1936-05-22

[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Mr. Speaker, in accordance with the rules of the house I bow to your ruling and 
withdraw the eight words objected to in my speech of April 27, namely, "before the matter was submitted to his colleagues."


[Stage Direction]
On the orders of the day:
Mr. DAVID SPENCE (Parkdale):: I should like to direct a question to the Secretary of State (Mr. Rinfret). I wish to ask whether the government have given consideration to the resolution introduced some time ago by the hon. member for St. Mary (Mr. Deslauriers) with regard to giving some relief to property owners in urban centres. The minister accepted the resolution at that time and said the government would give consideration to the problems of these people who find themselves in difficult circumstances. I know there are many cases of distress; many people are losing their homes because of high taxation and high interest rates. I assume the government have given consideration to this matter, but I should like to know definitely. I am asking this question to-day because I have a letter from a lady in my own riding telling me that her husband has been sick in bed for the last fifteen months, that she is forced to pay seven per cent on her mortgage, and that she is having some difficulty. I think some consideration should be given these people, and I hope something has been done by the government.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: The Secretary of State (Mr. Rinfret) is not in his seat at the moment, but I am sure he will take notice of the hon. gentleman's question and reply to it at another sitting.


David Spence: I should be glad to have the Prime Minister give us some assurance in the matter.



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata):	I should like to ask the Minister
of Railways and Canals (Mr. Howe) if it would be possible to table at the next sitting a copy of the letter signed by the then Prime Minister on May 31, 1933, with regard to the $60,000,000 loan to the Canadian Pacific Railway Company, and also the memorandum and order in council passed in that connection during the following fall.

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Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, as a matter
of privilege I desire to say that when I stated that the letter to which reference has been made was shown to my colleagues I was not relying upon my memory. The record of the evidence given before the banking and commerce committee between the 6th of March, 1934, and the 14th of June, 1934, contains a clear statement that the letter was communicated to my colleagues before being written.


Mr. POULIOT:: The right hon. gentleman
does not deserve a prize for his good memory.


Richard Bedford Bennett: Mr. Speaker, as a matter
of the privileges of the house, has it really got down to this? Has this to be tolerated?
I put it to you, Mr. Speaker. I think you have done your duty as well as possible under the circumstances, but I ask again, is this sort of thing to be tolerated?



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. RALPH MAYBANK (Winnipeg South Centre):: Before the orders of the day are called I wish to ask a question of the Minister of Railways (Mr. Howe). Is the minister aware that the private railway interests which are planning an invasion of the territory now served by Canadian National Railways in northern Quebec are endeavouring to secure public moneys set aside for unemployment relief to carry out their projects? And will the minister state whether funds which come from the dominion treasury can be diverted to such purposes as the creation of facilities which would duplicate railway lines already owned by the dominion?


Hon. C. D. HOWE (Minister of Railways and Canals):: In answer to the hon. member's first question, may I say that the government has no knowledge of that kind. In reply to the second question, there is no item in the federal estimates that can be used for the purpose the hon. member states.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Customs tariff-267. Crude petroleum not subjected to any other process than natural weathering and removal of foreign matter and water, when imported by oil refiners to be refined in their own factories:-
(i)	-8155 specific gravity (42[DOT] 0 A.P.I.) or heavier at 60 degrees Fahrenheit: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(ii)	Lighter than -8155 specific gravity (42-0 A.P.I.) at 60 degrees Fahrenheit, per gallon: British preferential tariff, 4 cent; intermediate tariff, J cent; general tariff, 1 cent.
Richard Bedford Bennett: Mr. Chairman, I rise
merely to make a few observations with respect to this item because it has been the subject matter of much discussion, and it is well that the circumstances under which the matter was referred to the tariff board should be upon record in Hansard.
It will perhaps be recalled that in October, 1930, the government of the day, having raised the tariff on gasoline and petroleum products, obtained from British American Oil Company, Limited, Canadian Oil Companies Limited, Imperial Oil Limited, and MeColl-Frontenac Oil Company Limited an undertaking in the following words:
The adoption of these recommended revisions will not result in any increase of prices to the retail consumer because of them.
Later the purpose for which that increase was made became apparent, although it was not fully apparent at the time. It was thought by some that it was done for the purpose of raising the price, but so far as that goes it is an illustration of the fact that raising the tariff does not necessarily involve an increase in the price of the product upon which the tariff is imposed. A statement to that effect will be found if one reads carefully the judgment of the tariff board. Beginning at page 183 you have the conclusions of the board upon the reference made by the Minister of Finance. On January 23, 1935, the former Minister of Finance, Mr. Rhodes, referred to the chairman of the tariff board by letter the application that had been received from the cooperative trading associations of Saskatchewan for a downward revision of the rates of customs duties on crude petroleum and its derivatives. Mr. Rhodes, after referring to the application that had been made, said:
Crude petroleum and its derivatives are enumerated, as you are aware, in a number of items of the tariff schedule comprising roughly a group running from tariff item 267 to tariff item 275 inclusive.
In the absence of a precise description of those particular derivatives of crude oil in which the applicants manifest an interest, I herewith refer to your board as reference No. 84 the group of items above referred to for inquiry and report in accordance with the terms of the Tariff Board Act.
In accordance with the reference then made the board not only received evidence at Ottawa, but also travelled as far west as Van-
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couver and heard testimony at various points: at Regina, March 25-27, 1935; at Vancouver, May 20-21; at Calgary, May 27-29; at Saint John, June 17; at Halifax, June 20, and at Ottawa for the fortnight commencing November 19 and ending November 30.
The judgment of the board was delivered this year. The opening paragraph I propose to read, as well as a few other paragraphs, in order that the record may be complete. At page 183, chapter 13, the conclusion states as follows:
The customs duty of 2i cents per gallon levied on importations of gasoline in September, 1930, was undoubtedly an emergency tariff necessitated by the chaotic conditions in the oil industry in the United States at that time. It -was in the nature of a temporary measure pending a more mature consideration of the problem.
Then follows a record of the conditions in the United States during prior and succeeding years, the various movements of prices up and down, and the position at the end of 1934, when-
... the stabilization program enabled the integrated refiner to earn a fair profit. But the fixity and inflexibility of crude oil prices as compared with the changes and reductions in the market value of the products obtained from the crude oil seriously injured the nonintegrated refiners.
Then there is a further reference to the conditions in 1934, showing the improvement during that year and indicating that the retail prices of gasoline were higher by about ten per cent, or 1-J cents per gallon, because of the increased price of crude petroleum.
Unquestionably since the spring of 1935 conditions in the oil industry have definitely improved. Crude oil prices are at a level which would appear to permit the greater part of the current supply of oil to be produced at a profit without offering too much inducement for new drilling.
After reviewing further the conditions in the United States in the mid-continent field and the price structure of crude oil, upon which the production of gasoline depends, the board went into the question of the condition of the Canadian companies and of the profits which they had made, and at page 188 occur these words:
It will be remembered that the two main purposes of tariff protection, as stated by one of the major oil companies and quoted in the introduction of this report are:
(1)	To regulate imports to such an extent as to permit Canadian industry to benefit by increased throughput, with the resultant advantages of mass production;
(2)	To protect Canadian industry from competition from other countries where conditions of manufacture, distribution or economics differ from Canadian standards or conditions, whether this be due to unusual, unfair, unsound or unlawful practices.

It has already been shown that the chaotic conditions in the United States oil industry involving unusual and unlawful oil practices no longer exist, and that the industry as a whole is in an extremely sound position. The conditions of manufacture are not unlike those in Canada, except in so far as the refineries in many cases have a much larger capacity. But there are a number of refineries with capacities comparable to those in Canada which compete with the larger refineries and which operate in many cases, so far as their supply of crude is concerned, under conditions far less advantageous than do the large Canadian refineries.
There is necessity for protection against a refinery like the Royal Dutch Shell Company's refinery at Curasao in the Dutch West Indies, which has a capacity of over 200,000 barrels per day, and whose costs are said to be lower than those of any refinery in the United States. Other items to be considered are the higher costs of materials and the higher equipment costs in refining operations. Prior to the Canada-United States treaty, the average rate of duty on refinery machinery was approximately 35 per cent, although this increased costs amounts to only a small fraction of a cent on a gallon of gasoline. Nevertheless the board sees no reason for the continuation of these protective rates on refining equipment which is so extensive and expensive.
The refineries in the prairie provinces pay extremely high freight charges on the crude oil which is transported to the refineries by tank car, but they have a freight advantage of over two cents by reason of the higher freight rates on gasoline.
Climatic factors involving more expensive buildings, the insulation of tankage, and the burying of pipe lines to a depth of six feet below the frost level, warrant a certain measure of protection. The fact that water transportation to Montreal and Toronto is unavailable for five months of the year thus necessitating large crude oil storage, must also be borne in mind as an item requiring protection.
So far as the first purpose of the tariff, as stated by the oil company, is concerned, the increase in the tariff in 1930 had the directly opposite result. Although the share of the market held by Canadian refineries increased approximately 15 per cent in 1934 as compared with 1930, the Canadian industry did not benefit by increased throughput with resultant advantages of mass production. The number of refineries increased from fifteen in 1930 to forty-two in 1934 and the percentage of capacity in operation declined from 72 per cent in 1930 to 55 per cent in 1934.
After dealing with the labour element, which the board states is not important, having regard to the value of the industry-the employment does not amount to more than 5,000 people-they point out that they have rewritten the schedule with a view- to modernizing the phraseology in accordance with commercial usage, and deleting words and phrases which have become obsolete. I continue reading:
In the chapter dealing with the tariff history of the items comprising the petroleum schedule, it was pointed out that certain items are substantially the same, so far as wording

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is concerned, as they were in 1884. As new products have been developed, additions have been made to existing tariff items, with the result that petroleum products are frequently classified with crude petroleum in the same tariff items, and there are overlappings in the specific gravities named in certain items.
The board then proceed to suggest new tariff items, and deal with them on the basis of the American Petroleum Institute rule, which is an arbitrary rule settled by the institute, and which has been found satisfactory as to specific gravity. After giving that, the question as to where the break should take place becomes important. The board give in exact words the reasons why the break was made at the point it was. I shall have something to say about that presently. To continue:
Under the existing schedule, the bulk of the crude petroleum imported by refiners is imported under tariff item 267a. The number of that tariff item has been altered to tariff item ^ 267 (i) and the words "in its natural state" have been deleted on the grounds that if an oil is crude petroleum, it must be in its natural state. The qualifying phrase "not subjected to any other process than natural weathering and removal of foreign matter and water" is added to assist the customs authorities in the administration of the two divisions of tariff item 267. When the crude oil comes from the well, foreign matter and water are usually removed before it enters the pipe line or storage tank.
It will be noted that in the existing tariff item 267a, crude petroleum -7900 specific gravity (47[DOT] 6 A.P.I.) or heavier is specified, whereas under the proposed tariff item 267 (i), the upper gravity limit is -8155 specific gravity (42-0 A.P.I.). Under the proposed tariff item 267 (ii) crude petroleum lighter than this gravity when imported by refiners carries a rate of i cent under the intermediate tariff.
There are several reasons which seem to the board to justify a reduction of the gravity denoting the dividing line of demarcation between dutiable and non-dutiable crude oil for several reasons. In the first place the crude oil which is available in commercial quantities in the United States has an A.P.I. gravity of 40 degrees A.P.I. or less, and prices are posted for every degree change in gravity from, say, 25 degrees A.P.I. to 39-9 degrees A.P.I., and one price is posted for 40 degrees and above. The fact of the matter is that the higher gravity crudes are obtainable in comparatively small quantities, and the prices quoted for these oils are not necessarily based on any fixed ratio to the gravity as in the case of the oils having a gravity below 40 degrees A.P.I. As stated in a previous chapter, the price of crude increases 2 cents per barrel with each increase of 1 degree in the gravity. Fixing the dividing line at 42 degrees A.P.I., gives the refiners a margin of two degrees in gravity.
Secondly, the reduction of the gravity limit of crude petroleum, entitled to free entry for refineries, will prevent certain refiners from importing under the "Free" crude oil tariff item mixtures of gasoline or petroleum tops with crude petroleum. There has been considerable difficulty through mixtures of "tops" and crude oil dutiable under the present tariff item 267b, or crude oil and gasoline being invoiced as crude petroleum in its natural state under tariff item 267a. This can be done very easily when the gravity limit is 47-6 degreees A.P.I. (-7900 specific gravity) as at present. The limiting of free importations to 42 degrees A.P.I. gravity and heavier, would remove the possibility of evading the duty. The wording of the new item will also eliminate the practice of shipping mixtures and billing them for freight purposes as crude petroleum "in its natural state."
The third and most important reason, however, is that crude oils with a gravity above 42 degrees A.P.I. are in reality "freak" crudes which are not available in sufficient quantities to supply the market requirements of gasoline. The normal crudes below 40 degrees A.P.I. require expensive "cracking" equipment to obtain a similar quantity of gasoline to that obtained by a simple skimming process in the case of high-gravity crude oils.
For example, with a crude oil of 47-6 degrees A.P.I. the yield of gasoline by a "straight run" operation is as follow's.
		>4 . - -4-3
	O >
K 2 tc	A.r.i gravi
65%-"Straight run" gasoline. .	[DOT]7389	60-0
35%

Gas oil, fuel oil and loss.	*8851	28-3100%-Crude oil	[DOT]7900	47-6On the other hand, a normal crude	oil of37-0 A.P.I. (-8400 specific gravity)	will	yield:>4"6 '>
o %	[DOT] f-H 5Sw tc	< a>30%-"Straight run" gasoline. . 70%-Stock to be cracked (and	[DOT]7389	60-0loss) 	*8851	28-7100%-Crude oil	[DOT]8400	37-0
In order to obtain a 65 per cent yield of gasoline from the 37-0 A.P.I. crude oil, refiners must crack the 70 per cent stock in order to obtain the additional 35 per cent of gasoline to supplement the 30 per cent yield by the "straight run" process.
This proposed item covers all crude petroleum not otherwise specified.
I shall not read further, but I have read from the record because I believe it is desirable to point out that the difficulties to which the minister referred w'ere not difficulties which have arisen recently, but were those which had arisen in 1934, and formed part of the cause operating in the mind of the minister who referred the matter to the tariff board. The difficulty did not arise in western Canada, in the first instance; it arose in' eastern Canada in connection with a cargo of oil from Russia and subsequently a cargo of oil from Roumania. The oil was invoiced as crude petroleum in its natural state, when as a matter of fact it consisted of so-called crude oil
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mixed with gasoline which had been refined in very excellent refineries, as the product clearly indicated, and it was only necessary to put it through a simple process to separate the gasoline content from the crude oil content of the importation.
I recall clearly having asked officials of the Department of National Revenue whether or not there was any method by which we could deal with the matter, and it was then learned for the first time that in some particulars the classification in the tariff had not been changed since 1884, and, as was suggested the other day, there was no method by which we might separate the contents of the so-called crude petroleum for purposes of duty. It became apparent that it was necessary to revise these classifications in order that fraud could not be practised upon the revenue collections by invoicing as crude petroleum a product which was more largely composed of gasoline than of crude petroleum. It was that circumstance which brought the matter first to the attention of the department. Subsequent investigations by the Department of National Revenue resulted in what was indicated by the Minister of Finance. But the cause which brought about the difficulty to which I referred was the importation by water of a petroleum product invoiced as petroleum in its natural state, when as a matter of fact, it consisted of crude petroleum mixed with high class gasoline. That was one of the reasons which brought about the necessity for referring the matter to the tariff board.
The other reason was that complaints were made that the duty was enhancing the price. As is pointed out in the judgment of the board, it is quite clear that that could not have been the purpose of the imposition of the duty. The purpose w,as to deal with the chaotic condition which existed in the United States and to secure at no increase in price the necessary gasoline produced in Canada for Canadian consumption. Side by side with the increase in tariff it will be recalled that a new section was added to the tariff which enabled the governor in council to place upon the free list any commodity that had been increased in price by reason of an increase made in the tariff itself. I shall read from page 191 of the record what the board has to say on this point:
Having carefully considered the various elements of cost which are higher in Canada than in the competing countries, the board has arrived at a schedule of rates which in its opinion, having regard to the return of normal conditions in the United States industry, will permit the Canadian refining industry to do business in an economic and efficient manner.

These are the words to which I wish to direct particular attention:
The very wording of the pledge given in 1930 to the government by the major oil companies to the effect that the retail price to the consumer would not be increased because of the customs duties, implied that the companies did not require any more than one cent duty on gasoline because of differences in manufacturing costs here and in the United States. They needed the additional one and a half cents to protect the Canadian market against the chaotic conditions in the petroleum industry of the United States _ already described. If they required the increased protection on manufacturing costs, they would have had to increase prices to the consumer.
As a matter of fact they kept their pledge; there was no increase in the price of gasoline consequent upon the tariff. Any increases in gasoline prices that took place in this country were increases that marched side by side with the increase on crude oil as set out in the judgment of the board.
I make this statement because the tariff of 1930 was imposed for one purpose, and one only. It accomplished that purpose, and it did not thereby involve any higher price, as the board itself has found. There were no increases in prices by reason of the tariff. Such increases as did take place were increases in the cost of the raw material as reflected by the prices posted from time to time in the area from which the crude comes. The difficulty in this country is that we have not as yet discovered any pools of crude petroleum. We have what is called casinghead gasoline or naphtha, discovered in the Turner valley and produced in extensive quantities. It is a high grade product, so high grade in fact that at times you can fill your tank with it right from the well and drive your engine with it. But the quantity is not sufficient to supply the requirements even of western Canada, although the consumption of gasoline in this country last year as given in this report was, I think, only about 500,000,000 gallons, which of course is relatively a small quantity as compared with United States consumption, especially when we recall that one refinery of the Royal Dutch is capable of producing 200,000 barrels a day.
In my judgment the result of the new tariff proposals will be to protect, so far as this indicates that protection is necessary, the interests of those engaged in refining in this country. The minister referred the other day to the objections that had been made in Montreal and elsewhere with respect to the decrease in duties. I think those who were complaining overlooked one essential fact. The fact was not that the protection was not ample from the point of view of prices, but that it was not ample from the point of view of permitting a possible importation into this

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country of gasoline from countries that were willing to sell it at almost any price. Remembering that Russia was not in the hands of private enterprise and that they were offering gasoline for sale in the city of Baltimore at as low, I believe, as three cents a gallon, in a tanker, aDd having regard to the fact that on a barter basis oil from Roumania was offered in this country at a very low price, what the president of McColl Frontenac Oil Company had in mind, if I can understand what he said, was-


Mr. DUNNING:: It was a little difficult to understand.


Richard Bedford Bennett: Well, I read it in the light of just what this judgment says, that is, not that there was not ample protection with respect to competition on a price basis, but that chaotic conditions in the industry elsewhere might involve the importation into this country of gasoline at an invoice price so low as to make it impossible for the moment to compete with it here. I will give an illustration of what I mean.


Charles Avery Dunning: My right hon. friend was very generous in interpreting the comment in that way. I mean he was generous to the man making the comment.


Richard Bedford Bennett: The reason I read the undertaking to which the McColl Frontenac Oil Company was a party in 1930 was to show that that must have been in the speaker's mind. I have no other reason for saying it, because I have not spoken to anybody about it, but it occurred to me that he gave the undertaking that the price would not be increased by reason of the tariff. Clearly, as was pointed out in the judgment of the board, it was the chaotic condition that prevailed and the sale at what may be called bankrupt prices of gasoline in Canada which made it impossible to carry on the sale of gasoline in this country with any stability unless there was some, certainty as to the prices at which gasoline would be imported from countries where chaotic conditions prevailed. I recall its being brought to the attention of the government that between 1930 and 1934, a large concern in the United States, which had a great tank farm filled with gasoline, pledged to the bank, had been unable to meet its obligations; the bank had been compelled to take over the tank farm, and they offered the gasoline at a price that would liquidate their debt, and were content with that. The obvious result of such conditions was that unless we had imposed the duty we did, namely 21 cents, a serious situation would have developed. To
permit that gasoline to come into Canada without restriction would have meant for the moment a lower price to those who bought it. But there were those who were speculating in gasoline who were willing to buy it in tank cars, sold as it was at distress prices by reason of the bankruptcy of the concern owning it, and, by bringing it into Canada and selling it at a lower price, disorganize the price structure in this country.
The board has apparently given a tremendous amount of time and care and attention to this matter. Anyone who has any preconceived prejudices with respect to the oil industry, and will take the trouble to read this judgment, realizes why prices in Canada have varied from time to time. It is because we have no raw material from which we can produce our finished product. We can secure raw material only in three ways: by tank cars, by one pipe line only that comes into Canada, and by water. In the summer time water carriage is available to Montreal and Toronto, and ships do carry tank oil up to the refineries in Toronto and it is there refined, but for five months or more in the year that is not possible; therefore, except via Halifax and Vancouver, where you have water carriage the year round, you must depend entirely upon tank cars. It is stated in this judgment, touching a matter with which we in western Canada have some concern, that the higher freight rate on gasoline arises by reason of the lower rate on wheat; it is a compensatory tariff for the railways by reason of their carrying the wheat at a much lower rate than prevails in the United States for the transportation of similar grains over similar distances.
I read the comment to which the minister referred the other day as indicating that the higher tariff was not required for the purpose of protection in the sense of increasing the price to the producer, but solely for the purpose of preventing distress gasoline from finding a market in this country and thereby disturbing the stability of the whole structure. That was the ground on which the case was put to the government in 1930. It was for that reason that the undertaking was obtained that the oil companies would not increase the price by reason of the tariff, and, as the judgment points out, obviously the increased tariff serves no purpose if any duty higher than the cent a gallon is necessary for the purpose of maintaining the industry in this country. The adequacy of the protection-if you wish to use the word protection-at one cent a gallon is quite clear. The higher rate is for the purpose of protecting the industry
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against sporadic inroads of the kind which came about by reason of chaotic conditions in other countries-at that time, in the United States. Anyone who has followed the history of the industry in the United States as set out in this single volume will realize how uncertain those conditions have been, and if you add to that difficulties that have arisen by reason of importations by water from the Black sea and Roumanian fields, you get a truer and clearer appreciation of the situation.
I followed with some degree of interest the statements made by the hon. member for Moose Jaw (Mr. Ross) who has apparently given the matter a great deal of consideration. I have no opinion with respect to the question of freight rates, but I do know it was because of the conditions to which I refer that this matter was referred to the tariff board in the hope that with improved conditions in the industry it would be made apparent that all that was aimed at by the government was not to increase the price of gasoline to the consumer, but to try to secure for him a steady, certain price that would not represent undue profit on the part of the producers. An effort was made to guard against destruction for the moment by spasmodic and sporadic inroads upon the market by those who were not permanent Droducers, but -who were launching their pro-iucts in the markets of this country for the purpose of raising money-not being a regular industry in that sense-by liquidation of bankrupt concerns, or by countries overseas attempting to realize needed money to meet their economic needs through taking advantage of trade and exchange difficulties.


Mr. BLACKMORE:: Such investigation as I have been able to make in connection with this duty on crude oil leads me to express commendation of the Minister of Finance (Mr. Dunning) for the sincere effort he has made to help the consumers in the west. A great many people in the west have signified to me their appreciation of this action. I should like also to commend the minister for the statement he made the other day, which appears on page 3018 of Hansard, that he was directing the tariff board to follow closely the reactions which might follow from the application of this changed tariff. I believe that this is a very sound procedure and I commend the minister heartily for his action in that regard.
There is another matter to which I should like to direct the attention of the minister. In Alberta at the present time are two smaller companies which import gasoline. These

companies are laying down gasoline in Calgary at such a price as would seem to indicate that they are perhaps making greater profit than should be made; consequently it might be a good thing if the minister would direct the tariff board to send a representative to Calgary to investigate this matter. I believe that this would be a good starting point. Once more I express my appreciation of the activities of the Minister of Finance in connection with gasoline prices.


Mr. COLDWELL:: I should like to say
just a word in connection with the point of view expressed the other afternoon by the right hon. leader of the opposition (Mr. Bennett). When speaking to this particular item on AVednesday last I suggested that in my opinion the method of handling the alleged abuses in connection with the importation of light crudes was fundamentally wrong. AVhen the leader of the opposition was expressing his opinion very logically and very ably, I felt that he was emphasizing the point of view I had expressed that day.
Protective tariffs are brought into being in order to protect the price levels of certain classes of producers in Canada, but unfortunately other classes of producers are not protected from the chaotic conditions of the markets outside of Canada. The result is that a product produced in a protected market has to be sold under chaotic conditions abroad. Consequently there is opposition to this method of affording protection from unfair competition by means of protective tariffs. There is also an urge that the government of Canada should reciprocate in another form and assure the primary producers of Canada such prices for their products as will be equivalent to the prices guaranteed by the tariff to those who receive the benefits of it. That is what I intended to develop the other afternoon when six o'clock was called.
I believe the Minister of Finance is adopting an unsound method of dealing with the alleged condition in relation to certain refineries, which he outlined to the committee. The widespread use of this method of dealing with such situations will make the condition as far as the western producers are concerned one of confusion worse confounded. AA7hat-ever we may think of other features of the matter, I am thoroughly opposed to increasing the tariff as a means of dealing with this particular situation. May I emphasize again that in the best interests of understandings between all groups of people in the country, it would be wise for the government to consider a method of dealing with this particular matter different from the method proposed by the Minister of Finance at this time.

