1936-03-10

ELECTORAL DISTRICT OF SOURIS


Mr. SPEAKER:: I have the honour to inform the house that I have received from the Honourable Mr. Justice Prendergast and the Honourable Mr. Justice Richards, two of the judges selected for the trial of election petitions, pursuant to The Dominion Controverted Elections Act, a report relating to the election for the electoral district of Souris, by which the sitting member was declared duly elected.



BUSINESS OF THE HOUSE


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That on and after Monday the 16th of March next to the end of the session, government notices of motions and government orders shall have precedence on Mondays over all other business except introduction of bills, questions by members and notices of motions for the production of papers.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, while I realize that Canada is not a signatory to the Locarno pact, in view of the critical situation which has developed in Europe, and especially in view of the statement made by Mr. J. H. Thomas, I should like to ask whether Canada, either as a member of the League of Nations or as part of the British empire, is committed either directly or indirectly to any defence policy.

Imperial Defence


William Lyon Mackenzie King: My hon. friend concludes his question with the words, "any defence policy." Does he mean any defence policy with respect to Canada?


James Shaver Woodsworth: Empire defence
policy.


William Lyon Mackenzie King: I rather imagined that some hon. member would ask a question with respect to what appeared in the press this morning as having been the answers made yesterday in the British House of Commons by the Right Honourable Mr. Thomas, Secretary for the Colonies, to certain questions asked of the ministry. Perhaps I had better anticipate possible further questions in connection with that press dispatch by making clear exactly what was said by Mr. Thomas: also what the position is with respect to Canada's attitude on the matters referred to by my hon. friend.
I received this morning from Canada's high commissioner the text of the exact words used by Mr. Thomas in replying to the questions asked him yesterday on dominion cooperation and policy arising out of the white paper on defence. The text is as follows:
The first and most important (question asked) was with regard to position of dominions and colonies. When, at the jubilee celebration last year, the whole of the dominion premiers were in England, the government took the opportunity of consulting them frankly and freely on the situation. They explained to the whole of the dominions the defence position, since which full contents of white paper had been communicated to them, and without a solitary exception every dominion not only acquiesced but felt that this was a policy that ought to be supported.
As far as collective security is concerned, the whole of the dominions are members of the League of Nations. They have given their support to the league. They are parties to every step taken by the government and, in addition, a number of them are taking steps for their own internal defence.
It will be observed that Mr. Thomas' answer deals with two distinct matters, first, with what transpired in London at the time of the jubilee celebration last year, and, second, with reference to Canada's position as a member of the League of Nations in respect of present day questions. With regard to the first let me read again what Mr. Thomas said:
When, at the jubilee celebration last year, the whole of the dominion premiers were in England, the government took the opportunity of consulting them frankly and freely on the situation. They explained to the whole of the dominions the defence position, since which full contents of white paper had been communicated to them, and without a solitary exception every dominion not only acquiesced but felt
that this was a policy that ought to be supported.
There is a reference there to the contents of a white paper having been communicated to the dominions. Let me clear up a possible confusion that may arise in that connection. There has been issued within the last fortnight a white paper dealing with the British government's defence policy, but that is not the white paper to which reference is made here. As far as I am able to gather from the context, the white paper to which reference is made is a white paper that was tabled in the British House of Commons during the month of March of last year, just a year ago. I have a copy of it in my hand. It is entitled "a statement relating to defence"; it was issued in connection with the House of Commons debate in England on March 11, 1935. This white paper was communicated to the Canadian government on March 18, 1935.
In regard to actual or possible commitments of Canada at the conference at the time of the jubilee celebrations, hon. members will recall that when my right hon. friend the present leader of the opposition (Mr. Bennett) returned from England I asked him, I think, on the first day he was in the house after his return, whether any commitments had been made by the Canadian government through him or through other ministers at the time of the celebration, and in reply thereto my right hon. friend made a statement which appears in Hansard of May 20, 1935. The statement is quite explicit and will I think answer any question that may arise with respect to the first part of Mr. Thomas's statement:
Mr. Bennett: I am grateful for having had the opportunity to represent this country at the recent jubilee celebration, about which I shall make some further observations at another time. To the other matters referred to by the right hon. leader of the opposition, in connection with the discussions that took place in Great Britain between the prime ministers of the various overseas dominions and the Prime Minister and ministers of the motherland, I shall also refer later. It is sufficient for my purpose to say to this house this afternoon that the European situation is one of great difficulty, and at times it gives evidence of being very dangerous. But 1 am hopeful that the efforts which have been made during all these years by the government of the United Kingdom to secure, shall I say, a collective security pact and peace _ with disarmament, may prevail. Great Britain has disarmed to the point of insecurity; at this moment she finds herself in a position of very great difficulty. I think that is not too strong a statement to make in view of the knowledge we have all obtained from the press as well as from other sources. At this moment I shall not do more than say that I think it very desirable that I should at once make it clear
Imperial Defence

that so far as this dominion is concerned no commitments were sought with respect to the matters to which reference has been made, nor were any given. I say that because it is desirable that there should be no false conceptions and no misstatements or misunderstandings abroad with respect to matters of such importance to us all.
I might use, Mr. Speaker, exactly the same words with reference to any communications which the present government has had with the British government with respect to defence matters. A summary of the white paper which was recently laid on the table of the House of Commons at Westminster, describing the proposal of the government of the United Kingdom for the strengthening of its defence forces and the reorganization of the committee of imperial defence was communicated to us. The summary reached us at the same time that a full statement appeared in the press of the contents of the white paper. But we were not asked our opinion of the white paper, nor were we asked to give any approval of it or any commitment with regard to it. I shall quote the words of my right hon. friend the leader of the opposition and apply them as my reply to the representations of that part of the statement which might seem to refer to recent correspondence: " I cannot make it too clear that so far as this dominion is concerned no commitments were sought with respect to the matters to which reference has been made, nor were any given."
My hon. friend from Winnipeg North Centre (Mr. Woodsworth), who has just asked the question, addressed to me on the 10th of February last, a question in the following words:
May I ask the Prime Minister what commitments, if any, have been made by Canada with regard to imperial defence?
To which I replied:
I would have to have a conference with my colleague the Minister of National Defence (Mr. Mackenzie) before I could answer my hon. friend. I am not aware of any commitments, myself, at the moment.
Then on the 12th of February, two days later, I replied further, quoting my hon. friend's question and my previous answer, and added:
I now give my hon. friend the answer, having taken up the matter with the Minister of National Defence:
While declarations on behalf of Canada on the subject of the defence of Canada have been made at various imperial conferences, as may be seen from the results thereof published from time to time, I am not aware of any commitments made on behalf of Canada with regard to imperial defence. At such conferences it has been expressly recognized that it is for the parliaments of the several parts of the British commonwealth of nations, upon the
[Mi. Mackenzie King.]
recommendation of their respective governments, to decide upon their course.
I would say that my answer would be the same to-day. There are no commitments made that I am aware of or that the government is aware of on the part of Canada with regard to imperial defence.
As to the part of Mr. Thomas' question which refers to the League of Nations, may I read again what was said there:
As far as collective security is concerned, the whole of the dominions are members of the League of Nations. They have given their support to the league.
No exception can be taken to that part. The last sentence reads as follows:
They are parties to every step taken by the government and, in addition, a number of them are taking steps for their own internal defence.
I wish to say that so far as the government of Canada is concerned, as a member of the league we are responsible and take responsibility for only those steps which we have taken by ourselves and on our own behalf. What we have done we have done on our own, as a member of the league. What these steps have been was fully given to the house in the papers which were communicated to parliament in the form of a white paper only a few days ago.
As to the Locarno treaty and obligations arising under it, I might quote the following, which is article 9 of the Locarno treaty, signed on October 16, 1925:
The present treaty shall impose no obligation upon any of the British dominions, or upon India, unless the government of such dominion, or of India, signifies its acceptance thereof.
A Liberal administration was in office at the time the Locarno treaty was under consideration and we took the position then that we had not participated in any conference with respect to Locarno and that we did not think we should be asked to sign the agreement. We allowed the final decision to stand over until after the imperial conference of 1926. The matter was discussed at the conference and Canada's position was made quite clear at the conference, that we were not prepared to sign the treaty, and that we recognized no obligations under it whatsoever. That expression of Canada's position was communicated to parliament at its next session here. There can be no question that as respects the Locarno treaty there is no commitment or obligation upon Canada through the action of its government.
I should add that we have made clear at various conferences that any action in the nature of military obligations of any sort

Canada-TJS. Trade Agreement
would be entered into by the government of the day only after such had been recommended to parliament by the government and approved by parliament itself.


Mr. BENNETT:: Mr. Speaker, I think there was one statement made by the right hon. gentleman that possibly should be modified. He said with respect to the League of Nations that we were bound only by such action as we had taken. We are also bound, of course, by action that may be taken by the league of which we are a member, although we may not at the moment agree with what has been done, if it is done by the majority or by the requisite number as provided for by the covenant. That, of course, is the essence of it.
I think it should be made abundantly clear that, although we may not ourselves be taking the action, if action were taken by the league as such or by a committee of the league as such, we would be bound by that action, although we might not personally agree with the action taken.


William Lyon Mackenzie King: If my right hon. friend will look at my remarks, he will see that what I said had specific reference to Locarno. I did not attempt to discuss our obligations to the league generally. We have our obligations under the covenant. I think we have recognized all of them, and will be prepared to consider each new obligation as it arises, in the light of the circumstances which may then be prevailing.



ST. LAWRENCE WATERWAY

[Stage Direction]
On the orders of the day:
Mr. T. L. CHURCH (Broadview):: I would like to ask the Minister of Railways and Canals if the government will be represented at the annual convention of cities and towns and harbours of -the great lakes in reference to the St. Lawrence waterway; also whether he will be shortly in a position to inform the house if there are any negotiations going on between the two countries for the seaway, so that when the depression is over there will be a basis of agreement.


Hon. C. D. HOWE (Minister of Railways and Canals):: The government will not be represented at the meeting. We have had no notice of such a meeting other than that given by the hon. member in the notice of question he sent across a few minutes ago; and beyond that, so far as we are aware the meeting is entirely unofficial. In reply to the second question, I may say that I know of no communication of recent date between Canada and the United States in the matter of the St. Lawrence waterway.



CANADA-UNITED STATES TRADE AGREEMENT PROPOSED APPROVAL SUBJECT TO LEGISLATION MAKING PROVISIONS EFFECTIVE

[Stage Direction]
The house resumed from Friday, March 6, consideration of the motion of Mr. Mackenzie King:
That it is expedient that parliament do approve the trade agreement entered into at Washington on the 15th day of November, 1935, between His Majesty's government in the Dominion of Canada and the government of the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, when the house adjourned Friday night I had just finished citing two opinions on this treaty, the one, as to how it might affect the United Kingdom agreement; the other, that of President Roosevelt as to how it would benefit the primary producers of the United States of America to get an entry into our Canadian market. Many opinions could be cited with respect to how it will affect our industry in Canada. However,
I have not time in the few minutes at my disposal to do this; I prefer to take the considered opinion and the first hand knowledge of hon. members who have already spoken, particularly from this corner of the house, as to how the agreement may affect industry in their particular constituencies. If it operates as they believe it will, I am fearful that if industry is ruined in the east it will affect us very considerably in the west. From the experience of the past five years we know how closely the east and the west are bound together and we appreciate how interdependent they are.
When the agreement goes to committee we shall likely get some detailed information. I -regret that so far the speeches from the government side have not given us much detailed information with respect to how it will affect us in many particulars. In that connection I might just mention the speech made by the hon. member for Melville (Mr. Motherwell). This venerable gentleman usually takes his full quota of time, speaking especially to questions affecting agriculture; he is considered an authority on agriculture because of the experience he has had, and we expected something from him. But he took only twelve minutes in speaking on this important treaty, giving us a jocular tirade against protective tariffs. Then we had the hon. member for Saskatoon (Mr. Young); he took his time in giving us a dissertation on the tariff, but he did not refer

Canada-U J5. Trade Agreement
to one single item of this agreement by which the producers in his constituency would be benefited. Then we had the Minister of Finance (Mr. Dunning). We were watching and waiting for him to say something, because his department has to do with trade, and in some particulars this agreement is really a budget, as it deals with so many changes in the tariff. We expected from him some details as to how it would benefit the trade of Canada, but what did we have? We had thirty minutes of an attack on the leader of the opposition (Mr. Bennett) which wound up in a dramatic conclusion, so to speak, that fell as flat on the ears of his followers as it did on the ears of those on this side. Certainly we had nothing from him.
I am going to make one comment by way of reply with reference to the speech of the "Minister of Finance. It will be very brief. It is to this effect: It is true that many of the things in the treaty were based on the memorandum submitted in November, 1934, but to say that the agreement signed was in its terms the same as the leader of the opposition tried to get, just because both were based on the same memorandum, is not according to fact, is certainly incorrect, and grossly unfair. I think that is a fair statement.
In the minute or two that is left I desire to make a few observations with respect to the advantages and disadvantages of the agreement as I have tried to set them out. First let me refer to the advantages. I admit that the outlet for a limited number of cattle is a distinct advantage, but here, Mr. Speaker, may I remind you that we should take into account the fact that a considerable part of the quota was crossing the boundary before this trade treaty came into effect, and also the fact that the prices in the United States for cattle have decreased considerably. Second, there is a slight reduction in the price of automobiles. On the class and kind that the farmer has to purchase, the Chevrolet and the Ford, it amounts to fifteen and in some cases to twenty dollars. But it is probable that we should have got those decreases in any case. Then there is some assistance to the lumber interests in British Columbia. We will admit that there is certainly some benefit to lumber. Those are the three advantages.
Now, as to the disadvantages, there has been a sharp increase in the price of farm implements. It may or may not be the result of this treaty, but the fact is there, and I would just remind the house that every time there has been a reduction in rMr. E. E. Perley.]
the duty on agricultural implements there has been an increase in price. Certainly the reduction in the duty on United States pork coming into Canada from five cents to If cents is a distinct threat to the hog industry in Canada. The increased price of lumber as a result of this treaty is already in force in Saskatchewan-an increase of $2 per thousand feet. It is a distinct hardship on the farmers of that province, as lumber is their chief available material for building.


Mr. McLEAN (Melfort):: May I ask a
question at this point? Does not that increase in the price of lumber, if there is an increase, improve the condition of the lumber workers of Saskatchewan?


Ernest Edward Perley: The amount
of lumber produced in the northern part of Saskatchewan is very limited. It might help the workers a little, and as I have said, it is an advantage to the lumber industry of British Columbia. But to a hundred thousand farmers in Saskatchewan who have to buy lumber it is certainly a disadvantage, and we are looking at this thing from the broader standpoint.
This treaty is dangerous because it imperils the whole structure underlying the United Kingdom trade agreement. Great Britain is now buying our primary products, the flow that was turned back into Canada following the Hawley-Smoot tariff. In the United Kingdom we have a market of one-quarter of the world's population. There is also the danger of an adverse trade balance being created. I am not going to take time to discuss that, but we know it is a dangerous situation. Just here I might state that according to the trade returns for the month of January, the first month during which this treaty was in operation, there was a reduction of $400,000 in the sale of our farm products to the United States. That is something to keep in mind.
I understand that the hon. member for Moose Jaw (Mr. Ross) is going to follow me; he said so last night, as some hon. members may remember. I should like to ask the hon. gentleman to point out to this house one particular in which this treaty helps the farmers of his constituency or of the province of Saskatchewan to sell one bushel of wheat or other grains, one pound of dairy products, one hog or one pound of pork products; and the hon. gentleman might also explain the increase in the price of agricultural implements. There is also the danger that we may lose our home market, which consumes ninety-five per cent of our primary products other than wheat. I happen to be a member of the

Canada-U.S. Trade Agreement
committee considering the election and franchise act. A proposal was made before that committee the other day that each elector in Canada should have two votes, one for the party and one for the member. If I had three votes on this occasion I might cast one in favour of the treaty because of its advantages, but I would cast two against it because of its disadvantages.
In conclusion, Mr. Speaker, I should like to say that I am not concerned with what Macdonald or Laurier did, nor am I concerned with what Bennett or King did. I am not concerned with the past; I am concerned with the present, and in connection with this agreement I am concerned as to what it will mean in the future to Canadian industry, Canadian agriculture and Canadian labour. I do not think we have had sufficient information from the government benches to vote intelligently on this treaty, and certainly no good reasons have been advanced as to why we should vote for it. Therefore I consider it my duty, representing an agricultural constituency in the great agricultural province of Saskatchewan, to vote against the agreement as it stands at the present time.


