelson Rhodes: As an alloy in steel operations. I may point out to the committee also that the ore used is entirely British, and the electro-metallurgical company exports fully two-thirds of its total production to the United States.


Charles A. Stewart: All the imports are from Great Britain?


Edgar Nelson Rhodes: Yes.


Mr. SANDERSON:: What were the importations last year?


Edgar Nelson Rhodes: I will have to give the individual imports under the various old items. Under 375a we imported nothing. Under 375b we imported 927 hundredweight.


Frederick George Sanderson: Where from?
Mr. RHODiES: We imported 465 hundredweight from the United Kingdom and 341 hundredweight from the United States. Under 375c we imported nothing. Under 375d we imported 193 hundredweight from the United States and under 375f we imported 6,471 hundredweight of which 3,643 came from the United States and 208 from the United Kingdom.


James Layton Ralston: Then looking at the new item 375d, having to do with ferro-silicon, the British preference is free, the intermediate rate is 2| cents and general rate 2} cents whereas previously it was free, 10 per cent and 10 per cent. If ferro-silicon is put on the same basis of value as ferro-manganese-I do not know if it is-according to the minister's figures the one cent rate is equal to 32 to 34 per cent, which means that with the 2\ cent rate under the general tariff we are increasing the duty against the rest of the world by over 80 per cent in order to provide this British preference.


Edgar Nelson Rhodes: The values vary very greatly. For example, on ferro-silicon it would amount to from 18 to 29 per cent in one

Ways and Means-Customs Tariff
grade, while in another grade it would go up to 38 per cent, according to the purity and the character of the alloys. For instance, in connection with spiegeleisen it figures out at 144 per cent.


James Layton Ralston: I was speaking of item 375d.


Edgar Nelson Rhodes: Of course the whole item is new.


James Layton Ralston: I am speaking of item 375d as it appears in the ways and means resolutions.


Edgar Nelson Rhodes: That is entirely new.


James Layton Ralston: Can the minister tell us whether the commodity covered by the new item 375d was imported in any quantity from the United States?


Edgar Nelson Rhodes: I am advised that the
nearest we can come to a computation of the importations under the old items would be those which came in under 375c and 375d. Under 375c we imported nothing last year, and under 375d we imported a total of 193 hundredweight.


James Layton Ralston: On that item, of which
all our importations apparently were from the United States, we have now put up a tariff barrier of between 30 and 40 per cent, where it was 10 per cent before.


Edgar Nelson Rhodes: But my hon. friend will
realize that we anticipate securing this importation from the British Isles.


Edward James Young: At what price?


[Stage Direction]
Item agreed to.
Customs tariff-380. Plates of iron or steel, hot or cold rolled:-(a) Not more than 66 inches in width, n.o.p., per ton: British preferential tariff, $4.25; intermediate tariff. $8; genera] tariff, $8.	(b) More than 66 inches
in -width, n.o.p., per ton: British preferential tariff, free; intermediate tariff, $6; general tariff, $6.	(c) Flanged, dished or curved,
n.o.p.: British preferential tariff, 10 per cent; intermediate tariff, 25 per cent; general tariff, 30 per cent. Provided that, as regards subsection (b) of this tariff item, the provisions of section 6 of the Customs Tariff Act shall not apply to importations under the British preferential tariff.
Edgar Nelson Rhodes: This is removing the dump from British steel plates.


[Stage Direction]
Item agreed to.
Customs tariff-392a. Forgings of iron or steel, in any degree of manufacture, hollow, machined or not, not less than 12 inches in internal diameter: British preferential tariff, free: intermediate tariff, 30 per cent; general tariff, 30 per cent.
74726-221J
Edgar Nelson Rhodes: This is a widening of the
item.


[Stage Direction]
Item agreed to.
Customs tariff-409e. (ii) Fruit and vegetable grading, washing and -wiping machines and combination bagging and weighing machines, and complete parts therefor:	British preferential tariff, free; intermediate tariff, 10 percent; general tariff, 10 per cent.
Item agreed to.
Customs tariff-410d. Well-drilling machinery and apparatus, and complete parts thereof, of a class or kind not made in Canada, and seamless iron or steel tubing over eight inches in diameter, for use exclusively in drilling for water, natural gas and oil, and in prospecting: for minerals, but not to include motive power;, packer rubbers for oil and gas wells: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: This is a widening of the item also.


[Stage Direction]
Item agreed to.
Customs tariff-410n.	(ii) Complete parts
for repairs for the coal-cutting machines, n.o.p., enumerated in tariff item 410n, when imported prior to January 1, 1935, and when for use exclusively in repairing coal-cutting machines imported into Canada prior to January 1, 1933: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-412. Machinery, being presses for use in the printing of newspapers, of not less value by retail than $1,500 each, of a class or kind not made in Canada, and complete parts thereof, not to include saws, knives and motive power: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: This is a widening of the
item to include parts.


[Stage Direction]
Item agreed to.
Customs tariff-441f.	Metal parts, n.o.p.,
when imported by manufacturers of shotguns, to be used exclusively in the manufacture of shotguns, in their own factories: British preferential tariff, free; intermediate tariff, 174 per cent; general tariff, 25 per cent.
Edgar Nelson Rhodes: This is a tariff board item.
Customs tariff-445j. Electric dry shaving machines, of a class or kind not made in Canada, for use in removing human hair, and complete parts thereof:	British preferential
tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.


Edgar Nelson Rhodes: This is a widening of the
item to add parts.


[Stage Direction]
Item agreed to.
Customs tariff-471a.	Pressed steel belt'
pulleys for power transmission, and finished or unfinished parts thereof, including interchange-
[Stage Direction]
Ways and Means-Customs Tariff
able bushings: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 274 per cent.
Item agreed to.
Customs tariff-472.	Plates, rolls and
cylinders engraved on wood, or on steel or other metal, and transfers taken from same, n.o.p.; engravers' plates, rolls and cylinders of steel or other metal, polished or otherwise processed, for engraving thereon or for transferring thereto from engraved plates: British preferential tariff, 10 per cent; intermediate tariff, 15 per cent; general tariff, 20 per cent.
Item agreed to.
Customs tariff-475. Stereotypes, electrotypes and celluloids of books, and bases and matrices and copper shells for the same, whether composed wholly or in part of metal or celluloid; positive and negative films of periodical publications regularly issued at stated intervals as frequently as, at least, four times a year, not including catalogues: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-494b. Corkwood or corkbark in strips, for use in the manufacture of roller .covers for textile machinery: British preferential tariff, free; intermediate tariff, free; .general tariff, free.
Edgar Nelson Rhodes: I have an amendment to
move to 494b. It is a rewording for administrative purpose. Under the amendment which I now propose the item would read:
Item 494b. Cork blocks, boards, planks or islabs, produced from cork waste or granulated >or ground cork, when imported by manufacturers for use exclusively in the manufacture of roller coverings for textile machinery: British preferential tariff, free; intermediate tariff, free; general tariff, free.


Edward James Young: Who asked for this change?


Edgar Nelson Rhodes: It was particularly re-
-quested by one company in Montreal which manufactures these rollers, but which has to bring cork from Spain and Portugal.
' Mr. YOUNG:	Can it be possible that
textile industries who want high protection on their products are protesting against protection on the rollers?


Edgar Nelson Rhodes: I can assure my hon.
friends that the textile industry made no representation, and they knew nothing about it. I move, in amendment, as I have previously indicated.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
, Customs tariff-511. Fishing rods, walking sticks and walking canes, of all kinds; golf clubs and finished parts thereof; skis; racquets and racquet frames and baseball bats; balls
[Mr. Rhodes.J
of all kinds for use in sports, games or athletics, n.o.p.: British preferential tariff, 20 per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.
Item agreed to.
Customs tariff-511a.	Cricket bats, balls,
gloves and leg guards:	British preferential
tariff, free; intermediate tariff, 30 per cent; general tariff, 35 per cent.
Item agreed to.
Customs tariff-523h.	Sailcloth wholly of
Egyptian cotton, imported for use exclusively in the manufacture of sails for boats and ships, under regulations prescribed by the minister: British preferential tariff, free: intermediate tariff, 20 per cent; general tariff, 25 per cent, and per pound: intermediate tariff, .31 cents; general tariff, 4 cents.
Edgar Nelson Rhodes: Thi3 is a tariff board
item.


