1935-03-26

[Stage Direction]
On the orders of the day: .
Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Mr. Speaker, on March 14 I inquired of the Postmaster General (Mr. Sauve) the amount paid each year to Mr. Laurent of Montreal. I was promised that I would have this information last week but so far I have not received it. I should like to know when I will have it.


Hon. ARTHUR SAUVE (Postmaster General) :: Mr. Speaker, it was my intention to give this information to the hon. gentleman to-day. On March 14 when the estimates of the Post Office Department were under consideration the hon. member for Temis-couata (Mr. Pouliot) asked for certain details in connection with a temporary contract awarded to Mr. J. E. Laurent for the carrying of parcel post and mail matter in Montreal. At that time I stated that I had not all the details but would furnish all the information to be found in the department as soon as possible, some of the details dating back as far as four years. I have been informed by the officers of my department that before May 1, 1932, the carrying of mail matter between the post office and the Stephens building in Montreal was done exclusively by the department. At that time the department maintained a garage containing eight trucks and one motorcycle. The cost of gasoline, oil, et cetera, amounted to $4,977.06 while $19,920 was paid in salaries.


Jean-François Pouliot: Mr. Speaker, I rise to a question of privilege. The information now being given by the Postmaster General is entirely outside of the question I asked. I wanted to know the amount paid to Mr. Laurent each year and the minister is now making an apology for his dealings in the matter.


Some hon. MEMBERS:: Order.


Jean-François Pouliot: I do not want to waste the time of the house.


Arthur Sauvé: I want to give an explanation to the hon. member for Temiscouata, in accordance with his questions.


Mr. SPEAKER:: I would point out that under orders of the day questions are directed to ministers of the government only with respect to matters of policy and so forth. In view of the nature of the question asked by the hon. member for Temiscouata (Mr. Pouliot), I think the answer should be as brief as possible and there should be no argument or debate with respect to the subject matter of the question.


Arthur Sauvé: Further costs were: garage,
$4,644; depreciation, $3,454.22; interest on capital invested, $829. The total cost of this service was $33,824.28. By reason of difficulties we met in the control of this service, and also of the abuses we discovered, the department had to dismiss employees and thought it advisable to try a new method, that is, to give this service to a contractor for a trial. The contract was awarded to Mr. J. E. Laurent at $27,000, as I said, including the insurance and all the obligations and responsibilities relating to the service. The new method being a trial, the department has adopted the principle of a temporary agreement, which the previous administration had followed from 1921 to 1930, in regard to the Canadian Transfer Company. Under the present contractor this service, from March 1, 1934, to February 28, 1935, has cost the department $28,593.60. But it is due in part to the fact that the normal increase of the parcel post in Montreal has advanced by about seven per cent These two services cost the department, before Mr. Laurent, $57,220.53.


Jean-François Pouliot: I rise to a point of order. There are only two official languages, English and French. The minister is now speaking the Esperanto language, and no one has understood a word of what he has said. Therefore he should translate either in plain English or French what he has already said in Esperanto.


Pierre Édouard Blondin: Order.


Arthur Sauvé: If Mr. Speaker understands
it, and the house, I am satisfied.


Jean-François Pouliot: It is Esperanto.


Arthur Sauvé: Since Mr. Laurent has had
the contract, the services are costing the department $55,593.60. Not only has the service been improved but the rolling stock has also been improved to answer the needs of the postal service. The contractor, instead of putting in eight hours a day as previously, must work two extra hours as his trucks
Relief to Municipalities

must leave at six o'clock in the morning instead of eight o'clock on account of the signal system, and for other reasons. In spite of the increase in the parcel post in Montreal and the improvement in the service, the department realized last year a saving of SI,626.93.	'



MILITARY EXPENDITURES

[Stage Direction]
On the orders of the day:
Mr. F. G. SANDERSON (South Perth):: I have a question to direct to the Secretary of State. Om February 18 last an order was passed in my name for a statement of all expenditures for military and police purposes since the present government came into office in August, 1930, including expenditures for the said purposes, actual or contemplated, under the Public Works Construction Act, 1934. I would remind the minister that on March 11 he made a statement-I will not take the time of the house to read it-in which he said that it would take at least two weeks longer to get the information. I would remind him further that the two weeks has expired, and two days in addition thereto, and that it is five weeks and two days since the order was passed.


Pierre Édouard Blondin: Will the hon. member be good enough to state his question?


Frederick George Sanderson: The question is, When may I expect the information?


Hon. C. H. CAHAN (Secretary of State):: Just as soon as the clerks of the different departments can obtain the information and put it in typewriting.



PURCHASE AND SALE OF GOLD

[Stage Direction]
On the orders of the day:
Mr. THOMAS REID (New Westminster):: According to press dispatches the United [DOT] States government is offering gold for silver.
Is the government considering taking up that offer with a view to augmenting the gold stocks of the country?
Hon. E.N. RHODES (Minister of Finance):
I will look at the question submitted by the hon. gentleman, but I take it that the answer will be in any case that the government will pursue the policy which it has hitherto followed of disposing of Canadian gold at the highest market price, whether in the United States or Great Britain.



RELIEF TO MUNICIPALITIES

[Stage Direction]
On the orders of the day:
Mr. A. M. CARMICHAEL (KindeTsley):: I have a question to ask, which perhaps might properly be answered by the Minister of Agriculture. I have here a letter from the secretary of the rural municipality of Kindersley in regard to the borrowing of money from the banks for taking care of spring relief, buying seed, feed and tractor fuel. He states that the bank refuses to loan money to the municipalities on provincial government guarantees. They state1 that they will not advance any money until the dominion acts jointly with the province in guaranteeing the loans. Has such a request been made to the dominion government and if so what action is being taken?	*


Hon. ROBERT WEIR (Minister of Agriculture) :: The hon. member's question will be taken as a notice. It will come under the Finance department, although it is primarily a provincial matter.



ILLUSTRATION STATION

[Stage Direction]
'On the orders of the day:
Mr. CAMERON R. McINTOSH (North Battleford): On Monday, March 18, I inquired of the Minister of Agriculture whether he was considering the establishing of another illustration station north of the North Saskatchewan river in northwestern Saskatchewan. He did not have the information that day but he promised an investigation and reply. He has not yet given the reply. Can he give it to-day?
Robert Weir: No. I have not the information at hand but I shall be glad to send it to the hon. member.



THE BUDGET


[Stage Direction]
The house resumed from Friday, March 22, consideration of the motion of Hon. E. N. Rhodes ^Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Hon. J. L. RALSTON (Shelburne-Yar-mouth):: With those on this side of the
house I have listened, as we always listen, with a great deal of pleasure to my hon. friend the Minister of Finance (Mr. Rhodes) in the presentation of his annual budget

The Budget-Mr. Ralston
speech. We listened this time with perhaps rather more interest, because we realized that the Minister of Finance was playing the leading role in the farewell performance of this government in that annual play of lights and shadows which is called the budget. I wish to congratulate my hon. friend, as I always can, on the way in which he filled the role. He lived up to the best traditions of the high office which he occupies. But I do feel that when the time comes for the authors of the piece-and after all many a good actor is spoiled by the lines he is given-for his collaborators, his colleagues in the government, to come before the curtain, the results in the nine by-elections which have already taken place and in the four provincial elections indicate pretty well the reception which they will get.
My hon. friend's speech was, if I may say so without offence, a bit dreary. I noticed a number of hon. members opposite who succumbed to the arms of Morpheus during its delivery and there may also have been those on this side who did likewise; I do not know. But there was to those of us who sit on this side of the house at least one very interesting feature of the budget, and that was the indication which ran like a red thread through the whole speech that at long last the government had come to realize that the trade and tariff policies which had been nearly the ruination of this country for the past four years had been futile. We were reminded-and I shall compare portions of what my hon. friend said in his budget speech with them1-of some utterances which were made just before the last election and which were couched1 in an entirely different tone from that employed by my hon. friend the other afternoon. I refer to the speech of the Prime Minister at Vancouver when he said:
If Mr. Mackenzie King thinks I will not so build up our agricultural and industrial life that its strength will drive our products into the markets of the world, then he is wrong. For that I will do. If he thinks I will not establish new markets for these products, strive with all my heart to retain them, drive our products with all my power into new markets, into old markets, into reluctant markets, he is wrong. For that I will do.


Some hon. MEMBERS:: Hear, bear.


James Layton Ralston: If my hon. friends will applaud-what is the fact-that in the last year the total trade of Canada was just one-half the average trade of the last five years of Liberal rule, they will realize how successful that driving has been. This is another speech
made in Winnipeg when he said addressing the farmers:	.
Tell me, when did free trade fight for you? You say tariffs are only for the manufacturers.
I will make them fight for you as well. I will use them to blast a way into the markets that have been closed to you.
And then at Victoria he said:
It is true we must have foreign markets-


Some hon. MEMBERS:: Hear, hear.


James Layton Ralston: There are signs of conversion even across the way among my hon. friends.
It is true we must have foreign markets, and as I said the other evening we will blast a way to those markets on a worldwide basis with any exportable surpluses. We do not have to worry about that.
What a change there has been. After these speeches the Prime Minister went to Great Britain in 1932 with his policy of blasting a way into the markets of the world, having made a ten per cent increase in tariffs before he went, and demanded that they must take steps without delay; that there was no room for compromise; that it was a time for plain speaking; that they must decide once and for all, and my right hon. friend with his musket on his shoulder, a machine gun under one arm and an ammonal tube under the other started out to blast a way into the markets of the world. The government put up tariffs; in 1930 they raised the tariff on one hundred and six items; in 1931 on a hundred and twenty-nine items and in 1932 on one hundred and thirty-eight items or a tariff increase on three hundred and seventy-three items altogether. They invented a new form of dumping duty, a provision whereby valuations for duty purposes should be based not on the domestic price of the goods which were being imported but on the cost in this country. That however was not good enough and they changed it next year so that valuations need have no principle, no standard whatever in order to be fixed by the Minister of National Revenue. They put on exchange dumping and they provided for seasonal valuations; they did everything they could to provide for exchange controls and invented every possible device by which the business men and consumers of this country might be irritated. That was all done as a means of blasting a way into the markets of the world. Now, having led the world in that, having taken a place in the vanguard of economic nationalism, because that is what they did, having
The Budget-Mr. Ralston

proclaimed the doctrine of Canada first, they come here in 1935 with the Minister ol Finance giving utterance to these words:
The unsatisfactory conditions in agriculture and certain other primary industries are in the main due to the low level of international trade resulting from the spread throughout the world of exaggerated economic nationalism, excessive interferences with trade through quotas and exchange controls, and fluctuating currencies.
il say that we welcome this budget in that it indicates at least a last-minute repentance, a last-minute change, an admission now that the tariff policies which were laid down in 1930, 1931, and 1932 were wrong.


Mr. DURAXLEAU:: Not at all.


James Layton Ralston: The Minister of Finance in the budget speech mentioned in one place :
The obstinate adherence to extreme policies of economic nationalism.
But he is not alone in that; his right hon. leader went to Kingston the other night where he is reported in the Ottawa Journal of February 21 to have said:
With the Aladdin lamp of modern production at their elbow, with large sections of their population in want, tariff barriers are erected, quotas established, exchanges controlled, in an ever-failing effort to restore the productive machine by creating a semblance of scarcity.
With all due respect, to hear this government rebuke economic nationalism sounds extremely like Satan rebuking sin. Could one imagine a more complete turnover than that which is evidenced by the sentiments in the budget speech, by the boasts which are being made, not about blasting our way into the markets of the world, but about reductions in duties and apologies for increases in tariffs on the ground that they are made on the recommendation of the tariff board? That does not sound very much like the government of a few years ago. To-day the order of the hour is to see how many duties can be reduced. Why? In order to curry favour with the people of the Dominion of Canada who realize that the avenues of trade have been blocked for the last four years, resulting in this country being reduced to its present condition. That is one of the things which is interesting in this budget. Then, in order that my hon. friend may indicate how much interested the government has suddenly become in international trade, you will find in the speech reference to negotiations with the United States. The minister boasts of reductions in tariffs. I will undertake to say that very seldom have you found a Tory
Mr. Ralston.]
budget speech boasting about reductions in
tariffs. But on page 1988 you find this:
Reference to the fact that to-day's resolutions add no fewer than twenty important commodities to the free list under the British preferential tariff provides an opportunity to point to the record of this government in that regard.


Some hon. MEMBERS:: Hear, hear.


Mr. MOTHERWELL:: Too late.


James Layton Ralston: As my hon. friend the former Minister of Agriculture (Mr. Motherwell) says, it is a bit too late.


An hon. MEMBER:: Don't you hate it.


James Layton Ralston: I wonder if it has anything to do with elections? I wonder if it is part of the reform program? I wonder if it has been induced by the results of the by-elections last September? Have they caused this government to see the error of its ways and to realize that the thing to do is to remove the barriers to trade rather than put up others? It is possible.
I want for a moment to make an examination of one or two items in the tariff to see whether close examination reveals a real change of heart, or whether like other features of the reform program it is mostly on the surface and by way of pious phrases. The woollen schedule has interested the people of Canada for the last two years particularly. The woollen schedule includes goods used by those engaged in the primary industries, by the ordinary citizens of the dominion. The woollen industry has been the subject of representations to the government and to the tariff board. In 1932 I pressed on the government one particular item in the woollen schedule, item 554 of the tariff, as to which I contended that the duty under the British preference was practically 61 per cent on most goods coming under that item. That was an inclusive item which covered clothing and material used in clothing for the ordinary individual in this country. Why do I say that the duty was 60 or 61 per cent? Under the British preference the duty was 27i, per cent ad valorem and added to that was 18J cents per pound specific duty. Taking the cost of the average material under that item used by the average man it worked out at 61 per cent. What do we find under this budget? Three of the forty-seven items on which there is a reduction under the British preference have to do with the woollen schedule. And what is the reduction under the professions made by my hon. friend in respect to his conversion to lower tariffs? The 27J per cent ad valorem still remains

The Budget-Mr. Ralston
on this item, but the specific duty has been reduced, the 18J cents per pound now becomes 17 cents. A reduction of li cents per pound. I made inquiry and I am sure that it does not mean more than 2 per cent reduction, and it may not mean more than 1 per cent. So I think I am correct in saying that in respect to at least some items in this schedule, which is a most important one to the average people of this country, there are shown no very substantial " works meet for repentance." The Minister of Finance took up the time of the house putting these three items in the schedule and calling attention to the reductions which had been made. I call attention to the hollowness of those reductions, when one comes to compare them with the tariffs that existed before.
I find another interesting item; overcoats for fishermen, farmers, miners, lumbermen, get only 1 per cent reduction, but overcoats for tennis balls go on the free list altogether. They had 27J per cent ad valorem against them and 18J cents per pound specific, but now Melton cloth to cover tennis balls has been put on the free list as far as the British preference is concerned. That is the gesture my hon. friend makes to the people of this country on the woollen schedule.
I find another class of articles which have been put on the free list, toy construction sets. I understand that in the course of a year there are perhaps 825,000 to $30,000 worth of those goods coming in; not a very large item. The question has occurred to some on this side of the house: is it possible that this has something to do with the government's relief construction program, that these toy construction sets are to be used in connection with that toy relief bill on which $40,000,000 was voted last year and in connection with which only $8,000,000 has been spent? I submit that taking items like the woollen schedule and toy construction sets and counting them as reductions would rather indicate that this program is very much related to that reform program, and that there is just about as much substance in this reduction of tariffs and about as much relief to the consumer as there is to the aid to be given the taxpayers of the Dominion of Canada by their national economic advisory council that is going to sit twice every year as part of the reform program. Or there is going to be just as much benefit to the consumers of 'Canada from these nominal reductions as there is to the working man who is out of a job to-day by reason of the fact that there is going to be an unemployment insurance act on the statute books whereby provided he has paid contributions for forty weeks he may be able to get some insurance for a few weeks when he is out of work.
I suggest, Mr. Speaker, that perhaps one might say without offence that this whole program of reform and of tariff reductions takes somewhat the form of a make believe program. It is a sort of "let's pretend" reduction and the budget itself as far as reductions in tariff are concerned could, I think, fairly be classed as a make believe budget.
I notice another item. I notice that slipper cloth is substantially reduced.


Mr. VENIOT:: For the sleepers.


James Layton Ralston: I think there will be lots of opportunity for the use of carpet slippers on the part of my hon. friends opposite after the next election, when they may warm their feet by the winter fire instead of coming here. Possibly it may have been self-interest to some extent, not at all corrupt self-interest, which influenced the reduction of that particular item. We on this side of the house submit that that tendency, that feverish anxiety which is suggested in the budget regarding international trade and the confession of the undesirability of economic nationalism, is a belated and ludicrous attempt to make the people of Canada believe that the government have been converted.
Turning now for a moment to the matter of an agreement with the United States, my hon. friend the Minister of Finance took a good deal of space in his budget speech to discuss negotiations with the United States. There was a time when negotiations with the United States were not to be mentioned among Christians, particularly on the opposite side of the house. The right hon. Prime Minister in 1911 is reported in Hansard, 1911, on page 23, as saying:
One of the strongest reasons I had for opposing the reciprocity agreement was that it threw into the melting pot for solution a question that involved a problem of patriotism.
Yet to-day they are engaged in negotiations with that country with the problem of patriotism still before them.


Mr. GOTT:: What year was that?


James Layton Ralston: The year 1911. It will be recalled that a gentleman who for many years occupied a front seat on the other side of the house and who unfortunately is gone from us now, said on more than one occasion,
The Budget-Mr. Ralston

and publicly too, that he believed it was a serious thing for the Dominion of Canada when reciprocity was defeated. In 1911 we had my right hon. friend the present leader of the government urging that a problem of patriotism was involved, and that therefore he was against reciprocity. Then 1933 came along, only a year ago. What was the attitude of my hon. friend the Minister of Finance then? Was he keen about an agreement with the United States? This is what he said in his budget speech a year ago:
We can only be ready and willing to avail ourselves of any proposals that are fair and reasonable and not of such character which will involve injury to this country if they are speedily terminated.
At that time I urged my hon. friend to pursue negotiations. We pointed out to him, however, that we were afraid his hands were tied to a considerable extent by the Ottawa agreements, in view of the fact that on 159 items we had agreed to preserve the margin of preference to Great Britain and that therefore the duty had to remain as it was because of the fact that those items were on the free list to Great Britain. Last year my hon. friend was only ready and willing to avail himself of any proposals that were fair and reasonable; now there is the sound of going in the tops of the mulberry trees. Now, according to the budget speech, we are not simply ready and willing to avail ourselves of any proposals; we are the aggressors now; we are the ones who are anxious. The minister said:
These negotiations will be actively prosecuted by the government of Canada, and every possible step is being, and will be taken with the object in mind of effecting a satisfactory trade agreement having for its aim the lowering of trade barriers with consequent increased flow of trade resulting in mutual advantage.
That is very different from the static attitude of last year. I wonder if that has any reference at all to the by-elections of last September, and if that hitches up with the reform program and the reductions in duty which are mentioned in other parts of the budget. That, Mr. Speaker, indicates a complete change of front, and the ubiquitous minister to the United States is burning up axle grease and rails at the present time travelling back and forth, endeavouring to see if it is possible to effect some sort of agreement. I do not want to be discouraging, but I do not take too much stock in the eleventh hour activities of this government in connection with trade agreements, any more than the working people of this country are taking too much stock in the unemployment insurance measure which was brought down during

this session and which has proved to be such a hollow echo of the announcements made on the public platform. The people of this dominion have pretty well in mind the attitude of this government with regard to the exchange and tariff restrictions that have been imposed in the last three or four years. Business men will not soon forget the plight in which they found themselves and the desperate situation which resulted in employees being thrown on the streets because the business men could not because of the uncertainties of the tariff policy of this government make plans in order to carry on their enterprises. That point is made very effectively, not by anyone in politics but by a man who is known pretty well all over this dominion and respected by the business community. It appears in the annual address made by President McLeod of the Bank of Nova Scotia, which can be found in the Financial Post of January 26, 1935. He said:
I will not attempt to describe here the mesh of tariffs, quota regulations, manipulations of currencies, exchange controls and exchange clearing arrangements by means of which all international trade, including our own, is being hampered to-day. No language at my command could exaggerate the destructive influence of these restrictions or the need for removing them as soon as possible. All countries including our own have played a part in weaving this mesh of repressive measures. All are more or less responsible for the present obstacles to trade. All must cooperate in the removal of them_ if the commerce of nations is again to start moving freely.
It is still true to say that we are only moving in world commerce two-thirds of the goods that were so moved five years ago.
If Mr. McLeod were referring to Canada he would say only one-half.
It logically follows from this that a large proportion of the workers employed in the world's export industries five years ago- workers who should now be making goods for exchange one with another-remain unemployed.
That is the situation in Canada. If my hon. friends on the other side had devoted themselves a little more assiduously to keeping the channels of trade open they would not have had the railway deficits and the special grants for unemployment relief that they have had.
Now, Mr. Speaker, I want to refer to a less sombre picture presented by my hon. friend in his budget speech; that is the reference which he makes to improved conditions in this country. That should have awakened the sleepers on his side of the house. The minister claimed that business was improving, and we

