1936-03-18

AGRICULTURE AND COLONIZATION

[Stage Direction]
Mir. W. G. WEIR (Macdonald) moved concurrence in the second report of the standing committee on agriculture and colonization, laid on the table on Thursday, March 12.
Motion agreed to.

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

Mr. ELLIOTT (Kindersley):: What are the duties of Mr. John Vallance who recently received the appointment as federal drought commissioner for the three prairie provinces, and the salary connected with this appointment?


Mr. GARDINER:: Under the direction of the Department of Agriculture to conduct the following:
(1)	Act as federal representative on or liaison officer with
(a)	Alberta special areas board
(b)	Saskatchewan land utilization board
(c)	Manitoba utilization board.
(2)	To investigate applications for federal assistance from individuals, groups of farmers, municipalities, etc., which might come direct in reference to:
(a)	Water development
(b)	More district experiment sub-stations
(c)	Necessity for additional reclamation stations.
(3)	In phases of work in which grants under this act are made to the provinces for the moving of settlers, educational work in municipalities, etc., to act as the federal supervisor to guarantee the expenditure of federal moneys as per agreements as drawn up.
(4)	To closely contact the various aspects of work under the Prairie Farm Rehabilitation Act in order that they may be closely related to each other and to provincial activities in those areas.
(5)	To compile such reports as may be needed for the department in reference to the above, to prepare articles, address public meetings, and perform other related work as required.
Salary, $4,000 per annum, and travelling
expenses.


CIVIL SERVICE COMMISSION
Mr. CRETE:: 1.	Were the salaries of Miss E. E. Saunders and Messrs. S. J. Daley, A. Thivierge, C. E. Garrett, and G. T. Jackson, members of the staff of the civil service commission, increased recently?
2.	If so, what is the amount of each such salary increase and was same done by order in council ?
3.	If so. what is the date and number of such order in counoil?


Mr. RINFRET:: 1,	2 and 3. By authority of order in council of December 19, 1935, P.C. 8/3904, the positions occupied by the five officers named in the questions and listed below, were reclassified. The maximum salary in each case was increased as listed and opposite each name the immediate effect of this is indicated.
Questions

Name	Salary Maxima	RemarksSaunders, Miss E. E	from	S3,480	to	$3,720	No immediate increase.Daley, S. J	from	$3,480	to	$3,720	No immediate increase.Thivierge, A	from	$3,480	to	$3,720	No immediate increase.Garrett, C. E	from	$3,000	to	$3,720	Immediate increase of $120	per
annum.
Jackson, G. T	from	$3,000	to	$3,720		Immediate increase of $480	per
annum.


Mr. CRETE:: 1.	Were the salaries of the Misses J. J. Siddall, E. W. Sibley, M. Balmer, J. Dey, M. St. Denis, E. Reddington, M. O'Shaughnessy and B. Grant, and of Mr. H. Wilson, members of the staff of the civil service commission, increased recently?
2.	If so, what is the amount of each such salary and was same done by order in council?
3.	If so, what is the date and number of such order in council?


Louis Édouard Fernand Rinfret: 1,	2 and 3. By authority of order in council of December 19, 1935, P.C. 8/3904, provision was made for the reclassification of nine positions occupied by the officers named in the questions and listed below. The maximum salary in each case was increased as listed and opposite seven names the immediate effect of this is indicated. It should be noted that in two of the cases mentioned action has not been completed.
Name	Salary Maxima
Siddall, Miss J. J	from	$1,920	to	$2,400	.Sibley, Miss E. W	from	$1,920	to	$2,400	.Balmer, Miss M	from	$1,920	to	$2,220	.Day, Miss I	from	$1,620	to	$1,920St-Denis, Miss M	from	$1,380	to	$1,620	.Reddington, Miss E	from	$1,380	to	$1,620O'Shaughnessy, Miss M. . ..from	$1,380	to	$1,620	.Grant, Miss B	from	$1,380	to	$1,620	.Wilson, H. G	from	$1,020	to	$1,380	.
Action not yet completed.
Remarks
No immediate increase.
No immediate increase.
Immediate increase of $60 per annum.
Immediate increase of $120 per annum.
No immediate increase.
Immediate increase of $120 per annum.
Immediate increase of $180 per annum.


AVILA VEZINA
Mr. WERMENLINGER:: 1.	Was one Avila Vezina, of Boisehatel, employed by the Department of Marine, in Quebec?
2.	If so, since when?
3.	When did he leave the service of the department and why?


Mr. HOWE:: 1.	Yes.
2.	March 25th, 1932.
3.	Avila Vezina was a casual employee of the Department of Marine at Quebec. His services were dispensed with on the 6th November, 1935.


CANADIAN FARM LOAN BOARD
Mr. ELLIOTT (Kindersley):: 1.	How many farmers of Kindersley constituency in Saskatchewan applied during the year 1935 for a loan under the provisions of the Canadian Farm Loan Act?

2.	In how many cases was the loan application granted and the loan made?
3.	What was the amount of each such loan?
4.	In how many cases was the loan application refused?
5.	In how many cases was the loan application refused after being passed or recommended by the inspector?
6.	What was the total amount involved in the loan applications that were refused?


Mr. DUNNING:: The records of the Canadian Farm Loan Board are not kept by constituencies and the information asked for is not now available.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. ISNOR:: 1.	Is it the practice of the government to pay an extra bonus consisting of six months' salary to all employees who are entitled to superannuation?

Wheat and Other Grains
2.	Is this followed by all departments of the government?
3.	If not, which departments?


Louis Édouard Fernand Rinfret: Return tabled herewith.


LOANS TO PROVINCES
Mr. RYAN:: 1.	What is the total amount of loans made to each province by the Dominion of Canada?
2.	When and for what purpose were each of said loans made?
3.	How much of each of said loans was reimbursed to the dominion government either for principal or interest?
4.	What is the total amount of interest due on said loans?



MOTIONS FOR PAPERS


Right Hon.   S@: For a return showing: (a) the number of bushels of wheat sold per day by the Canadian wheat board since the 1st day of December, 1935; (b) the number of bushels of each grade so sold; (c) the price per bushel of each grade so sold; (d) to whom the said wheat was sold; (e) the point at -which the wheat so sold was stored at the time of sale; (f) the extent to which the wheat so sold has been exported from Canada.
He said: I would ask the minister if he woidd allow this motion to pass and bring down such papers as are ready and those that can be got ready, on the conditions set forth by the minister on Monday last.


Hon. W. D. EULER (Minister of Trade and Commerce):: Mr. Speaker, just so that there may be no misunderstanding, we offered to bring down as soon as possible the information, subject to what is considered advisable.


Mr. CAHAN:: Advisable?


William Daum Euler: And possible.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister, for Mr. Power) moved that the house go into committee to-morrow to consider the following proposed resolution:
That it is exipedient to bring in a measure amending the Pension Act to provide for the merging of the pension appeal court with the pension commission, the setting up of an appeal division of the commission and the appointment of new commissioners to facilitate the hearing of applications; to limit the time for making application for pensions in certain cases; to limit the payment of retroactive pensions; further to provide, in the case of the death of
an eighty per cent pensioner, for the removal, for the benefit of his dependents, of the ten-year limitation; and generally to provide for and clarify the procedure and jurisdiction of the commission and of the appeal division thereof.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
Hon. T. A. CRERAR (Minister of Immigration and Colonization) moved that the house go into committee to-morrow to consider the following proposed resolution:
That it is expedient to amend the Soldier Settlement Act to provide that the period during -which payments of arrears or instalments subject to bonus privileges may be made be extended to the thirty-first day of March, 1938.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable considena-tion of the house.
Motion agreed to.


William Daum Euler: That a special select committee consisting of: Messrs. Barry, Beaubier, Bennett, Coldwell, Crerar, Deathman, Donnelly, Euler, Fair, Gariepy, Hamilton, Jacobs. Leader, MacKinnon (Edmonton West), MacMillan (Mackenzie), McLean (Melfort), McNiven (Regina City), Perley (Qu'Appelle), Pottier, Ross (Moose Jaw), Senn, Sylvestre, Winkler, be appointed to investigate and report upon the marketing of wheat and other grains under guarantee by the dominion government and upon all matters pertaining thereto, that rule 65 be suspended in relation thereto. And that the committee have power to call for persons, papers and records, to examine witnesses for evidence, to print such papers and evidence from day to day, as may be ordered by the committee for the use of the committee and members of the house, and to report from time to time.


Mr. E. E. PERLEY (Qu'Appelle):: Can the minister assure us that this order of reference is wide enough to cover thei calling of witnesses from and the producing of books
Wheat and Other Grains

and papers by the grain exchange and the clearing house at Winnipeg and the terminal elevators in the east?


William Daum Euler: Such is the intention. I think that is covered by the phrase "upon all matters pertaining thereto." It is the intention to give the committee the necessary powers to investigate the marketing of wheat and other grains under guarantee by the dominion government, and to get all the information possible in that regard.


Mr. T. L. CHURCH (Broadview):: Will this committee be empowered to report on the alleged mixing and bootlegging of Canadian card wheat with American wheat in transit, and on other matters covered by the Turgeon report?


William Daum Euler: I would say not.


Sir GEORGE PERLEY (Argenteuil):: Mr. Speaker, I do not know how far the government intends to go with this inquiry, but I would remind the Prime Minister (Mr. Mackenzie King) that two years ago the operations of Canadian Cooperative Wheat Producers Limited were thoroughly investigated by the banking and commerce committee. Further than that, as the Prime Minister will remember, a committee was appointed last session to consider the wheat board bill and the operations of Canadian Cooperative Wheat Producers Limited. There is no objection from this side to going further into the operations of Canadian Cooperative Wheat Producers Limited, but I suggest that they have already been thoroughly investigated by committees of this house. It seems to me hardly worth while to spend a lot more money for the purpose of again going over ground which was covered two years ago by the banking and commerce committee and last session by a special committee.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, my recollection is that at the beginning of the session the right hon. leader of the opposition (Mr. Bennett) asked for this very thing, and we are most anxious to oblige him in this particular as, where we can, in all others. I should add further that I do not believe that these operations can be investigated too thoroughly.


George Halsey Perley: There is no objection to their being investigated, and I thank the Prime Minister (Mr. Mackenzie King) for being so willing always to concur in any suggestion made by our leader. But, as I said before, this matter was gone into two years ago as well as at the last session, and it seems hardly worth while to summon again

the same *witnesses and spend a lot of public money for the purpose of bringing out facts which have already been made public.


William Lyon Mackenzie King: It will I think be found that this investigation will be wider in its scope and carried on perhaps with a greater degree of freedom.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house in committee of ways and means, Sir Eugene Fiset in the chair.
George Halsey Perley: Before an item
is called I should like to say that while we are very happy to see the hon. member for Rimouski (Sir Eugene Fiset) in the chair, we desire to express our regret that the Deputy Speaker (Mr. Sanderson) has suffered an accident. I desire to express the hope that the results are not serious and that he will soon be with us again in good health.


William Lyon Mackenzie King: I wish to
thank my right hon. friend for what he has just been kind enough to say. I am pleased to be able to give him the assurance that in all probability the Deputy Speaker will be in his place again on Monday next.
United States tariff-802. Whiskey of all types and classes, $2.50 per proof gallon.
Provided, that this provision shall not apply to any whiskey consisting in whole or in any part of distilled spirits which have not been aged in wooden containers at least four years prior to the date the whiskey is entered, or withdrawn from warehouse, for consumption.


