1934-04-30

[Stage Direction]
Bill No. 66, f'r the relief of Helen Isabelle Smith Maybee.-Mr. Bell (St. Antoine).
Bill No. 67, for the relief of Sybil Eileen Dyson Richardson.-Mr. Bell (St. Antoine).

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

Mr. McINTOSH:: 1.	Have any soldier settlers been compelled to leave their farms during the past year, 1933-34, that is, since the passing of "An Act to amend The Soldier Settlement Act," assented to May 23, 1933?
2.	If so, what was the number and their names, by provinces?


Mr. CAHAN:: 1.	No soldier settlers have been compelled to leave their farms as a result of action by the Soldier Settlement of Canada or the Department of Indian Affairs since the passing of "An Act to amend the Soldier Settlement Act" assented to May 23, 1933.
2.	Answered by No. 1.


MOOSE JAW, SASK., RELIEF CAMP
Mr. VALLANCE:: 1.	What amounts have been charged by the Saskatchewan relief commission to the government for the operation of the camp for single unemployed and destitute men at Moose Jaw, Saskatchewan, from June 16, 1933, to March 31, 1934?
2.	What are the terms of the contract between the Saskatchewan relief commission and the contractor in charge of the camp, one J. H. Timms, and covering the above periods?
3.	What amounts have been expended by the contractor during this period for: (a) clothing; (b) food; (c) wages; (d) all other expenses of the operation of the camp?
4.	WThat are the names of the employees of the contractor in the said camp and what wages are paid to each?
5.	What is the average number of men housed in this camp per day since June 16, 1933?


Mr. GORDON:: The following telegram has been received from C. B. Daniel, General Manager of the Saskatchewan Relief Commission, in response to a request from the Department of Labour for the information called for by the above inquiry:
Re telegram April twenty Vallance questions one commission do not operate camp at Moose Jaw or any other place in province (stop) We furnish sustenance and shelter through caterer for physically unfit men and for physically fit men pending placement in federal camps or farm homes (stop) Dominions share of costs at Moose Jaw from June sixteenth nineteen thirty-three to March thirty-first nineteen thirty-four is nine thousand three hundred and twenty-nine dollars this being fifty per cent of forty cents per man day (stop) J. H. Timms is caterer at Moose Jaw two Timms furnishes three meals per day also beds laundry bath medicines towels heat light water

Questions
at forty cents per man day (stop) Salvation Army provides same services at Regina same terms also same arrangements other urban centres three we have no knowledge (stop) Satisfied caterers give full value province furnishes clothing four we have no knowledge five approximately two hundred per day note caterers at Regina and Saskatoon recently asked for higher rate per man day due to increased costs of foodstuffs.


PENITENTIARY RIOTS-COUNSEL ENGAGED
Mr. MITCHELL:: 1.	What counsel were employed to prosecute the offenders in the penitentiary riots at St. Vincent de Paul, Kingston, and Dorchester?
2.	Were they appointed by the federal or provincial governments?
3.	Who paid their expenses?	.
4.	What was the total amount received by each counsel?


Mr. GUTHRIE:: 1.	St. Vincent de Paul-J. E. C. Bumbray, LL.B. in the preliminary proceedings, and in association with the local Crown Prosecutor at the trials.
Kingston-J. Keiller MacKay, LL.B., in preliminary proceedings, and certain of the trials. The local Crown Prosecutor at the remainder of the trials.
Dorchester-E. C. Weyman, in the preliminary proceedings, and in association with the local Crown Prosecutor at the trials.
2.	Mr. Bumbray, Mr. MacKay and Mr. Weyman were appointed by the federal government, Mr. MacKay was appointed by the provincial government for certain of the trials.
3.	The expenses of Mr. Bumbray, Mr. MacKay and Mr. Weyman were paid by the federal government, except such as were paid to Mr. MacKay by the province.
4.	Paid by the dominion-J. E. C. Bum-brav, LL.B., $4,956.09; J. Keiller MacKay, LL.B., $3,109.85; E. C. Wej-man, $1,736. No information as to amounts paid by provinces.


CHIEF SUPERINTENDENT, POST OFFICE SERVICE
Mr. BOULANGER:: 1.	Who is the chief superintendent of the post office service?
2.	When avhs he appointed to such position.
3.	What is his salary?
4.	Where was he horn?
!i. When did he enter the civil service?
6.	How long was he in Canada before he was appointed to the civil service?
7.	When was he permanently appointed?


Mr. SATJVE:: 1.	Underwood, Edward James.
2.	30th October, 1925.
3.	$5,220.
4.	Hanley, England.
5.	5th October, 1914.
6.	No information.
7.	1st April, 1915.


DREDGE NO. 126
Mr. BRASSET:: 1.	Who is at present the watchman of the dredge of the Public Works department at Havre aux liaisons, Magdalen Islands?
2.	W7hat salary does he receive?
3.	Are any persons other than the watchman
receiving a salary or remuneration from the Public Works department in respect of such dredge?	,
4.	If so, who are such persons and what salary or remuneration are they receiving?


Mr. STEWART (Leeds):: A similar question to the one above was previously asked by the hon. member for Gaspe on February 2, 1934, and answered on February 5, 1934. (See Hansard of February 5, 1934, page 264). The answer is the same at the present time.


STE. ANNE DE BEAUPRE RELIEF WORK
Mr. CASGRAIN:: 1.	Have any complaints been made by unemployed men regarding certain unemployment relief undertakings carried out by tire municipal council of St. Anne de Beaupre during the winter of 1933?
2.	If so, what are the names of the unemployed who complained and 'what w-as the nature of their complaints?


Mr. GORDON:: 1.	Yes.
2.	The names of the unemployed who complained are as follows:	C. Cloutier, Alfred
St. Hilaire, Freddy Racine, Elzear Leclerc, Gerard Gagnon, Omer Tetu, Maurice Tetu, Joseph Mereier. The complaint consisted of a petition from the above mentioned unemployed, who complained that they had been compelled to work on private property in return for the direct relief granted to them by the municipal^-.


ROYAL CANADIAN MOUNTED POLICE
Mr. GOULET:: 1.	What is the total number of men engaged in the Royal Canadian Mounted Police?
2.	How- many of these men are of French origin?
3.	How many of such men are Canadian-born?


Mr. GUTHRIE:: I am going to ask that this be passed as an order for a return, except as to the second question. We have no record as to which members of the mounted police are of French origin. We can tell, with respect to the third question, who are Canadian born, and that will be shown in the return.


Mr. SPEAKER:: Question stands as order
for return except as to the second question, which is dropped.

2640 *
Questions as Orders for Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. GOULET:: 1.	What is the total number of men engaged in the Royal Canadian Mounted Police?
2.	How many of such men are Canadian-born ?


MERCHANT MARINE
Mr. HOWARD:: 1.	How many boats were originally purchased or built by the government for the government merchant marine?
2.	What year was the first construction contract let?
3.	When was the fleet numerically at full strength ?
4.	What was the total cost of the boats purchased and built?
5.	How many boats does the government merchant marine still own?
6.	How many were sold during each of the following years 1030. 1031. 1032. 1933?
7.	What price did they bring?



MOTION FOR PAPERS


Mr. H. E. SPENCER (for Mr. Mitchell) moved:: For a copy of all instructions issued by and under the authority of the Minister of Pensions to the administrative officers of the Department of Pensions during the last twelve months.


Mr. BENNETT:: It is understood, of course, that this motion will not cover the ordinary correspondence between administrative officers in the department; but any instructions that have to do with the administration of the Pension Act would be included.


Pierre Édouard Blondin: Carried with the exception noted.
CANA DA-AUSTRALIA RADIO On the orders of the day:


Mr. THOMAS REID (New Westminster):: I would like to direct a question to the right hon. the Prime Minister with reference to the statement which appears in the press by the Hon. Archdale Parkhill that direct radio service between Canada and Australia is likely to be replaced by a United States service from United States stations, and that the Point Grey station is likely to lose that traffic. Has the Prime Minister any statement to make in that regard:


Richard Bedford Bennett: The whole matter of radio communication between Australia and Canada was under consideration by the Postmaster General of Australia, the Postmaster General here

and the technical officers of the departments that were in a position to speak with authority on the matter. I have no statement yet to make. The matter is largely one for technicians.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, April 23, consideration of the motion of the Minister of Finance that Mr. Speaker do now leave the chair for the house to resolve itself again into committee of ways and means, and the amendment thereto of Mr. Ralston.
Hon. II. H. STEVENS (Minister of Trade and Commerce):	Mr. Speaker, first of all I
should like to extend to the Minister of Finance (Mr. Rhodes) my congratulations upon the able manner in which he has discharged what is always a very difficult and onerous task. His was a clear and frank statement of the country's financial position without any attempt to minimize the difficulties or to evade the responsibilities inherent thereto. In his speech as the chief critic of the opposition, the hon. member for Shelburne-Yarmouth (Mr. Ralston) discharged his duty in a manner which was no doubt entirely satisfactory to those with whom he is associated and for whom he spoke. However,
I do not think he will think it a discourtesy on my part if I refrain from following his lead in the form of my remarks. I assume the function of a critic is to criticize, and in that respect the hon. member undoubtedly discharged well his duty. I think on this occasion he excelled himself. But as I listened to his remarks it struck me that they were singularly lacking in any constructive feature. He most skilfully evaded all recognition of the very difficult circumstances in which this country in common with all other countries is placed or of the problems which face this country in common with others. This thought came to my mind: Can it be possible that the hon. gentleman and those with whom he is associated are unaware of the significant changes, both social and economic, which have come about in this and other countries during the past fifteen years? These changes are not merely due to the depression of the last three years; they have been reaching a degree of completion in recent years but they have been coming about for at least fifteen years.
The object of a budget is, first, to acquaint the country with the financial status of the country and, second, to survey affairs generally with regard to trade and other matters,

The Budget-Mr. Stevens
both internal and external. I have intimated already that in my opinion the Minister of Finance discharged his duty in a most admirable way. He was unbiased by his difficulties and courageously disclosed to the house the precise conditions. Of course, any minister that does that lays himself open to criticism here and there with regard to the details of his speech. But it was necessary that this be done and I think the minister has discharged his duty with credit to himself and to the house.
My purpose to-day is to invite consideration by the house of certain factors which vitally affect our trade and commerce, both internal and external, and which have resulted in a considerable rearrangement of modern business practices. This rearrangement has been almost revolutionary in its character and effect. Old shibboleths such as the law of supply and demand, buy that we may sell and tariff for revenue only will not extricate this or any other country from the embarrassing entanglements into which their trade has been drifting because of the operation of these new and potent factors.
First, let us look at Canada. As far as Canada is concerned, the most tragic and significant fact is the subnormal price of farm products and the consequent loss of purchasing power of the people in a very large section of the country. Some one will say, " Expand your foreign trade," but that is no answer. I would point out this one simple fact, that apart from wheat-I am speaking now of agricultural products-we consume within the bounds of Canada the major portion of the products of our farms. I shall run over a few. We consume something like 98i per cent of the butter produced in Canada, exporting and importing very small quantities. We consume 90 per cent of the bacon and 98 to 99 per cent of the beef produced in Canada. These are the most important but there are others. The fact remains that the major portion of our farm products are consumed in Canada and, therefore, it behooves the house to give a very careful study to whatever factors are now operating to contribute to the embarrassment of the producer and to the low prices which the consumer is now paying. As I have intimated, it is my intention to examine certain factors, both internal and external, which have a vital effect upon this and other questions pertaining to the trade, commerce and industry of this country.
There is a startling fact to which I should like to invite the attention of the house. Since the war Canada has passed through what is virtually an industrial and trade revolution. This has not occurred among the
workers but in the control and ownership ot the business organism of the country. The more I study this matter the more startling it becomes. Private ownership and personal supervision have been displaced to an almost unbelievable extent by a bond form of capital and corporate management. This applies to industrial and commercial distributing concerns, and it is difficult to estimate to what extent this change has affected the well being of those engaged in agriculture and industry. In order to demonstrate what I am referring to in these general remarks I shall give the house certain facts which, in my opinion, have a very significant bearing upon our affairs. The tendency to merge business under a limited control was prevalent in Canada and abroad before the war but it was checked by the war. Just as the war checked the extension of the merging of business under limited control, so did the depression of 1929. Whether or not that depression was due to that tendency I should not like to say but the fact is that for the time being it curbed the merging of business. In order that the house may get a proper perspective of this matter, which I consider to be of very grave importance, I should like to quote from a government report issued in 1913. This is a report on industrial mergers and over capitalization and I shall read some brief extracts from it in order that the house may be seized of the significance of the movement at that time and its consequences. I propose also to examine some factors with regard to external matters. This report of 1913 says:
Towards the close of the decade 1900-1910 a tendency to form amalgamations became marked among industrial enterprises in Canada. The tendency reached the proportions of a movement more or less general in 19091910; but it later almost completely subsided.
Then the report goes on to quote the Monetary Times, to the effect that in that period there were a great many mergers formed absorbing 248 companies, the aggregate capital of which was $456,000,000. This however is the significant part of the quotation :
The outstanding feature of the merger movement in Canada as above developed was its lack of success. Of the 56 amalgamations just mentioned, several met complete failure, several were saved only by drastic reorganizations, and several had to defer dividends on bonds and stock issues. Profits estimated on the "savings" above enumerated-
That is, the savings due to management and to other causes usually given as arguments in favour of mergers.
-in many cases did not materialize. Consolidation in itself, it was found, by no means
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[Stage Direction]
guarantees economies or larger profits as compared with the operation of individual plants. Many unexpected difficulties cropped up in the process of welding individual plants together.
I read that merely to indicate that there were before the country and before economists certain facts which I do not think were given very much credence or very much attention; otherwise we should perhaps have known better than to do some of the things we did subsequent to the war.
Let us turn to the period following the war. During the years from 1922 to 1929 there were formed in Canada no less than 120 mergers, involving over 500 separate companies. Of power and paper mergers there were 8, which took in 58 concerns. A biscuit merger absorbed 7 of the old companies; the Eastern Dairies absorbed 10 local companies; the Dairy Corporation of Canada took in 6 separate companies; 4 flour milling companies absorbed 48 bakeries; 1 paving corporation gobbled up 14 independent companies; 11 public utility corporations combined 46 local companies; General Steel Wares combined 5 companies, including such concerns as Me-Clarys, which for a generation had been a household term in this country, and Happy Thought. It is difficult to realize the effect that this has had on our national life. The social change resulting from this was most striking, because this is what ensued. Of the 500 companies which were thus merged into a much more limited number, the heads of these companies vanished as leaders in business. Some of them of course were carried into the merger and occupied positions of leadership; but by long odds the largest proportion of these independent leaders were eliminated from the business life of the country and no longer contributed either their experience or their guidance to its affairs.
I have also under my hand a statement-
I will not read it in detail-showing that a large number of these companies failed financially; in other words, they were not successful as mergers. So that from the economic standpoint there was no gain to the country so far as they were concerned. In reference to this matter I would quote some extracts from a book recently published by Mr. T. E. Gregory. Gold, Unemployment and Capitalism is the title of the book, and the author is recognized, I think, by a great many as a high authority on subjects of this kind. His words in reference to this tendency to merge or to form cartels, to which he also

refers, should warrant I think at least some attention. This is what Mr. Gregory says:
To have both planning and freedom, regulation and perfect elasticity of organization and technique is an impossibility. The difficulty of reconciling capitalism and planning may be judged by the mistakes committed in the last ten years in consequence of the enthusiastic acceptance by certain classes of business men in all countries of the doctrine of rationalization.	.
Further on he says:
What has caused so many rationalization projects to fail, that is, to disappoint from the financial point of view, has been the neglect of the distinction between the technical optimum and the economic optimum; and neglect of this distinction is peculiarly liable to occur when the direction of economic enterprise passes out of the hands of those trained to think in terms of the market into those trained to think in terms of the process subsidiary to the output of a certain product or service.
Then he concludes:
The fact remains that the rationalized undertakings of the era 1922-29, with their enormous overhead investment, their centralization of initiative and authority, their greater ability to monopolize the market and to buy on the most favourable terms, have not shown themselves conspicuously more successful than the non-rationalized undertakings. They have lacked adaptability, and elasticity, and for my own part I believe we shall witness a less blind worship of size and authority and monopoly in business for some time to come, unless indeed the whole process of economic adjustment of scale of output to demand is to be permanently prevented by the intervention of the state.
In other words, he directs attention to the growing tendency towards the development of mergers and monopolies in business, and to the obvious failure of this effort. May I give a more striking illustration of the working-out of this tendency? I give this 'because it applies to the commonest of all foodstuffs, bread, and it does present to my mind, to the mind of every thoughtful person, and particularly, I fancy, to this house, subject for very careful consideration.
Six mill-controlled bakeries in Montreal, with an aggregate yearly capacity of 163 million pounds of bread, can supply four-fifths of the bread sold throughout the whole province of Quebec. The total of all bread sold in Montreal alone is some 88 million pounds. In other words, these six controlled bakeries could supply 80 per cent of all the bread required in the province of Quebec. The significant fact is that in Montreal there are 126 bakeries and in the province of Quebec 887. Yet these six have the capacity to control 80 per cent of the supply of the whole province.

The Budget-Mr. Stevens
Take Toronto. Six of Toronto's seven mill-controlled bakeries report a capacity of 202 million pounds. The total consumption in Ontario is 403 million pounds; in other words, these six bakeries in Toronto could supply half the total bread consumed in Ontario. And yet there arc 235 bakeries in Toronto and 1,111 bakeries in Ontario.
In Winnipeg we have this situation. Three mill-controlled bakeries have a capacity-77 million pounds-to supply the whole province, for the estimated annual provincial consumption is around 57 million pounds. Yet in Manitoba there are 57 bakeries in Winnipeg while in the whole province there are 136.
In Vancouver there are four mill-controlled bakeries with an estimated capacity of 50 million pounds, whereas the total consumption for the whole province of British Columbia is 58 million pounds. Yet. there are 99 (bakeries in Vancouver and 267 in the province.
This question of the development of huge commercial and industrial organizations, with Capacity far beyond the requirements of the community, and with the concentration of control of these industries in the hands of a comparatively small number, constitutes a problem which this country might well keep in mind when considering the policies to be adopted in dealing with these matters. Such is the story. In the light of those facts, very much abbreviated in the telling-and I have under my hand many more facts in support of my contention-can anyone say that our old methods of handling farm products will succeed? I submit this proposition to the house: in the face of the facts to which I have made reference wherein is justified the opposition to an attempt to give Canada marketing legislation which will enable the country, the producers and others interested to have at least some interest in the orderly marketing of their products? The leader of the opposition (Mr. Mackenzie King) says: Let the government keep its hands off this business.
Mr. MACKENZIE KING:: He did not say anything of the kind.


Mr. STEVENS:: He said it over and over again.


William Lyon Mackenzie King: Not at all. He said over and over again: Let parliament make what regulations they like.


Henry Herbert Stevens: That is the difference between Tweedledum and Tweedledee.


William Lyon Mackenzie King: No, it is not.


Henry Herbert Stevens: My right hon. friend has spent about two weeks in criticizing and
objecting to a bill which is designed, as I have intimated, to assist in overcoming the difficulties which have resulted from the concentration of business in a comparatively few hands.