The Budget-Mr. Ralston
on this side say Amen, so mote it be. But obviously there ought to be some time when gains should be registered. We cannot go along all the time at the very bottom, and while it is a matter of satisfaction to know that our industrial .production is increasing in physical volume it seems to me we should make some comparison with countries other than ourselves. It is no use for us to go down into the sub-cellar and then, because we get to the first floor of our own house, say we are making progress. Let us compare ourselves with our neighbours all around us. In regard to the physical volume of production the best my hon. friend can say is we have actually reached the position we occupied last May; in other words, we are not losing much. Last May, he says, we were in the position we occupy to-day so far as physical volume is concerned; we went down, and now we are up again. All right; let us praise anyone who is entitled to praise for that, but it certainly does not indicate a very substantial advance. I submit that comparisons with other countries are perhaps more informative to Canadians who want to know the truth. My hon. friend makes comparisons with other countries; at page 2126 of unrevised Hansard he compares industrial production in Canada with that in other countries, but he makes a most peculiar comparison. He does not compare the volume of industrial production in Canada with other countries; he does not compare the amount of increase in industrial production in Canada with that in other countries. What he does is this: He says "I take January 1, 1933; I take an index figure as to the volume of industrial production in each of the countries referred to, and then I take, not the actual increase, but a percentage of the increase, and I say that Canada heads the list." Let us be glad that Canada does head the list in that respect, Mr. Speaker; but whether we can really rejoice depends on what position Canada occupied on January 1, 1933. Was she on a par with these other countries? If she was, and if her physical volume of production increased by a greater percentage than the others, then she is outstripping them.
I obtained the figures on industrial production as of January 1, 1933, the very figures used by my hon. friend, and here they are. Mr. Speaker, I call your attention to the fact that this shows that Canada was next to the bottom among the sixteen countries for which figures are given. If Canada was practically at the bottom is it any great wonder that Canada improved more than the others, if
she was going to keep her place in world trade at all? Yet the only comparison given by my hon. friend the Minister of Finance with regard to Canada's progress is a comparison with other countries taking Canada as at January 1, 1933, when she was next to the bottom in industrial production. Then he says she has improved more than the rest. In order to place it on record so that there may be no question I give the indexes of the industrial production in leading countries of the world as of January 1, 1933:
Japan	 124.1
Chile	 120.3
Norway	 105.0
Denmark	 102.9
United Kingdom	 89.9
Sweden	 83.7
France	 78.7
Netherlands	 76.6
Italy	 70.9
Belgium	 69.5
Germany	 62.9
Czechoslovakia	 61.7
Austria	 60.6
United States	 58.6
Canada	 52.8
Poland	 52.5
That, Mr. Speaker, gives us a rather illuminating idea of the value of the comparison my hon. friend made, and in connection with which he exhausted a whole paragraph in the budget speech, when he placed on Tecord the percentage increase of Canada as compared with these other countries since January 1, 1933.
I do wish to give one or two comparisons which it seems to me are informative and which, I am sorry to say, do not give quite the same result so far as this country is concerned. I do not know what other people may think-and I must say I have heard a good deal about home markets-but I can never quite get over the idea that one of Canada's first and greatest concerns is her export trade. I have before me a comparison between the export trade of Canada and that of other countries of the world. I have not taken only one date. I have however taken the year 1932, and I have compared the increase in volume of exports which she has had as compared with the increase of other countries. What do I find? I find that between the years 1932 and 1934, out of eighteen countries Canada stands eighth. In other words seven countries have shown a greater recovery in exports between 1932 and 1934 than Canada has shown. That is not a bad position for Canada to hold. She is

The Budget-Mr. Ralston

eighth, while there are seven countries with a position better than that of Canada. I have taken the figures for the following countries:	The Argentine, Australia, Belgium,
British India, Canada, Denmark, France,
Germany, Italy, Japan, The Netherlands, New Zealand, Norway, Sweden, Switzerland, the Union of South Africa, the United Kingdom, the United States. The exports in thousands of dollars are as follows:
Dominion Bureau of Statistics-External Trade Branch Memorandum Showing
Domestic Exports of Principal Important Trading Countries of the World (Calendar Years, 1932 and 1934)
1932	1934	Percentage inc. ( + ) dec. ( -) 1934 compared with 1932Countries- [DOT]	(In thousands of Canadian dollars)	%Argentina	
376,358	374,763	- 0.4Australia	
298,705	391,559	+31.1Belgium	
468,300	632,582	+35.1British India	
410,157	558,347	+36.1Canada	652,887	+ 32.2Denmark	261,027	+ 12.7France	
876,349	1,158,300	+32.2Germany	1,624,896	+ 5.0Italy	443,674	+ 11.9Japan	630,547	+ 43.1Netherlands	474,797	+22.6New Zealand	187,903	+ 53.5Norway	143,043	+24.7Sweden	333,195	+ 67.8Switzerland	270,559	+ 53.3Union of South Africa	
367,781	387,542	+ 5.4United Kingdom	1,976,814	+36.1United State*	2,080,946	+ 16.2
In the last column of the statement which I shall hand the reporter the percentage of increase is shown, and Canada stands eighth in the list. These percentages are, in part:
Per cent
1.	Sweden	
67.82.	New Zealand	
53.53.	Switzerland	
53.34.	Japan	
43.15.	United Kingdom	
36.16.	British India	
36.17.	Belgium	
35.18.	Canada	
32.2
I shall not content myself with simply taking the year 1932. The year 1928 is supposed to have been a year when world trade was fairly standard. One would of course expect some reduction in exports in 1934 as compared with the year 1928. I have had a table made up showing the reduction in exports of these same countries in 1934 as compared with the exports in 1928. Does Canada lead in having the lowest reduction in exports,
as my hon. friend would suggest, in connection with industrial production? No, I am sorry to say she does not. In this table I find that Canada comes fifteenth, and that out of eighteen countries there were fourteen which had less reduction in exports from 1928 than had Canada.
That it seems to me is a disturbing factor, because Canada is a great exporting nation. When you find Canada fifteenth in export trade in 1934 as compared with the year 1928, you must come to the conclusion she is not attaining the position in regard to export trade which my hon. friend would have this house and country believe. This table, too, is prepared by the Dominion Bureau of Statistics, external branch, and if the house would permit I should like to place it on record without having read it.


Pierre Édouard Blondin: Shall consent be given?


Some hon. MEMBERS:: Yes.


James Layton Ralston: The table follows:

The Budget-Mr. Ralston
Dominion Bureau of Statistics-External Trade Branch
Memorandum Showing
Domestic Exports of Principal Important Trading Countries of the World (Calendar years, 1928 and 1934)
Percentage Relation of Exports 1934 compared
1928	1934 with 1928
(In thousands of Canadian dollars) %
Countries
Argentina	
Australia	
Belgium	
British India	
Canada	
Denmark	
Prance	
Germany	
Italy	
Japan	
Netherlands	
New Zealand	
Norway	
Sweden	
Switzerland	
Union of South Africa.
United Kingdom	
United States	
987,200
646.400
840.400 1,209,900
1.349.700
412.400 2,012,800 2.721.000
762,000
888.400
799.600
263.600 178,800
420.300
411.300 375,500
3.520.700
5.029.700
374.800
391.600
632.600 558,300
652.900 261,000
1,158,300
1.624.900 443,700
630.500
474.800
187.900 143,000 333,200
270.600
387.500 1,976,800
2.080.900
60-6
46-
63-
59-
58-:
59-3
80-0
65-8
56-1
Note.-In the ease of the Union of South Africa, the exports include gold bullion, whereas in the case of Canada, the gold bullion is excluded.
As you will observe from this table there are fourteen out of the eighteen countries mentioned which had in 1934 a higher percentage of exports than Canada as compared with exports in 1928.
Then I have had prepared also by the bureau of statistics, a comparison between 1930 and 1934. This time I have not taken
in simply the export trade but I have taken the total trade. In this list I believe there are no figures for the Union of South Africa. Of the seventeen remaining countries I find Canada coming fifteenth, so far as a comparison of total trade with the year 1930 is concerned.
Dominion Bureau of Statistics-External Trade Branch Memorandum Showing
Total Trade of the Principal Important Trading Countries of the World (Calendar Years, 1930 and 1934)
Percentage inc. ( + ) dec. ( -) 1934 compared
1932	1934	with 1930Countries-	(In thousands of Canadian dollars)	%Argentina	
1,305,900	664,000	-49.2Australia	
882,700	722,200	-18.2Belgium	
1,597,300	1.279,500	-19.9British India	
1,613,500	1,029,100	-36.2Canada	
1,874,900	1,159,300	-38.2Denmark	
844,800-	549,800	-34.9France	
3,740,300	2.657,400	-29.0Germany	
5,169,700	3,360,700	-35.0Italy	
1,542,600	1,093,600	-29.1Japan	
1,456,300	1,293,700	-11.2Netherlands	
1,666,500	1,167,200	-30.0New Zealand	
419,300	341,100	-18.7Norway	
464,100	325,200	- 29.9Sweden	
858,600	667,900	-22.2Switzerland	
860,200	731,700	-14.9United Kingdom	7,438,300	5,375,700	-27.7United States	
6,781,300	3,704,200	-45.4
Note.-Impossible to furnish information respecting the total trade of the Union of South Africa, as the import figures for the calendar year 1934 are not available.
2102
The Budget-Mr. Ralston


Mr. CHAPLIN:: You would never do that!


James Layton Ralston: No; but I want to say if that is the case I have fairly good company. I should like to read a paragraph from a speech given over the radio on January 3, 1935, by the Prime Minister, in which he stated:
Canadians are not those from whom unpleasant facts should be concealed. The people of this country were born optimists, but they were born realists as well. They demand the truth, however disturbing it may be. And the truth is disturbing. The world is in tragic circumstances. The signs of recovery are few and doubtful. The signs of trouble are many, and they do not lessen.
I put these observations, Mr. Speaker, beside the optimistic references of the Minister of Finance, and I ask hon. members as Canadians to look the facts in the face and realize that it takes more than the Minister's table of industrial production showing comparisons with January 1, 1933, to show that all is well in the Dominion of Canada.
Another passage in the budget speech deals with the trade of Canada, and in this regard my hon. friend has been more generous than is his custom. This year he has devoted some space to it for the reason, I think, that this government is becoming alive to the fact that it is absolutely necessary to take some interest in the promotion of trade. The budget speech for this year does omit-and it is a rather important factor, it seems to me-the trade for the years 1926 to 1930. The table my hon. friend has placed on record-and I can understand why he did it-is somewhat difficult to follow. It is a table for the eleven months trade ending February 28, 1935. The reason for only eleven months being included is the fact that March had not been completed. I suggest to him that it would have been much easier for us to follow these figures if an estimate of March trade had been based on one-eleventh of the trade of the previous eleven months. This would be similar to his estimates of expenditures and revenue which are made based on the previous year. In order to complete this portion of the budget speech I have had prepared by the Dominion Bureau of Statistics a table which shows the total imports, the total exports and the total trade year by year for a five year period ending March 31, 1930, and for a five year period ending March 31, 1935. The figures for the year 1935 have been estimated as one month is not yet complete. This table is as follows:

The Budget-Mr. Ralston
Dominion Bureau of Statistics-External Trade Brandi
Memorandum Showing
Canada's Total Imports and Domestic Exports
		Total		Balance of
Years ended	Total	domestic	Total	exports overMarch 31	imports	exports	trade	imports+ or-1926	. $ 927.328,732	$ 1.315,355,791	$ 2,242,684,523	$ 388,027,0591927	. 1,030,892,505	1,252,157,506	2,283,050,011	221,265,0011928	. 1,108,956,466	1,228,349.343	2.337 A05,809	119,392,8771929	. 1.265,679,091	1,363,709,672	2,629,388.763	98,030,5811930	. 1,248,273,582	1,120,258,302	2,368,531,884	- 128,015,280Total	. 5,581,130,376	6,279,830,614	11,860,960,990	net + 69S,700,238Five year average..	. 1,116,226,073	1,255,966,123	2,372,192,198	1931	. 90-6,612,695	799,742,667	1,706,355,362	- 106,870,0281932	. 578,503,904	576,344,302	1.154,848,206	- 2,159,6021933	. 406.383,744	473,799.955	880,183,699	67,416,2111934	. 433,798,625	579,343,145	1.013.141.770	145.544,5201935 (estimate) . . .	. 532,579,733	667,816,424	1,200,396,157	135,236,501Total	. 2,857,878,701	3,097,046,493	5,954,925,194	net + 239,167,792Five year average..	. 571,575,740	619,409,298	1,190,985,038	
Note. The two right hand columns do not appear on the Bureau of Statistics statement- they are computations from the other figures.
Here is a summary of the table divided into two five year periods:
Five year period ending March 31, 1930
Imports into Canada.. ..	$ 5,581,130.376
Total exports	 6,279,830,614
Total trade	 11,860,960,990
Average annual total trade	2,372,192,198
Five year period ending March 31, 1935 Imports into Canada.. ..	$ 2,857,878,701
Total exports	 3,097,046,493
Total trade	 5,954,925,194
Average annual total trade	1,190,985,038
It will be noted that I have not just taken, say the year 1929 or 1930 to compare with 1935; I have taken a five year period which goes back to 1926, and these figures show that the trade under the present government for five years was just one-half the trade for a similar period under the previous government.


Mr. HANSON (York-Sunbury):: What was the world trade average?


James Layton Ralston: I cannot give that but
I have given my hon. friend a few things to think about in connection with exports.


Richard Burpee Hanson: World trade fell from $66,000,000,000 to $25,000,000,000.


James Layton Ralston: My hon. friend will have an opportunity of making his speech and I think it will take all of his time to deal with the {joints I have raised in connection with the export trade of Canada. I have given, him sixteen countries to think about and he will see what the relative exports are for 1928 and 1935, 1932 and 1935 and the relative total trade for 1930 and 1935.
My hon. friend has made a point in connection with United Kingdom trade. I find -perhaps the Minister of Trade and Commerce (Mr. Hanson) has these figures in his department-that our share of United Kingdom imports for the year ending September 30, 1932, just before the Ottawa agreements were made, was 5-20 while our share for the year ending September 30, 1934. was 6-33 In other words there was an improvement of one and one-half per cent. My hon. friends will say that this was due to the Ottawa agreements. It was not a very large increase and I think when a comparison is made between 1932 and 1934 it will be found that there are obvious causes other than the Ottawa agreements ' for the increase in imports into Great Britain from Canada. In the first place the buying power of Great Britain has been immeasurably improved by the rise of the pound; in the second place, the financial position of the British people was greatly improved in 1934 as compared with 1932.	If my
hon. friends are so proud of the Ottawa agreements, why has the motion of the hon. member for Toronto-Searborough (Mr. Harris) been allowed to die? That motion offered an opportunity for my hon. friends to have a vote on these agreements. Although I understood that we were to get that opportunity, it has not come. All that we get in the budget speech are a few general statements with regard to the increased trade with Great Britain. The difficulty is that my hon. friends know perfectly well that if the Dunning budget of 1930 had been in effect every item of trade which has moved
The Budget-Mr. Ralston

between Great Britain and this country would have moved under the generous provisions of that budget; it would not have required any bargaining at Ottawa to insure the flow of trade between these two great countries. From 1920 on we had a two to one preference as far as our trade with Great (Britain was concerned; we sold them $4,000,000,000 worth of goods and we bought only $2,000,000,000 worth from them. Our relations with Great Britain were extremely good. But then my hon. friends came along with their bargaining attitude. The Prime Minister when he was leader of the opposition used to stand in his place and declare that Great Britain would get nothing from us unless there was a quid for our quo; we would give nothing unless Great Britain gave us something in return. Where has that policy gone in the light of this budget? This seems to be another recantation. We find in this budget that forty-seven items in the British preference have been reduced without Great Britain being asked for anything in return. This budget indicates a complete repudiation of that policy which was advocated so strenuously by the present government from this side of the house. My friends have given these things and they do not indicate that Great Britain is to give anything for these concessions, comparatively small though they may be. This is another instance in which they have apparently seen the light.
Practically every year hon, friends opposite applaud the fact that the Minister of Finance is able to show a favourable balance of trade. This balance was $134,000,000 this year and $145,000,000 last year. I suppose I must repeat myself, but I contend as I have contended before that the benefits of a balance of trade depend altogether upon how that balance is brought about. If it is brought about by reason of larger exports it is a good thing, because then you have the substance wherewith to buy and trade. But if it is brought about by starving yourself for the things you need through a restriction of imports, then the balance of trade is nothing to boast of. This is the sort of balance which is represented by this budget. I notice the Minister of Trade and Commerce is taking notes and I assume he is to follow me in this debate. I should like to quote from a publication issued by his own bureau. In a statement covering the years 1926 to 1932 this publication states that "Balance of trade figures are frequently misinterpreted due to the persistence of the doctrine long ago exploded that a nation's trade is necessarily in a healthy state when exports exceed imports, necessitating the import of gold to make up the difference." I

should also like to quote from another publication which I believe some of my hon. friends will regard as an authority. I quote from the Financial Post of February 9, 1935, as follows:
Most of the debtor countries of the world have increased their so-called favourable balances of trade since the depression began. No doubt, in all of these countries, the politicians are pointing to this achievement as an evidence of the prosperity created by the particular .policies invoked by those politicians. A favourable balance of trade, if it were the result of a large volume of inward and outward transactions, might be something to crow over. But a very small total trade showing a favourable balance is no evidence in itself of prosperity in a country.
And further down:
But it is suggested that the current tendency to use a favourable balance of merchandise trade as an index of a country's prosperity is based on economic errors so gross as to be something of a political crime when politicians and after-dinner speakers utilize the device.
I submit that in view of the fact that the average total trade of this country for the last five year period has been only one-half of the average total trade for the previous five year period and because this favourable balance of trade has been produced by a restriction of imports rather than by an increase of exports, it is not necessarily evidence of a healthy state of trade in this country.
I pass over very briefly a matter to which I have referred at greater length on previous occasions. My hon. friend and his predecessor have repeatedly indulged in predictions as to what might be the result of the year's transactions. The hon. gentleman's predecessor, the Prime Minister, used to lecture those of us on this side of the house with regard to the responsibility of a Minister of Finance who ventured a forecast which proved to be in any substantial measure out when the results of the year's operations were known. He indicated that the Chancellor of the Exchequer was held to the strictest accounting in connection with any predictions he made. As I have had occasion to point out in this house before, my right hon. friend in 1931 predicted that the figures which he presented would indicate a balancing of the budget by a substantial margin. Well, he had a deficit of $81,000,000. In 1932 the present minister predicted that " reductions in expenditure and probable additions to revenue would represent a complete balancing of the budget on ordinary account " -these are his words-and he had a deficit of $53,000,000. I left him in the hands of his leader. Then in 1933 he predicted a surplus of $2,000,000 and he had a deficit on ordinary account alone of $24,100,000. This year he has

The Budget-Mr. Ralston
done a little better; gradually he has come up the scale. Last year he predicted a surplus of $8,800,000 to apply on extraordinary expenditures, and he reports a surplus of $2,700,000 on what he calls ordinary account. You can have surpluses if you leave out enough obligations, and to achieve his result my hon. friend has left out unemployment relief, railways, the construction program-in fact, he has left out about everything except what could be regarded as bare operating expenses. It is very different from the days when budgets were presented by the predecessor of the hon. gentleman and of the Prime Minister, when the accounts showed definite surpluses year after year, piling up to the amount of $257,000,000. All that my hon. friend says about his estimate is this. He says, "After we get through we have a deficit of $117,700,000." But he tells us to cheer up because the deficit for the previous year was $133,500,000, and that this year's figures indicate an over all improvement of $15,800,000. In other words, although we are not better we are less bad-$1:17,000,000 deficit this year but last year it was worse. I have had occasion before to deal with the question of the public debt, and on this occasion I feel-in fact, I know-that the situation is much more serious than it has ever been in the past. My hon. friend has a way of computing increases in the debt which may >be all right so far as bookkeeping is concerned but which, according to some whom he regards as very high authorities, is absolutely incorrect as representing the accurate debt condition of the country.
My hon. friend shows in his budget speech this year an increase in the net debt, since the end of 1929-30, of $669,900,000, and he says that, included in that, is $83,000,000 for the year 1930-31. And this, he says, should not be charged to the government. I say to him, what I said to his leader in 1931: You are responsible for the year 1930-31 except for the first four months, inasmuch as you had full opportunity to cancel any expenditures you wanted to cancel. All that had been done was that parliament had voted the money.


Mr. MANION:: We cancelled $75,000,000
of wild railway expenditures.


James Layton Ralston: My hon. friend cancelled $75,000,000 on account of railways, which he and his friend the former Minister of Trade and Commerce, but particularly the latter* voted for unanimously in the committee.


Robert James Manion: The matter was never put to a vote, as it happens.


James Layton Ralston: And Sir Henry Thornton had received the congratulations of the hon. gentleman's colleague.


Robert James Manion: Not from me.


James Layton Ralston: No. My hon. friend is
now trying to get out of it, like others over there, but there was a time when the Canadian National was taken to the bosom of the government opposite and regarded as their baby. Only since it began to have large deficits have they decided to shift the responsibility to others.


Robert James Manion: There were large deficits
all through your regime.