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Charles Avery Dunning: While I do not want to obstruct the passing of one of my own items,
I should like to say that in my opinion the most important point made the other day in the discussion with respect to crude petroleum had to do not with the tariff but with the fears expressed by several members that advantage would be taken by the railway companies of the new classification in the schedule to introduce higher freight rates on the lighter crudes than prevail in connection with the other crude oils. It will be recalled that the other day I expressed some doubt as to whether that would be possible in the light of a judgment of the ralway commission already of record, especially in view of the fact that in the old petroleum schedule there were at least three separate crude items whereas in this tariff there is only the one item with two minor divisions. It was apparent to all who discussed this matter that any injury which might be done to the so-called small refiners, which I prefer to refer to as skimming plants, would be done not because of this half-cent rate in the intermediate tariff, but because of a possible increase in the freight rate which might be brought about as a result of the divided classification. In that connection I gave certain assurances with respect to the tariff board watching the situation during the coming year. I am in a position today to go a little further. The chairman of the tariff board received this morning a letter from Mr. L. J. Knowles, special traffic representative of the Canadian National Railways, from which I quote in part. Mr. Knowles says:
I have this morning discussed, by telephone, the situation with Mr. R. W. Long, our general freight traffic manager, and I am authorized by him to make the attached statement to you so far as the Canadian National Railways are concerned, and the substance of this statement may be used in any manner that you see fit, publicly or privately.
I had better read this statement because of its immediate interest. It is as follows:
So far as the Canadian National Railways are concerned, there need be no fear whatever that any attempt will be made to increase the freight rates on crude oil of the higher gravities-or even the lower gravities-from the Texas or Oklahoma oil fields to western Canada.
Of course, these rates are joint international rates, and the Canadian National Railways have no authority to speak for the United States lines, but we do not believe that they also will attempt to make any change in the rates on account of the differentation in the duty which has now been made by the Canadian government.
This assurance is given predicated on the understanding that the oil shipped from the Texas and Oklahoma oil fields to western Canada will be genuine crude oil in its natural state, for the following reason:
Last year the United States railways became so concerned about doctored crude oil (which is often a mixture of gasoline, distillate and crude oil) being shipped as crude oil at the low freight rates which were established originally on the heavy crude oil for use in cracking plants, that they determined to make a change in the freight classification which, up to some time last year, designated crude oil as crude oil and nothing else, so that under the freight tariffs it was possible to ship crude oil in its natural state, or crude oil not in its natural state, as crude oil.
With the cooperation of the American Petroleum Institute, and with the approval of the Interstate Commerce Commission, the United States freight classification, which also applies on international shipments, was changed to read as follows:
"Crude oil in its natural state, or crude oil which has been subjected only to natural weathering, settling or treatment for the removal of water and bottom sediment, and not blended with other products."
The very language we are using in the tariff item.
This designation is shown on page 285 of the consolidated freight classification No. 10, which both the United States and the Canadian lines are parties to.	[DOT]
The effect of changing the description as designated, is as follows:
Crude oil in its natural state, or which has only been subjected to natural weathering, and so forth, and not blended with other products, may be forwarded over the United States and the Canadian railways on bills of lading which will authorize the use of the rates on crude oil wherever they may apply in the freight tariffs in which the rates are published, which freight tariffs are subject to the governing clause of the consolidated freight classification No. 10.
Therefore, if the skimming plants in western Canada buy genuine natural crude oil and have it shipped to them from Texas and Oklahoma to western Canada, there will be no question that the rates which the Board of Railway Commissioners authorized in their decision, after an exhaustive investigation, will apply.
If, however, the shippers or receivers want to sbip crude oil not in its natural state, that is, crude oil blended with other products, they can honestly describe it as crude oil not in its natural state on the bills of lading, and the rates applied will be the ordinary petroleum rates which apply on gasoline or gasoline mixed with other articles.
Of course, this means that crude oil not in its natural state will pay higher freight rates, but the fact is that this condition has been in effect now for over a year.
For example, crude oil in its natural state from Tulsa, Oklahoma, to Regina will continue to pay a rate of 53J cents per 100 pounds, which was authorized by the Canadian railway commission in its decision.
If the shipment is offered as crude oil not in its natural state, that is, gasoline distillate and crude oil, it will pay a rate of $1.23 per 100 pounds, as the railway tariffs provide that a mixture of high grade and low grade articles take the highest rate on any article in the mixture.
This is a well known principle of railway rate making, which is recognized by both the Canadian railway commission and the Interstate Commerce Commission.
Customs Tariff

There is a further matter which should be mentioned in this connection, and that is, if any shipper or any receiver of crude oil not in its natural state, or blended with other products, wilfully and knowingly attempts to ship that particular kind of alleged crude oil as crude oil in its natural state, they will not only be subject to the additional ordinary rate between the proper crude oil rate and the petroleum products' rate, but they will be subject to prosecution under the Interstate Commerce Act or the Canadian Railway Act, or both.
The situation, therefore, as explained, is, so far as the freight rates are concerned, thoroughly cleared up, and no one need have any fear that, so far as the Canadian National Railways are a factor in the situation, there will be an increase in freight rates on crude oil from Texas or Oklahoma to western Canada as long as they are honestly shipping natural crude oil, no matter what the gravity may be.
Mr. DO'UGLAS: If the railways can make this distinction between natural crude oil and oil that is not natural, why is it not possible for the customs department to make the same distinction?


Charles Avery Dunning: I do not propose to embarrass either the customs officials or the railway officials by giving the information. Suffice it to say that cooperation between them is highly desirable, and the method of cooperation which we are prescribing in adopting the standard of division which we are adopting will facilitate it. My hon. friend will understand that it is rather important not to give information which might facilitate wrongdoing rather than otherwise.


Mr. COLD WELL:: If the railways are handling the matter in this way, does not the tariff of half a cent become unnecessary?


Charles Avery Dunning: I do not believe so. There must be a break point somewhere for administrative purposes, and that point can be expressed only in the difference in customs duty. There is little more I can say. I appreciate the contribution to the discussion made by the leader of the opposition. I think his historical statements were entirely correct except in one particular. I understood him to say that the importations of spiked crude or faked crude were by water.


Richard Bedford Bennett: The first shipment to which our attention was directed; the first one.


Charles Avery Dunning: Yes; subsequently the shipments came by rail to various parts of western Canada, and we are hoping to have that situation fairly in hand. I cannot think of anything brought up the other day which has not been pretty fully discussed, and I suggest that we might carry the item.


Richard Bedford Bennett: I notice the classification of the railways is "not blended with other products." Might it not be well when the bill is prepared to add those words so as to make it abundantly clear that we have followed the suggestion of the railways?


Mr. CAMERON (Cape Breton):: I was rather impressed at the last sitting by the statement made by the hon. member for Moose Jaw (Mr. Ross) with regard to the price spread in Nova Scotia and British Columbia as contrasted with the price in the central provinces. It would appear, if the figures placed on Hansard are correct, that the companies doing business in Nova Scotia, one of them a refining company, are really charging more at the tank than is justified by the figures submitted in the house.


Charles Avery Dunning: I do not know whether my hon. friend was in the chamber subsequently to the remarks of the hon. member for Moose Jaw the other day, but because of what I find in the tariff board's report with respect to the distribution of gasoline, I undertook the other day to have the tariff board watch carefully during the coming year the effects of the changes we are now making, and also the transportation aspect to which I have referred. I used this language the other day:
I propose to ask the tariff board to keep in touch with the developments which follow the changes in duty proposed in the petroleum schedule, and particularly to keep informed as to the price situation and as to the performance of the major companies in rectifying the uneconomic condition of distribution, and to study the relation of railway and other transportation to the petroleum industry.
The Nova Scotia aspect is part of that reference in the report. In this revision we are making a complete and studied adjustment of the petroleum schedules from the tariff standpoint. During the first year that new schedule is in existence to my mind it is important that the body which has made this very admirable report on conditions should be in a position to ask for information, secure it, analyze it and if necessary be able to make a further report on the matter at a future session of parliament in case conditions arise which warrant that action being taken following the experience of the working of the new schedule.
Mr. MacLEiNNAN:	As a result of this
duty? As I understand it, the hon. member for Cape Breton North-Victoria (Mr. Cameron) is complaining with regard to the price charged for gasoline in Nova Scotia as compared with the price in central Canada.

Customs Tariff
Do I gather from the Minister of Finance that any further investigation will be confined to the conditions arising as a result of this duty?


Charles Avery Dunning: No, it will not be confined in any way. The language I used was quite general, as to the performance of the major companies in rectifying the uneconomic conditions of distribution, of which this is one. I do not intend to restrict it in any way.


Mr. KINLEY:: I understood the minister
to say that this tariff item would have no effect on the ordinary importations of crude oil.


Charles Avery Dunning: It should not.


John James Kinley: I thought it was only for
the purpose of determining what is crude oil for custom purposes by the specific gravity test. Crude oil coming in to the major companies will not be affected?


Charles Avery Dunning: Only if they import light crude.


John James Kinley: The specific gravity mentioned in the first paragraph is the specific gravity of ordinary crude oil?


Charles Avery Dunning: Two degrees above it.


John James Kinley: That allows for weather
conditions, I suppose. In Nova Scotia we import crude oil by water, so that the freight rate problem does not arise. It is refined in Nova Scotia at tidewater and then sold in Montreal for less than it is sold in the province of Nova Scotia. I think there is a splendid opportunity for someone to go into the gasoline business in Nova Scotia, importing the gasoline from the United States and selling it at the pierhead. It seems to me that the competition which has existed in western Canada has had some little effect, because gasoline is being sold there for less than in Nova Scotia, where we do not have the same competition.


[Stage Direction]
Item agreed to.
Customs tariff-267a.	Crude petroleum,
n.o.p., per gallon:	British preferntial tariff,
ft cent; intermediate tariff, 4 cent; general tariff, 1 cent.
Charles Avery Dunning: This is the n.o.p. item.


[Stage Direction]
Item agreed to.
Customs tariff-267b. Petroleum tops; blends of petroleum tops or petroleum products with crude petroleum; all the foregoing -7249 specific gravity (63-7 A.P.I.) or heavier, at 60 degrees Fahrenheit, when imported by oil refiners to
be refined in their own factories, per gallon: British preferential tariff, free; intermediate tariff, 1 cent; general tariff, 2 cents.
Item agreed to.
Customs tariff-268. Natural casinghead, compression or absorption gasoline, lighter than *6690 specific gravity (80-0 A.P.I.) at 60 degrees Fahrenheit, when imported by refiners of crude petroleum for blending gasoline wholly produced in Canada: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-269. Products of petroleum, n.o.p.:-
(i) Lighter than -8236 specific gravity (40-3 A.P.I.) at 60 degrees Fahrenheit, per gallon:	British preferential tariff, 1 cent;
intermediate tariff, 1 cent; general tariff, 2
(iij -8236 specific gravity (40-3 A.P.I.) or heavier at 60 degrees Fahrenheit, per gallon: British preferential tariff, J cent; intermediate tariff, J cent; general tariff, 1 cent.
Item agreed to.
Customs tariff-269a. Petroleum oil known as engine distillate -8017 specific gravity (45-0 A.P.I.)	or heavier at 60 degrees
Fahrenheit, per gallon:	British preferential
tariff, | cent; intermediate tariff, J cent; general tariff, 1 cent.
Charles Avery Dunning: I should point out that there is a very considerable reduction on engine distillate, which I think should be acceptable. I am getting some telegrams which appear to indicate confusion of mind and the belief that the tariff on distillate has been increased, whereas [DOT] under the intermediate tariff it is reduced from 2j cents to one half cent.


John James Kinley: I have also had some telegrams expressing fear that the tariff had been raised on the oil we use in ships. Petroleum products are used a great deal to-day to supply the motive power for ships. What we use on the ships, however, is fuel oil, not crude oil, and the fuel oil comes in at the lowest level. It was a matter of concern to me, but I find that there is no change in that regard.


Charles Avery Dunning: No.


John James Kinley: Bunker oil has almost an international aspect. When it is a matter of price ships will go a long way to bunker, and I was glad to be assured that there would be no duty on fuel oil.


Major James William Coldwell: I am wondering whether the communications the minister is receiving with regard to distillate have not their origin in circumstances somewhat different from those mentioned by the minister. I
Customs Tariff

know that I commended him with regard to this reduction, and as far as I have been able to find out it was pretty generally understood all over western Canada that the duty on distillate was lower. The information some of us have, however, is that where the area is more or less controlled by one of the larger companies it is very difficult indeed for the farmers to get adequate supplies of distillate.


Charles Avery Dunning: This will enable it to be imported.


Major James William Coldwell: We are hoping it will help the situation, but I think possibly some misunderstanding has arisen in that way.


Richard Bedford Bennett: The government have adopted in its entirety, as far as this schedule is concerned, the report of the tariff board?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: It has been completely adopted; is that correct?


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-270. Oil when imported by miners or ming companies or concerns to be used in the concentration of ores of metal in their own concentrating establishments, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-271. Lubricating oils composed wholly or in part of petroleum:-[DOT]
(a)	Valued at less than 25 cents per gallon,
per gallon:	British preferential tariff, 14
cents; intermediate tariff, 2J cents; general tariff, 24 cents.
(b)	N.o.p.: British preferential tariff, 124 per cent; intermediate tariff, 174 per cent; general tariff, 20 per cent.
Item agreed to.
Customs tariff-272. Refined petroleum jellies and oils, for toilet, medicinal, edible, or similar purposes: British preferential tariff, 15 per cent; intermediate tariff, 224 per cent; general tariff, 25 per cent.
Item agreed to.
Customs tariff-272a. Petroleum greases and lubricating greases, n.o.p.: British preferential tariff, 124 per cent; intermediate tariff, 174 per cent; general tariff, 20 per cent.
Item agreed to.
Customs tariff-272b. Paraffin wax: British preferential tariff, 15 per cent; intermediate tariff, 224 per cent; general tariff, 25 per cent.
Item agreed to.

Customs tariff-273. Asphalt or asphaltum, solid or not: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 10 per cent.
Richard Bedford Bennett: Was this covered by the report?


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-273a. Asphaltum oil for use only for paving purposes: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-274. Petroleum coke: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-275. Liquefied petroleum gases for heating, cooking or illuminating purposes, when imported in containers: British preferential tariff, 10 per cent; intermediate tariff, 15 per cent; general tariff, 25 per cent.
Item agreed to.
Customs tariff-284. Drain pipes, sewer pipes and earthenware fittings therefor, chimney linings or vents, chimney tops and inverted blocks glazed or unglazed, n.o.p.: earthenware tiles, n.o.p.: British preferential tariff, 25 per cent; intermediate tariff, 324 per cent; general tariff, 35 per cent.
Richard Bedford Bennett: There is no change in
this item?


Charles Avery Dunning: It includes the n.o.p.
item.


Richard Bedford Bennett: It just adds the not
otherwise provided items?


Charles Avery Dunning: Yes. That is rendered
necessary because of the new item next following.


[Stage Direction]
Item agreed to.
Customs tariff-286. Earthenware and stoneware, viz.:-demijohns, churns or crocks, n.o.p.: British preferential tariff, 25 per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.
Richard Bedford Bennett: What is the change there -just adding the n.o.p.?


Charles Avery Dunning: Yes, because of the next succeeding item.


[Stage Direction]
Item agreed to.
Customs tariff-288. Earthenware and stoneware, brown or coloured and Rockingham ware, n.o.p.; "C.C." or cream coloured ware, decorated, printed or sponged, n.o.p.; and all earthenware, n.o.p.: British preferential tariff, 25 per cent; intermediate tariff, 35 per cent; general tariff, 35 per cent.

Customs Tariff
Richard Bedford Bennett: These rates are exactly
the same. What is the change in the item?


Charles Avery Dunning: It includes the n.o.p.
item. These are all as a result of item 288a. The three preceding changes are all necessary because of the presence of item 288a.


[Stage Direction]
Item agreed to.
Customs tariff-288a. Chemical stoneware composed of a non-absorbent vitrified body specially compounded to resist acids or other corrosive reagents: British preferential tariff, free: intermediate tariff, 35 per cent; general tariff, 35 per cent.
Richard Bedford Bennett: This puts it on the free list under the British preference and leaves it as it is under the other tariffs?


Charles Avery Dunning: This is a new item which accords the privilege of free entry for chemical stoneware under the British preference. These products are not of the type produced in Canada by such plants as that at Medicine Hat, Alberta, and the item is intended to cover earthenware, or so called stoneware of extremely fine quality, sometimes made of semiporcelain with a very high finish, and of nonabsorbent character. It is in wide demand in Canada for laboratory use in universities and research institutions and also in the industrial field. We are making this concession at the request of His Majesty's government in the united kingdom.


[Stage Direction]
Item agreed to.
Customs tariff-288b. Hand forms of porcelain, when imported by manufacturers for use exclusively in the manufacture of rubber gloves in their own factories:	British preferential tariff, free; intermediate tariff, 35 per cent; general tariff, 35 per cent.
Item agreed to.
Customs tariff-311a. Blackboards, solid, of slate or of paper composition: British preferential tariff, free; intermediate tarifE, 10 per cent; general tariff, 25 per cent.
Richard Bedford Bennett: What is the point of this item?


Charles Avery Dunning: This is a new item to effect a reduction on blackboards whether made of slate or of paper composition. They are not produced in Canada, and it is felt that the reduction to ten per cent under the intermediate and to free under the British preferential is advisable.


Richard Bedford Bennett: But they are made in Canada, are they not? I am familiar with the blackboard of paper made in Canada. I admit there is practically no slate blackboard made in Canada. Very often the blackboard in the school is painted on the wall itself. There is. a paper blackboard sold by a well known firm in Canada.


Charles Avery Dunning: That is not covered by this item. These are solid blackboards. We checked it up with the customs.


Richard Bedford Bennett: The ones I had in mind would roll.


Charles Avery Dunning: Yes, thin things. They are not dealt with in this item.


Thomas Miller Bell: Is this not the stuff called hyloplate? That is papier-mache.


Charles Avery Dunning: That is not covered by this item.


Richard Bedford Bennett: What are the importations under this item?


Charles Avery Dunning: There has been no record of importations. Even the Canadian Manufacturers' Association do not claim that these articles are made in Canada, and I am sure they would make a claim if even a very few were manufactured.


Mr. MacNICOL:: It is a good thing someone is defending the worker.


[Stage Direction]
Item agreed to.
Customs tariff-312a. Asbestos in any form other than crude, and all manufactures thereof, when made from crude asbestos of empire origin, n.o.p.: British preferential tariff, free; intermediate tariff, 22J per cent; general tariff, 25 per cent.
Richard Bedford Bennett: That adds "n.o.p.," I take it?


Charles Avery Dunning: Yes. It is unchanged in rate.


[Stage Direction]
Item agreed to.
Customs tariff-323. Silvered glass, bevelled or not and framed or not, n.o.p.: British preferential tariff, 22§ per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.
Charles Avery Dunning: Same thing.


Richard Bedford Bennett: No change in rate.


[Stage Direction]
Item agreed to.
Customs tariff-326a. Manufactures of glass n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 20 per cent; general tariff, 22J per cent.
Item agreed to.
Customs tarifE-326e. Articles of glass, not plate or sheet, designed to be cut or mounted; articles of glassware, when imported by manufacturers of silverware to be used in receptacles made of or electro-plated with precious metals, in their own factories:	British preferential
tarifE, free; intermediate tariff, 10 per cent; general tariff, 22J per cent.
Charles Avery Dunning: This is a new item, a new wording. It puts together parts of several old items, as will be seen by what has gone before.

Customs Tariff

It represents the bringing of the description of this class of goods into conformity with modern industrial and commercial descriptions of the commodities dealt with.


Richard Bedford Bennett: The real fact is that it prevents glass from being classified as silver, which would be a sad blow to some of my friends in the customs department.


Mr. HEAPS:: Is it possible for the customs department really to know whether goods of this kind are being imported for the purpose specified in this item? Goods may be imported in such a way that the slightest little addition will be made to take advantage of this item. I can see room for an enormous amount of difficulty and evasion.


Charles Avery Dunning: "Articles of glass, not plate or sheet, designed to be cut or mounted" is a wording that has been in the tariff and has been administered in that form since 1906. Then:
... articles of glassware, when imported by manufacturers of silverware to be used in receptacles made of or electro-plated with precious metals, in their own factories.
They are really inserts of glass. Customs officials have had great difficulty in deciding whether some of these articles should be classified as silver or as glass. There will be no further doubt, with this item and another we shall come to shortly.


Abraham Albert Heaps: A piece of glass may be imported for the purpose specified in this item, and a minimum amount of work done on it to bring it under the description given. It is free from Great Britain, is it not?


Charles Avery Dunning: Yes.


Abraham Albert Heaps: Suppose a piece of glass is impofted having a value of $10, and about ten cents' worth of work is put on it in order that advantage may be taken of the free list. There is no specified amount involved here, and I can see a loophole for that kind of thing. It is quite possible that evasion might be practised in a wholesale way by importers of glass bringing these goods into the country, doing a very small amount of work on them-


Charles Avery Dunning: They need not do any under this item.


Abraham Albert Heaps: But it says they are to be used for certain purposes. It does not specify the amount of use.


Charles Avery Dunning: I am afraid my hon. friend does not understand the object. The wording "to be used in receptacles made of, or electro-plated with precious metals" is to permit the manufacturer to make a complete article, of which the receptacle is

either silver or electro-plated, but the container within it is of glass. A sterling silver butter dish is an excellent illustration. The glass for that butter dish can be imported free under this item, and the glass itself need not be processed in Canada at all. It is not made here, of course, as my hon. friend knows.


Abraham Albert Heaps: Quite a bit of glass is made in Canada.


Charles Avery Dunning: Not of this kind.


Abraham Albert Heaps: I know a firm out west which was doing some glass cutting.


Charles Avery Dunning: There is no record of any manufacturer of this class of commodity in Canada.


Richard Bedford Bennett: My criticism is that the intermediate is too low.


Charles Avery Dunning: If my right hon. friend examines the imports of last year-$57,000 from the United States, $23,000 from Czechoslovakia, $12,000 from the United Kingdom, $11,000 from Belgium, and $8,000 from Japan, -he will see that a number of countries are interested in this class of export to Canada.


Richard Bedford Bennett: There was a rate of 22J per cent then.


Charles Avery Dunning: But my right hon. friend will notice there is a spread of 121 per cent bet-ween intermediate and general. It was that I had in mind.


Richard Bedford Bennett: But Czechoslovakia has the intermediate, and so has Japan.


[Stage Direction]
Item agreed to.
Customs tariff-326f.	Hollow shapes of
glass, moulded, when imported by manufacturers of electric light fixtures to be used in such fixtures manufactured in their own factories: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 32J per cent.
Charles Avery Dunning: There is an amendment.


Mr. ILSLEY:: I move:
That tariff item 326f contained in resolution No. 5 be amended in wording to read as follows:
Hollow shapes of glass, moulded, when imported to be used by manufacturers of electric light fixtures in the production of such fixtures in their own factories.


Richard Bedford Bennett: Does that mean bulbs?


Charles Avery Dunning: No, it is shapes.


Richard Bedford Bennett: Although a bulb is a hollow shape of glass. That is covered by another item?

Customs Tariff


Charles Avery Dunning: Yes. It is the sort of thing that fits outside the bulb, not the bulb itself. The change is made in order not to confine the, importation privilege to the manufacturers themselves; that is, the article may be imported for them. Representations have been made to the effect that there are many small manufacturers of these commodities who are not doing a large enough business to import their own, but there are institutions importing on their behalf and selling only to them. I think this is the item about which the hon. member for West-mount (Mr. White) spoke to me.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-326g. High thermal shock resisting glassware: British preferential tariff, free: intermediate tariff, 25 per cent; general tariff, 32J per cent.
Charles Avery Dunning: This is an entirely new
item, to afford reductions under the British preferential and intermediate tariffs on various types and kinds of glassware capable of resisting a high degree of heat. A good deal of this is ovenware and tableware of glass which is not produced in Canada. His Majesty's government in the united kingdom has asked particularly for a concession in duties with respect to the item, and after careful investigation we believe it is desirable on all accounts to grant it.


Abraham Albert Heaps: Has the minister any figures
to show the importations under the item?


Charles Avery Dunning: This is an entirely new
item, and there is no data with respect to importations. It was formerly in a general item which is being split up so that in the future we may have information.


Abraham Albert Heaps: I understand there has been
a reduction in the British preferential tariff and an increase in the general tariff.


Richard Bedford Bennett: The products under 326e and 326g are really in the same position. We do not produce high thermal shock resisting glassware in Canada. We have given a 10 per cent preference in item 326e, but we have given a 25 per cent preference against the United States, where both these items are produced, under item 326g. There is an inconsistency in the intermediate rates as compared with the preferential rates.


[Stage Direction]
Item agreed to.
Customs tariff-326h.	Fresnel or dioptric
lenses, sections and globes: British preferential tariff, free; intermediate tariff, free; general tariff, 30 per cent.
12739-193J
Abraham Albert Heaps: In this item the intermediate rate is the same as the British preferential; in other words the British preference is almost wiped out by putting the intermediate on the preferential list.


Charles Avery Dunning: Fresnel lenses are known generally as fresnel lights, and are used almost solely in fishing craft. Vessels of twenty tons are required to show lights at night. The hon. member for Queens-Lunenburg (Mr. Kinley) will call my attention to any inaccuracies in what I say with respect to fishing. It has been estimated that possibly two hundred or more fishing boats out of Lunenburg and other Nova Scotia ports are equipped with running lights carrying fresnel lenses. The lenses, sections and globes are specially moulded forms with horizontal ribs. They are not made in Canada, and it is proposed that they be made free under the British preferential and intermediate rates, the reason being that they constitute a consumer's item, and the articles come principally from the United States. It is simply a procedure of making a consumer's item free.


Mr. MacINNIS:: I am puzzled when I
read the figures in the old item. We find that under item 326h the tariff prior to May 1 stood at 15 per cent and 20 per cent under the British preferential, 30 per cent and 30 per cent under the intermediate and 32i per cent and 30 per cent under the general. What do these figures mean?


Charles Avery Dunning: The reason is that in
the present instance we are making a new item dealing with specific commodities, namely fresnel or dioptric lenses, sections and globes. We make the new item because a difficulty in administration has arisen. The old description brought the articles into the country under two or three different classifications. We give the duties in the corresponding columns, and have attempted to give them under the old classification which involved two or three items. In some instances you would find a high duty, and it might be that the importations were infinitesimal in regard thereto. Nevertheless we find that we have to show them.


Mr. STIRLING:: Item 326g is a single
article.


Charles Avery Dunning: Item 326h refers to sections and globes.


Grote Stirling: I was referring to the
item dealing with "high thermal shock resisting glassware."
Customs Tariff


Charles Avery Dunning: Formerly ovenware was
under one item and tableware was under another. In the old tariff the description "high thermal shock resisting glassware" was not used.


Richard Bedford Bennett: What is the name of the glassware used for baking purposes?


Abraham Albert Heaps: Pyrex.


Charles Avery Dunning: That is a trade name,
and for that reason it cannot be used in a tariff schedule. The description "high thermal shook resisting glassware" would cover pyrex.