Mr. STEWART (Edmonton):: Let the
Magna Charta function.


Henry Herbert Stevens: My hon. friend says: Let the Magna, Charta function anyway. He may question my other interpretation of his remarks, but Magna Charta will take care of all this.
Let us turn to the question of foreign trade. Are the old conditions of pre-war days operating now? The chief financial critic of the opposition (Mr. Ralston) says: Buy that you may sell. That sounds well; these old shibboleths, as I have said, sound well, but I ask him and the house: Buy from whom and how? From the cartels of Europe? Totally ignoring the change that has come over the organization of industry, business and commerce in Europe, totally disregarding the cartels that have grown up there in recent years, cartels which are international in character and which by their weight and influence very frequently largely direct the policies of government, they tell us that the only thing that is necessary is to buy so that you may sell. Let us examine the situation in regard to the cartels in Europe. In the first place the system so far as the internal operation of cartels is concerned is an old one. For instance, in Germany they have had cartels since, I think, 1874, but the cartel of Germany of pre-war days was one to regulate business within her own territory. These cartels, however, have now become international in scope. It is true that before the war there were a few international cartels; for instance, there was the carbide cartel, the rail cartel, that is concerning the production of steel rails, the incandescent cartel and the aluminum cartel, but it is since the postwar period that we see the development of the great cartels in Europe. These have been used as a means of readjusting the economic structure of Europe; that fact cannot be questioned. In the political, social and economic upheaval which has been occurring in Europe during the past fifteen years we find that the international cartels, understandings between groups of industry in different countries, have played and are playing a very important part. For example, let us take the Franco-German potash cartel. Both the German and French governments are interested in it and it very largely controls the supply of that commodity.
The Budget-Mr. Stevens

Quotas are fixed for producers and also for exporters. I shall cite a few more instances in a moment. In the light of the fact that these international cartels are operating by agreement among groups of an international character, it is not enough to come to parliament and say: The solution of all your difficulties is to buy so that you may sell, because we are dealing not only with governments, not only with conditions that arise out of the imposition of tariffs in Europe and elsewhere, but with a completely new business structure that did not exist before and is of a tremendously important and potent character.
Let us take, for example, the steel cartel. Germany takes 43 per cent; France, 32 per cent, Belgium and, I think, one or two other countries the balance. Let me illustrate my point now. Canada is anxious and desirous in every way of trading with Belgium. Belgium is anxious to trade with Canada. That therefore looks like a comparatively simple proposition, but when we come down to a study of the actualities, what do we find? We find that a great steel cartel which controls the output of steel in Belgium as well as in Germany and France, has indicated that the price of steel exported to Canada shall be at a certain figure, which figure has no relation to the cost of production. I ask the house: Is the government of Canada called upon to stand idly by and allow an international industrial cartel in Europe to ship steel into Canada at figures obviously unfair according to our law as applied since 1905 to all other countries regarding goods sold at prices below cost of production? We cannot do so and that is one of the problems that arise between countries when they attempt to make agreements or understandings.


Mr. HANBURY:: How are you going to break that?


Henry Herbert Stevens: If my hon. friend will follow me I shall try to elucidate this matter a little further. Under this cartel one dollar per ton is taken for the ordinary business affairs of the cartel, but should one member of it exceed its production quota, it is fined $4 a ton and out of the fund thus raised those who come under the quota are paid for any losses which they may incur. For instance, the German industrialists had, I think, to pay several million dollars into this fund. I am seeking, however, to emphasize the fact of the existence of these cartels.
Let me cite one or two others. There is the chemical cartel which has grown to proportions that I think were undreamed of before the war. It is still in existence. I am not

condemning cartels but I am inviting the house to take note of the fact of their existence just as I have invited the house to take note of the fact of the merger of companies in Canada as a new set-up in the structure of our business organizations. There is the rayon cartel, well known to be a strong international set-up, and the linoleum cartel. The copper cartel in 1928 and 1929 fixed a price of eighteen cents a pound and copper stood at that figure for two or three years. It is true that after the depression set in the price was broken, but the cartel is still in existence. Let us take lead and zinc. As regards zinc, Belgium, Holland, France, Germany, Poland, Great Britain, Spain and, I think in a sense Canada and the United States, are in this cartel. I remember not so very long ago that certain purchasers of lead, wanting to buy it in large quantities for a European country, were desirous of buying it in Canada. What did they find? The only place where they could buy that lead was in London from a certain firm which controls the export of lead to those countries. Why? Because of an international understanding among the countries of the world controlling the marketing of lead. It may be argued that the government of Canada should force, for instance, any Canadian producer to step out. But what would happen? Simply this; you would close up your lead mines, and the Canadian producer would have no opportunity of marketing his goods in any of these countries.


Mr. HEAPS:: In that case could not the
government itself step in?


Henry Herbert Stevens: No, I think not, where
you have a large export as you have in lead, copper and other minerals. What I do think is that the conditions that have caused the cartelization of industry and commerce in Europe suggest the need of an international conference to give special study to this subject. I might say that the League of Nations have already taken cognizance of it and made several reports. As a matter of fact it is declared in one of those reports that so influential and strong were those at the head of some of these cartels that the League of Nations themselves felt that they should not go any further than merely cite the facts. There is a very interesting document published by the United States Department of Commerce, written by Louis Domeratzky, on this whole subject of cartels. It is a most illuminating document. There are also some utterances by the League of Nations.
I have cited this matter of cartels for the purpose of impressing upon the house the

The Budget-Mr. Stevens
fact that there are new elements entering into the question of international trade that were not present formerly. But that is not all. We must now recognize-I have referred to this before, I shall merely mention it- that the question of war debts has resulted in inhibitions and impediments to trade in the form of tariffs and quotas; this is another factor that is beyond our control. The fact that certain countries of the world have been submerged in debt to other countries constitutes an inflexible and inexorable barrier against the importation of goods into that country except under certain conditions. It is just as inexorable as the law of gravity, there is no escape from it. It is senseless and useless for us to talk about moving trade in certain directions when as a matter of fact by reason of the financial condition and obligations of given countries it is impossible for those countries to open their doors to foreign trade except under certain conditions which must take cognizance of the weight of the debt and where it is owed. Yet, sir, there are those who still say that we should extend our markets. Here is another factor which I invite hon. gentlemen opposite to consider. In saying what I now say I am not attaching any blame to hon. gentlemen opposite, I am merely stating a fact. During the years that hon. gentlemen opposite were in office, and I think in perhaps one or two instances before their time, there were some twenty-three most-favoured-nation treaties entered into by this country. What does that mean? It means simply this, if we follow the advice of certain hon. gentlemen opposite and make a trade agreement with Spain or Italy or Greece or any country in Europe covering certain items to be admitted to this country, the moment that agreement is made it immediately and automatically applies to twenty-three other countries. So, sir. when we discuss with a country the question of barter, if you wish to use that term as it is so frequently used lately, as my hon. friend from Shelburne-Yarmouth (Mr. Ralston) said in rather picturesque language the other day, all that is required is to give a quid for a quo-I do not know what he meant by a quid, it suggests chewing tobacco. Give a quid, he says, for a quo. But when you give a country its quid, there are at once twenty-three other countries that can chew on that quid just the same as the one to which you give it. That is one of the problems with which we are faced. It is a question whether that kind of international agreement was wise or unwise, for the moment I am expressing no opinion on that. I know arguments can be advanced in favour of it. But
I say without hesitancy that in the light of the changed conditions, in the light of these other factors in Europe to which I have referred, this doctrine of the most favoured nation, which is embalmed in some twenty-three treaties, is a distinct impediment to the making of agreements with other countries, a grave difficulty.


Mr. OHAPLIN:: Get rid of the hang-nail
treaties.


Henry Herbert Stevens: There is another point to which I wish to refer briefly. Statements have been made about the balance of trade. My hon. friend the critic of the opposition dealt with this at considerable length. It is interesting to note that our periods of excessive borrowings synchronize with the periods of excess of imports over exports. Let us pause and examine that for a moment. Open your doors and allow goods to flow in, they say, the theory being that the moment you do that goods will flow out; and the golden age from 1901-2-3-4 to 1907 or 1908 is cited as proof and support for that doctrine. But turn up your trade returns for these years, turn up your financial balances and what do you find? You find that during the years when Canada did its heaviest borrowings abroad imports exceeded exports. And that must necessarily be; it is as I said a moment ago a law of economics. But what this parliament and the country is called upon to do is to pause and ask itself the question: How long can such a process go on? Obviously it can only go to a point where the borrowings and the interest incurred as a result thereof become a burden beyond the normal capacity of the country to bear.
Let us follow that a step further. This may be a platitude if you like, but nevertheless it is a mighty important law in economics of trade and commerce. A debtor country must necessarily export more than it imports or else it goes in the hole. A creditor country will almost invariably import more than it exports because it is thus that its debts are paid. Let me give the house some very significant figures. Great Britain is a creditor country and has been a creditor country for many years. I have the figures of its imports from 1913 to 1932 before me. We find that imports exceeded exports 'by huge sums every year. There is not a single year so far as I can see in this whole list in which British imports did not exceed exports. But it did not follow that Great Britain was in any sense suffering from that condition, because she was receiving payment for certain things. It was payment of interest, it was payment for services, particularly ship-
264G
The Budget-Mr. Stevens

ping services, which amount to two or three hundred million pounds a year. It was payment of obligations owed to Great Britain by other countries. But a country like Canada, that is a debtor abroad, that owes huge sums and interest, has no opportunity to pay except in goods, or by further borrowings. Speaking on this same subject in 1925, when the right hon. gentleman sat on this side of the house, I pointed out that there comes a time when a country cannot go on borrowing any longer. That time arrived two or three years ago as far as Canada was concerned, because generally speaking the money markets of the world were closed to ordinary borrowings.
Now I would like to examine that a step further. I have in my hand and will take the liberty of placing on Hansard a statement by the bureau of statistics on this subject. It shows what are termed the visible and invisible items in our trade. The hon. gentleman who is the critic of the opposition cited it the other day. What he did chiefly was to play upon item 23 which is cited as " net errors and omissions, $102,000,000." He joked, and said the statisticians could not come within $100,000,000, but what is a $100,000,000 among friends? I think he was most unfair in his criticism of the bureau of statistics. The facts are these-


Mr. RALSTON:: I did not criticize the bureau of statistics, if my hon. friend will permit me to interrupt.


Henry Herbert Stevens: My hon. friend did criticize ;he bureau; he reflected on the bureau of statistics for not being able to account for this $102,000,000.


James Layton Ralston: If my hon. friend will look at the record he will find that is not the ease. I twitted my hon. friend the Minister of Finance (Mr. Rhodes) for showing a favourable balance of trade of $242,000,000 when the bureau of statistics showed $102,000,000.


Henry Herbert Stevens: The $102,000,000 had nothing to do with it.


James Layton Ralston: It certainly had.


Henry Herbert Stevens: If my hon. friend would permit me, he is not allowed to make another speech.


James Layton Ralston: My hon. friend will permit me to finish.


Henry Herbert Stevens: I decidedly object to the hon. gentleman making another speech now.


James Layton Ralston: It has been made clear-


Pierre Édouard Blondin: The hon. gentleman has made his speech, and he will have other opportunities to make whatever statements he desires.


James Layton Ralston: I am raising a point of order, Mr. Speaker, and I have very good authority for asking for an opportunity to correct a misstatement of fact. My right hon. friend the Prime Minister (Mr. Bennett) during the course of a speech by myself, laid down the rule that misstatements of fact cannot be allowed to pass. Objection was taken-


Henry Herbert Stevens: From what page is my hon. friend quoting?


James Layton Ralston: Page 531 of Hansard. I said:
On what question of privilege my right hon. friend is rising, I do not know, I am sure.
Mr. Bennett: The question as to a misstatement of fact. It is always competent to correct a misstatement of fact.
With that authority I am correcting a misstatement of fact by the Minister of Trade and Commerce, if I may be allowed to do so.


Henry Herbert Stevens: In order not to prolong the discussion I will withdraw my statement, because I do not need it at all in my argument.


James Layton Ralston: Very good.


Henry Herbert Stevens: However, in his speech the hon. gentleman reflected upon the statement because at the bottom it showed $102,000,000 unaccounted for.


James Layton Ralston: I did not reflect on the bureau at all.


Henry Herbert Stevens: Well, Mr. Speaker, there is a limit beyond which I do not think I should be interrupted. I listened to the whole of my hon. friend's speech and did not open my mouth once.


James Layton Ralston: But I did not make any misstatements of fact.


Henry Herbert Stevens: I will let that pass, but the point I am making is this: the $102,000,000 to which my hon. friend referred has nothing to do with the matter at all except to this extent, that in dealing with invisibles, as they are termed, there is no country in the world and there is no statistician in the world that can possibly make an exact balance. The general theory is that the business of any country will always balance itself. The point, of course, is that if a country's business is out of balance at the end of a period, though really there is no particular period since it is

The Budget-Mr. Stevens
a continuous process, then the currency of the country will fall in relation to other currencies and there will be automatic impediments, shall I say, to trade. The outstanding example, of course, is the case of Canada and the United States. When Canada's exchange got out of line with the United States exchange our currency fell in value, and immediately and automatically it erected an additional protection for Canadian goods against imports from the United States. In other words, for every one per cent that Canada's exchange was off in New York, another one per cent was added to the general tariff of the country.


Some hon. MEMBERS:: Retract.


Henry Herbert Stevens: I have retracted; what are my hon. friends talking about? What the hon. gentleman said, so far as I can ascertain after a hasty search, was this:
As a matter of fact the bureau of statistics, as the Minister of Trade and Commerce knows, regards this balance of trade as something of a fantasy-
I was not very far off. There is no fantasy about it, and I will deal with that in a moment.
they have an idea that trade always balances eventually, that the total international payments balance, and they do rather a remarkable and. so far as the Minister of Finance is concerned, a shocking thing when they come to show the balance of trade at $102,000,000.
They make no such showing.


James Layton Ralston: Go on.


Henry Herbert Stevens: That was a complete and absolute misrepresentation of the fact. The hon. gentleman says-


James Layton Ralston: Finish the statement.


Henry Herbert Stevens: The hon. gentleman says they do a shocking thing when they show a balance of trade of $102,000,000. I gave the facts as I have them and as my hon. friend had them when he spoke. Here are the facts-


James Layton Ralston: My hon. friend should read on and finish the quotation.


Henry Herbert Stevens: I will finish it; I will read his whole speech, if time and the patience of
the house will permit. My hon. friend went on:
Do you know what entry they make?
I recall to the house the rather dramatic way in which he made that statement:
Do you know what entry they make? They say, "Net errors and omissions, $102,000,000." They do that in order to balance up, because they do not regard this as a real balance at all. Of course, my hon. friend knows that the bureau of statistics, in publishing its statementand so on. Then my hon. friend reads from the report of the bureau.


James Layton Ralston: Go on.


Henry Herbert Stevens: Certainly I am not going to read any more.


Some hon. MEMBERS:: Oh, oh.


Henry Herbert Stevens: I have covered the point; I am not going to enter into a tweedledee-tweedledum discussion with the hon. member across the floor of the house. The hon. gentleman referred to the $102,000,000 appearing in this statement; he will not deny that, and he went on to say to the Minister of Finance that this was shown as a balance of trade. It was not, and in order to show that it was not I will place the statement on Hansard. The first item has to do with commodity trade; the second with exports and imports of gold coin and bullion; the third with the correction for gold movements to convert to Canadian currency; the fourth with freight payments and receipts; the fifth with tourist expenditures; the sixth with interest payments and receipts; the seventh with immigrant remittances; the eighth with government expenditures and receipts; the ninth with charitable and missionary contributions; the tenth with insurance transactions; the eleventh with advertising transactions and so on, including twenty-one items. Then, Mr. Speaker, after citing all these items of visible and invisible trade the bureau of statistics shows, as item No. 23, "Net errors and omissions" to balance the statement. The statement is as follows:
The Budget-Mr. Stevens

Estimated Balance of International Payments for Canada Preliminary Statement for 1933
(000's omitted)
-	Exports Visible and Invisible	Imports Visible and Invisible	Not Debit (-) or Credit (-f)1. Commodity Trade (Corrected by deduction of non-commercial	* 535,000	$ 389,250	+ 146-066,000	850	4- 65-13. Correction for gold movements to convert to Canadian currency..	27.000 40.000	350 55,000	+ 26-6 - 15-0110,000	50,000	+ 60050,000	275,000	- 225 05,000	6,000	- 1-06,500	9,500	- 301,000	1,000	-15,000	11,000	+ 401,500	3,000	- 1-54,000	- 404,000	3,250	+ 0-7514.	Earnings of Canadian residents employed in U.S.A	
15.	Exchange London and New York on interest and maturity pay-	700	+ 0-73,000	12,000	- 9-016. Miscellaneous items such as direct magazine subscriptions, artists	4,000	- 4-040,500	
864,700	864,700	
			
	350,000	250,000	+ 100-0
		40.000	- 40-0
	1,500		+ 1-5
		61,500	
			
	351,500	351,500	
			
	1,216,200	1,114,200	
		102.000	
			
	1,216,200	1,216,200	
			
The whole point, Mr. Speaker, is that of these items comparatively few are according to official statistics but must be estimated, and that is common in all countries of the world. My own criticism of the statement, if I had one. would be that I do not think they allow a large enough item for the services abroad for Canada. I believe the freight charges against Canada are larger than the estimated amount, though I know that very great care is taken to try to get that figure accurately. But, sir, let me go back to where I was when my hon. friend interrupted me. A debtor country must have an excess of exports of commodities over imports. I distinguish very sharply there between the export of commodities as against a general balance of the country's business. It necessarily must have an excess of exports of commodities if it is to make good its balances and debts abroad. For instance there is interest shown in this statement amounting to $275,000,000, and there is freight of $55,000,000

as against a credit of $40,000,000. There are other items as well which must be taken care of.
So, sir, I wish to make this point distinct and clear, that while it is quite competent for a borrowing country to have an unfavourable trade balance and still be sound financially and make good on its general year's trade or business, for a country such as Canada with its heavy obligations abroad, such as interest amounting to $275,000,000 and other services, it is essential that such a country have an excess of exports to some degree commensurate with the adverse balance which is indicated, or it must borrow heavily abroad and increase the public debt, as was done in the years from 1904 to 1913. That is the only alternative. I have pointed out to the house, and I wish to emphasize this now, that this country knows that it is not desirable, if it can be avoided, to add to the public debt merely for the purpose of balancing the exports and imports of this country. So it is

The Budget-Mr. Stevens
highly desirable, indeed it is absolutely imperative, that so far as possible Canada shall create an excess of exports over imports. There are only certain ways in which that can be done, and this government has attempted at least so to adjudge its international trade relations as to achieve that end.
The question is, have we lost trade abroad, and if we have just where has that trade been lost? I am going to examine some very interesting figures. It is well for us to keep in mind the times and dates when these changes took effect, and when I cite, as I am about to do, certain facts and figures I ask the house to remember the metamorphosis that came over the economic and financial structure of this country in the last fifteen years. I also ask them to bear in mind the fact which I placed on Hansard in the debate on the address that in practically every one of the leading countries of Europe higher duties were imposed against Canada during the period before we came into office at all.
Let us look at some of our exports. Hams and bacons are somewhat important I think to Canada, and here are some very interesting figures. In 1925 we exported to all countries 1,20S,721 hundredweight; in 1930 that had dropped to 267,026, or about one-fifth of what we had in 1925.