James Layton Ralston: The question is whether
the deficit of $83,000,000 for the year 1930-31 should be charged to my hon. friend's administration. My hon. friend, as usual, has included it; he has not quibbled about it, because as I have pointed out, after the first four months my hon. friends had full charge, and the Minister of Railways confirms me now when he says that they cut out many items amounting to $75,000,000. We have therefore no quarrel on that score. They had control and they took control, and if there was a deficit at the end of the year they are responsible for it. The Liberal budget for 1930-31 had included $440,000,000. Now note. This budget, according to the Minister of Railways, was cut down by $75,000,000, and the next year the government, of which the Minister of Railways was a member, budgeted not for $440,000,000 less $75,000,000 but for $430,000,000, only $10,000,000 less than the Liberals had done the year before. So that it would rather indicate that they were fairly well satisfied with the 1930-31 budget that had been brought down by the Liberals.
The question I put to you, Mr. Speaker, is this: Is $669,900,000 the correct figure foi the increase in the debt including the 1930-31 year as being under the Conservative administration? I say that, on the authority of the Prime Minister and on the authority of the hon. gentleman who occupies the position of Minister of Justice at the present time, that is not the correct figure. My hon. friend the Minister of Justice, in a speech in 1929, when he was occupying the position I now occupy, made this statement in reply to the budget:
We have never had very serious controversy about the funded debt of the country, but I am glad to note that in his speech last Friday the minister for the first time took serious account of what we know as the funded or bonded debt or, as he put it in his remarks, the dead weight debt of the Dominion of Canada. That, after
The Budget-Mr. Ralston

all, is the important item in the financing of this country. The neit debt is not a matter of the greatest consequence; in England they never refer to it all. There they use the one term "dead weight debt," and I am glad that the minister has used that term on this occasion, because that is the debt which counts. lit is the amount for which the government of this country has issued in solemn form its bonds and obligations, signed, sealed and delivered, which bonds are now held by people who have invested in our securities. These bonds have to be paid at maturity, and in the meantime interest must be met. They therefore constitute the real burden which the people of this country are compelled to carry.
The net debt is comparatively unimportant; it is a matter very largely of bookkeeping and depends upon how you see fit to estimate the value of your assets. We have assets that are certainly good liquid assets, but we have a lot of assets in this country which we carry as non-active assets, and if you want to transfer some of these mouractive assets to the active list you can immediately decrease your net debt. It is. I say, a matter largely of bookkeeping. But the debt which counts is the dead weight debt.
Note that, Mr. Speaker, it is the "dead weight " debt which he says counts. Then the Prime Minister speaking from about the same position in 1928 said this, as reported in Hansard of that year on page 1246;
May I venture to point out, sir, that it should not be difficult to ascertain what the debt of the country is, and I Say further that there is no need to talk about "net" debt or "gross" debt. The proper term to apply is funded debt, and the funded debt of Canada means "tlhe mortgage on the farm." Now if She mortgage on the farm is $5,000, payable the 1st of January, 1929. and you have in your current account at the bank $1,000 which must be used to pay taxes, for seed grain and various other demands, at the end of the year the $1,000 may be partly or wholly exhausted, but the mortgage on the farm still remains $5,000 and must be treated as such.
There are two hon. gentlemen who do not talk about net debt, and yet that is what the present Minister of Finance talks about all the time. He says that there is an increase in the net debt of $669,000,000 from 1930 to 1935. I quote these authorities as indicating that that is not the correct practice according to his own colleagues. These are some of the things which are included in assets as shown on the balance sheet on page 1984 of Hansard and which would enter into the calculation of the net debt;
Loans to provinces	 $74,649,000
That is counted as a cash item. The question is whether those loans can be realized or not.
Loan to Roumania	 $23,969,000
That is counted as a cash asset.
Loams to harbour commissioners-
Montreal	 $58,519,000
Vancouver	 22,921,000
New Westminster	 275,000

Those are loans. Those are all included, and deductions are made for them in estimating the net debt. I want to be quite fair; on the other hand there are superannuation funds and cash, but the point is that there is a definite balance on the assets side due to the building up of items such as those I mentioned a moment ago.	*
If we take then the funded debt, the "mortgage on the farm," what is the increase in debt under this government? During the five years of Liberal rule from 1925 to 1930 there was a total reduction of $257,000,000; I will not give the odd thousands. The funded debt on March 31, was as follows:
Year	Amount
1930		 $2,194,000,000
1931		 2,319.000.000
1932		 2,501,000,000
Or an increase in two years of about $307,000,000.
1933		 $2,649,000,000
Or an increase of $455,000,000 from 1930 to 1933.
1934		 $2,789,000,000
Or an increase in the funded debt from 1930 to 1934 of about $594,000,000. The funded debt on March 31, 1935, according to the account submitted by my hon. friend, is $3,-
007,408,000,	or an increase over last year of about $218,000,000, or an increase from 1930 to 1935 of $812,061,000. The difference between $812,000,000, which is the increase in the funded debt, in the mortgage on the farm, and the $669,000,000 to which my hon. friend refers, is a mere matter of $143,000,000, and what is that between friends? The interest on the increased debt of $812,000,000 is, as the house will realize, something like $32,000,000 to $33,000,000, or $2.50 to $3 a head for every man, woman and child in the dominion. It means that the increase in the funded debt for this year, 1934-35, is the largest that has ever been under my right hon. friend's administration, or $218,000,000. Do you wonder that I say that the situation with regard to the debt is serious when we find an increase of $812,000,000 in five years in the funded "dead weight" debt of the dominion?
My hon. friends opposite have said something about conversion. The Minister of Finance in his budget speech spoke about conversion loans, saying that there has been a reduction in interest charges. That is so, but as is pointed out by the dominion statistician, Doctor Coats, in a letter to one of the members of parliament:

The Budget-Mr. Ralston
Refundings which have taken place in the past four years have reduced the interest charges upon previously existing national debt by something Like $14.600,001) although this has been largely offset by increases in principal of our national obligations.
We are all glad that the rate of interest has been reduced, but a conversion loan does not mean anything so far as relieving us of interest charges is concerned, if the next minute we start in to borrow more money. The conversion loan of which my hon. friend rather boasts in his budget speech is nothing new; all it means is that the government, just like an individual, finds the goods it has to sell have a favourable market and it goes out and .sells them at a higher price. There is no (magic about that; there is nothing but good business judgment. I remember that conversion loans were effected under the former administration by which some $5,000,000 of interest was saved. This is therefore not an extraordinary transaction. We congratulate the government on having made the conversion; it was the proper thing to do in order to reduce the interest rate, but there is nothing specially outstanding about it in the way of business acumen or financial skill. So, while the rate has been reduced, while we have been able to sell government bonds at a higher price, we have had to make more loans and [DOT]the result is that the reduction in our interest charges is largely nullified. But the point that troubles me and I believe troubles the .people generally is that the reason the government is able to get cheap money is that there is a lack of confidence by investors in industry and commercial enterprises. A government bond is the best thing the people can get and therefore they put their money into it. The banks are holding over fifty per cent of their liquid assets in government bonds at the present 'time and this money is not going into industry. Cheap money for the government means that confidence has been lost or has not been restored in connection with industrial and commercial enterprises. That is the point which should trouble Canadians although rejoicing in the fact that the interest rate is being reduced so far as our national debt is concerned. I would rather see relief from the interest loan brought about in the way it was in the five years before 1930 when it was accomplished by paying off principal, not leaving any hangover whatever, when $257,000,000 of public debt was paid off entirely and the interest load reduced accordingly.
In that same connection I want to discuss a matter which it seems to me ought to occupy almost paramountly the attention of the public authorities of this country, and that is this whole matter of public finance. I have had a statement prepared and I find that the public funded obligations of Canada are as
follows:
Dominion obligations-
Total funded debt	 $3,007,000,000
Guaranteed bonds	 987,000,000

Nearly four billion dollars.
Provincial obligations-
Bonded or debenture debt. ..	$1,224,000,000
Treasury bills	 110,000,000
1,334,000,000
Municipal obligations-
Bonded or debenture debt. ..	1,386,000,000
Total	 $6,714,000,000
All public finance, public indebtedness in this country.
I have also had prepared a statement showing the relative interest load borne by the residents of the different provinces in respect of that debt. I am not going to take the time of the house to read the individual columns, but I would like to read the total per capita interest load borne by the citizens of the various provinces in respect of the combined dominion, provincial and municipal debt. You will understand that these figures are not complete in some cases. I think in connection with both New Brunswick and Prince Edward Island they are not altogether complete, but so far as we can get them they are as follows:
Total per capita paid for interest by the residents per year
Prince Edward Island	 $16.10
Nova Scotia	 21.34
New Brunswick	 21.90
Quebec	 21.79
Ontario	 27.28
Manitoba	 26.69
Saskatchewan	 21.93
Alberta	 25.08
British Columbia	 30.27
My hon. friend has mentioned, for the purpose of drawing the attention of the country to it, a possible scheme for refunding or dealing in a broad and comprehensive way with the whole matter of the public finance of the dominion, and has raised the question whether or not that can be done by what he speaks of as a loan council, or whether it could be done better through the more elastic organization, and the assistance I presume he means, of the central bank. I say to him that I agree that there should be something done by way of collaboration, by way of consultation, with regard to public financing in Canada. I am doubtful, and I think he is, whether the provinces would agree to federal control of
The Budget-Mr. Ralston

finance. I think he makes that fairly clear in his speech. But I feel that there is a possibility of having some sort of organization whereby there will be, nob control, but whereby in the first instance there will be consultation and study and working together rather than a degree of rigidity or authority. The point is that the dominion authorities apparently have admitted that the finances of the provinces are of vital interest to the dominion. I am one who has not been so sure that that is correct. Sometimes I have felt that the Prime Minister-I speak of him particularly because he is taking special interest in these things-has gone perhaps further than was necessary in that regard. I feel satisfied as one citizen of the dominion that he went altogether too far in protecting the credit of the dominion when he gave guarantees for Newfoundland. Whether or not that applies to the guarantees for the provinces of Canada I am not prepared to say. But we have in these accounts this fact, that the dominion of Canada, for better or for worse, has admitted some interest in the credit of the provinces, in view of the fact that there have been guarantees given in respect of provincial obligations to the extent of $74,000,000. If that is the case I submit that the time has come for some concerted and definite and serious attempt to put the public finances of the dominion on a sounder basis. It may be that my hon. friend is correct, and that the Bank of Canada may afford a nucleus for that organization. I believe that the provinces will have to be willing and enthusiastic participants before the thing can be a success. Interest charges on municipal, provincial and federal obligations are all paid by the same people and out of the same pocket, there is no such thing as separating the citizen of the Dominion of 'Canada from the citizen of any province or of any municipality. They are all one and all pay these taxes. Obviously since there is a disparity between the interest load of the different provinces it may be possible that there is a difference in the borrowing power and in the advisability of borrowing on the part of the different provinces. In some provinces there may be a possibility of public works that are nearer self-liquidating and of more productive capacity than in others. But if the credit of the various component parts of the dominion is affected by the action of others then the financial operations of each are of concern to the others. And if the dominion is concerned with possible unsound finance of the provinces I think the provinces have a right to say as well that they are concerned with possible unsound finance of the dominion, and that they
I-Mr. Ralston.]
should meet in the first instance as willing and enthusiastic participants rather than simply to meet under federal authority.
I therefore submit that it would be good common sense, good business, good government, for all concerned to apply their minds to the formation of some organization, for which I have suggested for want of a better name, ithat of public finance council. In that connection I am not suggesting the setting up of any super board, I am speaking of an organization formed of representatives of those concerned. This council ought to have, first, the power and opportunity of considering the great problem of refunding and lightening the burden of interest on loans already effected; second, of considering the wisdom of further borrowings and the capacity of the citizens to carry the burden; third, the effect of further borrowings on the credit of the constituent members represented on this council; fourth, and this is most important, the orderly offering and marketing of public issues. We have seen too often the provinces, the municipalities and the dominion rushing to get to the money market first in order to catch the opportunity of getting rid of their issues, leaving the others to drag. Again it seems to me that such a council could well consider standards of administration and efficiency respecting not only capital but current expenditures. And I want to make this point; I have never been a believer in centralization, I believe rather in decentralization and in preserving the pride and esprit de corps of the provinces and the municipalities. But I believe in working together in sound consideration of common problems because the political divisions of this country cannot live to themselves alone any more than nations can. We have tried that experiment in recent years and found it a dismal failure. Therefore in connection with this particular passage in the budget speech I believe that the getting together of a representative body in Canada constituted to suit our particular conditions, would work not only without injury to the local esprit de corps but with distinct benefit to the pride, self-respect and self-confidence of the citizens of every part of the dominion.
Now I come to a more contentious subject, as indicated by the fact that my hon. friend the Minister of Railways rose a few moments ago. My hon. friend the Minister of Finance on this occasion, as he has previously and as have his predecessors, rather treats the Canadian National Railways as a drag on the wheels, as something which comes in at the last minute to take all the joy out of life, to

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take all the cream off the milk. In computing his deficit this year he first shows his surplus of I think $2,700,000, then proceeds to take off something for unemployment relief, something for capital expenditure, and1 for everything else, and finally brings in $48,000,000 for the Canadian National Railways as the last straw.
I submit that we cannot too often put before this house and the people of the country the position of the Canadian National Railways and of our railway problem. I am not going into it at length today, I- have discussed it before in this house, but I want to remind the house that the situation is this: There have been large commitments and advances by Canada on account of the roads which now comprise the Canadian National Railways; the Canadian National railway system is a combination, a conglomeration of what were regarded as almost junk railways, that it is as if you had taken three or four carts and taken a wheel off one,, a pair of shafts from another, a box off another and put them all together and made one cart and then proposed that that cart should do the work and pay the carrying charges of the four carts which originally composed it. It cannot be done. It is no use to set the Canadian National Railways up in a corner and say that that railway as a system is what is losing our money. It is not fair to the railway or to the finances of the country or to ourselves who have put the Canadian National Railways in that position. I say, as I said to the Minister of Railways, speaking of capital expenditure from 1921 to 1930, everyone in the house voted for it; everyone patted Sir Henry Thornton on the back; everyone-cities, municipalities, provinces, corporations, individuals and the dominion-was spending money, and the man who could spend the most money was the most popular man, the man who was doing the biggest things for his country. There is no use coming along now and talking about what has gone by; we all voted for it. Now the question is what we are going to do about it when the time comes to pay the bill.
My hon. friend the Minister of Justice (Mr. Guthrie) speaking from his place in this house in. 1928, at a time when the Canadian National Railways had a deficit of $5,516,000 after paying interest to the public, said at page 1122 of Hansard:
Nobody will pretend-not the Minister of Railways, for he knows too well, nor the Minister of Finance-that this government or any member of it is entitled to a particle of credit for the improved showing made in connection with the Canadian National Railways. The management of the road is supposed' to be entirely divorced from government control. It is under the absolute control, so far as management goes, of Sir Henry Thornton and his board,
without government interference, and they are entitled to the full credit for the result obtained -$125,090,060 of relief for the treasury of Canada in four years.... The real fact is that the finance minister and the Minister of Railways are endeavouring to appropriate to themselves the credit that is due to Sir Henry Thornton. They are endeavouring to bask in the reflected glory of the president of the Canadian National Railways without there being the slightest foundation for their claiming any credit for his achievement ... the point which I desire to make is this, that if credit be due to anyone in respect to the reduction of the net debt of the dominion, that credit is directly due to the management of the Canadian National Railways; for the improved showing which they have been able to make and for the relief which for the last four years they have been able to afford to the treasury of Canada. Without one move of the hand or one stroke of the pen by the finance minister or any of his colleagues, Sir Henry Thornton and his board have accomplished that feat, and to them credit is due, and to them the thanks of the country should be returned.
That was in 1928. Now I quote from Hansard for 1929, at page 742. In that year the result of the operations of the Canadian National Railways was a deficit of $3,185,000 after paying interest due the public. The present Minister of Justice (Mr. Guthrie) said:
The result of operations for last year was very gratifying, and T would ask the Minister of Finance to note that the treasury of this country has been relieved very substantially for the last four or five years through the successful operation of Canada's national railway system. On January 1, 1924, an announcement was made by the president that for the first time in its history the national system had produced a net revenue over operating expenses, for the year 1923, amounting to $4,155,000; in 1924 that revenue had increased to $18,000,000; in 1925, it had increased again to $33,000,000; in 1926 the revenue was $48,000,000; in 1927 it dropped' back to $42,000,000; and for 1928 we have the wonderful result of a surplus in net operating expenses amounting to $58,000,000. It will take $50,000,000 of that amount to pay the interest on the bonds which the public hold. I understand the management of the road will pay that interest this year, and will still have on hand a balance of $8,000,000 for other purposes.
That was the attitude in which the present Minister of Justice, representing the Conservative party, viewed the Canadian National Railways at that time. Before I am through I will give the house the benefit of another extract. They regarded it as the child of the management; they were congratulating the management on the way it was getting on. There was no talk then of spending too much.
These are the points, Mr. Speaker. First, these roads are a conglomeration of a number of bankrupt roads. Second, they are a combination of the policies of all parties,
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not of one party alone. The Minister of Railways has come to that conclusion himself ; he expressed that view in a speech he made in Ingersoll last fall. According to the report in the Toronto Globe of April 10, the minister said:
Turning to the railway situation in Canada, the minister reviewed the construction of the transcontinental line, declaring that each party should go fifty-fifty in the matter of blame for this.
All three transcontinental roads were the policies of everybody. I made that statement in the house on one occasion and someone interrupted to say that it was not so. After that I had occasion to look up the records, and I think I convinced even the doubters that that was the case, and that the three transcontinental railways were advocated and supported by no less a gentleman than the Prime Minister. Sir Robert Borden approved the building of a second road, another transcontinental railway, in the amendment which he moved to the Grand Trunk Pacific Act, in 1904. The Grand Trunk Pacific and the National Transcontinental were built soon after. In 1912-13 a Conservative government granted a subsidy in order to permit the completion of the Canadian Northern through to the coast. That made the third transcontinental railway. This is what my right hon. friend the present Prime Minister said during the course of that debate, according to Hansard for June 3, 1913, at page 11777:
Mr. Bennett: Do not we require a third transcontinental line as a spout for western grain? And hence is not the construction of the road from Fort William to the seaboard absolutely essential if the value of the other lines is to be maintained?
Then further down he said:
I suppose the hon. gentleman will admit that the railways had to run parallel; they went through the same pass; it was a physical necessity.
That is the road in connection with which my right hon. friend indicated that he almost felt ashamed, as he went past Sir Wilfrid Laurier's monument, to think how far Sir Wilfrid had gone astray in connection with the railway policy of this country. All three railway lines were advocated and supported by all parties in this country.
In the next place, Mr. Speaker, the advances by the government have been wiped out by common consent. Ini a passage which I will read in a moment or two, quoting from the remarks of the present Minister of Justice, my hon. friend regarded the money which was paid by this country for the roads making up the Canadian National Railways as a bookkeeping rMr. Ralston.!
item, and he thought no endeavour should be made to have it paid back. The sum of about $1,700,000,000 incurred when these roads were taken over before the Liberals came into power in 1922 is the big item in connection with our railway obligation. Fourth, the capital expenditures were approved by all parties in the house. Fifth, the revenue losses -and I want this to be noted-on the Canadian National are no greater than the revenue losses on the other great railway system in this country; they run along neck and neck. The railway is well operated. Sixth, the capital is represented by bonds which are an annual charge, and that is the difference between the financing of the Canadian National and the Canadian Pacific. The Canadian National has every dollar of its capital shown in the way of bonds, with fixed charges. The Canadian Pacific has, besides debentures, stock, on which it is not required to pay dividends unless there is a profit. Seventh, the management was approved by all parties.
The railway is the property of the people of Canada, taken over under the authority of their representatives. My hon. friend the Minister of Finance, as I say, treats it as a sort of drag on the wheel, and the Prime Minister made a most astounding statement a short time ago. Speaking in Toronto, as reported in the Ottawa Journal of January 29, 1935, the Prime Minister said;
It far transcends the importance of any political party-it is your problem-not Bennett's and not the government's.
I thought my right hon. friend was running the government, and I thought this was one of the problems with which the government had to deal. According to the budget speech there is an item for that purpose, and I say to my right hon. friend that he cannot get rid of his obligations as head of the Government in that way. He cannot throw up his hands and say, " I have no responsibility for the Canadian National Railways," nor can this government say so. They should tackle the railway problem courageously,, and not pass the buck as they do. I say the Canadian National Railways are part of Canada's national equipment. They were undertaken, put together and financed by the people of this country, and the government of Canada have no right to throw the problem out of the windbw, or to attempt to get rid of it by leaving it on the door step of the nation. I say also-and in this I may be treading on delicate ground, but I am going to say it-that the chairman of the Canadian National Railways has just as much right to stand up and tell the people of the Dominion of Canada about the Canadian

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National Railways as the president of the Canadian Pacific Railway has to tell them about his road. I say that has not been recognized by this government. Some statements were made in Halifax, but apparently the chairman of the board of trustees of the Canadian National Railways was promptly told-


Robert James Manion: I do not like to interrupt, but I do it in good part. My hon. friend said he considered that the government should1 tackle the question courageously and deal with it. Would he elaborate that statement, or does he care to?


James Layton Ralston: I was not born the week before last, and my hon. friend was not bom the week before that. That is not a usual question for a front bencher to ask anyone on this side of the house. I just give my hon. friend this suggestion, and I give it in good part, without intending to be scarcastie; I would say to my hon. friend that if he and1 his colleagues would be sincere enough to make use of the legislation they brought down m this house two years ago, providing for arbitral tribunals to eliminate duplications where possible and which so far as I know never has been used, we would learn whether the thing called compulsory cooperation would work in this country.


Robert James Manion: My hon. friend knows that we cannot have an arbitral tribunal except at the request of one of the railways, and no railway has requested it.


James Layton Ralston: I think my hon. friend will find that no railway has requested an arbitral tribunal because of the fact that the government has not seen fit to appoint a chief commissioner of the board of railway commissioners.


Robert James Manion: That is not the reason at all.


James Layton Ralston: That is the reason.


Robert James Manion: None of them have asked for it.


James Layton Ralston: I ask my hon. friend to provide the machinery for an arbitral tribunal and see whether they will or not. As a matter of fact the chief commissioner is supposed to preside over an arbitral tribunal, but at the present time there is no chief commissioner and the position has been left vacant a long time. If my hon. friend would inquire-and I am not so sure he has not now the information-I think he would find that some applications are pretty nearly ready, or probably
have been ready for some time and something could be done, if there were some machinery whereby they could be presented.
My hon. friend has asked me what to do. I say to him that he should try the legislation he brought down two years ago. Then we will see if this thing works out, if it is possible for men to get around a table, and to find out whether or not there may be certain portions of the roads, in one place or another, where the services might be undertaken by one and abandoned by the other. That has not been tried, at all. There has not been one blessed thing done, so far as I can find out, with regard to lessening of expenditures as contemplated by that legislation. But my hon. friend comes here year after year complaining about the deficit of the Canadian National Railways. The Prime Minister goes to Toronto, throws up his hands and says, "It is your problem." I submit the Canadian National Railways have not been treated fairly. Why do they not try out the legislation which they themselves provided and which, I believe, they thought would work at the time.
Let me say a further word more about the railways, I have suggested one solution. My second solution is this-perhaps my second should have been the first; probably the order should have been changed. However the solution is, that if the trade of this country could be improved, and if my hon. friends opposite would adopt a policy which would move the wheat, if they would develop external trade and thus provide freight for our railways from coast to coast they would probably get somewhere near to solving the problem, just as the Minister of Justice throught our railway problem was being solved in 1928-29 when we nearly balanced the payment of interest to the public.
On this point regarding trade policy as affecting railways let me now quote the president of the Bank of Nova Scotia, who indicates just what he believes is the real trouble behind our railways in Canada. Here is what he states:
I shall have something to say presently regarding the strangulation of the world's trade, which we have -witnessed during the past few years, and its consequences, direct and indirect. It suffices here to remark that there have been no more unfortunate victims than the Canadian railways, of the passion for economic nationalism, which has been dominating and still in a measure, dominates the world.
That is the trouble with the railways in Canada to-day " unfortunate victims of the passion for economic nationalism". Take the nachinery which has been provided, and if that machinery does not provide a solution
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probably my second suggestion would. But in addition to what I have said may I remind my hon. friend, when he asks what I have to suggest, that the leader of my hon. friend while sitting in opposition used to say, "as Mr. Gladstone once said, When I am called in I will prescribe."


