1935-03-22

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker, on a matter affecting the privileges of this house and a question of personal privilege I desire to direct the attention of your honour to an article appearing in the Ottawa Morning Citizen of March 22, 1935-to-day-headed as follows:
Leave separate school request over until fall.
Special session then will also deal with social reform program of Ontario government is report.
Revamped municipal taxation plan looms.
Say committee to study unemployment conditions after prorogation.
Then in brackets "(Special to the Citizen)". The article continues:
Toronto, March 21.-^Following a discussion with right Hon. W. L. Mackenzie King yesterday, Premier Hepburn has definitely decided to forego the separate school request for a share of corporation taxes and to postpone enactment of the extensive social reform program which he promised in the last election campaign, it was learned from sources close to the Ontario premier to-day.
All these measures will await special session of the Ontario legislature which Mr. Hepburn will call as soon as the dominion election is over, it is said. Before the house adjourns, a special committee of the legislature will be appointed which will make a study of unemployment conditions, provincial and municipal taxation, and' social reforms.
Then a little farther on in the same article.
At his conference with the dominion Liberal leader yesterday, it is reported-
Referring to Mr. Hepburn-
-he was assured of a much larger contribution to unemployment relief should the Liberals be returned to power in the general election.
May I say, Mr. Speaker, that when the Hon. Mr. Hepburn and some of his colleagues did me the honour of attending a dinner tendered me by the Liberal party the night before last at the Chateau Laurier I met Mr. Hepburn during the course of the evening. The only conversation I had with Mr. Hepburn while he was in Ottawa was at the dinner table itself and at no time in conversation did Mr. Hepburn make any mention to me or did I make any mention to him of any matter connected with any "separate school request for a share of corporation taxes" or with respect to any "social reform program" of the Ontario government, or with respect to the question of unemployment relief.


An hon. MEMBER:: What did you talk about?


William Lyon Mackenzie King: I wish to say-


Mr. MANION:: Otherwise the report is correct?


William Lyon Mackenzie King: I wish to say, Mr. Speaker, that the statements in these particulars contained in this article are wholly false, untrue, misleading and without any foundation, also that, as a matter of fact, at the present time I have no understanding or agreement with any" leader of any provincial party in any of the provinces of Canada, whether he be in office or out of office, as to what will be even considered, let alone done, by the Liberal party, should the Liberal party be returned to office as a result of the next general election. I have never had any understanding or agreement of the kind with any provincial leader at any time, and so long as I am the leader of the Liberal party in Canada there will not be any understanding or agreement of the kind, other than what is declared publicly from the platform as part of what would be government policy. I should regard any course such as indicated in this article as being reprehensible and dishonourable, and I hope I would not be thought capable of anything of the kind.
May I say I have made inquiries as to the source of this article, and I learn that a similar article appears in this morning's issue of the Toronto Mail and Empire, sent by that paper's
Kingston Penitentiary

correspondent from the press gallery here. I understand the Hon. Mr. Hepburn has issued a statement in Toronto in which he categorically denies the statement which appears in the Mail and Empire of that city, and which was similar in effect to the statement I have read. May-I say if it were not for the fact that I have no desire to embarrass any member of the press gallery I would ask this House of Commons to appoint a committee to inquire into the source of this article, because it is perfectly apparent as the matter stands that it is in the nature of party political propaganda, and as such is both reprehensible and dishonourable.



BUSINESS OF THE HOUSE


Right Hon.   S@: That the provisions of standing order 28 respecting the committee of ways and means be suspended for this day.
He said: This is to permit presentation of the budget.


Mr. SPEAKER:: Shall the motion have the unanimous consent of the house?


Hon. J. L. RALSTON (Shelburne-Yar-mouth):: Mr. Speaker, just before the motion is put I hope that it will be satisfactory to the government, after the hon. Minister of Finance (Mr. Rhodes) has concluded hia speech on the motion for the committee to go into ways and means, for the debate to be resumed on Tuesday.


Sir GEORGE PERLEY:: That is satisfactory.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. HUGH GUTHRIE (Minister of Justice):: Mr. Speaker, last night before adjournment a question was asked in the house during my absence with regard to a disturbance that occurred yesterday among some prisoners at Kingston penitentiary. I regret to inform the house that there was a disturbance yesterday afternoon in Kingston penitentiary, and from the reports that have so far come to hand I may tell the house that it occurred just at the time of the closing of the shops in the

institution, a minute or two before five o'clock. In the west shop block eighty-three prisoners	were	employed. At	closing	timethese men are	marched	back	to the	mainprison. Twenty-five of the eighty-three had been marched back when a halt was made with the remainder, and they immediately seized the three guards in charge of the men, searched	their	packets,	took	from	themmatches,	lighters and	keys,	immediately
closed the main door and proceeded to barricade it with material that was at hand or taken from other rooms.
The west shop block contains the tailor shops on the ground floor; the shoemaking shop on the second floor; and part of the second floor which is called the north end is to be used as a new shoemaking shop in the future but it is not yet equipped.
When the guards were seized they were taken to the basement of the block and held there for a time, and their arms and legs were tied. They were subsequently removed to the second floor, to the unoccupied room which I have described as the new Shoe factory. Fourteen prisoners went down into the basement and barricaded the door there, and the remaining forty-four went upstairs to this vacant shop block.
A good deal of the machinery in the tailor shop was destroyed; the damage to the machinery is estimated to be $2,000. More damage was done in the shoe shop on the second floor. There a fire was started, and there is damage by fire and smoke and by water and also from broken machinery, which cannot yet be estimated.
The barricade of the doors kept up until the doors were forced open from the outside. I believe they are metal doors and had to be cut. When the outside guards arrived they went down into the basement, found the fourteen prisoners who had gone into the second floor room, and found the forty-four prisoners and the three guards. The disturbance seems to have quieted down very quickly after that. By six-thirty the prisoners were all back in the main prison and in their cells, but the fire had gained considerable headway, and lest it should spread it was thought better to call on the Kingston fire brigade, which immediately sent a detachment to the scene and extinguished the fire. The fire was all out I believe at about eight p.m.
Three prisoners were slightly injured. One had his lip cut, necessitating two stitches from the surgeon, one had an eye injured, which had to be dressed, the injury being very slight,

Doctor Doughty
and one had his fingers cut. From the report of the surgeon I gather that all these injuries were inflicted by prisoners upon prisoners. It is estimated, so far as one can at the moment, that probably thirty to thirty-five prisoners were engaged in this disturbance. The rest were there and they seemed reluctant.
No cause can yet be assigned for the trouble. The warden happened to be at penitentiary headquarters yesterday, but as soon as he learned by telephone of the outbreak he immediately returned to the penitentiary. He reported between eight and nine o'clock that all was quiet, that a count had been taken, that all the men were in their cells and the fire was out. To-day he is holding an investigation. The shops were not open this morning but I expect they are this afternoon. It is possible that during the course of the day I shall receive a further report.



UNIVERSITY OF MONTREAL

[Stage Direction]
On the orders of the day:
Mr. VINCENT DUPUIS (Laprairie-N.apierville) (Translation):: I have a question to direct to the ministers from the province of Quebec. Yesterday, during the discussion on Bill No. 41, the hon. member for Berthier-Maskinonge (Mr. Barrette) delivered an eloquent speech on behalf of the University of Montreal, and he asked the Minister of Labour (Mr. Gordon) to devote to that institution a part of the relief money. Would the French-speaking ministers inform me whether the hon. member for Berthier-Maskinonge (Mr. Barrette) approached them on that subject, and whether they have submitted the question to the cabinet in order to get a favourable answer. Might we expect that answer soon?


Right Hon.   S@: Mr. Speaker, may I suggest that the hon. gentleman put his question on the order paper.


Pierre Édouard Blondin: Before government orders are proceeded with, by consent I would ask 'the house to revert to the order, First reading of Senate bills.



PRIVATE BILLS


[Stage Direction]
Bill No. 43, for the relief of Clarence MacGregor Roberts-Mr. . Bury (for Mr. Bell, St. Antoine).
Bill No. 44, for the relief of Agnes Mabel Potter Brockwell-Mr. Garland (Carleton).
Bill No. 45, for the relief of John Henry Ley-Mr. Garlhnd (Carleton).

[Stage Direction]
On the orders of the day:
Hon. C. H. CAHAN (Secretary of State):: Mr. Speaker, on the orders of the day I would ask permission to state that the retirement of Doctor A. G. Doughty, dominion archivist, by reason of his attainment of the age of seventy-five years, is effective to-day.
In view of Doctor Doughty's monumental achieyements as archivist of Canada, his excellency the governor in council will confer upon him the titular distinction of dominion archivist emeritus, provide for him suitable accommodation at the archives, and retain his services as chairman of the public records commission, which is not subject to the provisions of the Civil Service Act.


William Lyon Mackenzie King: Mr. Speaker,
I should like to say that as it has become necessary for Doctor Doughty to retire as dominion archivist on account of the civil service requirement respecting age, I believe all parties in this house and equally the country generally will appreciate the action of the hon. Secretary of State (Mr. Cahan) in seeing that for as long as possible Doctor Doughty is retained in immediate connection with the archives, and that due provision will be made for him there. So far as any department of the public service may be said to be the creation of one man, the department of public archives is certain1}- the creation of Doctor Doughty, moreover the value of the archives to the government and to the public is in a very large measure immediately dependent upon the personal knowledge of what is therein contained and of sources of information in Doctor Doughty's own mind.


Hon. ERNEST LAPOINTE (Quebec East):: Mr. 'Speaker, in view of the announcement of the hon. Secretary of State (Mr. Cahan), may I ask him whether a decision has been reached as to who is going to replace Doctor Doughty at the head of the archives? May I express the hope that we shall not have to wait as long for the filling of this position as for the filling of the positions of Deputy Minister of Marine and Deputy Postmaster General?


Charles Hazlitt Cahan: Mr. Speaker, an acting
dominion archivist will be appointed forthwith. The appointment of a permanent official will depend upon the action of the governor in council.
The Budget-Mr. Rhodes



THE BUDGET


Hon. E. N. RHODES (Minister of Finance) moved:: rates, and also to the assistance given by way of guarantee to prevent demoralization in wheat prices.
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. In these circumstances it was inevitable that those countries which chiefly produce primary products- which must depend in large part upon world markets for- their sale-were bound to be adversely affected by these world-wide conditions.
At a later stage I will discuss in some detail the statistics regarding our export and import trade. But before doing so it is well to call to mind the forces and policies which govern international trade to-day and their operation and application in every leading country in the world. In a word, it is idle to expound theories and futile to expatiate on the obvious desirability of greater freedom of trade. We are confronted with realities -in other words, we must face facts.
In 1930, when this government came into office, tariffs were higher against the products of Canada in the markets of the world than at any previous time in our history. In many countries throughout the world new and higher barriers had been erected against Canadian exports. In June, 1930, the Hawley-Smoot tariff had come into operation in the United States, increasing to practically prohibitive levels the duties on many of our leading products and imposing duties on other Canadian goods which had formerly been free of duty. In Europe, which provides the outlet for most of our wheat, drastic measures had been enacted to protect domestic producers from the effect of the marked fall in prices. The milling quota, the most effective device which could be employed in keeping out our product, was first introduced in Germany in July, 1929, and was subsequently adopted in France, Italy and many other countries which heretofore had afforded our best markets. Coincident with the introduction of this device the duties on wheat were increased to levels considerably in excess of the world price of this commodity.
With the wave of economic nationalism spreading throughout the world we accepted the logic of the situation and directed our efforts towards expanding our markets in those countries associated with us by special ties. Within -a few weeks of assuming office

the Prime Minister in the autumn of 1930 at the imperial conference strongly advocated the adoption of a policy of reciprocal preferential tariffs within the empire, and this policy was ultimately adopted at the conference which met in Ottawa in response to his invitation in 1932. The trade agreement concluded with the United Kingdom at the Ottawa conference gave Canadian primary products a privileged position in the world's greatest and most stable market, and also embraced larger preferences in the vast colonial empire which have been of great value to our trade in automobiles and other manufactured goods.
Other agreements were concluded at this conference with the Irish Free State, the Union of South Africa and Southern Rhodesia. Prior to the conference, trade agreements had been negotiated by the Canadian government with Australia and New Zealand, both of which have had very beneficial effects on our trade. There can be little doubt that this series of agreements with empire countries has been of vast assistance in enabling Canada successfully to weather the storm of the present depression. Upon reflection one can readily discern what would have been the dire effects upon our trade without these agreements during a period when other countries were progressively closing their markets to imported goods.
In 1933, at the world economic conference the delegates from Canada strongly advocated the general adoption of a policy of removing the excessive restrictions which were strangling world trade, and the responsibility for the failure to adopt it must rest elsewhere. Since that time we have been carrying on negotiations with various individual countries some of which have been completed, others are still in progress. During the last few days, you have been made acquainted With the comprehensive trade agreement which has been concluded with France and which, it may be said, for the first time places our trade relations with that country on an entirely satisfactory basis. Negotiations have been practically completed with Poland for a treaty which will enable Canadian trade to be carried on satisfactorily with that growingly important country from which, in the absence of a treaty, our products have been hitherto almost entirely excluded.
During recent months, an opportunity has presented itself for the first time since this government assumed office to enter into negotiations with a view to effecting a trade agreement with the United States of America.

The Budget-Mr. Rhodes
In June last, the United States congress passed an act which empowered the president to enter into trade agreements with foreign countries, and where necessary or appropriate to carry out the terms of an agreement to proclaim decreases to an amount not greater than 50 per cent in existing duties without the necessity of ratification by congress.
Pursuant to the provisions of this act, the Secretary of State on January 21 last gave formal notice of his intention to negotiate a treaty with Canada. In conformity with the terms of the act, the dates of March 11 and March 18, respectively, were fixed for the reception of written and oral representations with respect thereto by a committee appointed by the president for this purpose.
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.
It may also be added that negotiations are now in progress with the representatives in Canada of two other important countries, looking toward an agreement which will mean wider markets for some of our chief primary products.
This brief outline of trade and tariff developments would be incomplete-especially as indicating the purpose of the government to stimulate trade-without summarizing our accomplishment during a period when trade barriers have been higher and more difficult to surmount or remove than at any time in world history. We have not only maintained the trade agreements which were in effect when we assumed office, but we have also greatly improved our position by making the following additional agreements, several of which are of major importance:
1.	A comprehensive preferential agreement with the United Kingdom embracing within its terms the colonial empire as well.
2.	A new and enlarged agreement with Australia.
3.	For the first time, formal agreements with New Zealand, South Africa, Southern Rhodesia, and the Irish Free State.
4.	A trade treaty of broad scope with France, which, for the first time, is mutually binding and mutually satisfactory, in place of one which involved the granting of fixed rates by Canada without corresponding obligations by France and which did not give us the French minimum tariff on all our leading exports to that country.
5.	A commercial arrangement securing most favoured nation treatment from Germany, a country with whom our trade relations had long been unsatisfactory.
6.	An arrangement securing most favoured n'ation treatment from Austria.
7.	An arrangement whereby we obtained most favoured nation treatment from Brazil.
8.	A comprehensive agreement with Poland now ready for signature.
In addition, we have entered into negotiations for trade agreements with the United States of America and with two other important European countries.
This record of accomplishment speaks for itself.
Reference has been made to the expansion which has occurred in most of the major branches of economic activity. It is pertinent to ask what has been the effect of this business expansion upon the absorption of unemployment, the most pressing social and governmental problem of the depression years.
A much higher level of employment was maintained in 1934 than in the preceding year, a gain of 15 T per cent being registered by the bureau's index of employment. On February 1st this index stood at 99-9 a rise of 3-5 per cent from February 1, 1934, and of 25-8 from April 1, 1933. Based on reports from 8,992 employers, the bureau of statistics estimates that the total increase in employment in Canada during the past year was at least 65,000 persons, and since April 1, 1933, the low point in employment, no less than 340,000 persons. Advance reports for March 1st show a substantial further improvement in the employment situation. Despite this increase in employment, the number remaining on the relief rolls is still large. For February, the latest month for which the information is available, the number of families on relief was 259,918, which represents a decrease of 23,756 families from the same month of last year and a decrease of 25,921 families from March, 1933. The 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. These numbers should be substantially further reduced during the next few months as a result of the public works construction program undertaken by the government which is to be augmented1 by legislation to be introduced later in the session.
In the budget a year ago were reviewed the steps which the government had taken to foster a rise in. commodity prices and promote a lowering of interest rates. These efforts have been continued bu-t because of obvious inter-
The Budget-Mr. Rhodes

national factors the movement towards rising price levels has made comparatively slight progress during the past year. In Canada fluctuations in wholesale prices during 1934 were of minor importance. The index, it is true, averaged 6 [DOT] 7 per cent higher than during 1933 but it did not at any time move far from the line of 72 per cent of the 1926 average and on March 1, 1935, stood at 72-3 as compared with 72-2 on March 1, 1934. But while the index as a whole remained comparatively stable, a most reassuring development occurred in the form of a considerable correction of some of the disparities which the drastic fall of prices had created and which constitute the most serious aspects of a depression. Thus during the year ended March 1, the wholesale prices of Canadian farm products rose by no less than 8-6 per cent, as contrasted with practically no increase at all in the general index. Similarly the prices of raw and partly manufactured goods increased 3-7 per cent while those of fully and chiefly manufactured products showed no change. The correction of 3uch maladjustments between the various types of prices is one of the most significant measures of the progress of economic recovery.
Interest is one of the rigid factors in our price structure, and as the burden of interest charges still constitutes a pressing problem for most public bodies and many private individuals, it is gratifying to record the rather striking success which has attended the comprehensive program sponsored by the government to bring down interest rates to a level more in line with other prices and with our present productive capacity.
The various steps in this program are a matter of record. With our encouragement, the rate paid on savings deposits by banks and other financial institutions, which is the basic rate in our interest rate system, has been lowered in two or more successive stages to a minimum of 2 per cent. Huge conversion operations have been undertaken to refund outstanding dominion direct and guaranteed loans on a lower interest basis, as such loans matured or became callable. In the last five years this government has converted over $1,100,000,000 of public debt with an attendant saving in fixed charges of over $14,600,000 per year. During the present year, if market conditions continue favourable, we expect to effect further substantial economies through the same process. In this connection it is of interest to note that if we assume that the total dominion and Canadian National Railway obligations which become due or callable before the end of 1937 could be refunded at approximately the present level of interest

rates, the total saving in interest plus the increase in income tax due to the elimination of our remaining tax-free bonds, as nearly as can be estimated, would relieve the dominion exchequer of not less than 16 million dollars per year.
A beginning has been made in improving the organization of the short-term money market in Canada and we are hoping that a further substantial contribution to this end may be made by the Bank of Canada. Shortterm money rates have been somewhat out of line with long-term rates in this country and their abnormally high level has been a factor retarding the trend to lower long-term rates. We have also so administered the inadequate machinery of the Finance Act and so used the resources provided by the Dominion Notes Act amendment last year as to contribute to greater monetary ease and prevent a tendency towards deflation and the consequent strain that would probably otherwise have prevailed. Finally, and perhaps of most importance, we have striven under great difficulties to press forward towards budgetary balance with all reasonable speed, and to deal with our finances generally in such manner as to deserve the high credit standing which alone justifies and secures low interest rates.
That our efforts have been successful is amply confirmed by the rise in high grade bond prices and by the high prices at which our obligations are currently selling in the investment markets. During 1934 the bureau's index of interest rates fell 21-6 per cent. The bid quotation for the dominion government 4| per cent bond due in 1959 rose from 99-37 at the beginning of the year to 110-75 at the close. Perhaps the best indication of the improvement is to be found in the fact that in December last we were able to sell a 16 year 3 per cent guaranteed Canadian National Railways bond in the amount of $20,500,000 on a basis to yield the public 3-02 per cent. Such a rate has never before been attained in this country.
This improvement in the yield on dominion bonds has been reflected in more or less similar advances in provincial, municipal and corporate bonds, depending on the credit of the particular borrower. This is characteristic of the rise of security prices in all periods of revival; recovery comes first in the prices of bonds of the highest grade, and then spreads out gradually to the second and other grades of securities. Last fall some of the eastern provinces were able to borrow on exceptionally favourable terms and two of the western provinces succeeded in selling moderate-sized issues on a yield basis to the public of 4-36

The Budget-Mr. Rhodes
and 4-20 per cent, respectively. It appeared that the time was fast approaching where practically all public bodies could secure the advantages of refunding outstanding issues at substantially lower interest rates, but a temporary clogging of the market and certain unfortunate, widely heralded statements have clouded the outlook for the time being. It is to be' hoped that this situation is only a temporary one but it behooves all debtors to remember that credit is a tender plant and must be carefully cultivated.
Some of the provinces and many municipalities, have not yet been able to take advantage of the facilities now offered for refunding existing obligations at substantially lower rates but, provided that nothing untoward is done to affect adversely the credit of the particular borrower or the state of the general market, it should not be long before the present low interest rates can be made available to all worthy borrowers. It is recognized that for the time being the burden of fixed charges on outstanding debt incurred at relatively high rates in past years when borrowing was undertaken in some cases too optimistically, presses heavily on the financial resources of the public bodies concerned, especially when regard is had to the expenditures which have to be made for unemployment relief. This general problem has received the most careful consideration of the government and, as will be disclosed by our accounts which will be reviewed a little later, the dominion has come to the financial assistance of several of the provinces and indirectly through them of several municipalities, to the extent of approximately 75 million dollars.
From time to time suggestions have been made looking to elaborate programs for refunding the outstanding debt of all public bodies. These have all received detailed study and will continue to receive our attention. In the budget last year, I discussed some of the difficulties involved, including the technical difficulties resulting from the form in which most of our financing was done in the war and post-war years and the more important difficulty arising out of the fact that so large a proportion of our obligations is held by external investors. It may be taken for granted that neither this house nor the 'Canadian people would be willing to consider any program that involves any measure of repudiation. Consideration therefore has been given to the possibility of enabling the provinces to refund their floating debts by giving a dominion guarantee to new refunding issues. It will be recognized that such guarantees would imply
adequate control over future provincial borrowing and the factors that might make such borrowing necessary. It is doubtful whether the provinces would be willing to meet the only conditions under which this type of solution would be practicable and sound, both in the interests of the dominion and the provinces themselves. This same type of consideration arises also in connection with the proposal to establish a loan council in Canada, somewhat along the lines of the Australian model. The wisdom of securing some such type of control as a loan council could give has long been recognized, if the financial mistakes of the post-war period are to be prevented in future, but whether the rigid type of control implied by a loan council or the more flexible and gradually evolving influence which the Bank of Canada may exert through making competent and disinterested advice available to public bodies is a question upon which opinions may well differ.
It will be recalled that last summer the Prime Minister issued an invitation for a dominion-provincial conference to be held before the close of the year. On the agenda of this proposed conference was placed amongst other matters the problem of the financial relations of the provinces and the dominion, including the consideration of a possible reallocation of tax sources as between the two jurisdictions and the practicability of various methods of cooperation in tax administration. It was not found possible for all provincial premiers to agree to a date for the holding of such a conference prior to the assembling of this parliament and the proposal had to be allowed to drop for the time being. It is unfortunate that it was necessary to postpone joint consideration of these and other similar important matters.
In the field of agriculture it was widely recognized that existing debts were in many cases clearly beyond the capacity of farmers to pay, even assuming reasonable improvement in business and commodity prices. It was the part of wisdom, therefore, to provide simple and inexpensive machinery whereby the liquidation of farm debts might be effected with due regard to the rights of debtor and creditors in each individual case and, so far as possible, by the process of negotiation and compromise. That machinery was provided by the Farmers' Creditors Arrangement Act and its success after only a few months of trial is now a matter of record. In numerous cases farmers have had their debt structures simplified and their fixed charges reduced to a point within the capacity of the farm enterprise to pay. From the national
The Budget-Mr. Rhodes

point of view, the benefit of restoring their confidence and enabling them to remain on the land as willing and effi-. cient producers is difficult to exaggerate. 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.
The benefit of these steps which have been taken to reduce interest rates is not confined to the lessened burden of fixed charges to public bodies and private borrowers. Perhaps a more important advantage will accrue from the powerful stimulus which lower interest rates exert on business recovery. It is generally agreed that in the United Kingdom the recovery which has taken place traces its origin in large part to the creation of a condition of cheap and abundant money. Lower interest costs affect profits directly and make possible expansion of plant and equipment that would otherwise have been impossible because unprofitable. Low yields on high grade bonds force financial institutions and individual investors to seek out the larger returns that come from corporate securities and from mortgages. Already in Canada there are evidences that more and cheaper money is becoming available for mortgage purposes. This augurs well for further revival of the construction industry in which activity has been abnormally depressed and unemployment serious.
In the banking field the feature of the year has been the establishment of the Bank of Canada which began operations on March 11. The management which has been provided for this new institution commands, I am certain, the entire confidence of the Canadian people. The bank begins business with the goodwill and the support of the public as well as with the cooperation of the chartered banks with which it will have largely to deal. It may not be able to work the miracles which are expected from it in certain quarters but I am confident that in the coming years its contribution to the economic welfare of this dominion will be an important one. It will provide, what has long been needed, an undivided control, solely in the public interest, of the volume of currency and credit, in use. It will, it is hoped, contribute to greater stability in our economic life, so 
far as this may be possible by the use of monetary methods. It will provide leader ship for the first time to the financial community and assist in several ways in improving the organization and working of our whole financial system. I also expect much from the disinterested and competent advice on financial matters which it should be able to give, not only to the dominion government but also to provincial governments which may have found it difficult to keep closely in touch with conditions in the world's financial markets and which may in future avail themselves of the bank's services.
The bank will also provide an effective mechanism by which Canada may at the appropriate time execute such national policies as may be determined upon in regard to our future monetary standard. I have already referred to the retarding effect upon international trade of the chaotic condition of the world's basic currencies. For Canada, so heavily interested as she is in foreign trade and with such huge obligations payable abroad, this monetary instability is a factor of major importance. For a time last year it appeared that an approach to stability was gradually being achieved and that the working of economic forces was beginning to reveal the natural rates of equilibrium between certain countries which would make de facto stabilization possible. Recent events, however, indicate upon how slender a thread hangs the integrity of certain currencies, and suggest the possibility of a period of renewed fluctuations with consequent disturbances to trade and finance.
This is but one of the international factors which must be taken into consideration if we wish adequately to appraise the outlook for the coming year. The brief review given of economic developments in Canada during the past year would seem to justify a substantial degree of optimism as to the immediate future. That would be the case if we could consider solely our own position. But in these days nations do not live unto themselves alone, perhaps least of all, Canada! And no one can look out upon the world to-day without recognizing the political frictions that exist, the apparent beginning of a new armament race among the nations, the social and economic tensions that persist in many countries, the financial and exchange uncertainties, the obstinate adherence to extreme policies of economic nationalism, and the general absence of confidence, mutual trust, goodwill and the cooperative spirit upon which alone the needed international solutions of our common problems'can'be based.

The Budget-Mr. Rhodes
As long as these adverse influences continue in the international field, they must be taken into our reckoning. We in Canada have long since passed the low point of the depression. We have been making splendid progress and that progress should continue-rapidly if world conditions favor, less rapidly if they impede. We have important continuing problems still to solve-the railway deficit, unbalanced budgets, unemployment-but these will be solved at the same pace as we succeed in restoring normal business conditions. We have moreover the more fundamental problem of adjusting our economic system to enable it to function with greater stability and with a greater measure of social justice. To this problem and its solution the government has devoted itself.



