1936-02-25

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That Messieurs Baker, Bertrand (Prescott), Fafard, Howard, Howden, Landeryou, Maclnnis, MacMillan, Macphail (Miss), McLean (Simeoe), Mills, O'Neill, Purdy, Rheaume, Roberge, Sinclair, Spence, Taylor (Norfolk), Tustin, Veniot, be appointed to assist His Honour the Speaker in the direction of the restaurant, as far as the interests of the Commons are concerned, and to act as members of a joint committee of both houses on the restaurant.


[Stage Direction]
Motion agreed to.

Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, I feel myself reluctantly compelled to rise for the purpose of directing attention to what I conceive to
Privilege-Mr. Bennett


Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, of course it is clear
that the onslaught of my right hon. friend (Mr. Bennett), though apparently directed to me, is rather directed to Mr. Speaker. May I say immediately that by persisting in these attacks day after day my right hon. friend does not do justice to himself, especially when it is in connection with a matter as frivolous as the one he has raised to-day.
Let me simply point out the facts: The hon. member for Winnipeg North Centre (Mr. Woodsworth) moved a resolution which at this time I shall not read. As was his right, Mr. Speaker called attention to the fact that possibly the resolution might be out of order and possibly it should be amended. He said:
I would draw the attention of the hon. member (Mr. Woodsworth) to the remarks I made on the motion that was presented to the house just before this one, as they will apply to this motion, I am afraid, if it is not amended.
The hon. member for Winnipeg North Centre protested in these words:
Do I understand, Mr. Speaker, that objection is being taken to this resolution?
Then he continued to point out that if objection were taken to a discussion of the resolution it would be a hardship on him. I merely rose, in my place and said:
Mr. Speaker, I may say on behalf of the government that we have no objection to this resolution being discussed.
That was because the hon. member for Winnipeg North Centre was asking whether there was any objection being raised from any quarter to a discussion of the resolution. I said we had no objection to it-and this is the tremendous violation of the privileges of the right hon. gentleman opposite. Well, those of us who sat for the last five years know how my right hon. friend directed the debate, and the way he instructed the Speaker.


Richard Bedford Bennett: I am afraid the hon.
member will have to-


Some hon. MEMBERS:: Order.


Richard Bedford Bennett: Mr. Speaker, as a matter
of personal privilege I have a right to speak.


Some hon. MEMBERS:: Order.


Richard Bedford Bennett: And I propose to do so.
The Minister of Justice has said that I instructed the Speaker. That is an inaccurate, improper and incorrect statement.


Ernest Lapointe: I see.
May I add that the persecution of my right hon. friend over the Speaker will not have much effect in Canada.


Right Hon.   S@: Mr. Speaker, with your permission
may I say that I have been a member of this house for many years, but I do not recall any incident such as happened yesterday. As a matter of fact I believe the rules provide that when Mr. Speaker gives a ruling there is only one way to change it, and that is by an appeal against his ruling. The Minister of Justice (Mr. Lapointe) occupies a strong position in this house, and surely he knows the rules as well as any hon. member.
I submit the ruling given yesterday by Mr. Speaker in connection with the resolution offered by the hon. member for Rosetown-Biggar (Mr. Coldwell) was in practically the same words as that given in connection with the resolution proposed by the hon. member for Winnipeg North Centre (Mr. Woods* worth). There was practically no difference between the two. The ruling regarding the resolution of the hon. member for Rosetown-Biggar seems to have been satisfactory to the government, and therefore no difficulty was raised when it was declared out of order. But immediately after, when the resolution offered by the hon. member for Winnipeg North Centre was called and Mr. Speaker gave the same ruling, I submit the Minister of Justice should have allowed the ruling to stand, and I believe it would have been within the competence of any hon. member to rise at that time and move that the ruling of Mr. Speaker be sustained. My hon. friend yesterday not only did not accept the ruling but did so in brief and curt words. He did not rise in his place and say, "Well, Mr. Speaker, I am ready to submit to your ruling, but I suggest to you that this is a case in which you might allow the debate to proceed, and so far as I am concerned I shall raise no objection."


Ernest Lapointe: I will
ask my right hon. friend to let my words be read.


Sir GEORGE PERLEY:: I do not think
it was consistent with the decorum and dignity of this house to dispose of a matter of this kind in the way it was disposed of yesterday. I say again to my hon. friend that I know of no way in which Mr. Speaker's ruling can be set aside, except by appeal, even if it be the desire of so powerful a member-


Ernest Lapointe: It was not a ruling.


Ernest Edward Perley: It was a ruling
by Mr. Speaker. These are his words:
I would draw the attention of the hon. member to the remarks I made on the motion

Canada-U.S. Trade Agreement
that was presented to the house just before this one, as they will apply to this motion, I am afraid, if it is not amended.


Ernest Lapointe: "I am
afraid."


Ernest Edward Perley: In other words,
he considered it out of order. In connection with the resolution of the hon. member for Rosetown-Biggar, he said:
Before this motion is proceeded with, I suggest to the hon. member that it might be advisable for him to amend' his motion, as otherwise I aoi afraid I shall be bound to declare it ouit of order, as I did the motion of the hon. member for North Winnipeg the other day, on the ground that in my opinion if this motion were carried it would involve the expenditure of public money.
Then he rose in connection with the resolution of the hon. member for Winnipeg North Centre and gave the same ruling. In other words he considered it to be out of order, too. I am not concerned with the question whether it was or was not out of order. That has nothing to do with the matter at issue. I submit however that this is a most extraordinary procedure to take. I know of no other instance in which it has happened, and I suggest that the action taken by the Minister of Justice was not in accordance with the rules of the house.


Ernest Lapointe: Thank you for the lecture, Sir George.



BUREAU FOR TRANSLATIONS


Mr. SPEAKER:: I have been asked by the hon. member for Temiscouata (Mr. Pouliot) to render my decision on a point of order raised on the bill "An Act Respecting the Bureau for Translations" upon the copies of the bill that he sent to me at the sitting of Friday, the 20th instant.
I have now the said copies of the bill before me. I find that the bill is out of order because its adoption would mean the transfer of the authority under which the translators' salaries are to be paid. I therefore rule that the bill is out of order.



CANADA-UNITED1 STATES TRADE AGREEMENT PROPOSED APPROVAL SUBJECT TO LEGISLATION MAKING PROVISIONS EFFECTIVE

William Lyon Mackenzie King: That it is expedient that parliament do approve of the trade agreement entered into at Washington on the 15th day of November, 1935, between His Majesty' 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.
He said: Mr. Speaker, may I at the outset say a few words with respect to the procedure the government proposes to adopt in asking the approval of this house of the Canada-United States trade agreement which was signed on November 15 last and of the legislation necessary to give it legal effect.
As hon. members will observe, the resolution to which I am speaking at the moment asks the approval of the house, in general terms, of the agreement. The resolution is designed to obtain the opinion of the house as a preliminary proceeding prior to the discussion of the details of the agreement. It is proposed, once the resolution is adopted, immediately to refer to the committee of ways and means, the agreement itself so that there may be a full discussion of its provisions with respect to the tariff changes incidental thereto before thd house is asked to pass the legislation necessary to give its terms legal effect. It is in the committee of ways and means that taxes are increased; repealed or otherwise amended.
In the votes and proceedings of Friday last hon. members will doubtless have seen notice of the following motion which has since appeared upon the order paper:
Resolved, that the amendments in the customs tariff required to give effect to the trade agreement between Canada and the United States of America, signed at Washington, November 15, 1935, hereto appended, be agreed to so that the said trade agreement may be sanctioned.
The notice given in that form implied that certain amendments would have to be made to the Customs Tariff Act in connection with the schedules of the agreement. That is not the case. No amendments ' to the Customs Tariff Act are required with respect to the schedules. I therefore had substituted the following notice which appears in the votes and proceedings of yesterday:
That the fiscal treatment accorded to goods, the produce or _ manufacture of the United States of America, by the trade agreement between Canada and the United States of America, signed at Washington, November 15, 1935, be agreed to so that there may be introduced a bill giving the said trade agreement the force of law in Canada.
Under that motion, which will follow the adoption of the resolution that is now before the house, if the resolution is adopted, the agreement itself will, as I have said, be considered in committee of ways and means so that there may be the fullest discussion of

Canada-U.S. Trade Agreement
the several items in the schedules which set forth the rates of duty. After discussion in committee of ways and means, and the report thereon, leave will be asked for the introduction of a bill respecting the trade agreement between Canada and the United States. The bill will contain the following as its second elause:
The trade agreement between Canada and the United States of America set out in the schedule to this act is hereby approved and shall have the force of law notwithstanding the provisions of any law in force in Canada.
I am presenting to the house these three distinct steps in order to remove any doubt as to the authority which parliament has over the agreement, and in order to make clear the extent to which parliament will have discussed in advance the details of the agreement before being asked, under the bill which will be introduced to approve of it in its entirety.
Hon. members will recall that when we were discussing the Canada-United Kingdom agreement strong exception was taken by the opposition of the day to the order of procedure then adopted by the government. The objection was taken on the ground that the house was asked to approve the agreement by a bill which was introduced and passed through all its stages without previous discussion in committee of ways and means of the changes in the customs tariff necessitated by the agreement. The first, second and third readings of the bill were completed before there was any discussion in committee of the whole house of the schedules to the agreement, which involved increases in the tariff as well as in some cases decreases. That was, as I said at the time, an irregular procedure. It was not the procedure adopted by the parliament at Westminster with respect to the approval of the agreement in Great Britain. In the first instance, the agreement was referred at Westminster to the committee of ways and means, and after discussion in the committee a bill was introduced giving effect to the agreement. The reverse procedure was however, adopted here. To avoid a repetition of anything of the kind, the procedure which I have indicated will be followed in the present instance. That, too, I hope, will remove any doubt in the mind of the hon. member for Winnipeg North Centre (Mr. Woodsworth) who the other day said a word about parliament being obliged to approve the agreement before hon, members had had a chance of discussing its terms. Members will see that, so far as the approval that is now being asked is to be given, it is subject to the legislation that will be necessary to give the agreement legal effect, and that legislation the house will not be asked to pass until it has discussed very fully, in committee of the whole, the essential provisions and schedules of the agreement.
May I also at the outset clear up another possible misunderstanding in the minds of some, namely, that the government has proceeded to put the agreement into force without having received in the first instance the approval of parliament. To appearances that might seem to be the case; in reality it is not so. The agreement is not yet in force. What is in force are certain schedules attached to the agreement, and they are in force pending the approval of the agreement; pending the agreement, itself becoming law. If this house should decide that the agreement shall not become law then immediately such advantages as have been accruing to the country under the provisions of the agreement since January 1 will immediately cease. It is true that under the agreement, since January 1 of this year, Canada has had the advantage of lower tariff rates with respect to many commodities going from this country into the United States, and similarly this country has granted to the United States the benefit of its intermediate tariff and also certain special concessions in force at the present time. It has been possible for the government to gain for this country the immediate advantage of entry of its commodities at a lower rate of duty into the United States and to grant reduction in rates of duty in the United States pending the final enactment of the bill because of legislation passed in the last parliament which gave to the governor in council express power to reduce duties where the country was obtaining from some other country reciprocal concessions and advantages. May I quote the exact section which governs in this matter? Under the authority of section 11 of the Customs Tariff the governor in council may "make such reductions of duties on goods imported into Canada from any other country or countries as may be deemed reasonable by way of compensation for concessions granted by any such country or countries." That legislation was introduced by my right hon. friend the present leader of the opposition in 1931 when he held the office of Prime Minister. The legislation received at that time the approval of all parties in the house. I want to stress that feature. It was a"n enactment which met with no opposition on the part of the opposition of the day or indeed from hon. members of any of the groups then in the house. The house unanimously approved the power then sought
Canada-U.S. Trade Agreement

for the governor in council in the particulars which I have mentioned. The law as enacted in 1931 referred to reductions of duties by way of compensation. Later on in the same session the government brought down legislation to have the word "concessions" substituted for the words "reductions on Canadian products." Section 11 of chapter 30 of the statutes of 1931, reads as follows:
The governor in council may by order in council make such reductions of duties on goods imported into Canada from any other country or countries as may be deemed reasonable by way of compensation for reductions on Canadian products granted by any such country or countries.
In 1935 this section was amended by the following resolution in the budget:
Resolved, that the aforesaid customs tariff be further amended by deleting from section 11 thereof the words "reductions on Canadian products" and by substituting in lieu thereof the word "concessions."
The part of the agreement which is in force at the present time is in force, therefore, not because of any power which the present governor in council has taken to itself with respect to the reduction of duties, but rather because of legislation which was enacted in a previous parliament and approved by all parties in the house, and which gave to the government of the day the power to reduce duties where there were corresponding concessions being made by another country.
There is one other feature I should like to mention by way of comparison between the present agreement between Canada and the United States and the Canada-United Kingdom agreement. All changes in the tariff under the Canada-United States agreement are in the nature of reductions; under the Canada-United Kingdom agreement, a very large proportion were in the nature of increases in the tariff. Additional taxes were being imposed which was the reason why the then opposition took strong exception to the government of the day approving the agreement and passing the act itself in advance of tariff schedules being considered in the committee of ways and means. Under the present agreement there is no increase in duties; existing duties are lowered. Parliament, as I have said, has given full authority to the governor in council to take action of this kind whenever the opportunity presents itself. No exception can be taken to this agreement on the score that parliament has had no say with respect to the new' rates of dut3' which became effective on January 1.
May I say a word or two as to the attitude of the different political parties in this country with respect to the negotiation of reciprocal

agreements with the United States. I shall not traverse much of the ground of the past, but simply indicate what has been historically the attitude of the parties and the actual agreements that have been negotiated, or concerning which there have been attempts at negotiation.
As hon. members know, prior to confederation there existed between Canada and the United States a reciprocal agreement of an extensive character. This agreement was in force from 1854 until 1866. Since confederation no previous government has apparently found it possible, however successfully negotiated, to bring a reciprocal trade agreement between Canada and the United States to the stage where it has become part of the law of the land. Since confederation agreements have been successfully negotiated including the present, on three occasions. It is significant, may I point out in passing, that in each instance it was when a Liberal administration was in office in Canada. In 1874 an agreement was negotiated by the government of Alexander Mackenzie. That agreement was signed by George Brown, on behalf of Canada, and Hamilton Fish, on the part of the United States. The agreement was defeated by the Senate of the United States.
The next agreement to be negotiated successfully was in 1911, when a reciprocal agreement was negotiated under the administration of the Right Hon. Sir Wilfrid Laurier. That agreement was not in the form of a treaty; it was to be effected by legislation to be passed concurrently by the two countries. The United States enacted the necessary legislation, but, as hon. members will recall only too well, when the legislation was under discussion in this house the opposition from the Conservative benches of the day became so strong that Sir Wilfrid Laurier decided to ask for the dissolution of parliament and go to the country on the issue of a reciprocal agreement with the United States. When the matter came before the country in a general election the issue ceased to be discussed primarily on its merits as a great economic question and was treated as a political question. It was said that an agreement of the kind would lead to political union with the United States; the cry of annexation was raised and an appeal was made to the patriotism of the people. It was stated that an agreement of the kind would mean the end of the development of Canada as a nation, that our trade would all go north and south, and that if once we entered into a trade agreement with the United States on the extensive scale of the one proposed at the time, sooner or later we would break away

Canada-UJS. Trade Agreement
from the empire. No one was stronger in his opposition to that agreement than the present leader of the opposition (Mr. Bennett). He argued, with all the power and eloquence at his command, all the points of which I have made mention.
I should like to point out wherein fortunately we are differently situated at the present time as regards this trade agreement. This is the third agreement, again one which has been negotiated by a Liberal government. There is no possibility of a repetition of what occurred in 1874 when the agreement of that time was defeated by the Senate of the United States. This agreement has been negotiated under special powers given to the president by the congress of the United States. Congressional authority has conferred on the president power to make reciprocal agreements within certain prescribed limits with other countries, and to proclaim such agreements without further reference to congress. So far as the difficulty which presented itself in 1911 is concerned, I do not think it will present itself at the present time. Fortunately at the moment we are just over a general election rather than entering into one. The question of a reciprocal agreement with the United States was an important issue in the last election. I might point out further that it was an issue upon which the respective political parties of the country were not divided; for once they were happily united. My right hon. friend, then the leader of the Conservative party, not only stated that he was in favour of a reciprocal agreement with the United States, but presented to the country the basis upon which he thought that agreement should be entered into.


Richard Bedford Bennett: Not entered into, negotiated.


William Lyon Mackenzie King: My right hon.
friend corrects me and says, "not entered into, negotiated." I accept the correction. I do not know whether my right hon. friend suggests that he had never intended to enter into an agreement; I always thought that he had. At any rate, the basis on which the negotiation was to take place was laid down and to all appearances the country, the electorate, were led to understand that the Conservative party was committed to the negotiation of a reciprocal agreement with the United States.
So far as the Liberal party is concerned, there never could be any doubt as to what our position would be were we returned to power. From the days of confederation down to the present the Liberal party has consistently stood for, fought for, and been prepared to give up power in a struggle for a
reciprocal agreement that would be to the mutual advantage of both the United States and Canada. It would take a long time to run over the controversy of those years, but it is significant, as one tries to get a hurried view of the situation, to discover that, for the most part, when the Conservatives were in office they were never able to effect an agreement with the United States, largely because they were unwilling to make an agreement broad enough to include the possible export from the United States into this country of manufactured or semi-manufactured goods. They sought to have the agreement kept almost exclusively to natural products.
So far as Liberal administrations have been concerned, while conceding up to a point a measure of protection to certain industries, they have felt that in any agreement with the United States there should be an opportunity afforded of goods being brought into Canada, for purposes of competition if need be, goods not in the shape of natural products only but also in the shape of manufactured and semi-manufactured articles. At any rate, that seems to have been the reason why, from the Conservative point of view, no agreement was ever reached by that party. It will be recalled that, when the national policy was introduced, it was introduced not as a permanent policy of protection but as a measure of retaliation against the United States; and it was intended-it was so stated at least at the time-subsequently to repeal or to change it, provided better trade relations could be effected between the two countries. Once having been introduced as a measure of retaliation, it was retained as a matter of Conservative policy and has operated ever since to prevent an agreement going into force between Canada and the United States.
There is one other possible reason why at this moment the opportunity has been more favourable to effecting an agreement than at any other time. From confederation up to the present day there have been only two occasions on which it has happened that there were in office in the United States and Canada at the same time governments which stood avowedly for lower tariffs. The previous occasion was in 1896, at the time Sir Wilfrid Laurier's government came into office. Grover Cleveland's government was in office in the United States, and for eight months at that time there were two administrations, one at Washington and one at Ottawa, each of which was favourable to lower tariffs as between the two countries. Unfortunately, an election in the United States occurred after Sir Wilfrid Laurier's assumption of office. There was not, therefore, the opportunity in 1896 for the new

Canada-U.S. Trade Agreement
Liberal administration in Canada, coming into office, as this administration came into office after a general election, of seeking immediately to negotiate a trade agreement with a government in the United States holding views very similar to its own as to the mutual advantages of trade. When the present Liberal administration came into power, we were fortunate enough to find in office in the United States a low tariff administration, an administration that had claimed from the outset that it was desirous of entering into reciprocal agreements with other countries, and had made it quite clear that of the number Canada was one of the most important. That, I think, was a fortunate circumstance-it was an exceptional opportunity for favourable negotiation-and I believe the agreement we have to-day is in considerable measure the result of that circumstance.
I come now to the circumstances related immediately to the agreement which is before us; and which is based, I want to say very frankly, upon much that was ascertained by my right hon. friend opposite when he was in office. In considering the present agreement, it is necessary to keep in mind that it was negotiated under the special powers given to the President of the United States to enter into agreements with other countries on a reciprocal basis. Those special powers were distinctly limited, so that any agreement that could be made at this time would necessarily be limited in its scope. It was within the framework of the powers given the president by congress that the previous administration sought to negotiate an agreement; it was within that same framework that the present administration successfully negotiated the agreement into which it has entered.
The president is empowered to make an agreement, but it cannot be for a period longer than three years; that is the first limitation. Let me pause here to say a word which I hope will help to dispose of an objection which possibly may be raised by my right hon. friend. It is the one he put forward at the time of the reciprocal agreement of 1911. At that time my right hon. friend took the position that inasmuch as there was not a term of years and, by implication, a long term of years, fixed for the agreement, there was a strong reason why we should not enter into it at all. He claimed that channels of trade developed over a period of years and that it was not right that this country should enter into an agreement which might be abrogated on short notice at the will of either country which was a party to it.
My right hon. friend knew, when he began to negotiate in 1934, that he could not enter into 
an agreement for a longer period than three years, with the possibility of its continuance with the approval of both parties subject to six months' notice. He had apparently overcome his objection to making any agreement unless it could be for a long term of years. I recall that at the time of the Canada-United Kingdom negotiations my right hon. friend put forward the same argument-that the agreement ought to be made for many years, and the longer the better. On this occasion he appears to have been content to enter into negotiations for an agreement for three years in the hope, let us say, that it might be extended for a longer period if it proved satisfactory in the interval. I wish to make it quite clear that we cannot now encounter, as an objection to this agreement, the. objection raised so strenuously by the Conservative opposition of a former day, that the agreement is not definitely fixed for a long period. I am perfectly sure, recalling the discussions that took place at the time of the negotiation of the 1911 agreement, that if the government of the day had entered into an agreement for a period of years the Conservative opposition would have said that we had made a great mistake, that we should never have entered into an agreement fixed for a term of years, but that we should have left our government free to cancel the agreement in accordance with what might seem to be wise in the circumstances as the years went by. With respect to his recent negotiations, I shall assume throughout that my right hon. friend was in earnest in being prepared to negotiate on the lines upon which he professed to be ready to negotiate. I therefore conclude that we are at present in accord on the wisdom as respects duration of entering into an agreement for a period albeit of only three years.
The next limitation placed upon the president was that in the reduction of duties no duties could be reduced by more than fifty per cent. Naturally that again restricted materially the scope of any agreement which might be reached. I know there are many who feel that some items in the United States tariff which have been reduced by fifty per cent or by a lesser amount, should have been reduced by a larger per cent than fifty. It was not possible to go that far no matter how strongly we might have pressed and also assuming that the government of the United States had thought it wise and advisable so to do. The president's powers were restricted to, at most, the reduction of existing duties by fifty per cent.
There was a third restriction on the president, namely, that no commodity which