Charles Hazlitt Cahan: Could we have an explanation as to the extent to which this item will apply? It provides for the admission into the United States of whiskey of all types and classes with the following provision:
Provided, that this provision shall not apply to any whiskey consisting in whole or in any part of distilled spirits which have not been aged in wooden containers at least four years prior to the date the whiskey is entered, or withdrawn from warehouse, for consumption.
I notice, however, on page 22 of the white paper which was submitted by the Prime Minister giving the tabular statement of tariff changes resulting from the Canada-United States agreement, that item 802 of the United States tariff applies to whiskey, aged not less than four years in wood containers, the previous duty, being So per gallon and the proposed rate, $2.50 per gallon. I should like to know definitely, first, whether the item which is now under discussion, 802, applies solely and exclusively to whiskey

Canada-U. S. Trade Agreement
produced in Canada and exported to the United States in wood containers, or whether it applies to the export of bottled goods as well.


William Daum Euler: It applies to both; it must be aged at least four years.


Charles Hazlitt Cahan: I notice that by a departmental ordinance or decree of the United States liquor imported in bottles cannot bear a label containing the words "bottled in bond under government supervision," and I understand that it has been determined in the United States that these words cannot be used on bottled goods imported even though it is stated on the label that these goods are bottled in Canada and not in the United States. It has been called to my attention that the application of this departmental ordinance or decree will practically preclude the export of bottled goods which have been bottled in bond under government supervision in Canada. If that is correct it will certainly restrict to a very considerable degree the value of this item 802. Perhaps later the minister will deal with the question. This ordinance or decree, according to its terms, was to come into force on February 15 last, but I understand that, by reason of the negotiation of the Canada-United States trade agreement which is now under the consideration of this committee, its application was postponed for six months. I suggest to the Minister of Trade and Commerce that unless that matter is determined now I can foresee that once this agreement is ratified by parliament there will be little chance indeed of having that ordinance repealed, and I bring to his attention the fact that the effect of that ordinance will be to destroy the industry engaged in bottling liquors in Canada and tend to transfer that bottling industry to the United States. I am simply calling attention to this as a factor which mitigates against Canadian exporters receiving the full advantage of the agreement.
There is another matter to which I would call attention. In a bill which has already passed the house of representatives and is now under the consideration of the senate of the United States, section 403a provides as follows:
Whenever the Secretary of the Treasury finds that there has been instituted, or that process has been issued for the institution of, any proceeding by the United States, based upon a claim arising under the customs or internal revenue laws in connection with an alleged importation or bringing into the United States of distilled spirits, wines, or fermented malt
liquors, against any person, whether or not a resident of the United States, and that such person has, or at the date of the enactment of this act had, a substantial interest, direct or indirect, in any plant, establishment, or business outside of the United States for the production, manufacture, rectification, selling, or marketing of distilled spirits, wines, or fermented malt liquors, the secretary shall publish such information as will, in his judgment, sufficiently identify such person and such plant, establishment, or business, and after such publication no distilled spirits, wines, or fermented malt liquors produced, manufactured, rectified, sold or marketed by such person, or in which he has any interest, or produced, manufactured, rectified, sold or marketed in or by any such plant, establishment, or business shall be imported or brought into the United States unless and until such person submits to the jurisdiction of the court of the United States in which such proceeding has been instituted, or out of which such process has been issued, and, to secure payment of the claim, furnishes to the Secretary of the Treasury such security as he may require, but not in excess of double the amount of the claim, or complies with such other reasonable terms as he may impose.
It is well known-and I do not wish to enter into a detailed discussion of it-that the United States treasury has preferred claims either directly or indirectly against almost every leading Canadian distillery and is seeking to impose penalties and obtain payment of a vast number of claims amounting to many tens of millions of dollars from Canadians who are domiciled and resident in this country, and who are not subject to the jurisdiction of United States courts. This bill, which appears to me to attempt by an indirect method to obtain jurisdiction over Canadian nationals domiciled in Canada and over whom the United States courts would not, except for this proposed enactment, obtain jurisdiction, is one which, if enacted by the Congress of the United States, would really reduce almost to a nullity the advantages of the reduction proposed to be made in this agreement from $5 customs duty per gallon to S2.50 per gallon on Canadian whiskey entering the United States.
I do not know that I have ever drunk a glass of Canadian whiskey in my life and therefore I am not personally interested-


Mr. JACOBS:: What are you waiting for?


Charles Hazlitt Cahan: Well, I can find other decoctions which suit my taste better. But I commend this item and this proposed reduction, not from the point of view of the whiskey trade, but because it is one item in this agreement which will, I think, to a certain extent enable Canada to reduce the balance of trade which now and for many years has been against us in our dealings with
Canada-TJ. S. Trade Agreement

the United States. I discussed that question once, and I am simply referring to it for this moment again. I am thoroughly convinced we cannot maintain any stable monetary policy in this country so long as we are purchasing from the United States, as we have done in years past, so many million dollars in value of their products in excess of the value of the products which we sell to them. I think that goes to the very root of our monetary and credit policy. From that point of view I commend this item to the committee and intend to vote for it, and I would do anything I reasonably could to secure its approval by the committee. But with that I have in my mind that, if the bill which, having already passed the house of representatives, is now before the United States senate, is enacted and enforced in the United States, it will almost completely wipe out any advantage which we would otherwise obtain under this item of the proposed agreement now under consideration. I would like to be assured by the government that every reasonable measure is being taken to represent to the United States government, and through that government to the United States congress, that the enactment of the bill now under consideration in the United States senate would preclude this country taking any reasonable advantage of the item.
I do not wish to cast any aspersions, but I remember in my youthful days, under an old reciprocity agreement of many years ago, preserved fish was permitted to enter the United States free of duty, and that was followed by a United States duty on the tin cans which absolutely precluded us from doing business in that country by the export of those fish products in proper packages. I trust that, concealed beneath this item, there is not the prospective enactment of the section of the bill to which I have called attention and which was discussed and passed by the house of representatives on August 22, 1935, the whole bill being found at page 14120 of the congressional record for that date.


William Daum Euler: The references made by my hon. friend to the difficulties surrounding the export of liquor under the new and favourable rates of duty to the United States have come to the knowledge of the government and, I may say quite frankly, have given the government considerable concern. As the hon. member says, if either of these two provisions, the one with regard to labeling and the other with regard to the action which is brought against the various distilleries in Canada, come into force and are applied,
TMr. Calian.]
they will to a very great extent nullify the benefit conferred by the reduction of duty under the trade agreement. The committee will understand that this is quite a serious matter, when it is realized that there is in stock in Canadian distilleries something like
25,000,000 or 35,000,000 gallons, which at a value of perhaps $6 a gallon would run to some $150,000,000 or $180,000,000. If these liquors can be exported to the United States there will be a saving at least to the Canadian exporter which would be reflected, perhaps, in the way my hon. friend suggests, and, maybe, in increased income taxes to those who make profits out of the liquor, would amount to a very large sum; possibly $75,000,000 is the amount of money that might be involved.
These two matters are not mentioned in the agreement at all. They have developed since the agreement was signed.


Charles Hazlitt Cahan: No, no.


William Daum Euler: Perhaps I should correct
that; they have come into more active discussion since the agreement was signed.


Charles Hazlitt Cahan: I think that is correct.


William Daum Euler: I will put it in that way. And, as was stated by the hon. member, if these two or either of them come into force they will very largely nullify the benefit of the reduced rate on whiskey which we have secured.	[DOT]
So far as the labels are concerned, that regulation comes into force on August 15 unless it is altered. With regard to the embargo that may be placed against Canadian liquors, Canadian whiskey, unless certain action is taken by the distillers, that has not yet become law and is still a matter of consideration.
I do not know just how far I should go with regard to an expression of opinion on the part of the government, except that it has given and is now giving the government very considerable concern, because of the fact mentioned by my hon. friend, that if these regulations are carried out and if this legislation is carried through it will appear, at least-I will not say that it is intentional at all-as if it were intended almost to nullify the granting of the decreased rate of duty on whiskey and to destroy that business.
With regard to this I can only say in conclusion that I think the government of the United States is fully aware of the view which the Canadian government takes with regard to the matter. I am not sure that I can say any more with regard to that at the moment.

Canada-U. S. Trade Agreement


Charles Hazlitt Cahan: I thank the hon. gentleman for the very explicit statement he has made. I restrained myself considerably in dealing with it-


William Daum Euler: So did I.


Charles Hazlitt Cahan: -because I realized that perhaps a prolonged discussion in this house might not facilitate the acceptance of the representations which the government no doubt are making and will make; and having stated the case, I personally do not wish to proceed further with a discussion of it.


William Lyon Mackenzie King: I should like to add just a word in reference to what the minister has said as to this matter assuming a new importance since the agreement has come into effect. As my hon. friend apparently knows it is a very old issue. It is not something which has come into being just recently; it is a matter which has been under consideration by department of the United States government for some considerable time.


Charles Hazlitt Cahan: I knew of the fact that the previous government was aware to a certain extent of the difficulties which had arisen when this bill, of which I read one section, was introduced in the house of representatives, and a great many people were, I think, hopeful that in the course of the negotiations between the present government and the United States government some understanding might have been reached with regard to the final enactment of that measure.


William Lyon Mackenzie King: I think my hon. friend will find that the representations the government have made will be helpful towards that end.


Mr. DOUGLAS:: I would like to ask the minister whether the government were aware at the time this agreement was signed that this legislation was passing through the house of representatives, or had passed last August?


William Daum Euler: It is not through the senate.


Thomas Clement (Tommy) Douglas: But through the house of representa ti ves ?


William Daum Euler: Yes.


Thomas Clement (Tommy) Douglas: Would it not have been possible to provide in the new agreement some item that would have prevented this embargo?


William Daum Euler: The government of Canada cannot very well interfere in the domestic affairs of the United States. They have complete authority to do as they please. This agreement was not subject to ratification; the president had complete power.


Thomas Clement (Tommy) Douglas: I was not suggesting that. I was asking if it would not have been 12739- 78
possible to have in the Canada-United States agreement some clause which would have prevented this item from being nullified by the legislation pending.


William Lyon Mackenzie King: Perhaps I might point out to my hon. friend that there is an article in the agreement, Article XI, which is intended to meet the sort of contingency that he and possibly others may have in mind. Article XI reads:
In the event that the government of either country adopts any measure which, even though it does not conflict with the terms of this agreement, is considered by the government of the other country to have the effect of nullifying or impairing any object of the agreement, the government which has adopted any such measure shall consider such representations and proposals as the other government may make with a view to effecting a mutually satisfactory adjustment of the matter.
That provision has been inserted to avoid the possibility of occurrences of the kind my hon. friend has mentioned. Of course, as the minister has just said, it is not within the province of one country to interfere in the domestic affairs of another country, and it is not for the government of Canada to tell either the house of representatives or the senate of the United States what they should or should not do. Nothing of that kind could appear in any agreement; it would not be permitted to appear. But I can assure my hon. friend that with respect to this matter, as far as it affects Canadian interests, the position and the interests of Canada have been most fully represented at Washington, I have every reason to believe that such representations are being sympathetically considered, though what final action may be taken by any legislative body in the United States it is, of course impossible to say.


George Halsey Perley: I am glad to hear what the Prime Minister has just said on this subject. I only want to ask now, since I understand that there is in the agreement a provision for negotiation if a clause of the agreement is completely nullified by some other legislation, whether in case such negotiations should not be successful that would give Canada the right to terminate the agreement. This is a serious matter.


William Lyon Mackenzie King: If any essential feature of the agreement were impaired by some action of the United States, I should feel that, under the escape clauses there would be opportunity for the dominion to go the length, if need be, of rescinding the agreement after having made the proper representations.


[Stage Direction]
Item agreed to.
[Stage Direction]
Canada-U. S. Trade Agreement
[Stage Direction]
United States tariff-1402.	Pulpboard in
rolls for use in the manufacture of wallboard, not plate finished, supercalendered or friction calendered, laminated by means of an adhesive substance, coated, surface stained or dyed, lined, or vat-lined, embossed, printed, decorated or ornamented in any manner, nor cut into shapes for boxes or other articles and not specially provided for, 5 per cent ad valorem.
Mr. MacNICOL:: 
William Daum Euler: I think the hon. member is concerning himself unnecessarily under the mistaken idea that the pulpboard is to be manufactured into paper. I thought I heard him say that.