TRADE OF CANADA

[Stage Direction]
The expansion of our external trade has continued on an accelerated scale. In the
previous fiscal year the total of imports and exports showed a gain of 15 per cent over the year before. In the eleven months' period ended February 28th last, the rate of increase was 18 per cent over the corresponding period of 1933-34. The actual increase was $168,000,000 and the total volume was the best since 1931. Imports expanded at a rate of 23 per cent over the previous year, and exports by 15 per cent. In the earlier stages of trade recovery exports were increasing faster than imports.
World statistics show that in 1934 Canada again occupied fifth place in export trade, and stood ninth in imports and eighth in total international trade.
A statement of the total trade for the eleven months ended February 28th, with comparative figures, follows:
Trade of Canada (excluding gold coin and bullion) (000 omitted)
Imports	
Exports-*
Canadian produce Foreign produce..
For the fourth successive year Canada's exports have exceeded imports, the favourable balance in the eleven months' period being nearly $134,000,000. This figure is for merchandise only and does not include the export of current gold production which adds a further
Eleven	months ended	
February	February	
28,1934	28, 1935	Increase$ 386,279	$ 474,240	$ 87,961521,706	601,376	79,6705,585	6,731	1,146$ 913,570	$1,082,347	$ 168,777
$100,000,000 annually to credits available in external markets for the liquidation of interest due abroad and other debit items in international settlements.
The following statement shows the balance of trade in merchandise for the past six years:
Eleven months ended

February 28, 1930. February 28, 1931. February 29, 1932. February 28, 1933. February 28, 1934. February 28, 1935.
Trade of Canada (excluding gold coin and bullion) (000 omitted)
Imports	Exports	Balance$1,135,248	$1,053,246	$( -) 82,002831,232	760,733	( -) 70,499521,056	546,547	( + ) 25,491373,421	443,553	( + ) 70,132386,279	527,291	( + ) 141,012474,240	608,107	( + ) 133,867
The effective operation of the empire trade agreements is reflected in the statistics of intra-empire trade. In the ten months ended January 31st, the latest date to which figures of trade by countries are compiled, exports to the United Kingdom, our largest market,
recorded an increase of nearly 22 per cent. For all empire countries the increase was 24 per cent. Exports to Australia showed a gain of 52 per cent, to New Zealand, 72 per cent, to British India, 21 per cent, and to South Africa, 76 per cent.
The Budget-Mr. Rhodes
[Stage Direction]
On the other hand, exports to foreign countries increased by only 6 per cent. Exports to all countries increased by nearly 871,000,000 in the ten months' period, and of this amount, $56,000,000 or 79 per cent was accounted for in increased exports to empire countries.
Since 1932, the year of the imperial conference, the value of our export trade to the United Kingdom has increased by 52 per cent. This gain has been a material factor in improving conditions in a wide variety of Canadian industries. In 1934 the exports of agricultural products exceeded those of 1932 by $16,600,000; in animals and animal products, the advance was $24,000,000; in wood products,
chiefly lumber, it was $14,500,000, and in nonferrous metals and their products, including copper, lead, nickel and zinc, the gain was $31,000,000.
Imports from the United Kingdom have increased in the last ten months by $8,000,000, or 9 per cent. In 1934 they exceeded those of 1932 by 21 per cent. The main increases in imports were in textiles, iron products and chemicals. Imports from other empire countries increased in the ten months' period as follows: Australia, 19 per cent; New Zealand, 22 per cent; and British India, 31 per cent.
Figures showing the trade with the empire in the last ten months are as follows:
Intra-Empire Trade of Canada (excluding gold coin and bullion)
Imports from United Kingdom Exports to United Kingdom.. Imports from British Empire. Exports to British Empire.. .
Ten months ended
J anuary 31, 1934 ; 87,114,091 191,277,804 116,599,414 231,648,330
January 31, 1935 $ 95,292,201 232,987,396 134,246,466 287,587,697
Empire countries are supplying a little over 30 per cent of our purchases abroad. At the same time, they absorb over onedialf of our exports.
A statement, by percentages, showing the distribution of import and export trade, excluding gold coin and bullion, follows:
United Kingdom British Empire.. United States.. Other Countries.
Percentage Distribution of Trade of Canada (excluding gold coin and bullion)
Imports	Exports
Ten months ended Ten months ended January 31	January 31
1934	1935	1934	1935%	%	%	%24.70	21.80	39.53	42.0133.06	30.71	47.87	51.8553.73	56.91	33.04	33.7413.21	12.38	19.09	14.41
Despite many unfavourable influences, further progress has been made in the restoration of world trade from the disastrously low levels to which it had fallen. Canada has been in the forefront of the leading countries of the world ranked according to the rate of improvement, thus testifying to the effectiveness of our trade agreements and the initiative and enterprise of those engaged in industry and trade. The improvement which has taken place in this, as well as in the other fields of activity to which reference has been made, has had a favourable influence upon the dominion's financial statement, which will now be reviewed.
revenues 1934-35
As the current fiscal year has still some days to run and more than a month will elapse before the Dominion accounts are 
closed for the year, it will be understood that the figures now to be presented, both as to the year's revenues and expenditures, are to some extent estimated. Judging by past experience, however, they may not be expected to vary materially from the final result.
For the first time since 1930, receipts irom taxation will yield the expected return. When presenting the budget last year, the outlook for a greater volume of business was so promising that substantially increased yields from current rates of taxation were forecast. Notwithstanding some loss in revenue due to changes made in taxation measures when the budget was before parliament, the receipts from taxation will amount to $306,050,000, almost the identical figure estimated in the previous budget. This is an increase of $34,200,000 over the previous year and is all

The Budget-Mr. Rhodes
the more satisfactory in the light of the substantial reductions in taxation effected last year, particularly the fifty per cent cut m the sugar tax and in the special excise tax on imports under the British preferential tariff which, together, involved a loss in revenue of not less than $10,000,000. It is noteworthy that every month in the year showed an increase over the corresponding month of the previous year and the rate of improvement has been maintained throughout the year.
Customs
Reflecting the continued, even though moderate, expansion in international 'rade, customs import duties will yield $77,300,000, an increase of $11,000,000 over the previous year. Excise duties, imposed chiefly on liquors and tobaccos, will amount to $44,600,000 exceeding the collections of 1933-34 by $9,000,000.
The income tax, the rates of which were not altered last year, will bring in a total of $65,600,000, the highest figure for four years, and $4,200,000 in excess of the previous year's collections. To the extent of about $3,100,000 this increase is due to credits transferred from the gold tax at the end of the fiscal year to be applied, in accordance
with the statute, against the income tax liability of gold mining companies. This amount can be regarded as in the nature of a prepayment of income tax.
With the adjustments that have been made from time to time in the scale of taxation, the income tax has been one of the steadiest sources of income in the past four years, notwithstanding fluctuations in the general level of incomes and profits.
Upwards of $11,000,000 more than in the previous year will be obtained from the sales tax, the yield from which will be $72,600,000. The other special excise taxes will bring $39,800,000, a decline of $5,300,000 from the year before due to the reductions in taxes already referred to.
The gross collection from the gold tax to the end of the fiscal year will be $7,084,000. It is estimated that $3,100,000 of this amount will be applied as a credit on the income tax payable by the several mining companies subject to the tax. This will reduce the net return for the year from the gold tax to $3,984,000.
The following table sets out the yield from taxes for the past five years:
Taxation Revenue' (000 omitted)
					Esti-
1930-31	1931-32	1932-33	1933-34	mated 1934-35$	$	%	%	$Customs Import Duties	131,209 57,747	104,133 48,655	70,073 37,834	66,305	Excise Duties	War Tax Revenues-	Banks	1,429 74	1,390 12	1,328 826	1,336 742	Insurance Companies	740Delayed Business Profits	34	3	Income Tax	
Sales Tax	
Manufacturers', importation, stamp, transporta-	71,048 20,784	61,255 41,734	62,067 56,814	61,399 61,392	65.600 72.600tion taxes, etc	13,951	17,872	25,377	45,184	39,800Tax on Gold	
Total receipts from Taxation		296,276	275,054	254,319	271,852	306,050
					
Non-Tax Revenues	out any	increase	in cost,	in fact, there was	
Revenues derived from the various departmental services of government, will amount to $53,300,000, an increase of $1,100,000 over the previous year. The main items under this heading are interest on investments, which is expected to amount to $11,400,000 (some $260,000 in excess of the amount from the same source the year before), and Post Office revenues which will be $31,184,000 an increase of almost $300,000 over the previous year. On reference to the expenditure statement, it will be found that the operations of the Post Office were conducted witha slight reduction from the previous year the expenditure being $30,528,000. The surplus on Post Office operations will therefore be over $600,000 as compared with one-half that figure a year ago. The accounts of the Post Office do not, of course, take into consideration the rental value and other costs of premises occupied. On the other hand, no credit is given the Post Office for services rendered other departments through the free use of the mails.
A statement of non-tax revenues for tEe past five years follows:
The Budget-Mr. Rhodes
[Stage Direction]
Non-Tax Revenues
-	1930-31	1931-32	1932-33	1933-34	Estimated 1934-35$ 2,179,047 71,197	$ 1,484,826	S 1,444,840	$ 1,235,621	$ 1.271.000 48,000 858.000 3.569.000 7,000 499.00073,590	73,836	55,722 877,630	1,026,671	976,845	831,020	3,210,394 21,996 1,655,401	3,757,821 10,059 485,364	3,192,144	3,613,157 6,537 418,729	8,652	458,934	632,151 433,716	402,189	298,352	440,290	465,000233,512	212,075	177,812	93,00073,937	40,519	4,429	39,508	41.000 91.00094,255	81,359	84,078	70,186	148,942	149,902	160,298	148,535	139,00010,421,224	9,330,125	11,220,989	11,148,232	11,410,000199,000	191,905	178,118	207,532	204, 000201,768	184,485	179,461	188,054	188,00019,882	20,045	20,116	20,317	20,000159,000 29,384	163,229	166,414	165,207	164.000 15.000 352.000 63.00014,250	16,677	17,855	559,646	525,248 166,111	539,341	429,341	183,288	121,426	97,962	30,212,326	32,234,946	30,928,317	30,893,157	31,184,000 500.000 244.000 1,488,000 9,000 402.000501,610 362,391	145,938 212,829	280,591	249,721 1,291,485	468,093	528,924	1,414,132	6,357	14,787	12,050	12,444 399,717	419,750	406,529	394,222	
53,291,426	51,757,161	52,318,088	52,210,451	53,324,000
Special Receipts
There has been received by way of transfer from the custodian of enemy property, the sum of S3,000,000. With this addition, the
revenue from all sources will amount to $362,370,000, as compared with $324,480,000 in 1933-34, an increase of $37,890,000.
The aggregate revenues for the five-year period are shown in the following tabulation:
Summary of all Revenues (000 omitted)
. 	1930-31	1931-32	1932-33	1933-34	Estimated 193 -35$ 296,276 53,291	$ 275,054 51,757	254?319 52,318	S 271,852 52,210	$ 306,050 53,324
349,567 6,622	326,811 7,028	306,637 4,493	324,062 418	359,374 3,000
					
					
	356,189	333,839	311,130	324,480	362,374
					
EXPENDITUEES 1934-35 Ordinary Expenditures The ordinary expenditures for the year, it is estimated, will be $356,600,000, which is approximately $2,200,000 lower than the amounts authorized by vote and statute. While there is an increase of $10,000,000 over the figure of the year before, it is $26,000,000 below the ordinary expenditure in the year 1930-31. The increase has not resulted from any general expansion in departmental activities but rather is accounted for, in the main, by increases in several of the uncontrollable expenditures and by provision made for some 
new services. The largest single item of increase is for Old Age Pensions which will require $2,600,000 over the figure of the previous year. The expenses of the dominion franchise commissioner in connection with the registration of voters and preparation of the election lists, will involve a new expenditure of $1,560,000. An increase of $1,500,000 under the Department of Railways and Canals i3 made up, in part, of the special vote of $500,000 for the railway grade crossing fund, $100,000 for the encouragement of tourist traffic and $785,000 being the dominion's contribution towards the cost of a subway tunnel under the

The Budget-Mr. Rhodes
Lachine Canal in the city of Montreal. Under the Department of Pensions and National Health an additional expenditure of §500,000 has been required for war veterans' allowances. In addition, there has been absorbed, as new
services, the cost of administration of the Farmers' Creditors Arrangement Act and the Natural Products Marketing Act.
A statement of ordinary expenditures for the last five years follows:
Statement by Departments of Expenditure for the Last Five Fiscal Years (000 omitted)
Ordinary Account	1930-31	1931-32	1932-33	1933-34	Estimated 1934-35S	$	$	$	$Agriculture	10,119	10,212	8,066	6,996	7,273Auditor General's Office	416	436	380	376	378Civil Service Commission	343	306	244	221	225External Affairs, including Office of the	Prime Minister	928	994	863	974	1,481Finance-	Interest on Public Debt	121,290	121,151 728	134,999	139,725 167	138,529Subsidies to Provinces	17,436	13,695	13,677	13,728	13,769Special Grants to Maritime Provinces....	1,600	1,600	1,600	1,600	1,600Other Grants and Contributions	778	536	499	398	471Civil Pensions and Superannuation	1,476	1,405	1,075	1,009	953General Expenditure	1,794	1,845	2,046	3,148	3,945Fisheries	2,435	2,046	1,787	1,596	1,662Governor General's Secretary's Office	142	148	136	136	132Immigration and Colonization	2,588	2,200	1,689	1,369	1,297Indian Affairs	6,069	5,081	4,499	4,380	4,340Insurance	178	180	161	152	165Interior	8,104	4,647	3,454	2,833	2,837Justice	2,538	2,560	2,458	2,435	2,766Penitentiaries	3,237	2,737	2,870	2,677	2,748Labour	797	633	605	560	586Technical Education	391	283	202	129	150Old Age Pensions	5,658	10,032	11,513	12,314	14,900Legislation-	House of Commons	1,721	1,982	2,210	986	1,803Library of Parliament	76	81	65	69	71Senate	568	650	747	286	495General	65	79	81	62	95 1,560 135Chief Electoral Officer, including elections	2,256	145	56	32	
The Budget-Mr. Rhodes
[Stage Direction]
Statement by Departments of Expenditure for the Last Five Fiscal Years

Concluded _________________________________(000 omitted)_________________________________
Ordinary Account	1930-31	1931-32	1932-33	1933-34	Estimated 1934-35$	$	$	$	$Marine	8,030	7,262	5,801	5,439	5,911Canadian Radio Broadcasting Commis-	149	1,025	1,252Mines and Geological Survey	1,420	1,264	1,048	909	1,009Movements of coal and Dominion Fuel	Act	514	721	1,220	2,772	2,450National Defence-	Militia Service	10,953	9,700	8,719	8,774	9,335Naval Service	3,598	3,043	2,167	2,171	2,222Air Service	7,147	4,040	1,731	1,685	2,262Sundry Services	1,928	1,347	1,078	791	371National Revenue (including Income Tax).	13,972	13,920	10,846	10,354	10,264Pensions and National Health-	Treatment and after-care of returned	soldiers	9,774	11,154	10,066	9,124	9,687Pension, war and military	45,541	48,249	45,079	43,883	43,638Health Division	1,342	1,246	924	802	817Post Office	37,892	36,052	31,607	30,554	30,528Privy Council	54	53	47	49	46Public Archives	212	212	174	157	210Public Printing and Stationery	295	289	231	172	388Public Works	25,453	17,648	13,108	10,827	10,106Railways and Canals	4,479	3,997	3,667	3,315	4,864Maritime Freight Rates Act	3,615	2,555	1,921	1,989	2,573Royal Canadian Mounted Police	3,192	3,488	5,626	5,315	6,000Secretary of State	479	483	418	387	385Soldier Settlement Board	1,300	1,036	818	810	766Trade and Commerce-	Department	4,955	6,417	3,277	3,007	3,197Mail subsidies and steamship subventions	1,323	2,999	2,081	2,221	2,280Canada Grain Act	2,356	2,306	2,026	1,759	1,711Total ordinary expenditure	382,827	365,873	349,811	346,649	356,638
Capital Expenditures
Under capital expenditures, the chief item amounting to $4,900,000 is for dredging the river St. Lawrence ship channel. Comparatively small amounts have been required for the Welland ship canal and towards completion of the Hudson Bay railway and
terminals. The total for the year will be $7,100,000, an increase of $600,000 over the expenditure of the previous year. The estimates provided for an expenditure on capital account of $7,246,000.
A comparative statement of capital expenditure over the five year period follows:
Capital Expenditures (000 omitted)
-	1930-31	1931-32	1932-33	1933-34	Esti- mated 1934-35$ 9,842 6,371 12,009	$ 3,299 6,242 7,439	$ 3,027 1,503 4,018	$ 1,975 737 3,778	$ 317 530 6,289
28,222	16,980	8,548	6,490	7,136
					
Special Expenditures	1930-31	
$ 4,432,000Special expenditures will total $66,100,000,	1931-32	
38,295,000of which $60,400,000 represents payments in	1Q„_q,	s« 791 nonthe fiscal year for unemployment relief ^	
'	'measures. This amount is much greater than	1933-34	
35,898,000in any previous year as will be seen from the	1934-35	
60,448,000following statement of expenditures for un-	
employment relief since 1930-31:	Total		$175,794,000
[Ml. Rhodes.)

The Budget-Mr. Rhodes
The estimated, expenditure in the present fiscal year has been made for the following
purposes:	.
Direct relief	 $33,500,000
Dominion contribution to provincial and municipal works and undertakings	 5,110,000
Public Works Construction Act,
1934	 8,500,000
Dominion contribution to relief in
Saskatchewan	drought	area..	..	5,000,000Other expenditures, including dominion projects, camps for single homeless unemployed	men,	etc..	8,338,000Total	
$60,448,000
The disbursements for direct relief have been, much greater than the actual expense incurred in the fiscal year period. In the first place, it will foe remembered that the Relief Act of 1933 limited the amount which could be expended for direct relief to $20,000,000. This resulted in a carryover from last year amounting to $9,360,000, which has been disbursed in the present fiscal year. Furthermore, the institution of monthly grants in aid to the provinces covering the dominion's contribution for relief expenditure from August 1st last, has had the effect of bringing up to date the dominion's share of direct relief expenditure, whereas in previous years the usual delay in the presentation of accounts first by the municipality to the province and then by the province to the dominion, had the effect of creating a very
considerable lag in the disbursements. At the present time, the monthly grants to the provinces amount to $1,751,000.
It is estimated that up to the end of March, $5,000,000 will be paid out by way of advance to the province of Saskatchewan for relief in the drought area and actual disbursements by the province are being checked by a representative of the dominion stationed at Regina. A final decision has not yet been reached with the province as to the amount of the cost of these relief measures which will be assumed by the dominion and, in the meantime, the sums which have- been advanced have been accepted by the province as loans for which security has been given. In order, however, that our statement of expenditures for the year may be as inclusive as possible of obligations relating to the year, our estimated expenditures as listed above include the whole of the $5,000,000 made available to Saskatchewan to date for disbursement to farmers in the drought area.
The program of dominion public works under the Public Works Construction Act passed at the last session, provided for a total expenditure of $39,690,000. While the actual disbursements to the end of the fiscal year will be about $8,500,000, contracts and commitments actually made to date are in the neighbourhood of $25,000,000.
A comparative statement showing Special Expenditures under the different heads for the past five years follows:
Special Expenditures
(000 omitted)
* -	1930-31	1931-32	1932-33	1933-34	Esti- mated 1934-35$ 110 193 2,955 500 4,432	$ 91 1,350 3,500 1,331 13,190 25,106	$ 55 1,639 2,951 188 548 17,048 19,125	$ 56 2,550 2,517	$ 60 2,860 2,383 6 3 55 310 2,430 49,150
Reparations-claims for compensation						
Unemployment relief, 1930					4 564 6,948 28,382	
Unemployment relief, 1931						
Unemployment relief, 1932						
Unemployment relief, 1933						
Unemployment relief, 1934						
Wheat bonus	10,908	1,811	Reduction of loans to soldier settlers	8,599	1,766	400 8,500Public Works Construction Act	Total special expenditures	16,789	55,476	43,365	42,787	66,157
Loans to Provinces
It has again been necessary, as in the previous three years, for the dominion to assist the four western provinces by the granting of loans to enable them to finance, in part, provincial and municipal expenditures for relief 92582-1251
and to make loans to farmers in distressed areas for the purchase of seed grain, feed, etc.
During the year, several of the provinces were able, by reason of their improved budgetary position and the strength of investment markets, to make public issues of
The Budget-Mr. Rhodes
[Stage Direction]
securities and they were not obliged to rely wholly upon the dominion for their borrowings. The aggregate of the loans by the dominion, however, was large, the net amount, after crediting repayments, being $23,300,000, divided among the provinces as follows:
Manitoba	 $ 2,900,000
Saskatchewan	 10,500,000
Alberta	 1,900,000
British Columbia	 8,000,000
[Stage Direction]
The net amount of loans outstanding at the end of the previous fiscal year was $51,300,000 which, with the net loans granted in the current year of 123,300,000, brings the total of
dominion assistance to the four western provinces by way of loan under the relief acts, to $74,600,000. Short date Treasury Bills bearing interest at the rate of 5 per cent to July 1st last and 4^ per cent thereafter, have been tendered by the provinces in respect of the loans. Interest has been paid in cash by the provinces of Manitoba, Alberta and British Columbia as it became due, but the province of Saskatchewan, being unable to meet such payments, has covered the interest accruals by tendering their treasury bills.
A statement of the loans to date by provinces, showing the purposes for which they were granted, follows:
Loans to Provinces under Relief Acts Estimated Net Outstanding March 31, 1935
-	Loans to meet maturing obligations and interest	Loans specifically for Agricultural Relief, including feed and seed grain	Loans for provincial purposes generally including public works and direct relief	Total$ 3,425,316 3,934,341 3,142,000 5,298,664	* 265,000 7,892,633 2,235,000	$ 9,418,313 22,662,452 6,600,000 9,715,571	$ 13,108,629 34,489,426 11,977,000 15,014,235
15,800,321	10,392,633	48,396,336	74,589,290
Loans and Advances-Non-active
The total outlay under this head will be $1,700,000, as compared with over $3,000,000 last year. These are amounts paid for deficits and capital requirements of the Canadian National Steamships, the deficit of the Jacques Cartier bridge, Montreal, and for loans to several of the harbour commissions. Being non-interest producing, these advances are treated as additions to the net debt.
It is gratifying to note that the operations of the Canadian National Steamships have shown a marked improvement over the previous year. The cash deficit of the West Indies Service amounted to $567,000, as compared with $968,000 in 1933. The ships remaining in the Canadian Government Merchant Marine fleet operated in 1934 at a cash loss of $127,000, as compared with $18,000
in the previous year. In addition, $43,000 was provided from dominion funds for capital expenditures on the West Indies ships. The total amount required for the steamships in respect of operations in 1934 was therefore $737,000. The merchant marine, due to curtailment in operations, found it possible to return to the dominion a further $250,000 advanced some years ago for working capital, and with the application of this credit, the net amount required for shipping services this year will be $487,000. The amount paid to the Montreal harbour commission for the deficit on the Jacques Cartier bridge was $434,000, bringing the total amount which the dominion has had to pay since 1930, to $2,022,000.
Non-active loans to the harbour commissions at Chicoutimi, Halifax, Quebec, Saint John and Three Rivers, will total $802,000.
[Stage Direction]
The Budget-Mi. Rhodes
A statement of non-active advances for the past five years follows:
Loans and Advances, Mon-Active (000 omitted)
1930-31	1931-32	1932-33	1933-34	Estimated 1934-35$	$	$	$	$Loans to Can. National Steamships. .	1.827	1,199	1,3830.	140.	487Loans to Harbour Commissioners..	3,661	1,913	4,898	2,110	1,237Can. Pacific Railway (Relief Acte) . .	-	-	1.447	1,000	Accounts carried as Active Assets transferred to Non-active	-	-	62,938* ,	-	115,488	3,112	67,900	3,096	1,735* Canadian National Railways-Loans of 1931-32	
$41,121Sundry Harbour Commissions-Advances prior to 1932-33	
21,817* Canadian National Railways-Loans of 1931-32	
$41,121Sundry Harbour Commissions-Advances prior to 1932-33	
21,817
In addition to the advances to harbour commissions treated in our accounts as non-active, there has been made in the past year a comparatively small amount of loans to the harbour commissions at Montreal and Vancouver. As interest is paid by these commissions on the loans which they have received from the
treasury, they are carried in the accounts as active assets.
For purposes of record, there is submitted a statement showing loans to all harbour commissions for the pa9t five years and the aggregate to date, which has noiw reached the large sum of $138,000,000:
Advances to Harbour Commissions (000 omitted)
-	1939-31	1931-32	1932-33	1933-34	Ksti- mated 1934-35$ 846 3,539 2,291 170	$ 465 2,752 1,412 534 189 1,379 5,764 747 809	$ 324 1,023 584 395 66 341 2,654 160	S 332 151 449 489 19 107 924 107 1,208	$ 256 65 97 434
Montreal Bridge deficit						
	3,491 1,094 1,544 2,802				4 471 6 296
					
					
					
					
	15,777	14,051	5,547	3,786	1,629
Advances to Date (000 omitted)
Chicoutimi	 $ 3,539
Halifax	 8,833
Montreal	 58,519
Montreal Bridge deficit	 2,022
New Westminster	 275
Quebec	  26,261
Saint John	 13,219
Three Rivers	 2,700
Vancouver	 22,921
[Stage Direction]
Canadian Farm Loan Board New capital furnished to the Canadian Farm Loan Board in the year will amount to $353,000, bringing the total investment of the dominion to $8,856,000.
Bonds of the board are now purchased on a basis of 4 per cent instead of 5 per cent, as formerly, and a corresponding reduction has been made in the cost of money to farmers who borrow from the board.
Canadian National Railways The amount required in cash from the dominion treasury for deficit of the Canadian National Railways decreased by $10,500,000 in 1934, as compared with 1933. Increased earnings, on the one hand, and decrease in the charges for exchange involved in payment of interest abroad, were the main factors in this improvement. Gross earnings were greater by $16,400,000, or 11 per cent, and while operating expenses were somewhat larger than the estimated figures presented in the railway budget, the outcome on the whole was slightly better than anticipated at the beginning of the year. The amount required for deficit, after payment of interest due the public, and taken into the accounts of the dominion as an expenditure for the year, amounted to $48,400,000, as compared with $58,900,000 in 1933. While this reduction in the deficit affords a veiy welcome relief to
The Budget-Mr. Rhodes
[Stage Direction]
the treasury and tax-payer, the deficiency which still remains is of such proportions as to constitute a most serious drain on our resources.
Actually, the books of the company show a loss in 1934 of S89,600,000. This figure can be reconciled with the amount of our payment by deducting $36,000,000 for accrued'- but unpaid-interest on government advances and $5,200,000 for various charges not involving cash outlay on the part of the railway.
In addition to provision for the deficit, the dominion furnished by way of loan $579,000 for capital expenditures and $10,170,000 for retirement of miscellaneous maturing debt, making a total paid on all accounts in respect ctf the operations in the year 1934, of $59,100,000. The budget of the railways, as presented to parliament, provided for a total amount of $65,200,000. It will be seen, therefore, that the net requirements for the year were $6,000,000 less than estimated, accounted for mainly by savings in capital expenditures.
In addition to the assistance granted in cash, the dominion guaranteed an issue of 3 per cent 16-year bonds to the amount of $20,500,000 issued and payable in Canada only, for the purpose of refunding $17,060,000 Canadian Northern dominion guaranteed 4 per cent debenture stock which fell due on September 1st last and $3,510,000 Great Northern Railway Company of Canada 4 per cent bonds due October 1st last. The cost of this flotation to the company was 3 TO per cent, the resultant saving in interest charges being about $200,000 annually.
On February 15th last, another issue of Canadian Northern Railway Company 4i per cent dominion guaranteed bonds fell due, payable in Canada and New York, and was provided for, pending a suitable opportunity for the issue of long-term securities, by the issue of 2 per cent temporary guaranteed bonds. No public sale took place in this connection, $6,831,000 having been advanced from the dominion treasury and the balance of $10,169,000 having been secured by the sale of temporary bonds to trustees of railway equipment issues.
The debt of the Canadian National Railway system, outstanding in the hands of the public is now 81238,000,000, having been reduced by $15,000,000 in the past year. Of the amount outstanding, $956,000,000 are obligations guaranteed by the dominion.
A further improvement in railway earnings is anticipated in the year 1935 and the estimates of the company are based upon a further reduction of $4,400,000 in the deficit, bringing the loss to $44,000,000. In addition, the company will require $5,500,000 for capital expenditures and $25,700,000 for retirement of capital obligations, including sinking funds and equipment principal payments and the $17,000,000 bond maturity on February 15, 1935, already referred to. The total of these amounts is $75,200,000.
The following statement summarizes the financial requirements of the Canadian National Railway system in respect of the calendar year 1934, as compared with their budget figures and with their actual requirements in 1933:
Canadian National Railways Financial Requirements
-	Actual 1934	Budget 1934	Actual 1933By Cash: Deficit- System (ex. eastern lines)	$ 42,589,825 5,818,076	$ 43,240,298 5,600,000	$ 52,263,819 6,691,569
48,407,901 578,991 10,170,618	48,840,298 4,202,007 12,185,828	58,955,388 1,958 116 11,269,985
			
			
	59,157,510	65,228,133	72,183,489 5,000,000
			
	59,157,510	65,228,133	67,183,489
By guarantee: % 1934 Long Term Refunding (Maturities $20,573,583)				
	20,500,000	20,500,000	
[Stage Direction]
The Budget-Mr. Rhodes
Summary of Expenditures The grand total of expenditures for the year, under all heads, including relief and railway deficit, will be $480,000,000. This is an increase of $22,000,000, as Compared with
1933-34, which is more than accounted for by the increase in unemployment relief outlays.
A summary of expenditures, with comparisons for the previous four years, is now submitted :
Summary of Expenditures (000 omitted)
-	1930-31	1931-32	1932-33	1933-34	Esti- mated 1934-35Ordinary expenditures	
Capital expenditures	
Special expenditures	
Loans and advances, non-active	
Canadian National Railway deficits- System ex. eastern lines*	$ 382,827 28,222 16,789 5,488	$ 365,873 16,980 55,476 3,112	$ 349,811 8,548 43,365 67,900 53,423 8,717	$ 346,649 6,490 42,787 3,096 52,264 6,691	$ 356,638 7,136 66,157 1,735 42,590 5,8186,712	6,632	
440,038	448,073	531,764	457,977	480,074
'Corresponding figures for operations in the years 1930 and 1931 were $28,425,000 and $52,256,000 respectively. The losses in 1930 and 1931 were financed by loans and/or guarantee of securities. Government loans of $41,121,000 in respect of 1931 operations appear in the above statement under Loans and Advances Non-active for the year 1932-33.
Net result of Year's Operations
Taking the ordinary revenues for the year at $359,300,000 and ordinary expenditures at $356,600,000, there is a resulting surplus on ordinary account of $2,700,000. This is the first surplus on ordinary account since 1929-30, and compares with a deficit of $22,000,000 last year and $43,000,000 the year before.
There are, of course, to be taken into consideration, capital and special expenditures, less special receipts, and loans and advances non-active, to arrive at the net result for the year on government operations. These amount to $72,000,000, and wipe out the surplus on ordinary account, producing a deficit of $69,-
300,000.
Adding the railway deficit of $48,400,000, the total increase in debt for the year becomes $117,700,000. The corresponding figure for the previous year was $133,500,000, indicating an over-all improvement of $15,-
800,000.
It may be useful at this point to analyze the increase of debt which the dominion has had to assume in the past five years and to indicate briefly the purposes for which the added obligations have been incurred. The net debt has risen by $669,900,000 since the end of 1929-30. The present administration took office in August, 1930, after the budget for 1930-31 had been determined and, with the exception of unemployment relief expenditure of $4,400,000, the deficit of $83,-
800,000	incurred in that year cannot properly be attributed to its period of office. For the
purpose of making a complete presentation, however, the year 1930-31 is included in this computation.
The largest single factor contributing to the increase of our debt has been the deficits of the Canadian National Railway system. The total expenditure in that connection has been $223,900,000, accounting for 34 per cent of the increase in debt in the period. Undoubtedly, the falling-off in traffic due to the depression would in any event have imposed serious burdens on the public, but the problem was rendered particularly acute by reason of the dead-weight of railway debt incurred for railway expansion in the previous eight-year period, much of it payable in external currencies.
Next in order of importance comes the expenditure for unemployment relief and wheat bonus, aggregating $188,500,000, representing 28 per cent of the total increase in dhbt.
Deficits on ordinary account, due to the falling off in taxation revenues and notwithstanding drastic curtailment in expenditures and personnel of government departments, amounted to $135,350,000, or 20 per cent of the additional debt incurred in the period.
Capital expenditure on public works totalled $67,300,000, or 10 per cent. Of this amount $28,200,000 was incurred in the year 1930-31 alone.
Loans and advances, non-active, chiefly to harbour commissions and steamships, amounted to $40,200,000, or 6 per cent. The greater
The Budget-Mr. Rhodes
[Stage Direction]
part of the expenditure for harbour commissions, amounting to $35,600,000, arises out of projects initiated and carried on before the present government took office. The expenditure was then carried in the accounts as active assets and excluded from the net debt. These so-called assets were written down in
1932-33, as the commissions had no revenues over operating expenses to support this debt.
The balance of the debt increase is made up of miscellaneous special expenditures, totalling $14,500,000, or 2 per cent.
A brief statement accounting for the increase of debt is now submitted:
Increase of Net Debt, March 31, 1930, to March 31, 1935
Loans and advances, non-active	
Other special expenditures, less special receipts	
Increase in net debt, 1930-35	 $669,900,000
Amount	Per cei
$223,970,000	34
188,500,000	28
135,350,000	20
67,380,000	10
40,200,000	6
14,500,000	2
$669,900,000	100
While the debt figures have grown in the five year period to the extent indicated, fortunately the annual interest burden has not increased in anything like the same proportion, due to the notable savings made through debt refunding operations. In actual fact, the annual charges on the total interest-bearing debt of the dominion, funded and unfunded, have increased by only 814,300,000 in the five years. This is the measure of the additional burden in fixed charges in the period of the depression. Had the new debt been incurred at the average rate now prevailing, and had there been no such savings through refunding, the addition to the debt charges would have been almost twice as large.
Furthermore, it should be pointed out that $3,450,000 of the increased debt charge of $14,300,000, arises out of the transfer this year of 3 per cent dominion bonds to the Bank of Canada in respect of the outstanding note issue not covered by gold or silver. There will be on the revenue side an off-setting item, at least in part, to the interest payable on these bonds in the profits which the bank will turn back to the government. The transaction is more in the nature of an internal financial arrangement than the creation of a new debt, an interest bearing liability having, for the purposes of the establishment of the bank, been substituted for the non-interest bearing liability formerly represented by the uncovered note issue.
Controllable and Uncontrollable Expenditures
The fixed and uncontrollable expenditures of government in the current year will total about $233,000,000 and the controllable, $138,000,000; that is, out of every $100 spent by the government, nearly $63 is required for

interest, pensions, provincial subsidies, exsoldiers' care, and similar items. This computation, as in past years, excludes the cost of unemployment relief and the Canadian National Railway deficit. .
It may be opportune to call attention again to the reduction *which has been made in controllable expenditures since 1930-31. While uncontrollable items exceed those of 1930-31 by $21,500,000 the main increases being in interest on public debt and old age pensions, the controllable expenditures on ordinary account now stand at $45,500,000 below the figure of four years ago, a reduction of 26 per cent. Capital and other expenses are down by $33,-
600,000,	making a total reduction of $79,100,000.
The decrease in ordinary expenditures has involved not only the closest scrutiny of estimates and careful administration on the part of the spending departments, but a continuous supervision of personnel and spending policy through the treasury board. The actual decrease in the number of government employees since 1930, including fluctuating as well as permanent staffs, has been 12,700, with a resultant saving in salaries and wages exceeding $12,000,000 a year, apart altogether from the amount of $7,300,000 arising from the operation of the Salary Deduction Act.
The first and fundamental step in the strengthening of treasury control of expenditures in the past four years, was the revision of the Consolidated Revenue and Audit Acit and the consequent reorganization of governmental accounting staffs instituted at the instance of the Prime Minister in 1931. Since that date, there has been an increasing degree of treasury control of expenditures. The advantage to the tax-payer has been apparent from the figures cited above. It is to be

The Budget-Mr. Rhodes
expected that with the addition of new governmental functions under the legislation of parliament, as, for example, unemployment insurance, there will be some expansion in the ordinary expenditures of government and, with improvement in business and expanding revenues, some additional amounts will be required for existing services which have been placed upon short ration in recent years. Nevertheless, the dominion's fixed obligations are such as to require, for some years in the future at least, most prudent and economical administration. To that end, the technique of control, which has been developed in recent years, will need to be maintained and strengthened wherever possible.
In submitting the expenditure statement classified under the headings "Controllable" and "Uncontrollable," the comparative figures for the year immediately before the war, 1913-14, are given as a matter of record. It
will be recalled that last year attention was drawn to the fact that after eliminating Post Office expenditures, for which there are compensating revenues, the ordinary controllable services were costing on a per capita basis practically the same figure as in 1913-14. The same situation holds in so far as the current year's expenditures are concerned. As pointed out last year, this fact is all the more impressive in indicating the economies which are now being observed when one considers the large amounts involved in expenditures to-day for which there was no counterpart in 1913-14, for example, air services, radio services and broadcasting, research bureau and coal movement subsidies.
A statement comparing the controllable and uncontrollable expenditures in the years 191314, 1930-31 and 1934-35, showing the percentages of the total required for the various services, is now submitted:
The Budget-Mr. Rhodes
[Stage Direction]
Expenditure, Uncontrollable and Controllable
(000 omitted)
-	1913-14	1930-31	1934-35	Actual Expendi- ture	Percentage of total Expenditure	Actual Expendi- ture	Percentage of total Expenditure	Based on Estimates	Percentage of total Estimates$	S	$	In General Uncontrollable-	Interest on Public Debt	12,894	9-36	121,290	28-28	138,529	37-3244,234	10-31	42,000	11-315,658	1-33	14,900	4-01Other"pensions and superannuation.	756	0-55	4,628	1-07	4,626	1-2510,183	2-37	10,137	2-73Subsidies to provinces	11,280	8-19	19,036	4-44	15,369	4-14Other items	3,101	2-25	6,657	1-56	7,540	2-03Total Uncontrollable	28,031	20-35	211,686	49-36	233,101	62-79Controllable-	Ordinary-	Agriculture, including Marketing	Act	3,271	2-37	10,119	2-36	7,273	1-96Fisheries	1,655	1-20	2,275	0-53	1,502	0-41Indian Affairs	2,120	1-54	5,847	1-36	4,104	1-11Interior	5,132	3-73	8,104	1-89	2,837	0-76Justice-including penitentiaries..	2,469	1-79	5,775	1 -35	5,206	1-40Marine-including radio commis-	sion	4,915	3-57	8,030	1-87	7,163	1-93Mines-including movements of	741	0-54	1,934	0-45	3,459	0-93National Defence	12,011	8-72	23,626	5-51	14,190	3-82National Revenue	5,124	3-72	13,972	3-26	10,264	2-77Post Office	13,566	9-85	37,892	8-83	30,528	8-22Public Works	20,288	14-73	25,453	5-94	10,106	2-72Railways and Canals	2,279	1-65	4,043	0-94	4,639	1-25Royal Canadian Mounted Police.	1,101	0-80	3,005	0-70	5,773	1-56Trade and Commerce	5,323	3-87	8,407	1-96	7,021	1-89Other services	7,009	5-09	16,723	3-90	15,601	4-2087,004	63-17	175,205	' 40-85	129,666	34-93Capital-	Railways	7,103	5-16	9,842	2-29	530	0-14Canals	2,847	2-07	6,371	1-49	317	0-09Public Works	10,100	7-33	12,009	2-80	6,289	1-7020,050	14-56	28,222	6-58	7,136	1-93Special, including Miscellaneous	Charges	32	0-02	9,456	2-21	635	0-17Loans and advances non-active	2,612	1-90	4,325	1-00	680	0-18Total Controllable	109,698	79-65	217,208	50-64	138,117	37-21Total uncontrollable and controllable.	137,729	100-00	428,894	100-00	371,218	100-00Not included in the above-	Canadian National Railways De-	35,137	48,408	4,432	51,948	8,500	Canadian Government Railways-	17,295	19i036

[Stage Direction]
In the fiscal year 1934-35 the dominion issued loans in three markets-London, New York and Canada. These loans were made for refunding, as well as for current requirements.