[Stage Direction]
Item agreed to.
Customs tariff-523i. Filter cloth wholly of cotton, with cut pile, in the web or made up, imported for use exclusively in mining and metallurgical operations: British preferential tariff, 10 per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent, and per pound: intermediate tariff, 34 cents; general tariff, 4 cents.
Item agreed to.
Customs tariff-537. Rovings, yarns and warps wholly or in part of vegetable fibres, not more advanced than singles, n.o.p., not to contain silk, artificial silk nor wool: British preferential tariff, free; intermediate tariff, 174 per cent; general tariff, 25 per cent.
Edgar Nelson Rhodes: I have an amendment to
this item. It is intended to restore the status quo ante with respect to the previous item except with respect to jute. I beg to move:
That the rates of customs duties set opposite tariff item 537, as contained in resolution No. 3 of April 18, 1934, be amended to read as follows:	British preferential tariff, 124 per
cent;, intermediate tariff, 174 per cent; general tariff, 25 per cent.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-537a. Rovings, yarns and warps, wholly or in part of vegetable fibres, including yarn twist, cords and twines generally used for packaging and other purposes, n.o.p., not to contain silk, artificial silk nor wool: British preferential tariff, 274 per cent; intermediate tariff, 30 per cent; general tariff, 324 pet cent.
Edgar Nelson Rhodes: I have an amendment. I move:
That the rates of duties of customs set opposite item 537a, as contained in resolution No. 3 of April 18, 1934, be altered to read as follows:	,

Ways and Means-Customs Tariff
British preferential tariff, 20 per cent; intermediate tariff, 22J per cent; general tariff, 25 per cent.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Edgar Nelson Rhodes: I have two other amendments to move, giving a reduction to Great Britain on jute. I move:
That the following item, enumeration and rates of duties be added to the list of items indicated in resolution No. 3, of April 18, 1934, as for insertion in schedule A to the customs tariff:
Item 537d. Rovings, yarns and warps wholly of jute, not more advanced than singles, n.o.p., not to contain silk, artificial silk nor wool: British preferential tariff, free; intermediate tariff, 17i per cent; general tariff, 25 per cent.


James Layton Ralston: Does jute twine come under that?


Edgar Nelson Rhodes: This is jute yarns.


[Stage Direction]
Item agreed to.
Edgar Nelson Rhodes: 
Frederick George Sanderson: Is that an increase.


Edward James Young: Yes.


Frederick George Sanderson: Why the increase?


Edgar Nelson Rhodes: As a result of a finding by the tariff board we increased the duty upon twine, but we made a very substantial addition to the free list in that we added to that free list jute yarns.


William Daum Euler: Were there any representations made by manufacturers of twine? We may ns well be definite about it: Did Doon Twines Limited of Kitchener make representations to the effect that the making of yarn free much more than offsets the protection they have? Have any representations been made in that connection?


Edgar Nelson Rhodes: One company in the constituency of the hon. member appeared before the tariff board, a company manufacturing twines and yarns. It was heard, but as my hon. friend realizes, these proposals are in strict conformity with the findings of the tariff board.


Charles A. Stewart: Is this not a case where the raw material is reduced and the finished product receives more protection?


William Daum Euler: I think the committee
should understand this, that while perhaps there is a higher duty on the twine, the yam itself is placed on the free list, which is a very serious interference with the business of the company manufacturing twine.


Edgar Nelson Rhodes: I have before me the
report of the tariff board. If the committee desires I shall give a summary.


James Layton Ralston: I should like to know the amount of ad valorem duty which would have resulted from an adherence to the valuation for duty purposes which was put on jute twine by the Minister of National Revenue?


Edgar Nelson Rhodes: It would require some
computation to get that information, although a complete disclosure was made before the tariff board. It involves consideration of varying qualities of the commodity, and different gauges. The computation would be of considerable magnitude.


James Layton Ralston: Would the minister get
that information?


Edgar Nelson Rhodes: I shall be happy to get
it.


William Daum Euler: May I ask the minister
whether this report of the tariff board is one which followed investigations which led to a difference of opinion between the tariff board and the Department of National Revenue? Is this a new decision of the tariff board?


Edgar Nelson Rhodes: This inquiry was instituted under part I of the Tariff Board Act and has no reference to the finding to which my hon. friend refers, which arose under part II of the act.


William Daum Euler: Could the minister give me the approximate date upon which this latest recommendation or report was made? Was it subsequent to the previous investigation which led to a difference between the various authorities?


Edgar Nelson Rhodes: I think I can get that
for my hon. friend. Does he have reference to the time it was brought to the attention of the board or when the finding of -the board was brought down?


William Daum Euler: After the investigation which led to difficulties-I think the minister knows what I refer to-was there a subsequent report?
3490	COMMONS
Ways and Means-Customs Tariff


Edgar Nelson Rhodes: I am advised by the tariff expert that the two were running concurrently for some considerable time. He is unable at the moment to advise me which came before the board in the first instance. We have the dates, but not here. I can get the exact dates for my hon. friend.


William Daum Euler: May I ask the minister if
he is seized of the fact-I am informed that it is a fact-that the changes which have been made give with one hand and take away with the other, so that the situation of the manufacturing firm in my constituency is really worse, and very considerably so, than it was before?


Edgar Nelson Rhodes: I am informed that this
manufacturer was not a seller of yarn but was manufacturing yam for his own purposes. That company will not be prejudiced to any material extent because they have the opportunity to get yarn at the same price as any other manufacturer of twine, and they have increased protection on their twine.


William Daum Euler: I think my hon. friend is
mistaken when he says that they were manufacturing yam only for their own purposes,


Edgar Nelson Rhodes: The report of the board is that they were not sellers of yam. The report covers three pages, but I can read paragraph 6 which is particularly in point:
The board is of the opinion that the process carried on by Doon Twines Limited of spinning yarn on to bobbins as an integral part of the process of manufacturing jute twines should not be considered as commercial production of jute yarn in Canada.


William Daum Euler: It does not state that they
do not manufacture for other than their own purposes. I am almost certain that they do.


Edgar Nelson Rhodes: I can give my hon. friend a little more detail from the preceding paragraph of the board's report:
If the difference in the costs of production by Doon Twines Limited and by the Dundee jute manufacturers are equalized on jute twines then the entire process of Doon Twines Limited in the manufacture of twine from raw fibres is fully protected by the duty on twine. Doon Twines Limited manufacture no jute yarn as such and indeed appear unable to sell jute yarn to Canadian twine twisters due to the fact that the differential between the cost at which Doon Twines Limited could produce such yarn and sell it has been less than one cent under the current price of twine,


Frederick George Sanderson: Is not this one of the items about which there was a disagreement between the tariff board and the officials of the National Revenue department?
{Mr. Euler.]


Edgar Nelson Rhodes: This is not one of the
items. This inquiry was instituted in the ordinary course under the Tariff Board Act. The jute case to which my hon,. friend refers arose under part II, and is a different thing entirely. .


Frederick George Sanderson: There was some disagreement between the board and the National Revenue department-am I right in that?


Edgar Nelson Rhodes: There was a difference of opinion, no doubt.


Frederick George Sanderson: I am glad the minister says that, because the Minister of National Revenue told me there was no disagreement at all.	.


Charles A. Stewart: The objection I take is not to the reduction, but having given the reduction on the raw material, you turn about and give an increase on the finished product. Is that a decision of the board?


Edgar Nelson Rhodes: Yes.


Charles A. Stewart: That is one that I shall take some pleasure in reading uip.


Edgar Nelson Rhodes: It is on file.


James Layton Ralston: I think it would be well to recall just what the situation was in regard to jute twine. Importations were received from Great Britain, and the dump duty was applied. I am informed-the minister is going to give me the figures-that the dump duty would amount to something like a duty of fifty per cent ad valorem. That duty was imposed, as I understand it, and was collected, and in October an appeal was taken to the tariff board. That appeal was heard. The tariff board decided it either late in October or early in November and ordered a refund of the duty that had been paid. Instead of a refund being made, an appeal was made to the governor in council. That appeal has been heard, was heard a month or two ago, but no decision has yet been made. May I ask the minister if a refund has yet been made to the importers of the dump duty that was imposed late last fall?


Edgar Nelson Rhodes: I shall have to make inquiries of the Department of National Revenue because I have no knowledge, neither has the tariff adviser who is with me.