Canada-U. S. Trade Agreement


John Ritchie MacNicol: Yes.


William Daum Euler: It is not. The item states that it is to be used in the manufacture of wallboard, and is taken definitely from the item in our tariff as it existed before. I suggest that it is purely reciprocal. As a matter of fact we are now receiving a reduction from ten per cent to five per cent ad valorem. May I add that the item should not be very alarming, when we imported only $57,000 worth from the United States. Our exports of this particular commodity cannot be segregated. We have an item of something like $900,000 worth of exports to the United States, in which are included these and similar products. This is not a new departure; it has been in the tariff before. The United States tariff item describes the commodity a little more elaborately than does our item, but in the interpretation the Canadian customs officials would interpret it in exactly the same way as do United States customs officials.


John Ritchie MacNicol: Perhaps the minister
knows more about paper than I do, but I do know enough about manufacturing to know that supercalendered paper is not a raw or semi-raw product, but one which requires a considerable application of labour.


William Daum Euler: The item refers to paper that is not supercalendered.


John Ritchie MacNicol: All we obtain is the shipment of new pulpboard or rolls of raw paper that we see piled up round the pulp mills in Canada.


William Daum Euler: This is used only for the manufacture of wallboard, and it is not super-calendered. It is simply a pulpboard to be used for the manufacture of wallboard.


John Ritchie MacNicol: May I point out that it appears special care was taken by the United States negotiators to see that manufactured articles from Canada of these finished lines do not receive the benefits of an item such as this. All that we may ship is the raw wood, once or twice removed from the tree state.


William Daum Euler: May I sum the matter up in this way: Whereas we paid ten per cent to get into their market previously, we now pay only five per cent on exactly the same item.


John Ritchie MacNicol: On the pulpwood item.


William Daum Euler: On this item, as herein described.


John Ritchie MacNicol: On the pulpboard item.


William Daum Euler: We get a reduction from ten per cent to five per cent, and that is all there is to it.
12739-78i


John Ritchie MacNicol: On the item referring to the shipment of raw pulpboard.


William Daum Euler: There is a reduction of 50 per cent, meeting the requirement mentioned so often by hon. members opposite, namely, that we should get the whole amount the President of the United States could have given us. In this item that is what we did get.


John Ritchie MacNicol: The United States took great care that we would not get any more out of this than what is in it, that is shipping under this item raw or semi-raw material.


[Stage Direction]
Item agreed to.
United States tariff-1413.	Pulpwood in
rolls for use in the manufacture of wallboard, surface stained _ or dyed, lined or vat-lined', embossed, or printed, 15 per cent ad valorem.
Mr. STEW  ART@: Do we send any of this pulpboard to the United States?


William Daum Euler: The item is not segregated; I cannot give the figures.


Mr. STEWART:: What is the tariff under the general item?


William Daum Euler: Does the hon. member mean the Hawley-Smoot tariff?


Hugh Alexander Stewart: Yes.


William Daum Euler: Thirty per cent, now reduced to 15 per cent.


Charles Hazlitt Cahan: I notice at page 24, where the comparative schedules are given, the notation "$14.50 ton, but not less than 15 per cent" under the heading "new rate." Under the heading "old rate" we find the rate of 30 per cent ad valorem, so that now the new rate is 15 per cent. Does it refer to both the minimum and the maximum?


William Daum Euler: That is the concession we obtained on account of the favoured nation agreement between the United States and Sweden.


Charles Hazlitt Cahan: So that the rate which was formerly at a minimum of 15 per cent and a maximum of 30 per cent is now really 15 per cent all round, in respect of Canadian exports.


William Daum Euler: That is correct.


Hugh Alexander Stewart: I see a foot-note with the words "Presidential proclamation." What do they mean? There is a reference to $14.50 per ton, with a minimum of 15 per cent and a maximum of 30 per cent, and then there is a foot-note with the words "Presidential proclamation."
Canada-JJ. S. Trade Agreement


William Daum Euler: Frankly I do not know what that means; there may be an error. However, the effective rate against us of 30 per cent now becomes 15 per cent.


Hugh Alexander Stewart: Apparently the President of the United States had power by proclamation to make the rate 814.50 a short ton.


William Daum Euler: Whatever the fact may be, under this agreement the item is bound at 15 per cent and cannot be increased during the lifetime of the agreement.


[Stage Direction]
Item agreed to.
United States tariff-1502. Lacrosse sticks, 15 per cent ad valorem.
George Halsey Perley: Do we ship many lacrosse sticks?


William Daum Euler: I have not the figures. The old rate was 30 per cent and it is now 15 per cent. The figures are not segregated in the trade returns.


[Stage Direction]
Item agreed to.
United States tariff-1502. Ice skates and parts thereof, 15 per cent ad valorem.
Charles Hazlitt Cahan: What is the trade in skates?


William Daum Euler: In 1930 our exports to the United States were 97,953 pairs, valued at 888,206. In 1935 the value stood at 850,887. The rate of 20 per cent now becomes 15 per cent.


John Ritchie MacNicol: Is not the balance of trade on this item in our favour? We ship them much more than we buy from them.


William Daum Euler: I will get the figure.


John Ritchie MacNicol: The item need not stand on my account, because I looked up the figures and found that we imported much less than we exported. We are the best skate makers in the world.


[Stage Direction]
Item agreed to.
United States tariff-1530(b).	Leather
(except leather provided for in sub-paragraph
(d)	of paragraph 1530), made from hides or skins of cattle of the bovine species:
(3)	Leather to be used in the manufacture of harness or saddlery, 10 per cent ad' valorem.
(4)	Patent leather, rough, partly finished, or finished, or cut or wholly or partly manufactured into uppers, vamps, or any forms or shapes suitable for conversion into boots, shoes, or footwear, 10 per cent ad valorem.
George Halsey Perley: Would the minister give the figures as to exports and imports under this item?


William Daum Euler: Exports to the United States for 1930 amounted to 8685,000, and in 1935 to

857; exports practically disappeared. Under the agreement the tariff is reduced from 12^ to 10 per cent. I regret that I cannot give the imports because, I am informed, there is no comparable item.


Hugh Alexander Stewart: What are the duties under the Underwood and Hawley-Smoot tariffs? The minister has not given in every instance the rate of duty which the hon. member for Argenteuil (Sir George Perley) suggested might be given in connection with these different items.


William Daum Euler: I am very glad to give it. Under the Fordney-McCumber tariff leather was free, and I know from my own knowledge that there were very large exports of harness leather to the United States. Under the Hawley-Smoot tariff the duty was 12 j per cent, and it is now reduced to 10 per cent. Patent leather under the Fordney-McCumber tariff was free, and under the Hawley-Smoot tariff, 15 per cent, and under this agreement it is reduced to 10 per cent. Exports from Canada to the United States for 1935-I have not the figures for 1930-amounted to $18,754, and imports from the United States in 1935 amounted to 83,300, not very serious.


George Halsey Perley: This is a special item as regards which we are worse off than under the Fordney-McCumber tariff.


William Daum Euler: There is now a duty of 10 per cent on hides going into the United States. They are free entering Canada.


George Halsey Perley: They make us pay a duty on hides entering the United States, although we allow theirs to be sent in here free. That was the item we discussed yesterday, and such rates cannot be called reciprocity in any sense.


William Daum Euler: Hides may come in here via the United States, but they are not United States production.


Mr. EDWARDS:: Oh, yes, the Chicago market is a big source of hides.


Mr. ROWE (Dufferin):: On the more
finished products of leather the duties range from 25 to 50 per cent, which is again in keeping with the tendency of this agreement throughout. The tendency is to let our raw products enter the United States free or under a slight tariff, and as the product becomes more and more finished the tariff increases higher and higher.


William Daum Euler: I would suggest to my hon. friend that patent leather is about as finished an article as you can get, and the rate has been

Ctmada-U. S. Trade Agreement
very substantially reduced, from 15 to 10 per cent. That is an accomplished fact under the agreement.


Percy John Rowe: That may be true, but I would remind the minister that the United States duties on finished articles such as ladies' leather hand bags, gentlemen's club bags, and so forth, range from 40 to 50 per cent, and they have not been reduced one iota by this agreement. That is the tendency that prevails throughout this whole agreement, namely, for the United States to take our raw products free or at reduced rate, to have them worked up by American labour, and then shipped into this country in the form of finished articles, incorporating American labour and giving business to American people instead of to Canadian.


William Daum Euler: It is doubtful whether some of the articles mentioned by my hon. friend could be shipped into the United States from Canada if there were no tariff at all. These goods probably enter the United States from European countries or Japan, and they enter the United States now over a high tariff wall.


Percy John Rowe: But we shall never be in a position to export them to the United States so long as we encourage mass production in that country and leave our smaller producers under the disadvantages that prevail throughout this whole agreement.


Mr. ROSS (Moose Jaw):: Is the hon. member objecting to selling things in the United States or anywhere else?


Percy John Rowe: Certainly not, but I object to the United States incorporating 65 per cent of American labour into the raw products which we ship over there and then sending them back as finished products over here, but that is the tendency of this treaty from beginning to end. In only a very few cases do we get the 50 per cent reduction which the president could have given us, but in very many cases we give a reduction of more than 50 per cent, and make some items free altogether, and then this government wants the Canadian people to think that they are getting great advantages by shipping our raw products to the United States, while actually this agreement is closing our factories by giving an increased advantage to the United States on the finished product.


William Lyon Mackenzie King: Let me just follow what my hon. friend has said. First of all he says that we send our raw' products to the United States. He admits that there is a duty on these products going into the United States. He will admit that any of the
products which we are here discussing which go into the United States under this agreement will still pay a duty, because the president had authority to reduce the existing duty by only 50 per cent. He says that after our raw products have gone into the United States, paid the duty, and the Americans have manufactured them into finished articles they have then shipped them back into Canada. But the manufactured articles on coming back here would have to be subject to the intolerably high tariffs which hon. gentlemen opposite have imposed in the last few years. He then says that after the finished articles from the United States have met the high Canadian tariff, they undersell the products of our Canadian manufactures. Well, there could not be a stronger argument for the necessity of some tariff changes which will serve to bring about competition with what in the circumstances must be combines in this country which are holding up prices to an exorbitant figure against the consumer.


Percy John Rowe: Mr. Chairman, I have every respect for the Prime Minister's splendid arguments but I certainly have not much regard for the type of argument that puts words into my mouth that I did not use. While the Prime Minister rarely gets absolutely crossways he certainly in this case has put absolutely the opposite construction on my argument to what it bears. The duties I was complaining against were the United States duties on our similar finished products entering that countiy. Certainly we have no high tariffs on the highly processed commodities entering Canada under this item, or under any other item in this agreement. Look down the list and you will find the same thing all through. I mentioned finished articles such as ladies' purses and gentlemen's club bags on which the United States charges us a duty of 50 per cent, or half the value, when we attempt to send these goods into that country, but we can send our hides and our cattle over there free or at a very small rate of duty, and they will take those hides and put American labour to work on them. They will take our partly finished leather, it is true, and this item reduces the duty from 12 to 10 per cent. They will take our semifinished products at a 10 per cent rate, but when the article is finished by Canadian labour they charge us 50 per cent under this agreement. What we are saying to the United States in this agreement is this: We appreciate very much your taking our raw hides and our calf skins and so forth at a reduced tariff duty so that you may finish them by American labour, and then we will let you send them
Canada-U. S. Trade Agreement

back to Canada at a reduction of about 50 per cent in the duty, while our similar finished goods get no reduced rate at all going into the United States. Surely the Prime Minister would not argue that that was any advantage to Canadian labour. May I remind him again, and emphasize that this agreement is favouring American labour and American factories all down the line.
As a farmer I admit that it is in some instances some slight help to us when there is a temporary market in the United States, and when they are not destroying their cattle we can get a slight advantage, although it has always been a question just what that advantage amounts to. But so far as Canadian labour is concerned, in my province of Ontario and your province of Quebec, Mr. Chairman (Sir Eugene Fiset), thousands and thousands of men are idle to-day, and I warn the government again that the whole principle of this agreement is prejudicing the chances of Canadian workmen getting or keeping a job. In 1930, when our workmen lost their jobs through the tariff tinkering of the government that was in office before 1930, about 495,000 of them found employment in the United States, but now their employment there has ended and they are coming back to Canada, where thousands of Canadian boys have already lost their jobs since this agreement came into effect, and unlike the years before 1930 they cannot now find jobs in the United States, so the situation is entirely different. This government has hurt their chances of finding employment in Canada, and world conditions have contributed to eliminating their chances of finding work in foreign factories, a chance which was open to them when this government was in power before. The whole tendency of the agreement is to send our raw materials to the United States to be finished. This employs American labour; it takes a certain number from the relief camps of the United States, but it adds to the number in the relief camps in Canada.