In May last, an issue of £10,000,000 3i per cent registered stock was sold in London at a price of 96.50, or at an interest cost of 3.48 per cent. The issue will mature May 1, 1955 with the right to call at par on or after May 1, 1950. Part of the proceeds of this issue

The Budget-Mr. Rhodes
waa used to pay off the 3^ per cent sterling loan dated June 1, 1884, and maturing June 1, 1934. The amount of this loan outstanding was £4,822,029, of which £2,086,776 was held in the sinking fund. The balance of the proceeds was used for current purposes, including a temporary loan to the Canadian National Railways to enable it to redeem stock on the London register of the issue maturing September 1st, already referred to. The government was later reimbursed by the issue of guaranteed railway securities in Canada.
The $60,000,000, 4 per cent notes due October 1, 1934, in New York, were called for redemption on September 1st. A one-year banking credit was obtained from New York banks at a rate of 2 per cent to the amount of $50,000,000 to pay off the called notes. The balance of $10,000,000 was met out of current cash resources.
On November 1st, last, the unconverted balance of the 1919-34 Victory loan amounting to $222,216,850 matured. To meet this maturity, the 1934 Refunding loan was issued in Canada on October 15th. This loan was offered in four maturities; two-year bonds
with interest at 2 per cent, five-year with interest at 2j per cent, eight-year with interest at 3 per cent and fifteen-year bonds with interest at 3J per cent. The fifteen year bonds were made subject to call, at the option of the government after ten years. The two-year bonds were offered at 98.90 to yield 2.57 per cent, the five-year at 98.15 to yield 2.90 per cent, the eight-year at 97.00 to yield 3.43 per cent and the fifteen-year at 96.50 to yield 3.81 per cent.
A small concession in interest and, on the two longer maturities, a premium on the maturing bonds, was offered to those who converted into the new issue. The total amount of Victory bonds converted into the new issue was $157,369,900, or nearly 71 per cent of the amount outstanding. Cash subscriptions totalled $119,405,100, of which only $86,170,200 was accepted.
The practice of issuing treasury bills by public tender was continued. The most recent issue, was made yesterday when $15,000,000 of three months' bills were sold at an average discount rate of 1-76 per cent. The following is a statement of the issues made:
Treasury Bills Sold by Public Tender
April 18, 1934-
due July	1,	1934-$ 1,600,000	sold	at	an	average	cost	of	2.41	per	centdue Oct.	1,	1934-	13,400,000	sold	at	an	average	cost	of	2.71	per	cent
November 1, 1934-
due Feb.	1,	1935-	1,600,000	sold	at	an	average	cost	of	2.35	per	centdue May	1,	1935-	18,400,000	sold	at	an	average	cost	of	2.47	per	cent
February 1, 1935-
due May 1, 1935

 18,300,000 sold at an average cost of	2.05 per cent
March 22, 1935-
due June 22, 1935-* 15,000,000 sold at an average cost of	1.76 per cent
The School Lands 5 per cent debenture stock, issued to the provinces of Manitoba, Saskatchewan and Alberta, matured on July 1, 1934, and was extended for a period of one year at the same rate of interest.
The issue of one-year 3i per cent treasury bills to the amount of $50,000,000 that matured on August 1, 1934, was replaced by an issue of one-year treasury bills bearing interest at 2% per cent.
In connection with the opening of the Bank of Canada there was issued to that institution in accordance with the Bank of Canada Act, $115,013,636.82 of 3 per cent five-year bonds. This issue was to provide for the portion of the dominion note issue that was not covered by gold or silver. On the same date $35,000,000
of three-months treasury bills were sold to the Bank of Canada at a discount of 1J per cent, to replace a similar amount of 4 per cent treasury bills held by the chartered banks.
Reference has already been made to the large savings in interests charges arising from refunding operations in the past four years. It is noteworthy that as a result the average interest rate on the dominion's funded debt and treasury bills has now been reduced to 4.15 per cent, compared with a hight point of 5.294 per cent in 1922.
The following is a statement of the unmatured funded debt and treasury bills of the dominion outstanding at March 31st, 1935, showing also the annual interest charges thereon:	.
The Budget-Mr. Rhodes
[Stage Direction]
Unmatured Funded Debt and Treasury Bills, as at March 31,1935, and Annual Interest Charges
Date of Maturity	Rate	Where Payable	Amount of Loan	Annual Interest Charges1935 April 30	% If	$ ets. 2,540,100 00 3,407,630 26 2,737,986 67 33,293,470 85 874,000 00 50.000.	000 00 50.000.	000 00 25.000.	000 00 89.393.000	00 40.000.	000 00 63.336.000	00 79.535.200	00 89,787,100 00 236,299,800 00 8,071,230 16 18.250.000	00 10.950.000	00 15,056,006 66 47.269.500	00 7,933,000 00 115,013,636 82 75.000.	000 00 141.663.000	00 40.409.000	00 147.000.	100 00 50.000.	000 00 88.337.500	00 45.000.	000 00 4,888,185 64 138.322.000	00 137,058,841 00 100.000.	000 00 56.191.000	00 48.666.666	67 43,125,700 00 37.523.200	00 73.000.	000 00 276,687,600 00 289,693,300 00 93.926.666	66 100,000,000 00 18.400.000	00	$ cts. 44,451 75 68,152 612	2	54i759 73 1,664,673 54 43,700 00 1,437,500 00 1,000,000 00 1,000,000 00 3,128,755 00 1,800,000 00 1,266,720 00 3,976,760 00 4,489,355 005	5	21 2	
Oct. 15 		4			
Oct. 15.	31			
1936 Feb. 1	41 2			
Oct. 15				
	5			
1937 Mar. 1 (a)	5			
	51			12,996,489 00 242,136 90 547.500	00 328.500	00 526,960 23 1,890,780 00 198,325 00 3,450,409 10 3.375.000	00 7,083,150 00 1.212.270	00 7,350,005 00 2.250.000	00 3,533,500 00 2.025.000	00 122,204 64 4.841.270	00 4,797,059 43
	3			
July 1 .	3			
July 1 ..	3			
July 1...	31 4			
1939 Oct. 15 ..				
Oct. 15		21 3			
				
	41 5			
				
1942 Oct. 15		3			
1943 Oct. 15 		5			
1944 Oct. 15 ..	41 4			
1945 Oct. 15 .				
1946 Feb. 1 .	41 21			
1947 Oct. 1 .				
1949 Oct. 15 .	3i 3J			
1950 July 1					
1952 May 1...	5			5.000.	000 00 2,247,640 00 1,581,666 67 1,940,656 50 1,688,544 00 2,920,000 00 12,450,942 00 13,036,198 50 3,757,066 67 4.000.	000 00 454,480 00
Oct. 15		4			
1955 May 1...	31 41			
1956 Nov. 1...				
1957 Nov. 1...	41			
1958 Sept. 1...	4			
	4}			
1959 Nov. 1...	41			
1960 Oct. 1...	4			
	4			
Treasury Bills due May 1, 1935.	2-47	Canada	Treasury Bills due May 1,1935.	2-05	Canada	18,300,000 00	375,150 00Treasury Bills due June 11,1935.	1-75	Canada	35,000,000 00	612,500 00Treasury Bills due June 22,1935.	1-76	Canada	15,000,000 00	264,000 003,061,940,421 39	127,074,231 27Payable in Canada	
Payable in Canada and New York
Payable in New York	
Payable in London	
$ cts.	%
2,268,673,737 93	74-09
90,661,100 00	2-96
292,737,986 67	9-56
409,867,596 79	13-39
Less-Bonds and Stocks of the above loans held as Sinking Funds	
3,061,940,421 39 54,532,688 09
3,007,407,733 30
(a) Tax free in Canada.
Indirect Liabilities
Bonds bearing the guarantee of the dominion outstanding in the the hands of the public, at present amount to $987,300,000, a decrease of $6,000,000 in the year.

With reference to guarantees under the relief acts, no new commitments were entered into during the year and substantial reductions occurred in the amounts outstanding under guarantees given in previous years.

The Budget-Mr. Rhodes
The guarantee in connection with the financing of the completion of the Beauharnois power project terminated during the year without cost to the government. The Canadian Pacific Railway repaid bank loans to the extent of $12,000,000, reducing the amount of the guarantee correspondingly. The guarantee in connection with the province of Manitoba savings office was reduced by =iome $1,500,000. 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:
Guarantees Under Relief Acts
Province of British Columbia	
Province of Manitoba	
Province of Manitoba Savings Office	
Algoma Steel Corporation	
Dominion Steel and Coal Corporation	
Canadian Pacific Railway Company	
Government of Newfoundland	
Canadian Co-operative Wheat Producers Limited
Estimated principle amount of guarantee outstanding Mar. 31,1935 !	626.533
5,894,127 9,327,327
445.000
800.000 48,000,000
025,000
Unstated
The following is a statement of the guaranteed bonds presently outstanding:
Bonds Guaranteed by Dominion Government as at March 31, 1935
Date of Maturity	Issue	Interest Rate	Amount OutstandingSept. 1, 1936	% 6	$ 24.220.000	00 23.740.000	00 23.779.000	00 24.238.000	00 700,000 00 20.500.000	00 50.000.	000 00 667,953 04 9,359,996 72 50.000.	000 00 26.000.	000 00 9,400,000 00 50.000.	000 00 70.000.	000 00 65.000.	000 00Oct. 1, 1940	7	Dec. 1, 1940	7	July 1, 1940	6a 4f	April 1, 1948	Dec. 15, 1950	3	Sept. 1, 1951	4 J	5	July 10, 1953	3	Feb. 1, 1954	5	Sept. 15, 1954	4^	Mar. 1, 1955.	
June 15, 1955	Canadian National (West Indies) Steamships	5 4i	Feb. 1, 1956	4 \	July 1, 1957	ih	July 20, 1958	31 3|	7;896,555 51 3,149,198 66 34,229,996 87 34,992,000 00 8,440,848 00 35.000.	000 00 60.000.	000 00 60,000,000 00 19.000.	000 00 18.000.	000 00 20,152,580 93May 4, 1960	May 19, 1961	3£	Jan. 1, 1962	3	Jan. 1, 1962	4	Dec. 1, 1968	4 \	July 1, 1969	5	Oct. 1, 1969	5	5	5	By tenders or drawings....	Canadian National	2	Various dates, 1935-54	
Various dates, 1935-36....	City of Saint John Debs., assumed by Saint John Harbour Commissioners	
Canadian National (temporary)	Various 2	1,233,527 74 10,169,000 00Serial-Feb. 1 and Aug. 1, 1935-38	5	5,250,000 00 60,833,333 33 20,782,491 67 13,252,322 67 119,839,014 33 1,499,979 674	5	«	5	4	«	4	
987,326,599 14
The Budget-Mr. Rhodes
[Stage Direction]
The following statement of the assets and March 31, 1935, completes the presentation of liabilities of the dominion, estimated as at the financial record of the year:
Liabilities, March 31, 1935 (Estimated)
Bank circulation redemption fund	
Insurance and superannuation funds-
Government annuities	$	46,329,000
Insurance fund, civil service	 9,178,000
Insurance fund, returned soldiers	 13,474,000
Retirement fund	 7,968,000
Superannuation funds	  48,622,000
Trust funds-
Indian funds	 13,792,000
Common school funds	 2,675,000
Contractors' securities deposits	  850,000
Other trust funds	 2,575,000
Contingent and special funds	
Post Office money orders, postal notes, etc., outstanding
Province accounts	
Post Office savings bank deposits	
Funded debt-
Unmatured	 3,007,408,000
Matured but not presented for payment	 4,050,000
Interest coupons matured but not presented for payment
6,696,000
125,571,000
19.892.000
3.650.000
3.750.000
9.624.000
22.500.000
3,011.458,000
1,700,000
[Stage Direction]
Active Assets-
Assets, March 31, 1935 (Estimated)
Cash, working capital advances and other current assets Gold Bullion account	
Loans to provinces-
Housing	
Relief Acts.. ..
Loans to foreign governments-
Greece	
Roumania	
Loans to harbour commissioners-[DOT]
Montreal	
Vancouver	
New Westminster	
Bond-holding account	
Canadian National Railways	
Canadian Farm Loan Board	
Soldier and general land settlement	
Seed grain and relief advances	
Canadian government railways open and stores accounts Deferred debits-
Unamortized discount and commission on loans.. ..
[Stage Direction]
9,771,000
74,649,000
6,525,000
23,969,000
58.519.000
22.921.000 275,000
25,155,000
2,750,000
84,420,000
30,494,000
81.715.000
4.444.000
27.053.000
8.857.000
44.700.000
2.385.000
15.749.000
29.441.000
$	357,163,000
Net debt March 31, 1935 (estimated)	 2,847,678,000
Represented by-
Non-active assets March 31, 1935 (estimated).
Capital expenditures-[DOT]
Public Works, Canals	 242,397,000
Railways	 443,712,000
Public buildings, harbour and river improvements	 258,414,000
Military property	and stores	 12,035,000
Territorial accounts	 9,896,000

966,454,000

The Budget-Mr. Rhodes
Loans, non-active

*
Canadian National Railways	 655,527,000
Railway accounts (old)	 88,399,000
Canadian National Steamships	 15,840,000
Harbour Commissioners-
Quebec	
Chicoutimi	
Halifax	
Saint John	
Three Rivers	
Montreal South Shore Bridge..
Seed grain and relief advances.. .
Soldier and general land settlement
Miscellaneous advances	
Consolidated fund-
Balance consolidated fund, brought forward from March
31, 1934	 935,419,000
Excess of expenditure over revenue, fiscal year ended
March 31, 1935 (estimated)	 108,878,000
[Stage Direction]
 1,044,297,000
26,261,000
3.538.000
8.833.000 13,219,000
2.700.000
2.022.000
56.573.000 536,000
16.514.000 3,538,000

[Stage Direction]
There remain to be considered proposals affecting our revenue position for the coming year. The gain of 12 per cent in the yield from taxation in the current year, after absorbing losses from downward revisions effected in the last budget, gives ground for satisfaction. The upward trend is continuing and I believe we are justified in anticipating with confidence further substantial additions to our income based upon the existing rates of taxation. It must not be overlooked, however, that some new expenditures will have to be met, including grants to the maritime provinces and British Columbia, reinstatement of a portion of salary deductions and expenses incidental to the operation of several of the important measures being dealt with by parliament at this session. Furthermore, although employment is increasing and railway earnings are higher, there will still be a heavy drain on our resources for unemployment and farm relief and payment of railway deficit.
Under these circumstances and with the expectation that improved conditions will render the burden somewhat less onerous than in the past few years, it seems to be the part of wisdom to budget for a further substantial increase of revenue, retaining, except for some adjustments that are not expected to alter the yield materially, the present scale of excise duties and taxes and securing some additional amounts from the income tax.
Income tax
In an address delivered a few weeks ago the Prime Minister made certain references to the necessity of changes in our income tax structure. It was pointed out at that time that incomes may be regarded generally as falling into two categories, which may be described broadly as earned income and investment income, and that this distinction which is recognized in the tax systems of other countries might fairly be held in mind when the question of distributing the burden incidental to providing increased social security was being considered.
With this principle in mind an important amendment to the Income Tax Act is being made. In order to provide additional revenue, it is proposed to levy a surtax on investment income. By investment income is meant interest, dividends, royalties, and like returns. This tax will not apply to wages and salaries up to S14,000. All income in excess of $14,000, for the purposes of this tax is to be regarded as investment income. A specific exemption of $5,000 is provided. That is to say, income up to $5,000 will not be subject to surtax even though all such income be investment income. Furthermore, if the ordinary personal exemption and the allowance for dependents exceed $5,000, exemption to the higher amount will be allowed.
The rates of surtax which are to apply to investment income range from 2 per cent on such income in the lowest category to 10 per cent on all income in excess of $200,000 and are as follows:
The Budget-Mr. Rhodes
[Stage Direction]
Included in any income exceeding	$	5.000 but not exceeding $ 10,000- 2 per centIncluded in any income exceeding	
10,000 but not exceeding	14,000- 3 per centOn	any	income	exceeding	
14,000	but	not	exceeding	20,000-	3	per	centOn	any	income	exceeding	
20,000	but	not	exceeding	30,000-	4	per	centOn	any	income	exceeding	
30,000	but	not	exceeding	50,000-	5	per	centOn	any	income	exceeding	
50,000	but	not	exceeding	75,000-	6	per	centOn	any	income	exceeding	
75,000	but	not	exceeding	100,000-	7	per	centOn	any	income	exceeding	
100,000	but	not	exceeding	150,000-*	8	per	centOn	any	income	exceeding	
150,000	but	not	exceeding	200,000-	9	per	centOn any income exceeding	
200,000	-10 per cent
Further changes in the Income War Tax Act are to be made as a result of new arrangements regarding the tax on the premium value of gold. You will remember that the Prime Minister, when discussing this tax last year, emphasized its temporary nature and also that specific provision was made in the act for its termination. It was recognized that increasing Costs due to a rising price level must inevitably wipe out the extraordinary gains which were the basis of this tax. Consequently, the tax was levied only for a definite period which expires May 31, 1935. It has been decided to adhere to the original intention and the tax therefore lapses on that date.
However, changes are to be made in the income tax regulations providing for depletion allowances, which, together with the remaining two months' yield from the gold tax, should compensate for the termination of the gold tax.
With regard to the existing regulations allowing depletion to mines, it is believed that several of these provisions have been unduly generous in their operation. Not only has it been pointed out that the specific rate of 50 per cent, in the case of precious metal mines could fairly be reduced, but also that the granting of depletion at the present rates to both corporation and shareholder cannot well be defended.
The rate of depletion allowance granted to precious metal mines is to be reduced from 50 per cent to 33j per cent.
And, dividends received by shareholders are to be taxed by reducing the allowance from 50 to 20 per cent.
Other changes in the Income War Tax Act include an increase in the corporation income tax from 12J per cent to 13i per cent and more drastic provisions with regard to consolidated income returns designed severely to restrict this privilege and, when consolidation of returns is allowed, the rate of tax is to be 15 per cent as compared with the present 134 per cent rate.
Finally, it is proposed to levy a tax on gifts. This form of tax, adopted by many countries, is being imposed primarily to operate as a deterrent to transfers of property by gift, chiefly within family groups which would have the effect of reducing personal income to lower brackets and thus securing income tax assessment at rates lower than would otherwise be applicable. It is particularly expedient to introduce this measure at this time in view of the higher rates of taxation provided for in the new surtax on investment income. Not only should this tax put our income tax structure on a more secure foundation but also it should operate in a like manner with regard to succession and inheritance taxes levied by the provinces.
The rates at which gifts are to be taxed are as follows:
Up to and including $
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
25.000		
25.000	but	not	exceeding $	50,000,50.000	but	not	exceeding	100,000100.000	but	not	exceeding	200,000200.000	but	not	exceeding	300,000,300.000	but	not	exceeding	400,000400900 but	not	exceeding	500,000500.000	but	not	exceeding	1,000,0001,000,000	[DOT][DOT]
2%
3%
4%
5%
6%
7%
8%
9%
10%
The tax shall not apply to gifts between husband and wife, nor to gifts to minors, as under the present act the donor in such cases continues to be taxed on the income from the property so transferred.
	.
Certain classes of gifts are to remain free from tax such as, for example, gifts made for charitable, religious, educational, scientific or literary purposes, or to the ' dominion, any province or political sub-division thereof for

The Budget-Mr. Rhodes
public purposes. Furthermore, gifts in the aggregate not exceeding $1,000 a year are to be free from tax.
The above amendments are to come into force as from the commencement of the 1934 taxation period and to be applicable to fiscal periods ending therein, and to all subsequent periods, except in regard to depletion allowances to those mining companies whose principal product is gold and which have been subject to the gold tax, in which case the change will be effective as from the commencement of the 1935 taxation pencil and will be applicable to fiscal periods ending therein and to all subsequent periods. The gift tax also shall only be applicable with respect to gifts made after the commencement of the 1935 taxation period.
It is estimated that on account of the above changes in the Income Tax Act revenues therefrom will be increased by not less than $12,000,000.
Sales tax
The proposed changes in the taxes levied under the Special War Revenue Act are few in number and of minor importance. Most of the changes are merely to remove existing anomalies.
With regard to the sales tax the present 6 per cent rate will be continued and the only changes in the exemption list are the addition of casein, grain separators or seed cleaning machines, pit props and packwood for use exclusively in mines. Two other alterations have been made in order to provide that goods given away or distributed free, that is to say, advertising samples, will not be subject to the sales tax and that articles produced in institutions for the deaf and dumb shall be taxed at only half the standard rate.
Excise taxes
The present excise taxes now being levied will remain unaltered. It is proposed, however, in order to prevent the falling off in revenue now obtained from the tax on matches, to impose a new tax of 20 per cent on cigarette lighters.
With regard to the 3 per cent special excise tax on imports you will remember that last year a reduction of one-half was made in the rate applying to imports under the British preferential tariff. It is now proposed to grant complete exemption to these imports in future. Otherwise, apart from a minor addition to the exemption schedule, the special excise tax remains unaltered.
Excise duties
With regard to excise duties we are making an important change in order to protect our revenues. The present levy on spirits, which is $7 per gallon, is to be reduced to $4. Our
revenues from spirits, including customs and excise duties, have fallen from 41 million dollars in 1930 to 121 million in 1934. It is
apparent from these figures that drastic action is necessary. Not only from our own point of view is this reduction expedient, but many of the provinces also have indicated the extreme difficulty of maintaining revenues which it is claimed are being seriously undermined through the unduly high rates of excise now obtaining and the wide discrepancy which exists between our rates of duty and those which are in effect in the United States. This lowering of the rate will bring our levies on spirits into line with those which prevail south of the border, and should be effective in eliminating illicit sales which would otherwise continue as a constant menace to our revenues. Our object is to secure increased returns by diverting into legal channels purchases which are now made illegally. Our gain will be at the expense of the existing illicit trade.
In order to ensure that the consumer will obtain the full benefit of this reduction and that our efforts to stamp out the smuggling trade will not be nullified, it is provided that in event of the failure of other authorities to pass on to the public the full amount of this decrease the governor in council may at any time suspend the operation of the new rate and the existing $7 rate will then again come into force.
It might be mentioned here in passing that appropriate reductions are also being made in the customs duties on spirits imported into Canada.
Customs Tariff
Proposed amendments to schedule A of the customs tariff, while not numerous, are of considerable interest, from both a Canadian and an empire point of view. In a
general way, these may	be	tabulated	as
follows:
Reductions under all tariffs	 12
Reductions under British preferential tariff
only	 34
Reductions under intermediate	tariff	only..	1
Reductions under British preferential and
intermediate tariffs	 1
Increases in intermediate and general
tariffs only	 3
Increases under all tariffs	 1
Clarifications of wording	 24
92582-126
[Stage Direction]


The Budget-Mr. Rhodes
I may here interject that any and all increases thus indicated were arrived at as a result of the findings of the tariff board in a number of cases, which I shall file at the conclusion of my address.
Reductions in the British preferential tariff are numerous and important. The fallowing goods are accorded free entry under that tariff: fire brick; chequered steel plates; piston-ring castings, not machined; box-end machines; diesels and semi-diesel engines; low-rating internal combustion engines; chassis for electric trolley buses and for motor-driven cars for use on railway lines; artists' and pupils' colours; chloride of lime; aircraft and parts; press matrices, and advertising matter descriptive of empire products; toy construction sets; brass band instruments; unbound and paper bound books; wooden doors; melton cloth and slipper cloth; and mining locomotives.
Under the same tariff-and that only-the following are reduced' in rate:	Certain
woollen and worsted fabrics (following an inquiry by the tariff board); various essences and extracts; cigarette papers, whether gummed, ungummed or in books or tubes; cut, pressed and moulded glass products; fire engines; pressed steel railway wheels; linen fire hose; leather belting; toys of pressed steel; and rugs and carpets of stated values per square yard.
One other commodity group has been selected for a drastic reduction, limited also to the British Preferential tariff, viz.; spirituous liquors. It is proposed to reduce by $3 per gallon of proof the preferential tariff rate on imported spirits, to accompany the excise reductions previously referred to. Further, action by order in council is contemplated whereby, in future, the internal excise duties levied in British countries will be disregarded in ascertaining the value for duty of liquors imported into Canada under the British preferential tariff. A feature of these downward revisions in the spirits schedules is provision for a three dollar per gallon reduction in the duty levied on rum from the British West Indies.
Enumeration of those goods in which tariff reductions are limited to the British preferential column leads, at this point, to a brief reference to the fact that, under a resolution moved to-day, the governor in council is empowered to extend within the confines of the empire the benefits of the most favoured tariff treatment accorded to any foreign country. Anomalous as it may seem, no

empire area has, in the past, been treated as a " most favoured nation " in that sense of the term, and to-day's proposed legislation is, for various reasons, of more than academic interest and value. It may be announced at once that the first order to issue under this enabling legislation will be one extending these benefits to the United Kingdom and Northern Ireland.
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. Since the emergency session of 1930 -in spite of the distressing conditions then and later prevailing, with increases in tariff the order of the day rather than reductions -more than 250 items of the Canadian schedules have been definitely reduced in rate under the British preferential tariff, and of these at least 150 have been made entirely free of duty. These calculations are in general, and are not meant to include those reductions in duties, or removal of restrictions, which have been incidental to amendments in the wording or arrangement of items in the schedules.
Reductions are not confined t'o the British preferential tariff. Those intended to apply under all tariffs relate, inter alia, to diabetic breads, titanium pigments, certain films, several gauges of fence wire, chock releases, backed burlap, cocoa matting and various parts for motor trucks.
Increases under all tariffs number one: On slide or hookless fasteners. Three commodities will bear higher rates under the intermediate and general tariffs only, namely, adhesive materials in flake or grit form, dressed or dyed rabbit skins and toiletware of sterling silver.
The preference provided in our tariff for Australian raisins and currants is extended until March 31, 1936; and provision is made whereby oranges the produce of Palestine may be imported into Canada by way of British areas, rather than direct, as heretofore required.
The outstanding amendment to the drawback schedule is to the effect that, in order to qualify for the drawback of duty on imported bituminous coal used in its manufacture, coke produced in Canada must be actually sold for use as fuel. Another drawback item sets a precedent in that its benefits will apply only as regards importations under the British preferential tariff.

The Budget-Mr. Rhodes
Empire Content
One change in respect of empire content of imported goods is contemplated. From 50 to 25 per cent in the case of antimony-oxide. Action will be taken by order in council.
The Tariff Board
Apart altogether from its work as a forum of appeal from administrative decisions regarding customs and excise, the tariff board has dealt during the year with many important matters referred to it by the Minister of Finance. There will be tabled to-day some twelve or more of its reports, which are reflected in certain of the budget resolutions to which brief reference has been made. Outstanding among these is the report on reference No. 1-the first sent to the present board-re wool goods of various kinds. Other reports to be tabled to-day include those on sterling silver toiletware, fence wire, zipper fasteners, cocoa mats and matting, paper caps, wooden doors, rabbit skins, skelp iron, adhesive flakes, diabetic breadstuffs and dex-trines. Information from the board is to the effect that several other reports will Shortly be presented to the minister and these will, in their turn, be presented to parliament.