William Daum Euler: Is not the fact that the whole matter was referred to the courts, and I suppose pending a decision of the courts the department has withheld the return of the money?

Ways and Means-Customs Tariff


Edgar Nelson Rhodes: That is what would result, I suppose, as a matter of fact.


James Layton Ralston: The reference to the court had to do not with the question whether the tariff board had decided the ease properly, but solely with the matter of the board's jurisdiction. The real appeal was the appeal from the tariff board to the governor in council, which has been heard but not decided. That is the appeal that would determine the question whether or not the importer was entitled to a refund. Can the minister give us any idea when we may expect a decision of the governor in council on that appeal?


Edgar Nelson Rhodes: I should like to confer with my colleague the Minister of Justice before I make a definite reply to my bon. friend, but my impression is that I could give an answer only following the decision of the supreme court on the stated case. I may be wrong on that. I have not been in touch with the situation during the last two or three weeks, but if my hon. friend presses for an answer I shall endeavour to get it as soon as I can after consultation with the Minister of Justice.


James Layton Ralston: When my hon. friend is in ways and means again?


Edgar Nelson Rhodes: Quite so.


James Layton Ralston: I understand that at the same time the minister will give me the information with regard to the percentages.


[Stage Direction]
Amendment agreed to.
Customs tariff-541d.	Canvas in the web,
wholly of flax or hemp or both, plain woven, not coloured, not further manufactured than impregnated with weather-proofing or preservative materials, suitable for manufacturing into tents, awnings, tarpaulins, hatch covers and similar articles, weighing not less than 18 ounces and not more than 26 ounces per square yard: British preferential tariff, 15 per cent; intermediate tariff, 30 per cent and 3J cents per pound; general tariff, 35 per cent and 4 cents per pound.
Item agreed to.
Customs tariff-551c. Yarns and warps composed wholly of hair or of hair and any vegetable fibre, imported by manufacturers for use in their own factories:	British preferential
tariff, free; intermediate tariff, 17i per cent and 15 cents per pound; general tariff, 20 per cent and 17 i cents per pound.
Item agreed to.
Customs tariff-556. Needled hair felt, imported by manufacturers of felt carpets and carpeting, for use exclusively in the manufacture of such felt carpets and carpeting, in their own factories: British preferential tariff, free; intermediate tariff, 10 per cent and 15 cents per pound; general tariff, 10 per cent and 17J cents per pound.
Edgar Nelson Rhodes: I have an amendment to move, Mr. Chairman. It arises purely in an administrative way in order to prevent evasion. The situation has arisen since the budget was brought down. I move to amend item 556 to read as follows:
Customs tariff-556. Needled felt of hair or of hair and wool, not coloured, impregnated with rubber solution on one side, when imported by manufacturers of felt carpets and carpeting for use exclusively in the manufacture of printed felt carpets and carpeting in their own factories: British preferential tariff, free; intermediate tariff, 10 per cent and 15 cents per pound; general tariff, 10 per cent and 17J cents per pound.
There is no change in the rates. It is merely a change in the wording.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Edgar Nelson Rhodes: I have a motion which I desire to propose in consequence of a report which has been received from the tariff board since the budget was brought down, with respect to reference No. 38, and which I will lay on the table when we report to the house. The motion I move is that this item be inserted:
558b. Rovings, yarns and warps wholly of artificial silk or similar synthetic fibres produced by chemical processes, not more advanced than singles, not coloured: British preferential tariff, 20 per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.
Provided that in no case shall the duty be less than, per pound: British preferential tariff, 20 cents: intermediate tariff, 28 cents; general tariff, 28 cents.
It will be observed that the only change is to reduce the specific duty from 28 cents per pound to 20 cents per pound. This change is made in conformity with the findings of the tariff board.


Charles A. Stewart: What are the imports?


Edgar Nelson Rhodes: It is not possible to segregate the imports of artificial silk yarn to show the cellulose separate from the viscose yarns. The imports of yarns under tariff item 558b for the fiscal year ended March 31, 1934, amounted to 1,912,014 pounds valued at $1,158,000. The imports under item 558d for the same period amounted to 170,188 pounds valued at $165,254.


[Stage Direction]
Item agreed to.
Customs tariff-558f. Rovings, yarns and warps wholly of spun artificial silk or similar synthetic fibres produced by chemical processes, not coloured, imported by manufacturers for use exclusively in the manufacture of cut-pile fabrics, in their own factories: British preferential tariff, free; intermediate tariff, 30 per
3492	COMMONS
Ways and Means-Customs Tariff
cent but not less than 28 cents per pound; general tariff, 35 per cent but not less than 28 cents per pound.
Item agreed to.
Edgar Nelson Rhodes: I desire also to move to insert item 569. This amendment is necessary as a result of a finding of the tariff board on hats and hoods which I will table when we report to the house this evening.


James Layton Ralston: Will the minister give us the effect of that?


Edgar Nelson Rhodes: 
James Layton Ralston: There was before the act was amended.


Edgar Nelson Rhodes: There is, I am informed. We will not quarrel over the present or past tense; the fact remains that this amendment will provide that there shall be a specific duty of $1 per dozen.


James Layton Ralston: This is the same commodity which was the subject of the so-called felt hat case before the tariff board?


Edgar Nelson Rhodes: Yes.


James Layton Ralston: Would not this be in the same category as the horticultural items?


Edgar Nelson Rhodes: Yes, and I am quite willing to have it stand.
Amendment stands.
Customs tariff-597b. Harps: British preferential tariff, free; intermediate tariff, 274 per cent; general tariff, 30 per cent.


Samuel William Jacobs: May I ask if this includes Jew's harps?


Edgar Nelson Rhodes: That is a question of administration which I would have to refer to my colleague the Minister of National Revenue.


Samuel William Jacobs: Why should it be assumed that he knows more than the Minister of Finance?


Edgar Nelson Rhodes: Because he is the administrative minister. However, I will take a chance and say that I do not think it includes the harp to which my hon. friend refers. If he
{M. Rhodes.]
has any representations to make upon the subject, I can assure him that I will give them most careful consideration.


Samuel William Jacobs: It would be too late this year at any rate. As descendants of King David of old, I suppose we of the Jewish race ought to be thankful that King David's harps are free.


[Stage Direction]
Item agreed to.
Customs tariff-616c. Liquid rubber compound, non-alcoholic, when imported by manufacturers of sealing compounds for cans and jars, for use exclusively in the manufacture of such sealing compounds, in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
William Daum Euler: There are many rubber products manufacturing concerns in this country; would the minister state if liquid rubber is included in this item?


Edgar Nelson Rhodes: This is not made in Canada. It is a commodity largely used in the preserving industry for the sealing of glass containers.


William Daum Euler: I was wondering whether they made liquid rubber.


Edgar Nelson Rhodes: I am informed that for sealing purposes crude rubber can be imported free while artificial rubber could not. I am informed also that that is a better commodity for the purpose.


William Daum Euler: Is this not the regular rubber of commerce?


Edgar Nelson Rhodes: No, it is a synthetic rubber.


[Stage Direction]
Item agreed to.
Customs tariff-634. (ii) Materials, when imported by manufacturers of artificial feathers, fruits, grains, leaves and flowers, for use exclusively in the manufacture of such articles, in their own factories: British preferential tariff, 20 per cent; intermediate tariff, 274 per cent; general tariff, 274 per cent.
Item agreed to.
Customs tariff-651. Buttons of all kinds, covered or not, and button blanks other than in the rough, n.o.p.; recognition buttons and cuff or collar buttons:	British preferential
tariff, 20 per cent; intermediate tariff, 35 per cent; general tariff, 35 per cent, and per gross:	British preferential tariff, 5 cents;
intermediate tariff, 5 cents; general tariff, 5 cents.
Edgar Nelson Rhodes: This is a tariff board item.


William Daum Euler: What is the change?


Edgar Nelson Rhodes: There have been evasions of the tariff because of the administrative interpretation of the Department of National Revenue. The importers were bringing in

Ways and Means-Customs Tariff
what were to all intents and purposes completed buttons, except that the holes were not punched. They were called blanks and therefore came in free under the next item. As a result of a finding of the tariff board the new wording appears, and it will prevent the evasion of the tariff in the manner I have indicated.


Olof Hanson: Are there any
changes in the old tariff item 682? Some representations were made by the fishermen on the British Columbia coast in this regard.