An hon. MEMBER:: Who was in office then?


Henry Herbert Stevens: WTho was in office? Not this government. In 1934 we had recovered that loss in export to all countries to the extent of 960,178 hundredweight. In other words, we are almost back to where we were before that loss in exports occurred before we came into office.
To the United Kingdom we exported hams and bacon in 1925 amounting to 1,193,186 hundredweight; in 1930 that had fallen to 241,324 hundredweight; and in 1934 it had risen to 945,597 hundredweight.
Take our fish exports to the United Kingdom. In 1925 they amounted to 311,031 hundredweight; in 1930 that had dropped to 143,064 hundredweight, and in 1934 we had made some recovery to 221,270 hundredweight.
Our exports to Great Britain of non-ferrous metals-I have these figures in dollars of value, not the weight, although I have the weight in some of my other papers-


James Layton Ralston: Is my hon. friend giving fiscal years or calendar years?


Henry Herbert Stevens: Fiscal years. For the year ending March 31, 1925, we exported to the United Kingdom non-ferrous metals to the amount of $16,868,927. In 1930 that had dropped to $15,404,363, and in 1934 it had risen to $35,827,707. Mark you, in 1930 copper was selling at 18 cents a pound and now it is selling around 8 cents a pound. Take copper alone, of which our total exports to all countries amounted in 1925 to 438,563 hundredweight; in 1930, 1,577,176, an increase; in 1934 it had risen to 2,161,127 hundredweight. To the United Kingdom we exported 995 hundredweight in 1925; in 1930 67 hundredweight; in 1934, 1,275,579 hundredweight.
Take leather. In 1925 we exported to the United Kingdom -leather to the amount of $1,658,157; in 1930 that had fallen to $1,201,162, and in 1934 it had risen to $2,400,834 in spite of a drastic fall in prices.
Now I come to wheat, about which so much has been said. We have lost the wheat market, my hon. friend from Shel-burne-Yarmouth (Mr. Ralston) said. In 1925 we exported to all countries 191,764 537 bushels; in 1930, 177,006,369 bushels; in 1934, 175,534,255 bushels. In other words, there was a fall in our exports from 1925 to 1930, but there has been no serious loss since.
Take our flour exports to the United Kingdom, which is our big market. There was a drop in our exports between 1925 and 1930 from 3,274,976 barrels to 2,278,916 barrels, or a drop of about one million barrels. In 1934 we had won back to 2,551,249 barrels.
Take the export of our apples to the world. In 1925 we exported 1,406,237 barrels; in 1930, 1,882,280; in 1934 3,476,114 barrels. Yet hon. gentlemen opposite and others say that we have lost trade, lost our business with foreign countries.
Take our exports of lumber to the United Kingdom. In 1925 we exported 235 million feet; in 1930 that dropped to 187 million feet; in 1934 it had risen to 595 million feet.
When we take newsprint we find that there was a sharp increase in our exports between 1925 and 1930; and our export now is again increasing. Our average export in the last three years amounted to 39,600,000 hundredweight as against an average for the previous five years of 37,400,000 hundredweight. So in spite of the difficult times through which we have been passing we have measurably held that trade as well.


Mr. YOUNG:: Has my hon. friend the
figures for our total trade?
The Budget-Mr. Stevens


Henry Herbert Stevens: Yes, I have them here
and will come to them in the course of my remarks.
I now wish to give a few figures of our exports to different countries.
Exports to France
Commodity-	1921	1930	1933Wheat.	.	.$11,200,000	$7,900,000 $9,000,000Oats. .	.	.	1,200,000	300,000	85.000Barley.	.	.	06,000	
55,000Rye. .	.	.	115,000	
34,000
Canned
lobster . .	277,000	260,000	376,000
I could cite the Netherlands, Italy and Germany indicating in some very important items an increase in our exports in these difficult times over the period before we took office.
Take our exports to the United States. While we are accused of destroying trade between Canada and the United States, the figures I am about to present will show just when the reductions in that trade occurred:
Exports to United States Commodity-	1921	1930	1933IVheat. .	.	.$	91,000 $ 7,000 $26,000Flour	
12,000,000	12,000	3,700
It will be noted that our exports of flour in 1930 had dropped just one thousand per cent as compared with 1921:
Exports to United States			
Commodity-	1921	1930	1933Oats. . .	. . $4,700,000	$ 20,000	$71,000Barley. .	. . 1,150,000	69,000	91,666Pease. . .	. . 500,000	99,000	Hay. . . .	. . 3,700,000	321,000	54,000And so on	down the list-horses,	sheep,fresh mutton	and lamb, and	so forth.	I will
give a few more figures: To Uni
Commodity-
Fresh mutton and
lamb	
Poultry	
Tallow	
Butter	
Condensed milk. . . Cattle hides. . . .
and in 1934 to, $278,043,978. Exports to foreign countries in 1933 amounted to 8251,681,028 and in 1934 to, $301,323,067. The increase to all countries amounted to 22'3 per cent; to empire countries, 25'2 per cent and to foreign countries, 19'7 per cent.


Edward James Young: What year?


Henry Herbert Stevens: Just a moment. My hon. friends will say: Oh, but you are citing 1934 as against 1933. Of course we are. We are trying to show to the rather recalcitrant minds of hon. gentlemen opposite that there are evidences of improvement and recovery in this country. We are trying to give a little heart to the country.
Reference was made to the tariff board and I should like to make a brief statement in this connection. The hon. gentleman who criticized the government so bitterly cited this board and attempted to show that the government had been discourteous to it because of some delay in giving effect to its decisions. It was stated quite properly that in setting up this board the government had desired to establish one in which all persons would have confidence, particularly those who while not residents of Canada were extended the privilege of appealing to the board by virtue of an article in the United Kingdom-Canada agreement. In drafting the legislation-


Mr. McINTOSH:: Will my hon. friend tell me from what manuscript he is reading?


Henry Herbert Stevens: I ask the hon. member for North Battleford (Mr. McIntosh): Is that a trick worthy of you?


Richard Bedford Bennett: Oh, yes.


Henry Herbert Stevens: The same trick was tried last year by one of his colleagues. I am reading from a few notes which I made myself; they are my own composition.


Cameron Ross McIntosh: I am satisfied.
ted States 1921

$	72,000
44.000
51.000
8,000
116,000
5,700,000
This at least indicates that the reason why our trade to the United States dropped was the Hawley-Smoot tariff which was passed before this government took office and with which we had nothing whatever to do, influencing it neither one way nor the other. An hon. member asked me for the total trade. I have before me the figures for the fiscal years of 1933 and 1934. The exports to all countries for 1933 amounted to $473,799,955 and in 1934 to, $579,367,045. Exports to empire countries in 1933 amounted to $222,118,927


Henry Herbert Stevens: They may not be up to the statesmanlike utterances of my hon. friend but they are the best I can do. I may tell my hon. friend that the reason why I read this-surely I cannot be criticized very bitterly for quoting in the house?


Cameron Ross McIntosh: I am satisfied now.


Henry Herbert Stevens: I jotted these notes down because I wanted to be accurate in my utterances. They have not been submitted to anyone for correction, addition or deduction.

The Budget-Mr. Stevens
In drafting the legislation setting up this board, every reasonable precaution was taken to anticipate all the requirements essential to the free and untrammelled operation of the board, but with the many conflicting interests involved in matters pertaining to tariffs, it could not be expected that questions would not be raised as to jurisdiction or powers of the board. Such an instance occurred in connection with what is known as the jute twine case which was cited by the chief critic of the opposition. This was not a question as to whether or not the government would accept decisions of the board, it was definitely a question of jurisdiction of the board in making a decision in the form in which it was made. The matter went to appeal to the governor general in council, which was within the rights of the appellant, and it was decided to refer the point of law to the supreme court for a decision. It was a verjr difficult and considerably involved point and obviously some time would have to elapse during the period of consideration of the matter. There was no undue delay as the matter is now before the supreme court and it is entirely out of place to make it a subject of controversy on the floor of this house. Giving my own personal views, I have no hesitancy in saying that we have done everything we can faithfully to carry out the terms of the United Kingdom agreement, not only as it relates to this particular matter but to all others therein. There is no doubt that delay will occur in connection with difficult matters which may arise from time to time. I make this statement deliberately because of the time spent by the hon. gentleman in criticizing the government in connection with that case and placing before the country an entirely distorted and I think grossly unfair presentation of the matter. There is no iesire either by members of the government Dr by those in the ranks that support the government to do other than treat all as fairly as possible in this matter. As I have said, many complicated and difficult points are bound to arise which cannot be settled, shall I say, ex parte or offhand.
I shall hasten on. There has been some criticism regarding the gold tax and I intend to make a brief presentation with regard to that and invite consideration. I think the first question which this house should ask itself is: Was this tax a fair tax or was a tax on gold a justifiable action by the government? Let me remind the house that under the law as it stands at the present time mining companies, including gold mining corn-74726-168
panies, are exempt from the payment of fifty per cent of the corporation income tax. There has been a fifty per cent exemption for exhaustion purposes. In the second place, when dividends are paid by mining companies, including gold mining companies, to their shareholders, there is a fifty per cent allowance on the personal income tax on such dividends. The gold mining industry in common with the rest of the mining industry has received already very gracious and generous consideration in the remission of taxation for the protection of possible exhaustion. The hon. gentleman who spoke officially for the opposition stated that the mines themselves pay a corporation income tax while the shareholders pay the income tax which is imposed upon individuals. He very skilfully ignored what I have just said, namely, that there is a fifty per cent rebate or allowance for exhaustion. Then my hon. friend said this:
[DOT]-there are other features which give difficulty in connection with this tax. First, it is discrimination against a particular industry and, second, it is discrimination against particular sections of Canada.


Mr. BRADETTE:: Hear, hear.	_


Mr. MACKENZIE (Vancouver):: Hear,
hear.


Henry Herbert Stevens: We have it endorsed by two distinguished hon. gentlemen on the other side.


Joseph-Arthur Bradette: Just as distinguished as you are.


Henry Herbert Stevens: I said "two". I included my hon. friend in the two.
In the light of what has just been said and what was said by the chief critic of the opposition, let us see if there is any ground for the position taken by the hon. gentlemen. I have before me a list of dividends paid by the leading Canadian mines. I have not the particulars before me of the smaller mines, but I think these figures will be sufficient to show the trend and justify the action of any government in imposing a tax upon gold. I have definitely in mind the fact that the enhancement in the value of gold wTas not due in the slightest degree to any action of the industry, it was due entirely to - extraneous causes. The accretion in value has been somewhere in the neighbourhood of 70 per cent, an enormous increase. During the years 1929, 1930 and 1931 the Dome mine paid dividends totalling 8953,000 each year. The dividends


Abraham Albert Heaps: Can the minister give the amount paid by the government in subsidies to these gold mines?


Henry Herbert Stevens: What subsidies?


Abraham Albert Heaps: The differential between the export value of gold and its home value.


Henry Herbert Stevens: member one of the Conservative cartoons issued at that time-and this has reference to wheat which the Minister of Trade and Commerce was discussing this afternoon-showed a great Canadian wheatfield with Jack Canuck standing in the centre shouting to a picture of the leader of the Liberal party (Mr. Mackenzie King): What are you going to do with my wheat? Wheat was then selling at Si .08 a bushel and in the month of March of this year it was selling at forty-one cents a bushel. The people believed those promises in 1930 and they elected this government for which the Minister of Trade and Commerce is an apologist this afternoon.
The government kept two of its promises; one of those was to call a special session of parliament and the other was to increase the tariff. Parliament met in September, 1930, and the tariff was increased enormously against other countries. My hon. friend now talks about our trade falling off. I will Ehow him in a few minutes why it has fallen off. At the special session of 1930 the tariff was increased against every other country in the world. Then the Prime Minister went to the imperial conference at London and asked the British people to impose a tax of ten per cent on their food in order to give Canada a preference in their market. We all remember what the leaders of British thought said then about the matter; if they adopted that, they would be on a slippery slope leading to the bottomless pit. The Prime Minister came back to Canada and went to the city of Regina still talking about obtaining markets for Canadian produce. I can hear him yet over the radio when he came to discuss the matter of Cana-lian wheat; he said: My fellow Canadians who are now within sound of my voice, just at this very minute Mr. Marler, Canadian ambassador to Japan-and he would not be there if my right hon. friend had had his way in 1928-is on his wa}' to China to enter into a treaty with that great nation for the sale of your Canadian wheat. How much wheat did we sell to China? We heard some talk i few years ago by the government that they would not permit the sale of 100,000 head of Canadian cattle to Russia because Russia was an ungodly country. Still it was all right in 1930 for the Prime Minister of Canada to send Mr. Marler to China to enter into a treaty with that country. Within my recollection and that of the oldest man in the house, we have been sending missionaries from Canada to China to christianize them. How much wheat have we sold to China as a result of Mr. Marler's visit? We have sold none, but the Argentine republic, according to this pamphlet

which I have in my hand, published by the Department of Trade and Commerce under the authority of the Minister himself, in March of this year sold 2,756,000 bushels to China.
Let us proceed. Next came the second imperial conference and the British people were to impose a tax of six cents a bushel on wheat from nations outside the British commonwealth to give our wheat a preference in their market. What ever came out of that? Political effervescence number two! According to the same publication to which I have just referred, of April 23, 1934, issued under the authority of the Minister of Trade and Commerce of Canada these are the startling facts with regard to the imperial conference in connection with the sale of wheat in Great Britain. Great Britain's imports of wheat were as follows:
For ten months ending March, 1933
133.906.000	bushels
For ten months ending March, 1934
132.141.000	bushels
Or practically the same amount.
For ten months ending March, 1933
From	Bushels
Canada	 75,250,939
United States	 2,191.843
Argentina	 15.568,360
Australia	 26,165,040
Russia	 3.960,702
Other countries	 10,769,833
For ten months ending March, 1934 From	Bushels
Canada	 46,083,447
United States	 329
Argentina	 20,222,056
Australia	 28.430,005
Russia	 14.917.986
Other countries	 13,487,000
The facts are that so far as the imperial conference agreement was concerned, this country sold Great Britain 29,000,000 bushels of wheat less last year than it did the year before and the difference was taken largely from Australia, Argentina and Russia. No wonder the right hon'. leader of the government said when speaking in London in December, 1932, in connection with the imperial conference agreements that they should be considered rather in the light of the hope they offered for the future than in present accomplishments. I recall one of the Proverbs that says, "Hope deferred maketh the heart sick." The hearts of the Canadian producers of wheat are sick at the present time.
Next we had the world conference to settle the matter of wheat, with some fifty nations present. Notwithstanding the fact that the

The Budget-Mr. McPhee
Prime Minister of this country had given a bonus of five cents a bushel to the western Canada wheat growers two years previously, he now says we have too much wheat in the world, and the idea is to cut down the acreage. Well, two thousand years ago the greatest man that ever trod this earth, speaking in Judea said, as recorded in St. John's gospel: "I am come that they might have life, and that they might have it more abundantly." Now we have the spectacle of the Prime Minister of this country addressing the Young Canadians in Winnipeg and saying in effect, that is all wrong, what our blessed Lord and Saviour should have said was, I am come that they might have life and have it less abundantly. We now have before this house that monstrosity the marketing bill in connection with our agricultural produce, a cross between Russian soviet socialism as sponsored by the hon. member for Winnipeg North Centre (Mr. Woodsworth) and a Mussolini dictatorship as sponsored by the right hon. leader of this government. In 1929, $1,388,000,000 in value of exports from Canada, and in 1934, $480,000,000 tells the tale as far as this government is concerned.
That is one side of the picture. Let us look at the other. As I said before, this government kept two of its promises: calling parliament together and increasing the tariff. Right after they increased the tariff in 1930, one of the leading government newspapers of Belgium, in January, 1931, published an editorial, which I want to put on Hansard to make the record complete:
Just previous to his departure for the imperial conference in London, Mr. Bennett brought down in the Canadian house a bill dealing with the tariff. The tariff changes which were immediately put into force were adopted by the Canadian parliament. It is of some interest to Belgium whose exchanges with Canada have favourably developed in the course of these last years, to examine the situation and to bring out somewhat the point. . . .
We learn, moreover, that Belgium is, with the exception of Great Britain, its best European customer in the purchasing of wheat, oats and barley, and ranks second or third of all Canada's clients in the purchasing of these products; that it absorbs almost the total Canadian output of zinc ore and the greater portion of that of asbestos. . . .
Belgium can therefore not remain indifferent to Mr. Bennett's projected legislation of a distinctly protective character, and making for a complete revision of the Canadian customs tariff. It surely would be hardly conceivable that she should continue to be one of the best customers of a country which deliberately closes its doors to her products.
. . . Canada is not the only country which produces wheat, oats, barley, asbestos and zinc
ore. There is no reason why Belgium should not supply herself with these articles on markets which are more friendly to her productions.
That was the attitude of Belgium in January, 1931 following the increase of tariffs by. this government in the special session in September, 1930. And thirty-seven other nations followed the lead of Belgium in retaliatory measures against Canada. Let me put some of them on record. My hon. friend the Minister of Justice (Mr. Guthrie) speaking at Guelph a few nights ago, said that no country had increased its tariff against Canada since the present government came into office, with the exception of duties levied on three small items by the Hoover administration in the United States. Let me put the facts on record. The fact is that thirty-seven nations retaliated against this country, among them are Esthonia, Siam, Poland, Germany, New Zealand, Mexico, Czechoslovakia, the Bahamas, Italy, France, the Argentine, Cuba, St. Vincent, St. Lucia, Colombia, India, Norway, China, Bolivia, Denmark, Uruguay, Greece, Switzerland, Belgium, the United States, the Netherlands, Jugoslavia, South Africa, Sweden and the Irish Free State. Let us examine some of these and learn the correctness of the statement made by 4he Minister of Justice that no country had increased its tariff against Canada since this government came into office.
Siam increased its tariff on tinned meats, fish, vegetables and fruits from 5 per cent to 20 per cent in February, 1931.
Esthonia increased its tariff on wheat, on March 26, 1931.
Poland increased its tariff against Canada on wheat, rye, oats, barley, rye flour, wheat flour, and rolled oats in March, 1931.
Germany increased its tariff against Canada on oats, hogs, fresh and frozen meat, and preserved meats, on April 30, 1931.
New Zealand increased its tariff against Canada on gum boots; newsprint and other paper; wire, including barbed wire, from free to 22J per cent on June 2, 1931, and on all other commodities from the preferential tariff to the general tariff.
Mexico increased its tariff on timber; aluminium wire and cable, bars, rods and sheets; pipes and tubing; butter, cheese, wheat and flour on May 3, 1931.
Czechoslovakia increased its duties on hogs in May, 1931.
The Bahamas increased the tariff on beans and peas, from 9 cents a bushel to 36 cents

The Budget-Mr. McPhee
per hundredweight, and on some metal and mechanical goods, fresh meats and potatoes, on May 28, 1931.
Italy increased its duties against Canada on radios, and radio-electric and other materials, salmon and canned shellfish, three times in one year, on June 17, September 30, and October 3, 1931.
France increased its duties against Canada on canned salmon, hams, condensed milk, milk powder, cheese, rubber goods, boots and shoes, and belting, and all canned goods, four different times in the year 1931; on June 30, November 10, November 19, and December 10.
The Argentine increased its duties against Canadian wrapping paper; book, writing and wall paper; sewing machines; sardines; smoked herring in boxes and kegs; cheese; and gas cooking stoves on September 21, 1931.
Cuba increased its duties against Canadian knit goods and iron piping on September 21, 1931.
St. Vincent increased its duties against Canadian electrical apparatus on July 3, 1931.
St. Lucia increased its tariff against Canadian wheat flour on September 26, 1931.
Colombia increased its tariff from 4 to 8 ceqts per kilogram on wheat, and at varying rates on barley, oats, wheat flour, potatoes, canned vegetables, condensed milk, smoked and salted fish and rubber footwear on September 27, 1931.
India increased its duties against artificial silk piece goods, silk yarns and threads, and electric bulbs on September 30, 1931.
Norway placed timber on an import permit basis on July 17, 1931.
China increased duties against all Canadian products on December 1, 1931.
Bolivia restricted bills of exchange against all Canadian goods on October 9, 1931.
Denmark increased the duties on Canadian apples from 12 cents to 60 cents per hundredweight on October 19, 1931.
Uruguay increased her duties against Canadian products, including potatoes, on October 10, 1931, and again on October 22.
Greece increased her duties on November 28, 1931, on all commodities.
Switzerland increased the duty on building board on November 17, 1931.
Belgium increased her duties on cattle, meats, frozen or fresh, butter, etc., on November 27, and December 7, 1931.
The United States, Switzerland, Jugoslavia and South Africa all increased their tariffs against Canada, South Africa four times
[Mr. MrPhee.l
in the one year, on April 15, June 8, October 29 and December 13, 1931. That is the tariff warfare that has been going on between this and other countries of the world during the last four years. I understand that mj* hon. friend the Minister of Justice said there were only a few items on which there had been increases, but I have given the list which was compiled after a very careful and exhaustive study of the commercial intelligence journals covering 1930 and 1931.