[Stage Direction]
Item agreed to.
Customs tariff-346a. Zinc slugs or discs, when imported by manufacturers of electric storage batteries, for use exclusively in the manufacture of seamless cups or shells for such batteries, in their own factories: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 25 per cent.
Richard Bedford Bennett: There is a material
change in the item. I should think the business in connection with the item would be given to the United States when there is only a ten per cent 'spread between the British preferential and intermediate rates.


Charles Avery Dunning: It comes from there
to-day, of course.


[Stage Direction]
Item agreed to.
Customs tariff-362.	Articles consisting
wholly or in part of sterling or other silverware, n.o.p.; manufactures of gold or silver, n.o.p.: British preferential tariff, 30 per cent; intermediate tariff, 37J per cent; general tariff, 45 per cent.
Abraham Albert Heaps: I have always felt that the
rates of 30 per cent under the British preferential and 45 per cent under the general tariff are altogether too high. There has been no change in rates, but I am just wondering, in view of the fact that a general reduction is being undertaken by the minister, whether it would not be well to reduce the rate to a point lower than that which has prevailed for a number of years. I notice that in the following item, namely that respecting nickel-plated ware, gilt or electroplated ware, the rate is 17! per cent under the British preference. I cannot see why there should be so great a difference between nickel-plated goods and goods such as are described in the item now under discussion. I suggest that the 30 per cent rate is too high a rate of protection to the manufacturers in Canada, for the very obvious reason that the price of silver is fixed on the international markets, and Canadian manufacturers pay no more for the material put into their products than is paid by manu-

facturers in the 'United States or other parts of the world, consequently on many occasions the class of silver imported does not come into competition with goods produced in Canada. I am referring particularly to very old silver, which could be classified as antique, and which is allowed free entry into the United States. I have often felt that goods a hundred years old might be placed in a category similar to that adopted in the United States. Has the minister given consideration to reduction of the British preferential rate?


Charles Avery Dunning: May I deal with the
last part first, namely the advocacy of admitting antiques free.


Abraham Albert Heaps: Silver antiques.


Charles Avery Dunning: Only silver?


Abraham Albert Heaps: I am referring to only one
item.


Charles Avery Dunning: I thought the hon.
member mentioned pictures.


Abraham Albert Heaps: No, I referred only to
silver.


Charles Avery Dunning: And furniture?


Abraham Albert Heaps: No, just silver.


Charles Avery Dunning: It would have helped me very much if the hon. member had gone all the way, because I am resisting requests from people interested in obtaining private collections of various kinds of antiques. As a general rule, when importations of that kind are made for public institutions, refunds are given favourable consideration by the treasury board, on recommendation of the Minister of National Revenue. With regard to item 362 it will be noticed that there is no change with the exception of the addition of "n.o.p." The next item, "nickel-plated ware," formerly was in item 362, and we desired to make a reduction in the duty on nickel-plated ware, gilt or electro-plated ware, and hence extracted it from the precious metals. We are leaving the precious metals item where it is and reducing the duties on nickel or electro-plated ware.


Mr. BARBER:: What is the duty under 362c?


Charles Avery Dunning: The intermediate rate is 33| per cent. That is subject to a further ten per cent deduction under the French treaty, which would apply to all countries having the most favoured nation relation with Canada.

Customs Tariff


Abraham Albert Heaps: Has the minister the figures of importations under this item for the last fiscal year?


Charles Avery Dunning: Under the first item, that is the whole of the old item, which comprises both of the items at the bottom of this page, the total importations last year were $91,500.


Abraham Albert Heaps: Does that include Great Britain and the United States.


Charles Avery Dunning: Everything. I can give them :by countries if my hon. friend wishes it.


Abraham Albert Heaps: Oh, no.


Richard Bedford Bennett: As a matter of fact the tariff is not used for the purposes of price. The general tariff of 45 per cent was really to prevent the dumping into this country of the products of other countries when the price of silver was very low. That is why it was put there originally. The hon. member for Winnipeg North (Mr. Heaps) may be right as to the time having come to examine whether there is not stability in the matter of prices. I once bought in the United States a tankard which cost me 58 per cent of the price of it before I got through with it. I paid 45 per cent duty, and then the sales tax, and the three per cent, and I found that when the whole thing was reckoned up, although I never could quite understand it, it was nearly 58 per cent of the price of the article.


Charles Avery Dunning: It was my right hon.
friend's own tariff that was in effect?


Richard Bedford Bennett: Certainly.


Charles Avery Dunning: Well, I do not think it
was enough. I think he should have paid more.


Richard Bedford Bennett: I see my hon. friend has continued it. That is the worst of it.


Charles Avery Dunning: I am quite sure, however, that the statement of my right hon. friend is correct with regard to permitting this country to become the recipient of silver in any form from other countries, and perhaps I may say, without divulging international confidences, that this matter of silver is not without its difficulties of administration at the present time, from the standpoint both of the United States and of Canada. Anything which would permit silver in any form to come in large volume into this country from another country would, I assure my right hon. friend, create very great difficulties for Canada and for the United States in administering the present international silver agreement, which is responsible for the maintenance of the price of that article. " My hon. friend from Silver" is in his seat, so that I speak with some diffidence in this matter, because I am afraid of opening up a lengthy debate.


Abraham Albert Heaps: Can the minister give the
committee the total amount of goods manufactured in Canada under the two items just referred to


Charles Avery Dunning: The production?


Abraham Albert Heaps: Yes.


Charles Avery Dunning: Sterling silver hollow-ware, $134,000; sterling silver flatware, $175,000. The plated ware production is: hollow electro-plated ware, $1,150,000; flat electroplated ware, $905,000. That is the Canadian production.


Abraham Albert Heaps: What were the total importations under both items?


Charles Avery Dunning: $91,500 plus $1,330,000..


[Stage Direction]
Item agreed to.
Customs tariff-362c.	Nickel-plated ware,
gilt or electro-plated ware, n.o.p.:	British
preferential tariff, 17£ per cent; intermediate tariff, 33J per cent; general tariff, 45 per cent.
Mr. MaeNICOL: Why is there so large a reduction of duties under this item? For all I know, what is left may be sufficient, but the reduction is very substantial from what it was. The point is that since this government came in, the duty on importations under this item from the United States has been reduced from 45 per cent to 33i per cent.
Charles Avery Dunning: We are satisfied that it should be sufficient.
Mr. MaeNICOL: Are the manufacturers satisfied?


Abraham Albert Heaps: They never are.
Mr. MaeNICOL: Well, after all they are the employers of labour in this country. They are not going round with their hat in their hand asking for somebody to put something in it.


Charles Avery Dunning: I have not found that the test mentioned by my hon. friend is one that can safely be applied.


Richard Bedford Bennett: When it suits the hon. gentleman's purposes he uses it, when it doesn't, he does not.


Charles Avery Dunning: Just like my hon. friend-


Richard Bedford Bennett: -would ? Yes.
Customs Tariff


John Ritchie MacNicol: Are the workmen in the nickel-plated factories satisfied?


Charles Avery Dunning: I have no reason to think otherwise.


[Stage Direction]
Item agreed to.
Customs tariff-392b.	Forgings of steel,
rough machined and fitted or not, and handles of steel or of metal alloy in the rough, when imported by manufacturers of surgical and dental instruments for use in the manufacture of such instruments in their own factories: British preferential tariff, free; intermediate tariff, 27i per cent; general tariff, 30 per cent.
Richard Bedford Bennett: Does steel for making shafts for golf clubs come in under this item?


Charles Avery Dunning: No.


Richard Bedford Bennett: There are some anomalies in the tariff, and this happens to be one of them.


Charles Avery Dunning: These are surgical items.


Richard Bedford Bennett: This relates to forgings of steel and handles of steel or of metal alloy in the rough, when, imported by manufacturers of surgical and dental instruments. It is purely limited to that?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: The duty on the raw steel out of which golf club handles are made is higher than on the golf clubs, and it is a direct incentive to decreasing Canadian employment. One man with a small number of workmen in his particular place of business had to lay off two of them because clubs were brought in cheaper than the steel shaft out of which he was making them. He had been doing quite a little business. It seems to me that that is an item which might be corrected when the bill is before the house, because I do not think the minister desires to tax at a higher rate the shaft out of which the workman makes the club, than the club itself coming from the United States. I know little mistakes of that kind have crept in from time to time, and they should foe remedied.
Mr. D'UNNING:	Perhaps my right hon.
friend is not aware of the basic difficulty, which is that it is a conference item. The lowest rate to which it would be possible to bring it would be 25 per cent, in accordance with the British agreement, and I have felt that that is scarcely worth while.


Richard Bedford Bennett: Well, that would be substantial.


Charles Avery Dunning: I have had, as I assume my right hon. friend has had, voluminous and pointed correspondence from the particular party interested.


Richard Bedford Bennett: Perhaps they are not the same people, because it was a friend who wrote to me about it, saying: Why this anomaly?


Charles Avery Dunning: It is, of course, one of these anomalies. I think we might give consideration to the matter when the bill comes down, if my right hon. friend will take no exception to that procedure, bearing in mind that we cannot possibly go below the conference margin.


Richard Bedford Bennett: I know that.


Charles Avery Dunning: The claim made to me was that it would have to come down to 12 and 15 per cent in order to give him a chance to live.


Richard Bedford Bennett: No. The rate on one is 30 per cent and the other is 35 per cent at the present time.


Charles Avery Dunning: Quite. But I am speaking of the representations of the manufacturer concerned.


Richard Bedford Bennett: I am not familiar with them.


Charles Avery Dunning: The representations of the manufacturer concerned were that he had to have a rate of 12 and 15 per cent in order to live. Inasmuch as under the British agreement there was no possibility of giving him less than 25 per cent, I did not take the representations as seriously as otherwise I would have done.


Richard Bedford Bennett: I would remove the cause for complaint by putting them on a parity, at any rate.


Charles Avery Dunning: We can consider that. I will tell the commissioner to bear that in mind when the bill comes in.


Richard Bedford Bennett: It would remove one cause of complaint. We once had to do that, I remember.


Charles Avery Dunning: There is no objection on my part except that it appeared to be inadequate to the alleged requirements of the industry in question.


[Stage Direction]
Item agreed to.

Customs Tariff
Customs tariff-398a. Pipes and tubes of iron or steel, seamless, cold drawn, plain ends, polished, valued at not less than five cents per pound: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 30 per cent.
John Ritchie MacNicol: I assume this item relates to tubes used in the manufacture of agricultural implements?


Charles Avery Dunning: No.


John Ritchie MacNicol: Would not this item cover materials used in the manufacture of agricultural implements?


Charles Avery Dunning: These are polished, seamless tubes, not made in Canada at all.


Richard Bedford Bennett: Is not this handing the business over to the United States? The British preferential is free, but the intermediate rate is only 20 per cent.


Charles Avery Dunning: Great Britain paid 15 per cent under the old tariff and this is to increase the spread. Great Britain believes she can compete in this item.


John James Kinley: What type of tubing is it?


Charles Avery Dunning: Expensive seamless tubing, cold drawn, which is used mainly for dairy and creamery equipment.


John Ritchie MacNicol: I understood from the item that the cold drawn would not be polished.


Charles Avery Dunning: They must be polished.


[Stage Direction]
Item agreed to.
Charles Avery Dunning: I have a new item, No. 400, and I will ask my colleague to move the necessary amendment.


James Lorimer Ilsley: I beg to move:
That schedule A to the customs tariff, as amended by resolution No. 5 of May 1, 1936, be further amended by striking thereout tariff item 400, the enumeration of goods and the rates of duties of customs set opposite thereto, and by inserting the following item, enumeration and rates of duties in said schedule A:

400. Fittings and couplings of iron or steel, of every description, for iron or steel pipes and tubes; complete parts thereof:	British preferential tariff, 20 per cent; intermediate tariff, 271 per cent; general tariff, 30 per cent.


Charles Avery Dunning: This is a new item which puts fittings and couplings together. There has been great difficulty in administering these different items.


Mr. EDWARDS:: It is a case of when is a coupling not a fitting.


Charles Avery Dunning: My hon. friend has stated it exactly.


John Ritchie MacNicol: Would this cover malleable iron?


Charles Avery Dunning: If they are made of iron or steel, malleable is merely a condition.


Richard Bedford Bennett: "Malleable" is a quality of iron. Should not this amendment be made when the bill is in committee, in view of the ruling made by the chair the other day with respect to another amendment?


Charles Avery Dunning: It is not a change in rate.


Richard Bedford Bennett: It will be a new item; there is no item 400 here.


Charles Avery Dunning: Perhaps I should give notice.


Richard Bedford Bennett: This would be sufficient notice for the purpose. The Chair ruled the other day that an amendment to reduce the tariff was not in order when moved to a resolution in committee, that it should be moved on the bill. In order to be consistent, we should follow the same course in this case.


Charles Avery Dunning: I am content to have the item considered now and specially referred to in the bill, although I do not quite see the connection between the two incidents. There is no reduction involved here; it is just bringing pipes and couplings into the one item.


Richard Bedford Bennett: Why is it being done?


Charles Avery Dunning: The commissioner of
customs tells me that there is continuous difficulty in deciding what is a pipe and what is a fitting.


Richard Bedford Bennett: Then there is a change.


Charles Avery Dunning: All we are doing in the new item 400 is to bring piping and fittings under the one item. We will note it for special reference when the bill is being considered in committee.
Customs tariff-404. (b) For the running gear of other vehicles, n.o.p.: British preferential tariff, 22i per cent; intermediate tariff, 30 per cent; general tariff, 35 per cent.


Richard Bedford Bennett: I take it that this is to add the n.o.p.


Charles Avery Dunning: On account of the succeeding item.


[Stage Direction]
Item agreed to.
John Ritchie MacNicol: In connection with item 409b and the succeeding items down to 409k-


Charles Avery Dunning: With the consent of the committee, I should like to take together all the items in the farm implement schedule.


John Ritchie MacNicol: That was what I was going to suggest.
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Customs tariff-409b. Cultivators, harrows, seed-drills, horse-rakes, horse-hoes, scufflers, manure spreaders, garden seeders, weeders and complete parts of all the foregoing; British preferential tariff, free; intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409e. Ploughs; farm, field, lawn or garden rollers; soil packers; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 7i per cent; general tariff, 25 per cent.
Customs tarifit-409d. Mowing machines, harvesters, either self-binding or without binders, binding attachments, reapers, harvesters in combination with threshing machine separators including the motive power incorporated therein, and complete parts of all the foregoing:	British	preferential	tariff, free;
intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409e.	(i) Spraying and dusting machines and attachments therefor, including hand sprayers; apparatus specially designed for sterilizing bulbs; presure testing apparatus for determining maturity of fruit; pruning hooks; pruning shears; animal dehorning instruments; and complete parts of all the foregoing:	British	preferential	tariff, free;
intermediate tariff, 7i per cent; general tariff, 25 per cent.
(ii)	Fruit and vegetable grading, washing and wiping machines and combination bagging and weighing machines, and complete parts thereof; machines for topping vegetables, and machines for bunching and/or tying cut flowers, vegetables and nursery stock, and complete parts thereof; egg-graders and complete parts thereof, not including aluminum parts: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 10 per cent.
(iii)	Complete parts of aluminum for egg-graders: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 30 per cent.
Customs tariff-409f.	Hay loaders, hay
tedders, potato planters, potato diggers, fodder or feed cutters, ensilage cutters, grain crushers and grain or hay grinders for farm purposes only, post hole diggers, snaths, stumping machines and all other agricultural implements or agricultural machinery, n.o.p., and complete parts of all the foregoing: British preferential, free; intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409g. Incubators for hatching eggs, brooders for rearing young fowl, and complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409h. Hay presses and complete parts thereof: British preferential tariff, free; intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409i. Scythes, sickles or reaping hooks, hay or straw knives, edging knives, hoes, pronged forks, rakes, n.o.p.: British preferential tariff, free; intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409j.	Fanning mills; peaviners; corn husking machines; threshing machine separators, including wind stackers, baggers and self-feeders therefor; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 71 per cent; general tariff, 25 per cent.
Customs tariff-409k. Windmills and complete parts thereof, not including shafting: British preferential tariff, free: intermediate tariff, 71 per cent; general tariff, 25 per cent.
[Mr. MacNicol.j


John Ritchie MacNicol: Mr. Chairman, if I am not in order in what I am about to say, I hope you will tell me so. There is at present a committee investigating the prices of farm implements. Since the budget was brought down I visited a number of farm implement manufacturing plants and in every case I found them greatly distressed over the long list of items, which had been sent to them with a request for certain information in regard thereto. An implement manufacturer told me a few days ago that it would take his staff from four to six months to complete this schedule. He told me they had no staff to do this work and at the same time to carry on their own necessary work; if they are to do this they will have to engage additional help. It seems to me to be a pity that just when these industries are getting out of the depression they should be loaded up with all this extra trouble and expense.


The CHAIRMAN:: Is the hon. member referring to a committee of the house?


John Ritchie MacNicol: No, to a schedule of items that has been sent out to various implement manufacturers asking for certain information in connection with prices.


Charles Avery Dunning: But by a committee of the house.


Abraham Albert Heaps: Under the direction of the house.


Frederick George Sanderson: If the hon. member is referring to a committee of the house which is investigating the prices of farm implements he is entirely out of order, because that committee has not yet made its report.


John Ritchie MacNicol: 
Charles Avery Dunning: Which one was that?


John Ritchie MacNicol: The ruinous and disastrous, budget of 1924, before my hon. friend became-Minister of Finance.

Customs Tariff


Charles Avery Dunning: Perhaps I might be permitted to point out that following that budget, for some reason, this country and its industries enjoyed a greater measure of prosperity than had ever been known before.


David Spence: That was not because of the reduction on farm implements.


John Ritchie MacNicol: My conception of
prosperity is entirely different from that of many hon. members on the government side. My conception of prosperity is this, that factories should be induced to open up and give men work; but the result of that budget was to close factories and throw men on the labour market of Canada, thus greatly increasing the emigration to the United States of trained Canadians. So that our opinions in that regard are far apart.
I was looking at the budget schedules of 1924, and I notice that the minister, so far as item 409c is concerned, has reduced the duty still lower than it was in that ruinous, disastrous budget of 1924. In 1924 the tariff on ploughs and certain implements was 10 per cent under 409c, but to-day it has been reduced to per cent. I submit in all fairness that it is about time the business men of this house and those who really wish to do what they can to provide employment were heeded a little more. I have no fault to find with the attitude of any other hon. member, but my background has been with thousands upon thousands of men for many years, and if I speak at all I try to speak on their behalf. If I do not present their views adequately it is because I have not the ability to do so.


Charles Avery Dunning: You do very well.


John Ritchie MacNicol: In the budget debate of 1924 the present Minister of Trade and Commerce (Mr. Euler) made a very good speech.


Mr. EULER:: Thank you.


John Ritchie MacNicol: I would thank the minister a lot more if in connection with the present budget he would do what he did in 1924 and encourage others on his side to stand up and support the view he took then in that famous address of his. I wish to quote some of the remarks he made-and curiously enough they appear at page 1924 of the second volume of Hansard of 1924:
Then there are others like myself who believe that it is in the national interest that we should have diversified industries. I am willing to place agriculture first and to give a prominent place to all the industries that deal with the development of our natural resources; but I will also say that manufacturing must take a very prominent part in the essential industries of Canada if we want to build up a nation with an all-round development such as we ought to have. Such men believe that a tariff
may be used to maintain and to encourage industry, even though sometimes it may be, apparently, at some slight sacrifice. They believe that if Canadian workmen are to be paid good wages, that will enable them to live decently and comfortably, in many lines of industry they cannot compete on an even basis with the underpaid workmen of foreign countries.
These noteworthy remarks of the present Minister of Trade and Commerce, who was a private member in 1924, are just as sound to-day as they were at that time. Good wages cannot be paid by the Canadian manufacturer unless he has a substantial sale in his own home market for the things which he produces; and unless he has some means to protect himself against the low wages of some countries and the tremendous output of mass production plants in the great republic to the south. The hon. gentleman continued-I am quoting only what bears on the point I am making:
There are men-and I am one of them-who believe in a moderate tariff that will maintain Canadian industry. I believe in that as a wise policy. If that makes me a protectionist then I shall have to accept the designation. But I will also say that I do not particularly like the word "protection." In its original meaning it is beneficent and benevolent in its significance, but it has been so abused that it has acquired something of a sinister meaning.
I agree with the description of protection which the hon. gentleman gave on that occasion, and perhaps the word has been abused. I have always been of the opinion that if a tariff, the primary object of which is to provide employment, were carried into effect, there is no reason why the government could not regulate prices. I am not in favour of exploitation; I am not in favour of allowing manufacturers to charge exorbitant prices, and I see no reason why any government cannot protect the consumer, because the purpose of the tariff is not to permit the charging of exorbitant prices but to provide employment for Canadian workmen. I quote once more from the hon. gentleman's remarks :
I do not favour a prohibitive tariff but I believe in a tariff that will enable legitimate industries to live if they are efficiently conducted. I believe in that sort of tariff also for another reason, namely, that it will give employment to our people.
In my opinion that is the primary purpose of a tariff, to give employment to people. I have gone around a number of implement plants and recently I have seen hundreds of men working in one branch of production or another, and I could not help feeling that it was my duty on every occasion to say a word on their behalf.
Customs Tariff

The government has at this session given considerable relief to our western farmers in more waj's than one, and I support it in what it has been doing to make conditions better in the west. Quite a number of measures have been proposed, all of which I hope will result in better conditions there, because anyone who really knows anything about economics-and practically every member in this house does-knows that if the primary producer is not successful the whole country takes a backward step. If, therefore, the government does anything to improve conditions for the farmers it will have my support.
Going around industry, and with such knowledge as I have of industry, I find, as has been pointed out by other members, that the amount of agricultural equipment produced in this country is very small indeed in comparison with what is produced in the great factories of the United States. A few days ago I was going through the establishment of one large company. I have a thorough knowledge of industry, particularly of anything associated with iron and steel. I saw something that I had not realized before in connection with the agricultural implement industry, and that is the large number of jigs they have to use. I saw several large bins of them, and the estimate of the foreman was that they had 5,000 different jigs in that one plant for use in connection with drilling, pressing, or otherwise working up and getting ready the various items that enter into mowers, binders and all other agricultural equipment. In addition to that, they had a lot of equipment for the pressing of malleable iron. It appears that when the malleable iron parts used in various agricultural implements are received from the malleable iron plants, though perfectly constructed, they are not always true to shape and it is necessary to use dies to press them out. I counted over four thousand dies in one plant, and naturally these extremely costly dies and jigs are two of the reasons why agricultural implements may cost a little more to produce in this country than in the United States. Where an agricultural implement plant in Canada would use a die to press a thousand parts for a thousand implements the American plant would use a similar die to press perhaps fifty times as many, so naturally they can produce for less money. If the government really wants to do something for the farmers, and at the same time not destroy the agricultural implement industry, let it develop some plan whereby equipment, costly dies and jigs, such as that used by manufacturers, not only in the agricultural implement line but in other lines,

may be obtained at low cost, just as the government provides seed grain and one thing or another for our farmers.
I have been over a good deal of Ontario recently, and I can see where the steel makers of Owen Sound and other centres, who make bolts, nuts, bar iron and one thing or another for agricultural implement plants, are going to have less work. They cannot have more work when we see paraded in United States newspapers articles stating that shipments of goods of this kind to Canada are increasing. Every thousand additional parts made in Chicago or some other United States city for Canadian farmers means less employment in this country, and so all along the line. I think every member of this house, if he is not thoroughly familiar with what is manufactured in his own riding, should make himself familiar with it, and on behalf of the workmen in his riding rise in his place and oppose the importation of goods similar to those made in his riding. Take the city of Yarmouth, in Nova Scotia, I do not know if the hon. member representing that riding is in the chamber at the moment, but in that city there is, I am informed, an excellent plant which makes the duck and canvas that goes on the binders, one of the best lines of canvas made anywhere. A completed binder brought into this country fully equipped with canvas and everything else just takes away that much work from the Yarmouth plant. If a thousand binders are brought in it means that just that amount of work is taken away from the men employed in that plant. Then, in Montreal they make the tubes and other articles to which I referred a few moments ago. To-day agricultural implement firms in Canada are buying a large part of their requirements from this Montreal plant, which I believe is called the Canadian Tube and Iron Company, or some such name. Every hundred men engaged in Pittsburgh making that line of material for binders to be shipped to this country will displace a hundred men in Montreal or some other Canadian city. I cannot see anything else to it, and so it goes with all these items.
In the town of St. Mary's, Ontario, a very fine little town, at one time they made a large line of agricultural machinery. They are not now making a full line but they are making a number of small lines of excellent material. That company formerly made binders, mowers, side delivery rakes of a very high grade, hay tedders, hay loaders and so on, but they have had to discontinue manufacturing many of these articles and whether or not they have as many men engaged to-day as they had ten years ago I do

Customs Tariff
not know. Certainly when they had to discontinue many lines the number of men employed must have been reduced. The same applies to plough makers in Woodstock Brantford, Aurora, Owen Sound and many other cities and towns in Canada. I know very well that nothing I can say can alter any of these items; the government appear determined to crucify this industry to a degree. I do not say that they are doing so intentionally or that their motives are not sincere. I will admit that they are sincere, but nevertheless the jobs of a great many workmen in this country are in jeopardy as a result of these nine or ten items pertaining to agricultural machinery.
I should like to see some government reverse this policy and do as the late President Roosevelt did when he introduced the tinplate industry into the United States. This is the way in which the story has been told to me; I cannot vouch for it, but I assume it is true. He sent for various steel and tin makers and asked them if they could roll steel to the gauge of tinplate. They said that they could. Then he asked if they could provide enough tinplate and galvanized iron to supply the market in the United States. They said that they could not, without a tariff. So he asked, according to the story, "What tariff do you want to enable you to manufacture tinplate and galvanized iron in the United States in order to take care of this market'? They told him how much they wanted. I do not recall just what the rate was, but the story is that he said, "Well, we will advance that higher. We are going to try to have American workmen supply the tinplate and galvanized iron used in this republic, but we will not allow you to exploit the American buyer." In that way it is said that the American tinplate and galvanized iron business became established.
I do not see any reason why we cannot prevent exploitation, nor can I see why the jobs of these fine, solid machinists, blacksmiths and fitters of one kind or another engaged in the production of the hundreds of lines of material that enter into the construction of agricultural implements should be jeopardized in this country merely because it is said that agricultural implements are too high in price. It is an easy matter to regulate the prices of agricultural implements without crucifying the industry, but it seems to me that is what this tariff will do. In order to encourage hon. members representing ridings in which there are substantial plants to take a stand on this issue, I want to read some newspaper comments on a speech delivered by the present Minister of Trade and Commerce
(Mr. Euler) in connection with the budget of 1924. I quote from the Toronto Mail and Empire of May 10, 1924:
Mr. Euler: I say that is a policy which I cannot support

Mark you, Mr. Chairman, the present tariff lowers the duties even further than was proposed in 1924 with regard to ploughs and the other machinery included under item 409c.
I say that is a policy which I cannot support, if the words of the Minister of the Interior reflect the considered policy of the government, and it is a policy against which I must protest in the interests of my constituents-


William Daum Euler: May I interrupt? I am not anxious to go into ancient history, twelve years ago, but will my hon. friend state what he is reading from, or what the reference is?