William Lyon Mackenzie King: My hon. friend has jumped away from his first statement, as he will see when he compares what he has just said with what appears earlier in Hansard. He previously referred to sending our materials to the United States, having them manufactured by American labour and then to the finished article being sent back into Canada. That wras what he said to begin with.


Percy John Rowe: Yes.


William Lyon Mackenzie King: He says, "yes." May I point out to him just what his argument means? When the finished articles
.
come back into Canada, articles which have been manufactured with American labour, they have to pay a very considerable duty to enter this country.


Percy John Rowe: About half as
much as they have to pay to enter the United States.


William Lyon Mackenzie King: The duty is
very considerable on some things. When our raw material enters the United States it must pay a duty. When the finished article, manufactured from this raw material, enters Canada, it must pay another duty. What my hta. friend says is that notwithstanding present conditions in Canada, the manufacturers of these articles in Canada should be given such a monopoly as to permit them to charge the consumer a price equal to what-


Percy John Rowe: I did not say that.


William Lyon Mackenzie King: That is the result of my hon. friend's argument; that is the logic of his remarks. He means that the Canadian manufacturers of these articles are to be so protected and so favoured that they can charge the consumer a price which will prevent the American, who has to pay a duty on his raw material as well as being subjected to a duty on his finished product, from competing with the Canadian manufacturer in the same line of manufacture. My hon. friend says that the whole purpose of this agreement is the sending of commodities one way only. May I say to him that the purpose of this agreement is to promote trade. My hon. friend is ready to promote only one kind of trade. He does not take the view that trade will not exist unless it is beneficial to both parties. Those who sell raw materials to the United States are selling them because it pays them to do so. Those who buy finished articles from the United States do so because they are getting what they want for their money. They are getting more than they would get if they were compelled to buy in a restricted market here. Trade is an exchange of commodities but my hon. friend treats it all as economic warfare. If trade is a mutually beneficial exchange of commodities, the more of it we have the better it will be for all on both sides of the line.


Percy John Rowe: I am delighted
to find out that the Prime Minister and I stand on common ground in connection with at least one thing. I have always had great admiration for the genial attitude of my right hon. friend, much more than I have had for his political soundness. I want to make it clear to the committee, and par-

Canada-U. S. Trade Agreement
ticularly to the Prime Minister, that we stand on absolutely common ground so far as reciprocal trade, or trade that will be of mutual advantage to both countries, is concerned.


William Lyon Mackenzie King: Common
trade.


Percy John Rowe: Common trade,
trade that will be of reciprocal advantage. That was what I was endeavouring to point out all the way through. This agreement permits our fruits to enter the United States at a reduced rate of duty, but their canned goods coming into Canada do not receive the slightest reduction.


Charles Avery Dunning: The hon. member is
mixing things.


Percy John Rowe: We do not receive the slightest reduction going into the United States. I see the Minister of Finance (Mr. Dunning) is smiling but he must appreciate the facts. Encouragement should be given to increasing employment in the canning plants at Collingwood, St. Thomas, Leamington, Picton and other places in Ontario and Quebec. I speak as one who produces raw products along with the other hon. members of this committee who are farmers. It is essential that the men and women emnloyed in our factories should be kept in their employment so that they can buy our products in the towns and villages.


The CHAIRMAN (Sir Eugene Fiset):: I would point out to the hon. gentleman that the item under discussion concerns leather. I think both sides have wandered far afield.


Percy John Rowe: While both the
Prime Minister and I have probably deviated slightly from the item, I hope it will not be considered that we are both leather heads. I should like to ask the Prime Minister in all good faith if we are to continue to be suppliers of raw materials to the United States when they refuse to let in our club bags, our ladies' purses and other finished articles which have been made by the skilled labour of this country. Such manufacturing gives employment to thousands, and probably it could give employment to thousands more. We have received no advantage in connection with these highly processed articles. I submit that in connection with our leather products we should have received the full reduction of 50 per cent. All that has been received is a reduction from 12j per cent to 10 per cent. It would be unfair of me to blame the Prime Minister for not obtaining any free items-


Charles Avery Dunning: The President of the
United States had not that power.


Percy John Rowe: As the Minister
of Finance says, the President of the United States could not grant free entry. But the Prime Minister should have obtained a greater reduction than a reduction from 12^ per cent to 10 per cent. The full reduction would have been a sporting gesture on the part of the American republic in negotiating such a trade treaty. With such a reduction, this item would have been brought down to 61 per cent. I am merely pointing out that where they take our raw materials to finish them in American factories, we do not get even the 50 per cent reduction.


William Daum Euler: I would remind the hon.
gentleman that this item does not refer to raw materials; it is a finished product. The hon. member referred to the desirability of continuing reciprocity. He said that the Americans take our fruit and then send in their canned goods. As a matter of fact they send in practically no canned goods.


Percy John Rowe: You have reduced the duty so they can send them in.


William Daum Euler: That was incidental to
granting the intermediate tariff. As a matter of fact we import fruits from the United States and can them in this country.


Mr. McLEAN (Melfort):: He does not
want you to do that.


William Daum Euler: I do not want to delay the
committee, but I submit that in quite a number of instances we got the limit of the reduction that could be granted, namely, 50 per cent. We got the full 50 per cent reduction on 27 items with a value in 1934 of
823,400,000.	We got a reduction of from 40 to 49 per cent, which is pretty close to 50 per cent,, on 11 items. We got a reduction of from 30 to 39 per cent on 11 other items. In only one case is the reduction less than 20 per cent. On 21 items we are assured of entirely free entry, which can be called 100 per cent.


Percy John Rowe: But these were free.


William Daum Euler: Yes, but they are fixed.


Percy John Rowe: The minister should be fair; they were free before.


William Daum Euler: But the important point is that they are bound; they cannot be changed now for the life of the agreement, and under the free items now bound the amount is $111,000,000.
Canada-U. S. Trade Agreement


Mr. TUCKER:: The members of the Conservative party take one position one minute and another position the next. They complained bitterly that we were not getting a low enough tariff on goods we shipped into the United States, and now the hon. gentleman who has been speaking for the Conservatives-


Mr. BAKER:: Is the hon. gentleman discussing leather?


Walter Adam Tucker: They take the attitude now that this item is too low and-


Eugène Fiset: I must call the hon. member to order; he is not discussing the item under consideration.


Walter Adam Tucker: I have not taken up any of the time of the committee discussing this agreement and I should like now to make this remark. We know that proportionately to value there is more labour going into the production of primary products in these days of machinery than there is going into highly finished products turned out in the factories. Do my hon. friends object to more labour being employed in the primary industries of the country? That seems to be their attitude. They argue that because we are producing material for the United States market, in connection with our primary industries, Canadians are being made hewers of wood and drawers of water. I say that if this agreement will enable thousands upon thousands of people in Canada to make their living in the primary industries, which they would not do before, it matters not whether you call them hewers of wood or drawers of water. If it means more employment for Canadians let us hew more wood and ship it to the United States.


Mr. ROBICHAUD:: Hon. gentlemen object that we have accorded a greater reduction in duties than the United States has done. It seems to me that their argument proves that we are wiser and know better than the Americans do what is good for us.


William Daum Euler: The outstanding fact with regard to this item is that five or six years ago we exported to the United States patent leather to the value of over $1,000,000, which dropped in 1934 to a bare $32,000, and it is hoped and reasonably expected that with the reduction from 15 to 10 per cent some of that business can be recovered by the Canadian manufacturer.


Hugh Alexander Stewart: Will the minister tell us in what year that comparatively large export was made?


William Daum Euler: In 1929.


Hugh Alexander Stewart: Was that before the Hawley-Smoot tariff?


William Daum Euler: Yes.


Hugh Alexander Stewart: Certainly it was; and what did we send in 1931 after the Hawley-Smoot tariff went into effect? The Minister of Trade and Commerce unintentionally made a statement that ought to be cleared up.


William Daum Euler: What year does the hon. gentleman want?


Hugh Alexander Stewart: The year 1931, after the Hawley-Smoot tariff came in.


William Daum Euler: The point is, we have a reduction now from 15 to 10 per cent.


Hugh Alexander Stewart: Never mind the reduction; stick to the point.


William Daum Euler: But that is the important thing; it was 15 per cent before and is now 10 per cent. I cannot find the figures at the moment but I will get them later.


Hugh Alexander Stewart: I suggest that if the
minister, in quoting the exports to the United States, would use the year 1931, which was after the Hawley-Smoot tariff came in, instead of 1929, it would avoid the necessity of asking in every instance what the exports were after that tariff was imposed.


William Daum Euler: I gave the figure for 1934,
$32,000. That was under the Hawley-Smoot tariff.


Hugh Alexander Stewart: But what we want is
1931.


William Daum Euler: I am sorry, but I am told
that the figures are not separately recorded.


Hugh Alexander Stewart: How is it that they were recorded separately for 1930 and not for 1931?


Percy John Rowe: Surely the minister can give the information.


Eugène Fiset: Shall the item stand?


Some hon. MEMBERS:: No.


Hugh Alexander Stewart: We want the figures.


William Daum Euler: I have the imports into the
United States from Canada.


Hugh Alexander Stewart: That's it.


William Daum Euler: They are United States
figures; I gave the figures for 1929 and 1934.


Hugh Alexander Stewart: But we want the figures for 1931.

Camda-U. S. Trade Agreement


William Daum Euler: I should be glad to give them if I had them.


Mr. MARSHALL:: According to the Canada Year Book, 1931, at page 570, the total leather unmanufactured amounted to $1,062,592, and the total leather manufactured, $1,125,073.


William Daum Euler: But that is not patent leather alone; it includes many others.


George Halsey Perley: We ought not
to hold up the item because we have not been given those figures, but-


William Daum Euler: I might give the figure for
1932-$45,513.


Percy John Rowe: So that the Hawley-Smoot tariff reduced it from over $1,000,000 to $45,000.


William Daum Euler: Yes; but now we are getting a concession on the Hawley-Smoot tariff from 15 to 10 per cent. We are obtaining something. Surely my hon. friends are not protesting against the reduction.


George Halsey Perley: The minister
claims credit for getting the -rate reduced from 15 to 10 per cent. Under the previous Fordney-McCumber tariff this was free, and as a matter of fact what happened was that the Hawley-Smoot tariff put an end to this trade.


William Daum Euler: I do not desire to prolong
the argument, but at that time under the Fordney-McCumber tariff hides went into the United States free and now they pay 10 per cent; whereas hides come into Canada free, which establishes equality in that regard.


[Stage Direction]
Item agreed to.
United States tariff-1541(a). Pipe organs or .pipe organ player actions and parts thereof especially designed and constructed for installation and use in a particular church, or in a particular public auditorium at which it is not customary to charge an admission fee, which are imported for that specific use, and which are so installed and used within one year from the date of importation, 25 per cent ad valorem.
William Daum Euler: This is a reduction from
60 per cent ad valorem and, since July 24, 1931, 35 per cent ad valorem to 25 per cent. The exports from Canada to the United States in 1930 were seventeen, and in 1935, seven.