Mr. D. A. CAMERON (Cape Breton North-Victoria) :: Mr. Speaker, I am not the hon. member for Moose Jaw, though I happen to follow the hon. gentleman who has just taken his seat. I am not familiar with what is of immediate concern to the constituency of Moose Jaw, but for a few moments I should like to state some of the reasons why I find it my duty to support this resolution. I should like to preface my remarks with the statement that I do not think I would serve any useful purpose by going over the various items in the schedules in detail. That has been done splendidly by the right hon. Prime Minister (Mr. Mackenzie King) from the point of view of the government, and I am free to say that from the point of view of those opposing the treaty the presentation made by the right hon. leader of the opposition (Mr. Bennett) left nothing to be desired. I listened with a great deal of interest and attention to the speeches of both right hon. gentlemen as they expounded their different points of view' with regard to this treaty. I propose to refrain from entering into any detailed discussion of the items for another reason which is abundantly clear; that is, we will have ample opportunity to present our views as each item is being considered in committee. I am therefore going to content myself with offering a very few general observations.
First, Mr. Speaker, I propose to deal for a few moments vdth two or three of what
appear to me to be the outstanding criticisms of the agreement that has been submitted. The first point which strikes one is that much of the criticism of this agreement w'as directed to the fact that apparently it was consummated in too short a time and on an occasion when, according to the public press, the Prime Minister was taking an extended holiday after his strenuous work during the campaign preceding the election which took place October 14. Veil, Mr. Speaker, far from that being a reasonable criticism of this trade agreement, which in my opinion holds such splendid potentialities, carrying advantages to this country which are bound to tell on the general trade and industry of Canada, I regard it as a splendid act on the part of the Prime Minister that he should take the time, so soon after coming to office, to consummate an agreement the negotiations for which had been begun by the late government.
The second criticism was that he completed the negotiations leading up to the agreement not only during a holiday season but in such a rapid fashion that it was impossible to give the various details of the agreement that consideration they should have received. If the Prime Minister had come to the consideration of this agreement as a new man, without previous knowledge of trade conditions in this country, I could understand there might be some considerable force in a criticism of that kind. But surely those who make it fail to realize that the Prime Minister has given his whole life to the study of international questions, trade matters, and particularly trade questions as they affect the welfare of Canada. It was not any new venture for the Prime Minister to take up the negotiations for this agreement as he found them on entering the office. It was a matter with which his study and experience had made him familiar; he had held the office of prime minister before, and had first hand knowledge of the probable effect of an agreement of this kind upon the trade of this country as W'ell as upon our relations with other parts of the empire.
Another criticism made from this side of the house, particularly I think by the hon. member for Leeds (Mr. Stewart), was that the agreement is likely, in fact he practically went as far as to say it is almost certain, to affect injuriously the traffic on our great railway systems. The hon. member said that our railway systems were built for east and west traffic, and that if this agreement is ratified it is bound in its ultimate results to develop north and south railway traffic to the injury of our railways. My answer to
Canada-UJ3. Trade Agreement

that criticism is that if the agreement now under consideration will result in injury to our railway traffic, the agreement contemplated by the late government would be bound to have the very same effect. In fact, if we believe the criticisms from this side, it would have a still more injurious effect upon the railway traffic of this country. But I am not fearful of any such result. In my judgment the lowering of trade barriers between the two countries will in the end prove so beneficial to the general trade of the country that instead of our railways suffering through the consummation of this agreement they will be materially benefited. I am not afraid to venture that prophecy.
A third criticism, in which I am bound to admit there is some force, is that this agreement should have included in its scope certain ^ fish products which unfortunately are not in the schedule. Coming from a county where fishing is a very large industry I am bound to say I regret that the Prime Minister was unable to secure the inclusion on proper terms in that agreement of the various grades and classes of fish. But as the leader of the opposition (Mr. Bennett) has pointed out, in negotiating an agreement certain fundamental principles must be kept in mind, and if in order to include fish it would have been necessary to give concessions on something else the result of which concessions would have been injurious to this country, then I am bound to say that the Prime Minister exercised good judgment and good statesmanship in not making such concessions in connection with another industry in order that fish might be included. This is a country for which the formulation of generally acceptable trade policies is difficult, on account of our geographical position and climatic conditions. A general policy which in its essence may be beneficial to the whole country may in specific instances work a hardship on some localities or individuals. The best any person charged with the responsibilities of office can do is to make an honest attempt to accomplish a general agreement which, taken by and large, or, to use the expression used by the leader of the opposition the other day, "on balance," will mean the greatest good to the Canadian people as a whole. Notwithstanding the pessimistic outlook of the leader of the opposition, I believe that on balance this agreement is bound to work in the general interest of the majority of people of this dominion.
The other day the hon. member for Royal (Mr. Brooks), speaking to this resolution, was particularly critical because the agreement does not include fish. But if the in-

elusion of fish involved increased competition of American coal, then coming as I do from a constituency in which the coal trade is a very important factor, I commend the Prime Minister on the fact that under this agreement our coal industry will not be subjected to such increased competition in the Canadian market. In this connection I point out that in the conclusion of any agreement it is impossible for the wisest statesman to foresee all the results at the time it is entered into. There is a peculiar situation developing at the present time in connection with coal in what we call the St. Lawrence market, the Quebec market. I think it may be reasonably said that it is a direct result of the Ottawa agreements, and that the product of the Nova Scotia mines is at this time being subjected to keen competition from coal produced under peculiar circumstances in the British Isles. British coal is entering Canada under circumstances approaching those which would justify the imposition of dumping duties, and I am informed on reliable authority that it is competing with Nova Scotia coal to such an extent that it is likely in the present year to displace from 400,000 to 500,000 tons. I am sure those who represented Canada in the negotiation of the Ottawa agreements never anticipated any such result. However, that is the result facing the coal trade in eastern Canada.
Last Thursday evening the hon. member for Royal (Mr. Brooks) spoke as though the provisions respecting swordfish were a matter of minor concern. Well, it is true that the trade is not very great, but I suggest it is worthy of consideration. The provisions respecting this commodity represent a concession to Canadian fishermen which will mean something in dollars and cents. The trade is growing. Fifteen or twenty years ago along the coast of my constituency the taking of a swordfish was considered an event, but now a substantial fleet of fishermen is engaged in this pursuit for a month or five weeks each year. According to the bureau of statistics, last year we exported 14,780 hundredweight of swordfish to the United States, at a market price of S154,421. The saving on that item alone will mean a distribution of about $8,000 among the fishermen along the coast of Cape Breton and other parts of Nova Scotia. This may be a small item, but it represents a substantially greater amount of money to be distributed among men engaged in a somewhat hazardous occupation.
I have noticed a considerable amount of ill advised propaganda against the trade agreement. No doubt some of it is done through

Ccinada-U.S. Trade Agreement
ignorance, but some of it, I am afraid, is through design. In certain journals published in the maritime provinces the statement appeared last week that as a result of the trade treaty we would lose our trade with Bermuda. That was the statement which appeared in the Truro News of March 7.
I am not in a position to say whether there is any basis for that statement or not, but it is an interesting fact, that, according to the bureau of statistics, in January, 1935, no potatoes were imported into Canada from Bermuda, whereas 658 hundredweight were imported in January, 1936. Apparently the propagandist of the Truro News is so anxious to score a point against the treaty that he has neglected to take the elementary precaution of ascertaining whether the situation in Bermuda was induced as a result of the trade agreement or as a result of conditions over which no government has any control. Possibly the extracts read by the hon. member for Royal from journals published in New Brunswick have just as little foundation in fact as that published in the Truro News. At all events they appear to be of a similar class and were no doubt designed for similar purposes. I am paying some attention to the observations of the hon. member for Royal, because he undertook to speak for the maritime provinces. That may be a large order, but the fact remains that he attempted to do it. Perhaps his undertaking was forced upon him by circumstances over which he had no control.
The hon. member suggested that the treaty did not benefit the lumber trade of the maritime provinces, but he admitted it was beneficial to the trade in British Columbia. Hon. members know that British Columbia is a better lumber producing country than any part of the maritimes, and we know that competition from British Columbia is felt in the markets of the old country. The United Kingdom has always offered a market to the lumber dealers of the maritime provinces. To the extent that the opening of the market in the United States will form a nucleus of a market for the products of British Columbia, to that extent will it ease the pressure on the market in Great Britain, thereby making it easier for lumber produced in the maritimes to hold its own in that market. Indirectly, if not directly, the trade agreement will be a considerable benefit to the lumber producers of the maritime provinces.
In my opening observations I indicated that I was not going to speak at length. I take the position that every move on the part of the government to remove shackles from trade is a
move in the right direction. I am not speaking in a disparaging way about tariffs; rather I am associating myself with leading bankers and economists when I say that to the extent that we wisely, with prudence and with care remove shackles from trade, to that extent we are making it possible for Canadian producers and consumers to prosper in their respective callings.
I accept the doctrine propounded by Right Hon. Stanley Baldwin, who stated here in 1932:
What then should be the first aim of this conference? It should be to clear out the channels of trade among ourselves. For that purpose we need not measure too closely or too exactly the relative value of preferences given and received.
If we never negotiated a treaty unless we were able to say that the advantages were all on our side, that we had the best of the bargain all through, then we would never negotiate a treaty at all. I am not impressed with the quotations which have been made by certain hon. members from the remarks of Mr. Cordell Hull, the Secretary of State of the United States, and others in that country, who are in favour of this agreement. If we listened to what the former president, Mr. Hoover, and those associated with him, have to say, we would be convinced that Canada was receiving everything without giving anything in return. Those of us on this side of the line who support the agreement undertake to point out its benefits, while those who oppose it undertake to criticize it. In the latter case they base their arguments upon the fact that those in the United States who are in favour of the agreement point out the benefits accruing to the United States. Each critic is just taking a one-sided view of the agreement, but I prefer to look at it from the broad standpoint. I realize that we could never get an agreement without making some concessions.
I hold to the view that an expansion of trade will solve to a large extent the many difficulties with which we are confronted today. I do not believe we will get out of this depression or be able to take care of our unemployment by raising our trade barriers and confining our trade within ourselves. I believe that the opening up of new trade avenues will go a long way towards solving the unemployment problem. I listened with a great deal of attention to the hon. member for Greenwood (Mr. Massey). He gave to the house a picture of the terrible condition in which the youth of the country find themselves. He claimed that the youth of the country were not given an opportunity to learn how to work, and in many cases were not given an opportunity to work at all. I

Ccinada-UJS. Trade Agreement
am not one of those who believe that trade alone will solve all our problems, but I believe that to the extent to which we open up avenues of adventure and new lanes of trade, so will we make it easier for new industries to open up and for agriculture to expand. In this way avenues of employment will be made available to the class to which my hon. friend referred.
I commend most heartily the courage of the Prime Minister in dealing with this problem as soon as the opportunity was afforded. I should like to close by quoting the words said of one of Scotland's heroes:
He either fears his fate too much,
Or his deserts are small,
That dares not put it to the touch To gain or lose it all.


Mr. N. J. M. LOCKHART (Lincoln):: Mr. Speaker, it is not my intention this afternoon to enlarge to any extent upon the many presentations that have been made in connection with this trade agreement. I have listened with a great deal of interest to the arguments that have been presented by both sides of the house. I listened to the presentation of the right hon. the Prime Minister (Mr. Mackenzie King) and also that of the Minister of Finance (Mr. Dunning). We have been told by those on the government side that the negotiating of this agreement has been a marvellous achievement, and we have been told also that the agreement had its origin in the leader of the opposition (Mr. Bennett). The leader of the opposition is given a certain qualified credit for having brought about this agreement. It has been said that the discussions he had with officials of the United States had considerable to do with the perfecting of the treaty, and he is given that much credit. However, in the next breath he is twitted with the fact that he was not able to bring the agreement to its final stages, that it required the ability of the present government to make this agreement an actual reality. As I say, all this has been very interesting to listen to.
It has been intimated by the Prime Minister that the agreement might not be all that was desired, that there are certain doubtful phases. I am entirely in accord with the statement with reference to the doubtful character of this agreement. The Prime Minister says that the agreement will assist our railroads and increase our purchasing power. He says it will bring us out of the depression in which we have been for a number of years. I believe this is the gist of what has been said by the right hon. gentleman and what is recorded in Hansard. I noted that the right hon. gentleman did not go back very 
far in tracing the causes of the depression; he did not go back to 1929 when he had so much to do with it. Hardly any reference at all has been made to all the warnings that were given by the right hon. leader of the opposition before 1929. They are all recorded in Hansard and have been rehashed over and over again in the daily press, so there is no necessity for my repeating them here; nevertheless they are facts which we should all do well to bear in mind.
The Minister of Finance, in approving the agreement, pointed out that if it requires correction in any particular the government can apply the remedial measures which are necessary. I am very glad, Mr. Speaker, that he admits there is a possibility of that, because I say to hon. gentlemen in this house who represent constituencies similar to mine that if I do not miss my guess there will be many remedial measures required to make this agreement effective. But I wonder if hon. gentlemen opposite have been assured by the government that these remedial measures actually will be applied. Personally I have heard no such assurance up to the present time. The only thing I have heard in that respect was the rather evasive comment of the Minister of Finance that remedial measures were a possibility.
We have listened to some very able presentations of arguments against this agreement by hon. gentlemen on this side of the house. I might mention the hon. member for Da'n-forth (Mr. Harris), the hon. member for Dufferin-Simcoe (Mr. Rowe), the hon. member for Davenport (Mr. MacNicol), the hon. member for Yale (Mr. Stirling), the hon. member for Peel (Mr. Graydon), the hon. member for Lanark (Mr. Thompson), the hon. member for Qu'Appelle (Mr. Perley), and many others. They have dealt with the interests of the basic and secondary industries of this country and have pointed to many considerations which I think the government would do well to ponder seriously. I know that the case which they have presented has made a very definite impression on my own mind. Are hon. gentlemen opposite turning a deaf ear to all the presentations from this side of the house, or are they seriously considering them? I wonder if they think that all the brains of the house are confined to one little group sitting on the other side.


An hon. MEMBER:: Hear, hear.


Norman James Macdonald Lockhart: That "hear, hear" is
typical of the kind of criticism of hon. gentlemen opposite. But surely they must admit that men who have had long experience in government, and are just as conscientious as

Canada-UJS. Trade Agreement
they are, are qualified to pass fair and constructive criticism on a measure of this importance.
We have been told that the leader of the opposition should receive a great deal of credit for his part in negotiating this agreement, but hon. gentlemen opposite say that he could not conduct the negotiations to the point of signing the agreement. I think the leader of the opposition has sufficiently well established his own position with respect to the agreement, and surely any intelligent member of this house will appreciate the explanation the right hon. gentleman has given of his part in those negotiations. And surely if we want to look at -the matter in an unbiased way, what the leader of the opposition has said should have some weight when we are attempting to come to a conclusion.
To me as a new member of the house the attitude of hon. gentlemen opposite seems to have been one of cheering and gloating over the fact that this government has been able to consummate this agreement. Their attitude is:	You fellows over there had your
chance-why didn't you make an agreement? From the benches opposite we have received very little comment that has been constructive, beyond the presentation of the Prime Minister and the evasive remarks of the Minister of Finance.
I come from the Niagara peninsula, which is of fairly good repute, I think, throughout this dominion, and I wonder how hon. members of this house who represent other fertile districts in this country have been viewing the lack of constructive suggestions from their own side. Think of those vast fertile tracts from the Niagara peninsula to Windsor, and then, north of that, of those vast areas in the St. Lawrence valley, the richest in the world, producing fruits and vegetables, and of those sections of British Columbia which are likely to be affected by this agreement. Do hon. gentlemen representing these districts want Canada to return to the conditions of 1929, to the conditions that prevailed from 1926 to 1930. as I recall them most vividly? Do my hon. friends who are interested in these rich tracts of country recall the flow of trucks back and forth across the border, bringing in the surplus crops of American fruits and vegetables to be disposed of in Ontario and other parts of this dominion? I wonder if they recall that the canning companies were compelled by the competition of American canners to resort to importing a portion of their requirements, and then their pack, much of it, probably went over to the homeland. I shall not
read into Hansard figures from the bureau of statistics showing how these importations were reduced in the years from 1930 to 1935 when we had a Conservative government in power in this country. We have all had an opportunity to digest those figures and discuss them on the public platform and in private, and it is hardly necessary for me to repeat them here. I wonder if hon. gentlemen recall, as I do, the truck loads of surplus American produce coming into our own home market, as I saw them come into the St. Catharines market, and selling at a price with which no producer in Ontario could begin to compete. I have experienced those things, and I know something about them. The late government took steps to protect this particular industry-your industry and mine. It constitutes one of the greatest basic industries of this country. I recall that when the canning factories were assisted by the late government in respect to importations, imports of canned goods, which had been coming into Canada in thousands of cases, were reduced by seventy-five per cent. The statistical reports will prove that. A feeling of security was built up among the fruit and vegetable interests from 1930 to 1935. I know of one very large producer who spent a small fortune-and this point applies to Peel and other counties that have been referred to on the floor of this house-in building greenhouses in which to produce commodities for the households of this country, such as lettuce, early cabbage, and similar products which tend to foster our home markets. I recall that he was frightened almost beyond description when he was told by owners of trucks that came down from Guelph and Galt and Hamilton: "We may	as	well	go	a	littlefarther east where we	will	get	our	producefor half the price that	we	can	buy	it	fromyou." He replied, "I cannot produce it for any less, with all the costs of production here." They started	to	carry out	their
threat, and I well remember how the late government saw to it that that situation was relieved.
Nor have I forgotten all the invested capital and the immense amount of labour that is taken care of through that investment. I know of one place where over forty persons are working. It is one of the largest greenhouses in the country, growing plants for other growers and for the owner's use. I saw in 1931 cabbage being brought over wholesale from the United States, to the detriment of home production, but the late government saw fit to stop that kind of thing by applying the necessary restrictions. Are hon. mem-


Mr. WARD:: Will the hon. member permit a question? Would he support a measure that would bonus all agriculture?


Norman James Macdonald Lockhart: No, I would not. May I refer to a personal experience last year? Hearing that there was a considerable crop in New York state, I visited that state, and I found that tons and tons of fruit and vegetables were being offered along the highways. I inquired as to the prices; they were 25 to 50 cents per hamper for the best peaches, and all kinds of fruit and vegetables of the first quality were being offered at proportionately low prices. I asked as to the reason, and they said that the major portion of their stock of produce had been consumed and this was more or less their surplus. The storage companies had refused to accept any more deliveries; the canning factories had said that they wanted no more produce of any kind. The highways were banked with this surplus produce, right in the midst of the harvesting of our own luscious crop in Ontario and other parts of Canada. I spoke to grower after grower and asked why they did not engage trucks and take it across to this steady, stable Canadian market as they had done for the previous four or five years. They shook their heads and said: "There is no chance of any such opportunity now as we had a few years ago. The present government of Canada sees to it that the home producer is protected." I wonder how many hon. members of this house can recall such conditions as I have related. Are all my hon. friends sure, I say, that the provisions of the law are to be put into effect and that we shall again be faced with these unfortunate conditions?
Let us go forward to June, July and August of this year, when our harvesting is in progress. Hon. members have been very silent on this point. I am wondering what alibi they will have when they go back this year to their constituents for their silence in this house if we are to be given no more assurance and no more definite statements of full protection in this respect than have already been forthcoming.


Mr. WOOD:: I should like to ask the hon. member a question. In spite of all he says

about the protection provided in Lincoln county-and I know something about it-is he prepared to say that the producer has enjoyed better prices in consequence of the policy of his party in the last five years? Has he disposed of his surplus? Was there no surplus at that time?


Norman James Macdonald Lockhart: The producers have had better prices in the last four or five years than they had prior to 1930. That is my answer to the question, and I can prove it. There are a great many implications in the terms of this agreement. What happens if our basic industries fail in any measure? The purchasing power of the producer is affected. The products of our secondary industries remain unsold. Unemployment follows. Then we have increased relief, and the urban centres come into the picture, where, we are told, fifty-two per cent of the population reside. Back come the authorities in the provinces and the mayors of the cities and towns to the doorstep of my hon. friend the Minister of Labour, wanting increased assistance to take care of the increasing population in the urban centres.


An hon. MEMBER:: They did during the last government.