John Ritchie MacNicol: It relates to the budget of 1924.


Richard Bedford Bennett: The deatlvknell of protection.


John Ritchie MacNicol: Yes, I assume that is what it was.


William Daum Euler: Well, my hon. friend should know, because that is important.


John Ritchie MacNicol: This present tariff is on the way to be the death-knell of industry.
-it is a policy against which I must protest in the interests of my constituents.
I would like to see other hon. members rise in their places and protest in the interests of their constituents. The hon. member for Trinity (Mr. Plaxton) should be on his feet, representing the large number of men who work for the Massey-Harris company. The minister continues:
I cannot make that protest either consistently or effectively by speaking one way and voting the other, and for that reason I propose to vote against the budget.
Continuing, the minister said:
Party allegiance should be something apart from tariffs, Mr. Euler believed. "If my views on the tariff do not let me call myself a Liberal, my lifelong conception of Liberalism has been incorrect."
I congratulate the minister on having said those words, and I should like to see other hon. members on the government side, representing not less than one hundred to one hundred and fifty substantial companies of this country whose businesses are going to be seriously affected by the lowering of these agricultural implement duties, rise in their places and use those noble words that the present minister used in 1924.
I want to say a word further about the workmen. A movement is commencing at present
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through which I believe that workmen in the plants in Ontario and elsewhere will establish a defence of their jobs for themselves. There are so few who stand up and defend the worker and his job, which has been seriously affected by so many asking for the lowering of duties. I have in my hand a placard, addressed to the workers in the plants. I hope that before this year is out every industrial institution in Canada will plaster its shops from one end to the other with information to enable its workmen to do something on their behalf to understand the tariff. This placard reads:
Your Business
Your job depends on Canadian tariff rates preventing unfair competition from workers in other countries.
These tariff rates are set by the members of the dominion parliament at Ottawa.
Your member of parliament should know what the textile tariff means to you.
He is your personal representative. He votes for you when the tariff rates are decided.


Charles Avery Dunning: Does my hon. friend
approve that?


John Ritchie MacNicol: Approve what?


Charles Avery Dunning: That sort of thing?


John Ritchie MacNicol: I approve workmen
becoming conversant with what provides a job for them, and the defence of their jobs. I realize that if 20,000 workmen in the United States make goods for shipment into Canada which are now made and can be made in Canada, that displaces 20,000 workmen in Canada.


Charles Avery Dunning: That, of course, is not
at all the question I asked.


John Ritchie MacNicol: And I approve the average workman becoming conversant with any information that will enable him to have a knowledge of what enables an employer to give him a job.


Charles Avery Dunning: Will my hon. friend be
good enough to tell me what institution posts that kind of notice in its plants, and will he place the whole notice on Hansard?


John Ritchie MacNicol: Yes, I will place this
notice on Hansard.


Charles Avery Dunning: And the name of the
concern?


John Ritchie MacNicol: The name of the concern is not on it.


Abraham Albert Heaps: The organization that put
it out?


John Ritchie MacNicol: I do not know the
organization that put it out. But I do not see anything wrong. Why should not the workmen of this country 'become conversant with the benefits of the tariff? It is high time they did.


Charles Avery Dunning: That is not making
them conversant with it.


John Ritchie MacNicol: Of course it makes them conversant with it, by directing their attention to the study of the tariff. I do not see anything wrong with that. I am not in accord with anything that gives any further trouble to the government in these trying times; on the other hand I am in favour of whatever will provide employment. My life has been different from that of many hon. members. I have associated with thousands of wTorkmen for many years. I have seen many men laid off and taken on, and I have always made up my mind that I would raise my voice in support of anything that would provide more employment. Agricultural implements are only one line; I hope they can continue in existence, but if they cannot, I shall be sorry. The government know what happened to many plants in 1924. Someone said something about the good times that came after the tariff of 1924. I know that in September, 1924, a large delegation, manufacturers from all over, Toronto and elsewhere, came to Ottawa to attend what was called an unemployment conference. I do not remember who called it but they met here to try to suggest ways and means to provide employment.


Mr. REID:: Where was my hon. friend
last year when the industrial and international relations committee was sitting and I wanted Canadians hired on our ships?


John Ritchie MacNicol: Well, I have been in the house right along: I am one who is generally in his seat.


Thomas Reid: I have missed the hon. member out of his seat many times.


John Ritchie MacNicol: The hon. member is
out of order; he is talking about a committee I was on and a report which I supported, as I assume the hon. member did.


Thomas Reid: The hon. member did not
support it.


John Ritchie MacNicol: In closing, I want to
tell the minister that I do not question his sincerity in the action he is seeking to take; he is perhaps doing what appears to him best. On the other hand I hope he will grant my

Customs Tariff
sincerity from my background of long association with workers and my firm conviction that I should on all occasions do what I can to defend the employment of workers. I do know this, that when a plant has a thousand men working there are a thousand contented families. I was associated myself with a plant that formerly had nine hundred men on its payroll, and to-day, not as a result of anything the government did, that same plant has, I believe, about one hundred men. That is not a line of goods which has been affected by the tariff; this situation is due to conditions of the times, perhaps.


Charles Avery Dunning: We are not guilty of
that one?


John Ritchie MacNicol: No; the minister will
admit I have given, him credit for many things, and I hope that whenever I can say a good word for what anyone is doing, irrespective of party, I shall do so. On the other hand what I have said is based upon my experience and observation of a number of agricultural implement plants, seeing what they are up against; they are trying to keep going but they fear that they may not be able to do so.


Mr. GOLDING:: I have always been interested in hearing the hon. member for Davenport (Mr. MacNicol) discuss the different questions that come up in connection with our tariffs, and the interests of the workingmen. I suggest every hon. member should be interested in the working man and the agriculturist. Representing an agricultural constituency, I am aware of the situation in which the farmers find themselves. When one goes among these people it is most discouraging to find that they are scarcely able to make ends meet, to say nothing about being able to enjoy the comforts of modem conveniences, to which they are certainly entitled.
When the government take action of this kind in connection with the implement industry I am quite sure they have no intention of trying to injure the workman. They are attempting to better his position and also that of the agriculturist, who is engaged in the greatest industry in Canada to-day. If the hon. member who has just spoken is so concerned about the workman-and I am going to confine my remarks to the agricultural industry-then I think he ought to read the records of what happened after 1924, when the tariff was reduced. I am quite satisfied that if the reduction in tariff made at that time had thrown thousands of people out of work, as we are asked to believe, the government at this time would not be putting the duty back to where it was in 1930.


Mr. MASSEY:: Would the hon. member permit an interruption.


William Henry Golding: Just a minute; I do not often speak in the house. The hon. member has said that we ought to have a reversal of the present policy. We had! that in 1930, when the tariffs on these commodities were raised materially. We had an increase in the tariff on binders amounting to 300 per cent and in that on seed drills amounting to 233 per cent. We could go through a long list of items, showing a complete reversal of policy in 1930. I take it that the hon. member is concerned about the workmen, as I am. I have a keen interest because I spent most of my life in the industry. The report of the price spreads commission shows that the average number employed in the implement manufacturing industry for the years 1931, l932 and 1933 was 3,878, whereas in the two years preceding 1931 the figure stood at 9,068. The average number employed in the nine full years between 1922 and 1930, was 8,780. According to the bureau of statistics in the years 1931, 1932, 1933 and 1934, the average number was 3,500. The average wages and salaries paid in the nine years between 1922 and 1930 is given as $1,206, while the average in the years 1931 to 1934 stood at $1,010. The average production for the nine years I have indicated is given as $31,723,000, and that for the latter period stood at only $7,457,000. In 1929 there were sixty-two plants operating and in 1934 only thirty-five.
The hon. member for Greenwood (Mr. Massey), in speaking a short time ago, indicated that 18,000 jobs were in jeopardy. Today the hon. member for Davenport has asked why so many jobs should be jeopardized. I should like to place on record figures given to the price spreads commission showing the numbers employed in the industry. The hon. member for Greenwood said, "I say to-day that the jobs of 18,000 men are at stake. Yes, and how many more jobs are there at stake in industries which contribute raw material?" I take it for granted from the hon. member's statement that there are 18,000 jobs in the industry itself. The report of the price spreads commission indicates that in 1929 the total number employed in four of the largest agricultural implement concerns was 10,408, and in the ten smaller concerns, the sections of the industry which represents over ninety per cent of the production, 708 were employed, making a total for that year of 11,106. In 1933 there were 3,880 employed. When we refer to the number employed, what do we mean? First of all, we have the factory workers, and we find that in 1929, there were 7,276 employed, whereas in 1933 there were
Customs Tariff

only 1,989. In 1929 there were 172 employed in factory administration, and in 1935 there were 105. In 1929 there were 1,201 clerks employed, and in 1933 only 515. In l929 the figure for selling, or for agents, is shown as 1,709-5 and in 1933, it is 832-6.
The table is interesting from the viewpoint of the worker. Hon. members who have spoken have shown great concern for the worker, and may I say that he is the man in whom I am interested. Further than that, I have a great interest in the farmer who, under present conditions, is scarcely able to exist. We find that in 1929 in the four large industries executives salaries averaged $7,394, and wages to workers averaged $1,219. What was the situation in 1933? In that year the executives still had the high average of $6,512, but the average for the factory worker, the man who produced the goods, was reduced to $837. If we take the figures indicating what happened between 1924 and 1930 and those for the period from 1930 to the time the figures were given to the price spreads commission we must agree that during the previous years the worker was in a far better condition than he was when a duty of twenty-five per cent existed. That must be the conclusion, if we are going to attribute it all to government interference with tariffs.
I submit that the figures are all against those who contend that the worker is going to lose his job if .the tariffs on implements are reduced. So far as my personal experience is concerned, the best years the country had were when tariffs on implements were the lowest, and the best years the farmers had were when tariffs were the lowest. I am sure that the chief concern of the government is to help the worker and also .to help the agriculturist-. My hon. friend referred to what happened in 1924. He said tariffs were reduced and disastrous results followed. What are the figures? We find that, according to the bureau of statistics, in 1924 there were 6,700 employed in the implement business; 1925, 7,559; 1926, 10,091; 1927, 11,011; 1928, 10,867; 1929, 11,408; 1930, 7,405. Then we come to the time when the tariff was increased. If that was calculated to help the situation it should be reflected in the figures.


John Ritchie MacNicol: Will the hon. gentleman repeat how many were employed in 1930, the first year of the depression?


William Henry Golding: There were 7,405.


John Ritchie MacNicol: That was the first year of the depression. The hon. gentleman seems to forget all about the depression.


William Henry Golding: I am not forgetting about the depression. I have been in this business for thirty-five years. In 1931 the number employed was 4,471; 1932, 2,758; 1933, 3,039; and 1934, 3,706.


John Ritchie MacNicol: Improving.


William Henry Golding: That was the situation with reference to the employees. I want to be fair, but if the tariff itself was to be the means of providing these men with work, as was promised in 1930, it absolutely failed, and if a reduction in the tariff was calculated to throw men out of work, as we were told in 1921, the figures show that the very opposite happened. I remember the debates and discussions that took place in 1921 as to what would happen if these tariffs were reduced. But these figures tell the story better than any discussion on the platform or anywhere else.


John Ritchie MacNicol: The -hon. member recalls what happened in the election of 1925, I
suppose?


An hon. MEMBER:: 1935?


John Ritchie MacNicol: In 1925.


William Henry Golding: I am not concerned with what happened in any election. I am citing these figures.


David Spence: Oh, give us some figures of your own.


William Henry Golding: I could do that. Let us see what happened to capital. In 1924 the capital invested in the industry was, in round figures, $82,000,000; 1925, $81,000,000; 1926, $78,000,000; 1927, $88,000,000; 1928, $91,000,000; 1929, $103,000,000; 1930, $98,000,000. In 1934 it was $55,000,000. Let us consider the amount of wages paid after these "disastrous" tariffs were brought into effect in 1924. In that year-I am giving round figures-salaries and wages were $8,000,000; 1925, $9,000,000; 1926, $12,000,000; 1927, $13,000,000; 1928, $13,000,000; 1929, $14,000,000; 1930, $9,000,000; 1931, $4,000,000; 1932, $3,000,000; 1933, $3,000,000; 1934, $3,000,000. If anybody, in face of these figures, can stampede the industrial worker, he can do more than I would ever attempt to do or than I think anybody should attempt to do.


Major James William Coldwell: I think one should provide some antidote to the speech of the hon. member for Davenport (Mr. MacNicol). In my opinion the reductions that have been made in the tariffs on farm implements are to be welcomed and the government is to be commended for having made them. I should

Customs Tariff
like to have seen implements put on the free list, and the hon. member for Davenport provided me on one occasion with what is perhaps the best argument which has yet been made in the house for such a proposal, in stating that the cost of a group of five implements at Hallock, Minnesota, was higher than the cost of the same implements at Emerson, Manitoba.
We have heard a great deal about the workers. The hon. gentleman who has just taken his seat (Mr. Golding) gave some very interesting figures regarding the salaries and wages of workers during a number of years. When I was a boy I was brought up in an atmosphere of political discussion, and the particular subject that was keenly debated in my boyhood days was Mr. Chamberlain's tariff reform proposals. I well remember it used to be said that we need not worry about a tariff because the foreigner paid the tax. Well, then I bought a ticket to Canada, and I found that in this protected country the people of Canada paid the tax. But here I encountered an entirely different argument, namely that it was necessary to have the tariff to foster our infant industries. That was twenty-six years ago, and apparently the argument still persists that we should have the tariff to protect industries which are infants and need some protection; that is particularly true, of course, of the agricultural implement industry. Yet we find that the industry is one of the largest in Canada and that a considerable percentage of its output is sold in foreign markets where it has to compete with that of other countries. Consequently, it seems to me, the industry should have reached the adult stage by this time and we might quite safely leave it alone.
Though I should like to have seen implements placed on the free list, I am not going to make a motion to that effect, as I did on another occasion, because I believe that the government is to be commended for having gone so far as to reduce the duty by 17i per cent in one year, and that we should see exactly what the reaction will be in the next few months. I should like to point out that only industries which are well organized and have reached the stage of trustification can possibly maintain prices at a high level in the face of decreased protection, and it seems to me that implement companies have made a very serious mistake, from their point of view, in increasing the prices of their products when the tariff protection was reduced. I think, if this continues, the government should take the appropriate steps to see to it that advantage in this way is not taken of the present situation.
I do not propose to say a great deal more about the matter except that I know the figures given a few moments ago by the hon. member who immediately preceded me are correct, because I looked them up. I have noted one point. Whereas the managerial end of the. industry maintained the salaries that were being paid, the ordinary, common run of the workers took very substantial cuts. I worked this out in connection with the four largest companies, and I find that fifty managerial employees received 2-57 per cent of the total wage bill in 192$ and 7-51 per cent in 1934. In the ten smaller companies the rate was something like nine per cent in 1929 and fifteen per cent in 1933.


Charles Avery Dunning: Did that come about by increases?


Major James William Coldwell: No; there were decreases.


Charles Avery Dunning: Uneven decreases?


Major James William Coldwell: Yes; the cuts fell more heavily upon the lower paid people. This fact was brought out by the price spreads inquiry: The more highly protected an industry, the worse the conditions in it. I do not say that this is true of the agricultural implement industry; I make that as a general statement. This has been found to be so in the textile industry. In connection with the. discussion on crude oil I stated that the producers of western Canada had to buy in a protected market while they had to sell in markets where there was no protection. The producers of western Canada are not in a position to buy implements to-day. A short time ago the hon. member for Winnipeg North (Mr. Heaps) said that we should let antiques come in free. If things go on as they have been going, many of these producers in western Canada will have to import antique implements in order to obtain repair parts, and I suggest that they be allowed to come in duty free. I just rose to say we in this corner are glad to see the reductions and we hope they will be reflected in the price levels to our producers.


Denton Massey: I had the privilege of speaking in this committee on May 5 in defence of the workers engaged in the farm implement industry. I spoke out of a deep sincerity of purpose and with some knowledge of the facts. Since that date I have listened to many discussions, both in and out of this chamber, relative to the points covered in my remarks. I have the highest regard for the integrity, honesty and well-meaning purpose
Customs Tariff

of those who speak in this chamber, and that which I have to say now is said out of that regard.
The hon. member for Huron-Perth (Mr. Golding) referred a moment ago to several matters in connection with the implement industry which to him appeared to be salient and important. He had perused some figures given him by the bureau of statistics, and he referred to other figures as well that told a story which he interpreted in the way he disclosed this afternoon. Again I say that I do not for a moment doubt the sincerity of purpose behind that interpretation and I know my hon. friend will not misunderstand me when I say that figures on paper, taken without knowledge of the facts behind them, are insidiously dangerous and may be terribly misleading. I heard the hon. member refer to 1924; I heard him refer to 1929; I heard him refer to 1930, and right up to and through 1936, without a single word of reference to world conditions. I heard him refer to implements in 1924 and to implements in 1936 as if he were speaking of the same implements. I repeat that it is very misleading merely to consider figures on paper without a knowledge of the facts back of those figures. There were low duties on farm implements in 1924, in 1926, and up to 1929; it is true that the business of Canadian companies increased, but the hon. member made no mention of the reduction in the duties on raw materials going into those implements.


William Henry Golding: I am in favour of that too.


Denton Massey: The hon. member made no mention of the reduction in the duties on raw materials; he made no reference to the fact that a preference in duty was given to the manufacturers of farm implements by way of a reduction from 37^ per cent to six per cent as far as their raw materials were concerned. When the hon. member was referring to the increase in the business of Canadian companies, did he mention the increase in the business of other companies? Did he mention that that increase was out of all proportion to the increase in business of Canadian companies? It is very simple to attempt to defend an argument with figures on paper without reference to the facts. What percentage of increase in farm implement business did the Canadian companies enjoy compared with what was enjoyed by other companies?
Why did the hon. member challenge the figure of 18,000 which I gave as the total number of men engaged in the implement industry? I propound again that that figure

is absolutely accurate, even in the face of the figures from the bureau of statistics quoted by the hon. member. These figures, I assume, do not include agents, agents' helpers and so on. Let me take a hypothetical case. Here are two men who are depending for their livelihood upon their jobs. Here is one man depending for his livelihood upon his job. Is not the principle involved in taking away the jobs of the two men exactly the same as that involved in taking away the job of the one man? What matter if it is 18,000 or 9,000, the principle is the same, so why debate the exact dimensions of the figure?
One cannot help being alarmed when he considers that this is an old and established industry, made up of various companies within it, which has made a magnificent contribution towards the development of this country but which is threatened to-day without a chance being given to it to make representations on its own behalf. I am not standing in my place here this afternoon for the purpose of taking up the time of this committee, for the purpose of objecting to what that one said or what this one said, or for the purpose of having some words of mine recorded on Hansard; I am here with all the earnestness of which I am capable to urge upon the government, as I did before, the fact that there are those who regard it as hopelessly unfair when the criminal is apprehended and sentenced before his trial.


John James Kinley: That would not matter if he is a criminal.


Denton Massey: Would you take the law into your own hands and say that he should be sentenced before his trial?
Hon. members were no doubt interested in hearing from the hon. member for Rosetown-Biggar the respective percentages of the earnings enjoyed by those who work with their head and their hands and those who work with their heads. The hon. member for Rosetown-Biggar (Mr. Coldwell) compared from memory the percentage of salaries paid compared with the total moneys paid by the implement industry in 1929, I believe, and in 1934. In 1929, it was two per cent, was it not?


Major James William Coldwell: 2-5.


Denton Massey: Compared with-


Major James William Coldwell: 7-51.


Denton Massey: -in 1934. I am -not here
to speak for the man who is an executive alone, not by any means. I worked up from the factory to an executive position in the implement industry and I felt that my salary

Private Bills
was far too low; in fact I knew it. There are those who hold positions of importance in the implement industry who, in my estimation, may at times have received salaries higher than should have been paid. I felt so at the time and feel so to-day. But I submit that it is unfair to the industry as a whole to take the percentage of salaries of executives in one year and to set that percentage beside the percentage of salaries paid in a year of deep depression, when naturally the number of those who are in factories and in other fields where wages are paid is reduced. In one company alone of which I know, $5,000,000 of so-called head office expense and other savings along that line was taken out per annum, in times of depression when hundreds are employed instead of thousands. The executives to whose salaries reference has been made this afternoon by the hon. member for Rosetown-Biggar have had reductions of ten, twenty, forty and perhaps fifty per cent, but the men are still there; for someone must conduct the executive responsibility of the business.
The question of foreign markets for the implement industry as a whole has been a most difficult one. Questions of exchange, questions of this, that and the other have come into the whole picture, making it necessary for some companies, if they wish to maintain their business in foreign countries, to change their method of distribution and perhaps of manufacture. Then the question is asked in this chamber: Why is it that if a Canadian company cannot compete in its own country it can compete in a foreign country? I had hoped that my attempt to make this clear, when I spoke in this chamber on May 5, had registered to stay; but the very fact that in the United States last year the volume of business was twenty times what it was in Canada, and the very fact that we are right next door to the United States, make a colossal difference to the one who manufactures and sells in Canada. But if one goes to some foreign country where sales are relatively small, where even large companies compete on the same basis as small companies, for the reason that their selling organization is not nearly so large proportionately in that country, then I postulate that the picture is entirely different.
We face in the implement industry in this country to-day a far different situation from that which prevailed in 1924 and in other years before 1929. As I say, the whole picture is changed. Millions upon millions have been spent by the implement industries in both this and other countries for the development of machines; millions have been spent in this 12739-194
and other countries for the maintenance of service, which has not been permitted in one iota to vary in its efficiency at all times even when sales were dropping and the bottom was falling out, and this not in Canada alone but to an even greater degree throughout the world. There has been a challenge to the industry to maintain itself through these years and the industry has done so.
I have the highest regard for the farmer and the keenest appreciation of his problem, and any measure which can be introduced on his behalf and for his benefit, which is not only in his interest but in the interest of the country as a whole, I endorse every time. But why is it there is always this fiendish glee in pursuing the implement manufacturer, who seems to be regarded by so many as the arch villain of the piece? Three dollars out of every hundred dollars spent by the farmer is spent for implements. I tried to point that out the other night. Why do we not pursue some of the other manufacturers who furnish the farmer with goods? In this chamber I read a list showing that articles in everyday use on the farm are priced per pound higher than implements are priced per pound, and an implement lasts anywhere from ten to fifteen or twenty years. I myself have serviced a binder cutting its forty-fifth crop. Why this relentless pursuit of the implement industry alone? Does the implement industry itself hold in its hand the key to the success of the farmer? Does this industry alone hold in its hand the key to his failure?
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.


PRIVATE BILLS
[Stage Direction]
Bill No. 62, for the relief of Pedro Alfonso Baptista.-Mr. Johnston (Lake Centre) (for Mr. Jacobs).
Bill No. 63, for the relief of Louise Isabel Sutherland Chaplin.-Mr. Casselman (for Mr. Walsh).
Bill No. 64, for the relief of Clara Violetta Dodge Connolly.-Mr. Heaps.
Bill No. 65, for the relief of Marie Consuela Hill Montabone.

Mr. Johnston (Lake Centre) (for Mr. Bothwell).
Bill No. 66, for the relief of Lona Marie Vaughan Burnett Gravina.-Mr. White.
[Stage Direction]


Criminal Code-Death Penalty

[Stage Direction]
The house resumed from Tuesday, May 19, consideration of the motion of Mr. Blair for the second reading of Bill No. 10, to amend the criminal code (death penalty).
Mr. BLAIR:: Mr. Speaker-


Mr. SPEAKER:: I would direct the attention of hon. members to the fact that if the hon. gentleman speaks now he will close the debate.