Percy John Rowe: This item should
carry, if we get the advantage on seventeen pipe organs.


William Daum Euler: But the value is $174,000.


Hugh Alexander Stewart: Again, this question arises -40 per cent or 35 per cent, and the reference
to the foot of the page with regard to the presidential proclamation. Does that mean the president had power to reduce from 40 to 25?


Charles Hazlitt Cahan: He did at a certain time make reductions by proclamation.


William Daum Euler: He did reduce on surcharges


[Stage Direction]
Item agreed to.
United States tariff-1604.	Agricultural
implements: ploughs, tooth or disc harrows, headers, harvesters, reapers, combination harvesting and threshing machines, agricultural drills and .planters, mowers, horse-rakes, and cultivators, whether in whole or in parts, including repair parts, free.
Eugène Fiset: Is the item carried?


John Ritchie MacNicol: No; it is not carried as rapidly as that. The mere fact that there is no change in the duty does not warrant my letting it go through as quickly as that. I am well posted on the lines of material that enter into the manufacture of agricultural implements. Some of these lines were enumerated by the hon. minister the other night when he was regaling the house with a long list of reductions on steel items that we might be able to export, but which we do not, in any quantities.
In connection with this item, I always enjoy the way the Prime Minister says that the agreement is beneficial to both parties. Perhaps it is to a certain percentage. But as regards this particular item, in 1931 we imported from the United States $15,000,000 of agricultural implements and we exported to them $2,000,000 dollars worth, according to the figures in the Canada Year Book. That being the case, we imported seven times as much from the United States as we exported.


William Lyon Mackenzie King: May I ask my hon. friend this question? Does he think these agricultural implements would have been imported if they had not given some useful service to a great body of Canadian producers? My hon. friend seems to think that every time we import anything for our own use, because we want it, yet do not intend to pay an enormous price for it, it is a calamity.


John Ritchie MacNicol: No; it is no calamity in a way, unless it bears, as it does in that ratio -seven times as much imports of agricultural implements as exports-the same relationship to the employment of labour, to workers in Chatham, London, Stratford, St. Mary's, Brantford, Hamilton, Woodstock, Toronto, Lindsay, Peterborough and other agricultural implement towns.
Canada-U. S. Trade Agreement


William Lyon Mackenzie King: No; where my hon. friend and most of those who agree with him, like the hon. member for Dufferin-Simcoe (Mr. Rowe), are in error in speaking as they do, is in assuming that you get no advantage with regard to any trade unless you exchange exactly the same class of articles back and forth.


Charles Hazlitt Cahan: Oh, no.


William Lyon Mackenzie King: It is a brick for brick arrangement.


Hugh Alexander Stewart: Nobody suggests that.


William Lyon Mackenzie King: Another error even more fatal is that international trade must balance on every front, whereas we know that international trade does not balance on
each front, but on many fronts.


Charles Hazlitt Cahan: It must balance sufficiently to preserve the financial integrity of this country.


William Lyon Mackenzie King: My hon. friend the member for St. Lawrence and St. George (Mr. Cahan) has been in the van of that argument all along, but with due respect to his experience and his years I think he is wrong in the viewpoint he takes. International trade does not need to be balanced on every front.


Charles Hazlitt Cahan: I am not speaking of balancing on every front, but you cannot allow an excess importation from any front that will bankrupt trade on all other fronts.


William Lyon Mackenzie King: Goods will not come from any front into this country unless they are serving someone's use and benefit. If our farmers can purchase their agricultural implements abroad more cheaply than they otherwise could, instead of purchasing them from some monopolistic group, they will be able to sell their products more advantageously in the markets of the world and thus secure more purchasing power in the home market with consequent benefit to Canadian manufacturers.


William Daum Euler: I may be able to give a little comfort to those on the other side who are alarmed with regard to the balance on the sale and purchase of agricultural implements, because as a matter of fact the balance of increase is in our favour. In the month of January, 1936, exports of farm implements to the United States were $192,000 greater than in the same month of the previous year, and here is the point. Imports of farm implements into Canada from the United States were greater by $145,000 in January, 1936,

than in the same month of the previous year. So that there was a net gain to the Canadian implement industry in January, 1936, over January, 1935, of $47,000; and in February exports also increased; last year $73,000 worth and this year, February, $209,000 worth. So that there is nothing to be particularly alarmed about.


Mr. DONNELLY:: I do not think that the hon. member for Davenport (Mr. MacNicol) is alarmed about the duty. I think what be and his associates are thinking of is that this is not a real reciprocity; that the agreements are "using us too good"; that the United States are letting our implements in free and we should let their agricultural implements in free also in order to make a real reciprocity. I think they are kicking about the duty they have on their agricultural implements, and the only way to satisfy them is to take the duty off agricultural implements coming into Canada and make it real reciprocity.


Hugh Alexander Stewart: I think the hon. member who has just spoken is really advocating a higher price for agricultural implements. What happened when the duty was taken off?


John Gordon Ross: The price of agricultural implements in this country dropped while the Liberal party was in power, regardless of what my hon. friends say. The price of agricultural implements rose from 1911 until 1920.


Percy John Rowe: What about 1921 to 1930?


John Gordon Ross: Then, after the Liberal party came into power, the price of agricultural implements dropped from the price they were in 1921. The only thing that happened to agricultural implements while my hon. friends were in power from 1930 to 1935 was that they stayed at the same price to which they had been lowered from 1921 to 1930. Look it up and you will find that I am correct.


Percy John Rowe: I do not wish to
hold up this item; I do not oppose the item "Free," and I quite appreciate that we get our manufactured goods into the United States free. But on the point that the hon. member for Moose Jaw (Mr. Ross) has mentioned, I regret to have to say that I believe he is absolutely incorrect. I have made a careful study of the prices of farm implements on three or four occasions; I have placed it on Hansard in this parliament, and I stand by the records of Hansard. I stand by what I

Canada-U. S. Trade Agreement
said because I studied it carefully, checked and double-checked it. It is true, as the hon. member for Moose Jaw says, that prices went up between 1911 and 1921, but everyone in this house will agree that it is unfair to charge the Conservative party with what was a world war condition. The price of western wheat went up to about S3 a bushel before it was controlled. It is absolutely unfair therefore to say that the increase in prices during those years was due to the Conservative party. Prices of farm implements, like prices of everything else, went up from 1911 to 1921, but may I point out that in 1911 we were producing in Canada-and I wish the Prime Minister would listen to this as well-seventy per cent of our total consumption of farm implements and we were providing the world with enormous quantities of agricultural implements as well. We had in 1911 a flourishing agricultural implement industry. I know that every member will realize that after 1921, when the present government were in power before, when the duty was lowered, the price of farm implements did not go down; it went up. I wish to say to the hon. member for Wood Mountain (Mr. Donnelly)-


An hon. MEMBER:: Look it up.


Percy John Rowe: I have looked it
up on scores of occasions; I advise you to look it up. I know that neither the hon. member for Moose Jaw nor the hon. member for Wood Mountain wishes to misrepresent facts. I have looked them up before, and I go on record again to say that every agricultural implement from a root scuffler to an 8-foot binder increased in price after the duty was lowered by the Liberal government which was in power between 1921 and 1930. I repeat, Mr. Chairman, that after 1930, prices were reduced. I do not say that was because the tariff was increased, but I am giving the facts; after 1930, when the present leader of the opposition raised the tariff, prices of farm implements were reduced, and those reduced prices remained in force until the beginning of this winter. I think the Prime Minister was absolutely unfair to-day to the manufacturers of this country when he said that we farmers were paying the price of monopolistic control of the farm implement industry. I think it was unfair for the Prime Minister, as our first citizen, to charge the agricultural industry with being under monopolistic control. A committee is going to investigate this matter very thoroughly, under a motion introduced by a follower of the right hon. gentleman.


William Lyon Mackenzie King: I was not making any specific charges against any industry; I was taking my hon. friend's arguments and following them to their logical conclusion.


Percy John Rowe: Then in his logical conclusion my right hon. friend asked if the farmers of this country wished to buy from the monopolistic controllers of the farm implement industry of this country.


Some hon. MEMBERS:: No.


Percy John Rowe: If you look at Hansard to-morrow you will see that this was exactly what the right hon. gentleman said;
I will leave it to any hon. member of the house.


John Gordon Ross: We were on another item at the time.


Percy John Rowe: No, we were not.


John Gordon Ross: We were at the time the Prime Minister made the statement.


Percy John Rowe: No, the right hon. gentleman was answering the hon. member for Davenport (Mr. MacNicol) and he asked if as farmers we still wished to pay for the monopolistic control of farm implements. I say that to-day we are producing only a portion of our consumption of farm implements. Our exports are not as great, but I think we are producing only about thirty-five per cent of our consumption instead of about seventy per cent, which was the case before the tariffs were lowered.


Charles Avery Dunning: May I suggest to my hon. friend that the points to which is is referring now, particularly the facts, will be developed before a committee of this house. Then the hon. gentleman will be relieved of the necessity of saying "I think" so and so, because the actual facts can be made a matter of record,
A rather important aspect of this matter was touched upon by the hon. member for Davenport, who is always concerned, much to his credit, with the effect of what we are doing upon the fortunes of workingmen and upon the volume of industry in this country. I think if he studies the agricultural implement industry he will find that during the period when the maximum importations into Canada took place our own implement industry was busier than at any other period; in fact our greatest exports of these commodities coincide, curiously enough, with very large imports and with maximum production at home. There are reasons for all these things which do not necessarily relate to tariffs, and neither is it true that putting up or putting down the tariff on agricultural implements by a few points necessarily puts workmen out of
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work or into work. Obviously if it were possible to put men to work by increasing the tariff on agricultural implements the record of the employment during the past five years should not have been what it was, because everyone knows that there has been a steady and continuous decline in employment in the agricultural implement industry under the high tariffs imposed by my hon. friends opposite in 1931.


Mr. SPENCE:: Due to the depression.


Charles Avery Dunning: It is only now that we are seeing a slight improvement in the agricultural implement industry and in the volume of work available to Canadian workingmen. I think we should not make the mistake of assuming that changing the tariff by a few points materially affects employment. Certainly the large tariff increases brought about by my hon. friends opposite when they were in office did not increase Canadian employment in that industry.


John Ritchie MacNicol: I have been interrupted quite a number of times from both sides of the house, though I was not nearly finished. However, I am not now going to detain the committee more than a moment or two. I should like to say a word to the Minister of Finance. I know he wants to be fair, and I know he has had a good deal of business experience, but from what he said I inferred that he believed the substantial duties on agricultural implements brought in by the late government were responsible for the decreased production in this country.


Charles Avery Dunning: No, no.


John Ritchie MacNicol: That was the impression I obtained.


Charles Avery Dunning: If my hon. friend will permit me, I said the duties imposed by my hon. friends opposite certainly did not increase Canadian employment in that industry.


John Ritchie MacNicol: I will say this, that the duties imposed by the late government did increase employment in the agricultural implement industry as compared with what would have been the case if the duties had not been increased.


Mr. MITCHELL:: How do you know that?


John Ritchie MacNicol: I know that from my business experience. That is a fact, and I know the minister is big enough to admit that but it would not be good politics for him to do so. Now I should like to say just a word further. Did I understand the minister to say that Canada is now exporting to 
the United States more agricultural implements than she is buying from the United States?


William Daum Euler: No, I said the exports were increasing more rapidly than the imports.


John Ritchie MacNicol: I am very glad to hear that, but I had the impression that the minister said we were selling more to the United States than we were buying from them. I noticed that in 1934-35, the last year for which I have the figures, we exported to the United States $300,000 worth of implements and imported from that country
82,000,000 worth. Then just one more word in reference to what the Prime Minister said in regard to a brick for a brick. In this case it is not a brick for a brick; it is seven bricks against the Canadian worker to one brick against the United States worker.