Mr. McPHEE:: It won't be long now.


James Layton Ralston: I said I would quote one other reference made by the Minister of Justice and I find it at page 743 of Hansard for 1929. This is what my hon. friend thought of the Canadian National Railways at that time-and I suppose he expressed the opinion of the Minister of Railways and Canals:
But what about the money it owes to the dominion treasury? The minister intimates that the sum of $32,000,000 odd is owed this year to the government for interest. It is put down in the books as a debt of the railway, but is purely a book-keeping transaction, and I presume it will be added to the $1,258,000,000 which the company owed to us at the beginning of the year, making the total indebtedness of the system to the dominion treasury about $1,300,000,000 and to the public about $1,000,000,000.
In this respect, however, to the National railways we on this side of the house are all optimists. We look upon that railway as practically our own infant and our own creature.
He continues at page 745:
Now, when this wonderful Canadian National railway system has more than justified itself, now, that it is rapidly becoming in the nature of a great national asset, now that we may look forward to a day, not perhaps in my lifetime, buit in the lifetime of some here, when this system will start repaying the government of Canada part at least of the money it owes to the treasury, to the day when it will have a clean sheet, as it ultimately will have, in regard to its bonded indebtedness to the public; now that the system is in this, a thoroughly prosperous condition-
Under a Liberal government.
-this government desires to treat it as its own creature. Whereas in 1919 it tried to cast it out as base-born, now it wants to consider it as its legitimate offspring, and to profit by its success. Let me say, in concluding my remarks on this phase of the subject, that the national railway system in this country constitutes a lasting monument to the ability and statesmanship and determination of a single man, a member of a former Conservative government, and subsequently Prime Minister of that government. It is to his ability and foresight, to his statesmanship and determination that the people of Canada are indebted for this wonderful system of national railways.
I suggest to my hon. friend that he might go to the present leader of the Senate and find out from him what to do about these railways, as according to the present Minister of Justice the national railways are a monu-

ment to his statesmanship and determination. Go to him and find out what his advice would be about the railways for which according to the Minister of Justice we are indebted to the present leader of the Senate.
Now we come to the budgeting for the next year-and here is where I have to find serious fault with my hon. friend. As best he could he has given us a report of what took place last year, and to some extent at least he has given a forecast of expenditures and receipts for the next year. Here again I would remind him, to use that well known phrase, that the Chancellor of the Exchequer in delivering his address to the British parliament is always held to "strictest account" for the extent to which he has been able to realize his expectations. At page 2168 of Hansard for 1931 this question was asked by the Prime Minister:
Will any hon. member on the other side of the house say that last year there was any estimate given of expected revenues? Was there any estimate given of expected expenditures? Was there any word given of a $75,000,000 deficit? What did they do? What the then government did was merely to bring down estimates for moneys to be raised by taxation without any estimate of what was -to be realized. I said frequently in this house in those days, and I now repeat, that not in any municipal council in this country would the people tolerate their mayor amid councillors conducting business without giving an estimate of expected expenditures and revenues for the current year. It is the basis of responsible government, it is the basis upon wibioh representative institutions have been established, and that responsibility can only attach when there is some estimate as to What is being received by the country from the taxation imposed...
My hon. friend has budgeted for a surplus of $21,500,000. But he says there will be some special expenditures the amounts of which he does not give. I should like to attempt to complete the budget; he has left some things out. There will be $6,000,000 on capital account, and how much for unemployment relief? Surely under this government there will be no necessity for unemployment relief. I shall not read that classic passage from the speech the Prime Minister delivered at Moncton during the 1930 campaign, but I will make mention of one made five years ago at Victoria. On June 17, 1930, he is reported to have said:
You have my promise that if the Conservative party is returned to power that as soon after July 28 as possible parliament will be called together to deal with the problem of unemployment by providing, not doles, but work and that legislative action will be taken to bring about the future security of our country and the well being of its people .... We cannot tolerate the dole. Men and women of this country want work, not charity.

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Here is another speech which has not been quoted so often. At Quebec on July 14, he said:
There was no necessity for a conference on unemployment. The solution was too apparent. "What you want is work," he exclaimed, "not conferences, and you are going to get work." Unless bis promises to the people of Canada were kept if elected to office, Mr. Bennett said he wanted Quebec and other members of his parity to vote him out of office.
Of course that Moncton speech we all know so well is written in the copy books of the school children from Halifax to Vancouver. There were to be no doles but work. But now, after five years my hon. friend brings down a budget in which he proposes to spend a huge amount for unemployment relief. Compare the Prime Minister's remarks at Vancouver, Quebec and Moncton during the campaign in 1930 with what the Minister of Finance states in 1935:
Tile total number of individuals on relief, including dependents, was 1.229.935 in February Which is a decrease of 117,285 from February of last year, and of 265,031 from March, 1933.
Notwithstanding all the assistance given by government work, government projects, and relief construction, notwithstanding the enormous expenditures already made, these are the people on relief in Canada-or, at least, this number were on relief at the time this paragraph in the budget speech was prepared. As yet there has been no considered program with regard to unemployment and there has been no considered program with regard to relief. It has been helter skelter, hit or miss. One year it has been public works, another year it has been relief, another year it has been public works and relief; one year it has been a certain percentage of contribution by the provinces and municipalities, and then this has been changed; there has been no uniformity.
There never was a finer program given to the government than was included in the speech by Miss Charlotte Whitton to the Canadian Chamber of Commerce in Winnipeg. She pointed out the absolute necessity of a national relief council if there was to be any proper administration of relief in this country.


Mr. MACKENZIE KING:: We suggested the same thing.


James Layton Ralston: My right hon. leader
points out that that policy was suggested by him at the first session in 1930, and he has repeated it year after year but to deaf ears. This matter must be treated from the dominion point of view. There should be some general, coordinated policy. It must be seen
to that standards are the same and that services furnished are similar. Consideration should be given to the needs of the individual but there should be no exodus from one part of the country to another in order to secure a higher scale of relief or more extensive relief benefits thus enabling the locality which is paying less to get rid of its obligation. These are things which have not been considered by this government, yet in 1935, when we have 1,229,000 on relief, my hon. friend comes down with his budget and says: "I cannot tell you how much we are going to pay for relief; I can just tell you that we are going to have a surplus of
S21,000,000 and we will have to pay relief out of that." We paid $49,000,000 for relief last year and my hon. friend says that there was a carryover from 1933 amounting to $9,000,000. Five million dollars was paid to Saskatchewan on account of drought relief and my hon. friend thinks that that may be paid back. However, I am striking that off with the $9,000,000. That makes $14,000,000 which leaves $35,000,000 which ought to be added to the estimated expenditures for the coming year.
What about the Public Works Construction Act? The total vote for this was approximately $40,000,000 but only $8,000,000 was spent last year. If this program is to be carried out it will be necessary to spend $32,000,000 this year, but that is not referred to in the budget forecast. The money will have to be got somewhere if it is to be spent this year and if my hon. friends do what we expect they will do, namely, start to erect a lot of public buildings and projects on the eve of the election. That is another $31,000,000. But is that all? There are rumors about an additional public works program. I do not know whether this is right; my hon. friend does not tell us anything about it in his budget speech. I thought that if this were so it would need an amount similar to that which was voted in last year's estimates. Perhaps it will not be this much, but I have put it in at an additional $40,000,000. The railway deficit is still to be provided for. My hon. friend takes an optimistic view about this. Last year the railway showed an surplus of $6,000,000 before the public interest was paid and he expects that next year the deficit will be reduced by $4,400,000. That leaves about another $44,000,000 to be provided for.
Lastly, there is the Canadian Cooperative Wheat Producers Limited. Two years ago I suggested in this connection that $20,000,000 should be provided but the Prime Minister later indicated that there might be a loss of $15,000,000. I have put in $20,000,000. So
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tve have 86,000,000 for capital expenditure, $35,000,000 for relief, 832,000,000 for a construction program, $40,000,000 for a further construction program, $44,000,000 for the railway deficit and $20,000,000 for a possible deficit in connection with the wheat transactions. This gives a total of $177,000,000, but I will make it $160,000,000, against which there is a surplus of only $21,000,000. There would seem to foe the possibility of our debt being increased next year by $125,000,000. So far under Conservative administration our funded debt has been increased by $812,000,000 and with this addition for next year it will have been increased by nearly one billion dollars. I think my hon. friend is quite right when he says in his speech at page 1989 of Hansard:
Meantime recovery will be hastened if we face our obligations courageously. To attempt to run away from them by failing at least to strive to pay our way, would not only retard recovery but this course would in the long run entail much greater sacrifice.
We should pay our way but we have not paid our way in any single year since this government came into office. I venture to predict that if this government stays in power we will continue not to pay our way. If we are to pay our way we must start doing things in a businesslike way, and I believe the people of Canada will see to this at the first opportunity. In the final result, the financial statement offered by my hon. friend is not a budget because he ignores entirely these items which are bound to come up for payment, with the possible exception of the added public works program.
I should like now to refer to the wheat-guarantee. I do not intend to take up much time in this connection as I understand we are to be given an opportunity to discuss this matter in the near future. On page 2149 of Hansard is a table of loans and guarantees made by the government. There is a loan to British Columbia, to Manitoba, to the Manitoba savings office, to the Algoma Steel Corporation, to the Dominion Steel and Coal Corporation, to the Canadian Pacific Railway Company and to the government of Newfoundland. Amounts appear opposite all these items, but the next item concerns the Canadian Cooperative Wheat Producers Limited, and in this instance the amount is "unstated"- another blank cheque. I should like to refer for a moment to the transactions which gave rise to this guarantee. I shall do so very briefly, as in the very nature of things an opportunity should be given to discuss this matter before dissolution.
This guarantee was originally granted by order in council P.C. 2238 dated September 12,

1931. Hon. members will remember that in January, 1931, the Prime Minister issued a letter by which he guaranteed the advances made by seven banks to the Canadian Cooperative Wheat Producers Limited in connection with the handling of the 1930 crop and the order in Council was passed nine months after. Mr. McFarland took over the job; in fact he took over two jobs. One was to dispose of the 1930 crop, and the other was to see that the market would not be unduly depressed by this action. I do not believe there has ever been a definite statement made by anyone in authority in connection with this matter, but the reports are that Mr. McFarland commenced his job by purchasing 75,000,000 bushels of wheat. When the Minister of Finance brought down his budget in 1932 mention was made of this guarantee, and more definite information was given at that time than has been given in any subsequent budget. On page 1759 of the Hansard of 1932, the Minister of Finance stated:
Based upon present market prices, the expectation is that, when -all accounts are settled, the Canadian. Cooperative Wheat Producers Limited, will be able to settle all advances without recourse being had to the dominions guarantee.
So in 1932 the minister was predicting that there would be no loss to the dominion on-account of the guarantees. During the fall session of 1932 this matter came up again and the Prime Minister is reported on page 1176 of Hansard as saying:
Except for the mention of the exact financial amount involved, which obviously it is difficult to give, I think I have answered all the questions asked.
Of course it was difficult to give the financial amount involved without giving the amount of wheat purchased. The dominion had guaranteed the loans made by the seven banks to the Canadian Cooperative Wheat Producers Limited covering the full amount of the commitments made by Mr. McFarland in purchasing wheat. This matter was again before the house in 1933, and the Minister of Finance is reported on page 3455 of Hansard of that year as saying:
The question of ultimate liability will depend entirely upon the future course of wheat prices.
In March, 1934, the Prime Minister became a little more communicative; he indicated to the house that there might be a loss of $15,000,000. Now in 1935, just before the government goes to the country, the Minister of Finance gives us the laconic information that the amount of the guarantee is "unstated." And I now give the whole reference which appears in the present budget to this rather

important and somewhat large commitment of the Dominion of Canada to the banks of this country through Mr. McFarland. At page 1983 the minister says:
The guarantee of bank advances arising out of the operations of the Canadian Cooperative Wheat Producers Limited in connection with the marketing of wheat, was continued.
Apart from the wheat guarantee, which is for an unstated amount and is subject to fluctuation from day to day, the aggregate of guarantees under the relief acts is $65,717 000 a decrease of $27,500,000 in the fiscal year. The amounts of the different guarantees are as follows:
And then he quotes the guarantees under the relief act and gives the list which I read a few minutes ago, concluding with " Canadian Cooperative Wheat Producers Limited," and under the column headed "Estimated principal amount of guarantee outstanding March 31, 1935 " appears the one word " unstated." I wish to make it clear-and I do not think there is need to emphasize it-that I am finding no fault with the government's action in connection with the first transaction of participating with the western wheat producer in an endeavour to dispose of the crop. That is not what we are objecting to. What I am objecting to is the method that has been adopted by Mr. McFarland as the dictator of Canadian Cooperative Wheat Producers Limited, and the method adopted by the Minister of Finance in this house with respect to the submission of this information, keeping the house entirely in ignorance of the liability involved and not even giving an estimate. I have no criticism of the objective which was aimed at originally, but what I have the strongest criticism to offer in respect of is the method and the motives which seem to have actuated Mr. McFarland in carrying out his mandate. This is a blanket guarantee, a guarantee which has been running for four years in favour of seven of the chartered banks of the dominion; and instead of the grain being disposed of which was supposed to be disposed of soon after the 1930 crop year, instead of seventy-five million bushels or so being disposed of, if the reports are correct, there is between two hundred and twenty-five and two hundred and forty million bushels of wheat on hand at the present time. That is the note which the dominion endorses. My objections are these. In 1933 when wheat went to a price substantially above what it had been, Mr. McFarland, instead of selling wheat held it-or if he did sell it he went into the market and bought again. That was a transaction which, I submit, had the effect of rank speculation on the part of the dominion, speculation with the money of the people of the country; and as my right hon.
The Budget-Mr. Ralston
leader suggests, it was done under an order in council which depended for its validity on the peace, order and good government provisions of the British North America Act-a rather remarkable situation, a situation which is not usual in any country I know of, that a peace, order and good government statute should be used for the purpose of speculation, taking the credit of the people of this dominion and putting it behind one man in order that he might deal with that credit, not for the benefit of the western wheat producer -and I shall show that in a moment-but for the possible eventual glorification of Mr McFarland and this government.
In the fall of 1933 wheat was pegged on the Winnipeg market, and pegged at the instance of Mr. McFarland, who was acting under the authority of this government. There is no doubt about it that he was the agent of this government; that has been abundantly shown in this house and in the committee on banking and commerce as well. My hon. friend the former Minister of Trade and Commerce, speaking in this house in 1933, made the following statement, as reported at page 3718 of Hansard:
The government authorized Mr. John I. Mo Fariamd, the head of the pool sales agency, to purchase grain for future delivery when it was necessary to do so in order to hold the market steady.
The evidence of Mr. Logan, the general manager of the Canadian Bank of Commerce, before the banking and commerce committee in March, 1934, as reported at page 133, was:
Since the 31st of July, 1931. the banks have loaned Canadian Cooperative Wheat Producers Limited such amounts as have been required to carry such quantities of wheat and/or contracts for future deliveries of wheat as in the estimation of the Canadian Cooperative Wheat Producers Limited and with the approval of the Prime Minister have been necessary to ensure the orderly marketing of the Canadian wheat crop.
That would indicate, I should think, that Mr. McFarland was acting at the instance of this government; the government was the guarantor and he was acting under its authority. Mr. Logan says that it was with the approval of the Prime Minister that the banks made the advances. As I said wheat was pegged on the Winnipeg exchange in 1933 at the instance of Mr. McFarland who was to all intents and purposes the agent of the government. Now let me read what one gentleman thought of pegging a little earlier than 1933. Here is what the Prime Minister said in this house in 1931, as reported at page 781 of Hansard, referring to the government:

The Budget-Mr. Ralston

It did not peg the price; no government of which I am the head ever will. I have seen artificial prices placed upon commodities and whether that commodity be wheat or anything else, it matters not, I know the inevitable result. It cannot advantageously be done; it will not succeed. It may cau9e a temporary advantage, but that disappears. Look at the situation in the United States to-day. Mr. Legge, with all his vast experience, with all the millions and hundreds of millions of dollars that he has behind him, declared that the principle of artificial price fixing was unsound, and it has been abandoned.
Nevertheless wheat was pegged on the Manitoba exchange in 1933 at the instance of Mr. McFarland, he being to all intents and purposes the agent of the dominion government-a government that was going to see to it that wheat would never be pegged.
And then Mr. McFarland told us in March, 1934, before the banking and commerce committee, as reported at page 129 of the proceedings, that the position with regard to wheat was such that if there were a ten per cent increase in the price of wheat the government would be even with the market, or, to use his exact words, it would "create a condition where there would be no calls under government guarantees." In the banking and commerce committee we were trying to get a statement from Mr. McFarland, the representative of the government, as to what obligation was involved in order that we might know something about the country's financial commitments, and that was the nearest we could get, that ten per cent would relieve the government entirely. And the Prime Minister a few days after, at page 2057 of Hansard, said:
If the price of wheat were to rise ten per cent above what ft was to-day, the guariantor would be under no liability.
In other words, if wheat rose by ten per cent we could get out and the people of Canada's endorsement would be relieved. What happened after that announcement was made? May wheat was then over 67 cents, and on May 31, only two months after the Prime Minister had spoken, it was over 81 cents, and that was away above the ten per cent spread. And yet Mr. McFarland stopped selling wheat. What has been the result? The result has been that Argentine wheat has been going into Great Britain and that the Canadian producer is losing his market there. During the fall of 1934 shipments have been the smallest of any fall since 1929, and that notwithstanding the fact that Russia is out of t'he market and that the United States is taking a good deal of durum wheat, and frosted wheat for feed. I infer that the idea was that either Mr. McFarland or the government for whom he was acting wanted

to make a reputation as astute market operators and possibly to get some glory out of the distribution of the profits later. We find that in the fall of 1934 the prices of Canadian wheat in the British market were something like 22 cents above Argentina and something like 14 cents above Australia. What has been the result of the gambling attitude? In the first place the dominion as it wanted to do, shared with the western wheat producer in the responsibility for marketing the 1930 crop, and nobody finds any fault -with that action; both parties joined in approval of it. There has neveT been a word of criticism upon that score because everybody recognizes the importance of the western farmer as a producer, as a consumer and also as a citizen. What is the criticism? It is first from the point of view of the western farmer that the government instead of marketing the grain has virtually become his competitor. What do I mean by that? I mean that the government through Mr. John I. McFarland, who is its agent, becomes in effect the potential holder of 200,000,000 or
225,000,000 or 250,000,000 bushels of wheat that Should be off the market in order to enable the western producer to dispose of his 1935 crop. That quantity is still here; it is still in the hands of the Canadian government. The Canadian government cannot be depended upon to keep it forever. That wheat should have been cleared off the market just as the Argentine wheat was. In Argentina they kept the bins clear; they sold the Wheat, and the result is that in Argentina there is very little carry-over and their operation has come out practically square, due in some measure at least to the fact that there has been an advantageous exchange. Nevertheless the Argentine government saw to it that there would not be a great big pile-up and carry-over of wheat. That is not what has taken place in this dominion, and the result is that the government instead of helping the . Canadian farmer in effect stands in the market as his competitor.


Mr. BEAUBIEN:: And losing the market
all the time.