Norman James Macdonald Lockhart: Why should they not? Of course. A large percentage have gone into the urban centres. That is the result when we break down the possibility of increasing our basic production and maintaining fair prices. My stand is going to be to protect our home markets as the late government did.
Then let us go further and foster these favoured relations through our empire trade agreements. I seem to recall that those agreements were strenuously opposed by about ninety-nine per cent of the then opposition, who are now the government. I wonder if they will now say that they were justified in that opposition. We must all think seriously on these matters.
There is another reference I desire to make before concluding. We have spent days in this house discussing the over-production of wheat and the multiplicity of ways by which we hope to dispose of that oversupply. I should like to refer to another basic industry, which will also develop into a secondary industry and which will be wiped out by the terms of this agreement. I should like hon. members from around Montreal, Chatham, Stratford and vicinity to pay particular attention to what I have to say. A few years ago an industry was started at Chatham on a very small scale; I refer to the processing of the soya bean. That factory met with certain

Canada-U.S. Trade Agreement
financial difficulties brought about by reasons which I need not mention, but we will say it suffered from mismanagement. Recently new factories sprang up at Montreal and Stratford. The Montreal plant is capable of processing 200.000 bushels per year. So far I have not been able to get definite information as to what the Stratford plant can process, but I imagine it will be at least half that amount. In addition we have the parent plant at Chatham, which is being rehabilitated and which I believe will be able to process a reasonable amount of soya beans. This industry was fostered by the late government. Up to the present time, that is up until last year, only about 100,000 bushels of soya beans were produced in Canada. I am informed that the minimum average yield is about twenty bushels to the acre, and I am also informed on very good authority that the price is about SI.10 per bushel at Montreal.
The soya bean is very high in protein content, and from it is made a very valuable feed cake. An oil is also obtained which is being used extensively in the manufacture of soap and high grade paints. These are all commodities that are used to a great extent in this country. While on the train returning from Toronto Sunday evening I happened to encounter quite by chance a man who is very closely connected with the soya bean industry in the United States. He informed me that there are tens of thousands of acres of these beans being grown in the United States, and their high oil content is becoming recognized as one of great value. He informed me that the Ford Motor Company wras using the soya bean oil almost exclusively in the manufacture of its high grade paints and that the soya bean industry had become so important that only last week the Chicago exchange had been asked to include daily market quotations on the soya bean and its by-products. I believe the soya bean has developed into an important competitor in the salted peanut market. It is a peculiar thing, but when I returned to Ottawa I encountered a government official in the Department of Agriculture, who told me that only the week before he had been given the opportunity of tasting a sample of soya beans passed through a gun, just as puffed wheat is manufactured. He had tasted a sample of beans that had gone through this new process, which I understand has been developed by a man living in the province of Ontario, and he gave it as his honest conviction that the product was far superior to any salted peanut he had ever tasted.
I mention these facts in order to show the possibilities of the soya bean industry. Here is an opportunity to build up a new basic
12739-59J
industry which undoubtedly will develop into an important secondary industry as well, but what do we find under the trade agreement? Soya beans are placed on the free list and our market is opened to the competition of the tens of thousands of bushels produced annually in the United States. In all fairness, Mr. Speaker, I ask, is this encouraging a young Canadian industry, both basic and secondary. Is this going to help employment at Montreal or Stratford or Chatham? Is this going to bring about another invasion of the Canadian labour market? Is it going to help increase the tonnage of our railways? I wonder if the hon. members from those areas have overlooked the fact that soya beans are on the free list. I hope the government will see that these conditions are remedied, but from what took place prior to 1929 I again have little hope.
This agreement, as it has been executed, contains many implications, Mr. Speaker. I have given a good deal of thought to these questions as they concern furniture, cut flowers, fruit and vegetables, lumbering, beef, hogs, and so on, together with the quotas that have been established, and I cannot see anything equitable or nearly equitable in the agreement. I am opposed to sacrificing the recovery of Canada as during the last two or three years and which we enjoyed under the late government. I will stake my all on the preservation of our home markets, the protection of our basic and secondary industries and the further increase of our trade by continued empire trade agreements. Canada has unlimited natural resources, which must not be exploited by any nation that will not trade with us on an equitable basis.


Mr. J. J. DUFFUS (Peterborough West):: Mr. Speaker, it is not my intention, nor do I consider it at all necessary for me in this my maiden speech to take any appreciable amount of the valuable time of the House of Commons in further support of this trade agreement between Canada and the United States of America. I shall endeavour to refrain from giving long lists of figures, averages, percentages, quotas, per capitas, and the like. We have heard these reiterated in this chamber time and again until I question whether any hon. member can recall them, with the exception perhaps of the hon. members who so ably placed them on Hansard. I am convinced that every hon. member of this house has long since come to a decision as to how he or she will vote on this important trade agreement. I think it is well, however, that the house and the country should know how the agreement is being supported by comment


Mr. WILTON:: How does the hon. member suppose it will increase employment?


Joseph James Duffus: It will increase employment in many ways. In the first place, it will give us more adequate markets; there will be a greater expansion of trade and consequently employment will increase. Without increased markets, without an expansion of trade we will continue to have an unemployment situation as acute as it is at the present time and as it has been during the past five years. I believe that this government is a reasonable government. I am confident that should this treaty adversely affect any industry, we as their representatives stand ready to accompany the owners and their associates to the tariff board, to the Minister of Trade and Commerce (Mr. Euler), and to the Minister of Finance (Mr. Dunning) where they are sure to get a sympathetic hearing of their case and a satisfactory adjustment of their grievances if it is at all possible. I am sure that our manufacturers know and appreciate that every effort is being made to reduce the cost of the instruments and implements of production. This will assist very materially. It is obvious that lower production costs are essential, in fact they are imperative. Commodity prices must be reduced to the minimum in the interests of the consumer if he is to maintain a decent standard of living, which standard is not too high at the present time. These adjustments will bring about increased employment, a greater tonnage for our railways and transportation systems and an increase in our tourist trade. There will be greater profits in business and the people in all lines of endeavour will have an increased purchasing power. The lowering of commodity prices and the providing of adequate markets for 
our surplus products, not by blasting methods but by the exercise of good will, has been the policy of this government and has always been the policy of the Liberal party.
The first and most important step towards the elimination of this widespread depression is to make the farmer prosperous. He is the greatest buyer in the country. At the present time everything he possesses-I can hardly say everything he owns-is in a dilapidated condition. Restore to him his former purchasing power and our unemployment problem will be solved. If our farmers are prosperous, our merchants will be happy, our manufacturers will be busy and our lumbermen, fishermen, and miners will be working. In conclusion may I say that if we can obtain the cooperation of both sides of the house and the coordination of the thoughts and efforts of all hon. members it will hasten the time when all the citizens of this fair land will be enjoying the same measure of prosperity and happiness as has always obtained under a Liberal administration.


Mr. P. J. ROWE (Athabaska):: Mr. Speaker, I intend to vote for this resolution on the principle that half a loaf is better than no bread. I say advisedly, "on the principle" because I do not see even half a loaf; I do not see even a quarter of a loaf and it would take a microscope to discover even a crumb. However, consistency and logic demand that I vote for the crumb. Surely it must be clear to every impartial person that tinkering with tariffs will not solve our problems. If it would, the experimentation with tariffs during the last seventy years by both major parties of Canada would have accomplished something. I conceive it to be the inescapable moral and legal duty of this house to find a way to distribute the vast wealth of this country among the Canadian people. Everyone agrees that great wealth does exist in this dominion.
I was in the museum on Sunday looking at the tools and the culture of our Indians and Eskimos, and it struck me what an object lesson for the people of Canada this was, for these simple primitive people had at hand only their traditions, their folk lore and the simple culture of ages past, and yet what amazing skill and ingenuity they applied to the problem of living. We to-day have inherited the accumulated knowledge, culture and science of all past ages, and yet in the midst of an admittedly incalculable abundance of everything we have failed to find a way to distribute equitably, justly and fairly among the Canadian people the vast wealth that everyone agrees exists in this country. One might carry the metaphor even further and refer to the

Canada-U.S. Trade Agreement
Scriptures: "Go to the ant, thou sluggard; consider her ways, and be wise." Surely we who have preached brotherhood for centuries and have even talked about a religion that is beyond the compass of the human understanding must admit that we have neither the morality nor the intelligence of insects because the ants and the bees have their cooperative commonwealths, their industrial democracies, in which each individual in return for the labour that he gives is guaranteed all the necessities of life. Under the present system, as has been amply demonstrated in the report of the price spreads commission, men, women and children are treated as a means to an end, and that end is the enrichment of those who by their privileges and by the power that is given them under the system are able to impose their uncompromising will upon the weak and the helpless.
Thinking along these lines, I wonder whether we could not take a more scientific and a more humanitarian attitude towards these problems. I think it is an unassailable truth that Canada has concentrated within her borders the greatest body of vital natural resources existing within the borders of any country in the world. Canada is more richly endowed with all that goes to make for a beautiful, happy and comfortable living for our people than is any other country in the world, and yet one and one-quarter millions of honest, decent Canadian citizens are to-day compelled to accept the bitter, heart-breaking degradation of public charity. Charity may be a lovely virtue if you are handing it out, but it is the bitterest of all pills to accept. In the words of the right hon. leader of the opposition (Mr. Bennett), "the dole is a condemnation, final and complete, of this system." I agree. I also agree with the poet Edward Markham, who, speaking of these matters, said:
Down all the stretch of hell to its last gulf there is no shape more terrible than this, more tongued with censure of a world's blind greed, more filled with signs and portents for the soul, more fraught with menace to the universe.
I feel that to-day every member of parliament is standing at the bar of judgment, and I am wondering what the verdict of history will be. God forbid that we should fail to do the reasonable, the logical, the humanitarian and the Christian thing.
There was something rather ominous in the words of the Minister of National Defence (Mr. Mackenzie) when, speaking before the Canadian Artillery Association at Ottawa on the 7th of February, he used these words:
I want to leave with you the profound thought that you will never have in the Dominion of Canada an adequate system of defence until you create a national sentiment in favour of such a system. In my mind there are two cardinal and guiding principles to be borne in mind when establishing a system of national defence. First we must have the defence forces sufficient to control subversive elements from within, and sufficient also to repel attacks from without.
I want to suggest to the minister and the cabinet that if they would give consideration to a sane rational system of equitably distributing the products of this power-industry age, there would be no need of worrying about subversive elements within the country. Are we to understand, for instance, that the citizens of Pembroke, Ontario, who apparently driven to desperation by the sound-money scarcity philosophy of their government rose in anger, are to be classed as subversive?
I am a citizen of Ontario; my people have lived here for generations, and I say that the gathering storms of anger at the futility and inability of governments-I do not care what name they go under-to solve this problem of poverty amidst abundance is simply taxing the patience of even the best Anglo-Saxon citizens of Canada. If I am told that I am severe in my language I say that the circumstances call for severe language. As William Lloyd Garrison says:
The apathy and indifference of the people with regard to this great question is enough to cause every statue to leap from its pedestal and hasten the resurrection of the dead.
I am not equivocating. I will not retreat one inch. I will be heard on behalf of the people of this country who are looking to this house and to this parliament for a solution of their problem. You might as well say to me, sir, that I am predicting a revolution when I talk about the people rising in anger as say to the astronomer who uses his instruments to calculate the movements of the solar bodies and predicts that there is going to be an eclipse of the moon at a certain time, that he is to be blamed when that eclipse happens. I say that unless we take hold of this problem immediately and solve it, we are going to have trouble.
I want to ask the government a question or two. The first is this-and I am asking it of course in relation to the system; I have nothing whatever against this or any other government-Why do we, at great cost, train our young men in universities, give them the degree of Bachelor of Commerce, and send them overseas to drum up markets for goods which are needed here at home? I say that nothing could be more stupid or more grotesque. If we can demonstrate to other


Mr. MOORE:: Is the hon. gentleman
referring to the report or survey of the Brookings Institution?


Percy John Rowe: I am referring
to the report of the National Survey of Potential Productive Capacity, which has just released its findings. It is published by Charles Loeb, director of the survey.


William Henry Moore: May I ask the authority
for the survey?


Percy John Rowe: The authority
is the United States government. I should like to put on Hansard, for the benefit of the hon. gentleman, a quotation about that. This is what Stuart Chase, the great economist and writer in the United States, has to say about it:
This study is destined, I believe, to have historical importance. It has furnished comprehensive statistical proof for a possible era of abundance; proof which has long been 
wanted. It gives the lie to the scarcity men, the hucksters, gamblers, and financial jugglers who once promised the end of poverty, and who now, their system in reverse, foretell an America of industrial serfs, peasants, and belt-tighteners, into a bleak and undated future. Where are you going to get the money? they cry. If the abundance men can carry the findings of the National Survey to every hamlet in the land, there will be in the end no question of where the money is coming from. Americans will not be content to idle in semistarvation because the rules of an antiquated money game demand it. when they know that tlie_ good things of life are theirs for the taking-and, mind you, the working. An income of $4,400 a year in sound goods and services is not affluence, but it looks like paradise to most families in this country to-day. And it is only a beginning; only the first indication of what the power age can do for mankind, if once it be given an opportunity genuinely to serve mankind.


William Henry Moore: I am extremely interested
in what the hon. gentleman is saying, but I would call attention to the fact that he is speaking of comment on the report, and not of the report itself. I think that is correct, is it not?


Percy John Rowe: That is correct. Perhaps, in order to clear up this matter, I had better say a word or two about the source of this report. This commission, as I said a moment ago, was appointed by the United States government for the purpose of making a survey of the productive plant of that country. Mr. Harold Loeb was the director of that commission. The findings of the commission have not yet been released in the form of an official blue book. But Mr. Loeb, as chairman of the commission, has written this book and foretells and analyses what the report will contain, and there is a chart which shows the whole of the resources of the United States from the land, the factories and the distribution system. It is an exceedingly interesting chart, and I would recommend it to the hon. gentleman for study.


William Henry Moore: I have read it. I think it would be well, though, that the hon. gentleman should take some other opportunity to undertake an analysis of it for the purpose of seeing that it brings out his conclusions.


Percy John Rowe: I was endeavouring to point out in a spirit of friendliness, amity and cooperation-


William Henry Moore: Quite so. I accept that.


Percy John Rowe: .-that we have a suggestion to offer and we are offering it sincerely to the government, that they should study this. I am going further. I have very great pleasure in seconding the resolution which

Canada-V JS. Trade Agreement
is now on the order paper asking for the appointment of a committee, or rather, if the government so desires, of one of the standing committees, to make a similar survey of Canada's production plant. That resolution, very properly, is on the order paper in the name of the hon. member for Peace River (Mr. Pelletier), the youngest member of the house, and I think it is appropriate that the youngest member should bring it forward, because it is for the next generation more than for us.
Right on that point, I want to enlarge on the youth problem of this country. To the youthful fancy of the boys and girls coming out of our homes and schools and colleges, the future seems to lie before them like a land of dreams, so beautiful, so varied, and so new. But what have we to offer them? I say that it is within the power of the members of this parliament to see that their hopes are realized and that their dreams come true. Surely it must not be beyond the power of parliament to take cognizance of the wealth of Canada, to survey its resources, and to formulate an intelligent, rational plan for giving life and liberty and happiness to the young people of this dominion.
We have preached brotherhood for centuries. The time has now arrived when we can find a material basis for brotherhood. I think we have found that basis in this age of plenty and machine-made abundance. I believe we are actually nearing the borders of the long promised land. Mankind has wandered for thousands of 3rears in the wilderness of racial hatreds and jealousies, of fear, insecurity and mass murder. It is not too much to say that the ushering in of the age of harnessed solar energy and mankind's inventive genius, the inheritance of the accumulated knowledge and culture of the past, will mark the fulfilment of mankind's age-old quest for freedom, security and happiness. In thinking of the problems confronting this parliament and this country I am reminded of the words of the great commoner, William Jennings Bryan, when he said:
You shall not press down upon the brow of labour this crown of thorns. You shall not crucify mankind on a cross of gold.
I might add to that: You shall not crucify this generation on a cross of scarcity and artificially created poverty. It is just the same thing.


Mr. DEPUTY SPEAKER:: I must ask the hon. member for Athabaska to confine his remarks to the question under discussion.


Percy John Rowe: Thank you, Mr. Speaker. I am sincerely trying to suggest a
plan to the government; that plan you have just heard, that we have a committee appointed by this house to make a survey of our wealth, and in that connection we undertake to work with the government. I do not think the people of Canada are in the least concerned about what party brings in this plan. The personal ambitions of politicians or the personal fortunes of particular parties are of no consequence to the Canadian people. What they are interested in is this: In their homes, with their children, they desire to have security, and I should like nothing better than to see the Liberal party bring in this plan If they did so they would earn the everlasting gratitude of the people.
Now, Mr. Speaker, I say that sane men are at last resisting the subjection of the world's real powers to the world's most purely instrumental mechanism, the money system. Monetary restriction upon the actualities of the earth's fruitfulness is so nearly complete that the matter becomes one of life or death. In default of converting our leaders from their fantastic veto upon life there is only one common sense retaliation, and that is a temporary return to direct exchange of labour, or primitive barter. Indeed, I could give dozens of illustrations, from my own riding, of people now engaged in primitive barter, because they have no money. I say that a government-I am speaking not of this government particularly, but of any government- which is afraid to face a simple problem requiring only common sense and backbone, which will allow an inanimate mechanical bogey to strangle and smother the legitimate and normal aspirations and the inalienable rights of the Canadian people, is not worth its salt. It has forfeited its right to the respect of the people and its right to govern the country. The only purpose of government is to minister to human needs, to represent the people, to promote and safeguard their welfare. That is what people pay their taxes for. It may be that some of us here-and I would include myself, because I have seen something of the temptations to which apparently people succumb when they get a good salary and a good deal of comfort-forget the people who sent us here, the people who pay the taxes. Perhaps that is natural, but I am suggesting that we should bring to the solution of this problem all of our manhood, all of our sincerity and our energy, and work together to find the answer. I appeal to every member of this house, not as members of any party but as citizens of Canada elected and paid, as I am and as we all are, by the rest of the citizens of Canada to promote and safeguard

Canada-U\S. Trade Agreement
their welfare, to consider earnestly and sincerely how we may together solve these problems for all the people.
As I said a moment ago, Mr. Speaker, the people are not concerned with the fortunes of any party, but they are supremely concerned with whether we take hold of this job and do our duty like men. We may not meet with success immediately, but if we even start in the right direction and lay the foundation upon the principles of truth, justice and reason, those who follow will have not a jungle trail of selfishness, greed and hate but a broad highway of truth and knowledge along which to travel. This is not a political problem; it is an engineering and accounting problem. Let us get our committee appointed, let us get to work at once to assemble all the facts and then proceed together to work out the solution.
Mr. JAMES A. MacKINNON (Edmonton West): Mr. Speaker, it had not been my intention to participate at all in this debate, but it has occurred to me that as the lone Liberal elected from the province of Alberta there is a responsibility devolving upon me at least to state my position in regard to this matter.
The merits of this agreement have been discussed thoroughly and exhaustively, and in my opinion no good purpose can be accomplished by further traversing all the arguments so ably put forward during the debate. There	is one	point,	however,	towhich I should like to refer. The right hon. leader of the opposition, the hon. member for Oargary West (Mr. Bennett) has opposed this agreement	and has led his party	inopposition to it, an agreement in the making of which he certainly had a hand. I do not want any member of this house or any reader of its proceedings to get the idea that the right hon. gentleman speaks in any way for any measure of	Alberta	public	opinion.Mr. Speaker,	if this	treaty	were to	be
submitted to a referendum of the people of Alberta apart from any political prejudice, I am very sure that not only would it carry overwhelmingly, but almost unanimously. I wish to report to the house what I believe to be the public opinion of that province that I am interjecting these few sentences.
The right hon. leader of the government (Mr. Mackenzie King) has been criticized for the speed with which he has brought these negotiations to a successful conclusion. To us in Alberta that was a hopeful sign, a promise of action and an indication of a readiness to put quickly into effect the over-

whelming mandate given him from all parts of Canada. So, on behalf of the great volume of progressive Liberal thought in Alberta-and one is wrong who thinks the limited Liberal representation in this house belies that statement-I wish to congratulate the right hon. leader of the government and his colleagues upon their achievement and to thank them for so quickly and so successfully bringing about this very excellent trade agreement.