[Stage Direction]
After giving effect to the changes which have been enumerated, it is estimated that the revenues for the year will aggregate $392,100,000 from the following sources:
Taxation revenue-
Customs duties	$ 88,000,000
Excise duties	 48,500,000
Income tax	 76,000,000
Sales tax	 82,500,000
Manufacturers', stamp, importation and other special taxes..	41,200,000
[Stage Direction]
Non-tax revenue-
Post Office	 32,000,000
Interest on investments	 11,500,000
Other sources	 12,400,000
[Stage Direction]
Total	$392,100,000
The ordinary expenditures for the year will, it is estimated, amount to $370,600,000. With receipts of $392,100,000, the resulting surplus will be $21,500,000. This will be a substantial amount to be applied upon capital expenditures, for which the estimates are about $6,000,000, and special expenditures including unemployment relief and railway deficit.
This is the last budget to be presented before a general election, and while fully aware of the popular reaction to reduction in taxation, the government recognizes its paramount duty is to the state and its wellbeing. Reduction in taxation can only be justified when it is associated with a fully balanced budget accompanied by a reduction -however gradual-in the national debt.
Whilst it is gratifying in these difficult days to be able to forecast a surplus on current account for the ensuing year of the considerable sum of $21,500,000, it must not be overlooked that not only will this amount be absorbed in special requirements for deficits on the Canadian National Railway, unemployment relief and capital expenditures, but that these inescapable obligations will entail still further borrowings with consequent additions to the national debt.
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.
Without attempting to minimize in the least our difficulties, we must keep in mind that we have borne the shock of a world war, we have paid-and will continue to pay-the attendant price in blood, in suffering, and in treasure, and we have had added thereto five years of the miseries of a world depression as great in magnitude and as disrupting in its effects as the war itself. And yet we have won our way through. There is on every hand unmistakable evidence that we are making steady progress toward that complete recovery which I am fully confident will be our portion.

[Stage Direction]
Mr. Speaker, I beg to give notice that when we are in committee of ways and means I will move the following resolutions:
Income War Tax Act
Resolved That it is expedient to amend the Income War Tax Act and to provide
[Stage Direction]
1.	That (a) "earned income" be defined to include salaries, wages, and other personal earnings, including income derived from the carrying on of a trade (as a sole proprietor or in partnership), vocation or calling; provided however that the total amount of the "earned income" derived from any source, or combination of sources, shall in no case exceed $14,000 per annum;
(b)	"investment income" shall mean any income not defined as "earned income."
2.	That rates of surtax be imposed on all persons, other than joint stock companies, in respect of investment income as follows:
The Budget-Mr. Rhodes
[Stage Direction]
Included in any income exceeding $ 5,000 but not exceeding $ 10,000	 2%
Included in any income exceeding 10,000 but not exceeding 14,000	 3%
On income	exceeding	14,000	but	not	exceeding	20,000	
3%-On income	exceeding	20,000	but	not	exceeding	30,000	
4%On income	exceeding	30,000	but	not	exceeding	50,000	
5%On income	exceeding	50,000	but	not	exceeding	75,000	
6%On income	exceeding	75,000	but	not	exceeding	100,000	
7%On income	exceeding	100,000	but	not	exceeding	150,000	
8%On income	exceeding	150,000	but	not	exceeding	200,000	
9%On income exceeding	200,000	
10%3.	That the following income shall not be liable to surtax, either-(a)	all income up to five thousand dollars; or(b)	"earned income" up to but not exceeding fourteen thousand dollars; or(c)	income equal in amount to the sum of the exemption and allowances for dependents to which a person is actually entitled under the said act;
whichever is the highest.
4.	That (a) in determining "earned income" the amount of any salary or bonus shall be subject to adjustment commensurate with the services rendered and any amounts in excess of such adjustment shall be regarded as "investment income";
(b) where an expense is common to both "earned" and "investment" income the expense shall be apportioned.
5.	That the corporation rate of tax be increased from 12i per cent to 13J per cent.
6.	That consolidated returns be not permitted except in cases where a subsidiary company is wholly owned by another company (directors'
qualifying shares excepted); is in the same general class of business; the fiscal periods of the companies are co-incident; and both companies are operating in Canada, and under such other regulations as may be prescribed. When consolidation is permitted the corporation rate of tax on such returns shall be increased from 13i per cent to 15 per cent.
7.	That dividends received by shareholders be taxed by an allowance for depletion of 20 per cent in lieu of the present allowance.
8.	That depletion allowance to be allowed to mining companies, the principal product of which is gold and silver, shall be 33J per cent in lieu of the present allowance.
9.	That a tax of five per centum be imposed at the source on all royalties payable by Canadian debtors in respect of books, music and articles in magazines, to non-residents of Canada. The 12J per cent deduction to be abolished in respect of the foregoing.
10.	That a tax be imposed upon gifts inter vivos at the following rates, unless the income from such gift continues to be taxed against the donor, as provided for in the act;
Up to and including $
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
Exceeding
25.000		
25.000	but not exceeding $
50.000	but not exceeding
100.000	but not exceeding
200.000	but not exceeding
300.000	but not exceeding
400.000	but not exceeding
500.000	but not exceeding
1,000,000	
50,000
100,000
200,000
300.000 400,000.
500.000
1,000,000.
2%
3%
4%
5%
6%
7%
8%
9%
10%
Pro.vided that the rate be not applicable to gifts in the aggregate of $1,000 or less in any one year.
11.	That amounts charged by any company or organization outside of Canada to Canadian companies in respect of management fees, services, use of patents, processes or formulae used in Canada, shall not be allowed as a deduction if the non-resident controls the Canadian company through the holding of shares, by affiliation with other companies, by agreement, or in any other manner.
12.	That in respect of any taxpayer claiming reciprocal relief for taxes paid in Great Britain or any foreign country, such taxpayer shall not be allowed as against profits taxable in Canada the losses sustained in any such country.
13.	That the amount received from income bonds or debentures shall be deemed to be a dividend for the purposes of the act and shall not be a deduction before determining the taxable income of the. corporation paying any amount in respect of such income bonds or debentures.

14.	That any enactment founded on the foregoing resolutions shall be deemed to have come into force at the commencement of the 1934 taxation period and to be applicable thereto and to fiscal periods ending therein and to all subsequent periods, with the following exception:
(a)	As to any mining company, the principal product of which is gold, which has contributed to the tax on the premium value of gold as enacted by Part XV of the Special War Revenue Act, any enactment founded on resolution No. 8 shall be deemed to have come into force at the commencement of the 1935 taxation period and to be applicable thereto and to fiscal periods ending therein and to all subsequent periods.
(b)	That any enactment founded on resolution No. 10 shall be deemed to have come into force at the commencement of the 1935 taxation period and shall be applicable thereto and to subsequent periods.

The Budget-Mr. Rhodes

[Stage Direction]
Resolved, That it is expedient to amend the Special War Revenue Act and to provide:
1.	That Schedule I to the said act, as amended by section twenty-six of chapter fifty of the Statutes of 1932-33 be amended by adding thereto the following words:
" Devices commonly or commercially known as lighters, which produce sparks, flame or heat, n.o.p., 20 per cent.
Such devices when combined with pencils, cigarette or other cases, on the combined value, 10 per cent."
2.	That	Schedule	III	to	the	said	Act,	as
enacted by section eighteen of chapter forty-two of the Statutes of 1934, be amended by adding to or inserting therein the following words:
"grain or seed cleaning machines; pit props and packwood for use exclusively in mines; casein."
3.	That	Schedule	IV	to	the	said	Act,	asenacted by section twenty-nine of chapter fifty of the Statutes of	1932-33, be	amended	by
adding thereto the following words:
" Articles manufactured or produced by the labour of the deaf and dumb in institutions in Canada established for their care, or under the control or direction of such institutions."
4.	That	Schedule	V	of	the	said	Act,	as
enacted by section nineteen of chapter forty-two of the Statutes of 1934, be amended by adding thereto the words "goods enumerated in Customs Tariff Item 692."
5.	That the said Act be further amended by repealing subsection two of section eighty-seven thereof, as enacted by section twelve of chapter fifty-four of the Statutes of 1931.
6.	That the said Act be further amended by repealing subsection two of section eighty-eight thereof, as enacted by section twelve of chapter fifty-four of the Statutes of 1932, and subsection three of the said section eighty-eight, as enacted by section ten of chapter forty-two of the Statutes of 1934 and substituting for the two said subsections the following subsection:
"2. The tax imposed by this section shall not apply to the articles enumerated in Schedule V to this Act nor to any goods imported into Canada which are entitled to entry under the British Preferential Tariff or under trade agreements between Canada and other British countries."
7.	That any enactment founded on paragraphs one to six of this Resolution shall come into force on the twenty-third day of March, one thousand nine hundred and thirty-five.

[Stage Direction]
Resolved. That it is expedient to amend the Excise Act 1934, and to provide:
That section one of the Schedule to the said Act be amended by striking out the words " seven dollars " in the second line thereof and substituting therefor the words " four dollars", and to provide, further, that in the event of any duty imposed under this Act upon spirits, malt or beer having been reduced, if it is made to appear to the Governor in Council that in any province the prices of spirituous or malt liquors to the consumer have not been reduced
to, or are not being maintained at, levels which will give the consumer the full benefit of any such reduction, the Governor in Council may order that such reduction shall be no longer in effect and. upon publication of such order in the Canada Gazette, the full rates of duty theretofore payable on such goods shall again be in force and effect.
That any enactment founded on this Resolution shall some into force on the twenty-third day of March, one thousand nine hundred and thirty-five.	,

[Stage Direction]
1.	Resolved, That the customs tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter thirty-nine of the Acts of 1929, chapter thirteen of the Acts of 1930 (first session), chapter three of the Acts of 1930 (second session), chapter thirty of the Acts of 1931, chapters six and thirty-seven of the Acts of 1932-33, and chapters thirty-two and forty-nine of the Acts of 1934, be further amended by adding to section 4 thereof the following subsections:
(i)	from time to time, grant the most favoured foreign nation treatment to any British country or to any territory administered under a mandate of the League of Nations by any British country; and from and after the date specified in the order in council the most favoured foreign nation treatment shall apply to goods the produce or manufacture of such British country or mandated territory, subject to the provisions of this Act;
(j)	from time to time, withdraw the most favoured foreign nation treatment from any British country or any territory administered under a mandate of the League of Nations by any British country to which it has been extended; and from and after the date specified in the order in council the moBt favoured foreign nation treatment shall cease to apply to goods the produce or manufacture of such British country or mandated territory, subject to the provisions of this Act.
2.	Resolved, That the aforesaid section 4 be further amended by adding thereto the following subsection:
(4)A.-For the purposes of this Act, the Netherlands Indies, Surinam and Curacao shall be regarded as comprising one country with the Netherlands.
3.	Resolved, That the aforesaid customs tariff be further amended by deleting from section 11 thereof the words "reductions on Canadian products" and by substituting in lieu thereof the word " concessions."
4.	Resolved, That the aforesaid customs tariff be further amended by adding thereto the following section, as section IS thereof:
(18) In the event of any duty imposed under this Act upon spirituous or alcoholic liquors having been reduced, if it is made to appear to the governor in council that in any province the prices of such goods to the consumer have not been reduced to, or are not being maintained at, levels which will give the consumer the full benefit of any such reduction, the governor in council may order that such reduction shall be no longer in effect and, upon publication of such order in the Canada Gazette, the full rates of duty theretofore payable on such goods shall again be in force and effect.
The Budget-Mr. Rhodes
[Stage Direction]
5.	Resolved, That Schedule A to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter seventeen of the Acts of 1928, chapter thirty-nine of the Acts of 1929, chapter thirteen of the Acts of 1930 (first session), chapter three of the Acts of 1930 (second session), chapter thirty of the Acts of 1931, chapter forty-one of the Acts of 1932, chapters six and thirty-seven of the Acts of 1932-33, and chapters thirty-two and forty-nine of the Acts of 1934, be further amended by striking thereout tariff
items 28, 28a, 39, 99c, 101b, 156, 156a, 159, 164 (a and b), 169, 180c, 187a, 208a (i), 242, 255, 281a, 326, 384, 386 (k), 388, 388b, 401 (d), 407, 407a, 413a, 424, 434, 435, 438f, 4401, 451, 464b, 475b, 522d, 542b, 546, 547, 554b, 554e, 571a, 572, 598, 60S, 609, 621, 624a, 650a, 682, 691, 696, and 783, the several enumerations of goods respectively and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said Schedule A:
ittr. Rhodes.]
Tariff
Item
28 Coffee, green, imported direct from the country of growth and production, or purchased in bond in
the United Kingdom	per pound
Provided, that coffee, green, shall be entitled to entry under the British Preferential Tariff upon evidence satisfactory to the Minister that such coffee has been produced wholly in the British dominions, colonies or possessions, and not otherwise.
28a Tea, imported direct from the country of growth and production or purchased in bond in the United
Kingdom	per pound
When in packages weighing five pounds, each, or less, the weight of such packages to be included in the weight for duty.
Provided, that tea shall be entitled to entry under the British Preferential Tariff upon evidence satisfactory to the Minister that such tea has been produced wholly in the British dominions, colonies or possessions, and not otherwise.
Starch, including corn starch, potato starch, potato flour and all preparations having the quality of starch, the weight of the package to be included in
the weight for duty	per pound
Provided that the Governor-in-Council may by Order-in-Council direct that there be substituted for Tariff Items 39 and 255 in Schedule A of the Customs Tariff, and the several rates of duties of Customs set opposite said Items in Schedule A, the following:
Starch, n.o.p.; British gum, and dextrine, dry; dextrine substitutes and soluble or chemically
treated starch	per pound
When in packages weighing two pounds each, or less, the weight of the package to be included in the weight for duty.
From and after the publication of such Order-in-Council in the Canada Gazette, Tariff Items 39 and 255 as they respectively appear in the said Schedule at the time of the passing of this Act shall be repealed and the provisions of the said Tariff Item as it appears in the last preceding subsection of this section shall be substituted
therefor.
British Preferential Tariff	Inter- mediate Tariff	General Tariff	i Present Rates	B.P. Tariff	Intermediate Tariff	General TariffFree	3 cts.	3 cts.	Free	3 cts.	3 cts.4 cts.	8 cts.	8 cts.	4 cts.	8 cts.	8 cts.1 ct.	2 cts.	2 cts.	1 ct.	2 cts.	2 cts.[DOT] * ZY C	j cts.	1J cts.	2 cts.	
s
The Budget-Mr. Rhodes

Tariff
Item
British
Preferential
Tariff
Intermediate
Tariff
General
Tariff
[Stage Direction]
Tariff
Present Rates
Intermediate
Tariff
General
Tariff
The Governor-in-Council shall not direct that such provisions shall be substituted as aforesaid unless and until the Governor-in-Coun-cil is satisfied that dextrine is manufactured in substantial quantities in Canada from potato starch made in Canada.
65a
Diabetic breads and biscuits, under regulations of the Department of Health	
Free
99c
Raisins and dried currants-
(i)	Until March 31, 1936	per pound(ii)	Thereafter	per pound
when in packages weighing two pounds each, or less, the weight of such packages to be included in the weight for duty.
Free
Free
7$ p.c.
10 p.c.
4 cts.	4 cts.
3 cts.	3 cts.
15 p.c.
22$ p.c.
25 p.c.
Free
Free.
4 cts. 3 cts.
4 cts. 3 cts.
101b
Oranges, the produce of Palestine (when imported direct from the country of growth and production or from a country entitled to the benefits of the British Preferential Tariff) during the months of January, February, March and April	
Free
Free
Ethyl alcohol, or the substance commonly known as alcohol, hydrated oxide of ethyl or spirits of wine, n.o.p.; gin of all kinds, n.o.p.; whisky and all spirituous or alcoholic liquors, n.o.p.; amyl alcohol or fusel oil, or any substance known as potato spirits or potato oil; methyl alcohol, wood alcohol, wood naphtha, pyroxylic spirit or any substance known as wood spirit or methylated spirits, absinthe, arrack or palm spirit, brandy, including artificial brandy and imitations of brandy, n.o.p.; cordials and liqueurs of all kinds, n.o.p.; mescal, pulque, rum shrub, schiedam and other schnapps; tafia, angostura and similar alcoholic bitters or beverages; and wines, n.o.p., containing more than forty per cent of proof spirit, per gallon of the strength of
proof	
Provided, as to all goods specified in item No. 156 when of less strength than the strength of proof, that no reduction or allowance shall be made in the measurement thereof for duty purposes, below the strength of 15 per cent under proof.
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The Budget-Mr. Rhodes
Rum, per gallon of the strength of proof	
Provided, (1) as to all goods specified in items No. 156 and No. 156a when of less strength than the strength of proof, that no reduction or allowance shall be made in the measurement thereof for duty purposes, below the strength of fifteen per cent, under proof.
Provided, (2) that when the goods specified in these two items are of greater strength than the strength of proof, the measurement thereof and the amount of duty payable thereon shall be increased in proportion for any greater strength than the strength of proof.
Provided, (3) that bottles and flasks and packages of gin, rum, whisky and brandy of all kinds, and imitations thereof, shall he held to contain the following quantities (subject to the provisions for addition or deduction in respect of the degree of strength), viz.:-
Bottles, flasks and packages, containing not more than three-fourths of a gallon per dozen, as three-fourths of a gallon per dozen;
Bottles, flasks and packages, containing more than three-fourths of a gallon but not more than one gallon per dozen, as one gallon per dozen;
Bottles, flasks and packages, containing more than one gallon but not more than one and one-half gallon per dozen, as one and one-half gallon per dozen;
Bottles, flasks and packages, containing more than one and one-half gallon but not more than two gallons per dozen, as two gallons per dozen;
Bottles, flasks and packages, containing more than two gallons but not more than two and four-fifths gallons per dozen, as two and four-fifths gallons per dozen;
Bottles, flasks and packages, containing more than two and four-fifths gallons but not more than three gallons per dozen, as three gallons per dozen;
Bottles, flasks and packages, containing more than three gallons but not more than three and one-fifth gallons per dozen, as three and one-fifth gallons per dozen.
Provided, (4) that bottles or phials of liquors for special purposes, such as samples not for sale to the trade, may be entered for duty according to actual measurement, under regulations prescribed by the Minister.
) *10.00
*8.00
*10.00
*10 00
The Budget-Mr. Rhodes
[Mr. Rhodes.l
Tariff
Item
British
Preferential
Tariff
159 Spirits and strong waters of any kind, mixed with any ingredient or ingredients, as being or known or designated as essences, extracts, or ethereal and
spirituous fruit essences, n.o.p	per gallon
and
164	(a) Wines of the fresh grape of all kinds, except
sparkling wines, imported in barrels or in bottles, containing less than 35 per cent proof spirit, when the produce of Australia, New Zealand or the
Union of South Africa	per gallon
(b) Wines of all kinds, except sparkling wines, imported in barrels or in bottles, containing 35 per cent or over but not more than 40 per cent proof spirit, when the produce of Australia, New
Zealand or the Union of South Africa	
per gallon
Provided that six quart bottles or twelve pint bottles be held to contain a gallon for duty purposes under this item.
Books, viz.:-Novels or works of fiction, or literature of a similar character, unbound or paper bound or in sheets, but not to include Christmas annuals, or publications commonly known as juvenile and toy books	
$5.00 30 p.c.
25 cents
55 cents
Free
178c
180c
187a
Advertising and printed matter, viz.:-Advertising pamphlets, advertising show cards, illustrated advertising periodicals; price books, catalogues and price lists; advertising almanacs and calendars; patent medicine or other advertising circulars, fly sheets or pamphlets. All articles in this item, when produced in countries entitled to the British Preferential Tariff and relating exclusively to products of such British countries, but not relating to
Canadian products	
Decalcomania transfers, when imported exclusively for use in the manufacture of vitreous enamelled products or of tableware of china, porcelain or
semi-porcelain	
Hypersensitive or supersensitive panchromatic films and infra-red films, unexposed, for aerial photography	
Free
Free
Free
197c Cigarette paper, ungummed, in rolls. 198b Cigarette paper, gummed, in rolls...
10 p.c. 10 p.c.
Intermediate
Tariff
110.00 30 p.c.
22$ p.c.
10 p.c.
10 p.c.
22J p.c. 32$ p.c.
General
Tariff
Present Rates
[Stage Direction]
Tariff
Intermediate
Tariff
General
Tariff
$10.00 30 p.c.
25 p.c.
12$ p.c.
15 p.c.
25 p.c.
35 p.c.
$8.00 30 p.c.
25 cts.
55 cts.
15 p.c.
per lb.
5 cts.
Free 15 p.c.
Free 15 p.c. 15 p.c. 22$ p.c.
[Stage Direction]
30 p.c.
22$ p.c.
10 p.c. 22$ p.c.
10 p.c. 25 p.c. 22$ p.c. 32$ p.c.
[Stage Direction]
30 p.c.
25 p.c.
12$ p.c. 22$ p.c.
15 p.c. 30 p.c. 25 p.c. 35 p.c.
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The Budget-Mr. Rhodes
199d
199e
208a
232e
247a
281a
362b
384
Cigarette papers, gummed or not, in tubes, booklets
or packets	
Caps or hoods of paper, for use exclusively in protecting young plants in field or garden	
Chloride of lime and hypochlorite of lime:-
1. When in packages of not less than twenty-five
pounds weight each	per one hundred pounds
Cereal or starch products which require only to be ground in order to form, when mixed with cold
water, an adhesive paste	per pound
Dry red lead; orange mineral; antimony oxide, titanium oxide, and zinc oxide such as zinc white and lithopone; white pigments containing not less than
14 per cent by weight of titanium	
Artists' and school children's colours, n.o.p., in tubes, cakes, pans and pastels, for painting in oils, water colours or pastels, under regulations prescribed by
the Minister	
British gum, and dextrine, dry	
Fire brick, n.o.p., for use exclusively in the construction or repair of a furnace, kiln, or other equipment
of a manufacturing establishment	
Glass demijohns or carboys, bottles, n.o.p., decanters, flasks, phials, glass jars and glass balls, lamp chimneys, glass shades or globes; cut, pressed, moulded or crystal glass tableware, decorated or not; blown glass tableware and
other cut glass ware	
Toilet articles of all kinds, including atomizers, brushes, buffers, button hooks, combs, cuticle knives, hair receivers, hand-mirrors, jewel boxes, manicure scissors, nail files, perfume bottles, puff jars, shoe horns, trays and tweezers, of which the manufactured component material of chief value is sterling silver	
(d)	With chequer, diamond or other raised
pattern on contact surface	
Skelp, of iron or steel, hot rolled, when imported by manufacturers of pipes and tubes for use exclusively in the manufacture of pipes and tubes, in their own factories, under regulations prescribed by the Minister:
(a)	Not more than 14 inches in width	
(b)	More than 14 inches in width	
17J P-c. Free
Free
3/5 ct.
Free
Free 5 p.c.
Free 15 p.c.
171 P-c.
Free
Free
Free
321 p.c. Free
15 cts.
11 eta.
15 p.c.
271 p.c. 7§ p.c.
121 p.c. 30 p.c.
371 p.c.
[Stage Direction]
5 p.c. 5 p.c.
35 p.c. Free
15 eta.
2 eta.
15 p.c.
30 p.c. 10 p.c.
15 p.c.
32} p.c.
45 p.c.
[Stage Direction]
5 p.c. 5 p.c.
22} p.c. 22} p.c.
10 eta.
15 p.c.
Free 15 p.c.
20 p.c. 5 p.c.
10 p.c.
20 p.c.
30 p.c. 17} p.c. 22} p.c. 20 p.c. 20 p.c. 10 p.c. Free Free
[Stage Direction]
Free
Free
32} p.c. 32} p.c.
15 Ct8.
25 p.c.
15 p.c. 20 p.c.
27} p.c. 7j p.c.
121 P-C-
30 p.c.
371 P-c. 30 p.c. 30 p.c. 271 P-c-40 p.c. 35 p.c. 30 p.c. 30 p.c.
[Stage Direction]
5 p.c. 5 p.c.
35 p.c. 35 p.c.
15 eta.
25 p.c.
15 p .o. 221 P-c.
30 p.c. 10 p.c.
15 p.c.
321 p.c.
45 p.c. 40 p.c. 35 p.c. 30 p.c. 40 p.c. 35 p.c. 30 p.c. 30 p.c.
[Stage Direction]
5 p.c.
5 p.c.
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The Budget-Mr. Rhodes
fMr. Rhodes.]
Tariff
Item
386
The Governor in Council may by Order in Council direct that there be substituted for tariff item 384 in Schedule A of the Customs Tariff, and the several rates of duties of Customs set opposite said item in Schedule A, the following Skelp, of iron or steel, hot rolled, when imported by manufacturers of pipes and tubes for use exclusively in the manufacture of pipes and tubes, in their own factories, under regulations prescribed by the Minister:
(a)	Not more than 14 inches in width___
(b)	More than 14 inches in width	
From and after the publication of such Order
in Council in the Canada Gazette, tariff item 384 as it appears in said Schedule at the time of the passing of this Act shall be repealed and the provisions of the said tariff item as it appears in the last preceding subsection of this section shall be substituted therefor.
The Governor in Council shall not direct that such provisions be substituted as aforesaid unless and until the Governor in Council is satisfied that skelp of iron or steel, hot rolled, is manufactured in substantial quantities in Canada from iron or steel made in Canada.
(k)	Sheets, hot or cold rolled, when imported by manufacturers of hollow-ware coated with vitreous enamel or of apparatus designed for cooking or for heating buildings, for use exclusively in the manufacture of hollow-ware coated with vitreous enamel or of vitreous-enamelled sheets for apparatus designed for cooking or for
heating buildings	
(r) Strip, cold rolled, when imported by manufacturers of pipes and tubes, for use exclusively in the manufacture of pipes and tubes, in their own factories, under regulations prescribed by the
Minister	
Iron or steel angles, beams, channels, columns, girders, joists, tees, zees and other shapes or sections, not punched, drilled or further manufactured than hot rolled, weighing not less than 35 pounds per lineal yard, n.o.p.; piling of iron or steel, not punched or drilled, weighing not less than 35 pounds per lineal yard, including interlocking sections, if any, used therewith, n.o.p	per ton
British Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	B.P. Tariff	Intermediate Tariff	General Tariff5 p.c.	10 p.c.	121 p.c.	5 p.c.	10 p.c.	121 P-O.5 p.c.	10 p.c.	121 P-o.	5 p.c.	10 p.c.	121 p.c.Free	10 p.c.	121 P-c.	Free	10 p.c.	121 P-c-71 p.c.	20 p.c.	20 p.c.Free	5 p.c.	5 p.c.	Free	5 p.c.	5 p.c.Free	$3.00	$3.00	Free	$3.00	$3.0025 p.c.	35 p.c.	40 p.c.
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The Budget-Mr. Rhodes