James Layton Ralston: Yes, and losing the market all the time. That brings me to the next point. We have been teaching the best customer of the Canadian producer to get along without our wheat; that is what has happened. The British miller, finding out more and more as he has that Canadian wheat is being held away above what he regards as the market price, is purchasing in other directions. I have before me a brief statement which I

The Budget-Mr. Ralston
propose to read, showing the shipments that have been made under a spread of twenty cents over the Argentine price and fourteen cents over the Australian price, indicating that the British miller, regardless of questions of patriotism, because he is as hardheaded as anybody else, is going to buy the cheapest wheat and is learning to get along without ours. What are the figures?
Imports of Wheat into the United Kingdom From September 1, 1932, to January 31, 1933
Bushels
From Argentina	 3,635,531
From Australia	 10,358,656
From Canada	 51,696,757
From September 1, 1933, to January 31, 1934
Bushels
From Argentina	 12,176,787
From Australia	 17,661,950
From Canada	 29,406,944
From September 1, 1934, to January 31, 1935
Bushels
From Argentina	 26,019,155
From Australia	 15,972,551
From Canada.;	 27,747,169
Mr. McFarland predicts, as I understand the matter, that there will probably be a carry-over of only 100,000,000 and possibly it may get down to 81,000,000 bushels for this year. I understand that from the time he made that statement, which was on February 16, something like 10,000,000 bushels of wheat a week would have to go out of this country to get -the carry-over down to Mr. McFarland's prediction before the new crop year. This is a record of weekly export clearances.
Seasonal Analysis
	1933-34	1934-35
Period	Bushels	BushelsAug. 1 to Nov. 30	. . .. 67,972.365	53,436,359Dec. 1 to Mar. 2. .	. . .. 33.550.495	21.352.654Jan. 4 to Mar. 16,	.. .. 28,279,227	19,919,276Weekly Clearances	February 2.. ..	.. .. 3,081,462	2,216,490February 9.. .. ,	.. .. 2,388,271	2,209,360February 16.. .. ,	.. .. 2,013,367	1,207,504February 23.. ..	.. .. 2,G20,S73	2.768,741Total	.. .. 10.103,973	8,402,095March 2	.. . . 3,563,683	1.006,700March 9	. . .. 1,910.350	1.765,404March 16	.. .. 1.866,143	2.602,291Total	.. .. 7,340,176	5,374,395
The foregoing does not include clearances to the United States until cleared from a United States port.
Therefore, for at least ten weeks prior to March 16 the shipments have averaged 1,900,000 bushels a week instead of an average of something like 10,000,000 bushels which should have been shipped if the bins are to be cleared to the extent Mr. McFarland predicted. First, the Canadian farmer finds this
92582-134J
wheat overhanging this market; second, he finds his customers buying somewhere else and third, he finds something else. If I may presume -for a moment to speak on behalf of the western farmer, what is going on out in the west is this: Mr. McFarland is absolute autocrat of the situation out there with the directors of the Canadian Cooperative Wheat Producers Limited simply more or less figureheads. The cooperative spirit, the spirit in -which the western farmer takes some interest in -what are his own affairs, is being killed. The result is that Mr. McFarland is becoming the dictator of the wheat situation in the west with the western farmers' organization out of the picture. That is one of the most dangerous things which could happen in the Dominion of Canada, and particularly in Alberta and Saskatchewan. More dictatorship, as my hon. leader suggests! The ideas of the people who have had experience, who all their lives have been engaged in the grain business, who can contribute something and who have a real financial interest in the situation, are completely disregarded and a dictatorship is set up in the person of Mr. McFarland, who presumes to conduct the wheat business for the whole country 1
Let me quote an article from the Financial Post of August 19, 1933, with regard to this very situation. This is what the Post has to say about what was developing at that time. This was at the time when wheat had risen in the Canadian market and when Mr. McFarland did not sell, when wheat was held, as I submit, for speculative purposes. This is what the Post says:
But a new objective appeared to emerge when the price of wheat began to- rise some months ago, that of making a large profit. Parity newspapers began to talk of the government's huge profits in wheat. Government holdings, taken on under the excuse that there were no other purchasers in sight, were retained when other purchasers appeared and Clamoured to be allowed to buy. As a result, wheat prices soared to levels that could not be maintained, to levels that shut off our export business, and to levels from which there has been an inevitable reaction.
The profit th>a-t seemed to be almost in band has entirely or in large measure disappeared, but not before discussion began as to whose profit it was. It wras said to belong to the pools, presumably to the farmers who had wheat in the 1930 pool, the marketing of which was the nominal excuse for the continuance of the agency. Politicians began to calculate the possible effect on the next election of the distribution of some millions of dollars through the pool organization.
I have enumerated some of the effects on the western farmer. What about the effect on the country? It is simply this: the Min-
The Budget-Mr. Ralston

ister of Finance brings down his budget and our liabilities on account of the Canadian [DOT]Cooperative Wheat Producers are "unstated." The dominion is endorsing a note for an unlimited amount; its agent, the government, refuses to disclose the amount of the liabilities and how much wheat is on hand. This government proposes to go into the election, having committed the country to seven banks in respect of a transaction which is said to amount to between 200,000.000 and 240,000,000 bushels of wheat, and no one is to know what liability is involved! Without a statement from the Minister of Finance as to the extent of the present holdings and the prospective liability in respect of this wheat guarantee, this so-called budget is a delusion. I submit that any parliament which allowed this budget to pass without proper information would not be worthy of the name. Finally I submit that the unhappy position in which we find ourselves is due to lack of appreciation of the duty of the government to the wheat growers of western Canada and to the whole country to dispose of that wheat with all possible expedition and not to condone and support a huge gambling operation in the hope of being able to point to gains as evidence of efficient administration.
With regard to ways and means, my hon. friend makes some proposals in regard to taxation to which I want to refer briefly. He retains his virtual twenty-five per cent tax on sugar, a household necessity, but he reduces his tax on liquor by over forty per cent. I had hoped, and others on this side and I believe a good many on the other side had hoped, that the Minister of Finance had intended to cancel the sugar tax this year. We supposed he put it on as an emergency tax. He put on the gold tax, he said, in order to permit the sugar tax to be reduced by half; last year in making his statement to the house he said that to replace the revenue lost by the reduction of the tax on sugar it was proposed to levy a tax of ten per cent on gold. The gold tax is gone, but half of the sugar tax still remains. I think my hon. friend will find it very hard to explain to the people of Canada how he can collect a greater amount of taxes from liquor with lower rates of excise taxes and customs duties. It is peculiar that it is only being discovered just on the eve of an election that they can reduce the tax on liquor and at the same time maintain the revenue. Sugar, a necessity of life, bears a twenty-five per cent load, while the general sales tax is six per cent. My hon. friend has picked out this commodity for taxation without regard to the fact that it

bears on the masses of the people. Why? Simply because it is easy to collect. Seventeen millions were collected the first year, I think, and $8,000,000 or $9 000,000 last year- a very fine tax, but my hon. friend must remember, and the government must remember and the people of Canada will remember, who has to pay this enormous levy on a necessity of life.
With regard to the gold tax, my hon. friend remembers that last year we on this side of the house protested as vigorously as we could against the unfairness of the way in which this tax was to be levied, namely as a tax on production and not as a tax on profit. It was being levied on one of the basic products of this country, a commodity by the way which has probably done as much as any commodity to keep this country out of bankruptcy. My hon. friend and his leader after consideration accepted our suggestion, changed the gold tax and made it in effect a tax on profit by making it applicable only to mines which paid dividends. Now that gold tax comes off, and another tax takes its place, a tax half on the mine, and half on the shareholders. It remains to be seen what the effect of chat will be. I am a bit sceptical with regard to how this tax will emerge from the committee of ways and means. I have hardly ever known a tax proposed by this government that has emerged from that committee in the same form as it went in. My hon. friend always has to after his taxation proposals. I shall not be at all surprised if there is a change in connection with the gold tax-


Eccles James Gott: You will be surprised if there is a change of government.


James Layton Ralston: My hon. friend himself will be surprised if there is not a change of government.


Mr. STITT (Selkirk):: I think you would be shocked.


James Layton Ralston: I remember in 1931 an
income tax proposal was made the effect of which would have been that the tax on incomes in the higher brackets would be reduced, and that after a very vigorous attack by the former Secretary of State (Mr. Rin-fret), that resolution was withdrawn by the Prime Minister, because, as he indicated, of some personal affront which he had taken at the remarks which had been made. It has taken three years for the government to realize that what the former Secretary of State said was correct, and that here was a possible source of revenue in higher taxation of the higher incomes. Now, at the last session of this parliament, after a speech made by the

The Budget-Mr. Ralston
Prime Minister in Montreal recently, a tax is put upon two forms of income, first upon earned income amounting to over $14,000, and secondly on a form of income which is called investment income. I must say that this surtax on incomes is to say the least rather delicate on the higher incomes. It does not bear too heavily on them, having regard to the motives which were supposed to be behind it. Looking at the table of proposals I find that the man who has an income of between $14,000 and $20,000 pays three per cent surtax on the excess over $14,000; that a man whose income is say, $280,000, to take an amount twenty times more, does not pay twenty times as high a rate of income tax but his rate is only three times higher; he pays ten per cent on the excess over $14,000. So I do not think this tax can be said to partake of the characteristics of the "share the wealth" program of the senator south of the line, or that anything drastic is going to happen on account of it.
The Prime Minister in his radio address in Montreal, the one delivered I think on January 9, warned the rich people of this country that they were going to have their patrimony taken from them and that they had better take it philosophically. After seeing this budget they will perhaps not feel so badly. Here is what he said:
Selfish men. and this country is not without them....
This is after he had talked about taxes on income from investments.
Selfish men. and this country is not without them, men whose mounting bank rolls loom larger than your happiness, corporations without souls and without virtue, these, fearful that this government might impinge on what they have grown to regard as their immemorial right of exploitation, will whisper against us. They will call us radicals.


Some hon. MEMBERS:: They have put on a special excise tax first of one per cent and then raised to three per cent; a tax on berths and parlour cars; a tax on cable, telegraph and radio messages; a tax on telephone calls; a tax on rubber tubes and tines; a tax on malt products; a tax on unfermented wort; the tax on sugar; a tax on toilet preparations, a tax on toilet soap and a tax on cigarette papers and tubes. Then the tax on corporations has been increased. In 1930-31 it was increased from 8 to 10 per cent. In 1931-32 it was increased from ten to eleven per cent. In 1932-33 it was increased from 11 to 12^ per cent. In 1933-34 it remained the same, and now it is proposed to increase it to 13i and in the case of consolidated returns to 15 per cent. Then there is the new tax of five per cent on non-resident remittances and five per cent on premium payments to residents in Canada. Then there was the increase of the sales tax from one per cent to four per cent and then to six per cent. I have made a summary, Mr. Speaker, and I find that under the brand new taxes of this government which have been imposed there actually has been collected from the people of Canada, up to February 28, 1935, a total of at least 880,000,000. That is on new taxes. Then there is the sales tax, which was increased from one per cent to four per cent, and again to six per cent. The increases of sales tax have cost the people of Canada in the neighbourhood of $180,000,000. From the increases in the income tax on corporations the government have collected $37,300,000. In other words, the total of new taxes, together with the increased sales tax and increased corporation income tax, is about $298,000,000, or in round figures S300,000,000. And that figure is probably a very modest estimate. But in addition there has been an increase in the individual income tax. The exemption stood at S3,000 when this government came into power. That exemption was twice reduced, first to $2,400 and then to $2,000, so as to hit the man with the small income, and the twenty per cent discount was removed. The exemption for children also was reduced from $500 to $400. In 1933 there was the change in the first bracket, increasing the tax from two per cent to three per cent, and the increase continued all the way up. There was an additional income tax on all incomes over $5,000. There is no possible way by which I could figure out the total increase put on the backs of the income tax payer by all these changes, but I think the estimate I have given regarding the new and increased taxes other than the personal income tax

is well within the mark, namely that they have resulted in over $300,000,000 more being collected from the people of Canada during the life of this government than would have been collected if taxes had remained as they were when this government took over.
So I come to sum up the financial record of the government during the past five years because after all, as I said, this is their farewell budget. During the past five years Canada has dropped in world trade from fifth to eighth place. My hon. friends can give all the world statistics they like; that is the situation. Canada, one of the countries away up in total world trade, has dropped from fifth to eighth place; that gives the Minister of Trade and Commerce the comparison he asked for. Then, during the past five years her average total trade has been $1,200,000,000, or only one-half the average total trade during the previous five years. In the next place, under the previous five years of Liberal administration there were surpluses on ordinary account totalling $413,000,000, though taxes had been reduced by an estimated total of $180,000,000. Compare this with the five years of Conservative administration when there have been deficits on ordinary account totalling $157,000,000, though new and increased taxes have brought in over $300,000,000 without taking into account the heavy increases in personal income tax. In the five years of Liberal administration the debt was reduced $257,000,000, while under the present government the debt increase has already amounted to $812,000,000, and we are facing a deficit of probably $125,000,000 to $150,000,000 next year. Lastly, in spite of all the promises of 1930 there are over 1.200,000 people on relief in Canada at the present time.
My hon. friends say, " Oh, well, but you are not taking account of the depression." Canada was in the best position of any country in the world to ride through the depression. Canada was a country that sold the necessities of life. People had to eat; people had to live, and Canada was a country which provided the things they needed. Yet our trade has been crippled and strangled. This government has had all the power of parliament, it has had a majority which could put through any legislation it required; it has had the full resources of the treasury in the form of a blank cheque forced from parliament, and it has had and has made full use of the most autocratic and dictatorial power. They have had their own way absolutely in trying out their policies and at the end of five years this is the record as I have just given it.
Sensing their danger, as a result of the byelections they put on a most remarkable

Railway Act

Rates on Grain
profession of repentance and announce a program of reform. The details are withheld, but are to be given to parliament. The details are now disclosed, and we find a series of measures which prove to be only a hollow echo of the flow of fulsome rhetoric with which they were announced, and the principles of which are altogether foreign to the policies previously espoused by this government. This budget, in its expression of sudden concern in regard to external trade, is just a part of that same weird change which has taken place in government thinking since the by-elections of last September. What this government cannot seem to realize is that the sincerity of all these new professions is being tested in the country by the recollection of the solemn pledges of 1930. And they are only fooling themselves if they believe that these last minute recantations are going to make Canadians forget. There is no escaping the issue; and we on this side of the house believe we express the views of the great mass of the citizens of this country when we say that what the people of the dominion are waiting and anxious for is a chance to register at the polls their opinion regarding the record of this government in the past five years and the grotesque attempt it has made to obscure that record by these eleventh hour professions. The results in nine by-elections and four provincial elections from the Atlantic to the Pacific leave no room for doubt regarding the temper of the electors. We call upon the government to finish the business of the session, to dissolve parliament, to let the people speak at the polls and to make way for an administration fresh from the electorate with a mandate to undertake the task of repair and reconstruction on principles of Liberal economics and Liberal ideas. Accordingly, Mr. Speaker, I beg to move, seconded by the hon. member for Vancouver Centre (Mr. Mackenzie):
That all the words after the word "that" be struck out and the following substituted therefor:
This house regrets that the proposals submitted by the Minister of Finance on March 22 are entirely inadequate to meet the serious and acute situation prevailing in Canada and afford an additional reason why appeal to the people should not be longer delayed.


Some hon. MEMBERS:: Question.


Some hon. MEMBERS:: Carried.


Mr. MYERS:: Mr. Speaker, will you call it six o'clock?


William Lyon Mackenzie King: Where is the government?


Jean-François Pouliot: No, no.


Pierre Édouard Blondin: Six o'clock.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 27, respecting Canadian Marconi Company.-Mr. Sullivan.
Bill No. 43, for the relief of Clarence MacGregor Roberts.-Mr. Bell (St. Antoine).

[Stage Direction]
The house resumed from Friday, March 22, consideration of the motion of Mr. Reid for the second reading of Bill No. 38, to amend the Railway Act (rates on grain).
Thomas Reid: Mr. Speaker, when nine o'clock was called the other evening I was replying to some of the arguments advanced by the Minister of Railways (Mr. Manion), and this evening I propose to deal with them at further length. The minister has commended me upon my persistence in bringing this matter before the house, and it has been said that this question has been the subject of debate for many years. I would point out that the Railway Act amendments were passed in 1925 but the question was not presented in form of a bill until 1931. As I said at that time, and as I repeat now, I believe that the House of Commons is the place to settle this particular question, and before I finish I shall endeavour to prove this contention.
In my previous remarks I stated that the rates to the east were considerably less than those to British Columbia, and the other evening the minister replied by stating that the rates to the east were largely paper rates. I have before me some information which I should like to put on record in connection with the grain movement through eastern and Pacific ports. I have the figures from the year 1929 but I shall only give those for last year. Over 6,000.000 bushels of grain passed through the port of Saint John. The grain movement to Halifax totalled 2,301,937 bushels, while 49,788,385 bushels passed through the port of Montreal. I want these figures to be on record because I am contending that the greatest revenue derived by the railway companies is that derived from the handling of grain through Pacific coast ports.


Robert James Manion: I am sure the hon. gentleman has no desire to be unfair and he must
Railway Act-Rates on Grain

admit that practically all of that grain would
be carried water and rail. I said that the rail rate from the head of the lakes to Montreal was largely a paper rate.


Thomas Reid: I admit that I am not quite
sure but I would be inclined to believe that the grain shipped from Halifax and Saint John had been shipped during the winter months.


Robert James Manion: That may be correct but
it would have reached Montreal by water and rail.


Thomas Reid: Perhaps we can agree to differ on that. I still contend that the rate set by the railway companies was more than a paper rate; it was intended that business would be done with those rates. This argument has been used quite often by the railway companies -when they appeared before the board of railway commissioners but I still claim that it is an actual rate.
The railways derived their greatest benefit from the carriage of grain to British Columbia as over 100,000,000 bushels of grain passed through the Pacific ports last year. A large portion of this grain went to the old country via the Panama canal. Compare this to the total movement of only 83.000.000 bushels through Montreal, Saint John, Halifax and all other ports on the eastern Atlantic. If I had the time I could place on record figures which would show that there 'would be a greater return to the railway companies if more encouragement was given to the shipment of grain via the Pacific coast. Although there is a handicap of S9.000 per ship as a toll through the Panama canal, more grain left the Pacific ports for the old country than was shipped out of the eastern ports. I do not think these figures can be refuted.
Tb" other evening the minister disputed the statement I had made that the export rates to Vancouver or New Westminster were not on a par with and were in fact higher than the export rates to Fort William. It was not my intention to deal with export rates at any length but I think I should attempt to prove my contention that the export rate to Vancouver is higher than the export rate to Fort William. In order that the house may more easily understand my figures I have reduced them to net ton miles. I shall first take the Canadian Pacific railway, over which the distance from Calgary to Vancouver is 642 miles. The export rate is 20 cents per hundred pounds, and if one reduces that to ton miles it means -6 cents per ton mile, so that the railway is carrying grain for export through the ports of New Westminster and Vancouver at the rate of

60 cents per ton for every hundred miles. Coming to the Calgary-Fort William stretch, the distance is 1,243 miles. The rate is 26 cents per hundred pounds for export and 26 cents for domestic. The 26 cents works out at -3 cents per ton mile and for 100 miles per ton the rate is 30 cents-just one-half. Yet the minister rose in his place to contend that we were on a level with the rates to Fort William. I want to put on record another comparison-Red	Jacket to Fort
William, which is under the Crowsnest pass rate. The distance is 646 miles, four miles greater than from Calgary to Vancouver, and the rate there is 18 cents per hundred pounds. How can the minister say that the rates for export through the Pacific coast ports are equal, or that we are enjoying Crowsnest pass rates? I dispute that statement. I do not want to be drawn into a controversy over export rates; that can come up later. I want to develop the argument that we in British Columbia are being soaked in connection with the grain requirements we use in that province. The minister made the statement that at the present time the railways are having financial difficulties and that this would not be the proper time for a change inasmuch as it would mean a loss in revenue. Let us see what they are doing as regards passengers, and compare that with the freight business. I suppose he would argue that this is not the proper time to reduce passenger fares.


Robert James Manion: No; I agree with my hon. friend in that regard.


Thomas Reid: Yes, but he stops at passenger fares. He takes the view that it is all right to induce passengers to travel, but when it comes to encouraging freight, oh no.


Robert James Manion: The reason is that passengers are all being carried by motor busses and we want to have passengers on the railways.


Thomas Reid: Well, if no change is made in freight rates a great part of the traffic in this country will ultimately be carried by trucks. Last year I pointed out how many trucks had hauled apples from Okanagan to Vancouver. I showed also the traffic that was being carried by the railways before the trucks began to be used extensively. The trucks have entered into competition with the railways and no effort is being made by the railways to encourage that traffic. Even before 1925 every appeal that was made to the board of railway commissioners or to the railways themselves met with the argument now advanced by the Minister of Railways, that it would

Railway Act-Rates on Grain
never pay them to lower the rates. They used that argument when times were good, and as a matter of fact it is their stock argument: This is not the time to do it. The fact is that no time has been the right time so far as the railways are concerned; no time has been the right time from the point of view also of the Hoard of railway commissioners, and I suppose that no time will ever be the right time until parliament takes upon itself the task of compelling them to take the necessary action. Lower rates, I maintain would mean greater returns to the railways in consequence of increased traffic.
I am surprised at the attitude which labour has sometimes taken in this regard. Some of them seem to think that if freights were reduced it might result in the dismissal of some employees, and therefore some sections of labour have been rather opposed to the reduction of freight rates. I would point out to labour however that any time a reduction has taken place an increase in traffic has generally followed, with the result that more employees have been engaged. I do not believe therefore that there is any danger from that point of view, and past experience leads me to make that assertion. I have placed one or two figures on the record to show that the rates in the United States for coarse grains were lower than we in British Columbia have paid.


Robert James Manion: I know that my hon.
friend does not wish to misrepresent the situation. I have checked up these figures since, however, and I have statements from the board indicating that the hon. gentleman is wrong. He quoted, in regard to low grade grains in the United States, a statement which he held in his hand the other night-I think it is the same statement I have here-which shows that the domestic rates went out of operation about six months ago. They are not in force at the present time. I wished to correct my hon. friend before the evening was over, and I should like him to deal with that aspect of the matter if he will.


Thomas Reid: I will deal with that. Coarse
grains are carried from Cut Bank, Montana, a distance of 732 miles, at the rate of 38i cents per hundred pounds. How does that compare with ili cents for a distance of 642 miles to Vancouver and New Westminster? Is that a higher rate or a lower? I maintain it is a lower rate. The railways of the United States are carrying flour and coarse grains 732 miles for 38J cents under the new rate as compared with 4H cents for a distance of 642 miles, as paid by us in British Columbia.


Robert James Manion: But those were not the
figures the hon. gentleman gave the other night.


Thomas Reid: I gave 34i cents.


Robert James Manion: Which was wrong.


Thomas Reid: I still maintain that the rates there are lower. The minister may change the figures if he will, and I will take him up on any figure he likes to quote. From Billings, Montana, to Seattle, a distance of 1,012 miles, they are carrying coarse grains for 40^ cents per hundred pounds, carrying it at the rate of one cent per hundred pounds less, and for a distance of 1,012 miles as against 642 to Pacific ports.


Robert James Manion: But we are carrying feed grains for 30 cents, 10 cents less.


Thomas Reid: We were glad to get that small reduction, but may I point out that that is a temporary rate.


Robert James Manion: I do not think so.