Edgar Nelson Rhodes: There are no changes.


[Stage Direction]
Item agreed to.
Customs tariff-651a. Buttons, and button blanks other than in the rough, of vegetable ivory: British preferential tariff, 20 per cent; intermediate tariff, 35 per cent; general tariff, 35 per cent, and, per gross: British preferential tariff. 5 cents; intermediate tariff, 10 cents; general tariff, 10 cents.
Item agreed to.
Customs tariff-663d. Soya beans, when imported by manufacturers of milk foods, for human consumption, for use exclusively in the manufacture of such milk foods, in their own factories, until September 30, 1934: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Mr. GERSHAW:: These beans are used for many purposes, among others the production of artificial milk. Attempts are being made to cultivate them in Canada, around Winnipeg, and particularly in the irrigated districts in Alberta. What have been the importations?


Edgar Nelson Rhodes: We have no record as to
either imports or exports, nor have we any in regard to production, but we know that there is production in Canada. We propose to make these beans free until the next crop comes in. There is a considerable demand for soya beans and at the moment it cannot be supplied in Canada. This enables importation to be made until the Canadian product is available.


Frederick William Gershaw: Will the item then revert to the old rates?


Edgar Nelson Rhodes: Yes.


Ambrose Upton Gledstanes Bury: Does this item cover soya
beans imported for shortening purposes, to take the place of lard?


Edgar Nelson Rhodes: I do not think it would.


[Stage Direction]
Item agreed to.
Customs tariff-685. Pantagraphs and parts thereof, including diamond points, and engraving mills, for engraving copper rollers used in printing textiles and wallpapers; blankets, blanketing and lapping imported for use
exclusively by textile manufacturers and wallpaper printers:	British preferential tariff,
free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-709.	Articles and other
goods, the growth, produce or manufacture of Canada, returned to the exporter thereof after having been exported without having been advanced in value or improved in condition by any process of manufacture or other means; also quicksilver flasks, and other metallic receptacles for holding liquids, oyster pails, and impact registers or recorders for use in railway cars, after having been once exported from Canada: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Edgar Nelson Rhodes: The only new portion is
found in the words, "and impact registers or recorders for use in railway cars." These registers are used by paper manufacturers. They are placed in each carload lot of paper shipped long distances to the United States. The object is to record the time at which any unusual impact arises which may have damaged the paper, and enables those concerned to attribute the blame to the proper railway in consequence of the recorded time. This is an expensive article which pays a duty. Under the wording of the tariff as it stands a duty must be paid every time the recorder comes in; but hereafter, once it has come in and paid duty and the fact is recorded, it may move back and forth free of duty.


[Stage Direction]
Item agreed to.
Customs tariff-811. Ceramic insulator cores, not further manufactured than burned and glazed', printed or decorated or not, without fittings, when imported by manufacturers of spark plugs for use exclusively in the manufacture of spark plugs, in their own factories: British preferential tariff, 5 per cent; intermediate tariff, 10 per cent; general tariff, 15 per cent.
Item agreed to.
Customs tariff-815. Potato starch or potato flour enumerated in tariff item 39 of the customs tariff, when imported for use as material in Canadian manufactures, the weight of the package to be included in the weight for duty, until July 31, 1934, per pound: British preferential tariff, A cent; intermediate tariff, 1 cent; general tariff, 1 cent.
James Layton Ralston: What is the change?


Edgar Nelson Rhodes: By order in council we provided for free entry of potato starch, because of a shortage in Canadian production, until October 1, 1934. Representations were made to us however that because of the new crop this year a Canadian supply would be available at the earlier date and consequently we have changed the date to Juily 31.
3494	COMMONS
Ways and Means-Customs Tariff


James Layton Ralston: That is done under the provisions of the Customs Act empowering the government to permit importation free of duty?


Edgar Nelson Rhodes: Yes.


James Layton Ralston: What is the necessity for putting it in the tariff item at all?


Edgar Nelson Rhodes: This shortens the period provided for in the order in council.


James Layton Ralston: Would it not be sufficient simply to revoke the order in council making it terminate on July 31?


Edgar Nelson Rhodes: Yes, except that this was done for the purpose of giving notice to the trade.


[Stage Direction]
Item agreed to.
Edgar Nelson Rhodes: I should like to have item 1049 stand.
Item stands.
Customs tariff-1000. Plate glass enumerated in tariff item 322, on which duty was paid at the rates of duty set opposite said item. When used in the manufacture of safety or non-shatterable glass: payable as drawback 99 per cent.


Edgar Nelson Rhodes: I beg to move that resolution No. 4, of April 18, 1934, be amended by striking thereout in its entirety drawback item 1060; and that schedule B to the customs tariff, as amended by resolution No. 4, aforesaid, be further amended by striking thereout drawback item 1067 and by inserting the following item, enumeration and rates of drawback of customs duties, in the said schedule B:
1067. Plate glass, polished', of a class or kind not made in Canada, when used in the manufacture of safety or non-shatterable glass, laminated or otherwise, 99 per cent.
This is really a widening of the item which appeared in the budget. The glass in the budget item was glass of a larger dimension and this enables glasses of any dimensions to be imported. The committee will perhaps be interested to know that this covers a commodity which has only recently come on the market, a shatterproof glass which will be used largely in the motor car industry. Hitherto such glass has been manufactured by a laminated process which was highly expensive, and under certain conditions the lamination was not very well done, so that the glass tended to come apart. But this is just the ordinary straight sheet of plate

glass which through some secret process of annealing by electricity has imparted to it shatterproof qualities which do not detract in the slightest degree from the appearance of the glass or its visibility, and which I have had demonstrated in my office with a sheet of glass four feet long, eight inches wide and the ordinary three-eighths of an inch in thickness. I placed this sheet upon two piles of books and a man over two hundred pounds in weight stood upon it. It bent down two or three inches and when he stepped off it came right back to its original position. I placed a sheet of similar glass in a frame and dropped on it a weight of something in the neighbourhood of a pound or a pound and a half from a height of six feet, and the weight merely bounced off. I had a man take a hammer and a nail and he could not make an impression on the sheet. Finally, the only way he could make any impression on the glass was to smash it with a hammer swung with his full strength. He did not go through it; he merely shattered it into a million pieces but it is still there intact and such small particles as came off had about the same appearance as oatmeal. It is really a valuable commodity.


James Layton Ralston: Item 1067 takes the place of 1060?


Edgar Nelson Rhodes: Yes.
Item 1067 agreed to.
5.	Resolved, that schedule C to the customs tariff, being chapter forty-four of the revised statutes of Canada, 1927, be amended by adding thereto the following item:-
1217. Smoke screen apparatus, for use on motor vehicles or on water-borne craft of all kinds.


Edgar Nelson Rhodes: We found already this year three motor cars brought into Canada with this smoke screen on them and for no good purpose.


[Stage Direction]
Resolution agreed to.
6.	Resolved, that any enactment founded upon the foregoing resolutions to amend the customs tariff or schedules thereto shall be deemed' to have come into force on the nineteenth day of April, one thousand nine hundred and thirty-four, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for w'hich no entry for consumption was made before that date.
Resolution agreed to.

Income War Tax Act

[Stage Direction]
Resolved, that it is expedient to amend the Income War Tax Act and to provide:-
1.	That income shall include rents, royalties, reservations and other like considerations which fluctuate according to the production from or the use of the property leased or sold.
James Layton Ralston: As I understand the
matter, has an attempt not already been made to enforce a provision of this kind? If I am not mistaken I think there was a case in British Columbia.


Edgar Nelson Rhodes: I am advised that this amendment has no reference to the case to which my hon. friend has referred. It is merely for the purpose of clarification and to make it competent for the department, in. cases where royalties are really a portion of the income and not a portion of the principal, to apply the tax.


[Stage Direction]
Paragraph agreed to.
2.	That companies exempt from taxation under section four, paragraph (k) of the act shall not be exempt if they fail to file, without reasonable cause therefor, within four months from the close of their fiscal period and annual return on the form prescribed', and at the same time pay a filing fee of one hundred dollars.
James Layton Ralston: With regard to this item, has there been some difficulty about filing returns?


Edgar Nelson Rhodes: Because this class of company has not been taxable, they have not been filing returns. The department feel that they should have a record of these companies and their activities. All this proposes is that there shall be a filing fee.


James Layton Ralston: This applies to the well known "K" companies we talk about?