388b
Iron or steel angles, beams, channels, columns, girders, joists, tees, zees and other shapes or sections, not punched, drilled or further manufactured than hot rolled, n.o.p.; piling of iron or steel, not punched or drilled, including interlocking sections, if any, used therewith, n.o.p	per ton
[Stage Direction]
407a
410o
413a
424a
427d
428e
428f
Piston ring castings of steel, in the rough as from the
moulds	_____
(d) Coated with zinc or spelter, curved or not, in coils, -144, -104, or -092 inch in diameter, with tolerance not to exceed -004 inch, and not for use
in telegraph or telephone lines, n.o.p	
Wire of iron or steel, coated with zinc or spelter, curved or not, in coils, not more than -144 inch and not less than '080 inch in diameter, with tolerance not to exceed -004 inch, when imported by manufacturers of barbed fencing wire or of wire fencing for use exclusively in the manufacture of barbed fencing wire or of wire fencing, in their own factories	
Silent chain and finished roller chain, of iron or steel, and complete parts thereof, of a class or kind not made in Canada, n.o.p., either chain of the type which operates over gears or sprockets with machine-cut teeth	
Chains, of iron or steel, n.o.p., and complete parts
_thereof	
(ii) Chock release apparatus, for use in coal mines to facilitate the safe removal of chocks forming the
roof support	
Machinery, of a class or kind not manufactured in Canada, and complete parts thereof, for use in the manufacture of nets or netting for the fisheries, when imported by manufacturers for use exclusively in the making of such nets or netting, in their own factories, but not for use in making nets or netting
commonly used for sportsmen's purposes	
Fire engines and other fire extinguishing machines
and complete parts thereof	
Hand fire extinguishers, and sprinkler heads for automatic sprinkler systems for fire protection.... Machines designed for making rigid composite box-ends of wood-consisting of a centre with separate nailing edges attached-from scrap or waste mill stock, and complete parts thereof, not to include
motive power	
Diesel and semi-diesel engines, and complete parts
thereof, n.o.p	
Air-cooled internal combustion engines of not greater
than 1J h.p. rating, and complete parts thereof.
Locomotives and motor cars for use on railways, and tops, wheels and bodies for the same, n.o.p.; chassis for locomotives, n.o.p	
Free
Free
Free
Free 20 p.c.
Free
Free 10 p.c. 22$ p.c.
Free
Free
Free
15 p.c.
$7.00 25 p.c.
10 p.c.
10 p.c.
20 p.c. 30 p.c.
10 p.c.
5 p.c. 30 p.c. 30 p.c.
27J p.c. 25 p.c. 25 p.c.
30 p.c.
$7.00	$4.00	$7.00	$7.0025 p.c.	35 p.c.	40 p.c.27} p.o	15 p.c.	25 p.c.	27} p.c.10 p.c.	Free	10 p.c.	10 p.c.10 p.c.	10 p.c.	20 p.c.	20 p.c.25 p.c.	Free	20 p.o.	25 p.c.35 p.c.	15 p.c.	27} p.c.	35 p.c.20 p.c.	30 p.c.	35 p.c.15 p.c.	27} p.c.	35 p.c.10 p.c.	15 p.c.	27\ p.c.	35 p.c.10 p.c.	Free	5 p.c.	10 p.c.35 p.c.	22} p.c.	30 p.c.	35 p.c.35 p.c.	22} p.c.	30 p.c.	35 p.c.35 p.c.	15 p.c.	27$ p.c.	35 p.c.30 p.c.	15 p.c.	25 p.c.	30 p.c.30 p.c.	15 p.o.	25 p.c.	30 p.c.35 p.c.	15 p.c.	30 p.c.	35 p.c.
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Tariff Item	British Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	B.P. Tariff	Intermediate Tariff	General Tariff434a	Chassis for motor cars for use on railways, and	; : *	[complete parts thereof, n.o.p	Free	30 p.c.	35 p.c.	15 p.c.	30 p.c.	35 p.c.434b 435	Pressed steel wheels for use on railway rolling stock.. Locomotives and motor cars for railways, of a class or kind not made in Canada, for use exclusively in	71 p.c.	30 p.c.	35 p.c.	15 p.c. 15 p.c.	30 p.c. 27* p.c.	35 p.c. 30 p.c.438f	mining or metallurgical operations	
Motor omnibuses for conveying passengers only, having seating capacity for not less than ten persons, and chassis for same; chassis for electric (track-	Free	15 p.c.	20 p.c.	10 p.c.	15 p.c.	20 p.c.4401	less) trolley-buses, and complete parts thereof	
Aircraft and complete parts thereof, not including engines, under regulations prescribed by the Min-	Free	30 p.c.	40 p.c.	Free 15 p.c.	30 p.c. 271 P-c.	40 p.c. 30 p.c.451	j ister	
Buckles, clasps, eyelets, hooks and eyes, dome, snap or other fasteners of iron, steel, brass or other	Free	25 p.c.	271 P-c.	10 p.c.	25 p.c.	271 P-c.metal, coated or not, n.o.p. (not being jewellery)....	20 p.c.	271 p.c.	30 p.c.	20 p.c.	271 P-c.	30 p.c.451 e 475b	Slide or hookless fasteners	
Matrices for stereotypes, electrotypes and celluloids	30 p.c.	371 P-c-	40 p.c.	20 p.c.	271 P-c.	30 p.c.506b	described in item 475a	per square inch Wooden doors of a height and width not less than 6	Free	1 ct.	1 ct.	} ct.	1 ct.	1 ct.522d	feet and 2 feet, respectively	
Yarns and warps wholly of cotton, mercerized, number forty and finer, imported, under regulations prescribed by the Minister, for sale to manufacturers, to be further manufactured in their own fac-	Free	221 P-c.	25 p.c.	171 P-c.	221 P-c.	25 p.c.530	i tories	
Lace and embroideries, wholly of cotton, coloured, imported by manufacturers for use exclusively in	Free	25 p.c.	25 p.c.	Free	25 p.c.	25 p.c.the manufacture of clothing in their own factories..	71 p.e.	171 P-c.	30 p.c. 4 cts.	20 p.c. 2 cts.	271 p.c. 31 cts.	30 p.c. 4 cts.542b 546	Linen fire-hose, lined or unlined.	
Articles made from fabrics, finished or unfinished, and all textile manufactures, wholly of jute, n.o.p.; fabrics wholly of jute, coated or impregnated, and	25 p.c.	321 P-c.	35 p.c.	30 p.c.	321 P-c.	35 p.c.jute fabric backed with paper	121 P-c.	25 p.c.	30 p.c.	121 P-c. 25 p.c. 3 cts.	25 p.c. 30	p.c. and per pound 31	cts.	30 p.c. 35 p.c. 4 cts.547 554b	Bags or sacks of hemp, linen or jute	
Woven fabrics composed wholly or in part of yarns of	15 p.c.	171 p.c.	20 p.c.	15 p.c.	171 P-c.	20 p.c.wool or hair, n.o.p	271 p.c.	35 p.c.	40 p.c.	271 p.c.	35 p.c.	40 p.c.and	per pound Provided, however, that the sum of the specific and ad valorem duties imposed by this item on	17 cts.	30 cts.	35 cts.	18i cts.	30 cts.	35 cts.
to
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The Budget-Mr. Rhodes
556a
556b
571a
imports under the British Preferential Tariff shall not be in excess of 65 cents per pound. Melton cloth, imported by manufacturers of tennis balls for use in the manufacture of tennis balls, in
their own factories	
and	per pound
Slipper cloth, woven, napped on one or both sides, wholly or in part of wool, not to contain silk or artificial silk, weighing not less than 22 ounces per square yard, when imported by manufacturers of indoor footwear, to be used exclusively in the manufacture of such articles in their own factories..
and	per pound
Carpeting, rugs, mats and matting of cocoa fibre__
Free
Free 30 p.c.
35 p.c. 30 cts.
35 p.c. 30 cts. 37$ p.c.
598
609
624a
650a
Oriental and imitation Oriental rugs or carpets; carpeting, carpets and rugs, n.o.p.:-
Calif valued at less than two dollars per
square yard	
and	per square foot
(b) If valued at two dollars or more per square
yard	
and	per square foot
Brass band instruments, n.o.p.; parts of pianofortes
and parts of organs	
Fur skins, wholly or partially dressed, n.o.p	
Provided, that the duty on hare or rabbit skins, under the Intermediate or General Tariff, shall be
not less than	per dozen skins
Belting, of leather	
Bases or salts of thorium or of cerium, not including natural minerals, for use in the manufacture of incandescent gas mantles, when imported by manufacturers of such mantles or of Btockings for such mantles	
(i)	Dolls; toys of all kinds, n.o.p	
(ii)	Mechanical toys of metal	
(iii)	Juvenile construction sets of metal, consisting of
various stampings, punched, and connections therefor: parts of the foregoing	
Button blanks of animal shell, in the rough	
Fish hooks, for deep-sea or lake fishing, not smaller in size than number 2-0; fishing nets and nettings of all kinds; threads, twines, marlines, fishing lines, rope and cordage of cotton, hemp, manila or other vegetable fibre, not exceeding one and one-half inches in circumference, to be used for fishing purposes or for the construction or repair of fishing nets; the foregoing not to include such articles used for
30 p.c. 3 cts.
30 p.c. 5 cts.
Free 10 p.c.
10 p.c.
Free
20 p.c. 10 p.c.
Free
Free
35 p.c. 15 cts.
35 p.c. 15 cts.
22$ p.c. 15 p.c.
72 cts. 30 p.c.
Free
30 p.c. 30 p.c.
30 p.c. Free
40 p.c.	27J P-c.	35 p.c.	40 p.c.35 cts.	18} cts.	30 cts.	35 cts.40 p.c.	27} p.c.	35 p.c.	40 p.c.35 cts.	18} cts.	30 cts.	35 cts.40 p.c.	15 p.c.	22} p.c.	25 p.c.but no	t less than, per s	q. ft.10 cts. i	10 cts.	10 cts.40 p.c.	30 p.c.	1 35 p.c.	40 p.c.20 cts.	5 cts.	15 cts.	20 cts.40 p.c.	30 p.c.	35 p.c.	40 p.c.20 cts.	5 cts.	15 cts.	20 cts.25 p.c.	15 p.c.	22} p.c.	25 p.c.15 p.c.	10 p.c.	15 p.c.	15 p.c.72 cts.	35 p.c.	20 p.c.	30 p.c.	35 p.c.Free	r ! Free	Free	Free15 p.c.	20 p.c.	22} p.c.40 p.c.	20 p.c.	30 p.c.	40 p.c.40 p.c.	20 p.c.	30 p.c.	40 p.c.40 p.c.	t 20 p.c.	30 p.c.	40 p.c.10 p.c.	Free	10 p.c.	10 p.c.
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The Budget-Mr. Rhodes
[Mr. Rhodes.l
British Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	Item	B.P. Tariff	Intermediate Tariff	General Tariffsportsmen's purposes, and to be subject to such regulations as the Minister may prescribe	Free	Free	Free	Free	Free	Free691	Communion sets of metal, glass, wood or other material; oil stocks; crosiers; benitier and sprinkler; incenser and incense boat; baptismal shells and fonts	Free	Free	Free	20 p.c. Free	22$ p.c. Free	25 p.c. Free696	Philosophical and scientific apparatus, utensils, instruments, and preparations, including boxes and bottles containing the same; maps, photographic reproductions, casts as models, animals as research or experimental subjects, etchings, lithographic prints or charts; mechanical equipment of a class or kind not made in Canada. All articles in this item, when for the use and by order of any society or institution incorporated or established solely for religious, philosophical, educational, scientific or literary purposes, or for the encouragement of the fine arts, or for the use and by order of any public hospital, college, academy, school, or seminary of learning in Canada, and not for sale, under regulations prescribed by the Minister	Free	Free	Free	30 p.c. 20 p.c. Free	37$ p.c. 30 p.c. Free	45 p.c. 32$ p.c. Free783	Internal combustion and steam engines, transmission assemblies, magnetos, starting motors, electric generators, propeller shafts, steel chassis frames, brakes, clutches, brake and clutch controls, steel road wheels, steel rims for pneumatic tires, larger than thirty inches by five inches, steering gears and front and rear axles, and complete parts of all the foregoing, all of a class or kind not made in Canada, when imported by manufacturers of motor trucks with standard equipment (not for use on railways or tramways), not to'include machines or other articles mounted thereon or attached thereto for purposes other than for loading or unloading the truck, for use only in the manufacture of such motor trucks	Free	17$ p.c.	20 p.c.	Free	17$ p.c.	20 p.c.15 p.c. 15 p.c.	25 p.c. 27£ p.c.	30 p.c. 35 p.c.
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?Ae Budget-Mr. Rhodes

The Budget-Mr. Rhodes
6.	Resolved, that Schedule B to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, be amended by striking thereout Tariff Items 1044 and 1049, the enumerations of goods and the rates of drawback of Customs Duties set opposite to each of the said items, and by inserting the following items, enumerations and rates of drawback of Customs Duties in said Schedule B:-
Item
No.
1039
1049
Goods	When Subject to Drawback
Rolled round wire rods in the coil, of iron or steel, not over -375 inch in diameter.	When used in the manufacture of wire of iron or steel, coated with zinc or spelter, curved or not, in coils, not more than [DOT]144 inch and not less than -080 inch in diameter, with tolerance not to exceed -004 inch, when such wire is used by manufacturers of barbed fencing wire or of wire fencing for use exclusively in the manufacture of barbed fencing wire or of wire fencing, in their own factories	
Cotton velveteen and cotton-back silk-pile velvet.	When imported under the British Preferential Tariff and used exclusively in the manufacture of fancy boxes or cases When used by manufacturers of iron or steel in the construction or repair of a blast furnace, open hearth furnace or rolling mill furnace	
	
Bituminous coal, imported on or after March 23rd, 1935.	(a) When converted into coke and the coke sold for use as fuel in other than
	(b) When converted into coke and the coke sold for use as fuel in other than a coke or gas plant; provided that not less than thirty-five per centum, by weight, of the bituminous coal so used, as covered by each drawback claim, was mined in Canada	
	Provided that drawback payable under this Item is in lieu of drawback payable under any other item.
Portion of Duty (not including Special Duty or Dumping Duty) Payable as Drawback
99 p.c.
99 p.e.
99 p.c. 50 p.c.
99 p.c.
7.	Resolved, That Schedule C to the Customs Tariff Item 1212 and by substituting therefor Tariff, as amended by chapter thirty-two of the the following:

Acts of 1934, be amended by striking thereout
1212 Aigrettes, egret plumes or so-called osprey plumes, and the feathers, quills, heads, wings, tails, skins, or parts of skins of wild birds either raw or manufactured; but this provision shall not apply to:-
(a)	the feathers or plumes of ostriches;
(b)	the plumage of the English pheasant and the Indian peacock; the plumage of wild birds of groups recognized as game birds in any Canadian game law, and for which an open season is provided thereunder;
(c)	the plumage of birds imported alive; nor to-
(d)	specimens imported under regulations of the Minister for any Natural History or other museum or for scientific or educational purposes.
8.	Resolved, That any enactment founded upon the foregoing resolutions to amend the Customs Tariff or Schedules thereto shall be deemed to have come into force on the twenty-third day of March, one thousand nine hundred and thirty-five, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
On motion of Mr. Ralston the debate was adjourned.

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The house in committee of supply, Mr. Morand in the chair.
To assist in promoting tourist business in Canada, $200,000.
Mr. MacDONALD (Cape Breton South):: Mr. Chairman, when the committee rose last evening I was speaking about the attraction offered by the fisheries of the maritime prov-



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inces, and I called attention to the different species of fish in those waters. Some people may have doubts as to the accuracy of my statements, because they have never contemplated fish six or eight feet in length which afford sport to the sportsman. For the information of the committee I shall read from a pamphlet entitled "Deep Sea Fighters."
Try to imagine an attempt to conquer, by means of a rod and line, the biggest and most determined bull that ever came out of the wild west. Add to this picture, flying spray and the swift manoeuvres of a motor launch on a heaving sea, and you have some vague idea ot the thrills of this grand game. It's the finest sport the sea offers, a royal pastime!
These silvery torpedoes of the deep have true fighters' hearts. They never quit while there is strength in their tremendous stream-lined bodies. The greatest battlers of the tuna tribe, however, are the ones found in Nova Scotia waters. Nowhere else in the world are the tuna as large or as game, and every record breaking specimen in twenty-eight years-with the exception of one lone fish-has been taken in the coastal waters of Nova Scotia.
These tuna are big league fish for the most experienced sportsmen in the world and that is why each year sees an increasing number of anglers coming to Nova Scotia in hope of a record capture. Zane Grey, the famous novelist, had a grand battle in Nova Scotian waters off Liverpool with the 758-pound giant he conquered, and he has declared frequently that this adventure was the finest sport in the world.
Many times it is the quarry which is declared winner. Commander J. K. L. Ross, of Montreal, hooked a giant tuna in St. Ann bay, Cape Breton Island, Nova Scotia. It was 11 o'clock, on Saturday morning, and the battle began with terriffic rushes and mighty leaps that tested nerve and tackle. All the afternoon the fight went on. The tuna would tow the boat for miles, then would sound again and'again, until it seemed that the line must yield. But, at the last second, up he would come in a magnificent surge of foam and silver, and Ross would have new hope. Darkness fell but the battle went on. Ross was determined, and' so was the big fish. When daylight came it was the man who was tiring, not the tuna, and the renewed skirmishes became so exhausting that at 6 a.m. Ross was compelled to cut the line and admit defeat.
Thomas Howell, veteran Chicago sportsman, hooked a tuna off Liverpool, Nova Scotia, at eleven o'clock Monday morning. August 6, 1934. The giant fish was a fighter of the finest calibre and towed the big fishing launch exactly sixty-two hours. The great battler weighed 792 pounds, and was over nine feet in length.
That, Mr. Chairman, gives you some idea of the character of the sport that is afforded in the waters of Nova Scotia. But in addition to the tuna there , is another large fish known as the swordfish, and the Nova Scotia swordfish are comparable only to Nova Scotia tuna as supreme gladiators of the sea:
They are considered by many the greatest battlers, of the deep and the very elite of their kind. These are the Broadbill, or true sword-

fish. They are rarer and much larger and fiercer than the marlin or Roundbill swordfish found in southern waters. They have the upper jaw prolonged into a two-edged swordlike weapon and know well how to use it.
I need not continue along that line because I think I have already given sufficient to excite the curiosity of the committee as to the attractions we have to offer to the true sportsman, the big league sportsman who is looking for thrills in this particular sport.


Sir EUGENE FISET:: And not very expensive.


Finlay MacDonald: This fish that Commander Ross caught was found in St. Ann's bay in the county of Victoria. That is the spot that I mentioned at the last meeting of the committee, where rest the bones of the famous giant McAskill. His grave is found there and also some specimens of the clothing and shoes that he wore. A biography of this giant has been written by a literary gentleman down there, named James Gillis, which I take pleasure in recommending to every lover of literature, and I might add that I envy them the pleasure they will have in reading that piece of contemporary literature.
On the harbour of St. Ann's are algo to be found many evidences of the French occupation before the taking of Louisburg. Another event of historic interest was the great exodus of Presbyterians that took place from St. Ann's about a hundred years ago. To the village of St. Ann's about a century ago came a Presbyterian minister named MacLeod from Pictou, and with him he brought his whole congregation. He was in many respects a wonderful man, and the stories that still are told show him to have been a man of the most determined and forceful character-a great preacher, a great teacher, a law giver, and an autocrat, as my hon. friend from Pictou (Mr. Cantley) suggests. But autocrats were necessary in those days just as they are now sometimes. This man left his imprint on the character of all the people in that district. If there is anything good in Presbyterianism, and I am not saying that there is not, I venture to say that this man exemplified it in his life and in his preaching.
When referring last night to the village of Louisburg I forgot one very interesting thing that is still a subject of conversation among our older people when gathered around the fireplace in the evening, and that is that on certain days as they recall the great battles of the past there may be heard in the stilly silence of the night the tramp of soldiers marching and the thud of hoofs.

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I ask you, Mr. Chairman, where in all Canada is to be found a spot so rich in historic incident as you will find right at St. Ann's in the county of Cape Breton? In the county of Cape Breton we have also the coal mines of the Dominion Coal Company, very large mines which contribute greatly to the revenue of the province of Nova Scotia, and in the city of Sydney are established the steel works. Tourists who are industrially minded have here an opportunity of seeing some of our advanced industrial methods.
During this coming summer the city of Sydney will celebrate its one hundred and fiftieth anniversary, and to it are being invited notables from all over the old country and from Canada, including the lineal descendants of Governor DeBarre, who laid out the city of Sydney a hundred years ago. We also hope to have with us on that occasion His Excellency the Governor General and men eminent in political and public life in Canada and the United States, as well as warships from almost every nation. I cordially invite the members of this house to be present with us down at Sydney from July 29 to August 4 of this summer.
In answer to my hon. friend from North Renfrew (Mr. Cotnam), who holds out as an inducement to visit his riding the successful efforts of the smugglers, I may say that in spite of the budget we have heard delivered this afternoon we hope that the activities of the smuggler will not be curtailed to such an extent off the coast of Nova Scotia as to deprive us of necessary stimulant.
Nova Scotia is doing its share to secure a tourist business. We have now three or four tourist bureaux operating throughout the province, all bending their efforts to induce tourists to come to the province. In addition to the program for this summer that I have already mentioned we are also preparing to receive the Olympic and three other ocean liners and several men of war this summer. We are also furthering plans for a meeting of the Maritime Aquatic Association which is holding a competition in Nova Scotia this year. We expect that more tourists will visit Nova Scotia this summer than ever before. I hope hon. members will not think that what I have said is overdrawn. I hope they will come to see for themselves, and when they do I am satisfied that they will give me universal approbation as being the most veracious member of the house.


Mr. WILLIS:: Mr. Chairman, I do not intend to refer to the beauties of Nova Scotia, which are very well known, but I do intend 92582-127*
to refer to beauties which are not so well known and which perhaps need some advertising. I have in mind the Turtle Mountain forest reserve which is located in my constituency and within which is the International Peace Garden of America. This peace garden is situated partly in the American state of North Dakota and partly in the province of Manitoba, and is the only peace garden on the continent. Its site was selected by international representatives who endeavoured to choose the most suitable place on the continent at which to locate an international peace garden. There is a highway running along one side of the garden. In the United States this highway is an all-weather road and it is hoped that this same condition will soon apply to the Canadian portion. Last year more than 8,500 persons entered this port.
I bring up this matter at this time in an effort to interest the government and others in the International Peace Garden. A portion of this vote should be used in an endeavour to attract the tourist trade to this garden. Its site was selected by a committee composed of members of the National Association of Gardeners of America, the largest horticultural association on the continent. Last year a group of 250 men was employed by the federal government of the United States to work in the American portion of the garden. This was possible because of assistance from the federal government which we in Canada have not been able to obtain. This is because of a lack of cooperation between the provincial and dominion governments. I should like to see a work camp established in this area. The Turtle Mountain forest reserve is close to the drought area of the province of Manitoba where the dominion government is spending a considerable amount in the way of relief. If it is not possible to establish a work camp within the garden, it should be established within the Turtle Mountain forest reserve. Reforestation or other work would prove helpful to the people and at the same time act as an attraction to the tourist trade. I think the provincial government should transfer at once the property which it has promised to transfer. I should like to request the minister to see that all maps issued by his department indicate plainly the present location of the International Peace Garden, which demonstrates better than anything else the fact that for one hundred years there has been peace between Canada and the United States. This fact has been brought to the attention of the house by many hon. members, and I trust an effort will be made to establish a work camp, either in the reserve or in the garden, to provide employment and increase
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the attraction to the tourists who come to this area all the way from Mexico city in the south and northern Manitoba in the north.


Mr. SHORT:: I am pleased indeed that
my colleague, the hon. member for Cape Breton South (Mr. MacDonald), has had something to say about the beauties of Nova Scotia. Nova Scotia is the greatest tourist province in the dominion, and I was afraid it was going to be left out of things. I was not present when this discussion first started or I would have had a word to say at that time. Nova Scotia has been catering to the tourist trade for a longer period than any other province-upwards of fifty years- and I think it is the best equipped of all provinces in the way of hotels to cater to summer visitors. We have as much as or perhaps more than any other province in the way of scenery and amusements, and I feel I should be remiss in my duty if I did not bring these things to the attention of the house.
The western part of the province is only a night's run from Boston and twenty-two hours from New York by the best class of palatial coastwise steamers. The hon. member for Cape Breton South has referred to the tuna and swordfish fishing, but in addition there are the salmon trout fisheries, the finest in the country. We have also the finest scenery in the dominion. Unfortunately we have not paved roads to offer the tourists, but we hope to have them in the near future. I am pleased that an appropriation is being made this year to provide for the advertising of the beauties of this country. Canada as a whole is a beautiful country but the greatest beauty is to be found in the maritimes, particularly in Nova Scotia.


Mr. VENIOT:: What about New Brunswick?


Harry Bernard Short: I said in the maritimes and
particularly in Nova Scotia. I think the hon. member for Gloucester (Mr. Yeniot) will admit that New Brunswick does not have the beauties which are to be found in Nova Scotia.


Peter John Veniot: I could not admit that.


Harry Bernard Short: I hope that Nova Scotia
will receive her full share of this money when it is being expended. We have room for more tourists than are coming at the present time and this year we are looking forward to the greatest influx since 1929. When the minister is allotting this money to the different provinces, I hope he will see that Nova Scotia gets her full share. I am sure he will, be-[Mr. Willis. 1
cause he realizes that we are entitled to it. We have every attraction to offer the tourist -deep sea fishing, tuna fishing, inland fishing and every sport that he is looking for. I can only join with my colleague from Cape Breton in extending to hon. members a cordial invitation to visit the most beautiful province in the dominion.
Mr. PER'LEY (Qu'Appelle):	I wish to
express my approval of this item in the minister's estimates. I have listened with considerable pleasure to those who have spoken on the item advocating the beauty spots in their respective provinces, and I trust that when this money is being spent for advertising, the beauty spots of Saskatchewan will have due consideration; and I plead particularly for Qu'Appelle. I think we have in that constituency some of the finest scenery to be found in Canada. I refer to the historic Qu'Appelle valley and river, which got its name, as history relates, from this incident. An Indian woman went to draw water from the lake; she heard an echo in the ravine and she replied, " qu'appelle?"-who calls? This valley runs parallel to the Canadian Pacific Railway and No. 1 highway from the Manitoba boundary about two hundred miles. It is a picturesque valley and in different sections it widens out a mile or two, forming lakes. These are peaceful lakes in the middle of the valley. At lake Kalipwa, at lake Echo and at lake Qu'Appelle we have beautiful scenery, and I would mention the historic town of Fort Qu'Appelle, where there was once established the old Hudson's Bay fort. At one time we thought that this particular site would be the capital of the territory. Along these lakes we have summer resorts and camps and it is a splendid place for tourists who wish to spend a few days of quiet. Sports of all sorts can be indulged in, golfing, tennis, fishing, bathing and everything that adds to the pleasure of the tourist. To get into this valley there are very good roads branching from No. 1 highway and leading through the great wheat plains of Saskatchewan. The wheat plains between the main highway and this valley are the plains which were first settled by the pioneers who went into that province, and in August you can go through miles of waving grain. It is a magnificent sight.
I know that there are many other hon. gentlemen who are anxious to speak on this item and I do not want to take up too much time, but I trust the minister will see that when advertising is being done we shall get our due share. I think this is a splendid thing. The Canadian people should be en-

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couraged in their efforts to induce our friends from the south and from other countries as well to come to Canada and enjoy our scenic beauties. I fully support this vote.


Mr. GARLAND (Bow River):: Unlike
hon. members who have preceded me, I am not going to boast about the native beauties of my own constituency; I think they are well enough known to need no further word from me. I do wish however to direct the attention of the minister to one way in which this vote might be usefully disposed of. There is to the north of this capital city a beautiful territory with certain peculiar characteristics that are unexcelled. There is very good skiing in winter, and in summer this territory cannot be surpassed for the sheer pleasure of travelling and, I should have hoped, for fishing. I regret to say however that while it is one of my great privileges to be able to travel through the Gatineau country a few times every session, I have noticed in recent years that there has been serious destruction of the forest along the roads. No one knows better than the minister that roads stripped of trees are quite unsightly; they are not attractive, because people do not care for a country that has been stripped of its forest timber. What steps the minister can take I do not know, but if he could see to it that the trees along the roads in the Gatineau are no longer cut down, he would to some extent preserve some of the beauties of that country, which would continue to attract tourists.
I have also complained in the second place -this time the complaint would more properly be registered in the provincial' house in Quebec, but I make the complaint publicly so that it will reach them-against the practice of leasing the fishing rights on the lakes and streams in the Gatineau and other districts to a few wealthy Americans and in some instances Canadians and people of other nationalities, such leases running from five to nine years or longer. It means that for a certain type of tourist there is no particular attraction to that country at all. All the fishing advantages of a territory like that could be preserved by fair and rigorously enforced legislation-game protection, fish protection and so on. But where it is turned over to a feiw individuals who can afford that sort of camp, and the beauty of the lakes and rivers is closed to the public, we cannot expect the tourist traffic into that country to continue, a country so badly afflicted with that type of law. I suggest to the minister that, with respect to territory of that sort, he take the matter up with the provincial
governments with a view to modifying their leasing system in regard to fishing. This does not apply to Quebec alone but to the mari-times as well; it applies to some of the most beautiful streams down there. I should like to see a little more freedom in regard to the fishing rights in this country, particularly for the ordinary man who cannot afford more than a holiday by car, spending his time at touring camps, and getting any fishing he can. Such people cannot pay the high licence fees required in territories where fishing rights have been let to individuals in the way I have stated, nor can they afford even the ordinary fishing licence required for day to day fishing. In regard to these two particulars, the clearing of timber along the road and the over-restrictive methods in connection with fishing, there lies one of the serious difficulties in the tourist business, and I hope the minister will look into the Gatineau district problem as soon as possible.


Mr. HANSON (Skeena):: I congratulate the minister on the increase in this vote. It so happens that in my country of origin it was realized half a century ago that tourists are a national asset. Since I came to this country I have located in British Columbia, the most beautiful province of the dominion. I have had occasion to visit quite a number of places, from the South Sea islands to the European continent, from the Mediterranean to the North cape, and in those different parts of the world there is nothing to excel what we have in Canada. So far as British Columbia is concerned, the inland passage is fully equal to anything that one can see in the northern fiords^ the mountain scenery which we have in British Columbia along the coast and also in the interior is fully equal to anything that one can see in the Alps, and as regards the coast of the maritime provinces with its fish and game, which is such a drawing card to the tourists, I may point out that we have all that in British Columbia, as can be seen by taking the trip from Puget sound via the inland passage to Alaska.
I repeat that I compliment the minister and the government on increasing this appropriation. The government evidently realizes that the' tourist traffic will be one of our national assets for all time to come.


Mr. HOWDEN:: We have heard members from all parts of Canada singing the praises and beauties of their respective constituencies. All this goes to show that no one part of this dominion has a corner on attractions. I have grown up in what used to be called the great

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lone land of the northwest-Fort Garry. It is a great lone land no longer; we have there one of the most enterprising and attractive cities in the dominion. In the thousand lakes and hills that span the upper part of Manitoba there are unsurpassed beauties. In the deltas around our lakes we have the most excellent wildfowl hunting, and in various part of the province big game hunting is unsurpassed by that in any other part of Canada; neither do we take a back seat in fishing, because in lake Winnipeg and lake Manitoba the whitefish and the sturgeon compare favourably with any similar fish that are found elsewhere in this country.
I did not however get up to sing the praises of Manitoba, but I should like to point out that there is no other part of Canada which has the beauty and natural attractiveness that my province has. The thought that was in my mind was this: this appropriation of $200,000, or at all events some of it, could be put to very good use in hastening the completion of the transcontinental highway, because when that road is built from one coast to the other there will be no more beautiful or interesting automobile route anywhere else in the world. I have not travelled very much myself, but I have been across the prairies of Canada to the west coast and I know my own province pretty well. I believe the best thing we can do with a good deal of this money is to spend it on improving the national highway. When it is improved and completed, we shall not require to spend very much money on advertising the beauty or attractiveness of this country; our chief difficulty will be to regulate the traffic on the road.	[DOT]


Mr. LUCHKOVICH:: In the Vegreville riding we have a park known as Elk Island park, which is so beautiful that if I tried to describe it adequately, words would wholly fail me. Therefore I do not wish to spoil the picture by any word description of my own, but I suggest to the minister that when he finally decides to issue circulars, or whatever he wishes to do in regard to this matter, he let the tourists who visit that part of the country know that a few miles south of Lamont there is a park called Elk Island park. In this circular I hope he will picture this park in larger capital letters than any other parks that have been mentioned here to-day.


William Lyon Mackenzie King: So far as tourists are concerned, may I say there is nothing finer or more attractive in Canada than the Prince Albert National park. There are other parts of Prince Albert constituency which are

equally beautiful, and I hope the tourist bureau will do justice to them, or rather attempt so to do.


Mr. BROWN:: Hon. members have all been singing the praises of their respective constituencies. In the constituency of Lisgar we have a resort that is recognized by both political parties as the finest in Manitoba or, indeed, in the west. In 1925, when Right Hon. Arthur Meighen was aspiring to become prime minister and was touring t'he country, his party chose Rock lake as a place to give a great demonstration, and it was truly a magnificent crowd that assembled there to hear the right hon. gentleman. Similarly when my right hon. leader (Mr. Mackenzie King) toured Manitoba and the west a short time ago, the Liberal party chose Rock lake as the most suitable place for the clans to come together to welcome their chief. So we have the endorsation of both political parties that Rock lake is the finest spot in Manitoba.
I think it would be very desirable that a Small portion of this appropriation or some other money should be spent on building just a few miles of highway to make a better connection between that beautiful summer resort and the country to the south. That would attract large numbers of tourists from the south. As I have said, we have the endorsation of both political parties that Rock lake is the one point at which they can best show their appreciation of their respective leaders.


Eugène Fiset: I am surprised, as I listen to all the boasting about the beauties of the maritime provinces and western Canada, that everybody seems to have forgotten that when one goes down to the maritimes, one must go through the beautiful province of Quebec. The loveliness of the south shore of the St. Lawrence, especially between Quebec and the maritime provinces, is unequalled in -Canada. I appeal to the Minister of Railways, who travelled last year through this famous gardqn that we call the Gaspe peninsula, and I ask hon. members when going down to the maritime provinces to stop on the way at Rimouski, where they will be well received.


Mr. REID:: There is one practical suggestion I should like to make to the minister which has not so far been offered. The minister in his opening address I think said that when the bureau was sending out pictures and advertising matter, the pictures would be sent out without the provinces being specifically mentioned on them. For instance, if pictures of mountains or lakes are used, those pictures would not inform the public where the particular spots are. Speaking from a little experience I know the people of the United

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States are not as discerning as we are in this country. A car may enter the republic from any province and the people there will simply say: "Oh, there is a Canadian car," irrespective of what province it may come from. I do not know whether we are better educated in this country, but I know that when American cars come here we observe what state they come from. I would thereforce suggest to the minister that in the pictures and photographs that go out it would be well that the provinces in which the places shown are situated should be mentioned, so that tourists may know where to find that beautiful scenery. I shall not take any more time talking about British Columbia, but if material for the proposed advertising is to be culled from Hansard I would just say that if any visitor comes to Canada and fails to see British Columbia his visit has been in vain.


Mr. HEAPS:: So much has been said about the beauties of the various provinces that I do not wish to add anything on that aspect of the matter, because other members know a good deal more about it than I do. Yet there are many beautiful parts in Manitoba, and not the least of our beauties is the Red river, and the Red river flows through North Winnipeg. But it is not now the beauty spot it once was; in fact the Red river to-day in the neighbourhood of Winnipeg has become more or less a plague spot that people try to get away from. So I have a suggestion to make to the government which I hope they will not only take into serious consideration but on which they will act in the very near future. The Red river has been polluted with sewage both in the United States and in Canada. At the present time Winnipeg and neighbouring municipalities have made a request to the government for assistance in providing sewage disposal works. I raise the question because I should like to be able to say for the Red river what others have been saying for their various constituencies. I should like the tourist bureau in getting out literature concerning Winnipeg and the adjoining districts to be able to show the Red river as one of its beauty spots, but before that can be, something must be done in regard to scientific and up to date sewage disposal. I suggest to the acting Prime Minister, who is now discussing the matter with the Minister of Railways, that prompt action be taken by the federal government in the way of assistance to the province of Manitoba to restore the attractions of the Red river.


Mr. YENIOT:: I do not want to take up much of the time of the committee, but I have listened to everyone praising his own
province and merely want to say that there is no need of singing the praises of New Brunswick; its beauties are too well known. I merely call the attention of the committee to two things which we possess in New Brunswick which are not found elsewhere, namely the reversing falls at Saint John and the heavy rush of water in the Petitcodiac river creating wihat is known as the Moncton bore. That is all I want to say.


Mr. PICKEL:: Before this vote carries I should like to say a word on behalf of the eastern townships of the province of Quebec. I do not need to say much, but I would draw attention to the fact that it is one of the finest scenic areas in the whole dominion and has natural attractions unsurpassed anywhere. It is a region of rivers, lakes and mountains galore. I know of one mountain 2,900 feet high from which I can view twenty-one small lakes, all teeming with fish, mostly trout. Of course they are not as large as they catch in some parts of the lower provinces or in British Columbia, but that does not seem to make much difference to the ordinary fisherman. As a general rule the ordinary fisherman is as much interested in what he takes with him and his surroundings when fishing as in what he catches, and I may say that remark is not confined to liquid refreshments.
It seems that this appropriation is about half what it should be, if all the requisitions of hon. members who have spoken are to be met.