Canada-U.S. Trade Agreement
under the existing tariff was dutiable could be placed on the free list. There was also a fourth limitation with respect to negotiating with the United States at this time. This restriction was not imposed by congress but arose out of a matter of domestic policy on the part of the government of the United States, namely that any agreement must necessarily be based upon the exchange of most favoured nation treatment as between the countries signing it. That was on the part of the United States a sine qua non of any agreement that could be entered into. Such was the framework of negotiation, and it was within that framework that my right hon. friend was prepared to proceed. It was within that framework that we were obliged to proceed. The possible scope, the' important considerations, the other possibilities involved, all become pretty clear once it is realized just what the limitations and restrictions were.
The act under which the president was given power to negotiate is known as the Trade Agreement Act, and became effective on June 12, 1934. I think I should read the first part of that act, because I believe it throws new light upon the importance of negotiating trade agreements at this time. It stresses the depression as a factor which is important to countries considering the expanding of their trade. Here may I say, what I should like to emphasize throughout, that depression, rightly understood, means nothing more or less than absence of trade; and may I state the reverse as being equally true, that trade-plenty of trade-means the end of depression. That fact, I believe, is coming to be increasingly appreciated after some four or five years of economic nationalism during which efforts at promoting trade have been circumscribed and restricted rather than expanded.
The act to amend the Tariff Act of 1930, which constitutes the Trade Agreement Act of 1934, reads as follows:
For the purpose of expanding foreign markets for the products of the United States (as a means of assisting in the present emergency in restoring the American standard of living, in overcoming domestic unemployment and the present economic depression, in increasing the purchasing power of the American public, and in establishing and maintaining a better relationship among various branches of American agriculture, industry, mining, and commerce) by regulating the admission of foreign goods into the United States in accordance with the characteristics and needs of various branches of American production so that foreign markets will be made available to those branches of American production which require and are capable of developing such outlets by affording corresponding market opportunities for foreign products in the United States, the President,
whenever he finds as a fact that any existing duties or other import restrictions of the United States or any foreign country are unduly burdening and restricting the foreign trade of the United States and that the purpose above declared will be promoted by the means hereinafter specified, is authorized from time to time-
(1)	To enter into foreign trade agreements with foreign governments or instrumentalities thereof; and
(2)	To proclaim such modifications of existing duties and other import restrictions, or such additional import restrictions, or such continuance, and for such minimum periods, of existing customs or excise treatment of any article covered by foreign trade agreements, as are required or appropriate to carry out any foreign trade agreement that the President has entered into hereunder. No proclamation shall be made increasing or decreasing by more than 50 per centum any existing rate of duty or transferring any article between the dutiable and free lists.
Other limitations are then set forth. What I wish to draw to the attention of hon. members is that what is said there with respect to the advantages of a reciprocal agreement so far as the United States is concerned, might be said in identical words with respect to the advantages to Canada of a reciprocal agreement with other countries where the advantages gained are mutual.
May I here remind the house of the efforts that have been made by the Liberal party, since the defeat of the reciprocity agreement of 1911, to have, if at all possible, some reciprocal agreement entered into with the United States. As I have mentioned, the agreement of 1911 was in the nature of an arrangement to be effected through concurrent legislation. The United States had passed the necessary legislation. It allowed that legislation to remain on its statute books. So long as it remained on the statute books of the United States, that legislation was available to this country at any time we chose to take advantage of it. From 1911 on throughout the remainder of his life, Sir Wilfrid Laurier urged upon the government of the day-the Conservative government of the day-not to let that opportunity go by. Despite the defeat they had inflicted upon his own administration at the polls in 1911, he urged the then government to take a broader view and to make a reciprocal agreement. He pointed out that, unless advantage were taken of the opportunity, it wTas inevitable that sooner or later a change would come in the attitude of the United States. He warned that existing rates of duty would be raised, and that it would then become more difficult than ever for Canada to enter into an arrangement with the United States. I ask hon. members to keep this in mind, because it
Canada-U.S. Trade Agreement

has an all important bearing upon the wisdom of approving this agreement. If this agreement is not entered into at this time we may be as sure as that night follows day, that in the course of a very short time the opportunities which exist to-day for favourable trading will so far as the United States is concerned be made much more difficult. It has happened at all times that where advantage has not been taken of a favorable opportunity, a reaction has set in, and the other extreme has been encountered.
As I say, from 1911 Sir Wilfrid Laurier urged and the Liberal opposition after Sir Wilfrid's day continued to urge that advantage should be taken of the opportunity to effect a reciprocal trade agreement with the United States. But the appeal passed unheeded and we fell upon difficult years. What was the result? The result was that we had the Fordney-McCumber tariff, and later the Hawley-Smoot tariff, each of which raised the barriers against Canada to a higher point than they had ever been before. In 1923 the Right Hon. Mr. Fielding introduced in the Customs Tariff Act a standing offer to the United States, after their offer to Canada had been repealed, by a provision which gave to the governor in council power to reduce duties on certain commodities provided the United States would enter into reciprocal arrangements with Canada with respect to any of the commodities mentioned. That offer remained on our statutes for years. It remained there, I think, until my right lion, friend in 1931 substituted what I have read to-day as the power given to his government or any succeeding government to reduce duties in a still broader way. Throughout, the attitude of the Liberal party has been that of urging that every effort should be made to further reciprocal trade under such opportunities as might be afforded. In our last parliament the hon. member for Antigonish-Guysborough (Mr. Duff) in three succeeding sessions presented a resolution urging upon the government to enter into a reciprocal agreement with the United States. On each of those occasions my right hon. friend, then Prime Minister, said that negotiations were proceeding, and asked us not to discuss the matter further for fear we might prejudice the possibility of the government securing on the best terms possible an agreement with the United States. Knowing that everyone in this country who really had at heart the development of the nation was desirous of seeing trade developed, the Liberal opposition of the day met my right hon. friend's request and refrained from discussion in order to give him every opportunity to make all the pro-
gress he could. And here may I say, if this agreement is not all that some would like it to be, one of the real reasons unquestionably is the fact that my right hon. friend did not seize the earliest opportunity to make an agreement with the United Sates. He allowed one year after another to go by. We well know that even before Mr. Roosevelt was in office, during his election campaign, he made it perfectly clear that he was most anxious to have the United States enter into reciprocal trade agreements with other counries. Stressing as he did throughout his campaign a policy of neighbourliness, it was obvious that he was looking to the possibility of increasing trade and, with it, friendly relations between the United States and ourselves as her immediate neighbour. But my right hon. friend let those years go by, 1922, 1923, 1924, 1925; those years slipped away-


Richard Bedford Bennett: They went by certainly,
and my right hon. friend was there; those were his years.


Mr. ROWE (Dufferin):: And 1926, 1927,
1928 and 1929 as well.


William Lyon Mackenzie King: I thank my
right hon. friend for his correction. There is nothing too small for him to pick up. It was quite obvious that I meant to say 1932, 1933, 1934, 1935; that those years slipped by while the president's offer was being made to Canada, and when it would have been possible, I believe, to make an agreement on much better terms than were possible later on.


Mr. CAHAN:: The president's offer was not made until June, 1934.


William Lyon Mackenzie King: But my hon.
friend knows that negotiations should have been started before.


Richard Bedford Bennett: And they were.


William Lyon Mackenzie King: My hon. friend's leader says that they were. Which is right? The hon. member for St. Lawrence-St. George (Mr. Cahan) says that they could not have been.


Charles Hazlitt Cahan: No, I beg your pardon.


William Lyon Mackenzie King: What does my hon. friend say?


Charles Hazlitt Cahan: Oh well-


William Lyon Mackenzie King: He says "Well."


Charles Hazlitt Cahan: Mr. Speaker, if I should repeat it the right hon. gentleman would misinterpret and misconstrue it. That is his attitude of mind to-day.


William Lyon Mackenzie King: 
Percy John Rowe: What about 1921 to 1930?


William Lyon Mackenzie King: Every effort was made. We were not successful for the reasons I have just mentioned. The Republican party was in office in the United States and had put up the tariff to heights unknown before, and had done so largely as a result of the fact that the Conservative party in Canada had defeated the reciprocity agreement and had not when in office subsequently taken advantage over a period of years of the offer wThich continued to be made by the United States to effect a reciprocal agreement with Canada.
As everyone knows, in the matter of international negotiations it is much easier to work out the terms of an agreement when there is plenty of time for negotiation than when the time available becomes increasingly limited. If the Liberal party had been in office two years sooner, as it should have been, and would have been had my right hon. friend gone to the country when the country was demanding he should, we would have been able to make a more favourable agreement than was possible at the end of last year. As the matter stood, the present agreement was reached within two months of the reassembling of congress and within a year of the date on which a presidential election is to take place. As all who are familiar with public affairs in the United States are aware, it is extremely difficult for the government of the United States or the president to give on the eve of the reassembling of congress the consideration to such matters that at another time it might be possible for him to give. Also in the year of a presidential election all such matters become frought with fresh difficulties. Fortunately, however, there remained time enough for us to make a very good agreement, but as I say the path was made more difficult for us by the fact that my hon. friends held on to office long after they should have, and during the whole of which time they took good care to see that no agreement was entered into with the United States.
May I mention another handicap? It has been said that the Canada-United Kingdom agreement was not an obstacle to negotiation; that my right hon. friend proved that it was possible to enter into an agreement with the 12739-32
United States notwithstanding the existence of the Canada-United Kingdom agreement. Let me say that the present administration, when it began the negotiation of this agreement, made it a matter of policy that nothing would be done in the agreement with the United States which would in any way affect any of the provisions of the Canada-United Kingdom agreements. No matter what it would cost us and notwithstanding that we did not like many of its provisions, we were prepared to take that position and we took it and held to it throughout. And although every effort was made to have us consider the matter otherwise, to fix margins, peg rates of duty in this agreement as was done in the Canada-United Kingdom agreement we took as strongly the position that we would not agree to restrict in any way our complete freedom of action with respect to any arrangements or agreements we might have or hereafter might wish to make with Great Britain or other parts of the empire. Had my right hon. friend and his government followed that plan in connection with the Canada-United Kingdom agreement, we in Canada would be in a better position to-day to make agreements with other countries. But as hon. members know, provisions were inserted in the Canada-United Kingdom agreement under which fixed margins had to be preserved. These fixed margins have prevented reductions in duties to other countries, and to thait extent have limited the powers of the government in the negotiation of other agreements. My right hon. friend said the other day that there were some things not in the Canada-United States agreement which he thought should have been. Had there been no empire agreements, some of those things which he finds missing might have been included, but we were prevented as he knows from negotiating with respect to anthracite coal, Indian corn, canned fruits, dried currants, raisins and other commodities. These are only some of the principal products on which our obligations to empire countries precluded more extensive concessions being granted to the United States in exchange for which we might have obtained a still more comprehensive agreement. To preserve the agreements made with other parts of the empire by my right hon. friend, in which duties were pegged at certain levels, we had immediately to say, "On these things we cannot negotiate further," although in some cases it obviously would have been in the interests of our consumers and producers alike for us to have been able so to do.
Now I come to something which seems to me pretty effectively precludes my right hon.



Canada-UjS. Trade Agreement
friend from taking exception to the lines on which we have proceeded, assuming he was in earnest in the negotiations he was conducting with the United States. A few days ago my right hon. friend placed on Hansard at full length a note dated November 14, 1934, from the Canadian Minister in Washington to the Secretary of State of the United States. The note sets forth what my right hon. friend, speaking as the leader of the government of which he was the head, and in the name of the Conservative party in Canada, purported to be their position as he saw it with respect to trade between Canada and the United States, and the basis upon which he was prepared to negotiate.
I wish to read a few extracts from that communication to hon. members so that they may see how much we had reason to believe that in our efforts to effect an agreement we would meet not with the opposition of my right hon. friend but with his hearty approval and cooperation. I rather expected that, at a time like this and respecting an agreement of such importance, my right hon. friend would have adopted towards the present administration something of the attitude which the Liberal party in opposition took towards his government when we accorded it the fullest freedom to make an agreement with the United States and did what we could to assist it in securing the most favourable terms. However he has not taken that attitude. The note begins as follows:
Sir, the government of Canada for many months have been giving careful consideration to the means whereby the exchange of commodities between Canada and the United States might be increased, and I have been instructed to present a statement of their views for the information of the government of the United States. The government of Canada believe that the time has come for definite action and that the declared desire of both governments to improve conditions of trade between the two countries should now be carried into effect by the negotiation of a comprehensive trade agreement.
You will recall that when the Prime Minister of Canada visited Washington in April. 1933, at the invitation of the President of the United States, the development of trade between the two countries was sympathetically discussed. On April 29, 1933, Mr. Roosevelt and Mr. Bennett issued a joint statement at the end of their conversations, which concluded as follows:
"We have also discussed the problems peculiar to the United States and Canada. We have agreed to begin a search for means to increase the exchange of commodities between our two countries, and thereby promote not only economic betterment on the North American continent, but also the general improvement of world conditions."
They were taking the large view-not merely the mutual benefits to be derived, but

a general improvement in world conditions. Then, a little farther on in the note I find this:
On February 22, 1934, the Department of State issued to the press a statement concerning trade negotiations with Canada, which reads as follows:
"The trade between the United States and Canada is larger in normal times than that between any other two countries in the world, and it is natural that both countries should desire to restore the reciprocal flow of commodities to normal proportions. We hope to be in a position at an early date to take steps looking to the conclusion of a trade agreement with Canada which will further the interests of both countries. We hope thus to bring into practical application the 'good neighbour' policy between these two great countries which have so much in common."
That is the end of the quotation. Then the note continues:
A few days later, on March 2nd, the president requested the congress to enact legislation conferring on him authority to enter into trade agreements, in a message which concluded with the following words:
"1 hope for early action. The many immediate situations in the field of international trade that to-day await our attention can be met effectively and with the least possible delay."
The legislation in question became law on June 12.
That made clear the feelings of the govern^ ment of the day, and indicated not only that an agreement was desirable but that no time should be lost; that there should be immediate action. Further on I find this:
It is hardly necessary to stress the importance to both the United States and Canada of their mutual trade.
And elsewhere:
The relative importance of the market of each country to the other, and the persistence of trading on a substantial scale throughout the changing phases of the business cycle, as revealed by the trade returns, demonstrate the inherent advantage of this interchange of commodities, and the tremendous potentialities of expansion under favourable conditions. But no useful purpose can be served by calculating the relative shares retained by each country in a total world trade that for four years has been steadily shrinking, until in 1933 it fell in value to approximately one-third of the level of 1929. If peace and prosperity are to be established on an enduring basis, it is essential to increase the absolute volume of world trade. No better beginning can be made than by taking steps to increase without delay the volume of trade between two countries which offer the most notable opportunity.
Could any language be stronger than that as to the wisdom of a reciprocal agreement within the framework I have indicated for the purpose of furthering the trade of the two countries? I shall read this further paragraph:
It should be realized that certain formidable obstacles to the lowering of tariff barriers now

Canada-U.S. Trade Agreement
prevailing in other parts of the world are not present between the United States and Canada. The opportunities of a new continent have resulted in a parallel economic and social development almost without precedent.
I am putting these matters on record, because I believe they will serve to answer my right hon. friend, by his own words, when he rises to speak against the agreement which is now before us for approval. He will find in his own words the answer to the arguments which he will seek to urge against this agreement. He continues:
Standards of living and working conditions are similar on both sides of the international boundary. The measures of protection which each government has imposed against the products of the other country have not been determined by a desire to exclude the products of cheap labour. In these difficult times, countries seeking to maintain high domestic standards of living have a common interest in expanding trade with each other. For the past year, also, the Canadian dollar has been close to parity with the United States dollar, and the disturbing effects of exchange instability have in large part disappeared. Even if the desired general revival of international trade should still be delayed for a considerable period, there is much to be said in favour of an immediate attempt to increase the volume of commerce between these two neighbouring countries, whose traditions and ideals of social and economic progress are so alike.
And a little further on:
The government of Canada is prepared to join the government of the United States in a declaration that their common objective is the attainment of the freest possible exchange of natural products between the two countries. It is recognized that this objective cannot be attained in the immediate future, as important interests in both countries would be disturbed unduly by the sudden removal of existing tariffs on all natural products. The government of Canada would therefore favour, as the first step, the reductions included in the proposals set out in the next paragraph, to be succeeded by progressive mutual reductions in the duties on natural products, leading to the attainment of the declared objective.
The note goes on to set forth the basis on which an agreement will be entered into, and here it will be observed that it is the only basis, as I have pointed out, on which any government in Canada could have entered into an agreement with the government of the United States. The powers which the president had were circumscribed. The policy of the United States was to make an agreement only on an exchange of most favoured nation treatment. When we come to consider what was actually done, and what could actually be done today, it will be seen that the basis set out in this note was the only possible basis.
12739-32i


Mr. STEVENS:: Would the right hon.
gentleman mention again the date of that note?


William Lyon Mackenzie King: It is dated
November 14, 1934. It was in June, 1934, that the president had been given power to negotiate as I have indicated. This note was the outcome of careful consideration and compilation by the officials of the public service after investigation on their part and in collaboration with the ministers of the day. The note goes on to say-I ask the house to note this:
I am authorized to put forward' the following outline as a suitable basis for the negotiation of a trade agreement:
(a)	A mutual undertaking to maintain during the lifetime of the agreement the unrestricted free entry of commodities now on the free list of either country.
That was the first step, and that has been done in the agreement which the present administration has effected. The note continues :
(b)	The mutual concession of tariff treatment as favourable as that accorded to any other foreign country; this means that Canada would extend to the United States its intermediate tariff involving reductions from the present rates of duty on some 700 items, including both natural and manufactured products, together with a number of further reductions below the intermediate tariff rates through the extension to the United States of concessions made by Canada in trade conventions with foreign countries.
This again has been done in the agreement reached by this government with the United States-the exchange of most favoured nation treatment as between the two countries, with certain additional concessions. Then follows (c):
(c)	The reduction by 50 per cent of the existing United States rates of duty, as authorized by the Tariff Act of 1934, on a specified number of natural products, including inter alia, lumber, fish, potatoes, milk and cream, and live cattle; a number of other agricultural products, and several minerals both metallic and non-metallic.
What is set forth in that clause has not been accomplished in full, but it has been accomplished in very large part. I shall have more to say on this point later. It i3 to be remembered this was a basis only for negotiation and represented undoubtedly a maximum demand. The note represented the proposals which were to be the subject of negotiation. Then (d):
(d)	The reduction of the existing rates of duty by the United States on a number of partly or wholly manufactured products of Canada, including some processed natural products and certain products in which hydroelectric power comprises an important element in the cost of production.

Canada-UjS. Trade Agreement
That objective has been, secured in the agreement reached by the present administration. Then (e):
(e)	The reduction of the existing rates of duty by Canada on a number of natural and partly or wholly manufactured products of the United States.
That was Canada's concession to the United States as proposed by my right hon. friend opposite. We have followed him again in that, and have made concessions in accordance with this particular clause. This ends the part of the note dealing with the basis of negotiations. The note goes on to say:
In view of the declared policy of the governments of the United States and Canada to improve existing trade relations, and of the progress already made in both countries in the necessary preparatory studies, there would appear to be no barrier to the immediate initiation of negotiations and their speedy conclusion.
That was on November 14, 1934. Remember that the general elections in Canada did not take place until the month of October, 1935, nearly one year after, but my right hon. friend through his minister in the United States said to the government of the United States in the month of November, 1934:
In view of the declared policy of the governments of the United States and Canada to improve existing trade relations, and of the progress already made in both countries in the necessary preparatory studies, there would appear to be no barrier to the immediate initiation of negotiations and their speedy conclusion.
I agree with that statement. I do not think there should have been any barrier to immediate negotiations and to their speedy conclusion. But why did that barrier come into existence? There can be only one answer, and that is that my right hon. friend himself did not proceed with the negotiations as he should have proceeded with them, and would have proceeded with them, had he been anxious to effect an agreement.
How did the United States government receive the proposals of my right hon. friend? I shall not read the entire note from the Secretary of State of the United States to the Canadian minister, but I shall quote from it. It is dated Washington, December 7, 1934, and makes clear that the United States shared the view expressed by the then Canadian government that it should be possible to make an agreement in a short time. It indicates in order that there might be no mistake as to how far the United States might be able to go, one additional point which the United States government felt they should bring to the immediate attention of my right hon. friend before they negotiated further. We

shall see later how my right hon. friend viewed the point thus raised. The note is signed by the Secretary of State, Mr. Cordell Hull:
I have given careful consideration to your note. I fully subscribe to the views which you express in regard to the importance to each of our countries of its trade with the other, and I am happy to note the willingness of your government to undertake negotiations looking to an increase in trade in both directions. It is not necessary to comment in detail on your statements respecting the balance of payments as between our countries. As you are aware, international balances are settled on many fronts, and it would be a serious setback to world trade if countries undertook to achieve balances with individual countries.
This would seem to indicate that my right hon. friend had been seeking an agreement on a balance of trade as between the United States and Canada alone. That may account for some delay in the negotiations. Obviously the view expressed by Mr. Hull is the correct one, and the only correct one, namely, that in international exchange trade balances are settled, not on one front, but on many fronts. Mr. Hull goes on to say:
I believe that a point has now been reached when an exchange of views on this subject with Canada should be undertaken, and I am, therefore, gratified, to learn that your government is of the same mind. Whatever the desirability of the freest possible exchange of natural products, and indeed other products, between the United States and Canada as an ultimate goal, the United States government must in any negotiations undertaken at this time restrict itself to measures authorized by the Trade Agreements Act, 1934, of which I enclose a copy.
The outline which you suggest as a possible basis for discussions has been noted. You mention several specific products upon which your government proposes to seek reductions in existing rates of duty in this country. In communicating to you the willingness of the government of the United States to enter upon negotiations with your government looking to a trade agreement calculated to increase trade in both directions. I must, of course, make it clear that in advance of negotiations this government can not make any commitment as to whether it will be possible to agree to a reduction in the rates of duty on particular products, each of which must be carefully studied in the light of existing economic conditions before any decision can be reached. This is the procedure which has been adopted and followed in connection with the trade agreement negotiations with other governments. Correspondingly, it is understood that your government will wish to give the same study to individual products upon which this government may request reductions in the Canadian rates of duty.
I suggest that to the proposed outline of discussions there be added the question of methods determining the value of merchandise for duty purposes in either country, a matter which I consider of importance in the proposed negotiations.

Canada-US. Trade Agreement
In that communication the Secretary of State of the United States made it perfectly clear that there was one clause in the proposed basis of negotiation, as put forward by my right hon. friend, to which the United States could not agree in its entirety, namely, that they should give to the extent that was indicated a reduction of duty on certain specific commodities. They were prepared, however, to take into account existing conditions and circumstances and to see how far they could go in the matter. They stressed also the importance of including in the discussion the method of determining the value of merchandise for duty purposes, the administration of customs laws, artificial restrictions upon imports, and powers taken by the governor in council with respect to customs regulations which were particularly objectionable to the United States, as they had been to other countries.
How did my right hon. friend proceed from that stage? The following is the reply which was sent on January 4, 1935:
I have the honour to acknowledge your note of the 27th December, 1934, in which you advise me of the willingness of your government to enter upon negotiations with the government of Canada looking to a trade agreement calculated to increase trade between our two countries, and to assure you that my government, who have noted the suggestion that the question of methods of determining the value of merchandise for duty purposes be added to the proposed bases for discussion set forth in my note of the 14th November, are ready to commence negotiations immediately with a view to the conclusion of a commercial agreement with the government of the United States of America.
That was the situation on January 4, 1935, before the previous parliament had held its last session. I submit that at that time my right hon. friend knew entirely the framework within which the agreement was to be made, how far it would be possible for him to go, and if he was prepared to carry on negotiations, about how far it would be possible for the United States to go. But have we a record of any further communications? Nothing further was given to this parliament or to the country until we were in the midst of a general election. Over and over again during the last session we asked my right hon. friend what progress he was making in the negotiations. We sought to discuss tariff matters; resolutions were introduced favouring reductions in the duties on farm implements, on machinery for mining and on the instruments of production in the other basic industries such as fishing, lumbering and the like. Each time a resolution of the kind was introduced my right h'on. friend asked us to allow it to be dropped, not to proceed further
with it because it might prejudice his negotiations with the United States. In that way we were prevented from discussing the matter throughout the session. Until after parliament was dissolved no word of any agreement was forthcoming. No doubt when my right hon. friend speaks he will give us the reasons for all these delays. What I want to ask is this: Why did my right hon. friend find it necessary to wait until the country was in the midst of a general election to publish the document setting out the basis of negotiation? The correspondence was handed out to the press by my right hon. friend in the month of September.