Edgar Nelson Rhodes: Yes.


James Layton Ralston: Is any special form referred to in this resolution or is it the regular income tax return?


Edgar Nelson Rhodes: There is a special form called P-2/4K.


Mr. SIMPSON (Algoma):: What are the K
companies?


Edgar Nelson Rhodes: They get the name because of the section in the act which is numbered 4 (k). That has reference to Canadian corporations with their assets in Canada but their business conducted outside Canada.


James Layton Ralston: No; their business and assets are both outside Canada.


Edgar Nelson Rhodes: That is right.


[Stage Direction]
Paragraph agreed to.
3.	That the exemption of $1,000 heretofore afforded a trustee accumulating income in trust for the benefit of unascertained persons or of persons with contingent interests shall be abolished.
Mr. HEAPS:: Perhaps on this item I might be allowed to raise a question; although it is not strictly relevant to the point brought up in this particular item I might as well take it up now and get the opinion of the minister on a matter which I raised some time ago but apparently at the wrong time. It has to do with the question of exemptions and refers particularly to the amount allowed for exemption under the ordinary income tax. I have in mind the exemption allowed for sums donated to charitable institutions, churches and so on. I have in mind further the members of several trade unions in this country, which at the present time levy assessments upon their members to maintain the unemployed members of the unions; in some instances that levy runs as high as fifteen per cent of the wages received. While a person who donates for charitable purposes may claim exemption for that amount in making his return, those persons who, of their own free will, donate up to fifteen per cent of their wages in order to maintain the unemployed, thus keeping the unemployed off government relief, are not allowed exemption for that amount. I have had representations made to me from various trade union organizations; as much as S300 and $400 per year is given by an individual to maintain the unemployed members of the union, but he is unable to secure exemption for that amount. I should like to ask the Minister of Finance whether the act could not be amended in some way so that men making donations such as I have referred to would be allowed credit for those donations in connection with their income tax.


Edgar Nelson Rhodes: My hon. friend probably
knows that labour organizations themselves are exempt; they do not pay a,ny income tax. The question of the exemption of charitable bequests, donations and gifts has been very carefully considered; inasmuch as it is a species of exemption subject to abuse it has had to be very carefully administered. So far as I am aware it has been administered very strictly, and has been confined to charitable organizations. However worthy labour organizations may be-and they are worthy-I do not think the ordinary dues paid to a labour organization can be construed as being charitable donations. I do not think they fall within that class of gifts at all. I do not raise the question whether they are or are not donations or whether
Income War Tax Act

they are even voluntary, though in some cases they are not. I do not think you could call them charitable donations. Whether the principle ought to be enlarged to the extent of including the dues to labour unions is another matter.


Abraham Albert Heaps: May I point out that these
are not dues at all; I am not asking for any exemption with regard to the dues paid by a member to his organization. That is an entirely different question. What I do say is that in certain instances, when we have an abnormal unemployment situation as we have had for a number of years, with a large percentage of the members of an organization out of work, the members of that organization assess themselves, of their own free will, to the extent of ten or fifteen per cent of their wages for the purpose of maintaining the unemployed members of the organization, thereby keeping them off relief. I think in such cases, though these donations can be classified as you wish, where voluntary donations are made for the purpose of maintaining unemployed members, exemptions should be allowed for the amounts so donated.


Edgar Nelson Rhodes: I did not quite get the
full purport of what my hon. friend said in the first instance. I had in mind more particularly the ordinary dues paid to labour organizations. My hon. friend has reference to gifts which come from labour organizations during a period of depression.


Abraham Albert Heaps: Not from an organization; from the individual members.


Edgar Nelson Rhodes: Then from the members
of the organization; we will even go that far. I suppose that might be properly termed a charitable gift, and I am prepared to look into that point. I may say very frankly that it has not been brought to my attention previously, but I shall give it very careful consideration. Further than that I cannot say at the moment.


William Daum Euler: I can remember that a good many years ago repeated representations were made in the house to the effect that there should be exemptions for such gifts as the hon. member has just mentioned, including charitable and religious donations. I think it was in 1930 that the exemption list was very greatly widened, and I am rather surprised to hear the minister say now that this exemption applies only to charitable donations. I have no doubt that the commissioner has the amendments of 1930 before him, and if my memory serves me correctly they go a good deal further than charitable 
purposes. I should think a great deal is in the interpretation placed upon the amendments by the department, but I am quite certain that other gifts are exempt than those purely for charitable purposes. If that is not so I should like to know where I am wrong.


Edgar Nelson Rhodes: It may be possible that
the matter can be dealt with administratively. I am going to ask the commissioner of income tax to advise me as to whether that cannot be dealt with as an administrative matter.


Abraham Albert Heaps: Do I understand that the
point raised will be taken up with the commissioner to see whether gifts of that kind can be included?


Edgar Nelson Rhodes: Yes.


[Stage Direction]
Paragraph agreed to.
4.	That interest, dividends, rents, royalties, annuities and other periodical payments received by executors and administrators of a deceased person shall be apportioned as if accruing from day to day and that portion accrued to the date of death shall be taxed as income of the deceased.
Paragraph agreed to.
5.	That the amounts paid by an estate or trust for the upkeep, maintenance and taxes of any property which under the terms of the will or trust in question are required to be maintained for the use of life beneficiaries shall be taxable as income of such beneficiaries.
Paragraph agreed to.
6.	That where any of the shares of a personal corporation are held by a non-resident sliare-uolder, the company shall be taxable at the corporate rates of tax on such shareholder's proportionate interest in the income of the personal corporation.
Paragraph agreed to.
7.	That income from assets transferred directly or indirectly by a taxpayer to minors shall continue to be taxed as the income of the taxpayer transferring the assets.
Paragraph agreed to.
8.	That any enactment founded on this resolution shall he deemed to have come into force at the commencement of the 1933 taxation period and to be applicable thereto and to fiscal periods ending therein, and to all subsequent periods.
James Layton Ralston: Is this the usual provision?


Edgar Nelson Rhodes: Yes.


James Layton Ralston: That means it dates back to when?


Edgar Nelson Rhodes: It applies to the income of 1933, which is to be assessed.

Excise Act


James Layton Ralston: The income for the period for which returns already 'have been made?


Edgar Nelson Rhodes: Made on April 30.


James Layton Ralston: I do not know what the previous practice has been, but I submit that this is wrong.


Edgar Nelson Rhodes: I am advised that this is done every year.


James Layton Ralston: Then let us stop it now. I think the minister will agree that making a retroactive assessment like this is wrong. I had not picked out any particular item, but I notice paragraph 5:
That the amounts paid by an estate or trust for the upkeep, maintenance and taxes of any property which under the terms of the will or trust in question are required to be maintained for the use of life beneficiaries shall be taxable as income of such beneficiaries.
A life beneficiary gets a property, and one of the provisions of the will is that the property shall be maintained. The cost of maintaining that property is taxable as income. The taxpayer has already made his return, not assuming that he would have to pay taxes on that amount. He now has to amend his return for last year and be charged income tax. I mention that, because although I do not know an actual case in which it has occurred I can see the possibility of hardship being created in connection with it. In the same way, the exemption of $1,000 is heretofore afforded the trustee, who has already made the return. He has administered the estate, and finds that the exemption has gone, and has gone for the previous year for which he has already made the return. It is the question of retroactive legislation to which I object.


Edgar Nelson Rhodes: On principle, I agree with the hon. member. Personally I have felt its effect very fully, because on one occasion I have in mind I had to go to the bank and borrow7 money wherewith to pay my income tax. A portion of that income tax was paid upon dividends received from a security which had become absolutely worthless, and which never will be worth a cent. These hardships arise. The retroactive feature about which my hon. friend has complained has been in the act since its inception, something like eighteen years, if my memory serves me correctly. It is bad enough for a man to have to pay income tax if he has made provision for it in the course of the year, but it is very much worse to be called upon unexpectedly to pay an enhanced income tax upon an income w7bich has perhaps been spent.
That, however, is an objection which can be lodged against our income tax in any year. Whether or not we can get a system which will enable us to get away from that is a matter open to question. If we can, it certainly will have to be done in years when we have a more buoyant treasury than we have to-day, when we are called upon to retain every dollar we can get.


James Layton Ralston: Can the minister give
any estimate as to what these resolutions will bring in for the year 1933?