Mr. CANTLEY:: I just want to remind the committee that I have the privilege of representing the Garden of Eden in the county of Pictou.


Ernest Lapointe: What about Eve?


Thomas Cantley: She is there too and we
also still use the original language of the garden of Eden. So we have a history of at least six thousand years of close association with the early times of the race. No one could find a better place ini all Canada in which to spend a summer holiday, particularly in view of the reductions in excise and the reduction of customs duty on West India rum of which we have heard this afternoon.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clocl. PRIVATE BILLS



CANADIAN MARCONI COMPANY

[Stage Direction]
Mr. F. W. TURNBULL (Regina, for Mr. Sullivan) moved the second reading of Bill
Railway Act-Rates on Grain
[Stage Direction]
No. 27, respecting Canadian Marconi Company.
Motion agreed to.
Mr. TURNBULL:: I move that the bill be referred to the private bills committee.


Pierre Édouard Blondin: May I ask the hon. member to explain upon what ground? Under standing order 104 a bill of this kind should be referred to the committee on railways, canals and telegraph lines.


Franklin White Turnbull: I do not personally know very much about the contents of the bill. I made the motion the hon. member for St. Ann (Mr. Sullivan) requested me to make, but if there is any difficulty about it I suggest it stand.


Pierre Édouard Blondin: It will be allowed to stand. Second reading will stand, too, with the consent of the house.


Ernest Lapointe: Yes.
Motion for second reading stands.



SECOND READINGS

[Stage Direction]
Bill No. 34, for the relief of Marie Philo-mene Florence Maher McCaffrey.-Mr. Heaps.
Bill No. 35, for the relief of Stuart Lewis Ralph Henderson.-Mr. Moore (Chateau-guay-Huntington).
Bill No. 36 for the relief of Charles Henry Campbell.-Mr. White (Mount Royal).
Bill No. 37, for the relief of Maria Elphin-stone Hastie Kinnon.-Mr. Bell (St. Antoine).

[Stage Direction]
The house resumed from Tuesday, March 19, consideration of the motion of Mr. Reid for the second reading of Bill No. 38, to amend the Railway Act (rates on grain).
Robert James Manion: Mr. Speaker, on the last occasion this bill was before the house I had only three or four minutes before nine o'clock in which to speak. In that time I pointed out some circumstances which, so as to make my argument more complete, I shall repeat to-night.
In the first place I indicated that a bill such as the one before us is really not a private bill, from the standpoint of the functions of parliament, because parliament is not a rate making body. This is not the body which sets railway freight or passenger rates. Neither the government nor the parliament o(f Canada has the proper machinery with
[Mr. Turnbull.l
which to deal with this very complicated matter. The matter of freight rates is perhaps one of the most complicated which could be placed before any commission, and one which requires special machinery !by way of experts and authorities.
I pointed out, further, that if freight rates were set in this House of Commons we would have so many bills like the present one placed before the House of Commons that we would have no time for anything else. The matter of freight rates would become a political question because almost every constituency in Canada has some particular commodity in which it is interested, and each member would be subjected to public pressure to bring before the House of Commons questions of freight rates on the commodities produced in his particular section of the country. As a result there would be the danger of log rolling, in the worst sense of the term. We would have one member assisting another in his effort to secure satisfactory freight rates on the understanding that, in return, the other would assist the first. Ultimately parliament would be inundated with bills to cut down freight rates on pulpwood, wheat, hay, potatoes or some other commodity. Speaking of potatoes may I say that only within the last week I have had communications from people outside the house and have had a number of hon. members approach me regarding the rate on potatoes from one section of the country to another. Special rates for potatoes have been requested by the maritime provinces and by the province of Quebec. Therefore I submit that we would have an impossible situation if the parliament of Canada were permitted to deal with freight rates.
The hon. member now sponsoring the bill has introduced a similar bill on four previous occasions and, incidentally, has approached the board of railway commissioners in regard to the same matter. Receiving a judgment from the board which was not in his favour, he has appealed to the privy council. That appeal, by the way, is still before the privy council and will have to be dealt with in the future.
In his speech the other evening he made a number of statements upon only a few of which I shall now touch. I pointed out on the previous occasion that the export rates are set for the purpose of permdtitng the products affected to compete in the world market. Generally speaking they are not set on the basis adopted in connection with domestic rates, because domestic rates are enforced so as to deal with the matter from the stand-

Railway Act-Rates on Grain
point of local consumption. When a commodity comes under an export rate it is on the way to a foreign market and is in a position where it must compete with the products of different countries of the world. Therefore, generally speaking export rates in Canada are not on the same basis as domestic rates, nor are they on the same basis even so far as mileage is concerned. For example-I assume my hon. friend knows this but the house generally may not-the rates from Edmonton to Vancouver, Calgary to Vancouver, and Edmonton to Prince Rupert are all exactly the same, 20 cents per 100 pounds, yet the distance from Edmonton to Vancouver is 765 miles, from Calgary to Vancouver 642 miles, and from Edmonton to Prince Rupert 973 miles.


Mr. HANBURY:: Those are export rates?


Robert James Manion: Yes, and they are all put
on the same basis because if one or the other route had an advantage even according to mileage it would get all the grain exported-* I am speaking of grain at the moment-and the others would get none. It is the same with regard to Halifax and St. John. The rates from Montreal to Halifax and St. John are exactly the same, for the reasons I have Just mentioned, although there is a great difference in the mileage.
The United States export rates are much higher than ours. It is true that in some cases, perhaps many cases, their domestic rates are lower than our normal domestic rate, but their export rate, which is also their domestic rate, is considerably higher than our export rate. For the information of the house I am going to put on Hansard a few of those rates, though some of these rates have been put on Hansard before.
The rate from Shelby, Montana, to Seattle, domestic or export, a distance of 757 miles, is 38i cents per 100 pounds. The rate from Bissell, Alberta, to Vancouver, a distance of 758 miles, just one mile more, is 20 cents; that is the Canadian rate is 20 cents as against the American rate of 38J cents. From Livingston, Montana, to Seattle, a distance of 897 miles, the rate is 39 cents, while from Greenshields, Alberta, to Vancouver, a distance of 893 miles, practically the same mileage, the rate is 22 cents; that is 22 cents on the Canadian side as against 39 cents on the American side. I am informed by railway authorities that practically all the rates on grains for export are in favour of Canada; that is they are lower to the Canadian shipper. It is true that the domestic rates in the United States, which are the same as the export rates, are lower in some
cases than ours, but due to the special domestic rate which through efforts of my own to a large extent and of the Minister of Agriculture we obtained about a year and a half ago from the prairie provinces to British Columbia, our feed grain rates are lower than the rates on the same quality of grain for domestic consumption in the United States. The same is true of our emergency rates obtained a few months ago for the purpose of shipping to the United States grains of lower quality, what are called feed grains. So on those two grades of grain, feed grains and grains of the lower grade-I have forgotten the exact classification-our rates are considerably lower than United States rates.
My hon. friend complained, and rightly, that our rate on burnt wheat unfit for human consumption was as high as the rate on other grains, but recently the railway commission instructed the railways that burnt wheat should be treated on the same basis as the lower grades of wheat moving from the prairie provinces to British Columbia.
My hon. friend also mentioned the rates from Calgary or Edmonton, or from the prairies for that matter, to Vancouver, as compared with the rates to Fort William. The rate from Calgary to Vancouver is 20 cents, and the rate from Calgary to Fort William is 26 cents. But the hon. gentleman, if I understood him aright, in comparing these two rates brought into the comparison the distances. I must submit to him and the house that grain at the head of the lakes is not in the same position as grain at Vancouver because grain at Vancouver is all the year round right on the seaboard, and in a position to be shipped across to Europe, whereas at Fort William it has to go at least one thousand miles to Montreal, and a great deal further if it is shipped in winter to Halifax or Saint John. So there is no fairness in comparing the rate on grain from the prairies to Fort William with the rate from the prairies to Vancouver, because the grain at Fort William is still inland and has to go at least as far as Montreal, and in winter to Halifax or Saint John, before it is in a position to be shipped to Europe.
But Vancouver has this other advantage. It is open the year round, whereas it is possible to ship grain from the head of the lakes by water only during seven months of the year, and as the rate is so high by rail from Fort William to Montreal or to the maritimes, that is practically a paper rate; in other words, almost no grain is shipped from the head of the lakes to either Montreal or the maritime
Railway Act-Rates on Grain

ports of Halifax and Saint John in the winter, and it is only during seven months of the year it can be exported. Therefore when grain gets into the elevators at the head of the lakes it stays there till the following spring because the rate is too high to ship it out.
It is true that the domestic rate from the head of the lakes to Montreal is lower than the export rate, but they are both paper rates. Neither of them is used because grain can go from the head of the lakes in the summer by water to Montreal for something under 4 cents a bushel; in fact, the rate during the whole season of 1933 averaged 3-79 cents a bushel. It is obvious therefore that when grain can be shipped in the summer for 3'79 cents a bushel, less than 4 cents a bushel, by water, it will not go by rail and pay a rate of 25 or 34 cents per 100 pounds, as the case may be, from the head of the lakes to Montreal or the maritime ports. Water competition controls, and my hon. friend complained a little of that, I think; but the fact remains that if the railways are to get any of the traffic between any two points they must compete with whatever other competition there is, and I have given the rate for the water competition. That competition is so severe that except for an emergency small shipment, a carload or some very small shipment, the railways will not get any, and even then they would have to compete to a certain extent with the lake rate or the lake and rail rate.
Another point which I wish to submit to the house is that the railways are to-day giving to Canada, as I stated and as has been stated by many railway authorities-I am not one of them-the lowest rates in the world for like distances, and consequently in view of the financial condition not only of the Canadian National but of the Canadian Pacific it would be of the most serious consequence to them if they were forced to give rates which would not pay them. Remember that if the railways of Canada, which are to-day having great difficulty in getting along at all, were forced to cut down their rates still further, they might be put in the position of threatening very seriously the maintenance of adequate railway services from one part of Canada to the other. AH railways, not only Canadian railways but the railways on the American side, have, during the past few years, found it necessary to defer maintenance on their roads because they have not been earning sufficient money to provide themselves with rails and railway equipment, even with ties and various other materials which they require to keep them going so far as maintenance is concerned.

Therefore if they were forced to lower their rates still further they would to a still greater degree be forced to defer maintenance; that would automatically lead to a greater amount of unemployment among those who carry on the maintenance, and that would mean a greater tax upon the Canadian people.
It is also well to remember that this country because of its great distances cannot get along without railway services, and if we put the railways into still greater difficulties we are really cutting our own throats because we are putting ourselves in a position in which we could not continue to exist.
It is perhaps as well to point out that the Canadian Pacific Railway in 1934, so far as my information goes, just earned its interest on its bonds, and the Canadian National, as this house knows well, is about fifty million dollars, in round figures, short of earning its interest payments for the past year. I submit that they could not stand very much pressure in the way of lower freight rates although individual sections might be served.
The hon. member also argued that the rates to British Columbia should be lower on certain lines through the rockies because of their lower grades. He did not mention an obvious fact, that the construction costs through the mountains are exceedingly heavy and the running of trains is difficult and sometimes hazardous. There is hardly any local business through the mountains. We all remember that only a few weeks ago a severe snow storm tied up trains in the Rocky mountains for as long as nine or ten days. This is something which does not occur in any other section of the country and it illustrates the difficulty of operating trains through the mountains.
I do not know that my hon. friend used the argument the other evening, but it has been argued before that the parliament of Canada passed the Crowsnest pass rates. However, it should be remembered that the act covering these rates was passed in 1897, seven years before the board of railway commissioners was set up. At that time parliament was justified in acting, but at the present time I submit that it is not justified in dealing with such a complicated question as this. I might tell the house that the board of railway commissioners has been rarely overruled by the government. I made it my business today to obtain some information from the board as to the number of appeals which have been made against their judgments They furnished me with the information that appeals to the governor in council had been made from forty-five of their judgments in

Railway Act-Rates on Grain
the period from February 1, 1904, when they were organized, to December 31, 1934. Of those appeals, forty-two were disallowed, referred back, dismissed or abandoned; in other words, the judgments were not interfered with. Of the three appeals which were allowed, one was in connection with a railway crossing, nothing whatever to do with freight rates. Another was in connection with the National Dairy Council of Canada and was against a ruling of the board dated November 21, 1922, in connection with a twenty per cent increase in cream rates. This was a protest against an increase in rates. The third appeal was made in 1924 when the governments of Alberta, Saskatchewan and Manitoba appealed from order number 408 dated October 14, 1924, regarding the Crows-nest pass rates. This appeal was allowed because of a decision of the supreme court. The supreme court had decided the case and the government merely accepted its decisions. In the period from 1904 until the end of 1934 there were forty-five appeals and in no case was a decision given by the government putting into effect a lower freight rate so far as any normal or standing freight rate was concerned.
I shall not take up any more time except to say just a few more words. I compliment the hon. gentleman upon his persistence. He has had this matter up before this house four times; he has had it up before the board of railway commissioners, and he is now making an appeal. However I submit with all deference that his persistence does not make his bill a proper one. I do admit that the freight rate structure of Canada is antiquated. It is in a more or less chaotic condition and I believe there will have to be something in the way of a complete investigation into the freight rates in the near future with the purpose of wiping out some of the chaos which exists and putting the freight rates in a more equitable condition. While I admit that an investigation is needed, that is a different question from the parliament of Canada attempting to adjudicate upon a question of this kind. The government feels, as we have felt for the last four years, that we cannot take the position of making freight rates in this house and we must therefore oppose the second reading of this bill. I submit to hon. members opposite with the best intention in the world that if they are by any chance the winners at the next election and the hon. member introduces a similar bill, they are likely to be embarrassed due to the fact that some of them have voted as they have. The government
of that day might be in the rather awkward position, if it were consistent, of trying to adjudicate upon a question of this kind. I merely mention this in passing.


Thomas Cantley: It is a long way off.


Robert James Manion: Yes, I think probably it is, but I am just pointing that out. For these reasons I submit that this question is not one upon which this parliament could give a decision favourable to the hon. gentleman.


Hon. IAN MACKENZIE (Vancouver Centre) :: [DOT] Mr. Speaker, I intend to detain the house but a few moments in connection with the bill introduced by the hon. member for New Westminster (Mr. Reid). This bill seeks to add to subsection 5 of section 325 of the Railway Act the following words:
-and to all such traffic moving westwardly from Fort William, and from all points on all lines of railway west of Fort William, to Vancouver, British Columbia and to points on the Pacific coast,-
I desire to take this opportunity of complimenting the hon. member for having made his plea year after year ever since he came to this house. He has made this matter a live issue as far as the interests of the people of British Columbia are concerned. Regardless of any political affiliations he has acted in their interests and the interests of the people of western Canada generally.
In the few minutes I have at my disposal I shall refer to the five reasons given by the Minister of Railways (Mr. Manion) for opposing this measure. Those five reasons, while they may be worthy in themselves, are entirely inconsistent in the general composite structure of the opposition which he is offering. The first submission made by the minister was that parliament is not the proper body to make freight rates, that the building up of a freight rate structure should be left to a body of technical experts. He contended that the board of railway commissioners had been specifically created for this purpose. I agree with the minister so far as the general details of a freight rate structure are concerned, but here we have at stake a basic principle of fundamental justice. When we must make a decision in regard to such a principle, the proper body to adjudicate upon the equity and justice of this principle is the court of last resort, the parliament of the Dominion of Canada, and not any body of experts. I am endeavouring to differentiate between the details of a common freight rate structure as they apply to any section of the country and
Railway Act-Rates on Grain

a violation of the basic principle of fundamental justice and rankest discrimination against a splendid section of this country.
The second point made by my hon. friend had nothing whatever to do with the ability or inability of this parliament to adjudicate a question of justice which concerns British Columbia and western Canada. I cannot quote him word for word but the sense of his remarks was that there was no fairness in comparing rates from the prairies to Vancouver with those from the prairies to Fort William. He stated that many of the rates applying in eastern Canada were paper rates, in other words, that British Columbia and in particular the ports of Vancouver and Prince Rupert, must suffer the inequalities and injustices of an unfair structure of freight rates because the ports are open the year round. We are being made to pay for our climatic superiority through an unjust discrimination in favour of certain sections of eastern Canada.
I have come now to the third reason given by the minister. He said that if the railways are going-


Robert James Manion: I am sorry to interrupt
my hon. friend, but I am sure he wishes to be fair. I was dealing not with the rates from the prairies to Fort William but with those from the head of the lakes to Montreal. I say this so that the record may be straight. That was a different thing from the rate from the prairies to Fort William.


Mr. CHAPLIN:: How long has this injustice been going on?


Ian Alistair Mackenzie: It has been going on -


James Dew Chaplin: It went on for ten years under the previous government.


Ian Alistair Mackenzie: I am not discussing what has happened under either party; I am arguing for simple justice for the west. With all respect to the minister, I took down his words and I think Hansard will bear me out when I quote him as having said that there is no fairness in comparing the rates from the prairies to Vancouver with the rates from the prairies to Fort William.


Robert James Manion: That is correct.


Ian Alistair Mackenzie: And he said that the rates from the head of the lakes to Montreal were largely paper rates and were dictated by cheaper water competition.


Robert James Manion: My hon. friend has me right now; he did not have me right the other time.


Ian Alistair Mackenzie: I am
dealing with two different things. The minister did discuss a comparison between the rates from the prairies to Vancouver as against the rates from the prairies to Fort William, and he said -


Robert James Manion: I said that the comparison was unfair, not because it was a paper rate but because the grain at the head of the lakes was still inland and had to go a thousand miles.


Ian Alistair Mackenzie: I agree with the minister, and that is my point. I contend that you are building up a discrimination in freights against the open ports of the Pacific inasmuch as geographically you are compelled to have the grain locked up for several months. But why should we suffer the inequalities in this freight rate structure merely because we have been given by providence certain ports which are open the year round?
The next point made by the Minister of Railways was this-and here he went off at a tangent-that the rates are now the lowest in the west, that the railways could not maintain equipment, that there would be increased unemployment and greater taxation if they forced to lower their rates still further. He also said that the Canadian Pacific Railway in 1934 had barely earned its interest on its bonds. Let us analyze the significance of that argument. Vancouver, Prince Rupert and Alberta are to be discriminated against because the railways of Canada are facing at the present time a severe financial stringency. But, I submit, why should we be the ones to suffer as a result of the financial conditions in which the railways of Canada find themselves to-day? Should not this be the proper course? Should we not in the first place establish a uniform system of equity and justice in the freight rate structure of the country, and then on that basis of equity of contribution and sacrifice do everything possible to assist both the privately owned railway and the public system?


Mr. HANSON (York-Sunbury):: On the
basis of my hon. friend's argument, the estab-lisment of an equitable base, would he be willing as a first step to scrap the Crowsnest rates?


Ian Alistair Mackenzie: My hon. friend as usual is trying to draw a red herring across the trail. I think that one of the greatest tasks ahead of some government in the future is to establish for the first time in Canadian history a scientific freight rate structure, because the entire structure as it

Railway Act-Rates on Grain
exists to-day is lopsided, having been built up from the point of view of sectional interests since confederation-concessions here and concessions there. From our point of view we can prove that there has been the rankest discrimination against us in the west from the operation of the freight rate system of Canada as we have it now.
The fourth point made by my hon. friend is the very old and ineffective argument, that construction costs were exceedingly heavy in the Rocky mountains while local business was small, therefore we in the far west must pay the penalty of our geography. I do not believe that argument is based on fundamental justice. All that my hon. friend from New Westminster wants, all that the people of British Columbia are asking for, irrespective of party, is that there shall be applied to this question the fundamental principles of simple justice. My hon. friend's next point was that the board of railway commissioners was pretty much a sacrosanct institution, that it had always been successful in its decisions and that appeals against it had failed; therefore, according to my hon. friend, we should look to it as the court of last resort. They had ruled against the contention of my hon. friend from New Westminster and therefore they were the court of last resort.


Robert James Manion: My hon. friend is not fair. I did not say that because they ruled against the hon. gentleman's contention we should therefore accept them as the final authority. I said that all governments had accepted their rulings, in practically all of forty-five cases.


Ian Alistair Mackenzie: I accept my hon. friend's amendment. But these are days of new deals, especially in the ministry to which the hon. gentleman belongs. But even granting that in the past governments have accepted with a degree of finality the judgment of the board of railway commissioners in these matters, surely my hon. friend must recognize that to-day we are endeavouring to meet new conditions, and we are appealing for justice to be meted out to the west and particularly to British Columbia.
The final point made by the minister was one that was not worthy of him, if I may say so in all kindness. He said that if we were sitting where he is now, inside of two or three months-and we certainly shall-and we were confronted with the same problem, we might feel a certain degree of embarrassment if my hon. friend from New Westminster should bring up the question again. Let me say to the minister that those of us who come from British Columbia, and possibly this will apply to my hon. friends from that province sitting
on the other side of the house, regardless of the issue of the next election, intend to continue to fight to see that justice is done our province and Alberta and western Canada generally with respect to this question of freight rates, which at the present time works the cruelest discrimination against the whole Pacific coast and the western plains of this dominion.


Mr. A. W. NEILL (Comox-Alberni):: I wish to say a word or two in support of this bill. I introduced the same subject many years ago, not perhaps by way of a bill but by way of a resolution and when the estimates were under consideration. I introduced it a number of times before the hon. member who sponsors this bill came to the house, but when I found that he attacked the injustice with so much vigour and energy I was glad to leave the matter in his capable hands. The hon. member for Lincoln (Mr. Chaplin) has asked how long this injustice has continued. I can recall the time when he sat in the opposition for a number of years-and when you are in opposition is the time to be virtuous-^and I cannot remember his ever lending the weight of his influence and his voice to support the cause when I urged it. I know he has a good memory because he has checked me up more than once, and if he supported me on those occasions I shall be glad to be corrected. I cannot remember however that he ever did so.
The Minister of Railways (Mr. Manion), in opposing this bill, has made allusion to appeals to the privy council, otherwise the cabinet. The Prime Minister (Mr. Bennett) discussing this matter some years ago, said that it was not a wise tning, the arrangement that existed of taking appeals to the privy council, because it was taking them to a body whom he termed politicians, a political body, and he gave reasons to show how it had originated in that way. He said the arrangement was no longer desirable, and with that I agree to some extent, as I did then. But I suggested then, as I suggest now, that the proper appeal should be to the exchequer court where it would not be considered by a political body and there would be none of the dangers attending an appeal of that sort.
The minister said that this parliament was not a rate making body. May I point out that we passed a vital act dealing with Crows-nest rates in 1923 or 1924. Then he speaks about its being undesirable to interfere with it because it is such a complicated structure. But who asks him to change the structure? We are merely asking him to remedy an obvious injustice, something which is so
Railway Act-Rates on Grain

obvious that a schoolboy can see the logic of it. We do not propose to tear down the whole structure; that is not suggested. Perhaps I might give an analogous illustration. If my wife asked me to fix a screen door on which one of the hinges was lose, needing a nail and I said, "Woman, I cannot possibly build a house," the obvious answer to that would be, "It will be time enough to talk about building a house when you are asked to build one; in the meantime the hinge needs to be fixed and can be fixed." But there is one thing in all the arguments-and I have heard a great many in the last fourteen years-and it is this. I have never heard anything said really to justify the existence of the differential between the export rate and the domestic rate. Attempts have been made to cover it up, to sidetrack it, but I have never heard an attempt made to justify it. The minister spoke about the heavy snowfalls causing increased transportation costs on grain going through the Rocky mountains, but snow falls on the just and unjust alike; it falls on trains carrying export as well as domestic wheat. Therefore that argument in favour of a differential is quite absurd.


Robert James Manion: I was only pointing out
the high cost of operation in the mountains. If the hon. member will take my arguments and deal properly with them, I have no objection; but I do object to his twisting my statements. I said that operating costs were higher in the mountains than on the prairies.


Alan Webster Neill: Why did my hon. friend say that if he did not use it as an argument?


Robert James Manion: My hon. friend from New Westminster in his speech had argued as to the low grades and cheap operating costs in some sections of the mountains. I used the argument as contra to that.


Alan Webster Neill: Then they were both illogical, as the cost does not affect the differential.


Robert James Manion: There is only one logical
man in the house, I suppose.


Alan Webster Neill: There is, I am glad to say,
generally one person right in an argument. The minister spoke about the cabinet not being in a position to handle this question. I quite frankly admit that the cabinet is not the best body to handle it on an appeal, but the cabinet have given an illustration of what in part they have already done, and they could do this: they could put pressure on the railway companies to reduce the differential not only to the extent they have already done it-for they have only cut it in half
fMr. Neill.1
and at present this applies merely to No. 4 tough wheat and coarse grains and lower- but if they could apply it to No. 2 tough and lower and all mill feeds a good deal of this trouble would be eliminated. There is no justification whatever for making this apply to some grades of wheat and not making it apply to mill feeds. I believe mill feeds were originally left out more or less by a misunderstanding than on account of anything else.
The minister says that the railways might lose money and curtail their services to the people. He does not need to worry about that because I am credibly advised that the putting on of that reduced rate resulted in increased traffic that was profitable to the railway companies, as the rate is still much higher than the export rate; and I will diefy anyone to say that the export rate is not profitable to the railways, otherwise they would not be so keenly competing with each other to get the traffic. Therefore it is profitable for the railways to carry export grain at a fixed rate, and consequently it must be profitable for them to carry domestic grain, which does not cost any more to haul and which is of less value, at a price something less than double the export rate. If the minister could use his influence-and he can because he has used it already and the Prime Minister has used his-to have this rate apply to No. 2 tough wheat and lower and coarse grains and mill feeds, it would meet a great deal of the complaint this bill seeks to remedy.


Thomas Cantley: I
listened with a great deal of interest to the speech of the Minister of Railways (Mr. Manion) and with rather less to some of the speeches that followed. The minister suggested that perhaps railway rates to-day are antiquated. They may be, but the man that undertakes to revise and redraft railway rates in this country is undertaking a pretty big task. There is no possible doubt that Canadian export rates are to-day the lowest in the world and are not made on any reasonable scientific method of providing the railways with adequate revenue for the work which they perform. Roughly our export rates are about fifty-five per cent of the United States rates for like distances or like commodities; that is a fact which cannot be successfully controverted. If the Canadian National Railways were able to-day to get the rates that are extorted by United States and continental roads, not only would they show a surplus, but with that surplus they would be able practically to rebuild their entire motive power and their rolling

Railway Act-Rates on Grain
stock as well. I am quite satisfied that any hon. member who gives close study to the matter and looks into the whole structure of railway rates in this country for the last twenty or thirty years will bear me out in the conclusions I have reached. I know of no branch of industry in Canada that has a poorer showing for its investment for the energy and ability with which it has been managed, than has our railway system.


Thomas Reid: I do not know whether I have time at my disposal this evening to deal with all the arguments which have been advanced by the Minister of Railways (Mr. Manion) against this bill, which I have introduced now for the fourth time. At the outset he spoke about the House of Commons not being the proper place for rate making. Were I bringing up the general question of freight rates in the house, there might be some force in his argument, but I am not doing that; I am asking parliament to give British Columbia what parliament in 1925 gave for all grain traffic going to Fort William, a rate which had been in existence since 1897. The Minister of Trade and Commerce (Mr. Hanson) interrupted to ask whether we would care to advocate. the abrogation of the Crowsnest pass rate. No, we are asking: Give us the Crowsnest pass rate. When speaking the other day I said that the government would not dare to abrogate that rate.


Robert James Manion: Have you not the Crowsnest pass rate on export grain now?


Thomas Reid: I contend that we have not. It is still two or three cents higher if you take the actual mileage, but I a>m not bringing up that point just now; I am asking that the domestic rate be the same as the Crowsnest pass rate.


Robert James Manion: That is a different matter, but you have the Crowsnest pass rate at the present time on export grain.


Thomas Reid: That is a debatable point, but I am not going into that because I am dealing with grain for domestic purposes in British Columbia and I am asking that that grain be given the Crowsnest pass rate.
As regards the minister's remarks about export rates 'being competing rates, might I point out that argument has been advanced many times by the railroads, but when it suits they are very good at changing their ground. When we quote certain rates to them, they have other excuses to offer. When we said that the domestic rate from Fort William to Montreal was twenty-five cent6
and the export rate was thirtyJour and a half cents, they had no answer to give. Let me point this out to the house; the railways have never shown that export rates at present in existence from Calgary or Edmonton to Vancouver mean a loss to them. I maintain that the rate of twenty cents is a paying rate and two of the members of the board of railway commissioners say the same thing. If that rate is a paying one, why should we in British Columbia for the grain we use have to pay one hundred per cent more than do our competitors in other lands? It is no wonder that at one time the people of British Columbia were seriously thinking of buying Canadian grain in lapan or England and bringing it into that province. There was a time in 1934 when Canadian grain, Nos. 2, 3 and 4, could be purchased in Yokohama, lapan, and brought into the Fraser valley at twenty-five cents a ton cheaper than the price at which it could be brought in from the prairies. I was one of those who advocated that we do this and thus prove the utter absurdity of charging us forty-one and a half cents a hundred pounds for inferior grain when our competitors in Japan could purchase the same or higher grades at a much cheaper rate.
The minister spoke about the United States rates, but he was not exactly fair in that. I have before me the whole rate structure as presented by the railway companies in the appeal last fall. I shall take the time to dispute the statement made by the minister, even if the discussion has to continue at the next sitting. Take the case of Cut Bank, Montana, 732 miles. It is true the old domestic rate was 384 for wheat as against 414 for our domestic rate. I admit that tariff No. 145 is now 304, but the Minister of Railways ignored entirely the fact that there is another rate for coarse grains.


Robert James Manion: In the United States?


Thomas Reid: Yes.


Robert James Manion: I apologize for interrupting, but I think my hon. friend is wrong.


Thomas Reid: These are figures presented by the railways before the board of railway commissioners. A copy was given to me by counsel.


Robert James Manion: Will the hon. gentleman read the rates?


Thomas Reid: Yes, I shall take Shelby, Montana: distance, 757 miles; old domestic rate, 384; coarse grains, 344. Now, 344 for coarse grains and mill feed is considerably better than 414-
Railway Act-Rates on Grain


Robert James Manion: But it is not as cheap as our rate on low grade grain at the present time.


Thomas Reid: The trouble with the minister is that he is not conversant with feed requirements. In the Fraser valley, and I suppose in other farming districts where they keep cows and chickens, mill feeds represent fifty per cent of the requirements.


Alan Webster Neill: More.


Thomas Reid: 
Robert James Manion: I did not say it was a
paper rate from Montreal to the maritimes; I said from the head of the lakes to Montreal.



NATIONAL DEFENCE

[Stage Direction]
The house in committee of supply, Mr. Morand in the chair.
Salaries, $402,692; contingencies, $45,948.
Wilfred Hanbury: Would the minister make a statement as to the progress being made in the construction of the armouries for the Seaforth Highlanders in Vancouver?


Hon. GROTE STIRLING (Minister of National Defence):: Tenders are about to be called for; they have not yet been received.


Wilfred Hanbury: Are public or private tenders to be asked for?


Grote Stirling: A list of contractors are being asked to tender.


Ian Alistair Mackenzie: Private tenders.


Wilfred Hanbury: Would the minister give the names of the companies which will be asked to tender?


Grote Stirling: I am afraid I have not a list with me, but I shall be very glad to get it for the bon. member.


Abraham Albert Heaps: Will the barracks put up by the government foe government property after its erection or is it being put up by a private organization?


Grote Stirling: I do not understand the question.


Abraham Albert Heaps: We had instances last year when certain private organizations put up barracks with the assistance of government funds and government guarantees. Is the barracks at Vancouver being put up entirely by the government and will it be the property of the government or, as has happened in other parts of western Canada, will the completed building be the property of a private corporation?


Grote Stirling: I think the hon. member is referring to the basis of rental-purchase. This barracks is not being built under that arrangement, but is under the Public Works Construction Act.