Mr. FRANK BLAIS (Chapleau) (Translation) :: Mr. Speaker, this being my maiden speech in the house, I am pleased to congratulate you on your election to the speakership and also to extend my congratulations to the right hon. Prime Minister (Mr. Mackenzie King) for having proposed your nomination to this office and to the Minister of Justice (Mr. Lapointe) for having seconded it.
As the representative of the constituency of Chapleau, I wish to voice my view's on the reciprocity agreement. The county of Chapleau is already a very important one from the standpoint of agriculture and colonization, and I am free to state that, in the near future, it will be, of all the counties in the dominion, the one where agriculture, mining and forestry operations will reach the highest degree of development. No better news could have been conveyed to us than the announcement by the Prime Minister of the signing of this trade agreement with our neighbours to the south.
It was with great pleasure that I read in La Presse, of August 3rd last, that one of the principal features of the Liberal party's program was the negotiation of a reciprocity agreement with the United States at the earliest possible moment, in the event of it obtaining the confidence of the people on the 14th of October. As we hoped, the results w'ere most wonderful. The triumph was without precedent in the history of Canada.
I therefore beg the hon. the Prime Minister and his colleagues to accept the congratulations and thanks of my constituents for the prompt execution of their promise.
I am highly pleased with the reduction of $2 per thousand feet in the duty on Canadian sawn lumber exported to the United States. The production of sawn lumber in my county amounts to about 35,000,000 feet per year, and, thanks to this agreement, we shall be paid S2 more per thousand feet, representing additional receipts of S70.000, which will be highly appreciated by us. The increase of $2 per thousand feet on our sawm lumber enables us to pay to the men in our winter camps S50

Canada-U.S. Trade Agreement
and more per month, including their board; these wages are highly deserved by skilled woodsmen. The reduction in duty will prove generally advantageous to all lumber merchants who avail themselves of its benefits.
On the 5th of February last, at the Mount Royal Hotel in Montreal, a general convention of Canadian and American lumbermen met for the purpose of considering trade conditions and changes likely to occur as a result of the reciprocity agreement which, at the time, had been in force for thirty-five days. We asked a straight question to the American lumber merchants as to how they were affected by the treaty. The reply made by Mr. Kennedy, of New York, shows that the tariff reduction was in our favour. It enables us, he said to offer you $2 more per thousand feet; we are pleased with this lowering of the duty and we trust to be in a position to continue dealing with you.
Mr. Speaker, the general increase of $2 per thousand feet on approximately one billion feet of sawn lumber, which is the yearly cut of Canada, means for us a profit of $20,000,000. This tariff reduction alone, therefore, represents a substantial gain for Canada.
Some hon. members from the prairie provinces inform us that the cattle industry is the one that benefits most by this treaty; of that I am quite pleased. Two reductions alone, on cattle and on sawn lumber, will give us annual profits of over $40,000,000. Although they constitute the most important items, they nevertheless show how valuable to Canada the agreement is, without taking into consideration the numerous other items that will prove beneficial to us.
Some hon. members opposite seem to think that the treaty might have a detrimental effect on the prices of our vegetables, especially carrots, cabbages, etc. I may say that, on the contrary, these products have gone up i cent per pound since the treaty has been in force.
They also speak of imports of American farming implements which are likely to harm our Canadian industries. I do not think that these gentlemen are in earnest. In the manufacture of farm implements Canadian hardwood is used, which is partly imported from Canada and therefore becomes fairly costly in the United States, the freight amounting to $14 per thousand feet, to which is to be added a duty of $2. So, I fail to see how unfair competition can be waged by American factories.
As to our Canadian companies, they are in part, branches of American concerns located here and they know quite well how to look
after their own business in either country. Why then such prohibitive prices in Canada? I consider them unfair and detrimental to the purchasing power of our farmers. I note with a good deal of satisfaction that the government has arranged to investigate the increased prioes of farm implements manufactured by these companies; such an inquiry should produce excellent results and be of a great benefit to our farmers.
Mr. Speaker, I wish to congratulate the members of this house who, realizing the importance of this agreement, have given it their unreserved support, mindful as they were of the fact that for years past we have suffered great hardships. Had this agreement been approved in 1911, the depression we are now going through would not have been so severe. We suffered from overproduction while having at our very door, a market for our surplus production. We could have benefited by it had we concluded a trade agreement with the United States. No longer shall we have to deplore that grave error. Great advantages have already accrued from this agreement which has been in force only a short time ago. We may then rest assured that within five years this arrangement will prove to be a great boon to our people, while being helpful to our neighbours in the United States.
The right hon. leader of the opposition (Mr. Bennett) should support the measure and thus compensate to a certain extent the harmful effects of his five years of power, during which he sometimes wanted and sometimes did not want a reciprocal trade arrangement. Again, I wish to sincerely thank the right hon. the Prime Minister for the excellent work he has accomplished as well as for the splendid triumph he achieved on the 14th of October last.


Mr. A. M. EDWARDS (Waterloo South):: Mr. Speaker, I rather hesitate at this late hour of the debate to inject into it what I have to say with regard to this trade agreement. First I should like to take this opportunity to congratulate you, sir, and your deputy upon your appointment to the high office that has been conferred upon you. Having known you both for a considerable length of time in this house I feel perfectly safe in your hands.
I have listened with careful attention to the debate on this proposed trade agreement. It appears to me that the problem before us resolves itself largely into deciding whether on balance we are securing favourable treatment or whether we are paying too much for what we get. In other words, are we not dropping the substance for the



COPYRIGHT ACT

[Stage Direction]
The house resumed from Friday, February 28, consideration of the motion of Mr. Esling for the second reading of Bill No. 7, to amend the Copyright Amendment Act, 1931.
Mr. W. K. ESLING (Kootenay West):: The Secretary of State (Mr. Rinfret) has announced that he intends to bring down a bill to amend the Copyright Act and he has asked me to let this bill stand. I am quite agreeable, but I should like to know if he can indicate when his bill will be brought down.


Hon. FERNAND RINFRET (Secretary of State):: Mr. Speaker, I am hardly in order
in replying to the hon. gentleman because I
have spoken already to the motion for the second reading of this bill. However, with the permission of the house, I would say that I intend to bring down a bill within a very short time.
Motion stands.



CIVIL SERVICE ACT

[Stage Direction]
The house resumed from Friday, March 6, consideration of the motion of Mr. Boulanger for the second reading of Bill No. 9, to amend the Civil Service Act (vacancies, outside service, priority to returned soldiers.)
Louis Édouard Fernand Rinfret: Mr. Speaker, in rising to speak to the motion for the second reading of this bill, I desire first to congratulate the hon. member for Bellechasse (Mr. Boulanger), not so much upon bringing down the bill as upon the moderate way in which he has advanced his argument. This is a matter with which parliaments are faced from time to time. The Civil Service Act is a very complex and involved one. If hon. members will look back they will find that at regular intervals the governments of the day have been asked to review or amend the act. When I first came into the house in 1920 one of the first debates to which I listened was on this matter, and it has been coming up every three or four years since then. It might be noted that this matter is usually initiated by a member of the party in power, but I do not say that in any spirit of criticism; the motive for that appears quite natural.
There is in the act itself a spirit of amendment. The act leaves to the civil service commission the devising of regulations which are very extensive in scope. Under section 59 the commission has power to exempt a certain number of positions from the provisions of the act when it considers that those positions cannot be properly filled in the ordinary way. Section 59 reads:
In any case where the commission decides that it is not practicable nor in the public interest to apply this act to any position or positions, the commission may, with the approval of the governor in council, exclude such position or positions in whole or in part from the operation of the act, and make such regulations as are deemed advisable prescribing how such position or positions are to be dealt with.
That is a very important section and it shows without any doubt that there was in the minds of those who framed the act the belief that it could not be applied one hundred per cent; that a certain number of positions should, if necessary, be freed from its
Civil Service Act

operations. This being so, it is only natural that individual members, having a conception of their duties as such, should come before parliament from time to time with suggested amendments to the Civil Service Act. The former government amended the act in 19(32 rather extensively, and on previous occasions the act has been modified or changed by preceding governments, either by straight amendments or by making use of this section 59.
The hon. member who introduced this bill has been careful not to make it a partisan one. In presenting his argument he has been careful to quote from all parties and groups and he has shown conclusively that there has been constantly in the minds of hon. members an anxiety to improve the act from year to year. He has pronounced himself in favour of the merit system and in that respect we are with him; we all desire to maintain the merit system. I can go even further-and I believe hon. members will be with me on this-and say that we desire also to take away from the ordinary business of hon. members and ministers the necessity of having to provide positions in a wholesale manner and in that respect waste precious time that could be much better consecrated to work for the general good. I am reminded of a remark once made to me by a visitor who found my office rather full with callers. He told me that he thought if I were able to bring down in parliament a single measure for the general welfare of the public,
I would be doing more good and helping more people than by securing appointments for all those who called on me. Let there be no mistake as to how the government and I stand on this matter. We stand for the merit system and we wish to maintain it as much as we can.
However, I should like to quote a very eminent member of this house. When he was Prime Minister, the leader of the opposition (Mr. Bennett), dealing with a bill similar to this one in its general aspect, asked who was to determine merit. The act itself foresees that there may be cases where positions cannot be filled by examinations, where the appointments would have to be made in another manner. In an effort to maintain the principle of the act, one parliament after another has made an effort to improve it in certain of its particulars. Because the present bill is sweeping in character, I for one, and in the name of the government, would not suggest that the house should accept it in its present form. It is only fair to state that the civil service itself has been somewhat ill at ease over this bill. I could quote from many docu-

ments received from different associations of civil servants to show that there is no disposition on their part to accept the bill in its present form. I have before me a letter from the president of the Civil Service Federation of Canada, and I have also a clipping giving particulars of a long interview with the national secretary of the Amalgamated Civil Service of Canada. I could give many quotations-I shall not as that is not my purpose in rising to-night-to show that the civil service, and I believe a large portion of the public, are not satisfied with the bill as it is.
The bill deals with many different questions. It deals first with the outside service; then with returned men, not only those who served with the Canadian forces but those who served with the allied forces as well; it then deals with returned men who did not reside in Canada at the time of the war, with promotions and other matters. These are different questions that could form the subject matter of different bills, and there is a danger that if we should take action on this bill one way or the other, on the one hand we might be approving of too much, or, on the other, in disapproving of the bill as a whole we might be setting aside some of its features which seem more desirable. Having all that in mind, I would suggest that the house might pass the second reading of the bill with the understanding that it will be at once referred to a special committee for study, and I have such a motion before me. That committee would report during the course of the session, and I think the house would then be in a better position to judge of all the features of this bill. I therefore suggest that we adopt the bill on second reading so that I may move its reference to a special committee. I hope the hon. member in charge of the bill will be satisfied with that suggestion


Richard Bedford Bennett: Mr. Speaker, the adoption of the principle of this bill is the negation of everything that this house has declared for during a period of many years. I had assumed that probably some member representing the government would suggest that the bill be referred to a committee. That can be done only after the second reading; the second reading of this bill implies approval of the principle, and I regret that I find it impossible to accept the principle.
The first part of the bill is very simple, and the hon. gentleman who introduced the measure (Mr. Boulanger) took a considerable time to stress that part in order, I suggest, to make his references to the second part of the

Civil Service Act
bill a little easier. This was good tactics, but I do not think it served the purpose because it is quite clear that the aim of this bill is to restore patronage in every sense of the term. That is what it is, purely and simply, and we might as well face that fact.
Now, is this house prepared to go back to patronage? I am perfectly satisfied that fresh from the people the government of the day is besieged by members who desire that some Conservative in the civil service of the country should be removed and somebody else appointed in his place who was more given to support the government of the day. There is nothing new about that; it has been going on for a long time, and I suppose it will continue to go on for a very much longer time because human nature does not change just because there is a change of government. Human nature is much the same to-day as it was yesterday. I fancy that there are in Canada thousands of people who say that the late government did not do their duty in removing men who were violently Liberal and replacing them by Conservatives, but on examination we found that these men had discharged their duties, done their work in accordance with the rules and regulations, and had never interfered in politics, because if they did they were removed from office on the certificate of the member, or an investigation might be held if it were thought desirable. Now, are we prepared to go back to patronage or not?
The hon. gentleman quoted from some observations made by myself when his former bill was under consideration and referred to a committee of the house. I said that the question was; who was to determine merit? I asked that question because of a certain appointment that I had investigated that was made in a certain town between Winnipeg and the head of the lakes. It turned out in the final analysis that the question of the fitness of the man who was the successful applicant for the position was determined not by the civil service commission but rather by somebody on the ground who said, "Of the applicants, he is the best man."
Mr. BOULANGER; That is the general rule, if I may point out, so far as the outside service is concerned.


Richard Bedford Bennett: I am coming to that. I pointed that out to the civil service commission and to the committee which was subsequently appointed for the purpose of considering the matter. It was at once seen that some improvements should be made, and an improvement was made. In other words, the civil service commission accepted responsibility to a greater extent than it had theretofore done, so that some local person who was favourable to the appointment of a particular individual was not able to ensure his appointment regardless of other considerations.
As the matter stands to-day, there is a competitive examination, and there are, we will say, half a dozen candidates. As a result of the examination A is first, B second, then C, and possibly D. D, being a returned man, gets the preference and secures the position. The objection to including in the category of returned men those who have served in other branches of the service than the Canadian forces is not one about which I think the house would worry. I should fancy that most of us would realize that under present conditions the necessity that induced the framing of the law in the terms in which it was framed has largely disappeared and that possibly if the preference is rather for Canadians, those who enlisted in Canadian units, the difficulties would be overcome. But there are still other difficulties that arise in respect of men from other countries enlisting in our forces in the earlier stages of the war. However, I pass that by.
But when it comes to a question of taking the outside service entirely away from the commission and putting it into the hands of the government and the members of the House of Commons, that would in effect be providing that whenever there is a change of government there is a change in the outside service of this country. Stripped of everything-and we might as well look it fairly in the face-that is just what it means. For my part I cannot bring myself to believe that is the proper thing to do, and I do not believe any hon. member, calmly and quietly sitting down and considering this matter from the standpoint of Canada, will conclude that that is a desirable thing to do; nor do I believe many hon. members on second thought will regard it as desirable even in their own constituencies that that should be done.
There is a third class which is dealt with by this bill which introduces patronage perhaps in its worse form, and that is with respect to professional and technical appointees. It is provided in reality that the minister of the day of any particular department can remove anyone in that department he pleases, and, having removed him, can appoint whoever he pleases in his place, certifying that the person is qualified for the particular duties of the position. Now, under existing law the governor in council determines whether a man should be removed from office for cause; that is, the governor in council takes the final action. But this bill would substitute
Civil Service Act

for the governor in council the head of the department, the minister, and I do not believe, sir, there is any minister who desires to be charged with that responsibility. I know what the pressure would be; there is not a member of this house who does not know what it would be.
I go a step further. I turn to the last section of the bill on page 3, and although it is not within the rules to discuss the bill section by section when dealing with the principle on the second reading, it is quite clear that the only way in which the real significance of the proposed section 64 of the Civil Service Act can be appreciated by the house is to look at the section itself, which reads:
Professional and Technical Positions 64. (1) Whenever, in the opinion of the head of a department, or the deputy head, the knowledge and qualifications required for a position in the civil service are, wholly or in part, professional or technical, the commission, on the request in writing of the head of the department, may appoint to the said position a person mentioned in the said request-
In other words, the commission is then bound to appoint the person named by the minister. The section goes on:
*-provided the head of the department has stated in his request that the person recommended possesses the required knowledge and qualifications and is duly qualified as regards health, character and habits.
In one case that I know of where an effort was made to obtain the appointment, during the last five years, of a certain person, this was suggested as a very desirable way in which to accomplish it; that isj, that the appointment would still be made by the commission but that the minister would name the person to be appointed and he would be appointed forthwith by the commission. Now, are we prepared, sir, to do that? Is the house prepared to accept that principle?
I think I can speak with some degree of, shall I say, painful understanding of this matter, for if any man has suffered by reason of not yielding to that particular form of attack in connection with the civil service, that man was the head of the late government. The effort that was made to do away with what has been done during these years was very great, and it required a good deal of resistance on the part of members of the administration to thwart that effort. But why was it resisted? It would have been easy to introduce a bill such as this, have it passed through the house and thereby create a new patronage list for the outside service and professional technical men. Why

did we not do this, and why do I suggest that this government will not do it?
First of all, we are endeavouring slowly to build up in Canada a civil service of which we can be proud. This has been a slow process. If any hon. members look back to the days when this country was formally established, from 1870 down through the eighties and the early nineties, and realize how difficult a task it has been to try to get into the minds of the people themselves the desirability of having a civil service that would be permanent in their positions, of supplying some provision for their old age, and of making the service a career, they will realize that we have made real progress. Having made progress up to this point, to compare our civil service with that of Great Britain is very much to our own detriment, because there it has reached the point at which no member of the British House of Commons would think of suggesting appointments in connection with postmasterships and matters of that sort in his constituency. Somebody might casually mention it, but that is not a matter that members deal with; it is entirely out of their hands; they do not desire to deal with it. How are we going to create in Canada a similar state of public opinion to that which prevails in Great Britain in connection with their service? We can do this only by frowning down measures such as this.
To give second reading to this measure at this time means that I, from my place in this parliament, have approved of the principle of patronage being restored in Canada. That is what it means. I suggest to the hon. gentleman who has introduced the measure that, if he were to abandon the latter part of his bill-the two should never have been put together-and keep the first part, there is something which the committee might discuss fully and carefully, and upon which it might arrive at a conclusion, one that would be in the public interest to arrive at and report to this house upon. But to ask us now to approve this means that the committee can do nothing more than say yes or no to it. A committee that is set up by the house to consider this question must be a committee that is going to say: We must have patronage returned. That is what it means, and that is the reason I say that we ought to look at it fairly. Do not let us blind ourselves with any specious reasoning about the matter, because there is no getting away from what it means. A committee such as the Secretary of State (Mr. Rinfret) has suggested, if it were set up to deal with this bill, must of necessity say,

Civil Service Act
if we give the measure second reading: There will be a return to patronage in the outside service and the professional technical services of this country.


Mr. GRAY:: At what stage did the right hon. gentleman refer the Gagnon bill to a special committee?


Richard Bedford Bennett: At the very start of it, and the reason was obvious. I have already given the reason; I do not know whether the hon. gentleman has followed me. The Gagnon bill dealt with two problems. One of them was this: It dealt with the question of merit, and I undertook to point out why I was willing that the bill should go to a committee. The reason was that I was desirous to have it settled once and for all whether the civil service commission could divest itself of its responsibility by sending somebody off somewhere a thousand or twelve hundred miles from here to ask a question upon which the ultimate appointment would depend. We set ourselves against that as strongly as we could, not because it meant the return of patronage in the worst sense, but because it would be injurious and inimical to the interests of the service as a whole.
There is one way in which this matter might be dealt with. If the hon. gentleman would take the trouble to look up the proceedings-I have not looked up the debate since that occasion-we would be relieved from committing ourselves to a principle of the bill-


Mr. MACKENZIE (Vancouver):: Which was done on several occasions in the last five years.


Richard Bedford Bennett: Yes, but that was not what was before us.


Ross Wilfred Gray: That was said by the Secretary of State.


Richard Bedford Bennett: No; the Secretary of State did not say that; he said quite the opposite. This bill could easily be brought within the provisions of such a suggestion. As it stands now it. contains, as I say, two distinct principles, one of which is arguable and can easily be disposed of, the other of which will be disposed of ultimately in this house- this question whether or not we shall see a so-called return to patronage. By following this course the Secretary of State commits himself to no principle and relieves himself of any obligation. I know in how difficult a position a government is in regard to a question of this kind. I have been through the same difficulty. Do not think that I do not appreciate the position of members of the treasury benches with regard to this bill.
If the members of the house commit themselves to no principle, with the understanding that they are not in any sense agreeing to the return of patronage or to placing the outside service in the hands of members of parliament or of the administration, I am not going to embarrass the administration by pressing the question of the principle involved in the second reading. I think it would be very wrong for me to do so, because during the last five years, when we were hurrying legislation through, frequently-


Ian Alistair Mackenzie: If the
right hon. gentleman will allow me to interrupt, that very thing was done when the central bank bill went through the house. The . leader of the opposition at that time said that we were in favour of the principle of having a central bank, but not of the principle of private ownership, which was contained in that bill.