Hugh Guthrie: I think my statement
still holds. I said the important trading countries of the world had all increased their tariffs before this government came into power and that, with the exception of the United States, none of the great countries had increased their tariffs against Canada since that time.


Mr. McPHEE:: Add the $22 to the $14.72 and you get $36.72. On that, as the custom return shows, the sales tax of 6 per cent was imposed, amounting to $2.20; also the excise tax of 3 per cent, amounting to $1.10. That made a total duty of $18.02 on an importation valued at $22, or a duty of 82 per cent on socks, one of the necessities of life to the Canadian farmer. It is all right, according to the government, to reduce the duties on electric dry shaving machines, dried blood and other items, but what about the goods that are a necessity to the farmer?
The Prime Minister, speaking in Lethbridge, said, "I am neither a high tariff man nor a low tariff man. I am one of those who will utilize the tariff as an instrument of government to save our country from destruction and maintain our position and integrity in the markets of the world." Well, Mr. Speaker, if this is saving us from destruction and maintaining our position and integrity in the markets, of the world, then all I can say is God help Canada.
The Budget-Mr. McPhee

While the Minister of Trade and Commerce was speaking I turned ever my file and found a letter that had been addressed to him from a merchant in my constituency, and if the minister or the government had taken any action on the matter brought up in that letter it would have helped the people of western Canada. I am sorry the minister is not now in his seat. This letter is written by a merchant in my home city, and is addressed to the Minister of Trade and Commerce. It reads:
As a member of the Merchants Consolidated Limited I ^ am advised by them that the Welland Vale Manufacturing Company have refused to sell them harvest tools for the reason _ that they have two large wholesale houses in Winnipeg distributing for them in the west.
The Merchants Consolidated have a large number of members throughout the west, and they handle hardware, groceries, boots and shoes and dry goods. If the Welland Vale Company refuse to sell them, where are they going to buy harvest tools? On account of tariffs this company find it difficult to bring in tools from other countries.
Some relief- could have been given to the farmers of western Canada if this letter from the Yorkton merchant had been acted upon. The subject he mentioned was deserving of more consideration than harps or dried blood and the other items I have mentioned.
What is the solution, Mr. Speaker? The solution is a reasonable adjustment between debtor and creditor in this country, a reasonable reduction in the rate of interest to the farmers of the country and a tearing down of the iniquitous tariff walls that have been built up around Canada in the last three or four years. Perhaps I cannot do better than to put on record the words of a man better able to express himself than I can? Mr. Owen D. Young, of the United States, the author of the Young plan, and one who took a prominent part in the last presidential election in the United States as a supporter of Mr. Roosevelt. Here is one paragraph from an address that he delivered a few days before the election:
With the currencies abroad broken, with our own economic machinery threatened and endangered, with debts both domestic and foreign in every land crushing their people, it is time that liberal parties came into power to save conservatives from their own destruction, and to save the rest of us who are victims too. Not until then will our surplus cotton move from the plantations of the south-not until then will our surplus grain and' wheat move from the farms of the north-not until then will our surplus manufactures move from the factories of the country-and not until then will our surplus of labour and of commodities w'hich now economically crush us, disappear. It is the restoration of trade alone which holds not only the economic but the social salvation of the world.
[Mr. McPhee.l
To that doctrine we on this side of the house subscribe, and if it were adopted and put into practice then my hon. friend the Minister of Finance could very well look forward with renewed hope and courage and go forward with a firmer step towards the goal of better and happier days, but that will not come to pass until government of the people by the people and for the people shall again have its full measure of fruition in the legislative enactments of a Liberal government in Canada.


Mr. F. T. SHAVER (Stormont):: Mr. Speaker, I desire to add my congratulations to those that have been extended to the Minister of Finance for the budget he has presented to the House of Commons and the country. I think the people of Canada are particularly fortunate during these trying years of depression in having at the head of the Finance department a gentleman of the character and long experience and exceptional ability of the Minister of Finance.
The hon. member who preceded me (Mr. McPhee) devoted the greater part of his speech to a criticism of the government because they had not', so he claimed, opened foreign channels of trade, and because certain markets had been closed against Canadian products. I think his speech was answered in its entiretj' before he made it by the speech delivered by the Minister of Trade and Commerce (Mr. Stevens), who showed very conclusively from the official records of Canadian trade that it was during the years hon. gentlemen opposite were in power that foreign markets were lost to a very great extent, and that so far as natural products from Canada were concerned many of the products of Canadian farms and forests were being exported to other countries in much larger quantities during the past year than when hon. gentlemen opposite were in power.
My hon. friend from Yorkton (Mr. McPhee) referred to a few countries that had raised their duties against Canadian products, but the great majority of the products he mentioned are not natural products at all. Fie said that Italy had increased her duties against radios and radio parts. But those are not produced on the farms in Canada. He said that Cuba had raised her duties against knit goods and iron piping, and that India had raised her duties against artificial knit goods, and so on. Nearly all the items he mentioned were manufactured articles, not natural products at all, on which duties had been imposed by other countries. He said that Norway had raised her duties against Cana-

The Budget-Mr. Shaver
dian timber, but the Minister of Trade and Commerce showed that last year the exports of timber from Canada had increased by a very large amount over 1930.
The Minister of Finance was able to paint a rather optimistic picture of Canada's position at the present time, and I think that it was entirely justified by the conditions that exist to-day. The fact that we had a total increase in trade last year of $132,000,000 over the preceding year; the fact that Canada leads the world in per capita export trade; the fact that we had an increase in manufacturing production and, in railway revenues, and a gradual upward trend in commodity prices, all help the people of Canada to realize that the dark clouds of depression are passing away and that brighter days are with us.
I shall not attempt to deal with the whole speech made by the hon. member for Shel-burne-Yarmouth (Mr. Ralston) as I believe it was answered very conclusively by the Minister of Trade and Commerce. However, there was one point he made in his speech to which I should like to refer. He moved an amendment couched in these words:
This house regrets that the proposals of the Minister of Finance give no indication of the intention of the government to abandon the policies of economic nationalism which have proved so disastrous to Canada's trade.
A little earlier in his speech, dealing with the reduction in the drawback which the government was introducing in the budget in connection with foreign coal used in Canada for certain purposes, he made this observation:
If it means that there is to be a further restriction with regard to competing American coal, then so far as I am concerned, coming as I do from Nova Scotia, I welcome it because if there is to be a policy of protection the natural product of Nova Scotia as well as of other provinces should be protected, particularly in view of the national interests which exist in connection with the preservation of the mines of that province.
The hon. gentleman believes in economic nationalism when it is applied to the coal industry in Nova Scotia but he is entirely opposed to it when it is applied to the textile industry in the county which I represent.
In his contribution to the budget debate, the hon. member for Medicine Hat (Mr. Gershaw) criticized severely the protection which had been given the textile industry and the implement industry in eastern Canada. But before he finished his speech he asked the government to give special consideration to the beet sugar industry which I assume is located in his own constituency or in his own part of the country. He asked that the
government should give freight protection and by implication asked for a subsidy to that industry, -because he quoted the subsidies which had been paid over a period of years by Great Britain. That hon. gentleman believes in a policy of economic nationalism as applied to the beet sugar industry in his own county, but he is entirely opposed to it when it is applied to the textile industry in my county.
The hon. member for New Westminster (Mr. Reid) has condemned time and again the existing tariff protection enjoyed by the industries of eastern Canada, but he has a resolution on the order paper protesting against the use of oriental labour in the shipping on the Pacific coast. He asks that this employment should be confined entirely to Canadian white citizens. The hon. gentleman is quite satisfied to have protection against oriental labour but he is willing that we should permit goods to come in from oriental countries manufactured under living conditions which Canadian people should not be expected to adopt and which we would not want them to endure. He is quite willing to allow such goods to come into Canada to compete with the products of the textile and other industries in the county which I represent. And this attitude is to be found among Liberal members from one end of the country to the other. When hon. gentlemen of the Liberal opposition talk about economic nationalism they always apply it to an industry which exists in some other part of the country, but they are quite satisfied that industries in their own sections should receive protection, either by way of freight rates, subsidies or tariffs. They cannot be accused of believing in a policy of economic nationalism, but they give a very clear demonstration that they are devoted to a policy of economic sectionalism.
During the years it has been in office this government has rendered outstanding service to the Canadian people, but to no section of the people have they given better service than to the farmers. No government since confederation has rendered a more- extended service to the agricultural interests of our country than has the present government during the years it has been in office. The protection which has been given to agricultural products; the empire agreements, which were strenuously opposed by hon. gentlemen opposite, and the marketing bill, one of the most forward looking and progressive pieces of legislation ever introduced into the parliament of Canada, have all been opposed by hon. gentlemen opposite. The best evidence that the empire agreements have been of
The Budget-Mr. Shaver

benefit to Canada is the fact that our exports to Great Britain last year increased twenty per cent over the preceding year, while we had much larger exports to other parts of the empire. In my opinion if the marketing act is to be a success it is absolutely necessary that the government administering the act must be one which believes in and practices the principle of protection. If we do not have a protected market; if our market is liable to invasion by agricultural products from foreign countries being dumped into Canada, the work of the marketing board will be rendered very difficult indeed.
There are two particular products produced in large quantities in the part of the country which I represent, and, as I have pointed out, the tariff on these two commodities has put millions of dollars into the pockets of Canadian farmers. I refer to butter and eggs. Hon. gentlemen know that during the years the Liberal party was in power our markets were flooded continually with butter from New Zealand. There was always a spread running from 6 to 10 cents per pound between the Montreal and New York prices, the New York prices being the higher. At that time our prices kept down quite closely to the London prices. In 1933 when butter was receiving the protection to which it was entitled, the average price in New York was 23-7 per pound; in Montreal, 21 cents a pound and in London, 16-8 per pound. Without protection I have no doubt that the Montreal price would have approximated very closely the London price, making a difference of at least 5 cents per pound in what the Canadian farmer would have received. We all know that during the winter months the price has been much higher in Montreal than it was in New York, and from 11 to 13 cents per pound higher than it was in London. In January the price in Montreal was 25-2 cents per pound, in London, 14-4 cents per pound, and New York, 20 cents per pound. In February the price in Montreal was 27-8 cents; in London, 15 cents and in New York 25-8 cents. In March the price in Montreal was 29-5 cents, in London, 16-2 cents and in New York, 26-5 cents. The only hon. member who has attempted to explain away these facts is the hon. member for Prescott (Mr. Bertrand). During an address which he gave recently in the house he stated that the farmer of eastern Canada was not assisted because he produced very little butter during the winter. I wonder if the hon. gentleman took pains to find out how much butter was actually produced? I did, and I found that in December, January, February and March the farmers of Canada produced 33,000,000 pounds of

butter. Because of the tariff, the value of this butter was enhanced by at least 5 cents per pound, so that 81,650,000 was put into the pockets of the farmers of Canada.
The same is true with eggs. We all know that during the regime of hon. gentlemen opposite our market w'as flooded continually during the winter months with eggs from the United States. There was always a slump in prices during the winter months and the farmer never expected to get a reasonable price for his eggs during a period when it cost him the most to produce them. Because of a reasonable measure of protection and the initiative and energy of the Minister of Agriculture (Mr. Weir), who was instrumental last fall in having 2,000,000 dozen storage eggs shipped out of Canada to the British markets, thus taking them out of competition with fresh eggs during the winter months, we find that during the past winter the farmer has received exceptionally good prices for his eggs. When hon. gentlemen opposite were in power eggs were always imported into Canada by way of Chicago. On February 28 the top price in Chicago was 20 cents per dozen while the price in Montreal was 45 cents per dozen. On March 21 the top price in Chicago was 17 cents per dozen, while the price in Montreal was 25 cents.
The production of hogs is a large industry in eastern Ontario, the part of the province in which I live. The empire agreements, which were opposed in their entirety by hon. gentlemen opposite, have been of tremendous value in giving to the hog producers of Canada a larger share of the British market as well as better prices. We have only to compare the price in Chicago with the price in Montreal to see how the Canadian price has improved. On February 28 the price in Chicago for choice hogs was $4.80 per hundredweight, whereas in Montreal it was $10. On March 21 the price in Chicago was $4.40 and in Montreal $8.75. On April 28, just a few days ago, the top price in Chicago was $3.90 and in Montreal $9.10.
The only gentleman on the opposite side who attempted to explain away the facts was the hon. member for Willow Bunch (Mr. Donnelly), who not long ago, admitting that hogs had doubled in price in Canada as compared with the United States, brought forward this fantastic argument, that the United States did not produce bacon hogs but produced a short, thick, fat animal used chiefly in the production of lard. May I direct the attention of hon. gentlemen opposite to the fact that back in 1930, the last year they were in power, the United States, the country
which the hon. member for Willow Bunch [DOT]

The Budget-Mr. Shaver
tells us does not produce a bacon type hog, exported to the United Kingdom 145,472,302 pounds of bacon and hams while Canada exported in that year to the United Kingdom 13,011,400 pounds. The agreements with the United Kingdom came into effect in the fall of 1932, and if you compare the figures for 1930, of Canada's exports to the United Kingdom, with the figures for 1933, you will find that they had risen to 71,524,700, or five and one-half times what they were in 1930; whereas the exports of the United States to the United Kingdom had dropped to 73.355,663, or about half what they were in 1930.
That shows clearly the value of an assured market so far as that product is concerned, and it disposes effectually of the fantastic argument of my hon. friend, that the country to the south of us, with millions of farmers, does not produce bacon hogs.
With one product which the farms of eastern Canada produce, the marketing board, as so ably pointed out in his excellent speech the other evening by the hon. member for Queens (Mr. Myers), will be able to do a great deal, and that is cheese. We are constantly on an export market with regard to cheese, because in 1933 we consumed only 27-6 of the cheese produced in Canada and exported 72-4 per cent. There has been a continually low price for cheese and it has been a difficult problem with many farmers in my own county. The fact is that we have been on an export market and I believe that the marketing board, by assisting in curing, storing and in giving a regulated supply to the British market, will have a considerable effect in helping the farmers in this very important industry.
I have reviewed very briefly a few of the agricultural items in which the farmers in my own county are interested. We admit that the prices of farm products have been low. But the prices of basic commodities throughout the world have been low, and Canada has shared in those low prices. It can be said without fear of contradiction however that the policy which this government has so far put into effect has been of great value in keeping prices at a better level as regards the commodities which I have mentioned than they would have been had not this policy been put into force. And while, as I sincerely believe, the farmers of my own county have benefited by the policy of the government, I am glad to be able to say that the Cornwall industries also have been assisted in that county by that policy.
In this connection I would read a paragraph or two from an editorial that appeared in the Cornwall Standard-Freeholder of Wednesday, February 14, 1934. It is headed "Cornwall is in the Limelight" and reads:
Believe it or not, the name of Cornwall is a magic word throughout Ontario to-day. Because of its rapid recovery from the effects of depression, Cornwall is occupying an enviable position among cities and towns of the province.
Wherever one goes, the comment is always the same-"You are from Cornwall ? Things are booming down your way, aren't they?"
It gives one a feeling of justifiable pride to hear admiring and sometimes envious remarks about Cornwall. We know that our industries are working at capacity, that employment today is actually greater than it was in the boom year of 1928, that relief is no longer necessary, that new factories are locating here, that Cornwall is experiencing a period of unparal-leded expansion while other cities and towns are just beginning to shake off the fetters of business stagnation.
There are various reasons for the prosperity of this large industrial town. One reason is that we have not all our industrial eggs in one basket. We have diversified industries and a splendid class of working people, both French and English, who for intelligence, industry and devotion to duty are unsurpassed by the working people of any section of Canada or on the North American continent. We have three railways and boat service located on the St. Lawrence, electric power at reasonable rates, and our street railway furnishes a switching service which is very efficient and helpful to various industries. We have also an efficient and active board of trade and city council. But notwithstanding all these factors, the most important, and the one that has contributed more than anything else to the success of industry in Cornwall, is the assistance which has been given by the tariff policy of the present government.
I have referred in this house on previous occasions to the additions that have been made to Courtauld's plant since this government came into power. This firm is a large manufacturer of rayon, and when this government came into power, in the short session of 1930, one of their first acts was to give this and various other industries in Canada the protection to which they were entitled, in order that they might maintain a large number of working people and pay them reasonable wages. This industry in 1930 was employing about 1,000 people. Immediately after the tariff policy of this government came into effect they began the construction of an addition to their plant and it
The Budget-Mr. Shaver

was finished during the following year at a cost of some $3,000,000. Owing to the increased business last fall and winter they have been building another plant which is now completed at a cost of about $2,500,000. Whereas in 1930, when hon. gentlemen opposite were in power, they were employing 1,000 people, they are now employing about 1,500, and with the new addition to the plant they will be employing in a few weeks' time about 2,000. In other words, there will have been an increase in employment in that one industry alone in four years of one hundred per cent.
We have another new industry, the Powdrell and Alexander concern, which is a branch of a large American firm manufacturing materials used in the making of window shades. They are employing 200 people working full time. That industry came to Cornwall because of exceptional advantages the town offered, but it first had to decide to come into Canada, and it did so because of the tariff policy of the present government. Then there are three cotton mills which found it necessary two months ago to put on a night shift in one of the mills and to take on 130 additional people. In conversation with representatives of the clothing industry, I have been informed that this business has been better in the past few months than for some time previously. The manufacturers of metal beds, of which there is an industry in Cornwall, have also benefited by the policy of the government. We have two paper mills which manufacture fine book paper used in the publication of magazines. It will be recalled that hon. gentlemen opposite when they were in power put into effect tariff item No. 1060,
Material-
Sand	
Stone	
Cement	
Brick	
Haydite blocks.. Reinforcing steel Structural steel.. Roof slabs	
which permitted magazine publishers in Canada to import book paper of this type, giving them a rebate of eighty per cent. The result was that some of our Canadian magazines were using paper manufactured in the United States, so that in 1930, the last year hon. gentlemen opposite were in power, we imported 6,346,282 pounds of that type of book paper for magazines from the United States. In 1932, because that tariff item was struck out by the present government when they came into power and the duty went up immediately to the old figure of 25 per cent, we imported only 50,352 pounds. These magazine companies are now buying large quantities of paper from the mills in my constituency. In addition to that, three years ago this government put into effect a duty on United States magazines forcing the publishers of many of them to establish Canadian editions and to print them in Canada. They have largely been using Canadian paper. One company which publishes a group of magazines and which started to use Canadian paper just a few months ago is now using Canadian book paper at the rate of 2,000 tons yearly, which would take the output for sixty-seven days of the largest paper machine used in Canada.
I wish to draw to the attention of the house how plant extension of a successful industry helps others. I mentioned the large addition which Courtaulds made to their plant in Cornwall in 1933 and 1934 and which cost in the neighbourhood of $2,500,000. For the construction of that plant they used 893 carloads of materials coming from widely separated points in Canada. Let me cite a few of them:
Number
Point of origin	of cars
St. Emelie, P.Q	 242
Joliette, P.Q	 204
Montreal	 77
Laprairie, P.Q	 33
Outremont, P.Q	 28
Sault Ste. Marie	 10
Lachine	 68
Cooksville, Ont	 20
And so on with a number of similar items, the whole totalling 893 carloads. In addition to that they used in the neighbourhood of 200 carloads of machinery, and every possible article they could purchase in Canada was bought in this country. For instance, one item alone, three carloads of equipment coming from Galt, was valued at about $115,000. Another item of three carloads of electrical

equipment coming from Toronto was valued at $180,000. This merely goes to show the advantage to the country of having successful industries; it is not only the people they employ in their own industry but the fact that they give employment to thousands of people in secondary industries in all parts of the country. All these people employed in the secondary industries are consumers of