Abraham Albert Heaps: Will the construction of these barracks, wherever they may be, be done on that basis, and not on the basis of rental-purchase? Will that be the policy of the department?


Grote Stirling: Y'es. Speaking generally, and not binding myself to any definite statement on the subject, I would say we are not now proceeding under the rental-purchase system, but rather under a system of direct construction.


Abraham Albert Heaps: What need is there in Vancouver for the construction of this building? ,


Grote Stirling: For the accommodation of the non-permanent active militia of that city.


Abraham Albert Heaps: How many members are there in the non-permanent active militia, and what quarters have they at the present time?


Ian Alistair Mackenzie: As I
happen to 'be conversant with the situation perhaps I might reply to the hon. member. I wish to support the minister to the utmost degree and to state that the present headquarters of the Seaforth Highlanders in Vancouver is entirely inadequate, nor is it sufficient to carry out the duties of one of the oldest militia units in Vancouver. I am in favour of the vote for the building of the armouries for the Seaforth Highlanders.


Abraham Albert Heaps: If the minister cannot tell me, possibly the hon. member for Vancouver could tell how many members there are in the organization?


Ian Alistair Mackenzie: That
would depend on the number of recruits, from year to year. It would depend, naturally, on the number in the active militia and in the reserve battalion. There are three or four hundred in the militia, but the number could be increased over night to several thousand', if necessary.


Mr. MacINNIS:: The last time this item was up for consideration I asked if the minister had an estimate of the value of the work done by the men in the National Defence unemployment relief camps. At that time I believe he said he had an estimate, and I should like him to give me the figures.

Supply-Defence-Relief Camps


Grote Stirling: The hon. member has
asked for the expenditures on relief camps?


Angus MacInnis: No; I asked for the value of the work done by the men in the National Defence unemployment relief camps.


Grote Stirling: I have the estimated
value of the work done up to September 30, 1934. It is based on an average efficiency of relief personnel of fifty per cent, and the figure is given as $6,747,331. The total man days of relief afforded to that date was 7,569,199.


Angus MacInnis: Is that for the whole of Canada?


Grote Stirling: Yes.


Angus MacInnis: Is the twenty cents per
day allowed the men in the relief camps paid on days when the weather is not fit for the men to work?


Grote Stirling: If the men go out at
all to work they receive the allowance.


Angus MacInnis: If the weather is so bad that they cannot leave the camps they are not paid the allowance?


Grote Stirling: Under those circumstances they do not receive the allowance.


Angus MacInnis: Some little time ago
about forty men were arrested for getting relief under false pretences. I believe they went into the camps under assumed names. Who authorized the arrests? Was it the Department of National Defence?


Grote Stirling: Could the hon. member give me some further information in the matter?


Angus MacInnis: Some of the arrests took place in the city of Vancouver, and some of them in other British Columbia camps.


Grote Stirling: When?


Angus MacInnis: Approximately three
weeks ago.


Grote Stirling: I am without information with regard to the matter. I do not recollect anything of the sort coming before the Department of National Defence.


Abraham Albert Heaps: In years gone by we have
protested about the inadequate allowance given by the government to the young men who are forced to go into the relief camps and to accept twenty cents a day or about $5 a month. I was glad) to observe the government saw fit to bring in a measure providing for a minimum wage, and as a result of which I hope before long we will have a national minimum wage in effect.

In the event of the minimum wage law becoming effective will the Department of National Defence live up to government regulations and pay these men in the camps the minimum wage prescribed in their legislation?


Grote Stirling: I believe the hon. member is referring to a discussion which took place on a previous occasion when this estimate was before the committee. The hon. member for Quebec South (Mr. Power) raised the same point. I believe these hon. members have failed to realize that the handling of relief is as a result of arrangements made between the federal and provincial governments after the provinces had asked the dominion for assistance. By agreement the dominion took over the care of the single homeless unemployed men and stipulated that in certain places throughout Canada camps should be erected in which those men could find work to do. In the event of the men accepting the work provided they were to receive certain food, clothing and shelter, plus an allowance of twenty cents per day. By agreement with the provinces that was undertaken, and the men who choose to comply with the regulations obtain work and receive the returns.


Abraham Albert Heaps: That does not answer my question. As I said before, in years gone by several of us in this part of the house have protested against the totally inadequate allowance given by the government to these young men who are compelled by force of circumstances and through no fault of their own to go into these relief camps. Now that we are trying to bring about better social conditions throughout the country and improve the lot of the under dog I think it would be an appropriate time for the government to step in and give to these young men who are rendering useful service to the country something more than the twenty cents per day that they are now receiving. I have had many complaints from the camps. I received1 one only this week from a camp somewhere near Hudson, Ontario, along that very line. Men leave the camps often without a cent in their possession because of the very low allowance they receive from the government, and they go out into the world almost penniless. If they are doing work at all they should be paid a proper rate by the government for what they do. I know that many young men are forced by the regulations in some of our municipalities to go into these camps, otherwise they cannot get relief from the municipality. In view of these circumstances, when they are compelled to go into the camp and are forced

Supply-Defence-Relief Camps
to work they should be given more than twenty cents a day.
As I have said, the government contemplates introducing minimum wage legislation, and I am now speaking of the principle of that minimum wage legislation. If we are to adopt the principle of the payment by employers of labour of a minimum wage for services rendered in any part of the dominion, I think one of the first to recognize that principle should be the government themselves; for how can we expect any private employer of labour to accept the principle if right off the bat, so to speak, the government refuse to adopt the very principle which they are responsible for, and for which no doubt they will take so much credit when the time arrives? So my plea to the minister is that he should not only take into serious consideration but act favourably upon the idea of paying to these young men who are in the camps a proper wage for the work they do. That at least would be comforming with the idea the government has in mind in submitting to parliament minimum wage legislation.
Sir EUGENE FI8ET: I wonder if the minister would be kind enough to inform me if he has received a request from the officer commanding Les Fusilliers du Bas-Saint Laurent for an extension of the present headquarters of the armoury at Rimouski and also for the erection of a new armoury at Mont Joli in the county of Rimouski. I think that a recommendation was sent to the general officer commanding the Quebec district and that it wa,s strongly endorsed by him, and the officers of the regiment were rather encouraged by headquarters to believe that the recommendation would be favourably considered and acted upon out of the general relief appropriation.


Grote Stirling: I did receive such a communication, and the question is under consideration along with the requests of many other regiments who have made similar applications.
Sir EUGENE FISET. During the last war this regiment under the voluntary system furnished 2,500 men to go overseas, and the bulk of them formed part of the 22nd regiment. It is one of the most deserving units you could possibly find in the whole of Canada, and if the minister could see his way clear to helping them I think it would be rendering a great service to the cause.


Grote Stirling: I shall be very glad, Mr Chairman, to give the matter full consideration.


Angus MacInnis: May I ask the minister if the twenty cents a day which the men receive in the unemployment relief camps is a wage or an allowance?


Grote Stirling: It is an allowance.


Abraham Albert Heaps: An honorarium.


Angus MacInnis: Then if it is an allowance why is it not paid on the days the men do not work as well as on the days they do work? The men believe it is a wage, and I think there is some logic in their argument. I would ask the .minister to take into consideration recommending to the government that this allowance be paid regardless of whether the men work or not, that is if the man is willing to work. I have a letter here from a young chap in one of these camps, and he says in part, "In the event of the weather being so unfit that we cannot work we lose a day's pay. Yesterday we were not able to work, so we lost twenty cents." Now twenty cents is not a great deal to the minister but it is a great deal to the men in these camps. Circumstances alter oases, and I am sure that if the minister was in the camp at twenty cents a day he would like to get that twenty cents. My correspondent goes on to say,, "Believing that the government would not stop that twenty cents if they knew about it, I am risking writing to you and losing my job in the bargain if caught." I would like to impress on the minister that here is a young chap who still has some faith in the government, and I think the government need's all the faith that is possible in these hard times. I suggest that the government stretch a point here-it is not a very great stretch-and consider giving to these men the allowance regardless of whether the day is fit for work or not. I hope the minister will take that suggestion into consideration.


Grote Stirling: Certainly. Every suggestion made in this committee will be taken into very serious consideration.


Abraham Albert Heaps: I am always afraid, Mr. Chairman, that when these suggestions are taken into serious consideration they usually go into the waste paper basket.


Grote Stirling: Oh, no.


Abraham Albert Heaps: I would much prefer that the minister say to my hon. friend from Vancouver South (Mr. Maclnnis), "Yes, we will accede to your very modest request. " After I have been asking that these men be paid the minimum wage I am surprised that my hon. friend from Vancouver South should come along with such an exceedingly modest request
Supply-Defence-Relief Camps

as he has made. It has left me almost speechless. I woud seriously ask the minister not to take my hon. friend's request into serious consideration, but here and now to give assent to it so that the men in the camps shall at least be assured of twenty cents a day whether the weather is fine or not.


Angus MacInnis: I almost feel like apologizing to my hon. friend from North Winnipeg (Mr. Heaps), but my ancestors were Scotch. I think the minister should give me a definite answer to this very modest-much too modest -request, so that I may have a reply to send to my correspondent.


Grote Stirling: I suggest that the hon. member reply to his correspondent that on the 22nd of March he brought the matter up in committee of supply and the minister responsible assured him that, just as every suggestion would receive earnest consideration, his would.


Abraham Albert Heaps: And sympathetic consideration?


Grote Stirling: Yes, and sympathetic consideration.


Edward Joseph Garland: I want to join my voice to the protests of other hon. members in this corner of the house with respect to this twenty cents a day business. I frankly think it is a disgrace to this country, particularly after all we have heard to-day regarding our wealth and returning prosperity, that this twenty cents a day, this miserable and utterly inappropriate pay, be continued even if it is called an allowance.
But I rose for another purpose, in connection with a complaint that I placed before the minister some time ago in regard to some of the camps out from Calgary. Since taking that matter up I have received from the office of the city clerk of Calgary some correspondence in connection with this case. I find that on February 5 the city clerk, J. M. Miller, wrote a note to his worship Mayor Davison in the following terms:
Dear Sir:
I beg to advise you that council, at its regular meeting held last evening, adopted the following motion:-
"That this council authorize Hi? Worship the Mayor to direct to the attention of dominion and provincial government officials the plight of single men at present in Calgary, formerly of relief camps, requesting that some provision for their maintenance be immediately undertaken and the present situation thereby rectified.
"Further, that an investigation be immediately undertaken by the dominion and provincial governments concerning reported

unsatisfactory conditions at the various relief camps and a report thereon furnished this council."
Kindly give this matter your attention.
Yours truly,
J. M. Miller,
City Clerk.


Grote Stirling: What is the date of that letter?


Edward Joseph Garland: Februarj' 5. On February 6 the following letter was written by A. Davison, the mayor of Calgary, to the Honourable Wesley Gordon, Minister of Labour, Ottawa, Canada:
Dear Sir:
The following resolution was passed by our city council at its regular meeting on February 4th, and I forward same to you for your consideration and action.
"That this council authorize His Worship the Mayor to direct to the attention of dominion and provincial government officials the plight of single men at present in Calgary, formerly of relief camps, requesting that some provision for their maintenance be immediately undertaken and the present situation thereby rectified.
"Further, that an investigation be immediately undertaken by the dominion and provincial governments concerning reported unsatisfactory conditions at the various relief camps and a report thereon furnished this council."
A considerable number of single men are now drifting into Calgary from the various camps, and we are fearful unless some action is taken that a serious, situation may develop locally. Your early attention to this matter will be much appreciated.
Yours very truly,
A. Davison,
Mayor.
The last paragraph had been added by the mayor. On February 20 the following letter was sent by J. M. Miller, city clerk, to Brigadier General D. W. B. Spry:
Dear Sir:
The council, at its regular meeting held with date of February 18th, had before it for consideration clause 1 of the report of the city commissioners' dated February 15th, and which concerns reported complaints to the council respecting single men's camps. A copy of the clause refered to, together with the correspondence referred to therein, is attached for your information.
In dealing with the matter the council instructed that the various features referred to in the reports of the investigating officers be directed to your attention and with a recommendation that better water supply be afforded, better recreational features furnished, that the men be permitted to formulate committees for the purpose of presenting their grievances, and if at all possible, that permission be granted the men to come to the city at times within reason.

Sup-ply-Defence-Relief Camps
Might I respectfully request that after the council's representations in this respect have received your attention that I might receive your report thereon.
Yours truly,
J. M. Miller,
City Clerk.
On February 22, Brigadier General D. W. B. Spry wrote to the mayor as follows:
Dear Mr. Mayor:
Receipt is acknowledged of the communication from the city clerk of February 20, 1935, attaching the correspondence of the city commissioner and the reports of the gentlemen you asked permission for to visit the Department of Rational Defence camps in the Kananaskis valley.
It does not appear to be clear to your committee re the point raised1 in regard to water supply, that these camps were under construction and final completion of wash houses had not been completed. Further, that it is the policy that all these camps are constructed by the men themselves. During construction it is only normal that improvised systems have to be employed. The water supplies are now practically all completed, leaving no further grounds for reasonable complaints.
In regard to recreational facilities, as you are no doubt aware a recreational hut is supplied by the department, but that all equipment, such as books, games, radios, gramophones, et cetera, are obtained from private subscriptions, in which the citizens of Calgary have assisted very materially, and the profits from men's canteens:	mostly, however, by
private efforts as canteen profits are of necessity small. Should your council feel inclined to assist us in this work by a grant for camps in the vicinity of Calgary, or to which Calgary men are admitted, it would 'be very greatly appreciated.
With regard to the method of registering complaints, the following are the regulations in this respect as laid down by the Department of National Defence for all camps in the dominion:
"The following rules regarding complaints will be observed:
(a)	One of the fundamental and most necessary rules for the administration of unemployment relief camps is to forbid anything bearing the appearance of combination to obtain redress of alleged grievances. Appeals for redress by means of any document bearing the signature of more than one complainant, or by organized committees combining to make a complaint are strictly forbidden.
(b)	If any man has a complaint or accusation to bring against a member of the supervisory or administrative staff, such complaint should be laid before the camp foreman, who, if necessary, will transmit it to district headquarters or camp superintendent.
(c)	If the camp foreman neglects or refuses to attend to a complaint, the complainant may bring the matter to the notice of the district headquarters or camp superintendent.
(d)	The department will not countenance any steps to bring accusations before the tribunal of public opinion, either by speeches, or letters inserted in the newspapers, by men actively employed on relief work. Such a
proceeding is a glaring violation of the rules and shows a contempt for properly constituted authority.
(e)	It is the duty of the camp foreman to investigate all complaints and, when receiving complaints for transmission to superior authority, to point out to the parties concerned any irregularity in the means they 'employ in seeking redress. In hearing complaints or statements, et cetera, camp foremen are advised to invariably have another member of the supervisory staff present as a witness to all proceedings. The complaint, when forwarded to district headquarters oir camp superintendent, is to be accompanied by a statement and recommendation, if any, of the camp foreman.
(f)	No 'application or complaint should ever be -made to the civil power, except through the camp foreman or with his sanction."
Trusting the above is the information you require.
Yours truly,
D. W. B. Spry,
Brigadier General, D.O.C., M.D. No. 13.
I have never heard of any such document outside of an internment camp during war time.


An hon. MEMBER:: That would be in the army.


Edward Joseph Garland: The army is about the only place where you might expect such a suppression of individual and private rights. I resent this and I protest to the minister and to the government that these men should have the right to organize their complaint committees. I believe this government would be- well advised to permit within the camps the form of self-government which is permitted within our universities.


Mr. McINTOSH:: The right of assembly.


Edward Joseph Garland: At least the right of assembly to secure redress of wrongs. This is a violation of every decent law of British justice and practice, and the fact that such a Prussian-like document is presented as the official rules regulating a camp in Canada is certainly an indication of the ruthless -character of the system which has thrust these men into the camps as the only means of escaping their misery and starvation. I want to make my protest in this matter as forceful as I can, and I repeat the words of Brigadier General Spry, as follows :
One of the fundamental and most necessary rules for the administration of unemployment relief camps is to forbid anything bearing the appearance of combination to obtain redress of alleged grievances. Appeals for redress by means of any document bearing the signature of more than one complainant or by organized committees combining to make a complaint are strictly forbidden.
Supply-Defence-Relief Camps

What kind of men are these with whom we are dealing? Are they brutal men? Are they revolutionary? Are they not Canadian citizens who through no fault of their own are in this terribly unhappy condition? Surely the minister himself is sufficiently British in his instincts, a sufficiently good sportsman to understand that this is not sportsmanship. It is not even decency; it is sheer Prussian oppression. Under subsection (d) we find:
The department will not countenance any steps-
Note that; the department will not countenance any steps.

to bring accusations before the tribunal of public opinion.
And so we have turned these relief camps definitely into military secret camps where the most rigid discipline-yes, more rigid than in war time, even worse than the discipline which the soldiers had to undergo-is carried out. These men are under more rigid discipline than is necessary for the maintenance of armed forces.	[DOT]


Mr. GRAY:: Will the hon. member repeat the date?,


Edward Joseph Garland: February 22, 1935.


Wilfred Hanbury: Are you sure it isn't 1535?


Edward Joseph Garland: I am not so sure about that; it might be under Cromwell. The department, we are told, will not countenance any steps to bring accusations before the tribunal of public opinion.
-either by speeches or letters inserted in the newspapers by men actively employed on relief work.


Wilfred Hanbury: Employed?


Edward Joseph Garland: Yes; "employed" is good in view of the discussion which we have had.
Such a proceeding is a glaring violation of the rules and shows a contempt for properly constituted authority.
The writing of a letter to my hon. friend here is a flouting of properly constituted authority, and so is the making of a speech in Calgary or in a camp or anywhere else.


Abraham Albert Heaps: Or in parliament.


Edward Joseph Garland: Well, we are not on relief yet.


Abraham Albert Heaps: Not yet is right.


Angus MacInnis: There is no civil authority.


Edward Joseph Garland: As to the replies received from the department, I have

the following report to make. I asked the question:
Have men been ejected from this camp for having registered complaints?
The reply from the department was a categorical denial in the form of a negative-no. I at once took this matter up witih my correspondents in Calgary and I am informed that the reply to the question, to use their own language and not my own, is "an absolute lie." They say:
Our committee have dealt 'with innumerable cases and this was confirmed by the foreman on our visit by the delegates.
In other words, men have been ejected for registering complaints, according to these people who have actually discussed the matter with the foreman. Moreover, when men are dismissed from camps we are told that adequate clothing is left them. On leaving the camp, I am informed, the men have to hand in all the .clothing that they received on loan, except bare necessities. In the provincial camps, those operated by the provincial government, the clothing becomes the property of the man if he remains in camp for thirty days, but in the dominion camp the clothing is always lent and has to be restored as soon as the man leaves the camp or is discharged therefrom. I asked another question:
Are men who have been ejected from one camp under this department refused entrance into any other camp?
I received from the department, signed by the deputy minister, this reply:
Yes, unless the district officer commanding is satisfied that there is reasonable probability of their behaving properly in future.
I am informed that there is not a single instance, in connection with these particular camps, of a man who, having been discharged from one camp, was ever permitted to enter another under this department at any time, certainly never under the name by which he had been employed previously. This is the information that has come to me and I am passing it on to the minister in the hope that he will take the matter up. In subsection (f) of Brigadier General Spry's document of war I find this:
No application or complaint should ever be made to the civil power except through the camp foreman or with his sanction.
After all these people might as well be Armenians under the care of the Turks of old when they are so ruthlessly bereft of every civil liberty, every decency -which we ought to expect among men. They cannot assemble to make their complaints vocally

Supply-Defence-Relief Camps
in the proper way, nor may they write letters to the press, and they are not allowed to make public speeches. They must submit themselves utterly to t'he discipline, the rigorous military discipline of the relief camp. Is it any wonder that the city of Calgary has put on record two resolutions under date March 7, following the discussion we had previously in this house on this very question? The covering letter to myself reads:
Calgary, Canada, March 7, 1935. Mr. E. J. Garland, M.P.,
House of Commons,
Ottawa, Canada.
Dear Sir:
Re: Single men's relief camps as operated by the Department of National Defence
For your information and attention I beg to enclose herewith copies of resolutions adopted by the city council from time to time, together with copies of correspondence which has taken place between responsible officials in this above connection.
The council in dealing with the communication of Brigadier D. W. B. Spry, D.O.C., military district No. 13, instructed' by resolution that this matter be directed to your attention with a request that the various recommendations as set forth in resolutions of the council, copies of which are attached hereto, be carried out.	_
For the purpose of more clearly outlining the council's wishes in this respect, please find set out hereunder formal resolution adopted by the city council on the occasion of its regular meeting held with date of the 4th instant, namely:-
"That council's previous action, together with copy of regulations governing camps, as furnished by Brigadier Spry, in respect of complaints re single men's relief camps, be directed to the attention of the Right Hon. the Prime Minister of Canada and Dr. G. D. Stanley, M.P., with a request that our recommendations be carried out.
Further, that copies of resolutions and' correspondence in this connection be forwarded to Mr. E. J. Garland, member for Bow River riding, with a request that the matter also receive his attention."
May I respectfully request, on behalf of the council, that the various matters receive your attention and consideration and that I be furnished with your reply thereto at the earliest convenience.
Yours truly,
J. M. Miller,
City Clerk.
The first resolution reads:
That this council authorize His Worship the Mayor to direct to the attention of dominion and provincial government officials the plight of single men at present in Calgary, formerly of relief camps, requesting that some provision for their maintenance be immediately undertaken and the present situation thereby rectified.
Further, that an investigation be immediately undertaken by the dominion and provincial governments concerning reported' unsatisfactory conditions at the various relief camps and a report thereon furnished this council.
Evidently the conditions are still unsatisfactory, and I would sincerely ask the minister to have a further investigation made into the whole question. This is the other resolution:
That the various features brought out in the report of the reporting officers before this council, re single men's relief camps, be referred to the proper authorities in an endeavour tc have better water supply afforded, better recreational features,-
Evidently the report was not satisfactory.

permission to the men to formulate their complaint committees to present their grievances and to permit of the men coming to the city at least within reason. That a report on these matters be received by this council from the proper authorities.
I have not much more to say on this matter other than to convey to the minister this paragraph from a letter received from the United Workers' Council of Delegates of Calgary under date of February 20:
When a man is fired in the afternoon and no transport available he has to remain in camp until next morning, then he has to pay fifteen cents for breakfast.
After the munificent remuneration or honorarium of twenty cents a day has been paid.
The men are given transport to Seebe crossing and then told to fend for themselves. This means that they must walk two miles to the highway or risk their lives by boarding a freight, and they can then be picked up for breaking the law. When these men come into Calgary we always try to get them sent to a provincial camp, but they bring out records and I can assure you they have all . their records except finger prints, and' about the most they can find against these men is that they are not satisfied with their conditions, and we believe they have every reason to be dissatisfied when they get a miserable pay of twenty cents a day for a day's work.
Last October we had thirty men in from Coleman and the following facts were brought out in the police court here when nineteen men were given thirty days in Lethbridge for obtaining a meal without means to pay for same.
1.	The men rvere transported to Frank and then told to board a freight to Calgary.
2.	The camp foreman Captain Coates fired the men on the advice of the straw boss without questioning the men whatsoever.
3.	The men were fired for complaining and' organizing and the camp rules forbid organizations for the purpose of adjusting grievances.
4.	Most of these boys had never been inside a police court before and the magistrate said he must punish them or many more men would leave the camps for the cities.
From a moral standpoint the camps should be abolished, but until they are able to do this they should at least pay a day's pay for a day's . work and then a man could at least be able to leave the environment of the camps and come to the cities for recreation once in a while.
Supply-Defence*-Relief Camps

Thanking you for your attention and quick action on our previous letter, I remain yours fraternally,
E. Le Vesionte,
Secretary-Treasurer.
I think I have given enough to the minister to justify my asking him once more, first of all without any further investigation to grant to these men the right of organizing their complaint committees. That is not too much to ask. These men are not criminals; they are not in penitentiaries. We are treating them as though they were, and this is not right. They should be given the right of protesting when they feel justified in doing so, and they should be permitted to organize in order to present their complaints in a proper fashion. Let them have an authorized and well known complaints committee in each camp; let them elect their men by popular ballot within the camp; let the chairman of the complaints committee be in touch with the local foreman or supervisor, and let him be recognized as spokesman for the men. If the minister will do these things, he will have much less trouble and the men themselves wlil be much better satisfied.


Ernest Lapointe: The conditions described by the hon. member for Bow River (Mr. Garland) are certainly appalling, and1 I sincerely hope the ministelr will give some satisfactory explanation and will repudiate the sentiments expressed in the letter from the commanding officer at Calgary. Those men, as my hon. friend says, are not criminals; they are working in the camps. They are on relief possibly through no fault of their own, and to say that they cannot give voice to complaints and expose their grievances is taking away from them the right which belongs to every Canadian citizen; they are not being treated like human beings. When they work in the relief camps they are not in penal institutions. I join my protest to that expressed by the hon. member for Bow River, and if the policy which is 'formulated by the commanding officer at 'Calgary is the one which prevails in all the other camps under the minister's department, I say that it is an insult to Canadian dignity and even to manhood.


Grote Stirling: The hon. member for Bow River started by referring to a resolution which was passed by the city council of Calgary on February 4 and which I believe was transmitted to Ottawa. On February 7, presumably by direction of the mayor or the city council of Calgary, the medical health officer for that city visited the camps referred to, and I propose to read to the committee the report which he submitted to his worship the mayor of the city of Calgary on February 8:

Dear Sir,-As instructed by you, yesterday accompanied by Mr. Cowey of this department and representatives from the United Workers' Council of Delegates, I conducted a sanitary survey of the camps established by the dominion government, Department of National Defence, under project No. 155. These camps have been established, I take it, for the express: purpose of clearing up undergrowth and thinning out trees in connection with activities of the forestry 'department. There are four camps: Seebe, Lusk Creek, Eau-Claire, and Barrier, and it is assumed that these camps will-at capacity-take care of 138 men in each camp. They are at the present time separate units, all under the supervision of Mr. Armstrong who officiates in the capacity of resident engineer. Visits were made to the four camps and I have the following to report:
The camps are situated on high, dry locations and I think the sites very well chosen, having regard to access of water and general satisfactory surroundings. They consist of huts in Which the men are housed; kitchen and dining rooms', bath house, stores, blacksmith shop, garages, and administrative office. It would appear that in the Seebe camp the aim is to house twelve men in each but. This, in so far as cubic capacity is concerned would be quite satisfactory but I might here suggest that possibly a much more satisfactory purpose would be served by limiting the capacity to ten men, having regard to the perforce location of the stove, tables and such like designed for the comfort of the men. It must be thoroughly understood that these camps were not organized until late in November, 1934, and: consequently, structural matters have not yet reached completion. In the three other camps other than Seebe camp, there is up to the present time makeshift bath or wash houses. This condition, whilst resulting in some inconvenience is rapidly being remedied. The bath houses presently under construction (and: which I was assured would be finished very shortly) are complete with shelves upon which aTe several wash basins and there are five showers. The shelves and the floor and walls of the showers are lined with galvanized iron and properly drained. Water is being laid on and from the layout I -would say would be adequate. Pumps, storage tanks, heaters and necessary plumbing for the bath houses -and kitchens are in process of completion and I think will result in a very nice situation. Washing machines are provided and adequate hot and cold water is to be supplied.
The kitchens and dining rooms were scrupulously clean; crockery ware is provided instead of enamel ware; dining tables are covered with white oilcloth and some of the kitchen tables are covered with galvanized iron. The quality of the cutlery is such that, in my mind, bids for a most attractive atmosphere. The party had the privilege of eating lunch at Seebe camp and indulged in the routine bill of fare. Personally I am all for it; the food was very nice, well cooked, ample and plain and sustaining withal. The kitchen equipment is practically all new; stoves, equipment and stores were perfectly clean. Kitchen waste is disposed of in gravel leaching pits; new pits are dug as required. The storage of meat is taken care of in usual camp manner by hanging from trees. Store houses and root cellars are being erected and ice is to be provided to care for perishable foodstuffs.

Supply-Defence-Relief Camps
The stores are well stocked with clothing and the men are furnished with new clothing by submitting that which is worn out. The clothing is designed for comfort and service.
It is the intention to provide a recreation hut and canteen facilities. Construction of this is completed in Seebe camp. For a time it is thought that profits from the canteen will go to purchase a radio for each of the four camps. _
The -water supply is from the Kananaskis river or wells, depending on the location of the camp, and in the last or Barrier camp, from a spring emanating from Barrier mountain. It is understood that this spring has formed the bone of contention, but I cannot see where there is any ground for complaint in this respect. There is an abundance of water and it is hoped to intercept the spring at a higher level and bring the water to the camp by gravity. All water supplies are obviously of the pure type.
It was suggested that some difficulty had obtained in having adequate water supply for bathing purposes in the past. I cannot see that this complaint is justified, for each camp approximates an adequate supply of water and, in the event of anybody wanting to take a bath, it would be only a matter of a few minutes to obtain water for such a purpose.
The Barrier camp is not as near completion as the other three. It was established on 20th December, 1934, and, therefore is right in the midst of construction activities.
I was given to understand that all four camps are to be of the same type and with the same facilities and conveniences. There is an abundant supply of firewood; the men are not required to take care of their own huts, other men being detailed for this service. There are men on night duty to attend to fires and maintain heat in the huts whilst the rest of the men are sleeping.
Toilet_ facilities are adequate; they are of the privy pit type, of good construction and adequately supplied with toilet paper.
To conclude I feel that at the present time, and allowing for present conditions, these men live under as near ideal surroundings as could be created. I asked as to the work required of them and was assured by several of them- to quote their own words-"there is nothing to it."
Medical attention is provided by a physician from Exshaw who visits all the camps. ' There is also a first-aid man on duty at each camp.
Respectfully submitted,
W. H. Hill,
Medical Officer of Health.
Doctor Hill is the medical officer of the city of Calgary, and this is his opinion, as a medical man, of the condition under which these men live and work. With regard to the complaint so strongly expressed by my hon. friend from Bow River (Mr. Garland), I would repeat that all the arrangements, the work in the camps, the living conditions, and what they have to do if they desire to receive this shelter, food, sustenance and allowance, is laid down and explained to the men. It was arrived at by arrangement between the dominion government and the provincial government; in this case the Alberta government signed the agreement under which these regulations are accepted. If the men do not consider that they are conditions under which they desire to live, they can leave. We had the instance referred to a few evenings ago by the hon. member for Fraser Valley (Mr. Barber) of a fit, husky young man aged twenty-five, who had boasted that he had not done any work and had no intention of starting now. In these camps are men of every description. There are men who desire to conform to the arrangements laid down and who are working happily under them. I myself have visited many of the camps. We have had representations from all types of citizens from all parts of Canada giving their opinion of the conditions under which these men live and work; they are satisfied with them. But of course in a body of men of such numbers, and under conditions such as we are passing through in this country-yes, and in the world-there is bound to be a certain number of trouble makers, and it is to endeavour to handle the trouble makers that we safeguard ourselves by the regulations laid down.
Mr. GRAY; Does the minister then approve of the letter of Brigadier General Spry?


Grote Stirling: When we realize that
agitators are coming into the camps for the purpose of stirring up trouble, the arrangements to deal with these agitators must be such as will properly handle them. To my mind it is a perfectly reasonable condition that the occupants of these camps should have every right to make their complaints to the foreman. If the man is not satisfied with the reply he receives from the foreman, it is perfectly proper that he should go to the superintendent. There is no doubt therefore that the complaints made by the individual reach headquarters and are there considered. But the regulations laid down have been arrived at by agreement between the dominion and the provinces, and the regulations must stand.


Mr. SANDERSON:: Regarding the document read by the hon. member for Bow River, apparently under the signature of Brigadier General Spry, a departmental document, one that is posted up in the camp, does the minister take the responsibility for those orders? I assume that the order comes from headquarters at Ottawa. Am I right?


Grote Stirling: Will my hon. friend proceed to make his remarks? Then I shall reply.