Thomas Reid: Well, when it was introduced
in parliament it was stated by the minister that the agreement would last one year and at the end of one year it was said the rate would continue a little longer. If that is not temporary, what is it?


Robert James Manion: It has been in force two
years.


Thomas Reid: But it may be discontinued at
any time. At any rate it is only a sop handed out to keep us quiet. There is another aspect of this matter which I want to touch upon, something that is very important and that the minister has not discussed. While they are carrying coarse grains into the state of Washington, a greater distance and for less, they are also carrying produce from Washington state to the Atlantic; and are carrying eggs and butter at cheaper rates back to Chicago and New York than the rate charged us from British Columbia. So that both ways the railways in the United States are carrying coarse grains at a cheaper rate, and are besides carrying the produce of the American farmers into the eastern markets at a far lower rate than we in British Columbia are charged in connection with our produce.
I maintain that the attitude of the Canadian Pacific Railway has been one of obstruction so far as British Columbia's effort for redress is concerned. I would point out to the minister that the Canadian Pacific Railway, the dominant railway in this country, has taken an attitude of hostility to British Columbia. In carrying grain to the Pacific
Railway Act-Rates on Grain

coast the Canadian Pacific Railway have an advantage first of all of 132 miles over the mileage of the Canadian National railway, and in addition they receive $3.50 for every car of grain that goes by the Canadian National to the coast. The Canadian National is therefore penalized a total of $8.75 per car on all grain that goes into the city of Vancouver, and of that amount the Canadian Pacific take $3.50, so that they have the advantage over their competitor by that sum and they also benefit by the fact that the mileage from Calgary to Vancouver is 132 miles less, which is a very considerable advantage, because that distance, I believe, means the services of more than a day's train crew. I understand a crew runs about a hundred miles a day.
As regards the people in central Canada, the population from the great lakes east in Ontario and Quebec get their feed and flour requirements carried there at half the cost that we do in British Columbia, with the result that the eastern farmers, those who go in for stock raising and so on, are able to obtain their bran and shorts and mill feed requirements much cheaper than we can do in British Columbia, although they are further removed from the wheat fields than are the people of our province. Thev are able to get that advantage ovring to the fact that when grain leaves for the east, there is no such thing as a domestic rate: the grain is designated simply as grain; but when it leaves for western points the railways designate it as either for export or domestic, although both kinds of grain are carried alongside each other by the same train crews over the same route and at the same time.
As regards the board of railway commissioners I do not know w'hether it was the fault of there not being a chairman that we lost the appeal last fall; but when one looks over the evidence one can realize-and I say this in a kindly spirit-that we could hope for little from the acting chairman, because ever since he has been a member of the board his decisions have been against appeals made by British 'Columbia. After consideration, in my opinion the board of railway commissioners have never protected the western provinces.
Might I point this out for the benefit of the house: British Columbia is paying much higher rates not only for her grain requirements but for all products shipped to the east, and I am surprised that the east has not given that province support in her fight for equality, because British Columbia has I believe dealt very kindly with the reanu-
[Mr. Reid.l
facturers in the east. In 1933 it is estimated that British Columbia bought from eastern Canada a total of $81,000,000 worth of goods, and all eastern Canada bought from that province in that year was $4,500,000 worth, so that the advantage is all in favour of the east.
The minister in his remarks-and I was very sorry to hear him make this statement- almost threatened the Liberals. He said: "The government is going to turn down this bill and I warn the Liberals that thev had better be very careful before they get into power, if they do so, how they vote on this bill." He also took a little time to put on the record how many appeals had been made to the board of railway commissioners, and he said that out of forty-eight appeals only some three had been allowed. He was telling us in plain language: You people from British Columbia might just as well quit fighting for your rights; parliament is not going to do anything for you; you need not go ,.o the board, nor need you appeal to the governor in council, because since 1904 the governor in council has only dealt with three appeals out of forty-nine. Is it any wonder that in that province you hear some people saying we should secede from the east? I am not advocating that we should do so; far be it from me, but it is little wonder that the minds of the people are turning toward secession when they realize the treatment they have been receiving for many long years. And might I point out if British Columbia had her own customs and excise, something she had before confederation, she would not be as badly off as she is to-day; she could probably then take care of the freight rates, or at least the burden would be a little easier on her people.


Robert James Manion: I do not like interrupting, but as the hon. member knows I have no privilege of reply because he is closing the debate, and I know he does not desire to give the record wrongly in any detail. I mentioned one in an interjection I made a few minutes ago. The other evening he stated that from Montreal to Ottawa the old Canadian Northern cost $187,000 a mile. My question is: Did he not include in that-and I believe he did-the cost of the Mount Royal tunnel of $13,000,000? I am informed that he did, and I should be glad to have him deal with the matter.


Thomas Reid: As to that I am not at ail sure, but the record from which I obtained the information and which I have under my hand gives no account of the Montreal tunnel.

Railway Act-Rates on Grain
This came up in evidence before the board of railway commissioners and Commissioner Oliver is the authority I quote.


Robert James Manion: I believe the hon. gentleman is correct about that. I am informed that it did include the Mount Royal tunnel.


Thomas Reid: Even if it did, why should it not? Was it not a cost? That does not detract at all from my argument.


Robert James Manion: Except as speaking of one particular section with the very high cost of a tunnel added to it.


Thomas Reid: I have not added the cost of the Quebec bridge, which cost $30,000,000; that would be a higher cost per mile.


Robert James Manion: The hon. gentleman objected to my adding in the mountains, so I was just wondering.


Thomas Reid: Neither the minister nor any other person, I say in all kindliness, has ever been able to disprove the statement that it cost less to construct the railways into British Columbia; the construction, maintenance and operation costs in the east were higher. If I had time I would be able to show that the grades into Fort William are steeper than the steepest in British Columbia. I was rather surprised to realize this; I looked them up again only to-night. However I see my time is going on, but whenever the minister wants to stage a debate on this, why that is all right with me.


Pierre Édouard Blondin: The hon. gentleman's time has expired.


Robert James Manion: May I be permitted with the consent of the house to suggest that the hon. gentleman be allowed to go on for about ten minutes more-


Thomas Reid: Five minutes more.


Robert James Manion: -five minutes more, because I did interrupt him a number of times.


Some hon. MEMBERS:: Carried.


Thomas Reid: I will come down now to my final appeal, and I thank the house for allowing me the extra time. The minister might review very carefully both lines of railway. We are to-day looking for a solution of our railroad problem, and in looking over the roads I have come to the conclusion that so far as British Columbia is concerned the Canadian National could probably be used more and to better advantage for the hauling of freight at least than could the Canadian Pacific. The Canadian National is a more recently built railroad and it has the finest and best grades in Canada. When one considers that the same type and weight of engine can take fifty cars of grain by the Canadian National as against eighteen to twenty cars by the Canadian Pacific, I think my suggestion is very obvious. One must not lose sight of the fact that only sixteen per cent of the Canadian Pacific is main line-I refer to the prairies-and over eighty-four per cent are branch or secondary lines, which are more costly in operation.
I will close by making a final appeal to the house. Apparently the board of railway commissioners have told us that owing to past judgments we need not come before them any more, that the case is finally disposed of. I have an appeal before the governor in council, which is slightly different from what is sought by my bill. It asks that rates on feed grain and mill feeds be reduced to the level of export rates. This bill asks that the Crowsnest rates apply to all grain and grain products coming into British Columbia for domestic purposes. Surely I have a right to come to the court of last resort. I am not bringing into the house the general question of freight rates. Even in 1925 the government did not object very strongly to the bill on the Crowsnest pass rates; they said "carried on division." They were careful not to register a vote against the Crowsnest rates being put into effect. We are asking only for the same consideration on feed grains and mill feeds as this parliament by statute in 1897 and again in 1925 gave to the east and the maritime provinces. I am appealing for support from all members including the eastern members. I have no fault to find with the members from the maritimes; they have a case of their own, but might I point out to them that, leaving aside the fact that they get between six and seven million dollars returned to them by way of subsidy, their schedule rates are lower than in British Columbia. Surely they can join with us at this time and give us the justice that we have been seeking to obtain for the last twenty or thirty years.


Mr. BARBER:: If I may ask the hon.
gentleman a question, as one who has represented the provincial government in this case before the board of railway commissioners, do I understand him to say that the appeal has been carried to and is now before the governor in council?


Thomas Reid: I said that the appeal before
the governor in council was a little different from the present bill. The appeal I made to the board of railway commissioners and which is now before the governor in council asks that the rate on feed grains and mill feed
Railway Act-Rates on Grain

be reduced to the export basis. The present bill asks that the Crowsnest pass rates apply on all grain and grain products going to British Columbia for domestic purposes.


Robert James Manion: I	was paired with the hon.
member for Ottawa	(Mr. Chevrier). Had
I voted I would have voted against the	
motion.

The Budget-Mr. Myers


Mr. HEAPS:: I did not vote on the motion because the assistant clerk did not look this way. Had I voted I would have voted against the motion.


Mr. BOTHWELL:: I was paired with the
hon. member for Hastings-Peterborough (Mr. Embury). Had I voted I would have voted for the motion.


Mr. VALLANCE:: I was paired with the
hon. member for Wentworth (Mr. Wilson). Had I voted I would have voted for the motion.


Frederick George Sanderson: I was paired with the hon. member for Haldimand (Mr. Senn). Had I voted I would have voted for the motion.


Mr. McINTOSH:: I was paired with the
hon. member for Winnipeg South Centre (Mr. Kennedy). Had I voted I would have voted for the motion.


Mr. GAGNON:: I was paired with the
hon. member for Bellechasse (Mr. Boulanger). Had I voted I would have voted against the motion.


Mr. ANDERSON (Toronto-High Park):: I was paired with the hon. member for North York (Mr. Mulock). Had I voted I would have voted against the motion.


Mr. MacINNIS:: I was paired with the
hon. member for Queens (Mr. McLure). Had I voted I would have voted for the motion.


Mr. MOORE (Ohateauguay-Huntingdon):: I was paired with the hon. member for Chicoutimi (Mr. Dubuc). Had I voted I would have voted against the motion.


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


Mr. GOULET:: I was paired with the hon. member for Carleton (Mr. Garland). Had I voted I would have voted for the motion.


Mr. BLAIR:: I was paired with the hon.
member for Peel (Mr. Charters). Had I voted I would have voted for the motion.


Mr. DAVIES:: I was paired with the hon. member for Bow River (Mr. Garland). Had I voted I would have voted against the motion.


Mr. BUTCHER:: I was paired with the
hon. member for Portage la Prairie (Mr. Bums). Had I voted I would have voted for the motion.


Mr. GOLDING:: I was paired with the
hon. member for North Perth (Mr. Wright). Had I voted I would have voted for the motion.


Mr. SEGUIN:: I was paired with the hon. Postmaster general (Mr. Sauve). Had I voted I would have voted for the second reading of the bill. .


Charles-Philippe Beaubien: I was paired with the
hon. member for Champlain (Mr. Baribeau). Had I voted I would have voted for the second reading of the bill.


Mr. VERVILLE:: I was paired with the
hon. member for Quebec-Montmorency (Mr. Dorion). Had I voted I would have voted for the second reading of the bill.


Mr. DUBOIS:: I was paired with the hon. member for St. John-Albert (Mr. Bell). Had I voted I would have voted for the second reading of the bill.


Mr. DESROCHERS:: I was paired with
the hon. member for Essex West (Mr. Robinson) :	Had I voted I would have voted for
the second reading of the bill.


Mr. BRADETTE:: I was paired with the
hon. member for Queens-Lunenburg (Mr. Ernst). Had I voted I would have voted for the second reading of the bill.


Mr. LAFLECHE:: I was paired with the
hon. member for Drummond-Arthabaska (Mr. Girouard). Had I voted I would have voted against the second reading of the bill.


Pierre Édouard Blondin: There being no further
business under private and public bills, the house will revert to the motion that I do now leave the chair for the house to resolve itself into committee of ways and means.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment of Mr. Ralston.
John Howard Myers: Mr. Speaker, in rising to say a few words on the budget I wish first to congratulate the Minister of Finance (Mr. Rhodes) on what I consider was the clearest and most complete statement of the business of the country that Canada has heard for many a day. I wish also to congratulate the Prime Minister of Canada and
The Budget-Mr. Myers

the present government for having so conducted the affairs of Canada during the five difficult years through which we have just passed as to make the delivery of such a budget possible.
I listened with my usual interest to the hon. member for Shelburne-Yarmouth (Mr. Ralston) who always acts as the financial critic for our friends on the other side. I have always admired the cleverness of an orator and, may I say that on former occasions the hon. member for Shelburne-Yarmouth has excelled himself as a financial critic. To-day however I felt sorry for him, because at the beginning of his remarks he was attempting to criticize the budget of a government whose actions have met with the approval of the Canadian people. Throughout his observations the hon. member laboured very hard to make the best of a very bad cause, and had it not been for the fact that he is a skilful lawyer and has an exceptional gift of oratory, I do not believe he would have succeeded. Listening to him this afternoon I concluded he was a much better lawyer than politician and a much better politician than Canadian citizen, or he would never have attempted to criticize the budget presented by the Minister of Finance.
Canada has come through four or five very difficult years; these have been trying times not only in our history but in the history of the whole world. It is pleasing to note that notwithstanding the fact the government faced an almost impossible situation when it came into office, both as to finances and as to trade, we now have succeeded on ordinary account to the extent of having a substantial surplus to our credit. It is pleasing also to note that the Minister of Finance has budgeted for a surplus approximating about $21,-
000.000 for the coming year.
Unfortunately problems over which this government or the governments of any country have little or no control must enter into the picture. In Canada we are faced with a railway problem and must decide what we will do with it. It is not necessary nor is it my intention to follow the many figures quoted by the hon. member for Shelburne-Yarmouth, -but in passing I should like to say that all hon. members are interested in the Canadian National Railways. We wish all our railways well, and it should be the aim and object of every true Canadian citizen to try in every way to promote the interests of those railways. Especially should this be true so far as the Canadian National is concerned, because the Canadian -people have a direct interest in that system. I believe the railway management as at present constituted

is doing its very best under difficult circumstances. I would go further and state that railway employees throughout the dominion are loyal to the railway system, whether they be connected with the Canadian Pacific Railway or the Canadian National Railways. They are endeavouring to the best of their ability to further the interests of the roads with which they are connected.
We need not look very far to encounter some of the difficulties. Hon. members opposite will say that the high tariff policy of the Conservative party has clogged channels of trade, that we have done this, that and the other thing, and that we have not acted in the interest of the railways. One need only walk down the streets of this city of Ottawa to observe one factor which has had an adverse effect on the development of our railways. The condition, which I shall describe in a moment, is common to every country and at present I can see no way of getting rid of it. As a matter of fact I do not believe the people of Canada would want to get rid of it. I refer to the motor trucks and the large transportation outfits we see in our cities and on our highways. Only to-day I saw on Bank street the largest transport I have ever seen. It had come to Ottawa from the city of Montreal, and is operating in competition with the railways in which we have an interest. I do not know what can be done about it. The figures given by the Minister of Finance would lead us to believe that trade is recovering quickly, and it would seem to me that in years to come the railways may make a -better showing than they are now making. Yet I am not prepared to say, in view of what may be seen abroad in the land to-day, that -our railways will ever be able to make revenues and expenditures balance. We must make up our minds to assist the railway by subsidies, by payment of their deficits or by whatever method may be found necessary.
One fact is certain, namely that we cannot do without railway facilities. The great distances to be overcome, the heavy commodities to be transported, such as wheat from western Canada, coal from the maritimes and Alberta, lumber and farm products from other sections of the country which can be moved only -by railway, lead us to believe that railways are a necessity, and that being so we should do our very best to assist them in every possible way.
Much has been said about the unemployed and unemployment relief. I believe the government has dealt with those problems most generously. All h-on. members regret that a

The Budget-Mr. Myers
portion of our citizens is unemployed, and regret further the fact that many of our people have found it necessary to accept relief. Possibly more are depending on relief than should be depending upon it. However, be that as it may, we must face the problem of unemployment and deal with it as best we can. I repeat that this government has been most generous in the way it has dealt with relief, with the unemployment question and in its treatment of the different provinces and municipalities. 1 noticed in the press of this morning that about eighty mayors of different cities throughout Canada met yesterday in Montreal. There is no reason why mayors of cities should not meet, but we know that sometimes at their meetings they make strange statements and pass stranger resolutions. So far as unemployment relief is concerned they were of the opinion that all they had to do was to pass the responsibility over to the dominion government. They would let the dominion government put up the money and foot the bills of the cities, the municipalities and the provinces. While reading the newspaper article and again while the hon. member for Shefburne-Yarmouth was speaking so eloquently and stating his belief that after the next election the Liberal party would be returned to power, I thought it strange in view of the assurance which he seemed able to give the house that the mayors who met in Montreal yesterday had not postponed their meeting about six months until the right hon. the leader of the opposition (Mr. Mackenzie King), so famous for his generosity as expressed in 1929, came back into power. Then all they would have to do would be to come to him and he would hand out five cent pieces for the whole Dominion of Canada.


Mr. QUINN:: He said, "Not a five cent piece."


John Howard Myers: The Dominion of Canada, along with the rest of the world, has been facing difficult times, but we have another problem on our hands which has not faced the other countries. I refer to the drought stricken areas in the western provinces, a most unfortunate situation. I had the privilege of going through that country two years ago and I saw what it looked like. As a farmer I am able to realize what it means to a man to go out in the spring of the year with high hope in his heart to put in a crop which he may never reap. I commend this government for every effort put forth on behalf of these people in the western provinces who have been stricken so severely. Not a dollar spent on
their behalf has been wasted, and it is a credit to this country that this problem has been dealt with in such a generous manner.
The hon. member for Shelbume-Yarmouth sought to convey to the house and to the country the impression that the present government has always tried to increase the tariff. To my mind nothing is further from the truth. Ever since this government came into office it has been seeking in every way possible to clear the channels of trade and to lower the tariffs against countries which show an inclination to do the same thing for us. Time will not permit me to go into this matter to any great extent, but figures have been placed on Hansard time and time again in connection with the tariffs of other countries, both at present and for the past five or six years. I could give the tariffs at present prevailing in Germany, in France, in Italy, in Czechoslovakia, in the Argentine, in Ireland and in many other European countries, but these have been given time and time again and no purpose would be served by repeating them. Whatever my opinion may be worth, it is that the tariffs of these countries are at least fifty per cent higher than they should be. There is one fact which I would draw to the attention of hon. gentlemen opposite: these tariffs were raised during the life of the previous government. There is not one single instance that I know of where an increase occurred in the tariff of a foreign country since this government came into office.
We were told by the Minister of Finance that since this government came into office and through the workings of the Ottawa agreements the tariff has been reduced on 250 items while 150 items have been put on the free list. This was done to facilitate the movement of trade and commerce between the different parts of the British empire. A reading of the reports issued by the bureau of statistics or of the newspapers of the country will show an increase in trade and commerce brought about by these agreements.
. A statement was made the other evening which I cannot allow to pass without correction. The debate on the budget is more or less a free for all fight and an hon. member is entitled to bring anything he wishes to the attention of the house. I have not the pleasure of the immediate acquaintance of the hon. member for Laprairie-Napierville (Mr. Dupuis) and I cannot say whether he is in the house this evening, but on March 21 he made the statement that this government had increased the duty on potatoes since coming into office. This statement will be found on page 1951 of Hansard. If there
The Budget-Mr. Myers

is any one thing that I claim to know a little about, it is potatoes, potato shipments and tariffs on potatoes. I took the trouble to find out just what had happened in connection with the duties against potatoes. My information is that prior to May 2, 1930, potatoes which were imported into Canada from the United States were subject to a duty of 35 cents per hundred pounds. Under a tariff change which went into effect on May 2, 1930-


Felix Patrick Quinn: A Liberal government.


John Howard Myers: -potatoes entering Canada were made free of duty with the proviso that should any country impose a duty against potatoes from Canada, an equal duty would be imposed against potatoes coming from that country.


Felix Patrick Quinn: A countervailing duty.


John Howard Myers: That was one of the countervailing duties in the Dunning budget. On May 2, 1930, the United States imposed a duty of 50 cents per hundred pounds against potatoes from Canada and a countervailing duty of the same amount immediately came into effect. Under a tariff change which occurred in the United States on June 18, 1930, the duty was increased to 75 cents per hundred pounds and a similar countervailing duty was immediately put into effect in Canada. After this government came into office and during the short session of 1930 the countervailing duty was repealed and replaced with a straight duty of 75 cents per hundred pounds. This duty was imposed subject to the maintenance by the United States of the same duty against our potatoes. At that time I happened to be in the very thick of this fight, as I was a director of the Prince Edward Island Potato Growers' Association. I should like to quote the president of the association as follows:
The greatest national service the Prince Edward Island Potato Growers' Association rendered was in 1929, when the industry was threatened by a tariff duty on the part of the United States which would have completely lost to Canada the large markets already mentioned had it not been for the prompt and insistent efforts of the Prince Edward Island Potato Growers' Association, backed by the organizations it had built up in New York, New Jersey and the southern states. The association, through these organizations as spokesman, employed an outstanding firm of barristers in Washington, specializing in tariffs, prepared and submitted an intensive brief to the committee on ways and means of the United States House of Representatives, covering years of marketing, and vigorously set forth reasons protesting against any further increase in tariff.
fMr. Myers.]
The association, without the help of any dealers either in this province or any other province of Canada, faced this crisis alone; and at a cost of approximately twenty thousand dollars, five thousand dollars of which was later paid by the provincial Department of Agriculture, were successful in preventing the duty on potatoes from being raised for the 1929 crop; when some time later the tariff was increased, the increase was kept down to 25 cents a hundred pounds.
It was the intention of the Americans at that time to put on a duty of SI per hundred pounds against Canadian potatoes going into that country, and it was only through the efforts of the potato growers' association of Prince Edward Island that the duty, was kept down to 75 cents. There was so much heat over the question in the United States, and the state of Maine fought it so vigorously, that the congressmen from that state refused on that occasion to take their seats in congress until the president assured them that a tariff of 75 cents would be placed against Canadian potatoes. Let me tell the hon. member for Laprairie-Napierville that when next he undertakes to discuss the tariff on potatoes he had better first acquaint himself with the facts which he intends to present to this house.
I understand that I have but twenty minutes left, and I will use the time to my own advantage and that of the province from which I come. Every man can best discuss the things he knows most aboult, and I desire in the short time that remains just to tell this house what we in the maritime provinces think of the late Liberal administration, the treatment we received from them, and also the treatment that has been accorded us as maritimers and, speaking for my own province, as Prince Edward Islanders, during the term of the present government.
Prior to 1926 the maritime provinces, and I believe rightly, considered that they had not been getting fair treatment from the federal government. I am not here to say whether or not the contention was jusitified, though I believe it was. At any rate, the Liberal administration, taking cognizance of these protestations from the maritime provinces, in 1926 appointed a commission to deal with these maritime claims. That body was known as the Duncan commission and was headed by a very clever man in the person of Sir Andrew Rae Duncan, from the old country. It carried on its investigations, and here I should like to read to the house a part of the conclusions at which the commissioners arrived:
The terms of readjustment-

The Budget-Mr. Myers
That is, speaking of financial readjustments between the maritime provinces and the federal government.
-are Obviously a matter for detailed determination and assessment, so that the actual amount- as well as the reasons and purposes attaching to it-can be recognized by the rest of Canada as fair and equitable. It is not posible, therefore, to make a final recommendation as to the increase and form of dominion aid which is required to satisfy the just claims of the maritime situation,-
The house will pardon me when I say that I took the privilege of underlining those two words, "just claims."
-but we recommend that the dominion government should give immediate consideration


Peter John Veniot: I know that the hon. gentleman wishes to state the facts, but does he mean to say that up to the present time the interim payments have never been made?