The Budget-Mr. Shaver
Canadian farm products. The Minister of Trade and Commerce has pointed out that the most important market for our farm products is our home market. It is of course absolutely necessary that we build up our export trade because we have always a surplus to export to the markets of the world, but our primary market is right here in Canada. I am informed that of our gross agricultural production we consume eighty-Sve per cent and export fifteen per cent. If we leave out those two great commodities of wheat and cheese, the greater proportion of our production of which we export, we consume in the dominion ninety-six per cent rnd export four per cent of all other farm products.
During the years this government has been in office, and since it gave to the industries of Canada the protection to which they were entitled, no other industry has been attacked to the same extent as has the textile industry. Hon. gentlemen opposite have used up hundreds of pages of Hansard in attacking that industry; they have poured the vials of their wrath to a very great extent upon the textile manufacturer. They have tried to point out that he was bleeding the people of western Canada, forgetting all the time that
textile manufacturers employ thousands of people who are Canadian citizens just as much as any other producer in Canada and who have a right to a decent day's work and to receive a decent day's pay. The policy of the present government has, since it has been put into effect, assisted very materially the textile industry in the county which I represent. That industry is one of the oldest in Canada. First there was wool, then the manufacture of cotton, later on the manufacture of silk and during the last few years the synthetic product, rayon. The first cotton mill was established at Sherbrooke, Quebec, in 1844; the second at Thorold, Ontario, in 1847. In 1885, nearly half a century ago, there were 107 completely equipped woollen mills and twenty-two completely equipped cotton mills in Canada, operating 10,900 looms and 531,360 spindles. That has grown until in the calendar year 1932, in the industries in the textile group there are 2,002 establishments with capital invested of $321,593,062, with 102,116 employees receiving in salaries and wages $82,817,944 and a total value of production of $274,411,736. If I might be permitted I would like to put on Hansard this chart giving in detail the different types of Canadian textile industries:
Calendar year 1932	No. of establishments	Capital invested	No. of employees	Salaries and wages	Total value of production$	$	$Cotton textiles	95	79,785,322	16,818	13,161,177	45,351,012Woollen textiles	130	42,539,722	8,586	7,121,340	23,301,015Silk, rayon and products	24	28,012,412	7,036	5,756,865	19,864,843Dyeing and finishing	19	4,688,350	762	804,100	2,537,348Knitted goods	177	53,159,883	17,828	13,588,157	43,613,331Garment trades	1,037	59,336,058	36,196	29,418,130	102,234,830Miscellaneous textiles	111	29,169,201	3,720	3,947,734	19,606,578Dyeing, cleaning and laundry	409	24,893,114	11,170	9,020,441	17,302,779Total	2,002	321,593,062	102,116	82,817,944	274,411,736
The hon. member for Regina (Mr. Turnbull) in a speech which he delivered not long ago, disposed very effectively of the argument submitted by hon. gentlemen opposite, and particularly that of the hon. member for West Edmonton (Mr. Stewart), who pointed out the excess of protection which he claimed the textile industry was receiving. I had had those figures worked out from an independent source just a few weeks prior to the speech delivered by the hon. member for Regina, but I merely wish to quote these on two particular kinds of cotton fabrics manufactured in my constituency. In regard to cotton print piece goods the hon. member for West Edmonton gave the actual duty collected as
being 58.5 per cent. The correct figure is 26.35 per cent. For white flannelette he gave 52 per cent as being the actual duty collected. The correct figure is 25.9 per cent. One could draw from every speech made on the budget by members of the official opposition and many others made by them the inference that the effect of the tariff policy of this government has been so to curtail importations from Great Britain that the British people in return are not buying so much of our Canadian farm products. That does not apply to the textile industry, as I shall be able to prove with the figures which I have under my hand and which I would like to place on Hansard. This
The Budget-Mr. Shaver

is a statement of the exports of cotton piece goods and cotton yarn from the United Kingdom to Canada for the years ending 31st December, 1931, 1932 and 1933, showing conclusively that the empire agreements had materially assisted the textile manufacturers of Great Britain, because if we compare 1933
with either 1932 or 1931 the exportation of cotton piece goods from Great Britain to Canada increased by 68 per cent and there was a corresponding increase in the exportation of cotton yarn from Great Britain to Canada. With the permission of the house I should like to place this table on Hansard.
Exports of Cotton Piece Goods and Cotton Yarn from the United Kingdom to Canada
for years ending 31st December*
1931	1932	1933	1931	1932	1933Sq. yds.	Sq. yds.	Sq. yds.	Pounds Sterling	Pounds Sterling	Pounds SterlingGrey cotton piece poods	5,634,000	2,472,100	14,764,100	59,034	34,638	126,643Bleached cotton piece goods...	6,140,400	6,944,600	11,608,000	164,507	170,211	194,019Printed cotton piece goods	7,507,600	7,859,400	7,435,000	209,588	199,514	184,997Cotton piece goods dyed in piece	6,923,900	8,554,200	10,897,600	258,615	275,769	325,786Coloured cottons (wholly or part of dyed yarn)	1,575,200	1,407,500	1,999,400	52,426	42,314	60,043Total of all kinds cotton piece goods	27,781,100	27,237,800	68% increase 46,704,100	744,170	722,446	891,488Lbs.	Lbs.	Lbs.	Pounds Sterling	Pounds Sterling	Pounds SterlingCotton yarn	1,573,500	2,048,500	3,034,700	186,025	227,238	330,704
* As supplied by the Board of Trade to the Manchester Chamber of Commerce.
I note in the budget which has been brought down there is a reduction of one and one-half per cent in the excise tax on British imports; which is am additional sacrifice that will have to be made by Canadian manufacturers. I am firmly in favour of the Canadian textile manufacturer and every other manufacturer getting the protection to which they are entitled, and I speak more particularly on behalf not only of the manufacturer himself, although he deserves credit, but also of the thousands of men and women who are employed in these industries and for whom the policy of the present government has done so much to enable them to obtain regular employment and decent wages.
The official opposition have continuously attacked the manufacturing industries of Canada. I wish to draw their attention to the fact that according to the census returns there were in 1931, of those ten years of age and over gainfully employed in the manufacturing industries of Canada, 442,759 men and women. Yet bon. gentlemen opposite continue to maintain that these industries are receiving too much protection, that in fact they are not

entitled to so much consideration. There was a time when voices were raised from the liberal benches on behalf of the manufacturing industries of Canada. I can recall years ago when there were men from both Ontario and Quebec who did not sit so quietly and listen to their colleagues attack the manufacturing industries; knowing as they did their importance in the economic life of Canada they were always ready to rise to their defence. Sir Lomer Gouin, one of Canada's great men from Quebec in the years gone by, more than once defended the industries of Canada. Prior to my time in the house I remember reading speeches of the hon. member for North Waterloo (Mr. Euler), who comes from an industrial section of Ontario, and who was ready to rise in defence of the industries of Ontario and Quebec. But those voices are silent now; there is no one in the Liberal opposition to defend these industries which are so important in our industrial life. I want to ask hon. gentlemen opposite a question. Their leader has told us-I have quoted this before, you will find it on pages 263-4 of Hansard for the fall session of 1932-that if he were returned

The Budget-Mr. MacMillan (Mackenzie)
to power one of his first acts would be to restore the Liberal tariff as it was when they went out of office and increase the British preference to an average of fifty per cent of the general tariff. What would happen to the industries of eastern Canada if that policy were put into effect? I know what would happen in my constituency; at least 1,500 people would be thrown out of work inside of six months or a year. I want to ask hon. gentlemen opposite what they propose to do for these men and women that they would throw out of employment. Are they going to take them out to the wheat fields of western Canada to grow more wheat to add to our already large surplus?
The policy of the party now in power, the policy of this government, is a truly national policy which aims to help all sections of Canada, and I believe in that policy. I believe that Nova Scotia coal and fish from the maritime province should be used by the Canadian people to the largest possible extent. I believe we should use all the beet sugar we possibly can to give aid to the beet sugar industry. I have bought and sold many thousands of pounds of beet sugar in my time, and I was glad to do it because I looked upon it as a one hundred per cent Canadian product. I believe we should give a preference to white sailors in British Columbia rather than to foreigners. But I also believe that the industries in my part of the country should receive the same consideration from hon. gentlemen from other parts of the country that I am willing to accord to theirs.
I think it can be safely said that Canada is coming through this depression as well as if not better than any other country. I attribute that to three reasons. The first is the character of the Canadian people. Coming from the great parent races, British and French, reinforced by the very best which the nations of Europe had to offer, our fathers were a pioneer stock and they have transmitted to the Canadians of to-day those pioneer characteristics of courage, determination and energy and the will to overcome difficulties which I believe have been great factors in helping our people through these trying times. The second reason is the abundant natural resources which we possess, greater I think than those entrusted to any other nation of ten million people in the world. The third reason, and just as important as the other two, is the fact that we have been singularly fortunate in having at the head of affairs in Canada during these difficult years a statesman who is the epitome of all the best characteristics which the Canadian people
possess, that in the Prime Minister of Canada we have one who demonstrates in his life these characteristics of determination, the will to succeed, the ability to overcome difficulties, the greatest heritage that our pioneer forefathers have handed down to us. I believe also we are fortunate in that in his cabinet he has surrounded himself with a group of men of the same type, men who during these trying years have been devoted to the interests of the Canadian people. An article by Isaac F. Marcosson published in a January issue of the Saturday Evening Post, entitled "North of the N.R.A.," has often been quoted before, but I would like to direct the attention of the house to it, because it is an article that every Canadian should read. The writer is a disinterested and trained observer who has spent many years in travelling and studying the conditions in various countries and has fitted himself to form a clear and accurate judgment of those conditions and the reasons why they exist. In that article he gives a very high place to Canada among the nations of the world for the way in which she has survived the difficulties by which she has been beset, and he gives the reasons I have enumerated, namely, the character of the Canadian people, our abundant natural resources, and the fact that we have been fortunate in having at the head of affairs a statesman and government who have devoted their very great abilities to the best interests of our country.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. J. A. MacMILLAN (Mackenzie):: Mr. Speaker, at the very outset I desire to extend my felicitations to the Minister of Finance (Mr. Rhodes) on the very pleasant manner in which he delivered his budget speech. He spoke for about an hour and forty minutes and during that whole time he wore a smile. I think there is only one explanation for the fact that he smiled while delivering a budget speech of the kind that he did deliver; it must be a perpetual smile. I am truly sorry that I cannot compliment the minister on the contents of that speech. A few days ago the hon. member for Yale (Mr. Stirling) taunted the hon. member for Hants-Kings (Mr. Usley) with seeing things; he said the hon. member saw boards and boards and more boards. Well, I must confess that during the last four years I have been seeing things also; I have been seeing deficits and deficits and more deficits, and about ten days ago I saw
2666	COMMONS
The Budget-Mr. MacMillan (Mackenzie)
another one. The shortfall between revenue and expenditure is becoming a fixture in this country, and it is very hard to say how long this condition will last with the tornado of indignation that is sweeping the country today.
It is not my intention to-night to deal with figures. The Liberal financial critic (Mr. Ralston), speaking for two hours and twenty minutes, gave all the figures that were necessary, in my opinion, in order to criticize the budget successfully. Other speakers on this side of the house who have followed have placed the government on the grill with regard to its record and policies, and I have no desire to add to the misery and discomfort of the government at this time.
I should like to congratulate the hon. member for Stormont (Mr. Shaver) on the fluency of speech which he displayed in his defence of the government this afternoon. The hon. gentleman tried to leave the impression with the house that the Liberal party entertained a certain antipathy towards the manufacturers of Canada, but such is not the case. The Liberal party is the friend of the manufacturers just as much as any other party is, but the Liberal party is not going to assist the manufacturers of Canada to the prejudice of the consumers. As a matter of fact the manufacturers were paying dividends until the Liberal party went out of office. I would also suggest to the hon. member for Stormont, who spent about half his time in eulogizing the government, that it would be a good idea to leave it to the electors to judge whether it should be a eulogy or a dirge. I have made what I think is a pretty safe guess in that respect, but I am not going to divulge that guess to the house to-night.
I do not desire, Mr. Speaker, to deal with conditions existing throughout Canada as a whole. There are hon. members in this house representing various parts of the dominion who are well able to speak for the parts they represent. I come from the province of Saskatchewan, and I am going to confine my remarks to the conditions which exist in that province. There are conditions existing in the province of Saskatchewan to-day for which no government, no party and no individual is responsible. For five successive years in parts of that province we have had drought, and last year the drought was aggravated by a plague of grasshoppers. I am not going to be so unfair as to blame any party, any government or any individual for those conditions, but that is the situation. In some respect the government are trying to do their utmost to assist those people who are in distress through no fault of their own, but

before I conclude I think I will be able to point out to the house that a great deal more could have been done by the government to assist the people of western Canada.
About the time the Liberal party went out of office in 1930 the farmers were getting good returns for their natural products. This afternoon the hon. member for Yorkton (Mr. McPhee) said that at the time this government assumed office the farmers were getting $1.08 for their wheat while the prices of other grains were in proportion. Before the present government were two years in office, however, the prices of natural products had dropped by more than fifty per cent in comparison with the prices of 1930, and that condition has continued for so long that the farmers of western Canada-and when I speak of Saskatchewan I am speaking of the three prairie provinces- are to-day on the verge of despair.
I am not going to be so vain as to say that the government are responsible for the low prices now existing, but with prices as low as they have been for the last three or four years it is necessary for the government to come to the rescue of those people to a certain extent. The debt of the farmers and the people of the west has increased by leaps and bounds during the last four years, through no fault of their own, and they are not in a position to reduce that debt or, for the last three or four years, to pay interest on it. A short time ago the hon. member for Weta-skiwin (Mr. Irvine) delivered a very able speech in this house, on the motion to go into supply, with reference to the debts of the Dominion of Canada. The Prime Minister (Mr. Bennett) replied very ably, but he laid a great deal of emphasis upon the sanctity of contracts. I am going to make the statement that the debts of this dominion, both public and private, never will be paid one hundred per cent. I do not wish to leave the impression with this house that it is with any satisfaction or delight that I make that statement. I belong to a profession that never opens its mouth except when truth is assailed or justice is to be vindicated. I have been practising that profession for eighteen years, and I know what the sancity of a contract means to me and to all persons rvithin the British Empire. When I say these debts never will be paid I do not mean that it will be the fault of the debtor, and of course it will not be the fault of the creditor either. These debts have accumulated through no fault of the people who owe the money. Because of the conditions that have existed for the last three or four years the debtor finds himself in such a position that even if prosperity returned to-morrow it would take

The Budget-Mr. MacMillan (Mackenzie)
him eight or ten years to get back to the position in which he was before the depression visited the country.
To give some idea of the extent to which the depression has made itself felt among the people of the province of Saskatchewan, Mr. Speaker, I am going to read an article that appeared in the Saskatoon Daily Star of December 2, 1933, just four or five months ago. One of the professors of the university of Saskatchewan, Professor E. C. Hope of the department of farm management, made a careful survey of conditions existing in that province in an attempt to arrive at some figure as to the extent to which the farmers of Saskatchewan have gone back during the last four years. After a very careful survey he says:
To restore to the condition of 1929 the buildings, farm machinery, household equipment and clothing of the dwellers on the 136.000 farms in Saskatchewan would take a sum of at least $140,000,000.
His estimate is made up in this way:
The farm buildings of Saskatchewan were worth $236,000,000. Professor Hope puts the wear and tear not replaced at $50,000,000.
During the last four years the farmers of Saskatchewan have not been able to keep their buildings in proper repair. The whole setback amounts to 8140,000,000, and Professor Hope points out that it would cost that sum to put the buildings in the state they were in in 1929. Before the depression the district had farm machinery and equipment running from two to three thousand dollars per farm. This is now four years older and has not been replaced, and repairs have been cut down to a minimum. It is estimated that it would cost $40,000,000 to put this equipment back into shape. It is also estimated that the internal fittings of the home have deteriorated to the extent of $20,000,000, and wardrobes to the extent of $30,000,000. So in the items I have mentioned the people of the province of Saskatchewan since 1929 have gone back to the extent of $140,000,000. As I have already said, that is not the fault of the people, and it is not the fault of the government or of any individual, but this government could do something on behalf of the people. I am not going to say that they could do it by their fiscal policy. If they changed that fiscal policy it would oe of immense assistance, but that alone would not be sufficient.
What is the remedy? We talk about the cancellation or repudiation of debts. The word "repudiation" has not as much (terror for me to-day as it had two or three years ago, 74726-169
when we take into consideration the fact that the nations of the world are now repudiating their debts. We used to glory in the fact that England until a few years ago was doing her utmost to pay her war debt to the United States, but strange to say, when the British budget was brought down only a few days ago showing a surplus of some $165,000,000, it contained no provision whatsoever for meeting the war debt payments to (the United States. I have this suggestion to make to the government. I understand that there is some question whether this government has the power to pass legislation with regard to a compromise between debtors and creditors, that that is considered by some to be the prerogative or under the power of the provincial government. But something definite should be done about this question of debt before parliament prorogues. Even when we had prosperity the creditor found it necessary at times to compromise with his debtor, and it is often in the interests of both creditor and debtor to effect a compromise. That is not repudiation at all. I contend that the government should do something, even if by compulsory legislation, to bring debtor and creditor together. It is in the interests not only of the debtor but of the creditor also, because to-day the creditor does not know where he stands; he cannot tell how much of his debt he is going to be able to collect, and it would be much better for him if he did know definitely because then he would be able to adjust himself accordingly.
What is the remedy? This is not an original suggestion, because I noticed that the hon. member for Wetaskiwin (Mr. Irvine) made the same suggestion a few days ago. I would say that on the debts of the people of this country, especially of western Canada, the interest should be remitted for the last few years since the depression and until prosperity is restored. If that is going too far, I would say cut the rate of interest down to at least 3i per cent. I know the farmers. I am farming on a fairly large scale myself, and I know that there is not a class of people in this country who are more desirous of paying their ddbts and meeting their obligations one hundred per cent than the farmers. Naturally the fanner is an honest man, because he toils fifteen, sixteen and sometimes twenty hours a day. In the long days of summer he is on the land with the first rays of the rising sun. He is there at noon, and long after the sun has gone to rest the farmer is still toiling around his farm. He is anxious to meet his obligations to the very best of his ability, but


Mr. DUFF:: I am.