Supply-Defence-Relief Camps


Frederick George Sanderson: My question is a
simple one. I do not want to make a speech, but I ask the minister if he assumes responsibility for that document.


Grote Stirling: Yes, Mr. Chairman, I
accept responsibility for that document.


Frederick George Sanderson: Then does the minister approve of those regulations?


Grote Stirling: Obviously if I accept the document I approve of it.


Edward Joseph Garland: I am sorry the minister did not read the letter from the other delegate who also visited the camps. I am sure it was an oversight on his part. Let me, however, touch for a moment on his closing words. He referred to a young man, cited by the hon. member for Fraser Valley, a man twenty-five years of age, who, according to the statement, said he had never worked and never would work. A shame, of course. But does the minister overlook the fact that that boy was just past nineteen when this depression hit him and he could not get a job? After all when one has been out of a job four or five years in the formative period of life, when indelible impressions are made, is it any wonder that he has become embittered against society if it has nothing more to offer him than relief camps? I need make no excuse for him, but it is a wonder that there are not more like him. Let me say that the reason I asked the minister to permit the formation of recognized complaints committees, in touch with the foremen all the time, was to prevent the very danger he foresaw, that of agitators getting in and undermining the morale of these men who under present conditions have no proper outlet for their complaints. The minister says they may complain to the foreman. Let me give him a statement that I have from these people who have investigated the matter.


Wilfred Hanbury: Who are they?


Edward Joseph Garland: I shall tell you in a moment.
The foreman stated that he only saw one man at a time with a complaint, and that man was invariably fired. The superintendent stated he never overrode a foreman's decision. We (the United Workers' Council Delegates, of Calgary), have handled hundreds of cases of men fired or quit, and as yet have not met with one who has had a chance to appeal to military district 13. Our delegations have appealed several times to military district 13 for these men to be reinstated, but on each occasion have been met with blank refusal and we have eventually got them accepted by the provincial relief commission.

So much for that statement, I now turn to the report of the other delegate. He received permission to visit the camp at the same time, and in company with Doctor Hill. Hon. members will note that Doctor Hill, according to the minister's statement, was to report on the sanitary conditions. I have raised no complaint, nor do these men raise any complaint about the sanitary conditions in the camp. They are complaining about the Prussian character of the discipline'-the un-British type of discipline.


Mr. STITT (Selkirk):: They want the right to complain.


Edward Joseph Garland: The second report is as follows:
Labour Temple,
229 Eleventh Ave. East,
Calgary, Alberta,
_	February 8, 1935.
A. Davison, Esquire,
Mayor, City of Calgary.
Your Worship:
Following up my visit to Seebe with Doctor Hill I beg to inform you that I found the following conditions:-
Notice how fair the man is, all the way through.
The general complaint was shortage of water, the supply at Seebe camp has to be hauled from the river. A pump and pipe line is being erected, so this difficulty should shortly be overcome; then there will be hot and cold showers available. There were plenty of wash baSiris of a very small shallow type for ablution purposes and a large galvanized tub for bathing and laundry purposes. A new washing machine was available and I was informed that this had been in the store since the camp opened in November last but only produced for use three or four days ago. The wash basins also had been issued late last week.
Upon entering camp men are supposed to get an adequate supply of clothing, some of the men stated they had been in camp three weeks or a month and had not yet received the requisite clothing.
The food was plentiful and' of good quality; the dining rooms were excellently fitted up and comfortable; the wash houses in Lemusk, Eau-Clare and Barrier camps were just marquees and new huts are being erected to replace these. The water supply at the latter camp was just a spring at the foot of the mountain. A hole has been dug and boarded for storage of water but appears totally inadequate.
The authorities appear to be doing the best they can to make the men comfortable, but considerable time is needed yet. There is a first-aid man in charge of the hospital cabin in each camp and a full first-aid kit available. The doctor visits the camp twice a week and men have free access to see him.
The principal complaints were as follows:- The camp foreman refuses to see more than one man on any grievance or complaint. If a man complains he is invariably fired. The superintendent stated that they would allow no

Supply-Defence-Relief Camps
agitators or any organization of any kind. The foreman's word is final and the superintendent never overrides the foreman in a decision.
When fired the men have to hand in their clothing, except bare necessities. They are transported to the level crossing at Seebe and left to fend for themselves. Should transport be available they sometimes give the men a ride to Cochrane and on one occasion to Calgary. There is little or no recreation available and the men would welcome a radio, football, games of any description and particularly a supply of good books.
The pay is twenty cents per day when work has been done. Hours of labour are eight to twelve and one to four-thirty p.m. The foreman stated that a fair day's work was expected for what the men received, and no loafers would be tolerated. In my opinion the trouble has been caused through taking men out to the camps before proper facilities were available, and that the whole of the trouble could have been obliterated if the men had been allowed a proper grievance or camp committee.
Respectfully submitted on behalf of above council,
Fred Peat,
President.
The minister has not made an adequate answer at all. The only -answer he has given is that he personally regrets this tyipe of rigid, penitentiary discipline as necessary in our relief camps. I resent that attitude on the part of the minister. I repeat what I said before: these men are not criminals; they are fellow Canadians. They are men who through no fault of their own are out of work. They are ordinary flesh and blood men born in this country, for the most part, and they deserve to be treated as you would expect to be treated and as I would expect to be treated. They do not deserve to be treated in this way. I protest; that is all I can do.


Mr. ELLIOTT:: When was the regulation made? As I understand it this is a departmental regulation, known as letter No. 4, sent from headquarters in Ottawa to all the relief camps in Canada. Am I correct in that? If so, when was it made and by whom?


Grote Stirling: I take it the hon. member is referring to the standing instructions issued for all relief camps.


John Campbell Elliott: Quite right.


Grote Stirling: Those are the instructions for the administration of unemployment relief camps. So far as the present instance is concerned, they were agreed to by Alberta and accepted as the basis of our joint operation. The dominion comes into the picture through its assistance to the province.


John Campbell Elliott: Surely the minister understands my point. The document states:
With regard to the method of registering complaints, the following are the regulations in this respect as laid down by the Department of National Defence for all camps in the dominion.
I am asking when that was laid down. It is not an arrangement between Alberta and the Department of National Defence; it is a set of regulations laid down by the Department of National Defence for all relief camps in the Dominion of Canada. I point out that it is not an agreement between the province and the camp; do not let us get off on that angle. Apparently it is prepared right here. By whom and when was it prepared?


Grote Stirling: I have not seen the document the hon. member is reading, but I presume-


Frederick George Sanderson: The minister has already assumed responsibility for it.


John Campbell Elliott: I would ask the minister to look at paragraph 4 of the document I have handed him, and he will see what I have read. These regulations have been made here, and they apply to all camps.


Grote Stirling: Yes. That which follows the bracketed letter (a) is one of the regulations laid down for the conduct of the unemployment relief camps.


John Campbell Elliott: How about the rest of it?


Grote Stirling: Then there follow (b), (c) and (d).


Ross Wilfred Gray: All part of the regulations?


Grote Stirling: Yes, part of the regulations.


John Campbell Elliott: Beginning with paragraph 4, to which reference was made by the hon. member for Bow River, would the minister tell me when the regulations were put into effect, and how? By whom were they prepared and by whom were they recommended to council? Was an order in council passed, or what is the procedure by which the people in the camps are brought under that system of regulation ?


Grote Stirling: The copy I have before me is from the Department of National Defence and is dated April, 1933.


Ian Alistair Mackenzie: Was there an order in council?


Grote Stirling: No, not that I am aware of.


John Campbell Elliott: Then under what power or authority was a regulation of that kind issued?


Grote Stirling: The power behind it, 1 take it, is the bill which was passed last

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session, respecting relief measures. It was passed by this House of Commons in 1934.


John Campbell Elliott: Oh, it is part of the provision for peace, order and good government; is that right?


Grote Stirling: No; it comes under the relief measure to which I have referred.


John Campbell Elliott: That is just about what you would expect.


Mr. SPENCE:: That is right, keep on talking.


John Campbell Elliott: I would suggest quite the reverse for my hon. friend.


Ian Alistair Mackenzie: Keep
silent.


John Campbell Elliott: Could the minister state if it was brought before the council, or is it just issued under the act?


Grote Stirling: I could readily find out, but at the present time I am not aware whether or not it was.


John Campbell Elliott: Could the minister tell us who prepared it?


Grote Stirling: It was prepared in the Department of National Defence; I cannot name the individual.


John Campbell Elliott: There was one copy sent out to each of the different camps? By whom was it sent, and by whom was it signed?


Grote Stirling: A copy of the regulations goes to each project.


John Campbell Elliott: By whom were they
signed?


Grote Stirling: They would go out as regulations, but would not be signed; they would be regulations of the department.


John Campbell Elliott: Did they go out from the Department of Labour or from the Department of National Defence?


Grote Stirling: National Defence.


Mr. GORDON:: After consultation with the Department of Labour.


John Campbell Elliott: Could the minister produce the letter which was sent with them to the different camps? It is called letter No. 4, so it is likely a departmental letter.


Grote Stirling: I am afraid I have not got any such letter as the hon. member mentions.


Ian Alistair Mackenzie: Who
would send them out in the normal course to the district officers commanding in the various provinces?
rMr. Stirling.]


Grote Stirling: The officers of the Department of National Defence.


Ian Alistair Mackenzie: Which
specific officer?


Grote Stirling: Under the administration it would be the adjutant general.


Ernest Lapointe: Then it becomes clear, Mr. Chairman, that this is the work of the Department of National Defence entirely, that instructions have been sent out by that department. They were not included in an order in council or anything of that sort. My hon. friend suggested at the opening of his remarks that this was part of an understanding with the province, but clearly he was mistaken in that view. This is merely a direction by the Department of National Defence and it is quite important that we should know it in a definite wray. If these instructions as expressed in the letter of Brigadier Spry have been submitted to the province of Alberta, there should be a record of that submission, and the minister ought to be able to show that the province has accepted such regulations or instructions. Otherwise I do not think it is fair to say that the provincial government are responsible for instructions such as are conveyed in that letter. If they are not responsible, then it is wholly the work of the National Defence department, and I would implore my hon. friend the minister not to attach his own responsibility to those instructions, but to cancel them as quickly as he can.


Abraham Albert Heaps: On several occasions, if my memory serves me rightly, we were informed that there was no military discipline in these relief camps. In past sessions, if I am not mistaken, that information was given to this house.


Cameron Ross McIntosh: Seven times seven at least.


Abraham Albert Heaps: Now we are informed through documentary evidence to-night that there is a most rigid form of military discipline in these relief camps under the jurisdiction of the Department of National Defence. Personally I regret exceedingly that the minister has taken the stand that he has here to-night, and I think that on due reflection probably the minister himself will regret it; for if he upholds what is contained in the document that has been read here to-night it means that he is in favour of suppressing the very liberties of a great section of the younger generation in the Dominion of Canada. I think that the type of person who through no fault of his own is compelled to go into the relief camps ought to be dealt with a little more sympathetically than is evidently the case from the evidence

Supply-Defence-Relief Camps
that has been submitted here to-night, and as many of us have known during the past few months. In many instances all the family connections of these young men have been broken up and the family separated much against their will; these young men are taken away from respectable homes, young boys of eighteen and nineteen, and compelled by economic necessity to become inmates of these camps. When a young boy goes into a relief camp the last thing he ought to be subjected to is that rigid military discipline which it has been disclosed in the communications read to-night exists in the camps.
I think it was a very unfortunate remark the minister made here to-nigbt when he said that if these boys do not like it they can leave. In the first place it is economic necessity that has driven them into these camps, and then after the almost inhuman treatment they received at some of the camps they are told, if they do not like it, to get out. These boys, mostly young men, go into these camps not because they want to, -but because there is no alternative for them. The government provide these cam-ps for the young men, and mind you this is the younger generation of Canadians whom we expect to take our place in the future and help build up a country that is worth while. We have been told, of course, that in some respects they are well treated. I am not going to deny everything that the minister has said in so far as that communication is concerned, but the complaint is not about the sanitary conditions of these camps. The complaint is chiefly against the suppression of those liberties which had the minister himself been in opposition I think he would have been the first to champion if this complaint had been brought to his attention.


George Gordon: What liberties does the hon. member suggest have been withdrawn?


Abraham Albert Heaps: I will read section (f) again:
No application nor complaint should ever be made to the civil power, except through the camp foreman or with his sanction.
In other words, an inmate of one of these camps is deprived of communicating with a newspaper; he is deprived of the right of complaining to the municipal authority, deprived of the right o-f going into the city and speaking of conditions as he has found them; he is deprived of the right of communicating even with a member of parliament.


Mr. BEAUBIEN:: Or even with his mother.


Abraham Albert Heaps: Possibly that is so as well. What I am complaining about is this. We are putting in these camps the younger generation of Canadians and we might reasonably hope that they would receive their good training in Canadian citizenship, but when they get to the camps they find an iron clad rigid military discipline which hardly al'lo-ws them to call their souls their own, and they have to submit to this for twenty cents a day and their keep. Leaving aside for the moment the amount of money they receive for the services they render, what we are stressing at the moment is the rights and liberties of the individual of which these young men are now being deprived. I would urge upon the minister that in these matters of unemployment and unemployment relief the military authorities should not be allowed to be supreme over the civil authorities or in any way to deprive these young men of their liberties. If I were in the position of the minister and for the first time- a document such as the hon. member for Bow River has read to the house to-night was brought to my attention, I would at once repudiate the document entirely, and not only would I repudiate it, but I would fire clean out of the service the men who are responsible for such a thing. The individual possesses certain rights, and when those who are responsible to the civil authorities send out such a document they must know that it is going to create a feeling of hostility. Apparently they feel that in some way they are superior even to this parliament. No document of that type could stand the scrutiny of any body of honest citizens. For the sake of parliament, for the sake of the minister and for the sake of the young men who are compelled to go to these camps, I think something should be done right now in this house to repudiate entirely the document. The men in these camps should be given a fair chance in life.
Mr. SUTHERLAND I think I should say a few words on this question, as this system of camps was inaugurated while I was head of the Department of National Defence. The minister has sketched the beginning of the movement and indicated why these camps were started. Back in 1931 and 1932 there were a large number of younger citizens who were moving around from one place to another and in many instances were getting into cities which were not their homes. There was considerable difficulty in looking after these young men and in time it became an acute problem. During the summer they were moving around on the trains and there were many accidents. I am told that practically all the hospitals in northern Ontario had some of these young men as patients. This scheme was evolved to give them some
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place to go. The camps were not started with the primary idea of giving employment for wages; they were started as a temporary measure to provide comfortable surroundings, clothing and food. The allowance of twenty cents per day which was given was in no sense a wage; it was only a little extra pocket money to buy some of the things which were not issued.
As I say, this scheme was started in 1932 and it wen-t very well for a couple of years and in most of the camps everything is going very well to-day. The former Minister of Justice (Mr. Lapointe), who spoke on this matter, is familiar, I think, with the situation in his own city and in the camp at Valcartier. To my knowledge there have never been any complaints of this type in connection with that camp. Everything goes along smoothly, and while I was in the department I received many expressions of appreciation from the people down there as to the way in which the department was looking after this great problem. The young men at Valcartier come from a large area in Quebec. There is a large camp at Halifax, at the citadel. This camp has been in operation for about three years and nothing of this kind has occurred. There is a large camp at Petawawa, Ontario, at which there are young men mostly from Montreal. There are two camps at Kingston and other camps in northern Ontario. No complaints of the kind referred to to-night have been heard from the Ontario camps. The hon. member for North Winnipeg (Mr. Heaps) referred . to inhuman treatment, but I do not think that term can be applied to these camps. I do not think there has been anything even approaching inhumanity.
These camps are different from the ordinary labour camps. The men in the ordinary labour camp are hired for some certain purpose and the aim and object of the employer is to get work out of his men. The employees quite rightly and properly ask the right to organize in order that they may present their side of any difference which may arise. In these camps everybody is working with the same end in view. The Department of National Defence has started these camps with the sole object of helping these men. There are not two sides of opinion in the camps. Naturally the men want the best they can get, and when parliament passed the money to provide for such camps, that was the sole object in view. While I was in the department we had trouble at only one camp, the one located at Long Branch near Toronto. This trouble was caused by agitators getting into the camp and trying to create an organiza-
tion where one was not necessary. There was some difficulty for a short time, but I maintain that there has been nothing out of the way in any camp, and especially nothing of the nature referred to to-night.
A committee inspected these particular camps and they admit that the food and surroundings are good. Some complaint was made about the water at one camp, but as I understand it the camp was in process of construction. I think it was said that measures were being taken to deal with the matter. The clothing furnished was the same type of clothing as we all wear, substantial and warm. The food bought for the camps is just as good as we get in the parliamentary restaurant, although it may not be served up with as many frills. The fact that good substantial food is furnished has been borne out by the statements made to-night. I do not think the department can be criticized, because it is only in this particular ease that I have heard of any complaint of this kind. I have heard one of the hon. members for Vancouver bring up matters in connection with the camps in British Columbia, but I think it must be admitted that when you have a number of young men in a camp they are bound to be full of life and vim and will have opinions of their own. This will happen no matter how the camps are run. If the men are warm, if the clothing provided is good and the food substantial, I do not think there can be anything to complain of. The camps are not permanent; it is not as though the .men were going 'to be there for some time and had to build up some system of rights. Instead of having this odium cast upon the department and its officials, I think they are entitled to a great deal of praise for the manner in which they have handled the matter. No one knows better than I do the difficulty and anxiety in connection with this work. I presume that there sure over
20,000	men in the camps in the winter and some 12,000 in the summer.


John Campbell Elliott: I do not think that this committee is concerned about the food or clothing or water; that is not the complaint. Of course, when camps are being laid out there is always a little difficulty at the start so far as the water supply is concerned, but that is not the difficulty here. Perhaps my hon. friend would answer this question. Does he know who made these regulations, who issued them, when they were issued and whether or not all the relief camps in Canada are subject to them? If I remember rightly, the document which my hon. friend was good enough to let me look at says:

Supply-Defence-Relief Camps
"The following are regulations as laid down by the Department of National Defence for all camps in the dominion." The question that interests me, and I believe it interests a great many members of the committee, is this: When were these regulations made, by whom and on what authority, and did the minister know about them?


Mr. SUTHERLAND:: My hon. friend has been in charge of a department and he knows that if something is done in the department the minister takes responsibility for it; that is his job and he does not fall back upon someone under him and blame that subordinate. While I was in the department I took responsibility for everything that went on there; that was part of my job, and if it was wrong I took responsibility for it. I did not look for someone to put the blame on, and I am sure that my hon. friend knows very well that there have to be regulations in connection with a vast scheme of this kind, where young men are constantly coming into and going out of camps. A ou must have regulations.


John Campbell Elliott: How long have these regulations been in force?


Donald Matheson Sutherland: They were in force before a single man was ever in the camps. There had to be preliminary regulations, though I have no doubt at all that from time to time they have been amended and added to as necessity arose.


John Campbell Elliott: I want to get it clearly because I want to be absolutely fair to the minister and the ex-minister. Do I take it that these regulations were issued before the camps were laid out, before any difficulties arose, and were sent out to the various camps by the department as being what they considered proper regulations approved by the minister in charge?


Donald Matheson Sutherland: Undoubtedly the
regulations would be sent out before the camps were started at all. I am not prepared1 to say that these precise regulations were sent out from the first, because they would have to be amended from time to time. I am absolutely of the opinion, in spite of what some hon. gentlemen have said, that there is nothing wrong with regulations of that kind. You could not start a camp of that kind and allow an agitator to go in among these young men whose minds are not fully developed and who can be the prey to some agitator in regard to anything-the water, for instance. Some man might have been dismissed for perfectly good reasons and he would be made a martyr of, and
these young men would be gathered together and addressed by some agitator and so trouble would start. To guard against such a possibility some regulations must be put into force. These regulations are merely intended to be helpful; they are not meant to be absolutely lived up to as would a military order in time of war; there is nothing of that kind. But there is in connection with these camps necessity for planning ahead as far as that is possible.


John Campbell Elliott: Time is passing and I should like to get into my head exactly what happened with regard to these regulations. The minister makes it clear now that he approves of them.


Donald Matheson Sutherland: I say I accept responsibility for them.


John Campbell Elliott: The minister said he approved of them; he saw nothing wrong about them. I want to know whether he approved of them before they were sent out.


Donald Matheson Sutherland: I do not recall that all were brought to me. Some of them I remember were brought to me and I might mention one in particular. The former Minister of Labour, Mr. Heenan, brought up the question regarding the making of speeches in the camps, and he cited a regulation which forbade people going into camps to make speeches. I looked into the matter and found that there was such a regulation and I changed it, and on the floor of the house I informed him that it had been changed. I had heard of that regulation and thought that it would probably be better to have it changed.


John Campbell Elliott: Would anyone else than the minister in charge of that department have authority to send out to all relief camps in Canada such regulations? Would anyone else have authority to send out such regulations without consulting the minister and having his approval?


Donald Matheson Sutherland: Whatever was done the minister is responsible for; the hon. gentleman knows very well that it is so. You cannot trace back to find out what an office boy in the department might have done; it is the minister you have to deal with.


Edward Joseph Garland: This was not an office boy.


Angus MacInnis: Is Brigadier General Spry an office boy?


Donald Matheson Sutherland: I am citing an instance; I am not dealing with that particular case. The ex-Minister of Public Works (Mr. Elliott) wants to trace back somewhere in the
Supply-Defence-Relief Camps

department to the man who wrote a particular letter, and I hold that that is not necessary at all, because there are responsible ministers in charge of departments, and it is their business to be responsible for everything that goes on in the department. I accept responsibility for anything done while I was there.


John Campbell Elliott: I think it is only fair to the committee to make it clear that Brigadier General Spry is not responsible for the regulations. As I understand it, he is the officer commanding the district, and he merely states, "I am sending you regulations that have been forwarded to me." There is no responsibility resting on ihim, so far as I can see. I do not at all agree with the exMinister of National Defence, that he is responsible for what someone under him did without his authority and if he did not know about it. If someone without his authority sent out something that he knew nothing about and did not approve, that is a different matter altogether, and he knows that perfectly well. But he now approves of it, and I take it that he approved of it before it went out. But I want him to be frank with the committee.


Donald Matheson Sutherland: I cannot understand exactly what the hon. member does want. In this particular case he evidently wants to find somebody that wrote a letter and to blame him. In most cases-and I have very often heard of this being done-he would only be looking for an opporunity to blame the minister for what happened in his department. That is the general rule. A minister, if something goes wrong in his department, is undoubtedly to blame. I want to go further than this and to say that I cannot see anything particularly out of the way in having among the regulations one of that kind, because it is impossible to run such a camp if you have some organization meeting there and saying: We will go up and complain about something to-day and about something else to-morrow and so on. That would be an impossible situation and make the whole camp and system a prey to agitators. I appeal to the good sense of the committee that the only proper method on which to run such a camp is to impose regulations of that kind. The proof of what I say is that all through eastern Canada and west as far as Calgary the same system has been in force without any trouble arising. It is not only the Department of National Defence that has had these camps run in the same general way, but the Department of the Interior has had similar camps. I must be frank; I do not want to say that the same regulations are in force 
there because I do not know, but the same rate of wages and the same general system of supplies have been in force. I cannot see that there is anything out of the way in what has been the subject of discussion tonight.


John Campbell Elliott: I want to say just a word in answer to the minister. While I have and I believe the house generally has the greatest respect for both the ex-Minister of National Defence and the present minister, I was surprised to hear first of all the present minister defending these regulations and I am surprised to hear the ex-minister continuing to defend them. AfteT hearing them read, and I heard them to-night for the first time, while I 'believe we must have discipline in our relief camps as well as in other places-


Donald Matheson Sutherland: The hon. gentleman does not know the situation or the background involved; I do not think he has a very clear idea of the situation.


John Campbell Elliott: One does not need to know the situation to realize that regulations such as have been read here to-night and are contained in that document are surely not proper, decent regulations to send out to govern the conduct of men in these relief camps. That is my very strong impression, and I believe it is the impression of every member of this committee. My knowledge of relief camps is not very extensive, but I know something about them, and while I understand there must be discipline, I believe the men should have a right to submit a grievance, if they have one, to some authority and not be gagged.


Donald Matheson Sutherland: They are not gagged; they have a right to submit their complaints.


John Campbell Elliott: I should like to know, if I may, just when these regulations were issued. I should like to see the first order that was sent out instructing that regulations of this kind should be sent out to all the camps. I suggest to the present minister, the ex-minister and all other ministers that these regulations should be revised to the extent of cutting out completely the clauses that sound to me so very objectionable, starting at number four in the document that we heard read to-night.


Mr. STITT (Nelson):: If the lawyers
have finished examining the minister and the ex-minister, I am just wondering whether it will be in order for a merely practical man to make some suggestions. I have had a good deal to do with camps both military and otherwise, such as mining, lumbering and all

Supply-Defence-Relief Camps
kinds of camps, and I have visited several of those so-called relief camps. We hear a great deal about this twenty cents a day, and I do not think some hon. gentlemen are treating this matter as fairly as they might. I understand that it costs about $34 a month to bake care of each man in the camps, and I think the sum involved should be referred to as $34 a month and not twenty cents a day. The department should keep that fact before those men, and if they were to do so theTe would be less misunderstanding and less trouble.
I can quite understand that regulations are necessary. I have lived under the king's regulations and orders, and having served in both the Canadian and the British army, I have suffered through those regulations as have many more. But it just occurs to me in regard to this matter of complaints, that nobody can deny a man the right to make a complaint if he finds that something is wrong. After all we are Canadians. I would suggest to the minister that I do not think it is up to the men to run around looking for a foreman to whom to make complaints. When I was in the army my turn sometimes came to 'be orderly officer and I had to go through the dining room and other rooms where the men were and ask them if they had any complaints. If they had found sand in the sugar or stones in the beans or a piece of hoof in Flavelle's corned beef, of course they would tell me. I think if a little diplomacy were exercised and the foreman would walk through the camp at meal hours and say: "Well, boys, any complaints?" and show he is human and working with them, a great deal of this trouble would be avoided. I have a relief camp in my constituency; it is not under the Department of National Defence; it is a federal-provincial camp. I know the foremen there and they never have any trouble with their men because they are human and the impression they create with the men is that of working with, not against them. A little humanity, a little common horse sense, is all that is needed.
We are told that these are not military camps, but all I can say is that from the regulations read it would appear that they are. If they are to be run as military camps, they should be made so in every sense of the word. But I would suggest that the fact be kept before these men and the country generally that they are working for $34 a month and not for twenty cents a day. The government I understand are bringing in a minimum wage bill, and I hope when they do introduce it they will apply it first to their 92582-129
own camps, because I am not very proud of this wage of even $34 a month. We should pay the men a fair wage and demand a fair day's work.


Richard Burpee Hanson: Then
they would be out of work.


Bernard Munroe Stitt: No, these men are
human and if they are paid a fair wage they will probably do a fair day's work. I hope the time is not very far distant when this happy condition can be brought about and a few of the suggestions I have made in all sincerity will be passed on to the men in charge of the camps.


Mr. GERSHAW:: Before the discussion
started on this phase of the problem, I desired to ask the minister a question on a different aspect of the matter. The discussion has rather thrown a new light on it. From the larger cities one can understand how it is quite easy for these single unemployed homeless men to get into the camps, but it is a problem in the smaller cities and towns. A large number of young men drift around from place to place looking for work; either they cannot find it or the work does not last long and they are again on the streets. They go from door to door begging for meals and help and thus become a burden to the citizens and to the municipalities; for of course they must be fed. Then in connection with the trains, especially on the main lines, these boys are going back and forth all the time at great danger to themselves and great annoyance to the train crews. The whole situation is very unfortunate. My question is: when the cold weather comes and they cannot travel, how can men who find themselves stranded in the smaller cities or towns get into these unemployment camps?


Grote Stirling: By presenting themselves at the camp.


Frederick William Gershaw: But they are long distances from the camps. They are a burden on the municipality where they happen to be and it is imposible for them to get to a camp.


Grote Stirling: My hon. friend surely
realizes that this is a duty which is incumbent on the provinces. First of all the province receives the information, presumably through the municipality concerned. When the province cannot handle the matter it comes to the dominion government and asks its assistance. Then by agreement under certain methods laid down the dominion government comes in and helps. But it does

Supply-Defence-Relief Camps
not remove from the provinces the responsibility of caring for these people.


Some hon. MEMBERS:: Carried.


Angus MacInnis: The unemployed need
something more than grunts from the opposite side of the house; a little help would be in order. The minister has stressed, and it has often been stressed here, that these men can take their complaints to the foremen. I find in these regulations the following:
(b) If any man has a complaint or accusation to bring against a member of the supervisory or administrative staff, such complaint should be laid before the camp foreman, who, if necessary, will transmit it to district headquarters or camp superintendent.
As a matter of fact the attitude towards these men is exhibited in these regulations. They have no rights in the matter. They are in the camp because there seems to be no other place to put them. Along with the hon. members for Vancouver 'Centre (Mr. Mackenzie) and Vancouver North (Mr. Munn) I had an opportunity before coming here of meeting some of these men. They made complaints to us that have been substantiated by the statement of the hon. member for Bow River (Mr. Garland) tonight. Not only did the men make the statement on that occasion, but I had occasion myself to intercede with the authorities in Vancouver to reinstate some of them. The moment a man makes a complaint to the foreman the foreman fires him. He is out on the road before the day is finished.


Donald Matheson Sutherland: I do not think the hon. member can back up that statement.


Edward Joseph Garland: My answer to the minister is that I had already read out of the records to-night before he came in-


Donald Matheson Sutherland: That is one case,
an allegation by someone in Calgary.


Edward Joseph Garland: It was from someone who investigated the complaints, involving some thirty men.


Donald Matheson Sutherland: But the hon. gentleman states that it is the usual thing that if anyone complains out he goes, which is lot so.
Mr. MadlNNIS:	That was the statement
made before us. The man was anxious to have his statement investigated as to whether or not it was true, and no investigation has yet been held.
TMr. Stirling.]


Ian Alistair Mackenzie: Hear,
hear. He asked for one.


Angus MacInnis: Further on the instructions say:
Camp foremen are advised to invariably have another member of the supervisory Staff present as a witness to all proceedings.
Yet while the foreman is advised invariably to have another person present, the man making the complaint is not allowed to have anyone present who may substantiate his statement.


Grote Stirling: Can my hon. friend
substantiate that statement?


Angus MacInnis: It is here in the regulations. Let me read the regulations signed by D. W. B. Spry, D.O.C. military district 13:
(e) It is the duty of the camp foreman to investigate all complaints and, when receiving complaints for transmission to superior authority, to point out to the parties concerned any irregularity in the means they employ in seeking redress. In hearing complaints or statements, et cetera, camp foremen are advised to invariably have another member of the supervisory staff present as a witness to all proceedings.


Grote Stirling: If I may interrupt, I understood the hon. member to say that the man making the complaint might not have anyone with him. That is the statement I asked Rim to substantiate.


Angus MacInnis: I shall do that. Regulations (a) and Ob) read:
(a)	One of the fundamental and most necessary rules for the administration of unemployment relief camps is to forbid' anything bearing the appearance of combination to obtain redress of alleged grievances. Appeals for redress by means of any document bearing the signature of more than one complainant, or by organized committees combining to make a complaint, are strictly forbidden.
(b)	If any man has a complaint or accusation to bring against a member of the supervisory or administrative staff, such complaint should be laid before the camp foreman, who, if necessary, will transmit it to district headquarters or camp superintendent.


Grote Stirling: But it does not say that no friend may be with him.


Angus MacInnis: But if there is more than one it is a combination.


Some hon. MEMBERS:: Oh, oh.

Questions


Angus MacInnis: That is what it says, and it means it. Further on it says:
(c) If the camp foreman neglects or refuses to attend to a complaint, the complainant may bring the matter to the notice of the district headquarters or camp superintendent.
How is the man to know-


Mr. GOTT:: Mr. Chairman, I call to your
attention the fact that it is now eleven o'clock.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Monday, March 25, 1935