John Howard Myers: The hon. gentleman misunderstood me. I said that the situation was so desperate that the Duncan commission recommended, and there were made, interim payments. But the final settlement was never made until this present session of the House of Commons. This government does everything in a businesslike way and it appointed the White commission, whose report I believe is in the hands of hon. members-I received mine a few days ago. I was pleased to note 92582-135
that that commission gave Nova Scotia an additional $425,000; New Brunswick $300,000; and Prince Edward Island, $150,000.
The question I would put to my Liberal friends from the maritime provinces-and I might include in this the hon. member for Gloucester (Mr. Veniot), though he will never be back in this house-


Peter John Veniot: What!


John Howard Myers: Does he think he will?


Peter John Veniot: I am sure of it.


John Howard Myers: I am very glad to have that assurance from the hon. gentleman, because I have come to be very fond of him during the last four or five years, but my information is that he is to be beheaded at the end of this session. The question I want to put to my Liberal friends from the mari-times is this: How will you justify yourselves in the eyes of the people for keeping Nova Scotia out of $425,000 for the past nine years? How will you justify yourselves in the eyes of the people of New Brunswick for keeping that province out of $300,000 for the last nine years? And I shall be happy to go back to the people of Prince Ediward Island and tell them that when we wanted the terms of the Duncan commission's report fully implemented we had to come to a Conservative government led Iby the Right Hon. R. B. Bennett to have it done.
There was another question that was agitating the minds of the people of my province, another recommendation of the Duncan commission, and that is with respect to the car ferry between New Brunswick and Prince Edward Island. It was recognized by the Duncan commission that there is a pact of confederation between our province and the federal government that there shall be maintained continuous steam communication between that province and the mainland the year round. That is a contractual obligation; those were the terms under which we were induced to come into the union. Even though that obligation is there, under the Liberal administration they continued to charge up the cost of the operation of that car ferry to the Prince Edward Island Railway, so that when we wanted any improvements on our island railway we were always met with the fact that there was a huge deficit which was attributable to the operation of the car ferry that was a direct responsibility of the federal government. Here again let me say that that situation was not rectified, we were not able to have our claim in that regard corrected until last session, 1934, and the credit for

The Budget-Mr. Myers

having that done goes to the present Minister of Railways (Mr. Manion). Further, under Liberal rule, when we crossed on that car ferry we were charged $4 for an automobile one way and $7 return. Last session we were able to present our claims in that regard to the Department of Railways at Ottawa, and again with the sympathetic help of my good friend the Minister of Railways we were able to have that charge for automobiles crossing on the car ferry reduced to 82 one way and S3 return. Therefore when any hon. members visit our province during the coming tourist season-and I hope they will all do so-it will cost them only the very small sum of $3 for a return ticket for their automobiles crossing between Prince Edward Island and New Brunswick.
I have a great many notes before me and would like to have been able to take the time to develop them fully, but there is no use in skimming over a subject. Therefore 1 will mention just one more item. I would like to put this question to the Canadian people: We all realize now the advantage to Canada of the empire trade agreements that were entered into in 1932; every man who is fair realizes it. But let me point out to the house that this measure together with every other that has been brought before us by the present administration has received the sternest opposition at the hands of hon. gentlemen opposite. The question that I want to put to the Canadian people, that I want to put to the electors in my constituency at the present time, is this: Those agreements were made for a term of four years and naturally that term is up in 1936. Whom do you as Canadian electors want to have to renew those agreements? Will it be hon. gentlemen opposite who have fought those agreements in season and out of season when they were going through this house for ratification? Is it hon. gentlemen opposite to whom you want to entrust the renewal of those agreements, or is it to the man who had brains and courage enough to go over to the old country, to tell the authorities there what he wanted and to come home with the bacon?
Just one more point and I shall be through. I speak now of the farm loan act. I am sorry to have to hurry over this because there are many other matters that I should like to speak about, but I shall wind up with just this one. In the budget speech of the Minister of Finance there is a statement that struck my attention very forcibly. In speaking of the Farmers' Creditors Arrangement Act, one of the many advantageous measures

that the government has had passed on behalf of our farmers, the minister made this remark:
Admirably supplementing this act is the new Canadian farm loan legislation which provides for releasing to agriculture ample government funds at the cost to the government plus the expense of administration. Changes in the organization of the farm loan board will make it possible to bring these funds to efficient farmers in all provinces with a minimum of red-tape and a maximum of expedition.
I am more than interested in that farm loan act. I am a farmer myself, and without being egotistical I doubt if there is any other man in this chamber or indeed in Canada who better understands the difficulties that have beset the farmers of the dominion for the past five years. The situation was well outlined to us to-day by the hon. member for Shelbume-Yarmouth, although it rather amused me to hear a lawyer talking about the problem of marketing wheat. The situation among the farmers to-day is this: The farmer who has held his own in the last five years has done wonders. But time never stops. In the last five years the farmers of Canada have not been able to lay aside any money. We have boys growing up. What are we going to do with them? We have made no money in the past five years to buy them new farms. Are we going to let them drift into the cities, to go into the relief camps, to swell the ranks of the unemployed, or are we going to try to buy them farms and keep them in the country where they should be? To my mind that is the use that should be made of this farm loan act. I know of many fathers to-day who would like to be in a position to buy farms for their sons; but they have not the money; they have not made a dollar clear in the last five years. A boy who was twenty years old five years ago is now twenty-five; if he is worth his salt as a young Canadian he is thinking of establishing himself, of making a home for himself, and he should receive the encouragement that I believe he will get under this farm loan act. I hope to see this legislation made use of in every province, so that money will be available at a low rate of interest for farmers who want to buy farms on which to settle their own sons and thus prevent them from drifting into the cities as too many have done during the past few years. There is no doubt that one of the great difficulties that we have in Canada today is that too many people have forsaken the farms and have drifted into the cities. I heard a great deal of discussion the other

The Budget-Mr. Coote
night in the house about relief camps. Let me say at this point that these camps are not employment but unemployment camps, and one point that should be impressed upon every young man in them is this: You should try to get out somewhere; get a job for yourself; make yourself independent, self-reliant, so that you will not have to be leaning on the state or the taxpayers. There is a great deal more that I could say, but my time is about up and when a man is through, I think the correct thing to do is to stop.


The Acting SPEAKER (Mr. Smith, Cumberland) :: The hon. member has spoken for forty minutes.


John Howard Myers: I will bow to your ruling, sir, and sit down, with this prophecy, that when the next election is over, the present Prime Minister (Mr. Bennett) will be back to lead this house and this government.


Mr. G. G. COOTE (Macleod):: As I have only forty minutes, I shall not attempt to follow the speech made by the hon. member for Shelburne-Yarmouth (Mr. Ralston) this afternoon or the one made this evening by the hon. member for Queens (Mr. Myers), particularly as I have an amendment of my own to move. For the last five years the Minister of Finance (Mr. Rhodes) and his predecessor have struggled in vain to balance the budget;
Dominion fiscal year 1933-34 (net figure- interest receipts deducted from revenue
anil from interest payments)	
Provinces, fiscal years ended 1933. except B.C.,
where 1932 figures are used (gross)	
Municipalities. 1932 (gross)	
they have practised the most drastic economy that could be thought of and tried all sorts of new taxes, but in spite of their best efforts the total deficits of the five budgets they have introduced amount to over $600,000,000. I am not criticizing them for not balancing the budget, but I do feel like criticizing them for adding this amount to our interest bearing debt. The additional interest bearing debt amounts to $60 for every man, woman and child in Canada.
I have here the figures of the total public debt and I should like to put them on Hansard, but I do not think time will allow me to give the details, except to say that the total debt of the dominion, the provinces and the municipalities, both direct and guarantees, as of March 31, 1934, was shown to be $7,160,000,000 and the total interest charge thereon $330,765,000. Most of this debt was created prior to 1929, and due to the change which has taken place in price levels, the burden is now equal to what a debt of $10,000,000,000 would have been in 1926 to 1929.
I have also a statement showing the total revenue, total interest charges and percentage which interest bears to the total revenue, for the federal, provincial and municipal governments in Canada. These figures are so illuminating that I should like to place them on Hansard.
	Total	Percentage interest charges to
Total	interest	totalrevenue	charges	revenue$313,323,040	$188,518,573	60.2183.188.327	62.546.592	34.1374.663,231	79.700,447	21.3$871,174,598	$330,765,612	38.0
We are spending the best of our energies in attempting to pay this interest. Speaking for myself I am growing very tired of it, and many others are also. The deficits, I said, amount to over $600,000,000, and of course the government revenue reflects in some degree the financial position of the people generally. Federal, provincial and municipal governments, struggling to balance their budgets, and the people, suffering poverty in the midst of plenty, are victims of the money policy of this government. That money policy is one under which our money is theoretically based on gold, in reality based on scarcity, because gold is the scarcest commodity known. It is a policy under 92582-135i
which money is king and everything else is subservient to money. The chances of the people to work, to produce, and to consume, are dependent on the whims of international bankers. For five years we have slavishly 'ollowed the policy dictated by the bankers of New York. The president of that country compared them to the money changers who were driven out of the temple. I believe Canada should have its own money policy. We should be masters in our own house, and we could then control conditions in Canada. The previous speaker (Mr. Myers) said we were victims of circumstances largely beyond our control; I say we are victims of a policy which is largely within our own control. If
The Budget-Mr. Coote

we would control our money policy we could make conditions in Canada so different from what they are to-day, that it would seem like another country. Had the government been less orthodox we might have followed a policy suited to our own needs as Australia did. I know that the Minister of Finance would be disappointed if I did not draw his attention to conditions in Australia. Australia abandoned the gold standard, stopped deflation, and the result of that and of the reduced interest rates was an increase of revenue to a point where they had budget surpluses instead of deficits. In 1931 their budget deficit was 853,788,000 as compared with Canada's $83,849,000. For the following years the figures are:
Canada	Australia
Year	Deficit	Surplus1932	
$114,000,000	$ 6,570,0001933	
220.000,000	17,730,0001934	
133,000,000	6,507,000
Then let me also draw attention to the amount of interest on the national debt in the two countries:
Year	Canada	Australia1931	
$122,229,000	$115,000,0001932	
125,643.000	83,061,0001933	
135.000.000	76.607.0001934	
139.894.000	73,797.000
The figures for Canada do not include interest paid on account Can. Nat. Railways.
It will be noted that in 1931 the interest payable on the Australian national debt was $115,000,000, but by the next year, 1932, without any material change in the amount of the debt, the interest charge was reduced to $83,000,000, an actual saving of $32,000,000 or 27 per cent. Between 1931 and 1932 a deficit of $53,000,000 was changed to a surplus of $6,570,000. These changes were brought about as a result of legislation reducing the rate of interest on both public and private debt, and the adoption of a different financial policy under which the gold standard was abandoned and the currency of Australia allowed to depreciate in foreign countries.
The real burden of debt is determined by the amount of goods that have to be produced ;o pay the interest. In Canada due to low price levels, it has been increased by over thirty per cent. In connection with these public debts that I have mentioned I think it is fair to state that public debt is immortal, it never dies, it lives forever. But we poor mortals must continue to pay interest on it, and the rate of interest is the most important thing to consider. In the final analysis it is more important than the amount of the debt. Australia not only reduced the rate of interest

by legislation but reduced the burden of debt on their people by raising the commodity price level. The price level for agricultural products in Australia for the last four years has averaged forty per cent higher than in Canada, yet the cost of living in Australia in June, 1934, was still one point below what it was for Canada.
The government of Canada to-day have many problems. I shall not attempt to list them all, but in addition to the debt problem we have a farm problem-which I consider the most important of all-an unemployment problem; and a railway problem. Under the present orthodox financial policy there is no solution of any of these problems. I make no apology for emphasizing the question of finance, as the budget deals primarily with the financial position of the country, and the solution of every one of these problems involves the question of money.
I want now to invite the attention of the house for a few minutes to this very important question of money. In this very complex system in which we live or are trying to live, speaking in the material sense, money is the most important factor. Man must have money for his three primary requirements, food, clothing and shelter. I will not enlarge on that, but merely tell the story I heard a few years ago about a man in this city going home one night and on one of the side streets he was held up by a thug who said: "Hand over your money or I'll blow out your brains." "Well, go ahead," the man said, "I can live in Ottawa without brains, but I can't live here without money." That, of course, applies to other cities besides Ottawa. The man who has all the money he wants can buy anything that it is physically possible to create. He can have anything for himself from a super airplane to a private submarine and everything in between. The man who has plenty of money to-day can live in a style that Solomon in all his glory never dreamed of. Mankind has always sought Utopia, and I think it is fair to say that the man with all the money he wants has found it; if he has not it is his own fault. Our scientists, engineers and workmen have solved the problem of production, in a comparative sense at least. We have over eight million horse-power mechanical energy developed and installed in factories and power houses. When that is harnessed to our modern, labour saving machinery, we have the equivalent of eighty million slaves to work for us, a nation of ten million people. As Stuart Chase

The Budget-Mr. Coote
says, we have eighty million big, black slaves that do not need to be either fed or clothed and that are willing to work for us twenty-four hours a day.
As the result of the work of our scientists, inventors and engineers we have a wonderful social heritage of which we are not making very good use. Our productive system was so efficient in 1929 that we were told we got into this depression through over-production. One of our leading bankers made that statement a few years ago, and one of his friends said the way out was to work harder. Every member of this house knows that if you get into a jam by producing too much you cannot get out of it by working harder, but perhaps we might get out by thinking harder. The banker does not realize, or this banker did not, that we have passed from the age of scarcity into the age of potential plenty, that the cause of the depression through which we have been passing was under consumption rather than over production. The cure is to consume more. We now have mass production, but of what use is it unless we can get mass consumption? The people would consume more if they had the purchasing power, and when I say purchasing power I mean money. A money system that would give us purchasing power sufficient to buy back what we can produce might be called the key which will unlock the door to the age of plenty. The present money system is obsolete. I have a clipping from the press which states that even Mr. Frank Vanderlip, past president of the National City bank, says the gold standard is abandoned forever. Let us hope he is a true prophet.
The next thing I should like to point out is that money is not wealth. Money is a title to wealth. Money is a purely artificial thing; as Stuart Chase says, it is a creature of man and strictly subject to his control. To-day money might be very well described as a system of tickets to goods, and when 1 say money I mean all purchasing power whether it is in coin, paper notes or bank deposits, and the bulk of our money is of this latter kind, that is, bank deposits. I should like to give some figures as of October 31, 1929; I take these figures because at that time we were supposed to be enjoying prosperity. Bank notes outstanding at that time totalled $1S5,000,000; dominion notes amounted to $211,000,000 while bank deposits amounted to $2,368,000,000. It is quite evident to any person, then, that at that time approximately $2,000,000,000 of bank deposits was created by bank loans. I need not labour this point;
I need only state that if within the boundaries of any nation you consider all the banks as one system, practically speaking, every bank loan and every bank purchase of securities creates a deposit. The repayment of a bank loan and the sale of a security by a bank destroys a deposit, and in the words of Right Hon. Reginald McKenna, " the amount of money varies only with the action of the banks." Some people think the amount of money does not vary; they say there is just as much money in the world now as there ever was, but generally they wind up by asking where it is. That is not true; the amount of money does vary. That is well illustrated by the case of the United States, where in 1929 bank deposits amounted to $55,000,000,000, while in 1933 those deposits had shrunk to $38,000,000,000. In other words, $17,000,000,000 worth of money had disappeared in that country. I asked the banker who gave me these figures where that money went, what became of it, and he said, " Why, it was destroyed."
The bulk of our money to-day is credit extended by the banks. That credit is created by the action of the bank when it takes our chattels, our goods or our bonds as security and writes for us a credit in its ledger. Money, then, is largely a system of bookkeeping, and I would suggest that the first step we should take in order to get out of this condition of poverty in the midst of plenty should be to institute our own system of financial bookkeeping. Establish a national bank, or credit house, call it what you will -we could use the Bank of Canada. Then make the right entries in the financial books. That is the first step to take to solve this problem of distribution, which is the greatest problem facing this and almost every other civilized country to-day. The problem of distributing among the people the goods which they are able to produce is without a doubt the greatest problem we have to face. On what basis should the entries be made in the financial books? I would say on this 'basis, that what is physically possible should be financially possible, and I challenge any hon. member to say why any proper financial system should not be of that kind, capable of making financially possible everything that is physically possible.
It was proved during the war that this could be done. We financed the war not by borrowing but by creating the money in Canada. Whenever we wanted anything for the army, if it was physically possible to create it we did so, and we created the money. We never failed to create anything
The Budget-Mr. Coote

that was required by the army if it was physically possible to create it; we did not say, "We have no money; we cannot afford it." But that is what we have been saying to the unemployed and the poor farmers in this country. We could afford it if we had the right system. The present system does not reflect reality; we are told that things which are physically possible are not financially possible. Many things are physically possible, socially desirable and almost necessary; in fact they are necessary, yet we are told that we cannot have them because there is no money. We suffer to-day under the tyranny of money, and money is an awful tyrant. As Lord Melchett said, we have made money a rod for our backs. There is plenty all round us, but with the money system that exists at present we cannot have it.
Credit should be based upon the ability to produce goods as required, when required and where required. If this country and this government had the courage to do so a system could be set up under which credit would be issued on that basis. This credit should be issued without interest, and I want to say emphatically that credit and money can be issued without interest just as well as with interest. It should be issued in sufficient quantities to enable us to produce all the goods socially desirable and physically possible, for home consumption or for export in exchange for other goods.
I want to make it clear that what I propose would not interfere in any way with our ability to export goods; as a matter of fact it ought to enable us to export more goods, because I am sure it would enable us to produce them much more cheaply. At the same time we should see that there is sufficient purchasing power in the hands of the people to buy back all the goods we produce for home consumption plus the imports we receive in exchange for the goods we send out. What we suffer from chiefly at present is a chronic lack of purchasing power. Purchasing power, where it is required, must equal the selling price of the goods produced. To correct the situation which exists at present, this chronic lack of purchasing power, it will be necessary to issue credit for consumption. Under the orthodox system, in the main, credit is issued only for production, but what is the use of this production if we cannot consume it? So why not see that the amount of credit that is available for consumption will equal the value of our production, at fair prices, as I have said already?
fMr. Coote.]
We have in Canada a wonderful cultural heritage to which I have already referred, and we have a perfect right because of that cultural social heritage to distribute a national dividend in Canada. An accurate bookkeeping system will enable us to determine the amount of that national dividend. We have a competent bureau of statistics which could tell us the amount of goods produced, and we want a bank or credit house that will make the entries in the financial books which will equal the entries in the production books.
In other words, see that sufficient purchasing power is issued where it is needed to buy back these goods. Some people say, "Oh well, you would have inflation under that." We can guard against inflation, but at the moment there is nothing more needed in Canada than some reflation. You would have to have considerable of what some people call inflation to get us reflated back to the point where we could carry this terrific debt without sinking ourselves up to our necks in the mire. Some of this money which I am suggesting should be paid out for consumption would go to replace part of the money which is now created as a result of bank loans at six and seven per cent. The amount of money needed would have to be determined by the management. They would use the index of employment and the average price level just as the engineer would watch the throttle on his engine. He advances the throttle when he wants the engine to go faster and closes it down when he wants the engine to go more slowly.
May I quote from the Southampton Chamber of Commerce, a very respectable body indeed:
We must be able to spend money while the machine works.
And again:
Production should determine the basis of money and credit instead of money determining production, as it does now.
When men are displaced by machines they and their families must be fed and clothed. Our job to-day is to bring the machines under control; at present they are our masters. As Stuart Chase has said, money and the machine are trampling around through the populace as though they had equestrian rights from God. Our task is to lead them back into the stables, where they belong. Money and the machine, are both labour saving inventions, and they should be the servants of man. They have become our masters.
In considering what methods the government should adopt to distribute this pur-

The Budget-Mr. Coote
chasing power which I have suggested must be paid out I believe the standard we should use when we are deciding the proper measures to take should be that of the maximum of human happiness. That should be the standard by which all reforms which are passed or considered in this chamber should be judged. In the past we have used many false standards, one of which was called efficiency. Every day in the year we have sacrificed human happiness for efficiency. So far as I know we go through this life only once; I believe the good Lord intended us to be happy and placed in this world things which if properly used would be sufficient to make us happy. The first requisite to human happiness is economic security. How many people in Canada have economic security to-day? We have productive capacity sufficient to give every person economic security. After all, the term "economic security" simply means a guarantee of food, clothes, shelter and those comforts and services which we could easily supply to every person. With conditions as they are to-day, after five years of depression, when we have over 1,000,000 people on relief, about 600,000 unemployed, about 200,000 people over the age of twenty-one years who have never had any worth while jobs, and $1,600,000,000 of life insurance policies lapsed in the last four years, economic security has gone so far as most of our people are concerned.
Even before the depression the chances for economic security were none too good. Statistics gathered by a life insurance company in the United States covering the lives of one hundred men, starting at the age of twenty-five, show that at sixty-five they stood as follows:
42 dead.
1	wealthy.
2	well-to-do.
5 able to live off their savings.
28 still working.
22 destitute, living off the state or relatives.
Because of these conditions, with economic security gone for so many old people, I would suggest that we set up a superannuation system for all persons over a certain age, and that such payments be made by way of a national dividend. I would not be dogmatic about the age. In western Canada I would set it at fifty-five years, while in Ottawa I would have to raise it a little to, say, sixty years, so as not to shock any person. I would suggest that we set up a superannuation system for these people as we are now doing for judges, and civil servants, as banks do for their employees, as churches do for their ministers. Why should we not have a national superannuation plan for all our citizens? I have suggested the age of fifty-five or sixty years, and that we should guarantee work at decent wages for people under that age. I would not make a superannuation system compulsory, but would give it to those wishing to retire. I believe in a year's time we could retire
300.000	people and thus provide jobs for
300.000	young men and women who have been going without work. I had better make it clear that this plan would apply to the women as well as to the men. I am not going to be dogmatic as to the amount of superannuation, but I would suggest that phase of the matter would have to be worked out by our bureau of statistics. I am sure however that we would be quite safe in suggesting a beginning of at least $50 per month. I believe that that system would in the course of a year or so take care of at least 300.000 people and the extra purchasing power involved under the scheme I am suggesting would I am sure give employment to another 100.000. According to the census figures for 1931 there were gainfully employed in industry 79.000 people over the age of seventy years. 99.000 between the ages of sixty-five and sixty-nine and 354.000 between the ages of fifty-five and sixty-four. It would be safe to estimate that there would be more than 300.000 people over sixty years of age gainfully employed at that time.
May I point out to this house that in a report made to the president of the United States concerning the automobile industry it was stated that men of forty years weTe considered old in that industry. Even in Canada, if a man employed in industry or business is laid off after reaching his fiftieth birthday, does any hon. member believe that man could get another job? I do not believe he could.	'[DOT] j ijf .j


Mr. PECK:: Would you superannuate a man at forty?