John Angus MacMillan: The hon. member for Antigonish-Guysborough (Mr. Duff) is a different type of Scotchman to what I am. I am not whining about that at all, as I feel I should do my share to meet the obligations of this country; but, to use the vernacular, I object to being made the goat. That is all I am going to say about the debt question.
I should like to refer to the policies of the different political parties which are appealing to the country for support. Is there a political party in this country to-day which is in a position to bring about an improvement in conditions? I am not going to ask if it is the Conservative party. That party has been in office for four years and their record is exposed to the gaze of the people. The intelligent electors of this country are not going to look to the Conservative party to lead them out of the chaotic conditions in which they find themselves to-day. There are two parties left, the Liberal party and the Cooperative Commonwealth Federation. Possibly I should not discuss the policies of the Cooperative Commonwealth Federation in view of the fact that October 23 last saw the destruction not only of the party but of its policies. But they are still causing mischief in the country. Perhaps the explanation for this is that they are alive to the extent that a person is who has been condemned to die. When the sentence of death is being passed upon a man he is allowed so many days before he ascends the scaffold, in order that he may have an opportunity to prepare to meet his doom. The sentence of death was passed upon the Cooperative Commonwealth Federation on October 23, 1933, and it will be carried into effect as soon as the bugle sounds the call of duty at the polls.


Mr. MITCHELL:: The hon. member has the prisoners mixed up.


John Angus MacMillan: 
An hon. MEMBER:: How old is that?


John Angus MacMillan: It is not very old, not as old as the Minister of Railways. This policy came into existence on February 27, 1933.


Mr. TURNBULL:: You have had a summer school since then.


John Angus MacMillan: That is true; I am glad that my hon. friend from Regina is keeping abreast with the times, because we may find him on this side before the session is ended if he continues to add to his intelligence. He had better attend the Spring school and I will be his teacher for a few days. I contend, Mr. Speaker, that the policy of the Liberal party will lead us into the promised land.


Some hon. MEMBERS:: Oh, oh.


John Angus MacMillan: I am glad that hon. gentlemen laugh; it is seldom that they laugh when they are talking about their own record. However, I do not object to their interrupting me; it is an indication that they are waking up. How will the policy of the Liberal party lead us into the promised land? The answer is, through the reduction of tariffs and the liberation of trade. An imperial conference was held in Ottawa in July, 1932, and the Right Hon. Stanley Baldwin, the chief delegate from Great Britain, made this statement at the opening of the conference:
I may be allowed to remind you that the countries of the commonwealth depend upon world prosperity both directly, when they are selling commodities for which a world market is indispensable to them; and also indirectly, when they sell to the United Kingdom because the purchasing power of the United Kingdom depends upon her ability to sell in a world market, and that in turn depends upon the ability of the world to buy. . . .
Let us, therefore, aim at the lowering rather than the raising of barriers, even if we cannot fully achieve our purpose now, and let us remember that any action we take here is bound to have its reactions elsewhere.
What Mr. Baldwin aimed at did not come to pass, and I will tell you why. We have in this country a Prime Minister whose transcendent ability, superb courage and dynamic energy, coupled with a seductive and devast-
ating personality, dominated that conference. It is all to his credit ; there is no doubt about it that he was the leading figure at that conference.


Some hon. MEMBERS:: Hear, hear.


John Angus MacMillan: I do not want any cheers from either side when I say what I think I should say. What Mr. Stanley Baldwin wanted, I repeat, did not come to pass. Now I am not an economist but I have confidence in the opinions of those who have held positions of responsibility and trust. Mr. Baldwin was Prime Minister of Great Britain once through the death of Mr. Bonar Law, who was Prime Minister, and subsequently he became Prime Minister by the will of the people. I suggest therefore that when a man holding a position of that kind, a man in whom the people of England have such implicit confidence as to make him Prime Minister, makes statements, they should be given every serious consideration. I submit that if we had reductions in the tariff it would assist us materially in bringing back prosperity to this great country.
What are the conditions to-day? There is despair in many places; penury and want have placed their ineffaceable seal on the door of thousands of homes in this great and rich land of ours. The poison of despair is already in the blood and is spreading. I know of a father and mother in Saskatchewan who entered into a covenant with death to destroy their only child and then themselves because life had become intolerable to them; they could not find the subsistence of living. These conditions exist. I wish I had it in my power to convince the Prime Minister that it is high time for him to leave his sinful life at Damascus and start for his glorification at Rome. If he cannot see his way clear to abolish high tariff entirely, then in the interest of the country which he loves so much, a country which has been so abundantly kind to him, surely he can quarantine it for a generation at least. The inevitable result would be a greater and more prosperous Canada; satisfaction and contentment would take the place of despair and want; and in the full plethora of her exuberant wealth Canada would take her place among the foremost countries of the world.


Mr. G. D. STANLEY (East Calgary):: May I first congratulate the Minister of Finance (Mr. Rhodes) upon the splendid budget address which he presented to us a week or so ago, and also offer a few words

The Budget-Mr. Stanley
of commendation to the last speaker (Mr. MacMillan) on his admirable effort in the house. I shall not attempt to discuss the question of debts or his proposals in respect thereto, nor shall I discuss the proposal which he made in regard to the conscription of wealth. All I may say in that connection is this, that his right hon. leader was prime minister in this country from 1922 to 1930; the party which he supported so loyally during all those years was in power, and we did not have a great demonstration of conscription of wealth during those years.
I propose to deal very hurriedly with the question touched upon in the amendment moved by the financial critic of the opposition (Mr. Ralston), and to endeavour to discuss the question of world trade and international cooperation. May I first read the amendment as we have it submitted:
This house regrets that the proposals of the Minister of Finance give no indication of the intention of the government to abandon the policies of economic nationalism which have proved so disastrous to Canada's trade.
It is of the opinion that the immediate substitution therefor of policies which will promote export trade throughout the world is essential to any permanent improvement of conditions in Canada, and to the successful application of other policies respecting credit and employment designed to effect this end.
Analyzing that amendment as it is presented one would say that the mover is contending that there has been a disaster in connection with Canada's trade; that that disaster has been caused by economic nationalism and that the government of the day has introduced this economic nationalism. The second part of the amendment states that the cure for this would be to promote export trade throughout the world, and the inference is that the party which the hon. gentleman represents would introduce the cure by the substitution of policies advocated by his party. I contend that the hon. member has taken hold of the old political expedient of grasping an existing evil, playing it up strongly, laying the blame for the presence of such evil to his opponents, and then claiming that his particular policies are the cure. That is an old expedient which has been played often not only in politics but in other lines. Let us make a rapid review from Canada's viewpoint of the situation in the world in which we live.
True, there has been a distinct falling off in trade during the past four years. As a matter of fact, our total trade as expressed in dollars
has decreased to about thirty-seven per cent, but at the same time it is a remarkable coincidence that world trade has decreased to exactly the same percentage. When we look to the greatest nation, financially speaking, in the world, the United States, we find that the total income of that country also decreased to exactly thirty-seven per cent. If we take those few figures they are in themselves a fair indication that the condition which has been found in Canada so far as trade is concerned is worldwide. That has been repeated so often it is hardly necessary for me to reiterate it. Is it necessary to go over the history of conditions existing since 1914? The war; the years of recovery; the loans granted to European nations during those years; the difficulties which those countries found in building up their trade; then following along to the orgy of speculation; the cutting off of credit extended to the nations of the world; the crash and all that has followed. Canada came into the whirlpool of this world condition.
The amendment speaks of economic nationalism. When did this commence? At any rate, when did it begin to manifest itself most predominantly? It was in 1927 that the nations, particularly of Europe, began to build around themselves tariff walls, embargoes, licences, quotas and all the other obstructions to international trade, and 1928 was the year in which bilateral trade agreements were made among the nations. That is when this so-called economic nationalism, mentioned in the amendment, took root. But hon. gentlemen opposite were then in power; the present leader of the opposition (Mr. Mackenzie King) was leader of the government; why did he not do something to prevent this economic nationalism? What steps did he take? What steps did the supporters of the then government take? Shall we place upon them the responsibility for the existence of this in Europe, in the world and in Canada itself? Hon. members opposite say: That is unfair. Of course it is. The right hon. gentleman was not responsible for this, nor was the government of the day responsible for its introduction in Europe; but it is just as fair for me to contend that he was responsible for it as it is for the right hon. gentleman now to contend that the present government is responsible for its continuance. Laying aside political shams and facing the situation as we know it exists we realize that this is a world condition; that it is the manifestation of the tempers of the peoples of the world,

seemed so terrible and with which it had been almost impossible to cope were entirely eliminated. Then it was that that vision which was given to the League of Nations became more permanent and they undertook a like work in those countries where malaria was so prevalent. One-fifth of the population of the world, 650 million people, occupied countries which were malaria infested. Year after year went by but gradually the scientific assistance which has been extended on a voluntary basis 'by the League of Nations has made itself felt and conditions have vastly improved.
Then they went further. They arranged conventions, and all these various countries sent their skilled men to become more skilled. They came to Denmark, to France, England, the United States and Germany, where year after year lectures and practical demonstrations of public health work were given and discussions were engaged in. The program was extended and the men were divided up into smaller groups and visited for one or two or three months at a time various countries where they were aJble to see, at first hand, public demonstrations in operation-water systems, sewage systems, hospitals, research laboratories and all the other scientific provisions which are necessary for the maintenance of the public health. That work has been going on without any blare of trumpets, without any great publicity on the part of the League of Nations and without any unnecessary noise by the various nations of the world, but from year to year the work has been developed until to-day even those nations which were very backward in public health work are standing well up with even the most advanced countries of the world, and those efforts are still going on. The main thought here is that nations can come together in a general way and many of them can send their representatives, and indeed have sent them, to cooperate with one determined purpose in view, namely to raise the standard of pulblic health, and in that they have succeeded. I think I am safe in saying that no similar effort on the part of any group of nations has had such a large success. No undertaking by any nation or any group of nations heretofore has had the result of saving so many human lives, of relieving so much human distress of mind, body and spirit, and even of soul, than has this undertaking of the nations which faced one another in the early days of 1920 and agreed to help one another in raising the standard of public health work.
Applying that to our own selves-because I think there is a lesson here for us, although the advance that is to be made in public

health work is not being announced in any great public advertising or with any blare of trumpets. We have in this country provincial health organizations of varying degrees of efficiency. I most thoroughly agree that the proper place for the public health organizations is in the province, as near to the people as possible. That is perfectly right. When it comes down to the actual administration there is no substitute for the provincial departments of health, and I do not wish to be misunderstood as in any way recommending that there should be any change in that respect. That is exactly the method that was followed in connection with the successful undertakings by the League of Nations, with no interference, but rather coordination and cooperation, bringing together all the work in a cooperative way. But there is a place and a very valuable place for the federal Department of Health in this connection. Each province would do its own work, certainly, but the federal Department of Health could be the coordinating centre with its influence steadily permeating and helping to raise the standard continually in the provinces, with the federal department making the utmost use of the existing provincial departments of health, but at the same time persistently grappling with the problems which present themselves.
I have presented this, Mr. Speaker, in very general terms indeed. If I had time I could illustrate by a few definite proposals what could be accomplished in this way, the individual provinces working separately in their own fields, and the federal department coordinating in attacking such problems as heart disease, cancer, kidney conditions, and so on. These are problems which are presenting themselves, and to-day I am sorry to say the efforts are being defeated because the spheres of activity are too constricted, and there is not that coordinating national and international effort that is required to make the efforts a success.


Henry Elvins Spencer: Mr. Speaker, I should first like to congratulate the hon. member for Mackenzie (Mr. MacMillan) on his very able maiden speech in this house to-night. Not only did he speak well, but he gives promise of being one of the real debaters of the house. He also showed that he has a sense of humour whioh he will find very necessary if he sits in his present position very long.
I was a most interested listener to the various suggestions which he made for curing the ills of the body politic. Being a new

The Budget-Mr. Spencer
member he did not realize that the very suggestions which he made to-night had all been made previously several years ago from this comer of the house. Whether the suggestion comes from him or from any other part of the house, it is always welcome and we shall do our level best to cooperate with any hon. member in bringing about necessary reforms.
The hon. member for East Calgary (Mr. Stanley) will pardon me if I do not follow him closely. I was glad to hear what he said with regard to the League of Nations. The league has in many ways done splendid work, although some people think it should have done more; and a resume of what has been done with regard to health comes very well from the hon. member. Particularly good work has been done in that connection and I think the public should know about it.
In referring to trade the hon. member said that while the trade of Canada had dropped down to about 37 per cent of what it was, world trade had suffered also. That is all very well, but it does not mean that we should rely upon international conferences and international actions for relief. Relief must be started by some country, and Canada might just as well be the country to start it as any other. In my opinion too much attention has been given to international trade. International trade is very important, but our home trade between our own people is of greater importance.
It is very interesting to sit in this house and listen to the discussion of the budget by hon. members on each side. Hon. members on the government side give continuous praise while hon. members of the official opposition continually blame the government. I happen to be in the fortunate position of not having to give all praise or blame entirely. I cannot give as much praise as I should like to, but there is some praise due to the government. I shall certainly blame wherever I think blame is due. I do not think it can be said of the government that they have been inactive. This government during the last four years has probably been the busiest government Canada has had at any time, except the government which held office during the war. Look at the number of conferences that they have called or attended, one nearly every year; look at the enormous amount of taxation which has been levied on the people; look at the enormous amount of unemployment relief which has been given, such as has never been known in the history of Canada; look at the large number of alterations which have been made in the tariff schedules. Unfortunately the conferences did not turn out to be as successful as one would have hoped they would be. I think it must be admitted that the first and last conference drew practically blank. While the middle conference did some good with regard to empire trade, that benefit was derived to a certain extent at the cost of our world trade.
Then we come to the taxation proposals. This government felt that it had no alternative, although I think it had, than to levy taxation very heavily. This taxation has interfered with our internal trade because it has proved to be a great damper on the purchasing power of the people. In spite of the fact that about $130,000,000 has been spent upon relief, our problem has not been solved. Yet we were promised some four years ago that this problem would be solved very quickly. There is no doubt that the increases in the tariff have had the effect of interfering with our export trade. I do not say that the government have not done their best; I think they have in all sincerity, but they now find themselves in the difficult position of having to admit that their remedies have failed, and they are attempting to find other means of meeting the present crisis. Under the law of self preservation they are looking for a way out and they are not bothering very much with conferences. This budget shows the smallest increase in taxation of any budget of this government. Only one new tax is suggested by the Minister of Finance (Mr. Rhodes). The tariff has come in for some attention, but instead of increases we find decreases. The government came into office with the policy of putting the tariff up very high with the idea of saving the country. After four years they found that that policy did not produce the returns expected, and they have come to the conclusion that they had better chisel the tariff down as much as possible.
The deficit this year amounts to about $76,000,000 which with the Canadian National Railways deficit of $59,000,000 gives a total deficit of $135,000,000. Trade has been bad for the last few years and such a condition is bound to have a serious effect upon the budget.
The one new tax which the government has seen fit to levy is the tax on gold. If there ever was a popular tax, I think it is this one. For several years past general business has been endeavouring to make both ends meet and has been looking with envious eyes upon the gold mining industry, which has been doing particularly well. The figures given
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country outside this dominion and I hone the Minister of Finance or one of the other ministers will make a statement in regard to the matter.
I would like to say a few words regarding the serious situation that we find in the prairie provinces. It is well known that for some years past many of our products have been selling below cost and that any reserves that the people had have been depleted. One has only to go through the country to see that the buildings and machinery are going unrepaired; that there is no money with which to make the necessary improvements. The standard of living has if possible been lowered. The young people are facing life under a handicap; their parents are having great difficulty in giving them a decent education, especially a higher education. I think the government itself realizes to-day that agriculture is just about at the limit of its endurance whether in the east or west and naturally the collapse of agriculture would mean the collapse of general business. As the hon. member for Mackenzie (Mr. MacMillan) has said, the farmers want to pay their debts, but it does not matter how much they want to pay if it is impossible for them to pay and Canada is up against a very difficult problem, because so many of the industries depend directly on agriculture.
I want to congratulate the government on introducing their marketing bill. It took a good deal of pluck to introduce it, but one thing we cannot criticize the Prime Minister (Mr. Bennett) for not having is plenty of courage. A marketing bill or something along those lines has been asked for in western Canada for many years and I shall therefore take
great pleasure in supporting the second reading of that bill, reserving the right to criticize, if need be, any details when the bill is either in committee of the whole or before the committee on agriculture if it is sent there. The need of marketing legislation seems to me to be brought before us when one realizes what the figures mean that were given by the Minister of Agriculture (Mr. Weir) in introducing the bill. I find that no fewer than nine of our farm products are nearly all consumed in this country. The figures are as follows:
Percentage of Home Grown Agricultural Products Consumed in Canada
Per cent
Eggs	 99.8
Sheep and lamb	 99.4
Butter	 98.9
Poultry	 98.3
Cattle and beef	 97.3
Potatoes	 96.9
Hogs and pork	 95.4
Oats	 94-1
Barley	 88.2
That means to say that a very small percentage of those products when sent abroad will affect the prices sometimes very drastically and oftentimes bring them below the cost of production. When we consume so much of those products it should not be difficult under a marketing board to be able to take care of that small surplus and to see that the producer gets a fair return for his work. On the other hand, looking at the different countries that have bought Canadian produce, I find that for reasons best known to themselves they have raised their tariffs on wheat from a very low figure, sometimes from no tariff at all, to a very high one, as follows:
Bates of Duty Charged on Canadian Wheat by Various Countries
Lowest rate Highest rate
Germany	
Free in 1922	$0 98 in 1930France	.	
$0 11 in 1924	0 85 in 1930Italy..'	
Free	in	1921	0	73J	in	1929Czechoslovakia	
Free	in	1921	1	36	in	1933 (per	cwt.)Japan	
0 18	in	1921	0	34	in	1930Mexico	
0 60	in	1923	1	05	in	1930
In the case of Czechoslovakia it goes from free in 1921 to as high as $1.36 per hundredweight in 1933.
While I am on that I want to give the house some figures which will give those who have not a knowledge of western Canada an idea of some of the extraordinarily low prices that are being paid for farm produce. I have in my hand a bill of a sale near Hughenden, Alberta, a part of the west that has never had a complete crop failure. It must be remembered that the machinery to which I am going 
to refer is all second hand, but it is second hand machinery that is being used. I find that six horses that were sold brought a total of $95.50; one horse a few years ago would have fetched that price. I find that six cattle, consisting of two steers, one calf and three cows, brought a total of $41.75. Then we have some of the
machinery:
One binder	 $ 5 00
One disc	
8	00One set of sleighs	
11	00One wagon gear	
19	00One sulky plough	
5	00
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One set of harrows	[DOT]	5 00One gang plough	
4	25One hay rake	
3	00One mower	
5	00One fanning mill	
6	00
It is almost unbelievable. I know this particular case because the man who had the place had an overdraft at the bank; he had given this stuff as collateral, and he wanted to turn the whole thing over to the bank against the loan. But the bank would not take it. They did however, write their loan down from $700 to $500 and brought sufficient pressure on him to have this sale. When the sale was over it did not bring in $700 or even $500; it brought $241.05.
I give these figures because I think it is essential that the people in this part of Canada should know the extraordinary situation that the farmer on the prairie is struggling against. I am glad to learn from the Minister of Finance that the government intends to bring in a bill designed to liquidate to a certain extent the farmers' debts, or the expression used I think was to enable them to stay on the land. I cannot say much with regard to the legislation proposed, as we have not particulars, except that I am glad it is coming. But I want to warn the government right now that it will have to foe much more far-reaching than the long term farm loan act of a few years ago. That has given very little relief indeed. I shall withhold further comment until the legislation comes down, but I hope when it does come I shall be able heartily to congratulate the government on what they propose. Then I understand the government intends to bring in a bill with regard to public works. I hope that it will include provision for finishing those branch lines of railway where the grade has been prepared already but the rails are still wanting. I have in my mind one particular grade running some twenty^five miles easterly from Bulwark. The grade is all ready, it only awaits the steel, and completion of this line is very urgently needed. The farmers there have been waiting for many years, living a long distance from elevators and putting up with a great deal of hardship. I sincerely hope that when the public works program comes down such undertakings will be considered. I have taken the matter up with the Minister of Railways several times, and I hope we shall now see provision made for finishing such public works.
In conclusion I should like to refer to some of the defects in our economic system as I see them. Our problem is not one of unemployment, but of unpurchasable production;
that is, that people are unable to buy the goods which they want and which are already made. This brings about consequent unemployment, with the usual glut of goods; production thereby is further reduced, and there is the consequent poverty. Poverty is caused not by unemployment but by lack of purchasing power accompanied by economic need. We have many people who might be called unemployed, but they are spoken of as leisured because they have money to spend. We have, as outlined so ably by the Minister of Trade and Commerce this afternoon, industrial plant much greater than we really need, although we could use it a good deal more if the people were able to purchase the goods that can so readily be made. This brings about frantic cut-throat competition in selling goods, because of the vast amount to be sold and the few who are able to buy and the many who can buy but little. This defect in the means of selling goods brings about the next stage, the grabbing for foreign markets. As each country is trying to do the same thing we are drifting into worse and worse economic warfare which undoubtedly will lead ultimately to military warfare. It seems to me, therefore, that instead of spending so much time and money and consideration in an attempt to find markets abroad for our surplus products, we should pay more attention to satisfying the needs of our own people. I was reading, the other day a most interesting book on the life of Napoleon, and I noticed that he considered that the problem that should engage his attention first of all was that of agriculture, next industry, and third external trade. Canada would do well if she followed a similar line of reasoning.
As I have said, the problem of every country to-day is how to get rid of goods, and they are trying to get rid of them by export. But we have a real demand at home, and our problem is to turn that real demand into effective demand. If we have not money sufficient to buy the goods that are made, that is allowing for the exchange of goods between export and import, we have not the money to buy the goods that come into this country in exchange for the exports. A glut of goods, as we well know, means that factories shut down, more and more men are out of work, with consequent lack of purchasing power and increased burden of taxation on those who are working in order to take care of those who are unemployed. So it seems to me that we have to pay more attention to the matter of purchasing power. In these
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times agriculture is the industry that feels the distress most because it is least organized, consequently the prices of agricultural products drop first and are usually the last to recover. Therefore the responsibility of government at this time is to enable the farmer to get a fair return for his work, which will have the effect of bringing about an improvement in all industry.