John Knox Blair: Mr. Speaker, I will endeavour to be brief, for various reasons. In dealing with this question of the abolition of hanging and the substitution therefor of the lethal chamber, there are different theories of punishment that come to mind. The first is retribution; the next is the theory of deterrence; the next is the reformative theory; the next is the educational theory; the last is the theory of disapprobation, and sometimes there is restitution.
In dealing with this question previously we discussed the theory of retribution, and we did not hear anyone approve hanging for the purpose of retribution. That is the old theory, an eye for an eye and a tooth for a tooth, the theory that a man should be punished because he deserves punishment. That is looking backward, punishing a man as a fact and not for the benefit of the social order. We feel that this old dispensation has gone, and I was glad to note that hon. members did not approve that old theory of retribution. That was the theory which prevailed in Scotland when they massacred one another; it was the theory of the guillotine in France, when they beheaded one another, but that theory has now pretty well disappeared.
Then we come to the theory of the deterrent effect of punishment. The strange fact about punishment is that the more we progress in knowledge and intelligence the greater becomes the sphere of crime. Crime is the product of the social order, and it seems that the higher we rise in the social order the greater amount of crime we have. The tendency has been that though crime has become largely extended the severity of the punishment, broadly speaking, has decreased. At one time, not so many years ago, in Great Britain there were two hundred crimes for which people could be hanged. To-day there are only four or, practically speaking, only one, that of murder. The deterrent theory is perhaps the most important question to be considered. It has been suggested during this 
debate that we punish people for the benefit of the social order, and this theory is much to be preferred to that of retribution. We have a utilitarian motive, as Bentham expresses it; we punish for the purpose of preventing similar wrongs by others against the social order, so we think the deterrent theory is good. But that theory has to foe watched carefully, 'because we can make errors in it. For instance, if the deterrent theory is beneficial, why not have all hangings in public squares, as was the case long years ago? That finally met with the disapproval of the public; we found that it was a detriment to the social order, so hangings were carried out in private places. I think that was a correct move to make.
The next question is whether we should punish so severely as to cause pain. I still have the utilitarian idea that pain has no beneficial effect. If we are not punishing for a purpose, then to inflict such punishment as to cause pain is a sin against humanity. If we can punish the victim and at the same time improve him; if we can punish him so that the punishment will bring about an educational reform, that might be different. I would not be opposed to punishment of that kind, but when we punish a victim on the edge of death, when no benefit can be derived, I think that policy is entirely wrong..
I have 'before me many expressions of opinion from different associations and organizations. I am not going to take time to read them all, but I should like to make some-reference to a few. I have a communication from the Ontario sheriffs' association, as follows:
That in the opinion of the sheriffs of Ontario in convention assembled, the method of inflicting the death penalty in use in Canada is a relic of mediaeval days and the advance in humanitarian civilization calls for the substitution of a more human method. Furthermore in our opinion a central place in the province should be provided for imposing the death penalty, thereby ensuring and facilitating the proper administration of justice and materially reducing the considerable cost to the public of the present gruesome method.
This is from the Halifax Herald:
Here is a case where a man from another province invades a peaceful local community, murders and robs a respectable and almost helpless citizen, and sets fire to his house in the hope of concealing the crime, which he has now confessed. Notwithstanding his confession this man will still have to receive a formal trial. A jury will have to be summoned for the purpose, and very considerable cost incurred, most of which will fall on the ratepayers of a municipality which has been deeply sinned against instead of sinning. But there is worse than that to follow. If the

Criminal Code-Death Penalty
accused should be convicted, his execution will follow as an additional and most distressing burden on the officials of that municipality. This is conspicuously unfair and unjustifiable. There is no modern excuse for it. If a less sentence than that of death were imposed on this or any other criminal, the convict would at once be removed to a central penitentiary to undergo punishment. Only in the case of murder is the municipality compelled to provide for the execution of the court's sentence.
Then I have a letter from Arthur Ellis, the hangman. He says:
I would deem it an honour to be able to assist you or any other responsible party in the attainment of this humane reform. This question, I am led to believe, will come up for discussion at the interprovineial premiers' convention in Ottawa next week, but I am sure on account of it being of great importance it will be shelved to be taken up by some committee who really know nothing of the situation or of this serious matter....
Arthur Ellis trying to have hanging set aside 1
I might refer to the experience of other countries. I have opinions from many other countries and from many states of the United States. Some of the states still approve hanging. The state of Connecticut changed to the electric chair, as did the state of New York. A number have changed to the lethal chamber.
I have letters from most of the provincial premiers approving the change in our method of punishment; the only one who seemed indifferent was Mr. Taschereau, of Quebec. His letter reads:
I am in receipt of your letter of March 26, regarding the best method of executing criminals.
I beg to state that I have no set opinion on this matter. Hanging is perhaps not a most humane method of executing criminals, but it is after all perhaps the best deterrent, and this, to a great extent, is what society has in view in instituting capital punishment.
I have a letter from Arizona, which has changed to the lethal chamber; a letter from Colorado strongly approving the lethal chamber; one from Wyoming; one from Nevada which I think I should read because some criticism was made of their methods. This is from the attorney general:
There was a great deal of discussion and quite a good deal of criticism of this method of inflicting the death penalty in such cases in this state when it was first adopted. This criticism resulted in quite a thorough investigation of the method and of its effect on those who were subjected to the death penalty by means of lethal gas, by prominent physicians both of this state and some of our neighbouring states. After quite a thorough and extensive examination by such physicians of the first 12739-194i
few instances and first few persons who were subjected to this penalty, these physicians determined that this was the most humane method known by which the death penalty was inflicted.
I greatly appreciated the fact that the Minister of Justice (Mr. Lapointe) the other day spoke with some approval of this bill. I was glad to notice that the hon. member for Winnipeg North Centre (Mr. Woodsworth), the hon. member for Broadview (Mr. Church), the hon. member for Fort William (Mr. Mclvor), and the hon. member for Hamilton West (Mr. Wilton) also spoke in favour of it. The hon. member for York South (Mr. Lawson) spoke to some extent in opposition, but still he made a statement which I think is helpful, as to the deterrent value of punishment. He said that the greatest deterrent is the certainty of prosecution and the certainty of punishment in case of conviction.
The leader of the opposition (Mr. Bennett) criticized this proposal and said:
We must not forget that those about whom we are so solicitous were not solicitous for those whom they destroyed. When they wreaked their vengeance, by murder dark and foul, they were not thinking of the pain they caused or the injury they did; they were not thinking of the sorrow they caused to those who survived. In this age there are always-manifestations of our becoming victims ofi maudlin sentimentality and thinking in terms of the pain and suffering of one whom we are removing from society because of his offences against it, but at the same time I suggest that we should never forget those who have suffered because of the offences which have been committed.
I think the leader of the opposition was wrong in one or two of those statements. I think we should forget, if possible, the one who is gone. We should direct our attention to the social order to prevent a repetition of similar crimes. This idea of stirring up sentiment because of the killing has to do with the theory of retribution, which should not be present in our law courts or in our arguments on this matter. The leader of the opposition accused some of us who support this bill of maudlin sentimentality. That, I think, was a very unfortunate word, and I rose to correct him at the time. "Maudlin" comes from the French spelling of "Madeleine" which refers to the sympathy of Mary Magdalene. We have the approval of a higher authority than the leader of the opposition for the sympathy of Mary Magdalene. I hope I am one of the victims of that sentiment; I think it would be a good thing if many of us had more of the Magdalene's sentimentality and sympathy for the poor classes. I think the leader of the

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opposition used that word without realizing the seriousness of its implication.
Now, Mr. Speaker, this bill has received much approval from most hon. members I would say, who have expressed their views. It has been suggested by the Minister of Justice that I should withdraw it until the matter can receive further consideration, and I think that is the proper method. This question should not be dealt with hurriedly; it is a serious matter and should receive due consideration. I am delighted to think that the Minister of Justice is prepared to give it such consideration. He has suggested that I bring it up at the first week of the next session. I am, therefore, glad to adopt his suggestion.
Bill withdrawn.




[Stage Direction]
The house resumed in committee of ways and means, Mr. Sanderson in the chair.
Denton Massey: When the committee took recess at six o'clock I was speaking of some questions in the minds of many relative to the situation in regard to the farm implement industry, as a part of the whole picture of Canadian industrial and economic life. I have only a few more words to say, but to me they are exceedingly important and I hope hon. members will feel the same way.
One cannot remain long in this august chamber without realizing with crystal clearness that throughout this vast dominion we have a series of sections, the outward manifestations of which are found within those sections. One realizes there is a group here, another group here and another here across the dominion, possessing points of view peculiar to themselves and points of view which to them are exceedingly precious. It is difficult indeed, particularly for western farmers, to catch the point of view of the eastern industrialist. In turn it is difficult for the eastern industrialist to catch the point of view of the western farmer.
We are Canadians, and as such we are interested in the fullest and best for this Dominion of Canada. No one section is pitting itself against another or striving for any supremacy peculiar unto itself. It is to be sincerely hoped that, according to the sentiment so ably expressed on more than one occasion by the Minister of Finance, there will be built up within Canada a feeling of confidence in the country not only as a country but as a producing country, producing

the products of the farm and those of the factory. It would seem to me that any step taken further to sectionalize this dominion, or further to give expression to the desire of one part to achieve for itself at the sacrifice of another, is after all that which must be regarded as definitely unfortunate. The eastern manufacturer finds it difficult to understand why the western farmer demands that certain things be done when, as a result of those very demands, the eastern workman realizes that his job is in jeopardy.
Those of us who take a keen interest in the affairs of the country-and that means all hon. members and many thousands of people outside this chamber-do not want to see injustice done to any one section. If-and this is only an assumption; I do not concede it for a moment-the implement companies have been unfair and have functioned in a manner which has brought about the exploitation of the farmer, then indeed those implement companies should be brought to task. Thus it was that when it was sounded from coast to coast that there was to be a committee to investigate the implement industry and to make a report, both sides of the house were satisfied. For, indeed, it was felt that the offspring of that body would be conceived and born in fairness. To-day I believe that committee still sits. To-day the tariff on farm implements has suffered its second reduction since the first of the year.
I postulate that this condition brings about an unfairness which is felt in the manufacturing east, while the primary producing west hopes that it may bring a reduction in implement prices and, judging from what has been said by hon. members, regardless of the effect on industry in the east. In all sincerity and deepness of feeling, speaking as one representing a constituency in which industrial workers make their homes, I ask that due consideration be given this great question, for indeed it is a great one. Nine thousand men engaged in industry-or is it 18,000? I say it is 18,000. Regardless of whether it is 9,000 or 18,000, let us say: "Here are 9,000 breadwinners"; "Here are 18,000 breadwinners"-what matter the number? The principle is the same. I would be remiss in the responsibility placed upon my shoulders if I failed to stand in my place and to raise my voice in urging the government to reconsider this tariff item.


Mr. LEADER:: The hon. member for
Greenwood who has just sat down has made an excellent speech in defence of the agri-

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cultural implement industry. I should like to say a word for the farmers, for that inarticulate mass whose voice is very seldom heard, that mass of the Canadian people who have usually been the prey of implement manufacturing companies and other combinations that infest this land.
I do not for a moment doubt the sincerity of the hon. member. He is imbued with a desire to help the Canadian people, and especially that class which he represents. I, too, would be remiss in my duty if I did not have something to say for the people whom I represent. When he speaks so eloquently in defence of the manufacturing industry I feel that I want to say something about the farmer who must buy the implements from the companies that manufacture them. May I say that after the duty on agricultural implements had been cut in half, and when the announcement was made that the price of those implements had been increased, rather
than reduced, not only the farmers but the townspeople were shocked.
I hold in my hand a telegram from the board of trade of the city of Portage la Prairie condemning the action of the industry in increasing its prices and asking that something be done. We expected that after the duty had been reduced to 12| per cent we would get the benefit of the reduction. I do not intend to go into figures; that was done, I believe, by the hon. member for Huron-Perth (Mr. Golding). I wish to give figures of the prices of farm implements in my home town, Portage la Prairie, showing what we expected after the reduction, and what we got. I do not want to delay the committee any longer than is necessary, but I think it is very desirable that this information should be placed on Hansard. In the last column I am going to give what I call the "gyp" price of the different implements. The figures are as follows:
6-	foot binder complete	
7-	foot binder complete	
8-	foot binder complete	
No. 6 corn binder	
10-	foot hay rake	
5-foot mower	
5-foot oil bath mower heavy. . ..
20 D disc drill	
24 1) disc drill power left	
28 D disc drill power left	
17-tooth cultivator	
17-tooth cultivator power left.. ..
11-	stiff tooth cultivator power left
8|-foot one way disc	
Manure spreader	
Farm Implement Prices
1935 Prices unwarranted
1936	less 12J per cent	Increase$242 00	$197 75	$44 25266 00	217 00	49 00274 00	224 00	50 00243 00	199 50	43 5058 00	48 15	9 8595 50	76 55	8 75113 00	91 45	21 50242 00	202 15	39 85293 00	244 15	48 85346 50	289 20	57 30100 50	82 25	8 25116 75	96 45	20 30146 25	125 35	20 90298 75	252 65	46 10184 50	152 70	31 85


Mr. GRAYDON:: May I ask the hon.
member whether the term "gyp" is a technical term, and if so, how is it spelled?


Harry Leader: I may tell the hon. member that when we have to pay more than we should, we claim that we are "gypped" out of so much money.


Gordon Graydon: Will the hon. member
kindly answer the question that I put to him?


Harry Leader: I understood that I had
given the answer, and I am afraid that if the hon. member cannot understand it I cannot do any batter. The result of the high price of farm implements is that our factories are closed. I am not going into statistics, but that is the actual effect of high prices; no farmer can afford to pay them. The implement manufacturing companies close their factories and discharge their employees. The figures prove that; it is apparent to every hon. member. My hon. friend from Davenport (Mr. MacNicol), whom I must compliment upon his ability to defend his constituents at every opportunity, is concerned about the workmen. The reason the factories were closed and we had so much unemployment was that the implement firms would not reduce the price of their farm machinery, and, it being a non-perishable product, they were able to fill their warehouses full of it, hold up the price, close the doors, and wait till the farmers bought it. But they did not expect the depression to last as long as it has lasted, and perhaps in the long run they have suffered more than the farmers.


Denton Massey: May I ask the hon. member the authority for the last statement he made? Or is it a personal opinion?


Harry Leader: No. Here are the figures: In 1930 there were 7,504 employees in the agricultural implement industry. In 1934 the number was 3,706. I think that proves that
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when the factories closed their doors they discharged their employees and aggravated the unemployment situation.


Denton Massey: The hon. member stated
that the implement manufacturers were able to hold up the price of their implements and fill their warehouses, and therefore the farmer was not able to buy, which, of course, in my humble estimation, is a totally incorrect statement.


Harry Leader: I do not wish to make an incorrect statement. I am satisfied that the farmers were not able to buy the implements, and I know the factories did not continue to manufacture, because they could not sell, and if they did not continue to manufacture, I do not think they would be likely to retain their employees, although they did retain the majority of their executives.


David Spence: Was not the depression the cause of that?


Harry Leader: I agree with my hon.
friend to the extent that I think it had a great deal to do with the matter; that is, the depression among the farmers.


David Spence: More than the farmers.


Harry Leader: Hon. gentlemen on the
other side of the house fail to realize the depression in agriculture. When there is depression in agriculture there is depression all along the line. The agricultural industry is not in a thriving condition at the present time, and it needs farm implements. I think the best illustration of our condition is to tell the committee that last fall I was in a farmer's yard; the men were tinkering at an implement, and one of them said to the boss, "We will have to get another carload of hay." He said, "Surely the hay is not done yet." "No," said the other, "but we are out of haywire." That is the condition of the farm implements on the majority of the farms of western Canada. The farmers have patched them and patched them again, and tied them up with haywire until they are in such a condition that the farmer must either quit or buy new machinery. But the facts prove that the agricultural implement manufacturers decided to raise their prices and take advantage of the farmers in their dire necessity. That is my opinion, and I think I am justified in holding it.
I do not intend to offer many more observations. I thoroughly agree with the hon. member for Greenwood when he says that this is a big country and that we should be working in the interests of every one in

it, and not for any particular class. The machine companies and the farmers are interdependent; the welfare of the one depends upon the welfare of the other, and instead of having strife with these or any' other companies, we should work in cooperation. When the value of farm products went down as it did in 1930 and during subsequent years, why did the machine companies not reduce the price of their implements so that the farmers could continue to buy, and thereby assist in keeping the factories open and giving employment to the people of Canada? That is where the farm implement companies made a mistake, and now they are paying the price. I hope they have learned their lesson, and I invite the hon. member for Greenwood, who represents the agricultural implement industry, to-


Denton Massey: May I again interrupt?
I do not represent the agricultural implement industry. I speak for the workmen in that industry.


Harry Leader: The hon. member mentioned the industry so often in his speech that I thought he was making a special plea on behalf of it. I believe that he mentioned the employees as well. The hon. member for Rosetown-Biggar (Mr. Coldwel!) is not always complimentary to the present government; yet he was big enough this afternoon to confess that they were marching in the right direction. He gave the government credit for the reduction in the duty on agricultural implements. I want to say that I concur most heartily in that remark of the hon. member and I want to congratulate the government upon reducing the duties on agricultural implements to 7J per cent. I think this reduction was warranted and perhaps we could go further. In view of the attitude of the agricultural implement companies in increasing prices, notwithstanding the fact that the duties had been lowered, I think the government of the day would be justified in cutting the duty off entirely and putting these implements on the free list. We have had free entry into the United States for a considerable number of years, and if countervailing duties are wanted, why not have them apply to agricultural implements? In view of the attitude of the farm implement industry, I think the government would be justified in wiping out the duty altogether.


Mr. DEACHMAN:: 
John Ritchie MacNicol: Might I ask the hon.
gentleman a question?


Robert John Deachman: My hon. friend's question can come later; I want to give the full thread of this story. I think my hon. friend will find that it is really charming if he can only see it in the right light. There then came a change and the right hon. leader Of the opposition (Mr. Bennett) came into power. He said that it was necessary to save the industrial fabric of the dominion. I am not sure that he was not thinking of the textile industry; he was getting his fabrics mixed. We will let it go at that.
What followed? Down to 1933 there was a decline in industrial wages in the dominion, the drop totalling $348,000,000. I do not here and now contend that the lowering of the tariff in 1924 was responsible for the expansion of industrial activity in the dominion during the next five years. I do not raise that contention at the moment, but I ask my hon. friend from Davenport to sit down and look at the history of that period. When he does that I challenge him to come before the House of Commons and say that because the government of that day lowered1 the tariff industry was paralyzed. Will he go back to the people in his own constituency of Davenport and tell them that? Does he think the people of that constituency will accept it? I wonder that he can look the Davenportians in the face after a speech of that kind and after he has told them that their industries were ruined.


John Ritchie MacNicol: May I ask the hon. gentleman a question now?


Robert John Deachman: I do not know of any other hon. gentleman in this committee who never for a single second yields to the suggestion of lower tariffs, but the hon. gentleman from Davenport never does. This afternoon in a moment of kindness the leader of the opposition suggested that at least in one item the tariff was too high. I am reminded of the words of Dryden, who spoke of one Shadwell of his day as follows:
Shadwell alone, of all my sons, is he,
Who stands confirmed in full stupidity.
The rest to some faint meaning make pretence,
But Shadwell never deviates into sense;
Some beams of wit on other souls may fall,
Strike through, and make a lucid interval;
But Shadwell's genuine night admits no ray;
His rising fogs prevail upon the day.
I should like to transpose that a little and say:
Some beams of wit on other souls may fall.
Strike through, and make a lucid interval;
But Davenport's genuine night admits no ray,
His rising fogs prevail upon the day.


John Ritchie MacNicol: Now may I ask the hon. gentleman a question?


Robert John Deachman: My hon. friend must wait until I have finished. The suggestion is that the agricultural implement industry was ruined by the advent of this policy in 1924.


Denton Massey: Who suggested that?


Robert John Deachman: The hon. member for Davenport suggested that. He was saying that all industries were paralyzed, so surely the agricultural implement industry must have felt the shock. From 1920 to 1924 the progress of that industry in the Dominion of Canada was in one direction. The number of employees decreased from 12,S00 to 6,700. Then the tariff was changed in 1924 and the number of employees increased year after year. They increased to 7,500, 10,000, 11,000 10,000 and 11,000. The hon. member for Greenwood (Mr. Massey) suggested that the total number of employees was 18,000, but he was counting every man who goes out from the Massey-Harris company to sell a binder or to fix one in the field. He assumes that if agricultural implements are not made in this country, none will be bought, none will be sold and none will be serviced. I return for one moment to the question of what would have happened in 1924 if the policy of the hon. member for Davenport had been put into effect.


John Ritchie MacNicol: There would not have been any delegations coming to Ottawa to ask for employment.


Robert John Deachman: My hon. friend can follow me in just a moment. He is as a pillar of cloud by day and a pillar of fire by night. If what my hon. friend claims is correct, then in 1924 the advance made by
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this industry would have been more rapid than it was under the Liberal government. Does my hon. friend contend that? Will he suggest that to the house?


John Ritchie MacNicol: I contend that the lowering of duties in 1924 increased emigration and the number of delegations coming to Ottawa to ask for employment.


Robert John Deachman: That is exactly what I want my hon. friend to say.


John Ritchie MacNicol: You have it.
Mr. DEACHMAN. Does my hon. friend contend that the increase in the production of manufactured goods would have been greater in the Dominion of Canada between 1924 and 1929 than it was?


John Ritchie MacNicol: Yes, if we had had an adequate tariff.


Robert John Deachman: These are the figures. The total production stood at $2,695,000,000 in 1924 and it went up to $4,063,000,000 in 1929. Does my hon. friend say that it would have been still greater? Let me point this out to the committee. My hon. friends had the direction of affairs from 1930 to 1933 and they pushed the tariff up to the limit. There was no hesitancy or weakness on their part; they pushed the tariff up to the limit. What followed? Production dropped to $2,086,000,000 in 1933 from $4,063,000,000 in 1929. Yet my hon. friend says that it would have been higher if they had been in power. In other words, it would have risen to greater heights and crashed to greater depths and unemployment would have been greater. I ask my hon. friend to take that story back to Davenport. I ask him to admit what he ought to admit. He can answer me later; there will be lots of time to-night. He claims that if the tariff had been applied in 1924 we would have increased the volume of production and we would have had more men employed. A tariff cannot be made to do more than the tariff did in 1933, and production had crashed then to half what it was in 1929. It would have had further to fall and the destruction of the industry in this country would have been greater than it was.
I turn now for one moment from Davenport to Greenwood. I like my pleasant friend; never for a moment does he say an offensive word. But he stood in the house to-day as the one outstanding illustration of the failure of the policy of high protection in Canada. Why do I say that? That industry has been for years one of the key industries of this dominion. It has been held up as an industry which has developed as a result largely of protection. The protective tariff was first 
granted it because it was an infant industry and it was thought desirable to build it up in Canada. What followed? The hon. gentleman tells us that this infant industry was established some ninety years ago, and it has been followed by fairly high protection. The tariff got down to six per -cent on binders a few years ago, and when the Massey-Harris company appeared before the tariff board, at the time the iron and steel schedules were under inquiry, the representative of the company did not ask for an increase in the duty; they were ready then for a tariff of six per cent. After all these years, what has happened to the infant industry? Old and experienced, with abundant capital and everything else, it comes before the house and declares that the infant industry day is gone; that the industry has passed that stage, and that now it wants something for its old age. Is that not a perfect example of the folly and uselessness of protection, when you pile tariff on tariff-


Denton Massey: Will the hon. gentleman
allow a question?


Robert John Deachman: Not now, please; I
should like to finish. My hon. friend from Greenwood says that he is worried about the worker. What worker? Is the man on the farm not a worker as well as the worker in the factory? What does the hon. gentleman plead for in this committee? He pleads for the idea that something shall be taken from the worker on the farm and something shall be given the worker in the factory. If it were possible to build up industry on that basis then his argument might receive consideration; but we have had fifty years of experience of high protection in Canada and we have found that in no single period in that time have we had real prosperity under high tariffs, whereas in every period when the tariff was reduced there has been an improvement in conditions.
My hon. friend appeals against sectionalism.
I would ask him to put this test to himself. The farmer in western Canada to-day produces grain that must be sold in the open markets of the world. He has no protection on that product, for he must take the price which is determined by open competition with every other producer. In that position he is without help; and my hon. friend says that, in order to avoid sectionalism in Canada, we should put the tariff 'back on agricultural implements so as to allow the manufacturer of those implements to take something from that farmer. And that is to be done in order to avoid the building up of a spirit of sectionalism in Canada.

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Denton Massey: I rise to a point of order.
I have the highest respect for the hon. member, but 'he cannot put words into my mouth. I did not say that in order to avoid sectionalism the duty should be raised from 74 per cent, but I did say that the investigation which is going forward at the moment should have been completed in fairness to all parties. And that I repeat.


Robert John Deachman: The hon. member may make any statement he likes, but the fact remains that the only basis upon which we can avoid sectionalism in Canada is the basis of fairness to all.. We cannot take one industry and say that it is the spoiled pet., the darling of this House of Commons or of the dominion, and that we are going to give that industry a special privilege to enable it to charge the people of Canada higher prices, and then say to another industry in western Canada, the growing of wheat, an equally important industry, that they shall grow wheat though hampered by the fact that the necessary implements cost more. There is the situation. Both sections of the dominion, all classes, must be treated on an equal basis. You cannot stand on the ground of special privilege and make an appeal on that basis in the House of Commons.
My hon. friend says that he has a great deal of sympathy for the farmer. I do not doubt that for a moment. He feels for the farmer and thinks something ought to be done for him. I respond to that and say that I have a great deal .of sympathy for the manufacturer of agricultural implements, and I contend that you cannot build up an agricultural implement industry in this country on the basis of exploited agriculture. The price of agricultural implements to-day is sixty-one per cent above the price of 1913; the price of farm products is practically the same. I want to see something done to improve the condition of the farmer, because only on the basis of an improved agriculture can we hope to have progress in Canada. On no other basis conceivable can you build up an agricultural industry in this country, and it is on that ground that I make this appeal. We must do the best we can to raise the status of agriculture, for until that is done your industries are in danger, and the one that is in greatest danger is the manufacture of agricultural implements. It cannot prosper unless agriculture is also prosperous.


Denton Massey: Will the hon. gentleman answer this question? What was the price of wheat in 1915, 1916 and 1917 in western Canada?


Robert John Deachman: The price of wheat was held at that time at an unduly low level because of government control. The price did not reach the level it would have reached had it not been for government interference. But when it comes to the other proposition, the interference is the other way.


Denton Massey: At one point in his remarks there was a question which I was anxious to ask the hon. gentleman in order to have his reply on Hansard. He referred to the low duty of six per cent in 1924, and he did not say what the duty was to the manufacturer of agricultural implements on the raw materials entering into the product.


Robert John Deachman: The answer is very simple.


Denton Massey: Indeed it is.


Robert John Deachman: I took part in the proceedings of the tariff board for two or three years and always contended for a reduction in the duty on raw materials where the duty on the finished product was relatively low, and if the Minister of Finance proposes to make further reductions in the duty on raw materials I shall be with my hon. friend.


Denton Massey: Will the hon. gentleman answer the question I asked?


Robert John Deachman: Repeat it.


Denton Massey: What was the duty


Robert John Deachman: I cannot go into the details of all the duties. Does the hon. gentleman expect me to give him all the schedules?


Denton Massey: The hon. gentleman's whole argument falls down completely, for the duty on raw materials entering into the manufacture of farm implements, at the time the duty on implements was six per cent, was a preference duty of six per cent.


John Ritchie MacNicol: May I ask the hon. gentleman a question?


Robert John Deachman: Delighted.