Richard Bedford Bennett: It was tabled here in the house.


William Lyon Mackenzie King: This statement was brought out publicly only in the press.


Richard Bedford Bennett: It was publicly given to the house when the house was in session. It was laid on the table.


William Lyon Mackenzie King: It was given to the press in its entirety only in the month of September.


Richard Bedford Bennett: It was laid on the table of the house.


William Lyon Mackenzie King: A great deal was made of it by my right hon. friend during the course of his campaign. Throughout its course, he continually drew attention to it. The impression that he sought to leave with the country was this: Here is what I am standing for; I am seeing that you will get amongst others the things that I have mentioned here; negotiations are under way, and the only hope you have is to return the present administration and let me get these things for you as a consequence of having commenced the negotiations. Fortunately, both parties had been on record in the past with respect to their willingness to negotiate agreements with the United States. The public believed that if further negotiations were to be carried on with any hope of success, it was better to trust them to a party that had stood consistently for better trade relations with the United States, than to one that had defeated the reciprocity agreement that had been reached with the United States in 1911 and had made no headway in negotiating an agreement while it was itself in office.
When the present administration came into office our position was perfectly clear. My right hon. friend asks, "Why all the haste? Why was everything done so quickly? What you did do was either what had been done

Canada-U.S. Trade Agreement
before, in which event it is very good, or if not, it is very bad." In other words, "What I did was good, but what you do is bad." Perhaps we should have expected such an attitude, but I submit that it is not much of an argument. In negotiating with the United States my right hon. friend had to rely upon members of the public service for the information necessary to guide him and his colleagues. As all hon. members must know, agreements of this proportion have to be studied and worked out with the utmost care. It is true that negotiations are carried on in part by principals, but for the most part the actual work of accumulation and compilation of data, [DOT]of making comparisons and estimating values is performed by members of the public service. .1 think this country owes a very special debt to those officers of the Department of Finance, the Department of Trade and Commerce, the Department of National Revenue and the Department of External Affairs who had to do with negotiations while my right hon. rfriend was in office and since we have been in office. I am sure he will be the first to say that they rendered exceptional service in seeing that the whole situation was surveyed from every possible angle, and that they brought to the attention of the ministers every consideration of which account would have to be taken. More than that, they succeeded in effecting the happiest of relations with their opposite members in the departments at Washington, an important factor in the successful completion of the agreement.	-
May I say at once that we sought an agreement which would be fair and square, and which would be helpful to both countries. We were not seeking, and I do not believe my right hon. friend was seeking, to get the better of the United States. I do not believe the United States was trying to get the better of us. I think that both countries had come to the conclusion that, in this period of depression when things were going from bad to worse in our respective countries and other parts of the world, the sooner we all adopted a different attitude of mind and decided that, instead of seeing how far we could keep away from each other, we should see how close together we could come in the matter of trade on a mutually helpful basis, the better it would be for all concerned. In the working out of this agreement, I believe the officials of both governments were sincerely anxious to find what would be a fair equivalent each way. I think exactly the same is true of the ministers of both governments. The government of the

United States and the government of this country were actuated by one and the same motive, namely, to make an agreement which would be equally beneficial to both countries.
May I point out a special reason why such should have been the attitude? This agreement is only for a period of three years. It is necessarily restricted to three years; but it may be continued indefinitely if, in the intervening three years, it proves to be mutually beneficial. Could anything destroy the agreement more effectively than that it should be shown in the course of the _ next three years that one country had got considerably the better of the other? Would not the effect of an agreement reached in that way be to destroy the possibility of its continuance beyond the period of three years. We believe that what has been done is a step in the right direction, a step which during the next three years will prove its wisdom so conclusively that, when that period has expired, the agreement will not only be continued indefinitely, but will be materially expanded to the increased mutual advantage of the two countries.
When we came into office it was obvious that, if an agreement was to be effected no time was to be lost. My right hon. friend sought, in the debate on the address, to make it appear that there had been undue haste in this matter. One of the reasons I have taken the trouble to read what I have read to-day is to make clear to hon. members and to the country that every conceivable angle of the situation had been canvassed by members of the permanent service while my right hon. friend was in office. Their knowledge of the facts was available to the new administration.	I cannot make that too
clear. I want to express, indeed I have expressed, my appreciation of all that had been done in a preliminary way, and that helped to make it possible for the new administration to obtain, at a moment's notice, all the necessary information.
The elections were held on October 14 and we came into office on the 23rd. On the 24th I called on the Hon. Mr. Armour, the United States minister, and told him that our government felt that the most important question we had before us was the negotiation of a reciprocal trade agreement with the United States. I asked if he would be kind enough to arrange a meeting between the President of the United States and myself at the earliest possible moment so that we might discuss, with regard to a trade agreement, such features as it might be necessary to have considered in that way.

Canada-UjS. Trade Agreement
Let me stress this point-I have overlooked it up to the moment but I want to emphasize it now. This government came back with a mandate from the people of Canada to put through a reciprocal agreement at the earliest possible moment. So far as asking the approval of this house is concerned, I regard that in some respects as an almost unnecessary step; the country itself has given so overwhelming an expression of approval of its confidence in a reciprocal agreement with the United States to be negotiated by a Liberal administration. The necessity for such was emphasized from every platform. As my right hon. friend has pointed out, I said more than once that if we were returned to power, the country might expect to see an agreement effected before the year was out. Why did I say that? Because I had before me the basis of the agreement as presented by my right hon. friend; and I knew very well if an administration were in earnest, if it were anxious to effect an agreement with the United States, and if that country were as it had said, equally desirous of achieving that end, that, with the knowledge which would be immediately available to us, it would be possible to work out an agreement in a very short period of time. I assured the country, if it returned us to power, that it could expect us to take the matter up immediately. The country believed what I said, and it has not been disappointed in its expectations.
Immediately after I had seen Mr. Armour, as I explained the other day, members of the cabinet went into conference with members of the service from the different departments who had been dealing with the matter. We canvassed the situation back and forth. We carefully considered how far we would be justified in granting certain concessions to the United States, what our demands should be, and what we would consistently stand for -the basis on which alone we would conclude an agreement. We were in a different position from my right hon. friend in one very important particular. We had said to the electorate throughout the campaign that in our opinion the duties in this country on implements of production were far too high. We said that if returned to office we -would reduce those duties substantially. When we sought to negotiate an agreement with the United States we were prepared to offer, for concessions on their part, a reduction in those duties, as we were pledged to do, on instruments of production in the great basic industries of the country. To that extent we were in a much more favourable position than my right hon. friend in seeking to negotiate; we could negotiate for better
terms than he would have found it possible to secure. I might mention other things, but I cannot go into certain matters which are more or less confidential. The one referred to, however, was known generally, and it was a factor which helped very much in the negotiation of the present agreement.
After discussing the matter fully with my colleagues in the cabinet, and after arranging to see the president, 1 went to Washington for that purpose. I think it is advisable to put on the record the communications given out at the time, because they help to tell the story in no uncertain terms. My right hon. friend said it was a matter of going south for my health, but I believe that anyone who read this statement at the time it was released will appreciate the significance of it.
On November 5 I handed to the press the following statement:
I have thought it advisable, before entering upon the duties of the dominion-provincial conference, which will be held at the end of the present month, to take a short trip to the
south	My intention is to go south via
Washington so as to have an opportunity of visiting the Canadian legation and of calling upon the President of the United States. In arranging my plans, I sought to ascertain through Mr. Armour, the American minister at Ottawa, a time which would be convenient to the president for my call upon him. Mr. Armour has since conveyed to me an invitation from Mr. Roosevelt to be his guest at the White House during a part of my stay at Washington. I plan, accordingly, upon arrival in Washington on Thursday noon, to go to the Canadian legation. I have accepted the president's very kind invitation to be his guest at the White House on the day following, and to spend there the night of Friday, the eighth. On Saturday I shall resume my stay at the Canadian legation. In these particulars my visit to the White House will be similar to that of Mr. Bennett when, as Prime Minister and Secretary of State for External Affairs, he visited the Canadian legation in April of 1933 and in the course of that visit was the guest, at the White House, of the President of the United States.
I ask anyone at all familiar wth political matters and with the methods of proceeding in international negotiation, whether, reading that statement, it would not appear that the purpose of that visit was to discuss matters of trade with the President of the United States, just as my right hon. friend had done on a previous occasion. I was making it perfectly plain to this country that the government had before it the question of a reciprocal agreement with the United States, and that my visit to the president was unquestionably and primarily for the purpose of discussing the matter of trade relations between the two countries.
When my right hon. friend paid his visit to the president, a joint statement was issued

Canada-U.S. Trade Agreement
from the White House after their interview as to the main subject of their conversation. The joint statement was to the effect that they had been exploring means of improving trade between the two countries and were in agreement upon the objectives and the methods to be adopted. After my visit to the president, a statement was similarly given out at Washington on behalf of the president and myself, a joint statement indicating the nature of the matters discussed during the course of that visit. It was released at Washington on November 9:
The President of the United States and the Prime Minister of Canada have considered the question of increased trade which has been discussed for some time by representatives of the two nations. There is complete agreement on the objective of a greatly increased flow of trade for the benefit of both countries and substantial progress has been made towards this end. It is recognized that such an increase would be beneficially felt in all activities, because trade is but another word for increased employment, transportation and consumption.
So, again, there was no effort at concealment. As a matter of fact, on that occasion there was present at Washington, both before and after this visit with the president, a large number of the permanent officials of the departments that I have mentioned. Everyone knew or ought to 'have known that a trade agreement or something equally important was being negotiated at the time. The presence of these officials along with myself, and the interviews with the secretary of state, the president, and others made that perfectly clear.
A final decision was reached, after conference with the president on matters that up till that time had remained unadjusted between us, on the main features of the agreement subject, of course, on the president's part to further conference with his colleagues, and on my part to further conference with my colleagues. Negotiations then proceeded to the extent of drafting the agreement in a form ready for approval. On the night of November 9 I gave out the following statement, which indicated the further progress that had been made:
In view of the conversations which I have had with the President and the Secretary of State respecting a trade agreement between the United States and Canada, I have thought it advisable not to continue my journey to the south, without first returning to Ottawa to acquaint my colleagues with the substance of these conversations.
I have accordingly asked the members of the government to meet me in Ottawa on Monday, and have arranged to leave Washington to-night, so as to be in the Canadian capital in time to be present at the armistice day

ceremonies which take place on parliament hill on Monday morning. I shall probably leave Ottawa again on the day following, to complete the short vacation in the south to which I have been looking forward.
There again I think it must have been evident to any one who could read between the lines that my purpose in coming back to Ottawa was to bring to the attention of my colleagues the matters which had been discussed at Washington with the president and the members of the cabinet there, and that I would return to Washington again.
On November 11, after having had an opportunity of discussion with the cabinet and of communicating further with the president by direct telephone from Ottawa to Washington and- having ascertained that matters which bad been subject to further consideration there had been duly settled in accordance with what was acceptable to us, I was able to inform the president that the agreement had been approved by the Canadian government, and to make the following statement to members of the press:
I am glad, on this armistice day, to be able to inform you that the governments of Canada and the United States have reached a definite trade agreement. The terms of the agreement were approved by the government of Canada at a meeting held this morning, prior to the proceedings on parliament hill. The formal text is now being prepared for signature. The agreement will be made public simultaneously in Canada and the United States on the date of signature. It is expected that it will be possible to have the agreement in readiness for signature in the course of a few days.
Then followed the strenuous work of getting the agreement into final form for signature. The agreement was formally signed at Washington on November 15.
I think I should place on record what was said at Washington on November 15 when the agreement was signed. These statements help to bear out what I have said about the agreement having been framed, not with the view of one country scoring as against the other, but rather with that of both seeking to further their mutual advantage, and of doing something which might be of some advantage to the world as a whole in its present plight.
When the agreement was signed on November the fifteenth in the office of the president at the White House, Mr. Franklin D. Roosevelt, the president, made the following statement:
The trade agreement which has just been signed between the United States and Canada places the trade relations between the two countries on a basis of mutual agreement for the first time since 1866. I am happy to have a part in removing this anomaly in the relations

Canada-U.S. Trade Agreement
between two countries which are united by so many bonds of friendship and common heritage.
The signing of this agreement marks the reversal of the trend of the last two decades towards undue and unnecessary trade barriers between our two countries. I am confident that this constructive step will contribute greatly to the economic recovery of both the United States and Canada.
Mr. Cordell Hull, Secretary of State of the United States, then made the following statement:
The United States and Canada are neighbours with a common frontier of 5,000 miles. It is manifest that innumerable opportunities for mutually profitable trade between these friends and next door neighbours must exist. During 1929 the United States was selling to Canada about $900,000,000 of commodities, a substantial proportion of which was farm products, and was purchasing over $500,000,000 in return. Since 1929, our exports to Canada have slumped to about $300,000,000 or a loss of some $600,000,000. This loss has resulted in large measure from shortsighted tariff policies.
Notwithstanding its increase in population, the world to-day is producing and consuming substantially less than it did in 1929 and prior years. This trade agreement will make possible the profitable sale of much of our surplus production as it will also result in the re-employment of a large number of American wage earners now idle.
The people of our two countries have common interests and common aspirations, socially, morally and materially. The progress of each depends more and more upon the progress of the other.	.
The problems of commerce and peace facing all nations to-day are acute. While many other parts of the world are devoting their primary efforts either to war or to the feverish building of vast armaments, with consequent neglect of the dislocated and collapsed business conditions, with resultant unemployment and widespread distress, it is for the western hemisphere to point the way to a more far-seeing, constructive basis for prosperity and for peace.
The trade agreement between our two countries will, I hope, mark the beginning of a new epoch in the affairs of our respective peoples. It will mean the common advancement of their economic and their cultural life. Underlying this agreement are the twin policies of the good neighbour and mutually profitable trade.
While many other parts of the world are slipping in the direction of economic suicide, the trade agreement between our two countries marks an outstanding step in the direction of economic sanity. It seeks to stimulate sound and healthy trade relationships and thereby to restore employment to the unemployed and a wholesale prosperity to the peoples of both countries.
It sets an example of what must be done to establish a solid foundation upon which to rebuild a suitable structure of world peace.
To these two statements, one by the president and one by Mr. Secretary Hull, I made the following reply:
The kindly words and sentiments to which you, Mr. President, have just given expression,
will be warmly welcomed by His Majesty the King, in whose name I have had the honour to sign the trade agreement which has just been concluded betwen the United States and Canada.
They will, 1 know, be deeply appreciated by the people of Canada.
May I say, Mr. Secretary, that I very cordially endorse all that you have said of the mutual advantages likely to flow to our respective countries from the terms of the agreement.
On behalf of Canada, I heartily reciprocate the sentiments of international good will you have so generously expressed.
I believe with you that the signature of this agreement is witness of the joint intention of the governments of the United States and Canada to give rapid effect to our policies in a practical manner. At last our formal trade relations have been brought into harmony with the underlying realities of public and private friendship between our two peoples. The agreement will, l am confident, confer substantial benefits alike on the producers and consumers of both countries, while safeguarding with great care every essential interest. I feel sure that its value will be shown beyond question by a marked increase in commerce within the next few months. This undoubtedly will help both countries to make more rapid progress toward complete economic recovery.
Nor will this agreement benefit North America alone. All the world will gain from greater trade on this continent.
Nor will its benefits be confined to trade. To an anxious and troubled world we hope that there will be opened to the nations, by the force of our example, vistas of a surer path to progress and a more lasting road to peace.
I submit, Mr. Speaker, that in that exchange of views, made openly before the peoples of both countries, we have all that is needed in the way of argument to support the wisdom and the soundness of the agreement into which we have entered.
I have still to give the house the main features of the agreement itself. As I indicated at the outset, the purpose of asking approval in this preliminary way is to enable hon. members to have before them, before we enter into a discussion of details, a general view of the situation and the broad aspects of the agreement.
From now on I must ask the indulgence of the house while I place before hon. members the outstanding features of the agreement. Seeing that these involve to some extent the enumeration of rates and1 figures, I hope the house will permit me to do as the Minister of Finance does when he presents his budget, and quote exactly the statements I wish to give. As far as the agreement itself is concerned, hon. members have had it before them; I shall not do more than indicate what the fifteen clauses contain.
There is first the preamble. Then article I sets forth that there shall be mutual exchange of unconditional and unrestricted most-favoured-nation treatment.
Canada-U.S. Trade Agreement

Article II provides for most favoured nation treatment in regard to import and export restrictions; in the event of quantitative restrictions, quotas, etcetera, a quantity of restricted goods equivalent to the proportion enjoyed in a previous representative period shall be allocated to the exporting country.
In Article III Canada fixes maximum rates of duty on imports from the United States in relation to items enumerated in schedule I to the agreement.
In article IV the United States fixes maximum rates of duty on imports from Canada in relation to items enumerated in schedule II to the agreement.
Under Article V each country may impose on imports from the other a tax equivalent to any internal tax levied on domestic products of like nature.
Article VI provides that internal taxes on imported articles shall be no higher than those levied on like articles of national origin or any other foreign origin.
Article VII provides that no quantitative control shall be applied by either country with respect to the goods of the other, except as specifically provided for in schedules I and II; that regulations for control of markets applied to domestic products shall apply equally to goods imported from the other; that all changes must await thirty days' notice, after which, though no agreement has been reached, such change may be made; and that when such action is taken, the other country may, within fifteen days, give thirty days' notice of terminating the entire agreement.
In article VIII each country promises fair and equitable treatment to goods of the other in the event of a national monopoly over any product.
Under article IX, if either country adopts control of exchange, the other will be granted an allotment based on a previous representative period. Sympathetic consideration will be given any representations of the other in this respect.
Under article X, in the event of a wide variations in exchange rates between the two countries, either may propose modification of the agreement, and failing agreement within thirty days, may terminate the agreement in its entirety on thirty days' notice.
Under article XI, in the event of either country enacting any measure deemed as nullifying or impairing objectives of the agreement, provision is made for friendly negotiation and consideration by a joint committee of experts.
Article XII provides that the agreement shall not preclude the regulation of exports 
and imports of gold and silver; regulation of trade in arms; and regulation based on the following grounds: moral or humanitarian protection of human, animal or plant life, prison made goods, enforcement of police or revenue laws, and unfair or fraudulent practices.
Article XIII provides that only the most favoured nation clause of the agreement applies to the Philippines, Virgin Islands, American Samoa, and Guam. None of the concessions apply to the Panama Canal Zone, and the agreement is not to apply to concessions between (1) United States, Cuba, Philippines, the Panama Canal Zone and (2) British empire countries.
Under Article XIV, any concession may be withdrawn or subjected to quantitative restriction if through extension to a third country such country obtains the major benefit, and undue increase in importation from such country takes place. Then there is a provision as to how that difficulty may be settled.
The last article of the agreement provides that the agreement shall be ratified by His Majesty and proclaimed by the President of the United States. The agreement was proclaimed by the president on November 29. The following articles of the agreement came into force on January 1, 1936: article I, most favoured nation treatment; article III, concessions made by Canada to the United States in schedule No. I, article IV, concessions made by the United States to Canada in schedule No. 2. The entire agreement shall come into force on the day of exchange of proclamation and ratification at Ottawa. It shall remain in force until December 31, 1938, subject to the provisions of articles VII, X and XIV, the so-called escape clauses. The agreement shall thereafter be subject to termination on six months' notice.
Accompanying the agreement was a note given to the Secretary of State of the United States by the Canadian charge d'affaires at Washington declaring the Canadian government's intention to amend the Customs Act in certain particulars, as follows:
1. To change the method of determining values for duty purposes to eliminate arbitrary executive interference: (a) value for duty will not include advance for selling cost or profit greater than ordinarily prevails in country of export; (b) discounts shall not operate to increase value for duty purposes beyond ordinary price prevailing at time and place of shipment in ordinary trade; (c) in case of fixed values for duty purposes established under section 43 of the Customs Act there shall be an appeal to the tariff board; (d)

CanadaAJ.S. Trade Agreement
"class or kind made or produced in Canada" shall mean "in commercial quantities," and adequate notice shall be given of proposal to transfer any goods into this .category.
2.	Pending legislation, fixed valuations under section 43 of the Customs Act are abolished on twenty specified articles.
3.	Canada is to allow Canadian visitors to the United States to bring back incidental purchases up to $100 in value under regulations "substantially equivalent" to those now in effect in the United States with respect to Canada.
This is a summary of the main provisions of the agreement. In estimating the advantages of the agreement to Canada, there is one feature which does not altogether appear on its face, namely, that as the United States enters into agreements with other countries granting to such other countries most favoured nation treatment in the United States, automatically Canada gets in the United States market the benefits accorded to those other countries. In other words, the agreement, as far as the advantages Canada will obtain from it are concerned, will become increasingly beneficial to this country, because, with each new agreement entered into by the United States, we get the advantage of what is conceded by them to the other country by way of most favoured nation treatment.


Henry Herbert Stevens: The right hon. gentleman will of course admit that the same principle applies in the other direction, that goods coming from any of those twenty-three nations to Canada will receive the same treatment as goods coming from the United States into Canada.


William Lyon Mackenzie King: Yes, certainly, exchange of most favoured nation treatment is mutual. Since the agreement was signed the United States has entered into trade treaties with Honduras, The Netherlands, and Switzerland, I believe that there are some eleven other countries with which the United States are now negotiating agreements, and in the event of satisfactory agreements being arrived at, Canada will of course benefit as I have indicated.
May I point out another feature which is all important in connection with this agreement? If no agreement were entered into, there would be no guarantee that Canada would continue to enjoy the opportunities which she now has in the American market under existing rates. The United States came to have last year, for the first time, a two-column tariff. Formerly it was a general tariff the same as against all nations but now there is another tariff, which gives more
favourable rates, and of that tariff Canada has had the benefit. That benefit was extended last year when my right hon. friend was in office, because negotiations were still continuing, but if this agreement is not approved Canada will cease to have the benefit of those more favourable tariff rates and will again come under the general tariff. Moreover there is to-day no guarantee that on goods which are at present admissible into the United States from Canada free, duties may not be imposed. One of the main features of this agreement is that it assures for the next three years a continuance of the favourable opportunities which we already have in the United States market and the prevention thereby of new impositions against this country.
As I have indicated, prior to May 1,
1935,	the United States had a single column tariff, but when the trade agreement with Belgium came into operation there was inaugurated a new commercial policy on the part of the United States, namely the beginning of a two column tariff. Eventually all countries will be divided into two classes so far as United States imports are concerned, those with which the United States has trade agreements incorporating the most favoured nation clause, which will receive the lower rate, and all other countries failing to conclude an agreement with the United States which will pay the higher rates.
In embarking upon this new policy the United States government announced that the more favourable schedule of duties would be extended temporarily to all countries. This was done in order to promote friendly relations with other countries and to encourage them to conclude agreements with the United States. Meanwhile, negotiations towards such an end had been opened with a number of countries and the intention of the United States government to undertake such negotiations with others had been announced.
It was made known that Canadian exports to the United States would enjoy the benefits of the most favoured nation treatment until October 1, 1935, since negotiations with Canada had already begun. Later, when no agreement had been completed by that date, the concession was extended to January 1,
1936.	Failing an agreement by the 1st January, 1936, there was every probability that Canada would have been removed from the favoured list and would thereby have ceased to enjoy the lower rates of duty. Already Germany had denounced the most favoured nation clause of her agreement with the United States and had suffered this fate.