Edgar Nelson Rhodes: No, I am advised that we have no estimate.


James Layton Ralston: I protested two years ago, along with other hon. members some of whom I believe sat behind the minister, against making retroactive the reduction of the minimum income which was taxable. I contended it was wrong at that time, and I say so now. I do not think the fact that we did it two years ago or five years ago makes it any sounder to-day. I protest vigorously against his practice which has grown up of amending the income tax laws or, for that matter, any other laws, and making their effect retroactive. 1 do not think it is good legislation, I do not think it is good policy, and I do not think it can be justified on the ground of revenue. If we are going to make a special levy, let us make it, but do not make it under the income tax act when an fact it is really the confiscation of the property of the taxpayer.


[Stage Direction]
Paragraph agreed to.
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Act, being chapter sixty of the revised statutes of Canada, 1927, and amendments thereto, and to provide:-
1.	That the excise duty on malt be increased as follows:-
(a)	On screened malt (malt from which the eoomings have been removed), manufactured in Canada subject to_ excise regulations with respect to absorption of moisture in warehouse, from three cents per pound to seven and one-half cents per pound;
(b)	On malt imported into Canada and warehoused, from three cents per pound to seven and one-half cents per pound;
(e) On malt imported into Canada, crushed or ground, from five cents per pound to nine and one-half cents per pound; thereby consolidating as a single duty of excise the duties of excise now imposed upon malt used in the brewing of beer and the gallonage tax imposed under the Special War Revenue Act at the rate of twelve and one-half cents
349S
Excise Act
[Stage Direction]
per gallon upon the beer itself, the said gallon-age tax to be repealed by an amendment to the Special War Revenue Act.
All duty-paid malt on hand in any premises subject to excise on the day this act comes into force to be subject to the difference between the rate already paid and that hereby imposed.
Edgar Nelson Rhodes: I may as well deal with
the whole schedule at this time, and announce the amendments by way of reductions. The committee is aware, of course, that this is a new method of taxation. Hitherto we have taxed in two ways. First, we had the tax upon malt, and then the gallonage tax. Now we propose to collect one tax upon malt, because we believe that will be the more convenient way of collecting the tax, and a method of taxation which provides less opportunity for evasion. The tax as originally proposed was 7i cents per pound. The officials of the department were of the opinion that on the whole it was comparable to the combined two taxes which were taken under the previous form of taxation. But I do not think they made quite sufficient allowance for the wastage, which amounts to something like fifteen per cent. Furthermore, we collect the tax at once, whereas under the old method of taxation it would be deferred for months untO, when the beer was consumed, the gal-lonage tax could be imposed. So as not to overtax the commodity it is now proposed that the tax should be reduced to six cents per pound, which is a substantial reduction. We have also in mind that so far as our taxation methods can do so we should encourage the use of lighter rather than heavier beverages. We feel that we would like to try it out for at least a year, and it is our belief that as a result of this lowering of the excise duty, which should make possible the five cent glass of beer, the increased consumption will bring about a condition whereby the revenue will not suffer. Let us hope that the people who produce this additional amount of revenue will not suffer by virtue of using the lighter rather than the heavier beverage.


Mr. GEARY:: Could the minister state
definitely that this reduction to six cents does effect a substantial reduction in the gross taxation to which the article was subject before?


Edgar Nelson Rhodes: Yes.


George Reginald Geary: I should like the minister to make the paragraph plain, because naturally a great many people are interested in this matter.


Edgar Nelson Rhodes: The old tax amounted to
17-75 cents per gallon of beer. The new tax will be 14 cents, making a reduction of 3-75 cents per gallon. I therefore move:
That in paragraph (a) of resolution No. 1 the words "six cents per pound" be substituted for the words "seven and one-half cents per pound," and that in paragraph (b) the word's "six cents per pound" be substituted for the words "seven and one-half cents per pound," and that in paragraph (c) the words "eight cents per pound" be substituted for the words "nine and one-half cents per pound."


Samuel William Jacobs: Do I now understand we
are changing the system and that we are now taxing beer by the pound instead of by the gallon?


Edgar Nelson Rhodes: We are taxing malt by the pound, from which beer is made, and we are removing entirely the gallonage tax.


William Daum Euler: I quite agree with the minister that the change he has made will be a more convenient method of collecting the tax, so far as the Department of National Revenue is concerned. I am afraid I cannot quite agree with him, with the information I have before me, that it will make a very substantial reduction in the price of the beer. The figures I have indicate that under the present method of taxation the tax per gallon of beer or ale works out at 19-7 cents per gallon. With the proposed tax as the minister hiad it at first of 7i cents-


Edgar Nelson Rhodes: My hon. friend must make a reduction there to cover wastage. That is why I used the figure 17-75.


William Daum Euler: But I understand that under the present method there is no allowance made for wastage.


Edgar Nelson Rhodes: There will not be under the new method.


William Daum Euler: Exactly. There was no
allowance made for wastage, and that was one of the main objections made by the brewers.


Edgar Nelson Rhodes: I want my hon. friend to have the record right. The two figures I gave showing a reduction of 3^ cents per gallon took cognizance of wastage.


William Daum Euler: The point I rose to make really was this. The minister expressed the hope that this would reduce the cost of beer. I suppose the inference was that it would lead to increased consumption, and that by reason of increased consumption the revenues would be just as great as if not greater than they

Excise Act
otherwise would be. The reduction he announces to-night as compared with that announced when the budget was brought down represents about 34 cents a gallon, and I am very much afraid that 34 cents a gallon will hardly make much of a difference.


Edgar Nelson Rhodes: I am told that it means a five cent glass of beer.


William Daum Euler: I was merely going to express a certain amount of doubt whether a reduction of 34 cents a gallon would be of material help in that direction.


Edgar Nelson Rhodes: My hon. friend must bear in mind that we consume in Canada about forty million gallons, so it amounts to a very substantial reduction.


William Daum Euler: I admit that I do not know very much about it. If the man who sells the beer is going to reduce the price from ten to five cents, he is likely going to cut down the size of the glass. One would not think that 34 cents a gallon would make much difference in the price of a glass.
There is one other point. The minister said he hoped that this would perhaps lead to the consumption of beer and drinks of that sort rather than the consumption of hard liquor. This point has been drawn to my attention, and I think it is true. Even to-day you are putting a higher tax on beer than you put on native wine. I am not sure that that should be done. Beer also is a native production, and I cannot see any good reason why this popular drink, perhaps much more popular than native wine, should be taxed higher than native wine.


Humphrey Mitchell: I understood the minister to say that the tax on malt was six cents a pound, but in another section I see it is 17 cents a pound.


Edgar Nelson Rhodes: My hon. friend is thinking of malt syrup. I have an amendment to that section.


Humphrey Mitchell: I know what I am talking about when I talk about malt syrup. A reduction in that tax is reducing the cost to the individual who wants to brew his own beer.


[Stage Direction]
Paragraph agreed to.
2.	(a) That the existing duty imposed on beer or any fermented beverage made in imitation thereof, brewed in whole or in part from any other substance than malt, be increased from fifteen cents per gallon to twenty-five cents per gallon, thereby maintaining the differential rate of duty between beer brewed
by the use of malt and beer brewed by the use of other substances and combining with the said excise duty the gallonage tax imposed upon such liquor under the Special War Revenue Act.
(b)	That an excise duty be imposed on all beer imported into Canada and taken out of bond for consumption at the rate of twelve and one-half cents per gallon, to replace the excise tax imposed at the same rate under the Special War Revenue Act.
(c)	That an excise duty be levied upon all beer brewed from duty-paid malt in storage at the time of the coming into force of this act at the rate of ten cents per gallon. [DOT]
Edgar Nelson Rhodes: I move that paragraph 2 be amended by substituting the word "twenty-two" for "twenty-five" in line 3 of paragraph (a), and by substituting the words "seven" for the words "twelve and one-half" in paragraph (b), and by substituting the word "seven" for the word "ten" in paragraph (c).


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
3.	That an excise duty be levied upon all unfermented wort (sweet wort) suitable for the brewing of beer, in storage and unsold at the coming into force of this act, at the rate of ten cents per gallon, thereby equalizing the duty to be levied upon such sweet wort with the duty to be levied upon the malt entering into the production of sweet wort produced after the coming into force of the increased duty on malt hereby proposed; the tax imposed upon such wort under the Special War Revenue Act to be repealed.
Edgar Nelson Rhodes: I have an amendment to this resolution, Mr. Chairman, that the word "seven" be substituted for the word "ten" in line 3. That makes it seven cents a gallon instead of ten cents, a reduction of three cents per gallon.