Charles Avery Dunning: Perhaps I could clear up that point. I do not want to get in between the hon. member for Huron North and the hon. member for Greenwood, but on the issue of fact with respect to the duty on raw materials I may say that the duty is and has been for many years six per cent.


Denton Massey: I would not dare to correct the Minister of Finance, especially when there sit beside him those who have the facts and
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figures, but I reserve the right, in all deference, to disagree with the statement he has just made. I have not the facts before me but I should like to have the privilege of looking them up.


Mr. JOHNSTON (Bow River):: I wish to say a word in defence of the western man and especially in support of my hon. friend from Portage la Prairie (Mr. Leader). There seems to be a great deal of controversy over this tariff question, and I want to commend the minister for this reduction, provided that it results in a reduction to the farmers. Possibly as a result of this committee's investigation there will be a reduction in the price of farm machinery, but unless that reduction is passed on to the farmers then I do not think any reduction in the tariff will amount to a row of beans. The tariff does not enter into the question to a very great extent unless in the final analysis the farmer gets the benefit. We have heard a great deal said about these prices, but unless these reductions are actually forthcoming and the farmer receives the benefit of them they will not mean a thing. We have even heard a great deal of sympathy expressed for the farmer during the last little while. Sympathy is all right, but it is pretty hard stuff to eat, especially in these hard times. Consideration has been shown for the manufacturer. I do not suggest for a moment that the manufacturer should not be allowed a reasonable profit, but I say that the profit of the agriculturist should be greater, and until this business is settled we are not going to get very far.
It has been suggested here, as a solution for unemployment, that we should revert to a back to the land movement so that the number of farmers will be increased and more grain will be raised that we shall not be able to sell, so the net return necessarily will be less. I think that is starting to work at the wrong end. Instead' of our showing so much consideration for the manufacturer lest his prices be reduced a little, I think it would be only fair to have some logical solution such as that suggested by the hon. member for Huron North. Give the farmers a little more consideration and then they will be able to buy the machinery at the price asked by the manufacturer, the price which will allow the manufacturer a profit. I do not think the tariff enters into the question very much, though I should like to see the tariff reduced provided the farmer gets a proper return for his produce and prices are lowered. So, as I say, I commend the minister for this reduction, but I hope he will go a little further and, as a result of the investigation of this

committee, see that the farmers get a square deal and a reduction in price for their farm machinery.
Mr. BENNEiTT:	I should like to say
just a word. I ask the Minister of Finance if he cannot find it possible to adopt a fairer attitude towards this matter than the one which has obtained so far. Does he not think, after having had the gasoline matter dealt with by the tariff board, it would be reasonable to have this matter also dealt with by that board? Where is a committee to get in a question of this kind? Where has a committee ever got in a matter of this kind? Only the other day it was admitted by the Minister of Trade and Commerce that a committee was no body to deal with a complex matter such as the marketing of our wheat, and that a royal commission would be better able to deal with that matter than a committee of the House of Commons. Do those who speak for the farmers here to-night think it is fair; would a farmer think it is fair; does any hon. member think it is fair, apart altogether from the question of whether the duty is too high or too low, for the government to say that parliament shall refer a matter to a committee and then, having suddenly made up its mind to take certain action, to reduce the duty by five per cent under what it was and still have the committee function, instead of referring the matter to the tariff board to deal with?
We have had several very important matters dealt with by the tariff board. Today the minister was good enough to say that the gasoline schedule was, word for word, that recommended by the tariff board, and we have two or three other items of the same kind. The basis of goodwill between two sections of the country is the thought in the minds of both that they have been treated fairly. What I put to the minister is that they have not been treated fairly, and by "fairly" I mean both having been given the opportunity to be heard before any action was taken to prejudice the position of either. In this instance the farming community presented its case with great vigour, and the government of the day has taken this action after having pointed out that the matter might be left for the Minister of Finance to deal with in his budget. But there is still time to refer the matter to the tribunal which has been set up for that purpose.
When my hon. friends were talking as they were a few moments ago, about the price of wheat, I would remind them that to-day the farmer is receiving 87J cents a

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bushel for wheat that is being sold for 774 cents a bushel. That is the position to-day. There is a fixed price of 874 cents for the farmers' wheat, and that same wheat is being sold for 774 cents. *


An hon. MEMBER:: What about 1932?


Richard Bedford Bennett: I am talking about
to-day. How would the farming population like it if, to-morrow morning, parliament declared that this 874 cents was wiped out; that there would be no longer any fixed price with respect to wheat and that the whole matter would1 be adjusted on the basis mentioned by the hon. member for Huron North, namely, the world market? Would they not say that was an unfair thing to do? Would these hon. gentlemen who have spoken to-night not say that? Would they not complain bitterly about any such action? I think they would, and properly so. All I suggest, without giving any expression of opinion as to whether this duty is high or low-I have refrained from that-is this: In all fairness why not leave this matter to the tariff board? This committee will get nowhere; it cannot possibly get anywhere with this question. No committee ever has got anywhere with a matter of this kind. Does the minister not recall the committee of this house that dealt with gasoline, when thousands and thousands of dollars were spent in the payment of auditors? To-day a committee is sitting. Since the committee began to sit we have been paying $50 a day for a lawyer and $50 a day for an auditor, I am informed. That makes $100 a day being paid out for an auditor and a lawyer, and does anyone suggest for a moment that they are ever going to be able to reach any conclusion which will be of value to this house or to this country?
This is the only suggestion I have to make, but I desire to impress it upon the minister with all possible force: We should treat these interests fairly, even as the farmers expect to be treated fairly with respect to the price that is fixed to-day for the wheat they sell. They would complain, and properly so, if their rights were taken from them in regard to that fixed price. So these implement companies have a right to present their case to the tribunal set up for that purpose. There is an excise tax of three per cent which to all intents and purposes amounts to an additional duty, making the total 104 per cent, but of course conditions are vastly different from what they were in 1924. It will be recalled that the then president of one of the largest implement companies came to this city and presented his case on behalf of the workmen,
not on behalf of the capital involved. That was his whole plea, the welfare of the men employed.
I am not here to add anything to what has been said by hon. members of this committee, nor am I going to attempt to rebut the statements they have made. I desire to urge upon the minister, however, that he give fair play; that we may do what is decent and right and fair with respect to all the industries of the country, not with respect to one but with respect to all, and that we shall not in connection with one say that we shall leave it to a board and in connection with another say we shall act in an arbitrary way. Let us create a feeling of confidence, alike in the east and in the west so that if the board finds, on a certain set of facts, that a certain condition exists and, in the terms of the tariff act, that a certain schedule would give all the protection necessary for the preservation of that industry in the country, then we know the exact situation; we have a clear and comprehensive view of it, just as we have in connection with gasoline based upon the report we heard this afternoon. But to have one section of Canada believe it is singled out for treatment entirely at variance with that accorded to another section is to create, on the one hand, a feeling of suspicion and distrust and, on the other, to give the agrarian in the west the idea that laws are made for him to impose his will upon particular people with respect to matters which are very dear to him and with respect to the prices of articles which he has to purchase. I say that is not fair and I am pleading for fairness. That is all.
In view of all that has been said it would be highly improper for me, because of the conflict of opinions and views, and what has been said with respect to the 74 per cent and three per cent duty, to express an opinion as to the adequacy or inadequacy of this particular item. But I can see no reason why the agricultural implement business of this country should not be given an opportunity to present its case before the tribunal created by law to examine such matters, nor why a committee of the house, after the duty has been reduced by five per cent, should continue to pay a lawyer and an auditor $100 a day for the two of them when in the ultimate analysis they will not be able to make a single contribution to the solution of the problem. I submit that to the minister, and trust he will realize that, in doing so, I have no object except that, having lived in western Canada as long as I have, and knowing how the feelings of the western agrarian have been played on in the past, how he has been made to think of the agricultural implement makers as men who are lying in wait to snatch from him his hard-
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earned money, I desire that a feeling of confidence should be restored, by both sides believing that the tribunal will give fair, complete and patient consideration and attention to every argument that can be adduced. If the government think it desirable to appoint counsel to represent the agrarian interest I would be content that this should be done. But to go ahead with the reduction of five aer cent without notice or without a chance to be heard being given, while briefs were oeing submitted to a committee of the house, is at variance with the usual course, and to Say now that the committee is to continue, and that the board that was created for the purpose of hearing evidence is not to hear it, is in my judgment to go a long way towards creating suspicion, unrest and distress and to increase the intensity of the feeling, if there be any, between those who toil on the soil in the west and those who produce agricultural implements in the east.


Charles Avery Dunning: The questions addressed to myself I must of course endeavour to answer. The principle laid down by the leader of the opposition is one which has an appeal, and he put it in its most appealing form. I would, however, point out to him that the enactment of the tariff board legislation at no time was intended, even by himself, to take from the government of the day the responsibility and the opportunity of making such changes in the tariff as in their judgment were in the best interests of the people of Canada.


Richard Bedford Bennett: I do not suggest that it was.


Charles Avery Dunning: In the case of the gasoline inquiry, to which reference has been made, we were fortunate enough to have a complete report available, so that parliament might be given that report and given the facts in great detail upon which the government based its proposal to parliament. In connection with certain aspects of the textile industry the same is true. With respect to a number of other proposals now before the committee, no recommendation of the tariff board is available, but the usual machinery of government, machinery which has functioned for many years in connection with the tariff, has been used upon which to base the judgment of the government as to what should be proposed to the house and to this committee. Perhaps my right hon. friend will permit me to say that his observations with regard to fairness should work both ways. That is, the principles which he lays down surely should apply with respect to the increase of the tariff by governmental action if they are to be applied to the

decrease of it. May I remind him that in 1930, without any tariff board, without any expert advice, the tariff was raised to great heights on some three hundred items of the schedules, if my- memory is correct.
With respect to the item under discussion- and I want to stay within the rules and stick to that item-the tariff was raised from the 6 per cent level at which it had stood for several years, a level from which, as the hon. member for Huron-Perth (Mr. Golding) said this afternoon, the Massey-Harris company [DOT] did not request an increase before the tariff board prior to 1930; that tariff was raised by one act of the government of which my right hon. friend wTas the leader from six to twenty-five per cent. Then, on top of that twenty-five per cent came the additional three per cent special excise. It is true that my right hon. friend will say: We took an undertaking from the manufacturers that they would not increase prices.


Richard Bedford Bennett: Which undertaking they
lived up to.


Charles Avery Dunning: To which I believe they lived up to the letter. But that, may I point out, is not sufficient to meet the condition as between the primary producer and the1 secondary producer. When the primary producer has to bear the weight of constantly decreasing values for what he produces, what good is it to him to have an assurance that the things he buys will merely not be increased in price? What we must strive to bring about in this country-and I know my right hon. friend desires it as much as any of us-is a greater approach to parity between the return secured by our people engaged in primary production as compared with the return received by those engaged in other classes of production and in distribution. It is well known that things are out of balance not only in this country 'but in the country to the south and in many countries in the world. I agree with my right hon. friend when he says that these adjustments which must be made are far better approached from the basis of scientific analysis and examination than by appeal to the passions of the classes who are suffering from these extremes. I join with my right hon. friend in the belief that careful, consistent and steady examination should be made of these problems, not in the atmosphere of the hustings or even of parliament, but rather in the atmosphere which it has been sought to create by a tribunal such as the tariff board. I can speak for the government when I say that if the farm implement industry of Canada wishes to have the matter of farm implement duties referred to the tariff board it has only to ask for this and the reference will be made.

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As to what this house is doing through the committee which is now investigating,-not the tariff on agricultural implements-I call the attention of the hon. member for Greenwood (Mr. Massey) to that-but the reason why immediately after a reduction in the tariff an increase in prices took place, is that not important? Hon. members1 representing the constituencies from one end of Canada to the other where these implements are bought and used would not be doing their duty by their constituents unless they insisted upon immediate action to find out why that increase was necessary. No adequate explanation has so far been given. It will be a good thing for the manufacturers of agricultural implements to place their facts before those men in this house who represent the farmers of this country. Surely nothing but good can come from a knowledge of the facts by the men who sit in this house representing the people of constituencies which use in such large measure the products of agricultural implement factories. I join with my right hon. friend in the belief that there has been too great a gap of misunderstanding between industry on the one hand and agriculture on the other, but I submit that before a committee of this house they can get together; they may at least agree on the facts. As far as the industry itself is concerned, it can have a reference to the tariff board at any time it applies to the present Minister of Finance for one. And the government will endeavour to see, in that connection as in all others, that the facts are brought out, in order that there may be made to this house a report in which all hon. members may have confidence because it has been produced in an atmosphere as little contentious and as non-political as possible.
I would point out, however, that the government have not gone the length of putting the duty on agricultural implements back to the point at which it was when the former Liberal government left office in 1930. Many supporters of this government believe that that should have been done. But in the light of prevailing conditions our best judgment was that the 7h per cent rate which appears throughout the whole agricultural implement schedule was a proper rate at which to put the duty during this session, of parliament. I fully expect, indeed I hope that the agricultural implement industry will apply for a tariff board reference. If they do, then by the time this house meets again we shall surely have available-at least I hope we shall-a mass of facts which are not a matter of dispute between members from this constituency and from that, but which may be agreed upon as facts, whatever may be the
respective opinions of hon. members as to the policy which should be based upon those facts.


Major James William Coldwell: The leader of .the opposition made an appeal to hon. members representing agricultural constituencies, and particularly those from the western provinces. As the Minister of Finance has said, I think the appeal was very well directed. However I should like to draw the attention of the leader of the opposition to considerations which compel us to discuss this matter in the House of Commons and to make the representations that have been made not only from this corner but from other sections of the house.
I have before me two tables, one of which was compiled by the Searle Grain Company of Winnipeg, giving an index of prices paid, and values received, in western Canada between 1913 and 1935. Taking the index of No. 1 hard wheat for the year 1913-14 as 100, we find that in 1935 the price had fallen to 93. Of course that is considerably better than the relative index of 52 of 1933. We have to remember, however, that in 1935 the set price to which the right hon. gentleman referred was operative. On .the other hand, taking 100 as the index figure of what the farmers bought in 1913-14 we find that it had risen in 1935 to 125, considering 147 articles farmers buy. Again, taking 100 as the index of the farmers' purchasing power in 1913-14, we find that in 1935 it had fallen to 74. The bureau of statistics index of farm implement prices shows them to be entirely out of line, because in 1935 farm implements were 54 per cent higher, on the average, than they were in 1913-14, and tools and hand implements used in agriculture were 76 per cent higher. Because of this condition pressure is quite properly brought to bear upon, the government and private members to deal with the situation. It seems to me that in the light of these considerations the government has done the right thing in reducing .the duty at the present time.
While one readily admits that implement manufacturers may be able and should have an opportunity to make out a case, nevertheless I believe immediate action has been required of this government and of this parliament. I place the figures quoted before the committee to show that it is not in a spirit of captious criticism .that we urge the reduction in the prices of implements and the duties thereon, but because we believe that the prices charged for agricultural implements are quite out of line with those received for other commodities, particularly
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remembering the reduced cost of basic raw material, and of labour involved in the production of farm implements. If we are wrong, then as the Minister of Finance has said, the companies should prepare their case and present it with the assurance that they will be given fair consideration.


Richard Bedford Bennett: There are two matters I should like to clear up-


William Henry Golding: Before the item carries-


David Spence: I have been on the floor half a dozen times. Am I so small that I cannot be seen.


Frederick George Sanderson: The hon. member for Huron-Perth has the floor at the moment.


David Spence: All right; go to it.


William Henry Golding: Before the item passes there are two or three points I should like particularly to stress. The hon. member for Greenwood complains that I quoted figures from 1924 to 1930 and did not take into consideration the depression from 1932 to the present time. In answer to that I should like to say that the point which prompted me to rise this afternoon was the statement made by the hon. member for Davenport as to the "disastrous" results which followed the reduction of the tariff in 1924. That was my reason for quoting figures showing a comparison of the period between 1924 and 1930 with the period between 1930 and 1934. Under the circumstances I believe I was justified in quoting the figures.
I made reference to the 18,000 employees mentioned by the hon. member for Greenwood, employees whose jobs it was said would be placed in jeopardy by a reduction of the tariff. Speaking on that point the hon. member said that it did not matter whether there was 18,000 or 9,000. I suggest . it is important that we be careful when we quote figures of that kind, because no hon. member should exaggerate. I do not question the sincerity of the hon. member for Greenwood, but I suggest he must take the figures as they are. The figures I quoted were those which were submitted to the price spreads commission and had reference to the four largest and ten smaller implement companies. Those figures showed that at that time there were only 3,880 people employed in implement factories representing about ninety-two per cent of the total production. In my opinion that is an important fact.
I believe there is and has been an effort to stampede the industrial worker by making him believe that any reduction in tariff is going to affect his position seriously, and in

view of that we ought to be careful when we quote figures. The hon. member for Parkdale complained about my having quoted figures from the bureau of statistics and asked me why I would not quote my own figures. I contend that if from my place in the house I had quoted figures and when the hon. member had asked me what figures I was quoting, I had replied, "these are my own figures," he would have been one of the first to challenge them.


David Spence: They might be just as reliable.


William Henry Golding: I suggest that when we quote figures supplied by the bureau of statistics, surely to goodness hon. members opposite cannot question them. They are the only figures which we can quote.
One further point is that if it is claimed the raising or lowering of tariffs will either help or ruin the agricultural industry, then I contend that the figures we have before us for the different periods of years show that reductions in tariffs help the industry, the employee and the working man. The hon. member for Greenwood has said: "Between 1930 and 1935 this company experienced a loss of $25,700,000." Was that loss sustained during a time when there was a lowering of duties or was it sustained when duties were being increased? The fact of the matter is, as the figures show, that the companies and the industrial workers suffered more after the tariffs were increased than they ever did under a reduction of tariffs. That is all I have to say on the matter.


David Spence: At last I have a chance
to say a word or two. After listening to the eloquent remarks of the Minister of Finance (Mr. Dunning), and of my honoured leader (Mr. Bennett), who is a wonderful debater, I am diffident about saying anything at all. Although I have some business ideas of my own which I try to express to the house, I find at times a gfreat deal of difficulty in saying just what I think. That will not prevent me from saying some things that I think.
I do not agree with the hon. member for Rosetown-Biggar (Mr. Coldwell) that it was proper to reduce the duty on farm implements. In fact, the training which I have had in the business world leads me to think it is a bad thing either to lower or to raise duties, because to do so always puts some people in some lines of business into difficulties, so that if the government would stop tinkering'with everything all the time, and let us go ahead, we should do better still.
We have listened in this house to economists of all kinds. I am a member of the

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agriculture committee which is investigating the prices of farm implements. I am also one who tries to save the money of the country as he would try to save his own, and I protested against the system adopted in the first place by the committee. The first day we had a meeting we listened ,to some technical highly trained doctor-I assume he was an economist-who talked over our heads; I suppose nobody but a Rhodes scholar could have understood him. We followed that up the next day with something of a similar kind, from another branch of the service. I am not condemning these people, but this is what was done. In the first place we engaged counsel at $50 a day and expenses, which I do not think was too high. Then we engaged an accountant, also at $50 a day. I do not think we need either of these gentlemen. This has been going on since March 17. Then we have two or three committee reporters, receiving, I suppose, ten or fifteen dollars a day; we have literature coming from the committee to the house every day, and we have got nowhere yet. If that is .the way in which the government carries on business it should go out of business.


Charles Avery Dunning: Not the government;
this house.


David Spence: The house has very little
to say. The government is doing this. We now have only four Conservatives on the agriculture committee; we have three or four economists. An economist is like a man who gets into a big barrel, looks out through the bung-hole and imagines he can stop the falls of Niagara or bring the sun and moon to a standstill. Too many of their suggestions are impracticable. In this house we ought to get down to business and stop talking economics all the time. Economy is much more important; it is one of the things I should like to see studied, and as a rule it is not considered by this government or, I assume, by some other government.
The hon. member for Portage la Prairie (Mr. Leader) said that the hon. member for Greenwood (Mr. Massey) had made certain remarks in the interests of his riding. My contention is that any remarks he made in the interests of his riding are equally in the interests of the farmers of this country. I am just as much interested in the farmers of Canada, and particularly of Ontario, as in the workers in any other industry. They have been good friends of mine, and they have no better friend than myself as regards looking after their interests; as far as I am concerned I shall always oppose any injustice to the farmer. But he must not expect
everything; somebody else must also get consideration, because others have to live as well as he.
The hon. member for Davenport (Mr. Mac-Nicol) remarked this afternoon that everyone representing an industrial riding should rise in his place and say something in protest against the lowering of duties on farm implements. When I was in this house in 1924 I took a strong stand on that particular matter. I advanced the argument that if the duty were lowered I was afraid this would result in driving the industrial workers out of cities like Toronto and Hamilton, in the vicinity of Which I live, with the result that the people who grow commodities in the old Niagara peninsula, where I did much business, would have no one to whom to sell their stuff, because if you deplete the population of Toronto and Hamilton the farmer may as well quit growing vegetables and farm truck. It is just as much to the interests of the farmers as of any other class of the community that the industrialists should be kept busy. I tried at that time to show what would happen to the farmers, and I think my arguments were sound.
The other evening my hon. friend from Regina (Mr. McNiven) was quoting statements I made on May 1, 1924. He quoted me correctly but he did not go far enough. He quoted, as every other politician does, to suit himself, to make the other fellow look ridiculous. We all know that if the farmers are not prosperous, we in the industrial centres cannot hope for long prosperity. The same thing applies to farmers if industrial workers are unemployed, because if the people in the urban centres are without money to buy the products of the farm there is not much use growing them. So the system works both ways. What we need is cooperation in this country, and we are not getting it.


Mr. JOHNSTON (Lake Centre):: The
farmer is ready.


David Spence: The extra few cents the
farmers pay on farm implements because of a duty do not amount to anything at all, when spread over some years, compared with the advantages they receive by keeping the industrial worker employed and so enabling him to buy their commodities. May I say that the farmers might take better care of their farm implements, and not leave the harrow in one field, the plough in another and the binder in a third.


Mr. PERLEY (Qu'Appelle):: How do you know?
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David Spence: I know because I have been in the hon. member's province of Saskatchewan and seen this. The farmers even in Ontario do the same thing. But in Saskatchewan the situation is much worse. I have been there and known men to forget where the cultivator was, where the thresher was, and everything else, and they could not find them in the spring or fall of the year when they needed them. If they took good care of their farm implements, all they paid in duties would be nothing compared with the saving in depreciation, and perhaps the country would not be in the difficulty they keep it in by growling about something all the time. I have a great deal of admiration for the hon. member for Huron-Perth (Mr. Golding), but I think without a doubt he had no conception of what is fair as between industry and the farmers. A farmer can exist better on a garden, if he grew something on his farm, than an industrial unemployed worker can do in a concrete back yard.


An hon. MEMBER:: The hon. member forgets that the industrial worker, like the farmer, fares better under lower duties.


David Spence: The industrial worker does not mind what he pays for commodities so long as he has the money to buy them with; that is the way the hon. member should feel, and the way all the country should feel, and we would all be happier. What the hon. , member needs to do is to go home and get good friends with himself.
I believe in a tariff to keep the wheels of industry rolling, but I do not believe in manufacturers taking advantage of tariffs to extract too large a profit. I am opposed to that as vigorously as I am to free trade or to anything which will interfere with the industrial workers being kept in employment. My contention is that the government should control prices. When we gave protection to the plate-glass works at Hamilton against imports that came in cheaply from Belgium, they took advantage of that protection, and my right hon. leader (Mr. Bennett) cancelled the tariff. That can be done in the case of any industry which is trying to dig gold out of the people for nothing or is making an extortionate profit.
I am a great believer in my own figures. I think I can calculate as accurately as most economists. We know that figures do not lie, but liars sometimes figure. The statistical department is not always right. You can make figures mean anything, and perhaps I have done that myself. I think the Minister of Finance is just as good at figuring as I am.


Charles Avery Dunning: But not as good at the
other thing.


David Spence: I would have some difficulty in holding my own sitting round a table with him. I can remember back in 1924 when the Hon. Vincent Massey who is now High Commissioner for Canada in London was interested in the Massey-Harris company. I am not speaking disparagingly of him, but I can remember how he slept on the doorstep of the Right Hon. Arthur Meighen day after day and week after week in an effort to keep tariffs from being reduced. At that time you changed your views and you gave them a six per cent preference on the raw materials that went into the manufacture of farm implements. You fixed it up in that way. You did not put on any more duty, but you did it in another way. You always had a way of getting out of difficulties. I do not blame you for that as most of us do it as well.
At one time the Massey-Harris company was quite prosperous. That company is situated within a few yards of my former riding. I used to take in the whole of ward six but my good friend, the hon. member for Davenport, came into the house on redistribution. He redistributed me out of that part of the city of Toronto and took it to himself.


Charles Avery Dunning: There ought to be a
tariff against that.


Mr. LAPOINTE (Quebec East):: That is
not the only wrong thing he has done.


David Spence: I can remember that at
that time the Massey-Harris company employed about 4,000 people. Hon. gentlemen have been quoting statistics to show that there were only 3,500 men employed in all Canada. That is absolutely wrong. I agree with the statement made by the hon. member for Greenwood who said that 18,000 people were employed. I assume he takes in all the agents and those who go through the country to give service to the farmers, but, believe me, the agents earn their money. I know some of them sometimes drive twenty to twenty-five miles in order to sell a farmer a dollar's worth of stuff. They have to do that to keep him in good humour. All farmers and all business men are alike. I said that at one time the Massey-Harris company employed from 3,500 to 4,000 people. I knew hundreds of these employees because I lived in the vicinity of this plant for forty-five years.
The John Abel people came to Toronto from Woodridge and employed a great number of people, but they were finally forced to amalgamate with an American concern and call themselves the American Abel Company. They employed from 800 to 1,000 people, but they had to go out of business.

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Their place was taken over by the American Rumley people who employ from fifteen to sixteen people to distribute tractors. That is all the good they are in this country. They are renting other parts of their building to other industries which are trying to make a living but are having a hard time. Only fifteen to twenty people are employed in this factory which at one time employed from 800 to 1,000. There is something wrong with the management of this dominion when that happens.


Charles Avery Dunning: What is wrong is the
fact that they are manufacturing something which is no longer used by the country. They are manufacturing these big tractors.