Canada-U-S. Trade Agreement
At the present time the difference between the two schedules of rates, the most favoured nation and the general, in the United States tariff is not great; but it is the expressed intention of the United States government to endeavour to conclude bilateral treaties with all countries with whom she has any significant amount of trade. If such a course is followed, the disparity between the two tariff schedules will increase in a cumulative fashion. Therefore, if Canada had not concluded an agreement with the United States, while the latter continued such a policy, Canadians would have had to contend with obstacles in the United States tariff that would have become increasingly onerous as time went on.
It should, at the same time, be remembered that the policy of this country toward the United States left Canada, on a number of scores, open to attack by the people in United States adversely affected thereby. We had come to think of the general tariff as one maintained practically against goods of the United States, for the latter was the only country with which Canada had an important exchange of trade, against which the general schedule was levied. The general rate applied also to goods from Russia, but trade with that country had been largely prohibited by embargoes in any case. Thus, there was considerable weight in the United States contention that we were discriminating against them and the complaints being made at Washington were adding greatly to the pressure being put upon the United States government to retaliate against this country.
The privilege enjoyed by citizens of the United States returning to that country to bring with them goods for their own use to the value of $100, duty free, has always met with opposition from those who feel themselves adversely affected by this provision. In recent years this opposition has grown due in part to the general feeling, mentioned above, that Canada has discriminated in one way or another against the United States, but more especially because this country has consistently refused to grant any similar privilege to Canadians returning from the United States. An increasing demand was being made that this privilege no longer be given to citizens of the United States returning from Canada, and a strong lobby in Washington were pressing for action to this effect. If Canada had persisted in her refusal to reciprocate on this point it is most probable that we should have lost a trade worth several million dollars yearly.

In regard to direct shipment may I say that prior to the entry into effect of the trade agreement, the Canadian tariff provided that imports enjoying the lower rates of the intermediate tariff must not pass in transit through countries to which the intermediate rates were not extended. Similarly, goods entering Canada under British preferential rates must not pass through a non-British country, if they were to secure full benefit of British preferential treatment. The United States had for some time asked for the complete abolition of these direct shipment provisions, which they contended were grossly discriminatory against United States ports and transportation facilities and against which they had threatened retaliatory action for some years. Representative White had twice introduced a bill of this nature and on January 7, 1935, representative McCormack introduced a similar measure. The good offices of the United States Department of State had succeeded in delaying the enactment of such legislation by holding out the promise that the question would be dealt with whenever a commercial agreement with Canada was concluded.
Canadian transportation officials have for some years made representations to the government of this country pointing out the serious nature of this threat and appealing for the abrogation of the direct shipment regulations in the case of United States so far as the intermediate tariff was concerned. The president of the Canadian Pacific Railway Company has pointed out the importance of the carrying trade which this country does for the United States. According to his figures goods from foreign countries shipped in transit through Canada to the United States were valued at over $65,000,000 during the fiscal year of 1931; while all Canadian imports, both empire and non-empire, shipped in transit via the United States amounted to less than $9,000,000.
It should be noted that a simple exchange of most favoured nation treatment would have automatically extended to the United States the transshipment privileges which they derived from the trade agreement. The provisions for direct shipment in connection with British preferential rates are not affected in any way.
Apart from the handicaps previously mentioned which Canada would have experienced in United States markets had she failed to secure most favoured nation treatment from that country, there was the further danger of a number of items of which Canada is the chief supplier being transferred from the free

Canada-U.S. Trade Agreement
list in the United States tariff. The most important commodity falling under this head is that of newsprint.
While newsprint still remained on the free list it was by no means certain that it would continue to do so. It has been proven that newsprint can be produced on a commercial basis from the type of pine which the southern states (Jan supply in large quantities. For some time these interested states have demanded a high protective rate on this commodity, in order to stimulate domestic production. Their demand was assuming such proportions that the government at Washington was finding it increasingly difficult not
to take action. The serious nature of this threat to the Canadian export trade will be seen once the figures of the trade are looked into.
I have here a statement showing an analysis of concessions granted to Canada, based on United States imports from Canada in the year 1929. Unless the house insists I shall not read it, but with the permission of hon. members I should like to place it on Hansard.


Richard Bedford Bennett: As I have to speak, I
should like to know what is in it.


William Lyon Mackenzie King: I will have it sent at once to my right hon. friend.



ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929

[Stage Direction]
Total imports	 $503,000,000
fDeduct non-commercial items. . .$ 38,000,000
Commercial items.. Deduct items of Canada is not principal supplier
Canada principal
supplier	
Free of duty
(present laws) . Bound by Swedish
agreement	
Bound by Canadian agreement.. Not bound	
Dutiable
(present laws) . Duties reduced.. Duties bound.. . Duties unchanged.
465,000,000
78,000,000
387,000,000
253,000,000
16,000,000
221,000,000
16,000,000
135,000,000
79.000.	000 9.000,000
47.000.	000
*([DOT]Non-commercial items include-
Household personal effects.. . .$ 4,229,000 Articles temporarily imported. 1,811,000 Articles returned	 16,295,000
Items of which Canada is principal supplier	
. (Total value of items on which U.S. policy would permit negotiations.)
Items directly affected
Free entry assured 221,000,000 Items subject of	.
reductions	 79,000,000
Present low rates
assured	 8,000,000
[Stage Direction]
Items indirectly affected- (upwards of)	
16,000,000
Wood pulp (certain kinds of which Canada is not principal supplier) continued free entry assured by Swedish treaty.
Also a number of less important items.
This list will increase as United States signs other bilateral trade treaties.
"Imports from Canada of articles on -which duties were reduced were, in 1929, 94 per cent of t'he total imports of these commodities from all countries.
In the following summary, the figures of Canada's exports are based on United1 States import figures, since Canadian figures of exports do not, in certain cases, correspond to the headings of the United States tariff.
May I now give an outline of the principal agricultural concessions granted to Canada: Live Cattle
Reduction in duty ranging from 33J per cent to 50 per cent. Most important class, weighing 700 pounds or more, reduction from three cents to two cents per pound up to 155,799 head of cattle. Almost all of this quota will be allocated to Canada. Resultant average saving in duty will amount to around $9 per head of cattle. Exports 1929, $9,900,000; in 1934 they had fallen to $4,000.
Calves
Of less than. 175 pounds each, duty lowered from two and one-half cents to one and one-half cents per pound. Quota 51,933.
Dairy Cows
Reduction in duty from three cents to one and one-half cents per pound. Quota
20,000	head per year.
Cream
Reductions in duty from 56& cents to 35 cents per gallon. Quota 1.500,000 gallons per year. Exports 1929, $5,000,000 of 1934, negligible.
Seed Potatoes
March to November reduction in duty from 75 cents to 45 cents per hundredweight
[Stage Direction]
Canada-U.S. Trade Agreement
Other three months reduction to 60 cents per hundredweight. Quota 750,000 bushels, which is three times current export.
Turnips
Reduction from 25 cents to 12^ cents per hundredweight. Exports in 1929, nearly SI ,000,000.
Clover and Grass Seed
Fifty per cent reduction on these items. Exports 1929, S2,000,000; 1934, very small.
Maple Sugar
Reduction from six cents to four cents per pound. Exports in 1929, $2,500,000; 1934, less than $500,000.
Hay
Reduction from $5 to $3 per ton.
Horses
Reduction from $30 to $20.
Live Poultry and Dressed Chickens
Reduction 50 per cent and 40 per cent* respectively.
Cheddar Cheese
Reduction 29 per cent. Exports 1929, nearly $2,000,000; 1934, $140,000.
Apples, Strawberries, Cherries, Peas, Frozen or Canned Blueberries
Duties reduced.
Grains
Ten per cent ad valorem rate bound on feed wheat and by-products of grain.
May I point out that in no case where it has not been possible to get concessions from the United States is any Canadian industry in a worse position than it was before. It is really in a better position by virtue of the fact that there will be in all probability a reduction on some of the implements or instruments of production used in that industry and also a lessened cost of living, and as well an increased demand for commodities as a consequence of improved conditions resulting from increased trade.
The principal concessions on fishery products granted to Canada were:
Halibut
Reduction from 2 to 1 cent per pound. Exports: 1929, $676,000; 1934, $261,000.
Salmon (Fresh or Frozen) and Swordfish
Reduction from 2 to 1J cents per pound. Exports: 1929, $659,000; 1934, $719,000.
Richard Bedford Bennett: That is swordfish not
frozen?


William Lyon Mackenzie King: Salmon, fresh or frozen, and swordfish.


Richard Bedford Bennett: Swordfish must not be
frozen.


William Lyon Mackenzie King: I am not an
authority on swordfish.


Richard Bedford Bennett: It is in the schedule.


William Lyon Mackenzie King: I will not cross swords -with my hon. friend on that. To continue:
Salmon (Pickled or Salted)
Reduction 25 to 20 per cent ad valorem.
Smoked Herring
Reduction from 1J to | cents per pound.
Eels
Reduction from 1 to J cent per pound.
Razor Clams (Canned)
Reduction from 23 per cent ad valorem to 15 per cent.
Lobsters and other Shell Fish
Bound on free list. Exports: 1929, over $3,000,000; 1934, approximately $2,250,000.
Sea Herring and Smelts (Frozen or Fresh)
Bound on free list. Exports: 1929, $1,250,000; 1934, $893,000.
The principal concessions on forest products granted to Canada are:
Lumber and Timber-Fir, Pine, Spruce,
Hemlock and Larch
Reduction in duty from $4 to $2. Quota for Douglas fir and western helmlock, 250,000,000 feet per year. No quantitative limitation on other species. Export in 1929, $38,000,000; 1934, less than $6,000,000.


Richard Bedford Bennett: Is that 250,000,000 feet
each for hemlock and fir, or for the two together?


William Lyon Mackenzie King: For Douglas
fir and western hemlock.


Richard Bedford Bennett: That would be the two
together?


William Lyon Mackenzie King: Yes.


Richard Bedford Bennett: That is what I wanted
to be sure about.


William Lyon Mackenzie King: To continue: Maple, Birch and Beech Flooring
Reduction from 8 per cent ad valorem to 4 per cent. Exports:	1929, $259,000; 1934,

Canada-U.S. Trade Agreement
Pulpboard (in Rolls) for use in the manufacture of Wall Board
Reduction from 30 per cent ad valorem to 15 per cent and from 10 per cent to 5 per cent.
Shingles
Bound on free list. Quota 25 per cent United States consumption. Exports: 1929 nearly $7,000,000; 1934, $3,500,000.
Logs, Posts, Ties, Poles, Pickets et cetera
Bound on free list. Exports: 1929, $12,000,* 000; 1934, less than $2,250,000.
Now I will give the principal concessions on mineral products granted to Canada:
Ferro Manganese
Reduction from 1J cents to one cent per pound manganese content (as a result of concession in the agreement and of a reduction in the Brazilian agreement on manganese ore). Exports: 1929, $3,600,000, 1934, $250,000.
Ferro Silicon
Reduction from 2 cents to 11 cents per pound metallic content. Exports: 1929, $1,193,000; 1934, $188,000.
Lime (n.o.p.)
Reduction from 10 cents to 7 cents per hundredweight. Exports: 1929, approximately $300,000; 1934, $74,000.
Feldspar (Crude)
Reduction from 50 cents to 35 cents per long ton. Exports: 1929, approximately $250,000; 1934, $66,000.
Basic Refractory Material
Reduction from 30 per cent to 271 per cent ad valorem. Exports: 1929, $200,000; 1934, $167,000.'	.
Gypsum, Asbestos (unmanufactured); Cobalt and Cobalt Ore, Nickel Ore, Matte and Oxide; Crude Artificial Abrasives (n.o.p.).
Bound on free list. Exports: 1929, approximately $16,000,000;	1934, approximately
$8,000^000.
I will now give the principal concessions granted to Canada on manufactured goods. A large number of manufactured goods is included in the products on which the United States duties are lowered, the most important being those in which hydro-electric power constitutes an important factor in the cost of production:
Acetic Acid
Reduction from 2 cents to 11 cents per pound. Exports: 1934, $1,846,000.
Ferro Alloys and Synthetic Resins and Acetylene Black
Reductions in duties ranging from 25 to 50 per cent.
Patent and Harness Leathers
From 15 per cent and 121 per cent respectively to 10 per cent. Exports: 1929, over $2,000,000; 1934, negligible.
Pipe Organs
Reduction from 35 per cent to 25 per cent.
Electric Cooking Stoves and Ranges
Reduction from 35 per cent to 25 per cent ad valorem.
Sporting Goods
Reductions ranging from 25 to 50 per cent.
Whiskey (Over Four Years Old)
Reductions from $5 to $2.50 per proof gallon. This is a most important concession. That is not only Scotch whiskey, as my right hon. friend supposed, but all whiskey.
Newsprint paper and those classes of wood pulp of which Canada has been the chief supplier to the United States are bound to the free list. That is one of the most important concessions. Our exports under this head in 1929 were $167,000,000, and in 1934 approximately $89,000,000.
I wish to deal now with the concessions granted to the United States on the basis of Canadian imports. Here it will be noticed that the concessions which have been granted to the United States in most cases involve a very substantial benefit to our Canadian producers as well as consumers because they are on commodities with respect to which there has been for some time past a demand for reduction in duty.
The total imports to which these items have reference amounted in 1930 to $847,000,000, and in 1935 to $304,000,000. There are eighty-six reductions in duties; seventy-nine are bound to the present rates, and fifteen are bound to the free list. There are concessions altogether with regard to 180 different commodities.


['I was asking the indulgence of the house. But I am satisfied to let the matter go.\nProgress reported.']
Richard Bedford Bennett: That is outside of the
general and intermediate tariff?


William Lyon Mackenzie King: Yes. What I wish to point out in connection with the concessions made is that where concessions have been granted by Canada they are for the most part with respect to a number of individual items, while the concessions granted by the United States to Canada are for the most part on categories rather than on individual items. While, therefore, the number of concessions granted by the United States to Canada is less on a numerical calculation, they may mean more in Teality since the concessions are granted on categories of articles rather than on individual articles.
Canada-XJ.S. Trade Agreement


Henry Herbert Stevens: I think the right hon.
gentleman stated a moment ago that these concessions affected an importation of some S800.000.000 in 1929, and I was wondering whether that figure was correct. It seems extraordinarily large.


William Lyon Mackenzie King: Our total imports in 1930 were 8847,000,000, and in 1935 they had fallen to $304,000,000. What I should have added-I omitted it to save time-was the valuation of the articles that will be affected by the reduction. The eighty-six reductions in duty would have affected imports in 1930 amounting to $123,000,000, and in 1935 to $23,000,000. The seventy-nine bound to the present rates would have affected imports amounting to $66,000,000 in 1930, and $21,000,000 in 1935. The fifteen bound to the free list would have affected imports amounting to $62,000,000 in 1930 and $32,000,000 in 1935. In other words, the 180 commodities on which concessions have been granted would have affected imports to the amount of $251,000,000 in 1930, and to the amount of $76,000,000 in 1935.


Richard Bedford Bennett: Is that the calendar or
the fiscal year?


William Lyon Mackenzie King: 
Richard Bedford Bennett: How would that be?


William Lyon Mackenzie King: By giving the intermediate tariff under most favoured nation treatment. Magazines are protected only under the general tariff; under the intermediate tariff, they come into this country free of duty.
The point of controversy or discussion between us would seem to narrow down to what my right hon. friend said the other day with respect to this being a balanced agreement. I do not think there can be much room for controversy or difference apart from this because he was prepared to exchange commodities on the bases that have been indicated. It is simply a question of whether the concessions granted on the one side counterbalance in a reasonable way the concessions granted on the other. As I have pointed out, in .making the agreement we have been looking to the future, careful to see that no advantage was gained by the United States over our own country.
In granting the intermediate tariff Canada extends to the United States reductions in duty on some 700 items, but the intermediate tariff has been designed to afford Canadian industries protection against other countries, most of which have lower standards of living than has the United States. Consequently, in according the United States the intermediate tariff we are granting that country the minimum which she might expect from the conclusion of a trade agreement with Canada. That the late government fully recognized. This may be seen by the Canadian note of November 14, 1934.
On our part we will benefit to an increasing extent from such further reductions in duty as the United States may grant in trade agreements which she is negotiating with other countries; and, in time, these additional concessions which Canada will receive by virtue of the most favoured nation clause will fully balance the benefits which the United States has derived from being accorded the intermediate tariff of Canada.
In addition to granting the United States the intermediate tariff we have reduced the duty on eighty-six items in the Canadian tariff below the intermediate rates at present in force. Canada, on her part, has received reductions in respect to sixty-three items of the United States tariff, in addition to the binding of twenty-one items on the free list.
It might as I have said appear that numerically Canada has given concessions on 12739-33
a greater number of items than those on which she has received concessions. It must be remembered, however, that the great bulk of Canadian exports falls within a few categories of goods embracing a large trade and affecting only a limited number of classifications of the United States tariff. United States exports, on the other hand, cover a wide range of products of a diversified nature, which are enumerated in greater detail in Canadian tariff schedules than in the corresponding schedules of the United States tariff.
In the case of nickel and aluminum it was felt that any changes in existing duties would have been economically unjustified at the present time as tending to upset large investments of capital for the conversion of these metals, while so far as copper is concerned surplus stocks in the United States precluded any concessions respecting this product.
Of the other products not covered by the trade agreement the most important are codfish and table potatoes, and in the case of both these products low prices and depressed conditions in the industries concerned in the United States made it impossible for the government of that country to consider the granting of concessions on these products at the present time.
Assurance of the continuance of the moderate rates of duty under which low grade wheat, and byproducts of grain have been exported in considerable volume to the United States was the only direct concession that the government were able to secure for the grain growers of Canada. Both countries are normally heavy exporters of grains and high duties have been maintained against imports of grains in order to assure United States producers against drastic falls in price levels. To have reduced the duties on grain at this stage would have taken this assurance away from United States growers without conferring corresponding benefits to Canadian producers, because even with reductions of 50 per cent in existing duties, we would still have been excluded from the United States market, at least until such time as the United States is placed on an import basis with respect to grains. When that time comes the whole position can be reconsidered and an outlet sought in that country for a part of our surplus production of grains.
A summary of the concessions granted to Canada shows that on the basis of the 1929 trade, Canada has secured:
Assurance of the continued free entry of goods, amounting in value at that time to $221,000,000.
Reductions in duties, $79,000,000.



Canada-U.S. Trade Agreement
Bindings at existing rates of duty, $8,000,000.
The total value of trade directly affected by the agreement, on the basis of 1929 volume amounts to $308,000,000.
There is a further large item which amounted in 1929 to $16,000,000, representing certain kinds of pulpwood, the continued free entry of which is assured by virtue of the trade agreement concluded between the United States and Sweden. Thus, the total volume of Canadian exports to the United States affected by the agreement is, on the basis of the 1929 figure, upwards of $325,000,000.
I have before me further proof of the benefits derived by Canada from United States concessions in connection with the binding on the United States free list of certain items, and in connection with the most favoured nation clause. However, I think I shall leave these for discussion until we are dealing with the trade agreement in greater detail.
The binding on the United States free list of twenty-one items of importance to Canadian trade is one of the most valuable features of the agreement. On many of these products there has been an intermittent agitation by interested parties for the imposition of a duty. The trade agreement gives assurance to Canadian exporters of these products that their trade will not be interfered with during the period of the agreement. In the case of newsprint especially, this should give a stimulus to the reorganization of the whole industry on a sounder footing. In 1934, Canadian exports of newsprint paper to United States were valued at over $60,000,000.
I should like to conclude by making the following references to the benefits to be derived by Canadian industry. There will be a benefit through the increased buying power of the Canadian public, with a consequent stimulus to Canadian industry. Markets in the United States will be opened to Canadian industry which had not that opportunity before. There will be cheaper means of production through reduced rates on machinery and implements of production, Canadian industry thus being placed on a more favourable competitive basis.
While granting the intermediate tariff to the United States will involve reductions in duties on United States products in the case of about 700 of the 1,400 items of the Canadian tariff, in very few cases can the reductions be said to be harmful. Here adjustments can later be made. It should be remembered that Canadian industries will retain, as regards the United States, the same measure of protection as has been obtained against the industries of nearly all foreign countries, including those

countries which are not only highly industrialized but with standards of living vastly below those prevailing in the United States.
The items on which Canada granted reductions in the rates below the intermediate tariff were carefully selected so as to give the maximum benefit to the Canadian consumer and user of machinery without causing injury to Canadian industry.
Canada retains entire freedom to adjust the rates of the intermediate tariff in respect to all items not included in schedule I of the agreement. This schedule comprises 180 items or less than 13 per cent of the total number of items in the Canadian tariff; in the ease of 86 items, provision is made for reductions in existing intermediate rates of duty; and in the case of 94 items, for the maintenance of existing intermediate rates of duty. During the three years' duration of the agreement, Canada may not increase the intermediate rates of these items.
The anti-dumping provisions of the Canadian tariff are still in effect and so far as values for duty are concerned the commitments have been made to the United States chiefly with a view to eliminating arbitrary executive interference with the normal course of trade. Full safeguards have been retained for dealing with abnormal situations and for protecting Canadian industries against the dumping by other countries of goods which are sold below fair market value in the country of origin, or below cost of production plus a reasonable advance for selling cost and profit.
There will be other and ampler opportunities for detailed exposition and discussion of individual rates of duty affected by the agreement, both on the resolution inviting the house to consider the agreement and on the bill giving its provisions the force of law in Canada. At this time, I desire only to refer in general terms to some of its larger effects on the Canadian economy. Basic primary industries, dependent upon accessible export markets for the profitable sale of a large part of their production, are once more enabled to enter the United States and guaranteed against a tariff increase on their products. By the very agreement that ensures them export markets, their production costs are appreciably lowered by the elimination or reduction of the duties on their implements of production. Similarly the ordinary inarticulate consumer, whose interests have been shamefully neglected, has already found out in lower prices and a wider range of choice what the agreement with the United States will mean to him: increased purchasing power of primary

Canada-US. Trade Agreement
producers, stimulated business for distributors and transport trades, lower costs of production generally and an increase in real wages through a reduction in many items of the household budget,-these are some of the ways in which the agreement is already making itself felt, and justifying our decision to spend every effort on achieving it.
*Let me add this in conclusion. While these are immediate benefits of a material kind, I do not think one can emphasize too strongly what it will mean, not only to the United States and Canada but to other countries as well, that a step has been taken on the part of these two nations in the direction of promoting trade on a mutually beneficial basis, at a time when the world has gone well-nigh mad as a result of pursuing the fallacies of economic nationalism. We have seen already how appreciatively this agreement has been referred to by the British press; we have seen that the example set by Canada and the United States in this regard may be followed shortly by a similar arrangement between Great Britain and that country. The French press has referred in appreciative terms of what it sees in this agreement as indicating a better day for the world in the matter of international trade. Other countries have made like favourable comments. I think we are quite justified in the belief that we on this continent have at last broken the hard crust of economic nationalism and have opened the way to a more extensive trade which will be of advantage to producers and consumers alike, which will assist our railways, will bring about an increase in purchasing power, and which may help very materially to lift our country out of the depression from which it has been suffering for so many years and to restore an era of prosperity and of better relations with other lands.