Richard Bedford Bennett: There was the wheat board bill; I recall several of them. But it was stated that, if it went to committee, there was to be no acceptance of the principle nor acquiescence in the principle. I can only say for myself-I cannot speak for others-that I have no desire to embarrass the administration, but I wish to make it abundantly clear as far as this bill is concerned that I am unalterably opposed to its principles, as I was in regard to the Gagnon bill. At that time I made it abundantly clear both in and outside the house that we were not prepared to return to patronage in the outside service, or to abandon the technical men to the ministers, or to leave the appointment of deputy ministers to the caprice of any minister, however eminent he might be. If the suggestion conduces to the orderly conduct of business, and the minister makes this point abundantly clear, I personally, though I cannot speak for anyone except myself, would agree.


Louis Édouard Fernand Rinfret: I desire to state that that is the very thing I had in mind. I tried to make it clear that we were not committing the house; that the house was not committed to the principle of the bill, but as some sections appear to be good, and others very debatable, I suggested as a means of understanding that the bill should go before a committee. I repeat again in the name of the government that there is no desire whatever to have the house committed to the principle of the bill except in so far as it is expedient to study further the matter of the civil service appointments.

Civil Service Act


Mr. C. G. MacNEIL (Vancouver North):: I am astonished and dismayed to learn from the remarks of the minister (Mr. Rinfret) and the sponsor of the bill (Mr. Boulanger) that the government is even willing to entertain the idea of a return to patronage.


Mr. CRERAR:: No; that is not right. That is not the case at all.
Mr. MacNEIL; As I read the bill, one section excludes from the jurisdiction of the commission the outside service; other sections deal with promotion within the service and the manner of appointment to professional and technical positions.


Thomas Alexander Crerar: The government has not
accepted this bill; let me make that clear to my hon. friend.


Charles Grant MacNeil: As I	understand	thematter, second reading of this bill would commit the	house	to the	principle of	thebill. As explained by the bill certainly the principle thereof is a return to patronage in so far as it affects the outside service, professional and technical appointments, promotions within the service -and dismissals from the service.	The	sponsor	of the bill	laidspecial emphasis upon the preference given former members of the allied forces. In that I think he	dealt	with a	point of minor
consequence. I find on consulting the records that in recent years comparatively few in this category have even attempted to claim the preference, and as I understand the situation, organizations of ex-service men would offer very little objection to some slight amendment in this regard. These organizations, however, are alarmed at this moment at the suggestion that the outside service should be removed from the jurisdiction of the Civil Service Act. Such a step would abolish the principle of competitive examination with regard to these appointments, and the preference formerly extended exservice men would not be applicable in anything like the same degree.
It is well known to those who have studied the statistics in this regard that under the patronage system ex-service men have not enjoyed the preference of which they have been assured by the government. I point out to hon. members that at this time, when Canada is faced with the grave problem of caring for physically handicapped men, for the government even to consider a step that would not give them the preference that enables them in a degree to overcome these physical handicaps, would leave little ground for an appeal to employing interests throughout the country to absorb at least

a small percentage of those disabled through war service.
I am not in the least misled by the phraseology of this bill. It is polite fiction to suggest that in all instances ministers should make these appointments. Recommendations actually are made by political patronage committees, and it has been the sad experience of ex-service men seeking, through local patronage committees, employment in the public service, that the preference of which they have been assured under the order in council governing same has not been extended to them as generously as has been the case under the provisions of the Civil Service Act. As. the bill is phrased it would work some injustice to quite a large number of men, because it suggests that those who had their domicile outside Canada when they enlisted should be excluded from the preference. It is a fact that some men with previous Canadian residence enlisted in the Canadian forces while abroad, and in my opinion they should not be excluded from the preference under the Civil Service Act.
It is true, as the hon. member for Belle-chasse (Mr. Boulanger) has suggested, that there appear in the estimates from time to time items providing for exemptions from the Civil Service Act, but it is noteworthy that in- many of these instances the departments concerned have not exercised the authority so obtained but have actually referred such appointments to the civil service commission for selection through competitive examination. I might refer to the appointment of inspectors for drawback claims under the Department of National Revenue. The department referred these appointments to the civil service commission and secured excellent results from competitive examinations. I believe also that a number of appointments in the Department of External Affairs were made in this manner with excellent results, even though authority previously had been obtained by the department to make the selection without reference _ to the civil service commission.
The sponsor of the bill made some reference to delays and levelled some criticism against the manner in which the civil service commission has made appointments. If we study carefully how step by step parliament has endeavoured to accomplish civil service reform, how step by step it has established throughout the public service of Canada the merit principle based upon competitive examinations and how step by step it has endeavoured to assure civil servants of some security of employment, we must agree that

Civil Service Act
it would be a serious, retrograde step at this time to abolish the merit principle to any degree and to place some 25,000 of these employees under the patronage system. I think it is not generally recognized that this bill would affect something like 25,000 employees of the outside service, and would abolish as far as they are concerned the assurances formerly given with regard to promotion on merit, dismissal only for good cause or for other than political reasons and so on, together with protection against appointments being made for purely political reasons. I suggest that at this time the proper step is to consider not the abolition of the merit principle but those steps that may be taken to improve and strengthen the facilities of the commission and to establish more definitely the merit system in appointments to the public service. Only in that way can that preference be assured which the country has generously extended to the ex-service men.
Some criticism was also directed against the commission with regard to their methods of conducting examinations. The sponsor of the bill stated that it was absurd to expect that three men could pass on all the applicants for any position in the civil service. It should be understood that the attempt is not made by three men to examine all these applicants. As a matter of fact, if we carefully analyze the work of the civil service commission we shall find that, to the extent that they have been provided with the necessary means, they have built up an expert examining staff. Provision has also been made for these examiners to visit various points in Canada to conduct either oral or written examinations. The manner in which improvement may be brought about is in the extension of these facilities rather than in their wholesale abolition as is suggested in this bill.
With regard to appointments to technical and professional positions, I think it is well to note that under the provisions of the Civil Service Act the commission from time to time has appointed advisory boards of experts, on which the departments have been represented. In this way departmental interests and the efficiency of the public service have been adequately safeguarded. I think if we take the long view of the situation we shall find that this procedure has resulted in the selection of the most competent men available for the positions and, in a very marked degree, has enhanced the efficiency of the public service.
Stripped of all its disguise, this bill suggests a return to the "spoils" system, and I am at a complete loss to understand why the government should even entertain a bill drafted in this form, definitely adopting the principle of patronage as applied to the out-12739- 60J
side service and definitely suggesting that political influence should dictate dismissals from the public service and the manner in which promotions should be made within the service. It would destroy for civil servants all semblance of permanency of employment, and would tend to drive away qualified young men by minimizing the attractiveness of a career within the public service. In my opinion this bill if adopted, even in principle on the second reading, spelling a return to patronage, would mean the undoing of the work of classification and organization which,, at a cost of thousands of dollars, has put the service on somewhat of a businesslike basis. It would suggest the creation of unnecessary but highly paid offices to satisfy the demands of political workers, the result being greatly increased expenditures which fall upon the shoulders of the taxpayers of the country. It would mean extravagant salaries, out of all proportion to the services rendered. It would mean an inefficient public service. The merit system not only attracts candidates of the best calibre for government positions, but also, by fair competition, selects the best available persons.
The bill, if adopted, would mean the abolition of the preference now accorded to returned soldiers in regard to government appointments. Ex-service men are not fooled in this regard. If appointments to the public service are made through patronage committees, no one is made aware of the positions to be filled except the favoured few who enjoy the good will of the party in power, and unless positions are widely and fairly advertised the preference to ex-service men is ineffective. The adoption of the patronage principle would be in every sense a retrograde step. In this connection it is interesting to note that even that powerful political organization in New York known as "Tammany" most definitely supports appointments by the merit system. Even the charwomen scrubbing the floors of the city hall must be certified by the civil service commission of that city.
Going back over the years I note that practically every parliamentary committer dealing with the matter of appointments ro the civil service has recommended that such appointments be based on merit only, and every one of those committees has definitely expressed opposition to the patronage system of appointments. It is recognized throughout the years that the efficiency of the public service clearly depends upon competitive examination of candidates and appointment by merit. It is interesting to note the history in this regard during the early years of cod
Civil Service Act

federation. As far back as 1877 a committee of this house stated:
The practice of making appointments by political patronage was considered by most of the witnesses to be bad both in principle and in results.... This system has been found to lead to great practical evils....
It was suggested at that time that recommendations for appointments should be by an independent commission. That is important evidence when we consider that it was given in the days when patronage was rife and when if at any time they were in a position to recognize any merits there might be in appointments under the patronage system.
Subsequently in 1881 a committee made some very definite recommendations against patronage and in favour of appointment by merit. This was done again in 1892 and in 1908. Then there is the report of a committee dealing with the Spinney bill, and later still the committee of which the late Hon. James Malcolm was chairman, who said:
Your committee is of opinion that the two fundamental principles of the Civil Service Act are the merit system and the system of appointment by competitive examination, and that both these principles must be preserved.
I have a note also of observations made more recently by our political leaders. Right Hon. Sir Robert Borden stated:
We must not shut our eyes to the abuses that have arisen and to the general denioraliza-tion in the public life of the country when the reward of office is regarded as a fair exercise of the party power.
We want in Canada a system of appointment by competitive examinations.
The Prime Minister (Mr. Mackenzie King) on a certain occasion stated that:
The whole purpose of civil service reform was to remove altogether the possibility of ministers acting in a partisan way. If a measure of this kind (the Spinney bill) is permitted to pass it is setting back in a very real and substantial way the efforts of the past few years in the direction of civil service reform.
Again on another occasion the Prime Minister, speaking against the Spinney bill, said:
It is a step entirely in the wrong direction.
On March 30, 1933, the Prime Minister, dealing with a suggested amendment to the act with regard to appointments to the penitentiary service said:
This resolution involves the introduction of a bill which means a departure from the merit system and a return to the discredited patronage system with respect to appointments in connection with the penitentiaries of our country. In a word, it will make political
(Mr. MacNeil.]
machines out of the penitentiaries, and I want therefore to take very strong exception, at the very outset, to the passage of this resolution.
Again on the same date he said:
Although there are certain distinct limitations with respect to the manner in which the civil service commission has operated, nevertheless if we weigh the advantages against the disadvantages, particularly in regard to the great majority of appointments, the argument would be wholly in favour of retaining the merit system and promotion under it, rather than introducing the old system of having appointments by patronage.
In view of all these recommendations of various parliamentary committees and these statements by the Prime Minister and others I find at very difficult to understand why the government should even entertain the suggestions in this bill. With some dismay I heard the remarks of the Secretary of State (Mr. Rinfret) this evening. There can be no doubt that the bill suggests a return to patronage with respect to some 25,000 to
30,000	appointments in the outside civil service. It deals largely with the Post Office Department and the customs service, large institutions which have achieved some efficiency because they have been freed in some degree at least from the interference of party politics.
For these reasons I find1 it impossible to support the bill on second reading.


James Shaver Woodsworth: The hon. member for Belle-chasse (Mr. Boulanger) has been very ingenious in the bills lie has introduced this year. In each case he has combined two separate bills. The first one was with regard to the post office services. I was in favour of one section of it, that referring to the possibility of doing away with the old tender system and having the carriers of mails paid on some regular basis. I think a good many of us were in favour of that aspect of the bill. But I have a suspicion that that was put in to cover up the other principle contained in the bill, that is the return to patronage, and some of us are so much opposed to the patronage system that we had to vote down the entire bill for that reason. We did not get a chance to discuss the first part which in my judgment was good.
Regarding the bill now before the house, the leader of the opposition (Mr. Bennett) said that the hon. member for Bellechasse the other night spent almost all his time discussing one particular phase of his bill, that is as to what particular class of returned men would come under the provisions of the measure. I myself think what the hon. mem-

Civil Service Act
ber for Bellechasse said had a great deal of merit. But it was only a little sugar-coating, as I think most hon. members recognized, in order that he might get away with the second part of the bill which is very vicious indeed. I am more than surprised that members of the Liberal party at large should countenance a bill of this kind. I think particularly of hon. members that I know from the west. I see the Minister of the Interior (Mr. Crerar); he is actually willing to concede the point and let this bill go to the committee. I am astonished that he should take such a position. I look at some other hon. members. I know there are certain members of the Liberal party who are willing to go to almost any length in reverting to the patronage system. I had hoped, however, that there would be a large number of hon. members of the Liberal party who would not under any conditions accede to any proposal of that kind.
When I saw the bill I thought probably it was just one of those bills which from time to time come before the house, and upon which a few private members have a chance to air their views and possibly to secure some publicity. I am disappointed indeed that the government, speaking through the Secretary of State (Mr. Rinfret), whose remarks were to some extent evidently endorsed by other hon. members of the cabinet, can possibly consider anything of the sort. I know there are one or two members of the cabinet who in the past as private members have unblushingly advocated a return to the patronage system. As a matter of fact I now see one of them smiling at me across the floor of the chamber. We rather admired the frankness of the hon. member for Quebec South (Mr. Power) who, while a private member, expressed such views. I submit, however, that he must now remember that as a member of the cabinet he occupies a different kind of position, and has responsibilities which as a private member he could not possibly have felt.
I take it that in advancing to any degree the passage of a bill of this sort the government assumes a decided responsibility. The right hon. the leader of the opposition has referred to that section dealing with professional and technical positions which, under the bill, would be given over to patronage. I should like to deal for a moment with the possibility of doing away with the control of the civil service commission over outside service. If that is good for the outside services it is just as good for the inside services.


Mr. BOULANGER:: Quite right.


James Shaver Woodsworth: The hon. member for Bellechasse (Mr. Boulanger) admits that. I take it that this bill represents the thin end of the wedge, and if it could possibly be passed this year-I think that is almost inconceivable -or if it could even receive consideration in committee this year, or next year, or at a later session, we would undoubtedly have another bill to do away with the control of the civil service commission over inside services. As a people are we prepared to take a retrograde step of that kind?
I confess that when I saw Liberals in this chamber holding such a large majority I became fearful that at this session, if not indeed for the whole parliament, we would have a stand-pat policy. I confess, however, that I did not realize that they would lend themselves to retrograde policies of this kind; I could not have conceived it. I think there are at least a certain number of hon. members in the Liberal party who have higher ideals for the future of their country.
Let me read section 49 as it stands to-day? The first part of it reads:
Promotion is a change from one class to another class with a higher maximum compensation, and vacancies shall be filled, as far as is consistent with the best interests of the civil service, by promotion.
Surely that principle is a good one.


Malcolm McLean: If it works.


James Shaver Woodsworth: Someone suggests, "If it works." I am aware that our civil service commission has not been as efficient as it should have been, and one reason, as we all know, is the pressure of hangers on who have continually been trying to undermine the commission. We know that. It has not been as efficient as it should have been.


Malcolm McLean: Is the fault not in the commission itself, and in its organization?


James Shaver Woodsworth: I think there have been faults in the commission, yes. One fault is the way in which appointments are made to the civil service commission. Very often people who are partisan in their points of view are appointed to that commission. That is one of the real difficulties.


Malcolm McLean: Does the hon.
member wish to leave in the hands of partisans the appointments of all civil servants in the dominion?


James Shaver Woodsworth: I say that one
difficulty has been that appointments to the civil service commission have too often been made as a reward of party service. But I
Civil Service Act

think it is quite possible that we may have appointments on some basis other than that of partisanship. If I may be allowed to mention one instance, I think our friend Mr. Bland is not partisan, but there are others who are. This has been one of the difficulties in the past. But if the personnel of the commission is not what it should be it is within the competence of the present parliament to see that we have better people on the civil service commission than there are at the present time or have been from time to time. There is no doubt about that. If the government does not feel itself capable of selecting any one who is non-partisan, I think some plan could be devised by which the house at large could make nominations, or whereby some body other than this house could make nominations in a non-partisan fashion. There are in Canada people who can be trusted to be fair. In times past that has not always been the case with regard to some members of civil service commissions.
Again, I quite frankly admit that in the conduct of its business the civil service commission has not always been efficient, but I do say that again and again to my knowledge they have been under considerable pressure from partisans outside the commission, and again and again we have had whole blocks of appointments taken outside the control of the commission, sometimes even with the nominal acquiescence of that commission. I should like to read another clause:
2.	Promotions shall be made for merit by the commission upon such examination, reports, tests, records, ratings or recommendations as the commission may by regulation prescribe.
In the bill these clauses are to be entirely swept away. Promotion by merit is a fundamental principle, but the suggestion is now made that about 25,000 people are no longer to be allowed promotion by merit but are to be promoted simply because such promotions suit the whim of some individuals who for the moment hold power.


Walter Edward Foster: The hour for private
and public bills having expired, we will revert to government orders.



CANADA-UNITED STATES TRADE AGREEMENT PROPOSED APPROVAL SUBJECT TO LEGISLATION MAKING PROVISIONS EFFECTIVE

[Stage Direction]
The house resumed consideration of the motion of Mr. Mackenzie King.
Alexander McKay Edwards: Mr. Speaker, when the house rose at six

o'clock I was discussing the tariff arrangements between Canada and the United States, and particularly their application to the production of furniture. I made the statement that many of the furniture manufacturing plants are located in the small towns and have developed as a result of years of thrift and hard work on the part of men of moderate means. This industry does not represent a great accumulation of capital. In many instances the furniture factories offer the only means of employment in certain municipalities.
May I place on record figures from the bureau of statistics indicating the importance of the industry. With the permission of the house I shall place on Hansard figures showing the number of employees in the industry:
Year-[DOT]
1924.
1925.
1926.
1927.
1928.
1929.
1930.
1931.
1932.
1933.
Employees
9,187
8,987
9,800
11,038
12,539
13,082
11,980
10,007
8.348
7,722
Index numbers of employment based on 1926 figures:
October 1
1930		
1931		
1932		
1933		
1934		
1935		
110.1
98.2
72.9 71.7
76.9
76.9
It will thus be seen that there has been a steady improvement in this industry. It is quite obvious that if a flood of furniture, made in the southern states under conditions not similar to those pertaining here, is allowed to come into this country, this would have a devastating effect upon the industry. It may be argued that we have nothing much to fear from the furniture industry in the southern states, but I should like to disabuse the minds of hon. members by quoting Representative Lambeth, who made a speech in the house of representatives on January 17, 1936. Speaking on this agreement, he is quoted on page 596 of the Congressional Record as follows:
The most important Canadian concessions to the United States provide for direct duty reductions on items named in what is known as schedule 1 of the agreement. The grant to the United States on all other commodities of the lowest rates now or heretofore paid by any non-British country in place of the higher general rates is commonly known as the most favoured nation rate.