Mr. HARRY BUTCHER (Last Mountain):: Mr. Speaker, I understand it to be the custom, when taking part in the budget debate, to refer to matters that have been alluded to by the Minister of Finance (Mr. Rhodes) in his address, and I understand also that it is the privilege of horn, members who have some other subject much in mind to speak upon that subject. I propose to avail myself of that privilege this evening. Before doing so, however, I should like to congratulate the Minister of Finance upon the manner in which he delivered his budget address. I could not help sympathizing with him as to some of the material contained in that address, though I must admit that there was some occasion for rejoicing in connection with other parts of his speech.
To-night I want to speak upon a subject to which I referred early in February, that is, the need for the amendment of our company laws. A little later in the session the Secretary of State (Mr. Cahan) said he thought possibly the amendments proposed in the speech from the throne would not be proceeded with this session, but at a still later date the Prime Minister (Mr. Bennett) stated that a new companies act would be brought in, and I understand that this new act has been brought in and is now upon the members' files. I want to congratulate the government, and particularly the Secretary of State, for their action in bringing down this bill this session. I have not had time to study the act as yet, but if it is as stringent as the Secretary of State suggests I am sure it will meet with the approval of this house. In his preliminary remarks the hon. gentleman said:
The bill also contains very strict and stringent provisions with regard to the issue of prospectuses by companies or by underwriters on behalf of companies.
Later he said:
They are so much more strict and stringent than the provisions of the provincial companies acts that if this act is adopted I think it may result in a very serious diminution in revenue for the consolidated fund, because until provincial acts are amended or modified in like manner many applicants for charters certainly will go to the provincial authorities rather than to the dominion authority.

I congratulate the Secretary of State upon this disregard for the consolidated revenue fund. I think it is very fortunate that the government has decided, regardless of the loss of revenue, to improve our companies act and make it less possible than it has been in the past for fraudulent companies to operate. The minister concluded his preliminary remarks by saying:
*-I trust this bill will receive the careful consideration of hon. members of the house before it is dealt with by the committee of the whole.
I am confident that this is precisely the reception that will be accorded this bill.
As I said just now, Mr. Speaker, early in February I referred to certain matters in connection with the promotion of companies in the Dominion of Canada during the last few years. I prefaced my remarks by saying that undoubtedly the majority of the promotions had been of a strictly honest character but that there had been many that were decidely dishonest, and that there had been dishonest promoters of companies who had defrauded the public without mercy. I then went on to speak of financiers and financial organizations that had promoted mergers and combines in Canada that were illegal in some cases and near illegal in others, that were distinctly detrimental to the interests of the public and positively disastrous to investors. I said further that these questionable and in many cases immoral ventures frequently were connected with the necessaries of life, such as bread, milk, fruit, fish, coal, textiles, pulp and paper, asbestos and cement. I omitted to say "among others" as I had intended, but I think it was clear to the house that I was not trying in the least to make grave disclosures at that time. I was not trying to inform this house of the conditions that existed, because I knew that the majority of hon. *members were perhaps better informed than I was. I was trying to remind this house once again that the time was ripe for an improvement in our company laws in order to prevent a recurrence of the disastrous happenings of the past ten years in the matter of company finance. Nor was I trying to attribute blame to any government, either federal or provincial, either past or present; I was trying to draw attention to certain evils and to suggest certain remedies. The day following my speech the Prime Minister made this remark in the house:
There are thousands of men and women in Canada to-day who have been practically

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ruined because of the shares they bought in various enterprises in this country during the last seven years. It is a blot upon this country's financial history.
So I had the Prime Minister with me in the opinions I expressed the previous evening. I am informed that on the following day one of the Montreal papers said, "Everybody knows these things." I did not see that statement personally, but if it be true that everyone knows these things certainly it is equally true that it is the duty of someone or some authority to do what may be possible to prevent their recurrence. It seems to me every hon. member of this house has to line himself up either with the reformers on one hand, those who believe in preventing that kind of thing in the future, or on the other hand with those who say that the law of the jungle is the right law, who believe in the survival not of the fittest but of the slickest, as the hon. member for Bow River (Mr. Garland) said some time ago; who believe that it is every man for himself, and his Satanic majesty take the hindmost. It may appear to some hon. members that I am suggesting locking the stable after the horse has been stolen. Admittedly horses have been stolen but, to pursue the metaphor further, there are still horses in the stable and there will be others later on, so surely it is advisable now to provide the bars, the locks and padlocks that will prevent further thefts.
On reflection it seemed to me that when I spoke on February 1, I said too much or too little in regard to certain necessaries of life that had been the subject of the operation of wrongful combines and mergers. I had said that in the case of combines and mergers, monopolies or near monopolies had been created, and by practical monopoly of purchasing power the price to the producer had been forced down; by oppression of labour wages had been forced down, and the pace had been speeded up to a point almost beyond endurance; that by virtual control of output prices had been raised and the consumer had been gouged. I agree with what the Minister of Trade and Commerce said this afternoon with regard to the benefits or lack of benefits resulting from many of these mergers and combines. I am unable to see that they have benefited in any way the producer, the consumer or the investor, or that they have proved of greater benefit to labour than the smaller, independent units. The question then arises: Have they benefited anyone and, if so, whom have .they benefited? They have benefited the promoter only.
First I am going to refer to milk, which was the subject of an inquiry by the agriculture and colonization committee of this house last session, when much interesting information was brought to light. I do not think I need refer to the result of that investigation, because every hon. member had the opportunity of following the proceedings of the committee from day to day, but I do want to give in brief the history of just one company, tracing it from its very inception to the present time, in order to prove that there has been an evil in connection with the formation of companies to deal with this much needed commodity.
I am going to quote from several newspaper articles to prove my point. In the Financial Times of October 15, 1926, there appeared the photograph of a certain gentleman who was described at the foot of it as the "originator of many utility and food enterprises in Canada." The article went on to say that he had just completed the purchase of National Food Milk Products Limited. Previous to this it is understood that he had been fifteen years in Alberta, during which time he had originated two large utility enterprises. Then he came to eastern Canada and "saw the possibilities for development in food product lines." He is not the only one who has seen the possibilities for development in food product lines. Unfortunately there have been too many of them.
This gentleman, having come upon a very promising little dairying industry in or near the town of Gananoque in the province of Ontario, conceived the idea of forming a company to handle this little dairy, and the National Milk Products Limited was formed.
This preliminary notice of October 15, 1926, was followed by another a week later in the Monetary Times under the title of "New Company Issues." It was stated that this new company was being floated with a new issue of $150,000 six and one-half per cent twenty year first mortgage sinking fund gold bonds.
Then we leave National Milk Products, Limited and we find in the Produce News of November 30, 1928, an announcement of the formation of another company called the Canada Dairies, Limited, which we are told was a consolidation of seven Toronto dairies.
Four months later, on March 18, 1929, we are told that Canada Dairies, Limited, has acquired the company which I first mentioned, National Milk Products, Limited. You will remember, Mr. Speaker, that the securities of
The Budget-Mr. Butcher

National Milk Products were placed on the market on October 22, 1926. I should have said that at that time first mortgage bonds for S150,000 were outstanding, and $150,000 of preferred stock.
In the Financial Post of December 26,
1929,	just nine months after Canada Dairies, Limited, had acquired National Milk Products, Limited, we read:
National Milk has gone into receivership. It is not known how much the bondholders will receive.
I think, sir, it might have added:	It is
definitely known how much the preferred shareholders will receive-they will receive nothing.
We find that:
National Milk was a subsidiary of Canada Dairies, Limited, but the latter company did not guarantee the $150,000 of bonds outstanding . . . and had cut loose from the Gananoque firm, leaving whatever can be got from it for the bondholders.
That is a very casual statement. What did it mean for the poor bondholders and shareholders? I am informed, and I believe credibly informed, that the people of the town of Gananoque contributed 1250,000 in the purchase of the securities of this company. These people in the town and the farmers in the concessions to the north and the south, the east and the west, including probably many a poor labouring man, contributed their little quota for the purchase of a share of that company. A very casual statement-"whatever could be got was left for the bondholders.''
In the Financial Times of December 16,
1930,	we read that a special meeting of Canada Dairies, Limited was held to confirm, "if deemed advisable, by-law authorizing sale of assets of Canada Dairies, Limited to the Dairy Corporation of Canada, Limited."
On June 4, 1932, we read that Canada Dairies put on a customer-ownership sale, offering $50,000 six per cent first mortgage bonds to pay off old mortgages, assisted by the Dairy Corporation of Canada. The public is invited to carry this load. We read from that very article as follows:
The original company consisted of a merger of six or seven small companies arranged by-
I shall not give the name:
-and other associates not now associated with the business.
It is a remarkable fact that whenever these companies get into trouble, those who are responsible for their formation are found to be "not now associated with the business." They have got away with their profits, leaving

the people who put up the money to bear the loss. The article goes on to say:
About $800,000 was paid for these concerns but in the upshot a large part of the business was lost in merging and results were unsatisfactory.
Those who bought about $300,000 in preferred stock have not found their investment satisfactory.
Again, a very casual way to put itl Men who have lost $300,000 would hardly regard their loss as merely unsatisfactory. Most of them would think of other words which are far more appropriate, if less polite. Who lost that $300,000? What labour does it represent? What distress does the loss of it entail?
But there is still left the Dairy Corporation of Canada, and what of it? It consists of a merger, and what do we hear of this company recently? We read that it had to be reorganized, that in 1930 the company had issued sinking fund debentures to the tune of one million dollars, which were "secured by first floating charge on all company's assets and undertakings. Company cannot mortgage, pledge, lien or charge upon the mortgaged premises," and so on. But we are informed that there was a joker in the trust indenture, that these debentures were never a first lien, that they were always "subject to the bank loans and other secured charges in the ordinary course of business." In a circular letter accompanying particulars of the new scheme of reorganization, the president of the company sententiously remarks, "The payment of this bank loan is a problem." The only comment one can make on that is: What wisdom!
One of the subsidiary companies of the Dairy Corporation of Canada was the City Dairy of Winnipeg. It may be that hon. gentlemen have recently been receiving a little magazine called Wilton's Review from Winnipeg. It contains very interesting information with regard to this company known as City Dairy. My reason for referring to these companies is that I want to point to certain evils that exist in the constitution of many of our companies to-day, and at the same time to point out possible remedies.
On February 17 of this year a meeting of the shareholders of City Dairy was held. At this meeting it was disclosed that when the shareholders bought their preferred stock only 4,500 preferred shares were authorized; that the preferred stock became entitled to voting power after one year's default; that 2,000 of these preferred shares participated with the common stock in dividends over seven per cent and up to ten per cent; that at that time

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there were 3,000 shares of the common stock of a par value of $100 in existence; that in 1933 all the preferred stock being in default as to dividends the holders naturally thought that they controlled 4,500 votes as against the 3,000 votes in common stock. But they were mistaken. They discovered that the 3,000 shares of common stock of the par value of $100 had been converted into 15,000 non^par shares, and thus that they had lost control.
How had this happened? In 1930 certain by-laws designed by the holders to place the common stock in a permanently dominant position were duly passed, and in course of time a petition for supplementary letters patent was filed in the office of the provincial secretary. The facts recited in the petition were apparently quite truthful and very frank. On September 27, 1930, supplementary letters patent were granted. In an article which appeared in the Financial Post of March 17, 1934, the president of the Dairy Corporation of Canada is quoted as follows:
In 1930 the capital structure of City Dairy was changed and gave the Dairy Corporation of Canada sufficient common shares to outvote the preference shares if those preference shares assumed to vote owing to dividends being in arrears.
A scheme of rearrangement was submitted, and what happened? Those who contributed $450,000 will be absolutely at the mercy of the holders of the original 3,000 common shares, who did not pay more than $100 per share. I know that this particular case is no business of the federal government, but it' illustrates what is quite common in the formation of companies. I hope this is an evil which is being dealt with in the amendments to the Companies Act.
I referred to bread, and I believe the Minister of Trade and Commerce (Mr. Stevens) referred to the same subject this afternoon. I should like to give a few facts with regard to this commodity. In 1931, the allegation having been made that several bread companies had formed an illegal combine, an investigation was held, either by the registrar under the Combines Investigation Act or by a commissioner. During the course of his investigation the registrar found that four milling companies operating bakeries had then acquired ninety-six bakeries in Canada. They manufactured one-third of all the bread manufactured in Canada and ninety per cent of the bread manufactured in the communities in which they operated. Taking these facts in conjunction with those given this afternoon by the minister the house will see the control which could be exercised by these four milling companies operating bakeries throughout Can-74726-170
ada. The house will realize how easy it would be for price agreements to be made by these four companies. At the conclusion of his report the registrar states:
No conclusive evidence has been adduced to show that this combination constitutes a combine within the meaning of the Combines Investigation Act. At the same time, the predominant position of these flour milling companies in the baking industry, and the possibilities of monopoly and price enhancement which are theirs, are such as to warrant continued governmental interest in the situation, and, should the need arise, further governmental action on behalf of the consuming public.
It is quite evident that these four companies have something which very nearly approaches a monopoly of the bread business in eastern Canada. The very idea of monoply is repugnant to the free thinking people of Canada. Men who seek to control any industry are never actuated by altruistic motives but are invariably themselves controlled by a ruthless lust for power and financial gain. Have these combinations benefited the consumer in any way? Have they benefited the producer in any way? Have they benefited the labourer or have they benefited the investor? Poor's appraisal of the securities of these milk and bread companies to which I have referred is, with one exception, "speculative" or "very speculative."
I referred to coal but I do not propose to speak on that matter this evening. I understand that the decision of the court as to the existence of an illegal combine has been appealed and I shall make no further reference to the matter.
I referred to fruit also. It is within the memory of hon. members of this house that in 1926 four companies and four individuals were fined $200,000 in all because they had formed an illegal combine in fruit. Although I have not the facts, I believe there is a general impression that a similar combine exists to-day.
I mentioned fish also. I might point out that recently an inquiry was held in Manitoba into an alleged combine in connection with the fishing industry of that province. The commission found as follows:
We have found that a combination exists between four companies and that other companies have agreed with them, to regulate and control a large proportion of the summer caught fish on lake Winnipeg.
Time will not permit my going into details with regard to this alleged combine in fish.
I referred to asbestos. I do not believe I have time to deal further with this except to say that the inquiry recently held or at