Richard Bedford Bennett: I do not suppose that
my hon. friends opposite would be prepared to concede to me the same degree of sincerity as they claim for themselves. If I say that I greatly regret that I cannot support this resolution, and that I regret this very sincerely, I state but the simple truth, and I shall give the reasons that have induced me to arrive at that conclusion.
I might point out, at the outset of my observations, which I shall endeavour to make brief, that the resolution is in terms of the exact one that was moved by myself in dealing with the United Kingdom agreement. The words are exactly the same, and those who are concerned, if they will look at Hansard of that day, will find that the then 12739-33i
Minister of Finance, at the conclusion of my remarks, moved the house into committee of ways and means in order that the details of the changes in the schedules might be considered. I do not know that any discussion of the procedure adopted will serve any useful purpose, but those who may be interested will find the record in Hansard of that day; and the opportunity thus afforded by the then Minister of Finance, in moving the house into committee of ways and means, of discussing the various schedules was quite as clear as the procedure that is now being followed. But surely the right hon. gentleman (Mr. Mackenzie King) is in error when he assumes that the adoption of this resolution does not in every detail mean the approval of the agreement; for all one has to do is to look at the language employed in the resolution itself, and there cannot then be the slightest doubt that those who approve that resolution accept, sanction and approve the agreement itself in every detail.
I should not like in any acrimonious sense to comment upon the observation of the right hon. gentleman as to the contrast between the action taken by myself now and that which he took in 1932. Will any of us ever forget his denunciation of that agreement as the work of a Tory conspiracy-a Tory conspiracy headed by the Right Hon. Stanley Baldwin, now Prime Minister of England, and aided and abetted by the Prime Ministers of all the overseas dominions? Those who care to read Hansard of that day and see the record of the long delays that ensued by reason of the discussion will readily realize the sense of irony which apparently the right hon. gentleman was aware of when he spoke of the assistance he gave in the passing of those agreements.
I am sorry, sir, that I must also deal, somewhat differently from the way in which the right hon. gentleman dealt with it, with the history of the parties in connection with reciprocity. Those who are familiar with the reciprocity agreement of 1854, which expired by notice in 1866, will possibly recall that when the 1878-79 budget was delivered by the Conservative party, through Sir Leonard Tilley, a provision was inserted in that budget that afforded the opportunity at all times to enter into an agreement with the United States for reciprocal treatment of natural products. In 1874 the Hon. George Brown negotiated an agreement, which by the way was never signed, but which in draft form was sent to the United States and never heard of again.
From that time on there was a constant effort to renew a reciprocity agreement. In

Canadri-U.S. Trade Agreement
the early nineties the United States embarked upon a policy of reciprocity and entered into reciprocity agreements with many countries. The Liberal party in 1887 declared for a form of commercial union which in 1891 culminated in an election on unrestricted reciprocity and brought forward the letter of the Hon. Edward Blake, in which he protested so strongly against the policy of his party that the matter is perhaps in the memories of most members of the house. In 1892, after the election, there went to Washington three Canadian delegates or plenipotentiaries to discuss and deal with the problem of reciprocity. They failed, because the United States was not prepared to grant to the government of that day or to any other government reciprocity in regard to natural products unless a substantial list of manufactured goods was also included in the agreement. So from 1S92 on the negotiations resulted in nothing. In 1896 a Liberal government came into office. A Democratic government was in power in the United States, and as I shall presently show, the Democratic party has been the enemy of reciprocity and not its supporter in days gone by. I shall read from an authoritative source on that point. When in 1S96 the Liberal government came into power and the Democratic government was in office there w'as not, for reasons given by the right hon. the Prime Minister, any opportunity afforded to Sir Wilfrid Laurier to negotiate or discuss reciprocity on any reasonable basis. With the advent to power, however, of a Republican administration the appointment of a commission headed by Lord Herschell was secured, and as members of that commission we had Sir Wilfrid Laurier, Sir Louis Davies, and many other illustrious Canadians. Our old friend the former member for Labelle, Mr. Bourassa, was one of the joint secretaries of that commission. They sat for months and held meetings at Quebec, but in the end they failed- and I shall give the language of the historian in that regard-and when it was all over, when Sir Wilfrid Laurier had finally concluded that failure was the only result that could follow from his efforts, he used these words:
There will be no more pilgrimages to Washington. We are turning our hopes to the _old motherland.
Those are the words of Sir Wilfrid Laurier when failure resulted from the operations of the joint high commission. He then turned his attention to the motherland, and in 1907, as those who are familiar with the proceedings of the imperial conference of that day will remember, he made strong, increasingly strong * 
efforts to secure a preference for Canadian goods in the British market. Mr. Dealcin of Australia was foremost in his advocacy of that policy. But Mr. Asquith, Mr. Churchill and Mr. Lloyd George pointed out that it was impossible of realization, and so after that conference Sir Wilfrid Laurier and the government of that day once more turned their attention to the United States of America.
Therefore it is fair to say that from confederation down to 1911 there had been a constant effort on the part of all parties in Canada to secure a measure of reciprocal trade with the United States of America. So far had that effort gone that the Liberal party in 1887 and in 1891 had actually urged unrestricted reciprocity or commercial union. Many letters and communications have been published since from Sir Wilfrid Laurier to Goldwin Smith, and letters from Goldwin Smith reciting the views held by Sir Richard Cartwright and Sir Wilfrid at that time. The acute differences within the Liberal party showed that there were at that time many people in public life who shared the views of the Hon. Edward Blake.
In 1911, under circumstances that need not now be gone into fully, instead of Canada seeking an agreement with the United States, the United States in truth sought one with Canada. That agreement included some natural products. It also included a substantial number of manufactured products. In addition to that it provided, not that these matters should be carried into effect by agreement, but rather that this should be done by joint action, that is by the congress of the United States enacting its tariff act and the Dominion of Canada enacting an exactly similar act. A number of items were dealt with favourably or preferentially by both countries, but it must not be overlooked that that agreement could be terminated by a change in tariff incidence of a single item. That was one of the reasons strongly urged against the agreement. Further, as the right hon. gentleman has said, many of us objected to it because of its uncertainty, its instability, and the direct effect it had upon the development of north and south, as against east and west routes upon which we had expended such vast sums of money and created so many lines of transportation.
At any rate the Conservative party opposed that agreement. But it was not alone in that regard. Distinguished Liberals throughout Canada-many of them, thousands of them- joined with the Conservative party of that day. Unless they had done so, undoubtedly the agreement would not have been defeated.

Railway Act-Rates on Grain
As I pointed out then, the uncertainty was such that a change in a single item wrecked the whole, and it was competent for either parliament on the one hand or congress on the other, by changing a single item in that list, thus to terminate the agreement. I need hardly point out that the war followed in 1914, and it would have been impossible during the war to maintain that arrangement in the terms in which it stood. Therefore, so far as we are concerned there was a period of time, 1912 and 1913, when the agreement might have remained in force; but whatever party was in power in Canada could not possibly have maintained the agreement during the period of the war. I think that is common ground, admitted by every fair and impartial observer or student of our political history.


Some hon. MEMBERS:: No, no.


Richard Bedford Bennett: I said, "fair and impartial." It must be remembered that I made a great distinction. I have not talked with any fair and impartial man of the Liberal faith who suggests for a moment that the reciprocity agreement of 1911 could have been maintained in this country during the war. And what is more, it could not. All you have to do is to read it and you will realize why it could not. All you have to do is to give it the most casual reading and you will realize that it could not have been maintained. Be that as it may, during the long years from 1914 to 1918 it was impossible to discuss matters of that kind.
But President Wilson having come into office, without asking any concessions from us except in two minor matters to which I shall presently refer, gave us free access to the United States market. AVe had free access to that market for years. We built up a vast trade between Canada and the United States. AVe established a channel of trade; we made it increasingly deep; and then all of a sudden, without notice, that channel was blocked and that trade destroyed. I have said in the house, and I repeat, that I saw many Canadians in western Canada, engaged in the ranching business, ruined. I remember one great rancher who reckoned his wealth in millions who was completely and absolutely ruined because he had made his preparations for the United States market. For, mark you, the cattle business cannot be built up in a year or two years. If you go into the business of raising cattle to-day you must prepare to ship them and to market them two and three and even four years hence. It followed therefore that, plans having been made upon the basis of the Underwood tariff, Canadians in western Canada, finding suddenly that they were confronted with a tariff wall
over which they could not send their commodities except at a great loss, were compelled to go into bankruptcy and were in fact ruined. I shall not deal further with that history beyond saying that' if any hon. members are interested and will turn to the Cambridge History of the British Empire, volume six, they will find there the record of these tariff matters.
There is another document to which I shall refer. It is the diplomatic memoirs of the late General Foster, who at one time was Secretary of State of the United States and who had more to do with the negotiation and discussion of matters affecting reciprocal trade between the United States and other countries of the world than had any other statesman of his time. He was minister to many countries. He ultimately, as I said, became Secretary of State of the United States. He met our delegates in 1892;- he met the joint commission in 1898, and he dealt with many of these matters as I have indicated.
On motion of Mr. Bennett the debate was adjourned.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. RAILAVAY ACT AMENDMENT
The house resumed from Friday, February 21, consideration of the motion of Mr. Reid for the second reading of Bill No. 2, to amend the Railway Act (rates on grain).
Hon. C. D. HOAVE (Minister of Railways and Canals); Mr. Speaker, when the debate on this bill was adjourned last Friday I was making a few comments. I stated that this question is now before the governor in council, and obviously any partisan position on my part would be quite out of order. However it does not seem to be out of order for me to bring out a few points in reference to the subject. A considerable point was made of the fact that export and domestic rates to Fort AVilliam are equal. But it may be pointed out that Fort AVilliam is not a seaport, therefore not comparable with Vancouver. Montreal on the other hand is a seaport and railway rates to that port present a differential between domestic and export. Similarly Saint John and Halifax are sea ports and there is a decided differential between domestic and export rates to those cities. So while much was made of the argument that the situation in the west differs from that in the east I think the facts do not support that view.

Railway Act-Rates on Grain
Coming back to Vancouver, we find three rates on grain on Canadian railways; an export rate, which is the Crowsnest rate applied to the movement westward, a domestic rate which applies on high grade wheat, that is wheat of milling quality, and which is about double the export rate, and a third rate for low grade wheat and grains of that sort. This latter rate was put into effect voluntarily by the railways two or three years ago. On the United States side of the line they formerly had three rates; an export rate, a domestic wheat rate and a rate for coarse grains, but two years ago there -was a hearing before the Interstate Commerce Commission, and I think the judgment of the commission was appealed to the supreme court. The result was that these three rates were combined into one rate, but I point out that the combined rate which applies on all three movements is practically equal to our domestic rate. In other words the Interstate Commerce Commission have never been able to take the view that our own board of railway commissioners have taken, that the Rocky mountains should be ignored in making rates. I think the people of British Columbia who feel that they are suffering an injustice under the domestic rates on grain westbound would do well to keep in mind that they have a distinct advantage both in their export rate and in their feed grain rate, and that the domestic rate is the one that applies south of the border for all movements.
The question then comes as to whether after all any great injury is done to the Pacific coast on account of the existing differential. True, if the rates were equalized as the bill in question suggests, Pacific coast consumers would enjoy a somewhat lower rate on feed grain for the poultry and dairy industries, and on high grade wheat that is consumed at the coast. On the other hand a very important grain for its dairy and poultry industries is corn, and I may remind them that most of the com that enters Canada comes either from the Argentine or from Africa, and that Vancouver enjoys the cheapest rates for carriage of corn of any part of the country except the Atlantic seaboard ports. Alberta imports a great deal of corn through Vancouver, and we have had no great objection from Alberta to the fact that the domestic rate which applies on Alberta wheat to Vancouver applies also on corn coming in through Vancouver and consumed in Alberta.
In spite of the handicaps of which we have been told, the poultry business on the Pacific coast is perhaps in as prosperous condition
[Mr. Howe.)
as at any other point in Canada. In fact I think one carload of eggs moves from Vancouver into the Montreal market each week, indicating that the egg business at least must be on quite an efficient basis to make such a movement possible. I mention these points to show that there is another side to the freight rate picture than that presented to us by some hon. members from British Columbia. I have not examined the evidence given before the railway board in the case now on appeal. That case will be heard by the governor in council, whatever happens to this bill. It seems to me therefore that the mover of the bill has served all proper objects in bringing this discussion before the house, and I would suggest that at this time he might consider withdrawing his bill.


Richard Bedford Bennett: Mr. Speaker, the hon. member for Comox-Alberni (Mr. Neill) made an observation the other evening as to the effort made by the late government to induce the railway companies to consider the situation in connection with rates on feed grains with the shippers or with the authorities of the province of British Columbia. I hardly think the language he suggested is the language that was used, but we did suggest a conference, and as a result an agreement was arrived at which I understood was regarded at the time as being fairly satisfactory. But after listening to British Columbia members during this debate, I gather that they are not very well satisfied with what took place, and regard the relief given as utterly inadequate. I merely mention this lest it might be thought that by silence I acquiesced in the statement as to the language used made by the hon. member for Comox-Alberni, which is hardly the fact.


Mr. H. J. BARBER (Fraser Valley):: Mr. Speaker, I have listened with care to the remarks of the Minister of Railways (Mr. Howe) in regard to this bill. He made a statement about corn, intimating that corn is used for cow feed in the western part of the country. I can assure him that we do not use com to feed cattle in our district. But we have been using considerable corn for feeding poultry, and it was the opinion of a large number of members from western Canada some time ago that we might well substitute barley for corn and thereby increase the market for barley from Manitoba and other parts of the west. That is one reason why the poultry people of our section have been asking for a lower rate on feed grain, namely, in order that we might give preference to the

Railway Act-Rates on Grain
Canadian product. I do not think I need deal further with the remarks of the Minister of Railways.
But to deal with the bill, the unfortunate part of this freight rates matter is that it has been dragged into the political arena, and some persons in British Columbia have taken it upon themselves to try to convince the people that they are the only real advocates of lower freight rates on feed grain to our province. I think I am safe in saying that every session for the last ten or fifteen years this matter has been up in the house, and such men as the hon. member for East Kootenay (Mr. Stevens), the hon. member for Comox-Albemi (Mr. Neill) and others who have been here for some years will bear out the statement that irrespective of party we have endeavoured to secure for the Pacific coast and the producers of our section of British Columbia a lower rate for feed grain. I am not going to review the whole situation, since this bill was up before us in 1925. An appeal was made to the government which was in power prior to 1930; that appeal was dismissed and no further action taken.
Just as my leader has said, the only action taken was back in 1933 at which time there was an appeal to the privy council, and through an order in council which was issued certain directions were made. I have before me the report of the appeal of the Canadian Freight Association, No. 1848, order No. 51669, Board of Railway Commissioners for Canada, and at page 33 I find these words:
These rates, among other matters, were then the subject of an appeal from the board's judgment to His Excellency the Governor in Council, which was dismissed by order in council P.C. 349, dated February 25, 1933, in which it is stated:-
"One of the most important subjects involved in the said appeals was grain shipped from prairie points to points in British Columbia for use for feeding purposes, it being alleged that by a reduction in the rates of the lower grades of grain not only would an outlet be provided for a large quantity of grain -which was not marketable under present conditions, but the development of the dairy and poultry industries of British Columbia would 'be greatly assisted.
As a result of negotiations which took place with members of the governments of the provinces of British Columbia, Alberta, Saskatchewan and Manitoba during the period of the recent .interprovincial conference, the representatives of the railway companies intimated that in order to assist in the movement of the lower grades of grain for the purposes outlined' above, they would be prepared to put into effect tentatively substantial reductions in rates on the grades of grain involved. This offer has since been accepted by the governments of the said provinces as satisfactory to them.
Under that the rate was reduced from 41i cents to 30 cents. British Columbia has sent representatives to appear before the railway commission, and has spent a considerable amount of money in paying these men, but despite those payments the only results which were ever secured were obtained at the time the late government held office. Credit for those results I believe must go to the Hon. R. J. Manion, then Minister of Railways and Canals.


Mr. HOWE:: Does the hon. member say that is the only result that was ever secured? Does he not remember 1922, when the Rocky mountains were removed from the western rate structure?


Harry James Barber: I am talking about domestic rates at the present time. The farmers of the Fraser valley did not benefit from that, but I admit that the port of Vancouver did. We are pleased to have had that, but we are now discussing a question of domestic rates. May I now refer to the appeal. I believe the hon. member for New Westminster (Mr. Reid) made application for the appeal. I find in the report this statement:
Mr. T. Reid, M.P., made application dated May 30, 1934, on behalf of the Fraser Valley Surrey Farmers' Cooperative Association, for an order of the board directing the Canadian Pacific and Canadian National railways to establish the same rates on feed grains and mill feeds from prairie provinces to points in British Columbia for domestic consumption as are now in effect on grain and grain products from the prairie provinces to points in British Columbia for export.
In addition to the hon. member's application communications asking for reduction in the rates were received from the Fraser Valley Milk Producers' Association, the corporation of the district of Surrey, the hon. member for Vancouver East (Mr. Mclnnis), the Chilliwack board of trade, through myself, the Vegreville chamber of commerce and the council of the: city of Vancouver. These applications were in favour of the reduction. Then we had others which were not so favourable. There was the corporation of Delta which had forwarded a communication opposing any reduction in rates on feed grain and mill feed from the prairie provinces to British Columbia owing to the fact that a considerable amount of grain was produced in the province, and that therefore the grain growers there would suffer. At that time, in 1933, they pointed out that in British Columbia a total of 6,161,000 bushels of grain was produced, of which there were 1,717,000 bushels of wheat, 4,507,000 bushels of oats and 307,000 bushels of barley. Then we
52U

Railway Act-Rates on Grain
had further objections along similar lines from the Delta Farmers' Institute. Further, Mr. W. W. Southin of Ladysmith, British Columbia, stated that he had been in the poultry business for twenty 3'ears and he communicated with the board, opposing any reduction in the rate. The gentleman representing the province of Alberta advocated that the differential should be reduced to three cents over other rates. These are the points the board had to consider.
The hon. member for New Westminster, while representing an association of farmers also represented the province. I find these words in the report:
On July 24. the Attorney General of the province of British Columbia, advised that Mr. Reid, M.P., would represent that province in this matter.
The hon. member was retained by the province. The board claims that no new arguments were advanced, and at this point I should like to refer to one or two arguments the hon. member has raised. I believe he mentioned them on the occasion upon which he spoke a few nights ago, and they are worthy of some consideration at this time. The hon. member made a statement with reference to the shipment of grain to Japan, and return, for about twenty-five cents less than the rate to British Columbia. So that there may be no misunderstanding I shall quote the hon. member's statement before the board of railway commissioners.
In this connection. Mr. Reid stated (p. I486): "There was a time last year when I believe we could have brought good Canadian wheat back from Japan to the Fraser valley at about twenty-five cents a ton less than the cost of inferior grades brought from a distance of 642 miles." The distance named is the Calgary-Vancouver mileage. The rate on what is termed inferior grades, namely, feed grain as described in the C.F.A. tariff No. 145, is 30 cents, or $6 per ton. The export grain rate is 20 cents or $4 per ton. Mr. Reid stated the average ocean rate, Vancouver to Yokohama, in that year was 61 cents per bushel, or about $2 per ton, so that the cost to Yokohama would be $6 per ton-
Or exactly the same as it cost to land the grain in Vancouver. That is not taking into consideration that there might be another $2 on the return trip from Yokohama to Vancouver. Hon. members will see that in the argument advanced the other day the computation was not quite correct.
I believe the minister referred to the United States rate. The United States rates in the state of Washington, considered from the standpoint of our domestic rate, were a little lower, but in comparison with the new rate under tariff 145 the Canadian rate

is still lower. I could go through these arguments for some time, but I will summarize brieffy by stating that a man presenting the case for the farmers' association and representing the attorney general of a province should have had some new evidence before he appeared before the board. One argument he advanced was that the personnel of the board had been changed. It would appear however that the evidence was the same as had been filed, and that nothing new had been presented.
As I stated a short time ago the difficulty has been that this matter has been injected into the political arena. My first experience was in 1930 when the hon. member for Van-couver-Burrard (Mr. McGeer) who, I am sorry to say, is not now in his seat, came to my district and there secured a nomination from the farmer party and the Liberal party, no doubt expecting that if he could secure all the Liberal and farmer votes his opponent would have a very small chance of being elected. His main plank in that campaign was freight rates. He said, "I have served you well, and I am coming to you now and asking you to elect me as your representative that I may still continue to serve you." Cartoons were circulated throughout the district showing that Chinese and Japanese were having our grain delivered to them at a rate of twenty cents while the poor farmer in the Fraser valley had to pay 41i cents. Well, Mr. Speaker, I find that the hon. member for Vancouver-Burrard did serve British Columbia about the year 1925 and perhaps part of 1923. Members here at the time very kindly handed over to him their files and all the information they had in order that he might carry on in the interests of our province. But he did not work for nothing, for I find according to a record which has been supplied me from Victoria, that at the conclusion of his services he presented a bill to the province for SS9.307.49. His bill was carefully reviewed and he was allowed S52.723.23. When the farmers of my district found out that he had been well paid for his services they came to the conclusion that there was nothing more coming to him.
I do not blame the hon. member for New Westminster, but he also appeared here and was retained by the provincial government, and I find that the hon. gentleman was paid S380 for his trip to Ottawa. A question was placed on the order paper in the provincial legislature and I find, according to the votes and proceedings of the British Columbia legislature for February 22 of last year, that the

Railway Act-Rates on Grain
following questions were answered by the premier:
1. Is Mr. Thos. Reid, M.P., retained by the province as provincial representative in connection with freight rates or marketing questions, or either?
The answer to that question was "Yes." This further question was asked:
Has he been paid any sums; and, if yes, how much and on what basis?
The answer to that question was:
$380; procuring information, compiling data, stenographic services, telegrams, travelling and hotel expenses.
The hon. member for New Westminster came to Ottawa and as far as I could find out he delivered the same speech that he gave in the House of Commons, and he expected to get results from that.
The minister has suggested that the hon. member should very kindly withdraw this bill. I say to the minister and to the house that the people of the Fraser valley and of British Columbia expect some action from the government on this question. In the last four or five years during which this bill has been before the house it was supported to a man by the Liberal party. The Prime Minister (Mr. Mackenzie King) supported it; the Minister of Justice (Mr. Lapointe) supported it; the Minister of Trade and Commerce (Mr. Euler) supported it; indeed, every member who then sat on this side of the house supported the bill. They endorsed the principle that the Crowsnest rates should be extended through to the coast. Therefore, if the hon. member for New Westminster said in his riding, "If you will elect me and return the Liberal party to powder you will receive the benefit of the extension of the Crowsnest pass agreement and an equalization of freight rates," I say he was warranted in making that statement because of the action of the Liberal party in the house, and I say, that the people of our district and of British Columbia are not going to stand for any suggestion that the bill be withdrawal.
The minister says that an appeal is pending before the privy council. The appeal before the privy council is of a wholly different nature. It is an appeal on the question of feed grains, another matter entirely; but this is an extension of the Crowsnest pass rates.