Archibald Hugh Mitchell: How do you know?


John Ritchie MacNicol: In 1931 we imported
from the United States $15,000,000 worth of agricultural implements while we shipped them $2,000,000 worth. That is seven to one, is it not?


Charles Avery Dunning: But the tariff is the reverse of that. Our implements are free going into the United States and there is a duty against them coming into this country.


John Ritchie MacNicol: That is a small concession.


William Lyon Mackenzie King: May I ask my hon. friend what would be the corresponding brick in Canada for pineapples coming into this country from the United States?


John Ritchie MacNicol: I cannot answer the Prime Minister because the chairman is keeping me right down to the item under consideration. I was ruled out of order yesterday when I tried to read a few editorials in this connection. However, that concludes all I wish to say, except that I want to point out that in connection with these products we are buying from the United States about seven times as much as we are selling to them.


James Garfield Gardiner: I have been tempted
to make a speech on farm implements ever since these items have been before the house.
I have listened to the remarks coming from the other side of the house to the effect that with a lowering of the tariffs there has been a tendency to increase prices and that with higher tariffs there has been a tendency for prices to go down or to remain at a dead level. It is all very well to quote figures for one year, and to arrive at certain conclusions. However I have before

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me, as no doubt other hon. members have, a statement issued a few days ago by the farm implement producers, which appears in the paper entitled Canadian Farm Implements. These prices are published for the purposes of indicating to the people of Canada that at the present time there is a necessity for a slight increase in the price of farm implements. In giving their prices they have taken a full line of horse-drawn implements for a farm in western Canada about one-half section in size. In the statement they give the prices in Winnipeg in 1914 and 1921, and farther on the prices for 1936.
It will be remembered there was a change of government in 1011, brought about on a tariff issue. Hon. members will know that from 1914, three years after the election took place, to December, 1921, a government which believed in comparatively high tariffs on farm implements held office, and that at that time the duty on many implements stood at 17i per cent, on others at 15 per cent and on others at 12^ per cent. In the following table comparative prices are given
of farm implements for	the years	1914 and
1921:		
	1914	1921
	Price	Price
7 ft. binder	.$ 155 00	$ 306 005 ft. mower	. 55 00	109 5010 ft. rake	. 33 50	61 0020 M. D.D drill	. 130 00	285 0016/16 disc harrow.. ..	. 50 00	88 006 section drag harrow..	. 28 00	55 0074 ft. stiff T. cultivator	. 63 00	126 00Cream separators, 450 lb.	cap	. 65 00	106 003 h.p. engine	. 125 00	165 0014 inch gang plough.. ..	. 83 00	188 00Manure spreader	. 145 00	263 0034 by 2J farm wagon..	. 106 00	217 002J inch steel shoe sleigh	. 38 00	70 00

Hon. members will note that a set of farm implements cost almost twice as much in 1921 as it did in 1914. I am not going to argue that all the increase in price during that period was due to the tariff.


Percy John Rowe: I would not think so.


James Garfield Gardiner: The fact remains, however, that those increases were made at a time when we had in power a government which believed in comparatively high tariffs, and one which succeeded in maintaining the tariff during that period.


Percy John Rowe: What about the
war?


James Garfield Gardiner: Prices steadily increased.


Percy John Rowe: What about the
war?


James Garfield Gardiner: Yes, there was a war, but it was prior to 1921.


George Halsey Perley: Would the hon. member give comparative figures for wheat?


James Garfield Gardiner: I shall give a lot of
figures before I have finished, and I have not finished yet. May I say that these increased prices obtained three years after the end of the war, and not only during the war period. There was a change of government on December 31, 1921.


Charles Hazlitt Cahan: I call attention to the fact that this is a prolonged address which might well take place when the budget is brought down, but one which is entirely out of place and out of order at this time.


James Garfield Gardiner: I have sat in my place and listened to longer speeches about farm implements made by hon. members opposite within the last few days.


Charles Hazlitt Cahan: Anyway, they were objected to, and in this instance I must certainly call for a decision from the chair. If we are to enter into a general debate other speeches will follow, and we will not complete the discussion on the agreement before many days. I do not think a member of the government should proceed in this manner; his remarks would be in order in the debate on the budget.


Eugène Fiset: We are discussing an item respecting agricultural implements, and I believe the minister is simply answering some questions asked by other hon. members.


Charles Hazlitt Cahan: There is no item concerning imports of agricultural implements under discussion.


Some hon. MEMBERS:: Yes.


James Garfield Gardiner: As a result of the change of government on December 31, 1921, there was a change of government policy respecting farm implements. I have before me a list of prices for the present year. This is the list of prices which has been under review each time we have discussed the question whether or not there have been increases or decreases in prices following changes in the tariff. Before turning to this list of prices I should like to add that in the month of September, 1930, I sat in the gallery at the end of this chamber and listened to a speech delivered by the then Prime Minister, the present leader of the opposition. On that occasion he read to the house a number of letters which he had re-
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ceived from manufacturers in Canada who had given him undertakings to the effect that if he increased the tariff they would not increase their prices beyond the point at which they then stood. In season and out of season we have been told since 1930 that the manufacturers have remained true to their undertaking. If they have, then the prices of farm implements have remained where they were largely because of the undertaking given at that time, and have remained at that point during the period since 1930 when we have had comparatively high tariffs. If hon. members were to check the prices of farm implements for 1936 with those of 1930 they would find that the two were almost exactly the same. From 1930 down to the present time there has not been any material increase in prices, and there has been very little decrease. The present increases would make up for any decrease which did take place in the interval, and the prices are back to about where they were. So that when we take the price list for 1936 we are also dealing with the prices of 1930. Let us make a comparison of prices in lffel with those in 1926 on similar implements.
The first item on the list is the seven foot binder, the price for which in 1921 stood at S306 and in 1936, $256. The price in 1930 of the seven foot binder with the same equipment, at the end of a Liberal period, during which there were comparatively low tariffs, was practically the same. The complete list is as follows:
Comparative Prices of Farm Machines
	1921	1936
	Retail	Retail
	cash	cash
Machine	price	price
	Winnipeg	Winnipeg
	.$ 306 00	$ 256 00 107 50 57 00
	109 50	
10 ft. rake		. 61 00	
20 M. D.D. drill	. 285 00	238 0016/16 disc harrow.. ..	. 88 00	70 006 section drag harrow.. . 7J ft. stiff T. cultivator.	. 55 00	38 25. 126 00	113 00Cream separator, 450 lb.	cap	. 106 00	101 503 h.p. engine	. 165 00	139 5014 inch gang plough.. ..	. 188 00	129 00Manure spreader	. 263 00	168 003i by 2J farm wagon.. .	. 217 00	128 002J inch steel shoe sleigh.	. 70 00	53 00Total	.$2,039 50	$1,598 75It will be noted, Mr.	Chairman	that onevery single item that enters into the list of	implements necessary for	a farmer	operatinga half-section farm there has been a	reduction
in price from 1921 to 1936, and there was a reduction in price from 1921 to 1930. The

total cost of this list of implements in 1936 is $1,598.75 as against $2,039.50 in 1921.
I come back to my point, that this list of prices is practically the same list that prevailed at the end of the Liberal period of office in 1930, and I point out to this committee that under lower tariffs there has been a decrease in prices. It has not been a matter of prices simply staying at the same level; prices did come down under a policy of continually lowering the tariff. Tariffs went down from 17J to 10 per cent, from 15 to 7i per cent, and from 12 down to 6 per cent, on the various lines of implements that are used by half-section farmers in western Canada, and that includes these particular implements I have mentioned.


Percy John Rowe: Did not the Right Hon. Arthur Meighen lower the tariff around or before 1921?


James Garfield Gardiner: He lowered the duties
on some implements.


Percy John Rowe: On farm implements.


James Garfield Gardiner: Prior to 1921 the duty on tractors was lowered, during the war period, but the duties on many of these farm implements I have mentioned were still at the levels I have given. They ranged largely from 124 to 17 per cent, with an occasional item being at 10 per cent during that period. But whatever the range was in 1921, there is no doubt in the mind of any member of this committee that the tariffs on farm implements all the way along the line were reduced, and reduced materially, between 1921 and 1930, and that there was a decrease in the price of implements all the way along the line, practically following every one of the reductions that were made in the tariff.


Percy John Rowe: There certainly
was not.


James Garfield Gardiner: My friend says there
certainly was not. Then I would ask him how the price of a binder got down from $306 to $256, if there -was not a reduction in price? Or how the price of a cultivator got down from $126 to $113 if there was no reduction in the price? Or how the price of a wagon got down from $217 to $128? All the way along the line there were reductions in the prices, and those prices were maintained at that level only because of the undertaking given to the then Prime Minister in 1930 by implement companies that in spite of the great increase that was then made in the tariff they were not going to increase their prices for the time being. So we have that level of prices maintained which was put into effect, not by the

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high tariff policy of the Conservative government, but by the low tariff policy of the Liberal government.
Let me go a little further. They say in this article that if you are not satisfied to run your farm with horse-drawn implements but want a tractor, you would have had to pay for that tractor in 1914, with tariffs as they were then, 82,350, but with the reductions that were made on tractors by Mr. Meighen during the time he was in power the price went down from 52,350 to $2,100, again indicating that even when a Conservative government lowers tariffs the price goes down. But what has happened since then? From 1921 down to 1936 the reduction for the same tractor has been from $2,100 in 1921 to $1,079 in 1936, under the lower tariffs that were put into effect.


Percy John Rowe: For the same type of tractor?


James Garfield Gardiner: It is the same type of tractor right across for the three years, a 15-30 horsepower tractor. A 22-inch thresher cost 81,175 in 1914 and $1,645 in 1921, and costs $1,179 in 1936. So if you want to operate your farm with a tractor and have a thresher it would cost you for this list of implements that I have given, $4,601.50 in 1914, $5,784.50 in 1921, and $3,856.75 in 1936. a reduction of practically $2,000 in the cost of equipping your farm for threshing and putting in and harvesting the crop, a reduction of about $2,000 in equipping your farm with the necessary machinery under low tariff policies as compared with the higher price under the high tariff policies of previous years.
They go on to make a further comparison. The increase in the price of implements from 1914 to 1921 was 89 per cent. The decrease in the price from 1921 to 1936 was 22 per cent. Including a 15-30 horsepower tractor and a 22-inch thresher in the equipment, the increase in price from 1914 to 1921 was 23 per cent. The decrease in price from 1921 to 1936 is 33$ per cent. The decrease in price from 1914 to 1936 is 16 per cent.


Archibald Hugh Mitchell: Does the minister
attribute that difference in price entirely to tariffs? Is not some of it attributable to the cheapness with which tractors can be produced in recent years?


James Garfield Gardiner: I think I said at the beginning of my remarks that I did not attribute all of that increase in price to tariffs, nor do I attribute all of the decrease in the other case to tariffs. But I d'o say this, that apart altogether from the direct influence of the tariff itself on prices, the change in conditions, the increase in prices all along the line, brought about by high tariffs increasing the price of everything along with the particular articles affected, naturally had its effect on the price of farm implements. The point I was going to make in connection with the comparisons I have made, and the fact I want to emphasize, is that tariffs do have an effect upon prices. You will notice that when you leave the tractor out of consideration, on which the duty was lowered in both periods, you get a different result. For example, taking the implements upon which tariffs were maintained high all the way through the period, the cost of the implements almost doubled.
In connection with tractors, there was a reduction in the tariff and there was also a total reduction in prices amounting to $250,000 during that same period. A moment ago my hon. friend tried to create the impression that the main reason for the increases in prices during that period was the war. This should have applied to tractors as well as to other implements, but in spite of the war the price of tractors was reduced while prices of other implements went up. This increase was due to war conditions and the conditions which obtained immediately following the war. Apparently the reduction in the duty on tractors had the effect of overcoming these other conditions and bringing about a reduction in prices. It has been said day after day in this committee that tariffs have no effect upon prices, either to put them up or to bring them down, that the effect has been opposite to that indicated by hon. members on this side, but these contentions are not borne out by the figures presented by the implement industry.