The Budget-Mr. Butcher

present being held in the United States goes to show that the control of asbestos is almost world wide and that J. P. Morgan and Company have presumably acquired control not only of Canadian companies but of companies in Great Britain, Europe and on the north American continent. The Prime Minister, speaking recently, I believe in Toronto, referred to the asbestos situation in Quebec and the desire of the president of that company to purchase asbestos in Russia rather than in Quebec.
I do not think it is necessary for me to amplify the remarks I made on February 1 in connection with cement. In 1909 there were 11 chief producers who had been brought together at a cost of $14,822,250. Stocks and bonds to the tune of $27,134,786, or almost twice the cost of purchase, were issued. Even with this huge capitalization satisfactory dividends were paid. However, in 1927, Wood, Gundy and Company and associates purchased this company and recapitalized at $35,000,000, although it was alleged that there had not been any corresponding increase in capital assets. Despite the water in the stock satisfactory dividends were paid. But in 1923 a cloud appeared upon the horizon which seemed disastrous to this large company. The National Cement Company was incorporated, but this was a competitor not to be endured. In 1928 the National Cement Company was acquired by Alfred Rogers and associates and in 1929, a year later, Canada Cement took over National Cement. We now have practically a monopoly in cement products which are used for thousands of purposes by practically every industry in Canada. Again I ask: Has this huge monopoly benefited the consumer? Have the labourer and the investor been benefited? Poor's appraisal of this particular stock is " speculative."
I referred to pulp and paper, but as my time is going rapidly I do not think I can deal with this matter except to say that the history of the Canada Paper and Power Corporation is one of greed and mismanagement of finance. I should like to make two quotations. I made one in this house about two years ago, and the other is contained in a letter which was addressed recently by a firm of investment bankers to I believe practically every member of parliament. Mr. Taschereau is quoted as having said that in 1920 there were 100 paper mills, producing $100,000,000 a year in products, capitalized at $22,000,000, employing 31,000 employees, and paying them yearly $45,000,000. At the end of ten years there were 109 mills, producing $215,000,000

in products, but capitalized at $714,000,000. There had been an increase of 2,000 in employees but payrolls remained the same as in 1920. While production increased by 115 per cent, capitalization increased by 3,500 per cent, roughly speaking. I quote from the letter of the investment bankers as follows:
In general, the financial and industrial leadership in Canada has differed only in degree from the depredations of the robber barons of medieval Europe, the brigands of Tartary or other ungodly countries, the Corsairs of Algeria or the pirates of Penzance.
This firm of investment bankers stated that the above was an extract from a published article by the president of a well known Canadian life insurance company. Again I ask: Did this combination benefit labour? Did it benefit the producer or the investor? If not, whom did it benefit? It benefited the promoters only.
I was going to refer to Dominion Textiles, but time will not permit.
Having dwelt for a few minutes on these mergers and combines, the operations of which have been distinctly detrimental to the interests of the people of Canada, I wish to refer now to some fraudulent company promotions through which investors have lost millions. Possibly hon. members are wondering why I did not leave these remarks until the second reading of the new Companies Act, but I wanted to speak with greater latitude than probably I should have been permitted to do had I waited until that occasion, when one would be expected to speak only on the principle of the bill. In every one of these instances I propose to point out an evil and suggest the remedy. Take the O. J. Brooks ventures, which resulted in the loss of from [DOT]ten to twelve million dollars to the people of Canada. This man Brooks came to Canada in 1921 and promoted seven finance corporations and finally promoted Brooks Steam Motors Limited. He took from the people of Canada, as I say, from ten to twelve million dollars, including about $3,800,000 in Brooks Steam Motors alone. How was this accomplished? It was accomplished by the illegal use of common stock and no par shares. I had hoped to be able to deal at considerable length with this particular company but time will not permit. Suffice it to say that I will point the moral before closing my remarks. There is another company to which I wish to make some reference and that is a concern referred to in an editorial of the Free Press of Winnipeg of May 18, 1928. This was a western company owned by a famous westerner, Senator Patrick Burns, and a small

The Budget-Mr. Butcher
group of associates. This company had a prosperous record and looked like a good thing. I have looked up the prospectus as well as the Toronto Globe of May 18, 1928, and I find that the prospectus was issued by the Dominion Securities Corporation Limited, on May 16, 1928. On May 12, 1928, this company, the Dominion Securities *Corporation, had addressed a letter to the shareholders then in the concern, reading in part as follows:
We have purchased the business of P. Burns & Company Limited. There will be a rearrangement of the capital structure which will necessitate calling for redemption the 6J per cent first mortgage bonds at 104 and accrued interest on the first of Juy next, and a formal notice of this call has already appeared in the press.
Notwithstanding this letter, dated May 12, 19(28, the company issued a prospectus four days later stating:
From the letter of Mr. John Burns, to be president of the company, we summarize as follows:
The prospectus concludes thus:
These statements have been accepted by us as accurate, but are in no event to be construed as representations by us.
This prospectus makes very alluring statements to show that the earnings of the company are far more than sufficient to pay interest on all securities offered for sale. But in a letter recently issued by the Preferred Shareholders' Protective Committee some very strong statements are made, and I suggest to hon. members that they take the first opportunity of reading this communication. I am quite satisfied that they will agree that an investigation should be made into the affairs of this company and into the history of its capitalization. Again time forbids that I should deal in detail with the operations of this particular company.
Now I wish to point out briefly the lessons to be learned from these cases. National Milk Products illustrates the need of closer supervision of promotions and especially of those promoters who are so ready to "see the possibilities of development in food product lines" and in public utilities.
City Dairy Limited illustrates the evil of the "abstraction of the vote" to which I should like to refer, but I am afraid I shall be unable to do so; I hope to have the opportunity on the second reading of the Companies Act. It also teaches the evil of the no par value share.
The case of the mill owned bakeries shows that concentration of the production of any food line is detrimental to the interests of the 74726-170 i
public, and that our present concept of what constitutes an illegal combine needs some adjustment.
The case of the Dairy Corporation of Canada seems to show that there should be some official charged with the responsibility of bringing those responsible for withholding necessary information to the bar of justice; for what is the business of many people usually becomes the business of none. And trust companies who have undertaken to protect certain classes of shareholders should not be able to evade all responsibility for fulfilling the trust by employing the customary formulae but should be held responsible to those shareholders in every case in which there is a "joker" in the trust deed.
The tobacco inquiry, the fish combine in Manitoba and the asbestos case illustrate the need of a widening of the legal interpretation of what constitutes an illegal combine.
The cement case illustrates the need of a stricter control of the capitalization of mergers and so forth, and similarly the pulp and paper situation.
The textile situation suggests that the time has arrived for limitation of the earning capacity of mere money capital.
The Brooks ventures illustrate the evil of bonus stock, call it stock watering or illusory capitalization, whichever you will, and the necessity of our courts passing upon the adequacy of the consideration given for shares, when called upon to do so. There are other cases to which I wish to refer but I am afraid I shall have to postpone consideration of them.
The case of Burns and Company Limited suggests that the person or corporation issuing a prospectus should not be able to hide behind the formulae usually employed but should be held directly responsible for all statements contained therein. A casual glance over the new Companies Act shows however that provision of that kind has already been made. And all the cases combined seem to suggest the necessity of the erection of an investment board clothed with large powers of investigation and control.
There are many other matters which I should like to have dealt with but I shall speak of them when the bill is before the house.


Joseph-Arthur Bradette: It is customary for members of parliament speaking on the budget to refer to the wonderful manner in which the minister of finance presents it to the country. I (believe that in the present Minister of Finance (Mr. Rhodes) Canada is blessed, as it has been in
The Budget-Mr. Bradette

times past, with a man. highly qualified for the office, and the way in which the hon. gentleman presented the budget now before the house was a credit not only to himself but to parliament. But in bringing down the budget he must have found himself in a very embarrassing position for more than one reason, one of the main reasons being the rash promises made on previous occasions by his party and his government, and also by reason of some of the principles and policies enunciated by outstanding members of the government when they were in opposition. These were brought forcibly to the attention of the house by the opposition financial critic, the hon. member for Shelbume-Yarmouth (Mr. Ralston).
One thing in particular which the Prime Minister (Mr. Bennett) advocated and which made a strong impression at the time was the turnover tax. It is not my intention to deal at any length with this but merely to refresh the memory of the house, pointing out how easy it is to propound new policies if not new fallacies which are very workable in opposition but difficult of application when men are in responsible positions of government. The same thing applies to the statement of the Prime Minister that if he were in power he would almost compel the insurance companies of this country to take up the national debt at a lower rate of interest than then prevailed. Several other theories were propounded by the then opposition and in each case when they have the responsibility of administering the affairs of the country, they find those theories impossible of application. I recall very vividly that time after time not only in this country but throughout the civilized world new parties, fads and fallacies come out which look well at the time but when those parties take on the responsibility of government, they also find their ideas impossible of application for the simple reason that they would be detrimental to the country as a whole.
One matter I want to bring to the attention of the Minister of Finance is the fact that last year parliament through legislation reduced the interest rates on savings accounts by one per cent. But one thing that will strike every hon. member is the fact that if anybody wants to get a loan from any of these banks which have received special treatment from parliament, no doubt on account of the fact that savings were coming in too rapidly for the demand made on the banks because of the high rates of interest charged by them, he cannot borrow at a lower rate of interest. In my section of the country prior to last year when we wanted to borrow any money from the banks, the rate of interest was eight 
per cent, and this compounded at least four times a year. We find ourselves in the same situation this year. Why is it that when the reduction in the interest rate on savings accounts was granted to the banks the interest rate on loans made to their customers was not also regulated so that loans might be at a lower rate than we have to pay at the present time? If the banks are overloaded with savings deposits they can find an outlet for their money in good solid investments whether in industry or all kinds of new commercial enterprises or the refinancing of the older institutions.
I should like now to allude to something which I have already mentioned in the House of Commons: I refer to the refinancing of the Canadian National Railways. I believe the day is now at hand when that refinancing should be done so that the people, the owners of the system, may know exactly where they stand in regard to the financial structure of that great institution. We know the propaganda that has been spread against national ownership of our railways, and it is not fair, when we are discussing that all-importani matter, not to mention the fact that our national railway system has been overloaded with dead timber, dead material and dead capitalization, all of which it has absolutely no right to be shouldered with the responsibility of financing at this time.
I want to mention briefly a regional aspect which greatly affects our section of the country. I have mentioned this on several occasions and I wish to repeat it. So far as the section of the Transcontinental from Quebec to Winnipeg is concerned, it has never come into its own because it has never received the attention of the present or past governments in regard to the through traffic, freight or passenger, to which it is entitled. I well remember twelve or fourteen years ago the great rejoicing we had throughout northern Quebec and northern Ontario when the first through passenger and freight service was established; I well remember the demonstration made by every section of that part of the country. But the story was much sadder when over a year ago the passenger service was entirely done away with so far as through transportation from Quebec city directly to Winnipeg was concerned. Those fine national trains, numbers one, two, three and four, without warning to our section, were entirely withdrawn, and to-day there is no possibility of travelling directly from Montreal or Quebec or the maritime provinces to Winnipeg. The situation is worse because of the fact that since those two trains were cancelled practically all

The Budget-Mr. Bmdette
the traffic is lost to the Canadian Pacific. I speak of this question with knowledge; I know the people in my section find it impossible to travel directly between Winnipeg and Quebec city. When we want to go to Winnipeg, we have to come around by North Bay. In my section where we have a population of over 100,000 I do not think since the curtailment of that passenger service five per cent of the people who go to the west travel Canadian National. That accounts somewhat for the problem facing the Canadian National and explains certain loss of revenue. Why that service was ever curtailed I have never been able to learn either from the government or from the railway 'board. It is possible even at the present time to reestablish that sendee so as to allow the Canadian National to come into its own. Everybody who is familiar with the old line of the Canadian Northern where the traffic is now routed, knows that it goes through practically a wilderness; it does not go through a settled country such as we have in northern Ontario. I say to the house, and particularly to the Minister of Railways (Mr. Manion) so that he may use his influence, that the passenger traffic should be reestablished over the northern section of our country, if not to Cochrane through North Bay over the Temiskaming and Northern Ontario railway, at least from Montreal to Harvey junction and from there to Winnipeg. In that case so far as the through traffic is concerned, the railway would come into its own. That section has suffered on account of lack of service and the Canadian National has suffered by losing that revenue to the Canadian Pacific without any benefit to the people.
I want to felicitate the hon. member for Shelburne-Yarmouth (Mr. Ralston) on his wonderful speech, and I feel all the more at liberty to do so because it was recognized as such even by the Minister of Trade and Commerce (Mr. Stevens) when he spoke this afternoon. Not only was the hon. member speaking as a financial critic but he was propounding suggestions that will help the present government if they try to implement them. People from all sections spoke well of his ability in discussing matters of such great' national importance.
I want to concentrate my remarks particularly on a subject in which the whole country is interested: I refer to the gold tax. I am quite at liberty to speak on it because I do not own either directly or indirectly any stock of any mining corporation in any section of this country, and I have no interest whatever in the gold mining industry. Moreover, I can speak with an open mind on the matter because our section, when any problems, local or regional or national in character, arise, always tries to take the viewpoint of the whole of Canada. If one part of this country is affected by this tax we feel that the whole of Canada will be affected. I was . astonished this afternoon when the Minister of Trade and Commerce tried, I believe, to insinuate that the protest that was made in the house against the tax was merely a local one. The gold mining industry of Canada to-day affects every citizen, and although its activities are centred in only three or four provinces, the beneficial effects are experienced throughout the whole dominion. The Minister of Trade and Commerce knows well that in my section hundreds of carloads of lumber coming from British Columbia are being used every year in the Porcupine district alone. The gold mining industry affects every economic and industrial activity of our country and therefore the question is not parochial; it is one that affects every section.
Let me go further. The gold mining industry realize that they have duties towards the country as they have towards the province and the districts in which they are situated; therefore the industry is willing to bear its proper and reasonable share of federal taxation. The hon. member for Winnipeg North Centre (Mr. Woodsworth) is not here, which I regret, as I would like to have some further light on some statements he made on that matter. He said, on April 23, as reported on page 2446 of Hansard:
The financial critic of the opposition has suggested that this tax means a discrimination against a particular industry. Well, I would point out that that is true of all our indirect taxation.
I do not see how that statement will bear the light of analysis, because we are actually singling out one industry under the present system of taxation. There are other industries, which I am going to mention later on, that have been making large profits during the past year. Take for instance Imperial Tobacco; their annual report shows they made last year a profit of about six million dollars, but we have not applied a special tax on that exorbitant profit. The hon. member for Winnipeg North Centre goes on to say:
Our whole tariff schedule means that particular industries are singled out for taxation, so there is nothing new in that contention.
The Budget-Mr. Bradette

As far as I know, tariffs are not taxes on industry but are in fact intended to help and shelter industry. Take the oil or the textile industries: Imperial Oil, for instance, had a net profit of nearly twenty million dollars last year, but there is no proposal in the present budget to tax that particular industry, which is not being taxed by the tariff but is being sheltered and helped by artificial protection.
He goes further:
Further than that, it is suggested that it is discrimination against particular parts of the country.
As with the human body, if one section of the country suffers distress, then the whole country suffers. Although geographically we belong to central Canada, we have never taken a parochial attitude with regard to maritime rights, for instance, or the fruit growers of British Columbia or other activities of our national life. This is not a local problem; it is entirely a national problem. You cannot call the gold mining industry a local industry, because its beneficial effects are felt in every channel of our national life. Then the hon. gentleman says also:
Further it is suggested that the budget does not take into account the variations in the grades of ore and costs of production.
Doubtless the Minister of Finance in the very near future will come out with a statement corroborating what has been said by the Minister of Trade and Commerce. It is an anomaly to put a flat tax of ten per cent on gold produced regardless of profits. I intend to show how low grade ores are being treated, and how thousands of men will be thrown out of employment if that tax is applied uniformly to all the gold mines. I believe I am right in saying that the Flin Flon is working on ores yielding an average of $2,70 per ton on which they make a clear profit of IS cents per ton. Any hon. member can easily visualize what will happen as a result of this tax to mines operating on such low grade ore. The Minister of Trade and Commerce this afternoon gave us a ray of hope in suggesting that some amendment of the taxation proposals in that regard will be made. It will have to be made, otherwise the government will find very quickly that instead of being beneficial the tax will work its own destruction. It will throw out of employment a lot of men and paralyze to a large extent many sections of our country.
The hon. member for Winnipeg North Centre went on to say:
I do not believe it is common that such variations should be taken into account.

He certainly showed a very sad lack of knowledge in leading the house to believe that the gold mines are working on a definite ratio of actual gold per ton. I shall in a few minutes name mines that are worldng on an average gold content of $2.75 and similar figures, and others where the veins are so narrow that more rock has to be mined than ore; so that the hon. member, posing as a friend of the worker, showed a sad lack of understanding. I believe he was in the town of Timmins last year, where he would see one mine alone, the Hollinger, that employs 2,800 miners. It had a chance under the new price of gold of increasing its capacity by working *lower grade ore than in previous years. Then the hon. member went on to say:
If we did fully take them into account it would be a bonusing of the marginal mines.
Well, it may surprise hon. members to know that out of 475 mines actually in operation at the present time there are about 15 on a dividend paying basis. Can you visualize, in view of that, what harm may be done by a flat taxation of ten per cent of all production? Then he went on to say:
Since this enormous gain in the value of gold is entirely a fortuitous gain-
That is a very fine word to use. Are not all gains in commerce and industry fortuitous? This afternoon another hon. member, also a labour leader, for whom I have great respect, asked the Minister of Trade and Commerce what amount of money was spent in subsidies for gold mining. I may tell the hon. member that the government of Canada has not given a single cent of subsidy to our gold mines. The government practically seized the gold produced. If it had been allowed to go for instance to the New York market the mines would have received the very same price as was paid by the government. The government simply paid the price that the gold producers would have received in the New York market.
Then the hon. member went on:
Of course, some one will say that would mean that certain mines would not be able to gain as much as they are doing to-day, that certain lower grade mines would be discriminated against, that a certain number of men would be turned out of work, and so on. I know there may be all these objections, but they apply equally in any taxation of this kind, because a good many industries have been put out of business through the very high taxation placed upon them in the purchase of the raw materials required for their products.
Again that is a statement which astonished me, because I do not know of any taxation

Dominion Elections Act
or tariff restrictions against any raw material coming into this country. I know of no tariff for instance, on raw rubber or raw cotton coming into Canada.
Then the hon. member spoke of the nationalization of our gold mines. I wish he were here, because I was going to ask him what mines he would nationalize. Would he nationalize only the paying mines, the fifteen that are on a dividend paying basis, or every gold mine in operation at the present time?
I notice, Mr. Speaker, that there is not a single member of the Cooperative Commonwealth Federation group in his seat at the present moment, although time and time again they have been complaining of the lack of attendance of members of the two other parties.
On motion of Mr. Bradette, the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Tuesday, May 1, 1934