Clarence Decatur Howe: My hon. friend is mistaken. It is an appeal on the domestic rate.


Harry James Barber: I understood from the
papers that it was as I indicated. At any rate the minister can very easily remedy that, instead of waiting like the government did in
1930 until the privy council disappeared and the appeal along with it. The minister could recommend the passing of an order in council dismissing the appeal and accept this legislation as a government measure, and that is what the people of our province expect.
In conclusion I want to say to the hon. member for New Westminster that the poultrymen generally throughout British Columbia are not worrying to-day so much about freight rates as over what is going to happen to their industry under this Canada-United States trade agreement, which I shall have an opportunity I hope of discussing in the near future. In the meantime they are looking to the government and to the party that supported this legislation for the last four or five years to come through now and make this bill law.
Mr. G. W. McDonald (Souris): Mr. Speaker, I desire to speak very briefly on the motion now before the house. It means a great deal to the people in our part of the country. We have been passing through very severe droughts during the last five or six years, and have had to bring in a great deal of seed and feed grain. I know the railways give a very favourable rate on seed grain, and they reduce the rate by one-third on all feed grain, but the fact still remains that after cutting off one-third of the rate they have collected as much on the domestic rate as is being paid on the export rate. In the last few days, we have heard a great deal about the export rate and the domestic rate. My opinion is that the railways are giving a very favourable export rate for the purpose of encouraging the sale of our grain abroad. But would it not be just as laudable to encourage the consumption of grain within our owm provinces?
I am rather in sympathy with the resolution moved by the hon. member for New Westminster (Mr. Reid). I know that the hon. member who previously occupied the seat I now occupy in the house moved that a duty be imposed on com for the purpose of encouraging the home consumption of barley. It might be said that we would not use very much barley, but much more grain has been brought into our part of the country during the last six years than we have shipped out, and we have had to pay the domestic rate on the grain brought in. It is quite true that the farmers have been treated pretty liberally, the government paying two-thirds and the railway the other third, but altogether the railway possibly collected more money on the domestic rate than they would

Railway Act-Rates on Grain
have collected if the grain had been shipped out. It is pretty hard to make the ordinary member of the house who is not an expert on freight rates, and still harder to make the average farmer understand why we should have two rates for carrying the same commodity over the same distance, and in many cases the domestic rate is higher even for a shorter distance. We would like to have an opportunity to appear before the board of railway commissioners. I desire to put it on record that the people whom I represent wish to see the domestic rate done away with, and I believe there is some justice in that view.
Before this bill is withdrawn I would suggest that the government at least promise the hon. member for New Westminster that something will be done in the matter of freight rates because there is really not much use in referring the matter to the board of railway commissioners as, judging by past experience, we pretty well know beforehand, what sort of an answer we are going to get from them. The people of Manitoba, and I think the people of Saskatchewan and Alberta, believe this equalization of freight rates would be a very fine thing for the western provinces and for the railways themselves, because it must be remembered that raising the tariff does not always bring in a higher revenue, nor does raising the railway rates bring a higher revenue to the railways. Put the rates on the same basis and the railways will not be the losers; they will be the gainers.


Mr. THOMAS REID:: (Westminster): Mr. Speaker, I have listened very attentively to the various speeches which have been delivered in connection with this bill which has been introduced into the House of Commons now for the fifth time. Before dealing with the remarks of the Minister of Railways (Mr. Howe), I should like first to deal with some of the remarks made by certain hon. members, particularly the hon. member for Fraser Valley (Mr. Barber). We have to-night witnessed the spectacle of a certain type of politician who during an election weeps crocodile tears for the people of his district and then when he enters the house evades giving the support he should give. On every occasion when I introduced this bill he stated that it was too bad that this matter was being dragged into politics, but he himself went around during the last election saying that reductions were necessary.


Harry James Barber: Mr. Speaker. I rise to a point of order. Freight rates were never made an issue in my campaign until the hon. mem-

ber injected it at the eleventh hour. I never made freight rates an issue during the election,


Mr.   RETD@: I have never made in the house a statement that I have not been ready to substantiate to the limit, and I am ready to stand behind the statement I have just made. It is touching the hon. member pretty hard; the truth is evidently pinching him. He has always endeavoured to drag this matter down to the low depths of that political stuff which we sometimes come across in the backwoods.


Harry James Barber: It could not be brought down any lower than the hon. member has brought it.


Thomas Reid: The hon. member referred to the hon. member for Vancouver-Burrard (Mr. McGeer) receiving some $70,000 or $80,000 when the hon. member for New Westminster only received $380.


Harry James Barber: And he made only one trip.


Thomas Reid: I am glad the hon. member brought up this matter. I should like to point out-I want all the lawyers in the house to take note-that I believe I got better results for $380 than were obtained at the time the $70,000 or $80,000 was spent. I got two of the commissioners to support me, just a little more than was achieved in the previous appeals.
While we are on this subject we might as well clean up some other matters. During the last election I did not state that the Liberal government would put the Crowsnest pass agreement into effect. During the election I stated, as I have stated in the House of Commons, that if I was elected this would be the first bill introduced in the house, and there it is. I stated that I would keep on fighting until British Columbia got some measure of equality. Those are the statements I made from the beginning to the end of the campaign, and I repeat them here to-night. They are the very statements I made to the former Minister of Railways, Mr. Manion. The hon. member referred to the poultrymen not worrying. He will probably have something to say about the trade agreement. He is the type of individual who claims that the trade agreement signed by this country and the United States is the cause of the low prices being received for eggs because of the great influx of eggs from across the line.


Harry James Barber: I deny that statement.


Some hon. MEMBERS:: Order.


Harry James Barber: On a point of order-


Thomas Reid: Let the hon. member take his medicine.

Railway Act-Rates on Grain


Harry James Barber: On a point of order; the statement made by the hon. gentleman is not correct. Before I left home I made no such statement with regard to the treaty. This remark is to be compared with many others the hon. member is making to-night.


Thomas Reid: There were other remarks to the same effect, that the poultrymen were being hurt because this country had signed a treaty with the United States allowing the importation of eggs in great numbers. The week before I left for Ottawa I took the trouble to find out what was being done in the state of Washington. I discovered that eggs were selling for from three to four cents a dozen more than in British Columbia; that no eggs had come into the province and that if any did come in, they would have to be stamped


Harry James Barber: What about baby chicks?


Thomas Reid: -yet the hon. gentleman makes remarks like those to which we listened a few minutes ago.


Richard Bedford Bennett: What has all this to do with the railway bill?


Thomas Reid: I will take this up [DOT] later on with the hon. member for Fraser Valley. He really had the temerity to deal with the remarks I made before the board. He stated that I had brought forth no new argument. Well, I wrote to him asking him to give me some help, as will be found in the records of the board of railway commissioners. I received no assistance; I was allowed to put up the fight practically all by myself, and without boasting, that fight was some fight.


Harry James Barber: I was not retained by the province.


Thomas Reid: The two railway companies should have had the hon. member for Fraser Valley in their employ. I made the statement then that we were able to buy good Canadian wheat and bring it from Japan at a lower cost than it could be brought from the prairie provinces. The railways could not overcome that argument because I had the shipping bills to prove my case. I was able to prove every point of my case, yet the hon. member ridicules a statement I made which the railway lawyers could not or did not care to dispute very seriously. I do not intend to use up all my time in refuting the hon. member for Fraser Valley because he stands refuted without any further statements from me.
I should like to deal now with some of the remarks made the other evening by the hon. member for Outremont (Mr. Vien), whom I was rather surprised to see entering
the debate to oppose this bill. The hon. member is a former member of the board of railway commissioners, and I should like to deal with some of the remarks he made in connection with the bill. He stated that the rate was an export rate and that it was intended to help Canadian producers. What about the domestic producers? What about the producers of butter, cream, poultry and eggs in British Columbia? Are they not to be helped? I contend that it would be far better to help the domestic producer of bacon, eggs, poultry and other agricultural products rather than to ship our grain, including barley, to Europe and elsewhere and then have to meet in hams and bacon on the old country and other markets the competition of people who are able to procure good Canadian grain at fifty per cent less than the domestic producer has to pay. If export markets have been restricted during the last few years it is strange that no change has taken place in our policy in an endeavour to encourage domestic markets. Producers of poultry, eggs, butter, hams, bacon and so on should be given a better chance to compete, and with some degree of fairness and equity, against foreign competitors.
Then the hon. member 6aid that we must distinguish between a paying and a losing rate. As I have previously stated, the railways have no expert capable of giving the cost of hauling grain. I challenge the hon. member for Outremont, as I did the lawyers before the board, to deny that the export rate to British Columbia is a paying one. If the railway companies can haul seventy or eighty million bushels of wheat at a paying rate, why then should the people of British Columbia be called upon to pay twice that rate? I asked them to produce figures to disprove my statement that it was a paying rate, but for some reason or another they did not do so. I then reversed the argument. I said:	Assuming for a moment, which I do
not, that it is a losing rate, is it fair that the people of British Columbia should be called upon to pay the deficit so that their foreign competitors may obtain grain at fifty per cent of the cost which we in British Columbia have to pay? I submit that it is most unfair. The statement was made before the board that they were accused of flattening out the Rockies. Well, a large proportion of our people to-day are still under the impression that when going into British Columbia you have to go up one side of a mountain and down the other, but I would point out that as a matter of fact we have in our province the finest railway grade in

Railway Act

Rates on Grain
the whole of Canada. The grade is one-half of one per cent over the Canadian National, and that railway can take sixty cars either into British Columbia or from that province into the prairies, whereas its competitor, the Canadian Pacific railway, is faced with an averaged grade of 2-2 per cent, a very heavy grade indeed, so that it can take only twenty-five cars as its limit.
If I might offer one suggestion in connection with a reorganization of the railways it would be this. If we are looking for economy and efficiency, I submit that in carrying freight, to the Pacific coast at least, the Minister of Railways should urge that it be carried by the railway that can carry it, and that is the Canadian National. As I say, they have a grade of one-half of one per cent and can take into Vancouver or New Westminster three times as many cars as the Canadian Pacific railway can. As a matter of fact, they could take more, but owing to an arrangement with labour or the conductors they have agreed to take no more than sixty at one time.
Can hon. members visualize what happens with grain going into British Columbia, a whole trainload of say sixty cars, with one engine and one crew? Maybe forty or fifty cars in that trainload are carrying freight	at	20| cents per hundred	pounds,while the back portion of the train, consisting of cars of goods for consumption in British Columbia is charged 411 cents. Is there any equity	or	justice in that?	There	is notWe have a case that cannot be successfully disputed, and in the few minutes that remain to me	I	will indicate the	reasons	why Ihope and	believe that the	present	Liberal
administration will do far more than the last government did; for invariably their argument has been that the House of Commons is not the place to fight freight rates. They have contended that we should go before the board of railway commissioners. I am now going to read order in council, P.C No. 886, of June 5, 1925, issued by the last Liberal administration under the leadership of the present Prime Minister (Mr. Mackenzie King), giving directions to the board of railway commissioners to equalize freight rates. I think hon. members will agree with me, when I read this order in council, that its language is as plain as any could possibly be to the layman. But we all know what lawyers are and how they can twist words. That is no reflection on you, Mr. Speaker.
It will be remembered that in 1925 the Liberal administration of the day dealt with this matter in the House of Commons; it was not the board of railway commissioners

that dealt with it. It is true that administration omitted to put into the amendment to the Railway Act the same provision with respect to grain going west as was made in connection with grain going east to Fort William; but having regard to that error, this is the direction the government of that day gave to the board, and I make the positive assertion that the board disobeyed the order of parliament. This is the order, and I would ask laymen at least among hon. members to pay particular attention to it; I should be afraid to ask lawyers to construe it, for I have had some experience with them:
The committee are of the opinion that the policy of equalization of freight rates should be recognized to the fullest possible extent as being the only means of dealing equitably with all parts of Canada and as being the method best calculated to facilitate the interchange of commodities between tlie various portions of the dominion, as well as the encouragement of industry and agriculture and the development of export trade.
I will not read the whole of it; I will come to what I consider the meat of this order, so far as the adjustment of freight rates is concerned:
The committee are further of the opinion that as the production and export of grain "and flour forms one of the chief assets of the dominion, and in order to encourage the further development of the great grain growing provinces of the west, on which development the future of Canada in large measure depends, it is desirable that the maximum cost of the transportation of these products should be determined and known, and therefore are of opinion that the maximum established for rates on grain and flonr, as at present in force under the Crowsnest pass agreement, should not be exceeded.
Now there is omission No. 1; the board did not obey that order, and they do not yet know what it costs to haul grain. Then further down:
The committee therefore advise that the board be directed to make a thorough investigation of the rate structure of railways and railway companies subject to the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rate structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities.
I do not know what plainer language could be written into an order than that-equal to all persons and localities, and as I have pointed out, over the Canadian National road into British Columbia we have the lowest grade on any portion of the railway system in Canada. That cannot be too often repeated. But even if it did cost the Canadian Pacific a little more, which I doubt, to build a railway into British Columbia-and

Railway Act-Rates on Grain
I know that they have in some parts a grade of 2;2-let me tell lion, members what that railway has received in return. It got a cash subsidy of 125,000,000; constructed railway including service, $38,000,000; cash in exchange for subsidy lands, $10,000,000, and 18,206,985 acres of selected lands -valued at the time of earning at $27,310,000, making a total value of subsidies from the people of this country of $100,000,000. Inasmuch as they have been paid for constructing this line, why should they claim in perpetuity that they should receive more because their grade is 2-2? If they have been paid, why should there not be an equalization and why should they not give us in British Columbia the same benefit as they extend to other provinces?
I want to deal for a moment with one or two statements made by the Minister of Railways, and I am coming to his argument last. He said that in the United States there is no grade such as the Canadian National has-well, he did not mention the Canadian National. I would point out that in the United States there are heavier grades than the Canadian Pacific has to contend with, because the land in Canada slopes downward to the north pole, Edmonton being
1.800	feet lower than Calgary, and Calgary
1.800	feet lower than Seattle. The further south you go the higher the grade.


Clarence Decatur Howe: I was speaking of grades of grain.


Thomas Reid: I am sorry I misunderstood the minister; I thought he was speaking of grades on railways. To speak for a moment on rates, it is true that in the United States they have only one rate, but I doubt very much the minister's statement that it is equal to or comparable with our domestic rate. I have not the time to go into that, but I put the figures on record last session for the information of the then Minister of Railway, Mr. Manion, and I have them under my hand. I would point out to the minister that while they have only one rate from the wheat fields to the state of Washington, they carry all grain, bran, flour, shorts, or wheat at that rate, and it is lower, whereas in Canada, on grain going west, there is a temporary rate that applies only to feed grain, but on fifty per cent of the requirements of the poultry men and dairy men we are still called upon to pay 41J cents.
The minister has appealed to me to withdraw the bill for the time being. This is a matter that is giving me a great deal of concern at the moment. I am not unmindful
that, after all what I am after is results, not for myself but for the people of British Columbia; and as I pointed out, I intend to keep fighting this cause, 'because we have justice on our side. Not always does a person get results because he has justice on his side, but I believe we have a case that cannot be successfully refuted; certainly it has not been so far.
I am also not unmindful that in 1931, when I came to my first session of parliament, the position was almost the same. There was an appeal then before the governor in council, and I, coming into the house for the first time, placed a resolution on the order paper. The then prime minister, now leader of the opposition (Mr. Bennett) rose and stated, truly, I think, that his government had not yet had time to hear that appeal, and he asked me at that time if I would withdraw the resolution, promising, so he stated, that just as soon as parliament was prorogued they would give the matter attention. I, being in those days younger and more innocent, agreed to this. When I came back the following year the situation was exactly the same; nothing had been done. I was wondering, when the new minister of railways was making the same suggestion, whether I was going to be caught a second time, because "once bitten, twice shy." However, as the appeal to the governor in council at this time on behalf of the province has been lodged by myself I am inclined to do this, but I warn the minister and the government now that I am looking for some practical results, and I shall not 'be content if the suggestion by the minister is being made merely by way of a sop. This is the beginning of a new parliament. I expect far more results from it than I did from the last, because, as I stated, Mr. Speaker, invariably the party to your left have taken the stand that the matter is one for the board of railway commissioners, and I have pointed out that an appeal to that board is absolutely useless if we are to expect any results. So I have come to the highest court in the land, the court of the common people, to plead on behalf of British Columbia, and if I withdraw the bill for the time being it is with a view to getting action from the present government, and with the warning, not a threat, that if something further is not done they will certainly have a battle on their hands.


Walter Edward Foster: I call to the attention of -the house that the request of the hon. member for leave to withdraw his -bill will require unanimous consent. Is it the pleasure of the house that the hon. member shall have unanimous leave to withdraw his bill?
Supply-External Affairs


Some hon. MEMBERS:: Aye.


Some hon. MEMBERS:: No.
Motion (Mr. Reid) for second reading, negatived.

The house in committee of supply, Mr. Sanderson in the chair.



[Stage Direction]
Civil government-External Affairs-
Salaries, including the appointment of L. C. Christie as counsellor at $6,000 per annum, $100,000; contingencies, $69,500.
Charles Hazlitt Cahan: On this item I should like to ask the prime minister when the white paper, so called, is to be brought down.
Right Hon, W. L. MACKENZIE KING (Prime Minister): I had expected to be able to lay the white paper on the table of the house to-day. It is being translated into French, and I wish to table the French copy at the same time as the English. I think I can promise to give my hon. friend the white paper to-morrow, I hope, in both languages.


Charles Hazlitt Cahan: I also asked the other day that certain orders in council with respect to the enforcement of sanctions against Italy should be laid on the table. I have read the proclamations or copies of them which the Prime Minister laid on the table, and I find that some at least of these orders in council were passed under the provisions of the Treaties of Peace Act, 1619; at least it so recited in the proclamations. I call attention to the fact that under the Treaties of Peace Act, 1919, orders in council made pursuant to that act must be placed before parliament in the most expeditious manner as soon as parliament is assembled. So I think the right hon. gentleman will find that he will be derelict in his duty if he does not produce these orders in council forthwith.


William Lyon Mackenzie King: I believe the orders in council will be found included in the white paper. It is quite true that a few days have elapsed since the opening of parliament, but I hope my hon. friend will realize that there have been a good many matters to which the government has had to give attention upon first coming into office. If in anything we have been a day or two late, I am sorry.


Charles Hazlitt Cahan: Will another opportunity be given to discuss the contents and other matters relevant to the white paper and the imposition of sanctions against Italy? I
TMr Speaker.]
think this item should stand until the white paper is published so that we may have an opportunity to discuss that matter when the relevant estimate is before the committee.


William Lyon Mackenzie King: May I suggest to my hon. friend that the relevant estimate would be the one referring to Geneva and to the League of Nations? Certainly there will be ample opportunity on that item to discuss the white paper and all matters incidental thereto. This item is simply for salaries of the Department of External Affairs and it indicates no increases over those presented under the regime of my right hon. friend (Mr. Bennett) other than such as may be of a statutory nature.


Richard Bedford Bennett: And Mr. Christie.


William Lyon Mackenzie King: And Mr. Christie, yes.


[Stage Direction]
Item agreed to.
Miscellaneous-battlefields memorials, $84,950.
Mr. CHURCH:: What policy has the government regarding memorials on battlefields in Ontario? Large amounts haive been voted for memorials around the city of Quebec. I do not object to that because they are valuable, but if one province has been overlooked since confederation it is Ontario and its historic places. Take the Niagara district, rich in history. Little or nothing has been done except for the erection of a few cairns here and there. Starting at the Niagara river at lake Ontario, what have you? Old Fort Mississauga, a heap of ruins. Near the steamboat landing is old Fort George, and the place where the first parliament of this country met at Newark, now Niagara. Further up the river are Queenston Heights and Lundy's Lane. But this district has been altogether overlooked. We need to take a lesson from the people of the United States in regard to preserving these historic places. Lord Macaulay in his History of England said in regard to memorials of the siege of Londonderry in the north of Ireland, as follows:
The humble tombs of the . . . captains have been carefully sought out, repaired, and embellished. It is impossible not to respect the sentiment which indicates itself by these tokens. It is a sentiment which belongs to the higher and purer part of human nature, and which adds not a little to the strength of states. A people which takes no pride in the noble achievements of remote ancestors will never achieve anything worthy to be remembered. . . .
The battlefields of the war of 1812 are heaps of ruins, while just across the river at Fort Niagara in the state of New York, a

Supply-Miscellaneous-Battlefields
district visited by millions of people, we see what the United States government have done to the old fort on that side. Ontario is entitled to better treatment in this matter. I have every confidence in the new minister, because I know he frequently visits this district and the city from which I come. I raised this question in the house when I first came here in 1922 but there has been no improvement. On the United States side they have spent large sums of money at Fort Niagara and rebuilt the fort, and spent a lot of money on the memorials there.
There is a decrease of $1,839 in this vote.
I venture to say that hardly a five cent piece has been spent in Ontario except for a few little cairns or slabs at about $1.75 a yard with a little inscription on them. That is not fair. In that same Niagara district there is Ridgeway where battles were fought in 1866, and in 1867 the Fenian raid. In the city I come from we celebrated last year the one hundredth anniversary of the incorporation of the city. Its first mayor was the grandfather of the present Prime Minister (Mr. Mackenzie King) who did much for responsible government in this country and reasserted the principles of magna charts, and the Prime Minister attended that centennial and did honour to the memory of William Lyon Mackenzie. I hope the day will come when there will be adequate memorials in Ontario, marldng the events of the war of 1812, and in the prairie provinces for the Northwest rebellion and other historic events. I do not object to the money that has been spent on the battlefields around Quebec, but other parts of the country should have similar treatment. I hope the new minister will give this his consideration.
We are looking for tourists. When they come to Ontario, many pass through Fort Erie where an important battle was fought, and they see on the battleground there an ancient building covered with chewing tobacco advertisements. At Chattanooga in the south, in the valley of the Cumberland where Grant made his reputation there are about forty-six monuments on that battlefield about thirty miles long, where each of the states built a monument about the size of our Brock's monument. In the village of Chippawa what have we? I saw something in the newspaper recently about Laura Secord, and the shabby treatment of her portrait. In the village of Chippawa where the power canal has been diverted there is a little bit of a cottage on the south side of the street w'here she lived, but hardly anything showing that is where Laura Secord lived. The old home in the village of Queenston is nowhere,
and at Queenston where William Lyon Mackenzie had a printing newspaper office, and where the first printing press was set up in upper Canada the building is a mass of ruins. You would almost think you were in Belgium during the war.
Last summer was the fiftieth anniversary of the Northwest rebellion. There are only a few left of the old boys who went to the northwest at that time, I think less than a score in Toronto of the Queen's Own, the Grenadiers and the Governor General's Bodyguard commanded by the late Colonel Denison. These men went out to the northwest in 1885 to prevent this country from being dislocated and dismembered, and to avenge the death of that great patriot, Thomas Scott. There was a meeting last summer in Winnipeg, but they could not get sufficient public support to send about two hundred men from Halifax, Montreal and Toronto to visit the old places. The battlefields of Cut Knife, Batoche and others should be marked out and preserved. These battlefields in our own country should be marked as well as the battlefields overseas. We are behind the times. We had many millions to spend on railways but apparently almost nothing for this purpose. I commend the work which the department has been doing; they have certainly done good work, but there should be equality of treatment for all the provinces.
I believe in a principle for confederation in the words of the old Cornish battle cry: Each for all and all for each. That should be the confederation battle cry for this parliament. Parliament is supposed to be a club where a member can express his views, whatever they may be. In my opinion the rising generation should be given a practical demonstration of the sentiment of preserving these historic places of interest throughout our country, I suggest that something of a practical nature should be done to commemorate Laura Secord, and that something should be done to restore the home where she lived in the village of Chippawa and at Queenston, and that section of the Niagara district, and to restore the ruins of the various historic places of the war of 1812-1814. We should have something to commemorate those people who did so much in the early days towards building up our country. I hope the minister, who has been in our section quite a number of times and has always been welcomed there, will see that something is done in the Niagara district in connection with this matter.
I commend the good work done by the battlefields commission at Quebec. The late Colonel Denison of Toronto was one of the first commissioners and was appointed by the Laurier government. In my opinion the work

Supply-Miscellaneous-Battlefields
which was done in Quebec should be extended to all the other provinces of confederation, where there are historic places connected with the early history of this country.