Canada-UJi. Trade Agreement
Referring to the arbitrary valuations, he said:
The south was especially hard hit by this system. Of particular interest to my own state of North Carolina is the reduction of Canadian tariffs on furniture of 40 per cent. Before 1930 the United States shipped to Canada furniture in the value of $4,667,000. This has fallen to $471,000, or a 90 per cent decrease.
If this forty per cent discount in the tariff is invoked, there is nothing to prevent a return of those conditions which prevailed prior to 1930. It may be said that furniture prices are exceedingly high, but I should like to point out some facts that were brought out by the price spreads commission. As was explained the other day by the hon. member for East Kootenay (Mr. Stevens), whereas in 1926 there were 1,645 retail furniture dealers in Canada, by 1934 the number had been reduced to 1,157 largely through the elimination of the smaller dealers. The commission found that the monopolistic control of the large stores and chain units had placed the producers at the mercy of these fewer channels of distribution. I should like to point out that while wholesale prices were reduced substantially during _ the depression, retail prices did not follow suit. As a matter of fact the retail mark-up on furniture, which was formerly around sixty per cent, was brought up to 100 per cent to take care of the overhead costs of some of the larger places of distribution. The producers of furniture were exploited by the mass buyers and the consumer did not receive the advantage of the low wholesale prices. These facts were brought out before the commission and they can be verified by reference to the report.
In 1930 when the duty of thirty per cent was placed on furniture, the industry used principally native woods. Some mirrors were imported, mainly from within the empire, as well as a small amount of hardware. But conditions, have changed and the demand today is for a different type of furniture. Furniture sold in Canada to-day follows closely United States lines and as a result large quantities of lumber indigenous to the southern states have to be imported. It is also necessary to bring in high grade veneers and fancy hardware. All these items must be brought in under a substantial tariff barrier to enter into the composition of Canadian furniture. The style of furniture has changed very materially. In this country we suffer from what is known as a lag. In the United States they are from six to twelve months ahead of us in design, and in many cases
their discarded lines of furniture are thrown on the market at sacrifice prices. This forty per cent discount on the tariff rates on the discarded lines at reduced prices will prove a great hardship to the manufacturers of Canada. With the permission of the house I should like to place on Hansard figures showing importations of furniture from the United States for the last ten years. They are as follows:
1925..
1926.. 1927. .
1928..
1929..
1930..
1931..
1932..
1933..
1934..

It will be seen that in 1929 importations were valued at $4,136,410, but by 1934 these had been reduced to $475,232. During the period from 1926 to 1930 the importations became so large that the government of that day put into effect regulations which were really equivalent to a forty-two per cent duty. These regulations were put into effect by the Liberal government then in power. Furniture can be made in the southern states more cheaply than in Canada because of their close proximity to their woods, because of the cheaper labour available and the larger units of production. For many years the furniture trade in the United States has been unprofitable, as is shown by a table compiled by an association of accountants. This table, which I should like to place on Hansard, shows a drop from a profit from 3-42 per cent in 1928 to a loss of 6-90 per cent in 1934. The figures are as follows:
1928.	.	.	3.42	per	cent	profit on sales1929.	.	.	1.06	per	cent	profit on sales1930.	.	.	3.00	per	cent	loss on sales1931.	.	.	10.93	per	cent	loss on sales1932.	.	.	23.26	per	cent	loss on sales1933.	.	.	4.21	per	cent	loss on sales1934.	.	.	6.90	per	cent	loss on sales
This accountants' review of the industry in the United States shows clearly that the losses in the past five years have been sufficient .to wipe out the operating profits of the preceding five years. The result is that for a period of ten years the industry as a whole has operated at a loss of $1.63 for every $100 worth of furniture shipped. In the light of these facts it is quite evident that the slaughter of discontinued lines at heavy discounts has entailed severe losses, and it is the sale of these goods that has worked such havoc on the business of this country.

Canada-U\S. Trade Agreement
I should like to say a word or two about wages. During the years 1931 to 1935 this industry, in common with practically all others, suffered from a tremendous drop in values and a reduction in trade. These factors brought about conditions whereby over thirty factories were closed, wages were reduced to a low level and a se-ious shrinkage in the reserves of various plants took place. It was not the wish of the manufacturers to reduce wages, but the exigencies of the times compelled this action. In the spring of 1935 the Ontario government passed the Industrial Standards Act. The furniture industry was among the first to negotiate an agreement with their employees under the provisions of this act, and I am pleased to be able to say that this industry is now operating under an agreement between employees and employers based on this act. Progress is being made and the standards have been improved. Stabilization of wages has been of great value to the industry, and it is now on a sound basis.
Under the Collective Labour Agreements Extension Act of Quebec the furniture manufacturing industry of that province is now operating on a collective agreement basis. In British Columbia the industry is governed by minimum wage laws, but there is at the present time no legislation whatever governing minimum wage rates in the United States. As the manufacturing industry of Canada represents about fifty per cent of the value of production of the country, as pointed out by the hon. member for Danforth (Mr. Harris) at page 716 of Hansard of this session, surely the government should stop, look and listen before they interfere with the tariff on any industry without first having a thorough investigation.
I wish to make a few quotations from the report of the royal commission on price spreads with reference to the furniture industry. The commission says:
The physical volume of production is estimated to have decreased from 1930-1933 by forty-four per cent, as compared with a decrease of sixty per cent in sales value. Even wiiiie demand was normal, the productive capacity of the furniture industry was not well balanced, so that this sudden drop in volume necessitated adjustments of the most painful kind. Surprising reductions have been accomplished in the overhead expenses, which are estimated to have declined over forty per cent from 1930-1933, but in spite of these economies the struggle for survival resulted in a heavy reduction in the return to labour. It was pointed out that during the depression nearly every furniture factory in the country was threatened with losses which could lead only to bankruptcy, and the efforts of the individual operators to remain in business 
resulted in the reduction in the general level of furniture prices well below the cost of production.
This is another quotation from the commission's report:
A general adjustment in the price of nianu-iactured commodities was, of course, necessary ri*iVle7 business conditions, but there is little doubt that furniture prices have fallen more drastically than those of almost any other important industry.
The commission further says:
The industry is not dominated by any one company or group of companies and as a result of extreme competition, efforts to maintain proper margins during the past few years have been conspicuously unsuccessful.
And in conclusion:
In summary this industry presents an illustration of a completely disorganized body of producers, for the most part privately financed dominated by no one organization or group of companies.
Just to show the house how serious the situation of the furniture industry is, may I quote from an article by Mr. Mihell, published in the riding of my hon. friend from West Middlesex (Mr. Elliott), in The Strathroy Age-Dispatch, dated February 6, 1936:
H. Gordon Mihell, manager of the Middlesex Furniture Company, Limited, Strathroy, makers of bedroom, dining room and library furniture yesterday gave this journal a statement concerning the effect which the new lowered tariff on furniture is having on the Canadian industry.
I he article, after dealing with one or two other matters, proceeds:
Mr. Mihell says: "The lowering of the tariff on furniture from the United States will certainly curtail production in this country to a great extent. Operations in Canada are not large enough to compete against the large American interests operating in the states, particularly the southern states, where wages are extremely low and where the firms are located usually in the centre of large areas of natural resources."
The article concludes by quoting Mr. Mihell as follows:
Should this tariff remain unchanged, it will unquestionably necessitate curtailing our production, and this action will reflect back on our employees.
That I think is the exact position of the furniture industry, and I sincerely hope that before the government finally decides that this business will be subjected to a forty per cent decrease in the tariff, a thorough investigation will be made by the board that was set up for this particular purpose, namely, the tariff board, before which everyone who is interested can go and state his case, present the facts, and receive the judgment of the

Canada-V.S. Trade Agreement
board. But to adjust the tariff schedules relating to a particular industry without first making a proper investigation is an entirely different matter from having a scientific adjustment of the tariff, as we had hoped we would have when this tariff board was set up.
The greatest problem of the day in industry outside the problem of unemployment-of course, that is our worst, and anything that tends to aggravate the unemployment situation is certainly to be deplored-the greatest bugbear of the industrialists of this country to-day-and I have some knowledge of industry-is the instability of the tariff. Industry is never sure from year to year just what is going to happen with tariffs, and it would be splendid if the tariff were taken out of politics entirely, as it should be. It should not be a political matter at all. Everyone should have an opportunity to present his case before the tariff board, and if he can show proof that the tariff should be lowered, well and good, or if he can show proof that the tariff should be raised, an adjustment should be made accordingly. But to make these tariff changes just for the sake of getting votes, for that is what the situation boils down to, to throw the interests of an industry into the political maelstrom, and without any proper investigation, arbitrarily to alter the tariff with respect to any industry, is not the way to do business.
That is all I have to say on this subject at the moment, but when the items in the tariff schedules come before the house and the bill is under consideration I shall have something to say on other lines of industry. In the meantime I hope the government will seriously consider, when it comes to bring down the budget, making adjustments in the tariff that will be satisfactory to this industry and give it a chance of success.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, I have been deeply interested in the remarks of the hon. gentleman who has just taken his seat (Mr. Edwards). We have been sitting here quietly now for some time, listening to this discussion back and forth across the floor of the house, on high and low tariffs, and if there is one thing which it has abundantly proved to me it is this simple fact, that you cannot change the tariff either up or down in this country without hurting just about as many people as you help. I think it is tragic to have that brought so vividly to the attention of this group of 245 serious-minded Canadians who have come here to try to find a solution of the difficulties
which confront us, and to have that fact emphasized so many times.
One month ago I stood in my place in the house and said that I hoped that the promises which were either implied or definitely made either on the platform or through the press by the Liberal party during the campaign would be implemented in such a way that the credit of the dominion would be used for the benefit of the people. I visioned in that, Mr. Speaker, some sort of solution for the difficulties confronting us, but thus far I have seen nothing of the kind even hinted at in our proceedings up to date. We seem to have no thought of using our national credit to the advantage of this country. The fact that we take our tariffs so seriously has impressed me tremendously. When it is found that two men become exceedingly earnest over a question, so much so that each calls the other a liar and says that he is crazy and all that sort of thing, one can generally conclude that both are wrong and that the truth lies somewhere between them.
There are two parties here, made up of intelligent men; and may I, Mr. Speaker, express my appreciation of the type of men that we have in this parliament. I have great respect for them, on both sides; they are, on the whole, earnest, sincere men, anxious to do that which will help their country. To think that these men would be opposing each other with such vehemence over a matter like tariffs is to me a rather disagreeable thought. The truth lies somewhere between the two, or in some sort of adjustment.
This reminds me of a friend of mine who had periodically a serious attack of pains in the side of his face. Some of his friends knew something about doctoring, and they used to come in and say, "You must use this medicine, this ointment, this liniment; you must rub it in just right," all favouring external applications. He had some other friends who said, "No, take some herbs; take some internal remedies; take some drugs; they will cure you." And he tried first one set of remedies and then the other. Neither of them worked; and these men, evidently certain that a cure lay somewhere between the two, argued with each other and blamed each other for the patient's failure to recover. Each party listened to the other so much that gradually the men who believed in external applications began to think that maybe some medicine inside would help, and the men who believed in internal applications gradually came to believe that some liniment might
Canada-UJS. Trade Agreement

be useful. Finally there came a time when the advice of one side was almost like the advice of the other.
We have reached this point in the Dominion of Canada at present. The two parties have modified their views until they almost exactly resemble one another. One advocates internal treatment and the other external treatment, neither being able to cure the patient. This man finally got into a distracted condition, just as Canada is getting into the same state, and he went to a chiropractor who, after giving him an examination, discovered that there was a dislocation in the cervical vertebra of this man's neck; he adjusted it, and the patient recovered.
I fancy that some sort of adjustment is needed in this our economic body in order that it may recover. I wonder what sort of adjustment is necessary. I believe the serious consideration of parliament should be directed to this question of adjustment. I have become convinced, whether other members of the house share these views or not, that a cure does not lie in either of these two treatments. I am very much in sympathy with the remark of the hon. gentleman who just sat down that if there is a truth regarding tariffs-and we will all grant there must be

that truth should be discovered by experts and not by partisans arguing with each other out on the hustings, through the press, each one a little less informed about the truth of the matter than the other and arriving nowhere.
In my own constituency I find some very striking illustrations of the truth of the opinion that tariffs counteract each other. There are a number of people in the constituency who produce fruit. If we cut down materially the duties on fruit and let it in free to Alberta, two-thirds or three-fourths of my constituents will be very happy, but the rest of my constituents *who raise fruit will be ruined. That is a serious matter.
Again, in my constituency there are two sugar factories. If we should raise the duty on sugar a little higher this would help tremendously the men engaged in the industry of beet raising, but if we did that we should hurt terribly all the people who have to buy sugar. I do not know where you could go, Mr. Speaker, to discover a better illustration of what tariffs do and do not do than in that one little constituency of mine. I think it is probably typical of the whole Dominion of Canada. And I am prepared to ask, in all seriousness and earnestness, and with a cooperative spirit: Do you suppose that there is in Canada any tariff 
that- does not hurt pretty well as much as it helps?
The nature of our problem has been pretty well developed by speakers on both sides of the house. I think everybody recognizes clearly this simple fact, that our task is to restore internal purchasing power to the hands of the people. The question is, how to get it there. Will trade do this? It is true that if we protect a given industry, the people employed in it will undoubtedly have added purchasing power put into their hands through the development of that industry. But if we protect that industry we hurt another; we take purchasing power out of the hands of people over here and put it into the hands of people over there. And the question is: Is that going to do any good in the long run? All that it does is to set one section of Canada against another. Really I cannot see, looking back over the last twenty years, that it has done very much except that.
Then, does trade necessarily increase or decrease purchasing power? Let us, as intelligent men and women, ask ourselves that question seriously. If you will pardon another reference to my constituency, there are in it two little towns; one is Raymond, the town in which I live and which is deeply interested in sugar manufacturing. Thirty miles away is another town, Coalhurst, which is primarily interested in the development of the coal industry. Years ago, when many more men worked in the sugar industry than now, since machines have displaced men, and when many more men worked in the coal industry than now, for the same reason, there was some advantage in trading coal for sugar. But to-day, when machines have largely displaced men, and purchasing power is not going into the hands of men and women, it does exceedingly little good to trade Raymond sugar over to Coalhurst for Coalhurst coal, because most of the people of Raymond have not the purchasing power to buy the sugar they need, and what is the good of trading sugar for coal, when Raymond people could not buy the coal when it was shipped to them? Now, if there were a tariff barrier between the two communities, and governments were able to put a tax through tariffs on the passage of sugar and coal from one town to the other, you might say that there would be some advantage to the governments, because it would give them an excuse for imposing taxation. Also if there were a railroad between the two places and money could be made by operating it, you might say that some purchasing power -would result; but that is

Canada-U.S. Trade Agreement
about all the advantage I can see that could accrue from that form of trade. I am open to be convinced on this matter, but it will take more than has appeared here in the last five or six days, because the arguments have been entirely aside from the real point at issue. If there is this tremendous advantage in tariffs, surely someone should have found it out during these many years, and we should have appointed, long ago, a tariff commission of experts to settle this matter once and for all and have taken it out of party politics.
The next question is, even granting that trade gives one increase of purchasing power: Is there any chance of materially increasing trade? When you remember that there are 1,250,000 people on relief in the Dominion of Canada, with hundreds of thousands of people out of work, your problem is going to be this, to find such lucrative avenues of trade as will give you sufficient purchasing power to take these people off relief and put them to work. You will then have to increase your trade to a most astonishing degree. I doubt seriously if you have any chance of increasing your trade anywhere near enough to accomplish that end.
In the first place, what caused this thing called economic nationalism? Why have the nations raised these tariff barriers? Why did they discontinue freer trade? We are all, or a great many of us, worshipping at the feet of trade, dreaming of the time when we can get back the Dunning budget and things like that which are going to be panaceas for us. WThy did we ever depart from these advantageous ways? We can get some sort of idea by reading this little excerpt from which I quoted the last time I addressed the house. It is in the Times trade and engineering supplement, under date of Saturday, December 17, 1932. I read it because it indicates why nations in the first place began to limit trade:
If each nation gave to its own people full internal purchasing power, i.e., ability to absorb its own production, none would have any objection to exporting 10, 20 or 50 per cent of that production, and receiving imports of a similar value; it is because each has insufficient purchasing power internally to absorb its own production that each is anxious to export and unwilling to import.
There is the difficulty. If lack of purchasing power caused the nations to put up tariff barriers, how will you, merely by lowering the tariff barriers, increase that internal purchasing power? It hardly looks reasonable, does it? Again there is this difficulty among the nations, that they all have a great need of self-sufficiency. Just here at this point I should like to read an excerpt from an editorial
appearing in the Ottawa Citizen. I am going to throw the blame entirely on these newspapers instead of taking any myself. I quote from the Ottawa Citizen of Tuesday, March 3, 1936, which is rather recent:
In 1929, Germany imported nearly forty per cent of the wheat it consumed. In 1934 the imports had been reduced to about ten per cent.
It is one of the planks in the Nazi platform to seek German "self-sufficiency."
Will the mere lowering of our tariffs cause Germany to change that policy? I continue reading the editorial:
Nor is the self-sufficiency policy in wheat confined to Germany. Italy, France and Great Britain have adopted policies along similar lines and are concentrating on "saving agriculture" and making their people self-supporting in the matter of food. Other nations are engaged to the same purpose, and that is the chief reason why Canadian wheat exports are not what they once were.
So those who are so free in laying the blame entirely on the right hon. leader of the opposition (Mr. Bennett) might do well to read very seriously that passage in a good Liberal newspaper. Has the need for self-sufficiency changed? I submit that it becomes greater all the time because of the close proximity of war.
The next point is that every nation needs a favourable trade balance. I was much impressed, sir, with the remarks made so earnestly by the right hon. leader of the opposition when he pointed out that one of the dangers arising out of this trade agreement would be that in the course of a few years we might build up against ourselves an unfavourable trade balance by buying from the United States more goods than we could sell to that country, thereby placing ourselves in a difficulty from which it would take us years and years to extricate ourselves. The right hon. gentleman knows exactly how serious that matter is, because he was placed right in that position. There are many nations on the face of the earth that have found themselves in that difficulty; one of the greatest of these is Japan. Japan discovered that she had a very large unfavourable trade balance. It is a rule of the present economic system that a nation must sell more goods than it buys. Honestly, Mr. Speaker, if you have fifty-four nations in the world, each one trying to sell more than it buys, have you a possible situation at all? I submit that you have a thoroughly impossible situation. This is what gives rise to intense international rivalry over trade and thereby to war, and under the present system it is utterly impossible to avoid that situation. Japan realized very clearly that she had to reduce that unfavour-
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able trade balance, and that is exactly the reason why Japan is encroaching so seriously upon our markets, underselling Great Britain right under her nose. I should like to quote some statements which appeared in the Ottawa Citizen of February 10, 1936-*


Mr. DUPUIS:: The same good Liberal
newspaper.