Mr. MACDONALD (Brantford):: I rise
again to speak to this matter, not just because it is of great interest to the constituency which I have the honour to represent, but because I believe it is of grave concern to the whole dominion. It has been said time and time again, both in this chamber and throughout the country, that unemployment is Canada's greatest problem. In discussing all matters I believe we should bear this in mind. The Minister of Finance has stated that from 1921 to 1930 occurred the greatest production of farm implements in Canada, and also the greatest exportation.


Charles Avery Dunning: And imports also.


William Ross Macdonald: And imports also. To what countries were we exporting? We were not exporting to the United States; we were exporting to Europe
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and other foreign countries. To-day conditions have changed entirely. We should not compare conditions as they exist to-day with those that existed in 1921 or 1925. We cannot go back to the old horse and buggy days when transportation was so slow and when a blacksmith was situated on every corner. We cannot all be Rip Van Winkles; we must wake up and realize that because of changed economic conditions we must do business on a different basis. From 1921 to 1930 the markets of Europe and other foreign countries were open to Canada, but to-day those markets are practically all closed. During the period from 1921 to 1930 our implement manufacturers were exporting to France, Germany, Russia, Australia and other countries which I could name, but to-day it is practically impossible to ship any implements to those countries.
The agricultural implement manufacturing industry is very important and one which should be preserved for the workingmen of this country, but in preserving this industry we must not act unfairly to any class of people. The Minister of Agriculture (Mr. Gardiner) has shown that to-day prices of farm implements are no higher than they were in 1925. He referred to the great drop which had occurred since 1921 in the price of tractors, but I would direct his attention to the fact that that drop was due to a change in methods of production. I think the minister stated himself that the drop in prices was not due to the tariff. A change occurred in methods of production of tractors just as it did in methods of production of automobiles. Prior to that time automobiles were manufactured by many small companies; the days of mass production had not arrived. The same applied to the manufacture of tractors. When a change in the methods occurred, prices dropped.
My point is that if unemployment is one of Canada's greatest problems, the agricultural implement industry should be preserved to this country on a fair basis. The other day an hon. member opposite referred to conditions which had existed in this industry from 1930 to 1936 because of high tariffs. I do not think anyone should take any credit for the conditions that existed in this industry during that period. That industry had practically closed up, but now the factories are running. If we can supply implements to the fanners at a fair price we shall be acting fairly to the farmer and to the manufacturer; we shall be acting fairly to the investor and to the great mass of working people who earn their living in these factories.


Mr. GOLDING:: Could the hon. member
give me the exports of agricultural implements from Canada during 1934?
Mr. MACDONALD (Brantford); I have not the figures, but I am sure that by 1934 exports of agricultural implements had reached a very low level indeed. Exports were very low and there cannot be any increase because of the high tariffs which have been put up against Canadian implements.


William Henry Golding: I should like to place
some figures on Hansard. In 1934 the production of farm implements and machinery was valued at $8,817,000; imports were valued at $3,204,000 and exports at $3,351,000. That shows that there must have been some exports. In 1924 the production was valued at $24,770,000 and imports at $6,585,000. I ask hon. members to notice that figure and work out the percentage of imports to production in 1924 and 1934. In 1924 exports were valued at $11,356,000.


William Ross Macdonald: In
1924 there were no tariffs against us.


William Henry Golding: I want the hon. member to figure out the relationship of production to exports and imports during that year. Notwithstanding the tariff barriers raised against implements coming into this country, in 1934 the percentage of imports to production was higher than it was in 1924. So far as I am concerned and so far as the Liberal party is concerned, we were elected on a platform of reduced tariffs.


Mr. WOOD:: I did not expect to enter
into this discussion, but after listening to many of our friends in the opposition I think I ought to say something, speaking as a farmer who represents that excellent constituency of Brant, which circles around the agricultural implement industry of Brantford. Brantford is known as a community that produces agricultural implements, and I have the honour to represent a riding in which there is one of these implement manufacturers. I assure you therefore that I am interested in the general wellbeing of the city of Brantford and in the welfare of the people employed in these industries. After all the prosperity of the labouring man in Brantford is dependent on these industries and the manner in which they are prepared to function and to sell their products to the farmers; but it is also dependent upon the ability of the farmers to buy the products of the factories, and the ability of the farmers to do that is in turn dependent upon their purchasing power. The hon. member for Dufferin-Simcoe (Mr. Rowe) made a remark which suggested to me that

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the discussion of the question of agricultural implements in regard to prices is actually not fair from the standpoint of the general welfare and prosperity of the people employed in these factories. He said he did not wish to question the remarks of some hon. gentlemen because he knew they wanted to be honest. I have not known my hon. friend personally long enough to wish to attempt to defend his integrity-


Percy John Rowe: You do not need
to.


George Ernest Wood: -but I would refer to a
statement made by the hon. gentleman in connection with prices. In 1914 you could buy a binder costing S165 for 170 bushels of wheat; to-day you have to pay 320 bushels of wheat. Now the price of any commodity depends upon the exchange of services. I come from a mixed farming section; the dairy industry enters to a large extent into our labours up there. In 1914 I had to give 555 pounds of butter for that same binder, whereas in 1936 I have to give 1,024 pounds of butter for it. I ask you in all fairness to the farmers, who are the customers of the men engaged in the agricultural implement industries: Is there not a great relationship between the general prosperity of the farmers buying those products and the prices which the farmers themselves receive for the commodities they have to sell? I take the view that the salvation, the road to recovery, is in the reducing of the cost of commodities to the consumer. You increase the purchasing power of every man, woman and child the moment you do that, because every one of us is a consumer. I am prepared to take issue with my colleague, who is absolutely sincere, in this. The salvation of the labouring man in the city of Brantford is in his ability to make more machinery to sell to the customers of the manufacturers, that is to say, the farmers, whose purchasing power must be increased if they are to buy more implements and thereby keep more men employed in the factories. We 'have to save the implement manufacturers from themselves.


Mr. HOWARD:: Leave out the word
implement.


George Ernest Wood: I would gladly do that and
just say manufacturers. There is an implement manufacturing concern in my constituency, the Cockshutt Plow Company. I am very proud of that concern and it has made a splendid contribution to the progress of the community, so that I do not want to see anything happen to those works. There are many labouring men adjacent to Brantford who want work in the Cockshutt factory, and 12739-79
I feel that the solution of their problems lies in their ability to produce more implements so that more employment can be afforded these men. But I cannot see any other way of accomplishing this than to bring about a condition of affairs in which there will be a lower cost of production resulting in increased purchasing power to the farmers and other consumers so that there will be a greater distribution of the human satisfaction of life in various commodities.
We have heard a great deal about the home market. The national policy was supposed to be instituted for the benefit of the home market, in the interests of the farmers. I am prepared to hand it back to the protectionists. I say that the home market for our industrial centres lies in the ability of the farmers to purchase the commodities they need and in an increase in the purchasing power of consumers at large, so that the farmers may have an opportunity to buy more of the things which are enjoyed in the privileged cities.


Ernest Edward Perley: I did not intend saying anything on this implement item, because there is a committee, to which reference has been made, to which we might have looked for the figures. Possibly that would have been more or less the proper place in which to obtain a good many of the figures that have been put on the record this afternoon. I do not think there is any member who has purchased more agricultural implements than I have in the last twenty-five years. I have sat on most of the machines mentioned by the Minister of Agriculture and I know just how some of them run, how easily they operate. And I know that when you compare the 1914 implement with the implement of 1929 or 1936 you are comparing altogether different things. You cannot make a fair comparison of prices because the later machine is altogether different.


James Garfield Gardiner: How then does the hon. gentleman answer the question asked a few moments ago by one of the members from Alberta, when he implied that the price of a tractor went down as you improved the tractor? Why should other prices go up as you improve other implements?


Ernest Edward Perley: It is a matter of mass production. The Minister of Finance made a statement with which I agree and which I think was very interesting. He said that production was greatest during the years when our imports from the United States were greatest, and that is fair. But there was a reason for that; it was on account

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of the demand. From 1917 to 1930 there was in western Canada a period in which there was a great demand for agricultural implements, following the war, when a greater production scheme was in progress. The farmers had not purchased many implements during the war, and in the subsequent period there was a great demand. Production demanded more implements and certainly there was the demand. That was what created it.
The figures quoted by the Minister of Agriculture are very interesting and no doubt are correct, but I should like to quote prices for two or three years during which hon. gentlemen opposite were in power-1923 and 1924. I have here a list of implements provided by the Dominion Bureau of Statistics, internal trade branch, retail prices of specified agricultural implements, 1913-34. I know there was an increase in the prices of certain implements-I have the lines here-from 1923 to 1924. For instance, walking ploughs, which in 1923 were $33.25, increased to $36.40. The double disc drill increased from $243 to $276. I am going to give the price in 1934, which will give you an indication that there has been a reduction in the price during the last four years. The double disc drill I have just quoted, from $243 in 1923 to $276 in 1924, was $240 in 1934. Hay rakes, $56.50 in 1923, increased to $66 in 1924-just one year. In 1934 the hay rake was $57.50. In 1923 an eight foot binder was $288, and in 1924, $313. I may say that 1924 was the peak year of prices of agricultural implements in Canada.


John Gordon Ross: Just before the tariff was cut on agricultural implements.


Ernest Edward Perley: Just before it was cut? I may say that the tariff was cut considerably in 1921. That was the lowest tariff we had had, I think, on agricultural implements.


An hon. MEMBER:: No.


Ernest Edward Perley: In 1934 that binder was $266. The mower, quoted by the Minister of Agriculture, in 1923 was $99; in 1924, $111; in 1934, $94. The disc harrow in 1923 was $73.50; in 1924, $83.50; in 1934, $72.25. The gang plough in 1923 was $158.75, and in 1924, $170.50; 1934, $138. The wagon, which in 1923 was $187, increased to $195 in the one year, and in 1934 it was $170.75.
Figures can be quoted to make a misrepresentation of the actual facts. The list quoted by the Minister of Agriculture, I think, is not a fair indication. He takes 1914, compares it with 1921, and then 1936; I think 1935 should have been included to show what the price was

last year, and then you will see that there has been an increase this year. I am just as anxious as any member of this house to see cheaper implements. The important thing is how to get them. As I said before, this item is free, and I do not see much purpose in discussing it. The matter is really before the committee that has been set up, and I think that a lot of this discussion is practically out of order.