David Spence: That is right. I think
the hon. gentleman knows more about what is hurting the industries of Canada than anybody else. I recently took a trip through the west, but I assume the minister has been there more often than I have. I was driven through Regina by Senator Laird and we went down to the railroad siding and saw carloads of farm implements which had come in from all parts of the United States. These implements should not have been in this country at all. If our own manufacturers had been given proper protection they would have been able to manufacture these implements. Everybody in the west thinks he should buy stuff from the United States. They believe that by their doing so the country gets the benefit of the duty, whereas if they buy from a manufacturer in Canada, he gets a profit. They hate to think of anyone getting a profit. We cannot live without a profit, and that applies to retail business, wholesale business or manufacturing. There must be something wrong with the minds of men who hate to see someone make a profit, who would rather pay a duty and buy stuff from the United States.
We all can remember in 1924 when at least two to three hundred thousand people left this country to go to the United States. We did not realize that we had any unemployment at that time because these people could find jobs over there, but the situation is different to-day. They cannot find jobs in the United States and unemployment has been increasing ever since 1929. We lost a large number of highly educated men and women who went to the United States because they had no hope of getting anything to do in Canada. There was no hope for these people who had been educated at great expense to the country. They went to the United States and helped to build up the industries of that republic; we were just an 12739-195
incubator for the United States. Professional men particularly could get jobs quite easily in the United States, sometimes when even Americans could not. Canadians were appreciated and from 1921 to 1928 or 1929 we lost the best class of Canadian citizens.
I do not want to take up any further time because I know we should1 be conducting the business of the committee. However, since everybody else wants to talk, I am. forced to say something or the people in my constituency will think I am dumb. I do not want to be considered a deaf mute, and I must say something at times or next year some of my friends will say that I am not on Hansard and I may not get any votes. However I do not think it will matter much if I never talk; I believe I will be elected just the same. We have a committee of the house investigating the high cost of farm implements and I think it was indiscreet of the government to reduce the tariff in the midst of that investigation. My leader has suggested that this matter be sent to the tariff board for consideration, so I suggest to the government that they forget what they have done and we will all forgive.


[Stage Direction]
Items agreed to.
Charles Avery Dunning: I have an amendment
to offer in connection with item 409j to provide for the insertion of weighers for threshing machines.


James Lorimer Ilsley: I beg to move that item
409j, as contained in the resolution of May 1, 1936, be amended to read as follows:
Fanning mills; peaviners; corn husking machines; threshing machine separators, including weighers, wind stackers, baggers and self-feeders therefor; complete parts of all the foreging.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-4091. Traction ditching machines (not being ploughs) and complete parts thereof: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-409m. Internal combustion traction engines; traction attachments designed to be combined with automobiles in Canada for use as traction engines; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Item agreed to.
Customs tariff-409n. Portable engines with boilers, in combination, for farm purposes; horse powers; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 25 per cent.
Item agreed to.
[Stage Direction]
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Charles Avery Dunning: Following the last item, 409n, there is an amendment which deletes the weighers' item. That has been put into 409j.


James Lorimer Ilsley: It affects 409r, which is not in this list. It deletes the word "weighers" from 409r. I move:
That schedule A of the customs tariff, as amended by resolution No. 5 of May 1, 1936, be further amended by deleting tariff item 409r the enumeration of goods and rates of customs duty set opposite thereto from the said schedule A.


[Stage Direction]
Amendment agreed to.
Customs tariff-410d. Well-drilling machinery and apparatus, and complete parts thereof, of a class or kind not made in Canada, and seamless iron or steel tubing over 8 inches in diameter, for use exclusively in drilling for water, natural gas and oil, and in prospecting for minerals, but not to include motive power; well packers and complete parts thereof, for oil and gas wells: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Charles Avery Dunning: The only change is in wording; in the rates it is entirely unchanged. The change is in the final clause. In order to clarify administration and remove any doubt as to the meaning of the item, the phrase "well packers and complete parts thereof" is substituted for the phrase "packer rubbers." It is to make it clear that the item covers all tubes and well packers and parts thereof.


Richard Bedford Bennett: It seems to me to be difficult to interpret the item, taking the last words in relation to the whole.


Charles Avery Dunning: The words, "for oil and gas wells"?


Richard Bedford Bennett: Yes. What does that cover? It says "not to include motive power."


Charles Avery Dunning: There is a semicolon after the word "power." It is faint but it appears after that word, so that there is an additional clause, "well packers and complete parts thereof, for oil and gas wells."


Jean-François Pouliot: We do not attach enough importance to punctuation in the tariff. There should be something special for periods; something special for semicolons; something special for commas, in order to please the most distinguished member of the house.


Grote Stirling: What happens to steel tubing under eight inches in diameter? Does that come under some other item, and is it free?


Charles Avery Dunning: 
[Stage Direction]
Item agreed to.
Customs tariff-410i. (ii) Combustible gas indicators, for detecting explosive gases or vapours; methane detectors; carbon monoxide detectors and continuous indicators and recorders; carbon monoxide alarms; pyro-tannic detectors for determining the presence and quantity of carbon monoxide in the blood; inhalators for use in reviving victims of carbon monoxide poisoning; pocket gas respirators, dust respirators, paint and lacquer spray respirators, fume and smoke masks, and hose mask outfits complete with face piece, harness, air line and air pump or blower, designed for the protection of firemen and industrial workers; special safety goggles, designed for eye protection of miners, welders, foundrymen and other industrial workers employed in hazardous work; complete parts of all the foregoing: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Richard Bedford Bennett: This is merely life saving apparatus.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: It is taken out of other items.


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Customs tariff1-411b. Cylinder stave saws, wheel type stave jointers, crozing and ehamphering machinery, and complete parts thereof:	British preferential tariff, 10 per
cent; intermediate tariff, 15 per cent; general tariff, 20 per cent.
Charles Avery Dunning: This makes provision for parts.


[Stage Direction]
Item agreed to.
Customs	tariff-412.	Machinery, being
presses for use in the printing of newspapers, of not less value by retail than fifteen hundred dollars each, of a class or kind not made in Canada, and complete parts thereof, not to include saws, knives and motive power; mechanical deliveries or conveyors for use with newspaper printing presses:	British preferential tariff, free; intermediate tariff, free; general tariff, free.
Charles Avery Dunning: The addition is "mechanical deliveries or conveyors" for use with newspaper printing presses.


Richard Bedford Bennett: They carried 15 per cent, 27 J per cent and 35 per cent.


Charles Avery Dunning: Yes, under item 427 of
the tariff. They are now included with the rest of the machinery for printing.


Richard Bedford Bennett: That is an odd thing.
It is all free but it is not to include saws, knives and motive power, but it is to include mechanical deliveries or conveyors for use with newspaper printing presses.

Customs Tariff


Charles Avery Dunning: The fact is that conveyors are not made in Canada; the other items are. There is no change with respect to saws, knives and motive power, all of which are commonly produced in Canada, but I am advised that no conveyors of this type are made in this country.


Richard Bedford Bennett: Mechanical deliveries and conveyors? That is new to me. I have seen many made in Canada.


Charles Avery Dunning: Not for printing presses.


[Stage Direction]
Item agreed to.
Customs tariff-412a. Machinery and apparatus, n.o.p., viz.:-Gun and mould apparatus for making press rollers; machines and apparatus for making electrotypes and stereotypes; engraving machines and apparatus, including photo-engraving apparatus, and other platemaking apparatus, used in the manufacture of printing plates of all kinds; machines and apparatus for graining metal plates; machines and apparatus for sensitizing, grinding or polishing metal plates; machines and apparatus including cameras and camera equipment, lens, prisms, camera and printing lamps, screens, and vacuum frames for transferring by photographic processes, or direct, to plates or rolls for use in lithography, rotogravure and printing; shading apparatus; machines and apparatus for addressing and /or wrapping newspapers, magazines, periodicals, pamphlets and catalogues; machines and apparatus for embossing or stamping or producing embossed or engraved effects, book-binding, looping, stitching, sewing, gathering, inserting, bronzing, dusting, creasing, scoring, cutting, perforating, drilling, punching, slitting, re-winding, glueing, pasting, gumming, waxing, varnishing, carbon coating, patching, numbering, ruling, jogging, sheet piling, tying, bundling, tubemaking, metal mounting, eye-letting, staying or stripping, reinforcing and box-covering; complete parts, not to include saws, knives and motive power; all the foregoing when for use exclusively by, and in their capacities as, printei's, lithographers, book-binders, manufacturers of stereotypes, electrotypes and printing plates or rolls, paper converters, or by manufacturers of articles made from paper or cardboard: British preferential tariff, free; intermediate tariff, free; general tariff, 10 per cent.
Richard Bedford Bennett: What is added to that item?


Charles Avery Dunning: It is amended in wording. It was last rewitten in May, 1930.


Richard Bedford Bennett: One part carries 15 per cent, 27i per cent and 35 per cent and the other is free, 5 per cent and 10 per cent.


Charles Avery Dunning: The rewording consists merely of the insertion in several places of words descriptive of the functions of certain modem pieces of equipment. The rates attached to the item have been revised to read free, free and 10 per cent. For many years under the intermediate tariff there has been a rate of five per cent, and while in the 12739-195J
fiscal year 1935-36 this represented a revenue of possibly $25,000, it has been decided to forego this revenue and to make this wide range of equipment available free of duty under both the British preferential and the intermediate tariffs.


Richard Bedford Bennett: I see some items that certainly are made in Canada. Sheet piling, for instance; that is one of the things they have recently commenced to make in Canada.


Charles Avery Dunning: I think this designates something quite different from the sheet piling my right hon. friend has in mind.


Richard Bedford Bennett: I would not think so.


Charles Avery Dunning: If my right hon. friend means sheet piling in the ordinary sense of the term, which is piling used in driving in a harbour or something of that kind, it is different. This is a sheet piling machine for piling sheets of paper at the end of a press.


[Stage Direction]
Item agreed to.
Customs tariff-422a. Concrete road-paving machines, self-propelling, end loading type, with a capacity of 21 cubic feet of wet concrete or more; concrete and asphalt road finishing machines; form graders; sub-graders; combination cable-controlled excavating and transporting scraper units; back-filling machines and equipment, mounted on self-propelling wheels or crawling traction, semi- or full-revolving boom and scraper type; steam or air driven pile hammers or extractors; well-points; truck turntables; all the foregoing of a class or kind not made in Canada, and complete parts thereof: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 12J per cent.
Item agreed to.
Customs tariff-424. Fire engines and other fire extinguishing machines and chassis for same; complete parts other than chassis parts: British preferential tariff, free; intermediate tariff, 30 per cent; general tariff, 35 per cent.
Abraham Albert Heaps: I note that under this item the British preferential has been reduced from 10 per cent to free. I should like to know how many fire engines were imported from Great Britain during the last fiscal year.


Charles Avery Dunning: Our imports of fire engines last year amounted to $61,500.


Abraham Albert Heaps: Was that from Great Britain?


Charles Avery Dunning: No, entirely from the
United States.


Abraham Albert Heaps: Were there any importations from Great Britain?


Charles Avery Dunning: No, but the British government asks for this consideration, evidently believing that British manufacturers can do
Customs Tariff

some business in Canada. I am advised that they lost several contracts by very narrow margins.


Richard Bedford Bennett: This reduction will close out the business at Woodstock, Ontario. That is why it was not made before.


Charles Avery Dunning: I have inquired as to the point to which my right hon. friend refers, and I gather that they are not manufacturers at all; that they just assemble parts of fire engines which are brought from elsewhere. The total reported production for the whole of Canada, including everything falling within this item, parts and everything else, was only $200,000 last year.


Richard Bedford Bennett: Yes, because the demand for fire engines is not usually very great. A fire engine is not an article that is sold largely, but if I may speak subject to correction my recollection is that these engines were made at Woodstock, Ontario. The item was discussed many times, and we were led to believe that to put it on the free list as suggested would mean the end of that industry at Woodstock, whether it was assembling or otherwise. My understanding was that it was more than assembling, but perhaps the minister is right and I merely bring the matter to his attention.


James Lorimer Ilsley: The Department of National Revenue investigated that plant recently and I am positively assured that it is nothing but an assembling plant.


[Stage Direction]
Item agreed to.
Customs tariff-427. All machinery composed wholly or in part of iron or steel, n.o.p., and complete parts thereof: British preferential tariff, 10 per cent; intermediate tariff, 274 per cent; general tariff, 35 per cent.
Item agreed to.
Customs tariff-427a. All machinery composed wholly or in part of iron or steel, n.o.p., of a class or kind not made in Canada; complete parts of the foregoing:	British preferential tariff, free; intermediate tariff, 274 per cent; general tariff, 35 per cent.
Richard Bedford Bennett: Those words "a class or kind not made in Canada' would mean that less than ten per cent of the Canadian consumption was made in Canada, I assume. The effect of that would be considerable, I should think.


[Stage Direction]
Item agreed to.
Customs tariff-427e. Automatic machines for making and packaging cigarettes, not to include tobacco-preparing machines:	British
preferential tariff, free; intermediate tariff, 27| per cent; general tariff, 35 per cent.
Item agreed to.

Customs tariff-427f. Machines for the manufacture of veneers and plywoods, viz.:-veneer clippers, veneer clipper knife jointers, veneer glue spreaders, veneer jointers, veneer lathes and veneer taping machines: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 35 per cent.
Grote Stirling: There are several more items where the British preference has been reduced from a certain percentage to free. Does that mean that in all these cases the British government has requested free entry? Has the British government requested free entry in this large number of cases, and has this government acceded to that request?


Charles Avery Dunning: With regard to item 427e, this is one of the items on which a reduction was requested by His Majesty's government in the united kingdom on the ground that a wider margin than had existed formerly would permit British producers of this highly developed, expensive, automatic machinery to cater to the requirements of Canadian users. With respect to 427f, this is an entirely new item, the consideration here being the development of an export market for veneer and plywoods of Canadian origin. This has materially increased the production of these articles, and there have been numerous requests from the producers of veneers and plywoods for some relief from the duty which so far has applied on practically each of these lines. Much of the machinery is automatic. It is all modern in type and quite expensive, and none of it is produced in Canada. It is represented to us, in connection with veneer making machinery, that the making of Canadian veneers is a developing industry and that we can assist it materially by admitting this machinery free of duty. In any event it is not made in Canada.


Grote Stirling: Has this long list of
requests come in since the passing of the Canada-United States trade agreement? The minister has been saying in connection with many items which show a reduction in the British preference that this has been done at the request of the government of the united kingdom. Has that been the case since the passing of the Canada-United States trade agreement?


Charles Avery Dunning: I am sure my hon. friend as a member of a former government will remember that these requests were fairly continuous. I cannot say as to whether or not these requests came in before the Canada-United States agreement or after it, but there were numerous requests before that, in any event. I do not think there is any connection in most cases.

Customs Tariff


Grote Stirling: The minister referred to the fact that in many cases the spread had practically disappeared, and I wondered whether the British government had made these requests in consequence of the agreement at which we have arrived' with the United States.


Charles Avery Dunning: Not in the case I quoted a few minutes ago.


Richard Bedford Bennett: The effect of this item will be to give Germany, the United States and other machinery producing countries a 10 per cent rate under the tariff as compared with free entry under the British preferential, whereas the former item gave Britain a 20 per cent spread as against the United States. Surely with this item as it now reads there will not be much chance for the free entry of goods from Great Britain.


Charles Avery Dunning: I asked that question
myself when the item was under consideration, and as a matter of fact it is practically certain that very little of this class of machinery can possibly come from Great Britain.


Richard Bedford Bennett: But a great deal will
come from Germany.


Charles Avery Dunning: Under the 10 per cent intermediate?


Richard Bedford Bennett: Yes. One of the complaints which were made was that with respect to this type of machinery Germany was in a significantly strong position and that, having regard to their present day costs of production, they could sell their goods in this country so cheaply that a 10 per cent duty did not amount to anything at all. That was the contention made by some of our Canadian producers with respect to certain types of machinery made in Canada, notably at Dundas.


Charles Avery Dunning: There is no competition at all.


Richard Bedford Bennett: I know there is none in this particular item, but it cannot mean that there will be anything for the British manufacturer under the free item.


Charles Avery Dunning: No; Great Britain is not competitive in this class of machinery. We are really making available to one of our own export industries the cheapest machinery of the type referred to.


[Stage Direction]
Item agreed to.
Customs tariff-427g. Power-driven centrifugal oil purifiers or extractors, bowl or tube type, not to include motive power, when for use in the extracting and refining of fish oils: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 35 per cent.
Richard Bedford Bennett: This is an item in which, if the principle mentioned by the hon. gentleman is to prevail at all, there is a singular departure from it. The intermediate rate has been increased by twenty-five per cent with respect to those nations which now enjoy the intermediate and which did not enjoy it before, and the spread between the British preferential and that is now only ten per cent. So they are ten per cent worse off than they were in respect to American competition before.


Charles Avery Dunning: You are speaking of the British?


Richard Bedford Bennett: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-429.	(a) Knife blades or
blanks, and table forks, of iron or steel, in the rough, not handled, ground nor otherwise manufactured; and spoon blanks of i-ron or steel, in the flat, not further manufactured than stamped to shape: British preferential tariff, free; intermediate tariff, 74 per cent; general tariff, 10 per cent.
Item agreed to.
(g) Razor blades; razors and complete parts thereof: British preferential tariff, free; intermediate tariff, 30 per cent; general tariff, 30 per cent.
Mr. LENNARD:: I for one am surprised to find that on the item for razor blades the duty is the same, because razor blades, aspirin tablets, soap and several other articles were widely proclaimed by the Liberal party during the election campaign as articles on which the duty was too high, and they said that if they were returned to power it would be lowered. I do not for a moment advocate the lowering of the duty; I just draw attention to the fact that on razor blades it remains the same.


Charles Avery Dunning: It is a conference item with an irreducible margin and could not be reduced at the present time.


[Stage Direction]
Item agreed to.
Customs tariff-430. Nuts and .bolts with or without threads, washers, rivets, of iron or steel, coated or not, n.o.p., nut and bolt blanks, or iron or steel, per one hundred pounds: British preferential tariff, 50 cents and 10 per cent; intermediate tariff, 50 cents and 20 per cent; general tariff, 75 cents and 25 per cent.
Richard Bedford Bennett: Is that only adding
"n.o.p."?


Charles Avery Dunning: That is the only change.


[Stage Direction]
Item agreed to.
Customs Tariff
[Stage Direction]
Customs tariff-430a. Hinges and butts, of iron or steel, coated or not, n.o.p.; hinge and butt blanks, of iron or steel, per one hundred pounds: British preferential tariff 75 cents and 10 per cent; intermediate tariff, 75 cents and 27J per cent; general tariff, 75 cents and 30 per cent.
Charles Avery Dunning: The same thing applies; adding "n.o.p." is the only change.


[Stage Direction]
Item agreed to.
Customs tariff-431b. Adzes; anvils; augers; bevels, n.o.p.; bits; braces; cantdogs; chisels; cleavers; crowbars; hand drills; files; hammers; hatchets; mallets, mattocks and eyes or polls therefor; nail sets; picks and eyes or polls therefor; planes; pliers; plumb bobs, n.o.p.; punches, n.o.p.; rasps; measuring rules and tapes of all kinds; saws, saw blades and hand saw frames; screw drivers; sledges; spirit levels; spokeshaves; squares, n.o.p.; threadcutting taps, dies and stocks; track tools; vises, n.o.p.; metal wedges; wrenches; socket wrench handles and adapters and sockets therefor: British preferential tariff, 10 per cent; intermediate tariff, 35 per cent; general tariff, 35 per cent.
John Ritchie MacNicol: If the minister will not think he has made a mistake in this item I would like to congratulate him upon leaving the duty as it was.


Charles Avery Dunning: I have an amendment which may or may not disappoint my hon. friend. The intention, of course, was not to change the rate, but there was an intention to include a number of items for specific description. The prime purpose was clarification. For instance, as the item stood before, it included bits but not the braces used with the bits. The rewording in certain instances involved purely incidentally an increase in duty under the intermediate tariff. The votes and proceedings indicate those slight changes. Immediately after the budget, notification went to customs ports that although this item with an intermediate rate of 35 per cent now included within its wording the additional tools referred to, the rate of duty to be levied on the same when imported from the United States, for example, or France, with which countries we had agreements, would be the rate set out under schedule I of Canada's agreement with the United States. But fear has been expressed in certain quarters that in spite of the fact that the customs authorities have instructions to honour the agreement rates, the inclusion of these words in an item bearing a higher rate might lead to mistakes and the collection of the higher rate of duty at certain ports, particularly in the smaller centres. If this were to occur it would constitute a violation of the letter of our agreement with the United States and to some extent of the agreement with France,

and rather than have any question arise now or in the future as to the maintenance of rates covered by agreement items it has been decided that the clarification be dropped and, therefore, there will be a motion to delete the item, which will leave the situation exactly as is.	.


James Lorimer Ilsley: I move:
That resolution No. 5, being the resolution to amend schedule A to the customs tariff, be amended by striking thereout tariff item 431b wherever the said item appears.


Richard Bedford Bennett: That may make some confusion with respect to shipments that have been entered since May 1.


Charles Avery Dunning: A direction went out immediately to collectors. If we delete it now the instructions they have to-day will involve the administration of the item just as it is in the tariff at present.


Richard Bedford Bennett: As it was before May 1?


Charles Avery Dunning: In relation to the United States, yes.


Richard Bedford Bennett: Certainly that cannot be so with respect to the British preferential, because it makes all the items ten per cent, and some items were as high as thirty per cent.


Charles Avery Dunning: That is true.


Richard Bedford Bennett: And with respect to the intermediate, which is the rate the United States now have, it means a reduction from forty-five per cent, which is the maximum they paid under the general tariff, to a minimum of twenty-five per cent on some items. That is clear. But what I cannot make out is the effect of withdrawing this item from the resolution. It is to leave the tariff rate as it was prior to May 1, 1936?


Charles Avery Dunning: Right.


Richard Bedford Bennett: Then what happens with respect to invoices that have come through in the meantime?


James Lorimer Ilsley: That would be subject to the amendment. The collectors were wired on May 1 as follows:
Until further instruction take all customs and excise entries presented on and after second instant subject to amendment. Notify out-ports by wire.
Therefore they will be adjusted to the rate which actually is the rate in force as determined by parliament.


Grote Stirling: I have not been quite able to follow the mechanics of this group of

Customs Tariff
items. Taking 431b, I understand the commodities which used bo come in under four separate items enumerated on the right hand side have now been grouped into one item.


Charles Avery Dunning: That is true.


Grote Stirling: Then are we dealing with the three other items?


Charles Avery Dunning: It would be more correct to say it was widened to cover others.


Grote Stirling: So these items still remain in the tariff?


Charles Avery Dunning: Yes.
Item as amended agreed to.
Customs tariff-431c. Machinists' or metal workers' precision tools and measuring instruments, viz.:-Calipers, micrometers, metal protractors and squares, bevels, verniers, gauges, gauge blocks, parallels, buttons, mercury plumb bobs, dividers, trammels, scribers, centre punches, pocket speed indicators, straight edges, key seat clamps and other clamps and vises used by toolmakers for precision work, precision tools and measuring instruments, n.o.p.: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 15 per cent.


Richard Bedford Bennett: Apart from putting the British preference in operation with respects to this item the effect is to reduce the intermediate tariff by a spread of thirty-five per cent, which is more than, the existing spread in some instances. What are the importations under this head?


Charles Avery Dunning: It is an entirely new item.


Richard Bedford Bennett: It is not entirely new as far as being subject to taxation is concerned. These commodities have been subject to duty all these years, under four heads.


Charles Avery Dunning: 
Richard Bedford Bennett: The ones the heavy duty was on were made in Canada. For instance, squares were made in Canada. Bevels are, or at least were, made here. I cannot say whether they are just now. Straight edges and certain other types of tools were made in Canada.


Charles Avery Dunning: On very careful inquiry we find they are not.


Richard Bedford Bennett: None of them, do you
say?


Charles Avery Dunning: Upon very careful inquiry I am advised that not one of these tools is made in Canada.


Richard Bedford Bennett: Then I must be mistaken, if the minister says that. I asked about squares, for instance, not long ago, and I was told that they were made in Canada. Apparently that is not correct.


[Stage Direction]
Item agreed to.
Customs tariff-431d. Engineers', surveyors' and draughtsmen's precision instruments and apparatus, viz.: alidades, altazimuth surveying instruments; aneroid barometers, engineering, military and surveying; angle prisms; boards, military sketching; box sextants; clinometers; compasses; cross staff heads; curves, adjustable, irregular, railroad and ship; eurvimeters; drafting instruments of all kinds, including fitted cases containing the same; dipping needles; drafting machines; heliographs; integrators; levels, tripod and hand or pocket types; levelling rods; liners, section; meters, portable, for hydraulic engineering pantographs; plani-meters; protractors; parallel rulers; parallel ruling attachments; poles, ranging; pedometers and paceometers; plane tables, military and topographic; scales, flat and triangular; slide rules; splines; straight edges, steel and wooden; tacheometers; tallying machines, pocket; tee squares, steel and wooden; telemeters; theodolites; transits, tripod and hand or pocket types; triangles of all types; tripods for use with any of the foregoing instruments: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 15 per cent.
Charles Avery Dunning: The same explanation
applies with the difference, of course, that these are engineers', surveyors' and draughtsmen's precision instruments.


Grote Stirling: They are not made in
Canada?
Customs Tariff

Mr. DUNNING Mr. BENNETT Mr. DUNNING No.
None of them? No.
Mr* DUNNING:	They might be almost
anywhere in the tariff, under a number of rates. If they were brass parts or steel parts they might fall into different categories.


[Stage Direction]
Item agreed to.
Charles Avery Dunning: At this point a motion
will have to be made with respect to customs tariff 431e, arising out of 431b. This amendment relates to measuring rules and tapes of all kinds, and it is just to reinstate these articles in the tariff at the old rate, as they were deleted by amendment to the former item. These are made in Canada.


James Lorimer Ilsley: I move:
That schedule A to the customs tariff, as amended by resolution No. 5 of May 1, 1936, be further amended by adding the following item, enumeration and rates of duty in said schedule A:
"43le measuring rules and tapes of all kinds: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff. 30 per cent."