George Gibson Coote: No, I have suggested fifty-five or sixty years. I would be content to begin at sixty years.


Edward Armour Peck: Would the hon. member
answer this question-


George Gibson Coote: Would the hon. member
mind asking his question when I have completed my speech? I have only forty minutes.
May I in this connection cite one incident which came to my notice. A coal miner in my constituency told me he had mined coal in Canada for thirty-two years, and in the old country for fifteen years, and was still at work. Although a frugal man he has not
The Budget-Mr. Coote

acquired sufficient funds to retire. This man has two sons over the age of twenty-one who have never worked. He said to me, " Why could I not be retired and my boys be allowed to mine the coal''? There are many men on our farms to-day who have reached the age of seventy but who still go out to the fields, drive their teams and engage in their occupation, a great deal of which is dangerous and which at their age they should not have to do. I do not think we can over stress the point as to the desirability of having economic security for all our citizens.
There are several other ways in which we could make use of a national dividend, and one of these would be to make provision for the widows and the blind. Disability and health insurance and grants to education should be financed in this way. It is my view we should make use of part of this national dividend to relieve the small taxpayer. And, last but not least-as a matter of fact this is one of the most important-we must take steps either by use of a national dividend or by some other method to restore the purchasing power of the people on our farms. Forty-five per cent of our people are on farms. Whereas in 1928 the average income of these farmers stood at SI,600, in 1933 it had gone down to $640. To my mind nothing could be more important than a restoration of purchasing power to these people, if we wish to bring back anything like a condition of prosperity. There are 728,000 farms in Canada. I would say that on the average one more man could be used on each farm. Suppose, however, that one farmer out of every four hired a man, they would in that way engage the services of about 200,000 young men and take that number from the ranks of the unemployed. In the reforms I have suggested tonight, and the means I have suggested of taking care of the unemployed, I believe provision could be made for all the unemployed men. There is a lot of work to be done.
I should like to say one more word with regard to what we could do for the farmers. I would call the attention of the house to what has been done in Australia. That country did not hesitate to bonus its wheat producers. During the last four years the commonwealth government has voted $44,000,000 for wheat bonuses to farmers. Last year they voted $58,000,000 to be loaned to farmers without interest for a period of years. These loans were to be made to farmers who found it necessary to make compromises with their creditors.

I should like to give a few statistics to show the amount of work which could be done on farms. There are 650,000 farm homes with no bath rooms with running water. There are
600.000	farm houses without radios, and
500.000	without telephones. There are 400,000 farms without motor cars, and less than five per cent of the farms have electric lights. Canada has the resources, the material, the engineers, and the workmen, so why not do the work? In addition to building houses, considerable work could be provided by creating safe railroad crossings and building additional national highways. I do not believe in work for work's sake, but in a young country like this there is much to do and we should be able to provide work for all those under a certain age. The time may come when there may not be work for all, but by that time I hope we shall be able to declare a national dividend for every citizen. It is to be hoped also that before that time arrives the people will have been educated for leisure. I should be satisfied to give the assurance of economic security to every man and woman who is willing to do his or her share. When that has been done they can develop the cultural side of their lives in a way that is not now possible.
The matter now before the house is the amendment moved by the hon. member for Shelburne-Yarmouth (Mr. Ralston). Personally I have no objection to this amendment, but I have been given the task of moving another amendment which expresses the views of the group to which I belong. This amendment contains a constructive suggestion to the government, but it does not fit in very well with the last clause of the amendment, which reads:
-and afford an additional reason why appeal to the people should not be longer delayed.
There is nothing that we here in this comer can do at the moment to accelerate or delay the date of the election. I desire to move, seconded by Mr. Maclnnis:
That the amendment be amended by striking out all the words after the word "Canada" and adding thereto the following:
"and would appear to be based upon the assumption that poverty and debt are inevitable conditions within the country;
and whereas the real and potential wealth of the nation, based upon our natural resources and our capacity to produce, is such as to make possible an abundant provision for all the requirements of our people:
Therefore, this house is of the opinion that the government should take immediate action to insure the fullest and most equitable distribution possible of our socially-created wealth and that, as a first step in this direction, the measures which may be necessary to meet the pressing needs of the farmers and the unem-

The Budget-Mr. Esling
ployed should be financed by the social credit of Canada, thus avoiding a further increase in the debt burden of the country."
Mr. W. K. ESLINiG (West Kootenay): Mr. Speaker, may I be permitted to add my congratulations to those of other hon. members to the Minister of Finance (Mr. Rhodes) on the presentation of his budget? I should like to express the hope that he suffered no discomfort this afternoon because of the gas bombs which were hurled across the floor of the house. We can hardly expect hon. members opposite to be enthusiastic over a Conservative budget, and especially one which reflects so favourably the accomplishments and businesslike achievements of this administration. No more can we expect hon. members opposite to be enthusiastic over the social legislation which has been brought down by this government. They will recall that some of this was contained in their platform of 1919, but it was left to this government to put it on the statute books. So, Mr. Speaker, as usual you observe promises to your left and performances to your right.
As the hon. member for Queens (Mr. Myers) has said, Canada along with every other country in the world has experienced the most trying times in her history. On the one hand we had the earnest, determined and successful endeavours on the part of this administration to preserve the financial integrity of the country and restore conditions to normal. On the other hand, the people of this dominion have witnessed an equally earnest and determined endeavour on the part of hon. gentlemen opposite to discredit the helpful legislation which this government has brought down. They argued against it and in many instances obstructed the legislation, but they finally acknowledged that it would be helpful and showed that acknowledgment by voting for it. They have put themselves in# a position where they can meet any requirement of political expediency. When they are speaking in one part of their constituency they will be able to assure their listeners that they were opposed to this legislation, and when they go to another part of their riding they will be able to tell the people there that they voted for it.
When this administration assumed office in 1930 the markets of every country in the world were closed to Canada by insurmountable tariff barriers. In the case of the United States there was duty and excise against our lumber of $4 per thousand feet. The duty against copper was four cents per pound; against our cattle, three cents per pound, and
against our fish, two and a half cents per pound. Our poultry, dairy and farm products were faced with correspondingly high tariffs. They kept out our wheat with a duty of forty-two cents per bushel. In France it was 85 cents, in Italy $1.08, in Germany $1.65. So that every country in the world determined simply to live within itself. The hon. member this afternoon referred to trade. Well, this government has been busy in its endeavour to recover the trade which hon. gentlemen opposite lost. We shipped into the United States in 1921 farm products and manufactured goods to the amount of $190,000,000, and in 1930, the last year in which the party opposite was in power, these exports to the United States had been reduced by $100,000,000. We had at the same time about seventeen trade treaties in force, whereas to-day this administration has twenty-two in force and more in the making. In 1929 hon. gentlemen opposite, when in power, had an adverse balance of $90,000,000, and in 1930 they had an adverse balance of $103,000,000; in other words, they had bought that much more than they had sold. The hon. member (Mr. Ralston) this afternoon said that trade balances were not a matter of so much importance, but we all recognize that business methods must be applied to governments as well as in commercial circles, and if a man buys more than he sells there is only one end to that course.
At the time that the Liberals went out of office all the manufactured products from cheap labour countries and from countries with depreciated currencies were being dumped into this dominion. The United States was dumping all its surplus farm products here, and it was for that very reason that the Prime Minister (Mr. Bennett) called parliament in special session and put into force such tariffs as would bring that practice to an end. Then the Prime Minister, as a man of action, went to the economic conference; and, as the hon. member for Shel-bume-Yarmouth told us this afternoon, he spoke to the delegates there in no uncertain terms and told them that the time had come when the people of the empire must adopt the principle of British preferences. He pointed out that there was no time for delay or compromise and that steps must be taken to put that principle into operation. And again, being a man of action, he invited the delegates to meet at Ottawa where these trade agreements were consummated.
As to the importance of the trade agreements, while hon. members opposite may be inclined to belittle them, the country at large
The Budget[DOT]-Mr. Esling

has come pretty well to realize that there has been no greater impetus to business than these same agreements. It is true that when the delegates arrived here the Prime Minister, on behalf of this dominion, endeavoured to make the best deal possible, and he did grant a preference on such articles as would not injuriously affect the Canadian producer. The Dunning budget, to which hon. gentlemen opposite like to refer so often, gave a preference on something like six hundred odd items, and there is now a preference on' about nine hundred items. The Minister of Finance of 1929 said, however, "We are giving these preferences gladly; we are not bargaining at all." Well, no one can blame anybody for bargaining. The hon. member this afternoon referred to bargaining, and I would point out that bargaining is the basis of business. We on this side of the house think, as the country at large thinks, that the Prime Minister made a very good bargain so long as these preferred items do not interfere with the Canadian producer.
Hon. members opposite may recall that in 1926 they did some very effective bargaining with the Progressive group; they gave a preferential invitation to that group to come into the Liberal fold, and some of them came, in return for which there was the political salvation of the party opposite. Now, when it comes to the actual results in trade following the consummation of these agreements, one may take by way of illustration a feiw items the correctness of which cannot be challenged. Take the export of apples from Canada to the United Kingdom; it has doubled since the consummation of these agreements in 1932, and lumber exports have increased sixfold. No one can question that; the figures can all be verified by reference to the bureau of statistics. The export of hams f and bacon from. Canada to the United Kingdom has increased nine times. Then we come to poultry products, for which there was little export market up to the time of the agreements. To-day the export of poultry, dressed and undressed, from Canada to the United Kingdom has increased thirty-three times- not thirty-three per cent but thirty-three times the volume of 1932. Take canned meats: that has increased, not thirty-three times but seventy-eight times-seventy-eight times the volume of canned meats has gone to the United Kingdom in consequence of these agreements.
I do not know what the Liberal party will do if they have to forego, as they will have to do henceforth, the pleasure and privilege

of branding the Conservative party and its Prime Minister as being dominated by financial interests. That has been a subject of propaganda, insinuation, innuendo, anything that the Liberals could offer to saturate the public with political prejudice against this party. They led the man in the street to infer that the financial institutions, the great corporations, the banking interests and so forth dominated the Conservative party. Well, I think the public has come to know the facts to such an extent that that propaganda will end and the people will draw their own conclusions in that regard. For nine years since the former revision of the Bank Act there was contained therein a provision for a seven per cent interest rate, but no penalty was attached thereto and it remained for this Conservative administration to insert a penalty of $500 on any bank and S100 on the manager of that bank for every instance in which interest in excess of seven per cent was charged for a loan.
Again, a great privilege which the banks enjoyed was the circulation of their own bills; they were permitted to issue those bank bills to the extent of their paid up capital by paying merely a tax of one per cent per annum and the cost of printing the bills, which was trivial. They are now deprived of that privilege. That privilege meant that among the chartered banks of Canada they had approximately $140,000,000 worth of bank bills to carry in their tills, to circulate freely and to lend to you, me and others at seven, eight or nine per cent as the case might be. That privilege will now be withdrawn; where formerly if a chartered bank wanted to issue $5,000,000 worth of its own bills, it cost that bank $50,000 to do so, from now on it will have to apply to the Bank of Canada and instead of its costing that bank $50,000 for the privilege of issuing $5,000,000 worth of bills, it will cost it $125,000, at the current interest of 2^ per oent. Is that any indication that the banks control this Conservative administration? The whole question is answered by the Bank of Canada Act and the latest revision of the Bank Act.
What did this government do about gold? There was some $40,000,000 worth of gold in the tills and vaults of the chartered banks, and the Prime Minister simply said to them: You did nothing to enhance the value of this gold or to deserve the profit; therefore we will take this gold over at the statutory price of $20.67, and the profit thereon will go into the consolidated revenue fund. As we all know, there is under the act a statutory sum permitted to remain with the chartered banks, to care for foreign commitments but on the

The Budget-Mr. Esling
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whole they certainly have realized that the dominating factor lay in this administration.
We often hear, from the man in the street who is actuated by Liberal propaganda, about the Conservative party being subservient and submissive to the -corporations. Well, it will be found that under this budget the corporations of Canada are to-day paying a higher tax than has ever before in the history of Canada been levied on them. There is also to contradict this propaganda the fact that under this budget the income tax on wealth is higher and heavier than at any previous time in our history. That I think is an effective answer to the rumours which are so generously spread about the Conservative party being dominated by the financial interests, because precisely the reverse is -the case.
I would like to remind the house that this depression perhaps more than anything else has made us realize our obligations to our fellow man. In this connection I would like to offer a word of commendation to the hon. member for North Renfrew (Mr. Cotnam) who in the early part of this session introduced a resolution advocating pensions or other assistance for the blind. Those of us who are not so afflicted have little realization of the discomforts, inconveniences and privations endured by those who have not their sight. But I would say that there was no more forceful demonstration needed than the attendance of members of the House of -Commons at the meeting of the committee on industrial and international relations at which there appeared delegates -from the various blind associations to submit their claims in favour of assistance. I do trust this government may see its way clear to lend to the blind such aid as -may permit them to face the future with more hope. In this connection I would like -also to include the case of those who are appealing to parliament on behalf of the burnt-out ex-service men who are unable to accept employment and who have reached the age of fifty and are at present not eligible for help until they are sixty. I think the opinion of all parties of the house would be unanimous in urging the government's sympathetic consideration in that regard.
As the hon. member for Queens (Mr. Myers), who spoke a short time ago, referred to his constituency, perhaps I may be permitted to ask the house to visualize conditions in West Kootenay, a district which is devoted largely to fruit growing and mining. We have there a very large number of cooperative organizations; the farmers are getting down to business methods and they hope in a short time to have such pre-cooling facilities as are
essential to the proper marketing of fruits and vegetables. Last year there were shipped from the city of Nelson some 40.000 crates of cherries. Unfortunately in the absence of precooling facilities, those cherries became affected with a little mould. We hope by this fall to be shipping from the federal district of West Kootenay the finest cherries produced in the Dominion of Canada.
As for mining, we are enjoying very great activity. Gold production has been the stimulus and the salvation of this dominion in the last two or three years, and British Columbia has been in the forefront of gold production. The old historic mining camp of Rossland, which in the early days produced some
880,000,000, is again coming to the front. In 1934 it was the largest gold producer in British -Columbia, with the exception of the Pioneer mine; it shipped to the Trail smelter just $1,000,000 in gold. We also have at the city of Trail the largest metallurgical plant in the world, and in connection with that smelter we have perhaps the richest lead-zinc -mine in the world, for the -Sullivan mine at Kimberley produces nine per cent of the world's output of lead and zinc. We have also at Trail a very extensive fertilizer plant which produces fertilizer as a by-product from the waste materials at the smelter.
The government has brought down at this session social legislation designed to advance and add to the comfort and standard of living of the wage earner. I think if those engaged in industry would exercise a little more human consideration and copy the methods followed by Doctor S. G. Blaylock of Trail-


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


Mr. ESLING:: -conditions throughout this dominion would be very much improved for the wage earner and the industrial classes. This institution of which I speak employs five thousand men, and to its credit be it said that throughout all this depression those men have so spread their hours of work that not a single man was laid off.


Some hon. MEMBERS:: Hear, hear.


William Kemble Esling: The industry is in its splendid position by reason of the fact that a cooperative workmen's committee practically directs every matter as between employer and employee. It is a method which was put into operation by Doctor Blaylock, and it has done away entirely with any evidence of organized labour. From the many departments of this great plant, the lead department, the zinc department, the copper plant, the machine shops, the fertilizer plant, the foundry
The Budget-Mr. Esling

and carpenter shops and the innumerable other departments, the men elect by secret ballot a delegate, who is their representative, and at stated intervals the delegates from every department meet in a room provided by the company. The manager is not present. Any man who has a complaint or grievance of any kind, no matter how trivial, or a suggestion for the betterment of conditions of employment or safety, or any suggestions about pay, hands it to the departmental delegate and that delegate presents it to all the delegates and they discuss it. If they think the grievance is unjustified they simply send it back to the complainant, but if they think it is well founded they adjust it if they can, and if not they call in the manager. Every applicant for employment in that plant is given the most careful hearing. After a man is employed he feels absolute security in his position, for the reason that no foreman can discharge him or act in any spirit of ill will towards him. A man has three chances; if one foreman discharges him he is transferred to another department, and he has three opportunities before he loses his position entirely. The company neglects nothing that would contribute to the comfort and convenience and health and safety of its employees. Every employee enjoys the benefit of a pension, non-contributory, solely due to the good will of the company, and in order to create an interest on the part of the workmen in the efficient conduct of the works. In addition the company provides group insurance for every one of the five thousand. It gives him gratuitously an insurance policy for $500 when he starts work; after he has been in the employ of the company for six months the amount of the policy is increased to $1,000. When he has been there another six months it is increased to $1,500, and it does not cost him a cent. If he chooses to put on another thousand dollars he pays for it the nominal sum of ninety cents a month. In addition to this, every one of the 5,000 employees receives, in addition to his day's pay, a bonus for efficiency, a bonus on the rise in the price of lead or zinc, and a bonus on the price of silver.
The workmen's committee of which I spoke looks after medical conditions and hospitalization. A nominal fee is agreed to by the committee with the various members of the clinic, and by paying that fee not only the workman but every dependent member of his family enjoys the advantage of medical attention and hospitalization. The single man contributes just the same as the married man; he helps to bear a part of the burden of the wife and dependents of the married man.

Then the company has contributed generously towards the provision of a very fine memorial hall, in which the employees enjoy the facilities and comforts of a library, a gymnasium, a bowling alley, and a swimming pool. Furthermore the company has contributed a sum in excess of $50,000 towards the construction of an artificial ice rink. To every employee after he has been in the service three years the company gives a share of stock. It matters not whether the market value of that share is $25 or $500, it goes to the employee just the same. They have followed that practice for several years. Then, just to increase the human touch as between the company and its employees, the company encourages them to own their own homes, and it has lent to these employees approximately $1,000,000 for the construction of these homes. The company advances the money and provides a supervisor to see that the letter of the contract is carried out in the most minute detail, and it accepts repayment monthly at a minimum rate of interest. In addition, if the man does not desire to remain in the vicinity of the works during the summer the company will help him to acquire a summer home; it has been just as generous in assisting its employees in the construction of summer homes as it has been in providing them with homes for use the year round. I want to commend to the industrialists of this dominion the splendid service initiated by Doctor Blaylock, and I am sure that every hon. member will join with me in the belief that far better results would be obtained through this generous attitude on the part of employers towards their employees than ever will be obtained through legislation placed on the statute books.
May I extend to you, Mr. Speaker, and through you to every member of this house, a most hearty invitation to visit this wonderful metallurgical plant at Trail. At the same time you will have to go only a short distance to see the most complete power plants on the Kootenay river, in which some 225,000 horse-power at present is being generated for the operation of this huge plant. In addition you will see the company's model farm, on which there are some 170 head of pure bred Ayrshires providing milk for the men working in the plant. This milk is served to the men as an antidote to any possible ill effects from smelter fumes. Again, Mr. Speaker, I extend to every hon. member of the house a hearty welcome to Trail.
On motion of Mr. Manion the debate was adjourned.
On motion of Mr. Rhodes the house adjourned at 10.45 p.m.

Questions
Wednesday, March 27, 1935