John Horne Blackmore: in an article entitled: Japan Sets New Records, from the Christian Science Monitor. I notice some hon. member says that this is the same Liberal newspaper. I hope he heard me say that it was taken from the Christian Science Monitor, which no one would accuse of being a Liberal newspaper:
Japan's advance in commerce and industry proceeded steadily throughout the year 1935, and several new records were established in trade and production....
These facts cannot be challenged.
Figures up to December' 25th reveal exports amounting to 2,547,625,000 yen, and imports of
2.566.762.000	yen. Almost an even balance of trade was achieved ....
That is, after underselling the nations of the world and taking away our markets left and right, Japan has not yet arrived at an even trade balance. In other words, she has not yet begun to cut down that unfavourable balance. What will she do in order to achieve that end? She must cut down that unfavourable trade balance, or she faces extinction as a nation.
.. the excess of imports amounting to only
19.137.000	yen, a reduction of 103,932,000 yen by comparison with the corresponding figure in
1934..	.. Japan led the world in rayon production during 1935 with an output of
224.042.000	pounds, as against America's
210.000.	000 pounds. By exporting 2,711,265,000 square metres of cotton cloth at a value of
491.458.000	yen Japan set all time records, both in volume and value. While Japan's main exports are cotton and silk goods, raw silk, rubber goods, canned food stuffs, bicycles, and a host of miscellaneous goods, the advance of the country's heavy industries should not be overlooked.
Like the Soviet union, Japan is going through a process of thoroughgoing industrialization. In 1932, Japan's imports under the general heading of machinery were more than five times greater than its exports. Now exports of machinery are about two-thirds of the imports. Japan is successfully competing with Great Britain not only in textiles but in textile machinery....
Japan is shipping abroad about ten times as many looms as it is purchasing abroad. Japan exported 539 motor cars in the first eleven months of 1935, as against 349 in the corresponding month of 1934. Exports of railway locomotives, railway cars and accessories during the first nine months of 1935 were valued at 20,000,000 yen. These figures are insignificant in themselves; but they point to Japan's [Mr. Blackmore.l
probable future role as a purveyor of industrial and railway machinery, rolling stock and equipment for Asiatic countries.
I submit that in almost every one of those items Japan is competing with Canada for trade. My time will hardly permit me to give a number of other figures I have prepared, but I should like to mention a statement which I have taken from the Western Producer of July 11, 1935:
The Filipinos are gliding on the streets of Manila on bicycles made in Japan and sold in the Philippines at $5.65 each.
How are we going to beat that?
Russia has always been an importer of newsprint, cement and agricultural implements.
In 1934, Russia exported $36,000,000 worth of tractors, ploughs, mowing machines and other agricultural implements.
Again competing with Canada.
Russia no longer imports cement or paper and may at any time in the near future become an exporter to the world of these products.
Russia to-day is the largest producer in the world of plywood and the second largest in the world in the production of oil and pig iron____
She is competing with Canada in each of those items.
With Japan exporting lead pencils, matches, electric lamp bulbs, automobile tires, rubber boots, bathing suits, silk shirts, and stockings, along with a choice collection of rayon goods, toys, steel pipe, automobiles, bicycles, and even jackets for our "hot dogs," it behooves us to forget the open door in any other part of the world and to open the door to greater purchasing power at home.
That, Mr. Speaker, is exactly the contention I believe we all must be ready to support and take very seriously to heart. There are other extracts I should like to read, but I have not time to go into them all; they all point to the very rapid development of Japan and Russia in the export trade of the world, where they are coming into direct conflict with us.
The next point which I think we need to consider seriously is this: Is there any chance of recovering this trade? Let me read to you, Mr. Speaker, an extract from The Agricultural Situation and Outlook, published by the Department of Agriculture and the Department of Trade and Commerce in 1936. Let us mark these things very carefully and see what chance we have in this situation.
Agricultural protection in Europe has been increasing since 1925-
That was back in the days of the good old Liberal administration.
-and one of the characteristics of the depression has been the continuous narrowing of the free market open to exports of farm produce.

Canada-U.S. Trade Agreement
A summary of the increases in duties alone would be misleading as to the importance of restrictive measures, because the institution of quotas, milling regulations, import monopolies, licensing systems, and exchange controls operates even more effectively to cut off imports. The wide adoption of these barriers to trade was brought out by the Swedish publication Index, of February, 1935, in which it was shown that state trading monopolies were employed by two countries, import monopolies by seventeen, import licences by twenty-seven, import quotas by twenty-seven, export licences by thirteen, export quotas by sixteen, export subsidies by fourteen and exchange controls by thirty-six countries.
I submit that if the Liberal administration, or all of us working together, hope to solve the hopeless economic situation that exists in Canada to-day and put the unemployed to work by materially increasing our trade, against a situation like that, we have an optimism that is not justified.
Let me read something more, which is rather interesting as coming from the Secretary of the Treasury of the Roosevelt administration. I have always been impressed during the last two or three years by the fact that if there was anything to be gained in the way of export markets, the United States, having the great advantages that they have, and certainly being ready to go after any advantage that can be gained, would have obtained those markets. Now we find Mr. Morgenthau in a radio address on May 13, 1935, using the following words, which I submit should give us serious thought:
In estimating our foreign trade in relation to our monetary policy, we may as well face the question whether we wish to sell abroad vast quantities of goods that the buyers cannot pay for, unless we lend them the money.
Those few words contain a very large meaning. That is the conclusion that this man has come to after a trial of both the blasting policy and the other policy.
Hon. members may ask me: What is your solution? It is not my purpose to-night to state the solution. At present I am discussing this proposal that so many hon. members seem to think offers a solution. I maintain, as two hon. members from our group have already maintained, that this matter of tariffs is neither here nor there; it simply does not make any serious difference to the situation. It is all right for us to work for an increase of trade, but to delude ourselves into thinking that is the way to solve our problems is altogether unbecoming to intelligent men and women. Let me read an extract from an article in Harper's Monthly for January, 1936, called The Fallacy of Conquest, written by Nathaniel Peffer. It may be that this man does not
know what he is talking about, but he writes as though he does. He closes his article with this remarkable statement:
For a way out of the economic dilemma it is better to turn back into ourselves-
That is the stand of the Conservative party.
-reexamine our economic premises, and make the fundamental changes which are called for by the fact that the first epoch in the age of mechanization has irrevocably gone. The outlets must be found by reorganization at home, by making it possible for the disinherited at home to buy the goods we have hitherto counted on the heathen in the back woods to pay for.
At some later time I shall take the opportunity, if I am permitted, to say something about the sort of readjustment that, as I see it, should be made.


Hon. J. E. LAWSON (York South):: I
trust, Mr. Speaker, that my friend the hon. member for Lethbridge (Mr. Blackmore) will not consider it unbecoming or unintelligent on my part if I do not on this occasion attempt to deal with the argument which he has advanced. My time is limited, and rather than endeavour to deal with the question whether or not increase of trade offers a solution for our economic problems I shall confine myself to a consideration of the particular trade pact which is now before the house.
Prior to the introduction of the resolution to approve the Canada-United States trade pact, I had anticipated that the government would come forward with the proposed agreement, point out its benefits and advantages to Canada, and on that basis ask its adoption. But that course has not been pursued. Some private members supporting the government have outlined some of the particular sectional benefits which they hope will accrue to some electors whom they represent. The government itself as represented by the Prime Minister (Mr. Mackenzie King) and the Minister of Finance (Mr. Dunning) in their addresses have asked the adoption of this agreement on three grounds: First, that no one other than the Liberal party and the present Prime Minister could have made a trade agreement with the United States; second, that the former government through its Prime Minister offered to make an agreement in the same terms or practically the same terms, and therefore members of this party are estopped from opposing this agreement; and, third, that the government and those who support the trade agreement are actuated by pure motives and good intentions.
With respect to the first ground, that no one other than the present Prime Minister
Canada-UJS. Trade Agreement

and the Liberal party could have made a trade agreement with the United States, it seems to me that the history of trade agreements and trade negotiations with the United States, outlined by the Prime Minister and subsequently by the leader of the opposition (Mr. Bennett) clearly demonstrated how untenable is the statement of the Prime Minister to which I have referred. From long before I was born down to 1932 or 1933 the United States have been selling to Canada vast quantities and values of goods far in excess of what we were selling to them, resulting in heavy adverse trade balances annually. They were selling to. us manufactured or partly manufactured goods, and we in the main were selling to them raw or partly processed raw material. Despite that favourable trade balance to the United States, they in 1922 raised their tariffs against our comparatively small exports to that country. Why? I hope I do not give offence to our American neighbours when I answer my own question:	It was because the United States
have been the most aggressive exporting nation in the *world, while at the same time they have endeavoured to restrict imports as far as possible.
In the face of the Fordney-McCumber tariff of 1922 we did nothing. For eight long years we did nothing. Every time a proposal to increase tariffs against the United States came before the house the then government, led by the present Prime Minister, took the attitude that we in Canada should not retaliate. We were told, "Do not let us provoke Washington." Now I ask:	Why not
provoke Washington? The question was asked then, and I think I correctly interpret the answer which was given by that government through the present Prime Minister when I say that the answer was: Do not let us retaliate or provoke Washington, because if we do they may remove from their free list some of Canada's products which are now going into that country. This is just the same bogey as is offered us to-day as a reason why we should make the vast concessions that we are asked to make in the present trade agreement. Eight long years of non-provocative action did not result in any reductions in the United States tariff against us, nor any suggestions from that country that a trade agreement should be made between Canada and the United States.
In 1930, just before the election, the United States further increased their tariffs against Canada and raised further barriers against Canadian producers. In July of 1930 there was an election, and in August of that year

the Conservative party took office. In the fall a special session was called, and at that session some items in our general tariff were increased against all countries, including the United States. In the sessions of 1931 and 1932 there were further increases in our general tariff against all countries, including the United States. Was that provocative action? From the point of view of Liberals, they would say that it was provocative action. Did the United States then increase their tariff against us? They did not. Then, in 1932 the imperial trade agreements were negotiated by the Conservative government led by the present leader of the opposition.
The increases in our tariff of 1930, 1931 and 1932 impeded the flow of United States manufactured products into Canada, but the empire trade agreements made provision whereby part of that which United States interests had been exporting to Canada was supplied by the British empire. Then, and then only, for the first time was there talk from Washington about a trade agreement with Canada; then, and then only, for the first time did the American press carry reports suggesting that a trade agreement be made with Canada. This was caused, I submit, by pressure upon the Washington government from vast industrial interests in the United States whose export trade to this country was being transferred to the United Kingdom and other parts of the British empire. With that background to the picture I leave it to the judgment of this country as to whether the present Prime Minister or the present leader of the opposition, if both gentlemen were willing to make an agreement on practically the same basis, should be painted in the foreground as the person most likely to get a trade pact with the United States. I submit the statement that only the present Prime Minister could have concluded an agreement is but a vain boast.
I now turn to the allegation that the former government offered practically the same terms as those now embodied in the trade agreement, an allegation based upon a letter dated November 14, 1934, written by the Canadian Minister to the Secretary of State for the United States. To parts of that letter I shall refer, but as it has been read in the house I shall not repeat the whole of it. This letter, which has been called the basis of negotiations, suggested concessions which might be made mutually by each country, and then suggested further concessions in addition to those which were mutual which should be made by the United States.
Paragraph (c) stipulated a reduction by fifty per cent of the existing United States

Canada-U.S. Trade Agreement
rates of duty, as authorized by the Tariff Act of 1934, on a specified number of natural products, including, among other things, lumber, fish, potatoes, milk and cream, live cattle, a number of other agricultural products, and several minerals both metallic and non-metallic. One need only examine the schedules of the present agreement to see that there has not been a fifty per cent reduction in the items specified, much less those included in the general words of that section.
Turning to paragraph (d), in the basis for negotiations we find provision for a reduction of the existing rates of duty by the United States on a number of partly or wholly manufactured products of Canada- and I pause to emphasize the words "partly or wholly manufactured products of Canada'''-including some processed natural products and other items referred to therein. [DOT]
As I said, the agreement before us does not give a fifty per cent reduction as specified in paragraph (c), except in respect of some few items, and we have not received the reductions with respect to the partly manufactured or processed articles to which reference is made in paragraph (d). I should like to ask where in the basis of negotiations there was any suggestion that Canada should forego her right to fix fair market values under section 36, subsection 2, and section 43 of the Customs Act, or where there was any suggestion that we should be restricted in fixing the rate of discount under section 37. There was not a suggestion. It is true that in a letter of December 27, 1934, written by the Secretary of State of the United States to the Canadian Minister, the Secretary of State said:
I suggest that to the proposed outline of discussion-
Outline of discussion.
*-there be added the question of methods of determining the value of merchandise for duty purposes in either country, a matter which I consider of importance in the proposed negotiations.
But where, sir, I ask you, was there any such provision in the basis of negotiations, or where is there any record that the former Prime Minister would have agreed to or considered the concessions asked? Then, I ask: Where is there any provision in the basis of negotiations for concessions made by the present Prime Minister in the trade agreement containing a provision such as he has included in a letter written by the Canadian Legation to the Secretary of State for the United States, concurrently with the execution of this agreement, in which in clause (d) it is
agreed that in interpreting the words "of a class or kind made or produced in Canada" provision will be made to make it clear that the phrase "made or produced in Canada" in this context means "made or produced in Canada in commercial quantities." That letter does not clearly define what is meant by "made or produced in commercial quantities." But if we have reference to the notes exchanged between the government of Canada and that of Japan almost concurrently with the letter to which I have just referred we find there a definition, because in item 1 of the letter of December 26, 1935, we find the statement that "the classification 'goods of a class or kind made or produced in C anada, as it appears in the customs tariff, will be restricted to goods which are of a class or kind made or produced in Canada in quantities sufficient to supply at least ten per cent of the normal Canadian consumption." The provisions contained in that letter which was signed concurrently with the trade agreement are just as effective, so far as they affect industry and the people of this country, as though they had been made a term of the agreement.
Find me in the basis of negotiations any suggestion of limiting our exports to the United States as to kind, such as the limitations in this trade agreement upon our exports of cod and haddock to the United States. It does seem to me that when as a necessary incident to the granting of the favoured nation treatment to the United States they obtained the benefit of direct shipment, thereby injuriously affecting our maritime ports, the government at least might have insisted upon some quid pro quo-although that expression is not liked by a lot of our Liberal friends-for those in the maritime provinces who were going to suffer.
Find me in the basis of negotiations any suggestions that Canada's exports to the United States should be limited to tiny percentages of the normal American consumption, such as the provision in this agreement with respect to cattle. How can it be said that this agreement is substantially the same as was proposed in the basis of negotiations?
If I were required to summarize the difference between this agreement and the proposals contained in the basis of negotiations of November 14, 1934. I would do so with one word-"Jobs"-" Jobs for our people in Canada." The basis of negotiations would have preserved the jobs of those now employed. The trade agreement as presented to the house will in my opinion-I hope to refer to this a little later-destroy some jobs which are now in existence. In my opinion the basis of negotiations would have created jobs

Canada-UJS. Trade Agreement
for some of our unemployed. In my opinion the present agreement will not on balance serve that purpose.


An hon. MEMBER:: Explain.


James Earl Lawson: I will before I get through; just restrain yourself for a moment.
I come now to the third point: Pure motives and good intentions, as emphasized by my genial friend, the Minister of Finance (Mr. Dunning). The minister conceded, even to those of us who might oppose this agreement, pure motives and good intentions. I do likewise to all. I do not impute to the government that made this agreement a lack of good intentions, but at the same time I am ever mindful that it has been tritely said, "The road to hell is paved with good intentions." No trade agreement would be negotiated by the government of any country in the world if that government did not hope that it would bring some benefit to their country. In my opinion this agreement will unquestionably bring some benefit to Canada. I can readily appreciate that it may bring some immediate benefits to certain of the farmers of this country, but I do say that it will not bring any lasting benefits to the farmers because such benefits cannot be obtained from any mere trade agreement so long as the purchasing power of this dominion is so tremendously reduced by unemployment. There has been expressed in this house a thought which I think will bear repetition, that the finest market the Canadian mixed farmer will ever have is the hungry mouth of the urban and suburban worker, provided that he and his fellow workers have jobs and full pay envelopes. Unquestionably this agreement will bring some benefits, but in arriving at a conclusion as to its usefulness we must balance the detriments against the benefits. On balance, I, for one, find it wanting.
The two most important problems facing Canada, outside the field of pure finance, is finding markets for the disposition of our great surplus of wheat at a price which will bring something like a reasonable return to the growers, and finding jobs for our unemployed. When we realize that 82-9 per cent of our agricultural production is consumed in this country; when we realize that in 1929 Canada imported from the United States 68-6 per cent of all imports, imports which by far exceeded our exports to that country; when we realize that more than fifty per cent of our population to-day is not upon the farms but is in the cities and suburbs, it must be apparent to all that the primary purpose of any trade agreement which is to bring great benefit to this dominion should be not to make tariff reductions which

would cause more unemployment, but to try to get for our exports tariff reductions which would aid unemployment. I cannot see where this trade agreement fulfils that necessity. True, it may create some employment in the lumbering industry; true, it may create a few more jobs in the fishing industry, but where is there any provision in the agreement that is going to provide more jobs in the manufacturing industry of this country?
For example, consider our printing industry. A term of this trade agreement which was not even considered in the basis of negotiations is that the tax on advertising in magazines printed in the United States shall be repealed. Do we realize that the printing of American magazines in Canada because of that tax on advertising resulted in an expenditure of $800,000 in the printing industry and brought in through taxes a revenue of $600,000? Do we realize that of that $800,000 which was spent in the printing industry, $320,000 was paid in printer's wages? Do we realize that already 320 members of the printers' union in this country have lost their jobs? By no means have all the American magazines yet taken their printing back to the United States, but they are doing so. Is that providing more employment or losing it? Take the factories manufacturing radio cabinets and equipment for radio. They have let out their employees by hundreds; I am sorry I cannot give the figures. The Minister of Finance, when this question was raised, said: Oh, but the factories that are closing are American concerns with branch factories in this country. Well, Mr. Speaker, does it make one iota of difference whether it is a branch of an American concern or not so long as it is giving jobs to Canadian workers in Canadian factories?


Mr. DUNNING:: If my hon. friend will
permit me, he did not quote me fully, and consequently not correctly.


James Earl Lawson: I regret exceedingly that
I have not the hon. gentleman's words before me, but I assure you, Mr. Speaker, that I accept any correction he desires to make.


Charles Avery Dunning: I added something
beyond what my hon. friend quoted, which changes the sense of it entirely.


James Earl Lawson: I am sorry if I have misquoted the hon. gentleman, and if I have a moment left at the end of my remarks I shall come back to that.
American statistics show that there are 1,800 United States branch factories in Canada, with an invested capital of some $4,000,000,000, and I say to you, Mr. Speaker, and to the house, that the vast bulk of

Canada-U-S. Trade Agreement
those branch factories were' brought to this country by Conservative protectionist policy under Conservative governments. Now I ask: Does anyone think that Canada as a whole can get any new industries so long as an industry in this country cannot secure the benefits of the special provisions of our tariff laws for goods of a class or kind made in Canada until their production equals ten per cent of Canadian consumption? How on earth will they ever get started under those conditions? Obviously they cannot start with a ten per cent production, and so they are going to have a greater handicap against them in their infant stages than when they have learned to walk and have reached a ten per cent production. I say to the house that the detriments of this trade agreement are not only that it fails on balance to create jobs, but I fear that it will cause a loss of jobs to many now employed, and therefore, because the detriments outweigh the advantages, I shall vote against the agreement.
Now that I have a moment or two left I want to refer to some of the statements that have been made by hon. members in this debate. More than one hon. member who has spoken in support of this agreement accused the Conservative party of following a doctrine of economic nationalism, and even when I enunciate that now, they applaud. They alleged that this trade agreement would be the end of economic nationalism. Well, economic nationalism, as I understand it, is a national opinion on the part of the people in any one country that they should preserve their own domestic market for any products that can be made in their own country, and at the same time unload their exports on other countries of the world. No one realizes better than I do. the fallacy of the doctrine of economic nationalism. But the difference between the doctrine of economic nationalism and that of sacrificing the interests of one's country in order to develop trade is a matter of degree. I do not favour economic nationalism,, but if opposing this trade agreement is economic nationalism, then, sir, I must stand convicted.
The hon. member for Selkirk (Mr. Thorson) introduced into this discussion a note to which I feel called upon to refer. He claimed that this trade agreement was the beginning of the end of economic imperialism. Economic imperialism, I suppose, I might define as a national opinion favourable to trading as far as possible within the British empire rather than with foreign countries. I believe that geographically the natural channels of trade and transportation on the north Ameri-12739-61
can continent are north and south. I came to a realization of that fact many, many years ago, but at the same time I concluded that the national cost of directing a large proportion of that trade and transportation east and west was part of the price we pay for the privilege, for the many privileges, of being part and parcel of the British empire. I for one am willing to continue to pay that price. Now, do not misunderstand me. I do not say that this trade agreement will give the United States economic domination in this country, but when I see that during the fiscal year ending March 31, 1929, we purchased 68-6 per cent of all our imports from the United States, in 1930, 67-9 per cent, in 1931, 61-5 per cent, and so on, the percentage decreasing each year, and then when I see this trade agreement which is bound to increase again the imports of this country from the United States, I say that this trade agreement is making a serious contribution to the economic domination of this country by the United States.
I want to make a further statement, one that is frequently laughed at, but one which I think must be regarded in all seriousness. If this country ever comes under the economic domination of the United States it will be a question of only a very short time until we are one or more of the states of the American union.