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
4.	That excise duties be levied on all malt syrup suitable for the brewing of beer at the following rates:
(a)	When manufaetured or produced in Canada prior to the coming into force of this act, per pound twenty cents;
(b)	When manufactured or produced in Canada after the coming into force of this act, per pound seventeen cents;
(c)	When imported into Canada or taken out of warehouse after the coming into force of this act, per pound twenty cents;
the above duties to replace the existing tax imposed by the Special War Revenue Act at the rate of twenty cents per pound, the reduction under (b) being to compensate for the increased duty on malt which enters into the production of such syrup.
Edgar Nelson Rhodes: I have an amendment to substitute the following for paragraph (a):
On hand and unsold on the first day of July, 1934, per pound 13 cents.
Customs Tariff

And to substitute in paragraph (b) the word "ten" for the word "seventeen"; and in paragraph (c) the word "sixteen" for the word "twenty". That makes it sixteen cents per pound instead of twenty. Hon. gentlemen will see that by the amendment to paragraph (b) there is a reduction of about fifty per cent.


William Daum Euler: The minister speaks of a reduction of fifty per cent. Does he mean a reduction as compared with the tax originally proposed in this budget or as compared with the tax last year?


Edgar Nelson Rhodes: The tax was 20 cents last year. The budget proposals made it 17 cents, and we are now reducing it to 10 cents.


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
5.	That any enactment founded on this resolution shall come into force on the first day of July, one thousand nine hundred and thirty-four.
James Layton Ralston: Why not make the reductions retroactive as well as the taxes?


Samuel William Jacobs: Yes, retroactive on the beer we have consumed.


[Stage Direction]
Paragraph agreed to.
Mr. M cl NT OS II: With reference to resolution No. 1 amending the Excise Act and providing that the excise duty on malt be increased, the tax as brought down was 7^ cents.
Edgar Nelson Rhodes: It has been reduced to six cents.


Cameron Ross McIntosh: I was waiting for this resolution to come up, but unfortunately I was a little late coming in. I should like to be allowed to put on record the view of the Star Brewing Company, Limited, of North Battleford in regard to this excise tax on beer. The statement they make is as follows:
Proposed method of collecting excise tax on beer satisfactory but rate too high. Under proposed arrangement all taxes on beer are collected five to six months before beer is sold at practically the old rate. Brewers anxious to reduce beer price by passing reduction in taxation on to consumer. Five cents tax per pound on malt instead of seven and a half would make this possible. Reduced beer price would bring increased sales. Increased sales would mean increased employment, increased actual revenue on malt and in duty on hops.
That is the viewpoint of the Star Brewing Company, Limited, of North Battleford. The minister has made a change in the duty but not the change which this company desires. I wished to put on record their statement in

the matter and to ask the minister if he has .done all that he can with respect to meeting their viewpoint.


Edgar Nelson Rhodes: Representations were made to us by the brewers' association of Ontario, and the lowest figure they suggested was five and a half cents. After conference with the officials of the department, I came to the conclusion they would not be overmodest in their request and that when we had placed the figure at six cents we had gone about as low as we could go with safety. We felt that we were meeting the wishes of the brewers as nearly as possible. What we had in mind was the desire to reduce the tax so that a man could get a five cent glass of beer and I believe that is what will happen under these taxation proposals.


Cameron Ross McIntosh: The same company makes the statement that the proposed change in taxation is of no value and under it practically no reduction takes place. They state that home brewing is made profitable by high taxation and that much revenue is lost; that low taxation would cut out the home brewer and assist in increasing the revenue from legally made beer.


Edgar Nelson Rhodes: There is a reduction and I would be interested in getting the reaction of that company to the new proposals.


Humphrey Mitchell: I object in a humorous way to the observations just made. We should not be preventing people from making their own beer. Many who come from the older countries of Europe have their own recipes and I think they are entitled to just as much consideration as the brewers. This is why I feel more or less gratified at the reduction in the tax to those who brew their own beer.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
1.	Resolved, that the customs tariff, being chapter forty-four of the revised statutes of Canada, 1927, as amended by chapter thirty-nine of the acts of 1929, chapter thirteen of the acts of 1930 (first session), chapter three of the acts of 1930 (second session), chapter , thirty of the acts of 1931, and chapters six and thirty-seven of the acts of 1932-33, be further amended by striking thereout paragraph (j) of subsection (1) of section 2 thereof and by substituting therefor the following:-	_ ,
(j) "proof," "proof spirit" or "proof spirits," means any spirit having the strength of proof by Sikes' hydrometer, that is, spirit which at the temperature of fifty-one degrees Fahrenheit weighs exactly twelve-thirteenths of the weight of an equal measure of distilled water at the same temperature.

Special War Revenue Act
Edgar Nelson Rhodes: This is purely an administrative change, the purpose being to provide a more precise and accurately worded definition of proof, proof spirit and proof spirits. This is in conformity with representations made by the Department of National Revenue.


[Stage Direction]
Resolution agreed to.
2.	Resolved, that the aforesaid customs tariff be further amended by adding to section 5 thereof the following subsection:-
(5) In computing the ad valorem rate of duty on tea purchased in bond in the United Kingdom, the value for duty shall not include the amount of the customs duty payable on tea for consumption in the United Kingdom.
Edgar Nelson Rhodes: This is restoring an old section. It has the effect of lowering the duty upon tea.


James Layton Ralston: Is it correctly worded? It states "in computing the ad valorem rate of duty," but the rate of duty does not need to be computed.


Edgar Nelson Rhodes: It is to relieve the Canadian purchasers of tea from the payment of what amounts to a double duty.


James Layton Ralston: It says, "in computing the ad valorem rate," but that rate is fixed; it should be, "in computing the ad valorem duty."


Edgar Nelson Rhodes: It appeared in the tariff until 1931 at which time it was dropped because for some years there had been no customs duty on tea entering the United Kingdom. The provision had become meaningless but subsequently a duty was placed on tea by the United Kingdom and unless this amendment went through we would be placing a tax upon a tax.


James Layton Ralston: My only point is in connection with the wording of the resolution. I do not think it carries out what you suggest.


Edgar Nelson Rhodes: It is the same as the original section.


James Layton Ralston: As I understand it, the ad valorem rate of duty is fixed.


Edgar Nelson Rhodes: My hon. friend may be right, as I took this without scrutinizing it with any great care. I assumed that the Department of National Revenue knew its own business, but perhaps my hon. friend is right.


William Daum Euler: Should it not be, "in computing the duty"?


James Layton Ralston: There may be a specific duty.


Edgar Nelson Rhodes: I move that the words "rate of" be struck out of the first line of subsection 5.


[Stage Direction]
Amendment agreed to.
Resolution as amended agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend' The Special War Revenue Act, chapter one hundred and seventy-nine of the revised statutes of 1927, and amendments thereto, and to provide as follows:-
1.	That the excise tax imposed by section eighty and schedule II of the said act on the following items be repealed, namely:-
Ale, beer, porter and stout;
Unfermented wort (sweet wort) suitable for the brewing of beer (as imposed by section twenty-seven of chapter fifty of the statutes of 1932-33);
Malt syrup, or malt syrup powder, extracts of malt, fluid or not, or any other malt product suitable for the brewing of beer (as imposed by said section twenty-seven).
(To be replaced by excise duties.)
Paragraph agreed to.
2.	That said schedule II, as enacted by section twenty-seven of chapter fifty of the statutes of 1932-33, be further amended by striking thereout items (i) and (ii) and substituting the following:
[Stage Direction]
(i)	Materials enumerated in customs tariff items 134, 135, 135 (a), 135 (b), 139 (except glucose and grape sugar), 140 (except molasses); invert sugar and syrup, 1 cent per pound;
(ii)	Glucose and grape sugar (except when for use exclusively in the manufacture of leather and artificial silk), i cent per pound.
James Layton Ralston: Could the minister tell us how much was collected under item (i) ?


Edgar Nelson Rhodes: I am informed that the figures are not separated. The total amount received last year was something over $14,000,-
000.


James Layton Ralston: That is when the rates were two cents and one cent per pound?


Edgar Nelson Rhodes: Yes.