Mr. McIVOR:: I am sure hon. members
are in favour of honouring the battlefields, but so far as I am concerned may I say that. I am more interested in the men who were spared to come back, some of whom have not enough to eat, or enough to wear, or a decent job. I am sorry we could not hear the hon. member for Broadview (Mr. Church) but when he turns his back upon one to speak, it is difficult to hear Undoubtedly we want to honour the battlefields, but it is more important that we have bread and butter and decent jobs for those men who risked their lives and who, upon coming back, cannot get the bare necessities of life.


Ernest Edward Perley: I understand the Vimy memorial will be unveiled this summer.


Hon. IAN MACKENZIE (Minister of National Defence):: Yes.


Ernest Edward Perley: Would the minister make a short statement as to what the plans may be?


Ian Alistair Mackenzie: The
amount of $25,000 is included in the present vote for the unveiling of the Vimy memorial on July 26. The departmental committee which has been working upon this has not yet concluded its arrangements, but it is intended to invite certain guests to go from England to France. I agree with the hon. member that the voluntary commission in Canada has done one of the most wonderful works accomplished by any public-spirited body in our history. This is the last of eight memorials now built in France. Canada has spent something more than S2,253,000 upon the building of these memorials, and I think it is only fit that when the last and greatest memorial of any kind in France is unveiled on July 26 we should have the cooperation of all parties in this chamber. My department would welcome suggestions from my right hon. friend or from any hon. member who may have suggestions as to the specific details of the dedication.


Richard Bedford Bennett: Has this anything to do
with the vote concerning the memorial on the square here in Ottawa?


Ian Alistair Mackenzie: No, this memorial has to do with the European war, and the vote will disappear after this year. I believe an amount of $4,000 or $5,000 will be given to the Imperial War Graves Commission for the protection and preservation of these sites.


Richard Bedford Bennett: We have already completed our payment of the endowment for the purpose of maintaining the graves?


Ian Alistair Mackenzie: Yes.


[Stage Direction]
Item agreed to.
To provide for the book of remembrance of members of the Canadian forces, and Canadians in the forces of the British Empire who lost their lives in the great war, $8,000.
Ian Alistair Mackenzie: There is an increase of $2,500 to provide for a lithographic reproduction of the book of remembrance, so that it, as well as the original book in the memorial chamber, may be available to the public. It is anticipated that the artist's contract will be completed in 1937, and the idea is to have a lithographic reproduction of the original book.


Mr. HEAPS:: Some hon. members are not familiar with the work involved in the preparation of the book and do not know what the total cost is to be. Would the minister give that information?


Ian Alistair Mackenzie: The total cost of the book was $35,000. I believe it was carried out by James Purves, and I believe there is an advisory committee who up to the present time are satisfied with the progress of the work and the artistic nature of the work carried out.


Thomas Reid: We should be very proud of our peace memorial in Ottawa. Any person who enters the chamber must feel impressed. Would there be any possibility of producing a book which could be secured at small cost by those of the public who visit the peace tower?


Ian Alistair Mackenzie: That is being considered at the present time.


Ernest Edward Perley: Can the minister state how many names there will be in the book? I understood him to say that it would be finally completed next year.


Ian Alistair Mackenzie: Yes; the contract was entered into in 1932, and the estimated duration, of the work was placed at five years. The work is up to date, and in round figures I believe there will be about
68,000	names.


[Stage Direction]
Item agreed to.
[Stage Direction]
Expenses connected with the dominion observatory at Ottawa, $46,800.
Richard Bedford Bennett: Would the minister give particulars?

Supply-Interior-Observatory


Hon. T. A. CRERAR (Minister of the Interior):: The increase is due to the fact that one additional member has been taken on the staff, and also some new equipment is required in the seismographical work. During the past year considerable damage was caused to the seismographical instruments.


Ernest Edward Perley: By the earthquake?


Richard Bedford Bennett: I guess it was about the time of the election.


Thomas Alexander Crerar: Yes, I think it was due to the election.


Abraham Albert Heaps: Can the minister state what work is performed in the observatory in Ottawa?


Thomas Alexander Crerar: I freely confess that this work, which is of a highly scientific nature, is a little beyond the range of my knowledge or experience. 1 may say however that the work has to do with measurements as to the positions of stars, and the relation of those measurements to measurement of time. Communications by radio are maintained with other observatories, and as a result we are able to have very accurate time. For instance, in Ottawa we have six hundred electrical clocks, three of which are in this chamber. It is important to have the correct time, otherwise the [DOT]hon. member for Winnipeg North might lose some time in one of the speeches he makes to the house. Then, the observatory studies sun spots and their effect on climatic conditions and plant life. Recent theories of the physicists indicate that sun spots have a material bearing on mundane matters, and we in Canada wish to make our contribution to the study of these problems. Then, the seismographical branch does an important work; when earthquakes take place we are able to do our share towards ascertaining where they may be. Then, there is the abstruse problem of getting an accurate method of measuring gravity. What particular relation this has to the ordinary affairs of the country I am unable to say, but I believe it is of considerable importance.


Mr. MacNICOL:: I could see the minister's lips moving all right, and I noticed that hon. membeis sitting around him were apparently enjoying what he -was saying, but we could not hear a word of it over here. He likely gave a fair explanation of what this expenditure is for, but surely to goodness hon. members are entitled to hear what the minister has to say, and for my part I did not hear a word of it.


Thomas Alexander Crerar: I am really very sorry if my hon. friend did not hear me.


Jacob Nicol: Well, it is no fault of my ears.


Thomas Alexander Crerar: I am quite willing to take all the blame for the inability of my hon. friend to hear me, but if he will read Hansard to-morrow he will get a general idea of the work that is carried on in the observatory. I might remind hon. gentlemen that the observatory has been established for over thirty years.


Abraham Albert Heaps: The minister has shown a profound knowledge of all that is going on at the observatory. Although I noticed that at times he referred to his notes, still in spite of that he evidently knew something about gravity and the Einstein theory as well, and I observed how particular he was about stargazing. I suppose he was looking at his political stars more than at anything else.


Ernest Edward Perley: Are the telescope and other mechanical devices at the observatory up to date as compared with the way in which similar work is done in other countries? I should like to know whether our observatory is able to perform the functions it ought to in assisting in general observations throughout the world.


Thomas Alexander Crerar: I am informed that the equipment at the observatory at Ottawa is reasonably adequate for the work it is doing. As my hon. friend probably knows, in the Victoria observatory we have the second largest telescope in the world, although that will not be the case when the new telescope is presently installed at Mount Wilson observatory.


Ernest Edward Perley: Does that mean that the work of this observatory is not as effective as it used to be and that it is giving place to the one at Victoria?


Thomas Alexander Crerar: No.


Mr. SPENCE:: Will the minister give us a detailed statement of how this money is going to be spent, how many employees there are, and so on? How many men are hanging around doing nothing?


Thomas Alexander Crerar: I can assure the hon. gentleman that there are none hanging around doing nothing. There are seventeen of the staff of the observatory at Ottawa paid out of this vote.


James Houston Spence: I do not know what they can be working at.

Supply-Indian Affairs


Mr. STEWART:: The minister said that
in the interests of efficiency an additional employee had been taken on. May I ask what are his duties and when he was taken on?


Thomas Alexander Crerar: The addition to the staff at the observatory is a young lady who was loaned in the first place from the statistical branch of the Department of Trade and Commerce. She has been at the observatory for a considerable time and is now being permanently transferred from the statistics branch to the observatory. I understand that she is highly efficient.


[Stage Direction]
Item agreed to.
Dominion aetrophysieal observatory- _
Expenses connected with the_ dominion astro-physical observatory at Victoria, B.C., $20,000.
Mr. PLUNKETT:: Will the minister tell the committee who succeeded Doctor Plaslcett at Victoria observatory and also explain the decrease in this vote? I understood the minister to say a moment ago that we had the second largest telescope in the world at Victoria, and one would think that this might necessitate a larger personnel.


Thomas Alexander Crerar: Doctor Harper succeeded Doctor Plaskett. He was Doctor Plaskett's assistant at the observatory.


D'Arcy Britton Plunkett: What is the reason for the decrease in this vote?


Thomas Alexander Crerar: As my hon. friend will have observed the decrease is not very large, being $1,203. It is due to the fact that the new employees who have been taken on the staff have come in at the minimum salaries.


[Stage Direction]
Item agreed to.
DEPARTMENT OF INDIAN AFFAIRS To provide for expenses connected with the administration of Indian Affairs, including salaries, supplies, relief, medical attendance, hospitalization, dwellings, agricultural activities, surveys, roads, bridges, irrigation, dyking, education, etc., and a grant of $100,000 approved by parliament in session of 1926-27, $4,241,100.
Richard Bedford Bennett: It is desirable that the minister should make as complete a statement as he can with respect to this whole Indian problem. I confess that during the last few years I have become considerably interested in it, and if the minister will take it up in detail and give us some idea of the present situation I think that would be appreciated by the committee.


Thomas Alexander Crerar: I confess that my knowledge of the whole Indian problem in Canada is not as intimate as I could wish, but I might say in a general way that the Indian population in Canada to-day is about 112,000,
tMr. Spence. 1
and is increasing. The fact that it is increasing makes the Indian problem deserving of the attention of public authorities with a view to studying the best methods for bringing education to the Indians, making them selfsupporting, and generally improving their situation. Undoubtedly a very .large number of Indians are on relief at the moment. I am speaking from memory, but I think I am correct when I say that about one-third of the Indian population of Canada has been on relief for the last two or three years. The rather superficial study that I have been able to give to Indian problems since I took charge of the department has inclined me to the view that the administration is rather expensive; that it costs a considerable amount of money and probably might be improved in some respects. I hope to study this problem before I come again to submit estimates to the committee, if it is my good fortune to do so.
There are further problems in connection with education. In this connection we sometimes run into a rather delicate situation. It is sometimes found that two or three denominations are carrying on their good work in one community, and this ocaesionally creates a problem. There is as well the question of hospitalization. If we are to discharge our obligations to the Indians in this connection, this matter will stand a very considerable amount of study. There is the problem of bringing the Indians to a better understanding of the methods of the white man and his way of living. At times I do not think we have acted wisely in this respect. In western Canada and in some parts of Ontario there are Indians who are making substantial progress towards becoming self-supporting. This is being achieved mainly through agriculture, but in the more remote parts of the country trapping and fishing, the traditional occupations of the Indian, are practically his only means of support. Our Indians are scatterred from Halifax to Vancouver and from the international boundary to the Arctic circle and one realizes the magnitude of the problem when this vast area is considered. I do not know that there is much more that I can actd to this statement.


Mr. TAYLOR (Nanaimo):: Has the minister investigated the complaints I forwarded him in connection with the Indians around Duncan, on Vancouver Island? It is claimed that their habitations have not been repaired for many years, and some of these are definitely in an unsanitary condition. It is stated also that they are being fined for fishing within their own reserve.

Supply-Indian Affairs


Thomas Alexander Crerar: I have not had an opportunity to look closely into the matters which the hon. gentleman has brought to my notice. However I assure him that they are not being overlooked.


James Samuel Taylor: I thank the
minister for his evident intention to look thoroughly into this matter.


Jacob Nicol: Mr. Chairman, I was very glad to hear the minister say that he is going to look carefully into the whole question of the administration of the Department of Indian Affairs. On checking over the public accounts for 1935 I notice that there is a great variation in the cost of different services rendered to the Indians. I assume that the item for hospitalization refers only to Indians. There seems to be a considerable variation in the salaries paid to the doctors on the different reserves, as well as a difference in the salaries of teachers and other officials. I notice also that in every case there is a considerable amount of supplies. Upon looking over these items I can see a good deal in the old saying: Lo, the poor Indian. According to the 1935 figures, we spent approximately 84,000,000 on the Indians. According to the present estimates before the house-and I assume the same ratio would apply in 1935-the Indians are receiving about 8250,000 in grants while salaries amount to a little over 3800,000. There seems to be a great field here for the well known ability of the minister to bring about a real reform in the management of this department. I shall be very .glad to support any recommendation he desires to make in an effort to see that the Indians get more of what is voted while the general cost is equalized.


Thomas Alexander Crerar: I appreciate the reference the hon. member for Davenport has made to my ability^ and I shall certainly endeavour to exercise it in the administration of this department. I think I am correct in saying that twenty-five years ago the cost of administration in Nova Scotia-I do not take this province for any particular reason, 'but mention it merely because the figures happen to stick in my memory-was around $10,000 or
812,000	a year. To-day it is almost ten times that amount. Hon. members will note that this general vote covers salaries, supplies, relief -I have stated already that approximately one-third of the Indians have been on relief for the last two or three years-medical attendance, hospitalization, dwellings, agricultural activities, surveys, roads, bridges, irrigation, dyking, and education. I am informed that forty-five per cent of the total
vote is used for educational purposes. I think there is some room for improvement and I hope to be able to indicate this to the committee should it be my good fortune to be dealing with these estimates next year.


Abraham Albert Heaps: The minister has not told the committee the number of Indians who come under this item.


Thomas Alexander Crerar: A little earlier I stated that the total number of Indians in Canada was approximately 112,000.


Abraham Albert Heaps: Would all the 112,000 come within the purview of the government?


Thomas Alexander Crerar: Yes.


Abraham Albert Heaps: Is the number increasing or decreasing?


Thomas Alexander Crerar: It is increasing. Practically the whole 112,000, I am informed, are under the care of the government.


Richard Bedford Bennett: The fact that the Indian population is increasing is in itself prima facie evidence that the Indians are being well looked after. Prior to a few years ago the Indian agents were not always medical men, nor are they yet; but an effort was made during the last regime to provide that if possible they should have some medical training. The result is, I believe, that this is the first time a report has been made to the house of an increase in the Indian population. My memory is that it was shrinking a few years ago; but during the last few years an effort has been made, whenever vacancies have occurred, to appoint as Indian agent, if possible, a medical man. As a result the children have been better cared for; tuberculosis has been brought under control; disease has diminished, and the habits of life of the Indians have improved.
I cannot speak of the Indians in the maritime provinces. The report I received with respect to them on one occasion was rather alarming, and a special effort was made to have some specific relief afforded them. They were in a rather bad way. In Quebec, apart from the large bands, there are small bands scattered over many sections of the province, and in Ontario, apart from the large reserves, there are numbers of bands of Indians. When we get into western Canada we find that usually they have excellent reserves. At Macleod the Bloods have a very fine reserve from which they receive substantial revenues. The Blackfoot Indians have sold large quantities of their land, sometimes by public auction and sometimes not, and considerable sums of
Supply-Indian Affairs

money have gone into their endowment fund. They have been greatly improved in their status during the last few years, for they have been fairly well to do. The Stony Indians, west of Calgary, are in a bad way. They are hunters and fishermen and during the last few years have suffered acutely. A good deal of money has been expended in improving facilities at Morley, and perhaps they are better off than they were a while ago. So far as British Columbia is concerned, reports from that province indicate that many of the Indians are in a pretty bad way, and a special effort was made to look after many of them.
I have been astounded at the enormous sums of money we have had to spend to accomplish the results. The year before last the situation was very acute, and when you realize that $4,000,000 has been spent on about
112,000	Indians, who themselves possess adequate resources in the way of reserves, I can only say that the closest supervision ought to be exercised over administration. I believe in many cases they get rations, and they have treaty money distributed to them under the terms of surrender they made to their interests in lands and the taking up of reserves. They have a certain sum in the way of treaty money, and then they have the interest on their own funds. I understand that they utilize their own funds for the construction of buildings.
One of the most difficult problems is that connected with education; I believe it is the outstanding problem in that regard. My memory is that the cost per head in connection with these institutions is what absorbs a very substantial part of this appropriation. That is a matter which perhaps can be carefully considered during the recess, but there are grave and delicate difficulties, as the hon. gentleman has said, by reason of the possibility of differences arising with respect to the religious denominations that should look after particular bands of Indians.
In the far north, most distressing tales came down two years ago of the condition of the Indians, and I hope that during this very hard winter they have not experienced the hardship they did that year; for in the western provinces, where the cold has been intense, the condition of the Indians in the last few weeks has been very trying. I think the relief measures afforded them have been as nearly adequate as possible.
Canada, I believe, has discharged its obligations to its wards about as well as has any country in the world, but during the last ten years there has been a decided increase in expenditures. The Indians have

been receiving medical attention and care which they never had before, and with the rations they have received they have been in a much better position, very much better as a matter of fact, than have many other sections of our population. I realize the minister's difficulty, and it is only fair to say that he is not responsible for expenditures that have occurred during the last fiscal year; he is responsible only for the sums he is asking for and for the work that will be done during the next fiscal year under existing conditions. But what is the S100,000 for?


Thomas Alexander Crerar: That, I am informed, is
a special vote given British Columbia under some legislation passed in 1926-27.


Richard Bedford Bennett: I was trying to ascertain what it was for; I did not know whether it was for the extinguishment of rights in Kitsilano or not. Perhaps the minister recalls that.


Thomas Alexander Crerar: I am informed that it is
in lieu of treaty money. Treaty money is not paid to Indians in British Columbia and this $100,000 is in lieu thereof. I might say, to augment what my right hon. friend has said, that this winter has proved a rather severe one with the Indians, and expenditures for supplies in the way of rations, clothing and feed for stock have been higher than they have been in the past few years. That of course is unavoidable considering weather conditions that have prevailed in western Canada for several months.
In reply to the hon. member for North Winnipeg I might give the details of this vote. The administration cost is $622,000, a very slight reduction from last year. That includes administrative services and Indian agents throughout the country. Education is of course the big item-this year $1,691,000.


Mr. BAKER:: Does the minister think
we are getting results for that amount of money?


Thomas Alexander Crerar: Frankly, I am not in a
position to pass fair judgment on that question, but I may say that that is a reduction of $280,000 from the previous year. It was with some regret that I asked for this reduction. The representations made to me by those having to do with the education of the Indians were all to the effect that the vote should be increased and not decreased, but at any rate that is what it is for the present year. The medical services absorb

Supply-Indian Affairs
$861,500. Then aids to Indians in various ways, implements of production, all the aids to get the Indians established-and we have not succeeded


Richard Bedford Bennett: Continue their establishment, I should say.


Thomas Alexander Crerar: -in our efforts yet- accounts for $931,000. That includes houses and repairs to houses and all that sort of thing. Then there is a small vote for irrigation and roads and surveys amounting to $34,000. That, roughly, is the break-up of the item of $4,241,100.


Abraham Albert Heaps: How many children are
being educated in the Indian schools?


Thomas Alexander Crerar: I am informed that there
are about 16,000 Indian youngsters receiving education at the present time in one form or another.


Mr. McCANN:: Is there any attempt on
behalf of the department to carry the education beyond the primary schools?


Thomas Alexander Crerar: I am informed there is
an effort, in this way, that an additional grant of $25,000 is given for the benefit of those Indian pupils who show exceptional capacity.


James Samuel Taylor: Is any attempt being made to train Indian girls as nurses in the hospitals in order that they may look after the sick of their own people?


Thomas Alexander Crerar: That is being done. I am not at the moment prepared to give the number, but several Indian girls have qualified as trained nurses and are being used, mostly in the Indian hospitals.


Abraham Albert Heaps: I do not know whether
the amount of $1,691,000 is too high or too low for educational facilities for Indian boys and girls, but it seems to me that the government is spending over $100 per annum for the education of each Indian child. That works out at considerably more than is being spent on education in the ordinary schools of the country. I think in our ordinary public schools this works out at about $50 or S60 per year. Can the minister explain why there is that great difference between the cost of educating a child in the ordinary city or town or village as compared with that of the Indian who is being educated in somewhat different surroundings?


Thomas Alexander Crerar: Yes. The explanation is
very simple. By far the greater number of Indian schools are residential schools. These youngsters come in from the reservations.
They live in the school; they are fed and housed and educated there. Of course that type of education is much more expensive than that which obtains in, for instance, a city school.


Ernest Edward Perley: Can the
minister give us a little information with respect to medical attention, more particularly as to any special work that is being done? How many doctors, for instance, are employed in this work in Saskatchewan, and what progress are they making with respect to stamping out tuberculosis, prevalent among the Indians?


Thomas Alexander Crerar: I shall have to give the information later to the hon. member as to the number of doctors employed in the Indian
service in Saskatchewan.


Ernest Edward Perley: I mean, in special work.


Thomas Alexander Crerar: I could not say as to that. I may be able to get that information. On the other question raised by the hon. member as to tuberculosis, that is a real problem so far as the Indian population is concerned. Already I have had some correspondence with one or two of the provinces that are making efforts to stamp out tuberculosis among the white population in order to see whether the work they are doing cannot be related to the Indian population as well. That is a problem which must be studied. I recall that in one of the schools in an Alberta reserve we have no facility for segregating children who have-tuberculosis in the incipient stages; at any rate the segregation of those children from the others is done in a very haphazard fashion. At the moment that problem ig engaging my attention,


Mr. DONNELLY:: What percentage of the schedule of medical fees is paid for surgical operations, or is the full schedule paid?