Some hon. MEMBERS:: Oh, oh.


James Earl Lawson: 1 thought that would cause comment, but I still say it and I still believe it.	.


Charles Avery Dunning: My hon. friend is harking back to 1911.


Vincent Dupuis: No truck or trade with the Yankees.


James Earl Lawson: This is a very different agreement from the one that was proposed in 1911.


Vincent Dupuis: Where were you in 1911?


James Earl Lawson: I was right here in Canada, where I have always been. The statement which I made, I made in all seriousness. As individuals I like the people of the United States, but I do not want to come under their laws and under the administration of their laws.


Mr. HOWARD:: Get the flag out.


James Earl Lawson: I do not need to get the flag out, as the hon. member suggests. I am taking up the point of an argument of the hon. member for Selkirk, who wants to end

Canada-U.S. Trade Agreement

economic imperialism. As I say, I do not want to come under the administration of the laws of the United States. So long as I am able I want to remain in, and promote trade within the British empire, and if so doing is economic imperialism I hope that the Conservative party will always continue in the path of economic imperialism.


William Lyon Mackenzie King: Mr. Speaker, the house has been discussing the motion before it for nearly a fortnight, almost to the exclusion of everything else. In that course of time the subject matter of the resolution has been very thoroughly debated. It would be but occupying unnecessarily the time of hon. members to go over the ground that already has been traversed so well by other speakers. About all I wish to say at the moment is that, having regard to the importance of this agreement, it can truthfully be said that there has never been introduced before in the Commons of Canada an agreement of such great importance which has been so generally approved and so ineffectively criticized as the present one. The force of this observation is all the greater in view of the fact that this is the first session of a new parliament comprising in its membership groups not hitherto represented in this house.
The approval has been all but unanimous, if we except what is left of the old Conservative party in the house at the present time. I believe, with this exception, it might be said to be unanimous. I would draw your attention, Mr. Speaker, to the fact that the house is overwhelmingly Liberal, and that with respect to this agreement there has not been a dissenting voice so far as the Liberal party is concerned. That is the more remarkable when it is recalled that the Liberal following is drawn from constituencies of all kinds, rural and urban, and from all parts of Canada. There are members here of the Cooperative Commonwealth Federation party who were in the house during previous parliaments; they have in their ranks some new members. They, too, old and new alike, so far as they have spoken, have spoken favourably and approvingly of the agreement. There is another party which has come in with a considerable membership, the Social Credit party. In so far as its members have spoken their words also have been not of criticism but of approval of the agreement. There remains yet one other party, the Social Reconstruction party. It, too, has been unanimous in its commendation of the agreement. All that is left in opposition to the agreement is the remnant of the Tory party

in the house at the present time. After listening to the speeches of hon. gentlemen opposite who belong to that party, one thing, I think, is clear, namely, that no agreement with the United States would ever have been concluded by that party, under any circumstances whatever. Their argument, from that of the leader himself (Mr. Bennett) and throughout its ranks, has been that an agreement with the United States meant trade north and south, meant the end of the building up of Canada, meant the breaking up of the British empire, meant annexation, meant getting away from the British flag, and all that sort of thing to which the country has listened from Tory speakers for half a century past. That has been the sole contribution of hon. gentlemen opposite to the discussion of this great measure. I do not purpose, therefore, to spend any time in commenting on the line of attack they have made.
One misconception, however, which I should like to point out is that stressed by the last speaker who addressed the house (Mr. Lawson) as he kept making comparisons between what was set forth as the basis of negotiation of an agreement and the present agreement, as if the basis of negotiation of the agreement had been the agreement that hon. gentlemen opposite would have secured or ever thought they were going to get. His own leader made it quite clear that there is a distinction to be drawn between the basis of negotiation of an agreement and an agreement itself. As has been so well pointed out by other speakers, it is not usual for parties negotiating an agreement to make the basis of an agreement less than or equal to what they expect ultimately to receive. In fact, they usually seek to have the basis of agreement cover demands far beyond anything they ever expect actually to receive. The comparisons of the hon. member for South York are all beside the question.
I do take exception, very strong exception, Mr. Speaker, to the right hon. the leader of the opposition saying that he could or might have secured an agreement, to all intents and purposes, very similar to or substantially the same as the one which has been obtained by the present government. I think my right hon. friend knows that that is not correct. He knows of course, as an old parliamentarian and as one who has had much to do with the conduct of international affairs, that we are both precluded from telling the house the actual state of negotiations under his administration and what followed when the new administration came into office. To that extent certainly I am very much handicapped in trying to review what my hon. friend has-

Canada-U.S. Trade Agreement
said. At different times, however, he has been able to give to the press, certainly to one or two particular journals, information which when published has come pretty near to hitting the mark. There have appeared now and then, as the occasion seemed to render opportune, articles in the press which were more or less inspired and which I think we may be justified in taking as representing fairly accurately the position as my right hon. friend has wished to have it known by the people at the time.
I have in my hand a copy of an article which appeared in the Mail and Empire of November 5. It is headed: Acid test for King. Ability to secure mutually satisfactory agreement challenged. It begins:
_ Leaving on Wednesday afternoon for Washington to hold reciprocity conversations with President Franklin D. Roosevelt, Right Hon. W. L. Mackenzie King, federal Prime Minister, is credited in political Ottawa with the courage to face at the outset of his regime the problem destined to rank as one of the acid tests of his administration, namely, the ability of his government to conclude a mutually satisfactory trade agreement with the United States.
Then it goes on to say:
The question which official Ottawa is now asking-and which cannot be answered until a draft treaty is submitted-is whether Mr. King can secure better terms than Mr. Bennett was able to elicit.
I ask hon. members, and my right hon. friend in particular, to listen to this:


Richard Bedford Bennett: I am not responsible for that.


William Lyon Mackenzie King: No; but I
will ask my right hon. friend whether what follows-he evidently knows what it is-


Richard Bedford Bennett: No, I do not.


William Lyon Mackenzie King: -is not a
substantially correct statement of the situation as he knew it:
Under the late government the reciprocity negotiations with the United States blew up when President Roosevelt definitely and categorically declared his inability to extend any concessions on any terms to:
The codfishing and halibut fishing industry of the maritime provinces.
The potato growing industry of the maritime provinces.
The dairying industry of Ontario and Quebec.
The wheat growers of the prairie provinces.
And anything effective for the cattle raisers of the west.
Mr. Roosevelt was prepared to extend concessions to:
Canadian lumber.
Canadian alcoholic liquors.
12739-61i
The haddock fishing industry of the mari-times to the extent of a limited quota arrangement which would extend but limited benefit to the fishermen.
The live stock breeders of the west upon a combined quota and price arrangement which would mean but little to the industry.
It is in comparison with these limited benefits, proffered to Mr. Bennett, that any arrangement negotiated with Mr. King will be judged.
I ask my right hon. friend if that is not pretty substantially the reason why negotiations were not concluded before he went out of office. I am inclined to think that it is. I would ask hon. members of the house, comparing what is reported here with what appears in the agreement that is now before the house for approval, whether there are not the following apparent additional concessions. Let me set them forth. Where I speak of imports, I mean United States imports from Canada by calendar years, based on figures of the United States Department of Commerce. First of all:
Halibut (fresh or frozen)
A 50 per cent reduction.
United States imports: 1929, $676,000; 1934, $261,000.
Potatoes
Seed potatoes, reduction on 750,000 bushels annually, from 75 cents per hundredweight to (December to February, inclusive), 60 cents per hundredweight; (March to November, inclusive), 45 cents per hundredweight.
United States imports: 1929, $600,000; 1934, $223,000.
Dairy Products
Cream, reduction on 1,500,000 gallons annually, from 56-6 cents per gallon to 35 cents per gallon.
United States imports: 1929, $5,182,000; 1934, small.
Cheddar cheese, reduction from 7 cents per pound (minimum 35 per cent ad valorem) to 5 cents per pound (minimum 25 per cent ad valorem).
United States imports: 1929, $1,818,0001934, $140,000.
Wheat
Wheat unfit for human consumption, byproduct feeds and mixed feeds, and screenings, 10 per cent ad valorem rate bound against increases.
United States imports: 1929, over $8,372,000; 1934, $6,564,000.
Hulled oats, unfit for human consumption, 50 per cent reduction.

Canada-U.S. Trade Agreement
Cattle
Heavy cattle (over 700 pounds per head), reduction on 155,799 head annually, from 3 cents to 2 cents per pound.
United States imports: 1929, $9,900,000; 1934, $4,000.
Calves, (under 175 pounds), reduction on 51,933 head annually, from 2i cents to H cents per pound.
United States imports: 1929, $1,000,000; 1934, $3,000.
Dairy cows (over 700 pounds), reduction on
20,000	head annually, from 3 cents to li cents per pound.
United States imports: 1929, (estimated), $500,000; 1934, (estimated), $2,000.
With regard to the concessions on cattle, there is no mention in the agreement before us of the price arrangement referred to by the Mail and Empire, which was a matter of maintaining a certain parity of price as between agricultural and manufactured products. Had anything of that kind existed in this agreement, it would have materially affected the whole agreement from the point of view of the benefit to be derived from its provisions by the cattle industry. There is nothing concerning parity price in the present agreement. So I say, Mr. Speaker, that just taking what appears to be a more or less accurate statement of the situation, which I should say was probably inspired, there is ample evidence that the agreement as it is before the house for approval goes very much further in the interests of Canada than anything my right hon. friend found it possible to obtain prior to the time he went out of office.
I might mention other features. My hon. friend from Leeds (Mr. Stewart) took a characteristic line, when indicating what he termed the many concessions the United States got compared with what Canada secured. He started off with oranges. I think this is as good an illustration as could be used; he said:
Let us see what Canada gives, as compared with what she gets. She gives concessions on oranges to the value of $21,000,000-
First, as to the meaning and accuracy of the figures used, what does my hon. friend mean when he says that the United States got concessions to the extent of $21,000,000 on oranges? I do not know where he obtained his figures; I am told that according to our own statistical department the duty collected on oranges since they were placed on the dutiable list by the late administration, that is for the four years combined, was less than $5,000,000, and that the value of imports of oranges from all countries in the peak year, 1929, was only $9,500,000, while the com-

bined imports of the last four years totalled less than $21,000,000. Yet my hon. friend from
Leeds says, "Look at the concession the United States got, $21,000,000 on oranges."
What I want to point out, Mr. Speaker, is this: In discussing this agreement hon. gentlemen opposite seem to have considered only the alleged interests of producers, even where, as in the case of oranges, there are no producers in Canada. They have not had one word to say for the poor consumer, all the way through. Yet so far as Canada is concerned every one is a consumer, and there is not a producer who does not also receive something from any benefit obtained by consumers. My hon. friend who has just taken his seat says, "Where is the help for the manufacturers in this agreement?" Well, if the consumers are going to derive the great benefit hon. gentlemen opposite would seem to imagine through the intermediate tariff being granted to the United States, that is going to be of assistance to every manufacturer in the country because it will increase the real wages of the workingmen of Canada, and whatever will help the manufacturers or producers lessen the cost of production and the cost of living is going to be of material help to the manufacturers and producers themselves. There is in addition the demand for manufactured goods which will come from the purchasing power derived from the sale of Canada's primary and other products in the United States. But for each single producer in the country it is difficult to say just how many consumers there are; we are all consumers, and the difference between hon. gentlemen opposite and ourselves is that we have been looking to the well-being of the consumers as well as to that of the producers. They have been confining their attention almost exclusively to what is going to benefit certain special or vested interests in the country.
I need not enlarge upon the benefits afforded by the agreement to consumers; the benefits run all through the agreement, but may I say that what might have been a substantial benefit to consumers five years ago through giving to the United States or other countries the intermediate tariff is very much less of a benefit to-day. In many particulars the intermediate tariff to-day is almost the same as the general tariff. During the time my right hon. friend was in office he hardly let a session go by, in fact, I do not think he did let a session go by, without jacking up the tariff somewhat higher, and in particular bringing the intermediate tariff nearer to the level of the general tariff. As a result, when to-day we speak of giving another country the bene-

Canada~U.S. Trade Agreement
fits of the intermediate tariff actually we are giving it a tariff which to all intents and purposes is considerably higher than the general tariff was when the Liberal party was in office. In regard to this agreement let me repeat that as far as we are concerned one of its chief benefits is what we hope and believe it will do for the consumers of Canada. In helping the consumers we believe it is going to help all classes, and every family and household.
My hon. friend from Leeds also touched on a point that I do not think was mentioned by anyone else; just how he came to see it I do not know. My hon. friend spoke about the three escape clauses; he pointed out that there were in this agreement three clauses whereby its term could be shortened so that it might not run for the full three years. If someone from this side of the house had presented that argument with a view to having the condition remedied, there might have been something to it, but my hon. friend was arguing all the time that the agreement was a bad one, and I think in the circumstances he should have been happy that there were some clauses in it which would enable its term to be shortened if necessary.


Mr. STEWART:: I was emphasizing the
instability of it.


William Lyon Mackenzie King: May I point
out to my hon. friend that as far as these escape clauses are concerned, they are there simply for the purpose of seeing that the agreement is carried out in the spirit in which it was entered into; that its main provisions are not defeated by some action, on the part of either the United States government or the Canadian government, which might follow upon failure to make the agreement itself, giving to either party the right, in the event of an injustice being done in that way, of remedying that injustice or, at all events, not suffering because of it. I think on that score my hon. friend should have said that whatever was done for the benefit of the United States on the one hand was done equally for the benefit of Canada on the other. That provision is on all fours with the rest of the terms of the agreement; it is an agreement for the mutual advantage of the two countries, not an agreement whereby one country seeks to get all the advantages on its side and to leave none of the benefits to the other country.
I need not again go over the point alluded to by the last speaker, as to what might follow were no agreement to be effected with the United States at this time. But I would repeat that there are grave results
which might follow upon a failure to make an agreement with the United States at this time. Particularly is this the case when that country is making agreements with other nations in all parts of the world, which agreements, if continued and expanded, as they will be, will give to other countries the place in the markets of the United States which Canada as an immediate neighbour should have above all other countries.
I see, Mr. Speaker, that the hour is getting late. What the country is waiting for is to see to what extent this agreement is approved by the parliament of Canada. I doubt if the remaining twenty minutes can be spent to greater advantage than in securing that result.
The house divided on the motion (Mr. Mackenzie King) which was agreed to on the following division:
YEAS Messrs:
Ahearn	Emmerson
Barry	Evans
Beaubien	Factor
Bertrand (Prescott)	Fafard
Bertrand (Laurier)	Fair
Black (Chateauguay-	Farquhar
Huntingdon)	Ferguson
Blackmore	Ferland
Blair	Ferron
Blais	Finn
Blanchette	Fiset, Sir Eugene
Bothwell	Fleming
Bouchard	Fontaine
Boulanger	Fournier (Hull)
Bradette	Fournier
Brunelle	(Maisonneuve-
Cameron	Rosemount)
(Hastings South)	Fraser
Cameron (Cape Breton	Furniss
North-Victoria)	Gardiner
Campbell	Gariepy
Cardin	Gauthier
Chevrier	Gladstone
(Ottawa East)	Glen
Chevrier (Stormont)	Golding
Clark	Goulet
(Essex South)	Gray
Clark (York-Sunbury)	Hamilton
Cleaver	Hanson
Cochrane	Hartigan
Col dwell	Hayhurst
Crerar	Heaps
Crfete	Hill
Damude	Howard
Davidson	Howe
Deachman	Hurtubisq
Denis	Hushion
Deslauriers	Ilsley
Donnelly	Isnor
Douglas	Jacobs
Dubois	Jean
Duffus	Johnston
Dunning	(Bow River)
Dupuis	J ohnston
Dussault	(Lake Centre)
Elliott	King. Mackenzie
(Middlesex West)	Kinley
Elljptt (Kindersley)	Kuhl
Canada-US. Trade Agreement

Lacombe Lacroix (Quebec-Montmorency) Lalonde Landeryou Lapointe
(Matapedia-
Matane)
Leader
Leclerc
Macdonald
(Brantford City) MacKenzie (Neepawa) Mackenzie
(Vancouver Centre) MacKinnon
(Edmonton West) MacLean (Prince) MacLennan MacMillan MacNeil Maophail, Miss MacRae McCann McCuaig McCulloch	_
McDonald (Souris) McDonald (Pontiac) McIntosh Mclvor McKay McKenzie
(Lambton-Kent) McKinnon (Kenora-Rainy River) McLarty McLean
Motherwell
Mullins
Mulock
Mutch
Needham
Neill
Parent (Quebec West and South)
Parent (Terrebonne)
Pelletier
Plaxton
Pottier
Power
Purdy
Quelch
Reid
Rennie
Rheaume
Rickard
Rinfret
Roberge
Rogers
Ross
(Middlesex East) Russ (Moose Jaw) Rowe (Athabaska) Ryan St-Pere Sanderson Sinclair Stevens Sylvestre Taylor (Nanaimo) Taylor (Norfolk) Telford Thauvette Thorson
(Simcoe East)	Tomlinson
McLean (Melfort)	Tremblay
MeNevin	Tucker
(Victoria, Ont.)	Turgeon
McNiven	Turner
(Regina City)	Veniot
McPhee	Verville
Mallette	Vien
Martin	Ward
Maybank	Weir
Mercier	Winkler
Michaud	Wood
Mills	Woodsworth
Mitchell	Young-175.
 NAYS Messrs:
Anderson	Lennard
Baker	Lockhart
Barber	MacNicol
Beaubier	McGregor
Bennett	Massey
Betts	Perley (Qu'Appelle)
Black (Mrs.)	Perley, Sir George
Brooks	Plunkett
Brown	Ross (St. Paul's)
Cahan	Rowe
Casselman	(Dufferin-Simcoe)
Church	Senn
Clarke (Rosedale)	Stewart
Edwards	Stirling
Esling	Thompson
Graydon	Tustin
Green	Walsh
Harris	Wermenlinger
Hyndman	White
Lawson	Wilton-39.
At 11.06 p.m. the house adjourned, without question put, pursuant to standing order.

Wednesday, March 11, 1936