Percy John Rowe: The difference in the range of prices, in both the west and the east, substantiates the statements that I placed on record on many occasions to the effect that prices rose from 1921 to 1930. The hon. member for Qu'Appelle (Mr. Perley) has shown that they rose in western Canada from 1921 to 1930; they certainly rose in eastern Canada, and despite what any hon. member may wish to place on Hansard there can be no doubt as to the prices at points such as Toronto, Brantford, Montreal and all points east. I might point out also, without delaying the committee too long, that during these years the duty was reduced from 12J per cent to 6J or 6 per cent. Hon. members will also recall that Hon. W. S. Fielding reduced the sales tax on farm implements by, I think it was, 5 per cent. The reduction of the duty on the price of a binder meant, at the 1921 price, about $15, and the reduction of the sales tax meant about $13.30. Together the reduction of the tariff and the reduction of the sales tax represented about $28 reduction on that implement. We were told by the government of that day and its supporters that we farmers could expect a reduction of approximately $28 on the price of a binder. What was the result? I find that on practically every implement the price increased. The price of a 6-foot binder with bundle carrier in 1921 was $235; in 1930 it cost $239, an increase of $4, in spite of the loss suffered by the revenue on sales tax and the lowering of the tariff by 6 per cent. On a six-foot binder the cost in 1921 was $252; the cost in 1930, to the eastern farmer, was $254. For a seven-foot binder the similar figures are $258 and $260; for an eight-foot binder, which cost $266 in 1921, the price in 1930 was $288. That applies to practically every implement item all the way down the line. I am not going to hold up the committee by repeating the entire list. But might I point out what did happen when the tariffs were reduced prior to 1930 as far as importations are concerned. My hon. friend from Brant (Mr. Wood) is not as much concerned or, I think, seriously concerned. In all fairness to him I might recall to him

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what the hon. member for Brantford city (Mr. Macdonald) is fully aware of, knowing as he does what the industry can do for the people in the city as well as in the surrounding county of Brant. In 1925 we imported into Canada about 86,000,000 of agricultural implements. It is all very well to consider the prices from 1921 to 1930, or 1914 and1 1936 if you will-I realize that the Minister of Agriculture regards that as rather a spectacular comparison. But consider the price of automobiles. As the hon. member for Brantford says, consider the improvement in implements. I know, as one who has purchased binders, that a binder produced in 1930 contains practically double the weight of material which was used in the binder of 1914. The minister referred to cream separators; he knows very well that the cream separator of 1914 and the cream separator of 1935 are two entirely different types; the latter has ball-bearings, timken roller fittings and all the improvements that are placed upon a separator nowadays. It is the fact that just as soon as the tariff was lowered, despite the fact that the sales tax on Canadian implements was removed, we started to import in increasing quantities-in 1925,
56.000.	000 worth; in 1926, 813,000,000 worth; in 1927, 818,000,000 worth, and in 1928,
820.000.	000 worth. In the calendar year 1928 -I want the committee to keep this in mind, and I know the hon. member for Brantford is concerned because of this tendency-we imported into Canada $39,000,000 worth of agricultural implements from the United States.


Mr. YOUNG:: It is evidence of prosperity.


Percy John Rowe: Any implement
manufacturers can tell you, and they will tell you at this investigation, despite the fact that some believe they are monopolistic concerns-for they have shown us in black and white-that the manufacture of implements involves about 65 per cent labour. I am not going into a long calculation, but I leave it to the committee to say what 65 per cent of 839,000,000 means to the homes in Brantford city, to the home makers of Brant county, and to producers generally.


Malcolm McLean: I should like to ask how Canadian production was as compared with 1924.


Percy John Rowe: That is a fair question. The production did increase substantially. That is very true.


William Ross Macdonald: For export purposes.


Percy John Rowe: In all fairness I
would point out as well that in 1911, long before the change in the tariff, and in 1914, before the question of war prices entered into the matter-and that is another factor to which we have not given very much credit for what effect it might have had-we were producing in Canada between sixty and seventy per cent of our consumption. The largest companies manufacturing farm implements in Canada produced seventy per cent of our total consumption in 1911. In order to show the tendency down through the years, in the year during which we imported $39,000,000 worth of agricultural implements we produced only about forty-eight per cent of our consumption.


George Ernest Wood: Was that not due to the
fact that the farmers were buying more tractors, which were put on the free list by the particular school of thought to which the hon. gentleman belongs?


Percy John Rowe: That may have
been one factor.


George Ernest Wood: I think tractors made up
about sixty per cent of those imports.


Percy John Rowe: As I have shown,
since 1925, when the tariff was reduced by six per cent, there has been a gradual increase in our exports, which have risen from
86,000,000 to 839,000,000. I realize that there is a difference in policy as between the two great parties. Something has been said of the brick for brick policy, and I have been misconstrued a couple of times by the Prime Minister in reference to my attitude towards that policy. Certainly I do not want a one way traffic, but in these items generally I think we should be careful not to give the-United States two bricks for every one they give us. I do not think this item affects the Canadian producer very much, because we have never been able to export any large amount to the United States, and it is not likely that we shall do so now.


John Gordon Ross: I should like to ask just one question before this item carries. The other night the hon. gentleman was kind enough to want me to move an amendment to the relevant item in the other schedule, and he wanted to know where I stood. I told him that I stood for taking the tariff entirely off agricultural implements. The hon. gentleman has done a good deal of talking in connection with this item. I want to know whether he agrees with the 12) per cent tariff now in effect, whether he stands for free entry of agricultural imple-

Canada-U. S. Trade Agreement
merits and whether his party was right or wrong in imposing a duty of 25 per cent on agricultural implements.


Percy John Rowe: Is the hon. member asking me a question?


John Gordon Ross: Yes; I am asking if the hon. gentleman supports a 25 per cent duty on agricultural implements, a 12J per cent duty as it is under this agreement, or free entry.


Percy John Rowe: I may say to the
hon. member that while he said he thought of moving an amendment-


John Gordon Ross: I said that the
hon. gentleman asked me to do so.


Percy John Rowe: The hon. member for Moose Jaw said that he was in favour of absolutely free entry for farm implements. I know he will not move any amendment in that connection; he will not embarrass his government in that way. I venture to suggest that only a very small percentage of his party would be in favour of wiping out the tariff, and I do not think that percentage would include the Minister of Finance. I am not so much concerned with whether the duty is 12^ per cent or 25 per cent. I only repeat what has been put on Hansard a score of times since 1925, and what I am sure is the opinion of all intelligent farmers of this country, that raising tariffs does not automatically raise prices. I am reminded again to-day of what was said by a former colleague of the minister's, the late genial Mr. Malcolm, when the duty on furniture was being considered; I expect the Minister of Trade and Commerce will whisper to the Minister of Finance, when he is bringing down his budget, "Do you remember what my genial friend Jim said, that when you raise tariffs you cheapen the cost of production at home because you give the producer a greater or wider market for his own product?" That genial gentleman, a former colleague of the minister, went on record very often as believing that when you raise tariffs you give producers bigger markets at home and thereby reduce the cost of production. I am sure the hon. member for Waterloo North remembers that very well, and I know he could say the same thing.


John Gordon Ross: Do not go away from the subject; what do you say?


Percy John Rowe: I am in agreement with the protectionists of the Liberal party, such as the late Mr. Malcolm and the present Minister of Trade and Commerce, who is certainly in favour of a reasonable protective

policy because of the benefits that accrue to thousands and thousands of workmen.


William Daum Euler: I would very much prefer it if the hon. gentleman did not put words into my mouth. I have not said anything like that.


Percy John Rowe: I certainly would not want to put any words into the mouth of my hon. friend, because I know of no protectionist in the house who has been more careful to say nothing with regard to this question. I may tell my hon. friend, however, that I am not so much concerned with whether the rate is 12J per cent, 131 per cent, 241 per cent, or whatever it may be. I believe in a protective policy that will give employment to the workmen of Brantford and so create the best market for the farmers of Brant county. I do not care very much what the protection is as long as it will effect that purpose, without increasing prices to the consumer, and any tariff increases we have had in the past have not raised prices to the consumer. Here we have the spectacle of a member who supports the government presenting a motion for the appointment of a committee to investigate the farm implement industry because prices have gone up since this government has been elected to power.
As a farmer and a purchaser, I am not ashamed to take a stand for the protection of farm implements or anything else that will give employment to Canadians so that they may buy the products of our home producers. I believe there never was a time in the history of this dominion when that policy was more fundamental than it is to-day, when we have thousands standing at the gates of the factories of this dominion looking for work. I say that we shall soon find ourselves on the verge of bankruptcy if we continue to encourage unfavourable trade balances by buying the higher priced, imported, finished article of foreign producers. As a purchaser of farm implements I am satisfied to carry on, having confidence in the manufacturers of Canada, instead of handing over the farmers of thi9 country to the monopolistic control of the manufacturers of any foreign country.


John Gordon Ross: My hon. friend has skated around a good deal of ice, and thin ice at that, in the last few moments. I asked if he were in favour of a 12J per cent duty on farm implements coming into Canada, or of no duty on implements or of a duty of 25 per cent.


Thomas Clement (Tommy) Douglas: Are we discussing implements coming into Canada or implements going into the United States?

Canada-U. S. Trade Agreement


Charles Avery Dunning: This item covers implements going out of Canada.


Mr. DEACHMAN:: Before this item passes I want to mention one point, particularly to my hon. friends immediately to my left. They say that increasing the tariff increases the volume of production of manufactured goods. I want to direct a question to my hon. friends. Supposing by some misfortune the Conservative party had come into power in 1926 and had raised the tariff as sharply as they raised it in 1930. All these other implements would not have come into the country; the great movement of commodities into Canada between 1926 and 1930 would not have occurred. Their claim is that these goods would have been manufactured in Canada, and in that case production would have reached a tremendous peak. But we know that they had no power to stop the crash when they were in power and had full control. We know that the tariff, high as it was, could not stop the decline in business and could not halt the growth of unemployment in Canada. If there had been a protective tariff from 1926 to 1930; if we had made all the implements they say we would have made; if we had raised the bars against imports, what would have happened to this country when the crash came? As high as we had mounted in delight, in our dejection would we have sunk as low. What does the hon. member for Brantford City want? Does he want employment? Well, there are two methods of having it, the Liberal way and the Conservative way. Between 1930 and 1935 we had the Conservative way, and what did we have? We had the Liberal way between 1926 and 1930, and what did we have? I say to the hon. member for Brantford City-


Mr. WALSH:: Is this a debate on the item?


Robert John Deachman: -will he name one year in which we had prosperity when there have been restrictions on imports? Will he name one year in which we have had increased imports without increased prosperity? These observations apply directly to the manufacturing of agricultural implements. Does he wish to shut the door against the prosperity of the farmer, and does he hope that the industrial city of Brantford can rise triumphant on a degraded agriculture? It cannot be done.
The Massey Harris Company were good enough to send me their prices showing the difference between 1913 and 1936. Those prices have gone up 61 per cent. I ask this
question not in a partisan way, but as a business problem: Can the farmers buy implements when prices of agricultural implements have increased by 61 per cent while prices of farm produce have remained exactly where they were? I ask the same question of the hon. member for Dufferin-Simcoe and of every Canadian manufacturer:	Can we
expand the manufacturing industries of Canada while there is a wide hiatus between these two price levels? That is the problem I place before the committee. I appeal to the committee in a non-partisan way, if it is possible for me to do so. I appeal to the hon. member in an open and non-partisan way; possibly he can rise to a higher level than I can in the matter. There is a great gap between prices of manufactured goods and those of farm products. Does the manufacturer wish to maintain that gap? Does he seriously contend that raising prices through raising duties will have the effect of lowering the price to the consumer? If he does, then let him come forward and say so. If he thinks that raising the duty will have the effect of lowering the price, let him tell us why it is that the Canadian Manufacturers Association is out for a high tariff.


Percy John Rowe: Is it?


Robert John Deachman: What is its record?
I offer to the hon. member the challenge which he offered a few days ago. Let the Canadian Manufacturers Association come out and announce to Canada that henceforward its policy is one of an increase in tariffs on raw materials. Let every lobbyist who has come here asking for a reduction in duty upon his raw material come forward and say, "Raise the duty upon my raw material, in order that the price may be brought down."


Percy John Rowe: You know better
than that.


Robert John Deachman: And so do you. That is the challenge.


Percy John Rowe: Would the hon.
member-


Robert John Deachman: I have only a minute more to speak. I ask that the committee consider the problem seriously, not only as it applies to agricultural implements, but as it applies to the spread between the price levels of farm products and manufactured products. Do we wish to maintain that price level, or do we wish to bring about conditions whereby the two would be upon a uniform level, thereby restoring equilibrium in price structure? If lowering the tariff is not the
Questions

answer we must have the answer, because unless we get it agriculture perishes, and with agriculture the manufacturing industries.


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: No.


Thomas Langton Church: I have been a member of
this house for some years, and I must say that the speech made by the hon. member for Huron North is typical of the free trade howls we heard in 1921 in Ontario about agricultural implements.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, March 19, 1936