Richard Bedford Bennett: Those are made in Canada?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: I believe it was a rule
I saw which was marked "made in Canada," and I was also of the opinion that a square was so marked, but apparently I am wrong in that. A T-square was the other one I had in mind. However, it would seem that I am wrong.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-435. Locomotives and motor cars for railways, of a class or kind not made in Canada, and complete parts thereof, for use exclusively in mining or metallurgical operations: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 20 per cent.
Charles Avery Dunning: The only change is in
the wording in connection with parts of mining locomotives.


Richard Bedford Bennett: The words "and complete parts thereof" are added?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: The duty is not changed.


Mr. LAWSON:: Was there a higher rate
on the parts previously?


Richard Bedford Bennett: They come under the
n.ojp. item.


Charles Avery Dunning: Under the basket item.


James Earl Lawson: Carrying a higher rate?

Customs tariff-438a. Automobiles and motor vehicles of all kinds, n.o.p.; chassis for the foregoing; chassis for electric trackless trolley buses: British preferential tariff, free; intermediate tariff, 17J per cent; general tariff, 27i per cent.
Provided that machines or other articles mounted on the foregoing or attached thereto' for purposes other than for loading or unloading the vehicle shall be valued separately and duty assessed under the tariff items regularly applicable thereto.


Richard Bedford Bennett: What is the purport of
this item?


Charles Avery Dunning: It is the major automobile item.


Richard Bedford Bennett: That is the one?


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-438b. Bearings, clutch release; bearings, graphite; bearings, steel backed babbit; bushings, graphited or oil impregnated; ceramic insulator spark plug cores, not further manufactured than burned and glazed, not printed or decorated and without fittings, commutator copper segments; commutator insulating end rings; discs of hot rolled steel, spun or forged, with or without centre hole, for disc wheels; distributor rotors, cam assemblies and vacuum control assemblies; door bumper shoes; electric wiring terminals, sockets, fittings and connectors; gaskets of metal and asbestos, composite; ignition contact points; keys for shafting; lenses for head; tail, dome, signal and cowl or parking lamps; lock washers; piston ring castings in the rough, with or without gates and fins removed; steel bolts capped with stainless steel; switches for lamps, and parts thereof; vulcanized fibre in sheets, rods, strips and tubing; all the foregoing being of a class or kind not made in Canada, when for use in the manufacture of the automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424, or for use in the manufacture of parts thereof, or for replacement or repair of automobiles, motor vehicles or chassis enumated in tariff items 438a and 424: British preferential tariff, free; intermediate-tariff, free; general tariff, 30 per cent.
Charles Avery Dunning: There is an amendment to be moved to the wording. The tariff board suggests with respect to 438b an amendment in line 2 by striking out the words "steel backed babbit" and by substituting therefor the words "steel backed non-ferrous" and by striking out the words "not printed or decorated and" in line 5 and substituting therefor the words "printed or decorated or not." The board suggests that modern developments in ithe bearings industry makes advisable a reference to non-ferrous bearings rather than

Customs Tariff
merely to those of babbit metal, and also that since spark plug cores have an imprint made on them before they are fired in' the kiln, it is advisable to change slightly the wording respecting printing and decorating of such cores. That is the reason for the amendment to 438b which I am asking my colleague to move.


James Lorimer Ilsley: I move:
That tariff item 438b as contained in resolution No. 5 of May 1, 1936, be amended in wording by striking out the words "Steel backed babbit'' in line 2 thereof and substituting therefor the words "steel backed non-ferrous" and by striking out the wrords "not printed or decorated and" in line 5 thereof and substituting therefor the words "printed or decorated or not."


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: What were the importations under this item last year, and from where did they come?


Charles Avery Dunning: Does the right hon. gentleman mean the parts item?


Richard Bedford Bennett: It may have an effect
on the Canadian parts industry.


Charles Avery Dunning: Last year the total
importations of automobile parts were valued at $19,600,000, in round figures. Parts of automobiles exported were valued at $3,224,000.


Richard Bedford Bennett: Has the minister an
estimate of Canadian production?


Charles Avery Dunning: The incomplete figures
show approximately $2:5,000,000.


Richard Bedford Bennett: My concern about the
item was that it has the effect of giving free entry to an enormous class of articles from the United States that paid all the way from 10 per cent to 35 per cent. The effect would be to displace production in Canada.


Charles Avery Dunning: This item is of a class
or kind not made in Canada.


Richard Bedford Bennett: It is intended to limit
the whole production?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: Well, that settles that,
because the effect of the 17^ per cent duty as now applied has been, with the sales tax and the excise tax, to increase the price of a certain type of automobile just about the difference in the sales tax, up to date.
I made inquiries since we discussed the [DOT] matter a few days ago.


Charles Avery Dunning: You are speaking of the
general question?


Richard Bedford Bennett: Yes, the general effect.
This one touches only parts not made in Canada?


Charles Avery Dunning: Yes. The board has been successful, in conference with elements concerned, in reconciling the differences between them, and I am advised that there is complete agreement with respect to the parts industry.


James Earl Lawson: Are the items covered
by item 438b dealt with in the report of the tariff board?


Charles Avery Dunning: Oh, yes, entirely.


James Earl Lawson: As well as those that are of a class or kind made in Canada?


Charles Avery Dunning: Yes. It was necessary to review the whole in order to arrive at the distinction as to the parts.


James Earl Lawson: So this is in pursuance of the board's recommendation?


Charles Avery Dunning: Oh, quite.
Item as amended agreed to.
Customs tariff-438c. Ammeters; arm rest and wheel housing lining of indurated fibre, pressed to shape; annual ball bearings and parts thereof; axle housings, one piece welded, machined or not; carbureters and parts thereof; chassis frames, without forgings, castings or stamped brackets attached; cigar and cigarette lighters, including base and parts thereof; control ventilator gear box; cylinder lock barrels, with or without sleeves and keys thereof; dash heat indicators; fuel pumps and parts thereof; gasoline gauges and parts thereof; hinges, finished or not, for bodies; horns, and parts thereof; instrument bezel assemblies and parts thereof; instrument board lamps; locks, electric ignition, steering gear, transmission, or combinations of such locks, and parts thereof; mouldings of metal, with nails set in position, lead filled or not; oil filters and parts thereof; oil gauges and parts thereof; pipe lines, bent to shape and equipped -with fittings or not, and tubing therefor, for fuel, air or liquid, for actuating hydraulic brakes; purifiers for air and parts thereof; purifiers for oil and parts thereof; radiator grills, assembled or not, but not polished or plated, and not to include finish or decorative moulding; radiator ornaments, unplated; radiator shutter assemblies, automatic; radiator water gauges; radiator shells, not plated, nor metal finished in any degree; shackles, bearing spring and parts thereof; speedometers, and parts thereof; spring covers of metal and closing strips or shapes therefor; stampings, body, cowl, hood, fender and instrument board, of metal, in the rough, trimmed or not, but not metal finished in any degree, nor welded, riveted, or otherwise further manufactured; starter switch assembly and parts thereof; steering wheels, and rims therefor; sun visor blanks of gypsum weatherboard; thermostats and parts thereof; throttle and spark buttons asemblies; vacuum tanks; windshield wipers and parts thereof; all the foregoing being of a class or kind not made in Canada, when imported by manufacturers of
Customs Tariff

the automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424, for use as original equipment in the manufacture of such automobiles, motor vehicles or chassis: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 30 per cent.
(1)	Provided, that if the above articles are imported by a manufacturer of automobiles motor vehicles or chassis enumerated in tariff items 438a and 424 whose total factory output during the year in which importation is sought does not exceed ten thousand complete automobiles, motor vehicles or chassis, and provided that not less than fifty per centum of the factory cost of production of such automobiles, motor vehicles or chassis, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be: British preferential tariff, free; intermediate tariff, free; general tariff, 25 per cent.
(2)	Provided, that if the above articles are imported by a manufacturer of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424 whose total factory output during the year in which importation is sought exceeds ten thousand automobiles, motor vehicles, or chassis, and provided that not less than sixty per centum of the factory cost of production of such automobiles, motor vehicles or chassis, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be: British preferential tariff, free; intermediate tariff, free; general tariff, 25 per cent.
Provided that from and after March 31st, 1938, the words "sixty-five" shall be substituted for the word "sixty" in the immediately preceding proviso;
(3)	Provided that the governor in council may make such regulations, if any, as are deemed necessary for carrying out the provisions of this item.


Charles Avery Dunning: I have an amendment on 438c. It is a case of wording only-if I may ask hon. members to follow this as they did the last item-by striking out the phrase "annular ball bearings and parts thereof" in lines 2 and 3.
Mr. BENNETT; My copy says "annual," anyway.


Charles Avery Dunning: That ought to come out. By striking out the words "without forgings, castings or stamped brackets attached" in lines 5 and 6; that leaves it just "chassis frames." By striking out the words "nor welded, riveted, or otherwise further manufactured" in lines 33 and 34; that relates to metal stampings.


Richard Bedford Bennett: All these are said to be of a class or kind not made in Canada?


Charles Avery Dunning: Yes. And then by amending the final clause of the main item to read as follows:
all the foregoing being of a class or kind not made in Canada, when imported for use in the manufacture of the automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424, or for use in the manufacture of parts thereof, or for the replacement or 
repair of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424.


Richard Bedford Bennett: That is to make similar phraseology with the preceding item?


Charles Avery Dunning: Yes. Then again, by
inserting after the word "imported" in proviso
(1)	, line 2, the words "for use as original equipment." And the same thing in proviso
(2)	. That is a very important addition to the proviso.


Richard Bedford Bennett: What is the effect of it?


Charles Avery Dunning: The effect of each of these I will deal with from my notes, if the committee permit. Annular bearings are recommended for deletion as they become the subject of a new item to be introduced a little later. The tariff board suggests that the descriptive clause attaching to chassis frames in the item of May 1 is probably unduly restrictive, and if insisted upon in administration might interfere seriously with the shipment of chassis frames to Canadian plants. It recommends, therefore, that the words referred to in the amending resolution be deleted, and also stampings, for much the same reason as in the case of chassis frames. The tariff board now suggests that it would be in the interests of the Canadian industry, with no adverse effect upon the consumer or any Canadian manufacturer, to delete the words named in the amendment. With regard to the final clause, the change is that the words "by a manufacturer of automobiles," etcetera. The board now recommends that the qualification be merely that these articles be imported for use in the manufacture of, instead of restricting the importation to the individual manufacturer. The idea is, of course, for existing industries to be in a position to service the parts. Then, with regard to the provisoes, the board now suggests that the provision of the proviso relates to parts used solely for the original equipment of the car, in view of the fact that the qualification on the basis of factory content could not properly be connected with other parts than those so used. These are all qualifications of verbiage, and interfere in no way with the general tenor and effect. They are all recommended by the board.


Richard Bedford Bennett: Yes. I was looking at the board's report. The effect of these, of course, will be to eliminate any possible drawbacks.


Charles Avery Dunning: Yes, entirely.


Richard Bedford Bennett: That is one purpose. I recall that when the item was under consideration-

Customs Tariff


Charles Avery Dunning: It takes the place of 1055.


Richard Bedford Bennett: Yes, this will take the place of that, and it must necessarily cover everything if it is to be effective.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: Am I right in assuming that the minister said a moment ago that the board had been able to reconcile the views of various producers and that this item is supposed to cover all the items regarding parts?


Charles Avery Dunning: Yes. I do not think-


Richard Bedford Bennett: That is very important.


Charles Avery Dunning: Of course there are other items to which the same thing applies.


Richard Bedford Bennett: Yes, of a class or kind not made in Canada.


Charles Avery Dunning: They are parts of one whole, of course. I can hardly believe the professions of agreement I hear with regard to these items.


James Lorimer Ilsley: I beg to move:
That item 438c, as contained in resolution No. 5 of May 1, 1936, be amended in wording as follows:
(1)	by striking thereout the phrase "annular ball bearings and parts thereof" (lines 2 and 3);
(2)	by striking thereout the words "without forgings, castings or stamped brackets attached" (lines 5 and 6);
(3)	by striking thereout the words "nor welded, riveted, or otherwise further manufactured" (lines 33 and 34) ;
(4)	by amending the final clause of the item to read as follows:
"all the foregoing being of a class or kind not made in Canada, when imported for use in the manufacture of the automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424, or for use in the manufacture of parts thereof, or for the replacement or repair of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424."
(5)	by inserting after the word "imported" in proviso (1) thereto, (line 2) the words "for use as original equipment."
(6)	by inserting after the word "imported" in proviso (2) thereto, (line 2) the words "for use as original equipment."


Richard Bedford Bennett: What I cannot quite understand is why there should be the free item under the intermediate tariff if sixty per cent is produced in the British empire. Take the top of the page:
Provided, that if the above articles are imported by a manufacturer of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424 whose total factory output during the year in which importation is sought exceeds ten thousand complete automobiles, motor vehicles or chassis, and provided that not less than sixty per centum of the factory cost-
That is "and," not "or."

of production of such automobiles, motor vehicles or chassis, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be-
That means they come in free from the United States if sixty per cent is produced in the British empire. Is that quite fair?


Charles Avery Dunning: Of course they got drawback formerly.


Richard Bedford Bennett: The test now for free entry from the United States is that sixty per cent is produced in the British empire. How can that be possible?


Charles Avery Dunning: Sixty per cent of the car.
Mr. BENNETT; No; it says "not to include duties and taxes." It is not that way at all. Not less than sixty per cent of the factory cost of production. I am reading at the top of page 22. But for the purposes of reading, the other is the same. We are going to make this sixty-five per cent after March 31, 1938. The point I am trying to make to the minister is that I cannot understand why the test of free entry from the United States is that sixty or sixty-five per cent should be made in the British empire.


Charles Avery Dunning: Of the whole automobile.


Richard Bedford Bennett: No, no.
Provided that not less than sixty per centum of the factory cost of production of such automobiles, motor vehicles or chassis, not to include duties and taxes, is incurred in the British empire, the rates of duty under this item shall be-
That is this great item here.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: And at the present
moment it is free in the British empire. It is free already under the intermediate tariff for the whole of the items. Turn over the page:
Provided, that if the above articles are imported by a manufacturer of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424 whose total factory output during the year in which importation is sought exceeds ten thousand automobiles, motor vehicles or chassis, and provided that not less than sixty per centum of the factory cost of production of such automobiles, motor vehicles or chassis, not to include duties and taxes, is incurred in the British empire, the rates of
duty under this item shall be_free___free..
..and twenty-live per cent. Free.... 17J per cent.... 27i per cent.
I can understand this last part of it:
438d. Front and rear axles; brakes; clutches, internal combustion engines; steering gears; magnetos; rims for pneumatic tires larger than thirty inches by five inches; trans-
Customs Tariff

mission assemblies; steel road wheels; and complete parts of the foregoing, all of a class or kind not made in Canada, when imported by manufacturers of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424 for use only in the manufacture of motor
trucks or motor truck chassis-free....174
per cent__27J per cent.
A corresponding item with respect to automobiles, as the minister will remember-free, 174 per cent and 274 per cent.
Now, when we are dealing with parts, we say, provided that if you make sixty per cent in the British empire you can bring them in free from the United States.


Charles Avery Dunning: Quite right.


Richard Bedford Bennett: It is sixty-five per cent in 1938?


Charles Avery Dunning: That is right.


Richard Bedford Bennett: May they be made in the British empire and brought into the United States before they come here? What is involved in the right to come in from the United States is the sixty per cent made in the British empire?


Charles Avery Dunning: Of the car, not of the parts.


Richard Bedford Bennett: I read it twice. The wording is the cost incurred in the manufacture of the car. If the car costs $1,000 at the factory and $600 of that cost was incurred in buying material from the British empire, the other $400 would come in free from the United States


Charles Avery Dunning: Yes.


Richard Bedford Bennett: I am bound to say that, as I read it, it is not very clearly put.


Charles Avery Dunning: Exactly the same as was done by drawback where fifty per cent was the qualification. Under this item the qualification is sixty per cent, with the proviso that they must jump to sixty-five per cent empire content on the date named.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-438d. Front and rear axles; brakes, clutches, internal combustion engines; steering gears; magnetos; rims for pneumatic tires larger than thirty inches by five inches; transmission assemblies; steel road wheels; and complete parts of the foregoing, all of a class or kind nor made in Canada, when imported by manufacturers of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424 for use only in the manufacture of motor trucks or motor truck chassis: British preferential tariff, free; intermediate tariff, 174 per cent; general tariff, 274 per cent.
Item agreed to.

Customs tariff-438e. Parts, n.o.p., for automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424, not to include wireless receiving sets, electric storage batteries, parts of wood, tires and tubes or parts of which the component material of chief value is rubber:-
(1)	Brake linings, and clutch facings whether or not including metallic wires or threads:-
(a)	when made from crude asbestos of Empire origin: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 35 per cent.
(b)	when made from crude asbestos of nonempire origin: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff, 35 per cent.
(2)	Automobile and motor vehicle engines, stripped, n.o.p., and complete parts thereof, n.o.p.: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 35 per cent.
(3)	Parts, n.o.p., whether finished or not: British preferential tariff, free; intermediate tariff, 30 per cent; general tariff, 40 per cent.
Charles Avery Dunning: There will be a change in this item which will be amended by inserting after the words "wireless receiving sets'' in line three thereof, the words "die castings of zinc," and by inserting in subitem (3) thereof before the words "whether finished or not" the words "not electroplated." This is to ensure against an increase in the rates on zinc die castings which were dutiable under item 346 at 15 per cent, 22 per cent and 25 per cent, this being a raw material of the plating industry. Second, it is to ensure that electroplated parts shall continue to be dutiable under the existing item covering such goods.


Richard Bedford Bennett: The duty is raised 21 per cent under the intermediate tariff. Is that a tariff board item?


Charles Avery Dunning: Yes, entirely so.


Richard Bedford Bennett: I do not recall having read the reasons they gave why it was necessary to raise the rate from 224 to 25 per cent with respect to both these items.


Charles Avery Dunning: This is the n.o.p. parts item and it is part of the general adjustment as between the parts manufacturer and the manufacturer of the completed automobile.


Richard Bedford Bennett: I realize that.


James Lorimer Ilsley: I move accordingly.


Richard Bedford Bennett: I cannot see what point there is in increasing the item under the general tariff, having regard to what we have left under that tariff. Why should it be raised from 25 per cent to 35 per cent?


Charles Avery Dunning: If my right hon. friend could assure me or could assure Canada that

Customs Tariff
all the countries now under the intermediate would remain there, then the situation would be different.


Richard Bedford Bennett: But there are very few left under the intermediate tariff.


Charles Avery Dunning: I am speaking of those now under the intermediate; will they remain there?	.


Richard Bedford Bennett: That is a singular reason to give for raising the tariff on that particular type of automobile parts. I think the hon. gentleman will find that his argument is a little skimpy.


Charles Avery Dunning: Not with respect to certain countries.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-438f. Hot rolled strip of iron or steel with rolled or mill edge, not being of greater value than 2§ cents per pound, of a class or kind not made in Canada, when imported by manufacturers of automobiles, motor vehicles or chassis enumerated in tariff items 438a and 424 or by manufacturers of parts of automobiles, motor vehicles or chassis enumerated in the tariff items 438a and 424 to be used in the manufacture of such automobiles, motor vehicles or chassis, or parts thereof, in their own factories, per ton: British preferential tariff, free; intermediate tariff, $4; general tariff, $8.
Richard Bedford Bennett: There has been a great deal of discussion about this item, and perhaps the minister could give us a little statement with respect to it. I understand that manufacturers were endeavouring to make this particular class of steel in Canada.


John Ritchie MacNicol: At Hamilton.


Charles Avery Dunning: I have my notes on this from the tariff board report. This carries over into this schedule the existing item which was created by order in council, the rates being reduced to free, $4 and $8 per ton on certain hot rolled strip steel of a class or kind not made in Canada for the automobile industry.


Richard Bedford Bennett: At that particular time this steel was not made in Canada, but I understand since then it has been in process of manufacture.


Charles Avery Dunning: Then this item would become inoperative. The words are in the item.


John Ritchie MacNicol: Recently I went to
Hamilton to see the rolling of steel which I was informed was to be used in the motor car industry. Has the minister had any report as to whether this has been successful?


Charles Avery Dunning: We have heard rumours of the experiments which are going on. The moment this steel is manufactured, this item does not operate.


Richard Bedford Bennett: They sent an investigator over to the foundry in my time.


[Stage Direction]
Item agreed to.
Charles Avery Dunning: I have a motion to cover annular ball bearings which were eliminated from the previous item. This amendment is to create item 438h to cover annular ball bearings and parts thereof, when imported for use only as original equipment in the manufacture of goods enumerated in tariff items 438a and 424, under regulations prescribed by the minister: Free, free and free.


[Stage Direction]
Amendment agreed to.
Charles Avery Dunning: I have another motion
to create a new item, 442, articles which enter into the cost of manufacture of the goods enumerated in the 409 group of items and in item 439c, when imported by manufacturers for use exclusively in the manufacture in their own factories of the goods enumerated in the aforesaid tariff items, under regulations prescribed by the minister: Five per cent, six per cent, six per cent. Provided that goods which are entitled to free entry or to a lower rate of duty than is mentioned in this item shall not be entered at the rate specified in this item. This amendment to the resolution is introduced for the purpose of widening the terms of the item to apply to the items enumerated in the farm implement group to include windmills. When this item was last amended the rate on windmills was free, 15 per cent and 25 per cent, and it was felt that articles entering into the manufacture of windmills should not receive a lower rate than applied to articles entering intc the cost of manufacture of farm implements This amendment is proposed to rectify that situation because in the item which has passed the committee windmills are included with other farm implements. This will give the same privilege to the raw materials entering into the construction of windmills as is given to those entering into the construction of other farm implements.


Richard Bedford Bennett: In view of the fact that this item does not appear in the tariff schedules, perhaps it could stand. The minister could go on to the next item and we shall have a chance of looking at this one. It will be on Hansard and I can read it between now and the next sitting.


Frederick George Sanderson: Shall the amendment
stand?
Customs Tariff


Charles Avery Dunning: It does not amend anything that is now before the committee. It is a new item and the Chairman will bring it back to our attention before we complete proceedings in committee on it. I can assure my right hon. friend, however, that the wording is not changed; it is solely for the purpose of giving the windmill manufacturer the same rate of duty on raw materials as the other farm implement manufacturers get.


Richard Bedford Bennett: Very well; I can look at it in the bill.


[Stage Direction]
Amendment agreed to.
Customs tariff-445a. Electric head, side and tail lights, n.o.p.: electric torches or flashlights and complete parts therefor:	British
preferential tariff, 20 per cent; intermediate tariff, 30 per cent; general tariff, 30 per cent.
Richard Bedford Bennett: Are these made in Canada?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: What are the importations?


Charles Avery Dunning: The total imports are $544,000, of which $521,000 came from the United States. Our own production of incandescent lights is $496,000.


[Stage Direction]
Item agreed to.
Customs tariff-445f. Electric dynamos or generators and transformers, and complete parts thereof, n.o.p.: British preferential tariff, 25 per cent; intermediate tariff, 33J per cent; general tariff, 37J per cent.
Richard Bedford Bennett: What are the importations?


Charles Avery Dunning: They amounted to $365,000, of which $275,000 came from the United States and $81,000 from the united kingdom.


Richard Bedford Bennett: What is our production?


Charles Avery Dunning: Our production is $2,835,000.


Richard Bedford Bennett: There has been a good deal of discussion as to whether or not we should limit the importations to a greater extent than we have done, because of importations of secondhand dynamos from across the line, dynamos discarded by them and brought in here.


Charles Avery Dunning: There is difficulty in connection with the whole matter of second hand equipment, and this we are endeavouring to watch.


[Stage Direction]
Item agreed to.
[The Chairnian.l
Customs tariff-445g. Electric motors, and complete parts thereof, n.o.p.: British preferential tariff, 25 per cent; intermediate tariff, 33J per cent; general tariff, 37J per cent.
Item agreed to.
Customs tariff-445k. Electric apparatus, and complete parts thereof, n.o.p.: British preferential tariff, 15 per cent; intermediate tariff, 25 per cent; general tariff, 30 per cent.
Item agreed to.
Customs tariff-445m. Flameproof electric switch gear, for use underground in coal mines, and complete parts thereof: British preferential tariff, free; intermediate tariff, 20 per cent; general tariff, 30 per cent.
Grote Stirling: What is the change?


Charles Avery Dunning: The addition of "parts thereof'; there is no change in the rate.


[Stage Direction]
Item agreed to.
Customs tariff-446a. Manufactures, articles or wares of iron or steel or of which iron or steel or both are the component materials of chief value, n.o.p.: British preferential tariff, 10 per cent; intermediate tariff 27i per cent; general tariff, 35 per cent.
Richard Bedford Bennett: This is the basket item?


Charles Avery Dunning: Yes.


Richard Bedford Bennett: With respect to iron and steel?


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-447a. Sand cast rolls and chilled east iron rolls imported by proprietors of rolling mills for use exclusively in rolling iron or steel, or by manufacturers of paper for use exclusively in manufacturing paper in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Charles Avery Dunning: I have an amendment which will read:
Sand cast rolls and chilled iron rolls for use exclusively in rolling iron or steel or in the manufacture of paper.
We do not restrict it to the manufacturers themselves who import the article, provided it is imported for use in the manufacture. It has been represented that the manufacturer very seldom imports these heavy sand cast rolls himself, because other processing has to be done in connection with them by an engineering firm, and the wording in votes and proceedings would limit it to the manufacturer.


John Ritchie MacNicol: Only the manufacturer will import them?

Radio Commission-Final Report


Charles Avery Dunning: An engineering firm can import them provided they are for use in the manufacture of these articles.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Customs tariff-447b.	Forged steel rolls,
hardened and ground, imported by proprietors of rolling mills for use exclusively in rolling non-ferrous metals: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Charles Avery Dunning: I have an amendment to this item, which will now read:
Forged steel rolls, hardened and ground, when imported for use exclusively in rolling non-ferrous metals.
Take a steel manufacturer who is putting in a new mill. In this case the engineering firm building the mill for him will be able after this amendment, to import the rolls and incorporate them in the mill that is being built. I was advised by those interested that the wording here would compel the manufacturer obtaining the final equipment to import these rolls himself, though as a matter of fact he would have to ship them immediately to the engineering firm in order to have them incorporated in the equipment.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Progress reported.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, May 26, 1936