James Layton Ralston: Could the minister give a rough estimate of what proportion was collected under the two cent rate?


Edgar Nelson Rhodes: It is not segregated and I am told by the officials that they could not even make an estimate.


James Layton Ralston: Would it not be possible for us to get an estimate of how much was collected from the householder?


Edgar Nelson Rhodes: Sugar is used very largely in industry, and it is not possible to make a computation.

Special War Revenue Act

Mr. RALSTON': What is sugar used for under (ii) ?


Edgar Nelson Rhodes: Glucose and grape sugar take the place of sugar in many manufacturing industries. Confectioners use a considerable quantity.


James Layton Ralston: There must be some assessment in the department showing the quantity on which the 2 cents was collected.


Edgar Nelson Rhodes: I can get that figure.


James Layton Ralston: That is what I want.


Edgar Nelson Rhodes: I understood my hon. friend to ask whether, out of the two cent rate, we could allocate the amount used as domestic sugar and the amount used in industry.


James Layton Ralston: Can the minister give me the information now?


Edgar Nelson Rhodes: I will try to get it before we rise.


Frederick William Gershaw: In view of the fact that a great quantity of home grown sugar is used, has the minister been requested to remove the one cent duty altogther from sugar made from home grown material?


Edgar Nelson Rhodes: I think it is safe to take it for granted that representations have been made with respect not only to this but to every other form of taxation. That is as regular as the rising and the setting of the sun, and I hope my hon. friend will not take that answer as levity. I have no doubt representations have been made but I have no particular ones in mind at the moment.


[Stage Direction]
Paragraph agreed to.
3.	That schedule III to the said act, being the list of articles exempted from the consumption or sales tax, as enacted by section twenty-eight of chapter fifty of the statutes of 1932-33, be amended as follows:
(a)	by deleting the words "when produced by any one manufacturer or producer to the value of not more than three thousand dollars in any one calendar year" where they appear after the words "bakers' cake and pies" at the end of the second paragraph of said schedule and by substituting the words "not to include biscuits, cookies or other similar articles";
(b)	by adding to the said schedule the following:
Sap spouts and sap buckets, evaporators and complete parts therefor, when for use exclusively in the production of maple syrup;
Milk albumen, when for use exclusively in the production of animal or poultry feeds.
Paragraph agreed to.

4.	That schedule V to the said act, as enacted by section thirty of chapter fifty of the statutes of 1932-33, containing list of exemptions from special excise tax imposed by section eighty-eight of the said act, as enacted by section twelve of chapter fifty-four of the statutes of 1932, be amended by adding thereto the following:
"Articles enumerated in customs tariff item 352 (a)."
Paragraph agreed to.
5.	That subsection one of section seventy of the said act, as enacted by section ten of chapter fifty of the statutes of 1932-33, be repealed and the following substituted therefor:-
70. (1) No postal note shall be issued under the provisions of the Post Office Act unless there is affixed thereto a postage stamp of the value of:
(i)	one cent if the amount of money for which postal note is issued is not more than one dollar;
(ii)	three cents if the amount of money for which the postal note is issued exceeds one dollar; to be paid for by the purchaser of the note.
Mr. VENIOT:: Is the minister aware that
no postage stamps are affixed to postal notes? The war tax is collected by the printing in the comer of words indicating that the tax is paid, but no stamp is affixed.


Edgar Nelson Rhodes: I got this wording from
the Post Office Department.


Peter John Veniot: I looked up the act just
now and was surprised at the discovery that no stamp is affixed at all; it is printed on the corner.


Edgar Nelson Rhodes: Might not that be considered as the affixing of a stamp? My hon. friend knows more about it than I do, but I took the views of the Post Office Department. I shall be glad to look into the point.


Peter John Veniot: It would be just as well for the minister to look into it.


James Layton Ralston: How much will be collected under this item?


Peter John Veniot: Last year about seven million notes were issued?


Edgar Nelson Rhodes: It is not a large amount,
somewhere in the neighbourhood of $150,000.


Peter John Veniot: More than that. Last year three cents was collected on every postal note, and if I mistake not there were over seven million postal notes issued, so that it would be about $250,000. Why not make the postal note entirely exempt from the tax up to $3? It is the poor man's note, and I think it

Special IFar Revenue Act
should be exempt. Let money orders pay the war tax, but I suggest that postal notes be exempt to the extent I propose.


Edgar Nelson Rhodes: I shall be gLad to consider the suggestion. While however the tax seems trivial it runs into a substantial sum of money. I have known of instances where, the tax on cheques not being applicable above $5, a man of considerable means was at pains to write three cheques of S5 each rather than one cheque for $15, thus saving a few cents in taxation. There is always that temptation and we think it preferable to grade the tax. After all, one cent on a postal note is not a very heavy tax and on the whole cannot be regarded as an undue burden.


[Stage Direction]
Paragraph agreed to.
6.	That subsection two of section seventy-seven A, as enacted by section twelve of chapter fifty of the statutes of 1932-33, be repealed and the following substituted therefor:-
77A. (2) Except as hereinafter provided, every manufacturer and every importer of cigarette paper tubes shall affix to every package of cigarette paper tubes manufactured by him or imported by him into Canada, an excise stamp of the value of three cents for each one hundred cigarette paper tubes or fraction of one hundred cigarette paper tubes contained in such package.
Paragraph agreed to.
7.	That subsection one of section eighty-three of the said act be amended by repealing paragraph (b) and substituting the following:
(b) a tax of seventy-five cents per gallon on champagne and all other sparkling wines.
James Layton Ralston: On the basis of last year's collections how much does the minister expect to lose by this reduction?


Edgar Nelson Rhodes: I am not in a position to give my hon. friend amounts, but I may say that I expect to gain by this because the tax of SI .50 as it stood before was too high and the sales were negligible. It is felt now by this reduced impost we shall collect more money than we did when the rate was double the amount.


James Layton Ralston: What was the amount collected last year?


Edgar Nelson Rhodes: Last year, $13,000 gross.


[Stage Direction]
Paragraph agreed to.
8.	That section eighty-eight of the said act, as enacted by section twelve of chapter fifty-four of the statutes of 1932, be amended by adding thereto the following proviso;
Provided, further, that the said tax be at the rate of one and one-half per cent on all
71726-222J
goods imported into Canada entitled to the benefit of the British preferential tariff or any lower tariff.
James Layton Ralston: What was the total
amount of three per cent excise tax as levied on these goods?


Edgar Nelson Rhodes: My hon. friend wishes to know the total amount raised by the three per cent excise tax in its full application?


James Layton Ralston: On British preference
goods.


Edgar Nelson Rhodes: The total amount collected last year on all goods was, in round figures* $14,000,000. I am speaking from memory but, I think, accurately. The amount collected on British preference goods was $3,000,000. Therefore on the basis of this computation we shall reduce the revenue by $1,500,000.


James Layton Ralston: I think I would have left out the postal notes altogether.


[Stage Direction]
Paragraph agreed to.
9.	That there shall be imposed, levied and collected a tax of ten per centum on the value of gold deposited for sale at the Royal Canadian Mint, such value to be an amount calcur lated under regulations to be made by the governor in council on the basis of the sale price of gold in the world market converted into Canadian currency at the prevailing rates of exchange, the amount of the tax to be deducted from the value so determined before final settlement is made by the Mint with the depositor.
Edgar Nelson Rhodes: In conformity with the
announcement made by the Prime Minister as to amendments to be made to this tax I propose to move an amendment to resolution No. 9. Inasmuch as it is now five minutes to eleven o'clock and I should like to table the findings of the tariff board before the house adjourns, I might just give notice of this so that it will appear in the votes and proceedings together with the other amendments in order that hon. members may before the next sitting have cognizance of all the amendments. I will hand to the chairman so that they will appear in the votes and proceedings, amendments to resolutions Nos. 9, 10, 11, 12, 13 and 14.


Mr. YENIOT:: To have the record correct as to postal notes, I have the exact number issued for the year ending March 31, 1933. It is 5,963,807.
Progress reported.
Questions


TARIFF BOARD REPORTS
Edgar Nelson Rhodes: While we were in committee of ways and means I gave notice of certain amendments to tariff resolutions in consequence of reports of the tariff board. With the consent of the house I desire now to lay on the table reports of the tariff board on nursery stock, hats and hoods, and cellulose acetate yarns.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, May 30, 1934