Thomas Alexander Crerar: Where special surgical work has to be done the fee paid to the doctor performing the operation is based upon what the workmen's compensation boards in various provinces allow for similar operations, or in some cases the fees are taxed by the department of health. I think I can assure the hon. member that the department is doing everything it reasonably can to protect the public interest in that regard. That was one of the matters I went into very early in my experience in the department.


James Samuel Taylor: Has it been found possible to police the reserves with Indians rather than white policemen?
Supply-Indian Affairs


Thomas Alexander Crerar: I am informed that the policing of some of the reserves in some of the minor work is being done in certain cases by Indians. That is a question which requires some study and, of course, some care. On the general principle of the matter I should say that to as great a degree as possible the Indians should be made self-supporting in the matter of policing, as in everything else.


Mr. WOOD:: Are the band funds or the endowment funds included in that appropriation of four millions odd?


Thomas Alexander Crerar: This is an appropriation by parliament for the maintenance of this work in all its varied aspects for the coming year, and it does not include expenditures from the band funds.


Mr. SENN:: Are all the funds for educational purposes voted by parliament, or do some of the funds come from funds of the bands that are held in trust by the government?


Thomas Alexander Crerar: I understand none of the band funds is used anywhere for educational purposes. Sometimes the increment of these funds is used for building houses and for improvements on the reserves, but not for education.


Mr. WALSH:: Are there any special classes on the reservation such as are established under our regular school system for retarded children, or any vocational schools or technical classes or anything of a specialized nature?


Thomas Alexander Crerar: I understand that many of the schools teach some handicrafts, but I do not know of any special classes for, shall I say, Indian children of low intelligence. There are none of those schools.


William Allen Walsh: Are all the teachers engaged by the government qualified teachers?


Thomas Alexander Crerar: I am informed that the teachers are practically all qualified teachers. There may be one or two who have been teaching for many years who are not qualified', but they are practically all qualified teachers.


William Allen Walsh: If there are any unqualified 'teachers does the minister not think, in view of the condition that prevails in the teaching profession at present, this is an opportune time to replace them by certified teachers?


Thomas Alexander Crerar: There are a few missionary teachers who have devoted practically all their lives to welfare work among the Indians,

and they are continuing in the spheres in which they have lived and carried on their work. The others, as I have intimated, are qualified teachers.


William Allen Walsh: What is the average salary paid to teachers engaged by the government for this work?


Thomas Alexander Crerar: I do not think I could give the average. That would involve a mathematical computation which at the moment I am not in a position to have made. These salaries range from SSOO up to SI,000 per annum and perhaps in a few cases beyond that.


Mark Cecil Senn: I wish to draw to the attention of the minister what I consider to be rather an injustice on a certain reservation in Ontario. A number of Indian children are attending secondary schools, and the cost of their instruction in those schools is paid, I understand, on an attendance basis. In the same reservation are two or three clergymen who have children who are desirous of attending high school. But unfortunately the high school is in another county; the band is not willing to pay for their tuition; the Indian department up to the present has not been willing to do so, and 'because that particular locality does not pay any taxes to the county it is not willing to pay for their tuition. The result is that the children are unable to attend high school, as the father who is a missionary is unable to pay. I think I brought the matter to the attention of the department once before, without any result. I would ask the minister to give it his serious consideration, because a hardship is being worked on the children of missionaries who are endeavouring to carry on in that reservation.


Thomas Alexander Crerar: This is the first intimation I have had of the problem to which my hon. friend refers. I shall be very glad to get the facts of the matter and, if there is any injustice, see whether it cannot be corrected. I understand the hon. member is referring to children of the missionaries?


Mark Cecil Senn: The children of white missionaries. They are not receiving any tuition simply because the band funds are not available, the government grant is not available and the county in which they reside is not willing to pay for their tuition.


Thomas Alexander Crerar: May I ask how many children are involved?


Mark Cecil Senn: Only two that I have knowledge of. There are two missionaries in that

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reservation. The matter was brought to my attention some two or three years ago. I cannot say now just how many children there might be, two or three anyway.


Thomas Alexander Crerar: I shall be glad to have my officials look into that matter and give me a report on it.


Mr. GREEN:: What is the approximate
number of whites engaged in this work with the Indians, and what are the types of work?


Thomas Alexander Crerar: I assume the hon. member means in the total administration in Canada?


Howard Charles Green: Yes.


Thomas Alexander Crerar: Between 900 and 1,000
regular employees, I am informed. That includes teachers.


Howard Charles Green: And the types of work they do?


Thomas Alexander Crerar: They vary. Some are
doctors, some nurses, some school teachers, some farm instructors, some Indian agents supervising the reserve they have charge of, and I daresay there are several other categories if I could think of them.


Mr. BROOKS:: Is there any system of compulsory education for Indian children? I notice that a good many Indian families wander about the country during the school year and the children do not seem to be at school.


Thomas Alexander Crerar: My deputy informs me that the Indian Act provides for a measure of compulsion in regard to the education of Indian children, to what extent I regret I am not at the moment able to say. But the fact that the Indian population in Canada is roughly 112,000, and that more than 16,000 Indian children are attending school, is, I think, a pretty fair indication that their educational needs are not suffering badly.


Mr. McNIVEN (Regina):: Is any sum
provided in this vote for the new Indian school at Lebret and the new Indian hospital at Fort Qu'Appelle? Could the minister also tell us the cost of the new school at Lebret and also of the Indian hospital at Fort Qu'Appelle, for both the erection of the buildings and the furnishings? Further, I should like to know what accommodation there is at the new Indian school at Lebret and at the hospital at Fort Qu'Appelle.


Thomas Alexander Crerar: I am informed that the school cost approximately $200,000 and the hospital building approximately S100,000. In
addition to that sum a further amount will be required for the hospital to equip it with beds and blankets and the sort of things that are required in a hospital.


Donald Alexander McNiven: What accommodation is there for pupils in new Indian schools at Lebret, Saskatchewan?


Thomas Alexander Crerar: Accommodation for 250 children.


Donald Alexander McNiven: How many are there now?


Thomas Alexander Crerar: The new school is not opened yet.
Mr. WOOD1: I was not expecting that this vote would be considered to-night. I am sorry I have not before me the information I should have liked to present concerning the Six Nations Indians who happen to reside in	the	constituency I	have	the honour	to
represent. Of the 112,000 Indians in Canada
5,000	live in the reserve adjacent to the city of	Brantford, and in	the	constituency	ofBrant.	In my view	they	should not	beclassed with the average Indian of the dominion, when we learn that about thirty-three per cent of the Indians are on relief. From a conversation I had recently with the superintendent at Brantford I learned that of	the	5,000 Indians	in the Six Nations
reserve only eighty-one are on relief. That would seem to indicate that they are capable in the discharge of their duties and are able to take care of themselves. For those reasons they have advanced more than many others of the aborigines of the dominion.
I believe that until about three years ago they administered their own educational system, but for some reason or another that privilege was taken away from them. I have not been able to ascertain the reason. The department gave the excuse that they had appropriated the whole of the education of Indians on reserves, and that because of that they must take away from the Indians the administration of their schools. In passing may I observe that the Indians built their own schools from their own band funds, and prior to that time had contributed about half of the cost of their own education. They enjoy a reasonable amount of autonomy due to the fact that they elect their own council, and it seems to me it was most unfortunate that the Indians were deprived of a degree of autonomy which, by virtue of their advance, we had the right to encourage them to go further; we ought to give them more autonomy and more control over their affairs, in so far as they are able to manage them.
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In that way we shall make good citizens of them.
In the few moments I shall speak-and I shall not take too long-may I state that the Indians on the Six Nations reserve are in a somewhat different position from that of the average of the aborigines of Canada, because they compare very favourably with our United Empire Loyalists. An agreement was made between Captain Joseph brant and the British government whereby he w'ould extend his loyalty towards the British at the time of the American revolution. The loyalists were granted certain concessions if they would remain true to the British crown. They came to Canada and were granted a piece of land extending six miles on either side of the Grand river, from its mouth to its source. They did not need all that land and for that reason they sold a portion of it. The money was set aside and was held in trust in Canada as a trust fund for the maintenance of the Indians. This was a good business proposition, and I believe we have every reason to commend the Indians for their astuteness in having a bank account. I only wish the government had as good a bank account as have those Indians, because if that were so we would be in a much better position than we are in to-day. The matter upon which I am speaking has been a perennial subject. I believe my predecessor, Mr. Smoke, described conditions possibly better than I am in a position to do, because I know he has made a study of the subject. At the present time I am going through eighty-six pages of legal phraseology. So far I have gone only about half way through, but it has been my endeavour to learn the history oi the Six Nations Indians.


Richard Bedford Bennett: Read Mr. Smoke's speech and you will get the story.


George Ernest Wood: Yes, and I commend Mr. Smoke for his approach to the subject. Unfortunately I have not been able to get all the facts in the short time I have had at my disposal, but to the best of my ability I have endeavoured to do so in my own way. For that reason I shall not go into detail, because I do not wish to misplace the ancient characters, or to put them in a wrong light.
It seems, however, that about one hundred years ago a scheme knowm as the Grand river navigation project was devised. It was incorporated in 1832. Trustees were empowered to enter upon the crown lands, or the lands belonging to the Six Nations Indians, after making compensation. The funds belonging to these Indians were at that time held by trustees. In 1832 the Hon. J. H. Dunn, then

Receiver General of Upper Canada, had charge of the public moneys of the then province. He was an active exponent of the policy of canal construction, and held the office of president of the Welland Canal Company. The Grand River Navigation Company acted more or less as a subsidiary and was to supply the water to the Welland canal. By virtue of that arrangement the two companies worked together.
Mr. Dunn filled the further position of trustee of the Six Nations Indians. He appears to have taken a most active part in their money affairs. On April 3, 1834, an order in council was passed stating the Indians desired that their moneys invested in British funds should be transferred to Canada to be invested in provincial debentures or other government securities. I shall not go into details as to the ramifications of the charters or supplementary letters patent, in view of the various changes in the financial structure, but briefly I would state that they did get a promise from Sir John Colborne, the then Lieutenant Governor of Upper Canada, to assist them in an endeavour to form a company to permit trade in western Ontario via the Grand river. He was successful in getting sufficient interest among men who had money to invest to organize the company.
As time went on the Buffalo and Goderich line was built, which was another change that took place in the transportation system, thus impairing the possibilities of the Grand River Navigation Company. The competition of the railway would largely impair the possibilities of the canal. These men found that they were going to be left in a precarious position. For some reason, of which at the present time I am not aware, they wished to withdraw their obligations and pledge to Sir John Colborne and, to make a long story short, those who were responsible substituted the Indian funds to purchase stock, and put those funds into a precarious investment.
The association of the Receiver General with the Grand River Navigation Company placed the government in a rather unfortunate position, for it meant that they were investing funds which they held in trust for the Indians in a company in which some of them were personally interested. You will see, Mr. Chairman, that the security of the funds of the Six Nations Indians was thus jeopardized, and the Indians in consequence feel that they have been more or less exploited through this scheme of organizing a joint stock company and investing it in their funds which were held in trust for them by the government of the day. Whether the powers of a trust company had been defined at that time or not, it is

Supply-Indian Affairs
not lawful, as I understand the matter, for a trustee to invest in a joint stock company funds committed to his care.
It might be said that all this happened one hundred years ago and that we have no obligation to-day. While there may not be a legal obligation-and I cannot speak as to that-undoubtedly there is a moral obligation, and that moral obligation was incurred through the filching from the coffers of the Indians of this $160,000 of trust funds which belonged to the Six Nations. I do not say that this was done with dishonest intent; it might have been done with the intention of serving a good purpose, but the unfortunate point is that the money was held in trust for the Indians and the government had no right to invest it in a joint stock company.


Thomas Alexander Crerar: When did that happen,
may I ask?


George Ernest Wood: 
Thomas Alexander Crerar: I am afraid that the claim of the Six Nations Indians, a claim that originated over a hundred years ago, to $160,000, with accumulated interest, is one that the government could not entertain. I do not know the merits or demerits of the claim that the hon. member for Brant has put forward. Since this question originated 102 years ago or thereabouts, the federal government as we know it to-day cannot be responsible for the matter. If my memory of history is correct, this happened during the time when Upper Canada was still being governed as a crown colony. The hon. member spoke to me some little time ago about this question, but I have not had an opportunity of going into it. I am afraid I cannot hold out any hope that we will meet a claim, which originated over 100 years ago for $160,000 with interest to date. I am afraid that a serious consideration of such a proposal would send my colleague, the Minister of Finance (Mr. Dunning) to the hospital.
There are some 6,000 Indians in the reserve to which my hon. friend refers. From information I have been able to obtain, I understand they have done remarkably well. There is a question whether the Indian Act, which after all is the act under which matters pertaining to the Indian population of Canada are administered, comes into conflict with the suggestion he makes. At the moment I cannot pass any critical judgment on his request. My information is that the majority of the teachers in the schools on the Brant reserve are of Indian origin. My hon. friend shakes his head. Perhaps my information is incorrect, but I understand that at any rate a number of the teachers have been trained from Indians who have been pupils in the years immediately past. It is desirable as a general rule that the Indians should be made as independent as possible of outside assistance. No one would have greater pleasure than I if the Indians throughout Canada could attain a position whereby they would be not only self-supporting but able to look after such matters as education and other things as their white brothers do.


Mr. CLARK (York-Sunbury):: I am very much interested in these Indian reserves and I was pleased to hear the minister so sympathetic toward and so willing to investigate the Indian problem. I have known many Indians for many years and at times I have been ashamed of their treatment by the Indian agents. More attention should be given to the employment of these agents. Only those who have a certain sympathy for the Indian,
I Mr. Wood.]
who would not have a disposition to exploit them, who would desire to help them, should be employed in this capacity. I recall having employed an Indian guide who was a fine type of man, but I found out that his relatives were being treated very unfairly by the Indian agent.


Mark Cecil Senn: I listened with considerable interest to what the hon. member for Brant (Mr. Wood) had to say about the funds which were invested in the Grand River Navigation Company. A part of this reservation is in my own riding and I know the Indians feel very strongly on the matter. I do not intend to carry this matter any further as the minister has given his answer. I was also interested in the allegation of the hon. member that political interference was present in the appointment of teachers on the reservations. I have had many interviews with the Indians about this very matter. Prior to the change which took place in 1932, as described by the hon. gentleman, there was considerable jealousy and quarrelling among the Indians as to who should teach in their schools. At that time the appointment was made by the Indian council and it often became a matter of politics within the reservation. From time to time the personnel of the council would change, and teachers were changed to suit the opinions of those newly elected. I believe this was one of the reasons why the change was made giving the Indian department the appointment of teachers.


Mr. WERMENLINGER:: What amount in this item will be used for the construction of dwellings? Will this cover repairs to dwellings and the construction of new buildings? What amount is to be spent in the village of Caughnawaga for this purpose? This village is just across from Verdun on the main highway to the United States by way of Malone and I think it is important that it should present a good appearance. I should like to know what amount is to be spent.


Thomas Alexander Crerar: I have not the amount for Caughnawaga. The total amount for dwellings is $19,350, but the hon. member will bear in mind that that covers the whole vote.


Richard Bedford Bennett: The whole of Canada.


Thomas Alexander Crerar: The whole of Canada. I am not at the moment in a position to say what portion of the vote will be applied to Caughnawaga.


Richard Bedford Bennett: That would be exclusive of band funds.

Supply-Indian Affairs


Thomas Alexander Crerar: That is exclusive of band funds.


Edgard Jules Wermenlinger: Would that be for new dwellings?


Mr. POTTIER:: How many Indians are there in Nova Scotia?


Thomas Alexander Crerar: Approximately 2,000.


Mr. DUPUIS:: The hon. member for Verdun spoke of the reserve at Caughnawaga.


Ernest Lapointe: The hon. member is no longer there.


Vincent Dupuis: No; I was disfranchised by the previous administration and forced to move eastward. Nevertheless I take an interest in Caughnawaga and I notice that the leader of the opposition has still a weakness for it. I daresay he recalls his last visit there. In that reserve, which is one of the largest in Quebec, the Indians have a territory of approximately
11,000	acres of good farm land which is practically without cultivation except by ' white people who rent the farms. Very often we have requests from these white people, who are on the reserve with the permission of the Department of Indian Affairs, to investigate complaints they make to the effect that they are not being well treated. In some instances these white men are barely tolerated on the reserve, and not being able to get work they are on relief. They have not the means of supporting themselves and they are in a peculiar position. Though they live on the reserve, the Department of Indian Affairs is not obliged to make provision for them, and the provincial government, under the relief laws, is not bound to support them. They are therefore left without support.
It is a matter of importance for the department to come to the rescue of these white men in view of the fact that the department itself allows them to live there. A considerable quantity of land there has been abandoned, and I suggest to the government that it would be wise to look into the situation and see whether it would not be better to allow these Indians to sell this very important piece of land, either by auction or otherwise. It is important inasmuch as it is near so large a centre as Montreal, and the Indians are not inclined to cultivate it. They are rather inclined to specialize in hazardous work, such as employment in connection with the Dominion Bridge Company or other steel works. This is their only occupation, and if the Department of Indian Affairs were allowed to sell this large area the amount derived from its
sale could be used for the benefit of the Indians themselves and would assist the department in the administration of the reserve.
I make this suggestion to the department in good faith, hoping that they will take action. As the hon. member for Brant stated-, the Indians of Caughnawaga generally speaking are likely to attain the same level as the so-called civilized white man, and I think if they were given more freedom, if they could inspire the government with a little more confidence and were allowed to sell their land on certain conditions, within a few years this large area of good land could be disposed of, one farm after another, so that the people in the surrounding district might use it for farming purposes.


Richard Bedford Bennett: How many Indians are there?


Vincent Dupuis: Around 3,800.
Mr.CRERAR: Less than that; a little under 3,000.


Vincent Dupuis: As matters stand now, it would cost the Department of Indians Affairs a considerable sum to take care of these Indians properly from the point of view of education and hygiene. For the most part the village is built on rook, so that the construction of sewers and a water system would cost a great deal; the department would have to spend too much. For this reason, indicated by the officials of the department when I investigated the matter, the inhabitants are unaible to follow the rules of hygiene, and the doctors themselves say that in Caughnawaga some of the diseases that are prevalent on the reserve are undermining the health of the population. I believe the population of this particular reserve is diminishing, owing to the fact that at present the department is unable to give the Indians the legitimate attention they should receive.
If the government would accept this sug-' gestion and allow the Indians to sell their farms, retaining the proceeds at their disposal, the majority of the Indians would follow the ordinary pursuits of life, while those who preferred to retain their status could be more easily taken care of.
Another aspect of the question which interests me is hospitalization. If it is as it was when I was member for Laprairie-Napier-ville, they have an old building as their hospital which is far too small for the needs of the reserve. If the department were to spend the amount required for that purpose the cost would be considerable, because I think it would have to erect a new building. I
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do not want to embarrass the minister. I make this suggestion only with the hope that the department will study the necessity of applying this policy. But may I know from the minister how much money has been voted this year for Caughnawaga, and especially how much is going to be applied for the hospital and for education?


Thomas Alexander Crerar: So far as disposing of a part of the reserve for farming purposes to white men, as the hon. member suggested, is concerned, it is necessary in all cases to get the approval of the band to the surrender of any of their property. I am not entirely familiar with conditions surrounding such a surrender in Quebec, but I understand that the point arises that if a surrender is made it has to be made to the crown.


Vincent Dupuis: I think the provincial government, if the question were stated seriously, could enter into an agreement whereby if the land is to be abandoned by the Department of Indian Affairs it would not revert to the crown as represented by the provincial government, but the Quebec government could come to an agreement allowing the Department of Indian Affairs to sell that land. I know this question involves some difficulties which were not solved in the past, but I discussed this matter with the provincial government some years ago, and if my memory serves me aright, I believe a solution of the problem can be found.


Thomas Alexander Crerar: The consent of the Indians would be required to any transaction of that kind. With regard to the other point that my hon. friend mentioned, namely, the presence of white people on the reserves, that presents a rather difficult problem. It has occasionally happened that a white man has married an Indian woman of the reserve. He may die, and then the Indian woman, who has taken the status of her husband, may with her children return to the reserve. Under the [DOT]Indian Act they are no longer Indians, but of course they are living on the Indian reserve, and the practice, I am informed, has been to supply them with relief where that is necessary. This is one of the problems that arise perhaps inevitably in the administration of Indian affairs. I shall be very glad to keep in mind the observations made by my hon. friend. I am sorry to say that I am not in a position to state just how far we shall be able to go in meeting his wishes.


Mark Cecil Senn: Referring again to the question of money that was invested by the crown some years ago in the Grand River Navigation Company and which belonged to the Six Nations Indians, I discussed this matter at one time with a former Minister of the

Interior, the Hon. Charles Stewart. He told me at that time that in lieu of this, the government had been granting some ten thousand dollars annually for the upkeep of the roads on this reservation. Is that item of ten thousand dollars included in this item?


Thomas Alexander Crerar: I am sorry that at the
moment I cannot give a definite answer to my hon. friend's question. My deputy tells me that some special grants are given to this reserve. Whether or not one is given in consideration of a claim which they believe they have against the crown, and to which the hon. member for Brant has referred, I cannot say.


Mark Cecil Senn: I should not like the minister to have the impression that I said "in consideration of this claim"; the amount was rather as a satisfaction to them in lieu of the claim itself. I know this money has been expended, and very well expended, on the reservation for the past few years in the building of roads, although the roads are not nearly completed, and I suggest to the minister that the grant should be continued if possible.


Thomas Alexander Crerar: We shall have that under
consideration.


Mr. LOCKHART:: Do I understand the minister to say that compulsory education is definitely established on the Indian reserves as well as in other public school systems in Ontario or the dominion? I could not catch his answer because of interruptions. I am referring to compulsory education.


Thomas Alexander Crerar: According to the information I have, it was intended under the Indian Act that educational facilities should be made available to Indian children as fa.r as possible, and that where they were available the Indian children should take advantage of them. In that sense there is a limit to compulsion. But my hon. friend probably knows that in attempting to enforce compulsory education, even in ordinary white communities, certain difficulties are encountered. In Indian communities those difficulties are not less; perhaps they are increased.


Norman James Macdonald Lockhart: Is the adolescent age still applicable to Indian children the same as it is in other communities? The adolescent age is sixteen years.


James Samuel Taylor: May I ask
whether there is any allocation of that nineteen thousand dollars plus for the building and repair of houses in the Cowichan reserve?

Unemployment-Relief Camps


Thomas Alexander Crerar: I cannot say at the
moment. If the Cowichan reserve deserves some of the appropriation it is probably getting it.


Mr. BRADETTE:: There are two problems I want to bring to the attention of the Indian department. One is connected with the extension of the Timiskaming and Northern Ontario railway from Cochrane to Moosonee. That has created a new situation.


Some hon. MEMBERS:: It is eleven
o'clock.


Joseph-Arthur Bradette: I was asking the indulgence of the house. But I am satisfied to let the matter go.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, February 26, 1936